HAINAN JINGLIANG
HOLDINGS CO., LTD.
SEMI-ANNUAL REPORT
2023
August, 2023
HAINAN JINGLIANG HOLDINGS CO., LTD.
SEMI-ANNUAL REPORT 2023
Part I Important Notes
In order for a full understanding of operating results, financial condition and future development plans of
Hainan Jingliang Holdings Co., Ltd. (together with its consolidated subsidiaries, the “Company”, except
where the context otherwise requires), the company makes a full text of semi-annual report 2023. 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.
This semi-annual report 2023 has been prepared in both Chinese and English. Should there be any
discrepancies or misunderstandings between the two versions, the Chinese version shall prevail.
Independent auditor’s modified opinion:
□ Applicable Not applicable
Board-approved interim cash and/or stock dividend plan for ordinary shareholders:
□ Applicable Not applicable
The Company has no interim dividend plan, either in the form of cash or stock.
Board-approved interim cash and/or stock dividend plan for preferred shareholders:
□ Applicable Not applicable
Part II Key Corporate Information
1. Stock Profile
Stock name JLKG, JL-B Stock code 000505, 200505
Stock exchange for
Shenzhen Stock Exchange
stock listing
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 Ring
Office address
Ring Middle Road, Chaoyang District, Beijing Middle Road, Chaoyang District, Beijing
Tel. 010-51672270 010-51672029
E-mail address guanying@bjjlkg.cn gaodeqiu@bjjlkg.cn
2. Key Financial Information
Indicate by tick mark whether there is any retrospectively restated datum in the table below.
□ Yes No
H1 2023 H1 2022 Change (%)
Operating revenue (RMB) 4,823,234,208.18 5,512,781,270.32 -12.51%
Net profit attributable to the listed company’s shareholders
73,581,795.36 72,908,330.15 0.92%
(RMB)
Net profit attributable to the listed company’s shareholders
58,095,675.61 71,265,739.47 -18.48%
before exceptional gains and losses (RMB)
Net cash generated from/used in operating activities (RMB) -137,349,545.79 -174,610,409.43 21.34%
Basic earnings per share (RMB/share) 0.10 0.10 0.00%
Diluted earnings per share (RMB/share) 0.10 0.10 0.00%
Weighted average return on equity (%) 2.37% 2.47% -0.10%
30 June 2023 31 December 2022 Change (%)
Total assets (RMB) 6,940,517,445.79 6,105,144,167.96 13.68%
Equity attributable to the listed company’s shareholders (RMB) 3,135,973,882.04 3,061,661,435.05 2.43%
3. Shareholders and Their Shares at Period-End
Unit: share
Number of preferred
Number of ordinary shareholders 61,502 shareholders with resumed 0
voting rights (if any)
Top 10 shareholders
Pledged, marked
Shareholding Number of Restricted or frozen shares
Name of shareholder Nature of shareholder
percentage shares shares
Status Shares
BEIJING GRAIN State-owned legal
39.68% 288,439,561 0
GROUP CO., LTD. person
BEIJING
STATE-OWNED
State-owned legal
CAPITAL OPERATION 6.61% 48,032,160 0
person
AND MANAGEMENT
COMPANY LIMITED
WANG YUECHENG Domestic natural person 5.66% 41,159,887 30,869,915
LISHERYNZHANMING Foreign natural person 0.40% 2,892,800 0
MEI JIANYING Domestic natural person 0.36% 2,604,203 0
WANG ZHIQIANG Domestic natural person 0.34% 2,507,123 0
CHEN TIANHUA Domestic natural person 0.29% 2,101,100 0
ZHANG XIAOXIA Domestic natural person 0.27% 1,949,250 0
WANG XIAOXING Domestic natural person 0.23% 1,654,200 0
LI YONGCHENG Domestic natural person 0.23% 1,653,700 0
① Beijing State-Owned Capital Operation and Management Company
Limited owns 100% of Beijing Grain Group Co., Ltd., and Beijing Grain
Group Co., Ltd. is the controlling shareholder of the Company (a 39.68%
Connected or acting-in-concert parties among
holding). ② Wang Yuecheng is a Deputy General Manager of the
shareholders above
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 Beijing State-Owned Capital Operation and Management
Company reduced its Shareholding by 478,300 share due to its
participation in the securities lending business of Transferring and
Financing.; Shareholder Chen Tianhua holds 2,093,500 shares in the
Shareholders conducting margin trading (if any)
Company through his account of collateral securities for margin trading
in Founder Securities Co., Ltd.; Shareholder Wang Xiaoxing
holds1,654,200 shares in the Company through his account of collateral
securities for margin trading in Soochow Securities Co., Ltd.
4. Change of Controlling Shareholder or Actual Controller in Reporting Period
Change of the controlling shareholder in the Reporting Period:
□ Applicable Not applicable
The controlling shareholder remained the same in the Reporting Period.
Change of the actual controller in the Reporting Period:
□ Applicable Not applicable
The actual controller remained the same in the Reporting Period.
5. Numbers of Preferred Shareholders and Shareholdings of Top 10 of Them
□ Applicable Not applicable
No preferred shareholders in the Reporting Period.
6. Outstanding Bonds at the Date when this Report Was Authorized for Issue
□ Applicable Not applicable
Part III Significant Events
During the reporting period, our company entered into the “Joint venture Agreement of Jingliang Hainan
Yangpu Grain and oil processing, storage and Logistics project” with Guotou Yangpu Port Co., Ltd and
China Stored Grain Oil Co.,Ltd.,. The three parties jointly funded the establishment of the joint venture
company, which is for implementation of the Jingliang Hainan Yangpu oil and grease processing project.
For details, please refer to the “Announcement of Hainan Jingliang Holdings Co., Ltd on the investment
and Establishment of a Joint Venture Company to launch Jingliang Hainan Yangpu Oil and Grease
Processing Project” (No. 2023 – 029) disclosed by the company On June 15, 2023.
Par IV Financial Report
Independent auditor’s modified opinion:
□ Applicable Not applicable
2023 Semi-Annual Financial Report is not audited by Independent auditor.
The unit of financial statements in the financial notes is: Yuan
Editor: Hainan Jingliang Holdings Co., Ltd
1、Consolidated Balance sheet
06-June-2023
Monetary Unit: RMB Yuan
Items 30-June-2023 1-Jan-2023
Current Assets：
Monetary Capital 1,251,666,904.81 561,013,109.76
Settlement reserves
Loans to banks and other financial
institutions
Transactional financial assets 16,175,691.49 11,005,983.98
Derivative financial assets 153,000.00 201,549.12
Notes receivable 154,945.01
Accounts receivable 94,785,430.75 77,057,446.86
Receivable Financing
Pre payments 551,576,045.68 194,495,648.06
Premium receivable
Receivables from reinsurance
Reserve for reinsurance
receivables
Other receivables 438,557,843.89 444,523,698.48
Including :Interest receivable
Dividends receivable
Buy-back financial Assets
Inventory 2,188,231,545.06 2,073,944,683.57
Contract Assets
Held-for-sale assets
Within one year Non-Current
106,546,505.27 148,387,894.16
Assets
Other current Assets 363,863,811.42 632,929,899.75
Total Current Assets 5,011,711,723.38 4,143,559,913.74
Non-Current Assets：
Loans and advances
Debt Investment
Other Debt Investment
Long-term receivables
Long-term equity investment 250,566,213.84 243,553,916.98
Other Instruments investment 20,000,000.00 20,000,000.00
Other Non-current financial assets
Investment property 21,326,173.23 19,805,276.24
fixed assets 1,013,694,886.73 1,047,451,810.24
Construction in progress 38,472,961.91 22,695,003.52
Productive biological assets
Oil and gas assets
Right-of-use assets 6,241,335.91 6,968,426.20
Intangible assets 322,745,230.58 325,044,884.34
Development expenditure
Goodwill 191,394,422.51 191,394,422.51
Long-term deferred expenses 17,214,163.21 16,935,967.92
Deferred income tax assets 13,255,247.15 14,189,763.93
Other Non-Current Assets 33,895,087.34 53,544,782.34
Total Non-Current Assets 1,928,805,722.41 1,961,584,254.22
Total Assets 6,940,517,445.79 6,105,144,167.96
Current liabilities：
Short-term borrowings 1,642,308,166.66 1,260,543,148.81
borrowings from central bank
Loans from bank and other
financial institutions
Transactional financial liabilities
Derivative financial liabilities 84,108,320.00 111,373,155.00
Notes payable 3,331,333.80
Accounts payable 128,731,589.03 110,911,877.21
Account collected in advance 1,371,674.51 922,982.41
Contract liabilities 589,737,348.35 285,555,581.80
financial assets sold under
repurchase agreements
Deposits from customers and
interbank deposit
Funds from securities trading
brokerage business
Funds from securities under
writing business
Employee reroll payable 15,002,267.33 43,928,760.76
tax payable 19,922,589.93 66,629,054.18
Other payables 113,457,778.24 83,999,685.56
Including: Interest payable 21,082,795.47 21,082,795.47
dividend payable 3,213,302.88 3,213,302.88
Payable Fee and commission
Payable Reinsurance accounts
Held-for-sale liabilities
Within one year Non-current
628,515.16 1,432,706.14
liabilities
Other current liabilities 56,434,136.00 56,184,255.30
Total current liabilities 2,651,702,385.21 2,024,812,540.97
Non-current liabilities：
Insurance Contract reserves
Long-term borrowings 600,000,000.00 500,284,166.67
Bonds payable
Including: preferred stock
Perpetual capital bonds
Lease liabilities 757,257.80 704,390.98
Long-term payables
Long-term Employee reroll
5,677,134.00 5,677,134.00
payable
Estimated liabilities
Deferred revenue 63,508,701.11 64,550,917.36
Deferred income tax liabilities 70,654,986.68 46,405,170.70
Other Non-current liabilities
Total Non-current liabilities 740,598,079.59 617,621,779.71
Total Liabilities 3,392,300,464.80 2,642,434,320.68
Owner’s equity
Capital stock 726,950,251.00 726,950,251.00
Other equity instrument
Including: preferred stock
Perpetual capital bonds
Capital reserves 1,678,678,350.95 1,678,678,350.95
Less ：Treasury stock
Other comprehensive revenue 1,736,372.13 1,005,720.50
special reserves
Surplus reserves 122,122,436.98 122,122,436.98
general risk reserves
Undistributed profit 606,486,470.98 532,904,675.62
Total equity attributable to the parent
3,135,973,882.04 3,061,661,435.05
company
Minority equity 412,243,098.95 401,048,412.23
Total owner’s equity 3,548,216,980.99 3,462,709,847.28
Total Liabilities and Total owner’s
6,940,517,445.79 6,105,144,167.96
equity
Authorized representative ： Wang Chunli Person in charge of accounting ： Guan Ying
Head of accounting organization ：Cao Ling
2、Statement of Financial positions
Monetary Unit: RMB Yuan
Items 30-June-2023 1-Jan-2023
Current Assets：
Monetary Capital 17,205,549.53 15,852,894.21
Transactional financial assets
Derivative financial assets
Notes receivable
Accounts receivable
Receivable Financing
Pre payments
Other receivables 360,000,115.58 349,000,000.00
Including: Interest receivable
Dividends receivable 150,000,000.00
Inventory
Contract Assets
Held-for-sale assets
Within one year Non-Current
Assets
Other current Assets 465,029.16 1,168,502.66
Total Current Assets 377,670,694.27 366,021,396.87
Non-Current Assets：
Debt Investment
Other Debt Investment
Long-term receivables
Long-term equity investment 2,619,157,283.19 2,619,157,283.19
Other Instruments investment 20,000,000.00 20,000,000.00
Other Non-current financial assets
Investment property 5,369,095.43 5,539,676.69
fixed assets 5,811,842.52 5,575,316.44
Construction in progress
Productive biological assets
Oil and gas assets
Right-of-use assets
Intangible assets
Development expenditure
Goodwill
Long-term deferred expenses
Deferred income tax assets
Other Non-Current Assets
Total Non-Current Assets 2,650,338,221.14 2,650,272,276.32
Total assets 3,028,008,915.41 3,016,293,673.19
current liabilities：
Short-term borrowings
Transactional financial liabilities
Derivative financial liabilities
Notes payable
Accounts payable
Account collected in advance 38,896.41 38,896.41
Contract liabilities
Employee reroll payable 176,246.38 191,137.22
Payable tax fee 1,032,337.89 1,548,097.77
Other payables 33,295,174.14 34,559,303.45
Including: Interest payable 21,082,795.47 21,082,795.47
Dividend payable 3,213,302.88 3,213,302.88
Held-for-sale liabilities
Within one year Non-current
liabilities
Other current liabilities
Total current liabilities 34,542,654.82 36,337,434.85
Non-current liabilities：
Long-term borrowings
Bonds payable
Including: preferred stock
Perpetual capital bonds
Lease liabilities
Long-term payables
Long-term Employee reroll
payable
Estimated liabilities
Deferred revenue
Deferred income tax liabilities
Other Non-current liabilities
Total Non-current liabilities
Total liabilities 34,542,654.82 36,337,434.85
Owner’s equity
Capital stock 726,950,251.00 726,950,251.00
Other equity instrument
Including: preferred stock
Perpetual capital bonds
Capital reserves 2,382,994,900.84 2,382,994,900.84
Less ：Treasury stock
Other comprehensive revenue
Special reserves
Surplus reserves 109,487,064.39 109,487,064.39
Undistributed profit -225,965,955.64 -239,475,977.89
Total owner’s equity Total 2,993,466,260.59 2,979,956,238.34
Total Liabilities and Total owner’s
3,028,008,915.41 3,016,293,673.19
equity
Authorized representative ： Wang Chunli Person in charge of accounting ： Guan Ying
Head of accounting organization ：Cao Ling
3、Consolidated Income Statement
Monetary Unit: RMB Yuan
Items Semi-annual of 2023 Semi-annual of 2022
一、Total operating income 4,823,234,208.18 5,512,781,270.32
Including: operating income 4,823,234,208.18 5,512,781,270.32
Interest income
Premiums earned
Fee and commission
income
二、Total operating cost 4,841,383,397.31 5,465,754,564.15
Including: operating cost 4,630,970,469.14 5,274,364,092.66
Interest expenditure
Fee and commission
expenditure
Surrenders
Net claims paid
Net appropriation for
insurances contracts reserves
Policy holders dividends
expenditure
Reinsurance expenses
Tax and super charge 11,548,673.88 17,015,865.16
Selling expenses 78,437,823.61 69,188,009.32
Administration expenses 92,898,582.21 87,740,667.69
Research and development
10,262,799.97 4,876,642.24
expenses
Financial expenses 17,265,048.50 12,569,287.08
Including: Interest expenses 25,265,021.07 16,391,856.85
Interest income 5,832,452.30 6,825,161.06
Add：Other revenue 6,324,214.58 6,439,000.05
Investment revenue 7,179,282.99 12,205,590.86
（Losses are recorded as “－”）
Including: joint venture and
cooperative enterprise Investment 7,012,296.86 11,762,199.64
revenue
derecognition of financial
assets amortized revenue
exchange revenue （Losses
are recorded as“-”）
Exposure hedging revenue
（Losses are recorded as “－”）
Changes in fair value
143,869,459.30 49,424,487.23
revenue （Losses are recorded as “－”）
Credit Less impairment
-115,984.57 -600.00
（Losses are recorded as“-”）
Assets Less impairment
-25,186,589.63
（Losses are recorded as“-”）
Assets disposal revenue
-2,209.46 441,741.39
（Losses are recorded as“-”）
operating profit （Losses are recorded
113,918,984.08 115,536,925.70
as“-”）
Add：Non- operating Income 3,903,501.36 475,215.44
Less ：Non-operating expenditure 527,980.44 358,327.53
Total profit（Losses are recorded as“-”） 117,294,505.00 115,653,813.61
Less ：income tax expenses 32,518,022.92 30,461,421.92
Net profit （Net loss is presented as
84,776,482.08 85,192,391.69
“－”）
Classified by operations continuity
Continuing operation Net profit
84,776,482.08 85,192,391.69
（Net loss is presented as “－”）
Close for business Net profit （Net
loss is presented as “－”）
Classified according to ownership
Parents company Total owner’s
73,581,795.36 72,908,330.15
Net profit
Minority Lose 11,194,686.72 12,284,061.54
Other comprehensive revenue after tax 730,651.63 671,532.18
Parents company Total owner’s Other
730,651.63 671,532.18
comprehensive revenue’s tax
Other comprehensive revenue
cannot be reclassified into the lost
1.Recalculation of changes
in defined benefit plans
2.Othercomprehensive
income that cannot be transferred to
gains and losses under the equity
method
3.OtherInstruments
investment Changes in fair value
4.Enterprise credit risk
changes in fair value
5.Other
Other comprehensive income that
will be reclassified into the profit and 730,651.63 671,532.18
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
730,651.63 671,532.18
translation of foreign currency
7.Other
Net of tax from other
comprehensive income attributable to
minority share holder
Total comprehensive income 85,507,133.71 85,863,923.87
Total comprehensive income
attribute to shareholders of the parent 74,312,446.99 73,579,862.33
company
Total comprehensive income
11,194,686.72 12,284,061.54
attribute to minority shareholder
8、per share revenue ：
（1）basic per share revenue 0.10 0.10
（2）diluted per share revenue 0.10 0.10
Authorized representative：Wang Chunli Person in charge of accounting：Guan Ying
Head of accounting organization ：Cao Ling
4、Parents company profit statement
Monetary Unit: RMB Yuan
Items Semi-annual of 2023 Semi-annual of 2022
一、 operating income 11,839,311.03 382,744.96
Less ： operating cost 170,581.26 170,581.26
Tax Add 174,413.63 201,808.38
Selling expenses
Administration expenses 3,410,680.07 2,692,234.13
Research and development
expenses
Financial expenses -5,278,290.51 -3,565,313.78
Including: Interest expenses
Interest income 5,280,177.21 3,566,419.69
Add：Other revenue 2,308.28 12,794.10
Investment revenue
150,814.85
（Losses are recorded as “－”）
Including: joint venture and
cooperative enterprise Investment
revenue
Derecognition of financial assets
amortized revenue （Losses are
recorded as“-”）
Exposure hedging revenue
（Losses are recorded as “－”）
Changes in fair value
revenue （Losses are recorded as “－”）
Credit Less impairment
-600.00
（Losses are recorded as“-”）
Assets Less impairment
（Losses are recorded as“-”）
Assets disposal revenue
（Losses are recorded as“-”）
二、operating profit （Losses are
13,515,049.71 895,629.07
recorded as“-”）
Add：Non-operating Income
Less ：Non-operating 5,027.46
expenditure
三、profit amounts （Losses are
13,510,022.25 895,629.07
recorded as“-”）
Less ：income tax expenses
四、Net profit （Net loss is presented as
13,510,022.25 895,629.07
“－”）
（一）continuing operations Net
13,510,022.25 895,629.07
profit （Net loss is presented as “－”）
（二）discontinuing operations Net
profit （Net loss is presented as “－”）
五、Net of tax from Other
comprehensive income
（一）cannot reclassified to Lose
Other comprehensive revenue
1. Other comprehensive
income that cannot be reclassified into
the profit and loss
2. Other comprehensive
income that cannot to be transferred to
gains and losses under the equity
