Bingshan Refrigeration & Heat Transfer
Technologies Co., Ltd.
2022 Semiannual Report
August, 2022
Section 1 Important Notice, Table of Contents, and Definitions
The directors and the Board of Directors, the supervisors and theSupervisory Board, and Senior staff members of Bingshan Refrigeration &Heat Transfer Technologies Co., Ltd.(hereinafter referred to as the Company)hereby confirm that there are not any important omissions, fictitiousstatements or serious misleading carried in this report, and shall take allresponsibilities, individual and/or joint, for the reality, accuracy andcompleteness of the whole contents.
All directors have attended this Board meeting of the Company.
There is no significant risk having adverse influence on attainment of theCompany's future development strategy and business targets. Theparagraph " Management discussion and analysis" in Section 3 of thisSemiannual Report describes major risks , including the risk of increasingmarket competition risk, the market promotion for new product and newtechnology slow and the accounts receivable is on the high side. See therelated sections for the countermeasures to be taken by the Company.
The Company plans to distribute no cash dividends, no bonus shares andconvert no reserve fund into capital stock.
Chairman of the Board of Directors of the Company Mr. Ji Zhijian,Financial Majordomo Mrs. Wang Jinxiu, and the head of AccountingDepartment Mr. Li Sheng hereby confirm that the financial report of thesemi-annual report is true and complete.
This report is written respectively in Chinese and in English. In the event ofany discrepancy between the two above-mentioned versions, the Chineseversion shall prevail.
CONTENTS
Section 1 Important Notice, Table of Contents, and Definitions ...... 2
Section 2 About the Company and Main Financia Indicators ...... 6
Section 3 Management Discussion and Analysis ...... 8
Section 4 Corporate Governance ...... 15
Section 5 Environmental and Social Responsibility ...... 16
Section 6 Important Items ...... 17
Section 7 Change in Share Capital and Shareholders' Information ...... 19
Section 8 Information on Preferred Stock ...... 21
Section 9 Bond Related Information ...... 22
Section 10 Financial Report ...... 23
Reference Documents
1. The accounting statements bearing the signatures and seals of the legal representative, the financial
majordomo and the accountants in charge.
2. The original copies of all the Company's documents and the original copies of the bulletins published on thenewspapers designated by the China Securities Regulatory Commission in the report period.
3. Time for reference: from Monday to Friday 8:00 - 11:30 (am) 1:00 - 4:30 (pm)Liaison persons: Mr. Song Wenbao, Ms Du YuTel: 0086-411-87968130Fax: 0086-411-87968125
DefinitionsDefined item Stands for
MeaningReporting period Stands for
From Jan. 1, 2022 to Jun. 30, 2022The Company, this Company Stands for
Bingshan Refrigeration & Heat Transfer Technologies Co.,Ltd.Bingshan Engineering Company
Stands for
Dalian Bingshan Group Engin
the Company holds 100% of its shares.Wuxin Refrigeration Stands for
eering Co., Ltd.,one of the subsidiaries of the Company where
Wuhan New World Refrigeration Industry Co., Ltd., one of the subsidiaries of the Company
where the Company holds 100% of its shares.Bingshan Guardian Stands for
Wuhan New World Refrigeration Industry Co., Ltd., one of the subsidiaries of the Company
Dalian Bingshan Guardian Automation Co., Ltd. one of the subsidiaries of the Company
where the Company holds 100% of its shares.Panasonic Compressor Stands for
Dalian Bingshan Guardian Automation Co., Ltd. one of the subsidiaries of the Company
Panasonic Appliances Compressor (Dalian) Co., Ltd. one of the associated
companies of the
Company, where the Company holds 40% of its shares.Panasonic Cold-Chain Stands for
companies of the
Panasonic Appliances Cold-Chain (Dalian) Co., Ltd. one of the associated
companies of the
Company, where the Company holds 40% of its shares.Panasonic Refrigerating System
companies of the
Stands for
Panasonic Appliances Refrigerating System (Dalian) Co., Ltd., one of the
associated company of the Company, where the Company holds 20% of its sharesJingxue Insulation Stands for
Panasonic Appliances Refrigerating System (Dalian) Co., Ltd., one of the
Jiangsu Jingxue Insulation Technology Co., Ltd., one of the associated
companies of the
Company, where the Company holds 21.91% of its shares.
Section 2 About the Company and Main Financial Indicators
I. Company information
Short form of the stock Bingshan; Bingshan BStock code 000530; 200530Listed stock exchange Shenzhen Stock ExchangeLegal name in Chinese冰山冷热科技股份有限公司
Short form of legal name冰山冷热
Legal English nameBingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
Abbreviation of legal English nameBingshan
Legal representative Ji Zhijian
II. Contact persons and information
Secretary of the Board of Directors Authorized representative for securities affairs
Name Song Wenbao Du YuAddress
No.106, Liaohe East Road, Dalian Economic and
Technological Development Zone
| No.106, Liaohe East Road, Dalian Economic and | No.106, Liaohe East Road, Dalian Economic and |
Technological Development ZoneTel. 0411-87968130 0411-87968822Fax 0411-87968125 0411-87968125E-mail 000530@bingshan.com 000530@bingshan.com
III. Other situations
1. Contact of company
If the registered address, office address and zip code, website, email box of the Company had any change in thereport period
□ Applicable √ Not applicable
2. Information disclosure and place of preparation
If the information disclosure and the place of preparation had any change in the report period
□ Applicable √ Not applicable
The name of newspaper for information disclosure selected by the Company, the address of the website designatedby China Securities Regulatory Commission for carrying semi-annual report, the place where the semi-annualreport of the Company is prepared had no change in the report period. Refer to the Annual Report for 2021 fordetails.
IV. Main accounting data and financial indicators
Did the Company retroactively adjust or restate the accounting data of previous years due to change in theaccounting policy and correction of accounting mistakes?
□ Applicable √ Not applicable
Unit: RMB Yuan
2022.1-6 2021.1-6
Increase/decrease compared with
the same period of last yearOperating revenue
1,291,858,908.71
1,094,285,620.97
18.06%
Net profit attributable to shareholders of listed companies
29,568,351.52
-14,584,210.01
302.74%
Net profit belonging to the shareholders of listed companies
after the deduction of non-recurring profit and loss
10,705,118.35
Net profit belonging to the shareholders of listed companies
-11,882,674.61
190.09%
Net cash flow from operating activities
-189,406,336.85
-28,887,836.28
-555.66%
Basic earnings per share
0.035
-0.017
305.88%
Diluted earnings per share
0.035
-0.017
305.88%
Weighted average return on net asset yield
0.98%
-0.43%
Increase 1.41 percentage points
2022.6.30 2021.12.31
Increase/decrease compared with
2021.12.31Total assets
5,841,301,503.15
5,735,570,604.67
1.84%
Owner's equity attributable to shareholders of listed companies
3,023,642,891.92
3,002,842,837.47
0.69%
V.1.Difference of accounting data between as per Chinese accounting standards and as perInternational Accounting Standards
□ Applicable √ Not applicable
2. Difference of accounting data between as per Chinese accounting standards and as perForeign Accounting Standards
The difference of accounting data between as per Chinese Accounting Standards and as per InternationalAccounting Standards was 0.
VI. Non-recurring profits and losses and their amounts
itemAmount
Disposal gains and losses of non-current asset 67,260.20
Government subsidies included in current profit or loss
1,984,170.62
When the investment cost of a subs
idiary, associate or joint venture is less than that
idiary, associate or joint venture is less than thatof the investment, an enterprise shall enjoy the income generated by the fair value
of the identifiable net assets of the invested entity
2,834,620.63
| of the investment, an enterprise shall enjoy the income generated by the fair value | |
Disposal gains from investments on financial assets
from fair value change of other non-current financial assets
13,870,603.52
available for sale, and gains
Other non-operating revenue or expense 1,278,039.78
Influence on income tax 992,883.13
Influence on minority shareholders 178,578.45
Total 18,863,233.17
Section 3 Management discussion and analysis
I. The Company’s Main business during the reporting period
Focusing on the hot and cold industry, the Company is committed to the development of industrialrefrigeration and heating business, commercial refrigeration business, air conditioning and environmentbusiness, engineering and service business and new business fields, covering the key areas of the hot and coldindustry chain and creating a complete hot and cold industry chain.The Company's main products include piston and screw refrigeration compressors, pressure vessels, combinedwarehouses, controlled atmosphere storage, quick freezer, etc., which are used in national defense, scientificresearch, petroleum, chemical, textile, medicine, power generation, agriculture, animal husbandry, fishery andcatering service industries. The Company's product sales and comprehensive solutions provide both domesticand international markets, with self-supporting sales as the main and channel sales as the auxiliary.During the reporting period, rigid demands such as food safety, consumption upgrading, energy conservationand carbon reduction will benefit the refrigeration and air conditioning industry. At the same time, therefrigeration and air conditioning industry is also facing the problems of intensified market competition,increased cost pressure, and difficulty in improving efficiency. Facing the opportunities and challenges,focusing on the hot and cold industry, the Company continued to deeply cultivate the advantageous marketsegments, and actively expanded and occupied the domestic market.
1. Industrial refrigeration and heating business
Industrial refrigeration is an important field reflecting the core technology of the Company. After years ofdevelopment, the Company has been close to the technical level of the main international competitors in thefield of industrial refrigeration, and has achieved catching up in some fields. Based on the traditionalrefrigeration, the Company realizes the balance of cold and heat through the utilization of heat, which greatlyimproves the energy utilization rate.
2. Commercial refrigeration business
Commercial refrigeration is the Company's core business. In China, the Company takes the lead in opening upthe green intelligent cold chain from the first kilometer of the field to the last 100 meters of the residentialcommunity, which is the competitive advantage of the Company.Focusing on food refrigeration, the Company has patented products pre-cooling from the field, all kinds ofquick freezing equipment and refrigeration facilities of various specifications, and China's leading experiencein the design and installation of large-scale ammonia and carbon dioxide refrigerators. On the basis ofabsorbing the relevant experience of Japan, Europe and the United States, combined with China's new needs,to provide newer products, better solutions and fresher experience for the field of food freezing andrefrigeration.
3. Air conditioning and environment business
In recent years, relying on the complete industrial chain, the Company has continuously carried outtransformation and upgrading in the field of air conditioning and environment, developed more energy-savingand environmental protection products around the blue sky project, and accelerated the transformation andupgrading from air treatment to environmental governance.At present, the Company has developed a series of innovative products around the market segments ofcommercial air conditioning, central air conditioning and special air conditioning, and provides correspondingsolutions in different segments around these innovative products. For hospitals, electronic factories, high-endreal estate, rail transit and other fields, provide targeted solutions.
4. Engineering and service business
Cold and hot engineering and service are the Company's advantageous business fields. In recent years, theCompany has realized transformation and upgrading from the manufacturer of cold and hot equipment to theservice provider of comprehensive solution of cold and hot through the development of engineering andservice industry, and realized the dual wheel drive of the enterprise, and provided more professional andaccurate services to each segment market, and constantly created new value for customers and realizedcommon growth.At present, the Company focuses on petrochemical technology, refrigeration, central air conditioning, ice andsnow engineering, artificial environment and other market segments. Relying on the enterprise's industrialchain, value chain and ecosystem, the Company provides services from consulting, planning, design tomanufacturing, installation, commissioning and service in the whole process and life cycle. At the same time,according to the needs of customers, promote the combination of industry and finance, and provide services forcustomers through the form of project general contracting and financial leasing.
5. New business
With the deepening of China's economic transformation and upgrading, as well as the continuous introductionof environmental governance policies, the domestic industrial energy conservation and environmentalprotection industry is growing rapidly, the level of energy conservation and consumption reduction ofenterprises and the comprehensive utilization of resources is constantly improving, and the energy industrialstructure has changed. Strengthening the optimal utilization of energy has become a development trend. Forlow-grade energy recycling, the Company provides customers with a series of energy-saving, environmentalprotection, efficient new products, in line with the national strategic requirements of energy conservation,carbon reduction and sustainable development, and contributes professional wisdom to the national carbonpeak and carbon neutral strategy.During the reporting period, the Company made good progress in CCUS, ORC, photovoltaic and other newundertakings.
II. Analysis of core competence
The Company focuses on main business of cold and heat; independent R&D and joint venture partnerships arecooperate with each other effectively; capital resources integration and business model innovation are in a positiveinteraction; the community of business and interest are being multi-storey created; the develop mode withBingshan characteristic are formed.The Company has the integrated cold-heat industrial chain for offering kinds of comprehensive solution services,including design, manufacture, installation and maintenance etc., and can satisfy individual requirementspreferably.The Company possesses a mature and solid marketing networks and after-sale service network on/off-line, andcan offer high quality and high value-added services more initiative and faster for clients from around the city.After overall relocation reform, the new factory of intelligence, environment protection, high efficiency and safetyare put into used, which produces a strong comparative advantage for creating higher value to the customers.While move forward with transformation and upgrading for former business, the Company will implement thecultivation for new business, thus the sustainable healthy development will come more and more feasible.Core-competency of the Company further promoted in the reporting period.
III. Analysis of main business
In the first half of 2022, the Company focused on hot and cold industries, continued to cultivate advantageousmarket segments, solidly improved its core competitiveness, and accelerated the improvement of its mainbusiness. In the first half of 2022, the Company achieved an operating revenue of 1,291.86 million yuan, anincrease of 18.06% year-on-year; The net profit attributable to the shareholders of the listed company was
29.57million yuan, turning losses into profits year on year.
During the reporting period, the Company adhered to integrity, innovation and pragmatic reform. Enrich andstrengthen the operation and management team, adjust and optimize the organizational structure and businessprocesses. Multiple strategies should be taken simultaneously to effectively improve production capacity andproduction efficiency. With green refrigerant and zero carbon as the center and market segmentation as thegoal, we will solidly improve technology. The "national high-end equipment manufacturing standardizationpilot" passed the acceptance smoothly. The screw refrigeration unit for large ocean fishing vessels of theCompany was selected as the "specialized and special new" product of Liaoning Province in 2022.During the reporting period, Bingshan Engineering company, a subsidiary of the Company, continued tocultivate advantageous market segments. In the field of product business, actively serve high-end customers,and sign a number of projects with BASF, Yabao, etc; Join hands with leading enterprises to lead thepolysilicon market. In the field of engineering, Xinjiang central kitchen project, Shanghai Star indoorcomprehensive ice and snow venue project and other landmark projects were constructed in an orderly manner.In the field of energy, the implementation of CCUS projects has been accelerated, and carbon neutralizationsolutions have been strongly expanded.During the reporting period, Wuhan New World Refrigeration, a subsidiary of the Company, further optimizedits products and solutions. Based on the existing traditional products, focus on expanding the energy, coal andLNG segment markets. The marketing of the main models of energy products has achieved good results, andthe steam screw compressor unit has achieved a breakthrough in the sales of new products.During the reporting period, Bingshan Guardian, a subsidiary of the Company, focused on energy-savingcontrol of cooling and heating systems and made efforts to become stronger and bigger. Absorb and mergeNew Meica to realize resource integration, complementary advantages and efficient operation. Won the bid forthe distribution box project of Dalian Bay Subsea Tunnel project, and helped Dalian key projects.Independently develop comprehensive energy-saving algorithm, and launch the centralized monitoringenergy-saving system of IOT supermarket convenience stores with obvious energy-saving effect.
Main financial data variations as compared to the same period of last year
Monetary unit: RMB YuanReport period
Same period of last
year
Increase or decreasefrom the same periodof last year
Reason for variationOperating revenue1,291,858,908.71
1,094,285,620.97
18.06%
Operating cost1,131,915,209.09
950,404,769.26
19.10%
Selling and
distributionexpenses
55,209,408.15
Selling and
56,710,524.65
-2.65%
Administrativeexpenses
70,074,155.71
71,726,497.78
-2.30%
Financial expenses
5,470,355.43
6,240,668.73
-12.34%
Income tax2,774,153.99
2,514,997.49
10.30%
R&D expenses31,564,520.91
30,738,151.60
2.69%
Net cash flow
Net cash flowcoming from
operating activities
coming from
-189,406,336.85
-28,887,836.28
-555.66%
Due to the substantial increase in orders, the
purchase volume and engineeringinstallation volume increased, and the cash
paid for purchasing goods and acceptinglabor services increased
comi
Net cash flowng from
ng frominvestment activities
70,350,256.80
investment activities
26,104,458.71
169.50%
Increase in cash received from dividends ofassociates and decrease in cash paid forinvestments
Net cash flow
Net cash flowcoming from
fund-raisingactivities
30,185,223.89
| coming from | ||
-57,923,362.57
152.11%
Decrease in cash paid for debt repayment
and cash equivalents
Net increase in cash
-87,256,638.78
-60,589,772.47
-44.01%
Sales income and costs
Report period Same period of last yearIncrease or decrease
from the same period
of last yearAmount
Proportion to the
Sales costs
Amount
Proportion to the
Sales costsTotal sales income
from the same period
1,291,858,908.71
100%
1,094,285,620.97
100%
25.29%
By industryRefrigeration andair-conditioningequipment
1,246,624,682.46
96.50%
1,069,601,775.40
97.74%
16.55%
Others45,234,226.25
3.50%
24,683,845.57
2.26%
83.00%
By productIndustrial products912,396,566.62
70.63%
864,579,358.55
79.01%
5.53%
Installation project328,784,059.27
25.45%
196,759,744.53
17.98%
67.10%
Other products andservices
50,678,282.82
3.92%
32,946,517.89
3.01%
53.82%
By regionDomestic sales1,215,091,356.98
94.06%
1,036,222,666.10
94.69%
17.26%
Foreign sales76,767,551.73
5.94%
58,062,954.87
5.31%
32.21%
Main business structure
Monetary unit: RMB yuan
Operating revenue
Operating costs
Grossprofit
Increase/decrease ofoperating revenuesfrom the same period
of last year
Increase/decreas
e of operatingcosts from thesame period of
last year
Increase/decrease of gross profitfrom the same period of last year
By industry
air-conditioning
1,246,624,682.46
| Refrigeration and | ||
1,101,097,130.75
11.67%
16.55%
17.19%
Decrease0.49 percentage points
By product
Industrial products
912,396,566.62
784,509,505.43
14.02%
5.50%
6.00%
Decrease 0.51 percentage points
Installation project
328,784,059.27
312,879,375.49
4.84%
67.10%
62.50%
Increase 2.36 percentage points
Other products andservices
5,444,056.57
3,708,249.83
31.88%
-34.10%
-47.90%
Increase 18.09 percentage points
By region
Domestic sales1,169,857,130.73
1,031,667,083.53
11.81%
15.65%
16.22%
Decrease0.43 percentage points
Foreign sales76,767,551.73
69,430,047.22
9.56%
32.21%
33.92%
Decrease1.15 percentage points
IV. Analysis of the non-main business
√Applicable □Not applicable
unit: RMB yuan
income from investment 83,743,763.15
In addition to the investment income fromone-time equity transfer, the investmentincome of the Company to the associatedcompanies is sustainable.
V. Analysis of assets & liabilities
1. Remarkable change in assets
Monetary unit: RMB yuan
30-6-2022 31-12-2021
Proportion increase/decrease.Amount
Proportionto the total
assets
Amount
Proportion tothe total assets
Monetary funds402,662,001.86
6.89%
522,658,505.79
9.11%
Decrease 2.22percentage points
Accounts receivable982,008,651.89
16.81%
821,548,678.85
14.32%
Increase 2.49 percentage points
Contract assets126,164,442.94
2.16%
109,859,658.79
1.92%
Increase 0.24 percentage points
Inventories1,053,998,091.18
18.04%
1,014,527,127.82
17.69%
Increase 0.35 percentage points
Investment property117,379,096.16
2.01%
120,752,809.61
2.11%
Decrease 0.01 percentage points
Long-term equityinvestment
1,207,390,848.39
20.67%
1,231,504,533.45
21.47%
Decrease 0.08 percentage points
Fixed assets831,680,902.75
14.24%
855,395,405.85
14.91%
Decrease 0.67 percentage points
Construction in progress
50,556,431.55
0.87%
38,974,478.45
0.68%
Decrease 019 percentage points
Right of use assets16,107,591.26
0.28%
23,934,703.37
0.42%
Decrease 0.14 percentage points
Short-term loans240,000,000.00
4.11%
245,937,091.72
4.29%
Decrease 0.18 percentage points
Contract liabilities445,660,584.96
7.63%
499,719,963.40
8.71%
Decrease 1.08percentage point
Long-term loans140,000,000.00
2.40%
150,000,000.00
2.62%
Decrease 0.22 percentage points
Lease liabilities5,631,101.48
0.10%
5,394,021.14
0.09%
Increase 0.01 percentage points
2. The main overseas assets
□ Applicable √ Not applicable
3. Assets & liabilities which are measured by fair value
√ Applicable □ Not applicable
The beginning number is 261,410,664.61 yuan for other non-current financial assets measured by fair value.Changes in the profit and loss of the fair value in this period is-29,425,921.52 yuan，The amount sold in thecurrent period is 107,495,400.00 yuan, the current sale amount is 0 yuan, and the final number is167,515,974.19yuan.
3. Restrictions on asset rights at the end of reporting period
√ Applicable □ Not applicable
Items 2022.6.30 ReasonsMonetary fund 50,887,086.77
Guarantee moneyNotes Receivable 4,810,536.65
PledgeInventories 88,294,179.79
PledgeFixed assets 38,433,002.00
PledgeIntangible assets 6,209,834.23
Pledge
VI. Analysis of investments
1.The overall situation
√ Applicable □ Not applicable
Investment in the report period (yuan)
Investment in the same period of last year (yuan)
Amount of variation
1,207,390,848.39
1,606,295,377.43
-24.83%
2.The significant equity investment during the reporting period
□ Applicable √ Not applicable
3 The significant non-equity investment during the reporting period
□Applicable √Not applicable
4.The financial asset investment
(1) The securities investment
√ Applicable □ Not applicable
Stockcode
Stockabbreviation
Initialinvestment
cost
Accountingmeasurement
model
Book value atthe beginning
Changes in theprofit and loss
of the fairvalue in this
period
Accumulative change offair valuecredited to
equity
Current sale
amount
Report periodprofit and loss
Book value in the
ending
Accounting
subjects
Sourceof funds
Book value in the
601211
GuotaiJun’an
10,910,008.00
fair valuemeasurement
195,180,043.12
-29,425,921.52
5,289,000.00
-22,007,116.08
165,832,121.60
OtherNon-currentfinancial assets
Ownfunds
total10,910,008.00
--195,180,043.12
-29,425,921.52
5,289,000.00
-22,007,116.08
165,832,121.60
--
(2) Derivative investment
□Applicable √ Not applicable
During the reporting period, the Company does not exist derivative investment.
VII. The material assets and equity sale
1. The material assets sale
□Applicable √Not applicable
2. The material equity sale
√ Applicable □ Not applicable
The Company transferred 17.80 percent equity of Suzhou Thermoking which was held by the Company with priceof RMB 102.2064 million yuan to Trane Technologies European Holding Company B.V. After the abovementioned equity transfer finished, the Company will not hold equity of Suzhou Thermoking.
VIII. Analysis of major subsidiary companies and mutual shareholding companies
√ Applicable □ Not applicable
Unit: ten thousand yuan (except for registered capital)
Type The main business registered capital
| Company name |
total assets
net assets Operating income
Net profit
PanasonicCompressor
mutualshareholdingcompany
Scroll Compressor JPY 6,200 million
149,014.00
111,476.00
58,677.00
4,843.00
Jing XueInsulation
mutualshareholdingcompany
New buildingenergy-saving board,refrigerated storage door
RMB108,000thousand
158,759.00
77,728.00
27,483.00
1,423.00
Bingshan Metal mutual Pipe system connectors, USD 18.064539,119.00
33,394.00
24,038.00
2,981.00
Technology shareholding
company
high-speed railconnectors, hydraulicvalve bodies, automotiveengine parts, etc.
million
PanasonicCold-chain
mutualshareholdingcompany
Production and sales ofcommercial refrigerationequipment, cold storage,stainless steel kitchenequipment and electricalproducts
JPY 4,650 million
223,961.00
16,987.00
107,604.00
-4,485.00
Subsidiary companies obtained or disposed in the reporting period
√ Applicable □ Not applicable
The Company transferred 100 percent equity of Bingshan Service which was held by the Company with price ofRMB 25.8882 million yuan. During the reporting period ,the equity transfer has been finished, the Company nothod equity of Bingshan Service.
IX. The structured corporate bodies which the Company controlled
□Applicable √Not applicable
X. Main risks the company faces and response measures
(1)Increasing market competition risk
Countermeasures: focus on the hot and cold industry, deeply cultivate the advantage market segmentation; rapidlyimprove the engineering and manufacturing power; orderly improve the level of intelligent manufacturing andservice-oriented manufacturing; speed up the transformation and upgrading of inherent undertakings; acceleratethe implementation of new kinetic energy cultivation; continue to build Bingshan enterprise and interestcommunity.
(2)Risk of slow marketing of new products and technologies
Countermeasures: create differentiated competitiveness of new products and technologies; strengthen thetechnology marketing and service marketing, and cultivate the market segmentation professionally; appropriateuse of financial leasing, contract energy management and other innovative models.
(3)Risk of high level of trade receivables
Countermeasures: strictly implement the project management system and further strengthen the management ofaccounts receivable; enhance quality of contract through intensified customer credit assessment and contractappraisal; effective control of increase in trade receivables by reduction of guarantee deposits, and taking bankcredit instruments as guarantee deposits; improve contract execution through stricter review on goods delivery,intensified control on project construction and acceptance, and post-sale service; prepare special compositionsolutions and incentive policy to accelerate settlement of trade receivables with relatively long aging.
(4)Risk of rising raw material prices
Countermeasures: the Company will actively respond to cost pressure by reducing material rates, centralizedprocurement, expanding sales, adjusting selling prices, reducing expenses and other measures.
Section 4 Corporate governance
I. Shareholders’ general meeting convened in the reporting periodSession number of meeting The type of the meeting
The proportion ofparticipate investors
date Disclosing date
participate investors
Disclosing index
The first Extraordinary General Meeting of
shareholders in 2022
| The first Extraordinary General Meeting of | Extraordinary Shareholders’ |
General Meeting
29.37%
Jan12,2022
Jan 13,2022
http://www.cnin
fo.com.cn2021Annual Shareholders’ General Meeting
Annual Shareholders’ General
Meeting
29.74%
May18,2022
Annual Shareholders’ General
May 19,2022
http://www.cnin
fo.com.cn
II. Changes of directors, supervisors, senior managers of the Company
Name Position held Type Date ReasonFan Wen Director be elected Jan12, 2022
The Board of directors changes, gets electedSong Wenbao Director be elected Jan12, 2022
The Board of directors changes, gets electedDono Shigeru Director be elected Jan12, 2022
The Board of directors changes, gets electedLu Jun
Vice General
Manager
be appointed Jan12, 2022
Appointed by the Board of DirectorsYang Fuhua
Vice General
Manager
be appointed Jan12, 2022
Appointed by the Board of DirectorsYin Xide
Vice chairman of
the board of
directors
be elected Jan12, 2022
be electedXu Junrao Director
Leave office after
the end of term
Jan12, 2022
General election, leave officeYokoo Sadaaki
Director
Leave office after
the end of term
Jan12, 2022
General election, leave officeDing Jie
Vice chairman of
the board of
directors
Leave office after
the end of term
Jan12, 2022
General election, leave office
III. Profit distribution and dividend payment
□ Applicable √ Not applicable
IV．The implementation and effect of equity incentive
□ Applicable √ Not applicable
Section 5 Environmental and social responsibility
I．Major environmental issuesThe listed company and its subsidiaries whether belong to heavy pollution industry formulated by the stateenvironmental protection department
□Yes √ No
Administrative penalties imposed for environmental problems during the reporting period
□Yes √ No
Enterprise or subsidiary
Mainpollutant
andfeatures
Way of
discharge
dischargeNumber of
discharge
outlet
Number of
Distribution
of thedischarge
outlet
Emissionco
ncentration
Pollutantdischargestandardimplemented
ncentration
Total
discharge
Totalapproved
| discharge | ||
| emissions |
Excessiv
eemission
Bingshan Refrigeration & HeatTransfer Technologies Co., Ltd.
COD sequence
Unifieddischarged
129㎎/L
DB211627-2008
1.807tons
None
Not
over
overstandard
Bingshan Refrigeration & HeatTransfer Technologies Co., Ltd.
standard
Ammonianitrogen
sequence
Unifieddischarged
9.72㎎/L
DB211627-2008
0.127 tons
None
Not over
standard
Not over
Bingshan Refrigeration & HeatTransfer Technologies Co., Ltd.
Dust sequence
Unifieddischarged
2.2mg/m
GB9078-1996
1.363 tons
None
Not over
standard
Not over
The Company received the new version of the "Sewage Discharge Permit" issued by the Dalian EcologicalEnvironment Bureau in July 2020. The Company discharges within the limit according to the required emissionconcentration of the new version of "Sewage Discharge Permit".
Measures and effects taken by the Company to reduce carbon emissionsDuring the reporting period, the Company implemented the green, energy-saving and efficient lean productionmode in the production process, continuously improved the operation mode, improved the operation efficiency,reduced the operation cost, and continued to move forward towards intelligent manufacturing and greenmanufacturing.During the reporting period, the phase I photovoltaic power generation project constructed by the Company usingthe roofs of some plants in the new plant area operated smoothly as a whole. The installed power of the project is
3.4 MW, the annual power generation is about 4.08 million kwh, and the annual carbon dioxide emission isreduced by about 4067 tons.During the reporting period, based on energy-saving and carbon reduction technologies such as high-efficiencyenergy-saving compressors, green refrigerants and CCUS, the Company completed a number of energy-savingand carbon reduction projects with customers, creating good economic and social benefits.II．Social responsibilitiesDuring the reporting period, the Company continued to pay attention to the poverty alleviation and consolidationof its counterpart, Songlin Village, Guangming Mountain Town, Zhuanghe City, visited and regularly maintainedthe air conditioning equipment of the villagers' cultural activity center.
Section 6 Important items
I. Commitments made by the actual controller, shareholders, related parties,purchasers, the company and other relevant parties that have completed theirperformance during the reporting period and have not completed their performanceas of the end of the reporting period
□ Applicable √ Not applicable
II. Non-operation capital occupation by holding shareholders and their related partiesin the listed company
□ Applicable √ Not applicable
III. Foreign guarantee in violation of regulations
□ Applicable √ Not applicable
IV. Engagement and dismissal of the accounting firm
□ Applicable √ Not applicable
V. Explain to the “non standard audit report” of this reporting period from the boardof directors, board of supervisors of the Company
□Applicable √Not applicable
VI. Explain to the “non standard audit report” last year from the board of directors ofthe Company
□Applicable √Not applicable
VII. Bankruptcy restructuring related matters
□ Applicable √ Not applicable
VIII. Major lawsuit issues
□ Applicable √ Not applicable
The Company had no major lawsuit issues in the reporting period.
IX. Punishment and rectification
□ Applicable √ Not applicable
X. The credibility of Companies and its controlling shareholder, actual controller
√ Applicable □ Not applicable
The controlling shareholder of the Company and the Company don’t exist situation such as unfulfilled thecourt’s effective judgments or failed to pay duly a large amount of debt during the reporting period.
XI. Important associated transactions
1. Important associated transactions
In the reporting period, the total amount of normal associated transactions between the Company andassociated parties was 262,660 thousand yuan, accounting for 34.27% of the budgeted amount for theyear 2022. This included 65,490 thousand yuan, accounting for 37.75% of the budgeted amount for theyear 2022, for purchasing supporting products for package projects from associated parties, and 197,170thousand yuan, accounting for 33.24% of the budgeted amount for the year 2022, from selling supportingparts and components to associated parties.
