DALIAN REFRIGERATION COMPANY LIMITED
CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2015
(NOT AUDITED)
BALANCE SHEET
Prepared by Dalian Refrigeration Co., Ltd. June 30, 2015 Unit: RMB Yuan
||||||
|-|-|-|-|-|
|Assets|30-June-2015||31-Dec-2014||
||Consolidation|Parent Company|Consolidation|Parent Company|
|Current assets:|||||
|Monetary funds|365,011,773.84|260,938,973.86|508,511,466.02|407,573,197.89|
|Financial assets which are measured by fair value andwhich changes are recorded in current profit and loss|||||
|Derivative financial assets|||||
|Notes receivable|48,780,136.31|40,794,557.06|14,855,957.70|15,711,896.93|
|Accounts receivable|566,710,020.31|277,942,840.42|438,880,830.12|205,307,502.60|
|Accounts in advance|42,581,468.71|22,619,683.04|19,053,269.75|8,470,706.14|
|Interest receivables|2,491,608.34|2,491,608.34|4,998,982.40|4,998,982.40|
|Dividend receivable|39,200,000.00|43,115,784.39|||
|Other receivables|40,188,760.41|22,774,783.60|34,266,444.02|21,265,905.54|
|Inventories|292,455,943.91|146,700,214.72|314,879,106.56|164,069,128.20|
|Assets held for sale|||||
|Non-current asset due within one year|||||
|Other current assets|1,428,520.15|786,802.37|2,335,139.79|1,659,559.91|
|Total current assets|1,398,848,231.98|818,165,247.80|1,337,781,196.36|829,056,879.61|
|Non-current assets:|||||
|Finance asset held available for sales|1,045,925,548.00|1,044,610,405.50|42,428,388.70|41,113,246.20|
|Held-to-maturity investment|||||
|Long-term account receivable|||||
|Long-term equity investment|1,033,513,959.00|1,159,105,764.57|1,039,229,738.85|1,146,858,810.27|
|Investment property|24,803,246.50|24,803,246.50|25,108,909.00|25,108,909.00|
|Fixed assets|399,179,806.10|229,357,152.23|414,293,269.31|239,721,541.76|
|Construction in progress|44,351,507.90|34,967,564.89|18,515,449.46|18,280,777.19|
|Engineering material|||||
|Disposal of fixed asset|||||
|Productive biological asset|||||
|Oil and gas asset|||||
|Intangible assets|151,902,168.86|88,685,242.89|153,913,310.25|89,919,836.54|
|Expense on Research and Development|||||
|Goodwill|||||
|Long-term expenses to be apportioned|5,134,146.97|4,806,907.98|5,873,398.99|5,537,394.66|
|Deferred income tax asset|18,455,439.11|7,756,556.37|16,786,587.33|8,054,057.26|
|Other non-current asset|||||
|Total non-current asset|2,723,265,822.44|2,594,092,840.93|1,716,149,051.89|1,574,594,572.88|
|Total assets|4,122,114,054.42|3,412,258,088.73|3,053,930,248.25|2,403,651,452.49|

 Legal Representative: Ji Zhijian Chief Financial Official: Rong Yan Person in Charge of Accounting Mao Chunhua
BALANCE SHEET (CONTINUED)
Prepared by Dalian Refrigeration Co., Ltd. June 30, 2015 Unit: RMB Yuan
||||||
|-|-|-|-|-|
|Liabilities and shareholders‘ equity|30-June-2015||31-Dec-2014||
||Consolidation|Parent Company|Consolidation|Parent Company|
|Current liabilities:|||||
|Short-term loans|60,000,000.00||60,000,000.00||
|Derivative financial liabilities|||||
|Notes payable|120,832,581.67|91,596,784.50|109,546,502.61|66,979,512.02|
|Accounts payable|545,355,348.00|308,429,134.56|511,076,537.82|302,053,679.95|
|Accounts received in advance|104,820,567.76|37,895,560.18|137,629,315.42|96,325,866.23|
|Wage payable|31,143,560.46|2,690,798.91|55,993,637.27|13,854,152.86|
|Taxes payable|17,205,482.56|3,404,861.70|2,642,729.69|-2,710,393.15|
|Interest payable|||||
|Dividend payable|2,643,678.92|533,156.00|533,156.00|533,156.00|
|Other accounts payable|59,512,717.45|20,578,331.35|60,075,814.04|49,270,430.42|
|Liabilities held for sale|||||
|Non-current liabilities due within one year|||||
|Other current liabilities|||||
|Total current liabilities|941,513,936.82|465,128,627.20|937,497,692.85|526,306,404.33|
|Non-current liabilities:|||||
|Long-term loans|||||
|Bonds payable|||||
|Long-term account payable|||||
|Long-term wage payable|||||
|Special accounts payable|||||
|Projected liabilities|||||
|Deferred income|50,227,845.00|3,996,845.00|52,773,884.19|5,985,884.19|
|Deferred income tax liabilities|150,524,573.90|150,524,573.90|||
|Other non-current liabilities|||||
|Total non-current liabilities|200,752,418.90|154,521,418.90|52,773,884.19|5,985,884.19|
|Total liabilities|1,142,266,355.72|619,650,046.10|990,271,577.04|532,292,288.52|
|Shareholders‘ equity|||||
|Share capital|360,164,975.00|360,164,975.00|350,014,975.00|350,014,975.00|
|Other equity instruments|||||
|Capital public reserve|633,448,214.29|633,448,214.29|582,288,006.29|582,288,006.29|
|Specialized reserve|||||
|Other comprehensive income|855,740,872.12|854,511,944.50|2,768,286.72|1,539,359.10|
|Special preparation|||||
|Surplus public reserve|568,167,243.90|568,167,243.90|545,788,247.99|545,788,247.99|
|Retained profit|474,241,996.29|376,315,664.94|486,167,740.13|391,728,575.59|
|Translation of foreign currency capital|||||
|Total owner‘s equity attributable to parentcompany||2,792,608,042.63||1,871,359,163.97|
||2,891,763,301.60||1,967,027,256.13||
|Minority interests|88,084,397.10||96,631,415.08||
|Total owner‘s equity|2,979,847,698.70|2,792,608,042.63|2,063,658,671.21|1,871,359,163.97|
|Total liabilities and shareholder‘s equity|4,122,114,054.42|3,412,258,088.73|3,053,930,248.25|2,403,651,452.49|

Legal Representative: Ji Zhijian Chief Financial Official: Rong Yan Person in Charge of Accounting Mao Chunhua
INCOME STATEMENT
Prepared by Dalian Refrigeration Co., Ltd. January-June, 2015 Unit: RMB Yuan
||||||
|-|-|-|-|-|
|Items|January-June, 2015||January-June, 2014||
||Consolidation|Parent Company|Consolidation|Parent Company|
|I. Total sales|711,740,342.13|299,875,171.09|774,912,253.19|470,970,219.97|
|Including: Operating income|711,740,342.13|299,875,171.09|774,912,253.19|470,970,219.97|
|II. Total operating cost|692,522,643.78|291,977,877.31|763,013,964.64|467,279,899.71|
|Including: Operating cost|562,347,397.92|247,322,955.72|609,950,440.82|386,947,532.84|
|Taxes and associate charges|5,466,860.36|1,160,192.70|6,469,418.81|3,082,292.41|
|Selling and distribution expenses|35,327,320.58|1,506,513.32|48,901,400.51|25,191,223.59|
|Administrative expenses|88,737,103.40|51,690,825.61|89,762,782.36|50,581,629.55|
|Financial expense|-1,831,323.45|-3,950,961.70|-3,797,684.83|-5,176,060.33|
|Impairment loss|2,475,284.97|-5,601,648.34|11,727,606.97|6,653,281.65|
|Add: Gain/(loss) from change in fair value|||||
|Gain/(loss) from investment|48,393,081.52|52,308,865.91|56,334,258.74|58,434,258.74|
|Including: income form investment on affiliatedenterprise and jointly enterprise|48,083,081.52|48,083,081.52|53,897,497.58|53,897,497.58|
|III. Operating profit|67,610,779.87|60,056,159.69|68,232,547.29|62,124,579.00|
|Add: non-business income|2,768,512.07|2,043,822.27|5,049,995.17|4,294,350.32|
|Including: profit from non-current asset disposal|28,868.06|9,807.69|2,044.63|1,084.63|
|Less: non-business expense|4,465.70|437.18|206,820.12|104,144.94|
|Including: loss from non-current asset disposal|2,394.33|437.18|129,041.96|54,144.94|
|IV. Total profit|70,374,826.24|62,099,544.78|73,075,722.34|66,314,784.38|
|Less: Income tax|5,691,645.31|1,108,713.27|3,751,633.86|2,100,279.73|
|V. Net profit|64,683,180.93|60,990,831.51|69,324,088.48|64,214,504.65|
|Net profit attributable to parent company|65,477,775.99|60,990,831.51|66,477,633.28|64,214,504.65|
|Minority shareholders‘ gains and losses|-794,595.06||2,846,455.20||
|VI. After-tax net amount of other comprehensiveincomes|852,972,585.40|852,972,585.40|-11,250.00|-11,250.00|
|After-tax net amount of other comprehensiveincomes attributable to owners of the Company|852,972,585.40|852,972,585.40|-11,250.00|-11,250.00|
|(I) Other comprehensive incomes that will not bereclassified into gains and losses|||||
|1. Changes in net liabilities or assets with a definedbenefit plan upon re-measurement|||||
|2. Enjoyable shares in other comprehensiveincomes in investees that cannot be reclassifiedinto gains and losses under the equity method|||||
|……|||||
|(II) Other comprehensive incomes that will bereclassified into gains and losses|852,972,585.40|852,972,585.40|-11,250.00|-11,250.00|
|1. Enjoyable shares in other comprehensiveincomes in investees that will be reclassified intogains and losses under the equity method|||-11,250.00|-11,250.00|
|2. Gains and losses on fair value changes ofavailable-for-sale financial assets|852,972,585.40|852,972,585.40|||
|3. Gains and losses on reclassifying held-to-maturity investments into available-for-salefinancial assets|||||
|4. Effective hedging gains and losses on cash flows|||||
|5. Foreign-currency financial statement translationdifference|||||
|6. Other|||||

||||||
|-|-|-|-|-|
|……|||||
|After-tax net amount of other comprehensiveincomes attributable to minority shareholders|||||
|VII Total comprehensive income|917,655,766.33|913,963,416.91|69,312,838.48|64,203,254.65|
|Total comprehensive income attributable to parentcompany|918,450,361.39|913,963,416.91|66,466,383.28|64,203,254.65|
|Total comprehensive income attributable tominority shareholders|-794,595.06||2,846,455.20||
|VIII. Earnings per share|||||
|(I) basic earnings per share|0.18||0.19||
|(II) diluted earnings per share|0.18||0.19||

Legal Representative: Ji Zhijian Chief Financial Official: Rong Yan Person in Charge of Accounting Mao Chunhua
CASH FLOW STATEMENT
Prepared by Dalian Refrigeration Co., Ltd. January -June, 2015 Unit: RMBYuan
|||||||
|-|-|-|-|-|-|
|Items|January -June, 2015|||January -June, 2014||
||Consolidation|Parent Company||Consolidation|Parent Company|
|I. Cash flows arising from operating activities:||||||
|Cash received from selling commodities and providing laborservices|382,614,969.22|109,026,091.80||526,979,719.10|298,992,839.09|
|Write-back of tax received|745,652.66|||38,095.13||
|Other cash received concerning operating activities|15,112,738.10|9,419,307.14||23,780,067.97|17,828,305.25|
|Subtotal of cash inflow arising from operating activities|398,473,359.98|118,445,398.94||550,797,882.20|316,821,144.34|
|Cash paid for purchasing commodities and receiving laborservice|272,348,733.40|146,775,719.87||281,731,145.25|189,500,108.92|
|Cash paid to/for staff and workers|152,175,815.25|66,965,526.52||154,450,749.32|90,376,223.25|
|Taxes paid|38,023,028.19|11,822,825.39||64,623,975.30|34,997,096.61|
|Other cash paid concerning operating activities|66,515,704.51|21,159,867.78||52,586,398.79|35,942,188.52|
|Subtotal of cash outflow arising from operating activities|529,063,281.35|246,723,939.56||553,392,268.66|350,815,617.30|
|Net cash flows arising from operating activities|-130,589,921.37|-128,278,540.62||-2,594,386.46|-33,994,472.96|
|II. Cash flows arising from investing activities:||||||
|Cash received from recovering investment||||15,000,000.00|15,000,000.00|
|Cash received from investment income|19,113,061.37|19,113,061.37||20,655,571.40|20,622,121.40|
|Net cash received from disposal of fixed, intangible and otherlong-term assets|55,285.00|10,000.00||93,105.00||
|Net cash received from disposal of subsidiaries and otherunits||||||
|Other cash received concerning investing activities||||0.00||
|Subtotal of cash inflow from investing activities|19,168,346.37|19,123,061.37||35,748,676.40|35,622,121.40|
|Cash paid for purchasing fixed, intangible and other long-termassets|29,845,066.20|19,426,933.55||16,104,146.74|9,309,283.62|
|Cash paid for investment|13,454,100.00|22,166,934.15||||
|Net cash received from payment of subsidiaries and otherbusiness units||||||
|Other cash paid concerning investing activities||||0.00||
|Subtotal of cash outflow from investing activities|43,299,166.20|41,593,867.70||16,104,146.74|9,309,283.62|
|Net cash flows arising from investing activities|-24,130,819.83||-22,470,806.33|19,644,529.66|26,312,837.78|
|III. Cash flows arising from financing activities||||||
|Cash received from absorbing investment|60,434,000.00|56,434,000.00||||
|Including: Cash received from absorbing minorityshareholders' equity investment by subsidiaries|4,000,000.00|||||
|Cash received from loans|27,360,000.00|||7,400,000.00||
|Other cash received concerning financing activities|32,953,876.63||16,145,665.64|0.00||
|Subtotal of cash inflow from financing activities|120,747,876.63||72,579,665.64|7,400,000.00||
|Cash paid for settling debts|21,760,000.00|||3,900,000.00||
|Cash paid for dividend and profit distributing or interestpaying|54,557,721.81|52,031,349.57||52,941,288.95|50,624,979.28|
|Including: dividends or profit paid by subsidiaries to minorityshareholders|392,000.00|||1,500,000.00||
|Other cash paid concerning financing activities|34,920,526.90|20,975,652.64||39,984.00||
|Subtotal of cash outflow from financing activities|111,238,248.71|73,007,002.21||56,881,272.95|50,624,979.28|
|Net cash flows arising from financing activities|9,509,627.92|-427,336.57||-49,481,272.95|-50,624,979.28|
|IV. Influence on cash due to fluctuation in exchange rate|-255,229.17|-287,527.51||13,202.47|98.80|
|V. Net increase of cash and cash equivalents|-145,466,342.45|-151,464,211.03||-32,417,927.28|-58,306,515.66|
|Add: Balance of cash and cash equivalents at the period -begin|475,557,589.39|391,427,532.25||502,339,160.35|431,494,649.19|
|VI. Balance of cash and cash equivalents at the period–end|330,091,246.94|239,963,321.22||469,921,233.07|373,188,133.53|

Legal Representative: Ji Zhijian Chief Financial Official: Rong Yan Person in Charge of Accounting Mao Chunhua
CONSOLIDATED STATEMENT OF CHANGES INOWNERS’ EQUITY
Prepared by Dalian Refrigeration Company Limited January-June,2015 Unit: RMB Yuan
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
|2015.01-06||||||||||
|Owners‘ equity attributable to parent company||||||||Minority equity|Total ofowners‘ equity|
|share capital|Capital suplus|Lessen:treasurystock|Othercomprehensiveincome|Surplusreserve|General riskreserve|Retainedprofits|Others|||
|350,014,975.00|582,288,006.29||2,768,286.72||545,788,247.99|486,167,740.13||96,631,415.08|2,063,658,671.21|
|350,014,975.00|582,288,006.29||2,768,286.72||545,788,247.99|486,167,740.13||96,631,415.08|2,063,658,671.21|
|10,150,000.00|51,160,208.00||852,972,585.40||22,378,995.91|-11,925,743.84||-8,547,017.98|916,189,027.49|
||||852,972,585.40|||65,477,775.99||-794,595.06|917,655,766.33|
|10,150,000.00|51,160,208.00|||||||-5,249,900.00|56,060,308.00|
|10,150,000.00|51,160,208.00|||||||-5,249,900.00|56,060,308.00|
||||||22,378,995.91|-77,403,519.83||-2,502,522.92|-57,527,046.84|
||||||22,378,995.91|-22,378,995.91||||
|||||||-54,024,746.25||-2,502,522.92|-56,527,269.17|
|||||||-999,777.67|||-999,777.67|
|360,164,975.00|633,448,214.29||855,740,872.12||568,167,243.90|474,241,996.29||88,084,397.10|2,979,847,698.70|

Legal Representative: Ji Zhijian Chief Financial Official: Rong Yan Person in Charge of Accounting Mao Chunhua
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
|2014.01-12||||||||||
|Owners‘ equity attributable to parent company||||||||Minorityequity|Total ofowners‘ equity|
|share capital|Capital suplus|Lessen:treasurystock|Othercomprehensive income|Surplus reserve|Generalriskreserve|Retained profits|Others|||
|350,014,975.00|584,861,283.21|||50 5,533,065.25||466,608,867.000||102,089,597.39|2,009,107,787.85|
||-2,783,286.72||2, 783,286.72|||||||
|350,014,975.00|582,077,996.49||2,783,286.72|50 5,533,065.25||466,608,867.00||102,089,597.39|2,009,107,787.85|
||210,009.80||-15,000.00|40,255,182.74||19,558,873.13||-5,458,182.31|54,550,883.36|
||||-15,000.00|||115,439,722.39||-920,440.66|114,504,281.73|
||210,009.80|||||||-2,281,000.00|-2,070,990.20|
|||||||||-2,281,000.00|-2,281,000.00|
||210,009.80||||||||210,009.80|
|||||4 0,255,182.74||-95,880,849.26||-2,256,741.65|-57,882,408.17|
|||||4 0,225,182.74||-40,255,182.74||||
|||||||-52,502,246.25||-2,256,741.65|-54,758,987.90|
|||||||-3,123,420.27|||-3,123,420.27|
|350,014,975.00|582,288,006.29||2,768,286.72|545,788,247.99||486,167,740.13||96,631,415.08|2,063,658,671.21|

 Legal Representative: Ji Zhijian Chief Financial Official: Rong Yan Person in Charge of Accounting Mao Chunhua
STATEMENT OF CHANGES INOWNERS’ EQUITY
Prepared by Dalian Refrigeration Company Limited January-June,2015 Unit: RMB Yuan
||||||||||
|-|-|-|-|-|-|-|-|-|
|2015.01-06|||||||||
|Owners‘ equity attributable to parent company||||||||Total of owners‘equity|
|share capital|Other equityinstrument|Capital suplus|Lessen:treasurystock|Othercomprehensiveincome|Specialpreparation|Surplus reserve|Retainedprofits||
|350,014,975.00||582,288,006.29||1,539,359.10||545,788,247.99|391,728,575.59|1,871,359,163.97|
|350,014,975.00||582,288,006.29||1,539,359.10||545,788,247.99|391,728,575.59|1,871,359,163.97|
|10,150,000.00||51,160,208.00||852,972,585.40||22,378,995.91|-15,412,910.65|921,248,878.66|
|||||852,972,585.40|||60,990,831.51|913,963,416.91|
|10,150,000.00||51,160,208.00||||||61,310,208.00|
|10,150,000.00||51,160,208.00||||||61,310,208.00|
|||||||22,378,995.91|-76,403,742.16|-54,024,746.25|
|||||||22,378,995.91|-22,378,995.91||
||||||||-54,024,746.25|-54,024,746.25|
|360,164,975.00||633,448,214.29||854,511,944.50||568,167,243.90|376,315,664.94|2,792,608,042.63|