method
3.Other Instruments
investment Changes in fair value
4.enterprise Credit risk
Changes in fair value
5.Other
（二）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
六、comprehensive revenue amounts 13,510,022.25 895,629.07
七、per share revenue ：
（一）basic per share revenue
（二）diluted per share revenue
Authorized representative ： Wang Chunli Person in charge of accounting ： Guan Ying
Head of accounting organization ：Cao Ling
5、Consolidated cash flow statement
Monetary Unit: RMB Yuan
Items Semi-annual of 2023 Semi-annual of 2022
一、cash flow from operating activities：
Cash receipts from sale of good or
5,564,355,172.38 6,436,340,283.18
rendering of services
Net increase in customer deposits
and due to banks and other financial
institutions
Net increase in borrowing from
central bank
Net increase in borrowing 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 borrowing from
banks
Net cash increase under repurchase
agreements
Net increase received from securities
trading brokerage business
Tax refund receipts 3,808,897.99 6,528,639.35
Other cash receipts concerning
1,023,812,040.53 1,189,579,771.74
operating activities
Subtotal of cash flows from operating
6,591,976,110.90 7,632,448,694.27
activities
Cash paid for purchase of goods
5,631,656,925.26 5,809,507,082.18
and accepting services
Net increase in loans and advance
to customers
Net increase in deposit in the
central bank and due from banks and
other financial institutions
Cash paid for claims in Insurance
Contract
Net increase in Loans to banks and
other financial institutions
Cash paid for Interest 、Fee and
commission
cash paid for dividend for Policy
holders
Cash paid to and for employees 172,318,440.15 171,460,162.39
Taxes and fees paid 125,238,280.62 193,319,681.25
Other cash paid concerning
800,112,010.66 1,632,772,177.88
operating activities
Subtotal of cash outflows from
6,729,325,656.69 7,807,059,103.70
operating activities
Net cash flows from operating activities -137,349,545.79 -174,610,409.43
2. cash flows from Investment
activities ：
Cash receipts from disinvestment 586,103,235.55 1,153,813,406.52
Cash receipts from returns on
526,196.09
investment
Net cash from disposal of fixed
assets、Intangible assets and other 31,605.00 801,506.00
Long-term assets
Net cash received by disposal of
subsidiaries and other
Other cash receipts concerning
Investment activities
Subtotal of cash flows from Investment
586,134,840.55 1,155,141,108.61
activities
Cash paid for purchase and
construction of fixed assets、Intangible 43,140,379.93 15,597,520.36
assets and Other long-term assets
Cash paid by Investment 145,000,000.00 890,099,000.00
Net increase in the amount of
collateral loans
NET amount of cash paid by
subsidiaries and other operating units
Other cash related to Investment
activities
Subtotal of cash outflows from
188,140,379.93 905,696,520.36
Investment activities
Net amount of cash flows generated by
397,994,460.62 249,444,588.25
an Investment activity
三、The cash flow generated by the
financing activity：
Absorb the cash received by the
Investment
Including: The subsidiary absorbs
the cash received by Minority
Investment
Obtain the cash received by
1,818,217,067.44 2,725,178,991.98
borrowings
Receive Other cash in connection
with the financing activity
Subtotal cash inflows from fund-raising
1,818,217,067.44 2,725,178,991.98
activities
Cash paid to repay a debt 1,331,768,577.44 2,466,903,503.77
The distribution of dividends,
47,016,149.43 30,461,365.20
profit, or cash payments for Interest
Including: The subsidiary pays
Minority's dividends, profit
Payment of Other cash in
574,077.78
connection with the financing activity
Subtotal cash outflows from
1,379,358,804.65 2,497,364,868.97
fund-raising activities
Net amount of cash flows arising from
438,858,262.79 227,814,123.01
financing activities
四、The effect of exchange rate
movements on cash and cash 724,617.12 1,311,859.12
equivalents
五、Net add for cash and cash
700,227,794.74 303,960,160.95
equivalents
Add：Cash and cash equivalents 551,439,110.07 506,928,810.69
balance at the beginning of the period
六、Cash and cash equivalents balance
1,251,666,904.81 810,888,971.64
at the end of the period
Authorized representative ： Wang Chunli Person in charge of accounting ： Guan Ying
Head of accounting organization ：Cao Ling
6、Parents company cash flow statement
Monetary Unit: RMB Yuan
Items Semi-annual of 2023 Semi-annual of 2022
一、Cash flow from operating activities：
Cash received for Selling goods or
12,124,704.99
services
Tax refunds received 395,429.81
Receive Other cash related to
5,610,597.06 26,066,599.79
operating activities
Subtotal cash inflows from operating
17,735,302.05 26,462,029.60
activities
Cash paid for goods and services
Cash paid to and for employees 1,499,566.85 948,373.99
Tax fees paid 324,239.47 165,632.57
Payment of Other cash in
164,251,396.82 11,489,917.93
connection with operating activities
Subtotal cash outflows from operating
166,075,203.14 12,603,924.49
activities
NET amount of cash flow generated by
-148,339,901.09 13,858,105.11
operating activities
二、Cash flows from Investment
activities：
Take Back the cash received by the
Investment
Cash received from Investment
150,150,814.85
revenue
NET amount of cash recovered
from disposal fixed assets, Intangible 800.00
assets and Other Long-term assets
NET amount of cash received by
disposal and other operating units
Receive Other cash related to
Investment activities
Subtotal of cash inflows from
150,151,614.85
Investment activities
Cash paid for fixed assets,
Intangible assets and other long-term 459,058.44
assets
Cash paid by Investment 8,000,000.00
NET amount of cash paid by
subsidiaries and other operating units
Other cash related to Investment
activities
Subtotal of cash outflows from
459,058.44 8,000,000.00
Investment activities
Net amount of cash flows generated by
149,692,556.41 -8,000,000.00
an Investment activity
三、The cash flow generated by the
financing activity：
Absorb the cash received by the
Investment
Obtain the cash received by
borrowings
Receive Other cash in connection
with the financing activity
Subtotal cash inflows from fund-raising
activities
Cash paid to repay a debt
The distribution of dividends,
profit, or cash payments for Interest
Payment of Other cash in
connection with the financing activity
Subtotal cash outflows from
fund-raising activities
Net amount of cash flows arising from
financing activities
四、The effect of exchange rate
movements on cash and cash
equivalents
五、Net add for cash and cash
1,352,655.32 5,858,105.11
equivalents
Add：Cash and cash equivalents
15,852,894.21 1,533,187.04
balance at the beginning of the period
六、Cash and cash equivalents balance 17,205,549.53 7,391,292.15
at the end of the period
Authorized representative ： Wang Chunli Person in charge of accounting ： Guan Ying
Head of accounting organization ：Cao Ling
7、Consolidated Statement of changes in Equity
Current amount
Monetary Unit: RMB Yuan
Semi-annual of 2023
attributed to Parents company Total owner’sequity
Other equity
Total
instrument Otherco
Items Minorit owner’s
Less ： general Undistri
Capital Perpet Capital mprehen special Surplus
preferr Treasury risk butedpr Other Subtotal y equity equity
stock ual reserves sive reserves reserves
stock reserves ofit Total
ed Other
capital revenue
stock
bonds
726,95 3,462,7
一、Balance at the 1,678,67 1,005,72 122,122, 532,904, 3,061,66 401,048,
0,251. 09,847.
end of last year 8,350.95 0.50 436.98 675.62 1,435.05 412.23
00 28
Add: change
in accounting
policy
Pre-error
correction
Enterprise
consolidation under
the same control
Other
二、Balance at the 726,95 3,462,7
1,678,67 1,005,72 122,122, 532,904, 3,061,66 401,048,
beginning of the 0,251. 09,847.
8,350.95 0.50 436.98 675.62 1,435.05 412.23
year 00 28
三、In the current
period, the change
amount of Less
730,651. 73,581,7 74,312,4 11,194,6 85,507,
shall be added
63 95.36 46.99 86.72 133.71
(Less shall be filled
in with”-”
number)
（一）
730,651. 73,581,7 74,312,4 11,194,6 85,507,
comprehensive
63 95.36 46.99 86.72 133.71
revenue amounts
（二）Total owner's
investment and
Less
1．Total owner's
investments in
common stock
2．Other equity
instrument holders
invest capital
3．Share payments
are included in the
Total owner' equity
amount
4．Other
（三）Profit
allocation
1．Surplus reserves
2．General risk
reserves
3．The distribution
of Total owner's (or
shareholders)
4．Other
（四）Total Owner'
equity internal
carryover
1．Capital reserves
to increase Capital
(or Capital stock)
2．Surplus reserves
turn to Capital
stock
3．Surplus reserves
4．Set up benefit
plan changes to
carry forward
retained revenue
5．Other
comprehensive
revenue carryover
of retained revenue
6．Other
（五）special
reserves
1．Withdraw during
the period
2.Usage during the
period
（六）Other
四、The balance at 726,95 3,548,2
1,678,67 1,736,37 122,122, 606,486, 3,135,97 412,243,
the end of the 0,251. 16,980.
8,350.95 2.13 436.98 470.98 3,882.04 098.95
current period 00 99
Authorized representative ： Wang Chunli Person in charge of accounting ： Guan Ying
Head of accounting organization ：Cao Ling
The amount of the preceding period
Monetary Unit: RMB Yuan
Semi-annual of 2022
attributed to Parents company Total owner’sequity
Other equity
Total
instrument Otherco
Items Minority owner’se
Less ： general Undistri
Capital Perpet Capital mprehe special Surplus
prefer Treasur risk butedpr Other Subtotal equity quity
stock ual reserves nsive reserves reserves
y stock reserves ofit Total
red Other
capital revenue
stock
bonds
726,95 1,675,9 2,915,8
一、Balance at the -682,28 122,122 391,493, 396,351, 3,312,15
0,251. 18,350. 02,291.
end of last year 2.22 ,436.98 534.34 501.50 3,792.55
00 95 05
Add: change
in accounting
policy
Add: change
in accounting
policy
Enterprise
consolidation
under the same
control
Other
二、Balance at the 726,95 1,675,9 2,915,8
-682,28 122,122 391,493, 396,351, 3,312,15
beginning of the 0,251. 18,350. 02,291.
2.22 ,436.98 534.34 501.50 3,792.55
year 00 95 05
三、In the current
671,532 72,908,3 73,579, 12,284,0 85,863,9
period, the change
.18 30.15 862.33 61.54 23.87
amount of Less
shall be added
(Less shall be
filled in with”-”
number)
（一）
671,532 72,908,3 73,579, 12,284,0 85,863,9
comprehensive
.18 30.15 862.33 61.54 23.87
revenue amounts
（二）Total
owner's investment
and Less
1．Total owner's
investments in
common stock
2．Other equity
instrument holders
invest capital
3．Share payments
are included in the
Total owner'
sequity amount
4．Other
（三）Profit
allocation
1．Surplus reserves
2．General risk
reserves
3．The distribution
of Total owner's
(or shareholders)
4．Other
（四）Total Owner'
sequity internal
carryover
1．Capital reserves
to increase Capital
(or Capital stock)
2．Surplus reserves
turn to Capital
stock
3．Surplus reserves
4．Set up benefit
plan changes to
carry forward
retained revenue
5．Othercompreh
ensive revenue
carryover of
retained revenue
6．Other
（五）special
reserves
1．This period
2．Used in this
period
（六）Other
四、The balance at 726,95 1,675,9 2,989,3
-10,750. 122,122 464,401, 408,635, 3,398,01
the end of the 0,251. 18,350. 82,153.
04 ,436.98 864.49 563.04 7,716.42
current period 00 95 38
Authorized representative ： Wang Chunli Person in charge of accounting ： Guan Ying
Head of accounting organization ：Cao Ling
8、Parents company Total owner’s equity change statement
Amount of the current period
Monetary Unit: RMB Yuan
Semi-annual of 2023
Other equity instrument
Less ： Othercom Undistri Total
Items Capital Capital special Surplus
preferr Perpetual
Treasury prehensive butedpro Other owner’sequit
stock ed capital Other reserves reserves reserves
stock revenue fit y Total
stock bonds
一、Balance at the 726,950, 2,382,994,900 109,487,0 -239,475 2,979,956,23
end of last year 251.00 .84 64.39 ,977.89 8.34
Add: change in
accounting policy
Pre-error
correction
Other
二、Balance at the
726,950, 2,382,994,900 109,487,0 -239,475 2,979,956,23
beginning of the
251.00 .84 64.39 ,977.89 8.34
year
三、In the current
13,510,0 13,510,022.2
period, the change
22.25 5
amount of Less shall
be added (Less shall
be filled in with”-”
number)
（一）
13,510,0 13,510,022.2
comprehensive
22.25 5
revenue amounts
（二）Total owner's
investment and Less
1．Total owner's
investments in
common stock
2．Other equity
instrument holders
invest capital
3．Share payments
are included in the
Total owner' s
equity amount
4．Other
（三）Profit
allocation
1．Surplus reserves
2．The distribution
of Total owner's (or
shareholders)
3．Other
（四）Total owner's
equity
1．Capital reserves
to increase Capital
(or Capital stock)
2．Surplus reserves
turn to Capital stock
3．Surplus reserves
4．Set up benefit
plan changes to
carry forward
retained revenue
5．Other
comprehensive
revenue carryover of
retained revenue
6．Other
（五）special
reserves
1．This period
2．Used in this
period
（六）Other
四、The balance at
726,950, 2,382,994,900 109,487,0 -225,965 2,993,466,26
the end of the
251.00 .84 64.39 ,955.64 0.59
current period
Authorized representative ： Wang Chunli Person in charge of accounting ： Guan Ying
Head of accounting organization ：Cao Ling
The amount of the preceding period Monetary Unit: RMB Yuan
Semi-annual of 2022
Other equity instrument
Less ： Othercomp Total
Items Capital Capital special Surplus Undistribut
Perpetual
preferred Ot Treasury rehensive Other owner’sequity
stock capital reserves reserves reserves edprofit
stock her stock revenue Total
bonds
一、Balance at the 726,950, 2,380,234 109,487,0 -408,809,46
2,807,862,747.73
end of last year 251.00 ,900.84 64.39 8.50
Add: change in
accounting policy
Pre-error
correction
Other
二、Balance at the
726,950, 2,380,234 109,487,0 -408,809,46
beginning of the 2,807,862,747.73
251.00 ,900.84 64.39 8.50
year
三、In the current
period, the change
amount of Less
shall be added 895,629.07 895,629.07
(Less shall be
filled in with”-”
number)
（一）
comprehensive 895,629.07 895,629.07
revenue amounts
（二）Total
owner's investment
and Less
1．Total owner's
investments in
common stock
2．Other equity
instrument holders
invest capital
3．Share payments
are included in the
Total owner'
sequity amount
4．Other
（三）Profit
allocation
1．Surplus reserves
2．The distribution
of Total owner's
(or shareholders)
3．Other
（四）Total Owner'
sequity internal
carryover
1．Capital reserves
to increase Capital
(or Capital stock)
2．Surplus reserves
turn to Capital
stock
3．Surplus reserves
4．Set up benefit
plan changes to
carry forward
retained revenue
5．Other
comprehensive
revenue carryover
of retained revenue
6．Other
（五）special
reserves
1．This period
2．Used in this
period
（六）Other
四、The balance at
726,950, 2,380,234 109,487,0 -407,913,83
the end of the 2,808,758,376.80
251.00 ,900.84 64.39 9.43
current period
Authorized representative ： Wang Chunli Person in charge of accounting ： Guan Ying
Head of accounting organization ：Cao Ling
Hainan Jingliang Holdings Co., Ltd.
Notes to the Semi-Annual of 2023 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 Capital Agricultural Food Group Co., Ltd.
(Beijing Capital Agricultural 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 June 30th, 2022, 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: Wang Chunli.
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 activities 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, sales and
trading 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 Capital Agricultural 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 date on August 23rd, 2023.
5. Operation Duration
From March 22nd, 1998 to September 20th , 2025.
6. 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 June 30th,
2023, please refer to note 7 Change of 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, sales and trading of
foodstuff, 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 amortized 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 recognized 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 the
Commercial acceptance bill
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
Portfolio 1 Aging portfolio
Portfolio 2 A portfolio of receivables between the ultimate controller and its subordinate 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 controlling Referring to the historical credit loss
party and its subordinate units experience, combined with the current
The portfolio of public maintenance funds and house sales situation and the forecast of future economic
funds deposited into the MPF Management Center conditions, the expected credit loss is
Deposit/margin portfolio calculated through the default risk exposure
and the expected credit loss rate within the
The portfolio of reserve fund ledger formed by the next 12 months or the entire duration, and
Company's staff loan. 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 of
Aging of notes receivable accounts receivable other receivables
(%) (%) (%)
Accounts receivable between the final
0 0 0
controlling party and its subordinate
Public maintenance fund and house sale
fund deposited into MPF Management 0 0 0
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 shareholding 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 recognized 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 can be 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 residual Annual depreciation
Category
Method period (Year) rate(%) rate (%)
straight-line
Buildings 8-50 5 1.90— 11.88
depreciation
straight-line
Electronic equipment 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
Right-of use assests refer to the right of the Company as the lessee to use the leased assets during the
term of the lease.
(1) Initial measurement: At the commencement date of the lease, the company recongnizes an initial
measurement of the right-of –use assets as cost, not including the following four terms: ①the intitial
measurement amount of the lease liability; ②the lease payment on the lease date or before. If there is lease
incentive, the amount of lease incentive already enjoyed shall be deducted; ③initial direct expenses incurred
by the lessee, as is incremental cost incurred in achieving the lease;④The cost to be expected, which iccures
for disassembling & removing and recovering lease assets where is in the place, or lease assets recovering to
the state of lease term agreed upon on, shall be subject to the Accounting Standards for Business Enterprises
No.1 – inventory.
