HAINAN JINGLIANG
HOLDINGS CO., LTD.
ANNUAL REPORT 2021
March, 2022
HAINAN JINGLIANG HOLDINGS CO., LTD.
ANNUAL REPORT 2021
Part I Important Notes
This Summary is based on the full Annual Report of Hainan Jingliang Holdings Co., Ltd. (together with its
consolidated subsidiaries, the “Company”, except where the context otherwise requires). In order for a full
understanding of the Company’s operating results, financial position and future development plans, investors
should carefully read the aforesaid full text, which has been disclosed together with this Summary on the media
designated by the China Securities Regulatory Commission (the “CSRC”).
All the Company’s Directors have attended the Board meeting for the review of this Report and its summary.
Independent auditor’s modified opinion:
□ Applicable √ Not applicable
Board-approved final cash and/or stock dividend plan for ordinary shareholders for the Reporting Period:
□ Applicable √ Not applicable
The Company has no final dividend plan, either in the form of cash or stock.
Board-approved final cash and/or stock dividend plan for preferred shareholders for the Reporting Period:
□ Applicable √ Not applicable
This Summary has been prepared in both Chinese and English. Should there be any discrepancies or
misunderstandings between the two versions, the Chinese version shall prevail.
Part II Key Corporate Information
1. Stock Profile
Stock name JLKG, JL-B Stock code 000505, 200505
Stock exchange for stock listing Shenzhen Stock Exchange
Contact information Board Secretary Securities Representative
Name Guan Ying Gao Deqiu
15/F, Jing Liang Building, NO. 16 East Third 15/F, Jing Liang Building, NO. 16 East Third
Address Ring Middle Road, Chaoyang District, Ring Middle Road, Chaoyang District,
Beijing Beijing
Fax 010-51672010 010-51672010
Tel. 010-51672130 010-51672029
Email address 1124387865@qq.com gaodeqiu_jl@163.com
2. Principal Activities or Products in the Reporting Period
The Company is principally engaged in oils and oilseeds processing and trading, as well as food processing. With
Hainan Jingliang Holdings Co., Ltd. Annual Report 2021
regard to oils processing and trading, the Company refines, bottles, markets, imports and exports raw oils upon
initial pressing. As for oilseeds, the Company presses, refines, bottles, markets, imports and exports oilseeds such
as sesame, soybean, corn germ, sunflower seeds and peanuts. The Company runs its oils and oilseeds processing
and trading business primarily in Beijing City, Tianjin City and Hebei Province under the brands of “Gu Chuan”,
“Lv Bao”, “Gu Bi”, “Huo Niao”, etc., with the main products being soybean oil, rapeseed oil, sunflower seed oil
and sesame oil and paste, among others. As for its food processing business, it primarily develops, produces and
markets snack food and bread under the brands of “Little Prince”, “MS Dong”, “Jianqiang De Tudou” and “Gu
Chuan”, among others, with the main products being potato chips, cakes and pastries and bread. The snack food
business covers all provinces and municipalities in China, while the bread business focuses on the
Beijing-Tianjin-Hebei region. In this regard, the Company is one of the major suppliers for KFC in North China.
According to the Industry Categorization Results of Listed Companies, the Company falls into the major industry
category of manufacturing—agri-food processing industry (code: C13). Specifically, the Company operates in the
vegetable oil processing segment, with its food processing business accounting for a large proportion in gross
profit. With respect to the vegetable oil processing industry, industrial integration has accelerated and
differentiation is increasingly evident, with minority oils such as sunflower seed oil, tea oil, corn oil and rice bran
oil seeing fast growth. In terms of the food processing industry, consumer needs have become increasingly diverse,
resulting in better and richer product offerings. Nonetheless, there are only a handful of major brands in the
industry, indicating great potential for industrial integration.
3. Key Financial Information
(1) Key Financial Information of the Past Three Years
Indicate by tick mark whether there is any retrospectively restated datum in the table below.
□ Yes √ No
Unit: RMB
Change of 31
31 December 2021 31 December 2020 December 2021 over 31 December 2019
31 December 2020 (%)
Total assets 6,046,600,058.90 5,695,504,493.73 6.16% 5,231,266,600.19
Equity attributable to the listed
2,915,802,291.05 2,710,571,543.53 7.57% 2,406,039,283.87
company’s shareholders
2021-over-2020
2021 2020 2019
change (%)
Operating revenue 11,763,093,835.56 8,741,749,912.11 34.56% 7,440,286,465.54
Net profit attributable to the listed
204,459,771.08 184,846,956.70 10.61% 133,341,925.75
company’s shareholders
Net profit attributable to the listed
company’s shareholders before 195,422,832.45 164,037,737.59 19.13% 104,483,092.09
exceptional items
Net cash generated from/used in
632,240,056.44 -246,540,910.08 356.44% 297,366,794.05
operating activities
Basic earnings per share 0.28 0.26 7.69% 0.19
Hainan Jingliang Holdings Co., Ltd. Annual Report 2021
(RMB/share)
Diluted earnings per share
0.28 0.26 7.69% 0.19
(RMB/share)
Weighted average return on equity
7.27% 7.17% 0.10% 5.70%
(%)
(2) Key Financial Information by Quarter
Unit: RMB
Q1 Q2 Q3 Q4
Operating revenue 2,338,783,061.35 2,989,463,774.48 2,987,496,084.26 3,447,350,915.47
Net profit attributable to the listed
36,585,077.36 51,743,120.55 39,778,852.22 76,352,720.95
company’s shareholders
Net profit attributable to the listed
company’s shareholders before 32,694,567.66 50,578,769.74 39,320,196.40 72,829,298.65
exceptional items
Net cash generated from/used in
274,757,224.16 3,093,221.29 534,327,111.43 -179,937,500.44
operating activities
Indicate by tick mark whether any of the quarterly financial data in the table above or their summations differs
materially from what have been disclosed in the Company’s quarterly or interim reports.
□ Yes √ No
4. Share Capital and Shareholder Information at the Period-End
(1) Numbers of Ordinary Shareholders and Preferred Shareholders with Resumed Voting Rights as well as
Holdings of Top 10 Shareholders
Unit: share
Number of preferred
Number of Number of
shareholders with
Number of ordinary preferred
resumed voting
ordinary shareholders at the shareholders
59,249 53,755 0 rights at the 0
shareholders at month-end prior to with resumed
month-end prior to
the period-end the disclosure of voting rights at
the disclosure of this
this Report the period-end
Report
Top 10 shareholders
Shareholdi Total shares Shares in pledge,
Nature of marked or frozen
Name of shareholder ng held at the Restricted shares held
shareholder
percentage period-end Status Shares
BEIJING GRAIN GROUP CO., State-owned
39.68% 288,439,561 0
LTD. legal person
BEIJING STATE-OWNED
CAPITAL OPERATION AND State-owned
6.67% 48,510,460 0
MANAGEMENT COMPANY legal person
LIMITED
Domestic
WANG YUECHENG natural 5.66% 41,159,887 41,159,887
person
Foreign
LI SHERYN ZHAN MING natural 0.71% 5,155,300 0
person
Hainan Jingliang Holdings Co., Ltd. Annual Report 2021
GOLD BUFFALO RUNYING
(TIANJIN) EQUITY
INVESTMENT FUND
MANAGEMENT CO., Other 0.40% 2,889,803 0
LTD.—GOLD BUFFALO
RUNYING (TIANJIN) EQUITY
INVESTMENT FUND (L.P.)
Domestic
MEI JIANYING natural 0.36% 2,604,203 0
person
Domestic
ZHANG XIAOXIA natural 0.27% 1,949,250 0
person
Domestic
WANG XIAOXING natural 0.23% 1,679,200 0
person
ORIENT SECURITIES （HONG Foreign
0.18% 1,330,400 0
KONG） LIMITED legal person
CITIC SECURITIES COMPANY
LIMITED－TIANHONG CHINA
SECURITIES FOOD AND
BEVERAGES TRADING Other 0.16% 1,197,700 0
OPEN-ENDED INDEX
SECURITIES INVESTMENT
FUND
① Beijing State-Owned Capital Operation and Management Center owns an
indirect 100% share of Beijing Grain Group Co., Ltd., and Beijing Grain Group
Related or acting-in-concert parties among the Co., Ltd. is the controlling shareholder of the Company (a 39.68% holding). ②
shareholders above Wang Yuecheng is a Deputy General Manager of the Company. Apart from that,
the Company does not know whether there are any other related parties or
acting-in-concert parties among the top 10 shareholders.
Shareholder Wang Xiaoxing holds 1,679,200 shares in the Company through his
Shareholders involved in securities margin
account of collateral securities for margin trading in Soochow Securities Co.,
trading (if any)
Ltd.
(2) Number of Preferred Shareholders and Shareholdings of Top 10 of Them
□ Applicable √ Not applicable
No preferred shareholders in the Reporting Period.
Hainan Jingliang Holdings Co., Ltd. Annual Report 2021
(3) Ownership and Control Relations between the Actual Controller and the Company
The State-Owned Assets Supervision and
Administration Commission of the People’s
Government of Beijing Municipality
100%
Beijing State-Owned Capital Operation
and Management Company Limited
100%
Beijing Capital Agribusiness Group Co.,
Ltd.
100%
Beijing Grain Group Co., Ltd.
39.68% 6.67%
Hainan Jingliang Holdings Co., Ltd.
5. Outstanding Bonds at the Date when this Report Was Authorized for Issue
□ Applicable √ Not applicable
Part III Significant Events
2021 marks the commencement of China’s “14th Five-Year Plan”, the 100th anniversary of the founding of the
Communist Party of China (the “CPC”), as well as the first year for the Company’s “Three-year Actions for
State-owned Enterprise Reform”, which is aimed to drive leapfrog growth. In the year, the Company closely
followed the general principle of seeking progress while keeping performance stable, adhered to the right path of
innovation, and managed to overcome multiple difficulties. With strong CPC leadership, the Company saw a good
start for the 14th Five-Year Plan period, with effective anti-pandemic actions, as well as a stabilizing and
improving development momentum.
For the year under review, the Company recorded operating revenue of RMB11.763 billion, up 34.56% year on
year; a gross profit of RMB315 million, up 10.56% year on year; a net profit attributable to the listed company’s
shareholders of RMB204 million, up 10.61% year on year; and earnings per share of RMB0.28, up 7.69% year on
year. As such, the objectives for the year were successfully accomplished.
No significant changes occurred to the Company’s operations in the Reporting Period.
Part VI 2021 Financial Statements
Consolidated Balance Sheet
Prepared by: Hainan Jingliang Holdings Co., Ltd. Monetary Unit: RMB Yuan
Items 31 December 2021 31 December 2020 Notes
Current Assets:
Monetary capital 507,144,668.45 335,466,169.61 VI.1
△Settlement reserves
△Loans to banks and other financial institutions
Transactional financial assets 40,377,048.08 63,478,071.73 VI.2
Derivative financial assets
Notes receivable 456,565.85 VI.3
Accounts receivable 82,694,094.62 92,245,667.60 VI.4
Receivables financing
Prepayment 87,803,762.15 282,343,218.05 VI.5
△Premium receivable
△Reinsurance accounts receivable
△Reinsurance reserves receivable
Other receivables 284,756,636.27 541,905,656.97 VI.6
Including: Interest receivable
Dividends receivable
△Buy-back financial assets
Inventory 1,903,372,572.18 1,225,083,742.26 VI.7
Contract assets
Held-for-sale assets
Non-current assets due within one year 156,139,100.00 VI.8
Other current assets 820,500,621.47 845,450,678.36 VI.9
Total current assets 3,882,788,503.22 3,386,429,770.43
Non-current assets:
△Loans and advances
Debt investment
Other debt investments
Long-term receivables
Long-term equity investment 230,799,437.53 217,762,487.79 VI.10
Other equity instruments investment 20,000,000.00 20,000,000.00 VI.11
Other non-current financial assets
Investment property 20,925,683.56 22,560,212.50 VI.12
Fixed assets 1,120,758,409.49 1,131,143,854.07 VI.13
Construction in process 11,220,840.10 28,458,413.67 VI.14
Productive biological assets
Oil-and-gas assets
Right-of-use assets 8,045,406.28 VI.15
Intangible assets 339,970,477.87 354,139,335.32 VI.16
Development expenditure
Goodwill 191,394,422.51 191,394,422.51 VI.17
Long-term deferred expenses 17,383,818.41 20,529,601.50 VI.18
Deferred income tax assets 13,571,063.19 3,346,814.27 VI.19
Other non-current assets 189,741,996.74 319,739,581.67 VI.20
Total non-current assets 2,163,811,555.68 2,309,074,723.30
Total assets 6,046,600,058.90 5,695,504,493.73
Consolidated Balance Sheet (Continued)
Prepared by: Hainan Jingliang Holdings Co., Ltd. Monetary Unit: RMB Yuan
Items 31 December 2021 31 December 2020 Notes
Current liabilities:
Short-term borrowings 1,521,669,601.35 1,497,414,079.05 VI.21
△Borrowings from central bank
△Loans from banks and other financial institutions
Transactional financial liabilities
Derivative financial liabilities 70,305,871.37 371,219,136.84 VI.22
Notes payable
Accounts payable 186,748,746.42 75,384,075.39 VI.23
Account collected in advance 996,173.41 1,087,874.02 VI.24
Contract liabilities 520,816,995.93 346,874,260.90 VI.25
△Financial assets sold under repurchase agreements
△Deposits from customers and interbank deposits
△Funds from securities trading brokerage business
△Funds from securities underwriting business
Employee payroll payable 42,130,650.49 33,345,136.94 VI.26
Taxes payable 104,347,852.69 50,884,214.64 VI.27
Other payables 73,985,586.39 72,292,881.24 VI.28
Including: Interest payable 21,082,795.47 21,082,795.47 VI.28
Dividends payable 3,213,302.88 11,013,302.88 VI.28
△Employee payroll payable
△Payables for reinsurance
Held-for-sale liabilities
Non-current liabilities due within one year 1,582,978.69 VI.29
Other current liabilities 22,994,553.60 8,319,696.79 VI.30
Total current liabilities 2,545,579,010.34 2,456,821,355.81
Non-current liabilities:
△Insurance contract reserves
Long-term borrowings 71,000,000.00 VI.31
Bonds payable
Including: Preferred stock
Perpetual capital bonds
Lease liabilities 1,694,702.62 VI.32
Long-term payables
Long-term payable to employees 5,677,134.00 5,677,134.00 VI.33
Estimated liabilities
Deferred income 65,244,499.48 68,716,699.34 VI.34
Deferred income tax liabilities 45,250,919.91 65,115,801.22 VI.19
Other non-current liabilities
Total non-current liabilities 188,867,256.01 139,509,634.56
Total liabilities 2,734,446,266.35 2,596,330,990.37
Owners' equity (or Shareholders' equity):
Capital stock 726,950,251.00 726,950,251.00 VI.35
Other equity instruments
Including: Preferred stock
Perpetual capital bonds
Capital reserves 1,675,918,350.95 1,674,828,350.95 VI.36
Less: treasury stock
Other comprehensive income -682,282.22 -363,258.66 VI.37
Special reserves
Surplus reserves 122,122,436.98 122,122,436.98 VI.38
△General risk reserve
Undistributed profit 391,493,534.34 187,033,763.26 VI.39
Total equity attributable to the parent company 2,915,802,291.05 2,710,571,543.53
Minority equity 396,351,501.50 388,601,959.83
Total owners' equity (or shareholders' equity) 3,312,153,792.55 3,099,173,503.36
Total liabilities and owners' equity (or shareholders' equity) 6,046,600,058.90 5,695,504,493.73
Balance Sheet
Prepared by: Hainan Jingliang Holdings Co., Ltd. Monetary Unit: RMB Yuan
Items December 31 2021 December 31 2020 Note
Current assets:
Monetary capital 1,533,187.04 1,523,322.79
△Settlement reserves - -
△Loans to banks and other financial institutions - -
Transactional financial assets - -
Derivative financial assets - -
Notes receivable - -
Accounts receivable 600.00 11,784.00 XVI.1
Receivables financing - -
Prepayment - 423,679.12
△Premium receivable - -
△Reinsurance accounts receivable - -
△Reinsurance reserves receivable - -
Other receivables 180,000,000.00 103,341.26
XVI.2
Including: Interest receivable - -
Dividends receivable - -
△Financial assets purchased under reverse repurchase agreements - -
Inventory - 3,775,954.85
Contract assets - -
Held-for-sale assets - -
Non-current assets due within one year - -
Other current assets 2,335,459.82 2,445,772.47
Total current assets 183,869,246.86 8,283,854.49
Non-current assets
△Loans and advances - -
Debt investment - -
Other debt investments - -
Long-term receivables - -
Long-term equity investment 2,626,437,846.24 2,626,437,846.24 XVI.3
Other equity instruments investment 20,000,000.00 20,000,000.00
Other non-current financial assets - -
Investment property 5,880,839.21 6,222,001.73
Fixed assets 6,009,399.58 2,809,083.51
Construction in process - -
Productive biological assets - -
Oil-and-gas assets - -
Right-of-use assets - -
Intangible assets 85,534.58 209,185.10
Development expenditure - -
Goodwill - -
Long-term deferred expenses - -
Deferred income tax assets - -
Other non-current assets - -
Total non-current assets 2,658,413,619.61 2,655,678,116.58
Total assets 2,842,282,866.47 2,663,961,971.07
Balance Sheet (Continued)
Prepared by: Hainan Jingliang Holdings Co., Ltd. Monetary Unit: RMB Yuan
Items December 31 2021 December 31 2020 Note
Current liabilities:
Short-term borrowings - -
△Borrowings from central bank - -
△Loans from banks and other financial institutions - -
Transactional financial liabilities - -
Derivative financial liabilities - -
Notes payable - -
Accounts payable - -
Account collected in advance 38,896.41 38,896.41
Contract liabilities - -
△Financial assets sold under repurchase agreements
△Deposits from customers and interbank deposits
△Funds from securities trading brokerage business
△Funds from securities underwriting business
Employee payroll payable 177,720.27 341,902.14
Taxes payable 977,825.28 1,037,881.62
Other payables 33,225,676.78 309,067,618.99
Including: Interest payable 21,082,795.47 21,082,795.47
Dividends payable 3,213,302.88 3,213,302.88
△Employee payroll payable
△Payables for reinsurance
Held-for-sale liabilities
Non-current liabilities due within one year
Other current liabilities
Total current liabilities 34,420,118.74 310,486,299.16
Non-current liabilities:
△Insurance contract reserves
Long-term borrowings
Bonds payable
Including: Preferred stock
Perpetual capital bonds
Lease liabilities
Long-term payables
Long-term payable to employees
Estimated liabilities
Deferred income
Deferred income tax liabilities
Other non-current liabilities
Total non-current liabilities
Total liabilities 34,420,118.74 310,486,299.16
Shareholder's equity: - -
Capital stock 726,950,251.00 726,950,251.00
Other equity instruments
Including: Preferred stock
Perpetual capital bonds
Capital reserves 2,380,234,900.84 2,379,144,900.84
Less: treasury stock
Other comprehensive income
Special reserves
Surplus reserves 109,487,064.39 109,487,064.39
△General risk reserve
Undistributed profit -408,809,468.50 -862,106,544.32
Total shareholder's equity 2,807,862,747.73 2,353,475,671.91
Total liabilities and shareholder's equity 2,842,282,866.47 2,663,961,971.07
Consolidated Income Statement
Prepared by: Hainan Jingliang Holdings Co., Ltd. Year 2021 Monetary Unit: RMB Yuan
Items Amount for the current period Amount for the prior period Note
I. Total operating income 11,763,093,835.56 8,741,749,912.11
Including: Operating income 11,763,093,835.56 8,741,749,912.11 VI.40
△Interest income
△Premiums earned
△Fee and commission income
II. Total operating cost 11,440,200,537.43 8,493,126,170.72
Including: Operating cost 11,037,154,469.50 8,090,847,245.42 VI.40
△Interest expenses
△Fee and commission expenses
△Surrenders
△Net claims paid
△Net appropriation for insurance contracts reserves
△Dividend expenses for policyholders
△Reinsurance expenditures
Tax and surcharges 23,788,999.87 23,182,521.26 VI.41
Selling expenses 147,316,118.24 168,538,310.92 VI.42
Administration expenses 198,767,892.19 179,538,728.93 VI.43
Research and development expenses 12,049,947.96 9,903,221.93 VI.44
Financial expenses 21,123,109.67 21,116,142.26 VI.45
Including: interest expenses 42,302,007.06 31,742,996.45 VI.45
Interest income 26,216,178.46 16,035,923.84 VI.45
Add: Other income 14,535,083.32 16,222,504.88 VI.46
Income from investment (Losses shall be filled in with “-”) 44,039,777.71 37,875,880.38 VI.47
Including: income from investment on joint venture and cooperative enterprise 37,822,580.24 19,542,664.00 VI.47
Income from derecognition of financial assets measured at amortized cost
△Income from exchange(Losses shall be filled in with “-”) - -
Income from net exposure hedging(Losses shall be filled in with “-”)
Income from changes in fair value (Losses shall be filled in with “-”) -66,667,420.88 -16,467,791.36 VI.48
Credit impairment loss(Losses shall be filled in with “-”) -539,523.46 251,710.19 VI.49
Income from assets impairment(Losses shall be filled in with “-”) -306,388.07 -63,449.10 VI.50
Income from asset disposal (Losses shall be filled in with “-”) -208,369.12 38,752.37 VI.51
III. Operating profit (Losses shall be filled in with “-”) 313,746,457.63 286,481,348.75
Add: non-operating income 2,067,373.20 746,589.42 VI.52
Less: non-operating expenditure 328,641.29 1,888,144.99 VI.53
IV. Total profit (Total losses shall be filled in with “-”) 315,485,189.54 285,339,793.18
Less: income tax expense 76,251,467.60 66,115,298.62 VI.54
V. Net profit (Net loss shall be filled in with “-”) 239,233,721.94 219,224,494.56
Including: net profit of the merged party before the merger
(I) Classified by operations continuity:
1. Net profit from continuing operations (Net loss shall be filled in with “-”) 239,233,721.94 219,224,494.56
2. Net profit from discontinuing operations (Net loss shall be filled in with “-”)
(II) Classified by ownership attribution:
1、Net profit attributable to shareholders of the parent company (Net loss shall be filled in
204,459,771.08 184,846,956.70
with “-”)
2、Minority interest income (Net loss shall be filled in with “-”) 34,773,950.86 34,377,537.86
VI. Net of tax from other comprehensive income -319,023.56 -630,886.80
Net of tax from other comprehensive income attributable to shareholders of the parent
-319,023.56 -630,886.80
company
1.Other comprehensive income that cannot be reclassified into the profit and loss - -
（1）Remeasure changes in defined benefit plans - -
（2）Other comprehensive income that cannot be transferred to gains and losses under the
- -
equity method
（3）Changes in fair value of other equity instrument investments -
（4）Changes in the fair value of the company's own credit risk -
2.Other comprehensive income that will be reclassified into the profit and loss -319,023.56 -630,886.80
（1）Other comprehensive income that can be transferred to gains and losses under the
-105,630.50 -81,510.00
equity method
（2）Changes in fair value of other debt investments -
（3）Reclassification of financial assets included in other comprehensive income -
（4）Provision for credit impairment of other debt investments -
（5）Cash flow hedge reserve -
（6）Balance arising from the translation of foreign currency -213,393.06 -549,376.80
（7）Other -
Net of tax from other comprehensive income attributable to minority shareholder -
VII. Total comprehensive income 238,914,698.38 218,593,607.76
Total comprehensive income attributable to shareholders of the parent company 204,140,747.52 184,216,069.90
Total comprehensive income attributable to minority shareholder 34,773,950.86 34,377,537.86
VIII. Earnings per share:
(I) Basic earnings per share 0.28 0.26
(II) Diluted earnings per share 0.28 0.26
Income Statement
Prepared by: Hainan Jingliang Holdings Co., Ltd. Year 2021 Monetary Unit: RMB Yuan
Items Amount for the current period Amount for the prior period Note
I. Total operating income 591,060.56 1,181,687.83
Including: operating income 591,060.56 1,181,687.83 XVI.4
△Interest income - -
△Earned premium - -
△Fee and commission income - -
II. Total operating cost 9,311,844.39 26,118,381.35
Including: operating cost 341,162.52 - XVI.4
△Interest expenses - -
△Fee and commission expenses - -
△Surrenders - -
△Net claims paid - -
△Net appropriation for insurance contracts reserves - -
△Dividend expenses for policyholders - -
△Reinsurance expenditures - -
Tax and surcharges 259,377.02 151,241.71
Selling expenses - -
Administration expenses 8,710,846.48 25,988,631.19
Research and development expenses - -
Financial expenses 458.37 -21,491.55
Including: interest expenses - -
Interest income 2,566.23 26,478.83
Add: Other income 84,564.61 79,821.19
Income from investment (Losses shall be filled in with “-”) 461,597,751.35 206,400,562.23 XVI.5
Including: income from investment on joint venture and cooperative enterprise - -
Income from derecognition of financial assets measured at amortized cost (Losses shall
be filled in with “-”)
△Income from exchange(Losses shall be filled in with “-”) - -
Income from net exposure hedging(Losses shall be filled in with “-”)
Income from changes in fair value (Losses shall be filled in with “-”) - -
Credit impairment loss(Losses shall be filled in with “-”) -99,118.26 -33,884.15
Income from assets impairment(Losses shall be filled in with “-”) - -
Income from asset disposal (Losses shall be filled in with “-”) -24,042.07 -
III. Total profit (Total losses shall be filled in with “-”) 452,838,371.80 181,509,805.75
Add: non-operating income 458,704.02 4,001.44
Less: non-operating expenditure - 1,015,288.35
IV. Total profit (Total losses shall be filled in with “-”) 453,297,075.82 180,498,518.84
Less: income tax expense - -
V. Net profit (Net loss shall be filled in with “-”) 453,297,075.82 180,498,518.84
(I) Net profit from continuing operations (Net loss shall be filled in with “-”) 453,297,075.82 180,498,518.84
(II) Net profit from discontinuing operations (Net loss shall be filled in with “-”) - -
VI. Net of tax from other comprehensive income - -
(I) Other comprehensive income that cannot be reclassified into the profit and loss - -
1.Other comprehensive income that cannot be reclassified into the profit and loss - -
2. Other comprehensive income that cannot be transferred to gains and losses under
- -
the equity method
（3）Changes in fair value of other equity instrument investments
（4）Changes in the fair value of the company's own credit risk
(II) Other comprehensive income that will be reclassified into the profit and loss - -
（1）Other comprehensive income that can be transferred to gains and losses under
- -
the equity method
（2）Changes in fair value of other debt investments
（3）Reclassification of financial assets included in other comprehensive income
（4）Provision for credit impairment of other debt investments
（5）Cash flow hedge reserve - -
（6）Balance arising from the translation of foreign currency - -
（7）Other
VII. Total comprehensive income 453,297,075.82 180,498,518.84
VIII. Earnings per share
(I) Basic earnings per share - -
(II) Diluted earnings per share - -
Consolidated Cash Flow Statement
Prepared by: Hainan Jingliang Holdings Co., Ltd. Year 2021 Monetary Unit: RMB Yuan
Items Amount for the current period Amount for the prior period Note
I. Cash Flows from Operating Activities:
Cash Receipts from Sales of Goods or Rendering of Services 12,849,760,935.34 9,385,571,737.86
△Net increase in customer deposits and due to banks and other
- -
financial institutions
△Net increase in borrowings from the Central Bank - -
△Net increase in borrowings from other financial institutions - -
△Cash received for insurance premium - -
△Net cash received from reinsurance contracts - -
△Net increase in deposits and investments from policyholders - -
△Cash received for interest, fee and commission - -
△Net increase in borrowings from banks - -
△Net cash increase under repurchase agreements - -
△Net increase received from securities trading brokerage business
Tax Refund Receipts 11,281,074.60 14,262,674.77
Other Cash Receipts Concerning Operating Activities 1,593,774,303.16 963,876,029.48 VI.56
Subtotal of Cash Inflows from Operating Activities 14,454,816,313.10 10,363,710,442.11
Cash Paid for Purchase of Goods and Accepting Services 11,555,020,531.14 8,473,107,195.86
△Net increase in loans and advances to customers
△Net increase in deposit in the Central Bank and due from banks
and other financial institutions
△Cash paid for claims in insurance contracts
△Net increase in loans to banks and other financial institutions
△Cash paid for interest, fee and commission
△Cash paid for dividends for policyholders
Cash Paid to and for Employees 343,905,871.99 307,592,571.93
Taxes and Fees Paid 196,473,475.29 179,390,552.66
Other Cash Paid Concerning Operating Activities 1,727,176,378.24 1,650,161,031.74 VI.56
Subtotal of Cash Outflows from Operating Activities 13,822,576,256.66 10,610,251,352.19
Net Cash Flows from Operating Activities 632,240,056.44 -246,540,910.08 VI.57
II. Cash Flows from Investment Activities:
Cash Receipts from Disinvestment 2,148,406,585.67 3,601,922,000.00
Cash Receipts from Returns on Investments 30,892,440.84 19,842,141.06
Net Cash from Disposal of Fixed Assets, Intangible Assets and Other
344,988.32 1,266,650.68
Long-term Assets
Net Cash Received by Disposal of Subsidiaries and Other Business - 5,000,000.00
Other Cash Receipts Concerning Investment Activities - 960,000.00 VI.56
Subtotal of Cash Inflows from Investment Activities 2,179,644,014.83 3,628,990,791.74
Cash Paid for Purchase and Construction of Fixed Assets, Intangible
66,831,643.32 37,391,421.93
Assets and Other Long-term Assets
Cash Paid for Investments 2,591,605,029.22 3,556,280,248.53
△Net increase in mortgage loans
Net Cash Paid for obtaining Subsidiaries and Other Business Units
Other Cash Paid Concerning Investment Activities
Subtotal of Cash Outflows from Investment Activities 2,658,436,672.54 3,593,671,670.46
Net Cash Flows from Investment Activities -478,792,657.71 35,319,121.28
III. Cash Flows from Financing Activities:
Cash Receipts from Accepting Investment - -
Including: Cash Received by Subsidiaries Absorbing the Investment from Minority Shareholders - -
Cash Receipts from Borrowings 3,597,869,836.82 2,552,237,354.30
Other Cash Receipts Concerning Financing Activities 1,090,000.00 - VI.56
Subtotal of Cash Inflows from Financing Activities 3,598,959,836.82 2,552,237,354.30
Cash Paid for Repayment of Debts 3,501,459,721.50 2,385,384,073.90
Cash Paid for Distribution of Dividends, Profits or Repayment of Interests 77,126,416.25 50,390,323.04
Including: Dividends and Profits Paid by Subsidiaries to Minority Shareholders 27,054,652.03 3,713,626.89
Other Cash Paid Concerning Financing Activities 937,516.52 104,730,266.66 VI.56
Subtotal of Cash Outflows from Financing Activities 3,579,523,654.27 2,540,504,663.60
Net Cash Flows from Financing Activities 19,436,182.55 11,732,690.70
IV. Exchange Rate Fluctuation Consequences on Cash and
-343,788.00 -21,219,661.70
Cash Equivalents
V. Net Increase in Cash and Cash Equivalents 172,539,793.28 -220,708,759.80 VI.57
Add: Opening Balance of Cash and Cash Equivalents 334,389,017.41 555,097,777.21 VI.57
VI. Closing Balance of Cash and Cash Equivalents 506,928,810.69 334,389,017.41 VI.57
Statement of Cash Flows
Prepared by: Hainan Jingliang Holdings Co., Ltd. Year 2021 Monetary Unit: RMB Yuan
Items Amount for the current period Amount for the prior period Note
I. Cash Flows from Operating Activities:
Cash Receipts from Sales of Goods or Rendering of Services - 540,121.28
△Net increase in customer deposits and due to banks and other financial institutions - -
△Net increase in borrowings from the Central Bank - -
△Net increase in borrowings from other financial institutions - -
△Cash received for insurance premium - -
△Net cash received from reinsurance contracts - -
△Net increase in deposits and investments from policyholders - -
△Cash received for interest, fee and commission - -
△Net increase in borrowings from banks - -
△Net cash increase under repurchase agreements - -
△Net increase received from securities trading brokerage business
Tax Refund Receipts - -
Other Cash Receipts Concerning Operating Activities 6,021,876.55 63,468,858.85
Subtotal of Cash Inflows from Operating Activities 6,021,876.55 64,008,980.13
Cash Paid for Purchase of Goods and Accepting Services - -
△Net increase in loans and advances to customers - -
△Net increase in deposit in the Central Bank and due from banks and other financial institutions - -
△Cash paid for claims in insurance contracts - -
△Net increase in loans to banks and other financial institutions
△Cash paid for interest, fee and commission - -
△Cash paid for dividends for policyholders - -
Cash Paid to and for Employees 4,083,376.46 20,082,555.72
Taxes and Fees Paid 253,557.02 390,600.97
Other Cash Paid Concerning Operating Activities 3,463,536.06 251,832,365.29
Subtotal of Cash Outflows from Operating Activities 7,800,469.54 272,305,521.98
Net Cash Flows from Operating Activities -1,778,592.99 -208,296,541.85
II. Cash Flows from Investment Activities:
Cash Receipts from Disinvestment - -
Cash Receipts from Returns on Investments 461,597,751.35 206,400,562.23
Net Cash from Disposal of Fixed Assets, Intangible Assets and Other Long-term Assets 50,200.00 291,000.00
Net Cash Received by Disposal of Subsidiaries and Other Business Units - -
Other Cash Receipts Concerning Investment Activities - -
Subtotal of Cash Inflows from Investment Activities 461,647,951.35 206,691,562.23
Cash Paid for Purchase and Construction of Fixed Assets, Intangible Assets and Other Long-term Assets 89,800.00 407,799.78
Cash Paid for Investments - -
△Net increase in mortgage loans - -
Net Cash Paid for obtaining Subsidiaries and Other Business Units - -
Other Cash Paid Concerning Investment Activities 180,000,000.00 -
Subtotal of Cash Outflows from Investment Activities 180,089,800.00 407,799.78
Net Cash Flows from Investment Activities 281,558,151.35 206,283,762.45
III. Cash Flows from Financing Activities:
Cash Receipts from Accepting Investment - -
Including: Cash Received by Subsidiaries Absorbing the Investment from Minority Shareholders - -
Cash Receipts from Borrowings - -
Other Cash Receipts Concerning Financing Activities 1,090,000.00 -
Subtotal of Cash Inflows from Financing Activities 1,090,000.00 -
Cash Paid for Repayment of Debts - -
Cash Paid for Distribution of Dividends, Profits or Repayment of Interests - -
Including: Dividends and Profits Paid by Subsidiaries to Minority Shareholders - -
Other Cash Paid Concerning Financing Activities 280,859,694.11 -
Subtotal of Cash Outflows from Financing Activities 280,859,694.11 -
Net Cash Flows from Financing Activities -279,769,694.11 -
IV. Exchange Rate Fluctuation Consequences on Cash and Cash Equivalents - -
V. Net Increase in Cash and Cash Equivalents 9,864.25 -2,012,779.40
Add: Opening Balance of Cash and Cash Equivalents 1,523,322.79 3,536,102.19
VI. Closing Balance of Cash and Cash Equivalents 1,533,187.04 1,523,322.79
Consolidated Statement of Changes in Equity
Prepared by: Hainan Jingliang Holdings Co., Ltd. Year 2021 Monetary Unit: RMB Yuan
Current Amount
Shareholder's Equity attributable to the Parent Company
Items Total shareholders'
Other equity instruments Other Minority equity
Less: treasury △General risk equities
Capital stock Capital reserve comprehensive Special reserve Surplus reserve Undistributed profit Others Subtotal
Preferred stockPerpetual bond Others stock reserve
income
I. Year-end balance of last year 726,950,251.00 1,674,828,350.95 - -363,258.66 - 122,122,436.98 - 187,033,763.26 - 2,710,571,543.53 388,601,959.83 3,099,173,503.36
Add: changes in accounting policies - - -
Correction of prior period errors - - -
Merger of enterprises under the same control - -
Other - - -
II. Balance at beginning of current year 726,950,251.00 - - - 1,674,828,350.95 - -363,258.66 - 122,122,436.98 - 187,033,763.26 - 2,710,571,543.53 388,601,959.83 3,099,173,503.36
III. Increases and decreases of current year
- - - - 1,090,000.00 - -319,023.56 - - - 204,459,771.08 - 205,230,747.52 7,749,541.67 212,980,289.19
(Decrease shall be filled in with “-”)
(I) Total comprehensive income -319,023.56 204,459,771.08 204,140,747.52 34,773,950.86 238,914,698.38
(II) Investment of shareholders and capital
- - - - 1,090,000.00 - - - - - - - 1,090,000.00 - 1,090,000.00
reduction
1. Common equity invested by shareholders - -
2. Capital invested by other equity instruments
- -
holders
3. The amount of shares recorded into the
- -
shareholder's equity
4. Others 1,090,000.00 1,090,000.00 1,090,000.00
(III) Distribution of profits - - - - - - - - - - - - - -27,024,409.19 -27,024,409.19
1. Withdrawal of surplus reserves - -
2. Withdrawal of general risk reserve - -
3. Distribution to shareholders - -27,024,409.19 -27,024,409.19
4. Others - -
(IV) Inner carrying-over of shareholders' equities - - - - - - - - - - - - - - -
1. Capital reserve converted into capital (or capital
- -
stock)
2. Surplus public accumulation converted into
- -
capital (or capital stock)
3. Surplus public accumulation loss remedy - -
4. Change in defined benefit plan carried forward
- -
to retained earnings
5.Other comprehensive income carried forward to
- -
retained earnings
6. Others - -
(V) Special reserve - - - - - - - - - - - - - - -
1. Withdrawal for current period - -
2. Use for current period - -
(VI) Others - -
IV. Closing balance of current year 726,950,251.00 - - - 1,675,918,350.95 - -682,282.22 - 122,122,436.98 - 391,493,534.34 - 2,915,802,291.05 396,351,501.50 3,312,153,792.55
Consolidated Statement of Changes in Equity (Continued)
Prepared by: Hainan Jingliang Holdings Co., Ltd. Year 2021 Monetary Unit: RMB Yuan
Amount of Last Period
Shareholder's Equity attributable to the Parent Company
Items Total shareholders'
Other equity instruments Other Minority equity
Less: treasury △General risk equities
Capital stock Capital reserve comprehensive Special reserve Surplus reserve Undistributed profit Others Subtotal
Preferred stock bondOthers stock reserve
income
I. Year-end balance of last year 685,790,364.00 1,595,672,048.19 - 267,628.14 - 122,122,436.98 - 2,186,806.56 - 2,406,039,283.87 585,056,356.90 2,991,095,640.77
Add: changes in accounting policies - -
Correction of prior period errors - -
Merger of enterprises under the same control - -
Other - -
II. Balance at beginning of current year 685,790,364.00 - - - 1,595,672,048.19 - 267,628.14 - 122,122,436.98 - 2,186,806.56 - 2,406,039,283.87 585,056,356.90 2,991,095,640.77
III. Increases and decreases of current year
41,159,887.00 - - - 79,156,302.76 - -630,886.80 - - - 184,846,956.70 - 304,532,259.66 -196,454,397.07 108,077,862.59
(Decrease shall be filled in with “-”)
(I) Total comprehensive income - - - -630,886.80 - - 184,846,956.70 - 184,216,069.90 34,377,537.86 218,593,607.76
(II) Investment of shareholders and capital
41,159,887.00 - - - 79,156,302.76 - - - - - - - 120,316,189.76 -227,118,308.04 -106,802,118.28
reduction
1. Common equity invested by shareholders 41,159,887.00 205,757,432.13 246,917,319.13 246,917,319.13
2. Capital invested by other equity instruments
- -
holders
3. The amount of shares recorded into the
- -
shareholder's equity
4. Others -126,601,129.37 -126,601,129.37 -227,118,308.04 -353,719,437.41
(III) Distribution of profits - - - - - - - - - - - - -3,713,626.89 -3,713,626.89
1. Withdrawal of surplus reserves - -
2. Withdrawal of general risk reserve - -
3. Distribution to shareholders - -3,713,626.89 -3,713,626.89
4. Others - -
(IV) Inner carrying-over of shareholders' equities - - - - - - - - - - - - - - -
1. Capital reserve converted into capital (or capital
- -
stock)
2. Surplus public accumulation converted into
- -
capital (or capital stock)
3. Surplus public accumulation loss remedy - -
4. Change in defined benefit plan carried forward
- -
to retained earnings
5.Other comprehensive income carried forward to
- -
retained earnings
6. Others - -
(V) Special reserve - - - - - - - - - - - - - - -
1. Withdrawal for current period - -
2. Use for current period - -
(VI) Others - -
IV. Closing balance of current year 726,950,251.00 - - - 1,674,828,350.95 - -363,258.66 - 122,122,436.98 - 187,033,763.26 - 2,710,571,543.53 388,601,959.83 3,099,173,503.36
Statement of Changes in Equity
Prepared by: Hainan Jingliang Holdings Co., Ltd. Year 2021 Monetary Unit: RMB Yuan
Current Amount
Other equity instruments
Items Other
Less: treasury △General risk Total shareholders'
Capital stock Capital reserve comprehensive Special reserve Surplus reserve Undistributed profit
Preferred Perpetual stock reserve equities
Others income
stock bond
I. Year-end balance of last year 726,950,251.00 2,379,144,900.84 - - - 109,487,064.39 - -862,106,544.32 2,353,475,671.91
Add: changes in accounting policies - - - - - - - - -
Correction of prior period errors - - - - - - - - -
Other - - - - - - - - -
II. Balance at beginning of current year 726,950,251.00 - - - 2,379,144,900.84 - - - 109,487,064.39 - -862,106,544.32 2,353,475,671.91
III. Increases and decreases of current year (Decrease
- - - - 1,090,000.00 - - - - - 453,297,075.82 454,387,075.82
shall be filled in with “-”)
(I) Total comprehensive income - - - - - - - 453,297,075.82 453,297,075.82
(II) Investment of shareholders and capital reduction - - - - 1,090,000.00 - - - - - - 1,090,000.00
1. Common equity invested by shareholders - - - - - - - - -
2. Capital invested by other equity instruments holders - - - - - - - - -
3. The amount of shares recorded into the shareholder's
- - - - - - - - -
equity
4. Others - 1,090,000.00 - - - - - - 1,090,000.00
(III) Distribution of profits - - - - - - - - - - - -
1. Withdrawal of surplus reserves - - - - - - - - -
2. Withdrawal of general risk reserve - - - - - - - - -
3. Distribution to shareholders - - - - - - - - -
4. Others - - - - - - - - -
(IV) Inner carrying-over of shareholders' equities - - - - - - - - - - - -
1. Capital reserve converted into capital (or capital stock) - - - - - - - - -
2. Surplus public accumulation converted into capital (or
- - - - - - - - -
capital stock)
3. Surplus public accumulation loss remedy - - - - - - - - -
4. Change in defined benefit plan carried forward to
- - - - - - - - -
retained earnings
5.Other comprehensive income carried forward to
-
retained earnings
6. Others - - - - - - - - -
(V) Withdrawal and use of Special reserve - - - - - - - - - - - -
1. Withdrawal for current period - - - - - - - - -
2. Use for current period - - - - - - - - -
(VI) Others -
IV. Closing balance of current year 726,950,251.00 - - - 2,380,234,900.84 - - - 109,487,064.39 - -408,809,468.50 2,807,862,747.73
Statement of Changes in Equity (Continued)
Prepared by: Hainan Jingliang Holdings Co., Ltd. Year 2021 Monetary Unit: RMB Yuan
Amount of Last Period
Other equity instruments
Items Other
Less: treasury Special △General risk Total shareholders'
Capital stock Capital reserve comprehensive Surplus reserve Undistributed profit
Preferred Perpetual stock reserve reserve equities
Others income
stock bond
I. Year-end balance of last year 685,790,364.00 2,173,387,468.71 - - - 109,487,064.39 - -1,042,605,063.16 1,926,059,833.94
Add: changes in accounting policies - - - - - - - - -
Correction of prior period errors - - - - - - - - -
Other - - - - - - - - -
II. Balance at beginning of current year 685,790,364.00 - - - 2,173,387,468.71 - - - 109,487,064.39 - -1,042,605,063.16 1,926,059,833.94
III. Increases and decreases of current year (Decrease
41,159,887.00 - - - 205,757,432.13 - - - - - 180,498,518.84 427,415,837.97
shall be filled in with “-”)
(I) Total comprehensive income - - - - - - - 180,498,518.84 180,498,518.84
(II) Investment of shareholders and capital reduction 41,159,887.00 - - - 205,757,432.13 - - - - - - 246,917,319.13
1. Common equity invested by shareholders 41,159,887.00 205,757,432.13 - - - - - - 246,917,319.13
2. Capital invested by other equity instruments holders - - - - - - - - -
3. The amount of shares recorded into the shareholder's
- - - - - - - - -
equity
4. Others - - - - - - - - -
(III) Distribution of profits - - - - - - - - - - - -
1. Withdrawal of surplus reserves - - - - - - - - -
2. Withdrawal of general risk reserve - - - - - - - - -
3. Distribution to shareholders - - - - - - - - -
4. Others - - - - - - - - -
(IV) Inner carrying-over of shareholders' equities - - - - - - - - - - - -
1. Capital reserve converted into capital (or capital stock) - - - - - - - - -
2. Surplus public accumulation converted into capital (or
- - - - - - - - -
capital stock)
3. Surplus public accumulation loss remedy - - - - - - - - -
4. Change in defined benefit plan carried forward to
- - - - - - - - -
retained earnings
5.Other comprehensive income carried forward to
-
retained earnings
6. Others - - - - - - - - -
(V) Withdrawal and use of Special reserve - - - - - - - - - - - -
1. Withdrawal for current period - - - - - - - - -
2. Use for current period - - - - - - - - -
(VI) Others -
IV. Closing balance of current year 726,950,251.00 - - - 2,379,144,900.84 - - - 109,487,064.39 - -862,106,544.32 2,353,475,671.91
Hainan Jingliang Holdings Co., Ltd.
