Dalian Refrigeration Co., Ltd. 2013 Annual Report Dalian Refrigeration Co., Ltd.
2013 Annual Report
April, 2014
Dalian Refrigeration Co., Ltd. 2013 Annual Report Section 1 Important Notice, Table of Contents, and Definitions The directors and the Board of Directors, the supervisors and the
Supervisory Board, and Senior staff members of Dalian Refrigeration Co., Ltd. (hereinafter referred to as the Company) hereby confirm that there are not any important omissions, fictitious statements or serious misleading
carried in this report, and shall take all responsibilities, individual and/or joint, for the reality, accuracy and completeness of the whole contents.
Chairman of the Board of Directors of the Company Mr. Ji Zhijian, Financial Majordomo Mrs. Rong Yan and the head of Accounting Department Mrs. Mao Chunhua hereby confirm that the financial report of the annual report is true and complete.
All the directors have attended this Board meeting of the Company.
The profit distribution proposal reviewed and adopted at this Board meeting of the Company is: to take the total share capital of the Company as of Dec. 31, 2013 as the base number and pay to all shareholders the cash dividend of 1.5 yuan (inclusive the tax) and 0 bonus shares per 10 shares, without capital reserve to be converted into share capital.
This report is written respectively in Chinese and in English. In the event of any discrepancy between the two above-mentioned versions, the Chinese version shall prevail.
Dalian Refrigeration Co., Ltd. 2013 Annual Report CONTENTS
Section 1 Important Notice, Table of Contents, and Definitions...........................................2 Section 2 About the Company.............................................................................................6 Section 3 Summary of Main Accounting Data and Financial Indicators...............................8 Section 4 Board of Directors' Report.................................................................................10 Section 5 Important Issues.................................................................................................23 Section 6 Change in Share Capital and Shareholders' Information.....................................27 Section 7 Information on the Company’s Directors, Supervisors, Senior Management and Staff...................................................................................................................................30 Section 8 Corporate Governance.......................................................................................37 Section 9 Internal Control..................................................................................................40 Section 10 Financial Report...............................................................................................41 Section 11 Contents of Reference Documents...................................................................103
Dalian Refrigeration Co., Ltd. 2013 Annual Report Definitions
||||
|-|-|-|
|Defined item|Stands for|Meaning|
|Reporting period|Stands for|From Jan. 1, 2013 to Dec. 31, 2013|
|The Company, this Company|Stands for|Dalian Refrigeration Co., Ltd.|
|||Wuhan New World Refrigeration Industries Co., Ltd., one of the|
|Wuxin Refrigeration|Stands for|controlled subsidiaries of this Company, where the Company holds 51%|
|||of its shares.|
|||Dalian Sanyo Compressor Co., Ltd., one of the mutual shareholding|
|Dalian Sanyo Compressor|Stands for|companies of the Company, where the Company holds 40% of its|
|||shares.|
|||Dalian Sanyo Cold Chain Co., Ltd., one of the mutual shareholding|
|Dalian Sanyo Cold Chain|Stands for|companies of the Company, where the Company holds 40% of its|
|||shares.|
|||Dalian Sanyo Refrigeration Co., Ltd., one of the mutual shareholding|
|Dalian Sanyo Refrigeration|Stands for|companies of the Company, where the Company holds 40% of its|
|||shares.|
|||Dalian Fuji-Bingshan Vending Machine Co., Ltd., one of the mutual|
|Dalian Fuji-Bingshan|Stands for|shareholding companies of this Company, where the Company holds|
|||49% of its shares.|
|||Keihin Grand-Ocean Cooling & Heating Industry (Dalian) Co., Ltd.,|
|Keihin Grand-Ocean|Stands for|one of the mutual shareholding companies with this Company, where|
|||the Company holds 20% of its shares.|
|||A compressor with adjustable volumetric ratio to ensure the compressor|
|Screw compressor in new series|Stands for||
|||set in energy saving condition throughout the year.|
|||A high-efficiency and energy-saving full-hermetic compressor using|
|Scroll compressor|Stands for||
|||advanced technology|
|OA|Stands for|Office Automation|
|5S|Stands for|Seiri, Seiton, Seiso, Seiketsu, and Shitsuke|

Dalian Refrigeration Co., Ltd. 2013 Annual Report Notice about Significant Risks
There is no significant risk having adverse influence on attainment of the Company's future development strategy and business targets. The
paragraph "Development Prospect of the Company" in Section 4 of this Annual Report describes major risks the Company may be confronted with, including the risk of fiercer industrial competition, and the risk of
backward production equipment and process flow. See the related sections for the countermeasures to be taken by the Company.
Dalian Refrigeration Co., Ltd. 2013 Annual Report Section 2 About the Company
I. Company information
|||
|-|-|
|Short form of the stock|DALENG GUFEN; DALENG-B|
|Stock code|000530; 200530|
|Listed stock exchange|Shenzhen Stock Exchange|
|Legal name in Chinese|大连冷冻机股份有限公司|
|Legal English name and abbreviation|Dalian Refrigeration Co., Ltd. DRC|
|Legal representative|Ji Zhijian|
|Registered address and office address|888 Xinan Road, Shahekou District, Dalian|
|Post code|116033|
|Internet web site of the Company|www.daleng.cn|
|E-mail of the Company|000530@bingshan.com|

II. Contact persons and information
||||
|-|-|-|
||Secretary of the Board of Directors|Authorized representative for securities affairs|
|Name|Song Wenbao|Song Wenbao (proxy)|
||DALENG GUFEN Securities Department, No.|DALENG GUFEN Securities Department, No.|
|Address|||
||888, Xinan Road, Shahekou District, Dalian|888, Xinan Road, Shahekou District, Dalian|
|Tel.|0411-86538130|0411-86538130|
|Fax|0411-86654530|0411-86654530|
|E-mail|000530@bingshan.com|000530@bingshan.com|

III. Information disclosure and place of preparation for inquiry
|||
|-|-|
|Name of the newspaper designated by the Company for|China Securities Daily and Hong Kong Commercial|
|information disclosure|Daily|
|Address of the website designated by China Securities||
||http://www.cninfo.com.cn|
|Regulatory Commission for publishing this Annual Report||
|Place where this Annual Report was prepared for inquiry|Securities Department of the Company|

IV. Alteration to the registration
|||||||
|-|-|-|-|-|-|
||||Registered number|||
||Registration||of Business License|Registered number for|Organization|
|||Registration place||||
||date||of the Corporate|taxation|code|
||||Legal Entity|||
|||No. 888, Xinan||||
|||||DA GUO, DI SHA||
|Initial registration|Dec. 18, 1993|Road, Shahekou|2102001100326||24236130-0|
|||||(ZHI) 210204242361300||
|||District, Dalian||||
|Registration at the||No. 888, Xinan||||
|||||DA GUO, DI SHA||
|end of the|Mar. 31, 2014|Road, Shahekou|210200000266757||24236130-0|
|||||(ZHI) 210204242361300||
|reporting period||District, Dalian||||
|Change in main business since the||||||
|||No change||||
|Company was listed||||||
|Changes in the holding shareholder||No change||||

Dalian Refrigeration Co., Ltd. 2013 Annual Report V. Other related information
Accounting firm engaged by the Company
|||
|-|-|
||Da Hua Certified Public Accountants (Special General|
|Name of accounting firm||
||Partnership)|
||12/F,7th Building No.,16 Xi Si Huan Zhong Road, HaiDian|
|Office location of accounting firm||
||District Beijing, China|
|Name of signing certified public accountant|Yang Yingjin ,Wang Shuhuan|

Sponsor the Company appointed for performance of the consistent supervision duty in the reporting period
□ Applicable√ Not applicable
Financial consultant the Company appointed for performance of the consistent supervision duty in the reporting period□ Applicable√ Not applicable
Dalian Refrigeration Co., Ltd. 2013 Annual Report Section 3 Summary of Main Accounting Data and Financial Indicators
I. Main accounting data and financial indicators
Did the Company retroactively adjust or restate the accounting data of previous years due to change in the accounting policy and correction of accounting mistakes?
□ Yes√ No
||||||
|-|-|-|-|-|
||||Increase/decrease||
||2013|2012|compared with|2011|
||||previous year (%)||
|Operating revenue|1,535,706,911.25|1,521,979,266.15|0.9%|1,863,253,549.47|
|Net profit attributable to shareholders of listed companies|153,006,057.13|117,142,066.15|30.62%|81,621,060.33|
|Net profit belonging to the sharehol ders of listed companies after|121,207,821.52|123,788,117.10|-2.08%|15,699,415.00|
|the deduction of non-recurring profit and loss|||||
|Net cash flow from operating activities|7,630,456.44|-66,860,885.98|111.42%|168,363,149.93|
|Basic earning per share|0.44|0.33|33.33%|0.23|
|Diluted earnings per share|0.44|0.33|33.33%|0.23|
||8.27%|6.63%|Increase 1.64percentage points|4.71%|
|Weighted average return on net asset yield|||||
||||Increase/decrease||
||At the end of 2013|At the end of 2012|compared with|At the end of 2011|
||||previous year（％）||
|Total assets|2,967,390,234.89|2,937,190,656.69|1.03%|3,053,660,921.27|
|Owner's equity attributable to shareholders of listed companies|1,907,018,190.46|1,808,800,737.71|5.43%|1,748,822,103.82|

II. Difference of accounting data between as per Chinese accounting standards and as per International Accounting Standards
The difference of accounting data between as per Chinese Accounting Standards and as per International Accounting Standards was 0.
III. Non-recurring profits and losses and their amounts
|||||
|-|-|-|-|
||2013|2012|2011|
|Disposal gains and losses of non-current asset|33,844,950.09|-22,341,252.74|52,845,646.18|
|Tax returned/reduced by chance|905,596.59|||
|Government subsidies included in current profit or loss|7,290,805.05|13,090,280.89|12,677,393.52|
|Disposal gains from investments on financial assets available for sale|||20,903,931.90|
|Other non-operating revenue or expense|1,121,112.19|1,097,771.60|2,325,576.15|

Dalian Refrigeration Co., Ltd. 2013 Annual Report
|||||
|-|-|-|-|
|Influence on income tax|10,592,590.74|-2,218,545.09|21,998,451.02|
|Influence on minority shareholders|771,637.57|711,395.79|832,451.40|
|Influence on net profit|31,798,235.61|-6,646,050.95|65,921,645.33|

Dalian Refrigeration Co., Ltd. 2013 Annual Report Section 4 Board of Directors' Report
I. Summary
The company, as the largest industrial refrigeration equipment production enterprise in China, is committed to developing the business of industrial refrigeration, food freezing and cold storage, central and commercial air-conditioning and refrigeration components, having covered the key areas of the refrigeration industrial chain and forged the most complete cold and hot industrial chain in China.
In face of a lot of unfavorable factors in 2013, the company took the initiative actively, competed to seize opportunities, strived to open up market externally, laid a high emphasis on basic management internally, promoted comprehensive reform in an orderly way and tried the best to fulfill the operating plan target. In 2013, the Company made the sales income of 1,535.71 million yuan, accounting for95.39% of 1,610 million yuan of theCompany’s annual business indicator for 2013, with a year-on-year increase of0.9%; the total amount of profit of 184.75 million yuan, and the total amount of profit of 142.99 million yuan after deducting the profit from the warehousing land use right of the company was collected and stored, accounting for105.92% of 135 million yuan of theCompany’s annual business indicator for 2013, with a year-on-year increase of7.29%.
Within the reporting period, the company made positive and effective changes and practices in such aspects as perfecting the marketing management mode, broadening the sales channels, adjusting the marketing strategies, etc. It responded to market changes actively and strived to expand the market share by taking such changing initiatives as participating in China Refrigeration Exhibition in a unified group image, holding national distributor meetings, establishing sales directors in national ten major sales regions, reforming the salesperson distribution system, perfecting after-sale maintenance and warranty, etc. and by carrying out such characteristic activities as return visit to key customers, training to employees of key customers, etc.
Within the reporting period, the company perfected the basic management, enhanced the manufacturing ability and increased both efficiency and economic benefits by taking such changing initiatives as adjusting the organizational structure and mid-level cadres, erecting the OA basic platform, promoting 5S activities, carrying out new work modes, perfecting the distribution system, etc. Within the reporting period, the company centered particularly around the direction of new type environmentally friendly and efficient refrigeration compressors, intelligent, energy-saving type products to do new product R& D and make optimum design of existing products, having fulfilled 16 items of new product R& D and technical innovation such as CO screw refrigeration 2
compressor unit, new type small cold storage, etc.
Within the reporting period, Dalian Sanyo Compressor, in which the company participates and being a domestically leading vortex compressor producer, highly emphasized the commercial air-conditioning market and continued to show its scale effect by realizing a sales income of RMB 2.4 billion yuan, up by11% from that in the same period last year; a net profit of RMB 167 million yuan, up by36% from that in the same period last year. The accumulated production volume of scroll compressor has exceeded 10 million sets. Within the reporting period, Dalian Sanyo Cold Chain in which the company participates centered around retailing industry transformation to develop new products and provide more excellent comprehensive cold chain transportation solutions for chain enterprises. By carrying out in-depth innovation activities, it has improved the production efficiency, saved labor costs. Under the influence of insufficient oversea ordering and Japanese Yen depreciation, the sales income and the net profit reduced as compared with the same period last year.
Within the reporting period, Dalian Sanyo Refrigeration in which the company participates realized an optimum configuration of large air-conditioner business resources with the sales income increasing by50% as compared to the same period last year by integrated operation with Dalian Sanyo Air-conditioner. Under the influence of Japanese Yen depreciation, there was an exchange loss which influenced the realization of net profit.
Within the reporting period, Keihin-Dayang in which the company participates made a new progress in opening up market. The branch company in Foshan was put into production formally, realizing product supply localization for local customers, upgrading the market service efficiency and quality and expanding the enterprise scale.
Within the reporting period, Dalian Fuji-Bingshan Automatic Vending Machine in which the company participates developed a large automatic vending machine and declared 20 items of utility model patents. The second factory was put into production formally, as a result, the enterprise product capacity was increased.
During the reporting period, the Company further to perfected foreign equity investment. To highlight the main business, whole equity of Dalian Jiale Vending Machine Marketing Co., Ltd. owned by the Company were transferred; follow-on invested in Wuhan-New World Refrigeration Industrial Co., Ltd. and Dalian Bingshan Group Import& Export Co., Ltd.; and established a joint venture MHI Bingshan Refrigeration (Dalian) Co., Ltd.
Dalian Refrigeration Co., Ltd. 2013 Annual Report II. Analysis of main business
1. Summary
In 2013, the Company made the sales income of 1,535.71 million yuan, accounting for95.39% of 1,610 million yuan of theCompany’s annual business indicator for 2013; and the total amount of profit of 142.99 million yuan after deducting the profit from the warehousing land use right of the company was collected and stored, accounting for105.92% of 135 million yuan of theCompany’s annual business indicator for 2013.
Reason for the Company's actual business performance decrease or increase by20% or higher compared with the earnings projection for this reporting period that has been disclosed in public
□ Applicable√ Not applicable
2. Sales income
In the reporting period, the Company's sales income increased by0.9% on a year-on-year basis.
Was the Company's sales income on material objects more than that on labor service?
√ Yes□ No
||||||
|-|-|-|-|-|
|||||Year-on-year|
|Industry category|Item|2013|2012||
|||||increase/decrease (%)|
||Sales volume|3,299|3,358|-1.75%|
|Main refrigeration unit for|||||
||Production output|3,229|3,415|-5.44%|
|industrial or commercial use|||||
||Inventory level|455|525|-13.33%|

 Reason for change in the related data by30% or higher on a year-on-year basis
□ Applicable√ Not applicable
Major orders in the hand of the Company
□ Applicable√ Not applicable
Major change or adjustment in the Company's products or service in the reporting period
□ Applicable√ Not applicable
Information on the Company's major customers
|||
|-|-|
||188,926,543.22|
|Total sales volume from top five customers (yuan)||
|Proportion of the total sales volume from top five customers|12.31%|
|to the annual sales volume (%)||

Information on the Company's top five customers
|||||
|-|-|-|-|
||||Proportion to the annual|
|No.|Name of customer|Sales volume (yuan)||
||||sales volume (%)|
||Dalian Bingshan Engineering & Trading Co., Ltd.|91,804,457.91|5.98%|
|1||||
||Chengdu New World Refrigeration Equipment|||
|||26,247,162.22|1.71%|
|2||||
||Engineering Co., Ltd.|||
||Huanghai Shipbuilding Co., Ltd.|26,106,390.19|1.7%|
|3||||
||China PLA No. 63820 Troop|23,931,623.95|1.56%|
|4||||
||Dalian Sanyo Cold Chain Co., Ltd.|20,836,908.95|1.36%|
|5||||
|||188,926,543.22|12.31%|
|Total|——|||

Dalian Refrigeration Co., Ltd. 2013 Annual Report 3. Costs
Industry category
Monetary unit: RMB yuan
||||||||
|-|-|-|-|-|-|-|
|||2013||2012|||
|||||||Year-on-year|
||||Proportion to the||Proportion to the||
|Industry category|Item|||||increase/decrease|
|||Amount|operating costs|Amount|operating costs||
|||||||(%)|
||||(%)||(%)||
|||||||Decrease 2.6|
|||989,011,168.11|84.7%|1,002,595,114.78|87.3%||
||Direct materials||||||
|||||||percentage points|
|||||||Increase 1.4|
|||89,131,562.04|7.7%|72,766,815.75|6.3%||
||Labor wages||||||
|||||||percentage points|
|||||||Increase 0.2|
|||26,853,056.06|2.3%|24,134,308.66|2.1%||
||Depreciation||||||
|Refrigeration and||||||percentage points|
|air-conditioning|||||||
|||||||Increase 0.5|
|||20,239,508.58|1.7%|13,345,821.59|1.2%||
||Utilities||||||
|||||||percentage points|
|||||||Increase 0.5|
|||41,765,707.96|3.6%|35,303,682.61|3.1%||
||Others||||||
|||||||percentage points|
||Total operating|1,167,001,002.75|100%|1,148,145,743.39|100%|—|
||costs||||||

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

Information on the Company's top five suppliers
|||||
|-|-|-|-|
|||Purchase volume|Proportion to the annual|
|No.|Name of supplier|||
|||(yuan)|purchase volume (%)|
||BAC Dalian Co., Ltd.|68,381,433.34|6.59%|
|1||||
||Dalian Shentong Electric Co., Ltd.|38,156,532.43|3.68%|
|2||||
||Wuhuan Zhongwei Anti-explosion Control System Co.,|||
|||34,399,828.16|3.32%|
|3||||
||Ltd.|||
||Dalian Bingshan Group Refrigeration Equipment Co., Ltd.|33,672,400.06|3.25%|
|4||||
||Lida Heating, Ventilating and Air-conditioning Installation|||
|||18,296,005.36|1.76%|
|5||||
||Engineering Co., Ltd. Jilin Province|||
|||192,906,199.35|18.59%|
|Total|——|||

 4. Expenses
In the reporting period, the Company had the selling expenses decreased by0.16% on a year-on-year basis; the administrative expenses decreased by3.19% on a year-on-year basis; the financial expenses decreased by37.53% on a
year-on-year basis, mainly due to increase of the term deposit with more interest revenue in the reporting period; the expense of
income tax increased by256.11% year on year, the main reason is that within the reporting period, the warehousing land
use right of the company was collected and stored.
Dalian Refrigeration Co., Ltd. 2013 Annual Report 5.R&D expenditure
In the reporting period, the Company had the totalR&D expenditure of 78.53 million yuan, accounting for4.12% of the Company's net assets as of the end of 2013 or5.12% of the Company's annual operating revenues. There was no remarkable year-on-year change in related data.
6. Cash flows
Monetary unit: RMB yuan
|||||
|-|-|-|-|
||||Year-on-year|
|Item|2013|2012||
||||increase/decrease (%)|
||1,210,898,029.90|1,268,721,521.10|-4.56%|
|Sub-total of cash inflows from operating activities||||
||1,203,267,573.46|1,335,582,407.08|-9.91%|
|Sub-total of cash outflows from operating activities||||
||7,630,456.44|-66,860,885.98|111.42%|
|Net amount of cash flow generated in operating activities||||
||91,997,685.81|45,500,206.41|102.19%|
|Sub-total of cash inflows from investing activities||||
||73,148,044.45|86,098,678.72|-15.04%|
|Sub-total of cash outflows from investing activities||||
||18,849,641.36|-40,598,472.31|146.43%|
|Net amount of cash flow generated in investing activities||||
||53,900,000.00|35,300,000.00|52.69%|
|Sub-total of cash inflows from financing activities||||
||103,818,561.63|83,115,675.04|24.91%|
|Sub-total of cash outflows from financing activities||||
||-49,918,561.63|-47,815,675.04|-4.4%|
|Net amount of cash flow generated in financing activities||||
||-23,479,575.11|-155,258,753.84|84.88%|
|Net increase in cash and cash equivalents||||

 Reason for change in the related data by30% or higher on a year-on-year basis
√ Applicable□ Not applicable
（1）The net amount of cash flow resulting from operating activities increased obviously as compared to the same period last. The main reason is that within the reporting period, the company strengthened loan recovery with the cash paid for purchasing commodities, receiving labor services reducing obviously as compared to the last year.
（2）The subtotal of cash inflow from investment activities increased obviously. The main reason is that within the reporting period, the warehousing land use right of the company was collected and stored with a large amount of cash being recovered.
（3）The net amount of cash flow resulting from investment activities increased obviously as compared to the same period last year. The main reason is that within the reporting period, the warehousing land use right of the company was collected and stored with a large amount of cash being recovered and that within the reporting period, the investment in the associated company reduced as compared to the same period last year.
（4）The subtotal of cash inflow from fund-raising activities increased obviously as compared to the same period last year. The main reason is that within the reporting period, the amalgamated sub-companies increased short-term loans.（5）The net amount of cash and cash equivalents increased obviously as compared to the same period last year. The main reason is that the net amount of cash flow resulting from operation activities and investment activities increased obviously as compared to the same period last year.
Reason for remarkable difference between the cash flows from the Company's operating activities in the reporting period and the net annual profit
√ Applicable□ Not applicable
There was a remarkable difference between the net amount of cash flow generated in operating activities of the Company and the net annual profit in the reporting period, mainly due to that the proportion of returns on investment to the total profit of the Company was higher.
Dalian Refrigeration Co., Ltd. 2013 Annual Report III. Main business structure
Monetary unit: RMB yuan
||||||||
|-|-|-|-|-|-|-|
|||||Increase/decrease|||
||||||Increase/decrease|Increase/decrease o|
|||||of operating|||
||Operating||||of operating costs|gross profit on a|
|||Operating costs|Gross profit (%)|revenues on a|||
||revenue||||on a year-on-year|year-on-year basis|
|||||year-on-year|||
||||||basis (%)|(%)|
|||||basis (%)|||
|By industry|||||||
|Refrigeration and|1,517,271,251.60|1,149,272,794.08|24.25%|1.13%|2.11%|Decrease 0.73 per|
|air-conditioning||||||centage points|
|By product|||||||
|Refrigeration and|||||||
||1,517,271,251.60|1,149,272,794.08|24.25%|1.13%|2.11%|Decrease 0.73 per|
|air-conditioning|||||||
|||||||centage points|
|equipment|||||||
|By region|||||||
|||||||Decrease 1.29 per|
||1,115,911,862.44|850,325,789.22|23.8%|3.09%|4.87%||
|Northeast China|||||||
|||||||centage points|
|||||||Increase 11.87|
||31,406,876.77|25,784,728.39|17.9%|-4.28%|-16.37%||
|East China|||||||
|||||||percentage point|
|||||||Decrease 0.13|
||369,952,512.39|273,162,276.47|26.16%|-3.93%|-3.77%||
|Central China|||||||
|||||||percentage point|

 IV. Analysis of assets& liabilities
1. Remarkable change in assets
Monetary unit: RMB yuan
|||||||
|-|-|-|-|-|-|
||End of 2013||End of 2012|||
||||||Proportion|
|||Proportion to the||Proportion to the||
||Amount||Amount||increase/decrease (%)|
|||total assets (%)||total assets (%)||
||512,903,713.13||531,896,655.08||Decrease 0.83|
|||17.28%||18.11%||
|Monetary funds||||||
||||||percentage points|
||369,712,746.70||352,261,726.74||Increase 0.47|
|Accounts||12.46%||11.99%||
|receivable|||||percentage points|
||325,531,007.41||398,895,095.83||Decrease 2.61|
|||10.97%||13.58%||
|Inventories||||||
||||||percentage points|
||1,021,946,998.64||962,636,635.50||Increase 1.67|
|Long-term equity||34.44%||32.77%||
|investment|||||percentage points|
||395,266,143.70||404,973,883.42||Decrease 0.47|
|||13.32%||13.79%||
|Fixed assets||||||
||||||percentage points|
||68,462,823.08||1,304,951.56||Increase 2.27|
|Construction in||2.31%||0.04%||
|progress|||||percentage points|

 2. Remarkable change in liabilities
Monetary unit: RMB yuan
|||||||
|-|-|-|-|-|-|
||2013||2012|||
||||||Proportion|
|||Proportion to the||Proportion to the||
||Amount||Amount||increase/decrease (%)|
|||total assets (%)||total assets (%)||
||37,500,000.00|1.26%|29,500,000.00|1%|Increase 0.26|
|Short-term loans||||||
||||||percentage points|
|||0%||0%||
|Long-term loans|||||——|

Dalian Refrigeration Co., Ltd. 2013 Annual Report V. Analysis of core competence
Boasting the most complete cooling and heating product chain in the industry, the Company can offer to customers the service of package projects from design, manufacture, installation to maintenance to well meet the customized demand of customers.
Having the mature and perfect marketing network and after-sale service network, the Company can offer to customers in more regions the more rapid and considerate high-quality service.
Taking refrigeration and air-conditioning as its main business, the Company effectively combines the independentR&D and the joint ventures and cooperation and has formed a unique development pattern appropriate to itself and the industry.
In the reporting period, the Company's core competence above-mentioned was improved further.
VI. Analysis of investments
1. External equity investments
(1) External investments
||||
|-|-|-|
|External investments|||
|Investment in 2013 (yuan)|Investment in 2012 (yuan)|Amount of variation|
|1,021,946,998.64|962,636,635.50|6.17%|
|Invested companies|||
|||Equity proportion of listed companies|
|Name of company|Main business||
|||to invested companies (%)|
|For details of the invested companies, see V-10, 11 in the Explanatory Notes to Accounting Statements.|||

(2) Held financial companies' equity
||||||||
|-|-|-|-|-|-|-|
||||Proportion of||||
|||||||Change of|
||Amount of primary|Quantity (Shares)|share equity|Book value at the|Profit and loss||
|Name of object held||||||owner’s equity|
||investment|held|in that|end of period|within period||
|||||||within period|
||||company||||
|Guotai JunanSecunities Co., Ltd|30,098,895.00|30,098,895|0.49%|30,098,895.00|0.00|0.00|
|Total|30,098,895.00|30,098,895|-|30,098,895.00|0.00|0.00|

 2. Analysis of major subsidiary companies and mutual shareholding companies
a. Main holding subsidiary companies
① Dalian Bingshan Group Refrigerator& Air-conditioner Installation Co.
With a registered capital of 20.04 million yuan and100% of its shares held by the Company, Dalian Bingshan Group Refrigerator& Air-conditioner Installation Co. is engaged mainly in installation and test of complete sets of refrigeration equipment. The company realized the sales of 123.84 million yuan and net profit of 2,340 thousand yuan in 2013, with total assets of 65.58 million yuan and net assets of 26.37 million yuan.
② Dalian Bingshan Group Sales Co., Ltd.
With a registered capital of 18 million yuan and90% of its shares held by the Company, Dalian Bingshan Group Sales Co., Ltd.
Dalian Refrigeration Co., Ltd. 2013 Annual Report is engaged mainly in selling the products of the member enterprises of Dalian Bingshan Group. The company realized the sales of 31.41 million yuan and net profit of 530 thousand yuan in 2013, with total assets of 44.89 million yuan and net assets of 24.98 million yuan.
③ Dalian Bingshan Air-conditioning Equipment Co., Ltd.
With a registered capital of 700 million Japanese yen and70% of its shares held by the Company, Dalian Bingshan
Air-conditioning Equipment Co., Ltd. is engaged mainly in production and sale of the terminal products for air conditioners such as fan coils and air processors. The company realized the sales of 125.68 million yuan and net profit of 3,840 thousand yuan in 2013, with total assets of 144.56 million yuan and net assets of 72.23 million yuan.
④ Dalian Bingshan Ryosetsu Fast Frozen Equipment Co., Ltd.
With a registered capital ofUS$ 1 million and70% of its shares held by the Company, Dalian Bingshan Ryosetsu Fast Frozen Equipment Co., Ltd. produces and selling fast frozen equipment. The company realized the sales of 30.28 million yuan and net profit of -3,140 thousand yuan in 2013, with total assets of 27.75 million yuan and net assets of 6.9 million yuan.
⑤ Dalian Bingshan Metal Processing Co., Ltd.
With a registered capital ofUS$ 2.35 million and64.25% of its shares held by the Company, Dalian Bingshan Metal Processing Co., Ltd. produces and supplies metal plate works and stampings for the established joint venture companies and the Company. The company realized the sales of 40.82 million yuan and net profit of 1,300 thousand yuan in 2013, with total assets of 31.37 million yuan and net assets of 25.08 million yuan.
⑥ Dalian Bingshan Guardian Automation Co., Ltd.
With a registered capital of GBP 210 thousand and60% of its shares held by the Company, Dalian Bingshan Guardian Automation Co., Ltd. engaged mainly in supplying automated control technology for refrigeration& other fields. The company realized the sales of 35.09 million yuan and net profit of 5,150 thousand yuan in 2013, with total assets of 19.76 million yuan and net assets of 12.55 million yuan.
⑦ Wuhan New World Refrigeration Industry Co., Ltd.
With a registered capital of 30 million yuan and51% of its shares held by the Company, Wuhan New World Refrigeration Industry Co., Ltd. engaged mainly in producing and selling screw type refrigeration compressor. The company realized the sales of 373.65 million yuan and net profit of 10,680 thousand yuan in 2013, with total assets of 449.72 million and net assets of 140.11 million.
b. Main participating companies
||||
|-|-|-|
|Name|Sales（thousand yuan）|Net profit（thousand yuan）|
|Dalian Sanyo Compressor|2,422,380|166,670|
|Keihin Grand-Ocean|557,870|49,190|