 Legal Representative: Ji Zhijian Chief Financial Official: Rong Yan Person in Charge of Accounting Mao Chunhua
||||||||||
|-|-|-|-|-|-|-|-|-|
|2014.01-12|||||||||
|Owners‘ equity attributable to parent company||||||||Total of owners‘equity|
|share capital|Other equityinstrument|Capital suplus|Lessen:treasurystock|Othercomprehensiveincome|Specialpreparation|Surplus reserve|Retainedprofits||
|350,014,975.00||583,632,355.59||||505,533,065.25|372,591,025.04|1,811,771,420.88|
|||-1,554,359.10||1,554,359.10|||||
|350,014,975.00||582,077,996.49||1,554,359.10||505,533,065.25|372,591,025.04|1,811,771,420.88|
|||210,009.80||-15,000.00||40,255,182.74|19,137,550.55|59,587,743.09|
|||||-15,000.00|||111,894,979.54|111,879,979.54|
|||210,009.80||||||210,009.80|
|||210,009.80||||||210,009.80|
|||||||40,255,182.74|-92,757,428.99|-52,502,246.25|
|||||||40,255,182.74|-40,255,182.74||
||||||||-52,502,246.25|-52,502,246.25|
|350,014,975.00||582,288,006.29||1,539,359.10||545,788,247.99|391,728,575.59|1,871,359,163.97|

