| Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd |
| For the year ended December 31, 2023 |
| Auditor’s Report |
| Reference | Page |
| Auditor’s report | 1-5 |
| Financial statements | |
| — Consolidated balance sheet — Balance sheet of parent company | 1-2 3-4 |
| — Consolidated income statement — Income statement of parent company | 5 6 |
| — Consolidated cash flow statement — Cash flow statement of parent company | 7 8 |
| — Consolidated statements of changes in equity | 9-10 |
| — Statements of changes in equity of parent company | 11-12 |
| — Notes to financial statement | 13-156 |
Auditors’ Report
(English Translation for Reference Only)
To the shareholders of Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd
1. Opinion
We have audited the accompanying financial statements of Bingshan Refrigeration &Heat Transfer Technologies Co., Ltd (“Bingshan Refrigeration & Heat Company”),which comprise the consolidated and company balance sheets as at 31 December2023, and the consolidated and company income statements, the consolidated andcompany cash flow statements, the consolidated and company statements of changesin equity for the year then ended, and notes to these financial statements.In our opinion, the accompanying financial statements have been prepared inaccordance with the requirements of Accounting Standards for Business Enterprises,in all material respects and present fairly the consolidated and the financial position ofBingshan Refrigeration & Heat Company as at 31 December 2023, and of theirconsolidated and the company’s financial performance and cash flows for the yearthen ended.
2. Basis for Opinion
We conducted our audit in accordance with China Standards on Auditing for ChineseCertified Public Accountants. Our responsibilities under those standards are furtherdescribed in the “Auditor’s Responsibilities for the Audit of the Financial Statements”section of our report. We are independent of Bingshan Refrigeration & Heat Companyin accordance with the Code of Ethics for Chinese Certified Public Accountants, andwe have fulfilled our other ethical responsibilities of the code. We believe that theaudit evidence we have obtained is sufficient and appropriate to provide a basis forour audit.
3. Key Audit Matters
Key audit matters are those matters that we consider, in our professional judgment,were of most significance in our audit of the financial statements of the current period.These matters were addressed in the context of our audit of the financial statements asa whole and, in forming our audit opinion thereon, and we do not express a separateopinion on these matters.
| Revenue Recognition | |
| Key Audit Matter | How the matter was addressed in the audit |
| As stated in the Note ‘ No.44,VI. Notes to Consolidated Financial Statements’, revenue on the consolidated statements for the year ended as of December 31, 2023, is 4,815.9415 million Yuan. Revenue of Bingshan Refrigeration & Heat Company and its subsidiaries mainly come from sales of products and installation project. We consider the revenue as the key audit matter, because of the significance of revenue to the overall financial statements, and also the inherent risk of revenue manipulation by the management so for the special purpose. | The main audit procedures carried out for addressing the key audit matters are as follows: 1. Understand and evaluate effectiveness of design and operation of the management’s internal control over revenue 2. Carried out analytical review and evaluate the reasonableness of sales income and gross profit margin by segmenting the business and sales in conjunction with industry development and actual situation of Bingshan Refrigeration & Heat Company. 3. Sampling test the sales contracts, identify the clause and condition in respect to the contract performance obligation, consideration and risk and reward transfer of the ownership. Evaluate the revenue recognition of Bingshan Refrigeration & Heat Company whether it is in line with the accounting standards. 4. Sampling select product sales revenue record, reconcile to sales invoice, contracts, dispatch note, acceptance note; Sampling select installation sales revenue record, reconcile to invoice, installation contracts and completion report and Evaluate the recognition of revenue whether is in line with the accounting standards 5. Checking actual installation cost by reviewing the contract budget, contract, invoice and supportive document with signature for the equipment received to evaluate the cost whether it really incurred. 6. Combined with receivable audit, perform confirmation procedures for key clients 7. Perform cut-off test so to ensure whether the transaction is recorded into the appropriate accounting period. |
4. Other Information
The management of Bingshan Refrigeration & Heat Company (hereinafter referred toas the “Management”) is responsible for the other information. The other informationcomprises the information included in the Bingshan Refrigeration & Heat Company2023 annual report, but does not include the financial statements and our auditor’sreport thereon.Our opinion on the financial statements does not cover the other information and wedo not express any form of assurance conclusion thereon.In connection with our audit of the financial statements, our responsibility is to readthe other information and, in doing so, consider whether the other information ismaterially inconsistent with the financial statements or our knowledge obtained in theaudit or otherwise appears to be materially misstated.If, based on the work we have performed, we conclude that there is a materialmisstatement of the other information, we are required to report that fact. We havenothing to report in this regard.
5. Responsibilities of the Management and Those Charged with Governancefor the Financial StatementsThe Management is responsible for the preparation of the financial statements inaccordance with Accounting Standards for Business Enterprises to achieve fairpresentation; and designing, implementing and maintaining internal control which isnecessary to enable that the financial statements are free from material misstatement,whether due to fraud or error.In preparing the financial statements, the Management is responsible for assessingBingshan Refrigeration & Heat Company’s ability to continue as a going concern,disclosing, as applicable, matters related to going concern and using the goingconcern basis of accounting unless the Management either intends to liquidateBingshan Refrigeration & Heat Company or to cease operations, or have no realisticalternative but to do so.Those charged with governance are responsible to overseeing Bingshan Refrigeration& Heat Company’s financial reporting process.
6. Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial
statements as a whole are free from material misstatement, whether due to fraud or
error, and to issue an auditor’s report that includes our opinion. Reasonableassurance is a high level of assurance, but is not a guarantee that an audit conducted inaccordance with auditing standards will always detect a material misstatement when itexists. Misstatements can arise from fraud or error and are generally consideredmaterial if, individually or in the aggregate, they could reasonably be expected toinfluence the economic decisions of users taken on the basis of these financialstatements.During the course of audit in accordance with auditing standards, we exerciseprofessional judgment and maintain professional skepticism. We also carry out thefollowing works:
(1) Identify and assess the risks of material misstatement of the financial statements,whether due to fraud or error, design and perform audit procedures responsive tothose risks, and obtain audit evidence that is sufficient and appropriate to provide abasis for our audit. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error, as fraud may involve collusion,forgery, intentional omissions, misrepresentations, or the override of internal control.
(2) Obtain an understanding of internal control relevant to the audit in order to designaudit procedures that are appropriate in the circumstances, but not for the purpose ofexpressing an opinion on the effectiveness of its internal control (this sentence wouldbe deleted in circumstance when we are also responsible to issue an opinion on theeffectiveness of internal control in conjunction with the audit of the financialstatements).
(3) Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by the Management.
(4) Conclude on the appropriateness of the Management’s use of the going concernbasis of accounting and, based on the audit evidence obtained, whether a materialuncertainty exists related to events or conditions that may cast significant doubt onBingshan Refrigeration & Heat Company’s ability to continue as a going concern. Ifwe conclude that a material uncertainty exists, we are required to draw attention inour auditor’s report to the related disclosures in the financial statements in accordancewith the auditing standards or, if such disclosures are inadequate, we shall modify ouropinion. Our conclusions are based on the audit evidence obtained up to the date ofour auditor’s report. However, future events or conditions may cause BingshanRefrigeration & Heat Company to cease to continue as a going concern.
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTD.Notes to financial statementsJanuary 1, 2023 to December 31, 2023(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
I. General InformationBingshan Refrigeration & Heat Transfer Technologies Co., Ltd (the “Company”) previouslynamed as Dalian Refrigeration Company Limited, was reorganized and reformed from mainpart of former Dalian Refrigeration Factory. On December 8, 1993, the Company went to thepublic as a listed company at Shenzhen Stock Exchange Market. On March 20, 1998, theCompany successfully went to the public at B share market and listed at Shenzhen StockExchange Market with total share capital of RMB350,014,975.00Yuan. The registeredaddress is No. 106 East Liaohe Road, Dalian Economic and Technological DevelopmentZone, Liaoning Province, as same as the headquarters’ address. The unified social credit codeis 912102002423613009 on the business license.According to the 13
th meeting of the 6
thgeneration of board, extraordinary general meetingfor 2015 fiscal year and ' Restricted share incentive plan (draft)', the Company planned tointroduce an ordinary share 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, 2015, the Company received new added share capital ofRMB10,150,000.00Yuan.The general meeting for 2015 fiscal year held on April 21, 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 onMay 5, 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 June 4, 2015 and the 2
ndinterimshareholders’ meeting was held on June 24, 2015, meeting deliberated and passed theproposal of non-public offering of ‘A shares’. China’s Securities Regulatory Commissionissued SFC license [2015]3137 on December 30, 2015, approving that new non-publicoffering cannot exceeded 38,821,954 numbers of shares. The company implemented the postmeeting procedures for China’s Securities Regulatory Commission, which is regardingadjustment of bottom price and the number of the shares issued after the implementation ofprofit distribution policy of 2015 in May, 2016, and accordingly revised the upper limit ofnon-public offering of share to58,645,096 number of new ‘A shares’. The company issued thenon-public offering of 58,645,096 number of ‘A shares’ to 7 investors, and as a result, thetotal number of shares of the Company is changed to 598,892,558 shares, and the par value is1yuan per share and the total share capital is 598,892,558.00Yuan.According to the ‘Restricted Share Incentive Plan(draft) of Dalian Refrigeration CompanyLimited for the year of 2016’ and the ‘Proposal regarding the shareholders’ meeting
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTD.Notes to financial statementsJanuary 1, 2023 to December 31, 2023
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
authorized the board of directors to implement the Restricted Share Incentive Plan’ approvedon the 3
rdprovisional general meeting held on September 13, 2016, the 9
th
meeting of the 7
th
generation of board deliberated and passed the ‘Proposal about granting the restricted sharesto incentive targets’ on September 20, 2016 and set September 20
, 2016 as share granted date,and granted 12,884,000 number of restricted shares to 118 incentive targets at granted priceof 5.62Yuan per share. By November 22, 2016, The Company has actually received thenewly subscribed registered share capital of 12,884,000.00Yuan subscribed by incentivetargets.On May 19, 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 RMB856,487,181.00Yuan.On December 28, 2017, The Company held the 3rd extraordinary shareholders meeting in2017, and reviewed and approved the “Proposal on Repurchasing and Retiring PartiallyRestricted Stocks of the 2016 Restricted Stock Incentive Plan”. On March 8, 2018, after TheCompany's repurchase and cancellation, The Company implemented the correspondingcapital reduction procedures according to law. The registered capital of The Company waschanged from 856,487,181.00Yuan to 855,908,981.00 Yuan.On May 4, 2018, The Company held the 21
st meeting of the 7
thBoard of Directors, andreviewed and approved the “Proposal on Repurchasing and Retiring Partially RestrictedStocks of the 2015 Restricted Stock Incentive Plan". On June 29, 2018, after The Company'srepurchase and cancellation, The Company implemented the corresponding capital reductionprocedures according to law. The registered capital of The Company was changed from855,908,981.00 Yuan to 855,434,087 .00Yuan.On January 17
th, 2019, the 1
stinterim shareholders’ meeting was held and approved for“Proposal on Termination of the 2016 Restricted Stock Incentive Plan and Repurchasing andRetiring Restricted Stocks Plan”. Up to February 25
th, 2019, The Company has completed therepurchasing and retiring stocks plan, respectively The Company shall perform thecorresponding capital reduction procedures in accordance with the law and the registeredcapital decreased from 855,434,087.00Yuan to 843,212,507.00Yuan.On December 20
th
, 2019, The Company held the 7
th
meeting of the 8
thBoard 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 general equipment manufacturing industry. The main business activities
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTD.Notes to financial statementsJanuary 1, 2023 to December 31, 2023(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
are the research and development, production and sales of various industrial refrigerationcomponents, as well as the design, production and installation of complete engineeringprojects. The main products include: scroll type, piston type, screw type compressor units,cold water machine and other refrigeration equipment and all kinds of complete sets ofrefrigeration projects.This financial report is approved by the board of directors on April 24,2024. The financialstatements will be reviewed at general meeting.II. Financial Statements Preparation Basis
（1） Preparing basis
The group’s financial statements are prepared according to the actual occurred transactionsand events, and in accordance with ‘Accounting Standards for Business Enterprises’, itsapplication guidelines, interpretations and other relevant provisions promulgated by theMinistry of Finance (collectively referred to as "Accounting Standards for BusinessEnterprises") and " No. 15 of Information Disclosure and Reporting Rules for Publicly ListedCompanies - General Provisions for Financial Reports" (revised in 2023) promulgated by theChina Securities Regulatory Commission (hereinafter referred to as the "CSRC").
（2） Going concern
The group has assessed the capacity to continually operate within 12 months since December31, 2023, and hasn’t found the major issues impacting on the sustainable operation ability.The Company’s financial statements are prepared on the basis of going concern assumption.III. Significant Accounting Policies and Accounting Estimates
1. Declaration for compliance with accounting standards for business enterprisesThe financial statements are prepared in line with the requirements of Accounting Standardfor Business Enterprise, and reflect the relative information of the financial position for theyear ended as of December 31, 2023, operating performance, cash flow of the Company andthe group for the year then ended 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
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTD.Notes to financial statementsJanuary 1, 2023 to December 31, 2023
(The currency is in RMB Yuan except otherwise indicated)(English translation for reference only)
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
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTD.Notes to financial statementsJanuary 1, 2023 to December 31, 2023
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
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 thecombining date. As for the balance between the carrying amount of the net assets obtained bythe combining party and the carrying amount of the consideration paid by it, the capitalsurplus shall be adjusted. If the capital surplus is not sufficient to be offset, the retainedearnings shall be 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 sameultimate control 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 theacquisition date. The difference, when combination cost exceeds proportionate share of thefair value of identifiable net assets of acquire should be recognized as goodwill. If thecombination cost is less than proportionate share of the fair value of identifiable net assets ofacquiree, firstly, fair value of identifiable asset, liability or contingent liability shall bereviewed, and so the fair value of non-monetary assets or equity instruments issued in thecombination consideration , after review, still the combination cost is less than proportionateshare of the fair value of identifiable net assets of acquire, the difference should be recognizedas 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 previouslyheld equity interest in the acquiree at its fair value on acquisition date and recognize the gainor loss as investment income for the current period. Other comprehensive income, underequity method accounting rising from the interest held in acquiree in relation to the periodbefore the acquisition, and changes in the value of its other equity other than net profit or loss,other comprehensive income and profit appropriation shall be transferred to investment gainor loss for the period in which the acquisition incurs, excluding the other comprehensiveincome from the movement on the remeasurement of ne asset or liability of defined benefitplan.
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTD.Notes to financial statementsJanuary 1, 2023 to December 31, 2023(The currency is in RMB Yuan except otherwise indicated)(English translation for reference only)
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 ofequity”, minority interest of profit and loss”, “other comprehensive income attributed tominority interest” 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,no enough 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 share
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTD.Notes to financial statementsJanuary 1, 2023 to December 31, 2023(The currency is in RMB Yuan except otherwise indicated)(English translation for reference only)
disposal 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 investmentgain/loss for the period and goodwill shall be written off accordingly. Other comprehensiveincome relevant to share investment in subsidiary shall be transferred to investment gain /lossfor the period 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 individualtransaction 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.If the equity investment in the subsidiary is disposed of by stages through multipletransactions until the control is lost, and it is not a bundled transaction, each transaction shallbe accounted for 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 ofcash and 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
st
day 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 inthe current profits and losses. Invested capital in foreign currency shall be converted into
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTD.Notes to financial statementsJanuary 1, 2023 to December 31, 2023(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
reporting currency at FX rate at when the investment is received, and no foreign exchangedifference arises 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 assetexpire, or 2) the entity transfers contractual rights to receive the cash flows of a financial asset,or assumes a contractual obligation to pay those cash flows received to the 3
rdparty in fullamount in time according to the ‘passing-through’ agreement and the entity substantiallytransfers all the risks and rewards of ownership of the financial asset in nature, or the entityneither transfers nor retains substantially all the risks and rewards of ownership of thefinancial asset, but the entity has not retained control.Financial liabilities shall be derecognized if the obligation of the liability is fulfilled,cancelled or expired. An exchange between an existing borrower and lender of debtinstruments with substantially different terms shall be accounted for as an extinguishment ofthe original financial liability and the recognition of a new financial liability. Similarly, asubstantial modification of the terms an existing financial liability shall be accounted for as anextinguishment of the original financial liability and the recognition of a new financialliability. The difference between the carrying amount of a financial liability extinguished andthe consideration paid, including any non-cash assets transferred or liabilities assumed, shallbe recognized 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 thebasis of both the group’s business model for managing the financial assets and the contractualcash flow characteristics of the financial asset. Only when the business model for managingthe financial 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 management
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTD.Notes to financial statementsJanuary 1, 2023 to December 31, 2023(The currency is in RMB Yuan except otherwise indicated)(English translation for reference only)
personnel, the risks affecting the performance of financial assets and the way in which theyare managed, and the way in which the relevant business managers are remunerated. Inassessing whether the objective is to collect contract cash flows, the group needs to make ananalytical judgment on the reasons, timing, frequency and value of the sale of the financialassets before the maturity date.In determining the contract cash flow characteristics, the group is required to determinewhether the contract cash flow is only the payment of principal and interest based on theoutstanding principal, (including the assessment of the time value of money correction,judging any significant difference between it and the baseline cash flow/ for financial assetscontaining early repayment characteristics, is required to determine whether the fair value ofearly repayment features 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
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTD.Notes to financial statementsJanuary 1, 2023 to December 31, 2023
(The currency is in RMB Yuan except otherwise indicated)(English translation for reference only)
hedging relationship shall be recognized in other comprehensive income apart from interestincome, impairment loss and foreign exchange difference. When this type of financial assetsis derecognized, accumulated gain or loss previously in the other comprehensive income shallbe out 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 losspreviously 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 isequity instruments.
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 throughprofit or loss. The group shall subsequently measure this financial asset at its fair value,except for hedging accounting, any gain or loss on FVTPL shall be accounted into profit andloss. The financial assets of this category include: tradable financial asset other non-currentfinancial asset.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 groupshall initially classify all financial liabilities as it measured at amortized cost or financialliabilities at fair value through profit or loss. For financial liabilities that are measured at fairvalue, the related transaction costs are directly included in current profit or loss, and thosecosts of other categories of financial assets are included in their initial recognized amounts.Financial liabilities subsequent measurement based on the classification
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTD.Notes to financial statementsJanuary 1, 2023 to December 31, 2023(The currency is in RMB Yuan except otherwise indicated)(English translation for reference only)
1) Financial liabilities as it subsequently measured at amortized cost
Effective interest method is applied to financial liabilities as subsequently measured atamortized cost
2) Financial liability as it measured at fair value through profit or loss
Financial 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 netgain or loss arising from changes in fair value are recorded in profit or loss for the period inwhich they are incurred. Financial liability designated as it measured at fair value throughprofit or loss shall be subsequently measured at fair value, except for changes in fair valuecaused by changes in the group's own credit risk, which are recognized in othercomprehensive income, other changes in fair value are recognized in profit or loss for thecurrent period; The group recognizes all fair value changes (including the amount affected bychanges in its own credit risk) in profit or loss if the inclusion of changes in fair valuecaused by changes in its own credit risk in other comprehensive income would cause orwiden the accounting mismatch in profit 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 measuredat fair 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 adefault occurring as the weights. A credit loss herein is referred to as the present value, atoriginal effective rate, of the difference between the contractual cash flows that are due to thegroup under the contract; and the cash flows that the Company expects to receive, that's thepresent value of the total cash shortage. The group shall measure expected credit losses of afinancial instrument in a way that reflects: ①an unbiased and probability?weighted amountthat is determined 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 atthe reporting date about past events, current conditions and forecasts of future economicconditions.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 common
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTD.Notes to financial statementsJanuary 1, 2023 to December 31, 2023(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
characteristics 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 andestimates, the group extrapolates the expected changes in the debtor's credit risk based onhistorical repayment data combined with factors such as economic policies, macroeconomicindicators and industry risks. Different estimates may affect the provision for impairment, andthe provision already made may not equal the actual amount of impairment losses in thefuture.
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 lossprovision at an amount equal to the whole lifetime expected credit losses.The group determines the expected credit loss of trade receivable on the basis of portfolioswith common characteristics of credit risk, which are considered by expected credit lossmeasurement reflection, by reference to historical experience of credit loss and bycomparison of receivable past due days/ receivable age with default risk rate, unless the singlecredit loss is separately recognized for contractual payments that is significant in amount andcredit impaired. If certain client is significant different from others in terms of credit riskcharacteristics, or the client’s credit risk has significantly increased, such as experiencingsevere finance difficulty, its expected credit loss is obviously higher than it to be ataccounting age, the group will make separate 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 contractassets), the group determines that aging is the primary factor affecting its credit risk andtherefore, the group assesses its expected credit losses on the basis of aging portfolios. Thegroup calculates the overdue age based on the payment date agreed in the contract.No expected credit loss is recognized for receivables from related party within consolidated
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTD.Notes to financial statementsJanuary 1, 2023 to December 31, 2023
(The currency is in RMB Yuan except otherwise indicated)(English translation for reference only)
scope 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 andcalculates interest income based on the carrying balance and effective interest rate; If thecredit risk has increased significantly since the initial recognition but no credit impairmenthas occurred, in the second stage, the group measures the loss provision at an amountequivalent to the expected credit loss over the entire duration and calculates interest incomebased on the carrying balance and effective interest rate; If credit impairment occurs afterinitial recognition, in the third stage, the group measures the loss provision at an amountequivalent to the expected credit loss over the entire duration and calculates interest income atamortized costs and effective interest rates. For financial instruments with only low credit riskat the balance sheet date, the group assumes that their credit risk has not increasedsignificantly since initial recognitionThe 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 creditlosses over 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 overallexpected credit 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
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTD.Notes to financial statementsJanuary 1, 2023 to December 31, 2023
(The currency is in RMB Yuan except otherwise indicated)(English translation for reference only)
（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 theall risks and rewards of the financial asset are neither transferred nor retained, but the grouphas given 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 whichit continues 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 abusiness 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) ,that was previously recorded under other comprehensive income is transferred into profit orloss for the period.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 heldwithin a business model whose objective is not only for collecting contractual cash flows butalso for sale; ; ②the contractual terms of the financial asset give rise on specified dates tocash flows that are solely payments of principal and interest based on the principal amountoutstanding ) and the above-mentioned allocated carrying amount is charged to profit or lossfor 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.
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTD.Notes to financial statementsJanuary 1, 2023 to December 31, 2023(The currency is in RMB Yuan except otherwise indicated)(English translation for reference only)
Financial guarantee amount means the maximum amount of consideration received that willbe required to be repaid.
（6） Distinguish between financial liability and equity instrument and accountingFinancial liability and equity instrument shall be distinguished in accordance with thefollowing standards: ① if the group cannot unconditionally avoid paying cash or financialasset to fulfil a contractual obligation, the contractual obligation is qualified or financialliability. For certain financial instrument, although there are no clear terms and conditions toinclude obligation of paying cash or other financial liability, contractual obligation mayindirectly be formed through other terms and conditions. ②the group’s own equityinstrument shall also be considered whether it is the substitute of cash, financial asset or it isthe remaining equity, after the issuer deducts liability, enjoyed by the equity holder , if it mustor can be used to settle a financial asset. If the former, the instrument is a financial liability ofthe issuer, otherwise it is an equity instrument of the issuer. In certain circumstances, financialinstrument contract is classified as financial liability, if financial instrument contract specifiesthe Company must or can use its own equity to settle the financial instrument, the contractualamount of right or obligation equals to that of the numbers of own equity instrument availableor to be paid multiplied by fair value when settling, nevertheless the amount is fixed, orvaried partially or fully based on the its own equity’s market price(such as interest rate,certain commodity’s or financial instrument’s price variance).When classifying a financial instrument (or its component) in the consolidated statements, thegroup 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, theinstrument shall 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
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTD.Notes to financial statementsJanuary 1, 2023 to December 31, 2023
(The currency is in RMB Yuan except otherwise indicated)(English translation for reference only)
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 legalright to recognized offset amount and the right is enforceable. ②the Company plans toreceive or a legal 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 activitiesless the estimated costs to be incurred at completion, estimated selling expenses and relatedtaxes.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 realizablevalue, the inventory of goods in stock and materials used for sale are determined at theestimated selling 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 priceof the finished goods produced less the estimated costs to be incurred up to completion,estimated selling expenses 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 tothe client, then the group has the right to consideration in exchange of the goods because oneof the goods are delivered, but the consideration’s collection is conditioned on the othergoods delivery, in this case, the right to consideration shall be recognized as contract asset.
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTD.Notes to financial statementsJanuary 1, 2023 to December 31, 2023
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
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 unconditionalbefore the group transfers a good or service to the customer, the group shall present thecontract as a contract liability when the payment is made or the payment is due (whichever isearlier).