Subsidiary companies obtained or disposed in the reporting period
√Applicable□ Not applicable
Dalian Refrigeration Co., Ltd. 2013 Annual Report VII. Estimation of the business performance for Jan.-Mar., 2014
Estimation notice that the accumulated net profit from the beginning of year to the end of the next reporting period may be turned into loss or significantly change compared with the same period of the last year, and explanation of the cause
□ Applicable√ Inapplicable
VIII. Development prospect of the Company
1. Industrial development trend
The industry that the company belongs to is refrigeration and air-conditioning industry. The refrigeration and
air-conditioning equipment has a wide scope of application and the service area is expanding constantly. The continuous development of national economy and the comprehensive promotion of well-off society construction provide a vast development space for the refrigeration and air-conditioning industry as a manufacturing industry supporting multiple sectors of the national economy.
Currently, the influential power of the refrigeration and air-conditioning industry in the national economy of our country is becoming greater and greater, and its position in improving thepeople’s livelihood is becoming more and more prominent, the social concern degree is becoming higher and higher, the industrial centralization degree is becoming higher and higher and market competition is becoming more and more fierce. Industrial complete set forming, modularization, informatization develops fast, new enterprises intervene constantly, new hot points emerges constantly, the areas, opponents, products, connotations of competition are changing constantly.
2. Opportunities and challenges the company confronts
（1）Opportunities the company confronts
With the State strengthening investment in suchpeople’s livelihood sectors as urbanization, food, health, etc., the freezing and cold storage sector maintains a high market growth speed and the market demand space in the main business sector of the company expands. The 12th five-year plan for cold chain logistics has provided market demand for the cold storage package project of the company. In the peak period of technical upgrading, energy conservation innovation to the existing package projects, freezing stations, etc., there is a big market expansion space for modern service industry.
（2）Challenges the company confronts
Foreign-funded brands promote localization to reduce costs, domestic-funded enterprises intervene at a low cost, as a result, the industrial profit space is compressed. Traditional cooperative partners adopt low-cost purchase and the customer group stability reduces. By oversea acquisition, being listed for financing, asset reorganization, etc., the main competitors expand the industrial chain, consolidate existing advantages and develop new competitive advantages. 3. Company development plan
With the proprietary cold and hot technologies, the company will innovate constantly, increase the competitive power of the core products, expand the industrial chain longitudinally, develop products in associated sectors transversely, embody the enterprise value with energy conservation and environmental protection, colorful solutions, strive to build itself into a strongest and largest manufacturer for industrial refrigeration products; a strongest and largest food cold chain manufacturer; an integrated cold, hot, ecological and environmental protection business supplier and create an international enterprise.
4. Funding demand and funding source plan
In 2014, the company predicts that the need of funds will be solved through its own funds and debt financing.
5. Main risks the company confronts and countermeasures
（1）The risk of fiercer industrial competition.
The huge demands in the refrigeration and air-conditioning market in China are highly emphasized by domestic and foreign industrial enterprises. At the same time of developing respective industries having advantages, enterprises extend industrial chains constantly, consolidate the existing market sectors, compete to take up emerging market sectors and the industrial competition pattern is becoming fierce increasingly.
Countermeasures: Focus on intensifying independent innovations and promoting transformation and upgrading, strengthen the forging of the core competitive power. Take satisfaction of customer demands as our own mission, take expansion of market share as the key point, take relocation for innovation as the driving force, take cold and hot, ecological, environmental protection business as the main part, make a great effort to develop industrial refrigeration, food freezing and cold storage, central air-conditioning, refrigeration components and engineering service business sector, transform the product structure toward a structure of new type, high end, transform the operation management toward informatization, digitalization, transform the development way toward low energy consumption, low emission.（2）The risk of backward production equipment and process flow.
The company is an old enterprise and also an old factory, where the process flow and facility layout already can not follow the requirements of the situation and market development completely.
Dalian Refrigeration Co., Ltd. 2013 Annual Report Countermeasures: By relocation for innovation, perfect the process flow, update the processing equipment, increase the efficiency of employees, perfect the quality control and reach or be better than the level of our main competitors. 6. Operation plan for 2014
TheCompany’s business targets for 2014:
Sales income: 1,690 million yuan
Total amount of profit: 140 million yuan
In 2014, the Company will thoroughly enforce value management principle, continues to improve core competence, vigorously develop new markets and guarantee a completion of revenue and profit index.
The Company focus on the follow works in 2014 with purpose of complete the index of revenue and profit:
(1) improve comprehensive ability of proposal and system supporting, offering one-stop service to the clients and creating value for customers.
(2) around planning of core products, strengthen technology innovation, refining intellectual property management, optimized product mix and well-defined the industrial chain.
(3) improve internal control (IC) system, strengthen cash flow management and enhanced capability of risk prevention. (4) accelerating information construction, making effective use of internet technology and remote monitoring
technology.
(5) based on the planning direction of industrial chain, actively promote the strategic joint cooperation.
(6) reinforce construction of enterprise culture, improvestaff’s happiness.
IX. Explain to the “non standard audit report ” from the board of directors, board of supervisors of the Company
Not applicable.
X. Change in accounting policies, accounting estimates and accounting methods compared with the financial statements of the previous year
No change.
XI. Correction of major accounting mistakes in the reporting period, which should be
retroactively restated
Not applicable.
XII. Change in the range of consolidated statements compared with the financial statements of the previous year
No change.
XIII. Profit distribution and dividend payment
By giving consideration to both the return to shareholders and the Company's long-term development, and in
combination of the Company's profit made in the this year, the Company formulated the 2012 annual dividend distribution plan of paying the cash of 1.5 yuan for every 10 shares. Reviewed and adopted at the Company's general meeting, the Company's Board of Directors has implemented the plan in June 2013.
Formulation and implementation of the Company's cash dividend distribution policy in the reporting period complied with the Company's Articles of Association and the general meeting's resolution, and the dividend distribution standard and proportion were defined and clear and the applicable decision-making procedure and system were complete. The independent directors agreed on it and the legal rights and interests of minority shareholders were well protected.
Dalian Refrigeration Co., Ltd. 2013 Annual Report
|||
|-|-|
|Special notes to cash dividend payout policy||
|If the regulations of the Articles of Association or the requirements of the shareholders of||
||Yes|
|the company meeting are met:||
|If the dividend payout standard and proportion is definite and clear-cut:|Yes|
|If relevant decision-making procedure and mechanism is complete:|Yes|
|If the independent directors have performed their duties and played their due role:|Yes|
|If small and medium shareholders have the opportunity to sufficiently express their||
||Yes|
|opinions and appeals and if their legal rights and interests are sufficiently protected:||
|If the condition and procedure for adjusting or changing the cash dividend payout policy is||
||Yes|
|compliant and transparent:||

Table of profit distribution plan, plan of share-granting with capital accumulation fund of the Company in recent three years
||||
|-|-|-|
|||Plan of share-granting with|
|Dividend year|Profit distribution plan||
|||capital accumulation fund|
|2013|RMB 1.5 yuan (cash) for every 10 shares (including tax)|None|
|2012|RMB 1.5 yuan (cash) for every 10 shares (including tax)|None|
|2011|RMB 1.5 yuan (cash) for every 10 shares (including tax)|None|

TheCompany’s cash profit distribution in the previous 3 years: Unit：（RMB）yuan
|||||
|-|-|-|-|
||Cash profit distribution|Net profit belonging to parent company owners in|Net profit ratio belonging to|
||(incl. tax )|the consolidated statistical tables and reports|parent company’s owners|
|2013|52,502,246.25|153,006,057.13|34.31%|
|2012|52,502,246.25|117,142,066.15|44.82%|
|2011|52,502,246.25|81,621,060.33|64.32%|

 The Company made profit in the reporting period and the undistributed profit of the parent company was positive but no cash dividend distribution plan was proposed.
□ Applicable√ Not applicable
XIV. Profit distribution preplan, and preplan of share-granting with capital accumulation fund of the Company
|||
|-|-|
|Bonus shares to be presented for every 10 shares (shares)|0|
|Dividend to be distributed for every 10 shares (RMB yuan) (including tax)|1.50|
|Equity base for distribution preplan (shares)|350,014,975|
|Total amount of cash dividend distribution (RMB yuan) (including tax)|52,502,246.25|
|Profit that can be used for distribution (RMB yuan)|130,795,000.00|
|Proportion of cash dividend distribution accounting for total profit distribution (%)|100%|
|Cash dividend distribution policy:||
|When the development stage of the company belongs to a growth period with important fund disbursement arrangement(s), the||

Dalian Refrigeration Co., Ltd. 2013 Annual Report
||
|-|
|proportion of cash dividend distribution accounting for this profit distribution should reach 20% at minimum when conducting profit|
|distribution.|
|Notes to details about preplan for profit distribution or capital stock increase with capital reserv e|
|According to the audit by Da Hua CPAs (Special General Partnership), the net profit made by the parent company of the company in|
|2013 was RMB 145.328 million and 10% of the net profit (RMB 14.533 million) was drawn as the legal surplus reserve. Therefore,|
|the profit distributable to the shareholders in the current year was RMB 130.795 million. Plus the initial undistributed profit of RMB|
|315.632 million and minus the dividend of RMB 52.502 million of common shares paid in 2012 and the drawn fre esurplus reserve of|
|RMB 21.334 million (20%), the accumulated profit distributable to the shareholders is RMB 372.591 million, in which, RMB 29.066|
|million (20%) was drawn as the free surplus reserve, and RMB 52.502 million is distributed as the dividend, and the balance of RM|
|291.023 million is transferred to the future for distribution.|
|The company’s dividend distribution preplan for 2013:|
|Based on the total capital stock of 350,014,975 shares at the end of 2013, the dividend of RMB 1.5 in cash (including tax) is|
|distributed for every 10 shares, and the cash dividend for B share is converted and paid in Hong Kong dollars.|
|The company will not transfer the capital reserve to increase capital stock.|
|The above preplan shall be submitted to the shareholders general meeting 2013 for review and approval.|

XV. Social responsibilities
In the course of development, the company has always observed national laws and regulations, operate faithfully, treat objectively such stakeholders as creditors, employees, consumers, suppliers, communities, etc., assume social
responsibilities actively and perform the obligations as a citizen. For the specific performance of social responsibilities by the company, refer to the social responsibility report for 2013.
XVI. Record of investigation, communication, interview and other activities in the reporting period
|||||||
|-|-|-|-|-|-|
||||||Main contents talked|
||Receiving|Way of|Received|||
|Receiving time||||Received object|about and information|
||location|receiving|object type|||
||||||provided|
||Company|Telephone|||Company fundamental|
|Jan. 8, 2013|||Institution|Researcher from Galaxy Securities||
||office|communication|||condition|
||Company|Telephone|||Company fundamental|
|Jan. 10, 2013|||Institution|Researcher from Huatai Securities||
||office|communication|||condition|
||Company|Telephone|||Company fundamental|
|Jan. 22, 2013|||Institution|Researcher from Taikang Life Insurance Assets||
||office|communication|||condition|
|||||Researchers from CITIC Securities, Galaxy||
||Company|Telephone|||Company fundamental|
|Feb. 6, 2013|||Institution|Securities, Huatai Securities, Haitong Securities,||
||office|communication|||condition|
|||||Guotai Junan Securities, Guoxin Securities||
|||Physical||||
||Company|||Researchers from CITIC Securities, Fortune|Company fundamental|
|Feb. 19, 2013||investigation|Institution|||
||office|||SGAM Fund, Guangda Securities|condition|
|||and survey||||
||Company|Physical||Researchers from China Galaxy Securities,|Company fundamental|
|Feb. 27, 2013|||Institution|||
||office|investigation||Haitong Securities, China International Fund,|condition|

Dalian Refrigeration Co., Ltd. 2013 Annual Report
|||||||
|-|-|-|-|-|-|
|||and survey||Huaxia Fund, Penghua Fund, ABC-CA Fund, ABC||
|||||Life Insurance, China Life Insurance Assets||
|||Physical||Researchers from Haitong Securities, Changjjiang||
||Company||||Company fundamental|
|Mar. 11, 2013||investigation|Institution|Securities, Guotai Junan Securities, Wanjia Fund,||
||office||||condition|
|||and survey||Fullgoal Fund, Franklin Templeton Sealand Fund||
|||Physical||||
||Company||||Company fundamental|
|Mar. 19, 2013||investigation|Institution|Researcher from Sealand Securities||
||office||||condition|
|||and survey||||
||Company|Telephone|||Company fundamental|
|Apr. 22, 2013|||Institution|Researcher from Haitong Securities||
||office|communication|||condition|
|||Physical||||
||Company||||Company fundamental|
|May 2, 2013||investigation|Institution|Researcher from CITIC Securities||
||office||||condition|
|||and survey||||
|||Physical||||
||Company|||Researchers from BOC International, Tianfeng|Company fundamental|
|Jun. 27, 2013||investigation|Institution|||
||office|||Securities, Guotai Fund|condition|
|||and survey||||
|||Physical||||
||Company||||Company fundamental|
|Jun. 28, 2013||investigation|Institution|Researchers from Haitong Securities, BOC Fund。||
||office||||condition|
|||and survey||||
|||Physical||||
||Company||||Company fundamental|
|Jul. 24, 2013||investigation|Institution|Researcher from Shenyin Wanguo Securities||
||office||||condition|
|||and survey||||
||Company|Telephone||Researchers from Galaxy Securities, Societe|Company fundamental|
|Aug. 22, 2013|||Institution|||
||office|communication||Generale Securities|condition|
||Company|Telephone|||Company fundamental|
|Aug. 26, 2013|||Institution|Researcher from CITIC Securities||
||office|communication|||condition|
|||Physical||||
||Company||||Company fundamental|
|Sep. 4, 2013||investigation|Institution|Researcher from Huatai Securities||
||office||||condition|
|||and survey||||
|||||Researchers from China Life Insurance Assets,||
||Company|Telephone|||Company fundamental|
|Oct. 25, 2013|||Institution|UBS Securities , Galaxy Securities, Huatai||
||office|communication|||condition|
|||||Securities, Societe Generale Securities||
|||Physical||||
||Company|||Researchers from Guoyuan Securities, Zhongtian|Company fundamental|
|Nov. 6, 2013||investigation|Institution|||
||office|||Securities|condition|
|||and survey||||
|||Physical||||
||Company||||Company fundamental|
|Nov. 7, 2013||investigation|Institution|Researcher from Japan Securities||
||office||||condition|
|||and survey||||
||Company|Physical||Researchers from Huatai Securities, Orient|Company fundamental|
|Nov. 14, 2013|||Institution|||
||office|investigation||Securities, Great Wall Securities, Harvest Fund,|condition|

Dalian Refrigeration Co., Ltd. 2013 Annual Report
|||||||
|-|-|-|-|-|-|
|||and survey||Guangdong Development Fund, Huaan Fund, CCB||
|||||Principal Asset Management Co., Ltd., Shanghai||
|||||Chaos Dowland Assets, Greenwoods Asset, Haihua||
|||||Group, Shanghai International Trust||
|||Physical||||
||Company|||Researchers from Guojin Securities, Guangdong|Company fundamental|
|Dec. 19, 2013||investigation|Institution|||
||office|||Development Fund, Great Wall Jingshun Fund|condition|
|||and survey||||
|||Physical||||
||Company|||Researchers from SMC Chinese Fu nd, Guodu|Company fundamental|
|Dec. 25, 2013||investigation|Institution|||
||office|||Securities|condition|
|||and survey||||

Dalian Refrigeration Co., Ltd. 2013 Annual Report Section 5 Important Issues
I. Major lawsuit and arbitration issues
□ Applicable√ Not applicable
The Company had no major lawsuit and arbitration issues in this reporting period.
II. Media's queries
□ Applicable√ Not applicable
There were no media's queries to the Company in this reporting period.
III. Non-operation capital occupation by holding shareholders and their related parties in the listed company
The company had no capital occupation by the holding shareholders and their related parties in the listed company within this reporting period.
IV. Asset transactions
1. Purchases of important assets
□ Applicable√ Not applicable
2. Sales of important assets
√ Applicable□ Not applicable
Within the reporting period, the company had the land use rights of two land plots for warehousing that it owned and are located in Houge Village, Gezhenpu Sub-district, Ganjingzi District, Dalian collected and stored by Dalian Land Reserve Center with the amount of compensation for collection and storage being RMB 50 million yuan. The first announcement about the land collection and storage this time (announcement number: 2013-020) was published on B007 of China Securities, A17 of HK Commercial Daily and Cninfo website on Jul. 19, 2013. The announcement about the progress of the land collection and storage this time (announcement number: 2013-021) was published on B019 of China Securities, A9 of HK Commercial Daily and Cninfo website on Aug. 2, 2013. The announcement about the progress of the land collection and storage this time (announcement number: 2013-032) was published on B048 of China Securities, A24 of HK Commercial Daily and Cninfo website on Dec. 31, 2013.
Within the reporting period, the company transferred50% of Dalian Jiale Automatic Vending Machine Operation Co.,Ltd.’s shares it held to an independent third party - Shanghai Miyuan Beverage Co., Ltd. at a price of RMB 15,000,000 yuan. The first announcement about this share transfer (announcement number: 2013-026) was published on B018 of China Securities, A22 of HK Commercial Daily and Cninfo website on Oct. 24, 2013. The announcement about the progress of this share transfer (announcement number: 2013-027) was published on B007 of China Securities, A17 of HK Commercial Daily and Cninfo website on Nov. 12, 2013.
3. Important external investments
√ Applicable□ Not applicable
Within the reporting period, the company invested to establish a joint venture with Japan Mitsubishi Heavy Industry Co., Ltd. jointly, engaging in R& D, purchasing, manufacturing, sales and after-sale service of centrifugal refrigeration units. The company contributed RMB 36 million yuan in cash, holding45% of the jointventure’s shares. The announcement about the external investment of the centrifuge project (announcement number: 2013-008) was published on B050 of China Securities, A9 of HK Commercial Daily and Cninfo website on Apr. 13, 2013.
V. Important associated transactions
1. Associated transactions related to normal business
In the report period, the total amount of normal associated transactions between the Company and associated parties was 322,270 thousand yuan, accounting for68.57% of the budgeted amount for the year 2013. This included 161,030 thousand yuan, accounting for64.42% of the budgeted amount for the year 2013, for purchasing supporting products for package projects from associated parties, and 161,240 thousand yuan, accounting for73.29% of the budgeted amount for the year 2013, from selling supporting parts and components to associated parties.
Dalian Refrigeration Co., Ltd. 2013 Annual Report 2. Important associated transactions with joint external investments
Within the reporting period, the company and the related party of Dalian Bingshan Group Co., Ltd. increased jointly the capital in Dalian Bingshan Group Import& Export Co., Ltd. in which they participate. The temporary announcement about this connected transaction (announcement number: 2013-014) was published on B178 of China Securities, A11 of HK Commercial Daily and Cninfo website on Apr. 20, 2013.
Within the reporting period, the company and the related parties of Dalian Bingshan Group Co., Ltd., Sanyo Electric Co., Ltd. increased jointly the capital in the holding subsidiary of Wuhan New World Refrigeration Industry Co., Ltd. The temporary announcement about this connected transaction (announcement number: 2013-019) was published on B007 of China Securities, A17 of HK Commercial Daily and Cninfo website on Jul. 19, 2013.
3. Current associated rights of credit and liabilities
Were there current non-operating associated rights of credit and liabilities?
□ Yes√ No
For credits and debts with associated parties, see the Special Description on Use of Funds by Dalian Refrigeration Co., Ltd.'s Holding Shareholder and Other Associated Parties issued by Da Hua Certified Public Accountants.
Websites for reference to the temporary announcement on important associated transactions
||||
|-|-|-|
|||Name of the website for|
||Date when the temporary||
|Title of temporary announcement||disclosure of the temporary|
||announcement was disclosed||
|||announcement|
|Announcement on the associated transaction to increase capital|||
||Apr. 20, 2013|www.cninfo.com.cn|
|in Dalian Bingshan Group Import & Export Co., Ltd.|||
|Announcement on the associated transaction to increase capital|||
||Jul. 19, 2013|www.cninfo.com.cn|
|in Wuhan New World Refrigeration Industry Co., Ltd.|||

VI. Implementation of commitments
1. Commitments of the Company or its shareholders holding5% or higher of the shares in the reporting period or carried to the reporting period
Undertaking matters for trial sales of state shares and implementation
Except the immature condition of being implementation for management share incentive scheme, Dalian Bingshan Group perform the commitment in share reform.
VII. Engagement and dismissal of the accounting firm
Currently engaged accounting firm
|||
|-|-|
||Da Hua Certified Public Accountants (Special GeneralPartnership)|
|Name of domestic accounting firm||
|Remuneration paid to the domestic accounting firm (in 10||
||77|
|thousand yuan)||
|Continuous audit service years of the domestic accounting||
||1|
|firm||
|Name of certified public accountants with the domestic||
||Yang Yingjin , Wang Shuhuan|
|accounting firm||

If the CPA firm retaining was changed in this period
√ Yes□ No
If the CPA firm retaining was changed during auditing
□ Yes√ No
If the CPA firm changing went through an examination and approval procedure
√ Yes□ No
Dalian Refrigeration Co., Ltd. 2013 Annual Report Detailed notes to change in CPA firm retaining
According to the need of business development of the company, the company held on Dec. 30, 2013 the 2 nd ExtraordinaryShareholders’ General Meeting of 2013 to change to retain Da Hua Certified Public Accountants (Special General Partnership) as the auditing agency of the company for 2013. The agency made integrated auditing to the financial statements and internal control of the company. The expenses to audit the annual financial statements were RMB 770 thousand yuan. The expenses for internal control auditing were RMB 300 thousand yuan.
The announcement on the resolution of the 2 nd ExtraordinaryShareholders’ General Meeting of 2013 (announcement number: 2013-031) was published on B048 of China Securities, A24 of HK Commercial Daily and Cninfo website on Dec. 31, 2013. In this year, the company retained Da Hua Certified Public Accountants (Special General Partnership) to audit the internal control and paid RMB 300 thousand yuan for the internal control auditing.
VIII. Index of information announcements for important matters within the reporting period
||||||
|-|-|-|-|-|
|Announce-||||Name of internet website|
|||Newspaper name and page|||
|ment|Matter||Publishing date|where it was published and|
|||where it was published|||
|number||||searching route|
||Announcement on resolution of the 21 st Session of the|A13 of China Securities, A7 of|||
|2013-001|||Jan. 19, 2013|http://www.cninfo.com.cn|
||5th Board of Directors|HK Commercial Daily|||
||Announcement on resolution of the 14 th Session of the|A13 of China Securities, A7 of|||
|2013-002|||Jan. 19, 2013|http://www.cninfo.com.cn|
||5th Board of Supervisors|HK Commercial Daily|||
||Notice on holding the 1 st Extraordinary Shareholders’|A13 of China Securities, A7 of|||
|2013-003|||Jan. 19, 2013|http://www.cninfo.com.cn|
||General Meeting of 2013|HK Commercial Daily|||
||Announcement on the resolution of the 1st Extraordinary|B014 of China Securities, A9|||
|2013-004|||Feb. 6, 2013|http://www.cninfo.com.cn|
||Shareholders’ General Meeting of 2013|of HK Commercial Daily|||
||Announcement on the resolution of the 1 st Session of|B014 of China Securities, A9|||
|2013-005|||Feb. 6, 2013|http://www.cninfo.com.cn|
||the 6th Board of Directors|of HK Commercial Daily|||
||Announcement on the resolution of the 1 st Session of|B014 of China Securities, A9|||
|2013-006|||Feb. 6, 2013|http://www.cninfo.com.cn|
||the 6th Board of Supervisors|of HK Commercial Daily|||
||Announcement on the resolution of the 2 nd Session of|B050 of China Securities, A9|||
|2013-007|||Apr. 13, 2013|http://www.cninfo.com.cn|
||the 6th Board of Directors|of HK Commercial Daily|||
||Announcement on external investment of centrifuge|B050 of China Securities, A9|||
|2013-008|||Apr. 13, 2013|http://www.cninfo.com.cn|
||project|of HK Commercial Daily|||
||Annual Report Abstract for 2012|B178 of China Securities, B11|||
|2013-009|||Apr. 20, 2013|http://www.cninfo.com.cn|
|||of HK Commercial Daily|||
||Announcement on the resolution of the 3 rd Session of|B178 of China Securities, B11|||
|2013-010|||Apr. 20, 2013|http://www.cninfo.com.cn|
||the 6th Board of Directors|of HK Commercial Daily|||
||Announcement on the resolution of the 2 nd Session of|B178 of China Securities, B11|||
|2013-011|||Apr. 20, 2013|http://www.cninfo.com.cn|
||the 6th Board of Supervisors|of HK Commercial Daily|||
||Notice on holding the general shareholders meeting for|B178 of China Securities, B11|||
|2013-012|||Apr. 20, 2013|http://www.cninfo.com.cn|
||2012|of HK Commercial Daily|||
||Announcement on prediction of daily connected|B178 of China Securities, B11|||
|2013-013|||Apr. 20, 2013|http://www.cninfo.com.cn|
||transactions for 2013|of HK Commercial Daily|||
||Associated transaction announcement (increasing|B178 of China Securities, B11|||
|2013-014|||Apr. 20, 2013|http://www.cninfo.com.cn|
||capital in Bingshan Import & Export)|of HK Commercial Daily|||

Dalian Refrigeration Co., Ltd. 2013 Annual Report
||||||
|-|-|-|-|-|
||Report for the First Quarter of 2013|B178 of China Securities, B11|||
|2013-015|||Apr. 20, 2013|http://www.cninfo.com.cn|
|||of HK Commercial Daily|||
||Announcement on the resolution of the g eneral|B018 of China Securities, A21|||
|2013-016|||May 22, 2013|http://www.cninfo.com.cn|
||shareholders meeting for 2012|of HK Commercial Daily|||
||Announcement on dividend distribution for 2012|B016 of China Securities, A14|||
|2013-017|||Jun. 18, 2013|http://www.cninfo.com.cn|
|||of HK Commercial Daily|||
||Announcement on the resolution of the 4 th Session of|B007 of China Securities, A17|||
|2013-018|||Jul. 19, 2013|http://www.cninfo.com.cn|
||the 6th Board of Directors|of HK Commercial Daily|||
||Associated transaction announcement (inc reasing|B007 of China Securities, A17|||
|2013-019|||Jul. 19, 2013|http://www.cninfo.com.cn|
||capital in Wuhan New World)|of HK Commercial Daily|||
||Announcement on collection and storage of part of land|B007 of China Securities, A17|||
|2013-020|||Jul. 19, 2013|http://www.cninfo.com.cn|
||use rights|of HK Commercial Daily|||
||Announcement on progress of the matter on collection|B019 of China Securities, A9|||
|2013-021|||Aug. 2, 2013|http://www.cninfo.com.cn|
||and storage of part of land use rights|of HK Commercial Daily|||
||Announcement on the resolution of the 5 th Session of|B019 of China Securities, A24|||
|2013-022|||Aug. 22, 2013|http://www.cninfo.com.cn|
||the 6th Board of Directors|of HK Commercial Daily|||
||Semi-annual Report Abstract for 2013|B019 of China Securities, A24|||
|2013-023|||Aug. 22, 2013|http://www.cninfo.com.cn|
|||of HK Commercial Daily|||
||Report for the 3rd Quarter of 2013|B018 of China Securities, A22|||
|2013-024|||Oct. 24, 2013|http://www.cninfo.com.cn|
|||of HK Commercial Daily|||
||Announcement on the resolution of the 6 th Session of|B018 of China Securities, A22|||
|2013-025|||Oct. 24, 2013|http://www.cninfo.com.cn|
||the 6th Board of Directors|of HK Commercial Daily|||
||Announcement on transferring 50% of Dalian Jiale||||
|||China SecuritiesB018, A22 of|||
|2013-026|Automatic Vending Machine Operation Co., Ltd. ’s||Oct. 24, 2013|http://www.cninfo.com.cn|
|||HK Commercial Daily|||
||shares held||||
||Announcement on progress of the matter on transferring||||
|||B007 of China Securities, A17|||
|2013-027|50% of Dalian Jiale Automatic Vending Machine||Nov. 12, 2013|http://www.cninfo.com.cn|
|||of HK Commercial Daily|||
||Operation Co., Ltd.’s shares held||||
||Announcement on the resolution of the 7 th Session of|B016 of China Securities, A11|||
|2013-028|||Dec. 13, 2013|http://www.cninfo.com.cn|
||the 6th Board of Directors|of HK Commercial Daily|||
||Announcement on exte rnal investment (refrigeration||||
|||B016 of China Securities, A11|||
|2013-029|equipment management consultation and energy||Dec. 13, 2013|http://www.cninfo.com.cn|
|||of HK Commercial Daily|||
||conservation service joint venture project)||||
||Notice on holding the 2 nd Extraordinary Shareholders’|B016 of China Securities, A11|||
|2013-030|||Dec. 13, 2013|http://www.cninfo.com.cn|
||General Meeting of 2013|of HK Commercial Daily|||
||Announcement on the resolution of the 2 nd|B048 of China Securities, A24|||
|2013-031|||Dec. 13, 2013|http://www.cninfo.com.cn|
||Extraordinary Shareholders’ General Meeting of 2013|of HK Commercial Daily|||
||Announcement on progress of the matter on collection|B048 of China Securities, A24|||
|2013-032|||Dec. 13, 2013|http://www.cninfo.com.cn|
||and storage of part of land use rights|of HK Commercial Daily|||