2.Associated transactions related to purchases or sales of assets
□ Applicable √ Not applicable
3.Important associated transactions with joint external investments
□ Applicable √ Not applicable
4.Current associated rights of credit and liabilities
□ Applicable √ Not applicable
5. Current associated rights of credit and liabilities with related financial companies orfinancial companies that the company holds
□ Applicable √ Not applicable
6. Other associated transactions
√ Applicable □ Not applicable
During the reporting period, the Company transferred 100% equity of its wholly-owned subsidiaryBingshan Technology Services (Dalian) Co., Ltd. to Dalian Bingshan Group Co., Ltd., DalianZhonghuida Refrigeration Technology Co., Ltd. and Dalian Zhixin Enterprise Management Partnership(limited partnership) upon deliberation at the 2nd meeting of the 9th Board of Directors of the Company.The above transactions constitute connected transactions and the equity transfer has been completed.
XII．Major contract and its performance
1. Hosting, contracting and leasing status
(1) the hosting status
□ Applicable √ Not applicable
(2) the contracting status
□ Applicable √ Not applicable
(3) the leasing status
√ Applicable □ Not applicable
The Company signed rental contract with MHI Bingshan Refrigeration (Dalian) Co., Ltd., and rent # 6workshop building located on No. 106 Liaohe East Rd, Dalian Economic and Technology DevelopmentZone to MHI Bingshan Refrigeration (Dalian) Co., Ltd. The rental area is 15,259.04 square meters, andthe rental term till 16th July, 2029. The annual rent fee for 2022 is RMB 4 million Yuan.The Company signed rental contract with Dalian Bingshan Wisdom Park Co., Ltd., and rent out thewhole land and house of the Company’s old plant locating at No. 888, Southwest Road, ShahekouDistrict, Dalian to Dalian Bingshan Wisdom Park Co., Ltd., with rental land area of 167,165.61 squaremeters and housing area of 105,652.43 square meters. The lease term is from April 1, 2017 to December31, 2036. The annual rent fee for 2022 is RMB 8.646 million Yuan.On March 17, 2021, the Company signed a lease contract with Linde Hydrogenation Station Equipment(Dalian) Co., LTD., which will lease the 8,700 square meters of plant and office located at No. 106, EastLiaohe Road, Dalian Development Zone to Linde Hydrogenation Station Equipment (Dalian) Co., LTD.The lease term will be up to December 31, 2030, and the current rent is RMB 2,137,500.
2. Guaranteeing status
√ Applicable □ Not applicable
Resolution of 2
nd
meeting of 7th session of the Board of directors agreed to provide guarantee to DalianBingshan Group Co., Ltd. for obtaining Development Fund of National Development Bank. Total amountof the loan was RMB160 million with interest rate 1.2%, and the loan period was 10 years. The fund canonly be used for cold chain green intelligent equipment and the development of service industry. WhenDalian Bingshan Group Co., Ltd. receives the fund, it has transferred all the fund to the Company withthe same conditions. The above guarantee to Dalian Bingshan Group Co., Ltd. is to the Company itselfactually.The guarantee provided by the Company to the customer Guizhou Waterfall Cold Chain Food InvestmentCo., Ltd. based on the financial leasing business continued to the reporting period, with a guaranteeamount of 25.705 million yuan. The project is currently under normal performance. The shareholders ofthe guaranteed party and relevant natural persons have provided the Company with full joint and severalliability guarantee counter guarantee, and the Company's guarantee risk is generally controllable.The guarantee provided by the Company to the customer Liuyang Zhongjie Technology Investment Co.,Ltd. based on the financial leasing business continued to the reporting period, with a guarantee amount of
9.831 million yuan. The project is currently under normal performance. The shareholders of theguaranteed party and relevant natural persons have provided the Company with full joint and severalliability guarantee counter guarantee, and the Company's guarantee risk is generally controllable.The above guarantee matters have been reviewed and disclosed by the board of directors.
3.Entrusted Financial Management
□ Applicable √ Not applicable
4. Major contract of daily operation
□ Applicable √ Not applicable
5. Other important contracts
□Applicable √Not applicable
XIII. Description of other important matters
□Applicable √Not applicable
XV. Major matters of the company's subsidiaries
□Applicable √Not applicable
Section 7 Change in Share Capital and Shareholders'
InformationI. Change in share capital
1. Change in share capital
items
Shares（before change）
Changes
Shares（after change）
number proportion number proportion
I. Non-circulating share capital with restrictedtrade conditions3,130,039 0.37%
+387,789
3,517,828
0.42%
Other domestic shares3,130,039
0.37%
+387,789
3,517,828
0.42%
II. Circulating share capital840,082,468
99.63%
-387,789
839,694,679
99.58%
1. Domestically listed ordinary shares
598,582,468
70.99%
-387,789
598,194,679
70.94%
2. Domestically listed foreign shares
241,500,000
28.64%
241,500,000
28.64%
III. Total shares843,212,507
100%
843,212,507
100%
The reason for the Change in share capitalDuring the report period, the Company's new director Fan Wen, deputy general manager Lu Jun, theCompany's director Ding Jie, Xu Junrao expired term of office. The above changes in personnel lead tochanges in senior executives' locked-in shares, resulting in changes in share composition.The abovereasons cause changes in the composition of shares.Approval of changes in shares
□ Applicable √ Not applicable
The influence of change in share capital on the recent year and recent issue for basic earnings pershare ,diluted earnings per share and net assets per share.
□ Applicable √ Not applicable
2. The restricted shares changes
√Applicable □ Not applicable
The beginning number of the restricted shares is 3,130,039, and the final number of the restricted sharesis 3,517,828, with an increase of 387,789.
II. Securities issuance and listing
1. Securities issuance in the report period
□ Applicable √ Not applicable
III. Shareholders and actual controller
1. Number of shareholders and their shareholding
Total number of shareholders at the end of thereporting period
82,519
Total number of shareholders as of the last monthbefore disclosure of the annual report
--Shareholding of top ten shareholdersName Nature Proportion
Total number
Number of
shareswith salerestriction
Number of
Number ofpledgedshares or
sharesfrozenDalian Bingshan Group Co., Ltd.
Domestic non-state-ownedlegal person
20.27%
170,916,934
Sanyo Electric Co., Ltd. Overseas legal person 8.72%
73,503,150
Lin Zhenming Foreign natural person 0.80%
6,730,000
Chen Yong Domestic natural person 0.54%
4,520,000
Wu An Domestic natural person 0.53%
4,500,000
Zhang Sufen Domestic natural person 0.51%
4,300,000
Xue Hong Domestic natural person 0.43%
3,600,000
Dalian industrial development investmentCo., Ltd.
Domestic non-state-
legal person
0.40%
owned
3,406,725
Li Xiaohua Domestic natural person 0.37%
3,145,608
Zhan Changcheng Domestic natural person 0.36%
3,013,927
Shareholding of top ten shareholders without sale restrictionName
Number of shares without
sale restriction
Type of sharesDalian Bingshan Group Co., Ltd. 170,916,934
RMB denominated ordinary shares
Sanyo Electric Co., Ltd. 73,503,150
Domestically listed foreign sharesLin Zhenming 6,730,000
Domestically listed foreign sharesChen Yong 4,520,000
RMB denominated ordinary shares
Wu An 4,500,000
Domestically listed foreign sharesZhang Sufen 4,300,000
RMB denominated ordinary shares
Xue Hong 3,600,000
Domestically listed foreign sharesDalian industrial development investment Co., Ltd. 3,406,725
RMB denominated ordinary shares
Li Xiaohua 3,145,608
RMB denominated ordinary shares
Zhan Changcheng 3,013,927
Domestically listed foreign sharesNotes to the associated relationship and uniform actions of the
above shareholders
Dalian Bingshan Group Co., Ltd. had the association relationship
with Sanyo Electric Co., Ltd. among the above shareholders.
| Dalian Bingshan Group Co., Ltd. had the association relationship |
Sanyo Electric Co., Ltd. holds 26.6
Co., Ltd.'s equity.
At the end of the reporting period, the total number of shareholders of the Company was 82,519,including 75,178 A-share shareholders and 7,341 B-share shareholders.
If the Company shareholders had any agreed repurchase transaction in the report period
□ Yes √ No
IV. Changes in shareholding of directors, supervisors and senior managers
□ Applicable √ Not applicable
V. Variation in controlling shareholders or actual controllers
Variation in controlling shareholders in the report period
□ Applicable √ Not applicable
There were no changes in the controlling shareholder in the reporting period.Variation in actual controllers in the report period
□ Applicable √ Not applicable
Section 8 Information on Preferred Stock
□ Applicable √ Not applicable
In the reporting period, the Company didn’t own preferred stock.
Section 9 Bond Related Information
□ Applicable √ Not applicable
In the reporting period, the Company didn’t own Bond.
Section 10 Financial ReportI. The Company's semiannual financial report has not been audited.
BALANCE SHEET
Prepared by Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd. June 30,2022 Unit: RMB YuanItems
30-June-2022 1-Jan-2022Consolidation Parent Company
Consolidation Parent Company
Current assets:
Monetary funds402,662,001.86
226,098,769.14
522,658,505.79
391,077,589.19
Financial assets which are measured by fair value andwhich changes are recorded in current profit and loss
Derivative financial assets
Transaction financial assets
Notes receivable181,955,093.07
54,171,528.95
166,430,365.74
61,036,803.62
Accounts receivable982,008,651.89
640,566,516.75
821,548,678.85
408,719,275.78
Receivables financing24,737,543.92
764,581.61
43,704,310.38
5,427,828.26
Accounts paid in advance225,537,271.29
90,322,298.26
182,701,403.55
57,409,521.75
Other receivables 182,939,942.92
154,188,541.18
| 60,340,096.45 |
54,222,825.18
Interest receivables
Dividend receivable12,864,770.89
16,321,464.90
1,003,568.75
25,100,920.84
Inventories1,053,998,091.18
340,277,702.25
1,014,527,127.82
339,977,048.51
Contract assets126,164,442.94
74,697,908.71
109,859,658.79
50,916,025.04
Assets held for sale
Non-current asset due within one year14,990,989.30
13,281,553.63
14,990,989.30
13,281,553.63
Other current assets17,677,299.20
262,875.32
24,525,076.71
8,871,387.69
Total current assets3,212,671,327.57
1,594,632,275.80
2,961,286,213.38
1,390,939,858.65
Non-current assets:
Finance asset held available for sales
Held-to-maturity investment
Long-term account receivable
Long-term equity investment1,207,390,848.39
1,877,227,706.53
1,231,504,533.45
1,923,394,225.05
Other Non-current financial assets167,515,974.19
166,200,831.69
261,410,664.61
260,095,522.11
Investment property117,379,096.16
93,418,471.21
120,752,809.61
95,850,052.41
Fixed assets831,680,902.75
654,070,032.03
855,395,405.85
680,392,162.13
Construction in progress50,556,431.55
42,169,867.00
38,974,478.45
28,279,901.38
Right of use assets16,107,591.26
14,980,609.23
23,934,703.37
15,636,361.47
Engineering material
Disposal of fixed asset
Productive biological asset
Oil and gas asset
Intangible assets138,604,066.93
71,688,794.33
142,592,738.10
73,679,019.01
Expense on Research and Development
Goodwill1,750,799.49
-
1,750,799.49
-
Long-term expenses to be apportioned7,465,632.83
6,113,409.69
8,088,684.23
6,766,442.52
Deferred income tax asset90,178,832.03
16,863,056.76
89,879,574.13
16,806,287.61
Other non-current asset
Total non-current asset2,628,630,175.58
2,942,732,778.47
2,774,284,391.29
3,100,899,973.69
Total assets5,841,301,503.15
4,537,365,054.27
5,735,570,604.67
4,491,839,832.34
Current liabilities:
Short-term loans240,000,000.00 229,000,000.00
245,937,091.72
230,373,666.72
Financial liabilities which are measured by fair valueand which changes are recorded in current profit andloss
Derivative financial liabilities
Transaction financial liabilities
Notes payable320,677,585.76
206,656,813.15
380,033,039.56
238,051,362.81
Accounts payable1,157,541,083.28
373,435,894.60
919,871,927.53
318,798,749.33
Accounts received in advance
Contract liabilities 445,660,584.96
130,257,394.65
499,719,963.40
115,654,933.60
Wage payable9,106,878.51
133,117.58
35,148,782.48
13,551,313.90
Taxes payable32,022,968.12
17,912,457.32
13,514,847.82
2,667,309.95
Other accounts payable47,679,599.23
26,296,775.31
55,284,140.21
23,508,139.39
Interest payable
Dividend payable 10,765,281.07
8,965,281.07
3,008,156.00
533,156.00
Liabilities held for sale
Non-current liabilities due within one year22,899,439.44
1,918,874.53
24,175,388.12
1,918,874.53
Other current liabilities201,328,280.32
70,763,171.64
195,213,206.91
68,871,944.99
Total current liabilities2,476,916,419.62
1,056,374,498.78
2,368,898,387.75
1,013,396,295.22
Non-current liabilities:
Long-term loans
140,000,000.00
| 0,000,000.00 |
| 0,000,000.00 | 0,000,000.00 |
Bonds payable
Preferred stock
Perpetual bond
Lease liability5,631,101.48
12,121,374.01
5,394,021.14
13,243,055.41
Long-term account payable23,088,337.61
-
19,998,913.29
-
Long-term wage payable
Special Payable
Anticipation liabilities
Deferred income103,009,836.92
64,389,334.92
106,185,323.82
66,992,823.82
Deferred income tax liabilities23,238,317.04
23,238,317.04
35,596,349.70
35,596,349.70
Other non-current liabilities
Total non-current liabilities294,967,593.05
239,749,025.97
317,174,607.95
265,832,228.93
Total liabilities2,771,884,012.67
1,296,123,524.75
2,686,072,995.70
1,279,228,524.15
Shareholders’ equity
Share capital 843,212,507.00
843,212,507.00
| 843,212,507.00 | 843,212,507.00 |
Other equity instruments
Preferred stock
Perpetual bond
Capital public reserve719,879,694.78
755,146,592.54
720,215,866.78
755,146,592.54
Less: Treasury stock
Other comprehensive income2,178,681.73
1,216,581.06
2,178,681.73
1,216,581.06
Special preparation
Surplus public reserve809,471,199.64
809,471,199.64
809,471,199.64
809,471,199.64
Generic risk reserve
Retained profit648,900,808.77
832,194,649.28
627,764,582.32
803,564,427.95
Total owner’s equity attributable to parent company3,023,642,891.92
3,241,241,529.52
3,002,842,837.47
3,212,611,308.19
Minority interests45,774,598.56
-
46,654,771.50
-
Total owner’s equity3,069,417,490.48
3,241,241,529.52
3,049,497,608.97
3,212,611,308.19
Total liabilities and shareholder’s equity5,841,301,503.15
4,537,365,054.27
5,735,570,604.67
4,491,839,832.34
Legal Representative: Ji Zhijian Chief Financial Official: Wang Jinxiu Person in Charge of Accounting Organization: Li Sheng
INCOME STATEMENT
Prepared by Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd. January-June, 2022 Unit: RMB Yuan
Items
January-June, 2022 January-June, 2021Consolidation Parent Company
Consolidation Parent Company
I. Total sales1,291,858,908.71
468,001,628.25
1,094,285,620.97
406,481,436.30
II. Total operating cost1,304,025,021.32
486,496,189.37
1,125,502,134.17
430,343,974.93
Including: Operating cost1,131,915,209.09
407,577,362.51
950,404,769.26
350,403,193.45
Taxes and associate charges9,791,372.03
5,558,409.19
9,681,522.15
6,384,124.7
| 7 |
Selling and distribution expenses55,209,408.15
20,533,128.73
56,710,524.65
| 21,863,336.01 |
Administrative expenses70,074,155.71
34,892,044.21
71,726,497.78
| 33,484,241.78 |
R&D expenses31,564,520.91
14,040,048.85
30,738,151.60
| 13,801,193.69 |
Financial expense5,470,355.43
3,863,954.55
6,240,668.73
| 4,407,885.23 |
Including: interest expense7,533,477.17
4,561,734.35
8,685,937.28
| 6,705,229.51 |
interest income2,004,850.77
1,542,821.77
3,144,366.44
| 3,042,414.46 |
Add: Other income1,984,170.62
31,241.33
914,454.99
-
Gain/(loss) from investment83,743,763.15
88,227,124.82
29,386,783.
| 28,211,757.61 | 07 |
Including: income from investment onaffiliated enterprise and jointly enterprise
16,955,402.09
16,926,568.63
| 21,085,751.39 | 22,157,178.59 |
Gain/(loss) from change in fair value (loss as “-“)
-29,425,921.52
-29,425,921.52
-5,034,903.12
-
Credit impairment loss (loss as “-“) -
5,034,903.1212,091,879.71
-1,460,424.20
| 12,091,879.71 |
-
-
| 7,635,425.72 | 2,126,150.18 |
Assets impairment loss (loss as “-“)
-
-632,818.79
| 775,665.61 |
-
-
| 1,016,603.72 | 403,392.99 |
Gain/(loss) from asset disposal (loss as “-“)67,260.20
1,451.76
8,393.93
-
| 399.28 |
III. Operating profit31,335,614.52
38,277,333.61
-
-
| 15,768,839.23 | 2,040,601.13 |
Add: non-business income1,610,684.35
20,000.08
1,939,098.38
| 48.54 |
Less: non-business expense332,644.57
561,689.05
| 373,198.48 |
IV. Total profit32,613,654.30
38,297,333.69
-
-
| 14,391,429.90 | 2,413,751.07 |
Less: Income tax2,774,153.99
1,234,987.29
2,514,997.49
-
| 1,043,300.45 |
V. Net profit29,839,500.31
37,062,346.40
-
-
| 16,906,427.39 | 1,370,450.62 |
(I) Net profit from continuous operation29,839,500.31
37,062,346.40
-
-
| 16,906,427.39 | 1,370,450.62 |
(II)Net profit from discontinuing operation
Net profit attributable to parent company29,568,351.52
37,062,346.40
-
-
| 14,584,210.01 | 1,370,450.62 |
Minority shareholders’gains and losses271,148.79
-2,322,217.38
-
VI. After-tax net amount of other comprehensiveincomes
After-tax net amount of other comprehensive incomesattributable to owners of the Company
(I) Other comprehensive incomes that will not bereclassified into gains and losses
1. Changes in net liabilities or assets with a defined
benefit plan upon re-measurement
2. Enjoyable shares in other comprehensive inc
| omes in | |
| invests that cannot be reclassified into gains and losses | |
under the equity method
(II) Other comprehensive incomes that will bereclassified into gains and losses
1. Enjoyable shares in other comprehensive incomes in
invests that will be reclassified into gains and lossesunder the equity method
| 1. Enjoyable shares in other comprehensive incomes in | ||||||||
2. Gains and losses on fair value changes of
available-for-sale financial assets
3. Gains and losses on reclassifying held-to-maturity
investments into available-for-sale financial assets
4. Effective hedging gains and losses on cash flows
5. Foreign-currency financial statement translation
difference
、Others
……
After-tax net amount of other comprehensive incomesattributable to minority shareholders
VII Total comprehensive income29,839,500.31
37,062,346.40
-
-
| 16,906,427.39 | 1,370,450.62 |
Total comprehensive income attributable to parent
company
29,568,351.52
Total comprehensive income attributable to parent
37,062,346.40
-
-
| 14,584,210.01 | 1,370,450.62 |
Total comprehensive income attributable to minority
| Total comprehensive income attributable to minority |
shareholders
271,148.79
-2,322,217.38
-
VIII. Earnings per share
(I) basic earnings per share
0.035
-0.017
-
(II) diluted earnings per share
0.035
-0.017
-
Legal Representative: Ji Zhijian Chief Financial Official: Wang Jinxiu Person in Charge of Accounting Organization: Li Sheng
CASH FLOW STATEMENT
Prepared by Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd. January -June, 2022 Unit: RMB Yuan
Items
January -June, 2022 January -June, 2021Consolidation Parent Company
Consolidation Parent Company
I. Cash flows arising from operating activities:
Cash received from selling commodities and providing
labor services
1,261,666,720.62
Cash received from selling commodities and providing
352,345,258.81
| 829,930,587.89 | 363,144,362.91 |
Write-back of tax received11,560,593.20
4,006,659.69
-
| 13,785,959.06 |
Other cash received concerning operating activities27,127,455.59
5,384,314.18
| 43,810,533.99 | 10,124,431.16 |
Subtotal of cash inflow arising from operating activities
1,300,354,769.41
361,736,232.68
| 887,527,080.94 |
373,268,794.07Cash paid for purchasing commodities and receiving
labor service
1,193,219,986.59
Cash paid for purchasing commodities and receiving
496,371,451.85
| 611,357,308.87 | 250,713,151.99 |
Cash paid to/for staff and workers188,402,543.12
62,633,591.91
| 0,167,491.49 | 57,127,778.83 |
Taxes paid31,106,515.38
11,139,042.04
| 39,272,409.35 | 21,117,335.18 |
Other cash paid concerning operating activities77,032,061.17
32,464,131.37
| 85,617,707.51 | 24,604,890.78 |
Subtotal of cash outflow arising from operating activities
1,489,761,106.26
602,608,217.17
| 916,414,917.22 |
Net cash flows arising from operating activities-189,406,336.85
353,563,156.78
-240,871,984.49
-
| 28,887,836.28 | 19,705,637.29 |
II. Cash flows arising from investing activities:
Cash received from recovering investment300,000.00
300,000.00
3,262.34
Cash received from investment income76,499,887.00
76,474,242.00
| 40,106,533.49 | 40,106,533.49 |
Net cash received from disposal of fixed, intangible and
other long-term assets
361,191.28
Net cash received from disposal of fixed, intangible and
5,000.00
| 79,228.00 | 5,000.00 |
Net cash received from disposal of subsidiaries and other
units
5,605,792.62
Net cash received from disposal of subsidiaries and other
25,888,200.00
| 36,263,700.00 | 36,263,700.00 |
Other cash received concerning investing activities
Subtotal of cash inflow from investing activities82,766,870.90
102,667,442.00
| 76,452,723.83 | 76,375,233.49 |
Cash paid for purchasing fixed, intangible and other
long-term assets
12,416,614.10
Cash paid for purchasing fixed, intangible and other
9,320,136.74
| 4,948,265.12 | 3,291,284.99 |
Cash paid for investment
45,400,00
| 45,400,000.00 | 0.00 |
Net cash
| Net cash | paid for achievement | of subsidiaries and other |
business units
Other cash paid concerning investing activities
Subtotal of cash outflow from investing activities 12,416,614.10
9,320,136.74
| 50,348,265.12 | 48,691,284.99 |
Net cash flows arising from investing activities 70,350,256.80
93,347,305.26
| 26,104,458.71 | 27,683,948.50 |
III. Cash flows arising from financing activities
Cash received from absorbing investment
Including: Cash received from absorbing minority
shareholders' equity investment by subsidiaries
Including: Cash received from absorbing minority
Cash received from loans
240,850,000.00
229,000,000.00
| 235,180,000.00 | 207,000,000.00 |
Cash received from issuing bonds
Other cash received concerning financing activities 95,778,131.09
21,144,709.02
| 60,343,934.67 | 23,123,472.43 |
Subtotal of cash inflow from financing activities 336,628,131.09
250,144,709.02
| 295,523,934.67 | 230,123,472.43 |
Cash paid for settling debts 237,845,000.00
237,845,000.00
| 284,622,721.99 | 266,011,600.00 |
Cash paid for d
| Cash paid for d | ividend and profit distributing or interest |
paying
12,340,724.16
8,186,734.35
| 8,511,930.03 | 7,062,645.82 |
Including: dividends or profit paid by
| Including: dividends or profit paid by | subsidiaries to |
minority shareholders
Other cash paid concerning financing activities56,257,183.04
612,000.00
| 60,312,645.22 | 22,103,989.52 |
Subtotal of cash outflow from financing activities306,442,907.20
246,643,734.35
| 353,447,297.24 | 295,178,235.34 |
Net cash flows arising from financing activities30,185,223.89
3,500,974.67
-
-65,0
| 57,923,362.57 | 54,762.91 |
IV. Influence on cash due to fluctuation in exchange rate
1,614,217.38
-15.49
| 116,967.67 |
-
V. Net increase of cash and cash equivalents
-87,256,638.78
-144,023,720.05
-
-
| 60,589,772.47 | 17,665,625.29 |
Add: Balance of cash and cash e
| Add: Balance of cash and cash e | quivalents at the period |
-begin
438,969,337.87
369,932,989.19
| 314,978,460.49 | 185,202,268.28 |
VI. Balance of cash and cash equivalents at the
period–end
351,712,699.09
VI. Balance of cash and cash equivalents at the
225,909,269.14
| 254,388,688.02 | 167,536,642.99 |
Legal Representative: Ji Zhijian Chief Financial Official: Wang Jinxiu Person in Charge of Accounting Organization: Li Sheng
CONSOLIDATED STATEMENT OF CHANGES IN OWNERS’ EQUITYPrepared by Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd 2022.01-06 Unit: RMB YuanItems
2022.01-06Owners’ equity attributable to parent company
Minorityequity
Total of
| share capital | owners’ equity |
Capitalsuplus
Lessen:
treasury
stock
Othercomprehensive income
Specialpreparatio
n
Surplusreserve
Retained
profits
I. balance at
the end of last
year
the end of last843,212,507.00
720,215,866.78
| 843,212,507.00 | 2,178,681.73 | 809,471,199.64 | 627,764,582.32 |
46,654,771.50
3,049,497,608.97
1. Change of accounting
policy
1. Change of accounting
2. Correction of errors in
previous period
2. Correction of errors in
II. Balance at the beginnin
this year
g of843,212,507.00
720,215,866.78
| 843,212,507.00 | 2,178,681.73 | 809,471,199.64 | 627,764,582.32 |
46,654,771.50
3,049,497,608.97
III. Increase/ decrease of
amount in this year (“-
| III. Increase/ decrease of | |
| ” | |
means decrease)
| 336,172.00 | 21,136,226.45 |
-880,172.94 19,919,881.51
(I) Total comprehensive
incomes
| 29,568,351.52 |
271,148.79 29,839,500.31
(II) Capital increased and
reduced by owners
648,678.27
648,678.27
1. Common
by shareholders
shares increased
2. Capital increased by
holders of other equity
instruments
3. Amounts of share-based
payments recognized in
owners’ equity
4. Other
648,678.27
648,678.27
(III) Profit distribution
-8,432,125.07
-1,800,000.00
-10,232,125.07
| 1. Withdrawing surplus |
public reserve
(shareholders)
2. Distribution to all owners
-8,432,125.07
-1,800,000.00
-10,232,125.07
3. Others
(IV)
forward of owners’ equity
| Internal carrying | |
| 1. New increase of share | |
| capital from capital reserves | |
to share capital
2. Convert surplus reserves
losses
3. Surplus reserves make up
4. Others
(V) Specific reserve
1. Withdrawn for the period
2. Used in the period
(VI) Other
-336,172.00
-336,172.00
IV. Balance at the end of this
period
IV. Balance at the end of this843,212,507.00
| 843,212,507.00 | 719,879,694.78 |
2,178,681.73
| 809,471,199.64 |
648,900,808.77
45,774,598.56
3,069,417,490.48
Legal Representative: Ji Zhijian Chief Financial Official: Wang Jinxiu Person in Charge of Accounting Organization: Li Sheng
Items
2021.01-06Owners’ equity attributable to parent company
Minorityequity
Total ofowners’equity
share capital
Capitalsuplus
Lessen:
treasury
stock
| share capital | ||
Othercomprehensive income
Specialpreparatio
n
Surplusreserve
Retained
profits
I. balance at the end of last
year
I. balance at the end of last843,212,507.00
726,768,468.00
| 843,212,507.00 |
| 2,501,459.77 |
| 805,525,775.33 | 997,601,577.97 | 73,596,499.65 | 3,449,206,287.72 |
1. Change of accounting
policy
1. Change of accounting
2. Correct
previous period
ion of errors in
II. Balance at the beginning of
this year
II. Balance at the beginning of843,212,507.00
726,768,468.00
| 843,212,507.00 |
| 2,501,459.77 |
| 805,525,775.33 | 997,601,577.97 | 73,596,499.65 | 3,449,206,287.72 |
III. Increase/ decrease of
amount in this year (“-
| III. Increase/ decrease of | |
| ” | |
means decrease)
-
| 16,123,970.29 |
-
| 12,785,383.91 | 35,801,718.99 |
-
-
| 2,322,217.38 | 41,462,522.75 |
(I) Total comprehensive
incomes
-
-
| 14,584,210.01 | 2,322,217.38 |
-
(II) Capital increased and
16,906,427.39
reduced by owners
1. Common
by shareholders
shares increased
2. Capital increased by
holders of other
| equity |
instruments
3. Amounts of share-based
payments recognized in
owners’ equity
4. Other
(III) Profit distribution
12,785,3
-
| 83.91 | 21,217,508.98 |
-
-
| 8,432,125.07 |
public reserve
1. Withdrawing surplus
-
| 12,785,383.91 | 12,785,383.91 |
-
2. Distribution to all owners
(shareholders)
2. Distribution to all owners
-
| 8,432,125.07 |
-
3. Others
8,432,125.07
(IV) Inter
forward of owners’ equity
| nal carrying | |
| 1. New increase of share | |
| capital from capital reserves | |
to share capital
2. Convert surplus reserves
losses
3. Surplus reserves make up
4. Others
(V) Specific reserve
1. Withdrawn for the period
| 1,201,021.67 |
2. Used in the period
1,201,021.67
-
| 1,201,021.67 |
-
(VI) Other
1,201,021.67
-16,123,970.29
-
16,123,970.29IV. Balance at the end of this
period
IV. Balance at the end of this843,212,507.00
| 843,212,507.00 | 10,644,497.71 |
2,501,459.77
| 818,311,159.24 | 961,799,858.98 |
71,274,282.27
| 3,407,743,764.97 |
Legal Representative: Ji Zhijian Chief Financial Official: Wang Jinxiu Person in Charge of Accounting Organization: Li Sheng
STATEMENT OF CHANGES IN OWNERS’ EQUITY
Prepared by Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd 2022.01-06 Unit: RMB Yuan
Items
2022.01-06
Owners’ equity attributable to parent company
Total of owners’equityshare capital
Otherequityinstrument
Capitalsuplus
Lessen:
treasury
stock
Othercomprehensive
income
Specialpreparation
Surplusreserve
Retained profits
Retained profitsI. balance at the end of last
year
I. balance at the end of last843,212,507.00
| 843,212,507.00 |
| 755,146,592.54 |
1,216,581.06
809,471,199.64
803,564,427.95
3,212,611,308.19
1. Change of accounting
policy
1. Change of accounting
2. Correction of errors in
previous period
2. Correction of errors in
II. Balance at the beginning of
this year
II. Balance at the beginning of843,212,507.00
| 843,212,507.00 |
| 755,146,592.54 |
1,216,581.06
809,471,199.64
803,564,427.95
3,212,611,308.19
III. Increase/
decrease of
amount in this year (“-
| decrease of | |
| ” | |
means decrease)
28,630,221.33
28,630,221.33
(I) Total comprehensive
incomes
37,062,346.40
37,062,346.40
(II) Capital increased and
reduced by owners
1. Common
by shareholders
shares increased
2. Capital increased by
holders of other
| equity |
instruments
3. Amounts of share-based
payments recognized in
owners’ equity
4. Other
(III) Profit distribution
-8,432,125.07
-8,432,125.07
1. Withdrawin
public reserve
g surplus
(shareholders)
2. Distribution to all owners
-
-
| 8,432,125.07 | 8,432,125.07 |
3. Others
(IV)
forward of owners’ equity
| Internal carrying | |
capital from capit
| 1. New increase of share | |
| al reserves | |
to share capital
2. Convert surplus reserves
losses
3. Surplus reserves make up
4. Others
(V) Specific reserve
1. Withdrawn for the period
641,750.97
641,750.97
2. Used in the period
-641,750.97
-641,750.97
(VI) Other
period
IV. Balance at the end of this843,212,507.00
| 843,212,507.00 |
755,146,592.54
1,216,581.060
809,471,199.64
832,194,649.28
3,241,241,529.52
Legal Representative: Ji Zhijian Chief Financial Official: Wang Jinxiu Person in Charge of Accounting Organization: Li Sheng
Items
2021.01-06
Owners’ equity attributable to parent company
Total of owners’
equityshare capital
Otherequityinstrument
Capitalsuplus
Lessen:
treasury
stock
Othercomprehensive
income
Specialpreparation
Surplusreserve
Retained
profits
I. balance at the end of last
year
I. balance at the end of last843,212,507.00
| 843,212,507.00 |
| 771,270,562.83 |
| 1,539,359.10 |
| 805,525,775.33 | 990,593,941.49 | 3,412,142,145.75 |
1. Change of accounting
policy
1. Change of accounting
2. Correction of errors in
previous period
2. Correction of errors in
II. Balance at the beginning of
this year
II. Balance at the beginning of843,212,507.00
| 843,212,507.00 |
| 771,270,562.83 |
| 1,539,359.10 |
| 805,525,775.33 | 990,593,941.49 | 3,412,142,145.75 |
III. Increase/ decrease of
amount in this year (“-
| III. Increase/ decrease of | |
| ” | |
means decrease)
-16,123,970.29
-
| 12,785,383.91 | 22,587,959.60 |
-25,926,545.98
(I) Total comprehensive
incomes
-
-
| 1,370,450.62 | 1,370,450.62 |
(II) Capital increased and
reduced by owners
1. Common
by shareholders
shares increased
2. Capital increased by
holders of other
| equity |
instruments
3. Amounts of share-based
payments recognized in
owners’ equity
4. Other
(III) Profit distribution
-
| 12,785,383.91 | 21,217,508.98 |
-8,432,1
| 25.07 | ||
| 1. Withdrawing surplus |
public reserve
-
| 12,785,383.91 | 12,785,383.91 |
-
2. Distribution to all owners
(shareholders)
2. Distribution to all owners
-
-
| 8,432,125.07 | 8,432,125.07 |
3. Others
(IV)
forward of owners’ equity
| Internal carrying | |
capital
| 1. New increase of share | |
| from capital reserves | |
to share capital
2. Convert surplus reserves
3. Surplu
losses
s reserves make up
4. Others
(V) Specific reserve
1. Withdrawn for the period
| 1,201,021.67 |
2. Used in the period
1,201,021.67
-1,201,021.67
-
(VI) Other
1,201,021.67
-16,123,970.29
-
| 16,123,970.29 | ||
| IV. Balance at the end of this |
period
| 843,212,507.00 |
755,146,592.54
1,539,359.10
818,311,159.24
968,005,981.89
| 3,386,215,599.77 |
Legal Representative: Ji Zhijian Chief Financial Official: Wang Jinxiu Person in Charge of Accounting Organization: Li Sheng
II. Accounting statementIII. General Information
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd (the “Company”) was reorganizedand reformed from main part of former Dalian Refrigeration Factory. On December 8, 1993, theCompany went to the public as a listed Company at Shenzhen Stock Exchange Market. OnMarch 20, 1998, the company successfully went to the public at B share market and listed atShenzhen Stock Exchange Market with total share capital of RMB350,014,975Yuan.According to the 13
th
meeting of the 6
th
generation of board, extraordinary general meeting for2015 fiscal year and ' Restricted share incentive plan (draft)' , the Company planned to introduceA ordinary shares to incentive objectives, which was 10,150,000 number of shares would begranted to 41 share incentive objectives at granted price of RMB5.56Yuan per share. Up to March
th
,2015, the Company received new added share capital of RMB10,150,000Yuan and the sharecapital had been verified by DaHua Certified Public Accountants, and had been issued the capitalverification report Dahuayanzi [2015]000086 on March12
th
, 2015.The general meeting for 2015 fiscal year held on 21st April 2016 approved the profit distributionpolicy for the year of 2015, which agrees the profit distribution based on the total 360,164,975number of shares as share capital, paid share dividend of 5 common shares for every 10 sharesthrough capital reserve. The policy stated above was fully implemented on 5th May 2016, and theregistered capital was altered to 540,247,462.00Yuan.The 17
th
meeting of the 6
th
generation of board was held on 4
th
June 2015 and the 2
nd
interimshareholders’ meeting was held on 24th June 2015, meeting deliberated and passed the proposalof non-public offering of ‘A shares’. China’s Securities Regulatory Commission issued SFClicense [2015]3137 on 30
th
December, 2015, approving that new non-public offering cannotexceeded 38,821,954 number of shares. The company implemented the post meeting proceduresfor China’s Securities Regulatory Commission, which is regarding adjustment of bottom price andthe number of the shares issued after the implementation of profit distribution policy of 2015 inMay, 2016, and accordingly revised the upper limit of non-public offering of share to58,645,096number of new ‘A shares’. The company issued the non-public offering of 58,645,096 number of‘A shares’ to 7 investors, and as a result, the total number of shares of the company is changed to598,892,558 shares, and the par value is 1yuan per share and the total share capital is598,892,558.00Yuan. The share capital stated above has been verified by DaHua Certified PublicAccountants, and has been issued the capital verification report Dahuayanzi [2016]000457 on 31stMay 2016.According to the ‘Restricted Share Incentive Plan(draft) of Dalian Refrigeration CompanyLimited for the year of 2016’ and the ‘Proposal regarding the shareholders’ meeting authorized theboard of directors to implement the Restricted Share Incentive Plan’ approved on the
rd
provisional general meeting held on 13th September 2016, the 9
th
meeting of the 7
thgenerationof board deliberated and passed the ‘Proposal about granting the restricted shares to incentivetargets’ on September 20
th, 2016 and set 20
th
September 2016 as share granted date, and granted
12,884,000 number of restricted shares to 188 incentive targets at granted price of 5.62Yuan pershare. By 22
nd
November, 2016, the company has actually received the newly subscribedregistered share capital of 12,884,000Yuan subscribed by incentive targets. The share capitalstated above has been verified by DaHua Certified Public Accountants, and has been issued thecapital verification report Dahuayanzi [2016]001138 on 23
rd
November, 2016.On May 20
th, 2017, the general meeting for 2016 fiscal year was held and profit appropriationscheme for 2016 FY was approved, which was every 10 shares will be increased by 4 sharesthrough capital reserve based on the total 611,776,558 number of shares. After the profitappropriation scheme, the registered capital was changed to RMB856,478,181.00Yuan.On December 18, 2017, the Company held the third extraordinary shareholders’ meeting of 2017which reviewed and approved the Proposal on Repurchasing and Cancelling Part RestrictedStocks of the 2016 Restricted Stock Incentive Plan”. On March 8, 2018, after the completion ofrepurchase and cancellation, the Company implemented the corresponding capital reductionprocedures according to law, and the registered capital of the Company was changed from856,487,181 Yuan to 855,908,981 Yuan.On May 4, 2018, the Company held the 21
st
meeting of the seventh board of directors whichreviewed and approved the Proposal on Repurchasing and Cancelling Party Restricted Stocks ofthe 2015 Restricted Stock Incentive Plan. On June 29, 2018, after the completion of repurchaseand cancellation, the Company implemented the corresponding capital reduction proceduresaccording to law, and the registered capital of the Company was changed from 855,908,981 Yuanto 855,434,087 Yuan.On January 17,2019, the Company held the first extraordinary shareholders’ meeting of 2019which reviewed and approved the Proposal on terminating the implementation of 2016 RestrictedStock Incentive Plan of the Company and logouting the restricted stock. On March 4,2019, theCompany has completed the capital reduction process, and the registered capital of the Companywas changed from 855,434,087 Yuan to 843,212,507 Yuan.On December 20
th
, 2019, the Company held the 7th meeting of the 8th Board of Directors andapproved to change the Company’s name from Dalian Refrigeration Company Limited toBingshan Refrigeration & Heat Transfer Technologies Co., Ltd.The old address of the Company’s registered office as same as head office is No.888 Xinan Road,Shahekou District, Dalian, China. In 2017, the Company relocated to new factory and changed itsaddress to No.16 Liaohe East RD, Dalian Economic&Technology Development Zone(‘DDZ’),Dalian China as same as HQ’s address. The parent company of the Company is Dalian BingshanGroup Co., Ltd., and there is no ultimate controller regulated by the relevant law, regulations andrules.The Company is in industrial manufacturing sector, mainly engaged in industrial refrigeration,refrigerated and frozen food storage, and manufacture and installation of central air-conditioningand refrigeration equipment. The scope of business includes research and development, design,
manufacture, sale, lease, installation and repair of refrigeration and heat equipment, accessories,spare parts, and energy-saving and environmental protection products; Technical services,technical consultation, technical promotion; Design, construction, installation repair andmaintenance of complete sets of refrigeration and air conditioning projects, mechanical andelectrical installation projects, steel structure projects, anti-corrosion and heat preservation works;Rental of premises; Transport of ordinary goods; Property management; Low temperature storage;Import and export of goods and technologies. (With the exception of projects subject to approvalaccording to law, independently carry out business activities according to law with the businesslicense).During this reporting period, entities within the consolidation scope has change comparing to lastyear, decreasing 2 entities (Bingshan Technology Services (Dalian) Co., Ltd. and NingboBingshan Refrigeration and Air Conditioning Engineering Co., Ltd.).IV. Financial Statements Preparation Basis
（1） Preparing basis
The Company’s financial statements are prepared on the basis of going concern assumption,according to the actual occurred transactions and events and in accordance with ‘AccountingStandards for Business Enterprises’ and relevant regulations, and also based on the note V“Significant Accounting Policies, Accounting Estimates”.