Notes to the 2021 Financial Statements
(Unless otherwise stated, the amount unit is RMB Yuan)
I. Basic Information of the Company
1. Place of incorporation, form of organization and head office address
Hainan Jingliang Holdings Co., Ltd. (hereinafter referred to as "the Company" or "Company" or
"Jingliang Holdings") is established in accordance with the Hainan Provincial People's Government
General Office QFBH (1992) No.1, approved by QY (1992) SGZ No. 6 Document of the People's
Bank of Hainan Province and re-registered by Hainan Pearl River Enterprise Company on January 11,
1992. The Company issued 81,880,000 shares in total upon re-registration, of which 60,793,600 shares
were converted from the net assets of the original company and 21,086,400 shares were newly issued.
And the name of the Company is Hainan Pearl River Enterprise Co., Ltd. The business license
registration number of the joint-stock company is 20128455-6, and the holding parent company
Guangzhou Pearl River Enterprise Group holds 36,393,600 shares, accounting for 44.45%. Approved
by ZGB (1992) No. 83 Document of the People's Bank of China in December 1992, the additional
21,086,400 shares were listed on the Shenzhen Stock Exchange for trading. The industry involved is
real estate.
On March 25, 1993, in response to QGBH (1993) No.028 of Hainan Provincial Leading Group
Office and SRYFZ (1993) No.099 of Shenzhen Special Economic Zone Branch of the People's Bank
of China, the Company increased its share capital by converting the original share capital into
139,196,000 shares (according to distribution of 10, delivery of 5 and transfer of 2), with the
controlling shareholder Guangzhou Pearl River Enterprises Group holding 48,969,120 shares
accounting for 35.18% at the end of 1993.
In 1994, the share capital was increased by 10 to 10, and the total share capital was 278,392,000
shares after the increase. The controlling shareholder, Guangzhou Pearl River Enterprises Group,
holds 97,938,240 shares, accounting for 35.18%.
In 1995, the issuance of 50,000,000 B Shares was approved by SZBF (1995) No.45 and SZBF
(1995) No.12. The share capital of the Company was increased by 10:1.5 on the basis of the share
capital after the additional B shares were issued, and the share capital of the Company after the
increase was 377,650,800 shares. The holding parent company, Guangzhou Pearl River Enterprises
Group, held 112,628,976 shares, accounting for 29.82% of the total.
In 1999, Guangzhou Pearl River Enterprises Group transferred all 112,628,976 shares to Beijing
Wanfa Real Estate Development Co., Ltd.. After the transfer of shares was completed in June 1999,
Beijing Wanfa Real Estate Development Co., Ltd. held 112,628,976 shares of the Company,
accounting for 29.82% of the total shares of the Company, and became the controlling shareholder of
the Company.
On January 10, 2000, the name of the Company was changed to Hainan Pearl River Holding Co.,
Ltd. and the Business License for Enterprise Legal Person was renewed by Industrial & Commerce
Administration Bureau of Hainan Province.
On August 17, 2006, the reform plan of the split share structure of the Company was implemented.
The Company transferred 49,094,604 shares of capital stock to all shareholders at the ratio of 10 to 1.3.
The original non-tradable shareholders transferred the increased shares to the tradable A-share holders.
Beijing Wanfa Real Estate Development Co., Ltd. reimbursed the consideration shares of the
non-tradable shareholders who have not expressly expressed their opinions. The converted total share
capital was 426,745,404 shares, and the original controlling shareholder Beijing Wanfa Real Estate
Development Co., Ltd. held 107,993,698 shares, accounting for 25.31%. Shareholders of non-tradable
shares repaid 3,289,780 shares in consideration of the split share structure in 2007. Shareholders of
non-tradable shares repaid 1,196,000 shares in consideration of the split share structure in 2009.
On 2 September 2016, Beijing Wanfa Real Estate Development Co., Ltd., the original controlling
shareholder, transferred all of its 112,479,478 shares to Beijing Grain Group Co., Ltd. (hereinafter
referred to as "Beijing Grain Group"). Upon completion of the share transfer in September 2016,
Beijing Grain Group Co., Ltd. held 112,479,478 shares, accounting for 26.36% of the total shares of
the Company. In November 2016, based on the confidence in the subject matter of the material asset
restructuring and the future development of the Company, Beijing Grain Group Co., Ltd. decided to
increase its shareholding through centralized bidding in the secondary market. After the increase, it
held 123,561,963 shares of the Company, accounting for 28.95% of the total number of shares, and
became the largest shareholder of the Company.
The Company determined July 31, 2017 as the delivery date of material assets in accordance with
the material assets restructuring plan and the delivery agreement. On September 14, 2017, approved
pursuant to the resolution of the Second Extraordinary General Meeting of Shareholders of the
Company on November 18, 2016 and the Approval Reply of the China Securities Regulatory
Commission dated July 28, 2017 On Approval of Hainan Pearl River Holding Co., Ltd. to Purchase
Assets and Raise Supporting Funds from Beijing Grain Group Co., Ltd. (ZJXK (2017) No.1391): 1)
The Company purchased assets from the original shareholders of Beijing Grain Food Co., Ltd.
(hereinafter referred to as Beijing Grain Food) by issuing 210,079,552 shares of the balance between
the transaction price of the injected assets and the assets to be purchased (the difference between the
transaction price of the injected assets and the assets to be purchased was RMB 1,699.5436 million
yuan). The par value in the issuance was RMB 1.00 per share and the issuance price was RMB 8.09 per
share; 2) The Company has issued 48,965,408 non-public shares of the Company to Beijing Grain
Group for the purpose of purchasing the supporting funds raised from the assets of the issuance of
shares. The par value per share of the Company was RMB1.00 and the issuance price was RMB8.82
per share. The shareholder Beijing Grain Group conducted subscription in monetary funds. Upon
completion of the issue, the registered capital was RMB 685,790,364.00 and the share capital was
RMB 685,790,364.00. Beijing Grain Group, which accounted for 42.06% of the total number of shares,
became the largest shareholder of the Company.
On November 21, 2019, with the approval of Beijing Shounong Food Group Co., Ltd. (Beijing
Shounong Food publish [2019] No. 212), Approval on the Plan of Purchasing Assets by Cash and
Issuing Shares of Hainan Jingliang Holdings Co., Ltd, On April , 2020, with the approval of Approval
of Hainan Jingliang Holding Co., Ltd. Issuance Shares to Wang Yuecheng to Purchase Assets by China
Securities Regulatory Commission [2020] No. 610, the company shall not issue more than 41,159,887
new shares in private offering to raise funds supporting the purchase of assets through the issued shares.
The Company and its subsidiary, Beijing Jingliang Food Co., Ltd., purchased the 25.1149% equity
stake of Zhejiang Little Prince by cash and issuance of shares.
As of December 31, 2021, the company has issued 726,950,251.00 shares, and the company's
share capital is 726,950,251.00 yuan; Uniform Social Credit Code: 914600002012845568;
Registration authority: Hainan Market Supervision Administration; Company type: Limited Company
(Listed, State-controlled); Registered address: F29, Dihao Building, Pearl River Square, Binhai
Avenue, Haikou City; Legal representative: Li Shaoling.
2. The nature of the Company's business and its main business activities
The Company belongs to manufacturing-agricultural and sideline food processing industry. Its
main business ativites mainly includes: food, beverages, agricultural and sideline products,
vegetable proteins and their products, organic fertilizers, microbial fertilizers, production and
marketing of agricultural fertilizers; land consolidation, soil remediation; agricultural comprehensive
planting development, animal husbandry and aquaculture, agricultural equipment production and
marketing; computer network technology, investment in communication projects, research and
development and application of high-tech products; investment and consultation of environmental
protection projects; animation, graphic design; import and export trade in goods and technology; rental
of own premises.
The Company and its subsidiaries are principally engaged in the processing, production and sales
of foodstuffs, agricultural and sideline products, grease, oils, and leisure foods.
3. The name of the parent company and the ultimate parent company.
The parent company of the company is Beijing Grain Group Co., Ltd., and the ultimate parent
company is Beijing shounong Food Group Co., Ltd.
4. The approval institution and the approval date of the financial statements.
These financial statements have been approved and reported by the Board of Directors of the
Company in its resolution dated March 29, 2022.
5. Consolidation scope
The consolidated scope of the consolidated financial statements of the company is determined on
the basis of control, including the financial statements of the company and all subsidiaries.
Subsidiaries refer to enterprises or entities controlled by the Company.
A total of 18 subsidiaries of the Company were included in the scope of consolidation on 31
December, 2021, as detailed in Note 8 "Interests in Other Entities". The consolidation scope of the
Company for the current period is same as the previous period as detailed in Note 7, "Change in
Consolidation Scope".
II. Preparation Basis for Financial Statements
1. Preparation Basis
Based on the assumption of going concern and according to actual transaction events, the
financial statements are prepared in accordance with the relevant provisions of Accounting Standard
for Business Enterprises and the following stated Significant Accounting Policies and Estimates.
2. Going concern
The Company has a going concern capability for 12 months from the end of the reporting period
and no material matters affecting the company's going concern capability were found. Therefore, the
financial statements are presented on a going concern basis is reasonable.
III. Significant Accounting Policies and Estimates
The Company and its subsidiaries are engaged in the processing, production and sales of food,
agricultural and sideline products, grease, oil and leisure food. According to the characteristics of
actual production and operation and the provisions of relevant accounting standards for business
enterprises, the Company and its subsidiaries have formulated a number of specific accounting
policies and accounting estimates for transactions and events such as revenue recognition. For details,
please refer to the descriptions in Note Ⅲ, 26 “Revenue". For descriptions of the significant
accounting judgments and estimates made by the management, please refer to Note Ⅲ, 32
“Significant Accounting Judgments and Estimates"
1. Statement of Compliance of Accounting Standards for Business Enterprises
The financial statements prepared by the Company based on the above preparation basis conform
to the requirements of the Accounting Standards for Business Enterprises and their application
guidelines, explanations and other relevant provisions (collectively referred to as "ASBE") and truly
and completely reflect the Company's financial status, operating results, cash flow and other relevant
information.
In addition, the preparation of this financial report refers to the Rules for Preparation and
Reporting Information Disclosure of Companies Offering Securities to the Public No.15-General
Provisions on Financial Reports revised by China Securities Regulatory Commission in 2014 and the
presentation and disclosure requirements in Notice on Matters Related to the Implementation of the
New Accounting Standards for Enterprises by Listed Companies (Accounting Department Letter
[2018] No. 453)
2. Accounting Period and Business Cycle
The accounting period of the Company is divided into an annual period and an interim period.
The accounting interim period refers to the reporting period shorter than a full accounting year. The
fiscal year of the Company adopts the Gregorian calendar year, that is, from January 1 to December 31
of each year.
The normal business cycle is the period from the time the Company purchases assets for
processing to the time when cash or cash equivalents are realized. The Company uses 12 months as an
business cycle and uses it as a liquidity classification standard for assets and liabilities.
3. Bookkeeping Standard Currency
RMB is the currency in the main economic environment in which the Company and its domestic
subsidiaries operate. The Company and its domestic subsidiaries use RMB as the bookkeeping
standard currency. The offshore subsidiaries of the Company determine USD as their bookkeeping
standard currency based on the currencies in the main economic environment in which they operate.
The currency used by the Company in preparing these financial statements is RMB.
4. The Accounting Treatment of Business Combination under the Same Control and
Different Control
Business Combination refers to the transaction or event in which two or more separate enterprises
are merged to form one reporting entity. Business combination can be divided into business
combination under the same control and business combination under different control.
(1) Business combination under the same control
Enterprises participating in the combination are ultimately controlled by the same party or
multiple parties before and after the combination, and the control is not temporary, so it is the business
combination under the same control. In case of business combination under the same control, the party
that obtains control of other enterprises participating in the combination on the combination date shall
be the combination party, and the other enterprises participating in the combination shall be the merged
party. The combination date refers to the date on which the combination party actually acquires control
over the merged party.
The assets and liabilities acquired by the combination party are measured at the book value of the
merged party at the date of consolidation, including goodwill that was formed during acquisition by
end controller . If the difference between the book value of the net assets acquired by the merging party
and the book value of the merged consideration (or the total par value of the issued shares) paid by the
merging party, and the capital reserve (share capital premium) shall be adjusted; If the capital reserve
(equity premium) is insufficient to offset, the retained earnings shall be adjusted.
The direct expenses incurred by the merging party for the purpose of business combination shall
be included in the profits and losses of the current period when they are incurred.
(2) Business combination under different control
If the enterprises participating in the merger are not ultimately controlled by the same party or
multiple parties before and after the merger, the enterprise merger is not under the same control. In case
of business combination under different control, the party that obtains control of other enterprises
participating in the combination on the date of purchase shall be the Purchaser, and the other
enterprises participating in the combination shall be the Purchasee. Purchase date means the date on
which the Purchaser actually acquires control of the Purchasee.
For business combination under different control, the merger cost includes the assets, liabilities
and fair value of equity securities issued by the Purchaser in order to obtain the control over the
Purchasee on the date of purchase, and the intermediary fees such as audit, legal service, appraisal and
consultation and other management fees for the enterprise merger are used to record into the profits
and losses of the current period when incurred. The transaction costs of equity or debt securities issued
by the Purchaser as a merger consideration are included in the initial recognition amount of the equity
or debt securities. Contingent consideration involved shall be included in the consolidation cost at its
fair value at the purchase date, and the consolidation goodwill shall be adjusted accordingly if new or
further evidence of the existence of circumstances at the purchase date appears within 12 months after
the purchase date and the adjustment or consideration is required. The consolidation cost incurred by
the Purchaser and the identifiable net assets acquired during the consolidation are measured at the fair
value at the date of purchase. The difference between the merger costs and the fair value shares of the
identifiable net assets of the Purchasee at the purchase date obtained in the merger is recognized as
goodwill. If the combined cost is less than the fair value of the identifiable net assets of the Purchasee
in the merger, first, the fair value of the identifiable assets, liabilities and contingent liabilities of the
Purchasee and the measurement of the consolidation cost shall be re-checked. If the consolidation cost
is still smaller than the fair value share of the identifiable net assets of the Purchased obtained in the
consolidation after the re-check, the difference shall be recorded into the profits and losses of the
current period.
When the Purchaser acquires the deductible temporary difference of the Purchasee, if it fails to
recognize the deferred income tax assets on the date of purchase because it does not meet the
recognition conditions for the deferred income tax, and within 12 months of the date of purchase, new
or further information is obtained indicating that the relevant circumstances at the purchase date
already exist and the economic benefits from the temporary difference deductible by the purchaser on
the purchase date are expected to be realized, the relevant deferred income tax assets shall be
recognized, and the goodwill shall be reduced. If the goodwill is not sufficiently offset, the difference
shall be recognized as the current profit or loss; In addition to the above circumstances, the deferred
income tax assets related to the enterprise merger are recognized and included in the current profits and
losses.
Through multi-transaction and step-by-step business combination under different control,
according to the Circular of the Ministry of Finance on Printing and Issuing the Interpretation of
Accounting Standards for Business Enterprises No.5 (CK (2012) No.19) and Article 51 of the
Accounting Standards for Business Enterprises No.33-Consolidated Financial Statements on the
judgment criteria of "package deal" (see 5 (2) of Note 3), it is determined whether the multiple
transactions belong to the "package deal". In the case of a "package deal", the accounting treatment
shall be performed with reference to the description in the preceding paragraphs of this section and
Note 3, 13 "Long-term Equity Investments"; If the transaction is not a "package deal", the accounting
treatment shall be distinguished between the individual financial statements and the consolidated
financial statements:
In the individual financial statements, the sum of the book value of the equity investment held by
the Purchaser prior to the purchase date and the cost of the new investment at the purchase date shall be
taken as the initial investment cost of the investment; Where the equity of the Purchased held before
the date of purchase involves other comprehensive income, the other consolidated income associated
with the investment is accounted for on the same basis as the assets or liabilities directly disposed of by
the Purchaser (i.e., except for the corresponding share in the change caused by the acquisition of the
net liability or net assets of the defined benefit plan remeasured in accordance with the equity method,
the rest is transferred to the current investment income).
In the consolidated financial statements, the equity of the Purchased held prior to the date of
purchase is remeasured according to the fair value of the equity at the date of purchase, and the
difference between the fair value and the carrying value is included in the investment income of the
current period; Where the equity of the Purchasee held before the date of purchase involves other
comprehensive income, other consolidated income related thereto shall be accounted for on the same
basis as the direct disposal of the relevant assets or liabilities by the Purchaser (i.e., except for the
corresponding share in the change caused by the acquisition of the net liability or net asset of the
defined benefit plan remeasured in accordance with the equity method, the rest is converted into the
investment income of the current period to which the acquisition date belongs).
5. Preparation Method of Consolidated Financial Statement
(1) Principles for determining the scope of the consolidated financial statement
The scope of consolidation of the consolidated financial statements is determined on a control
basis. Control means that the Company has the authority over the Investee, enjoys a variable return by
participating in the relevant activities of the Investee, and has the ability to use its authority over the
Investee to influence the amount of such return. The scope of the merger includes the Company and all
its subsidiaries. Subsidiary refers to the main body controlled by the Company.
The Company will re-evaluate the above control definitions once the relevant facts and
circumstances change, which results in the change of the relevant elements.
(2) Preparation method of consolidated financial statement
The Company begins to incorporate the net assets of the subsidiary and the actual control of the
production and operation decisions into the scope of the merger from the date when the subsidiary is
acquired; Cease to be included in the scope of the merger as of the date of loss of effective control. For
the subsidiaries disposed of, the operating results and cash flows prior to the date of disposal have been
appropriately included in the consolidated income statement and consolidated cash flow statement;
For subsidiaries disposed of in the current period, the opening amount of the consolidated balance
sheet is not adjusted. The operating results and cash flows of subsidiaries increased by consolidation
after purchase have been properly included in the consolidated income statement and consolidated
cash flow statement, and the opening and comparative amounts in the consolidated financial
statements have not been adjusted for subsidiaries that are not under the same control. The operating
results and cash flows of the subsidiaries increased by consolidation under the same control from the
beginning of the consolidation period to the consolidation date have been appropriately included in the
consolidated profit statement and consolidated cash flow statement, and the comparative amount of the
consolidated financial statements has been adjusted at the same time.
In the preparation of the consolidated financial statements, if the accounting policies or
accounting periods adopted by the subsidiaries are inconsistent with those adopted by the Company,
necessary adjustments shall be made to the financial statements of the subsidiaries in accordance with
the accounting policies and accounting periods of the Company. For subsidiaries acquired through
business combination under different control, the financial statements shall be adjusted on the basis of
the fair value of identifiable net assets at the date of purchase.
All significant transaction balances, transactions and unrealized profits within the Company are
offset at the time of preparation of the consolidated financial statements.
The shareholders' equity and the portion of the net profit or loss of the subsidiary that is not
owned by the Company for the current period are separately presented as minority shareholders' equity
and minority shareholders' profit or loss in the consolidated financial statements under shareholders'
equity and net profit. The shares of minority shareholders' equity in the net profits and losses of
subsidiaries for the current period are shown as "minority shareholders' profits and losses" under the
net profit item in the consolidated income statement. Losses shared by minority shareholders in a
subsidiary exceed the minority shareholders' share in the shareholders' equity of the subsidiary at the
beginning of the period, and still decrease by a number of shareholders' equity.
When the control of the original subsidiary is lost due to the disposal of part of the equity
investment or other reasons, the residual equity shall be revalued according to its fair value at the date
of loss of control. The sum of consideration obtained from the disposal of equity and the fair value of
the remaining equity minus the difference between the shares of the net assets of the original
subsidiary that shall be continuously calculated from the purchase date according to the original
shareholding proportion shall be included in the investment income of the current period of loss of
control. Other comprehensive income related to the equity investment of the original subsidiary, in the
event of loss of control, the accounting treatment is performed on the same basis as the direct disposal
of the relevant assets or liabilities by the Purchased (i.e. converted to current investment income,
except for changes resulting from the re-measurement of the net liabilities or net assets of the Defined
Benefit Plan in the original subsidiary). Thereafter, the residual equity shall be subsequently measured
in accordance with the relevant provisions of Accounting Standards for Business Enterprises
No.2-Long-term Equity Investment or Accounting Standards for Business Enterprises
No.22-Recognition and Measurement of Financial Instruments, as detailed in Note Ⅲ, 13-Long-term
Equity Investment or Note Ⅲ, 9-Financial Instruments.
If the Company disposes of the equity investment in subsidiaries step by step until it loses control
through multiple transactions. It is necessary to distinguish whether the transactions that dispose of the
equity investment in subsidiaries until it loses control belong to a package deal or not. The terms,
conditions and economic impact of the transactions for the disposal of equity investments in
subsidiaries are in accordance with one or more of the following circumstances and generally indicate
that multiple transactions should be accounted for as a package deal: ① These transactions were
entered into simultaneously or taking into account each other's influence; ② Only when these
transactions are taken together can a complete business result be achieved; ③ The occurrence of one
transaction depends on the occurrence of at least one other transaction; ④ It is not economical to
consider a transaction alone, but it is economical to consider it in conjunction with other transactions.
For transactions that are not part of the package deal, each transaction shall be accounted for in
accordance with the principles applicable to the "partial disposal of long-term equity investments in
subsidiaries without loss of control" (as detailed in 13 of Note Ⅲ) and the "loss of control over existing
subsidiaries as a result of the disposal of part of the equity investments or other reasons" (as detailed in
the preceding paragraph), as appropriate. If the transactions involving the disposal of equity
investments in subsidiaries until the loss of control belong to a package deal, the transactions shall be
accounted for as a transaction involving the disposal of subsidiaries and the loss of control; However,
the difference between each disposal price and the share of the subsidiary's net assets corresponding to
the disposal investment prior to the loss of control is recognized in the consolidated financial
statements as other consolidated gains and transferred to the profit or loss for the current period of loss
of control in the event of loss of control.
6. Classification of Joint Venture Arrangements and Accounting Treatment of Joint
Operation
A joint venture arrangement is an arrangement under the joint control of two or more participants.
The Company divides the joint venture arrangement into joint operation and joint venture in
accordance with the rights and obligations it enjoys in the joint venture arrangement. A joint operation
is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the
assets, and obligations for the liabilities, relating to the arrangement. A joint venture is a type of joint
arrangement whereby the parties that have joint control of the arrangement have rights to the net assets
of the joint venture.
The Company's investment in the joint venture is accounted for using the equity method, and shall
be treated in accordance with the accounting policy described in Note Ⅲ, 13 "Long-term Equity
Investment Accounted by the Equity Method".
The Company, as a joint venture party, recognizes the assets and liabilities held and assumed by
the Company separately, and recognizes the assets and liabilities jointly held and assumed by the
Company according to the shares of the Company; recognizes the revenue generated from the sale of
the share of joint operating output enjoyed by the Company; recognizes revenue generated from the
sale of output from joint operations on the basis of the Company's share; confirms the expenses
incurred by the Company individually and the expenses incurred by the joint operation according to
the shares of the Company.
When the Company invests or sells assets as a joint venture (such assets do not constitute business,
the same below), or purchases assets from the joint venture, the Company recognizes only the portion
of the profits and losses attributable to the other participants in the joint venture that arises from the
transaction prior to the sale of such assets to a third party. Where such assets are impaired in
accordance with the provisions of Accounting Standards for Business Enterprises No.8-Impairment of
Assets, the Company shall fully recognize such losses in the case where the assets are cast or sold by
the Company to joint operations; For the assets purchased by the Company from the joint operation,
the Company recognizes the losses according to the shares it assumes.
7. Determining Standards for Cash and Cash Equivalent
Cash and cash equivalents of the Company include cash on hand, deposits that can be readily
withdrawn on demand. Cash equivalents are investments held by the Company with a short term
(usually maturing within three months from the date of purchase), high liquidity, readily convertible to
known amounts of cash and which are subject to an insignificant risk of changes in value.
8. Foreign Currency Business and Translation of Foreign Currency Statements
(1) Translation method for foreign currency transaction
At the time of initial confirmation, the foreign currency transactions occurring in the Company
shall be converted into the bookkeeping functional currency amount at the spot exchange rate on the
trading day, but the foreign currency exchange business or transactions involving foreign currency
exchange occurring in the Company shall be converted into the bookkeeping functional currency
amount at the actual exchange rate.
(2) Translation method for foreign currency monetary items and foreign currency non-monetary
item
On the balance sheet date, the foreign currency monetary items are converted at the spot exchange
rate on the balance sheet date, and the exchange difference arising therefrom shall be: ① The
exchange difference arising from the special foreign currency borrowings related to the acquisition and
construction of assets eligible for capitalization shall be handled in accordance with the principle of
capitalization of borrowing costs; ② The exchange difference of the hedging instruments used for
effective hedging of the net investment in overseas operations (the difference is included in other
comprehensive income, and is not recognized as current profit or loss until the net investment is
disposed of); ③ Except for the amortized cost, the exchange differences arising from the changes in
the book balance of the available-for-sale monetary items in foreign currencies shall be included in the
other comprehensive income, and shall be included in the profits and losses of the current period.
Where the preparation of the consolidated financial statements involves overseas operations, if
there are foreign currency monetary items constituting net investment in overseas operations, the
exchange differences arising from exchange rate changes shall be included in other comprehensive
income; When disposing of overseas operations, the profits and losses shall be transferred to the
current disposal period.
Non-monetary items in foreign currencies measured at historical cost shall still be measured at the
bookkeeping amount in functional currency translated at the spot exchange rate on the transaction date.
For non-monetary items in foreign currencies measured at fair value, the spot exchange rate at the date
of fair value determination shall be adopted for conversion. The difference between the converted
amount in functional currency and the amount in original functional currency shall be treated as the
change in fair value (including the change in exchange rate), and shall be recorded into the profits and
losses of the current period or recognized as other comprehensive income.
(3) Translation method for financial statements in foreign currencies
Where the preparation of the consolidated financial statements involves overseas operations, if
there are foreign currency monetary items constituting net investment in overseas operations, the
exchange differences arising from exchange rate changes shall be as "foreign currency report
conversion difference" and be confirmed as other comprehensive income; When disposing of
overseas operations, the profits and losses shall be transferred to the current disposal period.
