Bingshan Refrigeration & Heat Transfer
Technologies Co., Ltd.
2022 Annual Report
April, 2023
Section 1 Important Notice, Table of Contents, and Definitions
The directors and the Board of Directors, the supervisors and the SupervisoryBoard, and Senior staff members of Bingshan Refrigeration & Heat TransferTechnologies Co., Ltd. (hereinafter referred to as the Company) hereby confirmthat there are not any important omissions, fictitious statements or seriousmisleading carried in this report, and shall take all responsibilities, individualand/or joint, for the reality, accuracy and completeness of the whole contents.
Chairman of the Board of Directors of the Company Mr. Ji Zhijian, FinancialMajordomo Mrs. Wang Jinxiu and the head of Accounting Department Mr. LiSheng hereby confirm that the financial report of the annual report is true andcomplete.
All the 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. The paragraph "The prospect of the Company's future development " in Section 3 of this AnnualReport describes major risks the Company may be confronted with, includingthe risk of Increasing market competition risk, the market promotion for newproduct and new technology slow, and the Accounts receivable is on the high side.See the related sections for the countermeasures to be taken by the Company.
The profit distribution proposal reviewed and adopted at this Board meeting ofthe Company is: Based on the total capital stock of 843,212,507 shares, thedividend of RMB 0.1 in cash (including tax) will be distributed for every 10shares; The Company will not transfer the capital reserve to increase capitalstock.
This report is written respectively in Chinese and in English. In the event of anydiscrepancy between the two above-mentioned versions, the Chinese versionshall prevail.
CONTENTS
Section 1 Important Notice, Table of Contents, and Definitions………………………………………………………………………...2
Section 2 About the Company and Main Financial Indicators ...... 6
Section 3 Management discussion and analysis ...... 10
Section 4 Corporate governance ...... 22
Section 5 Environmental and social responsibility ...... 32
Section 7 Change in Share Capital and Shareholders' Information ...... 377
Section 8 Information on Preferred Stock ...... 411
Section 9 Information on Corporate bonds ...... 422
Section 10 Financial Report ...... 433
Reference Documents
The accounting statements bearing the signatures and seals of the legal representative, the financial majordomoand 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
Definitions
Defined item | Stands for | Meaning |
Reporting period | Stands for | From Jan. 1, 2022 to Dec. 31 2022 |
The Company, this Company | Stands for | Bingshan Refrigeration & Heat Transfer Technologies Co.,Ltd. |
Bingshan Engineering Company | Stands for | Dalian Bingshan Group Engineering Co., Ltd.,one of the subsidiaries of the Company where the Company holds 100% of its shares. |
Wuxin Refrigeration | Stands for | 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 | Dalian Bingshan Guardian Automation Co., Ltd. one of the subsidiaries of the Company where the Company holds 100% of its shares. |
Bingshan Ryosetsu | Dalian Bingshan Ryosetsu Quick Freezing Equipment Co., Ltd. one of the subsidiaries of the Company where the Company holds 100% of its shares. | |
Sonyo Compressor | Stands for | Sonyo Compressor (Dalian) Co., Ltd. Formerly Panasonic Appliances Compressor (Dalian) Co., Ltd. one of the subsidiaries of the Company, where the Company holds100% of its shares. |
Sonyo Refrigeration System | Stands for | Sonyo Refrigeration System (Dalian) Co., Ltd. Formerly Panasonic Appliances Refrigeration System (Dalian) Co., Ltd., one of the subsidiary of the Company, where the Company holds 100% of its shares indirectly. |
JingXue Insulation | Stands for |
Jiangsu JingXue Insulation Technology Co.,Ltd., one of the associated companies of theCompany, where the Company holds 14.91% of its shares.
Section 2 About the Company and Main Financial Indicators
Company information
Short form of the stock | Bingshan; Bingshan B |
Stock code | 000530; 200530 |
Listed stock exchange | Shenzhen Stock Exchange |
Legal name in Chinese | 冰山冷热科技股份有限公司 |
Legal name abbreviation in Chinese | 冰山冷热 |
Legal English name | Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd. |
Legal English name abbreviation | Bingshan |
Legal representative | Ji Zhijian |
Registered address | No.106, Liaohe East Road, Dalian Economic and Technological Development Zone |
Post code of Registered address | 116630 |
Historical changes of the Company's registered address | Due to the overall relocation, the registered address of the Company was changed from 888 Southwest Road, Shahekou District, Dalian to 106 Liaohe East Road, Dalian Economic and Technological Development Zone in March 2017. |
Office address | No.106, Liaohe East Road, Dalian Economic and Technological Development Zone |
Post code of Office address | 116630 |
Internet web site of the Company | www.bingshan.cn |
E-mail of the Company | 000530@bingshan.com |
II. Contact persons and information
Secretary of the Board of Directors | Authorized representative for securities affairs | |
Name | Song Wenbao | Du Yu |
Address | Bingshan Securities﹠Legal Affairs No.106, Liaohe East Road, Dalian Economic and Technological Development Zone | Bingshan Securities﹠Legal AffairsNo.106, Liaohe East Road, Dalian Economic and Technological Development Zone |
Tel. | 0411-87968130 | 0411-87968822 |
Fax | 0411-87968125 | 0411-87968125 |
000530@bingshan.com | 000530@bingshan.com |
III. Information disclosure and place of preparation for inquiry
Stock exchange website where companies disclose annual reports | Shenzhen Stock Exchange |
Name of the newspaper designated the address of the website for publishing this Annual Report | China Securities Daily, Securities Times and http://www.cninfo.com.cn |
Place where this Annual Report was prepared for inquiry | Securities﹠Legal Affairs Department of the Company |
IV. Alteration to the registration
Organization code | 912102002423613009 |
Change in main business since the Company was listed | No change |
Changes in the holding shareholder | No change |
V. Other related information
Accounting firm engaged by the Company
Name of accounting firm | ShineWing CPAs (Special General Partnership) |
Office location of accounting firm | 9/F,A Building No.,8 north street of Chao Yang Men, Dong Cheng District Beijing, China |
Name of signing certified public accountant | Lin Li, Zhang Shizhuo |
Sponsor the Company appointed for performance of the consistent supervision duty in the reporting period
□ Applicable √ Not applicable
Financial consultant the Company appointed for performance of the consistent supervision duty in the reportingperiod? Applicable □ Not applicable
Name of Financial consultant | Office location of accounting firm | Name of sponsor of financial advisor | Continuous supervision period |
Guotai Junan Securities Co., LTD | Guotai Junan Building, 768 Nanjing West Road, Jing 'an District, Shanghai | Dong Shuai、Li Xiang | From November 11, 2022 to December 31, 2023 |
VI. Main accounting data and financial indicatorsDid 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
2022 | 2021 | Increase/decrease compared with previous year | 2020 | |
Operating revenue | 2,893,085,310.29 | 2,089,208,256.22 | 38.48% | 1,727,267,935.15 |
Net profit attributable to shareholders of listed companies | 18,255,330.45 | -269,059,849.96 | 106.78% | 21,341,133.39 |
Net profit belonging to the shareholders of listed companies after the deduction of non-recurring profit and loss | -273,460,147.18 | -355,049,953.56 | 22.98% | 6,128,351.99 |
Net cash flow from operating activities | -56,247,299.36 | 1,518,218.37 | - | -13,142,427.45 |
Basic earnings per share | 0.02 | -0.32 | 106.25% | 0.025 |
Diluted earnings per share | 0.02 | -0.32 | 106.25% | 0.025 |
Weighted average return on net asset yield | 0.61% | -8.31% | Inecrease 8.92 percentage points | 0.64% |
2022.12.31 | 2021.12.31 | Increase/decrease compared with previous year | 2020.12.31 | |
Total assets | 7,601,935,329.60 | 5,735,570,604.67 | 32.54% | 5,681,568,328.36 |
Owner's equity attributable to shareholders of listed companies | 3,006,190,831.84 | 3,002,842,837.47 | 0.11% | 3,375,609,788.07 |
The lower of the Company’s net profit before and after deduction of non-recurring gains and losses in the mostrecent three fiscal years are all negative, and the audit report in the last year shows that the Company's ability tocontinue operations is uncertain
□ Applicable √ Not applicable
The lower of the net profit before and after non-recurring gains and losses is negative
√ Applicable □ Not applicable
Item | 2022 | 2021 | notes |
Operating income (yuan) | 2,893,085,310.29 | 2,089,208,256.22 | |
Amount deducted from operating income (yuan) | 90,313,957.47 | 62,109,983.70 | Income from sales of materials, rental of fixed assets and labor services other than normal operation. |
Amount after deduction of operating income (yuan) | 2,802,771,352.82 | 2,027,098,272.52 |
VII.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 StandardsThe difference of accounting data between as per Chinese Accounting Standards and as per InternationalAccounting Standards was 0.
3.Explanation of reasons for differences in accounting data under domestic and foreignaccounting standards
√Applicable □Not applicable
The difference of accounting data between as per Chinese Accounting Standards and as per InternationalAccounting Standards was 0.
VIII. The quarter main financial indicators
the first quarter | the second quarter | the third quarter | the fourth quarter | |
Operating revenue | 580,124,203.74 | 711,734,704.97 | 752,258,640.60 | 848,967,760.98 |
Net profit attributable to shareholders of listed companies | -12,758,270.89 | 42,326,622.41 | -21,540,127.71 | 10,227,106.64 |
Net profit belonging to the shareholders of listed companies after the deduction of non-recurring profit and loss | 5,827,430.25 | 4,877,688.10 | -23,177,485.56 | -260,987,779.97 |
Net cash flow from operating activities | -106,839,308.54 | -82,567,028.31 | -105,495,236.74 | 238,654,274.23 |
IX. Non-recurring profits and losses and their amounts
item | 2022 | 2021 | 2020 |
Disposal gains and losses of non-current asset | 109,194,830.34 | 27,724,344.91 | -169,550.05 |
Government subsidies included in current profit or loss | 11,878,746.43 | 15,993,001.31 | 17,952,461.57 |
Debt restructuring gains and losses | 230,467.42 | 819,297.68 | |
Profit or loss arising from contingencies unrelated to the normal operation of the company | -2,019,000.00 | ||
Disposal gains from investments on financial assets available for sale, and gains from fair value change of financial assets available for sale | -3,694,509.36 | 55,245,024.14 | 4,362,148.57 |
Other non-operating revenue or expense | 8,754,118.59 | -5,129,941.48 | -4,643,229.90 |
Other profit and loss items that meet the definition of non recurring profit and loss | 170,729,805.79 |
Influence on income tax | 2,961,966.70 | 8,490,868.44 | 1,995,261.63 |
Influence on minority shareholders | 397,014.88 | 170,754.52 | 293,787.16 |
Total | 291,715,477.63 | 85,990,103.60 | 15,212,781.40 |
Note: Other profit and loss items that meet the definition of non recurring profit and loss are those in which theCompany is able to control the aforementioned company due to additional investment in Sonyo Compressors andSonyo Refrigeration System. The difference between the fair value and book value of the aforementionedcompany's equity held by the Company before the purchase date is recognized as investment income.
Section 3 Management discussion and analysis
The industry situation of the Company during the reporting period
1. Industry development trend
In recent years, the influence of refrigeration and air conditioning industry in China's national economy is growing,conferring increasing influence upon consumption upgrade, food safety and livelihood improvement. Besides,development model under high-end, intelligent, green and service is experiencing rapid growth.In 2022, the refrigeration and air-conditioning industry was facing a complex and severe market situation at homeand abroad. The problems of intensified market competition, increased cost pressure, difficulty in improvingefficiency and high accounts receivable continued to plague the operation and development of the industry.In 2023, the industry will continue to differentiate, competition will continue to intensify, difficulties andopportunities coexist. Upgrading of major enterprises in the industry will be further accelerated. Intelligentmanufacturing, green manufacturing and service-oriented manufacturing will become increasingly prominent, andthe pace of high-quality development will be more robust.
2. Challenges and opportunities faced by the Company
(1)Opportunities faced by the Company
Energy conservation, carbon reduction and improving energy efficiency have become the consensus of the wholesociety; Overall promotion of the national "double carbon" strategy; The 14th five year plan for the developmentof cold chain logistics has been issued, and the market demand for cold chain equipment is expected to growrapidly; With the promulgation of the new cold storage design standard, the use opportunities of ammoniarefrigerant have increased.With the strong technology bases, innovative business model, and system advantages, the Company is capable ofcapturing the above opportunities in a good position.
(2)Challenges faced by the Company
The cultivation of energy conservation and emission reduction market still needs time; the transformation andupgrading process is complex.
II. The Company’s Main business during the reporting periodFocusing 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 andcold industry chain and creating a complete hot and cold industry chain.The Company's main products include piston and screw refrigeration compressors, pressure vessels,combined warehouses, controlled atmosphere storage, quick freezer, ice maker, flake ice maker, granulator,etc., which are used in national defense, scientific research, petroleum, chemical, textile, medicine, powergeneration, agriculture, animal husbandry, fishery and catering service industries. The Company's productsales and comprehensive solutions provide both domestic and international markets, with self-supportingsales as the main and channel sales as the auxiliary.During the reporting period,, rigid demands such as food safety, consumption upgrading, energyconservation and carbon reduction will benefit the refrigeration and air conditioning industry. At the sametime, the refrigeration and air conditioning industry is also facing the problems of intensified marketcompetition, increased cost pressure, and difficulty in improving efficiency. Facing the opportunities andchallenges, focusing on the hot and cold industry, the Company continued to deeply cultivate theadvantageous market segments such as cold chain logistics, petrochemical industry, beer and dairy products,
meat slaughtering, ship refrigeration, ice and snow venues and polysilicon, vigorously expanded CCUS,ORC, photovoltaic and other new undertakings, 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.During the reporting period, the Company has signed many projects with multinational industry giants suchas BASF in Germany and Albemarle in the United States, which has significantly improved the influence ofBingshan brand in the industry.
2. Commercial refrigeration business
Commercial refrigeration is the Company's core business. In China, the Company takes the lead in openingup the 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.During the reporting period, the Company has successfully signed key projects such as the GuangxiFangcheng Port Fishery Wharf Cold Storage Project, the Guangzhou Yuhu Cold Chain Market TradingCenter Refrigeration Project, and the Shanxi Yiming Phase II Meat Products (Precast Dishes) ProcessingProject.
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 moreenergy-saving and environmental protection products around the blue sky project, and accelerated thetransformation and upgrading 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 providescorresponding solutions in different segments around these innovative products. For hospitals, electronicfactories, high-end real 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 to
manufacturing, 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 servicesfor customers 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 continuousintroduction of environmental governance policies, the domestic industrial energy conservation andenvironmental protection industry is growing rapidly, the level of energy conservation and consumptionreduction of enterprises and the comprehensive utilization of resources is constantly improving, and theenergy industrial structure has changed. Strengthening the optimal utilization of energy has become adevelopment trend. For low-grade energy recycling, the Company provides customers with a series ofenergy-saving, environmental protection, efficient new products, in line with the national strategicrequirements of energy conservation, carbon reduction and sustainable development, and contributesprofessional wisdom to the national carbon peak and carbon neutral strategy.During the reporting period, the Company made good progress in CCUS, ORC, photovoltaic and other newundertakings.
III. Analysis of core competenceThe Company focuses on main business of refrigeration and heating; independent R&D and jointventure partnerships are cooperate with each other effectively; capital resources integration andbusiness model innovation are in a positive interaction; the community of business and interest arebeing multi-storey created; the develop mode with Bingshan characteristic are formed.The Company has the integrated refrigeration and heating industrial chain for offering kinds ofcomprehensive solution services, including design, manufacture, installation and maintenance etc.,and can satisfy individual requirements preferably.The Company possesses a mature and solid marketing networks and after-sale service networkon/off-line, and can offer high quality and high value-added services more initiative and faster forclients from around the city.Following the technical route of cold and heat balance, the Company has independently developed aseries of energy-saving, environment-friendly, efficient and intelligent cold and heat technologiesand products, and actively fulfilled the dual carbon responsibility.While promoting the transformation and upgrading of its inherent business in an orderly manner,the Company actively cultivates new momentum for development, and the path of sustainablegrowth is increasingly clear.During the reporting period, the Company focused on the hot and cold business, deeply cultivatedthe market segment, and steadily improved its sales force, product force, technical force,engineering force and service force, so as to further enhance its core competitiveness.
IV. Analysis of main business
1. summarize
In 2022, the Company focused on hot and cold business, deeply cultivated market segments, solidly enhancedcore competitiveness, and accelerated the improvement of main business. In 2022, the Company achievedoperating revenue of 2,893.09 million yuan, up 38.48% year on year; The net profit attributable to shareholders ofthe listed company was 18.26 million yuan, turning losses into profits on a year-on-year basis.
During the reporting period, the Company was honest, innovative and pragmatic. Enrich and strengthen themanagement team, adjust and optimize the organizational structure and business processes. Multiple strategieswere taken simultaneously to effectively improve production capacity and productivity, and the monthly outputvalue reached a new record high. Close to the market and leading the market, we independently developedpetrochemical standard LNG BOG compressor units, ammonia heat pump units, high standard project units andother highlight products. The "National High-end Equipment Manufacturing Industry Standardization Pilot" wassuccessfully accepted. The Company was selected into the list of Liaoning Intelligent Factory in 2022. TheCompany's cascade ammonia screw heat pump unit was selected as the "Innovative Product of 2022 ChinaRefrigeration Exhibition". The screw refrigeration unit for large ocean going fishing vessels of the Company wasselected as the "specialized, refined and new" product of Liaoning Province in 2022.
During the reporting period, Bingshan Engineering Company, a subsidiary of the Company, continued to deepenits competitive market segments. In the field of product business, it actively serves high-end customers, and hassigned many projects with multinational industry giants such as BASF in Germany and Albemarle in the UnitedStates, which has significantly improved the influence of Bingshan brand in the industry; Join hands with leadingenterprises to lead the polysilicon market and win large orders. In the field of engineering, the Xinjiang CentralKitchen Project, the Shanghai Star Indoor Comprehensive Ice and Snow Venue Project and other landmarkprojects were orderly constructed, and key projects such as the Guangxi Fangcheng Port Fishery Wharf ColdStorage Project, the Guangzhou Yuhu Cold Chain Market Trading Center Refrigeration Project, and the ShanxiYiming Phase II Meat Products (Precast Dishes) Processing Project were successfully signed. In the field ofenergy industry, CCUS projects have been rapidly promoted, and many demonstration projects of centralenterprises have been successfully signed, with a substantial year-on-year increase in orders.
During the reporting period, the Company's subsidiary Wuhan New World Refrigeration further optimized itsproducts and solutions. Based on the existing traditional products, it focused on expanding the market segments ofenergy, coal mines and LNG. The main model of energy products has achieved good results in marketing, and thesteam screw compressor unit has achieved a breakthrough in sales of new products. The largest single unitinstalled power project of ORC screw expansion generator set - Jiangsu Silbang Petrochemical Waste Heat PowerGeneration Project has successfully generated electricity, realizing full automatic unattended operation.
During the reporting period, the subsidiary of the Company, Bingshan Guardian, focused on energy saving controlof cooling and heating systems, and achieved rapid and qualitative growth. New Meica was absorbed and mergedto achieve resource integration, complementary advantages and efficient operation. Continuously improve andoptimize edge computing intelligent devices and energy-saving control algorithms, and effectively improve thelevel of refined and intelligent control. It won the bid for the distribution box project of the Dalian Bay underseatunnel project, helping Dalian's key projects.
During the reporting period, the Company's subsidiary, Bingshan Ryosetsu, vigorously expanded the cause ofquick freezing. It is specialized in assisting major corn producing areas in Heilongjiang, Xinjiang, Hebei and othermajor corn producing areas in China to achieve a total capacity distribution of 150 tons/hour for quick freezing offresh corn. The down spin flow rate freezer for corn cob was selected as the "Innovative Product of 2022 ChinaRefrigeration Exhibition". The fresh corn quick freezing machine was selected into the Guiding Catalogue for thePromotion and Application of the First (Set) Major Scientific and Technological Equipment in Liaoning Province.
During the reporting period, in order to further strengthen the hot and cold main business, the Company plannedand implemented a major asset restructuring. After the reorganization is completed in November 2022, theCompany directly or indirectly holds 100% of the shares of Sonyo Compressor and Sonyo Refrigeration System.
2. Sales income and costs
(1) Sales income structure
2022 | 2021 | Year-on-year increase/decrease | |||
Amount | Proportion to the Sales costs | Amount | Proportion to the Sales costs | ||
Total sales income | 2,893,085,310.29 | 100% | 2,089,208,256.22 | 100% | 38.48% |
By industry | |||||
Refrigeration and air-conditioning equipment | 2,803,347,359.37 | 96.90% | 2,031,958,305.49 | 97.26% | 37.96% |
Others | 89,737,950.92 | 3.10% | 57,249,950.73 | 2.74% | 56.75% |
By product | |||||
Industrial product | 1,920,458,161.82 | 66.38% | 1,328,371,290.81 | 63.58% | 44.57% |
Installation works | 857,764,430.03 | 29.65% | 652,866,257.62 | 31.25% | 31.38% |
Others | 114,862,718.44 | 3.97% | 107,970,707.79 | 5.17% | 6.38% |
Domestic sales | 2,713,167,600.04 | 93.78% | 1,994,087,984.59 | 95.45% | 36.06% |
Foreign sales | 179,917,710.25 | 6.22% | 95,120,271.63 | 4.55% | 89.15% |
Total | 2,893,085,310.29 | 100.00% | 2,089,208,256.22 | 100.00% | 38.48% |
(2) Main business structure
Operating revenue | Operating costs | Gross profit | Increase/decrease of operating revenues on a year-on-year basis | Increase/decrease of operating costs on a year-on-year basis | Increase/decrease of gross profit on a year-on-year basis | |
By industry | ||||||
Refrigeration and air-conditioning | 2,803,347,359.37 | 2,459,913,203.46 | 12.25% | 37.96% | 36.04% | Increase 1.24 percentage points |
By product | ||||||
Industrial product | 1,920,458,161.82 | 1,602,696,861.90 | 16.55% | 44.57% | 40.92% | Increase 2.17 percentage points |
Installation works | 857,764,430.03 | 833,747,200.54 | 2.80% | 31.38% | 31.78% | Decrease 0.29 percentage points |
Others | 25,124,767.52 | 23,469,141.02 | 6.59% | -50.46% | -38.60% | Decrease 18.05 percentage points |
By region | ||||||
Domestic sales | 2,630,083,287.55 | 2,305,266,150.99 | 12.35% | 35.79% | 33.29% | Increase 1.64 percentage points |
Foreign sales | 173,264,071.82 | 154,647,052.47 | 10.74% | 82.15% | 96.21% | Decrease 6.40 percentage points |
By sales model | ||||||
Total | 2,803,347,359.37 | 2,459,913,203.46 | 12.25% | 37.96% | 36.04% | Increase 1.24 percentage points |
(3)Was the Company's sales income on material objects more than that on labor service?
√ Yes □ No
Industry category | Item | 2022 | 2021 | Year-on-year increase/decrease |
Main refrigeration unit for industrial or commercial use | Sales volume | 2,086 | 1,921 | 8.59% |
Production output | 2,112 | 1,918 | 10.11% | |
Inventory level | 409 | 383 | 6.79% |
Reason for change in the related data by 30% or higher on a year-on-year basis
□ Applicable √ Not applicable
(4)Performance of major sales contracts and major procurement contracts signed by the company up tothe reporting period? Applicable √ Not applicable
(5)Sales cost structure
Industry category | Item | 2022 | 2021 | Year-on-year increase/decrease | ||
Amount | Proportion to the operating costs | Amount | Proportion to the operating costs | |||
Refrigeration and air-conditioning | Direct materials | 2,205,570,125.13 | 86.92% | 1,549,104,567.26 | 83.76% | 42.38% |
Labor wages | 208,996,790.95 | 8.24% | 182,511,399.62 | 9.87% | 14.51% | |
Depreciation | 33,450,400.07 | 1.32% | 35,318,984.53 | 1.91% | -5.29% | |
Utilities | 19,274,676.78 | 0.76% | 18,771,030.25 | 1.01% | 2.68% | |
Others | 70,236,848.47 | 2.77% | 63,825,290.63 | 3.45% | 10.05% | |
Total operating costs | 2,537,528,841.40 | 100.00% | 1,849,531,272.29 | 100.00% | 37.20% |
(6) Was the Company's consolidated range change during the reporting period?? Applicable ? Not applicableCompared with last year, there are two more entities included in the consolidated financial statements this year:
Sonyo Compressor (Dalian) Co., Ltd. and Sonyo Refrigeration System (Dalian) Co., Ltd. due to major assetreorganization. Due to the sale, absorption and merger of Ningbo Bingshan Refrigeration and Air ConditioningEngineering Co., LTD., Bingshan Technology Service (Dalian) Co., LTD., Dalian New Meica ElectronicsTechnology Co., LTD.
(7) Major change or adjustment in the Company's products or service in the reporting period
□ Applicable √ Not applicable
(8) Information on the Company's major customers and major suppliers
Information on the Company's major customers
Total sales volume from top five customers (yuan) | 480,662,540.28 |
Proportion of the total sales volume from top five customers to the annual sales volume | 16.61% |
Proportion of the related party total sales volume from top five customers to the annual sales volume | 5.91% |
Information on the Company's top five customersAmong the top five customers mentioned above, Panasonic cold chain (Dalian) Co., Ltd. is related to theCompany.
Information on the Company's major suppliers
Total purchase volume from top five suppliers (yuan) | 328,474,626.75 |
Proportion of the total purchase volume from top five suppliers to the annual purchases volume | 12.94% |
Proportion of the related party total purchase volume from top five suppliers to the annual purchases volume | 1.29% |
Information on the Company's top five suppliers
No. | Name of customer | Sales volume (yuan) | Proportion to the annual sales volume |
1 | Panasonic Cold-chain (Dalian) Co., Ltd. | 171,040,261.51 | 5.91% |
2 | Customer 2 | 87,495,412.86 | 3.02% |
3 | Hualu Engineering Technology Co., Ltd. | 83,741,150.43 | 2.89% |
4 | Xinjiang Silk Road Tianshan International Food City Investment Co., Ltd. | 77,847,114.52 | 2.69% |
5 | Shanghai Construction Engineering Group Co., Ltd. | 60,538,600.96 | 2.09% |
Total | —— | 480,662,540.28 | 16.61% |
No. | Name of supplier | Purchase volume (yuan) | Proportion to the annual purchase volume |
1 | Shenyang Bao Gang Northeast Trade Co., Ltd. | 162,603,719.85 | 6.41% |
2 | Longkou Longpeng Precision Copper Pipe Co. Ltd. | 67,635,219.89 | 2.67% |
3 | Angang Steel Co. Ltd. | 35,490,399.39 | 1.40% |
4 | BAC Dalian Co., Ltd. | 32,827,251.97 | 1.29% |
5 | Shanghai Dingfeng Gongtong Technology Co., Ltd. | 29,918,035.65 | 1.18% |
Total | —— | 328,474,626.75 | 12.94% |
Among the top five suppliers mentioned above, BAC Dalian Co., Ltd. had an associated relationship with theCompany.
3. Expenses
2022 | 2021 | Increase/decrease of gross profit on a year-on-year basis | Explain for major changes | |
Selling expenses | 153,735,714.96 | 130,633,909.30 | 17.68% | |
Administrative expenses | 186,378,204.50 | 170,613,436.15 | 9.24% | |
Financial expenses | 11,825,523.03 | 13,941,926.23 | -15.18% | |
R&D expenses | 76,792,805.69 | 65,269,765.23 | 17.65% |
4. R&D expenditure
Information on R&D expenditure
2022 | 2021 | Increase/decrease on a year-on-year basis | |
The quantity of the person engaged in R&D | 306 | 304 | 0.66% |
The quantity proportion of the person engaged in R&D | 14.18% | 17.53% | -3.35% |
The spending amount on R&D(yuan) | 76,792,805.69 | 65,269,765.23 | 17.65% |
R&D spending accounts for the proportion of revenue | 2.65% | 3.12% | Decrease 0.47 percentage points |
The amount of R&D investment capitalization(yuan) | 0.00 | 0.00 | 0.00% |
Capitalize R&D investment for the proportion of R&D spending | 0.00% | 0.00% | 0.00% |
Reasons for the remarkable change in R&D spending accounts for the proportion of revenue compared with theprevious year
□ Applicable √ Not applicable
Reasons for the substantial changes in the capitalization rate of R&D investment and its rationality
□ Applicable √ Not applicable
5. Cash flows
Item | 2022 | 2021 | Year-on-year increase/decrease |
Sub-total of cash inflows from operating activities | 2,419,852,020.16 | 2,084,554,545.45 | 16.08% |
Sub-total of cash outflows from operating activities | 2,476,099,319.52 | 2,083,036,327.08 | 18.87% |
Net amount of cash flow generated in operating activities | -56,247,299.36 | 1,518,218.37 | -3,804.82% |
Sub-total of cash inflows from investing activities | 419,938,843.20 | 324,356,502.38 | 29.47% |
Sub-total of cash outflows from investing activities | 452,538,330.23 | 76,095,331.84 | 494.70% |
Net amount of cash flow generated in investing activities | -32,599,487.03 | 248,261,170.54 | -113.13% |
Sub-total of cash inflows from financing activities | 871,841,047.27 | 347,516,847.94 | 150.88% |
Sub-total of cash outflows from financing activities | 301,774,629.30 | 473,406,304.78 | -36.25% |
Net amount of cash flow generated in financing activities | 570,066,417.97 | -125,889,456.84 | 552.83% |
Net increase in cash and cash equivalents | 482,692,465.30 | 123,990,877.38 | 289.30% |
Reason for change in the related data by 30% or higher on a year-on-year basis
√ Applicable □ Not applicable
1. Net cash flow generated from operating activities decreased significantly year-on-year, mainly due to anincrease in cash paid for purchasing goods and receiving services.
2. Net cash flow generated from investment activities decreased significantly year-on-year, mainly due to theCompany's payment for the acquisition of equity in Sonyo Compressors and Sonyo Refrigeration System.
3. Net cash flow generated from financing activities has significantly increased year-on-year, mainly due to theacquisition of bank mergers and acquisitions loans through major asset restructuring projects.
Reason for remarkable difference between the cash flows from the Company's operating activities in the reportingperiod and the net annual profit.
□Applicable √ Not applicable
V. Analysis of the non-main business
□ Applicable √ Not applicable
VI. Analysis of assets & liabilities
1. Remarkable change in assets
Monetary unit: RMB yuan
2022.12.31 | 2021.12.31 | Proportion increase/decrease | Explain for major changes | |||
Amount | Proportion to the total assets | Amount | Proportion to the total assets | |||
Monetary funds | 1,006,165,899.18 | 13.24% | 522,658,505.79 | 9.11% | Increase 4.13 percentage points | Mainly due to changes in merger criteria after major asset restructuring |
Accounts receivable | 1,409,978,442.95 | 18.55% | 821,548,678.85 | 14.32% | Increase 4.23 percentage points | Mainly due to changes in merger criteria after major asset restructuring |
Contract assets | 225,790,875.78 | 2.97% | 109,859,658.79 | 1.92% | Increase 1.05 percentage points | |
Inventories | 1,395,344,780.24 | 18.36% | 1,014,527,127.82 | 17.69% | Increase 0.67 percentage points | |
Investment property | 115,332,918.20 | 1.52% | 120,752,809.61 | 2.11% | Decrease 0.59 percentage points | |
Long-term equity investment | 562,987,771.94 | 7.41% | 1,231,504,533.45 | 21.47% | Decrease14.06 percentage points | Mainly due to Sonyo Compressor and Sonyo Refrigeration System to become a subsidiary company, and Panasonic cold chain equity transfer |
Fixed assets | 1,229,029,368.93 | 16.17% | 855,395,405.85 | 14.91% | Increase 1.26 percentage points | |
Construction in progress | 115,577,902.54 | 1.52% | 38,974,478.45 | 0.68% | Increase 0.84 percentage points |
Use right assets | 30,941,662.26 | 0.41% | 23,934,703.37 | 0.42% | Decrease 0.01 percentage points | |
Short-term loans | 274,052,990.15 | 3.61% | 245,937,091.72 | 4.29% | Decrease 0.68 percentage points | |
Contract liabilities | 647,645,820.57 | 8.52% | 499,719,963.40 | 8.71% | Decrease 0.19 percentage points | |
Long-term loans | 715,100,000.00 | 9.41% | 150,000,000.00 | 2.62% | Increase 6.79 percentage points | Mainly due to the Company obtained bank acquisition loan for major asset reorganization |
Lease liabilities | 11,230,532.05 | 0.15% | 5,394,021.14 | 0.09% | Increase 0.06 percentage points |
2. Assets & liabilities which are measured by fair value
√ Applicable □ Not applicable
Other non-current financial asset measured in fair value is 261,410,664.61 yuan at the year beginning,and149,950,861.31 yuan at the year end, with a selling amount of 107,495,400.00yuan.Restrictions on asset rights as of the end of the reporting periodBy the end of reporting period, the Company’s asset rights was limited, mainly including monetary funds84,504,096.01 yuan, the reason for the limitation is the deposit and the bank account were frozen; notes receivable98,917,384.72 yuan, the reason for the limitation is bank pledge; fixed assets 62,207,555.51 yuan, the reason forthe limitation is mortgage.VII. Analysis of investments
1.The overall situation
√ Applicable □ Not applicable
Investment in 2022(yuan) | Investment in 2021(yuan) | Amount of variation |
562,987,771.94 | 1,231,504,533.45 | -54.28% |
The long-term equity investment decreased by 54.28% compared to the end of 2021, mainly due to the subsidiarycompanies of Sonyo Compressor and Sonyo Refrigeration System, as well as the equity transfer of PanasonicCold Chain.
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
Stock code | Stock abbreviation | Initial investment cost | Accounting measurement model | Book value at the beginning | Changes in the profit and loss of the fair value in this period | Accumulative change of fair value credited to equity | Current sale amount | Report period profit and loss | Book value in the ending | Accounting subjects | Source of funds |
601211 | Guotai Jun’an | 10,910,008.00 | fair value measure | 195,180,043.12 | -46,991,034.40 | 0.00 | 5,289,000.00 | -39,572,228.96 | 148,267,008.72 | Other Non-current financial | Own funds |
ment | assets | |||||||||
total | 10,910,008.00 | -- | 195,180,043.12 | -46,991,034.40 | 0.00 | 5,289,000.00 | -39,572,228.96 | 148,267,008.72 | -- |
Until 31 December, 2022, the Company held 10,910,008 numbers of shares of Guotai Jun’an Securities Co., Ltd..The Company sold 300,000 numbers of shares of Guotai Jun’an, and received cash dividend RMB 7,418,805.44Yuan during the reporting period.
(2) Derivative investment
□Applicable √ Not applicable
During the reporting period, the Company does not exist derivative investment.
5. The use of funds raised
□Applicable √ Not applicable
VIII. The material assets and equity sale
1. The material assets sale
□Applicable √Not applicable
2. The material equity sale
√Applicable □Not applicable
During the reporting period, the Company transferred 17.8% of its equity in Thermoking Container TemperatureControl (Suzhou) Co., Ltd. This equity transfer is beneficial for the Company to appropriately activate non currentfinancial assets, optimize asset structure, and assist in improving its main business.
During the reporting period, the Company transferred 40% of its equity in Panasonic Appliances Cold Chain(Dalian) Co., Ltd. This equity transfer is beneficial for the Company to optimize its asset structure, highlight itsmain business, and assist in improving its main business.
IX. Analysis of major subsidiary companies and mutual shareholding companies
√ Applicable □ Not applicable
Unit: ten thousand yuan (except for registered capital)
Company name | Type | The main business | registered capital | total assets | net assets | ||
Fuji Bingshan | mutual shareholding company | Vending machine development, manufacturing, sales, installation, maintenance and related consulting and after-sales service | JPY 4,000 million | 66,749 | 22,627 | 17,546 | 243 |
Jingxue Insulation | mutual shareholding company | New building energy-saving board, refrigerated storage door | RMB 108 million | 166,041 | 80,305 | 90,252 | 3,972 |
Bingshan Metal | mutual shareholding company | High-grade building hardware, plumbing equipment | USD 18,064.5 thousand | 36,826 | 31,846 | 43,312 | 6,240 |
Subsidiary companies obtained or disposed in the reporting period
√Applicable □Not applicable
Compared with the previous year, the entities included in the consolidated financial statements this year increasedby two companies, including Bingshan Sonyo Compressor (Dalian) Co., Ltd. and Bingshan Sonyo RefrigerationSystem (Dalian) Co., Ltd., due to significant asset restructuring. Additionally, three companies, including NingboBingshan Refrigeration Air Conditioning Engineering Co., Ltd., Bingshan Technical Services (Dalian) Co., Ltd.,and Dalian New Meica Electronic Technology Co., Ltd., were reduced due to sales or mergers.
X. The structured corporate bodies which the Company controlled
□Applicable √Not applicable
XI. Development prospect of the CompanyMajor risks faced and countermeasures adopted by the Company
(1)Increasing market competition risk
Countermeasures: focus on the hot and cold industry, deeply cultivate the market segmentation; rapidly improvethe 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.
In 2023, the Company will focus on the hot and cold business, deeply cultivate the market segment, solidlyimprove the core competitiveness of sales, product, technology, engineering, service and continue to promote theimprovement of main business.
In 2023, the main business strategies are as follows:
(1) Sales force. Strengthen sales system and market segmentation. For the product sector, consolidate thetraditional market, strengthen the development of new areas, and improve the complete set capacity of therefrigeration station. For the engineering sector, integrate and improve the comprehensive solution capability ofcomplete sets, and improve the quality of complete sets of orders with the proportion of engineering quality andself products. For the energy sector, expand core technologies, embrace the dual carbon policy, and achievesustainable development.
(2) Product force. Accelerate the development of new products based on the market. Continue to promote productstandardization, serialization and modularization. Strictly implement the AQ development system and optimizethe product development process. Integrate the internal technical resources of Bingshan to realize collaborativedesign and development.
(3) Technical force. Focusing on CO
system solutions, intelligent zero carbon park comprehensive solutions,ultra-low charging system technology, high temperature heat pump heat recovery and other engineeringtechnologies, continue to optimize and improve.
(4) Engineering force. Establish and improve the whole project progress management system. Standardize andstrengthen budget process management. Promote the standardization of staffing and process control. Seriouslytake responsibility for acceptance and accelerate project acceptance.
(5) Service force. Strengthen the service and marketing support within the warranty period to improve customersatisfaction. Continuously optimize business processes, deepen post training, and improve service quality andefficiency.
The above-mentioned business plan does not represent the earnings forecast of listed companies for the year of2023. Whether it can be achieved depends on the changes of market conditions and the efforts of managementteams and other factors. There are great uncertainties. Investors should pay special attention to it.
XII. Record of investigation, communication, and other activities in the reporting period
□Applicable √Not applicable
Section 4 Corporate governance
I. Basic situation of corporate governance
Within the reporting period, the Company centered around the operation subject as “Leading innovation, Creatingvalue” with the theme " integrity, innovation and return of the king"”, relying on the opportunity of overallrelocation and transformation of the Company, to further deepen and perfect the normative internal control systemand upgrade the governing level of the Company continuously.
There were no problems with the Company concerning horizontal competition caused by restructures and otherreasons. The main normal associated transactions between the Company and the associated companies includedpurchasing the supporting products for package projects from the associated companies, and selling the supportingparts and components to the associated companies and providing them with the labor service. Associatedtransactions between the Company and the associated companies are necessary for normal production andoperation and helpful for the Company’s healthy development, and therefore will continue. The Company willstrictly follow the related decision-making procedures and fulfill the obligation in information disclosure in orderto further regulate associated transactions.Was there any deviation of the Company's corporate governance from the requirements in the Company Law andChina Securities Regulatory Commission's regulations?
□ Yes √ No
There was no deviation of the Company's corporate governance from the requirements in the Company Law andChina Securities Regulatory Commission's regulations.
II. Status of the Company's business, staff, asset, organization and finance separations fromthe holding shareholder
The Company was separated from the holding shareholder in business, staff, asset, organization and finance, andhas the independent and complete business and operation capability.
III. Horizontal competitions
□ Applicable √ Not applicable
IV Shareholders’ general meeting convened in the reporting period
1. Annual Shareholders’ general meeting within this reporting period
Session number of meeting | The type of the meeting | The proportion of participate investors | date | Disclosing date | Disclosing index |
The 1st Extraordinary Shareholders’ General Meeting of 2022 | Extraordinary Shareholders’ General Meeting | 29.37% | Jan.12, 2022 | Jan.13, 2022 | http://www.cninfo.com.cn |
Annual Shareholders’ General Meeting | Annual Shareholders’ general meeting | 29.74% | May 18, 2022 | May 19, 2022 | http://www.cninfo.com.cn |
The 2nd Extraordinary Shareholders’ General Meeting of 2022 | Extraordinary Shareholders’ General Meeting | 20.67% | Nov 1,2022 | Nov 2,2022 | http://www.cninfo.com.cn |
V. Information on the Company’s Directors, Supervisors, Senior Management and Staff
1. basic information
Name | Position | Office-holding state | Sex | Age | Starting date of office term | Ending date of office term | (shares) | (shares) | (share) | (shares) |
Ji Zhijian | Chairman | Incumbent | M | 55 | 2022 | 2025 | 1,528,830 | 0 | 0 | 1,528,830 |
Fan Wen | Director | Incumbent | M | 58 | 2022 | 2025 | 7,770 | 0 | 0 | 0 |
Yin Xide | Vice Chairman/ General manager | Incumbent | M | 51 | 2022 | 2025 | 90,080 | 0 | 0 | 90,080 |
Song Wenbao | Director/ Board secretary | Incumbent | M | 49 | 2022 | 2025 | 593,880 | 0 | 0 | 593,880 |
Dono Shigeru | Director | Incumbent | M | 61 | 2022 | 2025 | 0 | 0 | 0 | 0 |
Nishimoto Shigeyuki | Director | Incumbent | M | 56 | 2022 | 2025 | 0 | 0 | 0 | 0 |
Zhai Yunling | Independent director | Incumbent | M | 59 | 2022 | 2025 | 0 | 0 | 0 | 0 |
Liu Yuanyuan | Independent director | Incumbent | F | 48 | 2022 | 2025 | 0 | 0 | 0 | 0 |
Yao Hong | Independent director | Incumbent | F | 49 | 2022 | 2025 | 0 | 0 | 0 | 0 |
Hu Xitang | Chairman of the board of Supervisors | Incumbent | M | 55 | 2022 | 2025 | 0 | 0 | 0 | 0 |
Dai Yuling | Supervisor | Incumbent | F | 45 | 2022 | 2025 | 0 | 0 | 0 | 0 |
Li Sheng | Supervisor | Incumbent | M | 43 | 2022 | 2025 | 0 | 0 | 0 | 0 |
Wang Jinxiu | Chief Financial Officer | Incumbent | F | 52 | 2022 | 2025 | 5,000 | 0 | 0 | 5,000 |
Yang Fuhua | Deputy general manager | Incumbent | M | 51 | 2022 | 2025 | 0 | 0 | 0 | 0 |
Lu Jun | Deputy general manager | Incumbent | M | 57 | 2022 | 2025 | 2,500 | 0 | 0 | 2,500 |
Total | 2,228,060 | 0 | 0 | 2,228,060 |
During the reporting period, whether any directors or supervisors leave office or seniormanagers are dismissed
√Applicable □Not applicable
On January 12, 2022, the Company's board of directors change the term of office, The former director of theCompany Ding Jie ,Xun Junrao and Yokoo Sadaaki no longer served as director of the Company.
Changes of directors, supervisors, senior managers of the Company
Name | Position held | Type | Date | Reason |
Ding Jie | Vice Chairman | Leave office after the end of term | Jan 12,2022 | After the general election, Mr. Ding Jie no longer served as vice chairman of the Company |
Xu Junrao | Director | Leave office after the end of term | Jan 12,2022 | After the general election, Mrs. Xu Junrao no longer served as director of the Company |
Yokoo Sadaaki | Director | Leave office after the end of term | Jan 12,2022 | After the general election, Mr. Yokoo Sadaaki no longer served as vice chairman of the Company |
Office holding
Professional background, main work experiences and the main duties and responsibilities of incumbent directors,supervisors, senior managers of the Company
Name | Position held | Professional background | Main work experience | main duties and responsibilities |
Ji Zhijian | Chairman | doctorate degree in management of the Dalian University of Technology | Successively acting as GM, Chairman of Panasonic Cold-Chain.; Chairman and President of Dalian Bingshan Group Co., Ltd.; Chairman of the Company. | Related responsibilities of the Chairman |
Yin Xide | Vice Chairman and GM | Graduated from Dalian University of Technology, majoring in thermal engineering | served as sales director, copy director and General manager of low-temperature logistics Equipment Division of Panasonic Cold Chain (Dalian) Co., LTD.; the General Manager of Panasonic Appliances Refrigerating System (Dalian) Co., Ltd . | Related responsibilities of the Director |
Fan Wen
Fan Wen | Director | Graduate degree | served as vice Minister of Import and Export Department and Minister of Import and Export Department of the Company; Assistant general Manager and Vice President of DalianBingshan Group Co., LTD.; Director of Jiangsu JingXue Insulation Technology Co.,Ltd. | Related responsibilities of the Director |
Song Wenbao | Director and Board Secretary | graduate from Zhejiang University,CFA | Successively acting as representative for securities affairs, board secretary of the Company. | Related responsibilities of Board Secretary |
Dono Shigeru
Dono Shigeru | Director | Graduated from Kyoto University in Japan. | served as technical director of beauty & Life Department, business director and planning director of Kitchen Appliances Division, food distribution business director, Kitchen space business director, HA business director and vice president of Panasonic Corporation; Executive attendant of Panasonic Corporation. Currently, he is the head of household appliances division, head of household appliances, and president of China & Northeast Asia Co., LTD;; the supervisor of Dalian Bingshan Group Co., LTD. | Related responsibilities of the Director |
Nishimoto | Director | graduated from Meiji | served as the director of Financial Planning Room and Finance | Related |
Shigeyuki | university | Department System Overall Room of Panasonic Corporation Headquarter; the director of Regional Financial Integration Room, CFO of Panasonic Corporation China & Northeast Asia Company; the supervisor of Dalian Bingshan Group Co., LTD. | responsibilities of the Director | |
Zhai Yunling | director | Doctor of Law, professor, lawyer | Professor of Law School of Dalian Maritime University, lawyer of Beijing Jincheng Tongda (Dalian) Law Firm, legal adviser of Dalian Municipal People's Government, member/arbitrator of Dalian Arbitration Commission | director |
Liu Yuanyuan
Liu Yuanyuan | director | Doctor of Accounting | Professor of Accounting School of Dongbei University of Finance and Economics, Director of Sino-German Management Control Research Center, independent director of China Railway Tielong Container Logistics Co., LTD.,; independent director of Bank of Dalian Co., LTD.; independent director of Kincai (Liaoning) Life Science and Technology Co., LTD. | Related responsibilities of the Independent director |
Yao Hong |
Independent
director | graduate from China University of Political Science and Law,professor of law | Doctor of Management, School of Economics and Management, Dalian University of Technology, Independent director of Shanghai Binku Network Technology Co., LTD., Independent director of Hualu Zhida Technology Co., LTD., independent director of Harbin Hattou Investment Co., LTD. | director | |
Hu Xitang | Chairman of Board of Supervisors | graduated from Nanjing University of Science and Technology | served as the chairman of the labor union of the Company. | Related responsibilities of the Supervisor |
Dai Yuling
Dai Yuling | Supervisor | Senior Accountant | acting as the chief of the Financial Dept. of Dalian Bingshan Group Company Ltd. | Related responsibilities of the Supervisor |
Li Sheng | Supervisor | graduated from Dalian University of Technology |
acting as the Director of Operation Management Department ofDalian Bingshan Group Company Ltd;chief of the Financial Dept. ofthe Company.
