Securities Code: 000530; 200530 Securities Abbreviation: Bingshan Refrigeration & Heating; Bingshan B Announcement No.: 2022-041

 

Iceberg Cold & Heat Technology Co., Ltd.

Announcement of Resolutions Adopted at the Fourth Session of the Ninth Supervisory Board

 

The Company and all members of the 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.

 

I. Status of the Supervisory Board Meetings

1. Notice of this Supervisory Board meeting was issued in writing on September 19, 2022.

2. This meeting of the Supervisory Board was held on September 26, 2022, by way of on-site voting.

3. The required number of supervisors to attend the meeting is three, and the actual number of supervisors who attended is three.

4. This meeting of the Supervisory Board was chaired by Mr. Hu Xitang, Chairman of the Supervisory Board.

5. The convening of this meeting of the Supervisory Board complies with the provisions of applicable laws, administrative regulations, departmental rules, normative documents, and the Company’s Articles of Association.

II. Review of the Supervisory Board Meeting

1. Deliberated and approved the “Proposal on the Compliance of the Company’s Current Major Asset Acquisition and Related-Party Transaction with Relevant Legal and Regulatory Requirements.”

The Company proposes to acquire, by way of cash payment, the respective equity interests in Panasonic Compressor (Dalian) Co., Ltd. (“Panasonic Compressor”) and Panasonic Refrigeration Systems (Dalian) Co., Ltd. (“Panasonic Refrigeration Systems”) from Sanyo Electric Co., Ltd. (hereinafter referred to as “Sanyo Electric”), Panasonic Appliances (China) Co., Ltd. (hereinafter referred to as “Panasonic China”), and Panasonic Cold Chain (Dalian) Co., Ltd. (hereinafter referred to as “Panasonic Cold Chain”) (collectively, the “Counterparties”) (hereinafter collectively referred to as the “Target Companies”) (hereinafter referred to as the “Current Major Asset Restructuring,” the “Current Restructuring,” or the “Current Transaction”).

In accordance with the Company Law of the People’s Republic of China, the Securities Law of the People’s Republic of China, the Measures for the Administration of Major Asset Restructuring of Listed Companies, and other relevant laws, regulations, departmental rules, and normative documents, and based on a self-examination and thorough deliberation of the Company’s actual operating conditions and the matters related to this major asset acquisition and associated transaction, the Supervisory Board is of the opinion that the proposed major asset acquisition and associated transaction complies with the applicable requirements and all substantive conditions stipulated in the aforementioned laws, regulations, and normative documents.

This proposal involves a related-party transaction, and the related-party supervisor Li Sheng recused himself from voting.

Voting results: 2 votes in favor, 0 votes against, and 0 abstentions.

This proposal still needs to be submitted to the Company’s Shareholders’ Meeting for consideration.

2. Deliberated and approved, item by item, the “Proposal on the Plan for This Major Asset Acquisition and Related Party Transaction.”

The Company intends to acquire the respective equity interests in Panasonic Compressors and Panasonic Refrigeration Equipment by making cash payments to Sanyo Electric, Panasonic China, and Panasonic Cold Chain. The specific plan is as follows:

2.01 Transaction Overview

The Company proposes to acquire, by way of cash payment, a 60% equity interest in Panasonic Compressor from Sanyo Electric; a 30% equity interest in Panasonic Refrigeration from Panasonic China; and a 25% equity interest in Panasonic Cold Chain from Panasonic Cold Chain. This transaction constitutes a major asset restructuring and a related-party transaction, but does not constitute a backdoor listing. Prior to this transaction, the Company held a 40% equity interest in Panasonic Compressor and a 20% equity interest in Panasonic Refrigeration; upon completion of this transaction, the Company will directly or indirectly hold 100% equity interests in both Panasonic Compressor and Panasonic Refrigeration.

This proposal involves a related-party transaction, and the related-party supervisor Li Sheng recused himself from voting.

Voting results: 2 votes in favor, 0 votes against, and 0 abstentions.

2.02 Counterparty

The counterparties to this transaction are Sanyo Electric, Panasonic China, and Panasonic Cold Chain.

