Dalian Refrigeration Company Limited
Auditor's Report
DHS(2016) No.003393
Da Hua Certified PublicAccountants（Special Generalpartnership）
Auditors' Report (Translation)
DHS(2016) No.003393
To the Board of Directors of Dalian Refrigeration CompanyLimited：
We have audited the consolidated and the parentcompany’s financial statements of Dalian
Refrigeration Company Limited, which comprise the Balance Sheet as at 31 December 2015, and the
Income Statement, Cash Flow Statement and Statement of Changes inOwner’s Equity for the year then ended, and the notes to the financial statements.
1.The responsibility of theCompany’s management
It is the responsibility of Dalian Refrigeration CompanyLimited’s management to prepare and present
the financial statements fairly. And the responsibilities include: (1) Prepare the financial statements in
conformity with Accounting Standards for Business Enterprises issued by Ministry of Finance, and to be presented fairly. (2) Design, conduct and maintain the internal control related to the financial statements to prevent the big material misstatement with the reason of fraud and mistakes.
2.Auditors’ responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We
conducted our audit in accordance with the Auditing Standards for Chinese Certified Public Accountants. Those standards require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement.
An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the
financial statement. The selected audit procedure depended on the judgment of CPA includes identify
the risks of the material misstatements due to the fraud and mistakes. In evaluating the risks, we are
only concerned with the internal control systems so as to design an appropriate audit procedure, but not
DHS(2016) No.003393 Auditors' Report
to express our opinion on the effectiveness of the internal control systems. An audit also includes
assessing the accounting principles used and significant estimates made by the management, as well
as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
3.Auditing opinion
In our opinion, the financial statements are prepared in conformity with Accounting Standards for
Business Enterprises and, in all material respects, present fairly the consolidated and the parent
company’s financial position of Dalian Refrigeration Company Limited as at 31 December 2015, and the results of operations and cash flow for the year then ended.
Da Hua Certified Public Accountants Chinese CPA: Sui Guojun
（Special GeneralPartnership）
Beijing, China Chinese CPA:Wang Shuhuanhina Dalian, China Chinese CPA:
29th March, 2016
|||||
|-|-|-|-|
|Dalian Refrigeration Company Limited||||
|Consolidated Balance Sheet||||
|As of 31st December 2015||||
|（All amounts in RMB Yuan unless otherwise stated）||||
|Assets|Notes 6|31 Dec 2015|31 Dec 2014|
|Current assets：||||
|Monetary fund|6-1|244,789,824.53|508,511,466.02|
|Financial assets fair value movement for the year||||
|Financial derivative||||
|Notes receivable|6-2|71,699,517.68|14,855,957.70|
|Accounts receivable|6-3|671,423,836.87|438,880,830.12|
|Advances to suppliers|6-4|44,218,887.91|19,053,269.75|
|Interest receivable|6-5|-|4,998,982.40|
|Dividends receivable|6-6|44,600.00||
|Other accounts receivable|6-7|22,755,328.21|34,266,444.02|
|Inventories|6-8|259,099,149.47|314,879,106.56|
|Assets hold for sale||||
|Current portion of non-current assets||||
|Other current assets|6-9|16,478,711.86|2,335,139.79|
|Total current assets||1,330,509,856.53|1,337,781,196.36|
|Non-current assets：||||
|Available-for-sale financial assets|6-10|733,275,249.09|42,428,388.70|
|Held-to-maturity investments||||
|Long-term receivables||||
|Long-term equity investments|6-11|1,220,367,767.73|1,039,229,738.85|
|Investment property|6-12|24,497,584.00|25,108,909.00|
|Fixed asset-original cost|6-13|449,907,430.32|414,293,269.31|
|Project in construction|6-14|137,025,384.58|18,515,449.46|
|Construction materials||||
|Fixed assets pending for disposal||||
|Productive biological assets||||
|Oil and gas assets||||
|Intangible assets|6-15|158,417,802.57|153,913,310.25|
|Development disbursements||||
|Goodwill|6-16|1,440,347.92||
|Long-term deferred expenses|6-17|5,857,504.95|5,873,398.99|
|Deferred income tax assets|6-18|21,200,936.73|16,786,587.33|
|Other non-current assets||||
|Total non-current assets||2,751,990,007.89|1,716,149,051.89|
|Total assets||4,082,499,864.42|3,053,930,248.25|
|(Attached Notes to statements are part of the consolidated financial statments)||||
|Legal Representative Person: Chief Finance Officer: Finance Manager：||||

|||||
|-|-|-|-|
|Dalian Refrigeration Company Limited||||
|Consolidated Balance Sheet (Continue)||||
|As of 31st December 2015||||
|（All amounts in RMB Yuan unless otherwise stated）||||
|Liability and Equity|Notes 6|31 Dec 2015|31 Dec 2014|
|Current liabilities：||||
|Short-term loans|6-19|82,600,000.00|60,000,000.00|
|Financial assets fair value movement for the year||||
|Financial derivative||||
|Notes payable|6-20|234,189,011.72|109,546,502.61|
|Accounts payable|6-21|660,398,503.26|511,076,537.82|
|Accounts received in advance|6-22|70,458,014.46|137,629,315.42|
|Payroll payable|6-23|51,857,345.29|55,993,637.27|
|Taxes payable|6-24|15,701,578.36|2,642,729.69|
|Interest payable||||
|Dividend payable|6-25|533,156.00|533,156.00|
|Other accounts payable|6-26|99,890,290.15|60,075,814.04|
|Liability hold for sale||||
|Current portion of non-current liabilities||||
|Other current liabilities||||
|Total current liabilities||1,215,627,899.24|937,497,692.85|
|Non-current liabilities：||||
|Long-term borrowings||||
|Bonds payable||||
|Include: Perferance share||||
|Perpetual Bond||||
|Long-term payable||||
|Long-term employee benefits payable||||
|Grants payable||||
|Provisions||||
|Deferred revenue|6-27|49,378,296.00|52,773,884.19|
|Deferred tax liabilities|6-18|103,627,029.06||
|Other non-current liabilities||||
|Total non-current liabilities||153,005,325.06|52,773,884.19|
|Total liabilities||1,368,633,224.30|990,271,577.04|
|Equity：||||
|Share capitals|6-28|360,164,975.00|350,014,975.00|
|Other equities||||
|Include: Perferance share||||
|Perpetual Bond||||
|Capital surpluses|6-29|630,264,991.95|582,288,006.29|
|Less:Treasury Share|6-30|39,503,800.00||
|Other Comprehensive Income|6-31|589,988,118.05|2,768,286.72|
|Specialized reserve|6-32|||
|Surplus reserves|6-33|580,769,740.16|545,788,247.99|
|Retained earnings|6-34|525,925,066.25|486,167,740.13|
|Currency translation reserve||||
|Equity attributable to parent company||2,647,609,091.41|1,967,027,256.13|
|*Minority interests||66,257,548.71|96,631,415.08|
|Total owner's equity||2,713,866,640.12|2,063,658,671.21|
|Total liabilities and owner's equity||4,082,499,864.42|3,053,930,248.25|
|(Attached Notes to statements are part of the consolidated financial statments)||||
|Legal Representative Person: Chief Finance Officer: Finance Manager：||||

|||||
|-|-|-|-|
|Dalian Refrigeration Company Limited||||
|Consolidated profit and loss statement||||
|for the year 2015||||
|（All amounts in RMB Yuan unless otherwise stated）||||
|Item|Notes 6|Current Year|Previous Year|
|1.Total operating income|6-35|1,607,518,439.61|1 ,425,715,596.96|
|2.Total operating cost||1,606,832,356.89|1 ,420,273,278.31|
|Including：operating cost|6-35|1,309,843,811.63|1 ,086,550,652.73|
|Taxes and surcharge|6-36|12,588,252.81|1 1,709,558.03|
|Selling and distribution expenses|6-37|80,099,755.98|1 23,270,829.61|
|Administrative expenses|6-38|187,046,595.49|1 85,701,061.45|
|Financial expenses|6-39|130,314.66|-6,114,199.04|
|Impairment losses|6-40|17,123,626.32|1 9,155,375.53|
|Add：gain from fair-value changes（“-”for loss）||||
|Gain/ (loss) from investment|6-41|128,908,120.37|1 03,940,832.81|
|Including：investment income from associates and joint ventures||125,543,630.87|1 01,428,429.25|
|3.Operating profits（“－”for loss）||129,594,203.09|1 09,383,151.46|
|Add：Non-business incomes|6-42|7,459,363.54|1 5,166,450.39|
|Including：gain from disposal of non-current assets||167,463.99|3 90,490.35|
|Less：Non-business expenses|6-43|1,105,912.29|5 61,532.64|
|Including：loss on disposal of non-current assets||229,182.73|4 12,897.02|
|4.Profit before tax（“－”for loss）||135,947,654.34|1 23,988,069.21|
|Less：Income tax expenses|6-44|4,732,632.19|9 ,468,787.48|
|5.Net profit（“－”for loss）||131,215,022.15|1 14,519,281.73|
|Net profit attributable to parent company||129,947,307.39|1 15,439,722.39|
|*Profit/loss attributable to minority share-holders||1,267,714.76|-920,440.66|
|6.Net other comprehensive income after tax||587,219,831.33|-15,000.00|
|Other comprehensive income after tax attributable to parent company||587,219,831.33|-15,000.00|
|I. Other comprehensive incomes that unable to reclassify as profit||-|-|
|i.Gain or loss for revaluation on defined benefit plans||||
|ii.Other comprehensive incomes that unable to reclassify as profitunder equity method.||||
|II. Other comprehensive incomes that able to reclassify as profit||587,219,831.33|-15,000.00|
|i.Other comprehensive incomes that be able to reclassify as profit underequity method.|||-15,000.00|
|ii.Gain or loss from fair-value changes on available for sale financialassets||587,219,831.33||
|iii.Reclassify held-to-maturity investment to hold-to-sale financial assetsgain or loss||||
|iv. The effective cash flow hedgeing gain or loss||||
|v. Currency translation difference||||
|vi.Gain from before a invested subsidiary that no longer has control||||
|Other comprehensive income attributable to minority share-holders after tax||||
|7.Total comprehensive income||718,434,853.48|1 14,504,281.73|
|Total comprehensive income attributable to parent company||717,167,138.72|1 15,424,722.39|
|*Total comprehensive income attributable to minority share-holders||1,267,714.76|-920,440.66|
|8.Earnings per share：||||
|Basic earnings per share||0.36|0 .33|
|Diluted earnings per share||0.36|0 .33|
|(Attached Notes to statements are part of the consolidated financial statments)||||
|Legal Representative Person: Chief Finance Officer: Finance Manager：||||

|||||
|-|-|-|-|
|Dalian Refrigeration Company Limited||||
|Consolidated Cash Flow||||
|for the year 2015||||
|（All amounts in RMB Yuan unless otherwise stated）||||
|Item|Notes 6|Current Year|Previous Year|
|1.Cash flows from operating activities：||||
|Cash received from sales and services||1,196,653,392.32|1,090,103,866.93|
|Tax refunds||1,064,168.82|871,659.27|
|Other cash received relating to operating activities|6-45|43,260,055.50|37,350,278.00|
|Total cash inflows from operating activities||1,240,977,616.64|1,128,325,804.20|
|Cash paid for goods and services||801,379,413.53|572,248,043.66|
|Cash paid to and on behalf of employees||278,537,533.58|276,307,722.58|
|Payment of taxes and surcharges||99,382,229.31|118,866,955.58|
|Other cash paid relating to operating activities|6-45|112,246,914.60|132,407,309.91|
|Total cash outflows from operating activities||1,291,546,091.02|1,099,830,031.73|
|Net cash flows from operating activities||-50,568,474.38|28,495,772.47|
|2.Cash flows frow investing activities：||||
|Cash receipts from withdraw of investments|||15,286,617.40|
|Cash received from investment income||66,637,747.39|42,461,536.50|
|Net cash from disposal of fixed assets, intangible assets and other long-term assets||287,315.00|10,147,370.00|
|Net cash received from disposal of subsidiaries and other business units||||
|Other cash receipts relating to investing activities||||
|Total cash inflows from investing activities||66,925,062.39|67,895,523.90|
|Cash paid for fixed assets, intangible assets and other long-term assets||60,687,631.79|48,206,418.04|
|Cash payments for investments||222,172,610.81|15,781,000.00|
|Net cash paid for acquiring subsidiaries and other business units|6-45|20,464,427.15||
|Net cash used in other investing activities||||
|Total cash outflows from investing activities||303,324,669.75|63,987,418.04|
|Net cash flows from investing activities||-236,399,607.36|3,908,105.86|
|3.Cash flows from financing activities：||||
|Cash proceeds from investments by others||60,434,000.00||
|Including：cash received by subsidiaries from minority shareholders' investment||||
|Cash received from borrowings||129,000,000.00|67,510,000.00|
|Cash receipts related to other financing activities|6-45|32,953,876.63|10,844,272.75|
|Total cash inflows from financing activities||222,387,876.63|78,354,272.75|
|Cash repayments for debts||106,500,000.00|44,010,000.00|
|Cash payments for distribution of dividends, profit and interest expenses||61,877,081.78|60,282,709.40|
|Including: dividends or profit paid by subsidiaries to minority shareholders||2,502,522.92|3,756,741.65|
|Other cash paid relating to financing activities|6-45|20,711,136.86|33,037,404.13|
|Total cash outflows from financing activities||189,088,218.64|137,330,113.53|
|Net cash flows from financing activities||33,299,657.99|-58,975,840.78|
|4.Effect of foreign exchange rate changes on cash and cash equivalents||-165,031.04|-209,608.51|
|5.Net increase in cash and cash equivalents||-253,833,454.79|-26,781,570.96|
|Add: beginning balance of cash and cash equivalents||475,557,589.39|502,339,160.35|
|6. Ending balance of cash and cash equivalents||221,724,134.60|475,557,589.39|
|(Attached Notes to statements are part of the consolidated financial statments)||||
|Legal Representative Person: Chief Finance Officer: Finance Manager：||||

||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||Dalian Refrigeration Company Limited||||||||||
||Consolidated Statement Of Changes In Equity||||||||||
||for the year 2015||||||||||
||（All amounts in RMB Yuan unless otherwise stated）||||||||||
|Item|Current Year||||||||||
||Equity to the parent company||||||||Minority interests|Total owner's equity|
||Share capitals|Other equities|Capital surpluses|Less:treasuryshares|OtherComprehensiveIncome|Specializedreserve|Surplus reserves|Retained earnings|||
|1.Ending balance of prior period|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|
|Add:increase/decrease due to changes inaccounting policies|||||||||||
|Increase/decrease due to corrections oferrors in Prior Period|||||||||||
|Merge and acquisition with company withsame ultimate control|||||||||||
|Others|||||||||||
|2.Beginning balance of current year|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|
|3.Increase/decrease for current year（“-”fordecrease)|10,150,000.00||47,976,985.66|39,503,800.00|587,219,831.33||34,981,492.17|39,757,326.12|-30,373,866.37|650,207,968.91|
|I.Total comprehensive income|||||587,219,831.33|||129,947,307.39|1,267,714.76|718,434,853.48|
|II.Owner's contributions and withdrawing ofcapital|10,150,000.00||47,976,985.66|39,503,800.00|||||-29,139,058.21|-10,515,872.55|
|i.Capital contributions from owners|10,150,000.00||35,784,208.92|39,503,800.00|||||-29,139,058.21|-22,708,649.29|
|ii.Other equities from owners|||||||||||
|iii.Share-based payment recorded in owner'sequity|||12,190,520.00|||||||12,190,520.00|
|iv.Others|||2,256.74|||||||2,256.74|
|III.Profits distribution|||||||34,981,492.17|-90,189,981.27|-2,502,522.92|-57,711,012.02|
|i.Appropriation of surplus reserve|||||||34,981,492.17|-34,981,492.17|||
|ii.Distribution to owner/shareholder||||||||-54,024,746.25|-2,502,522.92|-56,527,269.17|
|iii.Others||||||||-1,183,742.85||-1,183,742.85|
|IV.Transfer within owner's equity|||||||||||
|i.Capital reserve transferred to paid-in capital|||||||||||
|ii.Surplus reserve transferred to paid-incapital|||||||||||
|iii.Recover of loss by surplus reserve|||||||||||
|iv.Gain or loss for revaluation on definedbenefit plans|||||||||||
|v.Others|||||||||||
|V.Specialized reserve|||||||||||
|i.Current year accrue||||||1,982,950.50||||1,982,950.50|
|ii.Current year deploy||||||1,982,950.50||||1,982,950.50|
|VI.Others|||||||||||
|4.Ending balance of current year|360,164,975.00||630,264,991.95|39,503,800.00|589,988,118.05||580,769,740.16|525,925,066.25|66,257,548.71|2,713,866,640.12|
|(Attached Notes to statements are part of the consolidated financial statments)|||||||||||
||L e g a l R e p r e s e n t a tive Person:|||Chief Finance Officer:|||||Finance Manager：||

||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||Dalian Refrigeration Company Limited||||||||||
||Consolidated Statement Of Changes In Equity||||||||||
||for the year 2015||||||||||
||（All amounts in RMB Yuan unless otherwise stated）||||||||||
|Item|Previous Year||||||||||
||Equity to the parent company||||||||Minority interests|Total owner's equity|
||Share capitals|Other equities|Capital surpluses|Less:treasuryshares|OtherComprehensiveIncome|Specializedreserve|Surplus reserves|Retained earnings|||
|1.Ending balance of prior period|350,014,975.00||584,861,283.21||||505,533,065.25|466,608,867.00|102,089,597.39|2,009,107,787.85|
|Add:increase/decrease due to changes inaccounting policies|||-2,783,286.72||2,783,286.72||||||
|Increase/decrease due to corrections oferrors in Prior Period|||||||||||
|Merge and acquisition with company withsame ultimate control|||||||||||
|Others|||||||||||
|2.Beginning balance of current year|350,014,975.00||582,077,996.49||2,783,286.72||505,533,065.25|466,608,867.00|102,089,597.39|2,009,107,787.85|
|3.Increase/decrease for current year（“-”fordecrease)|||210,009.80||-15,000.00||40,255,182.74|19,558,873.13|-5,458,182.31|54,550,883.36|
|I.Total comprehensive income|||||-15,000.00|||115,439,722.39|-920,440.66|114,504,281.73|
|II.Owner's contributions and withdrawing ofcapital|||210,009.80||||||-2,281,000.00|-2,070,990.20|
|i.Capital contributions from owners|||||||||-2,281,000.00|-2,281,000.00|
|ii.Other equities from owners|||||||||||
|iii.Share-based payment recorded in owner'sequity|||||||||||
|iv.Others|||210,009.80|||||||210,009.80|
|III.Profits distribution|||||||40,255,182.74|-95,880,849.26|-2,256,741.65|-57,882,408.17|
|i.Appropriation of surplus reserve|||||||40,255,182.74|-40,255,182.74|||
|ii.Distribution to owner/shareholder||||||||-52,502,246.25|-2,256,741.65|-54,758,987.90|
|iii.Others||||||||-3,123,420.27||-3,123,420.27|
|IV.Transfer within owner's equity|||||||||||
|i.Capital reserve transferred to paid-in capital|||||||||||
|ii.Surplus reserve transferred to paid-incapital|||||||||||
|iii.Recover of loss by surplus reserve|||||||||||
|iv.Gain or loss for revaluation on definedbenefit plans|||||||||||
|v.Others|||||||||||
|V.Specialized reserve|||||||||||
|i.Current year accrue|||||||||||
|ii.Current year deploy|||||||||||
|VI.Others|||||||||||
|4.Ending balance of current year|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|
|(Attached Notes to statements are part of the consolidated financial statments)|||||||||||
||L e g a l R e p r e s e n t a tive Person:|||C h ie f F i n a n c e O f f ic e r :|||||Finance Manager：||

|||||
|-|-|-|-|
|Dalian Refrigeration Company Limited||||
|Consolidated Balance Sheet||||
|As of 31st December 2015||||
|（All amounts in RMB Yuan unless otherwise stated）||||
|Assets|Notes 16|31 Dec 2015|31 Dec 2014|
|Current assets：||||
|Monetary fund||149,314,329.13|407,573,197.89|
|Financial assets fair value movement for the year||||
|Financial derivative||||
|Notes receivable||40,690,578.22|15,711,896.93|
|Accounts receivable|16-1|196,691,940.87|205,307,502.60|
|Advances to suppliers||22,523,974.19|8,470,706.14|
|Interest receivable|||4,998,982.40|
|Dividends receivable||||
|Other accounts receivable|16-2|43,691,612.45|21,265,905.54|
|Inventories||122,212,395.56|164,069,128.20|
|Assets hold for sale||||
|Current portion of non-current assets||||
|Other current assets||7,918,692.08|1,659,559.91|
|Total current assets||583,043,522.50|829,056,879.61|
|Non-current assets：||||
|Available-for-sale financial assets||731,960,106.59|41,113,246.20|
|Held-to-maturity investments||||
|Long-term receivables||||
|Long-term equity investments|16-3|1,460,958,799.28|1,146,858,810.27|
|Investment property||24,497,584.00|25,108,909.00|
|Fixed asset-original cost||246,435,789.69|239,721,541.76|
|Project in construction||109,277,419.44|18,280,777.19|
|Construction materials||||
|Fixed assets pending for disposal||||
|Productive biological assets||||
|Oil and gas assets||||
|Intangible assets||90,015,524.05|89,919,836.54|
|Development disbursements||||
|Goodwill||||
|Long-term deferred expenses||||
|Deferred income tax assets||5,033,031.30|5,537,394.66|
|Other non-current assets||8,675,787.57|8,054,057.26|
|Total non-current assets||2,676,854,041.92|1,574,594,572.88|
|Total assets||3,259,897,564.42|2,403,651,452.49|
|(Attached Notes to statements are part of the consolidated financial statments)||||
|Legal Representative Person: Chief Finance Officer: Finance Manager：||||

|||||
|-|-|-|-|
|Dalian Refrigeration Company Limited||||
|Consolidated Balance Sheet (Continue)||||
|As of 31st December 2015||||
|（All amounts in RMB Yuan unless otherwise stated）||||
|Liability and Equity|Notes 16|31 Dec 2015|31 Dec 2014|
|Current liabilities：||||
|Short-term loans||27,600,000.00||
|Financial assets fair value movement for the year||||
|Financial derivative||||
|Notes payable||177,683,261.74|66,979,512.02|
|Accounts payable||293,389,981.61|302,053,679.95|
|Accounts received in advance||25,768,511.15|96,325,866.23|
|Payroll payable||11,208,398.45|13,854,152.86|
|Taxes payable||873,038.30|-2,710,393.15|
|Interest payable||||
|Dividend payable||533,156.00|533,156.00|
|Other accounts payable||55,807,703.77|49,270,430.42|
|Liability hold for sale||||
|Current portion of non-current liabilities||||
|Other current liabilities||||
|Total current liabilities||592,864,051.02|526,306,404.33|
|Non-current liabilities：||||
|Long-term borrowings||||
|Bonds payable||||
|Include: Perferance share||||
|Perpetual Bond||||
|Long-term payable||||
|Long-term employee benefits payable||||
|Grants payable||||
|Provisions||||
|Deferred revenue||3,704,296.00|5,985,884.19|
|Deferred tax liabilities||103,627,029.06||
|Other non-current liabilities||||
|Total non-current liabilities||107,331,325.06|5,985,884.19|
|Total liabilities||700,195,376.08|532,292,288.52|
|Equity：||||
|Share capitals||360,164,975.00|350,014,975.00|
|Other equities||||
|Include: Perferance share||||
|Perpetual Bond||||
|Capital surpluses||640,764,783.03|582,288,006.29|
|Less:Treasury Share||39,503,800.00||
|Other Comprehensive Income||588,759,190.43|1,539,359.10|
|Specialized reserve||||
|Surplus reserves||580,769,740.16|545,788,247.99|
|Retained earnings||428,747,299.72|391,728,575.59|
|Currency translation reserve||||
|Total owner's equity||2,559,702,188.34|1,871,359,163.97|
|Total liabilities and owner's equity||3,259,897,564.42|2,403,651,452.49|
|(Attached Notes to statements are part of the consolidated financial statments)||||
|Legal Representative Person: Chief Finance Officer: Finance Manager：||||

|||||
|-|-|-|-|
|Dalian Refrigeration Company Limited||||
|Consolidated profit and loss statement||||
|for the year 2015||||
|（All amounts in RMB Yuan unless otherwise stated）||||
|Item|Notes 16|Current Year|Previous Year|
|1.Operating income|16-4|5 41,475,251.65|8 31,687,739.32|
|Less:Operating cost|16-4|446,609,627.15|6 55,510,761.43|
|Taxes and surcharge||2,499,783.19|4 ,827,468.68|
|Selling and distribution expenses||4,045,795.92|5 7,137,295.02|