Related responsibilities of the Supervisor | ||||
Yang Fuhua | DGM | graduated from Xi 'an Jiaotong University, Senior Engineer | served as engineer, deputy director and director of complete set design Department of the Company; served as deputy General Manager of Dalian Bingshan Group Engineering Co., LTD; served as chief engineer of the Company's business Headquarters and deputy Head of the Research and development Headquarters. | Related responsibilities of DGM |
Lu Jun
Lu Jun | DGM | graduated from Jilin University of Technology, Graduate degree, Senior Engineer. | served as designer and vice minister of the Company; general Manager of Dalian Bingshan Air-conditioning Equipment Co., Ltd; the Deputy General Manager of Dalian Bingshan Group Engineering Co., LTD. ; the assistant to the general Manager and head of the Operation and Management Department of the Company. | Related responsibilities of DGM |
Wang Jinxiu | CFO | Senior accountant | served as cost accountant in finance Department of the Company and Minister of Finance Department of DalianBingshan Air Conditioning Equipment Co., LTD.; served as the Director of the Financial Management Department of the Company. served as Chief Financial Officer since May 2021. | Related responsibilities of CFO |
Office holding in shareholder unit
√ Applicable □ Not applicable
Name of office holder | Shareholder unit name | Position held in shareholder unit | If receiving remuneration or allowance from shareholder unit |
Ji Zhijian | Dalian Bingshan Group Co., Ltd. | Chairman of the Board, President | Yes |
Fan Wen | Dalian Bingshan Group Co., Ltd. | Vice President | Yes |
Office holding in other units
√ Applicable □ Not applicable
name | unit name | Position held in other unit | If receiving remuneration or allowance from other unit |
Ji Zhijian | Dalian Zhong Huida Refrigeration Technology Co., Ltd. | Chairman | No |
Songzhi-Grand Ocean Cold and Hot Technology (Dalian) Co., Ltd | Chairman | No | |
Linde Engineering (Dalian) Co., Ltd. | Chairman | No | |
Fan Wen | Wuhan New World Refrigeration Industrial Co., Ltd. | Chairman | No |
MHI Bingshan Refrigeration (Dalian) Co., Ltd. | Chairman | No | |
Dalian Niweisi LengNuan Technology Co., Ltd | Chairman | No | |
Dalian Bingshan Lingshe Quick Freezing Equipment Co., Ltd | Chairman | No | |
Dalian Bingshan Air-Conditioning Equipment Co., Ltd | Chairman | No | |
Sonyo Compressor (Dalian) Co., Ltd. | Chairman | No | |
Yin Xide | Dalian Bingshan Group Construction Co., Ltd | Chairman | No |
Sonyo Refrigeration System (Dalian) Co., Ltd. | Chairman | No | |
Liu Yuanyuan | China Railway Tielong Container Logistics Co., LTD. | Independent director | Yes |
Bank of Dalian Co., LTD. | Independent director | Yes | |
Kincai (Liaoning) Life Science and Technology Co., LTD. | Independent director | Yes | |
Yao Hong | Shanghai Binku Network Technology Co., LTD. | Independent director | Yes |
Hualu Zhida Technology Co., LTD. | Independent director | Yes | |
Harbin Hattou Investment Co., LTD. | Independent director | Yes | |
Fushun Special Steel Co. LTD | Independent director | Yes |
3. Remuneration paid to directors, supervisors, and senior management
Decision-making procedure, decision-making basis and actual payment of remuneration for directors, supervisorsand senior managementDecision-making procedure: the Company's remuneration plan for directors and supervisors was proposed by theCompany's Remuneration and Evaluation Committee of the Board of Directors, and after approval by the Boardof Directors, submitted to the general meeting for adoption and put into effect. The Company’s remuneration planfor senior management was put into effect after approval by the Company’s Board of Directors.Decision-making basis: it was decided on the basis of main responsibilities and importance of the concernedposition and the remuneration level of similar positions in other similar enterprises and evaluated and rewardedthrough the Company’s examination procedure for assets operation performance.The total amount of remunerations actually ( pre-tax ) paid by the Company to directors, supervisors, and seniormanagement was 4,895,800 yuan.
Particulars about the annual remuneration of directors, supervisors and senior staff members
Name | (ten thousand yuan) |
Ji Zhijian | 0 |
Xu Junrao | 0 |
Ding Jie | 0 |
Yin Xide | 106.81 |
Yokoo Sadaaki | 0 |
Nishimoto Shigeyuki | 0 |
Song Wenbao | 64.09 |
Zhai Yunling | 8 |
Liu Yuanyuan | 8 |
Yao Hong | 8 |
Hu Xitang | 79.54 |
Dai Yuling | 0 |
Li Sheng | 33.42 |
Lu Jun | 61.21 |
Yang Fuhua | 60.50 |
Wang Jinxiu | 60.01 |
Total | 489.58 |
VI. Performance of directors' duties during the reporting period
1.The situation of the board of Directors during this reporting period
The meeting time | Date of meeting | Date of disclosure | The meeting resolution |
1st Meeting of 9th Session of the Board | Jan 12, 2022 | Jan 13, 2022 | http://www.cninfo.com.cn |
2ndMeeting of 9th Session of the Board | Jan 21, 2022 | Jan 22, 2022 | http://www.cninfo.com.cn |
3rd Meeting of 9th Session of the Board | April 11,2022 | April 12,2022 | http://www.cninfo.com.cn |
4th Meeting of 9th Session of the Board | April 22,2022 | April 23,2022 | http://www.cninfo.com.cn |
5th Meeting of 9h Session of the Board | May 27,2022 | May 28,2022 | http://www.cninfo.com.cn |
6th Meeting of 9th Session of the Board | August 24,2022 | August 25,2022 | http://www.cninfo.com.cn |
7th Meeting of 9th Session of the Board | September 8,2022 | September 9,2022 | http://www.cninfo.com.cn |
8th Meeting of 9th Session of the Board | September 26,2022 | September 27,2022 | http://www.cninfo.com.cn |
9th Meeting of 9th Session of the Board | October 27,2022 | October 28,2022 | http://www.cninfo.com.cn |
10th Meeting of 9th Session of the Board | November 7,2022 | November 8,2022 | http://www.cninfo.com.cn |
11th Meeting of 9th Session of the Board | November 18,2022 | November 19,2022 | http://www.cninfo.com.cn |
12th Meeting of 9th Session of the Board | November 28,2022 | November 28,2022 | http://www.cninfo.com.cn |
2. Attendance of directors at the board of directors and general meetings of shareholders
During the reporting period, all directors were present in person at all board meetings where they were required tobe present.
3.Objections raised by directors to matters related to the company
□ Applicable √ Not applicable
4. Other instructions for the performance of directors' duties
□ Applicable √ Not applicable
VII. Execution of duties of the special committees under the Board of Directors in thereporting periodThe audit committee under the Board of Directors of the Company performs its duties in accordance with thedetailed rules for the implementation of the audit committee under the Board of Directors and the workingprocedures for the annual report of the audit committee, supervises the Company's internal audit system and itsimplementation, reviews the Company's financial information and its disclosure, and evaluates the work ofexternal audit institutions.In the evaluation of the Company's internal control, the audit committee actively plays its responsibilities oforganization, leadership and supervision. According to the identification standard of internal control defects of theCompany, the annual internal control evaluation report of the Company was reviewed, and ShineWing CertifiedPublic Accountants was entrusted to conduct internal control audit. It is considered that the current situation of theCompany's internal control system meets the relevant requirements and has been well implemented. The annualinternal control evaluation report of the Company truthfully reflects the above facts.During the annual audit of the company, the audit committee actively communicated and effectively coordinatedwith the audit institution ShineWing certified public accountants. Before and after the audit, we have repeatedlyurged the audit institutions to promote the audit work with quality and quantity on the audit work plan and workprogress. After the completion of the audit, the annual financial report and annual report of the company werecarefully reviewed, and it was considered that the financial report of the company was comprehensive and true,and the financial report and other information disclosed by the company were objective and true, which trulyreflected the annual financial situation of the company.The Audit Committee believes that ShineWing Certified Public Accountants can abide by the independent,objective and fair practice standards in providing annual audit services for the Company, audit the Company instrict accordance with the new accounting standards, actively communicate with the audit committee andindependent directors, be diligent and responsible, and better complete the annual audit of the Company. It isproposed that the Company renew the appointment of ShineWing Certified Public Accountants as the auditinstitution of the Company in 2023.The remuneration and assessment committee under the Board of Directors of the Company performed its duties inaccordance with the implementation rules of the remuneration and assessment committee of the Board ofDirectors of the Company, and reviewed the annual remuneration of the directors, supervisors and seniormanagers of the Company.
VIII. Work of the Board of SupervisorsWas there any risk with the Company found by the Board of Supervisors in their supervision activities in thereporting period?
□ Applicable √ Not applicable
The Board of Supervisors had no objections to the matters under supervision in the reporting period.IX Status of the Company's staff
1. As of Dec. 31, 2022 the Company and its subsidiary had 2,158 enrolled employees, including 1,268 personsengaged in production; 241 persons engaged in marketing; 306 persons engaged in engineering and technology;47 persons engaged in financing; and 296 persons engaged in management.
2. As of Dec. 31, 2022, among enrolled employees of the Company and its subsidiary, 72 persons have theeducational background of Master or higher; 673 persons have the educational background of university; 649persons have the educational background of junior college; and 764 persons have the educational background ofsecondary technical school or lower.
3. The Company applied the employee job performance wage system with distribution according to positions andperformance of an employee.
4. The Company formulated the annual training plan and gave purposeful training to an employee in considerationof his/her post requirement.
5. Labor outsourcing
□ Applicable √ Not applicable
X. Profit distribution and dividend payment
By giving consideration to both the return to shareholders and the Company's long-term development, and incombination of the Company's profit made in this year, the Company formulated the 2021 annual dividenddistribution plan of paying the cash of 0.1 yuan for every 10 shares. Reviewed and adopted at the Company'sgeneral meeting, the Company's Board of Directors has implemented the plan in July 2022.Formulation and implementation of the Company's cash dividend distribution policy in the reporting periodcomplied with the Company's Articles of Association and the general meeting's resolution, and the dividenddistribution standard and proportion were defined and clear and the applicable decision-making procedure andsystem were complete. The independent directors agreed on it and the legal rights and interests of minorityshareholders were well protected.
Special notes to cash dividend payout policy | |
If the regulations of the Articles of Association or the requirements of the shareholders of the company meeting are met: | Yes |
If the dividend payout standard and proportion is definite and clear-cut: | Yes |
If relevant decision-making procedure and mechanism is complete: | Yes |
If the independent directors have performed their duties and played their due role: | Yes |
If small and medium shareholders have the opportunity to sufficiently express their opinions and appeals and if their legal rights and interests are sufficiently protected: | Yes |
If the condition and procedure for adjusting or changing the cash dividend payout policy is compliant and transparent: | Yes |
The Company made profit in the reporting period and the undistributed profit of the parent company was positivebut no cash dividend distribution plan was proposed.
□ Applicable √ Not applicable
Profit distribution preplan, and preplan of share-granting with capital accumulation fund of the Company
Bonus shares to be presented for every 10 shares (shares) | 0 |
Dividend to be distributed for every 10 shares (RMB yuan) (including tax) | 0.1 |
Equity base for distribution preplan (shares) | 843,212,507 |
Total amount of cash dividend distribution (RMB yuan) (including tax) | 8,432,125.07 |
Profit distributable to the shareholders in the current year | 141,798,910.55 |
Proportion of cash dividend distribution accounting for total profit distribution | 100% |
Cash dividend distribution policy: |
When the development stage of the company belongs to a growth period with important fund disbursement arrangement(s), the proportion of cash dividend distribution accounting for this profit distribution should reach 20% at minimum when conducting profit distribution. |
Notes to details about preplan for profit distribution or capital stock increase with capital reserve |
According to the audit by ShineWing CPAs (Special General Partnership), the parent company of the Company achieved a net profit of 157.554 million yuan in 2022, with a 10% statutory surplus reserve fund of 15.755 million yuan. The profit available for distribution to shareholders for the year was 141.799 million yuan. Add in the undistributed profit of 803.564 million yuan at the beginning of the year, deduct the paid ordinary stock dividend of 8.432 million yuan for the year 2021, and the cumulative profit available for shareholder distribution is 936.931 million yuan. The Company’s profit distribution preplan for 2022: The Company will allocate 20% of the parent company's net profit of 157.554 million yuan in 2022 to the discretionary surplus reserve fund of 31.511 million yuan; Based on the total capital stock of 843,212,507 shares, the dividend of RMB 0.1 in cash (including tax) will be distributed for every 10 shares, the total cash dividend is RMB 8.432 million, and the cash dividend for B share is converted and paid in Hong Kong dollars. If the share capital changes from the disclosure of this plan to the equity registration date of implementing the profit distribution plan, the distribution proportion will be adjusted accordingly according to the principle that the total distribution amount remains unchanged. The above preplan shall be submitted to the 2022 shareholders’ general meeting for review and approval. |
XI.The implementation and effect of equity incentive
□ Applicable √ Not applicable
XII.Internal control system construction and implementation during the reporting period
1. Internal control construction and implementation
During the reporting period, the Company made positive innovation, took the initiative to change, and vigorouslypromoted organizational strengthening. Implement market-centered integrated operation through organizationalrestructuring, business process reengineering and management system revision. Through the project managementsystem, fully implement the project budget, control the whole process of operation, ensure profits and preventrisks.
2. Details of material weakness in the internal control found in the reporting period described in the reporton self-evaluation of internal control.
□ Applicable √ Not applicable
There was no material weakness in the internal control found in the reporting period.
XIII.Management and control of subsidiaries during the reporting period
During the reporting period, the Company focused on strengthening the management control of subsidiaries fromthe following aspects:
(1) The Company carefully identified, strictly managed and dynamically adjusted the directors, supervisors andsenior managers assigned to subsidiaries;
(2) The Company participated in the whole process of the preparation of the annual business plan of itssubsidiaries, made reasonable suggestions and gave appropriate guidance;
(3) The Company conducted monthly/quarterly tracking and annual assessment on the implementation of businessplans and compliance operations of subsidiaries.During the reporting period, in order to further strengthen the hot and cold main businesses, the Company plannedto implement a major asset restructuring. After the completion of this restructuring in November 2022, theCompany directly or indirectly holds 100% equity in Sonyo Compressor and 100% equity in Sonyo RefrigerationSystem. The integration plan for business, assets, finance, personnel, institutions, and other aspects of this
restructuring is detailed in the "Draft Report on Major Asset Purchase and Related Party Transactions (RevisedDraft)" disclosed by the Company on October 26, 2022 on CNINFO. The relevant integration plan is beingimplemented in an orderly manner.
XIV.Report on self-evaluation of internal control or internal control audit report
1. Report on self-evaluation of internal control
Details of material weakness in the internal control found in the reporting period described in the report on self-evaluation of internal control | |
There was no material weakness in the internal control found in the reporting period. | |
Date of disclosing the full text of the report on self-evaluation of internal control | Apr.26, 2023 |
Disclosure reference to the full text of the report on self-evaluation of internal control | For the 2022 annual report on self-evaluation of internal control of the Company, visit the website www.cninfo.com.cn. |
2. Internal control audit report
Description of the deliberation opinions in the internal control audit report | |
We think that as of Dec. 31, 2022, Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd. had maintained an effective internal control over the financial reports in all material aspects according to Basic Enterprise Internal Control Specification and relevant regulations. | |
Date of disclosing the full text of the internal control audit report | Apr. 26, 2023 |
Disclosure reference to the full text of the internal control audit report | For the 2022 annual internal control audit report of the Company, visit the website www.cninfo.com.cn. |
Did the accounting firm issue the internal control audit report with nonstandard opinions?
□ Applicable √ Not applicable
Was the internal control audit report issued by the accounting firm consistent with the opinion in theself-evaluation report of the Board of Directors?
√Yes □ No
XV. Rectification of problems in self inspection of special actions for governance of listedcompaniesNone
Section 5 Environmental and social responsibilityI.Major environmental issuesThe listed company and its subsidiaries whether belong to heavy pollution industry formulated by the stateenvironmental protection department
√Yes □ No
Bingshan Sonyo Compressor (Dalian) Co., Ltd., a subsidiary of the Company, is a key pollutant discharge unitannounced by the environmental protection department.Administrative penalties imposed for environmental problems during the reporting period
□Yes √ No
II.Social responsibilitiesThe specific content of the Company's performance of social responsibility can be found in the SocialResponsibility Report disclosed on Juchao information website on April 26, 2023.
III. We consolidated and expanded our achievements in poverty alleviation and rural revitalizationIn 2022, the Company continued to consolidate and expand its achievements in poverty alleviation, activelycommunicating with Songlin Village, Guangming Mountain Town, Zhuanghe City, and fulfilling itsresponsibilities. Invested 50,000 yuan to assist in the construction of the rural street lighting project, and carriedout daily maintenance of the air conditioning equipment in the village cultural activity center. Provide educationand assistance to children from impoverished families.
Section 6 Important items
I Implementation of commitments
1. Commitments of the Company or its shareholders holding 5% or higher of the shares in the reportingperiod or carried to the reporting period
√Applicable □Not applicable
According to the relevant provisions of the "Self regulatory Guidelines for Listed Companies on the ShenzhenStock Exchange No. 8- Major Asset Restructuring", the important commitments and performance made byrelevant parties during the 2022 major asset restructuring process of the Company are detailed in the Company'sannouncement on the performance of commitments made by relevant parties during the major asset restructuringdisclosed on CNINFO on April 26, 2023.
2. The company's assets or projects have earnings forecasts, and the reporting period is still in the period ofearnings forecasts. The company explains the reasons why the assets or projects have reached the originalearnings forecasts.
□Applicable √Not applicable
II. Non-operation capital occupation by holding shareholders and their related parties in thelisted company
□Applicable √Not applicable
The Company had no capital occupation by the holding shareholders and their related parties in the listedcompany within this reporting period.III. Foreign guarantee in violation of regulations
□ Applicable √ Not applicable
IV. Explain to the “non standard audit report” last year from the board of directors of theCompany
□Applicable √Not applicable
V. Explain to the “non standard audit report” from the board of directors, board ofsupervisors of the Company
□Applicable √Not applicable
VI. Change in accounting policies, accounting estimates and accounting methods or correctionof major accounting mistakes in the reporting period, which should be retroactively restatedcompared with the financial statements of the previous year
√Applicable □Not applicable
In December 2021, the Ministry of Finance issued Interpretation No. 15 of the Accounting Standards for BusinessEnterprises (Cai Kuai [2021] No. 35) (hereinafter referred to as "Interpretation No. 15"), which states that"accounting treatment for the sale of products or by-products produced by enterprises before their fixed assetsreach their intended usable state or during the research and development process" and "judgment on losscontracts" shall be implemented from January 1, 2022. The Company shall commence implementation from thespecified date.The adoption of Interpretation No. 15 by the Company did not have a significant impact on our financial conditionand operating results.
VII. Change in the range of consolidated statements compared with the financial statementsof the previous year
√Applicable □Not applicable
Compared with the previous year, the entities included in the consolidated financial statements this year increasedby two companies, including Bingshan Sonyo Compressor (Dalian) Co., Ltd. and Bingshan Sonyo RefrigerationSystem (Dalian) Co., Ltd., due to significant asset restructuring. Additionally, three companies, including NingboBingshan Refrigeration Air Conditioning Engineering Co., Ltd., Bingshan Technical Services (Dalian) Co., Ltd.,and Dalian New Meica Electronic Technology Co., Ltd., were reduced due to sales or mergers.
VIII. Engagement and dismissal of the accounting firmCurrently engaged accounting firm
Name of domestic accounting firm | ShineWing CPAs (Special General Partnership) |
Remuneration paid to the domestic accounting firm (in 10 thousand yuan) | 107 |
Continuous audit service years of the domestic accounting firm | 7 |
Name of certified public accountants with the domestic accounting firm | Lin Li, Zhang Shizhuo |
Continuous audit service years of the certified public accountants | Lin Li 2 year, Zhang Shizhuo 4 years |
If the CPA firm retaining was changed in this period
□Applicable √Not applicable
Employment of internal control audit accounting firm, financial advisor or sponsor
√ Applicable □ Not applicable
During the reporting period, the Company hired ShineWing CPAs (Special General Partnership) as the Company's2022 audit institution to conduct an integrated audit of the Company's financial reports and internal control.IX. Facing suspend and terminate listing after the annual report disclosure
□ Applicable √ Not applicable
X. Bankruptcy restructuring related matters
□ Applicable √ Not applicable
XI. Major lawsuit and arbitration issues
□ Applicable √ Not applicable
XII. Punishment and rectification
□ Applicable √ Not applicable
XIII.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 the court’seffective judgments or failed to pay duly a large amount of debt during the reporting period.XIV.Important associated transactions
1. Related party transactions related to daily operations
During the reporting period, the total amount of normal associated transactions between the Company andassociated parties was 608.8 million yuan, accounting for 79.43% of the budgeted amount for the year 2022. Thisincluded 105.2 million yuan, accounting for 60.63% of the budgeted amount for the year 2022, for purchasingsupporting products for package projects from associated parties, and 503.6 million yuan, accounting for 84.92%of the budgeted amount for the year 2022, from selling supporting parts and components to associated parties.Associated transactions related to purchases or sales of assets
□Applicable √ Not applicable
Important associated transactions with joint external investments
□ Applicable √ Not applicable
4. Associated transactions related to rights and debts
□ Applicable √ Not applicable
5. Associated transactions with related financial companies
□ Applicable √ Not applicable
6. The transactions between the financial company controlled by the company and its related parties
□ Applicable √ Not applicable
7. Other associated transactions
√ Applicable □ Not applicable
1. To eliminate management barriers for subsidiaries, strengthen service and market sales support during thewarranty period, and improve customer satisfaction, the Company transferred 100% equity of BingshanTechnology Services (Dalian) Co., Ltd. to Dalian Bingshan Group Co., Ltd., Dalian Zhonghuida RefrigerationTechnology Co., Ltd., and Dalian Zhixintong Enterprise Management Partnership (limited partnership). The abovematters were reviewed and approved by the second meeting of the ninth Board of Directors of the Company onJanuary 21, 2022. The Company's "Announcement on Related Party Transactions Regarding the Transfer ofEquity of Bingshan Technology Services (Dalian) Co., Ltd." (2022-008) was disclosed on January 22, 2022 inChina Securities Journal and CNINFO.
2. After deliberation and approval at the eighth meeting of the ninth Board of Directors and the secondextraordinary shareholders' meeting in 2022, the Company has implemented a major asset restructuring. TheCompany purchased 60% equity of Panasonic Compressor (Dalian) Co., Ltd. held by Sanyo Electric Co., Ltd. and
30% equity of Panasonic Refrigeration System (Dalian) Co., Ltd. held by Panasonic Electric Appliances (China)Co., Ltd. and 25% equity of Panasonic Refrigerator Systems (Dalian) Co., Ltd.held by Panasonic Cold Chain(Dalian) Co., Ltd. through cash payment. The Company's "Major Asset Restructuring and Related PartyTransactions Report" (draft) was disclosed on September 27, 2022 in China Securities Journal and CNINFO. Theabove matters were implemented and completed on November 11, 2022.
3. In order to optimize the asset structure, highlight its main business, and assist in the improvement of its mainbusiness, the Company has signed an equity transfer agreement with Panasonic Electric Appliances (China) Co.,Ltd., transferring all 40% of its equity in Panasonic Cold Chain (Dalian) Co., Ltd. to Panasonic ElectricAppliances (China) Co., Ltd. The above matters were reviewed and approved at the 11th meeting of the 9th Boardof Directors of the Company on November 18, 2022. The Company's announcement on related party transactionsrelated to the transfer of equity of Panasonic Cold Chain (Dalian) Co., Ltd. (2022-055) was disclosed onNovember 19, 2022 in China Securities Journal and CNINFO.
XVII. 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 13th meeting of the 7th board of directors of the Company was held on April 22, 2017, and approved to rentout the old plant and land located in No 888, South West RD, Shahekou Districit, Dalian to Bingshan Wisdom.The lease contract is from April 1, 2017 to December 31, 2036. The Company has signed the “estate leasingcontract” with Dalian Bingshan Wisdom based on the requirement of utilization of old land and plant and newbusiness foster plan. Current year’s lease premium is RMB 8.51 million.On July 31, 2014, the Company and Lingzhong Bingshan Refrigeration (Dalian) Co., Ltd. signed a supplementaryagreement to modify the house lease contract, and rent out the Building No. 6 of Workshop No. 106, Liaohe EastRoad, Dalian Development Zone, to Lingzhong Bingshan Refrigeration (Dalian) Co., Ltd.. The rental area is15,259.04 square meters, and lease period will end on July 16, 2029, the annual rent is RMB 3.81 million.
2. Guaranteeing status
√Applicable □ Not applicable
China Development Fund provides support for the Company's cold chain green intelligent equipment and serviceindustrialization base project, and provides special funds to the controlling shareholder of the Company, BingshanGroup. The above-mentioned special fund amount is 160 million yuan, with a term of 10 years and a rate of 1.2%.After the above special funds are in place, Bingshan Group has fully allocated them to the Company in a one-timemanner without increasing the rate. The implementation of the above-mentioned special funds requires theCompany to provide guarantees and continue until the reporting period. This guarantee is in the form of aguarantee for the controlling shareholder, but in fact, it is a guarantee for the Company to obtain financial supportfor itself.The Company provided guarantees for its client Guizhou Waterfall Cold Chain Food Investment Co., Ltd. basedon financing leasing business, which lasted until the reporting period, with a guarantee amount of 25.705 millionyuan. The project is currently being fulfilled normally, and the guaranteed shareholders and relevant naturalpersons have provided the Company with a full amount of joint and several liability guarantee and counterguarantee. The overall risk of the Company's guarantee is controllable.The Company provides guarantees for clients Liuyang Zhongjie Technology Investment Co., Ltd., Shandong
Jiechuang Energy Technology Co., Ltd., and Shaanxi Yiming Food Co., Ltd. based on financing leasing business.The guaranteed party has good qualifications, and the guaranteed party's shareholders and relevant natural or legalpersons have provided full joint and several liability guarantee and counter guarantee to the Company. TheCompany's guarantee risk is generally controllable and does not harm the legitimate rights and interests of theCompany and small and medium-sized shareholders.The above guarantee matters have been reviewed by the board of directors and are being fulfilled normally.
3. Entrust others to cash assets management
(1)Trust management
□Applicable √Not applicable
(2)Entrusted loans
□Applicable √Not applicable
(3)Other important contracts
□ Applicable √ Not applicable
XIX. Other important matters
□ Applicable √ Not applicable
XX. Other important matters of subsidiary company
□ Applicable √ Not applicable
Section 7 Change in Share Capital and Shareholders' Information
I. Change in share capital
1. Change in share capital
items | (before change) | (after change) | ||
number | proportion | number | proportion | |
I. Non-circulating share capital with restricted trade conditions | 3,130,039 | 0.37% | 1,670,894 | 0.20% |
II. Circulating share capital | 840,082,468 | 99.63% | 841,541,613 | 99.80% |
1. Domestically listed ordinary shares | 598,582,468 | 70.99% | 600,041,613 | 71.16% |
2. Domestically listed foreign shares | 241,500,000 | 28.64% | 241,500,000 | 29.64% |
III. Total shares | 843,212,507 | 100.00% | 843,212,507 | 100.00% |
The reason for the Change in share capitalDuring the reporting period, newly appointed directors Fan Wen and Deputy General Manager Lu Jun of theCompany, as well as directors Ding Jie and Xu Junrao, resigned upon the expiration of their terms of office. Theabove-mentioned personnel changes have led to changes in the lock-in of shares by executives, resulting inchanges in the composition of shares.Approval of changes in shares
□ Applicable √Not applicable
The restricted shares changes
□ Applicable √Not applicable
II. Securities issuance and listing
1. Securities issuance in the report period
□ Applicable √ Not applicable
2. Change in total shares of the Company and structure of shareholders
□ Applicable √ Not applicable
3. Internal staff shares
□ Applicable √ Not applicable
III. Shareholders and actual controller
1. Number of shareholders and their shareholding
Total number of shareholders in the reporting period | 67,475 | Total number of shareholders as of the last month before disclosure of the annual report | 61,099 | |||||||
Shareholding of top ten shareholders | ||||||||||
Name | Nature | Proportion | Total number | Number of shares with sale restriction | Number of pledged shares or shares frozen | |||||
Dalian Bingshan Group Co., Ltd. | Domestic non-state-owned legal person | 20.27% | 170,916,934 | 0 | 0 | |||||
Sanyo Electric Co., Ltd. | Overseas legal person | 8.72% | 73,503,150 | 0 | 0 | |||||
Lin Zhenming | Foreign natural person | 0.80% | 6,730,000 | |||||||
Chen Xianlai | Domestic natural person | 0.59% | 4,934,500 | |||||||
Chen Yong | Domestic natural person | 0.52% | 4,387,500 | |||||||
Xue Hong | Domestic natural person | 0.42% | 3,580,000 | |||||||
Dalian industrial development investment Co., Ltd. | Domestic non-state-owned legal person | 0.40% | 3,406,725 | |||||||
Chen Cirou | Domestic natural person | 0.40% | 3,374,280 | |||||||
Li Xiaohua | Domestic natural person | 0.37% | 3,149,608 | |||||||
Wu An | Domestic natural person | 0.36% | 3,055,200 | |||||||
Shareholding of top ten shareholders without sale restriction | ||||||||||
Name | Number of shares without sale restriction | Type of shares | ||||||||
Dalian Bingshan Group Co., Ltd. | 170,916,934 | RMB denominated ordinary shares | ||||||||
Sanyo Electric Co., Ltd. | 73,503,150 | Domestically listed foreign shares | ||||||||
Lin Zhenming | 6,730,000 | Domestically listed foreign shares | ||||||||
Chen Xianlai | 4,934,500 | RMB denominated ordinary shares | ||||||||
Chen Yong | 4,387,500 | RMB denominated ordinary shares | ||||||||
Xue Hong | 3,580,000 | Domestically listed foreign shares | ||||||||
Dalian industrial development investment Co., Ltd. | 3,406,725 | RMB denominated ordinary shares | ||||||||
Chen Cirou | 3,374,280 | Domestically listed foreign shares | ||||||||
Li Xiaohua | 3,149,608 | RMB denominated ordinary shares | ||||||||
Wu An | 3,055,200 | Domestically listed foreign shares | ||||||||
Notes 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. Sanyo Electric Co., Ltd. holds 26.6% of Dalian Bingshan Group Co., Ltd.'s equity. | |||||||||
Explanation on the participation of the top 10 ordinary shareholders in margin trading and securities lending business | Li Xiaohua holds 1,093,700 shares of the Company through an ordinary securities account and 2,055,908 shares of the Company through an investor credit securities account. |
2. Controlling shareholder of the Company
Name of holding shareholder | Legal representative | Founding date | Unified social credit code | Main business |
Dalian Bingshan Group Co., Ltd. | Ji Zhijian | Jul. 3, 1985 | 912102002412917931 | Research, development, manufacture, sales, service and installation of industrial refrigeration products, freezing and cold storage products, large-, medium- and small-size air-conditioning products, petrochemical equipment products, electronic and electric control products, home appliance products and environment protection products. |
Shares held by the holding shareholder in other overseas and domestic listed companies as the holding shareholder or ordinary shareholder in the reporting period | None |
Change in the holding shareholder in the reporting period
□ Applicable √ Not applicable
3. Actual controller of the Company
The company has no actual controller.According to the actual situation of the Company and its controlling shareholder, and compared with the relatedlaws and regulations including Company Law of People’s Republic of China, Management Regulation on ListingCompany Acquisition and Stock Listing Rules of Shenzhen Stock Exchange, with the confirmation of LiaoningHuaxia law firm, the Company released the Public Notice on Not Having Actual Controller.(No: 2015-025),)which was published on B04 of China Securities, A19 of HK Commercial Daily and Cninfo website on April 242015.
100% 100%
24.97% 8.28% 13.3% 20.2% 26.6% 6.65%
20.27%
The actual controller controlled the Company through a trust or other asset management
□ Applicable √ Not applicable
4. Other legal-person shareholders holding of 10% or more shares
□ Applicable √ Not applicable
5.、controlling shareholders, actual controllers, restructuring the constraint to the stake and othercommitments underweight
□ Applicable √ Not applicable
State-owned Assets Supervision and Administration Commission ofDalian Municipality Government | Dalian Equipment Manufacture Investment Co., Ltd. | Dalian State-owned Assets Management Co., Ltd. | Dayang Co., Ltd. | Dalan Zhonghuida Refrigeration Technology Co., Ltd. | Sanyo Electric Co., Ltd. | Panasonic Corporation of China |
Dalian Bingshan Group Co., Ltd.
Dalian Bingshan Group Co., Ltd.Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
Section 8 Information on Preferred Stock
□ Applicable √ Not applicable
In the reporting period, the Company didn’t own preferred stock.
Section 9 Information on Corporate bonds
□ Applicable √ Not applicable
In the reporting period, the Company didn’t own corporate bonds.
Section 10 Financial Report
OpinionWe have audited the accompanying financial statements of Bingshan Refrigeration & Heat TransferTechnologies Co., Ltd (“Bingshan Refrigeration & Heat Company”), which comprise the consolidatedand company balance sheets as at 31 December 2022, and the consolidated and company incomestatements, the consolidated and company cash flow statements, the consolidated and companystatements of changes in equity for the year then ended, and notes to these financial statements.In our opinion, the accompanying financial statements have been prepared in accordance with therequirements of Accounting Standards for Business Enterprises, in all material respects and present fairlythe consolidated and the financial position of Bingshan Refrigeration & Heat Company as at 31December 2022, and of their consolidated and the company’s financial performance and cash flows forthe year then ended.Basis for OpinionWe conducted our audit in accordance with China Standards on Auditing for Chinese Certified PublicAccountants. Our responsibilities under those standards are further described in the “Auditor’sResponsibilities for the Audit of the Financial Statements” section of our report. We are independent ofBingshan Refrigeration & Heat Company in accordance with the Code of Ethics for Chinese CertifiedPublic Accountants, and we have fulfilled our other ethical responsibilities of the code. We believe thatthe audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit.Key Audit MattersKey audit matters are those matters that we consider, in our professional judgment, were of mostsignificance in our audit of the financial statements of the current period. These matters were addressedin the context of our audit of the financial statements as a whole and, in forming our audit opinionthereon, and we do not express a separate opinion on these matters.
Revenue Recognition | |
Key Audit Matter | How the matter was addressed in the audit |
Revenue of Bingshan Refrigeration & Heat Company and its subsidiaries mainly come from sales of products and installation. The key concern about the sales revenue is | Understand and evaluate effectiveness of design and operation of the management ‘s internal control over revenue |
due to the large sales quantities and any potential misstatements existing in the revenue recognition within the appropriate accounting period. Key concern about installation income is because the accounting involved by significant accounting estimate and judgment. Having considered these matters, we recognized revenue recognition as key audit matters. | Sampling test the sales contracts, identify the clause and condition in respect to the contract performance obligation, consideration and risk and reward transfer of the ownership. Evaluate the revenue recognition of Bingshan Refrigeration & Heat Company whether it is in line with the accounting standards. Sampling select product sales revenue record, reconcile to sales invoice, contracts, dispatch note, acceptance note; Sampling select installation sales revenue record, reconcile to invoice, installation contracts and completion report and Evaluate the recognition of revenue whether is in line with the accounting standards Checking actual installation cost by reviewing the contract, invoice and supportive document with signature for the equipment received to evaluate the cost whether it really incurred. Sampling select the transactions before and after the balance sheet date, carry out confirmation procedure, test the dispatch note and other supporting documents so to ensure whether the transaction is recorded into the appropriate accounting period. |
Other InformationThe management of Bingshan Refrigeration & Heat Company (hereinafter referred to as the“Management”) is responsible for the other information. The other information comprises theinformation included in the Bingshan Refrigeration & Heat Company 2022 annual report, but does notinclude the financial statements and our auditor’s report thereon.Our opinion on the financial statements does not cover the other information and we do not express anyform of assurance conclusion thereon.In connection with our audit of the financial statements, our responsibility is to read the other informationand, in doing so, consider whether the other information is materially inconsistent with the financialstatements or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of the otherinformation, we are required to report that fact. We have nothing to report in this regard.Responsibilities of the Management and Those Charged with Governance for the FinancialStatementsThe Management is responsible for the preparation of the financial statements in accordance withAccounting Standards for Business Enterprises to achieve fair presentation; and designing, implementingand maintaining internal control which is necessary to enable that the financial statements are free frommaterial misstatement, whether due to fraud or error.In preparing the financial statements, the Management is responsible for assessing BingshanRefrigeration & Heat Company’s ability to continue as a going concern, disclosing, as applicable, mattersrelated to going concern and using the going concern basis of accounting unless the Management eitherintends to liquidate Bingshan Refrigeration & Heat Company or to cease operations, or have no realisticalternative but to do so.Those charged with governance are responsible to overseeing Bingshan Refrigeration & Heat Company’sfinancial reporting process.Auditor’s Responsibilities for the Audit of the Financial StatementsOur objectives are to obtain reasonable assurance about whether the financial statements as a whole arefree from material misstatement, whether due to fraud or error, and to issue an auditor’s report thatincludes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that anaudit conducted in accordance with auditing standards will always detect a material misstatement when itexists. Misstatements can arise from fraud or error and are generally considered material if, individuallyor in the aggregate, they could reasonably be expected to influence the economic decisions of users takenon the basis of these financial statements.During the course of audit in accordance with auditing standards, we exercise professional judgment andmaintain professional skepticism. We also carry out the following works:
Identify and assess the risks of material misstatement of the financial statements, whether due to fraud orerror, design and perform audit procedures responsive to those risks, and obtain audit evidence that issufficient and appropriate to provide a basis for our audit. The risk of not detecting a materialmisstatement resulting from fraud is higher than for one resulting from error, as fraud may involvecollusion, forgery, intentional omissions, misrepresentations, or the override of internal control.Obtain an understanding of internal control relevant to the audit in order to design audit procedures thatare appropriate in the circumstances, but not for the purpose of expressing an opinion on theeffectiveness of its internal control (this sentence would be deleted in circumstance when we are alsoresponsible to issue an opinion on the effectiveness of internal control in conjunction with the audit of thefinancial statements).
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimatesand related disclosures made by the Management.Conclude on the appropriateness of the Management’s use of the going concern basis of accounting and,based on the audit evidence obtained, whether a material uncertainty exists related to events or conditionsthat may cast significant doubt on Bingshan Refrigeration & Heat Company’s ability to continue as agoing concern. If we conclude that a material uncertainty exists, we are required to draw attention in ourauditor’s report to the related disclosures in the financial statements in accordance with the auditingstandards or, if such disclosures are inadequate, we shall modify our opinion. Our conclusions are basedon the audit evidence obtained up to the date of our auditor’s report. However, future events or conditionsmay cause Bingshan Refrigeration & Heat Company to cease to continue as a going concern.Evaluate the overall presentation, structure and content of the financial statements, and also whether thefinancial statements represent the underlying transactions and events in a manner that achieves fairpresentation.Obtain sufficient and appropriate audit evidence with respect to the financial information of BingshanRefrigeration & Heat entities or business activities, and issue an audit opinion. We are responsible forguiding, supervising and performing group audits and take full responsibility for audit opinions.We communicate with those charged with governance regarding, among other matters, the planned scopeand timing of the audit and significant audit findings etc., including any significant deficiencies ininternal control that we identify during our audit.We also provide those charged with governance with a statement that we have complied with thoserelevant ethical requirements regarding independence, and to communicate with them all relationshipsand other matters that may reasonably be thought to bear on our independence and related safeguards,where applicable.From the matters communicated with those charged with governance, we determine those matters thatwere of most significance in the audit of the financial statements of the current period and are thereforethe key audit matters. We describe these matters in our auditor’s report unless law or regulationprohibited public disclosure about the matter or when, in rare circumstances, we determine that a mattershould not be communicated in our report because the adverse consequences of doing so wouldreasonably be expected to outweigh the public interest benefits of such communication.
