Dalian Refrigeration Co., Ltd.

Announcement of Resolutions Adopted at the 2005 Annual General Meeting

I. Important Notice
No proposals were added, rejected, or amended during the course of this meeting.
II. Status of the Meeting
1. Date of convening: May 30, 2006
2. Meeting Location: Conference Room on the 8th Floor of the Company
3. Voting method: On-site voting
4. Convenor: The Company’s Board of Directors
5. Host: Zhang He
6. The convening of the meeting complies with the provisions of the Company Law, the Stock Listing Rules, and the Articles of Association. Notice of the convening of this meeting was published in the China Securities Journal and the Wenhui Daily on April 27, 2006.
III. Attendance at the Meeting
1. Overall Attendance情况
A total of 22 shareholders and their proxies attended the meeting, representing 131.61181 million shares, or 37.60% of the company’s total outstanding voting shares of 350.014975 million.
2. Attendance of A-share Shareholders
A total of 21 A-share shareholders and their proxies attended the meeting, representing 96.61031 million shares, or 41.11% of the company’s total A-share voting shares of 235.014975 million.
3. Attendance of B-share Holders
A total of one B-share shareholder and its proxy attended the meeting, representing 35.0015 million shares, or 30.44% of the total voting shares held by B-share shareholders, which amount to 115 million shares.
IV. Review and Voting on Proposals
1. Deliberated and approved the 2005 Annual Work Report of the Company’s Board of Directors;
Approved: 131,611,810 shares, representing 100% of the voting rights held by shareholders present; opposed: 0 shares; abstained: 0 shares. Specifically: A-share shareholders approved 96,610,310 shares, representing 100% of the voting rights held by A-share shareholders present; opposed: 0 shares; abstained: 0 shares. B-share shareholders approved 35,001,500 shares, representing 100% of the voting rights held by B-share shareholders present; opposed: 0 shares; abstained: 0 shares.
2. Deliberated and approved the 2005 Work Report of the Company’s Supervisory Board;
Approved: 131,611,810 shares, representing 100% of the voting rights held by shareholders present; opposed: 0 shares; abstained: 0 shares. Specifically: A-share shareholders approved 96,610,310 shares, representing 100% of the voting rights held by A-share shareholders present; opposed: 0 shares; abstained: 0 shares. B-share shareholders approved 35,001,500 shares, representing 100% of the voting rights held by B-share shareholders present; opposed: 0 shares; abstained: 0 shares.
3. Deliberated and approved the Company’s 2005 Annual Financial Settlement Report;
Approved: 131,611,810 shares, representing 100% of the voting rights held by shareholders present; opposed: 0 shares; abstained: 0 shares. Specifically: A-share shareholders approved 96,610,310 shares, representing 100% of the voting rights held by A-share shareholders present; opposed: 0 shares; abstained: 0 shares. B-share shareholders approved 35,001,500 shares, representing 100% of the voting rights held by B-share shareholders present; opposed: 0 shares; abstained: 0 shares.
4. Deliberated and approved the Company’s 2005 Profit Distribution Plan;
According to the audit conducted by Dalian Hualian Certified Public Accountants LLP, the Company recorded a net profit after tax of RMB 100.812 million for the year 2005. In accordance with relevant state regulations and the Company’s Articles of Association, RMB 10.081 million was appropriated as statutory surplus reserve at 10%, RMB 10.081 million as statutory public welfare fund at 10%, and RMB 1.690 million was set aside as reserves for consolidated subsidiaries, for a total appropriation of RMB 21.852 million. Consequently, the profit available for distribution to shareholders for the year amounted to RMB 78.960 million. Combined with the undistributed profits at the beginning of the year of RMB 137.283 million, the cumulative profit available for distribution to shareholders totaled RMB 216.243 million.
According to the audit conducted by PwC Zhongtian Certified Public Accountants LLP, the company recorded a net profit of RMB 101.685 million for the year 2005. After making statutory surplus reserve allocations, statutory public welfare fund allocations, and provisions for subsidiaries in the consolidated financial statements, the profit available for distribution to shareholders for the year amounted to RMB 79.833 million. Combined with the undistributed profits at the beginning of the year of RMB 107.148 million, the cumulative profit available for distribution to shareholders totaled RMB 186.982 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 186.982 million, of which RMB 10.081 million is appropriated as discretionary statutory surplus reserve at a rate of 10%, RMB 52.502 million is allocated for dividend distribution, and the remaining balance of RMB 124.399 million is carried forward for distribution in the next fiscal year.
Company’s 2005 Dividend Distribution Plan:
Based on the total share capital of 350,014,975 shares as of the end of 2005, 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.
This year, the company will not capitalize its capital reserve to increase share capital.