This proposal involves a related-party transaction, and the related-party supervisor Li Sheng recused himself from voting.

Voting results: 2 votes in favor, 0 votes against, and 0 abstentions.

2.03 Underlying Asset

The assets subject to this transaction comprise a 60% equity interest in Panasonic Compressor held by Sanyo Electric, a 30% equity interest in Panasonic Refrigeration China held by Panasonic China, and a 25% equity interest in Panasonic Cold Chain held by Panasonic Cold Chain.

This proposal involves a related-party transaction, and the related-party supervisor Li Sheng recused himself from voting.

Voting results: 2 votes in favor, 0 votes against, and 0 abstentions.

2.04 Pricing Basis and Transaction Price

According to the “Asset Valuation Report on the Total Equity Value of Shareholders of Panasonic Compressor (Dalian) Co., Ltd. Involved in the Proposed Equity Acquisition by Bingshan Refrigeration Technology Co., Ltd.” (Zhonghua Pingbaozi [2022] No. 092) (“the Panasonic Compressor Asset Valuation Report”) and the “Asset Valuation Report on the Total Equity Value of Shareholders of Panasonic Refrigeration Systems (Dalian) Co., Ltd. Involved in the Proposed Equity Acquisition by Bingshan Refrigeration Technology Co., Ltd.” (Zhonghua Pingbaozi [2022] No. 093) (“the Panasonic Refrigeration Asset Valuation Report”), issued by Liaoning Zhonghua Asset Appraisal Co., Ltd. (hereinafter referred to as “Zhonghua Appraisal”), Zhonghua Appraisal, using May 31, 2022, as the valuation base date, conducted valuations of the target companies’ total shareholder equity using both the income approach and the asset-based approach. For the market value of the total shareholder equity of Panasonic Compressor, the income approach valuation result was adopted as the final valuation conclusion; for the market value of the total shareholder equity of Panasonic Refrigeration, the asset-based approach valuation result was adopted as the final valuation conclusion.

According to the “Asset Valuation Report on Panasonic Compressors” and the “Asset Valuation Report on Panasonic Chillers” issued by Zhonghua Appraisal, the market value assessment results for the shareholders’ equity of the target company are as follows:

 

Unit: ten thousand yuan

Project	Book value of net assets	Assessed value	Increase or decrease in value	Rate of increase or decrease
	A	B	C=B-A	D=C/A
Panasonic compressor 100% Equity	109,650.02	154,858.00	45,207.98	41.23%
Panasonic Refrigeration 100% Equity	13,319.94	14,860.92	1,540.98	11.57%

Following amicable negotiations between the Company and the counterparty, and based on the aforementioned valuation results, the transaction price for a 60% equity interest in Panasonic Compressor is RMB 929.148 million, while the transaction price for a 55% equity interest in Panasonic Refrigeration is RMB 81.7351 million, for a total consideration of RMB 1,010.8831 million for all assets subject to this transaction.

This proposal involves a related-party transaction, and the related-party supervisor Li Sheng recused himself from voting.

Voting results: 2 votes in favor, 0 votes against, and 0 abstentions.

2.05 Consideration Payment Method and Payment Term

Pursuant to the Conditional Equity Transfer Agreement executed by the Company and the Counterparty, the Company shall, within 30 days after the issuance date of the new business license pertaining to this equity transfer, remit the agreed-upon consideration to the bank account designated by the Counterparty.

This proposal involves a related-party transaction, and the related-party supervisor Li Sheng recused himself from voting.

Voting results: 2 votes in favor, 0 votes against, and 0 abstentions.

2.06 Transitional Profit and Loss Arrangements

Pursuant to the Conditional Share Transfer Agreement for Panasonic Compressor (Dalian) Co., Ltd. executed between the Company and Sanyo Electric, any profits generated by Panasonic Compressor during the period from the valuation base date to the closing date shall be entitled to the Company, while any losses incurred shall be borne by Sanyo Electric in proportion to its equity interest in Panasonic Compressor held prior to this transaction. The amount of such profit or loss for the aforementioned period shall be audited and confirmed by an auditing institution, and Sanyo Electric shall, within 30 days from the date on which the auditing institution approves such amount, make full payment in cash directly to the Company.

