Securities Code: 000530; 200530 Securities Abbreviation: Daling Shares; Daling B Announcement No.: 2007-003

Dalian Refrigeration Co., Ltd.
Announcement of Resolutions Adopted at the Tenth Meeting of the Fourth Session of the Board of Directors

All members of the Company’s Supervisory Board hereby certify that the contents of this announcement are true, accurate, and complete, and that there are no false records, misleading statements, or material omissions.

The Tenth Meeting of the Fourth Session of the Board of Directors of Dalian Refrigeration Co., Ltd. (“the Company”) was held on April 24, 2007, in the Company’s Eighth-Floor Conference Room. Notice of the meeting was served in writing on April 13, 2007. Nine directors were scheduled to attend, and all nine directors were present. The meeting was chaired by Mr. Zhang He, Chairman of the Board. The notice and convening of the meeting complied with applicable laws, regulations, rules, and the Company’s Articles of Association. At this meeting, the following resolutions were reviewed and adopted:
I. Report on the Work of the Board of Directors for the Year 2006;
Approved: 9 votes; Opposed: 0 votes; Abstentions: 0 votes.
II. The Company’s 2006 Annual Financial Settlement and 2007 Annual Financial Budget Report;
Approved: 9 votes; Opposed: 0 votes; Abstentions: 0 votes.
III. Proposed Profit Distribution Plan for the Company for the Year 2006;
According to the audit conducted by Dalian Hualian Certified Public Accountants LLP, the Company recorded a net profit after tax of RMB 117.295 million for the year 2006. In accordance with relevant state regulations and the Company’s Articles of Association, RMB 11.730 million was appropriated as the statutory surplus reserve at a rate of 10%, and RMB 9.884 million was set aside as reserves for consolidated subsidiaries, for a total appropriation of RMB 21.614 million. Consequently, the profit available for distribution to shareholders for the year amounted to RMB 95.681 million. Adding this to the undistributed profits at the beginning of the year of RMB 206.162 million and deducting the RMB 52.502 million in ordinary share dividends paid for the year 2005, the cumulative profit available for distribution to shareholders totaled RMB 249.341 million.
According to the audit conducted by PwC Zhongtian Certified Public Accountants LLP, the company recorded a net profit of RMB 126.384 million for the year 2006. After setting aside the statutory surplus reserve and making provisions for reserves related to consolidated subsidiaries, the profit available for distribution to shareholders for the year amounted to RMB 104.770 million. Combined with the undistributed profits at the beginning of the year of RMB 124.399 million, the cumulative profit available for distribution to shareholders totaled RMB 229.169 million.
In accordance with the relevant provisions of the Company’s Articles of Association and applying the lower-of-the-two principle, the distribution is made as follows: the total profit available for distribution to shareholders for the current year amounts to RMB 229.169 million, of which RMB 23.459 million is appropriated as discretionary statutory surplus reserve at a rate of 20%, RMB 52.502 million is allocated for dividend distribution, and the remaining balance of RMB 153.208 million is carried forward for distribution in the next fiscal year.
Company’s 2006 Dividend Distribution Plan:
Based on the total share capital of 350,014,975 shares as of the end of 2006, a cash dividend of RMB 1.50 per 10 shares (inclusive of tax) will be distributed; the cash dividend for B shares will be converted into Hong Kong dollars for payment.
The Company will not capitalize its capital reserve to increase share capital this year.
The foregoing contingency plans shall be submitted to the Company’s 2006 Annual General Meeting for approval.
Approval: 9 votes; Opposition: 0 votes; Abstention: 0 votes.
IV. Report on Significant Changes in the Company’s Accounting Policies and Accounting Estimates;
Following the adoption of the new Enterprise Accounting Standards, the principal accounting policies and accounting estimates that may be changed by the Company, as well as the resulting impacts on the Company’s financial position and operating results, are as follows:
1. Long-term equity investments
In accordance with Accounting Standard for Business Enterprises No. 2—Long-term Equity Investments, the Company has changed the accounting treatment of its long-term equity investments in subsidiaries from the equity method to the cost method under the current accounting policies. This change will affect the parent company’s current-period investment income; however, it will not impact the consolidated financial statement data of the Company.
