BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTD.
CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2024
(NOT AUDITED)
| BALANCE SHEET | ||||
| Prepared by Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd. June 30, 2024 Unit: RMB Yuan | ||||
| Items | ||||
| 30-June-2024 | 1-Jan-2024 | |||
| Consolidation | Parent Company | Consolidation | Parent Company | |
Current assets:
| Current assets: |
Monetary funds
| Monetary funds | 779,683,254.82 | 66,606,428.27 | 951,039,570.11 | 177,430,880.63 |
| Financial assets which are measured by fair value and which changes are recorded in current profit and loss |
Derivative financial assets
| Derivative financial assets |
Transaction financial assets
| Transaction financial assets | ||||
| Notes receivable | 252,970,529.69 | 39,845,134.12 | 353,428,922.42 | 64,984,113.98 |
Accounts receivable
| Accounts receivable | 1,822,615,451.67 | 643,587,099.41 | 1,576,433,924.16 | 612,933,182.91 |
| Receivables financing | 233,756,806.93 | 8,195,563.11 | 303,585,218.53 | 13,562,917.97 |
Accounts paid in advance
| Accounts paid in advance | 138,528,922.61 | 59,064,338.78 | 153,388,660.48 | 62,988,427.81 |
Other receivables
| Other receivables | 48,582,815.99 | 37,547,310.48 | 41,396,223.27 | 138,883,665.74 |
| Interest receivables |
Dividend receivable
| Dividend receivable | 3,856,753.95 | 9,919,648.18 | 14,495.00 | 110,000,000.00 |
| Inventories | 1,444,472,018.25 | 342,546,991.86 | 1,638,139,479.14 | 394,763,078.40 |
Contract assets
| Contract assets | 234,649,990.35 | 112,017,902.53 | 237,076,878.71 | 106,401,142.42 |
Assets held for sale
| Assets held for sale | ||||
| Non-current asset due within one year |
Other current assets
| Other current assets | 18,375,813.80 | 4,219,681.80 | 26,074,342.33 | 3,046,484.01 |
| Total current assets | 4,973,635,604.11 | 1,313,630,450.36 | 5,280,563,219.15 | 1,574,993,893.87 |
Non-current assets:
| Non-current assets: |
Finance asset held available for sales
| Finance asset held available for sales | ||||
| Held-to-maturity investment |
Long-term account receivable
| Long-term account receivable | ||||
| Long-term equity investment | 534,636,892.01 | 2,959,504,194.27 | 521,274,947.50 | 2,930,381,144.87 |
Other Non-current financial assets
| Other Non-current financial assets | 149,514,460.99 | 148,199,318.49 | 164,024,771.63 | 162,709,629.13 |
Investment property
| Investment property | 120,704,807.72 | 85,819,185.00 | 123,589,681.50 | 86,587,170.43 |
| Fixed assets | 1,253,644,762.42 | 607,126,963.25 | 1,291,851,402.46 | 632,491,373.17 |
Construction in progress
| Construction in progress | 95,741,358.83 | 43,838,871.81 | 114,801,351.21 | 42,867,809.00 |
| Right of use assets | 25,726,346.96 | 12,704,287.08 | 30,548,057.08 | 13,360,039.29 |
Engineering material
| Engineering material |
Disposal of fixed asset
| Disposal of fixed asset | ||||
| Productive biological asset |
Oil and gas asset
| Oil and gas asset | ||||
| Intangible assets | 204,523,392.65 | 66,464,362.37 | 210,554,161.22 | 68,437,853.58 |
Expense on Research and Development
| Expense on Research and Development |
Goodwill
| Goodwill | 286,402,171.93 | 286,402,171.93 | ||
| Long-term expenses to be apportioned | 6,669,816.32 | 3,874,703.37 | 5,346,321.60 | 4,434,379.95 |
Deferred income tax asset
| Deferred income tax asset | 117,187,047.63 | 28,797,141.79 | 113,648,859.53 | 27,809,290.39 |
| Other non-current asset | 20,243,349.44 | 20,243,349.44 |
| Total non-current asset | 2,814,994,406.90 | 3,956,329,027.43 | 2,882,285,075.10 | 3,969,078,689.81 |
Total assets
| Total assets | 7,788,630,011.01 | 5,269,959,477.79 | 8,162,848,294.25 | 5,544,072,583.68 |
Current liabilities:
| Current liabilities: | ||||
| Short-term loans | 288,761,386.17 | 239,000,000.00 | 262,287,784.38 | 219,000,000.00 |
| Financial liabilities which are measured by fair value and which changes are recorded in current profit and loss |
Derivative financial liabilities
| Derivative financial liabilities | ||||
| Transaction financial liabilities |
Notes payable
| Notes payable | 473,387,058.60 | 108,188,273.53 | 670,720,999.48 | 172,920,936.32 |
Accounts payable
| Accounts payable | 1,713,399,811.85 | 401,732,354.17 | 1,655,835,363.01 | 418,383,161.14 |
| Accounts received in advance |
Contract liabilities
| Contract liabilities | 659,709,451.48 | 67,521,215.43 | 787,685,294.53 | 108,021,877.17 |
| Wage payable | 77,299,270.67 | 96,755.62 | 149,497,113.46 | 12,109,637.82 |
Taxes payable
| Taxes payable | 24,473,962.16 | 2,862,935.83 | 22,216,492.26 | 3,523,630.66 |
Other accounts payable
| Other accounts payable | 273,853,346.24 | 169,072,808.41 | 278,804,152.17 | 174,010,076.60 |
| Interest payable |
Dividend payable
| Dividend payable | 28,169,531.21 | 25,829,531.21 | 533,156.00 | 533,156.00 |
| Liabilities held for sale |
Non-current liabilities due within one year
| Non-current liabilities due within one year | 167,387,808.69 | 150,823,737.30 | 150,645,347.64 | 134,539,973.21 |
Other current liabilities
| Other current liabilities | 178,406,947.50 | 27,727,729.65 | 203,315,864.43 | 69,349,185.65 |
| Total current liabilities | 3,856,679,043.36 | 1,167,025,809.94 | 4,181,008,411.36 | 1,311,858,478.57 |
Non-current liabilities:
| Non-current liabilities: | ||||
| Long-term loans | 595,200,000.00 | 595,200,000.00 | 679,700,000.00 | 679,700,000.00 |
Bonds payable
| Bonds payable |
Preferred stock
| Preferred stock | ||||
| Perpetual bond |
Lease liability
| Lease liability | 21,771,928.91 | 10,207,189.04 | 24,134,986.97 | 10,878,947.77 |
| Long-term account payable | 3,114,213.58 | 10,331,937.30 |
Long-term wage payable
| Long-term wage payable |
Special Payable
| Special Payable | ||||
| Anticipation liabilities | 5,260,925.79 | 4,544,802.88 |
Deferred income
| Deferred income | 95,585,957.96 | 59,253,457.96 | 98,274,267.80 | 61,369,767.80 |
Deferred income tax liabilities
| Deferred income tax liabilities | 54,586,516.13 | 20,538,090.09 | 60,811,462.07 | 22,714,636.67 |
| Other non-current liabilities |
Total non-current liabilities
| Total non-current liabilities | 775,519,542.37 | 685,198,737.09 | 877,797,457.02 | 774,663,352.24 |
| Total liabilities | 4,632,198,585.73 | 1,852,224,547.03 | 5,058,805,868.38 | 2,086,521,830.81 |
Shareholders’ equity
| Shareholders’ equity |
Share capital
| Share capital | 843,212,507.00 | 843,212,507.00 | 843,212,507.00 | 843,212,507.00 |
| Other equity instruments |
Preferred stock
| Preferred stock | ||||
| Perpetual bond |
Capital public reserve
| Capital public reserve | 717,097,098.38 | 755,146,592.54 | 717,097,098.38 | 755,146,592.54 |
Less: Treasury stock
| Less: Treasury stock |
| Other comprehensive income | 2,208,669.73 | 1,246,569.06 | 2,208,669.73 | 1,246,569.06 |
Special preparation
| Special preparation | 1,221,919.03 | 449,374.96 |
Surplus public reserve
| Surplus public reserve | 888,012,501.22 | 888,012,501.22 | 867,159,439.34 | 867,159,439.34 |
| Generic risk reserve |
Retained profit
| Retained profit | 649,767,029.17 | 930,116,760.94 | 617,386,488.34 | 990,785,644.93 |
| Total owner’s equity attributable to parent company | 3,101,519,724.53 | 3,047,513,577.75 |
Minority interests
| Minority interests | 54,911,700.75 | 56,528,848.12 |
Total owner’s equity
| Total owner’s equity | 3,156,431,425.28 | 3,417,734,930.76 | 3,104,042,425.87 | 3,457,550,752.87 |
| Total liabilities and shareholder’s equity | 7,788,630,011.01 | 5,269,959,477.79 | 8,162,848,294.25 | 5,544,072,583.68 |
Legal Representative: Ji Zhijian Chief Financial Official: Wang Jinxiu Person in Charge of Accounting Organization: Wu Bin
| INCOME STATEMENT | ||||
| Prepared by Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd. January-June, 2024 Unit: RMB Yuan | ||||
| Items | ||||
| January-June, 2024 | January-June, 2023 | |||
| Consolidation | Parent Company | Consolidation | Parent Company | |
I. Total sales
| I. Total sales | 2,463,277,349.70 | 404,710,898.61 | 2,327,536,713.05 | 561,507,191.57 |
II. Total operating cost
| II. Total operating cost | 2,397,140,315.69 | 404,710,898.61 | 2,244,978,370.92 | 561,507,191.57 |
| Including: Operating cost | 2,057,904,806.74 | 339,217,302.07 | 1,941,335,530.42 | 462,573,454.21 |
Taxes and associate charges
| Taxes and associate charges | 16,689,713.29 | 5,763,490.09 | 17,209,585.63 | 6,734,597.24 |
| Selling and distribution expenses | 110,159,991.36 | 19,927,691.26 | 98,211,645.02 | 24,951,968.65 |
Administrative expenses
| Administrative expenses | 121,498,382.07 | 34,913,506.10 | 103,515,309.49 | 31,968,790.92 |
R&D expenses
| R&D expenses | 78,544,862.47 | 15,423,258.65 | 68,628,817.97 | 15,845,215.75 |
| Financial expense | 12,342,559.76 | 13,823,860.36 | 16,077,482.38 | 14,942,066.91 |
Including: interest expense
| Including: interest expense | 17,709,510.30 | 13,883,042.92 | 19,165,466.43 | 14,246,006.33 |
| interest income | 5,243,901.48 | 548,479.34 | 5,451,984.39 | 735,367.41 |
Add: Other income
| Add: Other income | 17,755,779.69 | 1,535,146.86 | 1,814,789.04 | 100,000.00 |
Gain/(loss) from investment
| Gain/(loss) from investment | 22,493,222.27 | 27,406,700.78 | 6,848,068.69 | 29,661,828.13 |
| Including: income from investment on affiliated enterprise and jointly enterprise | 17,218,698.46 | 16,979,803.35 | 90,409.95 | -183,975.05 |
Gain/(loss) from change in fair value (loss as “-“)
| Gain/(loss) from change in fair value (loss as “-“) | -14,510,310.64 | -14,510,310.64 | 4,364,003.20 | 4,364,003.20 |
| Credit impairment loss (loss as “-“) | -16,406,220.89 | -5,253,420.94 | -19,302,777.86 | -5,984,187.92 |
Assets impairment loss (loss as “-“)
| Assets impairment loss (loss as “-“) | 4,917,988.18 | -1,332,255.11 | -4,905,134.78 | -1,472,892.79 |
Gain/(loss) from asset disposal (loss as “-“)
| Gain/(loss) from asset disposal (loss as “-“) | 10,550,303.70 | 2,703.81 | 51,209.01 | 0.00 |
| III. Operating profit | 90,937,796.32 | -16,509,645.16 | 71,428,499.43 | 31,159,848.51 |
Add: non-business income
| Add: non-business income | 5,475,673.43 | 4,624.78 | 4,268,645.77 | 9,639.35 |
| Less: non-business expense | 5,508,956.59 | 504,989.76 | 2,257,797.99 | 70,000.00 |
IV. Total profit
| IV. Total profit | 90,904,513.16 | -17,010,010.14 | 73,439,347.21 | 31,099,487.86 |
Less: Income tax
| Less: Income tax | 11,651,682.59 | -2,490,563.24 | 13,930,271.56 | 2,686,238.79 |
| V. Net profit | 79,252,830.57 | -14,519,446.90 | 59,509,075.65 | 28,413,249.07 |
(I) Net profit from continuous operation
| (I) Net profit from continuous operation | 79,252,830.57 | -14,519,446.90 | 59,509,075.65 | 28,413,249.07 |
(II)Net profit from discontinuing operation
| (II)Net profit from discontinuing operation | ||||
| Net profit attributable to parent company | 78,529,977.92 | -14,519,446.90 | 57,414,399.22 | 28,413,249.07 |
Minority shareholders’gains and losses
| Minority shareholders’ gains and losses | 722,852.65 | 2,094,676.43 | ||
| VI. After-tax net amount of other comprehensive incomes |
After-tax net amount of other comprehensive incomesattributable to owners of the Company
| After-tax net amount of other comprehensive incomes attributable to owners of the Company |
(I) Other comprehensive incomes that will not bereclassified into gains and losses
| (I) Other comprehensive incomes that will not be reclassified into gains and losses |
1. Changes in net liabilities or assets with a defined
benefit plan upon re-measurement
| 1. Changes in net liabilities or assets with a defined benefit plan upon re-measurement |
2. Enjoyable shares in other comprehensive incomes in
invests that cannot be reclassified into gains and lossesunder the equity method
| 2. Enjoyable shares in other comprehensive incomes in invests that cannot be reclassified into gains and losses under the equity method | ||||
| (II) Other comprehensive incomes that will be reclassified into gains and losses | ||||
| 1. Enjoyable shares in other comprehensive incomes in invests that will be reclassified into gains and losses under the equity method |
| 2. Gains and losses on fair value changes of available-for-sale financial assets | ||||
| 3. Gains and losses on reclassifying held-to-maturity investments into available-for-sale financial assets |
4. Effective hedging gains and losses on cash flows
| 4. Effective hedging gains and losses on cash flows | ||||
| 5. Foreign-currency financial statement translation difference |
、Others
| 6、Others |
……
| …… | ||||
| After-tax net amount of other comprehensive incomes attributable to minority shareholders |
VII Total comprehensive income
| VII Total comprehensive income | 79,252,830.57 | 59,509,075.65 | 28,413,249.07 |
Total comprehensive income attributable to parentcompany
| Total comprehensive income attributable to parent company | 78,529,977.92 | 57,414,399.22 | ||
| Total comprehensive income attributable to minority shareholders | 722,852.65 | 2,094,676.43 |
VIII. Earnings per share
| VIII. Earnings per share |
(I) basic earnings per share
| (I) basic earnings per share | 0.09 | 0.07 | ||
| (II) diluted earnings per share | 0.09 | 0.07 |
Legal Representative: Ji Zhijian Chief Financial Official: Wang Jinxiu Person in Charge of Accounting Organization: Wu Bin
| CASH FLOW STATEMENT |
| Prepared by Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd. January -June, 2024 Unit: RMB Yuan |
Items
| Items | January -June, 2024 | January -June, 2023 | ||
| Consolidation | Parent Company | Consolidation | Parent Company | |
| I. Cash flows arising from operating activities: | ||||
Cash received from selling commodities and providinglabor services
| Cash received from selling commodities and providing labor services | 1,907,077,005.37 | 356,957,447.68 | 1,897,060,493.23 | 416,876,256.09 |
Write-back of tax received
| Write-back of tax received | 18,755,550.59 | 9,988,890.50 | ||
| Other cash received concerning operating activities | 63,426,981.44 | 10,607,266.66 | 52,698,239.72 | 7,689,232.01 |
Subtotal of cash inflow arising from operating activities
| Subtotal of cash inflow arising from operating activities | 1,989,259,537.40 | 367,564,714.34 | 1,959,747,623.45 | 424,565,488.10 |
Cash paid for purchasing commodities and receivinglabor service
| Cash paid for purchasing commodities and receiving labor service | 1,393,125,399.43 | 407,046,581.00 | 1,457,105,820.91 | 474,452,446.24 |
| Cash paid to/for staff and workers | 407,925,055.02 | 61,958,999.87 | 369,826,569.78 | 62,530,285.96 |
Taxes paid
| Taxes paid | 96,739,099.30 | 15,612,910.27 | 107,685,392.77 | 28,543,318.27 |
| Other cash paid concerning operating activities | 124,055,968.40 | 24,913,279.32 | 151,924,036.97 | 26,003,055.24 |
Subtotal of cash outflow arising from operating activities
| Subtotal of cash outflow arising from operating activities | 2,021,845,522.15 | 509,531,770.46 | 2,086,541,820.43 | 591,529,105.71 |
Net cash flows arising from operating activities
| Net cash flows arising from operating activities | -32,585,984.75 | -141,967,056.12 | -126,794,196.98 | -166,963,617.61 |
| II. Cash flows arising from investing activities: |
Cash received from recovering investment
| Cash received from recovering investment | ||||
| Cash received from investment income | 4,378,498.20 | 114,364,003.20 | 5,796,799.24 | 24,022,304.24 |
Net cash received from disposal of fixed, intangible andother long-term assets
| Net cash received from disposal of fixed, intangible and other long-term assets | 31,636,572.34 | 434,242.64 | 30,000.00 |
Net cash received from disposal of subsidiaries and otherunits
| Net cash received from disposal of subsidiaries and other units | 0.00 | |||
| Other cash received concerning investing activities | 0.00 |
Subtotal of cash inflow from investing activities
| Subtotal of cash inflow from investing activities | 36,015,070.54 | 114,364,003.20 | 6,231,041.88 | 24,052,304.24 |
Cash paid for purchasing fixed, intangible and otherlong-term assets
| Cash paid for purchasing fixed, intangible and other long-term assets | 33,848,073.69 | 2,253,533.50 | 22,081,215.68 | 6,203,763.76 |
| Cash paid for investment | 16,000,000.00 | 145,285,500.00 |
Net cash paid for achievement of subsidiaries and otherbusiness units
| Net cash paid for achievement of subsidiaries and other business units | 12,056,951.02 |
Other cash paid concerning investing activities
| Other cash paid concerning investing activities | ||||
| Subtotal of cash outflow from investing activities | 33,848,073.69 | 18,253,533.50 | 34,138,166.70 | 151,489,263.76 |
Net cash flows arising from investing activities
| Net cash flows arising from investing activities | 2,166,996.85 | 96,110,469.70 | -27,907,124.82 | -127,436,959.52 |
| III. Cash flows arising from financing activities |
Cash received from absorbing investment
| Cash received from absorbing investment |
Including: Cash received from absorbing minorityshareholders' equity investment by subsidiaries
| Including: Cash received from absorbing minority shareholders' equity investment by subsidiaries | ||||
| Cash received from loans | 252,063,418.15 | 209,000,000.00 | 345,525,821.90 | 316,000,000.00 |
Cash received from issuing bonds
| Cash received from issuing bonds | ||||
| Other cash received concerning financing activities | 13,464,836.83 | 6,600,000.00 |
Subtotal of cash inflow from financing activities
| Subtotal of cash inflow from financing activities | 265,528,254.98 | 209,000,000.00 | 352,125,821.90 | 316,000,000.00 |
Cash paid for settling debts
| Cash paid for settling debts | 282,052,013.02 | 248,700,000.00 | 252,466,250.00 | 246,450,000.00 |
| Cash paid for dividend and profit distributing or interest paying | 14,844,254.68 | 13,433,120.25 | 15,175,950.51 | 13,745,417.12 |
Including: dividends or profit paid by subsidiaries tominority shareholders
| Including: dividends or profit paid by subsidiaries to minority shareholders |
Other cash paid concerning financing activities
| Other cash paid concerning financing activities | 60,640,595.58 | 9,783,735.91 | 22,250,574.21 | 1,267,500.00 |
| Subtotal of cash outflow from financing activities | 357,536,863.28 | 271,916,856.16 | 289,892,774.72 | 261,462,917.12 |
Net cash flows arising from financing activities
| Net cash flows arising from financing activities | -92,008,608.30 | -62,916,856.16 | 62,233,047.18 | 54,537,082.88 |
IV. Influence on cash due to fluctuation in exchange rate
| IV. Influence on cash due to fluctuation in exchange rate | 2,281,289.59 | 644.35 | -526,981.97 | |
| V. Net increase of cash and cash equivalents | -120,146,306.61 | -108,772,798.23 | -92,995,256.59 | -239,863,494.25 |
Add: Balance of cash and cash equivalents at the period -begin
| Add: Balance of cash and cash equivalents at the period -begin | 670,440,335.98 | 173,113,251.05 | 921,663,803.17 | 361,032,768.50 |
VI. Balance of cash and cash equivalents at the period–end
| VI. Balance of cash and cash equivalents at the period–end | 550,294,029.37 | 64,340,452.82 | 828,668,546.58 | 121,169,274.25 |
Legal Representative: Ji Zhijian Chief Financial Official: Wang Jinxiu Person in Charge of Accounting Organization: Wu Bin
CONSOLIDATED STATEMENT OF CHANGES IN OWNERS’ EQUITY
Prepared by Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd 2024.01-06 Unit: RMB Yuan
| Items | 2024.01-06 | ||||||||
| Owners’ equity attributable to parent company | |||||||||
| Minority equity | Total of owners’ equity | ||||||||
| share capital | Capital suplus | Lessen: treasury stock | Other comprehensive income | Special preparation | Surplus reserve | Retained profits | |||
| I. balance at the end of last year | 843,212,507.00 | 717,097,098.38 | 2,208,669.73 | 449,374.96 | 867,159,439.34 | 617,386,488.34 | 56,528,848.12 | 3,104,042,425.87 | |
| 1. Change of accounting policy | |||||||||
| 2. Correction of errors in previous period | |||||||||
| II. Balance at the beginning of this year | 843,212,507.00 | 717,097,098.38 | 2,208,669.73 | 449,374.96 | 867,159,439.34 | 617,386,488.34 | 56,528,848.12 | 3,104,042,425.87 | |
| III. Increase/ decrease of amount in this year (“-” means decrease) | 772,544.07 | 20,853,061.88 | 32,380,540.83 | -1,617,147.37 | 52,388,999.41 | ||||
| (I) Total comprehensive incomes | 78,529,977.92 | 722,852.65 | 79,252,830.57 | ||||||
| (II) Capital increased and reduced by owners | |||||||||
| 1. Common shares increased by shareholders | |||||||||
| 2. Capital increased by holders of other equity instruments | |||||||||
| 3. Amounts of share-based payments recognized in owners’ equity | |||||||||
| 4. Other | |||||||||
| (III) Profit distribution | 20,853,061.88 | -46,149,437.09 | -2,340,000.02 | -27,636,375.23 | |||||
| 1. Withdrawing surplus public reserve | 20,853,061.88 | -46,149,437.09 | -25,296,375.21 | ||||||
| 2. Distribution to all owners (shareholders) | -2,340,000.02 | -2,340,000.02 | |||||||
| 3. Others | |||||||||
| (IV) Internal carrying forward of owners’ equity | |||||||||
| 1. New increase of share capital from capital reserves | |||||||||
| 2. Convert surplus reserves to share capital | |||||||||
| 3. Surplus reserves make up losses | |||||||||
| 4. Others | |||||||||
| (V) Specific reserve | 772,544.07 | 772,544.07 | |||||||
| 1. Withdrawn for the period | 772,544.07 | 772,544.07 | |||||||
| 2. Used in the period | |||||||||
(VI) Other
| (VI) Other | |||||||||
| IV. Balance at the end of this period | 843,212,507.00 | 717,097,098.38 | 2,208,669.73 | 1,221,919.03 | 888,012,501.22 | 649,767,029.17 | 54,911,700.75 | 3,156,431,425.28 |
Legal Representative: Ji Zhijian Chief Financial Official: Wang Jinxiu Person in Charge of Accounting Organization: Wu Bin
| Items | 2023.01-06 | ||||||||
| Owners’ equity attributable to parent company | |||||||||
| Minority equity | Total of owners’ equity | ||||||||
| share capital | Capital suplus | Lessen: treasury stock | Other comprehensive income | Special preparation | Surplus reserve | Retained profits | |||
| I. balance at the end of last year | 843,212,507.00 | 717,097,098.38 | 2,208,669.73 | 825,226,634.15 | 618,445,922.58 | 54,077,970.99 | 3,060,268,802.83 | ||
| 1. Change of accounting policy | |||||||||
| 2. Correction of errors in previous period | |||||||||
| II. Balance at the beginning of this year | 843,212,507.00 | 717,097,098.38 | 2,208,669.73 | 825,226,634.15 | 618,445,922.58 | 54,077,970.99 | 3,060,268,802.83 | ||
| III. Increase/ decrease of amount in this year (“-” means decrease) | 57,414,399.22 | 2,094,676.42 | 59,509,075.64 | ||||||
| (I) Total comprehensive incomes | 57,414,399.22 | 2,094,676.42 | 59,509,075.64 | ||||||
| (II) Capital increased and reduced by owners | |||||||||
| 1. Common shares increased by shareholders | |||||||||
| 2. Capital increased by holders of other equity instruments | |||||||||
| 3. Amounts of share-based payments recognized in owners’ equity | |||||||||
| 4. Other | |||||||||
| (III) Profit distribution | |||||||||
| 1. Withdrawing surplus public reserve | |||||||||
| 2. Distribution to all owners (shareholders) | |||||||||
| 3. Others | |||||||||
| (IV) Internal carrying forward of owners’ equity | |||||||||
| 1. New increase of share capital from capital reserves | |||||||||
| 2. Convert surplus reserves to share capital | |||||||||
| 3. Surplus reserves make up losses | |||||||||
| 4. Others | |||||||||
| (V) Specific reserve | |||||||||
| 1. Withdrawn for the period | |||||||||
| 2. Used in the period | |||||||||
| (VI) Other | |||||||||
| IV. Balance at the end of this period | 843,212,507.00 | 717,097,098.38 | 2,208,669.73 | 825,226,634.15 | 675,860,321.80 | 56,172,647.41 | 3,119,777,878.47 | ||
Legal Representative: Ji Zhijian Chief Financial Official: Wang Jinxiu Person in Charge of Accounting Organization: Wu Bin
STATEMENT OF CHANGES IN OWNERS’ EQUITY
| Items | 2024.01-06 | ||||||||
| Owners’ equity attributable to parent company | Total of owners’ equity | ||||||||
| share capital | Other equity instrument | Capital suplus | Lessen: treasury stock | Other comprehensive income | Special preparation | Surplus reserve | Retained profits | ||
| I. balance at the end of last year | 843,212,507.00 | 755,146,592.54 | 1,246,569.06 | 867,159,439.34 | 990,785,644.93 | 3,457,550,752.87 | |||
| 1. Change of accounting policy | |||||||||
| 2. Correction of errors in previous period | |||||||||
| II. Balance at the beginning of this year | 843,212,507.00 | 755,146,592.54 | 1,246,569.06 | 867,159,439.34 | 990,785,644.93 | 3,457,550,752.87 | |||
| III. Increase/ decrease of amount in this year (“-” means decrease) | 20,853,061.88 | -60,668,883.99 | -39,815,822.11 | ||||||
| (I) Total comprehensive incomes | -14,519,446.90 | -14,519,446.90 | |||||||
| (II) Capital increased and reduced by owners | |||||||||
| 1. Common shares increased by shareholders | |||||||||
| 2. Capital increased by holders of other equity instruments | |||||||||
| 3. Amounts of share-based payments recognized in owners’ equity | |||||||||
| 4. Other | |||||||||
| (III) Profit distribution | 20,853,061.88 | -46,149,437.09 | -25,296,375.21 | ||||||
| 1. Withdrawing surplus public reserve | 20,853,061.88 | -20,853,061.88 | |||||||
| 2. Distribution to all owners (shareholders) | -25,296,375.21 | -25,296,375.21 | |||||||
| 3. Others | |||||||||
| (IV) Internal carrying forward of owners’ equity | |||||||||
| 1. New increase of share capital from capital reserves | |||||||||
| 2. Convert surplus reserves to share capital | |||||||||
| 3. Surplus reserves make up losses | |||||||||
| 4. Others | |||||||||
| (V) Specific reserve | |||||||||
| 1. Withdrawn for the period | 1,403,878.98 | 1,403,878.98 | |||||||
| 2. Used in the period | -1,403,878.98 | -1,403,878.98 | |||||||
| (VI) Other | |||||||||
| IV. Balance at the end of this period | 843,212,507.00 | 755,146,592.54 | 1,246,569.06 | 888,012,501.22 | 930,116,760.94 | 3,417,734,930.76 8 | |||
Legal Representative: Ji Zhijian Chief Financial Official: Wang Jinxiu Person in Charge of Accounting Organization: Wu Bin
Prepared by Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd 2023.01-06 Unit: RMBYuan
| Items | 2023.01-06 | ||||||||
| Owners’ equity attributable to parent company | Total of owners’ equity | ||||||||
| share capital | Other equity instrument | Capital suplus | Lessen: treasury stock | Other comprehensive income | Special preparation | Surplus reserve | Retained profits | ||
| I. balance at the end of last year | 843,212,507.00 | 755,146,592.54 | 1,246,569.06 | 825,226,634.15 | 936,931,213.43 | 3,361,763,516.18 | |||
| 1. Change of accounting policy | |||||||||
| 2. Correction of errors in previous period | |||||||||
| II. Balance at the beginning of this year | 843,212,507.00 | 755,146,592.54 | 1,246,569.06 | 825,226,634.15 | 936,931,213.43 | 3,361,763,516.18 | |||
| III. Increase/ decrease of amount in this year (“-” means decrease) | 19,981,124.00 | 19,981,124.00 | |||||||
| (I) Total comprehensive incomes | 28,413,249.07 | 28,413,249.07 | |||||||
| (II) Capital increased and reduced by owners | |||||||||
| 1. Common shares increased by shareholders | |||||||||
| 2. Capital increased by holders of other equity instruments | |||||||||
| 3. Amounts of share-based payments recognized in owners’ equity | |||||||||
| 4. Other | |||||||||
| (III) Profit distribution | -8,432,125.07 | -8,432,125.07 | |||||||
| 1. Withdrawing surplus public reserve | |||||||||
| 2. Distribution to all owners (shareholders) | -8,432,125.07 | -8,432,125.07 | |||||||
| 3. Others | |||||||||
| (IV) Internal carrying forward of owners’ equity | |||||||||
| 1. New increase of share capital from capital reserves | |||||||||
| 2. Convert surplus reserves to share capital | |||||||||
| 3. Surplus reserves make up losses | |||||||||
| 4. Others | |||||||||
| (V) Specific reserve | |||||||||
| 1. Withdrawn for the period | 1,403,878.98 | 1,403,878.98 | |||||||
| 2. Used in the period | -1,403,878.98 | -1,403,878.98 | |||||||
| (VI) Other | |||||||||
| IV. Balance at the end of this period | 843,212,507.00 | 755,146,592.54 | 1,246,569.06 | 825,226,634.15 | 956,912,337.43 | 3,381,744,640.18 | |||
Legal Representative: Ji Zhijian Chief Financial Official: Wang Jinxiu Person in Charge of Accounting Organization: Wu Bin
III. General InformationBingshan Refrigeration & Heat Transfer Technologies Co., Ltd (the “Company”) wasreorganized and reformed from main part of former Dalian Refrigeration Factory. OnDecember 8, 1993, the Company went to the public as a listed Company at Shenzhen StockExchange Market. On March 20, 1998, the company successfully went to the public at Bshare market and listed at Shenzhen Stock Exchange Market with total share capital ofRMB350,014,975Yuan.According to the 13
th meeting of the 6
thgeneration of board, extraordinary general meeting for2015 fiscal year and ' Restricted share incentive plan (draft)' , the Company planned tointroduce A ordinary shares to incentive objectives, which was 10,150,000 number of shareswould be granted to 41 share incentive objectives at granted price of RMB5.56Yuan per share.Up to March 12
th,2015, the Company received new added share capital ofRMB10,150,000Yuan and the share capital had been verified by DaHua Certified PublicAccountants, and had been issued the capital verification report Dahuayanzi [2015]000086 onMarch12
th, 2015.The general meeting for 2015 fiscal year held on 21st April 2016 approved the profitdistribution policy for the year of 2015, which agrees the profit distribution based on the total360,164,975 number of shares as share capital, paid share dividend of 5 common shares forevery 10 shares through capital reserve. The policy stated above was fully implemented on 5thMay 2016, and the registered capital was altered to 540,247,462.00Yuan.The 17
thmeeting of the 6
th generation of board was held on 4
th June 2015 and the 2
ndinterimshareholders’ meeting was held on 24th June 2015, meeting deliberated and passed the proposalof non-public offering of ‘A shares’. China’s Securities Regulatory Commission issued SFClicense [2015]3137 on 30
thDecember, 2015, approving that new non-public offering cannotexceeded 38,821,954 number of shares. The company implemented the post meetingprocedures for China’s Securities Regulatory Commission, which is regarding adjustment ofbottom price and the number of the shares issued after the implementation of profit distributionpolicy of 2015 in May, 2016, and accordingly revised the upper limit of non-public offering ofshare to58,645,096 number of new ‘A shares’. The company issued the non-public offering of58,645,096 number of ‘A shares’ to 7 investors, and as a result, the total number of shares ofthe company is changed to 598,892,558 shares, and the par value is 1yuan per share and thetotal share capital is 598,892,558.00Yuan. The share capital stated above has been verified byDaHua Certified Public Accountants, and has been issued the capital verification reportDahuayanzi [2016]000457 on 31st May 2016.According to the ‘Restricted Share Incentive Plan(draft) of Dalian Refrigeration CompanyLimited for the year of 2016’ and the ‘Proposal regarding the shareholders’ meeting authorized
the board of directors to implement the Restricted Share Incentive Plan’ approved on the
rd
provisional general meeting held on 13th September 2016, the 9
th meeting of the 7
th
generation of board deliberated and passed the ‘Proposal about granting the restricted shares toincentive targets’ on September 20
th, 2016 and set 20
thSeptember 2016 as share granted date,and granted 12,884,000 number of restricted shares to 188 incentive targets at granted price of
5.62Yuan per share. By 22
ndNovember, 2016, the company has actually received the newlysubscribed registered share capital of 12,884,000Yuan subscribed by incentive targets. Theshare capital stated above has been verified by DaHua Certified Public Accountants, and hasbeen issued the capital verification report Dahuayanzi [2016]001138 on 23
rdNovember, 2016.On May 20
th, 2017, the general meeting for 2016 fiscal year was held and profit appropriationscheme for 2016 FY was approved, which was every 10 shares will be increased by 4 sharesthrough capital reserve based on the total 611,776,558 number of shares. After the profitappropriation scheme, the registered capital was changed to RMB856,478,181.00Yuan.On December 18, 2017, the Company held the third extraordinary shareholders’ meeting of2017 which reviewed and approved the Proposal on Repurchasing and Cancelling PartRestricted Stocks of the 2016 Restricted Stock Incentive Plan”. On March 8, 2018, after thecompletion of repurchase and cancellation, the Company implemented the correspondingcapital reduction procedures according to law, and the registered capital of the Company waschanged from 856,487,181 Yuan to 855,908,981 Yuan.On May 4, 2018, the Company held the 21
stmeeting of the seventh board of directors whichreviewed and approved the Proposal on Repurchasing and Cancelling Party Restricted Stocksof the 2015 Restricted Stock Incentive Plan. On June 29, 2018, after the completion ofrepurchase and cancellation, the Company implemented the corresponding capital reductionprocedures according to law, and the registered capital of the Company was changed from855,908,981 Yuan to 855,434,087 Yuan.On January 17,2019, the Company held the first extraordinary shareholders’ meeting of 2019which reviewed and approved the Proposal on terminating the implementation of 2016Restricted Stock Incentive Plan of the Company and logouting the restricted stock. On March4,2019, the Company has completed the capital reduction process, and the registered capital ofthe Company was changed from 855,434,087 Yuan to 843,212,507 Yuan.On December 20
th
, 2019, the Company held the 7th meeting of the 8th Board of Directors andapproved to change the Company’s name from Dalian Refrigeration Company Limited toBingshan Refrigeration & Heat Transfer Technologies Co., Ltd.The Company is in industrial manufacturing sector, mainly engaged in industrial refrigeration,refrigerated and frozen food storage, and manufacture and installation of central air-conditioning and refrigeration equipment. The scope of business includes research and
development, design, manufacture, sale, lease, installation and repair of refrigeration and heatequipment, accessories, spare parts, and energy-saving and environmental protection products;Technical services, technical consultation, technical promotion; Design, construction,installation repair and maintenance of complete sets of refrigeration and air conditioningprojects, mechanical and electrical installation projects, steel structure projects, anti-corrosionand heat preservation works; Rental of premises; Transport of ordinary goods; Propertymanagement; Low temperature storage; Import and export of goods and technologies. (Withthe exception of projects subject to approval according to law, independently carry out businessactivities according to law with the business license).This financial report was approved and issued by the Board of Directors of the Company onAugust 14, 2024.IV. Financial Statements Preparation Basis
（1） Preparing basis
The group’s financial statements are prepared according to the actual occurred transactions andevents, and in accordance with ‘Accounting Standards for Business Enterprises’, its applicationguidelines, interpretations and other relevant provisions promulgated by the Ministry ofFinance (collectively referred to as "Accounting Standards for Business Enterprises") and " No.15 of Information Disclosure and Reporting Rules for Publicly Listed Companies - GeneralProvisions for Financial Reports" (revised in 2023) promulgated by the China SecuritiesRegulatory Commission (hereinafter referred to as the "CSRC").