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 toobtain a contract. Cost to fulfill the contract is presented under inventory and othernon-current assets. Cost to obtain a contract is presented under other current assets and othernon-current assets.If the costs incurred in fulfilling a contract with a customer are not within the scope ofanother Standard such as inventory , fixed assets or intangible assets , an entity shallrecognize an asset from the costs incurred to fulfill a contract only if those costs meet all ofthe following criteria: the costs relate directly to a contract or to an anticipated contract,including direct labor, direct materials and overheads which is clearly stated to be borne bythe client and any other cost in line with the contract; the costs enhance resources of the groupthat will be used in performance obligations in the future; and the costs are expected to berecovered.An asset as the incremental costs of obtaining a contract with a customer shall be recognizedif the 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 isone year or less. The incremental costs of obtaining a contract are those costs that the groupincurs to obtain a contract with a customer that it would not have incurred if the contract hadnot been obtained (for example, a sales commission). Other expenses incurred in order toobtain a contract rather than the incremental cost, and expected to be recovered (regardless ofwhether the contract is obtained such as travelling expenses) shall be recognized as anexpense when incurred, unless those costs are explicitly chargeable to the customer.
(2) Amortization of asset relevant to contract cost
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTD.Notes to financial statementsJanuary 1, 2023 to December 31, 2023
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
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 thefollowing two differences, the group will make the impairment provision for the excessivepart and recognize the asset impairment loss: ① The remaining consideration that the groupis expected to obtain due to the transfer of the commodities related to the asset; ② Estimatethe costs 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 areinvestments in 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 jointlycontrol the formulation of these policies with other parties. Significant influence exists whenthe entity directly or indirectly owned 20% or more but less than 50% voting shares in theinvestee, unless there is explicit evidence that the company cannot participate in theproduction and operation decisions 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 activitiespolicy-making processes, material transactions between the investor and the investee,interchange of managerial 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 thecontractually agreed sharing of control of an arrangement, which exists only when decisionsabout the relevant activities require the unanimous consent of the parties sharing control. Thegroup’s judgement on joint control is based on the joint arrangement that all participants orcombinations of participants collectively control the arrangement and that decisions relating
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTD.Notes to financial statementsJanuary 1, 2023 to December 31, 2023
(The currency is in RMB Yuan except otherwise indicated)(English translation for reference only)
to the activities of the arrangement must be made with the unanimous consent of thoseparticipants who collectively control the arrangement.
(2) Accounting
The group initially measures the long-term investment in line with the initial cost foracquiring the 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 acquiredcompany. If the carrying amount of net assets at the combination date in the acquiredcompany 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,the carrying amount of the equity investment held previously plus newly increased investmentcost are 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.When more investment is added, it shall increase the carrying amount of investment byadjusting the fair value of additional investment and relevant transaction expenses. Cashdividend or profit declared by investee shall be recognized as investment gain/loss for theperiod based on the proportion share in the investee.The Company adopts equity method for investment in joint venture and affiliate. Underequity method, if the initial investment cost is greater than the share of fair value of theidentifiable net assets in the investee, the initial investment cost of long-term equityinvestment is no need to be adjusted; If the initial investment cost is less than the share of fairvalue of the identifiable net assets in the investee , the difference shall be recorded into thecurrent profit and loss, and the cost of long-term equity investment shall be adjusted at thesame time.
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTD.Notes to financial statementsJanuary 1, 2023 to December 31, 2023(The currency is in RMB Yuan except otherwise indicated)(English translation for reference only)
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 atthe acquisition date, after making appropriate adjustments thereto in conformity with theaccounting policies and accounting period, and offsetting the unrealized profit or loss fromthe inter-group transactions, not constituting the business, between the entity and itsassociates and joint ventures according to the shareholding attributable to the group (fullamount of loss shall be recognized if the inter-group transaction is impairment loss). Thegroup recognizes net losses incurred by investee to the extent that the carrying value oflong-term equity investments and other long-term interests substantially constituting netinvestments in investee are written down to zero, except where the group is obliged to bearadditional 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 equityinvestment is 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 relatedassets or liability when equity method is not used any longer. The movements ofshareholder’s equity, other than the net profit or loss, other comprehensive income and profitdistribution previously recorded in the shareholder’s equity of the Company are recycled toinvestment income for the period on disposal.If the remaining equity after the partially disposal is still accounted for under the equitymethod, the relevant other comprehensive income previously recognized under the equitymethod, is treated on the same basis as the direct disposal of the relevant assets or liabilitiesby the investee and is carried forward on a proportional basis, and the owner's equity, whichis apart from net profit and loss, other comprehensive income and profit distribution of theinvestee, shall be recognized and proportionally transfers to current investment income.Where the entity has no longer joint control or significant influence in the investee companyas a result of partially disposal of the investment, the remaining investment will be accountedfor in line with the Recognition and Measurement of Financial Instruments Standard -No 22of Accounting Standards for Business Enterprises(No7 Caikuai [2017]), and the differencebetween the fair value of remaining investment at the date of losing joint control orsignificant influence and its carrying amount shall be recognized in the profit or loss for theyear.
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTD.Notes to financial statementsJanuary 1, 2023 to December 31, 2023
(The currency is in RMB Yuan except otherwise indicated)(English translation for reference only)
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 forusing equity method providing remaining joint control or significant influence over theinvestee company. The difference between carrying amount of disposed investment andconsideration received actually shall be recognized as investment gain or loss for the period,and investment shall be adjusted accordingly as if it was accounted for under equity modelsince acquisition. Where the entity has on longer joint control or significant influence in theinvestee as a result of disposal, the investment shall be accounted for in accordance with theRecognition and Measurement of Financial Instruments Standard -No 22 of AccountingStandards for Business Enterprises(No7 Caikuai [2017]), and difference between the carryingamount and disposal consideration shall be recognized as investment gain or loss for theperiod, and the difference between the fair value of remaining investment at the date of losingcontrol and its carrying amount 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 thepurpose of producing goods, rendering services, leasing or for operation & management, andhave more than 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:
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTD.Notes to financial statementsJanuary 1, 2023 to December 31, 2023(The currency is in RMB Yuan except otherwise indicated)(English translation for reference only)
| No | Category | Useful life (years) | Estimated net residual value rate (%) | Annual depreciation 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 anddepreciation method at the end of each year. If any change has occurred, it shall be regardedas a change in the 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 theconstruction period, the capitalized borrowing cost and other related expenses before theconstruction reaches 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 confirmationof their 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 review
procedureUse right of land shall be amortized evenly within the amortization period since the remised
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTD.Notes to financial statementsJanuary 1, 2023 to December 31, 2023(The currency is in RMB Yuan except otherwise indicated)(English translation for reference only)
date. 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 theperiod according to the usage of the assets. At the end of the year, for definite life ofintangible assets, their estimated useful life and amortization method shall be assessed. Anychange shall be treated 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,expenditure are expenses directly relevant to research activity, including R&D employee’ssalary, materials, depreciation, technology cooperation cost and assessment testing fees. Atdevelopment phase, expenses can be capitalized only when meeting the following conditions:
(a)the technical feasibility of completing the intangible asset so that it will be available foruse 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 intangibleasset or the intangible asset itself or, if it is to be used internally, the usefulness of theintangible 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 andloss account.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,investment property under cost model, fixed assets, construction in progress, right-of-useasset and intangible assets with definite useful life may be impaired. If there is any indicationthat an asset may be impaired, the asset will be tested for impairment. Goodwill and
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTD.Notes to financial statementsJanuary 1, 2023 to December 31, 2023(The currency is in RMB Yuan except otherwise indicated)(English translation for reference only)
intangible asset with infinite useful life and development cost not reaching available for usestatus, are tested for impairment annually no matter there is any indication of impairment ornot.
(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 flowsexpected to be derived from the asset. After impairment test, any difference of carryingamount over 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 isindependent from 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 businesscombination to the relevant asset group or to the relevant asset group combination which isdifficult to allocate to the relevant asset group，in a reasonable way from the date of purchase.When conducting impairment tests on goodwill contained within the related asset group orasset group combination, if there are signs of impairment in the asset group or asset groupcombination related to goodwill, the impairment test shall firstly be conducted on the assetgroup or asset group combination excluding goodwill, and the recoverable amount shall becalculated and compared with the relevant carrying value so to recognize the correspondingimpairment loss; Then, an impairment test is conducted on the asset group or asset groupcombination containing goodwill to compare the carrying value with the recoverable amount.If the recoverable amount is lower than the carrying value, the impairment loss amount is firstoffset against the carrying value of goodwill allocated to the asset group or asset groupcombination, and then offset the carrying value of the asset group and asset groupcombination based on the proportion of the carrying value of other assets in the asset group orasset group combination without goodwill.
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTD.Notes to financial statementsJanuary 1, 2023 to December 31, 2023(The currency is in RMB Yuan except otherwise indicated)(English translation for reference only)
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 amortizedevenly within its beneficial period. The remaining unamortized expense should be chargedinto income statement if long-term prepaid expense can not bring the beneficial inflows.Landscape fees will be amortized for 10 years and renovation& decoration fees will beamortized for 5-10 years.
21. Employee benefits
Employee’s benefit comprises short-term benefit, post-employment benefit, terminationbenefit and 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 renderedby the 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 contributionplan, liability shall be recognized based on the contributed amount made by the Company toseparate entity at the balance sheet date in exchange of employee service for the period and itshall be recorded into current profit and loss account or relevant cost of assets in accordancewith beneficial 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
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTD.Notes to financial statementsJanuary 1, 2023 to December 31, 2023
(The currency is in RMB Yuan except otherwise indicated)(English translation for reference only)
be reliably 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 ofgoods or services refers to the ability to direct the use of, and obtain substantially all of theremaining benefits 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 andthe entity has an enforceable right to payment for performance completed to date
(1) Revenue policy from sales
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTD.Notes to financial statementsJanuary 1, 2023 to December 31, 2023
(The currency is in RMB Yuan except otherwise indicated)(English translation for reference only)
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 thearrival acceptance is completed by customers, having taken all followings into consideration:
present debt collection right entitled to the sales of goods, the transfer of the main risks andrewards in the ownership of the goods, the transfer of the legal ownership entitled to thegoods, the transfer of 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 termaccording to the performance progress, which is determined by the percentage of thecumulative actual cost to expected total contract cost. When the performance progress can notbe estimated reasonably, the group recognizes the revenue to the extent where the alreadyincurred cost can be 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 shallbe allocated 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 transaction
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTD.Notes to financial statementsJanuary 1, 2023 to December 31, 2023
(The currency is in RMB Yuan except otherwise indicated)(English translation for reference only)
price and, therefore, of revenue unless the payment to the customer is in exchange for adistinct good or service. Accordingly, the revenue shall be recognized at the later of therevenue recognition and the consideration paid to a customer.For sales with a right of return, the group recognizes the revenue for the considerationexpected to have the right to receive arising from transferring the goods to customers whenthe customer receives the control right over the relevant goods, and recognizes the expectedrefund amount as provision. At the same time, receivable of return cost, as an asset, shall berecognized for the carrying value of the returned goods when it is expected to be transferredless expected cost for getting it back (including decline in value) and net amount of the aboveasset cost shall be carried over to the cost. At every balance sheet date, the group will reassessthe future sales returns 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 thecontrol 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 offixed amount or conclusive evidence indicates relevant conditions for financial support aremet and expect 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 fairvalue. If fair value cannot be determined reliably, it is measured at a nominal amount ofRMB1 Yuan.Assets-related government grant is the government fund obtained by the group for thepurpose of 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-relatedgrants. If no grant objective indicated clearly in the government documents, the group shalljudge it according to the principle mentioned above. If the grant is difficult to be separated, it
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTD.Notes to financial statementsJanuary 1, 2023 to December 31, 2023
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
shall be considered 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 theincome statement 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 compensationfor related 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 recognizedaccording 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 theinitial recognition of assets or liabilities arising from non-business combinations that do notaffect accounting profits or taxable income (or deductible losses); (2) The group is able tocontrol the timing of the reversal of taxable temporary differences related to investments insubsidiaries, associates, and joint ventures, and such temporary differences are likely not to bereversed in the 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.
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTD.Notes to financial statementsJanuary 1, 2023 to December 31, 2023(The currency is in RMB Yuan except otherwise indicated)(English translation for reference only)
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 basisor acquire 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.A contract is, or contains, a lease if the contract conveys the right to control the use of an ormany identified 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- leased
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTD.Notes to financial statementsJanuary 1, 2023 to December 31, 2023(The currency is in RMB Yuan except otherwise indicated)(English translation for reference only)
parts 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 accountingtreatment.
(2) As a leasee
1) Recognition
At the commencement date, the group as a lessee shall recognize a right-of-use asset and alease obligation 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,and is 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 theunderlying asset, restoring the site on which it is located or restoring the underlying asset tothe condition required by the terms and conditions of the lease, unless those costs are incurredto produce inventories. Where the group remeasures the lease liability in accordance with therelevant provisions 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 theend of the lease term, depreciation shall be calculated and deducted during the remainingservice life of the leased asset; Where it is not certain that the ownership of the leased assetcan be acquired at the end of the lease term, depreciation shall be calculated at the shorter ofthe lease term and the remaining service life of the leased asset. The depreciation amountshall be accounted into cost of assets or profit and loss account.At the commencement date, a lessee shall measure the lease liability at the present value ofthe lease 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 the
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTD.Notes to financial statementsJanuary 1, 2023 to December 31, 2023(The currency is in RMB Yuan except otherwise indicated)(English translation for reference only)
commencement 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 paymentsof penalties for terminating the lease, if the lessee will certainly exercise an option toterminate the lease during the lease term;⑤ amounts expected to be payable by the lesseeunder residual value guarantees.When calculating the present value of the lease payments, interest rate implicit in the leaseshall be used. If the rate cannot be readily determined, the group shall use the lessee’sincremental borrowing rate. Interest on the lease liability in each period during the lease termshall be calculated based on a constant periodic rate of interest, and be recognized as in profitor loss unless 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 ofin-substance fixed payments (subject to original discounting rate) ② change of amountsexpected to be payable under residual value guarantees(subject to original discounting rate)
③ change of an index or a rate used for future lease payments(subject to revised discountingrate) ④ change in assessment of a buy option(subject to revised discounting rate) ⑤change in assessment of a renew option or termination option or actual situation(subject torevised 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 shallmeasure the right-of-use asset arising from the leaseback at the proportion of the previouscarrying amount of the asset that relates to the right of use retained by the group. Accordingly,
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTD.Notes to financial statementsJanuary 1, 2023 to December 31, 2023
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
the group shall recognize only the amount of any gain or loss that relates to the rightstransferred to the buyer-lessor.
(3) As a lessor
The group, as a lessor, classified it as a finance lease if it transfers substantially all the risksand rewards 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 recognizedin 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 are
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTD.Notes to financial statementsJanuary 1, 2023 to December 31, 2023
(The currency is in RMB Yuan except otherwise indicated)(English translation for reference only)
determined 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 inan active 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 valuationmodels, such as the discounted cash flow model. The group also considers the initialtransaction price, recent transactions of the same or similar financial instruments, or fullthird-party transactions of comparable financial instruments. As at 31 December 2023, level 3financial assets measured at fair value are valued by using significant unobserved inputs suchas discount rates, but their fair value is not materially sensitive to reasonable changes in thesesignificant unobserved inputs.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.
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTD.Notes to financial statementsJanuary 1, 2023 to December 31, 2023(The currency is in RMB Yuan except otherwise indicated)(English translation for reference only)
IV. Changes in Accounting Policies, Accounting Estimates
(1) Change in significant accounting policies
| Changes on accounting policy and reasons | Memo |
| Since January 1, 2023, the Company has implemented the provisions of the Interpretation of Accounting Standards for Business Enterprises No. 16 promulgated by the Ministry of Finance, "Accounting treatment of deferred income tax related to assets and liabilities arising from single transactions is not applicable to the initial recognition exemption". Individual transactions to which the provision applies that occur between the beginning of the earliest period of presentation of the financial statements in which the provision is first applied and the date of the first implementation are adjusted according to the provision. Taxable temporary differences and deductible temporary differences arise in respect of lease liabilities and use rights assets recognized at the beginning of the earliest period of presentation of the financial statements for which the provision is first applied, as well as in respect of anticipated liabilities related to the disposal obligation recognized and corresponding related assets, In accordance with this provision and the provisions of Accounting Standard for Business Enterprises No. 18 - Income Tax, the cumulative impact is adjusted to the opening retained earnings and other related financial statement items for the earliest period in which the financial statements are presented. |
(2) Affected items and amount
| Affected items | January 1, 2023 （Jan-Dec, 2022） | ||
| Before adjustment | Adjusted amount | After adjustment | |
| deferred tax liability | 52,306,365.68 | 78,166.60 | 52,384,532.28 |
| surplus reserve | 825,226,634.15 | -4,594.76 | 825,222,039.39 |
| unappropriated profit | 618,445,922.58 | -65,810.05 | 618,380,112.53 |
| minority interest | 54,077,970.99 | -7,761.79 | 54,070,209.20 |
| income tax | 1,054,609.62 | -477,793.34 | 576,816.28 |
| profit or loss of minority interest | 1,633,633.87 | 1,154.31 | 1,634,788.18 |
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTD.Notes to financial statementsJanuary 1, 2023 to December 31, 2023(The currency is in RMB Yuan except otherwise indicated)(English translation for reference only)
(3) Changes in significant accounting estimates
No.V. Taxation
1. The main applicable tax and rate to the Company 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 | 5%、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% |
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTD.Notes to financial statementsJanuary 1, 2023 to December 31, 2023(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
2. Tax preference
(1) The Company obtained the qualification of high and new technology enterprises inDecember, 2023. The Certificate No. is GR202321201041. According to the tax bureauapproval, the Company can be granted for the preferential tax policy of enterprise income taxrate of 15% from FY2023 to FY2025.The Company’s subsidiary, Dalian Bingshan Air-conditioning Equipment Co., Ltd. obtainedthe qualification of high and new technology enterprises in December, 2023. The CertificateNo. is GR202321201161. According to the tax bureau approval, the Company can be grantedfor the preferential tax policy of enterprise income tax rate of 15% from FY2023 to FY2025.The Company’s subsidiary, Dalian Bingshan Guardian Automation Co., Ltd. obtained thequalification of high and new technology enterprises on 15
th
December, 2021. The CertificateNo. is GR202121200765. According to the tax bureau approval, the Company can be grantedfor the preferential tax policy of enterprise income tax rate of 15% from FY2021 to FY2023.The Company’s subsidiary, Wuhan New World Refrigeration Industrial Co., Ltd obtained thequalification of high and new technology enterprises on 15
th
November, 2021. The CertificateNo. is GR202142001696. According to the tax bureau approval, the Company can be grantedfor the preferential tax policy of enterprise income tax rate of 15% from FY2021 to FY2023.The Company’s subsidiary, Dalian Universe Thermal Technology Co., Ltd. obtained thequalification of high and new technology enterprises in December, 2023. The Certificate No. isGR202321200114. According to the tax bureau approval, the Company can be granted for thepreferential tax policy of enterprise income tax rate of 15% from FY2023 to FY2025.The Company’s subsidiary, Sonyo Compressor (Dalian)Co., Ltd. (hereinafter referred to as“Sonyo Compressor” obtained the qualification of high and new technology enterprises inOctober, 2021. The Certificate No. is GR202321201152. According to the tax bureau approval,the Company can be granted for the preferential tax policy of enterprise income tax rate of15% from FY2021 to FY2023.The Company’s subsidiary, Sonyo Refrigeration System (Dalian) Co., Ltd. (hereinafterreferred to as “Sonyo Refrigeration System” obtained the qualification of high and newtechnology enterprises in December, 2023. The Certificate No. is GR202321201152.According to the tax bureau approval, the Company can be granted for the preferential taxpolicy of enterprise income tax rate of 15% from FY2023 to FY2025.The Company’s subsidiary, Sonyo Refrigeration (Dalian) Co., Ltd. (hereinafter referred to as“Sonyo Refrigeration” obtained the qualification of high and new technology enterprises in
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTD.Notes to financial statementsJanuary 1, 2023 to December 31, 2023(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
October, 2021. The Certificate No. is GR202121200368. According to the tax bureau approval,the Company can be granted for the preferential tax policy of enterprise income tax rate of15% from FY2021 to FY2023.
(2) According to the Announcement of the Ministry of Finance and Tax Administration on theaccelerate VAT Deduction for advanced manufacturing enterprise (Announcement No. 43,2023), within the period from January 1
st, 2023 to December 31
st,2027, the advance enterprisesare allowed for input VAT deduction at 5% acceleration rate during the current period. TheCompany and its subsidiaries, Dalian Bingshan Air-conditioning Equipment,Dalian Bingshan Guardian Automation, Wuhan New World Refrigeration, Dalian UniverseThermal, Sonyo Compressor, Sonyo Refrigeration and Sonyo Refrigeration System enjoy thetax preference.VI. Notes to Consolidated Financial StatementsThe following disclosure date on this financial statement without special indication, “opening”refers to January 1, 2023; “closing” refers to December 31, 2023; “current period” refers to theperiod from January 1, 2023 to December 31, 2023; and “last period” refers to the period fromJanuary 1, 2022 to December 31, 2022; with the currency unit RMB.
1. Monetary fund
| Item | Closing Balance | Opening Balance |
| Cash on hand | 70,750.93 | 80,702.47 |
| Cash in bank | 863,950,616.72 | 922,122,608.84 |
| Other cash and cash equivalents | 87,018,202.46 | 83,962,587.87 |
| Total | 951,039,570.11 | 1,006,165,899.18 |
| Including: sum of deposits overseas | - | - |
Note: within the bank deposits, $170,321,702.76 was time deposits and interest income;Other monetary funds are bank acceptance deposit 44,200,486.65 Yuan, guarantee deposit41,547,977.10 Yuan and migrant worker deposit 1,229,741.67 Yuan.
2. Notes receivable
(1) Category of notes receivable
| Items | Closing Balance | Opening Balance |
| Bank acceptance notes | 335,914,443.51 | 493,019,785.95 |
| Trade acceptance notes | 17,514,478.91 | 12,925,475.23 |
| Total | 353,428,922.42 | 505,945,261.18 |
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTD.Notes to financial statementsJanuary 1, 2023 to December 31, 2023(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
(2) Categories according to bad debts provision method
| Items | Closing Balance | ||||
| Booking balance | Provision | Booking value | |||
| Amount | % | Amount | % | ||
| Bad debts provision based on group | 354,313,722.61 | 100.00 | 884,800.19 | 0.25 | 353,428,922.42 |
| Including: bank acceptance notes | 335,914,443.51 | 94.81 | - | - | 335,914,443.51 |
| Trade acceptance notes | 18,399,279.10 | 5.19 | 884,800.19 | 4.81 | 17,514,478.91 |
| Total | 354,313,722.61 | 100.00 | 884,800.19 | 0.25 | 353,428,922.42 |
(Continued)
| Items | Opening balance | ||||
| Booking balance | Provision | Booking value | |||
| Amount | % | Amount | % | ||
| Bad debts provision based on group | 506,921,135.95 | 100.00 | 975,874.77 | 0.19 | 505,945,261.18 |
| Including: bank acceptance notes | 493,019,785.95 | 97.26 | - | - | 493,019,785.95 |
| Trade acceptance notes | 13,901,350.00 | 2.74 | 975,874.77 | 7.02 | 12,925,475.23 |
| Total | 506,921,135.95 | 100.00 | 975,874.77 | 0.19 | 505,945,261.18 |
Categories based on group
| Items | Closing Balance | ||
| Booking balance | Provision | Provision（%） | |
| Bank acceptance notes | 335,914,443.51 | - | - |
| Trade acceptance notes | 18,399,279.10 | 884,800.19 | 4.81 |
| Total | 354,313,722.61 | 884,800.19 | — |
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTD.Notes to financial statementsJanuary 1, 2023 to December 31, 2023(The currency is in RMB Yuan except otherwise indicated)(English translation for reference only)
(3) Bad debt provision of notes receivable accrued, collected and reversed
| Category | Opening balance | Change during the year | Closing Balance | ||
| Accrued | Collected/ reversed | Written-off | |||
| Bad debt provision | 975,874.77 | 91,074.58 | - | 884,800.19 | |
| Total | 975,874.77 | 91,074.58 | - | 884,800.19 | |
(4) Pledged notes receivable up to the end of year.
| Items | Closing pledged amount |
| Bank acceptance notes | 4,939,655.20 |
| Total | 4,939,655.20 |
(5) 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 | - | 151,261,975.36 |
| Trade acceptance notes | - | 320,700.00 |
| Total | - | 151,582,675.36 |
(6) Notes receivable written off: none
3. Accounts receivable
(1) Aging of accounts receivable
| Account Age | Closing Balance | Opening Balance |
| Within 1 year（incl 1 year） | 1,075,007,175.23 | 1,051,342,084.70 |
| 1-2 years | 406,082,608.66 | 271,031,036.91 |
| 2-3 years | 207,201,791.50 | 187,045,709.96 |
| Over 3 years | 453,345,639.16 | 392,478,408.13 |
| Of which: 3-4years | 140,135,046.24 | 69,585,549.01 |
| 4-5years | 48,619,109.18 | 138,624,250.54 |
| Over 5 years | 264,591,483.74 | 184,268,608.58 |
| Total | 2,141,637,214.55 | 1,901,897,239.70 |
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTD.Notes to financial statementsJanuary 1, 2023 to December 31, 2023(The currency is in RMB Yuan except otherwise indicated)(English translation for reference only)
(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 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 |
(Continued)
| Items | Opening balance | ||||
| Booking balance | Provision | Booking value | |||
| Amount | % | Amount | % | ||
| Bad debt provision on individual basis | 13,181,314.30 | 0.69 | 10,348,880.50 | 78.51 | 2,832,433.80 |
| Bad debt provision on group | 1,888,715,925.40 | 99.31 | 481,569,916.25 | 25.50 | 1,407,146,009.15 |
| Including: aging as characteristics of credit risk | 1,888,715,925.40 | 99.31 | 481,569,916.25 | 25.50 | 1,407,146,009.15 |
| Total | 1,901,897,239.70 | 100.00 | 491,918,796.75 | 25.86 | 1,409,978,442.95 |
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTD.Notes to financial statementsJanuary 1, 2023 to December 31, 2023
(The currency is in RMB Yuan except otherwise indicated)(English translation for reference only)
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 | |
| Company 1 | 6,032,000.00 | 4,780,096.20 | 6,496,000.00 | 5,244,096.20 | 80.73 | Full recovery is not expected |
| Other company 1 | 7,149,314.30 | 5,568,784.30 | 7,876,020.85 | 6,320,374.19 | 80.25 | Recovery is not expected |
| Total | 13,181,314.30 | 10,348,880.50 | 14,372,020.85 | 11,564,470.39 | — | |
2) Bad debt provisions on group basis
| Aging | Closing Balance | ||
| Accounts receivable | Provision for bad debts | Drawing proportion (%) | |
| Within 1 year | 1,075,007,175.23 | 61,229,181.77 | 5.70 |
| 1 to 2 years | 403,753,793.79 | 67,078,438.64 | 16.61 |
| 2 to 3 years | 201,613,496.72 | 61,315,691.42 | 30.41 |
| 3 to 4 years | 139,220,135.04 | 68,416,921.28 | 49.14 |
| 4 to 5years | 43,079,109.18 | 31,007,103.15 | 71.98 |
| Over 5 years | 264,591,483.74 | 264,591,483.74 | 100.00 |
| Total | 2,127,265,193.70 | 553,638,820.00 | — |
(4) Bad debt provision of current period
| Category | Opening balance | Change during the year | Closing Balance | |||
| Accrued | Collected/ reversed | Written-off | Others | |||
| Bad debt provision | 491,918,796.75 | 68,147,779.35 | - | 6,532,243.60 | 11,668,957.89 | 565,203,290.39 |
| Total | 491,918,796.75 | 68,147,779.35 | - | 6,532,243.60 | 11,668,957.89 | 565,203,290.39 |
Note: others are from consolidation of Sonyo Refrigeration (Dalian) Co., Ltd.
