冰山B:2024年年度审计报告（英文版）

Bingshan Refrigeration & Heat Transfer Technologies Co. Ltd

For the year ended December 31 2024

Auditor’s Report

Reference Page

Auditor’s report

Financial statements

— Consolidated balance sheet 1-2

— Balance sheet of parent company 3-4

— Consolidated income statement 5

— Income statement of parent company 6

— Consolidated cash flow statement 7

— Cash flow statement of parent company 8

— Consolidated statements of changes in equity 9-10

— Statements of changes in equity of parent company 11-12

— Notes to financial statement 13-151Auditors’ Report

(English Translation for Reference Only)

To the shareholders of Bingshan Refrigeration & Heat Transfer Technologies Co. Ltd

1. Opinion

We have audited the accompanying financial statements of Bingshan Refrigeration &

Heat Transfer Technologies Co. Ltd (“Bingshan Refrigeration & Heat Company”)

which comprise the consolidated and company’s balance sheets as at 31 December

2024 and the consolidated and company’s income statements the consolidated and

company’s cash flow statements the consolidated and company’s statements 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 the requirements of Accounting Standards for Business Enterprises

in all material respects and present fairly the consolidated and the financial position of

Bingshan Refrigeration & Heat Company as at 31 December 2024 and of their

consolidated and the company’s financial performance and cash flows for the year

then ended.

2. Basis for Opinion

We conducted our audit in accordance with China Standards on Auditing for Chinese

Certified Public Accountants. Our responsibilities under those standards are further

described in the “Auditor’s Responsibilities for the Audit of the Financial Statements”

section of our report. We are independent of Bingshan Refrigeration & Heat Company

in accordance with the Code of Ethics for Chinese Certified Public Accountants and

we have fulfilled our other ethical responsibilities of the code. We believe that the

audit evidence we have obtained is sufficient and appropriate to provide a basis for

our audit.

3. Key Audit Matters

Key audit matters are those matters that we consider in our professional judgment

were of most significance in our audit of the financial statements of the current period.These matters were addressed in the context of our audit of the financial statements as

a whole and in forming our audit opinion thereon and we do not express a separate

opinion on these matters.Revenue Recognition

Key Audit Matter How the matter was addressed in the audit

As stated in the Note ‘ No.44V. The main audit procedures carried out for

Notes to Consolidated Financial addressing the key audit matters are as follows:

Statements’ revenue on the 1. Understand and evaluate effectiveness of

consolidated statements for the year design and operation of the management’s

internal control over revenue

ended as of December 31 2024 is 2. Carried out analytical review and evaluate

4531.15 million Yuan. Revenue of the reasonableness of sales income and gross

Bingshan Refrigeration & Heat profit margin by segmenting the business and

Company and its subsidiaries sales in conjunction with industry development

mainly come from sales of products and actual situation of Bingshan Refrigeration &

and installation project. We consider Heat Company.the revenue as the key audit matter 3. Sampling test the sales contracts identify the

because of the significance of clause and condition in respect to the contract

performance obligation consideration and risk

revenue to the overall financial and reward transfer of the ownership. Evaluate

statements and also the inherent the revenue recognition of Bingshan

risk of revenue manipulation by the Refrigeration & Heat Company whether it is in

management so for the special line with the accounting standards.purpose. 4. Sampling select product sales revenue

record reconcile to sales invoice contracts

dispatch note acceptance note; Sampling select

installation sales revenue record reconcile to

invoice installation contracts and completion

report and Evaluate the recognition of revenue

whether is in line with the accounting standards

5. Checking actual installation cost by

reviewing the contract budget contract invoice

and supportive document with signature for the

equipment received to evaluate the cost whether

it really incurred.

6. Combined with receivable audit perform

confirmation procedures for key clients

7. Perform cut-off test so to ensure whether the

transaction is recorded into the appropriate

accounting period.

4. Other InformationThe management of Bingshan Refrigeration & Heat Company (hereinafter referred to

as the “Management”) is responsible for the other information. The other information

comprises the information included in the Bingshan Refrigeration & Heat Company

2024 annual report but does not include 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 any form of assurance conclusion thereon.In connection with our audit of the financial statements our responsibility is to read

the other information and in doing so consider whether the other information is

materially inconsistent with the financial statements 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 other information we are required to report that fact. We have

nothing to report in this regard.

5. Responsibilities of the Management and Those Charged with Governance

for the Financial Statements

The Management is responsible for the preparation of the financial statements in

accordance with Accounting Standards for Business Enterprises to achieve fair

presentation; and designing implementing and maintaining internal control which is

necessary to enable that the financial statements are free from material misstatement

whether due to fraud or error.In preparing the financial statements the Management is responsible for assessing

Bingshan Refrigeration & Heat Company’s ability to continue as a going concern

disclosing as applicable matters related to going concern and using the going

concern basis of accounting unless the Management either intends to liquidate

Bingshan Refrigeration & Heat Company or to cease operations or have no realistic

alternative but to do so.Those charged with governance are responsible to overseeing Bingshan Refrigeration

& Heat Company’s financial reporting process.

6. Auditor’s Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial

statements as a whole are free from material misstatement whether due to fraud orerror and to issue an auditor’s report that includes our opinion. Reasonable

assurance is a high level of assurance but is not a guarantee that an audit conducted in

accordance with auditing standards will always detect a material misstatement when it

exists. Misstatements can arise from fraud or error and are generally considered

material if individually or in the aggregate they could reasonably be expected to

influence the economic decisions of users taken on the basis of these financial

statements.During the course of audit in accordance with auditing standards we exercise

professional judgment and maintain professional skepticism. We also carry out the

following works:

(1) Identify and assess the risks of material misstatement of the financial statements

whether due to fraud or error design and perform audit procedures responsive to

those risks and obtain audit evidence that is sufficient and appropriate to provide a

basis for our audit. The risk of not detecting a material misstatement resulting from

fraud is higher than for one resulting from error as fraud may involve collusion

forgery intentional omissions misrepresentations or the override of internal control.