（2） Going concern
The group has assessed the capacity to continually operate within 12 months since June 60,2024, and hasn’t found the major issues impacting on the sustainable operation ability. TheCompany’s financial statements are prepared on the basis of going concern assumption.V. Significant Accounting Policies and Accounting Estimates
1. Declaration for compliance with accounting standards for business enterprisesThe financial statements are prepared by the Group according to the requirements ofAccounting Standard for Business Enterprise, and reflect the relative information for thefinancial position, operating performance, cash flow of the Group truly and fully.
2. Accounting period
The group adopts the Gregorian calendar year as accounting period from Jan 1 to Dec 31.
3. Operating cycle
The group sets twelve months for one operating cycle.
4. Functional currency
The group adopts RMB as functional currency.
5. Materiality criteria set up method and basis
The financial statements preparation and disclosure are in line with materiality. For thosematters to be disclosed and need judgement for materiality, materiality criteria set up methodand basis are as follows:
| Disclosures involved by materiality judgement | In the notes to the financial statements | Materiality criteria set up method and basis |
| Significant receivables with individual provision for bad debts | Note VI.3 | Single provision is over 10 million Yuan and represents more than 10% of the total provision |
| Collection or reverse of significant receivables | Note VI.3 | Single provision is over 10 million Yuan and represents more than 10% of the total provision |
| Significant receivables written off | Note VI.3 | Single provision is over 10 million Yuan and represents more than 10% of the total provision |
| Significant construction in progress | Note XVI.16 | Single project budget over 30 million Yuan |
| Significant JV or associates | Note VIII.3 | The book value of long-term equity investment in a single investee accounts for more than 10% of the group's net assets and the amount is greater than 100 million Yuan, or the gain or loss on investment under the long-term equity investment equity method accounts for more than 10% of the group's consolidated net profit |
| Significant subsidiary | Subsidiary’s net assets are more than10% of the group asses and its net profit is more than 10% of consolidated profit |
6. Accounting for business combination under same control and not under same control
（1） Business combination under the same control
Business combination under the same control is the situation where entities participating themerger are controlled by the same party or controlled by parties under same ultimate controlbefore and after merger and the control is not temporary.
The group, as an acquirer, the assets and liabilities that the group obtained in a businesscombination under the same control should be measured on the basis of their carrying amountof the acqiree in the ultimate control party’s consolidated financial statements on the combiningdate. As for the balance between the carrying amount of the net assets obtained by thecombining party and the carrying amount of the consideration paid by it, the capital surplusshall be adjusted. If the capital surplus is not sufficient to be offset, the retained earnings shallbe adjusted.
（2） Business combination not under same control
Business combination not under the same control is the situation where entities participatingthe merger are not controlled by the same party or not controlled by parties under same ultimatecontrol before and after merger.When the group is an acquirer, for a business combination not under same control, the asset,liability and contingent liability obtained, shall be measured at the fair value on the acquisitiondate. The difference, when combination cost exceeds proportionate share of the fair value ofidentifiable net assets of acquire should be recognized as goodwill. If the combination cost isless than proportionate share of the fair value of identifiable net assets of acquiree, firstly, fairvalue of identifiable asset, liability or contingent liability shall be reviewed, and so the fairvalue of non-monetary assets or equity instruments issued in the combination consideration ,after review, still the combination cost is less than proportionate share of the fair value ofidentifiable net assets of acquire, the difference should be recognized as non-operating income.If a business consolidation not under common control is finally achieved in stages, whenpreparing the consolidated financial statements, the acquirer shall remeasure its previously heldequity interest in the acquiree at its fair value on acquisition date and recognize the gain or lossas investment income for the current period. Other comprehensive income, under equitymethod accounting rising from the interest held in acquiree in relation to the period before theacquisition, and changes in the value of its other equity other than net profit or loss, othercomprehensive income and profit appropriation shall be transferred to investment gain or lossfor the period in which the acquisition incurs, excluding the other comprehensive income fromthe movement on the remeasurement of ne asset or liability of defined benefit plan.
7. Criteria of control judgment and method of preparation of consolidated financialstatementsConsolidation scope is determined on the control basis including the Company and allsubsidiaries controlled by the Company. Control criteria is that the group has the power overthe investees, enjoy the variable return by involving the relative activities of the investees andalso has the impact on the return amount through the power over the investees.
If subsidiaries adopt different accounting policy or have different accounting period from theparent company, appropriated adjustments shall be made in accordance with the Companypolicy in preparation of the consolidated financial statements.All significant intergroup transactions, outstanding balances and unrealized profit shall beeliminated in full when preparing the consolidated financial statements. Portion of thesubsidiary’s equity not belonging to the parent, profit, loss for the current period, portion ofother comprehensive income and total comprehensive belonging to minority interest, shall bepresented separately in the consolidated financial statements under “minority interest of equity”,minority interest of profit and loss”, “other comprehensive income attributed to minorityinterest” and “total comprehensive income attributed to minority interest” title.If a subsidiary is acquired under common control, its operation results and cash flow shall beconsolidated since the beginning of the consolidation period. When preparing the comparativeconsolidated financial statements, adjustments shall be made to relevant items of comparativefigures as regarded that reporting entity established through consolidation has been alwaysexisting since the point when the ultimate controlling party starts to have the control.If a subsidiary is acquired not under common control, its operation results and cash flow shallbe consolidated since the beginning of the consolidation period. In preparation of theconsolidated financial statements, adjustments shall be made to subsidiary’s financialstatements based on the fair value of its all identifiable assets, liability or contingent liabilityon the acquisition date.When the group partially disposes of the long –term equity investment in subsidiary withoutlosing the control over it, in the consolidated financial statements, the difference, betweendisposals price and respective disposed value of share of net assets in the subsidiary since theacquisition date or combination date, shall be adjusted for capital surplus or share premium, noenough capital surplus, then adjusted for retained earnings.When the group partially disposes of the long –term equity investment in subsidiary and losethe control over it, in preparation of consolidated financial statements, remaining share ofinterest in the subsidiary shall be remeasured on the date of losing control. Sum of the sharedisposal consideration and fair value of remaining portion of shareholding minus the share ofthe net assets in the subsidiary held based on the previous shareholding percentage since theacquisition date or combination date, the balance of above is recognized as investment gain/lossfor the period and goodwill shall be written off accordingly. Other comprehensive incomerelevant to share investment in subsidiary shall be transferred to investment gain /loss for theperiod on the date of losing control.When the group partially disposes of the long –term equity investment in subsidiary and losethe control over it by stages, if all disposing transactions are bundled, each individual
transaction shall be seen as a transaction of disposal of a subsidiary by losing control. Thedifference between the disposal price and the share of the net assets in the subsidiary heldbefore the date of losing control, shall be recognize as other comprehensive income until thedate of losing control where it is transferred into investment gain/ loss for the current period. Ifthe equity investment in the subsidiary is disposed of by stages through multiple transactionsuntil the control is lost, and it is not a bundled transaction, each transaction shall be accountedfor separately according to whether the control is lost.
8. Cash and cash equivalent
The cash listed on the cash flow statements of the Company refers to cash on hand and bankdeposit. The cash equivalents refer to short-term (normally with original maturities of threemonths or less) and liquid investments which are readily convertible to known amounts of cashand subject to an insignificant risk of changes in value.
9. Translation of foreign currency
（1） Foreign currency transaction
Foreign currency transactions are translated at the spot exchange rate issued by People’s Bankof China (“PBOC”) on the 1
stday of the month when the transactions are accounted initially.At the balance sheet date, foreign currency monetary items should be converted into reportingcurrency at the balance sheet date’s spot exchange rate. Exchange differences should be takeninto the current profits and losses except special foreign currency borrowings for constructionand producing assets which are qualifying for assets capitalization, should be capitalized.Foreign currency non-monetary items, which are recorded in historical cost, should be stillrecorded at the spot exchange rate when the transaction occurred and no change on reportingcurrency amount. Foreign currency non-monetary items, which are measured at fair value,should be recorded in the spot exchange rate at the date measuring the fair value and thedifferences should be recognized as profit and loss from fair value changes and included in thecurrent profits and losses. Invested capital in foreign currency shall be converted into reportingcurrency at FX rate at when the investment is received, and no foreign exchange differencearises between capital received and monetary items.
10. Financial instruments
（1） Recognition and derecognition of financial instruments
The group shall recognize a financial asset or a financial liability when becoming party to thecontractual provisions of the instrument.An entity shall derecognize a financial asset(or a part of it or a group of similar financial asset)when, and only when: 1) the contractual rights to the cash flows from the financial asset expire,
or 2) the entity transfers contractual rights to receive the cash flows of a financial asset, orassumes a contractual obligation to pay those cash flows received to the 3
rd
party in full amountin time according to the ‘passing-through’ agreement and the entity substantially transfers allthe risks and rewards of ownership of the financial asset in nature, or the entity neither transfersnor retains substantially all the risks and rewards of ownership of the financial asset, but theentity has not retained control.Financial liabilities shall be derecognized if the obligation of the liability is fulfilled, cancelledor expired. An exchange between an existing borrower and lender of debt instruments withsubstantially different terms shall be accounted for as an extinguishment of the originalfinancial liability and the recognition of a new financial liability. Similarly, a substantialmodification of the terms an existing financial liability shall be accounted for as anextinguishment of the original financial liability and the recognition of a new financial liability.The difference between the carrying amount of a financial liability extinguished and theconsideration paid, including any non-cash assets transferred or liabilities assumed, shall berecognized in profit or loss.A regular way purchase or sale of financial assets shall be recognized and derecognized, asapplicable, using trade date accounting or settlement date accounting.
（2） Classification and measurement of financial assets
At initial recognition, the group shall classify financial assets as measured at amortized cost,fair value through other comprehensive income or fair value through profit or loss on the basisof both the group’s business model for managing the financial assets and the contractual cashflow characteristics of the financial asset. Only when the business model for managing thefinancial assets is changed, the affected financial assets shall be reclassified.In determining the business model, the group considers, among others, the way in which thecompany evaluates and reports the performance of financial assets to key managementpersonnel, the risks affecting the performance of financial assets and the way in which they aremanaged, and the way in which the relevant business managers are remunerated. In assessingwhether the objective is to collect contract cash flows, the group needs to make an analyticaljudgment on the reasons, timing, frequency and value of the sale of the financial assets beforethe maturity date.In determining the contract cash flow characteristics, the group is required to determine whetherthe contract cash flow is only the payment of principal and interest based on the outstandingprincipal, (including the assessment of the time value of money correction, judging anysignificant difference between it and the baseline cash flow/ for financial assets containing earlyrepayment characteristics, is required to determine whether the fair value of early repaymentfeatures is very small).
Financial assets are measured at fair value at the initial recognition, but accounts receivable ornotes receivable arising from the sale of goods or provision of services, etc., do not contain asignificant financing component or do not consider the financing component of less than oneyear, the initial measurement is based on the transaction price.For financial assets that are measured at fair value, the related transaction costs are directlyincluded in current profit or loss, and those costs of other categories of financial assets areincluded in their initial recognized amounts.Financial assets subsequent measurement based on the classification
1) A financial asset measured at amortized cost
A financial asset shall be measured at amortized cost if both of the following conditions aremet: ①the financial asset is held within a business model whose objective is to hold financialassets in order to collect contractual cash flows;②the contractual terms of the financial assetgive rise on specified dates to cash flows that are solely payments of principal and interest onthe principal amount outstanding. The financial assets of this category include: monetary fund,receivable, notes receivable and other receivables.
2) Debt instruments measured at fair value through other comprehensive incomeA financial asset shall be measured at fair value through other comprehensive income if bothof the following conditions are met: ①the financial asset is held within a business modelwhose objective is achieved by both collecting contractual cash flows and selling financialassets and ②the contractual terms of the financial asset give rise on specified dates to cashflows that are solely payments of principal and interest on the principal amount outstanding.The effective interest rate is applied to interest income. A gain or loss arising from a financialasset measured at fair value through other comprehensive income, which is not part of hedgingrelationship shall be recognized in other comprehensive income apart from interest income,impairment loss and foreign exchange difference. When this type of financial assets isderecognized, accumulated gain or loss previously in the other comprehensive income shall beout of it and accounted into retained earnings when the financial asset is derecognized. Thefinancial assets of this category include: receivable financing.
3) Equity instruments measured at fair value through other comprehensive incomeThe group may make an irrevocable election for particular investments in equity instrumentsthat it would be measured at fair value through other comprehensive income, but once theelection is made, it is irrevocable. The group only recognizes the dividend (apart from thedividend as investment cost pay back) into profit and loss and fair value movementsubsequently will be recognized into comprehensive income and no need for impairmentprovision. When this type of financial assets is derecognized, accumulated gain or loss
previously in the other comprehensive income shall be out of it and accounted into retainedearnings when the financial asset is derecognized. The financial asset of this category is equityinstruments.
4) A financial asset measured as fair value through profit or loss
Apart from classified as the amortized cost financial assets and as fair value through othercomprehensive income financial assets, a financial asset is classified as fair value through profitor loss. The group shall subsequently measure this financial asset at its fair value, except forhedging accounting, any gain or loss on FVTPL shall be accounted into profit and loss. Thefinancial assets of this category include: tradable financial asset other non-current financialasset.A financial asset shall be classified as fair value through profit or loss if it is recognizedcontingent consideration through business combination, which is not under same controlsituation.
（3） Classification, basis for recognition and measurement of financial liabilityExcept for the financial guarantee contract, commitments to provide a loan at a below?marketinterest rate and financial liabilities that arise when a transfer of a financial asset does notqualify for derecognition or when the continuing involvement approach applies, the group shallinitially classify all financial liabilities as it measured at amortized cost or financial liabilitiesat fair value through profit or loss. For financial liabilities that are measured at fair value, therelated transaction costs are directly included in current profit or loss, and those costs of othercategories of financial assets are included in their initial recognized amounts.Financial liabilities subsequent measurement based on the classification
1) Financial liabilities as it subsequently measured at amortized costEffective interest method is applied to financial liabilities as subsequently measured atamortized cost
2) Financial liability as it measured at fair value through profit or lossFinancial liability measured at fair value through profit or loss including tradable financialliability (derivative instrument of financial liability included) and designated as financialliability measured at fair value through profit or loss. Tradeable financial liability (includingderivate instrument of financial liability) are subsequently measured at fair value. The net gainor loss arising from changes in fair value are recorded in profit or loss for the period in whichthey are incurred. Financial liability designated as it measured at fair value through profit orloss shall be subsequently measured at fair value, except for changes in fair value caused bychanges in the group's own credit risk, which are recognized in other comprehensive income,
other changes in fair value are recognized in profit or loss for the current period; The grouprecognizes all fair value changes (including the amount affected by changes in its own creditrisk) in profit or loss if the inclusion of changes in fair value caused by changes in its owncredit risk in other comprehensive income would cause or widen the accounting mismatch inprofit or loss for the current period.
（4） Financial instrument impairment
Based on expected credit loss, the group shall apply the impairment requirements for thefollowings: ① a financial asset measured at amortized cost; ② debt investment measured atfair value and changes in fair value is through other comprehensive income; ③ leasereceivable; ④ a contractual asset and financial guarantee contract.Expected credit loss is the weighted average of credit losses with the respective risks of a defaultoccurring as the weights. A credit loss herein is referred to as the present value, at originaleffective rate, of the difference between the contractual cash flows that are due to the groupunder the contract; and the cash flows that the Company expects to receive, that's the presentvalue of the total cash shortage. The group shall measure expected credit losses of a financialinstrument in a way that reflects: ①an unbiased and probability?weighted amount that isdetermined by evaluating a range of possible outcomes; ② the time value of money; and ③reasonable and supportable information that is available without undue cost or effort at thereporting date about past events, current conditions and forecasts of future economic conditions.Expected credit loss of financial instrument is assessed individually and portfolio. The groupassesses the expected credit loss based on the portfolio in accordance with the commoncharacteristics of credit risk which involves type of financial instrument, credit risk grade, andage of trade receivables.When assessing expected credit losses, the group considers all reasonable and supportableinformation, including that which is forward-looking. In making these judgments and estimates,the group extrapolates the expected changes in the debtor's credit risk based on historicalrepayment data combined with factors such as economic policies, macroeconomic indicatorsand industry risks. Different estimates may affect the provision for impairment, and theprovision already made may not equal the actual amount of impairment losses in the future.
1) Impairment testing method of receivable and contract asset
For receivable, notes receivable and contract asset etc., which don’t contain significantfinancing component and arise from sales of products and service provision, the group adoptssimplified method to account expected credit loss provision at an amount equal to the wholelifetime expected credit losses.For lease premium receivable, trade receivable containing significant financing component, and
contract asset, the group adopts simplified method to account expected credit loss provision atan amount equal to the whole lifetime expected credit losses.The group determines the expected credit loss of trade receivable on the basis of portfolios withcommon characteristics of credit risk, which are considered by expected credit lossmeasurement reflection, by reference to historical experience of credit loss and by comparisonof receivable past due days/ receivable age with default risk rate, unless the single credit loss isseparately recognized for contractual payments that is significant in amount and credit impaired.If certain client is significant different from others in terms of credit risk characteristics, or theclient’s credit risk has significantly increased, such as experiencing severe finance difficulty,its expected credit loss is obviously higher than it to be at accounting age, the group will makeseparate credit loss provision for this client’s receivable.
① Portfolio category and recognition basis of receivable ( contract asset)
The group classifies accounts receivable (and contract assets) according to the similarity andrelevance of credit risk characteristics based on information such as age, nature of payments,credit risk exposure, historical debt collection, etc. For accounts receivable (and contract assets),the group determines that aging is the primary factor affecting its credit risk and therefore, thegroup assesses its expected credit losses on the basis of aging portfolios. The group calculatesthe overdue age based on the payment date agreed in the contract.No expected credit loss is recognized for receivables from related party within consolidatedscope as the group assesses its credit risk is relatively low.
② Portfolio category and recognition basis of notes receivable
| Portfolio category | Expected credit loss accounting estimate policy |
| Bank acceptance note portfolio | Lower credit risk assessed by the management, no expected credit loss recognition |
| Commercial acceptance note portfolio | Same as receivables portfolio and provided for excepted credit loss allowance based on expected credit loss rate |
2) Impairment testing method of debt investment, other debt investment, loan commitments and
financial guarantee contractsWith the exception of financial assets (such as debt investments, other debt investments), loancommitments and financial guarantee contracts for which the simplified measurement methodis adopted above, the group adopts the general method (three-stage method) for the provisionof expected credit losses. At each balance sheet date, the group assesses whether its credit riskhas increased significantly since the initial recognition, and if the credit risk has not increasedsignificantly since the initial recognition, in the first stage, the group measures the lossprovision at an amount equivalent to the expected credit loss over the next 12 months and
calculates interest income based on the carrying balance and effective interest rate; If the creditrisk has increased significantly since the initial recognition but no credit impairment hasoccurred, in the second stage, the group measures the loss provision at an amount equivalent tothe expected credit loss over the entire duration and calculates interest income based on thecarrying balance and effective interest rate; If credit impairment occurs after initial recognition,in the third stage, the group measures the loss provision at an amount equivalent to the expectedcredit loss over the entire duration and calculates interest income at amortized costs andeffective interest rates. For financial instruments with only low credit risk at the balance sheetdate, the group assumes that their credit risk has not increased significantly since initialrecognitionThe whole life expected credit loss refers to the expected credit loss caused by all possibledefault events during the whole expected life of the financial instrument. Expected credit lossesover the next 12 months are expected credit losses resulting from defaults on financialinstruments that may occur within 12 months after the balance sheet date (or if the expectedduration of the financial instrument is less than 12 months) and are part of the overall expectedcredit losses over the life of the financial instrument.Criteria of significant increase in credit risk and definition of credit impaired assets aredisclosed on Note X.1
（5） Recognition and measurement of transfer of financial assets
A financial asset is derecognized when the financial asset has been transferred together withsubstantial all risks and rewards to the transferee. A financial asset can not be derecognizedwhen the substantial all risks and rewards to the financial asset has been retained. When the allrisks and rewards of the financial asset are neither transferred nor retained, but the group hasgiven up its control of the financial asset, the financial asset shall be derecognized andrecognize the asset and liability originated. Where control of the financial asset is notrelinquished, the relevant financial asset shall be recognized according to the extent to which itcontinues to be involved in the transferred financial asset, and the relevant liability shall berecognized accordingly.In the case where the financial asset as a whole qualifies for the derecognition conditions, thedifference between the carrying value of transferred financial asset at the derecognition dateand the sum of the consideration received for transfer and the accumulated amount of changesin fair value in respect of the amount of partial derecognition ( financial assets involved intransfer must qualify the following conditions: ① the financial asset is held within a businessmodel whose objective is not only for collecting contractual cash flows but also for sale; ②thecontractual terms of the financial asset give rise on specified dates to cash flows that are solelypayments of principal and interest based on the principal amount outstanding) , that was
previously recorded under other comprehensive income is transferred into profit or loss for theperiod.In the case where only part of the financial asset qualifies for derecognition, the carryingamount of financial asset being transferred is allocated between the portions that to bederecognized and the portion that continued to be recognized according to their relative fairvalue. The difference between the amount of consideration received for the transfer and theaccumulated amount of changes in fair value that was previously recorded in othercomprehensive income for the asset partially qualified for derecognition (financial assetsinvolved in transfer must qualify the following conditions:① the financial asset is held withina business model whose objective is not only for collecting contractual cash flows but also forsale; ; ②the contractual terms of the financial asset give rise on specified dates to cash flowsthat are solely payments of principal and interest based on the principal amount outstanding )and the above-mentioned allocated carrying amount is charged to profit or loss for the period.Where the assets continue to be involved by providing financial guarantees for the transferredfinancial assets, the assets that continue to be involved in the same form are recognized at thelower of the carrying value of the financial assets and the amount of the financial guarantees.Financial guarantee amount means the maximum amount of consideration received that will berequired to be repaid.
（6） Distinguish between financial liability and equity instrument and accountingFinancial liability and equity instrument shall be distinguished in accordance with the followingstandards: ① if the group cannot unconditionally avoid paying cash or financial asset to fulfila contractual obligation, the contractual obligation is qualified or financial liability. For certainfinancial instrument, although there are no clear terms and conditions to include obligation ofpaying cash or other financial liability, contractual obligation may indirectly be formed throughother terms and conditions. ②the group’s own equity instrument shall also be consideredwhether it is the substitute of cash, financial asset or it is the remaining equity, after the issuerdeducts liability, enjoyed by the equity holder , if it must or can be used to settle a financialasset. If the former, the instrument is a financial liability of the issuer, otherwise it is an equityinstrument of the issuer. In certain circumstances, financial instrument contract is classified asfinancial liability, if financial instrument contract specifies the Company must or can use itsown equity to settle the financial instrument, the contractual amount of right or obligationequals to that of the numbers of own equity instrument available or to be paid multiplied byfair value when settling, nevertheless the amount is fixed, or varied partially or fully based onthe its own equity’s market price(such as interest rate, certain commodity’s or financialinstrument’s price variance).When classifying a financial instrument (or its component) in the consolidated statements, the
group takes all terms and conditions agreed by the its member and instrument holder intoconsideration. If the group because of the instrument, as a whole, bears settlement obligationby paying cash, other financial asset or other means resulted in financial liability, the instrumentshall be classified as financial liability.
