山东省中鲁远洋渔业股份有限公司 2018 年半年度财务报告 SHANDONG ZHONGLU OCEANIC FISHERIES CO.,LTD 二○一八年八月二十八日 1 I. Audit reports Whether the semi-annual report was audited or not □ Yes √ No The financial report of this semi-annual report was unaudited II. Financial statements Units in Notes of Financial Statements is RMB 1. Consolidated balance sheet Prepared by: Shandong Zhonglu Oceanic Fisheries Co., Ltd 2018-06-30 In RMB Item Closing balance Opening balance Current assets: Monetary funds 151,753,165.99 147,489,843.54 Settlement provisions Capital lent Financial assets measured by fair value and with variation reckoned into current gains/losses Derivative financial liability Notes receivable Accounts receivable 44,730,567.95 38,792,912.89 Accounts paid in advance 13,370,603.36 18,573,111.58 Insurance receivable Reinsurance receivables Contract reserve of reinsurance receivable Interest receivable Dividend receivable Other receivables 1,691,389.44 11,305,713.11 Purchase restituted finance asset Inventories 303,811,883.27 243,744,590.07 Divided into assets held for sale Non-current asset due within one 2 year Other current assets 28,802,602.21 30,081,962.56 Total current assets 544,160,212.22 489,988,133.75 Non-current assets: Loans and payments on behalf Finance asset available for sales Held-to-maturity investment Long-term account receivable Long-term equity investment Investment property 31,079,447.01 31,694,375.13 Fixed assets 509,463,246.79 525,975,263.88 Construction in progress 15,213.68 Engineering material Disposal of fixed asset Productive biological asset Oil and gas asset Intangible assets 13,219,178.90 13,495,947.76 Expense on Research and Development Goodwill Long-term expenses to be 409,385.15 516,181.25 apportioned Deferred income tax asset 1,986,696.05 286,696.05 Other non-current asset 3,601,885.77 3,527,165.98 Total non-current asset 559,775,053.35 575,495,630.05 Total assets 1,103,935,265.57 1,065,483,763.80 Current liabilities: Short-term loans 63,607,615.40 176,394,931.62 Loan from central bank Absorbing deposit and interbank deposit Capital borrowed Financial liability measured by fair value and with variation reckoned into current gains/losses Derivative financial liability Notes payable 3 Accounts payable 92,718,294.72 65,204,257.98 Accounts received in advance 28,598,670.52 19,875,122.76 Selling financial asset of repurchase Commission charge and commission payable Wage payable 36,781,555.83 42,854,174.79 Taxes payable 2,570,366.58 3,378,698.19 Interest payable 190,417.41 360,208.32 Dividend payable Other accounts payable 7,713,318.18 6,175,352.76 Reinsurance payables Insurance contract reserve Security trading of agency Security sales of agency Liability held for sale Non-current liabilities due within 1 433,292.75 866,585.48 year Other current liabilities Total current liabilities 232,613,531.39 315,109,331.90 Non-current liabilities: Long-term loans Bonds payable Including: preferred stock Perpetual capital securities Long-term account payable Long-term wages payable 1,577,667.63 1,577,667.63 Special accounts payable Projected liabilities Deferred income 9,705,869.14 9,705,869.14 Deferred income tax liabilities Other non-current liabilities Total non-current liabilities 11,283,536.77 11,283,536.77 Total liabilities 243,897,068.16 326,392,868.67 Owner’s equity: Share capital 266,071,320.00 266,071,320.00 4 Other equity instrument Including: preferred stock Perpetual capital securities Capital public reserve 287,352,616.86 279,998,206.82 Less: Inventory shares Other comprehensive income -6,089,149.66 -6,075,014.12 Reasonable reserve Surplus public reserve 21,908,064.19 21,908,064.19 Provision of general risk Retained profit 164,469,116.27 141,867,217.06 Total owner’s equity attributable to 733,711,967.66 703,769,793.95 parent company Minority interests 126,326,229.75 35,321,101.18 Total owner’s equity 860,038,197.41 739,090,895.13 Total liabilities and owner’s equity 1,103,935,265.57 1,065,483,763.80 Legal Representative: Lu Lianxing Person in Charge of Accounting: Zhao Minkun Person in Charge of Accounting Department: Lei Lixin 2. Balance Sheet of Parent Company In RMB Item Closing balance Opening balance Current assets: Monetary funds 13,879,519.37 48,034,853.41 Financial assets measured by fair value and with variation reckoned into current gains/losses Derivative financial liability Notes receivable Accounts receivable 13,680,543.82 8,484,060.27 Account paid in advance 2,197,182.11 2,760,665.71 Interest receivable Dividends receivable 5 Other receivables 72,151,233.87 64,689,774.99 Inventories 59,227,080.92 49,373,616.72 Assets held for sale Non-current assets maturing within one year Other current assets 1,687,543.79 1,016,912.35 Total current assets 162,823,103.88 174,359,883.45 Non-current assets: Available-for-sale financial assets Held-to-maturity investments Long-term receivables 5,837,328.77 5,397,947.02 Long-term equity investments 232,189,455.23 204,189,455.23 Investment property 31,079,447.01 31,694,375.13 Fixed assets 71,223,598.62 76,550,539.61 Construction in progress Project materials Disposal of fixed assets Productive biological assets Oil and natural gas assets Intangible assets 454,539.09 525,800.21 Research and development costs Goodwill Long-term deferred expenses 409,385.15 516,181.25 Deferred income tax assets Other non-current assets 285,524.92 196,581.20 Total non-current assets 341,479,278.79 319,070,879.65 Total assets 504,302,382.67 493,430,763.10 Current liabilities: Short-term borrowings Financial liability measured by fair value and with variation reckoned into current gains/losses Derivative financial liability Notes payable Accounts payable 7,937,084.69 14,290,700.38 6 Accounts received in advance 15,268,393.44 3,883,689.36 Wage payable 22,464,476.38 22,130,930.92 Taxes payable 286,038.57 278,991.52 Interest payable Dividend payable Other accounts payable 70,324,768.37 67,530,200.11 Liability held for sale Non-current liabilities due within 1 year Other current liabilities Total current liabilities 116,280,761.45 108,114,512.29 Non-current liabilities: Long-term loans Bonds payable Including: preferred stock Perpetual capital securities Long-term account payable Long-term wages payable 1,127,604.68 1,127,604.68 Special accounts payable Projected liabilities Deferred income Deferred income tax liabilities Other non-current liabilities Total non-current liabilities 1,127,604.68 1,127,604.68 Total liabilities 117,408,366.13 109,242,116.97 Owners’ equity: Share capita 266,071,320.00 266,071,320.00 Other equity instrument Including: preferred stock Perpetual capital securities Capital public reserve 279,115,900.17 279,115,900.17 Less: Inventory shares Other comprehensive income 7 Reasonable reserve Surplus reserve 19,184,672.34 19,184,672.34 Retained profit -177,477,875.97 -180,183,246.38 Total owner’s equity 386,894,016.54 384,188,646.13 Total liabilities and owner’s equity 504,302,382.67 493,430,763.10 3. Consolidated Profit Statement In RMB Item Current Period Last Period I. Total operating income 440,322,776.97 440,178,091.75 Including: Operating income 440,322,776.97 440,178,091.75 Interest income Insurance gained Commission charge and commission income II. Total operating cost 417,258,997.84 406,876,087.35 Including: Operating cost 374,498,048.55 378,367,434.21 Interest expense Commission charge and commission expense Cash surrender value Net amount of expense of compensation Net amount of withdrawal of insurance contract reserve Bonus expense of guarantee slip Reinsurance expense Operating tax and extras 1,333,504.23 1,705,436.85 Sales expenses 14,843,224.40 4,081,303.48 Administration expenses 23,045,619.66 16,193,699.81 Financial expenses 3,689,988.56 6,517,713.00 Losses of devaluation of asset -151,387.56 10,500.00 Add: Changing income of fair value(Loss is listed with “-”) Investment income (Loss is listed 8 with “-”) Including: Investment income on affiliated company and joint venture Exchange income (Loss is listed with “-”) Income from assets disposal (Loss is -18,990.79 262,776.33 listed with “-”) Other income 433,292.74 III. Operating profit (Loss is listed with 23,478,081.08 33,564,780.73 “-”) Add: Non-operating income 0.00 648,201.59 Less: Non-operating expense 427,108.38 300,402.16 IV. Total Profit (Loss is listed with “-”) 23,050,972.70 33,912,580.16 Less: Income tax expense 1,922,681.98 453,724.36 V. Net profit (Net loss is listed with “-”) 21,128,290.72 33,458,855.80 (i) Net profit of continuing 21,128,290.72 33,458,855.80 operation(Net loss is listed with “-”) (ii) Net profit of discontinuing 0.00 operation (Net loss is listed with “-” Net profit attributable to owner’s of 22,601,899.21 32,001,590.86 parent company Minority shareholders’ gains and -1,473,608.49 1,457,264.94 losses VI. Net after-tax of other comprehensive -23,938.25 354,732.98 income Net after-tax of other comprehensive income attributable to owners of parent -14,135.54 354,732.98 company (I) Other comprehensive income items which will not be reclassified subsequently to profit of loss 1. Changes as a result of re-measurement of net defined benefit plan liability or asset 2. Share of the other comprehensive income of the investee accounted for using equity method which will not be reclassified subsequently to profit and loss 9 (II) Other comprehensive income items which will be reclassified -14,135.54 354,732.98 subsequently to profit or loss 1. Share of the other comprehensive income of the investee accounted for using equity method which will be reclassified subsequently to profit or loss 2. Gains or losses arising from changes in fair value of available-for-sale financial assets 3. Gains or losses arising from reclassification of held-to-maturity investment as available-for-sale financial assets 4. The effect hedging portion of gains or losses arising from cash flow hedging instruments 5. Translation differences arising on translation of foreign currency -14,135.54 354,732.98 financial statements 6. Other Net after-tax of other comprehensive income attributable to minority -9,802.71 shareholders VII. Total comprehensive income 21,104,352.47 33,813,588.78 Total comprehensive income 22,587,763.67 32,356,323.84 attributable to owners of parent Company Total comprehensive income -1,483,411.20 1,457,264.94 attributable to minority shareholders VIII. Earnings per share: (i) Basic earnings per share 0.08 0.12 (ii) Diluted earnings per share 0.08 0.12 Enterprise combine under the same control in the Period, the combined party realized net profit of 0 Yuan before combination, and realized 0 Yuan at last period for combined party Legal Representative: Lu Lianxing Person in Charge of Accounting: Zhao Minkun Person in Charge of Accounting Department: Lei Lixin 10 4. Profit Statement of Parent Company In RMB Item Current Period Last Period I. Operating income 79,888,714.36 59,539,271.88 Less: Operating cost 60,951,172.97 43,838,067.27 Operating tax and extras 342,224.63 452,021.58 Sales expenses 6,582,490.13 2,225,689.69 Administration expenses 10,276,464.69 8,254,821.34 Financial expenses -1,041,062.37 -262,508.81 Losses of devaluation of asset 2,053.90 10,500.00 Add: Changing income of fair value(Loss is listed with “-”) Investment income (Loss is listed with “-”) Including: Investment income on affiliated company and joint venture Income from assets disposal (Loss is listed with “-”) Other income II. Operating profit (Loss is listed 2,775,370.41 5,020,680.81 with “-”) Add: Non-operating income 0.00 266,306.33 Less: Non-operating expense 70,000.00 260,672.26 III. Total Profit (Loss is listed with 2,705,370.41 5,026,314.88 “-”) Less: Income tax expense IV. Net profit (Net loss is listed with 2,705,370.41 5,026,314.88 “-”) (i) Net profit of continuing 2,705,370.41 5,026,314.88 operation(Net loss is listed with “-”) (ii) Net profit of discontinuing operation (Net loss is listed with “-” V. Net after-tax of other comprehensive income (I) Other comprehensive income items which will not be reclassified subsequently to profit of loss 11 1. Changes as a result of re-measurement of net defined benefit plan liability or asset 2. Share of the other comprehensive income of the investee accounted for using equity method which will not be reclassified subsequently to profit and loss (II) Other comprehensive income items which will be reclassified subsequently to profit or loss 1. Share of the other comprehensive income of the investee accounted for using equity method which will be reclassified subsequently to profit or loss 2. Gains or losses arising from changes in fair value of available-for-sale financial assets 3. Gains or losses arising from reclassification of held-to-maturity investment as available-for-sale financial assets 4. The effect hedging portion of gains or losses arising from cash flow hedging instruments 5. Translation differences arising on translation of foreign currency financial statements 6. Other VI. Total comprehensive income 2,705,370.41 5,026,314.88 VII. Earnings per share: (i) Basic earnings per share (ii) Diluted earnings per share 5. Consolidated Cash Flow Statement In RMB Item Current Period Last Period I. Cash flows arising from operating activities: 12 Cash received from selling commodities and providing labor 394,303,101.04 405,702,926.35 services Net increase of customer deposit and interbank deposit Net increase of loan from central bank Net increase of capital borrowed from other financial institution Cash received from original insurance contract fee Net cash received from reinsurance business Net increase of insured savings and investment Net increase of amount from disposal financial assets that measured by fair value and with variation reckoned into current gains/losses Cash received from interest, commission charge and commission Net increase of capital borrowed Net increase of returned business capital Write-back of tax received 29,094,665.73 34,892,340.04 Other cash received concerning 87,228,597.67 43,104,120.67 operating activities Subtotal of cash inflow arising from 510,626,364.44 483,699,387.06 operating activities Cash paid for purchasing commodities and receiving labor 292,810,614.62 350,844,053.24 service Net increase of customer loans and advances Net increase of deposits in central bank and interbank Cash paid for original insurance contract compensation Cash paid for interest, commission 13 charge and commission Cash paid for bonus of guarantee slip Cash paid to/for staff and workers 59,531,961.28 56,040,388.83 Taxes paid 9,030,860.47 4,539,217.08 Other cash paid concerning 127,438,315.76 54,399,571.37 operating activities Subtotal of cash outflow arising from 488,811,752.13 465,823,230.52 operating activities Net cash flows arising from operating 21,814,612.31 17,876,156.54 activities II. Cash flows arising from investing activities: Cash received from recovering investment Cash received from investment income Net cash received from disposal of fixed, intangible and other long-term 15,477.00 312,482.88 assets Net cash received from disposal of subsidiaries and other units Other cash received concerning investing activities Subtotal of cash inflow from investing 15,477.00 312,482.88 activities Cash paid for purchasing fixed, 2,816,140.63 153,930,421.99 intangible and other long-term assets Cash paid for investment Net increase of mortgaged loans Net cash received from subsidiaries and other units obtained Other cash paid concerning investing activities Subtotal of cash outflow from investing 2,816,140.63 153,930,421.99 activities Net cash flows arising from investing -2,800,663.63 -153,617,939.11 activities 14 III. Cash flows arising from financing activities Cash received from absorbing 100,000,000.00 investment Including: Cash received from absorbing minority shareholders’ 100,000,000.00 investment by subsidiaries Cash received from loans 44,481,427.05 157,501,563.84 Cash received from issuing bonds Other cash received concerning financing activities Subtotal of cash inflow from financing 144,481,427.05 157,501,563.84 activities Cash paid for settling debts 157,275,541.94 44,521,400.44 Cash paid for dividend and profit 3,139,235.51 2,542,753.91 distributing or interest paying Including: Dividend and profit of minority shareholder paid by subsidiaries Other cash paid concerning financing activities Subtotal of cash outflow from financing 160,414,777.45 47,064,154.35 activities Net cash flows arising from financing -15,933,350.40 110,437,409.49 activities IV. Influence on cash and cash equivalents due to fluctuation in 426,229.11 -1,332,336.74 exchange rate V. Net increase of cash and cash 3,506,827.39 -26,636,709.82 equivalents Add: Balance of cash and cash 147,067,351.82 128,737,661.78 equivalents at the period -begin VI. Balance of cash and cash 150,574,179.21 102,100,951.96 equivalents at the period -end 6. Cash Flow Statement of Parent Company In RMB Item Current Period Last Period 15 I. Cash flows arising from operating activities: Cash received from selling commodities and providing labor 37,086,232.35 16,987,592.08 services Write-back of tax received Other cash received concerning 13,622,760.58 25,919,003.74 operating activities Subtotal of cash inflow arising from 50,708,992.93 42,906,595.82 operating activities Cash paid for purchasing commodities and receiving labor 26,382,364.57 15,123,541.05 service Cash paid to/for staff and workers 15,488,408.20 14,657,227.96 Taxes paid 1,324,993.47 315,684.06 Other cash paid concerning 12,830,808.80 44,713,882.83 operating activities Subtotal of cash outflow arising from 56,026,575.04 74,810,335.90 operating activities Net cash flows arising from operating -5,317,582.11 -31,903,740.08 activities II. Cash flows arising from investing activities: Cash received from recovering investment Cash received from investment income Net cash received from disposal of fixed, intangible and other long-term 0.00 287,282.88 assets Net cash received from disposal of subsidiaries and other units Other cash received concerning investing activities Subtotal of cash inflow from investing 0.00 287,282.88 activities Cash paid for purchasing fixed, 839,043.14 543,090.00 intangible and other long-term assets 16 Cash paid for investment 28,000,000.00 0.00 Net cash received from subsidiaries and other units Other cash paid concerning investing activities Subtotal of cash outflow from investing 28,839,043.14 543,090.00 activities Net cash flows arising from investing -28,839,043.14 -255,807.12 activities III. Cash flows arising from financing activities Cash received from absorbing investment Cash received from loans Cash received from issuing bonds Other cash received concerning financing activities Subtotal of cash inflow from financing activities Cash paid for settling debts Cash paid for dividend and profit distributing or interest paying Other cash paid concerning financing activities Subtotal of cash outflow from financing activities Net cash flows arising from financing activities IV. Influence on cash and cash equivalents due to fluctuation in 1,291.21 -22,076.10 exchange rate V. Net increase of cash and cash -34,155,334.04 -32,181,623.30 equivalents Add: Balance of cash and cash 48,034,853.41 43,007,956.89 equivalents at the period -begin VI. Balance of cash and cash 13,879,519.37 10,826,333.59 equivalents at the period -end 17 7. Statement of Changes in Owners’ Equity (Consolidated) Current period In RMB Current period Owners’ equity attributable to parent company Other equity instrument Item Less: Other Provisio Minorit Total Perpet Reason Capital Invento compre Surplus n of Retaine y owners’ Share Prefer ual able capita reserve ry hensive reserve general d profit interests equity red Other reserve l shares income risk stock securi ties 266,07 I. Balance at the 279,998 -6,075,0 21,908, 141,867 35,321, 739,090 1,320. end of the last year ,206.82 14.12 064.19 ,217.06 101.18 ,895.13 00 Add: Changes of accounting policy Error correction of the last period Enterprise combine under the same control Other II. Balance at the 266,07 279,998 -6,075,0 21,908, 141,867 35,321, 739,090 beginning of this 1,320. ,206.82 14.12 064.19 ,217.06 101.18 ,895.13 year 00 III. Increase/ Decrease in this 7,354,4 -14,135. 