|Administrative expenses||109,448,960.03|1 14,245,449.21|
|Financial expenses||- 3,914,069.63|-10,417,316.17|
|Impairment losses||- 4,905,815.96|14,675,473.81|
|Add：gain from fair-value changes（“-”for loss）||||
|Gain/ (loss) from investment|16-5|132,772,430.15|1 09,335,620.28|
|Including：investment income from associates and joint ventures||125,536,756.26|1 01,428,429.25|
|2.Operating profits（“－”for loss）||120,463,401.10|105,044,227.62|
|Add：Non-business incomes||5,314,670.19|1 2,165,875.28|
|Including：gain from disposal of non-current assets||108,540.13|3 37,665.38|
|Less：Non-business expenses||302,694.05|2 36,615.58|
|Including：loss on disposal of non-current assets||49,365.05|1 86,615.58|
|3.Profit before tax（“－”for loss）||125,475,377.24|116,973,487.32|
|Less：Income tax expenses||- 549,585.31|5 ,078,507.78|
|4.Net profit（“－”for loss）||126,024,962.55|111,894,979.54|
|5.Net other comprehensive income after tax||587,219,831.33|-15,000.00|
|I. Other comprehensive incomes that unable to reclassify as profit||-|-|
|i.Gain or loss for revaluation on defined benefit plans||||
|ii.Other comprehensive incomes that unable to reclassify asprofit under equity method.||||
|II. Other comprehensive incomes that able to reclassify as profit||587,219,831.33|-15,000.00|
|i.Other comprehensive incomes that be able to reclassify asprofit under equity method.|||-15,000.00|
|ii.Gain or loss from fair-value changes on available for salefinancial assets||587,219,831.33||
|iii.Reclassify held-to-maturity investment to hold-to-salefinancial assets gain or loss||||
|iv. The effective cash flow hedgeing gain or loss||||
|v. Currency translation difference||||
|vi.Gain from before a invested subsidiary that no longer hascontrol||||
|6.Total comprehensive income||713,244,793.88|1 11,879,979.54|
|7.Earnings per share：||||
|Basic earnings per share||||
|Diluted earnings per share||||
|(Attached Notes to statements are part of the consolidated financial statments)||||
|Legal Representative Person: Chief Finance Officer: Finance Manager：||||

||||
|-|-|-|
|Dalian Refrigeration Company Limited|||
|Consolidated Cash Flow|||
|for the year 2015|||
|（All amounts in RMB Yuan unless otherwise stated）|||
|Item|Current Year|Previous Year|
|1.Cash flows from operating activities：|||
|Cash received from sales and services|389,780,864.03|649,803,180.34|
|Tax refunds|||
|Other cash received relating to operating activities|24,780,873.67|26,001,801.17|
|Total cash inflows from operating activities|414,561,737.70|675,804,981.51|
|Cash paid for goods and services|286,847,416.04|366,830,223.80|
|Cash paid to and on behalf of employees|110,830,881.99|152,130,182.41|
|Payment of taxes and surcharges|28,319,534.99|66,753,359.34|
|Other cash paid relating to operating activities|28,857,855.35|77,470,172.84|
|Total cash outflows from operating activities|454,855,688.37|663,183,938.39|
|Net cash flows from operating activities|-40,293,950.67|12,621,043.12|
|2.Cash flows frow investing activities：|||
|Cash receipts from withdraw of investments|6,843,000.00|15,286,617.40|
|Cash received from investment income|68,332,980.68|43,204,338.19|
|Net cash from disposal of fixed assets, intangible assets and other long-term assets|106,580.00|10,005,000.00|
|Net cash received from disposal of subsidiaries and other business units|||
|Other cash receipts relating to investing activities|||
|Total cash inflows from investing activities|75,282,560.68|68,495,955.59|
|Cash paid for fixed assets, intangible assets and other long-term assets|38,025,775.39|40,255,232.98|
|Cash payments for investments|224,885,444.96|15,781,000.00|
|Net cash paid for acquiring subsidiaries and other business units|26,993,388.94||
|Net cash used in other investing activities|||
|Total cash outflows from investing activities|289,904,609.29|56,036,232.98|
|Net cash flows from investing activities|-214,622,048.61|12,459,722.61|
|3.Cash flows from financing activities：|||
|Cash proceeds from investments by others|56,434,000.00||
|Cash received from borrowings|27,600,000.00||
|Cash receipts related to other financing activities|16,145,665.64|3,499,990.45|
|Total cash inflows from financing activities|100,179,665.64|3,499,990.45|
|Cash repayments for debts|||
|Cash payments for distribution of dividends, profit and interest expenses|54,732,538.85|52,502,246.10|
|Including: dividends or profit paid by subsidiaries to minority shareholders|||
|Other cash paid relating to financing activities|34,245,194.98|16,145,665.64|
|Total cash outflows from financing activities|88,977,733.83|68,647,911.74|
|Net cash flows from financing activities|11,201,931.81|-65,147,921.29|
|4.Effect of foreign exchange rate changes on cash and cash equivalents|-274,330.63|38.62|
|5.Net increase in cash and cash equivalents|-243,988,398.10|-40,067,116.94|
|Add: beginning balance of cash and cash equivalents|391,427,532.25|431,494,649.19|
|6. Ending balance of cash and cash equivalents|147,439,134.15|391,427,532.25|
|(Attached Notes to statements are part of the consolidated financial statments)|||
|Legal Representative Person: Chief Finance Officer: Finance Manager：|||

|||||||||||
|-|-|-|-|-|-|-|-|-|-|
||Dalian Refrigeration Company Limited|||||||||
||Consolidated Statement Of Changes In Equity|||||||||
||for the year 2015|||||||||
||（All amounts in RMB Yuan unless otherwise stated）|||||||||
|Item|Current Year|||||||||
||Share capitals|Other equities|Capital surpluses|Less:treasuryshares|OtherComprehensiveIncome|Specializedreserve|Surplus reserves|Retained earnings|Total owner's equity|
|1.Ending balance of prior period|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|
|Add:increase/decrease due to changes inaccounting policies||||||||||
|Increase/decrease due to corrections oferrors in Prior Period||||||||||
|Others||||||||||
|2.Beginning balance of current year|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|
|3.Increase/decrease for current year（“-”fordecrease)|10,150,000.00||58,476,776.74|39,503,800.00|587,219,831.33||34,981,492.17|37,018,724.13|688,343,024.37|
|I.Total comprehensive income|||||587,219,831.33|||126,024,962.55|713,244,793.88|
|II.Owner's contributions and withdrawing ofcapital|10,150,000.00||58,476,776.74|39,503,800.00|||||29,122,976.74|
|i.Capital contributions from owners|10,150,000.00||46,284,000.00|39,503,800.00|||||16,930,200.00|
|ii.Other equities from owners||||||||||
|iii.Share-based payment recorded in owner'sequity|||12,190,520.00||||||12,190,520.00|
|iv.Others|||2,256.74||||||2,256.74|
|III.Profits distribution|||||||34,981,492.17|-89,006,238.42|-54,024,746.25|
|i.Appropriation of surplus reserve|||||||34,981,492.17|-34,981,492.17||
|ii.Distribution to owner/shareholder||||||||-54,024,746.25|-54,024,746.25|
|iii.Others||||||||||
|IV.Transfer within owner's equity||||||||||
|i.Capital reserve transferred to paid-in capital||||||||||
|ii.Surplus reserve transferred to paid-incapital||||||||||
|iii.Recover of loss by surplus reserve||||||||||
|iv.Gain or loss for revaluation on definedbenefit plans||||||||||
|v.Others||||||||||
|V.Specialized reserve||||||||||
|i.Current year accrue||||||1,982,950.50|||1,982,950.50|
|ii.Current year deploy||||||1,982,950.50|||1,982,950.50|
|VI.Others||||||||||
|4.Ending balance of current year|360,164,975.00||640,764,783.03|39,503,800.00|588,759,190.43||580,769,740.16|428,747,299.72|2,559,702,188.34|
|6. Ending balance of cash and cash equivalents||||||||||
||L e g a l R e p r e s e n tative Person:|||Chief Finance Officer:|||Finance Manager：|||

|||||||||||
|-|-|-|-|-|-|-|-|-|-|
||Dalian Refrigeration Company Limited|||||||||
||Consolidated Statement Of Changes In Equity|||||||||
||for the year 2015|||||||||
||（All amounts in RMB Yuan unless otherwise stated）|||||||||
|Item|Previous Year|||||||||
||Share capitals|Other equities|Capital surpluses|Less:treasuryshares|OtherComprehensiveIncome|Specializedreserve|Surplus reserves|Retained earnings|Total owner's equity|
|1.Ending balance of prior period|350,014,975.00||583,632,355.59||||505,533,065.25|372,591,025.04|1,811,771,420.88|
|Add:increase/decrease due to changes inaccounting policies|||-1,554,359.10||1,554,359.10|||||
|Increase/decrease due to corrections oferrors in Prior Period||||||||||
|Others||||||||||
|2.Beginning balance of current year|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|
|3.Increase/decrease for current year（“-”fordecrease)|||210,009.80||-15,000.00||40,255,182.74|19,137,550.55|59,587,743.09|
|I.Total comprehensive income|||||-15,000.00|||111,894,979.54|111,879,979.54|
|II.Owner's contributions and withdrawing ofcapital|||210,009.80||||||210,009.80|
|i.Capital contributions from owners||||||||||
|ii.Other equities from owners||||||||||
|iii.Share-based payment recorded in owner'sequity||||||||||
|iv.Others|||210,009.80||||||210,009.80|
|III.Profits distribution|||||||40,255,182.74|-92,757,428.99|-52,502,246.25|
|i.Appropriation of surplus reserve|||||||40,255,182.74|-40,255,182.74||
|ii.Distribution to owner/shareholder||||||||-52,502,246.25|-52,502,246.25|
|iii.Others||||||||||
|IV.Transfer within owner's equity||||||||||
|i.Capital reserve transferred to paid-in capital||||||||||
|ii.Surplus reserve transferred to paid-incapital||||||||||
|iii.Recover of loss by surplus reserve||||||||||
|iv.Gain or loss for revaluation on definedbenefit plans||||||||||
|v.Others||||||||||
|V.Specialized reserve||||||||||
|i.Current year accrue||||||||||
|ii.Current year deploy||||||||||
|VI.Others||||||||||
|4.Ending balance of current year|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|
|6. Ending balance of cash and cash equivalents||||||||||
||L e g a l R e p r e s e n tative Person:|||C h ie f F i n a n c e O f f ic e r :||||Finance Manager：||

Dalian Refrigeration Company Limited
Notes to the Financial Statements of year 2015
DALIAN REFRIGERATION COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER, 2015
(All amounts in RMB Yuan unless otherwise stated)
I.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 (“A shares”) and domestically listed foreign investment ordinary shares (“B shares”) were listed on the Shenzhen Stock Exchange in the PRC in December 1993 and March 1998 respectively. The Company together with its
subsidiaries is hereinafter collectively referred to as the “Group”. As at 31 December, 2015, the registered
capital of the Company was RMB360,164,975.00. 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., and there is no ultimate controller.
According to the report on granting the restricted stock to the incentive object deliberated by the 15th Meeting of 6th Session of the Board of Directors of the Company, and the restricted stock plan draft of the Company,
the Board has implemented and completed granting the restricted stock. After the completion of granting the
restricted stock, the total share capital of the Company will increase to 360,164,975 shares from the original
350,014,975 shares.
The principal activities of the Company are manufacture, sale and installation of refrigeration equipments.
The financial statements was permitted to disclose by the board of directors of the Company on 29 March,
2016.
II. The scope of consolidation
There are 9 entities included in the current consolidated financial statements, including:
Proportion of Proportion of votes Names of subsidiaries Types Level
shareholding（%） （%）
Dalian Bingshan Group Engineering Co., Ltd. Fully owned 1 100 100
Dalian Bingshan Group Sales Co., Ltd. Fully owned 1 100 100
Dalian Bingshan Air-conditioning Equipment Co., Holding
1 70 70
Ltd. subsidiary
Dalian Bingshan Metal Processing Co., Ltd. Fully owned 1 100 100
Holding
Dalian Bingshan Guardian Automation Co., Ltd. 1 60 60
subsidiary
Dalian Bingshan Ryosetsu Quick Freezing Holding
1 70 70
Equipment Co., Ltd. subsidiary
Wuhan New World Refrigeration Industrial Co.,
Fully owned 1 100 100
Ltd.
Bingshan Technical Service（Dalian） Co.,Ltd. Fully owned 1 100 100
Dalian Sanyo High-efficient Refrigeration System Holding
1 55 55
Co., Ltd. subsidiary
Bingshan Technical Service(Dalian)Co.,Ltd. and Dalian Sanyo High-Efficient Refrigeration System Co., Ltd.
were included in the scope of consolidation at the year end.
III . 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
Dalian Refrigeration Company Limited
Notes to the Financial Statements of year 2015
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.
IV.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 was 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. Each transaction items, conditions and economy influence in confirm with the following one or
several conditions, when realizing enterprise combination by steps. Several transaction events were
considered as a package deal and conducted accounting method
(1) The transaction was set up in the same time or had considered the influence to each others:
(2) The transaction only stand as a whole, a perfect commercial result can be arrived.
(3) A transaction incurred depends on at least one transaction occurred;
(4) A transaction is not economical, however, together with other transaction are economical.
B. Business combination under the same control
The assets and liabilities that the combining party obtains in a business combination shall be measured on the basis of their carrying amount in the combined party (including goodwill formed from the final control party
purchase combined party) combing party on the combining date. As for the balance between the carrying
amount of the net assets obtained by the combining party and the carrying amount of the consideration paid by it (or the total par value of the shares issued), the additional paid-in capital shall be adjusted. If the additional
paid-in capital is not sufficient to be offset, the retained earnings shall be adjusted.
In the event that the contingent consideration exists and the accrued liabilities or assets need to be recognized, the difference between the accrued liabilities or assets and the settlement amount of subsequent contingent
consideration shall adjust the capital surplus (capital premium or stock premium), and if the capital surplus is
not sufficient, adjust the retained earnings.
Where the corporate merger and acquisition is realized through multiple transactions, if these transactions
belong to a package transaction, each transaction shall be accounted as a transaction to obtain the right to
control; if these transactions do not belong to a package transaction, on the date the right to control is obtained, the difference between the initial investment costs of the long-term equity investment and the carrying value of long-term equity investment before theM&A plus the carrying value of the new consideration paid to further get the shares on the date ofM&A shall be charged against the capital surplus, and if the capital surplus is
insufficient, the difference shall be charged against the remaining earnings. For the equity investment held
before the date ofM&A, the other comprehensive earnings accounted for using the equity method or
recognized with the financial tool and accounted for and recognized using the measurement criteria shall not
be accounted, until the investment is disposed, at which time, the investment shall be accounted on the same basis as the investee directly disposes related assets or liabilities; the changes to theowner’s equity in the
investee’s net assets accounted and recognized using the equity method other than the net profit or losses,
Dalian Refrigeration Company Limited
Notes to the Financial Statements of year 2015
other comprehensive earnings and profit distribution, shall not be accounted, until the investment is disposed, at which time, it shall be carried over to the current profits or losses.
C. Business combination not under the same control
The Company 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 values, and shall record the balances between
them and their carrying amounts into the profits and losses at the current period.
The Company shall recognize the positive balance between the combination costs and the fair value of the
identifiable net assets it obtains from the acquiree as business reputation. The Company shall record, upon
recheck, the negative balance between the combination costs and the fair value of the identifiable net assets it obtains from the acquiree into the profit and loss of the current period.
Where a merger of enterprises not under the same control is realized through multiple transactions step by
step, if these transactions belong to a package transaction, each transaction shall be accounted as a
transaction to obtain the right to control; if these transactions do not belong to a package transaction, and the equity investment held before the date ofM&A is accounted using the equity method, the sum of the carrying
value of the equity investment in the acquiree held before the date of the acquisition, plus the new investment costs on the date of the acquisition shall be the initial investment costs of the investment; other comprehensive earnings of the equity investment held before the date of acquisition accounted and recognized using the
equity method shall be accounted on the same basis as the investee directly disposes relevant assets or
liabilities when the investment is disposed. If the equity investment held before the date ofM&A is recognized using the financial tool and accounted using the measurement criterion, the sum of the fair value of the equity investment on the date ofM&A plus the new investment costs shall be the initial investment costs at the date
ofM&A. The difference between the fair value and carrying value of the held equity and changes to the
accumulated fair value charged against other comprehensive earnings shall be fully converted the current
investment earnings at the date ofM&A.
D. Relevant costs incurred from the business combination
The intermediary and other relevant administrative expenses such as audit, legal and valuation advisory for
business combinations are recognized in profit or loss for the current year when incurred. Transaction costs of equity or debt securities issued as the considerations of business combination are included in the initial
recognition amounts.
6. Basis of consolidation
A. Scope of consolidation
The scope of consolidated financial statements shall be confirmed based on the control. All subsidiaries
(including individual entities controlled by the Company) of the Company shall be included into the
consolidated financial statement.
B. Consolidation process
The Company based on the financial statements of itself and its subsidiaries, in line with other relevant
information, prepare the consolidated financial statements. The consolidated financial statements the
Company prepare was considered the whole enterprise group as a accountant entity, in line with the
requirement of presentation, recognition and calculation in ASBE and a uniform accountant policies, reflect the financial situation, operation results and cash flows of the whole enterprise group.
The accounting policies and accounting period adopted by the subsidiaries that are included into the scope of consolidated financial statement consistent with those the Company adopts. If the accounting policies and
accounting period adopted by a subsidiary are different from those adopted by the Company, necessary
adjustments shall be made to the financial statements under the accounting policies and accounting period
adopted by the Company.
Consolidated financial statement shall be prepared by the parent company after the effects of the internal
transactions between the Company and its subsidiaries and between its subsidiaries themselves on the
consolidated balance sheets, consolidated income statement, consolidated cash flow and consolidated
statement of change inowners’ equity are offset. If standing at the point of view of enterprise group
consolidated financial statement, and its recognition of common trade differ from the accounting entity of
Company or subsidiary, adjust it from the point of view of the enterprise group.
Minorityshareholders’ portions of equities and income in subsidiaries shall be separately stated respectively
underowners’ equity in the consolidated balance sheet and net profit in the consolidated income statement.
For the deficit of current period exceeding the share in the beginning ofowner’s equity, the balance shall offset against the minorityshareholder’s equity.
For subsidiary obtained by business combination under same control, adjust the financial statement on the
Dalian Refrigeration Company Limited
Notes to the Financial Statements of year 2015
base of book value of assets, liabilities (including goodwill formed by the financial control party purchasing the subsidiary) in financial statement of final control party.
For subsidiary obtained by business combination not under same control, adjust the financial statement on the base of identifiable net assets on purchase date
(1) Increasing the subsidiaries or business
During the reporting period, for the added subsidiary companies for business combination under the same
control, shall adjust the beginning balance of the consolidated balance sheet, and shall involve the incomes,
expenses and profits of the subsidiary companies incurred from the beginning of the current period to the end of reporting year into consolidated income statement; and shall include the cash flow of the subsidiary
companies from the beginning of the current period to the reporting period into the consolidated cash flow
statement. Meanwhile, relevant items in the statements shall be compared and adjusted with the reporting
subject after the consolidation being regarded to have always existed since the control party start to control.
Owning to the reasons such as the additional investment, for the subsidiaries could execute control on the
investees under the same control, should be regard as the individuals participated in the combination that to
execute adjustment by existing as the current state when the ultimate control party began to control. For the
equity investment held before acquiring the control right of the combined parties, the confirmed relevant gains and losses, other comprehensive income and the changes of other net assets since the date of the earlier one between the date when acquiring the original equity right and the date when the combine parties and
combined ones were under the same control to the combination date, should be respectively written down and compared with the beginning balance of retained earnings or the current gains and losses during the statement period.
During the reporting period, for the added subsidiary companies for business combination note under the same control, shall adjust the beginning balance of the consolidated balance sheet, and shall involve the incomes,
expenses and profits of the subsidiary companies incurred from purchase date to the end of reporting year into consolidated income statement; and shall include the cash flow of the subsidiary companies from purchase
date to the reporting period into the consolidated cash flow statement.