（7） Derivative financial instrument
The group uses derivative financial instruments such as foreign exchange forward contracts,commodity forward contracts and interest rate swaps to hedge exchange rate risk, commodityprice risk and interest rate risk respectively. Derivative financial instruments are initiallymeasured at their fair value on the date the derivative transaction contract is signed, and aresubsequently measured at their fair value. A derivative instrument with a positive fair value isrecognized as an asset and a negative fair value is recognized as a liability.Except hedging accounting, all gain or loss from the FV movement of derivative instrumentshall be recognized in the income statement.
（8） Financial asset and financial liability offset
Financial asset and financial liability shall be presented in the balance sheet separately andcannot be offset, unless the following conditions are all met: ①the Company has the legal rightto recognized offset amount and the right is enforceable. ②the Company plans to receive or alegal obligation to pay cash at net amount.
11. Inventories
Inventories are raw material, low-valuable consumable, goods on transit, working-in-progress,finished goods, and cost to fulfil the contract etc.The inventories are processed on perpetual inventory system, and are measured at their actualcost on acquisition. Weighted average cost method is taken for measuring the inventorydispatched or used. Low value consumables and packaging materials is recognized in theincome statement by one-off method.At the balance sheet date, inventory is measured at the lower of cost and net realizable value.If the cost of the inventory is higher than its net realizable value, a provision is made for thedecline in the price of the inventory and it is accounted in the current profit or loss. Netrealizable value is the amount of the estimated selling price of inventory in daily activities lessthe estimated costs to be incurred at completion, estimated selling expenses and related taxes.Impairment provision for the group's raw materials/goods in stock/WIP/ cost to fulfil thecontract is made on an individual inventory item, and when determining its net realizable value,the inventory of goods in stock and materials used for sale are determined at the estimatedselling price of the inventory less estimated selling expenses and related taxes; Inventory of
materials held for use in production is determined at the estimated selling price of the finishedgoods produced less the estimated costs to be incurred up to completion, estimated sellingexpenses and
12. Contract asset and contact liability
(1) Contract asset
Contract asset is an entity’s right to consideration in exchange for goods or services that theentity has transferred to a customer when that right is conditioned on something other than thepassage of time. For example, the group sold two goods that can be clearly distinguished to theclient, then the group has the right to consideration in exchange of the goods because one ofthe goods are delivered, but the consideration’s collection is conditioned on the other goodsdelivery, in this case, the right to consideration shall be recognized as contract asset.Expected credit loss recognition of contract asset is referred to the Note III、10 Provision forimpairment of financial assets.
(2) Contract liability
An entity’s obligation to transfer goods or services to a customer for which the entity hasreceived consideration (or the amount is due) from the customer. If a customer paysconsideration, or the group has a right to an amount of consideration that is unconditional beforethe group transfers a good or service to the customer, the group shall present the contract as acontract liability when the payment is made or the payment is due (whichever is earlier).
13. Assets relevant to contract cost
(1) Assets recognition methods in relation to contract cost
Assets relevant to contract cost in the group include cost to fulfill the contract and cost to obtaina contract. Cost to fulfill the contract is presented under inventory and other non-current assets.Cost to obtain a contract is presented under other current assets and other non-current assets.If the costs incurred in fulfilling a contract with a customer are not within the scope of anotherStandard such as inventory , fixed assets or intangible assets , an entity shall recognize an assetfrom the costs incurred to fulfill a contract only if those costs meet all of the following criteria:
the costs relate directly to a contract or to an anticipated contract, including direct labor, directmaterials and overheads which is clearly stated to be borne by the client and any other cost inline with the contract; the costs enhance resources of the group that will be used in performanceobligations in the future; and the costs are expected to be recovered.An asset as the incremental costs of obtaining a contract with a customer shall be recognized ifthe group expects to recover those costs. The group may recognize the incremental costs ofobtaining a contract as an expense when incurred if the amortization period of the asset t is one
year or less. The incremental costs of obtaining a contract are those costs that the group incursto obtain a contract with a customer that it would not have incurred if the contract had not beenobtained (for example, a sales commission). Other expenses incurred in order to obtain acontract rather than the incremental cost, and expected to be recovered (regardless of whetherthe contract is obtained such as travelling expenses) shall be recognized as an expense whenincurred, unless those costs are explicitly chargeable to the customer.
(2) Amortization of asset relevant to contract cost
An asset recognized in accordance with contract cost shall be amortized on a systematic basisthat is consistent with the transfer to the customer of the goods or services to which the assetrelates.
(3) Impairment of asset relevant to contract cost
If the carrying value of the group's assets related to the contract cost is higher than the followingtwo differences, the group will make the impairment provision for the excessive part andrecognize the asset impairment loss: ① The remaining consideration that the group isexpected to obtain due to the transfer of the commodities related to the asset; ② Estimate thecosts to be incurred for the transfer of the relevant goods
14. Long-term equity investment
Long term equity investments are the equity investment in subsidiary, in associated companyand in joint venture.
(1) Judgement on control, joint control and significant influence
Equity investments in which the group has a significant impact on the investee are investmentsin associates.Significant influence refers to having the power to participate in the decision-making of thefinancial and operational policies of the investee, but not being able to control or jointly controlthe formulation of these policies with other parties. Significant influence exists when the entitydirectly or indirectly owned 20% or more but less than 50% voting shares in the investee, unlessthere is explicit evidence that the company cannot participate in the production and operationdecisions of the investee or have control over the investee.When having less than 20% voting shares, the group’s significant influence still exists if thefollowings are taken into accounts: representation on the board of directors or equivalentgoverning body of the investee, participation in financial or operating activities policy-makingprocesses, material transactions between the investor and the investee, interchange ofmanagerial personnel or provision of essential technical information etc.
The group’s joint venture investment is an equity investment whereby the parties have jointlycontrol over it and have rights to the net assets of the investee. Joint control is the contractuallyagreed sharing of control of an arrangement, which exists only when decisions about therelevant activities require the unanimous consent of the parties sharing control. The group’sjudgement on joint control is based on the joint arrangement that all participants orcombinations of participants collectively control the arrangement and that decisions relating tothe activities of the arrangement must be made with the unanimous consent of those participantswho collectively control the arrangement.
(2) Accounting
The group initially measures the long-term investment in line with the initial cost for acquiringthe investment.The initial investment cost for long-term equity investment acquired through businesscombination under common control, is the carrying amount presented in the consolidatedfinancial statements of the share of net assets at the combination date in the acquired company.If the carrying amount of net assets at the combination date in the acquired company is negative,investment shall be recognized at zero.If long-term equity investment is acquired through business combination not under commoncontrol, initial investment cost shall be the combination cost. If the equity investment ofinvestee not under common control is acquired by stages and it’s not a bundled transaction, thecarrying amount of the equity investment held previously plus newly increased investment costare taken as the initial investment cost.Apart from the long-term equity investments acquired through business combination, the costof investment for the long-term equity investments acquired by cash payment is the amount ofcash paid, relevant direct expense, tax and other necessary expenses for the investment. Forlong-term equity investment acquired by issuing equity instruments, the cost of investment isthe fair value of the equity instrument issued.The Company adopts cost model for investment in subsidiary on separate financial statement.Under cost model, the long-term equity investment is measured at initial investment cost. Whenmore investment is added, it shall increase the carrying amount of investment by adjusting thefair value of additional investment and relevant transaction expenses. Cash dividend or profitdeclared by investee shall be recognized as investment gain/loss for the period based on theproportion share in the investee.The Company adopts equity method for investment in joint venture and affiliate. Under equitymethod, if the initial investment cost is greater than the share of fair value of the identifiablenet assets in the investee, the initial investment cost of long-term equity investment is no need
to be adjusted; If the initial investment cost is less than the share of fair value of the identifiablenet assets in the investee , the difference shall be recorded into the current profit and loss, andthe cost of long-term equity investment shall be adjusted at the same time.Long-term equity investment subsequently, under equity method, shall be adjusted for itcarrying amount according to the share of equity increase or decrease in the investee. TheCompany shall recognize its share of the investee’s net gain or losses after the investee’s netprofit adjustment, based on the fair value of the investee’s individual identifiable assets at theacquisition date, after making appropriate adjustments thereto in conformity with theaccounting policies and accounting period, and offsetting the unrealized profit or loss from theinter-group transactions, not constituting the business, between the entity and its associates andjoint ventures according to the shareholding attributable to the group (full amount of loss shallbe recognized if the inter-group transaction is impairment loss). The group recognizes netlosses incurred by investee to the extent that the carrying value of long-term equity investmentsand other long-term interests substantially constituting net investments in investee are writtendown to zero, except where the group is obliged to bear additional losses.The difference between the book value of long-term equity investment and actual acquisitioncost shall be recognized in the gain or loss of investment when the long-term equity investmentis disposed of.For long-term investments accounted under equity method, other comprehensive incomerecorded shall be accounted on the same basis as the investee directly disposing of related assetsor liability when equity method is not used any longer. The movements of shareholder’s equity,other than the net profit or loss, other comprehensive income and profit distribution previouslyrecorded in the shareholder’s equity of the Company are recycled to investment income for theperiod on disposal.If the remaining equity after the partially disposal is still accounted for under the equity method,the relevant other comprehensive income previously recognized under the equity method, istreated on the same basis as the direct disposal of the relevant assets or liabilities by the investeeand is carried forward on a proportional basis, and the owner's equity, which is apart from netprofit and loss, other comprehensive income and profit distribution of the investee, shall berecognized and proportionally transfers to current investment income.Where the entity has no longer joint control or significant influence in the investee company asa result of partially disposal of the investment, the remaining investment will be accounted forin line with the Recognition and Measurement of Financial Instruments Standard -No 22 ofAccounting Standards for Business Enterprises(No7 Caikuai [2017]), and the differencebetween the fair value of remaining investment at the date of losing joint control or significantinfluence and its carrying amount shall be recognized in the profit or loss for the year.
Where the entity has no longer control over the investee company as a result of partiallydisposal of the investment, the remaining investment will be changed to be accounted for usingequity method providing remaining joint control or significant influence over the investeecompany. The difference between carrying amount of disposed investment and considerationreceived actually shall be recognized as investment gain or loss for the period, and investmentshall be adjusted accordingly as if it was accounted for under equity model since acquisition.Where the entity has on longer joint control or significant influence in the investee as a resultof disposal, the investment shall be accounted for in accordance with the Recognition andMeasurement of Financial Instruments Standard -No 22 of Accounting Standards for BusinessEnterprises(No7 Caikuai [2017]), and difference between the carrying amount and disposalconsideration shall be recognized as investment gain or loss for the period, and the differencebetween the fair value of remaining investment at the date of losing control and its carryingamount shall be recognized in the profit or loss for the year.
15. Investment property
Investment property is held to earn rentals or for capital appreciation or both and includesproperty, building and use right of land. They are measured at cost model.Investment property is depreciated or amortized on straight line basis and its expected usefullife, net residual value rate and annual depreciation rate is as follows:
| Category | Useful life (years) | Estimated net residual value rate (%) | Annual depreciation rate (%) |
| Use right of land | 50 | 0 | 2 |
| Property and Buildings | 40 | 3/10 | 2.25-2.43 |
16. Fixed assets
Recognition criteria of fixed assets: defined as the tangible assets which are held for the purposeof producing goods, rendering services, leasing or for operation & management, and have morethan one year of useful life.Fixed assets shall be recognized when the economic benefit probably flows into the group andits cost can be measured reliably. Fixed assets include: building, machinery, transportationequipment, electronic equipment and others.All fixed assets shall be depreciated unless the fixed assets had been fully depreciated and arestill being used and land is separately measured. Straight-line depreciation method is adoptedby the group. Estimated net residual value rate, useful life, depreciation rate as follows:
| No | Category | Useful life | Estimated net residual | Annual depreciation |
| (years) | value rate (%) | rate (%) | ||
| 1 | Property and Buildings | 20-40 | 3、5、10 | 2.25-4.85 |
| 2 | Machinery equipment | 5-22 | 0.5-1、3、5、10 | 4.09-19.90 |
| 3 | Transportation equipment | 5-12 | 1、3、5、10 | 7-33.33 |
| 4 | Electronic equipment &others | 3-15 | 0-1、3、5、10 | 6-33.33 |
The group should review the estimated useful life, estimated net residual value and depreciationmethod at the end of each year. If any change has occurred, it shall be regarded as a change inthe accounting estimates.
17. Construction in progress
The cost of construction in progress is determined according to the actual constructionexpenditure, including the necessary construction expenditure incurred during the constructionperiod, the capitalized borrowing cost and other related expenses before the constructionreaches the condition expected for use.Constructions in progress are transferred to fixed assets based on the construction budget andactual costs on the date when completing and achieving estimated usable status, and the fixedassets should be depreciated in the next month. Adjustment will be made upon confirmation oftheir actual values after implementing the completion and settlement procedures.The construction in progress shall be transferred to fixed assets when it reaches the expectedusable state, and the criteria are as follows:
| Items | Criteria of transferring to FA |
| Property and Buildings | Earlier of actual starting of use and completion of inspection |
| Machinery equipment | Earlier of actual starting of use and completion of installation / inspection |
18. Intangible asset
The group’s intangible assets include use right of land, patents, non-patented technologies andothers. They are measured at actual cost at acquisition day. For acquired assets, the actual costis measured at actual price paid and relevant other expenses. Invested intangible asset shall bemeasured at actual cost as contracted or agreed value, however fair value will be taken if thecontracted or agreed value is not fair.
(1) Useful life and the basis for recognition, estimation, amortization method or reviewprocedureUse right of land shall be amortized evenly within the amortization period since the remiseddate. Patents, technologies and other intangible assets are amortized over the shortest of theirestimated useful life, contractual beneficial period and useful life specified in the law.
Amortization charge is included in the cost of assets or expenses, as appropriate, for the periodaccording to the usage of the assets. At the end of the year, for definite life of intangible assets,their estimated useful life and amortization method shall be assessed. Any change shall betreated as change on accounting estimate.
(2) The scope and accounting of research and development
The group separates the expenditure on internal research and development projects intoresearch phase expenditure and development phase expenditure. At research phase, expenditureare expenses directly relevant to research activity, including R&D employee’s salary, materials,depreciation, technology cooperation cost and assessment testing fees. At development phase,expenses can be capitalized only when meeting the following conditions: (a)the technicalfeasibility of completing the intangible asset so that it will be available for use or sale.(b)its intention to complete the intangible asset and use or sell it.(c)how the intangible asset will generate probable future economic benefits. Among otherthings, the entity can demonstrate the existence of a market for the output of the intangible assetor the intangible asset itself or, if it is to be used internally, the usefulness of the intangible asset.(d)the availability of adequate technical, financial and other resources to complete thedevelopment and to use or sell the intangible asset.(e)its ability to measure reliably the expenditure attributable to the intangible asset during itsdevelopment.Any expenditure not qualifying for the above conditions shall be accounted into profit and lossaccount.The projects expenditure will go to the development stage and start to be capitalized aftermeeting the above conditions, and passing the technical feasibility and economic feasibilitystudies, and being approved after evaluation.
19. Impairment of long-term assets
The group assesses whether there is any indication that long-term equity investment, investmentproperty under cost model, fixed assets, construction in progress, right-of-use asset andintangible assets with definite useful life may be impaired. If there is any indication that anasset may be impaired, the asset will be tested for impairment. Goodwill and intangible assetwith infinite useful life and development cost not reaching available for use status, are testedfor impairment annually no matter there is any indication of impairment or not.
(1) Non-current asset impairment excluding financial asset (expect goodwill)When testing the impairment, the group recognized the recoverable amount of an asset, whichthe higher of its fair value less costs to sell and the present value of the future cash flows
expected to be derived from the asset. After impairment test, any difference of carrying amountover its recoverable amount shall be recognized as impairment loss.The group estimates recoverable amount based on an individual asset. If it is not possible toestimate the recoverable amount of an individual asset, the recoverable amount is determinedon the basis of the asset groups or asset portfolio to which the asset belongs. Asset portfolio isdetermined based on whether the major cash inflow generated by the asset group is independentfrom the cash inflow of other assets or the asset portfolio.Net amount which FV less disposal cost is reference to the agreed sale price or observablemarket price for similar asset within the arm length transaction. When estimating the presentvalue of future cash flows, management must estimate the expected future cash flows of theasset or group of assets and select an appropriate discount rate to determine the present valueof future cash flows.
(2) Goodwill impairment
The group allocates the carrying value of the goodwill generated from the business combinationto the relevant asset group or to the relevant asset group combination which is difficult toallocate to the relevant asset group，in a reasonable way from the date of purchase. Whenconducting impairment tests on goodwill contained within the related asset group or asset groupcombination, if there are signs of impairment in the asset group or asset group combinationrelated to goodwill, the impairment test shall firstly be conducted on the asset group or assetgroup combination excluding goodwill, and the recoverable amount shall be calculated andcompared with the relevant carrying value so to recognize the corresponding impairment loss;Then, an impairment test is conducted on the asset group or asset group combination containinggoodwill to compare the carrying value with the recoverable amount. If the recoverable amountis lower than the carrying value, the impairment loss amount is first offset against the carryingvalue of goodwill allocated to the asset group or asset group combination, and then offset thecarrying value of the asset group and asset group combination based on the proportion of thecarrying value of other assets in the asset group or asset group combination without goodwill.The methodology, parameters and assumptions of the goodwill impairment test are referred inNotes VI.19.Once the impairment loss on the assets is recognized, it can not be reversed in a subsequentperiod.
20. Long-term prepaid expense
The group's long-term prepaid expense refers to landscape fees, renovation &decorationexpenses and other expenses paid and should be allocated over 1year.It will be amortized evenlywithin its beneficial period. The remaining unamortized expense should be charged into income
statement if long-term prepaid expense can not bring the beneficial inflows. Landscape feeswill be amortized for 10 years and renovation& decoration fees will be amortized for 5-10 years.
21. Employee benefits
Employee’s benefit comprises short-term benefit, post-employment benefit, termination benefitand other long-term employee’s benefit.Short-term benefit includes salary, bonus, allowance, welfare, social insurance, housing funds,labor union expense, staff training expense, during the period in which the service rendered bythe employees, the actually incurred short term employee benefits shall be recognized asliability and shall be recognized in P&L or related cost of assets based on benefit objectiveallocated from the service rendered by employees.Post-employment benefits include the basic pension scheme and unemployment insurance etc.Based on the risk and obligation borne by the Company, post-employment benefits areclassified into defined contribution plan and defined benefit plan. For defined contribution plan,liability shall be recognized based on the contributed amount made by the Company to separateentity at the balance sheet date in exchange of employee service for the period and it shall berecorded into current profit and loss account or relevant cost of assets in accordance withbeneficial objective.Other long-term employee’s benefit refers to all other employee benefits other than short-termbenefit, post-employment benefit and termination benefit.
22. Provision
When the Company has transactions such as commitment to externals, discounting the tradeacceptance note, unsettled litigation or arbitration which meets the following criterion,provision should be recognized: It is the Company's present obligation; carrying out theobligation will probably cause the Company's economic benefit outflow; the obligation can bereliably measured.Provision is originally measured on the best estimate of outflow for paying off the presentobligations. When determining the best estimate, need to consider the risk, uncertainty, timevalue of monetary relevant to contingent items. The group needs to review the present bestestimate and accordingly adjust the carrying value of the provision account.
23. Revenue recognition and measurement
The group recognizes revenue when it has fulfilled its contractual performance obligations, i.e.when the customer has obtained control of the relevant goods or services. Control right of goodsor services refers to the ability to direct the use of, and obtain substantially all of the remainingbenefits from, the asset.
If the contract between the group and the customer meets the following five conditions at thesame time, the group has fulfilled the performance obligation when the customer obtains thecontrol of the relevant goods or services, and the revenue is recognized:
1) the parties to the contract have approved the contract and promised to fulfill their ownobligations;
2) the contract specifies the rights and obligations of parties related to the transferredcommodities;
3) the contract has explicit payment terms related to the transferred goods;
4) the contract has commercial substance, where the performance of the contract will changethe company's future cash flow risk, time distribution or amount;
5) the consideration to which the company is entitled as a result of the transfer of goods to thecustomer is likely to be recovered.When the group transfers control of a good or service over time, it satisfies a performanceobligation and recognizes revenue over time only if one of the following criteria is met,otherwise it shall be the performance obligation at a point in time.
(1) the customer simultaneously receives and consumes the benefits provided by the entity’sperformance as the entity performs
(2) the group’s performance creates or enhances an asset (for example, work in progress) thatthe customer controls as the asset is created or enhanced
(3) the group’s performance does not create an asset with an alternative use to the entity and
the entity has an enforceable right to payment for performance completed to date
(1) Revenue policy from sales
The group’s revenue mainly includes income from sale of goods and installation of the wholeset of refrigeration engineering project.Based on the actual situation, the group recognizes the revenue as the followings；
1) Domestic sales: the sales contract with customers generally includes the performance ofobligation of transferring goods. The group recognizes the revenue at the time when the arrivalacceptance is completed by customers, having taken all followings into consideration: presentdebt collection right entitled to the sales of goods, the transfer of the main risks and rewards inthe ownership of the goods, the transfer of the legal ownership entitled to the goods, the transferof physical assets, the acceptance of goods by customers.
2) Export sales: the group will recognize the sales revenue after completing the customsdeclaration and export procedures.
Revenue from installation of the whole set of refrigeration engineering project. In therefrigeration installation contract between the group and the customer, since the equipmentsales and installation services cannot be distinguished separately, the entire project contract isregarded as a single performance obligation, and the revenue of the single performanceobligation is recognized at the completion of the customer acceptance. when a performanceobligation over time is satisfied, revenue shall be recognized within the contract term accordingto the performance progress, which is determined by the percentage of the cumulative actualcost to expected total contract cost. When the performance progress can not be estimatedreasonably, the group recognizes the revenue to the extent where the already incurred cost canbe compensated until the performance progress can be decided.
(2) Determining and allocating the transaction price
If the contract includes two or more performance obligations, at the inception date of contract,the group shall allocate the transaction price to each performance obligation identified in thecontract on a relative standalone selling price ratio basis and measure the revenue at theallocated transaction price to each performance. If any solid evidence indicates that contractdiscount is only relevant to one or some (not all) performance obligations, the discount shall beallocated into the one or these performance obligations.An amount of consideration can vary because of cash discounts, price guarantee. The groupdetermines the best estimate of the variable consideration in line with the expectation or theamount that most probably incurred, but includes, in the transaction price, the variableconsideration not exceeding the amount that is highly unlikely to result in a material reversalof cumulative revenue recognized when the relevant uncertainty is eliminated.The group accounts for consideration payable to a customer as a reduction of the transactionprice and, therefore, of revenue unless the payment to the customer is in exchange for a distinctgood or service. Accordingly, the revenue shall be recognized at the later of the revenuerecognition and the consideration paid to a customer.For sales with a right of return, the group recognizes the revenue for the consideration expectedto have the right to receive arising from transferring the goods to customers when the customerreceives the control right over the relevant goods, and recognizes the expected refund amountas provision. At the same time, receivable of return cost, as an asset, shall be recognized for thecarrying value of the returned goods when it is expected to be transferred less expected cost forgetting it back (including decline in value) and net amount of the above asset cost shall becarried over to the cost. At every balance sheet date, the group will reassess the future salesreturns and remeasure the above assets and liabilities.Where a significant financing component exists in the contract, the transaction price shall bemeasured at the assumed price that the payment is made by cash when the client receives the
control right of goods or services. The difference between the promised consideration and thedetermined transaction price shall be amortized within the contract period using effectiveinterest rate, and it is the discounting rate at which the dominated price of the contractconsideration is discounted to the cash price.According to the agreement or the regulation etc., the group provide warranty for the goodssold and it is the quality assurance for promising the goods are in commodity with the agreedstandards and shall be accounted for as Note III、22 provision.
24. Government grants
Government grant shall be recognized only when all attached conditions are met and the grantis possibly received. Where a government grant is in the form of a transfer of monetary asset,it is measured at the amount received. Where a government grant is made on the basis of fixedamount or conclusive evidence indicates relevant conditions for financial support are met andexpect to probably receive the fund, it is measured at the amount receivable. Where agovernment grant is in the form of a transfer of non-monetary asset, it is measured at fair value.If fair value cannot be determined reliably, it is measured at a nominal amount of RMB1 Yuan.Assets-related government grant is the government fund obtained by the group for the purposeof long-term assets purchase and construction or establishment in the other forms. Income-related grants are the grant given by the government apart from the assets-related grants. If nogrant objective indicated clearly in the government documents, the group shall judge itaccording to the principle mentioned above. If the grant is difficult to be separated, it shall beconsidered as income-related grant as a whole.Assets-related government grants are recognized as deferred income, which shall be evenlyamortized to profit or loss over the useful life of the related asset. Any assets are sold,transferred, disposed of or impaired earlier than their useful life expired date, the remainingbalance of deferred income which hasn’t been allocated shall be carried forward to the incomestatement when the assets are disposed of.Income-related government grants that is a compensation for related expenses or losses to beincurred in subsequent periods are recognized as deferred income and credited to the relevantperiod when the related expenses are incurred. Government grants relating to compensation forrelated expenses or losses already incurred are charged directly to the profit or loss for theperiod. Government grants related to daily business, shall be recognized as other income inaccordance with business nature or offsetting related expenses, otherwise, shall be recognizedas non-operating income or expenses.
25. Deferred tax assets and deferred tax liabilities
The deferred income tax assets or the deferred income tax liabilities should be recognized
according to the differences (temporary difference) between the carrying amount of the assetsor liabilities and its tax base and the difference between the carrying amount of tax base itemand its tax base.Deferred tax liability shall be recognized for all taxable temporary difference apart from thefollowings : (1) temporary differences arise from the initial recognition of goodwill or the initialrecognition of assets or liabilities arising from non-business combinations that do not affectaccounting profits or taxable income (or deductible losses); (2) The group is able to control thetiming of the reversal of taxable temporary differences related to investments in subsidiaries,associates, and joint ventures, and such temporary differences are likely not to be reversed inthe foreseeable future.The group recognizes deferred income tax assets for deductible temporary differences,deductible losses, and tax deductions that are likely to be obtained to offset future taxableincome, except for the following situations: (1) the initial recognition of assets or liabilitiesarising from non-business combination transactions where temporary differences do not affectaccounting profits or taxable income (or deductible losses); (2) Deductible temporarydifferences related to investments in subsidiaries, associates, and joint ventures that cannotsimultaneously meet the following conditions: temporary differences are likely to be reversedin the foreseeable future, and taxable income is likely to be obtained in the future to offsetdeductible temporary differences.The group recognizes deferred income tax assets for all unused deductible losses to the extentthat there is likely to be sufficient taxable income to offset the deductible losses. Themanagement uses plenty of judgment to estimate the timing and amount of future taxableincome, combined with tax planning strategies, to determine the amount of deferred incometax assets, which results in uncertainty.On the balance sheet date, deferred income tax assets and deferred income tax liabilities aremeasured at the applicable tax rate during the expected period of asset recovery or liabilitysettlement.When the following conditions are met simultaneously, the group shall present the deferredincome tax assets and deferred income tax liabilities at the net amount after offsetting: Thegroup has the legal right to settle the current income tax assets and deferred income taxliabilities at the net amount; Deferred income tax assets and deferred income tax liabilities arerelated to the income tax levied by the same tax collection and management authority on thesame taxpayer or on different taxpayers. However, in the future, within the term when eachsignificant deferred income tax asset and deferred income tax liability to be reversed, theinvolved taxpayers intend to settle the current income tax assets and liabilities on a net basis oracquire assets and settle debts simultaneously.
26. Lease
(1) Lease identification
Lease: A contract, or part of a contract, that conveys the right to use an asset (the underlyingasset) for a period of time in exchange for consideration.At inception of a contract, the group shall assess whether the contract is, or contains, a lease. Acontract is, or contains, a lease if the contract conveys the right to control the use of an or manyidentified assets for a period of time in exchange for consideration.For a contract that is, or contains several leases, the group shall separate the contract andaccount each lease separately. The group shall account for each lease component separatelyfrom non-lease components of the contract if the contract contains lease and non-leasecomponents. Each leasing part is accounted for according to the leasing standards, while thenon-leasing part is accounted for according to other applicable accounting standards. If thecontract includes both leasing and non-leasing parts, the group, as the lessor, will split theleasing and non-leasing parts and conduct accounting treatment separately. Each leasing partwill be accounted for according to the leasing standards, while the non-leasing part will beaccounted for according to other applicable accounting standards. As the lessee, the groupchooses not to separate the lease and non-lease, and joins each leased part and its non- leasedparts separately into a lease, accounting treatment shall be carried out in accordance withleasing standards; However, if the contract includes embedded derivative instruments thatshould be split, the group will not merge them with the leasing portion for accounting treatment.