(2) Obtain an understanding of internal control relevant to the audit in order to design

audit procedures that are appropriate in the circumstances but not for the purpose of

expressing an opinion on the effectiveness of its internal control (this sentence would

be deleted in circumstance when we are also responsible to issue an opinion on the

effectiveness of internal control in conjunction with the audit of the financial

statements).

(3) Evaluate the appropriateness of accounting policies used and the reasonableness

of accounting estimates and related disclosures made by the Management.

(4) 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 conditions that may cast significant doubt on

Bingshan Refrigeration & Heat Company’s ability to continue as a going concern. If

we conclude that a material uncertainty exists we are required to draw attention in

our auditor’s report to the related disclosures in the financial statements in accordance

with the auditing standards or if such disclosures are inadequate we shall modify our

opinion. Our conclusions are based on the audit evidence obtained up to the date of

our auditor’s report. However future events or conditions may cause Bingshan

Refrigeration & Heat Company to cease to continue as a going concern.BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO. LTD.Notes to financial statements

January 1 2024 to December 31 2024

(The currency is in RMB Yuan except otherwise indicated)

(English translation for reference only)

I. General Information

Bingshan Refrigeration & Heat Transfer Technologies Co. Ltd (hereinafter referred to as the

“the Company” or “the group” if subsidiaries included ) previously named as Dalian

Refrigeration Company Limited was reorganized and reformed from main part of former

Dalian Refrigeration Factory. On December 8 1993 the Company went to the public as a

listed company at Shenzhen Stock Exchange Market. On March 20 1998 the Company

successfully went to the public at B share market and listed at Shenzhen Stock Exchange

Market with total share capital of RMB350014975.00Yuan. The registered address is No.

106 East Liaohe Road Dalian Economic and Technological Development Zone Liaoning

Province as same as the headquarters’ address. The unified social credit code is

912102002423613009 on the business license.

According to the 13th meeting of the 6th generation of board extraordinary general meeting

for 2015 fiscal year and ' Restricted share incentive plan (draft)' the Company planned to

introduce an ordinary share to incentive objectives which was 10150000 number of shares

would 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 of

RMB10150000.00Yuan.The general meeting for 2015 fiscal year held on April 21 2016 approved the profit

distribution policy for the year of 2015 which agrees the profit distribution based on the total

360164975 number of shares as share capital paid share dividend of 5 common shares for

every 10 shares through capital reserve. The policy stated above was fully implemented on

May 5 2016 and the registered capital was altered to 540247462.00Yuan.The 17thmeeting of the 6th generation of board was held on June 4 2015 and the 2nd interim

shareholders’ meeting was held on June 24 2015 meeting deliberated and passed the

proposal of non-public offering of ‘A shares’. China’s Securities Regulatory Commission

issued SFC license [2015]3137 on December 30 2015 approving that new non-public

offering cannot exceeded 38821954 numbers of shares. The company implemented the post

meeting procedures for China’s Securities Regulatory Commission which is regarding

adjustment of bottom price and the number of the shares issued after the implementation of

profit distribution policy of 2015 in May 2016 and accordingly revised the upper limit of

non-public offering of share to58645096 number of new ‘A shares’. The company issued the

non-public offering of 58645096 number of ‘A shares’ to 7 investors and as a result the

total number of shares of the Company is changed to 598892558 shares and the par value is

1yuan per share and the total share capital is 598892558.00Yuan.

13BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO. LTD.

Notes to financial statements

January 1 2024 to December 31 2024

(The currency is in RMB Yuan except otherwise indicated)

(English translation for reference only)

According to the ‘Restricted Share Incentive Plan(draft) of Dalian Refrigeration Company

Limited for the year of 2016’ and the ‘Proposal regarding the shareholders’ meeting

authorized the board of directors to implement the Restricted Share Incentive Plan’ approved

on the 3rd provisional general meeting held on September 13 2016 the 9th meeting of the 7th

generation of board deliberated and passed the ‘Proposal about granting the restricted shares

to incentive targets’ on September 20 2016 and set September 20 2016 as share granted date

and granted 12884000 number of restricted shares to 118 incentive targets at granted price

of 5.62Yuan per share. By November 22 2016 The Company has actually received the

newly subscribed registered share capital of 12884000.00Yuan subscribed by incentive

targets.On May 19 2017 the general meeting for 2016 fiscal year was held and profit appropriation

scheme for 2016 FY was approved which was every 10 shares will be increased by 4 shares

through capital reserve based on the total 611776558 number of shares. After the profit

appropriation scheme the registered capital was changed to RMB856487181.00Yuan.On December 28 2017 The Company held the 3rd extraordinary shareholders meeting in

2017 and reviewed and approved the “Proposal on Repurchasing and Retiring PartiallyRestricted Stocks of the 2016 Restricted Stock Incentive Plan”. On March 8 2018 after The

Company's repurchase and cancellation The Company implemented the corresponding

capital reduction procedures according to law. The registered capital of The Company was

changed from 856487181.00Yuan to 855908981.00 Yuan.On May 4 2018 The Company held the 21st meeting of the 7th Board 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's

repurchase and cancellation The Company implemented the corresponding capital reduction

procedures according to law. The registered capital of The Company was changed from

855908981.00 Yuan to 855434087 .00Yuan.

On January 17th 2019 the 1st interim 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 25th 2019 The Company has completed the

repurchasing and retiring stocks plan respectively The Company shall perform the

corresponding capital reduction procedures in accordance with the law and the registered

capital decreased from 855434087.00Yuan to 843212507.00Yuan.On December 20th 2019 The Company held the 7th meeting of the 8th Board of Directors and

approved to change The Company’s name from Dalian Refrigeration Company Limited to

14BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO. LTD.