Legal Representative: Ji Zhijian Chief Financial Official: Rong Yan Person in Charge of Accounting Mao Chunhua
NOTES TO THE FINANCIAL STATEMENTS
(All amounts in RMB Yuan unless otherwise stated)
1.General information
Dalian Refrigeration Company Limited (the―Company‖) was reorganized from main part of former Dalian Refrigeration Factory, and incorporated in thePeople‘s Republic of China (the―PRC‖) on December 18, 1993 as a joint stock limited company. TheCompany‘s domestically listed RMB denominated ordinary shares(―Ashares‖) and domestically listed foreign investment ordinary shares(―Bshares‖) were listed on the Shenzhen Stock Exchange in the PRC in December 1993 and March 1998 respectively. The Company together with its subsidiaries is hereinafter collectively referred to as the―Group‖. As at 30 June, 2015, the registered capital of the Company was RMB 360,164,975.00. The address of theCompany‘s registered office is No.888 Xinan Road, Shahekou District, Dalian, China. The parent company of the Company is Dalian Bingshan Group Co., Ltd.
The principal activities of the Company are manufacture, sale and installation of refrigeration equipments.
The financial statements were permitted to disclose by the board of directors of the Company on 19th August, 2015.
2. The scope of consolidation
There are 8 entities included in the current consolidated financial statements, including:
Proportion of
Proportion of
Names of subsidiaries Types Level shareholding
votes（%）
（%）
Dalian Bingshan Group Refrigeration Installation Fully owned 1 100 100
Co., Ltd.
Fully owned 1
Dalian Bingshan Group Sales Co., Ltd. 100 100
Holding
Dalian Bingshan Air-Conditioning Equipment 1
subsidiary 70 70
Co., Ltd.
Holding 1
Dalian Bingshan Metal Processing Co., Ltd. 100 100
subsidiary
Holding 1
Dalian Bingshan Guardian Automation Co., Ltd. 60 60
subsidiary
Dalian Bingshan Ryosetsu Quick Freezing Holding 1
70 70
Equipment Co., Ltd. subsidiary
Wuhan New World Refrigeration Industrial Co., Holding 1
51 51
Ltd. subsidiary
Holding 1
Bingshan Technical Service (Dalian ) Co., Ltd. 60 60
subsidiary
The subject included in consolidated financial statement in the reporting period increased the
Bingshan Technology Service (Dalian) Co., Ltd. over that of last period.
By the solution of the 11th meeting of 6th session of Board of Directors of the company, the
company purchased10% shareholdings of Dalian Bingshan Group Sales Co., Ltd., and Dalian Bingshan Group Sales Co., Ltd. became a whole holding subsidiary of the company. The
company would transfer30% shareholdings of Dalian Bingshan Group Sales Co., Ltd. to
Wuhan New World Refrigeration Industrial Co., Ltd., but the equity transaction did not finish
at the end of June 30, 2015, and the company held100% shareholdings of Dalian Bingshan
Group Sales Co., Ltd. in the financial statements of first half of 2015.
By the solution of the 12th meeting of 6th session of Board of Directors of the company, the
company would purchase the subsidiary Dalian Bingshan Metal Processing Co., Ltd., and the
equity transaction had been finished at the end of June 30, 2015., and the company held100% shareholdings of Dalian Bingshan Metal Processing Co., Ltd. in the financial statements of first
half of 2015.
By the solution of the 12th meeting of 6th session of Board of Directors of the company, the
company will establish a joint company with Dalian Bingshan International Trade Co., Ltd.
The new company named Bingshan Technology Service (Dalian) Co., Ltd., and the registered
capital is RMB 20,000,000.00. The company will invest RMB 12,000,000.00 and hold60% of shareholding proportion. Till end of 30 June 2015, Bingshan Technology Service (Dalian) Co., Ltd. started operations, and was included in the consolidated statement.
IV Basic of preparation of financial statements
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 Accounting Standards for Business Enterprises issued by Ministry of Finance.
2. Going-concern
The company has the capacity to continually operate within 12 months at least since the end of report period, andhasn‗t the major issues impacting on the sustainable operation ability.
V.The main accounting policies, accounting estimates and corrections of accounting
errors
1. Declaration on following Accounting Standard for Business Enterprises
Declaration from the Company: The financial statements made by the Company were in accordance with Accounting Standards for Business Enterprises, which reflected the financial position, financial performance and cash flow of the Company truly, objectively and completely.
2. Fiscal year
The Company adopts the calendar year as its fiscal year, i.e. from January 1 to December 31.
3. Operating Cycle
12 months are regarded as one operating cycle in the company, and which is as the division criterion for the liquidity of assets and liabilities.
4. Functional currency
RMB was the functional currency of the Company.
5. 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 theCompany‘s accounting policy of―Consolidated financialstatement‖.
6. Basis of consolidation
(1) Scope of consolidation
Consolidated financial statements are included all subsidiaries of the parent.
(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.
7. Joint venture arrangements classification and co-operation accounting treatment
A. Joint venture arrangements classification
Under the terms of the structure of the company, the legal form of the joint venture arrangements agreed in the joint venture arrangements, other factors such as the relevant facts and circumstances, the joint venture arrangements include co-operation and joint ventures.
The joint venture arrangement unreached by individual entity is divided into common business; joint venture arrangement reached by individual entity usually classified as a joint venture; but there is conclusive evidence that any of the following conditions are satisfied and the division of joint venture arrangements in line with the relevant laws and regulations for the common business:
(1)The legal form of a joint venture arrangement shows that the joint venture party have rights and bear obligations in respect of the relevant assets and liabilities.
(2)Contractual terms of the JV agreement arrangements agrees that the joint venture party have rights and bear obligations in respect of the relevant assets and liabilities.
(3)Other relevant facts and circumstances indicate that the joint venture party have rights and bear obligations in respect of the relevant assets and liabilities.
If joint venture parties enjoy almost all outputs associated with the joint venture arrangements, and the settle of the liability arrangement continued reliance on joint venture the joint venture party support.
B. Accounting treatment of the joint operation
The Company confirms that the following items share a common interest in the business associated with the Company, and audit in accordance with the provisions of the relevant enterprise accounting standards:
(1)Confirm individual assets and common assets held based on shareholdings;
(2)Confirm individual liabilities and shared liabilities held based on shareholdings;
(3)Confirm the income from the sales revenue of co-operate business output
(4)Confirm the income from the sales of the co-operate business output based on shareholdings; (5)Confirm the individual expenditure and co-operate business cost based on shareholdings.
The company co-operates to invest or sell assets (excluding the assets constituting the business), before sold to third party, only confirm the part of transaction gains and losses that attributable to other participants. Assets sold in accordance with "Enterprise Accounting Standards No. 8 Impairment of Assets" and other provisions, the Company confirmed all the loss.
The company co-operates to purchase assets (excluding the assets constituting the business), before sold to third party, only confirm the part of transaction gains and losses that attributable to other participants. Assets acquired in accordance with "Enterprise Accounting Standards No. 8 Impairment of Assets" and other provisions, the Company confirmed that part of loss based on shareholdings.
The Company is not entitled to jointly controlled, if the Company co-operate the relevant assets and bear related liabilities, need accounting treatment based upon the above principles.
Otherwise, should be accounted in accordance with the relevant provisions of accounting standards.
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 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 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 theowners‘ 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.
(2) Recognition and providing basis of bad debt reserves for group of receivable accounts with similar characteristics of credit risks
①Basis of recognition and providing of bad debt provision
Basis of recognition for groups
Group of inner units Accounts receivable due from subsidiaries included in consolidated scope
Group by age analysis With similar characteristics of credit risks
Basis of bad debt provision
Group of inner units Individual identified method
Group by age analysis Age analysis method
②Age analysis
Provision rates for Provision rates for
Ages
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.
13. Classified as the assets held for sale
A. Recognition criteria for the classification of the assets held for sale
The company will recognize the combination parts of the enterprise (or non-current assets) which simultaneously meet the following requirements, as the components of the assets held for sale.
(1) The components should be immediately sold under the current condition only according to the usual terms of the parts sold.
(2) The enterprise has made resolution for the disposal of the components, the approval of
shareholders‘ meeting or relevant authority agency if theshareholder‘s approval is requested by the rules.
(3) The enterprise has signed the irrevocable transfer agreement with the transferee.
(4) The transfer shall be completed within one year.
B. Accounting method for the classification of the assets held for sale
For the fixed assets held for sale, the company shall adjust the estimated net residual value of the fixed assets in order to make it reflecting the amount after the disposal costs deducted from the fair value, whichdoesn‘t exceed the original book value of the fixed assets when the condition of holding for sale is met. The impairment losses of the assets shall be regarded and recorded into the current profits and losses if the original book value is more than the balance of the estimated net residual value after adjusting. The fixed assets held for sale which not withdraw the depreciation or amortization shall be measured according to the lesser one between the balances of the book value or the fair value minus the disposal costs respectively.
The equity investment, intangible assets and other non-current assets held for sale shall be handled as per above mentioned principles, but excluding the deferred income tax assets, the financial assets regulated in―Accounting Standards for Enterprises No.22– Recognition and Measurement of FinancialInstruments‖, the investment property and the biological assets measured by the fair value, and the contractual right issued in the insurance contract.
14. Long-term equity investment
A. Investment cost confirmation
(1) For the long term equity investment from enterprise merger, the detailed accounting policy, please refer to the accounting method of merger of enterprises under or not under the same controller in Note IV / (V). While, the long term equity investment acquired through liability reorganization is booked on the basis of fair value.
(2) The long-term equity investments acquired by other ways
For the long-term equity investment acquired by the cash payment method, the purchase price of actual payment as the initial investment cost, which includes costs, taxes and other necessary expenses directly relevant to the long-term equity investment acquired.
For the long-term equity investment acquired by the issuance of the equity securities, the fair value of the issuance of the equity securities as the initial investment cost. The transaction costs occurred in the issuance or acquirement of own equity instruments can be deducted from the equity for those that can be directly included in the equity transactions.
The non-monetary asset exchange for a commercial real income and assets or the fair value other assets can be reliably measured, the initial investment cost should be determined according to long- term equity investment exchanged through the non-monetary asset exchange, unless there is evidence showing that for the fair value of assets is more reliable; the non-monetary asset exchange which does not meet the above premises, the book value of the exchanged assets to and the relevant fees and taxes to be paid should be the initial investment cost of the long-term equity investment. The initial investment cost of the long-term equity investments obtained through debt restructuring should be determined in accordance with fair value.
B. Follow-up measurements& recognitions of profits or losses
(1) Cost method
The company can adopt the cost method to account the long-term equity investment controlled by the invested party and follow the initial investment cost to calculate the price and add or take back the investment and adjust the costs of long-term equity investment.
Except for the price of actual payment in acquiring investment or the cash dividends or profits declared but not issued yet included in the consideration, the company shall recognize the cash dividends or profits delivered by the invested party as the current investment returns.
(2) The equity method
The company shall adopt the equity method to account the long-term equity investment of the joint ventures and the cooperative enterprises, and use the measurement of the fair value and record the changes into the profits and losses for the parts of the equity investment of the joint ventures indirectly held by risk investment agency, mutual fund, trust company or other similar bodies including the investment-link-insurance funds.
For the initial investment cost of the long-term equity investment is more than the balance of the
shares of the fair value of the identifiable net assets from the invested party in investment, the initial
investment cost of the long-term equity investmentshouldn‘t be adjusted. If less, recorded into the current profits and losses.
The investment returns and other comprehensive incomes will be respectively recognized as per the shares of the net profits and losses and other comprehensive returns realized by those shared and undertaken invested parties after the company acquires the long-term equity investment, and the book value of long-term equity investment shall be adjusted simultaneously. Also, the shared parts shall be calculated according to the profits and cash dividends delivered by the invested party, and the book value of long-term equity investment shall be reduced correspondingly. For other changes inowner‘s equity of the invested parity except for net profits and losses, other comprehensive returns and profits distribution, the book value of long-term equity investment shall be adjusted and theowner‘s equity should be recorded into.
The shared portions of the net profits and losses of the invested party shall be recognized by the company after the net profits of the invested party are adjusted based on the fair value of the identifiable assets from the invested party when acquiring the investment. Also, the profits and losses of investment are recognized on the basis of the offset of the shared proportion for the internal transaction profits and losses issued but not realized yet between the company and the joint venture and the cooperation enterprises.
The following steps should be taken when the company confirms to share the losses of the invested party: First, offset the book value of the long-term equity investment. Then, offset the book value of the long-term receivables after recognize the investment losses based on the book value of long- term equity of the net investment from the invested party if the book value of the long-term equity investment is insufficient to offset. Last, recognize the estimated loads as per the estimated liability undertaken and record into the current investment losses if additional liability is still needed to undertake based on the provisions of investment contract or agreement after above-mentioned steps. For the profits realized by the invested party during the future period, the company shall handle based on the opposite steps after deducting the unconfirmed losses undertaken, and resume the recognized investment returns after reduce the confirmed book balance of estimated liabilities and resume other book values of long-term rights and investments of the net investment from the invested party.
C. Transformation of accounting method for the long-term equity investment
(1) The fair value measurement transformed to the equity method
For the equity investments originally held by the company and having non-control, joint control or major impact on the invested party through the accounting treatment as per the confirmation of financial instrument and the measurement criterion, which can have significant impact orhaven‘t control on the invested party due to the additional investment, the sum of the fair value of the equity investment originally held and the new investment costs based on the recognition of―Accounting Standards for Enterprises No.22– Recognition and Measurement of FinancialInstruments‖ shall be regarded as the initial investment costs accounted by the equity method.
If the equity investment held originally can be classified as the financial assets for sale, the difference between the fair value and the book value, and the variation in the accumulative fair value of other comprehensive returns recorded originally will be transferred into the current profits and losses accounted by the equity method.
If the initial investment costs accounted by the equity method is less than the difference between the portions of the fair value of the identifiable net assets shared from the invested party on the additional investment date calculated and recognized as per the new shareholding proportion after the additional investment, the book value of long-term equity investment should be adjusted and which shall be recorded into the current nonbusiness incomes.
(2) The fair value measurement or the equity method transformed to the cost method
For the equity investments originally held by the company and having non-control, joint control or major impact on the invested party through the accounting treatment as per the confirmation of financial instrument and the measurement criterion, or the long-term equity investments in the joint ventures and the cooperative enterprises held originally, which can have control on the invested party under non-common control due to the additional investment, the sum of the book value of the equity investment originally held and the new investment costs in preparation of individual financial statement shall be regarded as the initial investment costs accounted by the cost method.
Other comprehensive returns accounted and recognized for the equity investment held prior to the purchase date by adopting the equity method, should be conducted the accounting treatment
according to the same basis of relevant assets or liabilities directly disposed by the invested party.
If the equity investment held before the purchase date is conducted the accounting treatment according to the relevant provisions of―Accounting Standards for Enterprises No.22– Recognition and Measurement of FinancialInstruments‖, the variation in the accumulative fair value of other comprehensive returns recorded originally shall be transferred to the current profits and losses accounted by the cost method.
(3) The equity method transformed to the fair value measurement
If the company loses the joint control or major impact on the invested party due to disposal of part of equity investments, the remaining equity after disposed should be accounted according to―Accounting Standards for Business Enterprises No.22– Recognition and Measurement of FinancialInstruments‖, and the balance between the fair value and the book value shall be recorded into the current profits and losses on the date of joint control or major impact lost.
Other comprehensive returns accounted and recognized for the original equity investment by adopting the equity method, should be conducted the accounting treatment according to the same basis of relevant assets or liabilities directly disposed by the invested party when stop to account by the equity method.
(4) The cost method transforming to the equity method
If the company loses the control of the invested party due to disposal of part of equity investments, and the remaining equity after disposed can have joint control or major impact on the invested party in preparation of individual financial statement, the equity method shall be adopted to conduct accounting and the remaining equity shall be regarded to use the equity method to account and adjust when acquiring.
(5) The cost method transforming to the fair value measurement
If the company loses the control of the invested party due to disposal of part of equity investments, and the remaining equity after disposedcan‘t have joint control or major impact on the invested party in preparation of individual financial statement, the relevant provisions of―Accounting Standards for Enterprises No.22– Recognition and Measurement of FinancialInstruments‖ should be followed to conduct the accounting treatment, and the balance between the fair value and the book value shall be recorded into the current profits and losses on the date of control lost.
D. Disposal of the long-term equity investment
The difference between the book value and the price acquired actually in disposal of the long-term equity investment should be recorded into the current profits and losses. The long-term equity investment accounted by the equity method shall be conducted the accounting treatment of part of other original comprehensive returns as per the corresponding proportion on the same basis of the relevant assets or liabilities directly disposed by the invested party when the disposal of the investment.
If the following one or multiply requirements are met for all transaction terms, conditions and economic impact in disposal of the equity investment of subsidiary, the multiply transactions will be regarded as the package deal to conduct the accounting treatment:
(1) These transactions are signed simultaneously or after the consideration of the influence each other.
(2) These transactions should be as a whole to achieve a complete business result.
(3) One transaction occurs depending on the issuance of at least other one transaction.
(4) It is uneconomic for one transaction, but economic with other transactions.
For the control on the original subsidiary lost due to disposal of part of the equity investment or other reasons and the non-package deal, the relevant accounting treatment should be respectively conducted for the individual financial statement and the consolidated financial statements:
(1) In the individual financial statement, the difference between the book value and the price acquired actually in disposal of the equity shall be recorded into the current profits and losses. If the remaining equity after disposed can have joint control or major impact on the invested party, the equity method shall be adopted to conduct accounting and the remaining equity shall be regarded to use the equity method to account and adjust when acquiring. If the remaining equity after disposedcan‘t have joint control or major impact on the invested party, the relevant provisions of―Accounting Standards for Enterprises No.22– Recognition and Measurement of FinancialInstruments‖ should be followed to conduct the accounting treatment, and the balance between the fair value and the book value shall be recorded into the current profits and losses on the date of control lost.
(2) In the consolidated financial statements, for all the transactions before the control on subsidiary
lost, and the balance between the disposal price and the long-term equity investment respectively
minus the net assets from the purchase date or the combination date of subsidiary, the capital reserves (stock premium) shall be adjusted, or the retained earnings shall be adjusted when the capital reserves are insufficient. When the control on the subsidiary lost, the remaining equity should be measured again according to the fair value on the control lost date. The difference of the consideration acquired by the disposal of equity and the fair value of the surplus equity minus the net assets portion of the original subsidiary calculated from the purchase date a per the original stock proportion shall be recorded into the current investment income after the control lost and offset the business reputation. Other comprehensive returns relevant to the original subsidiary shares investment shall be transferred into the current investment returns when the control lost.
For the package deal for all the transactions in disposal of the equity investment till the control lost, all the transactions will be conducted the accounting treatment as a deal to dispose and the relevant accounting treatment should be respectively conducted for the individual financial statement and the consolidated financial statements:
(1) In the individual financial statement, all the differences between the book value of the long-term equity investment of the prices disposed and the equity disposed before the control lost shall be recognized as other comprehensive incomes and recorded into the current profits and losses in the control lost.
(2) In consolidated financial statement, all the differences between the net assets portions of subsidiary of the prices disposed and the investment disposed before the control lost shall be recognized as other comprehensive incomes and recorded into the current profits and losses in the control lost.
E. Criteria of the judgment of joint control and significant impact
If the company controls an arrangement together with other parties according to the relevant agreement, the activity decision-making with significant impact for the arrangement should be achieved after the unanimous agreement gained from the control parties, which is regarded as the joint control of one arrangement with other parties and the arrangement is belong to the cooperative arrangement.
The cooperative arrangement achieved by the independent body which should be as the cooperative enterprises and the equity method shall be adopted to account according to the relevant agreement to judge when the company has rights to the net assets of the independent body. Ifhasn‘t rights, the independent body shall be as the joint operation, the company shall recognize the items related to the benefit portions of joint operation and the accounting treatment should be conducted according to the relevant provisions of accounting standards for enterprises.
The significant impact refers to the investor has rights to participate in decision-making for the finance and operation policy of the invested party, butcan‘t control or jointly control the setup of these policies with other parties. The company has made judgment of significant impact on the invested party through the following one or multiply conditions and under comprehensive consideration of all facts and status.
(1) There are representatives in the board of Directors or equivalent authorities of the invested party. (2) Participate in the setup process of finance and operation policies of the invested party.
(3) There is major transactions occurred among the invested parties.
(4) Dispatch the management to the invested party.
(5) Offer the key technical data to the invested party.
15. Investment real estates
The term Investment real estates refers to the real estates held for generating rentand/orcapital appreciation, including the right to use any land which has already been rented, the right to use any land which is held and prepared for transfer after appreciation& the right to use any building which has already been rented.
The investment real estates are accounted by the cost, the purchased investment real estates include the cost of the purchase price, related taxes and fees and other expenses which can be directly attributable to the assets; the costs of investment real estate self constructed include the necessary expenses to construct the asset to reach the predicted use state.
The Group adopts the cost method to conduct follow-up measurement on investment real estates are accounted devaluations and amortized. The expected service life, net residual rate and value depreciation rates of investment real estate are the same with fixed assets or intangible assets.
If the investment real estate is changed to self use, since the date of change, investment real estate
shall be converted into fixed assets or intangible assets. The function of self-use real estate is to earn
rent or capital appreciation, then since the date of change, the fixed assets or intangible assets shall be converted into investment real estate. When the conversion happens, the book value before the conversion will be the book value after the conversion.
When the investment real estate is disposed of, or permanently terminates its use and no economic benefits are expected from its disposal, terminate the confirmation of the investment real estate. Disposal income of investment property for sale, transfer, disposal of scrap or being destroyed is charged to current profit or loss after deducting its book value and related taxes.
16. Fixed assets
(1) Confirmation conditions
Fixed assets refer to physical assets owned for purpose of production, service providing, leasing or management, and operation with service life of more than one year. Fixed assets are recognized when all of the following conditions aresatisfied：a. Financial benefits attached to the fixed asset is possibly inflowing to the Company; b. The cost of the fixed asset can be reliable measured.
(2)The initially measurement of fixed assets
The fixed assets of the company shall be initially measured by costs. Of which, the fixed assets costs purchased include purchase price, import duties, other relevant taxes and other expenses that make the fixed assets can be used. The costs of self-constructed fixed assets are the expenses arisen from the construction of the assets reaching the expected use status. The fixed assets invested by the investors shall be recorded into the accounting value according to the value agreed in the investment contract or agreement, but the unfair value agreed in the contract or agreement shall be bookkept as per the fair value. If the price for purchase of the fixed assets is beyond the usual credit term and delay in payment, and there actually is financial, the cost of fixed assets shall be recognized based on the present value of purchase price. The difference between the price paid actually and the present value of purchase price shall be recorded into the current profits and losses within the credit period except for the capitalization granted.
(3) The subsequent expenditure and disposal of fixed assets
a. Deprecation method of fixed assets
The fixed assets depreciation should be withdrawn within the expected service life according to the recorded value minus the estimated net residual value. For the fixed assets after the impairment provision withdrawn, the amount of depreciation shall be recognized according to the book value after the impairment provision deducted and the usable service life in the future. The company determines the service life and the estimated net residual value of the fixed assets according to the nature and use of the fixed assets, reviews the service life, the estimated net residual value and depreciation method of the fixed assets at the end of the year, and makes the corresponding adjustment if it is different to the original estimated value.
Depreciation is calculated using the straight-line method to allocate their cost to their residual values over their estimated useful lives, as follows:
Expected residual value
Fixed assets Estimated lifetime Annual depreciation rates
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 year 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%
b. The subsequent expenditure of the fixed assets
The subsequent expenditure relevant to the fixed assets shall be recorded into the costs of the fixed assets if the recognition requirements of the fixed assets are met. If not met, recorded into the current profits and losses when occurring.
c. The disposal of the fixed assets
The fixed assets shall be derecognized when the assets are disposed and can be used or there is no economic benefit from the disposal. The amount of the book value and the relevant taxes deducted from the disposal incomes of the fixed assets sold, transferred, scraped or damaged.
(4) Cognizance evidence and pricing method of financial leasing fixed assets
The fixed assets acquired by the company in line with the following one or several criteria shall
be recognized as the fixed assets acquired under finance leases: (1) at the expiration of the lease,
the ownership of the leased assets shall be transferred to the company. (2) the company has the option to purchase the leased assets, the purchase price is expected be far lower than the fair value of the leased assets under the implementation of option right, so that it can be reasonably determined that the company shall exercise the option on the acquisition date. (3) the lease term is the majority for the leased assets even if the ownership no transferred. (4) the present value of the minimum lease payments of the company almost is equal to the fair value of the leased assets on the acquisition date. (5) For the special nature of the leased assets, only the company can use if no major modification made.
For the fixed assets acquired under finance leases, the company takes less of the fair value of the leased asset on the acquisition date and the present value of the minimum lease payments as recorded value. Also, the minimum lease payments are accounted as the recorded value for the long-term payables, and the difference are as the unconfirmed financing fees. The initial direct expenses, such as commission charge, attorney fees, travel expenses and stamp duty attributable to the lease item occurred in the process of the lease negotiation and the signature of lease contract, shall be recorded into the leased assets value. The unrecognized financing charges in each period during the lease term are amortized by effective interest method.
The company adopts the depreciation policy in line with its own fixed assets to count and draw the depreciation of fixed assets acquired under finance leases. If the ownership of lease assets acquired at the expiration of lease can be reasonably confirmed, the depreciation will be recognized in the use life of lease assets. Ifcan‘t be confirmed, the shorter period between the lease term and the use life of lease assets will be recognized as the depreciation.
17. Construction-in-progress
(1) Categories of projects under construction
The company shall measure the self-constructed constructions in progress at the actual cost, which comprises those expenditures necessarily incurred for bringing the asset to working condition for its intended use, including materials costs, labor costs, relevant taxes paid, capitalized loans, indirect expense for apportion, etc.. The constructions in progress of the company should be accounted by the project classification.
(2)Standard and timing for transferring of projects under construction to fixed assets
All the expenditures that bring the construction in process to the expected condition for use shall be the credit value of the fixed asset. If the fixed asset construction in process has already reached the expected condition for use, buthasn‘t been made the final account; it shall be carried forward to a fixed asset according to its estimated value based on the budget, cost or actual cost of the construction starting from the date when it reaches the expected condition for use, and the fixed asset shall be depreciated according to thecompany‘s depreciation policy for fixed assets. After the final account has been made, the original provisional estimated value shall be adjusted according to the actual cost, but the depreciation which has originally been counted& drawn shall not be adjusted.
18. Loan expenses
(1)Recognition principles for capitalizing of loan expenses
Borrowing expenses occurred to the Company that can be accounted as purchasing or production of asset satisfying the conditions of capitalizing, are capitalized and accounted as cost of related asset. Other borrowing expenses are recognized as expenses according to the occurred amount, and accounted into gain/loss of current term.
The assets meeting capital conditions refer to the fixed assets, investment real estates and inventories which are constructed or produced in a long time to reach the predicted use or sale state.
When a loan expense satisfies all of the following conditions, it is capitalized: a. Expenditures on assets have taken place, asset expenditures include the assets used to construct or produce the assets which meet the capitalization conditions, and expend by cash or transferring non- cash assets or bearing interest debt; b. Loan costs have taken place; c. The construction or production activities to make assets to reach the intended use or sale of state have begun.
(2) Duration of capitalization of Loan costs
The capitalization period refers to the period from starting capitalization of loan costs to the
stop of capitalization, the period of the break of capitalization of Loan costs is not included.
When the construction or production meets the intended use or sale of state of capitalization conditions, the Loan costs should stop capitalization. When the construction or production meets the conditions of capitalization and can be used individually, the capitalization of the loan costs of the assets should be stopped.
Where each part of a asset under acquisition and construction or production is completed separately and is ready for use or sale during the continuing construction of other parts, but it can not be used or sold until the asset is entirely completed, the capitalization of the borrowing costs shall be ceased when the asset is completed entirely.
(3) Capitalization Suspension Period
Where the acquisition and construction or production of a qualified asset is interrupted abnormally and the interruption period lasts for more than 3 months, the capitalization of the borrowing costs shall be suspended. If the interruption is a necessary step for making the qualified asset under acquisition and construction or production ready for the intended use or sale, the capitalization of the borrowing costs shall continue. The borrowing costs incurred during such period shall be recorded into the profits& losses at the current period, till the acquisition and construction or production of the asset restarts.
(4)Calculation of the amount of capitalization of Loan costs
Interest expense due to specialized Loan and its auxiliary expenses shall be capitalized before the asset which satisfies the capitalizing conditions reaches its useable or saleable status.
Interest amount of common Loan to be capitalized equals to accumulated asset expense less weighted average of specialized loan part of asset expense multiplies capitalizing rate of common Loan occupied. Capitalizing rate is determined according to weighted average interest of common Loan.
If the Loan has discount or premium, the discount or premium amount should be determined
according to actual interests in each accounting period. The interest amount should be adjusted in each period.
19.Intangible assets andR&D expenses
The intangible assets refer to the identifiable non-monetary assets without physical substance owned or controlled by the company, including software, land use rights, knowhow and etc.
(1)The initial measurement of intangible assets
The cost of the purchased intangible assets includes its buying price, relevant tax and the othe expenses that are directly attributed to this assets meeting its predetermined objective and other expenses that occur. The buying price of intangible assets is over the deferred payment under normal credit conditions, which has the nature of financing materially, the cost of intangible assets is determined on the basis of the present value of its buying price.
We acquire the mortgaged intangible assets from debtors through debt restructuring and determine the entry value on the basis of the fair value of the intangible assets,we have the balance between the book value of debt restructuring and the fair value of intangible assets used for mortgage charged to the current profit and loss.
The entry value of the non-monetary assets exchanged into by the non-monetary assets are determined on the basis of the fair value of the assets exchanged out if the exchange of non- monetary assets has commercial nature and the assets exchanged into or out can be reliably measured, unless there is authentic evidence indicating that the fair value of assets exchanged into are more reliable; if the non-monetary assets that cannot meet the above prerequisite use the book value of the assets exchanged out and relevant taxes payable as the cost of the non-monetary assets, the profit and loss is not confirmed.
The entry value of the intangible assets acquired by the absorption merger under the control of one company is determined by the book value of the merged party; the entry value of the intangible assets acquired by the absorption merger that is not under the control of one company is determined by the fair value.
The cost of the intangible assets developed internally includes the materials consumed in developing the assets, cost of service, registration fees, other patent used in developing, amortization of concession and interest charges meeting the capitalization conditions and othe direct costs that occur before the intangible assets meeting the predetermined objective.
(2)Subsequent measurement
The Company acquired intangible assets at the time of analysis to determine its life, is divided into a finite useful life and intangible assets with indefinite useful life.
a. The intangible assets that have limited serviceable life are amortized by the straight-line method during the period when the assets can bring about economic interests. The details are as follow:
Items Useful life Judging by
Land use rights 50 years Purchase contract
Software 5-10 years Predicted useful life
b. 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.
(3) The specific standards of the classification of research and development stages of internalR&D projects of the company
Research stage: the stage of the creative and planned investigation and research activities that is to acquire and understand new scientific or technological knowledge.
Development stage: the stage that the research achievement or other knowledge are applied in some plans or designs for the production of newly or substantially improved materials, devices, products and other activities before the commercial production or usage.
The expenditure of internal research and development projects in the research stage shall be recorded into the current profits and losses when occurring.
(4) The special standards of the conformation of capitalization for the expenditure in development stage
The expenditures of internal research and development projects in the development stage shall be recognized as the intangible assets when the following requirements are simultaneously met:
a. Complete the intangible assets to make it usable or for sale and have the technical feasibility.
b. Have the intention to complete the intangible assets for using or sales.
c. The mode for the economic interest produced by the intangible assets includes the evidence of there being the market for the products produced by the intangible assets or for the intangible assets by self, and the usefulness for the assets used internal.
d. There are sufficient technical, financial resources and other resources for support to complete the development of the intangible assets and there is ability to use or sell the intangible assets.
e. The expenditure belong to the intangible assets in the development stage can be reliably measured. The expenditure in the development stage but above-mentioned requirements not met, shall be recorded into the current profits and losses when occurring. The development expenses
recorded into the profits and losses during previous period shall not be recognized again in the future period. The capitalized expenses in the development stage are shown as the development costs on the balance sheet, and shall be transferred to the intangible assets from the date that the project reaching to the intended use.
20. 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 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.
21. Long-term amortizable expenses
The long-term amortizable expense refers to all the expenses that occurred and undertaken in the current period or with the amortization limit of more than 1 year for the company. The long-term amortizable expense shall be amortized within the benefit period according to the direct method. The details are as follow:
Items Amortized years Notes
Rental expenses 30 years
Decoration expenses and etc. 3 years
22. Payroll
The payroll means that the enterprise gives various remunerations for obtaining services providing by the employees or other relevant expenses. It includes the short-term compensation, the welfare after demission, the demission welfare and the welfare of the long-term employees.
(1)The short-term compensation
Employee compensation refers to the reward or compensation of various modes provided by the Company which wants to receive the service offering by the employees or to execute the release of the labor relationship. The employee compensation including the short-term salary, departure benefits, demission benefits and other long-term employee benefits.
The short-term compensation actually happened during the accounting period when the active staff offering the
service for the Company should be recognized as liabilities and is included in the current gains and losses or relevant assets cost.
(2)The welfare after demission
The Company divides the departure benefits plan into defined contribution plans and defined benefit plans. Benefits plan of after demission refer to the agreement between the Company and employees on the departure benefits, or the regulations or methods formulated by the Company for providing welfares after demission for the employees. Of which, defined contribution plans refers to the departure benefits plan that the Company no more undertake the further payment obligations after the payment and deposit of the fixed expenses for the independent funds; defined benefit plans refers to the departure benefits plan except for the defined contribution plans.
A. Defined contribution plans
During the accounting period when providing the service for the employees, the Company will
recognize the deposited amount as the liabilities which measured by defined contribution plans and
include in the current gains and losses or the relevant assets cost.
B. Defined benefit plans
Other long-term employee benefits the Company had not executed the defined contribution plans or met with the conditions of defined benefit plans.
(3)The demission welfare
When the Company is unable to unilaterally withdraw the plan on the cancellation of labor relationship or the layoff proposal, or when recognizing the costs or expenses related to the reorganization of paying the demission welfare, should recognize the payroll liabilities from the demission welfare and include in the current gains and losses.
(4)The welfare of the long-term employees
The Company provides the other long-term employee benefit for the employees, and for those met with the defined contribution plans, should be disposed according to the above accounting polices of the defined contribution plans; the others except for the former, should be recognized according to above accounting polices of the defined benefit plans and measure the net liabilities or net assets of other long-term employee benefits.
23. Measurement method of estimated debts
(1) Recognition of estimated liabilities
a. The obligation pertinent to contingencies shall be recognized as estimated debts when the following conditions are satisfied simultaneously:
That obligation is a current obligation of the enterprise;
b. It is likely to cause any economic benefit to flow out of the enterprise as a result of performance of the obligation;
c. 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. (2) Accounting of estimated liabilities
Estimated liabilities shall be conducted initial measurement according to the best estimates of related existing liabilities, when the company recognizes the optimum estimation, it shall be in overall consideration of risks, uncertainty and time value of currency and other factors related to contingent matters. When the influence of time value of money is significant, the optimum estimates shall be determined by discounting relevant future cash outflow
The optimum estimates are conducted as follows:
If there is a continuous range (or area) for the necessary expenses and the same result possibility within the range, the optimum estimate is recognized according to the middle value, namely the average of upper limit and lower limit of amount within the range.
If there no exits a continuous range (or area) for the necessary expenses or the different result possibility within the range even if there is a continuous range, and if there are contingent matters related to individual item, the optimum estimate is recognized according to the amount that has most possibility to occur. If there are contingent matters involving multiple items, the optimum estimate is counted and confirmed as per all the possible results and associated probabilities.
It can be recognized separately as assets when estimated liabilities are paid by the company but can be fully or partly compensated by a third party and the compensation mostly sure can be received, which does not exceed the book value of estimated liabilities.
24. Share-based compensation
(1)Share-based compensation types
Share-based compensation divides into equity settlement and cash settlement.
(2) Determining methods for fair value of equity instruments
The fair value of equity instruments such as options granted and existing in the active market can be determined by reference to the quotations in the active market. Otherwise, it is determined by option pricing model, which should take into account the following factors: a. exercise prices of options;b. validity of options; c. current prices of underlying shares; d. estimated volatility of share prices; e. estimated dividends; f. risk-free interest rate of options within validity.
When determining the equity instruments fair value of the granted date, the company considers the
impact of the market conditions and non-vesting conditions as specified in Share-based
compensation agreements. If there are non-vesting conditions and employees or any other parties satisfy all non-market vesting conditions (for example, service period), Share-based compensation can be recognized as costs and expenses for received services.
(3)Basis of best exercisable equity instruments estimate
Every balance sheet day during the vesting period, the company makes best estimate according to the most updated number of employees that are eligible to exercise their options and adjusts the quantity of exercisable equity instruments. On vesting dates, the final estimated quantity of exercisable equity instruments is consistent with the actual exercisable quantity.
(4)Accounting treatment for implementation, amendment and termination of share-based compensation
Share-based compensation by equity settlement is calculated according to the fair value of granted equity instruments. The Company can count it in costs and expenses by reference to the fair value of the granted date and increase capital reserve accordingly if it can be exercised immediately after being granted. If it cannot be exercised till services or performance meets the conditions during the vesting period, then on every balance sheet date during the vesting period, received services can be counted in related costs or expenses and capital reserve by reference to best estimates of exercisable equity instruments quantity and its fair value of the granted date. No adjustments will be made on already recognized costs or expenses and ownership equity after vesting dates.
For share-based compensation by cash settlement, the fair value is measured by reference to that of the liabilities determined based the shares or other equity instruments the company undertakes. The company can count it as costs and expenses by reference to the fair value of the granted date and increase liabilities accordingly if it can be exercised immediately after being granted. If it cannot be exercised till services or performance meets the conditions during the vesting period, then on every balance sheet date during the vesting period, received services can be counted in related costs or expenses and liabilities by reference to best estimates of exercisable equity instruments quantity and the fair value of the liabilities the company undertakes. On every balance sheet date and settlement date before the related liabilities are cleared, the fair value is re-calculated and the changes are counted in current profit and loss.
(5) Equity instruments changes and accounting treatment
If the granted equity instruments are cancelled during the vesting period, the company treats it as accelerated vesting and counts in current profit and loss the amounts that should be
recognized during the rest vesting period and recognizes capital reserve accordingly at the same time. If employees or other parties can choose but fail to satisfy non-vesting conditions during the vesting period, the Company sees this as cancellation of granted equity instruments.
25. 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) Labor revenues
When the results of the transaction of the company could be reliable estimated (that is the total revenues and the total costs of labor service could be reliable measured and the completion degree of the labor service could be reliable with the relevant price accounts could flow in), the company would recognized the realization of the revenues on the settlement date according to the completion percentage method. When the results of the transaction of the company could not be reliable estimated, the company should recognized the revenues on the settlement date acc company ording to the labor service cost amount which had occurred and be estimated that could be compensated and include the happened cost in the current gains and losses.
(4)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.
(5) Assets transfers with buy-back conditions
If the company signs buy-back agreement with the purchase party when selling products or transferring other assets, it should make a judgment whether the product sale satisfies revenue recognition conditions. As buy-back after sale is financing transaction, the company does not recognize sales revenue when delivering products or assets. During buy-back, interests are put aside and counted in financial expenses based on the differences between buy-back and sales prices.
26. 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.
27. Deferred income tax assets/Deferred income tax liability
Deferred income tax assets and liabilities are calculated and recognized according to the differences (temporary differences) between the taxation base of assets and liabilities and the book value. As at balance sheet dates, both are calculated at applicable tax rates during the period it is anticipated to take the assets back or clear the liabilities.
(1) References for confirmation of deferred income tax assets
The Company recognizes the deferred tax income assets arising from deductible temporary differences to the limit of the deductible losses and taxable income that it probably would achieve to reduce deductible temporary differences and carry forward. However, it does not recognize those arising from the initial measurements of assets or liabilities in the following transactions. a.Transactions are not business merge; b. It neither affects the accounting profit nor taxable income or deductible losses while transactions being made.
For the deductible temporary differences related to the investments by associated enterprises, which meet the following conditions, deferred tax assets should be recognized accordingly: the temporary differences are probable to revert in the foreseeable future and it is very likely to achieve taxable income to deduct such differences.
(2)The confirmation basis of deferred income tax liabilities
The Company recognizes the payable but not paid yet taxable temporary differences of current or prior periods as deferred tax liabilities, which exclude the following:
a. The temporary differences that are formed at initial measurement of goodwill;
b. Non-business merge transactions or events that neither affect accounting profits nor the temporary differences arising from taxable income (or deductible losses);
c. The taxable temporary differences related to the investments by the subsidiaries and associated enterprises, which can revert in a controllable timing but will not revert in the foreseeable future.
28.Lease
(1) Accounting of operational leasing
a. The leasing fees paid for the leased assets by the company shall be recorded as the current expense according to the straight-line method in the whole lease term not excluding the rent free period. The initially direct expense related to the lease transactions paid by the company shall be recognized as the current expense.
When the assets lessor has assumed the lease-related expenses which should be borne by the company, the company shall deduct these expenses from the total amount of rent, amortize in the lease term according to the rents after deducted and record as the current expenses.
b. The leasing fees received for the leased assets by the company shall be recognized as the lease income according to the straight-line method in the whole lease term not excluding the rent free period. The initially direct expense related to the lease transactions paid by the company shall be recognized as the current expense. For a large of amount, it will be capitalized and recorded as the current revenue based on the same confirmation of lease income during the whole lease period.
When the company has assumed the lease-related expenses which should be borne by the lessee, the company shall deduct these expenses from the total amount of rent and amortize in the lease term according to the rents after deducted.
(2) Accounting Method for Financing Leases
a. The assets acquired under financing leases: the lower value between the fair value of leased assets and the present value of the minimum lease payments is recognized as the recorded value, the minimum lease payments are recognized as the recorded value of long-term payables, and the difference is recognized as unrecognized finance expense at the inception of the lease.
The company shall adopt the effective interest method to amortize and record as the financial costs during the assets lease term.
b. Finance leased assets: the company inception of the lease, the finance lease receivables, the difference between the present value and the residual value of its unsecured recognized as unrealized financing income recognized in the respective period of future lease rental income received, initial direct costs related to the transaction with the rental companies, and included in the initial measurement of the finance lease receivable and reduce the amount of revenue recognized over the lease term.
29. Changes in significant accounting policies and estimates
(1) Change of main accounting policies
Not applicable.
(2) Change of main accounting estimations
Not applicable.
VI. 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)The parentcompany‘s income tax was measured at15%.
(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 are as follows:
Relationship with Applicable income
Names of the entities the Company tax rate in 2015
Dalian Bingshan Group Refrigeration Installation Co., Ltd.
Subsidiary 25%
Dalian Binshan Group Sales Co., Ltd.,
Subsidiary 25%
Dalian Bingshan Metal Processing Co. Ltd.
Subsidiary 25%
Dalian Bingshan Ryosetsu Quick Freezing Equipment Co., Ltd.
Subsidiary 25%
Dalian Bingshan Air-Conditioning Equipment Co. Ltd.
Subsidiary 25%
Dalian Bingshan Guardian Automation Co., Ltd.
Subsidiary 25%
Wuhan New World Refrigeration Industrial Co., Ltd.
Subsidiary 15%
The parent company was affirmed to be hi-tech enterprise by Dalian Municipal Bureau of Science and Technology, Dalian Municipal Bureau of Finance, the State Administration of Taxation Dalian Municipal Office and Dalian Local Taxation Bureau, and WNWRI was affirmed to be hi-tech enterprise by Wuhan Municipal Bureau of Science and Technology, Wuhan Municipal Bureau of Finance, the State Administration of Taxation Wuhan Municipal Office and Wuhan Local Taxation Bureau. Their applicable income tax rates were15% for 2014.
VII. Notes to the consolidated financial statements
1. Monetary fund
Items 30-06-2015 31-12-2014
Cash on hand 61,557.65 67,783.07 Cash in bank 330,029,689.29 457,395,413.41 Other monetary fund 34,920,526.90 51,048,269.54 Total 365,011,773.84 508,511,466.02 The restrained amount of monetary fund is shown as below.
Items 30-06-2015 31-12-2014
Deposit for bank acceptances 30,005,360.47 46,780,736.99 Deposit for letter of credit 2,860,552.55 Deposit for letter of guarantee 4,915,166.43 1,406,980.00 Cash in bank for warrant
Total 34,920,526.90 51,048,269.54 2. Notes receivable
Items 30-06-2015 31-12-2014
Bank acceptance 28,510,188.32 4,111,157.06 Trade acceptance 20,269,947.99 10,744,800.64 Total 48,780,136.31 14,855,957.70 (1) There is no pledged notes receivable at the end of the reporting period.
(2) The notes receivable endorsed but not matured at the end of the reporting period.
Items The derecognization amount Not derecognization amount
Bank acceptance 109,953,542.84
Total 109,953,542.84
(3) The reason of the ending balance of notes receivabledecreased228.35% compared with the beginning balance was the notes payment increased.
3. Accounts receivable
(1) Classification
30-06-2015
Balance Provision for doubtful debts
Categories
Book value Amount Proportion Amount Proportion
Bad debt provided on group
680,938,857.71 100.00% 114,228,837.40 16.78% 566,710,020.31 basis
Total 680,938,857.71 100.00% 114,228,837.40 16.78% 566,710,020.31 Continued:
31-12-2014
Balance Provision for doubtful debts
Categories
Book value Amount Proportion Amount Proportion
Bad debt provided on group
555,119,550.49 100.00% 116,238,720.37 20.94% 438,880,830.12 basis
Total 555,119,550.49 100.00% 116,238,720.37 20.94% 438,880,830.12 Accounts receivable which bad debt provisions are provided on age basis in the group
30-06-2015
Account ages
Amount Provision for bad debts Proportion rates
Within 1 year 448,748,434.71 22,437,421.71 5.00% 1 to 2 years 99,762,970.06 9,976,297.01 10.00% 2 to 3 years 49,338,636.27 14,801,590.88 30.00% 3 to 4 years 26,581,381.60 13,290,690.80 50.00% 4 to 5 years 13,922,990.37 11,138,392.30 80.00% Over 5 years 42,584,444.70 42,584,444.70 100.00% Total 680,938,857.71 114,228,837.40
(2) Provision for bad debts accrued, regain or switch back in the period
In the current period, RMB 1,923,170.15were accrued provision for bad debts, and RMB 61,453.00 were regained.
Receivable accounts written off before but regained during the current period:
Companies Received amount Regained form Notes
Keeping
Shandong Qi Long Chemical Co., Ltd. 38,000.00 Bank deposits
Collection
Keeping
Linan Fengye food Co., Ltd. 23,453.00 Bank deposits
Collection
Total 61,453.00
(3) Accounts receivable being written-off during the current period
Items Written off amount
38 Clients 3,994,506.12
The reasons of accounts receivable being written-off include termination of operation and
disability of payment, winning lawsuits but not finding executable assets, small balance being
not collected for long time, and disagreement rework charges etc, and the accounts receivable
being written-off during the current period was permitted by the board of directors.
(4) Top 5 on amount of accounts receivable
Proportion Provision for bad Companies Amount
(%) debts
Dalian Xinghai Bay Development and Construction
23,022,693.00 3.38 11,831,693.00 Management Centre
Beijing Huashang Bingshan Refrigeration Equipment
20,978,367.08 3.08 1,048,918.35 Co., Ltd.
Dalian Zhongyi Refrigeration Equipment Co., Ltd. 19,200,000.00 2.82 960,000.00 FAW Car Co., Ltd. 8,241,529.00 1.21 412,076.45
||
|-|
|Xu Zhou Yu Run Agricultural Products global|
|purchasing Co. Ltd.|