(2) As a leasee
1) Recognition
At the commencement date, the group as a lessee shall recognize a right-of-use asset and a leaseobligation except short-term lease and low value asset lease.Right-of-use assets represents a lessee’s right to use an underlying asset for the lease term, andis initially measured at cost.The cost of the right-of-use asset shall comprise:
① the amount of the initial measurement of the lease liability,
② any lease payments made at or before the commencement date, less any lease incentivesreceived, which is the incremental cost for the lease
③ any initial direct costs incurred by the lessee which is the incremental cost
④ an estimate of costs to be incurred by the lessee in dismantling and removing the underlyingasset, restoring the site on which it is located or restoring the underlying asset to the condition
required by the terms and conditions of the lease, unless those costs are incurred to produceinventories. Where the group remeasures the lease liability in accordance with the relevantprovisions of the leasing standard, the carrying value of right-of-use asset is adjustedaccordingly.The group shall follow the following principles when determining the depreciation life of theright-of-use asset: if the ownership of the leased asset can be reasonably determined at the endof the lease term, depreciation shall be calculated and deducted during the remaining servicelife of the leased asset; Where it is not certain that the ownership of the leased asset can beacquired at the end of the lease term, depreciation shall be calculated at the shorter of the leaseterm and the remaining service life of the leased asset. The depreciation amount shall beaccounted into cost of assets or profit and loss account.At the commencement date, a lessee shall measure the lease liability at the present value of thelease payments that are not paid at that date.The lease payments included in the measurement of the lease liability comprise the followingpayments for the right to use the underlying asset during the lease term that are not paid at thecommencement date: ① fixed payments (including in-substance fixed payments) less anylease incentives receivable;② variable lease payments that depend on an index or a rate,initially measured using the index or rate as at the commencement date;③ the exercise priceof a purchase option if the lessee is reasonably certain to exercise that option; ④ payments ofpenalties for terminating the lease, if the lessee will certainly exercise an option to terminatethe lease during the lease term;⑤ amounts expected to be payable by the lessee under residualvalue guarantees.When calculating the present value of the lease payments, interest rate implicit in the lease shallbe used. If the rate cannot be readily determined, the group shall use the lessee’s incrementalborrowing rate. Interest on the lease liability in each period during the lease term shall becalculated based on a constant periodic rate of interest, and be recognized as in profit or lossunless its capitalization.After the lease commencement date, the group increases the carrying amount of lease liabilitywhen recognizing the interest on lease liability and; decreases the carrying amount of leaseliability when making lease payment. The group remeasures the lease liability in accordancewith the present value of revised lease payment, when the followings incur: ①change of in-substance fixed payments (subject to original discounting rate) ② change of amountsexpected to be payable under residual value guarantees(subject to original discounting rate) ③change of an index or a rate used for future lease payments(subject to revised discounting rate)
④ change in assessment of a buy option(subject to revised discounting rate) ⑤ change inassessment of a renew option or termination option or actual situation(subject to revised
discounting rate).
2) Short-term lease and low value asset lease
The group has chosen not to recognize the right-of-use asset and lease liability for short-termlease (lease term less than 12 months) and low value asset (30,000 Yuan) when it is singleleased new asset. In this case, lease payment will be accounted directly in profit or loss or onthe straight-line basis in profit or loss.
3) Sales and lease back
The group, as a seller and a lease within the sales and lease back transaction, assesses whetherthe transfer of the asset is a sale. If the transfer of assets is not a sale, the group shall continueto recognize the transferred assets and at the same time recognize a financial liability equal tothe transfer income (Note VI. 34 lease). If the transfer of assets is a sale, the group shall measurethe right-of-use asset arising from the leaseback at the proportion of the previous carryingamount of the asset that relates to the right of use retained by the group. Accordingly, the groupshall recognize only the amount of any gain or loss that relates to the rights transferred to thebuyer-lessor.
(3) As a lessor
The group, as a lessor, classified it as a finance lease if it transfers substantially all the risks andrewards incidental to ownership of an underlying asset unless an operating lease.
1) Financing lease
At the commencement date, the group shall recognize the lease payment receivable andderecognize of finance lease asset. When initially measuring the lease payment receivable, netlease investment value shall be used for the lease payment receivable.Net lease investment value equals to the any residual value guarantees plus the PV of unduelease receivable discounted at the interest rate implicit in the lease. The group shall recognizeinterest income over the lease term based on a constant periodic rate. The variable leasepayment obtained by the group related to operating leases, which are not included in the netlease investment, shall be accounted for in the current profit and loss when actually incurred
2) Operating lease
Lease payment received shall be recognized as lease income on a straight-line basis within theperiod.The initial direct expenses incurred by the group in relation to operating leases are capitalizedto the cost of leasing the underlying asset and are recognized in profit or loss by instalmentsover the lease period on the same basis as rental income. Variable lease payments made by thegroup in relation to operating leases that are not included in lease collections are recognized in
profit or loss for the period when they are actually incurred.The group shall account for a modification to an operating lease as a new lease from theeffective date of the modification, considering any received in advance or lease paymentsreceivable relating to the original lease as part of the lease payments receivable for the newlease
27. Fair value measurement
The group measures investment property, derivative financial instruments and equityinstruments at fair value at each balance sheet date. Fair value refers to the price that marketparticipants can receive by selling an asset or can pay for transferring a liability in an orderlytransaction that takes place on the measurement date.Assets and liabilities measured or disclosed at fair value in the financial statements aredetermined to belong to the different fair value level based on the lowest level of input valuesthat are significant to the fair value measurement as a whole: level 1 input is the unadjustedquoted price for identical asset or liability available at the active market on the measurementdate; level 2 input is the directly or indirectly observable input for relevant asset or liabilityapart from level 1 input; level 3 input is the unobservable input for relevant asset or liability.(For levels 1 and 2) For financial instruments traded in an active market, the group determinestheir fair value by their active market quotes; For financial instruments that are not traded in anactive market, the group uses valuation techniques to determine their fair value, and thevaluation model used is mainly the discounted cash flow model. The input of valuationtechniques mainly includes: risk-free interest rate of debt, credit premium and liquiditypremium; estimator coefficient. and liquidity discount of equity.(For level 3) The fair value of level 3 is determined on the basis of the group's valuation models,such as the discounted cash flow model. The group also considers the initial transaction price,recent transactions of the same or similar financial instruments, or full third-party transactionsof comparable financial instruments. As at 31 December 2023, level 3 financial assets measuredat fair value are valued by using significant unobserved inputs such as discount rates, but theirfair value is not materially sensitive to reasonable changes in these significant unobservedinputs.The group uses the market approach to determine the fair value of unlisted equity investments.This requires the group to determine comparable listed companies, select market coefficient,estimate liquidity discounts, etc., and is therefore subject to uncertainty.
VI. Taxation
1. The main applicable tax and rate to the Group as follows:
| Tax | Tax base | Tax rate |
| Value-added tax (VAT) | Sales revenue or Purchase | 5%、6%、9%、13% |
| City construction tax | Value-added tax payables | 7% |
| Education surcharge | Value-added tax payables | 3% |
| Local education surcharge | Value-added tax payables | 2% |
| Enterprise income tax(EIT) | Current period taxable profit | 15% or 25% |
| Real estate tax | 70% of cost of own property or revenue from leasing property | 1.2% or 12% |
| Land use tax | Land using right area | Fixed amount per square meter |
| Other tax | According to the relevant provisions of the state and local |
Notes for tax entities with different EIT rate
| Tax entities | EIT rate |
| Bingshan Refrigeration & Heat Transfer Technologies Co. ,Ltd | 15% |
| Dalian Bingshan Group Engineering Co., Ltd. | 25% |
| Dalian Bingshan Group Sales Co., Ltd. | 25% |
| Dalian Bingshan Air-conditioning Equipment Co., Ltd. | 15% |
| Dalian Bingshan Guardian Automation Co., Ltd. | 15% |
| Dalian Bingshan-RYOSETSU Quick Freezing Equipment Co., Ltd. | 25% |
| Wuhan New World Refrigeration Industrial Co., Ltd. | 15% |
| Dalian Bingshan Engineering & Trading Co., Ltd | 25% |
| Dalian Universe Thermal Technology Co.,Ltd. | 15% |
| Chengdu Bingshan Refrigeration Engineering Co., Ltd. | 25% |
| Wuhan New World Air-conditioning Refrigeration Engineering Co., Ltd | 25% |
| Wuhan Lanning Energy Technology Co., Ltd | 25% |
| Sonyo Compressor(Dalian)Co.,Ltd. | 15% |
| Sonyo Refrigeration System (Dalian) Co., Ltd. | 15% |
| Sonyo Refrigeration (Dalian) Co., Ltd. | 15% |
2. Tax preference
The Company obtained the qualification of high and new technology enterprises on 3rdDecember, 2020 approved by Dalian Science Technology Bureau, Dalian Finance Bureau,Dalian State Tax Bureau and Local tax Bureau. The Certificate No. is GR202021200646, andthe validity duration is three years. According to the tax law, the Company can be granted for
the preferential tax policy of enterprise income tax rate of 15% in three years.The Company’s subsidiary, Dalian Bingshan Air-conditioning Equipment Co., Ltd. obtainedthe qualification of high and new technology enterprises on 3rd December, 2020 approved byDalian Science Technology Bureau, Dalian Finance Bureau, Dalian State Tax Bureau andLocal tax Bureau. The Certificate No. is GR202021200672, and the validity duration is threeyears. According to the tax law, Bingshan Air-conditioning can be granted for the preferentialtax policy of enterprise income tax rate of 15% in three years.The Company’s subsidiary, Dalian Bingshan Guardian Automation Co., Ltd. obtained thequalification of high and new technology enterprises on 16th November, 2018 approved byDalian Science Technology Bureau, Dalian Finance Bureau, Dalian State Tax Bureau andLocal tax Bureau. The Certificate No. is GR20181200562, and the validity duration is threeyears. According to the tax law, Bingshan Guardian can be granted for the preferential taxpolicy of enterprise income tax rate of 15% in three years.The Company’s subsidiary, Wuhan New World Refrigeration Industrial Co., Ltd obtained thequalification of high and new technology enterprises on 15th November, 2018 approved byHubei Science Technology Bureau, Hubei Finance Bureau, Hubei State Tax Bureau and HubeiLocal tax Bureau. The Certificate No. is GR201842000605, and the validity duration is threeyears. According to the tax law, Wuhan New World Refrigeration can be granted for thepreferential tax policy of enterprise income tax rate of 15% in three years.The Company’s subsidiary, Dalian Universe Thermal Technology Co., Ltd. obtained thequalification of high and new technology enterprises on 3rd December, 2020 approved byDalian Science Technology Bureau, Dalian Finance Bureau, Dalian State Tax Bureau andLocal tax Bureau. The Certificate No. is GR202021200570, and the validity duration is threeyears. According to the tax law, Universe can be granted for the preferential tax policy ofenterprise income tax rate of 15% in three years.The Company’s subsidiary, Sonyo Compressor(Dalian)Co.,Ltd.(hereinafter referred toas“ Sonyo Compressor” obtained the qualification of high and new technology enterprises on22nd October, 2021 approved by Dalian Science Technology Bureau, Dalian Finance Bureau,Dalian State Tax Bureau and Local tax Bureau. The Certificate No. is GR202121200268, andthe validity duration is three years. According to the tax law, the Company can be granted forthe preferential tax policy of enterprise income tax rate of 15% in three years.The Company’s subsidiary, Sonyo Refrigeration System (Dalian) Co., Ltd.(hereinafter referredto as“ Sonyo Refrigeration System” obtained the qualification of high and new technologyenterprises on 9th October, 2020 approved by Dalian Science Technology Bureau, DalianFinance Bureau, Dalian State Tax Bureau and Local tax Bureau. The Certificate No. isGR202021200465, and the validity duration is three years. According to the tax law, the
Company can be granted for the preferential tax policy of enterprise income tax rate of 15% inthree years.The Company’s subsidiary, Sonyo Refrigeration (Dalian) Co., Ltd.(hereinafter referred toas“ Sonyo Refrigeration System” obtained the qualification of high and new technologyenterprises on 22th October, 2021 approved by Dalian Science Technology Bureau, DalianFinance Bureau, Dalian State Tax Bureau and Local tax Bureau. The Certificate No. isGR202121200368, and the validity duration is three years. According to the tax law, theCompany can be granted for the preferential tax policy of enterprise income tax rate of 15% inthree years.
(2)According to the Announcement on the Policy of Value added Tax Deduction for AdvancedManufacturing Enterprises issued by the Ministry of Finance and the State Administration ofTaxation (Announcement No. 43 of 2023 of the Ministry of Finance and the State Administrationof Taxation), from January 1, 2023 to December 31, 2027, advanced manufacturing enterprisesare allowed to deduct an additional 5% of the deductible input tax amount for the current periodto offset the payable value-added tax amount. The tax collection and management matters ofenterprises enjoying this policy shall be implemented in accordance with the current collectionand management regulations. The Company and its subsidiaries, Bingshan Air Conditioning,Bingshan Guardian, Wuxin Refrigeration, Nevis, Sonyo Compressor, Sonyo Refrigeration, enjoythis preferential policy.VII. Notes to Consolidated Financial StatementsThe financial statement data disclosed below, unless otherwise specified, "beginning" refers toJanuary 1, 2024, "end of period" refers to June 30, 2024, "current period" refers to the periodfrom January 1 to June 30, 2024, and "previous period" refers to the period from January 1 toJune 30, 2023, with the currency unit being RMB yuan.
1. Cash and cash in bank
| Item | Closing Balance | Opening Balance |
| Cash on hand | 29,993.92 | 70,750.93 |
| Cash in bank | 725,560,608.32 | 863,950,616.72 |
| Other cash and cash equivalents | 54,092,652.58 | 87,018,202.46 |
| Total | 779,683,254.82 | 951,039,570.11 |
2. Notes receivable
(1) Category of notes receivable
| Items | Closing Balance | Opening Balance |
| Bank acceptance notes | 228,910,196.23 | 335,914,443.51 |
| Commercial acceptance notes | 24,060,333.46 | 17,514,478.91 |
| Total | 252,970,529.69 | 353,428,922.42 |
| Items | Closing Balance | Opening Balance | |||||||||
| Booking balance | Provision for bad debts | Book value | Booking balance | Provision for bad debts | Book value | ||||||
| Amount | % | Amount | % | Amount | % | Amount | % | ||||
| Including: | |||||||||||
| Notes receivable with provision for bad debts by combination | 254,467,466.48 | 100.00% | 1,496,936.79 | 0.59% | 252,970,529.69 | 354,313,722.61 | 100.00% | 884,800.19 | 0.25% | 353,428,922.42 | |
| Including: | |||||||||||
| Bank acceptance bill | 228,910,196.23 | 89.96% | 0.00 | 228,910,196.23 | 335,914,443.51 | 94.81% | 335,914,443.51 | ||||
| trade acceptance draft | 25,557,270.25 | 10.04% | 1,496,936.79 | 5.86% | 24,060,333.46 | 18,399,279.10 | 5.19% | 884,800.19 | 4.81% | 17,514,478.91 | |
| Total | 254,467,466.48 | 100.00 % | 1,496,936.79 | 0.59% | 252,970,529.69 | 354,313,722.61 | 100.00% | 884,800.19 | 0.25% | 353,428,922.42 | |
Provision for bad debts by combination:
| Items | Closing Balance | ||
| Booking balance | Bad debt provision | Provision ratio | |
| Banker's acceptance draft | 228,910,196.23 | ||
| Trade acceptance draft | 25,557,270.25 | 1,496,936.79 | 5.86% |
Instructions for determining the basis for this combination:
If the bad debt provision for bills receivable is accrued according to the general model of expectedcredit loss, please refer to the disclosure method of other receivables to disclose the relevantinformation of bad debt provision:
?Applicable ?Not applicable
(2) Provision for bad debts for the current period:
Provision for bad debts in the current period:
| Category | Opening balance | Change during the year | Closing Balance | |||
| Accrued | Collected/reversed | Written-off | Others | |||
| Bad debt provision for notes receivable | 884,800.19 | 612,136.60 | 1,496,936.79 | |||
| Total | 884,800.19 | 612,136.60 | 1,496,936.79 | |||
Among them, the amount of bad debt provision recovered or reversed in the current period isimportant:
?Applicable ?Not applicable
(3)Notes receivable pledged by the company at the end of the period
| Items | Closing pledged amount |
| Bank acceptance notes | 9,019,138.381 |
| Total | 9,019,138.381 |
(4) Notes receivable endorsed or discounted but not mature at the end of year:
| Item | Closing amount no more recognized | Closing amount still recognized |
| Bank acceptance notes | 135,963,419.37 | |
| Trade acceptance draft | ||
| Total | 135,963,419.37 |
3. Accounts receivable
(1) Category of accounts receivable
| Items | Closing Balance | ||||
| Booking balance | Provision | Booking value | |||
| Amount | % | Amount | % | ||
| Bad debt provision on individual basis | 13,741,982.96 | 0.57% | 10,934,432.50 | 79.57% | 2,807,550.46 |
| Bad debt provision on group | 2,388,393,221.67 | 99.43% | 568,585,320.46 | 23.81% | 1,819,807,901.21 |
| Including: aging as characteristics of credit risk | 2,388,393,221.67 | 99.43% | 568,585,320.46 | 23.81% | 1,819,807,901.21 |
| Total | 2,402,135,204.63 | 100.00% | 579,519,752.96 | 24.13% | 1,822,615,451.67 |
(Continued)
| Items | Opening balance | ||||
| Booking balance | Provision | Booking value | |||
| Amount | % | Amount | % | ||
| Bad debt provision on individual basis | 14,372,020.85 | 0.67% | 11,564,470.39 | 80.47% | 2,807,550.46 |
| Bad debt provision on group | 2,127,265,193.70 | 99.33% | 553,638,820.00 | 26.03% | 1,573,626,373.70 |
| Including: aging as characteristics of credit risk | 2,127,265,193.70 | 99.33% | 553,638,820.00 | 26.03% | 1,573,626,373.70 |
| Total | 2,141,637,214.55 | 100.00% | 565,203,290.39 | 26.39% | 1,576,433,924.16 |
Provision for bad debts by combination:
| Items | Closing Balance | ||
| Booking balance | Provision | % | |
| within 1 year | 1,301,074,181.07 | 68,714,806.97 | 5.28% |
| 1-2 years | 400,639,842.63 | 66,935,742.62 | 16.71% |
| 2-3 years | 237,416,081.96 | 72,207,829.48 | 30.41% |
| 3-4 years | 138,724,686.87 | 68,344,784.17 | 49.27% |
| 4-5 years | 64,992,086.64 | 46,835,814.72 | 72.06% |
| more than 5 years | 245,546,342.50 | 245,546,342.50 | 100.00% |
| Total | 2,388,393,221.67 | 568,585,320.46 | |
Instructions for determining the basis for this combination:
If the bad debt provision for accounts receivable is accrued according to the general model ofexpected credit loss, please refer to the disclosure method of other receivables to disclose therelevant information of bad debt provision:
?Applicable ?Not applicable
Disclosure by age
| Aging | Closing Balance |
| Within1 year | 1,206,206,773.36 |
| 1to 2 years | 467,224,285.85 |
| 2 to 3 years | 261,707,912.29 |
| More than 3 years | 466,996,233.13 |
| 3 to 4 years | 149,532,670.91 |
| 4 to 5 years | 70,107,609.72 |
| More than 5 years | 247,355,952.50 |
| Total | 2,402,135,204.63 |
2) Bad debt provision accrued and written-off (withdraw)
Provision for bad debts in the current period:
| Category | Opening balance | Change during the period | Closing Balance | |||
| Accrued | Collected/reversed | Written-off | Others | |||
| Bad debt provision for accounts receivable | 565,203,290.39 | 15,906,178.09 | 2,003,152.37 | 413,436.85 | 579,519,752.96 | |
3) Accounts receivable written off in current period
| Item | Written off amount |
| Receivable actually written off | 2,003,152.37 |
4. Contract asset
(1) contract asset
| Items | Closing Balance | ||
| Booking balance | Provision | Carrying amount | |
| Undue warranty | 256,845,119.22 | 37,891,429.09 | 218,953,690.13 |
| Unsettled receivable of revenue recognized over time | 23,639,529.92 | 7,943,229.70 | 15,696,300.22 |
| Total | 280,484,649.14 | 45,834,658.79 | 234,649,990.35 |
(continued)
| Items | Opening balance | ||
| Booking balance | Provision | Carrying amount | |
| Undue warranty | 265,440,261.85 | 37,369,046.20 | 228,071,215.65 |
| Unsettled receivable of revenue recognized over time | 18,840,435.97 | 9,834,772.91 | 9,005,663.06 |
| Total | 284,280,697.82 | 47,203,819.11 | 237,076,878.71 |
(2) Significant change of the account
| Items | Amount | Reason |
| Undue warranty | -9,117,525.52 | The warranty has expired |
| Unsettled receivable of revenue recognized over time | 6,690,637.16 | Settled during the year |
| Total | -2,426,888.36 | — |
(3) Category of contract asset based on bad debt provision method
| Items | Closing Balance | ||||
| Booking balance | Provision | Booking value | |||
| Amount | % | Amount | % | ||
| Bad debt provision on individual basis | 1,709,948.80 | 0.61% | 1,709,948.80 | 100.00% | |
| Bad debt provision on group | 278,774,700.34 | 99.39% | 44,124,709.99 | 15.83% | 234,649,990.35 |
| Including: aging as characteristics of credit risk | 278,774,700.34 | 99.39% | 44,124,709.99 | 15.83% | 234,649,990.35 |
| Total | 280,484,649.14 | 100.00% | 45,834,658.79 | 16.34% | 234,649,990.35 |
(continued)
| Items | Opening Balance | ||||
| Booking balance | Provision | Booking value | |||
| Amount | % | Amount | % | ||
| Bad debt provision on individual basis | 1,709,948.80 | 0.60% | 1,709,948.80 | 100.00% | |
| Bad debt provision on group | 282,570,749.02 | 99.40% | 45,493,870.31 | 16.10% | 237,076,878.71 |
| Including: aging as characteristics of credit risk | 282,570,749.02 | 99.40% | 45,493,870.31 | 16.10% | 237,076,878.71 |
| Total | 284,280,697.82 | 100.00% | 47,203,819.11 | 16.60% | 237,076,878.71 |
1) Bad debt provisions on individual basis
| Name | Opening balance | Closing Balance | ||||
| Accounts receivable | Provision for bad debts | Accounts receivable | Provision for bad debts | Proportion (%) | Reason | |
| Other companies2 | 1,709,948.80 | 1,709,948.80 | 1,709,948.80 | 1,709,948.80 | 100.00% | Recovery is not expected |
| Total | 1,709,948.80 | 1,709,948.80 | 1,709,948.80 | 1,709,948.80 | 100.00% | — |
2) Bad debt provisions on group basis
| Aging | Closing Balance | ||
| Accounts receivable | Provision for bad debts | Drawing proportion | |
| Within 1 year | 144,248,727.79 | 9,219,318.83 | 6.39% |
| 1 to 2 years | 77,587,058.42 | 12,304,576.52 | 15.86% |
| 2 to 3 years | 30,378,613.98 | 8,397,875.48 | 27.64% |
| 3 to 4 years | 12,036,340.78 | 4,224,543.50 | 35.10% |
| 4 to 5years | 11,745,124.21 | 7,199,560.50 | 61.30% |
| Over 5 years | 2,778,835.16 | 2,778,835.16 | 100.00% |
| Total | 278,774,700.34 | 44,124,709.99 | — |
(3) Bad debt provision of current period
| Category | Accrued | Collected/ reversed | Written-off | Others | Reason |
| Undue warranty | 230,413.19 | - | - | - | |
| Unsettled receivable of revenue recognized over time | 1,599,573.50 | - | - | - | |
| Total | 230,413.19 | 1,599,573.50 | - | - | - |
5. Receivables financing
| Items | Closing Balance | Opening Balance |
| Bank acceptance notes | 233,756,806.93 | 303,585,218.53 |
| Total | 233,756,806.93 | 303,585,218.53 |
(2) Category of accounts receivable based on bad debt provision method
| Items | Closing Balance | ||||
| Booking balance | Provision | Booking value | |||
| Amount | % | Amount | % | ||
| Bad debt provision on group | 233,756,806.93 | 100.00% | - | - | 233,756,806.93 |
| Including: bank acceptance notes | 233,756,806.93 | 100.00% | - | - | 233,756,806.93 |
| Total | 233,756,806.93 | 100.00% | - | - | 233,756,806.93 |
(Continued)
| Items | Opening balance | ||||
| Booking balance | Provision | Booking value | |||
| Amount | % | Amount | % | ||
| Bad debt provision on group | 303,585,218.53 | 100.00 | 303,585,218.53 | ||
| Including: aging as characteristics of credit risk | 303,585,218.53 | 100.00 | 303,585,218.53 | ||
| Total | 303,585,218.53 | 100.00 | 303,585,218.53 | ||
(3) Pledged notes receivable up to the end of year.
| Items | Closing pledged amount |
| Bank acceptance notes | 93,473,070.22 |
| Total | 93,473,070.22 |
6. Other receivables
| Items | Closing Balance | Opening Balance |
| Dividends receivable | 3,856,753.95 | 14,495.00 |
| Other receivable | 44,726,062.04 | 41,381,728.27 |
| Total | 48,582,815.99 | 41,396,223.27 |
(1) Dividends receivable
1) Classification of Dividends Receivable
| Items(or Investee) | Closing Balance | Opening Balance |
| Wuhan Iron and Steel Co., Ltd. | 14,495.00 | |
| Dalian Bingshan Group Huahuida Financial Leasing Co., Ltd. | 636,409.95 | |
| Jiangsu Jingxue Energy Saving Technology Co., Ltd | 3,220,344.00 | |
| Total | 3,856,753.95 | 14,495.00 |
2)Provision for bad debts
?Applicable ?Not applicable
(2). Other receivables
1) Other receivables categorized by nature
| Nature | Closing Balance | Opening Balance |
| Receivables and Payables | 34,738,561.35 | 33,092,423.14 |
| Guarantee deposits | 29,747,420.17 | 30,103,093.46 |
| Petty cash | 8,401,964.79 | 3,669,152.52 |
| Others | 8,606,067.79 | 11,397,105.01 |
| Total | 81,494,014.10 | 78,261,774.13 |
2) Provision for bad debts
| Provision for bad debts | The first phase | The second phase | The third phase | Total |
| Expected credit losses in the next 12 months | Expected Credit Loss for the duration (No Credit Devaluation) | Expected Credit Loss for the duration (Credit impairment has occurred) | ||
| Balance on January 1, 2024 | 2,343,658.22 | 34,536,387.64 | 36,880,045.86 | |
| The balance of January 1, 2024 in the current period | ||||
| Provision for current period | 115,785.80 | 115,785.80 | ||
| Reversal for current period | 227,879.60 | 227,879.60 | ||
| Others | ||||
| Balance on June 30, 2024 | 2,459,444.02 | 34,308,508.04 | 36,767,952.06 |
Changes in book balances with significant changes in loss provisions in the current period?Applicable ?Not applicableDisclosure by age
| Aging | Closing Balance |
| Within 1 year | 27,950,486.12 |
| 1-2 years | 6,187,521.09 |
| 2-3 years | 7,688,282.27 |
| Over 3 years | 39,667,724.62 |
| 3-4 years | 4,261,745.97 |
| 4-5 years | 26,248,376.58 |
| Over 5 years | 9,157,602.07 |
| Total | 81,494,014.10 |
3) Provisions for bad debts accrued, recovered or reversed in the current periodProvision for bad debts in the current period:
| Category | Opening balance | Change during the year | Closing Balance | |||
| Accrued | Collected/reversed | Written-off | Others | |||
| Provision for bad debts of other receivables | 36,880,045.86 | 112,093.80 | 36,767,952.06 | |||
| Total | 36,880,045.86 | 112,093.80 | 36,767,952.06 | |||
4) Other receivables from the top 5 debtors
| Name | Category | Closing Balance | Aging | % of the total OR | Closing Balance of Provision |
| Top 1 | Current funds | 2,476,894.20 | 2-3 years | 3.04% | 756,691.18 |
| Top 2 | Deposit | 2,392,247.50 | 3-4 years；4-5 years | 2.94% | 1,575,384.95 |
| Top 3 | Deposit | 2,289,088.39 | Within 1 year | 2.81% | 83,780.64 |
| Top 4 | Depositt | 2,000,000.00 | Within 1 year | 2.45% | 73,200.00 |
| Top 5 | Bid bond | 1,500,000.00 | Within 1 year | 1.84% | 54,900.00 |
| Total | 10,658,230.09 | 13.08% | 2,543,956.77 |
7. Prepayments
(1) Aging of prepayments
| Items | Closing Balance | Opening Balance | ||
| Amount | Percentage | Amount | Percentage | |
| Within 1 year | 113,311,496.96 | 81.80% | 133,068,644.50 | 86.75% |
| 1 to 2 years | 16,349,159.19 | 11.80% | 12,010,696.67 | 7.83% |
| 2 to 3 years | 1,850,596.33 | 1.34% | 2,578,747.06 | 1.68% |
| Over 3 years | 7,017,670.13 | 5.06% | 5,730,572.25 | 3.74% |
| Total | 138,528,922.61 | 153,388,660.48 | ||
(2) Prepayments from the top 5 debtors based on closing balance
The sum of top 5 of prepayment is 39,815,722.29 Yuan, represents 28.74% of closing balanceof prepayment.