（2） Going concern
The Company has the capacity to continually operate within 12 months at least since the end ofreport period, and hasn‘t the major issues impacting on the sustainable operation ability.V. Significant Accounting Policies and Accounting Estimates
1. Declaration for compliance with accounting standards for business enterprisesThe financial statements are prepared by the Group according to the requirements of AccountingStandard for Business Enterprise, and reflect the relative information for the financial position,operating performance, cash flow of the Group truly and fully.
2. Accounting period
The Group adopts the Gregorian calendar year as accounting period from Jan 1 to Dec 31.
3. Operating cycle
Normal operating cycle refers to the duration starting from purchasing the assets formanufacturing up to cash or cash equivalent realization. The group sets twelve months for oneoperating cycle and as the liquidity criterion for assets and liability.
4. Functional currency
The Group adopts RMB as functional currency.
5. Accounting for business combination under same control and not under same control
As an acquirer, the assets and liabilities that The Group obtained in a business combination underthe same control should be measured on the basis of their carrying amount in the consolidatedfinancial statements on the combining date. As for the balance between the carrying amount of thenet assets obtained by the combining party and the carrying amount of the consideration paid by it,the capital surplus shall be adjusted. If the capital surplus is not sufficient to be offset, the retainedearnings shall be adjusted.For a business combination not under same control, the asset, liability and contingent liabilityobtained from the acquirer shall be measured at the fair value on the acquisition date. Thecombination cost shall be the fair value, on the acquisition date, of the assets paid, the liabilitiesincurred or assumed and equity securities issued by the acquirer in exchange for the control of theacquire, and sum of all direct expenses(if the combination is achieved in stages, the combinationcost shall be the sum of individual transaction). The difference when combination cost exceedsproportionate share of the fair value of identifiable net assets of acquire should be recognized asgoodwill. If the combination cost is less than proportionate share of the fair value of identifiablenet assets of acquiree, firstly, fair value of identifiable asset, liability or contingent liability shallbe reviewed, 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 recognized asnon-operating income.
6. Method of preparation of consolidated financial statements
All subsidiaries controlled by the Group and structured entities are within the consolidation scope.If subsidiaries adopt different accounting policy or have different accounting period from theparent company, appropriated adjustments shall be made in accordance with the Group policy inpreparation 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 the subsidiary’sequity not belonging to the parent, profit, loss for the current period, portion of othercomprehensive 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 to minorityinterest” and “total comprehensive income attributed to minority interest” title.If a subsidiary is acquired under common control, its operation results and cash flow shall beconsolidated since the beginning of the consolidation period. When preparing the comparativeconsolidated financial statements, adjustments shall be made to relevant items of comparativefigures as regarded that reporting entity established through consolidation has been always theresince the point when the ultimate controlling party starts to have the control.If a business consolidation under common control is finally achieved in stages, consolidationaccounting method shall be disclosed additionally for the period in which the control is obtained.
For example, if a business consolidation under common control is finally achieved in stages, whenpreparing the consolidated financial statements, adjustments shall be made for the currentconsolidation status as if consolidation has always been there since the point when the ultimatecontrolling party starts to control. In preparation of comparative figures, asset and liability of theacquiree shall be consolidated into the Group’s comparative financial statements, but to the extentno earlier than the point when the Group and acquiree are both under ultimate control and relevantitems under equity in comparative financial statements shall be adjusted for net asset increased incombination. To avoid the duplicated computation of net asset of acquiree, for long-term equityinvestment held by the Group before the consolidation, relevant profit and loss, othercomprehensive income and movement in other net asset, recognized for the period between thecombination date and later date when original shareholding is obtained and when the Group andthe acquiree are under common control of same ultimate controlling party, shall be respectivelyused for writing down the opening balance of retained earnings of comparative financialstatements and profit and loss for the current period.If a subsidiary is acquired not under common control, its operation results and cash flow shall beconsolidated since the beginning of the consolidation period. In preparation of the consolidatedfinancial statements, adjustments shall be made to subsidiary’s financial statements based on thefair value of its all identifiable assets, liability or contingent liability on the acquisition date.If a business consolidation under non-common control is finally achieved in stages, consolidationaccounting method shall be disclosed additionally for the period in which the control is obtained.For example, if a business consolidation not under common control is finally achieved in stages,when preparing the consolidated financial statements, the acquirer shall remeasure its previouslyheld equity interest in the acquiree at its acquisition-date fair value and recognize the resultinggain or 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 period beforethe acquisition, and changes in the value of its other equity other than net profit or loss, othercomprehensive income and profit appropriation shall be transferred to investment gain or lossfor the period in which the acquisition incurs, excluding the other comprehensive income fromthe movement on the remeasurement of ne asset or liability of defined benefit plan.When the Group partially disposes of the long –term equity investment in subsidiary withoutlosing the control over it, in the consolidated financial statements, the difference, betweendisposals price and respective disposed value of share of net assets in the subsidiary since theacquisition date or combination date, shall be adjusted for capital surplus or share premium, noenough capital surplus, then adjusted for retained earnings.When the Group partially disposes of the long –term equity investment in subsidiary and lose thecontrol over it, in preparation of consolidated financial statements, remaining share of interest inthe subsidiary shall be remeasured on the date of losing control. Sum of the share disposalconsideration and fair value of remaining portion of shareholding minus the share of the net assetsin the subsidiary held based on the previous shareholding percentage since the acquisition date or
combination date, the balance of above is recognized as investment gain/loss for the period andgoodwill shall be written off accordingly. Other comprehensive income relevant to shareinvestment in subsidiary shall be transferred to investment gain /loss for the period on the date oflosing control.When the Group partially disposes of the long –term equity investment in subsidiary and lose thecontrol over it by stages, if all disposing transactions are bundled, each individual transaction shallbe seen as a transaction of disposal of a subsidiary by losing control. The difference between thedisposal price and the share of the net assets in the subsidiary held before the date of losingcontrol, shall be recognize as other comprehensive income until the date of losing control where itis transferred into investment gain/ loss for the current period.
7. Joint arrangement classification and joint operation accounting
The Group’s joint arrangement includes joint operation and joint venture. For joint operation, theGroup as a joint operator shall recognize its own assets and its share of any assets held jointly, itsliabilities and its share of any liabilities incurred jointly, its revenue from the sale of its share ofthe output arising from the joint operation, its share of the revenue from the sale of the output bythe joint operation; and its expenses, including its share of any expenses incurred jointly. When anentity enters into a transaction with a joint operation in which it is a joint operator, such as a saleor contribution of assets, it is conducting the transaction with the other parties to the jointoperation and, as such, the joint operator shall recognize gains and losses resulting from such atransaction only to the extent of the other parties’ interests in the joint operation.
8. Cash and cash equivalent
The cash listed on the cash flow statements of the Group refers to cash on hand and bank deposit.The cash equivalents refer to short-term (normally with original maturities of three months or less)and liquid investments which are readily convertible to known amounts of cash and subject to aninsignificant 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 Bank ofChina (“PBOC”) on the 1
st
day of the month when the transactions incurred. Monetary assets andliabilities in foreign currencies are translated into RMB at the exchange rate prevailing at thebalance sheet day. Exchange differences arising from the settlement of monetary items are chargedas in profit or loss for the period. Exchange differences of specific borrowings related to theacquisition or construction of a fixed asset should be capitalized as occurred, before the relevantfixed asset being acquired or constructed is ready for its intended uses.
(2) Translation of foreign currency financial statements
The asset and liability items in the foreign currency balance sheet should be translated at a spotexchange rate at the balance sheet date. Among the owner’s equity items except “undistributed
profit”, others should be translated at the spot exchange rate when they are incurred. The incomeand expense should be translated at spot exchange rate when the transaction incurs. Translationdifference of foreign currency financial statements should be presented separately under the othercomprehensive income title. Foreign currency cash flows are translated at the spot exchange rateon the day when the cash flows incur. The amounts resulted from change of exchange rate arepresented separately in the cash flow statement.
10. Financial assets and financial liabilities
The company shall recognize a financial asset or a financial liability when the company becomesparty to the contractual provisions of the instrument.
(1) Financial assets
1) Classification, recognition and measurement
The company shall classify financial assets as measured at amortized cost, fair value through othercomprehensive income or fair value through profit or loss on the basis of both the company’sbusiness model for managing the financial assets and the contractual cash flow characteristics ofthe financial asset.A financial asset shall be measured at amortized cost if both of the following conditions are met:
①the financial asset is held within a business model whose objective is to hold financial assets inorder to collect contractual cash flows;②the contractual terms of the financial asset give rise onspecified dates to cash flows that are solely payments of principal and interest on the principalamount outstanding. At initial recognition, the company shall measure the financial asset at its fairvalue and take any transaction costs that are directly attributable to the financial asset into account.After initial recognition, the company shall measure the financial asset at amortized cost. A gain orloss on a financial asset that is measured at amortized cost and is not a hedged item shall berecognized in profit or loss when the financial asset is derecognized, impaired, involved in foreignexchange or amortized for any difference arising between the initial recognized amount and dueamount by applying effective interest method.A financial asset shall be measured at fair value through other comprehensive income if both ofthe following conditions are met: ①the financial asset is held within a business model whoseobjective is achieved by both collecting contractual cash flows and selling financial assets and
②the contractual terms of the financial asset give rise on specified dates to cash flows that aresolely payments of principal and interest on the principal amount outstanding. At initialrecognition, the company shall measure this financial asset at its fair value and take anytransaction costs that are directly attributable to the financial asset into account. A gain or loss on afinancial asset that is measured at fair value through other comprehensive income and is not ahedged item shall be recognized in other comprehensive income apart from a gain or loss on creditloss, foreign exchange and interest of the financial asset calculated by effective interest method.Accumulated gain or loss previously in the other comprehensive income shall be out of it andaccounted in the profit or loss account when the financial asset is derecognized.
The company recognized interest revenue based on effective interest method. Interest revenueshall be calculated by applying the effective interest rate to the gross carrying amount of afinancial asset, except for: ①purchased or originated credit-impaired financial assets. For thosefinancial assets, the company shall apply the credit-adjusted effective interest rate to the amortizedcost of the financial asset from initial recognition. ②financial assets that are not purchased ororiginated credit-impaired financial assets but subsequently have become credit-impaired financialassets. For those financial assets, the company shall apply the effective interest rate to theamortized cost of the financial asset in subsequent reporting periods.The company designates an investment as fair value measured through other comprehensiveincome if an equity instrument held is not for trading. Once the decision is made, it is anirrevocable election. At initial recognition, the company shall measure the equity instrumentinvestment not for trading at its fair value and take any transaction costs that are directlyattributable to the financial asset into account. Any other gain or loss (including foreign exchangegain or loss) shall be accounted in other comprehensive income and shall not be subsequentlytransferred to profit or loss, unless the dividend received is accounted in profit or loss( excludingthe recovered investment cost). Accumulated gain or loss previously in the other comprehensiveincome shall be out of it and into retained earnings when the financial asset is derecognized.Apart from classified as the amortized cost financial assets and as fair value through othercomprehensive income financial assets, a financial asset is classified as fair value through profit orloss. At initial recognition, the company shall measure this financial asset at its fair value and takeany transaction costs that are directly attributable to the financial asset into account.A financial asset shall be classified as fair value through profit or loss if it is recognized contingentconsideration through business combination, which is not under same control situation.
2) Recognition and measurement of transfer of financial assets
A financial asset is derecognized when any one of the following conditions is satisfied: ①therights to receive cash flows from the asset is terminated, ②the financial asset has been transferredand the company transfers substantially all risks and rewards relating to the financial assets to thetransferee, ③the financial asset has been transferred to the transferee, the company has given upits control of the financial asset although the company neither transfers nor retains all risks andrewards of the financial asset.In the case where the financial asset as a whole qualifies for the derecognition conditions, thedifference between the carrying value of transferred financial asset and the sum of theconsideration received for transfer and the accumulated amount of changes in fair value in respectof the amount of partial derecognition (the contractual terms of the financial asset give rise onspecified dates to cash flows that are solely payments of principal and interest on the principalamount outstanding) , that was previously recorded under other comprehensive income istransferred into profit or loss for the period.In the case where only part of the financial asset qualifies for derecognition, the carrying amount
of financial asset being transferred is allocated between the portions that to be derecognised andthe portion that continued to be recognised according to their relative fair value. The differencebetween the amount of consideration received for the transfer and the accumulated amount ofchanges in fair value that was previously recorded in other comprehensive income for the assetpartially qualified for derecognition (the contractual terms of the financial asset give rise onspecified dates to cash flows that are solely payments of principal and interest on the principalamount outstanding) and the above-mentioned allocated carrying amount is charged to profit orloss for the period.
(2) Financial liabilities
1) Classification, basis for recognition and measurement
Financial liabilities of the company are classified at initial recognition as “financial liabilities atfair value through profit or loss” and “other financial liabilities” on initial recognition.Financial liabilities at fair value through profit or loss include financial liabilities held for tradingand those designated as fair value through profit or loss on initial recognition. They aresubsequently measured at fair value. The net gain or loss arising from changes in fair value,dividends and interest paid related to such financial liabilities are recorded in profit or loss for theperiod in which they are incurred.Other financial liabilities shall be subsequently measured at amortized cost by applying effectiveinterest method. The company shall classify a financial liability as a liability measured atamortized cost except the followings: ①financial liability measured at fair value through profit orloss including tradable financial liability (derivative instrument of financial liability included) anddesignated as financial liability measured at fair value through profit or loss ② financial assetstransfers that do not qualify for derecognition or financial liability is formed from continuinginvolvement in transferred assets ③ financial guarantee contract not in the above category of ①or
② and loan commitment which is not in the category ① at the below the market loan rate.The company shall account the financial liability as it measured at fair value through profit or lossif the financial liability is formed by contingent consideration recognized by the buyer throughbusiness combination that is not under common control.
2) Financial liability derecognition
A financial liability is derecognized when the underlying present obligations or part of it aredischarged. Existing financial liability shall be derecognized and new financial liability shall berecognized when the company signs the agreement with creditor to undertake the new financialliability in replacement of existing financial liability, and the terms of agreement are different insubstance. Any significant amendment to the agreement as a whole or part o it is made, then theexisting liabilities or part of it shall be derecognized and financial liability after terms amendmentshall be recognized as a new financial liability. The difference between the carrying amount of thefinancial liability derecognized and the consideration paid is recognized in profit or loss for theperiod.
(3) Fair value measurement of financial asset and financial liability
The company uses the price in the primary market for financial assets and liability fair valuemeasurement, if no primary market exists, the price in the most advantageous market shall be usedfor fair value measurement and applicable valuation techniques which enough data is available forand supported by other information shall be adopted. Input for fair value measurement has 3 levels:
level 1 input is the unadjusted quoted price for identical asset or liability available at the activemarket on the measurement date; level 2 input is the directly or indirectly observable input forrelevant asset or liability apart from level 1 input; level 3 input is the unobservable input forrelevant asset or liability.
(4) Financial asset and financial liability offset
Financial asset and financial liability shall be presented in the balance sheet separately and cannotbe offset, unless the following conditions are all met: ①the company has the legal right torecognized offset amount and the right is enforceable. ②the company plans to receive or a legalobligation to pay cash at net amount.
(5) Distinguishment between financial liability and equity instrument and accountingfinancial liability and equity instrument shall be distinguished in accordance with the followingstandards: ① if the company cannot unconditionally avoid paying cash or financial asset to fulfil acontractual obligation, the contractual obligation is qualified or financial liability. For certainfinancial instrument, although there are no clear terms and conditions to include obligation ofpaying cash or other financial liability, contractual obligation may indirectly be formed throughother terms and conditions. ② the company’s own equity instrument shall also be consideredwhether it is the substitute of cash, financial asset or it is the remaining equity, after the issuerdeducts liability, enjoyed by the equity holder , if it must or can be used to settle a financial asset.If the former, the instrument is a financial liability of the issuer, otherwise it is an equityinstrument of the issuer. In certain circumstances, financial instrument contract is classified asfinancial liability, if financial instrument contract specifies the company must or can use its ownequity to settle the financial instrument, the contractual amount of right or obligation equals to thatof the numbers of own equity instrument available or to be paid multiplied by fair value whensettling, nevertheless the amount is fixed, or varied partially or fully based on the its own equity’smarket 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, thecompany takes all terms and conditions agreed by the group member and instrument holder intoconsideration. If the group due to the instrument, as a whole, bears settlement obligation bypaying cash, other financial asset or other means resulted in financial liability, the instrument shallbe classified as financial liability.If a financial instrument or its component is financial liability, any gain or loss, interest, dividend,and any gain or loss from buy back or refinancing shall be accounted in profit or loss.If a financial instrument or its component is an equity instrument, when it was issued(including
refinancing), bought back, sold or withdrawn, any change shall be regarded as equity change andno fair value change shall be recognized.
(6) Financial asset impairment
Based on expected credit loss, a financial asset measured at amortized cost, a debt instrumentinvestment measured at FVTOCI and a contractual asset shall all be subject to impairmentaccounting and be recognized for impairment loss allowance if any impairment.Expected credit loss is the weighted average of credit losses with the respective risks of a defaultoccurring as the weights. A credit loss herein is referred to as the present value, at originaleffective rate, of the difference between the contractual cash flows that are due to the companyunder the contract; and the cash flows that the company expects to receive, that's the present valueof the total cash shortage. A financial asset shall be the present value, at credit adjusted effectiverate, if it is a purchased or originated credit -impaired asset.The company adopts simplified approach for trade receivables, contract assets that do not containa significant financing component, and shall always measure the loss allowance at an amountequal to lifetime expected credit losses.Impairment requirements is to assess whether credit risk has been significantly increased sinceinitial recognition at each reporting date, if there have been significant increases in credit risk, thecompany shall measure the loss allowance for a financial instrument at an amount equal to thelifetime expected credit losses, at the reporting date, if the credit risk on a financial instrument hasnot increased significantly since initial recognition, the company shall measure the loss allowancefor that financial instrument at an amount equal to 12?month expected credit losses.When assessing expected credit losses, the company considers all reasonable and supportableinformation, including that which is forward-looking.The company shall measure expected credit losses of a financial instrument in a way that reflects:
an unbiased and probability?weighted amount that is determined by evaluating a range of possibleoutcomes; The time value of money; and reasonable and supportable information that is availablewithout undue cost or effort at the reporting date about past events, current conditions andforecasts of future economic conditions.The company directly lowers the book value of the financial asset when contractual cash flowcannot be fully or partially recollected within rational expectation any longer.The company also assesses the expected credit loss of financial asset measured at amortized costbased on aging portfolio, other than pastdue credit loss assessment based on individual item.
11. Notes receivable
（1） Recognition of provision for impairment
On the basis of expected credit loss, the company always measures the loss allowance at anamount equal to lifetime expected credit losses for notes receivables which do not contain a
significant financing component and are generated in accordance with Revenue Standard- No 14of Accounting Standard for Business Enterprise.
(2) Expected credit loss risk portfolio assessment method based on portfolioThe company separately assesses the credit risk of financial assets which have significantlydifferent the credit risk, such as receivable with dispute or involved in litigation and arbitration;There are clear signs indicating the debtor is unlikely to fulfill the repayment obligations of thereceivables, etc.Apart from the financial asset to be assessed for credit risk separately, the company divides thefinancial assets into different group based on common characteristics of risk and assesses the riskbased on the portfolio.Based on the acceptor credit risk of notes receivable as the common risk characteristics, it isdivided into different categories and determined for expected credit loss accounting estimatepolicy.Portfolio category Expected credit loss accounting estimate policyBank acceptance note portfolio
Lower credit risk assessed by the managementCommercial acceptance noteportfolio
Same as receivables and provided for excepted credit loss
allowanceReferring to the experience of historical credit losses, the company prepares a table comparing theaging of notes receivable with the fixed reserve rate to calculate the expected credit losses on thisbasis.The Company prepares the comparison table between receivables aging and expected credit lossrate within lifetime and work out the expected credit loss by reference to historical credit lossexperience in combination with current situation and future forecast of economy condition.The company shall measure expected credit losses of a financial instrument in a way that reflects:
an unbiased and probability?weighted amount that is determined by evaluating a range of possibleoutcomes; The time value of money; and reasonable and supportable information that is availablewithout undue cost or effort at the reporting date about past events, current conditions andforecasts of future economic conditions.The company prepares the comparison table between receivables aging and fixed provision rateand work out the expected credit loss by reference to historical credit loss experience.On the balance sheet date, expected credit loss of receivable shall be calculated. If the expectedcredit loss is larger than the book value of the provision of receivable impairment, the differenceshall be recognized as receivable impairment loss, debit to “credit impairment loss”, credit to“provision for bad debt”. Alternatively, the difference is recognized as impairment gain andreversed journal entry shall be made.Actually incurred credit loss shall be debit to “provision for bad debt”, credit to “notes receivable”,based on the approved amount to be written off as it is assured as uncollectible receivable. If the
amount to be written off is bigger than the provision for impairment loss, the difference is debit to“credit impairment loss”.
12. Accounts receivable
(1) Recognition of provision for impairment
On the basis of expected credit loss, the company always measures the loss allowance at anamount equal to lifetime expected credit losses for trade receivables which do not contain asignificant financing component and are generated in accordance with Revenue Standard- No 14of Accounting Standard for Business Enterprise. For trade receivables which do contain asignificant financing component, the company chooses as its accounting policy to measure theloss allowance at an amount equal to lifetime expected credit losses.
(2) Expected credit loss risk portfolio assessment method based on portfolioThe company separately assesses the credit risk of financial assets which have significantlydifferent the credit risk, such as receivable with dispute or involved in litigation and arbitration;There are clear signs indicating the debtor is unlikely to fulfill the repayment obligations of thereceivables, etc.Apart from the financial asset to be assessed for credit risk separately, the company divides thefinancial assets into different group based on common characteristics of risk and assesses the riskbased on the portfolio.Apart from the trade receivables and other receivables to be assessed for credit risk separately,based on the counterparty as the common risk characteristics, it is divided into different categoriesand determined for expected credit loss accounting estimate policy.Portfolio category Expected credit loss accounting estimate policyRelated parties portfolio within theconsolidation
Lower credit risk assessed by the managementOther related parties and non-relatedparties portfolio
Provided for excepted credit loss allowanceReferring to the experience of historical credit losses, the company prepares a table comparing theaging of accounts receivable with the fixed reserve rate to calculate the expected credit losses onthis basis.On the balance sheet date, expected credit loss of receivable shall be calculated. If the expectedcredit loss is larger than the book value of the provision of receivable impairment, the differenceshall be recognized as receivable impairment loss, debit to “credit impairment loss”, credit to“provision for bad debt”. Alternatively, the difference is recognized as impairment gain andreversed journal entry shall be made.Actually incurred credit loss shall be debit to “provision for bad debt”, credit to “receivable”,based on the approved amount to be written off as it is assured as uncollectible receivable. If the
amount to be written off is bigger than the provision for impairment loss, the difference is debit to“credit impairment loss”
13. Receivables financing
In the process of managing enterprise liquidity, the Company carries out endorsement transfer ordiscount of most of the notes receivable before maturity, and terminates the confirmation of thediscounted or endorsed notes receivable based on the fact that the Company has transferred almostall the risks and rewards of the relevant notes receivable to the relevant counterparty. Thecompany's business model of managing notes receivable is aimed at both collecting the contractcash flow and selling the financial asset, so it is classified as the financial asset measured at fairvalue and its changes are included in other comprehensive income, and listed in the receivablesfinancing.