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTD.Notes to financial statementsJanuary 1, 2023 to December 31, 2023(The currency is in RMB Yuan except otherwise indicated)(English translation for reference only)
(4) Accounts receivable written off in current period
| Item | Written off amount |
| Receivable actually written off | 6,532,243.60 |
(5) Top 5 receivables and contract assets
The sum of top 5 of receivables and contract assets is 240,544,632.79Yuan, represents
9.92% of closing balance of receivables and contract assets and bad debt provision of49,664,315.90Yuan shall be made.
4. Contract asset
(1) contract asset
| Items | Closing 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 |
(continued)
| Items | Opening balance | ||
| Booking balance | Provision | Carrying amount | |
| Undue warranty | 210,149,278.14 | 31,927,565.84 | 178,221,712.30 |
| Unsettled receivable of revenue recognized over time | 61,997,091.19 | 14,427,927.71 | 47,569,163.48 |
| Total | 272,146,369.33 | 46,355,493.55 | 225,790,875.78 |
(2) Significant change of the account
| Items | Amount | Reason |
| Undue warranty | 49,849,503.35 | Change of consolidation scope |
| Unsettled receivable of revenue recognized over time | -38,563,500.42 | Settled during the year |
| Total | 11,286,002.93 | — |
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTD.Notes to financial statementsJanuary 1, 2023 to December 31, 2023
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
(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 | 0.60 | 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 |
(continued)
| Items | Opening Balance | ||||
| Booking balance | Provision | Booking value | |||
| Amount | % | Amount | % | ||
| Bad debt provision on individual basis | 2,722,948.80 | 1.00 | 2,722,948.80 | 100.00 | - |
| Bad debt provision on group | 269,423,420.53 | 99.00 | 43,632,544.75 | 16.19 | 225,790,875.78 |
| Including: aging as characteristics of credit risk | 269,423,420.53 | 99.00 | 43,632,544.75 | 16.19 | 225,790,875.78 |
| Total | 272,146,369.33 | 100.00 | 46,355,493.55 | 17.03 | 225,790,875.78 |
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 | 2,722,948.80 | 2,722,948.80 | 1,709,948.80 | 1,709,948.80 | 100.00 | Recovery is not expected |
| Total | 2,722,948.80 | 2,722,948.80 | 1,709,948.80 | 1,709,948.80 | — | — |
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTD.Notes to financial statementsJanuary 1, 2023 to December 31, 2023(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
2) Bad debt provisions on group basis
| Aging | Closing Balance | ||
| Accounts receivable | Provision for bad debts | Drawing proportion (%) | |
| Within 1 year | 153,250,756.63 | 9,890,583.27 | 6.45 |
| 1 to 2 years | 71,084,892.44 | 10,935,114.90 | 15.38 |
| 2 to 3 years | 21,276,574.60 | 5,611,742.31 | 26.38 |
| 3 to 4 years | 27,683,262.15 | 11,105,880.37 | 40.12 |
| 4 to 5years | 4,508,264.70 | 3,183,550.96 | 70.62 |
| Over 5 years | 4,766,998.50 | 4,766,998.50 | 100.00 |
| Total | 282,570,749.02 | 45,493,870.31 | — |
(3) Bad debt provision of current period
| Category | Accrued | Collected/ reversed | Written-off | Others | Reason |
| Undue warranty | - | 3,755,144.26 | - | - | - |
| Unsettled receivable of revenue recognized over time | - | 1,012,572.23 | - | - | - |
| Total | - | 4,767,716.49 | - | - | - |
5. Finance receivable
(1) Category of finance receivable
| Items | Closing Balance | Opening Balance |
| Bank acceptance notes | 303,585,218.53 | 58,792,792.70 |
| Total | 303,585,218.53 | 58,792,792.70 |
(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 | 303,585,218.53 | 100.00 | - | - | 303,585,218.53 |
| Including: bank acceptance notes | 303,585,218.53 | 100.00 | - | - | 303,585,218.53 |
| Total | 303,585,218.53 | 100.00 | - | - | 303,585,218.53 |
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTD.Notes to financial statementsJanuary 1, 2023 to December 31, 2023
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
(Continued)
| Items | Opening balance | ||||
| Booking balance | Provision | Booking value | |||
| Amount | % | Amount | % | ||
| Bad debt provision on group | 58,792,792.70 | 100.00 | - | - | 58,792,792.70 |
| Including: aging as characteristics of credit risk | 58,792,792.70 | 100.00 | - | - | 58,792,792.70 |
| Total | 58,792,792.70 | 100.00 | - | - | 58,792,792.70 |
(3) Pledged notes receivable up to the end of year.
| Items | Closing pledged amount |
| Bank acceptance notes | 99,078,000.87 |
| Total | 99,078,000.87 |
6. Other receivables
| Items | Closing Balance | Opening Balance |
| Interest receivable | - | - |
| Dividend receivable | 14,495.00 | 14,495.00 |
| Other receivables | 41,381,728.27 | 51,379,979.24 |
| Total | 41,396,223.27 | 51,394,474.24 |
6.1. Dividends receivable
(1) Classification
| Company | Closing Balance | Opening Balance |
| Wuhan Steel and Electricity Co., Ltd. | 14,495.00 | 14,495.00 |
| Total | 14,495.00 | 14,495.00 |
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTD.Notes to financial statementsJanuary 1, 2023 to December 31, 2023(The currency is in RMB Yuan except otherwise indicated)(English translation for reference only)
6.2. Other receivables
(1) The categories of other receivable according to nature
| Items | Closing Balance | Opening Balance |
| Receivables and payables | 33,092,423.14 | 38,051,147.58 |
| Security deposit | 30,103,093.46 | 37,147,665.19 |
| Petty cash | 3,669,152.52 | 5,099,052.90 |
| Others | 11,397,105.01 | 6,088,641.82 |
| Total | 78,261,774.13 | 86,386,507.49 |
(2) Aging of other receivable
| Account Age | Closing Balance | Opening Balance |
| Within 1 year（incl 1 year） | 23,517,039.35 | 27,654,438.76 |
| 1-2 years | 8,134,653.15 | 17,231,991.92 |
| 2-3 years | 9,354,562.84 | 26,252,562.64 |
| Over 3 years | 37,255,518.79 | 15,247,514.17 |
| Of which: 3-4years | 24,151,505.82 | 7,027,188.39 |
| 4-5years | 6,300,480.70 | 2,501,537.52 |
| Over 5 years | 6,803,532.27 | 5,718,788.26 |
| Total | 78,261,774.13 | 86,386,507.49 |
(3) The bad debt provision of other receivables
| Bad debt provision | 1st stage | 2nd stage | 3rd stage | Total |
| Expected credit loss within 12 months | Expected credit loss within the whole period (no impairment) | Expected credit loss within the whole period (impairment incurred) | ||
| Opening balance | 2,334,895.21 | - | 32,671,633.04 | 35,006,528.25 |
| Opening balance during the year | — | — | — | — |
| --transfer to the 2nd stage | - | - | - | - |
| --transfer to the 3rd stage | -140,708.84 | - | 140,708.84 | - |
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTD.Notes to financial statementsJanuary 1, 2023 to December 31, 2023(The currency is in RMB Yuan except otherwise indicated)(English translation for reference only)
| Bad debt provision | 1st stage | 2nd stage | 3rd stage | Total |
| Expected credit loss within 12 months | Expected credit loss within the whole period (no impairment) | Expected credit loss within the whole period (impairment incurred) | ||
| --reverse to the 2nd stage | - | - | - | - |
| ----reverse to the 1st stage | - | - | - | - |
| Accrued | 161,905.22 | - | 1,724,045.76 | 1,885,950.98 |
| Reverse | - | - | - | - |
| Cancelation | - | - | - | - |
| Written off | 35,686.55 | - | - | 35,686.55 |
| Other movement | 23,253.18 | - | - | 23,253.18 |
| Closing balance | 2,343,658.22 | - | 34,536,387.64 | 36,880,045.86 |
Note: When one or more of the following situations occur, it is a "significant increase incredit risk since the initial recognition" and is classified as the second stage: the account is olderthan 1 year and the payment is overdue for more than 30 days but not more than 90 days; Thedefaulting party has a negative event affecting its solvency; A significant adverse change in thevalue of the collateral or in the quality of the security or credit enhancement provided by a thirdparty.When one or more of the following occurs, it is considered as a "credit impairment hasoccurred" and is classified as the third stage: the payment is overdue for more than 90 days; Thedefaulting party experiences significant financial difficulties or is likely to go bankrupt or otherfinancial restructuring; Other situations that violate contractual agreements and indicate thatthere is objective evidence of impairment of financial assets.
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTD.Notes to financial statementsJanuary 1, 2023 to December 31, 2023
(The currency is in RMB Yuan except otherwise indicated)(English translation for reference only)
(4) Provision for bad debt
| Category | Opening balance | Change during the year | Closing Balance | |||
| Accrued | Collected/ reversed | Written-off | Others | |||
| Bad debt provision | 35,006,528.25 | 1,885,950.98 | - | 35,686.55 | 23,253.18 | 36,880,045.86 |
| Total | 35,006,528.25 | 1,885,950.98 | - | 35,686.55 | 23,253.18 | 36,880,045.86 |
(5) Other receivables written off in current period: none.
| Item | Amount to be written off |
| Other receivables written off actually | 35,686.55 |
(6) Other receivables from the top 5 debtors based on closing balance
| Name | Category | Closing Balance | Aging | % of the total OR | Closing Balance of Provision |
| Top 1 | Tax refund | 7,718,652.20 | Within 1 year | 9.86 | 282,502.67 |
| Top 2 | Deposit | 2,548,847.50 | 3-5years | 3.26 | 1,657,427.69 |
| Top 3 | AR/AP | 2,476,894.20 | 2-3 years | 3.16 | 756,691.18 |
| Top 4 | Other deposit | 1,150,000.00 | 4-5years Over 5 years | 1.47 | 90,260.00 |
| Top 5 | Bid deposit | 1,000,000.00 | 1-2years | 1.28 | 36,600.00 |
| Total | — | 14,894,393.90 | — | 19.03 | 2,823,481.54 |
7. Prepayments
(1) Aging of prepayments
| Items | Closing Balance | Opening Balance | ||
| Amount | Percentage (%) | Amount | Percentage (%) | |
| Within 1 year | 133,068,644.50 | 86.75 | 143,894,431.33 | 83.66 |
| 1 to 2 years | 12,010,696.67 | 7.83 | 18,707,868.78 | 10.88 |
| 2 to 3 years | 2,578,747.06 | 1.68 | 4,457,439.74 | 2.59 |
| Over 3 years | 5,730,572.25 | 3.74 | 4,931,728.27 | 2.87 |
| Total | 153,388,660.48 | 100.00 | 171,991,468.12 | 100.00 |
(2) Prepayments from the top 5 debtors based on closing balance
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTD.Notes to financial statementsJanuary 1, 2023 to December 31, 2023(The currency is in RMB Yuan except otherwise indicated)(English translation for reference only)
The sum of top 5 of prepayment is 65,324,752.92 Yuan, represents 42.60% of closingbalance of prepayment.
8. Inventories
(1) Categories of inventories
| Item | Closing 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 |
| Self-manufactured semi-finished products | 35,347,357.53 | - | 35,347,357.53 |
| Materials on consignment for further processing | 21,317,653.86 | 60,394.18 | 21,257,259.68 |
| Goods on transit | 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 |
(Continued)
| Item | Opening Balance | ||
| Book value | Provision for decline | Net book value | |
| Cost to fulfill the contract | 518,190,428.65 | 24,029,331.96 | 494,161,096.69 |
| Finished goods | 358,865,793.97 | 20,733,013.07 | 338,132,780.90 |
| Raw materials | 257,330,026.33 | 17,594,044.66 | 239,735,981.67 |
| Working in progress | 219,325,436.31 | 7,091,948.88 | 212,233,487.43 |
| Goods on transit | 64,331,292.17 | 463,920.35 | 63,867,371.82 |
| Self-manufactured semi-finished products | 30,898,915.81 | - | 30,898,915.81 |
| Materials on consignment for further processing | 15,134,850.12 | 540,289.54 | 14,594,560.58 |
| Properties written off debtors | 2,708,646.00 | 1,149,186.00 | 1,559,460.00 |
| Low-value consumable | 161,125.34 | - | 161,125.34 |
| Total | 1,466,946,514.70 | 71,601,734.46 | 1,395,344,780.24 |
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTD.Notes to financial statementsJanuary 1, 2023 to December 31, 2023(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
(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 | 17,594,044.66 | -2,603,790.07 | 22,790,431.86 | 6,769,166.15 | - | 31,011,520.30 |
| WIP | 7,091,948.88 | 3,038,856.66 | - | - | - | 10,130,805.54 |
| Finished goods | 20,733,013.07 | 16,562,416.248 | 20,518,964.39 | 9,982,176.79 | - | 47,832,216.91 |
| Cost to fulfill the contract | 24,029,331.96 | 841,412.60 | 11,574,524.36 | 21,019,867.89 | - | 15,425,401.03 |
| Materials on consignment for further processing | 540,289.54 | -479,895.36 | - | - | - | 60,394.18 |
| Goods on transit | 463,920.35 | 287,037.52 | 70,802.02 | - | - | 821,759.89 |
| Properties written off debtors | 1,149,186.00 | - | - | - | - | 1,149,186.00 |
| Total | 71,601,734.46 | 17,646,037.59 | 54,954,722.63 | 37,771,210.83 | - | 106,431,283.85 |
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. Non-current asset due within one year
| Item | Closing Balance | Opening Balance |
| Long term receivable due within 1 year | - | 15,715,631.52 |
| Total | - | 15,715,631.52 |
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTD.Notes to financial statementsJanuary 1, 2023 to December 31, 2023(The currency is in RMB Yuan except otherwise indicated)(English translation for reference only)
10. Other current assets
| Item | Closing Balance | Opening Balance |
| Input VAT to be deducted | 18,112,002.39 | 12,825,675.49 |
| Contract acquisition cost | 4,532,291.00 | - |
| Prepaid income tax presented at net amount after offsetting | 3,216,096.82 | 9,010,312.91 |
| Prepaid VAT | 198,895.83 | 11,646,669.59 |
| Prepaid expenses | 15,056.29 | 16,919.61 |
| Total | 26,074,342.33 | 33,499,577.60 |
11. Long term receivable
(1) Details
| Item | Closing Balance | Discounted rate | ||
| Carrying amount | Provision | Book value | ||
| Lease premium | - | - | - | - |
| ---Unrealized financing income | - | - | - | - |
| Goods sold by installments | - | - | - | - |
| Total | - | - | - | - |
(Continued)
| Item | Opening Balance | Discounted rate | ||
| Carrying amount | Provision | Book value | ||
| Lease premium | - | - | - | - |
| ---Unrealized financing income | - | - | - | - |
| Goods sold by installments | 5,591,380.90 | 428,922.00 | 5,162,458.90 | 4.75% |
| Total | 5,591,380.90 | 428,922.00 | 5,162,458.90 | — |
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTD.Notes to financial statementsJanuary 1, 2023 to December 31, 2023
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
(2) Category of long-term receivable based on bad debt provision method
| Items | Closing Balance | ||||
| Booking balance | Provision | Booking value | |||
| Amount | % | Amount | % | ||
| Bad debt provision on group | - | - | - | - | - |
| Including: bank acceptance notes | - | - | - | - | - |
| Total | - | - | - | - | - |
(Continued)
| Items | Opening balance | ||||
| Booking balance | Provision | Booking value | |||
| Amount | % | Amount | % | ||
| Bad debt provision on group | 5,591,380.90 | 100.00 | 428,922.00 | 7.67 | 5,162,458.90 |
| Including: aging as characteristics of credit risk | 5,591,380.90 | 100.00 | 428,922.00 | 7.67 | 5,162,458.90 |
| Total | 5,591,380.90 | 100.00 | 428,922.00 | 7.67 | 5,162,458.90 |
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTD.Notes to financial statementsJanuary 1, 2023 to December 31, 2023
(The currency is in RMB Yuan except otherwise indicated)(English translation for reference only)
1) The bad debt provision under expected credit loss model
| Bad debt provision | 1st stage | 2nd stage | 3rd stage | Total |
| Expected credit loss within 12 months | Expected credit loss within the whole period (no impairment) | Expected credit loss within the whole period (impairment incurred) | ||
| Opening balance | 428,922.00 | - | - | 428,922.00 |
| Opening balance during the year | — | — | — | — |
| --transfer to the 2nd stage | - | - | - | - |
| --transfer to the 3rd stage | - | - | - | - |
| --reverse to the 2nd stage | - | - | - | - |
| ----reverse to the 1st stage | - | - | - | - |
| Accrued | - | - | - | - |
| Reverse | 210,600.00 | - | - | 210,600.00 |
| Cancelation | - | - | - | - |
| Written off | - | - | - | - |
| Other movement | -218,322.00 | - | - | -218,322.00 |
| Closing balance | - | - | - | - |
(3) Bad debt provision of long-term receivable for the year
| Category | Opening balance | Change during the year | Closing Balance | |||
| Accrued | Collected/ reversed | Written-off | Others | |||
| Bad debt provision | 428,922.00 | - | 210,600.00 | - | -218,322.00 | - |
| Total | 428,922.00 | - | 210,600.00 | - | -218,322.00 | - |
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTDNotes to financial statementsJanuary 1, 2023 to December 31, 2023(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
12.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 | 9,819,096.80 | - | - | -594,472.68 | - | - | -1,050,000.00 | - | 1,717,629.40 | 9,892,253.52 | - |
| Keihin-Grand Ocean Thermal Technology (Dalian)Co.,Ltd. | 60,089,313.51 | - | - | -509,338.51 | - | - | -2,000,000.00 | - | - | 57,579,975.00 | - |
| Dalian Fuji Bingshan Vending Machine Co., Ltd. | 111,101,339.93 | - | - | -43,490,921.84 | - | - | - | - | - | 67,610,418.09 | - |
| MHI Bingshan Refrigeration (Dalian) Co.,Ltd. | 15,401,109.10 | - | - | 1,142,546.44 | - | - | - | - | - | 16,543,655.54 | - |
| Dalian Fuji Bingshan Vending Machine Sales Co., Ltd | - | - | - | - | - | - | - | - | - | - | - |
| Jiangsu Jingxue Insulation Technology Co.,Ltd (N4) | 140,124,248.76 | - | - | 5,840,827.15 | - | - | -1,610,172.00 | - | - | 144,354,903.91 | - |
| Dalian Bingshan Metal Technology Co.,Ltd. | 175,313,807.46 | - | - | 31,071,464.97 | - | - | -33,134,422.30 | - | - | 173,250,850.13 | - |
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTDNotes to financial statementsJanuary 1, 2023 to December 31, 2023
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
| 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 | ||||
| Dalian Bingshan Group Huahuida Financial Leasing Co., Ltd | 45,603,876.95 | - | - | 1,197,707.15 | - | - | -751,127.55 | - | - | 46,050,456.55 | - |
| Wuhan Sikafu Power Control Equipment Co., Ltd | 5,534,979.43 | - | - | 457,455.33 | - | - | - | - | - | 5,992,434.76 | - |
| Total | 562,987,771.94 | - | - | -4,884,731.99 | - | - | -38,545,721.85 | - | 1,717,629.40 | 521,274,947.50 | - |
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTDNotes to financial statementsJanuary 1, 2023 to December 31, 2023(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
13.Other non-current financial assets
| Item | Closing Balance | Opening Balance |
| Financial assets classified as FVTPL | 164,024,771.63 | 149,950,861.31 |
| Including: equity instruments | 164,024,771.63 | 149,950,861.31 |
| Total | 164,024,771.63 | 149,950,861.31 |
14. Investment property
(1) Investment property measured as cost model
| Item | Property& building | Land-use-rights | Total |
| I. Initial cost | — | — | — |
| 1. opening balance | 230,594,490.07 | 26,094,438.38 | 256,688,928.45 |
| 2. addition | 15,579,127.78 | - | 15,579,127.78 |
| (1) FA\transferred from CIP | 15,579,127.78 | - | 15,579,127.78 |
| 3. decrease | - | - | - |
| 4. closing balance | 246,173,617.85 | 26,094,438.38 | 272,268,056.23 |
| II. Accumulated depreciation | — | — | — |
| 1. opening balance | 128,527,417.44 | 12,828,592.81 | 141,356,010.25 |
| 2. addition | 6,800,475.72 | 521,888.76 | 7,322,364.48 |
| (1) accrued/amortization | 5,300,697.15 | 521,888.76 | 5,822,585.91 |
| (2) FA\transferred from CIP | 1,499,778.57 | - | 1,499,778.57 |
| 3. decrease | - | - | - |
| 4. closing balance | 135,327,893.16 | 13,350,481.57 | 148,678,374.73 |
| III. Impairment reserve | — | — | — |
| 1. opening balance | - | - | - |
| 2. addition | - | - | - |
| 3. decrease | - | - | - |
| 4. closing balance | - | - | - |
| IV. Book value | — | — | — |
| 1. Closing book value | 110,845,724.69 | 12,743,956.81 | 123,589,681.50 |
| 2. Opening book value | 102,067,072.63 | 13,265,845.57 | 115,332,918.20 |
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTDNotes to financial statementsJanuary 1, 2023 to December 31, 2023(The currency is in RMB Yuan except otherwise indicated)(English translation for reference only)
(2) Investment property without ownership certificate
| Item | Book value | Reason |
| Plant | 12,141,047.62 | 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 | 1,958,830.20 | The documents are not ready in full, the certificate of the building ownership can not be dealt with |