Dalian Refrigeration Co., Ltd. 2013 Annual Report Section 6 Change in Share Capital and Shareholders' Information I. Change in share capital
No change.
II. Securities issuance and listing
1. Change in total shares of the Company and structure of shareholders
Within the reporting period, the company carried out management changing work and the directors, supervisors and senior managers of the company had great changes and the shareholder structure of the company also changed accordingly.
III. Shareholders and actual controller
1. Number of shareholders and their shareholding
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
|Total number of shareholders in|||Total number of shareholders as of the 5th trading||||||||
||33,548||||||||37,468||
|the reporting period|||day before disclosure of the annual report||||||||
|Shareholding of top ten shareholders|||||||||||
|||||||||Number of||Number of|
|Name||Nature|||Proportion|Total number||shares with sale||pledged shares|
|||||||||restriction||or shares frozen|
|Dalian Bingshan Group Co., Ltd.||Domestic non-state-owned legal person|||21.96%|76,855,683||19,213,921||0|
|Sanyo Electric Co., Ltd.||Overseas legal person|||10.00%|35,001,500||0||0|
|Penghua Chinese 50 Open- end SecuritiesInvestment Fund||Others|||1.95%|6,799,927||0||0|
|GF Stable Growth Securities Investment Fund||Others|||1.72%|6,021,197||0||0|
|National Social Security Fund Combination 404||Others|||1.32%|4,599,985||0||0|
|Penghua Dynamic Growth Hybrid SecuritiesInvestment Fund||Others|||1.19%|4,143,401||0||0|
|Tianzhi Core Growth Stock Type SecuritiesInvestment Fund||Others|||0.96%|3,362,600||0||0|
|BOCI SECURITIES LIMITED||Overseas legal person|||0.86%|2,985,254||0||0|
|Guoyuan Securi ties Brokerage (Hong Kong)Limited||Overseas legal person|||0.78%|2,708,978||0||0|
|Northeast Securities Co., Ltd.||Domestic non-state-owned legal person|||0.67%|2,326,947||0||0|
|Shareholding of top ten shareholders without sale restriction|||||||||||
|Name||||Number of shares without sale restriction|||Type of shares||||
|Dalian Bingshan Group Co., Ltd.||||57,641,762|||RMB denominated ordinary shares||||
|Sanyo Electric Co., Ltd.||||35,001,500|||Domestically listed foreign shares||||
|Penghua Chinese 50 Open-end Securities Investment Fund||||6,799,927|||RMB denominated ordinary shares||||
|GF Stable Growth Securities Investment Fund||||6,021,197|||RMB denominated ordinary shares||||

Dalian Refrigeration Co., Ltd. 2013 Annual Report
||||
|-|-|-|
|National Social Security Fund Combination 404|4,599,985|RMB denominated ordinary shares|
|Penghua Dynamic Growth Hybrid Securities Investment Fund|4,143,401|RMB denominated ordinary shares|
|Tianzhi Core Growth Stock Type Securities Investment Fund|3,362,600|RMB denominated ordinary shares|
|BOCI SECURITIES LIMITED|2,985,254|Domestically listed foreign shares|
|Guoyuan Securities Brokerage (Hong Kong) Limited|2,708,978|Domestically listed foreign shares|
|Northeast Securities Co., Ltd.|2,326,947|RMB denominated ordinary shares|
||Dalian Bingshan Group Co., Ltd. had the association relationship with Sanyo ElectricCo., Ltd. among the above shareholders. Sanyo Electric Co., Ltd. holds 30% of DalianBingshan Group Co., Ltd.'s equity.||
|Notes to the associated relationship and uniform actions of the above|||
|shareholders|||

2. Holding shareholder of the Company
|||||||
|-|-|-|-|-|-|
||Legal|Foundin|Organization|Registered||
|Name of holding shareholder|||||Main business|
||representative|g date|code|capital||
||||||Research, development,|
||||||manufacture, sales, service and|
||||||installation of industrial|
||||||refrigeration products, freezing|
||||||and cold storage products,|
||||||large-, medium- and small-size|
|Dalian Bingshan Group Co.,||Jul. 3,||||
||Motoma Zhero||24129179-3|140600000|air-conditioning products,|
|Ltd.||1985||||
||||||petrochemical equipment|
||||||products, electronic and|
||||||electric control products, home|
||||||appliance products and|
||||||environment protection|
||||||products.|
|Business performance,||||||
|financial position, cash flows|In 2013, the annual operating revenue was 10,967.86 million yuan, the net profit was 516.|||||
|and future development|million yuan, and the net assets was 776.24 million yuan (unaudited).|||||
|strategy||||||
|Shares held by the holding||||||
|shareholder in other overseas||||||
|and domestic listed||||||
|companies as the holding|None|||||
|shareholder or ordinary||||||
|shareholder in the reporting||||||
|period||||||

Change in the holding shareholder in the reporting period
□ Applicable√ Not applicable
3. Actual controller of the Company
The actual controller of the Company is the State-Owned Assets Supervision and Administration Commission of Dalian Municipal Government.
Change in the actual controller in the reporting period
□ Applicable√ Not applicable
Dalian Refrigeration Co., Ltd. 2013 Annual Report 4. Other legal-person shareholders holding of10% or more shares
Sanyo Electric Co., Ltd., which holds10% of the shares of the Company, is one of the major electromechanical product manufacturers in Japan and also the key joint venture partner of this Company. That company was listed in Tokyo Stock Exchange. On April 2011, it became the wholly-owned subsidiary of Panasonic Corporation and stopped being listed.
Dalian Refrigeration Co., Ltd. 2013 Annual Report Section 7 Information on theCompany’s Directors, Supervisors, Senior Management and Staff
I. Changes in shareholding by directors, supervisors and senior managers
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
|||||||||Increase|Decrease||
||||||||Shares|||Shares|
|||||||||on holding|in holding||
||||||Starting|Ending|held at|||held at the|
|||Office-hol||||||of shares|of shares||
|Name|Position||Sex|Age|date of|date of|beginning|||end of|
|||ding state||||||in this|in this||
||||||office term|office term|of period|||period|
|||||||||period|period||
||||||||(shares)|||(shares)|
|||||||||(shares)|(share)||
||Chairman,|Leaving|||May 20,|Feb. 5,|||||
|Zhang He|||M|76|||33,345|0|0|33,345|
||GM|office|||2009|2013|||||
|Mu|Vice|Leaving|||May 20,|Feb. 5,|||||
||||M|64|||29,445|0|0|29,445|
|Chuanjiang|Chairman|office|||2009|2013|||||
||Director,||||||||||
|||Leaving|||May 20,|Feb. 5,|||||
|Yang Bin|Standing||M|57|||||||
|||office|||2009|2013|||||
||DGM||||||||||
||Director,||||||||||
||Financial||||||||||
|||Leaving|||May 20,|Feb. 5,|||||
|Xu Junrao|Majordomo,||F|50|||3,900|0|0|3,900|
|||office|||2009|2013|||||
||Board||||||||||
||Secretary||||||||||
|Hidetoshi||Leaving|||May 20,|Feb. 5,|||||
||Director||M|61|||||||
|Arima||office|||2009|2013|||||
|||Leaving|||May 20,|Feb. 5,|||||
|Wang Weijie|Director||M|50|||||||
|||office|||2009|2013|||||
|Men||Leaving|||May 20,|Feb. 5,|||||
||Supervisor||M|60|||975|0|0|975|
|Yuesheng||office|||2009|2013|||||
|Zhang||Leaving|||May 20,|Feb. 5,|||||
||DGM||M|54|||27,462|0|0|27,462|
|Hongzhi||office|||2009|2013|||||
|||Leaving|||May 20,|Feb. 5,|||||
|Wang Dekun|DGM||M|61|||18,525|0|0|18,525|
|||office|||2009|2013|||||
|||Leaving|||May 20,|Feb. 5,|||||
|Hu Xitang|DGM||M|45|||||||
|||office|||2009|2013|||||
|||Serves in|||||||||
|Xiao||report period|||Feb. 5,|Mar. 27,|||||
||Chairman||M|59|||||||
|Yongqin||and resigned|||2013|2014|||||
|||presently|||||||||

Dalian Refrigeration Co., Ltd. 2013 Annual Report
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
|||Serves in|||||||||
||Vice|report period|||Feb. 5,|Mar. 4,|||||
|Wang Jian|||M|56|||||||
||Chairman|and resigned|||2013|2014|||||
|||presently|||||||||
||||||Feb. 5,|Feb. 4,|||||
|Liu Kai|Director, GM|Incumbent|M|39|||||||
||||||2013|2016|||||
|Wang|Director,||||Feb. 5,|Feb. 4,|||||
|||Incumbent|M|51|||||||
|Zhiqiang|DGM||||2013|2016|||||
|||Serves in|||||||||
||Director,|report period|||||||||
||||||Feb. 5,|Feb. 4,|||||
|Rong Yan|Financial|and resigned|F|44|||||||
||||||2013|2016|||||
||Majordomo|Director|||||||||
|||presently|||||||||
|||Serves in|||||||||
|Nagasawa||report period|||Feb. 5,|Mar. 4,|||||
||Director||M|53|||||||
|Hideharu||and resigned|||2013|2014|||||
|||presently|||||||||
|Wang|Independent||||Feb. 5,|Feb. 4,|||||
|||Incumbent|M|69|||||||
|Huiquan|director||||2013|2016|||||
||Independent||||Feb. 5,|Feb. 4,|||||
|Xing Tiancai||Incumbent|M|52|||||||
||director||||2013|2016|||||
||Independent||||Feb. 5,|Feb. 4,|||||
|Liu Caiping||Incumbent|F|58|||||||
||director||||2013|2016|||||
||Chairman of||||||||||
||||||Feb. 5,|Feb. 4,|||||
|Yu Fuchun|Board of|Incumbent|M|54|||10,140|0|0|10,140|
||||||2013|2016|||||
||Supervisors||||||||||
|Mao|||||Feb. 5,|Feb. 4,|||||
||Supervisor|Incumbent|F|48|||||||
|Chunhua|||||2013|2016|||||
||||||Feb. 5,|Feb. 4,|||||
|Ma Yun|Supervisor|Incumbent|M|42|||||||
||||||2013|2016|||||
||||||Dec. 12,|Feb. 4,|||||
|Li Wenjiang|DGM|Incumbent|M|47|||||||
||||||2013|2016|||||
|Song|Board||||Feb. 5,|Feb. 4,|||||
|||Incumbent|M|40|||||||
|Wenbao|secretary||||2013|2016|||||
|Total|--|--|--|--|--|--|123,792|0|0|123,792|

 II. Office holding
Main work experiences of incumbent directors, supervisors, senior managers of the company during the reporting period in recent
five years till the end of 2013
Dalian Refrigeration Co., Ltd. 2013 Annual Report
||||
|-|-|-|
|Name|Main work experience|Office holding or working concurrently in other units inaddition to shareholder units|
|XiaoYongqin|Successively acting as GM of Dalian Sanyo RefrigerationCo., Ltd., Chairman of Dalian Bingshan Group Co., Ltd.|Chairman of Linde Engineering (Dalian) Co., Ltd.;Chairman of Dalian Bingshan International Trading Co., Ltd.Chairman of Dalian Sanyo Refrigeration Co., Ltd.;Chairman of Mitsubishi-Bingshan Refrigeration (Dalian) Co.,Ltd.|
|Wang Jian|Successively acting as Vice Tour Inspector of DalianPeople’s Government State-owned Assets Supervision andAdministration Commission, Party Secretary, ViceChairman, GM of Dalian Bingshan Group Co., Ltd.|Chairman of Dalian Sanyo Minghua Electronic Co., Ltd.;Chairman of Dalian Bingshan Metal Working Co., Ltd.;Chairman of Dalian Sanyo Efficient Refrigeration SystemCo., Ltd.|
|Liu Kai|Successively acting as Head of Production ManagementDept., Assistant GM of the company, director of DalianBingshan Group Co., Ltd.|None|
|WangZhiqiang|Successively acting as DGM, Chief Engineer of thecompany.|None|
|Rong Yan|Successively acting as Head of Financial ManagementDept., Operation Planning Head of Dalian SanyoRefrigeration Co., Ltd.|None|
|NagasawaHideharu|Successively acting as Operation Planning Head, ExecutiveDirector, Standing Executive Director, Chairman of SanyoElectric Co., Ltd.|None|
|WangHuiquan|Once acting as Standing Committee Member of DalianParty Committee, Vice Party Secretary of Dalian PartyCommittee, Secretary of Municipal Discipline InspectionCommission. Have retired for many years.|Chairman of Dalian Samaritan Foundation|
|Xing Tiancai|Successively acting as Dean of Vocational TechnicalCollege, Dean of Financial College in Dongbei Universityof Finance & Economics.|Head of Dalian Huaxin Trust Securities Research Institute ofDongbei University of Finance & Economics;Independent director of Bohai Ferry Co., Ltd.;Independent director of CITIC Bank Co., Ltd.|
|Liu Caiping|Once acting as Chief Accountant of Dalian ConstructionHolding Co., Ltd. Having retired.|Vice Chairman of Dalian Association for Chief Accountants .|
|Yu Fuchun|Successively acting as Vice Chairm of the Trade Union ofthe company.|None|
|MaoChunhua|Successively acting as Vice Head of the Financial Dept. ofthe company.|None|
|Ma Yun|Successively acting as Vice Head of Financial Dept., Headof Auditing Supervision Dept. in Dalian Bingshan GroupCo., Ltd.|None|

Dalian Refrigeration Co., Ltd. 2013 Annual Report
||||
|-|-|-|
|Li Wenjiang|Successively acting as Head of Package Design Dept. ,ViceChief Engineer of the company.|None|
|SongWenbao|Successively acting as representative for securities affairs,board secretary of the company.|None|

Office holding in shareholder unit
√ Applicable□ Not applicable
|||||||
|-|-|-|-|-|-|
||||||If receiving|
|||Position held||||
|Name of office|||Starting date of office|Ending date of office|remuneration or|
||Shareholder unit name|in shareholder||||
|holder|||term|term|allowance from|
|||unit||||
||||||shareholder unit|
||Dalian Bingshan Group Co.,|||||
|Xiao Yongqin||Chairman|Jan. 11, 2013|Feb. 14, 2014|Yes|
||Ltd.|||||
||Dalian Bingshan Group Co.,|||||
|Wang Jian||GM|Jan. 11, 2013|Feb. 14, 2014|Yes|
||Ltd.|||||
||Dalian Bingshan Group Co.,|||||
|Liu Kai||Director|Jan. 11, 2013|Feb. 14, 2014|No|
||Ltd.|||||
|Nagasawa|Dalian Bingshan Group Co.,|||||
|||Director|Jan. 11, 2013|Feb. 14, 2014|No|
|Hideharu|Ltd.|||||

III. Remuneration paid to directors, supervisors, and senior management
Decision-making procedure, decision-making basis and actual payment of remuneration for directors, supervisors and senior management
Decision-making procedure: the Company's remuneration plan for directors and supervisors was proposed by the Company's Remuneration and Evaluation Committee of the Board of Directors, and after approval by the Board of Directors, submitted to the general meeting for adoption and put into effect. The Company's remuneration plan for senior management was put into effect after approval by the Company's Board of Directors.
Decision-making basis: it was decided on the basis of main responsibilities and importance of the concerned position and the remuneration level of similar positions in other similar enterprises and evaluated and rewarded through the Company's examination procedure for assets operation performance.
The total amount of remunerations actually paid by the Company to directors, supervisors, and senior management was 4.645 million yuan.
Particulars about the annual remuneration of directors, supervisors and senior staff members
|||
|-|-|
|Name|Annual remuneration and allowance(ten thousand yuan)|
|Xiao Yongqin|68.12|
|Wang Jian|68.12|
|Liu Kai|63.54|
|Wang Zhiqiang|49.81|
|Rong Yan|49.81|
|Nagasawa Hideharu|0.00|

Dalian Refrigeration Co., Ltd. 2013 Annual Report
|||
|-|-|
|Wang Huiquan|5.00|
|Xing Tiancai|5.00|
|Liu Caiping|5.00|
|Yu Fuchun|11.20|
|Mao Chunhua|15.70|
|Ma Yun|16.50|
|Yang Bin|49.80|
|Li Wenjiang|38.90|
|Song Wenbao|18.00|
|Total|464.50|

Equity incentive plans granted to directors, supervisors and senior management of the Company in the reporting period□ Applicable√ Not applicable
IV. Changes of directors, supervisors, senior managers of company
||||||
|-|-|-|-|-|
|Name|Position held|Type|Date|Reason|
|||Leaving office|||
|||||No longer reappointed in company management|
|Zhang He|Chairman, GM|for expiry of|Feb. 5, 2013||
|||||changing|
|||office term|||
|||Leaving office|||
|||||No longer reappointed in company management|
|Mu Chuanjiang|Vice Chairman|for expiry of|Feb. 5, 2013||
|||||changing|
|||office term|||
|||||No longer reappointed as Director, Standing DGM in|
||Director,|Appointing and|||
|Yang Bin|||Feb. 5, 2013|company management changing, being engaged as|
||Standing DGM|removing|||
|||||DGM. On Dec. 12, 2013, resigned from DGM.|
||Director,||||
|||Leaving office|||
||Financial|||No longer reappointed in company management|
|Xu Junrao||for expiry of|Feb. 5, 2013||
||Majordomo,|||changing|
|||office term|||
||Board Secretary||||
|||Leaving office|||
|||||No longer reappointed in company management|
|Hidetoshi Arima|Director|for expiry of|Feb. 5, 2013||
|||||changing|
|||office term|||
|||Leaving office|||
|||||No longer reappointed in company management|
|Wang Weijie|Director|for expiry of|Feb. 5, 2013||
|||||changing|
|||office term|||
|||Leaving office|||
|||||No longer reappointed in company management|
|Men Yuesheng|Supervisor|for expiry of|Feb. 5, 2013||
|||||changing|
|||office term|||

Dalian Refrigeration Co., Ltd. 2013 Annual Report
||||||
|-|-|-|-|-|
|||Leaving office|||
|||||No longer reappointed in company management|
|Wang Dekun|DGM|for expiry of|Feb. 5, 2013||
|||||changing|
|||office term|||
|||Leaving office|||
|||||No longer reappointed in company management|
|Zhang Hongzhi|DGM|for expiry of|Feb. 5, 2013||
|||||changing|
|||office term|||
|||Leaving office|||
|||||No longer reappointed in company management|
|Hu Xitang|DGM|for expiry of|Feb. 5, 2013||
|||||changing|
|||office term|||
|Xiao Yongqin|Chairman|Being elected|Feb. 5, 2013|Being elected in company management changing|
|Wang Jian|Vice Chairman|Being elected|Feb. 5, 2013|Being elected in company management changing|
|||||Being elected and engaged in company management|
|Liu Kai|Director, GM|Being elected|Feb. 5, 2013||
|||||changing|
|||||Being elected and engaged in company management|
|Wang Zhiqiang|Director, DGM|Being elected|Feb. 5, 2013||
|||||changing|
||Director,||||
|||||Being elected and engaged in company management|
|Rong Yan|Financial|Being elected|Feb. 5, 2013||
|||||changing|
||Majordomo||||
|Nagasawa|||||
||Director|Being elected|Feb. 5, 2013|Being elected in company management changing|
|Hideharu|||||
||Independent|||Being reelected and reappointed in company|
|Wang Huiquan||Being elected|Feb. 5, 2013||
||director|||management changing|
||Independent|||Being reelected and reappointed in company|
|Xing Tiancai||Being elected|Feb. 5, 2013||
||director|||management changing|
||Independent|||Being reelected and reappointed in company|
|Liu Caiping||Being elected|Feb. 5, 2013||
||director|||management changing|
||Chairman of||||
|||||Being reelected and reappointed in company|
|Yu Fuchun|Board of|Being elected|Feb. 5, 2013||
|||||management changing|
||Supervisors||||
|||||Being reelected and reappointed in company|
|Mao Chunhua|Supervisor|Being elected|Feb. 5, 2013||
|||||management changing|
|Ma Yun|Supervisor|Being elected|Feb. 5, 2013|Being elected in company management changing|
|||||Being engaged in changing senior managers by the|
|Li Wenjiang|DGM|Being engaged|Dec. 12, 2013||
|||||company|
|Song Wenbao|Board Secretary|Being engaged|Feb. 5, 2013|Being engaged in company management changing|

 On Feb. 5, 2013, the company held the 1st ExtraordinaryShareholders’ General Meeting of 2013 and the 1st Session of the 6th Board
of Director, the 1st Session of the 6th Board of Supervisors to carry out the management changing work. The directors, supervisors
and senior managers of the company had great changes. For specific changes, refer to the announcements on resolutions of the 1 st
Dalian Refrigeration Co., Ltd. 2013 Annual Report ExtraordinaryShareholders’ General Meeting of 2013, the 1st Session of the 6th Board of Directors, the 1st Session of the 6th Board of Supervisors of the company as published on China Securities, HK Commercial Daily and Cninfo website on Feb. 6, 2013. On Dec. 12, 2013, the company held the 7th Session of the 6th Board of Directors, in which the report on changing the DGM of the company was reviewed and passed and it was agreed that Mr. Yang Bin resigned from DGM and was appointed as the Sales Consultant of the company; Mr. Li Wenjiang was appointed as the DGM of the company.
||
|-|
|On 4 March 2014, Board of the Company received resignation in written from Xiao Yongqin, Wang Jian, Nagasawa Hideharu and|
|Rong Yan due to a career moves or job demand, they respectively asked to step down chairman, deputy chairman or director etc. of|
|the Company.|
|On 27 March 2014, the 1 st extraordinary general meeting of 2014 was held by the Company for by-election for the vacancy in|
|directors. And Ji Zhijian, Xu Junrao, Kobayashi Noriaki and Kijima Tadatoshi were elected as director of the Company. On the|
|follow-up 9th meeting of 6 th session of the Board held on the same day, Ji Zhijian elected as Chairman of the Company and|
|Kobayashi Noriaki elected as the deputy chairman for the Company.|

V. Change in the core technical team or key technical personnel (who are not directors, supervisors and senior management) in the reporting period
□ Applicable√ Not applicable
VI. Status of the Company's staff
1. As of Dec. 31, 2013 the Company and its major subsidiary Wuxin Refrigeration had 2,126 enrolled employees, including 1,263 persons engaged in production, accounting for59%; 234 persons engaged in engineering and
technology, accounting for11%; 314 persons engaged in marketing, accounting for15%; and 315 persons engaged in management, accounting for15%.
2. As of Dec. 31, 2013,, among enrolled employees of the Company and its major subsidiary Wuxin Refrigeration, 62 persons have the educational background of Master or higher, accounting for3%; 538 persons have the educational background of university, accounting for25%; 625 persons have the educational background of junior college, accounting for30%; and 901 persons have the educational background of secondary technical school or lower, accounting for42%.
3. The Company applied the post- and performance-related pay system with secondary distribution by the department according to performance of an employee.
4. The Company formulated the annual training plan and gave purposeful training to an employee in consideration of his/her post requirement.
5. The pension and medical expense for retired employees of the Company were paid by the social insurance body.
Dalian Refrigeration Co., Ltd. 2013 Annual Report Section 8 Corporate Governance
I. Basic situation of corporate governance
Within the reporting period, the company further deepened and perfected the normative internal control system and upgraded the governing level of the company continuously.
There were no problems with the Company concerning horizontal competition caused by restructures and other reasons. The main normal associated transactions between the Company and the associated companies included purchasing the supporting products for package projects from the associated companies, and selling the supporting parts and
components to the associated companies and providing them with the labor service. Associated transactions between the Company and the associated companies are necessary for normal production and operation and helpful for the
Company’s healthy development, and therefore will continue. The Company will strictly follow the related
decision-making procedures and fulfill the obligation in information disclosure in order to further regulate associated transactions.
Was there any deviation of the Company's corporate governance from the requirements in the Company Law and China Securities Regulatory Commission's regulations?
□ Yes√ No
There was no deviation of the Company's corporate governance from the requirements in the Company Law and China Securities Regulatory Commission's regulations.
The activities for corporate governance of the Company, and establishment and implementation of the internal information insider registration and management system
The Company has established the internal information insider registration and management system and strictly complied with the related regulations. In 2013, the Company launched the training with the topic of prevention from insider trading to strengthen the supervision and management of internal information insiders. Before any significant sensitive information which may have influence on the Company's share price was disclosed and after any abnormal fluctuation in the Company's share price occurred, the Company purposefully examined the Company's share buying and selling and did not find any fact that internal information insiders bought or sold the Company's shares by use of the internal information. In the reporting period, there was no director, supervisor or senior management who bought or sold the Company's shares by violation of the regulations.
II.Shareholders’ general meeting convened in the reporting period
1. AnnualShareholders’ general meeting within this reporting period
|||||||
|-|-|-|-|-|-|
|Session||||||
|||||Disclosing||
|number of|Holding date|Meeting bill name|Resolution||Disclosing index|
|||||date||
|meeting||||||
|||1. Work report of the Board of Meeting f or||||
|||2012; 2. Work report of the Board of||||
|||Supervisors for 2012; 3. Financial final||||
|||settlement report of the company for 2012;||||
|2012||4. Profit distribution plan of the company|||B018 of China|
|Annual||for 2012; 5. Report on prediction of daily|All above||Securities, A21 of|
|||associated transactions of the company in||||
|Shareholders’|May 21, 2013|2013; 6. Report on engaging annual|bills were|May 22, 2013|HK Commercial|
|General||auditing agency of the company for 2013;|passed||Daily, Cninfo|
|||7. Annual report of the company for 2012;||||
|Meeting|||||website|
|||8. Work reports of the independent directors||||
|||of the company for 2012; 9. Report on||||
|||authorizing the operation level of the||||
|||company to apply for bank credit line and||||
|||loan line.||||

Dalian Refrigeration Co., Ltd. 2013 Annual Report 2. ExtraordinaryShareholders’ General Meeting in this reporting period
|||||||
|-|-|-|-|-|-|
|Session number of|||Resolution|Disclosing||
||Holding date|Meeting bill name|||Disclosing index|
|meeting||||data||
|||1. Electing directors of the 6th Board|All above billwere passed|||
|||of Directors of the company: Xiao||||
|The 1st Extraordinary||Yongqin, Wang Jian, Liu Kai, Wang|||B014 of China|
|||Zhiqiang, Rong Yan, Nagasawa||||
|Shareholders’|||||Securities, A9 of HK|
||Feb. 5, 2013|Hideharu, Wang Huiquan, Xing||Feb. 6, 2013||
|General Meeting of||Tiancai, Liu Caiping; 2. Electing the|||Commercial Daily,|
|||supervisors of the 6th Board of||||
|2013|||||Cninfo website.|
|||Supervisors taken by the shareholder||||
|||representatives: Mao Chunhua, Ma||||
|||Yun.||||
||||It was agreedto change toengageDahua CPAs|||
|The 2nd|||||B048 of China|
|Extraordinary|||||Securities, A24 of|
|||Report on changing the engagement||||
|Shareholders’|Dec. 30, 2013|of auditing agency of the company|as the|Dec. 31, 2013|HK Commercial|
|General Meeting of||for 2013.|auditingagency of thecompany for2013.||Daily, Cninfo|
|2013|||||website.|

III. Independentdirectors’ execution of duties in the reporting period
1. Attendance of independent directors to the meetings of the Board of Directors and general meetings
||||||||
|-|-|-|-|-|-|-|
|Attendance of independent directors to the meetings of the Board of Directors|||||||
||Number of due||||Number ofabsences|Failure to attend|
|||Number of|Number of|Number of|||
|Name of independent|board meetings|||||in person for|
|||attendances on|attendance by|attendance by|||
|director|in the reporting|||||successive two|
|||the spot|communication|proxy|||
||period|||||times or not|
|Wang Huiquan|8|4|4|0|0|No|
|Xing Tiancai|8|4|4|0|0|No|
|Liu Caiping|8|4|4|0|0|No|
|Number of attendances as a non-voting|||||||
|||2|||||
|delegate|||||||

2. Objections to the related matters of the Company raised by independent directors
The independent directors have raised no objections to the related matters of the Company in the reporting period. 3. Other description of independentdirectors’ execution of duties
For details of the Company's independent directors' execution of duties, see the 2013 annual work report of the independent directors of the Company.
IV. Execution of duties of the special committees under the Board of Directors in the
reporting period
1. Execution of duties of the audit committee under the Board of Directors
Dalian Refrigeration Co., Ltd. 2013 Annual Report With performance of its duty according to the Implementation Rules for the Audit Commission under the Board of Directors and the Annual Reporting Work Rules for the Audit Commission, the Audit Commission under the Board of Directors supervised theCompany’s internal audit system and its implementation, audited the Company’s accounting information and its disclosure and assessed the work of the external audit institution.
In the process of changing the engagement of auditing firm for 2013, the auditing commission paid attention to this actively and made an effective communication with the former CPA firm and the new CPA firm and developed special comments on basis of evlauting the practicing quality of both parties rationally and agreed to submit to the 7th Session of the 6th Board of Directors for reviewing.
In the work of evaluation of a normative internal control system of the company, the Auditing Commission brought into play actively the duty of organization, leadership and supervision. According to the company internal control defect recognization standard, it examined and recognized the internal control defect recognization summary table developed by the internal control evaluation work group of the company, and had an examination reading of the internal control evaluation report of the company for 2013, believing that the status quo of the internal control system of the company complies with related requirements and with the actual situation of the company and it is being carried out satisfactorily. The internal control evaluation report of the company for 2013 reflects the above facts accurately.
In theCompany’s 2013 annual audit work, the Audit Commission conducted positive communication and effective coordination with the audit institution Da Hua Certified Public Accountants. The Audit Commission conducted communication with the person in charge of the project of the audit institution on the audit work plan, schedule, matters that should be noticed in audit and other matters and reached an agreement with them. In the process of audit, they kept close information on the progress of audit work and urged the audit institution many times to ensure the quality and schedule in the audit work. Through serious review of the Company’s annual finance report and annual report after completion of the audit work, the Audit Commission believed that the Company’s finance report was comprehensive and authentic, and the finance report and other information disclosed by the Company were objective and true, having reflected the true annual financial status of the Company.
The Audit Commission believed that in the 2013 annual audit service for the Company, Da Hua Certified Public Accountants implemented the audit for the Company on the practicing basis of independency, objectivity and fairness and strictly abided by the new accounting standards. They worked out a well-considered plan, allocated all necessary personnel, positively contacted our Audit Commission and independent directors, and completed the 2013 annual audit service for the Company through its industrious and conscientious working. It is suggested that Da Hua Certified Public Accountants should be reengaged as the auditing agency for the company in 2014.
2. Execution of duties of the remuneration and evaluation committee under the Board of Directors
With performance of its duty according to the Implementation Rules for the Remuneration and Evaluation Commission under the Board of Directors, the Remuneration and Evaluation Commission under the Board of Directors examined the annual salary and remuneration level of theCompany’s directors, supervisors and senior executives, and believed that the decision-making procedure for salary and remuneration of the above persons and the paying standard complied with the laws and regulations and theCompany’s regulations, and the salary and remuneration information disclosed in theCompany’s Annual Report for 2013 was authentic and exact.
V. Work of the Board of Supervisors
Was there any risk with the Company found by the Board of Supervisors in their supervision activities in the reporting period?
□ Yes√ No
The Board of Supervisors had no objections to the matters under supervision in the reporting period.
VI. Status of the Company's business, staff, asset, organization and finance separations from the holding shareholder
The Company was separated from the holding shareholder in business, staff, asset, organization and finance, and has the independent and complete business and operation capability.
VII. Horizontal competitions
None
VIII. Performance evaluation and incentive system for senior management
The Company evaluated and rewarded senior management through the Company's examination procedure for assets operation performance in the reporting period.
Dalian Refrigeration Co., Ltd. 2013 Annual Report Section 9 Internal Control
I. Construction of the internal control system
As a listed company of internal control pilot in the jurisdiction of Dalian, the company carried out relevant work in 2011 pursuant to related regulations of Basic Enterprise Internal Control Specification and its supporting guide from the Ministry of Finance, according to the work scheme for implementing the company internal control specifications, combining with the actual situation of production and operation of the company and taking the parent company Dalian Refrigeration Co., Ltd. and the important subsidiary Wuhan New World Refrigeration Industry Co., Ltd. as the scope of implementation. In 2012, the company particularly centered around the subsidiaries not included in the internal control implementation scope in 2011 and its important business flow to further promote the normative internal control system construction work. In 2013, the company centered around the operation subject as “changing• upgrading” to further deepen and perfect the normative internal control system construction.
II. Board ofDirector’s statement about the internal control responsibility
According to the Basic Standard for Enterprise Internal Control and the Implementation Guideline for Enterprise Internal Control, the Company's directors should bear the full responsibility for establishment and perfection of theCompany’s internal control and its effective operation. The Board of Directors of the Company and all its members take all responsibilities, individual and/or joint, for the reality, accuracy and completeness of the internal control report. III. Basis for establishing the internal control of financial statements
The Basic Standard for Enterprise Internal Control and the Implementation Guideline for Enterprise Internal Control. IV. Report on self-evaluation of internal control
|||
|-|-|
|Details of material weakness in the internal control found in the reporting period described in the report on||
|self-evaluation of internal control||
|There was no material weakness in the internal control found in the reporting period.||
|Date of disclosing the full text of the report on||
||Apr. 24, 2014|
|self-evaluation of internal control||
|Disclosure reference to the full text of the report|For the 2013 annual report on self-evaluation of internal control of|
|on self-evaluation of internal control|the Company, visit the website www.cninfo.com.cn.|