The foreign currency financial statements of overseas operations shall be converted into RMB
statements in the following ways: the assets and liabilities in the balance sheet shall be converted at
the spot exchange rate on the balance sheet date; Except for "undistributed profits", other items of
shareholders' equity shall be converted at the spot exchange rate at the time of occurrence. The
income and expense items in the profit statement shall be converted at the average exchange rate of
the current period on the date of transaction. The undistributed profit at the beginning of the period
shall be the undistributed profit at the end of the period converted from the previous year; The
undistributed profits at the end of the year shall be calculated and listed according to the converted
profits distribution items; The difference between the converted asset items and the total amount of
the liability items and shareholders' equity items shall be recognized as other comprehensive income
as the translation difference in the foreign currency statements. In case of disposal of overseas
operations and loss of control, the balance in translation of the foreign currency statements related to
the overseas operations as shown below in the shareholders' equity items in the balance sheet shall be
transferred to the profits and losses of the disposal period in whole or in proportion to the disposal of
the overseas operations.
Cash flows in foreign currencies and cash flows of overseas subsidiaries shall be converted at
the average exchange rate of the current period on the date of occurrence of the cash flows. The
effect of exchange rate changes on cash shall be presented separately in the statement of cash flows
as an reconciling item.
Opening amounts and prior-period actual amounts shall be shown on the basis of amounts
translated from the prior-period financial statements.
When disposing of all the owner's equity of the Company's overseas operations or losing the
control over overseas operations due to the disposal of part of the equity investment or for other
reasons, if the following items of shareholders' equity in the balance sheet are shown below, the
balance in translation of the foreign currency statement attributable to the owner's equity of the
parent company related to the overseas operation shall be transferred to the profits and losses of the
current disposal period.
In the event that the proportion of overseas business interests is reduced due to the disposal of
part of the equity investment or for other reasons, but the control over overseas business operations is
not lost, the balance in the translation of the foreign currency statements related to the disposal of
part of overseas business operations shall be attributed to minority shareholders' interests and shall
not be transferred to the profits and losses of the current period. When disposing of part of the equity
of an overseas operation as an associated enterprise or a joint venture, the balance of the translation
of the foreign currency statements related to the overseas operation shall be transferred into the
profits and losses of the current disposal period in the proportion of the overseas operation disposed
of.
9. Financial instruments
Financial instruments are the contracts that form the financial assets of one entity, and at the
same time form the financial liabilities or equity instruments of other entities.
(1) Classification, confirmation and measurement of financial assets
According to the business mode of managing financial assets and the contractual cash flow
characteristics of financial assets, the Company divides financial assets into: Financial assets
measured at amortized cost. Financial assets measured at fair value with changes included in other
comprehensive income. Financial assets that are measured at fair value and whose movements are
included in the current profits and losses.
Financial assets are measured at fair value at initial recognition. For financial assets measured at
fair value and whose changes are included in current profits and losses, relevant transaction costs are
directly included in current profits and losses. For other types of financial assets, relevant transaction
costs are included in the initial recognition amount. Accounts receivable or notes receivable arising
from the sale of products or the provision of labor services that do not contain or take into account
significant financing components shall be initially recognized by the Company in accordance with
the amount of consideration that the Company is expected to be entitled to receive.
① Financial assets measured at amortized cost
The Group measures financial assets at amortised cost if both of the following conditions are
met : the financial asset is held within a business model with the objective to hold financial assets in
order to collect contractual cash flows; the contractual terms of the financial asset give rise on
specified dates to cash flows that are solely payments of principal and interest on the principal
amount outstanding, that is, the cash flow generated on a specific date is only the payment of
principal and interest based on the unpaid principal amount. For such financial assets, the Company
adopts the effective interest rate method and carries out subsequent measurement according to
amortized cost. The profits or losses arising from amortization or impairment are included into the
current profits and losses.
② Financial assets measured at fair value with changes included in other comprehensive
income
The Group measures financial assets at fair value through other comprehensive income if both
of the following conditions are met: the financial asset is held within a business model with the
objective of both holding to collect contractual cash flows and selling; the contractual terms of the
financial asset give rise on specified dates to cash flows that are solely payments of principal and
interest on the principal amount outstanding. Interest income of such financial assets is recognised
based on effective interest method. The Company measures these financial assets at fair value and
their changes are included in other comprehensive income, but impairment loss or gain, exchange
gain or loss and interest income calculated according to the effective interest rate method are
included into the current profit and loss.
In addition, the Company designates some non tradable equity instrument investments as
financial assets measured at fair value with changes included in other comprehensive income. The
Company shall record the relevant dividend income of such financial assets into the current profits
and losses, and the change of fair value into other comprehensive income. When the financial asset is
derecognized, the accumulated gains or losses previously included in other comprehensive income
will be transferred from other comprehensive income to retained income and will not be included in
current profits and losses.
③ Fair value through Profit and Loss Financial assets
The Company classifies the above financial assets measured at amortized cost and financial
assets measured at fair value with changes included in other comprehensive income into financial
assets measured at fair value with changes included in current profits and losses. In addition, during
initial recognition, in order to eliminate or significantly reduce accounting mismatch, the Company
designated part of financial assets as financial assets measured at fair value with changes included in
current profit and loss. For such financial assets, the Company adopts fair value for subsequent
measurement, and the changes in fair value are included into the current profit and loss.
(2) Classification, recognition and measurement of financial liabilities
Financial liabilities upon initial recognition are classified as financial liabilities which are
measured at fair value and whose changes are included in current profits and losses and other
financial liabilities. For the financial liabilities measured at fair value with the changes included into
the current profits and losses, the relevant transaction costs are directly included into the current
profits and losses, and the relevant transaction costs of other financial liabilities are included in the
initial recognition amount.
① Financial liabilities at fair value through profit or loss
Financial liabilities measured at fair value with changes included in current profits and losses,
which include transactional financial liabilities (including derivatives belonging to financial
liabilities) and financial liabilities designated to be measured at fair value with changes included in
current profits and losses at initial recognition.
Trading financial liabilities (including derivatives belonging to financial liabilities) are
subsequently measured according to their fair values. Except for those related to hedge accounting,
changes in fair values are included in current profits and losses.
Financial liabilities designated to be measured at fair value with changes included in current
profits and losses. Changes in the fair value of this liability caused by changes in the Company's own
credit risk are included in other comprehensive income. When the liability is derecognized, the
accumulated change in fair value caused by changes in its own credit risk included in other
comprehensive income is transferred to retained earnings. Changes in fair value are accounted into
current profits and losses. If the above-mentioned treatment of the impact of changes in the credit
risk of these financial liabilities will cause or expand accounting mismatch in profits and losses, the
Company will include all profits or losses of the financial liabilities (including the impact amount of
changes in the credit risk of the enterprise itself) into the current profits and losses.
② Other financial liabilities
Except for financial liabilities and financial guarantee contracts formed by the transfer of
financial assets that do not meet the conditions for termination of recognition or continue to be
involved in the transferred financial assets, other financial liabilities are classified as financial
liabilities measured at amortized cost and subsequently measured at amortized cost. Gains or losses
arising from termination of recognition or amortization are included in current profits and losses.
(3) Basis of Confirmation and Calculation of financial instruments
Financial assets shall be derecognized if they meet one of the following conditions: ① The
termination of the contractual right to receive cash flow from the financial asset. ② The financial
asset has been transferred, and almost all risks and rewards related to the ownership of the financial
asset have been transferred to the transferee. ③ The financial asset has been transferred. Although
the enterprise has neither transferred nor retained almost all risks and rewards in the ownership of the
financial asset, it has given up its control over the financial asset.
If the enterprise neither transfers nor retains almost all the risks and rewards of the ownership of
the financial assets, and does not give up the control over the financial assets, the relevant financial
assets shall be recognized according to the extent of continuous involvement in the transferred
financial assets, and the relevant liabilities shall be recognized accordingly. The degree of continuous
involvement in the transferred financial assets refers to the risk level faced by the enterprise due to
the change in the value of the financial assets.
If the overall transfer of financial assets meets the conditions for termination of recognition, the
difference between the book value of the transferred financial assets and the sum of the consideration
received due to the transfer and the accumulated amount of changes in fair value originally included
in other comprehensive income shall be included into the current profits and losses.
If the partial transfer of financial assets meets the conditions for termination of recognition, the
book value of the transferred financial assets shall be apportioned according to its relative fair value
between the derecognized part and the non derecognized part, and the difference between the sum of
the consideration received due to the transfer and the accumulated change in fair value originally
included in other comprehensive income that shall be apportioned to the derecognized part and the
allocated aforesaid book amount shall be included into the current profits and losses.
For financial assets sold by the Company with recourse, or for endorsement and transfer of held
financial assets, it is necessary to determine whether almost all risks and rewards in the ownership of
the financial assets have been transferred. If almost all risks and rewards in the ownership of the
financial asset have been transferred to the transferee, the recognition of the financial asset shall be
terminated. If almost all risks and rewards on the ownership of a financial asset are retained, the
recognition of the financial asset shall not be terminated. If almost all risks and rewards related to the
ownership of financial assets have not been transferred or retained, it shall continue to judge whether
the enterprise retains control over the assets and carry out accounting treatment according to the
principles mentioned in the preceding paragraphs.
(4) Termination of recognition of financial liabilities
If the current obligation of the financial liability (or part thereof) has been relieved, the
Company terminates the recognition of the financial liability (or part thereof). The Company (the
borrower) and the lender sign an agreement to replace the original financial liabilities by assuming
new financial liabilities. If the contract terms of the new financial liabilities and the original financial
liabilities are substantially different, the original financial liabilities shall be derecognized and a new
financial liability shall be recognized at the same time. If the Company makes any substantial
modification to the contract terms of the original financial liability (or part thereof), the original
financial liability shall be derecognized and a new financial liability shall be recognized in
accordance with the modified terms.
If financial liabilities (or part thereof) are derecognized, the Company shall include the
difference between its book value and the consideration paid (including transferred non-cash assets
or liabilities assumed) into the current profits and losses.
(5) Offset of financial assets and financial liabilities
When the Company has the legal right to offset the recognized amount of financial assets and
financial liabilities, and such legal right is currently enforceable, and the Company plans to settle the
financial assets on a net basis or realize the financial assets and settle the financial liabilities at the
same time, the financial assets and financial liabilities are listed in the balance sheet at a net amount
after mutual offset. In addition, financial assets and financial liabilities shall be listed separately in
the balance sheet and shall not be offset against each other.
(6) The fair value determination method of financial assets and financial liabilities
Fair value refers to the price that market participants can receive from selling an asset or pay to
transfer a liability in an orderly transaction on the measurement date. Where there is an active market
for financial instruments, the Company adopts quotations in the active market to determine their fair
values. Quoted price in active market refers to the price easily obtained from exchanges, brokers,
industry associations, pricing service agencies, etc. on a regular basis, and represents the price of
market transactions actually occurred in fair trading. If there is no active market for financial
instruments, the Company uses evaluation techniques to determine their fair values. Evaluation
techniques include reference to prices used in recent market transactions by parties familiar with the
situation and willing to trade, reference to current fair values of other financial instruments that are
substantially the same, discounting cash flow technique, option pricing model, etc. In valuation, the
Company adopts valuation techniques that are applicable under current circumstances and are
supported by sufficient available data and other information, selects input values that are consistent
with the characteristics of assets or liabilities considered by market participants in transactions
related to assets or liabilities, and gives priority to the use of relevant observable input values as
much as possible. If the relevant observable input value cannot be obtained or it is not impracticable
to obtain it, the non-input value shall be used.
(7) Equity instruments
Equity instruments refer to contracts that can prove ownership of the Company's residual equity
in assets after deducting all liabilities. The issuance (including refinancing), repurchase, sale or
cancellation of equity instruments by the Company are treated as changes in equity, and transaction
costs related to equity transactions are deducted from equity. The Company does not recognize
changes in the fair value of equity instruments.
Dividends (including "interest" generated by instruments classified as equity instruments)
distributed by the Company's equity instruments during their existence shall be treated as profit
distribution.
10. Impairment of financial assets
The financial assets of the Company that need to confirm the impairment loss are financial
assets measured at amortized cost and debt instrument investment measured at fair value with
changes included in other comprehensive income, mainly including notes receivable, accounts
receivable, other receivables, debt investment, other debt investment, long-term receivables, etc. In
addition, for some financial guarantee contracts, impairment reserves and credit impairment losses
are also accrued in accordance with the accounting policies described in this part.
(1) Recognition method of impairment provision
On the basis of expected credit losses, the Company sets aside impairment reserves and
recognizes credit impairment losses for the above items according to the applicable expected credit
loss measurement method (general method or simplified method).
Credit loss refers to the difference between all contractual cash flows receivable according to
the contract and all cash flows expected to be collected by the Company discounted according to the
original actual interest rate, i.e. the present value of all cash shortages. Among them, for the financial
assets that have been purchased or incurred credit impairment, the Company discounts them
according to the actual interest rate adjusted by credit.
The general method of measuring expected credit loss refers to the Company's assessment of
whether the credit risk of financial assets has increased significantly since the initial recognition on
each balance sheet date. If the credit risk has increased significantly since the initial recognition, the
Company will measure the loss reserve by an amount equivalent to the expected credit loss during
the entire period. If the credit risk has not increased significantly since the initial recognition, the
Company will measure the loss reserve according to the amount equivalent to the expected credit
loss in the next 12 months. In assessing the expected credit loss, the Company takes into account all
reasonable and evidence-based information, including forward-looking information.
For financial instruments with low credit risk on the balance sheet date, the Company measures
the loss reserve based on the expected credit loss amount within the next 12 months or the entire
duration according to whether the credit risk has increased significantly since the initial recognition.
(2) Criteria for judging whether credit risk has increased significantly since initial recognition
If the default probability of a certain financial asset in the expected duration determined at the
balance sheet date is significantly higher than the default probability in the expected duration
determined at the time of initial recognition, it indicates that the credit risk of the financial asset is
significantly increased. Except for special circumstances, the Company uses the change of default
risk in the next 12 months as a reasonable estimate of the change of default risk in the entire duration
to determine whether the credit risk has increased significantly since the initial recognition.
Generally, if the overdue period is more than 90 days, the Company will consider that the credit
risk of the financial instrument has increased significantly, unless there is conclusive evidence that
the credit risk of the financial instrument has not increased significantly since the initial recognition.
The Company will consider the following factors when evaluating whether the credit risk has
increased significantly
1） Whether there is any significant change in the actual or expected operating results of the
debtor;
2） Whether there is any significant adverse change in the regulatory, economic or
technological environment of the debtor;
3） Whether there is any significant change in the value of the collateral or the quality of
the guarantee or credit enhancement provided by the third party, which are expected to reduce the
economic motivation of the debtor's repayment according to the time limit stipulated in the contract
or affect the probability of default;
4） Whether there is any significant change in the expected performance and repayment
behavior of the debtor;
5） Whether there is any significant change in the Company's credit management methods
for financial instruments, etc.
On the balance sheet date, if the Company judges that the financial instrument has only low
credit risk, the Company assumes that the credit risk of the financial instrument has not increased
significantly since the initial recognition. If the default risk of a financial instrument is low, the
borrower's ability to perform its contractual cash flow obligations in a short period of time is strong,
and even if there are adverse changes in the economic situation and operating environment for a long
period of time, it may not necessarily reduce the borrower's ability to perform its contractual cash
obligations, then the financial instrument is considered to have low credit risk.
(3) Judgment criteria for financial assets with credit impairment:
When one or more events have an adverse impact on the expected future cash flow of a
financial asset, the financial asset becomes a financial asset with credit impairment. The evidence of
credit impairment of financial assets includes the following observable information:
1） The issuer or debtor has major financial difficulties;
2） The debtor violates the contract, such as default or overdue payment of interest or
principal, etc.;
3） The creditor gives concessions that the debtor will not make under any other
circumstances due to economic or contractual considerations related to the debtor's financial
difficulties;
4） The debtor is likely to go bankrupt or undergo other financial restructuring;
5） The active market of the financial assets disappears due to the financial difficulties of
the issuer or the debtor;
6） Purchase or generate a financial asset at a substantial discount, which reflects the fact
that credit losses have occurred.
Credit impairment of financial assets may be caused by the combined action of multiple events,
but may not be caused by separately identifiable events.
(4) Portfolio approach to evaluate expected credit risk based on portfolio
The Company evaluates credit risks for financial assets with significantly different credit risks,
such as: Accounts receivable with related parties. Receivables in dispute with the other party or
involving litigation or arbitration. Receivables with obvious signs that the debtor is likely to be
unable to perform the repayment obligation.
In addition to the financial assets with individual credit risk assessment, the Company divides
the financial assets into different groups based on the common risk characteristics. The common
credit risk characteristics adopted by the Company include: Credit risk shall be assessed on the basis
of the aging portfolio, the receivables portfolio between the final controlling party and its
subordinate units, the public maintenance fund and house selling fund portfolio deposited in the
housing provident fund management center, the deposit/margin portfolio, and the petty cash ledger
portfolio formed by the employee loan of the unit.
(5) Accounting treatment method for impairment of financial assets
At the end of the period, the Company calculates the estimated credit losses of various financial
assets. If the estimated credit losses are greater than the book amount of its current impairment
reserve, the difference is recognized as impairment loss. If it is less than the carrying amount of the
current impairment reserve, the difference is recognized as impairment gain.
(6) Methods for determining the credit loss of various financial assets
①Notes receivable
The Company measures the loss reserve for bills receivable according to the expected credit
loss amount equivalent to the entire duration. Based on the credit risk characteristics of bills
receivable, they are divided into different portfolios:
Item Basis for determining portfolio
Bank acceptance bills The acceptor is a bank with less credit risk
According to the acceptor's credit risk classification, it should be
Commercial acceptance bill
the same as the "receivable" portfolio classification.
③ Accounts receivable and other receivables
For receivables that do not contain significant financing components, the Company measures
the loss reserve according to the expected credit loss amount equivalent to the entire duration.
For receivables that contain significant financing components, the Company measures the loss
reserve based on whether the credit risk has increased significantly since the initial recognition, using
the amount of expected credit loss within the next 12 months or the entire duration.
According to whether the credit risk of other receivables has increased significantly since the
initial recognition, the Company measures impairment loss with an amount equivalent to the
expected credit loss within the next 12 months or the entire duration.
In addition to the accounts receivable and other receivables that individually assess credit risk,
they are divided into different portfolios based on their credit risk characteristics:
Item Basis for determining portfolio
Item Basis for determining portfolio
Portfolio 1 Aging portfolio
A portfolio of receivables between the ultimate controller and its subordinate
Portfolio 2
units
The portfolio of public maintenance funds and house sales funds deposited in the
Portfolio 3
housing provident fund management center
Portfolio 4 Deposit/margin portfolio
Portfolio 5 The portfolio of reserve fund ledger formed by the Company's staff loan
The accrual method of bad debt reserves for different portfolios:
Item Accrual method
According to the accrual proportion
Aging portfolio
corresponding to the aging period
Portfolio of receivables between the ultimate Referring to the historical credit loss
controlling party and its subordinate units experience, combined with the current
The portfolio of public maintenance funds and house situation and the forecast of future
sales funds deposited into the MPF Management Center economic conditions, the expected credit
loss is calculated thr-ough the default risk
Deposit/margin portfolio exposure and the expected credit loss rate
The portfolio of reserve fund ledger formed by the within the next 12 months or the entire
Company's staff loan. duration, and the expected credit loss rate
of the portfolio is zero.
a. In portfolio, the portfolio method of withdrawing bad debt reserves by aging analysis
Expected loss rate of Expected loss rate of
Expected loss rate of
Aging notes receivable (%) accounts receivable
other receivables (%)
(%)
Within 1 year (including 1
year, the same below)
Among them: Within the credit 0 0 0
period (within 3 months)
Credit period~1 year 2 2 2
1-2 years 5 5 5
2-3years 20 20 20
3-4years 50 50 50
4-5years 80 80 80
More than 5 years 100 100 100
b. In the portfolio, the description of the accrual method for accrual of bad debt reserves by
other methods is given.
Expected loss rate Expected loss rate of Expected loss rate
Aging of notes accounts receivable of other receivables
receivable (%) (%) (%)
Accounts receivable between the final 0 0 0
controlling party and its subordinate
Public maintenance fund and house sale 0 0 0
fund deposited into MPF Management
Center
Deposit/margin 0 0 0
The reserve fund ledger formed by the 0 0 0
Company's staff loan.
11. Inventory
(1) Classification of inventory
Inventories mainly include raw materials, work in progress, finished goods, in transit materials
inventory goods, reserve tanker storage commissioned processing, and manufacturing consignment,
etc..
(2) Valuation method for obtaining and issuing inventory
Inventories are initially measured at cost. Inventory costs include purchase costs, processing
costs and other expenditures. The actual cost of inventories upon delivery is calculated using the
weighted average method.
(3) Confirmation of net realizable value of inventories and method of accrual of falling price
reserve
Net Realizable Value refers to the amount of estimated selling price of inventories minus the
estimated cost till completion, estimated expenses for selling activity and related taxes and fees in
daily activities. When determining the net realizable value of inventories, solid evidence obtained
shall be the basis, and the purpose of holding the inventories and the impact of events after the
balance sheet date shall be considered.
On the balance sheet date, inventories shall be measured at lower of cost and net realizable
value. When the net realizable value is lower than the cost, the provision for inventory devaluation
shall be accrued. The provision for inventory devaluation shall be accrued based on the difference
between the cost of a single inventory item and its net realizable value. The provision for inventory
devaluation of a large number of inventories with low unit prices shall be based on the type of
inventory; for inventories related to the product range produced and sold in same region, having the
same or similar end use or purpose, and difficult to be separated from other items for measurement,
their provision for inventory devaluation can be combined and accrued.
After the provision for inventory devaluation is accrued, if the factors cause the previous
written-down inventory value have disappeared, and the situation results in the fact that the net
realizable value of the inventories higher than the book value, the amount of the provision for
inventory devaluation that has been accrued shall be reversed and included in the current period
profit or loss.
(4) The Company adopts perpetual inventory system as its inventory system.
(5) Amortization method of low-value consumables and packaging materials
Low-value consumables are amortized by one-off amortization method when they are received;
packaging materials are amortized by one-off amortization method when they are received.
12. Held-for-sale assets and disposal group
A non-current asset or disposal group is classified as held for sale when its carrying amount will
be recovered principally through a sale transaction rather than through continuous use. The following
conditions need to be simultaneously met to be classified as held for sale: a non-current asset or
to-be-disposed portfolio can be sold immediately under the current conditions based on the practice
of selling such asset or to-be-disposed portfolio in similar transactions; the Company has already
decided on the sale plan and obtained confirmed purchase commitment; the sale is scheduled to be
completed within one year. Among them, a Disposal Portfolio refers to a group of assets that will be
disposed of as a whole through sale or other approaches in a transaction, and the liabilities directly
associated with these assets transferred along with the assets in transaction. If the portfolio of assets
or group of portfolios of assets is allocated goodwill acquired in business merger in accordance with
Accounting Standards for Business Enterprises No. 8 - Asset Impairment, the Disposal Portfolio shall
include the goodwill allocated to it.
In the event that the book value of a non-current asset or to-be-disposed portfolio that has been
designated as held-for-sale category is higher than the net amount of fair value less sales expenses
when the non-current asset or to-be-disposed portfolio is initially measured or measured on the
balance sheet date, the book value shall be to the net amount of fair value minus sales expenses, and
the written-down amount shall be recognized as asset impairment loss and included in current period
profit or loss. The provision for impairment loss of the held-for-sale asset shall be accrued. For a
Disposal Portfolio, the confirmed impairment loss shall deduct the book value of the goodwill in the
Disposal Portfolio, then deduct the book value of the non-current assets determined by the
measurement on a pro-rata basis in accordance with the applicable Accounting Standards for
Business Enterprises No. 42 held-for-sale non-current assets, Disposal Portfolio and Termination of
Operations (hereinafter referred to as the “Guide for Held-For-Sale”). In the event of an increase of
the book value of the held-for-sale Disposal Portfolio minus sales expenses on the subsequent the
balance sheet date, the amount previously written down shall be recovered and be reversed within the
mount of the asset impairment loss recognized in the non-current assets measured by the
measurement “Guide for Held-For-Sale” after being classified as held for sale asset, the reversal
amount shall be included in the current period profit or loss, and the book value of all non-current
assets (except for goodwill) determined by the measurement on a pro-rata basis in accordance with
the applicable “Guide for Held-For-Sale” shall be increased on a pro-rata basis. The book value of
the goodwill that has been deducted and the impairment loss of the assets recognized before the
classification of the held-for-sale non-current assets in accordance with the applicable “Guide for
Held-For-Sale” shall not be reversed.
In terms of the held-for-sale non-current assets or non-current assets in Disposal Portfolio, there
is no accrual or amortization for depreciation, and the interest from and other expenses from the
liabilities in held-for-sale Disposal Portfolio shall still be recognized.
When a non-current asset or Disposal Portfolio no longer meets the conditions for
Held-For-Sale category, non-current asset or Disposal Portfolio will no longer be classified as
Held-For-Sale category by the Company or the non-current asset will be removed from the
Held-For-Sale Disposal Portfolio, and be measured based on one of the following two values,
whichever is lower: (1) The book value before being classified as held-for-sale category adjusted
based on the depreciation, amortization or impairment that should have be confirmed if it is not
classified as held-for-sale category; (2) recoverable amount.
13. Long-term equity investment
The long-term equity investment refers to in this part refers to the long-term equity investment
that the Company has control, joint control or significant influence on the invested entity. The
long-term equity investment of the Company that does not have control, joint control or significant
impact on the investee shall be accounted as a financial asset measured at fair value with its changes
included into the current profits and losses. Among them, if it is non-transactional, the Company may
choose to designate it as a financial asset measured at fair value and its changes are included in the
accounting of other comprehensive income at the time of initial recognition. For details of its
accounting policies, please refer to Note Ⅲ, 9 “Financial Instruments".
Joint control refers to the control that the Company shares with other party/parties for an
arrangement in accordance with relevant agreements, and relevant activities of the arrangement can
only be decided based on the consensus of all parties sharing the control rights before making a
decision. Significant Influence refers to power of the Company to participate in the decision-making
of the financial and operating policies of the investee, but the Company cannot control or jointly
control the development of these policies with other parties.
(1) Determination of investment cost
For a long-term equity investment obtained from a combination of businesses under the same
control, the apportioned share of the book value in the final controller's consolidated financial
statements on the combination date in accordance with the shareholders' equity shall be the initial
investment cost of the long-term equity investment. The capital reserve shall be adjusted subject to
the difference between the initial investment cost of the long-term equity investment and the cash
paid, the non-cash assets transferred, and the book value of the debts assumed; if the capital reserve
is insufficient for offsetting, the retained earnings shall be adjusted. Where the equity securities are
issued as merger consideration, the apportioned share of the book value in the final controller's
consolidated financial statements on the combination date in accordance with the shareholders'
equity shall be the initial investment cost of the long-term equity investment, and the total par value
of the issued shares is taken as the share capital. The capital reserve shall be adjusted subject to the
difference between the initial investment cost of the long-term equity investment and the total par
value of the shares issued; if the capital reserve is insufficient for offsetting, the retained earnings
shall be adjusted. Where the equity of combined parties under the same control is obtained through
multiple transactions and a business combination under the same control is formed finally, it shall be
treated differentially based on whether it is a “package deal”: if it belongs to a “package deal”, all
transactions will be treated as a transaction that obtains control. If it is not a “package deal”, the
apportioned share of the book value in the final controller's consolidated financial statements on the
combination date in accordance with the shareholders' equity shall be the initial investment cost of
the long-term equity investment. The capital reserve shall be adjusted subject to the difference
between the initial investment cost of the long-term equity investment and the sum of the book value
of long-term equity investment before combination date and the book value of the new consideration
for the new share on the combination date. If the capital reserve is insufficient for offsetting, the
retained earnings shall be adjusted. The equity investments that are held prior to the combination
date and are recognized with equity recognized or as available-for-sale financial asset as other
comprehensive income will not be given accounting treatment for the moment.
For a long-term equity investment obtained from a combination of businesses not under the
same control, the initial investment cost of the long-term equity investment shall be based on the
combination cost on the purchase date. The combination cost includes the assets paid by purchaser,
the liabilities incurred or assumed, and the sum of the fair value of issued equity securities. Where
the equity of combined parties not under the same control is obtained through multiple transactions
and a business combination under the same control is formed finally, it shall be treated differentially
based on whether it is a “package deal”: if it belongs to a “package deal”, all transactions will be
treated as a transaction that obtains control. If it is not a “package deal”, the initial investment cost of
the long-term equity investment calculated by the cost method shall be calculated based on the sum
of the book value of the equity investment in the original holder and the new investment cost. The
original share holding that measured using equity method, the relevant other comprehensive income
does temporarily not conduct accounting treatment.
Intermediary expenses such as for auditing, legal services, assessment and other related
expenses incurred by a combining party or a purchaser for business combination shall be recognized
in current period profit or loss when incurred.
The equity investments other than formed by business combination shall be initially measured
at cost. The cost will be determined based on the following amount according to different methods of
the acquisition of long-term equity investment: the purchase price in cash actually paid by the
Company; the fair value of the equity securities issued by the Company, the value agreed in relevant
investment contract or agreement; the fair value or original book value of the assets exchanged in
non-monetary asset exchange transaction; the fair value of the long-term equity investment itself.
Any expenses, taxes and other necessary expenses directly related to the acquisition of long-term
equity investments shall also be included in the cost of investment. The cost of long-term equity
investment for the additional investment that can exert significant influence on investee or
implement joint control but does not constitute control shall be the sum of the fair value of the
originally held equity investment recognized in accordance with the Accounting Standards for
Business Enterprises No.. 22 – Recognition and Measurement of Financial Instruments and the cost
for new investment.
(2) Follow-up measurement and confirmation methods for profit and loss
The Equity Method shall be used to account for long-term equity investments that have joint
control over the invested entity (except for those constituting joint operators) or have significant
impact on the invested entity. In addition, the company's financial statements use the Cost Method to
account for long-term equity investments, which can control the long-term equity investment of the
investee.
a. Long-term equity investment based on Cost Method
When accounting with Cost Method, long-term equity investment is priced at the initial
investment cost, and the cost of the long-term equity investment is adjusted by adding or recovering
the investment. Except for the actual payment at the time of obtaining investment or the cash
dividends or profits included in the consideration but not yet issued, the current investment income
shall be recognized according to the cash dividends or profits declared by the investee.
b. Long-term equity investment accounted for by Equity Method
When accounting with Equity Method, if the initial investment cost of a long-term equity
investment is greater than the fair value share of the identifiable net assets of the investee when
investing, and the initial investment cost of the long-term equity investment shall not be adjusted; if
the initial investment cost is less than the fair value share of the identifiable net assets of the investee
when investing, the difference shall be included in the current profit and loss, and the cost of the
long-term equity investment shall be adjusted
When accounting with Equity Method, the investment income and other comprehensive income
are recognized separately according to the shares of the net profit or loss and other comprehensive
income that should be enjoyed or shared, and the book value of the long-term equity investment
should be adjusted at the same time. The book value of long-term equity investment is reduced
accordingly by calculating the share that should be enjoyed according to the profit or cash dividend
declared by the investee. The book value of long-term equity investment shall be adjusted and
included in the capital reserve for other changes in the owner's rights and interests of the invested
entity other than the net profit and loss, other comprehensive income and profit distribution. When
confirming the share of the net profit and loss of the investee, the net profit of the investee shall be
adjusted and confirmed on the basis of the fair value of the identifiable assets of the investee at the
time of investment. If the accounting policies and periods adopted by the invested entity are
inconsistent with the Company, the financial statements of the invested entity shall be adjusted in
accordance with the accounting policies and periods of the Company, and the investment income and
other comprehensive income shall be confirmed accordingly. For the transactions between the
Company and the associates and joint ventures, the assets invested or sold do not constitute a
business, and the unrealized gains and losses from internal transactions are offset against the portion
of the Company that is attributable to the proportion of the shares, on this basis. investment profit
and loss should be confirmed. However, the unrealized internal transaction losses incurred by the
Company and the investee are not included in the impairment losses of the transferred assets. Where
the assets invested by the Company into a joint venture or an associates constitute a business, if the
investor obtains long-term equity investment but does not control, the fair value of the invested
business shall be deemed as the initial investment cost of the new long-term equity investment, and
the difference between the initial investment cost and the book value of the invested business is fully
recognized in the current profits and losses. If the assets sold by the Company to a joint venture or an
associate that constitute a business, the difference between the consideration value obtained and the
book value of the business shall be fully recognized in the profits and losses of the current period.
When confirming the net loss that incurred by the investee should be shared, the book value of
the long-term equity investment and other long-term equity that substantially constitutes the net
investment of the investee are reduced to zero. In addition, if the Company has an obligation to bear
additional losses to the investee, the estimated liabilities shall be recognized according to the
estimated obligations and included in the current investment losses. If the investee achieves net profit
in the following period, the Company shall resume recognizing the share of income after making up
for the unrecognized share of loss.
For the long-term equity investment in the joint ventures and associates held by the Company
for the first time before the implementation of the new accounting standards, if there is a debit
balance of equity investments related to the investment, the current profits and losses shall be
accounted for by the straight-line amortization of the original remaining period.
c. Acquisition of Minority Equity
In the preparation of the consolidated financial statements, if the difference between the
long-term equity investment added by purchasing minority shares and the net assets share that should
be continuously calculated by the subsidiary company from the purchase date (or the consolidation
date) is calculated according to the proportion of newly added shares, the retained earnings shall be
adjusted; and if the capital reserve is insufficient to offset, the retained earnings shall be adjusted.
d. Disposal of long-term equity investment
In the consolidated financial statements, the parent company partially of disposes of the
long-term equity investment of the subsidiary without losing control, the difference of the
corresponding net assets in the subsidiary between the disposal price and the disposal of the
long-term equity investment is included in the shareholders' equity. it shall be treated in accordance
with the relevant accounting policies described in “Notes on the preparation of consolidated financial
statements” in Note Ⅲ.5 .
For the disposal of long-term equity investment in other cases, the difference between the book
value of the disposed equity and the actual acquisition price shall be included in the current profits
and losses.
If the long-term equity investment is accounted for by equity method, the remaining equity after
disposal is still accounted for by equity method, when disposing, the other comprehensive income
which were originally included in shareholder's rights and interests shall be accounted for on the
same basis as the assets or liabilities directly disposed of by the investee. The owner's equity
recognized as a result of changes in the owner's equity of the investee other than net profit or loss,
other comprehensive income and profit distribution, it should be carried forward to the current profit
and loss
For the long-term equity investment accounted by Cost Method, the remaining equity is still
accounted by Cost Method after disposal, other comprehensive income that recognized by equity
method accounting or financial instrument recognition and measurement criteria accounting before
obtaining control over the investee shall be accounted for on the same basis as the assets or liabilities
directly disposed of by the investee, and shall be settled to the current profit and loss in proportion.
Changes of the net assets of investee in the owner's equity other than net profit or loss, other
comprehensive income and profit distribution 's that recognized by equity method shall be settled to
the current profit and loss in proportion.
Where the Company loses control over the investee due to disposal of part of its equity
investment, when preparing individual financial statements, if the remaining equity after disposal can
exercise joint control or exert significant influence on the investee, it shall be accounted for by equity
method instead, and the remaining equity shall be adjusted by accounting by equity method when it
is deemed to be acquired. If the remaining equity after disposal cannot be jointly controlled or exerts
significant influence on the investee, it shall be accounted for according to the relevant provisions of
the financial instrument recognition and measurement criteria, and the difference between the fair
value and the book value on the date of loss of control. It is included in the current profit and loss.
Before the Company obtains control over the investee, other comprehensive income recognized by
equity method accounting or financial instrument recognition and measurement criteria is used to
directly dispose of the relevant assets with the investee, accounting treatment based on the same
basis as the investee directly disposes of related assets or liabilities when the control of the investee
is lost, Accounting is treated on the same basis as the liabilities. Changes in the owner's equity other
than net profit or loss, other comprehensive income and profit distribution of the investee's net assets
recognized by the equity method are carried forward to the current profit or loss when the control of
the investee is lost. Among them, the remaining equity after disposal is accounted for using the
equity method. Where the remaining equity after disposal is accounted for by equity method, other
comprehensive income and other owner's equity should be settled by proportion. If the remaining
equity is accounted for using financial instrument recognition and measurement standard, all of other
comprehensive income and other shareholder’s equity should be settled.