ShineWing Certified Public Accountants LLP | CPA: Lin Li (Engagement Partner) | |
CPA:Zhang Shizhuo | ||
China, Beijing | April 25, 2023 |
Consolidated Balance SheetName of Enterprise:Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd Amount Unit:RMB
ITEMS | 31 December 2022 | 01 January 2022 |
Current Assets: | ||
Monetary funds | 1,006,165,899.18 | 522,658,505.79 |
Settlement provision | ||
Loans to banks and other financial institutions | ||
Financial asset held for trading | ||
Derivative financial assets | ||
Notes receivable | 505,945,261.18 | 166,430,365.74 |
Accounts receivable | 1,409,978,442.95 | 821,548,678.85 |
Receivable financing | 58,792,792.70 | 43,704,310.38 |
Prepayments | 171,991,468.12 | 182,701,403.55 |
Insurance receivables | ||
Reinsurance Receivable | ||
Provision of reinsurance contract reserve receivable | ||
Other receivables | 51,394,474.24 | 60,340,096.45 |
including: interest receivable | 0.00 | 0.00 |
dividend receivable | 14,495.00 | 1,003,568.75 |
Financial assets purchased under agreement to resell | ||
Inventories | 1,395,344,780.24 | 1,014,527,127.82 |
Contractual asset | 225,790,875.78 | 109,859,658.79 |
Held for sale assets | ||
Non-current assets due within 1-year | 15,715,631.52 | 14,990,989.30 |
Other current assets | 33,499,577.60 | 24,525,076.71 |
Total Current Assets | 4,874,619,203.51 | 2,961,286,213.38 |
Non-Current Assets: | ||
Loan and payment on other's behalf disbursed | ||
Debt investment | ||
Other debt investment | ||
Long-term receivables | 5,162,458.90 | |
Long-term equity investment | 562,987,771.94 | 1,231,504,533.45 |
Other equity instrument investment | ||
Other non-current financial assets | 149,950,861.31 | 261,410,664.61 |
Investments properties | 115,332,918.20 | 120,752,809.61 |
Fixed assets | 1,229,029,368.93 | 855,395,405.85 |
Construction in process | 115,577,902.54 | 38,974,478.45 |
Production biological assets | ||
Oil-gas assets | ||
Right-of-use assets | 30,941,662.26 | 23,934,703.37 |
Intangible assets | 168,076,720.07 | 142,592,738.10 |
Development cost | ||
Goodwill | 248,345,508.41 | 1,750,799.49 |
Long-term prepaid expense | 6,486,566.92 | 8,088,684.23 |
Deferred tax asset | 95,424,386.61 | 89,879,574.13 |
Other non-current assets | ||
Total Non-current Assets | 2,727,316,126.09 | 2,774,284,391.29 |
Total Assets | 7,601,935,329.60 | 5,735,570,604.67 |
legal representative:Ji Zhijian head of the accounting work:Wang Jinxiuthe person in charge of the accounting office:Li Sheng
Consolidated Balance Sheet (continued)Name of Enterprise:
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd Amount Unit:RMB
ITEMS
ITEMS | 31 December 2022 | 01 January 2022 |
Current Liabilities: | ||
Short-term borrowings | 274,052,990.15 | 245,937,091.72 |
Loans from central bank | ||
Loans from other banks | ||
Financial liability held for trading | ||
Derivative financial liabilities | ||
Notes payable | 618,944,384.85 | 380,033,039.56 |
Accounts payable | 1,586,098,060.59 | 919,871,927.53 |
Advance received | - | |
Contractual liability | 647,645,820.57 | 499,719,963.40 |
Financial assets sold under agreements to repurchase | ||
Deposits received and hold for others | ||
Entrusted trading of securities | ||
Entrusted underwriting of securities | ||
Employee pay payables | 118,216,683.23 | 35,148,782.48 |
Taxes and duties payable | 33,691,523.62 | 13,514,847.82 |
Other payables | 67,054,250.25 | 55,284,140.21 |
including: interest payable | 0.00 | 0.00 |
dividend payable | 533,156.00 | 3,008,156.00 |
Fees and commissions payable | ||
Amount due to reinsurance | ||
Held for sale liabilities | ||
Non-current liabilities due within 1-year | 63,105,954.56 | 24,175,388.12 |
Other current liabilities | 204,650,003.24 | 195,213,206.91 |
Total Current Liabilities | 3,613,459,671.06 | 2,368,898,387.75 |
Non-current Liabilities: | ||
Insurance contract provision | ||
Long-term borrowings | 715,100,000.00 | 150,000,000.00 |
Bonds Payable | - | |
including: preference share | ||
perpetual debt | ||
Lease liability | 11,230,532.05 | 5,394,021.14 |
Long-term payables | 31,009,644.16 | 19,998,913.29 |
Long-term employee payables | ||
Provision | 18,805,967.43 | |
Deferred income | 99,754,346.39 | 106,185,323.82 |
Deferred Tax liabilities | 52,306,365.68 | 35,596,349.70 |
Other non-current liabilities | - | |
Total Non-current Liabilities | 928,206,855.71 | 317,174,607.95 |
Total Liabilities | 4,541,666,526.77 | 2,686,072,995.70 |
Owners Equity(or Shareholders Equity): | ||
Paid-in capital(Share capital) | 843,212,507.00 | 843,212,507.00 |
Other equity instrument | ||
Capital reserve | 717,097,098.38 | 720,215,866.78 |
Other comprehensive income | 2,208,669.73 | 2,178,681.73 |
Chartered reserve | ||
Surplus reserves | 825,226,634.15 | 809,471,199.64 |
△Provision for general risk | ||
Undistributed profit | 618,445,922.58 | 627,764,582.32 |
Equity attributable to equity holders of the Company | 3,006,190,831.84 | 3,002,842,837.47 |
*Minority interest | 54,077,970.99 | 46,654,771.50 |
Total Equity | 3,060,268,802.83 | 3,049,497,608.97 |
Total Liabilities and Equity | 7,601,935,329.60 | 5,735,570,604.67 |
legal representative:Ji Zhijian head of the accounting work:Wang Jinxiuthe person in charge of the accounting office:Li Sheng
Balance Sheet of Parent Company
Name of Enterprise:
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd Amount Unit:RMB
ITEMS
ITEMS | 31 December 2022 | 01 January 2022 |
Current Assets: | ||
Monetary funds | 361,446,559.26 | 391,077,589.19 |
Tradable financial asset | ||
Derivative financial assets | ||
Notes receivable | 100,218,283.64 | 61,036,803.62 |
Accounts receivable | 629,954,649.50 | 408,719,275.78 |
Receivable financing | 12,451,483.74 | 5,427,828.26 |
Prepayments | 61,446,678.23 | 57,409,521.75 |
Other receivables | 36,021,805.53 | 54,222,825.18 |
including: interest receivable | ||
dividend receivable | 25,100,920.84 | |
Inventories | 342,276,945.65 | 339,977,048.51 |
Contractual assets | 83,739,043.68 | 50,916,025.04 |
Held for sale assets | ||
Non-current assets due within 1-year | 15,715,631.52 | 13,281,553.63 |
Other current assets | 565,836.48 | 8,871,387.69 |
Total Current Assets | 1,643,836,917.23 | 1,390,939,858.65 |
Non-Current Assets: | ||
Debt investment | ||
Other debt investment | ||
Long-term receivables | 5,162,458.90 | |
Long-term equity investment | 2,720,998,153.80 | 1,923,394,225.05 |
Other equity instrument investment | ||
Other non-current financial assets | 148,635,718.81 | 260,095,522.11 |
Investments properties | 90,986,890.03 | 95,850,052.41 |
Fixed assets | 646,432,825.98 | 680,392,162.13 |
Construction in process | 48,905,875.93 | 28,279,901.38 |
Production biological assets | ||
Oil-gas assets | ||
Right-of-use assets | 14,975,625.90 | 15,636,361.47 |
Intangible assets | 72,158,994.17 | 73,679,019.01 |
Development cost | ||
Goodwill | ||
Long-term unamortized expense | 5,553,733.11 | 6,766,442.52 |
Deferred tax asset | 21,597,992.46 | 16,806,287.61 |
Other non-current assets | ||
Total Non-current Assets | 3,775,408,269.09 | 3,100,899,973.69 |
Total Assets | 5,419,245,186.32 | 4,491,839,832.34 |
legal representative:Ji Zhijian head of the accounting work:Wang Jinxiu the person in charge of the accounting office:Li Sheng
Balance Sheet of Parent Company (continued)
Name of Enterprise:Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd Amount Unit:RMB
ITEMS
ITEMS | 31 December 2022 | 01 January 2022 |
Current Liabilities: | ||
Short-term borrowings | 234,980,000.00 | 230,373,666.72 |
Financial liability held for trading | ||
Derivative financial liabilities | ||
Notes payable | 259,002,815.07 | 238,051,362.81 |
Accounts payable | 406,794,291.57 | 318,798,749.33 |
Advance received | - | |
Contractual liability | 139,622,706.08 | 115,654,933.60 |
Employee pay payables | 14,557,783.63 | 13,551,313.90 |
Taxes and duties payable | 9,430,543.11 | 2,667,309.95 |
Other payables | 21,061,597.80 | 23,508,139.39 |
including: interest payable | ||
dividend payable | 533,156.00 | 533,156.00 |
Held for sale liabilities | ||
Non-current liabilities due within 1-year | 42,972,752.44 | 1,918,874.53 |
Other current liabilities | 106,146,986.20 | 68,871,944.99 |
Total Current Liabilities | 1,234,569,475.90 | 1,013,396,295.22 |
Non-current Liabilities: | ||
Long-term borrowings | 715,100,000.00 | 150,000,000.00 |
Bonds Payable | - | |
including: preference share | ||
perpetual debt | ||
Lease liability | 12,613,986.87 | 13,243,055.41 |
Long-term payables | 12,908,810.87 | |
Long-term employee payables | ||
Provision for liabilities | ||
Deferred income | 61,685,846.39 | 66,992,823.82 |
Deferred Tax liabilities | 20,603,550.11 | 35,596,349.70 |
Other non-current liabilities | ||
Total Non-current Liabilities | 822,912,194.24 | 265,832,228.93 |
Total Liabilities | 2,057,481,670.14 | 1,279,228,524.15 |
Owners Equity(or Shareholders Equity): | ||
Paid-in capital(Share capital) | 843,212,507.00 | 843,212,507.00 |
Other equity instrument | ||
Including:preference share | ||
perpetual capital securities | ||
Capital reserve | 755,146,592.54 | 755,146,592.54 |
Less: Treasury stock | ||
Other comprehensive income | 1,246,569.06 | 1,216,581.06 |
Chartered reserve | ||
Surplus reserves | 825,226,634.15 | 809,471,199.64 |
Undistributed profit | 936,931,213.43 | 803,564,427.95 |
Total Equity | 3,361,763,516.18 | 3,212,611,308.19 |
Total Liabilities and Equity | 5,419,245,186.32 | 4,491,839,832.34 |
legal representative:Ji Zhijian head of the accounting work:Wang Jinxiuthe person in charge of the accounting office:Li Sheng
Consolidated Income StatementName of Enterprise:Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd Amount Unit:RMB
Item | This year | Last year |
Ⅰ、Total operating revenue | 2,893,085,310.29 | 2,089,208,256.22 |
Including: Operating revenue | 2,893,085,310.29 | 2,089,208,256.22 |
Interest income | ||
Earned premiums | ||
Fees and commission income | ||
Ⅱ、Total cost of operation | 2,988,322,715.94 | 2,248,942,160.16 |
Including: Cost of operation | 2,537,528,841.40 | 1,849,531,272.29 |
Interest expenses | ||
Fees and commission expenses | ||
Payments to surrenders of insurance contracts | ||
Net amount of insurance claims expenses | ||
Net charges of provision for insurance contracts | ||
Dividends policy expenses | ||
Reinsurance expenses | ||
Taxes and surcharges | 22,061,626.36 | 18,951,850.96 |
Selling and distribution expenses | 153,735,714.96 | 130,633,909.30 |
Administrative expenses | 186,378,204.50 | 170,613,436.15 |
R&D | 76,792,805.69 | 65,269,765.23 |
Financial expenses | 11,825,523.03 | 13,941,926.23 |
Including: Interest expenses | 18,581,726.78 | 16,718,288.26 |
Interest income | 5,850,062.80 | 5,193,155.75 |
add: other income | 7,173,155.47 | 10,799,794.83 |
investment income (Loss listed with "-") | 306,688,497.94 | -47,447,292.15 |
Including: income from investments in associates and joint ventures | -37,218,861.27 | -58,045,519.63 |
amortized cost | ||
Exchange gain (Loss listed with "-") | ||
Gain on hedging of net exposure (Loss listed with "-") | ||
Gain on FV change (Loss listed with "-") | -46,991,034.40 | 52,398,565.78 |
Loss on impairment of credit(Loss listed with "-") | -82,695,388.75 | -90,798,013.99 |
Loss on impairment of assets(Loss listed with "-") | -74,825,795.00 | -49,626,686.83 |
Gain on asset disposal(Loss listed with "-") | 194,556.13 | 59,272.29 |
Ⅲ、Operating profit (Loss listed with "-") | 14,306,585.74 | -284,348,264.01 |
Add: Non-operating income | 11,841,528.55 | 4,474,706.92 |
Less: Non-operating expenses | 5,204,540.35 | 9,619,390.42 |
Ⅳ、 Total profit (Loss listed with "-") | 20,943,573.94 | -289,492,947.51 |
Less: Income tax expenses | 1,054,609.62 | -14,303,353.47 |
Ⅴ、Net profit (Net loss listed with "-") | 19,888,964.32 | -275,189,594.04 |
(I) Classification by continuity | ||
1、Net profit from continuing operation | 19,888,964.32 | -275,189,594.04 |
2、Net profit from discontinuing operation | ||
(II) Classification by ownership | ||
1、Net profit attributable to equity holders(shareholders) of the Company | 18,255,330.45 | -269,059,849.96 |
2、Minority interest | 1,633,633.87 | -6,129,744.08 |
Ⅵ、 Other comprehensive income net off tax | 29,988.00 | |
Net other comprehensive income net off tax attributable to equity holders(shareholders) of the parent company | 29,988.00 | |
(Ⅰ)Items that may not be reclassified subsequently to the income statement | - | - |
1.Change in net asset/liability from remeasurment on defined benefit plan |
statement | ||
3.FV change of other equity instrument investment | ||
4.FV change of own credit risk | ||
5.Others | ||
(Ⅱ)Items that may be reclassified subsequently to the income statement | 29,988.00 | |
1.Under equity method, proportionate share of other comprehensive income invested company that may be reclassified subsequently to the income statement | 29,988.00 | |
2.FV change of other debt instrument investment | ||
3.Financial assets reclassfied into other comprehensive income | ||
4.Credit impairment provision of other debt investment | ||
5.Cash flow hedges effective portion | ||
6.Foreign currency translation difference | ||
7.Others | ||
Net other comprehensive income net off tax attributable to Minority interest | ||
Ⅶ、Total comprehensive income | 19,918,952.32 | -275,189,594.04 |
Total comprehensive income attributable to parent Company | 18,285,318.45 | -269,059,849.96 |
Total comprehensive income attributable to minority interest | 1,633,633.87 | -6,129,744.08 |
Ⅷ、 Earnings per share | ||
(Ⅰ)Basic earnings per share | 0.02 | -0.32 |
(Ⅱ)Diluted earnings per share | 0.02 | -0.32 |
legal representative:Ji Zhijian head of the accounting work:Wang Jinxiuthe person in charge of the accounting office:Li Sheng
Income Statement of Parent Company
Name of Enterprise:Bingshan Refrigeration & Heat Transfer Technologies Co., LtAmount Unit:RMB
Item | This year | Last year |
Ⅰ、Operating revenue | 1,048,142,993.33 | 833,501,935.55 |
Less: Cost of operation | 909,850,529.59 | 737,122,594.46 |
Taxes and surcharges | 12,305,882.57 | 11,713,347.51 |
Selling and distribution expenses | 54,927,585.49 | 62,191,872.24 |
Administrative expenses | 92,850,447.59 | 84,579,442.49 |
R&D | 28,982,093.78 | 23,153,016.46 |
Financial expenses | 12,093,600.10 | 11,949,817.04 |
Including: Interest expenses | 12,261,980.25 | 14,788,914.23 |
Interest income | 2,557,312.33 | 4,726,261.06 |
Add: Other income | 1,983,356.24 | 1,854,962.57 |
Investment income (Loss listed with "-") | 289,868,640.72 | -16,105,494.35 |
Including: income from investments in associates and joint ventures | -37,651,689.22 | -58,058,060.45 |
cost | ||
Gain on hedging of net exposure (Loss listed with "-") | ||
Gain on FV change (Loss listed with "-") | -46,991,034.40 | 52,398,565.78 |
Loss on impairment of credit(Loss listed with "-") | -27,779,271.62 | -13,408,727.47 |
Loss on impairment of assets(Loss listed with "-") | -13,966,272.08 | -12,126,565.07 |
Gain on asset disposal(Loss listed with "-") | 84,294.67 | -399.28 |
Ⅱ、Operating profit (Loss listed with "-") | 140,332,567.74 | -84,595,812.47 |
Add: Non-operating income | 49,394.31 | 1,548.54 |
Less: Non-operating expenses | 61,252.08 | 885,498.38 |
Ⅲ、 Total profit (Loss listed with "-") | 140,320,709.97 | -85,479,762.31 |
Less: Income tax expenses | -17,233,635.09 | 772,605.54 |
Ⅳ、Net profit (Net loss listed with "-") | 157,554,345.06 | -86,252,367.85 |
1、Net profit from continuing operation | 157,554,345.06 | -86,252,367.85 |
2、Net profit from discontinuing operation | ||
Ⅴ、 Other comprehensive income net off tax | 29,988.00 | |
(Ⅰ)Items that may not be reclassified subsequently to the income statement | - | - |
1.Change in net asset/liability from remeasurment on defined benefit plan | ||
2.Under equity method, proportionate share of other comprehensive income in invested company that may not be reclassified subsequently to the income | ||
3.FV change of other equity instrument investment | ||
4.FV change of own credit risk | ||
5.Others | ||
(Ⅱ)Items that may be reclassified subsequently to the income statement | 29,988.00 | |
1.Under equity method, proportionate share of other comprehensive income invested company that may be reclassified subsequently to the income statement | 29,988.00 | |
2.FV change of other debt instrument investment | ||
3.Financial assets reclassfied into other comprehensive income | ||
4.Credit impairment provision of other debt investment | ||
5.Cash flow hedges effective portion | ||
6.Foreign currency translation difference | ||
7.Others | ||
Ⅵ、Total comprehensive income | 157,584,333.06 | -86,252,367.85 |
Ⅷ、 Earnings per share | ||
(Ⅰ)Basic earnings per share | ||
(Ⅱ)Diluted earnings per share |
legal representative:Ji Zhijian head of the accounting work:Wang Jinxiuthe person in charge of the accounting office:Li Sheng
Consolidated Cash Flow Statement
Name of Enterprise:Bingshan Refrigeration & Heat Transfer Technologies Co., LtAmount Unit:RMB
Item | This year | Last year |
1. Cash flows from operating activities: | ||
Cash received from sales of goods and rendering of services | 2,299,565,737.92 | 1,998,747,405.23 |
Net increase in deposits from customers and inter-banks deposits | ||
Net increase in loans from central bank | ||
Net increase in loans from other financial institutions | ||
Cash receipts of premium of direct insurance contracts | ||
Net cash received from reinsurance contracts | ||
Net increase in deposits from insurance policy holders and investment | ||
Cash receipts of interest, fees and commission | ||
Net increase in placement from banks and other financial institution | ||
Net increase in sales and repurchase operations | ||
Entrusted trading of securities | ||
Cash received from taxes refund | 27,845,766.93 | 21,514,050.68 |
Cash received relating to other operating activities | 92,440,515.31 | 64,293,089.54 |
Sub-total of cash inflows from operating activities | 2,419,852,020.16 | 2,084,554,545.45 |
Cash paid for goods and services | 1,765,774,138.68 | 1,501,614,080.55 |
Net increase in loans and disbursement to customers | ||
Net increase in deposit with central bank and inter-banks | ||
Cash paid for claims of direct insurance contracts | ||
Net increase of loans to other banks | ||
Cash paid for interest, fee and commission | ||
Cash paid for dividends of insurance policies | ||
Cash paid to and on behalf of employees | 392,733,128.51 | 350,456,810.15 |
Payments of taxes and surcharges | 85,488,578.90 | 68,388,963.77 |
Cash paid relating to other operating activities | 232,103,473.43 | 162,576,472.61 |
Sub-total of cash outflows from operating activities | 2,476,099,319.52 | 2,083,036,327.08 |
Net cash flows from operating activities | -56,247,299.36 | 1,518,218.37 |
2. Cash flows from investment activities: | ||
Cash received from return of investments | 304,791,101.68 | 1,703,262.34 |
Cash received from investments income | 109,215,313.16 | 110,699,788.36 |
Net cash received from disposal of fixed assets, intangible assets and other long-term assets | 668,334.46 | 754,551.68 |
Net cash received from disposal of subsidiaries and other business units | 5,264,093.90 | 211,198,900.00 |
Cash received relating to other investing activities | ||
Sub-total of cash inflows from investing activities | 419,938,843.20 | 324,356,502.38 |
Cash paid to acquire fixed assets, intangible assets and other long-term assets | 50,713,747.56 | 30,695,331.84 |
Cash paid for investments | 45,400,000.00 | |
Net increase in pledged deposits | ||
Net cash paid to acquire subsidiaries and other business units | 401,824,582.67 | |
Cash paid relating to other investing activities | ||
Sub-total of cash outflow from investing activities | 452,538,330.23 | 76,095,331.84 |
Net cash flows from investing activities | -32,599,487.03 | 248,261,170.54 |
3. Cash flows from financing activities | ||
Cash received from investment absorption | ||
Including: Cash received by subsidiaries from investment absorpotion of non-controlling interest | ||
Cash received from loans granted | 847,850,000.00 | 263,670,518.89 |
Cash received relating to other financing activities | 23,991,047.27 | 83,846,329.05 |
Sub-total of cash inflows from financing activities | 871,841,047.27 | 347,516,847.94 |
Cash paid for settlement of borrowings | 242,005,111.11 | 336,679,560.00 |
Cash paid for dividends, profits appropriation or payments of interest | 30,640,401.33 | 24,739,356.41 |
Including: Dividens and profits paid to non-controlling interest | ||
Cash paid relating to other financing activities | 29,129,116.86 | 111,987,388.37 |
Sub-total of cash outflows from financing activities | 301,774,629.30 | 473,406,304.78 |
Net cash flows from financing activities | 570,066,417.97 | -125,889,456.84 |
4. Effect of changes in foreign exchange rate on cash and cash equivalents | 1,472,833.72 | 100,945.31 |
5. Net increase in cash and cash equivalents | 482,692,465.30 | 123,990,877.38 |
Add: Cash and cash equivalents at beginning of year | 438,969,337.87 | 314,978,460.49 |
6. Cash and cash equivalents at end of year | 921,661,803.17 | 438,969,337.87 |
legal representative:Ji Zhijian head of the accounting work:Wang Jinxiuthe person in charge of the accounting office:Li Sheng
Cash Flow Statement of Parent CompanyName of Enterprise: Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd Amount Unit :RMB
Item | This year | Last year |
1.Cash flow from operating activities | ||
Cash receipts from sale of goods or rendering of services | 769,156,429.00 | 765,232,022.05 |
Refunds of taxes | 7,968,777.52 | |
Other cash receipts in operating activities | 16,186,561.44 | 25,372,394.89 |
Sub-total of cash inflows from operating activities | 793,311,767.96 | 790,604,416.94 |
Cash payments for goods and services acquired | 721,626,515.16 | 570,924,816.02 |
Cash payments to and on behalf of employees | 116,047,528.96 | 106,175,901.94 |
Tax and duties payments | 30,826,994.20 | 32,561,028.64 |
Other cash payments for operating activities | 73,762,376.92 | 53,337,644.37 |
Sub-total of cash outflows from operating activities | 942,263,415.24 | 762,999,390.97 |
Net cash flows from operating activities | -148,951,647.28 | 27,605,025.97 |
2.Cash flows from investing activities | ||
Cash receipts from return of investments | 330,679,301.68 | 1,700,000.00 |
Cash receipts from investments income | 262,646,360.17 | 113,318,424.61 |
Net cash receipts from disposal of fixed assets, intangible assets and other long-term assets | 5,000.00 | |
Net cash receipts from disposal of subsidiaries and other businesses | 211,198,900.00 | |
Other cash receipts in investing activities | ||
Sub-total of cash inflows from investing activities | 593,330,661.85 | 326,217,324.61 |
Cash payments for acquired fixed assets, intangible assets and other long-term assets | 14,815,415.96 | 10,487,613.09 |
Cash payments for investment | 1,010,883,060.00 | 54,165,615.00 |
Net cash payments for acquisition of subsidiaries and other businesses | ||
Other cash payments in investing activities | ||
Sub-total of cash outflows from investing activities | 1,025,698,475.96 | 64,653,228.09 |
Net cash flows from investment activities | -432,367,814.11 | 261,564,096.52 |
3.Cash flows from financing activities | ||
Cash received from capital injection | ||
Cash receipts from borrowings | 829,000,000.00 | 227,000,000.00 |
Other cash receipts in financing activities | 5,971,249.02 | 23,123,472.43 |
Sub-total of cash inflows from financing activities | 834,971,249.02 | 250,123,472.43 |
Cash paid for settlement of borrowings | 237,000,000.00 | 311,478,560.00 |
Cash paid for dividends, profits appropriation or payments of interest | 23,036,986.09 | 21,455,435.22 |
Other cash payments in financing activities | 2,535,000.00 | 21,611,560.00 |
Sub-total of cash outflows from financing activities | 262,571,986.09 | 354,545,555.22 |
Net cash flows from financing activities | 572,399,262.93 | -104,422,082.79 |
4.Effect of changes in foreign exchange rate on cash and cash equivalents | 19,977.77 | -16,318.79 |
5.Net increases in cash and cash equivalents | -8,900,220.69 | 184,730,720.91 |
Add: the beginning balance of cash and cash equivalent | 369,932,989.19 | 185,202,268.28 |
6.The ending balance of cash and cash equivalent | 361,032,768.50 | 369,932,989.19 |
legal representative:Ji Zhijian head of the accounting work:Wang Jinxiuthe person in charge of the accounting office:Li Sheng
Consolidated Statement of Changes in Shareholer's Equity
Item | Current year | ||||||||||||||
Equity attributable to the equity holders of the Company | Minority interests | Total equity | |||||||||||||
Paid-up capital (share capital) | Other equity instrument | Capital reserves | Less: Treasury shares | Other comprehensive income | Special reserves | Surplus reserves | △General risk provision | Undistributed profits | Others | Sub-total | |||||
preference share | perpetual bond | others | |||||||||||||
1. Balance at end of last year | 843,212,507.00 | 0.00 | 0.00 | 0.00 | 720,215,866.78 | 0.00 | 2,178,681.73 | 0.00 | 809,471,199.64 | 0.00 | 627,764,582.32 | 0.00 | 3,002,842,837.47 | 46,654,771.50 | 3,049,497,608.97 |
Add: Changes in accounting policies | - | ||||||||||||||
Correction of prior periods errors | - | ||||||||||||||
Business combination within the same control | - | ||||||||||||||
Others | |||||||||||||||
2. Balance at beginning of current year | 843,212,507.00 | 0.00 | 0.00 | 0.00 | 720,215,866.78 | 0.00 | 2,178,681.73 | 0.00 | 809,471,199.64 | 0.00 | 627,764,582.32 | 0.00 | 3,002,842,837.47 | 46,654,771.50 | 3,049,497,608.97 |
3. Increase/ Decrease for current year (Decrease listed with "-") | 0.00 | 0.00 | 0.00 | 0.00 | -3,118,768.40 | 0.00 | 29,988.00 | 0.00 | 15,755,434.51 | 0.00 | -9,318,659.74 | 0.00 | 3,347,994.37 | 7,423,199.49 | 10,771,193.86 |
(Ⅰ)Total of comprehensive income | 29,988.00 | 18,255,330.45 | 18,285,318.45 | 1,633,633.87 | 19,918,952.32 | ||||||||||
(Ⅱ)Capital contribution and reduction | 0.00 | 0.00 | 0.00 | 0.00 | -3,118,768.40 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | -3,386,430.61 | 0.00 | -6,505,199.01 | 7,589,565.62 | 1,084,366.61 |
1.Ordinary share | - | - | |||||||||||||
2.Capital contributed by other equity instrument holders | - | - | |||||||||||||
3.Share-based payments charged to equity | - | - | |||||||||||||
4.Others | -3,118,768.40 | -3,386,430.61 | -6,505,199.01 | 7,589,565.62 | 1,084,366.61 | ||||||||||
(III)Profit appropriations | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 15,755,434.51 | 0.00 | -24,187,559.58 | 0.00 | -8,432,125.07 | -1,800,000.00 | -10,232,125.07 |
1.Appropriation to surplus reserves | 15,755,434.51 | -15,755,434.51 | 0.00 | 0.00 | |||||||||||
2.Appropriation to general risks provision | 0.00 | 0.00 | |||||||||||||
3.Appropriation to equity holders (or shareholders) | -8,432,125.07 | -8,432,125.07 | -1,800,000.00 | -10,232,125.07 | |||||||||||
4.Others | 0.00 | 0.00 | |||||||||||||
(IV)Transfer within equity | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - |
1.Transfer of capital reserve to capital (share capital) | - | - | |||||||||||||
2.Transfer of surplus reserves to capital (share capital) | - | - | |||||||||||||
3.Surplus reserves making up of losses | - | - | |||||||||||||
4.Carried over the change in net | - | - |
asset/liability from remeasurment on defined benefit plan | |||||||||||||||
5.Transfer of other comprehensive to retained earnings | - | - | |||||||||||||
6.Others | - | - | |||||||||||||
(V)Special reserves | - | - | - | - | - | - | - | - | - | - | - | - | - | ||
1.Provision for special reserve | 4,613,180.31 | 4,613,180.31 | 4,613,180.31 | ||||||||||||
2.Utilisation of special reserve | 4,613,180.31 | 4,613,180.31 | 4,613,180.31 | ||||||||||||
(VI)Others | -16,123,970.29 | -322,778.04 | -16,446,748.33 | -16,446,748.33 | |||||||||||
4、Balance at end of current year | 843,212,507.00 | 0.00 | 0.00 | 0.00 | 717,097,098.38 | 0.00 | 2,208,669.73 | 0.00 | 825,226,634.15 | 0.00 | 618,445,922.58 | 0.00 | 3,006,190,831.84 | 54,077,970.99 | 3,060,268,802.83 |
legal representative:Ji Zhijian head of the accounting work:Wang Jinxiu the person in charge of the accounting office:Li Sheng
Consolidated Statement of Changes in Shareholer's Equity(continued)
Name of Enterprise:Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd Amount Unit:RMB
Item | Last year | ||||||||||||||
Equity attributable to the equity holders of the Company | Minority interests | Total equity | |||||||||||||
Paid-up capital (share capital) | Other equity instrument | Capital reserves | Less: Treasury shares | Other comprehensive income | Special reserves | Surplus reserves | △General risk provision | Undistributed profits | Others | Sub-total | |||||
preference share | perpetual bond | others | |||||||||||||
1. Balance at end of last year | 843,212,507.00 | - | - | - | 726,768,468.00 | - | 2,501,459.77 | - | 805,525,775.33 | - | 997,601,577.97 | - | 3,375,609,788.07 | 73,596,499.65 | 3,449,206,287.72 |
Add: Changes in accounting policies | - | ||||||||||||||
Correction of prior periods errors | - | ||||||||||||||
Business combination within the same control | - | ||||||||||||||
Others | -8,839,959.60 | -79,559,636.71 | -88,399,596.31 | -88,399,596.31 | |||||||||||
2. Balance at beginning of current year | 843,212,507.00 | - | - | 726,768,468.00 | - | 2,501,459.77 | - | 796,685,815.73 | - | 918,041,941.26 | - | 3,287,210,191.76 | 73,596,499.65 | 3,360,806,691.41 | |
3. Increase/ Decrease for current year (Decrease listed with "-") | - | - | - | -6,552,601.22 | - | -322,778.04 | - | 12,785,383.91 | - | -290,277,358.94 | - | -284,367,354.29 | -26,941,728.15 | -311,309,082.44 | |
(Ⅰ)Total of comprehensive income | -269,059,849.96 | -269,059,849.96 | -6,129,744.08 | -275,189,594.04 | |||||||||||
(Ⅱ)Capital contribution and reduction | - | - | - | 9,571,369.07 | - | - | - | - | - | - | - | 9,571,369.07 | -18,336,984.07 | -8,765,615.00 | |
1.Ordinary share | - | - | |||||||||||||
2.Capital contributed by other equity instrument holders | - | - | |||||||||||||
3.Share-based payments charged to equity | - | - | |||||||||||||
4.Others | 9,571,369.07 | 9,571,369.07 | -18,336,984.07 | -8,765,615.00 | |||||||||||
(III)Profit appropriations | - | - | - | - | - | - | - | - | 12,785,383.91 | - | -21,217,508.98 | - | -8,432,125.07 | -2,475,000.00 | -10,907,125.07 |
1.Appropriation to surplus reserves | 12,785,383.91 | -12,785,383.91 | - | - | |||||||||||
2.Appropriation to general risks provision | - | - | |||||||||||||
3.Appropriation to equity holders (or shareholders) | -8,432,125.07 | -8,432,125.07 | -2,475,000.00 | -10,907,125.07 | |||||||||||
4.Others | - | - | |||||||||||||
(IV)Transfer within equity | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - |
1.Transfer of capital reserve to capital (share capital) | - | - | |||||||||||||
2.Transfer of surplus reserves to capital (share capital) | - | - |
3.Surplus reserves making up of losses | - | - | |||||||||||||
4.Carried over the change in net asset/liability from remeasurment on defined benefit plan | - | - | |||||||||||||
5.Transfer of other comprehensive to retained earnings | - | - | |||||||||||||
6.Others | - | - | |||||||||||||
(V)Special reserves | - | - | - | - | - | - | - | - | - | - | - | - | - | ||
1.Provision for special reserve | 3,799,007.87 | 3,799,007.87 | 3,799,007.87 | ||||||||||||
2.Utilisation of special reserve | 3,799,007.87 | 3,799,007.87 | 3,799,007.87 | ||||||||||||
(VI)Others | -16,123,970.29 | -322,778.04 | -16,446,748.33 | -16,446,748.33 | |||||||||||
4、Balance at end of current year | 843,212,507.00 | - | - | 720,215,866.78 | - | 2,178,681.73 | - | 809,471,199.64 | - | 627,764,582.32 | - | 3,002,842,837.47 | 46,654,771.50 | 3,049,497,608.97 |
legal representative:Ji Zhijian head of the accounting work:Wang Jinxiuthe person in charge of the accounting office:Li Sheng
Statement of Changes in Shareholer's Equity of Parent Company
For the Year of 2022
Name of Enterprise:Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd Amount Unit:RMB
Item | Current year | |||||||||||
Paid-up capital (share capital) | Other equity instrument | Capital reserves | Less: Treasury shares | Other comprehensive income | Special reserves | Surplus reserves | Undistributed profits | Others | Total equity | |||
preference share | perpetual bond | others | ||||||||||
1. Balance at end of last year | 843,212,507.00 | 0.00 | 0.00 | 0.00 | 755,146,592.54 | 0.00 | 1,216,581.06 | 0.00 | 809,471,199.64 | 803,564,427.95 | 0.00 | 3,212,611,308.19 |
Add: Changes in accounting policies | - | |||||||||||
Correction of prior periods errors | - | |||||||||||
Others | ||||||||||||
2. Balance at beginning of current year | 843,212,507.00 | 0.00 | 0.00 | 0.00 | 755,146,592.54 | 0.00 | 1,216,581.06 | 0.00 | 809,471,199.64 | 803,564,427.95 | 0.00 | 3,212,611,308.19 |
3. Increase/ Decrease for current year (Decrease listed with "-") | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 29,988.00 | 0.00 | 15,755,434.51 | 133,366,785.48 | 0.00 | 149,152,207.99 |
(Ⅰ)Total of comprehensive income | 29,988.00 | 157,554,345.06 | 157,584,333.06 | |||||||||
(Ⅱ)Capital contribution and reduction | - | - | - | - | - | - | - | - | - | - | - | |
1.Ordinary share | - | |||||||||||
2.Capital contributed by other equity instrument holders | - | |||||||||||
3.Share-based payments charged to equity | - | |||||||||||
4.Others | - | |||||||||||
(III)Profit appropriations | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 15,755,434.51 | -24,187,559.58 | 0.00 | -8,432,125.07 |
1.Appropriation to surplus reserves | 15,733,434.51 | -15,755,434.51 | 0.00 | |||||||||
2.Appropriation to equity holders (or shareholders) | -8,432,125.07 | -8,432,125.07 | ||||||||||
3.Others | - | |||||||||||
(IV)Transfer within equity | - | - | - | - | - | - | - | - | - | - | - | |
1.Transfer of capital reserve to capital (share capital) | - | |||||||||||
2.Transfer of surplus reserves to capital (share capital) | - | |||||||||||
3.Surplus reserves making up of losses | - | |||||||||||
4.Carried over the change in net asset/liability from remeasurment on defined benefit plan | - | |||||||||||
5.Transfer of other comprehensive to retained earnings | - | |||||||||||
6.Others | - | |||||||||||
(V)Special reserves | - | - | - | - | - | - | - | - | - | - | - | - |
1.Provision for special reserve | 2,791,153.21 | 2,791,153.21 | ||||||||||
2.Utilisation of special reserve | 2,791,153.21 | 2,791,153.21 | ||||||||||
(VI)Others | ||||||||||||
4、Balance at end of current year | 843,212,507.00 | 0.00 | 0.00 | 0.00 | 755,146,592.54 | 0.00 | 1,246,569.06 | 0.00 | 825,226,634.15 | 936,931,213.43 | 0.00 | 3,361,763,516.18 |
legal representative:Ji Zhijian head of the accounting work:Wang Jinxiu the person in charge of the accounting office:Li Shen
Statement of Changes in Shareholer's Equity of Parent Company(continued)
For the Year of 2022
Item | Last year | |||||||||||
Paid-up capital (share capital) | Other equity instrument | Capital reserves | Less: Treasury shares | Other comprehensive income | Special reserves | Surplus reserves | Undistributed profits | Others | Total equity | |||
preference share | perpetual bond | others | ||||||||||
1. Balance at end of last year | 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 |
Add: Changes in accounting policies | - | |||||||||||
Correction of prior periods errors | - | |||||||||||
Others | -8,839,959.60 | -79,559,636.71 | -88,399,596.31 | |||||||||
2. Balance at beginning of current year | 843,212,507.00 | - | - | 771,270,562.83 | - | 1,539,359.10 | - | 796,685,815.73 | 911,034,304.78 | - | 3,323,742,549.44 | |
3. Increase/ Decrease for current year (Decrease listed with "-") | - | - | - | -16,123,970.29 | - | -322,778.04 | - | 12,785,383.91 | -107,469,876.83 | - | -111,131,241.25 | |
(Ⅰ)Total of comprehensive income | -86,252,367.85 | -86,252,367.85 | ||||||||||
(Ⅱ)Capital contribution and reduction | - | - | - | - | - | - | - | - | - | - | - | |
1.Ordinary share | - | |||||||||||
2.Capital contributed by other equity instrument holders | - | |||||||||||
3.Share-based payments charged to equity | - | |||||||||||
4.Others | - | |||||||||||
(III)Profit appropriations | - | - | - | - | - | - | - | 12,785,383.91 | -21,217,508.98 | - | -8,432,125.07 | |
1.Appropriation to surplus reserves | 12,785,383.91 | -12,785,383.91 | - | |||||||||
2.Appropriation to equity holders (or shareholders) | -8,432,125.07 | -8,432,125.07 | ||||||||||
3.Others | - | |||||||||||
(IV)Transfer within equity | - | - | - | - | - | - | - | - | - | - | - | |
1.Transfer of capital reserve to capital (share capital) | - | |||||||||||
2.Transfer of surplus reserves to capital (share capital) | - | |||||||||||
3.Surplus reserves making up of losses | - | |||||||||||
4.Carried over the change in net asset/liability from remeasurment on defined benefit plan | - | |||||||||||
5.Transfer of other comprehensive to retained earnings | - | |||||||||||
6.Others | - | |||||||||||
(V)Special reserves | - | - | - | - | - | - | - | - | - | - | - | - |
1.Provision for special reserve | 3,799,007.87 | 3,799,007.87 | ||||||||||
2.Utilisation of special reserve | 3,799,007.87 | 3,799,007.87 | ||||||||||
(VI)Others | -16,123,970.29 | -322,778.04 | -16,446,748.33 | |||||||||
4、Balance at end of current year | 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 |
legal representative:Ji Zhijian head of the accounting work:Wang Jinxiu the person in charge of the accounting office:Li Sheng
I. General InformationBingshan Refrigeration & Heat Transfer Technologies Co., Ltd (the “Company”) previouslynamed as Dalian Refrigeration Company Limited, was reorganized and reformed from mainpart of former Dalian Refrigeration Factory. On December 8, 1993, the Company went tothe public as a listed company at Shenzhen Stock Exchange Market. On March 20, 1998,the Company successfully went to the public at B shAare market and listed at ShenzhenStock Exchange Market with total share capital of RMB350,014,975.00Yuan.According to the 13
th meeting of the 6
thgeneration of board, extraordinary general meetingfor 2015 fiscal year and ' Restricted share incentive plan (draft)' , the Company planned tointroduce an ordinary share to incentive objectives, which was 10,150,000 number of shareswould be granted to 41 share incentive objectives at granted price of RMB5.56Yuan per share.Up to March 12, 2015, the Company received new added share capital ofRMB10,150,000.00Yuan.The general meeting for 2015 fiscal year held on April 21, 2016 approved the profitdistribution policy for the year of 2015, which agrees the profit distribution based on the total360,164,975 number of shares as share capital, paid share dividend of 5 common shares forevery 10 shares through capital reserve. The policy stated above was fully implemented onMay 5, 2016, and the registered capital was altered to 540,247,462.00Yuan.The 17
th
meeting of the 6
th generation of board was held on June 4, 2015 and the 2
ndinterimshareholders’ meeting was held on June 24, 2015, meeting deliberated and passed theproposal of non-public offering of ‘A shares’. China’s Securities Regulatory Commissionissued SFC license [2015]3137 on December 30, 2015, approving that new non-publicoffering cannot exceeded 38,821,954 numbers of shares. The company implemented the postmeeting procedures for China’s Securities Regulatory Commission, which is regardingadjustment of bottom price and the number of the shares issued after the implementation ofprofit distribution policy of 2015 in May, 2016, and accordingly revised the upper limit ofnon-public offering of share to58,645,096 number of new ‘A shares’. The company issued thenon-public offering of 58,645,096 number of ‘A shares’ to 7 investors, and as a result, thetotal number of shares of the Company is changed to 598,892,558 shares, and the par value is1yuan per share and the total share capital is 598,892,558.00Yuan.According to the ‘Restricted Share Incentive Plan(draft) of Dalian Refrigeration CompanyLimited for the year of 2016’ and the ‘Proposal regarding the shareholders’ meetingauthorized the board of directors to implement the Restricted Share Incentive Plan’ approvedon the 3
rd
provisional general meeting held on September 13, 2016, the 9
th meeting of the 7
th
generation of board deliberated and passed the ‘Proposal about granting the restricted sharesto incentive targets’ on September 20, 2016 and set September 20
, 2016 as share granted date,
and granted 12,884,000 number of restricted shares to 118 incentive targets at granted priceof 5.62Yuan per share. By November 22, 2016, The Company has actually received thenewly subscribed registered share capital of 12,884,000.00Yuan subscribed by incentivetargets.On May 19, 2017, the general meeting for 2016 fiscal year was held and profit appropriationscheme for 2016 FY was approved, which was every 10 shares will be increased by 4 sharesthrough capital reserve based on the total 611,776,558 number of shares. After the profitappropriation scheme, the registered capital was changed to RMB856,487,181.00Yuan.On December 28, 2017, The Company held the 3rd extraordinary shareholders meeting in2017, and reviewed and approved the “Proposal on Repurchasing and Retiring PartiallyRestricted Stocks of the 2016 Restricted Stock Incentive Plan”. On March 8, 2018, after TheCompany's repurchase and cancellation, The Company implemented the correspondingcapital reduction procedures according to law. The registered capital of The Company waschanged from 856,487,181.00Yuan to 855,908,981.00 Yuan.On May 4, 2018, The Company held the 21
st meeting of the 7
thBoard of Directors, andreviewed and approved the “Proposal on Repurchasing and Retiring Partially RestrictedStocks of the 2015 Restricted Stock Incentive Plan". On June 29, 2018, after The Company'srepurchase and cancellation, The Company implemented the corresponding capital reductionprocedures according to law. The registered capital of The Company was changed from855,908,981.00 Yuan to 855,434,087 .00Yuan.On January 17
th
, 2019, the 1
stinterim shareholders’ meeting was held and approved for“Proposal on Termination of the 2016 Restricted Stock Incentive Plan and Repurchasing andRetiring Restricted Stocks Plan”. Up to February 25
th, 2019, The Company has completed therepurchasing and retiring stocks plan, respectively The Company shall perform thecorresponding capital reduction procedures in accordance with the law and the registeredcapital decreased from 855,434,087.00Yuan to 843,212,507.00Yuan.On December 20
th, 2019, The Company held the 7
th meeting of the 8
th
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 XinanRoad, Shahekou District, Dalian, China. In 2017, The Company relocated to new factory andchanged its address to No.16 Liaohe East RD, Dalian Economic&Technology DevelopmentZone(‘DDZ’), Dalian China as same as HQ’s address. The parent company of The Companyis Dalian Bingshan Group Co., Ltd., and there is no ultimate controller regulated by therelevant law, regulations and rules.The Company is in industrial manufacturing sector, mainly engaged in industrial refrigeration,
refrigerated and frozen food storage, and manufacture and installation of centralair-conditioning and refrigeration equipment. The scope of business includes research anddevelopment, design, manufacture, sale, lease, installation and repair of refrigeration and heatequipment, accessories, spare parts, and energy-saving and environmental protection products;Technical services, technical consultation, technical promotion; Design, construction,installation repair and maintenance of complete sets of refrigeration and air conditioningprojects, mechanical and electrical installation projects, steel structure projects, anti-corrosionand heat preservation works; Rental of premises; Transport of ordinary goods; Propertymanagement; Low temperature storage; Import and export of goods and technologies. (Withthe exception of projects subject to approval according to law, independently carry outbusiness activities according to law with the business license).II. The scope of consolidationThere are 13 entities included in the current consolidated financial statements. This year, entitieswithin the consolidation scope changed comparing to last year. SonyoCompressor(Dalian)Co.,Ltd and Sonyo Refrigeration System (Dalian) Co., Ltd, two companiesare newly added to consolidation scope because of significant asset restructuring. 3 companies,Ningbo Bingshan Air-conditioning Refrigeration Engineering Co., Ltd, Bingshan TechnologyService (Dalian) Co., Ltd and Dalian Xinminghua Electrical Technology Co., Ltd are out ofconsolidation scope because of disposal and absorption merging. For the specific information ofthe consolidation scope, see the notes of “VII. The Change of Scope of Consolidation” and“VIII. The Equity in Other Entities”.III. 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 IV“Significant Accounting Policies and Accounting Estimates”.
(2) Going concern
The Company has the capacity to continually operate within 12 months at least since the endof report period, and hasn‘t the major issues impacting on the sustainable operation ability.IV. Significant Accounting Policies and Accounting Estimates
1. Declaration for compliance with accounting standards for business enterprisesThe financial statements are prepared by the Company according to the requirements ofAccounting Standard for Business Enterprise, and reflect the relative information for thefinancial position, operating performance, cash flow of the Company truly and fully.
2. Accounting period
The Company adopts the Gregorian calendar year as accounting period from Jan 1 to Dec 31.
3. Operating cycle
The Company sets twelve months for one operating cycle and as the liquidity criterion forassets and liability.
4. Functional currency
The Company adopts RMB as functional currency.
5. Accounting for business combination under same control and not under same controlAs an acquirer, the assets and liabilities that the Company obtained in a business combinationunder the same control should be measured on the basis of their carrying amount in theconsolidated financial statements on the combining date. As for the balance between thecarrying amount of the net assets obtained by the combining party and the carrying amount ofthe consideration paid by it, the capital surplus shall be adjusted. If the capital surplus is notsufficient to be offset, the retained earnings 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, theliabilities incurred or assumed and equity securities issued by the acquirer in exchange for thecontrol of the acquire, and sum of all direct expenses(if the combination is achieved in stages,the combination cost shall be the sum of individual transaction). The difference whencombination cost exceeds proportionate share of the fair value of identifiable net assets ofacquire should be recognized as goodwill. If the combination cost is less than proportionateshare of the fair value of identifiable net assets of acquiree, firstly, fair value of identifiableasset, liability or contingent liability shall be reviewed, and so the fair value of non-monetaryassets or equity instruments issued in the combination consideration , after review, still thecombination cost is less than proportionate share of the fair value of identifiable net assets ofacquire, the difference should be recognized as non-operating income.
6. Method of preparation of consolidated financial statements
All subsidiaries controlled by the Company and structured entities are within theconsolidation scope.If subsidiaries adopt different accounting policy or have different accounting period from theparent company, appropriated adjustments shall be made in accordance with the Companypolicy in preparation of the consolidated financial statements.All significant intergroup transactions, outstanding balances and unrealized profit shall beeliminated in full when preparing the consolidated financial statements. Portion of the
subsidiary’s equity not belonging to the parent, profit, loss for the current period, portion ofother comprehensive income and total comprehensive belonging to minority interest, shall bepresented separately in the consolidated financial statements under “minority interest ofequity”, ”minority interest of profit and loss”, “other comprehensive income attributed tominority interest” and “total comprehensive income attributed to minority interest” title.If a subsidiary is acquired under common control, its operation results and cash flow shall beconsolidated since the beginning of the consolidation period. When preparing the comparativeconsolidated financial statements, adjustments shall be made to relevant items of comparativefigures as regarded that reporting entity established through consolidation has been alwaysexisting since the point when the ultimate controlling party starts to have the control.If a business consolidation under common control is finally achieved in stages, consolidationaccounting method shall be disclosed additionally for the period in which the control isobtained. For example, if a business consolidation under common control is finally achievedin stages, when preparing the consolidated financial statements, adjustments shall be made forthe current consolidation status as if consolidation has always been there since the point whenthe ultimate controlling party starts to control. In preparation of comparative figures, assetand liability of the acquiree shall be consolidated into the Company’s comparative financialstatements, but to the extent no earlier than the point when the Company and acquiree areboth under ultimate control and relevant items under equity in comparative financialstatements shall be adjusted for net asset increased in combination. To avoid the duplicatedcomputation of net asset of acquiree, for long-term equity investment held by the Companybefore the consolidation, relevant profit and loss, other comprehensive income and movementin other net asset, recognized for the period between the combination date and later date whenoriginal shareholding is obtained and when the Company and the acquiree are under commoncontrol of same ultimate controlling party, shall be respectively used for writing down theopening balance of retained earnings of comparative financial statements and profit and lossfor the current period.If a subsidiary is acquired not under common control, its operation results and cash flow shallbe consolidated since the beginning of the consolidation period. In preparation of theconsolidated financial statements, adjustments shall be made to subsidiary’s financialstatements based on the fair value of its all identifiable assets, liability or contingent liabilityon the acquisition date.If a business consolidation under non-common control is finally achieved in stages,consolidation accounting method shall be disclosed additionally for the period in which thecontrol is obtained. For example, if a business consolidation not under common control isfinally achieved in stages, when preparing the consolidated financial statements, the acquirershall remeasure its previously held equity interest in the acquiree at its acquisition-date fair
value and recognize the resulting gain or loss as investment income for the current period.Other comprehensive income, under equity method accounting rising from the interest held inacquiree in relation to the period before the acquisition, and changes in the value of its otherequity other than net profit or loss, other comprehensive income and profit appropriation shallbe transferred to investment gain or loss for the period in which the acquisition incurs,excluding the other comprehensive income from the movement on the remeasurement of neasset or liability of defined benefit plan.When the Company partially disposes of the long –term equity investment in subsidiarywithout losing the control over it, in the consolidated financial statements, the difference,between disposals price and respective disposed value of share of net assets in the subsidiarysince the acquisition date or combination date, shall be adjusted for capital surplus or sharepremium, no enough capital surplus, then adjusted for retained earnings.When the Company partially disposes of the long –term equity investment in subsidiary andlose the control over it, in preparation of consolidated financial statements, remaining share ofinterest in the subsidiary shall be remeasured on the date of losing control. Sum of the sharedisposal consideration and fair value of remaining portion of shareholding minus the share ofthe net assets in the subsidiary held based on the previous shareholding percentage since theacquisition date or combination date, the balance of above is recognized as investmentgain/loss for the period and goodwill shall be written off accordingly. Other comprehensiveincome relevant to share investment in subsidiary shall be transferred to investment gain /lossfor the period on the date of losing control.When the Company partially disposes of the long –term equity investment in subsidiary andlose the control over it by stages, if all disposing transactions are bundled, each individualtransaction shall be seen as a transaction of disposal of a subsidiary by losing control. Thedifference between the disposal price and the share of the net assets in the subsidiary heldbefore the date of losing control, shall be recognize as other comprehensive income until thedate of losing control where it is transferred into investment gain/ loss for the current period.