Notes to financial statements

January 1 2024 to December 31 2024

(The currency is in RMB Yuan except otherwise indicated)

(English translation for reference only)

Bingshan Refrigeration & Heat Transfer Technologies Co. Ltd.The company is in general equipment manufacturing industry. The main business activities

are the research and development production and sales of various industrial refrigeration

components as well as the design production and installation of complete engineering

projects. The main products include: scroll type piston type screw type compressor units

cold water machine and other refrigeration equipment and all kinds of complete sets of

refrigeration projects.This financial report is approved by the board of directors on April 222025. The financial

statements will be reviewed at general meeting.II. Financial Statements Preparation Basis

（1） Preparing basis

The group’s financial statements are prepared according to the actual occurred transactions

and events and in accordance with ‘Accounting Standards for Business Enterprises’ its

application guidelines interpretations and other relevant provisions promulgated by the

Ministry of Finance (collectively referred to as "Accounting Standards for Business

Enterprises") and " No. 15 of Information Disclosure and Reporting Rules for Publicly Listed

Companies - General Provisions for Financial Reports" (revised in 2023) promulgated by the

China Securities Regulatory Commission (hereinafter referred to as the "CSRC").

（2） Going concern

The group has assessed the capacity to continually operate within 12 months since December

31 2024 and hasn’t found the major issues impacting on the sustainable operation ability.

The Company’s financial statements are prepared on the basis of going concern assumption.III. Significant Accounting Policies and Accounting Estimates

1. Declaration for compliance with accounting standards for business enterprises

The financial statements are prepared in line with the requirements of Accounting Standard

for Business Enterprise and truly and fully reflect the relative information of the financial

position for the year ended as of December 31 2024 operating performance cash flow of the

Company and the group for the year then ended.

2. Accounting period

The group adopts the Gregorian calendar year as accounting period from Jan 1 to Dec 31.

3. Operating cycle

15BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO. LTD.

Notes to financial statements

January 1 2024 to December 31 2024

(The currency is in RMB Yuan except otherwise indicated)

(English translation for reference only)

The group sets twelve months for one operating cycle.

4. Functional currency

The group adopts RMB as functional currency.

5. Materiality criteria set up method and basis

The financial statements preparation and disclosure are in line with materiality. For those

matters to be disclosed and need judgement for materiality materiality criteria set up method

and basis are as follows:

In the notes to

Disclosures involved by Materiality criteria set up method and

the financial

materiality judgement basis

statem ents

Significant receivables with Single provision is over 10 million Yuan and

individual provision for bad Note V.3 represents more than 10% of the total

debts provision

Single provision is over 10 million Yuan and

Collection or reverse of

Note V.3 represents more than 10% of the total

significant receivables

provision

Single provision is over 10 million Yuan and

Significant receivables written

Note V.3 represents more than 10% of the total

off

provision

Significant construction in

Note V.16 Single project budget over 30 million Yuan

progress

The book value of long-term equity

investment in a single investee accounts for

more than 10% of the group's net assets and

the amount is greater than 100 million Yuan

Significant JV or associates Note VII.3

or the gain or loss on investment under the

long-term equity investment equity method

accounts for more than 10% of the group's

consolidated net profit

Subsidiary’s net assets are more than10% of

Significant subsidiary the group asses and its net profit is more than

10% of consolidated profit

6. Accounting for business combination under same control and not under same control

16BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO. LTD.

Notes to financial statements

January 1 2024 to December 31 2024

(The currency is in RMB Yuan except otherwise indicated)

(English translation for reference only)

（1） Business combination under the same control

Business combination under the same control is the situation where entities participating the

merger are controlled by the same party or controlled by parties under same ultimate control

before and after merger and the control is not temporary.The group as an acquirer the assets and liabilities that the group obtained in a business

combination under the same control should be measured on the basis of their carrying amount

of the acqiree in the ultimate control party’s consolidated financial statements on the

combining date. As for the balance between the carrying amount of the net assets obtained by

the combining party and the carrying amount of the consideration paid by it the capital

surplus shall be adjusted. If the capital surplus is not sufficient to be offset the retained

earnings shall be adjusted.

（2） Business combination not under same control

Business combination not under the same control is the situation where entities participating

the merger are not controlled by the same party or not controlled by parties under same

ultimate control before and after merger.When the group is an acquirer for a business combination not under same control the asset

liability and contingent liability obtained shall be measured at the fair value on the

acquisition date. The difference when combination cost exceeds proportionate share of the

fair value of identifiable net assets of acquire should be recognized as goodwill. If the

combination cost is less than proportionate share of the fair value of identifiable net assets of

acquiree firstly fair value of identifiable asset liability or contingent liability shall be

reviewed and so the fair value of non-monetary assets or equity instruments issued in the

combination consideration after review still the combination cost is less than

proportionate share of the fair value of identifiable net assets of acquire the difference should

be recognized as non-operating income.If a business consolidation not under common control is finally achieved in stages when

preparing the consolidated financial statements the acquirer shall remeasure its previously

held equity interest in the acquiree at its fair value on acquisition date and recognize the gain

or loss as investment income for the current period. Other comprehensive income under

equity method accounting rising from the interest held in acquiree in relation to the period

before the acquisition and changes in the value of its other equity other than net profit or loss

other comprehensive income and profit appropriation shall be transferred to investment gain

or loss for the period in which the acquisition incurs excluding the other comprehensive

income from the movement on the remeasurement of ne asset or liability of defined benefit

17BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO. LTD.

Notes to financial statements

January 1 2024 to December 31 2024

(The currency is in RMB Yuan except otherwise indicated)

(English translation for reference only)

plan.

7. Criteria of control judgment and method of preparation of consolidated financial

statements

Consolidation scope is determined on the control basis including the Company and all

subsidiaries controlled by the Company. Control criteria is that the group has the power over

the investees enjoy the variable return by involving the relative activities of the investees and

also has the impact on the return amount through the power over the investees.If subsidiaries adopt different accounting policy or have different accounting period from the

parent company appropriated adjustments shall be made in accordance with the Company

policy in preparation of the consolidated financial statements.All significant intergroup transactions outstanding balances and unrealized profit shall be

eliminated 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 of

other 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 be

consolidated since the beginning of the consolidation period. When preparing the comparative

consolidated financial statements adjustments shall be made to relevant items of comparative

figures as regarded that reporting entity established through consolidation has been always

existing since the point when the ultimate controlling party starts to have the control.If a subsidiary is acquired not under common control its operation results and cash flow shall

be consolidated since the beginning of the consolidation period. In preparation of the

consolidated financial statements adjustments shall be made to subsidiary’s financial

statements based on the fair value of its all identifiable assets liability or contingent liability

on the acquisition date.When the group partially disposes of the long –term equity investment in subsidiary without

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 subsidiary since the

acquisition date or combination date shall be adjusted for capital surplus or share premium

no enough capital surplus then adjusted for retained earnings.When the group partially disposes of the long –term equity investment in subsidiary and lose

18BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO. LTD.