Approved: 131,611,810 shares, representing 100% of the voting rights held by shareholders present; opposed: 0 shares; abstained: 0 shares. Specifically: A-share shareholders approved 96,610,310 shares, representing 100% of the voting rights held by A-share shareholders present; opposed: 0 shares; abstained: 0 shares. B-share shareholders approved 35,001,500 shares, representing 100% of the voting rights held by B-share shareholders present; opposed: 0 shares; abstained: 0 shares.
5. Deliberated and approved the report on amending the Company Charter;
A total of 129,989,560 shares were approved, representing 98.77% of the voting rights held by shareholders present; no shares were opposed; and 1,622,250 shares were abstained from. Specifically: A-share shareholders approved 94,988,060 shares, representing 98.32% of the voting rights held by A-share shareholders present; no shares were opposed; and 1,622,250 shares were abstained from. B-share shareholders approved 35,001,500 shares, representing 100% of the voting rights held by B-share shareholders present; no shares were opposed; and no shares were abstained from.
6. Deliberated and approved the report on amending the Rules of Procedure for the Shareholders’ Meeting;
A total of 129,989,560 shares were approved, representing 98.77% of the voting rights held by shareholders present; no shares were opposed; and 1,622,250 shares were abstained from. Specifically: A-share shareholders approved 94,988,060 shares, representing 98.32% of the voting rights held by A-share shareholders present; no shares were opposed; and 1,622,250 shares were abstained from. B-share shareholders approved 35,001,500 shares, representing 100% of the voting rights held by B-share shareholders present; no shares were opposed; and no shares were abstained from.
7. Deliberated and approved the report on amending the Rules of Procedure for Board Meetings and the Governance Code;
A total of 129,989,560 shares were approved, representing 98.77% of the voting rights held by shareholders present; no shares were opposed; and 1,622,250 shares were abstained from. Specifically: A-share shareholders approved 94,988,060 shares, representing 98.32% of the voting rights held by A-share shareholders present; no shares were opposed; and 1,622,250 shares were abstained from. B-share shareholders approved 35,001,500 shares, representing 100% of the voting rights held by B-share shareholders present; no shares were opposed; and no shares were abstained from.
8. Deliberated and approved the report on amending the Rules of Procedure of the Supervisory Board;
Approved: 131,611,810 shares, representing 100% of the voting rights held by shareholders present; opposed: 0 shares; abstained: 0 shares. Specifically: A-share shareholders approved 96,610,310 shares, representing 100% of the voting rights held by A-share shareholders present; opposed: 0 shares; abstained: 0 shares. B-share shareholders approved 35,001,500 shares, representing 100% of the voting rights held by B-share shareholders present; opposed: 0 shares; abstained: 0 shares.
9. Deliberated and approved the report on the establishment of specialized committees of the Board of Directors;
The following two specialized committees of the Board of Directors are hereby established: the Audit Committee and the Compensation and Performance Evaluation Committee. Their composition and principal responsibilities are as follows:
1. Audit Committee: (5 members)
Convener: Zhang Guile (Independent Director)
Members: Zhang He, Xu Xiaorui, Lü Zhongli (Independent Director), Wang Dong (Independent Director), Zhang Guile (Independent Director)
Main Responsibilities: (1) Propose the engagement or replacement of an external auditing firm; (2) oversee the company’s internal audit system and its implementation; (3) facilitate communication between internal and external auditors; (4) review the company’s financial information and its disclosures; (5) examine the company’s internal control system.
2. Compensation and Assessment Committee: (5 members)
Convener: Wang Dong (Independent Director)
Members: Zhang He, Mu Chuanjiang, Lü Zhongli (Independent Director), Wang Dong (Independent Director), Zhang Guile (Independent Director)
Main responsibilities: (1) to study the criteria for evaluating directors and senior management, conduct such evaluations, and make recommendations; and (2) to study and review the remuneration policies and plans for directors and senior management.
Approved: 131,611,810 shares, representing 100% of the voting rights held by shareholders present; opposed: 0 shares; abstained: 0 shares. Specifically: A-share shareholders approved 96,610,310 shares, representing 100% of the voting rights held by A-share shareholders present; opposed: 0 shares; abstained: 0 shares. B-share shareholders approved 35,001,500 shares, representing 100% of the voting rights held by B-share shareholders present; opposed: 0 shares; abstained: 0 shares.
10. Deliberated and approved the Explanation on the Termination of the Project Involving Dalian Bingshan Investment Co., Ltd.;
At the 2002 Annual General Meeting held on May 28, 2003, the Company reviewed and approved the “Report on the Equity Participation in Dalian Bingshan Investment Co., Ltd.” and resolved to authorize the Company, together with Dalian Bingshan Rubber & Plastics Co., Ltd., to jointly invest in the establishment of Dalian Bingshan Investment Co., Ltd.