The company comfirms and mesearues the above as the the Accounting Standards for Business
Enterprises No.13- contingencies.
(2) Subsequent measurement: After the commencement date of the lease term, if the company adopts
the cost model to carry out subsequent measurement of the right-of-use assets, that is, it is measured at cost
less accumulated depreciation and accumulated impairment losses; the company remeasured lease
liabilities as the lease regulations, and adjust the book value of the right-of-use asset accordingly.
With reference to the relevant depreciation provisions of Accounting Standards for Business
Enterprises No. 4 - Fixed Assets, the Company accrues depreciation for right-of-use assets. From the
commencement date of the lease term, the Company accrues depreciation for the right-of-use asset.
Right-of-use assets are generally depreciated from the month in which the lease term begins. The accrued
depreciation amount is included in the cost of the relevant assets or the current profit and loss according to
the purpose of the right-of-use asset. When determining the depreciation method of the right-of-use asset,
the Company makes a decision based on the expected consumption pattern of the economic benefits
related to the right-of-use asset, and depreciates the right-of-use asset on a straight-line basis. When
determining the depreciation period of the right-of-use asset, the company follows the following principles:
if it can be reasonably determined that the ownership of the leased asset will be obtained at the expiration
of the lease term, depreciation will be accrued within the remaining useful life of the leased asset; If the
asset is owned, depreciation is accrued within the shorter of the lease term and the remaining useful life of
the leased asset.
If the right-of-use asset is depreciated, the company will carry out subsequent depreciation according
to the book value of right-of-use assets after deducting the impairment loss.
The company has chosen not to recognize right-of-use assets and lease liabilities for short-term leases
(leases with a lease term of not more than 12 months) and low-value asset leases, and has included the
relevant lease payments on a straight-line basis over each period of the lease term. Current profit and loss
or related asset cost. Please refer to Note III 21-Long-term Assets Impairmen for the method of impairment
test and provision for impairment of right-of-use assets.
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:
Item Amortization period (year) Amortization method
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 recognizes 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
recognizes 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 recognized
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 the settlememt enterprise are not the same, then the payment should be recognized 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 lease 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 financial 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 financial 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
deducted in the current period, the difference between the 1%、3%、5%、6%、
Value Added Tax sales of goods, taxable services and taxable services
income calculated in accordance with the provisions of 9%、10%、13%
the Tax Law is the taxable value-added 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 the
3%
education funds basis of actual payment
Local Extra Charges According to value added tax and consumption tax on the
2%
of Education Funds basis of actual payment
25%、20%、17%、
Corporate Taxes According to taxable income
15%
According to 70% of original value of the real estate (or
Property Tax rental income) as the tax base; according to the original 12%、1.2%
value of the real estate deducted 30% at a time.
Representation on tax payers of different enterprise income tax rates:
Tax Payers Income Tax Rate
Hangzhou Lin'an Chunmanyuan Agricultural
20%
Development Co., Ltd.
Jingliang (Singapore) International Trade Co., Ltd. 17%
Beijing Guchuan Bread Food Co., Ltd. 15%
2. Important preferential tax policies and basis
The level 3 subsidiary of the company, Hangzhou Linan Little Angel Food Co., Ltd.,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 level 3 subsidiary of the company, Beijing Tianweikang oil and fat distribution center Co., Ltd., is
exempt from stamp tax on capital account books and purchase and sales contracts signed in the course of
undertaking commodity reserve business according to the announcement of the Ministry of Finance and
the State Administration of Taxation on the continuation of the preferential tax policies for some national
commodity reserves (No. 8 of 2022) issued by the Beijing Municipal Bureau of finance, the State
Administration of Taxation and the Beijing Municipal Bureau of Taxation (Beijing Finance Tax [2022] No.
1230), Stamp tax payable by other parties to the contract shall be collected according to regulations. The
real estate and land used for self use by undertaking commodity reserve business shall be exempted from
real estate tax and urban land use tax. The notice will be implemented from January 1, 2022 to December
31, 2023.
The level 3 subsidiary of the company, Jingliang (Singapore) International Trade Co., Ltd. is taxed
according to the principle of territoriality. According to Singapore's tax exemption policy, the company can
enjoy the following tax exemption plan: for the first $10000 of taxable income, deduct $7500; for the part
between $10001 and $200000, deduct $95000; for the part exceeding $200001, the company will not be
exempted. The company will pay income tax at the rate of 17% based on the taxable income after tax
exemption.
The level 4 subsidiary of the company, Hangzhou Linan Little Angel Food Co., Ltd., according to the
relevant provisions of the Notice on Enterprise Income Tax Preferential Policies for Employing Disabled
Persons (Cai Shui [2009] No. 70) issued by the Ministry of Finance and the State Administration of
Taxation, if an enterprise arranges disabled persons, it can deduct 100% of the salary paid to disabled
employees based on the actual deduction of the salary paid to them when calculating the taxable income.
The level 3 subsidiary of the company, Zhejiang Little Prince Food Co., Ltd., and the level 4
subsidiary of the company, Hangzhou Linan Little Angel Food Co., Ltd., according to the Zhejiang
Provincial People's Government Office Document No. 62 (2019), urban land use tax reduction and
exemption policies that are uniformly implemented by taxpayers in the manufacturing industry throughout
the province (including Ningbo City) can be enjoyed. Before December 31, 2022, urban land use tax
reductions of 100% and 80% for Class A and Class B enterprises can be enjoyed, respectively. The
maximum reduction limit is 100% of the urban land use tax amount that the unit should pay in the current
year 80%.
The level 4 subsidiary of the company, Linqing Little Prince Food Co., Ltd., 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 Announcement No.10, 2018
issued by Shandong Provincial Tax Bureau. The base of stamp duty payable in 2022 shall be calculated
according to 50% of the sales revenue.
The level 4 subsidiary of the company, Liaoning Xiaowangzi Food Limited, is subjected to the
regulation that 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.
The company level 4 subsidiary of the company, Jingliang (Hebei) Oil Industry Co., Ltd., according
to Announcement No. 8 of 2022 issued by the Ministry of Finance and the State Administration of
Taxation, the Ministry of Finance and the State Administration of Taxation on the Continuation of Tax
Preferential Policies for Some National Commodity Reserves, and Notice No. 8 issued by Hebei Province
on Organizing the Application of Tax Exemption Qualification for Local Reserve Commodity Storage
Enterprises, is subjected to the regulation that stamp duty is exempted on capital account books, and stamp
duty is exempted on purchase and sales contracts signed during the process of undertaking commodity
reserve business, Stamp duty payable by other parties to the contract shall be levied in accordance with
regulations. Real estate tax and urban land use tax are exempted for the self use of property and land that
undertake commodity reserve business. The execution period of this notice is from January 1, 2022 to
December 31, 2023. Our fourth level subsidiary, Jingliang (Hebei) Oil Industry Co., Ltd., has exempted the
sales of government reserve edible vegetable oil from value-added tax in accordance with the Notice of the
Ministry of Finance and the State Administration of Taxation on the Levy and Exemption of Value Added
Tax for Grain Enterprises (Cai Shui Zi [1999] No. 198).
The level 2 subsidiary of the company, Jingliang (Beijing) Food Marketing Management Co., Ltd.,
and the level 4 subsidiary of Linqing Little Prince Co., Ltd., according to Announcement No. 6 of 2023 of
the Ministry of Finance and the State Administration of Taxation on the Preferential Policies for Income
Tax for Small and Micro Enterprises and Individual Industrial and Commercial Households, is subjected to
the regulation that the portion of the annual taxable income of small and micro profit enterprises that does
not exceed 1 million yuan shall be reduced by 25% and included in the taxable income, and the enterprise
income tax shall be paid at a 20% tax rate.
The level 2 subsidiary of the company, Jingliang (Beijing) Food Marketing Management Co., Ltd.,
the level 4 subsidiary of Linqing Little Prince Co., Ltd. And the level 4 subsidiary of the company,
Hangzhou Lin'an Chunmanyuan Agricultural Development Co., Ltd., are subject to the Announcement of
the Ministry of Finance and the State Administration of Taxation on Further Implementing the "Six Taxes
and Two Fees" Reduction Policy for Small and Micro Enterprises in this period, issued by the Ministry of
Finance and the State Administration of Taxation in the form of Cai Shui [2022] No. 10. Our company
meets the conditions for the recognition of small and micro enterprises, The preferential policies applicable
for 2022 are as follows: "The people's governments of provinces, autonomous regions, and municipalities
directly under the central government shall determine based on the actual situation of the local area and the
needs of macroeconomic regulation, and small-scale value-added tax taxpayers, small low-profit
enterprises, and individual industrial and commercial households can reduce their capital tax, urban
maintenance and construction tax, real estate tax, urban land use tax, and stamp tax (excluding securities
transaction stamp tax) within a 50% tax amount range Farmland occupation tax and education surcharge,
local education surcharge.
Ⅴ. Changes in accounting policies, accounting estimates, and explanation of corrections to
previous errors
1. Changes in accounting policies
There is no change in accounting policies during the reporting period.
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.
Ⅵ. Notes on Items in Consolidated Financial Statements
Note: The beginning of the period refers to December 31th, 2022 and the end of the period refers to
June 30th, 2023. The previous period refers to the semiannual of 2022 and the current period refers to the
semiannual of 2023.
1. Monetary funds
(1) Classification list
Items Ending Balance Beginning Balance
Cash 24,244.79 10,693.10
Bank Deposits 1,204,708,171.25 541,089,415.35
Other Currency Funds 46,934,488.77 19,913,001.31
Total 1,251,666,904.81 561,013,109.76
Among them: the total amount of money deposited abroad 5,306,117.93 16,585,678.20
(2) 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 changes
16,175,691.49 11,005,983.98
included in current profits and losses
Among them: debt instrument investment 16,175,691.49 11,005,983.98
Total 16,175,691.49 11,005,983.98
3. Derivative financial assets
Items Ending Balance Beginning Balance
Changes in fair value of hedging instruments 153,000.00 201,549.12
Total 153,000.00 201,549.12
4. Notes receivale
(1) Classification list
Items Ending Balance Beginning Balance
Banker’s acceptance 154,945.01
Commerical acceptances
Items Ending Balance Beginning Balance
Total 154,945.01
5. Accounts Receivable
(1) Disclosed according to aging
Aging Ending Balance
Within 1 Year (including 1 year) 70,099,387.88
Among them: Within the credit (within 3 months) 64,381,969.87
Credit period to 1 year 5,717,418.01
1 to 2 years (including 2 years) 19,663,495.39
2 to 3 years (including 3 years) 7,499,480.04
3 to 4 years (including 4 years)
4 to 5 years (including 5 years)
More than 5 years 328,259.50
Sub-total 97,590,622.81
Less Bad Debt provision 2,805,192.06
Total 94,785,430.75
（2）Present according to the method of provision for bad debt
Ending Balance
Type(s) Book Balance Bad Debt Provision
Provision Book Value
Amount Ratio(%) Amount
Ratio(%)
Separate provision for bad debts 328,259.50 0.34 328,259.50 100.00
Portfolio provision for bad debts 97,262,363.31 99.66 2,476,932.56 2.55 94,785,430.75
Among them: portfolio 1 65,527,069.02 67.14 2,476,932.56 3.78 63,050,136.46
portfolio 2 31,735,294.29 32.52 31,735,294.29
Total 97,590,622.81 100.00 2,805,192.06 94,785,430.75
（Continued）
Beginning Balance
Type(s) Book Balance Bad Debt Provision
Provision Book Value
Amount Ratio(%) Amount
Ratio(%)
Separate provision for bad debts 328,259.50 0.41 328,259.50 100.00
Portfolio provision for bad debts 79,545,807.01 99.59 2,488,360.15 3.13 77,057,446.86
Among them: portfolio 1 67,813,844.17 84.90 2,488,360.15 3.67 65,325,484.02
Beginning Balance
Type(s) Book Balance Bad Debt Provision
Provision Book Value
Amount Ratio(%) Amount
Ratio(%)
portfolio 2 11,731,962.84 14.69 11,731,962.84
Total 79,874,066.51 100.00 2,816,619.65 77,057,446.86
A. Separate provision for bad debts
Ending Balance
Name Accounts Bad Debt Provision Provision
Receivable Provision Ratio Reason
Beijing Rongfa Lida Grain and Oil Trade Co., 163,143.00 163,143.00 expected
Ltd. 100.00 unrecoverable
151,844.00 151,844.00 expected
Fujian JINGXIN Industrial Group Co., Ltd. 100.00 unrecoverable
13,272.50 13,272.50 expected
Others 100.00 unrecoverable
Total 328,259.50 328,259.50 －－ －－
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 year) 39,001,364.78 25,725.34 41,621,729.49 53,832.41
Among them:
Within the credit 37,715,097.78 38,930,117.33
(within 3 months)
Credit period to 1 2
year 1,286,267.00 25,725.34 2 2,691,612.16 53,832.41
1 to 2 years 5
(including 2 years) 19,026,224.20 951,311.21 5 18,692,634.64 934,631.73
2 to 3 years 20
(including 3 years) 7,499,480.04 1,499,896.01 20 7,499,480.04 1,499,896.01
3 to 4 years
(including 4 years)
4 to 5 years 80
(including 5 years)
More than 5 years 100
Total 65,527,069.02 2,476,932.56 67,813,844.17 2,488,360.15
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 31,735,294.29 11,731,962.84
Ending Balance Beginning Balance
Name Accounts Bad Debt Provision Accounts Bad Debt Provision
receivable Provision Ratio receivable Provision Ratio
portfolio
Total 31,735,294.29 11,731,962.84
3. details of bad debt provision
The amount changed for the period
Beginning Ending
Items Withdrawal Other
Balance Addition Write-off Balance
or reversal changes
Bad debt provision on
individual basis 328,259.50 328,259.50
Credit impairment loss 2,488,360.15 2,656.98 8,770.61 2,476,932.56
Total 2,816,619.65 2,656.98 8,770.61 2,805,192.06
4. Accounts Receivable of the Top 5 Balances Collected by Debtors at the End of the Period
Ratio of total
Accounts Whether Bad Debt
Debtors accounts receivable Aging
receivable related Provision
(%)
Tangshan Caofeidian
1 to 2 years or 2
District Finance 25,997,336.04 26.64 No 2,424,788.81
to 3 years
Bureau
Shanghai Shounong
Investment Holding 19,432,675.33 19.91 Within 3 month Yes
Co., Ltd.
Kudi Technology
8,252,864.70 8.46 Within 3 month No
(Fujian) Co.,Ltd.
Zhejiang luqin
Supply Chain Within 4 month to
Management CO., 5,339,283.52 5.47 1 year
No
Ltd
Beijing Sanyuan seed
Industry Science and
3,288,386.72 3.37 Within 3 month No
Technology Co., Ltd
Feed Branch
Total 62,310,546.31 63.85 —— 2,424,788.81
6. Advanced Payment
(1) Advances are presented by age
Ending Balance Beginning Balance
Aging
Amount Ratio (%) Amount Ratio (%)
Within 1 year (including 1 year) 551,432,045.68 99.97 194,490,369.48 99.99
1 to 2 years (including 2 years) 144,000.00 0.03 5,278.58 0.01
2 to 3 years (including 3 years)
Ending Balance Beginning Balance
Aging
Amount Ratio (%) Amount Ratio (%)
More than 3 years
Total 551,576,045.68 100.00 194,495,648.06 100.00
(2) Advance payment of the top five Ending Balances by prepaid objects
Ratio of the total ending
Debtor Name Ending Balance
balance of prepayments (%)
Shanghai Shounong Investment Holding Co. , Ltd. 379,840,707.34 68.86
People’s Republic of China Tianjin Port Customs 34,401,072.95 6.24
Zhongchu Grain Zhenjiang grain and Oil Co. , Ltd 25,028,439.68 4.54
China Stored Grain Oil Co. , Ltd 23,236,284.00 4.21
China stored grain oil (Tangshan) Co. , Ltd. 15,949,391.34 2.89
Total 478,455,895.31 86.74
7. Other Receivables
A. Overview
(1) Classification
Item(s) Ending Balance Beginning Balance
Other Receivables 438,557,843.89 444,523,698.48
Total 438,557,843.89 444,523,698.48
B. Other Receivables
（1）Disclosed according to aging
Aging Ending Balance
Within 1 Year (including 1 year) 438,178,697.89
Among them: Within the credit (within 3 months) 325,052,390.76
Credit period to 1 year 113,126,307.13
1 to 2 years (including 2 years) 86,732.00
2 to 3 years (including 3 years) 67,888.00
3 to 4 years (including 4 years) 194,526.00
4 to 5 years (including 5 years)
More than 5 years 30,000.00
Sub-Total 438,557,843.89
Less Bad Debt provision
Total 438,557,843.89
（2）Classification of other receivables by nature of funds
Book Balance at End of Period Book Balance at Beginning of Year
Guaranteed Deposit and Deposit 425,195,908.35 436,908,577.53
Intercourse Funds of Units 12,221,802.45 5,728,584.30
Employee Receivables 817,509.23 1,051,023.02
Tax Refund Receivables 548,483.77
Others 322,623.86 287,029.86
Total 438,557,843.89 444,523,698.48
(3) Other receivables according to top five of balance at end of period collected by debtors
Proportion in Ending
Nature of Balance at End of overall ending balance of
Name of Organization Aging
Funds Period balance of other bad debt
receivables (%) reserves
Zhongtian Futures Co. , Ltd. margin 220,973,638.50 Within3month 50.39
Haitong Futures Co. , Ltd margin 160,014,429.87 Within3month 36.49
Beijing Pioneer Futures Co. ,
margin 16,256,670.00 Within3month 3.71
Ltd.