7. Joint arrangement classification and joint operation accounting
The Company’s joint arrangement includes joint operation and joint venture. For jointoperation, The Company as a joint operator shall recognize its own assets and its share of anyassets held jointly, its liabilities and its share of any liabilities incurred jointly, its revenuefrom the sale of its share of the output arising from the joint operation, its share of therevenue from the sale of the output by the joint operation; and its expenses, including its shareof any expenses incurred jointly. When an entity enters into a transaction with a jointoperation in which it is a joint operator, such as a sale or contribution of assets, it isconducting the transaction with the other parties to the joint operation and, as such, the jointoperator shall recognize gains and losses resulting from such a transaction 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 Company refers to cash on hand and bankdeposit. The cash equivalents refer to short-term (normally with original maturities of threemonths or less) and liquid investments which are readily convertible to known amounts ofcash and subject to an insignificant risk of changes in value.
9. Translation of foreign currency
(1) Foreign currency transaction
Foreign currency transactions are translated at the spot exchange rate issued by People’s Bankof China (“PBOC”) on the 1
stday of the month when the transactions incurred. Monetaryassets and liabilities in foreign currencies are translated into RMB at the exchange rateprevailing at the balance sheet day. Exchange differences arising from the settlement ofmonetary items are charged as in profit or loss for the period. Exchange differences ofspecific borrowings related to the acquisition or construction of a fixed asset should becapitalized as occurred, before the relevant fixed asset being acquired or constructed is readyfor 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 aspot exchange 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 areincurred. The income and expense should be translated at spot exchange rate when thetransaction incurs. Translation difference of foreign currency financial statements should bepresented separately under the other comprehensive income title. Foreign currency cash flowsare translated at the spot exchange rate on the day when the cash flows incur. The amountsresulted from change of exchange rate are presented 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 Companybecomes party 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 throughother comprehensive income or fair value through profit or loss on the basis of both theCompany’s business model for managing the financial assets and the contractual cash flowcharacteristics of the financial asset.
A financial asset shall be measured at amortized cost if both of the following conditions aremet: ①the financial asset is held within a business model whose objective is to hold financialassets in order to collect contractual cash flows;②the contractual terms of the financial assetgive rise on specified dates to cash flows that are solely payments of principal and interest onthe principal amount outstanding. At initial recognition, the Company shall measure thefinancial asset at its fair value and take any transaction costs that are directly attributable tothe financial asset into account. Subsequently the Company shall measure the financial assetat amortized cost. A gain or loss on a financial asset measured at amortized cost, which isn’tany part of hedging relationship shall be recognized in profit or loss when the financial assetis derecognized, impaired, involved in foreign exchange or amortized for any differencearising between the initial recognized amount and due amount by applying effective interestmethod. The financial assets of this category include: receivable, notes receivable and otherreceivables.A financial asset shall be measured at fair value through other comprehensive income if bothof the following conditions are met: ①the financial asset is held within a business modelwhose objective is achieved by both collecting contractual cash flows and selling financialassets and ②the contractual terms of the financial asset give rise on specified dates to cashflows that are solely payments of principal and interest on the principal amount outstanding.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 gain orloss on a financial asset measured at fair value through other comprehensive income, whichis not part of hedging relationship shall be recognized in other comprehensive income apartfrom a gain or loss on credit loss, foreign exchange and interest of the financial assetcalculated by effective interest method. Accumulated gain or loss previously in the othercomprehensive income shall be accounted in the profit or loss account when the financialasset is derecognized. The financial assets of this category include: receivable financing.The Company recognized interest revenue based on effective interest method. Interestrevenue shall be calculated by applying the effective interest rate to the gross carrying amountof a financial asset, except for: ①purchased or originated credit-impaired financial assets.For those financial assets, the Company shall apply the credit-adjusted effective interest rateto the amortized cost of the financial asset from initial recognition. ②financial assets that arenot purchased or originated credit-impaired financial assets but subsequently have becomecredit-impaired financial assets. For those financial assets, the Company shall apply theeffective interest rate to the amortized cost of the financial asset in subsequent reportingperiods.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 instrument
investment 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 foreignexchange gain or loss) shall be accounted in other comprehensive income and shall not besubsequently transferred to profit or loss, unless the dividend received is accounted in profitor loss (excluding the recovered investment cost). Accumulated gain or loss previously in theother comprehensive income shall be out of it and into retained earnings when the financialasset 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 throughprofit or loss. At initial recognition, the Company shall measure this financial asset at its fairvalue and take any transaction costs that are directly attributable to the financial asset intoaccount. Any gain or loss on FVTPL shall be accounted into profit and loss. The financialassets of this category include: tradable financial asset other non-current financial asset.A financial asset shall be classified as fair value through profit or loss if it is recognizedcontingent consideration through business combination, which is not under same controlsituation.
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 beentransferred and the Company transfers substantially all risks and rewards relating to thefinancial assets to the transferee, ③the financial asset has been transferred to the transferee,the Company has given up its control of the financial asset although the Company neithertransfers nor retains all risks and rewards 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 at the derecognition dateand the sum of the consideration received for transfer and the accumulated amount of changesin fair value in respect of the amount of partial derecognition ( financial assets involved intransfer must qualify the following conditions: ① the financial asset is held within abusiness model whose objective is not only for collecting contractual cash flows but also forsale; ②the contractual terms of the financial asset give rise on specified dates to cash flowsthat are solely payments of principal and interest based on the principal amount outstanding) ,that was previously recorded under other comprehensive income is transferred into profit orloss for the period.In the case where only part of the financial asset qualifies for derecognition, the carryingamount of financial asset being transferred is allocated between the portions that to bederecognized and the portion that continued to be recognized according to their relative fairvalue. The difference between the amount of consideration received for the transfer and the
accumulated amount of changes in fair value that was previously recorded in othercomprehensive income for the asset partially qualified for derecognition (financial assetsinvolved in transfer must qualify the following conditions:① the financial asset is heldwithin a business model whose objective is not only for collecting contractual cash flows butalso for sale; ; ②the contractual terms of the financial asset give rise on specified dates tocash flows that are solely payments of principal and interest based on the principal amountoutstanding ) and the above-mentioned allocated carrying amount is charged to profit or lossfor the period.
(2) Financial liabilities
1) Classification, basis for recognition and measurement
The company shall classify all financial liabilities as subsequently measured at amortized costby applying effective interest method, except the followings:
①financial liability measured at fair value through profit or loss including tradable financialliability (derivative instrument of financial liability included) and designated as financialliability measured at fair value through profit or loss. They are subsequently measured at fairvalue. The net gain or loss arising from changes in fair value, dividends and interest paidrelated to such financial liabilities are recorded in profit or loss for the period in which theyare incurred.
② financial assets transfers that do not qualify for derecognition or financial liability isformed from continuing involvement in transferred assets. This type of liability shall bemeasured in accordance with the financial assets transfer standard.
③ financial guarantee contract not in the above category of ①or ② and loan commitmentwhich is not in the category ① at the below the market loan rate.After initial recognition, the Company as an issuer of such a contract shall subsequentlymeasure it at the higher of: the amount initially recognized less the cumulative amount ofincome recognized in accordance with the revenue standards and the amount of the lossallowance determined in accordance with the financial instrument impairment standard.The Company shall account the financial liability as it measured at fair value through profit orloss if the financial liability is formed by contingent consideration recognized by the buyerthrough business 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 shallbe recognized when the Company signs the agreement with creditor to undertake the newfinancial liability in replacement of existing financial liability, and the terms of agreement are
different in substance. Any significant amendment to the agreement as a whole or part of it ismade, then the existing liabilities or part of it shall be derecognized and financial liabilityafter terms amendment shall be recognized as a new financial liability. The differencebetween the carrying amount of the financial liability derecognized and the consideration paidis recognized in profit or loss for the period.
(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 beused for fair value measurement and applicable valuation techniques which enough data isavailable for and supported by other information shall be adopted. Input for fair valuemeasurement has 3 levels: level 1 input is the unadjusted quoted price for identical asset orliability available at the active market on the measurement date; level 2 input is the directly orindirectly observable input for relevant asset or liability apart from level 1 input; level 3 inputis the unobservable input for relevant asset or liability.
(4) Financial asset and financial liability offset
Financial asset and financial liability shall be presented in the balance sheet separately andcannot be offset, unless the following conditions are all met: ①the Company has the legalright to recognized offset amount and the right is enforceable. ②the Company plans toreceive or a legal obligation 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 thefollowing standards: ① if the Company cannot unconditionally avoid paying cash orfinancial asset to fulfil a contractual obligation, the contractual obligation is qualified orfinancial liability. For certain financial instrument, although there are no clear terms andconditions to include obligation of paying cash or other financial liability, contractualobligation may indirectly be formed through other terms and conditions. ② the Company’sown equity instrument shall also be considered whether it is the substitute of cash, financialasset or it is the remaining equity, after the issuer deducts liability, enjoyed by the equityholder , if it must or can be used to settle a financial asset. If the former, the instrument is afinancial liability of the issuer, otherwise it is an equity instrument of the issuer. In certaincircumstances, financial instrument contract is classified as financial liability, if financialinstrument contract specifies the Company must or can use its own equity to settle thefinancial instrument, the contractual amount of right or obligation equals to that of thenumbers 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 ownequity’s market price(such as interest rate, certain commodity’s or financial instrument’sprice variance).
When classifying a financial instrument (or its component) in the consolidated statements, theCompany takes all terms and conditions agreed by the Company member and instrumentholder into consideration. If the Company due to the instrument, as a whole, bears settlementobligation by paying cash, other financial asset or other means resulted in financial liability,the instrument shall be 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 orloss.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 asequity change and no fair value change shall be recognized.
(6) Financial asset impairment
Based on expected credit loss, the Company shall apply the impairment requirements for therecognition and measurement of a loss allowance for the followings: ① a financial assetmeasured at amortized cost; ② a financial asset measured at FVTOCI(the financial asset isheld within a business model whose objective is achieved by both collecting contractual cashflows and selling financial assets and 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.); ③ lease receivable; ④ a contractual asset.Expected credit loss is the weighted average of credit losses with the respective risks of adefault occurring as the weights. A credit loss herein is referred to as the present value, atoriginal effective rate, of the difference between the contractual cash flows that are due to theCompany under the contract; and the cash flows that the Company expects to receive, that'sthe present value of the total cash shortage.The Company shall always measure the loss allowance at an amount equal to lifetimeexpected credit losses for the following items: ①receivables or contract assets originatedfrom trade within regulation of Accounting Standard for Business Enterprises No. 14 –Revenue, regardless any significant financing component is contained. ②Receivable offinance lease payment ③ receivable of operating lease payment.Apart from the above items, other financial assets shall be assessed for impairment lossallowance ①if the credit risk on a financial instrument has not increased significantly sinceinitial recognition, the Company shall measure the loss allowance for that financialinstrument at an amount equal to 12?month expected credit losses. ②if there have beensignificant increases in credit risk, the Company shall measure the loss allowance for afinancial instrument at an amount equal to the lifetime expected credit losses, at the reportingdate. ③ if purchased or originated financial asset is impaired, the Company shall measure
the loss allowance for a financial instrument at an amount equal to the lifetime expectedcredit losses, at the reporting date.For a financial asset measured at FVTOCI(the financial asset is held within a business modelwhose objective is achieved by both collecting contractual cash flows and selling financialassets and the contractual terms of the financial asset give rise on specified dates to cashflows that are solely payments of principal and interest on the principal amount outstanding.) ,the Company shall apply the impairment requirements for the recognition and measurementof a loss allowance for financial assets that are measured at fair value through othercomprehensive income. However, the loss allowance shall be recognized in othercomprehensive income, impairment loss or gain shall be accounted into profit and loss andshall not reduce the carrying amount of the financial asset in the statement of financialposition. Credit loss allowance increase or reverse for financial instrument other than afinancial asset measured at FVTOCI shall be accounted into profit and loss as impairmentloss or gain.
1) Assessment of significant increase in credit risk
At each reporting date, the Company shall assess whether the credit risk on a financialinstrument has increased significantly since initial recognition. To make that assessment, theCompany shall compare the risk of a default occurring on the financial instrument as at thereporting date with the risk of a default occurring on the financial instrument as at the date ofinitial recognition. However, the Company may assume that the credit risk on a financialinstrument has not increased significantly since initial recognition if the financial instrumentis determined to have low credit risk at the reporting date. In general, if the contractualpayments are more than 30 days past due, it indicates the increase in the credit risk unlessreasonable and supportable information , which is available without undue cost or effort toindicate no significant increases in credit risk since initial recognition, even though thecontractual payments are more than 30 days past due. The Company considers reasonable andsupportable information, that is available without undue cost or effort including forwardlooking.If in the aspect of individual instrument, the Company can't obtain sufficient evidence aboutcredit risk increased significantly at a reasonable cost, but portfolio evaluation is feasible, theCompany will group the instruments and assess whether the credit risk increased significantlybased on the portfolio in accordance with the common characteristics of credit risk offinancial instrument.
2) Measurement of expected credit losses
The Company shall measure expected credit losses of a financial instrument in a way thatreflects: ①an unbiased and probability?weighted amount that is determined by evaluating arange of possible outcomes; ② the time value of money; and ③reasonable and supportable
information that is available without undue cost or effort at the reporting date about pastevents, current conditions and forecasts of future economic conditions.The Company determines the credit loss of lease receivable and financial guarantee contractsbased on the individual asset or contract.The Company determines the expected credit loss of trade receivable and contract asset on thebasis of portfolios, which are considered by expected credit loss measurement reflection, byreference to historical experience of credit loss and by comparison of receivable past duedays/ receivable age with default risk rate, unless the single credit loss is separatelyrecognized for contractual payments that is significant in amount and credit impaired.The Company determines the expected credit loss of a financial asset measured atFVTOCI(the financial asset is held within a business model whose objective is achieved byboth collecting contractual cash flows and selling financial assets and the contractual terms ofthe financial asset give rise on specified dates to cash flows that are solely payments ofprincipal and interest on the principal amount outstanding.) and a financial asset measured atamortized cost on the basis of portfolio unless the single credit loss is separately recognizedfor contractual payments that is significant in amount and credit impaired.The Company groups the financial instruments based on the portfolio in accordance with thecommon characteristics of credit risk which involves type of financial instrument, credit riskgrade, geographic location and industry of debtors.The Company measures the expected credit loss on financial instrument based on thefollowings:
①financial asset, credit loss is the present value of difference between the receivable ofcontracted cashflow and expected cashflow.
②lease receivable, credit loss is the present value of difference between the receivable ofcontracted cashflow and expected cashflow. Cash flow used for measurement of credit loss isconsistent with the cash flow used for lease receivable in accordance with leasing standard.The Company adopts simplified approach for trade receivables, contract assets that do notcontain a significant financing component, and shall always measure the loss allowance at anamount equal to lifetime expected credit losses.Impairment requirements is to assess whether credit risk has been significantly increasedsince initial recognition at each reporting date, if there have been significant increases incredit risk, the Company shall measure the loss allowance for a financial instrument at anamount equal to the lifetime expected credit losses, at the reporting date, if the credit risk on afinancial instrument has not increased significantly since initial recognition, the Companyshall measure the loss allowance for that financial instrument at an amount equal to 12?monthexpected 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 thatreflects: an unbiased and probability?weighted amount that is determined by evaluating arange of possible outcomes; The time value of money; and reasonable and supportableinformation that is available without undue cost or effort at the reporting date about pastevents, current conditions and forecasts of future economic conditions.The Company directly lowers the book value of the financial asset when contractual cashflow cannot be fully or partially recollected within rational expectation any longer.The Company also assesses the expected credit loss of financial asset measured at amortizedcost based on age portfolio, other than past due credit loss assessment based on individualitem.
11. Provision for Impairment of Trade receivables
The Company’s receivables include notes receivable, receivable, receivable expected creditloss recognition and accounting.
(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 No 14-RevenueStandard of Accounting Standard for Business Enterprise. For trade receivables which docontain a significant financing component, the Company chooses as its accounting policy tomeasure the loss allowance at an amount equal to lifetime expected credit losses.If the receivable is generated from transactions in accordance with No14-Revenue Standardand despite any significant financing component is contained or not, it shall be measured forthe loss 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 andarbitration; There are clear signs indicating the debtor is unlikely to fulfill the repaymentobligations of the receivables or the receivables with significantly different credit risk due tocontacted repayment etc.Apart from the financial asset to be assessed for credit risk separately, the Company dividesthe financial assets into different group based on common characteristics of risk and assessesthe risk based on the portfolio.
①Notes receivable
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 policy |
Bank acceptance note portfolio | Lower credit risk assessed by the management, no expected credit loss recognition |
Commercial acceptance note portfolio | Same as receivables portfolio and provided for excepted credit loss allowance based on expected credit loss rate |
②Trade receivables and other receivables
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 differentcategories and determined for expected credit loss accounting estimate policy.
Portfolio category | Expected credit loss accounting estimate policy |
Related parties portfolio within the consolidation | Lower credit risk assessed by the management, no expected credit loss recognition |
Other related parties and non-related parties portfolio | Excepted credit loss rate for allowance |
The Company prepares the comparison table between receivables aging and expected creditloss rate within lifetime and work out the expected credit loss by reference to historical creditloss experience in combination with current situation and future forecast of economycondition.The Company shall measure expected credit losses of a financial instrument in a way thatreflects: an unbiased and probability?weighted amount that is determined by evaluating arange of possible outcomes; The time value of money; and reasonable and supportableinformation that is available without undue cost or effort at the reporting date about pastevents, current conditions and forecasts of future economic conditions.The Company prepares the comparison table between receivables aging and fixed provisionrate and 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 theexpected credit loss is larger than the book value of the provision of receivable impairment,the difference shall be recognized as receivable impairment loss, debit to “credit impairmentloss”, credit to “provision for bad debt”. Alternatively, the difference is recognized asimpairment gain and reversed journal entry shall be made.Actually incurred credit loss shall be debit to “provision for bad debt”, credit to “notesreceivable”, “receivable”, “other 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 theprovision for impairment loss, the difference is debit to “credit impairment loss”
12. Receivable financing
During the liquidity management of the Company, majority of the bill receivables is endorsedor discounted prior to the bill due date and endorsed or discounted bill receivables arederecognized after the all risks and rewards have been transferred to the counter party. Thebusiness model for managing bill receivables is not only for collecting contractual cash flowsbut also for selling the financial assets as its objective, therefore it is classified as financialassets that are measured at fair value through other comprehensive income
13. Other receivable
Other receivable shall be measured based on the followings:① the credit risk on a financialasset has not increased significantly since initial recognition, the Company shall measure theloss allowance at an amount equal to 12?month expected credit losses.② there have beensignificant increases in credit risk, the Company shall measure the loss allowance for afinancial instrument at an amount equal to the lifetime expected credit losses. ③purchased ororiginated credit-impaired financial assets, the Company shall measure the loss allowance fora financial instrument at an amount equal to the lifetime expected credit losses.Assessment is based on the portfolio. The Company is unable to obtain the sufficientevidence on the credit risk significant increase at the rational cost at individual instrumentlevel, but it is feasible to assess whether the credit risk increased significantly based on theportfolio. Therefore, the Company groups the other receivable for credit risk increaseassessment based on the common risk characteristic such as age, nature and the industry inwhich debtors are.
14. Inventories
Inventories are materials purchasing, raw material, low-valuable consumable, materialsprocessed on commission, working-in-progress, semi-finished goods, variance ofsemi-finished goods, and finished goods, etc.The inventories are processed on perpetual inventory system, and are measured at their actualcost on acquisition. Weighted average cost method is taken for measuring the inventorydispatched or used. Low value consumables and packaging materials is recognized in theincome statement by one-off method.After year-end thorough inventory check, at the balance sheet date inventory impairmentshould be provided or adjusted according to inventory category. For the finished goods, rawmaterial held for sale and work-in-progress etc. which shall be sold directly, the net realizablevalue should be confirmed at the estimated selling price less estimated selling expenses andrelated tax and expenses. The raw material held for production, its realizable value should be
confirmed at the estimated selling price of finished goods less estimated cost of completion,estimated selling expenses and related tax.
15. Contract asset
(1) Recognition and criterion
Contract asset is an entity’s right to consideration in exchange for goods or services that theentity has transferred to a customer when that right is conditioned on something other than thepassage of time. For example, the Company sold two goods that can be clearly distinguishedto the client, then the Company has the right to consideration in exchange of the goodsbecause one of the goods are delivered, but the consideration’s collection is conditioned onthe other goods delivery, in this case, the right to consideration shall be recognized as contractasset.
(2) Expected credit loss recognition and accounting of contract asset
Expected credit loss recognition of contract asset is referred to the Note XI. Provision forImpairment of Trade receivables.On the balance sheet date, expected credit loss of contract asset shall be calculated and thedifference shall be recognized as the impairment loss if the loss figure worked out is biggerthan the carrying amount of the provision for impairment of contract asset, and debit “assetimpairment loss”, credit “provision for impairment of contract asset”. On the contrary, theCompany shall recognize the difference as impairment profit and keep the oppositeaccounting record.If the actual credit loss incurred and the contract asset is unable to be collected withconfirmation, after the approval is given, the loss shall be written off based on the approvedamount and debit “provision for impairment of contract asset”, credit “contract asset”. If theamount to be written is greater than the provision, the difference shall be debited to “assetimpairment loss”.
16. Contract cost
(1) Assets recognition methods in relation to contract cost
Assets relevant to contract cost in the Company include cost to fulfill the contract and cost toobtain a contract.If the costs incurred in fulfilling a contract with a customer are not within the scope ofanother Standard, an entity shall recognize an asset from the costs incurred to fulfill a contractonly if those costs meet all of the following criteria: the costs relate directly to a contract or toan anticipated contract, including direct labor, direct materials and overheads which is clearlystated to be borne by the client and any other cost in line with the contract; the costs enhance
resources of the entity that will be used in performance obligations in the future; and the costsare expected to be recovered.An entity shall recognize an asset as the incremental costs of obtaining a contract with acustomer if the entity expects to recover those costs. An entity may recognize the incrementalcosts of obtaining a contract as an expense when incurred if the amortization period of theasset t is one year or less. The incremental costs of obtaining a contract are those costs that anentity incurs to obtain a contract with a customer that it would not have incurred if thecontract had not been obtained (for example, a sales commission). Costs to obtain a contractthat would have been incurred rather than the incremental cost expected to be recovered shallbe recognized as an expense when incurred, unless those costs are explicitly chargeable to thecustomer regardless of whether the contract is obtained
(2) Amortization of asset relevant to contract cost
An asset recognized in accordance with contract cost shall be amortized on a systematic basisthat is consistent with the transfer to the customer of the goods or services to which the assetrelates.
(3) Impairment of asset relevant to contract cost
When determining the impairment loss of the assets related to the contract cost, the Companyshall firstly determine the impairment loss of the assets related to the contract that arerecognized in accordance with the other accounting standards. If the book value of the asset ishigher than the remaining consideration expected to be obtained by the Company for thetransfer of the goods related to the asset and the estimated cost to be incurred for the transferof the goods related to the asset, the excess part shall be withdrawn as an impairmentprovision and recognized as an impairment loss of the asset.An entity shall recognize in profit or loss a reversal of some or all of an impairment losspreviously recognized when the impairment conditions no longer exist or have improved. Theincreased carrying amount of the asset shall not exceed the amount that would have beendetermined (net of amortization) if no impairment loss had been recognized previously.
17.Long-term receivable
Refer to 10. (6) Impairment of financial assets.
18. Long-term equity investment
Long term equity investments are the investment in subsidiary, in associated company and injoint venture.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 operatingactivity of 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 lessthan 50% shares with voting rights in the investee company. If holding less than 20% votingrights, the entity shall also take other facts or circumstances into accounts when judging anysignificant influences. Factors and circumstances include: representation on the board ofdirectors or equivalent governing body of the investee, participation in financial or operatingactivities policy-making processes, material transactions between the investor and theinvestee, interchange of 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 combinationunder common control, is the carrying amount presented in the consolidated financialstatements of the share of net assets at the combination date in the acquired company. If thecarrying amount of net assets at the combination date in the acquired company is negative,investment shall be recognized at zero.If the equity of investee under common control is acquired by stages and businesscombination incurs in the end, an entity shall disclose the accounting method for long-termequity investment in the parent financial statement as a supplemental. For example, if theequity of investee under common control is acquired by stages and business combinationincurs in the end, and it’s a bundled transaction, the entity shall regard all transactions as aone for accounting. If it’s not a bundled transaction, the carrying amount presented in theconsolidated financial statements of the share of net assets at the combination date in theacquired company since acquisition is determined as for the initial cost of long-term equityinvestment. The difference between the cost initially recognized and carrying amount oflong-term equity investment prior to the business combination plus the newly paidconsideration for further share acquired, and capital reserve shall be adjusted accordingly. Ifno enough capital reserve is available for adjustment, retain earnings shall 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-termequity investment in the parent financial statement as a supplemental. If the equity investmentof investee not under common control is acquired by stages and business combinationincursion the end, and it’s a bundled transaction, the entity shall regard all transactions as aone for accounting. If it’s not a bundled transaction, the carrying amount of the equityinvestment held previously plus newly increased investment cost are taken as the initialinvestment cost under cost model. If equity investment is held under equity method before theacquisition date, other comprehensive income under equity method previously shall not beadjusted accordingly. When disposing of the investment, the entity shall adopt the same basis
as the investee directly disposing of related assets or liability for accounting treatment. Priorto acquisition date, if the share is designated as non-tradable equity instrument measured atFV through other comprehensive income, the accumulated change on fair value previouslyrecorded in other comprehensive can not be transferred into current profit and loss.Apart from the long-term equity investments acquired through business combinationmentioned above, the cost of investment for the long-term equity investments acquired bycash payment is the amount of cash paid. For long-term equity investment acquired by issuingequity instruments, the cost of investment is the fair value of the equity instrument issued. Forlong-term equity investment injected to the entity by the investor, the investment cost is theconsideration as specified in the relevant contract or agreement.The Company adopts cost method to account for investment in subsidiary and equity methodfor investment in joint venture and affiliate.Long-term equity investment subsequently measured under cost model shall increase thecarrying amount of investment by adjusting the fair value of additional investment andrelevant transaction expenses. Cash dividend or profit declared by investee shall berecognized as investment gain/loss for the period based on the proportion share in theinvestee.Long-term equity investment subsequently measured under equity method shall be adjustedfor it carrying amount according to the share of equity increase or decrease in the investee.The entity shall recognize its share of the investee’s net profits or losses based on the fairvalue of the investee’s individual identifiable assets at the acquisition date, after makingappropriate adjustments thereto in conformity with the accounting policies and accountingperiod, and offsetting the unrealized profit or loss from internal transactions entered intobetween the entity and its associates and joint ventures according to the shareholdingattributable to the entity and accounted for as investment income and loss based on suchbasis.On disposal of a long-term equity investment, the difference between the carrying value andthe consideration actually received is recognized as investment income for the period. Forlong-term investments accounted under equity method, other comprehensive income recordedshall be accounted on the same basis as the investee directly disposing of related assets orliability when equity method is not used any longer. The movements of shareholder’s equity,other than the net profit or loss, other comprehensive income and profit distributionpreviously recorded in the shareholder’s equity of the Company are recycled to investmentincome for the period on disposal.Where the entity has no longer joint control or significant influence in the investee companyas a result of partially disposal of the investment, the remaining investment will be accountedfor in line with the Recognition and Measurement of Financial Instruments Standard -No 22
of Accounting Standards for Business Enterprises(No7 Caikuai [2017]), and the differencebetween the fair value of remaining investment at the date of losing joint control orsignificant influence and its carrying amount shall be recognized in the profit or loss for theyear. Other comprehensive income recognized from previous equity investment under equitymodel shall be accounted for and carried over on the same basis as the investee directlydisposing of related assets or liability when stopping using under equity model. Themovements of shareholder’s equity, other than the net profit or loss, other comprehensiveincome and profit distribution previously recorded in the shareholder’s equity of theCompany are recycled to investment income for the period on disposal.Where the entity has no longer control over the investee company as a result of partiallydisposal of the investment, the remaining investment will be changed to be accounted forusing equity method providing remaining joint control or significant influence over theinvestee company. The difference between carrying amount of disposed investment andconsideration received actually shall be recognized in the profit and loss for the period asinvestment gain or loss, and investment shall be adjusted accordingly as if it was accountedfor under equity model since acquisition. Where the entity has on longer joint control orsignificant influence in the investee as a result of disposal, the investment shall be changed tobe accounted for in accordance with the Recognition and Measurement of FinancialInstruments Standard -No 22 of Accounting Standards for Business Enterprises(No7 Caikuai[2017]), and difference between the carrying amount and disposal consideration shall berecognized in profit and loss for the period, and the difference between the fair value ofremaining investment at the date of losing control and its carrying amount shall be recognizedin the profit or loss for the year 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 losingcontrol, but the difference between disposal consideration and carrying amount of the equityinvestment disposed prior to losing control, which arises from each individual transactionshall be recognized as other comprehensive income until being transferred into profit and lossfor the period by the time of losing control.
19. Investment property
The investment property includes property, building and use right of land. They are measured atcost model.Investment property is depreciated or amortized by straight line basis and its expected useful life,net residual value rate and annual depreciation rate is as follows:
Category | Useful life | Estimated net residual value | Annual |
(years) | rate (%) | depreciation rate | |
Use right of land | 50 | 0 | 2 |
Property and Buildings | 40 | 3 | 2.43 |
20. Fixed assets
Recognition criteria of fixed assets: defined as the tangible assets which are held for thepurpose of producing goods, rendering services, leasing or for operation & management, andhave more than one year of useful life.Fixed assets shall be recognized when the economic benefit probably flows into the Companyand its cost 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 arestill being used and land is separately measured. Straight-line depreciation method is adoptedby the Company. Estimated net residual value rate, useful life, depreciation rate as follows:
No | Category | (years) | Estimated net residual value rate (%) | Annual depreciation rate(%) |
1 | Property and Buildings | 20-40 | 3、5、10 | 2.25-4.85 |
2 | Machinery equipment | 5-22 | 0.5-1、3、5、10 | 4.09-19.90 |
3 | Transportation equipment | 3-15 | 1、3、5、10 | 6-33.33 |
4 | Electronic equipment &others | 3-15 | 0-1、3、5、10 | 6-33.33 |
The Company should review the estimated useful life, estimated net residual value anddepreciation method at the end of each year. If any change has occurred, it shall be regardedas a change in the accounting estimates.
21. Construction in progress
Constructions in progress are carried down to fixed assets based on the construction budgetand actual costs on the date when completing and achieving estimated usable status, and thefixed assets should be withdrawn deprecation in the next month. Adjustment will beconducted upon confirmation of their actual values after implementing the completion andsettlement procedures.
22. Borrowing costs
The borrowing costs incurred which can be directly attribute to the fixed assets, investmentsproperties, inventories requesting over 1 year purchasing or manufacturing so to come intothe expected condition of use or available for sale shall start to be capitalized whenexpenditure for the assets is being occurred, borrowing cost has occurred, necessaryconstruction 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
of use or available for sale. The borrowing costs subsequently incurred should be recordedinto profit and loss when occurred. The borrowing costs should temporarily stop beingcapitalized when there is an unusual stoppage of over consecutive 3 months during thepurchase or produce of the capitalized assets, until the purchase or produce of the assetrestart.The borrowing costs of special borrowings, deducting the interest revenue of unusedborrowings kept in the bank or the investment income from transient investment should becapitalized. The capitalized amount of common borrowings should be calculated as follows:
average assets expenditure of the accumulated assets expenditure excesses the specialborrowing, multiplied by the capital rate. The capital rate is the weighted average rate of thecommon borrowings.
23. Right-of-use assets
An asset that represents a lessee’s right to use an underlying asset for the lease term.
(1) Initial recognition
At the commencement date, a lessee shall measure the right-of-use asset at cost.The cost of the right-of-use asset shall comprise:
① the amount of the initial measurement of the lease liability,
② any lease payments made at or before the commencement date, less any lease incentivesreceived, which is the incremental cost for the lease
③ any initial direct costs incurred by the lessee which is the incremental cost
④ an estimate of costs to be incurred by the lessee in dismantling and removing theunderlying asset, restoring the site on which it is located or restoring the underlying asset tothe condition required by the terms and conditions of the lease, unless those costs are incurredto produce inventories.
(2) Subsequent measurement
After the commencement date, a lessee shall measure the right-of-use asset applying a costmodel. To apply a cost model, a lessee shall measure the right?of?use asset at cost less anyaccumulated depreciation and any accumulated impairment losses; and adjusted for anyremeasurement of the lease liability specified in the lease standardDepreciation of right-of -use assetSince the commencement date, the Company shall depreciate the right-of-use asset.Depreciation shall be made in the month of lease commencement and shall be accounted inthe cost of related asset or profit and loss.When determining the depreciation method, straight line method is used for depreciation
based on the expected way of consuming of economic benefit related to the right-of-use asset.The Company shall follow the following principles when determining the depreciation life ofthe use-right asset: if the ownership of the leased asset can be reasonably determined at theend of the lease term, depreciation shall be calculated and deducted during the remainingservice life of the leased asset; Where it is not certain that the ownership of the leased assetcan be acquired at the end of the lease term, depreciation shall be calculated during the periodof the shorter of the lease term and the remaining service life of the leased asset.ImpairmentThe Company shall depreciate the right-of-use asset subsequently based on the book valueafter impairment loss deduction if impairment is applicable.
24. Intangible assets
The intangible assets of the Company refer to land use right and software, patent,non-patented technology and other intangible asset should be measured at actual costs. Foracquired intangible assets, the actual costs are measured at actual price paid and relevantother expenses. The cost invested into intangible assets by investors shall be determinedaccording to the stated value in the investment contract or agreement, except for those ofunfair value in the contract or agreement, which the actual costs should be determined by thefair value.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 theperiod according to the usage of the assets. At the end of the year, for definite life ofintangible assets, their estimated useful life and amortization method shall be assessed. Anychange shall be treated as change on accounting estimate.
25. Impairment of long-term assets
The Company assesses at each balance sheet date whether there is any indication thatlong-term equity investments, investment property, fixed assets, construction in progress,right-of-use assets and intangible assets with definite useful life may be impaired. If there isany indication that an asset may be impaired, the asset will be tested for impairment.Goodwill and intangible asset with infinite useful life are tested for impairment annually nomatter there is any 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 it carrying amount, the carrying amount
shall be impaired and the difference is recognized as an impairment loss and charged to profitor loss for the period. Once an impairment loss on the assets is recognized, it is not reversedin a subsequent period.After assets impairment loss is recognized, depreciation and amortization of the impairedasset shall be adjusted in the following period so that the adjusted carrying amount (lessexpected residual value) can be depreciated and amortized systematically within theremaining life.Goodwill arising in a business combination and intangible asset with infinite useful life aretested for impairment annually no matter there is any indication of impairment or not.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 andtesting the assets group or assets portfolio alone so to work out the recoverable amount andcomparing to it carrying amount and recognize the impairment loss. After that, testing theassets group or assets portfolio with goodwill together, comparing the carrying amount of theassets group or assets portfolio (including goodwill allocation) with recoverable amount,goodwill impairment shall be recognized when the recoverable amount is lower than itscarrying amount.
26. Long-term deferred expenses
Long-term deferred expenses of the Company refer to leasing expenses, redecoration expenseand others. The expenses should be amortized evenly over the beneficial period. If thedeferred expense cannot take benefit for the future accounting period, the unamortizedbalance of the deferred expenses should be transferred into the current profit or loss. Theamortization period should be determined by the contract. If the contract without theamortization period specification, leasing expenses will be amortized within 10 years and30years; redecoration expense and others will be amortized within 3 years.
27. Contract liability
An entity’s obligation to transfer goods or services to a customer for which the entity hasreceived consideration (or the amount is due) from the customer. If a customer paysconsideration, or an entity has a right to an amount of consideration that is unconditionalbefore the entity transfers a good or service to the customer, the entity shall present thecontract as a contract liability when the payment is made or the payment is due (whichever isearlier).
28. Employee benefits
Employee’s benefit comprises short-term benefit, post-employment benefit, terminationbenefit and other long-term employee’s benefit.
Short-term benefit includes salary, bonus, allowance, welfare, social insurance, housing funds,labor union expense, staff training expense, during the period in which the service renderedby the employees, the actually incurred short term employee benefits shall be recognized asliability and shall be recognized in P&L or related cost of assets based on benefit objectiveallocated from the service rendered by employees.Post-employment benefits include the basic pension scheme and unemployment insurance etc.Based on the risk and obligation borne by the Company, post-employment benefits areclassified into defined contribution plan and defined benefit plan. For defined contributionplan, liability shall be recognized based on the contributed amount made by the Company toseparate entity at the balance sheet date in exchange of employee service for the period and itshall be recorded into current profit and loss account or relevant cost of assets in accordancewith beneficial objective.Termination benefits are employee’s benefit payable as a result of either an entity’s decisionto terminate an employee’s employment before the contract due date or an employee’sdecision to accept voluntary redundancy in exchange for those benefits. An entity shallrecognize the termination benefits as a liability and an expense at the earlier date when theentity cannot unilateral withdraw the termination benefits due to employment terminationplan or due to redundancy suggestion, or when the entity can recognize the restructuring costor expense arising from 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, contributionmade shall be recognized as liabilities accordingly for the period in which the service isrendered by the employee and recognized in the profit or loss for the current period orrelevant cost of assets. Except other long-term employee’s benefit mentioned above,obligation arising from defined benefit plan shall be recognized in the profit or loss for thecurrent period or relevant cost of assets in accordance with the period when the service isrendered by the employee.
29. Lease obligation
(1) Initial measurement of the lease liability
At the commencement date, a lessee shall measure the lease liability at the present value ofthe lease payments that are not paid at that date.
1) The lease payments
The lease payments included in the measurement of the lease liability comprise the followingpayments for the right to use the underlying asset during the lease term that are not paid at the
commencement date: ① fixed payments (including in-substance fixed payments) less anylease incentives receivable;② variable lease payments that depend on an index or a rate,initially measured using the index or rate as at the commencement date;③ the exercise priceof a purchase option if the lessee is reasonably certain to exercise that option ④ payments ofpenalties for terminating the lease, if the lessee will certainly exercise an option to terminatethe lease during the lease term.⑤ amounts expected to be payable by the lessee underresidual value guarantees;
2) Discount rate
When calculating the present value of the lease payments, interest rate implicit in the leaseshall be used. The rate of interest that causes the present value of the lease payments and theunguaranteed residual value to equal the sum of the fair value of the underlying asset and anyinitial direct costs of the lessor. If the rate cannot be readily determined, the Company shalluse the lessee’s incremental borrowing rate, which is the rate of interest that a lessee wouldhave to pay to borrow over a similar term, and with a similar security, the funds necessary toobtain an asset of a similar value to the right-of-use asset in a similar economic environment.The implicit interest rate is relevant to the followings: ①the Company’s own situation:
solvency and creditability ② “borrow term”: lease term ③ “borrowed fund” amount:
lease liability amount ④“pledge condition”: nature and quality of underlying assets ⑤economic environment includes the jurisdiction in which the lessee is located, the currency ofdenomination, and when the contract was signed. The Incremental borrowing rate is derivedby the Company based on the bank lending rate and adjusted for the above factors.
(2) Subsequent measurement
After the commencement date, the Company shall measure the lease liability by: ①increasing the carrying amount to reflect interest on the lease liability; ② reducing thecarrying amount to reflect the lease payments made; ③ remeasuring the carrying amount toreflect any reassessment or lease modifications.Interest on the lease liability in each period during the lease term shall be the amount thatproduces a constant periodic rate of interest on the remaining balance of the lease liability andbe recognized as in profit or loss unless its capitalization. A constant periodic rate of interestis the discounting rate used for initial measurement of lease liability, or revised discountingrate for lease liability remeasurement because of the lease payment or lease change.
(3) Remeasurement
After the lease commencement date, lease payment shall be remeasured if the followingcircumstances incurred, and the lease liability shall be remeasured at the present value whichis based on the revised lease payment and revised discounting rate. A lessee shall recognizethe amount of the remeasurement of the lease liability as an adjustment to the right-of-use
asset. However, if the carrying amount of the right-of-use asset is reduced to zero and there isa further reduction in the measurement of the lease liability, a lessee shall recognize anyremaining amount of the remeasurement in profit or loss. ①change of in-substance fixedpayments (subject to original discounting rate) ② change of amounts expected to be payableunder residual value guarantees(subject to original discounting rate) ③ change of an indexor a rate used for future lease payments(subject to revised discounting rate) ④ change inassessment of a buy option(subject to revised discounting rate) ⑤ change in assessment of arenew option or termination option or actual situation(subject to revised discounting rate).
30. Provision
When the Company has transactions such as commitment to externals, discounting the tradeacceptance, unsettled litigation or arbitration which meets the following criterion, provisionshould 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 reliablymeasured.Provision is originally measured on the best estimate of outflow for paying off the presentobligations.When determining the best estimate, need to consider the risk, uncertainty, time value ofmonetary relevant to contingent items. If the time value of monetary is significant, the bestestimate will be determined by discounted cash outflow in the future.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 nomore than the book value of contingent liability.
31. Share based payment
An equity-settled share-based payment in exchange for the employee’s services is measuredat the fair value at the date when the equity instruments are granted to the employee. Such fairvalue during the vesting period of service or before the prescribed exercisable conditions areachieved is recognized as relevant cost or expense on a straight-line during the vesting periodbased on the best estimated quantity of exercisable equity instruments, accordingly increasecapital reserve.A cash-settled share-based payment is measured at the fair value at the date at which theCompany incurred liabilities that are determined based on the price of the shares or otherequity instruments. If it is immediately vested, the fair value of the liabilities at the date ofgrant is recognized as relevant cost or expense, and corresponding liabilities. If it isexercisable only when the vesting period of service is expired or the prescribed conditions areachieved, the fair value of liabilities undertaken by the Company are re-measured at eachbalance sheet date based on the best estimate of exercisable situation. According to the fair
value which the Company incurred liabilities, and recognizing acquired services as costs orexpenses, and adjust liabilities accordingly.The fair value of the liabilities is re-measured at each balance sheet date. Any changes arerecognized in the profit or loss for the year.If the granted equity instruments are cancelled within the vesting period (apart from thesituation where the vesting condition is not satisfied), the equity instrument shall be treated asaccelerated vesting and regarded as all share-based payment plan satisfying vesting condition,and all expense during the remaining vesting period shall be accounted at the same periodwhen the granted equity instruments are cancelled.
32. Principle of recognition and measurement of revenue
The revenue of the Company is mainly from selling goods, providing engineering installationservices.The Company shall recognize revenue when (or as) the Company satisfies a performanceobligation by transferring a promised good or service to a customer. An asset is transferredwhen (or as) the customer obtains control of that asset.If the contract includes two or more performance obligations, at the inception date of contract,the Company shall allocate the transaction price to each performance obligation identified inthe contract on a relative standalone selling price ratio basis and measure the revenue at theallocated transaction price to each performance.The transaction price is the amount of consideration to which the Company expects to beentitled in exchange for transferring promised goods or services to a customer, excludingamounts collected on behalf of third parties. The determined transaction price shall be limitedto the extent where the maximum reversal amount of revenue recognized with the leastpossibility once the uncertainty related to the variable consideration is removed. TheCompany shall recognize a refund liability if the entity receives consideration from acustomer and expects to refund some or all of that consideration to the customer. Where asignificant financing component exists in the contract, the transaction price shall be measuredat the assumed price that the payment is made by cash as the client receive the control right ofgoods or services. The difference between the promised consideration and the cash sellingprice shall be amortized within the contract period at effective interest rate. The Companyneed not take the financing component into the consideration if the entity expects, at contractinception, that the period between when the entity transfers a promised good or service to acustomer and when the customer pays for that good or service will be one year or less.When the Company transfers control of a good or service over time, it satisfies a performanceobligation and recognizes revenue over time only if one of the following criteria is met,otherwise it shall be the performance obligation at a point in time.
(1) the customer simultaneously receives and consumes the benefits provided by the entity’sperformance as the entity performs
(2) the Company’s performance creates or enhances an asset (for example, work in progress)that the customer controls as the asset is created or enhanced
(3) the entity’s performance does not create an asset with an alternative use to the entity andthe entity has an enforceable right to payment for performance completed to dateIf it is performance obligation over time, the Company shall recognize the revenue inaccordance with the progress of performance obligation and measure the progress based oninput method. In the circumstances, the Company may not be able to reasonably measure theprogress of a performance obligation, but the Company expects to recover the costs incurredin satisfying the performance obligation. In those circumstances, the entity shall recognizerevenue only to the extent of the costs incurred until such time that it can reasonablymeasure the progress of the performance obligation.It satisfies a performance obligation at a point in time when the control right of goods orservices are received by the client, and revenue shall be recognized. Judging whether theclient has received the control right, the following indicators shall be considered:
(1) The entity has a present right to payment for the asset
(2) The legal title to the asset has been transferred to the customer
(3) The Company has transferred physical possession of the asset to the client
(4) The Company has transferred the significant risks and rewards of ownership of an asset
to the customer
(5) The customer has accepted the goods or service
The right of receiving the consideration the Company entitled to, as the goods or servicehave been transferred, shall be listed as contract asset and impairment provision shall bebased on the expected credit loss. Unconditioned right of receiving the consideration shall belisted as receivable. The obligation shall be listed as contract liability where the Companyhas received consideration, but services or goods not transferred to the customer.
33. Government grants
The Company’s government grant includes assets-related government grants andincome-related government grants. Assets-related government grant is the government fundobtained by the Company for the purpose of long-term assets purchase and construction orestablishment in the other forms. Income-related grants are the grant given by thegovernment apart from the assets-related grants. If no grant objective indicated clearly in thegovernment documents, the Company shall judge it according to the principle mentionedabove.
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 orconclusive evidence indicates relevant conditions for financial support are met and expect toprobably receive the fund, it is measured at the amount receivable. Where a governmentgrant is in the form of a transfer of non-monetary asset, it is measured at fair value. If fairvalue cannot be determined reliably, it is measured at a nominal amount of RMB1 Yuan.Assets-related government grants are recognized as deferred income or directly offsettingthe book value of the asset, and Assets-related government grants recognized as deferredincome shall be evenly amortized to profit or loss over the useful life of the related asset.Any assets are sold, transferred, disposed of or impaired earlier than their useful life expireddate, the remaining balance of deferred income which hasn’t been allocated shall be carriedforward to the income statement when the assets are disposed of.Income-related government grants that is a compensation for related expenses or losses to beincurred in subsequent periods are recognized as deferred income and credited to therelevant period when the related expenses are incurred. Government grants relating tocompensation for related expenses or losses already incurred are charged directly to theprofit or loss for the period. Government grants related to daily business, shall be recognizedas other income in accordance with business nature or offsetting related expenses, otherwise,shall be recognized as non-operating income or 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 shallbe adjusted,
2) if any deferred income, book value of deferred income shall be offset, excessive portionshall be accounted into income statement,
3) Other situation, it shall be accounted into income statement directly.