V. Internal control audit report
|||
|-|-|
|Description of the deliberation opinions in the internal control audit report||
|We think that as of Dec. 31, 2013, Dalian Refrigeration Co., Ltd. had maintained an effective internal control over the financial||
|reports in all material aspects according to Basic Enterprise Internal Control Specification and relevant regulations .||
|Date of disclosing the full text of the||
||Apr. 24, 2014|
|internal control audit report||
|Disclosure reference to the full text|For the 2013 annual internal control audit report of the Company, visit the|
|of the internal control audit report|website www.cninfo.com.cn.|

Did the accounting firm issue the internal control audit report with nonstandard opinions?
□ Yes√ No
Was the internal control audit report issued by the accounting firm consistent with the opinion in the self-evaluation report of the Board of Directors?
√ Yes□ No
VI. Establishment and implementation of the accountability system for serious mistakes in annual reports
The Company established the accountability system for serious mistakes in disclosure of information, and strictly
implemented it. In the reporting period, there were no matters with the Company concerning correction of serious
accounting mistakes, supplementation of important omissive information and revision of performance predictions.
Dalian Refrigeration Co., Ltd. 2013 Annual Report Section 10 Financial Report
I.Auditor’s Report
DHS(2014) No.003568
TO THE SHAREHOLDERS OF DALIAN REFRIGERATION COMPANY LIMITED
We have audited the financial statements of Dalian Refrigeration Company Limited, which comprise the Balance
Sheet as at 31st December 2013, and the Income Statement, Cash Flow Statement and Statement of Changes in
Owner’s Equity for the year then ended, and the notes to the financial statements.
Management’s Responsibility for the Financial Statements
It is the responsibility of Dalian Refrigeration Company Limited ’s management to prepare and present the
financial statements fairly .And the responsibilities include: (1) Prepare the financial statements in conformity with
“Accounting Standard for Business Enterprises” and “Accounting System of thePeople’s Republic of China for
Enterprises”, and to be presented fairly. (2) Design, conduct and maintain the internal control related to the
financial statements to prevent the big material misstatement with the reason of fraud and mistakes.
Auditor's Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our
audit in accordance with the Auditing Standards for Chinese Certified Public Accountants. Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free
of material misstatement.
An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial
statement. The selected audit procedure depended on the judgment of CPA includes identify the risks of the
material misstatements due to the fraud and mistakes. In evaluating the risks, we are only concerned with the
internal control systems so as to design an appropriate audit procedure, but not to express our opinion on the
effectiveness of the internal control systems. An audit also includes assessing the accounting principles used and
significant estimates made by the management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
Opinion
In our opinion, the financial statements are prepared in conformity with Accounting Standards for Business
Enterprises and, in all material respects, present fairly the consolidated andcompany’s financial position of Dalian
Refrigeration Company Limited as at 31 December 2013, and their results of its operations and cash flow for the
year then ended.
Da Hua Certified Public Accountants China CPA: Yang Yingjin
（Special GeneralPartnership）
Beijing, China China CPA: Wang Shuhuan
April 22, 2014
Dalian Refrigeration Co., Ltd. 2013 Annual Report II. Accounting statement (attached hereunder)
III. Notes to the accounting statement
(All amounts in RMB Yuan unless otherwise stated)
Ⅰ.General information
Dalian Refrigeration Company Limited (the “Company”) was incorporated in the People’s Republic of China (the “PRC”) on December 18, 1993 as a joint stock limited company. The principal activities of the Company are manufacture, sale and installation of refrigeration equipments. The Company together with its subsidiaries is hereinafter collectively referred to as the “Group”. The address of theCompany’s registered office is No.888 Xinan Road, Shahekou District, Dalian, China.
TheCompany’s domestically listed RMB denominated ordinary shares ( “A shares”) and domestically listed foreign investment ordinary shares (“B shares”) were listed on the Shenzhen Stock Exchange in the PRC in December 1993 and March 1998 respectively.
As the China's Refrigeration& Air Conditioning Association published, the Company was put the first place for its sales income and economy utility general index in the line; and its products were also been the first level for variety, specification, market occupation rate and export sales in China's refrigeration industry.
Ⅱ. The main accounting policies, accounting estimates and corrections of accounting errors
1. Basic of preparation of financial statements
The financial statements have been prepared on the basic assumption of going concern and on the accrual basis of accounting. The effects of evens and other transactions actually occurred and they have been recorded and measured in accordance with the Chinese Accounting Standards (2006): Framework and other accounting standards.
2. Declaration on following Accounting Standard for Business Enterprises
Declaration from the Company: The financial report made by the Company was in accordance with Accounting Standard for Business Enterprises, which reflected the financial position, financial performance and cash flow of the Company truly, objectively and completely.
3. Fiscal year
The Company adopts the calendar year as its fiscal year, i.e. from January 1 to December 31.
4. Functional currency
RMB was the functional currency of the Company.
5. Accounting measurement attribute
A. Accounting measurement attribute
The Company adopts the accrual basis for accounting treatments. All assets are stated at their historical costs on acquisition. The financial assets or financial liabilities which are measured at their fair value and the variation of which is recorded into the profits and losses are stated at their fair value. Stocks or fixed assets and other assets on acquisition, which its payment delayed longer than normal payment condition, should be measured at the present value of the payment. Other assets with impairment are measured at the recoverable amount. The amount of overage on assets is determined at replacement cost.
Dalian Refrigeration Co., Ltd. 2013 Annual Report B. The reporting items which the accounting measurement attributes changed during the current period
No.
6. Accounting method of business combination under the same control and not under the same control
A. The Company adopts equity method for business combination under same control. The assets and liabilities that the combining party obtained in a business combination shall be measured on their carrying amount in the combined party on the combining date. The difference between the carrying amount of net assets acquired by the combining party and the carrying amount of the consideration paid by it (or the total par value of the shares issued) shall be adjusted to capital surplus. If the capital surplus is not sufficient for adjustment, retained earning is adjusted respectively. The business combination costs that are directly attributable to the combination, such as audit fees, valuation fees, and legal service fees and so on are recognized in profit or loss during the current period when they occurred. The bonds issued for a business combination or the handling fees, commissions and other expenses for bearing other liabilities shall be recorded in the amount of initial measurement of the bonds or other debts. The handling fees, commissions and other expenses for the issuance of equity securities for the business combination shall be credited against the surplus of equity securities; if the surplus is not sufficient, the retained earnings shall be offset. Where a relationship between a parent company and a subsidiary company is formed due to a business combination, the parent company shall, on the combining date, prepare consolidated financial statements according to the accounting policy of the Company.
B. The Company adopts acquisition method for business combination not under same control. The acquirer shall recognize the initial cost of combination under the following principles: a) When business combination is achieved through a single exchange transaction, the cost of a business combination is the aggregate of the fair values, at the date of exchange, of assets given, liabilities incurred or assumed, and equity securities issued by the acquirer, in exchange for control of the acquiree; b) For the business combination involved more than one exchange transaction, the cost of the combination is the aggregate cost of the individual transactions; c) The costs directly attributed to business combination are included in the cost of combination; d) Where a business combination contract or agreement provides for a future event which may adjust the cost of combination, the Company shall include the amount of the adjustment in the cost of the combination at the acquisition date if the future event leading to the adjustment is probable and the amount of the adjustment can be measured reliably.
The acquirer shall, on the acquisition date, measure the assets given and liabilities incurred or assumed by an enterprise for a business combination in light of their fair value, and shall record the balances between them and their carrying amounts into the profits and losses at the current period. The acquirer shall distribute the combination costs on the acquisition date, and shall recognize all identifiable assets, liabilities and contingent liabilities it obtains from the acquiree. a. the acquirer shall recognize the difference that the combination costs are over the fair value of the identifiable net assets obtained from acquiree as goodwill; b. if the combination costs are less than the fair value of the identifiable net assets obtained from acquiree, the acquirer shall reexamine the measurement of the fair values of the identifiable assets, liabilities and contingent liabilities obtained from the acquiree as well as the combination costs; and then after the reexamination, the result is still the same, the difference shall be recorded in the profit and loss of the current period.
Where a relationship between a parent company and a subsidiary company is formed due to a business combination, the parent company shall prepare accounting books for future reference, which shall record the fair value of the identifiable assets, liabilities and contingent liabilities obtained from the subsidiary company on the acquisition date. When preparing consolidated financial statements, it shall adjust the financial statements of the subsidiary company on the basis of the fair values of the identifiable assets, liabilities and contingent liabilities determined on the acquisition date according to the Company ’s accounting policy of “Consolidated financial statement”.
7. Basis of consolidation
(1) Scope of consolidation
Consolidated financial statements are included all subsidiaries of the parent.
Dalian Refrigeration Co., Ltd. 2013 Annual Report (2) Increase or decrease of the subsidiaries
For any subsidiary acquired by the Company through business combination under the same control, when the consolidated balance sheet for the current period is being prepared, the beginning balances in the consolidated balance sheet are made corresponding modification. For addition business combination not under same control during the reporting period, the Company makes no adjustment for the beginning balances in the consolidated balance sheet. When disposing subsidiary during the reporting period, the Company makes no adjustment for the beginning balances in the consolidated balance sheet. For any subsidiary acquired by the Company through business combination under the same control, when the consolidated income statement for the current period is being prepared, sales, expense and profit for the period from the beginning of the consolidated period to the year end of the reporting period are included in the consolidated income statement. For addition business combination not under same control during the reporting period, revenue, expense and profit for the period from acquisition date to the year end of the reporting period is included in the consolidated income statement. When disposing subsidiary during the reporting period, sales, expense and profit for the period from the beginning to the disposal date are included in the consolidated income statement.
For any subsidiary acquired by the Company through business combination under the same control, when the consolidated cash flow statement for the current period is being prepared, cash flow for the period from the beginning of the consolidated period to the year end of the reporting period is included in the consolidated cash flow statement. For addition business combination not under same control during the reporting period, cash flow for the period from acquisition date to the year end of the reporting period is included in the consolidated cash flow statement. When disposing subsidiary during the reporting period, cash flow for the period from the beginning to the disposal date is included in the consolidated cash flow statement .
(3)Principle of consolidation
The consolidated financial statements are based on the financial statements of individual subsidiaries which are included in the consolidation scope and prepared after adjustment of long-term equity investment under equity method and elimination effect of intra-group transaction.
(4) Minority interests
The portion of the equity of the subsidiaries that are not owned by the parent is presented as minority interest in the consolidated balance sheet. The portion of the profit or loss of the subsidiaries that are not owned by the parent is presented as minority interest in the consolidated income statement.
(5) Excess losses
The amount which losses of subsidiaries during the period exceeds the proportion ofminority’s obligation is offset minority interest as agreed in thesubsidiaries’ association or agreement and minorities have ability to bear the excess losses. Otherwise, the excess losses are offset equity of the parent company. Profits made afterward by subsidiaries are attributable to equity of the parent company before recovery of excess losses.
8. The standard for recognizing cash equivalent when making cash flow statement
Cash equivalent means the highly liquid, very safe investment which can be easily converted into cash, and the company can hold it for a very short time (3 months from the date of purchase).
9. Method of foreign currency translation
When foreign currency translation occurs, the spot exchange rate on the date of translation (i.e., the middle price of the intraday foreign exchange rate of RMB published byPeople’s Bank of China) shall be converted into RMB for keeping accounts while the occurred foreign currency exchange or the foreign exchange transactions shall be translated according to exchange rate adopted in actual transactions. On the balance sheet date, the foreign currency monetary items and foreign currency non-monetary items shall be treated in accordance with the following provisions:
The foreign currency monetary items shall be translated at the spot exchange rate on balance sheet date, of which happen during the normal business period shall be recorded into gains and losses at the current period; of which happen during organization period shall be recorded into long-term deferred expense. The exchange gains or losses caused by the borrowing belonging to acquiring fixed assets shall be treated by the capitalization of borrowing costs.
Foreign currency non-monetary items shall be translated at spot rate on the date of transaction, not changing the amount of functional currency.
The Company translates the financial statements of its foreign operation in accordance with the following provisions: a) the asset and liability items in the balance sheets shall be translated at a spot exchange rate ruling at the balance sheet date. Among the owner's equity items, except the ones as "retained earnings", others shall be translated at the spot exchange rate ruling at the time when they occurred;. b) The income and expense items in the income statements shall be translated with approximate exchange rate of the sight
Dalian Refrigeration Co., Ltd. 2013 Annual Report rate on the transaction occurring date. The foreign exchange difference arisen from the translation of foreign currency financial statements shall be presented separately under the owner's equity in the balance sheet.
10. The recognition and measurement of financial instruments and the transfer of the financial instruments
(1) Recognition of the financial assets
When an enterprise becomes a party to a financial instrument, it shall recognize a financial asset or financial liability. Where a financial asset satisfies any of the following requirements, the recognition of it shall be terminated:
①Where the contractual rights for collecting the cash flow of the said financial assets are terminated;
②Where the said financial asset has been transferred and meets the conditions for recognizing the termination of financial assets as provided for in Accounting Standard for Business Enterprises No. 23– Transfer of Financial Assets. Only when the prevailing obligations of a financial liability are relieved in all or in part may the recognition of the financial liability be terminated in all or partly.
(2) The classification, recognition and measurement of financial assets and financial liabilities
The financial assets or financial liabilities got or born by the Company are measured according to the following classifications:①The financial assets or financial liabilities which are measured at their fair value and the variation of which is recorded into the profits and losses of the current period
The interest rate or cash dividend which was gained in the period when the financial assets held by the Company are measured at its fair value and of which the variation is recorded into the profits and losses in the current period shall be recognized as investment income. On balance sheet date, the in change in the fair value of the financial asset or financial liability which is measured at its fair value and of which the variation is recorded into the profits and losses of the current period, shall be recorded into the profits and losses of the current period; When the said financial assets of financial liabilities are on disposal, the difference between the fair value and the amount in initial account shall be recognized as investment income, meanwhile, the profits and losses arising from the change in fair value shall be adjusted.
②The investments which will be held to their maturity
The investments which will be held to their maturity will regard the sum between the gained fair value and the transaction expense thereof as the initially recognized amount. The interest on bonds in payment, of which the mature interest is not drawn, shall be solely recognized as the receivables. The interest revenue which is measured and recognized by the amortized cost and actual interest rate during the period of the investments which will be held to their maturity shall be recorded into investment income. The actual interest rate which is recognized in the period of gaining the investments which will be held to their maturity, shall maintain unchanged within the predicted term of existence or within a shorter applicable term of the said investment which will be held to their maturity. The little difference between actual interest rate and coupon rate of which interest revenue can be measured at the coupon rate shall be recorded into the profits of losses in the current period. When the investments which will be held to their maturity are on disposal, the difference between the obtained price and investment book value shall be recorded into the profits and losses in the current period.
③The accounts receivables
Thecreditor’s right receivable formed during the Company selling commodity outside or offering labor shall be regarded as the initially recognize amount in according with the receivable price stipulated in the contract or agreement signed between the Company and the buyers. When the Company recovers or disposes the accounts receivable, the difference between the obtained price and the book value of the accounts receivable shall be recorded into the profits and losses in the current period.
④Financial assets available for sale
The financial assets available for sale will be regarded as the initial recognized amount in according with the sum between the fair value obtained from the said financial assets and the transaction expense thereof. The interest on bonds of which the mature interest
Dalian Refrigeration Co., Ltd. 2013 Annual Report rate is not drawn in the payment or the cash dividend which is declared but not extended in the payment shall be solely recognized as the receivables.
The interest rate or cash dividend gained during the period of holding the financial assets available for sale shall be recorded into investment income. On balance sheet date, the financial assets shall be measured through fair value, while the change in fair value is recorded into capital reserves (other capital reserves).
When the financial assets are on disposal, the difference between the obtained price and the book value of the financial assets shall be recorded into investment income, meanwhile, the amount on proposal transferring out from the accumulated amount which is directly recorded intoshareholders’ equity and arises from the variation of the fair value, shall be recorded into investment income.⑤Other financial liabilities
Other financial liabilities are regarded as the initial recognized amount in accordance with the sum between the fair value and the transaction expense thereof. The Company shall make subsequent measurement on other financial liabilities on the basis of the post-amortization costs.
(3) Main recognition method for the fair value of the financial assets or financial liabilities
① The quotation in the active market shall be used to recognize the fair value of the financial assets or financial liabilities existing in active market.
② If the financial instruments do not exist in the active market, the fair value shall be recognized by value appraisal techniques.③ As for the financial assets initially obtained of produced at source and the financial liabilities assumed, the fair value thereof shall be determined on the basis of the transaction price of the market.
(4) Main impairment test method of the financial assets and impairment provision method
The recognition standard for impairment provision of the financial assets: the Company shall carry out an inspection, on the balance sheet day, on the carrying amount of the financial assets other than those measured at their fair values and of which the variation is recorded into the profits and losses of the current period. Where there is any objective evidence proving that such financial asset has been impaired, an impairment provision shall be made.
The withdrawal method for impairment provision of the financial assets: as for the impairment provision of the financial assets is measured on the basis of post-amortization costs, if the current value of the predicted future cash flow of the financial assets is below the difference in the carrying amount of the said financial asset, the impairment provision of the financial assets shall be made; as for the impairment provision of the financial assets available for sale, if the recoverable amount is below the difference in the carrying amount, the impairment provision shall be made. Where a sellable financial asset is impaired, even if the recognition of the financial asset has not been terminated, the accumulative losses arising from the decrease of the fair value of the owners’ equity which was directly included shall be transferred out and recorded into the profits and losses of the current period.
11. Receivable accounts
(1) Recognition and providing of bad debt provision on individual receivable account with large amount
Basis of recognition or standard
amount of individual account Top 5 of account receivables at year end
with large amount
Impairment test performed individually, bad debt provision will be
provided at the difference of expected cash flow lower than the book
Basis of bad debt provision
value. Without bad debt provision needed provided through individually
test, bad debt provision will be provided at age analysis method .
Dalian Refrigeration Co., Ltd. 2013 Annual Report (2) Recognition and providing basis of bad debt reserves for group of receivable accounts with similar characteristics of credit risks①Basis of recognition and providing of bad debt provision
Basis of recognition for groups
Group of inner units Accounts receivable due from subsidiaries included in consolidated scope
Group by age analysis With similar characteristics of credit risks
Basis of bad debt provision
Group of inner units Individual identified method
Group by age analysis Age analysis method
②Age analysis
Ages Provision rates for Provision rates for
account receivables(%) other receivables(%)
Within 1 year, (included, same for the followings) 5% 5%
1-2 years 10% 10%
2-3 years 30% 30%
3-4 years 50% 50%
4-5 years 80% 80%
Over 5 years 100% 100%
(3)Other minor amount
For the receivables which are not individually significant, and which individually significant but are not provided provision individually, in accordance with credit risk characteristics, the method of provision for bad debts is aging analysis method. The assessment is made collectively where receivables share similar credit risk characteristics (including those having not been individually assessed as impaired), based on their historical loss experiences, and adjusted by the observable figures reflecting present economic conditions.
12. The classification, pricing and accounting methods for inventories; the recognition standard and withdrawal method of the inventories falling price reserves
(1) Classification of the inventories: purchased materials, stocking materials, material cost difference, entrusted processing materials, unfinished products, finished products, working on project and etc.
(2) The inventory system is on the basis of perpetual inventory method.
(3) The inventories are priced by the historical cost method, so are the raw material and auxiliary material, the sold material cost is carried over on the basis of first-in first-out method; the product cost is accounted through standard cost method, the difference between the standard cost and historical cost is undertaken by the cost of the finished goods in process, while the cost of sales is carried over on the basis of weighted average method; low-value consumption goods will be amortized once when drawn. (4) As for the inventory write-down provided: each kind of inventories at the end of the report period will be measured at the lower of cost or net realizable value, and a provision for inventory write-down will be established for any difference between the cost and the lower net realizable value. The net realizable value refers to the value minus the predicted expense needed in the process of
completing the production and sales from the predicted price for sale and the taxes.
Dalian Refrigeration Co., Ltd. 2013 Annual Report 13. The method for measuring long-term equity investment
(1)Confirmation of initial investment cost of long-term equity investment
For the consolidation of enterprises that under the same control, take the book value proportion of theowner’s equity of consolidated party on consolidation date as initial investment cost of long-term equity investment. The balance of initial investment cost of long-term equity investment and paid cash, transferred non-cash asset, and book value of debt taken, should adjust capital public reserve; and adjust retained earning while the capital public reserve isn’t enough to offset. For the consolidation of enterprises that under different control, take assets paid out in order to acquire the control right of purchased party on purchase date, occurred or undertaken debt and fair value of issued equity securities as initial investment cost of long-term equity investment. The long-term equity investment acquired in other manners except from the enterprise consolidation, should confirm its initial investment cost according to following regulations:
①The long-term equity investment acquired by paying cash, should take purchasing price that actually paid as initial investment cost. Initial investment cost including expense, tax and other necessary payout that directly related with acquiring the long-term equity investment.
②The long-term equity investment acquired by issuing equity securities, should take fair value of the issued equity securities as initial investment cost.
③The long-term equity investment invested by investors, should take the promised value in investment contract or agreement as initial investment cost, excluding those promised in the contract or agreement that the value is not fair.
④. The long-term equity investment acquired by non-monetary asset exchange, its initial investment cost should be confirmed according to Accounting Standards of Business EnterpriseNo.7—Non-monetary Asset Exchange.
⑤. The long-term equity investment acquired by debt reorganization, its initial investment cost should be confirmed according to Accounting StandardsNo.12—Debt Restructuring.
(2). Subsequent measurement of long-term equity investment
①. The following long-term equity investments adopt cost calculation method:
i. The long-term equity investment on the invested units controlled by the Company.
The investment of the Company on the subsidiaries and calculated on cost method and adjusted according to equity method while compiling the consolidated financial statements.
ⅱ.The Companyhasn’t joint control or material influence on invested party, or the long-term investment hasn’t quoted price on active market so its fair valuecan’t be dependably measured.
②. The long-term equity investment that the Company has together control or material influence on the invested party, adopt equity method to calculated.
14. The fixed assets pricing and depreciation method
(1) Definition of fixed assets
The fixed assets refer to the assets related to production and operation that has over 1 year lifetime.
(2)Classification
The fixed assets include property and plant, machinery and equipment, motor vehicles, electric equipments and other equipments etc. (3)Pricing of fixed assets
The initial measurement of a fixed asset shall be made at its cost. The cost of a purchased fixed asset is based on the actual expense; the cost invested to a fixed asset by the investor shall be ascertained in accordance with the value as stipulated in the investment contract or agreement; the cost of a self-constructed fixed asset shall be formed by the necessary expenses incurred for bringing the
Dalian Refrigeration Co., Ltd. 2013 Annual Report asset to the expected condition for use; the costs of fixed assets acquired through the exchange of non-monetary assets,
recombination of liabilities, merger of enterprises, and financial leasing shall be respectively ascertained in accordance with the Accounting Standard for Business Enterprises No. 7 - Exchange of Non-monetary Assets, the Accounting Standard for Business Enterprises No. 12– Debt Restructuring, the Accounting Standard for Business Enterprises No.21– Leases.
(4)Deprecation method of fixed assets
Depreciation is calculated using the straight-line method to allocate their cost to their residual values over their estimated useful lives, as follows:
Fixed assets Estimated lifetime Annual depreciation Expected residual
rates value rates
Buildings 20-40 years 2.25-4.85% 3% 、5%、10% Machinery and equipment 10-22 years 4.09-9.7% 3% 、5%、10% Motor vehicles 4-15 years 6-24.25% 3% 、5%、10% Electric equipments 5 years 18-19.4% 3% 、5%、10% Other equipments 10-15 years 6-9.7% 3% 、5%、10% Theasset’s carrying amount is written down immediately to its recoverable amount if theasset’s carrying amount is greater than its estimated recoverable amount.
15. Construction-in-progress
(1). Construction-in-progress represents buildings and plant under construction and machinery and equipment under installation and testing, and is stated at cost.
(2). This includes cost of construction, plant and equipment and other direct costs plus borrowing costs which include interest charges and exchange differences arising from foreign currency borrowings used to finance these projects during the construction period, to the extent these are regarded as an adjustment to interest costs.
(3). When construction engineering in process has reached the scheduled state in commission, and has proceeded the final accounts of completing, validate all the actual expenses as the fixed asset; if the fixed asset has reached the scheduled state in commission without proceeding the final accounts of completing, validate the cost and adjust the original provisional estimated value according to the actual costs after finishing the final accounts of completing.
16. The pricing and amortizing method of intangible assets
(1) Pricing of the intangible assets
The intangible assets shall be initially measured according to its cost.
① The cost of outsourcing intangible assets shall include the purchase price, relevant taxes and other necessary expenditure directly attributable to intangible assets for the expected purpose.
② The cost of self-developed intangible assets shall include the total expenditures incurred during the period from the time when it meets the following conditions to the time when the expected purposes of use are realized, except that the expenditures which have already been treated prior to the said period shall not be adjusted.
ⅰ. It is feasible technically to finish intangible assets for use or sale;
ⅱ. It is intended to finish and use or sell the intangible assets;
ⅲ. The usefulness of methods for intangible assets to generate economic benefits shall be proved, including being able to prove that
Dalian Refrigeration Co., Ltd. 2013 Annual Report there is a potential market for the products manufacturing by applying the intangible assets or there is a potential market for the intangible assets itself or the intangible assets will be used internally.
ⅳ. It is able to finish the development of the intangible assets, and able to use or sell the intangible assets, with the support of sufficient technologies, financial resources and other resources;
ⅴ. The development expenditures of the intangible assets can be reliably measured.
③ The cost invested into intangible assets by investors shall be determined according to the conventional value in the investment contract or agreement.
④ The costs of intangible assets acquired from non-monetary assets transaction, debt recombination, government subsides, and merger of enterprises shall be determined respectively according to the Accounting Standard for Business Enterprises No. 7 - Non-monetary Assets, Accounting Standard for Business Enterprises No. 12 – Debt Restructurings, Accounting Standard for Business Enterprises No. 16– Government Grants and Accounting Standard for Business Enterprises No. 20 – Business Combinations.
(2) Amortization of the intangible assets
①As for the intangible assets with limited service life, which are amortized by straight-line method when it is available for use within the service period, shall be recorded into the current profits and losses. The Company shall, at least at the end of each year, check the service life and the amortization method of intangible assets with limited service life. When the service life and the amortization method of intangible assets are different from those before, the years and method of the amortization shall be changed.② Intangible assets with uncertain service life may not be amortized. However, the Company shall check the service life of intangible assets with uncertain service life during each accounting period. Where there are evidences to prove the intangible assets have limited service life, it shall be estimated of its service life, and be amortized according to the above method mentioned in (1). 17. Impairment of long-term assets
(1) At the end of accounting period, the Company shall check the long-term assets. There may be an impairment of assets when the following signs occur. The recoverable amount shall be estimated and the asset impairment loss shall be made in light of the difference that the recoverable amount of assets is less than the book value when the impairment happens. The signs are stated as follows:
① The current market price of assets falls, and its decrease is obviously higher than the expected drop over time or due to the normal use;
②The economic, technological or legal environment in which the enterprise operates, or the market where the assets is situated will have any significant change in the current period or in the near future, which will cause adverse impact on the enterprise;
③The market interest rate or any other market investment return rate has risen in the current period, and thus the discount rate of the enterprise for calculating the expected future cash flow of the assets will be affected, which will result in great decline of the recoverable amount of the assets;
④Any evidence shows that the assets have become obsolete or have been damaged substantially;
⑤ The assets have been or will be left unused, or terminated for use, of disposed ahead of schedule;
⑥ Any evidence in the internal report of the enterprise shows that the economic performance of the assets has been or will be lower than the expected performance, for example, the net cash flow created by assets or the operating profit (or loss) realized is lower (higher) than the expected amount;
⑦Other evidence indicates that the impairment of assets has probably occurred.
(2) The evidences to withdraw the impairment provision of long-term investment, fixed assets, construction in process and intangible asset: at the end of the report period, the Company will withdraw the asset impairment provision according to the difference that the recoverable amount of single asset is less than the book value. The recoverable value shall be recognized according to the high one
Dalian Refrigeration Co., Ltd. 2013 Annual Report between the net amount of fair value deducting disposal charge and the current value of the expected future cash flow of assets. If the recoverable amount of the single asset cannot be obtained, the recoverable amount shall be recognized on the basis of the asset group to which the asset belongs.
(3) The business reputation formed by merger of enterprises shall be distributed into the related asset group at the end of every year, then the asset group shall have the impairment test to measure the recoverable amount, comparing to the book value, if the recoverable amount of the asset group is less than the book amount, the difference shall first charge against the book value of the business reputation which is apportioned to the asset group; if the book value of the business reputation is not enough to charge against the difference, the uncharged balance shall be distributed by the other assets of the asset group in accordance with the book value.
(4) The recognition of the asset group under impairment test: the related minimum of asset groups that can share the synergetic benefit brought from merger through the prediction of the Company.
(5) The above impairment losses of assets cannot be reversed as soon as they are recognized.
18. Calculation method of loan expenses
(1) The loan expenses occurred to the Company includes loan interest, amortization of reduction price and premium price, assistant expenses and the exchange balance from foreign currency loan. The amortization of the interest, discount or premium and exchange difference from, the specific loan for purchasing fixed assets, if meeting the following three conditions, loan expenses should be capitalized.
① Asset disburses have been occurred.
② The borrowing costs has already incurred.
③ Purchase construction activity for achieving the asset utility condition has started. Other loan interest, amortization of reduction price and premium price and the exchange balance from foreign currency loan should be deemed as expenses of the period while they occur.
(2)Where a general borrowing is used for the acquisition and construction or production of assets eligible for capitalization, the enterprise shall calculate and determine the to-be-capitalized amount of interests on the general borrowing by multiplying the weighted average asset disbursement of the part of the accumulative asset disbursements minus the general borrowing by the capitalization rate of the general borrowing used. Auxiliary expense of general loan should be counted into current loss and interest. (3)To determine capitalized amount： Capitalized interest for purchasing fixed asset at the end of the current period is the accumulated expense and weight average asset multiplied capitalization rate. And the capitalization rate is determined by followingprinciples：
①Interest of the specialized loan for purchasing fixed assets is the capitalizationrat；e
②Above single specialized loan for purchasing fixed assets, the capitalization rate is the weighted average interest rate of these general borrowings.
(4)Temporary stop of capitalization: If the purchase and building activities for fixed assets stop abnormally and the interruption interval exceeds three months, the capitalization of borrowing cost should be stopped temporarily and deemed as the expenses of current period until the re-start of purchasing and building activities for assets.
(5)Stop of capitalization: When the purchased fixed assets have reached the expected serviceable condition, stop the capitalization of borrowing cost.
19. Calculating method on salary payable to staff
Thestaff’ salary means that the enterprise gives various remunerations for obtaining services providing by the employees or other
Dalian Refrigeration Co., Ltd. 2013 Annual Report relevant expenses. It includes:
i.Staff’s salary, bonus, allowance and subsidy;
ii.Staff’s welfare;
iii. Hospitalization insurance, endowment insurance, unemployment insurance, occupational injury insurance and childbirth insurance, etc. social insurances;
iv. Housing public reserve;
v. Labor union expenditure and personnel education expense;
vi. Non-monetary welfare;
vii. Compensation for rescinding the labor relationship with employee;
viii. Other expenses related with the services the employee supply.
During the accounting period of an employee' providing services to an enterprise, the Company shall recognize the compensation payable as liabilities. Except for the compensations for the cancellation of the labor relationship with the employee, the enterprise shall, in accordance with beneficiaries of the services offered by the employee, treat the following circumstances respectively: (1)The compensation for the employee for producing products or providing services shall be recorded as the product costs and service costs;
(2)The compensation for the employee for any on-going construction project or for any intangible asset shall be recorded as the costs of fixed asset or intangible assets;
(3)The compensation for the employee other than those as mentioned in Items (1) and (2) shall be recorded as profit or loss for the current period.
The social insurance such as hospitalization insurance, endowment insurance, unemployment insurance, occupational injury insurance and childbirth insurance; and housing public reserve handed by the company for the staff should be calculated in proportion of total salary according to the relevant regulations of local government during the accounting period of the services the employee supply to the company. Before the expiration of the contract, the company rescinds the labor relationship between the company and the staff or encourage staff accept the suggestion on compensation for accepting reduction at will, at the same time satisfy the following conditions, projected liabilities occurs for confirming rescinding the labor relationship with employee and giving compensation and is reckoned into current gains and losses:
i. The company officially established the plan on rescinding the labor relationship or brings forward the suggestions on reduction at will, and will be implemented;
ii. The company could not singly withdraw rescinding the labor relationship or suggestions of reduction.
20. Measurement method of estimated debts
The obligation pertinent to Contingencies shall be recognized as estimated debts when the following conditions are satisfied simultaneously:
(1) That obligation is a current obligation of the enterprise;
(2) It is likely to cause any economic benefit to flow out of the enterprise as a result of performance of the obligation;
(3) The amount of the obligation can be measured in a reliable way.
The Company shall check the book value of the estimated debts on the balance sheet date. If there is any exact evidence indicating that the book value cannot really reflect the current best estimate, the Company will adjust the book value in accordance with the current best estimate.
Dalian Refrigeration Co., Ltd. 2013 Annual Report 21. Revenue recognition
(1) The recognition of the revenue from selling goods: the revenue from selling shall be recognized by the following conditions: The significant risks and rewards of ownership of the goods have been transferred to the buyer by the Company; the Company retains neither continuous management right that usually keeps relation with the ownership nor effective control over the sold goods; the relevant amount of revenue can be measured in a reliable way; the relevant revenue and costs of selling goods can be measured in a reliable way.
(2) Giving of asset using rights: Income from giving of assets is recognized when satisfying requirements: related economic benefit flows in very possibly, income can be measured reliably.
1) Amount of interest income is calculated according to the time and actual interest rate of the monetary capital is used by other party. 2) Income of using fee is calculated upon the charge period and calculation provided by the related contract or agreement. (3)Construction contracts
When the result of the construction contract is able to be evaluated reliably at the balance sheet date, the income and cost of the contract are recognized on completion percentage basis.
If the result of the construction contract is not able to be evaluated reliably, but the contract cost maybe recovered, the income is recognized at the cost actually recovered, and the cost of the contract is recognized as contract expenses of the current period when it is occurred.
1) Contract progress is recognized at the ratio of accumulative actual cost on the predicted complete cost.
2) In case the expected total cost is greater than the total income, the expected loss will be recognized as expense of the current period. If the construction is in process, the balance is accounted as inventory impairment provision; if the contract is not executed, the balance is accounted as expected liability.
22. Calculation method of government grants
The government grants related to the proceeds, if those used for compensating the relevant future expenses or losses of the enterprise shall be recognized as deferred income and shall, during the period when the relevant expenses are recognized, recorded in the current profits and losses; or if those used for compensating the relevant expenses or losses that have been incurred to the enterprise shall be directly recorded in the current profits and losses.
The government grants related to the assets shall be recognized as deferred income and shall be distributed averagely in the related asset using period, then counted into current loss and interest. However, government subsidiary according to nominated amount shall be counted into current loss and interest directly.
23. Income tax
Where there is difference (temporary difference) between the carrying amounts of the assets or liabilities and its tax base, the deferred income tax assets or the deferred income tax liabilities shall be determined. According to tax law, the deductible loss and tax deduction which can deduct the taxable amount in the subsequent years, regarding as temporary difference, shall be recognized as the corresponding deferred income tax assets. As for the temporary difference arising from the initial recognition of the goodwill, the corresponding deferred income tax liabilities. When the temporary difference is arisen from the initial recognition of the assets or liabilities incurring in the transaction which is not business combination and does not affect the accounting profits or the taxable amount (or the deductible loss), the corresponding deferred income tax assets and deferred income tax liabilities shall not recognized. On the balance sheet date, the deferred income tax assets and deferred income tax liabilities shall be measured at the tax rate applicable to the period during which the assets are expected to be recovered or the liabilities are expected to be settled. The
Dalian Refrigeration Co., Ltd. 2013 Annual Report Company shall recognize the deferred income tax assets to the extent of the amount of the taxable income which it is likely to obtain and which can be deducted from the deductible temporary difference, deductible loss and tax deduction.
The deferred income tax liabilities arising from the temporary differences related to the investments of subsidiary companies, associated enterprises and joint enterprises shall be recognized. However, the deferred tax income assets and deferred income tax liabilities shall not recognized which meet the conditions that the Company can control the time of the reverse of temporary differences which are likely to be reversed in the expected future.
24. Earnings per share (EPS)
(1) Basic earnings per share= net profit attributable to common shareholders or net profit attributable to common shareholders after deducting extraordinary items÷ outstanding weighted average of ordinary shares
(2) Diluted earnings pershare= net profit attributable to common shareholders or net profit attributable to common shareholders after deducting extraordinary items÷ outstanding weighted average of ordinary shares after adjusted
(3) If the outstanding or potential common shareholders change during the report period but do not affect the total amount of shareholders equity, the earnings per share should be recalculated.
If the above changes happened during the date of balance sheet and the date of financial statements approval, the earnings per share of the report period should be recalculated.
25. Changes in accounting policies and estimates
(1) There is no change in accounting policies during the financial year.
(2) There is no change in accounting estimate during the financial year.
26. Correction of the accounting errors from previous term
There is no correction of the accounting error from previous term in this report period.
Ⅲ. Taxation
1. Value added tax (“VAT”)
The Group is subject to VAT, which is a tax charged on top of the selling price at a general rate of17% or13% or6% depending on different kinds of products. An input credit is available whereby VAT previously paid on purchases of raw materials and
semi-finished products can be used to offset the VAT on sales to determine the net VAT payable.
2. The business tax rate is5% or3% of revenue.
3. Urban maintenance and construction tax is7% of turnover tax payable.
4. Education surtax is3% of turnover tax payable.
5. Local education surtax is2% of turnover tax payable.
6. Income tax
(1)Income tax shall be measured at25% in total.
Dalian Refrigeration Co., Ltd. 2013 Annual Report (2)Income tax of subsidiaries and associates
Taxation on profit of subsidiaries and associates is calculated at the applicable rates in accordance with the relevant tax regulations. Certain subsidiaries and associates enjoy preferential income tax policies with approvals from tax authorities. The applicable income tax rates of major subsidiaries and associates for 2012 are as follows:
Relationship with
Names of the entities
the Company
Applicable income tax rate in 2012 Dalian Bingshan Group Refrigeration Installation Co., Ltd. Subsidiary 25% Dalian Bingshan Air-Conditioning Equipment Co. Ltd. Subsidiary 25% Dalian Bingshan Ryosetsu Quick Freezing Equipment Co., Ltd. Subsidiary 25% Dalian Bingshan Group Sales Co., Ltd. Subsidiary 25% Dalian Bingshan Metal Processing Co. Ltd. Subsidiary 25% Dalian Bingshan Guardian Automation Co., Ltd. Subsidiary 15% Wuhan New World Refrigeration Industrial Co., Ltd. “(WNWRI”) Subsidiary 15%Ⅳ. Business combination and consolidated financial statements
1. The principal activities of its subsidiaries are shown as below.
As of 31 December 2013 the Company had direct equity interests in the following subsidiaries, all of which were incorporated in the PRC.
In the table below column‘A’ represents‘Other essentialinvestment’, column‘B’ represents‘Amount of minority interest in income statement deducted from minorityinterest’, and column‘C’ represents‘Balance after deduction of losses of subsidiaries during the period exceeding the proportion of minority shareholders from equity of parentcompan’y.
Subsidiaries acquired by establishment or investment
Shareh
Catego Registere Business Voting Minority No. Names Registered capital Business scope Investment A olding Consolidated B C ries d address nature righ（t%） interest（%）
Dalian Bingshan Group Installation and
Refrigeration Installation testing of
1 Ltd. Dalian Installation RMB20,040,000 RMB20,040,000 100 100 Yes
Co., Ltd. (“Installation refrigeration
Company”) equipment
Dalian Refrigeration Co., Ltd. 2013 Annual Report Dalian Bingshan Group Sale of
2 Sales Co., Ltd. (“Sales Ltd. Dalian Trading RMB18,000,000 refrigeration RMB16,200,000 90 90 Yes 4,415,064.83 Company”) equipment
Dalian Bingshan Manufacture and
Air-Conditioning sale of
3 Equipment Co., Ltd. Ltd. Dalian Manufacturing JPY700,000,000 accessories of JPY490,000,000 70 70 Yes 20,495,414.43 (“Bingshan refrigeration
Air-Conditioning”) equipment
Dalian Bingshan Metal Process and sale
4 Processing Co., Ltd. Ltd. Dalian Manufacturing USD2,350,000 of metal USD1,509,875 64.25 64.25 Yes 8,896,463.20 (“Metal Processing”) punching parts
Dalian Bingshan Research, design
Guardian Automation and develop
5 Ltd. Dalian Manufacturing GBP210,000 GBP126,000 60 60 Yes 3,852,523.60 Co., Ltd. refrigerator
automation parts
Manufacture and
Dalian Bingshan
sale of
6 Ryosetsu Quick Freezing Ltd. Dalian Manufacturing USD1,000,000 USD700,000 70 70 Yes 2,026,405.05 941,755.95 deep-freezing
Equipment Co., Ltd.
equipment
Design,
manufacture,
sale, installation
Wuhan New World
and test of screw
7 Refrigeration Industrial Ltd. Wuhan Manufacturing RMB100,000,000 RMB17,980,400 51 51 Yes 62,403,726.28 type refrigeration
Co., Ltd. (“WNWRI”)
compressor and
refrigeration
equipment
Dalian Refrigeration Co., Ltd. 2013 Annual Report 2. The principal activities of itssubsidiaries’ subsidiaries are shown as below.
In the table below column‘A’ represents‘Other essentialinvestment’, column‘B’ represents‘Amount of minority interest in income statement deducted from minorityinterest’, and column‘C’ represents‘Balance after deduction of losses ofsubsidiaries’ subsidiaries during the period exceeding the proportion of minority shareholders from equity of parentcompan’y.
Subsidiaries’ subsidiaries acquired by establishment or investment
Shareh
Catego Registere Business Registered Voting Minority No. Names Business scope Investment A olding Consolidated B C ries d address nature capital righ（t%） interest（%）
Wuhan New World Design, installation,
Refrigeration Air test and repair of
1 Ltd. Wuhan Installation RMB8,000,000 RMB400,000 5 100 Yes
Conditioner Engineering refrigeration
Co., Ltd. equipment
Ningbo Bingshan Installation and
Refrigeration Air repair of
2 Ltd. Ningbo Installation RMB3,000,000 RMB1,530,000 51 Yes 2,170,686.76 Conditioner Engineering refrigeration
Co., Ltd. equipment
Ⅴ. Notes to the consolidated financial statements
1 Monetary fund
Items 31-12-2013 31-12-2012
Cash on hand 99,455.92 195,378.55 Cash in bank 493,056,269.04 523,052,983.91 Other monetary fund
19,747,988.17 8,648,292.62 Total 512,903,713.13 531,896,655.08 Particular about foreign monetary funds included in the cash in bank:
Foreign 31-12-2013 31-12-2012
currency
Original currency Exchange rate RMB equivalent Original currency Exchange rate RMB equivalent USD 13,828.25 6.0969 81,017.14 4,064.02 6.2855 25,544.40
Dalian Refrigeration Co., Ltd. 2013 Annual Report JPY 1,039,091.00 0.057771 60,029.33 368,460.00 0.073049 26,915.63 EUR 5.60 8.4189 47.15 5.60 8.3176 46.58 GBP 27,396.57 10.0556 275,488.95 71,217.64 10.1611 723,649.57 Total 416,582.57 776,156.18 As at 31 December, 2013, Dalian Bingshan Ryosetsu Quick Freezing Equipment Co., Ltd. the subsidiary ’s cash in bank RMB1,000,000.00 is frozen by bank, and except that there is no pledged, frozen or withdrawn with potential risk amoun t. The restrained amount of monetary fund is shown as below.
Items 31-12-2013 31-12-2012
deposit for bank acceptances and letters of guarantee 9,564,552.78 6,077,919.62 Cash in bank 1,000,000.00
Total 10,564,552.78 6,077,919.62 2 Notes receivable
Items 31-12-2013 31-12-2012
Bank acceptance 30,403,946.87 30,613,298.36 Trade acceptance 9,423,084.90 11,353,246.61 Total 39,827,031.77 41,966,544.97 (1) There is no pledged notes receivable at the end of the current year.
(2) The top five notes receivable endorsed but not matured at the end of the current year.
No. Companies Issued date Expiration date Amount Notes 1 Dalian Bingshan Engineering&Trading Co., Ltd.
2013.12.31 2014.03.20 3,913,969.50 Trade acceptance 2 Shanxi Huaxin Coal Tar Industrial Group Co., Ltd.
2013.11.04 2014.04.29 3,830,000.00 bank acceptance 3 Chengde magnetic source mining Refco Group Ltd
2013.08.06 2014.02.06 3,500,000.00 bank acceptance 4
Dalian Bingshan Engineering&Trading Co. ,Ltd. 2013.10.31 2014.01.20 3,213,099.03 Trade acceptance 5
Huarun Snow Beer (Sichuan) Co. ,Ltd. 2013.10.23 2014.01.23 2,378,061.70 bank acceptance Total 16,835,130.23
(3) The amount of notes receivable due from related companies are RMB10,616,978.36,26.66% of total notes receivable. Please refer to theⅥ 7 of the notes.
Dalian Refrigeration Co., Ltd. 2013 Annual Report 3 Dividends receivable
Current year Current year
Items 31-12-2012 31-12-2013 Reasons Any impairment addition disposal
Dividends receivable, aging within 1
year
Included: Wuhan Steel and Electricity
39,025.00 33,450.00 39,025.00 33,450.00 Not due to pay No Co., Ltd.
Total 39,025.00 33,450.00 39,025.00 33,450.00
4 Interest receivable
Current year Current year
Items 31-12-2012 31-12-2013 addition disposal
Interest receivable, aging within 1 year
Included: interest on fixed-term deposits 277,444.44 8,198,470.04 4,872,319.63 3,603,594.85 Total
277,444.44 8,198,470.04 4,872,319.63 3,603,594.85 5 Accounts receivable
(1) Classified by accounts nature
31-12-2013 31-12-2012
Balance Provision for doubtful debt Balance Provision for doubtful debt Categories
Proportion Proportion Proportion Proportion Amount Amount Amount Amount
(%) (%) (%) (%) Major single amount
and bad debt provision
provided individually
Bad debt provided on
468,499,323.02 100 98,786,576.32 21 446,228,134.01 100 93,966,407.27 21 group basis
Minor single amount
but bad debt provision
provided individually
Total 468,499,323.02 100 98,786,576.32 21 446,228,134.01 100 93,966,407.27 21
Dalian Refrigeration Co., Ltd. 2013 Annual Report Accounts receivable which bad debt provisions are provided on age basis in the group
31-12-2013 31-12-2012
Account ages
Amount Proportion(%) Provision for bad debts Amount Proportion(%) Provision for bad debts Within 1 year
243,385,821.76 51.95 12,169,291.10 223,325,287.48 50.04 11,166,264.37 1 to 2 years
98,061,850.41 20.93 9,806,185.04 100,612,947.55 22.55 10,061,294.76 2 to 3 years
50,264,089.07 10.73 15,079,226.72 37,441,392.94 8.39 11,232,417.89 3 to 4 years
19,255,750.93 4.11 9,627,875.48 38,041,244.40 8.53 19,020,622.21 4 to 5 years
27,139,064.37 5.79 21,711,251.50 21,607,268.00 4.84 17,285,814.40 Over 5 years
30,392,746.48 6.49 30,392,746.48 25,199,993.64 5.65 25,199,993.64 Total 468,499,323.02 100 98,786,576.32 446,228,134.01 100 93,966,407.27 (2) There is no major single amount and bad debt provision provided individually.
(3) Receivable accounts written off before but received during the current yea r
Companies Received reason Reasons of neutralization Provision for bad debt Received amount Tianshan Animal
Bankruptcy liquidation
Husbandry Yili Co. Bankruptcy
472,000.00 330,088.72 property returned
Ltd.
Take over control of liquidation
Shandong Sanyuan
of Sanlu Group (Shandong) Bankruptcy 134,847.00 134,847.00 Dairy Co., Ltd.
Dairy Co., Ltd.
Lingchuan County
Bankruptcy liquidation
Nitrogenous Bankruptcy
40,590.17 40,590.17 property by auction
Fertilizer Plant
Changzhou Pangu The client refused to pay for
Clients paid 16,250.00 16,250.00 Chemicals Co., Ltd. additional expenses of install cite.
Total 663,687.17 521,775.89 (4) There is no amount of accounts receivable received by debts re-construction during the reporting period.
(5)The write-off of accounts receivable during the reporting period
Written off Occurred under
Name of companies The nature of accounts receivable Reasons
amount related relationship? 64 Clients Sale of goods
4,427,800.84
① No
①The reasons of accounts receivable write-off include termination of operation and disability of payment, winning lawsuits but not finding executable assets, small balance not being collected for long time, and disagreement rework charges etc.
(6) No arrearage from the shareholders holding over5% (including5%) of the equity of the Company existed in the balance of accounts receivable.
(7) Accounts receivable top 5 on amount
Dalian Refrigeration Co., Ltd. 2013 Annual Report Companies The relationship with the Company Amount Ages Proportion(%) FAW Jiefang Automotive Co., Ltd. Non-affiliated
16,482,359.00 Less than 1 year 3.52 Less than 1
COFCOMeat（Suqian）Co., Ltd. Non-affiliated
12,449,913.80 2.66 year ,1-2years,2-3years
Dalian Xinghai Bay Development and
Non-affiliated
11,242,693.00 4-5years 2.40 Construction Management Centre
Yankuang Xinlu Construction Development
Non-affiliated
8,059,249.00 1-2years 1.72 Co. Ltd.
The People's Liberation Army 63820
Non-affiliated 6,805,353.28 Less than 1 year 1.45 Troops
(8) The amount of accounts receivable due from related companies are RMB9,680,137.52,2.07% of total accounts receivable. Please refer to theⅥ 7 of the notes.
(9) There is no accounts receivable being ended recognition or being negotiated during the reporting period.
6 Other accounts receivable
(1) Classified by account nature
31-12-2013 31-12-2012
Balance Provision for doubtful debt Balance Provision for doubtful debt Items
Proportion Proportion Proportion Proportion Amount Amount Amount Amount
(%) (%) (%) (%) Major single amount and bad debt
provision provided individually
Bad debt provided on group basis 31,792,976.68 100 7,278,236.61 22.89 24,977,648.93 100 6,013,679.40 24.08 Minor single amount but bad debt
provision provided individually
Total 31,792,976.68 100 7,278,236.61 22.89 24,977,648.93 100 6,013,679.40 24.08 Other accounts receivable which bad debt provisions are provided on age basis in the group
31-12-2013 31-12-2012
Account ages
Provision for bad
Amount Proportion(%) Amount Proportion(%) Provision for bad debts debts
Within 1year
18,000,224.64 56.62 900,011.22 12,246,892.71 49.03 612,344.64 1 to 2 years
4,431,452.84 13.94 443,145.28 4,353,037.24 17.43 435,303.72 2 to 3 years
2,834,825.78 8.92 850,447.74 2,954,024.32 11.83 886,207.29 3 to 4 years
2,032,201.80 6.39 1,016,100.91 2,667,843.77 10.68 1,333,921.89
Dalian Refrigeration Co., Ltd. 2013 Annual Report 4 to 5 years
2,128,700.82 6.70 1,702,960.66 49,745.16 0.20 39,796.13 Over 5 years
2,365,570.80 7.43 2,365,570.80 2,706,105.73 10.83 2,706,105.73 Total 31,792,976.68 100 7,278,236.61 24,977,648.93 100 6,013,679.40 (2) There is no major single amount and bad debt provision provided individually.
(3) There is no amount of provision for bad debts written back during the reporting period.
(4) During the reporting period, there is no other account write-off.
(5) There is no balance of other accounts receivable due from the shareholders holding over5% (including5%) of the equity of the Company.
(6) Other accounts receivable top 5 on amount
The relationship with the
Companies Amount Age Proportion Company
Dalian city land reserve center Non-affiliated 10,000,000.00 Less than 1 year 31.45 Baicheng Longdan Dairy Industry Co., Ltd. Non-affiliated 1,004,519.00 1-2years 3.16 Tianjin Construction Team Communication Service
Non-affiliated 1,000,000.00 4-5years 3.15 Center
Wuhan Jin Qun refrigeration equipment installation
Non-affiliated 736,110.00 1-2years 2.32 Co. Ltd.
Hebei Jinwei new type building materials Co., Ltd.
Non-affiliated 653,800.00 2-3years 2.06 Hubei branch
Total 13,394,429.00
42.14 (7) No other important creditors of accounts receivable on amount.
(8) There is no other accounts receivable due from related companies.
(9) There is no other accounts receivable being ended recognition or being negotiated during the reporting period.
7 Accounts paid in advance
(1) The aging of prepayment
31-12-2013 31-12-2012
Account ages
Amount Proportion(%) Amount Proportion(%) Within 1 year 24,786,019.32 95.21 28,244,256.51 90.38 1 to 2 years 64,112.00 0.25 2,736,226.73 8.76 2 to 3 years 1,178,768.00 4.53 241,520.26 0.77 3 to 4 years 2,487.00 0.01 27,973.00 0.09 Total 26,031,386.32 100 31,249,976.50 100 (2) Prepayment top 5 on amount
Dalian Refrigeration Co., Ltd. 2013 Annual Report The relationship with the
Companies Amount Ages Reasons Company
Dalian Tianyi InfoTech Co., Ltd. Non-affiliated 2,499,000.00 Less than 1 year
Prepayment for goods Daikin (Chinese) Investment Co., Ltd.
Non-affiliated 1,674,146.60 Less than 1 year
Prepayment for goods Shanghai Branch
Wuhan Delixin Economic and Trade
Non-affiliated 1,417,730.60 Less than 1 year
Prepayment for goods Development Co., Ltd.
Dalian Mingxin Refrigeration Insulation
Non-affiliated 1,084,949.15 Less than 1 year
Prepayment for goods Materials Co., Ltd.
British Holroyd Precision Components Co.
Non-affiliated 1,064,702.11 Less than 1 year
Prepayment for goods Ltd.
Total 7,740,528.46
(3) No arrearage from the shareholders holding over5% (including5%) of the equity of the Company existed in the balance of prepayment.
(4) The amount of prepayment due from related companies is RMB26,129.05,0.10% of total prepayment. Please refer to theⅥ 7 of the notes.
8 Inventories
(1) Cost
31-12-2013 31-12-2012
Provision for Provision for
Items
Book balance impairment of Book value Book balance impairment of Book value
inventories inventories
Raw materials
47,474,131.66 8,311,074.35 39,163,057.31 62,256,263.09 9,392,188.03 52,864,075.06 Materials on consignment for
8,211,392.69 8,211,392.69 8,109,762.06 8,109,762.06 further processing
Low-value consumptions 128,405.67 128,405.67 142,475.24 142,475.24 Work-in-progress
91,806,242.88 2,148,729.50 89,657,513.38 93,976,830.71 93,976,830.71 Self-manufactured
33,279,512.91 4,024,041.73 29,255,471.18 29,285,449.92 29,285,449.92 semi-finished products
Finished goods
135,195,482.98 3,291,858.85 131,903,624.13 156,633,159.08 2,167,851.55 154,465,307.53 Constructing projects 27,211,543.05 27,211,543.05 60,051,195.31 60,051,195.31 Total
343,306,711.84 17,775,704.43 325,531,007.41 410,455,135.41 11,560,039.58 398,895,095.83
Dalian Refrigeration Co., Ltd. 2013 Annual Report (2) Provision for impairment of inventories
Current year Current year disposal
Item 31-12-2012 31-12-2013 addition
Reversal Written-off
Finished goods 2,167,851.55 2,034,682.08
910,674.78 3,291,858.85 Raw materials 9,392,188.03 383,609.35
1,464,723.03 8,311,074.35 Work-in-progress 2,148,729.50 2,148,729.50 Self-manufactured
4,024,041.73 4,024,041.73 semi-finished products
Total 11,560,039.58 8,591,062.66
2,375,397.81 17,775,704.43 (3) Details of provision for impairment of inventories
The bases of provision for impairment of Proportion of reversal of provision for Item
Reasons for reversal
inventories impairment of its closing balance The book balance is higher than recoverable
Finished goods
amount.
The book balance is higher than recoverable
Raw materials
amount.
The book balance is higher than recoverable
Work-in-progress
amount.
Self-manufactured The book balance is higher than recoverable
semi-finished products
amount.
9 Other current assets
Item 31-12-2013 31-12-2012
Enterprise income tax prepaid
73,111.98 6,026,385.86 Deferred expenses
922,487.82
Total 995,599.80 6,026,385.86
Dalian Refrigeration Co., Ltd. 2013 Annual Report 10 Investment to Associates and Joint ventures
Registe 31-12-2013
Legal represent Registered Shareh 31-12-2013 31-12-2013 Total Income of Net profit of No. Name Categories red Business nature Voting right Total net
person capital olding Total assets Total liabilities 2013 2013 address assets
ⅠJoint venture
Dalian Bingshan–
P&A Recreation Sino-foreign joint
1 Dalian Yang Bin Installation USD250,000 50% 50% 13,684,354.52 6,681,585.76 7,002,768.76 22,867,641.63 544,620.00 Development venture
Engineering Co., Ltd.
Ⅱ Associates
Dalian Bingshan
RMB
1 Engineering&Trading Ltd Dalian Xiao Yongqin Trading 24% 24% 97,882,389.44 43,140,385.61 54,742,003.83 177,866,049.16 5,498,969.16 30,000,000
Co.,Ltd.
Dalian Sanyo Sino-foreign joint Watanabe JPY
2 Dalian Manufacturing 40% 40% 666,091,886.83 286,873,580.97 379,218,305.86 921,803,820.66 12,503,320.35 Refrigeration Co., Ltd. venture Yoshio 3,450,000,000
Dalian Honjo Chemical Sino-foreign joint JPY
3 Dalian Honjo Yukinovi Manufacturing 30% 30% 35,135,976.43 3,359,656.86 31,776,319.57 35,518,230.64 4,440,146.82 Co., Ltd. venture 260,000,000
Dalian Sanyo Sino-foreign joint JPY
4 Dalian Hishitani Kiyoshi Manufacturing 40% 40% 1,230,413,387.87 700,698,827.30 529,714,560.57 1,693,773,283.13 19,201,471.20 Cold-chain Co., Ltd venture 4,650,000,000
Keinin-Grand Ocean
Sino-foreign joint TAKASAKI USD
5 Thermal Technology Dalian Manufacturing 20% 20% 297,731,401.39 95,714,257.59 202,017,143.80 557,872,328.90 49,190,947.83 venture KANJI 15,117,890
(Dalian) Co., Ltd.
Dalian Sanyo Sino-foreign joint Watanabe JPY
6 Dalian Manufacturing 40% 40% 1,871,151,984.03 894,114,009.71 977,037,974.32 2,422,381,452.08 166,670,596.53 Compressor Co., Ltd. venture Yoshio 6,200,000,000
Dalian Sanyo Meica Sino-foreign joint JPY
7 Dalian Zhang He Manufacturing 30% 30% 101,282,336.09 23,371,025.56 77,911,310.53 164,524,271.76 -5,911,089.18 Electronics Co., Ltd. venture 400,000,000
Beijing Huashang