15. Fixed assets
| Items | Closing Book Value | Opening Book Value |
| Fixed asset | 1,291,851,402.46 | 1,229,029,368.93 |
| Fixed asset disposal | - | - |
| Total | 1,291,851,402.46 | 1,229,029,368.93 |
(1) Fixed assets detail
| Item | Property& buildings | Machinery equipment | Transportation equipment | Other equipment | Total |
| I. Initial cost | — | — | — | — | — |
| 1.Opening balance | 833,131,692.61 | 1,700,788,050.58 | 21,850,467.55 | 215,907,705.08 | 2,771,677,915.82 |
| 2. Increase | 169,961,408.00 | 206,761,056.32 | 6,124,546.45 | 43,911,382.93 | 426,758,393.70 |
| (1) Purchase | 13,060,683.47 | 3,476,651.96 | 363,268.65 | 4,559,341.33 | 21,459,945.41 |
| (2) Transferred from construction-in-progress | 2,439,313.50 | 49,253,798.47 | 413,539.84 | 16,259,558.57 | 68,366,210.38 |
| (3) Acquired from business combination | 154,461,411.03 | 134,755,852.34 | 5,347,737.96 | 23,092,483.03 | 317,657,484.36 |
| (4) financial lease | - | 19,274,753.55 | - | - | 19,274,753.55 |
| 3. Decrease | 18,330,807.67 | 46,685,982.39 | 1,560,741.04 | 11,370,982.59 | 77,948,513.69 |
| (1) Disposal | 2,999,204.64 | 46,685,982.39 | 1,560,741.04 | 11,370,982.59 | 62,616,910.66 |
| (2) transferred int investment property | 15,331,603.03 | - | - | - | 15,331,603.03 |
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTDNotes to financial statementsJanuary 1, 2023 to December 31, 2023(The currency is in RMB Yuan except otherwise indicated)(English translation for reference only)
| Item | Property& buildings | Machinery equipment | Transportation equipment | Other equipment | Total |
| 4.Closing balance | 984,762,292.94 | 1,860,863,124.51 | 26,414,272.96 | 248,448,105.42 | 3,120,487,795.83 |
| II. Accumulated depreciation | — | — | — | — | — |
| 1.Opening balance | 244,228,011.91 | 1,120,019,881.71 | 15,419,223.76 | 149,998,682.42 | 1,529,665,799.80 |
| 2. Increase | 101,507,446.57 | 198,882,895.04 | 4,931,531.13 | 30,334,072.95 | 335,655,945.69 |
| (1) Accrued | 24,470,757.08 | 91,543,120.54 | 1,570,559.26 | 12,218,112.81 | 129,802,549.69 |
| (2) Acquired from business combination | 77,036,689.49 | 101,969,284.95 | 3,360,971.87 | 18,115,960.14 | 200,482,906.45 |
| (3) financial lease | - | 5,370,489.55 | - | - | 5,370,489.55 |
| 3. Decrease | 2,686,973.65 | 37,637,882.98 | 1,423,918.35 | 10,341,217.21 | 52,089,992.19 |
| (1) Disposal | 1,187,195.08 | 37,637,882.98 | 1,423,918.35 | 10,341,217.21 | 50,590,213.62 |
| (2) transferred int investment property | 1,499,778.57 | - | - | - | 1,499,778.57 |
| 4.Closing balance | 343,048,484.83 | 1,281,264,893.77 | 18,926,836.54 | 169,991,538.16 | 1,813,231,753.30 |
| III. Impairment reserve | — | — | — | — | — |
| 1.Opening balance | 201,250.96 | 8,839,885.62 | 286,519.26 | 3,655,091.25 | 12,982,747.09 |
| 2. Increase | 1,960,721.36 | 3,258,013.57 | - | 414,884.85 | 5,633,619.78 |
| (1)Acquired from business combination | 1,960,721.36 | 3,258,013.57 | 414,884.85 | 5,633,619.78 | |
| 3. Decrease | 1,036,065.45 | 2,088,217.14 | - | 87,444.21 | 3,211,726.80 |
| (1) Disposal | 1,036,065.45 | 2,088,217.14 | - | 87,444.21 | 3,211,726.80 |
| 4.Closing balance | 1,125,906.87 | 10,009,682.05 | 286,519.26 | 3,982,531.89 | 15,404,640.07 |
| IV.Book value | — | — | — | — | — |
| 1.Closing book value | 640,587,901.24 | 569,588,548.69 | 7,200,917.16 | 74,474,035.37 | 1,291,851,402.46 |
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTDNotes to financial statementsJanuary 1, 2023 to December 31, 2023
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
| Item | Property& buildings | Machinery equipment | Transportation equipment | Other equipment | Total |
| 2.Opening book value | 588,702,429.74 | 571,928,283.25 | 6,144,724.53 | 62,253,931.41 | 1,229,029,368.93 |
(2) Fixed assets without ownership certificate
| Item | Book value | Reason |
| Self -constructed buildings | 30,753,216.16 | Up to December 31,2023, sum of net book value of the buildings without ownership certificate is 30,753,216.16 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. |
16. Construction-in-progress
| Item | Closing book value | Opening book value |
| Construction-in-progress | 114,801,351.21 | 115,577,902.54 |
| Construction materials | - | - |
| Total | 114,801,351.21 | 115,577,902.54 |
(1) Construction-in-progress details
| Item | Closing balance | Opening balance | ||||
| Book balance | Provision | Book Value | Book balance | Provision | Book value | |
| Buildings & reconstruction | 26,282,803.78 | - | 26,282,803.78 | 24,796,146.56 | - | 24,796,146.56 |
| Improvement of machinery | 83,833,793.88 | - | 83,833,793.88 | 82,341,565.62 | - | 82,341,565.62 |
| Software of intelligent manufacture | 4,684,753.55 | - | 4,684,753.55 | 3,575,525.17 | - | 3,575,525.17 |
| Power generation project | - | - | - | 9,164,665.19 | 4,300,000.00 | 4,864,665.19 |
| Total | 114,801,351.21 | - | 114,801,351.21 | 119,877,902.54 | 4,300,000.00 | 115,577,902.54 |
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTDNotes to financial statementsJanuary 1, 2023 to December 31, 2023(The currency is in RMB Yuan except otherwise indicated)(English translation for reference only)
(2) Change in the significant construction in progress
| Name | Opening balance | Increase | Decrease | Closing balance | ||
| Transfer to FA/ Intangible assets | Other decrease | |||||
| Buildings & reconstruction | 24,796,146.56 | 2,512,958.85 | 3,040,744.66 | 247,524.75 | 24,020,836.00 | |
| Improvement of machinery | 82,341,565.62 | 36,587,416.93 | 58,254,020.37 | 1,026,548.66 | 59,648,413.52 | |
| Software of intelligent manufacture | 3,575,525.17 | 1,230,929.72 | - | 4,806,454.89 | - | |
| Power generation project | 9,164,665.19 | - | 4,864,665.19 | 4,300,000.00 | - | |
| Total | 119,877,902.54 | 40,331,305.50 | 66,159,430.22 | 10,380,528.30 | 83,669,249.52 | |
(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 | 80.48 | 80.48 | - | - | - | Self- financing |
| Improvement of machinery | 62,164,977.27 | 95.95 | 95.95 | - | - | - | Self- financing |
| Software of intelligent manufacture | 3,610,000.00 | - | - | - | - | - | — |
| Power generation project | 9,164,665.19 | - | - | - | - | - | — |
| Total | 104,786,854.53 | — | — | — | — | — | — |
(3) Impairment provision
| Item | Opening balance | Increase | Decrease | Closing balance | Reason |
| Power generation project | 4,300,000.00 | - | 4,300,000.00 | - | — |
| Total | 4,300,000.00 | - | 4,300,000.00 | - | — |
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTDNotes to financial statementsJanuary 1, 2023 to December 31, 2023
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
17. Right-of-use assets
| Item | Property/ buildings | Machinery | Transportation equipment | Electronic equipment | Land use right | Total |
| I. Initial cost | — | — | — | — | — | — |
| 1.Opening balance | 12,258,253.25 | 22,042,380.89 | 334,540.86 | 194,322.58 | 7,945,762.91 | 42,775,260.49 |
| 2. Increase | 17,260,086.14 | - | - | 802,669.35 | 7,579,035.02 | 25,641,790.51 |
| (1) lease in | 17,260,086.14 | - | - | 802,669.35 | - | 18,062,755.49 |
| (2) business combination | - | - | - | - | 7,579,035.02 | 7,579,035.02 |
| 3. Decrease | 7,217,240.70 | 20,541,973.76 | 334,540.86 | - | 121,248.96 | 28,215,004.28 |
| (1) Disposal | 7,217,240.70 | 1,267,220.21 | 334,540.86 | - | 121,248.96 | 8,940,250.73 |
| (2) transferred into FA | - | 19,274,753.55 | - | - | - | 19,274,753.55 |
| 4.Closing balance | 22,301,098.69 | 1,500,407.13 | - | 996,991.93 | 15,403,548.97 | 40,202,046.72 |
| II. Accumulated amortization | — | — | — | — | — | — |
| 1.Opening balance | 2,561,983.47 | 7,244,798.14 | 223,027.24 | 99,228.48 | 1,704,560.90 | 11,833,598.23 |
| 2. Increase | 8,604,790.32 | 1,263,779.95 | 111,513.60 | 62,992.06 | 2,139,878.33 | 12,182,954.26 |
| (1) Accrued | 8,604,790.32 | 1,263,779.95 | 111,513.60 | 62,992.06 | 1,297,763.28 | 11,340,839.21 |
| (2) business combination | - | - | - | - | 842,115.05 | 842,115.05 |
| 3. Decrease | 6,076,357.87 | 7,870,831.42 | 334,540.84 | - | 80,832.72 | 14,362,562.85 |
| (1) Disposal | 6,076,357.87 | 1,188,837.41 | 334,540.84 | - | 80,832.72 | 7,680,568.84 |
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTDNotes to financial statementsJanuary 1, 2023 to December 31, 2023(The currency is in RMB Yuan except otherwise indicated)(English translation for reference only)
| Item | Property/ buildings | Machinery | Transportation equipment | Electronic equipment | Land use right | Total |
| (2) transferred into FA | - | 6,681,994.01 | - | - | - | 6,681,994.01 |
| 4.Closing balance | 5,090,415.92 | 637,746.67 | - | 162,220.54 | 3,763,606.51 | 9,653,989.64 |
| III. Impairment reserve | — | — | — | — | — | — |
| 1. Opening balance | - | - | - | - | - | - |
| 2. Increase | - | - | - | - | - | - |
| 3. Decrease | - | - | - | - | - | - |
| 4.Closing balance | - | - | - | - | - | - |
| IV. Book value | — | — | — | — | — | — |
| 1. Closing book value | 17,210,682.77 | 862,660.46 | - | 834,771.39 | 11,639,942.46 | 30,548,057.08 |
| 2. Opening book value | 9,696,269.78 | 14,797,582.75 | 111,513.62 | 95,094.10 | 6,241,202.01 | 30,941,662.26 |
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTDNotes to financial statementsJanuary 1, 2023 to December 31, 2023(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
18. Intangible assets
| Item | Land use right | Patent | Non- Patent | Others | Total |
| I. Initial cost | — | — | — | — | — |
| 1.Opening balance | 173,151,420.72 | 17,630,188.82 | 5,773,680.00 | 59,376,795.82 | 255,932,085.36 |
| 2. Increase | 67,754,316.68 | - | - | 17,330,846.32 | 85,085,163.00 |
| (1) Purchase | 15,106,584.15 | - | - | 4,347,395.91 | 19,453,980.06 |
| (2) Transferred from construction-in-progress | - | - | - | 278,761.06 | 278,761.06 |
| (3) increase via merge | 52,647,732.53 | - | - | 12,704,689.35 | 65,352,421.88 |
| 3. Decrease | - | - | - | 2,458,296.66 | 2,458,296.66 |
| (1) Disposal | - | - | - | 2,458,296.66 | 2,458,296.66 |
| 4.Closing balance | 240,905,737.40 | 17,630,188.82 | 5,773,680.00 | 74,249,345.48 | 338,558,951.70 |
| II. Accumulated amortization | — | — | — | — | — |
| 1.Opening balance | 47,596,987.88 | 9,040,676.05 | 4,273,700.00 | 26,944,001.36 | 87,855,365.29 |
| 2. Increase | 24,304,389.58 | 1,429,512.20 | 500,008.00 | 15,889,731.72 | 42,123,641.50 |
| (1) Accrued | 6,448,992.14 | 1,429,512.20 | 500,008.00 | 5,192,180.77 | 13,570,693.11 |
| (2) Increase from merger | 17,855,397.44 | - | - | 10,697,550.95 | 28,552,948.39 |
| 3. Decrease | - | - | - | 1,986,197.48 | 1,986,197.48 |
| (1) Disposal | - | - | - | 1,986,197.48 | 1,986,197.48 |
| 4.Closing balance | 71,901,377.46 | 10,470,188.25 | 4,773,708.00 | 40,847,535.60 | 127,992,809.31 |
| III. Impairment provision | — | — | — | — | — |
| 1. Opening balance | - | - | - | - | - |
| 2. Increase | - | - | - | 50,980.35 | 50,980.35 |
| (1) Increase from merger | - | - | - | 50,980.35 | 50,980.35 |
| 3. Decrease | - | - | - | 38,999.18 | 38,999.18 |
| (1) Disposal | - | - | - | 38,999.18 | 38,999.18 |
| 4.Closing balance | - | - | - | 11,981.17 | 11,981.17 |
| IV. Book value | — | — | — | — | — |
| 1. Closing book value | 169,004,359.94 | 7,160,000.57 | 999,972.00 | 33,389,828.71 | 210,554,161.22 |
| 2. Opening book value | 125,554,432.84 | 8,589,512.77 | 1,499,980.00 | 32,432,794.46 | 168,076,720.07 |
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTDNotes to financial statementsJanuary 1, 2023 to December 31, 2023(The currency is in RMB Yuan except otherwise indicated)(English translation for reference only)
19. 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 | 248,345,508.41 | 38,056,663.52 | - | - | - | 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.The difference between the book value of equity investment of 48, 287,589.78 Yuan and theidentifiable net asset’s fair value of Dalian Sanyo High-efficient Refrigeration System Co., Ltd of46,847,241.86 Yuan on the acquisition date of July 31
st
,2015 is recognized as goodwill of1,440,347.92 Yuan on The Company 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 thenet asset of Dalian BingshanBaoan Leisure Industry Co., Ltd on June 30
th
, 2016. Negotiated withDalian Bingshan Baoan Leisure Industry Co., Ltd’s shareholder Baoan Water Project (China)Limited Company, the transfer price is the combination cost on the purchasing date which is5,359,548.42 Yuan, the fair value of proportion of Dalian BingshanBaoan Leisure IndustryCompany’s identifiable net asset is 5,049,096.85 Yuan on the purchasing day, therefore, goodwill is310,451.57Yuan on the purchasing date. Dalian Bingshan Group Engineering Co., Ltd absorbedDalian Bingshan Baoan Leisure 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, Sonyo
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTDNotes to financial statementsJanuary 1, 2023 to December 31, 2023(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
Compressor (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 identifiableasset of 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 SonyoRefrigeration 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 assetof acquire, 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 combinationnot under same control, cost of combination is the consideration of 145,285,500.00 Yuan for sharetransfer. Goodwill of 38,056,663.52Yuan is recognized for the difference between the share of FV ofnet identifiable 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 relatedasset groups containing goodwill by professional appraisal companies or use evaluation models topredict the recoverable amount of related asset groups containing goodwill in accordance with thepresent value 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.
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTDNotes to financial statementsJanuary 1, 2023 to December 31, 2023
(The currency is in RMB Yuan except otherwise indicated)(English translation for reference only)
20. Long-term unamortized expense
| Item | Opening Balance | Increase | Amortization | Other Decrease | Closing balance |
| Greenland of new factory | 3,940,176.58 | - | 892,115.52 | - | 3,048,061.06 |
| Employee’s dormitory use right | 1,596,735.42 | - | 138,478.32 | - | 1,458,257.10 |
| Membership fee for golf | 390,500.00 | - | 16,500.00 | - | 374,000.00 |
| Renovation and rebuilding | 339,641.30 | - | 197,549.97 | - | 142,091.33 |
| Amortization of instruments | 219,513.62 | 389,380.61 | 293,657.62 | - | 315,236.61 |
| Technology entrance fee of cold and heat machinery | - | 16,016.35 | 7,340.85 | - | 8,675.50 |
| Total | 6,486,566.92 | 405,396.96 | 1,545,642.28 | - | 5,346,321.60 |
21. 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 credit impairment | 445,951,688.75 | 81,048,834.24 | 383,685,092.04 | 70,892,192.53 |
| Provision for impairment of assets | 153,519,850.70 | 23,185,410.37 | 110,205,587.05 | 18,013,430.31 |
| Lease liability | 52,799,814.74 | 8,006,670.79 | 18,901,886.18 | 2,883,573.82 |
| FA depreciation | 48,341,817.47 | 7,251,272.60 | 35,600,567.62 | 5,340,085.14 |
| Accrued sales discount | 17,125,319.07 | 2,568,797.86 | 13,744,913.65 | 2,061,737.05 |
| Unrealized profit from internal transaction | 13,034,503.47 | 1,955,175.52 | 13,034,503.47 | 1,955,175.52 |
| Unrealized revenue | 11,170,890.18 | 2,792,722.55 | - | - |
| Provision | 4,544,802.83 | 714,830.47 | 16,786,967.43 | 2,518,045.11 |
| Safety cost | 449,375.00 | 67,406.25 | - | - |
| Deductible loss | - | - | 9,991,507.80 | 1,498,726.17 |
| Others | 1,138,175.07 | 170,726.26 | 845,210.65 | 126,781.60 |
| Total | 748,076,237.28 | 127,761,846.91 | 602,796,235.89 | 105,289,747.25 |
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTDNotes to financial statementsJanuary 1, 2023 to December 31, 2023
(The currency is in RMB Yuan except otherwise indicated)(English translation for reference only)
(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 | 253,978,835.91 | 38,096,825.39 | 211,352,103.77 | 31,702,815.57 |
| Change on FV of other non-current financial assets | 151,430,911.13 | 22,714,636.67 | 137,357,000.73 | 20,603,550.11 |
| FA depreciation | 44,655,750.06 | 6,698,362.51 | 46,545,245.48 | 6,981,786.82 |
| Use right of asset | 48,864,566.94 | 7,414,624.88 | 19,380,755.68 | 2,961,740.42 |
| Total | 498,930,064.04 | 74,924,449.45 | 414,635,105.66 | 62,249,892.92 |
(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 | 14,112,987.38 | 113,648,859.53 | 9,865,360.64 | 95,424,386.61 |
| Deferred tax liabilities | 14,112,987.38 | 60,811,462.07 | 9,865,360.64 | 52,384,532.28 |
(4) Unrecognized deferred tax assets details
| Item | Closing balance | Opening balance |
| Deductible temporary difference | 227,656,543.59 | 173,990,137.06 |
| Deductible loss | 553,968,553.34 | 310,513,803.17 |
| Total | 781,625,096.93 | 484,503,940.23 |
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTDNotes to financial statementsJanuary 1, 2023 to December 31, 2023(The currency is in RMB Yuan except otherwise indicated)(English translation for reference only)
(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 | 67,240,033.97 | — |
| 2028 | 55,969,301.70 | 13,111,421.07 | — |
| 2029 | 39,791,411.14 | 45,365,135.77 | — |
| 2030 | 7,689,545.97 | 10,574,799.57 | — |
| 2031 | 126,221,649.87 | 50,864,213.30 | — |
| 2032 | 44,819,905.64 | 52,043,107.48 | — |
| 2033 | 140,796,660.49 | - | — |
| Total | 553,968,553.34 | 310,513,803.17 | — |
22. 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 | - | - | - |
| Total | 21,770,721.00 | 1,527,371.56 | 20,243,349.44 | - | - | - |
23. Assets with restricted ownership or use rights
| Item | At the year end | |||
| 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 | — | — |
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTDNotes to financial statementsJanuary 1, 2023 to December 31, 2023(The currency is in RMB Yuan except otherwise indicated)(English translation for reference only)
(continued)
| Item | At the beginning of the year | |||
| Book value | Carrying amount | Type | Restriction | |
| Monetary fund | 84,504,096.01 | 84,504,096.01 | Frozen | Guarantee deposit/ frozen bank account |
| Notes receivable | 98,917,384.72 | 98,917,384.72 | Pledged | Pledged |
| Financing of receivable | 15,259,393.79 | 15,259,393.79 | Pledged | Pledged |
| FA | 89,669,668.86 | 62,207,555.51 | Pledged | Pledged |
| Intangible asset | 8,266,573.44 | 5,587,198.75 | Pledged | Pledged |
| Investment property | 38,955,728.90 | 32,981,247.79 | Pledged | Pledged |
| Total | 335,572,845.72 | 299,456,876.57 | — | — |
Note: DALIAN BRANKA TECHNOLOGY CO., LTD prosecuted our company, therefore4,317,629.58Yuan is frozen. Subsequently, the verdict is made and the account of 3,894,709.13Yuan is unfrozen. Xuchang Superlift Energy Saving Technology Co., LTD prosecuted DalianBingshan Group Engineering Co., Ltd, therefore 14,435,825.75 Yuan is frozen. Subsequently,the both parties have reached a settlement, the verdict is made and the account of 13,500,000.00Yuan is unfrozen. Xining Changfeng Group Trade Co. Ltd prosecuted Dalian Bingshan GroupEngineering Co., Ltd, therefore 2,168,000.00 Yuan is frozen. Dalian Bingshan GuardianAutomation Co., Ltd.’s account is frozen with 439,215.89 Yuan, and Sonyo Refrigeration(Dalian) Co., Ltd.’s account is frozen with215,000.00 Yuan because of litigation.The Company’s subsidiary, Dalian Universe Thermal Technology Co., Ltd pledged thebank acceptance note to the bank as guarantee for issuing the bank acceptance note.The Company’s subsidiary, Dalian Bingshan Engineering & Trading Co., Ltd pledged thebank acceptance note to the bank as guarantee for issuing the bank acceptance note.
The Company’s subsidiary, Sonyo Compressor (Dalian)Co., Ltd pledged the bankacceptance note to the bank as guarantee for issuing the bank acceptance note.
The Company’s subsidiary, Sonyo Refrigeration (Dalian) Co., Ltd pledged the bankacceptance note to the bank as guarantee for issuing the bank acceptance note.
The Company’s subsidiary, Wuhan New World Refrigeration Industry Co., LTD.,mortgaged its fixed assets, intangible assets and the investment property to the bank, as anintegrated limit of credit used for acceptance, letter of credit, letter of guarantee, factoring, otherspecific credit business.