2. Employee Compensation
In accordance with Accounting Standard for Business Enterprises No. 9—Employee Compensation, the current accounting policy of making proportional accruals for employee welfare expenses shall be changed to recognizing such expenses on an actual-incurrence basis. The balance of employee welfare payable as reflected in the Company’s prior financial statements shall be fully reclassified to employee compensation payable as of the date of initial application.
3. Government Subsidies
In accordance with Accounting Standard for Business Enterprises No. 16—Government Grants, an enterprise shall, under the current accounting policy, reclassify government grants previously recognized as special payables into two categories: government grants related to assets and government grants related to income. Government grants related to assets shall be recognized as deferred income and allocated evenly over the useful life of the related asset, with the allocated amount recognized in profit or loss for the current period. Government grants related to income, if intended to compensate for expenses or losses in future periods, shall be recognized as deferred income and recognized in profit or loss on a systematic basis over the relevant period; if intended to compensate for expenses or losses already incurred, they shall be recognized directly in profit or loss for the current period.
4. Income Tax
In accordance with Accounting Standard for Business Enterprises No. 18—Income Taxes, the Company has changed its income tax accounting treatment from the payable tax method under the current accounting policy to the balance-sheet liability method. This change will affect the Company’s income tax expense, thereby impacting its current profit or loss and shareholders’ equity.
5. Consolidated Financial Statements
In accordance with Accounting Standard for Business Enterprises No. 33—Consolidated Financial Statements, the Company has changed its accounting policy from separately presenting minority interests in the consolidated financial statements under the current policy to presenting them as a separate line item, “Minority Interests,” under the equity section of the consolidated balance sheet.
The aforementioned differences and impact items may be adjusted in light of further interpretations issued by the Ministry of Finance regarding the new accounting standards.
Approval: 9 votes; Opposition: 0 votes; Abstention: 0 votes.
V. Report on the Company’s Routine Related-Party Transactions for the Year 2006 and the Estimated Routine Related-Party Transactions for the Year 2007;
On April 13, 2007, the Company’s independent directors reviewed this proposal and agreed to submit it for consideration by the Board of Directors.
In 2006, the total amount of routine related-party transactions between the Company and its affiliates amounted to RMB 690.26 million, representing 106.19% of the projected annual amount for 2006. Specifically, purchases from affiliates of complete sets of project-supporting products totaled RMB 481.56 million, or 107.01% of the projected annual amount; and sales to affiliates of supporting components and parts amounted to RMB 208.70 million, or 104.35% of the projected annual amount.
Based on the 2006 routine related-party transactions, the Company expects the total amount of such transactions for the full year 2007 to be approximately RMB 720 million, including approximately RMB 500 million in purchases of complete-system supporting products from related parties and approximately RMB 220 million in sales of supporting components to related parties.
Directors Zhang He and Mu Chuanjiang are related directors and recused themselves from the deliberation of the aforementioned matters.
Approvals: 7; Opposites: 0; Abstentions: 0.
VI. Report on the Appointment of the Company’s Auditor for the Year 2007;
It is proposed to re-engage Dalian Hualian Certified Public Accountants LLP as the Company’s domestic auditor for the year 2007; and to re-engage PwC Zhongtian Certified Public Accountants LLP as the Company’s overseas auditor for the year 2007. In accordance with the specific requirements of the audit engagement, it is proposed to pay Dalian Hualian Certified Public Accountants LLP an annual audit fee of RMB 280,000, with all related audit expenses to be borne by the firm; and to pay PwC Zhongtian Certified Public Accountants LLP an annual audit fee of RMB 980,000, with all related audit expenses to be borne by the firm.
On April 13, 2007, the Company’s independent directors reviewed this proposal and agreed to submit it for consideration by the Board of Directors.