22,601, 91,005, 120,947 year (Decrease is 10.04 54 899.21 128.57 ,302.28 listed with “-”) (i) Total -14,135. 22,601, -1,473,6 21,114, comprehensive 54 899.21 08.49 155.18 income (ii) Owners’ 7,354,4 92,478, 99,833, devoted and 10.04 737.06 147.10 decreased capital 1.Common shares 7,354,4 92,478, 99,833, invested by 10.04 737.06 147.10 shareholders 2. Capital invested by holders of other equity instruments 18 3. Amount reckoned into owners equity with share-based payment 4. Other (III) Profit distribution 1. Withdrawal of surplus reserves 2. Withdrawal of general risk provisions 3. Distribution for owners (or shareholders) 4. Other (IV) Carrying forward internal owners’ equity 1. Capital reserves conversed to capital (share capital) 2. Surplus reserves conversed to capital (share capital) 3. Remedying loss with surplus reserve 4. Other (V) Reasonable reserve 1. Withdrawal in the report period 2. Usage in the report period (VI)Others IV. Balance at the 266,07 287,352 -6,089,1 21,908, 164,469 126,326 860,038 end of the report 1,320. ,616.86 49.66 064.19 ,116.27 ,229.75 ,197.41 period 00 Last Year In RMB Last period Item Owners’ equity attributable to the parent Company Minorit Total 19 Other y owners’ equity instrument interest equity Less: Other Provisio s Perpet Reason Share Capital Invento compre Surplus n of Retaine ual able capital Prefer capita reserve ry hensive reserve general d profit red Other reserve l shares income risk stock securi ties 266,07 I. Balance at the 279,998 -665,05 21,908, 50,349, 33,097, 650,759 1,320. end of the last year ,206.82 9.07 064.19 731.78 484.30 ,748.02 00 Add: Changes of accounting policy Error correction of the last period Enterprise combine under the same control Other II. Balance at the 266,07 279,998 -665,05 21,908, 50,349, 33,097, 650,759 beginning of this 1,320. ,206.82 9.07 064.19 731.78 484.30 ,748.02 year 00 III. Increase/ Decrease in this 354,732 32,001, 1,457,2 33,813, year (Decrease is .98 590.86 64.94 588.78 listed with “-”) (i) Total 354,732 32,001, 1,457,2 33,813, comprehensive .98 590.86 64.94 588.78 income (ii) Owners’ devoted and decreased capital 1.Common shares invested by shareholders 2. Capital invested by holders of other equity instruments 3. Amount reckoned into owners equity with share-based payment 4 Other (III) Profit distribution 20 1. Withdrawal of surplus reserves 2. Withdrawal of general risk provisions 3. Distribution for owners (or shareholders) 4. Other (IV) Carrying forward internal owners’ equity 1. Capital reserves conversed to capital (share capital) 2. Surplus reserves conversed to capital (share capital) 3. Remedying loss with surplus reserve 4. Other (V) Reasonable reserve 1. Withdrawal in the report period 2. Usage in the report period (VI)Others IV. Balance at the 266,07 279,998 -310,32 21,908, 82,351, 34,554, 684,573 end of the report 1,320. ,206.82 6.09 064.19 322.64 749.24 ,336.80 period 00 8. Statement of Changes in Owners’ Equity (Parent Company) Current period In RMB Current period Other equity instrument Other Total Item Share Less: Retaine Perpetu Capital comprehe Reasonab Surplus Inventory owners’ capital Preferre al reserve nsive le reserve reserve d profit Other shares equity d stock capital income securiti 21 es -180,18 I. Balance at the 266,071, 279,115,9 19,184,67 384,188,6 3,246.3 end of the last year 320.00 00.17 2.34 46.13 8 Add: Changes of accounting policy Error correction of the last period Other II. Balance at the 266,071, -180,18 279,115,9 19,184,67 384,188,6 beginning of this 3,246.3 320.00 00.17 2.34 46.13 year 8 III. Increase/ Decrease in this 2,705,3 2,705,370 year (Decrease is 70.41 .41 listed with “-”) (i) Total 2,705,3 2,705,370 comprehensive 70.41 .41 income (ii) Owners’ devoted and decreased capital 1.Common shares invested by shareholders 2. Capital invested by holders of other equity instruments 3. Amount reckoned into owners equity with share-based payment 4. Other (III) Profit distribution 1. Withdrawal of surplus reserves 2. Distribution for owners (or shareholders) 3. Other (IV) Carrying forward internal owners’ equity 22 1. Capital reserves conversed to capital (share capital) 2. Surplus reserves conversed to capital (share capital) 3. Remedying loss with surplus reserve 4. Other (V) Reasonable reserve 1. Withdrawal in the report period 2. Usage in the report period (VI)Others IV. Balance at the 266,071, -177,47 279,115,9 19,184,67 386,894,0 end of the report 7,875.9 320.00 00.17 2.34 16.54 period 7 Last Year In RMB Last period Other equity instrument Other Total Item Perpetu Less: Share Capital comprehe Reasonab Surplus Retaine al Inventory owners’ capital Preferre reserve nsive le reserve reserve d profit capital Other shares equity d stock income securiti es -209,86 I. Balance at the 266,071, 279,115,9 19,184,67 354,503,6 8,217.7 end of the last year 320.00 00.17 2.34 74.81 0 Add: Changes of accounting policy Error correction of the last period Other II. Balance at the 266,071, 279,115,9 19,184,67 -209,86 354,503,6 beginning of this 320.00 00.17 2.34 8,217.7 74.81 year 23 0 III. Increase/ Decrease in this 5,026,3 5,026,314 year (Decrease is 14.88 .88 listed with “-”) (i) Total 5,026,3 5,026,314 comprehensive 14.88 .88 income (ii) Owners’ devoted and decreased capital 1.Common shares invested by shareholders 2. Capital invested by holders of other equity instruments 3. Amount reckoned into owners equity with share-based payment 4. Other (III) Profit distribution 1. Withdrawal of surplus reserves 2. Distribution for owners (or shareholders) 3. Other (IV) Carrying forward internal owners’ equity 1. Capital reserves conversed to capital (share capital) 2. Surplus reserves conversed to capital (share capital) 3. Remedying loss with surplus reserve 4. Other (V) Reasonable reserve 1. Withdrawal in 24 the report period 2. Usage in the report period (VI)Others IV. Balance at the 266,071, -204,84 279,115,9 19,184,67 359,529,9 end of the report 1,902.8 320.00 00.17 2.34 89.69 period 2 III. Company profile (I) Enterprise registration place, Organization form and Headquarters address Shandong Zhonglu Oceanic Fisheries Co., Ltd. (the “Company”), registration address: No. 29 Miaoling Road, Laoshan District, Qingdao Shangdong, headquarter locates at No. 65 Haier Road, Qingdao Shangdong, was incorporated as a joint stock limited company in the People’s Republic of China on 30 July 1999 according to the documentation of Lu Ti Gai Zi [1999] No.85 issued by Shandong Development and Reform Commission, and the holding company of the Company is Shandong Fisheries Enterprise Group General Corporation, the main sponsor. On 26 June 2000, being approved by the documentation of Zheng Jian Fa Xing Zi [2000] No.82 issued by the China Securities Regulatory Commission, the Company’s B-share, stock ID ”Zhonglu B”, stock code” 200992” are listing for trading on Shenzhen Stock Exchange dated 24 July 2000. Basic organization structure of the Company: Party Committee, board of shareholders, board of directors, supervisory committee, office, office of the board, departments of human resources, financing plan department, enterprise development department, auditing section and discipline inspection & supervision department (II) Business nature and main business activities of Enterprise Corporate industry: sea-going fisheries Corporate major products: tuna and its products Operating scope: general management projects: sales and processing of aquatic products; merchandise import and export business within approved scope; ice machine manufacture and sale; refrigeration equipment manufacturing, installation, maintenance; refrigeration; load and unload services; housing lease. Pre-licensing projects: offshore fishing and distant fishing. (III) Person approves the financial report for disclosed and date for report The financial report has been approved for report by the Board dated 28 August 2018. (IV) Scope and changes of consolidated statements during the reporting period Ended as 30 June 2018, consolidation scope of the Company is as: 25 four subsidiaries, that is Shandong Zhonglu Fishery Shipping Co., Ltd., Shandong Zhonglu Oceanic (Yantai) Foods Co., Ltd., HABITAT INTERNATIONAL CORPORATION and Shandong Zhonglu Haiyan Deep-sea Fishery Co., Ltd; four sub-subsidiary: AFRICA STAR FISHERIES LIMITED, LAIFFISHERIES COMPANY LIMITED, ZHONG GHA FOODS COMPANY LIMITED and Shandong Zhonglu Ocean Refrigerated Co., Ltd.; and one operation entity with controlling rights obtained through operating lease: YAW ADDO FISHERIES COMPANY LIMITED. Found more in Note VIII. Change of Consolidation Rage and Note IX. Equity in Other entity IV. Preparation basis of Financial Statements 1. Preparation basis Base on the running continuously and actual transactions and events, in line with the Accounting Standards for Business Enterprise – Basic Standards and specific principle of accounting standards issued by the Ministry of Finance, the Company prepared and formulate the financial statement lies on the followed important accounting policy and estimation. 2. Going concern The Company have the ability to continue as a going concern within 12 months at least since end of the reporting period, there are no major events that impact the ability to continue as a going concern V. Important accounting policy and estimation Notes on specific accounting policies and accounting estimation: The Company and subsidiaries determine specific accounting policies and accounting estimation based on their production and operation, which mainly differ in accrual method for bad debt provision of the account receivable, evaluation of inventory, depreciation of fixed assets and intangible assets amortization and recognization time of the revenue etc. 1. Declaration of obedience to Accounting Standards for Business Enterprise The Financial Statements of the Company are up to requirements of Accounting Standards for Business Enterprise and also a true and thorough reflection to the relevant information as the Company’s financial position dated 30th June 2018 and the operation results as well as cash flow from January to June in 2018. 26 2. Accounting period The Company’s accounting year is Gregorian calendar year, namely from 1st January to 31st December of every year. 3. Business cycle The Company’s business cycle is one year (12 months) as a normal cycle, and the business cycle is the determining criterion for the liquidity of assets and liabilities of the Company. 4. Bookkeeping standard currency The Renminbi (RMB) is taken as the book-keeping standard currency 5. Accounting methods for consolidation of enterprises under the same control or otherwise (1) Consolidation of enterprises under the same control Where the Company for long term equity investment arising from business combination under common control satisfies the combination consideration by payment of cash, transfer of non-cash assets or assumption of debt, the carrying value of the net assets of the acquire in combined financial statement of the ultimate controller shared by the Company as at the combination date shall be deemed as the initial investment cost of such long term equity investment. If the equity instrument issued by combining party are consider as the combination consideration, than the total value of the issuing shares are consider as the share capital. The difference between the initial cost of long-term equity investment and book value of consideration (or total face value of the shares issued) paid, capital surplus adjusted; if the capital surplus not enough to written down, than retained earning adjusted. (2) Business combination not under common control As for business combination not under common control, combination costs refer to the sum of the fair value of the assets paid, liabilities occurred or assumed as well as equity securities issued by the acquirer to obtain control over the acquire as at the acquisition date. As for acquiree that obtained by consolidation not under the same control, the qualified confirmation of identified assets, liability and contingency liabilities should calculated by fair value on day of purchased. If the consolidation cost larger than the fair value amount of indentified net assts from acquiree’s, the differences should be recognized as goodwill. If the consolidation cost less than the fair value amount of indentified net assts from acquiree’s, the differences should reckoned into current gains/losses after re-examination. 6. Preparation methods for consolidated financial statements (1) Consolidation financial statement range 27 The Company includes all the subsidiaries (including the separate entities controlled by the Company) into consolidated financial statement, including companies controlled by the Company, non-integral part of the investees and structural main body. (2) Centralize accounting policies, balance sheet dates and accounting periods of parent and subsidiaries. As for the inconsistency between the subsidiaries and the Company in the accounting policies and periods, the necessary adjustment is made on the subsidiaries’ financial statements in the preparation of the consolidated financial statements according to the Company’s accounting policies and periods. (3) Setoff of consolidated financial statement The consolidated financial statements shall be prepared on the basis of the balance sheet of the parent company and subsidiaries, which offset the internal transactions incurred between the parent company and subsidiaries and within subsidiaries. The owner’s equity of the subsidiaries not attributable to the parent company shall be presented as minority equity under the owner’s equity item in the consolidated balance sheet. The long term equity investment of the parent company held by the subsidiaries, deemed as treasury stock of the corporate group as well as the reduction of owners’ equity, shall be presented as “Less: treasury stock” under the owners’ equity item in the consolidated balance sheet. (4) Accounting for acquisition of subsidiary through combination For subsidiaries acquired under enterprise merger involving enterprises under common control, the assets, liabilities, operating results and cash flows of the subsidiaries are included in the consolidated financial statements from the beginning of the financial year in which the combination took place. When preparing the consolidated financial statements, for the subsidiaries acquired from business combination not involving entities under common control, the identifiable net assets of the subsidiaries are adjusted on the basis of their fair values on the date of acquisition. 7. Classification of joint arrangements and accounting treatment of joint operation (1) Classification of joint arrangements Joint arrangements are divided into joint operations and joint ventures. Joint arrangements achieved not through separate entities are classified as joint operations. Separate entities refer to the entities with separate identifiable financial architecture including separate legal entities and legally recognized entities without the qualification of legal entity. Joint arrangements achieved through separate entities are generally classified as joint ventures. In case of changes in rights entitled to and obligations undertaken by the parties of joint venture under a joint arrangement due to the changes in relevant facts and circumstances, the parties of joint venture will re-assess the classification of joint arrangements. (2) Accounting treatment for joint operations The parties of joint operation should recognize the following items in relation to their share of interest in joint operation, and proceed with accounting in accordance with the relevant provisions under the Accounting Standards for Business Enterprises: to recognize their separate assets or liabilities held, and recognize the assets or liabilities jointly held according to their respective shares; to recognize the income from the disposal of their output share under joint operation; to 28 recognize the income from the disposal of output under joint operation according to their respective shares; to recognize the expenses incurred separately, and recognize the expenses incurred under joint operation according to their respective shares. For the parties of a joint operation not under common control, if they are entitled to relevant assets and undertake relevant liabilities of the joint operation, accounting will be carried out with reference to the provisions of the parties of joint operation; otherwise, it should be subject to relevant Accounting Standards for Business Enterprises. (3) Accounting treatment for joint ventures The parties of a joint venture should perform accounting for investments by the joint venture in accordance with the Accounting Standards for Business Enterprises No. 2 – Long-term Equity Investments. The parties not under common control should carry out accounting depending on their influence on the joint venture. 