If the Company loses its joint control or significant influence on the investee due to the disposal
of part of the equity investment, the remaining equity after disposal shall be accounted for according
to the financial instrument recognition and measurement criteria, and the difference between the fair
value and the book value on the date of loss of joint control or significant influence is recognised in
the current profit or loss. The other comprehensive income recognized in the original equity
investment by the equity method is accounted for on the same basis as the investee's direct disposal
of related assets or liabilities when the equity method is terminated, Owner's equity recognized as a
result of changes in other owners' equity other than net profit or loss, other comprehensive income
and profit distribution of the investee should be transferred to current investment income when
terminating the equity method
The Company disposes of the equity investment in the subsidiaries step by step through
multiple transactions until the loss of control. If the above-mentioned transactions are part of a
package transaction, the transactions are treated as a transaction dealing with the equity investment
of the subsidiary and losing control. The difference between the book value of each long-term equity
investment corresponding to the disposal price and the disposal of the equity before loss of control is
first recognized as other comprehensive income, and when the control is lost, it is transferred to the
current profit and loss of loss of control.
14．Investment Property
Investment Property refers to property held for the purpose of earning rent or capital
appreciation, or both, including land use rights that have been leased, land use rights that are held
and prepared for transfer after appreciation, and buildings that have been rented. Investment property
is initially measured at cost. The expenses related to investment property, if the economic benefits
related to this asset are highly probable to flow into the company and the cost canbe measured
reliably, then the expense will account for as the cost of investment property. Other expenses are
accounted for in profit and loss when incurred.
The Company adopts the cost model to conduct subsequent measurement of investment
property and depreciation or amortization according to the policy consistent with the building or land
use rights.
For details of the impairment test method and impairment provision method of property, please
refer to Note Ⅲ. 20 “Long-Term Asset Impairment”.
When the self-use property or inventory is converted into investment property or investment
property is converted into self-use property, the book value before conversion is used as the recorded
value after conversion.
When the use of investment property is changed to self-use, the investment property is
converted into fixed assets or intangible assets from the date of change. When the use of self-use
property changes to earn rent or capital appreciation, the fixed assets or intangible assets are
converted into investment property from the date of change. In the case of investment property
measured by the cost model when the conversion occurs, the book value before conversion is used as
the entry value after conversion; if it is converted into investment property measured by the fair
value model, the fair value of the conversion date is used as the entry value after conversion.
When an investment real estate is disposed of, or permanently withdrawn from use and is not
expected to obtain economic benefits from its disposal, the confirmation of the investment real estate
shall be terminated. Disposal income from the sale, transfer, retirement or damage of investment
properties is charged to the current profit and loss after deducting its book value and related taxes
and fees.
15. Fixed Assets
(1) Confirmation conditions for fixed assets
Fixed Assets refer to tangible assets held for the purpose of producing goods, providing labor
services, renting or operating management, and having a service life of more than one fiscal year.
Fixed assets are recognized only when the economic benefits associated with them are likely to flow
into the Company and their costs can be reliably measured. Fixed assets are initially measured at cost
and taking into account the impact of projected abandonment costs.
(2) Depreciation methods for various types of fixed assets
Fixed assets are depreciated over their useful lives using the straight-line method from the
month following the scheduled availability. The depreciation period, estimated net residual value rate
and annual depreciation rate of each category of fixed assets are as follows:
Depreciation Depreciation Net esidual Annual depreciation
Category
Method period (Year) rate(%) rate (%)
straight-line
Buildings 8-50 5 1.90— 11.88
depreciation
straight-line
uipElectronic eqment 3-10 4、5 9.50—32.00
depreciation
straight-line
Machinery equipment 5-28 4、5 3.39—19.20
depreciation
straight-line
Transport facility 5-10 4、5 9.50—19.20
depreciation
straight-line
Office equipment 3-10 4、5 9.50—32.00
depreciation
straight-line
Other equipment 5-28 4、5 3.39—19.20
depreciation
The estimated net residual value refers to the expected state after the estimated useful life of the
fixed assets has expired and is at the end of its useful life. The amount currently obtained by the
Company from the disposal of the assets after deducting the estimated disposal expenses.
(3) Impairment test method and Impairment provision method for fixed assets
For details of Impairment test method and impairment provision method for fixed assets, please
refer to Note Ⅲ. 21 “Long-Term Asset Impairment”.
(4) Recognition basis and valuation method of fixed assets acquired by finance lease
A finance lease is a lease that transfers substantially all the risks and rewards associated with
ownership of an asset, and its ownership may or may not be transferred. If it is reasonable to
determine the ownership of the leased asset at the expiration of the lease term, the depreciation shall
be calculated within the useful life of the leased asset; If it is not reasonable to determine the
ownership of the leased asset at the expiration of the lease term, depreciation shall be calculated
within a relatively short period of the lease term and the service life of the leased assets.
(5) Others
The subsequent expenses related to fixed assets, if the economic benefits related to the fixed
assets are likely to flow in and their costs can be reliably measured, are included in the cost of fixed
assets and the book value of the replaced part should be terminated. The subsequent expenditures
other than mentioned as above are recognized in profit or loss in the period in which they are
incurred.
The fixed asset is derecognized when the fixed asset is in disposal or is not expected to generate
economic benefits by using or disposal. The difference between the disposal income from the sale,
transfer, retirement or damage of the fixed assets less the carrying amount and related taxes is
recognized in profit or loss for the current period.
The Company reviews the useful life, estimated net residual value and depreciation method of
fixed assets at least at the end of the year, and changes as an accounting estimate if changes occur.
16. Construction in progress
The cost of construction in progress is determined based on actual project expenditure,
including various project expenditures incurred during the construction period, capitalized borrowing
costs before the project reaches the expected usable status, and other related expenses. Construction
in progress is carried forward to fixed assets when it is ready for its intended use.
For details of the impairment test method and impairment provision method for construction
in progress, please refer to Note Ⅲ. 21 “Long-Term Asset Impairment”.
17. Borrowing Costs
Borrowing costs include interest on borrowings, amortization of discounts or premiums,
ancillary expenses, and exchange differences arising from foreign currency borrowings. Borrowing
costs directly attributable to the acquisition, construction or production of assets eligible for
capitalization, capitalization is began when asset expenditures have occurred, borrowing costs have
occurred, and the acquisition, construction or production activities necessary to bring the assets to the
intended usable or saleable state have begun. And capitalization is stopped when the assets under
construction or production that meet the capitalization conditions are ready for their intended use or
saleable status. The remaining borrowing costs are recognized as an expense in the period in which
they are incurred.
The interest expenses actually incurred in the current period of special borrowings shall be
capitalized after subtracting the interest income from the unused borrowing funds deposited into the
bank or the investment income obtained from the temporary investment. For the general borrowings,
according to the accumulated asset expenditures exceed the special borrowings. The capitalization
amount is determined by multiplying the weighted average of which accumulated asset expenditure
exceeds the asset expenditure of the special borrowing portion by the capitalization rate of the
general borrowings used. The capitalization rate is determined based on the weighted average
interest rate of general borrowings.
During the capitalization period, the exchange differences of foreign currency special
borrowings are all capitalized; the exchange differences of foreign currency general borrowings are
included in the current profit and loss.
Assets eligible for capitalization refer to assets such as fixed assets, investment property and
inventories that require a substantial period of acquisition, construction or production activities to
achieve the intended use or sale status.
If the assets eligible for capitalization are interrupted abnormally during the acquisition,
construction or production process and the interruption period lasts for more than 3 months, the
capitalization of the borrowing costs shall be suspended until the acquisition, construction or
production of the assets resumes.
18. Right-of-use assets (applicable from 1 January 2021)
Right-of-use assets of the Group mainly consist of buildings, power generation and transmission
equipment, plant, machinery and equipment, motor vehicles, furniture and fixtures and others.
At the commencement date of the lease, the Group recognises the right to use the leased assets
during the lease term as a right-of-use asset, including: the initial measurement amount of the lease
liability; the amount of lease payment paid on or before the beginning of the lease term, the amount
of lease incentive already enjoyed shall be deducted if there is a lease incentive; initial direct
expenses incurred by the lessee; the costs that the lessee is expected to incur in order to dismantle
and remove the leased asset, restore the leased asset to the site or restore the leased asset to the state
agreed upon in the lease terms. The right-of-use assets are depreciated on a straight-line basis
subsequently by the Group. If the Group is reasonably certain that the ownership of the underlying
asset will be transferred to the Group at the end of the lease term, the Group depreciates the asset
from the commencement date to the end of the useful life of the asset. Otherwise, the Group
depreciates the assets from the commencement date to the earlier of the end of the useful life of the
asset or the end of the lease term.
The Group remeasures the lease liability at the present value of the revised lease payments and
adjusts the carrying amount of the right-of-use assets accordingly, when the carrying amount of the
right-of-use asset is reduced to zero, and there is a further reduction in the measurement of the lease
liability, the Group recognises the remaining amount of the remeasurement in profit or loss for the
current period
19. Intangible assets
(1) Intangible assets
Intangible assets refer to identifiable non-monetary assets without physical form owned or
controlled by the Company.
Intangible assets are initially measured at cost. Expenditure related to intangible assets is
included in the cost of intangible assets if the relevant economic benefits are likely to flow to the
Company and its costs can be measured reliably. However, the intangible assets acquired through
business combination not involving enterprises under common control should be measured at fair
value separately as intangible assets when their fair values can be reliably measured.
The acquired land use rights are usually accounted for as intangible assets. The related land use
rights and building construction costs of self-developed and constructed buildings are accounted for
as intangible assets and fixed assets, respectively. In the case of purchased houses and buildings, the
relevant price is distributed between the land use rights and the buildings. If it is difficult to allocate
them reasonably, all of them are treated as fixed assets.
Since the intangible assets with limited useful life are available for use, the original value minus
the estimated net residual value and the accumulated amount of impairment reserve shall be
amortized by the straight-line method during their expected service life. Intangible assets with
uncertain service life shall not be amortized.
Among them, the useful life and amortization method of intellectual property are as follows:
Amortization period
Item Amortization method
(year)
Trademark 20 Straight-line method
At the end of the period, the useful life and amortization methods of intangible assets with
limited useful life are reviewed, and if any change occurs, it is treated as a change of accounting
estimate. In addition, the useful life of intangible assets with uncertain service life is also reviewed.
If there is evidence that the period for which the intangible assets bring economic benefits to the
enterprise is foreseeable, the useful life of intangible assets is estimated and amortized according to
the amortization policy of intangible assets with limited useful life
(2) Research and development expenditure
The company's expenditure for internal research and development project is divided into
research phase expenditure and development phase expenditure.
Expenditures for the research phase shall be recognized in profit or loss when incurred.
Expenditures for the development phase that meet the following conditions shall be recognized
as intangible assets, and expenditures in the development stage that fail to meet the following
conditions are included in current profit and loss:
a. It is technically feasible to complete the intangible asset to enable it to be used or sold.
b. The intent to complete the intangible asset and use or sell it;
c. The way in which intangible assets generate economic benefits, including the ability to prove
that the products produced from the intangible assets having a market or the intangible assets having
a market, and the intangible assets will be used internally, which can prove its usefulness;
d. sufficient technical, financial resources and other resources for supporting the development of
the intangible assets and the ability to use or sell the intangible assets.
e. Expenditure attributable to the development phase of the intangible asset can be reliably
measured.
If it is impossible to distinguish the expenditures between research phase and development
phase, all research and development expenditures incurred will be included in the current profit and
loss.
(3) Impairment test method and Impairment provision method for intangible assets
For details of the impairment test method and impairment provision method, please refer to
Note Ⅲ. 21 “Long-Term Asset Impairment”.
20．Long-term Deferred Expenses
The long-term deferred expenses are all expenses that have occurred but shall be borne by the
reporting period and subsequent periods with amortization period of more than one year. The
company's long-term deferred expenses mainly include lease of land use right and renovation costs
of factory building. Long-term deferred expenses are amortized on a straight-line basis over the
estimated benefit period.
21. Long-term assets impairment
For fixed assets, construction in progress, intangible assets with limited useful life, investment
property measured by cost model, and non-current non-financial assets such as long-term equity
investments in subsidiaries, joint ventures and associates, the Company determines whether there is
any indication of impairment on the balance sheet date. If there is any indication of impairment, the
recoverable amount is estimated and the impairment test is carried out. Goodwill, intangible assets
with uncertain service life and intangible assets that not yet ready for use are tested for impairment
annually, regardless of whether there is any indication of impairment.
If the result of the impairment test indicates that the recoverable amount of the asset is lower
than its book value, the impairment provision is made based on the difference and is included in the
impairment loss. The recoverable amount is the higher of the fair value of the asset less the disposal
expense and the present value of the estimated future cash flow of the asset. The fair value of assets
is determined according to the sale agreement price in a fair transaction. If there is no sales
agreement but there is an active market for the asset, the fair value is determined according to the
buyer's bid for the asset; if there is neither sales agreement nor active market for assets, the fair value
of assets shall be estimated based on the best information available. Asset disposal expenses include
legal fee, taxes, transportation expenses and direct expenses incurred to make assets saleable. The
present value of the estimated future cash flow of an asset is determined by the appropriate discount
rate discounting and the estimated future cash flow generated by the asset during its continuous use
and final disposal. The asset impairment provision is calculated and confirmed based on individual
assets. If it is difficult to estimate the recoverable amount of an individual asset, the recoverable
amount of the asset is determined by the asset group which the asset belongs to. An asset group is the
smallest portfolio of assets that can generate cash inflows independently.
The book value of the goodwill listed separately in the financial statements is amortized into
asset groups or portfolios that are expected to benefit from the synergies of business combinations
when impairment tests are conducted. The test results show that the recoverable amount of the asset
group or portfolio containing the assessed goodwill is lower than its book value, the corresponding
impairment losses should be confirmed. The amount of impairment loss is first deducted from the
book value of the goodwill amortized to the asset group or portfolio, and then deducted
proportionally from the book value of other assets according to the proportion of the book value of
assets other than goodwill in the asset group or portfolio.
Once the above asset impairment loss is confirmed, it will not be reversed to the part where the
value is restored in the future period.
22. Employee Compensation
The Company's employee compensation mainly includes short-term employee remuneration,
Post-employment Benefits, Termination Benefits and benefits for other long-term employee. Among
them:
Short-term employees remuneration mainly includes wages, bonuses, allowances and subsidies,
employee welfare fees, medical insurance premiums, maternity insurance premiums, work injury
insurance premiums, housing fund, labor union funds, employee education funds, and non-monetary
benefits. The Company recognizes the actual short-term employee's remuneration as a liability in the
accounting period in which employees provide services to the Company and recognizes them in
profit or loss or related asset costs. Non-monetary benefits are measured at fair value.
Post-employment Benefits mainly include basic retirement security, unemployment insurance,
and annuities. The Post-employment Benefit Scheme includes a Defined Contribution Plan and a
Defined Benefit Plan. If a Defined Contribution Plan is adopted, the corresponding amount of the
deposit shall be included in the relevant asset cost or current profit and loss as incurred. (1) The
Defined Contribution Plan is recognized as a liability based on a fixed fee paid to an independent
fund and is included in the current profit and loss or related asset costs; (2) The Defined Benefit Plan
is accounted for using the expected cumulative benefits unit method Specifically, the Company will
convert the welfare obligation arising from the Defined Benefit Plan into the final value of the
departure time according to the formula determined by the expected cumulative benefits unit method;
then it is attributed to the employee's in-service period and is included in the current profit and loss
or related asset cost.
If the labor relationship with the employee is terminated before the employee's labor contract
expires, or if the employee is encouraged to accept the reduction voluntarily, when cannot
withdrawing unilaterally the dismissal benefits provided by the termination of the labor relationship
plan or the reduction proposal, and when confirming the costs associated with the restructuring
involving the payment of the dismissal benefits, whichever is earlier, the Company will recognize the
employee compensation liabilities arising from the dismissal benefits, and included in the current
profit and loss. However, if the dismissal benefits are not expected to be fully paid within 12 months
after the end of annual reporting period, they shall be treated in accordance with other long-term
employee compensations.
The internal retirement plan for employees shall be treated in the same way as the
above-mentioned dismissal benefits. The company will pay the internal retired staff the salary and
the social insurance premiums from the employee's lay-off to normal retirement, and will include in
the current profit and loss (dismissal benefits) when the conditions of the estimated liabilities are
met.
If the other long-term employee benefits provided by the Company to the employees are in line
with the Defined Contribution Plan, they shall be accounted for Defined Contribution Plan, and
otherwise accounted for the Defined Benefit Plan.
23. Lease liabilities
At the commencement date of the lease period, the Group recognises the present value of
outstanding lease payments as a lease liability, excluding short-term leases and leases of low-value
assets. The Group adopts the interest rate implicit in the lease as the discount rate to calculate the
present value of the lease payments. Where the interest rate implicit in the lease cannot be
determined, the incremental borrowing rate of the lessee shall be used as the discount rate. The
Group calculates the interest expense of the lease liability during each period of the lease term in
accordance with the constant periodic rate of interest and recognises it in profit and loss for the
current period, except otherwise stipulated in the cost of related assets. The variable lease payment
that is not included in the measurement of lease liabilities is recognised in the profit and loss for the
current period when it actually occurs, except that it is otherwise stipulated to be included in the cost
of relevant assets.
After a lease term commences, when there is a change in the amount of in-substance fixed lease
payments, a change in the amounts expected to be payable under a residual value guarantee, a change
in future lease payments resulting from a change in an index or a rate used to determine those
payments, a change in assessment of an option to purchase the underlying asset, renew or terminate
the lease, or change in the actual exercise of an option, the Group remeasures the carrying amount of
the lease liability by discounting the revised lease payments
24. Estimated liabilities
When the obligations related to the contingencies meet the following conditions, they are
recognized as contingent liabilities: (1) The obligation is the present obligation assumed by the
Company; (2) The performance of this obligation is likely to result in the outflow of economic
benefits; (3) The amount of the obligation can be reliably measured.
On the balance sheet date, taking into account factors such as risks, uncertainties and time value
of money related to contingencies, the estimated liabilities are measured in accordance with the best
estimate of the expenditure required to perform the relevant current obligations.
If all or part of the expenses required to discharge the estimated liabilities are expected to be
compensated by the third party, the compensation amount will be separately recognized as an asset
when it is basically determined to be received, and the confirmed compensation amount does not
exceed the book value of the estimated liabilities.
(1) Loss Contract
A loss contract is a contract in which the cost of fulfilling a contractual obligation will
inevitably occur more than the expected economic benefit. If the contract to be executed becomes a
loss contract, and the obligation arising from the loss contract satisfies the conditions for the
recognition of the above-mentioned estimated liabilities, the portion of the contract's estimated loss
that exceeds the recognized impairment loss (if any) of the contracted asset is recognized as the
estimated liability.
(2) Restructuring Obligations
For restructuring plans that are detailed, formal, and have been announced to the public, the
amount of the estimated liabilities are determined based on the direct expenses related to the
reorganization, subject to the recognition conditions of the aforementioned estimated liabilities. For
the restructuring obligation to the part of business sold, the obligation related to the reorganization is
confirmed only when the company promises to sell part of the business (that is, when the binding
sale agreement is signed).
25. Share-based Payments
(1) Accounting Treatment of Share-based Payments
A share-based payment is a transaction that grants an equity instrument or assumes a liability
determined based on an equity instrument in order to obtain services from employees or other parties.
Share-based Payments include equity-settled share payment and cash-settled share payment.
a) Equity-settled Share Payment
The equity-settled share payment in exchange for the services from employee is measured at the
fair value of the granting of employees' equity instruments at the grant date. If the fair value is vested
in the completion of the waiting period of service or the fulfillment of the required performance
conditions, during the waiting period, the amount of the fair value is calculated by the straight-line
method into the relevant costs or expenses based on the best estimate of the number of vesting equity
instruments; Or If the vesting right is granted immediately after the grant, the calculation of the
amount of the fair value is included in the relevant cost or expense on the grant date, and the capital
reserve is increased accordingly.
On each balance sheet date during the waiting period, the Company makes the best estimate
based on the latest information on the changes in the number of employees with vesting rights and
corrects the number of equity instruments that are expected to be vested. The impact of the above
estimates shall be included in the current related costs or expenses, and the capital reserve is adjusted
accordingly.
In the case of equity-settled share-based payments in exchange for other parties' services, if the
fair value of other parties' services can be reliably measured, the fair value of other services shall be
measured at the fair value on the date of acquisition; If the fair value of the other party's services
cannot be measured reliably, the fair value shall be measured at the fair value of the equity
instrument at the date the service is acquired, and is included in the relevant cost or expense, which
increases the shareholders' equity accordingly.
b) Cash-settled Share Payment
The cash-settled share payment is measured at the fair value of the liabilities determined by the
Company based on shares or other equity instruments. If the vesting right is available immediately
after the grant, the relevant costs or expenses shall be included on the date of grant, and the liabilities
shall be increased accordingly; if vesting right is available after the service is completed within the
waiting period or met the required performance conditions, based on the best estimate of the vesting
rights on each balance sheet date of the waiting period, according to the fair value of the liabilities
assumed by the company, the services obtained in the current period are included in the cost or
expense, and the liabilities are increased accordingly.
The fair value of the liabilities shall be re-measured on each balance sheet date and settlement
date before the settlement of the relevant liabilities, and the changes shall be recorded in the profit
and loss of the current period.
(2) Relevant Accounting Treatment of share-based payment plan’s modification and termination
When the Company modifies the share-based payment plan, if the modification increases the
fair value of the equity instruments granted, the increase in the fair value of the equity instruments is
recognized accordingly. The increase in the fair value of equity instruments refers to the difference
between the fair value of the equity instruments before and after the modification. If the modification
reduces the total fair value of the share-based payment or adopts other methods that are not
conducive to the employee, the service obtained shall continue to be accounted for, as if the change
has never occurred, unless the Company cancels some or all of equity instruments.
During the waiting period, if the granted equity instrument is cancelled, the Company will
cancel the granted equity instrument as an accelerated exercise, and the amount to be recognized in
the remaining waiting period will be immediately included in the current profit and loss, and the
capital reserve will be recognized. If the employee or other party can choose to meet the non-vesting
conditions but fails to meet the waiting period, the Company will treat it as a cancellation of the
equity instrument.
(3) Accounting Treatment of Share Payment Transactions between the Company and its
Shareholders or Actual Controllers
In respect of the share-based payment transaction between the company and the shareholders or
actual controllers of the company, If one of the settlement enterprise and the service receiving
enterprise is in the company and the other is outside the company, it shall be accounted for in the
consolidated financial statements of the company according to the following provisions:
a.) If the settlement enterprise settles with its own equity instrument, the share-based payment
transaction shall be treated as equity-settled share-based payment; otherwise, it shall be treated as a
cash-settled share-based payment.
If the settlement enterprise is an investor of a serviced enterprise, it shall be recognized as the
long-term equity investment of the serviced enterprise according to the fair value of the equity
instrument at the grant date or the fair value of the liability to be assumed, and the capital reserve
(other capital reserve) or liabilities shall be recognized.
b.) If the serviced enterprise has no settlement obligation or grants its own employees the equity
instruments, the share payment transaction shall be treated as equity-settled share payment; if the
serviced enterprise has settlement obligation and grants its employees other than its own equity
instruments, the share payment transaction shall be treated as a cash-settled share payment.
For the share based payment incurred between companies within the group, if the serviced
enterprise and settlememt enterprise are not the same, then the payment should be recpgnized and
measured in their individual financial statements, they should be accounted for using the above
principles
26. Revenue
The company's operating income mainly includes income from selling goods, income from
providing services, royalty income, interest income, etc. When the company signs a contract, it
evaluates the contract, identifies the individual performance obligations contained in the contract,
and determines whether the individual performance obligations are performed within a certain period
of time or at a certain point of time. When the company has fulfilled all the performance obligations
in the contract, the revenue shall be recognized respectively according to the transaction price
apportioned to the performance obligations.
(1) Revenue recognition for fulfilling performance obligation at a certain time point
Generally, the company recognizes the revenue from the sales of goods based on the transaction
price apportioned to the single performance obligation when the customer obtains the control right of
the relevant goods on the basis of comprehensively considering the following factors: the company
has the right to receive payment in respect of the goods or services currently, that is, the customer has
the obligation to pay for the goods currently; the company has transferred the legal ownership of the
goods to the customer, that is, the customer has the legal ownership of the goods; The Company has
transferred the physical goods of the commodity to the Customer or the Customer has obtained the
qualification of physical goods right of the commodity. The consideration obtained by the Company
in respect of the transfer of the commodity is likely to be recovered; Other indications that the
customer has taken control of the commodity.
The specific principles of the company's sales revenue recognition are as follows: when the
commodity have been delivered to the customer and signed by the customer for confirmation, or the
ownership certificate of the commodity has been delivered to the customer, the sales revenue is
recognized when the company has received the payment or obtained the evidence of payment.
(2) Revenue recognition for fulfilling performance obligation within a certain period of
time
For the performance obligations performed in a certain period of time, such as the services
provided, the company adopts the output method or input method to determine the appropriate
performance progress, and recognizes the revenue according to the performance progress in that
period of time. On the balance sheet date, the company shall recognize the current income according
to the total transaction price of the contract multiplied by the progress of performance minus the
accumulated recognized income. If one of the following conditions is satisfied, it is regarded as the
performance obligation performed during a certain period of time: the Customer obtains and
consumes the economic benefits arising from the performance of the Company at the same time of
the performance of the Company; Customers can control the goods under construction during the
performance of the contract; The products produced by the Company during the performance of the
Contract are of irreplaceable use, and the Company shall be entitled to receive payment for the
accumulated part of the completed performance so far during the whole term of the Contract.
Otherwise, the Company recognizes revenue at the point when the Customer acquires control of the
relevant goods or services.
The Company's rights to receive consideration for goods or services transferred to the
Customer (and such rights depend on factors other than the time passage) are presented as
contractual assets, which are subject to impairment on the basis of expected credit losses. The
company's right to collect consideration from customers unconditionally (only depending on the
passage of time) is listed as receivables. The obligation of the Company to transfer goods or services
to customers for which consideration has been received or receivable is presented as a contractual
liability.
27. Contract cost
1. Contract performance cost
The cost incurred by the company for the performance of the contract, which does not fall
within the scope of other accounting standards for business enterprises other than the income
standard and meets the following conditions at the same time, is recognized as an asset as the
contract performance cost:
(1) The cost is directly related to a current or expected contract, including direct labor, direct
materials, manufacturing expenses (or similar expenses), costs explicitly borne by the customer and
other costs incurred solely as a result of the contract;
(2) The cost increases the company's resources for fulfilling its performance obligations in the
future;
(3) The cost is expected to be recovered.
The assets are presented in inventory or other non-current assets according to whether the
amortization period has exceeded one normal operating cycle at the time of its initial recognition.
2. Contract acquisition cost
If the incremental cost incurred by the company to obtain the contract is expected to be
recovered, it shall be recognized as an asset as the contract acquisition cost. Incremental cost refers
to the cost that will not occur if the company does not obtain the contract.
3. Amortization of contract costs
The assets related to the contract cost mentioned above shall be amortized at the time of
performance of the obligation or according to the performance progress on the same basis as the
income recognition of the commodity or service related to the asset and shall be recorded into the
current profit and loss.
4. Impairment of contract cost
If the book value of the above assets related to the contract cost is higher than the difference
between the residual consideration expected to be obtained by the company due to the transfer of the
goods related to the assets and the estimated cost to be incurred for the transfer of the relevant goods,
the excess part shall be set aside as an impairment provision and recognized as an impairment loss of
the asset.
28. Government grants
Government grant refers to the company's acquisition of monetary and non-monetary assets
from the government free of charge, excluding the capital invested by the government as an investor
and enjoying the corresponding owner's rights and interests. Government grants include
assets-related grants and revenue-related grants. The company defines the government grant obtained
for the purchase and construction of long-term assets or for the formation of long-term assets in other
ways as the government grant related to assets; the remaining government grant is defined as the
government grant related to income. If the object of grants is not specified in government documents,
the grants shall be divided into income-related government grants and assets-related government
grants in the following ways: (1) If the government document clarifies the specific project for which
the grant is targeted, the proportion of the expenditure amount of the assets to be formed and the
amount of the expenditures included in the expenses in the budget of the specific project are divided,
and the proportion of grant division needs to be reviewed on each balance sheet day and changed if
necessary. (2) In government documents, if the purpose is expressed only in general terms and no
specific project is specified, the grant shall be regarded as a government grant related to the income.
Where a government grant is a monetary asset, it shall be measured according to the amount received
or receivable. If the government grants are non-monetary assets, they shall be measured at the fair
value; if the fair value cannot be obtained reliably, they shall be measured at the nominal amount.
Government grants measured in nominal amounts shall be recognized directly in current profits and
losses.
The Company usually confirms and measures the government grant according to the amount
when it is actually received. However, if there is conclusive evidence at the end of the period that the
relevant conditions stipulated in the financial support policy can be met and the financial support
funds are expected to be received, it shall be measured according to the amount receivable.
Government grants measured in accordance with the amount receivable shall meet the following
conditions at the same time: (1) The amount of the subvention receivable has been confirmed by the
authorized government departments, or can be reasonably calculated according to the relevant
provisions of the formally issued financial fund management measures, and there is no significant
uncertainty in the amount expected; (2) According to the "Regulations on the Openness of
Government Information" that the local financial department officially released and in accordance
with the provisions of the "Regulations on the Openness of Government Information," the financial
support project and its financial fund management measures should be inclusive (any eligible
enterprise can apply for them), rather than being specifically tailored to specific companies; (3)
The relevant grant approval has clearly promised the payment period, and the allocation of the
payment is guaranteed by the corresponding budget, so it can be reasonably ensure that it can be
received within the prescribed time limit; (4) Other relevant conditions (if any) to be met in
accordance with the specific circumstances of the Company and the grants.
Government grants related to assets are recognized as deferred earnings and are divided into
current profits and losses in a reasonable and systematic way during the service life of the assets
concerned. The government grants related to revenue, which are used to compensate for the related
cost or loss in the subsequent period, shall be recognized as deferred income, and shall be recognized
in profit or loss in the period in which the related costs or losses are recognized; if it is used to
compensate the related costs or losses that has occurred, it shall be directly recognized in the current
profit and loss.
It includes government grants related to both assets and income, and different parts are
separately classified for accounting treatment; if it is difficult to distinguish, the whole is classified as
government grants related to income.
Government grants related to the daily activities of the Company shall be included in other
income or cost deductions according to the nature of the economic business; government subsidies
unrelated to daily activities shall be included in the non-operating revenues and expenses.
When the recognized government grants need to be returned, if there are relevant deferred
earnings balances, the book balance of related deferred earnings shall be deducted, and the excess
part shall be included in the current profits and losses or the book value of assets shall be adjusted,
otherwise, the book value of assets shall be directly included in the current profits and losses.
The company will obtain preferential policy loans discount in accordance with the finance will
be allocated to the loan bank discount funds and the finance will be directly allocated to the company
discount funds in two cases:
(1) If the finance department allocates the discount interest funds to the lending bank, and the
lending bank provides the loan to the Company at the policy preferential interest rate, the Company
chooses to conduct accounting treatment according to the following methods: the loan amount
actually received shall be taken as the entry value of the loan, and the relevant borrowing costs shall
be calculated in accordance with the loan principal and the policy preferential interest rate.
(2) If the finance allocates the discount funds directly to the company, the company will offset
the corresponding discount against the relevant borrowing costs.
29. Deferred Income Tax Assets / Deferred Income Tax Liabilities
(1) Current Income Tax
On the balance sheet date, the current income tax liabilities (or assets) formed in the current and
previous periods are measured by the expected amount of income tax payable (or returned) in
accordance with the provisions of the Tax Law. The amount of taxable income on which current
income tax expenses are calculated is based on the corresponding adjustment of pre-tax accounting
profits in the reporting period in accordance with the relevant tax laws.
(2) Deferred Income Tax Assets and Deferred Income Tax Liabilities
The difference between the book value of certain assets and liabilities and their tax basis, and
the temporary difference between the book value of items that are not recognized as assets and
liabilities but which can be determined as their tax basis according to the tax law, are confirmed by
the balance sheet liability method.
Taxable temporary differences which related to the initial recognition of goodwill and the initial
recognition of an asset or liability arising from a transaction that is neither a business combination
nor an accounting profit or taxable income (or deductible loss), relevant deferred income tax
liabilities shall not be recognized. In addition, for taxable temporary differences related to
investments in subsidiaries, associates and joint ventures, if the Company is able to control the
turnaround time of temporary differences, and the temporary difference is unlikely to be reversed in
the foreseeable future, the related deferred income tax liabilities shall not be recognized. Except for
the above exceptions, the Company recognizes all other deferred income tax liabilities arising from
taxable temporary differences.
Taxable temporary differences which related to the initial recognition of an asset or liability
arising from a transaction that is neither a business combination nor an accounting profit or taxable
income (or deductible loss), relevant deferred income tax liabilities shall not be recognized. In
addition, for taxable temporary differences related to investments in subsidiaries, associates and joint
ventures, if the temporary difference is unlikely to be reversed in the foreseeable future, or the
amount of taxable income used to offset the temporary difference is unlikely to be obtained in the
future, the deferred income tax assets concerned shall not be recognized. Except for the above
exceptions, the Company recognizes other deferred income tax assets that can offset temporary
differences, subject to the amount of taxable income that is likely to be obtained to offset temporary
differences.
For deductible losses and tax credits that can be carried forward in subsequent years, the
corresponding deferred income tax assets are recognized to the extent that it is probable that the
future taxable income shall be used to offset the deductible losses and tax credits.
On the balance sheet date, the deferred income tax assets and deferred income tax liabilities
shall be measured at the applicable tax rates in the period in which the related assets are recovered or
the related liabilities are recovered in accordance with the tax laws.
On the balance sheet date, the book value of deferred income tax assets is reviewed. and the
book value of deferred income tax assets is written down if it is likely that sufficient taxable income
will not be available to offset the benefits of deferred income tax assets in the future. When it is
possible to obtain sufficient taxable income, the amount written down shall be reversed.
(3) Income tax expenses
Income tax expenses include current income tax and deferred income tax.
In addition to recognizing that the current income tax and deferred income tax related to other
transactions and matters directly included in shareholder's rights and interests shall be recognized in
other comprehensive income or shareholder's rights and interests, and the book value of adjusted
goodwill from deferred income tax resulting from the merger of enterprises, the other current income
tax and deferred income tax expenses or gains shall be recognized in profit or loss for the current
period.
(4) Offset of Income Tax
When the company has legal rights to settle on a net basis, and intends to settle on a net basis or
acquire assets and pay off liabilities at the same time, the company's current income tax assets and
current income tax liabilities shall be presented on a net basis after the offset.
When it has the legal right to settle current income tax assets and current income tax liabilities
on a net basis, and deferred income tax assets and deferred income tax liabilities are related to the
income tax levied by the same tax administration department on the same tax payer or to different tax
payers, but in the future, during each important period of deferred income tax assets and liabilities
being reversed, the taxpayer involved intends to settle the current income tax assets and liabilities on
a net basis, or acquire assets and pay off liabilities simultaneously, the deferred the income tax assets
and deferred income tax liabilities of the Company shall be presented on a net basis after offset.
30. Lease
Finance lease is a lease that essentially transfers all risks and rewards related to the ownership
of assets. Its ownership may or may not be transferred eventually. Leases other than finance leases
are operating leases.
(1) The Company records operating lease business as a lessee.
Rental expenses for operating leases shall be included in the related asset costs or current profits
and losses in the straight-line method during each period of the lease period. The initial direct costs
shall be included in the current profits and losses. Contingent rentals shall be recognized in profits
and losses when incurred.
(2) The company records operating leasie business as a lessor
The rental income of operating lease shall be recognized as current profit and loss according to
the straight-line method during each period of the lease period. The larger initial direct expenses are
capitalized when occurring, and the profits and losses of the current period shall be recorded in
stages on the same basis as the recognized rental income during the whole lease period; the smaller
initial direct expenses shall be recorded in the profits and losses of the current period when occurring.
Contingent rentals shall be included in current profits and losses when actually occurring.