Pursuant to the Conditional Share Transfer Agreement for Panasonic Refrigeration Systems (Dalian) Co., Ltd. entered into by the Company, Panasonic China, and Panasonic Cold Chain, any profits or losses generated by Panasonic Refrigeration from the valuation base date to the closing date shall be enjoyed by and borne by the Company.

This proposal involves a related-party transaction, and the related-party supervisor Li Sheng recused himself from voting.

Voting results: 2 votes in favor, 0 votes against, and 0 abstentions.

2.07 Transfer of Ownership of the Underlying Asset

Pursuant to the Conditional Share Transfer Agreement executed by the parties, the counterparty and the Company shall, within ten (10) business days after the Conditional Share Transfer Agreement becomes effective and the Company receives from the State Administration for Market Regulation a decision not to conduct further review, a decision not to prohibit, or a notice of approval for the withdrawal of the filing with respect to the concentration of undertakings involved in this restructuring, jointly effect the registration of the change. The share transfer shall be deemed complete on the date when the relevant registration authority has completed the registration of the change and the Target Company has obtained its new business license.

This proposal involves a related-party transaction, and the related-party supervisor Li Sheng recused himself from voting.

Voting results: 2 votes in favor, 0 votes against, and 0 abstentions.

2.08 Personnel Placement and Creditor-Debtor Settlement

This equity transfer does not involve any employee placement arrangements; the labor relationships between the target company and its employees shall remain unchanged as a result of this equity transfer. This equity transfer also does not entail the handling of any outstanding receivables or payables; prior to and following this equity transfer, all receivables and payables of the target company shall continue to be borne by the target company itself.

This proposal involves a related-party transaction, and the related-party supervisor Li Sheng recused himself from voting.

Voting results: 2 votes in favor, 0 votes against, and 0 abstentions.

2.09 Liability for Breach

Pursuant to the Conditional Equity Transfer Agreement executed by the parties, the liability for breach of contract shall be as follows:

Except in cases of force majeure, if a party to the contract breaches any obligation stipulated in the contract, such party shall compensate the other party for all losses incurred as a result of such breach. If the complying party, by written notice, demands that the breaching party remedy the breach, and the breaching party fails to do so within thirty (30) days, the complying party, in addition to its right to claim damages, shall also have the right to terminate the contract.

Where one party breaches the contract, any delay by the other party in pursuing liability for such breach or in submitting a proposed remedy shall not be deemed a waiver of the rights or remedies available under the contract.

If, prior to the completion of the closing of this equity transfer, the Company incurs any violations of laws or regulations that result in fines, late-payment penalties, or other administrative measures or sanctions imposed by competent authorities—including, but not limited to, those under the Administration for Market Regulation, tax authorities, labor and social security authorities, and housing provident fund authorities—after the valuation base date, or if the Company is required to make retroactive payments of corresponding amounts, the Company and the Transacting Party shall each bear the respective losses (including, but not limited to, arbitration fees, notarization fees, and attorney’s fees) in proportion to their respective equity interests in the Target Company held prior to this transaction. The portion attributable to the Transacting Party shall be paid in cash to the Company within 30 days from the date such event occurs. However, the foregoing provisions of this clause shall apply only to circumstances of the Target Company discovered on or before December 31, 2023, that arose between January 1, 2020, and the Closing Date.

If the counterparty fails to cooperate with the target company in completing the relevant industrial and commercial change registration procedures for this transaction within the time stipulated in the contract for more than three days, the Company shall have the right to unilaterally terminate the Conditional Effective Equity Transfer Agreement and to claim compensation from the counterparty for all losses incurred as a result.

If the Company fails to pay the transfer consideration within the prescribed time limit and, after being urged by the Counterparty, still fails to make such payment within ten (10) days, the Company shall pay the Counterparty a default penalty at a rate of 0.05% per day on the overdue amount.

This proposal involves a related-party transaction, and the related-party supervisor Li Sheng recused himself from voting.