8. Inventories
(1) Categories of inventories
| Item | Closing Balance | ||
| Book value | Provision for decline | Net book value | |
| Cost to fulfill the contract | 453,842,876.54 | 14,074,313.21 | 439,768,563.33 |
| Finished goods | 406,168,338.21 | 36,966,658.16 | 369,201,680.05 |
| Raw materials | 262,073,826.11 | 31,148,421.11 | 230,925,405.00 |
| Working in progress | 209,044,328.75 | 9,302,035.15 | 199,742,293.60 |
| Self-manufactured semi-finished products | 42,567,703.17 | 42,567,703.17 | |
| Materials on consignment for further processing | 2,374,698.53 | 60,394.18 | 2,314,304.35 |
| Item | Closing Balance | ||
| Book value | Provision for decline | Net book value | |
| Goods on transit | 151,877,178.72 | 247,347.75 | 151,629,830.97 |
| Properties written off debtors | |||
| Low-value consumable | 8,322,237.78 | 8,322,237.78 | |
| Total | 1,536,271,187.81 | 91,799,169.56 | 1,444,472,018.25 |
(Continued)
| Item | Opening Balance | ||
| Book value | Provision for decline | Net book value | |
| Cost to fulfill the contract | 657,703,661.17 | 15,425,401.03 | 642,278,260.14 |
| Finished goods | 524,399,789.91 | 47,832,216.91 | 476,567,573.00 |
| Raw materials | 282,868,685.78 | 31,011,520.30 | 251,857,165.48 |
| Working in progress | 211,744,888.60 | 10,130,805.54 | 201,614,083.06 |
| Goods on transit | 35,347,357.53 | - | 35,347,357.53 |
| Self-manufactured semi-finished products | 21,317,653.86 | 60,394.18 | 21,257,259.68 |
| Materials on consignment for further processing | 8,313,813.04 | 821,759.89 | 7,492,053.15 |
| Properties written off debtors | 2,708,646.00 | 1,149,186.00 | 1,559,460.00 |
| Low-value consumable | 166,267.10 | - | 166,267.10 |
| Total | 1,744,570,762.99 | 106,431,283.85 | 1,638,139,479.14 |
(2) Provision for decline in the value of inventories
| Item | Opening Balance | Increase | Decrease | Closing Balance | ||
| Accrual | Others transferred | Reverse/ Written- off | Others transferred | |||
| Raw materials | 31,011,520.30 | 448,436.77 | 119,847.87 | 191,688.09 | 31,148,421.11 | |
| Working in progress | 10,130,805.54 | -197,486.31 | 631,284.08 | 9,302,035.15 | ||
| Finished goods | 47,832,216.91 | -4,461,266.43 | 5,395,161.04 | 1,009,131.28 | 36,966,658.16 | |
| Cost to fulfill the contract | 15,425,401.03 | 661,488.10 | 48,297.56 | 2,060,873.48 | 14,074,313.21 | |
| Materials on consignment for further processing | 60,394.18 | 60,394.18 | ||||
| Goods on transit | 821,759.89 | 960,833.72 | 1,535,245.86 | 247,347.75 | ||
| Item | Opening Balance | Increase | Decrease | Closing Balance | ||
| Accrual | Others transferred | Reverse/ Written- off | Others transferred | |||
| Properties written off debtors | 1,149,186.00 | -1,149,186.00 | ||||
| Total | 106,431,283.85 | -4,698,013.87 | 1,009,131.28 | 9,742,412.33 | 1,200,819.37 | 91,799,169.56 |
Accrual for provision for decline in the value of inventories
| Item | Basis for net realizable value recognition | Reasons for reverse/write-off |
| Raw materials | The amount deducting the expected cost to product completion, selling expense and relative tax from the estimated selling price. | Sold |
| WIP | Sold | |
| Finished goods | Sold | |
| Cost to fulfill the contract | Sold |
9. Other current assets
| Item | Closing Balance | Opening Balance |
| Input VAT to be deducted | 10,785,442.98 | 18,112,002.39 |
| Contract acquisition cost | 3,454,783.55 | 4,532,291.00 |
| Prepaid income tax presented at net amount after offsetting | 2,790,775.12 | 3,216,096.82 |
| Prepaid VAT | 1,122,081.99 | 198,895.83 |
| Prepaid expenses | 222,730.16 | 15,056.29 |
| Total | 18,375,813.80 | 26,074,342.33 |
10.Long-term equity investments
| Investee | Beginning balance | Increase/Decrease | Ending balance | Provision for impairment | |||||||
| Increased | Decreased | Gains and losses recognized under the equity method | Adjustment of other comprehensive income | Change of other equity | Cash bonus or profits announced to issue | Provision for impairment of the current period | Others | ||||
| Associates | — | — | — | — | — | — | — | — | — | — | — |
| Dalian Honjo Chemical Co., Ltd | 9,892,253.52 | - | - | 15,246.33 | - | - | - | 9,907,499.85 | - | ||
| Keihin-Grand Ocean Thermal Technology (Dalian)Co.,Ltd. | 57,579,975.00 | - | - | -1,810,055.67 | - | - | - | - | 55,769,919.33 | - | |
| Dalian Fuji Bingshan Vending Machine Co., Ltd. | 67,610,418.09 | - | - | 1,246,957.50 | - | - | - | - | 68,857,375.59 | - | |
| MHI Bingshan Refrigeration (Dalian) Co.,Ltd. | 16,543,655.54 | - | - | 86,728.24 | - | - | - | - | 16,630,383.78 | - | |
| Dalian Fuji Bingshan Vending Machine Sales Co., Ltd | - | - | - | - | - | - | - | - | |||
| Jiangsu Jingxue Insulation Technology Co.,Ltd (N4) | 144,354,903.91 | - | - | *.** | - | - | -3,220,344.00 | - | - | *.** | - |
| Dalian Bingshan Metal Technology Co.,Ltd. | 173,250,850.13 | - | - | 14,709,358.00 | - | - | - | - | 187,960,208.13 | - | |
| Dalian Bingshan Group Huahuida Financial Leasing Co., Ltd | 46,050,456.55 | - | - | *.** | - | - | -636,409.95 | - | - | *.** | - |
| Wuhan Sikafu Power Control Equipment Co., Ltd | 5,992,434.76 | - | - | 236,717.06 | - | - | - | - | 6,229,151.82 | - | |
| Total | 521,274,947.50 | - | - | 17,218,698.46 | - | - | -3,856,753.95 | - | 534,636,892.01 | - | |
11.Other non-current financial assets
| Item | Closing Balance | Opening Balance |
| Financial assets classified as FVTPL | 149,514,460.99 | 164,024,771.63 |
| Including: equity instruments | 149,514,460.99 | 164,024,771.63 |
| Total | 149,514,460.99 | 164,024,771.63 |
12. Investment property
(1) Investment property measured as cost model
| Item | Property& building | Land-use-rights | Total |
| I. Initial cost | — | — | — |
| 1. opening balance | 246,173,617.85 | 26,094,438.38 | 272,268,056.23 |
| 2. addition | 2,708,646.00 | 2,708,646.00 | |
| (1) FA\transferred from CIP | 2,708,646.00 | 2,708,646.00 | |
| 3. decrease | 2,040,449.10 | 2,040,449.10 | |
| 4. closing balance | 246,841,814.75 | 26,094,438.38 | 272,936,253.13 |
| II. Accumulated depreciation | — | — | — |
| 1. opening balance | 135,327,893.16 | 13,350,481.57 | 148,678,374.73 |
| 2. addition | 3,032,199.55 | 450,573.07 | 3,482,772.62 |
| (1) accrued/amortization | 3,032,199.55 | 450,573.07 | 3,482,772.62 |
| (2) FA\transferred from CIP | |||
| 3. decrease | 1,078,887.94 | 1,078,887.94 | |
| 4. closing balance | 137,281,204.77 | 13,801,054.64 | 151,082,259.41 |
| III. Impairment reserve | — | — | — |
| 1. opening balance | - | - | - |
| 2. addition | 1,149,186.00 | 1,149,186.00 | |
| 3. decrease | - | - | - |
| 4. closing balance | 1,149,186.00 | 1,149,186.00 | |
| IV. Book value | — | — | — |
| 1. Closing book value | 108,411,423.98 | 12,293,383.74 | 120,704,807.72 |
| 2. Opening book value | 110,845,724.69 | 12,743,956.81 | 123,589,681.50 |
(3) Investment property without ownership certificate
| Item | Book value | Reason |
| Plant | 11,948,814.34 | Because the land use right and the plant’s ownership belong to different person, the deed of the plant was not obtained. In 2023, the land use right is obtained, the certificate of the plant ownership is in progress |
| Rihang Apartment | 2,160,406.10 | The documents are not ready in full, the certificate of the building ownership can not be dealt with |
13. Fixed assets
| Items | Closing Book Value | Opening Book Value |
| Fixed asset | 1,253,644,762.42 | 1,291,851,402.46 |
| Fixed asset disposal | - | - |
| Total | 1,253,644,762.42 | 1,291,851,402.46 |
(1) Fixed assets detail
| Item | Property& buildings | Machinery equipment | Transportation equipment | Other equipment | Total |
| I. Initial cost | — | — | — | — | — |
| 1.Opening balance | 984,762,292.94 | 1,860,863,124.51 | 26,414,272.96 | 248,448,105.42 | 3,120,487,795.83 |
| 2. Increase | 2,922,844.32 | 39,226,092.18 | 1,204,795.64 | 7,794,362.81 | 51,148,094.95 |
| (1) Purchase | 3,041,861.42 | 902,583.25 | 1,153,274.43 | 5,097,719.10 | |
| (2) Transferred from construction-in-progress | 882,395.22 | 36,184,230.76 | 302,212.39 | 6,641,088.38 | 44,009,926.75 |
| (3) Acquired from business combination | |||||
| (4) financial lease | 2,040,449.10 | 2,040,449.10 | |||
| 3. Decrease | 636,530.29 | 111,613,712.10 | 2,179,224.55 | 23,595,006.86 | 138,024,473.80 |
| (1) Disposal | 636,530.29 | 111,613,712.10 | 2,179,224.55 | 23,595,006.86 | 138,024,473.80 |
| (2) transferred int investment property | |||||
| 4.Closing balance | 987,048,606.97 | 1,788,475,504.59 | 25,439,844.05 | 232,647,461.37 | 3,033,611,416.98 |
| II. Accumulated depreciation | — | — | — | — | — |
| 1.Opening balance | 343,048,484.83 | 1,281,264,893.77 | 18,926,836.54 | 169,991,538.16 | 1,813,231,753.30 |
| 2. Increase | 11,144,597.59 | 48,424,088.72 | 654,511.37 | 4,530,800.14 | 64,753,997.82 |
| (1) Accrued | 10,065,709.65 | 48,424,088.72 | 654,511.37 | 4,530,800.14 | 63,675,109.88 |
| (2) Acquired from business combination | |||||
| (3) financial lease | 1,078,887.94 | 1,078,887.94 |
| Item | Property& buildings | Machinery equipment | Transportation equipment | Other equipment | Total |
| 3. Decrease | 520,800.09 | 87,390,091.46 | 1,375,783.82 | 19,733,764.00 | 109,020,439.37 |
| (1) Disposal | 520,800.09 | 87,390,091.46 | 1,375,783.82 | 19,733,764.00 | 109,020,439.37 |
| (2) transferred int investment property | |||||
| 4.Closing balance | 353,672,282.33 | 1,242,298,891.03 | 18,205,564.09 | 154,788,574.30 | 1,768,965,311.75 |
| III. Impairment reserve | — | — | — | — | — |
| 1.Opening balance | 1,125,906.87 | 10,009,682.05 | 286,519.26 | 3,982,531.89 | 15,404,640.07 |
| 2. Increase | |||||
| (1)Acquired from business combination | |||||
| 3. Decrease | 3,082,763.06 | 1,320,534.20 | 4,403,297.26 | ||
| (1) Disposal | 3,082,763.06 | 1,320,534.20 | 4,403,297.26 | ||
| 4.Closing balance | 1,125,906.87 | 6,926,918.99 | 286,519.26 | 2,661,997.69 | 11,001,342.81 |
| IV.Book value | — | — | — | — | — |
| 1.Closing book value | 632,250,417.77 | 539,249,694.57 | 6,947,760.70 | 75,196,889.38 | 1,253,644,762.42 |
| 2.Opening book value | 640,587,901.24 | 569,588,548.69 | 7,200,917.16 | 74,474,035.37 | 1,291,851,402.46 |
(2) Fixed assets without ownership certificate
| Item | Book value | Reason |
| Self -constructed buildings | 24,654,106.29 | Up to June 30,2024, sum of net book value of the buildings without ownership certificate is 24,654,106.29 Yuan, they are all self-constructed buildings, which is the property of Sonyo Compressor (Dalian)Co., Ltd. Because the land right where the buildings stand on are not obtained, ownership certificate of the buildings are not ready. |
14. Construction-in-progress
| Item | Closing book value | Opening book value |
| Construction-in-progress | 95,741,358.83 | 114,801,351.21 |
| Construction materials | - | |
| Total | 95,741,358.83 | 114,801,351.21 |
(1) Construction-in-progress details
| Item | Closing balance | Opening balance | ||||
| Book balance | Provision | Book Value | Book balance | Provision | Book value | |
| Buildings & reconstruction | 26,288,761.17 | 26,288,761.17 | 26,282,803.78 | - | 26,282,803.78 | |
| Improvement of machinery | 65,017,811.59 | 65,017,811.59 | 83,833,793.88 | - | 83,833,793.88 | |
| Software of intelligent manufacture | 4,434,786.07 | 4,434,786.07 | 4,684,753.55 | - | 4,684,753.55 | |
| Total | 95,741,358.83 | 95,741,358.83 | 114,801,351.21 | - | 114,801,351.21 | |
(2) Change in the significant construction in progress
| Name | Opening balance | Increase | Decrease | Closing balance | ||
| Transfer to FA/ Intangible assets | Other decrease | |||||
| Buildings & reconstruction | 24,020,836.00 | 1,082,917.03 | 25,103,753.03 | |||
| Improvement of machinery | 59,648,413.52 | 11,316,124.61 | 29,429,534.50 | 41,535,003.63 | ||
| Total | 83,669,249.52 | 12,399,041.64 | 29,429,534.50 | 66,638,756.66 | ||
(Continued)
| Name | Budget | Percent of investment against budget | Progress of construction | Accumulated capitalized interest | Including: accumulated capitalized interest of the year | Interest capitalization Rate | Source of funds |
| Buildings & reconstruction | 29,847,212.07 | 84.11% | 84.11% | - | - | - | Self- financing |
| Improvement of machinery | 61,976,842.27 | 67.02% | 67.02% | - | - | - | Self- financing |
| Total | 91,824,054.34 | — | — | — | — | — | — |
15. Right-of-use assets
| Item | Property/ buildings | Machinery | Transportation equipment | Electronic equipment | Land use right | Total |
| I. Initial cost | — | — | — | — | — | — |
| 1.Opening balance | 22,301,098.69 | 1,500,407.13 | 996,991.93 | 15,403,548.97 | 40,202,046.72 | |
| 2. Increase | 347,837.26 | 172,876.68 | 350,368.66 | 871,082.60 | ||
| (1) lease in | 347,837.26 | 172,876.68 | 350,368.66 | 871,082.60 | ||
| (2) business combination | ||||||
| 3. Decrease | 1,890,701.96 | 1,890,701.96 | ||||
| (1) Disposal | 1,890,701.96 | 1,890,701.96 | ||||
| (2) transferred into FA | ||||||
| 4.Closing balance | 20,758,233.99 | 1,500,407.13 | 172,876.68 | 1,347,360.59 | 15,403,548.97 | 39,182,427.36 |
| II. Accumulated amortization | ||||||
| 1.Opening balance | 5,090,415.92 | 637,746.67 | 162,220.54 | 3,763,606.51 | 9,653,989.64 | |
| 2. Increase | 3,286,620.55 | 893,316.69 | 48,405.49 | 111,330.62 | 709,689.66 | 5,049,363.01 |
| (1) Accrued | 3,286,620.55 | 893,316.69 | 48,405.49 | 111,330.62 | 709,689.66 | 5,049,363.00 |
| (2) business combination | ||||||
| 3. Decrease | 1,247,272.25 | 1,247,272.25 | ||||
| (1) Disposal | 1,247,272.25 | 1,247,272.25 | ||||
| (2) transferred into FA | ||||||
| 4.Closing balance | 7,129,764.22 | 1,531,063.36 | 48,405.49 | 273,551.16 | 4,473,296.17 | 13,456,080.40 |
| Item | Property/ buildings | Machinery | Transportation equipment | Electronic equipment | Land use right | Total |
| III. Impairment reserve | — | — | — | — | — | — |
| 1. Opening balance | - | - | - | - | - | - |
| 2. Increase | - | - | - | - | - | - |
| 3. Decrease | - | - | - | - | - | - |
| 4.Closing balance | - | - | - | - | - | - |
| IV. Book value | — | — | — | — | — | — |
| 1. Closing book value | 13,628,469.77 | -30,656.23 | 124,471.19 | 1,073,809.43 | 10,930,252.80 | 25,726,346.96 |
| 2. Opening book value | 17,210,682.77 | 862,660.46 | 834,771.39 | 11,639,942.46 | 30,548,057.08 |
16. Intangible assets
| Item | Land use right | Patent | Non- Patent | Others | Total |
| I. Initial cost | — | — | — | — | — |
| 1.Opening balance | 240,905,737.40 | 17,630,188.82 | 5,773,680.00 | 74,249,345.48 | 338,558,951.70 |
| 2. Increase | 234,044.24 | 234,044.24 | |||
| (1) Purchase | |||||
| (2) Transferred from construction-in-progress | - | 234,044.24 | - | ||
| (3) increase via merge | |||||
| 3. Decrease | - | - | - | 5,700.00 | 5,700.00 |
| (1) Disposal | - | - | - | 5,700.00 | 5,700.00 |
| 4.Closing balance | 240,905,737.40 | 17,864,233.06 | 5,773,680.00 | 74,534,754.18 | 339,078,404.64 |
| II. Accumulated amortization | — | — | — | — | — |
| 1.Opening balance | 71,901,377.46 | 10,470,188.25 | 4,773,708.00 | 40,847,535.60 | 127,992,809.31 |
| 2. Increase | 1,689,106.10 | 1,901,733.62 | 250,002.00 | 2,715,079.79 | 6,555,921.51 |
| (1) Accrued | 1,689,106.10 | 1,901,733.62 | 250,002.00 | 2,715,079.79 | 6,555,921.51 |
| (2) Increase from merger | 5,700.00 | 5,700.00 | |||
| 3. Decrease | 5,700.00 | 5,700.00 | |||
| (1) Disposal | |||||
| 4.Closing balance | 73,590,483.56 | 12,371,921.87 | 5,023,710.00 | 43,556,915.39 | 134,543,030.82 |
| III. Impairment provision | — | — | — | — | — |
| 1. Opening balance | 11,981.17 | 11,981.17 | |||
| 2. Increase | |||||
| (1) Increase from merger | |||||
| 3. Decrease | |||||
| (1) Disposal | |||||
| 4.Closing balance | 11,981.17 | 11,981.17 | |||
| IV. Book value | — | — | — | — | — |
| 1. Closing book value | 167,315,253.84 | 5,492,311.19 | 749,970.00 | 30,965,857.62 | 204,523,392.65 |
| 2. Opening book value | 169,004,359.94 | 7,160,000.57 | 999,972.00 | 33,389,828.71 | 210,554,161.22 |
17. Goodwill
(1) Original cost of goodwill
| Name | Opening Balance | Increased during current year | Decreased during current year | Closing Balance | ||
| Enterprises merger increase | Other | Disposal | Other | |||
| Sonyo Compressor (Dalian)Co., Ltd | 240,922,872.80 | - | - | - | - | 240,922,872.80 |
| Sonyo Refrigeration (Dalian) Co., Ltd.(N1) | 38,056,663.52 | - | - | - | 38,056,663.52 | |
| Sonyo Refrigeration System (Dalian) Co., Ltd. | 5,671,836.12 | - | - | - | 5,671,836.12 | |
| Dalian Universe Thermal Technology Co., Ltd. | 1,440,347.92 | - | - | - | 1,440,347.92 | |
| Dalian Bingshan Group Engineering Co., Ltd | 310,451.57 | - | - | - | 310,451.57 | |
| Total | 286,402,171.93 | - | - | - | 286,402,171.93 | |
(2) Goodwill impairment provision
In the year 2015, the book value of equity investment of Dalian Universe Thermal TechnologyCo., Ltd exceeds the fair value of the proportion of the acquired company’s identifiable net asset. Thedifference between the book value of equity investment of 48, 287,589.78 Yuan and the identifiablenet asset’s fair value of Dalian Sanyo High-efficient Refrigeration System Co., Ltd of 46,847,241.86Yuan on the acquisition date of July 31
st
,2015 is recognized as goodwill of 1,440,347.92 Yuan on TheCompany consolidated financial report at the end of the year.
In the year 2016, Dalian Bingshan Group Engineering Co., Ltd purchases shares of DalianBingshan Baoan Leisure Industry Co., Ltd and gains control. The transferred price is based on the netasset of Dalian BingshanBaoan Leisure Industry Co., Ltd on June 30
th, 2016. Negotiated with DalianBingshan Baoan Leisure Industry Co., Ltd’s shareholder Baoan Water Project (China) LimitedCompany, the transfer price is the combination cost on the purchasing date which is 5,359,548.42 Yuan,the fair value of proportion of Dalian BingshanBaoan Leisure Industry Company’s identifiable netasset is 5,049,096.85 Yuan on the purchasing day, therefore, goodwill is 310,451.57Yuan on thepurchasing date. Dalian Bingshan Group Engineering Co., Ltd absorbed Dalian Bingshan BaoanLeisure Industry Co., Ltd in 2019.
In 2022, the Company purchased 60% of the shareholdings of Sonyo Compressor (Dalian)Co.,Ltd from Sanyo Electric (China)Co., Ltd, and negotiated with Sanyo Electric (China)Co., Ltd todetermine the share transfer consideration of 929,148,000.00 Yuan. After the transaction, SonyoCompressor (Dalian)Co., Ltd became a subsidiary. This transaction is a business combination notunder same control, cost of combination is the FV of previous shareholdings on acquisition date plus60% shareholdings acquisition consideration, which is 1,548,580,000Yuan in total. Goodwill of240,922,872.80 Yuan is recognized for the difference between the share of FV of net identifiable assetof acquiree, 1,307,657,127.20Yuan and cost of combination on acquisition date.
In 2022, the Company purchased 30% of the shareholdings of Sonyo Refrigeration System(Dalian) Co., Ltd. from Panasonic Corporation of china Co., LTD and 25% shareholdings of Sonyo
Refrigeration System (Dalian) Co., Ltd from Panasonic Appliances cold Chain (Dalian)Co.Ltd. Thenegotiated share transfer consideration of 81,735,060.00 Yuan. After the transaction, SonyoCompressor (Dalian)Co., Ltd became a subsidiary. This transaction is a business combination notunder same control, cost of combination is the FV of previous shareholdings on acquisition date plus55% shareholdings acquisition consideration, which is 111,456,900.00Yuan in total. Goodwill of5,671,836.12 Yuan is recognized for the difference between the share of FV of net identifiable asset ofacquire, 105,785,063.87Yuan and cost of combination on acquisition date.In 2023, the Company purchased 40% of the shareholdings of Sonyo Refrigeration (Dalian) Co.,Ltd. from Panasonic Corporation of China Co., LTD and 60% shareholdings of Sonyo Refrigeration(Dalian) Co., Ltd from Sanyo Electric (China)Co., Ltd. This transaction is a business combination notunder same control, cost of combination is the consideration of 145,285,500.00 Yuan for share transfer.Goodwill of 38,056,663.52Yuan is recognized for the difference between the share of FV of netidentifiable asset of acquire. 107,228,836.48Yuan and cost of combination on acquisition date.The book value of goodwill from business combination shall be allocated into the relevant assetgroup using the reasonable method since acquisition date, and be tested for impairment on related assetgroups containing goodwill by professional appraisal companies or use evaluation models to predictthe recoverable amount of related asset groups containing goodwill in accordance with the presentvalue of future cash flows including gross profit rate, sales growth rate (1%-8%), discountrate(10.74%-11.62%) and other parameters in the next 5 years. No goodwill impairment has beenfound when the recoverable amount of asset group for testing is higher than its book value.