Notes to financial statements

January 1 2024 to December 31 2024

(The currency is in RMB Yuan except otherwise indicated)

(English translation for reference only)

the control over it in preparation of consolidated financial statements remaining share of

interest in the subsidiary shall be remeasured on the date of losing control. Sum of the share

disposal consideration and fair value of remaining portion of shareholding minus the share of

the net assets in the subsidiary held based on the previous shareholding percentage since the

acquisition date or combination date the balance of above is recognized as investment

gain/loss for the period and goodwill shall be written off accordingly. Other comprehensive

income relevant to share investment in subsidiary shall be transferred to investment gain /loss

for the period on the date of losing control.When the group partially disposes of the long –term equity investment in subsidiary and lose

the control over it by stages if all disposing transactions are bundled each individual

transaction shall be seen as a transaction of disposal of a subsidiary by losing control. The

difference between the disposal price and the share of the net assets in the subsidiary held

before the date of losing control shall be recognize as other comprehensive income until the

date of losing control where it is transferred into investment gain/ loss for the current period.If the equity investment in the subsidiary is disposed of by stages through multiple

transactions until the control is lost and it is not a bundled transaction each transaction shall

be accounted for separately according to whether the control is lost.

8. Cash and cash equivalent

The cash listed on the cash flow statements of the Company refers to cash on hand and bank

deposit. The cash equivalents refer to short-term (normally with original maturities of three

months or less) and liquid investments which are readily convertible to known amounts of

cash and subject to 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 Bank

of China (“PBOC”) on the 1st day of the month when the transactions are accounted initially.At the balance sheet date foreign currency monetary items should be converted into reporting

currency at the balance sheet date’s spot exchange rate. Exchange differences should be taken

into the current profits and losses except special foreign currency borrowings for construction

and producing assets which are qualifying for assets capitalization should be capitalized.Foreign currency non-monetary items which are recorded in historical cost should be still

recorded at the spot exchange rate when the transaction occurred and no change on reporting

currency amount. Foreign currency non-monetary items which are measured at fair value

19BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO. LTD.

Notes to financial statements

January 1 2024 to December 31 2024

(The currency is in RMB Yuan except otherwise indicated)

(English translation for reference only)

should be recorded in the spot exchange rate at the date measuring the fair value and the

differences should be recognized as profit and loss from fair value changes and included in

the current profits and losses. Invested capital in foreign currency shall be converted into

reporting currency at FX rate at when the investment is received and no foreign exchange

difference arises between capital received and monetary items.

10. Financial instruments

（1） Recognition and derecognition of financial instruments

The group shall recognize a financial asset or a financial liability when becoming party to the

contractual provisions of the instrument.An entity shall derecognize a financial asset(or a part of it or a group of similar financial asset)

when and only when: 1) the contractual rights to the cash flows from the financial asset

expire or 2) the entity transfers contractual rights to receive the cash flows of a financial asset

or assumes a contractual obligation to pay those cash flows received to the 3rd party in full

amount in time according to the ‘passing-through’ agreement and the entity substantially

transfers all the risks and rewards of ownership of the financial asset in nature or the entity

neither transfers nor retains substantially all the risks and rewards of ownership of the

financial asset but the entity has not retained control.Financial liabilities shall be derecognized if the obligation of the liability is fulfilled

cancelled or expired. An exchange between an existing borrower and lender of debt

instruments with substantially different terms shall be accounted for as an extinguishment of

the original financial liability and the recognition of a new financial liability. Similarly a

substantial modification of the terms an existing financial liability shall be accounted for as an

extinguishment of the original financial liability and the recognition of a new financial

liability. The difference between the carrying amount of a financial liability extinguished and

the consideration paid including any non-cash assets transferred or liabilities assumed shall

be recognized in profit or loss.A regular way purchase or sale of financial assets shall be recognized and derecognized as

applicable using trade date accounting or settlement date accounting.

（2） Classification and measurement of financial assets

At initial recognition the group shall classify financial assets as measured at amortized cost

fair value through other comprehensive income or fair value through profit or loss on the

basis of both the group’s business model for managing the financial assets and the contractual

cash flow characteristics of the financial asset. Only when the business model for managing

20BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO. LTD.

Notes to financial statements

January 1 2024 to December 31 2024

(The currency is in RMB Yuan except otherwise indicated)

(English translation for reference only)

the financial assets is changed the affected financial assets shall be reclassified.In determining the business model the group considers among others the way in which the

company evaluates and reports the performance of financial assets to key management

personnel the risks affecting the performance of financial assets and the way in which they

are managed and the way in which the relevant business managers are remunerated. In

assessing whether the objective is to collect contract cash flows the group needs to make an

analytical judgment on the reasons timing frequency and value of the sale of the financial

assets before the maturity date.In determining the contract cash flow characteristics the group is required to determine

whether the contract cash flow is only the payment of principal and interest based on the

outstanding principal (including the assessment of the time value of money correction

judging any significant difference between it and the baseline cash flow/ for financial assets

containing early repayment characteristics is required to determine whether the fair value of

early repayment features is very small).Financial assets are measured at fair value at the initial recognition but accounts receivable or

notes receivable arising from the sale of goods or provision of services etc. do not contain a

significant financing component or do not consider the financing component of less than one

year the initial measurement is based on the transaction price.For financial assets that are measured at fair value the related transaction costs are directly

included in current profit or loss and those costs of other categories of financial assets are

included in their initial recognized amounts.Financial assets subsequent measurement based on the classification

1) A financial asset measured at amortized cost

A financial asset shall be measured at amortized cost if both of the following conditions are

met: * the financial asset is held within a business model whose objective is to hold financial

assets in order to collect contractual cash flows;* the contractual terms of the financial asset

give rise on specified dates to cash flows that are solely payments of principal and interest on

the principal amount outstanding. The financial assets of this category include: monetary fund

receivable notes receivable and other receivables.