Bingshan Refrigeration Sino-foreign joint RMB
8 Beijing Yang Bin Trading 49% 49%
13,279,915.21 10,723,740.25 2,556,174.96 32,185,214.35 552,137.36 and Air-conditioning venture 1,000,000
Machinery Co., Ltd.
Dalian Fuji Bingshan
Sino-foreign joint JPY
9 Vending Machine Co., Dalian Asahi Hideehiko Manufacturing 49% 49%
232,093,346.52 74,422,603.94 157,670,742.58 263,339,407.85 14,707,451.37 venture 1,800,000,000
Ltd.
Dalian Sanyo
High-Efficient Sino-foreign joint RMB
10 Dalian Wangjian Manufacturing 25% 25%
110,660,764.17 22,545,506.12 88,115,258.05 137,778,380.48 1,079,786.43 Refrigeration System venture 80,000,000
Co., Ltd.
Dalian Refrigeration Co., Ltd. 2013 Annual Report MHI Bingshan
Sino-foreign joint RMB
11 Refrigeration (Dalian) Dalian Xiao Yongqin Manufacturing 45% 45%
50,000,000.00 50,000,000.00
venture
Co.,Ltd. 80,000,000
11 Long-term equity investments
Provision for Cash dividend Calculation Beginning Sharehold Provision for
No. Name Initial cost Changes Ending balance Voting right impairment of the of the current method balance ing impairment
current period period Dalian Bingshan–P&A
Equity
1
Recreation Development
1,034,675.00 3,229,074.38 245,079.00 3,474,153.38 50 50
method
Engineering Co., Ltd.
Dalian Jiale Vending Machine Equity
2 18,750,000.00 14,668,101.42 -334,917.83 14,333,183.59 50 50
Operation Co., Ltd. method
Dalian Bingshan Engineering Equity
3 1,200,000.00 12,435,737.30 702,343.62 13,138,080.92 24 24 6,000,000.00&Trading Co.,Ltd. method
Dalian Grand Ocean Thermo
Equity
4
King Transport Refrigeration
2,871,708.00 2,154,532.01 -2,154,532.01 40 40
method
Engineering Co., Ltd
Dalian Sanyo Refrigeration Co., Equity
5 85,416,929.20 151,488,491.18 -551,368.05 150,937,123.13 40 40 4,800,000.00 Ltd. method
Dalian Honjo Chemical Co., Equity
6 3,908,911.50 9,398,455.84 54,517.38 9,452,973.22 30 30 1,197,604.02 Ltd. method
Dalian Sanyo Cold-chain Co., Equity
7 134,658,753.75 216,645,866.64 -933,858.60 215,712,008.04 40 40 8,000,000.00 Ltd method
Keinin-Grand Ocean Thermal Equity
8 24,402,234.58 41,365,239.20 -961,810.43 40,403,428.77 20 20 10,800,000.00 Technology (Dalian) Co., Ltd. method
Dalian Sanyo Compressor Co., Equity
9 176,953,841.88 348,546,951.11 36,934,779.52 385,481,730.63 40 40 24,400,000.00 Ltd. method
Dalian Sanyo Meica Equity
10 9,649,590.00 27,308,958.46 -3,935,565.30 23,373,393.16 30 30 1,500,000.00 Electronics Co., Ltd. method
Dalian Refrigeration Co., Ltd. 2013 Annual Report Provision for Cash dividend Calculation Beginning Sharehold Provision for
No. Name Initial cost Changes Ending balance Voting right impairment of the of the current method balance ing impairment
current period period MHI Bingshan Refrigeration Equity
11 22,500,000.00 22,500,000.00 22,500,000.00 45 45
(Dalian) Co.,Ltd. method
Beijing Huashang Bingshan
Refrigeration and Equity
13 490,000.00 905,958.67 269,098.06 1,175,056.73 49 49
Air-conditioning Machinery Co., method
Ltd.
Dalian Fuji Bingshan Vending Equity
14 66,416,364.00 70,052,012.69 7,206,651.17 77,258,663.86 49 49
Machine Co., Ltd. method
Daliian Sanyo High-Efficient Equity
15 20,000,000.00 21,758,867.90 269,946.61 22,028,814.51 25 25
Refrigeration System Co., Ltd. method
Dalian Sanyo Home
12
Cost method
19,666,212.00 11,694,400.00 11,694,400.00 10.91 10.91 11,694,400.00
Appliance Co., Ltd.
Zibo Electric Traction Machine
16
Cost method
849,000.00 849,000.00 849,000.00 1.52 1.52 849,000.00
Group Co., Ltd.
17
Liaoning Mec Group Co., Ltd. Cost method
1,020,000.00 1,020,000.00 1,020,000.00 3.57 3.57 500,000.00 Guotai Junan Securities Co.,
18
Cost method
30,098,895.00 30,098,895.00 30,098,895.00 0.49 0.49 1,582,164.89
Ltd.
Guotai Junan Investment
19
Cost method
3,057,316.00 3,057,316.00 3,057,316.00 0.22 0.22 2,688,605.91
Management Co., Ltd.
Thermo King Container
20
Temperature Control (Suzhou) Cost method
11,207,806.00 11,207,806.00 11,207,806.00 17.8 17.8
Co., Ltd.
Liaoning Enterprises United
21
Cost method
105,000.00 105,000.00 105,000.00 4.2 4.2 105,000.00
Industry Company
22 Dalian Bingshan Group Cost method
250,000.00 250,000.00 250,000.00 5 5
Dalian Refrigeration Co., Ltd. 2013 Annual Report Provision for Cash dividend Calculation Beginning Sharehold Provision for
No. Name Initial cost Changes Ending balance Voting right impairment of the of the current method balance ing impairment
current period period Materials Trading Co., Ltd.
Wuhan Steel and Electricity
24
Cost method
1,315,142.50 1,315,142.50 1,315,142.50 0.056 0.056 33,450.00 Co., Ltd.
Total 635,822,379.41 979,555,806.30 59,310,363.14 1,038,866,169.44 16,919,170.80 57,231,054.02 (1) On 11th April, 2013, the 2nd meeting of the 6th Board of the Company decided to establish the join-venture MHI Bingshan Refrigeration (Dalian) Co., Ltd. with Japan Mitsubishi Heavy Industry Co., Ltd. The Company invested RMB 36,000,000.00 and held45% equity. The join-venture received the investment of both investors on 22nd November, 2013, and got the Capital Certification Report of Dalian Changde Gongzheng CPAs on 25th November, 2013.
(2) On 18th April, 2013, the 3rd meeting of the 6th Board of the Company agreed Dalian Bingshan Group Import& Export Co., Ltd. to increase capital with its retained earnings, and the registered capital increased from RMB 5,000,000.00 to RMB
30,000,000.00. After that, the shareholding ratio was constant. On the same time, Dalian Bingshan Group Import& Export Co., Ltd. changed the name to Dalian Bingshan International Trading Co. , Ltd.
(3) On 29th August, 2013, Dalian Grand Ocean Thermo King Transport Refrigeration Engineering Co., Ltd which the Company held40% equity terminated after having been approved to cancel the registration by DalianA dministration of Industry and Commerce.
(4) On 22nd October, 2013, the 6th meeting of the 6th Board of the Company permitted the Company and Fuji Electricity Co., Ltd. transferring all the equity of Dalian Jiale Vending Machine Operation Co., Ltd. to the independent third party Shanghai Miyuan Beverage Co., Ltd. respectively. At the end of current year, the transactiondidn’t complete, and the Company received the transfer price RMB15,000,000.00 in January of 2014.
12 Fixed assets
(1)Fixed assets details
Current year Current year
Items 31-12-2012 31-12-2013 addition disposal
1. Original value 929,871,205.65 30,193,356.73 46,103,473.54 913,961,088.84 Including: Buildings 320,730,626.52 7,131,233.20 2,940,817.52 324,921,042.20 Machinery
565,190,187.64 18,822,879.51 37,725,134.74 546,287,932.41 Vehicles 26,651,528.44 3,405,854.19 3,717,742.81 26,339,639.82 Other equipments 17,298,863.05 833,389.83 1,719,778.47 16,412,474.41 2. Accumulated depreciation 517,972,335.98 35,771,708.12 37,862,065.21 515,881,978.89 Including: Buildings 108,798,387.26 7,818,234.23 2,506,004.55 114,110,616.94 Machinery
380,337,233.39 25,085,223.17 30,512,027.90 374,910,428.66
Dalian Refrigeration Co., Ltd. 2013 Annual Report Vehicles 15,471,089.70 1,959,638.35 3,254,497.25 14,176,230.80 Other Equipments 13,365,625.63 908,612.37 1,589,535.51 12,684,702.49 3.Net book value 411,898,869.67 398,079,109.95 Including: Buildings 211,932,239.26 210,810,425.26 Machinery
184,852,954.25 171,377,503.75 Vehicles 11,180,438.74 12,163,409.02 Other Equipments 3,933,237.42 3,727,771.92 4.Provision for impairment 6,924,986.25 2,812,966.25 Including: Buildings
Machinery
6,924,986.25 2,812,966.25 Vehicles
Other Equipments
5.Fixed assets net 404,973,883.42 395,266,143.70 Including: Buildings 211,932,239.26 210,810,425.26 Machinery
177,927,968.00 168,564,537.50 Vehicles 11,180,438.74 12,163,409.02 Other Equipments 3,933,237.42 3,727,771.92 (2)All the accumulated depreciation increased during the current period was depreciation of the current period.
(3) The original value of fixed assets RMB19,054,863.28 transferred from construction in progress during 2013.
(4)There were no idle fixed assets during the current period.
(5) There were no leased fixed assets during the current period.
(6) Wuhan New World Refrigeration Industrial Co., Ltd. borrowed RMB37,500,000 from bank and mortgaged with its buildings and land-use-rights with total book value RMB136,039,261.45 which included book value of buildings RMB79,563,491.45.
(7) Fixed assets withoutowner’s certificates
Items Reasons Expected finished time
New foundry workshop and office building
Handling
Workshop of Dalian Bingshan Air-Conditioning
Less some documents
Equipment Co., Ltd.
Departments from debts reconstruction
Less some documents
Dalian Refrigeration Co., Ltd. 2013 Annual Report 13 Project in construction
Names of Decreased during Percentage of Increased during
Budget 31-12-2012 31-12-2013 Sources of funds
projects current year current year completion Internally
Buildings 72,420,254.37 5,442,698.22 66,977,556.15
generated funds
Internally
Machinery 1,304,951.56 13,792,480.43 13,612,165.06 1,485,266.93
generated funds
Total 1,304,951.56 86,212,734.80 19,054,863.28 68,462,823.08
(1) No interests capitalized during the current period.
(2) The amount of construction in progress RMB19,054,863.28 was transferred to fixed assets during the current period. 14 Intangible assets
(1) Intangible assets details
Decreased during
Increased during
Items 31-12-2012 31-12-2013
current year current year
1.Original cost
Land-use-rights
186,624,687.38 10,120,288.85 176,504,398.53
Non-patented technology 515,224.41 515,224.41
Others 6,473,020.63 499,080.88 6,972,101.51
Total 193,612,932.42 499,080.88 10,120,288.85 183,991,724.45
2.Amortization
Land use rights
24,893,168.33 3,681,891.88 3,238,492.02 25,336,568.19
Non-patented technology 515,224.41 515,224.41
Others 2,410,498.53 539,202.81 2,949,701.34
Total 27,818,891.27 4,221,094.69 3,238,492.02 28,801,493.94
3. .Net book value
Land-use-rights
161,731,519.05
151,167,830.34
Non-patented technology
Others 4,062,522.10 4,022,400.17
Total 165,794,041.15 155,190,230.51
4.Provision for the
impairment
Land-use-rights
Non-patented technology
Others
Dalian Refrigeration Co., Ltd. 2013 Annual Report Decreased during
Increased during
Items 31-12-2012 31-12-2013
current year current year
Total
5. .Net value
Land-use-rights
161,731,519.05 151,167,830.34
Non-patented technology
Others 4,062,522.10 4,022,400.17
Total 165,794,041.15 155,190,230.51
(2) The intangible assets amortized RMB4,221,094.69 during the current year.
(3) Please refer to theⅤ18 of the notes for land-use-rights mortgaged.
15 Long-term deferred expenses
Items Increased during Amortize during
31-12-2012 Others 31-12-2013 current year current year
Employee’s dormitory use right 2,981,518.62 138,478.32 2,843,040.30 Renovation and rebuilding 1,105,696.84 178,689.38 927,007.46 Inspection services 145,521.99 13,820.04 131,701.95 Total 2,981,518.62 1,251,218.83 330,987.74 3,901,749.71 16 Deferred tax assets/Deferred tax liabilities
(1) Confirmed Deferred tax assets
Items 31-12-2013 31-12-2012
Deferred tax assets
Provision for bad debts 14,350,578.95 13,301,546.04 Provision for obsolete inventory 4,415,198.69 2,890,009.89 Impairment provision of fixed assets 703,241.56 1,731,246.56 Total 19,469,019.20 17,922,802.49 (2) Unconfirmed Deferred tax assets
Items 31-12-2013 31-12-2012 Provision for impairment 16,919,170.80 16,919,170.80 Provision for bad debts 39,739,180.37 39,710,078.58 Total 56,658,351.17 56,629,249.38
Dalian Refrigeration Co., Ltd. 2013 Annual Report (3)Temporary differences
Items 31-12-2013
Provision for impairment 86,914,303.24 Total 86,914,303.24 17 Provision for impairment
Decreased during current year
Increased during
Items 31-12-2012 31-12-2013 current year
Reversal Written off
Bad debts provision 99,980,086.67 10,512,527.10 4,427,800.84 106,064,812.93 Provision for obsolete inventories 11,560,039.58 8,591,062.66 2,375,397.81 17,775,704.43 Provision for the impairment of long-term equity
16,919,170.80 16,919,170.80 investments
Provision for the impairment of fixed assets 6,924,986.25 4,112,020.00 2,812,966.25 Total 135,384,283.30 19,103,589.76 10,915,218.65 143,572,654.41 18 Short-term loans
Terms of loans 31-12-2013 31-12-2012
Credit loan
Mortgage loan 37,500,000.00 29,500,000.00 Total 37,500,000.00 29,500,000.00 (1) Wuhan New World Refrigeration Industrial Co., Ltd. borrowed short-term loan RMB37,500,000 from bank and mortgaged with its buildings and land-use-rights.
(2)There was no short-term loan due to pay at the end of year 2013 .
19 Notes payable
Items 31-12-2013 31-12-2012
Bank acceptance notes 47,070,444.13 75,452,028.38
Trade acceptance notes 33,223,071.04 3,675,095.82
Total 80,293,515.17 79,127,124.20
(1)The amount of notes payable RMB80,293,515.17 will due to pay during year 2013.
(2)The amount of notes payable due to related companies is RMB13,071,412.17,16.28% of total accounts payable. Please refer to theⅥ 7 of the notes.
Dalian Refrigeration Co., Ltd. 2013 Annual Report 20Accounts payable
Ages 31-12-2013 31-12-2012
Within 1 year 413,250,580.87 397,641,695.13
1 to 2 years 25,101,084.59 20,899,378.69
2 to 3 years 10,862,165.41 11,693,523.33
3 to 4 years 10,007,609.12 1,415,896.19
4 to 5 years 1,145,059.67 690,783.07
Over 5 years 4,496,765.35 4,379,062.79
Total 464,863,265.01 436,720,339.20
(1) No amount due to the shareholders holding over5% (including5%) of the equity of the Company existed in the balance of accounts payable at the end of the current year.
(2) The amount of accounts payable due to related companies is RMB22,466,425.76, 4.83% of total accounts payable. Please refer to theⅥ 7 of the notes.
(3) There was no big amount among the accounts payable aged more than 1 year.
21 Accounts received in advance
Ages 31-12-2013 31-12-2012
Within1 year 147,136,295.71 207,173,680.69
1 to 2 years 16,796,570.29 48,059,518.74
2 to 3 years 5,369,183.13 8,520,448.19
3 to 4 years 4,955,873.83 23,137,733.83
4 to 5 years 1,815,734.25 1,038,356.88
Over 5 years 1,164,731.78 111,374.90
Total 177,238,388.99 288,041,113.23
(1)There were no accounts due to the shareholders holding over5% (including5%) of the equity of the Company existed in the balance of accounts received in advance at the end of the current year.
(2) The amount of accounts received in advance due to related companies is RMB4,215,236.76,2.38% of total accounts received in advance. Please refer to theⅥ 7 of the notes.
(3)Most of the amount of accounts received in advance aged more than one year was unsettled contract payments on serial refrigeration equipments.
Dalian Refrigeration Co., Ltd. 2013 Annual Report 22Employees’ compensation payable
Decreased during
Items Increased during
31-12-2012 31-12-2013
current year current year
1.Wages and salaries, bonuses, allowances and
36,136,166.83 175,928,791.65 187,792,546.91 24,272,411.57
subsidies
2.Staff welfare 22,485,421.91 10,543,993.84 8,316,553.38 24,712,862.37
3.Social insurance
2,026,248.32 45,556,058.10 45,942,439.67 1,639,866.75
Including：①Medical insurance
83,383.81 10,306,235.64 10,389,619.45
②Retirement pension
208,241.44 25,413,647.13 25,621,888.57
③Unemployment insurance
138,073.65 2,538,014.52 2,676,088.17
④injury insurance premium
13,533.71 1,095,672.73 1,109,206.44
⑤Pregnancy insurance
8,328.46 769,097.78 777,426.24
⑥Housing subsidies
1,574,687.25 1,639,866.75 1,574,687.25 1,639,866.75
⑦Heating fees
3,793,523.55 3,793,523.55
4. Housing funds
1,968,300.54 16,049,555.24 15,973,002.36 2,044,853.42
5.Labor union fee and employee education fee
1,768,613.37 3,387,226.00 4,245,802.46
6.Non-currency welfare
778,631.44 778,631.44
7. Redemption for terminations of labor contract
191,844.72 191,844.72
8.Others
Total 64,384,750.97 252,436,100.99 263,240,820.94 53,580,031.02
(1) There was no amount delay paid at the end of the current year.
(2) The labor union fee and employee education fee occurred RMB3,387,226.00, and the non-currency welfare occurred RMB778,631.44, and the redemption for terminations of labor contract occurred RMB191,844.72 during the current year. (3) The ending balance amount of staff welfare was that the subsidiaries took out according to their board meeting resolutions, which including Dalian Bingshan Air-Conditioning Equipment Co. Ltd., and Dalian Bingshan Metal Processing Co., Ltd., and Dalian Bingshan Guardian Automation Co., Ltd. and Wuhan New World Refrigeration Industrial Co., Ltd.
23 Taxes payable
Items 31-12-2013 31-12-2012
Value-added tax 2,725,964.48 -5,138,920.13 Business tax 1,890,363.25 1,335,280.85 City maintenance and construction tax 531,714.02 198,984.65 Enterprise income tax 14,915,676.15 3,269,786.14
Dalian Refrigeration Co., Ltd. 2013 Annual Report Individual income tax 717,852.43 382,023.46 Stamp duty 44,629.25 33,096.69 Extra-charges for education 285,986.48 110,893.05 Water project fund/River route maintenance fee 547,873.15 427,516.11 Safeguard fund for disables 420.00 420.00 Prices regulated fund 28,920.27 1,098.84 Land use tax 434,549.74
Building taxes 373,581.64
Total 22,497,530.86 620,179.66 24 Dividend payable
Name of investors 31-12-2013 31-12-2012
Legal person shareholders 2,053,911.36 533,156.00 Total 2,053,911.36 533,156.00 The amount due to the shareholders holding over5% (including5%) of the equity of the Company in the balance of dividend payable at the end of the current year was RMB950,000.00 and RMB570,755.36 which payable to Dalian Bingshan Group Co., Lt.d and Sanyo Electric Co., Ltd. respectively.
25 Other accounts payable
Ages 31-12-2013 31-12-2012
Within 1 year 29,586,977.60 28,634,478.69 1 to 2 years 3,640,918.43 5,340,619.53 2 to 3 years 2,003,306.90 3,322,905.85 3 to 4 years 2,981,861.66 2,563,202.17 4 to 5 years 2,416,554.17 1,845,733.04 Over 5 years 11,299,745.27 11,729,024.79 Total 51,929,364.03 53,435,964.07 (1)There were RMB10,332,829.67 due to the shareholders holding over5% (including5%) of the equity of the Company ---Dalian Bingshan Group Co., Ltd., and mainly because subsidiary company borrowed for moving to new location.
(2) The amount of other accounts payable due to related companies is RMB10,565,329.49,20.35% of total other accounts payable. Please refer to the VI7 of the notes.
(3) Most of the amount of other accounts payable aged more than one year was owed to Dalian Bingshan Group Co., Ltd. (4) Top 5 on amount of other accounts payable
Name of investors 31-12-2013 Reasons Notes Dalian Bingshan Group Co., Ltd. 10,332,829.67 Borrowed for moving to new location
Dalian Refrigeration Co., Ltd. 2013 Annual Report 26 Other current liabilities
Items 31-12-2013 31-12-2012 Note
Contribution to subsidiary company relocation 1,114,000.00 1,114,000.00 The deferred income
average amortized during
the use life of related
Subsidy fund for highly effective heat pump and related system 585,101.00 585,101.00
assets.
Total 1,699,101.00 1,699,101.00
The ending balance of deferred income of the current year will be converted to income during year 2014.
27 Other non-current liabilities—Deferred income
Items 31-12-2013 31-12-2012 Subsidy fund for big screw refrigeration research project 6,688,918.19 Subsidy fund for highly effective heat pump and related system 4,289,394.00 4,874,495.00 Contribution to subsidiary company relocation 46,788,000.00 47,902,000.00 Big capacity of sea water pre-freeze project of Project 863 15,549,945.60 13,809,945.60 Total 66,627,339.60 73,275,358.79 The balance of above itemsdidn’t meet the conditions being converted to income at the end of year 2013.
28 Share capitals
Issuance of Shares converted
Items 31-12-2012 Others 31-12-2013 new shares from reserve
I. Non-circulating share capital with restricted
trade conditions
1. State-owned shares
2. Shares held by domestic legal persons
3. Other domestic shares 19,306,034.00 -84,508.00 19,221,526.00 Including: Shares held by domestic natural
92,113.00 -84,508.00 7,605.00 person
II. Circulating share capital
1. Domestically listed ordinary shares
215,708,941.00 84,508.00 215,793,449.00 (A-share)
2. Domestically listed ordinary shares
115,000,000.00 115,000,000.00 (B-share)
III. Total 350,014,975.00 350,014,975.00 The non-circulating share capital of Dalian Bingshan Group Co., Ltd. circulated on January 21, 2011, but Dalian Bingshan Group Co., Ltd. declared that these shares would not be listed to sell in the Shenzhen Stock Exchange within 60 months after the circulating date.
Dalian Refrigeration Co., Ltd. 2013 Annual Report Base on the promise, the Company will apply to unlock these shares until the Company practices management equity incentive. 29 Capital surpluses
Decreased during
Increased during current
Items 31-12-2012 31-12-2013 year current year
Capital premium
(1)Capital premium 513,645,432.79 513,645,432.79 (2)Others 1,534,544.19 9,000.00 1,543,544.19 Other capital surplus
(1) portion of associated
2,783,286.72 2,783,286.72companies’ capital surplus reserves
(2) Others 66,889,019.51 66,889,019.51 Total 584,852,283.21 9,000.00 584,861,283.21 30 Surplus reserves
Item 31-12-2012 Increased during current year Decreased during current year 31-12-2013 Statutory surplus reserves 246,953,104.61 14,532,842.39 261,485,947.00 Other reserved capital 222,712,778.72 21,334,339.53 244,047,118.25 Total 469,665,883.33 35,867,181.92 505,533,065.25 The increase of the surplus reserves were because the statutory reserved capital RMB14,532,842.39 was withdrawn respectively on the basis of10% of theCompany’s net profit of year 2013 and the other reserved capital RMB21,334,339.53was withdrawn on the basis of20% of theCompany’s net profit of 2012 according to the resolution of the General Meeting of Shareholders of year 2013. 31 Retained earnings
Items 2013 Extraction or allocation proportion Retained earnings at the end of prior year 404,267,596.17
Add: Changes in accounting policies
At beginning of the year after retrospective adjustment 404,267,596.17
Add: Net profit of the current period 153,006,057.13
Less: Appropriation of statutory surplus reserves 14,532,842.3910% of net profit of parent company
Appropriation of other reserved capital 21,334,339.5320% of net profit of year 2012
Cash dividends 52,502,246.25 RMB 0.15 per share of year 2012
Dividends transferred to share capital
Appropriation of employee’s welfare and bonus fund in foreign
2,295,358.13
invested company
Retained earnings at the end of the current year 466,608,867.00
Dalian Refrigeration Co., Ltd. 2013 Annual Report 32 Total operating income and operating cost
(1) Total operating income and cost
Items 2013 2012
Key business income 1,517,271,251.60 1,500,369,887.23 Other business income 18,435,659.65 21,609,378.92 Key business cost 1,149,272,794.08 1,125,582,427.92 Other business cost 17,728,208.67 22,563,315.47 (2) Key business (Type)
2013 2012
Name of type
Revenue Cost Revenue Cost
Manufacturing 1,517,271,251.60 1,149,272,794.08 1,500,369,887.23 1,125,582,427.92 (3) Key business (Product)
2013 2012
Name of product
Revenue Cost Revenue Cost
Refrigeration equipments
1,517,271,251.60 1,149,272,794.08 1,500,369,887.23 1,125,582,427.92 (4) Key business (Region)
2013 2012
Regions
Revenue Cost Revenue Cost
North-east of China 1,115,911,862.44 850,325,789.22 1,082,470,156.02 810,884,866.15 East of China 31,406,876.77 25,784,728.39 32,811,751.62 30,833,469.32 Central of China 369,952,512.39 273,162,276.47 385,087,979.59 283,864,092.45 Total 1,517,271,251.60 1,149,272,794.08 1,500,369,887.23 1,125,582,427.92 (5) Top five customers
Names Revenue Percentage of total business income Dalian Bingshan Engineering&Trading Co., Ltd. 91,804,457.91 5.98
Chengdu New World Refrigeration Equipment Engineering Co., Ltd. 26,247,162.22 1.71
The Yellow Sea Ship Building Co., Ltd. 26,106,390.19 1.70
The People's Liberation Army 63820 Troops 23,931,623.95 1.56
Dalian Sanyo Cold-chain Co., Ltd. 20,836,908.95 1.36
Total 188,926,543.22 12.31
Dalian Refrigeration Co., Ltd. 2013 Annual Report 33 Taxes and surcharges
Items 2013 2012 Basis of taxes calculated
Business tax 1,620,199.26 1,618,429.523% or5% of Revenue
City maintenance and construction tax 6,943,068.86 4,925,750.137% of Business tax and Value-added tax
Additional education fees 2,809,809.19 2,254,048.273% of Business tax and Value-added tax
Local educational fees 1,769,485.46 1,472,859.062% of Business tax and Value-added tax
Fees for dikes protection 253,132.56 205,022.98
Others 1,658.60
Total 13,395,695.33 10,477,768.56
34 Selling and distribution expenses
Items 2013 2012
Handle official business expenses 10,995,574.34 10,429,190.04
Salaries and subsidies 43,671,276.16 48,656,810.22
Depreciation expenses 534,867.59 571,857.80
Transportations expenses 18,329,442.69 15,946,248.74
Entertainment expenses 15,232,708.03 12,922,965.34
Traveling expenses 22,658,477.21 21,682,038.78
Maintenance and repair expenses 7,012,387.41 8,968,857.75
Advertise and bids expenses 1,157,448.96 712,713.99
Others 628,458.37 529,656.52
Total 120,220,640.76 120,420,339.18
35 Administrative expenses
Items 2013 2012
Handle official business expenses 17,930,227.98 15,556,062.72
Salaries and subsidies 98,199,562.43 105,318,386.75
Depreciation expenses 6,941,443.83 6,886,241.87
Transportations expenses 449,579.80 956,992.18
Entertainment expenses 5,063,935.14 4,512,282.74
Traveling expenses 5,720,931.13 5,030,251.20
Maintenance and repair expenses 5,488,204.42 5,257,370.54
Advertise expenses 590,472.83 683,411.08
Other taxes 10,784,752.67 8,981,685.29
Insurance expenses 3,404,042.46 2,911,875.37
Research and development expenses 16,543,061.97 16,580,048.22
Dalian Refrigeration Co., Ltd. 2013 Annual Report Amortization of long term assets 4,358,271.30 4,279,400.88
Design consultant and test service expenses 692,855.48 3,909,650.12
Others 2,247,458.06 3,430,865.74
Total 178,414,799.50 184,294,524.70
36 Financial expenses
Items 2013 2012
Interest expenses 3,486,491.68 2,020,041.16
Less: interest income 9,713,153.86 6,754,743.27
Losses on exchange(Less: gain on exchange) -43,918.61 69,190.54
Other expenses 437,974.58 424,492.55
Total -5,832,606.21 -4,241,019.02
37 Gain/ (loss) from investment
(1) Details
Items 2013 2012
Calculated by cost method 533,450.00 39,025.00 Calculated by equity method 90,138,921.23 90,901,193.46 Gain from disposal financial assets available for sale
Gain from disposal associated company -2,130,588.28 -22,452,531.35 Total 88,541,782.95 68,487,687.11 (2) Calculated by costmethod（more than5% ofprofit）
Names 2013 2012 Reason of changes Wuhan Steel and Electricity Co., Ltd. 33,450.00 39,025.00 Profit distribution
Liaoning Mec Group Co., Ltd. 500,000.00 Profit distribution
Total 533,450.00 39,025.00
(3) Calculated by equitymethod（more than5% ofprofit）
Names 2013 2012 Reason of changes Dalian Sanyo Cold-chain Co., Ltd 14,500,067.70
Grand Ocean-Showa Auto Air Conditioning (Dalian) Co., Ltd. 9,838,189.57 12,119,696.25 Decrease of business profit Dalian Sanyo Compressor Co., Ltd. 61,334,779.52 45,399,199.71 Increase of business profit
Dalian Fuji Bingshan Vending Machine Co., Ltd. 10,997,312.10
Total 71,172,969.09 83,016,275.76
(4)There was no severe constrict on the collection of the investment earnings.
Dalian Refrigeration Co., Ltd. 2013 Annual Report 38 Impairment losses
Items 2013 2012
Bad debt provision 9,990,751.21 15,453,003.02 Provision for obsolete inventories 8,591,062.66 -1,106.22 Provision for the impairment of available-for-sale financial assets
Provision for the impairment of held to maturity investments
Provision for the impairment of long-term equity investments
Provision for the impairment of investing property
Provision for the impairment of fixed assets
Provision for the impairment of construction materials
Provision for the impairment of construction in progress
Provision for the impairment of bearer biological assets
Provision for the impairment of oil assets
Provision for the impairment of intangible assets
Provision for the impairment of goodwill
Provision for the impairment of other assets
Total 18,581,813.87 15,451,896.80 39 Non-business incomes
(1)Details
Items 2013 2012 Non-recurring losses of current period Gain on the disposal of non-current assets 42,478,670.13 287,957.48 42,478,670.13 Penalty and fine income 224,978.40 169,348.00 224,978.40 Subsidy fund from government 2,681,117.07 3,201,518.64 1,507,483.45 Deferred income 8,388,019.19 13,177,896.96 6,688,918.19 Debts need not paid 1,212,570.63 1,019,739.52 1,212,570.63 Others 80,007.30 9,533.75 80,007.30 Total 55,065,362.72 17,865,994.35 52,192,628.10 (2) Subsidy fund from government
Items 2013 2012 Explanations
Subsidy for information construction from Dalian Municipal
150,000.00 Related to gain
Bureau of Finance
Aid for patent from Dalian Intellectual Property Service Centre 1,500.00 Related to gain
Subsidy of economic support policy 20,300.00 Related to gain
Dalian Refrigeration Co., Ltd. 2013 Annual Report Items 2013 2012 Explanations
Subsidy for social security 268,554.84 Related to gain
Subsidy for circular economy project 150,000.00 Related to gain
Award for QC team 3,000.00 Related to gain
Aid for patent from Wuhan Intellectual Property Bureau 6,700.00 Related to gain
Subsidy and award for patent 200,000.00 Related to gain
Mayor’s Quality Award 3,000.00 Related to gain
Financial incentive award for increasing production and sales 305,000.00 Related to gain
Subsidy for science and technology development 100,000.00 Related to gain
Subsidy for small and medium-sized enterprises exploiting
10,500.00 Related to gain
international market
Others 2,081,062.23 2,583,018.64 Related to gain
Total 2,681,117.07 3,201,518.64
40 Non-business expenses
Items 2013 2012 Non-recurring losses of current period Loss on the disposal of non-current assets 2,391,111.76 397,868.21 2,391,111.76 Fines and penalties 223,561.51 37,467.63 223,561.51 Others 172,882.63 63,382.04 172,882.63 Total 2,787,555.90 498,717.88 2,787,555.90 41 Income tax expenses
Items 2013 2012
Current income tax expense 27,329,745.66 9,914,116.91 Deferred income tax expense -1,546,216.71 -2,673,681.99 Total 25,783,528.95 7,240,434.92 42 Basic earnings per share and diluted earnings per share calculation process
(1) Earnings per share
2013 2012
Items
Basic EPS Diluted EPS Basic EPS Diluted EPS Profit or loss attributable to the Company 0.44 0.44 0.33 0.33 Profit or loss after deducting extraordinary gain or loss
0.35 0.35 0.35 0.35 attributable to the Company
(2)Calculation of basic earnings per share
Dalian Refrigeration Co., Ltd. 2013 Annual Report Items No. 2013 2012 Profit or loss attributable to the Company 1 153,006,057.13 117,142,066.15 Profit or loss after deducting extraordinary gain or loss attributable to the Company 2 121,207,821.52 123,788,117.10 the weighted average number of ordinary shares outstanding during the period(So) 3=4+5+6*10/9-7*11/9-8 350,014,975 350,014,975 the number of ordinary shares at the beginning of the period(S0) 4 350,014,975 350,014,975 the number of additional ordinary shares issued on capital surplus transfer or share dividends
5
appropriation(S1)
the number of ordinary shares issued in exchange for cash or issued as a result of the conversion
6
of a debt instrument to ordinary shares during the period(Si)
reduced number of ordinary shares such as shares buy back(Sj) 7
the number of a reverse share split(Sk) 8
the months during the period(Mo) 9 12 12 the months from the following month after issuing incremental shares to the end of the
10
period(Mi)
the months from the following month after reducing shares to the end of the period(Mj) 11
Basic earnings per share 12=1/3 0.44 0.33 Basic earnings per share deducting extraordinary gain or loss 13=2/3 0.35 0.35 (3) For the diluted potential ordinary shares, the net profits attributed to ordinary shareholders during the reporting term and the weighted average number of outstanding ordinary shares should be adjusted separately, and it shall be used to calculate the diluted earnings per share. Under the circumstances to issue the diluted potential ordinary shares such as convertible bonds, stock options, stock warrants, the diluted earnings per share shall be calculated in the light of the formula as follow: Diluted Earnings Per Share=P1/(S0＋S1＋Si×Mi÷M0–Sj×Mj÷M0–Sk+ The weighted average number of incremental ordinary shares on warrants, options, convertible debt and soon）P1represents the amounts attributable to ordinary equity holders of the Company in respect of: (a) Profit or loss attributable to the Company; and (b) Profit or loss after deducting extraordinary gain or loss attributable to the Company, adjust according to the accounting standards for enterprises and other relevant provisions. The Company considered in sequence from dilutive potential ordinary shares to get the lowest earnings per share.
43 Other comprehensive income
Items 2013 2012
1、Gain/(loss)on financial assets available for sale
Less: Income tax infection on financial assets available for sale
Net amount transferred into profit and loss at current period that reckon into other
comprehensive income at former period
Subtotal
2、Net amount of comprehensive income of invested company belonging to the company 33,750.41
Less: Income tax infection
Net amount transferred into profit and loss at current period that reckon into other 1,514,016.77
Dalian Refrigeration Co., Ltd. 2013 Annual Report Items 2013 2012
comprehensive income at former period
Subtotal -1,480,266.36
3.Others 12,000.00
Less: Income tax infection 3,000.00
Net amount transferred into profit and loss at current period that reckon into other
comprehensive income at former period
Subtotal 9,000.00
Total 9,000.00 -1,480,266.36
Other comprehensive income of the current period was a van contributed by Dalian Bingshan Group Co., Ltd.
44 Relevant information about cash flow statement
(1) Other cash received relating to operating activities
Items 2013
Government grants 601,886.86 Received travel expense receivable 144,151.92 Deposit received 12,487,300.47 Received amount paid on behalf of related companies 491,705.07 interest income 6,387,003.45 Others 652,608.03 Total 20,764,655.80 (2) Other cash paid relating to operating activities
Items 2013
Borrowing of travel expense 1,910,956.05 Deposit paid 18,589,434.86 Expenditure 105,925,234.58 Bank handling charges 435,970.84 Others 2,568,790.16 Total 129,430,386.49 (3) Other cash paid relating to financing activities
Items 2013
Interests on discount of bill acceptance 28,496.45 Total 28,496.45
Dalian Refrigeration Co., Ltd. 2013 Annual Report 45 Complementary information for consolidated cash flow statement
(1) The relationship between the net profit and the net cash flows from operating activities
Item 2013 2012 1. Reconciliation from the net profit to the cash flows from operating activities
Net profit 158,961,626.07 126,044,541.20 Add: Provisions for assets impairment 18,581,813.87 15,451,896.80 Depreciation of fixed assets 35,771,708.12 32,392,644.09 Amortization of intangible assets 4,221,094.69 4,153,582.56 Amortization of long-term deferred expenses 330,987.74 138,478.32 Losses on disposal of fixed assets, intangible assets and other long-term assets -39,296,435.28 22,627,350.39 Losses on scrapping of fixed assets 1,339,465.19 -64,908.31 Losses on variation of fair value
Finance expenses 3,442,573.07 1,920,314.53 Investment losses -90,672,371.23 -90,940,218.46 Decrease in deferred tax assets -1,546,216.71 -2,673,681.99 Increase in deferred tax liabilities
Decrease in inventory 67,628,044.19 27,869,321.85 Decrease in operating receivables -64,778,163.84 34,539,921.59 Increase in operating payables -86,353,669.44 -238,320,128.55 Others
Net cash flows from operating activities 7,630,456.44 -66,860,885.98 2. Investing and financing activities that do not involve cash receipts and payments
Conversion of debt into capital
Convertible bonds to be expired within one year
Fixed assets under finance lease
3. Net increase in cash and cash equivalents
Cash at the end of the period 502,339,160.35 525,818,735.46 Less: Cash at the beginning of the period 525,818,735.46 681,077,489.30 Plus: Cash equivalents at the end of the period
Less: Cash equivalents at the beginning of the period
Net increase in cash and cash equivalents -23,479,575.11 -155,258,753.84 (2) Cash and cash equivalents
Item 2013 2012 1.Cash 502,339,160.35 525,818,735.46 Including: cash on hand 99,455.92 195,378.55 Bank deposits that can be used for payment whenever necessary 492,056,269.04 523,052,983.91 Other monetary capital that can be used for payment whenever necessary 10,183,435.39 2,570,373.00 2.Cash equivalents
Including: Bonds mature within 3 months
3.Balance of cash and cash equivalents at the end of the year 502,339,160.35 525,818,735.46
Dalian Refrigeration Co., Ltd. 2013 Annual Report Including: Cash or cash equivalents which was restricted in use of the Company and subsidiaries
in the group
Ⅵ.Related Parties Relationships and Transactions
1 Information of theCompany’s parent company
The ultimate Legal
The parent The parent
Name of Principal
Nature of
Registered Nature of
controlling Organization representative Registered capital
company's company's
party of the Code enterprise activities enterprise address business
shareholding voting right
person
Company
Installation
Dalian and
Limited
Bingshan manufactory Homma SASAC of
liabilities Dalian Manufacture 140,600,000.00 21.96% 21.96% 24129179-3 Group Co., of Tetsuro Dalian
company
Ltd. refrigeration
equipment
2The information of the subsidiaries please referstoⅣ .1 of this note.
3 The information of the affiliated company and joint venture please referstoⅤ.10 of this note.
4 Other type of the related parties
Names of the related parties Relationships with the Company Organization Code Dalian Bingshan Group Refrigeration Equipment Co., Ltd. Subsidiary of Dalian Bingshan Group
11857056-X
Dalian Third Refrigeration Equipment Factory Subsidiary of Dalian Bingshan Group
11853975-7
Beijing Bingshan Serial Refrigeration Equipment Co., Ltd.
Subsidiary of Dalian Bingshan Group 80139721-2
Dalian Bingshan Group Materials Trading Co. , Ltd Subsidiary of Dalian Bingshan Group 74437418-7
Dalian Spindle Cooling Towers Co., Ltd. Affiliated company of Dalian Bingshan Group
60487379-3
Dalian Bingshan Metal Technology Co., Ltd. Affiliated company of Dalian Bingshan Group
76077536-X
Dalian Mahe Level Control Electrical Appliances Co., Ltd. Affiliated company of Dalian Bingshan Group
60486775-6
Linde Engineering (Dalian) Co., Ltd. Affiliated company of Dalian Bingshan Group
77301721-8
BAC Dalian Co., Ltd. Joint venture of Dalian Bingshan Group
60492102-X
Linde Engineering (Hangzhou) Co., Ltd.
Affiliated company of Dalian Bingshan Group
77356588-X
5 The transactions between the Company and the related parties
(1) The consolidated financial statements are based on the financial statements of individual subsidiaries which are included in the consolidation scope and prepared after elimination effect of intra-group transaction .
Dalian Refrigeration Co., Ltd. 2013 Annual Report (2) Purchases of goods from related parties
2013 2012 Details of Rule of Proportion of the Proportion of the Names of the related parties Items
transaction price setting
same type same type Amount Amount
transaction amount transaction amount(%) (%) Purchases of
Dalian Sanyo Refrigeration Co., Ltd. Purchases Market price 2,569,876.37 0.25 980,638.27 0.11 goods
Purchases of
Dalian Sanyo Cold-chain Co., Ltd Purchases Market price 16,055,020.56 1.55 14,283,670.08 1.55 goods
Purchases of
Dalian Sanyo Compressor Co., Ltd. Purchases Market price 3,545,400.57 0.34 1,937,518.80 0.21 goods
Dalian Sanyo Meica Electronics Purchases of
Purchases Market price 213,529.88 0.02 630,695.93 0.07 Co., Ltd. goods
Dalian Bingshan Group Refrigeration Purchases of
Purchases Market price 33,672,400.06 3.25 48,242,151.53 5.22 Equipment Co., Ltd. goods
Dalian Third Refrigeration Equipment Purchases of
Purchases Market price 10,292,049.56 0.99 10,694,670.81 1.16 Factory goods
Dalian Spindle Cooling Towers Co., Purchases of
Purchases Market price 505,726.50 0.05 1,142,564.14 0.12 Ltd. goods
Purchases of
BAC Dalian Co., Ltd. Purchases Market price 68,381,433.34 6.59 51,948,552.12 5.62 goods
Dalian Bingshan Engineering& Purchases of
Purchases Market price 16,873,559.17 1.63 21,780,696.77 2.36 Trading Co. , Ltd goods
Dalian Bingshan Group Materials Purchases of
Purchases Market price 6,071,068.93 0.59 7,137,251.29 0.77 Trading Co. , Ltd goods
Dalian Bingshan Metal Technology Purchases of
Purchases Market price 1,162,754.10 0.11 1,718,970.92 0.19 Co., Ltd. goods
Daliian Sanyo High-Efficient Refrigeration Purchases of
Purchases Market price 1,685,099.52 0.16
System Co., Ltd. goods
(3) Sales of goods to related parties
2013 2012 Details of Rule of Proportion of the Proportion of the Names of the related parties Item
same type same type transaction price setting
Amount Amount
transaction amount transaction amount(%) (%) Sales of
Dalian Sanyo Refrigeration Co., Ltd. Sales Market price 9,944,816.81 0.65 2,771,682.26 0.18 goods
Sales of
Dalian Sanyo Cold-chain Co., Ltd Sales Market price 20,836,908.95 1.36 17,893,281.12 1.19 goods
Dalian Refrigeration Co., Ltd. 2013 Annual Report 2013 2012 Details of Rule of Proportion of the Proportion of the Names of the related parties Item
transaction price setting
same type same type Amount Amount
transaction amount transaction amount(%) (%) Sales of
Dalian Sanyo Compressor Co., Ltd. Sales Market price 5,184,721.94 0.34 5,597,091.32 0.37 goods
Dalian Bingshan Group Refrigeration Sales of
Sales Market price 1,420,026.31 0.09 2,728,668.62 0.18 Equipment Co., Ltd. goods
Dalian Third Refrigeration Equipment Sales of
Sales Market price 3,350,697.69 0.22 5,800,959.87 0.39 Factory goods
Sales of
BAC Dalian Co., Ltd. Sales Market price 414,564.10 0.03 3,789,911.11 0.25 goods
Dalian Bingshan Engineering& Trading Sales of
Sales Market price 91,804,457.91 5.98 103,794,840.38 6.92 Co. , Ltd goods
Dalian Bingshan–P&A Recreation Sales of
Sales Market price 202,492.31 0.01 878,271.62 0.06 Development Engineering Co., Ltd. goods
Beijing Bingshan Serial Refrigeration
Sales of
Sales Market price 6,319,382.90 0.41 889,382.05 0.06 Equipment Co., Ltd. goods
Beijing Huashang Bingshan Serial Sales of
Sales Market price 18,391,800.24 1.20 3,540,749.54 0.24 Refrigeration Equipment Co., Ltd. goods
Dalian Fuji Bingshan Vending Machine Sales of
Sales Market price 2,694,405.81 0.18 3,917,886.16 0.26 Co., Ltd. goods
Dalian Mahe Level Control Electrical Sales of
Sales Market price 97,701.45 0.01 15,651.60
Appliances Co., Ltd. goods
Dalian Bingshan Metal Technology Co., Sales of
Sales Market price 133,712.31 0.01 159,693.76 0.01 Ltd. goods
Daliian Sanyo High-Efficient Refrigeration Sales of
Sales Market price 447,520.90 0.03 839,390.23 0.06 System Co., Ltd. goods
(4) Leasing fee from related party
Leasing Starting date of
Leaser Lessee Ending date of lease Rental amount per year
assets lease
The Company Dalian Bingshan Group Co., Ltd. Offices 2011.01.01 2013.12.31 95,400.00
Leasing fee to related party
Leasing Starting date of
Leaser Lessee Ending date of lease Rental amount per year
assets lease
Dalian Bingshan Group Co., Ltd. The Company Offices 2013.01.01 2015.12.31 142,572.00
The Company signed a leasing agreement with Dalian Bingshan Group Co., Ltd., and leased 530㎡ of offices to Dalian Bingshan Group Co., Ltd. The rental of offices is RMB 95,400.00 per year, and the effective period of the contract is 3 years, and the leasing
Dalian Refrigeration Co., Ltd. 2013 Annual Report income is0.52% of total other income of the current period.
The Company rent office and garage of Dalian Bingshan Group Co., Ltd., and the rental is RMB142,572.00 per year for 3 years. (5) No guarantee with related companies.
(6) The borrowing of funds from related party
Name of the related party Amount Starting date Ending date Explanation
Dalian Bingshan Group Co., Ltd. 10,000,000.00 2006.09 Borrowed for moving to new location TheCompany’s subsidiary Dalian Bingshan Ryosetsu Quick Freezing Equipment Co., Ltd. borrowed RMB 10,000,000.00 from Dalian Bingshan Group Co., Ltd. for moving to new location, and the interests are counted same as bank loan and RMB608,333.36 paid during the current period.
7 Amounts due from/to related parties
(1) Notes receivable
Names of the related parties 31-12-2013 31-12-2012 Dalian Sanyo Compressor Co., Ltd. 426,959.02 1,210,373.56 Dalian Bingshan Group Import& Export Co. , Ltd. 8,529,233.58 11,283,246.61 BAC Dalian Co., Ltd. 300,000.00
Dalian Sanyo Cold-chain Co., Ltd. 839,091.27
Dalian Sanyo Refrigeration Co., Ltd. 521,694.49
(2) Accounts paid in advance
Names of the related parties 31-12-2013 31-12-2012 Dalian Sanyo Compressor Co., Ltd. 2,487.00 117,097.50 Dalian Sanyo Cold-chain Co., Ltd. 13,642.05 555.05 BAC Dalian Co., Ltd. 10,000.00 19,768.00 (3) Accounts receivable
31-12-2013 31-12-2012
Names of the related parties
Provision for Amount Provision for bad debts Amount
bad debts Dalian Sanyo Compressor Co., Ltd. 89,378.90 4,468.94 310,500.00 15,525.00 Dalian Sanyo Refrigeration Co., Ltd. 2,419,164.85 120,958.24 2,377,058.87 118,852.94 Dalian Sanyo Cold-chain Co., Ltd. 2,365,278.44 118,263.92 2,862,481.41 143,124.07 Dalian Bingshan Engineering& Trading Co., Ltd. 2,617,143.93 130,857.20
BAC Dalian Co., Ltd. 94,500.00 4,725.00 Beijing Bingshan Serial Refrigeration Equipment Co., Ltd. 1,737,774.37 86,888.72 20,976.00 1,048.80
Dalian Refrigeration Co., Ltd. 2013 Annual Report Dalian Bingshan–P&A Recreation Development Engineering Ltd. 79,457.00 3,972.85 207,707.00 10,385.35 Beijing Huashang Bingshan Refrigeration and Air-conditioning
223,000.00 19,750.00 172,000.00 8,600.00 Machinery Co., Ltd.
Dalian Fuji Bingshan Vending Machine Co., Ltd. 148,940.03 7,447.00 453,578.72 22,678.94 Dalian Sanyo High-Efficient Refrigeration System Co., Ltd. 174,023.55 8,701.18 (4) Other accounts receivable
31-12-2013 31-12-2012
Name of the related party
Provision for bad Amount Provision for bad debts Amount
debts BAC Dalian Co., Ltd. 30,000.00 3,000.00 (5) Notes payable
Names of the related parties 31-12-2013 31-12-2012
Dalian Bingshan Group Refrigeration Equipment Co., Ltd. 5,072,848.40 6,500,000.00
BAC Dalian Co., Ltd. 1,000,000.00 300,000.00
Dalian Bingshan Group Materials Trading Co. , Ltd. 5,208,750.00 2,159,000.00
Dalian Third Refrigeration Equipment Factory 1,500,000.00
Dalian Bingshan Engineering& Trading Co.,Ltd 6,447.00
Dalian Bingshan Metal Technology Co., Ltd. 600,000.00
Dalian Sanyo High-Efficient Refrigeration System Co., Ltd. 289,813.77
(6) Accounts payable
Names of the related parties 31-12-2013 31-12-2012
Dalian Third Refrigeration Equipment Factory 1,355,621.34 436,239.54
BAC Dalian Co., Ltd. 16,862,867.00 13,504,237.95
Dalian Bingshan Group Refrigeration Equipment Co., Ltd. 98,364.00 4,534,454.95
Dalian Sanyo Refrigeration Co., Ltd. 13,000.00
Dalian Sanyo Cold-chain Co., Ltd. 9,526.00 9,516.00
Dalian Sanyo Meica Electronics Co., Ltd. 172,568.79 152,738.82
Dalian Spindle Cooling Towers Co., Ltd. 269,499.00 453,403.00
Dalian Bingshan Engineering& Trading Co., Ltd. 688,542.77 844,109.45
Dalian Sanyo Compressor Co., Ltd. 909,828.95 106,102.09
Dalian Bingshan Group Materials Trading Co. , Ltd 341,965.80 175,641.03
Dalian Bingshan Metal Technology Co., Ltd. 383,288.96 108,154.23
Dalian Sanyo High-Efficient Refrigeration System Co., Ltd. 1,374,353.15
Dalian Refrigeration Co., Ltd. 2013 Annual Report (7) Accounts received in advance
Names of the related parties 31-12-2013 31-12-2012
Dalian Bingshan Group Refrigeration Equipment Co., Ltd. 8,415.30
Dalian Sanyo Refrigeration Co., Ltd. 2,978.85 2,007,000.00
Dalian Bingshan Engineering& Trading Co., Ltd. 2,272,607.85 755,530.40
Beijing Bingshan Serial Refrigeration Equipment Co., Ltd. 1,332,928.48
Beijing Huashang Bingshan Refrigeration and Air-conditioning Machinery Co., Ltd. 1,936,650.06 2,710,239.92
Dalian Bingshan–P&A Recreation Development Engineering Ltd. 3,000.00
(8) Other accounts payable
Names of the related parties 31-12-2013 31-12-2012
Dalian Bingshan Group Co., Ltd. 10,332,829.67 10,518,303.62
Dalian Third Refrigeration Equipment Factory 1,000.00 1,000.00
Dalian Bingshan Engineering& Trading Co., Ltd. 231,499.82
Ⅶ.Contingency
1. Effect of unsettled lawsuit to the financial statements
Target
Accuser Defendant Reason Court Development amount
Tonghua Yijia Dalian Bingshan Jilin Province
Contract RMB1.94mi RMB1 million of thedefendant’s bank Biotechnology Food Co., Ryosetsu Quick Freezing Tonghua County
dispute llion deposit were frozen.
Ltd. Equipment Co., Ltd. people’s Court
The lawsuit happened during the current period and was still in the process of trying when the financial statements disclosed. 2. No guarantee to other company as at the end of year 2013
3. No other contingency needed disclosed.
Ⅷ. Commitments
No major commitments to be disclosed.
Ⅸ. Post-balance sheet issues
1. Information about profit distribution after balance sheet date
Items Amount
Dividend proposed to be distributed after
52,502,246.25
balance sheet date
Dividend approved to be distributed by the board of directors after balance
52,502,246.25
sheet date
Dalian Refrigeration Co., Ltd. 2013 Annual Report Board of directors proposed to withdraw the other reserved capital on the basis of20% of the Company’s net profit and distribute cash dividend of RMB 0.15 per share to ordinary shareholders of the Company on April 22, 2014, and the cash dividend of B shareholders will be converted to Hong Kong dollar and paid.
Ⅹ. No other important things needed disclosed.
Ⅺ.Notes to the financial statements of the parent company
1 Accounts receivable
(1) Classified by accounts nature
31-12-2013 31-12-2012
Balance Provision for doubtful debt Balance Provision for doubtful debt Categories
Proportion Proportion Proportion Proportion Amount Amount Amount Amount
(%) (%) (%) (%) Major single
amount and bad
debt provision
provided
individually
Bad debt provided
231,390,326.16 100 60,808,169.35 26.28 233,497,736.50 100 59,972,692.36 25.68 on group basis
Minor single
amount but bad debt
provision provided
individually
231,390,326.16 100 60,808,169.35 26.28 233,497,736.50 100 59,972,692.36 25.68 Total
Accounts receivable which bad debt provisions are provided on age basis in the group
31-12-2012 31-12-2011
Proportion Proportion
Ages Amount Provision for bad debts Amount Provision for bad debts(%) (%)
Within1 year 98,401,447.62 42.53 4,920,072.38 93,951,629.41 40.23 4,697,581.47 1 to 2 years 54,129,047.71 23.39 5,412,904.77 59,935,567.98 25.67 5,993,556.80 2 to 3 years 27,897,517.68 12.06 8,369,255.30 22,646,684.27 9.70 6,794,005.28 3 to 4 years 10,718,514.51 4.63 5,359,257.26 23,644,344.77 10.13 11,822,172.39 4 to 5 years 17,485,595.02 7.56 13,988,476.02 13,270,668.25 5.68 10,616,534.60 Over 5 years 22,758,203.62 9.83 22,758,203.62 20,048,841.82 8.59 20,048,841.82 Total 231,390,326.16 100 60,808,169.35 233,497,736.50 100 59,972,692.36
Dalian Refrigeration Co., Ltd. 2013 Annual Report (2) There is no major single amount or minor single amount but bad debt provision provided individually during the reporting period. (3) The write-off of accounts receivable
Written off Occurred under
Name of company The nature of accounts receivable Reasons
amount related relationship? 43Clients Sale of goods 3,723,228.30 ① No
①The reasons of accounts receivable write-off include termination of operation and disability of payment, winning lawsuits but not finding executable assets, small balance not being collected for long time, and disagreement rework charges etc.
(4) No arrearage from the shareholders holding over5% (including5%) of the equity of the Company existed in the balance of accounts receivable.
(5) The first five arrearage entities listed in the balance of accounts receivable at the end of 2013
The relationships with
Companies Amount Ages Proportion(%) the Company
Less than 1year，1-2years，
COFCOMeat（Suqian）Co., Ltd. Non-affiliated
12,449,913.80 5.38 2-3years
Dalian Xinghai Bay Development and Construction
Non-affiliated
11,242,693.00 4-5years 4.86 Management Centre
The People's Liberation Army 63820 Troops Non-affiliated
6,805,353.28 Less than 1 year 2.94 Inner Mongolia Hengyecheng Silicones Co., Ltd. Non-affiliated
6,400,786.65 Less than 1 year 2.77 Dalian Jinyu New Energy Technology Development Co.,
Non-affiliated 5,500,000.00 Over 5 years 2.38 Ltd.
(6) Amounts due from related parties
Companies
Relationships with the Company Amount Proportion(%) Beijing Bingshan Serial Refrigeration Equipment Co., Ltd. Subsidiary of Dalian Bingshan Group 1,346,671.52 0.58 Total 1,346,671.52 0.58 2 Other accounts receivable
(1) Classified by accounts nature
31-12-2013 31-12-2012
Balance Provision for doubtful debt Balance Provision for doubtful debt Categories
Proportion Proportion Proportion Proportion Amount Amount Amount Amount
(%) (%) (%) (%) Major single amount and
bad debt provision
provided individually
Bad debt provided on
14,155,569.38 100 1,332,793.72 9.42 7,139,241.12 100 1,046,519.70 14.66 group basis
Dalian Refrigeration Co., Ltd. 2013 Annual Report Minor single amount but
bad debt provision
provided individually
14,155,569.38 100 1,332,793.72 9.42 7,139,241.12 100 1,046,519.70 14.66 Total
The ageing of other accounts receivable and related provisions for bad debts
31-12-2013 31-12-2012
Ages
Amount Proportion(%) Provision for bad debts Amount Proportion(%) Provision for bad debts Within1 year 12,408,490.33 87.66 620,424.51 3,581,828.76 50.17 179,091.44 1 to 2 years 418,763.14 2.96 41,876.31 1,512,886.77 21.19 151,288.68 2 to 3 years 285,114.62 2.01 85,534.39 1,535,506.07 21.51 460651.82 3 to 4 years 834,181.77 5.89 417,090.89 505,759.52 7.08 252,879.76 4 to 5 years 205,759.52 1.46 164,607.62 3,260.00 0.05 2,608.00 Over 5 years 3,260.00 0.02 3,260.00
Total 14,155,569.38 100 1,332,793.72 7,139,241.12 100 1,046,519.70 (3) There is no major single amount or minor single amount but bad debt provision provided individually during the reporting period. (4) During the reporting period, there is no other accounts receivable written-off.
(5) There is no balance of other accounts receivable due from the shareholders holding over5% (including5%) of the equity of the Company.
(6) The top five arrearage entities of other accounts receivable at the end of 2013
The relationships with
Companies Reasons Amount Ages Proportion(%) the Company
Dalian Urban Land Reserve Center Non-affiliated Land reserve 10,000,000.00 Less than 1 year 70.64 Dalian Construction Project Labor Insurance Management Deposit for migrant
Non-affiliated 500,000.00 Less than 1 year s 3.53 Office workers
Xining Agriculture and Trade Investment Construction and
Non-affiliated Deposit 432,000.00 3-4years 3.05 Development Management Centre
Jiangxi Alkali Industry Co., Ltd. Non-affiliated Deposit 300,000.00 3-4years 2.12 Dalian Economic&Technology Development Zone
Special fund for
Government Organs and Institution Administrative Non-affiliated cement and wall 265,950.62 2-3years 1.88 Expenditure Accounting Center
innovation
Total 11,497,950.62 81.22 (7) There is no amount of other accounts receivable due from related companies at the end of the current year.
3 Long-term equity investments
(1) Details of long-term equity investments
Dalian Refrigeration Co., Ltd. 2013 Annual Report Provision for Calculation Shareholdi Voting right Provision for impairmen Cash dividend of No Names Initial cost Beginning balance Changes Ending balance
method ng （%） impairment t of the the current period current period Dalian Bingshan–P&A
Recreation Equity
1 1,034,675.00 3,229,074.38 245,079.00 3,474,153.38 50 50
Development method
Engineering Co., Ltd.
Dalian Jiale Vending
Equity
2 Machine Operation Co., 18,750,000.00 14,668,101.42 -334,917.83 14,333,183.59 50 50
method
Ltd.
Dalian Bingshan
Equity
3 Engineering& Trading 1,200,000.00 12,435,737.30 702,343.62 13,138,080.92 24 24 6,000,000.00 method
Co. , Ltd.
Dalian Grand Ocean
Thermo King Transport Equity
4 2,871,708.00 2,154,532.01 -2,154,532.01 40 40
Refrigeration method
Engineering Co., Ltd
Dalian Sanyo Equity
5 85,416,929.20 151,488,491.18 -551,368.05 150,937,123.13 40 40 4,800,000.00 Refrigeration Co., Ltd. method
Dalian Honjo Chemical Equity
6 3,908,911.50 9,398,455.84 54,517.38 9,452,973.22 30 30 1,197,604.02 Co., Ltd. method
Dalian Sanyo Equity
7 134,658,753.75 216,645,866.64 -933,858.60 215,712,008.04 40 40 8,000,000.00 Cold-chain Co., Ltd method
Keinin-Grand Ocean
Equity
8 Thermal Technology 24,402,234.58 41,365,239.20 -961,810.43 40,403,428.77 20 20 10,800,000.00 method
(Dalian) Co., Ltd.
Dalian Sanyo Equity
9 176,953,841.88 348,546,951.11 36,934,779.52 385,481,730.63 40 40 24,400,000.00 Compressor Co., Ltd. method
Dalian Sanyo Meica Equity
10 9,649,590.00 27,308,958.46 -3,935,565.30 23,373,393.16 30 30 1,500,000.00 Electronics Co., Ltd. method
MHI Bingshan
Equity
11 Refrigeration (Dalian) 22,500,000.00 22,500,000.00 22,500,000.00 45 45
method
Co.,Ltd
Beijing Huashang
Equity
12 Bingshan Refrigeration
490,000.00 905,958.67 269,098.06 1,175,056.73 49 49
method
and Air-conditioning
Dalian Refrigeration Co., Ltd. 2013 Annual Report Provision for Calculation Shareholdi Voting right Provision for impairmen Cash dividend of No Names Initial cost Beginning balance Changes Ending balance
method ng （%） impairment t of the the current period current period Machinery Co., Ltd.
Dalian Fuji Bingshan
Equity
14 Vending Machine Co., 66,416,364.00 70,052,012.69 7,206,651.17 77,258,663.86 49 49
method
Ltd.
Daliian Sanyo
High-Efficient Equity
15 20,000,000.00 21,758,867.90 269,946.61 22,028,814.51 25 25
Refrigeration System method
Co., Ltd.
Dalian Sanyo Home Cost
11 19,666,212.00 11,694,400.00 11,694,400.00 10.91 10.91 11,694,400.00
Appliance Co., Ltd. method
Zibo Electric Traction
Cost
16 Machine Group Co., 420,000.00 420,000.00 420,000.00 0.76 0.76 420,000.00
method
Ltd.
Liaoning Mec Group Cost
17 1,020,000.00 1,020,000.00 1,020,000.00 3.57 3.57 500,000.00 Co., Ltd. method
Guotai Junan Securities Cost
18 30,098,895.00 30,098,895.00 30,098,895.00 0.49 0.49 1,582,164.89
Co., Ltd. method
Guotai Junan
Cost
19 Investment Management 3,057,316.00 3,057,316.00 3,057,316.00 0.22 0.22 2,688,605.91
method
Co., Ltd.
Thermo King Container
Cost
20
Temperature Control 11,207,806.00 11,207,806.00 11,207,806.00 17.8 17.8
method
(Suzhou) Co., Ltd.
Liaoning Enterprises
Cost
21 United Industry Co., 105,000.00 105,000.00 105,000.00 4.2 4.2 105,000.00
method
Ltd.
Dalian Bingshan Group
Cost
22
Materials Trading Co., 250,000.00 250,000.00 250,000.00 5 5
method
Ltd.
Dalian Bingshan Group
Cost
24 Refrigeration 20,036,841.62 20,036,841.62 20,036,841.62 100 100
method
Installation Co., Ltd.
25 Dalian Bingshan Group Cost
16,200,000.00 16,200,000.00 16,200,000.00 90 90
Dalian Refrigeration Co., Ltd. 2013 Annual Report Provision for Calculation Shareholdi Voting right Provision for impairmen Cash dividend of No Names Initial cost Beginning balance Changes Ending balance
method ng （%） impairment t of the the current period current period Sales Company method
Dalian Bingshan Metal Cost
26 12,501,344.60 12,501,344.60 12,501,344.60 64.25 64.25
Processing Co., Ltd. method
Dalian Bingshan
Cost
27 Air-Conditioning 36,506,570.00 36,506,570.00 36,506,570.00 70 70 2,240,000.00 method
Equipment Co., Ltd.
Dalian Bingshan
Cost
28 Guardian Automation 1,522,117.80 1,522,117.80 1,522,117.80 60 60 2,263,205.11 method
Co., Ltd.
Dalian Bingshan
Ryosetsu Quick Cost
29 5,745,097.40 5,745,097.40 5,745,097.40 70 70
Freezing Equipment method
Co., Ltd.
Wuhan New World
Cost
30
Refrigeration Industrial 17,980,400.00 17,980,400.00 17,980,400.00 51 51 2,550,000.00 method
Co., Ltd.
Wuhan New World
Refrigeration Air
Cost
31 400,000.00 400,000.00 400,000.00 5 100
Conditioner Engineering
method
Co., Ltd.
Total 744,970,608.33 1,088,704,035.22 59,310,363.14 1,148,014,398.36 16,490,170.80 64,250,809.133 (2) On 11th April, 2013, the 2nd meeting of the 6th Board of the Company decided to establish the join-venture MHI Bingshan Refrigeration (Dalian) Co., Ltd. with Japan Mitsubishi Heavy Industry Co., Ltd. The Company invested RMB 36,000,000.00 and held45% equity. The join-venture received the investment of both investors on 22nd November, 2013, and got the Capital
Certification Report of Dalian Changde Gongzheng CPAs on 25th November, 2013.
(3) On 18th April, 2013, the 3rd meeting of the 6th Board of the Company agreed Dalian Bingshan Group Import& Export Co., Ltd. to increase capital with its retained earnings, and the registered capital increased from RMB 5,000,000.00 to RMB 30,000,000.00. After that, the shareholding ratio was constant. On the same time, Dalian Bingshan Group Import& Export Co., Ltd. changed the name to Dalian Bingshan International Trading Co., Ltd.
(4) On 18th July, 2013, the 4th meeting of the 6th Board of the Company agreed Wuhan New World Refrigeration Industrial Co., Ltd. to increase capital with its capital surpluses and surplus reserved and retained earnings, and the registered capital increased from RMB 30,000,000.00 to RMB 100,000,000.00, and got the No.213 Capital Certification Report of Hubei Gongxin CPAs. After that, the shareholding ratio was constant.
(5) On 29th August, 2013, Dalian Grand Ocean Thermo King Transport Refrigeration Engineering Co., Ltd which the Company held
Dalian Refrigeration Co., Ltd. 2013 Annual Report40% equity terminated after having been approved to cancel the registration by DalianA dministration of Industry and Commerce. (6) On 22nd October, 2013, the 6th meeting of the 6th Board of the Company permitted the Company and Fuji Electricity Co., Ltd. transferring all the equity of Dalian Jiale Vending Machine Operation Co., Ltd. to the independent third party Shanghai Miyuan Beverage Co., Ltd. respectively. At the end of current year, the transactiondidn’t complete, and the Company received the transfer price RMB15,000,000.00 in January of 2014.
4 Total operating income and operating cost
(1)Business income and cost
Items 2013 2012
Key business income 884,273,729.21 857,046,806.65 Other business income 16,295,615.17 20,114,449.47 Key business cost 680,508,985.30 651,587,064.34 Other business cost 15,288,568.30 20,521,426.14 (2) Key business(Type）
2013 2012
Name of type
Revenue Cost Revenue Cost Manufacturing 884,273,729.21 680,508,985.30 857,046,806.65 651,587,064.34 (3) Key business(Product）
2013 2012
Name of product
Revenue Cost Revenue Cost Refrigeration equipments 884,273,729.21 680,508,985.30 857,046,806.65 651,587,064.34 (4) Key business(Region）
2012 2011
Name of region
Revenue Cost Revenue Cost North-east of China 884,273,729.21 680,508,985.30 857,046,806.65 651,587,064.34 (5) Top five customers
Names Revenue Percentage of total business income Dalian Bingshan Engineering& Trading Co. , Ltd. 77,834,617.71 8.64
The Yellow Sea Ship Building Co., Ltd. 26,106,390.19 2.90
The People's Liberation Army 63820 Troops 23,931,623.95 2.66
Rizhao Tyson Foods Co., Ltd. 13,652,286.82 1.52
Beijing Huashang Bingshan Refrigeration and Air-conditioning Machinery Co., Ltd. 13,075,560.94 1.45
Total 154,600,479.61 17.17
Dalian Refrigeration Co., Ltd. 2013 Annual Report 5 Gain/ (loss) from investments
(1) Category
Items 2013 2012 Gain arising from dividends of subsidiaries 7,553,205.11 6,537,220.05 Long-term equity investment income accounted for by using the equity method 90,138,921.23 90,901,193.46 Gain on selling equity of associate company -2,130,588.28 2,247,250.99 Gain from other company -24,478,593.00 Total 95,561,538.06 75,207,071.50 (2) Gain arising from dividends of subsidiaries (cost method)
Names of invested companies 2013 2012 Reason of changes Liaoning Mec Group Co., Ltd. 500,000.00 distributed dividend Dalian Bingshan Air-Conditioning Equipment Co., Ltd. 2,240,000.00 2,450,000.00 Less distributed dividend Dalian Bingshan Guardian Automation Co., Ltd. 2,263,205.11 1,537,220.05 More distributed dividend Wuhan New World Refrigeration Industrial Co., Ltd. 2,550,000.00 2,550,000.00
Total 7,553,205.11 6,537,220.05
(3) Long-term equity investment income accounted for by using the equity method
Names of invested companies 2013 2012 Reason of changes Dalian Sanyo Refrigeration Co., Ltd. 4,248,631.95 5,767,953.89 Decrease of business profit Dalian Sanyo Cold-chain Co., Ltd 7,066,141.40 14,500,067.70 Decrease of business profit Grand Ocean-showa Auto Air Conditioning (Dalian) Co., Ltd. 9,838,189.57 12,119,696.25 Decrease of business profit Dalian Sanyo Compressor Co., Ltd. 61,334,779.52 45,399,199.71 Increase of business profit Dalian Bingshan Group Import& Export Co. , Ltd. 702,343.62 1,906,943.93 Decrease of business profit Dalian Grand Ocean Thermo King Transport Refrigeration Engineering Co., Ltd 476,422.06 -1,303,186.83 Liquidation Dalian Honjo Chemical Co., Ltd. 1,252,121.40 1,213,141.64 Increase of business profit Dalian Sanyo Meica Electronics Co., Ltd. -2,435,565.30 827,388.15 Decrease of business profit Beijing Huashang Bingshan Refrigeration and Air-conditioning Machinery Co., Ltd. 269,098.06 111,742.54 Increase of business profit Dalian Fuji Bingshan Vending Machine Co., Ltd. 7,206,651.17 10,997,312.10 Decrease of business profit Daliian Sanyo High-Efficient Refrigeration System Co., Ltd. 269,946.61 -1,094,615.22 Increase of business profit Dalian Bingshan–P&A Recreation Development Engineering Co., Ltd. 245,079.00 348,604.56 Decrease of business profit Dalian Jiale Vending Machine Operation Co., Ltd. -334,917.83 106,945.04 Decrease of business profit Total 90,138,921.23 90,901,193.46
(4)There was no severe constrict on the collection of the investment earnings.
Dalian Refrigeration Co., Ltd. 2013 Annual Report 6 Supplementary information of cash flow statement
Supplementary information 2013 2012 1. Reconciliation from the net profit to the cash flows from operating activities
Net profit 145,328,423.94 106,671,697.64 Add: Provisions for assets impairment
11,252,241.88 7,419,892.35 Depreciation of fixed assets 23,007,116.88 20,387,841.95 Amortization of intangible assets 2,623,483.37 2,551,355.91 Amortization of long-term deferred expenses 313,457.06 120,947.64 Losses on disposal of fixed assets, intangible assets and other long-term assets -39,177,559.49 22,231,342.01 Losses on scrapping of fixed assets 1,058,384.84 -125,806.40 Losses on variation of fair value
Finance expenses -114,079.83 -27.22 Investment losses -97,692,126.34 -97,438,413.51 Decrease in deferred tax assets -386,780.42 -1,245,914.08 Increase in deferred tax liabilities
Decrease in inventory 23,686,826.75 4,067,223.46 Decrease in operating receivables 5,437,999.56 18,019,108.19 Increase in operating payables -61,276,693.23 -158,481,164.58 Others
Net cash flows from operating activities 14,060,694.97
-75,821,916.64 2. Investing and financing activities that do not involve cash receipts and payments
Conversion of debt into capital
Convertible bonds to be expired within one year
Fixed assets under finance lease
3. Net increase in cash and cash equivalents
Cash at the end of the period 431,494,649.19 437,725,268.74 Less: Cash at the beginning of the period 437,725,268.74 585,557,597.61 Plus: Cash equivalents at the end of the period
Less: Cash equivalents at the beginning of the period
Net increase in cash and cash equivalents -6,230,619.55 -147,832,328.87
Dalian Refrigeration Co., Ltd. 2013 Annual ReportⅫ. Other supplementary Information
1 Non-recurring profits and losses
Non-recurring gains and losses items 2013 2012 1. Gain/loss from disposal of non-current assets 33,844,950.09 -22,341,252.74 2.Tax return or exemption exceeding authority or without formal authorization documents 905,596.59
3.Governmental subsidy written into current gains and losses 7,290,805.05 13,090,280.89 4. Interest from non-financial enterprises written into current gains and losses
5.Gains/Losses on debt restructuring
6.Reversal of provision for impairment of long-term assets
7.Gain/loss from change of fair value of transactional asset and liabilities, and investment gains from disposal
of transactional financial assets and liabilities and sellable financial assets, other than valid period value
instruments related to theCompany’s common businesses.
8.Other net income and expense from non-operation 1,121,112.19 1,097,771.60 Total 43,162,463.92 -8,153,200.25Less：Affected amount of income tax from non-recurring gains and losses -10,592,590.74 -2,218,545.09 Net amount of non-recurring gains and losses 32,569,873.17 -5,934,655.16 Included: Attributable to minorityshareholders’ equity -771,l637.57 711,395.79 Attributable to the owners of parent company 31,798,235.61 -6,646,050.95 2 Earnings per share
The weighted average EPS
Items
ROE
Basic EPS Diluted EPS Net profit attributable to theCompany’s ordinary shareholders 8.27% 0.44 0.44 Net profit attributable to the Company ’s ordinary shareholders after
6.55% 0.35 0.35 deducting non-recurring gains and losses
Dalian Refrigeration Co., Ltd. 2013 Annual ReportⅫ. Details and reasons for the special change of the financial statements items
Items of balance sheet 2013 2012 Rate ofchange（%） Reasons Interest receivable 3,603,594.85 277,444.44 1,198.85% Fixed bank deposit increased Other current assets 995,599.80 6,026,385.86 -83.48% Prepaid income tax decreased Project in construction 68,462,823.08 1,304,951.56 5,146.39% Building transformation unfinished Renovation and amortization expenses Long-term deferred expenses 3,901,749.71 2,981,518.62 30.86%
increased
Account received in advance 177,238,388.99 288,041,113.23 -38.47% Fulfill to realize sales
Dividend payable 2,053,911.36 533,156.00 285.24% Not due to pay
Taxes payable 22,497,530.86 620,179.66 3,527.58% Income tax payable increased Financial expenses -5,832,606.21 -4,241,019.02 37.53% Interest income increased
Non-business incomes 55,065,362.72 17,865,994.35 208.21% Gain of land reserved
Non-business expenses 2,787,555.90 498,717.88 458.94% Disposal of assets of old mould workshop Income tax expenses 25,783,528.95 7,240,434.92 256.10% Profit before tax increased
ⅩⅢ. Approval of the financial statements
The financial statements were approved by the board of directors of the Company on April 22, 2014.
Dalian Refrigeration Co., Ltd. 2013 Annual Report Section 11 Reference Documents
1. The accounting statements bearing the signatures and seals of the legal representative, the financial
majordomo and the accountants in charge.
2. The original copy of the auditor's report bearing the seal of the certified public accountants and the signatures and seals of the certified accountants.
3. The original copies of all the Company's documents and the original copies of the bulletins published on the newspapers designated by the China Securities Regulatory Commission in the report period.
4. Time for reference: from Monday to Friday 8:00 - 12:00 (a. m.) 1:00 - 5:00 (p. m.)
Liaison persons: Song Wenbao
Tel: 0086-411-86538130
Fax: 0086-411-86654530
Board of Directors of Dalian Refrigeration Co., Ltd.
April 24, 2014
Dalian Refrigeration Co., Ltd. 2013 Annual Report CONSOLIDATED BALANCE SHEET
AS OF 31 DECEMBER 2013
Prepared by Dalian Refrigeration Company Limited 31 December 2013 Unit: RMB Yuan
||||
|-|-|-|
|Ending balance||Beginning Balance|
|Consolidation|Parent company|Consolidation|
|512,903,713.13|434,747,569.29|531,896,655.08|
|39,827,031.77|20,694,679.80|41,966,544.97|
|369,712,746.70|170,582,156.81|352,261,726.74|
|26,031,386.32|6,125,477.96|31,249,976.50|
|3,603,594.85|3,603,594.85|277,444.44|
|33,450.00|2,550,000.00|39,025.00|
|24,514,740.07|12,822,775.66|18,963,969.53|
|325,531,007.41|173,198,452.67|398,895,095.83|
|995,599.80|922,487.82|6,026,385.86|
|1,303,153,270.05|825,247,194.86|1,381,576,823.95|
|1,021,946,998.64|1,131,524,227.56|962,636,635.50|
|395,266,143.70|218,716,664.94|404,973,883.42|
|68,462,823.08|65,051,019.19|1,304,951.56|
|155,190,230.51|89,590,975.25|165,794,041.15|
|3,901,749.71|3,548,214.70|2,981,518.62|
|19,469,019.20|11,512,233.28|17,922,802.49|
|1,664,236,964.84|1,519,943,334.92|1,555,613,832.74|
|2,967,390,234.89|2,345,190,529.78|2,937,190,656.69|