18. Long-term unamortized expense
| Item | Opening Balance | Increase | Amortization | Other Decrease | Closing balance |
| Greenland of new factory | 3,048,061.06 | - | 60,473.82 | - | 2,987,587.24 |
| Employee’s dormitory use right | 1,458,257.10 | - | 61,910.34 | - | 1,396,346.76 |
| Membership fee for golf | 374,000.00 | - | 8,250.00 | - | 374,000.00 |
| Renovation and rebuilding | 142,091.33 | 2,140,100.03 | 662,892.59 | - | 1,619,298.77 |
| Amortization of instruments | 315,236.61 | 34,159.28 | 53,233.74 | - | 287,912.15 |
| Technology entrance fee of cold and heat machinery | 8,675.50 | 4,004.10 | - | 4,671.40 | |
| Total | 5,346,321.60 | 2,174,259.31 | 850,764.59 | - | 6,669,816.32 |
19. Deferred tax assets and deferred tax liabilities
(1) Deferred tax assets without offsetting
| Item | Closing balance | Opening balance | ||
| Deductible temporary difference | Deferred tax assets | Deductible temporary difference | Deferred tax assets | |
| Provision for impairment of assets | 158,107,274.82 | 23,879,587.90 | 153,519,850.70 | 23,185,410.37 |
| Unrealized profit from internal transaction | 13,034,503.47 | 1,955,175.52 | 13,034,503.47 | 1,955,175.52 |
| Provision for credit impairment | 469,307,071.89 | 87,157,474.76 | 445,951,688.75 | 81,048,834.24 |
| Lease liability | 48,162,137.72 | 7,224,320.65 | 52,799,814.74 | 8,006,670.79 |
| FA depreciation | 48,341,817.50 | 7,251,272.62 | 48,341,817.47 | 7,251,272.60 |
| Accrued sales discount | 17,125,319.07 | 2,568,797.86 | 17,125,319.07 | 2,568,797.86 |
| Unrealized revenue | 11,170,890.18 | 2,792,722.55 | 11,170,890.18 | 2,792,722.55 |
| Deductible loss | 11,170,890.18 | 2,792,722.55 | 4,544,802.83 | 714,830.47 |
| Safety cost | 4,544,802.58 | 714,830.47 | 449,375.00 | 67,406.25 |
| Others | 449,374.99 | 67,406.25 | 1,138,175.07 | 170,726.26 |
| Total | 770,243,192.22 | 133,611,588.58 | 748,076,237.28 | 127,761,846.91 |
(2) Deferred tax liabilities without offsetting
| Item | Closing balance | Opening balance | ||
| Taxable temporary difference | Deferred tax liabilities | Taxable temporary difference | Deferred tax liabilities | |
| Revaluation increase in business combination asst not under same control | 226,989,506.93 | 36,614,853.11 | 253,978,835.91 | 38,096,825.39 |
| Change on FV of other non-current financial assets | 147,830,608.40 | 20,538,090.09 | 151,430,911.13 | 22,714,636.67 |
| FA depreciation | 44,399,117.74 | 6,659,867.65 | 44,655,750.06 | 6,698,362.51 |
| Use right of asset | 47,422,042.57 | 7,198,246.23 | 48,864,566.94 | 7,414,624.88 |
| Total | 466,641,275.64 | 71,011,057.08 | 498,930,064.04 | 74,924,449.45 |
(3) Net deferred tax asset or liability
| Item | Offset amount at the year-end | Closing balance of net of DTA/DTL | Offset amount at the beginning of the year | Opening balance of net of DTA/DTL |
| Deferred tax assets | 13,858,113.88 | 117,187,047.63 | 14,112,987.38 | 113,648,859.53 |
| Deferred tax liabilities | 13,858,113.88 | 54,586,516.13 | 14,112,987.38 | 60,811,462.07 |
(4) Unrecognized deferred tax assets details
| Item | Closing balance | Opening balance |
| Deductible temporary difference | 238,347,385.17 | 227,656,543.59 |
| Deductible loss | 540,443,485.76 | 553,968,553.34 |
| Total | 778,790,870.93 | 781,625,096.93 |
(5) Unrecognized deductible loss of deferred tax assets expired years
| Year | Closing balance | Opening balance | Notes |
| 2024 | 7,735,166.14 | 7,735,166.14 | — |
| 2025 | 8,950,922.50 | 8,950,922.50 | — |
| 2026 | 54,629,003.37 | 54,629,003.37 | — |
| 2027 | 67,364,986.52 | 67,364,986.52 | — |
| 2028 | 50,668,863.57 | 55,969,301.70 | — |
| 2029 | 39,791,411.14 | 39,791,411.14 | — |
| 2030 | 11,891,689.57 | 7,689,545.97 | — |
| 2031 | 148,080,122.08 | 126,221,649.87 | — |
| 2032 | 30,573,496.42 | 44,819,905.64 | — |
| 2033 | 120,757,824.45 | 140,796,660.49 | — |
| Total | 540,443,485.76 | 553,968,553.34 | — |
20. Other non-current asset
| Category | Closing Balance | Opening balance | ||||
| Book value | Provision | Carrying amount | Book value | Provision | Carrying amount | |
| Debt offset housing | 21,770,721.00 | 1,527,371.56 | 20,243,349.44 | 21,770,721.00 | 1,527,371.56 | 20,243,349.44 |
| Total | 21,770,721.00 | 1,527,371.56 | 20,243,349.44 | 21,770,721.00 | 1,527,371.56 | 20,243,349.44 |
21. Assets with restricted ownership or use rights
| Item | At the period end | |||
| Book value | Carrying amount | Type | Restriction | |
| Monetary fund | 61,389,225.45 | 61,389,225.45 | Frozen | Guarantee deposit/ frozen bank account |
| Notes receivable | 9,019,138.38 | 9,019,138.38 | Pledged | Pledged |
| Financing of receivable | 93,473,070.22 | 93,473,070.22 | Pledged | Pledged |
| FA | 96,317,982.43 | 64,407,217.20 | Pledged | Pledged |
| Intangible asset | 8,266,573.44 | 5,339,198.53 | Pledged | Pledged |
| Investment property | 39,307,513.52 | 31,767,806.11 | Pledged | Pledged |
| Total | 307,773,503.44 | 265,395,655.89 | — | — |
(continued)
| Item | At the beginning of the period | |||
| Book value | Carrying amount | Type | Restriction | |
| Monetary fund | 110,277,531.37 | 110,277,531.37 | Frozen | Guarantee deposit/ frozen bank account |
| Notes receivable | 4,939,655.20 | 4,939,655.20 | Pledged | Pledged |
| Financing of receivable | 99,078,000.87 | 99,078,000.87 | Pledged | Pledged |
| FA | 89,720,897.99 | 60,540,912.88 | Pledged | Pledged |
| Intangible asset | 8,266,573.44 | 5,421,865.27 | Pledged | Pledged |
| Investment property | 38,955,728.90 | 32,097,825.31 | Pledged | Pledged |
| Total | 351,238,387.77 | 312,355,790.90 | — | — |
22. Short-term borrowing
(1) Category of short-term borrowing
| Loan category | Closing balance | Opening balance |
| Credit loan | 288,761,386.17 | 256,686,746.70 |
| Factoring loan | 2,976,345.47 | |
| Pledged loan | 2,624,692.21 | |
| Total | 288,761,386.17 | 262,287,784.38 |
23. Notes payable
| Notes Category | Closing balance | Opening balance |
| Bank acceptance notes | 473,387,058.60 | 670,720,999.48 |
| Commercial acceptance notes | - | |
| Total | 473,387,058.60 | 670,720,999.48 |
24. Accounts payable
| Item | Closing balance | Opening balance |
| Material payments | 858,168,853.48 | 931,983,444.51 |
| Project payments | 718,516,448.54 | 675,076,736.92 |
| Equipment payments | 82,234,334.87 | 43,234,911.60 |
| Others | 54,480,174.96 | 5,540,269.98 |
| Item | Closing balance | Opening balance |
| Total | 1,713,399,811.85 | 1,655,835,363.01 |
25. Other accounts payable
| Item | Closing balance | Opening balance |
| Interest payable | - | - |
| Dividend payable | 28,169,531.21 | 533,156.00 |
| Other accounts payable | 245,683,815.03 | 278,270,996.17 |
| Total | 273,853,346.24 | 278,804,152.17 |
25.1 Dividend payable
| Item | Closing balance | Opening balance |
| Ordinary share dividend | 28,169,531.21 | 533,156.00 |
| Total | 28,169,531.21 | 533,156.00 |
25.2 Other accounts payable
(1) Other payables categorized by payments nature
| Payments nature | Closing balance | Opening balance |
| Supplier platform | 179,831,763.69 | 179,737,197.47 |
| Apply for reimbursement and unpaid | 12,025,209.42 | 24,617,613.80 |
| Payable factoring | 10,731,132.68 | 22,407,941.90 |
| Cash pledge and security deposit | 16,109,515.90 | 14,448,796.02 |
| Agency fees | 7,611,936.96 | 5,317,884.69 |
| Repair | 2,258,382.73 | 4,676,404.47 |
| Trade mark and royalty | 3,478,520.00 | 2,531,401.13 |
| Receipts under custody | 1,648,291.27 | 830,631.83 |
| Others | 11,989,062.38 | 23,703,124.86 |
| Total | 245,683,815.03 | 278,270,996.17 |
26. Contract liability
(1) Contract liability
| Item | Closing balance | Opening balance |
| Received in advance due from unrealized revenue | 659,709,451.48 | 787,685,294.53 |
| Total | 659,709,451.48 | 787,685,294.53 |
(2) Contract liability over 1 year
| Item | Closing balance | Unsettled reason |
| Company 2 | 26,296,421.13 | Not complete yet |
| Total | 26,296,421.13 | — |
27. Employee’s payable
(1) Category of employee’s payable
| Item | Opening balance | Increase | Decrease | Closing balance |
| Short-term employee’s payable | 149,352,510.11 | 330,503,868.23 | 403,077,969.02 | 76,778,409.32 |
| Post-employment benefit –defined contribution plan | 11,203.35 | 32,065,281.62 | 32,065,281.62 | 11,203.35 |
| Termination benefits | 133,400.00 | 1,872,401.09 | 1,496,143.09 | 509,658.00 |
| Total | 149,497,113.46 | 364,441,550.94 | 436,639,393.73 | 77,299,270.67 |
(2) Short-term employee’s payables
| Item | Opening balance | Increase | Decrease | Closing balance |
| Salaries, bonus, allowance, and subsidy | 136,231,457.30 | 261,568,825.93 | 331,712,678.52 | 66,087,604.71 |
| Welfare | - | 12,307,531.53 | 12,307,531.53 | |
| Social insurance | 6,925.69 | 27,341,233.60 | 27,341,233.60 | 6,925.69 |
| Include: Medical insurance | 6,654.11 | 22,612,308.30 | 22,612,308.30 | 6,654.11 |
| On-duty injury insurance | 70,609.85 | 70,609.85 | ||
| Maternity insurance | 271.58 | 2,402,446.78 | 2,402,446.78 | 271.58 |
| Housing funds | 178,155.98 | 24,388,299.94 | 24,386,364.70 | 180,091.22 |
| Labor union and training expenses | 4,008,680.40 | 4,897,977.23 | 6,553,281.69 | 2,353,375.94 |
| Reward bonus and welfare fund | 8,927,290.74 | 776,878.98 | 8,150,411.76 | |
| Total | 149,352,510.11 | 330,503,868.23 | 403,077,969.02 | 76,778,409.32 |
(3) Defined contribution plan
| Item | Opening balance | Increase | Decrease | Closing balance |
| Pension | 10,863.84 | 31,054,696.84 | 31,054,696.84 | 10,863.84 |
| Unemployment insurance | 339.51 | 1,010,584.78 | 1,010,584.78 | 339.51 |
| Total | 11,203.35 | 32,065,281.62 | 32,065,281.62 | 11,203.35 |
28. Tax payable
| Item | Closing balance | Opening balance |
| Value-added tax | 6,308,999.33 | 5,013,411.92 |
| Enterprise income tax | 11,775,937.57 | 10,958,503.00 |
| Individual income tax | 232,314.80 | 514,426.82 |
| City maintenance and construction tax | 947,858.68 | 551,839.60 |
| Real estate tax | 2,588,627.13 | 2,589,711.66 |
| Land use tax | 1,313,306.40 | 1,313,078.49 |
| Stamp duty | 628,754.40 | 879,269.28 |
| Education surcharge | 677,041.94 | 394,171.13 |
| River toll fee | 1,121.91 | 2,080.36 |
| Total | 24,473,962.16 | 22,216,492.26 |
29. Non-current liabilities due within one year
| Item | Closing balance | Opening balance |
| Bond payable due within one year | 144,200,000.00 | 119,400,000.00 |
| Long-term payable due within one year | 14,407,861.78 | 24,636,926.13 |
| Lease obligation due within one year | 8,779,946.91 | 6,608,421.51 |
| Total | 167,387,808.69 | 150,645,347.64 |
30. Other current liabilities
| Item | Closing balance | Opening balance |
| Notes payable endorsed not derecognized | 131,243,722.64 | 148,957,983.15 |
| Output Vat to be carried forward | 47,163,224.86 | 54,357,881.28 |
| Total | 178,406,947.50 | 203,315,864.43 |
31. Long-term borrowing
(1) Category of long-term borrowing
| Category | Closing Balance | Opening Balance |
| Pledged loan | 595,200,000.00 | 609,700,000.00 |
| Guarantee loan | 70,000,000.00 |
32. Lease obligation
(1) Details of lease obligation
| Category | Closing balance | Opening balance |
| Lease payment | 55,820,322.30 | 38,276,477.18 |
| Less: unrecognized finance expense | 25,268,446.48 | 7,533,068.70 |
| Non-current liability due within 1 year | 8,779,946.91 | 6,608,421.51 |
| Net lease liability | 21,771,928.91 | 24,134,986.97 |
33. Long term accounts payable
| Item | Closing Balance | Opening Balance |
| Long term accounts payable | 3,114,213.58 | 10,331,937.30 |
| Special fund payable | - | - |
| Total | 3,114,213.58 | 10,331,937.30 |
33.1Category by nature
| Nature | Closing Balance | Opening Balance |
| Financial lease borrowings | 3,114,213.58 | 10,331,937.30 |
| Total | 3,114,213.58 | 10,331,937.30 |
34. Provision
| Nature | Closing Balance | Opening Balance | Reason |
| Warranty | 5,260,925.79 | 4,544,802.88 | Service after sales |
| Open litigation | - | - | — |
| Total | 5,260,925.79 | 4,544,802.88 | — |
35. Deferred income
(1) Category of deferred income
| Item | Opening Balance | Increase | Decrease | Closing Balance |
| Government subsidy | 98,274,267.80 | 8,851,270.31 | 11,539,580.15 | 95,585,957.96 |
| Total | 98,274,267.80 | 8,851,270.31 | 11,539,580.15 | 95,585,957.96 |
36.Share capital
| Total | 595,200,000.00 | 679,700,000.00 |
| Item | Opening balance | Increase/decrease（+/-） | Closing balance | ||||
| New share issued | Share dividend | Transfer from capital reserve | others | Subtotal | |||
| Total share capital | 843,212,507.00 | - | - | - | - | - | 843,212,507.00 |
37.Capital reserves
| Items | Opening Balance | Increase | Decrease | Closing Balance |
| Share premium | 669,193,413.27 | - | - | 669,193,413.27 |
| Other capital reserves | 47,903,685.11 | - | - | 47,903,685.11 |
| Total | 717,097,098.38 | - | - | 717,097,098.38 |
38.Other comprehensive income
| Items | Opening Balance | 2024.1-6 | Closing Balance | ||||
| Amount for the period before income tax | Less：Previously recognized in profit or loss into other comprehensive income | Less：income tax | After-tax attribute to the parent company | After-tax attribute to minority shareholder | |||
| I.Later can’t reclassified into profit and loss of other comprehensive income | - | - | - | - | - | - | - |
| II. Later reclassified into profit and loss of other comprehensive income | 2,208,669.73 | - | - | - | - | - | 2,208,669.73 |
| Other comprehensive income that can be transferred to profit or loss under the equity method | 2,208,669.73 | - | - | - | - | - | 2,208,669.73 |
| Other comprehensive income total | 2,208,669.73 | - | - | - | - | - | 2,208,669.73 |
39. Special reserve
| Item | Opening Balance | Increase | Decrease | Closing Balance |
| Manufacturing safety | 449,374.96 | 1,653,011.07 | 880,467.00 | 1,221,919.03 |
| Total | 449,374.96 | 1,653,011.07 | 880,467.00 | 1,221,919.03 |
40.Surplus reserves
| Item | Opening Balance | Increase | Decrease | Closing Balance |
| Statutory surplus reserve | 373,398,755.92 | 373,398,755.92 | ||
| Discretionary surplus reserve | 493,760,683.42 | 20,853,061.88 | 514,613,745.30 | |
| Total | 867,159,439.34 | 20,853,061.88 | 888,012,501.22 |
41.Undistributed profits
| Item | 2024-06-30 | 2023-06-30 |
| Closing balance of last year | 617,386,488.34 | 618,445,922.58 |
| Add: Adjustments to the opening balance of undistributed profits | -65,810.05 | |
| Including: additional retrospective adjustments according to the new accounting standards | - | |
| Change on accounting policy | -65,810.05 | |
| Correction of prior period significant errors | - | |
| Change on combination scope under same control | - | |
| Other factors | - | |
| Opening balance of current year | 617,386,488.34 | 618,380,112.53 |
| Add: net profit attributable to shareholders of parent company in the year | 49,375,900.83 | |
| Less: Provision for statutory surplus reserves | 10,426,530.94 | |
| Provision for any surplus reserves | 20,853,061.88 | 31,510,869.01 |
| Provision of general risk | - | |
| Dividends payable for common shares | 25,296,375.21 | 8,432,125.07 |
| Common stock dividends converted to equity | - | |
| Others | - | |
| Closing balance of current year | 649,767,029.17 | 617,386,488.34 |
42.Operating revenue and cost
(1) Details
| Items | 2024.01-06 | 2023.01-06 | ||
| Sales revenue | Cost of sales | Sales revenue | Cost of sales | |
| Revenue from principle operation | 2,386,331,445.01 | 2,024,384,701.81 | 2,270,473,198.19 | 1,911,835,081.08 |
| Revenue from other operation | 76,945,904.69 | 33,520,104.93 | 57,063,514.86 | 29,500,449.34 |
| Total | 2,463,277,349.70 | 2,057,904,806.74 | 2,327,536,713.05 | 1,941,335,530.42 |
(2) Main revenue and COS details
| Contract classification | Northeast China | Central China | Total | |||
| Sales revenue | Cost of sales | Sales revenue | Cost of sales | Sales revenue | Cost of sales | |
| Classified by products | 2,359,095,419.78 | 1,976,383,349.72 | 104,181,929.92 | 81,521,457.02 | 2,463,277,349.70 | 2,057,904,806.74 |
| Manufacture products | 1,634,662,922.44 | 1,331,335,419.87 | 82,022,403.31 | 69,732,357.40 | 1,716,685,325.75 | 1,401,067,777.27 |
| Project installation | 646,726,293.92 | 605,493,229.78 | 12,933,786.12 | 9,013,513.54 | 659,660,080.04 | 614,506,743.32 |
| Other products and service | 77,706,203.42 | 39,554,700.07 | 9,225,740.49 | 2,775,586.08 | 86,931,943.91 | 42,330,286.15 |
| Classified by geography location | 2,359,095,419.78 | 1,976,383,349.72 | 104,181,929.92 | 81,521,457.02 | 2,463,277,349.70 | 2,057,904,806.74 |
| domestic | 2,007,361,543.80 | 1,702,402,117.66 | 104,181,929.92 | 81,521,457.02 | 2,111,543,473.72 | 1,783,923,574.68 |
| overseas | 351,733,875.98 | 273,981,232.06 | - | - | 351,733,875.98 | 273,981,232.06 |
| Timing of goods transferred | 2,359,095,419.78 | 1,976,383,349.72 | 104,181,929.92 | 81,521,457.02 | 2,463,277,349.70 | 2,057,904,806.74 |
| At a point | 2,343,039,094.08 | 1,961,997,073.96 | 104,181,929.92 | 81,521,457.02 | 2,447,221,024.00 | 2,043,518,530.98 |
| Over the time | 16,056,325.70 | 14,386,275.76 | - | - | 16,056,325.70 | 14,386,275.76 |
| Total | 2,359,095,419.78 | 1,976,383,349.72 | 104,181,929.92 | 81,521,457.02 | 2,463,277,349.70 | 2,057,904,806.74 |
43.Taxes and surcharges
| Items | 2024.01-06 | 2023.01-06 |
| City construction tax | 4,191,721.90 | 5,012,891.14 |
| Education surcharge | 2,740,655.69 | 3,301,354.09 |
| Property tax | 5,346,186.58 | 4,723,080.56 |
| Land use tax | 2,714,905.32 | 2,298,123.17 |
| Vehicle and vessel tax | 49,121.12 | 25,563.36 |
| Stamp duty | 1,389,274.77 | 1,468,333.41 |
| Others | 257,847.91 | 380,239.90 |
| Total | 16,689,713.29 | 17,209,585.63 |
44 Administrative expenses
| Items | 2024.01-06 | 2023.01-06 |
| Employee benefit | 62,779,122.02 | 53,003,618.73 |
| Official expense | 12,880,098.25 | 15,910,410.28 |
| Depreciation expense | 12,380,628.31 | 8,217,650.71 |
| Maintenance and repair expense | 2,660,876.68 | 6,583,200.78 |
| Long-term assets amortization | 4,696,609.89 | 4,936,405.08 |
| Travel expense | 2,907,381.61 | 2,422,233.31 |
| Design consultant and test service expense | 6,150,789.45 | 2,380,415.42 |
| Safety production cost | 1,286,894.88 | 1,623,788.07 |
| Business entertaining expense | 1,358,411.52 | 867,329.66 |
| Insurance expense | 1,050,875.97 | 530,569.43 |
| Advertisement expense | 317,148.02 | 189,697.37 |
| Transportation expense | 5,558.70 | 6,098.57 |
| Other taxes and fee | 1,067,493.02 | |
| Technology development expense | 25,630.70 | |
| Patent trade mark use | 5,813,169.52 | 4,282,306.43 |
| Other expense | 7,210,817.25 | 1,468,461.93 |
| Total | 121,498,382.07 | 103,515,309.49 |
45.Selling expenses
| Items | 2024.01-06 | 2023.01-06 |
| Employee benefit | 70,800,262.71 | 59,354,505.34 |
| Official business expense | 8,848,020.72 | 8,819,360.04 |
| Maintenance and repair expense | 6,826,899.98 | 7,646,873.54 |
| Travel expense | 9,885,383.72 | 9,530,742.36 |
| Business entertaining expense | 5,864,137.26 | 5,902,755.80 |
| Advertisement and bids expense | 2,944,327.33 | 2,876,171.77 |
| Depreciation expense | 1,228,970.66 | 459,564.35 |
| Transportation expense | 1,630,180.10 | |
| Other expense | 3,761,988.98 | 1,991,491.72 |
| Total | 110,159,991.36 | 98,211,645.02 |
46.Technology development expense
| Items | 2024.01-06 | 2023.01-06 |
| Employee benefit | 49,067,952.99 | 47,345,348.39 |
| Raw material | 11,856,892.82 | 6,471,854.49 |
| Depreciation and amortization expense | 7,715,801.12 | 3,474,989.41 |
| Expenses for intermediate tests and product trial production | 2,138,988.55 | 4,825,843.30 |
| Patent application maintenance expense | 2,056,213.48 | 2,277,613.96 |
| Consulting expense | 1,846,639.56 | 1,428,004.16 |
| Other expense | 3,862,373.95 | 2,805,164.26 |
| Total | 78,544,862.47 | 68,628,817.97 |
47.Financial expenses
| Items | 2024.01-06 | 2023.01-06 |
| Interest expenses | 17,854,195.43 | 19,165,466.43 |
| Less: interest income | 5,243,901.48 | 5,451,984.39 |
| Add: exchange loss | -1,656,875.61 | -1,094,669.21 |
| Add: others expenditure | 1,389,141.42 | 3,458,669.55 |
| Total | 12,342,559.76 | 16,077,482.38 |
48.Other income
| Items | 2024.01-06 | 2023.01-06 |
| Input VAT accelerated deduction | ||
| Government subsidy | 16,801,793.96 | 1,615,317.51 |
| Insurance premium refund | ||
| Personal income tax handling fee refund | 145,820.73 | 180,238.52 |
| Job stability subsidy | 808,165.00 | 19,233.01 |
| VAT deduction for recruiting poor people | ||
| Gain on debt restructuring | ||
| Land and property tax preference | ||
| VAT return | ||
| Total | 17,755,779.69 | 1,814,789.04 |
49.Gain on fair value change e(loss listed as “-”)
| Source of gain on FV change | 2024.01-06 | 2023.01-06 |
| Other noncurrent financial assets | -14,510,310.64 | 4,364,003.20 |
| Total | -14,510,310.64 | 4,364,003.20 |
50.Investment income
| Items | 2024.01-06 | 2023.01-06 |
| Long-term equity investment gain under equity method | 17,218,698.46 | 90,409.95 |
| Gain from disposal of long-term equity investment | ||
| Gain from FV remeasurement of the shares on obtaining control | ||
| Gain from holding of other noncurrent financial assets | 4,364,003.20 | 5,782,304.24 |
| Gain from disposal of other no-current financial assets | ||
| Gain on debt restructuring | 910,520.61 | 975,354.50 |
| Discounting fees for bank acceptance note | ||
| Dividend received for other equity instrument held | ||
| Total | 22,493,222.27 | 6,848,068.69 |
51.Credit impairment loss (loss listed as “-”)
| Items | 2024.01-06 | 2023.01-06 |
| Bad debt loss on notes receivable | -612,136.60 | 514,834.55 |
| Bad debt loss on receivable | -15,906,178.09 | -19,995,280.81 |
| Bad debt loss on other receivable | 112,093.80 | -32,931.60 |
| Bad debt loss on long term receivable | 210,600.00 | |
| Total | -16,406,220.89 | -19,302,777.86 |
52.Assets impairment losses (loss listed as “-”)
| Items | 2024.01-06 | 2023.01-06 |
| Loss on impairment of inventory and cost to fulfill the contract obligation | 3,548,827.87 | -2,121,034.16 |
| Loss of contract asset impairment | 1,369,160.31 | -2,784,100.62 |
| Impairment on other non-current asset | ||
| Impairment on construction in progress | ||
| Total | 4,917,988.18 | -4,905,134.78 |
53.Gain on assets disposal (loss listed as “-”)
| Item | 2024.01-06 | 2023.01-06 |
| Gain on non-current assets disposal | 10,550,303.70 | 51,209.01 |
| Including: gain on non-current assets disposal not classified as held for sale | 10,550,303.70 | 51,209.01 |
| Including: gain on fixed assets disposal | 10,550,303.70 | 51,209.01 |
| gain on intangible assets disposal | ||
| gain on early derecognition of use right asset | -40,830.85 | |
| Total | 10,550,303.70 | 51,209.01 |
54. Non-operating income
（1） Non-operating income list
| Item | 2024.01-06 | 2023.01-06 | Amounts recognized into non-recurring profit or loss for the period |
| Accept donations | 17,838.20 | ||
| Government subsidy | 18,820.00 | ||
| Loss claimed reverse | |||
| Penalty received | 3,067,629.25 | 1,042,969.59 | |
| Payables that cannot be paid | 2,123,403.42 | 2,123,403.42 | |
| Creditor giving up | |||
| Gain on disposal of non-current asset | 1,481.98 | 48,523.49 | |
| Contract withdrawn and received in advance transferred to non-operating income | |||
| Other items | 283,158.78 | 3,159,314.49 | |
| Total | 5,475,673.43 | 4,268,645.77 |
55.Non-operating expenses
| Item | 2024.01-06 | 2023.01-06 | Amounts recognized into non-recurring profit or loss for the period |
| Non-current assets scrap loss | 4,420,396.06 | 1,941,578.53 | |
| Compensation | |||
| Outward donation | 250,000.00 | ||
| Expected loss for open litigation | 516,107.28 | ||
| Others | 572,453.25 | 66,219.46 | |
| Total | 5,508,956.59 | 2,257,797.99 |
56. Income tax expenses
(1) Income tax expenses
| Items | 2024.01-06 | 2023.01-06 |
| Current income tax expenses | 16,005,090.09 | 16,860,971.82 |
| Deferred income tax expenses | -4,728,395.28 | -2,930,700.26 |
| Others | 374,987.78 | |
| Total | 11,651,682.59 | 13,930,271.56 |
(2) Adjustment process of accounting profit and income tax expense
| Items | Current year |
| Consolidated total profit this year | 90,904,513.16 |
| Income tax expenses at applicable tax rate | 13,635,676.97 |
| Effect on subsidiary applied to different tax rate | 1,544,532.63 |
| Effect on prior period income tax adjustment | 1,429,671.34 |
| Effect on non-taxable income | -33,845.90 |
| Effect on non-deductible cost, expense and loss | -701,527.88 |
| Effect on use of deductible loss from unrecognized deferred tax assets in the prior period | -2,371,695.95 |
| Deferred tax assets recognized for prior period temporary difference | -1,412,044.18 |
| Effect on temporary difference or deductible loss from unrecognized deferred tax assets this year | 1,019,997.53 |
| R&D expenditure accelerated deduction | -1,325,109.53 |
| Others | -133,972.44 |
| Income tax expense | 11,651,682.59 |
57. Other comprehensive income
Refer to the note for details.
58. Notes to cash flow statement
(1) Cash relevant to operating activities
1) Cash received relevant to operating activities
| Items | 2024.01-06 | 2023.01-06 |
| Deposit returned | 19,546,006.90 | 24,770,821.75 |
| Financial funds | 6,153,512.71 | 2,325,523.26 |
| Lease premium received | 4,827,543.24 | |
| Government grants | ||
| Interest income | 3,021,045.94 | 1,634,285.14 |
| Receivable from the 3rd party | 160,267.63 |
| Compensation | 498,732.48 | |
| Received travel expense refund | 416,772.56 | 241,258.21 |
| Frozen money refund | 18,333,197.58 | |
| Others | 10,469,902.40 | 23,726,351.36 |
| Total | 63,426,981.44 | 52,698,239.72 |
2) Cash paid relevant to operating activities
| Items | 2024.01-06 | 2023.01-06 |
| Expenditure | 82,964,653.33 | 86,955,990.40 |
| Deposit paid | 25,735,227.66 | 50,746,582.86 |
| Frozen accounts | 1,843,055.00 | |
| Business travel borrowing | 7,177,139.72 | 5,417,669.78 |
| Bank handling charges | 1,611,363.39 | 1,876,929.71 |
| Unsettled AR/AP among non-related party | 608,227.80 | 1,796,642.94 |
| Others | 4,116,301.50 | 5,130,221.28 |
| Total | 124,055,968.40 | 151,924,036.97 |
(2) Cash relevant to investing activities
1) Significant cash received relevant to investing activities
| Items | 2024.01-06 | 2023.01-06 |
| Buy and build long-term assets | 33,848,073.69 |
(3) Cash relevant to financing activities
1) Other cash received relevant to financing activities
| Items | 2024.01-06 | 2023.01-06 |
| Notes payable to supplier | ||
| Sale leaseback and financial lease | 13,464,836.83 | 6,600,000.00 |
| Notes discounted | ||
| Total | 13,464,836.83 | 6,600,000.00 |
2) Others cash paid relevant to financing activities
| Items | 2024.01-06 | 2023.01-06 |
| Payment of guarantee money | ||
| Notes payable to supplier | 29,687,571.06 | - |
| Sale& leaseback and financial lease | 12,217,913.52 | 200,000.00 |
| Payment factoring | 16,703,418.10 | |
| Lease premium payable | 2,031,692.90 | 343,314.14 |
| Finance lease deposit and handling fee | 21,707,260.07 |
| Discount interest on credit letter | ||
| Total | 60,640,595.58 | 22,250,574.21 |
3) Changes on liability relevant to financing activities
| Items | Opening Balance | Increased | Decreased | Closing Balance | ||
| Cash change | Non- cash change | Cash change | Non- cash change | |||
| Short-term borrowings | 262,287,784.38 | 252,063,418.15 | 225,328,358.49 | 261,457.87 | 288,761,386.17 | |
| Long-term borrowings | 679,700,000.00 | 84,500,000.00 | 595,200,000.00 | |||
| Lease liability | 24,134,986.97 | 355,159.87 | 2,381,180.22 | 1,916,425.28 | 3,182,972.87 | 21,771,928.91 |
| Non-current liability due within one year | 150,645,347.64 | 7,981,258.12 | 88,875,016.76 | 64,886,875.32 | 15,226,938.51 | 167,387,808.69 |
| Long-term payable | 10,331,937.30 | 3,114,213.58 | 9,737,082.59 | 594,854.71 | 3,114,213.58 | |
| Other payable-supplier platform | 179,737,197.47 | 77,953,025.81 | 77,858,459.59 | 179,831,763.69 | ||
| Total | 1,306,837,253.76 | 263,514,049.72 | 169,209,222.79 | 379,727,201.27 | 103,766,223.96 | 1,256,067,101.04 |
59. Supplementary information of consolidated cash flow statement
(1) Information
| Items | 2024.01-06 | 2023.01-06 |
| 1. Adjusting net profit into cash flows of operating activities: | —— | —— |
| Net profit | 79,252,830.57 | 59,509,075.65 |
| Add: Provision for impairment of assets | 11,488,232.70 | 24,207,912.64 |
| Provision for impairment of credit | ||
| Depreciation of fixed assets, Amortization of mineral resources, and biological assets | 67,157,882.50 | 66,602,534.41 |
| Depreciation of right-of-use assets | 5,049,363.00 | 7,629,958.28 |
| Amortization of intangible assets | 6,555,921.51 | 5,119,204.71 |
| Amortization of long-term deferred expenses | 850,764.59 | 790,082.45 |
| Losses on disposal of fixed assets, intangible assets, and long-term assets (income listed with”-”) | -10,550,303.70 | -51,209.01 |
| Losses on write-off of fixed assets (income listed with”-”) | 4,418,914.08 | 1,893,055.04 |
| Change of fair value profit or loss | 14,510,310.64 | -4,364,003.20 |
| Financial expense (income listed with”-”) | 17,854,195.43 | 19,165,466.43 |
| Investment loss (income listed with”-”) | -22,493,222.27 | -6,848,068.69 |
| Decrease of deferred tax assets (increase listed with”-”) | -5,849,741.67 | 12,273,911.09 |
| Increase of deferred tax liabilities (decrease listed with”-”) | -3,913,392.37 | -1,393,689.97 |
| Decrease of inventories (increase listed with”-”) | 208,299,575.18 | -169,798,737.23 |
| Decrease of operating receivables (increase listed with”-”) | -72,167,535.80 | -373,658,442.52 |
| Increase of operating payables (decrease listed with”-”) | -333,049,779.14 | 232,128,752.94 |
| Others | ||
| Net cash flows arising from operating activities | -32,585,984.75 | -126,794,196.98 |
| 2. Significant investment and financing activities unrelated to cash income and expenses | — | — |
| Liabilities transferred to capital | - | - |
| Convertible bonds within 1 year | - | - |
| Financing leased fixed assets | - | - |
| Items | 2024.01-06 | 2023.01-06 |
| 3. Net increase (decrease) of cash and cash equivalent | — | — |
| Closing balance of cash | 550,294,029.37 | 828,668,546.58 |
| Less: Opening balance of cash | 670,440,335.98 | 921,663,803.17 |
| Add: Closing balance of cash equivalent | - | - |
| Less: Opening balance of cash equivalent | - | - |
| Net increase of cash and cash equivalent | -120,146,306.61 | -92,995,256.59 |
(2) Cash and cash equivalents
| Items | 2024.01-06 | 2023.01-06 |
| Cash | 550,294,029.37 | 670,440,335.98 |
| Including: Cash on hand | 8,731.54 | 70,750.93 |
| Bank deposit used for paying at any moment | 550,285,297.83 | 670,303,450.55 |
| Other monetary fund for paying at any moment | 66,134.50 | |
| Deposit fund in central bank available for payment | - | - |
| Cash equivalent | - | - |
| Including: bonds investment with maturity in 3 months | - | - |
| Closing balance of cash and cash equivalents | 550,294,029.37 | 670,440,335.98 |
| Cash and cash equivalents with restriction within the Company and its subsidiaries of the group | - | - |
(3) Monetary fund not belonging to cash and cash equivalent
| Items | 2024.01-06 | 2023.01-06 | Reasons |
| Fixed term deposit | 168,000,000.00 | Held to maturity | |
| Guarantee money for bank acceptance note | 36,876,793.17 | 66,218,472.37 | Guarantee money |
| Guarantee money for guarantee letter | 15,800,743.03 | 37,235,734.79 | Guarantee money |
| Frozen | 4,433,975.45 | Frozen | |
| Rural workers’ salary account restriction | 250,983.28 | 3,191,970.58 | Special account |
| Interest receivable | 4,026,730.52 | 4,026,730.52 | Held to maturity |
| Rural workers guarantee fund | |||
| Total | 229,389,225.45 | 106,646,177.74 | — |
60. Change of shareholder’s equity
None
61. Monetary category of foreign currency
(1) Monetary category of foreign currency
| Item | Closing Balance (foreign currency) | Exchange Rate | Closing Balance (RMB) |
| Cash | — | — | — |
| Including：USD | 2,459,454.74 | 7.1268 | 17,528,042.04 |
| JPY | 327,878,608.00 | 0.0447 | 14,656,173.78 |
| Euro | 243,961.67 | 7.6617 | 1,869,161.13 |
| HK$ | |||
| Accounts receivable | — | — | — |
| Including: USD | 7,824,447.04 | 7.1268 | 55,763,269.16 |
| JPY | 123,625,890.00 | 0.0447 | 5,526,077.28 |
| Euro | 1,143,852.30 | 7.6617 | 8,763,853.17 |
| GBP | 177,717.86 | 9.043000 | 1,607,102.61 |
| Accounts payable | — | — | — |
| Including: USD | 885,752.26 | 7.1268 | 6,312,579.21 |
| GBP | 37,274.28 | 9.0430 | 337,071.31 |
| JPY | 75,738,827.90 | 0.0447 | 3,385,525.61 |
| Other accounts payable | — | — | — |
| Including: JPY | 8,304,510.00 | 0.0447 | 371,211.60 |
62. Lease
(1) As a lessor
Operating lease
| Items | Lease income | Include: income related to variable lease payments not included in lease payment receivable |
| Office and plant | 6,589,255.88 | - |
| Apartment | 74,477.16 | - |
| Total | 6,663,733.04 | - |
63. Research and development expense
| Items | 2024.01-06 | 2023.01-06 |
| Labor cost | 49,067,952.99 | 47,345,348.39 |
| Material cost | 11,856,892.82 | 6,471,854.49 |
| Depreciation and amortization | 7,715,801.12 | 3,474,989.41 |
| Expenses for intermediate tests and product trial production | 2,138,988.55 | 4,825,843.30 |
| Patent application maintenance expenses | 2,056,213.48 | 2,277,613.96 |
| Items | 2024.01-06 | 2023.01-06 |
| Consulting fee | 1,846,639.56 | 1,428,004.16 |
| Others | 3,862,373.95 | 2,805,164.26 |
| Total | 78,544,862.47 | 68,628,817.97 |
| Expensed R&D | 78,544,862.47 | 68,628,817.97 |
| Capitalized R&D | - | - |
VII. Change of Consolidation ScopeNone.VIII. Interest in other entity
1.Equity of subsidiaries
(1) Organization structure of group company
| Name of subsidiaries | Registered capital（10K） | Main business address | Registered address | Business nature | Shareholding (%) | Obtaining method | |
| Direct | Indirect | ||||||
| Dalian Bingshan Group Engineering Co., Ltd. | 30,000.00 | Dalian | Dalian | Installation | 100 | - | Establish |
| Chengdu Bingshan Refrigeration Engineering Co., Ltd. | 1,000.00 | Chengdu | Chengdu | Service | - | 51 | Establish |
| Dalian Bingshan Group Sales Co., Ltd. | 1,800.00 | Dalian | Dalian | Trading | 100 | - | Establish |
| Dalian Bingshan Air-conditioning Equipment Co., Ltd. | 8,254.00 | Dalian | Dalian | Manufacturing | 100 | - | Establish |
| Dalian Bingshan Guardian Automation Co., Ltd. | 5,070.07 | Dalian | Dalian | Manufacturing | 100 | - | Establish |
| Dalian Bingshan-RYOSETSU Quick Freezing Equipment Co., Ltd. | 5,757.87 | Dalian | Dalian | Manufacturing | 100 | - | Establish |
| Wuhan New World Refrigeration Industrial Co., Ltd. | 20,000.00 | Wuhan | Wuhan | Manufacturing | 100 | - | Acquisition |
| Wuhan New World Air-conditioning Refrigeration Engineering Co., Ltd | 3,500.00 | Wuhan | Wuhan | Installation | - | 100 | Establish |
| Name of subsidiaries | Registered capital（10K） | Main business address | Registered address | Business nature | Shareholding (%) | Obtaining method | |
| Direct | Indirect | ||||||
| Wuhan Lanning Energy Technology Co., Ltd. | 2,200.00 | Wuhan | Wuhan | Trading | - | 100 | Acquisition |
| Dalian Universe Thermal Technology Co., Ltd. | 8,000.00 | Dalian | Dalian | Manufacturing | 55 | - | Acquisition |
| Dalian Bingshan Engineering & Trading Co., Ltd | 3,000.00 | Dalian | Dalian | Service | 100 | - | Acquisition |
| Sonyo Compressor (Dalian)Co., Ltd. | 44,239.67 | Dalian | Dalian | Manufacturing | 100 | - | Acquisition |
| Sonyo Refrigeration System (Dalian) Co., Ltd. | 10,500.00 | Dalian | Dalian | Manufacturing | 100 | - | Acquisition |
| Sonyo Refrigeration (Dalian) Co., Ltd. | 21,208.47 | Dalian | Dalian | Manufacturing | 100 | - | Acquisition |
1) All the proportion of shareholding in subsidiaries were the same with voting right.