14.Other receivable
(1) Recognition of provision for impairment
On the basis of expected credit loss, the company always measures the loss allowance at anamount equal to lifetime expected credit losses for trade receivables which do not contain asignificant financing component and are generated in accordance with Revenue Standard- No 14of Accounting Standard for Business Enterprise. For trade receivables which do contain asignificant financing component, the company chooses as its accounting policy to measure theloss allowance at an amount equal to lifetime expected credit losses.
(2) Expected credit loss risk portfolio assessment method based on portfolioThe company separately assesses the credit risk of financial assets which have significantlydifferent the credit risk, such as receivable with dispute or involved in litigation and arbitration;There are clear signs indicating the debtor is unlikely to fulfill the repayment obligations of thereceivables, etc.Apart from the financial asset to be assessed for credit risk separately, the company divides thefinancial assets into different group based on common characteristics of risk and assesses the riskbased on the portfolio.Apart from the trade receivables and other receivables to be assessed for credit risk separately,based on the counterparty as the common risk characteristics, it is divided into different categoriesand determined for expected credit loss accounting estimate policy.Portfolio category Expected credit loss accounting estimate policyRelated parties portfolio within theconsolidation
Lower credit risk assessed by the managementOther related parties and non-relatedparties portfolio
Same as receivables and provided for excepted credit loss
allowance
Referring to the experience of historical credit losses, the company prepares a table comparing theaging of other receivable with the fixed reserve rate to calculate the expected credit losses onthis basis.The company prepares the comparison table between receivables aging and expected credit lossrate within lifetime and work out the expected credit loss by reference to historical credit lossexperience in combination with current situation and future forecast of economy condition.The company shall measure expected credit losses of a financial instrument in a way that reflects:
an unbiased and probability?weighted amount that is determined by evaluating a range of possibleoutcomes; The time value of money; and reasonable and supportable information that is availablewithout undue cost or effort at the reporting date about past events, current conditions andforecasts of future economic conditions.The company prepares the comparison table between receivables aging and fixed provision rateand work out the expected credit loss by reference to historical credit loss experience.On the balance sheet date, expected credit loss of receivable shall be calculated. If the expectedcredit loss is larger than the book value of the provision of receivable impairment, the differenceshall be recognized as receivable impairment loss, debit to “credit impairment loss”, credit to“provision for bad debt”. Alternatively, the difference is recognized as impairment gain andreversed journal entry shall be made.Actually incurred credit loss shall be debit to “provision for bad debt”, credit to “notes receivable”,“receivable”, “other receivable” based on the approved amount to be written off as it is assured asuncollectible receivable. If the amount to be written off is bigger than the provision forimpairment loss, the difference is debit to “credit impairment loss”
15. Inventories
Inventories are materials purchasing, raw material, variance of cost materials, low-valuableconsumable, materials processed on commission, working-in-progress, semi-finished goods,variance of semi-finished goods, and finished goods, engineering construction 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 the incomestatement by one-off method.After yearend thorough inventory check, at the balance sheet date inventory impairment should beprovided or adjusted according to inventory category. For the finished goods, raw material heldfor sale etc which shall be sold directly, the net realizable value should be confirmed at theestimated selling price less estimated selling expenses and related tax and expenses. The rawmaterial held for production, its realizable value should be confirmed at the estimated selling priceof finished goods less estimated cost of completion, estimated selling expenses and related tax.The net realizable value of inventories held for execution of sale contracts or labor contracts shall
be calculated based on the contract price. If the quantities of inventories in the Group are morethan quantities if inventories subscribed in the sales contracts, the net realizable value of theexcessive part of the inventories should be calculated based on the general selling price. When theimpairment indicators disappear, impairment provision shall be reversed and
16. Contract assets
Contract assets are the rights of the Company to receive consideration for the goods it hastransferred to the customer, and such rights are subject to factors other than the passage of time. Ifthe Company sells two clearly distinguishable goods to a customer and is entitled to receivepayment for the delivery of one of the goods, but the payment is contingent on the delivery of theother goods, the Company regards the right to receive payment as a contract asset.The method for determining the expected credit loss of the contract assets shall refer to thedescription of notes receivable and accounts receivable in notes 11 and 12 above.Accounting method: the Company calculates the expected credit loss of the contract assets on thebalance sheet date. If the expected credit loss is greater than the carrying amount of the currentcontract assets impairment provision, the Company will recognize the difference as an impairmentloss and debit "credit impairment loss" and credit "Contract assets impairment provision". On thecontrary, the Company recognizes the difference as impairment gain and makes oppositeaccounting records.If the Company actually suffers a credit loss and determines that the relevant contract assetscannot be recalled, and the write-off is approved, the Company shall debit "impairment provisionsof contract assets" and credit "contract assets" according to the approved amount of write-off. Ifthe amount of write-off is greater than the allowance for loss accrued, the difference shall bedebited as "credit impairment loss".
17. Contract Cost
(1) The method for determining the amount of assets related to the contract costThe Company's assets related to contract cost include contract performance cost and contractacquisition cost.Contract performance cost, that is, the cost of the Company to the contract, do not belong to otheraccounting standards for enterprises the scope of the specification, and satisfy the followingconditions at the same time, as the performance contract cost recognized as an asset: the cost anda current or expected is directly related to the contract, including direct materials, direct labor,manufacturing cost (or similar fee), specific cost borne by the customer and only other cost arisingfrom this contract; this cost increases the Company's future resources for performance obligations;the cost is expected to be recovered.Contract acquisition cost, that is, the incremental cost incurred by the Company to acquire thecontract is expected to be recovered, shall be recognized as an asset as the contract acquisitioncost; if the amortization period of the asset does not exceed one year, it shall be recorded into the
current profit and loss at the time of occurrence. Incremental cost is cost (such as salescommissions, etc.) that the Company would not incur without obtaining a contract. Expensesincurred by the Company for the acquisition of the contract, in addition to the incremental costexpected to be recovered (such as travel expenses incurred whether the contract is acquired or not,etc.), shall be recorded into the current profit and loss when incurred, except those clearly borneby the customer.
(2) Amortization of assets related to contract cost
The assets related to the contract cost of the Company shall be amortized on the same basis as thecommodity income recognition related to the assets and shall be recorded into the current profitand loss.
(3) Impairment of assets related to the contract cost
When determining the impairment loss of assets related to the contract cost, the Company shallfirst determine the impairment loss of other assets related to the contract recognized in accordancewith accounting standards for other relevant enterprises. If the carrying value is higher than theresidual consideration expected to be obtained by the Company due to the transfer of thecommodity related to the asset and the estimated cost to be incurred for the transfer of thecommodity, the excess part shall be set aside for impairment loss and recognized as an assetimpairment loss.If the foregoing difference is higher than the carrying amount of the asset, the carrying amount ofthe asset shall be converted back to the original provision for impairment of the asset and recordedinto the current profit and loss. However, the carrying amount of the asset after conversion shallnot exceed the carrying amount of the asset under the circumstance of no provision forimpairment of the asset.
18. Long-term receivables
(1) Confirmation method of impairment provisio
On the basis of expected credit losses, the Company will always measure its loss provision inaccordance with the amount equivalent to the expected credit losses in the entire duration forlong-term receivables formed by transactions regulated by the Accounting Standards forEnterprises No. 14 - Income Standards that do not contain significant financing components.Measurement of expected credit losses. Expected credit loss refers to the weighted average of thecredit loss of a financial instrument weighted by the risk of default. The credit loss herein refers tothe difference between all contractual cash flows receivable under the contract and all cash flowsexpected to be received by the Company discounted at the original effective interest rate, i.e. thepresent value of all cash shortfalls.
(2) A portfolio method to evaluate expected credit risk on the basis of portfolioThe Company evaluates the credit risk of financial assets with significantly different credit risks,such as: long-term receivables that have disputes with the other party or involve litigation or
arbitration; Other receivables where there is a clear indication that the debtor is likely to be unableto meet its obligations, etc.Except for financial assets for which credit risk is assessed individually, the Company dividesfinancial assets into different groups based on common risk characteristics and evaluates creditrisk on a portfolio basis.In addition to long-term receivables with single credit risk assessment, it is divided into differentcombinations based on the relationship between long-term receivables transaction objects as thecommon risk characteristics, and the expected credit loss accounting estimation policy isdetermined:
Accounting policy for expected credit loss of portfolio classificationThe related party portfolio management within the scope of the merger evaluates that suchprojects have low credit riskOther related parties and combinations of non-related parties shall draw impairment provisions inaccordance with the expected loss rateWith reference to historical credit loss experience and combined with the current situation andforecast of future economic conditions, the company prepares a comparison table between the ageof long-term receivables and the expected credit loss rate of the entire duration to calculate theexpected credit loss.The Company's method of measuring expected credit losses on financial instruments reflectsfactors such as: an unbiased probability weighted average amount determined by evaluating arange of possible outcomes; Time value of money; Reasonable and evidence-based informationabout past events, current conditions, and projections of future economic conditions that areavailable at no unnecessary additional cost or effort at the balance sheet date.The Company calculates the expected credit loss of long-term receivables on the balance sheetdate. If the expected credit loss is greater than the carrying amount of the current impairmentprovision for long-term receivables, the Company recognizes the difference as the impairmentloss for long-term receivables, debits the "credit impairment loss" and credits the "bad debtprovision". Instead, the company recognizes the difference as an impairment gain and makes theopposite accounting record.If the company decides that the related long-term receivables cannot be collected due to the actualcredit loss and is approved to cancel, the "bad debt reserve" and the "long-term receivables" shallbe debited and credited according to the approved amount of write-off. If the write-off amount isgreater than the loss provision already drawn, the difference will be debited to "credit impairmentloss" on a regular basis.
19. Long-term equity investment
Long term equity investments are the investment in subsidiary, in associated company and in jointventure.
Joint control is the contractual agreement sharing of control over an economic activity by allparticipants or participants’ combination and decisions or policies relating to the operating activityof the entity require the unanimous consent of the parties sharing the control.Significant influence exists when the entity directly or indirectly owned 20% or more but less than50% shares with voting rights in the investee company. If holding less than 20% voting rights, theentity shall also take other facts or circumstances into accounts when judging any significantinfluences. Factors and circumstances include: representation on the board of directors orequivalent governing body of the investee, participation in financial or operating activitiespolicy-making processes, material transactions between the investor and the investee, interchangeof managerial personnel or provision of essential technical information.When control exists over an investee, the investee is a subsidiary of an entity. The initialinvestment cost for long-term equity investment acquired through business combination undercommon control, is the carrying amount presented in the consolidated financial statements of theshare of net assets at the combination date in the acquired company. If the carrying amount of netassets at the combination date in the acquired company is negative, investment shall be recognizedat zero.If the equity of investee under common control is acquired by stages and business combinationincurs in the end, an entity shall disclose the accounting method for long-term equity investmentin the parent financial statement as a supplemental. For example, if the equity of investee undercommon control is acquired by stages and business combination incurs in the end, and it’s abundled transaction, the entity shall regard all transactions as a one for accounting. If it’s not abundled transaction, the carrying amount presented in the consolidated financial statements of theshare of net assets at the combination date in the acquired company since acquisition isdetermined as for the initial cost of long-term equity investment. The difference between the costinitially recognized and carrying amount of long-term equity investment prior to the businesscombination plus the newly paid consideration for further share acquired, and capital reserve shallbe adjusted accordingly. If no enough capital reserve is available for adjustment, retain earningsshall be adjusted.If long-term equity investment is acquired through business combination not under commoncontrol, initial investment cost shall be the combination cost.If the equity of investee not under common control is acquired by stages and businesscombination incursion the end, an entity shall disclose the accounting method for long-term equityinvestment in the parent financial statement as a supplemental. If the equity investment of investeenot under common control is acquired by stages and business combination incursion the end, andit’s a bundled transaction, the entity shall regard all transactions as a one for accounting. If it’s nota bundled transaction, the carrying amount of the equity investment held previously plus newlyincreased investment cost are taken as the initial investment cost under cost model. If equityinvestment is held under equity method before the acquisition date, other comprehensive incomeunder equity method previously shall not be adjusted accordingly. When disposing of the
investment, the entity shall adopt the same basis as the investee directly disposing of related assetsor liability for accounting treatment. Equity held prior to acquisition date as available for salefinancial assets under fair value model, accumulated change on fair value previously recorded inother comprehensive shall be transferred into investment gain/loss for the period.Apart from the long-term equity investments acquired through business combination mentionedabove, the cost of investment for the long-term equity investments acquired by cash payment isthe amount of cash paid. For long-term equity investment acquired by issuing equity instruments,the cost of investment is the fair value of the equity instrument issued. For long-term equityinvestment injected to the entity by the investor, the investment cost is the consideration asspecified in the relevant contract or agreement.The Group adopts cost method to account for investment in subsidiary and equity method forinvestment in joint venture and affiliate.Long-term equity investment subsequently measured under cost model shall increase the carryingamount of investment by adjusting the fair value of additional investment and relevant transactionexpenses. Cash dividend or profit declared by investee shall be recognized as investment gain/lossfor the period based on the proportion share in the investee.Long-term equity investment subsequently measured under equity method shall be adjusted for itscarrying amount according to the share of equity increase or decrease in the investee. The entityshall recognize its share of the investee’s net profits or losses based on the fair value of theinvestee’s individual identifiable assets at the acquisition date, after making appropriateadjustments thereto in conformity with the accounting policies and accounting period, andoffsetting the unrealized profit or loss from internal transactions entered into between the entityand its associates and joint ventures according to the shareholding attributable to the entity andaccounted for as investment income and loss based on such basis.On disposal of a long-term equity investment, the difference between the carrying value and theconsideration actually received is recognized as investment income for the period. For long-terminvestments accounted for under equity method, the movements of shareholder’s equity, other thanthe net profit or loss, of the investee company, previously recorded in the shareholder’s equity ofthe Company are recycled to investment income for the period on disposal.Where the entity has no longer joint control or significant influence in the investee company as aresult of partially disposal of the investment, the remaining investment will be changed to beaccounted for as available for sale financial assets, and the difference between the fair value ofremaining investment at the date of losing joint control or significant influence and its carryingamount shall be recognized in the profit or loss for the year. Other comprehensive incomerecognized from previous equity investment under equity model shall be accounted for on thesame basis as the investee directly disposing of related assets or liability when stopping usingunder equity model.Where the entity has no longer control over the investee company as a result of partially disposal
of the investment, the remaining investment will be changed to be accounted for using equitymethod providing remaining joint control or significant influence over the investee company. Thedifference between carrying amount of disposed investment and consideration received actuallyshall be recognized in the profit and loss for the period as investment gain or loss, and investmentshall be adjusted accordingly as if it was accounted for under equity model since acquisition.Where the entity has on longer joint control or significant influence in the investee as a result ofdisposal, the investment shall be changed to be accounted for as available for sale financial assets,and difference between the carrying amount and disposal consideration shall be recognized inprofit and loss for the period, and the difference between the fair value of remaining investment atthe date of losing control and its carrying amount shall be recognized in the profit or loss for theyear as investment gain or loss.If the entity loses its control through partially disposal of investment by stages and it’s not abundled transaction, the entity shall account for all transactions separately. If it’s a bundledtransaction, the entity shall regard all transactions as one disposal of subsidiary by losing control,but the difference between disposal consideration and carrying amount of the equity investmentdisposed prior to losing control, which arises from each individual transaction shall be recognizedas other comprehensive income until being transferred into profit and loss for the period by thetime of losing control.
20. Investment property
The investment property includes property and building and measured at cost modelCategory
Useful life
(years)
Estimated netresidual value rate
Annual depreciation rate
Housing and Buildings 40 3% 2.43%
21. Fixed assets
Recognition criteria of fixed assets: defined as the tangible assets which are held for the purposeof producing goods, rendering services, leasing or for operation & management, and have morethan one year of useful life.Fixed assets shall be recognized when the economic benefit probably flows into the Group and itscost can be measured reliably. Fixed assets include: building, machinery, transportation equipment,electronic equipment and others.All fixed assets shall be depreciated unless the fixed assets had been fully depreciated and are stillbeing used and land is separately measured. Straight-line depreciation method is adopted by theGroup. Estimated net residual value rate, useful life, depreciation rate as follows:
No Category
Useful life
(years)
Estimated netresidual value rate
Annualdepreciation rate
1 Housing and Buildings 20-40
3%,5%,10%
2.25-4.85%
2 Machinery equipment 10-22
3%,5%,10%
4.09-9.7%
3 Transportation equipment 4-15
3%,5%,10%
6-24.25%
4 Electronic equipment 5
3%,5%,10%
18-19.4%
5 Others equipment 10-15
3%,5%,10%
6-9.7%
The Group should review the estimated useful life, estimated net residual value and depreciationmethod at the end of each year. If any change has occurred, it shall be regarded as a change in theaccounting estimates.Finance lease shall be recognized when one of the conditions are met, (1) the ownership of theasset belongs to the company when the lease term is due , (2) the company has the option to buythe asset and buy price is far lower than the fair value when exercising the option. (3) lease term ismost of the asset life (4) no significant difference between the present value of minimum leasepremium and fair value on the lease commencement date.On commencement date, leased asset shall be recognized at the lower of fair value and the PV ofminimum lease payment, long term payable shall be recognized at the minimum lease paymentand the difference is unrecognized financing expense.The depreciation policy of the leased fixed assets shall be consistent with that of the self-ownedfixed assets. If the ownership of asset can be reliably acquired by the lease term due date, leasedasset shall be depreciated through the expected service life, otherwise, it shall be depreciatedwithin the lower of the lease term and expected service life of the asset.
22. Construction in progress
The criteria and time spot of constructions in progress’s being transferred to fixed assets:
Constructions in progress are carried down to fixed assets on their actual costs when completingand achieving estimated usable status. The fixed assets that have been completed and reachedestimated usable status but have not yet been through completion and settlement procedures arecharged to an account according to their estimate values; adjustment will be conducted uponconfirmation of their actual values. The Group should withdraw depreciation in the next monthafter completion.
23. Borrowing costs
The borrowing cost includes the interest expenses of the borrowing, amortization of underflow oroverflow from borrowings, additional expenses and the foreign exchange profit and loss becauseof foreign currency borrowings. The borrowing costs incurred which can be directly attribute tothe fixed assets, investments properties, inventories requesting over 1 year purchasing ormanufacturing so to come into the expected condition of use or available for sale shall start to becapitalized when expenditure for the assets is being occurred, borrowing cost has occurred,necessary construction for bringing the assets into expected condition for use is in progress. Theborrowing costs shall stop to be capitalized when the assets come into the expected condition ofuse or available for sale. The borrowing costs subsequently incurred should be recorded into profit
and loss when occurred. The borrowing costs should temporarily stop being capitalized whenthere is an unusual stoppage of over consecutive 3 months during the purchase or produce of thecapitalized assets, until the purchase or produce of the asset restart.The borrowing costs of special borrowings, deducting the interest revenue of unused borrowingskept in the bank or the investment income from transient investment should be capitalized. Thecapitalized amount of common borrowings should be calculated as follows: average assetsexpenditure of the accumulated assets expenditure excess the special borrowing, multiplied by thecapital rate. The capital rate is the weighted average rate of the common borrowings.
24. Right of use assets
The right to use assets refers to the right of the Company as the lessee to use the leased assetsduring the lease term.
(1) Initial measurement
On the commencement date of the lease term, the Company shall make an initial measurement ofthe right to use assets at the cost. The cost includes the following four items: (1) The initialmeasurement amount of lease liabilities; (2) The amount of the lease payment paid on or beforethe commencement date of the lease term, if there is a lease incentive, will be deducted from theamount of the lease incentive already enjoyed; (3) The initial direct costs incurred, namely theincremental costs incurred to achieve the lease; (4) The cost expected to be incurred for thedemolition and removal of the leased asset, the restoration of the leased asset site or the restorationof the leased asset to the state agreed in the lease terms, except those incurred for the productionof inventory.
(2) Follow-up measurement
After the commencement of the lease term, the Company shall adopt the cost model to carry outsubsequent measurement of the right to use assets, that is, to measure the right to use assets at thecost minus accumulated depreciation and accumulated impairment losses. If the Companyre-measures the lease liabilities in accordance with the relevant provisions of the lease standards,the book value of the right to use assets shall be adjusted accordingly.Depreciation of usufruct assetsFrom the commencement date of the lease term, the Company shall make depreciation of theusufruct. The usuary-use asset is usually depreciated in the month in which the lease begins (if theenterprise chooses to depreciate in the month in which the lease begins, it needs to be depreciatedaccording to the specific situation described). The amount of depreciation deducted shall,according to the use of the usufruct, be included in the cost of the relevant asset or the currentprofit and loss.When determining the depreciation method of the right to use assets, the Company shall make adecision based on the expected consumption mode of the economic benefits related to the right touse assets, and shall calculate and deduct the depreciation of the right to use assets by the straight
line method.In determining the depreciable life of the use-right assets, the Company shall follow the followingprinciples: Where the ownership of the leased assets is reasonably determined at the end of thelease term, depreciation shall be accrued during the remaining service life of the leased assets;Where it is not reasonably certain that ownership of the leased asset will be acquired at the end ofthe lease term, depreciation shall be accrued within the shorter period of the lease term or theremaining useful life of the leased asset.Impairment of the right to use assetsIn case of impairment of the right to use assets, the Company shall carry out subsequentdepreciation according to the book value of the right to use assets after deducting the impairmentloss.
25. Intangible assets
The intangible assets of the Group refer to land use right and software. For acquired intangibleassets, the actual cost are measured at actual price paid and relevant other expenses. The costinvested into intangible assets by investors shall be determined according to the stated value in theinvestment contract or agreement, except for those of unfair value in the contract or agreement.Land use right shall be amortized evenly within the amortization period since the remiseddate.ERP system software and other intangible assets are amortized over the shortest of theirestimated useful life, contractual beneficial period and useful life specified in the law.Amortization charge is included in the cost of assets or expenses, as appropriate, for the periodaccording to the usage of the assets. At the end of the year, for definite life of intangible assets,their estimated useful life and amortization method shall be assessed. Any change shall be treatedas change on accounting estimate.
26. Impairment of long-term assets
The Group assesses at each balance sheet date whether there is any indication that long-termequity investments, investment property, fixed assets, construction in progress and intangibleassets with definite useful life may be impaired. If there is any indication that an asset may beimpaired, the asset will be tested for impairment. Goodwill arising in a business combinationand intangible asset with infinite useful life are tested for impairment annually no matter there isany indication of impairment or not.Estimate of recoverable amount is the higher of its fair value less costs to sell and the presentvalue of the future cash flows expected to be derived from the asset.If the recoverable amount of an asset is less than its carrying amount, the carrying amount shall beimpaired and the difference is recognised as an impairment loss and charged to profit or loss forthe period. Once an impairment loss on the assets is recognised, it is not reversed in a subsequentperiod.After assets impairment loss is recognized, depreciation and amortisation of the impaired asset
shall be adjusted in the following period so that the adjusted carrying amount(less expectedresidual value) can be depreciated and amortised systematically within the remaining life.When assessing goodwill for impairment, the carrying amount of goodwill shall be allocatedevenly to the assets group or assets portfolio. When testing the assets group or assets portfolioincluding goodwill, if there is any indication of impairment , ignoring the goodwill and testingthe assets group or assets portfolio alone so to work out the recoverable amount and comparing toits carrying amount and recognize the impairment loss. After that, testing the assets group or assetsportfolio with goodwill together, comparing the carrying amount of the assets group or assetsportfolio(including goodwill allocation) with recoverable amount , goodwill impairment shall berecognized when the recoverable amount is lower than its carrying amount.
27. Long-term deferred expenses
Long-term deferred expenses of the Group refer to leasing expenses, redecoration expense andothers. The expenses should be amortized evenly over the beneficial period. If the deferredexpense cannot take benefit for the future accounting period, the unamortized balance of thedeferred expenses should be transferred into the current profit or loss. Leasing expenses will beamortized within 10 years and 30years; redecoration expense and others will be amortizedwithin 3 years.
28. Contract liabilities
Contract liabilities reflect the Company's obligation to transfer the goods to the customer onconsideration received or receivable from the customer. Where the customer has paid the contractconsideration or the Company has obtained the right to receive the contract considerationunconditionally before the transfer of the goods to the customer, the liability of the contract shall berecognized in accordance with the amount received or receivable at the earlier point between theactual payment made by the customer and the due payment.
29. Employee benefits
Employee’s benefit comprises short-term benefit, post-employment benefit, termination benefit
and other long-term employee’s benefit.
Short-term benefit includes salary, bonus, allowance, welfare, social insurance, housing funds,
labour union expense, staff training expense, during the period in which the service rendered by
the employees, the actually incurred short term employee benefits shall be recognized as liability
and shall be recognized in P&L or related cost of assets based on benefit objective allocated 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 Group, post-employment benefits are classified into
defined contribution plan and defined benefit plan. For defined contribution plan, liability shall be
recognized based on the contributed amount made by the Group to separate entity at the balance
sheet date in exchange of employee service for the period and it shall be recorded into current
profit and loss account or relevant cost of assets in accordance with beneficial objective.Termination benefits are employee’s benefit payable as a result of either an entity’s decision toterminate an employee’s employment before the contract due date or an employee’s decision toaccept voluntary redundancy in exchange for those benefits. An entity shall recognize thetermination benefits as a liability and an expense at the earlier date when the entity cannotunilateral withdraw the termination benefits due to employment termination plan or due toredundancy suggestion, or when the entity can recognize the restructuring cost or expense arisingfrom paying termination benefits.Other long-term employee’s benefit refers to all other employee benefits other than short-termbenefit, post-employment benefit and termination benefit.If other long-term employee’s benefit is qualified as defined contribution plan, contribution madeshall be recognized as liabilities accordingly for the period in which the service are rendered bythe employee and recognized in the profit or loss for the current period or relevant cost of assets.Except other long-term employee’s benefit mentioned above, obligation arising from definedbenefit plan shall be recognized in the profit or loss for the current period or relevant cost of assetsin accordance with the period when the service are rendered by the employee.
30. Lease liability
(1) Initial measurement
The company shall initially measure the liabilities of the lease according to the present value ofthe outstanding lease payments on the commencement date of the lease term.
1) Lease payment
The lease payment amount refers to the amount paid by the Company to the Lessor in connectionwith the right to use the leased assets during the lease term, including: (1) Fixed payment amountand substantial fixed payment amount, less the amount related to the lease incentive where there is alease incentive; (ii) variable lease payments dependent on indices or ratios, which are determined atthe initial measurement on the basis of the indices or ratios on the commencement date of the lease;
(3) The exercise price of the purchase option when the Company reasonably determines that thepurchase option will be exercised; (4) The term of the lease reflects the amount of money to be paidfor the termination of the lease option when the Company will exercise it; (5) The amount expectedto be paid based on the residual value of the guarantee provided by the Company.
2) Discount rate
When calculating the present value of the lease payments, the Company shall use the interest rateembedded in the lease as the discount rate, which is the interest rate at which the sum of the presentvalue of the lease receipts and the present value of the unsecured residual value of the lessor is equalto the sum of the fair value of the leased asset and the initial direct expenses of the Lessor. If thecompany is unable to determine the inherent interest rate of the lease, the incremental borrowing rateshall be used as the discount rate. Such incremental borrowing rate shall mean the interest rate
payable by the Company during a similar period under similar mortgage conditions in order toacquire assets with a value similar to that of the usuable-use assets under similar economiccircumstances. The interest rate is related to: (1) the company's own situation, i.e., the company'ssolvency and credit standing; ② The term of the "loan", i.e. the lease term; (3) The amount of"borrowed" funds, that is, the amount of lease liabilities; (4) "collateral conditions", that is, thenature and quality of the underlying assets; (5) Economic environment, including the jurisdictionwhere the lessee is located, the valuation currency, the signing time of the contract, etc. Thecompany's bank loan interest rate/related lease contract interest rate/the company's latest similarasset mortgage interest rate/the interest rate of bonds issued by the enterprise in the same period......Based on the above adjustment factors to obtain the incremental borrowing rate.
(2) Follow-up measurement
On the commencement date of the lease term, the Company shall carry out subsequentmeasurement of the lease liabilities according to the following principles: (1) Increase the carryingamount of the lease liabilities when recognizing the interest of the lease liabilities; (2) Reduce thecarrying amount of lease liabilities when paying the lease payment; (3) When the lease paymentchanges due to revaluation or lease change, the book value of the lease liability shall be measuredagain.The Company shall calculate the interest expense of the lease liability in each period of the leaseterm at a fixed periodic interest rate and record it into the current profit and loss, except for thosethat should be capitalized. The periodic interest rate refers to the discount rate used by the Companyfor the initial measurement of lease liabilities, or the revised discount rate used by the Company forthe remeasurement of lease liabilities due to changes in lease payments or changes in lease.
(3) Re-measurement
After the commencement of the lease term, in the event of any of the following circumstances, theCompany shall re-measure the lease liabilities according to the present value of the lease paymentsafter the change and adjust the book value of the usufruct accordingly. If the book value of the rightto use assets has been reduced to zero, but the lease liabilities still need to be further reduced, thecompany shall record the remaining amount into the profits and losses of the current period. (1)Changes in the substantial fixed payment amount (in this case, the original discount rate is used todiscount); (2) The estimated amount payable of the residual value changes (in this case, the originaldiscount rate is used to discount); (3) Any change in the index or rate used to determine the leasepayment (in which case the revised discount rate is used); (4) The evaluation result of the call optionchanges (in this case, the revised discount rate is used to discount); (5) Changes in the assessmentresult or actual exercise of the lease option to renew or terminate the lease option (in which case, therevised discount rate is used to discount the option).
31. Contingent liabilities
When the Company has transactions such as commitment to externals, discounting the trade
acceptance, unsettled litigation or arbitration which meets the following criterion, provision
should be recognized: It is the Company's present obligation; carrying out the obligation willprobably cause the Company's economic benefit outflow; the obligation can be reliably measured.Provision is originally measured on the best estimate of outflow for paying off the presentobligations, and to consider the risk, uncertainty, time value of monetary relevant to contingentitems. If the time value of monetary is significant, the best estimate will be determined bydiscounted cash outflow in the future. At each balance sheet date, the book value of provision isreviewed and adjustment will be made on the book value if there is any change, in order to reflectthe current best estimate.When compensation from the 3rd party is expected for full or partial contingent liabilitysettlement, the compensation shall be recognized as an asset separately and measured at no morethan the book value of contingent liability.
32. Share based payment
An equity-settled share-based payment in exchange for the employee’s services is measured at thefair value at the date when the equity instruments are granted to the employee. Such fair valueduring the vesting period of service or before the prescribed exercisable conditions are achieved isrecognised as relevant cost or expense on a straight-line during the vesting period based on thebest estimated quantity of exercisable equity instruments, accordingly increase capital reserve.A cash-settled share-based payment is measured at the fair value at the date at which the Groupincurred liabilities that are determined based on the price of the shares or other equity instruments.If it is immediately vested, the fair value of the liabilities at the date of grant is recognised asrelevant cost or expense, and corresponding liabilities. If it is exercisable only when the vestingperiod of service is expired or the prescribed conditions are achieve, the fair value of liabilitiesundertaken by the Group are re-measured at each balance sheet date based on the best estimate ofexercisable situation.The fair value of the liabilities is re-measured at each balance sheet date. Any changes arerecognised in the profit or loss for the year.If the granted equity instruments are cancelled within the vesting period, the equity instrumentshall be treated as accelerated vesting and the balance linked to the remaining vesting period shallbe recognized in the profit or loss account, accordingly be recognized in the capital reserve. Ifemployees or other parties can choose but fail to satisfy non-vesting conditions during the vestingperiod, the Company sees this as cancellation of granted equity instruments.