Owning to the reasons such as the additional investment that the subsidiaries could execute the control of the investees under different control, the Company shall re-measure the equity interests in the acquiree held by it before the acquisition date according to the equityinterests’ fair value on the acquisition date. And the
difference between the fair value and the book value is recorded into current investment gains. Where the
equity interests in the acquiree held by the Company which involved with the other comprehensive profits and changes of the otherowners’ equities except for the net gains and losses, other comprehensive profits as well as the profits distribution under the measurement of equity method before the acquisition date involves other
comprehensive incomes, the relevant other comprehensive incomes and the changes of the otherowners’
equities are restated as investment gains for the period which the acquisition date belongs to, with the
exception of the other comprehensive incomes occurred because of the changes of net liabilities or net assets of the defined benefit pension plans be re-measured for setting by the investees.
(2) Disposal of the subsidiaries or business
1) General disposing method
The consolidated cash flow statement shall include the cash flow from the beginning of the current period to
the settlement date.
Where the Company loses the control over a former subsidiary due to disposal of some equity investments or other reasons, the Company re-measures the remaining equity investments after the disposal according to the fair value on the date when the control ceases. The consideration obtained in the equity disposal, plus the fair value of the remaining equities, less theCompany’s share of net assets in the former subsidiary calculated
from the acquisition date according to the former shareholding ratio, is recorded into the investment gains for
the period when the control ceases. Other comprehensive incomes in relation to the equity investments in the former subsidiary are restated as investment gains for the period when the control ceases. Where the equity
interests in the subsidiary held by the Company which involved with the other comprehensive profits and
changes of the otherowners’ equities except for the net gains and losses, other comprehensive profits as well as the profits distribution when losing control, the relevant other comprehensive incomes and the changes of
the otherowners’ equities are restated as investment gains for current period , with the exception of the other comprehensive incomes occurred because of the changes of net liabilities or net assets of the defined benefit pension plans be re-measured for setting by the investees.
2) Step by step disposing the subsidiaries
Where the Company losses control on its original subsidiaries due to step by step disposal of equity
investments through multiple transactions, all the transaction terms, conditions and economic impact of the
disposal ofsubsidiaries’ equity investment are in accordance with one or more of the following conditions,
Dalian Refrigeration Company Limited
Notes to the Financial Statements of year 2015
which usually indicate the multiple transactions should be considered as a package deal for accounting
treatment:
a. The transaction was set up in the same time or had considered the influence to each others;
b. The transaction only stand as a whole, a perfect commercial result can be arrived.
c. A transaction incurred depends on at least one transaction occurred;
d. A transaction is not economical, however, together with other transaction are economical.
When disposing each transaction of the Company losses control on its subsidiaries due to disposal of equity
investments belonging to a package deal, should be considered as a transaction and conduct accounting
treatment. However, Before losing control, every disposal cost and corresponding net assets balance of
subsidiary of disposal investment are confirmed as other comprehensive income in consolidated financial
statements, which together transferred into the current profits and losses in the loss of control , when the
Company losing control on its subsidiary.
When disposing each transaction of the Company losses control on its subsidiaries due to disposal of equity
investments not belonging to a package deal, before which losing the control right, should execute the
accounting disposal according to the partly dispose the equity investment of the subsidiaries under the
situation not losing the control right; when losing the control right, should execute accounting disposal
according to the general disposing method disposal of the subsidiaries.
C. Purchasing minority equities of the subsidiaries
If there is any difference between the newly obtained long-term equity investment due to theCompany’s
acquisition of minority interests and theCompany’s share of identifiable net assets which began to be
calculated from the purchase date (or the combination date) in the subsidiary calculated according to the newly increased shareholding ratio, the stock premium under capital reserve in the balance sheet shall be adjusted
according to the said difference. If the stock premium under capital reserve is not sufficient to be offset, the
retained profit is adjusted.
D. Disposing the equity investment of the subsidiaries under the situation not losing the control right The differences between the disposal income due to theCompany’s disposal of some equity investments in a subsidiary without losing the control over the subsidiary and theCompany’s share of net assets in the
subsidiary calculated according to the disposed long-term equity investments, the stock premium under capital reserve in the balance sheet shall be adjusted according to the said difference. If the stock premium under
capital reserve is not sufficient to be offset, the retained profit is adjusted.
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.
Dalian Refrigeration Company Limited
Notes to the Financial Statements of year 2015
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
A.Business of foreign currencies
As for a foreign currency transaction, the amount in the foreign currency shall be translated into the amount in the Renminbi at the spot exchange rate of the transaction date. On balance sheet date, the foreign currency
monetary items shall be translated as the spot exchange rate on the balance sheet date, the balance occurred thereof shall be recorded into the profits and losses at the current period except that the balance of exchange arising from foreign currency borrowings for the purchase and construction or production of assets eligible for capitalization shall be measured in the light of capitalization principle. The foreign currency non-monetary
items measured at the historical cost shall still be translated at the spot exchange rate on the transaction date, of which the amount of functional currency shall not be changed.
The foreign currency non-monetary items measured at the fair value shall be translated at the spot exchange rate on the confirming date of fair value, of which the balance of exchange shall be included into the profit and loss of the current period or capital reserve. If it belongs available for sale foreign currency non-monetary items, the difference form of exchange record into other comprehensive income
B. Translation for foreign currency financial statements
All the assets and liabilities items should be translated as CNY according to the basic rate of the spot rate on
the balance sheet date; All the equity item except " Undistributed profits" item, other item adopt spot exchange rate to exchange. Income and cost item in profit statement, adopt average exchange rate of opening period
and closing period. The translation balance of foreign financial statement incurred in line with the aforesaid
translation, recorded into other comprehensive income.
When disposing an overseas business, the Company shall shift the balance, which is presented under the
items of theowner’s equities in the balance sheet and arises from the translation of foreign currency financial statements related to this oversea business, into the disposal profits and losses of the current period. When
disposing part of equity investment or the decrease of holding of oversea operating share equity proportion but not losing control of the oversea operation due to other reason, the translation reserve related to disposal part of oversea operation will belong to the translation balance of minority shareholders, and not transfer into
current profits or losses. When disposing part of equity of joint venture or association enterprise oversea
operation, the translation reserve related to the oversea operation will transfer into current profits or losses in
line with the disposal proportion.
10. The recognition and measurement of financial instruments and the transfer of the financial
instruments
A. Categorization of financial instruments
The Management team shall divide the financial instruments pursuant to the purpose to acquire the said
financial assets or undertake the financial liabilities: the financial assets and liabilities which are measured at
their fair values and of which the variation is included in the current profits and losses, including transactional
financial assets and liabilities and the designated financial assets and liabilities which are measured at their fair values and of which the variation is included in the current profits and losses; the investments which will be
held to their maturity; loans and the account receivables; financial assets available for sale; and other financial
liabilities.
Dalian Refrigeration Company Limited
Notes to the Financial Statements of year 2015
B. Recognition basis and calculation method of financial instrument
(1)Financial assets (liabilities) measured by fair value and the changes included in the current gains and losses The financial assets (or financial liabilities) that are measured by fair value with its change s recognized in the current profits and losses, including the transactional financial assets or financial liability and the financial
assets or financial liabilities that are directly designated to be measured by fair value with its change
recognized in the current losses and profits.
Transactional financial assets or financial liabilities mean the financial assets or financial liabilities that meet
any one of the following conditions:
1) The purpose of obtaining the financial assets or financial liabilities is to sell, repurchase or redeem it in a
short time;
2) It is a part of the identifiable combination of financial instrument that the company manages together and
there is objective evidence of a recent pattern of short-term profit making;
3) It belongs to the derivative financial instrument, but is designated as the derivative instrument of valid
arbitrage instrument or belongs to the derivation instrument of financial guarantee contract, or it is connected
to the equity instrument investment for which there is no quotation in active market and its fair value cannot be reliably measured, the derivative tool that shall be settled through delivering the equity instrument excluded.
Only if one of the following conditions is met, could the financial assets or financial assets be designated as the financial assets or financial liability that shall be measured by fair value with changes recognized in profit or
loss in the period:
1) The designation is able to eliminate or obviously reduce the discrepancies in the recognition or
measurement of relevant gains or losses arising from the different basis of measurement of the financial
assets or financial liability;
2) The official written document of risk management or investment strategies of the enterprise concerned have described that the said combination of financial assets, the combination of financial liabilities, or the
combination of financial assets and financial liabilities will be managed and evaluated on the basis of their fair values and will be reported to the key management personnel.
3) The mixed instruments include one or more embedded derivative instrument, unless the embedded
derivative instrument does not materially change the cash flow of the mixed instrument, or it is obvious that the embedded instrument shall not be split from the relevant mixed instrument;
4) The mixed instrument that include the embedded derivative instrument that shall be split but cannot be
separately measured when it is obtained or on the subsequent date of balance sheet.
For the financial assets or financial liabilities that is measured by fair value with its change recognized in the
current profits or losses, the company will use the fair value (deducting the cash dividend that is announced
but not issued, or the bond interest that is due but has not be claimed) as the initially recognized amount, and the related transaction costs shall be recognized in the current profits and losses. The interest or cash dividend obtained during the holding period shall be recognized as the investment earning, and at the end of the period, the change in fair value shall be recognized in the current profits and losses. At the time of disposal, the
difference between its fair value and the initially recognized amount shall be recognized as the investment
earnings, and at the same time, the change in fair value shall be recognized as the profit or loss.
(2) Accounts receivable
Thecreditor’s rights arising from selling goods or providing service by the Company and othercreditor’s rights to other enterprises held by the company that are not quoted in an active market, including accounts
receivable, notes receivable, other receivables, long-term receivables, etc., the contract or agreement price
should be taken as the initial recognition amount. If it has the nature of financing, it shall be recognized by
present value.
Difference between the amount received and book value of the receivables shall be included into the profit or loss of the current period upon collection or disposal.
(3) Available-for-sale financial assets
Available-for-sale financial assets were referred to the non-derivative financial assets available for sale, as well as the financial assets other than the other financial asset classes in the initial recognition.
When available-for-sale financial assets are acquired, its initial amount shall be recognized at the fair value
(excluding cash dividends that have been declared but not yet distributed or bond interests that have matured but not yet received) plus transaction expense thereof. Interest or cash dividend received in holding period
were recognized as investment income. Profits or losses from the change in fair value of available-for-sale
financial assets except impairment losses and translation balance form foreign monetary financial assets,
directly record into other comprehensive income. When disposing available-for-sale financial assets recorded the difference between the price and the book value of the financial assets into investment profits or losses,
meanwhile, roll out the disposal part of the accumulative amount of change in fair value originally and directly
Dalian Refrigeration Company Limited
Notes to the Financial Statements of year 2015
recorded into other comprehensive income and record into investment profits or losses.
The equity instrument investment without offer and its fair value without reliable calculation, and derivative
financial assets linked to and settled by the equity instruments, measured at cost.
(4)Other financial liabilities
Other financial liabilities shall be initially recognized at fair value plus transaction costs. The subsequent
measurement shall be made by adopting amortized costs.
C. Recognition and measurement of transfer of financial assets
Where an enterprise has transferred nearly all of the risks and rewards relating to the ownership of the
financial asset to the transferee, it shall stop recognizing the financial asset. If it retains nearly all of the risks
and rewards relating to the ownership of the financial asset, it shall not stop recognizing the financial asset.
Substance over form philosophy should be adopted to determine whether the transfer of a financial asset can satisfy the conditions as described in these Standards for de-recognition of a financial asset. An enterprise
shall differentiate the transfer of a financial asset into the entire transfer and the partial transfer of financial
assets. If the transfer of an entire financial asset satisfies the conditions for stop recognition, the difference
between the amounts of the following 2 items shall recorded in the profits and losses of the current period:
(1) The carrying amount of the transferred financial asset;
(2) The aggregate consideration received from the transfer, and the accumulative amount of the changes of
the fair value originally recorded in theowner’s equities (in the event that the financial asset involved in the
transfer is a financial asset available for sale).
If the transfer of partial financial asset satisfies the conditions for stopping recognition, the carrying amount of the entire financial asset transferred shall be allocated at their respective relevant fair value, between the
portion whose recognition has stopped and the portion whose recognition has not stopped, and the difference between the amounts of the following 2 items:
(1) The carrying amount of the portion whose recognition has stopped;
(2) The aggregate consideration of the portion whose recognition has stopped, and the portion of the
accumulative amount of the changes in the fair value originally recorded in theowner’s equities which is
corresponding to the portion whose recognition has stopped (in the event that the financial asset involved in
the transfer is a financial asset available for sale).
The transfer of financial assets does not meet the de-recognition condition, the financial assets shall continue to be recognized, and the consideration received will be recognized as financial liabilities.
D. Termination of recognition of financial liabilities
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. Where the Company (debtor) enters into an agreement with a
creditor so as to substitute the existing financial liabilities by way of any new financial liability, and if the
contractual stipulations regarding the new financial liability is substantially different from that regarding the
existing financial liability, it shall terminate the recognition of the existing financial liability, and shall at the same time recognize the new financial liability.
Where the Company makes substantial revisions to some or all of the contractual stipulations of the existing
financial liability, it shall terminated the recognition of the existing financial liability or part of it, and at the same time recognize the financial liability after revising the contractual stipulations as a new financial liability.
Where the recognition of a financial liability is totally or partially terminated, the Company concerned shall
include into the profits and losses of the current period the gap between the carrying amount which has been
terminated from recognition and the considerations it has paid (including the non-cash assets it has transferred out and the new financial liabilities it has assumed).
Where the Company buys back part of its financial liabilities, it shall distribute, on the report day, the carrying
amount of the whole financial liabilities in light of the comparatively fair value of the part that continues to be
recognized and the part whose recognition has already been terminated. The gap between the carrying
amount which is distributed to the part whose recognition has terminated and the considerations it has paid
(including the non-cash assets it has transferred out and the new financial liabilities it has assumed) shall be
recorded into the profits and losses of the current period.
E. Determination of the fair value of financial assets and financial liabilities
As for theCompany’s financial assets and liabilities measured at their fair values, where there is an active
market, the closing quoted prices in the active market shall be used to determine the fair values thereof.
Initially obtained or derivative financial assets or the market transaction price of bared financial liabilities was
considered as the basis of fair value; Where there is no active market for a financial assets and financial
liabilities, the Company concerned shall adopt value appraisal techniques to determine its fair value. When
evaluating, the Company adopt the valuation technique with sufficient useful data and supported by other
Dalian Refrigeration Company Limited
Notes to the Financial Statements of year 2015
information which suitable for the current situation, choose a input in concern with the characteristics of assets or liabilities considered in relevant assets or liabilities transaction with the market players, and as much as
possible, give prior to using the relevant observable input under the situation that, the observable input value
or it is not feasible to obtain, use unobservable input value.
F. Testing method of impairment and withdrawal method of provision for impairment on financial
assets (excluding accounts receivable)
Except for financial assets which are measured at their fair values and of which the variation is included in the current profits and losses, the Company checks the book values of all other financial assets on the balance
sheet date. If there is objective evidence proving that a financial asset is impaired, an impairment provision is made.
The objective evidences of impairment provision of financial assets include but not limited to:
(1) Issuer or debtor had serious financial difficulties.
(2)The debtor violates the items of the contact, such as violate a treaty or overdue to repay the interest or
principal, etc.
(3) The creditor considering the factors of economy or law makes concession to the debtor who had serious
financial difficulty.
(4)The debtor probably may go out of business or had other financial recombination.
(5) Due to the issuer had serious financial difficulty; the financial assets cannot continue to trade in the active
market.
(6)The cash flow of a kind of asset in a group of financial assets decrease or not was beyond recognition,
however, after conducting the overall evaluation in line with the public data, the estimate cash flow of the group of financial assets actually decrease and gaugeable since initial recognition, if the repay ability of the debtor
steadily worsened, or the increase of unemployment rate, the decrease in the price of guaranty or the industry downturn that the district or country the debtor in, etc.
(7)The great disadvantage change in technology, market, economy or legal environment that operation place that issuer of equity instrument locate at, which lead to the irrecoverable of investment cost of the equity
instrument investors.
(8)The fair value occurred seriously or non-transient decrease.
The specific impairment provision methods of financial assets were as follows:
(1) Provision for impairment of available-for-sale financial assets:
On balance sheet date, the Company executes individually inspection on each available-for-sale financial
statement, if the fair value of the equity instruments which invests on the balance sheet date is lower than its
initial investment cost for more than50% (including50%) or lower than its initial investment cost for the
duration time for more than 1 year (including 1 year), which indicates that it had occurred impairment; if the fair value of the equity instruments which invests on the balance sheet date is lower than its initial investment cost for more than20% (including20%) but not reaches at50%, the Company will comprehensively considerate the other relevant factors such as the price volatility etc. and will judge the equity investment whether had occurred impairment.
The aforesaid "cost" recognized in line with the initial investment cost of available for sale financial instrument deducting principal recovered, amount amortized and the impairment losses recorded into profits or losses.
“fair value" recognized through the closing price of Securities Exchange at period end unless the investment of available for sale equity instrument was in the restricted stock trade period. For investment of available for sale equity instrument was in the restricted stock trade period, recognized in line with the closing price of Securities Exchange at period end deducting the risk of market player cannot sell the equity instrument, thus, require
compensation.
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 theowner’s equity which was directly included shall be transferred out of theowners’ equities and recorded into the profits and losses of the current period. The accumulative losses that are transferred out shall be the balance obtained from the initially obtained costs of the sold financial asset after deducting the principals as taken back, the current fair value
and the impairment-related losses as was recorded into the profits and losses of the current period.
As for the sellable debt instruments whose impairment-related losses have been recognized, if, within the
accounting period thereafter, the fair value has risen and are objectively related to the subsequent events that occur after the originally impairment-related losses were recognized, the originally recognized
impairment-related losses shall be reversed and be recorded into the profits and losses of the current period.
As for the impairment-related losses incurred to a sellable equity instrument investment, should be reversed by equity when the value raised of the equity instruments; however, the impairment-related losses incurred to an
equity instrument investment for which there is no quoted price in the active market and whose fair value
Dalian Refrigeration Company Limited
Notes to the Financial Statements of year 2015
cannot be reliably measured, or incurred to a derivative financial asset which is connected with the said equity instrument and which shall be settled by delivering the said equity instrument, may not be reversed.
(2) Provision for impairment of the investments which will be held to their maturity
Ifthere’s objective evidence that the financial assets are impaired, then the carrying amount of financial assets are reduced to the present value of estimated future cash flows, with the reduced amount recognized to profit or loss for the current period. As for the investments which will be held to their maturity whose
impairment-related losses have been recognized, if, within the accounting period thereafter, the fair value has risen and are objectively related to the subsequent events that occur after the originally impairment-related
losses were recognized, the originally recognized impairment-related losses shall be reversed and be recorded into the profits and losses of the current period.
G. The offset of financial assets and financial liabilities
Financial assets and financial liabilities are shown separately in balance sheet However, if they satisfy the
following conditions, shown the net amount in the balance sheet after the offset;
(1) The Company had legal rights of offsetting the recognition amount, and the legal right is executable in
recently.
(2) The Company plans to settle at net amount, or meanwhile realize the financial assets and pay off the
financial liabilities.
11. Receivable accounts
A.Recognition and providing of bad debt provision on individual receivable account with large amount Basis of recognition or standard
amount of individual account with Top 5 of account receivables at year end
large amount
Impairment test performed individually, bad debt provision will be provided at the
difference of expected cash flow lower than the book value. Without bad debt
Basis of bad debt provision
provision needed provided through individually test, bad debt provision will be
provided at age analysis method.
B. 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 account Provision rates for other Ages
receivables(%) 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%
C.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.
Dalian Refrigeration Company Limited
Notes to the Financial Statements of year 2015
12. The classification, pricing and accounting methods for inventories; the recognition standard and
withdrawal method of the inventories falling price reserves
A. Classification of the inventories: purchased materials, stocking materials, material cost difference, entrusted processing materials, unfinished products, finished products, working on project and etc.
B.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; C. 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.
D. The inventory system is on the basis of perpetual inventory method.
E. The low-value consumption goods will be amortized by fifty percent amortization method.
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 ofshareholders’
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.
Dalian Refrigeration Company Limited
Notes to the Financial Statements of year 2015
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
Dalian Refrigeration Company Limited
Notes to the Financial Statements of year 2015
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
Dalian Refrigeration Company Limited
Notes to the Financial Statements of year 2015
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 rent and/or capital 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
Dalian Refrigeration Company Limited
Notes to the Financial Statements of year 2015
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
A. 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.
B.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.
C. The subsequent expenditure and disposal of fixed assets
(1)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 lifetim 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%
(2) 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.
(3)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
Dalian Refrigeration Company Limited
Notes to the Financial Statements of year 2015
disposal incomes of the fixed assets sold, transferred, scraped or damaged.
D. 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
A. 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.
B.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
A.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.
B. Duration of capitalization of loan costs
The capitalization period refers to the period from starting capitalization of loan costs to the stop of
Dalian Refrigeration Company Limited
Notes to the Financial Statements of year 2015
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.
C. 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.
D.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.
A.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.
B.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.
(1)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
Dalian Refrigeration Company Limited
Notes to the Financial Statements of year 2015
Items Useful life Judging by
Land use rights 50 yeasrs Purchase contract
Software 5-10 years Predicted useful life
(2)Intangible assets with uncertain service life may not be amortized. However, the Company shall check the
service life of intangible assets with uncertain service life during each accounting period. Where there are
evidences to prove the intangible assets have limited service life, it shall be estimated of its service life, and be amortized according to the above method.
C. 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.
D. 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:
(1)Complete the intangible assets to make it usable or for sale and have the technical feasibility.
(2)Have the intention to complete the intangible assets for using or sales.
(3)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.
(4)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.
(5)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
A. 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.
Dalian Refrigeration Company Limited
Notes to the Financial Statements of year 2015
B. 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.
C.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.
D.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.
E.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.
A.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.
B.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.
(1) 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 orthe relevant assets cost.
(2)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.
Dalian Refrigeration Company Limited
Notes to the Financial Statements of year 2015
C.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.
D.The welfare of the long-term employees
The Company provides the other long-term employee benefist for the employess, 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 liabiilties or net assets of other long-term employee
benefits.