34. Deferred tax assets and deferred tax liabilities
The deferred income tax assets or the deferred income tax liabilities should be recognizedaccording to the differences (temporary difference) between the carrying amount of the assetsor liabilities and its tax base. Deferred income tax assets shall be respectively recognized fordeductible tax losses that can be carried forward in accordance with tax law requirements fordeduction of taxable income in subsequent years. No deferred income tax liabilities shall berecognized for any temporary difference arising from goodwill initially recognition. Nodeferred income tax assets or liabilities shall be recognized for any difference arising fromassets or liabilities initial recognition on non-business combination with no effect on eitheraccounting profit or taxable profit (or deductible tax loss). At the balance sheet date, deferred
income tax assets and deferred income tax liabilities are measured at the tax rates that areexpected to apply to the period when the asset is realized or liability is settled.Deferred income tax assets are recognized to the extent that it is probable that future taxableprofit will be available to offset the deductible temporary difference, deductible loss and taxreduction.
35. Lease
(1) Lease identification
Lease: A contract, or part of a contract, that conveys the right to use an asset (the underlyingasset) for a period of time in exchange for consideration. At inception of a contract, the entityshall assess whether the contract is, or contains, a lease. A contract is, or contains, a lease ifthe contract conveys the right to control the use of an identified asset for a period of time inexchange for consideration. In order to confirm whether the right to control the use of anidentified asset for a period of time has been conveyed, the Company assess whether theclient in the contract has the right to obtain substantially all of the economic benefits from useof the asset throughout the period of use and has the right to direct the use of the identifiedasset during the period of using the identified asset.For a contract that is, or contains several leases, the Company shall separate the contract andaccount each lease separately. The Company shall account for each lease componentseparately from non-lease components of the contract if the contract contains lease andnon-lease components.
(2) As a leasee
1) Recognition
At the commencement date, the Company as a lessee shall recognize a right-of-use asset anda lease obligation. Recognition and measurement of right-of-use asset and a lease obligationis referred to 23. Right-of -use asset and 29. Lease obligation
2) Lease modification
Lease modification is a change in the scope of a lease, or the consideration for a lease, thatwas not part of the original terms and conditions of the lease (for example, adding orterminating the right to use one or more underlying assets, or extending or shortening thecontractual lease term). Lease modification effective date is the date when both parties agreeto a lease modification.The Company shall account for a lease modification as a separate lease if both condition aresatisfied: ① the modification increases the scope of the lease by adding the right to use oneor more underlying assets or extending the contractual lease term. ② the consideration forthe lease increases by an amount commensurate with the stand-alone price for the increase in
scope or the contractual lease term extension and any appropriate adjustments to thatstand-alone price to reflect the circumstances of the particular contract.For a lease modification that is not accounted for as a separate lease, at the effective date ofthe lease modification the Company shall: allocate the consideration in the modified contract;determine the lease term of the modified lease and remeasure the lease liability bydiscounting the revised lease payments using a revised discount rate. The Company used theinterest rate implicit in the lease for the remainder of the lease term as discounting rate. Thelessee’s incremental borrowing rate at the effective date of the modification will be used if theinterest rate implicit in the lease cannot be readily determined. The effect on aboveadjustments of lease liability shall be accounted respectively in accordance with thefollowings: ①decreasing the carrying amount of the right-of-use asset to reflect the partial orfull termination of the lease for lease modifications that decrease the scope of the lease. Thelessee shall recognize in profit or loss any gain or loss relating to the partial or fulltermination of the lease. ② making a corresponding adjustment to the right-of-use asset forall other lease modifications.
3) Short-term lease and low value asset lease
The Company has chosen not to recognize the right-of-use asset and lease liability forshort-term lease ( lease term less than 12 months) and low value asset when it is single leasednew asset. In this case, lease payment will be accounted directly in profit or loss or on thestraight-line basis in profit or loss.
(3) As a lessor
Based on the assessment of (1) lease contract or lease contract contained, as a lessor, at theinception date, lease is classified as finance lease and operating lease.A lease is classified as a finance lease if it transfers substantially all the risks and rewardsincidental to ownership of an underlying asset. Other lease is classified as an operating leaseunless a finance lease.Examples of situations that individually or in combination would normally lead to a leasebeing classified as a finance lease are: ①the lease transfers ownership of the underlying assetto the lessee by the end of the lease term; ②the lessee has the option to purchase theunderlying asset at a price that is expected to be sufficiently lower than the fair value at thedate the option becomes exercisable for it to be reasonably certain, at the inception date, thatthe option will be exercised; ③the lease term is for the major part of the economic life of theunderlying asset even if title is not transferred(not shorter than 75% of leased asset life); ④at the inception date, the present value of the lease payments amounts to at least substantiallyall of the fair value of the underlying asset( not lower than 90% of leased asset FV); ⑤ theunderlying asset is of such a specialized nature that only the lessee can use it without major
modifications. Indicators of situations that individually or in combination could also lead to alease being classified as a finance lease are: ①if the lessee can cancel the lease, the lessor’slosses associated with the cancellation are borne by the lessee; ②gains or losses from thefluctuation in the fair value of the residual accrue to the lessee; ③the lessee has the ability tocontinue the lease for a secondary period at a rent that is substantially lower than market rent.
1) Financing lease
Initial measurementAt the commencement date, the Company shall recognize the lease payment receivable andderecognize of finance lease asset. When initially measuring the lease payment receivable, netlease investment value shall be used for the lease payment receivable.Net lease investment value equals to the any residual value guarantees plus the PV of unduelease receivable discounted at the interest rate implicit in the lease. Lease receivable is thatlessor conveys the right to use an asset (the underlying asset) for a period of time in exchangefor consideration including ① fixed payments (including in-substance fixed payments) lessany lease incentives receivable;② variable lease payments that depend on an index or a rate,initially measured using the index or rate as at the commencement date;③ the exercise priceof a purchase option if the lessee is reasonably certain to exercise that option ④ payments ofpenalties for terminating the lease, if the lessee will certainly exercise an option to terminatethe lease during the lease term.⑤ residual value guarantees expected by the lessee and theindependent 3
rd
party relevant to the lessee with the economic ability to guarantee.Subsequent measurementThe Company shall recognize interest income over the lease term based on a constantperiodic rate, which is the implicit discounting rate of return on the lessor’s net investment inthe lease.( if sublease applicable, implicit rate of sublease can not be determined, originaldiscounting rate of lease shall be adopted after adjustment for initial direct expense relevant tosublease) or when finance lease modification is not accounted as an separate lease, adjusteddiscounting rate will be adopted for the lease since it is classified as finance lease assumingmodification took effect at the commencement date of lease.Lease modificationThe Company shall account for a finance lease modification as a separate lease if bothcondition are satisfied: ① the modification increases the scope of the lease by adding theright to use one or more underlying assets. ② the consideration for the lease increases by anamount commensurate with the stand-alone price for the increase in scope or the contractuallease term extension and any appropriate adjustments to that stand-alone price to reflect thecircumstances of the particular contract.
For a finance lease modification that is not accounted for as a separate lease, if the leasewould have been classified as an operating lease and the modification have been in effect atthe inception date, the lessor shall account for the lease modification as a new lease from theeffective date of the modification; and measure the carrying amount of the underlying asset asthe net investment in the lease immediately before the effective date of the lease modification.
2) Operating lease
Lease incomeLease payment received shall be recognized as lease income on a straight-line basis within theperiod.Incentive measuresIf the lease-free period is provided, the Company will allocate the total lease income in thewhole lease period on the straight-line basis regardless of lease-free period, and the leaseincome shall be recognized during the rent-free period. If the Company bears some expensesof the lessee, such expenses shall be deducted from the total lease income and the remainingbalance of lease income shall be allocated within the lease period.Initial direct expenseThe Company shall add initial direct costs incurred in obtaining an operating lease to thecarrying amount of the underlying asset and recognize those costs as an expense over thelease term on the same basis as the lease income.DepreciationThe depreciation policy for depreciable underlying fixed assets subject to operating leasesshall be consistent with the lessor’s normal depreciation policy for similar assets.Amortization for other underlying assets subject to operating lease shall be on reasonablesystematic basis.Variable lease paymentThe variable lease payments obtained by the Company related to operating leases, which arenot included in the lease payment received, shall be included in the current profit and losswhen actually incurredOperating lease modificationA lessor shall account for a modification to an operating lease as a new lease from theeffective date of the modification, considering any prepaid or accrued lease payments relatingto the original lease as part of the lease payments for the new lease.
(4) Special lease
Sales and lease back
1) as a seller and a leasee
In accordance with Revenue Standard-No.14 of Accounting Standards for BusinessEnterprises, the Company assesses whether the transfer of the asset is a sale. If the transfer ofassets is not a sale, the Company shall continue to recognize the transferred assets and at thesame time recognize a financial liability equal to the transfer income, and recognize, measurethe financial liability in accordance with the Recognition and Measurement of FinancialInstruments Standard- No. 22 - Accounting Standards for Business Enterprises. If the transferof assets is a sale, the Company shall measure the right-of-use asset arising from theleaseback at the proportion of the previous carrying amount of the asset that relates to theright of use retained by the Company. Accordingly, the Company shall recognize only theamount of any gain or loss that relates to the rights transferred to the buyer-lessor.
2) as a buyer and a lessor
If the transfer of assets is not a sale, the Company shall not recognize the transferred asset andshall recognize a financial asset equal to the transfer proceeds. It shall account for thefinancial asset applying Recognition and Measurement of Financial Instruments Standard- No.22 - Accounting Standards for Business Enterprises. If the transfer of assets is a sale, theCompany shall account for the purchase of the asset applying applicable Standards.
36. Discontinued operation
When meeting any one of the following criteria, the component can be identified separatelyand the component has already been disposed of or classified as held for sale: (1) thecomponent represents one independent main business or one single main business area; (2)the component plans to be part of the related plan which represents one independent mainbusiness or one single main business area; (3) the component was specially acquired forresale
37. Other significant accounting policies, accounting estimates
When preparing the financial statements, the management needs to use accounting estimateand assumption, which will have effect on the application of accounting policy and amount ofasset, liability, income and expense. The actual circumstance maybe differs from the estimates.The management needs to continuously assess the key assumption involved by estimate andthe judgment on uncertainty. Effect on the accounting estimate shall be recognized during theperiod when 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 financial instrument
The Company uses expected credit loss model to assess any impairment of financial asset.
When applying expected credit loss model, the Company shall take all necessary factors intoaccount as requested such as significant judgment, estimate and all reasonable andsupportable information including forward looking information. Repayment history inconjunction with economic policy, macro environment ratio, industry and sector risk etc. shallalso be considered when judging expected change of debtor’s credit risk.
(2) Provision of inventory impairment
Inventory is periodically evaluated at the net realizable value and any cost higher than NRVshall be recognized as inventory impairment loss. When evaluating the NRV, net realizablevalue is determined by deducting the expected selling expense and relative tax from theestimated selling price. When actual selling price or cost differs from the previous estimates,management will make adjustment on NRV. Therefore, the results based on the presentexperience may differ from the actual results, which caused the adjustment on the carryingamount of inventory in the book. Provision for inventory impairment may vary with theabove reasons. Any adjustment on provision for inventory impairment will affect the incomestatement.
(3) Provision of goodwill impairment
Each year, goodwill shall be assessed for any impairment. Recoverable amount of assetsgroup or asset portfolio including goodwill shall be the present value of future cash flow,which needs estimates 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 themargin applied, the impairment is required.If management adjust the discounting rate before tax applied by the present value of futurecash flow calculation of assets group or asset portfolio, adjusted discounting rate before tax ishigher than 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 cannot be reversed.
(4) Provision of fixed asset impairment
At the balance sheet date, the management shall implement impairment test on buildings,plant and machinery etc. which has any impairment indicator. The recoverable amount of FAis the higher of PV of future cash flow and net value of fair value after disposal cost, thecalculation needs 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 themargin applied, the impairment is required.
If management adjust the discounting rate before tax applied by the present value of futurecash flow calculation of assets group or asset portfolio, adjusted discounting rate before tax ishigher than 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 cannot be reversed.
(5) Recognition of deferred tax assets
Estimate on deferred tax assets needs making estimation of taxable income and applied taxrate in the following years in future. Whether deferred tax asset can be realized depends onthe enough probable taxable profit obtained in future. Tax rate change in future and the timingof temporary difference reverse may also affect the income tax expense(income)and thebalance of deferred tax. Any change of estimate described here will cause the deferred taxadjustment.
38. Changes in Accounting Policies, Accounting Estimates
(1) Change in significant accounting policies
Changes on accounting policy and reasons | Memo |
In December 2021, the Ministry of Finance released “No.15 Interpretation of Accounting Standards for Business Enterprises"(No35 Caikuai [2021]) (hereinafter referred to as “No.15 Interpretation”). "Accounting of products or by-products produced before fixed assets reach the expected condition for use or during research and development stage” and "Judgment on loss-making contracts" shall come into force as of January 1, 2022. The Company shall execute from the prescribed date. | Note |
Note: In December 2021, the Ministry of Finance released “No.15 Interpretation ofAccounting Standards for Business Enterprises", the Company follows the requirement of"Accounting of products or by-products produced before fixed assets reach the expectedcondition for use or during research and development stage” and "Judgment on loss-makingcontracts" since January 1, 2022.A: accounting for sales during trial periodNo.15 Interpretation gives an explicit accounting and presentation explanation about productsor by-products produced before fixed assets reach the expected condition for use or duringresearch and development stage, and prohibits offsetting cost of fixed assets or R&Dexpenses by net amount, which sales during trial periods less cost of sales. This regulationtakes effect from January 1, 2022, any sales during trial periods between earliest reportingperiod and January 1,2022, retrospective adjustment is required.B: Judgment on loss-making contracts
No.15 Interpretation gives an explicit explanation about loss-making contract. When judginga contract is a loss-making contract or not, “cost to fulfil the contract” shall includeincremental cost and allocation of other direct cost in respect of fulfilling the contract. It isapplicable to the contact, in which all obligations have not been fulfilled until January 1, 2022,and accumulated effect shall be adjusted in opening figures of retain earning and respectiveaccount in the reporting year when it takes effect. No retrospective adjustment is needed forprior periods comparatives.
(2) Changes in significant accounting estimates
No.V. Taxation
1. The main applicable tax and rate to the Company as follows:
Tax | Tax base | Tax rate |
Value-added tax (VAT) | Sales revenue or Purchase | 5%、6%、9%、13%、 |
City construction tax | Value-added tax payables | 7% |
Education surcharge | Value-added tax payables | 3% |
Local education surcharge | Value-added tax payables | 2% |
Enterprise income tax(EIT) | Current period taxable profit | 15% or 25% |
Real estate tax | 70% of cost of own property or revenue from leasing property | 1.2% or 12% |
Land use tax | Land using right area | Fixed amount per square meter |
Other tax | According to the relevant provisions of the state and local |
Notes for tax entities with different EIT rate
Tax entities | EIT rate |
Bingshan Refrigeration & Heat Transfer Technologies Co. ,Ltd | 15% |
Dalian Bingshan Group Engineering Co., Ltd. | 25% |
Dalian Bingshan Group Sales Co., Ltd. | 25% |
Dalian Bingshan Air-conditioning Equipment Co., Ltd. | 15% |
Dalian Bingshan Guardian Automation Co., Ltd. | 15% |
Dalian Bingshan-RYOSETSU Quick Freezing Equipment Co., Ltd. | 25% |
Wuhan New World Refrigeration Industrial Co., Ltd. | 15% |
Dalian Bingshan Engineering & Trading Co., Ltd | 25% |
Dalian Universe Thermal Technology Co.,Ltd. | 15% |
Chengdu Bingshan Refrigeration Engineering Co., Ltd. | 25% |
Tax entities | EIT rate |
Wuhan New World Air-conditioning Refrigeration Engineering Co., Ltd | 25% |
Wuhan Lanning Energy Technology Co., Ltd | 25% |
Sonyo Compressor(Dalian)Co.,Ltd. | 15% |
Sonyo Refrigeration System (Dalian) Co., Ltd. | 15% |
2. Tax preference
(1) The Company obtained the qualification of high and new technology enterprises on 3
rd
December, 2020 approved by Dalian Science Technology Bureau, Dalian Finance Bureau,Dalian State Tax Bureau and Local tax Bureau. The Certificate No. is GR202021200646, andthe validity duration is three years. According to the tax law, the Company can be granted forthe preferential tax policy of enterprise income tax rate of 15% in three years.The Company’s subsidiary, Dalian Bingshan Air-conditioning Equipment Co., Ltd. obtainedthe qualification of high and new technology enterprises on 3
rd
December, 2020 approved byDalian Science Technology Bureau, Dalian Finance Bureau, Dalian State Tax Bureau andLocal tax Bureau. The Certificate No. is GR202021200672, and the validity duration is threeyears. According to the tax law, 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 Guardian Automation Co., Ltd. obtained thequalification of high and new technology enterprises on 15
th
December, 2021 approved byDalian Science Technology Bureau, Dalian Finance Bureau, Dalian State Tax Bureau andLocal tax Bureau. The Certificate No. is GR202121200765, and the validity duration is threeyears. 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, Wuhan New World Refrigeration Industrial Co., Ltd obtained thequalification of high and new technology enterprises on 15
th
November, 2021 approved byHubei Science Technology Bureau, Hubei Finance Bureau, Hubei State Tax Bureau and HubeiLocal tax Bureau. The Certificate No. is GR202142001696, and the validity duration is threeyears. 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 Universe Thermal Technology Co.,Ltd. obtained thequalification of high and new technology enterprises on 3
rd
December, 2020 approved byDalian Science Technology Bureau, Dalian Finance Bureau, Dalian State Tax Bureau andLocal tax Bureau. The Certificate No. is GR202021200570, and the validity duration is threeyears. According to the tax law, the Company can be granted for the preferential tax policy ofenterprise income tax rate of 15% in three years.The Company’s subsidiary, Sonyo Compressor(Dalian)Co.,Ltd.(hereinafter referred to
as“ Sonyo Compressor” obtained the qualification of high and new technology enterprises on
ndOctober, 2021 approved by Dalian Science Technology Bureau, Dalian Finance Bureau,Dalian State Tax Bureau and Local tax Bureau. The Certificate No. is GR202121200268, andthe validity duration is three years. According to the tax law, the Company can be granted forthe preferential tax policy of enterprise income tax rate of 15% in three years.The Company’s subsidiary, Sonyo Refrigeration System (Dalian) Co., Ltd.(hereinafter referredto as“ Sonyo Refrigeration System” obtained the qualification of high and new technologyenterprises on 9
thOctober, 2020 approved by Dalian Science Technology Bureau, DalianFinance Bureau, Dalian State Tax Bureau and Local tax Bureau. The Certificate No. isGR202021200465, and the validity duration is three years. According to the tax law, theCompany can be granted for the preferential tax policy of enterprise income tax rate of 15% inthree years.
(2) According to the Announcement of Ministry of Science and Technology, the Ministry ofFinance and Tax Administration on supporting Scientific and Technological Innovation by theaccelerate Pre-tax Deduction (Announcement No. 28, 2022), equipment and appliances newlypurchased by high and new technology entity within the period from October 1
st, 2022 toDecember 31
st,2022 are allowed for taxable income deduction in full amount and also can be100% accelerated deduction before income tax. Any entity qualifying for high and newtechnology during the Q4 in 2022 is subject to this tax preference. If deduction is not enoughfor this year, it can be carried forward to the following year. Equipment and appliances refer tofixed assets beyond house and buildings. High and new technology criteria is in line with“Notice of the Ministry of Science and Technology and the Ministry of Finance and the StateAdministration of Taxation on Revising and Printing the Administrative Measures for theIdentification of New and High Technology Enterprises” (Guokefahuo[2016]No.32). TheCompany and its subsidiaries, Dalian Universe Thermal Technology Co.,Ltd, SonyoCompressor and Sonyo Refrigeration System enjoy the tax preference.VI. Notes to Consolidated Financial StatementsThe following disclosure date on this financial statement without special indication, “opening”refers to January 1, 2022; “closing” refers to December 31, 2022; “current period” refers to theperiod from January 1, 2022 to December 31, 2022; and “last period” refers to the period fromJanuary 1, 2021 to December 31, 2021; with the currency unit RMB.
1. Monetary fund
Item | Closing Balance | Opening Balance |
Cash on hand | 80,702.47 | 99,580.64 |
Cash in bank | 922,122,608.84 | 443,177,237.30 |
Other cash and cash equivalents | 83,962,587.87 | 79,381,687.85 |
Total | 1,006,165,899.18 | 522,658,505.79 |
Item | Closing Balance | Opening Balance |
Including: sum of deposits overseas |
Monetary fund restricted for use
Item | Closing Balance | Opening Balance |
deposit for bank acceptance notes | 48,567,322.04 | 64,672,285.64 |
guarantee deposit | 33,697,941.99 | 14,438,026.76 |
peasant worker deposit | 729,341.30 | 271,375.45 |
Frozen account | 550,487.90 | 4,307,480.07 |
interest receivable from bank | 959,002.78 | - |
Total | 84,504,096.01 | 83,689,167.92 |
Note: frozen account is the amount frozen by the bank due to litigation of 94,500.00 Yuan, longage frozen account of 209,197.14 Yuan, ETC deposit of 2,000.00Yuan, unused account for longtime of 244,790.76 Yuan.
2. Notes receivable
(1) Category of notes receivable
Items | Closing Balance | Opening Balance |
Bank acceptance notes | 493,019,785.95 | 163,956,682.86 |
Trade acceptance notes | 12,925,475.23 | 2,473,682.88 |
Total | 505,945,261.18 | 166,430,365.74 |
(2) Pledged notes receivable up to the end of year.
Items | Closing pledged amount |
Bank acceptance notes | 98,917,384.72 |
Total | 98,917,384.72 |
(3) Notes receivable endorsed or discounted but not mature at the end of year
Item | Closing amount no more recognized | Closing amount still recognized |
Bank acceptance notes | 137,214,397.88 | |
Trade acceptance notes | 2,505,534.77 | |
Total | 139,719,932.65 |
(4) There is no transfer to receivable as the drawer’s default of performance of obligation
(5) Categories according to bad debts provision
Items | Closing Balance | ||||
Booking balance | Provision | Booking value | |||
Amount | % | Amount | % | ||
Bad debts provision based on group | 506,921,135.95 | 100.00 | 975,874.77 | 0.19 | 505,945,261.18 |
Including: bank acceptance notes | 493,019,785.95 | 97.26 | - | - | 493,019,785.95 |
Trade acceptance notes | 13,901,350.00 | 2.74 | 975,874.77 | 7.02 | 12,925,475.23 |
Total | 506,921,135.95 | 100.00 | 975,874.77 | 0.19 | 505,945,261.18 |
(Continued)
Items | Opening balance | ||||
Booking balance | Provision | Booking value | |||
Amount | % | Amount | % | ||
Bad debts provision based on group | 166,617,129.06 | 100.00 | 186,763.32 | 0.11 | 166,430,365.74 |
Including: bank acceptance notes | 163,956,682.86 | 98.40 | - | - | 163,956,682.86 |
Trade acceptance notes | 2,660,446.20 | 1.60 | 186,763.32 | 7.02 | 2,473,682.88 |
Total | 166,617,129.06 | 100.00 | 186,763.32 | 0.11 | 166,430,365.74 |
Categories based on group
Items | Closing Balance | ||
Booking balance | Provision | Provision(%) | |
Trade acceptance notes | 13,901,350.00 | 975,874.77 | 7.02 |
Total | 13,901,350.00 | 975,874.77 | 7.02 |
(6) Bad debt provision of notes receivable accrued, collected and reversed
Category | Opening balance | Change during the year | Closing Balance | ||
Accrued | reversed | Written-off | |||
Bad debt provision | 186,763.32 | 789,111.45 | - | - | 975,874.77 |
Total | 186,763.32 | 789,111.45 | - | - | 975,874.77 |
(7) Notes receivable written off: none
3. Accounts receivable
(1) Category of accounts receivable based on bad debt provision method
Items | Closing Balance | ||||
Booking balance | Provision | Booking value | |||
Amount | % | Amount | % | ||
Bad debt provision on individual basis | 13,181,314.30 | 0.69 | 10,348,880.50 | 78.51 | 2,832,433.80 |
Bad debt provision on group | 1,888,715,925.40 | 99.31 | 481,569,916.25 | 25.50 | 1,407,146,009.15 |
Including: aging as characteristics of credit risk | 1,888,715,925.40 | 99.31 | 481,569,916.25 | 25.50 | 1,407,146,009.15 |
Total | 1,901,897,239.70 | 100.00 | 491,918,796.75 | 25.86 | 1,409,978,442.95 |
(Continued)
Items | Opening balance | ||||
Booking balance | Provision | Booking value | |||
Amount | % | Amount | % | ||
Bad debt provision on individual basis | - | - | - | - | - |
Bad debt provision on group | 1,193,312,546.52 | 100.00 | 371,763,867.67 | 31.15 | 821,548,678.85 |
Including: aging as characteristics of credit risk | 1,193,312,546.52 | 100.00 | 371,763,867.67 | 31.15 | 821,548,678.85 |
Total | 1,193,312,546.52 | 100.00 | 371,763,867.67 | 31.15 | 821,548,678.85 |
1) Bad debt provisions on individual basis
Name | Closing Balance | |||
Accounts receivable | Provision for bad debts | (%) | Reason | |
SNSL | 6,032,000.00 | 4,780,096.20 | 79.25 | Enforcement has been applied for and full recovery is not expected |
Chishui Nong Shang LV | 4,686,819.40 | 3,106,289.40 | 66.28 | Enforcement has been applied for and full recovery is not expected |
Mudanjiang Zhongnong | 914,911.20 | 914,911.20 | 100.00 | It has been preserved by litigation |
Name | Closing Balance | |||
Accounts receivable | Provision for bad debts | (%) | Reason | |
Batch Cold Chain Logistics Co. LTD | and is not expected to be recovered | |||
YIDU(SY)Cold Chain Logistics Evolution Co.,Ltd. | 635,135.70 | 635,135.70 | 100.00 | Anticipate changes in customer credit risk |
Qingyang Haiyue Agriculture Co Ltd | 585,000.00 | 585,000.00 | 100.00 | not expected to be recovered |
Qingdao Langjin New Energy Equipment Co., LTD | 327,448.00 | 327,448.00 | 100.00 | Anticipate changes in customer credit risk |
Total | 13,181,314.30 | 10,348,880.50 | — |
2) Bad debt provisions on group basis
Aging | Closing Balance | ||
Accounts receivable | Provision for bad debts | (%) | |
Within 1 year | 1,048,630,821.83 | 63,459,092.57 | 6.05 |
1 to 2 years | 266,551,896.68 | 44,618,132.56 | 16.74 |
2 to 3 years | 186,130,798.76 | 57,384,125.25 | 30.83 |
3 to 4 years | 64,509,549.01 | 31,822,560.52 | 49.33 |
4 to 5years | 138,624,250.54 | 100,017,396.77 | 72.15 |
Over 5 years | 184,268,608.58 | 184,268,608.58 | 100.00 |
Total | 1,888,715,925.40 | 481,569,916.25 | — |
(2) Receivable listed by aging
Aging | Closing Balance |
Within 1 year | 1,051,342,084.70 |
1 to 2 years | 271,031,036.91 |
2 to 3 years | 187,045,709.96 |
3 to 4 years | 69,585,549.01 |
4 to 5years | 138,624,250.54 |
Over 5 years | 184,268,608.58 |
Total | 1,901,897,239.70 |
(3)Bad debt provision of current period
Category | Opening balance | Change during the year | Closing Balance | |||
Accrued | reversed | Written-off | Others | |||
Bad debt provision | 371,763,867.67 | 77,384,660.21 | - | 18,057,656.88 | 60,827,925.75 | 491,918,796.75 |
Total | 371,763,867.67 | 77,384,660.21 | - | 18,057,656.88 | 60,827,925.75 | 491,918,796.75 |
Note: others are from consolidation of Sonyo Compressor & Sonyo Refrigeration System.Bad debt provision of Sonyo Compressor comes in 140,091.75 Yuan, Sonyo RefrigerationSystem comes in 65,198,433.11Yuan, Bingshan Technology Service (Dalian) Co., Ltd. Goesout 4,145,388.71Yuan with disposal.
(4) Accounts receivable written off in current period
Item | Written off amount |
Receivable actually written off | 18,057,656.88 |
Key debtors written off
Company name | Nature | Amount | Reason | Procedures | Related party |
Haozhou Xinnong Market Real Estate Co. Ltd | Construction | 3,360,000.00 | bankruptcy and unexpected to be recovered | Board meeting | N |
Beijing Bingshan Refrigeration and Air Conditioning Equipment Co., Ltd | Trade receivable | 3,121,952.83 | deregistration | Board meeting | Y |
Anyang Zhongpin Food Industry Co.,Ltd. | Trade receivable | 1,620,000.00 | bankruptcy and Insolvency | CEO approval | N |
Hebei Hongdao Technology Co.,Ltd. | Trade receivable | 1,257,965.20 | client unable to pay | Board meeting | N |
Sanhui Food Logistics (Tianjin) Co., LTD | Trade receivable | 1,189,926.00 | going concern and unable to pay | Board meeting | N |
Chengdu Yinli Refrigerated Logistics Co., LTD | Construction | 1,180,000.00 | unexpected to be recovered | Board meeting | N |
Qingdao Haihe Engineering Co.,Ltd. | Trade receivable | 903,000.00 | going concern and unable to pay | Board meeting | N |
Tianjin Jitai | Trade | 574,259.50 | unexpected to | Internal | N |
Company name | Nature | Amount | Reason | Procedures | Related party |
Technology Co., LTD | receivable | be recovered | approval | ||
Cofco Meat (Jiangsu) Co., LTD | Construction | 75,000.00 | unexpected to be recovered | Board meeting | N |
Sino-Aus Dubbo Donghai Agricultural and Livestock Development Co.,Ltd. | Construction | 75,000.00 | unexpected to be recovered | Board meeting | N |
Total | — | 13,357,103.53 | — | — | — |
(5) Based on closing balance ranking, sum of the top five significant debtors are265,356,886.44 Yuan, representing 13.95% of total receivables at the year end.48,505,073.26Yuan bad debt provision is provided respectively.
4. Finance receivable
Items | Closing Balance | Opening Balance |
Notes receivable | 58,792,792.70 | 43,704,310.38 |
Total | 58,792,792.70 | 43,704,310.38 |
5. Prepayments
(1) Aging of prepayments
Items | Closing Balance | Opening Balance | ||
Amount | Percentage (%) | Amount | Percentage (%) | |
Within 1 year | 143,894,431.33 | 83.66 | 146,457,045.63 | 80.16 |
1 to 2 years | 18,707,868.78 | 10.88 | 16,304,629.82 | 8.92 |
2 to 3 years | 4,457,439.74 | 2.59 | 12,765,104.33 | 6.99 |
Over 3 years | 4,931,728.27 | 2.87 | 7,174,623.77 | 3.93 |
Total | 171,991,468.12 | 100.00 | 182,701,403.55 | 100.00 |
No significant prepayments over 1 year
(2) Sum of top 5 prepayment debtors ranking by closing balance is 68,363,483.47Yuan,representing 39.75% of total of closing balance.
6. Other receivables
Items | Closing Balance | Opening Balance |
Interest receivable | - | - |
Items | Closing Balance | Opening Balance |
Dividend receivable | 14,495.00 | 1,003,568.75 |
Other receivables | 51,379,979.24 | 59,336,527.70 |
Total | 51,394,474.24 | 60,340,096.45 |
6.1. Dividends receivable
(1) Classification
Company | Closing Balance | Opening Balance |
Guotai Junan Securities | - | 952,000.00 |
Wuhan Steel and Electricity Co., Ltd. | 14,495.00 | 51,568.75 |
Total | 14,495.00 | 1,003,568.75 |
6.2. Other receivables
(1) The categories of other receivable according to nature
Items | Closing Balance | Opening Balance |
Receivables and payables | 38,051,147.58 | 36,138,235.04 |
Security deposit | 37,147,665.19 | 26,933,345.60 |
Petty cash | 5,099,052.90 | 5,654,074.94 |
Others | 6,088,641.82 | 1,609,350.55 |
Total | 86,386,507.49 | 70,335,006.13 |
(2) The bad debt provision of other receivables
Bad debt provision | 1st stage | 2nd stage | 3rd stage | Total |
Expected credit loss within 12 months | Expected credit loss within the whole period (no impairment) | Expected credit loss within the whole period (impairment incurred) | ||
Opening balance | 6,828,531.31 | - | 4,169,947.12 | 10,998,478.43 |
Opening balance during the year | — | — | — | — |
--transfer to the 2nd stage | - | - | - | - |
--transfer to the 3rd stage | -3,925,916.10 | - | 3,925,916.10 | - |
--reverse to the 2nd stage | - | - | - | - |
Bad debt provision | 1st stage | 2nd stage | 3rd stage | Total |
Expected credit loss within 12 months | Expected credit loss within the whole period (no impairment) | Expected credit loss within the whole period (impairment incurred) | ||
----reverse to the 1st stage | - | - | - | - |
Accrued | - | - | 4,442,806.03 | 4,442,806.03 |
Reverse | 422,578.76 | - | - | 422,578.76 |
Cancelation | - | - | - | - |
Written off | 320,775.00 | - | - | 320,775.00 |
Other movement | 175,633.76 | - | 20,132,963.79 | 20,308,597.55 |
Closing balance | 2,334,895.21 | - | 32,671,633.04 | 35,006,528.25 |
(3) Other receivable listed by account aging
Aging | Closing Balance |
Within 1 year | 27,654,438.76 |
1-2 years | 17,231,991.92 |
2-3 years | 26,252,562.64 |
3-4 years | 7,027,188.39 |
4-5 years | 2,501,537.52 |
Over 5 years | 5,718,788.26 |
Total | 86,386,507.49 |
(4) Provision for bad debt
Category | Opening balance | Change during the year | Closing Balance | |||
Accrued | reversed | Written-off | Others | |||
Bad debt provision | 10,998,478.43 | 4,020,227.27 | - | 320,775.00 | 20,308,597.55 | 35,006,528.25 |
Total | 10,998,478.43 | 4,020,227.27 | - | 320,775.00 | 20,308,597.55 | 35,006,528.25 |
(5) Other receivables written off in current period: none.
Item | Amount to be written off |
Other receivables written off actually | 320,775.00 |
(6) Other receivables from the top 5 debtors based on closing balance
Name | Category | Closing Balance | Aging | % of the total OR | Closing Balance of Provision |
Co.,Ltd | Refund | 5,295,000.00 | 1-2years | 6.13 | 839,257.50 |
Dayaowan Customs | Tax refund | 3,277,467.08 | Within 1 year | 3.79 | 119,955.30 |
Agriculture Bureau of Moyu County | Deposit | 2,548,847.50 | 2-4 years | 2.95 | 1,191,973.07 |
Hubei Yurun Meat Food Co. LTD | Refund | 1,532,867.61 | Within 1 year | 1.77 | 56,102.95 |
Dalian DETA Hong Kong &China Gas Co.,Ltd | Deposit | 1,208,196.13 | Over 5 years | 1.40 | 44,219.98 |
Total | 13,862,378.32 | - | 16.04% | 2,251,508.80 |
(7) Other receivables from government grant: none
7. Inventories
(1) Categories of inventories
Item | Closing Balance | ||
Book value | Provision for decline | Net book value | |
Raw materials | 257,330,026.33 | 17,594,044.66 | 239,735,981.67 |
Working in progress | 219,325,436.31 | 7,091,948.88 | 212,233,487.43 |
Finished goods | 358,865,793.97 | 20,733,013.07 | 338,132,780.90 |
Low-value consumable | 161,125.34 | - | 161,125.34 |
Self-manufactured semi-finished products | 30,898,915.81 | - | 30,898,915.81 |
Cost to fulfill the contract | 518,190,428.65 | 24,029,331.96 | 494,161,096.69 |
Materials on consignment for further processing | 15,134,850.12 | 540,289.54 | 14,594,560.58 |
Goods on transit | 64,331,292.17 | 463,920.35 | 63,867,371.82 |
Properties written off debtors | 2,708,646.00 | 1,149,186.00 | 1,559,460.00 |
Total | 1,466,946,514.70 | 71,601,734.46 | 1,395,344,780.24 |
(Continued)
Item | Opening Balance | ||
Book value | Provision for decline | Net book value | |
Raw materials | 166,815,875.73 | 4,570,316.95 | 162,245,558.78 |
Working in progress | 171,554,710.97 | 1,929,842.21 | 169,624,868.76 |
Item | Opening Balance | ||
Book value | Provision for decline | Net book value | |
Finished goods | 300,140,274.98 | 29,448,083.12 | 270,692,191.86 |
Low-value consumable | 51,817.59 | - | 51,817.59 |
Self-manufactured semi-finished products | 30,747,861.83 | - | 30,747,861.83 |
Cost to fulfill the contract | 295,750,380.56 | 11,185,200.11 | 284,565,180.45 |
Materials on consignment for further processing | 887,585.94 | - | 887,585.94 |
Goods in transit | 86,049,156.11 | - | 86,049,156.11 |
Properties written off debtors | 14,866,010.00 | 5,203,103.50 | 9,662,906.50 |
Total | 1,066,863,673.71 | 52,336,545.89 | 1,014,527,127.82 |
(2) Provision for decline in the value of inventories
Item | Opening Balance | Increase | Decrease | Closing Balance | ||
Accrual | Others transferred | Written- off | Others transferred | |||
Raw materials | 4,570,316.95 | 6,183,357.74 | 6,860,369.97 | 20,000.00 | - | 17,594,044.66 |
WIP | 1,929,842.21 | 4,901,951.00 | 260,155.67 | - | - | 7,091,948.88 |
Finished goods | 29,448,083.12 | 8,195,494.59 | 2,730,787.46 | 19,641,352.10 | - | 20,733,013.07 |
Cost to fulfill the contract | 11,185,200.11 | 19,225,283.25 | - | 6,381,151.40 | - | 24,029,331.96 |
Materials on consignment for further processing | - | 540,289.54 | - | - | - | 540,289.54 |
Goods on transit | - | 463,920.35 | - | - | - | 463,920.35 |
Properties written off debtors | 5,203,103.50 | 201,159.90 | - | 4,255,077.40 | - | 1,149,186.00 |
Total | 52,336,545.89 | 39,711,456.37 | 9,851,313.10 | 30,297,580.90 | - | 71,601,734.46 |
Accrual for provision for decline in the value of inventories
Item | Basis for net realizable value recognition | Reasons for reverse/write-off |
Raw materials | The amount deducting the expected cost to product completion, selling expense and relative tax from the estimated selling price. | Sold |
WIP | Sold | |
Finished goods | Sold | |
Cost to fulfill the contract | Sold |
8. Contract asset
(1) Details
Item | Closing Balance | ||
Carrying amount | Provision | Book value | |
Undue warranty | 210,149,278.14 | 31,927,565.84 | 178,221,712.30 |
Revenue recognized over time to be settled | 61,997,091.19 | 14,427,927.71 | 47,569,163.48 |
Total | 272,146,369.33 | 46,355,493.55 | 225,790,875.78 |
(continued)
Item | Opening Balance | ||
Carrying amount | provision | Book value | |
Undue warranty | 125,891,499.90 | 16,031,841.11 | 109,859,658.79 |
Revenue recognized over time to be settled | |||
Total | 125,891,499.90 | 16,031,841.11 | 109,859,658.79 |
(2) Contract asset book value significant change
Item | Change | Reason |
Undue warranty | 68,362,053.51 | Acquisition not under same control, newly contract addition |
Revenue recognized over time to be settled | 47,569,163.48 | Acquisition not under same control, newly revenue addition |
Total | 115,931,216.99 |
(3) Provision for impairment
Item | Accrued | Reverse | Collected/written off | Reason |
Undue warranty | 16,386,410.92 | Accrued by aging | ||
Revenue recognized over time | 14,427,927.71 | Accrued by aging |
to be settled | ||||
Total | 30,814,338.63 |
9. Non-current asset due within one year
Item | Closing Balance | Opening Balance |
Long term receivable due within 1 year | 15,715,631.52 | 14,990,989.30 |
Total | 15,715,631.52 | 14,990,989.30 |
10. Other current assets
Item | Closing Balance | Opening Balance |
Input VAT to be deducted | 12,825,675.49 | 23,989,939.28 |
Prepaid VAT | 11,646,669.59 | - |
Prepaid income tax presented at net amount after offsetting | 9,010,312.91 | 380,483.32 |
Prepaid expenses | 16,919.61 | 154,654.11 |
Total | 33,499,577.60 | 24,525,076.71 |
11. Long term receivable
(1) Details
Item | Closing Balance | Discounted rate | ||
Carrying amount | Provision | Book value | ||
Lease premium | - | - | - | |
---Unrealized financing income | - | - | - | |
Goods sold by installments | 5,591,380.90 | 428,922.00 | 5,162,458.90 | 4.75% |
Total | 5,591,380.90 | 428,922.00 | 5,162,458.90 |
(Continued)
Item | Opening Balance | Discounted rate | ||
Carrying amount | Provision | Book value | ||
Lease premium | - | - | - | |
---Unrealized financing income | - | - | - | |
Goods sold by installments | - | - | - | 4.75% |
Total | - | - | - |
(2) Provision for bad debt
Bad debt provision | 1st stage | 2nd stage | 3rd stage | Total |
Expected credit loss within 12 months | Expected credit loss within the whole period (no impairment) | Expected credit loss within the whole period (impairment incurred) | ||
Opening balance | ||||
Opening balance during the year | ||||
--transfer to the 2nd stage | ||||
--transfer to the 3rd stage | ||||
--reverse to the 2nd stage | ||||
----reverse to the 1st stage | ||||
Accrued | 501,389.82 | - | - | 501,389.82 |
Reverse | ||||
Cancelation | ||||
Written off | ||||
Other | -72,467.82 | - | - | -72,467.82 |
Closing balance | 428,922.00 | - | - | 428,922.00 |
12.Long-term equity investments
Investee | Beginning balance | Increase/Decrease | Ending balance | Provision for impairment | |||||||
Increased | Decreased | Gains and losses recognized under the equity method | Adjustment of other comprehensive income | Change of other equity | Cash bonus or profits announced to issue | Provision for impairment of the current period | Others | ||||
Associates | |||||||||||
Panasonic Appliances cold Chain(Dalian)Co.Ltd.(N2) | 90,330,037.43 | 20,702,064.56 | -69,597,984.87 | -29,988.00 | - | ||||||
Beijing Huashang Bingshan Refrigeration and Air-conditioning Machinery Co., Ltd.(N3) | 2,139,942.18 | 2,442,782.42 | 302,840.24 | - | |||||||
Dalian Honjo Chemical Co., Ltd | 8,926,266.52 | 892,830.28 | - | 9,819,096.80 | |||||||
Keihin-Grand Ocean Thermal Technology(Dalian)Co.,Ltd. | 58,799,068.28 | 3,290,245.23 | 2,000,000.00 | 60,089,313.51 | |||||||
Dalian Fuji Bingshan Vending Machine Co., Ltd. | 148,656,014.75 | -37,554,674.82 | 111,101,339.93 | ||||||||
MHI Bingshan Refrigeration (Dalian) Co.,Ltd. | 14,923,803.87 | 477,305.23 | 15,401,109.10 | ||||||||
Dalian Fuji Bingshan Vending Machine Sales Co., Ltd | |||||||||||
Jiangsu Jingxue Insulation Technology Co.,Ltd (N4) | 201,731,528.04 | 63,957,497.85 | 7,082,562.57 | 4,732,344.00 | 140,124,248.76 | ||||||
Dalian Bingshan Metal Technology Co.,Ltd. | 168,294,942.93 | 30,420,886.58 | 23,402,022.05 | 175,313,807.46 | |||||||
Dalian Bingshan Group Huahuida Financial Leasing Co., Ltd | 44,789,319.55 | 1,502,255.10 | 687,697.70 | 45,603,876.95 |
Investee | Beginning balance | Increase/Decrease | Ending balance | Provision for impairment | |||||||
Increased | Decreased | Gains and losses recognized under the equity method | Adjustment of other comprehensive income | Change of other equity | Cash bonus or profits announced to issue | Provision for impairment of the current period | Others | ||||
Sonyo Compressor(Dalian)Co.,Ltd.(N1) | 460,060,249.49 | 451,307,603.23 | 25,369,353.74 | 34,122,000.00 | |||||||
Sonyo Refrigeration System (Dalian) Co., Ltd.(N1) | 28,480,784.93 | 27,116,430.98 | 162,691.50 | 1,527,045.45 | |||||||
Wuhan Sikafu Power Control Equipment Co., Ltd | 4,372,575.48 | 432,827.95 | 729,576.00 | - | 5,534,979.43 | ||||||
Total | 1,231,504,533.45 | 565,526,379.04 | -37,218,861.27 | -29,988.00 | 729,576.00 | 66,471,109.20 | 562,987,771.94 |
Note 1: in November this year, shareholdings of Sonyo Compressor(Dalian)Co.,Ltd. &SonyoRefrigeration System (Dalian) Co., Ltd were acquired, therefor they became subsidiaries fromaffiliated companies, refer to VII. Change of consolidation scope.Note 2: in November this year, full shareholdings of Panasonic Appliances coldChain(Dalian)Co.Ltd was disposed, Panasonic Appliances cold Chain(Dalian)Co.Ltd will not bean affiliate any longer after disposal.
Note 3: Beijing Huashang Bingshan Refrigeration and Air-conditioning Machinery Co., Ltdstarted liquidation from December 1, 2022and will not be an affiliate any longer.
Note 4: in September 2022, 2% of shareholdings in Jiangsu Jingxue Insulation TechnologyCo.,Ltd was sold and shareholding drops from 21.91% to 19.91%. in September 2022, 2% ofshareholdings in Jiangsu Jingxue Insulation Technology Co.,Ltd was sold and shareholdingdrops from 19.91% to 14.91%.