Total 79,642,589.08 11.69 14,662,687.80 4 .Advances to suppliers
(1) The aging of advances to suppliers
30-06-2015 31-12-2014
Account ages
Amount Proportion Amount Proportion Within 1 year 42,504,696.71 99.82% 18,897,672.41 99.18% 1 to 2 years 20,507.00 0.05% 121,597.34 0.64% 2 to 3 years 28,265.00 0.07% 6,000.00 0.03% 3 to 4 years 28,000.00 0.06% 28,000.00 0.15% Total 42,581,468.71 -- 19,053,269.75 --
The ending balance of account paid in advance increased123.49% over that of period-begin,
mainly because the amount for procurement paid in advance increased.
(2)Top 5 on amount of advances to suppliers
Proportion
Companies Amount Ages Reasons(%)
Prepayment for Dalian Bingshan Engineering& Trading Co. , Ltd. 5,921,284.85 13.91 2015
goods
||
|-|
|Dalian construction engineering labor insurance|
|management office finance payment account|

Hei Longjiang Da Zhou Refrigeration Equipment Co., Prepayment for 2,657,300.00 6.24 2015
Ltd.
goods Prepayment for Dalian Yida construction engineering Co., Ltd. 2,031,335.00 4.77 2015
goods State Grid Liaoning Electric Power Co., Ltd. Dalian Prepayment for 1,897,529.19 4.46 2015
Power Supply Company
goods Total 16,950,257.04 39.81
5. Interest receivable
Items 30-06-2015 31-12-2014
Interest on Term Deposits 2,491,608.34 4,998,982.40 Total 2,491,608.34 4,998,982.40 The ending balance of interest receivable decreased50.16% over that of period-begin, mainly
because the basis of deposit reduce, then the undue interest income declined
6. Dividends receivable
Names 30-06-2015 31-12-2014
Panasonic Compressor (Dalian) Co. , Ltd. 5,200,000.00
Panasonic Cold-Chain (Dalian) Co. , Ltd. 34,000,000.00
Total 39,200,000.00
The ending balance of dividend receivable increased larger over that of period-begin, mainly
due to the undue dividend receivable increased.
7. Other accounts receivable
(1) Classification
30-06-2015
Items Balance Provision for doubtful debts
Book value Amount Proportion Amount Proportion
Bad debt provided on group
45,706,963.73 100.00% 5,518,203.32 12.07% 40,188,760.41 basis
Total 45,706,963.73 100.00% 5,518,203.32 12.07% 40,188,760.41Continued：
31-12-2014
Items Balance Provision for doubtful debts
Book value Amount Proportion Amount Proportion
Bad debt provided on group
39,244,121.02 100.00% 4,977,677.00 12.68% 34,266,444.02 basis
Total 39,244,121.02 100.00% 4,977,677.00 12.68% 34,266,444.02 There is no major single amount and bad debt provision provided individually.
Other accounts receivable which bad debt provisions are provided on age basis in the group:
30-06-2015
Account ages
Amount Provision for bad debts Proportion rates
Within 1year 32,061,809.90 1,603,090.50 5.00% 1 to 2 years 9,143,496.96 914,349.70 10.00% 2 to 3 years 1,335,517.48 400,655.24 30.00% 3 to 4 years 770,260.44 385,130.22 50.00% 4 to 5 years 904,506.45 723,605.16 80.00% Over 5 years 1,491,372.50 1,491,372.50 100.00% Total 45,706,963.73 5,518,203.32
(2) Provision for bad debts accrued, regain or switch back in the period
In the current period, RMB 552,114.82 were accrued provision for bad debts, and no bad debts were regained.
(3) The write-off of other accounts receivable during the current year
Items Written off amounts
2 Clients 11,588.50
The write-off other accounts receivable was written off and the reason was not being collected for long time.
(4) The nature of other accounts receivable
Items 30-06-2015 31-12-2014
Guarantee deposits 28,489,385.64 25,442,507.63
Petty cash 9,426,310.54 4,758,015.42
To or fro accounts 3,591,846.32 3,954,641.30
Prepayments over settlement periods 3,557,444.96 4,047,765.86
Others 641,976.27 1,041,190.81
Total 45,706,963.73 39,244,121.02
(5) Top 5 on amount of other accounts receivable
Provision for Companies Contents Amount Ages Proportion
bad debts Dalian Tianbao Green Food Performance Less than 1
18,000,000.00 39.38% 900,000.00 Co., Ltd bonds year
Prepayments
Dalian Tianyi Info-
over settlement 1,779,500.00 1-2 years 3.89% 177,950.00 Technology Co., Ltd.
periods
||
|-|
|Jinzhou Dalian New District|
|organs and institutions of|
|financial accounting center|

Tianjin Construction Team
Guarantee
Communication Service 1,000,000.00 Over 5 years 2.19% 1,000,000.00 deposits
Center
Less than 1
Dalian Detai Town Gas China Deposits in
600,000.00 year，1-2 1.31% 80,000.00
Co., Ltd. security
years
Total 22,966,123.95 50.24% 2,260,432.37
8. Inventories
(1) Costs
30-06-2015 31-12-2014
Items
Provision for Provision for
Book balance impairment of Book value Book balance impairment of Book value inventories inventories
Raw materials 49,400,713.52 7,463,862.07 41,936,851.45 51,805,680.92 7,463,862.07 44,341,818.85 Materials on
consignment for further 2,208,539.66 2,208,539.66 2,394,839.67 2,394,839.67 processing
Low-value
34,525.65 34,525.65 81,422.57 81,422.57 consumptions
Work-in-progress 73,150,888.91 1,192,940.12 71,957,948.79 81,736,391.62 1,192,940.12 80,543,451.50 Self-manufactured
31,696,935.39 2,532,083.34 29,164,852.05 27,189,545.15 2,532,083.34 24,657,461.81 semi-finished products
Finished goods 113,388,913.49 2,884,241.52 110,504,671.97 124,845,367.55 2,884,241.52 121,961,126.03 Constructing projects 36,648,554.34 36,648,554.34 40,898,986.13 40,898,986.13 Total 306,529,070.96 14,073,127.05 292,455,943.91 328,952,233.61 14,073,127.05 314,879,106.56 (2) Provision for impairment of inventories
Current year addition Current year disposal
Items 31-12-2014 30-06-2015 Provision Others Reversal Written-off Others
Finished goods 2,884,241.52 2,884,241.52 Raw materials 7,463,862.07 7,463,862.07 Work-in-progress 1,192,940.12 1,192,940.12 Self-manufactured
2,532,083.34 2,532,083.34 semi-finished products
Total 14,073,127.05 14,073,127.05 The Company carried out impairment test for the inventory at period-end, in line with the
lower-of-book cost-or-net realizable value, there are no inventory falling price reserves need to be accrued in the Period.
9. Other current assets
Items 30-06-2015 31-12-2014
Enterprise income tax prepaid 641,717.78 1,400,309.96 Prepaid expenses 786,802.37 934,829.83 Total 1,428,520.15 2,335,139.79 The ending balance of other current assets decreased38.83% over that of period-begin, mainly because the advance payment of income tax are decreased in the Period
10. Available for sale financial assets
30-06-2015 31-12-2014
Items
Provision for Provision for
Book balance Book value Book balance Book value impairment impairment
Debt instruments
available for sale
Equity instruments
1,051,150,318.80 5,224,770.80 1,045,925,548.00 47,653,159.50 5,224,770.80 42,428,388.70 available for sale
Measured by fair
1,033,596,054.30 1,582,164.89 1,032,013,889.41
value
Measured by
17,554,264.50 3,642,605.91 13,911,658.59 47,653,159.50 5,224,770.80 42,428,388.70 cost
Others
Total 1,051,150,318.80 5,224,770.80 1,045,925,548.00 47,653,159.50 5,224,770.80 42,428,388.70 (1) Equity instruments available for sale measured by Fair value
|||||||
|-|-|-|-|-|-|
|||Equity t instruments||||
|Items|||Debt instruments||Total|
|||available for sale|available for sale|||
|Cost of Equity instrument/ amortized cost of debt instrument|30,098,895.00|||30,098,895.00||
|Fair value|1,033,596,054.30|||1,033,596,054.30||
|The total amount of fair value change in other comprehensive|852,972,585.40|||852,972,585.40||
|income||||||
|The amount of impairment|1,582,164.89|||1,582,164.89||
|Total|1,032,013,889.41|||1,032,013,889.41||