23. Measurement method of estimated debts
A. Recognition of estimated liabilities
(1)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;
(2)It is likely to cause any economic benefit to flow out of the enterprise as a result of performance of the
obligation;
(3)The amount of the obligation can be measured in a reliable way.
The Company shall check the book value of the estimated debts on the balance sheet date. If there is any
exact evidence indicating that the book value cannot really reflect the current best estimate, the Company will adjust the book value in accordance with the current best estimate.
B. 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
A.Share-based compensation types
Share-based compensation divides into equity settlement and cash settlement.
B.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.
C.Basis of best exercisable equity instruments estimate
Dalian Refrigeration Company Limited
Notes to the Financial Statements of year 2015
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.
D.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.
E.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
A.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.
Complete sets of engineering projects, the company selling products and building installation part can separate and can be measured separately, will be treated as part of the sales products as selling goods.Selling products and building installation will not be able to distinguish, or is to distinguish but can't separate metering, will sell the product part and building installation all as building installation part processing.
B. 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.
C.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.
D.Construction contracts
Dalian Refrigeration Company Limited
Notes to the Financial Statements of year 2015
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.
E.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.
A.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.
B.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:
(1)The temporary differences that are formed at initial measurement of goodwill;
(2)Non-business merge transactions or events that neither affect accounting profits nor the temporary
differences arising from taxable income (or deductible losses);
(3)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
A.Accounting of operational leasing
(1)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
Dalian Refrigeration Company Limited
Notes to the Financial Statements of year 2015
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.
(2)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.
B. Accounting Method for Financing Leases
(1)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.
(2)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. Other important accounting policies and accounting estimates
Safety production expenses
The safety production expenses are drawn according to national regulations and accounted to costs of related products and recorded to “special reserves” at the same tine. At providing of safety expenses, expense-related costs are deducted from the special reserves. When a safety fund was drawn and composes part of a fixed
asset, they are collected under construction-in-process, and recognized to fixed asset when the asset reaches usable status. Meanwhile, the special reserve is deducted by the costs which compose part of the fixed asset, and accumulative depreciation is recognized at the same amount. This fixed asset is not subject to
depreciation in the future periods.
30. Changes of main accounting policies and estimates
A. Change of main accounting policies
Not applicable.
B.Change of main accounting estimates
Not applicable.
V.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. House tax
For those on price basis, taxes are paid at1.2% of the balance of original value of the property after deducting
of30%; for those on rental basis, taxes are paid at12% of the rental.
Dalian Refrigeration Company Limited
Notes to the Financial Statements of year 2015
7.Income tax
A.Income tax rate
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 entities of the group for 2015 are as follows:
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B.Preferential tax
The parent company was qualified as high-tech enterprises for term of three years 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, therefore enjoys15% of tax for 2014-2016.
Dalian Bingshan Guardian Automation Co., Ltd.was qualified as high-tech enterprises for term of three years
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, therefore enjoys15% of tax for 2015-2017.
WNWRI was qualified as high-tech enterprises for term of three years 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, therefore enjoys15% of tax for 2015-2017.
C.Other
Theemployees’ individual income tax were withheld by the company.
VI. Notes to the consolidated financial statements
1 Monetary fund
Items 31-12-2015 31-12-2014
Cash on hand 57,023.71 67,783.07 Cash in bank 224,067,110.89 457,395,413.41 Other monetary fund 20,665,689.93 51,048,269.54 Total 244,789,824.53 508,511,466.02
The restrained amount of monetary fund is shown as below
Items 31-12-2015 31-12-2014
Deposit for bank acceptances 18,503,739.86 46,780,736.99
Dalian Refrigeration Company Limited
Notes to the Financial Statements of year 2015
Items 31-12-2015 31-12-2014
Deposit for letter of credit 2,860,552.55 Deposit for letter of guarantee 2,161,950.07 1,406,980.00 Cash in bank for warrant of migrant workers 2,400,000.00
Total 23,065,689.93 51,048,269.54 The reason of the ending balance decreased51.68% compared with the beginning balance was increase of
investments.
2 Notes receivable
Items 31-12-2015 31-12-2014
Bank acceptance 47,267,168.02 4,111,157.06 Trade acceptance 24,432,349.66 10,744,800.64 Total 71,699,517.68 14,855,957.70 (1) There were pledged notes receivable at the end of the current year.
Items Pledged Notes Receivable
Bank acceptance 27,361,318.86 Trade acceptance
Total 27,361,318.86 (2) The notes receivable endorsed but not matured at the end of the current year.
Items The derecognization amount Not derecognization amount
Bank acceptance 171,962,603.86
Trade acceptance 884,600.00
Total 172,847,203.86(cid:10)
(3) There were notes transferred to accounts receiveable at the end of the current year
Notes transferred to accounts receiveable at the end of the Items
current year
Bank acceptance 1,644,050.00 Trade acceptance
Total 1,644,050.00 (4) The reason of the ending balance of notes receivable increased382.63% compared with the beginning balance was payments for goods by notes increased.
3 Accounts receivable
(1) Classification
31-12-2015
Categories Balance Provision for doubtful debts
Book value Amount Proportion(%) Amount Proportion(%)
Dalian Refrigeration Company Limited
Notes to the Financial Statements of year 2015
Major single amount and bad debt
provision provided individually
Bad debt provided on group basis 801,499,499.03 100 130,075,662.16 16.23 671,423,836.87 Minor single amount but bad debt
provision provided individually
Total 801,499,499.03 100 130,075,662.16 16.23 671,423,836.87 Continued:
31-12-2014
Categories Balance Provision for doubtful debts
Book value Amount Proportion(%) Amount Proportion(%)
Major single amount and bad debt
provision provided individually
Bad debt provided on group basis 555,119,550.49 100 116,238,720.37 20.94 438,880,830.12 Minor single amount but bad debt
provision provided individually
Total 555,119,550.49 100 116,238,720.37 20.94 438,880,830.12 Accounts receivable which bad debt provisions are provided on ages basis in the group
31-12-2015
Account ages
Amount Provision for bad debts Proportion rates(%)
Within 1 year 500,866,264.92 25,043,313.34 5
1 to 2 years 145,419,155.77 14,541,915.58 10
2 to 3 years 54,784,001.81 16,435,200.54 30
3 to 4 years 45,125,215.48 22,562,607.74 50
4 to 5 years 19,061,180.44 15,248,944.35 80
Over 5 years 36,243,680.61 36,243,680.61 100
Total 801,499,499.03 130,075,662.16
(2) Provision for bad debts accrued, regain or switch back in the period
In the current period, RMB16,302,352.17 were accrued provision for bad debts, and RMB74,884.50 were regained.
Receivable accounts written off before but regained during the current year:
Companies Received amount Regained form Notes
Linan Fengye Food Co., Ltd. 23,453.00 Bank deposits Paid by court decision Wuxi Jiuheng Electromechanical Equipment Co.,
5,850.00 Bank deposits Keeping Collection Ltd.
Shandong Dongyue Polymer Material Co.,Ltd. 7,581.50 Bank deposits Keeping Collection Shandong Qilu Chemical Co., Ltd. 38,000.00 Bank deposits Keeping Collection Total 74,884.50
(3) Accounts receivable being writen-off during the current period
Items Written off amount
Dalian Refrigeration Company Limited
Notes to the Financial Statements of year 2015
36 Clients 3,994,506.12
The reasons of accounts receivable of the company and Dalian Bingshan Air-conditioning Equipment Co.
Ltd.being writen-off mainly include termination of operation and disability of payment, small balance being
not collected for long time, and disagreement rework charges etc, and the accounts receivable being writen-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
Beijing Huashang Bingshan Refrigeration and Air-conditioning
40,803,001.99 5.09 2,093,750.10 Machinery Co., Ltd.
Shenyang Railway Bureau Dalian Engineering Construction
39,671,502.00 4.95 1,983,575.10 Headquarter
Shandong Changhua Food Science Co., Ltd. 16,025,000.00 2.00 801,250.00 Yunnan Binghai Investment Co., Ltd. 13,917,500.00 1.74 695,875.00 Beidahuang Taihua Organic Foods Co., Ltd. 9,068,326.88 1.13 453,416.34 Total 119,485,330.87 14.91 6,027,866.54 (5) The reason of the ending balance of accounts receivable increased52.99% compared with the beginning balance was accounts receivable aging within 1 year increased.
4 Advances to suppliers
(1) The aging of advances to suppliers
31-12-2015 31-12-2014
Account ages
Amount Proportion(%) Amount Proportion(%) Within 1 year 40,798,252.80 92.26 18,897,672.41 99.18 1 to 2 years 3,420,635.11 7.74 121,597.34 0.64 2 to 3 years 6,000.00 0.03 3 to 4 years 28,000.00 0.15 Total 44,218,887.91 100 19,053,269.75 100 (2)Top 5 on amount of advances to suppliers
Companies Amount Proportion(%) Ages Reasons Dalian Bingshan International Trading Co.,Ltd. 18,068,922.66 40.86 2015 Prepayment for goods Shandong Tianbao Air Heat PumpTechnology Co., Ltd. 4,024,564.80 9.10 2015 Prepayment for goods Jiahua Chemistryl Co.,Ltd. 2,213,661.30 5.01 2014/2015 Prepayment for goods Heilongjiang Dazhou Refrigeration Equipment Co.,Ltd. 1,984,600.00 4.49 2014/2015 Prepayment for goods Natuional Grid Liaoning Power Co.,Ltd. Dalian Power
1,862,304.71 4.21 2015 Prepayment for goods Supply Company
Total 28,154,053.47 63.67
(3) The reason of the ending balance of advances to suppliers increased132.08% compared with the beginning
balance was amounts advance paid for projects increased.
Dalian Refrigeration Company Limited
Notes to the Financial Statements of year 2015
5 Interest receivable
Items 31-12-2015 31-12-2014
Interest on Term Deposits 4,998,982.40 Total 4,998,982.40 The reason of the ending balance of interest receivable decreased100% compared with the beginning balance was interest recieved.
6 Dividends receivable
Name 31-12-2015 31-12-2014
Wuhan Steel and Electricity Co., Ltd. 44,600.00
Total 44,600.00
The reason of the ending balance of dividends receivable increased100% compared with the beginning
balance was interest not yet due.
7 Other accounts receivable
(1) Classification
31-12-2015
Items Balance Provision for doubtful debts
Book value
Amount Proportion(%) Amount Proportion(%)
Major single amount and bad debt
provision provided individually
Bad debt provided on group basis 28,070,768.44 100 5,315,440.23 18.94 22,755,328.21 Minor single amount but bad debt
provision provided individually
Total 28,070,768.44 100 5,315,440.23 18.94 22,755,328.21Continued：
31-12-2014
Items Balance Provision for doubtful debts
Book value
Amount Proportion(%) Amount Proportion(%)
Major single amount and bad debt
provision provided individually
Bad debt provided on group basis 39,244,121.02 100 4,977,677.00 12.68 34,266,444.02 Minor single amount but bad debt
provision provided individually
Total 39,244,121.02 100 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.
31-12-2015
Account ages
Amount Provision for bad debts Proportion rates(%)
Within 1year 11,509,483.15 575,474.15 5
Dalian Refrigeration Company Limited
Notes to the Financial Statements of year 2015
1 to 2 years 11,036,450.75 1,103,645.08 10
2 to 3 years 1,532,283.28 459,684.98 30
3 to 4 years 1,329,402.20 664,701.10 50
4 to 5 years 756,070.71 604,856.57 80
Over 5 years 1,907,078.35 1,907,078.35 100
Total 28,070,768.44 5,315,440.23
(2) Provision for bad debts accrued, regain or switch back in the period
In the current period, RMB343,990.07 were accrued provision for bad debts, and RMB 5361.66 provision for bad debts increased by change of consolidation scope.
(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 because of not being collected for long time and not being connected.
(4) The nature of other accounts receivable
Items 31-12-2015 31-12-2014
Guarantee deposits 15,948,041.08 25,442,507.63 Petty cash 5,883,732.14 4,758,015.42 To or fro accounts 1,382,402.17 3,954,641.30 Prepayments over settlement periods 2,624,627.12 4,047,765.86 Others 2,231,965.93 1,041,190.81 Total 28,070,768.44 39,244,121.02 (5) Top 5 on amount of other accounts receivable
Proportion Provision for Companies Contents Amount Ages
(%) bad debts Dalian Tianbao Green Foods Co.,
Performance bonds 8,000,000.00 1-2 years 28.50 800,000.00 Ltd.
Less than 1
Dalian Jinzhou District Building year，1-2
Guarantee deposits 1,852,574.57 6.60 315,242.86 Energy Save Administration Office years,2-3years，
4-5 years
Balikun Jiankun Animal Husbandry
Performance bonds 1,266,561.00 Less than 1 year 4.51 63,328.05 Co., Ltd.
Tianjin Construction Team Wage depodits of
1,000,000.00 Over 5 years 3.56 1,000,000.00 Comunication and Service Center migrant workers
Dalian Construction Project Labour
Wage depodits of
Insurance Expenses 500,000.00 2-3 years 1.78 150,000.00 migrant workers
Administration Center
Total 12,619,135.57 44.95 2,328,570.91 (6) The reason of the ending balance of other accounts receivable decreased33.59% compared with the
beginning balance was guarantee deposits decreased.
8 Inventories
(1) Costs
Dalian Refrigeration Company Limited
Notes to the Financial Statements of year 2015
31-12-2015 31-12-2014
Items
Provision for Provision for
Book balance impairment of Book value Book balance impairment of Book value inventories inventories
Raw materials 65,069,599.90 6,954,631.11 58,114,968.79 51,805,680.92 7,463,862.07 44,341,818.85 Materials on
consignment for further 2,190,375.70 2,190,375.70 2,394,839.67 2,394,839.67 processing
Low-value consumptions 134,671.91 134,671.91 81,422.57 81,422.57 Work-in-progress 71,830,972.13 1,148,743.24 70,682,228.89 81,736,391.62 1,192,940.12 80,543,451.50 Self-manufactured
30,014,321.83 1,386,950.94 28,627,370.89 27,189,545.15 2,532,083.34 24,657,461.81 semi-finished products
Finished goods 74,379,267.69 2,588,149.42 71,791,118.27 124,845,367.55 2,884,241.52 121,961,126.03 Constructing projects 27,558,415.02 27,558,415.02 40,898,986.13 40,898,986.13 Total 271,177,624.18 12,078,474.71 259,099,149.47 328,952,233.61 14,073,127.05 314,879,106.56 (2) Provision for impairment of inventories
Current year addition Current year disposal
Items 31-12-2014 31-12-2015 Provision Others Reversal Written-off Others
Finished goods 2,884,241.52 477,284.08 773,376.18 2,588,149.42 Raw materials 7,463,862.07 509,230.96 6,954,631.11 Work-in-progress 1,192,940.12 44,196.88 1,148,743.24 Self-manufactured
2,532,083.34 1,145,132.40 1,386,950.94 semi-finished products
Total 14,073,127.05 477,284.08 2,471,936.42 12,078,474.71 (3) At the end of current period, the company tested inventories and withdrew provision for the difference
between the cost and the lower net realizable value.
9 Other current assets
Items 31-12-2015 31-12-2014
Enterprise income tax prepaid 2,628,292.68 1,400,309.96 Withholdings on VAT 13,779,722.47
Prepaid expenses 70,696.71 934,829.83 Total 16,478,711.86 2,335,139.79 The reason of the ending balance of other current accounts increased605.68% compared with the
beginning balance was withholdings on VAT shifted from taxes payable.
10 Available for sale financial assets
31-12-2015 31-12-2014
Items
Provision for Provision for
Book balance Book value Book balance Book value impairment impairment
Debt instruments
available for sale
Dalian Refrigeration Company Limited
Notes to the Financial Statements of year 2015
31-12-2015 31-12-2014
Items
Provision for Provision for
Book balance Book value Book balance Book value impairment impairment
Equity instruments
available for sale
Measured by fair value 720,945,755.39 1,582,164.89 719,363,590.50
Measured by cost 17,554,264.50 3,642,605.91 13,911,658.59 47,653,159.50 5,224,770.80 42,428,388.70 Others
Total 738,500,019.89 5,224,770.80 733,275,249.09 47,653,159.50 5,224,770.80 42,428,388.70 (1) Equity instruments available for sale measured by fair value at the end of current year
Equity instruments Debt instruments
Items Others Total available for sale available for sale
Cost 30,098,895.00 30,098,895.00 Accumuilated other comprehensive income 587,219,831.33 587,219,831.33 Deferred income tax liabilities 103,627,029.06 103,627,029.06Less：provision 1,582,164.89 1,582,164.89 Fair value 719,363,590.50 719,363,590.50 (2)Equity instruments available for sale measured by cost at the end of current year
Book balance
Names
Shareholding
Beginning Increased during Decreased during
Ending balance balance current year current year
Liaoning Mike Group Co., Ltd. 3.57% 1,020,000.00 1,020,000.00 Guotai Junan Securities Co., Ltd. 0.49% 30,098,895.00 30,098,895.00
Guotai Junan Investment
0.22% 3,057,316.00 3,057,316.00 Management Co., Ltd.
Thermo King Container Temperature
17.8% 11,207,806.00 11,207,806.00 Control (Suzhou) Co., Ltd.
Wuhan Steel and Electric Co., Ltd. 0.056% 1,315,142.50 1,315,142.50 Liaoning Enterprises United Industry
4.2% 105,000.00 105,000.00 Company
Zibo Traction Motor Co., Ltd. 0.76% 849,000.00 849,000.00 Total 47,653,159.50 30,098,895.00 17,554,264.50Continued：
Provision for impairment
Cash dividends Names Increased Decreased during the Beginning Ending
during current during current current period balance balance
year year
Liaoning Mike Group Co., Ltd. 310,000.00 Guotai Junan Securities Co., Ltd. 1,582,164.89 1,582,164.89
Guotai Junan Investment Management Co.,
2,688,605.91 2,688,605.91
Ltd.
Thermo King Container Temperature
Control (Suzhou) Co., Ltd.
Wuhan Steel and Electric Co., Ltd.
Liaoning Enterprises United Industry
105,000.00 105,000.00
Company
Dalian Refrigeration Company Limited
Notes to the Financial Statements of year 2015
Cash dividends Names Provision for impairment
during the Zibo Traction Motor Co., Ltd. 849,000.00 849,000.00 current period Total
5,224,770.80 1,582,164.89 3,642,605.91
(3) Changes of the impairment of the available-for-sale financial assets during the current year
Items Equity instruments available for sale Debt instruments available for sale Others Total Beginning balance 5,224,770.80 5,224,770.80 Increased during current year
Included transfer from other
comprehensive income
Decreased during current year
Included transfer from fair value
rising
Ending balance 5,224,770.80 5,224,770.80 (4) Relevant notes of the fair value of the available-for-sale equity instruments
Guotai Junan Securities Co., Ltd. was listed by Shanghai Security Exchange on 26 June 2015,and the
company held its stock 30,098,895 shares and measured by fair value at the end of current year.The company received its cash dividend RMB 3,009,889.50 during the current year.
The reason of the ending balance of the available-for-sale financial assets increased1,628.27% compared
with the beginning balance was the share of Guotai Junan Securities Co., Ltd. was listed by Shanghai Security Exchange and measured by fair value at the end of current year.
Dalian Refrigeration Company Limited
Notes to the Financial Statements of year 2015
11 Long-term equity investments
Increase/Decrease
Provision Beginning Adjustment of Cash bonus or Provision for
Name Gains and losses Changes Ending balance for balance other profits impairment of
Increased Decreased recognized under of other Others impairment comprehensive announced to the current
the equity method equity
income issue period
ⅠJoint venture
Dalian Bingshan–P&A
Recreation Development 3,553,919.97 -716,822.16 2,837,097.81 Engineering Co., Ltd.
subtotal 3,553,919.97 -716,822.16 2,837,097.81Ⅱ Associates
Dalian Bingshan International
13,716,985.57 1,974,116.05 15,691,101.62 Trading Co.,Ltd.
Panasonic Refrigeration (Dalian)
155,826,086.27 8,600,021.37 5,200,000.00 159,226,107.64 Co., Ltd.
Dalian Honjo Chemical Co., Ltd. 9,403,913.18 528,860.67 1,203,061.37 8,729,712.48 Panasonic Cold-Chain (Dalian)
215,573,606.48 8,145,919.40 8,000,000.00 215,719,525.88 Co., Ltd.
Keinin-Grand Ocean Thermal
42,333,942.39 15,873,092.90 9,600,000.00 48,607,035.29 Technology (Dalian) Co., Ltd.
Panasonic Compressor (Dalian)
432,515,006.40 59,377,362.52 34,000,000.00 457,892,368.92 Co., Ltd.
Dalian Sanyo Meica
23,233,848.71 -1,275,779.47 21,958,069.24 Electronics Co., Ltd.
MHI Bingshan Refrigeration
29,294,087.63 -7,017,754.79 22,276,332.84 (Dalian) Co.,Ltd.
Beijing Huashang Bingshan
Refrigeration and Air-conditioning 1,425,989.62 1,754,200.00 -1,243,542.64 1,936,646.98 Machinery Co., Ltd.
Dalian Fuji Bingshan Vending
89,896,843.61 28,686,407.19 5,314,796.52 113,268,454.28 Machine Co., Ltd.
Daliian Sanyo High-Efficient
22,455,509.02 26,993,388.94 -1,161,308.18 -48,287,589.78
Refrigeration System Co., Ltd.
Dalian Refrigeration Company Limited
Notes to the Financial Statements of year 2015
Increase/Decrease
Provision Beginning Adjustment of Cash bonus or Provision for
Name Gains and losses Changes Ending balance for balance other profits impairment of
Increased Decreased recognized under of other Others impairment comprehensive announced to the current
the equity method equity
income issue period
Changzhou Jingxue Refrigeration
130,000,000.00 11,722,024.61 141,722,024.61(cid:10) Equipment Co., Ltd.
Dalian Fuji Bingshan Vending
2,450,000.00 2,044,158.79 2,256.74 4,496,415.53 Machine Co., Ltd.
Wuhan Lanning Energy Science
6,000,000.00 6,874.61 6,006,874.61 Co., Ltd.
subtotal 1,035,675,818.88 167,197,588.94 126,260,453.03 2,256.74 63,317,857.89 -48,287,589.78 1,217,530,669.92(cid:10) Total 1,039,229,738.85 167,197,588.94 125,543,630.87 2,256.74 63,317,857.89 -48,287,589.78 1,220,367,767.73(cid:10) (1) On 27th January, 2015, theCompany’s Board of Directors decided to increase investment of RMB7,160,000.00 to Beijing Huashang Bingshan Refrigeration and Air-conditioning Machinery Co., Ltd and increased investment of RMB1,754,200.00 during year of 2015.Theshareholders’ investment proportion remained unchanged.