8. Determination criteria of cash and cash equivalent The cash recognized in the preparation of the cash flow statements, is the Company’s storage cash and deposits available for payment anytime. The cash equivalents recognized in the preparation of the cash flow statements refers to the investment held by the Company with characteristic of short-term, strong mobility, easy transfer to known sum cash and has slim risk from value changes. 9. Foreign currency exchange and the conversion of foreign currency statements (1) Foreign currency exchange The foreign currency exchange is booked on the current exchange rate on the transaction day and converted in the bookkeeping standard currency. On the balance sheet day, the monetary items are converted on the current rate on the balance sheet day, concerning the exchange differences between teh spot exchange rate on that date and initial confirmation or the sport exchange rate on previously balance sheet date, should reckoned in to current gains/losses except the capitalizing on exchange differences for foreign specific loans, which was reckoned into cost for capitalizing. The non-monetary items measured on the historic cost are still measured by the original bookkeeping rate with the sum of the bookkeeping standard currency unchanged. Items of non-monetary foreign currency which was calculated by fair value, should converted by spot exchange rate on the confirmation day of fair value, difference between the converted amount of bookkeeping currency and original amount of bookkeeping currency, was treated as changes of fair value (including exchange rate changed) reckoned into current gains/losses or recognized as other consolidated income. (2) Conversion of foreign currency financial statements Upon the conversion of the foreign currency financial statements of the controlling subsidiaries, joint enterprises, and the affiliated enterprises on the bookkeeping standard currency different from the Company’s, the accounting check and preparation of the consolidated financial 29 statements are made. Assets and liabilities items in the balance sheet, are converted on the current rate on the balance sheet day; owners’ equity items besides the “retained profit” item, the other items are converted on the actual rate. Incomes and expenses items in the profit statement are converted on the current rate. The conversion difference of the foreign currency financial statements is listed specifically in the owners’ equity in the balance sheet. The foreign currency cash flow is converted on the current rate on the cash flow actual day. The cash influenced by the rate fluctuation is listed specifically in the cash flow statement. As for the foreign operation, the conversion difference of the foreign currency statement related to the foreign operation is transferred in proportion into the disposal of the current loss/gain. 10. Financial instruments (1) Categories and recognition of financial instruments The financial instruments are classified as the financial assets or liabilities and equity instruments. As the Company becomes one party of the financial instrument contract, the instrument is recognized as one financial asset or liability or equity instruments. In the initial recognition, the financial assets are classified as, the financial assets measured on fair value and with its changes reckoned into the current loss/gain, long-term invest-bonds, account receivables, and financial assets available for sale. Categories of the financial assets besides account receivables are dependent on the holding intention and purpose of the Company and its subsidiaries for the financial assets. In the initial recognition, the financial liabilities are classified as the financial liabilities measured on the fair value and with its changes reckoned into the current loss/gain, other financial liabilities. Financial assets measure by fair value and of which the changes are included in the current profits and losses include the trading financial assets with holding purpose of selling in the short run and the financial assets designated to be measure by fair value in the initial recognition and of which the changes are included in the current profits and losses; receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market; available-for-sale financial assets are non-derivative financial assets that are either designated in this category or not classified in any of the other categories at initial recognition; held-to-maturity investments are non-derivative financial assets with fixed maturity and fixed or determinable payments that management has the positive intention and ability to hold to maturity. (2) Measurement of financial instruments In the initial recognition, the financial instruments are measured on fair value; and the follow-up measurements are: financial assets and financial assets available for sale that measured by fair value and with alteration reckoned into current gains/losses together with the financial liabilities that measured by fair value with alteration reckoned into current gains/losses should measured by fair value; the held-to-maturity securities, loans, account receivable and other financial liability are measured by amortized cost; as for the equity instrument investment without quote in an active market and with its fair value cannot be reliably measured, and those derivative financial assets or 30 liability that paid with equity instrument, which have hook with such instrument, should measured by cost. The loss/gain from the fair value changes in the follow-up measurement of the financial assets and liabilities, besides one related to the hedge, is dealt with in the following methods: ① The financial assets or liabilities measured on the fair value and with its changes reckoned into the current loss/gain, are reckoned into the fair value loss/gain; ② The fair value change of the financial assets available for sale, is reckoned into the other comprehensive income. (3) Recognition of the fair value for the financial assets and liabilities For those financial instruments existing in active markets, market quotation in the active market is used to confirm their fair values; fair value of the financial instruments which have no active market is confirmed by adoption of estimation technology. The estimation technology mainly including market approach, income approach and cost method (4) Recognition basis and measurement method for the transfer of financial assets/liabilities As for the financial assets with all risks and compensations on their patent transferred, or all risks and compensations neither maintained nor transferred but the control over the assets given up, the recognition of the financial asset may terminate. For the financial assets are qualified for the recognition of termination conditions, the measurement may be taken on the financial assets transfer, namely the difference is reckoned into the current loss/gain, between the book value of the transferred financial assets and, the total of the consideration value received from the transfer and the fair value change accumulative sum originally booked into the capital reserve. If the partial transfer satisfies the criteria for derecognition, the entire carrying value of the transferred financial asset shall proportionally allocated between the derecognized portion and the retained portion according to their respective relative fair value. When all or part of the current obligation to a financial liability has been terminated, the entire or part of such financial liability shall be derecognized. (5) Impairment loss on financial assets When an impairment loss on a financial asset carried at amortized cost has occurred, the amount of loss is provided for at the difference between the asset’s carrying amount and the present value of its estimated future cash flows (excluding future credit losses that have not been incurred). If there is objective evidence that the value of the financial asset recovered and the recovery is related objectively to an event occurring after the impairment was recognized, the previously recognized impairment loss is reversed and the amount of reversal is recognized in profit or loss. When an impairment loss on a financial asset measured at cost has occurred, the amount of loss is provided for at the difference between the asset’s carrying amount and the present value of its estimated future cash flows. The impairment loss on such financial asset is not reversed once it is recognized. Where there is objective evidence that an impairment loss on available-for-sale financial assets occurs, the cumulative loss arising from the decline in fair value that had been recognized directly in equity is removed from equity and recognized in impairment loss. For en investment in debt instrument classified as available-for-sale on which impairment losses have been recognized, if, in a subsequent period, its fair value increases and the increase can be objectively related to an even occurring after the impairment loss was recognized in profit or loss, the previously recognized impairment loss is reversed and recognized in profit or loss for the current period. For an 31 investment in an equity instrument classified as available-for-sale on which impairment losses have been recognized, the increase in its fair value in a subsequent period is recognized in equity directly. For investments in equity instruments, the specific quantitative criteria for the Company to determine “serious” or “not temporary” decrease in their fair value, cost computing method, method for determining closing fair value, and basis for determining the continuous decrease period are set out below: Specific quantitative criterion on “serious” decrease Decrease in closing fair value relative to the cost has reached in their fair value or exceeded 50% Specific quantitative criterion on “not temporary” Fall for 12 consecutive months decrease in their fair value Consideration of payment at acquisition (net of cash dividends declared but not yet paid or due but unpaid interest Cost computing method on bonds) and the relevant transaction cost are recognized as the investment cost. As for a financial instrument for which there is an active market, the quoted prices in the active market shall be used to recognize the fair values thereof. Where there is no active Method for determining closing fair value market for a financial instrument, the enterprise concerned shall adopt value appraisal techniques to determine its fair value. The rebound in the continuous fall or the period with the Basis for determining the tread of fall is less than 20% margin. Rebound duration not continuous decrease period more than six months is treated as continuous decrease period. 11. Account receivable (1) Account receivables with single major amount and withdrawal bad debt provision independently Book balance of the account receivable with over one million Criterion or amount standards of major single amount Yuan (one million yean inclusive) Withdrawal method for individual bad debt provision accrual Recognized on the difference between the book value and the with major single amount concerned current value of the estimative future cash flow (2) Account receivable with bad debt provision accrual by portfolio Portfolio Accrued method for bad Age portfolio Aging of accounts Withdrawing bad bed provision by aging method in portfolio: √ Applicable □ Not applicable 32 Accrued proportion of other accounts Account ages Accrued proportion of accounts receivable receivable Within six months 5.00% 5.00% 6 months – 1 year (including 1 year) 10.00% 10.00% 1-2 years 30.00% 30.00% 2-3 years 50.00% 50.00% Over three years 100.00% 100.00% Withdrawing bad bed provision by percentage of total accounts receivable outstanding in portfolio: □ Applicable √ Not applicable Withdrawing bad bed provision by other methods in portfolio : □ Applicable √ Not applicable (3) Account receivable with minor single amount but has individual bad debt provision accrual Account receivable with over three years in account age and has Reasons for individual bad debt prevision accrual objective evidence of impairment appears Recognized on the difference between the book value and the Accrued method for bad debt provision current value of the estimative future cash flow 12. Inventory Whether the company needs to comply with the disclosure requirements of the particular industry No (1)Classification of inventory Inventory means finished goods and merchandise that are ready for sale, work-in-progress, or material used in the process of production or provision of service in the ordinary course of business. Inventory includes raw materials, low value consumables, merchandise in warehouse, supplementary materials and packing materials. (2)Measurement Inventories, when delivered, would be determined the actual cost under moving weighted average method. (3)Provision for impairment of inventory At the balance sheet date, inventory is recorded at the lower of cost and net realizable value on an individual basis. For items with significant quantity and low values, provision is made based on their categories. Net realizable value of inventories is determined as follows: 1) net realizable value of finished 33 goods is the estimated selling price less relevant tax and selling expenses. The inventories of the Company mainly refer to longline fishing tuna. The ending net realizable value is determined at the quotation of Qingshui Fishery Ground of Japan on the date which is the most close to the balance sheet date less the relevant expenses that would occur to realize product sales; 2) for materials held for production, net realizable value equals the cost if the net realizable value of the finished goods produced from the materials exceeds the cost; when the price of raw materials decreases indicating that the net realizable value of the relevant finished goods would be lower than cost, the net realizable value is the estimated selling price less costs to completion, selling expenses and relevant tax; and 3) net realizable value of materials held for sale is the market price. (4)Inventory stocking system The Company adopts perpetual inventory system for stocking. (5)Amortization of low value consumables and packing materials The Company adopts fifty amortization method for low value consumables and packing materials. 13. Classify to assets available for sale 14. Long term equity investment (1) Recognition of initial investment cost Initial investment cost of long term equity investment obtained by corporate consolidation: in the case of the consolidation of enterprises under the same control, recognized as the initial cost is the book value of the owners’ equity obtained from the consolidated party; in the case of the consolidation of enterprises not under the same control, recognized as the initial cost is the recognized consolidation cost on the purchase day. As for the long term equity investment obtained by cash payment, the initial investment cost is the actual purchase payment. As for the long term equity investment obtained by the equity securities offering, the initial investment cost is the fair value of the equity securities. As for the long-term equity investment obtained by debt reorganization, initial investment cost of such investment should determine by relevant regulation of the “Accounting Standards for Business Enterprise No.12- Debt Reorganization”; As for the long term equity investment obtained by the exchange of the non-monetary assets and the debts restructuring, the initial investment cost is recognized on the relevant rules in the Principles. (2) Subsequent measurement and profit or loss recognition Where the investor has a control over the investee, long-term equity investments are measured using cost method. Long-term equity investments in associates and joint ventures are measured using equity method. Where part of the equity investments of an investor in its associates are held indirectly through venture investment institutions, common fund, trust companies or other similar entities including investment linked insurance funds, such part of equity investments indirectly held by the investor shall be measured at fair value through profit or loss according to according to relevant requirements of Accounting Standards for Business Enterprises No.22—Recognization and measurement of Financial Instruments regardless whether the above entities have significant 34 influence on such part of equity investments, while the remaining part shall be measured using equity method. (3) Basis of conclusion for common control and significant influence over the investee Joint control over an investee refers to where the activities which have a significant influence on return on certain arrangement could be decided only by mutual consent of the investing parties sharing the control, which includes the sales and purchase of goods or services, management of financial assets, acquisition and disposal of assets, research and development activities and financing activities, etc.; Significant influence on the investee refers to that: significant influence over the investee exists when holding more than 20% but less than 50% of the shares with voting rights or even if the holding is below 20%, there is still significant influence if any of the following conditions is met: there is representative in the board of directors or similar governing body of the investee; participation in the investee’s policy setting process; assign key management to the investee; the investee relies on the technology or technical information of the investing company; or major transactions with the investee. 15. Investment real estate Measurement for investment real estate Cost method Depreciation or amortization method Category of the Company’s investment real estate: rented land use rights, rented buildings and land use rights held for transfer after appreciation. Investment real estate of the Company is initially measured by cost and conducting follow-up measures by cost mode. Accrued on the year averaging is the depreciation of the lease buildings in the Company’s investment property. The detailed check principle is same as that of the fixed assets. The rented land use rights and land use rights held for transfer after appreciation owned by the Company was adopted line amortization method. Detail calculation policy was similar to intangible assets. 