2) The Company held over 50% voting right in subsidiaries and could control thesesubsidiaries with over 50% voting right.
(2) There are no significant non-subsidiaries.
2.Change of equity share in subsidiary which is still under control
（1） Change of equity share in subsidiary
None.
3.Equity in joint venture arrangement or associated enterprise
（1） The important affiliated companies
| Name of joint ventures or affiliated companies | Main business address | Registered address | Business nature | Shareholding (%) | Accounting methods | |
| Direct | Indirect | |||||
| Dalian Bingshan Metal Technology Co., Ltd. | Dalian | Dalian | Manufacturing | 49.00 | - | Equity method |
1) The Company has the same percentage of shareholding and voting right in joint-venture or affiliatedcompany.
2) The Company doesn’t have joint venture or affiliated companies which have no significant influencealthough being held 20% or more voting rights.
（2） The key financial information of affiliated companies
| Items | Closing balance/Current period |
| Dalian Bingshan Metal Technology Co., Ltd. | |
| Current assets | 348,867,456.94 |
| Including: Cash and cash equivalents | |
| Non-current assets | 38,884,813.91 |
| Total assets | 387,752,270.85 |
| Current liabilities | 43,335,222.77 |
| Non-current liabilities | |
| Total liabilities | 43,335,222.77 |
| Total net asset | |
| Minority interests | |
| Equity to the parent company | 344,417,048.08 |
| Share of net assets according to the shareholding proportions | 172,208,524.04 |
| Adjusting events | |
| —Goodwill | 19,269,770.94 |
| —Unrealized profits of insider trading | |
| --Others | |
| Book value of equity investment of affiliated companies | 187,960,208.13 |
| Fair value of equity investment with public offer |
| Items | Closing balance/Current period |
| Dalian Bingshan Metal Technology Co., Ltd. | |
| Operating income | 218,341,334.10 |
| Financial expense | |
| Income tax expense | |
| Net profit | 30,169,947.69 |
| Net profit of discontinuing operation | |
| Other comprehensive income | |
| Total comprehensive income | 30,169,947.69 |
| The current dividends received from joint ventures |
(Continued)
| Items | Opening balance/Last period | ||
| Dalian Fuji Bingshan Vending Machine Co., Ltd | Jiangsu Jingxue Insulation Technology Co., Ltd | Dalian Bingshan Metal Technology Co., Ltd. | |
| Current assets | 392,953,074.08 | 1,412,248,730.10 | 371,483,253.15 |
| Including: Cash and cash equivalents | |||
| Non-current assets | 197,158,934.76 | 302,148,077.97 | 41,816,984.14 |
| Total assets | 590,112,008.84 | 1,714,396,808.07 | 413,300,237.29 |
| Current liabilities | 345,312,560.80 | 867,213,016.64 | 66,769,535.67 |
| Non-current liabilities | 50,307,454.75 | 38,312,160.00 | 0.00 |
| Total liabilities | 395,620,015.55 | 905,525,176.64 | 66,769,535.67 |
| Total net asset | |||
| Minority interests | 251,106.06 | ||
| Equity to the parent company | 194,491,993.29 | 808,620,525.37 | 346,530,701.62 |
| Share of net assets according to the shareholding proportions | 95,301,076.71 | 120,450,148.93 | 169,800,043.79 |
| Adjusting events | - | - | - |
| —Goodwill | 226,689.29 | 20,390,060.33 | 19,269,770.94 |
| —Unrealized profits of insider trading | - | - | - |
| --Others | - | - | |
| Book value of equity investment of affiliated companies | 95,527,766.00 | 140,840,209.26 | 189,069,814.73 |
| Fair value of equity investment with public offer | - | - | - |
| Items | Opening balance/Last period | ||
| Dalian Fuji Bingshan Vending Machine Co., Ltd | Jiangsu Jingxue Insulation Technology Co., Ltd | Dalian Bingshan Metal Technology Co., Ltd. | |
| Operating income | 95,101,008.52 | 326,567,962.40 | 233,048,775.05 |
| Financial expense | |||
| Income tax expense | |||
| Net profit | 2,717,196.06 | 15,601,156.92 | 28,223,484.22 |
| Net profit of discontinuing operation | - | - | - |
| Other comprehensive income | - | - | - |
| Total comprehensive income | 30,169,947.69 | 2,717,196.06 | 15,601,156.92 |
| The current dividends received from joint ventures | |||
（3） Summary financial information of insignificant affiliated companies
| Items | 2024.01-06 | 2023.01-06 |
| Affiliated company | — | — |
| Total book value of investment of affiliated companies | 346,676,683.88 | 77,435,611.67 |
| The total of following items according to the shareholding proportions | — | — |
| Net profit | 12,308,014.93 | 247,249.62 |
| Other comprehensive income | 12,308,014.93 | 247,249.62 |
| Total comprehensive income |
（4） Significant restrictions of the ability of affiliated companies transferring funds to the
Company.No.
（5） Contingency related to joint venture or affiliated company need to be disclosed.
No.XI. Disclosure of Fair Value
1. Amount and measurement level of the assets and liabilities measured at fair value at the period
end
| Items | Fair value at the period end | |||
| 1st level measurement of FV | 2nd level measurement of FV | 3rd level measurement of FV | Total | |
| Financial assets Continuously measured at FV | — | — | — | — |
| Receivable financing | 233,756,806.93 | 233,756,806.93 | ||
| Other non-current financial asset | 147,830,608.40 | 1,683,852.59 | 149,514,460.99 | |
| Total | 147,830,608.40 | 233,756,806.93 | 1,683,852.59 | 383,271,267.92 |
2. Basis for Market price of first level measurement of fair value
Equity instrument portion of the other noncurrent financial asset is measured at the unadjusted
closing quoted price of Guotai Junan shares on stock market on June 28, 2024.
3. For continuous and discontinuous 2nd level of FV, valuation technique adopted and keyparameter quantitive and qualitive information.Bank acceptance notes (receivable financing) as measured at fair value through othercomprehensive income is within this scope. Bank acceptance notes held by the group mainlyare high credit grading from the large commercial bank. As the remaining maturity is short andcredit risk is very low, on the balance sheet date, the book value of bank acceptance notesreceivable is similar to fair value.
4. For continuous and discontinuous 3rd level of FV, valuation technique adopted and keyparameter quantitive and qualitive information.As of December 28, 2024, the book value of the share investment in Guotai Junan InvestmentManagement Co.,Ltd and Wuhan Steel and Power Co.,Ltd is 1,683,852.59 Yuan. It is presentedas other non-current financial asset in accordance with No.22- financial instrument recognitionand measurement of Accounting Standards for Business Enterprises. Having consideredthere is neither active market for invested company’s share nor market price is available forreference, and it is not feasible to obtain the relevant observable input value. FV of theinvestment is measured at cost by taking influence factor of FV into consideration.
5. For continuous 3
rdlevel of FV, adjusted information of opening and closing balance andsensitivity analysis of unobservable parameter.No.
6. Assets continuously measured at fair value have switched among different level during
the year.No.
7. Changes of valuation technique and reasons for changes
No.
8. Assets and liability are disclosed at FV rather than measured at FV
No.XII. Related Parties Relationship and Transactions
i. Related parties’ relationship
1. Controlling shareholder and ultimate controller
(1) Controlling shareholder and ultimate controller
| Parent company | Registered address | Business nature | Registered capital（10K） | Shareholding percentage (%) | Voting power percentage (%) |
| Dalian Bingshan Group Co., Ltd. | Dalian | Manufacture | 15,858.00 | 20.27 | 20.27 |
Note: Dalian Bingshan Group Co., Ltd. is a Sino –foreign joint venture located No.106 LiaoheEast Road, DDZ, Dalian, China. The legal representative of Dalian Bingshan Group Co., Ltd. isMr. Ji Zhijian, and the registered capital is RMB158.58 million. The registered business operationperiod is from 3rd July 1985 to 2nd July 2035. The business scope includes research, development,manufacture, sales, service and installment of refrigeration equipment, cooling and freezingequipment, different size of air-conditioners, petrochemical equipment, electronic and electronic-control products, home electronic appliance, environment protect equipment and etc. (unless thelicenses needed)The Company’s ultimate controller is Dalian Bingshan Group Co., Ltd.
2. Subsidiaries
Referrer to the content in the Note “VIII. 1. (1) Organization structure of group company”.
3. Affiliated company and joint venture
The information of the affiliated company and joint venture please refers to the note “VIII. 3.(1)The significant affiliated company and joint venture’. The Company had transactions with relatedparties during the current period or last period, including:
| Names of the joint ventures or affiliated company | Relationships with the Company |
| Keinin-Grand Ocean Thermal Technology (Dalian) Co., Ltd. | Affiliated company of the Company |
| Dalian Fuji Bingshan Vending Machine Co., Ltd. | Affiliated company of the Company |
| Dalian Fuji Bingshan Vending Machine Sales Co., Ltd. | Affiliated company of the Company |
| Jiangsu Jingxue Insulation Technology Co., Ltd. | Affiliated company of the Company |
| MHI Bingshan Refrigeration (Dalian) Co., Ltd. | Affiliated company of the Company |
| Dalian Honjo Chemical Co., Ltd. | Affiliated company of the Company |
| Names of the joint ventures or affiliated company | Relationships with the Company |
| Dalian Bingshan Metal Technology Co., Ltd. | Affiliated company of the Company |
| Dalian Bingshan Group Huahuida Financial Leasing Co., Ltd. | Affiliated company of the Company |
| Wuhan Sikafu Power Control Equipment Co., Ltd. | Affiliated company of its subsidiary |
| Dalian Bingshan Group Huayida Commercial Factoring Co., LTD | Subsidiary of its affiliated company |
| Dalian Jingxue Freezing Equipment Co., Ltd. | Subsidiary of its affiliated company |
| Shanghai Jingxue Freezing Equipment Co., Ltd. | Subsidiary of its affiliated company |
| Jiangsu Jingxue Insulation Environmental Engineering Co., Ltd. | Subsidiary of its affiliated company |
| Keinin-Grand Ocean New energy Auto Parts (Changchun) Co., LTD | Subsidiary of its affiliated company |
4. Other related parties
| Name of related party | Related party relationship |
| Company under direct/indirect Control of Panasonic Co., Ltd | Both parties are under the control of or significant influence by the same party |
| Sanyo Corporation | Both parties are under the control of or significant influence by the same party |
| Panasonic Corporation of China Co., Ltd | Directors of the Company also serve as directors |
| Dalian Spindle Environmental Facilities Co., Ltd. | Both parties are under the control of or significant influence by the same party |
| LINDE HYDROGEN FUELTECH (DALIAN) CO., LTD. | Both parties are under the control of or significant influence by the same party |
| Dalian Fuji Bingshan Control System Co., Ltd. | Both parties are under the control of or significant influence by the same party |
| BAC Dalian Co., Ltd. | Both parties are under the control of or significant influence by the same party |
| Dalian Bingshan Wisdom Park Co., Ltd | Both parties are under the control of or significant influence by the same party |
| Dalian Shentong Electric Co., Ltd. | Both parties are under the control of or significant influence by the same party |
| Dalian Bingshan Part Technology Co., LTD. | Under control of the same ultimate controlling party |
| Alphavita Bio-scientific (Dalian) Co., Ltd. | Under control of the same ultimate controlling party |
| Bingshan Technology Service （Dalian） Co., Ltd. | Under control of the same ultimate controlling party |
| Dalian Zhonghuida Refrigeration Technology Co., Ltd | Directors and senior officers of the Company serve as directors and senior officers in Dalian Zhonghuida Refrigeration Technology Co., Ltd Company |
| Sonyo Cold Chain (Dalian) Co., Ltd. | Under control of the same ultimate controlling party |
| Sonyo Cold Chain (Dalian) Equipment (Wuhan) Co., LTD | Under control of the same ultimate controlling party |
| Name of related party | Related party relationship |
| Dalian Kangyang Industry Group Co., LTD | The directors and senior officers of the Company shall serve as the directors and senior officers of the Company |
Note: Companies under direct/indirect Control of Panasonic Co., Ltd are:
Panasonic Electric Taiwan Co.,Ltd, Wanbao(Guangzhou) Compressor Co.,Ltd, PanasonicElectronic Devices(Jiangmen)Co.,Ltd, Panasonic R&D Center Suzhou Co.,Ltd Dalian Branch,Panasonic Procurement(CHINA)Co.,Ltd, Panasonic Industry (China) Co., Ltd. PanasonicCorporation, Panasonic Industry (China) Co., Ltd Shanghai Branch, Beijing 2
nd
Branch ofPanasonic Electric Equipment (China）Co.,Ltd, Panasonic Electric Equipment (China）Co.,Ltd,Panasonic Appliances Air-Conditioning and Refrigeration Corporation, Panasonic AppliancesMicrowave Oven(Shanghai) Co.,Ltd, Panasonic Motor(Hangzhou)Co.,Ltd., Panasonic HomeAppliances Air-Conditioning(Guangzhou)Co.,Ltd., Panasonic Hong Kong Co., Limited,PANASONIC PROCUREMENT (CHINA) CO., LTD. Sonyo Refrigeration (Dalian) Co., Ltd.,Sonyo Cold Chain (Dalian) Co., Ltd..Panasonic Appliances Air-Conditioning Malaysia SDN BHD, Panasonic Taiwan CO.,LTD.,Panasonic Sales Taiwan CO.,LTD, Panasonic Procurement Malaysia SDN BHD, Panasonic HongKong Co.,Ltd, Panasonic Operational Excellence Co.,Ltd.(Pex), Panasonic Life Solutions India,Panasonic Industry Sales Asia, Panasonic Industry Europe GmbH, Panasonic Industrial DevicesSales, Panasonic India Pvt Ltd(APIN), Panasonic Global Procurement, Panasonic DoBrasilLimited–Miam, Panasonic Corporation Appliances Company Heating&Cooling Solutions BdCommercial Air-Conditioning, Panasonic Corporation Appliances Company, PanasonicCorporation, Panasonic Commercial Equipment Systems Taiwan Co.Ltd, Panasonic CommercialEquipment Systems Asia, Panasonic Automotive&Industrial, Panasonic Appliances Air-Conditioning Malaysia Sdn.BHD, Panasonic Appliances Air-Conditioning, Pacific. PanasonicCommercial Equipment Systems Asia Pacific, Panasonic Heating&Ventilation, PanasonicAppliances Air-conditioning, Panasonic A.P. SALES (THAILAND) CO., LTD
ii. Related Party transactions
1. Purchase of goods, offer and receive labour services etc inter-group transactions
(1) Purchase of goods/receive labour services
| Related party | Content | 2024.01-06 | 2023.01-06 |
| Dalian Bingshan Metal Technology Co., Ltd. | Purchases of goods | 30,782,824.32 | 30,587,674.23 |
| Sonyo Cold Chain (Dalian)Co. Ltd | Purchases of goods | 27,635,764.08 | 5,702,273.24 |
| Jiangsu Jingxue Insulation Technology Co., Ltd. | Purchases of goods | 7,744,955.77 | 20,046,515.95 |
| BAC Dalian Co., Ltd. | Purchases of goods | 4,721,558.13 | 9,666,650.44 |
| Company under direct/indirect Control of Panasonic Co., Ltd | Purchases of goods | 6,077,302.57 | 16,061,957.06 |
| Related party | Content | 2024.01-06 | 2023.01-06 |
| Dalian Bingshan Part Technology Co., LTD. | Purchases of goods | 18,864,725.92 | 17,854,202.15 |
| Dalian Honjo Chemical Co., Ltd | Purchases of goods | 3,902,513.39 | 3,063,274.33 |
| Bingshan Technology Service （Dalian） Co., Ltd. | Purchases of goods | 1,729,423.88 | 1,028,124.44 |
| Dalian Fuji Bingshan Control System Co., Ltd. | Purchases of goods | 111,504.43 | 8,276.00 |
| Alphavita Bio-scientific (Dalian) Co., Ltd. | Purchases of goods | 0.00 | 1,254,598.22 |
| Dalian Shentong Electric Co., Ltd. | 3,788,058.16 | 3,224,632.53 | |
| Dalian Fuji Bingshan Vending Machine Co., Ltd | Purchases of goods | 1,158.38 | 206,432.86 |
| Dalian Spindle Environmental Facilities Co., Ltd | Purchases of goods | 349,724.76 | 816,701.77 |
| Dalian Bingshan Wisdom Park Co., Ltd | Purchases of goods | 5,896.23 | |
| Dalian Bingshan Group Co., Ltd. | Receive labor services | 1,886.80 | |
| Shanghai Jingxue Freezing Equipment Co., Ltd | Purchases of goods | 53,008.85 | |
| Dalian Bingshan Group Huahuida Financial Leasing Co., Ltd | Purchases of goods | 1,715.65 | |
| Total | — | 105,766,125.09 | 109,527,209.45 |
(2) Sales of goods/ labour services provision
| Related party | Content | 2024.01-06 | 2023.01-06 |
| Company under direct/indirect Control of Panasonic Co., Ltd | Sales of goods | 144,059,445.50 | 131,295,821.04 |
| Sonyo Cold Chain (Dalian) Co., Ltd | Sales of goods | 53,547,002.76 | 39,240,301.87 |
| BAC Dalian Co., Ltd | Sales of goods | 44,032,558.17 | 24,322,577.92 |
| Bingshan Technology Service （Dalian） Co., Ltd. | Sales of goods | 26,992,915.42 | 18,019,442.13 |
| Dalian Fuji Bingshan Vending Machine Co., Ltd | Sales of goods | 4,884,735.34 | 10,541,125.91 |
| Dalian Bingshan Wisdom Park Co., Ltd | Sales of goods | 4,715,774.63 | 6,689,927.98 |
| MHI Bingshan Refrigeration (Dalian) Co., Ltd. | Sales of goods | 3,738,455.62 | 5,233,706.75 |
| Alphavita Bio-scientific (Dalian) Co., Ltd. | Sales of goods | 1,680,522.42 | 2,791,630.38 |
| Dalian Spindle Environmental Facilities Co., Ltd | Sales of goods | 660,413.34 | 3,277,492.69 |
| Dalian Honjo Chemical Co., Ltd | Sales of goods | 34,400.88 | 54,351.13 |
| Dalian Bingshan Part Technology Co., LTD | Sales of goods | 1,479,174.40 | 750,927.00 |
| Linde Hydrogen Fueltech (Dalian) Co., Ltd | Sales of goods | 66,878.51 | 536,171.21 |
| Dalian Fuji Bingshan Control System Co., Ltd. | Sales of goods | 251,472.27 | 25,708.47 |
| Dalian Bingshan Metal Technology Co., Ltd. | Sales of goods | 163,716.81 | |
| Dalian Shentong Electric Co., Ltd | Sales of goods | 112,355.73 | 194,881.40 |
| Dalian Jingxue Freezing Equipment Co., Ltd | Sales of goods | 41,477.53 | |
| Dalian Bingshan Group Huahuida Financial Leasing Co., Ltd | Sales of goods | 26,645,039.63 | |
| Wuhan Sikafu Power Control Equipment Co., Ltd. | Sales of goods | 1,946.90 |
| Related party | Content | 2024.01-06 | 2023.01-06 |
| Total | — | 286,461,299.33 | 269,621,052.41 |
(3) Assets Lease
(1) Assets rent out
| Lessee | Category of assets rent out | Current period Lease Income | Last period Lease Income |
| Dalian Jingxue Freezing Equipment Co., Ltd | Plant and office | 392,463.94 | 392,463.94 |
| Dalian Bingshan Wisdom Park Co., Ltd | Land/property | 4,506,673.78 | 4,009,659.86 |
| MHI Bingshan Refrigeration (Dalian) Co., Ltd. | Plant | 1,904,761.90 | 1,904,761.90 |
| Linde Hydrogen Fueltech (Dalian) Co., Ltd | Plant | 398,985.66 | |
| Bingshan Technology Service （Dalian） Co., Ltd. | Plant | 163,259.51 | 147,436.30 |
| Wuhan Sikafu Power Control Equipment Co., Ltd | Plant | 496,132.49 | 540,784.41 |
| Sonyo Cold Chain (Dalian)Co. Ltd | Plant /Employee dormitory | 1,281,178.90 | |
| Dalian Bingshan Part Technology Co., Ltd. | Plant and office | 461,009.22 | |
| Dalian Spindle Environmental Facilities Co., Ltd. | office | 5,284.40 |
(2) Assets under lease
| Lessor | Category of assets rent in | Lease premium paid | |
| 2024.01-06 | 2023.01-06 | ||
| Dalian Bingshan Group Huahuida Financial Leasing Co., Ltd | Fixed asset | 1,459,606.47 | 15,428,358.65 |
| Sonyo Cold Chain (Dalian)Co. Ltd | Plant | 1,700,966.97 | |
(Continued)
| Lessor | Interests on lease liabilities | Increased right-of-use assets | ||
| 2024.01-06 | 2023.01-06 | 2024.01-06 | 2023.01-06 | |
| Dalian Bingshan Group Huahuida Financial Leasing Co., Ltd | 456,010.73 | 1,549,756.51 | 0.00 | 0.00 |
| Sonyo Cold Chain (Dalian)Co. Ltd | 198,459.63 | |||
(4) Warranty provided by Related Parties
The national development fund planned to support the Company’s intelligent and greenequipment of cold chain and service industry base project, and provide the special fund to the
controlling shareholder of the Company, Bingshan Group. Please refer to the “Note VI. 33 longterm borrowings”.Funds borrow from /lent to related party
| Name of the related party | Amount | Starting date | Ending date | Explanation |
| Dalian Bingshan Group Co., Ltd. | 100,000,000.00 | 2016.03.14 | 2026.03.13 | Project fund investment |
| Dalian Bingshan Group Huahuida Financial Leasing Co., Ltd | 32,833,000.00 | 2022.09.29 | 2024.09.28 | Factoring |
| Dalian Bingshan Group Huayida Commercial Factoring Co., Ltd | 15,000,000.00 | 2023.12.25 | 2024.12.24 | Factoring |
| Dalian Bingshan Group Huahuida Financial Leasing Co., Ltd | 13,805,309.73 | 2021.11.10 | 2026.11.09 | Sale and leaseback |
| Dalian Bingshan Group Huahuida Financial Leasing Co., Ltd | 12,000,000.00 | 2022.01.07 | 2025.01.06 | Sale and leaseback |
| Dalian Bingshan Group Huahuida Financial Leasing Co., Ltd | 6,600,000.00 | 2023.02.24 | 2025.02.23 | Sale and leaseback |
| Dalian Bingshan Group Huahuida Financial Leasing Co., Ltd | 4,559,849.17 | 2023.08.31 | 2024.08.30 | Factoring |
| Dalian Bingshan Group Huahuida Financial Leasing Co., Ltd | 3,499,485.17 | 2023.10.10 | 2024.10.09 | Factoring |
| Dalian Bingshan Group Huayida Commercial Factoring Co., Ltd | 2,367,580.50 | 2023.12.22 | 2024.12.21 | Factoring |
| Dalian Bingshan Group Huahuida Financial Leasing Co., Ltd | 2,000,000.00 | 2024.1.24 | 2026.1.23 | Sale and leaseback |
| Dalian Bingshan Group Huahuida Financial Leasing Co., Ltd | 1,531,366.55 | 2023.09.08 | 2024.09.07 | Factoring |
| Dalian Bingshan Group Huahuida Financial Leasing Co., Ltd | 1,000,000.00 | 2024.01.19 | 2026.01.18 | Factoring |
| Dalian Bingshan Group Huahuida Financial Leasing Co., Ltd | 1,000,000.00 | 2024.01.19 | 2026.01.18 | Factoring |
| Dalian Bingshan Group Huahuida Financial Leasing Co., Ltd | 1,000,000.00 | 2024.06.19 | 2026.06.18 | Factoring |
| Dalian Bingshan Group Huahuida Financial Leasing Co., Ltd | 800,000.00 | 2024.01.19 | 2026.01.18 | Factoring |
| Dalian Bingshan Group Huahuida Financial Leasing Co., Ltd | 800,000.00 | 2024.01.19 | 2026.01.18 | Factoring |
| Dalian Bingshan Group Huahuida Financial Leasing Co., Ltd | 731,470.43 | 2023.10.17 | 2025.10.16 | Factoring |
| Dalian Bingshan Group Huayida Commercial Factoring Co., Ltd | 700,000.00 | 2024.01.19 | 2026.01.18 | Factoring |
| Dalian Bingshan Group Huayida Commercial Factoring Co., Ltd | 500,000.00 | 2024.01.19 | 2026.01.18 | Factoring |
| Dalian Bingshan Group Huahuida Financial Leasing Co., Ltd | 500,000.00 | 2024.01.19 | 2026.01.18 | Factoring |
| Dalian Bingshan Group Huayida Commercial Factoring Co., Ltd | 163,920.00 | 2023.12.15 | 2025.12.14 | Factoring |
| Dalian Bingshan Group Huayida Commercial Factoring Co., Ltd | 400,000.00 | 2024.01.19 | 2026.01.18 | Factoring |
| Dalian Bingshan Group Huayida Commercial Factoring Co., Ltd | 300,000.00 | 2024.01.19 | 2026.01.18 | Factoring |
| Dalian Bingshan Group Huahuida Financial Leasing Co., Ltd | 20,000.00 | 2024.02.27 | 2024.08.26 | Sale and leaseback |
(5) Asset transfer and debt restructuring among the related parties
| Item | Transaction | 2024.01-06 | 2023.01-06 |
| Sanyo Corporation | Purchase shareholdings of affiliated company | 87,171,300.00 | |
| Panasonic Corporation of China Co., Ltd | Purchase shareholdings of affiliated company | 58,114,200.00 |
(6) Other transactions with related party
Noneiii. Balances with Related party
1.Accounts receivable due from related parties
| Item | Related party | Closing Balance | |
| Book Balance | Bad debt Provision | ||
| Accounts receivable | Sonyo Cold Chain (Dalian)Co. Ltd | 66,429,811.00 | 4,067,135.24 |
| Accounts receivable | BAC Dalian Co., Ltd | 27,030,808.53 | 1,897,562.75 |
| Accounts receivable | Company under direct/indirect Control of Panasonic Co., Ltd | 23,342,611.08 | 978,476.89 |
| Accounts receivable | Dalian Bingshan Wisdom Park Co., Ltd | 12,717,710.38 | 983,945.49 |
| Accounts receivable | Dalian Fuji Bingshan Vending Machine Co., Ltd | 6,741,433.52 | 473,248.63 |
| Accounts receivable | MHI Bingshan Refrigeration (Dalian) Co., Ltd. | 968,782.46 | 68,008.52 |
| Accounts receivable | Alphavita Bio-scientific (Dalian) Co., Ltd. | 2,224,344.71 | 51,478.32 |
| Accounts receivable | Dalian Bingshan Part Technology Co., LTD | 4,073,840.15 | 68,774.31 |
| Accounts receivable | Dalian Spindle Environmental Facilities Co., Ltd | 374,575.73 | 26,295.22 |
| Accounts receivable | Bingshan Technology Service （Dalian） Co., Ltd. | 7,751,655.11 | 554,508.82 |
| Accounts receivable | Linde Hydrogen Fueltech (Dalian) Co., Ltd | 786,500.99 | 131,660.27 |
| Accounts receivable | Dalian Bingshan Group Huahuida Financial Leasing Co., Ltd | 0.00 | 0.00 |
| Accounts receivable | Dalian Fuji Bingshan Control System Co., Ltd. | 54,200.00 | 13,515.83 |
| Other receivable | Bingshan Technology Service （Dalian） Co., Ltd. | 400,000.00 | 14,640.00 |
| Other receivable | Dalian Fuji Bingshan Vending Machine Co., Ltd | 0.00 | 0.00 |
| Other receivable | Wuhan Sikafu Power Control Equipment Co., Ltd. | 0.00 | 0.00 |