(2) According to the 17th meeting of the 6th session of theCompany’s Board of Directors, the Company was transferred30% shareholdings of Daliian Sanyo High-Efficient Refrigeration System Co., Ltd., and the transfer price was RMB26,993,388.94.The company held55% shareholdings of Daliian Sanyo High-Efficient Refrigeration System Co., Ltd.as at the end of year 2015.
(3) According to the 19th meeting of the 6th session of theCompany’s Board of Directors, the Company was transferred29.212% shareholdings of Changzhou Jingxue Refrigeration Equipment Co., Ltd.with the price of RMB130,000,000.00.The equityas at the transaction was finished as at the end of year 2015.
(4) On 31st October, 2014, theCompany’s Board of Directors decided to establish the join-venture Dalian Fuji Bingshan Vending Machine Co., Ltd. with Japan Fuji Electric Co., Ltd. The company invested RMB 2,450,000.00 and held49% equity. Dalian Fuji Bingshan Vending Machine Co., Ltd. operated normally at the end of year 2015.
(5) The Board of Directors of Wuhan New World Refrigeration Industrial Co., Ltd. (“WNWRI”) decided to establish the join-venture Wuhan Lanning Energy Science Co., Ltd. withXi’an Qitong Energy Technology Co., Ltd. and Wu Zhihong and Cheng Xiangrong. WNWRI invested RMB6,000,000.00 and held27.27% equity. Wuhan Lanning Energy Science Co., Ltd. operated normally at the end of year 2015.
Dalian Refrigeration Company Limited
Notes to the Financial Statements of year 2015
12 Investment property
(1)Investment property details
Construction in
Items Buildings Land-use-rights Total
progress
1. Original value
(1)Beginning balance 25,259,944.57 25,259,944.57 (2)Current year addition
Outsourcing
Transferred from Inventories\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 611,325.00 611,325.00 provision or amortization 611,325.00 611,325.00 Enterprise merger increase
Transferred from other
(3)Current year disposal
disposal
Transferred to other
(4)Ending balance 762,360.57 762,360.57 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 24,497,584.00 24,497,584.00 (2)Beginning.Book value 25,108,909.00 25,108,909.00 (2) Investment property withoutowner’s certificates
Dalian Refrigeration Company Limited
Notes to the Financial Statements of year 2015
Items Book value Reasons
# 6 workshop building on No. 106 Liaohe East Rd, Dalian Economic and
24,497,584.00 Final accounts uncompleted Technology Development Zone
Total 24,497,584.00
(3) Explanation of investment property
On 31st July,2014, 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 metres, and annual rent is RMB 4.2 million since 15th August, 2014 to 16th July, 2029.
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 58,672,776.25 41,027,759.55 1,898,059.32 11,337,061.95 112,935,657.07 Purchased 2,840,310.33 5,226,907.04 1,138,294.88 2,454,249.47 11,659,761.72 Transferred from Construction
19,215,338.06 7,366,023.14 302,544.44 26,883,905.64 in progress
Enterprises merger 36,617,127.86 28,434,829.37 457,220.00 8,872,128.72 74,381,305.95 Shareholders investment
Leased in from financing
Other transferred in 10,683.76 10,683.76 (3)Current year reduction 89,690.00 1,085,989.40 1,839,706.89 166,807.21 3,182,193.50 Disposal 89,690.00 1,075,305.64 1,839,706.89 166,807.21 3,171,509.74 Leased out from financing
Other transferred out 10,683.76 10,683.76 (4)Ending balance 410,553,157.61 608,130,475.12 25,350,158.35 29,613,012.49 1,073,646,803.57 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 22,341,121.11 43,869,446.65 2,422,979.83 7,983,979.68 76,617,527.27 Provision 9,179,716.36 25,109,608.86 2,011,481.83 1,423,804.82 37,724,611.87 Enterprises merger increased 13,161,404.75 18,759,837.79 411,498.00 6,558,137.38 38,890,877.92 Other transferred in 2,037.48 2,037.48 (3)Current year disposal 80,721.00 954,550.77 1,301,353.86 141,599.08 2,478,224.71 Disposal 80,721.00 952,513.29 1,301,353.86 141,599.08 2,476,187.23 Leased out from financing
Other transferred out 2,037.48 2,037.48 (4)Ending balance 144,232,577.42 439,963,821.58 16,024,686.66 21,226,057.87 621,447,143.53 3..Provision for impairment
(1)Beginning balance 2,292,229.72 2,292,229.72 (2)Current year addition
Dalian Refrigeration Company Limited
Notes to the Financial Statements of year 2015
Other
Items Buildings Machinery Vehicles Total
equipments
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 266,320,580.19 165,874,423.82 9,325,471.69 8,386,954.62 449,907,430.32 (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 80,177,930.97 Final settlement accounts uncompleted Total
80,177,930.97
(4) Wuhan New World Refrigeration Industrial Co., Ltd. borrowed RMB55,000,000 from bank and mortgaged
with its buildings ,machinery and land-use-rights. Please refer to the noteⅤ.19.Except this thecompany’s
fixed assets were not replaced or mortgaged.
14 Project in construction
(1)Details
Other
Transferred into
Increased decreased Percentage Balance of fixed assets Balance of Sources of Items Budgets during current during of 31-12-2014 during current 31-12-2015 funds year current completion year
year
Internally Buildings
301,450,000 17,594,050.11 136,878,462.92 19,215,338.06 135,257,174.97 generated 45% renovation
funds Internally Machinery 171,840,000 921,399.35 8,212,833.40 7,366,023.14 1,768,209.61 generated 5% funds Vehicles 302,544.44 302,544.44
Total 473,290,000 18,515,449.46 145,393,840.76 26,883,905.64 137,025,384.58
(2) No interests capitalized during the current period.
(3) There was no provision for impairment needed withdrawn.
(4) The reason of the ending balance increased640.06% compared with the beginning balance was
construction of the new factory increased .
15 Intangible assets
(1) Intangible assets details
Dalian Refrigeration Company Limited
Notes to the Financial Statements of year 2015
Items Land-use-rights Knowhow Others Total
1. Original value
(1)Beginning balance 176,504,398.53 515,224.41 10,023,747.44 187,043,370.38 (2)Current year addition 7,459,504.09 3,863,235.58 11,322,739.67 Purchase 2,946,949.54 2,946,949.54 Internal research and development
Enterprises merger increase 7,459,504.09 916,286.04 8,375,790.13 Shareholders invest
Other transferred in
(3)Current year disposal
Disposal
Other transferred out
(4)Ending balance 183,963,902.62 515,224.41 13,886,983.02 198,366,110.05 2. Amortization
(1)Beginning balance 28,866,655.89 515,224.41 3,748,179.83 33,130,060.13 (2)Current year addition 5,208,475.78 1,609,771.57 6,818,247.35 Provision 3,607,790.69 900,165.74 4,507,956.43 Enterprises merger increase 1,600,685.09 709,605.83 2,310,290.92 Other transferred in
(3)Current year disposal
Disposal
Other transferred out
(4)Ending balance 34,075,131.67 515,224.41 5,357,951.40 39,948,307.48 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
(1)Ending book value 149,888,770.95 8,529,031.62 158,417,802.57 (2)Beginning book value 147,637,742.64 6,275,567.61 153,913,310.25 (2) There was no Intangible assets increased by internal research and development .
(3) Please refer to the noteⅤ.19 for land-use-rights mortgaged by Wuhan New World Refrigeration Industrial Co., Ltd.
Dalian Refrigeration Company Limited
Notes to the Financial Statements of year 2015
16 Goodwill
Increased during current year Dreased during current year
Name 31-12-2014 31-12-2015
Enterprises merger
Other Disposal Other
increase
Daliian Sanyo
High-Efficient
1,440,347.92 1,440,347.92 Refrigeration System
Co., Ltd
Total 1,440,347.92 1,440,347.92 The Company acquired30% shares of Daliian Sanyo High-Efficient Refrigeration System Co., Ltd. on 31
July,2015 with consideration of RMB26,993,388.94. On the date of acquisition, the difference with the fair
value of identifiable net assets of Daliian Sanyo High-Efficient Refrigeration System Co., Ltd. was
RMB1,440,347.92, and treated as goodwill in the consolidated financial statements. At the end of 2015, it
carried out the impairment test for the goodwill. The recoverable amount was not lower than its book value,
and there was no goodwill impairment withdrawn.
17 Long-term deferred expenses
Increased during Amortized during Other
Items 31-12-2014 31-12-2015 current year current year decrease
Employee’s dormitory use right 2,704,561.98 138,478.32 2,566,083.66 Renovation and rebuilding 3,085,642.38 1,291,518.48 1,794,123.90 Inspection services 83,194.63 48,507.24 34,687.39 Membership fee of golf club 512,875.00 6,875.00 506,000.00 Rental expenses 1,062,900.00 106,290.00 956,610.00 Total 5,873,398.99 1,575,775.00 1,591,669.04 5,857,504.95 18 Deferred income tax assets and deferred income tax liabilities
(1) Deferred income tax assets had not been off-set
31-12-2015 31-12-2014
Items
Deductible temporary Deductible temporary
Deferred tax assets Deferred tax liabilities difference difference
Provision for assets impairment 107,112,240.49 19,372,358.73 98,014,616.89 16,786,587.33 Stock option Incentive expenses 12,190,520.00 1,828,578.00
Total 119,302,760.49 21,200,936.73 98,014,616.89 16,786,587.33 (2) Temporary difference which not recognized deferred income tax assets
Items 31-12-2015 31-12-2014
Provision for impairment 47,874,337.13 44,791,908.06 Deductible losses 15,856,452.86 9,725,928.72 Total 63,730,789.99 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.
(3) Deductible losses of unrecognized deferred income tax assets will due the following years
Dalian Refrigeration Company Limited
Notes to the Financial Statements of year 2015
Items 31-12-2015 31-12-2014 Notes
2017 975,555.72 975,555.72
2018 2,350,012.09 4,717,859.29
2019 4,032,513.71 4,032,513.71
2020 8,498,371.34
Total 15,856,452.86 9,725,928.72
(4) Deferred income tax liabilities before offsetting
31-12-2015 31-12-2014
Items
Taxable temporary Taxable temporary Deferred tax
Deferred tax assets
difference difference liabilities
Fair value changes of
690,846,860.39 103,627,029.06
available-for-sale financial assets
Total 690,846,860.39 103,627,029.06
19 Short-term loans
Terms of loans 31-12-2015 31-12-2014
Mortgage loan 55,000,000.00 60,000,000.00 Fiduciary loan 27,600,000.00
Total 82,600,000.00 60,000,000.00 (1) Wuhan New World Refrigeration Industrial Co., Ltd. borrowed short-term loan RMB55,000,000 from bank
and mortgaged with its buildings, machinery and land-use-rights.
(2) The reason of the ending balance increased37.67% compared with the beginning balance was fiduciary loan increased.
20 Notes payable
Items 31-12-2015 31-12-2014
Bank acceptance notes 203,432,038.63 103,304,788.06 Trade acceptance notes 30,756,973.09 6,241,714.55 Total 234,189,011.72 109,546,502.61 The reason of the ending balance increased113.78% compared with the beginning balance was settlement of purchases by notes payable increased.
21 Accounts payable
Items 31-12-2015 31-12-2014
Payable for materials 554,938,956.23 475,503,139.38 Payable for projects 103,608,705.86 6,919,723.26 Payable for equipments 1,850,841.17 28,653,675.18 Total 660,398,503.26 511,076,537.82 There was no big amount among the accounts payable aged more than 1 year.
22 Accounts received in advance
(1) Details
Dalian Refrigeration Company Limited
Notes to the Financial Statements of year 2015
Items 31-12-2015 31-12-2014
Advances on sales 70,458,014.46 137,629,315.42
Total 70,458,014.46 137,629,315.42
(2) Accounts received in advance aged over 1 year
Items 31-12-2015 Reasons
China Aviation Planning and Construction
3,100,000.00 Unsettled contract payments on sets projects Development Co., Ltd.
Jiangsu Ruixiang Chemical Engineering Co., Ltd. 2,023,581.40 Unsettled contract payments on sets projects Inner Mongolia Datang Dingwang Chemical
1,962,400.00 Unsettled contract payments on sets projects Engineering Co., Ltd.
Total 7,085,981.40
(3) The reason of the ending balance decreased48.81% compared with the beginning balance was accounts received in advance carried down to income increased.
23 Payroll payable
(1) Details
Increased during Decreased during
Items 31-12-2014 31-12-2015
current year current year
Short-term salary 55,993,637.27 253,154,322.75 257,290,614.73 51,857,345.29 Departure welfare-defined
33,589,386.22 33,589,386.22
contribution plans
Termination benefits 331,302.30 331,302.30
Other welfare due within 1 year
Total 55,993,637.27 287,075,011.27 291,211,303.25 51,857,345.29 (2)Short-term salary
Increased
Decreased during
Items
31-12-2014 during current 31-12-2015 current year
year
1.Wages and salaries, bonuses, allowances and
25,570,229.67 208,089,719.04 200,463,842.85 33,196,105.86 subsidies
2.Staff welfare 25,205,874.20 8,309,358.97 18,104,168.97 15,411,064.20 3.Social insurance 1,698,790.15 13,545,227.73 14,597,466.66 646,551.22Including：①Medical insurance 11,527,080.01 11,527,056.01 24.00②supplementary
medical insurance
③Work-related injury insurance 945,944.69 945,943.88 0.81④Matemity insurance 454,649.73 454,649.73
⑤Housing subsidies 1,698,790.15 617,553.30 1,669,817.04 646,526.41 4. Housing funds 2,466,435.12 19,165,080.60 19,714,079.14 1,917,436.58 5.Labor union fund and employee education fee 1,052,308.13 3,676,572.41 4,042,693.11 686,187.43
Dalian Refrigeration Company Limited
Notes to the Financial Statements of year 2015
6. Non-monetary welfare
368,364.00 368,364.00
Total
55,993,637.27 253,154,322.75 257,290,614.73 51,857,345.29 The non- monetary welfare of the current year was amortization of long-term expenses ofemployees’
dormitory use right, dining hall expenses and etc.
(3) Defined contribution plans
Increased during Decreased during
Items 31-12-2014 31-12-2015
current year current year
Basic retirement pension 28,928,203.69 28,928,203.69
Unemployment insurance 1,531,109.20 1,531,109.20
Heating fees 3,130,073.33 3,130,073.33
Total 33,589,386.22 33,589,386.22
The company took part in thegovernment’s basic retirement pension and unemployment insurance according to the related legislation, and paid the insurance charges 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.
24 Taxes payable
Items 31-12-2015 31-12-2014
Value-added tax 6,680,785.40 -3,127,955.12 Business tax 1,621,471.10 1,991,177.27 Enterprise income tax 4,876,229.11 2,568,733.67 Individual income tax 394,393.08 396,325.29 City maintenance and construction tax 722,295.23 291,424.15 Building taxes 233,857.61
Land use tax 553,224.98 217,274.87 Education surtax 247,975.64 110,082.07 Local education surtax 195,855.11 67,685.90 Water project fund/River route maintenance fee 7,682.90 11,139.52 Safeguard fund for disables 680.00 544.00 Dike maintenance fee 13,509.20 Stamp duty 167,128.20 102,788.87 Total 15,701,578.36 2,642,729.69 The reason of the ending balance Increased494.14% compared with the beginning balance was withholdings on VAT shifted from taxes payable to other current assets.
25 Dividend payable
Name of investors 31-12-2015 31-12-2014 Reasons
Legal person shareholders 533,156.00 533,156.00 Some shareholders not claimed.
Total 533,156.00 533,156.00
26 Other accounts payable
Dalian Refrigeration Company Limited
Notes to the Financial Statements of year 2015
(1) Details
Items 31-12-2015 31-12-2014
Obligation of restricted shares buy-back 39,503,800.00
Loan from non-financial institutes 18,200,000.00 18,096,524.00
Cash pledge and security deposit 14,199,502.52 13,721,523.03
Apply for reimbursement and unpaid 17,038,250.51 14,117,136.22
Cash from related parties 627,014.92 510,097.66
Receipts under custody 9,255,791.05 11,164,903.53
Others 1,065,931.15 2,465,629.60
Total 99,890,290.15 60,075,814.04
(2) Major amount aging over 1 year
Name of investors 31-12-2015 Unpaid reason
Dalian Bingshan Group Co.,
10,000,000.00 Subsidiary company borrowed for removal and reconstruction
Ltd.
Total 10,000,000.00
The reason of the ending balance increased66.27% compared with the beginning balance was obligation of
restricted shares buy-back confirmed.
27 Deferred revenue
Increased during Decreased during
Items 31-12-2014 31-12-2015 Reasons current year current year
Associated with assets 51,077,394.00 1,699,098.00 49,378,296.00
Associated with earnings 1,696,490.19 1,696,490.19
Total 52,773,884.19 3,395,588.19 49,378,296.00
Subsidy from government
Converted to
Increased
non-business Other
Liabilities 31-12-2014 during current 31-12-2015 Notes incomes during decrease
year
current year
Subsidy fund for highly
Associated effective heat pump and 4,289,394.00 585,098.00 3,704,296.00
with the asset related system
Contribution to
Associated subsidiary company 46,788,000.00 1,114,000.00 45,674,000.00
with the asset relocation
Big capacity of sea
Associated water pre-freeze project 1,696,490.19 1,696,490.19
with earnings of Project 863
Total 52,773,884.19 3,395,588.19 49,378,296.00
28 Share capitals
Shares
Issuance of
Items 31-12-2014 converted Others 31-12-2015 new shares
from reserve
I. Non-circulating share capital
19,224,451.00 10,150,000.00 29,374,451.00 with restricted trade conditions
Dalian Refrigeration Company Limited
Notes to the Financial Statements of year 2015
1. State-owned shares
2. Shares held by domestic legal
persons
3. Other domestic shares 19,213,921.00 19,213,921.00 Including: Shares held by domestic
10,530.00 10,150,000.00 10,160,530.00 natural person
II. Circulating share capital 330,790,524.00 330,790,524.00 1. Domestically listed ordinary shares
215,790,524.00 215,790,524.00 (A-share)
2. Domestically listed ordinary shares
115,000,000.00 115,000,000.00 (B-share)
III. Total 350,014,975.00 10,150,000.00 360,164,975.00 The non-circulating share capital of Dalian Bingshan Group Co., Ltd. circulated on 21st January, 2011, but
Dalian Bingshan Group Co., Ltd. declared that these shares would not be listed to sell in the Shenzhen Stock Exchange within 60 months after the circulating date. Base on the promise, the Company will apply to unlock
these shares until the Company practices management equity incentive.
According to the report on granting the restricted stock to the incentive object deliberated by the 15th Meeting of 6th Session of the Board of Directors of the Company, and the restricted stock plan draft of the Company,
the Board has implemented and completed granting the restricted stock with total 41 person and 10,150,000
shares.
29 Capital surplus
Items 31-12-2014 Increased during current year Decreased during current year 31-12-2015 Capital premium 515,188,976.98 35,784,208.92 550,973,185.90 Other capital surplus 67,099,029.31 12,192,776.74 79,291,806.05 Total 582,288,006.29 47,976,985.66 630,264,991.95 The reason of the ending balance of capital premium increased was capital premium from granting the
restricted stock to the incentive object and acquiring minorityshareholders’ equity of Dalian Bingshan Metal
Processing Co., Ltd., Wuhan New World Refrigeration Industrial Co., Ltd. and Dalian Bingshan Group Sales
Co., Ltd.
Other capital surplus was cost of equity incentive plan and capital surplus changes of the invested entities.
30 Treasury share
Items 31-12-2014 Increased during current year Decreased during current year 31-12-2015 Equity incentive buy-back 39,503,800.00 39,503,800.00 Total 39,503,800.00 39,503,800.00 The treasury share arises from the execution of equity incentive plan.
31 Other comprehensive income
Items 31-12-2014 2015 31-12-2015
Dalian Refrigeration Company Limited
Notes to the Financial Statements of year 2015
Less：
Previously
After-tax After-tax
Amount for the recognized in
Less：income attribute to the attribute to
period before profit or loss in
tax parent minority
income tax other
company shareholder
comprehensive
income
I.Latercan’t
reclassified into
profit and loss
of other
comprehensive
income
II. Later
reclassified into
profit and loss
of other
comprehensive
income
1、Later
reclassified into
profit and loss of
other
comprehensive 2,768,286.72 2,768,286.72 income of long
term investments
accounting by
equity method
2、Changes in
fair value
recognized in
gains and losses 690,846,860.39 103,627,029.06 587,219,831.33 587,219,831.33 of the
available-for-sale
financial assets
3、Foreign
currency
translation
differences of
financial
statements
Total 2,768,286.72 690,846,860.39 103,627,029.06 587,219,831.33 589,988,118.05 The reason of the ending balance increased21212.39% compared with the beginning balance was Guotai Junan Securities Co., Ltd. listed by Shanghai Security Exchange and measured by fair value at the end of current year.
32 Special reserves
Increased during Decreased during
Items 31-12-2014 31-12-2015
current year current year
Safety production expenses 1,982,950.50 1,982,950.50
Total 1,982,950.50 1,982,950.50
33 Surplus reserves
Increased during Decreased during
Items 31-12-2014 31-12-2015 current year current year
Statutory surplus reserves 272,675,444.95 12,602,496.26 285,277,941.21 Discretionary surplus reserve 273,112,803.04 22,378,995.91 295,491,798.95 Total 545,788,247.99 34,981,492.17 580,769,740.16 The increase of the surplus reserves were because the statutory reserved capital RMB12,602,496.26 was
Dalian Refrigeration Company Limited
Notes to the Financial Statements of year 2015
withdrawn on the basis of10% of thecompany’s net profit of year 2015 and the discretionary surplus reserve RMB22,378,995.91 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.