 (2) Equity instruments available for sale measured by cost at the end of current year
Book balance
Names Increased Decreased
Beginning Ending
during current during current Shareholding(%) balance balance
period period
Liaoning Mike Group Co., Ltd. 1,020,000.00 1,020,000.00 3.57 Guotai Junan Investment Management
3,057,316.00 3,057,316.00
0.22 Co., Ltd.
Thermo King Container Temperature
11,207,806.00 11,207,806.00
17.80 Control (Suzhou) Co., Ltd.
Wuhan Steel and Electric Co., Ltd. 1,315,142.50 1,315,142.50 0.06 Liaoning Enterprises United Industry
105,000.00 105,000.00
4.2 Company
Zibo Traction Motor Co., Ltd. 849,000.00 849,000.00 0.76 Total 17,554,264.50 17,554,264.50
Continued：
Provision for impairment
Cash Decreased dividends Names Increased
Beginning during Ending during the during current
balance current balance current period period
period
Liaoning Mike Group Co., Ltd. 310,000.00 Guotai Junan Investment Management Co., Ltd. 2,688,605.91 2,688,605.91
Thermo King Container Temperature Control
(Suzhou) Co., Ltd.
Wuhan Steel and Electric Co., Ltd.
Liaoning Enterprises United Industry Company 105,000.00 105,000.00
Zibo Traction Motor Co., Ltd. 849,000.00 849,000.00
Total 3,642,605.91 3,642,605.91 310,000.00 On 26 June 2015, Guotai Junan Securities Co., Ltd.(―GuotaiJunan‖ for short) listed on Shanghai Stock Exchange, stock code 601211; as for the 30,098,895 shares of Guotai Junan, the Company measured the shares on fair value.
11. Long-term equity investments
Increase/Decrease
Provision Beginning Gains and losses Adjustment Cash bonus or Provision for for Name Changes Ending balance balance recognized of other profits impairment of impairme Increased Decreased of other Others under the equity comprehensiv announced to the current nt equity
method e income issue period
ⅠJoint venture
Dalian Bingshan–P&A
Recreation Development 3,553,919.97 -377,150.35 3,176,769.62 Engineering Co., Ltd.
subtotal 3,553,919.97 -377,150.35 3,176,769.62Ⅱ Associates
Dalian Bingshan Engineering
13,716,985.57 1,302,858.87 15,019,844.44&Trading Co.,Ltd.
Panasonic Refrigeration
155,826,086.27 -3,011,036.73 5,200,000.00 147,615,049.54 (Dalian) Co., Ltd.
Dalian Honjo Chemical Co.,
9,403,913.18 231,620.31 1,203,061.37 8,432,472.12 Ltd.
Panasonic Cold-Chain
215,573,606.48 2,965,904.37 8,000,000.00 210,539,510.85 (Dalian) Co., Ltd.
Keinin-Grand Ocean Thermal
Technology (Dalian) Co., 42,333,942.39 7,612,764.78 9,600,000.00 40,346,707.17 Ltd.
Panasonic Compressor
432,515,006.40 29,441,902.46 34,000,000.00 427,956,908.86 (Dalian) Co., Ltd.
Dalian Sanyo Meica
23,233,848.71 -889,967.73 22,343,880.98 Electronics Co., Ltd.
MHI Bingshan Refrigeration
29,294,087.63 -2,308,578.44 26,985,509.19 (Dalian) Co.,Ltd.
Beijing Huashang Bingshan
Refrigeration and Air-
1,425,989.62 1,754,200.00 -512,013.13 2,668,176.49 conditioning Machinery Co.,
Ltd.
Dalian Fuji Bingshan
89,896,843.61 12,411,144.13 102,307,987.74 Vending Machine Co., Ltd.
Increase/Decrease
Provision Beginning Gains and losses Adjustment Cash bonus or Provision for for Name Changes Ending balance balance recognized of other profits impairment of impairme Increased Decreased of other Others under the equity comprehensiv announced to the current nt equity
method e income issue period
Daliian Sanyo High-Efficient
Refrigeration System Co., 22,455,509.02 105,357.69 22,560,866.71 Ltd.
Dalian Fuji Bingshan
Vending Machine Sales Co., 2,450,000.00 1,110,275.29 3,560,275.29 Ltd.
1,035,675,818.
subtotal 4,204,200.00 48,460,231.87 58,003,061.37 1,030,337,189.38 88
1,039,229,738.
Total 4,204,200.00 48,083,081.52 58,003,061.37 1,033,513,959.00 85
(1) As for the resolution of the Board, the Company increased RMB 3.5084 million for the Beijing Huashang Bingshan Refrigeration AC Complete Plant Co., Ltd., After capital increased, theCompany‘s proportion of contribution did not change, holding49% equity of Beijing Huashang Bingshan Refrigeration AC Complete Plant Co., Ltd.. The Company invested RMB 1.7542 million till end of 30 June 2015.
(2) As for the resolution of the Board, the Company and Fuji Electric jointly invested the Fuji Bingshan Vending Machine Sales Co., Ltd. with registered capital of RMB 5 million. The Company contributed RMB 2.45 million with49% equity of the Fuji Bingshan Vending Machine Sales Co., Ltd. held. Till end of 30 June 2015, the Company invested RMB 2.45 million
12. Investment property
(1)Investment property details
Construction
Items Buildings Land-use-rights Total
in progress
1. Original value
(1)Beginning balance
25,259,944.57 25,259,944.57 (2)Current year addition
Outsourcing
Transferred fromInventories\Fixed
asset-originalcost\Construction in
progress
Enterprise merger increase
Shareholders invest
Transferred from other
(3)Current year disposal
disposal
Transferred to other
(4)Ending balance
25,259,944.57 25,259,944.57 2.Accumulated depreciation
(1)Beginning balance 151,035.57 151,035.57 (2)Current year addition 305,662.50 305,662.50 provision or amortization 305,662.50 305,662.50 Enterprise merger increase
Transferred from other
(3)Current year disposal
disposal
Transferred to other
(4)Ending balance 456,698.07 456,698.07 3..Provision for impairment
(1)Beginning balance
(2)Current year addition
provision or amortization
Enterprise merger increase
Transferred from other
(3)Current year disposal
disposal
Transferred to other
(4)Ending balance
4.Book value
(1)Ending book value 24,803,246.50 24,803,246.50 (2)Beginning book value 25,108,909.00 25,108,909.00
(2) Investment property withoutowner‘s certificates
Items Book value Reasons
# 6 workshop building on No. 106 Liaohe East Rd, Dalian
24,803,246.50 Final accounts uncompleted Economic and Technology Development Zone
Total 24,803,246.50
(3) Explanation of investment property
The company signed rental contract with MHI Bingshan Refrigeration (Dalian) Co.,Ltd., and rent# 6 workshop building located on No. 106 Liaohe East Rd, Dalian Economic and Technology Development Zone to MHI Bingshan Refrigeration (Dalian) Co., Ltd. The rental area is 15,259.04 square meters, and the rent term till
16th
July, 2029. The annual rent fee is RMB 4.2 million after considering the time value of money.
13. Fixed assets
(1) Fixed assets details
Other
Items Buildings Machinery Vehicles Total equipments
1. Original value
(1)Beginning balance
351,970,071.36 568,188,704.97 25,291,805.92 18,442,757.75 963,893,340.00 (2)Current year addition
607,362.38 588,868.38 672,655.56 1,263,925.11 3,132,811.43 Purchased
443,000.00 588,868.38 172,655.56 1,263,925.11 2,468,449.05 Transferred from
Construction in progress
164,362.38 164,362.38 Enterprises merger
Shareholders investment
Leased in from financing
Other transferred in 500,000.00 500,000.00 (3)Current year reduction
8,743.59 162,960.00 109,805.28 281,508.87 Disposal
8,743.59 162,960.00 109,805.28 281,508.87 Leased out from
financing
Other transferred out
(4)Ending balance
352,577,433.74 568,768,829.76 25,801,501.48 19,596,877.58 966,744,642.56 2.Accumulated depreciation
(1)Beginning balance 121,972,177.31 397,048,925.70 14,903,060.69 13,383,677.27 547,307,840.97 (2)Current year addition 4,238,025.56 12,393,679.74 1,009,345.11 577,510.29 18,218,560.70 Provision 4,238,025.56 12,393,679.74 1,009,345.11 577,510.29 18,218,560.70 Enterprises merger
increased
Other transferred in
(3)Current year disposal 8,306.41 146,664.00 98,824.52 253,794.93 Disposal 8,306.41 146,664.00 98,824.52 253,794.93 Leased out from
financing
Other transferred out
(4)Ending balance 126,210,202.87 409,434,299.03 15,765,741.80 13,862,363.04 565,272,606.74
Other
Items Buildings Machinery Vehicles Total equipments
3..Provision for impairment
(1)Beginning balance 2,292,229.72 2,292,229.72 (2)Current year addition
Withdrew
Enterprises merger
increase
Other transferred in
(3)Current year disposal
Disposal
Leased out from
financing
Other transferred out
(4)Ending balance 2,292,229.72 2,292,229.72 4.Net Book value
(1)Ending book value 226,367,230.87 157,042,301.01 10,035,759.68 5,734,514.54 399,179,806.10 (2)Beginning book value 229,997,894.05 168,847,549.55 10,388,745.23 5,059,080.48 414,293,269.31 (2)There were no idle fixed assets during the current period.
(3) Fixed assets withoutowner‘s certificates
Items Book value Reasons
Buildings
65,359,619.05 Final accounts uncompleted Total
65,359,619.05
(4) Wuhan New World Refrigeration Industrial Co., Ltd. borrowed RMB60,000,000 from bank and mortgaged with its buildings ,machinery and land-use-rights with total book value
RMB172,787,581.89 which included book value of buildings RMB76,773,439.62 and book
value of machinery RMB41,508,458.27. Please refer to the note V.18.
14. Project in construction
(1) Details
Transferred Other
into fixed decreas Percen Increased
Balance of assets ed Balance of Sources of tage of Items Budget during current
31-12-2014 during during 30-06-2015 funds compl period
current current etion period period
||||||
|-|-|-|-|-|
|353,080,000.00|17,594,050.11|26,000,420.82|164,362.38|43,430,108.55|
|1,000,000.00|921,399.35|||921,399.35|
|354,080,000.00|18,515,449.46|26,000,420.82|164,362.38|44,351,507.90|

(2) There was no provision for impairment needed withdrawn.
(3) Construction in process increased139.54% over that of last Period, refers to new investment for new factory.
15. Intangible assets
(1) Intangible assets details
Items Land-use-rights Knowhow Others Total
|||||
|-|-|-|-|
|176,504,398.53|515,224.41|10,023,747.44|187,043,370.38|
|||169,316.25|169,316.25|
|||169,316.25|169,316.25|

Shareholders invest
Other transferred in
(3)Current year disposal
Disposal
Other transferred out
|||||
|-|-|-|-|
|176,504,398.53|515,224.41|10,193,063.69|187,212,686.63|
|28,866,655.89|515,224.41|3,748,179.83|33,130,060.13|
|1,765,044.77||415,412.87|2,180,457.64|
|1,765,044.77||415,412.87|2,180,457.64|

 Enterprises merger increase
Other transferred in
(3)Current year disposal
Disposal
Other transferred out
|||||
|-|-|-|-|
|30,631,700.66|515,224.41|4,163,592.70|35,310,517.77|

 3..Provision for impairment
(1)Beginning balance
(2)Current year addition
Withdraw
Enterprises merger increase
Other transferred in
(3)Current year disposal
Disposal
Other transferred out
(4)Ending balance
4.Net book value
||||
|-|-|-|
|145,872,697.87|6,029,470.99|151,902,168.86|
|147,637,742.64|6,275,567.61|153,913,310.25|

(2) There were no intangible assets increased by internal research and development.
(3) Please refer to the noteV.18 for land-use-rights mortgaged.
16. Long-term deferred expenses
Increased Amortized
Other
Items 31-12-2014 during current during current 30-06-2015 decrease
period period
||||
|-|-|-|
|2,704,561.98|69,239.16|2,635,322.82|
|3,085,642.38|645,759.24|2,439,883.14|
|83,194.63|24,253.62|58,941.01|
||739,252.02||

 17. Deferred income tax assets/Deferred income tax liabilities
(1) Deferred income tax assets had not been off-set
30-06-2015 31-12-2014
Items Deductible Deductible
temporary Deferred tax assets temporary Deferred tax assets difference
difference
|||||
|-|-|-|-|
|99,035,680.34|17,724,007.91|98,014,616.89|16,786,587.33|
|4,876,208.00|731,431.20|||
|103,911,888.34|18,455,439.11|98,014,616.89|16,786,587.33|

 (2) Deferred liabilities tax assets had not been off-set
30-06-2015 31-12-2014
Items
Taxable temporary Deferred tax Taxable temporary Deferred tax
differences liabilities differences liabilities
|||
|-|-|
|1,003,497,159.30|150,524,573.90|
|1,003,497,159.30|150,524,573.90|

(3)Temporary difference which not recognized deferred income tax assets
Items 30-06-2015 31-12-2014
||||
|-|-|-|
|42,301,487.9|5|44,791,908.06|
|15,493,479.7|8|9,725,928.72|
|57,794,967.7|3|54,517,836.78|

 The temporary difference was not recognized as deferred income tax assets, because it is uncertain if there will be enough taxable income.
(4) Deductible losses of unrecognized deferred income tax assets will due the following years
|||||
|-|-|-|-|
|Items|30-06-2015|31-12-2014|Notes|
|2017|975,555.72|975,555.72||
|2018|4,717,859.29|4,717,859.29||
|2019|4,032,513.71|4,032,513.71||
|2020|5,767,551.06|||
|Total|15,493,479.78|9,725,928.72|--|

18. Short-term loans
Terms of loans 30-06-2015 31-12-2014
Mortgage loan 60,000,000.00 60,000,000.00 Total 60,000,000.00 60,000,000.00 (1) Wuhan New World Refrigeration Industrial Co., Ltd. borrowed short-term loan RMB
60,000,000 from bank and mortgaged with its buildings, machinery and land-use-rights.
19. Notes payable
Items 30-06-2015 31-12-2014
|||
|-|-|
||6,241,714.55|
|120,832,581.67|103,304,788.06|

 Total 120,832,581.67 109,546,502.61 20. Accounts payable
Items 30-06-2015 31-12-2014
|||
|-|-|
|498,213,365.90|475,503,139.38|
|32,474,626.71|6,919,723.26|
|14,667,355.39|28,653,675.18|

 Total 545,355,348.00 511,076,537.82 There was no big amount among the accounts payable aged more than 1 year.
21. Accounts received in advance
(1) Details
Items 30-06-2015 31-12-2014
|||
|-|-|
|104,820,567.76|137,629,315.42|

Total 104,820,567.76 137,629,315.42
(2) Accounts received in advance aged over 1 year
Items 30-06-2015 Reasons
||
|-|
|1,962,000.00|
|1,563,950.00|
|960,135.60|
|4,486,085.60|

22. Payroll payable
(1) Details
Increased during Decreased during
Items 31-12-2014 30-06-2015
current period current period
|||||||
|-|-|-|-|-|-|
|55,993,637.27||115,035,849.24||139,885,926.05|31,143,560.46|
|||17,131,851.20||17,131,851.20||
|||218,428.00||218,428.00||
||132,386,128.44||157,236,205.25|||

 The ending balance of wages payable decreased44.38% over that of period-begin, mainly
because the year-end bonus for year of 2014 are paid in the Period.
(2)Short-term salary
Increased Decreased
Items
31-12-2014 during current during current 30-06-2015 period period
|||||
|-|-|-|-|
|25,570,229.67|87,399,253.66|110,195,220.36|2,774,262.97|
|25,205,874.20|4,250,497.52|4,780,809.79|24,675,561.93|
|1,698,790.15|6,719,060.58|7,687,421.16|730,429.57|
||6,012,082.06|6,012,082.06||
||472,923.64|472,923.64||
||234,054.88|234,054.88||
|1,698,790.15||968,360.58|730,429.57|
|2,466,435.12|14,224,102.31|14,295,204.03|2,395,333.40|
|1,052,308.13|2,258,753.17|2,743,088.71|567,972.59|
||184,182.00|184,182.00||

Total 55,993,637.27 115,035,849.24 139,885,926.05 31,143,560.46 The non-currency welfare of the current year was 184,182.00yuan,which amortization of long- term expenses ofemployee‘s dormitory use right, and dining hall expenses and etc.
Among the salary, bonus, allowance and subsidies, RMB 4,876,208.00 equity incentive
expenses are included.
(3) Defined contribution plans
Increased during Decreased during
Items 31-12-2014 30-06-2015
current period current period
|||
|-|-|
|14,567,686.87|14,567,686.87|
|968,087.75|968,087.75|
|1,596,076.58|1,596,076.58|

Total 17,131,851.20 17,131,851.20
The company took part in thegovernment‘s basic retirement pension and unemployment
insurance according to the related legislation, and paid the insurance expenses every month and recorded as expenses or costs of assets. There was no other obligation of payment.
(4)There was no amount delay paid at the end of the current year.
23. Taxes payable
Items 30-06-2015 31-12-2014
|||
|-|-|
|4,509,550.67|-3,127,955.12|
|2,610,297.16|1,991,177.27|
|6,413,120.85|2,568,733.67|
|1,490,496.69|396,325.29|
|616,937.05|291,424.15|
|217,274.89|217,274.87|
|249,018.68|110,082.07|
|160,806.41|67,685.90|
|8,231.90|11,139.52|
|660.00|544.00|
|3,941.67|13,509.20|
|62,646.59|102,788.87|
|862,500.00||

Total 17,205,482.56 2,642,729.69 The reason of the ending balance increased551.05% compared with the beginning balance was enterprise income tax payable and value-added tax payable increased.
24. Dividend payable
Name of investors 30-06-2015 31-12-2014 Reasons
|||
|-|-|
|2,643,678.92|533,156.00|

Total 2,643,678.92 533,156.00
The reason of the ending balance increased395.85% compared with the beginning balance was dividends unpaid.
25. Other accounts payable
(1) Details
Items 30-06-2015 31-12-2014
|||
|-|-|
|24,487,500.00|18,096,524.00|
|14,371,908.67|13,721,523.03|
|16,298,266.10|14,117,136.22|
|504,856.34|510,097.66|
|666,024.51|11,164,903.53|
|3,184,161.83|2,465,629.60|

Total 59,512,717.45 60,075,814.04
(2) Major amount aging over 1 year
Name of investors 30-06-2015 Unpaid reason
Subsidiary company borrowed for removal and
Dalian Bingshan Group Co., Ltd. 10,000,000.00
reconstruction
Total 10,000,000.00
26. Deferred revenue
||||||||
|-|-|-|-|-|-|-|
||||Increased||||
|||||Decreased during|||
||Items|31-12-2014|during current||30-06-2015|Reasons|
|||||current period|||
||||period||||
|Associated with assets||51,077,394.00||849,549.00|50,227,845.00||
|Associated with earnings||1,696,490.19||1,696,490.19|||
|Total||52,773,884.19||2,546,039.19|50,227,845.00|--|

Subsidy from government
Increase Converted to
d during non-business Other
Liabilities 31-12-2014 30-06-2015 Notes current incomes during decrease
period current period
||||
|-|-|-|
|4,289,394.00|292,549.00|3,996,845.00|
|46,788,000.00|557,000.00|46,231,000.00|
|1,696,490.19|1,696,490.19||
||2,546,039.19||