13.Other non-current financial assets
Item | Closing Balance | Opening Balance |
Financial assets classified as FVTPL | 149,950,861.31 | 261,410,664.61 |
Including: equity instruments | 149,950,861.31 | 261,410,664.61 |
Total | 149,950,861.31 | 261,410,664.61 |
14. Investment property
(1) Investment property measured as cost model
Item | Property& building | Land-use-rights | Total |
I. Initial cost | |||
1. opening balance | 230,594,490.07 | 26,094,438.38 | 256,688,928.45 |
2. addition | - | - | - |
3. decrease | - | - | - |
4. closing balance | 230,594,490.07 | 26,094,438.38 | 256,688,928.45 |
II. Accumulated depreciation | - | - | - |
1. opening balance | 123,629,414.79 | 12,306,704.05 | 135,936,118.84 |
2. addition | 4,898,002.65 | 521,888.76 | 5,419,891.41 |
(1) accrued/amortization | 4,898,002.65 | 521,888.76 | 5,419,891.41 |
3. decrease | |||
4. closing balance | 128,527,417.44 | 12,828,592.81 | 141,356,010.25 |
III. Impairment reserve | |||
1. opening balance | - | - | - |
Item | Property& building | Land-use-rights | Total |
2. addition | - | - | - |
3. decrease | - | - | - |
4. closing balance | - | - | - |
IV. Book value | |||
1. Closing book value | 102,067,072.63 | 13,265,845.57 | 115,332,918.20 |
2. Opening book value | 106,965,075.28 | 13,787,734.33 | 120,752,809.61 |
15. Fixed assets
Items | Closing Book Value | Opening Book Value |
Fixed asset | 1,229,029,368.93 | 855,395,405.85 |
Fixed asset disposal | - | - |
Total | 1,229,029,368.93 | 855,395,405.85 |
(1) Fixed assets detail
Item | buildings | Machinery equipment | Transportation equipment | Other equipment | Total |
I. Initial cost | |||||
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 | 138,059,316.47 | 1,122,922,470.45 | 11,564,954.06 | 161,801,018.88 | 1,434,347,759.86 |
(1) Purchase | 613,723.33 | 16,399,059.50 | 345,506.26 | 1,656,853.99 | 19,015,143.08 |
(2) Transferred from construction-in-progress | 298,245.18 | 22,356,669.34 | - | 487,501.92 | 23,142,416.44 |
(3) Acquired from business combination | 137,147,347.96 | 1,084,166,741.61 | 11,219,447.80 | 159,656,662.97 | 1,392,190,200.34 |
3. Decrease | 271,507.00 | 39,387,731.90 | 2,628,685.98 | 7,429,054.98 | 49,716,979.86 |
(1) Disposal | - | 2,330,920.47 | 1,728,172.54 | 1,190,184.35 | 5,249,277.36 |
(2)Acquired from business combination | 271,507.00 | 37,056,811.43 | 900,513.44 | 6,238,870.63 | 44,467,702.50 |
4.Closing balance | 833,131,692.61 | 1,700,788,050.58 | 21,850,467.55 | 215,907,705.08 | 2,771,677,915.82 |
Item | buildings | Machinery equipment | Transportation equipment | Other equipment | Total |
II. Accumulated depreciation | |||||
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 | 113,126,967.23 | 810,577,852.27 | 8,988,912.18 | 105,854,675.02 | 1,038,548,406.70 |
(1)Accrued | 17,495,413.14 | 52,894,586.19 | 741,177.31 | 5,707,024.84 | 76,838,201.48 |
(2)Acquired from business combination | 95,631,554.09 | 757,683,266.08 | 8,247,734.87 | 100,147,650.18 | 961,710,205.22 |
3. Decrease | 244,356.30 | 31,619,709.51 | 2,376,128.98 | 6,018,382.54 | 40,258,577.33 |
(1) Disposal | - | 1,860,776.87 | 1,056,316.17 | 645,488.87 | 3,562,581.91 |
(2)Acquired from business combination | 244,356.30 | 29,758,932.64 | 1,319,812.81 | 5,372,893.67 | 36,695,995.42 |
4.Closing balance | 244,228,011.91 | 1,120,019,881.71 | 15,419,223.76 | 149,998,682.42 | 1,529,665,799.80 |
III. Impairment reserve | |||||
1.Opening balance | - | 275,759.54 | - | - | 275,759.54 |
2. Increase | 201,250.96 | 8,564,126.08 | 286,519.26 | 3,655,091.25 | 12,706,987.55 |
(1)Accrued | |||||
(2)Acquired from business combination | 201,250.96 | 8,564,126.08 | 286,519.26 | 3,655,091.25 | 12,706,987.55 |
3. Decrease | |||||
4.Closing balance | 201,250.96 | 8,839,885.62 | 286,519.26 | 3,655,091.25 | 12,982,747.09 |
IV.Book value | |||||
1.Closing book value | 588,702,429.74 | 571,928,283.25 | 6,144,724.53 | 62,253,931.41 | 1,229,029,368.93 |
2.Opening book value | 563,998,482.16 | 275,915,813.54 | 4,107,758.91 | 11,373,351.24 | 855,395,405.85 |
(2) Fixed assets without ownership certificate
Item | Book value | Reason |
Self -constructed buildings | 27,465,128.49 | Up to December 31,2022, sum of net book value of the buildings without ownership certificate is 27,465,128.49 Yuan, they are all self-constructed buildings. Because the land right where the buildings stand on are not obtained, ownership certificate of the buildings are not ready. |
16. Construction-in-progress
Item | Closing book value | Opening book value |
Construction-in-progress | 115,577,902.54 | 38,974,478.45 |
Construction materials | - | - |
Total | 115,577,902.54 | 38,974,478.45 |
(1) Construction-in-progress details
Item | Closing balance | Opening balance | ||||
Book balance | Provision | Book Value | Book balance | Provision | Book value | |
Buildings & reconstruction | 24,796,146.56 | - | 24,796,146.56 | 4,330,904.06 | - | 4,330,904.06 |
Improvement of machinery | 82,341,565.62 | - | 82,341,565.62 | 24,409,028.60 | - | 24,409,028.60 |
Software of intelligent manufacture | 3,575,525.17 | - | 3,575,525.17 | 1,069,880.60 | - | 1,069,880.60 |
Power generation project | 9,164,665.19 | 4,300,000.00 | 4,864,665.19 | 9,164,665.19 | - | 9,164,665.19 |
Total | 119,877,902.54 | 4,300,000.00 | 115,577,902.54 | 38,974,478.45 | - | 38,974,478.45 |
(2) Change in the significant construction in progress
Name | Opening balance | Increase | Decrease | balance | ||
Transfer to FA/ Intangible assets | Other decrease | |||||
Buildings & reconstruction | 4,330,904.06 | 34,933,807.31 | 14,316,352.42 | 152,212.39 | 24,796,146.56 | |
Improvement of machinery | 24,409,028.60 | 69,792,719.83 | 11,860,182.81 | - | 82,341,565.62 | |
Software of intelligent manufacture | 1,069,880.60 | 5,635,971.44 | 2,997,599.76 | 132,727.11 | 3,575,525.17 |
Name | Opening balance | Increase | Decrease | balance | ||
Transfer to FA/ Intangible assets | Other decrease | |||||
Power generation project | 9,164,665.19 | 9,164,665.19 | ||||
Total | 38,974,478.45 | 110,362,498.58 | 29,174,134.99 | 284,939.50 | 119,877,902.54 |
(Continued)
Name | Budget | Percent of investment against budget(%) | of construction | Accumulated capitalized interest | Including: accumulated capitalized interest of the year | Interest capitalization rate(%) | Source of funds |
Buildings & reconstruction | 27,271,836.00 | 90.92 | 90.92 | - | Self-financing | ||
Improvement of machinery | 101,691,814.04 | 80.97 | 80.97 | - | Self-financing | ||
Software of intelligent manufacture | 3,610,000.00 | 99.05 | 99.05 | - | Self-financing | ||
Power generation project | 15,020,000.00 | 32.39 | 32.39 | 837,440.00 | borrowing | ||
Total | 147,593,650.04 | — | — | 837,440.00 | — | — | — |
(3) Impairment provision
Item | Provision | Reason |
Power generation project | 4,300,000.00 | Project standstill |
Total | 4,300,000.00 | — |
17. Right-of-use assets
Item | buildings | Machinery | Transportation equipment | Others | Land use right | Total |
I. 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 | 9,574,424.24 | 2,031,380.53 | - | 194,322.58 | 7,945,762.91 | 19,745,890.26 |
(1) lease in | 5,205,530.42 | 2,031,380.53 | - | - | - | 7,236,910.95 |
(2) business combination | 4,368,893.82 | - | - | 194,322.58 | 7,945,762.91 | 12,508,979.31 |
3. Decrease | 2,143,769.48 | 8,223,690.03 | - | 526,894.11 | - | 10,894,353.62 |
4.Closing balance | 12,258,253.25 | 22,042,380.89 | 334,540.86 | 194,322.58 | 7,945,762.91 | 42,775,260.49 |
II. Accumulated amortization | — | — | — | — | — | — |
1.Opening balance | 1,654,921.59 | 8,078,883.59 | 111,513.62 | 143,701.68 | 9,989,020.48 | |
2. Increase | 3,050,831.36 | 2,713,098.38 | 111,513.62 | 128,507.63 | 1,704,560.90 | 7,708,511.89 |
(1)Accrued | 661,704.22 | 2,713,098.38 | 111,513.62 | 37,548.19 | 185,222.38 | 3,709,086.79 |
(2) business combination | 2,389,127.14 | - | - | 90,959.44 | 1,519,338.52 | 3,999,425.10 |
3. Decrease | 2,143,769.48 | 3,547,183.83 | - | 172,980.83 | - | 5,863,934.14 |
4.Closing balance | 2,561,983.47 | 7,244,798.14 | 223,027.24 | 99,228.48 | 1,704,560.90 | 11,833,598.23 |
III. Impairment reserve | — | — | — | — | — | — |
1. Opening balance | - | - | - | - | - | - |
2. Increase | - | - | - | - | - | - |
Item | buildings | Machinery | Transportation equipment | Others | Land use right | Total |
3. Decrease | - | - | - | - | - | - |
4.Closing balance | - | - | - | - | - | - |
IV. Book value | — | — | — | — | — | — |
1. Closing book value | 9,696,269.78 | 14,797,582.75 | 111,513.62 | 95,094.10 | 6,241,202.01 | 30,941,662.26 |
2. Opening book value | 3,172,676.90 | 20,155,806.80 | 223,027.24 | 383,192.43 | - | 23,934,703.37 |
18. Intangible assets
Item | Land use right | Patent | Patent | Others | Total |
I. 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 | 21,964,150.48 | - | 773,680.00 | 26,757,007.62 | 49,494,838.10 |
(1) Purchase | - | - | - | 4,189,678.01 | 4,189,678.01 |
(2) increase via merge | 21,964,150.48 | - | 773,680.00 | 16,535,611.06 | 39,273,441.54 |
(3) Transferred from construction-in-progress | - | - | - | 6,031,718.55 | 6,031,718.55 |
3. Decrease | - | - | - | 1,387,556.28 | 1,387,556.28 |
(1) Business combination | - | - | - | 1,387,556.28 | 1,387,556.28 |
4.Closing balance | 173,151,420.72 | 17,630,188.82 | 5,773,680.00 | 59,376,795.82 | 255,932,085.36 |
II. Accumulated amortization | |||||
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 | 8,323,970.37 | 1,429,516.20 | 1,273,696.00 | 11,738,763.24 | 22,765,945.81 |
(1)Accrued | 3,096,751.48 | 1,429,516.20 | 500,016.00 | 5,452,245.89 | 10,478,529.57 |
(2)Increase from merger | 5,227,218.89 | - | 773,680.00 | 6,286,517.35 | 12,287,416.24 |
3. Decrease | - | - | - | 142,645.96 | 142,645.96 |
(1) Business combination | - | - | - | 142,645.96 | 142,645.96 |
4.Closing balance | 47,596,987.88 | 9,040,676.05 | 4,273,700.00 | 26,944,001.36 | 87,855,365.29 |
III. Impairment provision | |||||
1. Opening balance | - | - | - | - | - |
2. Increase | - | - | - | - | - |
3. Decrease | - | - | - | - | - |
(1) Disposal | - | - | - | - | - |
IV. Book value | |||||
1. Closing book | 125,554,432.84 | 8,589,512.77 | 1,499,980.00 | 32,432,794.46 | 168,076,720.07 |
Item | Land use right | Patent | Patent | Others | Total |
value | |||||
2. Opening book value | 111,914,252.73 | 10,019,028.97 | 1,999,996.00 | 18,659,460.40 | 142,592,738.10 |
19. Goodwill
(1) Original cost of goodwill
Name | Opening Balance | Increased during current year | Decreased during current year | Closing Balance | ||
Enterprises merger increase | Other | Disposal | Other | |||
Dalian Universe Thermal Technology Co.,Ltd. | 1,440,347.92 | 1,440,347.92 | ||||
Dalian Bingshan Group Engineering Co., Ltd | 310,451.57 | 310,451.57 | ||||
Sonyo Compressor(Dalian)Co.,Ltd | 240,922,872.80 | 240,922,872.80 | ||||
Sonyo Refrigeration System (Dalian) Co., Ltd. | 5,671,836.12 | 5,671,836.12 | ||||
Total | 1,750,799.49 | 246,594,708.92 | 248,345,508.41 |
(2) Goodwill impairment provision
In the year 2015, the book value of equity investment of Dalian Universe Thermal TechnologyCo.,Ltd exceeds the fair value of the proportion of the acquired company’s identifiable net asset.The difference between the book value of equity investment of 48, 287,589.78 Yuan and theidentifiable net asset’s fair value of Dalian Sanyo High-efficient Refrigeration System Co., Ltdof 46,847,241.86 Yuan on the acquisition date of July 31
st
,2015 is recognized as goodwill of1,440,347.92 Yuan on The Company consolidated financial report at the end of the year.In the year 2016, Dalian Bingshan Group Construction Co., Ltd purchases shares of DalianBingshan Baoan Leisure Industry Co., Ltd and gains control. The transferred price is based onthe net asset of Dalian BingshanBaoan Leisure Industry Co., Ltd on June 30
th
, 2016. Negotiatedwith Dalian Bingshan Baoan Leisure Industry Co., Ltd’s shareholder Baoan Water Project(China) Limited Company, the transfer price is the combination cost on the purchasing datewhich is 5,359,548.42 Yuan, the fair value of proportion of Dalian BingshanBaoan LeisureIndustry Company’s identifiable net asset is 5,049,096.85 Yuan on the purchasing day, therefore,goodwill is 310,451.57Yuan on the purchasing date. Dalian Bingshan Group Construction Co.,Ltd absorbed Dalian Bingshan Baoan Leisure Industry Co., Ltd in 2019.In 2022, the Company purchased 60% of the shareholdings of Sonyo
Compressor(Dalian)Co.,Ltd from Sanyo Electric(China)Co.,Ltd, and negotiated with SanyoElectric(China)Co.,Ltd to determine the share transfer consideration of 929,148,000.00 Yuan.After the transaction, Sonyo Compressor(Dalian)Co.,Ltd became a subsidiary. This transactionis a business combination not under same control, cost of combination is the FV of previousshareholdings on acquisition date plus 60% shareholdings acquisition consideration, which is1,548,580,000Yuan in total. Goodwill of 240,922,872.80 Yuan is recognized for the differencebetween the share of FV of net identifiable asset of acquiree, 1,307,657,127.20Yuan and cost ofcombination on acquisition date.In 2022, the Company purchased 30% of the shareholdings of Sonyo Refrigeration System(Dalian) Co., Ltd. from Panasonic Corporation of china Co., LTD and 25% shareholdings ofSonyo Refrigeration System (Dalian) Co., Ltd from Panasonic Appliances coldChain(Dalian)Co.Ltd. The negotiated share transfer consideration of 81,735,060.00 Yuan. Afterthe transaction, Sonyo Compressor(Dalian)Co.,Ltd became a subsidiary. This transaction is abusiness combination not under same control, cost of combination is the FV of previousshareholdings on acquisition date plus 55% shareholdings acquisition consideration, which is111,456,900.00Yuan in total. Goodwill of 5,671,836.12 Yuan is recognized for the differencebetween the share of FV of net identifiable asset of acquire, 105,785,063.87Yuan and cost ofcombination on acquisition date.The book value of goodwill from business combination of Dalian Universe Thermal TechnologyCo.,Ltd, Dalian Bingshan Baoan Leisure Industry Co., Ltd, Sonyo Compressor(Dalian)Co.,Ltdand Sonyo Refrigeration System (Dalian) Co., Ltd which are not under same control shall beallocated into the relevant asset group using the reasonable method since acquisition date, andbe tested for impairment on related asset groups containing goodwill by professional appraisalcompanies or use evaluation models to predict the present value of future cash flows accordingto the gross profit rate, sales growth rate, discount rate and other parameters in the next fewyears, and taken impairment test on relevant asset group where the goodwill is included. Theobvious impairment indication of the goodwill hasn’t been found. Thus, no goodwillimpairment provision has been made.
20. Long-term unamortized expense
Item | Opening Balance | Increase | Amortization | Other Decrease | Closing balance |
Greenland of new factory | 4,832,292.10 | - | 892,115.52 | - | 3,940,176.58 |
Employee’s dormitory use right | 1,735,213.74 | - | 138,478.32 | - | 1,596,735.42 |
Membership fee for golf | 407,000.00 | - | 16,500.00 | - | 390,500.00 |
Renovation and rebuilding | 1,020,822.14 | 249,056.35 | 228,285.05 | 701,952.14 | 339,641.30 |
Amortization of instruments | 305,935.99 | 86,422.37 | - | 219,513.62 |
Item | Opening Balance | Increase | Amortization | Other Decrease | Closing balance |
Technology entrance fee of cold and heat machinery | 93,356.25 | 93,356.25 | |||
Total | 8,088,684.23 | 554,992.34 | 1,455,157.51 | 701,952.14 | 6,486,566.92 |
21. Deferred tax assets and deferred tax liabilities
(1) Deferred tax assets without offsetting
Item | Closing balance | Opening balance | ||
Deductible temporary difference | Deferred tax assets | Deductible temporary difference | Deferred tax assets | |
Provision for credit impairment | 383,685,092.04 | 70,892,192.53 | 367,572,645.45 | 77,433,815.32 |
Provision for impairment of assets | 110,205,587.05 | 18,013,430.31 | 55,608,764.16 | 10,412,376.27 |
Provision | 16,786,967.43 | 2,518,045.11 | - | - |
Deductible loss | 9,991,507.80 | 1,498,726.17 | - | - |
Unrealized profit from internal transaction | 13,034,503.47 | 1,955,175.52 | 13,555,883.61 | 2,033,382.54 |
Accrued sales discount | 13,744,913.65 | 2,061,737.05 | ||
FA depreciation | 35,600,567.62 | 5,340,085.14 | ||
Others | 845,210.65 | 126,781.60 | ||
Total | 583,894,349.71 | 102,406,173.43 | 436,737,293.22 | 89,879,574.13 |
(2) Deferred tax liabilities without offsetting
Item | Closing balance | Opening balance | ||
Taxable temporary difference | Deferred tax liabilities | Taxable temporary difference | Deferred tax liabilities | |
Revaluation increase in business combination asst not under same control | 211,352,103.77 | 31,702,815.57 | ||
Change on FV of other non-current financial assets | 137,357,000.73 | 20,603,550.11 | 237,308,998.02 | 35,596,349.70 |
FA depreciation | 46,545,245.48 | 6,981,786.82 | ||
Total | 395,254,349.98 | 59,288,152.50 | 237,308,998.02 | 35,596,349.70 |
(3) Net differed tax asset or liability
Item | Offset amount at the year-end | Closing balance of net of DTA/DTL | Offset amount at the beginning of the year | Opening balance of net of DTA/DTL |
Deferred tax assets | 6,981,786.82 | 95,424,386.61 | - | 89,879,574.13 |
Deferred tax liabilities | 6,981,786.82 | 95,424,386.61 | - | 89,879,574.13 |
(4) Unrecognized deferred tax assets details
Item | Closing balance | Opening balance |
Deductible temporary difference | 173,990,137.06 | 30,659,975.23 |
Deductible loss | 304,513,803.17 | 224,773,151.64 |
Total | 478,503,940.23 | 255,433,126.87 |
(5) Unrecognized deductible loss of deferred tax assets expired years
Year | Closing balance | Opening balance | Notes |
2023 | 16,458,262.38 | ||
2024 | 7,735,166.14 | 61,554,422.97 | |
2025 | 8,950,922.50 | 21,436,832.18 | |
2026 | 54,629,003.37 | 124,607,476.02 | |
2027 | 61,240,033.97 | ||
2028 | 13,111,421.07 | ||
2029 | 45,365,135.77 | ||
2030 | 10,574,799.57 | ||
2031 | 50,864,213.30 | ||
2032 | 52,043,107.48 | ||
Total | 304,513,803.17 | 224,773,151.64 |
22. Short-term borrowing
(1) Category of short-term borrowing
Loan category | Closing balance | Opening balance |
Credit loan | 262,016,713.87 | 230,373,666.72 |
Pledged loan | 12,036,276.28 | 6,538,425.00 |
Mortgaged loan | - | 9,025,000.00 |
Guarantee loan | ||
Total | 274,052,990.15 | 245,937,091.72 |
(2) no overdue short term borrowing this year
23. Notes payable
Notes Category | Closing balance | Opening balance |
Bank acceptance notes | 616,424,384.85 | 372,141,300.89 |
Commercial acceptance notes | 2,520,000.00 | 7,891,738.67 |
Total | 618,944,384.85 | 380,033,039.56 |
Note: There is no due note unpaid at the year end.
24. Accounts payable
Item | Closing balance | Opening balance |
Material payments | 956,122,327.00 | 558,353,834.37 |
Project payments | 567,873,401.74 | 328,569,617.62 |
Equipment payments | 55,406,593.91 | 31,092,321.64 |
Others | 6,695,737.94 | 1,856,153.90 |
Total | 1,586,098,060.59 | 919,871,927.53 |
25. Contract liability
Item | Closing balance | Opening balance |
Received in advance due from unrealized revenue | 647,645,820.57 | 499,719,963.40 |
Total | 647,645,820.57 | 499,719,963.40 |
26. Employee’s payable
(1) Category of employee’s payable
Item | Opening balance | Increase | Decrease | Closing balance |
Short-term employee’s payable | 35,148,570.37 | 441,095,373.81 | 358,043,484.58 | 118,200,459.60 |
Post-employment benefit –defined contribution plan | 212.11 | 38,198,245.70 | 38,182,234.18 | 16,223.63 |
Termination benefits | 534,750.80 | 534,750.80 | - | |
Other welfare due within 1 year | - | - | - | |
Total | 35,148,782.48 | 479,828,370.31 | 396,760,469.56 | 118,216,683.23 |
(2) Short-term employee’s payables
Item | Opening balance | Increase | Decrease | Closing balance |
Salaries, bonus, allowance, and subsidy | 31,256,481.52 | 348,877,332.83 | 276,782,568.51 | 103,351,245.84 |
Welfare | 1,849,331.65 | 18,025,607.15 | 19,874,938.80 | - |
Social insurance | 661.20 | 22,567,810.07 | 22,559,469.56 | 9,001.71 |
Item | Opening balance | Increase | Decrease | Closing balance |
Include: Medical insurance | - | 17,485,099.19 | 17,477,365.63 | 7,733.56 |
Supplemental insurance | - | 359,375.57 | 359,375.57 | - |
On-duty injury insurance | 661.20 | 2,678,633.11 | 2,678,026.16 | 1,268.15 |
Maternity insurance | - | 2,044,702.20 | 2,044,702.20 | - |
Housing funds | 305,192.81 | 30,648,930.70 | 30,954,123.51 | - |
Labor union and training expenses | 1,736,903.19 | 7,419,066.14 | 5,729,782.06 | 3,426,187.27 |
Short-term leave with pay | - | 57,121.22 | 57,121.22 | - |
Reward bonus and welfare fund | 12,093,734.78 | 679,710.00 | 11,414,024.78 | |
Others | 1,405,770.92 | 1,405,770.92 | - | |
Total | 35,148,570.37 | 441,095,373.81 | 358,043,484.58 | 118,200,459.60 |
(3) Defined contribution plan
Item | Opening balance | Increase | Decrease | Closing balance |
Pension | - | 36,949,930.41 | 36,937,304.17 | 12,626.24 |
Unemployment insurance | 212.11 | 1,248,315.29 | 1,244,930.01 | 3,597.39 |
Company annuity plan | - | - | - | - |
Total | 212.11 | 38,198,245.70 | 38,182,234.18 | 16,223.63 |
27. Tax payable
Item | Closing balance | Opening balance |
Value-added tax | 23,058,922.64 | 8,428,289.41 |
Enterprise income tax | 3,541,171.62 | 825,185.23 |
Real estate tax | 2,212,510.37 | 1,910,131.37 |
City maintenance and construction tax | 1,253,818.83 | 178,955.65 |
Land use tax | 1,122,457.62 | 1,094,769.07 |
Education surcharge | 895,584.93 | 127,825.46 |
Individual income tax | 818,322.16 | 471,053.12 |
Stamp duty | 787,688.77 | 477,653.78 |
River toll fee | 1,046.68 | 984.73 |
Total | 33,691,523.62 | 13,514,847.82 |
28. Other accounts payable
Item | Closing balance | Opening balance |
Interest payable | - | |
Dividend payable | 533,156.00 | 3,008,156.00 |
Other accounts payable | 66,521,094.25 | 52,275,984.21 |
Total | 67,054,250.25 | 55,284,140.21 |
28.1 Dividend payable
Item | Closing balance | Opening balance |
Ordinary share dividend | 533,156.00 | 3,008,156.00 |
Total | 533,156.00 | 3,008,156.00 |
28.2 Other accounts payable
(1) Other payables categorized by payments nature
Payments nature | Closing balance | Opening balance |
Apply for reimbursement and unpaid | 21,409,586.91 | 10,784,375.08 |
Cash pledge and security deposit | 11,393,395.62 | 11,879,889.59 |
Trade mark and royalty | 3,505,028.04 | - |
Receipts under custody | 700,531.82 | 2,449,487.90 |
Others | 29,512,551.86 | 27,162,231.64 |
Total | 66,521,094.25 | 52,275,984.21 |
29. Non-current liabilities due within one year
Item | Closing balance | Opening balance |
Bond payable due within one year | 24,900,000.00 | |
Long-term payable due within one year | 29,809,686.93 | 13,876,415.99 |
Lease obligation due within one year | 8,396,267.63 | 10,298,972.13 |
Total | 63,105,954.56 | 24,175,388.12 |
30. Other current liabilities
Item | Closing balance | Opening balance |
Notes payable endorsed not derecognized | 127,165,397.88 | 143,288,366.08 |
Output Vat to be carried forward | 77,484,605.36 | 51,924,840.83 |
Total | 204,650,003.24 | 195,213,206.91 |
31. Long-term borrowing
(1) Category of long-term borrowing
Note 1: pledged loan of 0.6 billion Yuan is for business combination in 2022, which comprises
0.3 billion Yuan from Dalian Zhoushuizi Branch of China Construction Bank Corporation,5years with 2.75% borrowing rate. 50% shareholdings of Sonyo Compressor(Dalian)Co.,Ltdand 37.5% shareholdings of Sonyo Refrigeration System (Dalian) Co., Ltd. were pledged. ChinaConstruction Bank Corporation will complete the guarantee in February 2023. 0.3 billion Yuanfrom Dalian Branch of Bank of Communications Co.,Ltd., 7 years with 2.75% borrowing rate.50% shareholdings of Sonyo Compressor(Dalian)Co.,Ltd and 37.5% shareholdings of SonyoRefrigeration System (Dalian) Co., Ltd. were pledged. Dalian Branch of Bank ofCommunications Co.,Ltd will complete the guarantee in February 2023.Note 2: In year 2016, the Development Fund from China Development Bank gave support to theCompany’s intelligent and green equipment of cold chain and service industry base project andprovided special fund to the Company’s holding shareholder, Bingshan Group. The fund is 0.15billion Yuan with 10year’s expiration at 1.2% rate. Once the fund arrived, Bingshan Group gaveit to the Company at the same rate of 1.2% in lump sum. The above fund needed to be warrantedby the Company. The guarantee seems to be given for the holding shareholder, but it is for theCompany itself in fact.
32. Lease obligation
(1) Details of lease obligation
Category | Closing balance | Opening balance |
Lease payment | 23,357,885.20 | 16,861,280.02 |
Less: unrecognized finance expense | 3,731,085.52 | 1,168,286.75 |
Non-current liability due within 1 year | 8,396,267.63 | 10,298,972.13 |
Net lease liability | 11,230,532.05 | 5,394,021.14 |
33. Long term accounts payable
Item | Closing Balance | Opening Balance |
Long term accounts payable | 31,009,644.16 | 19,998,913.29 |
Special fund payable | - | - |
Total | 31,009,644.16 | 19,998,913.29 |
33.1Category by nature
Category | Closing Balance | Opening Balance |
Pledged loan | 585,100,000.00 | - |
Guarantee loan | 130,000,000.00 | 150,000,000.00 |
Total | 715,100,000.00 | 150,000,000.00 |
Nature | Closing Balance | Opening Balance |
Financial lease borrowings | 31,009,644.16 | 19,998,913.29 |
Total | 31,009,644.16 | 19,998,913.29 |
34. Provision
Nature | Closing Balance | Opening Balance | Reason |
Open litigation | 15,710,985.28 | litigation | |
Warranty | 3,094,982.15 | Service after sales | |
Total | 18,805,967.43 |
35. Deferred income
(1) Category of deferred income
Item | Opening Balance | Increase | Decrease | Closing Balance |
Government subsidy | 106,185,323.82 | 27,500.00 | 6,458,477.43 | 99,754,346.39 |
Total | 106,185,323.82 | 27,500.00 | 6,458,477.43 | 99,754,346.39 |
(2) Government subsidy
Government subsidy item | Opening Balance | Increase | operating income | Into other income | The value offset cost and expense this year | Closing Balance | income |
Contribution to subsidiary company relocation | 38,990,000.00 | 1,114,000.00 | 37,876,000.00 | related | |||
Application of NH3 and CO2 instead of R22 screw refrigerating machine combined condensing unit | 22,505,971.44 | 1,999,533.16 | 20,506,438.28 | Related | |||
Compressor IC system | 3,538,360.27 | 368,769.72 | 3,169,590.55 | related | |||
Ultrasonic intelligent defrost technology | 3,421,177.42 | 30,000.00 | 384,824.40 | 3,006,353.02 | related/ Income | ||
Eco Compressor project | 19,975,471.49 | 2,553,850.15 | 17,421,621.34 | related |
Government subsidy item | Opening Balance | Increase | operating income | Into other income | The value offset cost and expense this year | Closing Balance | income |
R290 replacement of R22 large industrial screw unit | 13,006,663.20 | 13,006,663.20 | related | ||||
R290 replacement of R22 industrial double stage screw unit | 4,747,680.00 | 4,747,680.00 | related | ||||
testing APP | 27,500.00 | 7,500.00 | 20,000.00 | ||||
Total | 106,185,323.82 | 27,500.00 | 1,151,500.00 | 5,306,977.43 | 99,754,346.39 | — |
Note: Asset related grant shall be offset the cost or expense within the asset’s useful life; incomerelated grant shall be booked into other income or offset cost or expense if it is relevant to dailyactivity, otherwise it shall be booked into non-operating income.
36.Share capital
Item | Opening balance | Increase/decrease(+/-) | Closing balance | ||||
New share issued | Share dividend | Transfer from capital reserve | others | Subtotal | |||
Total share capital | 843,212,507.00 | 843,212,507.00 |
37.Capital reserves
Items | Opening Balance | Increase | Decrease | Closing Balance |
Share premium | 669,193,413.27 | - | 669,193,413.27 | |
Other capital reserves | 51,022,453.51 | 729,576.00 | 3,848,344.40 | 47,903,685.11 |
Total | 720,215,866.78 | 729,576.00 | 3,848,344.40 | 717,097,098.38 |
Note1: other capital reserve decreased by 3,512,172.40 Yuan during the year is the amount ofthat the consideration paid for purchasing minority interest of Wuhan Lanning EnergyTechnology Co., Ltd by Wuhan New World Refrigeration Industrial Co., Ltd, which is asubsidiary of the Company, is more than the share of the identifiable net asset in the subsidiary.
Note 2: capital reserve of 336,172.00Yuan decreased during the year because of disposal ofBingshan Technology Service (Dalian) Co., Ltd.Note 3: capital reserve increased by 729,576.00Yuan because of equity method accounting of itssubsidiary , Wuhan New World Refrigeration Industrial Co., Ltd’s investment in WuhanLanning Energy Technology Co., Ltd.
38.Other comprehensive income
Items | Opening Balance | Current year | Closing Balance | ||||
Amount for the period before income tax | Less:Previously recognized in profit or loss into other comprehensive income | Less:income tax | After-tax attribute to the parent company | After-tax attribute to minority shareholder | |||
I.Later can’t reclassified into profit and loss of other comprehensive income | |||||||
II. Later reclassified into profit and loss of other comprehensive income | 2,178,681.73 | 29,988.00 | 29,988.00 | 2,208,669.73 | |||
Other comprehensive income that can be transferred to profit or loss under the equity method | 2,178,681.73 | 29,988.00 | 29,988.00 | 2,208,669.73 | |||
Other comprehensive income total | 2,178,681.73 | 29,988.00 | 29,988.00 | 2,208,669.73 |
39. Special reserve
Item | Opening Balance | Increase | Decrease | Closing Balance |
Manufacturing safety | 4,613,180.31 | 4,613,180.31 | ||
Total | 4,613,180.31 | 4,613,180.31 |
40.Surplus reserves
Item | Opening Balance | Increase | Decrease | Closing Balance |
Statutory surplus reserve | 347,216,790.47 | 15,755,434.51 | - | 362,972,224.98 |
Discretionary surplus reserve | 462,254,409.17 | - | - | 462,254,409.17 |
Total | 809,471,199.64 | 15,755,434.51 | - | 825,226,634.15 |
41.Undistributed profits
Item | Current year | Last year |
Closing balance of last year | 627,764,582.32 | 997,601,577.97 |
Add: Adjustments to the opening balance of undistributed profits | - | -79,559,636.71 |
Including: additional retrospective adjustments according to the new accounting standards | - | - |
Change on accounting policy | - | - |
Correction of prior period significant errors | - | - |
Change on combination scope under same control | - | - |
Other factors | - | -79,559,636.71 |
Opening balance of current year | 627,764,582.32 | 918,041,941.26 |
Add: net profit attributable to shareholders of parent company in the year | 18,255,330.45 | -269,059,849.96 |
Less: Provision for statutory surplus reserves | 15,755,434.51 | - |
Provision for any surplus reserves | - | 12,785,383.91 |
Provision of general risk | - | - |
Dividends payable for common shares | 8,432,125.07 | 8,432,125.07 |
Common stock dividends converted to equity | - | - |
Others | 3,386,430.61 | |
Closing balance of current year | 618,445,922.58 | 627,764,582.32 |
42.Operating revenue and cost
(1) Details
Items | Current year | Last year |
Sales revenue | Cost of sales | Sales revenue | Cost of sales | |
Revenue from principle operation | 2,803,347,359.37 | 2,459,913,203.46 | 2,031,958,305.49 | 1,808,263,206.67 |
Revenue from other operation | 89,737,950.92 | 77,615,637.94 | 57,249,950.73 | 41,268,065.62 |
Total | 2,893,085,310.29 | 2,537,528,841.40 | 2,089,208,256.22 | 1,849,531,272.29 |
(2) Main revenue from contract details
Contract classification | Northeast China | Central China | East China | Total |
Classified at products type | 2,583,634,534.32 | 218,417,694.72 | 1,295,130.33 | 2,803,347,359.37 |
Manufacture products | 1,713,166,227.20 | 205,996,804.29 | 1,295,130.33 | 1,920,458,161.82 |
Project installation | 845,343,539.60 | 12,420,890.43 | - | 857,764,430.03 |
Other products and service | 25,124,767.52 | - | - | 25,124,767.52 |
Classified at geography location | 2,583,634,534.32 | 218,417,694.72 | 1,295,130.33 | 2,803,347,359.37 |
domestic | 2,403,716,824.07 | 218,417,694.72 | 1,295,130.33 | 2,623,429,649.12 |
overseas | 179,917,710.25 | - | - | 179,917,710.25 |
Total | 2,583,634,534.32 | 218,417,694.72 | 1,295,130.33 | 2,803,347,359.37 |
43.Taxes and surcharges
Items | Current year | Last year |
Property tax | 8,149,841.00 | 7,889,230.05 |
Land use tax | 4,339,092.94 | 4,770,267.58 |
City construction tax | 3,787,453.40 | 2,697,059.55 |
Stamp duty | 3,036,523.34 | 1,628,433.67 |
Education surcharge | 2,716,374.19 | 1,937,881.46 |
Vehicle and vessel tax | 21,640.80 | 25,419.48 |
Others | 10,700.69 | 3,559.17 |
Total | 22,061,626.36 | 18,951,850.96 |
44.Selling expenses
Items | Current year | Last year |
Employee benefit | 94,640,905.30 | 79,027,032.72 |
Maintenance and repair expense | 17,886,776.97 | 10,817,179.44 |
Official business expense | 15,487,688.84 | 17,287,793.62 |
Travel expense | 12,871,992.12 | 9,309,818.45 |
Business entertaining expense | 9,081,381.79 | 9,790,470.43 |
Advertisement and bids expense | 1,817,387.69 | 2,335,235.14 |
Depreciation expense | 861,025.06 | 1,781,527.37 |
Other expense | 1,088,557.19 | 284,852.13 |
Total | 153,735,714.96 | 130,633,909.30 |
45. Administrative expenses
Items | Current year | Last year |
Employee benefit | 104,233,517.24 | 104,074,747.58 |
Official expense | 19,600,747.44 | 17,723,620.65 |
Depreciation expense | 17,450,109.34 | 12,382,260.68 |
Design consultant and test service expense | 14,255,471.99 | 4,398,890.50 |
Maintenance and repair expense | 8,558,115.62 | 8,501,811.94 |
Long-term assets amortization | 7,988,593.35 | 7,564,598.02 |
Travel expense | 4,544,965.76 | 5,387,065.85 |
Safety production cost | 2,791,153.21 | 3,799,007.87 |
Business entertaining expense | 1,664,993.09 | 2,248,318.02 |
Patent trade mark use | 1,139,572.89 | |
Other taxes and fee | 841,243.95 | 559,693.52 |
Insurance expense | 830,189.74 | 931,137.81 |
Advertisement expense | 424,668.21 | 875,051.39 |
Transportation expense | 204,637.83 | 671,904.44 |
Other expense | 1,850,224.84 | 1,495,327.88 |
Total | 186,378,204.50 | 170,613,436.15 |
46.Technology development expense
Items | Current year | Last year |
Employee benefit | 52,660,638.70 | 46,269,704.41 |
Raw material | 12,253,575.39 | 11,493,089.36 |
Depreciation and amortization expense | 6,409,516.10 | 4,541,949.24 |
Other expense | 5,469,075.50 | 2,965,022.22 |
Total | 76,792,805.69 | 65,269,765.23 |
47.Financial expenses
Items | Current year | Last year |
Interest expenses | 18,581,726.78 | 16,718,288.26 |
Less: interest income | 5,850,062.80 | 5,193,155.75 |
Add: exchange loss | -3,698,043.31 | -898,833.22 |
Add: others expenditure | 2,791,902.36 | 3,315,626.94 |
Total | 11,825,523.03 | 13,941,926.23 |
48.Other income
Items | Current year | Last year |
Government subsidy | 6,473,525.00 | 10,728,811.44 |
Land and property tax preference | 391,094.76 | - |
Gain on debt restructuring | 119,554.03 | - |
Job stability subsidy | 98,244.00 | - |
Personal income tax handling fee refund | 90,694.36 | 70,983.39 |
VAT return | 43.32 | - |
Total | 7,173,155.47 | 10,799,794.83 |
49.Investment income
Items | Current year | Last year |
Long-term equity investment gain under equity method | -37,218,861.27 | -85,710,592.25 |
Gain from disposal of long-term equity investment | 109,098,404.60 | 27,665,072.62 |
Gain from FV remeasurement of the shares on obtaining control | 170,729,805.79 | |
Gain from holding of other noncurrent financial assets | 20,671,710.39 | 7,255,249.48 |
Gain from disposal of other no-current financial assets | 43,296,525.04 | 2,523,680.32 |
Gain on debt restructuring | 110,913.39 | 819,297.68 |
Total | 306,688,497.94 | -47,447,292.15 |
50. Gain on fair value change
Source of gain on FV change | Current year | Last year |
Other noncurrent financial assets | -46,991,034.40 | 52,398,565.78 |
Total | -46,991,034.40 | 52,398,565.78 |
51.Credit impairment loss (loss listed as“-“)
Items | Current year | Last year |
Bad debt loss on notes receivable | -789,111.45 | 2,055,299.46 |
Bad debt loss on receivable | -77,384,660.21 | -97,597,742.66 |
Bad debt loss on other receivable | -4,020,227.27 | 107,768.08 |
Bad debt loss on long term receivable | -501,389.82 | 4,636,661.13 |
Total | -82,695,388.75 | -90,798,013.99 |
52.Assets impairment losses (loss listed as “-“)
Items | Current year | Last year |
Loss on impairment of inventory and cost to fulfill the contract obligation | -39,711,456.37 | -46,330,540.22 |
Loss of contract asset impairment | -30,814,338.63 | -3,296,146.61 |
Impairment on construction in progress | -4,300,000.00 | |
Total | -74,825,795.00 | -49,626,686.83 |
53.Gain on assets disposal (loss listed as “-“)
Item | Current year | Last year | Amounts recognized into current non-recurring profit or loss |
Gain on non-current assets disposal | 194,556.13 | 59,272.29 | 194,556.13 |
Including: gain on non-current assets disposal not classified as held for sale | 194,556.13 | 59,272.29 | 194,556.13 |
Including: gain on fixed assets disposal | 194,556.13 | 59,272.29 | 194,556.13 |
Total | 194,556.13 | 59,272.29 | 194,556.13 |
54. Non-operating income
(1) Non-operating income list
Item | Current year | Last year | Amounts recognized into non-recurring profit or loss for the year |
Penalty | 6,612,182.54 | 6,612,182.54 | |
Creditor giving up | 4,345,157.74 | 4,345,157.74 | |
Contract withdrawn and received in advance transferred to non-operating income | 432,311.90 | 2,983,246.50 | 432,311.90 |
Gain on disposal of non-current asset | 93,160.73 | 93,160.73 | |
Other items | 358,715.64 | 1,491,460.42 | 358,715.64 |
Total | 11,841,528.55 | 4,474,706.92 | 11,841,528.55 |
55.Non-operating expenses
Item | Current year | Last year | Amounts recognized into non-recurring profit or loss for the year |
Compensation | 2,813,844.43 | 7,680,000.00 | 2,813,844.43 |
Expected loss for open litigation | 2,019,000.00 | 2,019,000.00 | |
Non-current assets scrap loss | 191,291.12 | 1,474,287.01 | 191,291.12 |
Outward donation | 57,000.00 | 60,000.00 | 57,000.00 |
Inventory shortage | 2,303.16 | ||
Others | 123,404.80 | 402,800.25 | 123,404.80 |
Total | 5,204,540.35 | 9,619,390.42 | 5,204,540.35 |
56. Income tax expenses
(1) Income tax expenses
Items | Current year | Last year |
Current income tax expenses | 5,482.46 | 3,010,709.68 |
Deferred income tax expenses | 1,049,127.16 | -17,314,063.15 |
Total | 1,054,609.62 | -14,303,353.47 |
(2) Adjustment process of accounting profit and income tax expense
Items | Current year |
Consolidated total profit this year | 20,943,573.94 |
Income tax expenses at applicable tax rate | 3,141,536.09 |
Effect on subsidiary applied to different tax rate | -14,023,409.28 |
Effect on prior period income tax | 912,499.72 |
Effect on non-taxable income | -33,262,753.99 |
Effect on non-deductible cost, expense and loss | 2,747,804.82 |
Effect on use of deductible loss from unrecognized deferred tax assets in the prior period | -2,372,719.16 |
Effect on temporary difference or deductible loss from unrecognized deferred tax assets this year | 38,379,332.62 |
R&D expenditure accelerated deduction | -12,901,908.10 |
FA accelerated deduction | -6,742,781.09 |
Others | 25,177,007.99 |
Income tax expense | 1,054,609.62 |
Note: others reverse the effect on recognized deferred tax asset in the prior period
57. Other comprehensive income
Refer to the note “VI.38 Other comprehensive income” for details.