34 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 129,947,307.39
Less: Appropriation of statutory surplus reserves 12,602,496.2610% of net profit of year 2015
Appropriation of other reserved capital 22,378,995.9120% of net profit of year 2014
Appropriation ofemployee’s welfare and bonus fund in
foreign invested company
Employee welfare fund 1,183,742.85
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 year 525,925,066.25
35 Total operating income and operating cost
2015 2014
Items
Income Cost Income Cost
Key business 1,590,994,011.67 1,299,526,134.12 1,405,820,529.51 1,065,329,668.79 Other business 16,524,427.94 10,317,677.51 19,895,067.45 21,220,983.94 Total 1,607,518,439.61 1,309,843,811.63 1,425,715,596.96 1,086,550,652.73 36 Taxes and surcharges
Items 2015 2014
Business tax 2,923,558.17 2,311,815.61 City maintenance and construction tax 5,537,296.43 5,367,351.03 Education surtax 2,376,842.04 2,300,699.68 Local education surtax 1,584,380.79 1,536,768.24 Dike maintenance fee 75,670.03 192,113.07 Others 90,505.35 810.40 Total 12,588,252.81 11,709,558.03 37 Selling and distribution expenses
Items 2015 2014
Handle official business expenses 11,068,186.75 10,742,606.13 Salaries and subsidies 35,936,748.51 53,725,627.39 Depreciation expenses 464,268.28 503,348.47 Transportations expenses 8,803,297.34 15,263,039.31 Entertainment expenses 7,139,713.17 12,113,438.28 Traveling expenses 10,734,718.12 19,162,210.69 Maintenance and repair expenses 3,731,758.17 9,767,507.33 Advertisement and bids expenses 470,935.68 914,413.58 Others 1,750,129.96 1,078,638.43 Total 80,099,755.98 123,270,829.61
Dalian Refrigeration Company Limited
Notes to the Financial Statements of year 2015
The reason of the amount of 2015 decreased35.02% compared with that of 2014 was the company engaged a professional company in charge of sales business and salaries and subsidies, traveling expenses and
transportations expenses decreased.
38 Administrative expenses
Items 2015 2014
Handle official business expenses 15,237,435.94 16,976,681.67 Salaries and subsidies 113,018,720.80 106,154,455.88 Depreciation expenses 7,578,564.10 7,379,598.57 Transportations expenses 5,006.00 353,692.74 Entertainment expenses 3,089,233.55 3,703,698.39 Traveling expenses 3,777,397.06 2,982,426.76 Maintenance and repair expenses 4,705,156.18 5,936,182.46 Advertisement expenses 425,141.71 786,515.44 Other taxes and fees 9,424,970.21 8,667,319.24 Insurance expenses 1,068,219.27 2,905,336.91 Research and development expenses 17,126,086.75 16,744,651.31 Amortization of long term assets 4,640,649.75 4,454,384.51 Design consultant and test service expenses 1,755,118.29 4,514,765.97 Safety production expenses 2,382,233.92
Others 2,812,661.96 4,141,351.60 Total 187,046,595.49 185,701,061.45 39 Financial expenses
Items 2015 2014
Interest expenses 5,362,949.64 4,063,705.65 Less:Interest income 6,592,204.15 11,410,822.81 Losses on exchange(Less: Gain on exchange) 186,879.42 688,169.98 Other expenses 1,172,689.75 544,748.14 Total 130,314.66 -6,114,199.04 The reason of the amount of 2015 increased102.13% compared with that of 2014 was interest expenses of
loan increased and fixed term deposit decreased.
40 Impairment losses
Items 2015 2014
Provision for bad debts 16,646,342.24 18,965,623.56 Provision for obsolete inventories 477,284.08 189,751.97 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
Dalian Refrigeration Company Limited
Notes to the Financial Statements of year 2015
Provision for the impairment of other assets
Total 17,123,626.32 19,155,375.53 41 Gain/ (loss) from investment
(1) Details
Items 2015 2014
Calculated by equity method 125,543,630.87 101,428,429.25 Calculated by cost method
Gain from disposal associated company 681,816.41 Gain from holding of financial assets available for sale 3,364,489.50 1,793,969.75 Gain from disposal financial assets available for sale 36,617.40 Total 128,908,120.37 103,940,832.81 (2) There was no severe constrict on the collection of the investment earnings.
42 Non-business incomes
(1)Details
The amount recorded in non-recurring Items 2015 2014
gains and losses of current period
Gain on the disposal of non-current assets 167,463.99 390,490.35 167,463.99 Penalty and fine income 294,915.22 1,138,950.84 294,915.22 Subsidy fund from government 709,526.19 7,457,380.75 709,526.19 Deferred income 3,395,588.19 5,132,556.41 1,696,490.19 Debts need not paid 2,630,968.84 563,891.43 2,630,968.84 Others 260,901.11 483,180.61 260,901.11 Total 7,459,363.54 15,166,450.39 5,760,265.54 (2) Subsidy fund from government
Items 2015 2014 Explanations
Subsidy for information construction from Dalian Municipal
42,000.00 Related to gain
Bureau of Finance
Aid for patent from Dalian Intellectual Property Service
5,000.00 1,500.00 Related to gain
Centre
Subsidy of economic support policy 76,300.00 Related to gain
Subsidy for social security 11,165.00 Related to gain
Subsidy for circular economy project Related to gain
Award for QC team Related to gain
Aid for patent from Wuhan Intellectual Property Bureau Related to gain
Subsidy and award for patent Related to gain
Mayor’s Quality Award Related to gain
Financial incentive award for increasing production and sales Related to gain
Subsidy for science and technology development Related to gain
Subsidy for small and medium-sized enterprises exploiting
60,000.00 Related to gain
international market
Financial award for export 27,318.37 Related to gain
Taxes given back 499,945.82 726,080.75 Related to gain
Subsidy from Disabled Person Federation and Disabled
20,697.00 Related to gain
Person Service Center
Economic supportive policy 43,400.00 Related to gain
International market developing fund for small and mid size 20,000.00 Related to gain
Dalian Refrigeration Company Limited
Notes to the Financial Statements of year 2015
Items 2015 2014 Explanations
enterprises
Subsidy for the first set of important technology equipment 5,600,000.00 Related to gain
Reward for promoting increase of industry of year 2015 1,025,000.00 Related to gain
Subsidy for patent from Wuhan Interllectual Property Bureau 1,500.00 Related to gain
Subsidy for disposal of useless vehicals 7,000.00 Related to gain
Total 709,526.19 7,457,380.75
The reason of current period amount decreased50.82% compared with last period was subsidy from
government decreased.
43 Non-business expenses
The amount recorded in non-recurring Items 2015 2014
gains and losses of current period Loss on the disposal of non-current assets 229,182.73 412,897.02 229,182.73 Fines and penalties 8,316.69 29,513.98 8,316.69 Loss on debt restructuring 586,377.00
Others 282,035.87 119,121.64 868,412.87 Total 1,105,912.29 561,532.64 1,105,912.29 The reason of current period amount increased96.95% compared with last period was strengthened accounts recieveable collection and debt restructuring.
44 Income tax expenses
(1) Details:
Items 2015 2014
Current income tax expense 8,782,088.36 6,786,355.61 Deferred income tax expense -4,049,456.17 2,682,431.87 Total 4,732,632.19 9,468,787.48 (2) Adjustment process of accounting profit and income tax expense
Items 2015
Total profits 135,947,654.34 Current income tax expense accounted by tax and relevant
20,392,148.15 regulations
Influence of different tax rate suitable to subsidiary 3,651,553.71 Influence of income tax before adjustment -332,570.54 Influence of non taxable income -19,741,494.75 Influence of not deductable costs, expenses and losses -754,795.63 Influence of deductable losses of deferred income tax assets
1,374,188.25 derecognized used in previous period
Influence of deductible temporary difference or deductible losses
143,603.00 of deferred income tax assets derecognized in reporting period.
Income tax expenses 4,732,632.19 (3) Other explaination
The reason of current period amount of income tax expense decreased50.02% compared with last period was deferred income tax decreased.
45 Relevant information about cash flow statement
Dalian Refrigeration Company Limited
Notes to the Financial Statements of year 2015
(1) Other cash received relating to operating activities
Items 2015 2014
Government grants 989,230.70 6,722,800.00
Received travel expense receivable 3,352,659.29 1,516,117.27
Deposit received 25,139,681.07 13,940,611.00
Received amount paid on behalf of related companies 705,562.72
interest income 11,419,665.11 9,972,394.64
Others 2,358,819.33 4,492,792.37
Total 43,260,055.50 37,350,278.00
(2) Other cash paid relating to operating activities
Items 2015 2014
Borrowing of travel expense 3,325,287.08 3,579,202.08
Deposit paid 26,407,383.40 26,539,861.00
Expenditure 79,560,411.38 99,074,957.27
Payment to related companies 519,142.61
Bank handling charges 1,123,590.67 501,204.64
Others 1,311,099.46 2,712,084.92
Total 112,246,914.60 132,407,309.91
(3) Cash receipts related to other financing activities
Items 2015 2014
Guarantee money took back 32,953,876.63 10,844,272.75 Total 32,953,876.63 10,844,272.75 (4) Other cash paid relating to financing activities
Items 2015 2014
Interests on discount of bill acceptance 45,446.93 83,527.50
Guarantee money paid 20,665,689.93 32,953,876.63
Total 20,711,136.86 33,037,404.13
46 Complementary information for consolidated cash flow statement
(1) The relationship between the net profit and the net cash flows from operating activities
Items 2015 2014
1. Reconciliation from the net profit to the cash flows from operating activities
Net profit 131,215,022.15 114,519,281.73 Add: Provisions for assets impairment 17,123,626.32 19,155,375.53 Depreciation of fixed assets 38,335,936.87 36,829,801.68 Amortization of intangible assets 4,507,956.43 4,328,566.19 Amortization of long-term deferred expenses 1,591,669.04 797,209.95 Losses on disposal of fixed assets, intangible assets and other long-term assets 11,212.67 -551,138.66 Losses on scrapping of fixed assets 50,506.07 -144,888.48 Losses on variation of fair value
Finance expenses 5,560,290.68 4,273,314.16 Investment losses -128,908,120.37 -103,222,399.00 Decrease in deferred tax assets -4,049,456.17 2,682,431.87
Dalian Refrigeration Company Limited
Notes to the Financial Statements of year 2015
Increase in deferred tax liabilities
Decrease in inventory 71,261,447.45 14,354,478.23 Decrease in operating receivables -114,889,219.96 -61,319,139.33 Increase in operating payables -84,569,865.56 -3,207,121.40 Others 12,190,520.00
Net cash flows from operating activities -50,568,474.38 28,495,772.47 2. Investing and financing activities that do not involve cash receipts and payments
Conversion of debt into capital
Convertible bonds to be expired within one year
Fixed assets under finance lease
3. Net increase in cash and cash equivalents
Cash at the end of the period 221,724,134.60 475,557,589.39 Less: Cash at the beginning of the period 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 -253,833,454.79 -26,781,570.96 (2) Net cash paid for acquiring subsidiaries and other business units
Items 2015
Cash and cash equivalents paid for acquiring subsidiaries 26,993,388.94 Including: Dalian Sanyo High-efficient Refrigeration System Co., Ltd. 26,993,388.94 Less: Cash and cash equivalents from acquired subsidiaries 6,528,961.79 Including: Dalian Sanyo High-efficient Refrigeration System Co., Ltd. 6,528,961.79 Net cash paid for acquiring subsidiaries and other business units 20,464,427.15 (3)Cash and cash equivalents
Items 2015 2014
1.Cash 221,724,134.60 475,557,589.39 Including: cash on hand 57,023.71 67,783.07 Bank deposits that can be used for payment whenever necessary 221,667,110.89 457,395,413.41 Other monetary capital that can be used for payment whenever necessary 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 year 221,724,134.60 475,557,589.39 Including: Cash or cash equivalents which was restricted in use of the
Company and subsidiaries in the group
47 The assets with the ownership or use right restricted
Items 31-12-2015 Reasons
Monetary fund 23,065,689.93 Guarantee money
Available for sale
719,363,590.50 During restricted sale periods
financial assets
Fixed assets 98,504,280.42Subsidiaries’ assets mortgaged for loans
Dalian Refrigeration Company Limited
Notes to the Financial Statements of year 2015
Items 31-12-2015 Reasons
Intangible assets 53,848,990.00Subsidiaries’ assets mortgaged for loans
Total 894,782,550.85
48 Foreign currency monetary items
Ending balance of Original Ending balance of RMB Items Exchange rate
currency equivalent
Monetary fund
Included: USD 1,962.92 6.4936 12,746.41 EUR 5.60 7.0952 39.73 JPY 229,261.00 0.053875 12,351.43 GBP
Accounts receivable
Included: GBP 123,632.40 9.6159 1,188,836.80 Accounts payable
Included: GBP 36,399.28 9.6159 350,011.84 Included: USD 6,726.55 6.4936 43,679.53Ⅶ. Changes of consolidation scope
1. Enterprise combined not under the same control in reporting period
Income of Net Profit Acquire of Acquire Time-poi Ratio of Method Determination
Obtained from the from the Name of nt of Obtained of Purchasing Basis on the
Cost of Purchasing Purchasing acquiree Obtained Equity Obtained Date Purchasing
Equity Date to the Date to the Equity (100%) Equity Date
End of the End of the Period Period Daliian
Sanyo
High-Efficien Cash paid and
t 2015.7.31 26,993,388.94 30 cash 2015.7.31 related procedure 58,355,875.55 1,201,817.66 Refrigeration finished
System Co.,
Ltd.
2. Combined cost and goodwill
Combined cost Daliian Sanyo High-Efficient Refrigeration System Co., Ltd Cash 26,993,388.94
Purchasing date fair value of shares held befor purchasing
21,294,200.84
date
Total combined cost 48,287,589.78
Less: the fair value of identifiable net assets 46,847,241.86
Goodwill 1,440,347.92
The Company acquired30% shares of Daliian Sanyo High-Efficient Refrigeration System Co., Ltd. on 31 July,2015 with consideration of RMB26,993,388.94. On the date of acquisition, the difference with the fair value of identifiable net assets of Daliian Sanyo High-Efficient Refrigeration System Co., Ltd. was RMB1,440,347.92, and treated as goodwill in the consolidated financial statements. At the end of 2015, it carried out the impairment test for the goodwill .
3.The identifiable assets and liabilities of acquiree at purchase date
Items Daliian Sanyo High-Efficient Refrigeration System Co., Ltd
Dalian Refrigeration Company Limited
Notes to the Financial Statements of year 2015
Items Daliian Sanyo High-Efficient Refrigeration System Co., Ltd
Purchasing date fair value Purchasing date book value Monetary fund 6,528,961.79 6,528,961.79 Receivable 48,374,356.95 48,374,356.95 Inventories 13,486,838.02 13,486,838.02 Other current assets 394,944.65 394,944.65 Fixed asset-original cost 35,490,428.03 35,490,428.03 Intangible assets 6,065,499.21 6,065,499.21 Long-term deferred expenses 512,875.00 512,875.00 Deferred income tax assets 364,893.23 364,893.23 Less: Payable 24,818,542.60 24,818,542.60 Payroll payable 1,126,096.85 1,126,096.85 Taxes payable 97,354.05 97,354.05 Total owner's equity 85,176,803.38 85,176,803.38 Net assets calculated according to the
46,847,241.86 46,847,241.86 shareholding proportions
The fair value determination method of the identifiable assets and liabilities:
Daliian Sanyo High-Efficient Refrigeration System Co., Ltd. used net book value as fair value of the identifiable assets and liabilities.
Ⅷ. Equity in other entities
1. Equity in subsidiary
A. The structure of the group
Main Shareholding(%)
Registered Obtaining Name of subsidiaries business Business nature
address method address Direct Indirect
Dalian Bingshan Group Refrigeration
Installation Co., Ltd. (“Installation Dalian Dalian Installation 100 Establish Company”)
Dalian Bingshan Group Sales Co., Ltd.
Dalian Dalian Trading 70 30 Establish (“Sales Company”)
Dalian Bingshan Air-Conditioning
Equipment Co., Ltd. (“Bingshan Dalian Dalian Manufacturing 70 Establish Air-Conditioning”)
Dalian Bingshan Metal Processing Co.,
Dalian Dalian Manufacturing 100 Establish Ltd. (“Metal Processing”)
Dalian Bingshan Guardian Automation
Dalian Dalian Manufacturing 60 Establish Co., Ltd.
Dalian Bingshan Ryosetsu Quick
Dalian Dalian Manufacturing 70 Establish Freezing Equipment Co., Ltd.
Wuhan New World Refrigeration
Wuhan Wuhan Manufacturing 100 Purchase Industrial Co., Ltd. (“WNWRI”)
Bingshan technical service (dalian) Co.,
Dalian Dalian Services 100 Establish Ltd.
Wuhan New World Refrigeration Air
Installation
Wuhan Wuhan 5 95 Establish Conditioner Engineering Co., Ltd.
Ningbo Bingshan Refrigeration Air
Ningbo Ningbo Installation 51 Establish Conditioner Engineering Co., Ltd.
Daliian Sanyo High-Efficient Refrigeration
Dalian Dalian Manufacturing 55 Combine System Co., Ltd
①All the holding proportion in subsidiaries were the same with votingproportion；
Dalian Refrigeration Company Limited
Notes to the Financial Statements of year 2015
②The company held over50% voting proportion insubsidiaries；
③ The company could control thesesubsidiaries；
④The change of the holding proportion in subsidiaries, please refer to the Note II. The scope of consolidation. B. Significant not wholly owned subsidiary
No.
2. The transaction of the company with itsowner’s equity share changed but still controlling the
subsidiary
A.Expaination to the changes of thesubsidiaries’owner’s equity share held by the company
(1) According to the 18th meeting of the 6th session of theCompany’s Board of Directors, the Company was
transferred49% shareholdings of Wuhan New World Refrigeration Industrial Co., Ltd. (“WNWRI”),and Wuhan New World Refrigeration Industrial Co., Ltd. became wholly owned subsidiary.
(2)According to the 11th meeting of the 6th session of theCompany’s Board of Directors, the Company was
transferred10% shareholdings of Daliian Bingshan Group Sales Co., Ltd., and transferred30% shareholdings of Daliian Bingshan Group Sales Co., Ltd. to WNWRI. At the end of the current year the company and WNWRI held100% shareholdings of Daliian Bingshan Group Sales Co., Ltd.
(3)According to the 12th meeting of the 6th session of theCompany’s Board of Directors, the Company was
transferred35.75% shareholdings of Daliian Bingshan Metal Processing Co., Ltd. and it became wholly owned subsidiary.
(4) According to the 12th meeting of the 6th session of theCompany’s Board of Directors,the company
decided to establish the join-venture Bingshan TechnicalService（Dalian）Co.,Ltd. with Daliian Bingshan
International Trade Co., Ltd. The company held60% equity. According to the 20th meeting of the 6th session of theCompany’s Board of Directors, the company was transferred40% shareholdings of Bingshan TechnicalService（Dalian）Co.,Ltd., and it became wholly owned subsidiary.
B.Affection of the trasactions to minority interests and equity attributable to parent company
Dalian Bingshan Wuhan New World Dalian Bingshan Bingshan technical Item Group Sales Co., Refrigeration Metal Processing service (dalian) Co., Ltd. Industrial Co., Ltd. Co., Ltd. Ltd.
Cash 6,843,000.00 66,694,510.81 9,249,900.00 6,024,000.00 Total purchase cost 6,843,000.00 66,694,510.81 9,249,900.00 6,024,000.00Less：Net assets calculated
according to the 6,806,378.07 55,815,058.96 9,330,010.7 6,360,172.00 shareholding proportions
Differences 36,621.93 10,879,451.85 -80,110.70 -336,172.00 Included: Adjusted capital
36,621.93 10,879,451.85 -80,110.70 -336,172.00 surplus
3. Equity in joint venture arrangement or associated enterprise
A.The important associated enterprise or joint ventures
Main Shareholding(%)
Registered Accounting Name of joint ventures or affiliated companies business Business nature
address Direct Indirect methods address
Associated enterprise:
Dalian Bingshan–P&A Recreation Development Equity Dalian Dalian Installation 50%
Engineering Co., Ltd. method Joint ventures:
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 Equity Dalian Fuji Bingshan Vending Machine Co., Ltd. Dalian Dalian Manufacturing 49%
method
Dalian Refrigeration Company Limited
Notes to the Financial Statements of year 2015
The company determined important joint venture by its gain from investment to the company over10% of thecompany’s net profit or thecompany’s proportion of its net assets over10% of thecompany’s net assets.
①All the holding proportion in subsidiaries were the same with votingproportion；
②The company had no important influence to joint venture or affiliated company with voting proportion held by the company under20%；
③ There was no associated enterprise or joint venture with voting proportion held by the company over20%, but the company had no important influence.
B.The main financial information of important associated enterprise
Dalian Bingshan–P&A Recreation Development Engineering Co., Ltd.