27. Share capitals
Shares
Issuance of new converted
Items 31-12-2014 Others 30-06-2015 shares from
reserve
I. Non-circulating share capital
19,224,451 +10,150,000 29,374,451 with restricted trade conditions
1. State-owned shares
2. Shares held by domestic legal
19,213,921 19,213,921 persons
3. Other domestic shares 10,530 +10,150,000 10,160,530 Including: Shares held by
10,530 +10,150,000 10,160,530 domestic natural person
II. Circulating share capital 330,790,524 330,790,524 1. Domestically listed ordinary
215,793,449 215,790,524 shares (A-share)
2. Domestically listed ordinary
115,000,000 115,000,000 shares (B-share)
III. Total 350,014,975 +10,150,000 360,164,975
As for the resolution of the 15th meeting of the 6th session of the Board, March 4th 2015 was determined as the
grant date, award the 41 equity incentive objects with restricted shares amounting to 10,150,000 shares.
28. Capital surpluses
Increased during current Decreased during
Items 31-12-2014 30-06-2015 period current period
||||
|-|-|-|
|515,188,976.98|46,284,000.00|561,472,976.98|
|67,099,029.31|4,876,208.00|71,975,237.31|
||51,160,208.00||

 The share premium increased in the Period, refers to the share premium recognized by orientate offer for equity incentive objects, other capital reserves refers to the equity incentive expenses. 29. Other comprehensive income
2015.01-06
Less：
Previousl After-
y tax
recognize attribut
Items 31-12-2014 After-tax 30-06-2015 Amount for the period d in profitLess：income e to
attribute to the
before income tax or loss in tax minorit
parent company
other y
comprehe shareh
nsive older
income
I.Latercan’t
reclassified into
profit and loss of
other
comprehensive
income
||||
|-|-|-|
|2,768,286.72|1,003,497,159.30|150,524,573.90|
|2,768,286.72|||
||1,003,497,159.30|150,524,573.90|

||
|-|
|855,740,872.12|
|2,768,286.72|
|852,972,585.40|

3、Foreign
currency
translation
differences of
financial
statements
|||
|-|-|
|1,003,497,159.30|150,524,573.90|

 Other comprehensive income recognized in the Period refers to the shares of Guotai Junan, held by the Company are measured by fair value.
30 .Surplus reserves
Increased during Decreased during
Items 31-12-2014 30-06-2015 current period current period
||||
|-|-|-|
|272,675,444.95||272,675,444.95|
|273,112,803.04|22,378,995.91|295,491,798.95|
||22,378,995.91||

 The increase of the surplus reserves were because the other reserved capital RMB22.379-million-yuan was
withdrawn on the basis of20% of thecompany‘s net profit of 2014 according to the resolution of the General
Meeting of Shareholders of year 2014.
31. Retained earnings
Items 2015 Extraction or allocation proportion
Retained earnings at the end of prior year 486,167,740.13
Add: Changes in accounting policies
At beginning of the year after retrospective adjustment 486,167,740.13
Add: Net profit of the current period 65,477,775.99
Less: Appropriation of statutory surplus reserves
Appropriation of other reserved capital 22,378,995.9120% of net profit of year 2014
Appropriation ofemployee‘s welfare and bonus fund
999,777.67
in foreign invested company
Cash dividends 54,024,746.25 RMB 0.15 per share of year 2014
Dividends transferred to share capital
Retained earnings at the end of the current period 474,241,996.29
32. Total operating income and operating cost
(1) Total operating income and cost
2015.01-06 2014.01-06
Items
Income Cost Income Cost
|||||
|-|-|-|-|
|703,214,354.35|556,138,449.36|762,976,180.18|598,638,940.68|
|8,525,987.78|6,208,948.56|11,936,073.01|11,311,500.14|
|711,740,342.13|562,347,397.92|774,912,253.19|609,950,440.82|

 33. Taxes and surcharges
Items 2015.01-06 2014.01-06
|||
|-|-|
|1,465,636.16|836,183.52|
|2,284,878.37|3,211,160.39|
|985,263.05|1,377,841.69|
|655,805.10|918,538.25|
|75,277.68|125,694.96|

 Total 5,466,860.36 6,469,418.81
34. Selling and distribution expenses
Items 2015.01-06 2014.01-06
|||
|-|-|
|2,892,181.98|2,479,958.80|
|15,972,653.49|25,847,629.40|
|253,348.11|250,494.54|
|4,077,525.44|6,609,873.54|
|2,404,142.35|3,170,406.48|
|7,215,386.47|6,261,527.19|
|1,429,195.03|3,040,090.24|
|554,869.98|804,797.22|
|528,017.73|436,623.10|

 Total 35,327,320.58 48,901,400.51 35. Administrative expenses
Items 2015.01-06 2014.01-06
|||
|-|-|
|6,415,197.31|6,261,525.85|
|50,794,074.60|51,370,661.40|
|3,515,372.56|3,573,094.77|
|507,034.43|745,869.70|
|1,292,750.44|2,230,602.65|
|1,811,111.96|1,987,252.27|
|2,345,494.31|2,988,658.33|
|95,386.88|430,705.79|
|4,303,683.83|4,232,710.57|
|1,880,493.01|1,586,520.05|
|10,335,005.70|8,959,019.18|
|2,243,366.80|2,166,811.00|
|2,511,459.14|2,723,594.26|
|686,672.43|505,756.54|

 Total 88,737,103.40 89,762,782.36 36 .Financial expenses
Items 2015.01-06 2014.01-06
|||
|-|-|
|2,531,600.00|1,578,018.01|
|5,005,928.14|5,861,187.92|
|260,322.22|106,537.45|
|382,682.47|378,947.63|

 Total -1,831,323.45 -3,797,684.83 The financial expenses increased51.78% over that of last period, mainly because the loan
interest increased and basis of deposit decreased in the Period, then the interest income declined.
37 .Impairment losses
Items 2015.01-06 2014.01-06
|||
|-|-|
|2,475,284.97|11,727,606.97|

 Provision for obsolete inventories
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
|||
|-|-|
|2,475,284.97|11,727,606.97|

 The loss from assets devaluation decreased78.89% over that of last period, mainly because the accrual bad debt losses decreased in the Period.
38. Gain/ (loss) from investment
(1) Details
Items 2015.01-06 2014.01-06
|||
|-|-|
|48,083,081.52|53,897,497.58|

 Calculated by cost method
Gain from disposal associated company 681,816.41
|||
|-|-|
|310,000.00|1,754,944.75|

 Gain from disposal financial assets available for sale
Total 48,393,081.52 56,334,258.74 (2) There was no severe constrict on the collection of the investment earnings.
39. Non-business incomes
(1)Details
The amount recorded in non-
Items 2015.01-06 2014.01-06 recurring gains and losses of
current period
||||
|-|-|-|
|||28,868.06|
|43,208.00|122,360.26|43,208.00|
|56,012.50|638,030.76|56,012.50|
|2,546,039.19|4,284,535.75|1,696,490.19|
|88,269.78||88,269.78|
|6,114.54|3,023.77|6,114.54|
|||1,918,963.07|

(2) Subsidy fund from government
Items 2015.01-06 2014.01-06 Explanations
Subsidy for information construction from Dalian
Municipal Bureau of Finance
Aid for patent from Dalian Intellectual Property
Service Centre
|||
|-|-|
|43,400.00|76,300.00|

Subsidy for social security 11,165.00 Related to gain
Subsidy for circular economy project
Award for QC team
Aid for patent from Wuhan Intellectual Property
Bureau
Subsidy and award for patent
Mayor‘s Quality Award
Financial incentive award for increasing production
and sales
Subsidy for science and technology development
Subsidy for small and medium-sized enterprises
exploiting international market
Financial award for export
|||
|-|-|
|1,447.50|561,730.76|

International market developing fund for small and
mid size enterprises
Subsidy for the first set of important technology
equipment
Reward for promoting increase of industry of year
2014
Subsidy for patent from Wuhan Intellectual Property
Bureau
Subsidy for disposal of useless vehicles
||||
|-|-|-|
|56,012.50|638,030.76|--|

The non-operation revenue decreased45.18% over that of last period, mainly due to the
declined of deferred income in the Period.
40. Non-business expenses
The amount recorded in non-
Items 2015.01-06 2014.01-06 recurring gains and losses of
current period
||||
|-|-|-|
|||2,394.33|
|2,071.37|11,514.40|2,071.37|
||66,263.76||
|||4,465.70|

 The non-operation expenditure decreased97.84% over that of last period, mainly because the
losses from fixed assets disposal decreased in the Period.
41. Income tax expenses
(1) Details:
Items 2015.01-06 2014.01-06
|||
|-|-|
|7,360,497.09|5,937,957.94|
|-1,668,851.78|-2,186,324.08|

 Total 5,691,645.31 3,751,633.86 (2) Adjustment process of accounting profit and income tax expense
Items 2015.01-06
Total profits 70,374,826.24
||
|-|
|10,556,223.94|
|4,151,259.99|
|-817,872.20|
|-7,807,535.63|
|163,878.83|
|650,087.58|
|-1,204,397.20|

Income tax expenses 5,691,645.31 The income tax expenses increased51.71% over that of last period, mainly because the taxable income tax from the subsidiaries increased.
42. Relevant information about cash flow statement
(1) Other cash received relating to operating activities
Items 2015.01-06 2014.01-06
|||
|-|-|
|54,565.00|76,300.00|
|1,014,539.73||
|5,113,665.00|14,137,606.36|
|644,271.81|3,665,453.62|
|7,513,302.20|4,279,561.80|
|772,394.36|1,621,146.19|

Total 15,112,738.10 23,780,067.97
(2) Other cash paid relating to operating activities
Items 2015.01-06 2014.01-06
|||
|-|-|
|4,880,283.65|7,920,321.99|
|4,360,672.45|3,911,850.00|
|45,836,364.92|39,706,895.07|
|382,682.47|338,963.63|
|11,055,701.02|708,368.10|

Total 66,515,704.51 52,586,398.79
(3) Cash receipts related to other financing activities
Items 2015.01-06 2014.01-06
||
|-|
|32,953,876.63|

Total 32,953,876.63
(4) Other cash paid relating to financing activities
Items 2015.01-06 2014.01-06
|||
|-|-|
||39,984.00|
|34,920,526.90||

Total 34,920,526.90 39,984.00
43 .Complementary information for consolidated cash flow statement
(1) The relationship between the net profit and the net cash flows from operating activities
Items 2015.01-06 2014.01-06
1. Reconciliation from the net profit to the cash flows from operating
activities
Net profit 64,683,180.93 69,324,088.48
|||
|-|-|
|2,475,284.97|11,727,606.97|
|18,524,223.20|18,243,165.48|
|2,180,457.64|2,103,901.84|
|739,252.02|358,885.66|
|-28,868.06|-611,114.76|
|2,394.33|56,295.68|

 Losses on variation of fair value
|||
|-|-|
|2,486,829.17|1,684,555.46|
|-48,393,081.52|-55,652,442.33|
|-1,668,851.78|-2,184,574.08|

 Increase in deferred tax liabilities
|||
|-|-|
|22,423,162.65|54,052,680.59|
|-106,331,110.05|-126,192,171.87|
|-87,682,794.87|24,494,736.42|

 Others
Net cash flows from operating activities -130,589,921.37 -2,594,386.46 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
|||
|-|-|
|330,091,246.94|469,921,233.07|
|475,557,589.39|502,339,160.35|

 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 -145,466,342.45 -32,417,927.28
(2) Cash and cash equivalents
Items
2015.01-06 2014.01-06
1.Cash 330,091,246.94 475,557,589.39
|||
|-|-|
|61,557.65|67,783.07|
|330,029,689.29|457,395,413.41|
||18,094,392.91|

2.Cash equivalents
Including: Bonds mature within 3 months
3.Balance of cash and cash equivalents at the end of the current period 330,091,246.94 475,557,589.39 Including: Cash or cash equivalents which was restricted in use of the
Company and subsidiaries in the group
44. The assets with the ownership or use right restricted
Items 30-06-2015 Reasons
||
|-|
|34,920,526.90|
|118,281,897.89|
|54,505,684.00|
|207,708,108.79|

45. Foreign currency monetary items
Ending balance of RMB
Items Ending balance of Original currency Exchange rate
equivalent
Monetary fund
||||
|-|-|-|
|13,153.06|6.1136|80,412.55|
|5.60|6.8699|38.47|
|311,671.00|0.050052|15,599.76|
|116,927.58|9.6422|1,127,439.11|

 Accounts receivable
||||
|-|-|-|
|188,090.65|9.6422|1,813,607.67|
|36,399.28|9.6422|350,969.14|

 VIII. Changes of consolidation scope
By the solution of the 12th meeting of 6th session of Board of Directors of the company, the company established a joint company with Dalian Bingshan International Trade Co., Ltd. The new company named Bingshan Technology Service (Dalian) Co., Ltd., and the registered capitalwas RMB 20,000,000.00. As at 31st December 2014, Bingshan Technology Service (Dalian) Co., Ltd. got the business license, but not received the capital and not started to operate and not included in thecompany‘s consolidated statements. Till end of 30 June 2015,
Bingshan Technology Service (Dalian) Co., Ltd. started operations, and Bingshan Technology
Service (Dalian) Co., Ltd. included in the consolidated statement of the Company.
IX. Equity in other entities
1. Equity in subsidiary
(1) The structure of the enterprise group
Main Shareholding(%) Obtaini Registered Business
Name of subsidiaries business ng
address nature
address Direct Indirect method Dalian Bingshan Group Refrigeration
Establi Installation Co., Ltd.(―Installation Dalian Dalian Installation 100
sh
Company‖)
Dalian Bingshan Group Sales Co., Establi Dalian Dalian Trading 100
Ltd.(―SalesCompany‖) sh
Dalian Bingshan Air-Conditioning
Establi Equipment Co., Ltd.(―Bingshan Air- Dalian Dalian Manufacturing 70
sh
Conditioning‖)
Dalian Bingshan Metal Processing Establi Dalian Dalian Manufacturing 100
Co., Ltd.(―MetalProcessing‖) sh
Dalian Bingshan Guardian Establi Dalian Dalian Manufacturing 60
Automation Co., Ltd. sh
Dalian Bingshan Ryosetsu Quick Establi Dalian Dalian Manufacturing 70
Freezing Equipment Co., Ltd. sh
Wuhan New World Refrigeration Purcha Wuhan Wuhan Manufacturing 51
Industrial Co., Ltd.(―WNWRI‖) se
Bingshan technical service (dalian) Establi Dalian Dalian Services 60
Co., Ltd. sh
Wuhan New World Refrigeration Air
Installation
Establi Wuhan Wuhan 5 95
Conditioner Engineering Co., Ltd. sh
Ningbo Bingshan Refrigeration Air Establi Ningbo Ningbo Installation 51
Conditioner Engineering Co., Ltd. sh
①All the holding proportion in subsidiaries were the same with votingproportion；
②The company held over50% voting proportion insubsidiaries；
③ The company could control thesesubsidiaries；
④By the solution of the 12th meeting of 6th session of Board of Directors of the company , the company will established a joint company with Dalian Bingshan International Trade Co., Ltd. The new company named Bingshan Technology Service (Dalian) Co., Ltd., and the registered
capital was RMB 20,000,000.00. The company will invest RMB 12,000,000.00 and hold60% of shareholding proportion. As at 31st December 2014, Bingshan Technology Service (Dalian) Co., Ltd. got the business license, but not received the capital and not started to operate and not included in thecompany‘s consolidated statements. Till end of 30 June 2015, Bingshan
Technology Service (Dalian) Co., Ltd. started operations, and Bingshan Technology Service
(Dalian) Co., Ltd. was included in the consolidated statement.
(2) Important Non-wholly-owned Subsidiary
Accumulative
Profit\loss Current pay
Shareholding of equity of
attributable to dividends to
Name of subsidiaries minority minority Notes minority minority
shareholders(%) shareholders
shareholders shareholders
30-06-2015
Wuhan New World Refrigeration
49 -3,076,345.70 56,750,416.92
Industrial Co., Ltd.
(3) The main financial information of subsidiaries ten thousand yuan 30-06-2015
Name of subsidiaries
Current No-current Current No-current Total Total assets
assets assets liabilities liabilities liabilities
|||||||
|-|-|-|-|-|-|
|25,059.86|20,631.58|45,691.44|28,029.25|4,623.10|32,652.35|

Continued:
31-12-2014
Name of subsidiaries
Current No-current Current No-current Total Total assets
assets assets liabilities liabilities liabilities
|||||||
|-|-|-|-|-|-|
|24,968.78|20,184.66|45,153.44|26,886.27|4,678.80|31,565.07|

Continued:
2015.01-06 2014.01-06
Cash Cash Name of The total The total
Total flows Total flows subsidiaries Operating amount of Operating amount of
comprehensiv from comprehensiv from income comprehensive income comprehensive
e income operating e income operating income income
activities activities
|||||||||
|-|-|-|-|-|-|-|-|
|10,366.39|-549.28|-549.28|-549.27|15,965.69|312.51|312.51|2,540.51|

2. The transaction of the company with itsowner’s equity share changed but still
controlling the subsidiary
(1) Note toowner‘s equity share changed in subsidiaries
By the solution of the 11th meeting of 6th session of Board of Directors of the company, the
company purchased10% shareholdings of Dalian Bingshan Group Sales Co., Ltd., and Dalian Bingshan Group Sales Co., Ltd. became a whole holding subsidiary of the company. The
company would transfer30% shareholdings of Dalian Bingshan Group Sales Co., Ltd. to
Wuhan New World Refrigeration Industrial Co., Ltd., but the equity transaction did not finish
until the date June 30, 2015, and the company held100% shareholdings of Dalian Bingshan
Group Sales Co., Ltd. in the financial statements of first half of 2015.
By the solution of the 12th meeting of 6th session of Board of Directors of the company , the
company would purchase the subsidiary Dalian Bingshan Metal Processing Co., Ltd., and the
equity transaction finished until the date June 30,2015, so the company held100%
shareholdings of Dalian Bingshan Metal Processing Co., Ltd. in the financial statements of first half of 2015.
(2) Thetransaction‘s influence to equity of minority shareholders and attributable to the
owner's equity of the parent company
Items Dalian Bingshan Metal Processing Co., Ltd.
||
|-|
|9,249,900.00|
|9,249,900.00|
|9,249,900.00|

Difference
-
Being approved by the 12th meeting of the 6th session of the Board, the35.75% equity of
original controlling subsidiary-Dalian Bingshan Metal Process Co., Ltd. are transferred by the
Company, based on the pricing standards-the book value of theowner‘s equity attributable to
parent company ended as 31 August 2014 under the name of Dalian Bingshan Metal Process
Co., Ltd., the transferring price was RMB 9,249,900.00.
3. Equity in joint venture arrangement or associated enterprise
(1)The important of joint ventures or affiliated companies
Shareholding
Main Register
Name of joint ventures or affiliated Accountin business ed Business nature Indire
companies Direct g methods address address ct
Joint ventures:
Dalian Bingshan–P&A Recreation Equity Dalian Dalian Installation 50%
Development Engineering Co., Ltd method Affiliated companies:
Keinin-Grand Ocean Thermal Technology Equity Dalian Dalian Manufacturing 20%
(Dalian) Co., Ltd method Equity Panasonic Compressor (Dalian) Co., Ltd Dalian Dalian Manufacturing 40%
method Dalian Fuji Bingshan Vending Machine Co., Equity Dalian Dalian Manufacturing 49%
Ltd. method (2)The main financial information of joint ventures
Items 30-06-2015/2015.01-06 31-12-2014/2014.01-06
|||
|-|-|
|9,634,599.72|11,558,920.00|
|1,252,965.34|2,892,025.92|
|461,003.24|213,621.85|
|10,095,602.96|11,772,541.85|
|3,733,184.38|4,616,122.53|
|3,733,184.38|4,616,122.53|