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTDNotes to financial statementsJanuary 1, 2023 to December 31, 2023
(The currency is in RMB Yuan except otherwise indicated)(English translation for reference only)
24. Short-term borrowing
(1) Category of short-term borrowing
| Loan category | Closing balance | Opening balance |
| Credit loan | 256,686,746.70 | 262,016,713.87 |
| Factoring loan | 2,976,345.47 | - |
| Pledged loan | 2,624,692.21 | 12,036,276.28 |
| Total | 262,287,784.38 | 274,052,990.15 |
25. Notes payable
| Notes Category | Closing balance | Opening balance |
| Bank acceptance notes | 670,720,999.48 | 616,424,384.85 |
| Commercial acceptance notes | - | 2,520,000.00 |
| Total | 670,720,999.48 | 618,944,384.85 |
26. Accounts payable
| Item | Closing balance | Opening balance |
| Material payments | 931,983,444.51 | 956,122,327.00 |
| Project payments | 675,076,736.92 | 567,873,401.74 |
| Equipment payments | 43,234,911.60 | 55,406,593.91 |
| Others | 5,540,269.98 | 6,695,737.94 |
| Total | 1,655,835,363.01 | 1,586,098,060.59 |
27. Other accounts payable
| Item | Closing balance | Opening balance |
| Interest payable | - | - |
| Dividend payable | 533,156.00 | 533,156.00 |
| Other accounts payable | 278,270,996.17 | 66,521,094.25 |
| Total | 278,804,152.17 | 67,054,250.25 |
27.1 Dividend payable
| Item | Closing balance | Opening balance |
| Ordinary share dividend | 533,156.00 | 533,156.00 |
| Total | 533,156.00 | 533,156.00 |
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTDNotes to financial statementsJanuary 1, 2023 to December 31, 2023(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
27.2 Other accounts payable
(1) Other payables categorized by payments nature
| Payments nature | Closing balance | Opening balance |
| Supplier platform | 179,737,197.47 | - |
| Apply for reimbursement and unpaid | 24,617,613.80 | 21,409,586.91 |
| Payable factoring | 22,407,941.90 | - |
| Cash pledge and security deposit | 14,448,796.02 | 11,393,395.62 |
| Agency fees | 5,317,884.69 | - |
| Repair | 4,676,404.47 | - |
| Trade mark and royalty | 2,531,401.13 | 3,505,028.04 |
| Receipts under custody | 830,631.83 | 700,531.82 |
| Others | 23,703,124.86 | 29,512,551.86 |
| Total | 278,270,996.17 | 66,521,094.25 |
28. Contract liability
(1) Contract liability
| Item | Closing balance | Opening balance |
| Received in advance due from unrealized revenue | 787,685,294.53 | 647,645,820.57 |
| Total | 787,685,294.53 | 647,645,820.57 |
(2) Contract liability over 1 year
| Item | Closing balance | Unsettled reason |
| Company 2 | 23,690,469.49 | Not complete yet |
| Total | 23,690,469.49 | — |
(3) Change of book value of the contract liability
| Item | Change amount | Change reason |
| Received in advance due from unrealized revenue | 146,750,000.38 | Combination Scope change |
| Total | 146,750,000.38 | — |
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTDNotes to financial statementsJanuary 1, 2023 to December 31, 2023(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
29. Employee’s payable
(1) Category of employee’s payable
| Item | Opening balance | Increase | Decrease | Closing balance |
| Short-term employee’s payable | 118,200,459.60 | 698,112,149.00 | 666,960,098.49 | 149,352,510.11 |
| Post-employment benefit –defined contribution plan | 16,223.63 | 67,338,512.94 | 67,343,533.22 | 11,203.35 |
| Termination benefits | - | 2,643,680.07 | 2,510,280.07 | 133,400.00 |
| Other welfare due within 1 year | - | - | - | - |
| Total | 118,216,683.23 | 768,094,342.01 | 736,813,911.78 | 149,497,113.46 |
(2) Short-term employee’s payables
| Item | Opening balance | Increase | Decrease | Closing balance |
| Salaries, bonus, allowance, and subsidy | 103,351,245.84 | 566,724,928.58 | 533,844,717.12 | 136,231,457.30 |
| Welfare | - | 29,570,037.23 | 29,570,037.23 | - |
| Social insurance | 9,001.71 | 40,370,113.39 | 40,372,189.41 | 6,925.69 |
| Include: Medical insurance | 7,733.56 | 32,334,416.06 | 32,335,495.51 | 6,654.11 |
| Supplemental insurance | - | 37,988.21 | 37,988.21 | - |
| On-duty injury insurance | 1,268.15 | 4,158,076.12 | 4,159,072.69 | 271.58 |
| Maternity insurance | - | 3,839,633.00 | 3,839,633.00 | - |
| Housing funds | - | 46,650,075.94 | 46,471,919.96 | 178,155.98 |
| Labor union and training expenses | 3,426,187.27 | 11,176,647.07 | 10,594,153.94 | 4,008,680.40 |
| Short-term leave with pay | - | - | - | - |
| Reward bonus and welfare fund | 11,414,024.78 | 3,620,346.79 | 6,107,080.83 | 8,927,290.74 |
| Total | 118,200,459.60 | 698,112,149.00 | 666,960,098.49 | 149,352,510.11 |
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTDNotes to financial statementsJanuary 1, 2023 to December 31, 2023
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
(3) Defined contribution plan
| Item | Opening balance | Increase | Decrease | Closing balance |
| Pension | 12,626.24 | 65,219,039.12 | 65,220,801.52 | 10,863.84 |
| Unemployment insurance | 3,597.39 | 2,119,473.82 | 2,122,731.70 | 339.51 |
| Company annuity plan | - | - | - | - |
| Total | 16,223.63 | 67,338,512.94 | 67,343,533.22 | 11,203.35 |
30. Tax payable
| Item | Closing balance | Opening balance |
| Enterprise income tax | 10,958,503.00 | 3,541,171.62 |
| Value-added tax | 5,013,411.92 | 23,058,922.64 |
| Real estate tax | 2,589,711.66 | 2,212,510.37 |
| Land use tax | 1,313,078.49 | 1,122,457.62 |
| Stamp duty | 879,269.28 | 787,688.77 |
| City maintenance and construction tax | 551,839.60 | 1,253,818.83 |
| Individual income tax | 514,426.82 | 818,322.16 |
| Education surcharge | 394,171.13 | 895,584.93 |
| River toll fee | 2,080.36 | 1,046.68 |
| Total | 22,216,492.26 | 33,691,523.62 |
31. Non-current liabilities due within one year
| Item | Closing balance | Opening balance |
| Bond payable due within one year | 119,400,000.00 | 24,900,000.00 |
| Long-term payable due within one year | 24,636,926.13 | 29,809,686.93 |
| Lease obligation due within one year | 6,608,421.51 | 8,396,267.63 |
| Total | 150,645,347.64 | 63,105,954.56 |
32. Other current liabilities
| Item | Closing balance | Opening balance |
| Notes payable endorsed not derecognized | 148,957,983.15 | 127,165,397.88 |
| Output Vat to be carried forward | 54,357,881.28 | 77,484,605.36 |
| Total | 203,315,864.43 | 204,650,003.24 |
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTDNotes to financial statementsJanuary 1, 2023 to December 31, 2023(The currency is in RMB Yuan except otherwise indicated)(English translation for reference only)
33. Long-term borrowing
(1) Category of long-term borrowing
Note 1: Pledged loan of 0.6 billion Yuan is for business combination in 2022, whichcomprises
0.3 billion Yuan from Dalian Zhoushuizi Branch of China Construction Bank Corporation,5years with 2.75% borrowing rate. 50% shareholdings of Sonyo Compressor (Dalian)Co., Ltdand 37.5% shareholdings of Sonyo Refrigeration System (Dalian) Co., Ltd. were pledged. ChinaConstruction Bank Corporation will complete the guarantee in February 2023. 0.3 billion Yuanfrom Dalian Branch of Bank of Communications Co., Ltd., 7 years with 2.75% borrowing rate.50% shareholdings of Sonyo Compressor (Dalian)Co., Ltd and 37.5% shareholdings of SonyoRefrigeration System (Dalian) Co., Ltd. were pledged. Dalian Branch of Bank ofCommunications Co., Ltd will complete the guarantee in February 2023. In 2024, 40 millionYuan loan is planned to pay back to Construction bank and 1.44 million Yuan loan toCommunications bank.
Note 2: Pledged loan includes a new loan of 87 million Yuan in 2023 for acquisition ofSonyo Refrigeration System (Dalian) Co., Ltd. held by Panasonic Corporation of China Co.,LTD and Sanyo Electric (China)Co., Ltd. The loan is expired by 7 years with 2.75% borrowingrate. Up to December 31, 2023, the closing balance is 79million Yuan and will be repaid 5million Yuan in 2024.
Note 3: In year 2016, the Development Fund from China Development Bank gave supportto the Company’s intelligent and green equipment of cold chain and service industry baseproject and provided special fund to the Company’s holding shareholder, Bingshan Group. Thefund is160 million Yuan with 10year’s expiration at 1.2% rate. Once the fund arrived, BingshanGroup gave it to the Company at the same rate of 1.2% in lump sum. The above fund needed tobe warranted by the Company. The guarantee seems to be given for the holding shareholder, butit is for the Company itself in fact. Up to December 31, 2023, the closing balance is 130 millionYuan and will be repaid 60 million Yuan in 2024.
| Category | Closing Balance | Opening Balance |
| Pledged loan | 609,700,000.00 | 585,100,000.00 |
| Guarantee loan | 70,000,000.00 | 130,000,000.00 |
| Total | 679,700,000.00 | 715,100,000.00 |
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTDNotes to financial statementsJanuary 1, 2023 to December 31, 2023(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
34. Lease obligation
(1) Details of lease obligation
| Category | Closing balance | Opening balance |
| Lease payment | 38,276,477.18 | 23,357,885.20 |
| Less: unrecognized finance expense | 7,533,068.70 | 3,731,085.52 |
| Non-current liability due within 1 year | 6,608,421.51 | 8,396,267.63 |
| Net lease liability | 24,134,986.97 | 11,230,532.05 |
35. Long term accounts payable
| Item | Closing Balance | Opening Balance |
| Long term accounts payable | 10,331,937.30 | 31,009,644.16 |
| Special fund payable | - | - |
| Total | 10,331,937.30 | 31,009,644.16 |
35.1Category by nature
| Nature | Closing Balance | Opening Balance |
| Financial lease borrowings | 10,331,937.30 | 31,009,644.16 |
| Total | 10,331,937.30 | 31,009,644.16 |
36. Provision
| Nature | Closing Balance | Opening Balance | Reason |
| Warranty | 4,544,802.88 | 3,094,982.15 | Service after sales |
| Open litigation | - | 15,710,985.28 | — |
| Total | 4,544,802.88 | 18,805,967.43 | — |
37. Deferred income
(1) Category of deferred income
| Item | Opening Balance | Increase | Decrease | Closing Balance |
| Government subsidy | 99,754,346.39 | 10,522,129.73 | 12,002,208.32 | 98,274,267.80 |
| Total | 99,754,346.39 | 10,522,129.73 | 12,002,208.32 | 98,274,267.80 |
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTDNotes to financial statementsJanuary 1, 2023 to December 31, 2023(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
(2) Government subsidy
| Government subsidy item | Opening Balance | Increase | Into non- operating income | Into other income | The value offset cost and expense this year | Others | Closing Balance | Related with asset/ income |
| Contribution to subsidiary company relocation | 37,876,000.00 | - | - | 1,114,000.00 | - | - | 36,762,000.00 | Asset related |
| Application of NH3 and CO2 instead of R22 screw refrigerating machine combined condensing unit | 20,506,438.28 | - | - | 1,932,952.12 | - | - | 18,573,486.16 | Asset Related |
| Eco Compressor project | 17,421,621.34 | - | - | 2,553,850.15 | - | - | 14,867,771.19 | Asset / Income related |
| R290 replacement of R22 large industrial screw unit | 13,006,663.20 | 3,251,665.80 | - | - | - | - | 16,258,329.00 | Asset related |
| R290 replacement of R22 industrial double stage screw unit | 4,747,680.00 | 1,186,920.00 | - | - | - | - | 5,934,600.00 | Asset related |
| Compressor IC system | 3,169,590.55 | - | - | 368,769.72 | - | - | 2,800,820.83 | Asset related |
| Ultrasonic intelligent defrost technology | 3,006,353.02 | - | - | 414,824.40 | - | - | 2,591,528.62 | Asset related |
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTDNotes to financial statementsJanuary 1, 2023 to December 31, 2023(The currency is in RMB Yuan except otherwise indicated)(English translation for reference only)
| Government subsidy item | Opening Balance | Increase | Into non- operating income | Into other income | The value offset cost and expense this year | Others | Closing Balance | Related with asset/ income |
| Refrigeration testing APP | 20,000.00 | - | - | 20,000.00 | - | - | - | Asset related |
| 2023 AI Innovation Development Plan Fund- Government subsidy of Liaoning Provincial Department of Science and Technology - | - | 3,000,000.00 | - | 3,000,000.00 | - | - | - | Income related |
| Brand establishment expenses | - | 947,718.00 | - | 947,718.00 | - | - | - | Income related |
| Meat storage technology and equipment | - | 487,400.00 | - | 1,668.00 | - | - | 485,732.00 | Income related |
| Digital platform construction | - | 440,000.00 | - | 440,000.00 | - | - | - | Income related |
| FY2020 Subsidy for key science and technology research and development by Dalian Science and Technology Bureau | - | 418,500.00 | - | 418,500.00 | - | - | - | Income related |
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTDNotes to financial statementsJanuary 1, 2023 to December 31, 2023(The currency is in RMB Yuan except otherwise indicated)(English translation for reference only)
| Government subsidy item | Opening Balance | Increase | Into non- operating income | Into other income | The value offset cost and expense this year | Others | Closing Balance | Related with asset/ income |
| Study on heat transfer performance of red water heat exchanger and replacement of heat exchange tube | - | 220,000.00 | - | 220,000.00 | - | - | - | Income related |
| Special funds for innovation | - | 180,000.00 | - | 180,000.00 | - | - | - | Income related |
| FY2023 subsidy by Bureau of Science and Technology | - | 115,500.00 | - | 115,500.00 | - | - | - | Income related |
| Loan discount | - | 65,833.33 | - | 65,833.33 | - | - | - | Income related |
| FY2022 Science and Technology Awards | - | 50,000.00 | - | 50,000.00 | - | - | - | Income related |
| Demonstration subsidy | - | 50,000.00 | - | 50,000.00 | - | - | - | Income related |
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTDNotes to financial statementsJanuary 1, 2023 to December 31, 2023(The currency is in RMB Yuan except otherwise indicated)(English translation for reference only)
| Government subsidy item | Opening Balance | Increase | Into non- operating income | Into other income | The value offset cost and expense this year | Others | Closing Balance | Related with asset/ income |
| Dalian Employment and Talent Service Center government subsidy - unemployment insurance expansion subsidy | - | 28,816.00 | - | 28,816.00 | - | - | - | Income related |
| FY2022 Dalian scientific and technological achievements transfer and transformation subsidy and award project | - | 38,000.00 | - | 38,000.00 | - | - | - | Income related |
| Subsidies for the training of highly skilled personnel | - | 18,360.00 | - | 18,360.00 | - | - | - | Income related |
| Subsidies for college graduates and social security subsidies | - | 15,056.60 | - | 15,056.60 | - | - | - | Income related |
| Subsidy for employment of graduates by Dalian Jinpu New Area employment and talent service center | - | 6,000.00 | - | 6,000.00 | - | - | - | Income related |
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTDNotes to financial statementsJanuary 1, 2023 to December 31, 2023(The currency is in RMB Yuan except otherwise indicated)(English translation for reference only)
| Government subsidy item | Opening Balance | Increase | Into non- operating income | Into other income | The value offset cost and expense this year | Others | Closing Balance | Related with asset/ income |
| Subsidy for labor training | - | 2,360.00 | - | 2,360.00 | - | - | - | Income related |
| Total | 99,754,346.39 | 10,522,129.73 | - | 12,002,208.32 | - | - | 98,274,267.80 | — |
Note: Asset related grant shall be offset the cost or expense within the asset’s useful life; income related grant shall be booked into other income or offset costor expense if it is relevant to daily activity, otherwise it shall be booked into non-operating income.
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTDNotes to financial statementsJanuary 1, 2023 to December 31, 2023(The currency is in RMB Yuan except otherwise indicated)(English translation for reference only)
38.Share capital
| 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 |
39.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 |
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTDNotes to financial statementsJanuary 1, 2023 to December 31, 2023(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
40.Other comprehensive income
| Items | Opening Balance | Current year | 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 |
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTDNotes to financial statementsJanuary 1, 2023 to December 31, 2023(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
41. Special reserve
| Item | Opening Balance | Increase | Decrease | Closing Balance |
| Manufacturing safety | - | 13,214,150.71 | 12,764,775.75 | 449,374.96 |
| Total | - | 13,214,150.71 | 12,764,775.75 | 449,374.96 |
42.Surplus reserves
| Item | Opening Balance | Increase | Decrease | Closing Balance |
| Statutory surplus reserve | 362,972,224.98 | 10,426,530.94 | - | 373,398,755.92 |
| Discretionary surplus reserve | 462,249,814.41 | 31,510,869.01 | - | 493,760,683.42 |
| Total | 825,222,039.39 | 41,937,399.95 | - | 867,159,439.34 |
Note: The Company made profit distribution during the reporting period. According to theresolution of the 2022 annual General meeting of shareholders, the discretionary surplus reserveof RMB 31,510,869.01 will be appropriated based on 20% of the net profit of the statutoryfinancial report for FY2022; Statutory surplus reserve of 10,426,530.94 Yuan shall beappropriated based on 10% of the net profit of the parent company this year.
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTDNotes to financial statementsJanuary 1, 2023 to December 31, 2023
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
43.Undistributed profits
| Item | Current year | Last year |
| Closing balance of last year | 618,445,922.58 | 627,764,582.32 |
| Add: Adjustments to the opening balance of undistributed profits | -65,810.05 | -539,927.37 |
| Including: additional retrospective adjustments according to the new accounting standards | - | - |
| Change on accounting policy | -65,810.05 | -539,927.37 |
| Correction of prior period significant errors | - | - |
| Change on combination scope under same control | - | - |
| Other factors | - | - |
| Opening balance of current year | 618,380,112.53 | 627,224,654.95 |
| Add: net profit attributable to shareholders of parent company in the year | 49,375,900.83 | 18,255,330.45 |
| Less: Provision for statutory surplus reserves | 10,426,530.94 | 15,755,434.51 |
| Provision for any surplus reserves | 31,510,869.01 | - |
| Provision of general risk | - | - |
| Dividends payable for common shares | 8,432,125.07 | 8,432,125.07 |
| Common stock dividends converted to equity | - | - |
| Others | - | 3,386,430.61 |
| Closing balance of current year | 617,386,488.34 | 618,380,112.53 |
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTDNotes to financial statementsJanuary 1, 2023 to December 31, 2023(The currency is in RMB Yuan except otherwise indicated)(English translation for reference only)
44.Operating revenue and cost
(1) Details
| Items | Current year | Last year | ||
| Sales revenue | Cost of sales | Sales revenue | Cost of sales | |
| Revenue from principle operation | 4,708,789,817.06 | 3,931,870,621.80 | 2,803,347,359.37 | 2,459,913,203.46 |
| Revenue from other operation | 107,151,650.64 | 73,726,836.39 | 89,737,950.92 | 77,615,637.94 |
| Total | 4,815,941,467.70 | 4,005,597,458.19 | 2,893,085,310.29 | 2,537,528,841.40 |
(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 | 4,613,126,067.20 | 3,833,847,926.43 | 202,815,400.50 | 171,749,531.76 | 4,815,941,467.70 | 4,005,597,458.19 |
| Manufacture products | 3,212,707,591.48 | 2,562,240,496.51 | 144,731,244.58 | 128,025,645.17 | 3,357,438,836.06 | 2,690,266,141.68 |
| Project installation | 1,270,182,363.19 | 1,173,033,479.16 | 24,480,978.58 | 22,576,643.32 | 1,294,663,341.77 | 1,195,610,122.48 |
| Other products and service | 130,236,112.53 | 98,573,950.76 | 33,603,177.34 | 21,147,243.27 | 163,839,289.87 | 119,721,194.03 |
| Classified by geography location | 4,613,126,067.20 | 3,833,847,926.43 | 202,815,400.50 | 171,749,531.76 | 4,815,941,467.70 | 4,005,597,458.19 |
| domestic | 4,075,399,244.72 | 3,437,323,354.01 | 202,815,400.50 | 171,749,531.76 | 4,278,214,645.22 | 3,609,072,885.77 |
| overseas | 537,726,822.48 | 396,524,572.42 | - | - | 537,726,822.48 | 396,524,572.42 |
| Timing of goods transferred | 4,613,126,067.20 | 3,833,847,926.43 | 202,815,400.50 | 171,749,531.76 | 4,815,941,467.70 | 4,005,597,458.19 |
| At a point | 4,514,583,069.37 | 3,736,525,341.06 | 202,815,400.50 | 171,749,531.76 | 4,717,398,469.87 | 3,908,274,872.82 |
| Over the time | 98,542,997.83 | 97,322,585.37 | - | - | 98,542,997.83 | 97,322,585.37 |
| Total | 4,613,126,067.20 | 3,833,847,926.43 | 202,815,400.50 | 171,749,531.76 | 4,815,941,467.70 | 4,005,597,458.19 |
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTDNotes to financial statementsJanuary 1, 2023 to December 31, 2023
(The currency is in RMB Yuan except otherwise indicated)(English translation for reference only)
45.Taxes and surcharges
| Items | Current year | Last year |
| Property tax | 10,073,731.86 | 8,149,841.00 |
| City construction tax | 9,012,910.60 | 3,787,453.40 |
| Education surcharge | 6,439,924.63 | 2,716,374.19 |
| Land use tax | 5,015,774.62 | 4,339,092.94 |
| Stamp duty | 3,354,441.63 | 3,036,523.34 |
| Vehicle and vessel tax | 48,250.80 | 21,640.80 |
| Others | 23,642.94 | 10,700.69 |
| Total | 33,968,677.08 | 22,061,626.36 |
46.Selling expenses
| Items | Current year | Last year |
| Employee benefit | 141,519,344.86 | 94,640,905.30 |
| Travel expense | 25,719,851.30 | 12,871,992.12 |
| Official business expense | 25,483,586.78 | 15,487,688.84 |
| Maintenance and repair expense | 17,803,113.38 | 17,886,776.97 |
| Business entertaining expense | 15,227,636.78 | 9,081,381.79 |
| Advertisement and bids expense | 4,936,902.38 | 1,817,387.69 |
| Depreciation expense | 2,257,182.91 | 861,025.06 |
| Other expense | 914,408.09 | 1,088,557.19 |
| Total | 233,862,026.48 | 153,735,714.96 |
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTDNotes to financial statementsJanuary 1, 2023 to December 31, 2023(The currency is in RMB Yuan except otherwise indicated)(English translation for reference only)
47. Administrative expenses
| Items | Current year | Last year |
| Employee benefit | 127,272,720.89 | 104,233,517.24 |
| Official expense | 28,493,919.83 | 19,600,747.44 |
| Depreciation expense | 25,264,201.98 | 17,450,109.34 |
| Maintenance and repair expense | 16,475,833.99 | 8,558,115.62 |
| Long-term assets amortization | 11,646,085.10 | 7,988,593.35 |
| Patent trade mark use | 9,372,566.10 | 1,139,572.89 |
| Design consultant and test service expense | 8,075,373.29 | 14,255,471.99 |
| Travel expense | 6,514,713.45 | 4,544,965.76 |
| Other taxes and fee | 3,686,510.53 | 841,243.95 |
| Safety production cost | 3,062,462.68 | 2,791,153.21 |
| Business entertaining expense | 2,738,569.12 | 1,664,993.09 |
| Insurance expense | 1,435,356.69 | 830,189.74 |
| Advertisement expense | 814,999.22 | 424,668.21 |
| Transportation expense | 47,368.09 | 204,637.83 |
| Other expense | 5,667,564.54 | 1,850,224.84 |
| Total | 250,568,245.50 | 186,378,204.50 |
48.Technology development expense
| Items | Current year | Last year |
| Employee benefit | 102,598,481.06 | 52,660,638.70 |
| Raw material | 20,934,040.54 | 12,253,575.39 |
| Depreciation and amortization expense | 14,685,194.95 | 6,409,516.10 |
| Other expense | 25,968,001.16 | 5,469,075.50 |
| Total | 164,185,717.71 | 76,792,805.69 |
49.Financial expenses
| Items | Current year | Last year |
| Interest expenses | 37,918,133.57 | 18,581,726.78 |
| Less: interest income | 10,558,433.14 | 5,850,062.80 |
| Add: exchange loss | -299,066.17 | -3,698,043.31 |
| Add: others expenditure | 3,097,443.21 | 2,791,902.36 |
| Total | 30,158,077.47 | 11,825,523.03 |
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTDNotes to financial statementsJanuary 1, 2023 to December 31, 2023(The currency is in RMB Yuan except otherwise indicated)(English translation for reference only)
50.Other income
| Items | Current year | Last year |
| Input VAT accelerated deduction | 17,504,090.47 | - |
| Government subsidy | 12,002,208.32 | 6,473,525.00 |
| Insurance premium refund | 367,800.00 | - |
| Personal income tax handling fee refund | 180,238.52 | 90,694.36 |
| Job stability subsidy | 111,468.81 | 98,244.00 |
| VAT deduction for recruiting poor people | 12,350.00 | - |
| Gain on debt restructuring | 1,512.39 | 119,554.03 |
| Land and property tax preference | - | 391,094.76 |
| VAT return | - | 43.32 |
| Total | 30,179,668.51 | 7,173,155.47 |
51.Gain on fair value change
| Source of gain on FV change | Current year | Last year |
| Other noncurrent financial assets | 14,073,910.32 | -46,991,034.40 |
| Total | 14,073,910.32 | -46,991,034.40 |
52.Investment income
| Items | Current year | Last year |
| Long-term equity investment gain under equity method | -4,884,731.99 | -37,218,861.27 |
| Gain from disposal of long-term equity investment | - | 109,098,404.60 |
| Gain from FV remeasurement of the shares on obtaining control | - | 170,729,805.79 |
| Gain from holding of other noncurrent financial assets | 5,796,799.24 | 20,671,710.39 |
| Gain from disposal of other no-current financial assets | - | 43,296,525.04 |
| Gain on debt restructuring | 1,790,089.90 | 110,913.39 |
| Discounting fees for bank acceptance note | -1,595,528.43 | - |
| Dividend received for other equity instrument held | - | - |
| Total | 1,106,628.72 | 306,688,497.94 |
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTDNotes to financial statementsJanuary 1, 2023 to December 31, 2023
(The currency is in RMB Yuan except otherwise indicated)(English translation for reference only)
53.Credit impairment loss (loss listed as “-”)
| Items | Current year | Last year |
| Bad debt loss on notes receivable | 91,074.58 | -789,111.45 |
| Bad debt loss on receivable | -68,147,779.35 | -77,384,660.21 |
| Bad debt loss on other receivable | -1,885,950.98 | -4,020,227.27 |
| Bad debt loss on long term receivable | 210,600.00 | -501,389.82 |
| Total | -69,732,055.75 | -82,695,388.75 |
54.Assets impairment losses (loss listed as “-”)
| Items | Current year | Last year | |
| Loss on impairment of inventory and cost to fulfill the contract obligation | -17,646,037.59 | -39,711,456.37 | |
| Loss of contract asset impairment | 4,767,716.49 | -30,814,338.63 | |
| Impairment on other non-current asset | -1,527,371.56 | - | |
| Impairment on construction in progress | - | -4,300,000.00 | |
| Total | -14,405,692.66 | -74,825,795.00 | |
55.Gain on assets disposal (loss listed as “-”)
| Item | Current year | Last year |
| Gain on non-current assets disposal | -1,184,930.14 | 194,556.13 |
| Including: gain on non-current assets disposal not classified as held for sale | -1,184,930.14 | 194,556.13 |
| Including: gain on fixed assets disposal | -689,706.84 | 194,556.13 |
| gain on intangible assets disposal | -433,100.00 | - |
| gain on early derecognition of use right asset | -62,123.30 | - |
| Total | -1,184,930.14 | 194,556.13 |
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTDNotes to financial statementsJanuary 1, 2023 to December 31, 2023(The currency is in RMB Yuan except otherwise indicated)(English translation for reference only)
56. Non-operating income
（1） Non-operating income list
| Item | Current year | Last year | Amounts recognized into non-recurring profit or loss for the year |
| Loss claimed reverse | 10,206,786.86 | - | 10,206,786.86 |
| Penalty received | 2,021,941.14 | 6,612,182.54 | 2,021,941.14 |
| Creditor giving up | 1,895,792.78 | 4,345,157.74 | 1,895,792.78 |
| Gain on disposal of non-current asset | 39,884.14 | 93,160.73 | 39,884.14 |
| Contract withdrawn and received in advance transferred to non-operating income | - | 432,311.90 | - |
| Other items | 369,517.17 | 358,715.64 | 369,517.17 |
| Total | 14,533,922.09 | 11,841,528.55 | 14,533,922.09 |
57.Non-operating expenses
| Item | Current year | Last year | Amounts recognized into non-recurring profit or loss for the year |
| Non-current assets scrap loss | 5,511,195.40 | 191,291.12 | 5,511,195.40 |
| Compensation | 952,429.15 | 2,813,844.43 | 952,429.15 |
| Outward donation | 360,000.00 | 57,000.00 | 360,000.00 |
| Expected loss for open litigation | - | 2,019,000.00 | - |
| Others | 142,852.98 | 123,404.80 | 142,852.98 |
| Total | 6,966,477.53 | 5,204,540.35 | 6,966,477.53 |
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTDNotes to financial statementsJanuary 1, 2023 to December 31, 2023
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
58. Income tax expenses
(1) Income tax expenses
| Items | Current year | Last year |
| Current income tax expenses | 25,126,696.59 | 5,482.46 |
| Deferred income tax expenses | -14,094,997.51 | 571,333.82 |
| Total | 11,031,699.08 | 576,816.28 |
(2) Adjustment process of accounting profit and income tax expense
| Items | Current year |
| Consolidated total profit this year | 65,206,238.83 |
| Income tax expenses at applicable tax rate | 9,780,935.82 |
| Effect on subsidiary applied to different tax rate | -1,415,501.20 |
| Effect on prior period income tax adjustment | 503,530.40 |
| Effect on non-taxable income | -657,243.07 |
| Effect on non-deductible cost, expense and loss | 1,850,564.14 |
| Effect on use of deductible loss from unrecognized deferred tax assets in the prior period | -546,630.00 |
| Deferred tax assets recognized for prior period temporary difference | -1,127,554.15 |
| Effect on temporary difference or deductible loss from unrecognized deferred tax assets this year | 20,404,968.93 |
| R&D expenditure accelerated deduction | -20,664,943.68 |
| Others | 2,903,571.89 |
| Income tax expense | 11,031,699.08 |
59. Other comprehensive income
Refer to the note “VI.40 Other comprehensive income” for details.