Items 31-12-2015/2015 31-12-2014/2014
Current assets 9,006,060.68 11,558,920.00
Including:Cash and cash equivalents 1,132,033.68 2,892,025.92
Non-current assets 471,614.42 213,621.85
Assets total 9,477,675.10 11,772,541.85
Current liabilities 3,803,479.48 4,616,122.53
Non-current liabilities
Total liabilities 3,803,479.48 4,616,122.53
Minority interests
Equity to the parent company 5,674,195.62 7,156,419.32
Net assets calculated according to the
2,837,097.81 3,578,209.66
shareholding proportions
Adjusting events
—Goodwill
—Unrealized profits of insider tradings
—Employee’s welfare and bonus fund in foreign
-24,289.69
invested company
Book value of equity investment of associated
2,837,097.81 3,553,919.97
enterprise
Fair value of equity investment with public offer
Operating income 1,967,955.20 17,925,040.13
Finance expenses -2,128.17 -4,324.02
Income tax -561.52 309,263.49
Net profit -1,482,223.70 971,587.74
Other comprehensive income
Total comprehensive income -1,482,223.70 971,587.74
The dividends received from associated enterprise
500,000.00
during current year
C. The main financial information of important joint ventures
31-12-2015/2015
Items Keinin-Grand Ocean
Panasonic Compressor Dalian Fuji Bingshan
Thermal Technology
(Dalian) Co., Ltd Vending Machine Co., Ltd. (Dalian) Co., Ltd
Current assets 288,372,485.62 1,394,237,128.94 361,305,733.51 Non-current assets 96,260,501.77 350,839,627.19 61,629,639.07
Dalian Refrigeration Company Limited
Notes to the Financial Statements of year 2015
31-12-2015/2015
Items Keinin-Grand Ocean
Panasonic Compressor Dalian Fuji Bingshan
Thermal Technology
(Dalian) Co., Ltd Vending Machine Co., Ltd. (Dalian) Co., Ltd
Total assets 384,632,987.39 1,745,076,756.13 422,935,372.58 Current liabilities 141,597,811.02 587,437,711.53 188,191,481.16 Non-current liabilities 3,583,780.65 Total liabilities 141,597,811.02 587,437,711.53 191,775,261.81 Minority interests
Equity to the parent company 243,035,176.37 1,157,639,044.60 231,160,110.77 Net assets calculated according to the
48,607,035.27 463,055,617.84 113,268,454.28 shareholding proportions
Adjusting events
—Goodwill
—Unrealized profits of insider tradings
—Employee’s welfare and bonus fund in
-5,163,248.92
foreign invested company
Book value of equity investment of
48,607,035.27 457,892,368.92 113,268,454.28 affiliated companies
Fair value of equity investment with public
offer
Operating income 680,314,218.23 1,894,363,146.75 463,077,411.32 Net profit 79,365,464.49 161,351,528.59 58,543,688.14 Net profit of discontinuing operation
Other comprehensive income
Total comprehensive income 79,365,464.49 161,351,528.59 58,543,688.14 The current dividends received from joint
9,600,000.00 34,000,000.00 5,314,796.52 ventures
Continued：
31-12-2014/2014
Items
Panasonic Cold-chain Panasonic Compressor Dalian Fuji Bingshan
(Dalian) Co., Ltd (Dalian) Co., Ltd Vending Machine Co., Ltd. Current assets 924,187,273.25 1,533,547,513.54 201,931,675.02 Non-current assets 322,882,931.13 358,157,107.39 62,589,896.32 Total assets 1,247,070,204.38 1,891,704,620.93 264,521,571.34 Current liabilities 717,528,722.26 796,714,218.88 77,636,760.15 Non-current liabilities 3,421,865.04 Total liabilities 717,528,722.26 796,714,218.88 81,058,625.19 Minority interests
Equity to the parent company 529,541,482.12 1,094,990,402.05 183,462,946.15 Net assets calculated according to the
211,816,592.84 437,996,160.82 89,896,843.61 shareholding proportions
Adjusting events
—Goodwill 4,440,630.90
—Unrealized profits of insider tradings
Dalian Refrigeration Company Limited
Notes to the Financial Statements of year 2015
31-12-2014/2014
Items
Panasonic Cold-chain Panasonic Compressor Dalian Fuji Bingshan
(Dalian) Co., Ltd (Dalian) Co., Ltd Vending Machine Co., Ltd.—Employee’s welfare and bonus fund in
-683,617.26 -5,481,154.41
foreign invested company
Book value of equity investment of
215,573,606.48 432,515,006.40 89,896,843.61 affiliated companies
Fair value of equity investment with public
offer
Operating income 1,689,304,466.33 2,433,075,590.63 375,618,136.05 Net profit 21,363,039.25 171,286,075.45 30,204,438.98 Net profit of discontinuing operation
Other comprehensive income
Total comprehensive income 21,363,039.25 171,286,075.45 30,204,438.98 The current dividends received from joint
8,000,000.00 16,000,000.00 2,161,995.35 ventures
D.Summary financial information of insignificant joint ventures
Items 31-12-2015/2015 31-12-2014/2014
Total book value of investment of affiliated
597,762,811.43 297,690,362.39 companies
The total of following items according to the
— — shareholding proportions
Net profit 19,827,582.11 16,869,672.64 Other comprehensive income
Total comprehensive income 19,827,582.11 16,869,672.64 E. No significant restrictions of the ability of joint venture or associated enterprise transfer funds to the company.
F.No excess loss of joint venture or associated enterprise.
G.No commitment related to joint venture or associated enterprise needed disclose.
H.No contingent liabilities related to joint venture or associated enterprise needed disclose.
Ⅸ. 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 thecompany‘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 31st
December 2015,the big five customers of accounts receiveable was14.91% of total accounts receiveable,
and as at 31st December 2014 that was8.10%.
Except guarantee events disclosed in the notes, there was no other credit risk of guarantee of the company.
Dalian Refrigeration Company Limited
Notes to the Financial Statements of year 2015
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 31st December 2015, thecompany’s financial assets and financial liabilities in line with non discount cash flow of the contracts asfollowing：
31-12-2015
Items
Original value of 2-5
Book value Within 1 year 1-2 years Over 5 years the book years
Monetary fund 244,789,824.53 244,789,824.53 244,789,824.53
Notes receivable 71,699,517.68 71,699,517.68 71,699,517.68
Accounts
671,423,836.87 801,499,499.03 671,423,836.87
receivable
Interest receivable
Other receivables 22,755,328.21 28,070,768.44 22,755,328.21
Available for sale
733,275,249.09 738,500,019.89 733,275,249.09 financial assets
Subtotal 1,743,943,756.38 1,884,559,629.57 1,010,668,507.29 733,275,249.09 Short-term
82,600,000.00 82,600,000.00 82,600,000.00
borrowings
Notes payable 234,189,011.72 234,189,011.72 234,189,011.72
Accounts payable 660,398,503.26 660,398,503.26 660,398,503.26
Employees’
compensation 51,857,345.29 51,857,345.29 51,857,345.29
payable
Taxes payable 15,701,578.36 15,701,578.36 15,701,578.36
Dividend payable 533,156.00 533,156.00 533,156.00
Other payables 99,890,290.15 99,890,290.15 99,890,290.15
Subtotal 1,145,169,884.78 1,145,169,884.78 1,145,169,884.78
Continued:
31-12-2014
Items
Original value of
Book value Within 1 year 1-2 years 2-5 years Over 5 years the book
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
Subtotal 1,043,942,068.96 1,170,383,237.13 1,001,513,680.26 42,428,388.70 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’ 55,993,637.27 55,993,637.27 55,993,637.27
Dalian Refrigeration Company Limited
Notes to the Financial Statements of year 2015
31-12-2014
Items
Original value of
Book value Within 1 year 1-2 years 2-5 years Over 5 years the book
compensation
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
A. 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 31st December 2015, thecompany’s foreign currency assets and foreign currency liabilities listed in
RMB asfollowing：
31-12-2015
Items
USD JPY GBP EUR Total
Foreign currency
financial assets,
Monetary fund 12,746.41 12,351.43 39.73 25,137.57 Notes receivable 1,188,836.80 1,188,836.80 Subtotal 12,746.41 12,351.43 1,188,836.80 39.73 1,213,974.37 Foreign currency
financial liability
Accounts payable 43,679.53 350,011.84 393,691.37 Subtotal 43,679.53 350,011.84 393,691.37 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 Notes receivable 2,578,861.20 2,578,861.20 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 347,383.81 347,383.81 The sensitiveanalysis：
As at 31st December 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.
B. Interest rate risk
The interest risk of the Group incurred from bank loan, interest rate risk of a floating interest rate of financial
Dalian Refrigeration Company Limited
Notes to the Financial Statements of year 2015
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 31st December
2015 , the subsidiary of the company Wuhan New World Refrigeration Industrial Co., Ltd. borrowed short term loan RMB 82,600,000.00 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 year 2015 will increase or decrease RMB413,000.00
Ⅹ.Fair value
1.Items measured at fair value
As at 31 December,2015,some equity investments of available-for-sale financial assets were measured at the fair value.
Fair value level can be classified according to the input value of the lowest level that is significant to whole
measurement of fair value:
First level: quote of same assets or liabilities in an active market (unadjusted).
Second level: directly (price) or indirectly (derive from price) use observable input value other than market
quote of assets or liabilities in the first level.
Third level: use any input value not based on observable market data in assets or liabilities (unobservable
input value).
2.Item measured at fair value at the end of current year
Fair value at the end of current year
Items
First level Second level Third level Total
Sub-total of available for sale
719,363,590.50 719,363,590.50 financial assets
Debt instrument investment
Equity instrument investment 719,363,590.50 719,363,590.50 Other investment
Total assets 719,363,590.50 719,363,590.50 3.Determined on the basis of continuous first level for fair value measurement according to the closed price of stock market as at the end of year 2015.
4.The above fair value of the company did not changed in different levels.
5.Financial assets and financial liabilities not measured at fair value mainly include: Cash and bank
balances, notes receivable,accounts receivable, other receivables, short-term loans, notes payable, accounts payable, other payables, long-term payables, etc.The difference between the book value of financial assets
and financial liabilities that are not measured at fair value and fair value is small.
Ⅺ. Related Parties Relationships and Transactions
1 Information of thecompany’s parent company
The parent The parent
Name of Registered Nature of
Registered capital company's company's voting
enterprise address business shareholding right
Dalian Bingshan
Dalian Manufacture 158,580,000.00 21.34% 21.34%
Group Co., Ltd.
(1) Information of thecompany’s parent company
Dalian Bingshan Group Co., Ltd. Is a sino–foreign joint venture located No.888 Xinan Road, Shahekou District,
Dalian Refrigeration Company Limited
Notes to the Financial Statements of year 2015
Dalian, China.The legal representive person of Dalian Bingshan Group Co., Ltd. Is Homma Tetsuro, and the
registed capital is RMB158.58 million. The registed 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 controlproduct, home electronic appliance, environment protect equipment and etc. (Business needed administrative permission must have the administrative license. )
(2) There is no ultimate controller at the end of the current year.
2 The information of the subsidiaries please referstoⅧ.1 of this note.
3 The information of the affiliated company and joint venture please referstoⅧ.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 Associated companie of the Company
Panasonic Refrigeration (Dalian) Co., Ltd Associated companie of the Company
Dalian Honjo Chemical Co., Ltd Associated companie of the Company
Panasonic Cold-chain (Dalian) Co., Ltd Associated companie of the Company
Keinin-Grand Ocean Thermal Technology (Dalian) Co., Ltd Associated companie of the Company
Panasonic compressor (Dalian) Co., Ltd Associated companie of the Company
Dalian Sanyo Meica Electronics Co., Ltd Associated companie of the Company
Beijing Huashang Bingshan Refrigeration and Air-conditioning Machinery Co., Ltd Associated companie of the Company
Dalian Fuji Bingshan Vending Machine Co., Ltd Associated companie of the Company
Daliian Sanyo High-Efficient Refrigeration System Co., Ltd Associated companie of the Company
MHI Bingshan Refrigeration (Dalian) Co.,Ltd Associated companie of the Company
Changzhou Jingxue Freezing Equipment Co., Ltd. Associated companie of the Company
Dalian Fuji Bingshan Vending Machine Co., Ltd. Associated companie of the Company
Wuhan Lanning Energy Science Co., Ltd. Associated companie of subsidiary
Daliian Sanyo High-Efficient Refrigeration System Co., Ltd was a Joint venture of the company during January to July of 2015, and its financial information of January to July of 2015 included in the above form.
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 Associated company of Dalian Bingshan Group
Dalian Bingshan Metal Technology Co., Ltd Associated company of Dalian Bingshan Group
Dalian Mahe Level Control Electrical Appliances Co., Ltd Associated company of Dalian Bingshan Group
Linde Engineering (Dalian) Co., Ltd Associated company of Dalian Bingshan Group
BAC Dalian Co., Ltd Joint venture of Dalian Bingshan Group
Linde Engineering (Hangzhou) Co., Ltd Associated company of Dalian Bingshan Group
Dalian Refrigeration Company Limited
Notes to the Financial Statements of year 2015
5 The transactions between the Company and the related parties
(1) The consolidated financial statements are based on the financial statements of individual subsidiaries
which are included in the consolidation scope and prepared after elimination effect of intra-group transaction.
(2) Purchases of goods from related parties
Names of the related parties Details of transaction 2015 2014
Panasonic Refrigeration (Dalian) Co., Ltd. Purchases of goods 15,802,549.92 4,862,468.53 Panasonic Cold Chain (Dalian) Co., Ltd. Purchases of goods 193,000,774.15 17,727,279.07 Panasonic Refrigeration (Dalian) Co., Ltd. Purchases of goods 1,170,571.97 2,725,666.67 Dalian Sanyo Meica Electronics Co., Ltd Purchases of goods 266,054.52 444,561.67 Dalian Bingshan Group Refrigeration Equipment Co., Ltd Purchases of goods 19,240,996.98 50,692,001.24 Dalian Third Refrigeration Equipment Factory Purchases of goods 9,477,468.27 8,322,630.93 Dalian Spindle Cooling Towers Co., Ltd Purchases of goods 1,649,338.45 740,512.80 BAC Dalian Co., Ltd Purchases of goods 39,198,256.38 48,249,141.90 Dalian Bingshan Engineering& Trading Co. , Ltd Purchases of goods 71,456,746.91 33,445,174.50 Dalian Bingshan Group Materials Trading Co. , Ltd Purchases of goods 1,599,625.64 Dalian Bingshan Metal Technology Co., Ltd Purchases of goods 316,910.80 821,259.04 Daliian Sanyo High-Efficient Refrigeration System Co., Ltd Purchases of goods 763,338.56 2,008,804.63 Beijing Bingshan Serial Refrigeration Equipment Co., Ltd Purchases of goods 341,880.34 44,169.93 Beijing Huashang Bingshan Refrigeration and
Purchases of goods 1,398,717.87
Air-conditioning Machinery Co., Ltd.
Dalian Fuji Bingshan Vending Machine Co., Ltd Purchases of goods 242,187.94
Changzhou Jingxue Freezing Equipment Co., Ltd. Purchases of goods 11,909,299.18
MHI Bingshan Refrigeration (Dalian) Co.,Ltd. Purchases of goods 125,734.92
Total 366,360,827.16 171,683,296.55 (3) Sales of goods to related parties
Details of
Names of the related parties 2015 2014 transaction
Panasonic Refrigeration (Dalian) Co., Ltd. Sales of goods 27,493,069.64 7,015,543.66 Panasonic Cold Chain (Dalian) Co., Ltd. Sales of goods 71,856,798.06 23,234,625.97 Panasonic Refrigeration (Dalian) Co., Ltd. Sales of goods 5,196,070.67 7,516,298.00 Dalian Bingshan Group Refrigeration Equipment Co., Ltd Sales of goods 776,009.44 1,166,100.16 Dalian Third Refrigeration Equipment Factory Sales of goods 1,821,581.25 5,296,508.27 BAC Dalian Co., Ltd Sales of goods 96,085.47 1,937,329.05 Dalian Bingshan Engineering& Trading Co. , Ltd Sales of goods 97,111,776.90 90,440,496.58 Dalian Bingshan–P&A Recreation Development Engineering Co., Ltd Sales of goods 6,538.47 512,915.66 Beijing Bingshan Serial Refrigeration Equipment Co., Ltd Sales of goods 650,900.00 1,249,788.89 Beijing Huashang Bingshan Serial Refrigeration Equipment Co., Ltd Sales of goods 64,232,868.76 33,805,364.72 Dalian Fuji Bingshan Vending Machine Co., Ltd Sales of goods 18,409,705.00 2,991,827.62
Dalian Refrigeration Company Limited
Notes to the Financial Statements of year 2015
Details of
Names of the related parties 2015 2014 transaction
Dalian Mahe Level Control Electrical Appliances Co., Ltd Sales of goods 52,355.30 106,730.07 Dalian Bingshan Metal Technology Co., Ltd Sales of goods 84,149.31 136,573.08 Daliian Sanyo High-Efficient Refrigeration System Co., Ltd Sales of goods 421,892.88 509,530.14 MHI Bingshan Refrigeration (Dalian) Co.,Ltd Sales of goods 7,621,072.14 3,334,001.80 Dalian Honjo Chemical Co., Ltd Sales of goods 15,219.80 Keinin-Grand Ocean Thermal Technology (Dalian) Co., Ltd. Sales of goods 766,404.00
Changzhou Jingxue Freezing Equipment Co., Ltd. Sales of goods 105,270.84
Dalian Spindle Cooling Towers Co., Ltd Sales of goods 1,474,155.53
Total 298,176,703.66 179,268,853.47 (4) Leasing fee from related party
Rental income of Rental income of Lessee Leasing assets
current year previous year
Dalian Bingshan Group Co., Ltd. Offices 103,680.00 103,680.00 MHI Bingshan Refrigeration (Dalian) Co.,Ltd. Workshops 4,200,000.00 1,575,000.00 Dalian Bingshan Engineering& Trading Co. , Ltd Offices 124,740.00
Total 4,428,420.00 1,678,680.00 Leasing fee to related party
Rental fees of Rental fees of
Leaser Leasing assets
current year previous year
Dalian Bingshan Group Co., Ltd. Offices 142,572.00 142,572.00 Total 142,572.00 142,572.00 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㎡, and annual rent is RMB 4.2 million since 15th August, 2014 to 16th July, 2029.
The Company signed a leasing agreement with Dalian Bingshan International Trade Co. , Ltd., and leased 693㎡ of offices to Dalian Bingshan International Trade Co. , Ltd. The rental of offices is RMB 124,740.00 per
year, and the effective period of the contract is 2 years.
(5) No guarantee with related companies.
(6) The borrowing of funds from related party
Name of the related party Amount Starting date Ending date Explanation
Dalian Bingshan Group Co., Ltd. 10,000,000.00 2006.09 Borrowed for moving to new location Total 10,000,000.00
Dalian Refrigeration Company Limited
Notes to the Financial Statements of year 2015
TheCompany’s subsidiary Dalian Bingshan Ryosetsu Quick Freezing Equipment Co., Ltd. borrowed RMB 10,000,000.00 from Dalian Bingshan Group Co., Ltd. for moving to new location, and the interests are counted same as bank loan and interest RMB547,083.33 paid during the current period.
TheCompany’s subsidiary Wuhan New World Refrigeration Industrial Co., Ltd. (“WNWRI”) borrowed RMB 15,500,000.00 from Dalian Bingshan Group Co., Ltd. for constrution project, and the interests are counted same as bank loan and interest RMB483,611.11 paid during the current period. At the end of the current year, the loan was paid back.
7 Related party asset transfer and debt restructuring
Not applicable.
8 Rewards for the key management personnel
Items 2015 2014
Total rewards for the key management person
3,753,800.00 3,063,100.00
( tax included)
9 Other transactions between the Company and the related parties
Transaction type Name of the related party 2015 2014 Pricing and decision procedure
Resolution of Board Shareholding transfer Dalian Bingshan Group Co., Ltd. 25,861,136.84 2,281,000.00
of Directors
Dalian Bingshan Group Import& Resolution of Board Shareholding transfer 6,024,000.00
Export Co. , Ltd of Directors
Total 31,885,136.84 2,281,000.00
(1) According to the 18th meeting of the 6th session of theCompany’s Board of Directors, the Company was
transferred19% shareholdings of Wuhan New World Refrigeration Industrial Co., Ltd. (“WNWRI”) from Dalian Bingshan Group Co., Ltd.with the price of RMB25,861,136.84.
(2)According to the 20th meeting of the 6th session of theCompany’s Board of Directors, the Company was
transferred40% shareholdings of Bingshan Technical Service（Dalian） Co.,Ltd. from Dalian Bingshan
International Trade Co.,Ltd. with the price of RMB 6,024,000.00.
10 Amounts due from/to related parties
(1) Accounts receivable
31-12-2015 31-12-2014
Names of the related parties
Provision for Provision for Amount Amount
bad debts bad debts Panasonic Compressor (Dalian) Co., Ltd. 265,820.40 27,166.02 91,852.00 7,367.60 Panasonic Refrigeration (Dalian) Co., Ltd. 5,473,096.64 273,654.83 2,735,787.19 136,789.36 Panasonic Cold-chain (Dalian) Co., Ltd. 25,195,419.27 1,259,770.96 2,082,509.89 109,302.98 Dalian Bingshan Engineering& Trading Co., Ltd. 3,410,519.80 170,525.99 1,155,043.14 57,752.16 BAC Dalian Co., Ltd. 112,420.00 5,621.00 5,600.00 280.00 Beijing Bingshan Serial Refrigeration Equipment Co., Ltd. 484,253.52 24,212.68 378,597.55 18,929.88
Dalian Refrigeration Company Limited
Notes to the Financial Statements of year 2015
Dalian Bingshan–P&A Recreation Development
24,430.00 2,443.00 215,180.00 10,759.00 Engineering Ltd.
Beijing Huashang Bingshan Refrigeration and
40,803,001.99 2,093,750.10 3,713,359.64 220,467.98 Air-conditioning Machinery Co., Ltd.
Dalian Fuji Bingshan Vending Machine Co., Ltd. 10,776,362.22 538,818.11 318,714.88 15,935.74 Dalian Sanyo High-Efficient Refrigeration System Co., Ltd. 142,907.59 7,145.38 MHI Bingshan Refrigeration (Dalian) Co.,Ltd. 28,989.23 1,449.46 461,942.00 23,097.10 Dalian Spindle Cooling Towers Co., Ltd 917,881.08 45,894.05
Dalian Third Refrigeration Equipment Factory 5,642.60 282.13
(2)Notes receivable
Names of the related parties 31-12-2015 31-12-2014
Panasonic Compressor (Dalian) Co., Ltd 1,052,980.08 1,868,896.93 Dalian Bingshan Group Import& Export Co. , Ltd 9,847,217.00
BAC Dalian Co., Ltd 100,000.00
Panasonic Cold Chain (Dalian) Co., Ltd 20,163,705.41 1,875,903.71 Panasonic Refrigeration (Dalian) Co., Ltd 2,909,535.58 227,535.94 Beijing Bingshan Serial Refrigeration Equipment Co., Ltd 1,100,000.00 2,000,000.00 Beijing Huashang Bingshan Refrigeration and Air-conditioning Machinery Co., Ltd 4,000,000.00 5,000,000.00 MHI Bingshan Refrigeration (Dalian) Co.,Ltd. 6,294,283.14
Dalian Spindle Cooling Towers Co., Ltd 1,494,656.98
(3) Accounts paid in advance
Names of the related parties 31-12-2015 31-12-2014
Beijing Huashang Bingshan Refrigeration and Air-conditioning Machinery Co., Ltd.
378,268.10
Dalian Bingshan International Trading Co. , Ltd 18,068,922.66 2,698,283.12 Changzhou Jingxue Freezing Equipment Co., Ltd.