16. Fixed assets (1) Recognition The fixed assets are tangible assets held for the goods production, labor supply, lease or operation & management, and with above one-accounting-year service life; meanwhile as up to the following conditions, they are recognized: The economic interest related to the fixed assets probably flow into the Company; The cost of the fixed assets can be measured reliably. (2) Depreciation method Category Depreciation method Depreciation life (year) Salvage rate Annual depreciation rate House and building Straight-line depreciation 20-40 0-10% 2.00%-5.00% 35 Vessel and netting gear Straight-line depreciation 5-30 3%-5% 3.17%-19.40% Machine equipment Straight-line depreciation 8-20 0-10% 5.00%-12.00% Transportation Straight-line depreciation 5 0-10% 19.00%-19.40% equipment Furniture and office Straight-line depreciation 5 0-10% 19.00%-19.40% equipment The Company's fixed assets mainly include housing and buildings, vessels and netting, machinery and equipment, transportation equipment, furniture and office equipment; and the depreciation method adopts the straight-line depreciation. The useful life and estimated net residual value of fixed assets are determined by the nature and use condition of various types of fixed assets. The useful life, estimated net residual value, and depreciation method of fixed assets are rechecked at the end of the year, if there is difference with the former estimated number, corresponding adjustments should be made. In addition to the fixed assets that have been accrued depreciation and still continue to use and the land that has been separately valued and recorded, the Company counts and draws the depreciation of all fixed assets. (3) Recognition, evaluation and depreciation of the fixed assets under finance lease Recognition of fixed assets under finance lease: the nature of this kind of lease is a transfer of all risk and rewards related to the ownership of assets. Measurement of fixed assets under finance lease: the initial amount of a fixed asset under finance lease should be recorded as the lower of fair value of the leased asset at the beginning date of lease term and the present value of minimum lease payment. Subsequent measurement of fixed assets under finance lease should be in accordance with the accounting policies adopted for self-owned fixed assets in respect of provision of depreciation and impairment. 17. Project in progress Project in progress of the Company divided as self-run construction and out-bag construction. The project in progress of the Company carried forward as fixed assets while the construction is ready for the intended use. Criteria of the expected condition for use should apply one of the follow conditions: The substance construction (installation included) of the fixed assets has completed all or basically; As the projects have been in test production or operation, and the results show that the assets can operate properly and produce the qualified products stably, or the test operation result shows the assets can operate or open properly. The expenditure of the fixed assets on the construction, is a little or little. The fixed assets of the project constructed have been up to the requirements of the design or contract, or basically up to. 18. Borrowing expenses (1) Recognition principle on capitalization of borrowing expenses As for the Company’s actual borrowing expenses directly attributable to the assets construction or production, it is capitalized and reckoned into the relevant assets cost; as for other borrowing expenses, it is recognized on the actual sum and reckoned into the current loss/gain. The assets up 36 to the capitalization are assets as the capital assets, investment real estate, and inventory reaching the expectant availability or sale ability. (2) Calculation of the capitalization Capitalization term: the period from the time starts to capitalization to the time the capitalization ends. The period of capitalization suspended is not included. The capitalization of borrowing expenses should be suspended while the abnormal interrupt, which surpass three months continuously, in the middle of acquisition or construction or production. As for the borrowing of the specific borrowing, the capitalization sum is recognized on the current actual interest expenses less the interest income of the borrowing capital not utilized but deposited in the bank or the return of the temporary investment; As for the appropriation of the general borrowing, the capitalization sum is recognized on the weighted average of, the accumulative assets expenditure above the specific borrowing, and times the capitalization rate of the appropriation; As for the discount or premium of the borrowing, the discount or premium to be diluted in every accounting period is recognized in the actual rate method. The effective interest method is the method for the measurement of the diluted discount or premium or interest expenses on the actual interest rate; and the actual interest rate is the interest rate used in the discount of the future cash flow in the expectant duration period as the current book value of the borrowing. 19. Biological assets 20. Oil-and-gas assets 21. Intangible assets (1) Accounting method, service life and impairment test 1) Accounting method for intangible assets The Company’s intangible assets are measured initially on cost. The intangible assets purchased in are taken as the actual cost on the actual payment and relevant expenditure. As for the intangible assets invested in by the investors, the actual cost is recognized on the value stipulated in the contract or agreement; however, if what is stipulated in the contract or agreement is not fair value, the actual cost is recognized on fair value. As for the self-developed intangible assets, their cost is the actual total expenditure before reaching the expectant purpose. The follow-up measurements of the Company’s intangible assets respectively are: the line amortization method is taken on the intangible assets of finite service life, and at the yea-end, the check is taken on the service life and dilution of the intangible assets, and the corresponding adjustment is made if there is inconsistency with the previous estimative ones. As for the intangible assets of uncertain service life, it is not diluted, however, the service life is checked at year-end; If there is solid evidence to its finite service life, its service life is estimated and diluted 37 in straight line method. 2) Recognition principle of intangible assets with uncertain service life Recognized as the intangible assets of uncertain service life is refers to those intangible assets of un-expectable period of economic benefits brought into the Company, or of the uncertain service period. Recognition principle of uncertain service life: from contract right or other legal rights, the uncertain service period is stipulated in the contract or law; after the integration of the situations and relevant expertise argumentation in the same trade, the period of the economic interest brought into the Company by the intangible assets still cannot be recognized. At every year-end, the check is taken on the intangible assets of uncertain service life, mainly in bottom-up way, namely the basic check is taken by the department relevant to the assets utilization, to assess whether there is change in the recognition principle of the uncertain service life. (2) Accounting policy of the internal R&D expenditure 22. Long-term investment impairment Long-term equity investments, investment properties measured at cost and long-term assets such as fixed assets, construction in progress, productive biological assets at cost method, oil and gas assets, intangible assets and goodwill are tested for impairment if there is any indication that an asset may be impaired at the balance date. If the result of the impairment test indicates that the recoverable amount of the asset is less than its carrying amount, a provision for impairment and an impairment loss are recognized for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and the present value of the future cash flows expected to be derived from the asset. Provision for asset impairment is determined and recognized on the individual asset basis. If it is not possible to estimate the recoverable amount of an individual asset, the recoverable amount of a group of assets to which the asset belongs is determined. A group of assets is the smallest group of assets that is able to generate independent cash inflows. Goodwill arising from a business combination is tested for impairment at least at each year end, irrespective of whether there is any indication that the asset may be impaired. For the purpose of impairment testing, the carrying amount of goodwill acquired in a business combination is allocated from the acquisition date on a reasonable basis to each of the related asset groups; if it is impossible to allocate to the related asset groups, it is allocated to each of the related set of asset groups. If the carrying amount of the asset group or set of asset groups is higher than its recoverable amount, the amount of the impairment loss first reduced by the carrying amount of the goodwill allocated to the asset group or set of asset groups, and then the carrying amount of other assets (other than the goodwill) within the asset group or set of asset groups, pro rata based on the carrying amount of each asset. Once the impairment loss of such assets is recognized, it is not be reversed in any subsequent period. 38 23. Long-term deferred expenditure The Company’s long-term deferred expenditure are expenses paid out and with one year above (1-year included) benefit period. The long-term unamortized expenses are diluted by periods according to the benefit period. As the long-term unamortized expenses cannot enable the accounting period’s beneficiary, all dilution values of the project undiluted yet, are transferred into the current loss/gain. 24. Employees benefits (1) Accounting for short-term benefits In the period of employee services, short-term benefits are actually recognized as liabilities and charged to profit or loss, or if otherwise required or allowed by other accounting standards, to the related costs of assets for the current period. At the time of actual occurrence, The Company’s employee benefits are recorded into the profits and losses of the current year or assets associated costs according to the actual amount. The non-monetary employee benefits are measured at fair value. Regarding to the medical and health insurance, industrial injury insurance, maternity insurance and other social insurances, housing fund and labor union expenditure and personnel education that the Company paid for employees, the Company should recognize corresponding employees benefits payable according to the appropriation basis and proportion as stipulated by relevant requirements and recognize the corresponding liabilities and include these expenses in the profits or losses of the current period or recognized as respective assets costs. (2) Accounting for post-employment benefits During the accounting period in which an employee provides service, the amount payable calculated under defined contribution scheme shall be recognized as a liability and recorded in profit and loss of the current period or in assets. In respect of the defined benefit scheme, the Company shall use the projected unit credit method and attribute the welfare obligations calculated using the formula stipulated by the defined benefit scheme to the service period of the employee, and record the obligation in the current profit and loss or related assets cost. (3) Accounting for termination benefits The Company recognizes a liability and expenses in the current profit or loss for termination benefits at the earlier of the following dates: when the Company can no longer withdraw the offer of those benefits; and when the Company recognizes costs for restructuring involving the payment of termination costs. (4) Accounting for other long-term employee benefits. The Company provides other long-term employee benefits to its employees. For those falling within the scope of defined contribution scheme, the Company shall account for them according to 39 relevant requirements of the defined contribution scheme. In addition, the Company recognizes and measures the net liabilities or net assets of the other long-term employee benefits according to relevant requirements of the defined contribution scheme. 25. Accrual liability 26. Share-based payment 27. Other financial instrument of preferred stock and perpetual capital securities 28. Revenue Whether the company needs to comply with the disclosure requirements of the particular industry No 29. Government subsidy (1) Determination basis and accounting treatment for government grants related to assets Government grant obtained by the Company for the purpose of constructing or otherwise forming long term assets is recognized as government grant related to assets which will be recognized as deferred income. Deferred income is averagely allocated against the estimated service life of asset since the asset is available for use, and recorded in profit or loss for the current period. (2) Determination basis and accounting treatment for government grants related to income The government grants other than the government grants related to assets are recognized as government grants related to income. Government grants related to income shall be treated as follows: those used to compensate relevant expenses or losses to be incurred by the enterprise in subsequent periods are recognized as deferred income and recorded in profit and loss for the current period when such expenses are recognized; and those used to compensate relevant expenses or losses that have been incurred by the enterprise are recorded directly in profit or loss for the current period. 30. Deferred income tax asset and deferred income tax liability (1) Where there is difference between the carrying amount of the assets or liabilities and its tax base, (as for an item that has not been recognized as an asset or liability, if its tax base can be determined in light of the tax law, the tax base shall recognized as the difference) the deferred income tax and deferred income tax liabilities shall be determined according to the applicable tax rate in period of assets expected to recover or liability expected to pay off. (2) The deferred income tax assets shall be recognized to the extent of the amount of the taxable income which it is most likely to obtain and which can be deducted from the deductible temporary difference. On balance sheet date, if there have concrete evidence of obtaining, in future period, 40 enough taxable amounts to deduct the deductible temporary difference, the un-confirmed deferred income tax assts in previous accounting period shall be recognized. If there has no enough taxable amounts, obtained in future period, to deducted the deferred income tax assets, book value of the deferred income tax assets shall be kept in decreased. (3) The taxable temporary differences related to the investments of subsidiary companies and associated enterprises shall recognized as deferred income tax liability, unless the Company can control the time of the reverse of temporary differences and the temporary differences are unlikely to be reversed in the expected future. As for the deductible temporary difference related to the investment of the subsidiary companies and associated enterprises, deferred income tax assets shall be recognized while the temporary differences are likely to be reversed in the expected future and it is likely to acquire any amount of taxable income tax that may be used for making up the deductible temporary differences. 31. Leasing (1) Accounting treatment for operating lease Operating lease payments are recognized on a straight-line basis over the term of the relevant lease, and are either included in the cost of related asset or charged to profit or loss for the period. (2) Accounting treatment for finance lease At the commencement of the lease term, the Group records the leased asset at an amount equal to the lower of the fair value of the leased asset and the present value of the minimum lease payments. The difference between the recorded amounts is accounted for as unrecognized finance charge, using the effective interest method amortization during the lease term. Minimum lease payments deducting unrecognized financing charges are listed as long-term payables. 32. Other important accounting policy and estimation Nil 33. Changes in important accounting policies and estimates (1) Changes in important accounting policies □ Applicable √ Not applicable (2) Changes in important accounting estimates □ Applicable √ Not applicable 41 34. Other Nil VI. Taxes 1. Major tax and tax rate Taxes Taxation basis Tax rate VAT Output tax minor the deductible input tax 6%, 10%, 16% Urban maintenance and construction tax Turnover taxes payable 7% Corporate income ax Taxable amount Exemption, 8%, 25% Explain the different taxation entity of the enterprise income tax Taxation entity Income tax rate Shandong Zhonglu Oceanic Fisheries Company Limited Imposing no tax on distant fishing, and 25% for the house leasing Shandong Zhonglu Haiyan Oceanic Co., Ltd. Exemption AFRICA STAR FISHERIES LIMITED 8% for export parts, 25% for domestic sales HABITAT INTERNATIONAL CORPORATION Exemption Shandong Zhonglu Fishery Shipping Co., Ltd. 25% Imposing no tax on aquatic product processing, and 25% for Shandong Zhonglu Oceanic (Yantai) Foods Co., Ltd. refrigeration service 2. Preferential tax (1) VAT tax preference: According to the relevant provisions of the Circular About the Provisional Management Method of Not Levying the Tax on the Aquatic Products Directly Caught by Ocean Fishery Enterprises (SS No. [2000] 260), China's ocean fishery enterprises stipulate on the high seas or in accordance with the relevant agreements that the aquatic products caught in foreign sea areas and sent back for domestic sales should be regarded as the domestic products and should not be levied the import duties and import VAT. If the corresponding domestic sales business is the primary agricultural products sales, exempt from the VAT according to the provisions of VAT rules. The Company's sales revenue from ocean-going fishing operations is exempt from VAT. (2) Income tax preference: According to the Circular of the Preferential Policies Concerning Corporate Income Tax (CSZ No.