Document No. 6 of the 2013 Annual General Meeting

Annual Report on the Performance of Duties by the Company’s Independent Directors for 2013

Dear Shareholders:
In 2013, as independent directors of Dalian Refrigeration Co., Ltd. (hereinafter referred to as the “Company”), we attended the Company’s board meetings and shareholder general meetings on schedule in accordance with the Company Law, the Corporate Governance Code for Listed Companies, the Guiding Opinions on Establishing an Independent Director System in Listed Companies, the Several Provisions on Strengthening the Protection of the Rights and Interests of Public Shareholders, and other relevant requirements. With a focus on safeguarding the legitimate rights and interests of all shareholders, particularly public shareholders, we conducted regular on-site visits and carried out thorough investigations and research into the Company’s operations, closely monitored its development trends, rigorously reviewed proposals on major matters, and exercised our voting rights and expressed our independent opinions with due diligence and prudence.
I. Attendance at the 2013 Board of Directors Meetings
Name: Should Participate This Year
Number of Board Meetings Attended in Person
(Next) Proxy Attendance
(Accompanying) Absence
(occasion)
Wang Huiquan 8 8 0 0
Xing Tiancai 8 8 0 0
Liu Caiping 8 8 0 0
II. Status of Independent Opinions Issued in 2013
1. On January 11, 2013, the Company granted prior approval for the candidates for directors of the Sixth Board of Directors and agreed to submit their nominations for consideration at the 21st Meeting of the Fifth Board of Directors.

2. On January 18, 2013, the following independent opinion was expressed regarding the matter of candidates for directors of the Company’s Sixth Board of Directors as deliberated at the 21st Meeting of the Fifth Board of Directors:
The candidates for director on the Company’s Sixth Board of Directors—Xiao Yongqin, Wang Jian, Liu Kai, Wang Zhiqiang, Rong Yan, Nagasawa Shuji, Wang Huiquan, Xing Tiancai, and Liu Caiping—meet the qualifications for office as prescribed by applicable laws, regulations, and the Company’s Articles of Association. The Board’s nomination procedures for these candidates are in full compliance with relevant national laws, regulations, and the Company’s Articles of Association, and the voting process adopted by the Board was lawful. We unanimously approve the nomination of Xiao Yongqin, Wang Jian, Liu Kai, Wang Zhiqiang, Rong Yan, Nagasawa Shuji, Wang Huiquan, Xing Tiancai, and Liu Caiping as candidates for director on the Company’s Sixth Board of Directors.
3. On February 5, 2013, the following independent opinion was issued with respect to the significant matters deliberated at the Company’s First Extraordinary General Meeting of Shareholders for 2013 and the First Session of the Sixth Board of Directors:
(1) Opinions on the Directors of the Sixth Board of Directors of the Company
The sixth-term members of the Company’s Board of Directors—Xiao Yongqin, Wang Jian, Liu Kai, Wang Zhiqiang, Rong Yan, Nagasawa Shuji, Wang Huiquan, Xing Tiancai, and Liu Caiping—meet the qualifications for office as prescribed by applicable laws, regulations, and the Company’s Articles of Association. The Board’s nomination of these individuals as director candidates was conducted in full compliance with relevant national laws, regulations, and the Company’s Articles of Association, and the voting procedures at both the Board meeting and the Shareholders’ Meeting were lawful. We unanimously approve the appointment of Xiao Yongqin, Wang Jian, Liu Kai, Wang Zhiqiang, Rong Yan, Nagasawa Shuji, Wang Huiquan, Xing Tiancai, and Liu Caiping as members of the Company’s sixth-term Board of Directors.
(2) Opinions on the Appointment of Senior Management Personnel
Upon review of the personal resumes and other relevant materials of the newly appointed General Manager Liu Kai, Deputy General Managers Wang Zhiqiang and Yang Bin, Chief Financial Officer Rong Yan, and Board Secretary Song Wenbao, we conclude that they meet the qualification requirements stipulated in applicable laws, regulations, and the Company’s Articles of Association, and that their appointments are lawful. Based on our inquiries, we have determined that the educational background, work experience, and physical condition of each of the aforementioned individuals are adequate to fulfill the duties and responsibilities of their respective positions. The nomination, appointment procedures, and voting results adopted by the Company’s Board of Directors are in full compliance with the relevant laws, regulations, and provisions of the Company’s Articles of Association. We unanimously approve the Board of Directors’ decision to appoint General Manager Liu Kai, Deputy General Managers Wang Zhiqiang and Yang Bin, Chief Financial Officer Rong Yan, and Board Secretary Song Wenbao.