2) Debt instruments measured at fair value through other comprehensive income

A financial asset shall be measured at fair value through other comprehensive income if both

of the following conditions are met: * the financial asset is held within a business model

whose objective is achieved by both collecting contractual cash flows and selling financial

21BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO. LTD.

Notes to financial statements

January 1 2024 to December 31 2024

(The currency is in RMB Yuan except otherwise indicated)

(English translation for reference only)

assets and * the contractual terms of the financial asset give rise on specified dates to cash

flows that are solely payments of principal and interest on the principal amount outstanding.The effective interest rate is applied to interest income. A gain or loss arising from a financial

asset measured at fair value through other comprehensive income which is not part of

hedging relationship shall be recognized in other comprehensive income apart from interest

income impairment loss and foreign exchange difference. When this type of financial assets

is derecognized accumulated gain or loss previously in the other comprehensive income shall

be out of it and accounted into retained earnings when the financial asset is derecognized. The

financial assets of this category include: receivable financing.

3) Equity instruments measured at fair value through other comprehensive income

The group may make an irrevocable election for particular investments in equity instruments

that it would be measured at fair value through other comprehensive income but once the

election is made it is irrevocable. The group only recognizes the dividend (apart from the

dividend as investment cost pay back) into profit and loss and fair value movement

subsequently will be recognized into comprehensive income and no need for impairment

provision. When this type of financial assets is derecognized accumulated gain or loss

previously in the other comprehensive income shall be out of it and accounted into retained

earnings when the financial asset is derecognized. The financial asset of this category is

equity instruments.

4) A financial asset measured as fair value through profit or loss

Apart from classified as the amortized cost financial assets and as fair value through other

comprehensive income financial assets a financial asset is classified as fair value through

profit or loss. The group shall subsequently measure this financial asset at its fair value

except for hedging accounting any gain or loss on FVTPL shall be accounted into profit and

loss. The financial assets 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 recognized

contingent consideration through business combination which is not under same control

situation.

（3） Classification basis for recognition and measurement of financial liability

Except for the financial guarantee contract commitments to provide a loan at a below?market

interest rate and financial liabilities that arise when a transfer of a financial asset does not

qualify for derecognition or when the continuing involvement approach applies the group

22BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO. LTD.

Notes to financial statements

January 1 2024 to December 31 2024

(The currency is in RMB Yuan except otherwise indicated)

(English translation for reference only)

shall initially classify all financial liabilities as it measured at amortized cost or financial

liabilities at fair value through profit or loss. For financial liabilities that are measured at fair

value the related transaction costs are directly included in current profit or loss and those

costs of other categories of financial assets are included in their initial recognized amounts.Financial liabilities subsequent measurement based on the classification

1) Financial liabilities as it subsequently measured at amortized cost

Effective interest method is applied to financial liabilities as subsequently measured at

amortized cost

2) Financial liability as it measured at fair value through profit or loss

Financial liability measured at fair value through profit or loss including tradable financial

liability (derivative instrument of financial liability included) and designated as financial

liability measured at fair value through profit or loss. Tradeable financial liability (including

derivate instrument of financial liability) are subsequently measured at fair value. The net

gain or loss arising from changes in fair value are recorded in profit or loss for the period in

which they are incurred. Financial liability designated as it measured at fair value through

profit or loss shall be subsequently measured at fair value except for changes in fair value

caused by changes in the group's own credit risk which are recognized in other

comprehensive income other changes in fair value are recognized in profit or loss for the

current period; The group recognizes all fair value changes (including the amount affected by

changes in its own credit risk) in profit or loss if the inclusion of changes in fair value

caused by changes in its own credit risk in other comprehensive income would cause or

widen the accounting mismatch in profit or loss for the current period.

（4） Financial instrument impairment

Based on expected credit loss the group shall apply the impairment requirements for the

followings: * a financial asset measured at amortized cost; * debt investment measured

at fair value and changes in fair value is through other comprehensive income; * lease

receivable; * a contractual asset and financial guarantee contract.Expected credit loss is the weighted average of credit losses with the respective risks of a

default occurring as the weights. A credit loss herein is referred to as the present value at

original effective rate of the difference between the contractual cash flows that are due to the

group under the contract; and the cash flows that the Company expects to receive that's the

present value of the total cash shortage. The group shall measure expected credit losses of a

financial instrument in a way that reflects: * an unbiased and probability?weighted amount

23BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO. LTD.

Notes to financial statements

January 1 2024 to December 31 2024

(The currency is in RMB Yuan except otherwise indicated)

(English translation for reference only)

that is determined by evaluating a range of possible outcomes; * the time value of money;

and * reasonable and supportable information that is available without undue cost or effort at

the reporting date about past events current conditions and forecasts of future economic

conditions.Expected credit loss of financial instrument is assessed individually and portfolio. The group

assesses the expected credit loss based on the portfolio in accordance with the common

characteristics of credit risk which involves type of financial instrument credit risk grade and

age of trade receivables.When assessing expected credit losses the group considers all reasonable and supportable

information including that which is forward-looking. In making these judgments and

estimates the group extrapolates the expected changes in the debtor's credit risk based on

historical repayment data combined with factors such as economic policies macroeconomic

indicators and industry risks. Different estimates may affect the provision for impairment and

the provision already made may not equal the actual amount of impairment losses in the

future.

1) Impairment testing method of receivable and contract asset

For receivable notes receivable and contract asset etc. which don’t contain significant

financing component and arise from sales of products and service provision the group adopts

simplified method to account expected credit loss provision at an amount equal to the whole

lifetime expected credit losses.For lease premium receivable trade receivable containing significant financing component

and contract asset the group adopts simplified method to account expected credit loss

provision at an amount equal to the whole lifetime expected credit losses.The group determines the expected credit loss of trade receivable on the basis of portfolios

with common characteristics of credit risk which are considered by expected credit loss

measurement reflection by reference to historical experience of credit loss and by

comparison of receivable past due days/ receivable age with default risk rate unless the single

credit loss is separately recognized for contractual payments that is significant in amount and

credit impaired. If certain client is significant different from others in terms of credit risk

characteristics or the client’s credit risk has significantly increased such as experiencing

severe finance difficulty its expected credit loss is obviously higher than it to be at

accounting age the group will make separate credit loss provision for this client’s receivable.* Portfolio category and recognition basis of receivable ( contract asset)

24BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO. LTD.