[1994]001), the Letter About Relevant Issue About Accelerating the Development of China's Ocean Fisheries (CN No. [2000] 104) of the Ministry of Finance, the Enterprise Income Tax Law of the People's Republic of China (PRC Presidential Decree No. [2007] 63), the Enforcement Regulations of Enterprise Income Tax Law of the People's Republic of China (PRC State Council Decree No. 512), Notice About Issuing the Preliminary Processing Scope (Trial) of Agricultural Products that Enjoy the Preferential Policy of Enterprise Income Tax of Ministry of Finance and State Administration of Taxation (CS No. [2008]149), and the Supplement Notice About the Preliminary Processing Scope of Agricultural Products that Enjoy the Preferential Policy of Enterprise Income Tax of Ministry of Finance 42 and State Administration of Taxation (CS No. [2011] 26), the processing charges for the preliminary processing of agricultural products can be handled by the tax-exempt items of preliminary processing of agricultural products. The Company's income obtained from the ocean-going fishing business and the preliminary processing of agricultural products is exempted from corporate income tax. The Company's income obtained from the business except for the ocean-going fishing and the preliminary processing of agricultural products should pay the enterprise income tax at 25%. 3. Other VII. Notes to main items in consolidated financial statement 1. Monetary fund In RMB Item Closing balance Opening balance Cash on hand 2,763,209.95 1,252,378.69 Bank deposit 147,370,969.26 145,374,964.71 Other monetary fund 1,618,986.78 862,500.14 Total 151,753,165.99 147,489,843.54 Including: Total amount save aboard 23,098,072.20 8,621,445.18 Other explanation 2. Financial assets measured by fair value and with its variation reckoned into current gains/losses In RMB Item Closing balance Opening balance Other explanation: 3. Derivative financial assets □ Applicable √ Not applicable 4. Note receivable (1) Category In RMB Item Closing balance Opening balance 43 (2) Note receivable pledged at period-end In RMB Item Amount pledged (3) Note receivable which have endorsed and discount at period-end and has not expired on balance sheet date In RMB Item De-reorganization amount at period-end Un de-reorganization amount at period-end (4) Note transferred to account receivable due to the drawer failure to perform at period-end In RMB Item Amount transferred to account receivable at period-end Other explanation 5. Account receivable (1) Category of account receivable In RMB Closing balance Opening balance Book balance Bad debt provision Book balance Bad debt provision Category Book Proportio Accrual Proportio Accrual Book value Amount Amount value Amount Amount n ratio n ratio Account receivable with bad debt 52,768,8 8,038,23 44,730,56 46,984, 8,191,680 38,792,912. 100.00% 15.23% 100.00% 17.43% provision accrual by 06.60 8.65 7.95 593.00 .11 89 portfolio 52,768,8 8,038,23 44,730,56 46,984, 8,191,680 38,792,912. Total 100.00% 15.23% 100.00% 17.43% 06.60 8.65 7.95 593.00 .11 89 Account receivable with major single amount and withdrawal bad debt provision single at period-end: □ Applicable √ Not applicable Account receivable with bad debt provision withdrawal by method of account age in portfolio: √ Applicable □ Not applicable In RMB Closing balance Account age Account receivable Bad debt provision Accrual ratio 44 Sub-item of within one year 1-6 months 45,950,442.81 2,203,386.98 4.80% 7-12 months 1,092,090.28 108,578.16 9.94% Subtotal of within one year 47,042,533.09 2,311,965.14 4.91% Over three years 5,726,273.51 5,726,273.51 100.00% Total 52,768,806.60 8,038,238.65 Explanation on portfolio basis: Withdrawing bad bed provision by percentage of total accounts receivable outstanding in portfolio: □ Applicable √ Not applicable Withdrawing bad bed provision by other methods in portfolio: (2) Bad debt provision accrual, switch-back or taken back in the period Amount RMB 0 accrual in the Period; amount RMB 153,441.46 switch-back or taken back in the Period Including major amount of bad debt provision that switch-back or taken back in the Period: In RMB Company Amount switch back or taken back Way Liye International 76,934.15 Receivables collected Taiwan Taiyouli Enterprise Co., Ltd. 76,507.31 Receivables collected Total 153,441.46 -- (3) Account receivables actually written-off during the reporting period In RMB Item Amount verified Including major account receivables written-off: In RMB Occurred due to Company Nature Amount verified Reasons Verified procedures related transaction (Y/N) Explanation on account receivable written-off (4) Top five receivables collected by arrears party at ending balance Company Ending balance Ratio in total other account receivable (%) TAI UNION ENTERPRISE CO.,LTD 6,682,668.47 12.66% 45 Hong Kong Luen Thai Seafood 6,577,538.62 12.46% Beishui Japan 3,989,380.88 7.56% PANDA 3,600,962.12 6.82% Ameican H&T SEAFOOD INC 3,118,421.99 5.91% Total 23,968,972.08 45.42% (5) Account receivables derecognized due to financial assets transfer (6) Transfer the account receivable and assets & liabilities arising from further involvement Other explanation: 6. Prepayments (1) Prepayments listed by account age In RMB Closing balance Opening balance Account age Amount Proportion Amount Proportion Within one year 13,370,603.36 100.00% 18,410,772.78 99.13% 1-2 years 0.00 0.00% 162,338.80 0.87% 2-3 years 0.00 0.00% Over 3 years 0.00 0.00% Total 13,370,603.36 -- 18,573,111.58 -- Explanation on prepayments with over one year in age and reasons of un-settle: (2) Top 5 prepayments collected by objects at ending balance Company Ending balance Ratio in total prepayment % CARENA SHIP REPAIR 6,254,807.98 46.78% BOSHUN LOGISTICS LIMITED 734084.77 5.49% Dongyi Sea Transporation Personal 713,176.32 5.33% Company Inspur 501,056.28 3.75% Servotek motor S.L 499,422.77 3.74% Total 8,702,548.12 65.09% Other explanation: 46 7. Interest receivable (1) Category In RMB Item Closing balance Opening balance (2) Major overdue interest Whether has impairment Borrower Closing balance Overdue time Causes occurred and determination basis Other explanation: 8. Dividend receivable (1) Dividend receivable In RMB Item (or invested company) Closing balance Opening balance (2) Major dividend receivable with over one year aged In RMB Whether has impairment Item (or invested Closing balance Age Causes occurred and company) determination basis Other explanation: 9. Other account receivable (1) Category of other account receivable In RMB Closing balance Opening balance Book balance Bad debt provision Book balance Bad debt provision Category Book Proportio Accrual Proportio Accrual Book value Amount Amount value Amount Amount n ratio n ratio Other account 6,605,38 4,913,99 1,691,389 16,219, 4,913,990 11,305,713. receivable with bad 100.00% 74.39% 100.00% 30.30% 0.34 0.90 .44 704.01 .90 11 debt provision 47 accrual by portfolio 6,605,38 4,913,99 1,691,389 16,219, 4,913,990 11,305,713. Total 100.00% 74.39% 100.00% 30.30% 0.34 0.90 .44 704.01 .90 11 Other account receivable with major single amount and withdrawal bad debt provision single at period-end: □ Applicable √ Not applicable Other account receivable with bad debt provision withdrawal by method of account age in portfolio: √ Applicable □ Not applicable In RMB Closing balance Account age Other account receivable Bad debt provision Accrual ratio Sub-item of within one year 1-6 months 1,583,794.30 402,787.73 25.43% 6-12 months 68,276.61 6,812.66 9.98% Subtotal of within one year 1,652,070.91 409,600.39 24.79% 1-2 years 585,429.52 177,919.07 30.39% 2-3 years 81,430.73 40,022.26 49.15% Over three years 4,286,449.18 4,286,449.18 100.00% Total 6,605,380.34 4,913,990.90 74.39% Explanation on portfolio basis: Withdrawing bad bed provision by percentage of total other accounts receivable outstanding in portfolio □ Applicable √ Not applicable Withdrawing bad bed provision by other methods in portfolio: □ Applicable √ Not applicable (2) Bad debt provision accrual, switch-back or taken back in reporting period Amount RMB 0 accrual in the Period; amount RMB 0 switch-back or taken back in the Period. Including major amount of bad debt provision that switch-back or taken back in the Period: In RMB Company Amount switch-back or taken back Way (3) Other receivables actually written-off during the reporting period In RMB Item Amount verified Including major other account receivables written-off: In RMB Company Nature Amount verified Reasons Verified procedures Occurred due to 48 related transaction (Y/N) Explanation on write-off of other receivables: (4) Classify according to nature In RMB Nature Ending book balance Opening book balance Receivable export refund tax 0.00 5,540,557.64 Margin 148,048.68 421,456.37 Insurance claims payment receivable 77,764.04 244,407.54 Transactions and others 6,379,567.62 10,013,282.46 Total 6,605,380.34 16,219,704.01 (5) Top 5 other receivables collected by arrears party at ending balance In RMB Proportion in total Ending balance of Company Nature Ending balance Account age other receivables at bad debt provision period-end Transactions and Tai Lulun 809,272.83 Over three years 12.25% 809,272.83 others Li Henglai Personal loan 793,341.79 Over one years 12.01% 44,612.35 Gao Longxi Personal loan 432,624.41 Over one years 6.55% 24,327.97 Daihatsu Intercourse funds 288,896.39 Over five years 4.37% 288,896.39 DIVING-SEAGULL Intercourse funds 207,072.50 Over five years 3.13% 207,072.50 Total -- 2,531,207.92 -- 38.32% 1,374,182.04 (6)Account receivable involved government subsidies In RMB Time, amount and basis Company Government subsidies Ending balance Ending account age estimated to received (7) Other account receivables derecognized due to financial assets transfer (8) Transfer the other account receivable and assets & liabilities arising from further involvement Other explanation: 49 10. Inventory Whether the company needs to comply with the disclosure requirements of the particular industry No (1) Category of inventory In RMB Closing balance Opening balance Item Provision for Provision for Book balance Book value Book balance Book value price fall-down price fall-down Raw materials 155,255,459.29 45,543.42 155,209,915.87 125,849,777.03 45,543.42 125,804,233.61 Goods in process 0.00 0.00 0.00 0.00 0.00 0.00 Inventory 147,869,434.15 888,594.38 146,980,839.77 98,514,789.13 1,349,243.78 97,165,545.35 Revolving 1,388,402.18 0.00 1,388,402.18 1,038,881.75 0.00 1,038,881.75 material Consumptive 0.00 0.00 0.00 0.00 0.00 biological assets Assets completed without settlement 0.00 0.00 0.00 0.00 0.00 resulted from construction contract Low value 232,725.45 0.00 232,725.45 688,367.24 688,367.24 consumables Goods in transit 19,047,562.12 19,047,562.12 Total 304,746,021.07 934,137.80 303,811,883.27 245,139,377.27 1,394,787.20 243,744,590.07 Does the Company comply with the disclosure requirement of “Information Disclosure Guidelines of Shenzhen Stock Exchange No.4 – Listed Companies Engaged in Seed Industry and Planting Business” or not No (2) Provision for price fall-down In RMB Current increased Current decreased Items Opening balance Switch back or Closing balance Accrual Other Other Written-off Raw materials 45,543.42 45,543.42 Goods in process 0.00 0.00 50 Inventory 1,349,243.78 2,053.90 462,703.30 888,594.38 Revolving 0.00 0.00 material Consumptive 0.00 0.00 biological assets Assets completed without settlement 0.00 0.00 resulted from construction contract Total 1,394,787.20 2,053.90 462,703.30 934,137.80 (3) Explanation on capitalization of borrowing costs in ending balance of inventory (4) Assets completed without settle resulted by construction contract at period-end In RMB Items Amount Other explanation: 11. Classified as assets held for sale In RMB Expected disposal Item Ending book value Fair value Expected disposal time expenses Other explanation: 12. Non-current assets due within one year In RMB Item Closing balance Opening balance Other explanation: 13. Other current assets In RMB Items Closing balance Opening balance Input VAT 28,802,602.21 29,993,482.01 Income tax prepaid 88,480.55 51 Total 28,802,602.21 30,081,962.56 Other explanation: 14. Finance asset available for sales (1) Finance asset available for sales In RMB Closing balance Opening balance Items Impairment Impairment Book balance Book value Book balance Book value provision provision Equity instrument available 33,000,000.00 33,000,000.00 0.00 33,000,000.00 33,000,000.00 0.00 for sales: Measured by cost 33,000,000.00 33,000,000.00 0.00 33,000,000.00 33,000,000.00 0.00 Total 33,000,000.00 33,000,000.00 33,000,000.00 33,000,000.00 (2) Finance asset available for sales measured by fair value at period-end In RMB Equity instrument Debt instrument Category Total available for sale available for sale (3) Finance asset available for sales measured by cost at period-end In RMB Book balance Impairment provision Cash Invested Holding dividend Period-beg Increase in Decrease Period-beg Increase in Decrease proportion in Unit in the Period-end in the Period-end invested unit for the in the period in the period period period period South 33,000,000 33,000,000 33,000,000 33,000,000 Securities 0.87% .00 .00 .00 .00 Co., Ltd. 33,000,000 33,000,000 33,000,000 33,000,000 Total -- .00 .00 .00 .00 (4) Impairment reserve of finance asset available for sales In RMB Equity instrument Debt instrument Category Total available for sale available for sale 52 (5) Explanation on closing fair value of equity instrument available for sale which was down sharply or other-than-temporary drop without accrual the impairment provision In RMB Decline changes Time to drop Accrual Equity instrument of fair value Reasons without Investment cost Ending fair value continuously impairment available for sale comparing with accrual (month) amount its costs Other explanation 15. Held-to-maturity investment (1) Held-to-maturity investment In RMB Closing balance Opening balance Item Impairment Impairment Book balance Book value Book balance Book value provision provision (2) Major held-to-maturity investment at Period-end In RMB Bond Face value Coupon rate Real interest rates Maturity date (3) Re-classified as held-to-maturity investment in the period Other explanation 16. Long-term account receivable (1) Long-term account receivable In RMB Closing balance Opening balance Discount rate Item Bad debt Bad debt Book balance Book value Book balance Book value interval provision provision 53 (2) Long-term account receivable derecognition due to financial assets transfer (3) Assets and liabilities resulted by long-term account receivable transfer and continues involvement Other explanation 17. Long-term equity investment In RMB +,- Ending Other Cash Investme balance The Additiona comprehe dividend Opening nt gains Other Closing of invested l Capital nsive or profit Impairme balance recognize equity Other balance impairme entity investmen reduction income announce nt accrual d under change nt t adjustmen d to equity provision t issued I. Joint venture II. Associated enterprise Other explanation 18. Investment real estate (1) Investment real estate measured at cost √ Applicable □ Not applicable In RMB Item House and building Land use right Construction in process Total I. Original book value 1.Opening balance 47,701,971.19 0.00 0.00 47,701,971.19 2.Current increased 0.00 0.00 0.00 0.00 (1) Outsourcing 0.00 0.00 0.00 0.00 (2) Inventory\fixed assets\construction in 0.00 0.00 0.00 0.00 process transfer-in (3) Increased by 0.00 0.00 0.00 0.00 combination 3.Current decreased 0.00 0.00 0.00 0.00 (1) Disposal 0.00 0.00 0.00 0.00 54 (2) Other 0.00 0.00 0.00 0.00 transfer-out 4.Closing balance 47,701,971.19 0.00 0.00 47,701,971.19 II. Accumulated depreciation and accumulated amortization 1.Opening balance 15,121,084.00 0.00 0.00 15,121,084.00 2.Current increased 614,928.12 0.00 0.00 614,928.12 (1) Accrual or 614,928.12 0.00 0.00 614,928.12 amortization 3.Current decreased 0.00 0.00 0.00 0.00 (1) Disposal 0.00 0.00 0.00 0.00 (2) Other 0.00 0.00 0.00 0.00 transfer-out 4.Closing balance 15,736,012.12 0.00 0.00 15,736,012.12 III. Depreciation reserves 1.Opening balance 886,512.06 0.00 0.00 886,512.06 2.Current increased 0.00 0.00 0.00 0.00 (1) Accrual 0.00 0.00 0.00 0.00 3. Current decreased 0.00 0.00 0.00 0.00 (1) Disposal 0.00 0.00 0.00 0.00 (2) Other 0.00 0.00 0.00 0.00 transfer-out 4.Closing balance 886,512.06 0.00 0.00 886,512.06 IV. Book value 0.00 0.00 0.00 0.00 1. Ending Book 31,079,447.01 0.00 0.00 31,079,447.01 value 2. Opening Book 31,694,375.13 0.00 0.00 31,694,375.13 value 55 (2) Investment real estate measure on fair value □ Applicable √ Not applicable (3) Investment real estate without property certificate completed In RMB Items Book value Reasons Other explanation 19. Fixed assets (1) Fixed assets In RMB House and Vessel and netting Machine Transportation Furniture and Items Total building gear equipment equipment office equipment I. Original book value: 1.Opening 116,743,454.93 602,839,486.21 42,657,969.71 5,906,394.19 11,416,499.53 779,563,804.57 balance 2.Current 0.00 2,884,492.16 530,347.43 517,953.68 586,381.26 4,519,174.53 increased (1) 0.00 2,780,727.63 530,347.43 514,970.73 584,490.08 4,410,535.87 Purchasing (2) Construction in 0.00 0.00 0.00 0.00 0.00 0.00 progress transfer-in (3) Increased 0.00 0.00 0.00 0.00 0.00 0.00 by combination (4) Fluctuations in 0.00 103,764.53 0.00 2,982.95 1,891.18 108,638.66 exchange 3.Current 0.00 1,380,624.37 53,177.78 100,000.00 74,043.21 1,607,845.36 decreased (1) Disposal 0.00 0.00 53,177.78 100,000.00 73,808.80 226,986.58 or scrapping (2) Fluctuations in 0.00 1,380,624.37 0.00 0.00 234.41 1,380,858.78 exchange 56 4.Closing 116,743,454.93 604,343,354.00 43,135,139.36 6,324,347.87 11,928,837.58 782,475,133.74 balance II. Accumulative 0.00 0.00 0.00 0.00 0.00 0.00 depreciation 1.Opening 25,874,051.83 197,594,542.87 17,917,512.15 4,204,646.87 7,840,213.47 253,430,967.19 balance 2.Current 1,330,615.14 16,170,758.67 1,525,732.61 274,720.11 313,177.59 19,615,004.12 increased (1) Accrual 1,330,615.14 16,170,758.67 1,525,732.61 274,720.11 313,177.59 19,615,004.12 0.00 0.00 0.00 0.00 0.00 3.Current 0.00 0.00 31,963.39 90,000.00 69,694.47 191,657.86 decreased (1) Disposal 0.00 0.00 31,963.39 90,000.00 69,694.47 191,657.86 or scrapping 0.00 0.00 0.00 0.00 0.00 0.00 4.Closing 27,204,666.97 213,765,301.54 19,411,281.37 4,389,366.98 8,083,696.59 272,854,313.45 balance III. Depreciation 0.00 0.00 0.00 0.00 0.00 0.00 reserves 1.Opening 0.00 157,573.50 0.00 0.00 0.00 157,573.50 balance 2.Current 0.00 0.00 0.00 0.00 0.00 0.00 increased (1) Accrual 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 3.Current 0.00 0.00 0.00 0.00 0.00 0.00 decreased (1) Disposal 0.00 0.00 0.00 0.00 0.00 0.00 or scrapping 0.00 0.00 0.00 0.00 0.00 0.00 4.Closing 0.00 157,573.50 0.00 0.00 0.00 157,573.50 balance IV. Book value 0.00 0.00 0.00 0.00 0.00 0.00 1. Ending 89,538,787.96 390,420,478.96 23,723,857.99 1,934,980.89 3,845,140.99 509,463,246.79 Book value 2. Opening 90,869,403.10 405,087,369.84 24,740,457.56 1,701,747.32 3,576,286.06 525,975,263.88 Book value 57 (2) Temporary idle fixed assets In RMB Depreciation Impairment Items Original book value Book value Note accumulative provision (3) Fixed assets leasing-in by financing lease In RMB Depreciation Items Original book value Impairment provision Book value accumulative (4) Fixed assets leasing-out by operational lease In RMB Items Ending book value (5) Fixed assets without property certificate obtained In RMB Items Book value Reasons for certificate un-settled Other explanation Pursuant to the Debt Compensation Opinion entered into between the Company and Shandong Aquatic Products Group in April 2006 and the civil verdict issued by People Court of Lixia district of Jinan city (2005 LZZDi-1299), the comprehensive office building owned by Shandong Aquatic Products Group at No.43, Heping road, Lixia District, Jinan with original value of RMB54,221,197.05 (among which, RMB9,592,434.61 was recorded as fixed assets and others were recorded as investment property) was ruled to be vested to the Company, so as to compensate the relevant debts. Building ownership transfer has not been registered yet; management of the Company is in the process of making active coordination among various parties seeking for early completion of such registration. 