Minority interests
|||
|-|-|
|6,362,418.58|7,156,419.32|
|3,181,209.29|3,578,209.66|

Adjusting events
—Goodwill
—Unrealized profits of insider trading
|||
|-|-|
|-4,439.67|-24,289.69|
|3,176,769.62|3,553,919.97|
|703,985.12|7,446,769.63|
|-535.21|-246.95|

Income tax 159,398.86
|||
|-|-|
|-794,000.74|478,196.58|

Items 30-06-2015/2015.01-06 31-12-2014/2014.01-06
|||
|-|-|
|-794,000.74|478,196.58|

The dividends received from joint ventures during
current year
(3) The main financial information of affiliated companies
30-06-2015/2015.01-06
Keinin-Grand Ocean
Items Dalian Fuji Bingshan Thermal Panasonic Compressor
Vending Machine Co., Technology (Dalian) Co., Ltd
Ltd.
(Dalian) Co., Ltd
||||
|-|-|-|
|262,994,046.16|1,476,278,713.90|290,926,516.52|
|102,621,777.49|356,719,720.58|62,565,731.09|
|365,615,823.65|1,832,998,434.48|353,492,247.61|
|163,882,289.72|756,705,748.73|141,363,866.25|
|||3,336,569.64|
|163,882,289.72|756,705,748.73|144,700,435.89|
|201,733,533.93|1,076,292,685.75|208,791,811.72|
|40,346,707.17|430,517,074.30|102,307,987.74|

Adjusting events
—Goodwill
—Unrealized profits of insider
tradings
||||
|-|-|-|
||-2,560,165.44||
|40,346,707.17|427,956,908.86|102,307,987.74|
|334,917,403.41|985,412,375.73|209,861,461.28|
|38,063,823.88|80,005,169.74|25,328,865.57|

 Net profit of discontinuing operation
Other comprehensive income
||||
|-|-|-|
|38,063,823.88|80,005,169.74|25,328,865.57|
|9,600,000.00|||

Continued：
31-12-2014/2014.01-06
Keinin-Grand Ocean
Items Dalian Fuji Bingshan
Thermal Panasonic Compressor
Vending Machine Co., Technology (Dalian) Co., Ltd
Ltd.
(Dalian) Co., Ltd
||||
|-|-|-|
|229,755,347.05|1,533,547,513.54|201,931,675.02|
|109,589,146.12|358,157,107.39|62,589,896.32|
|339,344,493.17|1,891,704,620.93|264,521,571.34|

31-12-2014/2014.01-06
Keinin-Grand Ocean
Items Dalian Fuji Bingshan
Thermal Panasonic Compressor
Vending Machine Co., Technology (Dalian) Co., Ltd
Ltd.
(Dalian) Co., Ltd
||||
|-|-|-|
|127,674,781.29|796,714,218.88|77,636,760.15|
|||3,421,865.04|
|127,674,781.29|796,714,218.88|81,058,625.19|

 Minority interests
||||
|-|-|-|
|211,669,711.88|1,094,990,402.05|183,462,946.15|
|42,333,942.39|437,996,160.82|89,896,843.61|

Adjusting events
—Goodwill
—Unrealized profits of insider
tradings
||||
|-|-|-|
||-5,481,154.41||
|42,333,942.39|432,515,006.40|89,896,843.61|

Fair value of equity investment with
public offer
||||
|-|-|-|
|286,306,907.58|1,255,325,747.10|194,187,243.81|
|20,800,431.70|92,039,692.56|20,008,126.71|

 Net profit of discontinuing operation
Other comprehensive income
||||
|-|-|-|
|20,800,431.70|92,039,692.56|20,008,126.71|
|8,800,000.00|||

(4) Summary financial information of insignificant affiliated companies
Items 30-06-2015/2015.01-06 31-12-2014/2014.01-06
|||
|-|-|
|459,725,585.61|470,930,026.48|
|--|--|
|-964,253.70|19,944,975.85|
|-964,253.70|19,944,975.85|

 (5) No significant restrictions of the ability of joint venture or associated enterprise transfer
funds to the company.
(6)No excess loss of joint venture or associated enterprise.
(7)No commitment related to joint venture or affiliated company needed disclose.
(8)No Contingent liabilities related to joint venture or affiliated company needed disclose.
X. The risk related financial instruments
The Company faces a variety of financial risks in the course of operation: credit risk, liquidity
risk and market risk (mainly exchange risk and interest rate risk). The objective of the
company‗s risk management is to obtain a proper balance between the risks and benefits,
reduce therisks‗ negative impact on the company's operating performance.
1. Credit risk
The credit risk of the company included monetary fund, accounts receivable, notes receivable
and other accounts receivable etc. The management made credit policies and supervised
changes of these credit explosure.
The company's working capital was in bank with higher credit rating, so there was no
significant credit risk, nor significant losses due to the default of other entity.
Company mainly faces customer credit risk caused by the credit sale. The Company would
make an evaluation on newcustomers‗ credit risk before signing new contracts, which includes external credit rating and bank reference letter (when available) under certain circumstances.
The Company sets quota on credit sale for each customer and such quota is the maximum
amount without additional approvals. As at June 30,2015, the big five customers of accounts
receivable was11.69% of total accounts receivable, and as at 31st December 2014 that was
10.86%.
Except guarantee events disclosed in the notes, there was no other credit risk of guarantee of
the company.
2. Liquidity risk
Liquidity risk was referred to the risk of shortage of funds incurred when the enterprise perform the obligation of settlement by cash or other financial assets.
The financial department of the company continued to monitors the short term or long term
capital
needs to ensure maintain plenty of cash flow. And the same time they also monitor the
condition of bank loan agreements and obtain commitments from banks to provide plenty of
fund.
As at June 30, 2015, thecompany‘s financial assets and financial liabilities in line with non
discount cash flow of the contracts asfollowing：
30-06-2015
Items
Original value of 1-2 2-5
Book value Within 1 year Over 5 years the book years years
Monetary fund 365,011,773.84 365,011,773.84 365,011,773.84
Notes receivable 48,780,136.31 48,780,136.31 48,780,136.31
Accounts
566,710,020.31 680,938,857.71 566,710,020.31
receivable
Interest
2,491,608.34 2,491,608.34 2,491,608.34
receivable
Dividends
39,200,000.00 39,200,000.00 39,200,000.00
receivable
Other
40,188,760.41 45,706,963.73 40,188,760.41
receivables
Available for
sale financial 1,045,925,548.00 1,051,150,318.80 1,045,925,548.00 assets
Subtotal 2,108,307,847.21 2,233,279,658.73 1,062,382,299.21 1,045,925,548.00 Short-term
60,000,000.00 60,000,000.00 60,000,000.00
borrowings
Notes payable 120,832,581.67 120,832,581.67 120,832,581.67
Accounts
545,355,348.00 545,355,348.00 545,355,348.00
payable
Employees‘
compensation 31,143,560.46 31,143,560.46 31,143,560.46
payable
Taxes payable 17,205,482.56 17,205,482.56 17,205,482.56
Dividend
2,643,678.92 2,643,678.92 2,643,678.92
payable
Other payables 59,512,717.45 59,512,717.45 59,512,717.45
Subtotal 836,693,369.06 836,693,369.06 836,693,369.06
Continued:
31-12-2014
Items
Original value of 1-2 2-5
Book value Within 1 year Over 5 years the book years years
Monetary fund 508,511,466.02 508,511,466.02 508,511,466.02
Notes receivable 14,855,957.70 14,855,957.70 14,855,957.70
Accounts
438,880,830.12 555,119,550.49 438,880,830.12
receivable
Interest receivable 4,998,982.40 4,998,982.40 4,998,982.40
Other receivables 34,266,444.02 39,244,121.02 34,266,444.02
Available for sale
42,428,388.70 47,653,159.50 42,428,388.70 financial assets
1,043,942,068.9
Subtotal 1,170,383,237.13 1,001,513,680.26 42,428,388.70 6
Short-term
60,000,000.00 60,000,000.00 60,000,000.00
borrowings
Notes payable 109,546,502.61 109,546,502.61 109,546,502.61
Accounts payable 511,076,537.82 511,076,537.82 511,076,537.82
Employees‘
compensation 55,993,637.27 55,993,637.27 55,993,637.27
payable
Taxes payable 2,642,729.69 2,642,729.69 2,642,729.69
Dividend payable 533,156.00 533,156.00 533,156.00
Other payables 60,075,814.04 60,075,814.04 60,075,814.04
Subtotal 799,868,377.43 799,868,377.43 799,868,377.43
3. Market risk
(1) Exchange rate risk
Most of thecompany‘s business located in China, and settled with RMB. But the company
defined exchange rate risk of foreign currency assets and future foreign currency transaction
(mainly including USD,JPY,HKD and GBP). The financial department of the company
monitors thecompany‘s foreign currency transaction and the scale of foreign assets and
liabilities, and decreases exchange rate risk.
①During the current year the companydidn‘t buy any forward foreign exchange contract or
swap contract.
② As at June 30,2015, thecompany‘s foreign currency assets and foreign currency liabilities
listed in RMB asfollowing：
30-06-2015
Items
USD JPY GBP EUR Total
Foreign currency
financial assets,
Monetary fund 80,412.55 15,599.76 1,127,439.11 38.47 1,223,489.89 accounts
1,813,607.67 1,813,607.67 receivable
Subtotal 80,412.55 15,599.76 2,941,046.78 38.47 3,037,097.56 Foreign currency
financial liability
Accounts payable 350,969.14 350,969.14 Subtotal 350,969.14 350,969.14 Continued:
31-12-2014
Items
USD JPY GBP EUR Total
Foreign currency
financial assets,
Monetary fund 91,285.75 8,353.65 2,283,436.54 41.75 2,383,117.69 accounts
2,578,861.20 2,578,861.20 receivable
Subtotal 91,285.75 8,353.65 4,862,297.74 41.75 4,961,978.89 Foreign currency
financial liability
Accounts payable 347,383.81 347,383.81 Subtotal 347,383.81 347,383.81③ The sensitiveanalysis：
As at June 30, 2015, because thecompany‘s foreign currency assets or liabilities were small,
the change of foreign exchange rate had little impact to thecompany‘s net profit or
shareholders' equity.
(2) Interest rate risk
The interest risk of the Group incurred from bank loan, interest rate risk of a floating interest
rate of financial liabilities that lead to the company facing cash flow interest rate risk, financial liabilities with a fixed interest rate lead to the company facing cash flow interest rate risk. The company determined the proportion of fixed interest rate and floating interest rate according the current market circumstance. As at 1st December 2014, the subsidiary of the company Wuhan
New World Refrigeration Industrial Co., Ltd. borrowed short term loan RMB 60,000,000.00
with fixed interest rate.
The financial department of the company continuously monitors the interest rates level, and the management would make some adjustment to face interest rate increasing.
The sensitiveanalysis：
Base on the assumption of interest rate change of 50 BP, thecompany‘s net profit of first half
of 2015.will increase or decrease RMB 300,000.00.
XI. Related Parties Relationships and Transactions
1. Information of thecompany’s parent company
The parent The parent
Name of Registered Nature of Registered
company's company's
enterprise address business capital shareholding voting right
Dalian
Bingshan Group Dalian Manufacture 140,600,000.00 21.34% 21.34%
Co., Ltd.
(1) Information of thecompany‘s parent company
Dalian Bingshan Group Co., Ltd. Is asino–foreign joint venture located No.888 Xinan Road, Shahekou District, Dalian, China. The legal representative person of Dalian Bingshan Group Co., Ltd. Is Homma Tetsuro, and the registered capital is RMB140.6 million. The registered business operation period is from 3rd July 1985 to 2nd July 2035. The business scope include research, development, manufacture, sales, service and installment of refrigeration product, freezing and cooling product, different size of air-conditioners, petrochemical equipment, electronic and electronic control product, home electronic appliance, environment protect equipment and etc. (Business needed administrative permission must have the administrative license. )
(2) There is no ultimate controller of the Company.
2. The information of the subsidiaries please refers to IX.1 of this note.
3. The information of the affiliated company and joint venture please refers to IX.3 of this note.
The companies had related party transaction with the company during the current period or had transaction balance at the end of last period, including:
Names of the joint ventures or affiliated companies Relationships with the Company
Dalian Bingshan–P&A Recreation Development Engineering Co., Ltd Joint venture of the Company
Dalian Bingshan Engineering& Trading Co. , Ltd Affiliated company of the Company Panasonic Refrigeration (Dalian) Co., Ltd Affiliated company of the Company Dalian Honjo Chemical Co., Ltd Affiliated company of the Company Panasonic Cold-chain (Dalian) Co., Ltd Affiliated company of the Company Keinin-Grand Ocean Thermal Technology (Dalian) Co., Ltd Affiliated company of the Company Panasonic compressor (Dalian) Co., Ltd Affiliated company of the Company Dalian Sanyo Meica Electronics Co., Ltd Affiliated company of the Company Beijing Huashang Bingshan Refrigeration and Air-conditioning Machinery
Affiliated company of the Company Co., Ltd
Dalian Fuji Bingshan Vending Machine Co., Ltd Affiliated company of the Company Daliian Sanyo High-Efficient Refrigeration System Co., Ltd Affiliated company of the Company MHI Bingshan Refrigeration (Dalian) Co., Ltd Affiliated company of the Company Dalian Fuji Bingshan Vending Machine sales Co., Ltd Affiliated company of the Company 4. Other type of the related parties
Names of the related parties Relationships with the Company
Dalian Bingshan Group Refrigeration Equipment Co., Ltd Subsidiary of Dalian Bingshan Group
Dalian Third Refrigeration Equipment Factory Subsidiary of Dalian Bingshan Group
Beijing Bingshan Serial Refrigeration Equipment Co., Ltd Subsidiary of Dalian Bingshan Group
Dalian Spindle Cooling Towers Co., Ltd Affiliated company of Dalian Bingshan Group
Dalian Bingshan Metal Technology Co., Ltd Affiliated company of Dalian Bingshan Group
Dalian Mahe Level Control Electrical Appliances Co., Ltd Affiliated company of Dalian Bingshan Group
Linde Engineering (Dalian) Co., Ltd Affiliated company of Dalian Bingshan Group
BAC Dalian Co., Ltd Joint venture of Dalian Bingshan Group
Linde Engineering (Hangzhou) Co., Ltd Affiliated company of Dalian Bingshan Group
5. The transactions between the Company and the related parties
(1) The transactions between the Company and the related parties, whose balance sheet has been included in the
consolidated statement, and between the parties themselves have been offset.
(2) Purchases of goods from related parties
Details of
Names of the related parties 2015.01-06 2014.01-06
transaction
Panasonic Refrigeration (Dalian) Co., Ltd. Purchases of goods 716,562.50 884,503.24 Panasonic Cold-chain (Dalian) Co., Ltd. Purchases of goods 3,304,862.95 7,433,527.78 Panasonic Compressor (Dalian) Co., Ltd. Purchases of goods 784,752.13 32,239.21 Dalian Sanyo Meica Electronics Co., Ltd Purchases of goods 100,828.42 195,764.27 Dalian Bingshan Group Refrigeration Equipment
Purchases of goods 6,421,503.17 22,424,166.91 Co., Ltd
Details of
Names of the related parties 2015.01-06 2014.01-06
transaction
Dalian Third Refrigeration Equipment Factory Purchases of goods 4,812,153.85 3,807,851.00 Dalian Spindle Cooling Towers Co., Ltd Purchases of goods 322,813.68 133,333.33 BAC Dalian Co., Ltd Purchases of goods 13,730,297.37 25,317,502.60 Dalian Bingshan Engineering& Trading Co. , Ltd Purchases of goods 25,668,455.04 8,482,546.92 Dalian Bingshan Metal Technology Co., Ltd Purchases of goods 155,961.17 534,598.40 Daliian Sanyo High-Efficient Refrigeration System
Purchases of goods 763,338.56 1,068,325.94 Co., Ltd
Dalian Fuji Bingshan Vending Machine Co., Ltd Purchases of goods 242,187.94
Beijing Huashang Bingshan Refrigeration and Air-
Purchases of goods 1,350,427.36
conditioning Machinery Co., Ltd
Total 58,374,144.14 70,314,359.60 Sales of goods to related parties
Details of
Names of the related parties 2015.01-06 2014.01-06 transaction
Panasonic Refrigeration (Dalian) Co., Ltd. Sales of goods 1,781,171.34 4,947,472.34 Panasonic Cold-chain (Dalian) Co., Ltd. Sales of goods 15,006,735.92 10,599,811.03 Panasonic Compressor (Dalian) Co., Ltd. Sales of goods 3,404,239.17 3,637,584.26 Dalian Bingshan Group Refrigeration Equipment Co., Ltd Sales of goods 667,450.61 919,806.39 Dalian Third Refrigeration Equipment Factory Sales of goods 806,213.11 3,179,698.09 BAC Dalian Co., Ltd Sales of goods 1,090,316.25 Dalian Bingshan Engineering& Trading Co. , Ltd Sales of goods 40,431,688.39 51,801,413.84 Dalian Bingshan–P&A Recreation Development Engineering
Sales of goods 6,538.47 84,999.99 Co., Ltd
Beijing Bingshan Serial Refrigeration Equipment Co., Ltd Sales of goods 280,132.48 173,671.79 Beijing Huashang Bingshan Serial Refrigeration Equipment Co.,
Sales of goods 20,449,376.92 33,544,521.62 Ltd
Dalian Fuji Bingshan Vending Machine Co., Ltd Sales of goods 5,074,438.78 1,367,412.63 Dalian Bingshan Metal Technology Co., Ltd Sales of goods 51,224.53 69,888.46 Daliian Sanyo High-Efficient Refrigeration System Co., Ltd Sales of goods 401,446.85 255,563.57 MHI Bingshan Refrigeration (Dalian) Co.,Ltd Sales of goods 2,702,016.14 795,707.71 Dalian Spindle Cooling Towers Co., Ltd Sales of goods 194,966.55
Total 91,257,639.26 112,467,867.97
(3) Leasing fee from related party
Rental income of Rental income of Lessee Leasing assets
current period previous period Dalian Bingshan Group Co., Ltd. Offices
Dalian Bingshan Engineering& Trading
Offices
Co. , Ltd
|||
|-|-|
||2,100,000.00|
|2,100,000.00||

Leasing fee to related party
Rental fees of Rental fees of
Leaser Leasing assets
current period previous period
Dalian Bingshan Group Co., Ltd. Offices
Total
The company signed a leasing agreement with Dalian Bingshan Group Co., Ltd., and leased 576㎡ of offices to Dalian Bingshan Group Co., Ltd. The rental of offices is RMB 103,680.00 per year, and the effective period of the contract is 2 years.
The Company rent office and garage of Dalian Bingshan Group Co., Ltd., and the rental is RMB142,572.00 per year for 3 years.
The company signed rental contract with MHI Bingshan Refrigeration (Dalian) Co., Ltd., and rent# 6 workshop building located on No. 106 Liaohe East Rd, Dalian Economic and Technology Development Zone to MHI Bingshan Refrigeration (Dalian) Co., Ltd. The rental area is 15,259.04 square meters, and rent term till 16th July, 2029. The annual rent fee is RMB 4.2 million considering the time value of money.
(4) No guarantee with related companies.
(5) The borrowing of funds from related party
Name of the related party Amount Starting date Ending date Explanation
Dalian Bingshan Group Co., Borrowed for moving to new
10,000,000.00 2006.09.01
Ltd. location
Dalian Bingshan Group Co., Borrowed for building new
10,000,000.00 2015.02.16
Ltd. building
Total 20,000,000.00
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.
TheCompany‘s subsidiary Wuhan New World Refrigeration Industry Co., Ltd. borrowed RMB 10,000,000.00 from Dalian Bingshan Group Co., Ltd. for building new location, and the interests are counted same as bank loan.
(6)Related party asset transfer and debt restructuring
Not applicable.
6. Amounts due from/to related parties
(1) Notes receivable
Names of the related parties 30-06-2015 31-12-2014
|||
|-|-|
|1,868,896.93|1,868,896.93|
|12,130,543.83||
|223,496.21||
|280,507.23|1,875,903.71|
|498,649.81|227,535.94|
|1,200,000.00|2,000,000.00|
|5,000,000.00|5,000,000.00|