268,714.00
(4) Other accounts receivable
31-12-2015 31-12-2014
Name of the related party
Provision for bad Provision for Amount Amount
debts bad debts
Panasonic Cold-chain (Dalian) Co., Ltd. 137,520.50 6,876.03 (5) Notes payable
Names of the related parties 31-12-2015 31-12-2014
Dalian Bingshan Group Co., Ltd. 760,794.55 Dalian Bingshan Group Refrigeration Equipment Co., Ltd. 6,897,040.82 8,000,000.00 BAC Dalian Co., Ltd. 1,600,000.00 700,000.00
Dalian Refrigeration Company Limited
Notes to the Financial Statements of year 2015
Dalian Bingshan Group Materials Trading Co. , Ltd. 1,597,350.00
Dalian Bingshan Group Import& Export Co. , Ltd. 2,543,514.28 649,748.52 Dalian Third Refrigeration Equipment Factory 2,730,000.00 300,000.00 Dalian Sanyo High-Efficient Refrigeration System Co., Ltd. 600,000.00 Dalian Spindle Cooling Towers Co., Ltd. 1,107,249.00 52,000.00 Changzhou Jingxue Freezing Equipment Co., Ltd. 4,227,728.00
Panasonic Compressor (Dalian) Co., Ltd 136,199.00
Dalian Bingshan Metal Processing Co., Ltd. 100,000.00
(6) Accounts payable
Names of the related parties 31-12-2015 31-12-2014
Dalian Third Refrigeration Equipment Factory 3,437,911.21 1,507,966.95 BAC Dalian Co., Ltd. 40,548,590.02 21,593,357.00 Dalian Bingshan Group Refrigeration Equipment Co., Ltd. 8,860,105.57 6,536,438.32 Panasonic Refrigeration (Dalian) Co., Ltd. 195,000.00 Panasonic Cold Chain (Dalian) Co., Ltd. 32,804,524.70 12,531.00 Dalian Sanyo Meica Electronics Co., Ltd. 114,905.11 221,236.85 Dalian Spindle Cooling Towers Co., Ltd. 344,750.00 269,499.00 Dalian Bingshan Engineering& Trading Co., Ltd. 5,671,660.46 2,849,467.19 Panasonic Compressor (Dalian) Co., Ltd. 45,650.00 25.50 Changzhou Jingxue Freezing Equipment Co., Ltd. 5,742,746.00
Dalian Bingshan Metal Technology Co., Ltd. 222,692.68 251,907.04 Dalian Sanyo High-Efficient Refrigeration System Co., Ltd. 792,639.78 (7) Accounts received in advance
Names of the related parties 31-12-2015 31-12-2014 Dalian Bingshan Engineering& Trading Co., Ltd. 79,008.70 394,474.36 Beijing Huashang Bingshan Refrigeration and Air-conditioning Machinery Co., Ltd. 352,929.50
MHI Bingshan Refrigeration (Dalian) Co.,Ltd. 5,850.00
Panasonic Cold Chain (Dalian) Co., Ltd. 1,466,923.23
(8) Other accounts payable
Names of the related parties 31-12-2015 31-12-2014
Dalian Bingshan Group Co., Ltd. 10,412,056.06 10,015,792.27 Dalian Third Refrigeration Equipment Factory 1,000.00 1,000.00 Dalian Bingshan Engineering& Trading Co., Ltd. 346.00 17,441.44 MHI Bingshan Refrigeration (Dalian) Co.,Ltd. 152,371.59 475,863.95 Beijing Huashang Bingshan Refrigeration and Air-conditioning
61,241.27
Machinery Co., Ltd.
11 Related party commitment
To ease the construction fund demand pressures of Wuhan New World Refrigeration Industry Co., Ltd. a
wholly owned subsidiary company, Dalian Bingshan Group Co., Ltd. using its own funds to provide loan to
Wuhan New World Refrigeration Industry Co., Ltd. not exceed RMB20 million yuan for not more than 12
Dalian Refrigeration Company Limited
Notes to the Financial Statements of year 2015
months with the same period bank loans interest rates.
Ⅻ. Stock payment
1.The Stock payment overall situation
The current total equity instruments granted to the company 10,150,000.00 Amount of the equity i(cid:10)struments company right of this line 10,150,000.00 Company current total failure of the equity instruments 0.00 The granted price and remaining contract term of the restricted shares RMB5.56 pershare，3 remaining contract terms outstanding at the end of current year were 12 months, 24 months and 36 months 2.The Stock payment settled by equity
The determined methods of the fair value of the equity
Fair value of the stock on the granted date
instruments granted to date
Determine the number of vested equity instruments Actual number of exercised
This estimate and it is estimated that there are significant
No
differences of the previous period
Equity-settled share-based payment included in the total amount
12,190,520.00 of capital reserves
This period of equity-settled share-based payment confirmation
12,190,520.00 total costs
According to the the 13th and 15th Meeting of 6th Session of the Board of Directors of the Company, and the Listed Company Equity Incentive Management Measures (Trial), and the authorization of 1st Extraordinary
Shareholders’ General Meeting of 2015, the Board convinced that the granting conditions according to
restricted stock incentive plan of the Company have been achieved, thus agreed to make the grant day on
March 4, 2015, and granted 10,150,000 shares restricted stock to the incentive object.
XIII. Commitments and Contingency
1 No major commitments to be disclosed at the end of year 2015.
2 No other contingency needed disclosed at the end of year 2015.
XIV. Post balance sheet issues
1 Significant events had not adjusted
(1)Issue shares
The company received the “Reply of Approval for the Non-Public Issuance of A Stocks by Dalian Refrigeration Co., Ltd. from CSRC on December 31, 2015. The company has been approved to issue no more than
38,821,954 new shares. The approval will remain available in six months since the date when it was granted. (2)Investment
Not investment.
(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. plans 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. The Company will hold95% shareholders of Dalian Bingshan Ryosetsu Quick Freezing
Equipment Co., Ltd.Until the report date, the above absorbing and merging was processing.
(4)Significant lawsuit, arbitration and commitment
Not applicable.
(5)Others
The Company received the notice from the controlling shareholder Dalian Bingshan Group Co., Ltd.
(“Bingshan Group”) on February 22, 2016. Bingshan Group have increased holdings of 1,000,000 A shares of the Company through the Shenzhen stock exchange securities trading system on February 22, 2016,
Dalian Refrigeration Company Limited
Notes to the Financial Statements of year 2015
accounting for about0.28% of the total issued shares of the Company. Before the increased holdings,
Bingshan Group held 76,855,683 shares of the Company, accounting for about21.34% of the total issued
shares of the Company. After the increased holdings, Bingshan Group hold 77,855,683 shares of the
Company, accounting for about21.62% of the total issued shares of the Company.
Resolution of 2nd meeting of 7th session of the Board of directors agreed to provide guarantee to Dalian
Bingshan Group Co., Ltd. for obtaining Development Fund of National Development Bank.Total amount of the loan was RMB120 million with interest rate1.2%, and the loan period was 10 years. The fund can only be used for cold chain green intelligent equipment and the development of service industry.When Dalian Bingshan
Group Co., Ltd.recieves the fund, they will transfer all the fund to the company with the same conditions.
2 Information about profit distribution of post balance sheet
Items Amount
Dividend proposed to be distributed after balance sheet date 36,016,497.50 Dividend approved to be distributed by the General Meeting
Board of directors proposed to withdraw the other reserved capital on the basis of20% of theCompany’s net
profit and distribute cash dividend of RMB 0.1 per share and using capital surplus RMB0.5 per share to add
capital , the cash dividend of B shareholders will be converted to Hong Kong dollar and paid.The dividend
was calculated according to the total share capital after share granted i.e. 360,164,975 shares, and it was not recognized as a liability on the financial statements in current report period.
3 Significant sales return after balance sheet day
Not applicable.
4 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 Debt restructing during the current period.
During the reporting period, the company signed a creditor's rights transfer agreement with Dalian Xinghaiwan Development and Construction Management Center and Dalian Ganghe Economic and Trade Co., Ltd., and
the company losses RMB586,377.00 in this debt restructuring.
3There was no assets exchange during the current period.
4The Companydidn’t design employer pension plan.
5 There was no discontinuing operation during the current period.
6 Segment 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 operatingactivities；
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 following conditions:
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.
Dalian Refrigeration Company Limited
Notes to the Financial Statements of year 2015
The transfer prices between segments were decided according to the market prices.The expenses of common assets usedby segments and other common expenses shoude 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 geogeriphic area, including Northeast
China, Central China and East China. The Northeast China segment included thecompany’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(unit: RMB10 million)
31-12-2015/2015
Items
Northeast
Central China East China Offset Total
China
1 Operating income 187,030.09 25,728.41 3,817.19 55,823.84 160,751.85
Including:Income from external
143,011.97 15,948.33 1,791.55 160,751.85
transaction
Income from internal
44,018.12 9,780.08 2,025.64 55,823.84
transaction
2 Selling expenses 172,737.59 26,680.89 3,812.12 55,552.28 147,678.32
Including:Investment income from
12,566.39 0.69 12,567.08
associates and joint ventures
Impairment on assets 982.91 728.69 0.76 1,712.36
Depreciation and amortization 3,363.82 1,067.73 12.01 4,443.56
3 Operating profits(loss) 14,644.95 -847.98 230.17 432.38 13,594.76
4 Income tax 456.95 -39.69 56.00 473.26
5 Net profit(loss) 14,188.00 -808.28 174.16 432.38 13,121.50
6 Total assets 405,212.84 49,854.55 2,435.96 49,253.36 408,249.99
7 Total liabilities 121,861.60 37,074.47 1,827.56 23,900.31 136,863.32
8 Other significant non cash items 28,755.40 3,088.38 44.27 1,555.58 30,332.47
Capital expenditure 28,755.40 3,088.38 44.27 1,555.58 30,332.47
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
31-12-2015
Categories Balance Provision for doubtful debt
Book value Amount Proportion(%) Amount Proportion(%)
Major single amount and bad
debt provision provided
individually
Bad debt provided on group
262,260,040.72 100 65,568,099.85 25.00 196,691,940.87 basis
Dalian Refrigeration Company Limited
Notes to the Financial Statements of year 2015
Minor single amount but bad
debt provision provided
individually
Total 262,260,040.72 100 65,568,099.85 25.00 196,691,940.87 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
Bad debt provided on group
277,119,839.64 100 71,812,337.04 25.91 205,307,502.60 basis
Minor single amount but bad
debt provision provided
individually
Total 277,119,839.64 100 71,812,337.04 25.91 205,307,502.60 Accounts receivable which bad debt provisions are provided on age basis in the group
31-12-2015
Account ages
Amount Provision for bad debts Proportion rates(%)
Within 1 year 90,757,943.34 3,075,608.37 5
1 to 2 years 80,772,588.11 8,077,258.81 10
2 to 3 years 32,194,417.23 9,658,325.17 30
3 to 4 years 23,806,468.74 11,903,234.37 50
4 to 5 years 9,374,750.85 7,499,800.68 80
Over 5 years 25,353,872.45 25,353,872.45 100
Total 262,260,040.72 65,568,099.85
(2) Provision for bad debts accrued, regain or switch back in the period
In the current period, RMB-4,997,926.80 were accrued provision for bad debts, and no amount was switched back or regained.
(3) The write-off of accounts receivable during the reporting period
Items Written off amount
14 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
Companies Amount Proportion(%) Provision for bad debts Dalian Bingshan Group Sales Co., Ltd. 29,245,775.90 11.15
Beijing Huashang Bingshan Refrigeration and
12,971,857.08 4.95 805,266.16 Air-conditioning Machinery Co., Ltd.
Dalian Refrigeration Company Limited
Notes to the Financial Statements of year 2015
Beidahuang Taihua Organic Foods Co., Ltd. 9,068,326.88 3.46 453,416.34 COFCO Meat (Suqian) Co., Ltd. 7,178,265.85 2.74 3,557,470.93 Yidu (Shenyang) Cold-chainLogistics Development Co.,
6,463,166.00 2.46 608,297.57 Ltd.
Total 64,927,391.71 24.76 5,424,451.00 2 Other accounts receivable
(1) Classified by account nature
31-12-2015
Items Balance Provision for doubtful debt
Book value
Amount Proportion(%) Amount Proportion(%)
Major single amount and bad debt
provision provided individually
Bad debt provided on group basis 45,196,469.56 100 1,504,857.11 3.33 43,691,612.45 Minor single amount but bad debt
provision provided individually
Total 45,196,469.56 100 1,504,857.11 3.33 43,691,612.45Continued：
31-12-2014
Items Balance Provision for doubtful debt
Book value
Amount Proportion(%) Amount Proportion(%)
Major single amount and bad debt
provision provided individually
Bad debt provided on group basis 23,056,627.39 100 1,790,721.85 7.77 21,265,905.54 Minor single amount but bad debt
provision provided individually
Total 23,056,627.39 100 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
31-12-2015
Account ages
Amount Provision for bad debts Proportion rates(%)
Within 1year 35,185,120.47 72,797.27 5
1 to 2 years 8,817,850.99 881,785.10 10
2 to 3 years 659,047.48 197,714.24 30
3 to 4 years 250,000.00 125,000.00 50
4 to 5 years 284,450.62 227,560.50 80
Total 45,196,469.56 1,504,857.11
(2) Provision for bad debts accrued, regain or switch back in the period
Dalian Refrigeration Company Limited
Notes to the Financial Statements of year 2015
In the current period, RMB-274,276.24 were accrued provision for bad debts, and no amount was switched back or regained.
(3)The write-off of other accounts receivable during the reporting period
Items Written off amount
2 clients 11,588.50
(4) The nature of other accounts receivable
Items 31-12-2015 31-12-2014
Guarantee deposits 11,391,139.57 20,951,410.09 Petty cash 76,154.99 97,241.00 To or fro accounts 33,729,175.00
Prepayments over settlement periods 2,007,976.30 Total 45,196,469.56 23,056,627.39 (5) Top 5 on amount of other accounts receivable
Ending balance Proportion
Companies Nature Amount Ages of provision for(%)
bad debts Wuhan New World
Less than 1
Refrigeration Industrial Co., To or fro accounts 33,729,175.00 74.63
year
Ltd.
Dalian Tianbao Green Foods Performance
8,000,000.00 1 to-2 years 17.70 800,000.00 Co., Ltd. bonds
Less than 1
Dalian Jinzhou District Building year，1-2
Guarantee
Energy Save Administration 1,852,574.57 years,2-3 4.10 315,242.86 deposits
Office years，4-5
years
Dalian Construction Project
Wage depodits of
Labour Insurance Expenses 500,000.00 2 to 3 years 1.11 150,000.00 migrant workers
Administration Center
Dalian Detai Ganghua Gas Guarantee
400,000.00 1 to 2 years 0.89 40,000.00 Co., Ltd. deposits
Total 44,481,749.57 98.43 1,305,242.86 (6) The reason of the ending balance of other accounts receivable increased105.45% compared with the beginning balance was amount due from Wuhan New World Refrigeration Industrial Co., Ltd. increased.
3 Long-term equity investments
31-12-2015 31-12-2014
Nature
Provision for Provision for
Book balance Book value Book balance Book value impairment impairment
Subsidiaries 246,597,906.16 246,597,906.16 107,629,071.42 107,629,071.42 Jointventures&
1,214,360,893.12 1,214,360,893.12 1,039,229,738.85 1,039,229,738.85 affiliated companies
Total 1,460,958,799.28 1,460,958,799.28 1,146,858,810.27 1,146,858,810.27
Dalian Refrigeration Company Limited
Notes to the Financial Statements of year 2015
(1) Subsidiaries
Provision for Increased during Decreased during Provision for Names Initial cost Beginning balance Ending balance impairment of the current year current year
current period impairment Dalian Bingshan Group Engineering Co., Ltd. 22,749,675.77(cid:10) 20,036,841.62 2,712,834.15 22,749,675.77
Dalian Bingshan Group Sales Co., Ltd. 12,936,700.00(cid:10) 12,936,700.00 12,936,700.00
9,249,900.00 21,751,244.60
Dalian Bingshan Metal Processing Co., Ltd. 21,751,244.60(cid:10) 12,501,344.60
Dalian Bingshan Air-conditioning Equipment Co., Ltd. 36,506,570.00 36,506,570.00 36,506,570.00
Dalian Bingshan Guardian Automation Co., Ltd. 1,522,117.80 1,522,117.80 1,522,117.80
Dalian Bingshan Ryosetsu Quick Freezing Equipment Co., Ltd. 5,745,097.40 5,745,097.40 5,745,097.40
Wuhan New World Refrigeration Industrial Co., Ltd. 66,694,510.81 84,674,910.81
84,674,910.81(cid:10) 17,980,400.00
Wuhan New World Refrigeration Air Conditioner Engineering
400,000.00 400,000.00 400,000.00
Co., Ltd.
Bingshan Technical Service（Dalian） Co.,Ltd.
12,024,000.00(cid:10) 12,024,000.00 12,024,000.00
Dalian Sanyo High-Efficient Refrigeration System Co., Ltd.
48,287,589.78(cid:10) 48,287,589.78 48,287,589.78
Total 246,597,906.16 107,629,071.42 138,968,834.74 246,597,906.16
(2) Jointventures& associated companies
Increase/Decreas
Provision
Gains and Provision Adjustment Cash bonus or for
Names Beginning balance losses Changes Ending balance for of other profits impairment
Increased Decreased recognized of other Others impairment comprehensi announced to of the
under the equity equity
ve income issue current
method
period
1. Joint ventures
Dalian Bingshan–P&A
Recreation Development
3,553,919.97 -716,822.16
2,837,097.81 Engineering Co., Ltd.
Dalian Refrigeration Company Limited
Notes to the Financial Statements of year 2015
Increase/Decreas
Provision
Gains and Provision Adjustment Cash bonus or for
Names Beginning balance losses Changes Ending balance for of other profits impairment
Increased Decreased recognized of other Others impairment comprehensi announced to of the
under the equity equity
ve income issue current
method
period
2,837,097.81 Subtotal 3,553,919.97 -716,822.16
2. Associated companies
Dalian Bingshan International
13,716,985.57 1,974,116.05 15,691,101.62 Trade Co. , Ltd.
Panasonic Refrigeration
155,826,086.27 8,600,021.37 5,200,000.00 159,226,107.64 (Dalian) Co., Ltd.
Dalian Honjo Chemical Co., Ltd. 9,403,913.18 528,860.67 1,203,061.37 8,729,712.48 Panasonic Cold-chain (Dalian)
215,573,606.48 8,145,919.40 8,000,000.00 215,719,525.88 Co., Ltd.
Keinin-Grand Ocean Thermal
42,333,942.39 15,873,092.90 9,600,000.00 48,607,035.29 Technology (Dalian) Co., Ltd.
Panasonic Compressor (Dalian)
432,515,006.40 59,377,362.52 34,000,000.00 457,892,368.92 Co., Ltd.
Dalian Sanyo Meica
23,233,848.71 -1,275,779.47 21,958,069.24 Electronics Co., Ltd.
MHI Bingshan Refrigeration
29,294,087.63 -7,017,754.79 22,276,332.84 (Dalian) Co.,Ltd.
Beijing Huashang Bingshan
Refrigeration and
1,425,989.62 1,754,200.00 -1,243,542.64 1,936,646.98 Air-conditioning Machinery Co.,
Ltd.
Dalian Fuji Bingshan Vending
89,896,843.61 28,686,407.19 5,314,796.52 113,268,454.28 Machine Co., Ltd.
Daliian Sanyo High-Efficient
22,455,509.02 26,993,388.94 -1,161,308.18 -48,287,589.78
Refrigeration System Co., Ltd.
Changzhou Jingxue Freezing 130,000,000.00 11,722,024.61 141,722,024.61
Dalian Refrigeration Company Limited
Notes to the Financial Statements of year 2015
Increase/Decreas
Provision
Gains and Provision Adjustment Cash bonus or for
Names Beginning balance losses Changes Ending balance for of other profits impairment
Increased Decreased recognized of other Others impairment comprehensi announced to of the
under the equity equity
ve income issue current
method
period
Equipment Co., Ltd.
Beijing Huashang Bingshan
Serial Refrigeration Equipment 2,450,000.00 2,044,158.79 2,256.74 4,496,415.53 Co., Ltd.
Subtotal 1,035,675,818.88 161,197,588.94 126,253,578.42 2,256.74 63,317,857.89 -48,287,589.78 1,211,523,795.31 Total 1,039,229,738.85 161,197,588.94 125,536,756.26 2,256.74 63,317,857.89 -48,287,589.78 1,214,360,893.12
Dalian Refrigeration Company Limited
Notes to the Financial Statements of year 2015
4 Total operating income and operating cost
2015 2014
Items
Income Cost Income Cost
Key business 529,921,896.78 439,578,679.65 815,254,802.52 637,291,434.88 Other business 11,553,354.87 7,030,947.50 16,432,936.80 18,219,326.55 Total 541,475,251.65 446,609,627.15 831,687,739.32 655,510,761.43 5 Gain/ (loss) from investments
Items 2015 2014
Gain arising from dividends of subsidiaries 3,915,784.39 4,135,112.47 Long-term equity investment income accounted for by using the equity method 125,536,756.26 101,428,429.25 Gain on selling equity of associate company 1,980,516.41 Gain from holding of financial assets available for sale 3,319,889.50 1,754,944.75 Gain from disposal financial assets available for sale 36,617.40 Total 132,772,430.15 109,335,620.28 XV. Other supplementary Information
1 Non-recurring profits and losses
Non-recurring gains and losses items Amount Notes 1. Gain/loss from disposal of non-current assets -61,718.74
2.Tax return or exemption exceeding authority or without formal authorization
499,945.82
documents
3.Governmental subsidy written into current gains and losses 1,906,070.56
4. Interest from non-financial enterprises written into current gains and losses
5.Gains/Losses on debt restructuring -586,377.00
6.Reversal of provision for impairment of long-term assets
7.Gain/loss from change of fair value of transactional asset and liabilities, and
investment gains from disposal of transactional financial assets and liabilities and
sellable financial assets, other than valid period value instruments related to the
Company’s common businesses.
8.Other net income and expense from non-operation 2,896,432.61
Total 4,654,353.25
Less：Affected amount of income tax from non-recurring gains and losses 671,259.97
Net amount of non-recurring gains and losses 3,983,093.28
Included: Attributable to minorityshareholders’ equity 158,595.14
Dalian Refrigeration Company Limited
Notes to the Financial Statements of year 2015
Non-recurring gains and losses items Amount Notes Attributable to the owners of parent company 3,824,498.14
2 Earnings per share
The weighted EPS
Items
averageROE(%) Basic EPS Diluted EPS
Net profit attributable to theCompany’s ordinary
6.38 0.36 0.36
shareholders
Net profit attributable to theCompany’s ordinary
6.19 0.35 0.35
shareholders after deducting non-recurring gains and losses
3 The differences between domestic and international accounting standards
There was no significant differences between domestic and international accounting standards among the
Company’s financial statements of the current period.
Dalian Refrigeration Company Limited 29th March, 2016