Notes to financial statements

January 1 2024 to December 31 2024

(The currency is in RMB Yuan except otherwise indicated)

(English translation for reference only)

The group classifies accounts receivable (and contract assets) according to the similarity and

relevance of credit risk characteristics based on information such as age nature of payments

credit risk exposure historical debt collection etc. For accounts receivable (and contract

assets) the group determines that aging is the primary factor affecting its credit risk and

therefore the group assesses its expected credit losses on the basis of aging portfolios. The

group calculates the overdue age based on the payment date agreed in the contract.No expected credit loss is recognized for receivables from related party within consolidated

scope as the group assesses its credit risk is relatively low.* Portfolio category and recognition basis of notes receivable

Portfolio category Expected credit loss accounting estimate policy

Bank acceptance note portfolio Lower credit risk assessed by the management no

expected credit loss recognition

Commercial acceptance note Same as receivables portfolio and provided for excepted

portfolio credit loss allowance based on expected credit loss rate

2) Impairment testing method of debt investment other debt investment loan commitments

and financial guarantee contracts

With the exception of financial assets (such as debt investments other debt investments) loan

commitments and financial guarantee contracts for which the simplified measurement method

is adopted above the group adopts the general method (three-stage method) for the provision

of expected credit losses. At each balance sheet date the group assesses whether its credit risk

has increased significantly since the initial recognition and if the credit risk has not increased

significantly since the initial recognition in the first stage the group measures the loss

provision at an amount equivalent to the expected credit loss over the next 12 months and

calculates interest income based on the carrying balance and effective interest rate; If the

credit risk has increased significantly since the initial recognition but no credit impairment

has occurred in the second stage the group measures the loss provision at an amount

equivalent to the expected credit loss over the entire duration and calculates interest income

based on the carrying balance and effective interest rate; If credit impairment occurs after

initial recognition in the third stage the group measures the loss provision at an amount

equivalent to the expected credit loss over the entire duration and calculates interest income at

amortized costs and effective interest rates. For financial instruments with only low credit risk

at the balance sheet date the group assumes that their credit risk has not increased

significantly since initial recognition

25BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO. LTD.

Notes to financial statements

January 1 2024 to December 31 2024

(The currency is in RMB Yuan except otherwise indicated)

(English translation for reference only)

The whole life expected credit loss refers to the expected credit loss caused by all possible

default events during the whole expected life of the financial instrument. Expected credit

losses over the next 12 months are expected credit losses resulting from defaults on financial

instruments that may occur within 12 months after the balance sheet date (or if the expected

duration of the financial instrument is less than 12 months) and are part of the overall

expected credit losses over the life of the financial instrument.Criteria of significant increase in credit risk and definition of credit impaired assets are

disclosed on Note X.1

（5） Recognition and measurement of transfer of financial assets

A financial asset is derecognized when the financial asset has been transferred together with

substantial all risks and rewards to the transferee. A financial asset can not be derecognized

when the substantial all risks and rewards to the financial asset has been retained. When the

all risks and rewards of the financial asset are neither transferred nor retained but the group

has given up its control of the financial asset the financial asset shall be derecognized and

recognize the asset and liability originated. Where control of the financial asset is not

relinquished the relevant financial asset shall be recognized according to the extent to which

it continues to be involved in the transferred financial asset and the relevant liability shall be

recognized accordingly.In the case where the financial asset as a whole qualifies for the derecognition conditions the

difference between the carrying value of transferred financial asset at the derecognition date

and the sum of the consideration received for transfer and the accumulated amount of changes

in fair value in respect of the amount of partial derecognition ( financial assets involved in

transfer must qualify the following conditions: * the financial asset is held within a

business model whose objective is not only for collecting contractual cash flows but also for

sale; * the contractual terms of the financial asset give rise on specified dates to cash flows

that 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 or

loss for the period.In the case where only part of the financial asset qualifies for derecognition the carrying

amount of financial asset being transferred is allocated between the portions that to be

derecognized and the portion that continued to be recognized according to their relative fair

value. 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 other

comprehensive income for the asset partially qualified for derecognition (financial assets

26BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO. LTD.

Notes to financial statements

January 1 2024 to December 31 2024

(The currency is in RMB Yuan except otherwise indicated)

(English translation for reference only)

involved in transfer must qualify the following conditions:* the financial asset is held

within a business model whose objective is not only for collecting contractual cash flows but

also for sale; ; * the contractual terms of the financial asset give rise on specified dates to

cash flows that are solely payments of principal and interest based on the principal amount

outstanding ) and the above-mentioned allocated carrying amount is charged to profit or loss

for the period.Where the assets continue to be involved by providing financial guarantees for the transferred

financial assets the assets that continue to be involved in the same form are recognized at the

lower of the carrying value of the financial assets and the amount of the financial guarantees.Financial guarantee amount means the maximum amount of consideration received that will

be required to be repaid.

（6） Distinguish between financial liability and equity instrument and accounting

Financial liability and equity instrument shall be distinguished in accordance with the

following standards: * if the group cannot unconditionally avoid paying cash or financial

asset to fulfil a contractual obligation the contractual obligation is qualified or financial

liability. For certain financial instrument although there are no clear terms and conditions to

include obligation of paying cash or other financial liability contractual obligation may

indirectly be formed through other terms and conditions. * the group’s own equity

instrument shall also be considered whether it is the substitute of cash financial asset or it is

the remaining equity after the issuer deducts liability enjoyed by the equity holder if it must

or can be used to settle a financial asset. If the former the instrument is a financial liability of

the issuer otherwise it is an equity instrument of the issuer. In certain circumstances financial

instrument contract is classified as financial liability if financial instrument contract specifies

the Company must or can use its own equity to settle the financial instrument the contractual

amount of right or obligation equals to that of the numbers of own equity instrument available

or to be paid multiplied by fair value when settling nevertheless the amount is fixed or

varied partially or fully based on the its own equity’s market price(such as interest rate

certain commodity’s or financial instrument’s price variance).When classifying a financial instrument (or its component) in the consolidated statements the

group takes all terms and conditions agreed by the its member and instrument holder into

consideration. If the group because of the instrument as a whole bears settlement obligation

by paying cash other financial asset or other means resulted in financial liability the

instrument shall be classified as financial liability.