Guotuanxin Futures Co. , Ltd. margin 7,957,390.26 Within3month 1.81
Port of Tianjin customs of the Deposit for
tax increase 3,011,883.09 Within3month 0.69
People's Republic of China
Total 408,214,011.72 93.08
8. 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 287,416,443.90 287,416,443.90 445,721,945.85 4,599.51 445,717,346.34
Revolving
Materials 5,170,140.01 5,170,140.01 5,267,896.63 5,267,896.63
Goods and
materials in 266,834,372.64 266,834,372.64 337,276,381.65 337,276,381.65
transit
Inventory
goods 1,440,688,746.62 31,212,235.53 1,409,476,511.09 1,081,693,725.26 44,208,166.31 1,037,485,558.95
Replacement
of oil reserve 219,334,077.42 219,334,077.42 248,197,500.00 248,197,500.00
Total 2,219,443,780.59 31,212,235.53 2,188,231,545.06 2,118,157,449.39 44,212,765.82 2,073,944,683.57
(2) Inventory Falling Price Reserves and provision for impairment of contract performance costs
Increased Amounts in the Decreased Amounts in the
Balance at Current Period Current Period Balance at End
Items
Beginning of Year Recover or of Period
Accrual Others Others
Charge Off
Stock Goods 44,208,166.31 25,376,091.85 38,372,022.63
31,212,235.53
Increased Amounts in the Decreased Amounts in the
Balance at Current Period Current Period Balance at End
Items
Beginning of Year Recover or of Period
Accrual Others Others
Charge Off
Raw material 4,599.51 4,599.51
In total 44,212,765.82 25,376,091.85 38,376,622.14 31,212,235.53
（3）Stock Goods listed by major product type
Ending Balance Beginning Balance
Items Falling Price Falling Price
Book Balance Book Value Book Balance Book Value
Reserves Reserves
Grease
1,416,567,964.06 31,212,235.53 1,385,355,728.53 1,048,142,485.94 44,023,263.60 1,004,119,222.34
and oils
Food 24,120,782.56 24,120,782.56 33,551,239.32 184,902.71 33,366,336.61
Total 1,440,688,746.62 31,212,235.53 1,409,476,511.09 1,081,693,725.26 44,208,166.31 1,037,485,558.95
9. Non-current assets due within one year
Items Balance at End of Period Balance at Beginning of Period
Three-year term deposits 106,546,505.27 148,387,894.16
In total 106,546,505.27 148,387,894.16
10. Other Current Assets
Items Balance at End of Period Balance at Beginning of Period
Financial Products 405,999,000.00
Pre-paid Taxes and Fees 60,468,116.85 15,477,676.61
Pending Deduct VAT Input Tax 71,822,934.33 45,572,085.33
Fair Value Changes of Items Trapped
at Hedging 231,572,760.24 165,881,137.81
In total 363,863,811.42 632,929,899.75
11. Long-term Equity Investment
Increase or Decrease in the Current Period
Balance at Confirmed Profit and
Invested Unit
Beginning of Year Additional Negative
Loss on Investment
Investment Investment
under Equity Law
1. Cooperative Enterprise
Beijing CHIA TAI Feedmill
Limited 121,605,419.10 3,239,417.30
Sub-total 121,605,419.10 3,239,417.30
2. Joint Venture
China Grain Reserves (Tianjin)
Warehouse Logistics Co., Ltd. 115,506,829.06 3,772,879.56
Jingliang Mismi Catering
Management (Beijing) Co., Ltd. 6,441,668.82
Increase or Decrease in the Current Period
Balance at Confirmed Profit and
Invested Unit
Beginning of Year Additional Negative
Loss on Investment
Investment Investment
under Equity Law
Sub-total 121,948,497.88 3,772,879.56
Total 243,553,916.98 7,012,296.86
(Continued)
Increase or Decrease in the Current Period
Announce to Ending
Adjustment of Balance at End Balance of
Other Distribute Accrual of
other of Period Impairment
changes in Case Impairment Others
comprehensive Reserves
equity Dividends or Reserves
income
Profits
124,844,836.40
124,844,836.40
119,279,708.62
6,441,668.82
125,721,377.44
250,566,213.84
12. Other equity instruments investment
Item Ending Balance Beginning Balance
Chongqing long jinbao network technology co. LTD 20,000,000.00 20,000,000.00
Total 20,000,000.00 20,000,000.00
13. Investment Real Estate
(1) Investment Real Estate Adopting Cost Measurement Model
Items Buildings Land Use Right Total
One. Original Book Value
1. Balance at Beginning of Year 54,691,581.60 54,691,581.60
2. Increased Amounts in the Current Period 9,000,432.40 576,510.00 9,576,942.40
(1) Outsourcing
(2) Inventory transfer
(3) Others 9,000,432.40 576,510.00 9,576,942.40
3. Decreased Amounts in the Current Period
(1) Disposal
(2) Other transfer out
4. Balance at End of Period 63,692,014.00 576,510.00 64,268,524.00
Two. Accumulated Impairment and Accumulated
Amortization
1. Balance at Beginning of Year 24,298,508.66 24,298,508.66
2. Increased Amounts in the Current Period 7,853,306.06 202,739.35 8,056,045.41
(1) Accrual or Amortization 7,853,306.06 202,739.35 8,056,045.41
3. Decreased Amounts in the Current Period
(1) Disposal
(2) Other transfer out
4. Balance at End of Period 32,151,814.72 202,739.35 32,354,554.07
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 20,952,402.58 373,770.65
21,326,173.23
2. Book Value at Beginning of Year 19,805,276.24 19,805,276.24
14. Fixed Assets
1. Overview
(1) Classification
Items Balance at End of Period Balance at Beginning of Year
Fixed Assets 1,013,694,886.73 1,047,451,810.24
Disposal of Fixed Assets
In total 1,013,694,886.73 1,047,451,810.24
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
Beginning of Year 1,122,769,627.81 804,825,222.53 20,457,864.28 13,030,802.85 7,015,485.32 1,644,096.49 1,969,743,099.28
2. Increased
Amounts in the 5,224,389.40 10,769,641.77 1,167,164.62 658,831.34 177,108.99 8,849.56 18,005,985.68
Current Period
(1) Purchase 3,479,022.05 10,769,641.77 1,167,164.62 498,154.36 177,108.99 8,849.56 16,099,941.35
(2) Roll-in of
Project under 1,745,367.35 160,676.98 1,906,044.33
Construction
(3) Roll-in of
inventory
3. Decreased
Amounts in the 9,000,432.40 441,168.84 274,776.00 7,566.36 58,297.66 9,782,241.26
Current Period
(1) Disposal or
Scrap 441,168.84 274,776.00 7,566.36 58,297.66 781,808.86
(2) Other Turn-in 9,000,432.40 9,000,432.40
4. Balance at End
of Period 1,118,993,584.81 815,153,695.46 21,350,252.90 13,682,067.83 7,134,296.65 1,652,946.05 1,977,966,843.70
Two. Accumulated
Impairment
1. Balance at
Beginning of Year 417,797,356.22 465,777,890.41 13,737,392.56 9,541,958.53 5,664,529.67 652,098.03 913,171,225.42
2. Increased
Amounts in the 19,787,650.65 28,568,662.65 721,737.19 682,869.85 215,300.32 30,457.51 50,006,678.17
Current Period
(1) Accrual 19,787,650.65 28,568,662.65 721,737.19 682,869.85 215,300.32 30,457.51 50,006,678.17
3. Decreased
Amounts in the 6,986,360.14 717,265.14 262,789.80 5,630.13 53,965.03 8,026,010.24
Current Period
(1) Disposal or
Scrap 717,265.14 262,789.80 5,630.13 53,965.03 1,039,650.10
(2)Other Turn-out 6,986,360.14 6,986,360.14
4. Balance at End
of Period 430,598,646.73 493,629,287.92 14,196,339.95 10,219,198.25 5,825,864.96 682,555.54 955,151,893.35
Three. Impairment
Reserves
1. Balance at
Beginning of Year 9,047,959.13 72,104.49 9,120,063.62
2. Increased
Amounts in the
Current Period
(1) Accrual
3. Decreased
Amounts in the
Current Period
(1) Disposal or
Scrap
4. Balance at End
of Period 9,047,959.13 72,104.49 9,120,063.62
Four. Book Value
1. Book Value at
End of Period 679,346,978.95 321,452,303.05 7,153,912.95 3,462,869.58 1,308,431.69 970,390.51 1,013,694,886.73
2. Book Value at
Beginning of Year 695,924,312.46 338,975,227.63 6,720,471.72 3,488,844.32 1,350,955.65 991,998.46 1,047,451,810.24
(2) Fixed assets without property right certificate
Items Book Value Reasons for failure to complete certificate of title
Buildings 2,969,274.46 No title certificate for auxiliary assets
15. Project under Construction
1. Overview
(1) Classification
Items Balance at End of Period Balance at Beginning of Year
Project under Construction 38,472,961.91 22,695,003.52
Total 38,472,961.91 22,695,003.52
2. Project under Construction
(1) Situation of Project under Construction
Balance at End of Period Balance at Beginning of Year
Items Impairment Impairment
Book Balance Book Value Book Balance Book Value
Reserves Reserves
Third plant slope treatment
project 7,609,297.51 7,609,297.51 5,244,356.21 5,244,356.21
Comprehensive Free Trade
Zone feed processing project 6,123,665.24 6,123,665.24 5,224,681.81 5,224,681.81
Second factory walnut cake
production line 4,238,844.00 4,238,844.00 4,238,844.00 4,238,844.00
Konjac test line 1,875,277.65 1,875,277.65 1,787,067.94 1,787,067.94
Soybean puffing and rumen
soybean meal processing 9,666,877.40 9,666,877.40 1,618,517.50 1,618,517.50
project
Second factory baked potato
supporting automation line 953,600.00 953,600.00 953,600.00 953,600.00
Heat Energy Recovery and
utilization project 856,263.58 856,263.58 856,263.58 856,263.58
Odor control project 1,585,321.11 1,585,321.11 792,660.56 792,660.56
Test line for Vegetarian meat 542,214.80 542,214.80 542,214.80 542,214.80
Westhospital leaching
workshop decoration project 625,510.72 625,510.72 344,775.86 344,775.86
Second Plant Baked Potato
Line 2 flexible automation 1,261,061.95 1,261,061.95
transformation project
Expansion of Konjac
production line 869,036.30 869,036.30
Automatic transformation of
Mai Shao packaging 880,299.69 880,299.69
Others 1,385,691.96 1,385,691.96 1,092,021.26 1,092,021.26
Total 38,472,961.91 38,472,961.91 22,695,003.52 22,695,003.52
(2) Change Condition of Important Engineering Projects under Construction in the Current Period
Other
Roll-in Fixed
Increased Decreased
Balance at Assets Amount Balance at
Project Name Amounts in the Amounts in
Beginning of Year in the Current End of Period
Current Period the Current
Period
Period
Odor control project 792,660.56 792,660.55 1,585,321.11
Third plant slope
5,244,356.21 2,364,941.30 7,609,297.51
treatment project
Second factory walnut
4,238,844.00 4,238,844.00
cake production line
Other
Roll-in Fixed
Increased Decreased
Balance at Assets Amount Balance at
Project Name Amounts in the Amounts in
Beginning of Year in the Current End of Period
Current Period the Current
Period
Period
Konjac test line 1,787,067.94 88,209.71 1,875,277.65
Soybean puffing and
rumen soybean meal 1,618,517.50 8,048,359.90 - 9,666,877.40
processing project
Comprehensive Free
Trade Zone feed 5,224,681.81 898,983.43 6,123,665.24
processing project
Second Plant Baked
Potato Line 2 flexible
1,261,061.95 1,261,061.95
automation
transformation project
Total 18,906,128.02 13,454,216.84 32,360,344.86
16. Right-of-use asset
Transportation
Items Buildings Land Use Right In total
Equipment
One Original Book Value
1. Balance at Beginning of
Year 4,423,305.76 630,874.50 4,970,592.00 10,024,772.26
2. Increased Amounts in the
Current Period
(1) Lease
3. Decreased Amounts in the
Current Period
(1) Expiration of the lease or
change the lease term
4. Balance at End of Period 4,423,305.76 630,874.50 4,970,592.00 10,024,772.26
Two Accumulated
Depreciation
1. Balance at Beginning of
Year 2,733,787.38 96,622.68 225,936.00 3,056,346.06
2. Increased Amounts in the
Current Period 623,367.02 47,239.27 56,484.00 727,090.29
(1) Accrual 623,367.02 47,239.27 56,484.00 727,090.29
3. Decreased Amounts in the
Current Period
Lease expiration or change
4. Balance at End of Period 3,357,154.40 143,861.95 282,420.00 3,783,436.35
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 1,066,151.36 487,012.55 4,688,172.00 6,241,335.91
2. Book Value at Beginning
of Year 1,689,518.38 534,251.82 4,744,656.00 6,968,426.20
17. Intangible Assets
(1) Intangible Assets Situation
Other
Items Software Land Use Right Trademark Right In total
s
One Original Book Value
1. Balance at Beginning of
Year 5,172,273.84 316,139,303.96 154,841,200.00 476,152,777.80
2. Increased Amounts in the
Current Period 98,141.60 5,430,549.36 5,528,690.96
(1) Purchase 98,141.60 5,430,549.36 5,528,690.96
(2)Internal R&D
(3)Increase in business
consolidation
3. Decreased Amounts in
the Current Period 576,510.00 576,510.00
(1) Disposal
(2) Turn out 576,510.00 576,510.00
4. Balance at End of Period 5,270,415.44 320,993,343.32 154,841,200.00 481,104,958.76
Two Accumulated
Amortization
1. Balance at Beginning of
Year 4,176,674.41 75,467,995.64 71,463,223.41 151,107,893.46
2. Increased Amounts in the
Current Period 108,117.86 3,488,532.41 3,856,962.95 7,453,613.22
(1) Accrual 108,117.86 3,488,532.41 3,856,962.95 7,453,613.22
3. Decreased Amounts in
the Current Period 201,778.50 201,778.50
(1) Disposal
(2) Turn out 201,778.50 201,778.50
4. Balance at End of Period 4,284,792.27 78,754,749.55 75,320,186.36 158,359,728.18
Three Impairment Reserves
1. Balance at Beginning of
Year
2. Increased Amounts in the
Current Period
Other
Items Software Land Use Right Trademark Right In total
s
(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 985,623.17 242,238,593.77 79,521,013.64 322,745,230.58
2. Book Value at Beginning
of Year 995,599.43 240,671,308.32 83,377,976.59 325,044,884.34
18. Goodwill
Original Book Value of Goodwill
Increase in the Current Decrease in the Current
Name of Invested Balance at Period Period
Balance at End
Unit or Items Forming Beginning of Formed by
of Period
Goodwill Year Enterprise Others Disposal Others
Merger
Acquire stock shares
of Zhejiang
Xiaowangzi Food 191,394,422.51 191,394,422.51
Co., Ltd.
In total 191,394,422.51 191,394,422.51
The goodwill of the company is mainly formed by the acquisition of the equity of Zhejiang Little
Prince Food Co., Ltd. the asset group of the goodwill is mainly composed of fixed assets, investment real
estate, intangible assets and projects under construction.