20. Construction in progress (1) Construction in progress In RMB Closing balance Opening balance Items Impairment Impairment Book balance Book value Book balance Book value provision provision Renovation of the 15,213.68 0.00 15,213.68 sewage treatment 58 Atlantic fencing 4,077,658.55 4,077,658.55 0.00 4,077,658.55 4,077,658.55 0.00 Total 4,092,872.23 4,077,658.55 15,213.68 4,077,658.55 4,077,658.55 (2) Changes of major project in progress In RMB Accumul Proporti Includin ative on of g: Transfer Other amount Opening Current Ending project Work interest Capitaliz Capital Item Budget to fixed decreasin of balance increased balance investme progress capitaliz ing rate resources assets g interest nt in ation in capitaliz budget Period ation (3) Impairment provision of construction in process accrual in the Period In RMB Items Accrual amount Reasons Other explanation 21. Engineering material In RMB Items Closing balance Opening balance Other explanation: 22. Disposal of fixed assets In RMB Items Closing balance Opening balance Other explanation: 23. Productive biological assets (1) Measured by cost □ Applicable √ Not applicable (2) Measured by fair value □ Applicable √ Not applicable 59 24. Oil/gas assets □ Applicable √ Not applicable 25. Intangible assets (1) Intangible assets In RMB Non-patented Items Land use right Patent right Computer software Total technology I. Original book value 1.Opening 17,154,729.00 1,031,396.71 18,186,125.71 balance 2.Current increased (1) Purchasing (2) Internal R&D (3) Increased by combination 3.Current decreased (1) Disposal 4.Closing 17,154,729.00 1,031,396.71 18,186,125.71 balance II. Accumulated amortization 1.Opening 4,453,772.33 236,405.62 4,690,177.95 balance 2.Current 191,935.08 84,833.78 276,768.86 increased (1) Accrual 191,935.08 84,833.78 276,768.86 3.Current decreased 60 (1) Disposal 4.Closing 4,645,707.41 321,239.40 4,966,946.81 balance III. Depreciation reserves 1.Opening balance 2.Current increased (1) Accrual 3.Current decreased (1) disposal 4.Closing balance IV. Book value 1. Ending Book 12,509,021.59 710,157.31 13,219,178.90 value 2. Opening 12,700,956.67 794,991.09 13,495,947.76 Book value The proportion of intangible assets form by internal R&D in total book value of intangible assets at period-end. (2) Land use right without property certificate completed In RMB Items Book value Reasons Other explanation: 26. Development expenses In RMB Opening Closing Items Current increased Current decreased balance balance Other explanation 61 27. Goodwill (1) Original book value of goodwill In RMB The invested entity of events Opening balance Increase during the period Decrease during this period Closing balance with goodwill resulted (2) Impairment provision of goodwill In RMB The invested entity of events Opening balance Increase during the period Decrease during this period Closing balance with goodwill resulted Explain the impairment testing, parameter and recognition method of the impairment losses of goodwill: Other explanation 28. Long-term deferred expenditure In RMB Items Opening balance Current increased Amortized in Period Other decreased Closing balance Amortization of 516,181.25 106,796.10 409,385.15 decoration in HQ Total 516,181.25 106,796.10 409,385.15 Other explanation 29. Deferred income tax asset /deferred income tax liability (1) Deferred income tax assets un-offset In RMB Closing balance Opening balance Items Deductible temporary Deferred income tax Deductible temporary Deferred income tax differences asset differences asset Asset impairment 7,946,784.20 1,986,696.05 1,146,784.18 286,696.05 provision Total 7,946,784.20 1,986,696.05 1,146,784.18 286,696.05 62 (2) Deferred income tax liabilities un-offset In RMB Closing balance Opening balance Items Taxable temporary Deferred income tax Taxable temporary Deferred income tax differences liability differences liability (3) Amount of deferred income tax asset and deferred income tax liability after trade-off In RMB Ending balance of Trade-off between the Opening balance of Trade-off between the deferred income tax deferred income tax deferred income tax Items deferred income tax assets or liabilities after assets and liabilities at assets or liabilities after assets and liabilities off-set period-begin off-set Deferred tax assets 1,986,696.05 286,696.05 (4) Deferred income tax asset without confirmed In RMB Items Closing balance Opening balance (5) Deductible losses of deferred income tax asset without confirmed will expired in later year In RMB Year Closing amount Opening amount Note Other explanation: 30. Other non-current assets In RMB Items Closing balance Opening balance Account for lands paid in advance 2,000,000.00 2,000,000.00 Account for equipment paid in advance 1,316,360.85 1,527,165.98 Software 285,524.92 Total 3,601,885.77 3,527,165.98 Other explanation: 63 31. Short-term borrowing (1) Category of short-term borrowing In RMB Items Closing balance Opening balance Mortgage loan 36,000,000.00 36,000,000.00 Guaranteed loan 27,607,615.40 100,000,000.00 Credit loan 0.00 40,394,931.62 Total 63,607,615.40 176,394,931.62 Explanation on category of short-term borrowing: (2) Short-term loans un-paid by expired Total short-term loans un-paid by expired at end of the Period was 0 Yuan, including important short-term loans are as: In RMB Unit Ending balance Loans rate Overdue time Overdue interest rate Other explanation: 32. Financial liability measured by fair value and with its variation reckoned into current gains/losses In RMB Item Closing balance Opening balance Other explanation: 33. Derivative financial liabilities □ Applicable √ Not applicable 34. Note payable In RMB Category Closing balance Opening balance Totally Yuan due note payable are paid at period-end. 35. Account payable (1) Account payable In RMB 64 Items Closing balance Opening balance Within one year (one year included) 87,901,649.88 57,101,822.73 Over one year 4,816,644.84 8,102,435.25 Total 92,718,294.72 65,204,257.98 (2) Major account payable over one year In RMB Items Closing balance Reasons of un-paid or carry-over Other explanation: 36. Account received in advance (1) Account received in advance In RMB Items Closing balance Opening balance Within one year (one year included) 28,248,806.80 19,187,510.18 Over one year 349,863.72 687,612.58 Total 28,598,670.52 19,875,122.76 (2) Major account received in advance with over one year age In RMB Items Closing balance Reasons of un-paid or carry-over (3) Projects un-completed but settled from construction contract at end of the Period In RMB Items Amount Other explanation: 37. Salary payable (1) Salary payable In RMB Increase during the Decrease during this Items Opening balance Closing balance period period I. Short-term compensation 42,768,314.83 55,311,014.53 61,335,587.04 36,743,742.32 65 II. Post-employment welfare- defined 37.70 2,946,596.06 2,946,595.58 38.18 contribution plans III. Dismissal welfare 85,822.26 867,333.21 915,380.14 37,775.33 Total 42,854,174.79 59,124,943.80 65,197,562.76 36,781,555.83 (2) Short-term compensation In RMB Increase during the Decrease during this Items Opening balance Closing balance period period 1. Wages, bonuses,allowances 41,301,145.50 49,377,454.08 55,416,422.02 35,262,177.56 andsubsidies 2. Welfare for workers 2,330,704.08 2,330,704.08 and staff 3. Social insurance 2,033,086.45 2,033,086.45 Including: Medical 1,637,792.47 1,637,792.47 insurance Work injury 129,303.32 129,303.32 insurance Maternity 265,990.66 265,990.66 insurance 4. Housing accumulation 1,404,582.58 1,404,582.58 fund 5. Labor union expenditure and 1,467,169.33 165,187.34 150,791.91 1,481,564.76 personnel education expense Total 42,768,314.83 55,311,014.53 61,335,587.04 36,743,742.32 (3) Defined contribution plans In RMB Increase during the Decrease during this Items Opening balance Closing balance period period 1. Basic endowment 37.70 2,716,797.18 2,716,796.70 38.18 insurance 2. Unemployment 136,182.58 136,182.58 insurance 66 4. Other 93,616.30 93,616.30 Total 37.70 2,946,596.06 2,946,595.58 38.18 Other explanation: 38. Tax payable In RMB Items Closing balance Opening balance Value-added tax 208,070.33 298,473.86 Enterprise income tax 1,313,801.17 2,271,827.08 Individual income tax 93,776.47 119,102.33 Urban maintenance and construction tax 3,875.86 32,054.49 House property tax 260,204.69 273,051.86 Land use tax 60,465.18 158,804.18 Educational additional 1,288.92 22,896.07 Other tax 628,883.96 202,488.32 Total 2,570,366.58 3,378,698.19 Other explanation: 39. Interest payable In RMB Items Closing balance Opening balance Interest payable for short-term loans 190,417.41 360,208.32 Total 190,417.41 360,208.32 Interest overdue without paid: In RMB Borrower Amount overdue Reasons Other explanation: 40. Dividend payable In RMB Items Closing balance Opening balance Other explanation, including dividend payable unpaid over one year, and explain the reasons: 67 41. Other payable (1) Classification of other payable according to nature of account In RMB Items Closing balance Opening balance Cash deposit 1,008,496.75 633,984.87 Employee cost 3,206,073.36 1,259,769.66 Other 3,498,748.07 4,281,598.23 Total 7,713,318.18 6,175,352.76 (2) Significant other payable with over one year age In RMB Items Closing balance Reasons of un-paid or carry-over Other explanation 42. Classified as liabilities held for sale In RMB Items Closing balance Opening balance Other explanation: 43. Non-current liabilities due within one year In RMB Items Closing balance Opening balance Deferred income due within one year 433,292.75 866,585.48 Total 433,292.75 866,585.48 Other explanation: 44. Other current liability In RMB Items Closing balance Opening balance Changes of short-term payable bonds: In RMB Interest Amortizat Face Issuing Bond Issue Opening Issued in Paid in Closing Bond accrual ion of value date period amount balance the Period the Period balance by face premium 68 value price and conversio n Other explanation: 45. Long-term loans (1) Classification of long-term loans In RMB Items Closing balance Opening balance Explanation on category of long-term loans: Other explanation, including interest rate section: 46. Bonds payable (1) Bonds payable In RMB Item Closing balance Opening balance (2) Changes of bond payable (excluding other financial instrument of preferred stock and perpetual capital securities that classified as financial liability) In RMB (3) Condition of convertible bonds and time of transferring (4) Other financial instrument classified as financial liabilities Outstanding preferred stock and perpetual capital securities at period-end Changes of the outstanding preferred stock and perpetual capital securities at period-end In RMB Outstanding Period-begin Increase during the period Decrease during this period Period-end financial Amount Book value Amount Book value Amount Book value Amount Book value instrument Explanations on basis of other financial instrument classified into financial liabilities Other explanation 47. Long-term account payable (1) Listed by nature In RMB 69 Items Closing balance Opening balance Other explanation: 48. Long-term employee payable (1) Long-term employee payable In RMB Items Closing balance Opening balance II. Dismiss welfare 312,742.86 312,742.86 III. Other long-term welfare 1,264,924.77 1,264,924.77 Total 1,577,667.63 1,577,667.63 (2) Change of defined benefit plan Present value of the obligation of defined benefit plan: In RMB Items Current Period Last Period Scheme assets: In RMB Items Current Period Last Period Net liability(assets) of the defined benefit plan In RMB Items Current Period Last Period Contents of defined benefit plan and the risks associate thereof, influences upon the Company’s future cash flow, timing and uncertainty: The material actuary assumption and sensitive analysis relating to defined benefit plan is explained as follows: Other explanation: 49. Special payable In RMB Increase during the Decrease during this Items Opening balance Closing balance Causes period period Other explanation: 50. Accrued liabilities In RMB 70 Items Closing balance Opening balance Causes Other explanation, including relevant important hypothesis and estimation: 51. Deferred income In RMB Increase during the Decrease during this Items Opening balance Closing balance Causes period period Government Government grants 9,705,869.14 9,705,869.14 subsidies related to assets Total 9,705,869.14 9,705,869.14 -- Item with government subsidy concerned: In RMB Amount Amount Subsidy Assets-relate reckoned into reckoned into Cost Opening increase Other Closing d/ Item non-operatio non-operatio reduction in balance during this changes balance Income-relate n revenue in n revenue in the period period d the Period the period Construction Assets-relate 9,029,572.50 9,029,572.50 special fund d Financial Assets-relate ship-building 676,296.64 676,296.64 d discount Total 9,705,869.14 9,705,869.14 -- Other explanation: 52. Other non-current liability In RMB Items Closing balance Opening balance Other explanation: 53. Share capital In RMB Changes in the Period (+,-) Opening Shares transfer Closing Issuing new balance Bonus shares from public Other Subtotal balance shares reserves 71 Total shares 266,071,320.00 266,071,320.00 Other explanation: 54. Other equity instrument (1) Other financial instrument of outstanding preferred stock and perpetual capital securities at period-end (2) Changes of financial instrument of outstanding preferred stock and perpetual capital securities at period-end In RMB Outstanding Period-begin Increase during the period Decrease during this period Period-end financial Amount Book value Amount Book value Amount Book value Amount Book value instrument Changes of other equity instrument, explanation on changes and basis of relevant accounting treatment: Other explanation: 55. Capital surplus In RMB Increase during the Decrease during this Items Opening balance Closing balance period period Capital premium (equity 185,036,701.86 7,354,410.04 192,391,111.90 premium) Other Capital surplus 94,961,504.96 94,961,504.96 Total 279,998,206.82 7,354,410.04 287,352,616.86 Other explanation, including changes and reasons of changes: A premium resutled by additional investment to Haiyan Company from the Company and other shareholdres 56. Treasury stock In RMB Increase during the Decrease during this Items Opening balance Closing balance period period Other explanation, including changes and reasons for changes: 57. Other consolidated income In RMB Items Opening Current Period Closing 72 balance Less: written in balance other comprehensive Account Belong to Belong to income in before Less : income parent minority previous period income tax in tax expense company after shareholders and carried the period tax after tax forward to gains and losses in current period (II) Other comprehensive income -6,089,14 items which will be reclassified -6,075,014.12 -23,938.25 -14,135.54 -9,802.71 9.66 subsequently to profit or loss Translation differences of foreign -6,089,14 -6,075,014.12 -14,135.54 -9,802.71 financial sheet 9.66 -6,089,14 Total of other consolidated income -6,075,014.12 -23,938.25 -14,135.54 -9,802.71 9.66 Other explanation, including the active part of the hedging gains/losses of cash flow transfer to initial reorganization adjustment for the arbitraged items: 58. Reasonable reserve In RMB Increase during the Decrease during this Items Opening balance Closing balance period period Other explanation, including changes and reasons for changes: 59. Surplus reserves In RMB Increase during the Decrease during this Items Opening balance Closing balance period period Statutory surplus 21,908,064.19 21,908,064.19 reserves Total 21,908,064.19 21,908,064.19 Other explanation, including changes and reasons for changes: 60. Retained profit In RMB Items This period Last period 73 Retained profits at the end of last year before 141,867,217.06 50,349,731.78 adjustment Retained profits at the beginning of the period 141,867,217.06 50,349,731.78 after adjustment Add: net profit attributable to owners of parent 22,601,899.21 91,517,485.28 company Retained profit at period-end 164,469,116.27 141,867,217.06 Details about adjusting the retained profits at the beginning of the period: 1) The retroactive adjustments to Accounting Standards for Business Enterprises and its relevant new regulations affect the retained profits at the beginning of the period amounting to 0 Yuan. 2) The changes in accounting policies affect the retained profits at the beginning of the period amounting to 0 Yuan. 3) The major accounting error correction affects the retained profits at the beginning of the period amounting to 0 Yuan 4) Merge scope changes caused by the same control affect the retained profits at the beginning of the period amounting to 0 Yuan. 5) Other adjustments affect the retained profits at the beginning of the period amounting to 0 Yuan 61. Operating income and cost In RMB Current Period Last Period Items Income Cost Income Cost Main operating 437,116,744.01 