33. Revenue
The revenue of the Company is mainly from sales of complete sets of equipment, engineeringinstallation.The Company has performed the performance obligations in the contract, that is, when thecustomer obtains the control right of the relevant goods or services, the revenue is recognized.If the contract contains two or more performance obligations, the Company shall, at the beginning
of the contract, allocate the transaction price to each individual performance obligation accordingto the relative proportion of the individual selling price of the commodities or services committedby each individual performance obligation, and measure the income according to the transactionprice allocated to each individual performance obligation.The transaction price is the amount of consideration to which the Company is expected to beentitled as a result of the transfer of goods or services to the customer, excluding paymentsreceived on behalf of third parties. The trading price recognized by the Company shall not exceedthe amount of accumulated recognized revenue that is highly unlikely to be materially reversedwhen the relevant uncertainties are eliminated. Refunds to customers are expected to be excludedfrom the transaction price as liabilities. Where there is a significant financing element in thecontract, the Company shall determine the transaction price based on the amount payable by theassumed customer in cash upon acquisition of control over the goods or services. The differencebetween the transaction price and the contract consideration shall be amortized over the term ofthe contract using the effective interest rate method. On the commencement date of the contract,the Company expects that the interval between the customer's acquisition of control of the goodsor services and the customer's payment shall not exceed one year, regardless of the significantfinancing element existing in the contract.If one of the following conditions is met, the Company shall perform its performance obligationswithin a certain period of time; otherwise, the performance obligation shall be performed at acertain point:
(1) When the customer performs the performance of the Company, it will obtain and consume theeconomic benefits brought by the performance of the Company.
(2) The customer can control the commodities under construction during the performance of theCompany.
(3) The commodities produced by the Company during the performance of the contract shall haveirreplaceable uses, and the Company shall have the right to receive payment for the accumulatedperformance part which has been completed so far during the entire contract period.For the performance obligations performed within a certain period of time, the Company shallrecognize the income according to the performance progress within that period. If the performanceschedule cannot be reasonably determined and the Company is expected to be compensated forthe costs incurred, the revenue shall be recognized according to the amount of the cost incurreduntil the performance schedule can be reasonably determined.For performance obligations performed at a certain point, the Company recognizes revenue at thepoint when the customer acquires control over the relevant goods or services. In determiningwhether the customer has acquired control over the goods or services, the Company considers thefollowing indications:
(1). The Company shall have the right to receive the present payment for the goods or services.
(2) The Company has transferred the legal ownership of the goods to the customer.
(3) The Company has transferred the physical goods to the customer.
(4) The Company has transferred to the customer the major risks and rewards in the ownership ofthe goods.
(5) The customer has accepted the goods or services, etc.
The Company determines whether it is the principal responsible person or the agent at the time ofthe transaction based on whether it has control over the commodity before transferring it to thecustomer. If the Company is able to control the commodity before transferring the commodity tothe customer, the Company shall be the main person responsible and shall recognize the incomeaccording to the total amount received or the consideration; otherwise, the Company shallrecognize the income according to the amount of the commission or handling charge to be entitledto be collected, which shall be the net amount after the total amount of consideration received orreceivable is deducted from the price paid to other relevant parties, or determined according to theproportion of the established commission amount. The circumstances under which the Companyjudges that it can control the goods before transferring them to the customer include:
(1) The Company shall transfer the control right of commodities or other assets to the customerafter the third party obtains the control right.
(2) The Company can lead a third party to provide services to customers on behalf of theCompany.
(3) After the Company acquires the control of the commodity by a third party, it transfers thecommodity to the customer by integrating it with other products into a group of outputs byproviding significant services.In the specific determination of the ownership of a commodity prior to its transfer to a customer, itis not limited to the legal form of the contract, but takes into account all relevant facts andcircumstances, including:
(1) The Company undertakes the main responsibility of transferring the goods to the customers.
(2) The Company shall bear the inventory risk of the goods before or after the transfer of thegoods.
(3) The Company shall have the right to determine the prices of the commodities to be traded.
(4) Other relevant facts and circumstances.
The Company's right to receive consideration for the goods or services it has transferred to thecustomer (and such right is subject to factors other than the passage of time) is shown as a contractasset, and the impairment of the contract asset is calculated on the basis of the expected credit loss.The Company has the right to collect the consideration unconditionally from the customer as anaccount receivable. The obligation of the Company to transfer the goods or services to thecustomer upon receipt of the consideration receivable by the customer is shown as a contract
liability.
34. Government grants
A government grant shall be recognized when the Company complies with the conditionsattaching to the grant and when the Company is able to receive the grant.Assets-related government grant is the government fund obtained by the Company 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-related grants.If no grant objective indicated clearly in the government documents, the Company shall judge itaccording to the principle mentioned above.Where a government grant is in the form of a transfer of monetary asset, it is measured at theamount received. Where a government grant is made on the basis of fixed amount or conclusiveevidence indicates relevant conditions for financial support are met and expect to probablyreceive the fund, it is measured at the amount receivable. Where a government grant is in theform of a transfer of non-monetary asset, it is measured at fair value. If fair value cannot bedetermined reliably, it is measured at a nominal amount of RMB1 Yuan.Assets-related government grants are recognized as deferred income ore directly offsetting thebook value of the asset, and Assets-related government grants recognized as deferred incomeshall be evenly amortized to profit or loss over the useful life of the related asset.Any assets are sold, transferred, disposed off or impaired earlier than their useful life expireddate, the remaining balance of deferred income which hasn’t been allocated shall be carriedforward to the income statement when the assets are disposed off.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 expense are incurred. Government grants relating to compensation forrelated expenses or losses already incurred are charged directly to the profit or loss for the period.Government grants related to daily business, shall be recognized as other income in accordancewith business nature, otherwise, shall be recognized as non-operating expenses.If any government grant already recognized needs to be returned to the government, theaccounting shall be differed according to the following circumstances:
1) originally recognized as offsetting of related assets' book value, assets book value shall be
adjusted
2) if any deferred income, book value of deferred income shall be offset, excessive portion
shall be accounted into income statement
3) Other situation, it shall be accounted into income statement directly.
35. Deferred tax assets and deferred tax liabilities
The deferred income tax assets or the deferred income tax liabilities should be recognized
according to the differences (temporary difference) between the carrying amount of the assets orliabilities and its tax base. Deferred tax assets shall be respectively recognized for deductible taxlosses that can be carried forward in accordance with tax law requirements for deduction oftaxable income in subsequent years. No deferred tax liabilities shall be recognized for anytemporary difference arising from goodwill initially recognition. No deferred tax assets orliabilities shall be recognized for any difference arising from assets or liabilities initial recognitionon non-business combination with no effect on either accounting profit or taxable profit (ordeductible tax loss). At the balance sheet date, deferred tax assets and deferred tax liabilities aremeasured at the tax rates that are expected to apply to the period when the asset is realized orliability is settled.Deferred tax assets are recognized to the extent that it is probable that future taxable profit will beavailable to offset the deductible temporary difference, deductible loss and tax reduction.
36. Lease
(1) Accounting treatment of operating leases
(1) Identification of lease
A lease is a contract whereby the lessor assigns the right to the use of an asset to the lessee for acertain period of time in exchange for consideration. On the commencement date of the contract,the Company evaluates whether the contract is a lease or includes a lease. A contract is a lease orincludes a lease if a party assigns the right to control the use of one or more identified assets for acertain period of time in exchange for consideration. To determine whether the contractrelinquishes the right to control the use of the identified assets for a given period, the Companyassesses whether the client under the contract is entitled to receive virtually all the economicbenefits arising from the use of the identified assets during the use period and is entitled todominate the use of the identified assets during the use period.If the contract contains multiple separate leases at the same time, the company will divide thecontract and make accounting treatment for each separate lease. If the contract contains bothleasing and non-leasing parts, the company shall split the leasing and non-leasing parts foraccounting treatment.
(2) The Company acts as the lessee
On the commencement date of the lease term, the Company shall recognize the right to use assetsand liabilities of the lease. The recognition and measurement of right to use assets and leaseliabilities are shown in "27. Right to use Assets" and "33. Lease liabilities ".
2) Lease change
Lease change refers to the change of lease scope, lease consideration and lease term beyond theterms of the original contract, including the increase or termination of the right to use one or moreleased assets, the extension or shortening of the lease term stipulated in the contract, etc. Theeffective date of the lease change means the date on which the parties agree on the lease change.
If the lease changes and the following conditions are met at the same time, the Company will treatthe lease change as a separate lease for accounting: (1) The lease change expands the lease scopeor the lease term by increasing the right to use one or more leased assets; (2) The increasedconsideration shall be equivalent to the amount of the individual price for the extended portion ofthe lease scope or the extended lease term adjusted for the circumstances of the contract.If the change of lease is not accounted for as a separate lease, the Company shall, on the effectivedate of the change of lease, apportion the consideration of the contract after the change inaccordance with relevant provisions of the lease standards and redefine the lease period after thechange; The revised discount rate is used to discount the changed lease payment amount tore-measure the lease liabilities. When calculating the present value of the lease payment after thechange, the Company shall use the lease embedded interest rate during the remaining lease periodas the discount rate; If it is not possible to determine the leasehold interest rate for the remaininglease term, the Company shall use the lessee's incremental borrowing rate on the effective date ofthe lease change as the discount rate. With respect to the impact of the above adjustment of leaseliabilities, the Company will make accounting treatment according to the following circumstances:
(1) If the change of lease results in the reduction of the scope of lease or the shortening of leaseterm, the lessee shall reduce the book value of the right to use assets and record the profits orlosses related to partial or complete termination of lease into the current profit and loss. (2) If thelease liabilities are remeasured due to other lease changes, the lessee shall adjust the book value ofthe right to use assets accordingly.
3) Short-term leases and leases of low-value assets
For short-term leases with a lease term of no more than 12 months and low-value asset leases witha lower value when each leased asset is a new asset, the Company chooses not to recognize theright to use assets and lease liabilities. The Company will include the lease payments forshort-term leases and leases of low-value assets into the cost of the relevant assets or currentprofits and losses during each period of the lease term in accordance with the straight-line methodor other systematically reasonable method.
(3) Our company is the lessor
On the basis that this Contract is or includes a lease as assessed in (1), the Company, as the lessor,on the commencement date of the lease, divides the lease into a finance lease and an operatinglease.If a lease substantially transfers almost all of the risks and rewards associated with ownership ofthe leased asset, the lessor classifies the lease as a finance lease and any lease other than financelease as an operating lease.The Company generally classifies a lease as a finance lease if it has one or more of the followingconditions: (1) At the end of the lease term, the ownership of the leased asset passes to the lessee;
(2) The lessee has the option to purchase the leased asset, and the purchase price entered into is
sufficiently low compared with the fair value of the leased asset at the time the option is expectedto be exercised, so that it can be reasonably determined on the commencement date that the lesseewill exercise the option; (3) Although the ownership of the asset is not transferred, the lease periodaccounts for most of the service life of the leased asset (no less than 75% of the service life of theleased asset); (4) On the lease commencement date, the present value of the lease receipts isalmost equivalent to the fair value of the leased asset (not less than 90% of the fair value of theleased asset). ; ⑤ The leased assets are special in nature, and only the lessee can use them ifthere is no major transformation. The Company may also classify a lease as a finance lease if ithas one or more of the following signs: (1) If the lessee cancels the lease, the lessee shall bear theloss caused to the lessor by the cancellation; (2) the profit or loss generated by the fluctuation ofthe fair value of the residual asset belongs to the lessee; (3) The lessee has the ability to continuethe lease at a rent far below the market level until the next period.
2) Accounting treatment of operating lease
Disposal of rentDuring each period of the lease term, the Company will use the straight-line method/othersystematic and reasonable methods to recognize lease receipts from operating leases as rentalincome.Incentives offeredIf the rent-free period is provided, the Company shall allocate the total rent by the straight linemethod/other reasonable method throughout the lease period without deducting the rent-freeperiod, and shall recognize the rental income during the rent-free period. If the Company bearscertain expenses of the Lessee, such expenses shall be deducted from the total rental income anddistributed according to the balance of the rental income after deduction.Initial direct costThe initial direct expenses incurred by the Company in connection with the operating lease shallbe capitalized to the cost of the underlying assets under lease and shall be booked into the currentprofits and losses in stages during the lease term on the same recognition basis as the rentalincome.DepreciationFor the fixed assets in the operating leased assets, the Company shall adopt the depreciation policyfor similar assets. Other operating leased assets shall be amortized in a systematic and reasonablemanner.Variable lease paymentsThe variable lease payments obtained by the Company in connection with the operating lease andnot included in the lease receipts shall be recorded into the current profit and loss when actuallyincurred.
Changes in operating leasesIf an operating lease changes, the Company will treat it as a new lease as of the effective date ofthe change, and the amount received in advance or receivable for the lease related to the leasebefore the change is regarded as the amount received for the new lease.
(2) Accounting treatment of finance lease
Initial measurementOn the commencement date of the lease term, the Company shall recognize the finance leasereceivable and terminate the recognition of the finance lease assets. In the initial measurement ofthe finance lease receivables, the Group shall take the net lease investment as the recorded valueof the finance lease receivables.The net lease investment is the sum of the present value of the unsecured residual value and thelease receipts not yet received at the commencement of the lease period, discounted at the interestrate contained in the lease. Lease revenue refers to the amount of money that the lessor shouldcollect from the lessee for the assignment of the right to use the leased assets during the lease term,including: (1) the fixed amount and substantial fixed amount payable by the lessee; If there is alease incentive, the amount related to the lease incentive will be deducted; (ii) variable leasepayments dependent on indices or ratios, which are initially measured according to the indices orratios on the commencement date of the lease; (3) the exercise price of the option to buy, providedthat it is reasonably determined that the lessee will exercise the option; (4) the amount to be paidby the lessee to exercise the termination option, provided that the lease term reflects that the lesseewill exercise the termination option; (5) Guarantee residual value provided to the lessor by thelessee, the party related to the lessee and an independent third party who has the economic abilityto perform the guarantee obligation.Subsequent measurementThe Company calculates and recognizes the interest income for each period of the lease term at afixed periodic interest rate. The periodic interest rate, it is to point to determine the net investmentin the lease use contains the discount rate (if relet, sublet's interest rate implicit in the lease cannotbe determined, using the original leasing of the discount rate (adjustments according to the initialdirect costs related to sublease)), or change in the financing lease is not as a separate leaseaccounting treatment, and meet if changes to take effect on the lease beginning date, The leasewill be classified as a financial lease at the revised discount rate determined in accordance withthe relevant provisions.Accounting treatment of lease changesIf the finance lease changes and meets the following conditions at the same time, the Companywill treat the change as a separate lease for accounting: (1) The change expands the scope of leaseby increasing the right to use one or more leased assets; (2) The increased consideration shall beequivalent to the amount of the individual price of the expanded lease area adjusted for the
circumstances of the contract.If the change of financing lease is not as a single lease accounting treatment, and meet if changesto take effect on the lease beginning date, the lease will be classified as an operating lease terms,the group since the day of the effect of the change of it as a new lease accounting treatment, andprior to the effect of the change of the net investment in the lease as the book value of the leasedasset.
37. Other significant accounting policies, accounting Estimates
When preparing the financial statements, the management needs to use accounting estimate andassumption, which will have effect on the application of accounting policy and amount of asset,liability, income and expense. The actual circumstance maybe differs from the estimates. Themanagement needs to continuously assess the key assumption involved by estimate and thejudgment on uncertainty. Effect on the accounting estimate shall be recognized during the periodwhen estimate is changed and in future.The following accounting estimate and key assumption will trigger the significant risk ofsignificant adjustment on the book value of asset and liability during the period of future.
（1） Impairment of receivable
Receivable is measured at amortized cost at the balance sheet date and assessed for anyimpairment indicator and the acutely amount of impairment. Objective evidence for impairmentincludes judgmental data of indicating significant decline of future cash flow of individual orgroup of receivable, indicating significant negative financial performance of debtors. Hadreceivable is recovered with certain proof, and in fact, it is relevant to the the matters subsequentto the the loss recognition, the impairment recognized before shall be reversed.
（2） Provision of inventory impairment
Inventory is periodically evaluated at the net realizable value and any cost higher than NRV shallbe recognized as inventory impairment loss. When evaluating the NRV, net realizable value isdetermined by deducting the expected selling expense and relative tax from the estimated sellingprice. When actual selling price or cost differs from the previous estimates, management willmake adjustment on NRV. Therefore, the results based on the present experience may differ fromthe actual results, which caused the adjustment on the carrying amount of inventory in the book.Provision for inventory impairment may vary with the above reasons. Any adjustment onprovision for inventory impairment will affect the income statement.
（3） Provision of goodwill impairment
Each year, goodwill shall be assessed for any impairment. Recoverable amount of assets groupor asset portfolio including goodwill shall be the present value of future cash flow, which needsestimates for calculation.If management adjust the gross profit margin adopted by the present value of future cash flowcalculation of assets group or asset portfolio, adjusted gross profit margin is lower than the margin
applied, the impairment is required.If management adjust the discounting rate before tax applied by the present value of future cashflow calculation of assets group or asset portfolio, adjusted discounting rate before tax is higherthan the rate applied, the impairment is required.If actual profit margin or discounting rate before tax is higher or lower than management’sestimate, any impairment recognized before can not be reversed.
（4） Provision of fixed asset impairment
At the balance sheet date, the management shall implement impairment test on buildings, plantand machinery etc which has any impairment indicator. The recoverable amount of FA is thehigher of PV of future cash flow and net value of fair value after disposal cost, the calculationneeds accounting estimate.If management adjust the gross profit margin adopted by the present value of future cash flowcalculation of assets group or asset portfolio, adjusted gross profit margin is lower than the marginapplied, the impairment is required.If management adjust the discounting rate before tax applied by the present value of future cashflow calculation of assets group or asset portfolio, adjusted discounting rate before tax is higherthan the rate applied, the impairment is required.If actual profit margin or discounting rate before tax is higher or lower than management’sestimate, any impairment recognized before can not be reversed.
（5） Recognition of deferred tax assets
Estimate on deferred tax assets needs making estimation of taxable income and applied tax rate inthe following years in future. Whether deferred tax asset can be realized depends on the enoughprobable taxable profit obtained in future. Tax rate change in future and the timing of temporarydifference reverse may also affect the income tax expense(income)and the balance of deferred tax.Any change of estimate described here will cause the deferred tax adjustment.
（6） Useful life span of fixed assets and intangible assets
At least every year end, the management shall review the useful life of FA and intangible assets.Expected useful life is based on the management’s experience on the same class of assets, withreference to the estimate applied in the industry in conjunction with expected technologydevelopment. When previous estimate significantly changed, depreciation and amortization in thefuture shall be adjusted accordingly.
38. Changes in Accounting Policies, Accounting Estimates
NoneVI. Taxation
1. The main applicable tax and rate to the Group as follows:
Tax Tax base Tax rateValue-added tax(VAT)
Sales revenue or Purchase 6%、9%、10%、13%、16%City constructiontax
Value-added tax payables 7%Education surcharge
Value-added tax payables 3%Local educationsurcharge
Value-added tax payables 2%Enterprise incometax(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 meterOther tax According to the relevant
provisions of the state and localNotes for tax entities with different EIT rateTax entities EIT rateBingshan 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%Bingshan Technology Service （Dalian） Co.,Ltd.
15%Dalian Bingshan Engineering&Trading Co.,Ltd25%Dalian Universe Thermal Technology Co., Ltd.
15%Dalian New Meica Electronics Technology Co., Ltd
15%
2. Tax preference
The Company obtained the qualification of high and new technology enterprises on 3rd December,2020 approved by Dalian Science Technology Bureau, Dalian Finance Bureau, Dalian State TaxBureau and Local tax Bureau. The Certificate No. is GR202021200646, and the validity duration isthree years. According to the tax law, the Company can be granted for the preferential tax policy ofenterprise income tax rate of 15% in three years.The Company’s subsidiary, Dalian Bingshan Air-conditioning Equipment Co., Ltd. obtained thequalification of high and new technology enterprises on 3rd December, 2020 approved by DalianScience Technology Bureau, Dalian Finance Bureau, Dalian State Tax Bureau and Local taxBureau. The Certificate No. is GR202021200672, and the validity duration is three years.
According to the tax law, Bingshan Air-conditioning can be granted for the preferential tax policyof enterprise income tax rate of 15% in three years.The Company’s subsidiary, Dalian Bingshan Guardian Automation Co., Ltd. obtained thequalification of high and new technology enterprises on 16th November, 2018 approved by DalianScience Technology Bureau, Dalian Finance Bureau, Dalian State Tax Bureau and Local taxBureau. The Certificate No. is GR20181200562, and the validity duration is three years. Accordingto the tax law, Bingshan Guardian can be granted for the preferential tax policy of enterpriseincome tax rate of 15% in three years.The Company’s subsidiary, Wuhan New World Refrigeration Industrial Co., Ltd obtained thequalification of high and new technology enterprises on 15th November, 2018 approved by HubeiScience Technology Bureau, Hubei Finance Bureau, Hubei State Tax Bureau and Hubei Local taxBureau. The Certificate No. is GR201842000605, and the validity duration is three years.According to the tax law, Wuhan New World Refrigeration can be granted for the preferential taxpolicy of enterprise income tax rate of 15% in three years.The Company’s subsidiary, Dalian Universe Thermal Technology Co., Ltd. obtained thequalification of high and new technology enterprises on 3rd December, 2020 approved by DalianScience Technology Bureau, Dalian Finance Bureau, Dalian State Tax Bureau and Local taxBureau. The Certificate No. is GR202021200570, and the validity duration is three years.According to the tax law, Universe can be granted for the preferential tax policy of enterpriseincome tax rate of 15% in three years.The Company’s subsidiary, Dalian New Meica Electronics Technology Co., Ltd obtained thequalification of high and new technology enterprises on 3rd December, 2020 approved by DalianScience Technology Bureau, Dalian Finance Bureau, Dalian State Tax Bureau and Local taxBureau. The Certificate No. is GR202021200699, and the validity duration is three years.According to the tax law, New Meica can be granted for the preferential tax policy of enterpriseincome tax rate of 15% in three years.VII. Notes to Consolidated Financial Statements
1. Cash and cash in bank
Item Closing Balance Opening BalanceCash on hand
37,599.67
99,580.64
Cash in bank
351,737,315.42
443,177,237.30
Other cash and cash equivalents
50,887,086.77
79,381,687.85
Total
402,662,001.86
522,658,505.79
Note: The total amount of restricted monetary funds at the end of the period was 50,887,086.77 Yuan,including 30,671,478.54 Yuan for bank acceptance, 5,987,639.95 Yuan for letter of credit, 7,793,072.96Yuan for letter of guarantee, 1,000,000.00 Yuan for migrant workers, and 5,434,895.32 Yuan for bankaccounts frozen due to litigation.
2. Notes receivable
(1) Category of notes receivable
Items Closing Balance Opening BalanceBank acceptance notes
174,585,498.27
163,956,682.86
Commercial acceptance notes
7,369,594.80
2,473,682.88
Total
181,955,093.07
166,430,365.74
Items
Closing Balance Opening BalanceBookingbalance
Provision for
bad debts
Bookvalue
Booking balance
Provision for
bad debts
BookvalueAmount
% Amount % Amount % Amount
%
Including:
Notesreceivable withprovision forbad debts bycombination
182,511,498.27
100.00
556,405.20
0.30
181,955,093
.07
166,617,129.06
100.00
186,763.32
0.11
166,430,365.
Including:
Bankacceptance bill
174,585,498.27
95.66
174,585,498.
163,956,682.86
98.40
163,956,682.86
tradeacceptancedraft
7,926,000.00
43.34
556,405.20
7.02
7,369,594.80
2,660,446.20
1.60
186,763.32
7.02
2,473,682.88
Total
182,511,498.27
100.00
556,405.20
0.30
181,955,093.
166,617,129.06
100.00
186,763.32
0.11
166,430,365.74
Provision for bad debts by combination:
Items
Closing BalanceBooking balance Bad debt provision Provision ratioTrade acceptance
draft
7,926,000.00
556,405.20
7.02%
Instructions for determining the basis for this combination:
If the bad debt provision for bills receivable is accrued according to the general model of expectedcredit loss, please refer to the disclosure method of other receivables to disclose the relevantinformation of bad debt provision:
?Applicable RNot applicable
(2) Provision for bad debts for the current period:
Provision for bad debts in the current period:
Category
Openingbalance
Change during the yearClosingBalanceAccrued Collected/reversed
Written-off
OthersBad debtprovision fornotes receivable
186,763.32
369,641.88
556,405.20
Total
186,763.32
369,641.88
556,405.20
Among them, the amount of bad debt provision recovered or reversed in the current period isimportant:
?Applicable RNot applicable
(3)Notes receivable pledged by the company at the end of the period
Items Closing pledged amountBank acceptance notes
4,810,536.65
Total
4,810,536.65
(4) Notes receivable endorsed or discounted but not mature at the end of year:
Item Closing amount no more
recognized
Closing amount still
recognizedBank acceptance notes
142,918,849.10
Total
142,918,849.10
3. Accounts receivable
(1) Category of accounts receivable
Items
Closing Balance Opening BalanceBookingbalance
Provision for
bad debts
Bookvalue
Booking balance
Provision forbad debts
BookvalueAmount
% Amount % Amount % Amount
%
Accountsreceivable withprovision forbad debts bycombination
1,355,303,774.28
100.0
373,295,122.39
27.54
982,008,651.
1,193,312,546.52
100.00
371,763,867.6
31.15
821,548,67
8.85
Total
1,355,303,774.28
100.0
373,295,122.39
27.54
982,008,651.
1,193,312,546.52
100.00
371,763,867.6
31.15
821,548,67
8.85
Provision for bad debts by combination:
Items
Closing Balance
Booking balance Provision %within 1 year749,445,703.10
52,611,088.36
7.02
1-2 years150,287,415.03
25,158,113.28
16.74
2-3 years63,997,681.96
19,730,485.35
30.83
3-4 years159,385,816.51
78,625,023.28
49.33
4-5 years125,733,377.22
90,716,631.66
72.15
more than 5 years106,453,780.46
106,453,780.46
100.00
Total
1,355,303,774.28
373,295,122.39
Instructions for determining the basis for this combination:
If the bad debt provision for accounts receivable is accrued according to the general model ofexpected credit loss, please refer to the disclosure method of other receivables to disclose therelevant information of bad debt provision:
?Applicable RNot applicable
Disclosure by age
Aging Closing BalanceWithin1 year749,445,703.10
1to 2 years
150,287,415.03
2 to 3 years
63,997,681.96
More than 3 years391,572,974.19
3 to 4 years159,385,816.51
4 to 5 years125,733,377.22
More than 5 years106,453,780.46
Total1,355,303,774.28
2) Bad debt provision accrued and written-off (withdraw)
Provision for bad debts in the current period:
Category
Openingbalance
Change during the periodClosingBalanceAccrued Collected/reversed
Written-off
OthersBad debtprovisionforaccountsreceivable
371,763,867.67
11,270,943.86
46,564.77
9,693,124.37
373,295,122.39
3) Accounts receivable written off in current period
Item Written off amountReceivable actually written off 9,693,124.37
Among them, the important accounts receivable write-off situation:
Company
The natureof accountsreceivable
Written off
amount
Reason forwritten off
Written off
proceduresperformed
Whether the
payment iscaused by a
relatedtransactionTianjin JitaiTechnology
Co., Ltd.
payment 574,259.50
Quality
issues
BoardResolution
No
AnyangZhongpinFood Co.,
Ltd.
payment 1,520,000.00
Client has
been bankrupted
BoardResolution
NoSanhui Food
Logistics(Tianjin) Co.,
Ltd.
payment 1,189,926.00
Agreement
BoardResolution
NoQingdao
HaiheEngineeringGroup Co.,
Ltd.(Shandong
Yurui)
payment 903,000.00
Client hasbeen bankrupted
BoardResolution
No
HebeiHongdaoTechnology
Co., Ltd.
payment 1,257,965.20
Client has no
executable
assets
BoardResolution
NoTotal 5,445,150.70
4) The top five significant accounts receivable categorized by debtors
Company
ClosingBalance
% of thetotal AR
Closing Balance
of Provision
Xinjiang Silk Road Tianshan International Food CityInvestment Co., Ltd.
41,310,655.23
3.05
2,900,008.00
Hualu Engineering Technology Co., Ltd. 40,138,250.00
2.96
2,817,705.15
Panasonic Cold Chain (Dalian) Co., Ltd. 38,098,054.10
2.81
2,674,483.40
Xinyi Yuanda Construction and InstallationEngineering Co., Ltd.
32,748,744.00
2.42
25,281,907.38
Dalian Xinghaiwan Management and DevelopmentCenter
24,020,836.00
1.77
18,577,302.85
Total 176,316,539.33
13.01
4. Receivables financing
Items Closing Balance Opening BalanceNotes receivable
24,737,543.92
43,704,310.38
Total24,737,543.92
43,704,310.38
Increase and decrease of receivables in financing capital period and changes in fair value?Applicable RNot applicable
If the provision for impairment of receivable financing is accrued according to the general model ofexpected credit loss, please refer to the disclosure method of other receivables to disclose therelevant information of impairment provision:
?Applicable RNot applicable
5. Accounts paid in advance
(1) Aging of accounts paid in advance
Items
Closing Balance Opening BalanceAmount Percentage Amount PercentageWithin 1 year 151,577,102.96
67.21%
146,457,045.63
80.16%
1 to 2 years 42,665,123.96
18.92%
16,304,629.82
8.92%
2 to 3 years 16,412,801.81
7.28%
12,765,104.33
6.99%
Over 3 years 14,882,242.56
6.59%
7,174,623.77
3.93%
Total 225,537,271.29
182,701,403.55
Significant prepayment over 1 yearCompany
ClosingBalance
Aging
Unsettled ReasonsDalian Hengtong Refrigeration Equipmentengineering Co., Ltd
5,720,000.00
2-3years3-4years
Contract is not fully implementedDalian Shengda Construction Engineering Co., Ltd.
3,878,617.15
| Within 1 year |
1-2 years
Contract is not fully implementedPT MULTI SUKSES ENGINEERING Indonesia
2,537,821.33
| Within 1 year |
1-2 years
Contract is not fully implementedNingbo Qianghao Mould Co., Ltd.
1,960,914.00
| Within 1 year |
1-2 years
Contract is not fully implementedNanjing Bingshan Electromechanical Equipment Co.,Ltd.
1,785,408.00
1-2 years
Contract is not fully implementedTotal
15,882,760.48
— —
(2) The top five significant accounts paid in advance categorized by debtors
Company Closing Balance Aging
% of the totaladvances to suppliers
Shenyang Baosteel Northeast Trading Co., Ltd. 19,521,694.79
Within 1 year
8.66
Dalian Shentong Electric Co., Ltd. 12,843,114.98
Within 1 yea
5.69
Shanghai Qingneng Cold Chain Equipment Engineering Co., Ltd. 11,969,675.07
Within 1 yea
5.31
Shanghai Daleng Refrigeration and Air Conditioning Equipment Co.,Ltd.
9,226,800.00
Within 1 yea
4.09
Dalian Jindi Construction Labor Service Co., Ltd. 7,789,238.00
Within 1 yea
3.45
Total 61,350,522.84
27.2
6. Other receivables
Items Closing Balance Opening BalanceDividends receivable
12,864,770.89
1,003,568.75
Other receivable
170,075,172.03
59,336,527.70
Total 182,939,942.92
60,340,096.45
(1) Dividends receivable
1) Classification of Dividends Receivable
Items(or Investee) Closing Balance Opening BalanceGuotai JunanSecurities Co., Ltd.