Voting results: 2 votes in favor, 0 votes against, and 0 abstentions.

2.10 Term of Validity of the Resolution

The resolution for this transaction shall be valid for a period of 12 months from the date of approval by the shareholders’ meeting.

This proposal involves a related-party transaction, and the related-party supervisor Li Sheng recused himself from voting.

Voting results: 2 votes in favor, 0 votes against, and 0 abstentions.

The aforementioned proposal still needs to be submitted to the Company’s Shareholders’ Meeting for consideration.

3. Deliberated and approved the “Proposal on the Transaction Constituting a Related-Party Transaction”

The company intends to acquire a 60% equity interest in Panasonic Compressors by paying cash to Sanyo Electric; a 30% equity interest in Panasonic Refrigeration from Panasonic China; and a 25% equity interest in Panasonic Cold Chain from Panasonic Cold Chain.

Sanyo Electric holds an 8.72% equity interest in the Company and is thus an associated legal entity of the Company. Certain directors and supervisors of the Company and its controlling shareholder, Dalian Bingshan Group Co., Ltd., also serve as directors of Panasonic China, which is an associated legal entity of the Company. In addition, certain directors of the Company serve as directors of Panasonic Cold Chain, which is likewise an associated legal entity of the Company. Accordingly, this transaction constitutes a related-party transaction.

This proposal involves a related-party transaction, and the related-party supervisor Li Sheng recused himself from voting.

Voting results: 2 votes in favor, 0 votes against, and 0 abstentions.

This proposal still needs to be submitted to the Company’s Shareholders’ Meeting for consideration.

4. Deliberated and approved the “Proposal on the Draft Report on the Major Asset Acquisition and Related Party Transaction of Bingshan Cold & Heat Technology Co., Ltd. and Its Summary.”

In accordance with the Company Law of the People’s Republic of China, the Securities Law of the People’s Republic of China, the Measures for the Administration of Major Asset Restructuring of Listed Companies, and Standard No. 26 on the Content and Format of Information Disclosure by Companies Issuing Securities to the Public—Major Asset Restructuring of Listed Companies, as well as other relevant laws, regulations, and normative documents, the Company has prepared the “Draft Report on the Major Asset Purchase and Related Party Transaction of Bingshan Cold & Heat Technology Co., Ltd.” and its summary in connection with this major asset purchase and related party transaction.

This proposal involves a related-party transaction, and the related-party supervisor Li Sheng recused himself from voting.

Voting results: 2 votes in favor, 0 votes against, and 0 abstentions.

This proposal still needs to be submitted to the Company’s Shareholders’ Meeting for consideration.

5. Deliberated and approved the “Proposal on the Company’s Execution of the ‘Conditional Equity Transfer Agreement’”

To clearly define the rights and obligations of the Company, Sanyo Electric, Panasonic China, and Panasonic Cold Chain in connection with this transaction, the Company intends to enter into a Conditional Share Transfer Agreement with Sanyo Electric, Panasonic China, and Panasonic Cold Chain. The Conditional Share Transfer Agreement sets forth provisions regarding the target assets, the basis for pricing and the transaction price, the method of payment, the preconditions to the completion of this transaction, the delivery of the target assets, transitional arrangements, the handling of claims and liabilities and personnel matters, as well as liability for breach of contract, among other matters.

This proposal involves a related-party transaction, and the related-party supervisor Li Sheng recused himself from voting.

Voting results: 2 votes in favor, 0 votes against, and 0 abstentions.

This proposal still needs to be submitted to the Company’s Shareholders’ Meeting for consideration.

6. Deliberated and approved the “Proposal on Whether This Transaction Complies with the Relevant Provisions of Article 11 of the Measures for the Administration of Major Asset Restructuring of Listed Companies and Is Not Subject to the Provisions of Articles 43 and 44.”

Upon verification, the Company’s Supervisory Board is of the view that this transaction complies with the relevant provisions of Article 11 of the Measures for the Administration of Restructuring, and is not subject to the provisions of Articles 43 and 44 of the same Measures regarding the issuance of shares for asset acquisitions.

This proposal involves a related-party transaction, and the related-party supervisor Li Sheng recused himself from voting.