(2) Accounts paid in advance
Names of the related parties 30-06-2015 31-12-2014
|||
|-|-|
|317,250.00||
|1,214.00||
|510.00||
|672.00||
|5,963,284.85|2,698,283.12|

 (3) Accounts receivable
30-06-2015 31-12-2014
Names of the related parties Provision Provision Amount for bad Amount for bad debts debts
|||||
|-|-|-|-|
|1,216,391.58|63,569.58|91,852.00|7,367.60|
|2,500,731.01|125,036.55|2,735,787.19|136,789.36|
|6,224,616.79|311,230.84|2,082,509.89|109,302.98|
|960,950.07|48,047.50|1,155,043.14|57,752.16|
|5,600.00|280.00|5,600.00|280.00|
|380,455.52|19,022.78|378,597.55|18,929.88|
|65,180.00|3,259.00|215,180.00|10,759.00|
|20,978,367.08|1,083,718.35|3,713,359.64|220,467.98|
|3,568,795.65|178,439.78|318,714.88|15,935.74|
|389,104.32|19,455.22|142,907.59|7,145.38|
|1,007,786.86|50,389.34|461,942.00|23,097.10|
|127,286.20|6,364.31|||

(4) Other accounts receivable
30-06-2015 31-12-2014
Name of the related party
Provision Provision for bad
Amount Amount for bad
debts
debts
|||||
|-|-|-|-|
|34,598.32|1,729.92|||
|||137,520.50|6,876.03|

 (5) Notes payable
Names of the related parties 30-06-2015 31-12-2014
|||
|-|-|
||760,794.55|
|4,000,000.00|8,000,000.00|
|145,432.00|700,000.00|
|250,000.00||
|357,244.17|649,748.52|
|1,900,000.00|300,000.00|
|500,000.00|600,000.00|
||52,000.00|

 (6) Accounts payable
Names of the related parties 30-06-2015 31-12-2014
|||
|-|-|
|3,118,623.11|1,507,966.95|
|18,393,016.94|21,593,357.00|
|4,722,049.29|6,536,438.32|
||195,000.00|
|12,531.00|12,531.00|
|76,603.41|221,236.85|
|391,999.00|269,499.00|
|9,750,412.34|2,849,467.19|
|159,210.00|25.50|
|134,381.61|251,907.04|
|1,185,745.90|792,639.78|
|67,008.00||

(7) Accounts received in advance
Names of the related parties 30-06-2015 31-12-2014
|||
|-|-|
|1,669,075.20|394,474.36|
|20,000.00||

(8) Other accounts payable
Names of the related parties 30-06-2015 31-12-2014
|||
|-|-|
|20,489,740.68|10,015,792.27|
|1,000.00|1,000.00|
|18,173.95|17,441.44|
|483,441.71|475,863.95|

 XII Share-based payment
1.Overall situation
Total equity instrument awarded by the Company in the Period 10,150,000.00 Total equity instrument exercised in the Period 10,150,000.00 Total equity instrument that out of operation in the Period
5.56Yuan/Share, in three phases, the
Range of the outstanding exercise price for stock option at period-end remaining period in contract
and remaining period of the contract respectively has 12 months, 24
months and 36 months
Range of the outstanding exercise price for other equity instrument at
period-end and remaining period of the contract
2.Share-based payment settle by equity
In line with the fair value of the restricted shares at Determination method for the fair value of equity
grant date (not determining the fair value change after instrument at grant date
grant date)
Determination basis for the number of exercising equity
Determined by actual exercising numbers
instrument
Reason of major difference between the estimation in
N/A
the Period and last period
The aggregate amount of share-based payment that
51,160,208.00
reckoned into capital reserve with equity settlement
Total expenses recognized by share-based payment that
51,160,208.00
settle by equity in the Period
According to the 13th meeting of 6th session of the Board, resolution of the 1st extraordinary general meeting of 2015 and regulation of Restricted Shares Incentive Plan (Draft), the Company awarded the restricted shares to 41 equity incentive objects by way of orientate offering of A ordinary shares, totally 10,150,000 shares are rewarded with price of 5.56 Yuan/Share, and the capital amounting to RMB 56,434,000.00 in total after raised
The equity incentive objects of the Company including the directors serves in the Company (subsidiary included), the high-level management and other core employees that recognized as incentive objects by the Board while the equity incentive plan announced, the supervisors, independent directors, foreign directors and foreign managers are excluded.
XIII. Commitments and Contingency
1. No major commitments to be disclosed till June 30, 2015.
2. No other contingency needed disclosed till June 30, 2015.
XIV Post balance sheet issues
1. Significant events had not adjusted
(1) Issue shares
The resolution of 17th meeting of 6th session of the Board has deliberated and approved the plan
of private placement of RMB ordinary shares (A-share), the fund raised are used in the
relocation reform project of the Company.
(2) Investment
As for the 17th meeting of 6th session of the Board, the Company purchased the30% equity of Dalian Sanyo High-Efficient Refrigeration System Co., Ltd held by the Dalian Bingshan Group Co., Ltd. Dalian Sanyo High-Efficient Refrigeration System Co., Ltd. comes to the subsidiary of the Company after equity transfer completed.
As for the 18th meeting of 6th session of the Board, the Company purchased the19% equity of Wuhan New World Refrigeration Industry Co., Ltd. held by the Dalian Bingshan Group Co., Ltd and the30% equity of Wuhan New World Refrigeration Industry Co., Ltd. held by Sanyo Electric Co., Ltd. The Wuhan New World Refrigeration Industry Co., Ltd. comes to the wholly-owned subsidiary of the Company after equity transfer completed.
As for the 19th meeting of 6th session of the Board, the Company purchased the 29.212 percent equity of Changzhou Jingxue Freezing Equipment Co., Ltd. with 130 million yuan. In which, 25 percent equity of Jingxue Freezing held by Jingxue Industry and Trade and 4.212 percent equity of Jingxue Freezing held by Jingxue Investment .Changzhou Jingxue Freezing Equipment Co., Ltd. comes to the affiliated company of the Company after equity transfer completed.
(3) subsidiary absorbing and merging subsidiary
Resolution of 15th meeting of 6th session of the Board of directors agreed theCompany‘s subsidiary Dalian Bingshan Ryosetsu Quick Freezing Equipment Co., Ltd. to absorb and merge Dalian Bingshan Metal Processing Co., Ltd. The benchmark date for absorbing and merging was made on
31st
December 2014. After absorbing and merging, Dalian Bingshan Ryosetsu Quick Freezing Equipment Co., Ltd. will be the surviving company.
(4) Significant lawsuit, arbitration and commitment
Not applicable.
2. Significant sales return after balance sheet day
Not applicable.
3. There was no other post balance sheet significant events except above mentioned.
XV. Other important things needed disclosed.
1. There was no corrections of prior period accounting errors during the current period. 2. There was no debt restructuring during the current period.
3.There was no assets exchange during the current period.
4.The Companydidn’t design employer pension plan.
5. There was no discontinuing operation during the current period.
6. Segments information
(1) Standards and accounting policies of reporting segment
The company determines operating segment according to its organization structure,
management rules, inside reporting system. The operating segment should satisfy following
conditions:
① The operating segment could generate income and incure expenses from normal operating
activities；
②The management could evaluate its operating effect, and then decide resources assignment
and its operatingperformance；
③Thesegment‘s information of financial position and results of operations and cash flow
could be obtained.
The company determines reporting segment based on operating segments. The reporting
segment should satisfy one of the followingconditions:：
① The operatingsegment‘s income should be over10% of totalincome；
② The number of the operatingsegment‘s profit(or loss) should be over10% of the number of total profit and the number of total losses.
The transfer prices between segments were decided according to the market prices. The
expenses of common assets used by segments and other common expenses should be divided
among the segments according to the income.
(2) Elements of determining reporting segment and types of reportingsegments‘ products and
services
The company determined three reporting segments according to the geographic area, including Northeast China, Central China and East China. The Northeast China segment included the
company‘s head office and subsidiaries located in Dalian. The Central China segment included subsidiary company Wuhan New World Refrigeration Industrial Co., Ltd. And the East China
segment includedsubsidiary‘s subsidiary company Ningbo Bingshan Refrigeration Air
Conditioner Engineering Co., Ltd.
(3) The financial information of reporting segments
30-06-2015/2015.01-06
Items
Northeast
Central China East China Offset Total
China
||||||
|-|-|-|-|-|
|86,325.76|10,366.39|1,349.83|26,867.95|71,174.03|
|64,714.98|5,109.22|1,349.83||71,174.03|
|21,610.78|5,257.17||26,867.95||
|78,672.32|10,962.98|1,254.03|26,476.37|64,412.96|
|4,808.31||||4,808.31|
|257.10||-9.57||247.53|
|1,599.01|539.83|5.55||2,144.39|
|7,868.83|-540.89|101.12|391.58|7,037.48|
|538.48|8.40|22.28||569.16|
|7,330.34|-549.28|78.84|391.58|6,468.32|
|402,829.06|45,691.44|1,759.07|38,068.16|412,211.41|
|95,107.58|32,652.35|1,246.00|14,779.29|114,226.64|
|3,314.44|993.56|21.92||4,329.92|
|3,314.44|993.56|21.92||4,329.92|

The accounting policies of every operating segment were the same with described in the note
IV.The main accounting policies, accounting estimates and corrections of accounting errors.
7. There was no significant event which would affect the decision of investor during the
current period.
XVI. Notes to the financial statements of the parent company
1. Accounts receivable
(1) Classified by accounts nature
30-06-2015
Categories Balance Provision for doubtful debt
Book value Amount Proportion Amount Proportion
Major single amount and
bad debt provision
provided individually
||||||
|-|-|-|-|-|
|342,519,951.14|100.00%|64,577,110.72|18.85%|277,942,840.42|

Minor single amount but
bad debt provision
provided individually
|||||
|-|-|-|-|
|342,519,951.14|100.00%|64,577,110.72|18.85%|

 Continued:
31-12-2014
Categories Balance Provision for doubtful debt
Book value Amount Proportion Amount Proportion
Major single amount and
bad debt provision
provided individually
||||||
|-|-|-|-|-|
|277,119,839.64|100.00%|71,812,337.04|25.91%|205,307,502.60|

Minor single amount but
bad debt provision
provided individually
||||||
|-|-|-|-|-|
|277,119,839.64|100.00%|71,812,337.04|25.91%|205,307,502.60|

 Accounts receivable which bad debt provisions are provided on age basis in the group.
30-06-2015
Account ages
Amount Provision for bad debts Proportion rates
||||
|-|-|-|
|217,923,809.11|6,985,356.92|5.00%|
|41,125,235.35|4,112,523.53|10.00%|
|29,859,188.65|8,957,756.59|30.00%|
|15,918,040.97|7,959,020.48|50.00%|
|5,656,119.31|4,524,895.45|80.00%|
|32,037,557.75|32,037,557.75|100.00%|
|342,519,951.14|64,577,110.72||

(2) Provision for bad debts accrued, regain or switch back in the period
In the current period, RMB 5,988,915.93 were regained.
(3) The write-off of accounts receivable during the reporting period
Items Written off amount
16 clients 1,246,310.39
The 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) Accounts receivable top 5 on amount
Provision for bad
Companies Amount Proportion(%)
debts
Dalian Xinghai Bay Development and 11,242,693.00 3.28 11,242,693.00 Construction Management Centre
Beijing Huashang Bingshan Refrigeration and Air- 9,064,857.08 2.65 453,242.85 conditioning Machinery Co., Ltd.
Xuzhou Yurun agricultural products global 8,200,000.00 2.39 410,000.00 procurement center
7,190,812.00 2.10 359,540.60 Yili Twinings Biological Technology Co., Ltd.
7,178,265.85 2.10 2,121,817.76 COFCOMeat（Suqian）Co., Ltd.
42,876,627.93 12.52 14,587,294.21 Total
The ending account receivable increased35.38% over that of period-begin, mainly because the account receivable for goods from subsidiaries increased.
2. Other accounts receivable
(1) Classified by account nature
30-06-2015
Items Balance Provision for doubtful debt
Book value Amount Proportion Amount Proportion
Major single amount and bad
debt provision provided
individually
||||||
|-|-|-|-|-|
|24,941,184.54|100.00%|2,166,400.94|8.69%|22,774,783.60|

Minor single amount but bad
debt provision provided
individually
|||||
|-|-|-|-|
|24,941,184.54|100.00%|2,166,400.94|8.69%|

Continued：
31-12-2014
Items Balance Provision for doubtful debt
Book value Amount Proportion Amount Proportion
Major single amount and bad
debt provision provided
individually
||||||
|-|-|-|-|-|
|23,056,627.39|100.00%|1,790,721.85|7.77%|21,265,905.54|

Minor single amount but bad
debt provision provided
individually
||||||
|-|-|-|-|-|
|23,056,627.39|100.00%|1,790,721.85|7.77%|21,265,905.54|

Other accounts receivable which bad debt provisions are provided on age basis in the group
30-06-2015
Account ages
Amount Provision for bad debts Proportion rates
||||
|-|-|-|
|20,572,848.85|1,028,642.45|5.00%|
|2,874,837.59|287,483.76|10.00%|
|659,047.48|197,714.24|30.00%|
|250,000.00|125,000.00|50.00%|
|284,450.62|227,560.49|80.00%|
|300,000.00|300,000.00|100.00%|
|24,941,184.54|2,166,400.94||

(2) Provision for bad debts accrued, regain or switch back in the period
In the current period, RMB 387,267.59 were accrued provision for bad debts, and no amount
was switched back or regained.
(3)The other accounts receivable need to be written off during the reporting period.
Items Written off amount
2 clients 11,588.50
The 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) The nature of other accounts receivable
Items 30-06-2015 31-12-2014
|||
|-|-|
|22,141,139.57|20,951,410.09|
|1,020,544.97|97,241.00|
|1,779,500.00|2,007,976.30|

 Total 24,941,184.54 23,056,627.39
(5) Top 5 on amount of other accounts receivable
Ending balance Companies Nature Amount Age Proportion of provision for bad debts
||
|-|
|18,000,000.00|
|1,779,500.00|
|1,586,623.95|
|600,000.00|
|500,000.00|
|22,466,123.95|

|||
|-|-|
|72.17%|900,000.00|
|7.13%|177,950.00|
|6.36%|102,482.37|
|2.41%|80,000.00|
|2.00%|150,000.00|
|90.07%|1,410,432.37|

 3. Long-term equity investments
30-06-2015 31-12-2014
Nature Provision
Provision for
Book balance for Book value Book balance Book value impairment
impairment
|||||
|-|-|-|-|
|125,591,805.57|125,591,805.57|107,629,071.42|107,629,071.42|
|1,033,513,959.00|1,033,513,959.00|1,039,229,738.85|1,039,229,738.85|
||1,159,105,764.57|||
|1,159,105,764.57||1,146,858,810.27||

(1) Subsidiaries
Provision for Provision Increased
Beginning Decreased during impairment of
Names during current Ending balance for balance current period the current
period
period
impairment
||||
|-|-|-|
|20,036,841.62|2,712,834.15|22,749,675.77|
|12,936,700.00||12,936,700.00|
|12,501,344.60|9,249,900.00|21,751,244.60|
|36,506,570.00||36,506,570.00|
|1,522,117.80||1,522,117.80|
|5,745,097.40||5,745,097.40|
|17,980,400.00||17,980,400.00|
|400,000.00||400,000.00|
||6,000,000.00|6,000,000.00|
||17,962,734.15||

(2) Jointventures& affiliated companies
Increase/Decrease
Provision
Provision Beginning Gains and losses Adjustment Chang Cash bonus or for
Names Ending balance for balance recognized of other es of profits impairment
Increased Decreased Others impairment under the equity comprehens other announced to of the
method ive income equity issue current
period
1. Joint ventures
|||||
|-|-|-|-|
|3,553,919.97|-377,150.35||3,176,769.62|
|3,553,919.97|-377,150.35||3,176,769.62|
|13,716,985.57|1,302,858.87||15,019,844.44|
|155,826,086.27|-3,011,036.73|5,200,000.00|147,615,049.54|
|9,403,913.18|231,620.31|1,203,061.37|8,432,472.12|
|215,573,606.48|2,965,904.37|8,000,000.00|210,539,510.85|
|42,333,942.39|7,612,764.78|9,600,000.00|40,346,707.17|
|432,515,006.40|29,441,902.46|34,000,000.00|427,956,908.86|
|23,233,848.71|-889,967.73||22,343,880.98|
|29,294,087.63|-2,308,578.44||26,985,509.19|

Increase/Decrease
Provision
Provision Beginning Gains and losses Adjustment Chang Cash bonus or for
Names Ending balance for balance recognized of other es of profits impairment
Increased Decreased Others impairment under the equity comprehens other announced to of the
method ive income equity issue current
period
||||||
|-|-|-|-|-|
|1,425,989.62|1,754,200.00|-512,013.13||2,668,176.49|
|89,896,843.61||12,411,144.13||102,307,987.74|
|22,455,509.02||105,357.69||22,560,866.71|
||2,450,000.00|1,110,275.29||3,560,275.29|
|1,035,675,818.88|4,204,200.00|48,460,231.87|58,003,061.37|1,030,337,189.38|
||4,204,200.00|48,083,081.52|58,003,061.37||

4. Total operating income and operating cost
(1)Business income and cost
2015.01-06 2014.01-06
Items
Income Cost Income Cost
|||||
|-|-|-|-|
|294,886,893.24|244,284,674.93|460,374,451.87|377,487,851.62|
|4,988,277.85|3,038,280.79|10,595,768.10|9,459,681.22|
|299,875,171.09|247,322,955.72|470,970,219.97|386,947,532.84|

 5. Gain/ (loss) from investments
Category
Items 2015.01-06 2014.01-06
|||
|-|-|
|3,915,784.39|2,100,000.00|
|48,083,081.52|53,897,497.58|
||681,816.41|
|310,000.00|1,754,944.75|

Total 52,308,865.91 58,434,258.74 XVII. Other supplementary Information
1. Non-recurring profits and losses
Non-recurring gains and losses items Amount Notes
||
|-|
|26,473.73|
|1,447.50|
|1,751,055.19|

 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 135,520.95 Total
Less：Affected amount of income tax from non-recurring gains and losses 303,540.74 Net amount of non-recurring gains and losses
Included: Attributable to minorityshareholders‘ equity 13,509.15
Attributable to the owners of parent company 1,597,447.48
2. Earnings per share
The weighted
EPS
Items
average ROE
Basic EPS Diluted EPS
||||
|-|-|-|
|3.26%|||
|3.18%|0.18|0.18|

3. The differences between domestic and international accounting standards
There were no significant differences between domestic and international accounting standards among theCompany‘s financial statements of the current period.
Board of Directors of Dalian Refrigeration Co., Ltd.
August 19, 2015