7,418,805.44
952,000.00
Wuhan Iron and SteelCo., Ltd.
25,923.75
51,568.75
Jiangsu JingxueEnergy SavingTechnology Co., Ltd.
4,732,344.00
Dalian BingshanGroup HuahuidaFinancial Leasing Co.,Ltd.
687,697.70
Total 12,864,770.89
1,003,568.75
2)Provision for bad debts
?Applicable RNot applicable
(2). Other receivables
1) Other receivables categorized by nature
Nature Closing Balance Opening BalanceGuarantee deposits31,668,280.89
26,933,345.60
Petty cash
7,048,388.82
5,654,074.94
Receivables and Payables37,746,399.88
36,138,235.04
Others
2,855,483.79
1,609,350.55
Thermoking Share Transfer102,206,391.05
Total
181,524,944.43
70,335,006.13
2) Provision for bad debts
Provision for bad debts
The first phase The second phase The third phase
Total
next 12 months
Expected Credit Lossfor the duration (NoCredit Devaluation)
Expected Credit Loss for
the duration (Creditimpairment has occurred)
Expected credit losses in the
Balance on January 1, 2022
6,828,531.31
4,169,947.12
10,998,478.43
The balance of January 1, 2022inthe current period
transfer to the third phase
4,169,947.12
4,169,947.12
Provision for bad debts
451,293.97
451,293.97
Balance on June 30, 2022
6,828,531.31
4,621,241.09
11,449,772.40
Changes in book balances with significant changes in loss provisions in the current period?Applicable RNot applicableDisclosure by age
Aging Closing BalanceWithin 1 year
164,068,369.35
1-2 years
3,627,649.31
2-3 years
4,110,018.69
Over 3 years
9,718,907.08
3-4 years
3,461,616.39
4-5 years
1,961,060.69
Over 5 years
4,296,230.00
Total
181,524,944.43
3) Provisions for bad debts accrued, recovered or reversed in the current periodProvision for bad debts in the current period:
Category
Openingbalance
Change during the yearClosingBalanceAccrued
Collected/reversed
Written-off
Others
Provision forbad debts ofotherreceivables
10,998,478.43
451,293.97
11,449,772.40
Total 10,998,478.43
451,293.97
11,449,772.40
4) Other receivables from the top 5 debtors
Name Category
ClosingBalance
Aging
% ofthe total
OR
Closing Balance
of Provision
Trane Technologies Europe Holdings
Stocktransfer
102,206,391.05
Within 1
year
56.30
Hangzhou Zhonghong New EnergyTechnology Co., Ltd.
Returnpayment
24,595,000.00
Within 1
year
13.55
1,025,611.50
The People's Insurance Company of ChinaDalian Branch
Compensa
tionpayments
5,000,000.00
Within 1
year
2.75
208,500.00
Cangzhou Lingang Renguo Chemical Co.,Ltd.
Margin 2,000,000.00
Within 1
year
1.10
83,400.00
Moyu County Agricultural Bureau XC19-034Contract Warranty Fund
Margin 1,892,400.00
1-2 years2-3 years
1.04
503,189.16
Total 135,693,791.05
74.75
1,820,700.66
7. Inventories
(1) Categories of inventories
Item
Closing BalanceBook value Provision for decline Net book valueRaw materials183,487,513.10
4,570,316.95
178,917,196.15
Working in progress171,173,955.58
1,929,842.21
169,244,113.37
Finished goods318,968,688.09
28,665,326.94
290,303,361.15
Contract performance cost358,969,740.68
7,604,743.83
351,364,996.85
goods shipped in transit29,557,522.14
29,557,522.14
Commissioned processingmaterials
1,723,151.16
1,723,151.16
Low-value consumable200,593.46
200,593.46
Self-manufacturedsemi-finished products
28,607,876.30
28,607,876.30
House acquired as paymentfor a debt
9,282,384.10
5,203,103.50
4,079,280.60
Total1,101,971,424.61
47,973,333.43
1,053,998,091.18
(Continue)
Item
Opening BalanceBook value Provision for decline Net book valueRaw materials 166,815,875.73
4,570,316.95
162,245,558.78
Working in progress171,554,710.97
1,929,842.21
169,624,868.76
Finished goods 300,140,274.98
29,448,083.12
270,692,191.86
Contract performancecost
295,750,380.56
11,185,200.11
284,565,180.45
goods shipped in transit
86,049,156.11
86,049,156.11
Commissionedprocessing materials
887,585.94
887,585.94
Low-value consumable51,817.59
51,817.59
Self-manufacturedsemi-finished products
30,747,861.83
30,747,861.83
House acquired aspayment for a debt
14,866,010.00
5,203,103.50
9,662,906.50
Total1,066,863,673.71
52,336,545.89
1,014,527,127.82
(2) Provision for impairment of inventories and provision for impairment of contractperformance costsItem
OpeningBalance
Increase Decrease
ClosingBalanceAccrual
Other
Reverse/Written- off
Otherstransferred
Raw materials
4,570,316.95
4,570,316.95
Working in progress
1,929,842.21
1,929,842.21
Finished goods
29,448,083.12
782,756.18 28,665,326.94
Item
OpeningBalance
Increase Decrease
ClosingBalanceAccrual
Other
Reverse/Written- off
Otherstransferred
Contract performance cost
11,185,200.11
3,580,456.28 7,604,743.83
House acquired as paymentfor a debt
5,203,103.50
5,203,103.50
Total
52,336,545.89
0.00 0.00 4,363,212.46 47,973,333.43
8. Contract assets
Item
Closing Balance Opening BalanceBook value
Provision for
decline
Net book
value
Book value
Pro
| Pro | vision for |
decline
Net book
valueUnexpiredwarranty money
142,784,708.83
16,620,265.89 126,164,442.94
125,891,499.90
16,031,841.11
109,859,658.79
Total142,784,708.83
16,620,265.89 126,164,442.94
125,891,499.90
16,031,841.11
109,859,658.79
If the provision for impairment of contract assets is accrued according to the general model ofexpected credit loss, please refer to the disclosure method of other receivables to disclose therelevant information of impairment provision:
?Applicable RNot applicableProvision for bad debt
Item
Accrued Collected/reversed
Written-off
reason
Unexpired warranty money588,424.79
Total588,424.79
--
9. Non-current assets maturing within one year
Item Closing Balance Opening BalanceLong-term receivables due within one year
14,990,989.30 14,990,989.30Total
14,990,989.30 14,990,989.30
10. Other current assets
Item Closing Balance Opening BalancePrepaid income tax presentedat net amount after offsetting
18,348.62
380,483.32
Input VAT to be deducted
11,631,457.88
23,989,939.28
Prepaid expenses
375,752.93
154,654.11
Prepaid turnover tax
5,651,739.77
Total
17,677,299.20
24,525,076.71
11.Long-term equity investments
Investee
Beginning
balance
Increase/Decrease
Ending balance
Provision forimpairmentIncreased Decreased
Gains and
lossesrecognizedunder the
equitymethod
Adjustmen
t of othercomprehen
siveincome
Change of
otherequity
Cash bonus
or profitsannounced
to issue
Provision
forimpairment
of thecurrentperiod
Others
Panasonic Cold Chain (Dalian) Co.,Ltd.
90,330,037.43
-17,939,591.19
72,390,446.24
Panasonic Compressor (Dalian) Co.,Ltd.
460,060,249.49
18,414,454.28
34,122,000.00
444,352,703.77
Dalian Benzhuang Chemical Co., Ltd.8,926,266.52
384,787.54
9,311,054.06
Songzhi Dayang Cooling and HeatingTechnology (Dalian) Co., Ltd.
58,799,068.28
1,211,480.90
60,010,549.18
Beijing Huashang BingshanRefrigeration and Air ConditioningEquipment Co., Ltd.
2,139,942.18
3,596.55
2,143,538.73
Dalian Fuji Bingshan Vending MachineCo., Ltd.
148,656,014.75
-5,441,140.87
143,214,873.88
Lingzhong Bingshan Refrigeration(Dalian) Co., Ltd.
14,923,803.87
401,999.21
15,325,803.08
Dalian Bingshan Group HuahuidaFinancial Leasing Co., Ltd.
44,789,319.55
511,557.51
687,697.70
44,613,179.36
Jiangsu Jingxue Energy SavingTechnology Co., Ltd.
201,731,528.04
3,255,908.10
4,732,560.00
200,255,092.14
Panasonic Refrigeration System(Dalian) Co., Ltd.
28,480,784.93
1,517,604.68
1,527,045.45
28,471,344.16
Dalian Bingshan Metal TechnologyCo., Ltd.
168,294,942.93
14,605,911.92
182,900,854.85
Wuhan Scaf Power Control EquipmentCo., Ltd.
4,372,575.48
28,833.46
4,401,408.94
Total1,231,504,533.45
16,955,402.09
41,069,087.15
1,207,390,848.39
12. Other non-current financial assets
Item Closing Balance Opening BalanceFinancial assets classified as fair value throughprofit or loss
167,515,974.19
261,410,664.61
Total
167,515,974.19
261,410,664.61
13. Investment property
Item
Property&
Building
Land-use-rights
Construction in
progress
TotalI. Initial Cost
1. Opening Balance
230,594,490.07
26,094,438.38
256,688,928.45
2. Increase
(1) Outsourcing
(2)Inventory\fixed
assets\construction-in-progresstransfer
(3)Business combination
increase
3. Decrease
(1) Disposal
(2)Transferred to other
4. Closing Balance
230,594,490.07
26,094,438.38
256,688,928.45
II. Accumulated Depreciationand AccumulatedAmortization
1. Opening Balance
123,629,414.79
12,306,704.05
135,936,118.84
2. Increase
3,112,769.07
260,944.38
3,373,713.45
(1)Provision or amortization
3,112,769.07
260,944.38
3,373,713.45
3. Decrease
(1) Disposal
(2) Transferred to other
4. Closing Balance
126,742,183.86
12,567,648.43
139,309,832.29
III. Impairment Reserve
1. Opening Balance
2. Increase
(1)Provision
3. Decrease
(1) Disposal
(2) Transferred to other
4. Closing Balance
IV. Book Value
1. Closing book value
103,852,306.21
13,526,789.95
117,379,096.16
2. Opening book value
106,965,075.28
13,787,734.33
120,752,809.61
14. Fixed assets
Items Closing Book Value Opening Book ValueFixed asset831,680,902.75
855,395,405.85
Total831,680,902.75
855,395,405.85
(1) Fixed assets detail
Item
Property&
buildings
MachineryEquipment
Transportation
Equipment
OtherEquipment
TotalI. Initial Cost695,343,883.14
617,253,312.03
12,914,199.47
61,535,741.18
1,387,047,135.82
1. Opening Balance
695,343,883.14
617,253,312.03
12,914,199.47
61,535,741.18
1,387,047,135.82
2. Increase
987,072.39
13,435,837.39
374,178.83
2,253,699.10
17,050,787.71
(1) Purchase
13,064,489.32
374,178.83
417,413.39
13,856,081.54
(2) Transferred
fromconstruction-in-progress
987,072.39
371,348.07
1,836,285.71
3,194,706.17
(3) Acquired from
businesscombination
3. Decrease
6,996,198.69
1,411,501.40
1,629,825.83
10,037,525.92
(1) Dispose or
scrap
6,996,198.69
1,411,501.40
1,629,825.83
10,037,525.92
4. Closing Balance
696,330,955.53
623,692,950.73
11,876,876.90
61,770,034.45
1,393,670,817.61
II. AccumulatedDepreciation
131,345,400.98
341,061,738.95
8,806,440.56
50,162,389.94
531,375,970.43
1. Opening Balance
131,345,400.98
341,061,738.95
8,806,440.56
50,162,389.94
531,375,970.43
2. Increase
9,040,322.97
24,787,137.13
339,270.31
2,578,191.73
36,744,922.14
(1)Accrued
9,040,322.97
24,787,137.13
339,270.31
2,578,191.73
36,744,922.14
3. Decrease
73,881.24
3,175,366.69
911,486.07
1,466,843.25
5,627,577.25
(1) Disposal or
scrap
73,881.24
3,175,366.69
911,486.07
1,466,843.25
5,627,577.25
4. Closing Balance
140,311,842.71
362,673,509.39
8,234,224.80
50,494,578.42
561,714,155.32
III. ImpairmentReserve
1. Opening Balance
275,759.54
275,759.54
2. Increase
(1)Accrued
3. Decrease
(1) Disposal or
Item
Property&
buildings
MachineryEquipment
TransportationEquipment
OtherEquipment
Totalscrap
4. Closing Balance
275,759.54
275,759.54
IV. Book Value
1. Closing book
value
556,019,112.82
260,743,681.80
3,642,652.10
11,275,456.03
831,680,902.75
2. Opening book
value
563,998,482.16
275,915,813.54
4,107,758.91
11,373,351.24
855,395,405.85
15. Construction-in-progress
Item Closing book value Opening book valueConstruction-in-progress50,556,431.55
38,974,478.45
Total50,556,431.55
38,974,478.45
(1) Construction in progress details
Item
Closing Balance Opening BalanceBook Balance Provision
Book Value Book Balance Provision
Book ValueRenovation ofbuildings andancillaryfacilities
3,067,968.64
3,067,968.64
4,330,904.06
4,330,904.06
Installation andrenovation ofmachine toolsand mechanicalequipment
38,206,637.12
38,206,637.12
24,409,028.60
24,409,028.60
SmartManufacturingSoftware
1,087,160.60
1,087,160.60
1,069,880.60
1,069,880.60
EquipmentFinancialLeasing Project
9,164,665.19
970,000.00
8,194,665.19
9,164,665.19
9,164,665.19
Total
51,526,431.55
970,000.00
50,556,431.55
38,974,478.45
38,974,478.45
(2) Change in the significant construction in progress
Name
Budget
Openi
ngBalanc
e
Increa
se
Amou
nttransferred to
fixedassets
Otherreducti
ons
Closin
gBalance
Percen
t ofinvestmentagainstbudget
Progre
ssofconstruction
Accumulatedcapital
izedinteres
t
Including:
Accumulatedcapital
izedinterest of the
year
Interes
tcapitalization
rate(%
)
Source
offunds
Renovation ofbuildingsandancillaryfacilities
15,241,000.0
4,330,904.06
317,367.29
1,580,302.71
3,067,968.64
30.00%
30%
Installationandrenovationof machinetools andmechanicalequipment
50,358,032.0
24,409,028.6
13,826,812.0
29,203.54
38,206,637.1
76.00%
76%
SmartManufacturingSoftware
3,330,750.00
1,069,880.60
17,280.00
1,087,160.60
33.00%
33%
EquipmentFinancialLeasingProject
15,020,000.0
9,164,665.19
9,164,665.19
61.00%
61%
Total
83,949,782.0
38,974,478.4
14,161,459.3
1,609,506.25
51,526,431.5
16. Right of use assets
Item Buildings
Mechanicalequipment
Transportation Equipment
Electronicequipment
TotalI. Initial Cost
1. Opening Balance
4,827,598.49
28,234,690.39
334,540.86
526,894.11
33,923,723.85
2. Increase
3. Decrease
9,575,952.95
9,575,952.95
4. Closing Balance
4,827,598.49
18,658,737.44
334,540.86
526,894.11
24,347,770.90
II.Accumulateddepreciation
1. Opening Balance
1,654,921.59
8,078,883.59
111,513.62
143,701.68
9,989,020.48
2. Increase
1,901,829.31
1,311,829.19
3,213,658.50
(1)Accrued
1,901,829.31
1,311,829.19
3,213,658.50
3. Decrease
(1) Disposal
4,962,499.34
4,962,499.34
4. Closing Balance
3,556,750.90
9,390,712.78
111,513.62
143,701.68
8,240,179.64
III. Impairment Reserve
1. Opening Balance
2. Increase
(1)Accrued
3. Decrease
(1) Disposal
Item Buildings
Mechanicalequipment
Transportation Equipment
Electronicequipment
Total
4. Closing Balance
IV. Book Value
1. Closing book value
1,270,847.59
9,268,024.66
223,027.24
383,192.43
16,107,591.26
2. Opening book value
3,172,676.90
20,155,806.80
223,027.24
383,192.43
23,934,703.37
17. Intangible assets
(1) Intangible assets list
Item
Land use
right
Patenttechnology
Non Patenttechnology
Others TotalI. Initial Cost
1. Opening Balance
151,187,270.24
17,630,188.82
5,000,000.00
34,007,344.48
207,824,803.54
2. Increase
674,988.09
674,988.09
(1) Purchase
674,988.09
674,988.09
(2) Internal R&D
(3)Acquired from business
combination
3. Decrease
(1) Disposal
4. Closing Balance
151,187,270.24
17,630,188.82
5,000,000.00
34,682,332.57
208,499,791.63
II.Accumulatedamortization
1. Opening Balance
39,273,017.51
7,611,159.85
3,000,004.00
15,347,884.08
65,232,065.44
2. Increase
1,523,216.67
791,799.14
214,480.34
2,324,010.61
4,663,659.26
(1)Accrued
1,523,216.67
791,799.14
2,324,010.61
4,663,659.26
3. Decrease
(1) Disposal
4. Closing Balance
40,820,867.02
8,402,958.99
3,000,004.00
17,671,894.69
69,895,724.70
III. Impairment Reserve
1. Opening Balance
2. Increase
(1)Accrued
3. Decrease
4. Closing Balance
IV. Book Value
1. Closing book value
110,366,403.22
9,227,229.83
1,999,996.00
17,010,437.88
138,604,066.93
2. Opening book value
111,914,252.73
10,019,028.97
1,999,996.00
18,659,460.40
142,592,738.10
18. Goodwill
(1) Original cost of goodwill
Name
OpeningBalance
Increased during
current year
Decreased during
current year
ClosingBalanceEnterprises mergerincrease
Other
Disposal
Other
Dalian Nevis Cooling andHeating Technology Co.,Ltd.
1,440,347.92
1,440,347.92
Dalian Bingshan GroupEngineering Co., Ltd.
310,451.57
310,451.57
Total1,750,799.49
1,750,799.49
19. Long-term unamortized expense
Item
OpeningBalance
Increase
Amortization
OtherDecrease
ClosingBalanceEmployee’s dormitory use right1,735,213.74
69,239.16
1,665,974.58
Renovation and rebuilding1,020,822.14
53,145.00
701,952.14
265,725.00
Membership fee407,000.00
8,250.00
398,750.00
Entry fee for the use of hot andcold machine technology
93,356.25
93,356.25
0.00
New plant greening fee4,832,292.10
490,847.60
4,386,234.34
Accounts Receivable Factoring
598,200.40
598,200.40
Amortization of jigs and molds
195,538.35
150,748.51
Total
8,088,684.23
793,738.75
714,838.01
701,952.14
7,465,632.83
20. Deferred tax assets and deferred tax liabilities
(1) Deferred tax assets without offsetting
Item Closing Balance Opening Balance
Deductibletemporarydifference
Deferred taxassets
Deductible temporary
difference
Deferred tax
assetsProvision forimpairment of assets
385,301,299.99
77,369,493.54
367,572,645.45
77,433,815.32
Unrealized profit frominternal transaction
63,838,006.28
10,533,271.04
55,608,764.16
10,412,376.27
Deductible loss
15,173,783.01
2,276,067.45
13,555,883.61
2,033,382.54
Total
464,313,089.28
90,178,832.03
436,737,293.22
89,879,574.13
(2) Deferred tax liabilities without offsetting
Item Closing Balance Opening Balance
Taxable temporarydifference
Deferred tax
liabilities
Taxable temporary
difference
Deferred tax
liabilitiesChanges in the fair valueof other non-current
154,922,113.60
23,238,317.04
237,308,998.02
35,596,349.70
financial assetsTotal
154,922,113.60
23,238,317.04
237,308,998.02
35,596,349.70
(2) Deferred income tax assets or liabilities shown net of offset
Item
Deferred tax assets andliabilities at the end ofthe balance
The ending balance of a
deferred tax asset orliability after offset
The amount of deferredtax assets and liabilitiesoffset at the beginning of
the period
a deferred tax asset or
liability after offsetDeferred tax assets
The beginning balance of
90,178,832.03
89,879,574.13
Deferred tax liabilities
23,238,317.04
35,596,349.70
(4) Unrecognized deferred tax assets details
Item Closing Balance Opening BalanceDeductible temporary difference
17,516,837.42
7,106,167.83
Deductible loss
118,270,112.74
111,303,027.15
Total
135,786,950.16
118,409,194.98
(5) Unrecognized deductible loss of deferred tax assets expired years
Year Closing Balance Opening Balance Notes2022
716,158.09
202316,458,262.38
16,458,262.38
202461,554,422.97
61,554,422.97
202521,436,832.18
21,436,832.18
2026124,607,476.02
124,607,476.02
32,599,505.16
Total
256,656,498.71
224,773,151.64
21. Short-term loan
(1) Category of short term loan
Loan category Closing Balance Opening BalancePledge loan
6,538,425.00
Mortgage loan
9,025,000.00
Credit loan
240,000,000.00
230,373,666.72
Total
240,000,000.00
245,937,091.72
22. Notes payable
Notes category Closing Balance Opening BalanceCommercial acceptance notes
310,250,185.76
372,141,300.89
Bank acceptance notes
10,427,400.00
7,891,738.67
Total
320,677,585.76
380,033,039.56
23. Accounts payable
(1) Accounts payable
Item Closing Balance Opening BalanceMaterial payments
591,663,389.64
558,353,834.37
Project payments
437,029,205.69
328,569,617.62
Equipment payments
75,044,432.33
31,092,321.64
Others
53,804,055.62
1,856,153.90
Total
1,157,541,083.28
919,871,927.53
(2) Accounts payable with age over 1 year
Name of company Closing Balance
Reason of unpaid or notcarried forwardShaanxi Changrun Environmental Engineering Co., Ltd.
5,207,759.44
Not due for paymentHaoxing Energy Investment (Beijing) Asset ManagementCo., Ltd.
4,878,499.00
Not due for paymentLixingkai (Beijing) Energy System Technology Co., Ltd.
4,772,705.82
Not due for paymentWuhan Kaixing Economic Development Co., Ltd.
4,386,808.45
Not due for paymentHeilongjiang Longcold Technology Co., Ltd.
3,209,930.00
Not due for payment
Total22,455,702.71
24. Contract Liabilities
Item Closing Balance Opening BalanceReceived in advance due fromunrealized revenue
445,660,584.96
499,719,963.40
Total
445,660,584.96
499,719,963.40
Significant change on the book valueItem Change amount Change reasonAdvance payment-54,059,378.44
According to the agreement,advance payment for goodsTotal-54,059,378.44
25. Employee’s payable
(1) Category of employee’s payable
Item Opening
Balance
Increase Decrease Closing
BalanceShort-term employee’spayable
35,148,570.37
141,270,325.52
167,621,861.96
8,797,033.93
Post-employment benefit–defined contribution plan
212.11
16,040,552.59
15,730,920.12
309,844.58
Termination benefits
188,952.39
188,952.39
Total
35,148,782.48
157,499,830.50
183,541,734.47
9,106,878.51
(2) Short-term employee’s payables
Item Opening Balance
Increase Decrease Closing Balance
Salaries, bonus,allowance, andsubsidy
31,199,563.29
111,873,626.70
136,828,539.75
6,244,650.24
Welfare
1,849,331.65
6,663,733.51
7,298,948.77
1,214,116.39
Social insurance
305,854.01
11,001,269.00
11,298,118.34
9,004.67
Include: Medical
insurance
7,348,601.30
7,348,601.30
On-dutyinjuryinsurance
661.20
1,107,549.62
1,099,206.15
9,004.67
Maternityinsurance
942,078.31
942,078.31
Housing funds
9,275,257.05
9,312,894.12
-37,637.07
Labor union andtraining expenses
1,793,821.42
2,115,305.81
2,542,227.53
1,366,899.70
Others
341,133.45
341,133.45
Total
35,148,570.37
141,270,325.52
167,621,861.96
8,797,033.93
(3) List of setting withdrawal plans
Item Opening
Balance
Increase Decrease Closing
BalanceBasic retirement insurance
15,696,918.47
15,400,264.71
296,653.76
Unemployment InsurancePremium
212.11
343,634.12
330,655.41
13,190.82
Total
212.11
16,040,552.59
15,730,920.12
309,844.58
26. Tax payable
Item Closing Balance Opening BalanceValue-added tax11,307,723.35
8,428,289.41
Enterprise income tax15,283,505.24
825,185.23
Individual income tax 2,226,166.67
471,053.12
City maintenance and construction tax1,095,832.62
178,955.65
Real estate tax468,885.10
1,910,131.37
Land use tax531,073.94
1,094,769.07
Stamp duty 646,889.47
477,653.78
Education surcharge461,852.08
127,825.46
Green tax1,039.65
984.73
Total32,022,968.12
13,514,847.82
27. Other accounts payable
ItemClosing Balance Opening BalanceDividend payable10,765,281.07
3,008,156.00
Other accounts payable36,914,318.16
52,275,984.21
Total
47,679,599.23
55,284,140.21
(1). Dividend payable
Item Closing Balance Opening BalanceOrdinary share dividend
10,765,281.07
3,008,156.00
Total10,765,281.07
3,008,156.00
（2）Other accounts payable
Other payables categorized by payments naturePayments nature
Closing Balance Opening BalanceDeposit and security deposit 9,796,962.19
11,879,889.59
Reimbursed but not paid7,770,141.86
10,784,375.08
Collection 7,288,574.15
2,449,487.90
Others 12,058,639.96
27,162,231.64
Total
36,914,318.16
52,275,984.21
28. Non-current liabilities due within one year
Item Closing Balance Opening Balance
Long-term payables due within one year13,755,120.00
13,876,415.99
Lease liabilities due within one year9,144,319.44
10,298,972.13
Total22,899,439.44
24,175,388.12
29. Other current liabilities
Item Closing balance Opening balanceNotes payable endorsed not derecognized153,147,054.19
143,288,366.08
Output Vat to be carried forward48,181,226.13
51,924,840.83
Total 201,328,280.32
195,213,206.91
30. Long-term loan
(1) Category of long-term loan
31. Lease liabilities
Item Closing Balance Opening BalanceLease liabilities15,761,961.12
16,861,280.02
Less: Unrecognized financingcharges
-986,540.20
-1,168,286.75
Reclassified to non-
due within one year
-9,144,319.44
current liabilities
-10,298,972.13
Total5,631,101.48
5,394,021.14
Category Closing Balance Opening BalanceGuarantee loan
140,000,000.00
150,000,000.00
Total
140,000,000.00
150,000,000.00
32. Long term accounts payable
Item Closing Balance Opening Balance
Long term accounts payable23,088,337.61
19,998,913.29
Total23,088,337.61
19,998,913.29
(1) Category by nature
Item
Closing Balance Opening Balance
Loans from financial leasing companies23,088,337.61
19,998,913.29
33. Deferred income
(1) Category of deferred income
Item Opening
Balance
Increase Decrease
ClosingBalance
Format
ionBasisGovernmentsubsidy
106,185,323.82
458,000.00
3,633,486.90
103,009,836.92
Total
106,185,323.82
458,000.00
3,633,486.90
103,009,836.92
—
(2) Government subsidy project
Government
| Government | |
| subsidy item | |
OpeningBalance
Increase
Recorded intoNon-operating
income
Amountincludedin otherincome
Offset costor expense
Otherchanges
ClosingBalance
Relatedwith
withasset/
asset/equity
equityRelocation
| Relocation | |
| compensation | |
38,990,000.00
556,998.00
38,433,002.00
Asset
Assetrelated
relatedThe Application
| The Application | |||||
| of Using NH3 | |||||
| and CO2 to | |||||
| Replace the R22 | |||||
| Screw | |||||
| Refrigerator | |||||
| Combined | |||||
| Compression | |||||
| Condensing Unit | |||||
22,505,971.44
999,766.56
2,150,620,488.00
Asset
Assetrelated
relatedRefrigeration
RefrigerationCompressor
CompressorIntelligent
IntelligentManufacturing
ManufacturingSystem Fund
3,538,360.27
System Fund
184,384.86
3,353,975.41
Asset
Assetrelated
34. Share capital
Item
Openingbalance
Increase/decrease（+、-）
ClosingbalanceNewshareissued
Sharedividend
Transferfrom capital
reserve
others
Subtotal
shares
Total
843,212,507.00 843,212,507.00
35. Capital reserves
Items Opening
Balance
Increase Decrease Closing Balance
Capital premium
669,193,413.27669,193,413.27
Ultrasonic
Ultrasonicintelligent
intelligentdefrosting
defrostingtechnology
3,421,177.42
technology
15,000.00
192,412.20
3,213,765.22
Asset
Assetrelated
relatedEnvironm
ental
Environmprotection and
protection andenergy
-saving
energyrefrigeration
refrigerationand
andconditioning
conditioningcompressor
compressortechnology
technologyindustrialization
industrializationproject
19,975,471.49
project
1,276,925.28
18,698,546.21
Asset
Assetrelated
relatedR290 replaces
R290 replacesR22 large
R22 largeindustrial screw
industrial screwunit
13,006,663.20
unit
13,006,663.20
Asset
Assetrelated
relatedR290 replaces
R290 replacesR22 in
R22 inindustrial
industrialtwin
-stage
twinscrew unit
4,747,680.00
screw unit
4,747,680.00
Asset
Assetrelated
relatedHigh
-tech
| High | |
| enterprises | |
458,000.00
408,000.00
50,000.00
Equity
Equityrelated
(equity premium)Other capital reserves
51,022,453.51 336,172.0050,686,281.51
Total
720,215,866.78 336,172.00 719,879,694.78
. Other comprehensive income
Items
OpeningBalance
2022.1-6
ClosingBalance
Amount beforeincome tax for
the current
period
Less: included inother comprehensive
income in theprevious period andtransferred to profitor loss in the currentperiod
Less: included
in othercomprehensiveincome in the
previousperiod andtransferred to
retainedearnings in thecurrent period
Less：
incometax expense
After-tax attributeto the parentcompany
After-taxattribute tominorityshareholder
| II. |
Other comprehensive income to be
2,178,681.73 2,178,681.73
| reclassified to profit or loss | ||
| Including: other comprehensive income | ||
| that | ||
can be transferred to profit or loss
2,178,681.73 2,178,681.73
under the equity methodOther comprehensive income total
2,178,681.73 2,178,681.73
Other comprehensive income total
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd. 2022Semiannual Report
37. Surplus reserves
Item Opening
Balance
Increase Decrease
ClosingBalanceStatutory surplus reserve
347,216,790.47
347,216,790.47
Discretionary surplus reserve
462,254,409.17
462,254,409.17
Total
809,471,199.64
809,471,199.64
38. Undistributed profits
Item 2022-06-30 2021-06-30Closing balance of 2021
627,764,582.32
997,601,577.97
Adjustment of the total amount of undistributedprofits at the beginning of the period (increase +,decrease -)
-79,559,636.71
Opening balance of 2022
627,764,582.32
918,041,941.26
Add: net profit attributable to shareholders ofparent company in the year
29,568,351.52
-269,059,849.96
Provision for any surplus reserves
12,785,383.91
Dividends payable for common shares
8,432,125.07
8,432,125.07
Closing balance of the current period
648,900,808.77
627,764,582.32
39. Operating revenue and cost
Items
2022.01-06 2021.01-06
Sales revenue Cost of sales Sales revenue Cost of salesRevenue fromprinciple operation
1,246,624,682.46
1,101,097,130.75
1,069,601,775.40
939,531,941.76
Revenue fromother operation
45,234,226.25
30,818,078.34
24,683,845.57
10,872,827.50
Total
1,291,858,908.71
1,131,915,209.09
1,094,285,620.97
950,404,769.26
Income related information:
Items
Division 1 TotalClassified at products type 1,246,624,682.46
1,246,624,682.46
Manufacture products 912,396,566.62
912,396,566.62
Installation work 328,784,059.27
328,784,059.27
Other products and service 5,444,056.57
5,444,056.57
Classified at geography location
domestic 1,169,857,130.73
1,169,857,130.73
76,767,551.73
76,767,551.73
40. Operating taxes and surcharges
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd. 2022Semiannual Report
Items
2022.01-06 2021.01-06
City construction tax
1,300,268.55
1,446,546.32
Education surcharge
897,379.28
962,826.14
Resource tax
Property tax4,341,262.13
4,035,908.73
Land use tax2,192,079.15
2,450,307.46
Vehicle and vessel tax
4,923.36
8,942.04
Stamp duty925,221.28
657,768.65
Others130,238.28
119,222.81
Total
9,791,372.03
9,681,522.15
41. Selling expenses
Items
2022.01-06 2021.01-06
Employee's salary
36,733,989.97
33,826,230.13
Official business expense
2,682,974.83
4,348,750.49
Travel expense
3,786,682.25
4,114,863.50
Business entertaining expense
2,049,748.87
2,525,127.61
Maintenance and repair expense
6,395,816.83
2,873,319.38
Advertisement and bids expense
351,149.45
1,044,426.89
Depreciation expense
209,483.82
98,213.00
Transportation expense
1,311,116.86
6,509,108.10
Other expense
1,688,445.27
1,370,485.55
Total
55,209,408.15
56,710,524.65
42. Administrative expenses
Items
2022.01-06 2021.01-06
Employee benefit
42,406,947.67
44,697,319.27
Official expense
5,163,653.61
6,540,910.41
Depreciation expense
6,926,148.25
5,684,128.55
Long-term assets amortization
3,734,356.74
3,926,562.28
Maintenance and repair expense
2,564,900.40
2,769,914.26
Design consultant and test service expense
4,264,322.84
3,154,130.36
Safety production cost
864,579.34
1,201,021.67
Travel expense
1,593,342.93
1,783,780.25
Business entertaining expense
599,513.97
814,439.73
Insurance expense
426,810.11
364,092.63
Advertisement expense
57,277.06
66,647.41
Other tax
18,601.23
Other expense
1,472,302.79
704,949.73
Total
70,074,155.71
71,726,497.78
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd. 2022Semiannual Report
43. R&D expenses
Items
2022.01-06 2021.01-06
Employee benefit25,441,289.49
28,422,612.24
Depreciation and amortization expense705,540.38
441,407.58
Raw material4,384,577.60
1,367,252.76
Entrust external R&D investment
227,644.82
Other expense1,033,113.44
279,234.20
Total
31,564,520.91
30,738,151.60
44. Financial expenses
Items
2022.01-06 2021.01-06
Interest expenses
7,533,477.17
8,711,437.07
Less: Interest income
2,004,850.77
3,200,439.42
Add: Exchange loss
-2,344,388.03
-471,153.98
Others expenditure2,286,117.06
1,200,825.06
Total
5,470,355.43
6,240,668.73
45. Other income
Items
2022.01-06 2021.01-06
Government subsidy741,847.00
907,398.00
Personal income tax handling fee refund15,928.19
7,056.99
Stable job subsidy98,244.00
Others1,128,151.43
Total
1,984,170.62
914,454.99
46. Investment income
Items
2022.01-06
2021.01-06
Long-term equity investment income accounted for by theequity method
16,955,402.09
21,085,751.39
Debt Restructuring Proceeds
2,834,620.63
-6,860.60
Investment income from disposal of other non-currentfinancial assets
43,296,525.04
-96,737.66
Investment income of other non-current financial assetsduring the holding period