(3) The company records finane lease business as a lessee
At the beginning of the lease period, the lower of the fair value of the leased assets and the
present value of the minimum lease payment on the lease start date is regarded as the entry value of
the leased assets, and the lowest lease payment shall be regarded as the entry value of the long-term
payables, and the difference shall be regarded as the unrecognized financing cost. In addition, the
initial direct costs attributable to the lease project shall also be included in the value of the leased
assets when they occur during the lease negotiation and the signing of the lease contract. The balance
of the minimum lease payment after deducting the unrecognized financing costs shall be presented as
long-term liabilities and long-term liabilities due within one year, respectively.
The unrecognized financing cost shall be calculated by the real interest rate method during the
lease period. Contingent rentals shall be included in current profits and losses when actually
occurring.
(4) The company records financie lease business as a lessor
At the beginning of the lease period, the sum of the minimum lease receipt and the initial direct
cost on the lease start date is regarded as the entry value of the financial lease receivable, and the
unsecured balance shall be recorded. The difference between the sum of the minimum lease
receivable, the initial direct cost and the unsecured balance and the sum of its present value is
recognized as the unrealized financing income. The balance of the receivable financial lease after
deducting the unrealized financial income shall be presented as long-term claims and long-term
claims maturing within one year, respectively.
The unrealized financing income shall be calculated and confirmed by the real interest rate
method during the lease period. Contingent rentals shall be recognized in current profits and losses
when actually occurring.
31. Other important accounting policies and accounting estimates
(1) Termination of business
Termination of operation refers to a component that meets one of the following conditions, can
be separately distinguished and has been disposed of or classified as held for sale by the Company:
① This component represents an independent major business or a separate major business area. ②
This component is part of an associated plan to dispose of an independent major business or a
separate major business area. ③ This component is a subsidiary company acquired specifically for
resale.
For the accounting treatment methods for termination of operations, please refer to the relevant
descriptions in Note 3, 12 “Assets held for sale and disposal group".
(2) Hedge accounting
In order to avoid some risks, the Company hedges some financial instruments as hedging
instruments. For the hedges meeting the specified conditions, the Company adopts the hedge
accounting method for treatment. The hedging of the Company is fair value hedging.
At the beginning of hedging, the Company formally designates hedging instruments and hedged
items, and prepares written documents on hedging relationship and risk management strategy and
risk management objectives of the Company engaged in hedging. In addition, the Company will
continuously evaluate the effectiveness of hedging at the beginning and after the hedging.
Fair value hedging
If a hedging instrument is designated as a fair value hedge and meets the conditions, the profits
or losses arising therefrom shall be included into the current profits and losses. If the hedging
instrument hedges the non-trading equity instrument investment (or its components) that is measured
at fair value and whose changes are included in other comprehensive income, the gains and losses
generated by the hedging instrument are included in other comprehensive income. The profit or loss
of the hedged item due to the hedged risk exposure shall be included into the current profits and
losses, and the book value of the hedged item shall be adjusted at the same time. If the hedged item is
measured at fair value, the gain or loss of the hedged item due to the hedged risk does not need to
adjust the book value of the hedged item, and the relevant gains and losses are included into the
current profits and losses or other comprehensive income.
When the Company cancels the designation of the hedging relationship, the hedging instrument
has expired or been sold, the contract has been terminated or exercised, or no longer meets the
conditions for the application of hedge accounting, the application of hedge accounting shall be
terminated.
32. Significant accounting judgments and estimates
In the process of applying accounting policies, due to the inherent uncertainty of business
activities, the Company needs to judge, estimate and assume the book value of statement items that
cannot be accurately measured. These judgments, estimates and assumptions are based on the
Company's management's past historical experience and other relevant factors. These judgments,
estimates and assumptions will affect the reported amounts of income, expenses, assets and liabilities
and the disclosure of contingent liabilities at the balance sheet date. However, the actual results
caused by the uncertainty of these estimates may be different from the current estimates of the
Company's management, resulting in a significant adjustment to the carrying amount of the assets or
liabilities affected in the future.
The Company reviews the aforesaid judgments, estimates and assumptions on a regular basis on
the basis of going concern. If the change of accounting estimates only affects the current period of
change, the number of impacts shall be recognized in the current period of change. If the change
affects both the current and future periods, the number of impacts will be confirmed in the current
and future periods of the change.
On the balance sheet date, the Company needs to judge, estimate and assume the amount of
financial statement items in the following important areas:
1. Impairment of financial assets
The Company uses the expected credit loss model to evaluate the impairment of financial
instruments. The application of the expected credit loss model requires significant judgment and
estimation, and all reasonable and basis information, including forward-looking information, shall be
considered. In making these judgments and estimates, the Company deduces the expected changes in
the debtor's credit risk based on historical data and combined with economic policies,
macroeconomic indicators, industry risks, external market environment, technological environment,
changes in customer conditions and other factors.
2. Inventory falling price reserves
According to the inventory accounting policy, the Company measures according to the lower of
cost and net realizable value. For the inventory whose cost is higher than net realizable value and
which is obsolete and unsalable, the Company makes provision for inventory falling price.
Impairment of inventories to net realizable value is based on the evaluation of the marketability of
inventories and their net realizable value. The appraisal of impairment of inventories requires the
management to make judgment and estimation on the basis of obtaining conclusive evidence and
considering factors such as the purpose of holding inventories and the influence of events after the
balance sheet date. The difference between the actual result and the original estimate will affect the
book value of inventory and the accrual or reversal of inventory depreciation reserve during the
period when the estimate is changed.
3. Provision for impairment of long-term assets
On the balance sheet date, the Company judges whether there are signs of possible impairment
for non-current assets other than financial assets. For intangible assets with uncertain service life, in
addition to the annual impairment test, the impairment test is also carried out when there are signs of
impairment. Other non-current assets other than financial assets shall be tested for impairment when
there are indications that their book amounts are not recoverable.
When the book value of an asset or asset group is higher than the recoverable amount, that is,
the higher of the net amount of the fair value minus the disposal expenses and the present value of
the estimated future cash flow, it indicates that an impairment has occurred
The net amount of the fair value less the disposal expenses shall be determined by referring to
the sales agreement price or observable market price of similar assets in fair transactions, and
deducting the incremental cost directly attributable to the disposal of such assets.
When estimating the present value of future cash flow, it is necessary to make a significant
judgment on the output, sales price, related operating costs and the discount rate used in the
calculation of the present value of the asset (or asset group). In estimating the recoverable amount,
the Company will use all relevant information available, including forecasts of production, selling
price and related operating costs based on reasonable and supportable assumptions.
The Company shall test whether goodwill is impaired at least every year. This requires an
estimate of the present value of the future cash flows of the asset group or portfolio of asset groups to
which goodwill has been allocated. When predicting the present value of future cash flow, the
Company needs to predict the cash flow generated by the future asset group or asset group portfolio,
and at the same time, select the appropriate discount rate to determine the present value of future
cash flow.
4. Depreciation and amortization
After considering the residual value of investment real estate, fixed assets and intangible assets,
the Company will accrue depreciation and amortization on a straight-line basis during their service
lives. The Company reviews the service life regularly to determine the amount of depreciation and
amortization expenses to be included in each reporting period. The service life is determined by the
Company based on the past experience of similar assets and in portfolio with the expected
technological updates. If there is a significant change in previous estimates, the depreciation and
amortization charges will be adjusted in the future.
5. Deferred income tax assets
To the extent that there is likely to be sufficient taxable profits to offset the losses, the Company
recognizes deferred income tax assets for all unused tax losses. This requires the Company's
management to use a large number of judgments to estimate the time and amount of future taxable
profits, combined with tax planning strategies, to determine the amount of deferred income tax assets
to be recognized.
6. Income tax
In the normal business activities of the Company, there are certain uncertainties in the final tax
treatment and calculation of some transactions. Whether some items can be paid before tax requires
the approval of the tax authorities. If there is a difference between the final determination result of
these tax matters and the amount initially estimated, the difference will have an impact on the current
income tax and deferred income tax during the final determination period.
7. Accrued liabilities
According to the terms of the contract, existing knowledge and historical experience, the
Company estimates and makes corresponding provision for product quality assurance, estimated
contract losses, liquidated damages for delayed delivery, etc. In the event that such contingencies
have formed a current obligation and the performance of the current obligations is likely to result in
outflow of economic benefits from the Company, the Company recognizes the contingencies as
estimated liabilities based on the best estimate of the expenditure required to perform the relevant
current obligations. The recognition and measurement of the estimated liabilities depend to a large
extent on the judgment of the management. In the process of judgment, the Company needs to
evaluate the risks, uncertainties, time value of money and other factors related to these contingencies.
Among them, the Company will make an estimated liability for the after-sales quality
maintenance commitments provided to customers for the sale, maintenance and renovation of the
goods sold. The Company's recent maintenance experience data have been taken into account when
estimating liabilities, but the recent maintenance experience may not reflect the future maintenance
situation. Any increase or decrease in this provision may affect the profit and loss in the future years.
8. Fair value measurement
Certain assets and liabilities of the Company are measured at fair value in the financial
statements. When estimating the fair value of an asset or liability, the Company adopts the available
observable market data available. If the first level input value cannot be obtained, the Company will
employ a qualified third-party appraiser to perform the appraisal. The Company works closely with
qualified external appraisers to determine the appropriate valuation techniques and inputs to the
relevant models
IV. Taxes
1. Main Taxes and Tax Rates
Types Tax Basis Tax Rate
After deducting the allowable amount of input tax
Value Added Tax deducted in the current period, the difference between
1%、3%、5%、6%、
the sales of goods, taxable services and taxable
services income calculated in accordance with the
Types Tax Basis Tax Rate
provisions of the Tax Law is the taxable value-added
9%、10%、13%
tax.
Urban Maintenance
According to the actual value-added tax 7%、5%
& Construction Tax
Extra charges of According to value added tax and consumption tax on
3%
education funds the basis of actual payment
Local Extra Charges According to value added tax and consumption tax on
2%
of Education Funds the basis of actual payment
25%、17%、15%、
Corporate Taxes According to taxable income
20%
According to 70% of original value of the real estate
(or rental income) as the tax base; according to the
Property Tax 12%、1.2%
original value of the real estate deducted 30% at a
time.
The company conducts VAT taxable sales or imports goods. According to the announcement
issued by Ministry of Finance, State Administration of Taxation and China Custom about the policy
relating to deepening VAT reform ( Announcement by Ministry of Finance, State Administration of
Taxation and China Custom (2019) No.39), from 1st April 2019 onwards, the applicable rates are
adjusted to 13%/9%. Meanwhile, the company can deduct VAT by additional deductible rate of 10%
from 1st April 2019 to 31st December 2021 because of its business nature as service provider.
Representation on tax payers of different enterprise income tax rates:
Tax Payers Income Tax Rate
Jingliang (Singapore) International Trade Co., 17%
Ltd.
Beijing Guchuan Bread Food Co., Ltd. 15%
Hangzhou Lin'an Chunmanyuan Agricultural 20%
Development Co., Ltd.
2. Important preferential tax policies and basis
Hangzhou Linan Little Angel Food Co., Ltd., a 4th tier subsidiary company of the Company, is
a welfare enterprise. Since May 2016, it has enjoyed the preferential VAT policy of immediate refund
upon payment in Preferential Value-Added Tax Policies for Promoting the Employment of Disabled
Persons (CaiShui [2016] No.52).
The level 2 subsidiary of the company-Jingliang Caofeidian Agricultural Development Limited,
according to the document JTCFDST(2018) No. 1539765025415 issued by tax authority of
Caofeidian District, Tangshan, affiliated to State Administration of Taxation, and also followed the
rules in Law of the People's Republic of China on the Administration of Tax Collection, The
Implementation Guideline of Law of the People's Republic of China on the Administration of Tax
Collection, the rice under the brand of Tixiang produced by Caofeidian company if exempted from
VAT.
The level 2 subsidiary of the company-Jingliang Caofeidian Agricultural Development Limited,
according to the rules under Clause 27 of Corporate Law and its Implementation Guideline Clause
86, the rice under the brand of Tixiang produced by Caofeidian company if exempted from
Corporation tax.
Beijing Guchuan Bread&Food Co., Ltd., a 3rd tier subsidiary of the Company, is a high-tech
enterprise. It enjoys the preferential tax policy of paying enterprise income tax at the 15% tax rate
according to the relevant provisions of both “Law of the People's Republic of China on Tax
Collection and Administration” and “Rules for the Implementation of the Tax Collection and
Administration Law of the People's Republic of China”. It obtained the certificate of high-tech
enterprise No. GR202111000657, valid until September 14, 2024.
The company level 3 subsidiary Beijing day weikang grease DiaoXiao center co., LTD.,
according to the national tax administration of the ministry of finance, the notice about food
enterprises exempted from VAT tax word (1999), article 5, 198, responsible for collection and
storage of grain purchase and sale of state-owned grain enterprises and business duty-free items
listed in the notice of other food business, and government reserves edible vegetable oil sales
enterprises, which should be examined by the competent tax authorities deemed tax-exempt status,
not reported to the competent tax authorities where the audit determined that no exemption, From
June 1, 2017 to December 31, 9999, the company will exempt edible vegetable oil stored by the
government from VAT.
Jingliang (Singapore) International Trade Co., Ltd., a 3rd tier subsidiary of the Company, levies
taxes on the principle of territoriality. The company is taxed on the territoriality principle. According
to Singapore's preferential tax policy, the company enjoys tax exemption plan is as follows: for the
first SGD$10,000 of taxable income amount the taxable income amount shall be reduced by 75%; for
the portion between SGD$10,001 and SGD$200,000, the taxable income amount shall be reduced by
50%; For the portion exceeding SGD$200,000, the taxable income amount shall not be reduced. The
company shall pay income tax at the rate of 17% on the taxable income amount after exemption.
In accordance with the relevant provisions of Ministry of Finance and State Administration of
Taxation “Notice on Preferential Enterprise Income Tax Policies for Employment of Persons with
Disabilities”(Cai Shui[2009] No.70), Hangzhou Linan Little Angel Food Co., Ltd. , a 4th tier
subsidiary company of the Company: Where an enterprise employs persons with disabilities, on the
basis of deduction according to the wages paid to the disabled workers, it may deduct the amount of
taxable income according to 100% of the wages paid to the disabled workers.
The company level 3 subsidiary Zhejiang Xiaowangzi Foodstuff Co., Ltd. and 4th tier
subsidiary company-Hangzhou Linan Little Angel Food Co., Ltd. ,are entitled to enjoy the urban
land use tax reduction policy of unified implementation of classification and grading for taxpayers in
the manufacturing industry within the province (including Ningbo City) according to the provisions
of the General Office of the People's Government of Zhejiang Province Document No. 62 of 2019,
and enjoy 100% and 80% reduction of urban land use tax for Class A and Class B enterprises
respectively until December 31, 2021, with the maximum reduction of 100% and 80% of the urban
land use tax payable by the Unit for the year.
Linqing Little Prince Food Co., Ltd., a fourth-level subsidiary of the company, shall be subject
to 50% of the sales revenue on the basis of the stamp tax payable in the industrial procurement link
and sales link in the purchase and sale contract of industrial enterprises according to the annountment
No.10, 2018 issued by Shandong Provincial Tax Bureau. The base of stamp duty payable in 2021
shall be calculated according to 50% of the sales revenue.
Company’s level 4 subsidiary-Liaoning Xiaowangzi Food Limited, according to the
Supplementary Announcement on Land Use Tax issued by Ministry of Finance and State
Administration of Taxation (89) GSDZ No.140 Clause 13 states that public land such as municipal
street, square, public green etc. can be exempted from land use tax, when computing land use tax, the
area used in the computation is total area less the area for afforest and street.
Company’s level 4 subsidiary-Hangzhou Lin'an Chunmanyuan Agricultural Development Co.,
Ltd. , according to the Announcement of the State Administration of Taxation on Matters Relating
to the Implementation of Preferential Income Tax Policies to Support the Development of Small and
Micro-profit Enterprises and Individual Entrepreneurs and State Administration of Taxation
Announcement No. 8 of 2021, from January 1, 2021 to December 31, 2022, for small and
micro-profit enterprises with annual taxable income not exceeding RMB1 million The part of the
annual taxable income of small and medium-sized enterprises shall be reduced by 12.5% of the
taxable income and the enterprise income tax shall be calculated at a tax rate of 20%.
The company level 4 subsidiary Jingliang (Hebei) Oil Industry Co., Ltd., according to the
financial department documents, local taxation bureau in hebei province, hebei province document ji
caishui [2019] no. 56 "about parts reserve commodity announcement concerning the tax policy,
accounting books shall be exempt from stamp duty for funds, to undertake business book stand in the
process of buying and selling contract commodity reserves shall be exempt from stamp duty, other
parties in the contract should pay the stamp duty shall also be subject to duty-payment according to
the parties. Property tax and land use tax of cities and towns shall be exempted from the property tax
and land use tax of cities and towns that undertake the business of commodity reserve for their own
use. The notice will be executed on January 1, 2019 and will terminate on 31st December., 2021.
Jingliang (Hebei) Oil Industry Co., Ltd., a 4th subsidiary company of the Company, exempts the
sale of edible vegetable oil stored by the government from VAT according to “Notice of the Ministry
of Finance and the State Administration of Taxation on the Levy and Exemption of Value Added Tax
for Food Enterprises”（Cai Shui [1999] No.198）
Ⅴ. Changes in accounting policies, accounting estimates, and explanation of corrections to
previous errors
1. Changes in accounting policies
(1) The Company adopted the relevant provisions of Chinese Accounting Standards for
Business Enterprises No.21 – Leases (Accounting (2018) No. 35) from January 1, 2021, and adjusted
the amounts of right-of-use assets, lease liabilities and other related items in the financial statements
based on the cumulative effect number, without adjusting the information for the comparable periods.
The change in accounting policy resulted in the following impacts
Implication for the financial position
Changes in accounting policies and reasons
and income
The new lease standard requires companies to separately
present right-of-use assets and lease liabilities in the
balance sheet (except short-term leases and leases of
low-value assets). Among them, lease liabilities are usually
divided into non-current liabilities and Current portion of The consolidated balance sheet as of
non-current liabilities. January 1, 2021 presents right-of-use
In the income statement, the lessee should show the assets of 7,787,410.08yuan, current
interest expense of the lease liabilities and the depreciation portion of non-current liabilities
expense of the right-of-use assets separately. The interest 1,154,817.69yuan, and lease liabilities
expense of lease liabilities is shown in the financial of 1,459,723.40yuan.
expense. The parent company has no leasing
The main accounts affecting the statement are right-of-use business,so the change in accounting
assets, lease liabilities, and Current portion of non-current policy has no effect on the parent
liabilities. company's statement items.
The amount of retained earnings and other related items in
the financial statements at the beginning of the year are
adjusted according to the cumulative effect.No adjustment
is made to the information of comparable periods.
(2) The Company adopted the relevant provisions of Chinese Accounting Standards for Business
Enterprises No.14 (Financial accounting [2021] No. 1) from January 1, 2021 to adjust the opening
amount of retained earnings and other related items in the financial statements based on the
cumulative effect number, without adjusting the information for the comparable periods. This change
in accounting policy has no impact on the Company's financial statement.
(3) The Company adopted the relevant provisions of Chinese Accounting Standards for
Business Enterprises No.15 (Financial accounting [2021] No. 35) on "Presentation related to
centralized management of funds" on January 1, 2021, and if the financial statements of an enterprise
before the issuance of the interpretation are not presented in accordance with the above provisions,
the financial statement data of the comparable period shall be adjusted in accordance with this
interpretation. The change in accounting policy has no impact on the Company's financial
statements.
2. Changes in accounting estimates
There is no change in accounting estimate during the reporting period.
3. Correction of previous accounting errors
There is no previous accounting error correction in this reporting period.
4. The Company implemented the new lease standard for the first time on January 1, 2021.
The impact of the financial statements as January 1, 2021 is as follows：
Consolidated Balance Sheet
Monetary Unit: RMB Yuan
Items 31 December 2020 1 January 2021 Adjustments
Current Assets:
Monetary capital 335,466,169.61 335,466,169.61
Transactional financial assets 63,478,071.73 63,478,071.73
Derivative financial assets
Notes receivable 456,565.85 456,565.85
Accounts receivable 92,245,667.60 92,245,667.60
Receivables financing
Prepayment 282,343,218.05 282,234,970.05 -108,248.00
Other receivables 541,905,656.97 541,905,656.97
Including: Interest receivable
Dividends receivable
Inventory 1,225,083,742.26 1,225,083,742.26
Contract assets
Held-for-sale assets
Non-current assets due within one year
Other current assets 845,450,678.36 845,450,678.36
Total current assets 3,386,429,770.43 3,386,321,522.43 -108,248.00
Non-current assets:
Long-term equity investment 217,762,487.79 217,762,487.79
Other equity instruments investment 20,000,000.00 20,000,000.00
Other non-current financial assets
Investment property 22,560,212.50 22,560,212.50
Fixed assets 1,131,143,854.07 1,131,143,854.07
Construction in process 28,458,413.67 28,458,413.67
Right-of-use assets 7,787,410.08 7,787,410.08
Intangible assets 354,139,335.32 354,139,335.32
Development expenditure
Goodwill 191,394,422.51 191,394,422.51
Long-term deferred expenses 20,529,601.50 15,464,980.51 -5,064,620.99
Deferred income tax assets 3,346,814.27 3,346,814.27
Items 31 December 2020 1 January 2021 Adjustments
Other non-current assets 319,739,581.67 319,739,581.67
Total non-current assets 2,309,074,723.30 2,311,797,512.39 2,722,789.09
Total assets 5,695,504,493.73 5,698,119,034.82 2,614,541.09
Current liabilities:
Short-term borrowings 1,497,414,079.05 1,497,414,079.05
Derivative financial liabilities 371,219,136.84 371,219,136.84
Accounts payable 75,384,075.39 75,384,075.39
Account collected in advance 1,087,874.02 1,087,874.02
Contract liabilities 346,874,260.90 346,874,260.90
Employee payroll payable 33,345,136.94 33,345,136.94
Taxes payable 50,884,214.64 50,884,214.64
Other payables 72,292,881.24 72,292,881.24
Including: Interest payable 21,082,795.47 21,082,795.47
Dividends payable 11,013,302.88 11,013,302.88
Current portion of non-current liabilities 1,154,817.69 1,154,817.69
Other current liabilities 8,319,696.79 8,319,696.79
Total current liabilities 2,456,821,355.81 2,457,976,173.50 1,154,817.69
Non-current liabilities:
Long-term borrowings
Long-term payable to employees 5,677,134.00 5,677,134.00
Estimated liabilities
Lease liabilities 1,459,723.40 1,459,723.40
Deferred income 68,716,699.34 68,716,699.34
Deferred income tax liabilities 65,115,801.22 65,115,801.22
Other non-current liabilities
Total non-current liabilities 139,509,634.56 140,969,357.96 1,459,723.40
Total liabilities 2,596,330,990.37 2,598,945,531.46 2,614,541.09
Owners' equity (or Shareholders' equity):
Capital stock 726,950,251.00 726,950,251.00
Other equity instruments
Including: Preferred stock
Perpetual capital bonds
Capital reserves 1,674,828,350.95 1,674,828,350.95
Items 31 December 2020 1 January 2021 Adjustments
Less: treasury stock
Other comprehensive income -363,258.66 -363,258.66
Special reserves
Surplus reserves 122,122,436.98 122,122,436.98
Undistributed profit 187,033,763.26 187,033,763.26
Total equity attributable to the parent company 2,710,571,543.53 2,710,571,543.53
Minority equity 388,601,959.83 388,601,959.83
Total owners' equity (or shareholders' equity) 3,099,173,503.36 3,099,173,503.36 -
Total liabilities and owners' equity (or shareholders' equity) 5,695,504,493.73 5,698,119,034.82 2,614,541.09
Ⅵ. Notes on Items in Consolidated Financial Statements
Note: The ‘beginning’ of the period refers to January 1, 2021 and the ‘end’ of the period refers
to December 31, 2021. The previous period refers to the year 2020 and the current period refers to
the year 2021
1. Monetary funds
(1) Classification list
Items Ending Balance Beginning Balance
Cash 15,012.17 16,761.72
Bank Deposits 465,853,913.24 299,235,964.61
Other Currency Funds 41,275,743.04 36,213,443.28
Total 507,144,668.45 335,466,169.61
Among them: the total amount of money deposited abroad 16,432,706.23 3,153,447.17
(2) At the end of the period, there are 215,857.76yuan of freezing and other restricted funds. Of
this amount, 166,353.66yuan was unfrozen before the reporting date.
(3) At the end of the period, there is no funds deposited abroad and the return of funds is
restricted.
2. Transactional financial assets
Items Ending Balance Beginning Balance
Financial assets measured at fair value with 40,377,048.08 63,478,071.73
changes included in current profits and losses
Among them: debt instrument investment 40,377,048.08 63,478,071.73
Total 40,377,048.08 63,478,071.73
3. Notes receivable
(1) Classification list
Items Ending Balance Beginning Balance
Bank acceptance bill 456,565.85
Commercial acceptance bill
Total 456,565.85
4. Accounts Receivable
（1）Disclosed according to aging
Aging Ending Balance
Within 1 Year (including 1 year) 74,560,540.98
Among them: Within the credit (within 3 65,852,621.38
months)
Credit period to 1 year 8,707,919.60
1 to 2 years (including 2 years) 8,594,045.46
2 to 3 years (including 3 years) 996,000.00
3 to 4 years (including 4 years)
4 to 5 years (including 5 years) 18,711.89
More than 5 years 433,259.50
Sub-total 84,602,557.83
Less Bad Debt provision 1,908,463.21
Total 82,694,094.62
（2）Present according to the method of provision for bad debt
Ending Balance
Book Balance Bad Debt Provision
Type(s)
Provision Book Value
Amount Ratio(%) Amount
Ratio(%)
Separate provision for bad
1,324,259.50 1.57 1,324,259.50 100.00
debts
Portfolio provision for bad
83,278,298.33 98.43 584,203.71 0.70 82,694,094.62
debts
Among them: portfolio 1 74,329,280.51 87.86 584,203.71 0.79 73,745,076.80
portfolio 2 8,949,017.82 10.58 8,949,017.82
Total 84,602,557.83 100.00 1,908,463.21 82,694,094.62
（Continued）
Beginning Balance
Book Balance Bad Debt Provision
Type(s)
Provision Book Value
Amount Ratio(%) Amount
Ratio(%)
Separate provision for bad
1,325,135.40 1.41 1,325,135.40 100.00
debts
Portfolio provision for bad
92,402,126.21 98.59 156,458.61 0.17 92,245,667.60
debts
Among them: portfolio 1 69,364,375.49 74.01 156,458.61 0.23 69,207,916.88
portfolio 2 23,037,750.72 24.58 23,037,750.72
Total 93,727,261.61 一一 1,481,594.01 一一 92,245,667.60
A. Separate provision for bad debts
Ending Balance
Name Accounts Bad Debt Provision Provision
Receivable Provision Ratio Reason
Beijing Xidan spicy town food expected
996,000.00 996,000.00 100.00
limited unrecoverable
Beijing Rongfa Lida Grain and expected
163,143.00 163,143.00 100.00
Oil Trade Co., Ltd. unrecoverable
expected
Others 165,116.50 165,116.50 100.00
unrecoverable
Total 1,324,259.50 1,324,259.50 －－ －－
B. Portfolio provision for bad debts
1. Portfolio provision: aging portfolio
Ending Balance Beginning Balance
Name Accounts Bad Debt Provision Accounts Bad Debt Provision
receivable Provision Ratio receivable Provision Ratio
Within 1 Year (including 1
65,611,523.16 34,531.93 69,026,628.09 7,466.13
year)
Among them: Within the
63,884,932.01 0 68,653,321.59 0
credit (within 3 months)
Credit period to 1 year 1,726,591.15 34,531.93 2 373,306.50 7,466.13 2
1 to 2 years (including 2
8,594,045.46 429,702.27 5 137,267.48 6,863.37 5
years)
2 to 3 years (including 3
20 31,789.50 6,357.90 20
years)
Ending Balance Beginning Balance
Name Accounts Bad Debt Provision Accounts Bad Debt Provision
receivable Provision Ratio receivable Provision Ratio
3 to 4 years (including 4
50 45,270.42 22,635.21 50
years)
4 to 5 years (including 5
18,711.89 14,969.51 80 51,420.00 41,136.00 80
years)
More than 5 years 105,000.00 105,000.00 100 72,000.00 72,000.00 100
Total 74,329,280.51 584,203.71 69,364,375.49 156,458.61
2. Portfolio provision: related parties portfolio
Ending Balance Beginning Balance
Name Accounts Bad Debt Provision Accounts Bad Debt Provision
receivable Provision Ratio receivable Provision Ratio
Related parties
8,949,017.82 23,037,750.72
portfolio
Total 8,949,017.82 23,037,750.72
3. details of bad debt provision
The amount changed for the period
Beginning Ending
Items Withdrawal or Other
Balance Addition Write-off Balance
reversal changes
Bad debt provision on
individual basis 1,325,135.40 875.90 1,324,259.50
Credit impairment
loss 156,458.61 446,165.10 18,420.00 584,203.71
Total 1,481,594.01 446,165.10 875.90 18,420.00 1,908,463.21
4.Accounts receivable actually written off in the current period
Items Write-off amount
Actual amount 18,420.00
During the period, the board of directors approved to write off the Beijing branch of Hainan
Food Holdings Co., Ltd. and to write off the uncollectible receivables.
5. Accounts Receivable of the Top 5 Balances Collected by Debtors at the End of the Period
Ratio of Whethe
Accounts Bad Debt
Debtors totalaccounts Aging r
receivable Provision
receivable (%) related
Tangshan Caofeidian District Within 3 months,
25,997,336.04 30.73 No 374,974.00
Finance Bureau 1-2 years
Ratio of Whethe
Accounts Bad Debt
Debtors totalaccounts Aging r
receivable Provision
receivable (%) related
Zhejiang Lvqin Supply Chain
9,215,135.62 10.89 Within 3 months No
Management Co., Ltd.
Wumart South Development
4,459,551.94 5.27 4-12 months No 30,502.52
Co., Ltd.
Shanghai Laiyifen Co.,Ltd. 3,446,650.77 4.07 Within 3 months No
Feed Branch of Beijing
Sanyuan Seed Technology 3,000,236.98 3.55 Within 3 months No
Co., Ltd.
Total 46,118,911.35 54.51 —— —— 405,476.52
5. Advanced Payment
(1) Advances are presented by age
Ending Balance Beginning Balance
Aging
Amount Ratio(%) Amount Ratio(%)
Within 1 year (including 1 year) 87,713,762.15 99.90 282,123,364.15 99.96
1 to 2 years (including 2 years) 90,000.00 0.10 88,505.90 0.03
2 to 3 years (including 3 years)
More than 3 years 23,100.00 0.01
Total 87,803,762.15 100.00 282,234,970.05 100.00
(2) Advance payment of the top five Ending Balances by prepaid objects
Ratio of the total ending
Ending
Debtor Name balance of prepayments
Balance
(%)
TIANJIN CUSTOMS DISTRICT P.R.CHINA 31,704,415.67 36.11
Sinograin Oils Corporation 12,362,849.07 14.08
Ahcof International Development Co., Ltd. 11,037,512.77 12.57
Cargill Ventures (China) Co., Ltd. 9,540,000.00 10.87
Louis Dreyfus (Tianjin) International Trade
6,603,326.46 7.52
Co., Ltd
Total 71,248,103.97 81.15
6. Other Receivables
A. Overview
(1) Classification
Item(s) Ending Balance Beginning Balance
Interest Receivable
Dividend Receivable
Other Receivables 284,756,636.27 541,905,656.97
Total 284,756,636.27 541,905,656.97
B. Other Receivables
（1）Disclosed according to aging
Aging Ending Balance
Within 1 Year (including 1 year) 283,134,947.28
Among them: Within the credit (within 3 months) 211,108,084.83
Credit period to 1 year 72,026,862.45
1 to 2 years (including 2 years) 885,837.00
2 to 3 years (including 3 years) 213,638.00
3 to 4 years (including 4 years) 99,713.99
4 to 5 years (including 5 years) 130,000.00
More than 5 years 393,197.85
Sub-Total 284,857,334.12
Less Bad Debt provision 100,697.85
Total 284,756,636.27
（2）Classification of other receivables by nature of funds
Nature of Funds Book Balance at End of Period Book Balance at Beginning of Year
Guaranteed Deposit and Deposit 277,445,730.08 535,330,041.21
Intercourse Funds of Units 6,142,777.03 5,472,834.58
Employee Receivables 755,783.37 532,115.87
Tax Refund Receivables 363,103.93 302,433.21
Personal Intercourse Funds 50,000.00
Others 149,939.71 274,695.69
Total 284,857,334.12 541,962,120.56
C. Details about allowance for bad debt
Provision for bad debt Stage 1 Stage 2 Stage 3 Total
Expected credit
Expected Expected credit
loss for the whole
credit loss in loss for the whole
period (with
the next 12 period (no credit
credit
months impairment)
impairment)
Amount on 1st January 2021
6,463.59 50,000.00 56,463.59
Carrying amount on 1st
January 2021 that in this
period:
——Get into Stage 2
——Get into Stage 3
——Get back to Stage 2
——Get back to Stage 1
Provision for the period 94,234.26 94,234.26
Reverse for the period
Transfer for the period
Write off for the period 50,000.00 50,000.00
Other changes
Amount on 31st December
100,697.85 100,697.85
2021
D. Details of bad debt provision
Carrying Amount changes for the period
Carrying
amount at
Type Withdrawal or Other amount at the
the Addition Write-off
reversal changes end
beginning
Credit
impairment 56,463.59 94,234.26 50,000.00 100,697.85
loss
Total 56,463.59 94,234.26 50,000.00 100,697.85
E. Other receivables actually written off in the current period
Items Write-off amount
Actual amount 50,000.00
During the period, the board of directors approved to write off the Beijing branch of Hainan
Food Holdings Co., Ltd. and to write off the uncollectible receivables
F. Other receivables according to top five of balance at end of period collected by debtors
Proportion in Ending
Nature of Balance at End overall ending balance of
Name of Organization Aging
Funds of Period balance of other bad debt
receivables (%) reserves
94,315,663.80 Within 33.11
Zhongtian Futures Co. Ltd Futures margin
1 year
89,987,154.70 Within 31.59
Haitong Futures Co., Ltd Futures margin
1 year
Sdic Cgog Futures Co., Futures margin 28,434,143.60 Within 9.98
Ltd. 1 year
Dalian Commodity Futures margin 23,269,880.00 Within 8.17
Exchange 1 year
Futures margin 19,127,100.00 Within 6.71
ADM International Sarl
1 year
Total — 255,133,942.10 — 89.57
G. Receivables related to government grants
Name of Carrying Aging at the
Name of the grant Time, amount and evidence of
government amount at the end of the
company expected collection
grants end period
All amount will be collected in
Tax Bureau of Linan
Refund of Within 3 January 2022, the company
DIatrict, Hangzhou, 363,103.93
VAT months always qualify for tax refund
Zhejiang Province
policy for disabled person
Total —— 363,103.93 —— ——
7. Inventory
(1) Inventory Category
Ending Balance Beginning Balance
Items Falling Price Falling Price
Book Balance Book Value Book Balance Book Value
Reserves Reserves
Raw Materials 120,983,829.85 120,997.67 120,862,832.18 303,448,302.51 303,448,302.51
Revolving 5,247,229.29 5,247,229.29 5,520,559.22 5,520,559.22
Materials
Goods and 522,101,505.11 522,101,505.11 36,413,482.38 36,413,482.38
materials in transit
Inventory goods 1,007,319,237.46 355,731.86 1,006,963,505.60 622,783,856.56 233,790.56 622,550,066.00
Ending Balance Beginning Balance
Items Falling Price Falling Price
Book Balance Book Value Book Balance Book Value
Reserves Reserves
Development costs 2,415,243.42 2,415,243.42
Developing 5,315,696.54 1,539,741.69 3,775,954.85
commodities
Commission 2,762,633.88 2,762,633.88
processing
Replacement of oil 248,197,500.00 248,197,500.00 248,197,500.00 248,197,500.00
reserve
Total 1,903,849,301.71 476,729.53 1,903,372,572.18 1,226,857,274.51 1,773,532.25 1,225,083,742.26
(2) Inventory Falling Price Reserves and provision for impairment of contract performance
costs
Increased
Decreased Amounts in the
Balance at Amounts in the
Current Period Balance at End of
Items Beginning of Current Period
Period
Year Recover or
Accrual Others Others
Charge Off
Stock Goods 233,790.56 185,390.40 63,449.10 355,731.86
Develop 1,539,741.69 1,539,741.69
Products
Raw material 120,997.67 120,997.67
In total 1,773,532.25 306,388.07 63,449.10 1,539,741.69 476,729.53
Note: the basis for the provision of depreciation is the market quotation of the world granary
website. The other reason is that the development commodities are adjusted to the investment real
estate, and the corresponding price adjustment is adjusted synchronously.(
（3）Stock Goods listed by major product type
Ending Balance Beginning Balance
Falling Falling
Items Book
Book Balance Price Book Value Price Book Value
Balance
Reserves Reserves
Grease 975,554,568.82 170,341.46 975,384,227.36 594,886,731.71 233,790.56 594,652,941.15
and
oils
Food 31,764,668.64 185,390.40 31,579,278.24 27,880,182.78 27,880,182.78
Others 16,942.07 16,942.07
Ending Balance Beginning Balance
Falling Falling
Items Book
Book Balance Price Book Value Price Book Value
Balance
Reserves Reserves
Total 1,007,319,237.46 355,731.86 1,006,963,505.60 622,783,856.56 233,790.56 622,550,066.00
8. Non-current assets due within one year
Balance at Beginning of
Items Balance at End of Period
Period
Three-year term deposits 156,139,100.00
In total 156,139,100.00
9. Other Current Assets
Balance at Beginning of
Items Balance at End of Period
Period
Financial Products 742,800,000.00 280,000,000.00
Pre-paid Taxes and Fees 1,192,806.93 16,921,026.50
Pending Deduct VAT Input Tax 13,930,489.13 46,701,271.74
Fair Value Changes of Items 62,577,325.41 501,828,380.12
Trapped at Hedging
In total 820,500,621.47 845,450,678.36
10. Long-term Equity Investment
Increase or Decrease in the Current Period
Balance at
Invested Unit Beginning of Additional Confirmed Profit and
Negative
Year Loss on Investment
Investment Investment
under Equity Law
1. Cooperative Enterprise
Beijing CHIA TAI Feedmill 90,824,898.49 21,297,148.65
Limited
Sub-total 90,824,898.49 21,297,148.65
2. Joint Venture
China Grain Reserves 119,601,316.43 16,973,446.46
(Tianjin) Warehouse
Logistics Co., Ltd.