Dalian Refrigeration Co., Ltd. 2013 Annual Report CONSOLIDATED BALANCE SHEET (CONTINUED)
AS OF 31 DECEMBER 2013
Prepared by Dalian Refrigeration Company Limited 31 December 2013 Unit: RMB Yuan
||||
|-|-|-|
|Ending balance||Beginning Balance|
|Consolidation|Parent company|Consolidation|
|37,500,000.00||29,500,000.00|
|80,293,515.17|55,821,881.28|79,127,124.20|
|464,863,265.01|265,908,099.58|436,720,339.20|
|177,238,388.99|107,267,861.73|288,041,113.23|
|53,580,031.02|19,207,236.71|64,384,750.97|
|22,497,530.86|13,071,583.87|620,179.66|
|2,053,911.36|533,156.00|533,156.00|
|51,929,364.03|51,184,849.13|53,435,964.07|
|1,699,101.00|585,101.00|1,699,101.00|
|891,655,107.44|513,579,769.30|954,061,728.33|
|66,627,339.60|19,839,339.60|73,275,358.79|
|66,627,339.60|19,839,339.60|73,275,358.79|
|958,282,447.04|533,419,108.90|1,027,337,087.12|
|350,014,975.00|350,014,975.00|350,014,975.00|
|584,861,283.21|583,632,355.59|584,852,283.21|
|505,533,065.25|505,533,065.25|469,665,883.33|
|466,608,867.00|372,591,025.04|404,267,596.17|
|1,907,018,190.46|1,811,771,420.88|1,808,800,737.71|
|102,089,597.39||101,052,831.86|
|2,009,107,787.85|1,811,771,420.88|1,909,853,569.57|
|2,967,390,234.89|2,345,190,529.78|2,937,190,656.69|