19. 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
plant 13,539,943.97 337,094.04 13,202,849.93
Amortization of laboratory
decoration costs 2,230,677.31 80,246.16 2,150,431.15
Factory No.3 compartment
maintenance 516,335.99 333,206.96 72,601.19 776,941.76
Housing renovation 649,010.65 494,801.98 59,872.26 1,083,940.37
Total 16,935,967.92 828,008.94 549,813.65 17,214,163.21
20. 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 Deferred Income Deductible Deferred Income Tax
Temporary Tax Assets Temporary Assets
Difference Difference
Asset Impairment
Reserves 31,274,517.52 7,818,629.38 44,268,191.18 11,067,047.80
Lease liabilities 142,681.30 35,670.33 167,668.58 41,917.15
Deductible Loss 1,383,480.84 345,870.21 1,383,480.84 345,870.21
Credit impairment Loss 3,811,842.32 952,960.58 3,811,842.32 952,960.58
Deferred Income 11,824,538.36 2,956,134.59 11,824,538.36 2,956,134.59
Wages payable 5,677,134.00 1,419,283.50 5,677,134.00 1,419,283.50
Valuation of Financial
Instruments and
Derivative Financial 7,516,681.73 1,879,170.43 211,060.00 52,765.00
Instruments
Contract rebate 3,451,347.72 862,836.93 3,215,300.44 803,825.11
In total 65,082,223.79 16,270,555.95 70,559,215.72 17,639,803.94
(2) Details of Deferred Income Tax Liabilities Not Being Offset
Balance at End of Period Balance at Beginning of Year
Items Taxable
Taxable Temporary Deferred Income Tax Deferred Income Tax
Temporary
Difference Liabilities Liabilities
Difference
Valuation and
appreciation of assets in
merger of enterprises 139,511,373.01 34,877,843.25 144,667,350.88 36,166,837.72
not under the same
control
Valuation of Financial
Instruments and
Derivative Financial 155,135,359.76 38,783,839.94 54,719,042.81 13,679,760.70
Instruments
Right to use assets 34,449.15 8,612.29 34,449.15 8,612.29
Total 294,681,181.92 73,670,295.48 199,420,842.84 49,855,210.71
(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 tax
Items deferred tax
between deferred tax and liabilities at the assets and liabilitie
assets and
assets and liabilities end of last period at the end of last
liabilities
period
Deferred tax asset 3,015,308.80 13,255,247.15 3,450,040.01 14,189,763.93
Deferred tax liabilities 3,015,308.80 70,654,986.68 3,450,040.01 46,405,170.70
(4)Details of Deferred Income Tax Assets Not Being Confirmed
Items Balance at End of Period Balance at Beginning of Year
Deductible temporary differences
Deductible Loss 162,271,141.83 160,184,970.56
In total 162,271,141.83 160,184,970.56
(5)Deductible loss on deferred income tax assets not being confirmed will be due at the following
years
Year Balance at End of Period Balance at Beginning of Year Notes
2023 9,688,448.81 9,688,448.81
2024 47,153,825.45 47,153,825.45
2025 25,114,592.05 25,114,592.05
2026 12,221,704.26 12,221,704.26
2027 66,006,399.99 66,006,399.99
2028 2,086,171.27
Total 162,271,141.83 160,184,970.56
21. Other Non-current Assets
Ending Balance Beginning Balance
Items Provision Provision
Book balance for Book value Book balance for Book value
impairment impairment
Three-year
term 33,895,087.34 33,895,087.34 53,544,782.34 53,544,782.34
deposit
Total 33,895,087.34 33,895,087.34 53,544,782.34 53,544,782.34
22. Short-term Borrowings
（1）Classification of Short-term Borrowings
Items Balance at End of Period Balance at Beginning of Year
Guaranteed Loan 1,642,308,166.66 1,260,543,148.81
In total 1,642,308,166.66 1,260,543,148.81
23. Derivative financial liability
Item Ending balance Beginning balance
Changes in fair value of hedging instruments
84,108,320.00 111,373,155.00
Total 84,108,320.00 111,373,155.00
24. Notes Payable
Item Ending balance Beginning balance
Bank acceptance bill 3,331,333.80
Total 3,331,333.80
25. Accounts Payable
（1）Accounts Payable Listed
Items Balance at End of Period Balance at Beginning of Year
Items Balance at End of Period Balance at Beginning of Year
Material Funds Payable 113,538,785.12 99,975,435.40
Project Funds Payable 7,586,930.60 8,989,252.43
Equipment Funds Payable 271,620.81 765,432.60
Others 7,334,252.50 1,181,756.78
In total 128,731,589.03 110,911,877.21
26. Advance payment
（1）Advance payment Listed
Items Balance at End of Period Balance at Beginning of Year
Advance collection of rent 1,371,674.51 922,982.41
In total 1,371,674.51 922,982.41
27. Contract liabilities
（1） Classification of contract liabilities
Items Balance at End of Period Balance at Beginning of Year
Loans 589,737,348.35 285,555,581.80
In total 589,737,348.35 285,555,581.80
28. Wages Payable
（1）List of Wages Payable
Balance at Increase in the Current Decrease in the Balance at End of
Items
Beginning of Year Period Current Period Period
One Short-term
Compensation 42,220,454.37 129,794,334.67 158,476,573.49 13,538,215.55
Two
After-service
Welfare- Set up 1,708,306.39 16,697,603.52 16,941,858.13 1,464,051.78
ESP liabilities
Three
Dismission 240,454.26 240,454.26
Welfare
In total 43,928,760.76 146,732,392.45 175,658,885.88 15,002,267.33
（2）List of Short-term Compensation
Balance at Increase in the Decrease in the Balance at End of
Items
Beginning of Year Current Period Current Period Period
1. Wage, Bonus, Allowance
and Subsidy 38,119,437.46 105,739,879.46 133,942,598.44 9,916,718.48
2. Welfare Expense of
Employee 6,920.00 3,851,141.03 3,817,968.23 40,092.80
3. Social Insurance Expense 832,783.50 9,578,934.23 9,801,131.53 610,586.20
Among them: Medical
Insurance Premiums 750,291.67 8,824,747.29 9,025,984.28 549,054.68
Industrial Injury Insurance
Premiums 66,211.98 559,270.87 579,086.94 46,395.91
Balance at Increase in the Decrease in the Balance at End of
Items
Beginning of Year Current Period Current Period Period
Birth Insurance Premiums 16,279.85 162,207.82 163,352.06 15,135.61
Others 32,708.25 32,708.25
4. Housing Provident Funds 146,594.49 8,349,033.00 8,380,862.00 114,765.49
5. Labor Union Expense and
Personnel Education Fund 3,114,718.92 2,275,346.95 2,534,013.29 2,856,052.58
In total 42,220,454.37 129,794,334.67 158,476,573.49 13,538,215.55
（3）List of Stated Drawings Plan
Balance at Increase in the Current Decrease in the Balance at End of
Items
Beginning of Year Period Current Period Period
1. Basic Pension
Insurance 1,616,949.93 14,377,885.25 14,609,042.21 1,385,792.97
2. Unemployment
Insurance Expense 42,937.75 477,670.30 487,651.13 32,956.92
3. Enterprise
Annuity Charges 48,418.71 1,842,047.97 1,845,164.79 45,301.89
Total 1,708,306.39 16,697,603.52 16,941,858.13 1,464,051.78
29. Taxes and Fees Payable
Items Balance at End of Period Balance at Beginning of Year
Corporate Income Tax 12,163,716.53 39,893,369.93
VAT 4,672,877.79 18,489,749.05
Urban Maintenance and Construction Tax 697,085.89 1,352,280.58
House Property Tax 1,003,999.30 2,316,064.99
Land Use Tax 279,642.34 150,746.89
Individual Income Tax 395,864.23 2,331,343.41
Educational Surtax 247,729.15 542,273.76
Local Educational Surtax 217,295.83 413,658.90
Stamp Tax 241,216.09 1,135,833.99
Environmental protection tax 3,162.78 3,732.68
In total 19,922,589.93 66,629,054.18
30. Other Accounts Payable
A. Overview
(1) Classification
Items Balance at End of Period Balance at Beginning of Year
Interest Payable 21,082,795.47 21,082,795.47
Dividends Payable 3,213,302.88 3,213,302.88
Other Accounts Payable 89,161,679.89 59,703,587.21
In total 113,457,778.24 83,999,685.56
B. Interest Payable
(1) Classification
Items Balance at End of Period Balance at Beginning of 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
Items Balance at End of Period Balance at Beginning of Year
Common stock dividends
Others 3,213,302.88 3,213,302.88
In total 3,213,302.88 3,213,302.88
D. Other Accounts Payable
(1) List of Other Accounts Payable by Nature of Funds
Items Balance at End of Period Balance at Beginning of Year
Guaranteed Deposit and Deposit 37,852,852.41 18,847,429.40
Intercourse Funds between Units 33,094,910.72 27,733,578.06
Intercourse Funds of Related Parties 4,401,686.83 3,070,641.51
Personal Intercourse Funds 3,135,810.63 3,829,316.55
Various Insurances of Employee 4,170,279.11 2,507,094.75
Others 6,506,140.19 3,715,526.94
In total 89,161,679.89 59,703,587.21
31. Non-current liabilities due within one year
Item End balance Beginning balance
Current portion of lease liability 628,515.16 1,432,706.14
Total 628,515.16 1,432,706.14
32. Other current liability
1.Other current liability statement
Item End balance Beginning balance
Sales tax to be transferred 56,434,136.00 56,184,255.30
Total 56,434,136.00 56,184,255.30
33. Long term borrowing
Item End balance Beginning balance
Credit Loan 600,000,000.00 500,284,166.67
Total 600,000,000.00 500,284,166.67
34. Lease liability
Beginning
Item End balance
balance
Lease liability 1,427,888.14 2,216,669.37
Less:Unrecognized financing expenses 42,115.18 79,572.25
Non current liabilities reclassified to maturity within one year 628,515.16 1,432,706.14
Total 757,257.80 704,390.98
35. 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
Other Long-term Welfare 5,677,134.00 5,677,134.00
In total 5,677,134.00 5,677,134.00
36. Deferred Income
Balance at
Increase in the Decrease in the Balance at End Cause of
Items Beginning of
Current Period Current Period of Period Formation
Year
Government Subsidy 64,550,917.36 1,042,216.25 63,508,701.11
In total 64,550,917.36 1,042,216.25 63,508,701.11
Among them, items involving government subsidy are as follows:
Increase in Asset
Balance at
Items Receiving the Charge to Other Balance at related /
Beginning of
Subsidy Current other Profits changes End of Period income
Year
Period related
Enterprise foundation
supporting in the
construction stage of
Asset
"Tianjin Lingang 47,374,115.29 638,752.08 46,735,363.21 related
Industrial Zone
Management
Committee"
Special subsidy for
Asset
infrastructure 8,520,037.90 8,520,037.90 related
investment
The relocation Asset
compensation 3,462,874.32 3,462,874.32 related
“Oil tank expansion and
Winter Transformation 2,522,657.94 125,090.45 2,397,567.50
Project” subsidy fund
Tianjin Binhai New
District’s Industrially
Technical Renovation
and Park Construction Asset
Funds as well as 1,648,147.97 111,111.12 1,537,036.84 related
Expenditures for
Science and
Technology
Key technology
research and
industrialization project Asset
of "moderate 622,710.56 38,919.42 583,791.14 related
processing" of grain
and oil
Construction of
provincial grain reserve
Asset
information 232,373.66 100,343.16 132,030.50 related
management system to
form asset entry project
Design of electric
Asset
heating system for oil 167,999.72 28,000.02 139,999.70 related
tank
In total 64,550,917.36 1,042,216.25 63,508,701.11
37. Share Capital
Balance at
Changes in the Current Period（+、-）
End of Period
Balance at
Items Beginning of Share
New Share
Year Transfer of
Share Donati Others Sub-total
Provident
Issue on
Fund
1. Shares with
Restricted 41,159,887.00 -10,289,972.00 30,869,915.00
Conditions
(1) State
Shareholding
(2) State-owned
Legal-person
Shareholding
(3) Other
Domestic Capital 41,159,887.00 -10,289,972.00 30,869,915.00
Shareholding
Including:
Domestic
Legal-person
Shareholding
Domestic Natural
Person 41,159,887.00 -10,289,972.00 30,869,915.00
Shareholding
(4) Foreign
Shareholding
Including:
Foreign
Legal-person
Shareholding
Foreign Natural
Person
Shareholding
2. Tradable Shares
without Restricted 685,790,364.00 10,289,972.00 696,080,336.00
Conditions
(1) RMB
Ordinary Shares 620,815,364.00 10,289,972.00 631,105,336.00
(2) Domestically
Listed Foreign 64,975,000.00 64,975,000.00
Shares
(3) Listed Foreign
Shares Overseas
(4) Others
In total 726,950,251.00 726,950,251.00
38. Capital Reserves
Balance at Beginning Increase in the Decrease in the Balance at End of
Items
of Year Current Period Current Period Period
Capital Premium (Stock
Premium) 1,322,887,986.38 1,322,887,986.38
Capital Reserves Roll-in
Under Original System 112,316,357.36 112,316,357.36
Other Capital Reserves 243,474,007.21 243,474,007.21
In total 1,678,678,350.95 1,678,678,350.95
39. Other Comprehensive Incomes
Amounts Occurred in the Current Period
Less:
Other
Compre Less: included
hensive in other
Amounts Incomes comprehensiv Attributa
Less:
Occurred Charged e income in Attributabl ble to
Balance at Income
Items before at the previous e to Parent Minority Balance at End
Beginning of Tax
Income Tax Earlier period and Company Sharehold of Period
Year Expens
in the Current Stage transferred to After Tax ers After
e
Period and retained Tax
Current income in the
Roll-in current period
Profit
and Loss
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
Two Other
comprehensive
incomes that will 1,005,720.50 730,651.63 730,651.63 1,736,372.13
be classified into
profit and loss
1. Other
comprehensive
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
6. Converted
difference
between foreign
currency 1,005,720.50 730,651.63 730,651.63 1,736,372.13
financial
statements
Total 1,005,720.50 730,651.63 730,651.63 1,736,372.13
40. Surplus Reserves
Balance at Increase in the Decrease in the Balance at End of
Items
Beginning of Year Current Period Current Period Period
Statutory Surplus Reserves 84,487,609.05 84,487,609.05
Free Surplus Reserves 37,634,827.93 37,634,827.93
In total 122,122,436.98 122,122,436.98
41. Undistributed Profit
Amounts in the Amounts in the
Items
Current Period Prior Period
Adjustment on undistributed profit at end of last year 532,904,675.62 391,493,534.34
Amounts in the Amounts in the
Items
Current Period Prior Period
Adjustment on total number of undistributed profit at beginning
of period (increase+ and decrease-)
Adjusted undistributed profit at beginning of period 532,904,675.62 391,493,534.34
Add: net profit attributable to parent company in the current
period 73,581,795.36 72,587,347.65
Other factor -23,682.87
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 606,486,470.98 464,080,881.99
42. 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 4,792,494,443.33 4,604,819,197.36 5,494,462,329.87 5,267,887,989.16
Other Business 30,739,764.85 26,151,271.78 18,318,940.45 6,476,103.50
In total 4,823,234,208.18 4,630,970,469.14 5,512,781,270.32 5,274,364,092.66
(2) Prime Business (Industry and Business-classified)
Amounts in the Current Period Amounts in the Prior Period
Name of Industry (or Business)
Revenue Cost Revenue Cost
Oil and Oil Seeds 4,305,004,934.04 4,237,929,626.02 5,029,994,012.13 4,897,082,807.80
Food Processing 487,489,509.29 366,889,571.34 464,468,317.74 370,805,181.36
In total 4,792,494,443.33 4,604,819,197.36 5,494,462,329.87 5,267,887,989.16
(3)Prime Business (Region-classified)
Amounts in the Current Period Amounts in the Prior Period
Name of Region
Revenue Cost Revenue Cost
North China 4,139,917,098.94 4,074,148,710.63 4,554,123,662.96 4,422,630,118.98
East China 375,856,398.15 279,165,994.80 364,861,708.51 286,122,942.00
Northeast China 68,978,807.28 53,627,460.77 70,369,663.99 58,672,431.76
South East 207,742,138.96 197,877,031.16 505,107,294.41 500,462,496.42
In total 4,792,494,443.33 4,604,819,197.36 5,494,462,329.87 5,267,887,989.16
43. Tariff And Annex
Amounts in the Prior
Items Amounts in the Current Period
Period
Amounts in the Prior
Items Amounts in the Current Period
Period
Urban Maintenance and Construction Tax 2,164,523.24 5,547,508.14
Educational Surtax 937,938.89 2,383,077.24
Local Educational Surtax 625,292.57 1,588,718.13
House Property tax 3,040,839.14 3,000,706.17
Land Use Tax 914,015.59 810,831.84
Stamp Tax 3,825,650.53 3,643,485.85
Vehicle and Vessel Use Tax 20,323.53 20,909.30
Other Taxes and Fees 20,090.39 20,628.49
In total 11,548,673.88 17,015,865.16
44. Sales Expenses
Amounts in the Amounts in the
Items
Current Period Prior Period
Employee Compensation (including social security, etc) 25,300,609.41 29,291,508.50
Sales Promotion Expenses 7,282,685.02 4,055,810.11
Warehousing Fees 14,257,898.37 8,497,141.26
Depreciation 7,985,937.31 7,901,751.09
Material consumption, sample and product cost 3,712,801.42 1,948,756.28
Travel Expenses 3,070,763.08 2,393,868.84
Repair Costs 115,097.47 125,442.17
Handling fees 146,400.18 392,895.96
Water and Electricity Fees 547,038.39 630,075.86
Vehicle Fees 481,627.88 131,919.41
Packing Expenses 251,296.30 53,683.76
Test and Detection Fees 133,279.64 88,133.90
Business Entertainment Expenses 1,514,904.94
Others 13,637,484.20 13,677,022.18
Total 78,437,823.61 69,188,009.32
45. Administration Expenses
Amounts in the Amounts in the
Items
Current Period Prior Period
Employee Compensation (including social security, etc) 50,938,225.39 50,434,025.42
Amortization of Assets 13,240,946.13 13,005,624.37
Impairment Costs 3,687,167.40 4,327,122.86
Fees of Employing Agent 3,545,562.82 2,920,279.69
Company Expenses 1,694,907.02 1,892,233.41
Repair Costs 1,485,217.53 1,473,228.80
Amounts in the Amounts in the
Items
Current Period Prior Period
Lease fee 1,437,456.70 2,080,164.07
Vehicle Fees 922,140.12 1,270,341.36
Information Network Fees 896,801.93 749,443.87
Business Entertainment Expenses 487,704.84 358,026.74
Environmental Protection Fees 475,656.29 640,492.40
Commercial Insurance Expenses 287,138.08 429,123.43
Workers Insurance Expenses 125,998.48 0.00
Security Protection Fees 822,264.35 424,416.84
Labor Protection Fees 27,309.72 190,101.64
Material Consumption 301,685.55 312,740.16
Travel Expenses 433,247.37 83,289.71
Other Expenses 12,089,152.49 7,150,012.92
In total 92,898,582.21 87,740,667.69
46. Research and Development Expenses
Items Amounts in the Current Period Amounts in the Prior Period
R&D Expenses 10,262,799.97 4,876,642.24
In total 10,262,799.97 4,876,642.24
47. Financial Expenses
Items Amounts in the Current Period Amounts in the Prior Period
Interest Expenses 25,265,021.07 16,391,856.85
Less: Interest Income 5,832,452.30 6,825,161.06
Exchange Profit and Loss -2,719,736.45 -196,022.86
Service Charges 552,216.18 3,198,614.15
In total 17,265,048.50 12,569,287.08
48. Other Profits
Amounts in the Amounts in the
Items
Current Period Prior Period
Government Subsidy Related to Daily Corporate Activities 6,149,861.75 6,346,260.64
Return of Service Charges of Withholding Individual Income Tax 156,397.49 92,739.41