Jingliang Mismi Catering 7,336,272.87 -448,014.87
Management (Beijing) Co.,
Ltd.
Sub-total 126,937,589.30 16,525,431.59
Total 217,762,487.79 37,822,580.24
(Continued)
Increase or Decrease in the Current Period Balance at Ending
Adjustment of Other Announce to Accrual of Others End of Balance of
other changes Distribute Impairment Period Impairment
comprehensive in equity Case Reserves Reserves
income Dividends
or Profits
-105,630.50 112,016,416.64
-105,630.50 112,016,416.64
-24,680,000.00 111,894,762.89
6,888,258.00
-24,680,000.00 118,783,020.89
-105,630.50 -24,680,000.00 230,799,437.53
11. Other equity instruments investment
Item Ending Balance Beginning Balance
Chongqing long jinbao network technology co. LTD 20,000,000.00 20,000,000.00
China Net Technology Investment Co., Ltd
Hainan General Chamber of Commerce
Total 20,000,000.00 20,000,000.00
12. Investment Real Estate
(1) Investment Real Estate Adopting Cost Measurement Model
Land Use Projects under
Items Buildings Total
Right Construction
One. Original Book Value
1. Balance at Beginning of Year 53,844,801.60 53,844,801.60
2. Increased Amounts in the
Current Period
(1) Outsourcing
(2) Inventory transfer
(3) Others
3. Decreased Amounts in the
Current Period
(1) Disposal
Land Use Projects under
Items Buildings Total
Right Construction
(2) Other transfer out
4. Balance at End of Period 53,844,801.60 53,844,801.60
Two. Accumulated Impairment and
Accumulated Amortization
1. Balance at Beginning of Year 20,696,792.40 20,696,792.40
2. Increased Amounts in the Current 1,634,528.94 1,634,528.94
Period
(1) Accrual or Amortization 1,634,528.94 1,634,528.94
3. Decreased Amounts in the
Current Period
(1) Disposal
(2) Other transfer out
4. Balance at End of Period 22,331,321.34 22,331,321.34
Three. Impairment Reserves
1. Balance at Beginning of Year 10,587,796.70 10,587,796.70
2. Increased Amounts in the Current
Period
(1) Accrual
(2) Inventory transfer
3. Decreased Amounts in the
Current Period
(1) Disposal
(2) Other transfer out
4. Balance at End of Period 10,587,796.70 10,587,796.70
Four. Book Value
1. Book Value at End of Period 20,925,683.56 20,925,683.56
2. Book Value at Beginning of Year 22,560,212.50 22,560,212.50
13. Fixed Assets
1. Overview
(1) Classification
Items Balance at End of Period Balance at Beginning of Year
Fixed Assets 1,120,758,409.49 1,131,143,854.07
Items Balance at End of Period Balance at Beginning of Year
Disposal of Fixed Assets
In total 1,120,758,409.49 1,131,143,854.07
2. Fixed Assets
(1) Fixed Assets Situation
Machinery Transportation Electronic Office
Items Buildings Others Total
Equipment Equipment Equipment Equipment
One. Original Book
Value
1. Balance at
1,078,081,803.33 749,741,236.96 21,309,684.25 12,169,795.89 6,663,883.31 1,982,310.67 1,869,948,714.41
Beginning of Year
2. Increased
Amounts in the 42,680,307.70 42,033,084.81 1,802,302.05 919,994.36 621,378.05 108,733.24 88,165,800.21
Current Period
(1) Purchase 1,039,623.58 7,384,654.28 1,802,302.05 919,994.36 621,378.05 108,733.24 11,876,685.56
(2) Roll-in of Project
36,324,987.58 34,648,430.53 70,973,418.11
under Construction
(3) Roll-in of
5,315,696.54 5,315,696.54
inventory
3. Decreased
Amounts in the 891,569.09 2,922,000.97 2,085,057.38 687,299.34 147,651.28 449,747.42 7,183,325.48
Current Period
(1) Disposal or
891,569.09 2,922,000.97 2,085,057.38 687,299.34 147,651.28 449,747.42 7,183,325.48
Scrap
4. Balance at End of
1,119,870,541.94 788,852,320.80 21,026,928.92 12,402,490.91 7,137,610.08 1,641,296.49 1,950,931,189.14
Period
Two. Accumulated
Impairment
1. Balance at
339,519,183.27 364,190,293.60 14,229,852.32 7,539,317.97 5,075,816.87 665,353.83 731,219,817.86
Beginning of Year
2. Increased
Amounts in the 39,480,369.58 52,269,780.02 1,448,240.33 1,413,475.10 567,746.97 125,917.77 95,305,529.77
Current Period
(1) Accrual 39,480,369.58 52,269,780.02 1,448,240.33 1,413,475.10 567,746.97 125,917.77 95,305,529.77
3. Decreased
Amounts in the 148,227.91 2,404,765.02 1,953,615.85 628,850.09 140,755.67 199,225.17 5,475,439.71
Current Period
(1) Disposal or
148,227.91 2,404,765.02 1,953,615.85 628,850.09 140,755.67 199,225.17 5,475,439.71
Scrap
Machinery Transportation Electronic Office
Items Buildings Others Total
Equipment Equipment Equipment Equipment
4. Balance at End of
378,851,324.94 414,055,308.60 13,724,476.80 8,323,942.98 5,502,808.17 592,046.43 821,049,907.92
Period
Three. Impairment
Reserves
1. Balance at
7,508,217.44 76,825.04 7,585,042.48
Beginning of Year
2. Increased
Amounts in the 1,539,741.69 1,539,741.69
Current Period
(1) Accrual
(2) Roll-in of
1,539,741.69 1,539,741.69
inventory
3. Decreased
Amounts in the 1,912.44 1,912.44
Current Period
(1) Disposal or
1,912.44 1,912.44
Scrap
4. Balance at End of
9,047,959.13 74,912.60 9,122,871.73
Period
Four. Book Value
1. Book Value at
731,971,257.87 374,722,099.60 7,302,452.12 4,078,547.93 1,634,801.91 1,049,250.06 1,120,758,409.49
End of Period
2. Book Value at
731,054,402.62 385,474,118.32 7,079,831.93 4,630,477.92 1,588,066.44 1,316,956.84 1,131,143,854.07
Beginning of Year
(2) Fixed assets without property right certificate
Project Book Value Reasons for failure to complete certificate of title
Buildings 2,236,948.76 No title certificate for auxiliary assets
14. Project under Construction
1. Overview
(1) Classification
Items Balance at End of Period Balance at Beginning of Year
Project under Construction 11,220,840.10 28,458,413.67
Total 11,220,840.10 28,458,413.67
2. Project under Construction
(1) Situation of Project under Construction
Balance at End of Period Balance at Beginning of Year
Items Book Impairment Book Impairment
Book Value Book Value
Balance Reserves Balance Reserves
1. roasted potato
supporting
6,986,820.05 6,986,820.05
automation line
project
2. Walnut cake
production line of 4,234,344.00 4,234,344.00 4,780,643.33 4,780,643.33
No.2 plant
3. slope treatment
project of No.3 3,584,245.07 3,584,245.07 3,565,377.15 3,565,377.15
plant
4. add two 4D
Corn Flake 3,207,668.25 3,207,668.25
production lines
5. 32,400 tons of
oil tank and
2,869,993.38 2,869,993.38
terminal oil
pipeline project
6. 2600bph
project of
2,809,734.52 2,809,734.52
packaging oil 10L
production line
7. New
production line of
small fried
1,784,537.82 1,784,537.82
compound potato
chips in leisure
No.1 Factory
8. New
production line of 2,038,825.39 2,038,825.39
fried potato chips
9. Fried potato
chips automation
1,552,470.00 1,552,470.00
transformation
project and others
10. Others 1,363,425.64 1,363,425.64 901,169.17 901,169.17
Total 11,220,840.10 11,220,840.10 28,458,413.67 28,458,413.67
(2) Change Condition of Important Engineering Projects under Construction in the Current Period
Roll-in Fixed Other
Increased
Balance at Assets Decreased
Amounts in Balance at
Project Name Beginning of Amount in the Amounts in
the Current End of Period
Year Current the Current
Period
Period Period
Baked potato supporting
6,986,820.05 7,468,869.13 14,455,689.18
automation line project
Walnut cake production
4,780,643.33 1,525,769.90 2,072,069.23 4,234,344.00
line of No.2 factory
Slope treatment project of
3,565,377.15 18,867.92 3,584,245.07
No.3 Factory
Two new 4D Corn Flake
3,207,668.25 1,939,772.10 5,147,440.35
production lines
32400 ton oil tank and
2,869,993.38 30,888,177.59 33,758,170.97
wharf oil pipeline project
2600bph project of
packaging oil 10L 2,809,734.52 2,809,734.52
production line
Production line of baked
potato workshop in No.2 1,784,537.82 790,120.35 2,574,658.17
factory
Fried potato chips
automation transformation 1,552,470.00 738,638.94 2,291,108.94
project and others
New production line of
2,038,825.39 2,038,825.39
fried potato chips
Total 27,557,244.50 45,409,041.32 63,108,871.36 9,857,414.46
（3）There was no provision for impairment of Project under Construction during the period.
15. Right-of-use asset
Transportation
Items Buildings Land Use Right In total
Equipment
One Original Book Value
1. Balance at Beginning of Year 2,614,541.09 202,276.99 4,970,592.00 7,787,410.08
2. Increased Amounts in the Current 1,808,764.67 1,808,764.67
Transportation
Items Buildings Land Use Right In total
Equipment
Period
(1) Lease 1,808,764.67 1,808,764.67
3. Decreased Amounts in the
Current Period
(1) Expiration of the lease or change
the lease term
4. Balance at End of Period 4,423,305.76 202,276.99 4,970,592.00 9,596,174.75
Two Accumulated Depreciation
1. Balance at Beginning of Year
2. Increased Amounts in the Current
1,337,882.83 99,917.64 112,968.00
Period 1,550,768.47
(1) Accrual 1,337,882.83 99,917.64 112,968.00
1,550,768.47
3. Decreased Amounts in the
Current Period
Lease expiration or change
4. Balance at End of Period 1,337,882.83 99,917.64 112,968.00 1,550,768.47
Three Impairment Reserves
1. Balance at Beginning of Year
2. Increased Amounts in the Current
Period
(1) Accrual
3. Decreased Amounts in the
Current Period
(1) Disposal
4. Balance at End of Period
Four Book Value
1. Book Value at End of Period 3,085,422.93 102,359.35 4,857,624.00 8,045,406.28
2. Book Value at Beginning of Year 2,614,541.09 202,276.99 4,970,592.00 7,787,410.08
16. Intangible Assets
(1) Intangible Assets Situation
Land Use Trademark Others
Items Software In total
Right Right
One Original Book Value
1. Balance at Beginning of
4,333,374.75 316,407,869.54 154,841,200.00 689,220.00 476,271,664.29
Year
Land Use Trademark Others
Items Software In total
Right Right
2. Increased Amounts in the
660,369.00 660,369.00
Current Period
(1) Purchase 660,369.00 660,369.00
3. Decreased Amounts in the
26,820.00 26,820.00
Current Period
(1) Disposal 26,820.00 26,820.00
4. Balance at End of Period 4,993,743.75 316,407,869.54 154,841,200.00 662,400.00 476,905,213.29
Two Accumulated
Amortization
1. Balance at Beginning of
3,597,758.64 61,830,987.64 56,035,371.69 5,811.00 121,469,928.97
Year
2. Increased Amounts in the
284,814.28 6,809,477.31 7,713,925.86 1,788.00 14,810,005.45
Current Period
(1) Accrual 284,814.28 6,809,477.31 7,713,925.86 1,788.00 14,810,005.45
3. Decreased Amounts in the
7,599.00 7,599.00
Current Period
(1) Disposal 7,599.00 7,599.00
4. Balance at End of Period 3,882,572.92 68,640,464.95 63,749,297.55 - 136,272,335.42
Three Impairment Reserves
1. Balance at Beginning of
662,400.00 662,400.00
Year
2. Increased Amounts in the
Current Period
(1) Accrual
3. Decreased Amounts in the
Current Period
(1) Disposal
4. Balance at End of Period 662,400.00 662,400.00
Four Book Value
1. Book Value at End of Period 1,111,170.83 247,767,404.59 91,091,902.45 339,970,477.87
2. Book Value at Beginning of
735,616.11 254,576,881.90 98,805,828.31 21,009.00 354,139,335.32
Year
17. Goodwill
(1) Original Book Value of Goodwill
Name of Invested Balance at Increase in the Current Decrease in the Current Balance at
Unit or Items Beginning of Period Period End of
Forming Goodwill Year Formed by Period
Enterprise Others Disposal Others
Merger
Acquire stock shares
of Zhejiang
191,394,422.51 191,394,422.51
Xiaowangzi Food
Co., Ltd.
In total 191,394,422.51 191,394,422.51
(2) Relevant information about the group or groups of assets that include goodwill
Book value of Asset group or portfolio of asset groups
goodwill Main components Book value Determinati Is there any
on method change in the
current period
191,394,422.51 Fixed assets, investment 835,262,103.15 Income No
real estate, intangible method
assets, construction in
progress, etc
Note: Taking December 31, 2021 as the base date of evaluation, Beijing Jinggrain Food Co., Ltd.
conducted impairment tests on the goodwill l formed by the acquisition of the equity of Zhejiang
Little Prince Food Co., Ltd. The book value of the asset group including goodwill was 835.26
million yuan, and the recoverable amount was no less than 843.20 million yuan. The test results
showed that there was no impairment of goodwill.
The component of group or groups of assets: impairment test for goodwill related asset as group
of asset, main cash in is independent from cash in of other group of assets, this group of assets
should be consistent with the group of assets that was recognized in the impairment test of goodwill
on acquisition date and previous years.
(3) Recognition method of goodwill impairment loss and process, key assumptions and key
parameters of goodwill test
1) At the end of the period, the company performed an impairment test on the asset group
related to goodwill. When performing an impairment test on a related asset group or asset group
combination that includes goodwill, if there is an impairment of the asset group or asset group
combination related to goodwill If there are signs, an impairment test is performed on the asset group
or combination of asset groups that does not include goodwill, and the recoverable amount is
calculated and compared with the book value to confirm the corresponding impairment loss. Then
perform an impairment test on the asset group or asset group combination that includes goodwill, and
compare the book value of the asset group or asset group combination that contains the distributed
goodwill with its recoverable amount. If the relevant asset group or asset group combination is
recoverable, The amount is lower than its book value, and the impairment loss of goodwill is
recognized.
2) Important key assumptions adopted and their basis: 1. As for the actual situation of assets on
the evaluation base date, it is assumed that the company continues to operate; 2. Assume that the
cash inflows rated as units after the evaluation base date are uniform inflows, and cash outflows are
uniform outflows; 3.On the basis of the existing management methods and management levels, the
company's business scope and methods are consistent with the current direction; 4. There will be no
major changes in the interest rates, exchange rates, taxation benchmarks and tax rates, and policy
levy fees; 5. The management of the unit being assessed is responsible, stable and capable of
performing its duties.
3）Key parameter
Revenue
Revenue growth
Forecast growth rate Pre-tax
Item rate over the Profit margin
period over the stable discount rate
forecast period
period
Zhejiang Little Calculated based on
Prince Food Co., 2022 to 2025 2.10% 0 forecasted revenue, 15.47%
Ltd. costs, expenses, etc.
(4) Impact of goodwill impairment test
After testing, the company's goodwill formed by the acquisition of the operating asset group of
Zhejiang Little Prince Food Co., Ltd. is not impaired.
18. Long-term Unamortized Expenses
Increased
Balance at Amortized Other
Amounts in Balance at
Items Beginning of Amounts in the Decreased
the Current End of Period
Year Current Period Amounts
Period
Reconstruction of majuqiao
14,888,320.13 674,188.08 14,214,132.05
plant
Amortization of laboratory
1,837,732.69 26,601.98 1,811,130.71
decoration costs
Factory No.3 compartment
604,558.74 604,558.74
maintenance
Housing renovation 576,660.38 275,532.06 98,195.53 753,996.91
Total 15,464,980.51 2,717,823.49 798,985.59 17,383,818.41
19. Deferred Income Tax Assets/Deferred Income Tax Liabilities
(1) Deferred Income Tax Assets Not Being Offset
Balance at End of Period Balance at Beginning of Year
Items Deductible Deductible
Deferred Income Deferred Income Tax
Temporary Temporary
Tax Assets Assets
Difference Difference
Asset Impairment
560,563.61 140,140.91 254,446.99 63,611.73
Reserves
Lease liabilities 196,089.81 49,022.46
Deductible Loss 30,360,671.96 7,590,167.99
Credit impairment Loss 1,808,563.08 452,140.67 1,368,158.01 341,929.04
Deferred Income 12,097,654.47 3,024,413.62 10,722,337.40 2,680,584.35
Wages payable 5,677,134.00 1,419,283.50 5,677,134.00 1,419,283.50
Valuation of Financial
Instruments and
33,944,248.10 8,486,062.03
Derivative Financial
Instruments
In total 54,284,253.07 13,571,063.19 48,382,748.36 12,095,576.61
(2) Details of Deferred Income Tax Liabilities Not Being Offset
Balance at End of Period Balance at Beginning of Year
Items Taxable Temporary Deferred Income Taxable TemporaryDeferred Income Tax
Difference Tax Liabilities Difference Liabilities
Valuation and 154,787,977.45 38,696,994.37 164,849,010.97 41,212,252.73
appreciation of assets
in merger of enterprises
not under the same
control
Valuation of Financial 26,215,702.16 6,553,925.54 130,600,895.97 32,652,310.83
Instruments and
Derivative Financial
Instruments
Total 181,003,679.61 45,250,919.91 295,449,906.94 73,864,563.56
(3)Details of Deferred Income Tax Liabilities after Offset
Carrying amount
Offseting Carrying amount
offseting amount of after offsetting
amount of after offsetting
deferred tax assets between deferred
Items deferred tax between deferred
and liabilities at the tax assets and
assets and tax assets and
end of last period liabilitie at the end
liabilities liabilities
of last period
Deferred tax asset 13,571,063.19 8,748,762.34 3,346,814.27
Deferred tax liabilities 45,250,919.91 8,748,762.34 65,115,801.22
(4)Details of Deferred Income Tax Assets Not Being Confirmed
Items Balance at End of Period Balance at Beginning of Year
Deductible temporary differences 200,597.85 33,884.15
Deductible Loss 107,793,038.93 100,248,841.85
In total 107,993,636.78 100,282,726.00
(5)Deductible loss on deferred income tax assets not being confirmed will be due at the
following years
Balance at End of
Year Balance at Beginning of Year Notes
Period
2021 4,504,020.42
2022 4,021,787.39 4,021,787.39
2023 19,123,515.53 19,123,515.53
2024 47,153,825.45 47,484,926.46
2025 25,114,592.05 25,114,592.05
2026 12,379,318.51
Total 107,793,038.93 100,248,841.85
20. Other Non-current Assets
Ending Balance Beginning Balance
Provis Provision
Items ion for for
Book balance Book value Book balance Book value
impair impairme
ment nt
Equipment 2,517,240.00 2,517,240.00
and Project
Funds
Three-year 189,741,996.74 189,741,996.74 317,222,341.67 317,222,341.67
term deposit
Total 189,741,996.74 189,741,996.74 319,739,581.67 319,739,581.67
21. Short-term Borrowings
（1）Classification of Short-term Borrowings
Items Balance at End of Period Balance at Beginning of Year
Guaranteed Loan 23,262,063.93 105,088,229.17
Fiduciary Loan 1,498,407,537.42 1,392,325,849.88
In total 1,521,669,601.35 1,497,414,079.05
22. Derivative financial liability
Item Ending balance Beginning balance
Changes in fair value of hedging instruments 70,305,871.37 371,219,136.84
Total 70,305,871.37 371,219,136.84
23. Accounts Payable
（1）Accounts Payable Listed
Items Balance at End of Period Balance at Beginning of Year
Material Funds Payable 176,725,835.45 60,908,293.40
Project Funds Payable 7,291,515.18 12,181,233.26
Equipment Funds Payable 1,746,573.40 1,182,750.00
Others 984,822.39 1,111,798.73
In total 186,748,746.42 75,384,075.39
24. Advance payment
（1）Advance payment Listed
Items Balance at End of Period Balance at Beginning of Year
Advance collection of rent 996,173.41 1,087,874.02
In total 996,173.41 1,087,874.02
25. Contract liabilities
（1） Classification of contract liabilities
Items Balance at End of Period Balance at Beginning of Year
Loans 520,816,995.93 341,860,984.30
Service payment 5,013,276.60
In total 520,816,995.93 346,874,260.90
26. Wages Payable
（1）List of Wages Payable
Balance at
Increase in the Decrease in the Balance at End
Items Beginning of
Current Period Current Period of Period
Year
One Short-term 32,098,807.71 325,952,837.77 317,293,973.00 40,757,672.48
Compensation
Two After-service Welfare- 1,246,329.23 31,654,445.70 31,527,796.92 1,372,978.01
Set up ESP liabilities
Three Dismission Welfare 503,074.27 503,074.27
Balance at
Increase in the Decrease in the Balance at End
Items Beginning of
Current Period Current Period of Period
Year
In total 33,345,136.94 358,110,357.74 349,324,844.19 42,130,650.49
（2）List of Short-term Compensation
Balance at
Increase in the Decrease in the Balance at End
Items Beginning of
Current Period Current Period of Period
Year
1. Wage, Bonus, Allowance 28,101,795.99 276,304,575.40 267,577,018.99 36,829,352.40
and Subsidy
2. Welfare Expense of 20.00 9,220,188.74 9,220,188.74 20.00
Employee
3. Social Insurance Expense 683,142.38 19,597,336.49 19,413,440.99 867,037.88
Among them: Medical 579,700.06 17,959,986.89 17,772,707.33 766,979.62
Insurance Premiums
Industrial Injury Insurance 52,319.34 1,046,126.00 1,033,071.93 65,373.41
Premiums
Birth Insurance Premiums 50,718.04 440,079.57 456,112.76 34,684.85
Others 404.94 151,144.03 151,548.97
4. Housing Provident Funds 294,633.05 15,146,374.28 15,311,842.10 129,165.23
5. Labor Union Expense and 3,019,216.29 5,684,362.86 5,771,482.18 2,932,096.97
Personnel Education Fund
In total 32,098,807.71 325,952,837.77 317,293,973.00 40,757,672.48
（3）List of Stated Drawings Plan
Balance at
Increase in the Decrease in the Balance at End
Items Beginning of
Current Period Current Period of Period
Year
1. Basic Pension Insurance 1,173,795.55 27,100,169.39 26,992,049.18 1,281,915.76
2. Unemployment Insurance 36,450.79 981,723.01 973,698.64 44,475.16
Expense
3. Enterprise Annuity 36,082.89 3,572,553.30 3,562,049.10 46,587.09
Charges
Total 1,246,329.23 31,654,445.70 31,527,796.92 1,372,978.01
27. Taxes and Fees Payable
Balance at Beginning of
Items Balance at End of Period
Year
Corporate Income Tax 74,174,903.15 21,972,563.71
Balance at Beginning of
Items Balance at End of Period
Year
VAT 23,320,246.23 20,557,653.24
Urban Maintenance and Construction Tax 1,876,669.91 1,662,803.83
House Property Tax 2,302,350.63 2,330,072.39
Land Use Tax 176,087.89 1,203,859.39
Individual Income Tax 671,107.90 1,681,176.51
Educational Surtax 760,843.86 663,399.57
Local Educational Surtax 559,372.28 494,409.45
Stamp Tax 500,830.44 314,395.32
Environmental protection tax 5,193.36 3,737.44
Water conservancy construction fee 247.04 143.79
In total 104,347,852.69 50,884,214.64
28. Other Accounts Payable
A. Overview
(1) Classification
Balance at Beginning of
Items Balance at End of Period
Year
Interest Payable 21,082,795.47 21,082,795.47
Dividends Payable 3,213,302.88 11,013,302.88
Other Accounts Payable 49,689,488.04 40,196,782.89
In total 73,985,586.39 72,292,881.24
B. Interest Payable
(1) Classification
Balance at Beginning of
Items Balance at End of Period
Year
Loan Interest between Enterprises 21,082,795.47 21,082,795.47
In total 21,082,795.47 21,082,795.47
C. Dividends Payable
(1) Classification
Balance at Beginning of
Items Balance at End of Period
Year
Balance at Beginning of
Items Balance at End of Period
Year
Common stock dividends 7,800,000.00
Others 3,213,302.88 3,213,302.88
In total 3,213,302.88 11,013,302.88
D. Other Accounts Payable
(1) List of Other Accounts Payable by Nature of Funds
Balance at Beginning of
Items Balance at End of Period
Year
Guaranteed Deposit and Deposit 25,053,238.93 16,271,518.35
Intercourse Funds between Units 9,931,464.29 13,468,108.09
Intercourse Funds of Related Parties 5,722,550.45 1,831,079.90
Personal Intercourse Funds 4,032,688.22 4,025,881.59
Various Insurances of Employee 2,768,202.89 2,102,370.03
Others 2,181,343.26 2,497,824.93
In total 49,689,488.04 40,196,782.89
29. Non-current liabilities due within one year
Item End balance Beginning balance
Current portion of lease liability 1,582,978.69 1,154,817.69
Total 1,582,978.69 1,154,817.69
30. Other current liability
1. Other current liability statement
Item End balance Beginning balance
Value-added tax to be written off 22,994,553.60 8,319,696.79
Total 22,994,553.60 8,319,696.79
31. Long term borrowing
Item End balance Beginning balance Interest Rate
Guaranteed Loan 71,000,000.00 3.51%
Total 71,000,000.00
32. Lease liability
Item End balance Beginning balance
Lease liability 1,694,702.62 1,459,723.40
33. Long term wage payable
(1)List of long-term wage payable
Items Balance at End of Period Balance at Beginning of Year
Net liabilities of defined benefit
plan in post employment
benefits
Dismission Welfare
Other Long-term Welfare 5,677,134.00 5,677,134.00
In total 5,677,134.00 5,677,134.00
34. Deferred Income
Balance at Increase in Decrease in Balance at
Items Beginning of the Current the Current End of Cause of Formation
Year Period Period Period
Government Subsidy 68,716,699.34 129,467.73 3,601,667.59 65,244,499.48
In total 68,716,699.34 129,467.73 3,601,667.59 65,244,499.48 --
Among them, items involving government subsidy are as follows:
Increase in Asset
Balance at Charge to Balance at
Items Receiving the Other related /
Beginning other End of
Subsidy Current changes income
of Year Profits Period
Period related
Enterprise foundation
supporting in the
construction stage of
"Tianjin Lingang 49,929,123.61 1,277,504.16 48,651,619.45 Asset related
Industrial Zone
Management
Committee"
Special subsidy for
infrastructure 10,296,486.90 908,692.09 9,387,794.81 Asset related
investment
The relocation
4,232,401.96 384,763.82 3,847,638.14 Asset related
compensation
Tianjin Binhai New
District’s Industrially 2,092,592.45 222,222.24 1,870,370.21 Asset related
Technical Renovation
and Park Construction
Increase in Asset
Balance at Charge to Balance at
Items Receiving the Other related /
Beginning other End of
Subsidy Current changes income
of Year Profits Period
Period related
Funds as well as
Expenditures for
Science and
Technology
Key technology
research and
industrialization
778,388.24 77,838.84 700,549.40 Asset related
project of "moderate
processing" of grain
and oil
Construction of
provincial grain
reserve information
633,746.30 200,686.32 433,059.98 Asset related
management system to
form asset entry
project
Research and
technology
demonstration of
green and clean 450,000.00 450,000.00 Asset related
production equipment
and process for edible
oil
Design of electric
heating system for oil 303,959.88 79,960.12 223,999.76 Asset related
tank
Special subsidies for
Beijing Reserve
129,467.73 129,467.73 Asset related
Granary Facility
Maintenance
In total 68,716,699.34 129,467.73 3,601,667.59 65,244,499.48 --
35. Share Capital
Balance at End
Changes in the Current Period（+、-）
Balance at of Period
Items Beginning of Share Transfer
Year New Share Share
of Provident Others Sub-total
Issue Donation Fund
1. Shares with
207,336,985.00 -164,877,598.00 -164,877,598.00 42,459,387.00
Restricted Conditions
(1) State Shareholding
Balance at End
Changes in the Current Period（+、-）
Balance at of Period
Items Beginning of Share Transfer
Year New Share Share
of Provident Others Sub-total
Issue Donation Fund
(2) State-owned -164,728,098.00 -164,728,098.00 149,500.00
Legal-person 164,877,598.00
Shareholding
(3) Other Domestic -149,500.00 -149,500.00 42,309,887.00
42,459,387.00
Capital Shareholding
Including: Domestic -149,500.00 -149,500.00 1,150,000.00
Legal-person 1,299,500.00
Shareholding
Domestic Natural 41,159,887.00
41,159,887.00
Person Shareholding
(4) Foreign
Shareholding
Including: Foreign
Legal-person
Shareholding
Foreign Natural
Person Shareholding
2. Tradable Shares
without Restricted 519,613,266.00 164,877,598.00 164,877,598.00 684,490,864.00
Conditions
(1) RMB Ordinary
454,638,266.00 164,877,598.00 164,877,598.00 619,515,864.00
Shares
(2) Domestically
64,975,000.00 64,975,000.00
Listed Foreign Shares
(3) Listed Foreign
Shares Overseas
(4) Others
In total 726,950,251.00 726,950,251.00
36. Capital Reserves
Balance at Increase in Decrease in
Balance at End
Items Beginning of the Current the Current
of Period
Year Period Period
Capital Premium (Stock 1,322,887,986.38 1,322,887,986.38
Premium)
Capital Reserves Roll-in 112,316,357.36 112,316,357.36
Under Original System
Other Capital Reserves 239,624,007.21 1,090,000.00 240,714,007.21
In total 1,674,828,350.95 1,090,000.00 1,675,918,350.95
Note: The increase of capital reserve was due to the funds received from the parent company,
Beijing Capital Agriculture Group, for technology projects of RMB1.09 million.