20,657,215.39
7,229,604.48
Total83,743,763.15
28,211,757.61
47. Income from changes in fair value (loss listed as“-“)
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd. 2022Semiannual Report
Items 2022.01-06 2021.01-06
Other non-current financial assets-29,425,921.52
-5,034,903.12
Total-29,425,921.52
-5,034,903.12
48. Credit impairment losses (loss listed as“-“)
Items 2022.01-06 2021.01-06Bad debt losses of other receivables
-451,293.97
2,435,152.34
Long-term receivables bad debt losses
280,800.00
Bad debt loss on notes receivable
-369,641.88
1,108,930.41
Bad debt loss of accounts receivable
-11,270,943.86
-11,460,308.47
Total
-12,091,879.71
-7,635,425.72
49. Assets impairment losses (loss listed as“-“)
Items
2022.01-06 2021.01-06
Inventory depreciation loss and contract performancecost impairment loss
782,759.18
Impairment loss of construction in progress
-970,000.00
Impairment loss on contract assets
-588,424.79
-1,016,603.72
Total
-775,665.61
-1,016,603.72
50. Gain on assets disposal
Item2022.01-06 2021.01-06
Gains on disposal of non-current assets 67,260.20
59,272.29
Including: gains on disposal of non-current assets notclassified as held for sale
67,260.20
59,272.29
Including: income from disposal of fixed assets 67,260.20
59,272.29
Total 67,260.20
59,272.29
51. Non-operating income
Item2022.01-06 2021.01-06
Amounts recognized intonon-recurring profit or loss for
the year
Debt restructuring gains369,165.58
531,903.00
369,165.58
Others1,209,983.77
1,407,195.38
1,209,983.77
Quality compensation31,535.00
31,535.00
Total1,610,684.35
1,939,098.38
1,610,684.35
52. Non-operating expenses
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd. 2022Semiannual Report
Item2022.01-06 2021.01-06
Amounts recognized intonon-recurring profit or loss for the
yearLoss of non-current assetsdamaged and scrapped
23,028.50
395,122.52
23,028.50
Estimated Loss from PendingLitigation
227,145.65
227,145.65
Others
82,470.42
166,566.53
82,470.42
Total
332,644.57
561,689.05
332,644.57
53. Income tax expenses
(1) Income tax expenses
Items2022.01-06 2021.01-06
Current income tax expenses15,431,444.55
2,143,118.35
Deferred income tax expenses-12,657,290.56
371,879.14
Total2,774,153.99
2,514,997.49
(2) Adjustment process of accounting profit and income tax expense
Items2022.01-06
Total profits 32,613,654.30
Income tax expense at statutory/applicable rates 4,892,048.15
The impact of different tax rates applied to subsidiaries-2,141,757.75
Effects of non-deductible costs, expenses and losses7,337,225.33
Effect of using deductible losses of deferred tax assets notrecognized in prior periods
158,995.77
Effect of deductible temporary differences or deductible losses ofdeferred tax assets not recognized in the current period
-7,472,357.51
Income tax expenses2,774,153.99
54. Other comprehensive income(Refer to the note VII.38 other comprehensive income for details)
55. Notes to cash flow statement
(1) Other cash received related to operating activities
Items2022.01-06 2021.01-06
Government grants383,420.00
1,367,721.83
Received travel expense refund128,547.91
449,912.15
Deposit given back12,691,025.06
27,180,320.58
Interest income2,363,150.90
1,910,435.81
Others 11,561,311.72
3,356,161.51
Receivable from the related party
9,545,982.11
Total
52,310,721.23
43,810,533.99
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd. 2022Semiannual Report
(2) Other cash paid in connection with operating activities
Items
2022.01-06 2021.01-06
Business travel borrowing3,338,694.72
5,217,215.20
Deposit paid 17,291,456.00
18,941,721.30
Expenditure52,744,549.03
40,969,033.35
Pay related parties
3,074,818.29
Bank handling charges 2,105,772.59
1,155,480.12
Others 1,551,588.83
16,259,439.25
Total77,032,061.17
85,617,707.51
(3) Other cash received in connection with fundraising activities
Items2022.01-06 2021.01-06
At the end of the year, the deposit not used ascash is due and recovered
75,003,788.58
58,467,271.18
Sale and leaseback financial lease sales12,000,000.00
1,876,663.49
Other cash received in connection withfundraising activities
8,774,342.51
Total
95,778,131.09
60,343,934.67
(4) Other cash paid in connection with fundraising activities
Items2022.01-06 2021.01-06
At the end of the year, the deposit not used ascash is due and recovered
50,887,086.77
58,425,355.47
Sale and leaseback financial lease sales5,370,096.27
1,887,289.75
Total
56,257,183.04
60,312,645.22
56. Supplementary Information to the Statement of Cash Flows
(1)Supplementary Information to the Statement of Cash Flows
Items2022.01-06 2021.01-06
1. Adjusting net profit into cash flows of operating
activities:
Net profit
29,839,500.31
-16,906,427.39
Add: Provision for impairment of assets
12,867,545.32
8,652,029.44
Depreciation of fixed assets, Amortization of mineralresources, and biological assets
36,744,922.14
34,378,919.44
Depreciation of right of use assets
3,213,658.50
1,473,155.41
Amortization of intangible assets
4,663,658.96
3,356,402.92
Amortization of long-term deferred expenses
714,838.01
786,205.59
Losses on disposal of fixed assets, intangible assets, andlong-term assets (income listed with”-”)
67,260.20
-8,393.93
Losses on write-off of fixed assets (income listed with”-”)
23,028.50
395,122.52
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd. 2022Semiannual Report
Change of fair value profit or loss
29,425,921.52
5,034,903.12
Financial expense (income listed with”-”)
7,533,477.17
8,711,437.07
Investment loss (income listed with”-”)
-83,743,763.15
-28,211,757.61
Decrease of deferred tax assets(increase listedwith”-”)
-299,257.90
-854,627.34
Increase of deferred tax liabilities(decreaselisted with”-”)
-12,358,032.66
-755,235.46
Decrease of inventories (increase listed with”-”)
-39,470,963.36
-125,888,007.53
Decrease of operating receivables (increase listedwith”-”)
-363,642,152.27
-152,568,485.04
Increase in operating payable items (decreases are listed with"-")
185,105,808.47
233,516,922.51
Others
Net cash flows arising from operating activities
-189,406,336.85
-28,887,836.28
2. Significant investment and financing activities
unrelated to cash income and expenses
Liabilities transferred to capital
Convertible bonds within 1 year
25,000,034.00
Financing leased fixed assets
3. Net increase (decrease) of cash and cash equivalent
Closing balance of cash
351,712,699.09
254,388,688.02
Less: Opening balance of cash
438,969,337.87
314,978,460.49
Add: Closing balance of cash equivalents
Less: Opening balance of cash equivalents
Net increase in cash and cash equivalents
-87,256,638.78
-60,589,772.47
57. The assets with the ownership or use right restricted
Items 2022.6.30 ReasonsMonetary fund 50,887,086.77
Margin, bank account frozen fundsNotes Receivable 4,810,536.65
PledgeFixed assets 88,294,179.79
MortgageIntangible assets6,209,834.23
MortgageInvestment real estate38,433,002.00
MortgageTotal188,634,639.44
Note: Dalian Bingshan Group Sales Co., Ltd., a subsidiary of the Company, has frozen funds of 5,434,895.32Yuan in its bank deposit account due to litigation.Dalian Universe Thermal Technology Co., Ltd., a subsidiary of the Company, pledged the bank acceptancebill receivable to China Merchants Bank Co., Ltd. Dalian Branch as a deposit for issuing bank acceptancebills.
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd. 2022Semiannual Report
Dalian New Meica Electronic Technology Co., Ltd., a subsidiary of the company, pledged the bankacceptance bill receivable to China Merchants Bank Co., Ltd. Dalian Jinpu New District Sub-branch as adeposit for issuing bank acceptance bills.Wuhan New World Refrigeration Industry Co., Ltd., a subsidiary of the company, pledged fixed assets,intangible assets and investment real estate to Wuhan Branch of China Everbright Bank Co., Ltd. as acomprehensive credit line for domestic and foreign currency loans, trade financing, discount, acceptance,credit Specific credit business such as certificates, letters of guarantee, factoring, and guarantees.
58. Monetary category of foreign currency
(1) Monetary category of foreign currency
Item Closing Balance
(foreign currency)
Exchange
Rate
Closing Balance
(RMB)Cash
Including：USD525,170.11
6.7114 3,524,626.68
Euro
HKD
JPY21,318,402.00
0.049136 1,047,501.00
Accounts receivable
Including: USD5,341,761.14
6.7114 35,850,695.71
Euro
HKD
JPY18,727,231.00
0.049136 920,181.22
VIII. Change of Consolidation Scope
1、Disposal of a subsidiary
Whether there is a situation in which the control right is lost after a single disposal of the investment in thesubsidiaryRYes ? No
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd. 2022Semiannual Report
Company
Equitydisposal
price
Equitydisposal
ratio
Equitydisposalmethod
Point ofloss ofcontrol
Determinationbasis for thepoint of loss of
control
The difference
between thedisposal priceand the share ofthe subsidiary'snet assets at theconsolidatedfinancialstatement levelcorresponding to
the disposal
investmentBingshanTechnical
Service(Dalian) Co.,
Ltd.
25,888,200.00
100.00%
Transferred
March1, 2022
Completion ofindustrial and
commercial
changeregistration
3,864,200.00
NingboBingshanRefrigeration
and AirConditioningEngineering
Co., Ltd.
0.00
51.00%
Transferred
June 9,2022
Completion ofindustrial and
commercial
changeregistration
675,154.94
Whether there is a situation in which the investment in the subsidiary is disposed of in stages throughmultiple transactions and the control is lost in the current period?Yes R NoIX. Interest in other entity
1. Equity of subsidiaries
(1) Organization structure of group company
Name of subsidiaries
Mainbusinessaddress
Registered
address
Business nature
Shareholding (%)
Obtaining
methodDirect
Indirect
Dalian Bingshan GroupEngineering Co., Ltd.
Dalian Dalian Installation 100 EstablishDalian Bingshan Group SalesCo., Ltd.
Dalian Dalian Trading 100 EstablishDalian Bingshan Air-conditioning
Dalian Dalian Manufacturing 70
Establish
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd. 2022Semiannual Report
Name of subsidiaries
Main
Registered
| business | address |
Business nature
Shareholding (%)
Obtaining
| method |
Equipment Co., Ltd.Dalian Bingshan GuardianAutomation Co., Ltd.
Dalian Dalian Manufacturing 100
EstablishDalian Bingshan Ryosetsu QuickFreezing Equipment Co., Ltd.
Dalian Dalian Manufacturing 100
EstablishDalian New Meica ElectronicsTechnology Co., Ltd
Dalian Dalian Electronic 100
Acquisition
Dalian Nevis Cooling and HeatingTechnology Co., Ltd.
Dalian Dalian Manufacturing 55
Acquisition
Dalian Bingshan InternationalTrade Co., Ltd.
Dalian Dalian Services 100
Acquisition
Wuhan New World RefrigerationIndustry Co., Ltd.
Wuhan Wuhan Manufacturing 100
Acquisition
Wuhan New World Refrigerationand Air Conditioning EngineeringCo., Ltd.
Wuhan Wuhan Install
EstablishWuhan Lanning EnergyTechnology Co., Ltd.
Wuhan Wuhan Trading
54.55
Acquisition
Chengdu Bingshan RefrigerationEngineering Co., Ltd.
Chengdu
Chengdu
Services
51.00
Establish
1) The company's shareholding ratio in subsidiaries is consistent with the voting rights ratio;
2) The company holds more than half of the voting rights in its subsidiaries;
3) The company holds more than half of the voting rights in its subsidiaries and can control the investedunits.
2. Equity in joint venture arrangement or associated enterprise
(1) The important of joint ventures or affiliated companies
Name of joint ventures or
affiliated companies
Mainbusinessaddress
Registeredaddress
Business
nature
Shareholding
(%)
Accounting
methodsDirect
Indirect
Panasonic Compressor Dalian Dalian Manufacturing
Equitymethod
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd. 2022Semiannual Report
Name of joint ventures or
affiliated companies
Mainbusinessaddress
Registered
address
Business
nature
Shareholding
(%)
Accounting
methodsDirect
Indirect
Jing Xue Insulation Changzhou
Changzhou
Manufacturing
21.91
Equitymethod
Bingshan Metal Technology Dalian Dalian Manufacturing
EquitymethodThe investment income from the investee recognized by the company this year accounted for 10% of the net profitattributable to the owner of the parent company or the company's share of the net assets of the investee calculatedaccording to the shareholding ratio accounted for attributable to the parent company at the end of the year. Associateswith more than 10% of shareholders' equity are significant associates.
1) The shareholding ratio of the company in the joint venture is the same as the voting rights ratio;
2) The company does not have an associated enterprise that holds less than 20% of the voting rights but has
significant influence;
3) The company has no associates that hold 20% or more of the voting rights but do not have significant
influence.
（2） The key financial information of affiliated companies
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd. 2022Semiannual Report
Items
30-06-2022/2022.01-06PanasonicCompressor
Jing XueInsulation
Bingshan Metal
TechnologyCurrent assets 1,190,712,160.57 1,321,264,561.19 354,531,888.69Non-currentassets
299,425,380.33 266,328,229.90 36,660,268.44Total assets1,490,137,540.90 1,587,592,791.09 391,192,157.13Currentliabilities
349,314,421.18 776,901,404.57 57,251,169.54Non-currentliabilities
26,066,950.91 32,963,341.25Total liabilities
375,381,372.09 809,864,745.82 57,251,169.54Minorityinterests
451,122.19Equity to theparentcompany
1,114,756,168.81 777,276,923.08 333,940,987.59Proportions ofnet assetsaccording totheshareholdingpercentage
445,902,467.52 170,287,246.68 163,631,083.91Adjustingevents
—Goodwill
29,961,491.06 19,269,770.94—Unrealizedprofits ofinsider trading
--Others -1,549,763.76Book value ofequityinvestment ofaffiliatedcompanies
444,352,703.77 200,248,737.74 182,900,854.85Fair value ofequityinvestment ofaffiliatedcompanies
Operatingincome
586,769,217.28 274,830,181.17 240,379,163.49
Net profit48,430,117.37 14,233,453.36 29,807,983.52
Net profit fromclosing
Othercomprehensiveincome
Totalcomprehensive
48,430,117.37 14,233,453.36 29,807,983.52
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd. 2022Semiannual Report
Items
30-06-2022/2022.01-06PanasonicCompressor
Jing XueInsulation
Bingshan Metal
TechnologyincomeThe currentdividendsreceived fromjoint ventures
34,122,000.00
Continued：
Items
31-12-2021/2021.01-06
PanasonicCompressor
Jing XueInsulation
Bingshan Metal
TechnologyCurrent assets
1,277,834,286.47 1,288,722,048.45 330,379,711.49
Non-currentassets
307,229,051.83 235,300,482.93 39,596,544.29
Total assets1,585,063,338.30 1,524,022,531.38 369,976,255.78
Currentliabilities
396,672,114.65 709,690,258.17 65,843,251.71
Non-currentliabilities
29,936,172.21 29,832,096.59
Total liabilities426,608,286.86 739,522,354.76 65,843,251.71
Minorityinterests
484,306.52
Equity to theparent company
1,156,846,384.28 784,015,870.10 304,133,004.07
Net assetscalculatedaccording to theshareholdingproportions
462,738,553.71 171,770,036.98 149,025,171.99
Adjustingevents
—Goodwill29,961,491.06 19,269,770.94
—Unrealizedprofits of insidertrading
--Others
-2,678,304.22
Book value ofequityinvestment ofaffiliatedcompanies
460,060,249.49 201,731,528.04 168,294,942.93
Fair value ofequityinvestment ofaffiliatedcompanies
Operating
579,289,602.09 277,028,549.54 231,889,705.55
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd. 2022Semiannual Report
Items
31-12-2021/2021.01-06
PanasonicCompressor
Jing XueInsulation
Bingshan MetalTechnologyincomeNet profit66,514,772.97 16,637,748.36 23,361,750.71
Net profit fromclosing
Othercomprehensiveincome
Totalcomprehensiveincome
66,514,772.97 16,637,748.36 23,361,750.71
The currentdividendsreceived fromjoint ventures
32,773,200.00 28,648,633.78
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd. 2022Semiannual Report
(3) Summary financial information of insignificant affiliated companies
Items30-06-2022/2022.01-06 31-12-2021/2021.01-06Associates:
Total book value of investments307,002,623.96
158,059,185.33
The total number of the following items based onshareholding ratio
Net profit11,494,152.42
2,067,871.70
Total comprehensive income 11,494,152.42
2,067,871.70
IX. Risk Related to Financial Instruments
一、Risks associated with financial instruments
The main financial instruments of the Company include borrowings, accounts receivable, accountspayable, other non-current financial assets, etc. Please refer to Note VI for the detailed description of eachfinancial instrument. The risks associated with these financial instruments and the risk management policiesadopted by the Company to reduce these risks are described below. The management of the companymanages and monitors these risk exposures to ensure that the above risks are controlled within a limitedrange.
1. Various risk management objectives and policies
The company's goal in risk management is to achieve an appropriate balance between risks and benefits,minimize the negative impact of risks on the company's operating performance, and maximize the interestsof shareholders and other equity investors. Based on this risk management objective, the basic strategy of thecompany's risk management is to identify and analyze the various risks faced by the company, establish anappropriate risk tolerance bottom line and carry out risk management, and monitor various risks in a timelyand reliable manner. controlled within a limited range.
(1) Market risk
1.The main business of the company is located in China, and the main business is settled in RMB. However,the foreign currency assets and liabilities recognized by the company and future foreign currencytransactions (foreign currency assets and liabilities and foreign currency transactions are mainly denominatedin USD, JPY, EUR, HKD and GBP) still have foreign exchange risks. The company's financial department isresponsible for monitoring the company's foreign currency transactions and the scale of foreign currencyassets and liabilities to minimize foreign exchange risks. The company did not sign any forward foreignexchange contracts or currency swap contracts during the year. As of June 30, 2022, the foreign currencyfinancial assets and foreign currency financial liabilities held by the company converted into RMB are listedas follows:
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd. 2022Semiannual Report
Items Closing Balance Opening balanceMonetary fund-USD
3,524,626.68 7,966,454.17
Monetary fund-JPY
1,047,501.00
152,139.56
Monetary fund-EURO
6,048.12
Monetary fund- GBP
62,609.89
Receivable - GBP
1,332,493.86
Receivable- USD
35,850,695.71
35,847,300.59
Receivable - EURO
Receivable - JPY
920,181.22
Payables -USD
5,414,277.32
6,120,681.44
Payables -EURO
141,791.17
Payables - JPY
1,938,707.73
705,557.54
Payables -GBP
334,163.44
The Company paid close attention to the effect on FX risk.
2) Interest rate risk
The company's interest rate risk mainly arises from bank borrowings. Financial liabilities with floating interest ratesexpose the Company to cash flow interest rate risk, while financial liabilities with fixed interest rates expose theCompany to fair value interest rate risk. The company determines the relative proportion of fixed-rate andfloating-rate contracts based on the prevailing market conditions. The company borrowed a long-term loan of RMB140 million from the controlling shareholder Dalian Bingshan Group Co., Ltd. at a fixed interest rate.The company's finance department continuously monitors the company's interest rate levels. Rising interestrates will increase the cost of new interest-bearing debt and the company's unpaid interest on floating-rateinterest-bearing debt, and adversely affect the company's financial performance. The management will maketimely adjustments based on the latest market conditions. Adjustments to reduce interest rate risk.The sensitive analysis：
As of June 30, 2022, if the borrowing rate were to rise or fall by 50 basis points, while other factors remainedconstant, the company's net profit would decrease or increase by approximately RMB 1.9 million.
3) Price risk
The price risk faced by the Company is mainly commodity price risk. The company sells products atmarket prices. As the national economy enters the "new normal", the manufacturing industry is under greatereconomic downward pressure, and the sharp fluctuations in the prices of bulk materials have a certain impacton the company's operations.
(2)Credit risk
The company's credit risk mainly comes from monetary funds, notes receivable, accounts receivable, and
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd. 2022Semiannual Report
other receivables. Management has established appropriate credit policies and continuously monitorsexposure to these credit risks.The monetary funds held by the company are mainly deposited in financial institutions such as commercialbanks. The management believes that these commercial banks have high reputation and asset status and havelow credit risk. The company adopts a limit policy to avoid credit risk to any financial institution.For accounts receivable, other receivables and notes receivable, the company sets relevant policies to controlcredit risk exposure. The company evaluates the customer's credit qualification and sets the correspondingcredit period based on the customer's financial situation, the possibility of obtaining guarantees from thirdparties, credit history and other factors such as current market conditions. The company will regularlymonitor the credit records of customers. For customers with bad credit records, the company will use writtenreminders, shorten the credit period or cancel the credit period, etc., to ensure that the company's overallcredit risk is within a controllable range.As of June 30, 2022, the total amount of the top five accounts receivable of the company: 176,316,539.33yuan.
(3) Liquidity risk
Liquidity risk is the risk that the company will not be able to meet its financial obligations on the due date. TheCompany's approach to managing liquidity risk is to ensure that there is sufficient liquidity to meet obligations whenthey fall due without causing unacceptable losses or damage to corporate reputation. The company regularly analyzesthe liability structure and term to ensure sufficient funds. The management of the Company monitors the use of bankborrowings and ensures compliance with loan agreements. At the same time, it conducts financing consultations withfinancial institutions to maintain a certain credit line and reduce liquidity risks.The Company uses bank borrowings as its main source of funds. As of June 30, 2022, the Company's unused bankborrowings amounted to RMB 700 million, of which the Company's unused short-term bank borrowings amounted toRMB 700 million.The financial assets and financial liabilities held by the Company are analyzed according to the maturity period of theundiscounted remaining contractual obligations as follows:
Closing balanceItems
Within 1
year
1-2years
2-5years
Over 5years
TotalFinancial AssetsCash and cash in bank
40,266.20
40,266.20
Notes receivable18,195.51
18,195.51
Accounts receivable
98,200.87
98,200.87
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd. 2022Semiannual Report
Closing balanceItems
Within 1
year
1-2years
2-5years
Over 5
years
TotalReceivables financing
2,473.75
2,473.75
Other receivable
18,293.99
18,293.99
Contract asset
12,616.44
12,616.44
Non-current assets maturing within oneyear
1,499.10
1,499.10
Other non-current financial assets
16,751.60
16,751.60
Financial Liabilities
-
Short-term loan
24,000.00
24,000.00
Notes Payable
32,067.76
32,067.76
Accounts payable
115,754.11
115,754.11
Other payable
4,767.96
4,767.96
Employee’s payable
910.69
910.69
Tax payable
910.69
910.69
Non-current liabilities due within oneyear
2,289.94
2,289.94
Long-term loan
14000
14,000.00
Lease liability
23.71
333.39
169.12
36.89
563.11
Long-term payables
308.94
1,999.89
2,308.83
XI. Disclosure of Fair Value
1. Closing fair value of assets and liabilities measured at fair value
Items
Fair value at the year endFirst levelmeasurement of fairvalue
Second levelmeasurement offair value
Third levelmeasurementof fair value
TotalFinancial assets Continuouslymeasured at FV available for sale
-- -- -- --
Receivables Financing
24,737,543.92
24,737,543.92
Other non-current financial assets 165,832,121.60
1,683,852.59
167,515,974.19
Non-continuous fair valuemeasurement
-- -- -- --
2. Determination basis for the market price of continuous and non-continuous first-level fair value
measurement itemsThe company's investment in some equity instruments in other non-current financial assets is the unadjustedclosing price on the stock public trading market on June 30, 2022.
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd. 2022Semiannual Report
3. Continuing and non-continuing Level 2 fair value measurement items, valuation techniques used and
qualitative and quantitative information on important parametersThe financial instruments included in the second level of fair value measurement by the company are thebank acceptance bills (accounts receivable financing) held at fair value and whose changes are includedin other comprehensive income. They are mainly large commercial banks with high credit ratings. Due tothe short remaining maturity period and extremely low credit risk, the book value of bank acceptancebills receivable is close to the fair value on the balance sheet date.
4. Continuing and non-continuing Level 3 fair value measurement items, the valuation techniques used
and qualitative and quantitative information on important parametersContinuous and non-continuous third-level fair value measurement items are mainly equity investmentsin unlisted companies held by the company. There is no active market for the equity of the investeeinvolved, and there is no market transaction price for reference. The relevant observable input If it is notpractical to obtain the value, the company uses the third-level input value, that is, the unobservable inputvalue. The fair value measurement mainly adopts the price-to-book ratio method of comparablecompanies, and considers the liquidity discount.
5. Continuous third-level fair value measurement items, adjustment information between the opening
and closing book values and sensitivity analysis of unobservable parametersContinued third-level fair value measurement items, reconciliation information between the book valueat the beginning of the year and the end of the year, and sensitivity analysis of unobservable parameters
6. Continued fair value measurement items, if there is a transfer between different levels in the current
period, the reason for the transfer and the policy for determining the time point of the transferNone
7. Changes in valuation techniques during the period and reasons for the changesNone
8. Fair value of financial assets and financial liabilities not measured at fair valueNone
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd. 2022Semiannual Report
XII. Related Parties Relationship and Transactions
1. The parent company of the company
Parent company Registered
address
Business
nature
Registeredcapital
Shareholdingpercentage (%)
Voting power
percentage
(%)Dalian BingshanGroup Co., Ltd.
Dalian Manufacture 158,580,000.00 20.27 20.27
The registered address of Dalian Bingshan Group Co., Ltd. is located at No. 106, Liaohe East Road, DalianEconomic and Technological Development Zone. It is a Sino-foreign joint venture limited liability company.Its legal representative is Ji Zhijian. July 2nd. The company's business scope: research, development,manufacturing, sales, service and installation of products in the fields of industrial refrigeration products,refrigeration and refrigeration products, large, medium and small air-conditioning products, petrochemicalequipment products, electronic and electronic control products, household appliances products,environmental protection equipment products (involving Administrative licenses must be operated with alicense).l Registered capital of controlling shareholder and its changesControllingshareholder
Initial balance
Increase decrease end of year
balanceDalian BingshanGroup Co., Ltd.
158,580,000.00
- - 158,580,000.00
l Controlling shareholders' holdings or interests and their changesControllingshareholder
Shareholding amount Shareholding ratio (%)End of year
balance
Initial balance Year-end ratio Ratio at the
beginning of the
yearDalian BingshanGroup Co., Ltd.
170,916,934.00
170,916,934.00
20.27
20.27
2. Subsidiaries
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd. 2022Semiannual Report
Please refer to Note IX, 1. (1) Composition of the enterprise group for the details of the subsidiaries of theCompany.
3. Affiliated company and joint venture
For the important joint ventures or associates of the company, please refer to Note IX. 3. (1) Importantassociates.Other joint ventures or associates that have related party transactions with the company in the current period,or have related party transactions with the company in the previous period and formed a balance are asfollows:
Names of the joint ventures or affiliated company Relationships with the CompanyPanasonic Cold Chain (Dalian) Co., Ltd. Affiliated company of the CompanyPanasonic Compressor (Dalian) Co., Ltd. Affiliated company of the CompanyDalian Benzhuang Chemical Co., Ltd. Affiliated company of the CompanySongzhi Dayang Cooling and Heating Technology (Dalian)Co., Ltd.
Affiliated company of the CompanyBeijing Huashang Bingshan Refrigeration and AirConditioning Equipment Co., Ltd.
Affiliated company of the CompanyDalian Fuji Bingshan Vending Machine Co., Ltd. Affiliated company of the CompanyLingzhong Bingshan Refrigeration (Dalian) Co., Ltd. Affiliated company of the CompanyDalian Fuji Bingshan Vending Machine Sales Co., Ltd. Affiliated company of the CompanyJiangsu Jingxue Energy Saving Technology Co., Ltd. Affiliated company of the CompanyDalian Jingxue Energy Saving Technology Co., Ltd. Subsidiaries of the Company's AssociatesShanghai Jingxue Energy Saving Technology Co., Ltd. Subsidiaries of the Company's AssociatesPanasonic Refrigeration System (Dalian) Co., Ltd. Affiliated company of the CompanyDalian Bingshan Metal Technology Co., Ltd. Affiliated company of the CompanyDalian Bingshan Group Huahuida Financial Leasing Co.,Ltd.
Affiliated company of the CompanyWuhan Scaf Power Control Equipment Co., Ltd.