Others 17,955.34
In total 6,324,214.58 6,439,000.05
49. Investment Income
Amounts in the Amounts in the
Items
Current Period Prior Period
Amounts in the Amounts in the
Items
Current Period Prior Period
Long-term equity investment income accounted with equity method 7,012,296.86 11,762,199.64
Investment income from disposal of wealth management products 267,083.33
Investment income of disposing trading financial asssets 128,861.80
Investment income obtained during the holding of transactional
financial assets 169,707.51 47,446.09
Others -2,721.38
In total 7,179,282.99 12,205,590.86
50. Profits on Changes in Fair Value
Amounts in the Amounts in the Prior
Source of generating income with changes in fair value
Current Period Period
Financial assets that are measured as per fair value and for
which the changes are included in the current profit and loss 143,869,459.30 49,424,487.23
Including: income with changes in fair value generated
by derivative financial instruments 143,869,459.30 49,424,487.23
Trading financial liabilities
In total 143,869,459.30 49,424,487.23
51. Credit impairment loss
Amounts in the Amounts in the Prior
Items
Current Period Period
Accounts receivable bad debt loss -115,984.57 -600.00
Other receivables bad debt loss
Total -115,984.57 -600.00
52. Assets impairment loss
项 目 Amounts in the Current Period Amounts in the Prior Period
Bad debt loss
Loss from inventory depreciation and loss
-25,186,589.63
from impairment of contract performance costs
Total -25,186,589.63
53. Assets Disposal Income
Amounts in the Current Amounts in the Prior
Items
Period Period
Gains or losses on disposal of fixed assets -2,209.46 441,741.39
In total -2,209.46 441,741.39
54. Non-operating Income
(1) Classification list
Amounts Charged
Amounts in the Amounts in the
Items to Non-recurring
Current Period Prior Period
Profit and Loss
Amounts Charged
Amounts in the Amounts in the
Items to Non-recurring
Current Period Prior Period
Profit and Loss
Total non current assets retirement gains: 10,274.33 40,746.10 10,274.33
Including: fixed assets scrap profit 10,274.33 40,746.10 10,274.33
profit from scrap of intangible assets
Deafult revenue 3,636,895.41 36,613.84 3,636,895.41
Non-payable liabilities 13,284.33 13,284.33
Government Subsidy 4,502.00
Relocation Compensation 98,808.18 354,192.63 98,808.18
Other Gains 144,239.11 39,160.87 144,239.11
In total 3,903,501.36 475,215.44 3,903,501.36
55. Non-operating Expenses
Amounts Charged
Amounts in the Amounts in the
Items to Non-recurring
Current Period Prior Period
Profit and Loss
Total non current assets retirement loss: 67,613.57 16,790.13 67,613.57
Including: fixed assets scrap loss 67,613.57 16,790.13 67,613.57
intangible assets scrap loss
Deafult revenue 65.46 96,944.84 65.46
Others 460,301.41 244,592.56 460,301.41
Total 527,980.44 358,327.53 527,980.44
56. Income Tax Expenses
(1) List of Income Tax Expenses
Amounts in the Prior Amounts in the Current
Amounts in the Current Period
Period Period
Income Tax Expenses of the Current Period 7,333,690.17 6,105,743.64
Deferred Income Tax Expenses 25,184,332.75 24,355,678.28
Total 32,518,022.92 30,461,421.92
(2) Accounting Profit and Income Tax Expense Adjustment Process
Amounts in the Current Amounts in the Prior
Items
Period Period
Total Profits 117,294,505.00 115,653,813.61
Income tax expenses calculated by
statutory/applicable tax rate 29,323,626.25 28,913,453.40
Effect of subsidiary corporations being applicable
to different tax rates -109,569.75 -465,871.81
Adjustment on effect of income tax in the prior
period 1,348,133.02
Effect of Non-taxable Incomes -2,568,992.91 -2,866,400.51
Effect of Non-deductible cost, expense and loss 8,614.93 17,385.49
Effect of deductible loss on usage of unconfirmed
deferred income tax assets in the prior period -36,728.82
Effect of deductible temporary difference or
deductible loss on unconfirmed deferred income 5,913,515.30 3,795,413.88
tax in the current period
Effect of deductions
Others -12,442.08 -280,691.55
Income Tax Expenses 32,518,022.92 30,461,421.92
57. Other comprehensive income items and their income tax impact and transferred to profit
and loss
See 39 Other Comprehensive Incomes under Section VIII of the Notes for details “Appendix Six
Notes on Items in Consolidated Financial Statements,
58. Notes to items related cash flow statement
(1) Receiving other cash related to operation activities
Amounts in the Amounts in the Prior
Items
Current Period Period
Intercourse Funds of Related Parties 879,899,688.90 1,092,728,826.43
Intercourse Funds of Other Units 129,523,949.12 77,884,840.10
Non-operating Income and other income 5,111,702.84 5,306,053.12
Interest Income 2,409,511.39 6,708,697.32
Future Margins 4,937,540.00 2,151,049.48
Others 1,929,648.28 4,800,305.29
Total 1,023,812,040.53 1,189,579,771.74
(2) Other Cash Payment Related to Operation Activities
Amounts in the Amounts in the Prior
Items
Current Period Period
Intercourse Funds of Related Parties 41,389,562.45 31,495,939.51
Intercourse Funds of Other Units 693,763,069.50 1,581,633,115.17
Payment for Administration Expenses 54,046,499.12 11,211,289.78
Payment for Operating Expenses 3,013,507.59 2,011,580.36
Non-operating Expenses 3,500,409.16 3,173,814.38
Petty Cash Paid 141,253.83 147,809.79
Bank Charges 369,183.00 358,327.53
Others 3,888,526.01 2,740,301.36
In total 800,112,010.66 1,632,772,177.88
(3)Other cash payments related to financing activities
Amounts in the Current Amounts in the Prior
Items
Period Period
Lease payment amount 574,077.78
In total 574,077.78
59. Supplementary Materials of Cash Flows Statement
(1) Supplementary Materials of Cash Flows Statement
Amounts in the Amounts in the Prior
Supplementary Materials
Current Period Period
1. Adjusting net accounting profit to operating cash
flow
Net Profit 84,776,482.08 85,192,391.69
Add: Assets Impairment Reserves 25,186,589.63
Credit impairment loss 115,984.57 600.00
Fixed Assets Depreciation, Oil-and-gas Assets
Depreciation and Productive Biological Assets 50,733,768.46 46,068,782.54
Depreciation
Amortization of Intangible Assets 7,453,613.22 7,432,845.06
Amortization of Long-term Deferred Expenses 549,813.65 784,346.16
Losses on Disposal of Fixed Assets, Intangible Assets and
Other Long-term Assets (Fill in profit with symbol “－”) 2,009.46 -441,741.39
Losses on Retirement of Fixed Assets (Fill in profit with
symbol “－”) 60,624.57 16,790.13
Losses on Changes in Fair Value (Fill in profit with
symbol “－”) -143,869,459.30 -49,424,487.23
Financial Expenses (Fill in profit with symbol “－”) 17,265,048.50 12,569,287.08
Investment Losses (Fill in profit with symbol “－”) -7,179,282.99 -12,205,590.86
Decrease in Deferred Income Tax Assets (Fill in increase
with symbol “－”) 934,516.78 11,308,682.37
Increase in Deferred Income Tax Reliabilities (Fill in
decrease with symbol “－”) 24,249,815.98 12,587,506.31
Decrease in Inventory (Fill in increase with symbol “－”) -114,286,861.49 -717,414,422.37
Decrease in Items of Operating Receivables (Fill in
increase with symbol “－”) -360,191,592.16 -64,104,630.81
Increase in Items of Operating Receivables (Fill in
decrease with symbol “－”) 276,849,383.25 493,019,231.89
Others
Net Cash Flows from Operating Activities -137,349,545.79 -174,610,409.43
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 1,251,666,904.81 810,888,971.64
Less: cash balance at beginning of period 551,439,110.07 506,928,810.69
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 700,227,794.74 303,960,160.95
(2) Composition of cash and cash equivalents
Balance at End of Balance at
Items
Period Beginning of Period
1.Cash 1,251,666,904.81 551,439,110.07
Including: cash in stock 24,244.79 10,693.10
Bank deposit available for payment at any time 1,204,708,171.25 531,515,415.66
Other currency funds available for payment at any
time 46,934,488.77 19,913,001.31
Deposits with central bank available for payment
Interbank deposit
Interbank placements
2.Cash Equivalents
Including: bond investment maturing within three months
3.Balance of Cash and Cash Equivalents at End of Period 1,251,666,904.81 551,439,110.07
Including: restricted cash and cash equivalents used by parent
company or intra-group affiliates
60. Assets with restricted ownership or right to use
Items Book Value at End of Period Reasons being Restricted
Investment Real Estate 5,369,095.43 Litigation Freeze
Fixed Assets 5,201,543.82 Litigation Freeze
In total 10,570,639.25
61. Monetary Items of Foreign Currency
(1) Monetary Items of Foreign Currency
Balance of Foreign
Balance of Converting to
Items Currency at End of Exchange Rate Convert
RMB at End of Period
Period
Monetary fund 1,957,173.26 7.2258 14,142,142.55
Including: US Dollars 1,957,173.26 7.2258 14,142,142.55
Accounts payable 587,546.12 7.2258 4,245,490.73
Including: US Dollars 587,546.12 7.2258 4,245,490.73
Other Payable 1,886,180.38 7.2258 13,629,162.16
Including: US Dollars 1,886,180.38 7.2258 13,629,162.16
(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.
62. Hedging items and related hedging instruments
Please refer to the related content on Derivative financial liability under Section VI (23) of the Notes.
63. Government Subsidies
（1）Basic conditions of government grants
Amount recorded
Type Amount Presentation item
in profit and loss
VAT refunds 2,909,904.59 Other income 2,909,904.59
Stable post subsidy 4,207.22 Other income 4,207.22
Port of Tianjin Free Trade Zone
Development and Reform Bureau in 2020
71,000.00 Other income 71,000.00
first to fourth batch of Tianjin energy
saving funds
Special Fund for Intelligent
Manufacturing of Science, technology and
100,000.00 Other income 100,000.00
Industrial Innovation Bureau of Port of
Tianjin Free Trade Zone (district level)
Employment Allowance for the disabled 75,262.57 Other income 75,262.57
Employment subsidy for employment
4,500.00 Other income 4,500.00
administration in Lin 'an District
Mayor of Tieling Award for quality (Little
200,000.00 Other income 200,000.00
Prince of Liaoning province）
Liaoning small prince expanded potato
chip production line new equipment 1,304,400.00 Other income 1,304,400.00
subsidies
Liaoning Little Prince New Factory
261,643.00 Other income 261,643.00
expansion support bonus
Tax Control System service fee 840.00 Other income 840.00
The credit bureau“Preempt the
60,000.00 Other income 60,000.00
opportunity, spell the economy” subsidy
Tax incentives for small and micro
1,188.12 Other income 1,188.12
enterprises
Land tax rebates 101,200.00 Other income 101,200.00
Subsidies for recruiting fresh graduates 13,500.00 Other income 13,500.00
“Tianjin Port Industrial Zone
Administrative Committee” construction Defer income,other
63,130,000.00 638,752.08
phase of enterprise infrastructure matching income
grants
Beijing food and material reserve
Defer income, Other
bureau“Oil tank expansion and Winter 2,626,900.00 125,090.45
income
Transformation Project” subsidy fund
Capital and expenditure on science and
Defer income, Other
technology for industrial and park 4,000,000.00 111,111.12
income
construction in Binhai New Area
Grain and oil“Moderate processing” key
Defer income,other
technology research and industrialization 1,089,743.60 38,919.42
incoe
projects to form fixed assets
The construction of provincial-level grain
Defer income , other
reserve information management system 633,746.30 100,343.16
income
forms an asset entry project
Green and clean production equipment for
Defer income, other
edible oil and electric heating system for 855,179.48 28,000.02
income
oil tank
In total 77,443,214.88 6,149,861.75
VII. Change in Consolidation Scope
There were no changes in the scope of consolidation for the company 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 100 100 the same
and Fat Co., trade
control
Ltd.
Jingliang Agricultural
Merger under
(Hebei) Oil Product and
Hebei Hebei 51 51 the same
Industry Co., By Product
control
Ltd. Processing
Beijing
Merger under
Guchuan Grain and oil
Beijing Beijing 100 100 the same
Edible Oil Co., trade
control
Ltd.
Agricultural
Beijing Merger under
Product and
Eisen-Lubao Beijing Beijing 100 100 the same
By Product
Oil Co., Ltd. control
Processing
Beijing
Tianweikang
Merger under
Oil
Beijing Beijing Warehousing 100 100 the same
Distribution
control
Center Co.,
Ltd.
Beijing
Merger under
Guchuan Food
Beijing Beijing 100 100 the same
Bread Food Processing
control
Co., Ltd.
Zhejiang Xiao
Food
Wang Zi Food Hangzhou Hangzhou 17.6794 77.2072 94.8866
Processing
Co., Ltd.
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 Food Combination
Linqing Linqing 17.6794 77.2072 94.8866
Wang Zi Food Processing not under
Name of Principle Registered Nature of Shareholding Voting Mode of
Subsidiary Place of Place Business Ratio (%) rights Acquisition
Co., Ltd. Business ratio 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
International Singapore Singapore Grain trade 100 100
by investment
Trade Co.,
Ltd.
Jingliang
(Caofeidian)
Establishment
Agricultural Tangshan Tangshan Plantation 51 51
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 65
products by investment
Industry Co.,
Ltd.
Jingliang
(Beijing) Food
Food Establishment
Marketing Beijing Beijing 100 100
Processing by investment
Management
Co., Ltd
(2) Major non-wholly-owned subsidiaries
Dividends
Profit And Loss Balance of
Shareholding Voting rights Distributed
Attributable to Minority
Ratio of ratio of to Minority
Minority Shareholder's
Name of Subsidiary Minority Minority Shareholders
Shareholders for Equity at the
Shareholders Shareholders for the
the Current End of the
(%) (%) Current
Period Period
Period
Zhejiang Xiao Wang Zi
Food Co., Ltd. 5.1134 5.1134 2,680,698.34 54,933,201.02
Jingliang (Tianjin) Grain
and Oil Industry Co., Ltd. 30.00 30.00 7,692,000.00 291,700,095.75
(3) Important financial information on major non-wholly-owned subsidiaries
Ending balance or Amount incurred in the current period
Items Zhejiang Xiao Wang Zi Jingliang (Tianjin) Grain and Oil
Food Co., Ltd. Industry Co., Ltd.
Current Assets 689,613,771.26 1,769,547,834.10
Non-current Assets 340,142,967.05 720,438,339.29
Items Ending balance or Amount incurred in the current period
Total Assets 1,029,756,738.31 2,489,986,173.39
Current Liabilities 98,855,827.71 1,030,677,448.23
Non-current Liabilities 17,660,046.22 486,976,623.09
Total Liabilities 116,515,873.93 1,517,654,071.32
Operating Income 428,413,574.82 2,364,528,344.23
Net Profit (Loss) 46,252,797.77 25,638,449.60
Total Comprehensive Income 46,252,797.77 25,638,449.60
Cash Flow from Operating Activities -2,843,845.04 568,809,524.65
(Continued)
Beginning balance or Amount incurred in the prior period
Items Zhejiang Xiao Wang Zi Jingliang (Tianjin) Grain and Oil
Food Co., Ltd. Industry Co., Ltd.
Current Assets 694,319,525.47 1,765,160,961.33
Non-current Assets 344,517,064.82 729,047,006.26
Total Assets 1,038,836,590.29 2,494,207,967.59
Current Liabilities 154,188,477.46 1,184,852,881.71
Non-current Liabilities 17,660,046.22 362,661,433.41
Total Liabilities 171,848,523.68 1,547,514,315.12
Operating Income 416,698,873.70 2,947,104,694.61
Net Profit (Loss) 37,568,959.39 32,495,157.75
Total Comprehensive Income 37,568,959.39 32,495,157.75
Cash Flow from Operating Activities 13,058,616.32 -213,367,607.66
2. Equity in Joint Ventures or Affiliates
(1)Important Joint Ventures or Affiliates
Shareholding Accounting
Principle Ratio (%) Treatment Methods
Name of Joint Registered Nature of
Place of for Investment in
Venture or Affiliate Place Business
Business Direct Indirect Joint Ventures or
Affiliates
1. Joint Ventures
(1) Beijing Zhengda
Beijing Beijing Manufacturer 50.00 Equity method
Feed Co., Ltd.
2. Affiliates
(1) SINOGRAIN
(Tianjin) Transportation
Tianjin Tianjin 30.00 Equity method
Warehousing and warehousing
Logistics Co., Ltd.
(2) Jingliang Misimi
food management Beijing Beijing Manufacturer 48.00 Equity method
Co.,Ltd
(2) Important financial information on major joint ventures
Ending Balance/Current Beginning Balance/Last Term
Item
Amount Amount
Beijing Zhengda Feed Co., Beijing Zhengda Feed Co.,
Ltd. Ltd.
Current assets 307,375,930.54 301,420,356.94
Including: cash and cash equivalents 26,707,472.30 21,778,758.99
Non-current assets 20,087,101.50 21,331,443.39
Total assets 327,463,032.04 322,751,800.33
Current liabilities 74,335,955.24 75,869,110.91
Non-current liabilities 3,050,827.76 4,593,536.23
Total liabilities 77,386,783.00 80,462,647.14
Minority shareholder's equity
Shareholders' equity attributable to the parent
250,076,249.04 242,289,153.19
company
Share of net assets based on shareholding ratio 125,038,124.52 121,144,576.60
Adjustments
-- Goodwill
-- Unrealized profits from internal transactions
-- Other -193,288.12
Book value of equity investment in joint
124,844,836.40 121,144,576.60
ventures
Fair value of equity investment in joint
ventures with open offers
Operating income 164,726,777.97 152,840,560.07
Financial costs -3,959,367.67 -3,176,445.74
Income tax expense 2,271,436.27 5,728,902.62
Net profit 6,478,834.60 17,186,709.90
Net profit from discontinued operations
Other comprehensive income
Total comprehensive income 6,478,834.60 17,186,709.90
Dividends received from affiliates in the
current period
(3) Important financial information on major affiliates
Beginning Balance/Last Term
Ending Balance/Current Amount
Amount
Item
SINOGRAIN (Tianjin) SINOGRAIN (Tianjin)
Warehousing Logistics Co., Ltd. Warehousing Logistics Co., Ltd.
Current assets 52,098,977.43 122,303,388.75
Non-current assets 851,901,950.11 816,481,284.48
Total assets 904,000,927.54 938,784,673.23
Current liabilities 51,839,195.69 110,559,868.69
Non-current liabilities 450,217,363.67 438,856,701.56
Total liabilities 502,056,559.36 549,416,570.25
Minority shareholder's equity
Shareholders' equity attributable to
401,944,368.18 389,368,102.98
the parent company
Beginning Balance/Last Term
Ending Balance/Current Amount
Amount
Item
SINOGRAIN (Tianjin) SINOGRAIN (Tianjin)
Warehousing Logistics Co., Ltd. Warehousing Logistics Co., Ltd.