Voting results: 2 votes in favor, 0 votes against, and 0 abstentions.

This proposal still needs to be submitted to the Company’s Shareholders’ Meeting for consideration.

7. Deliberated and approved the “Proposal on Whether This Transaction Complies with Article 4 of the Provisions on Several Issues Concerning the Standardization of Major Asset Restructurings of Listed Companies.”

Upon verification, the Company’s Supervisory Board is of the view that this transaction complies with the relevant provisions of Article 4 of the Provisions on Several Issues Concerning the Standardization of Major Asset Restructurings of Listed Companies.

This proposal involves a related-party transaction, and the related-party supervisor Li Sheng recused himself from voting.

Voting results: 2 votes in favor, 0 votes against, and 0 abstentions.

This proposal still needs to be submitted to the Company’s Shareholders’ Meeting for consideration.

8. Deliberated and approved the “Proposal on the Fact that the Company’s Current Transaction Does Not Constitute a Reorganization Listed under Article 13 of the Measures for the Administration of Major Asset Restructuring of Listed Companies.”

Upon verification, the Company’s Supervisory Board has determined that, in accordance with the Provisions on the Administration of Major Asset Restructuring of Listed Companies, this transaction does not constitute a backdoor listing.

This proposal involves a related-party transaction, and the related-party supervisor Li Sheng recused himself from voting.

Voting results: 2 votes in favor, 0 votes against, and 0 abstentions.

This proposal still needs to be submitted to the Company’s Shareholders’ Meeting for consideration.

9. Deliberated and approved the “Proposal Regarding the Fact that the Parties Involved in This Transaction Do Not Fall Under Any of the Circumstances Prohibited from Participating in Major Asset Restructuring of Listed Companies pursuant to Article 13 of the Regulatory Guidance No. 7 for Listed Companies—Supervision of Abnormal Stock Trading Related to Major Asset Restructuring of Listed Companies.”

Upon verification, the Company’s Supervisory Board has determined that none of the relevant parties referred to in Article 13 of “Regulatory Guidance No. 7 for Listed Companies—Supervision of Abnormal Stock Trading Related to Major Asset Restructurings of Listed Companies” is currently under investigation or criminal inquiry for alleged insider trading in connection with this transaction, nor has any such party been subject to administrative penalties imposed by the China Securities Regulatory Commission or prosecuted for criminal liability by judicial authorities for insider trading related to a major asset restructuring within the past 36 months.

This proposal involves a related-party transaction, and the related-party supervisor Li Sheng recused himself from voting.

Voting results: 2 votes in favor, 0 votes against, and 0 abstentions.

This proposal still needs to be submitted to the Company’s Shareholders’ Meeting for consideration.

10. Deliberated and approved the “Explanation on the Fact that the Fluctuation in the Stock Price of the Listed Company Has Not Reached the Relevant Standards Set Forth in Article 13 of Shenzhen Stock Exchange Self-Regulatory Guidance No. 8 for Listed Companies—Major Asset Restructuring.”

Upon verification, the Company’s Supervisory Board concludes that, after excluding broad-market and industry-sector effects, the cumulative price change of the Company’s shares over the 20 trading days preceding the disclosure of the initial preliminary announcement on the restructuring did not exceed 20%, thereby failing to meet the relevant threshold set forth in Article 13 of “Shenzhen Stock Exchange Self-Regulatory Guidance No. 8 for Listed Companies—Major Asset Restructuring” and not constituting an abnormal market fluctuation.

This proposal involves a related-party transaction, and the related-party supervisor Li Sheng recused himself from voting.

Voting results: 2 votes in favor, 0 votes against, and 0 abstentions.

This proposal still needs to be submitted to the Company’s Shareholders’ Meeting for consideration.

11. Deliberated and approved the “Proposal on the Completeness and Compliance of the Statutory Procedures for the Company’s Current Transaction and the Validity of the Submitted Legal Documents.”