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTDNotes to financial statementsJanuary 1, 2023 to December 31, 2023(The currency is in RMB Yuan except otherwise indicated)(English translation for reference only)
60. Notes to cash flow statement
(1) Cash relevant to operating activities
1) Cash received relevant to operating activities
| Items | Current year | Last year |
| Deposit returned | 56,211,426.27 | 43,441,397.62 |
| Lease premium received | 34,669,117.40 | 14,641,754.19 |
| Government grants | 15,077,248.10 | 5,669,861.48 |
| Interest income | 8,914,720.67 | 5,128,719.77 |
| Receivable from the 3rd party | 3,001,285.07 | 4,656,358.49 |
| Compensation | 2,497,389.05 | 10,248,694.24 |
| Received travel expense refund | 1,834,601.94 | 3,180,530.19 |
| Frozen money refund | 550,487.90 | 3,407,480.07 |
| Others | 4,072,381.79 | 2,065,719.26 |
| Total | 126,828,658.19 | 92,440,515.31 |
2) Cash paid relevant to operating activities
| Items | Current year | Last year |
| Expenditure | 202,530,612.54 | 122,463,075.59 |
| Deposit paid | 50,899,935.96 | 89,837,201.58 |
| Frozen accounts | 21,363,555.30 | 209,197.14 |
| Business travel borrowing | 8,978,717.58 | 6,698,577.75 |
| Bank handling charges | 3,533,466.20 | 1,737,635.11 |
| Unsettled AR/AP among non-related party | 181,386.21 | 2,896,588.50 |
| Others | 2,935,250.16 | 8,261,197.76 |
| Total | 290,422,923.95 | 232,103,473.43 |
(2) Cash relevant to investing activities
1) Significant cash received relevant to investing activities
| Items | Current year | Last year |
| Cash dividend | 44,342,521.09 | 109,215,313.16 |
2) Significant cash paid relevant to investing activities
| Items | Current year | Last year |
| Purchase of long-term asset | 89,321,945.50 | 50,713,747.56 |
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTDNotes to financial statementsJanuary 1, 2023 to December 31, 2023
(The currency is in RMB Yuan except otherwise indicated)(English translation for reference only)
3) Other cash paid relevant to investing activities
| Items | Current year | Last year |
| Fixed-term deposit | 168,000,000.00 | - |
(3) Cash relevant to financing activities
1) Other cash received relevant to financing activities
| Items | Current year | Last year |
| Notes payable to supplier | 55,956,005.87 | - |
| Sale leaseback and financial lease | 6,600,000.00 | 12,000,000.00 |
| Notes discounted | 3,119,926.93 | 11,991,047.27 |
| Total | 65,675,932.80 | 23,991,047.27 |
2) Others cash paid relevant to financing activities
| Items | Current year | Last year |
| Payment of guarantee money | 39,502,750.62 | - |
| Notes payable to supplier | 13,629,318.00 | - |
| Sale& leaseback and financial lease | 10,891,978.68 | 25,415,743.25 |
| Lease premium payable | 6,585,497.64 | 3,713,373.61 |
| Discount interest on credit letter | 80,863.54 | - |
| Total | 70,690,408.48 | 29,129,116.86 |
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTDNotes to financial statementsJanuary 1, 2023 to December 31, 2023
(The currency is in RMB Yuan except otherwise indicated)(English translation for reference only)
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 | 274,052,990.15 | 298,643,636.90 | 10,207,457.33 | 314,000,000.00 | 6,616,300.00 | 262,287,784.38 |
| Long-term borrowings | 715,100,000.00 | 87,000,000.00 | - | 27,900,000.00 | 94,500,000.00 | 679,700,000.00 |
| Lease liability | 11,230,532.05 | - | 29,093,821.83 | 15,982,846.23 | 206,520.68 | 24,134,986.97 |
| Non-current liability due within one year | 63,105,954.56 | - | 104,016,474.87 | 14,960,912.15 | 1,516,169.64 | 150,645,347.64 |
| Long-term payable | 31,009,644.16 | 6,600,000.00 | 10,845,763.56 | 22,948,324.57 | 15,175,145.85 | 10,331,937.30 |
| Other payable-supplier platform | - | 55,956,005.87 | 137,410,509.60 | 13,629,318.00 | - | 179,737,197.47 |
| Total | 1,094,499,120.92 | 448,199,642.77 | 291,574,027.19 | 409,421,400.95 | 118,014,136.17 | 1,306,837,253.76 |
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTDNotes to financial statementsJanuary 1, 2023 to December 31, 2023
(The currency is in RMB Yuan except otherwise indicated)(English translation for reference only)
61. Supplementary information of consolidated cash flow statement
(1) Information
| Items | Current year | Last year |
| 1. Adjusting net profit into cash flows of operating activities: | —— | —— |
| Net profit | 54,174,539.75 | 20,366,757.66 |
| Add: Provision for impairment of assets | 14,405,692.66 | 74,825,795.00 |
| Provision for impairment of credit | 69,732,055.75 | 82,695,388.75 |
| Depreciation of fixed assets, Amortization of mineral resources, and biological assets | 135,625,135.60 | 82,258,092.89 |
| Depreciation of right-of-use assets | 11,340,839.21 | 3,709,086.79 |
| Amortization of intangible assets | 13,570,693.11 | 10,478,529.57 |
| Amortization of long-term deferred expenses | 1,545,642.28 | 1,455,157.51 |
| Losses on disposal of fixed assets, intangible assets, and long-term assets (income listed with”-”) | 1,184,930.14 | -194,556.13 |
| Losses on write-off of fixed assets (income listed with”-”) | 5,471,311.26 | 98,130.39 |
| Change of fair value profit or loss | -14,073,910.32 | 46,991,034.40 |
| Financial expense (income listed with”-”) | 37,918,133.57 | 18,581,726.78 |
| Investment loss (income listed with”-”) | -1,106,628.72 | -306,688,497.94 |
| Decrease of deferred tax assets (increase listed with”-”) | -21,471,717.58 | 9,978,391.90 |
| Increase of deferred tax liabilities (decrease listed with”-”) | 864,530.06 | -9,407,058.08 |
| Decrease of inventories (increase listed with”-”) | -257,408,322.60 | -412,972,663.16 |
| Decrease of operating receivables (increase listed with”-”) | -500,972,621.69 | -1,052,478,135.51 |
| Increase of operating payables (decrease listed with”-”) | 424,759,029.78 | 1,374,055,519.82 |
| Others | - | - |
| Net cash flows arising from operating activities | -24,440,667.74 | -56,247,299.36 |
| 2. Significant investment and financing activities unrelated to cash income and expenses | — | — |
| Liabilities transferred to capital | - | - |
| Convertible bonds within 1 year | - | - |
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTDNotes to financial statementsJanuary 1, 2023 to December 31, 2023(The currency is in RMB Yuan except otherwise indicated)(English translation for reference only)
| Items | Current year | Last year |
| Financing leased fixed assets | - | - |
| 3. Net increase (decrease) of cash and cash equivalent | — | — |
| Closing balance of cash | 670,440,335.98 | 921,661,803.17 |
| Less: Opening balance of cash | 921,661,803.17 | 438,969,337.87 |
| Add: Closing balance of cash equivalent | - | - |
| Less: Opening balance of cash equivalent | - | - |
| Net increase of cash and cash equivalent | -251,221,467.19 | 482,692,465.30 |
(2) Net cash paid to acquisition of subsidiary
| Items | Current year |
| Cash & cash equivalent paid for acquisition | 145,285,500.00 |
| Sonyo Refrigeration (Dalian) Co., Ltd. | 145,285,500.00 |
| Less: Cash & cash equivalent held by acquirees on acquisition date | 133,228,548.98 |
| Sonyo Refrigeration (Dalian) Co., Ltd. | 133,228,548.98 |
| Add: Cash & cash equivalent paid for prior period’s acquisition | - |
| Net cash paid to acquisition of subsidiary | 12,056,951.02 |
(3) Cash and cash equivalents
| Items | Current year | Last year |
| Cash | 670,440,335.98 | 921,661,803.17 |
| Including: Cash on hand | 70,750.93 | 80,702.47 |
| Bank deposit used for paying at any moment | 670,303,450.55 | 921,581,100.70 |
| 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 | 670,440,335.98 | 921,661,803.17 |
| Cash and cash equivalents with restriction within the Company and its subsidiaries of the group | - | - |
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTDNotes to financial statementsJanuary 1, 2023 to December 31, 2023
(The currency is in RMB Yuan except otherwise indicated)(English translation for reference only)
(4) Monetary fund not belonging to cash and cash equivalent
| Items | Current year | Last year | Reasons |
| Fixed term deposit | 168,000,000.00 | - | Held to maturity |
| Guarantee money for bank acceptance note | 44,200,486.65 | 48,567,322.04 | Guarantee money |
| Guarantee money for guarantee letter | 41,547,977.10 | 33,697,941.99 | Guarantee money |
| Frozen | 21,578,536.32 | 550,487.90 | Frozen |
| Interest receivable | 2,321,702.76 | 959,002.78 | Held to maturity |
| Rural workers’ salary account restriction | 1,731,234.30 | - | Special account |
| Rural workers guarantee fund | 1,219,297.00 | 729,341.30 | Guarantee money |
| Total | 280,599,234.13 | 84,504,096.01 | — |
62. Change of shareholder’s equity
None
63. Monetary category of foreign currency
(1) Monetary category of foreign currency
| Item | Closing Balance (foreign currency) | Exchange Rate | Closing Balance (RMB) |
| Cash | — | — | — |
| Including：USD | 833,133.93 | 7.0827 | 5,900,837.69 |
| JPY | 106,591,562.00 | 0.0502 | 5,352,282.10 |
| Euro | 44,150.36 | 7.8592 | 346,986.51 |
| HK$ | 93,239.38 | 0.9062 | 84,495.39 |
| Accounts receivable | — | — | — |
| Including: USD | 7,081,806.85 | 7.0827 | 50,158,313.38 |
| JPY | 76,615,583.00 | 0.0502 | 3,847,098.27 |
| Euro | 690,473.72 | 7.8592 | 5,426,571.06 |
| Accounts payable | — | — | — |
| Including: USD | 1,124,814.88 | 7.0827 | 7,966,726.35 |
| JPY | 35,741,667.00 | 0.0502 | 1,794,696.33 |
| Other accounts payable | — | — | — |
| Including: JPY | 8,304,510.00 | 0.0502 | 416,994.36 |
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTDNotes to financial statementsJanuary 1, 2023 to December 31, 2023(The currency is in RMB Yuan except otherwise indicated)(English translation for reference only)
64. Lease
(1) As a lessee
| Items | Current year | Last year |
| Interest expense on lease liabilities | 1,043,053.19 | 1,259,087.12 |
| Short-term lease expense recognized in income statement | 4,114,059.87 | 1,650,882.62 |
| Low-value asset lease expense recognized in income statement (excl short-term lease) | - | - |
| Income from the sublease of the right-of-use the assets | - | - |
| Sum of cash outflows related to leases | 8,453,910.59 | 5,364,256.23 |
| Cash inflow from sale and leaseback transactions | 6,600,000.00 | 12,000,000.00 |
| Cash outflow from sale and leaseback transactions | 10,891,978.68 | 25,415,743.25 |
(2) As a lessor
Operating lease
| Items | Lease income | Include: income related to variable lease payments not included in lease payment receivable |
| Office and plant | 28,888,128.11 | - |
| Apartment | 106,380.96 | - |
| Total | 28,994,509.07 | - |
65. Research and development expense
| Items | Current year | Last year |
| Labor cost | 102,598,481.06 | 52,660,638.70 |
| Material cost | 20,934,040.54 | 12,253,575.39 |
| Depreciation and amortization | 14,685,194.95 | 6,409,516.10 |
| Others | 25,968,001.16 | 5,469,075.50 |
| Total | 164,185,717.71 | 76,792,805.69 |
| Expensed R&D | 164,185,717.71 | 76,792,805.69 |
| Capitalized R&D | - | - |
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTDNotes to financial statementsJanuary 1, 2023 to December 31, 2023
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
VII. Change of Consolidation Scope
1. Business combination not under same control
(1) Business combination not under same control this year
| Acquire | Share acquisition point | Cost | (%) | Method | Acquisition date | Basis for determining acquisition date | Information between acquisition date and the year end | ||
| Revenue | Net profit | cashflow | |||||||
| Sonyo Refrigeration (Dalian) Co., Ltd. | 2023-6-2 | 145,285,500.00 | 100.00 | Purchase with cash | 2023-6-2 | Transfer of control | 253,806,212.28 | 3,987,334.85 | -82,362,599.35 |
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTDNotes to financial statementsJanuary 1, 2023 to December 31, 2023
(The currency is in RMB Yuan except otherwise indicated)(English translation for reference only)
(2) Combination cost and goodwill
| Item | Sonyo Refrigeration (Dalian) Co., Ltd. |
| Cash | 145,285,500.00 |
| FV of non-cash asset | - |
| FV of shareholding held prior to acquisition on acquisition date | - |
| Total of combination cost | 145,285,500.00 |
| Less: proportion of FV of identifiable net asset obtained | 107,228,836.48 |
| The difference between goodwill/cost of combination less and proportion of FV of identifiable net asset obtained | 38,056,663.52 |
(3) Identifiable asset, liability of acquiree on acquisition date
| Items | Sonyo Refrigeration (Dalian) Co., Ltd. | ||
| FV on acquisition date | BV on acquisition date | ||
| Assets: | 780,585,239.05 | 701,851,729.23 | |
| Monetary funds | 135,690,886.90 | 135,690,886.90 | |
| Accounts receivable | 140,250,048.25 | 140,250,048.25 | |
| Prepayment | 5,562,914.24 | 5,562,914.24 | |
| Inventory | 299,313,831.40 | 299,313,831.40 | |
| Other equity instrument investment | 1,717,629.40 | 1,336,959.00 | |
| Fixed asset | 112,691,400.61 | 50,374,134.76 | |
| Construction in process | 1,324,905.50 | 1,324,905.50 | |
| Right-of-use asset | 6,736,919.97 | 6,736,919.97 | |
| Intangible asset | 36,748,493.16 | 20,712,919.59 | |
| Deferred tax asset | 7,512,572.08 | 7,512,572.08 | |
| Other current asset | 33,035,637.54 | 33,035,637.54 | |
| Liability: | 673,356,402.57 | 661,546,376.10 | |
| Accounts payable | 588,702,714.87 | 588,702,714.87 | |
| Employee payable | 32,347,444.78 | 32,347,444.78 | |
| Lease liability | 7,287,087.48 | 7,287,087.48 | |
| Deferred Tax liability | 11,810,026.47 | - | |
| Other current liability | 33,209,128.97 | 33,209,128.97 | |
| Net asset | 107,228,836.48 | 40,305,353.13 | |
| les：Minority interest | - | - | |
| Net asset obtained | 107,228,836.48 | 40,305,353.13 | |
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTDNotes to financial statementsJanuary 1, 2023 to December 31, 2023(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
(4) Others
None.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 |
| Wuhan Lanning Energy | 2,200.00 | Wuhan | Wuhan | Trading | - | 100 | Acquisition |
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTDNotes to financial statementsJanuary 1, 2023 to December 31, 2023(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
| Name of subsidiaries | Registered capital（10K） | Main business address | Registered address | Business nature | Shareholding (%) | Obtaining method | |
| Technology Co., Ltd. | |||||||
| 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.
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTDNotes to financial statementsJanuary 1, 2023 to December 31, 2023(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
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 Fuji Bingshan Vending Machine Co., Ltd | Dalian | Dalian | Manufacturing | 49.00 | - | Equity method |
| Jiangsu Jingxue Insulation Technology Co., Ltd | Changzhou | Changzhou | Manufacturing | 14.91 | - | Equity method |
| 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
affiliated company.
2) The Company doesn’t have joint venture or affiliated companies which have no significantinfluence although being held 20% or more voting rights.
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTDNotes to financial statementsJanuary 1, 2023 to December 31, 2023(The currency is in RMB Yuan except otherwise indicated)(English translation for reference only)
（2） The key financial information of affiliated companies
| Items | Closing balance/Current year | ||
| Dalian Fuji Bingshan Vending Machine Co., Ltd | Jiangsu Jingxue Insulation Technology Co., Ltd | Dalian Bingshan Metal Technology Co., Ltd. | |
| Current assets | 279,515,256.77 | 1,513,841,724.68 | 334,413,727.30 |
| Including: Cash and cash equivalents | 18,195,178.30 | 151,387,053.19 | 163.052.296.71 |
| Non-current assets | 190,659,275.57 | 301,638,618.76 | 38,148,931.23 |
| Total assets | 470,174,532.34 | 1,815,480,343.44 | 372,562,658.53 |
| Current liabilities | 300,289,317.09 | 943,431,015.22 | 58,315,558.14 |
| Non-current liabilities | 32,367,401.38 | 40,353,776.15 | - |
| Total liabilities | 332,656,718.47 | 983,784,791.37 | 58,315,558.14 |
| Total net asset | 137,517,813.87 | 831,695,552.07 | 314,247,100.39 |
| Minority interests | - | 274,736.66 | - |
| Equity to the parent company | 137,517,813.87 | 831,420,815.41 | 314,247,100.39 |
| Share of net assets according to the shareholding proportions | 67,383,728.80 | 123,964,843.58 | 153,981,079.19 |
| Adjusting events | - | - | - |
| —Goodwill | 226,689.29 | 20,390,060.33 | 19,269,770.94 |
| —Unrealized profits of insider trading | - | - | - |
| --Others | - | - | - |
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTDNotes to financial statementsJanuary 1, 2023 to December 31, 2023
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
| Items | Closing balance/Current year | ||
| Dalian Fuji Bingshan Vending Machine Co., Ltd | Jiangsu Jingxue Insulation Technology Co., Ltd | Dalian Bingshan Metal Technology Co., Ltd. | |
| Book value of equity investment of affiliated companies | 67,610,418.09 | 144,354,903.91 | 173,250,850.13 |
| Fair value of equity investment with public offer | - | - | - |
| Operating income | 209,845,287.10 | 1,152,098,034.96 | 464,881,380.24 |
| Financial expense | 11,084,822.85 | 1,934,530.46 | -2,682,355.04 |
| Income tax expense | -353,797.35 | 4,996,495.33 | 10,449,723.61 |
| Net profit | -85,684,074.85 | 38,019,504.83 | 63,729,802.01 |
| Net profit of discontinuing operation | - | - | - |
| Other comprehensive income | - | - | - |
| Total comprehensive income | -85,684,074.85 | 38,019,504.83 | 63,729,802.01 |
| The current dividends received from joint ventures | - | 1,610,172.00 | 33,134,422.30 |
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTDNotes to financial statementsJanuary 1, 2023 to December 31, 2023(The currency is in RMB Yuan except otherwise indicated)(English translation for reference only)
(Continued)
| Items | Opening balance/Last year | ||
| Dalian Fuji Bingshan Vending Machine Co., Ltd | Jiangsu Jingxue Insulation Technology Co., Ltd | Dalian Bingshan Metal Technology Co., Ltd. | |
| Current assets | 447,012,221.67 | 1,357,769,579.89 | 331,577,731.99 |
| Including: Cash and cash equivalents | 8,768,885.75 | 210,766,589.69 | 171,454,780.42 |
| Non-current assets | 220,481,862.47 | 302,638,265.60 | 36,680,264.69 |
| Total assets | 667,494,084.14 | 1,660,407,845.49 | 368,257,996.68 |
| Current liabilities | 391,692,836.48 | 827,081,128.54 | 49,800,779.28 |
| Non-current liabilities | 49,526,450.43 | 29,830,925.61 | - |
| Total liabilities | 441,219,286.91 | 856,912,054.15 | 49,800,779.28 |
| Total net asset | 226,274,797.23 | 803,046,200.14 | 318,457,217.40 |
| Minority interests | - | 449,591.20 | - |
| Equity to the parent company | 226,274,797.23 | 803,046,200.14 | 318,457,217.40 |
| Share of net assets according to the shareholding proportions | 110,874,650.64 | 119,734,188.43 | 156,044,036.52 |
| Adjusting events | - | - | - |
| —Goodwill | 226,689.29 | 20,390,060.33 | 19,269,770.94 |
| —Unrealized profits of insider trading | - | - | - |
| --Others | - | - | |
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTDNotes to financial statementsJanuary 1, 2023 to December 31, 2023(The currency is in RMB Yuan except otherwise indicated)(English translation for reference only)
| Items | Opening balance/Last year | ||
| Dalian Fuji Bingshan Vending Machine Co., Ltd | Jiangsu Jingxue Insulation Technology Co., Ltd | Dalian Bingshan Metal Technology Co., Ltd. | |
| Book value of equity investment of affiliated companies | 111,101,339.93 | 140,124,248.76 | 175,313,807.46 |
| Fair value of equity investment with public offer | - | - | - |
| Operating income | 175,460,421.16 | 902,517,681.24 | 433,120,778.54 |
| Financial expense | 10,357,794.72 | 854,477.47 | -7,161,210.92 |
| Income tax expense | -10,755.71 | 2,621,080.54 | 9,728,042.54 |
| Net profit | 2,430,819.76 | 39,722,362.41 | 62,395,419.10 |
| Net profit of discontinuing operation | - | - | - |
| Other comprehensive income | - | - | - |
| Total comprehensive income | 2,430,819.76 | 39,722,362.41 | 62,395,419.10 |
| The current dividends received from joint ventures | - | 4,732,344.00 | 23,402,022.05 |
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTDNotes to financial statementsJanuary 1, 2023 to December 31, 2023(The currency is in RMB Yuan except otherwise indicated)(English translation for reference only)
（3） Summary financial information of insignificant affiliated companies
| Items | Current year | Last year |
| Affiliated company | — | — |
| Total book value of investment of affiliated companies | 136,058,775.37 | 123,418,337.24 |
| The total of following items according to the shareholding proportions | — | — |
| Net profit | 3,826,157.59 | 28,021,453.13 |
| Other comprehensive income | - | - |
| Total comprehensive income | 3,826,157.59 | 28,021,453.13 |
（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.IX. Government Grant
1. Liability item involved in government grant
| Items | Opening Balance | Increase | Into non- operating income | Into other income | The value offset cost and expense | Closing Balance | Related to asset/ income |
| Deferred income | 82,332,725.05 | 4,438,585.80 | - | 3,850,546.24 | - | 82,920,764.61 | asset |
| Deferred income | 17,421,621.34 | 487,400.00 | - | 2,555,518.15 | - | 15,353,503.19 | asset/income |
| Deferred income | - | 5,596,143.93 | - | 5,596,143.93 | - | - | income |
| Total | 99,754,346.39 | 10,522,129.73 | - | 12,002,208.32 | - | 98,274,267.80 | — |
2. Recognized in income statement
| Items | Current year | Last year |
| Other income | 12,002,208.32 | 6,473,525.00 |
| Administration expense | - | -5,306,977.43 |
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTDNotes to financial statementsJanuary 1, 2023 to December 31, 2023
(The currency is in RMB Yuan except otherwise indicated)(English translation for reference only)
X. Risk Related to Financial InstrumentsThe main financial instruments held by the group are borrowings, accounts receivable, accountspayable, other non-current financial asset etc. The detailed explanation is referred to the noteNo.VI. The related risks of these financial instruments and the risk management policyconducted to reduce these risks by the group are introduced as below. The group managementconducts to manage and monitor these risks exposure and control these risks under certain risklevel.