Dalian Refrigeration Co., Ltd. 2013 Annual Report CONSOLIDATED INCOME STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2013
Prepared by Dalian Refrigeration Company Limited Year of 2013 Unit: RMB Yuan
||||
|-|-|-|
|2013||2012|
|Consolidation|Parent company|Consolidation|
|1,535,706,911.25|900,569,344.38|1,521,979,266.15|
|1,535,706,911.25|900,569,344.38|1,521,979,266.15|
|1,491,781,346.00|879,734,879.70|1,474,549,253.61|
|1,167,001,002.75|695,797,553.60|1,148,145,743.39|
|13,395,695.33|5,551,893.13|10,477,768.56|
|120,220,640.76|73,064,406.17|120,420,339.18|
|178,414,799.50|103,225,883.77|184,294,524.70|
|-5,832,606.21|-9,157,098.85|-4,241,019.02|
|18,581,813.87|11,252,241.88|15,451,896.80|
|88,541,782.95|95,561,538.06|68,487,687.11|
|90,138,921.23|90,138,921.23|90,901,193.46|
|132,467,348.20|116,396,002.74|115,917,699.65|
|55,065,362.72|51,089,399.87|17,865,994.35|
|2,787,555.90|1,988,131.34|498,717.88|
|2,391,111.76|1,988,131.34|397,868.21|
|184,745,155.02|165,497,271.27|133,284,976.12|
|25,783,528.95|20,168,847.33|7,240,434.92|
|158,961,626.07|145,328,423.94|126,044,541.20|
|153,006,057.13|145,328,423.94|117,142,066.15|
|5,955,568.94||8,902,475.05|
|0.44||0.33|
|0.44||0.33|
|9,000.00|9,000.00|-1,480,266.36|
|158,970,626.07|145,337,423.94|124,564,274.84|
|153,015,057.13|145,337,423.94|115,661,799.79|
|5,955,568.94||8,902,475.05|