（7） Derivative financial instrument

27BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO. LTD.

Notes to financial statements

January 1 2024 to December 31 2024

(The currency is in RMB Yuan except otherwise indicated)

(English translation for reference only)

The group uses derivative financial instruments such as foreign exchange forward contracts

commodity forward contracts and interest rate swaps to hedge exchange rate risk commodity

price risk and interest rate risk respectively. Derivative financial instruments are initially

measured at their fair value on the date the derivative transaction contract is signed and are

subsequently measured at their fair value. A derivative instrument with a positive fair value is

recognized as an asset and a negative fair value is recognized as a liability.Except hedging accounting all gain or loss from the FV movement of derivative instrument

shall be recognized in the income statement.

（8） Financial asset and financial liability offset

Financial asset and financial liability shall be presented in the balance sheet separately and

cannot be offset unless the following conditions are all met: * the Company has the legal

right to recognized offset amount and the right is enforceable. * the Company plans to

receive or a legal obligation to pay cash at net amount.

11. Inventories

Inventories are raw material low-valuable consumable goods on transit working-in-progress

finished goods and cost to fulfil the contract etc.The inventories are processed on perpetual inventory system and are measured at their actual

cost on acquisition. Weighted average cost method is taken for measuring the inventory

dispatched or used. Low value consumables and packaging materials is recognized in the

income statement by one-off method.At the balance sheet date inventory is measured at the lower of cost and net realizable value.If the cost of the inventory is higher than its net realizable value a provision is made for the

decline in the price of the inventory and it is accounted in the current profit or loss. Net

realizable value is the amount of the estimated selling price of inventory in daily activities

less the estimated costs to be incurred at completion estimated selling expenses and related

taxes.Impairment provision for the group's raw materials/goods in stock/WIP/ cost to fulfil the

contract is made on an individual inventory item and when determining its net realizable

value the inventory of goods in stock and materials used for sale are determined at the

estimated selling price of the inventory less estimated selling expenses and related taxes;

Inventory of materials held for use in production is determined at the estimated selling price

of the finished goods produced less the estimated costs to be incurred up to completion

estimated selling expenses and

28BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO. LTD.

Notes to financial statements

January 1 2024 to December 31 2024

(The currency is in RMB Yuan except otherwise indicated)

(English translation for reference only)

12. Contract asset and contact liability

(1) Contract asset

Contract asset is an entity’s right to consideration in exchange for goods or services that the

entity has transferred to a customer when that right is conditioned on something other than the

passage of time. For example the group sold two goods that can be clearly distinguished to

the client then the group has the right to consideration in exchange of the goods because one

of the goods are delivered but the consideration’s collection is conditioned on the other

goods delivery in this case the right to consideration shall be recognized as contract asset.Expected credit loss recognition of contract asset is referred to the Note III、10 Provision for

impairment of financial assets.

(2) Contract liability

An entity’s obligation to transfer goods or services to a customer for which the entity has

received consideration (or the amount is due) from the customer. If a customer pays

consideration or the group has a right to an amount of consideration that is unconditional

before the group transfers a good or service to the customer the group shall present the

contract as a contract liability when the payment is made or the payment is due (whichever is

earlier).

13. Assets relevant to contract cost

(1) Assets recognition methods in relation to contract cost

Assets relevant to contract cost in the group include cost to fulfill the contract and cost to

obtain a contract. Cost to fulfill the contract is presented under inventory and other

non-current assets. Cost to obtain a contract is presented under other current assets and other

non-current assets.If the costs incurred in fulfilling a contract with a customer are not within the scope of

another Standard such as inventory fixed assets or intangible assets an entity shall

recognize an asset from the costs incurred to fulfill a contract only if those costs meet all of

the following criteria: the costs relate directly to a contract or to an anticipated contract

including direct labor direct materials and overheads which is clearly stated to be borne by

the client and any other cost in line with the contract; the costs enhance resources of the group

that will be used in performance obligations in the future; and the costs are expected to be

recovered.

29BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO. LTD.

Notes to financial statements

January 1 2024 to December 31 2024

(The currency is in RMB Yuan except otherwise indicated)

(English translation for reference only)

An asset as the incremental costs of obtaining a contract with a customer shall be recognized

if the group expects to recover those costs. The group may recognize the incremental costs of

obtaining a contract as an expense when incurred if the amortization period of the asset t is

one year or less. The incremental costs of obtaining a contract are those costs that the group

incurs to obtain a contract with a customer that it would not have incurred if the contract had

not been obtained (for example a sales commission). Other expenses incurred in order to

obtain a contract rather than the incremental cost and expected to be recovered (regardless of

whether the contract is obtained such as travelling expenses) shall be recognized as an

expense when incurred unless those costs are explicitly chargeable to the customer.

(2) Amortization of asset relevant to contract cost

An asset recognized in accordance with contract cost shall be amortized on a systematic basis

that is consistent with the transfer to the customer of the goods or services to which the asset

relates.

(3) Impairment of asset relevant to contract cost

If the carrying value of the group's assets related to the contract cost is higher than the

following two differences the group will make the impairment provision for the excessive

part and recognize the asset impairment loss: * The remaining consideration that the

group is expected to obtain due to the transfer of the commodities related to the asset; *

Estimate the costs to be incurred for the transfer of the relevant goods

14. Long-term equity investment

Long term equity investments are the equity investment in subsidiary in associated company

and in joint venture.

(1) Judgement on control joint control and significant influence

Equity investments in which the group has a significant impact on the investee are

investments in associates.Significant influence refers to having the power to participate in the decision-making of the

financial and operational policies of the investee but not being able to control or jointly

control the formulation of these policies with other parties. Significant influence exists when

the entity directly or indirectly owned 20% or more but less than 50% voting shares in the

investee unless there is explicit evidence that the company cannot participate in the

production and operation decisions of the investee or have control over the investee.

30BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO. LTD.

Notes to financial statements

January 1 2024 to December 31 2024

(The currency is in RMB Yuan except otherwise indicated)

(English translation for reference only)

When having less than 20% voting shares the group’s significant influence still exists if the

followings are taken into accounts: representation on the board of directors or equivalent

governing body of the investee participation in financial or operating activities

policy-making processes material transactions between the investor and the investee

interchange of managerial personnel or provision of essential technical information etc.The group’s joint venture investment is an equity investment whereby the parties have jointly

control over it and have rights to the net assets of the investee. Joint control is the

contractually agreed sharing of control of an arrangement which exists only when decisions

about the relevant activities require the unanimous consent of the parties sharing control. The

group’s judgement on joint control is based on the joint arrangement that all participants or

combinations of participants collectively control the arrangement and that decisions relating

to the activities of the arrangement must be made with the unanimous consent of those

participants who collectively control the arrangement.

(2) Accounting

The group initially measures the long-term investment in line with the initial cost for

acquiring the investment.The initial investment cost for long-term equity investment acquired through business

combination under common control is the carrying amount presented in the consolidated

financial statements of the share of net assets at the combination date in the acquired

company. If the carrying amount of net assets at the combination date in the acquired

company is negative investment shall be recognized at zero.If long-term equity investment is acquired through business combination not under common

control initial investment cost shall be the combination cost. If the equity investment of

investee not under common control is acquired by stages and it’s not a bundled transaction

the carrying amount of the equity investment held previously plus newly increased investment

cost are taken as the initial investment cost.Apart from the long-term equity investments acquired through business combination the cost

of investment for the long-term equity investments acquired by cash payment is the amount of

cash paid relevant direct expense tax and other necessary expenses for the investment. For

long-term equity investment acquired by issuing equity instruments the cost of investment is

the fair value of the equity instrument issued.The Company adopts cost model for investment in subsidiary on separate financial statement.Under cost model the long-term equity investment is measured at initial investment cost.

31BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO. LTD.

Notes to financial statements

January 1 2024 to December 31 2024

(The currency is in RMB Yuan except otherwise indicated)

(English translation for reference only)

When more investment is added it shall increase the carrying amount of investment by

adjusting the fair value of additional investment and relevant transaction expenses. Cash

dividend or profit declared by investee shall be recognized as investment gain/loss for the

period based on the proportion share in the investee.The Company adopts equity method for investment in joint venture and affiliate. Under

equity method if the initial investment cost is greater than the share of fair value of the

identifiable net assets in the investee the initial investment cost of long-term equity

investment is no need to be adjusted; If the initial investment cost is less than the share of fair

value of the identifiable net assets in the investee the difference shall be recorded into the

current profit and loss and the cost of long-term equity investment shall be adjusted at the

same time.Long-term equity investment subsequently under equity method shall be adjusted for it

carrying amount according to the share of equity increase or decrease in the investee. The

Company shall recognize its share of the investee’s net gain or losses after the investee’s net

profit adjustment based on the fair value of the investee’s individual identifiable assets at

the acquisition date after making appropriate adjustments thereto in conformity with the

accounting policies and accounting period and offsetting the unrealized profit or loss from

the inter-group transactions not constituting the business between the entity and its

associates and joint ventures according to the shareholding attributable to the group (full

amount of loss shall be recognized if the inter-group transaction is impairment loss). The

group recognizes net losses incurred by investee to the extent that the carrying value of

long-term equity investments and other long-term interests substantially constituting net

investments in investee are written down to zero except where the group is obliged to bear

additional losses.The difference between the book value of long-term equity investment and actual acquisition

cost shall be recognized in the gain or loss of investment when the long-term equity

investment is disposed of.For long-term investments accounted under equity method other comprehensive income

recorded shall be accounted on the same basis as the investee directly disposing of related

assets or liability when equity method is not used any longer. The movements of

shareholder’s equity other than the net profit or loss other comprehensive income and profit

distribution previously recorded in the shareholder’s equity of the Company are recycled to

investment income for the period on disposal.

32BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO. LTD.

Notes to financial statements

January 1 2024 to December 31 2024

(The currency is in RMB Yuan except otherwise indicated)

(English translation for reference only)

If the remaining equity after the partially disposal is still accounted for under the equity

method the relevant other comprehensive income previously recognized under the equity

method is treated on the same basis as the direct disposal of the relevant assets or liabilities

by the investee and is carried forward on a proportional basis and the owner's equity which

is apart from net profit and loss other comprehensive income and profit distribution of the

investee shall be recognized and proportionally transfers to current investment income.Where the entity has no longer joint control or significant influence in the investee company

as a result of partially disposal of the investment the remaining investment will be accounted

for in line with the Recognition and Measurement of Financial Instruments Standard -No 22

of Accounting Standards for Business Enterprises(No7 Caikuai [2017]) and the difference

between the fair value of remaining investment at the date of losing joint control or

significant influence and its carrying amount shall be recognized in the profit or loss for the

year.Where the entity has no longer control over the investee company as a result of partially

disposal of the investment the remaining investment will be changed to be accounted for

using equity method providing remaining joint control or significant influence over the

investee company. The difference between carrying amount of disposed investment and

consideration received actually shall be recognized as investment gain or loss for the period

and investment shall be adjusted accordingly as if it was accounted for under equity model

since acquisition. Where the entity has on longer joint control or significant influence in the

investee as a result of disposal the investment shall be accounted for in accordance with the

Recognition and Measurement of Financial Instruments Standard -No 22 of Accounting

Standards for Business Enterprises(No7 Caikuai [2017]) and difference between the carrying

amount and disposal consideration shall be recognized as investment gain or loss for the

period and the difference between the fair value of remaining investment at the date of losing

control and its carrying amount shall be recognized in the profit or loss for the year.

15. Investment property

Investment property is held to earn rentals or for capital appreciation or both and includes

property building and use right of land. They are measured at cost model.Investment property is depreciated or amortized on straight line basis and its expected useful

life net residual value rate and annual depreciation rate is as follows:

Useful life Estimated net residual value Annual

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