1. Objectives and policies of each risk management
The objectives of risk management conducted by the Company are to reach the balance betweenrisk and profit return by reducing the negative influence to operating performance to theminimum level as well as maximizing the shareholders’ and other investors’ profits. Based onthese objectives, the basic risk management policy is to recognize and analyze all sorts of riskthat the Company faced with, to set up the proper risk tolerance bottom line conducting riskmanagement, as well as to monitor these risks in a timely and effective manner, and to ensurethese risks under the limit level.
(1) Market risk
1) Exchange rate risk
Most of the Company’s business is located in China, and settled with RMB. But the Companydefined exchange rate risk of assets, liabilities dominated in foreign currency and futuretransaction dominated in foreign currency (mainly including USD, JPY, EURO, HKD and GBP).The financial department of the Company monitors the Company’s foreign currency transactionand the scale of foreign assets and liabilities, and decreases exchange rate risk. During thecurrent year the Company did not agree any forward foreign exchange contract or currencyswap contract .As at 31st December 2023, the Company’s assets and liabilities dominated inforeign currency are listed in RMB as following：
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTDNotes to financial statementsJanuary 1, 2023 to December 31, 2023
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
| Items | December 31, 2023 | December 31, 2022 |
| Monetary fund-USD | 5,900,837.69 | 5,254,881.87 |
| Monetary fund-JPY | 5,352,282.10 | 1,367,327.65 |
| Monetary fund- EURO | 346,986.51 | 1,354,512.09 |
| Monetary fund- HKD | 84,495.39 | - |
| Receivable -USD | 50,158,313.38 | 40,859,881.78 |
| Receivable -JPY | 3,847,098.27 | 2,715,738.67 |
| Receivable - EURO | 5,426,571.06 | 7,467,708.34 |
| Payables -USD | 7,966,726.35 | 5,849,006.89 |
| Payables -JPY | 1,794,696.33 | 1,873,402.54 |
| Payables - GBP | - | 312,884.03 |
The group paid close attention to the effect on FX risk.
2) Interest rate risk
The interest risk of the group incurred from bank loan, risk of a floating interest rate of financialliabilities that lead to the group facing cash flow interest rate risk, financial liabilities with a fixedinterest rate lead to the group facing cash flow interest rate risk. The company determined the proportionof fixed interest rate and floating interest rate according the current market circumstance. The group’sinterest-bearing debt is borrowings of RMB 799,000,000.00 at fixed interest rate as of December31,2023(borrowings of RMB 740,000,000.00 in2022).The financial department of the group continuously monitors the interest rates level, and themanagement would make some adjustment to lower the interest rate risk according to the latest marketsituation. Climbing interest rate will increase the cost of newly increased interest-bearing liability andinterest expense for unsettled interest-bearing liability at floating rate and have adverse effect on thebusiness performance.The sensitive analysis：
As at 31st December 2023, based on the assumption of interest rate change of 50 BP, the group’s netprofit of current year will increase or decrease3.9955 million Yuan.
3) Price risk
The price risk of the Company is mainly commodity price risk. The Company sells products at marketprices. As the national economy enters the "new normal", the manufacturing industry is under greateconomic downward pressure, and the drastic fluctuations of bulk material prices have a certain impact
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTDNotes to financial statementsJanuary 1, 2023 to December 31, 2023(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
on the group 's operations.
(2) Credit risk
The credit risk of the group comes from monetary fund, notes receivable, accounts receivable, and otheraccounts receivable etc. The management made credit policies and monitored changes of this creditexposure.The group 's monetary fund was in bank with higher credit rating, so there was no significant credit risk,nor significant losses due to the default of other entity. Upper limit policy is adopted to avoid any creditrisk from financial institution.The group made relevant policy to control credit risk exposure from receivable, other receivable andnotes receivable. The group assesses the client’s credit background according to the client’s financialperformance, possibility of obtaining guarantee from the 3rd party, credit record and other factors suchas current market. The group will periodically monitor the credit situation of the client and will takemeasures such as prompt letter, shorten credit period or cancel the credit to ensure the overall credit riskwithin the controllable scope.As at 31st December 2023, the top five customers of receivable accounts balance are240,544,632.79Yuan.
(3) Liquidity risk
Liquidity risk was referred to the risk of shortage of funds incurred when the enterprise fulfills theobligation of settlement by cash or other financial assets. The way to manage the liquidity risk is toensure enough fund available to fulfill the liability by due date in prevention from unacceptable loss ofor reputation damage to the group. The group periodically analyze the liability structure and expiry dateand the financial department of the group continued to monitors the short term or long-term capitalneeds to ensure maintain plenty of cash flow. And the same time they also monitor the condition of bankloan agreements and obtain commitments from banks to reduce liquidity risks.The fund mainly comes from bank loan. By December 31
st, 2023, the credit limit still available is 618.30million Yuan and short-term credit limit available is 618.30 million Yuan.As at 31
stDecember 2023, the group’s financial assets and financial liabilities in line withnon-discounted cash flow of the contracts as following：
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTDNotes to financial statementsJanuary 1, 2023 to December 31, 2023
(The currency is in RMB Yuan except otherwise indicated)(English translation for reference only)
Currency unity:10kYuan
| Items | Within 1 year | 1-2 years | 2-5 years | Over 5 years | Total |
| Financial Assets | — | — | — | — | — |
| Cash and cash in bank | 95,103.96 | - | - | - | 95,103.96 |
| Notes receivable | 35,342.89 | - | - | - | 35,342.89 |
| Accounts receivable | 157,643.39 | - | - | - | 157,643.39 |
| Financing receivable | 30,358.52 | - | - | - | 30,358.52 |
| Other Receivable | 4,138.17 | - | - | - | 4,138.17 |
| Contract asset | 23,707.69 | - | - | - | 23,707.69 |
| Other current asset | 2,607.43 | - | - | - | 2,607.43 |
| Other non-current financial asset | - | - | - | 16,402.48 | 16,402.48 |
| Financial Liabilities | — | — | — | — | — |
| Short-term loan | 26,228.78 | - | - | - | 26,228.78 |
| Notes Payable | 67,072.10 | - | - | - | 67,072.10 |
| Accounts payable | 165,583.54 | - | - | - | 165,583.54 |
| Other payable | 27,880.42 | - | - | - | 27,880.42 |
| Employee’s payable | 14,949.71 | - | - | - | 14,949.71 |
| Tax payable | 2,221.65 | - | - | - | 2,221.65 |
| Non-current liability due within 1 year | 15,064.53 | - | - | - | 15,064.53 |
| Long-term loan | - | 34,600.00 | 32,570.00 | 800.00 | 67,970.00 |
| Lease obligation | - | 561.13 | 881.77 | 970.60 | 2,413.50 |
| Long-term payable | - | 208.75 | 824.44 | - | 1,033.19 |
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTDNotes to financial statementsJanuary 1, 2023 to December 31, 2023
(The currency is in RMB Yuan except otherwise indicated)(English translation for reference only)
2. Financial asset transfer
(1) Classified by transfer method
| Transfer method | Nature | Amount | Derecognition | Basis for derecognition |
| Endorsement of a bill | Bank acceptance bill with high credit rating | 374,572,818.64 | Y | All risk and reward have been transferred |
| Discounting a bill | Bank acceptance bill with high credit rating | 151,620,157.02 | Y | All risk and reward have been transferred |
| Endorsement/discounting of a bill | Bank/trade acceptance bill with non-high credit rating | 151,582,675.36 | N | Retain mostly risk and reward including default risk |
| Factoring | Receivable | 10,000,000.00 | Y | All risk and reward have been transferred |
| Total | — | 687,775,651.02 | — | — |
(2) Derecognized financial asset due to transfer
| Item | Transfer method | Derecognized Amount | Gain/loss from derecognition |
| Bank acceptance bill with high credit rating | Endorsement of a bill | 374,572,818.64 | - |
| Bank acceptance bill with high credit rating | Discounting a bill | 151,620,157.02 | -1,944,537.05 |
| Receivable | Factoring without recourse | 10,000,000.00 | - |
| Total | — | 536,192,975.66 | -1,944,537.05 |
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTDNotes to financial statementsJanuary 1, 2023 to December 31, 2023(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
XI. Disclosure of Fair Value
1. Amount and measurement level of the assets and liabilities measured at fair value at the yearend
| Items | Fair value at the year 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 | - | 303,585,218.53 | - | 303,585,218.53 |
| Other non-current financial asset | 162,340,919.04 | - | 1,683,852.59 | 164,024,771.63 |
| Total | 162,340,919.04 | 303,585,218.53 | 1,683,852.59 | 467,609,990.16 |
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 unadjustedclosing quoted price of Guotai Junan shares on stock market on December 29, 2023.
3. For continuous and discontinuous 2nd level of FV, valuation technique adopted andkey parameter 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 andkey parameter quantitive and qualitive information.As of December 31, 2023, 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 ispresented as other non-current financial asset in accordance with No.22- financial instrumentrecognition and measurement of Accounting Standards for Business Enterprises. Having
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTDNotes to financial statementsJanuary 1, 2023 to December 31, 2023(The currency is in RMB Yuan except otherwise indicated)(English translation for reference only)
considered there is neither active market for invested company’s share nor market price isavailable for reference, and it is not feasible to obtain the relevant observable input value. FVof the investment 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 balanceand sensitivity analysis of unobservable parameter.No.
6. Assets continuously measured at fair value have switched among different level duringthe 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 Transactionsi. 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 businessoperation period is from 3rd July 1985 to 2nd July 2035. The business scope includes research,
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTDNotes to financial statementsJanuary 1, 2023 to December 31, 2023
(The currency is in RMB Yuan except otherwise indicated)(English translation for reference only)
development, manufacture, sales, service and installment of refrigeration equipment, coolingand freezing equipment, different size of air-conditioners, petrochemical equipment, electronicand electronic- control products, home electronic appliance, environment protect equipment andetc. (unless the licenses 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 withrelated parties 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 |
| 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 |
4. Other related parties
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTDNotes to financial statementsJanuary 1, 2023 to December 31, 2023(The currency is in RMB Yuan except otherwise indicated)(English translation for reference only)
| 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 Shentong Electric Co., Ltd. | Both parties are under the control of or significant influence by the same party from January to April, 2023 |
| 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 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. | Both parties are under the control of or significant influence by the same party from April to December, 2023 |
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
ndBranch 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.(Jan-May, 2023), Sonyo Cold Chain (Dalian) Co., Ltd.( (Jan-Mar, 2023).Panasonic Appliances Air-Conditioning Malaysia SDN BHD, Panasonic Taiwan CO.,LTD.,Panasonic Sales Taiwan CO.,LTD, Panasonic Procurement Malaysia SDN BHD, Panasonic
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTDNotes to financial statementsJanuary 1, 2023 to December 31, 2023(The currency is in RMB Yuan except otherwise indicated)(English translation for reference only)
Hong Kong Co.,Ltd, Panasonic Operational Excellence Co.,Ltd.(Pex), Panasonic Life SolutionsIndia, Panasonic Industry Sales Asia, Panasonic Industry Europe GmbH, Panasonic IndustrialDevices Sales, Panasonic India Pvt Ltd(APIN), Panasonic Global Procurement, PanasonicDoBrasil Limited–Miam, Panasonic Corporation Appliances Company Heating&CoolingSolutions Bd Commercial Air-Conditioning, Panasonic Corporation Appliances Company,Panasonic Corporation, Panasonic Commercial Equipment Systems Taiwan Co.Ltd, PanasonicCommercial Equipment Systems Asia, Panasonic Automotive&Industrial, Panasonic AppliancesAir-Conditioning Malaysia Sdn.BHD, Panasonic Appliances Air-Conditioning, Pacific.Panasonic Commercial Equipment Systems Asia Pacific, Panasonic Heating&Ventilation,Panasonic Appliances 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 | Current year | Last year |
| Dalian Bingshan Metal Technology Co., Ltd. | Purchases of goods | 63,809,032.17 | 10,017,493.41 |
| Sonyo Cold Chain (Dalian)Co. Ltd | Purchases of goods | 40,499,927.26 | 135,529.36 |
| Jiangsu Jingxue Insulation Technology Co., Ltd. | Purchases of goods | 28,067,092.90 | 5,390,801.78 |
| BAC Dalian Co., Ltd. | Purchases of goods | 18,579,088.19 | 32,827,251.97 |
| Company under direct/indirect Control of Panasonic Co., Ltd | Purchases of goods | 13,763,555.55 | 24,447,037.82 |
| Dalian Bingshan Part Technology Co., LTD. | Purchases of goods | 10,775,437.38 | 10,938,171.74 |
| Dalian Honjo Chemical Co., Ltd | Purchases of goods | 10,305,185.60 | 140,522.12 |
| Bingshan Technology Service （Dalian） Co., Ltd. | Purchases of goods | 5,575,811.09 | 2,047,836.64 |
| Dalian Fuji Bingshan Control System Co., Ltd. | Purchases of goods | 5,029,475.45 | 1,718,811.27 |
| Alphavita Bio-scientific (Dalian) Co., Ltd. | Purchases of goods | 4,466,987.61 | - |
| Bingshan Technology Service （Dalian） Co., Ltd. | Receive labor services | 2,011,933.16 | 303,037.68 |
| Dalian Shentong Electric Co., Ltd. | Purchases of goods | 1,680,077.95 | 9,480,036.79 |
| Company under direct/indirect Control of Panasonic Co., Ltd | Receive labor services | 1,621,316.09 | - |
| Dalian Fuji Bingshan Vending Machine Co., Ltd | Purchases of goods | 505,497.50 | 753,944.37 |
| Dalian Spindle Environmental Facilities Co., Ltd | Purchases of goods | 780,949.56 | 1,407,486.73 |
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTDNotes to financial statementsJanuary 1, 2023 to December 31, 2023(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
| Related party | Content | Current year | Last year |
| Dalian Bingshan Wisdom Park Co., Ltd | Purchases of goods | 80,441.60 | 100,943.39 |
| Dalian Bingshan Wisdom Park Co., Ltd | Receive labor services | 47,169.81 | - |
| Dalian Fuji Bingshan Vending Machine Sales Co., Ltd | Purchases of goods | 35,398.23 | 78,761.06 |
| Dalian Bingshan Group Co., Ltd. | Receive labor services | 24,452.83 | 18,792.45 |
| Shanghai Jingxue Freezing Equipment Co., Ltd | Purchases of goods | - | 19,584.07 |
| Sonyo Refrigeration System (Dalian) Co., Ltd. | Purchases of goods | - | 4,947,268.89 |
| Sonyo Compressor (Dalian) Co., Ltd. | Purchases of goods | - | 429,782.52 |
| Total | — | 207,658,829.93 | 105,203,094.06 |
(2) Sales of goods/ labour services provision
| Related party | Content | Current year | Last year |
| Company under direct/indirect Control of Panasonic Co., Ltd | Sales of goods | 285,292,151.76 | 147,935,120.42 |
| Sonyo Cold Chain (Dalian) Co., Ltd | Sales of goods | 138,639,729.84 | 122,871,855.60 |
| BAC Dalian Co., Ltd | Sales of goods | 69,977,098.57 | 65,002,512.47 |
| Bingshan Technology Service （Dalian） Co., Ltd. | Sales of goods | 32,203,558.67 | 40,641,988.78 |
| Dalian Fuji Bingshan Vending Machine Co., Ltd | Sales of goods | 16,843,047.06 | 18,327,608.54 |
| Dalian Bingshan Wisdom Park Co., Ltd | Sales of goods | 13,402,551.72 | 323,553.82 |
| MHI Bingshan Refrigeration (Dalian) Co., Ltd. | Sales of goods | 7,181,290.12 | 5,537,667.76 |
| Alphavita Bio-scientific (Dalian) Co., Ltd. | Sales of goods | 4,522,436.41 | 9,532,891.46 |
| Dalian Spindle Environmental Facilities Co., Ltd | Sales of goods | 3,665,307.02 | 3,240,535.34 |
| Dalian Honjo Chemical Co., Ltd | Sales of goods | 1,863,564.01 | 91,981.13 |
| Dalian Bingshan Part Technology Co., LTD | Sales of goods | 1,742,813.23 | 1,395,237.01 |
| Linde Hydrogen Fueltech (Dalian) Co., Ltd | Sales of goods | 794,939.42 | 1,309,485.55 |
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTDNotes to financial statementsJanuary 1, 2023 to December 31, 2023
(The currency is in RMB Yuan except otherwise indicated)(English translation for reference only)
| Related party | Content | Current year | Last year |
| Dalian Fuji Bingshan Control System Co., Ltd. | Sales of services | 414,608.77 | - |
| Dalian Fuji Bingshan Control System Co., Ltd. | Sales of goods | 153,752.97 | 654,160.22 |
| Dalian Bingshan Wisdom Park Co., Ltd | Sales of services | 141,509.43 | - |
| Dalian Shentong Electric Co., Ltd | Sales of goods | 120,092.03 | 522,107.10 |
| Dalian Jingxue Freezing Equipment Co., Ltd | Sales of goods | 96,698.39 | 102,957.82 |
| Dalian Bingshan Group Co., Ltd. | Sales of service | 43,018.86 | - |
| Dalian Bingshan Group Co., Ltd. | Sales of goods | 26,445.02 | - |
| Sonyo Compressor (Dalian)Co., Ltd. | Sales of goods | - | 41,055,441.71 |
| Sonyo Refrigeration System (Dalian) Co., Ltd. | Sales of goods | - | 23,645,169.22 |
| Dalian Bingshan Group Huahuida Financial Leasing Co., Ltd | Sales of goods | - | 18,888,460.18 |
| Jiangsu Jingxue Insulation Technology Co., Ltd | Sales of goods | - | 2,524,416.77 |
| Total | — | 577,124,613.30 | 503,603,150.90 |
(3) Assets Lease
1) Assets rent out
| Lessee | Category of assets rent out | Current year Lease Income | Last year Lease Income |
| Dalian Bingshan Wisdom Park Co., Ltd | Land/property | 9,013,347.56 | 8,189,918.99 |
| MHI Bingshan Refrigeration (Dalian) Co., Ltd. | Plant | 3,809,523.80 | 3,809,523.80 |
| Linde Hydrogen Fueltech (Dalian) Co., Ltd | Plant | 2,360,040.71 | 2,759,026.37 |
| Sonyo Cold Chain (Dalian)Co. Ltd | Plant /Employee dormitory | 2,160,513.31 | 3,465,470.95 |
| Company under direct/indirect Control of Panasonic Co., Ltd | Plant/ office / dormitory | 1,483,508.26 | 336,180.42 |
| Dalian Jingxue Freezing Equipment Co., Ltd. | Plant and office | 784,927.88 | 858,322.40 |
| Wuhan Sikafu Power Control Equipment Co., Ltd | Plant | 721,045.88 | 730,954.13 |
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTDNotes to financial statementsJanuary 1, 2023 to December 31, 2023(The currency is in RMB Yuan except otherwise indicated)(English translation for reference only)
| Lessee | Category of assets rent out | Current year Lease Income | Last year Lease Income |
| Bingshan Technology Service （Dalian） Co., Ltd. | Plant and office | 355,081.77 | 443,699.06 |
| Dalian Bingshan Part Technology Co., Ltd. | Plant and office | 194,954.13 | - |
| Dalian Bingshan Group Co., Ltd. | Office | 66,055.05 | 132,110.09 |
| Dalian Spindle Environmental Facilities Co., Ltd. | Office | 20,069.72 | - |
2) Assets under lease
| Lessor | Category of assets rent in | Lease premium paid | |
| Current year | Last year | ||
| Dalian Bingshan Group Huahuida Financial Leasing Co., Ltd | Fixed asset | 25,173,657.70 | 28,659,750.85 |
(Continued)
| Lessor | Interests on lease liabilities | Increased right-of-use assets | ||
| Current year | Last year | Current year | Last year | |
| Dalian Bingshan Group Huahuida Financial Leasing Co., Ltd | 2,067,080.20 | 698,321.11 | - | -26,150,305.01 |
(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 thecontrolling shareholder of the Company, Bingshan Group. Please refer to the “Note VI. 33 longterm borrowings”.
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTDNotes to financial statementsJanuary 1, 2023 to December 31, 2023
(The currency is in RMB Yuan except otherwise indicated)(English translation for reference only)
(5) Funds borrow from /lent to related party
| Name of the related party | Amount | Starting date | Ending date | Explanation |
| Dalian Bingshan Group Co., Ltd. | 160,000,000.00 | 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 | 10,000,000.00 | 2023.01.09 | 2024.01.08 | Factoring |
| Dalian Bingshan Group Huahuida Financial Leasing Co., Ltd | 10,000,000.00 | 2021.05.20 | 2024.05.19 | Factoring |
| 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 | 5,481,000.00 | 2022.06.20 | 2024.06.19 | Factoring |
| 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 | 1,876,663.49 | 2021.06.10 | 2024.06.09 | 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 | 731,470.43 | 2023.10.17 | 2024.10.16 | Factoring |
| Dalian Bingshan Group Huahuida Financial Leasing Co., Ltd | 499,200.00 | 2023.05.22 | 2024.05.21 | Factoring |
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTDNotes to financial statementsJanuary 1, 2023 to December 31, 2023
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
| Dalian Bingshan Group Huayida Commercial Factoring Co., Ltd | 422,547.10 | 2023.12.08 | 2024.06.07 | Factoring |
| Dalian Bingshan Group Huayida Commercial Factoring Co., Ltd | 237,454.60 | 2023.12.05 | 2024.06.04 | Factoring |
| Dalian Bingshan Group Huayida Commercial Factoring Co., Ltd | 163,920.00 | 2023.12.15 | 2024.12.14 | Factoring |
(6) Asset transfer and debt restructuring among the related parties
| Item | Transaction | Current year | Last year |
| Sanyo Corporation | Purchase shareholdings of affiliated company | 87,171,300.00 | 929,148,000.00 |
| Panasonic Corporation of China Co., Ltd | Purchase shareholdings of affiliated company | 58,114,200.00 | 44,582,760.00 |
| Dalian Bingshan Group Co., Ltd | Sold shareholdings of subsidiary | - | 14,756,300.00 |
| Dalian Zhonghuida Refrigeration Technology Co., Ltd | Sold shareholdings of subsidiary | - | 6,472,000.00 |
| Panasonic Corporation of China Co., Ltd | Sold shareholdings of affiliated company | - | 70,990,000.00 |
| Sonyo Cold Chain (Dalian) Co., Ltd | Purchase shareholdings of affiliated company | - | 37,152,300.00 |
| Total | — | 145,285,500.00 | 1,103,101,360.00 |
The 13
rd meeting of the 9
th
directors’ meeting approved the acquisition of 40% of theshareholdings of Sonyo Refrigeration (Dalian) Co. Ltd which is held by Panasonic Corporationof China Co., Ltd, and 60% shareholdings of Sonyo Refrigeration (Dalian) Co. Ltd which isheld by Sanyo Electric (China) Co., Ltd. The share transfer price is based on the assessed valueof net assets of Sonyo Refrigeration (Dalian)Co. Ltd on March 31, 2023, and the transfer priceis 145.2855 million Yuan, of which 87.1713 million Yuan to Panasonic Corporation of ChinaCo., Ltd and 58.1142 million Yuan to Sanyo Electric (China) Co., Ltd. After the transaction,Sonyo Refrigeration (Dalian) Co. Ltd becomes the subsidiary of the Company.