37. Other Comprehensive Incomes
Amounts Occurred in the Current Period
Amounts Less: included in other
Less: Other
Occurred comprehensive income Attributable to
Balance at Comprehensive Incomes Attributable to
Items before in the previous period Less: Income Tax Minority Balance at End of
Beginning of Charged at Earlier Stage Parent Company
Income Tax in and transferred to Expense Shareholders After Period
Year and Current Roll-in Profit After Tax
the Current retained income in the Tax
and Loss
Period current period
One Other
comprehensive incomes
that won’t be classified
into profit and loss
1. Remeasure and set
the change amount of
benefit plan
2. Other comprehensive
income that cannot be
transferred to profits
and losses under the
equity method
3. Changes in the fair
value of other equity
instrument investments
4. Changes in fair value
of the enterprise's own
credit risk
Amounts Occurred in the Current Period
Amounts Less: included in other
Less: Other
Occurred comprehensive income Attributable to
Balance at Comprehensive Incomes Attributable to
Items before in the previous period Less: Income Tax Minority Balance at End of
Beginning of Charged at Earlier Stage Parent Company
Income Tax in and transferred to Expense Shareholders After Period
Year and Current Roll-in Profit After Tax
the Current retained income in the Tax
and Loss
Period current period
Two Other -363,258.66 -319,023.56 -319,023.56 -682,282.22
comprehensive incomes
that will be classified
into profit and loss
1. Other comprehensive -355,212.00 -105,630.50 -105,630.50 -460,842.50
income transferable to
profit and loss under
the equity method
2. Changes in the fair
value of other debt
investments
3. Amount of financial
assets reclassified into
other comprehensive
income
4. Provision for credit
impairment of other
debt investment
5. Effective part of cash
flow hedging
Amounts Occurred in the Current Period
Amounts Less: included in other
Less: Other
Occurred comprehensive income Attributable to
Balance at Comprehensive Incomes Attributable to
Items before in the previous period Less: Income Tax Minority Balance at End of
Beginning of Charged at Earlier Stage Parent Company
Income Tax in and transferred to Expense Shareholders After Period
Year and Current Roll-in Profit After Tax
the Current retained income in the Tax
and Loss
Period current period
6. Converted difference -8,046.66 -213,393.06 -213,393.06 -221,439.72
between foreign
currency financial
statements
Total -363,258.66 -319,023.56 -319,023.56 -682,282.22
38. Surplus Reserves
Balance at Increase in the Decrease in the Balance at End of
Items
Beginning of Year Current Period Current Period Period
Statutory 84,487,609.05 84,487,609.05
Surplus
Reserves
Free Surplus 37,634,827.93 37,634,827.93
Reserves
In total 122,122,436.98 122,122,436.98
39. Undistributed Profit
Amounts in the Amounts in the
Items
Current Period Prior Period
Adjustment on undistributed profit at end of last 187,033,763.26 2,186,806.56
year
Adjustment on total number of undistributed
profit at beginning of period (increase+ and
decrease-)
Adjusted undistributed profit at beginning of 187,033,763.26 2,186,806.56
period
Add: net profit attributable to parent company in 204,459,771.08 184,846,956.70
the current period
Less: withdrawal legal surplus reserves
Withdrawal free surplus reserves
Withdrawal general risk reserves
Ordinary stock dividends payable
Ordinary stock dividends transferred to capital
Undistributed profit at end of period 391,493,534.34 187,033,763.26
40. Operation Revenue and Operation Cost
(1)Operation Revenue and Operation Cost
Amounts in the Current Period Amounts in the Prior Period
Items
Revenue Cost Revenue Cost
Prime Business 11,728,067,785.65 11,016,949,345.82 8,697,572,481.21 8,071,341,928.74
Other Business 35,026,049.91 20,205,123.68 44,177,430.90 19,505,316.68
In total 11,763,093,835.56 11,037,154,469.50 8,741,749,912.11 8,090,847,245.42
(2) Prime Business (Industry and Business-classified)
Name of Industry Amounts in the Current Period Amounts in the Prior Period
(or Business) Revenue Cost Revenue Cost
Oil and Oil Seeds 10,791,474,243.86 10,317,711,108.68 7,765,755,097.07 7,410,229,164.25
Food Processing 920,002,290.84 694,188,764.74 898,193,522.11 633,566,522.42
Others 16,591,250.95 5,049,472.40 33,623,862.03 27,546,242.07
In total 11,728,067,785.65 11,016,949,345.82 8,697,572,481.21 8,071,341,928.74
(3)Prime Business (Region-classified)
Name of Amounts in the Current Period Amounts in the Prior Period
Region Revenue Cost Revenue Cost
North China 10,123,343,396.24 9,651,908,242.01 7,884,008,703.50 7,498,580,786.26
East China 686,657,679.09 512,187,178.67 686,167,569.63 473,944,001.23
Northeast 137,074,930.91 111,781,498.62 127,396,208.08 98,817,141.25
China
South East 780,991,779.41 741,072,426.52
In total 11,728,067,785.65 11,016,949,345.82 8,697,572,481.21 8,071,341,928.74
41. Tariff And Annex
Amounts in the Current Amounts in the Prior
Items
Period Period
Urban Maintenance and Construction Tax 8,123,144.87 6,612,721.25
Educational Surtax 3,533,840.85 2,895,143.94
Local Educational Surtax 2,355,895.48 1,930,095.99
House Property tax 5,496,760.45 6,842,452.33
Land Use Tax 247,528.32 2,222,677.37
Stamp Tax 3,952,317.43 2,582,084.39
Vehicle and Vessel Use Tax 40,100.87 40,775.71
Land Value Added Tax 4,790.20
Other Taxes and Fees 39,411.60 51,780.08
In total 23,788,999.87 23,182,521.26
42. Sales Expenses
Amounts in the Amounts in the
Items
Current Period Prior Period
Employee Compensation (including social security, etc) 77,384,564.22 72,069,470.68
Sales Promotion Expenses 24,192,308.99 39,131,372.82
Warehousing Fees 11,180,870.38 13,401,508.98
Depreciation 13,626,528.80 13,195,597.53
Travel Expenses 6,561,854.51 5,425,245.85
Amounts in the Amounts in the
Items
Current Period Prior Period
Material consumption, sample and product cost 2,171,906.30 7,457,562.25
Lease fee 2,000,200.72 2,110,200.00
Repair Costs 1,600,732.45 4,741,287.38
Operation Expenses 3,122,152.06 4,142,565.31
Terminal Charges 1,123,800.00 1,769,880.36
Water and Electricity Fees 1,225,185.96 1,149,996.78
Commodity Wastage 116,599.55 1,144,468.29
Vehicle Fees 992,762.32 653,952.78
Packing Expenses 300,227.81 606,343.75
Test and Detection Fees 226,300.00 252,606.47
Business Entertainment Expenses 212,052.40 221,142.33
Labor Protection Fees 185,886.35 134,970.62
Commercial Insurance Expenses 14,344.90 9,339.62
Others 1,077,840.52 920,799.12
Total 147,316,118.24 168,538,310.92
43. Administration Expenses
Amounts in the Amounts in the
Items
Current Period Prior Period
Employee Compensation (including social security, etc) 121,587,427.82 105,757,801.44
Impairment Costs 18,237,865.60 21,138,588.30
Amortization of Assets 15,563,814.96 15,395,887.82
Fees of Employing Agent 13,163,766.91 12,235,888.01
Company Expenses 7,442,124.18 5,320,755.54
Repair Costs 3,259,784.08 3,347,098.20
Lease fee 3,039,488.99 3,335,385.77
Vehicle Fees 2,675,743.19 2,737,975.97
Security Protection Fees 1,469,824.47 953,250.21
Information Network Fees 1,312,483.04 2,558,612.63
Environmental Protection Fees 1,304,184.21 1,031,270.41
Business Entertainment Expenses 1,089,431.81 1,180,688.87
Commercial Insurance Expenses 995,916.41 991,422.05
Workers Insurance Expenses 956,937.28 970,146.22
Travel Expenses 713,609.91 409,662.51
Material Consumption 616,035.77 545,101.54
Amounts in the Amounts in the
Items
Current Period Prior Period
Labor Protection Fees 489,960.00 782,547.70
Taxes in Expenses 222,145.86 146,246.44
Other Expenses 4,627,347.70 700,399.30
In total 198,767,892.19 179,538,728.93
44. Research and Development Expenses
Amounts in the Prior
Items Amounts in the Current Period
Period
Salary 8,705,588.81 6,967,316.66
Material consumption 2,434,367.21 1,713,717.37
Design expense 391,188.30 308,142.99
Transportation Expense 35,559.99 48,507.01
Others 483,243.65 865,537.90
In total 12,049,947.96 9,903,221.93
45. Financial Expenses
Amounts in the Prior
Items Amounts in the Current Period
Period
Interest Expenses 42,302,007.06 31,742,996.45
Less: Interest Income 26,216,178.46 16,035,923.84
Exchange Profit and Loss 82,807.14 3,881,862.45
Service Charges 4,954,473.93 1,527,207.20
In total 21,123,109.67 21,116,142.26
46. Other Profits
Amounts in Amounts in
Items the Current the Prior
Period Period
Government Subsidy Related to Daily Corporate Activities 13,801,864.25 15,837,109.11
Return of Service Charges of Withholding Individual Income Tax 642,939.07 281,742.91
Refund of VAT and surtax 90,280.00 103,652.86
In total 14,535,083.32 16,222,504.88
47. Investment Income
Amounts in the Amounts in the
Items
Current Period Prior Period
Long-term equity investment income accounted 37,822,580.24 19,542,664.00
Amounts in the Amounts in the
Items
Current Period Prior Period
with equity method
Investment income from disposal of wealth 5,161,567.20 13,327,294.52
management products
Investment income of disposing trading financial 668,372.69 4,097,586.02
asssets
Investment income obtained during the holding of 387,257.58 401,460.93
transactional financial assets
Others 506,874.91
In total 44,039,777.71 37,875,880.38
48. Profits on Changes in Fair Value
Source of generating income with changes in fair Amounts in the Amounts in the
value Current Period Prior Period
Financial assets that are measured as per fair value -66,667,420.88 -16,467,791.36
and for which the changes are included in the
current profit and loss
Including: income with changes in fair value -66,667,420.88 -16,467,791.36
generated by derivative financial instruments
Trading financial liabilities
Investment real estate measured by fair value
In total -66,667,420.88 -16,467,791.36
49. Credit impairment loss
Amounts in the Amounts in the
Items
Current Period Prior Period
Accounts receivable bad debt loss -445,289.20 30,273.95
Other receivables bad debt loss -94,234.26 221,436.24
Total -539,523.46 251,710.19
50. Loss from Asset Devaluation
Amounts in the Current Amounts in the Prior
Items
Period Period
Loss on Bad Debts
Loss on Inventory Price Drop -306,388.07 -63,449.10
In total -306,388.07 -63,449.10
51. Assets Disposal Income
Amounts in the Amounts in the Prior
Items
Current Period Period
Gains or losses on disposal of fixed assets -208,369.12 38,752.37
In total -208,369.12 38,752.37
52. Non-operating Income
(1)Classification
Amounts
Amounts in Amounts in Charged to
Items the Current the Prior Non-recurring
Period Period Profit and
Loss
Total non current assets retirement gains: 72,098.18 37,474.17 72,098.18
Including: fixed assets scrap profit 72,098.18 37,474.17 72,098.18
profit from scrap of intangible assets
Penalty income 994,966.56 74,975.30 994,966.56
Payable amounts not required to be paid 487,265.26 487,265.26
Government Subsidy 174,221.00 60,000.00 174,221.00
Relocation Compensation 144,789.85 159,967.20 144,789.85
Other Gains 194,032.35 414,172.75 194,032.35
In total 2,067,373.20 746,589.42 2,067,373.20
(2)Government Subsidy Charged to Non-recurring Profit and Loss
Amounts in the Amounts in the Asset related /
Subsidy projects
Current Period Prior Period income related
Relocation Compensation 119,121.00 Income related
Incentive Funds 45,100.00 Income related
Special subsidies for the activities of "two 10,000.00 Income related
new" organisations
Quality and patent awards in 2020 50,000.00 Income related
Relief policy subsidy 10,000.00 Income related
Total 174,221.00 60,000.00 -
53. Non-operating Expenses
Amounts
Amounts in the Amounts in the Charged to
Items
Current Period Prior Period Non-recurring
Profit and Loss
Total loss on scrap of non current assets 157,143.75 457,274.93 157,143.75
Including: loss on scrap of fixed assets 157,143.75 457,274.93 157,143.75
Amounts
Amounts in the Amounts in the Charged to
Items
Current Period Prior Period Non-recurring
Profit and Loss
Penalty expenditure 24,500.00 1,020,523.67 24,500.00
Others 146,997.54 410,346.39 146,997.54
Total 328,641.29 1,888,144.99 328,641.29
54. Income Tax Expenses
(1) List of Income Tax Expenses
Amounts in the Amounts in the
Amounts in the Current Period
Prior Period Current Period
Income Tax Expenses of the Current Period 106,340,597.83 54,532,194.91
Deferred Income Tax Expenses -30,089,130.23 11,583,103.71
Total 76,251,467.60 66,115,298.62
(2) Accounting Profit and Income Tax Expense Adjustment Process
Items Amounts in the Amounts in the Prior
Current Period Period
Total Profits 315,485,189.54 285,339,793.18
Income tax expenses calculated by 78,871,297.39 71,334,948.30
statutory/applicable tax rate
Effect of subsidiary corporations being -1,844,755.24 -947,694.04
applicable to different tax rates
Adjustment on effect of income tax in the 2,489,564.19 430,220.89
prior period
Effect of Non-taxable Incomes -5,760,010.74 -3,847,972.30
Effect of Non-deductible cost, expense and -879,902.43 970,773.85
loss
Effect of deductible loss on usage of -5,363,511.97 -5,783,060.94
unconfirmed deferred income tax assets in
the prior period
Effect of deductible temporary difference or 9,498,499.81 6,278,648.02
deductible loss on unconfirmed deferred
income tax in the current period
Effect of deductions -795,213.37 -2,320,565.16
Others 35,499.96
Income Tax Expenses 76,251,467.60 66,115,298.62
55. Other comprehensive income items and their income tax impact and
transferred to profit and loss
See details of ‘Appendix Six Notes on Items in Consolidated Financial Statements,
37 Other Comprehensive Incomes’
56. Notes to items related cash flow statement
(1) Receiving other cash related to operation activities
Amounts in the Amounts in the
Items
Current Period Prior Period
Future Margins 1,459,292,560.77 874,862,645.55
Intercourse Funds of Other Units 106,778,161.58 47,080,919.02
Interest Income 17,053,537.35 15,727,323.95
Intercourse Funds of Related Parties 3,304,968.87 6,059,604.42
Non-operating Income and other income 4,106,124.86 14,165,759.99
Others 3,238,949.73 5,979,776.55
Total 1,593,774,303.16 963,876,029.48
(2) Other Cash Payment Related to Operation Activities
Amounts in the Amounts in the
Items
Current Period Prior Period
Future Margins 1,594,071,648.75 1,383,095,725.00
Payment for Administration Expenses 43,378,783.81 36,716,789.68
Intercourse Funds of Other Units 13,893,169.13 85,094,941.48
Payment for Operating Expenses 56,305,025.22 103,477,595.33
Intercourse Funds of Related Parties 7,669,514.72 27,810,666.27
Bank Charges 4,879,506.88 1,527,207.20
Petty Cash Paid 198,860.83 785,283.72
Non-operating Expenses 90,694.64 1,435,373.86
Others 6,689,174.26 10,217,449.20
In total 1,727,176,378.24 1,650,161,031.74
(3) Other cash received related to investment activities
Amounts in the Amounts in the
Items
Current Period Prior Period
Fixed assets subsidy 960,000.00
In total 960,000.00
(4) Other cash received related to financing activities
Amounts in the Amounts in the Prior
Items
Current Period Period
Subsidies related to R&D from Beijing Capital 1,090,000.00
Agriculture Group
In total 1,090,000.00
(5) Other cash paid related to financing activities
Amounts in the Amounts in the Prior
Items
Current Period Period
Acquisition of minority shareholders' equity of 104,730,266.66
Zhejiang Little Prince
Lease payment amount 937,516.52
In total 937,516.52 104,730,266.66
57. Supplementary Materials of Cash Flows Statement
(1) Supplementary Materials of Cash Flows Statement
Amounts in the Amounts in the
Supplementary Materials
Current Period Prior Period
1. Adjusting net accounting profit to operating
cash flow
Net Profit 239,233,721.94 219,224,494.56
Add: Assets Impairment Reserves 306,388.07 63,449.10
Credit impairment loss 539,523.46 -251,710.19
Fixed Assets Depreciation, Oil-and-gas Assets 98,490,827.18 111,137,864.85
Depreciation and Productive Biological Assets
Depreciation
Amortization of Intangible Assets 14,810,005.45 14,749,656.41
Amortization of Long-term Deferred Expenses 798,985.59 935,641.33
Losses on Disposal of Fixed Assets, Intangible Assets
and Other Long-term Assets (Fill in profit with symbol 208,369.12 -38,752.37
“－”)
Losses on Retirement of Fixed Assets (Fill in profit
85,045.57 419,800.76
with symbol “－”)
Losses on Changes in Fair Value (Fill in profit with
66,667,420.88 16,467,791.36
symbol “－”)
Financial Expenses (Fill in profit with symbol “－”) 42,302,007.06 31,742,996.45
Investment Losses (Fill in profit with symbol “－”) -44,039,777.71 -37,875,880.38
Decrease in Deferred Income Tax Assets (Fill in
-10,224,248.92 -743,747.89
increase with symbol “－”)
Increase in Deferred Income Tax Reliabilities (Fill in
-19,864,881.31 12,326,851.60
decrease with symbol “－”)
Amounts in the Amounts in the
Supplementary Materials
Current Period Prior Period
Decrease in Inventory (Fill in increase with symbol
-682,307,723.74 186,560,389.70
“－”)
Decrease in Items of Operating Receivables (Fill in
461,225,511.97 -682,322,952.93
increase with symbol “－”)
Increase in Items of Operating Receivables (Fill in
464,008,881.83 -118,936,802.44
decrease with symbol “－”)
Others
Net Cash Flows from Operating Activities 632,240,056.44 -246,540,910.08
2. Major investment and financing activities that do
not involve cash payments
Conversion of Debt into Capital
Convertible Bonds Due Within One Year
Fixed Assets under Financing Lease
3. Net change conditions in cash and cash
equivalents
Cash balance at end of period 506,928,810.69 334,389,017.41
Less: cash balance at beginning of period 334,389,017.41 555,097,777.21
Add: balance of the cash equivalents at end of period
Less: balance of the cash equivalents at beginning of
period
Cash and cash equivalent net increase quota 172,539,793.28 -220,708,759.80
(2) Composition of cash and cash equivalents
Balance at
Balance at End of
Items Beginning of
Period
Period
One Cash 506,928,810.69 334,389,017.41
Including: cash in stock 15,012.17 16,761.72
Bank deposit available for payment at any time 465,650,779.09 298,158,812.41
Other currency funds available for payment at any 41,263,019.43 36,213,443.28
time
Deposits with central bank available for payment
Interbank deposit
Interbank placements
Two Cash Equivalents
Including: bond investment maturing within three
months
Three Balance of Cash and Cash Equivalents at End 506,928,810.69 334,389,017.41
Balance at
Balance at End of
Items Beginning of
Period
Period
of Period
Including: restricted cash and cash equivalents used
by parent company or intra-group affiliates
58. Assets with restricted ownership or right to use
Items Book Value at End of Period Reasons being Restricted
Currency Funds 215,857.76 Letter of Credit Margin and
Account Suspension
Inventory 3,550,960.00 Pledge of warehouse receipts
Investment Real Estate 5,880,839.21 Litigation Freeze
Fixed Assets 5,822,183.64 Litigation Freeze
In total 15,469,840.61 ——
Note: Restricted amounts of 215,857.76yuan existed at the end of the period. Of which
166,353.66yuan was released from freeze before the reporting date.
59. Monetary Items of Foreign Currency
(1) Monetary Items of Foreign Currency
Balance of Foreign Balance of
Exchange Rate
Items Currency at End of Converting to RMB at
Convert
Period End of Period
Monetary fund 3,614,784.76 6.3757 23,046,783.19
Including: US Dollars 3,614,784.76 6.3757 23,046,783.19
Accounts receivable 93,368.00 6.3757 595,286.36
Including: US Dollars 93,368.00 6.3757 595,286.36
Short-term borrowing 125,857,140.16 6.3757 802,427,368.52
Including: US Dollars 125,857,140.16 6.3757 802,427,368.52
(2) Instruction of Operational Entity Overseas
The registrant and operating unit of the Company is Beijing Grain (Singapore)
International Trade Co., Ltd. with main business place of Singapore and recording currency
of US Dollars.
60. Hedging items and related hedging instruments
Please refer to 22. Derivative financial liability under Section VI of the Notes.
61. Government Subsidies
（1）Basic conditions of government grants
Amount recorded in
Type Amount Presentation item
profit and loss
VAT refunds 8,435,960.05 Other income 8,435,960.05
Special subsidy funds for Deferred income 1,277,504.16
infrastructure support fees 63,130,000.00
Special subsidy for infrastructure 18,176,788.00 Deferred income 908,692.09
input
Special subsidy for production line 4,500,000.00 Deferred income 450,000.00
technical reform
Subsidy for job stabilization 401,368.35 Other income 401,368.35
Compensation for demolition and 7,695,276.34 Deferred income 384,763.82
relocation
Subsidy for Work-in-Training 347,900.00 Other income 347,900.00
Tianjin Lingang Grain and Oil 4,000,000.00 Deferred income 222,222.24
Processing Warehouse and Logistics
Project of Beijing Grain Group
Provincial grain reserve information 633,746.30 Deferred income 200,686.32
management system construction
Job Stabilization Subsidy 180,870.53 Other income 180,870.53
Gas boiler low-NOx transformation 160,000.00 Other income 160,000.00
subsidy
Subsidy for the operation of the 133,165.00 Other income 133,165.00
home for the disabled
Compensation for demolition and 119,121.00 Non-operating 119,121.00
relocation income
Subsidies for disabled persons' jobs 118,177.13 Other income 118,177.13
Industrial enterprise incentive funds 100,000.00 Other income 100,000.00
Financial boiler low-NOx subsidy 80,000.00 Other income 80,000.00
Green cleaning and oil tank electric 855,179.48 Deferred income 79,960.12
heating
Oil and fat enzymatic moderate 1,089,743.60 Deferred income 77,838.84
refining sets of equipment
Training subsidies 65,500.00 Other income 65,500.00
Policy cashing incentive funds 55,100.00 Non-operating 55,100.00
income
Tax benefits for retired soldiers (VAT 45,000.00 Other income 45,000.00
benefits)
Smart manufacturing special funds 40,000.00 Other income 40,000.00
incentives (green factory)
Emergency turnover food subsidies 30,000.00 Other income 30,000.00
Amount recorded in
Type Amount Presentation item
profit and loss
Unemployment insurance rebate 23,705.60 Other income 23,705.60
2020 Foreign Economic and Trade 23,600.00 Other income 23,600.00
Project Subsidy
Others 14,950.00 Other income 14,950.00
In total 110,455,151.38 13,976,085.25
VII. Change in Consolidation Scope
The Company invested jointly with Sinograin Oils Corporation to establish
Jingliang (Yueyang) Grain and Oil Industry Co., Ltd, with a shareholding of 65%. The
subsidiary is in the stage of preparation for opening and has not yet completed the paid-in
capital. The above-mentioned entity was included in the scope of consolidation during the
reporting period.
VIII. Equities in Other Entities
1. Equities in Subsidiaries
(1) Composition of the Company
Shareholding Voting
Principle
Name of Registered Nature of Ratio (%) rights Mode of
Place of
Subsidiary Place Business ratio Acquisition
Business Direct Indirect (%)
Beijing Merger under
Investment
Jingliang Food Beijing Beijing 100 100 the same
management
Co., Ltd. control
Jingliang
Agricultural
(Tianjin) Grain Merger under
Product and
and Oil Tianjin Tianjin 70 70 the same
By Product
Industry Co., control
Processing
Ltd.
Beijing
Merger under
Jingliang Oil Grain and oil
Beijing Beijing 100.00 100.00 the same
and Fat Co., trade
control
Ltd.
Jingliang Agricultural
Merger under
(Hebei) Oil Product and
Hebei Hebei 51.00 51.00 the same
Industry Co., By Product
control
Ltd. Processing
Beijing Merger under
Grain and oil
Guchuan Edible Beijing Beijing 100.00 100.00 the same
trade
Oil Co., Ltd. control
Agricultural
Beijing Merger under
Product and
Eisen-Lubao Beijing Beijing 100.00 100.00 the same
By Product
Oil Co., Ltd. control
Processing
Beijing
Merger under
Tianweikang
Beijing Beijing Warehousing 100.00 100.00 the same
Oil Distribution
control
Center Co., Ltd.
Beijing Merger under
Food
Guchuan Bread Beijing Beijing 100.00 100.00 the same
Processing
Food Co., Ltd. control
Zhejiang Xiao Combination
Food
Wang Zi Food Hangzhou Hangzhou 17.6794 77.2072 94.8866 not under
Processing
Co., Ltd. same control
Hangzhou
Combination
Lin'an Food
Hangzhou Hangzhou 17.6794 77.2072 94.8866 not under
Xiaotianshi Processing
same control
Food Co., Ltd.
Liaoning Xiao Combination
Food
Wang Zi Food Liaoning Liaoning 17.6794 77.2072 94.8866 not under
Processing
Co., Ltd. same control
Linqing Xiao Combination
Food
Wang Zi Food Linqing Linqing 17.6794 77.2072 94.8866 not under
Processing
Co., Ltd. same control
Lin'an
Chunmanyuan Combination
Food
Agricultural Hangzhou Hangzhou 17.6794 77.2072 94.8866 not under
Processing
Development same control
Co., Ltd.
Jingliang
(Singapore) Establishment
Singapore Singapore Grain trade 100.00 100.00
International by investment
Trade Co., Ltd.
Jingliang Rural
Complex
Construction Land Establishment
Xinyi Xinyi 51.00 51.00
and Operations remediation by investment
(Xinyi) Co.,
Ltd.
Jingliang
(Caofeidian)
Establishment
Agricultural Tangshan Tangshan Plantation 51.00 51.00
by investment
Development
Co., Ltd.
Beijing
jingliang gubi Grain and oil Establishment
Beijing Beijing 100 100
oil and grease trade by investment
co. LTD
Jingliang
(Yueyang)
Agricultural Establishment
Grain and Oil Hunan Hunan 65.00 65.00
products by investment
Industry Co.,
Ltd.
(2) Major non-wholly-owned subsidiaries
Profit And Dividends
Balance of
Shareholding Voting rights Loss Distributed to
Minority
Ratio of ratio of Attributable to Minority
Name of Shareholder's
Minority Minority Minority Shareholders
Subsidiary Equity at the
Shareholders Shareholders Shareholders for the
End of the
(%) (%) for the Current Current
Period
Period Period
Zhejiang Xiao
Wang Zi
5.1134 5.1134 15,155,396.93 1,704,626.89 48,469,370.18
Food Co.,
Ltd.
Jingliang
(Tianjin)
Grain and Oil 30 30 18,060,680.13 265,260,839.72
Industry Co.,
Ltd.
Jingliang
(Hebei) Oil
49 49 1,756,853.44 2,009,000.00 37,180,745.87
Industry Co.,
Ltd.
Jingliang
(Caofeidian)
Agricultural 49 49 1,162,543.53 25,196,306.01
Development
Co., Ltd.
(3) Important financial information on major non-wholly-owned subsidiaries
Ending balance or Amount incurred in the current period
Jingliang
Jingliang Jingliang
Items Zhejiang Xiao (Caofeidian)
(Tianjin) Grain (Hebei) Oil
Wang Zi Food Agricultural
and Oil Industry Industry Co.,
Co., Ltd. Development
Co., Ltd. Ltd.
Co., Ltd.
Current Assets 545,563,045.64 1,393,747,379.61 272,382,537.61 63,924,854.13
Ending balance or Amount incurred in the current period
Jingliang
Jingliang Jingliang
Items Zhejiang Xiao (Caofeidian)
(Tianjin) Grain (Hebei) Oil
Wang Zi Food Agricultural
and Oil Industry Industry Co.,
Co., Ltd. Development
Co., Ltd. Ltd.
Co., Ltd.
Non-current
496,391,615.83 782,065,202.69 81,817,706.52 677,625.84
Assets
Total Assets 1,041,954,661.47 2,175,812,582.30 354,200,244.13 64,602,479.97
Current
158,579,977.51 1,235,715,663.77 274,199,358.63 7,710,550.95
Liabilities
Non-current
18,912,566.95 51,395,336.36 511,739.20
Liabilities
Total Liabilities 177,492,544.46 1,287,111,000.13 274,711,097.83 7,710,550.95
Operating 827,007,026.15 4,636,677,763.70 399,581,771.45 18,556,537.62
Income
Net Profit (Loss) 106,691,266.57 87,588,683.12 6,610,073.09 5,470,896.35
Total 106,691,266.57 87,588,683.12 6,610,073.09 5,470,896.35
Comprehensive
Income
Cash Flow from 116,629,645.06 724,136,543.87 108,028,487.75 -3,617,581.51
Operating
Activities
(Continued)
Beginning balance or Amount incurred in the prior period
Jingliang
Zhejiang Jingliang Jingliang
Items (Caofeidian)
Xiao Wang Zi (Tianjin) Grain (Hebei) Oil
Agricultural
Food Co., and Oil Industry Industry Co.,
Development Co.,
Ltd. Co., Ltd. Ltd.
Ltd.
Current Assets 348,212,958.32 1,451,014,894.50 355,193,589.41 65,278,291.00
Non-current
636,041,329.78 784,620,786.80 83,905,315.98 375,361.52
Assets
Total Assets 984,254,288.10 2,235,635,681.30 439,098,905.39 65,653,652.52
Current
140,227,047.42 1,283,603,409.67 361,352,282.65 14,232,619.85
Liabilities
Non-current
20,656,022.86 67,829,472.58 1,867,549.53
Liabilities
Total Liabilities 160,883,070.28 1,351,432,882.25 363,219,832.18 14,232,619.85
Operating Income 817,382,788.30 3,947,727,557.55 353,156,192.23 37,886,609.79
Beginning balance or Amount incurred in the prior period
Jingliang
Zhejiang Jingliang Jingliang
Items (Caofeidian)
Xiao Wang Zi (Tianjin) Grain (Hebei) Oil
Agricultural
Food Co., and Oil Industry Industry Co.,
Development Co.,
Ltd. Co., Ltd. Ltd.
Ltd.
Net Profit (Loss) 131,200,734.73 60,202,267.11 3,585,415.19 2,372,537.81
Total
Comprehensive 131,200,734.73 60,202,267.11 3,585,415.19 2,372,537.81
Income
Cash Flow from
Operating 26,043,033.24 -504,494,426.93 -16,169,538.34 -5,128,929.53
Activities
2. Equity in Joint Ventures or Affiliates
1. Important Joint Ventures or Affiliates
Shareholding Accounting
Ratio (%) Treatment
Name of Joint Principle
Registered Nature of Methods for
Venture or Place of
Place Business Investment in Joint
Affiliate Business Direct Indirect Ventures or
Affiliates
One Joint Ventures
1. Beijing
Zhengda Feed Co., Beijing Beijing Manufacturer 50.00 Equity method
Ltd.
Two Affiliates
1. SINOGRAIN
Transportation
(Tianjin)
Tianjin Tianjin and 30.00 Equity method
Warehousing
warehousing
Logistics Co., Ltd.
2. Jingliang
Missme Catering
Beijing Beijing Manufacturer 48.00 Equity method
Management
(Beijing) Co., Ltd.
2. Important financial information on major joint ventures
Ending Balance/Current Beginning Balance/Last
Amount Term Amount
Item
Beijing Zhengda Feed Beijing Zhengda Feed Co.,
Co., Ltd. Ltd.
Current assets 259,094,822.42 228,921,574.13
Ending Balance/Current Beginning Balance/Last
Amount Term Amount
Item
Beijing Zhengda Feed Beijing Zhengda Feed Co.,
Co., Ltd. Ltd.
Including: cash and cash equivalents 30,509,860.94 95,186,696.60
Non-current assets 24,949,630.10 25,478,642.09
Total assets 284,044,452.52 254,400,216.22
Current liabilities 59,463,197.04 73,979,867.51
Non-current liabilities 5,112,214.50 4,076,166.52
Total liabilities 64,575,411.54 78,056,034.03
Minority shareholder's equity
Shareholders' equity attributable to the 219,469,040.98 176,344,182.19
parent company
Share of net assets based on 109,734,520.49 88,172,091.10
shareholding ratio
Adjustments 2,652,807.39
-- Goodwill
-- Unrealized profits from internal
transactions
-- Other 2,652,807.39
Book value of equity investment in joint 109,734,520.49 90,824,898.49
ventures
Fair value of equity investment in joint
ventures with open offers
Operating income 369,615,151.09 336,626,475.66
Financial costs -5,587,491.34 -3,211,106.78
Income tax expense 14,082,117.12 11,205,730.33
Net profit 43,173,099.79 36,873,259.85
Net profit from discontinued operations
Other comprehensive income -211,261.00 -163,020.00
Total comprehensive income 42,961,838.79 36,710,239.85
Dividends received from joint ventures
in the current period
3. Important financial information on major affiliates
Ending Balance/Current Beginning Balance/Last Term
Amount Amount
Item SINOGRAIN (Tianjin) SINOGRAIN (Tianjin)
Warehousing Logistics Co., Warehousing Logistics Co.,
Ltd. Ltd.
Ending Balance/Current Beginning Balance/Last Term
Amount Amount
Item SINOGRAIN (Tianjin) SINOGRAIN (Tianjin)
Warehousing Logistics Co., Warehousing Logistics Co.,
Ltd. Ltd.
Current assets 104,812,139.17 87,560,108.46
Non-current assets 555,196,631.04 407,888,087.68
Total assets 660,008,770.21 495,448,196.14
Current liabilities 32,099,278.71 24,167,311.59
Non-current liabilities 250,581,609.08 72,609,829.76
Total liabilities 282,680,887.79 96,777,141.35
Minority shareholder's equity
Shareholders' equity 377,327,882.42 398,671,054.79
attributable to the parent
company
Share of net assets based on 113,198,364.73 119,601,316.43
shareholding ratio
Adjustments
-- Goodwill
-- Unrealized profits from
internal transactions
-- Others
Book value of equity 113,198,364.73 119,601,316.43
investment in affiliates
Fair value of equity investment
in affiliates with open offers
Operating income 52,065,840.85 36,413,675.87
Net profit 7,936,827.63 6,549,552.18
Net profit from discontinued
operations
Other comprehensive income
Total comprehensive income 7,936,827.63 6,549,552.18
Dividends received from 24,680,000.00
affiliates in the current period
IX. Risks Related to Financial Instruments
The Company's principal financial instruments include equity investment, creditors'
investment, borrowing, accounts receivable, accounts payable, etc. The primary purpose of
these financial instruments is to finance the operations of the Company.The Company has a
variety of other financial assets and liabilities directly arising from its operations, such as
accounts receivable and accounts payable.
The main risks caused by the Company's financial instruments are credit risk, liquidity
risk and market risk.
1. Classification of financial instruments
(1) Book value of various financial assets on the balance sheet date
A. December 31, 2021
Financial assets
Financial assets
Financial measured at fair
measured at fair value
Financial asset assets value and the
and the changes Total
items measured at changes recorded
recorded in other
amortized cost in current profits
comprehensive income
and losses
Monetary funds 507,144,668.45 507,144,668.45
Transactional 40,377,048.08 40,377,048.08
financial assets
Derivative
financial assets
Notes
receivables
Accounts 82,694,094.62 82,694,094.62
receivables
Other 284,756,636.27 284,756,636.27
receivables
Investment in
other equity
instruments 20,000,000.00 20,000,000.00
Current portion 156,139,100.00 156,139,100.00
of non-current
assets
Other current 742,800,000.00 62,577,325.41 805,377,325.41
assets
Other 189,741,996.74 189,741,996.74
non-current
assets
B. December 31, 2020
Financial assets
Financial assets
Financial measured at fair
measured at fair value
Financial asset assets value and the
and the changes Total
items measured at changes recorded
recorded in other
amortized cost in current profits
comprehensive income
and losses
Monetary funds 335,466,169.61 335,466,169.61
Transactional 63,478,071.73 63,478,071.73
financial assets
Financial assets
Financial assets
Financial measured at fair
measured at fair value
Financial asset assets value and the
and the changes Total
items measured at changes recorded
recorded in other
amortized cost in current profits
comprehensive income
and losses
Derivative
financial assets
Notes 456,565.85 456,565.85
receivables
Accounts 92,245,667.60 92,245,667.60
receivables
Other 541,905,656.97 541,905,656.97
receivables
Investment in 20,000,000.00 20,000,000.00
other equity
instruments
Other 319,739,581.67 319,739,581.67
non-current
assets
(2) Book value of various financial liabilities on the balance sheet date
A. December 31, 2021
Financial liabilities
measured at fair value and Other financial
Financial liability items Total
changes included in current liability
profits and losses
Short term loans 1,521,669,601.35 1,521,669,601.35
Derivative financial 70,305,871.37 70,305,871.37
liability
Accounts payable 186,748,746.42 186,748,746.42
Other Payables 73,985,586.39 73,985,586.39
B. December 31, 2020
Financial liabilities
measured at fair value and Other financial
Financial liability items Total
changes included in current liability
profits and losses
Short term loans 1,497,414,079.05 1,497,414,079.05
Derivative financial 371,219,136.84 371,219,136.84
liability
Accounts payable 75,384,075.39 75,384,075.39
Other Payables 72,292,881.24 72,292,881.24
2. Credit Risk
On December 31, 2021, the largest credit risk exposure that may cause financial loss
to the Company mainly comes from the loss on financial assets of the Company due to the
failure of the other party to perform its obligations, including:
Book value of financial assets recognized in the consolidated balance sheet; for a
financial instrument measured at fair value, its book value reflects its risk exposure instead
of their biggest risk exposure, and its biggest risk exposure may vary with the change of its
future fair value.
In order to reduce the credit risk, the Company sets relevant policies to control its
exposure, sets corresponding credit periods based on customer’s financial position,
possibility of obtaining guarantees from third parties, credit records and other factors such
as current market conditions and other credit qualifications for customer assessment, and
implements other monitoring procedures to ensure that necessary measures are taken to
recover overdue credits. In addition, the Company reviews the collection of individual
account receivables on each balance sheet date in order to make sufficient provision for bad
debts for collectable amounts. Therefore, the Company's management believes that the
Company's credit risk has been greatly reduced.
The liquidity funds of the Company are deposited in banks with high credit rating, so
the credit risk of liquidity funds is low.
3. Liquidity Risk
When managing liquidity risk, the Company keeps and monitors adequate cash and
cash equivalents approved by its management in order to meet the Company's business
needs and reduce the influences of cash flow fluctuations. The Company's management
monitors the use of bank loans and ensures the performance of loan agreements.
Maturity analysis of financial liabilities in terms of undiscounted contractual cash
flows:
December 31, 2021
Item Above Five
Within One Year 1 To 5 Years Total
Years
Short term loans 1,521,669,601.35 1,521,669,601.35
Derivative financial 70,305,871.37 70,305,871.37
liability
Accounts payable 185,082,028.27 1,666,718.15 186,748,746.42
Other Payables 73,985,586.39 73,985,586.39
(Continued)
December 31, 2020
Item Above Five
Within One Year 1 To 5 Years Total
Years
Short term loans 1,497,414,079.05 1,497,414,079.05
Derivative financial 371,219,136.84 371,219,136.84
liability
Accounts payable 72,075,894.39 3,308,181.00 75,384,075.39
72,292,881.24
Other Payables
72,292,881.24
4. Market risk
Market risk refers to the risk that the fair value or future cash flow of financial
instruments will fluctuate due to the change of market price. Market risk mainly includes
interest rate risk, foreign exchange risk and other price risks, such as equity instrument
investment price risk.