58. Notes to cash flow statement
(1) Cash receipt/payment of other operating/investing/financing activities
1) Other cash received relating to operating activities
Items | Current year | Last year |
Deposit given back | 43,441,397.62 | 41,513,085.25 |
Lease premium received | 14,641,754.19 | - |
Compensation | 10,248,694.24 | - |
Government grants | 5,669,861.48 | 14,489,543.00 |
Interest income | 5,128,719.77 | 4,037,645.63 |
Receivable from the 3rd party | 4,656,358.49 | - |
Frozen money refund | 3,407,480.07 | - |
Received travel expense refund | 3,180,530.19 | 2,497,395.96 |
Others | 2,065,719.26 | 1,755,419.70 |
Total | 92,440,515.31 | 64,293,089.54 |
2) Other cash paid relating to operating activities
Items | Current year | Last year |
Expenditure | 122,463,075.59 | 91,537,037.91 |
Deposit paid | 89,837,201.58 | 42,860,074.05 |
Business travel borrowing | 6,698,577.75 | 9,534,563.41 |
Unsettled AR/AP among non-related party | 2,896,588.50 | 9,027,444.39 |
Bank handling charges | 1,737,635.11 | 3,024,534.78 |
Frozen accounts | 209,197.14 | - |
Unsettled AR/AP among related party | - | 2,000,000.00 |
Others | 8,261,197.76 | 4,592,818.07 |
Total | 232,103,473.43 | 162,576,472.61 |
3) Others cash received relating to financing activities
Items | Current year | Last year |
Sale leaseback and financial lease | 12,000,000.00 | 27,476,663.49 |
Notes discounted | 11,991,047.27 | - |
Collection of guarantee money at the year end | - | 56,369,665.56 |
Total | 23,991,047.27 | 83,846,329.05 |
4) Others cash paid relating to financing activities
Items | Current year | Last year |
Sale& leaseback and financial lease | 25,415,743.25 | 22,971,894.19 |
Lease premium | 3,713,373.61 | 5,246,090.60 |
Payment of guarantee money | 75,003,788.58 | |
Purchase of minority interest | 8,765,615.00 | |
Total | 29,129,116.86 | 111,987,388.37 |
(2) Supplementary information of consolidated cash flow statement
Items | Current year | Last year |
1. Adjusting net profit into cash flows of operating activities: | —— | —— |
Net profit | 19,888,964.32 | -275,189,594.04 |
Items | Current year | Last year |
Add: Provision for impairment of assets | 74,825,795.00 | 49,626,686.83 |
Provision for impairment of credit | 82,695,388.75 | 90,798,013.99 |
Depreciation of fixed assets, Amortization of mineral resources, and biological assets | 82,258,092.89 | 85,379,019.94 |
Depreciation of right-of-use assets | 3,709,086.79 | 5,557,030.56 |
Amortization of intangible assets | 10,478,529.57 | 7,903,250.51 |
Amortization of long-term deferred expenses | 1,455,157.51 | 1,571,853.84 |
Losses on disposal of fixed assets, intangible assets, and long-term assets (income listed with”-”) | -194,556.13 | -59,272.29 |
Losses on write-off of fixed assets (income listed with”-”) | 98,130.39 | 1,536,590.17 |
Change of fair value profit or loss | 46,991,034.40 | -52,398,565.78 |
Financial expense (income listed with”-”) | 18,581,726.78 | 18,951,092.91 |
Investment loss (income listed with”-”) | -306,688,497.94 | 47,447,292.15 |
Decrease of deferred tax assets(increase listed with”-”) | 9,978,391.90 | -20,900,048.02 |
Increase of deferred tax liabilities(decrease listed with”-”) | -8,929,264.74 | 3,585,984.87 |
Decrease of inventories (increase listed with”-”) | -412,972,663.16 | -324,479,019.61 |
Decrease of operating receivables (increase listed with”-”) | -1,052,478,135.51 | -45,570,227.23 |
Increase of operating payables (decrease listed with”-”) | 1,374,055,519.82 | 407,758,129.57 |
Others | ||
Net cash flows arising from operating activities | -56,247,299.36 | 1,518,218.37 |
2. Significant investment and financing activities unrelated to cash income and expenses | ||
Liabilities transferred to capital | ||
Convertible bonds within 1 year | ||
Financing leased fixed assets | ||
3. Net increase (decrease) of cash and cash equivalent | ||
Closing balance of cash | 921,661,803.17 | 438,969,337.87 |
Less: Opening balance of cash | 438,969,337.87 | 314,978,460.49 |
Add: Closing balance of cash equivalent | ||
Less: Opening balance of cash equivalent | ||
Net increase of cash and cash equivalent | 482,692,465.30 | 123,990,877.38 |
(3) Net cash paid to acquisition of subsidiary
Items | Current year |
Cash & cash equivalent paid for acquisition | 1,010,883,060.00 |
Items | Current year |
-Sonyo Compressor(Dalian)Co.,Ltd. | 929,148,000.00 |
-Sonyo Refrigeration System (Dalian) Co., Ltd. | 81,735,060.00 |
Less: Cash & cash equivalent held by acquirees on acquisition date | 609,058,477.33 |
-Sonyo Compressor(Dalian)Co.,Ltd. | 577,692,867.34 |
-Sonyo Refrigeration System (Dalian) Co., Ltd. | 31,365,609.99 |
Net cash paid to acquisition of subsidiary | 401,824,582.67 |
(4) Net cash received from subsidiary disposal
Items | Current year |
Cash & cash equivalent received for disposal of subsidiary | 25,888,200.00 |
-Ningbo Bingshan Air-conditioning Refrigeration Engineering Co., Ltd | - |
-Bingshan Technology Service (Dalian) Co., Ltd. | 25,888,200.00 |
Less: Cash & cash equivalent held by the on the date of losing control | 20,624,106.10 |
-Ningbo Bingshan Air-conditioning Refrigeration Engineering Co., Ltd | 403,914.72 |
-Bingshan Technology Service (Dalian) Co., Ltd. | 20,220,191.38 |
Net cash received for disposal of subsidiary | 5,264,093.90 |
(5) Cash and cash equivalents
Items | Current year | Last year |
Cash | 921,661,803.17 | 438,969,337.87 |
Including: Cash on hand | 80,702.47 | 99,580.64 |
Bank deposit used for paying at any moment | 921,581,100.70 | 438,869,757.23 |
Other monetary fund for paying at any moment | - | - |
Deposit fund in central bank available for payment | - | - |
Cash equivalent | - | |
Including: bonds investment with maturity in 3 months | - | - |
Closing balance of cash and cash equivalents | 921,661,803.17 | 438,969,337.87 |
Cash and cash equivalents restricted in the parent company or subsidiary | - | - |
59. The assets with the ownership or use right restricted
Items | Current year | Reasons |
Monetary fund | 84,504,096.01 | Guarantee money frozen fund |
Notes Receivable | 98,917,384.72 | Pledge |
Receivable financing | 15,259,393.79 | Pledge |
Fixed asset | 62,207,555.51 | Pledge |
Intangible asset | 5,587,198.75 | Pledge |
Items | Current year | Reasons |
Investment asset | 32,981,247.79 | Pledge |
Total | 299,456,876.57 |
Note: The bank account of the company in Zhongshan Branch of Bank of China Limited hasbeen frozen at RMB 244,790.76, mainly because this account has not been applied for onlinebanking, resulting in the restricted use of the frozen bank account. The bank account of DalianBingshan Engineering & Trading Co., Ltd, a subsidiary of our company, has been frozen with209,197.14 Yuan in Shahekou Branch of Bank of Dalian Co., Ltd., mainly due to the fact thatthe account used to be a social security account, but it has been turned into a long-termsuspended account this year because it has been unused for a long timeSonyo Compressor(Dalian)Co.,Ltd bank account is restricted for use of 2,000.00Yuan as ETCdeposit. Dalian Bingshan Engineering & Trading Co., LtdThe bank account of Wuhan Lanning Energy Technology Co., Ltd in Bank of China LimitedWuhan Branch is frozen due to litigations, the amount is 94,500.00Yuan.Dalian Bingshan Air-conditioning Equipment Co., Ltd. pledged the bank acceptance note toICBC bank Dalian Chunliu Branch as guarantee for issuing the bank acceptance note.Dalian Bingshan Guardian Automation Co., Ltd.pledged the bank acceptance notes to DalianJinpu Branch of China Merchants Bank and Industrial Bank Co.,Ltd. Dalian Branch asguarantee for issuing the bank acceptance note.Dalian Universe Thermal Technology Co.,Ltd. pledged the bank acceptance note to ChinaMerchants bank Dalian Branch as guarantee for issuing the bank acceptance note.The Company’s subsidiary, Dalian Bingshan Engineering & Trading Co., Ltd pledged the bankacceptance note to Dalian Kaifaqu Branch of China Merchants Bank Co.,Ltd. as guarantee forissuing the bank acceptance note.The Company’s subsidiary, Wuhan New World Refrigeration Industry Co., LTD., mortgaged itsfixed assets, intangible assets and the investment real estate to China EverBright Bank Co.,LTD., Wuhan Branch, as an integrated limit of credit used for local and foreign loans, tradefinancing, discount, acceptance, letter of credit, letter of guarantee, factoring, guarantee andother specific credit business.
60. Monetary category of foreign currency
(1) Monetary category of foreign currency
Item | Closing Balance (foreign currency) | Exchange Rate | Closing Balance (RMB) |
Cash | 7,976,721.61 | ||
Including:USD | 754,513.09 | 6.9646 | 5,254,881.87 |
Item | Closing Balance (foreign currency) | Exchange Rate | Closing Balance (RMB) |
JPY | 26,114,971.00 | 0.0524 | 1,367,327.65 |
Euro | 182,477.48 | 7.4229 | 1,354,512.09 |
Accounts receivable | 51,043,328.79 | ||
Including: USD | 5,866,795.19 | 6.9646 | 40,859,881.78 |
JPY | 51,868,648.00 | 0.0524 | 2,715,738.67 |
Euro | 1,006,036.50 | 7.4229 | 7,467,708.34 |
Accounts payable | 8,035,293.46 | ||
Including: USD | 839,819.50 | 6.9646 | 5,849,006.89 |
GBP | 37,274.28 | 8.3941 | 312,884.03 |
JPY | 35,780,636.02 | 0.0524 | 1,873,402.54 |
61. Government Grants
(1) Basic information
Category | Amount | Disclosure | Amount recognized in current profit and loss |
Relocation compensation | 42,332,000.00 | Deferred income/other income | 1,114,000.00 |
Environmental protection and energy saving refrigeration and air conditioning compressor technology industrialization project | 31,000,000.00 | Deferred income/cost of sales/expense | 2,553,850.15 |
Application of combined compression NH3&Co2 replace R22 | 29,409,622.81 | Deferred income/cost of sales/expense | 1,999,533.16 |
R290 replace R22 | 13,006,663.20 | Deferred income | - |
Ultrasonic defrosting technology | 9,841,800.00 | Deferred income/cost of sales/expense/other income | 414,824.40 |
Refrigeration Compressor Intelligent Manufacturing System Fund | 5,000,000.00 | Deferred income/cost of sales/expense | 368,769.72 |
R290 replace R22 twin stage screw sets | 4,747,680.00 | Deferred income | - |
Champion in 2022 | 1,000,000.00 | Other Income | 1,000,000.00 |
Special fund for financing carrier | 612,282.00 | Other Income | 612,282.00 |
Industrial Design Center subsidy by Dalian Bureau | 600,000.00 | Other Income | 600,000.00 |
Category | Amount | Disclosure | Amount recognized in current profit and loss |
of Industry and Information Technology | |||
Enterprise Technology Center subsidy by Dalian Bureau of Industry and Information Technology | 500,000.00 | Other Income | 500,000.00 |
Subsidy for R&D in 2018 | 458,000.00 | Other Income | 458,000.00 |
Vocational skills training subsidies | 394,826.00 | Other Income | 394,826.00 |
Export credit insurance premium support fund | 332,100.00 | Other Income | 332,100.00 |
Digital Special fund by province | 300,000.00 | Other Income | 300,000.00 |
Special skilled new enterprise reward | 200,000.00 | Other Income | 200,000.00 |
High-tech enterprise recognition subsidy | 200,000.00 | Other Income | 200,000.00 |
1st Foster fund for technical business development | 150,000.00 | Other Income | 150,000.00 |
International market support fund | 147,752.00 | Other Income | 147,752.00 |
“size upgrade” reward | 100,000.00 | Other Income | 100,000.00 |
Dalian Jinpu Finance Center-after R&D investment subsidy | 90,000.00 | Other Income | 90,000.00 |
Subsidy of FY2022 | 50,000.00 | Other Income | 50,000.00 |
Job provider subsidy by HNT district Finance Center | 40,000.00 | Other Income | 40,000.00 |
2019 fund for M&S enterprises by Commercial Bureau | 36,365.00 | Other Income | 36,365.00 |
Graduate employment subsidy in Jinpu district | 33,000.00 | Other Income | 33,000.00 |
Special fund by innovation center | 30,000.00 | Other Income | 30,000.00 |
Refrigeration tests APP | 27,500.00 | Other Income | 7,500.00 |
Others | 47,900.00 | Other Income | 47,900.00 |
Total | 140,687,491.01 | Other Income | 11,780,702.43 |
VII. Change of Consolidation Scope
1. Business combination not under same control
(1) Business combination not under same control this year
Acquiree | Share acquisition point | Cost | (%) | Method |
Sonyo Compressor(Dalian)Co.,Ltd. | 2022-11-11 | 929,148,000.00 | 60.00 | Purchase with agreement |
Sonyo Refrigeration System (Dalian) Co., Ltd. | 2022-11-11 | 81,735,060.00 | 55.00 | Purchase with agreement |
(continued)
Acquiree | Acquisition date | Basis for acquisition date | Revenue between acquisition date and the year end | Net profit between acquisition date and the year end |
Sonyo Compressor(Dalian)Co.,Ltd. | 2022-11-11 | Transfer of control | 194,961,546.08 | 14,798,780.53 |
Sonyo Refrigeration System (Dalian) Co., Ltd. | 2022-11-11 | Transfer of control | 64,742,634.97 | 3,524,253.54 |
(2) Combination cost and goodwill
Item | Sonyo Compressor(Dalian)Co.,Ltd. | Sonyo Refrigeration System (Dalian) Co., Ltd. |
Cash | 929,148,000.00 | 81,735,060.00 |
FV of non-cash asset | - | - |
FV of bond issued or undertaken | - | - |
FV of equity security issued | - | - |
FV of contingent consideration | - | - |
FV of shareholding held prior to acquisition on acquisition date | 619,432,000.00 | 29,721,840.00 |
Total of combination cost | 1,548,580,000.00 | 111,456,900.00 |
Less: proportion of FV of identifiable net asset obtained | 1,307,657,127.20 | 105,785,063.88 |
The difference between goodwill/cost of combination less and proportion of FV of identifiable net asset obtained | 240,922,872.80 | 5,671,836.12 |
(3) Identifiable asset, liability of acquiree on acquisition date
Items | Sonyo Compressor(Dalian)Co.,Ltd. | Sonyo Refrigeration System (Dalian) Co., Ltd. | ||
FV on acquisition date | FV on acquisition date | FV on acquisition date | FV on acquisition date | |
Assets: | 1,708,920,739.48 | 1,497,875,893.46 | 580,996,035.18 | 574,567,097.60 |
Monetary funds | 577,694,867.34 | 577,694,867.34 | 45,881,484.36 | 45,881,484.36 |
Accounts receivable | 497,460,339.10 | 497,460,339.10 | 427,343,627.20 | 427,343,627.20 |
Prepayments | 8,633,385.14 | 8,633,385.14 | 20,582,759.69 | 20,582,759.69 |
Inventory | 137,165,318.48 | 137,165,318.48 | 42,091,945.53 | 41,118,849.14 |
Items | Sonyo Compressor(Dalian)Co.,Ltd. | Sonyo Refrigeration System (Dalian) Co., Ltd. | ||
FV on acquisition date | FV on acquisition date | FV on acquisition date | FV on acquisition date | |
Long-term equity investment | 35,261,687.95 | 33,895,538.72 | - | - |
Fixed assets | 395,362,362.65 | 199,138,504.47 | 15,910,888.11 | 11,266,758.04 |
Construction in process | 15,192,005.51 | 15,192,005.51 | 2,622,813.23 | 2,622,813.23 |
Right-of-use assets | 8,509,554.21 | 8,509,554.21 | 9,872,833.82 | 9,872,833.82 |
Intangible assets | 23,663,683.43 | 10,208,844.82 | 3,403,888.97 | 2,592,177.85 |
Deferred tax asset | 9,793,210.25 | 9,793,210.25 | 13,409,276.32 | 13,409,276.32 |
Liability: | 401,263,612.28 | 369,606,885.38 | 439,949,283.35 | 438,984,942.71 |
Accounts payable | 294,750,151.17 | 294,750,151.17 | 383,039,739.74 | 383,039,739.74 |
Employee payable | 47,756,322.97 | 47,756,322.97 | 21,555,327.79 | 21,555,327.79 |
Lease liability | 7,835,055.16 | 7,835,055.16 | 10,508,029.25 | 10,508,029.25 |
Provision | 18,216,788.28 | 18,216,788.28 | - | - |
Deferred Tax liability | 31,656,726.90 | - | 964,340.64 | - |
Net asset | 1,307,657,127.20 | 1,128,269,008.08 | 141,046,751.83 | 135,582,154.89 |
les:Minority interest | - | - | - | - |
Net asset obtained | 1,307,657,127.20 | 1,128,269,008.08 | 141,046,751.83 | 135,582,154.89 |
(4) Gain/loss on FV revaluation of shareholdings held prior to acquisition date
Acquiree | BV of Shareholding held before acquisition on acquisition date | FV of Shareholding held before acquisition on acquisition date | Gain/loss on remeasurement of Shareholding held before acquisition at FV on acquisition date |
Sonyo Compressor(Dalian)Co.,Ltd. | 451,307,603.23 | 619,432,000.00 | 168,124,396.77 |
Sonyo Refrigeration System (Dalian) Co., Ltd | 27,116,430.98 | 29,721,840.00 | 2,605,409.02 |
(continued)
Acquiree | FV determination method of shareholding held before acquisition & main assumption on acquisition date | Investment income transferred from other comprehensive income from shareholding held before acquisition |
Sonyo Compressor(Dalian)Co.,Ltd. | Adjust based on purchasing price | - |
Sonyo Refrigeration System (Dalian) Co., Ltd | Adjust based on purchasing price | - |
2. Disposal of subsidiary
Subsidiary | Share price | (%) | Disposal method | Point of losing control | recognition basis of losing control | Share price less % of shareholdings of net asset of respective subsidiary |
Bingshan Technology Service (Dalian) Co., Ltd | 25,888,200.00 | 100.00 | sold | 2022-3-1 | Share transfer completion | 5,568,934.31 |
Ningbo Bingshan Air-conditioning Refrigeration Engineering Co., Ltd | - | 51.00 | sold | 2022-6-9 | Share transfer completion | 719,165.16 |
(continued)
Subsidiary | Remaining share percentage at the point of losing control | Carrying amount of remaining share percentage at the point of losing control | FV of remaining share percentage at the point of losing control | Gain/loss on remeasurement of remaining shareholding | FV determination method of remaining shareholding & key assumption at the point of losing control | Investment income transferred from other comprehensive income from shareholding in previous subsidiary |
Bingshan Technology Service (Dalian) Co., Ltd | - | - | - | - | - | - |
Ningbo Bingshan Air-conditioning Refrigeration Engineering Co., Ltd | - | - | - | - | - | - |
3. Consolidation scope change from other reason
NoneVIII. Interest in other entity
1.Equity of subsidiaries
(1) Organization structure of group company
Name of subsidiaries | Main business address | Registered address | Business nature | Shareholding (%) | Obtaining method | |
Direct | Indirect | |||||
Dalian Bingshan Group Engineering Co., Ltd. | Dalian | Dalian | Installation | 100 | Establish | |
Chengdu Bingshan Refrigeration Engineering Co., Ltd. | Chengdu | Chengdu | Service | - | 51.00 | Establish |
Dalian Bingshan Group Sales Co., Ltd. | Dalian | Dalian | Trading | 100 | Establish | |
Dalian Bingshan Air-conditioning Equipment Co., Ltd. | Dalian | Dalian | Manufacturing | 100 | Establish | |
Dalian Bingshan Guardian Automation Co., Ltd. | Dalian | Dalian | Manufacturing | 100 | Establish | |
Dalian Bingshan-RYOSETSU Quick Freezing Equipment Co., Ltd. | Dalian | Dalian | Manufacturing | 100 | Establish | |
Wuhan New World Refrigeration Industrial Co., Ltd. | Wuhan | Wuhan | Manufacturing | 100 | Acquisition | |
Wuhan New World Air-conditioning Refrigeration Engineering Co., Ltd | Wuhan | Wuhan | Installation | 100 | Establish | |
Wuhan Lanning Energy Technology Co., Ltd. | Wuhan | Wuhan | Trading | 100 | Acquisition | |
Dalian Universe Thermal Technology Co.,Ltd. | Dalian | Dalian | Manufacturing | 55 | Acquisition | |
Dalian Bingshan Engineering & Trading Co., Ltd | Dalian | Dalian | Service | 100 | Acquisition | |
Sonyo Compressor(Dalian)Co.,Ltd. | Dalian | Dalian | Manufacturing | 100 | Acquisition | |
Sonyo Refrigeration System (Dalian) Co., Ltd. | Dalian | Dalian | Manufacturing | 100 | Acquisition |
1) All the proportion of shareholding in subsidiaries were the same with voting right.
2) The Company held over 50% voting right in subsidiaries and could control thesesubsidiaries with over 50% voting right.
(2) There are no significant non-subsidiaries.
2.Change of equity share in subsidiary which is still under control
(1) Change of equity share in subsidiary
(2) Effect on equity due to change of equity share
Item | Wuhan Lanning Energy Technology Co., Ltd. |
Cash | - |
FV of non-cash asset | - |
Sum of combination cost/ disposal consideration | - |
Less: share of net asset obtained based on shareholding ratio | -6,898,603.01 |
The difference | -6,898,603.01 |
Including adjustments | |
capital reserve | -3,512,172.40 |
Surplus reserve | - |
Undistributed profit | -3,386,430.61 |
3.Equity in joint venture arrangement or associated enterprise
(1) The important affiliated companies
Name of joint ventures or affiliated companies | Main business address | Registered address | Business nature | Shareholding (%) | Accounting methods | |
Direct | Indirect | |||||
Dalian Fuji Bingshan Vending Machine Co., Ltd | Dalian | Dalian | Manufacturing | 49.00 | Equity method | |
Jiangsu Jingxue Insulation Technology Co.,Ltd | Changzhou | Changzhou | Manufacturing | 14.91 | Equity method | |
Dalian Bingshan Metal Technology Co., Ltd. | Dalian | Dalian | Manufacturing | 49.00 | Equity method |
1) The Company has the same percentage of shareholding and voting right in joint-venture or
affiliated company.
2) The Company has an affiliated company, Jiangsu Jingxue Insulation Technology Co.,Ltd, whichhas significant influence although being held less than 20% voting rights. The Company is theshareholder of Jiangsu Jingxue Insulation Technology Co.,Ltd with over 5% shareholding.
3) The Company doesn’t have joint venture or affiliated companies which have no significantinfluence although being held 20% or more voting rights.
(2) The key financial information of affiliated companies
Items | Closing balance/Current year | ||
Dalian Fuji Bingshan Vending Machine Co., Ltd | Jiangsu Jingxue Insulation Technology Co.,Ltd | Dalian Bingshan Metal Technology Co., Ltd. | |
Current assets | 447,012,221.67 | 1,357,769,579.89 | 331,577,731.99 |
Including: Cash and cash equivalents | 8,768,885.75 | 210,766,589.69 | 171,454,780.42 |
Non-current assets | 220,481,862.47 | 302,638,265.60 | 36,680,264.69 |
Total assets | 667,494,084.14 | 1,660,407,845.49 | 368,257,996.68 |
Current liabilities | 391,692,836.48 | 827,081,128.54 | 49,800,779.28 |
Non-current liabilities | 49,526,450.43 | 29,830,925.61 | - |
Total liabilities | 441,219,286.91 | 856,912,054.15 | 49,800,779.28 |
Minority interests | - | 449,591.20 | - |
Equity to the parent company | 226,274,797.23 | 803,046,200.14 | 318,457,217.40 |
Share of net assets according to the shareholding proportions | 110,874,650.64 | 119,734,188.43 | 156,044,036.52 |
Adjusting events | - | - | - |
—Goodwill | 226,689.29 | 20,390,060.33 | 19,269,770.94 |
—Unrealized profits of insider trading | - | - | - |
--Others | - | - | |
Book value of equity investment of affiliated companies | 111,101,339.93 | 140,124,248.76 | 175,313,807.46 |
Fair value of equity investment with public offer | - | - | - |
Operating income | 175,460,421.16 | 902,517,681.24 | 433,120,778.54 |
Financial expense | 10,357,794.72 | 854,477.47 | -7,161,210.92 |
Income tax expense | -10,755.71 | 2,621,080.54 | 9,728,042.54 |
Net profit | 2,430,819.76 | 39,722,362.41 | 62,395,419.10 |
Net profit of discontinuing operation | |||
Other comprehensive income | |||
Total comprehensive income | 2,430,819.76 | 39,722,362.41 | 62,395,419.10 |
The current dividends received from joint ventures | - | 4,732,344.00 | 23,402,022.05 |
(Continued)
Items | Opening balance/Last year | ||||
Dalian Fuji Bingshan Vending Machine Co., Ltd | Panasonic Appliances cold Chain(Dalian) Co.,Ltd | Sonyo Compressor(Dalian) Co.,Ltd | Jiangsu Jingxue Insulation Technology Co.,Ltd | Dalian Bingshan Metal Technology Co., Ltd. | |
Current assets | 519,702,256.24 | 1,581,760,317.20 | 1,277,834,286.47 | 1,288,722,048.45 | 330,379,711.49 |
Including: Cash and cash equivalents | 41,894,346.04 | 22,381,748.30 | 112,967,780.24 | 197,139,783.12 | 133,070,727.90 |
Non-current assets | 234,103,971.93 | 290,838,647.69 | 307,229,051.83 | 235,300,482.93 | 39,596,544.29 |
Total assets | 753,806,228.17 | 1,872,598,964.89 | 1,585,063,338.30 | 1,524,022,531.38 | 369,976,255.78 |
Current liabilities | 373,521,152.88 | 1,051,572,145.31 | 396,672,114.65 | 709,690,258.17 | 65,843,251.71 |
Non-current liabilities | 4,618,886.45 | 12,302,083.99 | 29,936,172.21 | 29,832,096.59 | - |
Total liabilities | 378,140,039.33 | 1,063,874,229.30 | 426,608,286.86 | 739,522,354.76 | 65,843,251.71 |
Minority interests | - | - | - | 484,306.52 | - |
Equity to the parent company | 375,666,188.84 | 214,723,516.35 | 1,156,846,384.28 | 784,015,870.10 | 304,133,004.07 |
Share of net assets according to the shareholding proportions | 148,440,479.34 | 85,889,406.54 | 462,738,553.71 | 171,770,036.98 | 149,025,171.99 |
Adjusting events | - | - | - | - | - |
—Goodwill | 226,689.29 | 4,440,630.89 | - | 29,961,491.06 | 19,269,770.94 |
—Unrealized profits of insider trading | - | - | - | - | - |
--Others | -11,153.88 | - | -2,678,304.22 | - | - |
Book value of equity | 148,656,014.75 | 90,330,037.43 | 460,060,249.49 | 201,731,528.04 | 168,294,942.93 |
Items | Opening balance/Last year | ||||
Dalian Fuji Bingshan Vending Machine Co., Ltd | Panasonic Appliances cold Chain(Dalian) Co.,Ltd | Sonyo Compressor(Dalian) Co.,Ltd | Jiangsu Jingxue Insulation Technology Co.,Ltd | Dalian Bingshan Metal Technology Co., Ltd. | |
investment of affiliated companies | |||||
Fair value of equity investment with public offer | - | - | - | - | - |
Operating income | 239,782,015.85 | 1,513,254,711.28 | 1,117,036,108.61 | 914,019,079.37 | 467,909,048.44 |
Financial expense | 5,192,848.35 | 24,987,011.19 | 1,116,677.52 | 1,535,270.95 | -961,474.38 |
Income tax expense | 30,729.79 | -27,060,054.40 | 11,921,990.57 | 9,147,959.86 | 7,639,671.65 |
Net profit | 284,537.72 | -282,147,957.09 | 83,697,007.01 | 67,100,790.28 | 48,486,526.57 |
Net profit of discontinuing operation | - | - | - | - | - |
Other comprehensive income | - | - | - | - | - |
Total comprehensive income | 284,537.72 | -282,147,957.09 | 83,697,007.01 | 67,100,790.28 | 48,486,526.57 |
The current dividends received from joint ventures | - | 2,797,849.22 | 32,773,200.00 | - | 28,648,633.78 |
(3)Summary financial information of insignificant affiliated companies
Items | Current year | Last year |
Affiliated company | ||
Total book value of investment of affiliated companies | 123,418,337.24 | 158,059,185.33 |
The total of following items according to the shareholding proportions | — | |
Net profit | 28,021,453.13 | 2,067,871.70 |
Other comprehensive income | - | - |
Total comprehensive income | 28,021,453.13 | 2,067,871.70 |
(4)Significant restrictions of the ability of affiliated companies transferring funds to theCompany.
No.
(5)Contingency related to joint venture or affiliated company need to be disclosed.
No.IX. Risk Related to Financial InstrumentsThe main financial instruments held by the Company are borrowings, accounts receivable,accounts payable, other non-current financial asset etc. The detailed explanation is referred tothe note No.VI. The related risks of these financial instruments and the risk management policyconducted to reduce these risks by the Company are introduced as below. The Companymanagement conducts to manage and monitor these risks exposure and control these risks undercertain risk level.
1. Objectives and policies of each risk management
The objectives of risk management conducted by the Company are to reach the balance betweenrisk and profit return by reducing the negative influence to operating performance to theminimum level as well as maximizing the shareholders’ and other investors’ profits. Based onthese objectives, the basic risk management policy is to recognize and analyze all sorts of riskthat the Company faced with, to set up the proper risk tolerance bottom line conducting riskmanagement, as well as to monitor these risks in a timely and effective manner, and to ensurethese risks under the limit level.
(1) Market risk
1) Exchange rate risk
Most of the Company’s business is located in China, and settled with RMB. But the Company
defined exchange rate risk of assets, liabilities dominated in foreign currency and futuretransaction dominated in foreign currency (mainly including USD, JPY, EURO,HKD and GBP).The financial department of the Company monitors the Company’s foreign currency transactionand the scale of foreign assets and liabilities, and decreases exchange rate risk. During thecurrent year the Company did not agree any forward foreign exchange contract or currencyswap contract .As at 31st December 2022, the Company’s assets and liabilities dominated inforeign currency are listed in RMB as following:
Items | Closing Balance | Opening balance |
Monetary fund-USD | 5,254,881.87 | 2,612,773.25 |
Monetary fund-JPY | 1,367,327.65 | 47,611.63 |
Monetary fund- EURO | 1,354,512.09 | - |
Monetary fund-GBP | - | 0.86 |
Receivable- GBP | - | 1,465,771.99 |
Receivable -USD | 40,859,881.78 | 27,126,714.76 |
Receivable -JPY | 2,715,738.67 | 1,226,730.38 |
Receivable - EURO | 7,467,708.34 | - |
Payables -USD | 5,849,006.89 | 4,680,703.58 |
Payables - EURO | - | 9,602.20 |
Payables -JPY | 1,873,402.54 | 93,138.00 |
Payables - GBP | 312,884.03 | 320,797.36 |
The Company paid close attention to the effect on FX risk.
2) Interest rate risk
The interest risk of the Company incurred from bank loan, risk of a floating interest rate of financialliabilities that lead to the Company facing cash flow interest rate risk, financial liabilities with a fixedinterest rate lead to the Company facing cash flow interest rate risk. The company determined theproportion of fixed interest rate and floating interest rate according the current market circumstance. TheCompany’s interest-bearing debt is borrowings of RMB 740,000,000.00 at fixed interest rate as ofDecember 31,2022(borrowings of RMB 150,000,000.00 in2021).The financial department of the Company continuously monitors the interest rates level, and themanagement would make some adjustment to lower the interest rate risk according to the latest marketsituation. Climbing interest rate will increase the cost of newly increased interest-bearing liability andinterest expense for unsettled interest-bearing liability at floating rate and have adverse effect on thebusiness performance.The sensitive analysis:
As at 31st December 2022, based on the assumption of interest rate change of 50 BP, the Company’s net
profit of current year will increase or decrease3.7 million Yuan.
3) Price risk
The price risk of the Company is mainly commodity price risk. The Company sells products at marketprices. As the national economy enters the "new normal", the manufacturing industry is under greateconomic downward pressure, and the drastic fluctuations of bulk material prices have a certain impacton the Company's operations.
(2) Credit risk
The credit risk of the Company comes from monetary fund, notes receivable, accounts receivable, andother accounts receivable etc. The management made credit policies and monitored changes of thiscredit exposure.The Company's monetary fund was in bank with higher credit rating, so there was no significant creditrisk, nor significant losses due to the default of other entity. Upper limit policy is adopted to avoid anycredit risk from financial institution.The Company made relevant policy to control credit risk exposure from receivable, other receivable andnotes receivable. The Company assesses the client’s credit background according to the client’s financialperformance, possibility of obtaining guarantee from the 3rd party, credit record and other factors suchas current market. The Company will periodically monitor the credit situation of the client and will takemeasures such as prompt letter, shorten credit period or cancel the credit to ensure the overall credit riskwithin the controllable scope.As at 31st December 2022, the top five customers of receivable accounts balance are230,971,161.93Yuan.
(3) Liquidity risk
Liquidity risk was referred to the risk of shortage of funds incurred when the enterprise fulfills theobligation of settlement by cash or other financial assets. The way to manage the liquidity risk is toensure enough fund available to fulfill the liability by due date in prevention from unacceptable loss ofor reputation damage to the Company. The Company periodically analyze the liability structure andexpiry date and the financial department of the Company continued to monitors the short term orlong-term capital needs to ensure maintain plenty of cash flow. And the same time they also monitor thecondition of bank loan agreements and obtain commitments from banks to reduce liquidity risks.The fund mainly comes from bank loan. By December 31
st, 2022, the credit limit still available is 499.50million Yuan and short-term credit limit available is 499.50 million Yuan.As at 31
st
December 2022, the Company’s financial assets and financial liabilities in line withnon-discounted cash flow of the contracts as following: Currency unity:10kYuan
Items | Within 1 year | 1-2 years | 2-5 years | Over 5 years | Total |
Financial Assets | |||||
Cash and cash in bank | 100,616.59 | - | - | - | 100,616.59 |
Notes receivable | 50,594.53 | - | - | - | 50,594.53 |
Accounts receivable | 140,997.84 | - | - | - | 140,997.84 |
Financing receivable | 5,879.28 | - | - | - | 5,879.28 |
Other Receivable | 5,139.45 | - | - | - | 5,139.45 |
Contract asset | 22,579.09 | - | - | - | 22,579.09 |
Non-current asset due within 1 year | 1,571.56 | - | - | - | 1,571.56 |
Long-term receivable | - | 516.25 | - | - | 516.25 |
Other noncurrent financial asset | - | - | - | 14,995.09 | 14,995.09 |
Financial Liabilities | — | — | — | — | — |
Short-term loan | 27,405.30 | - | - | - | 27,405.30 |
Notes Payable | 61,894.44 | - | - | - | 61,894.44 |
Accounts payable | 158,609.81 | - | - | - | 158,609.81 |
Other payable | 6,705.43 | - | - | - | 6,705.43 |
Employee’s payable | 11,821.67 | - | - | - | 11,821.67 |
Tax payable | 3,369.15 | - | - | - | 3,369.15 |
Non-current liability due within 1 year | 6,310.60 | - | - | - | 6,310.60 |
Long-term loan | - | 5,040.00 | 54,300.00 | 12,170.00 | 71,510.00 |
Lease obligation | - | 321.88 | 391.62 | 409.55 | 1,123.05 |
Long-term payable | - | 1,825.66 | 1,275.30 | - | 3,100.96 |
X. Disclosure of Fair Value
1. Amount and measurement level of the assets and liabilities measured at fair value at the year
end
Items | Fair value at the year end | |||
First level measurement of fair value | Second level measurement of fair value | Third level measurement of fair value | Total | |
Financial assets Continuously measured at FV available for sale | — | — | — | — |
Items | Fair value at the year end | |||
First level measurement of fair value | Second level measurement of fair value | Third level measurement of fair value | Total | |
Receivable financing | - | 58,792,792.70 | - | 58,792,792.70 |
Other non-current financial asset | 148,267,008.72 | - | 1,683,852.59 | 149,950,861.31 |
Total | 148,267,008.72 | 58,792,792.70 | 1,683,852.59 | 208,743,654.01 |
2. Basis for Market price of first level measurement of fair value
Equity instrument portion of the other noncurrent financial asset is measured at the unadjustedclosing quoted price on stock market on December 31, 2022.
3. For continuous and discontinuous 2nd level of FV, valuation technique adopted and keyparameter quantitive and qualitive information.Bank acceptance notes (receivable financing) as measured at fair value through othercomprehensive income is within this scope. Bank acceptance notes held by the Companymainly are high credit grading from the large commercial bank. As the remaining maturity isshort and credit risk is very low, on the balance sheet date, the book value of bank acceptancenotes receivable is similar to fair value.
4. For continuous and discontinuous 3rd level of FV, valuation technique adopted and keyparameter quantitive and qualitive information.As of December 31, 2022, the book value of the share investment in Guotai Junan InvestmentManagement Co.,Ltd and Wuhan Steel and Power Co.,Ltd is 1,683,852.59 Yuan. It ispresented as other non-current financial asset in accordance with No.22- financial instrumentrecognition and measurement of Accounting Standards for Business Enterprises. Havingconsidered there is neither active market for invested company’s share nor market price isavailable for reference, and it is not feasible to obtain the relevant observable input value. FVof the investment is measured at cost by taking influence factor of FV into consideration.
5. For continuous 3
rd
level of FV, adjusted information of opening and closing balance andsensitivity analysis of unobservable parameter.No.
6. Assets continuously measured at fair value have switched among different level during the
year.No.
7. Changes of valuation technique and reasons for changes
No.
8. Assets and liability are disclosed at FV rather than measured at FV
No.XI. Related Parties Relationship and Transactionsi. Related parties’ relationship
1. Controlling shareholder and ultimate controller
(1) Controlling shareholder and ultimate controller
Parent company | Registered address | Business nature | Registered capital | Shareholding percentage (%) | Voting power percentage (%) |
Dalian Bingshan Group Co., Ltd. | Dalian | Manufacture | 158,580,000.00 | 20.27 | 20.27 |
Note: Dalian Bingshan Group Co., Ltd. is a Sino –foreign joint venture located No.106 LiaoheEast Road, DDZ, Dalian, China. The legal representative of Dalian Bingshan Group Co., Ltd. isMr. Ji Zhijian, and the registered capital is RMB158.58 million. The registered businessoperation period is from 3rd July 1985 to 2nd July 2035. The business scope includes research,development, manufacture, sales, service and installment of refrigeration equipment, coolingand freezing equipment, different size of air-conditioners, petrochemical equipment, electronicand electronic- control products, home electronic appliance, environment protect equipment andetc. (unless the licenses needed)
(2) Change of registered capital of controlling shareholder
Controlling shareholder | Opening balance | Increase | Decrease | Closing balance |
Dalian Bingshan Group Co., Ltd. | 158,580,000.00 | 158,580,000.00 |
(3) Change of proportion of controlling shareholder’s shareholding and equity
Controlling shareholder | Shareholding amount | Ratio of shareholding(%) | ||
Closing balance | Opening balance | Ratio at year end | Ratio at beginning of year | |
Dalian Bingshan Group Co., Ltd. | 170,916,934.00 | 170,916,934.00 | 20.27 | 20.27 |
2. Subsidiaries
Referrer to the content in the Note “VIII. 1. (1) Organization structure of group company”.
3. Affiliated company and joint venture
The information of the affiliated company and joint venture please refers to the note “VIII. 3.(1)The significant affiliated company and joint venture’. The Company had transactions withrelated parties during the current period or last period, including:
Names of the joint ventures or affiliated company | Relationships with the Company |
Keinin-Grand Ocean Thermal Technology (Dalian) Co., Ltd. | Affiliated company of the Company |
Dalian Fuji Bingshan Vending Machine Co., Ltd. | Affiliated company of the Company |
Dalian Fuji Bingshan Vending Machine Sales Co., Ltd. | Affiliated company of the Company |
Jiangsu Jingxue Insulation Technology Co.,Ltd. | Affiliated company of the Company |
MHI Bingshan Refrigeration (Dalian) Co.,Ltd. | Affiliated company of the Company |
Dalian Honjo Chemical Co., Ltd. | Affiliated company of the Company |
Dalian Bingshan Metal Technology Co.,Ltd. | Affiliated company of the Company |
Dalian Bingshan Group Huahuida Financial Leasing Co., Ltd. | Affiliated company of the Company |
Beijing Huashang Bingshan Refrigeration and Air-conditioning Machinery Co., Ltd. | Jan.2022 and Nov.2022 |
Panasonic Appliances cold Chain(Dalian)Co.Ltd. | Jan.2022 and Nov.2022 |
Sonyo Compressor(Dalian)Co.,Ltd. | Jan.2022 and Oct.2022 |
Sonyo Refrigeration System (Dalian) Co., Ltd. | Jan.2022 and Oct.2022 |
Dalian Jingxue Freezing Equipment Co., Ltd. | Subsidiary of its affiliated company |
Shanghai Jingxue Freezing Equipment Co., Ltd. | Subsidiary of its affiliated company |
Jiangsu Jingxue Insulation Environmental Engineering Co.,Ltd. | Subsidiary of its affiliated company |
Wuhan Sikafu Power Control Equipment Co., Ltd. | Affiliated company of its subsidiary |
4. Other related parties
Name of related party | Related party relationship |
Company under direct/indirect Control of Panasonic Co.,Ltd | Both parties are under the control of or significant influence by the same party |
Sanyo Corporation | Both parties are under the control of or significant influence by the same party |
Panasonic Corporation of China Co., Ltd | Directors of the Company also serve as directors |
Dalian Spindle Environmental Facilities Co., Ltd. | Affiliated company of Dalian Bingshan Group |
LINDE HYDROGEN FUELTECH (DALIAN) CO., LTD. | Affiliated company of Dalian Bingshan Group |
Dalian Shentong Electric Co., Ltd. | Affiliated company of Dalian Bingshan Group |
Dalian Fuji Bingshan Control System Co., Ltd. | Affiliated company of Dalian Bingshan Group |
BAC Dalian Co., Ltd. | Affiliated company of Dalian Bingshan Group |
Dalian Bingshan Huigu Development Co., Ltd. | Joint Venture of Dalian Bingshan Group |
Dalian Bingshan Part Technology Co.,LTD. | Subsidiary of Dalian Bingshan Group |
Alphavita Bio-scientific (Dalian) Co., Ltd. | Subsidiary of Dalian Bingshan Group |
Bingshan Technology Service (Dalian) Co., Ltd. | Subsidiary of Dalian Bingshan Group |
Dalian Kaierwen Science Co.,Ltd. | Subsidiary of Dalian Bingshan Group’s Subsidiary(deregistered) |
Dalian Zhonghuida Refrigeration Technology Co., Ltd | Directors and senior officers of the Company serve as directors and senior officers in Dalian Zhonghuida Refrigeration Technology Co., Ltd Company |
Note: Companies under direct/indirect Control of Panasonic Co.,Ltd are PanasonicProcurement(CHINA)Co.,Ltd, Panasonic Home AppliancesAir-Conditioning(Guangzhou)Co.,Ltd, Panasonic Appliances Air-Conditioning andRefrigeration(Dalian)Co.,Ltd, Panasonic Appliances cold Chain(Dalian)Co.Ltd(December2022), Panasonic Wanbao(Guangzhou) Compressor Co.,Ltd, Panasonic Industry (China) Co.,Ltd, Panasonic Electronic Devices(Jiangmen)Co.,Ltd,Panasonic R&D Center Suzhou Co.,LtdDalian Branch, Beijing 2
ndBranch of Panasonic Electric Equipment (China)Co.,Ltd, PanasonicElectric Taiwan Co.,Ltd, Panasonic Corporation, Panasonic Industry Sales Asia, Panasonic DoBrasil Limitada-Miam, Panasonic Automotive & Industrial, Panasonic AppliancesAir-Conditioning, Panasonic Industrial Devices Sales, Panasonic Industry Europe GmbH,Panasonic Life Solutions India, Panasonic Taiwan Co.,Ltd., Panasonic Commercial EquipmentSystems Asia Pacific, Panasonic Sales Taiwan Co.,Ltd, Panasonic Appliances Air-ConditioningMalaysia Sdn.BHD, Panasonic Commercial Equipment Systems Taiwan Co.Ltd, PanasonicIndia Pvt Ltd (APIN)ii. Related Party transactions
1. Purchase of goods, offer and receive labour services etc inter-group transactions
(1) Purchase of goods/receive labour services
Related party | Content | Current year | Last year |
BAC Dalian Co., Ltd. | Purchases of goods | 32,827,251.97 | 26,483,606.45 |
Company under direct/indirect Control of Panasonic Co.,Ltd | Purchases of goods | 24,447,037.82 | - |
Dalian Bingshan Part Technology Co.,LTD. | Purchases of goods | 10,938,171.74 | 4,288,651.47 |
Dalian Bingshan Metal Technology Co.,Ltd. | Purchases of goods | 10,017,493.41 | 61,988.75 |
Dalian Shentong Electric Co., Ltd. | Purchases of goods | 9,480,036.79 | - |
Jiangsu Jingxue Insulation Technology Co.,Ltd. | Purchases of goods | 5,390,801.78 | 34,088,451.31 |
Sonyo Refrigeration System (Dalian) Co., Ltd. | Purchases of goods | 4,947,268.89 | 8,212,752.63 |
Bingshan Technology Service (Dalian) Co., Ltd. | Purchases of goods | 2,047,836.64 | - |
Dalian Fuji Bingshan Control System Co., Ltd. | Purchases of goods | 1,718,811.27 | - |
Dalian Spindle Environmental Facilities Co., Ltd | Purchases of goods | 1,407,486.73 | 1,895,034.78 |
Dalian Fuji Bingshan Vending Machine Co., Ltd | Purchases of goods | 753,944.37 | 2,018,187.51 |
Sonyo Compressor(Dalian)Co.,Ltd. | Purchases of goods | 429,782.52 | 236,234.00 |
Bingshan Technology Service (Dalian) Co., Ltd. | Receive labour services | 303,037.68 | - |
Dalian Honjo Chemical Co., Ltd | Purchases of goods | 140,522.12 | 152,920.35 |
Panasonic Appliances cold Chain(Dalian)Co.Ltd | Purchases of goods | 135,529.36 | 8,274,236.08 |
Dalian Bingshan Huigu Development Co., Ltd. | Purchases of goods | 100,943.39 | 1,154,661.47 |
Dalian Fuji Bingshan Vending Machine Sales Co., Ltd | Purchases of goods | 78,761.06 | 330,309.73 |
Shanghai Jingxue Freezing Equipment Co., Ltd | Purchases of goods | 19,584.07 | - |
Dalian Bingshan Group Co., Ltd. | Receive labour services | 18,792.45 | 27,471.70 |
Dalian Bingshan Group Refrigeration Equipment Co., Ltd | Purchases of goods | - | 44,236,639.71 |
Panasonic Refrigeration (Dalian) Co., Ltd | Purchases of goods | - | 5,942,676.17 |
Dalian Kaierwen Science Co.,Ltd | Purchases of goods | - | 2,488,250.00 |
Total | 105,203,094.06 | 139,892,072.11 |
(2) Sales of goods/ labour services provision
Related party | Content | Current year | Last year |
Company under direct/indirect Control of Panasonic Co.,Ltd | Sales of goods | 147,935,120.42 | - |
Panasonic Appliances cold Chain(Dalian)Co.Ltd | Sales of goods | 122,871,855.60 | 127,490,433.60 |
BAC Dalian Co., Ltd | Sales of goods | 65,002,512.47 | 54,676,218.06 |
Sonyo Compressor(Dalian)Co.,Ltd. | Sales of goods | 41,055,441.71 | 28,338,724.95 |
Related party | Content | Current year | Last year |
Bingshan Technology Service (Dalian) Co., Ltd. | Sales of goods | 40,641,988.78 | - |
Sonyo Refrigeration System (Dalian) Co., Ltd. | Sales of goods | 23,645,169.22 | 35,590,082.15 |
Dalian Bingshan Group Huahuida Financial Leasing Co., Ltd | Sales of goods | 18,888,460.18 | 22,747,787.61 |
Dalian Fuji Bingshan Vending Machine Co., Ltd | Sales of goods | 18,327,608.54 | 19,081,218.00 |
Alphavita Bio-scientific (Dalian) Co., Ltd. | Sales of goods | 9,532,891.46 | 2,820,207.93 |
MHI Bingshan Refrigeration (Dalian) Co.,Ltd. | Sales of goods | 5,537,667.76 | 16,781,616.57 |
Dalian Spindle Environmental Facilities Co., Ltd | Sales of goods | 3,240,535.34 | 7,572,022.06 |
Jiangsu Jingxue Insulation Technology Co.,Ltd | Sales of goods | 2,524,416.77 | - |
Dalian Bingshan Part Technology Co.,LTD | Sales of goods | 1,395,237.01 | 452,182.08 |
Linde Hydrogen Fueltech (Dalian) Co., Ltd | Sales of goods | 1,309,485.55 | 2,097,847.50 |
Dalian Fuji Bingshan Control System Co., Ltd. | Sales of goods | 654,160.22 | 297,951.75 |
Dalian Shentong Electric Co., Ltd | Sales of goods | 522,107.10 | - |
Dalian Bingshan Huigu Development Co., Ltd. | Sales of goods | 323,553.82 | 8,376,384.88 |
Dalian Jingxue Freezing Equipment Co., Ltd | Sales of goods | 102,957.82 | 1,099,672.68 |
Dalian Honjo Chemical Co., Ltd | Sales of goods | 91,981.13 | - |
Panasonic Refrigeration (Dalian) Co., Ltd. | Sales of goods | - | 43,839,502.05 |
Keinin-Grand Ocean Thermal Technology (Dalian) Co., Ltd | Sales of goods | - | -309,481.22 |
Dalian Bingshan Group Refrigeration Equipment Co., Ltd | Sales of goods | - | 3,876,812.87 |
Beijing Huashang Bingshan Refrigeration and Air-conditioning Machinery Co., Ltd | Sales of goods | - | -41,476.27 |
Wuhan Sikafu Power Control Equipment Co., Ltd | Sales of goods | - | 2,831.86 |
Total | 503,603,150.90 | 374,790,539.11 |
2. Assets Lease
(1) Assets rent out
Lessee | Category of assets rent out | Current year Lease Income | Last year Lease Income | |
Dalian Bingshan Huigu Development Co., Ltd. | Land/property | 8,189,918.99 | 8,190,302.14 | |
MHI Bingshan Refrigeration (Dalian) Co.,Ltd. | Plant | 3,809,523.80 | 3,809,523.80 | |
Linde Hydrogen Fueltech (Dalian) Co., Ltd | Plant | 2,759,026.37 | - |
Lessee | Category of assets rent out | Current year Lease Income | Last year Lease Income |
Dalian Jingxue Freezing Equipment Co., Ltd. | Plant and office | 858,322.40 | 1,005,111.44 |
Wuhan Sikafu Power Control Equipment Co., Ltd | Plant | 730,954.13 | 308,074.95 |
Bingshan Technology Service (Dalian) Co., Ltd. | Plant | 443,699.06 | - |
Company under direct/indirect Control of Panasonic Co.,Ltd | Plant | 336,180.42 | |
Dalian Bingshan Group Co., Ltd. | Office | 132,110.09 | 132,110.09 |
Panasonic Appliances cold Chain(Dalian)Co.Ltd | Employee dormitory | 3,465,470.95 | 37,577.98 |
Sonyo Compressor(Dalian)Co.,Ltd | Employee dormitory | - | 91,428.56 |
Panasonic Refrigeration (Dalian) Co., Ltd | Employee dormitory | 49,321.09 |
(2) Assets under lease
Lessor | Category of assets rent in | Lease premium paid | |
Current year | Last year | ||
Dalian Bingshan Group Huahuida Financial Leasing Co., Ltd | Fixed asset | 28,659,750.85 | 22,918,173.13 |
(Continued)
Lessor | Interests on lease liabilities | Increased right-of-use assets | ||
Current year | Last year | Current year | Last year | |
Dalian Bingshan Group Huahuida Financial Leasing Co., Ltd | 698,321.11 | 1,217,094.64 | -26,150,305.01 | -77,007.29 |
3. Warranty provided by Related Parties
The national development fund planned to support the Company’s intelligent and greenequipment of cold chain and service industry base project, and provide the special fund to thecontrolling shareholder of the Company, Bingshan Group. Please refer to the “ Note VI. 31 longterm borrowings”.