Upon verification, the Company’s Supervisory Board is of the opinion that the Company has, in accordance with the Company Law of the People’s Republic of China, the Securities Law of the People’s Republic of China, the Measures for the Administration of Major Asset Restructuring of Listed Companies, the Measures for the Administration of Information Disclosure by Listed Companies, and other relevant laws, regulations, normative documents, and the Articles of Association of the Company, duly performed all statutory procedures required at this stage in connection with the present transaction, and that such procedures are complete, lawful, and valid.

This proposal involves a related-party transaction, and the related-party supervisor Li Sheng recused himself from voting.

Voting results: 2 votes in favor, 0 votes against, and 0 abstentions.

This proposal still needs to be submitted to the Company’s Shareholders’ Meeting for consideration.

12. Deliberated and approved the “Proposal on the Independence of the Valuation Agency, the Reasonableness of the Valuation Assumptions, the Relevance of the Valuation Methods to the Valuation Objectives, and the Fairness of the Valuation Pricing.”

Upon verification, the Company’s Supervisory Board is of the view that the valuation firm engaged for this major asset restructuring possesses independence; the underlying valuation assumptions are reasonable; the valuation methodology selected is appropriate and relevant to the purpose of the valuation; the transaction price for the target assets in this transaction objectively reflects the market value of the equity interests; and the pricing of this transaction is fair and equitable, thereby safeguarding the interests of minority shareholders.

This proposal involves a related-party transaction, and the related-party supervisor Li Sheng recused himself from voting.

Voting results: 2 votes in favor, 0 votes against, and 0 abstentions.

This proposal still needs to be submitted to the Company’s Shareholders’ Meeting for consideration.

13. Deliberated and approved the “Proposal on the Dilution of the Company’s Immediate Returns from This Transaction and the Corresponding Measures to Replenish Such Returns.”

Upon verification, the Company’s Supervisory Board is of the view that, in accordance with the requirements of relevant laws, regulations, and normative documents—including the General Office of the State Council’s Opinions on Further Strengthening the Protection of the Legitimate Rights and Interests of Small and Medium-Sized Investors in the Capital Market (Guobanfa [2013] No. 110), the State Council’s Several Opinions on Further Promoting the Healthy Development of the Capital Market (Guofa [2014] No. 17), and the Guiding Opinions on Matters Relating to the Dilution of Immediate Returns from Initial Public Offerings, Subsequent Fund-Raising, and Major Asset Restructurings (CSRC Announcement [2015] No. 31)—the Company has conducted a thorough analysis of the dilution of immediate returns arising from this restructuring and has formulated specific measures to replenish such returns and enhance the Company’s capacity for sustained returns. The controlling shareholder, together with all directors and senior management personnel, has undertaken to ensure the effective implementation of the replenishment measures adopted by the Company.

This proposal involves a related-party transaction, and the related-party supervisor Li Sheng recused himself from voting.

Voting results: 2 votes in favor, 0 votes against, and 0 abstentions.

This proposal still needs to be submitted to the Company’s Shareholders’ Meeting for consideration.

14. Deliberated and approved the “Proposal on Approving the Audit Report, Pro Forma Review Report, and Valuation Report Related to This Transaction”

Upon verification, the Company’s Supervisory Board is of the view that the Audit Report and the Pro Forma Review Report issued by Shinewing Zhonghe Certified Public Accountants (Special General Partnership) with respect to the target company in this transaction, as well as the Asset Valuation Report issued by Liaoning Zhonghua Asset Appraisal Co., Ltd. with respect to the target assets in this transaction, objectively, truthfully, and accurately reflect the relevant circumstances of the target company and the target assets. The Supervisory Board therefore approves the use of the aforementioned documents for information disclosure in connection with this transaction and as part of the filing materials submitted to the regulatory authorities.

This proposal involves a related-party transaction, and the related-party supervisor Li Sheng recused himself from voting.

Voting results: 2 votes in favor, 0 votes against, and 0 abstentions.

This proposal still needs to be submitted to the Company’s Shareholders’ Meeting for consideration.

III. Supporting Documents for Review

1. The resolution of the Supervisory Board meeting, signed by all attending supervisors.

 

Supervisory Board of BingShan Cold & Heat Technology Co., Ltd.

September 27, 2022