(1) Interest Rate Risk
The Company's interest rate risk mainly arises from bank loans. The financial liabilities
at floating interest rates bring the Company the interest rate risk on cash flow, while the
financial liabilities at fixed interest rates bring the Company the interest rate risk on fair
value. The Company decides the relative proportion of fixed interest rate contracts and
floating interest rate contracts according to the current market environment.
As of December 31, 2021, the Company's interest-bearing liabilities under floating
rate contracts denominated in RMB amounted to RMB 170,000,000.00 and those under
fixed rate contracts denominated in RMB amounted to RMB 1,351,669,601.35.
(2) Exchange Rate Risk
The Company's exposure to foreign exchange risks is primarily related to the
Company's operating activities (when revenues and expenditures are settled in foreign
currencies other than the Company's accounting standard currency) and its net investments
in its overseas subsidiaries.
The Company's exposure to foreign exchange risks is mainly related to US dollars.
Except that some of the Company's subsidiaries purchase and sell in US dollars, other
major business activities of the Company are priced and settled in RMB.
As at December 31, 2021, the Company's assets and liabilities are in RMB, except the
assets or liabilities described in the table below are in US dollars.
The foreign exchange risks arising from the assets and liabilities of such foreign
currency balances may have an impact on the Company's operating results.
Items Ending Balance Beginning Balance
Monetary funds 23,046,783.19 5,056,624.13
Accounts receivable 1,044,832.24
Short-term borrowing 802,427,368.52
Accounts payable 595,286.36
Other Payables 381,054.16
Note: The Company pays close attention to the impact of exchange rate fluctuations
on the Company.
The company adopts sensitivity analysis technology to analyze the possible impact of
reasonable and possible changes of risk variables on current profit and loss or owner's
equity. As any risk variable rarely changes in isolation, and the correlation between
variables will have a significant effect on the final impact amount of a risk variable change,
the following content is carried out under the assumption that the change of each variable is
independent.
On the assumption that foreign currency assets and foreign currency liabilities remain
relatively stable and other variables remain unchanged, the after-tax impact of possible
reasonable changes in exchange rate on current profits and losses and rights and interests is
as follows:
Current period
Item [US dollar] Gross profit/net
Increase/(decrease) in
Exchange rate profit increase
shareholders' equity
Increase /(decrease) /(decrease)
The yuan
depreciated against 5% -38,998,793.58 -38,998,793.58
the US dollar
The yuan
appreciated against -5% 38,998,793.58 38,998,793.58
the US dollar
Prior period
Item [US dollar] Gross profit/net
Increase/(decrease) in
Exchange rate profit increase
shareholders' equity
Increase / (decrease) /(decrease)
The yuan
depreciated against 5% 286,020.11 286,020.11
the US dollar
The yuan
appreciated against -5% -286,020.11 -286,020.11
the US dollar
X. Disclosure of Fair Values
1. Fair values of assets and liabilities measured at fair value at the end of the
period
Fair Values at the End of the Period
Item First Level Fair Second Level Third Level
Value Fair Value Fair Value Total
Measurement Measurement Measurement
One. Continuous fair
value measurement
Ⅰ. Transactional financial
40,377,048.08 40,377,048.08
assets
1. Financial assets that
are measured at fair value
and whose changes are 40,377,048.08 40,377,048.08
included in the current
profits and losses
(1) Investment in debt
40,377,048.08 40,377,048.08
instruments
(2) Investment in equity
instruments
Fair Values at the End of the Period
Item First Level Fair Second Level Third Level
Value Fair Value Fair Value Total
Measurement Measurement Measurement
(3) Derivative financial
assets
2. Financial assets
designated as fair value
through profit or loss
(1) Investment in debt
instruments
(2) Investment in equity
instruments
(3) Others
Ⅱ. Other debt investment
Ⅲ. Investment in other
20,000,000.00 20,000,000.00
equity instruments
Total assets
continuously measured 40,377,048.08 20,000,000.00 60,377,048.08
at fair value
Ⅵ.Transactional financial
70,305,871.37 70,305,871.37
liabilities
1. Financial liabilities
measured at fair value
70,305,871.37 70,305,871.37
with changes included in
current profits and losses
Including: transactional
bonds issued
derivative financial
70,305,871.37 70,305,871.37
liability
others
2. Financial liabilities
designated as fair value
through profit or loss
Total liabilities
continuously measured 70,305,871.37 70,305,871.37
at fair value
2. Basis for determining market prices of continuous and non-continuous first
level fair value measurement items
The Company makes offers for first level fair value measurement according to open
contracts of the futures exchange and the quote from the bank on financial product at the
end of the period.
3. Continuous and non-continuous third-level fair value measurement items
adopt valuation techniques and qualitative and quantitative information of important
parameters
The company‘s investment in other equity instruments of the third level fair value
measurement project is the ”three noes“ equity investment that without control, joint
control and significant influence held by the company. On the basis of analyzing the
operation status of the invested enterprise and combining with relevant situations, the
company takes the investment cost as the fair value of other equity instrument investment
for measurement at the end of the period.
XI. Related Parties and Related-Party Transactions
1. Identification criteria of related parties
If one party controls, jointly controls or exerts significant influence on the other party,
and two or more parties are controlled, jointly controlled or significantly influenced by the
same party, they constitute related parties.
2. Parent Company of the Company
Registered
Capital
Name of Parent Registered Legal Nature of
Company type (ten
Company Place representative Business
thousand
Yuan)
Wholly
Beijing Grain Wang Investment
state-owned Beijing 90,000.00
Group Co. Ltd. Zhenzhong Management
enterprise
(Continued)
Proportion of Voting
Proportion of Shares
Power Held by Parent The ultimate controlling Organization
Held by Parent Company
Company in the Company party of the Company code
in the Company (%)
(%)
Beijing State-owned
39.68 39.68 Capital Operation and 683551038
Management Center
3. Subsidiaries of the Company
See 1. Equity in Subsidiaries under Section VIII of the Notes for details.
4. Joint Ventures and Affiliates of the Company
See 3. Equity in Joint Ventures or Affiliates under Section VIII of the Notes for details.
5. Other Related Parties
Name of Other Related Party Relationship with the Company
Beijing Ershang Wangzhihe Food Co., Ltd. Controlled by the ultimate controlling party
Feed branch of Beijing Sanyuan Seed Industry Technology Co., Ltd Controlled by the ultimate controlling party
Hebei shounong Modern Agricultural Technology Co., Ltd Controlled by the ultimate controlling party
Name of Other Related Party Relationship with the Company
Beijing Shounong Consumption Assistance Innovation and
Controlled by the ultimate controlling party
Entrepreneurship Center Co., Ltd.
Beijing Guchun Food Co., Ltd Controlled by the ultimate controlling party
Hebei Luanping Huadu Food Co., Ltd Controlled by the ultimate controlling party
Beijing Er Shang palace Yifu Food Co., Ltd Controlled by the ultimate controlling party
Beijing Jingliang Dongfang grain and Oil Trading Co., Ltd Controlled by the ultimate controlling party
Huairou Brewery of Beijing Liubiju Food Co. Controlled by the ultimate controlling party
Beijing food supply office No.34 supply department Co., Ltd Controlled by the ultimate controlling party
Beijing Haidian Xijiao grain and oil supply station Co., Ltd Controlled by the ultimate controlling party
Beijing shounong Supply Chain Management Co., Ltd Controlled by the ultimate controlling party
Beijing Zhujun grain and oil supply Co., Ltd Controlled by the ultimate controlling party
Beijing Children soldiers grain and oil supply Co., Ltd Controlled by the ultimate controlling party
Beijing Wuhuan Shuntong Supply Chain Management Co., Ltd Controlled by the ultimate controlling party
Beijing Guchun rice Co., Ltd Controlled by the ultimate controlling party
Beijing baijiayi Food Co., Ltd Controlled by the ultimate controlling party
Beijing Sanyuan Food Co., Ltd Controlled by the ultimate controlling party
Beijing jinggrain e-commerce Co., Ltd Controlled by the ultimate controlling party
Beijing junchengyuan grain and oil purchase and Marketing Co., Ltd Controlled by the ultimate controlling party
Beijing Hongyuan Lijun grain and oil supply Co., Ltd Controlled by the ultimate controlling party
Beijing Dongfang Agricultural Group Supply Chain Management Co.,
Controlled by the ultimate controlling party
Ltd.
Beijing maliandou special supply station Co., Ltd Controlled by the ultimate controlling party
Beijing Liangguan Grain and Oil Supply Co., Ltd. Controlled by the ultimate controlling party
Beijing Huadu Yukou Poultry Co., Ltd. Controlled by the ultimate controlling party
Shanghai shounong Investment Holding Co., Ltd Controlled by the ultimate controlling party
Shandong Fukuan Bioengineering Co., Ltd Controlled by the ultimate controlling party
Beijing Yueshengzhai Halal Food Co., Ltd Controlled by the ultimate controlling party
Da Hong Men Meat Food Co.,ltd Beijing Er Shang Group Controlled by the ultimate controlling party
Beijing heiliu animal husbandry technology Co., Ltd Controlled by the ultimate controlling party
Beijing Capital Agriculture Group Controlled by the ultimate controlling party
Beijing Grain Group Co., Ltd Controlled by the ultimate controlling party
Beijing Academy of Food Science Controlled by the ultimate controlling party
Beijing jinggrain Dagu grain and Oil Trade Co., Ltd Controlled by the ultimate controlling party
Beijing Shounong Grain Reserve Co., Ltd. Controlled by the ultimate controlling party
Beijing Daxing National Food Reserve Co., Ltd Controlled by the ultimate controlling party
Beijing Shounong Development Co., Ltd. Controlled by the ultimate controlling party
Name of Other Related Party Relationship with the Company
Beijing dahongmen grain storage Co., Ltd Controlled by the ultimate controlling party
Beijing Nanyuan vegetable oil factory Co., Ltd Controlled by the ultimate controlling party
Beijing Grain Group Head Company Controlled by the ultimate controlling party
Beijing shounong Xiangshan Conference Center Co., Ltd Controlled by the ultimate controlling party
Beijing shounong Food Group Finance Co., Ltd Controlled by the ultimate controlling party
Tianjin Juxiang Technology Co., Ltd. Controlled by the ultimate controlling party
6. Related-party Transactions
A. Related-party transactions for purchasing and saling goods and provision and
acceptance of labor services
(1) Purchase of goods or acceptance of labor services
Related-party Last Term
Related Party Current Amount
Transaction Amount
Shanghai Sunlon Investment
Purchase of goods 65,000,554.51
HOLDINGS Ltd.
Beijing Guchun Food Co., Ltd Purchase of goods 17,625,723.68 13,155,894.06
Shandong Fukuan Bioengineering Co., Ltd Purchase of goods 780,495.67 164,147.79
Beijing Yueshengzhai Halal Food Co., Ltd Purchase of goods 562,891.05 511,156.63
Beijing Jingliang Dongfang grain and Oil
Purchase of goods 405,452.28 524,008.25
Trading Co., Ltd
Da Hong Men Meat Food Co.,ltd
Purchase of goods 394,945.43 403,578.27
Beijing Er Shang Group
Beijing Sanyuan Food Co., Ltd Purchase of goods 280,809.77 1,400,066.43
Beijing heiliu animal husbandry technology
Purchase of goods 203,640.70 99,883.20
Co., Ltd
Other related units Purchase of goods 306,797.14 402,640.52
Beijing Shounong Grain Reserve Co., Ltd. Storage fee 493,822.64
Beijing shounong Food Group Co., Ltd Display and
600,000.00
exhibition fees
(2) Sale of goods/ provision of labor services
Related-party Last Term
Related Party Current Amount
Transaction Amount
Shanghai shounong Investment Holding
Sale of goods 639,999,993.00
Co., Ltd
Beijing Ershang Wangzhihe Food Co.,
Sale of goods 62,085,307.44 71,047,922.42
Ltd.
Feed branch of Beijing Sanyuan Seed
Sale of goods 47,175,363.45 31,339,925.94
Industry Technology Co., Ltd
Related-party Last Term
Related Party Current Amount
Transaction Amount
Hebei shounong Modern Agricultural
Sale of goods 17,038,071.30 14,233,603.95
Technology Co., Ltd
Beijing Shounong Consumption Assistance
Innovation and Entrepreneurship Center Sale of goods 15,515,188.10 2,916,212.83
Co., Ltd.
Beijing Guchun Food Co., Ltd Sale of goods 15,317,021.38 5,605,452.37
Hebei Luanping Huadu Foodstuff Co., Ltd. Sale of goods 9,820,008.43
Beijing Ershang Xijie Foodstuff Co.,
Sale of goods 9,367,917.44
Ltd.
Beijing Jingliang Dongfang grain and Oil
Sale of goods 7,259,668.09 4,114,303.41
Trading Co., Ltd
Huairou Brewing Factory of Beijing Liubiju
Sale of goods 5,207,793.60 174,678.90
Food Co., Ltd
Beijing food supply office No.34 supply
Sale of goods 4,825,987.13 3,381,064.38
department Co., Ltd
Beijing Haidian Xijiao grain and oil supply
Sale of goods 3,014,544.41 15,886,751.23
station Co., Ltd
Beijing shounong Supply Chain
Sale of goods 2,427,623.76 29,226,266.13
Management Co., Ltd
Beijing Zhujun grain and oil supply Co.,
Sale of goods 2,406,903.69 5,097,181.62
Ltd
Beijing Children soldiers grain and oil
Sale of goods 2,219,449.54 3,366,280.71
supply Co., Ltd
Beijing Wuhuan Shuntong Supply Chain
Sale of goods 1,604,476.13 2,200,674.09
Management Co., Ltd
Beijing Guchun rice Co., Ltd Sale of goods 1,267,478.96 803,839.21
Beijing baijiayi Food Co., Ltd Sale of goods 1,172,768.81 478,710.09
Beijing Sanyuan Food Co., Ltd Sale of goods 747,433.70 470,695.16
Beijing Jingliang e-commerce Co., Ltd Sale of goods 682,187.95 711,015.24
Beijing junchengyuan grain and oil
Sale of goods 618,123.86 1,986,543.12
purchase and Marketing Co., Ltd
Beijing Hongyuan Lijun grain and oil
Sale of goods 492,201.84 735,871.56
supply Co., Ltd
Beijing maliandou special supply station
Sale of goods 70,642.20 2,757,335.78
Co., Ltd
Beijing Liangguan Grain and Oil Supply
Sale of goods 11,559.64 2,706,388.99
Co., Ltd.
Beijing huaduyukou poultry Co., Ltd Sale of goods 1,539,631.42
Related-party Last Term
Related Party Current Amount
Transaction Amount
Other-related units Sale of goods 2,215,034.03 3,008,834.25
Shanghai Sunlon Investment Holding Co., Provision of
12,533,333.63 23,867.92
Ltd services
Beijing Capital Agriculture Group Co., Ltd Provision of
599,999.98 799,999.97
services
Beijing Guchuan Food Co., Ltd Provision of
23,691.32 98,481.29
services
Beijing Grain Group Co., Ltd Provision of
574,150.93
services
Beijing Academy of Food Science Provision of
141,633.74
services
Beijing jinggrain Dagu grain and Oil Trade Provision of
245,377.35
Co., Ltd services
Related-party transactions for purchasing and saling goods and provision and
acceptance of labor services: The price of a related-party transaction shall be equal to the
price charged for a unrelated-party transaction that is same as or similar to such
related-party transaction.
B. Related-party lease
(1) If the Company is the lessor,
Pricing Lease Income Lease Income
Lease
Name of Type of Lease basis of Recognized in Recognized in
termination
Lessee Leased Asset start date rental the Current the Prior
date
income Period Period
Beijing
January 1, December Market
Guchuan Food House leasing 13,333,333.30
2020 31,2020 price
Co., Ltd.
Beijing
Jingliang Warehouse January 1, December Market
664,311.28
E-commerce leasing 2020 31,2020 price
Co., Ltd.
Beijing
Jingliang Vehicle January December Market
11,265.13 22,530.26
E-commerce leasing 1, 2021 31,2021 price
Co., Ltd
Total -- -- -- -- 11,265.13 14,020,174.84
(2)If the Company is the lessee,
Lease Expense
Pricing basis of Lease Expense Recognized
Name of Lessee Type of Leased Asset Recognized in the Prior
rleasing fee in the Current Period
Period
Lease Expense
Pricing basis of Lease Expense Recognized
Name of Lessee Type of Leased Asset Recognized in the Prior
rleasing fee in the Current Period
Period
Beijing Daxing National
Grain Purchasing & House leasing Market price 1,935,963.30 2,110,200.00
Storage Warehouse
Beijing Shounong
House leasing Market price 1,803,247.58 1,297,946.86
Development Co., Ltd.
Beijing Dahongmen
House leasing Market price 623,474.62
Foodstuff Storage
Beijing Grain Group Co.,
House leasing Market price 555,229.36 1,075,575.22
Ltd.
Beijing Nanyuan Plant Oil
House leasing Market price 311,926.61
Factory
Beijing Grain Group Head
House leasing Market price 33,027.52
Company
Total -- -- 5,262,868.99 4,483,722.08
3. Other Related-party Transactions
Related-party Last Term
Guaranteed Party Current Amount
Transaction Amount
Beijing Dahongmen Heating fee, cleaning
177,183.60 60,359.34
Foodstuff Storage fee, electricity fee
Beijing Shounong
Utilities, property fees 98,847.10 52,527.02
Development Co., Ltd.
Beijing Haidian Xiangshan
Conference service fees 20,654.60
Rest House
Beijing Shounong Food 1,589,080.65
Interest income 396,546.91
Group Finance Co., Ltd.
Beijing Guchuan Food C
o., Ltd. Brand royalty 2,561,865.51
2,959,185.29
Beijing Guchuan Rice Co.,
Brand royalty 186,540.99 192,513.09
Ltd.
Beijing Jingliang Dongfang
Grain and Oil Trading Co., Brand royalty 2,230.47 3,874.42
Ltd.
Tianjin Juxiang Technology
Technical Service Fee 1,582.20
Co., Ltd.
(3)Remuneration for key management staff
Current Amount (Unit: ten Last Term Amount (Unit: ten
Item
thousand yuan) thousand yuan)
Remuneration for Key
624.05 528.28
Management Staff
7. Related-party Receivables and Payables
(1) Receivables
Ending Balance Beginning Balance
Item Related-party Book Provision Book Provision
Balance for Bad Balance for Bad
Debts Debts
Monetary Beijing shounong Food
167,000,000.00 158,585,719.53
funds Group Finance Co., Ltd
Feed Branch of Beijing
Receivables Sanyuan Seed Technology 3,000,236.98 1,544,618.10
Co., Ltd.
Beijing Shounong
Consumption Assistance
Innovation and 1,359,375.00 3,178,672.00
Entrepreneurship Center Co.,
Ltd.
Beijing Guchun Food Co.,
1,260,000.00 330,872.00
Ltd
Shanghai Sunlon Investment
1,002,945.54
HOLDINGS Ltd.
Beijing Ershang Xijie
621,830.00
Foodstuff Co., Ltd.
Beijing Jingliang Dongfang
grain and Oil Trading Co., 584,491.00 914,231.75
Ltd
Hebei Shounong Modern
Agricultural Technology Co., 369,525.30 1,473,919.32
Ltd.
Beijing Zhujun grain and oil
261,500.00 1,598,080.00
supply Co., Ltd
Beijing baijiayi Food Co.,
196,800.00 23,100.00
Ltd
Beijing Dongfang
Agricultural Group Supply 161,106.00
Chain Management Co., Ltd.
Beijing Guchun rice Co., Ltd 72,688.00
Beijing Junyuan grain and
oil purchasing and 43,000.00 1,009,912.00
Marketing Co., Ltd
Ending Balance Beginning Balance
Item Related-party Book Provision Book Provision
Balance for Bad Balance for Bad
Debts Debts
Beijing Ershang Yihe
Sunshine Real Estate Co., 15,520.00
Ltd.
Beijing Ershang Wangzhihe
8,584,555.70
Food Co., Ltd.
Beijing shounong Supply
1,965,569.85
Chain Management Co., Ltd
Beijing Haidian Xijiao grain
and oil supply station Co., 1,420,904.00
Ltd
Beijing Liangguan grain and
672,100.00
oil supply Co., Ltd
Beijing Wuhuan Shuntong
Supply Chain Management 147,000.00
Co., Ltd
Beijing food supply
department No.34 supply 83,260.00
department Co., Ltd
Beijing Jingliang
56,600.00
e-commerce Co., Ltd
Beijing zidibing grain and oil
29,106.00
supply Co., Ltd
Beijing shounong Xiangshan
5,250.00
Conference Center Co., Ltd
(2) Payables
Item Related-party Ending Balance Beginning balance
Contract Shanghai Sunlon Investment
3,943,587.12
liability HOLDINGS Ltd.
Payables Beijing Guchun Food Co., Ltd 358,762.54 293,871.55
Beijing Er Shang Mo Qi Zhong
382.30
Hong Foods Co., Ltd.
Beijing Jingliang Dongfang grain
294.51 20,674.03
and Oil Trading Co., Ltd
Beijing Sunnyum Foods Co.,
31.19
Ltd.
Beijing Sanyuan Food Co., Ltd 13,677.70
Beijing Yueshengzhai Islamic
1,922.50
Food Co., Ltd.
Beijing Changyang farm Co., Ltd 1,470.00
Beijing Grain Group Co.,
Other payables 2,819,620.39 1,712,270.30
Ltd.
Shanghai Sunlon Investment
2,591,003.45
HOLDINGS Ltd.
Beijing Nanyuan vegetable oil
311,926.61
factory Co., Ltd
Beijing Jingliang e-commerce
118,809.60
Co., Ltd
8. Related-party Commitments
The Company has no related-party commitments this year.
XII. Share based payment
There are no share based payments incurred this year for the company.
XIII. Commitments and Contingencies
The company's subsidiary Beijing Whether the
Amount Actual guarantee
Jingliang Food Co., Ltd. as the guarantor Effective Date Due Date Guarantee Has
Guaranteed amount
is as follows:Guaranteed Party Been Fulfilled
Beijing Tianweikang Oil Marketing 122,070,00 Effective from the date of deliberation and approval of the 2020
36,000,000.00 2021.1.20 No
Center Co., Ltd. 0.00 general meeting of shareholders, for a period of one year
From the date of signing the agreement on designated delivery
Jingliang (Tianjin) Grain and Oil 300,000,00 warehouse (designated warehouse) of Dalian Commodity Exchange to
2020.4.17 No
Industry Co., Ltd. 0.00 two years after the termination of the agreement on designated delivery
warehouse (designated warehouse) of Dalian Commodity Exchange.
From the date of signing the agreement on designated delivery
Jingliang (Tianjin) Grain and Oil 200,000,00 warehouse (designated warehouse) of Dalian Commodity Exchange to
2021.9.2 No
Industry Co., Ltd. 0.00 two years after the termination of the agreement on designated delivery
warehouse (designated warehouse) of Dalian Commodity Exchange.
227,150,00
Beijing Jingliang Oil and Fat Co., Ltd. 2021.11.16 2 years after the maturity of the debt as agreed in the main contract No
0.00
Effective from the date of deliberation and approval of the general
400,000,00
Beijing Jingliang Oil and Fat Co., Ltd. 4,540,646.03 2021.6.18 meeting of shareholders in 2020 to the date of convening the general No
0.00
meeting of shareholders in 2021
From the date of drawing or actual occurrence of the first financing
188,500,00 under the financing letter to two years after the maturity date of the
Beijing Jingliang Oil and Fat Co., Ltd. 3,264,400.00 2021.6.18 No
0.00 latest one of all the financing provided by the bank during the
occurrence of the guaranteed debt under the financing letter.
Jingliang (Singapore) International 436,800,00
305,545,510.00 2021.5.17 From March 2, 2021 to March 2, 2026 No
Trade Co., Ltd. 0.00
Effective from the date of deliberation and approval of the general
Jingliang (Singapore) International 370,000,00
265,942,308.35 2021.6.18 meeting of shareholders in 2020 to the date of convening the general No
Trade Co., Ltd. 0.00
meeting of shareholders in 2021
XIV. Events after the Balance Sheet Date
1. Distribution of Profits
As of the financial report date of the company, the 24th meeting of the ninth board of directors in
2022 approved that no profit distribution will be conducted in 2021, which still needs to be approved
by the general meeting of shareholders.
XV. Other Important Matters
1. Annuity Plan
Basic information of annuity: Beijing Jingliang Food Co., Ltd., Beijing Guchun Oil Co., Ltd.,
Beijing Eisen Lubao Oil Co., Ltd., Beijing Jingliang Oil Co., Ltd. and Beijing Guchun Bread Food
Co., Ltd. of the company participated in the enterprise annuity plan of Beijing shounong Food
Group Co., Ltd., and formulated the implementation rules of their respective enterprises under the
annuity plan. The name of the annuity plan is Ping An Jinxiu life enterprise annuity plan; the trustee
and account manager are ping an Endowment Insurance Co., Ltd.; the trustee is China CITIC Bank
Co., Ltd.
2. Information of Divisions
(1) Basis of determination and accounting policies for reporting of divisions
The Company's businesses consist of food processing, oil and grease and so on according to its
internal organizational structure, management requirements and internal reporting system. The
Company's management regularly evaluates the operating results of these divisions to determine the
allocation of resources to them and evaluate their performance. The information reported by
divisions should be disclosed according to the accounting policies and measurement standards
adopted by such divisions when they are reporting to the management. These measurement bases
should be consistent with the accounting and measurement bases for preparation of financial
statements.
(2) Reporting of the financial information of divisions
Item Food Processing Oil & Grease Other Offset Among Dvisions Total
Operating
923,407,034.84 13,532,624,216.99 19,147,598.18 -2,712,085,014.45 11,763,093,835.56
income
Operating costs 695,212,963.09 13,019,942,435.75 9,047,615.76 -2,687,048,545.10 11,037,154,469.50
Operating profit 143,511,101.12 329,147,752.65 456,538,047.78 -615,303,028.14 313,893,873.41
Net profit
attributable to 111,657,924.43 283,588,240.34 453,536,391.13 -644,323,098.16 204,459,457.74
parent company
Total assets 1,129,395,611.60 8,120,235,309.43 2,927,459,631.31 -6,130,490,493.44 6,046,600,058.90
Total liabilities 181,357,027.44 4,760,321,999.97 42,492,656.55 -2,249,725,417.61 2,734,446,266.35
3. Lease
The lessee shall disclose the following information in relation with the lease.
Item Amount
Interest expense 158,835.45
Short-term lease payments charged to current profit
5,686,616.63
or loss
Lease costs for low-value assets recognized in
current profit or loss
Item Amount
Variable lease payments not included in the
measurement of lease liabilities
Income from sublease of right-to-use assets
Total cash outflows related to leases 5,737,518.73
Gains and losses related to sale and leaseback
transactions
XVI. Notes to Main Financial Statement Items of Parent Company
1. Accounts Receivable
（1）Disclosed according to aging
Aging Ending Balance
Within 1 Year (including 1 year)
Among them: Within credit period (within 3
months)
Credit period to 1 year
1 to 2 years (including 2 years)
2 to 3 years (including 3 years)
3 to 4 years (including 4 years)
4 to 5 years (including 5 years) 3,000.00
More than 5 years 105,000.00
Sub-total 108,000.00
Less: Allowance for bad debts 107,400.00
Total 600.00
（2）Disclosed according to the method of provision for bad debt
Ending Balance
Book Balance Bad Debt Provision
Type(s)
Provision Book Value
Amount Ratio(%) Amount
Ratio(%)
Separate provision for bad
debts
Portfolio provision for bad
108,000.00 100.00 107,400.00 99.44 600.00
debts
Among them: Portfolio 1 108,000.00 100.00 107,400.00 99.44 600.00
Total 108,000.00 -- 107,400.00 -- 600.00
（Continued）
Beginning Balance
Type(s)
Book Balance Bad Debt Provision Book Value
Provision
Amount Ratio(%) Amount
Ratio(%)
Separate provision for bad
debts
Portfolio provision for bad
126,420.00 100.00 114,636.00 90.68 11,784.00
debts
Among them: Portfolio 1 126,420.00 100.00 114,636.00 90.68 11,784.00
Total 126,420.00 -- 114,636.00 -- 11,784.00
Portfolio provision for bad debts:
Portfolio provision item: aging portfolio
Ending Balance Beginning Balance
Name Accounts Bad Debt Provision Accounts Bad Debt Provision
receivable Provision Ratio receivable Provision Ratio
Within 1 Year
(including 1 year)
Among them: Within
the credit period
(within 3 months)
Credit period to 1 year
1 to 2 years (including
2 years)
2 to 3 years (including
3 years)
3 to 4 years (including 3,000.00 1,500.00 50.00
4 years)
4 to 5 years (including 3,000.00 2,400.00 80.00 51,420.00 41,136.00 80.00
5 years)
More than 5 years 105,000.00 105,000.00 100.00 72,000.00 72,000.00 100.00
Total 108,000.00 107,400.00 -- 126,420.00 114,636.00
(3) Details of bad debt provision
Carrying Amount changes for the period Carrying
Type amount at the Addition Withdrawal Write-off Other amount at the
beginning or reversal changes end
Bad debt 114,636.00 11,184.00 18,420.00 107,400.00
provision
Total 114,636.00 11,184.00 18,420.00 107,400.00
(4) Receivables actually written off in the current period
Item Amount
Item Amount
Actual write-off amount 18,420.00
During the period, the board of directors approved to write off the Beijing Branch of Hainan
Jingliang Holding Co., Ltd., and to write off the uncollectible receivables.
（5）Accounts Receivable of the Top 5 Balances Collected by Debtors at the End of the Period
Ratio of the total
Is it Bad debt
Debtors Book balance balance of accounts Aging
related provision
receivable(%)
Hainan pearl river pipe 4-5 years, more
108,000.00 100.00 No 107,400.00
pile co. LTD than 5 years
Total 108,000.00 100.00 —— —— ——
2. Other Receivables
A. Overview
(1) Classification
Item Ending Balance Beginning Balance
Interest receivable
Dividends receivable
Other receivables 180,000,000.00 103,341.26
Total 180,000,000.00 103,341.26
2. Other Receivables
(1) Disclosed according to aging
Aging Ending Balance
Within 1 Year (including 1 year) 180,000,000.00
Among them: Within credit period (within 3
180,000,000.00
months)
Credit period to 1 year
1 to 2 years (including 2 years)
2 to 3 years (including 3 years)
3 to 4 years (including 4 years)
4 to 5 years (including 5 years)
More than 5 years 93,197.85
Sub-total 180,093,197.85
Less: Allowance for bad debts 93,197.85
Total 180,000,000.00
(2) Classification of other receivables by nature of funds
Book Balance at End of Book Balance at
Nature of Funds
Period Beginning of Year
Intercourse Funds of Units 180,000,000.00 3,333.00
Employee Receivables
Personal Intercourse Funds 50,000.00
Petty Cash 93,197.85 105,271.85
Others
Total 180,093,197.85 158,604.85
(3) Details about allowance for bad debt
Stage 1 Stage 2 Stage 3
Expected Expected credit loss Expected credit
Provision for bad debt credit loss in for the whole period loss for the whole Total
the next 12 (no credit period (with credit
months impairment) impairment)
Amount on January 1, 2021 5,263.59 50,000.00 55,263.59
Carrying amount on January 1,
2021 during this period:
——Get into Stage 2
——Get into Stage 3
——Get back to Stage 2
——Get back to Stage 1
Provision for the period 87,934.26 87,934.26
Reverse for the period
Transfer for the period
Write off for the period 50,000.00 50,000.00
Other changes
Balance at December 31, 2021 93,197.85 93,197.85
(4) Details of bad debt provision
Type Carrying Amount changes for the period Carrying
amount at amount at
Withdrawal Other
the Addition Write-off the end
or reversal changes
beginning
Bad debt
55,263.59 87,934.26 50,000.00 93,197.85
provision
Total 55,263.59 87,934.26 50,000.00 93,197.85
(5)Other receivables actually written off in the current period
Itam Amount
Receivables actually written off 50,000.00
During the period, the board of directors approved to write off the Beijing Branch of Hainan
Jingliang Holding Co., Ltd., and to write off the uncollectible other receivables.
(6) Other receivables according to top five of balance at end of period collected by debtors
Proportion in
Ending balance
Name of Nature of Balance at overall ending
Aging of bad debt
Organization Funds End of Period balance of other
reserves
receivables (%)
Beijing Grain Stock Related party 180,000,000.00 Within 3 99.94
Co., Ltd. borrowing months
Yan Yan Reserve fund 46,000.00 2-3 years 0.026 46,000.00
Pai Feng Reserve fund 26,671.80 2-3 years 0.015 26,671.80
Zhongwei Cui Reserve fund 14,007.40 2-3 years 0.007 14,007.40
Xiaohong Liu Reserve fund 5,170.00 2-3 years 0.003 5,170.00
Total —— 180,091,849.20 —— 99.99 91,849.20
3. Long-term Equity Investment
Ending Balance Beginning Balance
Item
Provision
Provision for
Book Balance for Book Value Book Balance Book Value
Impairment
Impairment
Investment in
2,626,437,846.24 2,626,437,846.24 2,626,437,846.24 2,626,437,846.24
subsidiaries
Total 2,626,437,846.24 2,626,437,846.24 2,626,437,846.24 2,626,437,846.24
(1)Investment in subsidiaries
Current
Ending
Provision
Beginning Current Current Ending Balance of
Invested Entity for
Balance Increase Decrease Balance Provision for
Impairme
Impairment
nt
Beijing Jingliang 2,336,639,964.05 2,336,639,964.05
Food Co., Ltd.
Zhejiang little 249,017,319.14 249,017,319.14
prince Food Co.,
Ltd
Jingliang rural 15,280,563.05 15,280,563.05
complex
construction and
operation (Xinyi)
Co., Ltd
Jingliang 25,500,000.00 25,500,000.00
(Caofeidian)
Agricultural
Development Co.,
Ltd.
Total 2,626,437,846.24 2,626,437,846.24
4. Operating income and operating costs
1. Details of operating income and operating costs
Current Amount Last Term Amount
Item
Income Cost Income Cost
Core business
Other businesses 591,060.56 341,162.52 1,181,687.83
Total 591,060.56 341,162.52 1,181,687.83
5. Income from investment
Sources of investment income Current Amount Last Term Amount
Long term equity investment income 461,597,751.35 205,893,687.32
calculated by cost method
Others 506,874.91
Total 461,597,751.35 206,400,562.23
XVII. Supplementary Information
1. According to the requirements of the CSRC's "Explanatory Announcement on
Information Disclosure of Companies Publicly Issuing Securities No. 1 - Non-recurring
Gains and Losses", the non-recurring gains and losses during the reporting period shall
be reported
1. Details of non-recurring profit and loss in the reporting period
Details of non-recurring profit and loss Amouont Note
(1) Gains and losses on disposal of non current assets -208,369.12
(2) Government subsidies included in the current profits and
losses (closely related to the business of the enterprise,
5,397,695.52
except the government subsidies enjoyed according to the
national unified standard quota or quantitative)
(3) In addition to the effective hedging business related to
the normal business of the company, the profit and loss from
changes in fair value arising from holding trading financial
assets, derivative financial assets, trading financial liabilities
6,221,323.63
and derivative financial liabilities, as well as the investment
income from the disposal of trading financial assets,
derivative financial assets, trading financial liabilities,
derivative financial liabilities and other debt investments
(4) Other non-operating income and expenses other than the
1,564,510.91
above
(5) Other profit and loss items that meet the definition of
non recurring profit and loss
Total non recurring profit and loss
12,975,160.94
Less: amount affected by income tax 3,214,422.14
Non recurring profit and loss after deducting the influence
9,760,738.80
of income tax
Including: non recurring profit and loss attributable to the
9,036,938.63
owner of the parent company
Non recurring profit and loss attributable to minority
723,800.17
shareholders
2. Return on equity and earnings per share
Weighted Return EPS
Current Profit on Average Equity
(ROAE) (%) Basic EPS Diluted EPS
Net profit attributable to the Company's
7.27 0.28 0.28
common shareholders
Net profit attributable to common
shareholders after deduction of 6.95 0.27 0.27
non-recurring gains and losses
Hainan Jingliang Holdings Co., Ltd.
31 March 2022