4. Funds borrow from /lent to related party
Name of the related party | Take in/out | Amount | Starting date | Ending date | Explanation |
Dalian Bingshan Group Co., Ltd. | Take in | 160,000,000.00 | 2016.03.14 | 2026.03.13 | Project fund investment |
Dalian Bingshan Group Huahuida | Take in | 32,833,000.00 | 2022.10.15 | 2024.09.15 | Factoring |
Financial Leasing Co.,Ltd | |||||
Dalian Bingshan Group Huahuida Financial Leasing Co.,Ltd | Take in | 12,000,000.00 | 2022.01.07 | 2025.01.06 | Sale and leaseback |
Dalian Bingshan Group Huahuida Financial Leasing Co.,Ltd | Take in | 13,805,309.73 | 2021.11.15 | 2026.11.15 | Sale and leaseback |
Dalian Bingshan Group Huahuida Financial Leasing Co.,Ltd | Take in | 10,000,000.00 | 2021.06.01 | 2024.05.01 | Factoring |
Dalian Bingshan Group Huahuida Financial Leasing Co.,Ltd | Take in | 8,619,474.00 | 2021.02.15 | 2023.01.15 | Factoring |
Dalian Bingshan Group Huahuida Financial Leasing Co.,Ltd | Take in | 5,481,000.00 | 2022.06.20 | 2024.06.10 | Factoring |
Dalian Bingshan Group Huahuida Financial Leasing Co.,Ltd | Take in | 5,063,480.54 | 2021.08.15 | 2023.07.15 | Factoring |
Dalian Bingshan Group Huahuida Financial Leasing Co.,Ltd | Take in | 2,145,251.09 | 2021.06.15 | 2024.05.15 | Sale and leaseback |
The national development fund planned to support the Company’s intelligent and greenequipment of cold chain and service industry base project, and provide the special fund to thecontrolling shareholder of the Company, Bingshan Group in 2016. After the above funds are inplace, Bingshan Group will allocate the funds to the Company in full and without any additionalcharge. The above special fund is 160 million Yuan in total, the loan interest is fixed interest rateat 1.2% annual rate and paid interest 1,852,000Yuan for this year.
5. Asset transfer and debt restructuring among the related parties
Item | Transaction | Current year | Last year |
Dalian Bingshan Group Co.,Ltd | Sold shareholdings of subsidiary | 14,756,300.00 | |
Dalian Zhonghuida Refrigeration Technology Co., LTD | Sold shareholdings of subsidiary | 6,472,000.00 | |
Panasonic Corporation of China Co., Ltd | Sold shareholdings of affiliated company | 70,990,000.00 | |
Panasonic Corporation of China Co., Ltd | Purchase shareholdings of affiliated company | 44,582,760.00 | |
Panasonic Appliances cold | Purchase shareholdings of | 37,152,300.00 |
Item | Transaction | Current year | Last year |
Chain(Dalian)Co.Ltd | affiliated company | ||
Sanyo Corporation | Purchase shareholdings of affiliated company | 929,148,000.00 | |
Dalian Zhonghuida Refrigeration Technology Co., LTD | Purchase shareholdings of affiliated company | - | 45,400,000.00 |
Total | 1,103,101,360.00 | 45,400,000.00 |
The 2nd meeting of the 9
th generation of board was held on 21
stJanuary 2022 and approved tosell 100% of shareholding of Bingshan Technical Service (Dalian) Co.,Ltd to Dalian BingshanGroup, Dalian Zhonghuida Refrigeration Technology Co., Ltd, Dalian Zhixintong EnterpriseManagement Partnership (Limited partnership) at 25.8882 million Yuan, which is based on theevaluated net asset as of October 31, 2021. 57% of shareholdings of Bingshan Technical Service(Dalian) Co.,Ltd was transferred to Dalian Bingshan Group at price of 14.7563 million Yuan,25% of shareholdings of Bingshan Technical Service (Dalian) Co.,Ltd was transferred toDalian Zhonghuida Refrigeration Technology Co., Ltd at price of at a price of 6.472millionYuan and 18% of of shareholdings of Bingshan Technical Service (Dalian) Co.,Ltd wastransferred to Dalian Zhixintong Enterprise Management Partnership (Limited partnership) atprice of at a price of 4.6599million Yuan.On November 19, 2022, the 11
th meeting of the 9
thdirectors’ meeting approved the transfer of40% of the shareholdings of Panasonic Appliances cold Chain(Dalian)Co.Ltd to PanasonicCorporation of china Co., Ltd. The share transfer price is based on the assessed value ofPanasonic Appliances cold Chain(Dalian)Co.Ltd’s net assets as of September 30, 2022, and thetransfer price is 70,990,000.00 Yuan. After the transaction, the company no longer holds theshareholdings of Panasonic Appliances cold Chain(Dalian)Co.Ltd.On September 27, 2022, the 8
th meeting of the 9
thdirectors’ meeting approved the purchase of60% of the shareholdings of Sonyo Compressor(Dalian)Co.,Ltd from SanyoElectric(China)Co.,Ltd, and negotiated with Sanyo Electric(China)Co.,Ltd to determine theshare transfer consideration of 929,148,000.00 Yuan based on the assessed value of acquiree’snet assets on May 31, 2022. After the transaction, Sonyo Compressor(Dalian)Co.,Ltd waschanged to a subsidiary of the Company. The directors’ meeting also approved the purchase of30% of shareholdings of Sonyo Refrigeration System (Dalian) Co., Ltd. from PanasonicCorporation of china Co., LTD and 25% shareholdings of Sonyo Refrigeration System (Dalian)Co., Ltd from Panasonic Appliances cold Chain(Dalian)Co.Ltd, and negotiated with PanasonicCorporation of china Co., LTD and Panasonic Appliances cold Chain(Dalian)Co.Ltd todetermine the share transfer consideration of 81,735,060.00 Yuan based on the assessed value ofrespective acquiree’s net assets on May 31, 2022. After the transaction, Sonyo RefrigerationSystem (Dalian) Co., Ltd was changed to a subsidiary of the Company.
6. Management Remuneration
Item | Current year | Last year |
Total remuneration | 4,895,800.00 | 3,711,500.00 |
7. Other transactions among the related parties
On September 27, 2022, the 8
th meeting of the 9
thdirectors’ meeting approved the purchase of60% of the shareholdings of Sonyo Compressor(Dalian)Co.,Ltd from SanyoElectric(China)Co.,Ltd, and negotiated with Sanyo Electric(China)Co.,Ltd to determine theshare transfer consideration of 929,148,000.00 Yuan based on the assessed value of acquiree’snet assets on May 31, 2022. After the transaction, Sonyo Compressor(Dalian)Co.,Ltd waschanged to a subsidiary of the Company. The directors’ meeting also approved the purchase of30% of shareholdings of Sonyo Refrigeration System (Dalian) Co., Ltd. from PanasonicCorporation of china Co., LTD and 25% shareholdings of Sonyo Refrigeration System (Dalian)Co., Ltd from Panasonic Appliances cold Chain(Dalian)Co.Ltd, and negotiated with PanasonicCorporation of china Co., LTD and Panasonic Appliances cold Chain(Dalian)Co.Ltd todetermine the share transfer consideration of 81,735,060.00 Yuan based on the assessed value ofrespective acquiree’s net assets on May 31, 2022. After the transaction, Sonyo RefrigerationSystem (Dalian) Co., Ltd was changed to a subsidiary of the Company.On November 19, 2022, the 11
th meeting of the 9
thdirectors’ meeting approved the transfer of40% of the shareholdings of Panasonic Appliances cold Chain(Dalian)Co.Ltd to PanasonicCorporation of china Co., Ltd. The share transfer price is based on the assessed value ofPanasonic Appliances cold Chain(Dalian)Co.Ltd’s net assets as of September 30, 2022, and thetransfer price is 70,990,000.00 Yuan. After the transaction, the company no longer holds theshareholdings of Panasonic Appliances cold Chain(Dalian)Co.Ltd.iii. Balances with Related party
1.Accounts receivable due from related parties
Item | Related party | Closing Balance | |
Book Balance | Bad debt Provision | ||
Accounts receivable | Company under direct/indirect Control of Panasonic Co.,Ltd | 145,605,125.57 | 11,219,927.46 |
Accounts receivable | BAC Dalian Co., Ltd | 17,739,655.64 | 1,245,323.82 |
Accounts receivable | Dalian Fuji Bingshan Vending Machine Co., Ltd | 7,292,421.55 | 548,862.49 |
Item | Related party | Closing Balance | |
Book Balance | Bad debt Provision | ||
Accounts receivable | Bingshan Technology Service (Dalian) Co., Ltd. | 5,804,599.87 | 426,864.25 |
Accounts receivable | MHI Bingshan Refrigeration (Dalian) Co.,Ltd. | 3,981,739.22 | 279,518.10 |
Accounts receivable | Dalian Bingshan Part Technology Co.,LTD | 2,426,739.72 | 250,341.12 |
Accounts receivable | Dalian Bingshan Group Huahuida Financial Leasing Co., Ltd | 2,411,867.26 | 169,313.08 |
Accounts receivable | Alphavita Bio-scientific (Dalian) Co., Ltd. | 1,224,109.36 | 85,932.48 |
Accounts receivable | Dalian Bingshan Huigu Development Co., Ltd. | 1,139,243.27 | 255,895.91 |
Accounts receivable | Linde Hydrogen Fueltech (Dalian) Co., Ltd | 841,284.21 | 59,058.15 |
Accounts receivable | Dalian Spindle Environmental Facilities Co., Ltd | 750,121.11 | 52,658.50 |
Accounts receivable | Dalian Fuji Bingshan Control System Co., Ltd. | 550,800.00 | 49,630.32 |
Accounts receivable | Dalian Shentong Electric Co., Ltd | 94,897.33 | 6,661.79 |
Contract asset | Company under direct/indirect Control of Panasonic Co.,Ltd | 1,982,037.10 | 612,603.41 |
Contract asset | Dalian Bingshan Huigu Development Co., Ltd. | 109,569.10 | 19,340.79 |
Prepayment | Dalian Shentong Electric Co., Ltd | 8,402,006.53 | - |
Prepayment | Company under direct/indirect Control of Panasonic Co.,Ltd | 3,825,488.41 | |
Prepayment | Bingshan Technology Service (Dalian) Co., Ltd. | 825,789.25 | - |
Prepayment | Dalian Bingshan Group Huahuida Financial Leasing Co., Ltd | 308,310.02 | - |
Prepayment | BAC Dalian Co., Ltd | 58,513.00 | - |
Prepayment | Dalian Spindle Environmental Facilities Co., Ltd | 36,455.00 | - |
Other receivable | Dalian Fuji Bingshan Vending Machine Co., Ltd | 278,020.00 | 10,175.53 |
Other receivable | Bingshan Technology Service (Dalian) Co., Ltd. | 100,000.00 | 69,410.00 |
(Continued)
Item | Related party | Opening Balance | |
Book Balance | Bad debt Provision | ||
Accounts receivable | Panasonic Appliances cold Chain(Dalian)Co.Ltd | 37,390,849.92 | 2,624,837.66 |
Accounts receivable | BAC Dalian Co., Ltd | 12,548,585.90 | 880,910.73 |
Item | Related party | Opening Balance | |
Book Balance | Bad debt Provision | ||
Accounts receivable | Beijing Huashang Bingshan Refrigeration and Air-conditioning Machinery Co., Ltd | 10,125,260.53 | 6,110,824.22 |
Accounts receivable | Panasonic Refrigeration (Dalian) Co., Ltd | 6,861,805.71 | 481,698.76 |
Accounts receivable | Dalian Fuji Bingshan Vending Machine Co., Ltd | 5,656,023.33 | 398,096.17 |
Accounts receivable | Sonyo Refrigeration System (Dalian) Co., Ltd. | 4,963,341.40 | 348,426.57 |
Accounts receivable | Sonyo Compressor(Dalian)Co.,Ltd. | 4,021,698.75 | 282,323.25 |
Accounts receivable | Dalian Spindle Environmental Facilities Co., Ltd | 1,942,559.40 | 136,367.67 |
Accounts receivable | MHI Bingshan Refrigeration (Dalian) Co.,Ltd. | 1,803,184.94 | 126,583.58 |
Accounts receivable | Alphavita Bio-scientific (Dalian) Co., Ltd. | 1,164,159.66 | 81,724.01 |
Accounts receivable | Dalian Bingshan Huigu Development Co., Ltd. | 439,268.00 | 63,813.46 |
Accounts receivable | Dalian Fuji Bingshan Control System Co., Ltd. | 175,200.00 | 12,299.04 |
Contract asset | Sonyo Refrigeration System (Dalian) Co., Ltd. | 166,000.00 | 27,788.40 |
Contract asset | Panasonic Refrigeration (Dalian) Co., Ltd | 11,000.00 | 772.2 |
Contract asset | Dalian Bingshan Group Refrigeration Equipment Co., Ltd | - | 12,555.00 |
Prepayment | Panasonic Refrigeration (Dalian) Co., Ltd | 3,161,000.00 | - |
Prepayment | Sonyo Refrigeration System (Dalian) Co., Ltd. | 2,225,656.57 | - |
Prepayment | BAC Dalian Co., Ltd | 1,607,378.00 | - |
Prepayment | Dalian Bingshan Group Huahuida Financial Leasing Co., Ltd | 951,659.80 | - |
Prepayment | Dalian Spindle Environmental Facilities Co., Ltd | 341,215.00 | - |
Receivable financing | Panasonic Appliances cold Chain(Dalian)Co.Ltd | 18,720,000.00 | - |
Receivable financing | BAC Dalian Co., Ltd | 7,341,688.27 | - |
Receivable financing | Sonyo Refrigeration System (Dalian) Co., Ltd. | 4,197,610.38 | - |
Receivable financing | Dalian Fuji Bingshan Vending Machine Co., Ltd | 2,060,929.41 | - |
Receivable financing | Panasonic Refrigeration (Dalian) Co., Ltd | 242,878.69 | - |
Other receivable | Wuhan Sikafu Power Control Equipment Co., Ltd | 148,423.28 | 6,189.25 |
Other receivable | Panasonic Appliances cold Chain(Dalian)Co.Ltd | 18,079.63 | 753.92 |
2. Accounts Payable due from Related Party
Item | Related party | Closing Balance | Opening Balance |
Accounts Payable | Jiangsu Jingxue Insulation Technology Co.,Ltd | 68,660,038.43 | 4,512,235.92 |
Accounts Payable | BAC Dalian Co., Ltd | 20,678,948.10 | 11,326,144.36 |
Accounts Payable | Dalian Bingshan Metal Technology Co.,Ltd | 14,347,841.71 | 70,047.29 |
Accounts Payable | Company under direct/indirect Control of Panasonic Co.,Ltd | 10,591,357.69 | - |
Accounts Payable | Dalian Bingshan Part Technology Co.,LTD | 7,264,112.80 | 3,921,294.33 |
Accounts Payable | Jiangsu Jingxue Insulation Environmental Engineering Co.,Ltd | 2,896,300.00 | - |
Accounts Payable | Dalian Fuji Bingshan Control System Co., Ltd. | 1,942,256.73 | - |
Accounts Payable | Dalian Shentong Electric Co., Ltd | 1,396,176.88 | |
Accounts Payable | Dalian Spindle Environmental Facilities Co., Ltd | 1,247,400.00 | 1,160,849.00 |
Accounts Payable | Bingshan Technology Service (Dalian) Co., Ltd. | 282,405.30 | - |
Accounts Payable | Panasonic Appliances cold Chain(Dalian)Co.Ltd | - | 187,071.99 |
Accounts Payable | Panasonic Refrigeration (Dalian) Co., Ltd | - | 1,350,094.85 |
Accounts Payable | Dalian Kaierwen Science Co.,Ltd | - | 128,750.00 |
Accounts Payable | Dalian Bingshan Group Refrigeration Equipment Co., Ltd | 18,626,438.61 | |
Accounts Payable | Dalian Fuji Bingshan Vending Machine Sales Co., Ltd | - | 145,500.00 |
Accounts Payable | Sonyo Refrigeration System (Dalian) Co., Ltd. | - | 17,401,521.28 |
Accounts Payable | Sonyo Compressor(Dalian)Co.,Ltd. | - | 1,785,651.94 |
Other payable | Company under direct/indirect Control of Panasonic Co.,Ltd | 4,502,046.38 | - |
Other payable | Jiangsu Jingxue Insulation Technology Co.,Ltd | 666,864.48 | 70,000.00 |
Other payable | MHI Bingshan Refrigeration (Dalian) Co.,Ltd. | 170,000.00 | 170,000.00 |
Other payable | Dalian Jingxue Freezing Equipment Co., Ltd | 70,000.00 | - |
Other payable | Dalian Bingshan Group Huahuida Financial Leasing Co., Ltd | 1,172.61 | - |
Other payable | Dalian Fuji Bingshan Vending Machine Sales Co., Ltd | - | 268,500.00 |
Other payable | Panasonic Refrigeration (Dalian) Co., Ltd | - | 19,500.00 |
Contract liability | Dalian Bingshan Group Huahuida Financial Leasing Co., Ltd | 4,206,191.86 | - |
Item | Related party | Closing Balance | Opening Balance |
Contract liability | Linde Hydrogen Fueltech (Dalian) Co., Ltd | 2,274,454.09 | |
Contract liability | Company under direct/indirect Control of Panasonic Co.,Ltd | 1,299,686.95 | - |
Contract liability | Dalian Spindle Environmental Facilities Co., Ltd | 736,424.50 | - |
Contract liability | Panasonic Appliances cold Chain(Dalian)Co.Ltd | - | 1,819,735.06 |
Contract liability | Sonyo Refrigeration System (Dalian) Co., Ltd. | - | 1,410,975.05 |
Contract liability | Panasonic Refrigeration (Dalian) Co., Ltd | - | 2,831.86 |
Contract liability | Wuhan Sikafu Power Control Equipment Co., Ltd | - | 76,228.67 |
Notes Payable | BAC Dalian Co., Ltd | - | 3,932,858.40 |
Notes Payable | Dalian Bingshan Group Refrigeration Equipment Co., Ltd | - | 7,377,503.92 |
Notes Payable | Dalian Honjo Chemical Co., Ltd | - | 172,800.00 |
Notes Payable | Dalian Bingshan Part Technology Co.,Ltd | - | 880,000.00 |
Notes Payable | Jiangsu Jingxue Insulation Technology Co.,Ltd | - | 492,450.00 |
Notes Payable | Panasonic Appliances cold Chain(Dalian)Co.Ltd | - | 1,657,321.00 |
Notes Payable | Dalian Spindle Environmental Facilities Co., Ltd | - | 1,517,200.00 |
Other current liability | Dalian Bingshan Group Huahuida Financial Leasing Co., Ltd | 546,804.94 | - |
Other current liability | Company under direct/indirect Control of Panasonic Co.,Ltd | 130,044.39 | - |
Other current liability | Dalian Spindle Environmental Facilities Co., Ltd | 81,006.69 | |
Lease payable | Dalian Bingshan Group Huahuida Financial Leasing Co., Ltd | 983,501.51 | 4,055,686.70 |
Non-current liability due within 1 year | Dalian Bingshan Group Huahuida Financial Leasing Co., Ltd | 34,388,781.83 | 25,727,284.78 |
Long term payable | Dalian Bingshan Group Huahuida Financial Leasing Co., Ltd.. | 31,009,644.16 | 23,543,375.62 |
iv. Related Party Commitment
Nonev. OthersNoneXII. Share-Based PaymentNone
XIII. Contingency
1. Up to December 31, 2022, guarantee obligations undertaken by the Company due tofinancial leasing.The Company sold refrigerating house equipment to Guizhou Pubu Cold Chain FoodInvestment Co.,Ltd (“Pubu Cold Chain”) in the form of financial leasing. The Company as aseller singed finance lease contract with Huahuida as a buyer as well as a lessor and Pubu ColdChain as a lessee. The contract price is 25.705million Yuan. In case the lease premium isdelayed by the lessee, the Company needs to pay lease premium on behalf of the lessee and beobliged to the buy back responsibility. Pubu Cold Chain issued an unconditional, irrevocableand joint liability counter guarantee, and the Company is the beneficiary. Guarantee scopecovers the full liability because of the sales in the form of finance lease. As at 31 December2022, the balance of the guarantee obligation of the financial lease is RMB 15,390,200Yuan.The Company sold water chiller and heat pump to Shangdong Jiechuang Energy TechnologyCo.,Ltd (“Shandong Jiechuang”) in the form of financial lease. The Company as a seller singedfinance lease contract with Huahuida as a buyer as well as a lessor and Shandong Jiechuang as alessee. The contract price is 6.998million Yuan. Shandong Jiechuang had made 10% downpayment, and remaining 6.2982million Yuan is underlined the leasing contract amount. In casethe lease premium is delayed by the lessee, the Company needs to pay lease premium on behalfof the lessee and be obliged to the buy back responsibility. Shandong Jiechuang issued anunconditional, irrevocable and joint liability counter guarantee, and the Company is thebeneficiary. Guarantee scope covers the full liability because of the sales in the form of financiallease. As at 31 December 2022, the balance of the guarantee obligation of the financial lease isRMB 6,840,500Yuan.The Company sold refrigerating house equipment to Liuyang Zhongjie Technology InvestmentCo.,Ltd (“Liuyang Zhongjie”) in the form of financial lease. The Company as a seller singedfinance lease contract with Huahuida as a buyer as well as a lessor and Liuyang Zhongjie as alessee. The contract price is 9.831million Yuan. In case the lease premium is delayed by thelessee, the Company needs to pay lease premium on behalf of the lessee and be obliged to thebuy back responsibility. Liuyang Zhongjie issued an unconditional, irrevocable andjoint liability counter guarantee, and the Company is the beneficiary. Guarantee scope coversthe full liability because of the sales in the form of financial lease. As at 31 December, 2022, thebalance of the guarantee obligation of the financial lease is RMB 7.9839million Yuan.Until 31 December, 2022, the balance of all guarantee obligation of the financial lease is RMB30,214,600 Yuan. There is no situation where the Company needs to undertake the liability as
the lessees’ default.
2. In April, 2020, Dalian Ruixing Iron Core Manufacturing Co.,Ltd( “Dalian Ruixing”) suedthe Company’s subsidiary, Sonyo Compressor(Dalian)Co.,Ltd for not fulfilling the purchasecontract signed. Sonyo Compressor(Dalian)Co.,Ltd made a provision of 18,263,806.71Yuanbased on the legal advice. In March 2021, Dalian Ruixing formally filed a lawsuit, the amountof litigation is 13,691,985.28 yuan. As of December 31, 2022, no final judgment has beenissued, and Songyang Compressor made a provision of 13,691,985.28 yuanAs at 31 December 2022, The Company does not have any other contingencies for disclosureapart from the above matters.XIV. CommitmentAs at 31 December 2022, The Company does not have any other significant commitments.XV. Events after the Balance Sheet Date
1. Unadjusted significant events
None
2. Information about profit distribution
Item | Content |
Planned profit/ dividend distribution | 8,432,125.07 |
Profit/dividend approved for distribution declaration | The 13th meeting of the 9th generation of board was held on 25th April 2023 and approved the profit distribution policy for the year of 2022, based on 843,212,507.00 numbers of share in total, paying out cash dividend of 0.1Yuan for every 10 shares (before tax) and cash dividend of B shares are paid in Hong Kong dollars. |
3. Sales Return
There is no significant sales return after the balance sheet date.
4. Except the subsequent event disclosed above, the Company has no other significantsubsequent event.XVI. Other Significant Events
1. Error correction and effect in previous period
No.
2. Debt Restructuring
There is no significant debt restructuring during the year.
3. Asset exchange
(1) The exchange of non-monetary assets
No.
(2) The exchange of other assets
No.
4. Annuity Plan
No.
5. Operation termination
No.
6. Segment Information
The management of the Company divided the Company into 3 segments based on thegeographic area: Northeast China, Central China, and East China. The Northeast is theCompany’s general headquarters and the subsidiaries registered in Dalian. The Central is thesubsidiary of the Company, Wuhan New World Refrigeration Industrial Co., Ltd and itssubsidiary, Wuhan Cooling Engineering, Wuhan Lanning, and Chengdu Bingshan. The East isthe subsidiaries of the Company, and they are Ningbo Bingshan Air-conditioning RefrigerationEngineering Co., Ltd.
(1) The basis and accounting policies of reporting segments
The internal organization structure, management requirements and internal report scheme arethe determination basis for the Company to set the operating segments. The segments are thosesatisfied the following requirements.
1).The segment can generate revenue and incur expenses.
2).The management personnel can regularly evaluate the operation results of segments and
allocate resource, assess its performance.
3).The financial situation, operation results, cash flow and other accounting information of
segments can be acquired.The Company confirms the report segments based on the operating segments. The transfer priceamong segments is set base on the market price. The assets and related expenses in common useare allocated to different segments based on their proportion of revenue.
(2)The financial information of reporting segments
Amount unit :Ten thousand Yuan
Items | Northeast China | Central China | East China | Offset | Total |
1 Operating income | 329,753.07 | 28,130.51 | 129.51 | -68,704.56 | 289,308.53 |
2 Cost | 296,064.78 | 26,170.39 | 133.34 | -68,615.63 | 253,752.88 |
Impairment loss on assets | -6,131.98 | -981.34 | - | -369.26 | -7,482.58 |
Impairment loss on credit | -5,810.30 | -963.12 | - | -1,496.12 | -8,269.54 |
Depreciation and amortization | 8,967.14 | 828.02 | - | 93.90 | 9,889.06 |
3 Investment income from associates and joint venture | -3,690.95 | 43.28 | - | -74.22 | -3,721.89 |
4 Operating profits(loss) | 6,520.71 | -4,104.45 | -105.48 | -216.42 | 2,094.36 |
5 Income tax | 382.15 | -4.71 | - | -271.99 | 105.45 |
6 Net profit(loss) | 6,138.56 | -4,099.74 | -105.48 | 55.57 | 1,988.91 |
7 Total assets | 984,351.64 | 50,918.56 | - | -275,076.66 | 760,193.54 |
8 Total liabilities | 491,012.20 | 40,409.64 | - | -77,255.19 | 454,166.65 |
7. Other important transactions and matters affect the investor's decision
The Company hasn’t had other important transactions and matters affect the investor's decisionin this period.XVII. Notes to the Main Items of the Financial Statements of Parent Company
1. Accounts receivable
(1) Accounts receivable category
Item | Closing Balance | |||||
Booking balance | Provision | Booking value | ||||
Amount | % | Amount | % | |||
Bad debt provision on individual basis | ||||||
Bad debt provision on group | 737,611,736.89 | 100.00 | 107,657,087.39 | 14.60 | 629,954,649.50 | |
(1) Accounting age as characters | 388,615,076.25 | 52.69 | 107,657,087.39 | 27.70 | 280,957,988.86 | |
(2) Related party within consolidation scope | 348,996,660.64 | 47.31 | - | - | 348,996,660.64 | |
Total | 737,611,736.89 | 100.00 | 107,657,087.39 | 14.60 | 629,954,649.50 |
(Continued)
Item | Opening Balance | ||||
Booking balance | Provision | Booking balance | |||
Amount | % | Amount | % | ||
Bad debt provision on individual basis | |||||
Bad debt provision on group | 490,329,366.12 | 100.00 | 81,610,090.34 | 16.64 | 408,719,275.78 |
(1) Accounting age as characters | 279,002,384.85 | 56.90 | 81,610,090.34 | 29.25 | 197,392,294.51 |
(2) Related party within consolidation scope | 211,326,981.27 | 43.10 | - | - | 211,326,981.27 |
Total | 490,329,366.12 | 100.00 | 81,610,090.34 | 16.64 | 408,719,275.78 |
1) No individual bad debt provisions this year.
2) Bad debt provisions on group basis is accrued under accounting aging analysis method:
Aging | Closing Balance | ||
Accounts receivable | Provision for bad debts | (%) | |
Within 1 year | 187,416,105.23 | 13,156,610.59 | 7.02 |
1-2 years | 71,782,073.34 | 12,016,319.08 | 16.74 |
2-3 years | 56,755,645.42 | 17,497,765.48 | 30.83 |
3-4 years | 3,330,453.62 | 1,642,912.77 | 49.33 |
4-5 years | 21,498,453.03 | 15,511,133.86 | 72.15 |
Over 5 years | 47,832,345.61 | 47,832,345.61 | 100.00 |
Total | 388,615,076.25 | 107,657,087.39 | - |
(2) Bad debt provision
Aging | Closing Balance |
Within 1 year | 536,467,765.87 |
1-2 years | 71,727,073.34 |
2-3 years | 56,755,645.42 |
3-4 years | 3,330,453.62 |
4-5 years | 21,498,453.03 |
Over 5 years | 47,832,345.61 |
Total | 737,611,736.89 |
(3) Bad debt provision
Category | Opening balance | Closing Balance | ||||
Accrued | Collected/ reversed | Written-off | Other | |||
Bad debt provision | 81,610,090.34 | 27,759,518.59 | 1,714,782.00 | 2,260.46 | 107,657,087.39 | |
Total | 81,610,090.34 | 27,759,518.59 | 1,714,782.00 | 2,260.46 | 107,657,087.39 |
(4) Accounts receivable written off in current period.
Item | Written off amount |
Receivable actually written off | 1,714,782.00 |
Key debtors written off
Company name | Nature | Amount | Reason | Procedures | Related party |
Anyang ZHongpin Food Industry Co.,Ltd. | Trade receivable | 1,620,000.00 | bankruptcy and Insolvency | CEO approval | N |
Petro China Company Limited Urumqi Branch | Trade receivable | 43,800.00 | Receivable deduction due to site matter | CEO approval | N |
Henan Energy and Chemical Industry Group Guolong Logistics Co.,ltd | Trade receivable | 35,000.00 | going concern and unable to pay | CEO approval | N |
Zhejiang Jiahua Energy Chemical Industry Co.,Ltd. | Trade receivable | 11,180.00 | Site repair | CEO approval | N |
Shandong Silver Embellish Biological Chemical Co.,Ltd. | Trade receivable | 4,802.00 | Site repair | CEO approval | N |
Total | — | 1,714,782.00 | — | — | — |
(5) Based on closing balance ranking, sum of the top five significant debtors are114,653,244.00 Yuan, representing 15.54% of total receivables at the year end.41,874,847.01Yuan bad debt provision is provided respectively.
2. Other Receivables
Item | Closing Balance | Opening Balance |
Interest receivable | ||
Dividend receivable | - | 25,100,920.84 |
Other receivable | 36,021,805.53 | 29,121,904.34 |
Total | 36,021,805.53 | 54,222,825.18 |
2.1 Dividend receivable
Item | Closing Balance | Opening Balance |
Bingshan Technology Service (Dalian) Co., Ltd | 24,148,920.84 | |
Guotai Junan Securities | 952,000.00 | |
Total | 25,100,920.84 |
2.2 Other receivable
(1) The category of other receivables
Items | Closing Balance | Opening Balance |
Receivables and payables | 22,444,622.16 | 20,112,243.72 |
Deposits | 13,733,003.58 | 10,466,237.65 |
Petty cash | 589,402.48 | 344,848.03 |
Total | 36,767,028.22 | 30,923,329.40 |
(2) The bad debt provision of other receivable
bad debt provision | 1st stage | 2nd stage | 3rd stage | Total |
Expected credit loss within 12 months | Expected credit loss within the whole period(no impairment) | Expected credit loss within the whole period(impairment incurred) | ||
Opening balance | 602,860.06 | - | 1,198,565.00 | 1,801,425.06 |
Opening balance during the year | — | — | — | |
--transfer to the 2nd stage | ||||
--transfer to the 3rd stage | -98,565.00 | - | 98,565.00 | - |
--reverse to the 2nd stage | ||||
----reverse to the 1st stage | 1,198,565.00 | - | -1,198,565.00 | - |
Accrued | - | - | 50,173.10 | 50,173.10 |
bad debt provision | 1st stage | 2nd stage | 3rd stage | Total |
Expected credit loss within 12 months | Expected credit loss within the whole period(no impairment) | Expected credit loss within the whole period(impairment incurred) | ||
Reverse | 1,106,375.47 | - | - | 1,106,375.47 |
Cancelation | ||||
Written off | ||||
Other movement | ||||
Closing balance | 596,484.59 | - | 148,738.10 | 745,222.69 |
(3) Other receivable listed by account aging
Aging | Closing Balance |
Within 1 year | 10,080,508.11 |
1-2 years | 4,307,883.00 |
2-3 years | 20,750,000.00 |
3-4 years | 430,072.11 |
4-5 years | - |
Over 5 years | 1,198,565.00 |
Total | 36,767,028.22 |
(4) Bad debt provision.
Category | Opening balance | Change during the year | Closing Balance | ||
Accrued | Collected/reversed | Written-off | |||
Bad debt provision | 1,801,425.06 | 1,056,202.37 | 745,222.69 | ||
Total | 1,801,425.06 | 1,056,202.37 | 745,222.69 |
(5) Other receivables from the top 5 debtors
Name | Category | Closing Balance | Aging | % of the total OR | Closing Balance of Provision |
Xiangfan Zhende Meat Foodstuff Co.,Ltd. | Receivable | 1,532,867.61 | Within 1 year | 4.17 | 56,102.95 |
China Gas Co., Ltd. | Deposit | 1,100,000.00 | Over5 years, | 2.99 | 40,260.00 |
Xinjiang Dongfang New Energy Co.,Ltd | Bid deposit | 1,000,000.00 | 1-2 years | 2.72 | 36,600.00 |
Ningxia Crystal New Energy Materials | Bid deposit | 1,000,000.00 | Within 1 year | 2.72 | 36,600.00 |
Chemical Co.,Ltd | Security deposit for fulfil the contract | 865,980.00 | 1-2 years | 2.36 | 31,694.87 |
Total | 5,498,847.61 | 14.96 | 201,257.82 |
3. Long-term equity investments
(1) Category of long-term equity investments
Item | Closing Balance | Opening Balance | ||||
Closing Balance | Provision | Book Value | Opening Balance | Provision | Book Value | |
Investment of subsidiaries | 2,163,545,361.29 | - | 2,163,545,361.29 | 696,262,267.08 | - | 696,262,267.08 |
Investment of affiliates and JV | 557,452,792.51 | - | 557,452,792.51 | 1,227,131,957.97 | - | 1,227,131,957.97 |
Total | 2,720,998,153.80 | - | 2,720,998,153.80 | 1,923,394,225.05 | - | 1,923,394,225.05 |
(2) Investments of subsidiaries
Subsidiaries names | Opening Balance | Increase | Decrease | Closing Balance | Provision for impairment of the current period | at year end |
Dalian Bingshan Group Construction Co., Ltd | 193,749,675.77 | 193,749,675.77 | ||||
Dalian Bingshan Group Sales Co., Ltd | 20,722,428.15 | 20,722,428.15 | ||||
Dalian Bingshan Air-Conditioning Equipment Co., Ltd | 45,272,185.00 | 45,272,185.00 | ||||
Dalian Bingshan Guardian Automation Co., Ltd | 6,872,117.80 | 43,766,243.72 | 50,638,361.52 | |||
Dalian Bingshan-RYOSETSU Quick Freezing Equipment Co., Ltd | 59,356,051.19 | - | 59,356,051.19 | |||
Dalian Universe Thermal Technology Co.,Ltd | 48,287,589.78 | - | 48,287,589.78 |
Subsidiaries names | Opening Balance | Increase | Decrease | Closing Balance | Provision for impairment of the current period | at year end |
Wuhan New World Refrigeration Industrial Co., Ltd | 184,674,910.81 | - | 184,674,910.81 | |||
Bingshan Technology Service (Dalian)Co., Ltd | 22,024,000.00 | - | 22,024,000.00 | - | ||
Dalian Xinminghua Electronics Co., Ltd. | 43,766,243.72 | - | 43,766,243.72 | - | ||
Dalian Bingshan Engineering & Trading Co., Ltd | 71,537,064.86 | - | - | 71,537,064.86 | ||
Sonyo Compressor(Dalian)Co.,Ltd | 1,380,455,603.23 | - | 1,380,455,603.23 | |||
Sonyo Refrigeration System (Dalian) Co., Ltd | 108,851,490.98 | - | 108,851,490.98 | |||
Total | 696,262,267.08 | 1,533,073,337.93 | 65,790,243.72 | 2,163,545,361.29 |
(3) Joint ventures& affiliated companies
Investee | Beginning balance | Increase/Decrease | Ending balance | at year end | |||||||
Increased | Decreased | Gains and losses recognized under the equity method | Adjustment of other comprehensive income | Changes of other equity | Cash bonus or profits announced | Provision for impairment of the current period | Others | ||||
1. Affiliated company | |||||||||||
Panasonic Appliances cold Chain(Dalian)Co.Lt | 90,330,037.43 | - | 20,702,064.56 | -69,597,984.87 | -29,988.00 | - | - |
Investee | Beginning balance | Increase/Decrease | Ending balance | at year end | |||||||
Increased | Decreased | Gains and losses recognized under the equity method | Adjustment of other comprehensive income | Changes of other equity | Cash bonus or profits announced | Provision for impairment of the current period | Others | ||||
d | |||||||||||
Beijing Huashang Bingshan Refrigeration and Air-conditioning Machinery Co., Ltd | 2,139,942.18 | - | 2,442,782.42 | 302,840.24 | - | - | |||||
Dalian Honjo Chemical Co., Ltd | 8,926,266.52 | 892,830.28 | - | - | - | - | - | 9,819,096.80 | |||
Keinin-Grand Ocean Thermal Technology (Dalian) Co., Ltd | 58,799,068.28 | - | - | 3,290,245.23 | - | - | 2,000,000.00 | - | - | 60,089,313.51 | |
Dalian Fuji Bingshan Vending Machine Co., Ltd | 148,656,014.75 | - | - | -37,554,674.82 | - | - | - | - | - | 111,101,339.93 | |
MHI Bingshan Refrigeration (Dalian) Co., Ltd. | 14,923,803.87 | - | - | 477,305.23 | - | - | - | - | - | 15,401,109.10 | |
Dalian Fuji Bingshan Vending Machine Sales Co., Ltd | - | - | - | - | |||||||
Jiangsu Jingxue Insulation Technology Co.,Ltd | 201,731,528.04 | - | 63,957,497.85 | 7,082,562.57 | - | - | 4,732,344.00 | - | - | 140,124,248.76 | |
Bingshan Metal Technical Service (Dalian) Co., Ltd. | 168,294,942.93 | - | - | 30,420,886.58 | - | - | 23,402,022.05 | - | - | 175,313,807.46 | |
Dalian Bingshan Group Huahuida | 44,789,319.55 | - | 1,502,255.10 | - | - | 687,697.70 | - | - | 45,603,876.95 |
Investee | Beginning balance | Increase/Decrease | Ending balance | at year end | |||||||
Increased | Decreased | Gains and losses recognized under the equity method | Adjustment of other comprehensive income | Changes of other equity | Cash bonus or profits announced | Provision for impairment of the current period | Others | ||||
Financial Leasing Co., Ltd | |||||||||||
Sonyo Compressor(Dalian)Co.,Ltd | 460,060,249.49 | 451,307,603.23 | 25,369,353.74 | - | - | 34,122,000.00 | - | - | - | ||
Sonyo Refrigeration System (Dalian) Co., Ltd | 28,480,784.93 | 27,116,430.98 | 162,691.50 | - | - | 1,527,045.45 | - | - | |||
Total | 1,227,131,957.97 | 565,526,379.04 | -37,651,689.22 | -29,988.00 | - | 66,471,109.20 | - | - | 557,452,792.51 |
4. Operating revenue and cost
Item | Current year | Last year | ||
Revenue | Cost | Revenue | Cost | |
Revenue from main operation | 976,567,011.13 | 853,599,677.62 | 785,491,401.27 | 707,799,558.39 |
Revenue from other operation | 71,575,982.20 | 56,250,851.97 | 48,010,534.28 | 29,323,036.07 |
Total | 1,048,142,993.33 | 909,850,529.59 | 833,501,935.55 | 737,122,594.46 |
5. Investment income
Items | Current year | Last year |
Long-term equity investment gain under cost method | 153,482,615.76 | 32,102,543.64 |
Long-term equity investment gain under equity method | -37,651,689.22 | -85,723,133.07 |
Gain from disposing long-term equity investment | 110,083,973.75 | 27,665,072.62 |
Gain from holding of other non-current financial assets | 20,657,215.39 | 7,229,604.48 |
Gain from disposal of other non-current financial assets | 43,296,525.04 | 2,620,417.98 |
Total | 289,868,640.72 | -16,105,494.35 |
XVIII. Approval of Financial StatementsThe parent and consolidated financial statements of the Company were approved by the Boardof Directors of The Company on April 25, 2023.XIV. Supplementary Information to theFinancial Statements
1. Non-operating profit or loss
Items | Current year | Notes |
Gain or loss from disposal of non-current assets | 109,194,830.34 | |
Override, no formal approval or accidental tax refund, deduction or exemption | - | |
Government grants recorded into profit or loss | 11,878,746.43 | |
Expenses for using funds from non-financial institution recognized in current profit/loss | - | |
Gains from acquisition of subsidiary or associates when initial cost is less than the fair value of identifiable net asset of invested company | - | |
Profits/loss from non-monetary assets exchange | - | |
Profits/loss from investments or management of assets entrusted by others | - | |
Assets impairment provision accrued due to force majeure, e.g.: suffering natural disasters | - |
Items | Current year | Notes |
Profit or loss from debts restructuring | 230,467.42 | |
Expenses of enterprise restructuring | - | |
Gain/loss on excessive part from the transaction where the trading price is obviously unfair. | - | |
Net gain/loss of subsidiary from combination under same control between the beginning of year and consolidation date. | - | |
Gains/ loss from contingencies arising from the normal business of the Company | -2,019,000.00 | |
Gain/loss from change of fair value by holding the tradable financial asset and liabilities, derivatives and or disposing of the tradable financial asset and liabilities, derivatives other than effective hedging in relation to the Company’s normal business | -3,694,509.36 | |
Reversal of impairment provision of accounts receivable separately tested for impairment | - | |
The profits/loss from external entrusted fund | - | |
The profits/gains from changes of fair value for investment property subsequently measured at fair value model | - | |
Effects of gain/loss from one-off adjustments of gain/loss based on laws and regulations of taxation and accounting. | - | |
Custodian fees obtained from entrusted operations | - | |
Non-operating revenue and expense besides the above items | 8,754,118.59 | |
Other profit or loss | 170,729,805.79 | |
Subtotal | 295,074,459.21 | |
Effect on income tax | 2,961,966.70 | |
Attributable to minority shareholders’ equity (after tax) | 397,014.88 | |
Total | 291,715,477.63 |
2. Return on equity and earnings per share
In accordance with the provisions of the China Securities Regulatory Commission, “CorporateInformation Disclosure and Compilation Rules for Public Offering of Securities No. 9 –Calculation and Disclosure of Return on Net Assets and Earnings Per Share (2010 Revision)”,the Company’s 2022 annual weighted average net Return on assets, basic earnings per share anddiluted earnings per share are as follows:
Profit of report period | Weighted average return on net assets (%) | Earnings per share (EPS) | |
EPS | Diluted EPS | ||
Net profit attributable to shareholders of parent company | 0.61 | 0.02 | 0.02 |
Net profit after deducting non-recurring gains and losses attributable to shareholders of parent company | -9.10 | -0.32 | -0.32 |
Bingshan Refrigeration & Heat TransferTechnologies Co., Ltd.
April 26, 2023