The Company's wholly-owned subsidiary
associates
4. Other related parties
Name of related party
Related party relationshipDalian Spindle Environmental Facilities Co., Ltd.
Affiliated company of Dalian BingshanGroupBAC Dalian Co., Ltd.
Affiliated company of Dalian BingshanGroupLinde Hydrogen Refueling Station Equipment (Dalian) Co.,Ltd.
Affiliated company of Dalian BingshanGroupDalian Bingshan Pat Technology Co., Ltd. Subsidiary of Dalian Bingshan Group
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd. 2022Semiannual Report
Bingshan Songyang Biotechnology (Dalian) Co., Ltd. Subsidiary of Dalian Bingshan GroupBingshan Technical Service (Dalian) Co., Ltd. Subsidiary of Dalian Bingshan GroupDalian Fuji Bingshan Intelligent Control System Co., Ltd.
Affiliated company of Subsidiary ofDalian Bingshan GroupDalian Kelvin Technology Co., Ltd. Subsidiary of Dalian Bingshan GroupDalian Bingshan Huigu Development Co., Ltd. Subsidiary of Dalian Bingshan Group
5. 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
2022.1-6 Approved
Transaction
Limit
| Whether |
thetransaction limit
isexceede
d
2021.1-6
Panasonic Refrigeration (Dalian) Co., Ltd.
15,000,000.00
No14,283,046.33
BAC Dalian Co., Ltd.
21,233,858.40
45,000,000.00
No14,119,984.98
Panasonic Cold Chain (Dalian) Co., Ltd.2,058,376.71
15,000,000.00
No4,418,110.43
Jiangsu Jingxue Energy Saving Technology
Co., Ltd.
364,716.81
Jiangsu Jingxue Energy Saving Technology
35,000,000.00
No15,144,300.86
Bingshan Technical Service (Dalian) Co.,
Ltd.
1,253,534.59
Bingshan Technical Service (Dalian) Co.,
40,000,000.00
No
Dalian Bing
shan Huigu Development Co.,
Ltd.
147,219.63
shan Huigu Development Co.,
1,000,000.00
No
Dalian Bingshan Pat Technology Co., Ltd.
| 2,981,051.00 | 11,000,000.00 |
No
| 1,100,719.55 | ||
| Dalian Spinde Environmental Equipment |
Co., Ltd.
815,097.34
8,000,000.00
No562,428.33
Panasonic Compressor (Dalian) Co., Ltd.
2,352,071.11
| 2,352,071.11 | 3,000,000.00 |
No
| 1,913,993.12 | ||
| Dalian Bingshan Metal Technology Co., |
Ltd.
28,460.16
500,000.00
No
Dalian Fuji Bingshan Vending Machine
Co., Ltd.
1,003,270.93
Dalian Fuji Bingshan Vending Machine
5,500,000.00
No1,351,425.38
Dalian Fuji Bingshan Vending M
achine
Sales Co., Ltd.
16,814.16
achine
500,000.00
No330,309.73
Dalian Bingshan Group Huahuida
Financial Leasing Co., Ltd.
330.19
Dalian Bingshan Group Huahuida
50,000,000.00
No476,917.71
Dalian Bingshan Group Co., Ltd.
4,528.30
| 4,528.30 | 500,000.00 |
No
Songyang Biotechnology Co., Ltd.
| 933,799. | 10 | 500,000.00 | |||
No
| Beijing Huashang Bingshan Refrigeration | ||
and Air Conditioning Equipment Co., Ltd.
500,000.00
No
Dalian Kelvin Technology Co., Ltd.
| 500,000.00 | |
No
| Dalian Fuji Bingshan Intelligent Control | ||
System Co., Ltd.
1,000,000.00
No
Total
65,488,523.25
| 65,488,523.25 | 85,511,898.87 | |||
2) Sales of goods/ labour services provision
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd. 2022Semiannual Report
Related party
Conte
nt
2022.1-6 2021.1-6
Panasonic Cold Chain (Dalian) Co., Ltd.
Sales
ofgoods
66,262,077.88
71,690,961.56
Dalian Fuji Bingshan Vending Machine Co., Ltd.
14,518,618.12
8,397,453.07
Panasonic Refrigeration System (Dalian) Co., Ltd.
11,925,729.23
19,990,779.80
Lingzhong Bingshan Refrigeration (Dalian) Co., Ltd.
5,075,605.89
12,830,587.15
Panasonic Compressor (Dalian) Co., Ltd.
26,604,561.52
7,600,809.54
Dalian Bingshan Pat Technology Co., Ltd.
624,768.48
143,269.75
Songzhi Dayang Cooling and Heating Technology (Dalian) Co.,
Ltd.
0.00
Songzhi Dayang Cooling and Heating Technology (Dalian) Co.,
0.00
Dalian Fuji Bingshan Vending Machine Sales Co., Ltd.
0.00
31,989.61
Jiangsu Jingxue Energy Saving Technology Co., Ltd.3,035,091.30
0.00
BAC Dalian Co., Ltd.
21,364,166.08
17,129,169.19
Bingshan Technical Service (Dalian) Co., Ltd.
19,222,103.24
Dalian Bingshan Huigu Development Co., Ltd.
4,003,216.37
4,281,358.92
Dalian Bingshan Group Huahuida Financial Leasing Co., Ltd.
8,700,007.96
0.00
Dalian Spinde Environmental Equipment Co., Ltd.
2,315,455.64
3,073,360.72
Wuhan Scaf Power Control Equipment Co., Ltd.
256,431.86
Dalian Fuji Bingshan Intelligent Control System Co., Ltd.
305,206.80
Dalian Benzhuang Chemical Co., Ltd.
91,981.13
Songyang Biotechnology (Dalian) Co., Ltd.
7,771,926.75
1,290,650.45
Linde Hydrogen Refueling Station Equipment (Dalian) Co., Ltd.
5,095,635.29
Dalian Bingshan Group Refrigeration Equipment Co., Ltd.
2,498,729.42
Dalian Fuji Bingshan Intelligent Control System Co., Ltd.
285,694.57
Total
197,172,583.54
184,774,478.17
(2)Assets Lease
Assets rent out
Lessee
Category of assets
rent out
2022.1-6 Lease
Income
2021.1-6 Lease
IncomeDalian Bingshan Group Co., Ltd. Office66,055.05
Lingzhong BingshanRefrigeration (Dalian) Co., Ltd.
Factory1,904,761.90
1,904,761.90
Dalian Bingshan HuiguDevelopment Co., Ltd.
Land, house4,095,151.07
4,095,276.18
Panasonic Cold Chain (Dalian)Co., Ltd.
Staff domitory18,788.99
Panasonic Compressor (Dalian)Co., Ltd.
Staff domitory45,714.28
22,857.14
Dalian Jingxue Energy SavingFactory, office502,555.72
502,555.72
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd. 2022Semiannual Report
Lessee
Category of assets
rent out
2022.1-6 Lease
Income
2021.1-6 Lease
IncomeTechnology Co., Ltd.Wuhan Skafe Power EquipmentControl Co., Ltd.
Factory330,415.59
97,732.86
Linde Hydrogen RefuelingStation Equipment (Dalian) Co.,Ltd.
Land, house
1,961,055.05
Description of related leasesLessor
Category of assets rentin
Current yearLease fees
Last year LeasefeesDalian Bingshan Group HuahuidaFinancial Leasing Co.
FA 10,971,589.76
397,771.84
(3) Related guarantees.
CDB Development Fund supports the company's cold chain green intelligent equipment and serviceindustrialization base project, and provides special funds to the company's controlling shareholder, BingshanGroup. For details, see "VII. 33 Long-term Loans".
(4) Funds borrow from /lent to related party
Name of the related party Amount Starting date Ending date ExplanationDalian Bingshan Group Co., Ltd.
140,000,000.00
2016.03.14 2026.03.13
Project fundinvestmentDalian Bingshan Group HuahuidaFinancial Leasing Co., Ltd.
1,348.67
2022.04.28 2023.04.27
Dalian Bingshan Group HuahuidaFinancial Leasing Co., Ltd.
600,000.00
2022.05.20 2023.05.19
Dalian Bingshan Group HuahuidaFinancial Leasing Co., Ltd.
5,481,000.00
2022.06.20 2024.06.19
Dalian Bingshan Group HuahuidaFinancial Leasing Co., Ltd.
12,000,000.00
2022.01.07 2025.01.06
6. Receivables and payables of related parties
(1) Receivables
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd. 2022Semiannual Report
Item Related party
Closing Balance Opening BalanceBookBalance
Bad debtProvision
BookBalance
Bad debtProvision
Accountsreceivable
BAC Dalian Co.,Ltd.
13,358,280.43
937,751.29
12,548,585.90
880,910.73
Accountsreceivable
Beijing HuashangBingshanRefrigeration andAir ConditioningEquipment Co.,Ltd.
8,225,260.53
4,210,824.22
10,125,260.53
6,110,824.22
Accountsreceivable
BingshanSongyangBiotechnology(Dalian) Co., Ltd.
4,389,586.01
308,148.94
1,164,159.66
81,724.01
Accountsreceivable
Dalian FujiBingshan VendingMachine Co., Ltd.
10,805,596.11
839,529.71
5,656,023.33
398,096.17
Accountsreceivable
Dalian BingshanHuiguDevelopment Co.,Ltd.
1,232,268.00
97,126.06
439,268.00
63,813.46
Accountsreceivable
Dalian SpindeEnvironmentalEquipment Co.,Ltd.
1,140,050.76
94,473.19
1,942,559.40
136,367.67
Accountsreceivable
LingzhongBingshanRefrigeration(Dalian) Co., Ltd.
2,814,406.81
197,571.36
1,803,184.94
126,583.58
Accountsreceivable
PanasonicRefrigerationSystem (Dalian)Co., Ltd.
7,689,479.92
539,801.49
4,963,341.40
348,426.57
Accountsreceivable
Panasonic ColdChain (Dalian)Co., Ltd.
38,098,054.10
2,674,483.40
37,390,849.92
2,624,837.66
Accountsreceivable
PanasonicCompressor(Dalian) Co., Ltd.
4,072,906.71
285,918.05
4,021,698.75
282,323.25
Accountsreceivable
Dalian FujiBingshanIntelligent ControlSystem Co., Ltd.
405,200.00
40,614.48
175,200.00
12,299.04
Accountsreceivable
BingshanTechnical Service(Dalian) Co., Ltd.
14,341,077.49
1,032,307.24
Contractassets
Dalian DabingRefrigerationEquipment Co.,Ltd.
75,000.00
12,555.00
Contractassets
PanasonicRefrigerationSystem (Dalian)Co., Ltd.
166,000.00
27,788.40
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd. 2022Semiannual Report
Prepayment
PanasonicRefrigerationSystem (Dalian)Co., Ltd.
223,101.70
2,225,656.57
Prepayment
Dalian BingshanGroup Co., Ltd.
49,600.00
Prepayment
Dalian SpindeEnvironmentalEquipment Co.,Ltd.
36,455.00
341,215.00
Prepayment
Dalian BingshanGroup HuahuidaFinancial LeasingCo., Ltd.
618,163.06
951,659.80
Prepayment
BAC Dalian Co.,Ltd.
1,003,142.00
1,607,378.00
Prepayment
Dalian BingshanTechnical ServiceCo., Ltd.
183,292.00
Prepayment
Dalian DabingRefrigerationEquipment Co.,Ltd.
157,531.70
Receivablefinancing
PanasonicRefrigerationSystem (Dalian)Co., Ltd.
148,563.00
4,197,610.38
Receivablefinancing
Panasonic ColdChain (Dalian)Co., Ltd.
659,308.15
18,720,000.00
Receivablefinancing
BAC Dalian Co.,Ltd.
19,659,614.15
7,341,688.27
Receivablefinancing
Dalian FujiBingshan VendingMachine Co., Ltd.
2,060,929.41
Otherreceivable
Dalian BingshanGroup HuahuidaFinancial LeasingCo., Ltd.
1,348.67
56.24
Otherreceivable
BingshanTechnical Service(Dalian) Co., Ltd.
100,000.00
69,460.00
Otherreceivable
Wuhan Scaf PowerControl EquipmentCo., Ltd.
148,423.28
6,189.25
Otherreceivable
Panasonic ColdChain (Dalian)Co., Ltd.
18,079.63
753.92
(2) Accounts Payable due from Related Party
Item Related party Closing Balance Opening Balance
Accounts Payable
BAC Dalian Co., Ltd.
24,745,595.67
11,326,144.36
Accounts Payable
Dalian Bingshan Pat Technology Co.,Ltd.
2,189,826.04
3,921,294.33
Accounts Payable
Dalian Spinde EnvironmentalEquipment Co., Ltd.
1,507,515.00
1,160,849.00
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd. 2022Semiannual Report
Accounts Payable
Jiangsu Jingxue Energy SavingTechnology Co., Ltd.
947,328.00
4,512,235.92
Accounts Payable
Dalian Fuji Bingshan VendingMachine Sales Co., Ltd.
0.00
145,500.00
Accounts Payable
Panasonic Refrigeration System(Dalian) Co., Ltd.
27,108,641.54
17,401,521.28
Accounts Payable
Panasonic Cold Chain (Dalian) Co.,Ltd.
319,317.09
187,071.99
Accounts Payable
Panasonic Compressor (Dalian) Co.,Ltd.
151,222.04
1,785,651.94
Accounts Payable
Dalian Bingshan Metal TechnologyCo., Ltd.
32,173.27
70,047.29
Accounts Payable Dalian Kelvin Technology Co., Ltd.
173,125.00
128,750.00
Accounts Payable
Bingshan Technical Service (Dalian)Co., Ltd.
120,562.40
Other accountspayable
Dalian Bingshan Group HuahuidaFinancial Leasing Co., Ltd.
576,142.31
Other accountspayable
Dalian Fuji Bingshan VendingMachine Sales Co., Ltd.
268,500.00
Other accountspayable
Lingzhong Bingshan Refrigeration(Dalian) Co., Ltd.
170,000.00
Other accountspayable
Jiangsu Jingxue Energy SavingTechnology Co., Ltd.
70,000.00
70,000.00
Other accountspayable
Bingshan Technical Service (Dalian)Co., Ltd.
1,301.13
Contract liability
Panasonic Refrigeration System(Dalian) Co., Ltd.
1,410,975.05
Contract liability
Panasonic Refrigeration System(Dalian) Co., Ltd.
1,819,735.06
Contract liability
Wuhan Scaf Power Control EquipmentCo., Ltd.
76,228.67
Notes Payable
BAC Dalian Co., Ltd.
7,770,000.00
3,932,858.40
Notes Payable
Dalian Benzhuang Chemical Co., Ltd.
172,800.00
Notes Payable
Dalian Bingshan Pat Technology Co.,Ltd.
900,000.00
880,000.00
Notes Payable
Jiangsu Jingxue Energy SavingTechnology Co., Ltd.
66,600.00
492,450.00
Notes Payable
Panasonic Cold Chain (Dalian) Co.,Ltd.
1,657,321.00
1,657,321.00
Notes Payable
Dalian Spinde EnvironmentalEquipment Co., Ltd.
1,307,900.00
1,517,200.00
Notes Payable
Panasonic Refrigeration System(Dalian) Co., Ltd.
1,594,169.08
Lease liability
Dalian Bingshan Group HuahuidaFinancial Leasing Co., Ltd.
6,393,153.42
4,055,686.70
Non-currentliabilities duewithin one year
Dalian Bingshan Group HuahuidaFinancial Leasing Co., Ltd.20,278,311.26
25,727,284.78
Long-termpayables
Dalian Bingshan Group HuahuidaFinancial Leasing Co., Ltd.
3,246,400.10
23,543,375.62
(I) Related Party CommitmentNone
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd. 2022Semiannual Report
XIII. Commitments and Contingencies
1. Important Commitments
As of June 30, 2022, the company has no commitments that need to be disclosed.
2. Contingencies
(1) As of June 30, 2022, the guarantee obligations undertaken by the company's financial leasing.The company sells cold storage equipment to Guizhou Waterfall Cold Chain Food Investment Co., Ltd.("Waterfall Cold Chain") in the form of financial leasing. The three parties sign a purchase contract and a financiallease contract. The company is the seller and Huahuida is the buyer. and the lessor, Waterfall Cold Chain is thelessee, and the total contract price is RMB 25.705 million. If the lessee delays in paying the rent, the companyshall assume the responsibility for advance rent payment and repurchase. The shareholders of Waterfall ColdChain issued an unconditional and irrevocable counter-guarantee with the company as the beneficiary to thecompany. The scope of guarantee is based on all the debts guaranteed by the company for the financial lease salesbusiness.As of June 30, 2022, the balance of the company's financial leasing guarantee obligations was 24,210,316.00 yuan,and there was no situation where the company was required to assume the guarantee responsibility due to thedefault of waterfall cold chain.As of June 30, 2022, except for the above-mentioned matters, the Company has no material contingent events thatneed to be disclosed.
(2) The company has no important contingencies that need to be disclosed, which should also be explainedThe company has no material contingencies that need to be disclosed.
XIV.. Events after the Balance Sheet Date
(1)Sales return
The company did not have any significant sales returns after the balance sheet date.
(2)Other event
Except for the above-mentioned post-balance sheet events disclosed, the Company has no other significantpost-balance sheet events.XV. Other Significant EventsSegment InformationThe management of the Company divided the Company into 3 segments based on the geographic area:
Northeast China, Central China, and East China. The Northeast is the Company’s general headquarters andthe registered address. The Central is the subsidiary of the Company, Wuhan New World RefrigerationIndustrial Co., Ltd, Wuhan Lanning Energy Technology Co., Ltd, and Chengdu Bingshan RefrigerationEngineering Co., Ltd. The East is the subsidiary of the Company, Ningbo Bingshan Air-conditioningRefrigeration Engineering Co., Ltd.
(1) The basis and accounting policies of reporting segments
The internal organization structure, management requirements and internal report scheme are the
determination basis for the Company to set the operating segments. The segments are those satisfiedthe following requirements.
1).The segment can generates 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
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd. 2022Semiannual Report
can be acquired.The Company confirms the report segments based on the operating segments. The transfer price amongsegments is set base on the market price. The assets and related expenses in common use are allocated todifferent segments based on their proportion of revenue.
(2)The financial information of reporting segments
Amount unit ：Ten thousand yuanItems
30-06-2021/2021.01-06
NortheastChina
Central
China
EastChina
Offset Total1 Operating income149,856.46
15,286.12
106.28
-36,062.97
129,185.89
2 Cost 136,260.29
13,135.82
124.33
-35,970.87
113,549.57
Impairment loss onassets
-73.12
-4.45
-77.57
Impairment loss oncredit
-1,009.97
-199.21
-1,209.19
Depreciation andamortization
3,401.92
612.34
4,014.26
3 Investment income fromassociates and joint venture
1,692.66
2.88
1,695.54
4 Operating profits(loss) 4,551.99
-675.04
-96.85
-518.74
3,261.37
5 Income tax
306.66
-29.25
277.42
6 Net profit(loss) 4,245.32
-645.79
-96.85
-518.74
2,983.95
7 Total assets664,678.45
51,572.32
0.00
-132,120.62
584,130.15
8 Total liabilities 302,169.74
38,613.90
0.00
-63,595.23
277,188.40
XVI. Notes to the Main Items of the Financial Statements of Parent Company
1. Accounts receivable
(1) Accounts receivable category
Item
Closing BalanceBooking balance ProvisionBookingbalanceAmount % Amount %Accountsreceivable with
significantindividual amount
and separate baddebt provision
721,590,402.25
100.00
81,023,885.50
11.23
640,566,516.75
Accountsreceivable with bad
debt provisionbased on thecharacters of credit
risk portfolio
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd. 2022Semiannual Report
Item
Closing BalanceBooking balance ProvisionBookingbalanceAmount % Amount %Accounting age ascharacters
245,888,703.74
34.08
81,023,885.50
32.95
164,864,818.24
Related partywithinconsolidationscope
475,701,698.51
65.92
475,701,698.51
Accountsreceivable with
insignificantindividual amount
and separate bad
debt provision
Total721,590,402.25
100.00
81,023,885.50
11.23
640,566,516.75
(Continued)
Item
Opening BalanceBooking balance ProvisionBookingbalanceAmount % Amount %Accounts receivable
with significantindividual amountand separate baddebt provision
490,329,366.12
100.00
81,610,090.34
16.64
408,719,275.78
Accounts receivable
with bad debtprovision based on
the characters ofcredit risk portfolio
Accounting age as
characters
279,002,384.85
56.90
81,610,090.34
29.25
197,392,294.51
Related party withinconsolidation scope
211,326,981.27
43.10
211,326,981.27
Accounts receivable
with insignificantindividual amount
and separate bad
debt provision
Total490,329,366.12
100.00
81,610,090.34
16.64
408,719,275.78
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd. 2022Semiannual Report
(1)The bad debt provisions of accounts receivable in the portfolio is accrued under accounting aginganalysis method:
Aging Closing BalanceWithin1 year 597,054,751.12
1 to 2 years
43,853,934.70
2 to 3 years
9,741,450.50
More than 3 years70,940,265.93
3 to 4 years22,786,105.52
4 to 5 years14,535,594.76
More than 5 years33,618,565.65
Total721,590,402.25
(2) Bad debt provision accrued and reversed (withdraw)
Category Opening balance
Change during the year
Closing Balance
Accrued Collected/ reversed
Written-offBad debt provision
81,610,090.34
1,128,577.16
1,714,782.00
81,023,885.50
Total81,610,090.34
1,128,577.16
1,714,782.00
81,023,885.50
(3) No accounts receivable written off in current period.
Item Written off amountReceivable actually written off 1,714,782.00
(4) The top five significant accounts receivable categorized by debtors
Company
ClosingBalance
% of thetotal AR
ClosingBalance ofProvisionHualu Engineering Technology Co.,Ltd.
40,138,250.00
5.56
2,817,705.15
Xinyi Yuanda Construction andInstallation Engineering Co., Ltd.
32,748,744.00
4.54
25,281,907.38
Qingcheng Zhongyi Energy Co., Ltd
23,475,000.00
3.25
1,142,271.49
Inner Mongolia Xinyuan siliconmaterial technology Co., Ltd.
13,527,900.00
1.87
949,658.58
Dalian Branch of China KunlunEngineering Co., Ltd.
11,290,000.00
1.56
792,558.00
Total121,179,894.00
16.78
2. Other Receivables
Item Closing Balance Opening BalanceDividend receivable
16,321,464.90
25,100,920.84
Other receivable137,867,078.28
29,121,904.34
Total
154,188,541.18
54,222,825.18
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd. 2022Semiannual Report
2.1 Dividend receivable
ItemClosing Balance Opening BalanceBingshan Technology Services (Dalian) Co., Ltd.
24,148,920.84
Guotai Junan Securities Co., Ltd.7,418,805.44
952,000.00
Dalian Universe Thermal Technology Co., Ltd.2,200,000.00
Dalian Bingshan Engineering & Trading Co., Ltd.1,282,615.76
Jiangsu Jingxue Insulation Technology Co., Ltd.4,732,344.00
Dalian Bingshan Group Huahuida Financial LeasingCo., Ltd.
687,697.70
Total16,321,464.90
25,100,920.84
2.2 Other receivable
(1) Other receivables categorized by nature
Nature Closing Balance Opening BalanceEquity transfer fund 102,206,391.05
Deposits 11,020.70
20,112,243.72
Petty cash162,264.99
344,848.03
Guarantee deposits 37,600,456.04
10,466,237.65
Total
139,980,132.78
30,923,329.40
(2) Provision for bad debts
Provision for bad debts
The first phase The second phase The third phase
Total
next 12 months
Expected Credit Lossfor the duration (NoCredit Devaluation)
Expected Credit Loss forthe duration (Creditimpairment has occurred)
Expected credit losses in the
Balance on January 1, 2022602,860.06
1,198,565.00
1,801,425.06
The balance of January 1, 2022 inthe current period
——
——
——
——
Provision for bad debts
311,629.44
311,629.44
Balance on June 30, 20221,801,425.06
311,629.44
2,113,054.50
The bad debt provisions of other receivables in the portfolio is accrued under accounting aging analysismethod
Aging Closing BalanceWithin 1 year 630,906.59
1 to 2 years
98,373.13
2 to 3 years
114,293.16
More than 3 years1,269,481.63
3 to 4 years70,916.63
More than 5 years1,198,565.00
Total
2,113,054.51
(3) Bad debt provision accrued and reversed (withdraw) in the period.
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd. 2022Semiannual Report
.Category
Openingbalance
Change during the year
ClosingBalanceAccrued Collected/reversed
Written-offBad debtprovision
1,801,425.06
311,629.44
2,113,054.50
Total
1,801,425.06
311,629.44
2,113,054.50
(4) Other receivables from the top 5 debtors
Name Category
ClosingBalance
Aging
% of thetotal OR
ClosingBalance ofProvision
Trane Technology Europe holdingcompany
Share transfer
102,206,391.05
Within 1year
74.13
| 102,206,391.05 |
Cangzhou Lingang Renguo ChemicalCo., Ltd.
Security deposit2,000,000.00
Within 1
year
1.45
83,400.00
Dalian Delta HK China gas Co., Ltd.
Security deposit1,100,000.00
Over 5
years
0.80
1,100,000.00
Xinjiang Oriental Hope New EnergyCo., LTD
Security deposit1,000,000.00
Within 1
year
0.73
41,700.00
Ningxia Crystal New Energy Materials Co., Ltd.
Security deposit1,000,000.00
Within 1year
0.73
41,700.00
Total
107,306,391.05
77.84
1,266,800.00
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd. 2022Semiannual Report
3. Long-term equity investments
Category of long-term equity investmentsItem
Closing Balance Opening BalanceClosing Balance Provision
Book Value Opening Balance Provision
| Book Value |
Investment of subsidiaries
674,238,267.08
| Investment of subsidiaries |
674,238,267.08
696,262,267.08
| 696,262,267.08 |
Investment of affiliates and JV
1,202,989,223.45
| Investment of affiliates and JV |
1,202,989,223.45
1,227,131,957.97
| 1,227,131,957.97 |
Total
1,877,227,706.53
1,877,227,706.53
1,923,394,225.05
| 1,923,394,225.05 |
(1) Investments of subsidiaries
Subsidiaries names Opening Balance Increase Decrease
Closing BalanceDalian Bingshan Group Construction Co., Ltd
193,749,675.77
| Dalian Bingshan Group Construction Co., Ltd | 193,749,675.77 |
Dalian Bingshan Group Sales Co., Ltd
20,722,428.15
| Dalian Bingshan Group Sales Co., Ltd | 20,722,428.15 |
Dalian Bingshan Air
-Conditioning Equipment Co., Ltd 45,272,185.00
| Dalian Bingshan Air | 45,272,185.00 |
Dalian Bingshan Guardian Automation Co., Ltd.
6,872,117.80
| Dalian Bingshan Guardian Automation Co., Ltd. | 6,872,117.80 |
Dalian Bingshan Ryosetsu Quick Freezing Equipment Co., Ltd.
59,356,051.19
| Dalian Bingshan Ryosetsu Quick Freezing Equipment Co., Ltd. | 59,356,051.19 |
Dalian Universe Thermal Technology Co., Ltd.
48,287,589.78
| Dalian Universe Thermal Technology Co., Ltd. | 48,287,589.78 |
Wuhan New World Refrigeration Industrial Co., Ltd
184,674,910.81
| Wuhan New World Refrigeration Industrial Co., Ltd | 184,674,910.81 |
Bingshan Technical Service
（Dalian） Co., Ltd. 22,024,000.00
| Bingshan Technical Service |
22,024,000.00
New Meica
Electronics Co., Ltd. 43,766,243.72
| New Meica | 43,766,243.72 |
Dalian Bingshan Engineering & Trading Co., Ltd.
71,537,064.86
| Dalian Bingshan Engineering & Trading Co., Ltd. | 71,537,064.86 |
696,262,267.08
22,024,000.00
| 674,238,267.08 |
(2) Joint ventures& affiliated companies
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd. 2022Semiannual Report
Beginning balance
Increase/Decrease
Increased
Ending balance
Decreased
Gains and losses
recognizedunder the equity
method
| Gains and losses | Adjustment of |
othercomprehensive
income
sof otherequity
Cash bonus or
profitsannounced
Provision forimpairment of the
current period
Others
Change
Appliances
| Appliances | |
| chain (Dalian) Co., Ltd | |
90,330,037.43
-17,939,591.1
| 72,390,446.24 |
Appliances
| Appliances | |
| Compressor (Dalian) Co., Ltd | |
460,060,249.49
17,822,283.19
34,122,000.00
| 443,760,532.68 |
Dalian Honjo Chemical Co.,
8,926,266.52
Dalian Honjo Chemical Co.,
358,699.51
| 9,284,966.03 |
Songzhi Ocean Thermal
| Songzhi Ocean Thermal | |
| o., Ltd | |
58,799,068.28
1,112,724.55
| 59,911,792.83 |
Beijing Huashang Bingshan
| Beijing Huashang Bingshan |
| Refrigeration and |
| conditioning Machinery |
2,139,942.18
3,596.55
| 2,143,538.73 |
Dalian Fuji Bingshan Vending
148,656,014.75
Dalian Fuji Bingshan Vending
-5,230,752.85
| 143,425,261.90 |
MHI Bingshan Refrigeration
14,923,803.87
MHI Bingshan Refrigeration
1,119,014.68
| 16,042,818.55 |
Dalian Bingshan Group
| Dalian Bingshan Group |
| Huahuida Finance Leasing Co. |
44,789,319.55
511,557.51
687,697.70
| 44,613,179.36 |
Jiangsu JingXue Insulat
ion
201,731,528.04
Jiangsu JingXue Insulat
3,118,549.63
4,732,560.00
| 200,117,517.67 |
Panasonic Refrigerati
on
| Panasonic Refrigerati |
28,480,784.93
1,517,604.68
1,527,045.45
| 28,471,344.16 |
Bingshan Metal Technical
| Bingshan Metal Technical | |
| Co.,Ltd. | |
168,294,942.93
14,532,882.37
| 182,827,825.30 |
1,227,131,957.97
16,926,568.63
41,069,303.15
| 1,202,989,223.45 |
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd. 2022Semiannual Report
4. Operating revenue and cost
Item
2022.01-06 2021.01-06
Revenue Cost Revenue CostRevenue from main operation
435,297,378.67
385,618,374.95
385,929,620.18
336,469,117.09
Revenue from other operation32,704,249.58
21,958,987.56
20,551,816.12
13,934,076.36
Total
468,001,628.25
407,577,362.51
406,481,436.30
350,403,193.45
5. Investment income
Items
2022.01-06 2021.01-06
Income from long-term equity investments under cost method
3,482,615.76
Income from long-term equity investments under equity method 16,926,568.63
22,157,178.59
Investment income from disposal of long-term equity investment 3,864,200.00
Income from holding and disposing of other non-current financialassets
63,953,740.43
7,229,604.48
Total
88,227,124.82
29,386,783.07
XVII. Supplementary Information to the Financial Statements
1. Non-operating profit or loss
itemAmount
Disposal gains and losses of non-current asset67,260.20
Government subsidies included in current profit or loss
1,984,170.62
Income from the investment cost of the subsidiary
acquired by the enterprise is
acquired by the enterprise isless than the fair value of the identifiable net assets of the investee when the
investment is acquired
2,834,620.63
| less than the fair value of the identifiable net assets of the investee when the | |
Income from changes in fair value during the period of holding financial assets
available for sale and income from disposal of financial assets available for sale
13,870,603.52
Income from changes in fair value during the period of holding financial assets
Other non-operating revenue or expense1,278,039.78
Influence on income tax992,883.13
Influence on minority shareholders178,578.45
Total 18,863,233.17
2. Return on equity and earnings per share
Profit of report period
Weightedaveragereturn onnet assets(%)
Earnings per share
(EPS)BasicEPS
Diluted
EPSNet profit attributable to shareholders of parent company
0.98
0.035
0.035
Net profit after deducting non-recurring gains and lossesattributable to shareholders of parent company
0.36
0.013
0.013