Share of net assets based on
120,583,310.45 116,810,430.89
shareholding ratio
Adjustments
-- Goodwill
-- Unrealized profits from internal
transactions
-- Others -1,303,601.83
Book value of equity investment in
119,279,708.62 116,810,430.89
affiliates
Fair value of equity investment in
affiliates with open offers
Operating income 31,195,596.27 23,237,902.69
Net profit 12,576,265.20 10,562,815.64
Net profit from discontinued
operations
Other comprehensive income
Total comprehensive income 12,576,265.20 10,562,815.64
Dividends received from 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. June 30th, 2023
Financial assets Financial assets
measured at fair measured at fair value
Financial assets
Financial asset value and the and the changes
measured at Total
items changes recorded in recorded in other
amortized cost
current profits and comprehensive
losses income
Monetary funds 1,251,666,904.81 1,251,666,904.81
Transactional
16,175,691.49 16,175,691.49
financial assets
Derivative
153,000.00 153,000.00
financial assets
Notes receivables 154,945.01 154,945.01
Accounts
94,785,430.75 94,785,430.75
receivables
Other receivables 438,557,843.89 438,557,843.89
Investment in
other equity 20,000,000.00 20,000,000.00
instruments
Financial assets Financial assets
measured at fair measured at fair value
Financial assets
Financial asset value and the and the changes
measured at Total
items changes recorded in recorded in other
amortized cost
current profits and comprehensive
losses income
Current portion of
106,546,505.27 106,546,505.27
non-current assets
Other current
231,572,760.24 231,572,760.24
assets
Other non-current
33,895,087.34 33,895,087.34
assets
B. December 31, 2022
Financial assets
Financial assets
measured at fair
Financial assets measured at fair value
Financial asset value and the
measured at and the changes Total
items changes recorded in
amortized cost recorded in other
current profits and
comprehensive income
losses
Monetary funds 561,013,109.76 561,013,109.76
Transactional
11,005,983.98 11,005,983.98
financial assets
Derivative
201,549.12 201,549.12
financial assets
Accounts
77,057,446.86 77,057,446.86
receivables
Other receivables 444,523,698.48 444,523,698.48
Investment in
other equity 20,000,000.00 20,000,000.00
instruments
Current portion of
148,387,894.16 148,387,894.16
non-current assets
Other current
405,999,000.00 165,881,137.81 571,880,137.81
assets
Other non-current
53,544,782.34 53,544,782.34
assets
(2) Book value of various financial liabilities on the balance sheet date
A. June 30th, 2023
Financial liabilities measured
at fair value and changes Other financial
Financial liability items Total
included in current profits and liability
losses
Short term loans 1,642,308,166.66 1,642,308,166.66
Derivative financial liability 84,108,320.00 84,108,320.00
Notes Payable 0.00 0.00
Accounts Payable 128,731,589.03 128,731,589.03
Other Payables 113,457,778.24 113,457,778.24
Long term loans 600,000,000.00 600,000,000.00
B. December 31, 2022
Financial liabilities
measured at fair value and Other financial
Financial liability items Total
changes included in liability
current profits and losses
Short term loans 1,260,543,148.81 1,260,543,148.81
Derivative financial liability 111,373,155.00 111,373,155.00
Notes payable 3,331,333.80 3,331,333.80
Accounts payable 110,911,877.21 110,911,877.21
Other payables 83,999,685.56 83,999,685.56
Long term loans 500,284,166.67 500,284,166.67
2. Credit Risk
On June 30th, 2023, 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:
June 30th, 2023
Item Above Five
Within One Year 1 To 5 Years Total
Years
Short term loans 1,642,308,166.66 1,642,308,166.66
Derivative financial
84,108,320.00 84,108,320.00
liability
Notes payable
Accounts Payable 124,107,328.14 4,624,260.89 128,731,589.03
Other payables 113,457,778.24 113,457,778.24
Long term loans 600,000,000.00 600,000,000.00
December 31, 2022
Item
Within One Year 1 To 5 Years Above Five Years Total
Short term loans 1,260,543,148.81 1,260,543,148.81
Derivative financial 111,373,155.00 111,373,155.00
December 31, 2022
Item
Within One Year 1 To 5 Years Above Five Years Total
liability
Notes payable 3,331,333.80 3,331,333.80
Accounts payable 106,405,184.62 4,506,692.59 110,911,877.21
Other Payables 83,999,685.56 83,999,685.56
(Continued)
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 June 30th, 2023, the Company's interest-bearing liabilities under floating rate contracts
denominated in RMB amounted to RMB 1,248,197,500.00 and those under fixed rate contracts
denominated in RMB amounted to RMB 992,930,000.00.
(2) Exchange Rate Risk
The risk of foreign exchange changes faced by the company is mainly related to the company's
operating activities (when the income and expenditure are settled in a foreign currency different from the
recording currency of the company) and its net investment in overseas subsidiaries. The company's
exposure to foreign exchange risk is mainly related to US dollars. Except that some subsidiaries of the
company purchase and sell in US dollars, other major business activities of the company are priced and
settled in RMB. As of June 30, 2023, the assets and liabilities of the company are all RMB balances,
except that the assets or liabilities described in the following table are USD balances. The foreign
exchange risk arising from the assets and liabilities of such foreign currency balance may have an impact
on the operating performance of the company.
Items Ending Balance Beginning Balance
Monetary funds 14,142,142.55 26,078,226.16
Prepayments 4,245,490.73
Short term borrowings 208,938,000.00
Other Payable 13,629,162.16
Note: the company pays close attention to the impact of exchange rate changes 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. Since 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 contents are carried out on 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 profit and loss and equity is as follows:
Current period
Item [US dollar] Exchange Gross profit/net profit Increase/(decrease) in
rate Increase /(decrease) increase /(decrease) shareholders' equity
The yuan depreciated
against the US dollar 5% 237,923.56 237,923.56
The yuan appreciated
-5% -237,923.56 -237,923.56
against the US dollar
Prior period
Item [US dollar] Exchange Gross profit/net profit Increase/(decrease) in
rate Increase / (decrease) increase /(decrease) shareholders' equity
The yuan depreciated
against the US dollar 5% -38,998,793.58 -38,998,793.58
The yuan appreciated
against the US dollar -5% 38,998,793.58 38,998,793.58
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
First Level Fair Second Level Third Level
Item
Value Fair Value Fair Value Total
Measurement Measurement Measurement
One. Continuous fair value
measurement
Ⅰ. Transactional financial
16,175,691.49 0.00 0.00 16,175,691.49
assets
1. Financial assets that are
measured at fair value and
whose changes are included 16,175,691.49 0.00 0.00 16,175,691.49
in the current profits and
losses
(1) Investment in debt
16,175,691.49 16,175,691.49
instruments
(2) Investment in equity
0.00
instruments
(3) Derivative financial assets 0.00
2. Financial assets designated
as fair value through profit or 0.00
loss
(1) Investment in debt
0.00
instruments
(2) Investment in equity
0.00
instruments
(3) Others 0.00
Ⅱ. Other debt investment 0.00
Ⅲ. Investment in other equity
20,000,000.00 20,000,000.00
instruments
Total assets continuously
16,175,691.49 0.00 20,000,000.00 36,175,691.49
measured at fair value
Ⅵ.Transactional financial
84,108,320.00 0.00 0.00 84,108,320.00
liabilities
1. Financial liabilities
measured at fair value with
84,108,320.00 0.00 0.00 84,108,320.00
changes included in current
profits and losses
Including: transactional
0.00
bonds issued
derivative financial liability 84,108,320.00 84,108,320.00
others 0.00
2. Financial liabilities
designated as fair value 0.00
through profit or loss
Total liabilities
continuously measured at 84,108,320.00 0.00 0.00 84,108,320.00
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
Name of Parent Registered Legal Nature of Registered Capital
Company type
Company Place representative Business (ten thousand Yuan)
Wholly
Beijing Grain Investment
state-owned Beijing Zhang Lijun 90,000.00
Group Co. Ltd. Management
enterprise
(Continued)
Proportion of Shares Held Proportion of Voting Power
The ultimate controlling
by Parent Company in the Held by Parent Company in Organization code
party of the Company
Company (%) the Company (%)
Beijing State-owned Capital
39.68 39.68 Operation and Management 91110000700224507H
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 2. 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 Liubiju Foods Co.,Ltd Controlled by the ultimate controlling party
Shanghai Shounong Investment Holding Co.,Ltd Controlled by the ultimate controlling party
Beijing Sanyuan Seed Industry Technology Co.,Ltd Controlled by the ultimate controlling party
Beijing Dahongmen Grain Storage Co.,Ltd Controlled by the ultimate controlling party
Beijing Gushun Foods Co.,Ltd Controlled by the ultimate controlling party
Name of Other Related Party Relationship with the Company
Hebei Sanyuan Foods Co.,Ltd Controlled by the ultimate controlling party
Beijing Jingliang E-commerce Co.,Ltd Controlled by the ultimate controlling party
Beijing Hundred Years Chestnut Garden Ecological Controlled by the ultimate controlling party
Agriculture Co.,Ltd
Beijing Sanyuan Foods Co.,Ltd Controlled by the ultimate controlling party
Beijing Ershang Dahongmen Wulinlian Food Co.,Ltd Controlled by the ultimate controlling party
Beijing Heiliu Herding Technology Co.,Ltd Controlled by the ultimate controlling party
Beijing Ancient Boat Rice Co.,Ltd Controlled by the ultimate controlling party
Hebei Luanping Huadu Food Co.,Ltd Controlled by the ultimate controlling party
Beijing Shucheng Shanshui Real Estate Co.,Ltd Controlled by the ultimate controlling party
Beijing Bai Jiayi Food Co.,Ltd Controlled by the ultimate controlling party
Beijing Baofeng Vegetable Distribution Co.,Ltd Controlled by the ultimate controlling party
Beijing Jingliang Dongfang Grain and Oil Trading Co.,Ltd Controlled by the ultimate controlling party
Beijing Zhangxin Grain Reserve Co.,Ltd Controlled by the ultimate controlling party
Beijing Haidian Xijiao Grain and Oil Supply Station Controlled by the ultimate controlling party
Co.,Ltd
Beijing No.34 Food Supply Department Co.,Ltd Controlled by the ultimate controlling party
Beijing Shounong Dot-to-Dot E-commerce Co.,Ltd Controlled by the ultimate controlling party
Beijing Grain Group Co.,Ltd Controlled by the ultimate controlling party
Beijing Shounong Commercial Chain Co.,Ltd Controlled by the ultimate controlling party
Beijing Wuhuan Shuntong Supply Chain Management Controlled by the ultimate controlling party
Co.,Ltd
Beijing Shounong Consumption and Poverty Alleviation Controlled by the ultimate controlling party
Double Creation Center Co.,Ltd
Beijing Yunong Quality Agricultural Products Cultivation Controlled by the ultimate controlling party
Co.,Ltd
Beijing Shounong Taste Group Co.,Ltd Controlled by the ultimate controlling party
Beijing Ershang Xijie Food Co.,Ltd Controlled by the ultimate controlling party
Beijing Wang Zhihe Food Co.,Ltd Controlled by the ultimate controlling party
Hebei Shounong Modern Agriculture Technology Co.,Ltd Controlled by the ultimate controlling party
Shanghai Shounong Commercial Management Co.,Ltd Controlled by the ultimate controlling party
Beijing Shounong Food Group Finance Co.,Ltd Controlled by the ultimate controlling party
Beijing Shounong Food Group Co.,Ltd Controlled by the ultimate controlling party
Shandong Fukuan Biological Engineering Co.,Ltd Controlled by the ultimate controlling party
Chengde Sanyuan Jinxing Duck Industry Co.,Ltd Controlled by the ultimate controlling party
Beijing Xinderun Agricultural Tourism Development Controlled by the ultimate controlling party
Co.,Ltd
Beijing Ailai Fahi Foods Co.,Ltd Controlled by the ultimate controlling party
Name of Other Related Party Relationship with the Company
Beijing North Beijing Sugar & Wine Sales Co.,Ltd Controlled by the ultimate controlling party
Beijing Ershang Yiho Sunshine Real Estate Co.,Ltd Controlled by the ultimate controlling party
Beijing Shounong Big Kitchen Supply Chain Management Controlled by the ultimate controlling party
Group Co.,Ltd
Beijing Jinggou Taiyu Real Estate Co.,Ltd Controlled by the ultimate controlling party
Beijing Municipal Grain Research Institute Co.,Ltd Controlled by the ultimate controlling party
Beijing Jinggong Lugu Trading Co.,Ltd Controlled by the ultimate controlling party
Beijing Jiefang Grain & Oil Supply Co.,Ltd Controlled by the ultimate controlling party
Beijing Jinggong Logistics Co.,Ltd Controlled by the ultimate controlling party
Beijing Sanjiadian Grain Storage Co.,Ltd Controlled by the ultimate controlling party
Beijing Hongyuan Lijun Grain and Oil Supply Co.,Ltd Controlled by the ultimate controlling party
Beijing Jingliang Canal Grain and Oil Trading Co.,Ltd Controlled by the ultimate controlling party
Beijing Jingjing Jingu Grain Purchasing and Marketing Controlled by the ultimate controlling party
Co.,Ltd
Beijing Sons and Daughters Grain and Oil Supply Co.,Ltd Controlled by the ultimate controlling party
Beijing Longqing Xadu Military Grain Supply Co.,Ltd Controlled by the ultimate controlling party
Beijing Desheng Hotel Co.,Ltd Controlled by the ultimate controlling party
Beijing Shuangtong Huihe Agricultural Science and Controlled by the ultimate controlling party
Technology Development Co.,Ltd
Beijing Shounong Xiangshan Conference Center Co.,Ltd Controlled by the ultimate controlling party
Beijing Beijiao Farm Co.,Ltd Controlled by the ultimate controlling party
Beijing Yanqing Farm Co.,Ltd Controlled by the ultimate controlling party
Beijing Longmen Vinegar Co.,Ltd Controlled by the ultimate controlling party
Beijing Jingliang Biotechnology Group Co.,Ltd Controlled by the ultimate controlling party
Tianjin Xincheng Kanda Pharmaceutical Co.,Ltd Controlled by the ultimate controlling party
Beijing Xing Fashion Trade Co.,Ltd Controlled by the ultimate controlling party
Beijing Taoshan Grain Reserve Co.,Ltd Controlled by the ultimate controlling party
Beijing Shenghua Sihe Asset Management Co.,Ltd Controlled by the ultimate controlling party
Beijing Municipal Grain Co.,Ltd Controlled by the ultimate controlling party
Beijing Shounong Grain Reserve Co.,Ltd Controlled by the ultimate controlling party
Beijing Shounong Grain Reserve Co.,Ltd Controlled by the ultimate controlling party
Beijing Shounong Food Emergency Security Center Co.,Ltd Controlled by the ultimate controlling party
Beijing Yue Sheng Zhai Halal Food Co.,Ltd Controlled by the ultimate controlling party
Beijing Yanqi Yue Sheng Zhai Halal Food 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
Beijing Bainian Liyuan Ecological Agriculture
Purchase of goods 3,134.00 7,719.00
Co., Ltd
Beijing Beishui Food Industry Co., Ltd Purchase of goods 75,781.00
Beijing ershang Dahongmen five meat Co., Ltd Purchase of goods 343,499.50
Beijing ershang Mochi Zhonghong Food Co., Ltd Purchase of goods 3,927.00 32,992.00
Beijing ershang mu xiang yuan Qing zhen Meat
6,508.00
Food Group Co., Ltd
Beijing ershang Meat Food Group Co., Ltd Purchase of goods 1,695.00 182,656.94
Beijing Guchuan Rice Industry Co., Ltd Purchase of goods 1,203,330.50 139,190.30
Beijing Guchuan Food Co., Ltd Purchase of goods 6,462,585.18 6,374,564.09
Beijing heiliu animal husbandry technology Co.,
Purchase of goods 127,762.40 15,387.50
Ltd
Food center of Beijing heiliu animal husbandry
Purchase of goods 8,950.60 10,153.30
technology Co., Ltd
Beijing Huadu liquor Marketing Co., Ltd Purchase of goods 19,476.00 13,200.00
Beijing Huayu Food Co.,Ltd Purchase of goods 55,416.00
Beijing Jingliang Dongfang grain and Oil Trading
Purchase of goods 109,950.98 251,745.52
Co., Ltd
Beijing Liubiju Food Co., Ltd Purchase of goods 10,740.00 3,304.00
Beijing Nan jiao agriculture production
Purchase of goods 2,810.00
management Co., Ltd
Beijing Sanyuan Food Co., Ltd Purchase of goods 189,648.00 100,874.00
Beijing shounong diandao technology business
Purchase of goods 300.00
Co.,Ltd
Beijing Shounong Consumer Support
Purchase of goods 4,405.00
Shuangchuang Center Co. , Ltd.
Beijing Shuangtong Huihe Agricultural Science
Purchase of goods 732.00
and Technology Development Co. , Ltd.
Beijing sugar industry tobacco and Liquor Group
Purchase of goods 19,646.02 678.90
Co. , Ltd.
Beijing Yanqi Yueshengzhai Halal Food Co. , Ltd. Purchase of goods 232,494.60 993,596.60
Beijing Yueshengzhai Halal Food Co. , Ltd. Purchase of goods 116.10
Shandong Fukuan Biological Engineering Co. ,
Purchase of goods 679,424.79 489,983.19
Ltd.
Shanghai Shounong Investment Holding Co. ,
Purchase of goods 174,185,557.44
Ltd.
Chengde Sanyuan Jinxing Duck Industry Co. ,
Purchase of goods 900.00
Ltd.