Dalian Refrigeration Co., Ltd. 2013 Annual Report CONSOLIDATED CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2013
Prepared by Dalian Refrigeration Company Limited Year of 2013 Unit: RMB Yuan
||||
|-|-|-|
|2013|||
|Consolidation|Parent company|Consolidation|
|1,189,227,777.51|755,661,177.35|1,244,649,016.91|
|905,596.59||1,074,217.39|
|20,764,655.80|15,052,479.83|22,998,286.80|
|1,210,898,029.90|770,713,657.18|1,268,721,521.10|
|693,055,366.39|467,021,690.12|839,140,888.03|
|262,511,390.02|149,282,944.19|243,198,883.59|
|118,270,430.56|62,835,570.59|126,629,196.07|
|129,430,386.49|77,512,757.31|126,613,439.39|
|1,203,267,573.46|756,652,962.21|1,335,582,407.08|
|7,630,456.44|14,060,694.97|-66,860,885.98|
|500,365.79|500,365.79|23,305.03|
|51,236,629.02|55,700,809.13|45,351,793.58|
|40,260,691.00|40,128,000.00|125,107.80|
|91,997,685.81|96,329,174.92|45,500,206.41|
|50,648,044.45|41,617,909.94|41,288,458.72|
|22,500,000.00|22,500,000.00|44,810,220.00|
|73,148,044.45|64,117,909.94|86,098,678.72|
|18,849,641.36|32,211,264.98|-40,598,472.31|
|53,900,000.00||35,300,000.00|
|53,900,000.00||35,300,000.00|
|45,000,000.00||18,300,000.00|

Dalian Refrigeration Co., Ltd. 2013 Annual Report Cash paid for distribution of dividends or profit or
58,790,065.18 52,502,246.25 64,811,376.57 52,502,246.25 reimbursing interest
||||
|-|-|-|
|2,468,803.41||8,509,813.37|
|28,496.45||4,298.47|
|103,818,561.63|52,502,246.25|83,115,675.04|
|-49,918,561.63|-52,502,246.25|-47,815,675.04|
|-41,111.28|-333.25|16,279.49|
|-23,479,575.11|-6,230,619.55|-155,258,753.84|
|525,818,735.46|437,725,268.74|681,077,489.30|
|502,339,160.35|431,494,649.19|525,818,735.46|

Dalian Refrigeration Co., Ltd. 2013 Annual Report CONSOLIDATED STATEMENT OF CHANGES INOWNER’S EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2013
Prepared by Dalian Refrigeration Company Limited Year of 2013 Unit: RMB Yuan
||||||||||
|-|-|-|-|-|-|-|-|-|
|2013|||||||||
|Owners’ equity attributable to parent company|||||||Minorityequity|Total of owners’equity|
|share capital|Capital suplus|Lessen:treasurystock|Surplus reserve|Generalriskreserve|Retained profits|Others|||
|350,014,975.00|584,852,283.21||469,665,883.33||404,267,596.17||101,052,831.86|1,909,853,569.57|
|350,014,975.00|584,852,283.21||469,665,883.33||404,267,596.17||101,052,831.86|1,909,853,569.57|
||9,000.00||35,867,181.92||62,341,270.83||1,036,765.53|99,254,218.28|
||||||153,006,057.13||5,955,568.94|158,961,626.07|
||9,000.00|||||||9,000.00|
||9,000.00||||153,006,057.13||5,955,568.94|158,970,626.07|
||||35,867,181.92||-90,664,786.30||-4,918,803.41|-59,716,407.79|
||||35,867,181.92||-35,867,181.92||||
||||||-52,502,246.25||-4,918,803.41|-57,421,049.66|
||||||-2,295,358.13|||-2,295,358.13|
|350,014,975.00|584,861,283.21||505,533,065.25||466,608,867.00||102,089,597.39|2,009,107,787.85|

Dalian Refrigeration Co., Ltd. 2013 Annual Report
||||||||||
|-|-|-|-|-|-|-|-|-|
|2012|||||||||
|Owners’ equity attributable to parent company|||||||Minorityequity|Total of owners’equity|
|share capital|Capital surplus|Lessen:treasurystock|Surplus reserve|Generalriskreserve|Retained profits|Others|||
|350,014,975.00|586,837,221.82||445,492,052.28||366,477,854.72||97,410,170.18|1,846,232,274.00|
|350,014,975.00|586,837,221.82||445,492,052.28||366,477,854.72||97,410,170.18|1,846,232,274.00|
||-1,984,938.61||24,173,831.05||37,789,741.45||3,642,661.68|63,621,295.57|
||||||117,142,066.15||8,902,475.05|126,044,541.20|
||-1,984,938.61|||||||-1,984,938.61|
||-1,984,938.61||||117,142,066.15||8,902,475.05|124,059,602.59|
||||24,173,831.05||-79,352,324.70||-5,259,813.37|-60,438,307.02|
||||24,173,831.05||-24,173,831.05||||
||||||-52,502,246.25||-5,259,813.37|-57,762,059.62|
||||||-2,676,247.40|||-2,676,247.40|
|350,014,975.00|584,852,283.21||469,665,883.33||404,267,596.17||101,052,831.86|1,909,853,569.57|

Dalian Refrigeration Co., Ltd. 2013 Annual Report STATEMENT OF CHANGES INOWNERS’ EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2013
Prepared by Dalian Refrigeration Company Limited Year of 2013 Unit: RMB Yuan
|||||||||
|-|-|-|-|-|-|-|-|
|2013||||||||
|Owners’ equity attributable to parent company|||||||Total of owners’equity|
|share capital|Capital surplus|Lessen:treasurystock|Surplus reserve|Generalriskreserve|Retained profits|Others||
|350,014,975.00|583,623,355.59||469,665,883.33||315,632,029.27||1,718,936,243.19|
|350,014,975.00|583,623,355.59||469,665,883.33||315,632,029.27||1,718,936,243.19|
||9,000.00||35,867,181.92||56,958,995.77||92,835,177.69|
||||||145,328,423.94||145,328,423.94|
||9,000.00||||||9,000.00|
||9,000.00||||145,328,423.94||145,337,423.94|
||||35,867,181.92||-88,369,428.17||-52,502,246.25|
||||35,867,181.92||-35,867,181.92|||
||||||-52,502,246.25||-52,502,246.25|
|350,014,975.00|583,632,355.59||505,533,065.25||372,591,025.04||1,811,771,420.88|

Dalian Refrigeration Co., Ltd. 2013 Annual Report
|||||||||
|-|-|-|-|-|-|-|-|
|2012||||||||
|Owners’ equity attributable to parent company|||||||Total of owners’equity|
|share capital|Capital surplus|Lessen:treasurystock|Surplus reserve|Generalriskreserve|Retained profits|Others||
|350,014,975.00|585,608,294.20||445,492,052.28||285,636,408.93||1,666,751,730.41|
|350,014,975.00|585,608,294.20||445,492,052.28||285,636,408.93||1,666,751,730.41|
||-1,984,938.61||24,173,831.05||29,995,620.34||52,184,512.78|
||||||106,671,697.64||106,671,697.64|
||-1,984,938.61||||||-1,984,938.61|
||-1,984,938.61||||106,671,697.64||104,686,759.03|
||||24,173,831.05||-76,676,077.30||-52,502,246.25|
||||24,173,831.05||-24,173,831.05|||
||||||-52,502,246.25||-52,502,246.25|
|350,014,975.00|583,623,355.59||469,665,883.33||315,632,029.27||1,718,936,243.19|