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTDNotes to financial statementsJanuary 1, 2023 to December 31, 2023(The currency is in RMB Yuan except otherwise indicated)(English translation for reference only)
(7) Management Remuneration
| Item | Current year | Last year |
| Total remuneration | 5,033,700.00 | 4,895,800.00 |
(8) 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 | 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 |
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTDNotes to financial statementsJanuary 1, 2023 to December 31, 2023
(The currency is in RMB Yuan except otherwise indicated)(English translation for reference only)
| Item | Related party | Closing 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 |
(Continued)
| Item | Related party | Opening Balance | |
| Book Balance | Bad debt Provision | ||
| Accounts receivable | Company under direct/indirect Control of Panasonic Co., Ltd | 145,605,125.57 | 11,219,927.46 |
| Accounts receivable | BAC Dalian Co., Ltd | 17,739,655.64 | 1,245,323.82 |
| Accounts receivable | Dalian Fuji Bingshan Vending Machine Co., Ltd | 7,292,421.55 | 548,862.49 |
| Accounts receivable | Bingshan Technology Service （Dalian） Co., Ltd. | 5,804,599.87 | 426,864.25 |
| Accounts receivable | MHI Bingshan Refrigeration (Dalian) Co., Ltd. | 3,981,739.22 | 279,518.10 |
| Accounts receivable | Dalian Bingshan Part Technology Co., LTD | 2,426,739.72 | 250,341.12 |
| Accounts receivable | Dalian Bingshan Group Huahuida Financial Leasing Co., Ltd | 2,411,867.26 | 169,313.08 |
| Accounts receivable | Alphavita Bio-scientific (Dalian) Co., Ltd. | 1,224,109.36 | 85,932.48 |
| Accounts receivable | Dalian Bingshan Wisdom Park Co., Ltd | 1,139,243.27 | 255,895.91 |
| Accounts receivable | Linde Hydrogen Fueltech (Dalian) Co., Ltd | 841,284.21 | 59,058.15 |
| Accounts receivable | Dalian Spindle Environmental Facilities Co., Ltd | 750,121.11 | 52,658.50 |
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTDNotes to financial statementsJanuary 1, 2023 to December 31, 2023(The currency is in RMB Yuan except otherwise indicated)(English translation for reference only)
| Item | Related party | Opening Balance | |
| Book Balance | Bad debt Provision | ||
| Accounts receivable | Dalian Fuji Bingshan Control System Co., Ltd. | 550,800.00 | 49,630.32 |
| Accounts receivable | Dalian Shentong Electric Co., Ltd | 94,897.33 | 6,661.79 |
| Contract asset | Company under direct/indirect Control of Panasonic Co., Ltd | 1,982,037.10 | 612,603.41 |
| Contract asset | Dalian Bingshan Wisdom Park Co., Ltd | 109,569.10 | 19,340.79 |
| Prepayment | Dalian Shentong Electric Co., Ltd | 8,402,006.53 | - |
| Prepayment | Company under direct/indirect Control of Panasonic Co., Ltd | 3,825,488.41 | |
| Prepayment | Bingshan Technology Service （Dalian） Co., Ltd. | 825,789.25 | - |
| Prepayment | Dalian Bingshan Group Huahuida Financial Leasing Co., Ltd | 308,310.02 | - |
| Prepayment | BAC Dalian Co., Ltd | 58,513.00 | - |
| Prepayment | Dalian Spindle Environmental Facilities Co., Ltd | 36,455.00 | - |
| Other receivable | Dalian Fuji Bingshan Vending Machine Co., Ltd | 278,020.00 | 10,175.53 |
| Other receivable | Bingshan Technology Service （Dalian） Co., Ltd. | 100,000.00 | 69,410.00 |
2. Accounts Payable due from Related Party
| Item | Related party | Closing Balance | Opening Balance |
| Accounts Payable | Jiangsu Jingxue Insulation Technology Co., Ltd | 65,052,640.75 | 68,660,038.43 |
| Accounts Payable | BAC Dalian Co., Ltd | 21,731,458.82 | 20,678,948.10 |
| Accounts Payable | Sonyo Cold Chain (Dalian)Co., Ltd | 10,067,451.24 | - |
| Accounts Payable | Dalian Bingshan Metal Technology Co., Ltd | 9,745,165.83 | 14,347,841.71 |
| Accounts Payable | Dalian Honjo Chemical Co., Ltd. | 6,672,533.86 | - |
| Accounts Payable | Dalian Bingshan Part Technology Co., LTD | 6,266,070.43 | 7,264,112.80 |
| Accounts Payable | Jiangsu Jingxue Insulation Environmental Engineering Co., Ltd | 2,896,300.00 | 2,896,300.00 |
| Accounts Payable | Company under direct/indirect Control of Panasonic Co., Ltd | 864,418.25 | 11,517,452.19 |
| Accounts Payable | Dalian Spindle Environmental Facilities Co., Ltd | 794,006.00 | 1,247,400.00 |
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTDNotes to financial statementsJanuary 1, 2023 to December 31, 2023(The currency is in RMB Yuan except otherwise indicated)(English translation for reference only)
| Item | Related party | Closing Balance | Opening Balance |
| Accounts Payable | Dalian Fuji Bingshan Control System Co., Ltd. | 502,571.47 | 1,942,256.73 |
| Accounts Payable | Bingshan Technology Service （Dalian） Co., Ltd. | 126,241.74 | 282,405.30 |
| Accounts Payable | Dalian Shentong Electric Co., Ltd | - | 1,396,176.88 |
| Other payable | Dalian Bingshan Group Huayida Commercial Factoring Co., Ltd. | 15,000,000.00 | - |
| Other payable | Dalian Bingshan Group Huahuida Financial Leasing Co., Ltd. | 7,407,941.90 | - |
| Other payable | Company under direct/indirect Control of Panasonic Co., Ltd | 3,273,305.50 | 4,502,046.38 |
| Other payable | Bingshan Technology Service （Dalian） Co., Ltd. | 104,625.50 | - |
| Other payable | Sonyo Cold Chain (Dalian)Co., Ltd | 91,779.71 | - |
| Other payable | Jiangsu Jingxue Insulation Environmental Engineering Co., Ltd | 70,000.00 | 666,864.48 |
| Other payable | MHI Bingshan Refrigeration (Dalian) Co., Ltd. | - | 170,000.00 |
| Other payable | Dalian Jingxue Freezing Equipment Co., Ltd. | - | 70,000.00 |
| Other payable | Dalian Bingshan Group Huahuida Financial Leasing Co., Ltd. | - | 1,172.61 |
| Contract liability | Bingshan Technology Service （Dalian） Co., Ltd. | 2,337,426.58 | - |
| Contract liability | Linde Hydrogen Fueltech (Dalian) Co., Ltd | 2,138,974.27 | 2,274,454.09 |
| Contract liability | Company under direct/indirect Control of Panasonic Co., Ltd | 313,952.83 | 1,299,686.95 |
| Contract liability | Sonyo Cold Chain (Dalian)Co. Ltd | 35,605.27 | - |
| Contract liability | Dalian Bingshan Group Huahuida Financial Leasing Co., Ltd | - | 4,206,191.86 |
| Contract liability | Dalian Spindle Environmental Facilities Co., Ltd | - | 736,424.50 |
| Other current liability | Linde Hydrogen Fueltech (Dalian) Co., Ltd | 319,616.84 | - |
| Other current liability | Bingshan Technology Service （Dalian） Co., Ltd. | 303,865.45 | - |
| Other current liability | Company under direct/indirect Control of Panasonic Co., Ltd | 35,021.95 | 130,044.39 |
| Other current liability | Sonyo Cold Chain (Dalian)Co., Ltd | 4,628.68 | - |
| Other current liability | Dalian Bingshan Group Huahuida Financial Leasing Co., Ltd | - | 546,804.94 |
| Other current liability | Dalian Spindle Environmental Facilities Co., Ltd | - | 81,006.69 |
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTDNotes to financial statementsJanuary 1, 2023 to December 31, 2023(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
| Item | Related party | Closing Balance | Opening Balance |
| Lease payable | Dalian Bingshan Group Huahuida Financial Leasing Co., Ltd | 656,980.83 | 983,501.51 |
| Non-current liability due within 1 year | Dalian Bingshan Group Huahuida Financial Leasing Co., Ltd | 25,140,961.04 | 34,388,781.83 |
| Long-term payable | Dalian Bingshan Group Huahuida Financial Leasing Co., Ltd | 10,331,937.30 | 31,009,644.16 |
| Short-term borrowing | Dalian Bingshan Group Huayida Commercial Factoring Co., Ltd. | 2,976,345.47 | - |
iv. Related Party CommitmentNonev. OthersNoneXIII. Share-Based PaymentNoneXIV. Contingency & commitment
1. Commitment
None
2. Contingency
Up to December 31, 2023, guarantee obligations undertaken by the Company due tofinancial leasing.The Company sold refrigerating house equipment to Guizhou Pubu Cold Chain FoodInvestment 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 ofthe lessee 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 the
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTDNotes to financial statementsJanuary 1, 2023 to December 31, 2023
(The currency is in RMB Yuan except otherwise indicated)(English translation for reference only)
financial lease is RMB 6.5958million Yuan.The Company sold water chiller and heat pump to Shangdong Jiechuang EnergyTechnology Co., Ltd (“Shandong Jiechuang”) in the form of financial lease. The Companyas a seller singed finance lease contract with Huahuida as both a buyer and a lessor andShandong Jiechuang as a lessee. The contract price is 6.998million Yuan. ShandongJiechuang had made 10% down payment, and remaining 6.2982million Yuan is underlinedthe leasing contract amount. In case the lease premium is delayed by the lessee, theCompany needs to pay lease premium on behalf of the lessee and be obliged to the buyback responsibility. Shandong Jiechuang issued an unconditional, irrevocable andjoint liability counter guarantee, and the Company is the beneficiary. Guarantee scopecovers the full liability because of the sales in the form of financial lease. As at 31December 2023, the balance of the guarantee obligation of the financial lease isRMB4.4262 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 alessor and Shanxi Yiming as a lessee. The contract price is 28.2311million Yuan. In casethe lease premium is delayed by the lessee, the Company needs to pay lease premium onbehalf of the lessee and be obliged to the buy back responsibility. Shareholders ShanxiYiming and nature person 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 RMB 23.1802million Yuan.
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTDNotes to financial statementsJanuary 1, 2023 to December 31, 2023(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
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 31 December, 2023, the balance of all guarantee obligation of the financial lease isRMB 58.3395 million Yuan. There is no situation where the Company needs to undertakethe liability as the lessees’ default.There are no other significant or contingent matters to be disclosed until December, 2023XV. Events after the Balance Sheet Date
1. Unadjusted significant events
None
2. Information about profit distribution
| Item | Content |
| Planned profit/ dividend distribution | 25,296,375.21 |
| Profit/dividend approved for distribution declaration | The 12nd meeting of the 9th generation of board approved the profit appropriation policy for the year of 2023, based on 843,212,507.00 numbers of share in total, paying out cash dividend of 0.3Yuan for every 10 shares (before tax) and cash dividend of B shares are paid in Hong Kong dollars. |
3. Sales Return
There is no significant sales return after the balance sheet date.
4. Others
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTDNotes to financial statementsJanuary 1, 2023 to December 31, 2023
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
Except the subsequent event disclosed above, the Company has no other significantsubsequent event.XVI. Other Significant Events
1. Error correction and effect in previous period
No.
2. Debt Restructuring
In 2023, Bingshan Group Engineering Co., Ltd, Tianjin Sunac Shengyuan Real Estate Co.,LTD. (hereinafter referred to as "Tianjin Sunac") and Guangzhou Wanda Cultural TourismCity Investment Co., LTD. (hereinafter referred to as "Guangzhou Wanda Cultural Tourism")signed a commercial contract, and Guangzhou Wanda Cultural Tourism will repay the debt toBingshan Group Engineering Co., Ltd with the right-of -use of 17 apartments and parkingspace that it subscribed for Tianjin SunAC. The price of the house and parking space is
21.707 million Yuan, the debt written off amount is 15.22 million yuan, and Bingshan GroupEngineering Co., Ltd pays the difference of 6.5476 million Yuan in cash. Bingshan GroupEngineering Co., Ltd paid a total of 6.54 million Yuan in two separate payments in 2023, andthe above properties have completed the record registration of the contract in the TianjinMunicipal Commission of Housing and Construction in 2023.
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 geographicarea: Northeast China and Central China. The Northeast is the Company’s general headquartersand the subsidiaries registered in Dalian. The Central includes Chengdu Bingshan Refrigeration
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTDNotes to financial statementsJanuary 1, 2023 to December 31, 2023
(The currency is in RMB Yuan except otherwise indicated)(English translation for reference only)
Engineering 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 arethe determination 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 ：Ten thousand Yuan
| Items | Northeast China | Central China | Offset | Total |
| 1 Operating income | 530,652.74 | 32,697.34 | -81,755.93 | 481,594.15 |
| 2 Cost | 452,202.87 | 28,961.85 | -80,604.97 | 400,559.75 |
| Impairment loss on assets | -1,598.13 | -19.38 | 176.94 | -1,440.57 |
| Impairment loss on credit | -5,471.28 | -825.92 | -676.01 | -6,973.21 |
| Depreciation and amortization | 14,208.67 | 833.36 | - | 15,042.03 |
| 3 Investment income from associates and joint venture | -430.08 | 45.75 | -104.14 | -488.47 |
| 4 Operating profits(loss) | 23,385.81 | -1,695.78 | -15,169.41 | 6,520.62 |
| 5 Income tax | 1,117.34 | 89.36 | -103.53 | 1,103.17 |
| 6 Net profit(loss) | 22,268.47 | -1,785.14 | -15,065.88 | 5,417.45 |
| 7 Total assets | 1,068,080.89 | 47,663.74 | -299,459.80 | 816,284.83 |
| 8 Total liabilities | 548,471.77 | 36,864.46 | -79,455.64 | 505,880.59 |
(3) Others
None
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTDNotes to financial statementsJanuary 1, 2023 to December 31, 2023(The currency is in RMB Yuan except otherwise indicated)(English translation for reference only)
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 inthis period.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 | 457,075,717.70 | 536,467,765.87 |
| 1-2 years | 124,339,052.45 | 71,727,073.34 |
| 2-3 years | 58,073,083.27 | 56,755,645.42 |
| Over 3 years | 109,679,441.52 | 72,661,252.26 |
| 3-4 years | 49,782,646.14 | 3,330,453.62 |
| 4-5 years | 2,186,288.76 | 21,498,453.03 |
| Over 5 years | 57,710,506.62 | 47,832,345.61 |
| Total | 749,167,294.94 | 737,611,736.89 |
(2) Accounts receivable category
| Item | Closing Balance | ||||
| Booking balance | Provision | Booking value | |||
| 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 |
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTDNotes to financial statementsJanuary 1, 2023 to December 31, 2023(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
(Continued)
| Item | Opening Balance | ||||
| Booking balance | Provision | Booking balance | |||
| Amount | % | Amount | % | ||
| Bad debt provision on group | 737,611,736.89 | 100.00 | 107,657,087.39 | 14.60 | 629,954,649.50 |
| (1) Accounting age as characters | 388,615,076.25 | 52.69 | 107,657,087.39 | 27.70 | 280,957,988.86 |
| (2) Related party within consolidation scope | 348,996,660.64 | 47.31 | - | - | 348,996,660.64 |
| Total | 737,611,736.89 | 100.00 | 107,657,087.39 | 14.60 | 629,954,649.50 |
1) Bad debt provisions on group basis
| Aging | Closing Balance | ||
| Accounts receivable | Provision for bad debts | Drawing Proportion (%) | |
| Within 1 year | 204,061,949.25 | 14,325,148.84 | 7.02 |
| 1-2 years | 120,426,154.82 | 20,159,338.32 | 16.74 |
| 2-3 years | 58,073,083.27 | 17,903,931.57 | 30.83 |
| 3-4 years | 49,782,646.14 | 24,557,779.34 | 49.33 |
| 4-5 years | 2,186,288.76 | 1,577,407.34 | 72.15 |
| Over 5 years | 57,710,506.62 | 57,710,506.62 | 100.00 |
| Total | 492,240,628.86 | 136,234,112.03 | — |
(3) Bad debt provision
| Category | Opening balance | Change during the year | Closing Balance | |||
| Accrued | Collected/ reversed | Written-off | Other | |||
| Bad debt provision | 107,657,087.39 | 27,893,374.74 | - | 758,749.50 | 1,442,399.40 | 136,234,112.03 |
| Total | 107,657,087.39 | 27,893,374.74 | - | 758,749.50 | 1,442,399.40 | 136,234,112.03 |
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTDNotes to financial statementsJanuary 1, 2023 to December 31, 2023(The currency is in RMB Yuan except otherwise indicated)(English translation for reference only)
(4) Accounts receivable written off in current period.
| Item | Written off amount |
| Receivable actually written off | 758,749.50 |
(5) Based on closing balance ranking, sum of the top five significant receivable and contractasset are 328,102,168.30 Yuan, representing 37.42% of total receivables and contract asset at theyear end. 50,866,005.17Yuan bad debt provision is provided respectively.
2. Other Receivables
| Item | Closing Balance | Opening Balance |
| Interest receivable | - | - |
| Dividend receivable | 110,000,000.00 | - |
| Other receivable | 28,883,665.74 | 36,021,805.53 |
| Total | 138,883,665.74 | 36,021,805.53 |
2.1 Dividend receivable
| Item | Closing Balance | Opening Balance |
| Sonyo Compressor (Dalian)Co., Ltd. | 110,000,000.00 | - |
| Total | 110,000,000.00 | - |
2.2 Other receivable
(1) The category of other receivables
| Items | Closing Balance | Opening Balance |
| Receivables and payables | 20,260,866.63 | 22,444,622.16 |
| Deposits | 8,478,407.11 | 13,733,003.58 |
| Petty cash | 580,451.46 | 589,402.48 |
| Total | 29,319,725.20 | 36,767,028.22 |
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTDNotes to financial statementsJanuary 1, 2023 to December 31, 2023(The currency is in RMB Yuan except otherwise indicated)(English translation for reference only)
(2) Other receivable listed by account aging
| Aging | Closing Balance | Opening Balance |
| Within 1 year | 3,049,940.86 | 10,080,508.11 |
| 1-2 years | 3,316,384.23 | 4,307,883.00 |
| 2-3 years | 1,315,000.00 | 20,750,000.00 |
| Over 3 years | 21,638,400.11 | 1,628,637.11 |
| 3-4 years | 20,210,000.00 | 430,072.11 |
| 4-5 years | 229,835.11 | - |
| Over 5 years | 1,198,565.00 | 1,198,565.00 |
| Total | 29,319,725.20 | 36,767,028.22 |
(3) The bad debt provision of other receivable
| bad debt provision | 1st stage | 2nd stage | 3rd stage | Total |
| Expected credit loss within 12 months | Expected credit loss within the whole period (no impairment) | Expected credit loss within the whole period (impairment incurred) | ||
| Opening balance | 596,484.59 | - | 148,738.10 | 745,222.69 |
| Opening balance during the year | — | — | — | — |
| --transfer to the 2nd stage | - | - | - | - |
| --transfer to the 3rd stage | - | - | - | - |
| --reverse to the 2nd stage | - | - | - | - |
| ----reverse to the 1st stage | - | - | - | - |
| Accrued | - | - | - | - |
| Reverse | 273,476.68 | - | - | 273,476.68 |
| Cancelation | - | - | - | - |
| Written off | 35,686.55 | - | - | 35,686.55 |
| Other movement | - | - | - | - |
| Closing balance | 287,321.36 | - | 148,738.10 | 436,059.46 |
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTDNotes to financial statementsJanuary 1, 2023 to December 31, 2023(The currency is in RMB Yuan except otherwise indicated)(English translation for reference only)
(4) Bad debt provision details
| Category | Opening balance | Change during the year | Closing Balance | |||
| Accrued | Collected/ reversed | Written-off | Others | |||
| Bad debt provision | 745,222.69 | - | 273,476.68 | 35,686.55 | - | 436,059.46 |
| Total | 745,222.69 | - | 273,476.68 | 35,686.55 | - | 436,059.46 |
(5) Other receivables from the top 5 debtors
| Name | Category | Closing Balance | Aging | % of the total OR | Closing Balance of Provision |
| Top 1 | Receivable | 20,000,000.00 | 3-4 years | 68.21 | - |
| Top 2 | Other deposit | 1,100,000.00 | Over5 years, | 3.75 | 40,260.00 |
| Top 3 | Bid deposit | 1,000,000.00 | 1-2 years | 3.41 | 36,600.00 |
| Top 4 | Bid deposit | 800,000.00 | Within 1 year | 2.73 | 29,280.00 |
| Top 5 | Bid deposit | 800,000.00 | Over5 years, | 2.73 | 29,280.00 |
| Total | — | 23,700,000.00 | — | 80.83 | 135,420.00 |
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTDNotes to financial statementsJanuary 1, 2023 to December 31, 2023(The currency is in RMB Yuan except otherwise indicated)(English translation for reference only)
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 | 2,416,830,861.29 | - | 2,416,830,861.29 | 2,163,545,361.29 | - | 2,163,545,361.29 |
| Investment of affiliates and JV | 513,550,283.58 | - | 513,550,283.58 | 557,452,792.51 | - | 557,452,792.51 |
| Total | 2,930,381,144.87 | - | 2,930,381,144.87 | 2,720,998,153.80 | - | 2,720,998,153.80 |
(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 | 193,749,675.77 | - | 100,000,000.00 | - | - | - | 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 | 45,272,185.00 | - | 8,000,000.00 | - | - | - | 53,272,185.00 | - |
| Dalian Bingshan Guardian Automation Co., Ltd | 50,638,361.52 | - | - | - | - | - | 50,638,361.52 | - |
| Dalian Bingshan-RYOSETSU | 59,356,051.19 | - | - | - | - | - | 59,356,051.19 | - |
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTDNotes to financial statementsJanuary 1, 2023 to December 31, 2023
(The currency is in RMB Yuan except otherwise indicated)(English translation for reference only)
| 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 | |||||
| Quick Freezing Equipment Co., Ltd | ||||||||
| Dalian Universe Thermal Technology Co., Ltd | 48,287,589.78 | - | - | - | - | - | 48,287,589.78 | - |
| 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 | 2,163,545,361.29 | - | 253,285,500.00 | - | - | - | 2,416,830,861.29 | - |
(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 | ||||||||||||
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTDNotes to financial statementsJanuary 1, 2023 to December 31, 2023(The currency is in RMB Yuan except otherwise indicated)(English translation for reference only)
| 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 | ||||
| Dalian Honjo Chemical Co., Ltd | 9,819,096.80 | - | - | - | -759,072.44 | - | - | -900,000.00 | - | - | 8,160,024.36 | - |
| Keinin-Grand Ocean Thermal Technology (Dalian) Co., Ltd | 60,089,313.51 | - | - | - | -509,338.51 | - | - | -2,000,000.00 | - | - | 57,579,975.00 | - |
| Dalian Fuji Bingshan Vending Machine Co., Ltd | 111,101,339.93 | - | - | - | -43,490,921.84 | - | - | - | - | - | 67,610,418.09 | - |
| MHI Bingshan Refrigeration (Dalian) Co., Ltd. | 15,401,109.10 | - | - | - | 1,142,546.44 | - | - | - | - | - | 16,543,655.54 | - |
| Dalian Fuji Bingshan Vending Machine Sales Co., Ltd | - | - | - | - | - | - | - | - | - | - | - | |
| Jiangsu Jingxue Insulation Technology Co., Ltd | 140,124,248.76 | - | - | - | 5,840,827.15 | - | - | -1,610,172.00 | - | - | 144,354,903.91 | - |
| Bingshan Metal Technical Service （Dalian） Co., Ltd. | 175,313,807.46 | - | - | - | 31,071,464.97 | - | - | -33,134,422.30 | - | - | 173,250,850.13 | - |
| Dalian Bingshan Group Huahuida Financial Leasing Co., Ltd | 45,603,876.95 | - | - | - | 1,197,707.15 | - | - | -751,127.55 | - | - | 46,050,456.55 | - |
| Total | 557,452,792.51 | - | - | - | -5,506,787.08 | - | - | -38,395,721.85 | - | - | 513,550,283.58 | - |
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTDNotes to financial statementsJanuary 1, 2023 to December 31, 2023(The currency is in RMB Yuan except otherwise indicated)(English translation for reference only)
4. Operating revenue and cost
| Item | Current year | Last year | ||
| Revenue | Cost | Revenue | Cost | |
| Revenue from main operation | 1,075,630,556.46 | 894,335,541.56 | 976,567,011.13 | 853,599,677.62 |
| Revenue from other operation | 71,936,541.24 | 55,064,727.51 | 71,575,982.20 | 56,250,851.97 |
| Total | 1,147,567,097.70 | 949,400,269.07 | 1,048,142,993.33 | 909,850,529.59 |
5. Investment income
| Items | Current year | Last year |
| Long-term equity investment gain under cost method | 137,049,291.85 | 153,482,615.76 |
| Long-term equity investment gain under equity method | -5,506,787.08 | -37,651,689.22 |
| Gain from holding of other non-current financial assets | 5,782,304.24 | 20,657,215.39 |
| Discounting fees for bank acceptance note | -159,560.15 | - |
| Gain from disposing long-term equity investment | - | 110,083,973.75 |
| Gain from disposal of other non-current financial assets | - | 43,296,525.04 |
| Gain on debt restructuring | - | - |
| Total | 137,165,248.86 | 289,868,640.72 |
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 April 24, 2024.
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTDNotes to financial statementsJanuary 1, 2023 to December 31, 2023(The currency is in RMB Yuan except otherwise indicated)(English translation for reference only)
XIX. Supplementary Information to the Financial Statements
1. Non-operating profit or loss
| Items | Current year | Notes |
| Gain or loss from disposal of non-current assets (including written off part of the impairment provision) | -6,656,241.40 | |
| Government grants recorded into profit or loss | 8,263,130.89 | |
| The gain or loss of fair value changes arising from the holding of financial assets and financial liabilities by non-financial enterprises and the loss or profit arising from the disposal of them, apart from the effective hedging for the normal business operation. | 14,073,910.32 | |
| Expenses for using funds from non-financial institution recognized in current profit/loss | - | |
| Profits/loss from investments or management of assets entrusted by others | - | |
| Investment income on entrusted loan | - | |
| Assets impairment provision accrued due to force majeure, e.g.: suffering natural disasters | - | |
| Reversal of impairment provision of accounts receivable separately tested for impairment | 3,784,207.57 | |
| Gains from acquisition of subsidiary or associates when initial cost is less than the fair value of identifiable net asset of invested company | - | |
| Net gain/loss of subsidiary from combination under same control between the beginning of year and consolidation date. | - | |
| Profits/loss from non-monetary assets exchange | - | |
| Profit or loss from debts restructuring | 1,791,602.29 | |
| One-off expenses incurred for discontinued operation activities such as the expense of relocating employees | 3,928,060.93 | |
| Effects of gain/loss from one-off adjustments of gain/loss based on laws and regulations of taxation and accounting. | - | |
| Share payment arising from the cancellation or modification of share incentive plans | - | |
| For cash settled share payment, gains and losses arising from changes in the fair value of employee payable after the exercise date | - |