4. On April 8, 2013, prior approval was granted for the Company’s proposed routine related-party transactions with affiliated entities, the appointment of the Company’s 2013 audit firm, and the capital increase in Dalian Bingshan Group Import-Export Co., Ltd., among other significant matters, and it was agreed to submit these items for consideration at the Third Meeting of the Sixth Session of the Board of Directors.
5. On April 18, 2013, the following independent opinion was expressed with respect to the significant matters deliberated at the Third Meeting of the Sixth Session of the Company’s Board of Directors and other significant matters of the Company:
(1) Opinion on the Company’s Cumulative External Guarantees, Current External Guarantees, and Compliance with Relevant Regulations
Upon review, the Company has not provided any guarantees for its controlling shareholder, other related parties in which the Company holds less than 50% of the equity, or any unincorporated entities or individuals; the total amount of the Company’s external guarantees is zero. Currently, the Company’s Articles of Association stipulate the approval procedures for external guarantees and the creditworthiness criteria for guaranteed parties.
In summary, we believe the company has adequately complied with the relevant regulations.
(2) Opinion on the Company’s Routine Related-Party Transactions for the Year 2012 and the Estimated Routine Related-Party Transactions for the Year 2013
The aforementioned routine related-party transactions of the Company are normal and necessary, comply with the relevant provisions of the Stock Listing Rules and the Company’s Articles of Association, adhere to the principles of openness, fairness, and impartiality, are consistent with the Company’s actual operations and development, involve reasonable transaction prices, and do not prejudice the interests of the Company or its non-affiliated shareholders.
(3) Opinion on the 2012 Compensation of Company Executives
The determination of the 2012 executive compensation was made after a comprehensive assessment of the Company’s performance in achieving its 2012 business plan, as well as its financial condition, operating results, and cash flows. We unanimously approve the Board of Directors’ report on the 2012 executive compensation.
(4) Opinions on the Company’s 2012 Internal Control Evaluation Report
We are of the view that the current state of the Company’s internal control system complies with applicable requirements and is consistent with the Company’s actual circumstances; that the internal controls established by the Company have been effectively implemented throughout its production and business operations; and that the Company’s 2012 Internal Control Evaluation Report accurately reflects the foregoing facts.
In summary, we concur with the Company’s 2012 Internal Control Evaluation Report.
(5) Opinions on the Company’s Cash Dividends
The 2012 profit distribution proposal submitted by the Company’s Board of Directors is in compliance with the relevant provisions of the Company’s Articles of Association and takes into account both the Company’s long-term development needs and the need to provide shareholders with a reasonable return. We unanimously approve this profit distribution proposal.
(6) Report on the Capital Increase for Dalian Bingshan Group Import-Export Co., Ltd.
This related-party transaction is fair and does not prejudice the interests of the Company or its minority shareholders. Moreover, it will strengthen the overall competitiveness of Dalian Bingshan Group Import & Export Co., Ltd., a significant equity-method affiliate of the Company, enhance its market share and profitability, and thereby increase the Company’s investment income. The voting procedure for this related-party transaction was lawful, and the affiliated directors duly recused themselves. We unanimously approve this capital increase.
(7) Regarding Write-Off of Bad Debts
The Company proposes to write off the 2013 bad debt, with sufficient supporting evidence and in accordance with lawful voting procedures; approval is hereby granted for the write-off.
6. On July 11, 2013, prior approval was granted for the Company’s proposed capital increase in Wuhan New World Refrigeration Industry Co., Ltd., and it was agreed to submit the matter for consideration at the Fourth Meeting of the Sixth Session of the Board of Directors.
7. On July 18, 2013, the following independent opinion was issued with respect to the significant matters deliberated at the fourth meeting of the sixth session of the Company’s Board of Directors:
(1) Opinion on Increasing Capital Investment in Wuhan New World Refrigeration Industry Co., Ltd.
This related-party transaction is fair and does not prejudice the interests of the Company or its minority shareholders. It will strengthen the overall competitiveness of Wuhan New World Refrigeration Industry Co., Ltd., a key subsidiary of the Company, enhance its market share and profitability, and thereby increase the Company’s investment returns. The voting procedures for this related-party transaction were lawful, and the related directors duly recused themselves. We unanimously approve this capital increase.