Beijing North Water Food Industry Co. , Ltd. Purchase of goods 11,990.50
Beijing Ershang Jinghua Tea Industry Co. , Ltd. Purchaseof goods 10,395.00
Beijing First Agricultural Flavor Group Co. , Ltd Purchaseof goods 22,074.11
Beijing Sanyuan Meiyuan Food Co. , Ltd. Purchase of goods 66,477.60
Yu Nong High Quality Agricultural Products Co. ,
Purchase of goods 2,850.00
Ltd. . Huairou District Branch
Total 183,743,485.11 8,735,137.55
(2) Sale of goods/ provision of labor services
Related-part
Last Term
Related Party y Current Amount
Amount
Transaction
Sale of
Beijing Alai Faxi Food Co. , Ltd. goods
83,096.00 21,240.00
Sale of
Beijing Baijiayi Food Co. , Ltd. goods
2,028,592.00 588,600.00
Beijing North Beijing Sugar Foreign Wine Sales Co. , Sale of
15,851.00 25,597.00
Ltd. goods
Sale of
Beijing Ershang Dahongmen Wulian Food Co. , Ltd goods
10,807.00
Sale of
Beijing Ershang Jinghua Tea Industry Co. , Ltd. goods
706.42
Sale of
Beijing Ershang Meat Food Group Co. , Ltd goods
24,000.00 23,400.00
Sale of
Beijing Guchuan Rice Industry Co. , Ltd goods
77,187.02 154,817.50
Sale of
Beijing Guchuan Food Co. , Ltd goods
184,647.44 1,083,679.52
Beijing Jingliang Dongfang grain and Oil Trading Sale of
1,578,881.67 2,807,978.31
Co. , Ltd goods
Sale of
Beijing Jingliang Biotechnology Group Co. , Ltd goods
660.55
Sale of
Beijing Jingliangtaiyu Real Estate Co. , Ltd goods
111,600.00
Sale of
Beijing Jingdingsheng Sugar Trading Co. , Ltd goods
6,927.00
Sale of
Beijing luanfeng Vegetable Distribution Co. , Ltd goods
286,494.00 448,590.00
Sale of
Beijing Liubiju Huairou District BreweryCo., Ltd goods
6,684,323.12 3,159,049.53
Beijing Nanjiao Agricultural Production Management Sale of
18,470.00
Co. , Ltd. goods
Sale of
Beijing Sanjiadian Grain Storage Co. , Ltd goods
99,456.00
Sale of
Beijing Sanyuan Food Co. , Ltd goods
151,170.00 107,695.00
Beijing Sanyuan Seed Industry Science and Sale of
29,995,064.69 26,720,100.70
Technology Co. , Ltd. . Feed branch goods
Sale of
Beijing Beijiao Farm Co. , Ltd goods
3,080.00 5,818.00
Beijing Haidian District Xijiao Grain and Oil Supply Sale of
1,738,000.00 2,820,200.00
Station Co. , Ltd goods
Beijing Kyoto Kanaya Grain Purchasing and Sale of
655,540.00
Marketing Co. , Ltd. goods
Sale of
Beijing Academy of Grain Science Co. , Ltd goods
1,700.00 830.00
Beijing Longqing Xiadu Military Food Supply Co. , Sale of
284,000.00 458,000.00
Ltd goods
Beijing Food Supply Office No. 34 Supply Sale of
1,488,023.46 1,007,533.90
Department Co. , Ltd goods
Sale of
Beijing Yanqing District Farm Co. , Ltd goods
3,000.00 14,998.35
Sale of
Beijing Zhangxin Grain Reserve Co. , Ltd goods
1,356,413.11
Sale of
Beijing Changyang Farm Co. , Ltd goods
148,928.65
Sale of
Beijing Shoucheng Landscape Property Co. , Ltd goods
45,720.00 114,935.00
Beijing first agricultural point to Network Sale of
126,210.49 250,655.29
e-commerce Co. , Ltd goods
Sale of
Beijing First Agricultural Development Co. , Ltd goods
30,838.00 12,739.00
Beijing Shounong Commercial Chain Co. , Ltd. . Sale of
81,163.00 29.55
Yanqing District Branch goods
Sale of
Beijing Shounong Food Group Co. , Ltd goods
38,354.49 27,269.73
Beijing shounong Xiangshan Convention Center Co. , Sale of
42,750.00 7,560.00
Ltd goods
Beijing Shounong Consumer Support Shuangchuang Sale of
5,309,640.00 6,262,107.00
Center Co. , Ltd goods
Beijing Shuangtong Huihe Agricultural Science and Sale of
31,225.00
Technology Development Co. , Ltd goods
Sale of
Beijing Momoyama Grain Reserve Co. , Ltd goods
15,484.00 13,073.39
Sale of
Beijing First Agricultural Flavor Group Co. , Ltd goods
15,469,952.89 31,138,627.74
Beijing Wuhuan Shuntong Supply Chain Sale of
570,548.64 2,393,912.53
Management Co. , Ltd goods
Sale of
Beijing Xing Fashion Trading Co. , Ltd goods
13,073.39 9,357.80
Sale of
Hebei Anping Dahongmen Food Co. , Ltd goods
621,651.37
Sale of
Hebei Luanping Huadu Food Co. , Ltd. goods
21,221,360.94 8,703,134.00
Sale of
Hebei Sanyuan Food Co. , Ltd goods
994,300.00
Hebei Shounong Modern Agricultural Technology Sale of
7,153,219.41 10,909,242.63
Co. , Ltd goods
Sale of
Shanghai Shounong Investment Holding Co. , Ltd goods
216,123,328.83 101,524,844.91
Sale of
Tianjin Xincheng Kangda Pharmaceutical Co. , Ltd goods
610.00
Sale of
Beijing Ershang Xijie Food Co. , Ltd goods
1,701,284.40
Sale of
Beijing Ershang Jardine Sunshine Property Co. , Ltd goods
49,620.00
Beijing Hongyuan Li military food and Oil Supply Sale of
221,000.00
Co. , Ltd goods
Sale of
Beijing Jingliang Logistics Co. , Ltd goods
92,140.00
Beijing Jingliang Canal Grain and Oil Trading Co. , Sale of
38,502.00
Ltd goods
Sale of
Beijing Longmen Vinegar Industry Co. , Ltd. goods
201.83
Sale of
Beijing Desheng Hotel Co. , Ltd goods
73,930.00
Sale of
Beijing Zi di Bing Grain and Oil Supply Co. , Ltd. goods
1,952,000.00
Sale of
Beijing Zhujun Grain and Oil Supply Co. , Ltd goods
1,893,933.20
Beijing Xinderun Agricultural Tourism Development Sale of
59,659.36
Co. , Ltd goods
Beijing Yunong high-quality Agricultural Products Sale of
59,975.70
Co. , Ltd. . Daxing branch goods
Yu Nong High Quality Agricultural Products Co. , Sale of
171,074.00
Ltd. . Huairou District Branch goods
Beijing Shounong Oriental Food Supply Chain Sale of
1,038,926.00
Management Group Co. , Ltd goods
Provision of
Shanghai Shounong Investment Holding Co. , Ltd services
4,677,494.81 671,924.51
Provision of
Beijing Capital Agricultural Food Group Co., Ltd. services
11,438,400.93
Total 331,041,945.32 208,839,787.38
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 lessee,
Lease Expense Lease Expense
Type of Leased Pricing basis of
Name of Lessee Recognized in the Recognized in the
Asset rleasing fee
Current Period Prior Period
Lease Expense Lease Expense
Type of Leased Pricing basis of
Name of Lessee Recognized in the Recognized in the
Asset rleasing fee
Current Period Prior Period
Beijing First Agricultural
House leasing Market price 1,774,606.64
Development Co. , Ltd.
Beijing Dahongmen Grain
House leasing Market price 311,324.36 327,298.99
Storage Co. , Ltd.
Beijing shounong Food
Emergency Support Center House leasing Market price 1,312,500.00 1,147,575.39
Co. , Ltd
Beijing Nanyuan
Vegetable Oil Factory House leasing Market price 323,809.52
Co. , Ltd
Total 1,947,633.88 3,249,481.02
C.Other relative transaction
Nature of related party Current Last Term
Related parties
transcations Amount Amount
Electricity and telephone
Beijing Grain Group Co. , Ltd. 2,768.48
charges
Beijing Dahongmen Grain Storage Co. , Electricity, cleaning, Internet
38,018.00 35,177.08
Ltd. usage
Beijing Haidian District Second
Commercial Vocational Skills Training Training fees 1,650.00
School
Electricity and telephone
Beijing Shounong Development Co., Ltd. 1,237.69 5,755.81
charges
Beijing shounong Food Emergency Electricity charges, pound
63,518.42 104,497.20
Support Center Co. , Ltd. charges
Beijing shounong Xiangshan Convention
Training Fee, conference fee 4,433.97
Center Co. , Ltd.
Subtotal 111,626.56 145,430.09
D.Remuneration for key management staff
Current Amount (Unit: ten Last Term Amount (Unit: ten
Item
thousand yuan) thousand yuan)
Remuneration for Key Management Staff 223.83 122.27
7. Related-party Receivables and Payables
(1) Receivables
Ending Balance Beginning Balance
Provision Provision
Item Related-party
Book Balance for Bad Book Balance for Bad
Debts Debts
Monetary Beijing shounong Food
978,765,297.11 339,487,166.55
funds Group Finance Co., Ltd
Total 978,765,297.11 339,487,166.55
Shanghai Shounong
Receivables Investment Holding Co. , 19,432,675.33
Ltd
Hebei Luanping Huadu
3,565,820.80 3,548,214.00
Food Co. , Ltd
Beijing Sanyuan Seed
Industry Science and
3,288,386.72 2,056,939.44
Technology Co. , Ltd. .
Feed branch
Beijing Shounong
Consumer Support
1,986,690.00 1,737,500.00
Shuangchuang Center
Co. , Ltd
Hebei Shounong Modern
Agricultural Technology 1,294,453.94
Co. , Ltd
Hebei Anping
Dahongmen Food Co. , 483,200.00
Ltd
Beijing Zhangxin Grain
481,320.00 665,000.00
Reserve Co. , Ltd
Beijing Jingliang
Dongfang grain and Oil 344,135.00 1,198,484.00
Trading Co. , Ltd
Beijing Food Supply
Office No. 34 Supply 309,996.00 279,035.00
Department Co. , Ltd
Beijing Baijiayi Food
179,400.00 180,695.00
Co. , Ltd
Beijing Sanyuan Food
127,200.00
Co. , Ltd
Beijing Longqing Xiadu
Military Food Supply 84,000.00
Co. , Ltd
Beijing luanfeng
Vegetable Distribution 53,600.00 84,200.00
Co. , Ltd
Beijing First Agricultural
38,663.00
Development Co. , Ltd
Beijing Wuhuan
Shuntong Supply Chain 18,245.50
Management Co. , Ltd
Beijing Shoucheng
Landscape Property Co. , 17,610.00 33,355.00
Ltd
Huairou District Brewery 13,080.00
Beijing Alai Faxi Food
10,265.00
Co. , Ltd
Beijing Nanjiao
Agricultural Production 3,270.00
Management Co. , Ltd
Beijing North Beijing
Sugar Foreign Wine 2,618.00
Sales Co. , Ltd
Beijing Jingdingsheng
380.00
Sugar Trading Co. , Ltd
Beijing Guchuan Rice
285.00
Industry Co. , Ltd
Beijing Guchuan Food
82,800.00
Co. , Ltd
Beijing Haidian District
Xijiao Grain and Oil 82,500.00
Supply Station Co. , Ltd
Beijing first agricultural
point to Network 95,120.40
e-commerce Co. , Ltd
Hebei Sanyuan Food
1,685,000.00
Co. , Ltd
Beijing Yunong
high-quality Agricultural 3,120.00
Products Co. , Ltd
Total 31,735,294.29 11,731,962.84
Shanghai Shounong
Prepaid
Expenses Investment Holding Co. , 379,840,707.34
Ltd
Beijing Academy of
16,400,000.00
Grain Science Co. , Ltd
Beijing Huadu Liquor
13,200.00
Marketing Co. , Ltd
Beijing Wang Zhihe
96.00
Food Co. , Ltd
Total 396,254,003.34
Other Beijing Dahongmen 55,232.00 55,232.00
receivebles Grain Storage Co. , Ltd
Beijing Guchuan Rice 50,000.00 50,000.00
Industry Co. , Ltd
Total 105,232.00 105,232.00
(2) Payables
Item Related-party Ending Balance Beginning balance
Shanghai Shounong Investment
Contract liability 3,614,532.86 3,448,410.37
Holding Co. , Ltd
Beijing Shoucheng Landscape
29,350.00
Property Co. , Ltd
Beijing First Agricultural
21,500.00
Development Co. , Ltd.
Beijing Jingliang Dongfang grain
15,088.20 15,088.20
and Oil Trading Co. , Ltd
Beijing Wuhuan Shuntong Supply
3,192.54 3,192.54
Chain Management Co. , Ltd
Beijing Liubiju Food Co. , Ltd 59,300.00
Beijing Shounong Commercial
293.20
Chain Co. , Ltd
Total 3,683,663.60 3,526,284.31
Beijing shounong Food Emergency
Payables 1,312,500.00
Support Center Co. , Ltd
Beijing Guchuan Food Co. , Ltd 244,537.59 240,000.00
Beijing Guchuan Rice Industry
21,284.40
Co. , Ltd
Beijing Sanyuan Food Co. , Ltd 18,134.16 50.48
Beijing Jingliang Dongfang grain
10,012.00
and Oil Trading Co. , Ltd
Beijing Liubiju Food Co. , Ltd 5,789.39
Beijing Huayu Food Co. , Ltd 546.00
Beijing Heiliu Animal Husbandry
397.20
Technology Co. , Ltd
Beijing Heiliu Animal Husbandry
372.00 2,826.00
Technology Co. , Ltd
Beijing Alai Faxi Food Co. , Ltd 309.73
Beijing Ershang Dahongmen
96.79 19,115.04
Wulian Food Co. , Ltd
Beijing Wang Zhihe Food Co. , Ltd 84.96
Beijing Nanjiao Agricultural
75.00
Production Management Co. , Ltd
Beijing century Li Yuan Ecological
110.00
Agriculture Co. , Ltd
Total 1,614,139.22 262,101.52
Other payables Beijing Grain Group Co. , Ltd 3,442,750.30 2,862,750.30
Beijing Guchuan Food Co. , Ltd 751,045.33
Hebei Sanyuan Food Co. , Ltd 140,000.00 140,000.00
Beijing Jingliang Electronic
67,891.20 67,891.21
Commerce Co. , Ltd
Total 6,015,826.05 3,332,743.03
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
By the end of the reporting period, the amount of guarantee of the company and its holding subsidiary
had been approved was 5.788 billion yuan, and the actual amount of guarantee of the company and its
holding subsidiaries was 1.185 billion yuan, accounting for the company's recent audit of the proportion of
the net assets belonging to the parent company is 37.79% , are between the company and the holding
subsidiary of the guarantee. There is no guarantee provided by the company and its holding subsidiary to
the entity outside the consolidated statement. There is no guarantee for the company beyond the time limit,
the guarantee involving litigation and the loss due to the judgment of losing litigation.
XIV. Events after the Balance Sheet Date
1. Distribution of Profits
As of the date of this financial report, the company has no important non adjustment matters that need
to be disclosed.
XV. Other Important Matters
1. Annuity Plan
Basic information of annuity: Beijing Jingliang Food Co., Ltd., Beijing Guchuan Oil Co., Ltd.,
Beijing Essen Lubao Oil Co., Ltd., Beijing Jingliang Oil Co., Ltd., Beijing Guchuan bread and Food Co.,
Ltd., Jingliang (Tianjin) grain and oil industry Co., Ltd. and Beijing tianweikang Oil Distribution Center
Co., Ltd. participated in the enterprise annuity scheme of Beijing shounong Food Group Co., Ltd, To
formulate the detailed rules for the implementation of their respective enterprises under the annuity scheme.
The name of the annuity plan is Ping An Jinxiu life enterprise annuity plan; Both the trustee and the
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
According to the internal organization structure, operation demands and internal reporting system of
the company, the Company's business scopes 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
Offset Among
Item Food Processing Oil & Grease Other Total
Dvisions
Operating
492,060,119.06 6,651,725,370.87 -2,320,551,281.75 4,823,234,208.18
income
Operating
370,305,726.97 6,573,919,795.87 -2,313,255,053.70 4,630,970,469.14
costs
Operating profit 61,990,033.62 91,617,449.38 -39,688,498.92 113,918,984.08
Net profit
attributable to 47,234,242.53 75,941,743.99 -49,594,191.16 73,581,795.36
parent company
Total assets 1,125,252,721.72 12,119,578,000.48 -6,304,313,276.41 6,940,517,445.79
Total liabilities 129,791,795.46 5,649,302,979.78 -2,386,794,310.44 3,392,300,464.80
3. Lease
The lessee shall disclose the following information in relation with the lease.
Item Amount
Interest expense on lease liability 32,165.52
Short-term lease payments charged to current profit or
2,803,833.88
loss
Lease costs for low-value assets recognized in current
profit or loss
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 1,512,001.62
Gains and losses related to sale and leaseback
transactions
XVI. Notes to Main Financial Statement Items of Parent Company
A.Other receivables
1. Classification of General table
Item Ending balance Beginning balance
Interest receivable
Dividends receivable 150,000,000.00
Other receivables 360,000,115.58 199,000,000.00
Total 360,000,115.58 349,000,000.00
2. Other receivables
（1）Disclosed according to aging
Aging Ending Balance
Within 1 Year (including 1 year) 360,000,115.58
Among them: Within credit period (within 3 months) 161,000,115.58
Credit period to 1 year 199,000,000.00
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
Sub-total 360,000,115.58
Less: Allowance for bad debts
Total 360,000,115.58
(2) Classification of other receivables by nature of funds
Nature of Funds Book Balance at End of Period Book Balance at Beginning of Year
Intercourse Funds of Units 360,000,115.58 199,000,000.00
Reserve fund
Total 360,000,115.58 199,000,000.00
(3) Other receivables according to top five of balance at end of period collected by debtors
Proportion in overall Ending balance
Name of Nature of Balance at End of
Aging ending balance of of bad debt
Organization Funds Period
other receivables (%) reserves
Beijing Jingliang Related party Within 1 year,1
360,000,000.00 99.99
Food Co., Ltd borrowing to 2 years
Total 360,000,000.00
B. Long-term Equity Investment
Ending Balance Beginning Balance
Item Provision for Provision for
Book Balance Book Value Book Balance Book Value
Impairment Impairment
Investment
in 2,619,157,283.19 2,619,157,283.19 2,619,157,283.19 2,619,157,283.19
subsidiaries
Total 2,619,157,283.19 2,619,157,283.19 2,619,157,283.19 2,619,157,283.19
1.Investment in subsidiaries
Current Ending
Beginning Current Current Provision Balance of
Invested Entity Ending Balance
Balance Increase Decrease for Provision for
Impairment Impairment
Beijing Jingliang
2,336,639,964.05 2,336,639,964.05
Food Co., Ltd.
Zhejiang little
prince Food Co., 249,017,319.14 249,017,319.14
Ltd
Jingliang
(Caofeidian)
Agricultural 25,500,000.00 25,500,000.00
Development Co.,
Ltd.
Jingliang (Beijing)
Food Marketing
8,000,000.00 8,000,000.00
Management Co.,
Ltd
Total 2,619,157,283.19 2,619,157,283.19
C.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 11,839,311.03 170,581.26 382,744.96 170,581.26
Total 11,839,311.03 170,581.26 382,744.96 170,581.26
D. Income from investment
Sources of investment income Current Amount Last Term Amount
Long term equity investment income calculated by cost method 150,814.85
Total 150,814.85
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 Amount Note
(1) Gains and losses on disposal of non current assets -2,209.46
(2) Government subsidies included in the current profits and losses
(closely related to the business of the enterprise, except the government
subsidies enjoyed according to the national unified standard quota or 2,076,110.00
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 and derivative financial liabilities, as well as the 169,707.51
investment income from the disposal of trading financial assets, derivative
financial assets, trading financial liabilities, derivative financial liabilities
and other debt investments
(4) Custodial fee income from entrusted operations 11,438,400.93
(5) Other non-operating income and expenses other than the above 3,375,520.92
(6) Other profit and loss items that meet the definition of non recurring
profit and loss
Total non recurring profit and loss 17,057,529.90
Less: amount affected by income tax 1,396,591.07
Non recurring profit and loss after deducting the influence of income
tax 15,660,938.83
Including: non recurring profit and loss attributable to the owner of the
parent company 15,486,119.75
Non recurring profit and loss attributable to minority
shareholders 174,819.08
(2)Return on equity and earnings per share
Weighted Return on Average Equity EPS
Current Profit
(ROAE) (%) Basic EPS Diluted EPS
Net profit attributable to the
Company's common 2.37 0.10 0.10
shareholders
Net profit attributable to
common shareholders after
deduction of non-recurring 1.88 0.08 0.08
gains and losses
Hainan Jingliang Holdings Co., Ltd.
August 25th, 2023