373,729,371.53 435,825,365.50 377,649,192.30 Other operating 3,206,032.96 768,677.02 4,352,726.25 718,241.91 Total 440,322,776.97 374,498,048.55 440,178,091.75 378,367,434.21 62. Tax and surcharges In RMB Items Current Period Last Period City maintenance and construction tax 139,594.98 305,392.09 Educational surtax 61,569.29 218,131.38 House property tax 607,009.39 740,050.43 Land use tax 218,430.35 315,805.99 Vehicle and vessel tax 27,829.36 27,664.36 Stamp tax 231,386.95 54,922.03 Local education surcharge 38,141.42 5.83 74 Local water conservancy construction fund 9,542.49 43,464.74 Total 1,333,504.23 1,705,436.85 Other explanation: 63. Sales expenses In RMB Items Current Period Last Period Payroll payable 852,719.42 734,426.40 Port surcharge 2,928,162.72 355,592.64 Freight and miscellaneous charges 8,957,747.30 2,851,332.58 Agency fee 255,376.76 14,224.60 Travelling charge 153,803.20 11,898.35 Business publicity expenses 105,953.82 86,618.05 Other 1,589,461.18 27,210.86 Total 14,843,224.40 4,081,303.48 Other explanation: 64. Administrative expenses In RMB Items Current Period Last Period Payroll payable 11,111,601.32 9,212,316.46 Depreciation 2,405,402.31 556,028.52 Travelling charge 1,309,331.01 1,054,696.16 Business entertainment expenses 556,056.12 555,868.54 Cost tax 2,735.00 Vehicles charge 265,734.24 125,250.73 Attorney charge 1,236,913.74 813,954.48 Office allowance 204,880.72 212,314.01 Property water and electricity 476,256.21 153,112.13 Amortization of intangible assets 276,317.60 195,735.06 Other 5,200,391.39 3,314,423.72 Total 23,045,619.66 16,193,699.81 Other explanation: 75 65. Financial expenses In RMB Items Current Period Last Period Interest costs 3,082,690.15 2,891,553.08 Less: interest income 174,711.83 352,460.61 Exchange loss 15,660,397.91 4,141,704.98 Less: exchange gains 15,348,305.26 562,848.61 Handing expense 403,277.17 330,949.94 Other expense 66,640.42 68,814.21 Total 3,689,988.56 6,517,713.00 Other explanation: 66. Losses on assets impairment In RMB Item Current Period Last Period I. Bad debt losses -153,441.46 10,500.00 II. Provision for falling price of inventory 2,053.90 Total -151,387.56 10,500.00 Other explanation: 67. Gains from changes of fair value In RMB Source of gains from changes of fair value Current Period Last Period Other explanation: 68. Gains on investment In RMB Item Current Period Last Period Other explanation: 69. Income from assets disposal In RMB Item Current Period Last Period Income from assets disposal -18,990.79 262,776.33 76 Total -18,990.79 262,776.33 70. Other income In RMB Sources Current Period Last Period Financial ship-building discount 14,188.00 Government grants 419,104.74 Total 433,292.74 71. Non-operating expenditure In RMB Amount reckoned in current Items Current Period Last Period non-recurring gains/losses Government subsidy 433,292.74 Indemnity from insurance 205,791.69 company Other 9,117.16 Total 0.00 648,201.59 Government subsidy reckoned into current gains/losses: In RMB Subsidy impact The special Assets-relate Issuing Offering Amount in Amount in Item Nature current subsidy d/income-rela subject causes the Period last period gains/losses (Y/N) ted (Y/N) Financial Assets-relate ship-building Subsidy Y N 14,188.00 d discount Special Assets-relate construction Subsidy Y N 419,104.74 d fund Total -- -- -- -- -- 433,292.74 -- Other explanation: 72. Non-operating expenses In RMB 77 Amount included in current Item Current Period Last Period non-recurring profits or losses Loss of non-current assets 3,772.45 399.90 3,772.45 scrape Additional overdue find of state 4,282.38 taxes Other expense 423,335.93 295,719.88 423,335.93 Total 427,108.38 300,402.16 427,108.38 Other explanation: 73. Income tax expenses (1) Statement of income tax expense In RMB Items Current Period Last Period Current income tax expense 1,922,681.98 453,724.36 Total 1,922,681.98 453,724.36 (2) Adjustment on accounting profit and income tax expenses In RMB Items Current Period Total profit 23,050,972.70 Income tax based on statutory/applicable rate 1,922,681.98 Income tax expense 1,922,681.98 Other explanation 74. Other comprehensive income See Note 57. 75. Items of statement of cash flow (1) Other cash received in relation to operation activities In RMB Items Current Period Last Period Intercourse funds and others 87,228,597.67 43,104,120.67 Total 87,228,597.67 43,104,120.67 78 Explanation on other cash received in relation to operation activities: (2) Other cash paid in relation to operation activities In RMB Items Current Period Last Period Expenses of management cash paid 3,704,943.53 4,119,883.15 Sales expenses paid in cash 8,960,979.71 1,234,748.50 Intercourse funds and others 114,772,392.52 49,044,939.72 Total 127,438,315.76 54,399,571.37 Explanation on other cash paid in relation to operation activities: (3) Cash received from other investment activities In RMB Items Current Period Last Period Explanation on cash received from other investment activities (4) Cash paid related with investment activities In RMB Items Current Period Last Period Explanation on Cash paid related with investment activities: (5) Other cash received in relation to financing activities In RMB Items Current Period Last Period Explanation on other cash received in relation to financing activities: (6) Cash paid related with financing activities In RMB Items Current Period Last Period Explanation on cash paid related with financing activities: 76. Supplementary information to statement of cash flow (1) Supplementary information to statement of cash flow In RMB 79 Supplementary information This Period Last Period 1. Net profit adjusted to cash flow of -- -- operation activities: Net profit 21,128,290.72 33,458,855.80 Add: Assets impairment provision -151,602.06 -1,943,630.88 Depreciation of fixed assets, consumption of oil assets and depreciation of productive 18,855,673.47 15,751,219.98 biology assets Amortization of intangible assets 276,768.86 195,735.06 Amortization of long-term retained expense 106,796.10 Loss from disposal of fixed assets, intangible assets and other long-term assets(gain is 18,990.79 -247,813.32 listed with “-”) Financial expenses (gain is listed with “-”) 3,689,988.56 2,891,561.26 Decrease of deferred income tax assets -1,700,000.00 (increase is listed with “-”) Decrease of inventory (increase is listed with -60,067,293.20 -55,276,389.67 “-”) Decrease of operating receivable accounts 8,879,176.83 -1,486,025.93 (increase is listed with “-”) Increase of operating payable accounts 30,777,822.24 24,532,644.24 (decrease is listed with “-”) Net cash flow arising from operating 21,814,612.31 17,876,156.54 activities 2. Material investment and financing not -- -- involved in cash flow 3. Net change of cash and cash equivalents: -- -- Balance of cash at period end 150,574,179.21 102,884,493.47 Less: Balance of cash equivalent at 147,067,351.82 129,521,203.29 year-begin Net increasing of cash and cash equivalents 3,506,827.39 -26,636,709.82 (2) Net cash paid for obtaining subsidiary in the Period In RMB Amount Including: -- Including: -- 80 Including: -- Other explanation: (3) Net cash received by disposing subsidiary in the Period In RMB Amount Including: -- Including: -- Including: -- Other explanation: (4) Constitution of cash and cash equivalent: In RMB Item Closing balance Opening balance Ⅰ. Cash 150,574,179.21 147,067,351.82 Including: Cash on hand 2,763,209.95 1,252,378.69 Bank deposit available for payment 146,411,982.48 145,374,973.13 at any time Other monetary fund available for 1,398,986.78 440,000.00 payment at any time Ⅲ. Balance of cash and cash equivalent at 150,574,179.21 147,067,351.82 period-end Other explanation: 77. Notes of changes of owners’ equity Explain the name and adjusted amount in “Other” at end of last period: 78. Assets with ownership or use right restricted In RMB Item Ending book value Restriction reasons Other monetary fund, L/C Guarantee Monetary fund 1,178,986.78 deposits Fixed assets 69,106,984.16 Real estate, mortgage bank Intangible assets 12,764,639.81 Lands, mortgage bank Total 83,050,610.75 -- 81 Other explanation: 79. Item of foreign currency (1) Item of foreign currency In RMB Closing balance of foreign Items Rate of conversion Ending RMB balance converted currency Monetary funds -- -- Including: USD 10,237,220.64 67,735,594.09 6.6166 EUR 30,637.79 234,425.05 7.6515 HKD JPY 10,419,926.00 624,299.45 0.059914 XOF 135,000.00 1,761.48 0.013048 CEDI 8,080,363.33 11,828,843.88 1.4639 Accounts receivable -- -- Including: USD 3,636,860.28 24,063,649.73 6.6166 EUR HKD JPY 158,587,384.00 9,501,604.52 0.059914 Long term borrowing -- -- Including: USD EUR HKD JPY Other explanation: 82 (2) Explanation on foreign operational entity, including as for the major foreign operational entity, disclosed main operation place, book-keeping currency and basis for selection; if the book-keeping currency changed, explain reasons √Applicable □ Not applicable Foreign main operation Book-keping Major foreign operation entity Basis place currency HABITAT INTERNATIONAL The economic environm CORPORATION Panama CNY ent in the operation site s LAIF FISHERIES COMPANY LIMITED The economic environm Garner USD ent in the operation site s YAW ADDO FISHERIES COMPANY The economic environm LIMITED Garner USD ent in the operation site s ZHONG GHA FOODS COMPANY The economic environm LIMITED Garner USD ent in the operation site s AFRICA STAR FISHERIES LIMITED The economic environm Garner USD ent in the operation site s 80. Hedging Disclosed hedging items and relevant hedging instrument based on hedging’s category, disclosed qualitative and quantitative information for the arbitrage risks: 81. Other VIII. Changes of consolidation scope 1. Enterprise consolidation not under the same control (1) Enterprise consolidation not under the same control In RMB Income of Net profit of Standard to Time point Cost of Ratio of Acquired acquiree from acquiree from Purchasing determine the Acquiree for equity equity equity way Equity purchasing purchasing date purchasing obtained obtained obtained obtained way date to date to date period-end period-end Other explanation: 83 (2) Combination cost and goodwill In RMB Combination cost Determination method for fair value of the combination cost and contingent consideration and changes: Main reasons for large goodwill resulted: Other explanation: (3) Identifiable assets and liability on purchasing date under the acquiree In RMB Fair value on purchasing date Book value on purchasing date Determination method for fair value of the identifiable assets and liabilities: Contingent liability of the acquiree bear during combination: Other explanation: (4) Gains or losses arising from re-measured by fair value for the equity held before purchasing date Whether it is a business combination realized by two or more transactions of exchange and a transaction of obtained control rights in the Period or not □Y √N (5) On purchasing date or period-end of the combination, combination consideration or fair value of identifiable assets and liability for the acquiree are un-able to confirm rationally (6) Other explanation 2. Enterprise combined under the same control (1) Enterprise combined under the same control in the Period In RMB Income of the Net profit of combined the combined Income of the Net profit of Basis of Standard to party from party from combined the combined Equity ratio combined Combination determine the period-begin period-begin party during party during Acquiree obtained in under the date combination of of the the combination same control date combination combination comparison comparison to the to the period period combination combination 84 date date Other explanation: (2) Combination cost In RMB Combination cost Explanation on contingent consideration and its changes: Other explanation: (3) Assets and liability of the combined party on combination date In RMB Combination date Ending period of last year Contingent liability of the combined party bear during combination Other explanation: 3. Counter purchase Basic information of transactions, basis of transactions constituting counter purchase, whether assets and liabilities reserved by listed companies constituting business and their basis, confirmation of combined cost, the amount occurred when adjusting rights and interests in accordance with equity transaction and its calculation: 4. Disposal of subsidiaries Losing controlling rights while dispose subsidiary on one-time □Yes √No Dispose subsidiary step by step through multi-dealings and losing controlling rights in the Period □Yes √No 5. Changes of combination scope Other reasons contributed the changes for combination scope (e.g. new subsidiary established, liquidate subsidiary etc.): 85 6. Other IX. Equity in other entity 1. Equity in subsidiary (1) Constitute of enterprise group Main operation Share-holding ratio Subsidiary Registered place Business nature Acquired way place Directly Indirectly Shandong Zhonglu Fishery Qingdao Qingdao Refrigerated 100.00% Investment Shipping Co., Shandong Shandong transport Ltd. Shandong Zhonglu Oceanic Yantai Shandong Yantai Shandong Food processing 100.00% Investment (Yantai) Food Co., Ltd. Shandong Zhonglu Haiyan Qingdao Qingdao Pelagic fishing 59.05% Investment Oceanic Fishery Shandong Shandong Co., Ltd. HABITAT INTERNATION Refrigerated Panama Panama 100.00% Investment AL transport CORPORATION YAW ADDO FISHERIES Garner Garner Pelagic fishing Operating lease COMPANY LIMITED Explanation on share-holding ratio in subsidiary different from ratio of voting right: Basis for controlling the invested entity with half or below voting rights held and without controlling invested entity but with over half and over voting rights: Controlling basis for the structuring entity included in consolidated range: Basis on determining to be an agent or consignor: Other explanation: (2) Important non-wholly-owned subsidiary In RMB Subsidiary Share-holding ratio of Gains/losses attributable Dividend announced to Ending equity of 86 minority to minority in the Period distribute for minority in minority the Period Shandong Zhonglu Haiyan Oceanic Fishery 40.95% -1,473,608.49 126,326,229.75 Co., Ltd. Explanation on share-holding ratio of minority different from ratio of voting right: Other explanation: (3) Main finance of the important non-wholly-owned subsidiary In RMB Closing balance Opening balance Subsidia Non-curr Non-curr Non-curr Non-curr Current Total Current Total Current Total Current Total ry ent ent ent ent assets assets liability liability assets assets liability liability assets liability assets liability Shandon g Zhonglu 177,301, 221,758, 399,060, 85,570,8 676,296. 86,247,1 137,172, 226,220, 363,393, 174,281, 676,296. 174,957, Haiyan 266.90 913.03 179.93 98.63 64 95.27 698.60 585.87 284.47 509.38 64 806.02 Oceanic Fishery Co., Ltd. In RMB Current Period Last Period Cash flow Cash flow Total Total Subsidiary Operation from Operation from Net profit comprehensi Net profit comprehensi Income operation Income operation ve income ve income activity activity Shandong Zhonglu Haiyan 73,754,521.8 46,126,136.8 34,584,084.0 -3,598,555.54 -3,622,493.79 -2,244,328.09 7,776,226.98 7,850,678.66 Oceanic 2 7 5 Fishery Co., Ltd. Other explanation: (4) Use of the corporate funds and major limitation of debt liquidation of the group (5) Financial supporting or other supports offer to the structured body, which included in consolidation statement scope Other explanation: 87 2. Transaction that has owners equity shares changed in subsidiary but still with controlling rights (1) Owners equity shares changed in subsidiary (2) Impact on minority’s interest and owners’ equity attributable to parent company In RMB Other explanation 3. Equity in joint venture and cooperative enterprise (1) Important joint venture and cooperative enterprise Share-holding ratio Accounting treatment on Main operation investment for Name Registered place Business nature place Directly Indirectly joint venture and cooperative enterprise Share-holding ratio or shares enjoyed different from voting right ratio: Basis of the voting rights with 20% below but with major influence, or without major influence but with over 20% (20% included) voting rights hold: (2) Main financial information of the important joint venture In RMB Closing balance /Current Period Opening balance /Last Period Other explanation (3) Main financial information of the important cooperative enterprise In RMB Closing balance /Current Period Opening balance /Last Period Other explanation (4) Summary of the financial information for those minor joint venture and affiliates In RMB 88 Closing balance /Current Period Opening balance /Last Period Joint venture: -- -- Total of the items counted by share-holding -- -- ratio Cooperative enterprise: -- -- Total of the items counted by share-holding -- -- ratio Other explanation (5) Major limitation of the capital transfer to the Company from joint venture or affiliates (6) Excess deficit arising from joint venture or affiliates In RMB Loss un-confirmed in the Period Accumulative loss Accumulative loss confirmed at Joint venture or affiliates (or net profit shared in the un-confirmed previous period-end Period) Other explanation (7) Un-confirmed commitment with joint venture investment concerned (8) Contingency with investment of joint venture investment concerned 4. Major co-management Share-holding ratio /shares enjoyed Name Main operation place Registered place Business nature Directly Indirectly Explanation on difference of the voting rights over share-holding or share enjoyed in co-management: As for the independent entity, basis of co-management classification: Other explanation 5. Equity in structured entities not included in the consolidated financial statements Note of structured entities not included in the consolidated financial statements: 6. Other X. Risks related to financial instruments The financial assets of the Company include accounts receivable and other receivables. The financial liabilities of the Company include accounts payable, other payables and short-term loans. For details of each financial instrument, please refer to the relevant items in Note 5. The Company is faced with the risks of various financial instruments in 89 its daily activities, mainly including credit risk, liquidity risk and market risk. The board of directors is responsible for establishing and supervising the risk management structure of the Company and developing and monitoring the Company's risk management policies. Risk management objectives and policies: the Company's goal of risk management is to strike a proper balance between risks and profits, minimize the negative impacts of the risks on the Company's operating results and maximize the benefits of shareholders and other equity investors. 