During the specific preparatory phase of this project, numerous factors delayed its completion. In light of the project’s particular circumstances and in alignment with the company’s development plan, the company has decided to terminate the project.
Approval was granted for 129,816,810 shares, representing 98.64% of the voting rights held by shareholders present; no shares were opposed; and 1,795,000 shares were abstained from. Specifically: A-share shareholders approved 94,815,310 shares, representing 98.14% of the voting rights held by A-share shareholders present; no shares were opposed; and 1,795,000 shares were abstained from. B-share shareholders approved 35,001,500 shares, representing 100% of the voting rights held by B-share shareholders present; no shares were opposed; and no shares were abstained from.
11. Deliberated and approved the Report on the Company’s Routine Related-Party Transactions for the Year 2005 and the Estimated Routine Related-Party Transactions for the Year 2006;
In 2005, the total amount of routine related-party transactions between the Company and its affiliates was RMB 629.84 million, representing 114.52% of the projected annual amount for 2005. Specifically, purchases from affiliates of complete sets of project-supporting products totaled RMB 443.70 million, or 110.93% of the projected annual amount; and sales to affiliates of supporting components amounted to RMB 186.14 million, or 124.09% of the projected annual amount.
Based on the 2005 routine related-party transactions, the Company expects the total amount of such transactions for the full year 2006 to be approximately RMB 650 million, including approximately RMB 450 million in purchases of complete-system supporting products from related parties and approximately RMB 200 million in sales of supporting components to related parties.
This transaction constitutes a related-party transaction, and the related parties with an interest in such transaction have waived their voting rights on the proposal at the shareholders’ meeting. Accordingly, Dalian Bingshan Group Co., Ltd. recused itself from the vote. Directors Zhang He and Mu Chuanjiang also recused themselves from the vote. After deducting the 76,855,683 shares of voting rights held by Dalian Bingshan Group Co., Ltd. and the 62,790 shares of voting rights held by the aforementioned two directors, the total voting rights represented by non-related shareholders present at the meeting amounted to 54,693,337 shares. Of these, non-related A-share shareholders held 19,691,837 shares of voting rights, while non-related B-share shareholders held 35,001,500 shares of voting rights.
Approved: 54,693,337 shares, representing 100% of the voting rights held by non-affiliated shareholders present; opposed: 0 shares; abstained: 0 shares. Specifically: A-share holders approved 19,691,837 shares, representing 100% of the voting rights held by non-affiliated A-share holders present; opposed: 0 shares; abstained: 0 shares. B-share holders approved 35,001,500 shares, representing 100% of the voting rights held by B-share holders present; opposed: 0 shares; abstained: 0 shares.
12. Deliberated and approved the report on the performance of duties by the company’s independent directors;
Approval: 130.72001 million shares, representing 99.32% of the voting rights held by shareholders present; Opposition: 0 shares; Abstentions: 891,800 shares. Specifically: For A-share holders, approval was 95.71851 million shares, representing 99.08% of the voting rights held by A-share holders present; opposition: 0 shares; abstentions: 891,800 shares. For B-share holders, approval was 35.0015 million shares, representing 100% of the voting rights held by B-share holders present; opposition: 0 shares; abstentions: 0 shares.
13. Deliberated and approved the report on increasing the remuneration standards for independent directors.
Increase the annual remuneration for each independent director to RMB 50,000.
A total of 128,925,010 shares were approved, representing 97.96% of the voting rights held by shareholders present; no shares were opposed; and 2,686,800 shares were abstained from. Specifically: A-share shareholders approved 93,923,510 shares, representing 97.22% of the voting rights held by A-share shareholders present; no shares were opposed; and 2,686,800 shares were abstained from. B-share shareholders approved 35,001,500 shares, representing 100% of the voting rights held by B-share shareholders present; no shares were opposed; and no shares were abstained from.
For detailed information on the aforementioned matters under review, please refer to the Company’s announcements of resolutions passed by the Board of Directors, the Supervisory Committee, and routine related-party transactions, which were published in the China Securities Journal and the Wen Wei Po on April 27, 2006.
V. Legal Opinion Issued by the Attorney
1. Name of the law firm: Liaoning Huaxia Law Firm
2. Attorney’s Name: Bao Jingxin
3. Conclusive Opinion: “The attorneys of this firm are of the opinion that the convening and conduct of the Company’s current shareholders’ meeting comply with the provisions of applicable laws, regulations, and the Company’s Articles of Association; the qualifications of the persons attending the meeting are lawful and valid; and the voting procedures and voting results of the meeting are lawful and valid.”

Dalian Refrigeration Co., Ltd.
May 31, 2006