| Prepayment | Jiangsu Jingxue Insulation Technology Co., Ltd. | 0.00 | 0.00 |
| Item | Related party | Closing Balance | |
| Book Balance | Bad debt Provision | ||
| Prepayment | Company under direct/indirect Control of Panasonic Co., Ltd | 2,771.21 | 0.00 |
| Prepayment | Sonyo Cold Chain (Dalian)Co. Ltd | 9,032.00 | 0.00 |
| Prepayment | BAC Dalian Co., Ltd | 248,550.29 | 0.00 |
| Prepayment | Dalian Fuji Bingshan Vending Machine Co., Ltd | 0.00 | 0.00 |
| Prepayment | Dalian Fuji Bingshan Vending Machine Sales Co., Ltd. | 0.00 | 0.00 |
| Prepayment | Bingshan Technology Service （Dalian） Co., Ltd. | 432,849.88 | 0.00 |
| Prepayment | Dalian Bingshan Part Technology Co., LTD | 6,660.00 | 0.00 |
| Contract asset | Dalian Bingshan Wisdom Park Co., Ltd | 550,000.00 | 38,610.00 |
(Continued)
| Item | Related party | Opening Balance | |
| Book Balance | Bad debt Provision | ||
| Accounts receivable | Sonyo Cold Chain (Dalian)Co. Ltd | 84,045,272.25 | 4,997,695.76 |
| Accounts receivable | BAC Dalian Co., Ltd | 28,426,981.24 | 1,995,574.08 |
| Accounts receivable | Company under direct/indirect Control of Panasonic Co., Ltd | 12,595,875.91 | 174,589.96 |
| Accounts receivable | Dalian Bingshan Wisdom Park Co., Ltd | 10,199,546.41 | 807,170.38 |
| Accounts receivable | Dalian Fuji Bingshan Vending Machine Co., Ltd | 6,270,661.55 | 440,200.44 |
| Accounts receivable | MHI Bingshan Refrigeration (Dalian) Co., Ltd. | 3,390,197.07 | 237,991.83 |
| Accounts receivable | Alphavita Bio-scientific (Dalian) Co., Ltd. | 2,791,425.71 | 200,691.99 |
| Accounts receivable | Dalian Bingshan Part Technology Co., LTD | 1,606,085.44 | 52,796.80 |
| Accounts receivable | Dalian Spindle Environmental Facilities Co., Ltd | 1,072,064.56 | 75,258.93 |
| Accounts receivable | Bingshan Technology Service （Dalian） Co., Ltd. | 965,375.22 | 67,769.34 |
| Accounts receivable | Linde Hydrogen Fueltech (Dalian) Co., Ltd | 909,470.99 | 139,380.02 |
| Accounts receivable | Dalian Bingshan Group Huahuida Financial Leasing Co., Ltd | 138,450.00 | 9,719.19 |
| Accounts receivable | Dalian Fuji Bingshan Control System Co., Ltd. | 54,200.00 | 6,410.69 |
| Other receivable | Bingshan Technology Service （Dalian） Co., Ltd. | 100,000.00 | 100,000.00 |
| Other receivable | Dalian Fuji Bingshan Vending Machine Co., Ltd | 48,000.00 | 7,608.00 |
| Other receivable | Wuhan Sikafu Power Control Equipment Co., Ltd. | 4,287.61 | 156.93 |
| Item | Related party | Opening Balance | |
| Book Balance | Bad debt Provision | ||
| Prepayment | Jiangsu Jingxue Insulation Technology Co., Ltd. | 4,088,975.80 | |
| Prepayment | Company under direct/indirect Control of Panasonic Co., Ltd | 1,152,192.68 | |
| Prepayment | Sonyo Cold Chain (Dalian)Co. Ltd | 636,235.00 | |
| Prepayment | BAC Dalian Co., Ltd | 216,191.11 | |
| Prepayment | Dalian Fuji Bingshan Vending Machine Co., Ltd | 176,869.45 | |
| Prepayment | Dalian Fuji Bingshan Vending Machine Sales Co., Ltd. | 77,000.00 | |
| Prepayment | Bingshan Technology Service （Dalian） Co., Ltd. | 74,297.11 | |
| Prepayment | Dalian Bingshan Part Technology Co., LTD | 13,806.00 | |
| Contract asset | Dalian Bingshan Wisdom Park Co., Ltd | 550,000.00 | 38,610.00 |
2. Accounts Payable due from Related Party
| Item | Related party | Closing Balance | Opening Balance |
| Accounts Payable | Jiangsu Jingxue Insulation Technology Co., Ltd | 58,581,762.77 | 65,052,640.75 |
| Accounts Payable | BAC Dalian Co., Ltd | 18,018,414.59 | 21,731,458.82 |
| Accounts Payable | Sonyo Cold Chain (Dalian)Co., Ltd | 10,001,475.64 | 10,067,451.24 |
| Accounts Payable | Dalian Bingshan Metal Technology Co., Ltd | 11,644,244.95 | 9,745,165.83 |
| Accounts Payable | Dalian Honjo Chemical Co., Ltd. | 1,543,794.51 | 6,672,533.86 |
| Accounts Payable | Dalian Bingshan Part Technology Co., LTD | 5,282,363.53 | 6,266,070.43 |
| Accounts Payable | Jiangsu Jingxue Insulation Environmental Engineering Co., Ltd | 2,896,300.00 | |
| Accounts Payable | Company under direct/indirect Control of Panasonic Co., Ltd | 240,738.74 | 864,418.25 |
| Accounts Payable | Dalian Spindle Environmental Facilities Co., Ltd | 727,006.00 | 794,006.00 |
| Accounts Payable | Dalian Fuji Bingshan Control System Co., Ltd. | 329,479.00 | 502,571.47 |
| Accounts Payable | Bingshan Technology Service （Dalian） Co., Ltd. | 236,195.26 | 126,241.74 |
| Accounts Payable | Dalian Shentong Electric Co., Ltd | 353,924.27 | |
| Other payable | Dalian Bingshan Group Huayida Commercial Factoring Co., Ltd. | 15,000,000.00 | |
| Other payable | Dalian Bingshan Group Huahuida Financial Leasing Co., Ltd. | 7,500,000.00 | 7,407,941.90 |
| Other payable | Company under direct/indirect Control of Panasonic Co., Ltd | 2,413,706.04 | 3,273,305.50 |
| Other payable | Bingshan Technology Service （Dalian） Co., Ltd. | 14,946.50 | 104,625.50 |
| Other payable | Sonyo Cold Chain (Dalian)Co., Ltd | 618,018.00 | 91,779.71 |
| Other payable | Jiangsu Jingxue Insulation Environmental Engineering Co., Ltd | 70,000.00 | |
| Other payable | Dalian Jingxue Freezing Equipment Co., Ltd. | 70,000.00 |
| Item | Related party | Closing Balance | Opening Balance |
| Other payable | Dalian Bingshan Group Huahuida Financial Leasing Co., Ltd. | 7,500,000.00 | |
| Contract liability | Bingshan Technology Service （Dalian） Co., Ltd. | 544,738.32 | 2,337,426.58 |
| Contract liability | Linde Hydrogen Fueltech (Dalian) Co., Ltd | 2,117,926.65 | 2,138,974.27 |
| Contract liability | Company under direct/indirect Control of Panasonic Co., Ltd | 313,952.83 | |
| Contract liability | Sonyo Cold Chain (Dalian)Co. Ltd | 35,605.27 | |
| Other current liability | Linde Hydrogen Fueltech (Dalian) Co., Ltd | 275,330.46 | 319,616.84 |
| Other current liability | Bingshan Technology Service （Dalian） Co., Ltd. | 70,815.98 | 303,865.45 |
| Other current liability | Company under direct/indirect Control of Panasonic Co., Ltd | 35,021.95 | |
| Other current liability | Sonyo Cold Chain (Dalian)Co., Ltd | 4,628.68 | |
| Lease payable | Dalian Bingshan Group Huahuida Financial Leasing Co., Ltd | 9,242,020.45 | 656,980.83 |
| Non-current liability due within 1 year | Dalian Bingshan Group Huahuida Financial Leasing Co., Ltd | 4,988,748.38 | 25,140,961.04 |
| Long-term payable | Dalian Bingshan Group Huahuida Financial Leasing Co., Ltd | 10,331,937.30 | |
| Short-term borrowing | Dalian Bingshan Group Huayida Commercial Factoring Co., Ltd. | 2,976,345.47 |
iv. Related Party Commitment
Nonev. OthersNoneXIII. Share-Based Payment
NoneXIV. Contingency & commitment
1. Commitment
None
2. Contingency
Up to June 30, 2024, guarantee obligations undertaken by the Company due to financial
leasing.
The Company sold refrigerating house equipment to Guizhou Pubu Cold Chain Food
Investment Co., Ltd (“Pubu Cold Chain”) in the form of financial leasing. The Company asa seller singed finance lease contract with Dalian Bingshan Group Huahuida FinancialLeasing Co., Ltd (hereinafter referred to as ‘Huahuida’) as both a buyer and a lessor andPubu Cold Chain as a lessee. The contract price is 25.705million Yuan. In case the leasepremium is delayed by the lessee, the Company needs to pay lease premium on behalf of thelessee and be obliged to the buy back responsibility. Pubu Cold Chain issued anunconditional, irrevocable and joint liability counter guarantee, and the Company is thebeneficiary. Guarantee scope covers the full liability because of the sales in the form offinance lease. As at 31 December 2023, the balance of the guarantee obligation of thefinancial lease is RMB 6.5958million Yuan.The Company sold water chiller and heat pump to Shangdong Jiechuang Energy TechnologyCo., Ltd (“Shandong Jiechuang”) in the form of financial lease. The Company as a sellersinged finance lease contract with Huahuida as both a buyer and a lessor and ShandongJiechuang as a lessee. The contract price is 6.998million Yuan. Shandong Jiechuang hadmade 10% down payment, and remaining 6.2982million Yuan is underlined the leasingcontract amount. In case the lease premium is delayed by the lessee, the Company needs topay lease premium on behalf of the lessee and be obliged to the buy back responsibility.Shandong Jiechuang issued an unconditional, irrevocable and joint liability counterguarantee, and the Company is the beneficiary. Guarantee scope covers the full liabilitybecause of the sales in the form of financial lease. As at 31 December 2023, the balance ofthe guarantee obligation of the financial lease is RMB4.4262 million Yuan.The Company sold refrigerating house equipment to Liuyang Zhongjie TechnologyInvestment Co., Ltd (“Liuyang Zhongjie”) in the form of financial lease. The Company as aseller singed finance lease contract with Huahuida as both a buyer and a lessor and LiuyangZhongjie as a lessee. The contract price is 9.831million Yuan. In case the lease premium isdelayed by the lessee, the Company needs to pay lease premium on behalf of the lessee andbe obliged to the buy back responsibility. Liuyang Zhongjie issued an unconditional,irrevocable and joint liability counter guarantee, and the Company is the beneficiary.Guarantee scope covers the full liability because of the sales in the form of financial lease.As at 31 December, 2023, the balance of the guarantee obligation of the financial lease isRMB 5.3227million Yuan.The Company sold refrigeration equipment, air conditioning and production line equipmentto Shanxi Yiming Food Co., Ltd (‘Shanxi Yiming’) in the form of financial lease. TheCompany as a seller singed finance lease contract with Huahuida as both a buyer and a lessorand Shanxi Yiming as a lessee. The contract price is 28.2311million Yuan. In case the leasepremium is delayed by the lessee, the Company needs to pay lease premium on behalf of the
lessee and be obliged to the buy back responsibility. Shareholders Shanxi Yiming and natureperson issued an unconditional, irrevocable and joint liability counter guarantee, and theCompany is the beneficiary. Guarantee scope covers the full liability because of the sales inthe form of financial lease. As at 31 December, 2023, the balance of the guarantee obligationof the financial lease is RMB 23.1802million Yuan.Dalian Bingshan-RYOSETSU Quick Freezing Equipment Co.,Ltd (‘Bingshan-RYOSETSU’), the subsidiary of the Company sold refrigeration equipment to Jilin FuyuAgricultural Technology Co., Ltd (‘Jinlin Fuyu’) in the form of financial lease. Bingshan-RYOSETSU as a seller singed finance lease contract with Huahuida as both a buyer and alessor and Jinlin Fuyu as a lessee. The contract price is 20.50million Yuan. In case the leasepremium is delayed by the lessee, Bingshan- RYOSETSU needs to pay lease premium onbehalf of the lessee and be obliged to the buy back responsibility. Shareholders Jinlin Fuyuand nature person issued an unconditional, irrevocable and joint liability counter guarantee,and Bingshan- RYOSETSU is the beneficiary. Guarantee scope covers the full liabilitybecause of the sales in the form of financial lease. As at 31 December, 2023, the balance ofthe guarantee obligation of the financial lease is RMB 18.8146million Yuan.Until June, 30, 2024, the balance of all guarantee obligation of the financial lease is RMB
43.2458 million Yuan. There is no situation where the Company needs to undertake theliability as the lessees’ default.There are no other significant or contingent matters to be disclosed until June, 2024.XV. Events after the Balance Sheet Date
The Company has no significant subsequent event after the balance sheet date.XVI. Other Significant Events
1. Error correction and effect in previous period
No.
2. Debt Restructuring
No.
3. Asset exchange
(1) The exchange of non-monetary assets
No.
(2) The exchange of other assets
No.
4. Annuity Plan
No.
5. Operation termination
No.
6. Segment Information
The management of the group divided the business into 2 segments based on the geographic area:
Northeast China and Central China. The Northeast is the Company’s general headquarters andthe subsidiaries registered in Dalian. The Central includes Chengdu Bingshan RefrigerationEngineering Co., Ltd, Wuhan New World Refrigeration Industrial Co., Ltd and its subsidiary,Wuhan Lanning Energy Technology Co., Ltd. and Wuhan New World Air-conditioning RefrigerationEngineering Co., Ltd.
(1) The basis and accounting policies of reporting segments
The internal organization structure, management requirements and internal report scheme are thedetermination basis for the Company to set the operating segments. The segments are thosesatisfied the following requirements.
1). The segment can generate revenue and incur expenses.
2). The management personnel can regularly evaluate the operation results of segments and
allocate resource, assess its performance.
3). The financial situation, operation results, cash flow and other accounting information of
segments can be acquired.The group confirms the report segments based on the operating segments. The transfer priceamong segments is set base on the market price. The assets and related expenses in common useare allocated to different segments based on their proportion of revenue.
(2) The financial information of reporting segments
Amount unit ： Yuan
| Items | Northeast China | Central China | Offset | Total |
| 1 Operating income | 2,613,240,964.51 | 141,557,447.65 | -291,521,062.46 | 2,463,277,349.70 |
| 2 Cost | 2,211,567,490.91 | 118,896,974.75 | -272,559,658.92 | 2,057,904,806.74 |
| Impairment loss on credit | -12,075,577.73 | -3,273,225.05 | -1,057,418.11 | -16,406,220.89 |
| Impairment loss on assets | 7,750,229.87 | -573,479.69 | -2,258,762.00 | 4,917,988.18 |
| Depreciation and amortization | 24,004,527.58 | 4,167,694.29 | 28,172,221.87 | |
| Investment income from associates and joint venture | 17,960,407.98 | 236,717.06 | -978,426.58 | 17,218,698.46 |
| Items | Northeast China | Central China | Offset | Total |
| Operating profits(loss) | 130,086,549.47 | -1,841,062.81 | -37,340,973.50 | 90,904,513.16 |
| Income tax | 17,391,530.91 | -1,194,021.92 | -4,545,826.40 | 11,651,682.59 |
| Net profit(loss) | 112,695,018.56 | -647,040.89 | -32,795,147.10 | 79,252,830.57 |
| Total assets | 6,263,302,975.74 | 469,380,019.82 | 1,055,947,015.45 | 7,788,630,011.01 |
| Total liabilities | 4,953,818,215.98 | 377,518,368.39 | -699,137,998.64 | 4,632,198,585.73 |
(3) Others
None
7. Other important transactions and matters affect the investor's decisionThe group hasn’t had other important transactions and matters affect the investor's decision in thisperiod.XVII. Notes to the Main Items of the Financial Statements of Parent Company
1. Accounts receivable
(1) Bad debt provisions under accounting aging analysis method:
| Aging | Closing Balance | Opening Balance |
| Within 1 year | 476,166,210.47 | 457,075,717.70 |
| 1-2 years | 134,074,263.69 | 124,339,052.45 |
| 2-3 years | 72,249,248.71 | 58,073,083.27 |
| Over 3 years | 101,693,468.65 | 109,679,441.52 |
| 3-4 years | 37,453,099.65 | 49,782,646.14 |
| 4-5 years | 6,443,804.68 | 2,186,288.76 |
| Over 5 years | 57,796,564.32 | 57,710,506.62 |
| Total | 784,183,191.52 | 749,167,294.94 |
(2) Accounts receivable category
| Item | Closing Balance | ||||
| Booking balance | Provision | Booking value | |||
| Amount | % | Amount | % | ||
| Bad debt provision on group | 784,183,191.52 | 100.00% | 140,596,092.11 | 17.93 | 643,587,099.41 |
| (1) Accounting age as characters | 520,843,285.13 | 66.42% | 140,596,092.11 | 26.99 | 380,247,193.02 |
| (2) Related party within consolidation scope | 263,339,906.39 | 33.58% | 263,339,906.39 | ||
| Total | 784,183,191.52 | 100.00% | 140,596,092.11 | 17.93 | 643,587,099.41 |
(Continued)
| Item | Opening Balance | ||||
| Booking balance | Provision | Booking balance | |||
| Amount | % | Amount | % | ||
| Bad debt provision on group | 749,167,294.94 | 100.00 | 136,234,112.03 | 18.18 | 612,933,182.91 |
| (1) Accounting age as characters | 492,240,628.86 | 65.71 | 136,234,112.03 | 27.68 | 356,006,516.83 |
| (2) Related party within consolidation scope | 256,926,666.08 | 34.29 | - | - | 256,926,666.08 |
| Total | 749,167,294.94 | 100.00 | 136,234,112.03 | 18.18 | 612,933,182.91 |
(3) Bad debt provision
| Category | Opening balance | Change during the year | Closing Balance | |||
| Accrued | Collected/ reversed | Written-off | Other | |||
| Bad debt provision | 136,234,112.03 | 4,361,980.08 | 15,827.00 | 31,654.00 | 140,596,092.11 | |
| Total | 136,234,112.03 | 4,361,980.08 | 15,827.00 | 31,654.00 | 140,596,092.11 | |
(4) Based on closing balance ranking, sum of the top five significant receivable and contractasset are 178,761,262.44Yuan, representing19.45% of total receivables and contract asset at theyear end. 53,489,231.85Yuan bad debt provision is provided respectively.
2. Other Receivables
| Item | Closing Balance | Opening Balance |
| Interest receivable | - | - |
| Dividend receivable | 9,919,648.18 | 110,000,000.00 |
| Other receivable | 27,627,662.30 | 28,883,665.74 |
| Total | 37,547,310.48 | 138,883,665.74 |
2.1 Dividend receivable
| Item | Closing Balance | Opening Balance |
| Dalian Bingshan Group Huahuida Financial Leasing Co., Ltd | 636,409.95 | |
| Jiangsu Jingxue Insulation Environmental Engineering Co., Ltd | 3,220,344.00 | |
| Dalian Bingshan Engineering & Trading Co., Ltd | 3,202,894.23 | |
| Dalian Universe Thermal Technology Co., Ltd. | 2,860,000.00 | |
| Sonyo Compressor (Dalian)Co., Ltd. | 110,000,000.00 | |
| Total | 9,919,648.18 | 110,000,000.00 |
2.2 Other receivable
(1) The category of other receivables
| Items | Closing Balance | Opening Balance |
| Receivables and payables | 20,517,925.84 | 20,260,866.63 |
| Deposits | 6,406,578.63 | 8,478,407.11 |
| Petty cash | 1,091,501.16 | 580,451.46 |
| Total | 28,016,005.63 | 29,319,725.20 |
(2) Other receivable listed by account aging
| Aging | Closing Balance | Opening Balance |
| Within 1 year | 2,550,383.89 | 3,049,940.86 |
| 1-2 years | 1,676,604.63 | 3,316,384.23 |
| 2-3 years | 2,095,617.00 | 1,315,000.00 |
| Over 3 years | 21,693,400.11 | 21,638,400.11 |
| 3-4 years | 105,000.00 | 20,210,000.00 |
| 4-5 years | 20,180,000.00 | 229,835.11 |
| Over 5 years | 1,408,400.11 | 1,198,565.00 |
| Total | 28,016,005.63 | 29,319,725.20 |
(3) Bad debt provision details
| Category | Opening balance | Change during the year | Closing Balance | |||
| Accrued | Collected/ reversed | Written-off | Others | |||
| Bad debt provision | 436,059.46 | - | 47,716.13 | 388,343.33 | ||
| Total | 436,059.46 | - | 47,716.13 | 388,343.33 | ||
(5) Other receivables from the top 5 debtors
| Name | Category | Closing Balance | Aging | % of the total OR | Closing Balance of Provision |
| Top 1 | Other deposit | 1,100,000.00 | Over5 years, | 3.93% | 40,260.00 |
| Top 2 | Bid deposit | 800,000.00 | 2-3 years | 2.86% | 29,280.00 |
| Top 3 | Bid deposit | 800,000.00 | 1-2 years | 2.86% | 29,280.00 |
| Top 4 | Bid deposit | 300,000.00 | 2-3 years | 1.07% | 10,980.00 |
| Top 5 | Current funds | 250,000.00 | 1-2 years | 0.89% | 9,150.00 |
| Total | — | 3,250,000.00 | — | 11.61% | 118,950.00 |
3. Long-term equity investments
(1) Category of long-term equity investments
| Item | Closing Balance | Opening Balance | ||||
| Closing Balance | Provision | Book Value | Opening Balance | Provision | Book Value | |
| Investment of subsidiaries | 2,432,830,861.29 | 2,432,830,861.29 | 2,416,830,861.29 | - | 2,416,830,861.29 | |
| Investment of affiliates and JV | 526,673,332.98 | 526,673,332.98 | 513,550,283.58 | - | 513,550,283.58 | |
| Total | 2,959,504,194.27 | 2,959,504,194.27 | 2,930,381,144.87 | - | 2,930,381,144.87 | |
(2) Investments of subsidiaries
| Investee | Beginning balance | Provision for impairment at beginning of year | Increase/Decrease | Ending balance | Provision for impairment at year end | |||
| Increased | Decreased | Provision for impairment | Others | |||||
| Dalian Bingshan Group Engineering Co., Ltd | 293,749,675.77 | 293,749,675.77 | ||||||
| Dalian Bingshan Group Sales Co., Ltd | 20,722,428.15 | 20,722,428.15 | ||||||
| Dalian Bingshan Air-Conditioning Equipment Co., Ltd | 53,272,185.00 | 16,000,000.00 | 69,272,185.00 | |||||
| Dalian Bingshan Guardian Automation Co., Ltd | 50,638,361.52 | 50,638,361.52 | ||||||
| Dalian Bingshan-RYOSETSU Quick Freezing Equipment Co., Ltd | 59,356,051.19 | 59,356,051.19 | ||||||
| Dalian Universe Thermal Technology Co., Ltd | 48,287,589.78 | 48,287,589.78 | ||||||
| Investee | Beginning balance | Provision for impairment at beginning of year | Increase/Decrease | Ending balance | Provision for impairment at year end | |||
| Increased | Decreased | Provision for impairment | Others | |||||
| Wuhan New World Refrigeration Industrial Co., Ltd | 184,674,910.81 | 184,674,910.81 | ||||||
| Dalian Bingshan Engineering & Trading Co., Ltd | 71,537,064.86 | 71,537,064.86 | ||||||
| Sonyo Compressor (Dalian)Co., Ltd | 1,380,455,603.23 | 1,380,455,603.23 | ||||||
| Sonyo Refrigeration System (Dalian) Co., Ltd | 108,851,490.98 | 108,851,490.98 | ||||||
| Sonyo Refrigeration (Dalian) Co., Ltd | 145,285,500.00 | 145,285,500.00 | ||||||
| Total | 2,416,830,861.29 | 16,000,000.00 | 2,432,830,861.29 | |||||
(3) Joint ventures& affiliated companies
| Investee | Beginning balance | Increase/Decrease | Ending balance | Provision for impairment at year end | ||||||||
| Provision for impairment at beginning of year | Increased | Decreased | Gains and losses recognized under the equity method | Adjustment of other comprehensive income | Changes of other equity | Cash bonus or profits announced | Provision for impairment | Others | ||||
| 1. Affiliated company | ||||||||||||
| Dalian Honjo Chemical Co., Ltd | 8,160,024.36 | 13,068.28 | 8,173,092.64 | |||||||||
| Keinin-Grand Ocean Thermal Technology (Dalian) Co., Ltd | 57,579,975.00 | -1,810,055.67 | 55,769,919.33 | |||||||||
| Dalian Fuji Bingshan Vending Machine Co., Ltd | 67,610,418.09 | 1,246,957.50 | 68,857,375.59 | |||||||||
| Investee | Beginning balance | Increase/Decrease | Ending balance | Provision for impairment at year end | ||||||||
| Provision for impairment at beginning of year | Increased | Decreased | Gains and losses recognized under the equity method | Adjustment of other comprehensive income | Changes of other equity | Cash bonus or profits announced | Provision for impairment | Others | ||||
| MHI Bingshan Refrigeration (Dalian) Co., Ltd. | 16,543,655.54 | 86,728.24 | 16,630,383.78 | |||||||||
| Dalian Fuji Bingshan Vending Machine Sales Co., Ltd | ||||||||||||
| Jiangsu Jingxue Insulation Technology Co., Ltd | 144,354,903.91 | *.** | 3,220,344.00 | *.** | ||||||||
| Bingshan Metal Technical Service （Dalian） Co., Ltd. | 173,250,850.13 | 14,709,358.00 | 187,960,208.13 | |||||||||
| Dalian Bingshan Group Huahuida Financial Leasing Co., Ltd | 46,050,456.55 | *.** | 636,409.95 | *.** | ||||||||
| Total | 513,550,283.58 | 16,979,803.35 | 3,856,753.95 | 526,673,332.98 | ||||||||
4. Operating revenue and cost
| Item | 2024.01-06 | 2023.01-06 | ||
| Revenue | Cost | Revenue | Cost | |
| Revenue from main operation | 385,581,466.34 | 327,057,614.66 | 533,710,281.94 | 442,877,817.72 |
| Revenue from other operation | 19,129,432.27 | 12,159,687.41 | 27,796,909.63 | 19,695,636.49 |
| Total | 404,710,898.61 | 339,217,302.07 | 561,507,191.57 | 462,573,454.21 |
5. Investment income
| Items | 2024.01-06 | 2023.01-06 |
| Long-term equity investment gain under cost method | 6,062,894.23 | 24,063,498.94 |
| Long-term equity investment gain under equity method | 16,979,803.35 | -183,975.05 |
| Gain from holding of other non-current financial assets | 4,364,003.20 | 5,782,304.24 |
| Discounting fees for bank acceptance note | ||
| Gain from disposing long-term equity investment | ||
| Gain from disposal of other non-current financial assets | ||
| Gain on debt restructuring | - | - |
| Total | 27,406,700.78 | 29,661,828.13 |
6. Others
NoneXVIII. Approval of Financial Statements
The parent and consolidated financial statements of the Company were approved by the Boardof Directors of the Company on August 14, 2024.
XIX. Supplementary Information to the Financial Statements
1. Return on equity and earnings per share
| Profit of report period | Weighted average return on net assets | Earnings per share (EPS) | |
| Basic EPS | Diluted EPS | ||
| Net profit attributable to shareholders of parent company | 2.55% | 0.09 | 0.09 |
| Net profit after deducting non-recurring gains and losses attributable to shareholders of parent company | 2.19% | 0.08 | 0.08 |
Bingshan Refrigeration & Heat Transfer Technologies Co., LtdAugust 14, 2024