1. Credit risk If the customer or the other party involving in the financial instruments cannot fulfill the obligations under the contract and cause financial losses to the Company, that is credit risk. Credit risk is mainly from the customer receivables. The book value of account receivables and notes receivable and other receivables is the maximum credit risk of the Company for financial assets. 2. Liquidity risk Liquidity risk is the risk of the shortage of funds when the Company is fulfilling its obligations related to financial liabilities. In the case of normal and tense funds, the Company needs to ensure that there is sufficient liquidity to meet its due debts and negotiate with financial institutions for financing so as to maintain a certain level of reserve credit line to reduce the liquidity risk. 3. Market risk (1) Foreign exchange risk Foreign exchange risk refers to the risk that the fair value of financial instruments or the future cash flows fluctuate due to changes in foreign exchange rates. The foreign exchange risk faced by the Company mainly comes from the financial assets valued in US dollars, and the amount of foreign currency financial assets converted into RMB is listed as described in VII. 79 foreign currency monetary items. (2) Interest rate risk Interest rate risk refers to the risk that the fair value of financial instruments or future cash flows fluctuate due to changes in market interest rates. The interest rate risk faced by the Company mainly comes from the long-term bank loans, the Company’s loans are floating interest rate, and there is risk of RMB benchmark interest rate change. XI. Disclosure of fair value 1. Ending fair value of the assets and liabilities measured by fair value In RMB Ending fair value Item First-order Second-order Third-order Total I. Sustaining measured by -- -- -- -- fair value II. Non-persistent measure -- -- -- -- 90 2. Basis for determining the market price of the sustained and non-sustained first-level fair value measurement projects 3. The qualitative and quantitative information of the valuation techniques and important parameters adopted for the sustained and non-sustained second-level fair value measurement projects 4. The qualitative and quantitative information of the valuation techniques and important parameters adopted for the sustained and non-sustained third-level fair value measurement projects 5. The adjustment information about book value between the beginning and the end of the period and the unobservable parameter sensitivity analysis of the sustained third-level fair value measurement projects 6. The sustained third-level fair value measurement projects that conversion has occurred among various levels in the current period, the reasons for change and the policy determining the conversion point 7. Valuation techniques change occurred during the current period and the reasons for change 8. The fair value situations of the financial assets and financial liabilities not measured by the fair value 9. Other XII. Related party and related transactions 1. Parent company of the enterprise Share-holding ratio Voting right ratio on Parent company Registration place Business nature Registered capital on the enterprise for the enterprise parent company Investment and Shandong management, State-owned Assets management and Jinan Shandong RMB 4,500,000,000 33.07% 33.07% Investment Holding operation of assets, Company Limited managed operations, investment advisory Explanation on parent company of the enterprise Ultimate controller of the Company is Shandong State-owned Assets Investment Holdings Co., Ltd. Other explanation: 91 2. Subsidiary of the Enterprise Found more in Note IX.” Equity in subsidiary” 3. Cooperative enterprise and joint venture Found more in Note. Other cooperative enterprise and joint venture that have related transaction with the Company in the Period or occurred in previous period Name Relationship Other explanation 4. Other related party Other related party Relationship with the Enterprise Shandong Luxin Investment Holding Company Limited Shareholders with over 5% shares held Other explanation 5. Related transaction (1) Goods purchasing, labor service providing and receiving Goods purchasing/labor service receiving In RMB Whether over the Amount of this Trading limit Related party Content approved limited or Amount of last period period approved not Goods sold/labor service providing In RMB Related party Content Amount of this period Amount of last period Explanation on goods purchasing, labor service providing and receiving In RMB (2) Related trusteeship management/contracts and entrusted management/outsourcing Statement of trusteeship management/contract: In RMB Managed Managed Client/Contract-o Entrusting Trustee/assts earnings /pricing earnings Trustee /start Trustee /ends ut party party/Contractor contract of the contract confirmed in the earnings period / contract 92 earnings Related managed/contract: Entrusted management/outsourcing: In RMB Entrusted Trustee fee / earnings Client/Contract-o Entrusting Entrust /assets Entrust /start Entrust /ends pricing of the confirmed in the ut party party/Contractor outsourcing outsourcing period / outsourcing costs Related management/ outsourcing: (3) Related lease As a lessor for the Company: In RMB Lease income in recognized in Lease income in recognized last Lessee Assets type the Period the Period As a lessee for the Company: In RMB Lease income in recognized in Lease income in recognized last Lessor Assets type the Period the Period Explanation on related lease (4) Related guarantee As the guarantor In RMB Secured party Amount guarantee Start End Completed or not (Y/N) As the secured party In RMB Guarantor Amount guarantee Start End Completed or not (Y/N) Shandong State-owned Assets Investment 100,000,000.00 2017-04-28 2018-02-28 Y Holding Company Limited Explanation on related guarantee (5) Related party’s fund loan In RMB 93 Related party Fund loan Start End Note Borrowing Lending (6) Related party’s assets transfer and debt reorganization In RMB Related party Content Current Period Last Period (7) Remuneration of key manager In RMB Items Current Period Last Period Total remuneration 1,078,527.06 (8) Other related transactions 6. Receivable/payable items of related parties (1) Receivable item In RMB Closing balance Opening balance Item Related party Book balance Bad debt reserves Book balance Bad debt reserves (2) Payable item In RMB Item Related party Ending book balance Opening book balance 7. Commitments of related party 8. Other XIII. Share-based payment 1. Share-based payment □ Applicable √ Not applicable 94 2. Share-based payment settled by equity □ Applicable √ Not applicable 3. Share-based payment settled by cash □ Applicable √ Not applicable 4. Amendment and termination of the share-based payment 5. Other XIV. Commitment or contingency 1. Important commitment Important commitment on balance sheet date Nil 2. Contingency (1) Contingency on balance sheet date Nil (2) If the Company has no contingency need to disclosed, explain reasons The Company has no important contingency that need to disclosed 3. Other XV. Event occurring after balance sheet date 1. Important non-adjusting events In RMB Impact on financial status and Reasons of unable to estimated Item Content operation results the impact 2. Profit distribution In RMB 95 3. Sales return 4. Other explanation on events after balance sheet date XVI. Other important event 1. Error correction for previous period (1) Retrospective restatement In RMB Item with impact in statement Correction content Treatment procedure Cumulative impact in every comparative period (2) Prospective application Correction content Approval procedure Cause of prospective application adoption 2. Debt reorganization 3. Assets replacement (1) Exchange of non-monetary assets (2) Other assets replacement 4. Pension plan 5. Discontinuing operation In RMB Profit of discontinuing Income tax operation Item Revenue Expenses Total profit Net profit expenses attributable to owners of parent company Other explanation 96 6. Segment information (1) Determination basis and accounting policy for segment (2) Financial information of the segment In RMB Item Offset between segment Total (3) If the Company has no segment reporting, or unable to disclosed the total assets and liabilities of the segment, explain reasons (4) Other explanation 7. Other important transactions and events shows impact on investor decision-making 8. Other XVII. Principle notes of financial statements of parent company 1. Accounts receivable (1) Category of account receivable In RMB Closing balance Opening balance Book balance Bad debt reserves Book balance Bad debt reserves Category Book Accrual Accrual Book value Amount Ratio Amount value Amount Ratio Amount ratio ratio Account receivable with bad debt 19,618,0 5,937,50 13,680,54 14,421, 5,937,507 8,484,060.2 100.00% 30.27% 100.00% 41.17% provision accrual by 51.48 7.66 3.82 567.93 .66 7 portfolio 19,618,0 5,937,50 13,680,54 14,421, 5,937,507 8,484,060.2 Total 100.00% 30.27% 100.00% 41.17% 51.48 7.66 3.82 567.93 .66 7 Account receivable with major single amount and withdrawal bad debt provision single at period-end: □ Applicable √ Not applicable Account receivable with bad debt provision withdrawal by method of account age in portfolio: √ Applicable □ Not applicable In RMB A/C age Closing balance 97 Account receivable Bad debt reserves Accrual ratio Sub-item of within one year Within 6 months 13,922,433.47 248,275.15 5.00% 6-12 months 6,600.00 214.50 10.00% Subtotal of within one year 13,929,033.47 248,489.65 Over three years 5,689,018.01 5,689,018.01 100.00% Total 19,618,051.48 5,937,507.66 Explanation on portfolio basis: In combination, withdrawal proportion of bad debt provision based on balance proportion for account receivable: □ Applicable √ Not applicable In combination, withdrawal proportion of bad debt provision based on other methods for account receivable: (2)Bad debt provision accrual, switch-back or taken back in reporting period Amount RMB 0 accrual in the Period; amount 0 Yuan switch-back or taken back in the Period 。 Including major amount of bad debt provision that switch-back or taken back in the Period: In RMB Company Amount switch back or taken back Way (3) Account receivables actually written-off during the reporting period In RMB Items Amount verified Including major account receivables written-off: In RMB Occurred due to Company Nature Amount verified Reasons Verified procedures related transaction (Y/N) Explanation on account receivable written-off : (4)Top five receivables collected by arrears party at ending balance In RMB Company Ending balance Ratio in total receivable Balance of bad debt provision Shandong Zhonglu Oceanic (Yantai) Food Co., 7,239,765.00 36.90% Ltd. TAI UNION ENTERPRISE CO.,LTD 6,682,668.47 34.06% 248,275.15 98 PACIFIC PANDA,INC 3,600,962.12 18.36% 3,600,962.12 Qingdao Haifeng Gorup Limited 430,625.10 2.20% 430,625.10 Han Xue 293,209.20 1.49% 293,209.20 Total 18,247,229.89 93.01% 4,573,071.57 (5) Account receivables derecognized due to financial assets transfer (6) Transfer the account receivable and assets & liabilities arising from further involvement Other explanation: 2. Other accounts receivable (1) Category of other account receivable In RMB Closing balance Opening balance Book balance Bad debt reserves Book balance Bad debt reserves Category Book Accrual Accrual Book value Amount Ratio Amount value Amount Ratio Amount ratio ratio Other account receivable with bad 75,824,8 3,673,65 72,151,23 68,363, 3,673,656 64,689,774. 100.00% 4.84% 100.00% 5.37% debt provision 90.78 6.91 3.87 431.90 .91 99 accrual by portfolio 75,824,8 3,673,65 72,151,23 68,363, 3,673,656 64,689,774. Total 100.00% 4.84% 100.00% 5.37% 90.78 6.91 3.87 431.90 .91 99 Other account receivable with major single amount and withdrawal bad debt provision single at period-end: □ Applicable √ Not applicable Other account receivable with bad debt provision withdrawal by method of account age in portfolio: √ Applicable □ Not applicable In RMB Closing balance A/C age Other receivable Bad debt reserves Accrual ratio Sub-item of within one year Within 6 months 19,046,085.57 139,823.36 5.00% 6-12 months 71,766.00 15.00 10.00% Subtotal of within one year 19,117,851.57 139,838.36 1-2 years 21,124,765.99 259,746.18 30.00% 99 Over three years 35,582,273.22 3,274,072.37 100.00% Total 75,824,890.78 3,673,656.91 Explanation on portfolio basis: In combination, withdrawal proportion of bad debt provision based on balance proportion for other account receivable □ Applicable √ Not applicable In combination, withdrawal proportion of bad debt provision based on other methods for other account receivable □Applicable √ Not applicable (2) Bad debt provision accrual, switch-back or taken back in reporting period Amount RMB 0 accrual in the Period; amount 0 Yuan switch-back or taken back in the Period Including major amount of bad debt provision that switch-back or taken back in the Period: In RMB Company Amount switch-back or taken back Way (3) Other receivables actually written-off during the reporting period In RMB Items Amount verified Including major other account receivables written-off In RMB Occurred due to Nature of other Company Amount verified Reasons Verified procedures related transaction receivables (Y/N) Explanation on write-off of other receivables: (4) Other receivables by nature In RMB Nature Ending book balance Opening book balance Intercourse funds in the Company 75,434,742.96 63,318,089.06 Reserve fund and others 390,147.82 5,045,342.84 Total 75,824,890.78 68,363,431.90 (5) Top 5 other receivables collected by arrears party at ending balance In RMB Proportion in total Ending balance of Company Nature Ending balance Account age other receivables at bad debt provision 100 year-end LAIF Company in Within 1 year, 1-2 Intercourse funds 21,613,238.86 28.50% Ghana years, 2-3 years Shandong Zhonglu Haiyan Oceanic Intercourse funds 20,720,825.26 Over 3 years 27.33% Fishery Co., Ltd. YAW ADDO Intercourse funds 11,446,927.59 Over 3 years 15.10% Company ZHONG GHA FOOD Intercourse funds 8,069,246.53 Within 1 year 10.64% COMPAY LIMITED AFRICA STAR FISHERIS Intercourse funds 7,215,697.10 Within 1 year 9.52% LIMITED Total -- 69,065,935.34 -- 91.09% (6) Account receivable involved government subsidies In RMB Time, amount and basis Company Name Ending balance Ending account age estimated to received (7) Other account receivables derecognized due to financial assets transfer (8) Transfer the other account receivable and assets & liabilities arising from further involvement Other explanation: 3. Long-term equity investment In RMB Closing balance Opening balance Items Impairment Impairment Book balance Book value Book balance Book value provision provision Investment for 232,189,455.23 232,189,455.23 204,189,455.23 204,189,455.23 subsidiary Total 232,189,455.23 232,189,455.23 204,189,455.23 204,189,455.23 (1) Investment for subsidiary In RMB 101 Ending balance of Increase during Decrease during Impairment The invested entity Opening balance Closing balance impairment the period this period accrual provision HABITAT INTERNATIONA 12,476,145.60 12,476,145.60 L CORP. Shandong Zhonglu Fishery Shipping 22,869,513.38 22,869,513.38 Co., Ltd. Shandong Zhonglu Oceanic (Yantai) 55,448,185.24 55,448,185.24 Food Co., Ltd. Shandong Zhonglu Haiyan Oceanic 113,395,611.01 28,000,000.00 141,395,611.01 Fishery Co., Ltd. Total 204,189,455.23 28,000,000.00 232,189,455.23 (2) Investment for associates and joint venture In RMB +,- Ending Other Cash Investme balance Additiona comprehe dividend Opening nt gains Other Closing of Company l Capital nsive or profit Impairme balance recognize equity Other balance impairme investmen reduction income announce nt accrual d under change nt t adjustmen d to equity provision t issued I. Joint venture II. Associated enterprise (3) Other explanation 4. Operating income and cost In RMB Current Period Last Period Items Income Cost Income Cost Main business 77,834,059.12 60,182,495.95 57,174,319.09 43,119,825.36 Other business 2,054,655.24 768,677.02 2,364,952.79 718,241.91 Total 79,888,714.36 60,951,172.97 59,539,271.88 43,838,067.27 102 Other explanation: 5. Investment gains In RMB Items Current Period Last Period 6. Other XVIII. Supplementary Information 1. Current non-recurring gains/losses √ Applicable □ Not applicable In RMB Item Amount Note Gains/losses from the disposal of -18,990.79 non-current asset Governmental subsidy reckoned into current gains/losses (not including the subsidy enjoyed in quota or ration according to 433,292.74 national standards, which are closely relevant to enterprise’s business) Other non-operating income and expenditure -427,108.38 except for the aforementioned items Total -12,806.43 -- Concerning the extraordinary profit (gain)/loss defined by Q&A Announcement No.1 on Information Disclosure for Companies Offering Their Securities to the Public --- Extraordinary Profit/loss, and the items defined as recurring profit (gain)/loss according to the lists of extraordinary profit (gain)/loss in Q&A Announcement No.1 on Information Disclosure for Companies Offering Their Securities to the Public --- Extraordinary Profit/loss, explain reasons □ Applicable √ Not applicable 2. REO and earnings per share Earnings per share Profits during report period Weighted average ROE Basic EPS (RMB/Share) Diluted EPS (RMB/Share) Net profits belong to common stock 3.14% 0.08 0.08 stockholders of the Company Net profits belong to common stock 3.15% 0.08 0.08 stockholders of the Company after 103 deducting nonrecurring gains and losses 3. Difference of the accounting data under accounting rules in and out of China (1) Difference of the net profit and net assets disclosed in financial report, under both IAS (International Accounting Standards) and Chinese GAAP (Generally Accepted Accounting Principles) □ Applicable √ Not applicable (2) Difference of the net profit and net assets disclosed in financial report, under both foreign accounting rules and Chinese GAAP (Generally Accepted Accounting Principles) □ Applicable √ Not applicable (3) Explain accounting difference over the accounting rules in and out of China; as for the difference adjustment for data audited by foreign auditing organ, noted the name of such foreign organ 4. Other 104