Approval: 9 votes; Opposition: 0 votes; Abstention: 0 votes.
VII. Report on the Reversal of Certain Asset Impairment Provisions;
In view of the significant improvement in the financial condition of Guotai Junan Securities Co., Ltd. for the year 2006, the company proposes to reverse impairment provisions on a pro rata basis in the amount of RMB 6,032,318.82, leaving remaining impairment provisions of RMB 1,582,164.89.
Approval: 9 votes; Opposition: 0 votes; Abstention: 0 votes.
VIII. Report on the Amendment of the Company’s Term of Operation;
In accordance with the relevant provisions of the Company Charter, it is hereby approved to amend the company’s term of operation to perpetual existence.
Approval: 9 votes; Opposition: 0 votes; Abstention: 0 votes.
IX. Report on the Formulation of the Company’s Information Disclosure Management System;
(See Cninfo for details) http://www.cninfo.com.cn )
Approval: 9 votes; Opposition: 0 votes; Abstention: 0 votes.
X. Report on Equity Participation in Dalian Sanyo High-Efficiency Refrigeration Systems Co., Ltd.;
The Company intends to jointly invest with Sanyo Electric Co., Ltd. and other parties to establish Dalian Sanyo High-Efficiency Refrigeration Systems Co., Ltd. The registered capital of the company will be RMB 80 million, with the Company contributing RMB 20 million in cash, representing a 25% equity interest. The company will primarily engage in the manufacture of high-efficiency heat exchangers.
The Board of Directors believes that this related-party transaction will enhance the Company’s self-sufficiency in supporting operations and improve the efficiency of capital utilization, thereby strengthening the Company’s growth momentum and delivering better returns to all shareholders.
Since Sanyo Electric Co., Ltd. is an affiliated entity of the Company, this transaction constitutes a related-party transaction. During the Board’s vote on the matter, Director Tadao Shimada recused himself. The Company’s independent directors issued a corresponding opinion on this related-party transaction, concluding that it is fair, does not prejudice the interests of the Company or its minority shareholders, and will help enhance the Company’s self-sufficiency in component supply and improve the efficiency of capital utilization; furthermore, the voting procedure for this related-party transaction was lawful, and the relevant directors duly recused themselves.
Sanyo Electric Co., Ltd. is one of Japan’s leading manufacturers of electrical and electronic products and currently holds a 10% stake in our company.
This transaction does not require approval by the shareholders’ meeting or by the relevant authorities.
On April 13, 2007, the Company’s independent directors reviewed this proposal and agreed to submit it for consideration by the Board of Directors.
Approval: 8 votes; Opposition: 0 votes; Abstentions: 0 votes.
XI. Report on the Appointment of the Company’s Securities Affairs Representative;
Ms. Ge Yan, the Company’s former Securities Affairs Representative, has resigned due to a change in her employment and will no longer serve in this capacity. Mr. Song Wenbao is hereby appointed as the Company’s Securities Affairs Representative. (Resumé attached.)
Approval: 9 votes; Opposition: 0 votes; Abstention: 0 votes.
XII. The Company’s 2006 Annual Report;
Approval: 9 votes; Opposition: 0 votes; Abstention: 0 votes.
XIII. The Company’s First-Quarter 2007 Quarterly Report;
Approval: 9 votes; Opposition: 0 votes; Abstention: 0 votes.
XIV. Annual Report on the Performance of Duties by the Company’s Independent Directors for 2006;
(See Cninfo for details) http://www.cninfo.com.cn )
Approval: 9 votes; Opposition: 0 votes; Abstention: 0 votes.

XV. Matters Relating to the Convening of the 2006 Annual General Meeting of Shareholders.
Approval: 9 votes; Opposition: 0 votes; Abstention: 0 votes.

Board of Directors, Dalian Refrigeration Co., Ltd.
April 26, 2007

Attachment: Personal Resume of the Securities Affairs Representative
Mr. Song Wenbao, 34, is a CFA charterholder. He graduated from Zhejiang University in 1995 with a major in Chemical Equipment and Machinery and a minor in Finance, earning a Bachelor’s degree. Since August 1995, he has been employed in the company’s Securities Department, where he has been exclusively responsible for information disclosure and investor relations management, among other duties.
Contact Address: Securities Department, Company, No. 888 Southwest Road, Shahekou District, Dalian
　　Postal Code: 116033
　　Contact number: 0086-411-86654530
　　Contact Fax: 0086-411-86654530
Email: 000530@bingshan.com