(2) Opinions on the Acquisition and Storage of Certain Land Use Rights Held by the Company
This land-use-right acquisition and storage is being carried out in accordance with Dalian City’s annual land-reserve plan. In compliance with relevant national regulations on land acquisition and storage, the Dalian Land Reserve Center selected two appraisal agencies from its roster of accredited firms to conduct separate valuations of the land itself and the value of the above-ground assets. On this basis, and taking into account the company’s actual operational and production needs—specifically the additional capital investments that will be required following the acquisition and storage of the warehouse land—we engaged in thorough consultations and ultimately agreed on a compensation amount of RMB 50 million for this land-use-right acquisition and storage. We unanimously approve this land-use-right acquisition and storage.
8. On August 20, 2013, an in-depth review was conducted on the Company’s external guarantees for the first half of 2013 and on the misappropriation of the Company’s funds by the controlling shareholder and other related parties, resulting in the issuance of the following special statement and independent opinion:
Upon review, during the reporting period the Company did not provide any guarantees for its controlling shareholder, other related parties in which the Company holds less than 50% of the equity, or any unincorporated entities or individuals; nor did the Company enter into any external guarantees. The Company’s Articles of Association currently stipulate the approval procedures for external guarantees and the creditworthiness criteria for guarantee recipients. Furthermore, upon review, no instances were found during the reporting period of the controlling shareholder or other related parties misappropriating the Company’s funds. In light of the foregoing, we are of the view that the Company has duly complied with the relevant regulations.
9. On December 3, 2013, prior approval was granted for the Company’s proposed appointment of a new auditing firm for the 2013 fiscal year, and it was agreed to submit the matter for consideration at the seventh meeting of the sixth session of the Board of Directors.
10. On December 12, 2013, the following independent opinion was issued with respect to the significant matter concerning the replacement of the Company’s Deputy General Manager as deliberated at the seventh meeting of the sixth session of the Board of Directors:
Upon review of the personal resume and other relevant materials of Mr. Li Wenjiang, the newly appointed Deputy General Manager, we are of the view that he meets the requirements for office set forth in applicable laws, regulations, and the Company’s Articles of Association, and that his qualifications for the position are lawful. To our knowledge, his educational background, work experience, and physical condition enable him to fulfill the duties and responsibilities of the position for which he has been appointed. Furthermore, the nomination, replacement procedures, and voting results adopted by the Company’s Board of Directors are in compliance with the relevant laws, regulations, and provisions of the Company’s Articles of Association. We unanimously approve the Board of Directors’ decision to appoint Mr. Li Wenjiang as Deputy General Manager.
III. Work of the Company’s Board Committees
1. Status of Work on the Company’s Board Audit Committee
As members of the Audit Committee established under the Company’s Board of Directors, we discharge our duties in accordance with the Company’s Implementing Rules for the Board Audit Committee and the Audit Committee Annual Report Work Procedures, overseeing the Company’s internal audit system and its implementation, reviewing the Company’s financial information and related disclosures, and evaluating the work of external auditing firms.
During the process of re-engaging the audit firm for the 2013 fiscal year, we maintained close oversight through the Audit Committee, conducted effective communications with both the incumbent and the proposed new accounting firm, and, based on a reasoned assessment of the professional quality of each firm, formulated a dedicated opinion recommending that the matter be submitted to the seventh meeting of the sixth session of the Board of Directors for consideration.
In the development and evaluation of the company’s internal control framework, the Audit Committee has actively exercised its organizational, leadership, and oversight responsibilities. We believe that the current state of the company’s internal control system is in compliance with relevant requirements and aligns with the company’s actual operations, and that it has been effectively implemented. The Company’s 2013 Internal Control Evaluation Report accurately reflects these facts.
During the Company’s 2013 audit, we maintained active communication and coordination with the auditing firm, Dahuа Certified Public Accountants, through the Audit Committee. Prior to the auditor’s on-site engagement, we discussed and reached consensus with the engagement partner on the audit plan, timeline, and other matters relevant to the audit period. Throughout the audit process, we kept abreast of progress and repeatedly urged the auditing firm to carry out the audit in a timely manner while ensuring both quality and quantity. Upon completion of the audit, we conducted a thorough review of the Company’s annual financial statements and annual report.
2. Status of Work on the Company’s Board of Directors’ Compensation and Assessment Committee
As members of the Compensation and Assessment Committee established under the Company’s Board of Directors, we have fulfilled our duties in accordance with the Company’s Implementing Rules for the Board of Directors’ Compensation and Assessment Committee, reviewing the annual compensation of the Company’s directors, supervisors, and senior management. The decision-making procedures and remuneration standards for the aforementioned individuals are in compliance with applicable laws and regulations as well as the Company’s internal policies.
Hereby submit this work report.

Independent Directors: Wang Huiquan, Xing Tiancai, Liu Caiping
May 20, 2014