HAINAN JINGLIANG
HOLDINGS CO., LTD.
SEMI-ANNUAL REPORT
2022
August, 2022
HAINAN JINGLIANG HOLDINGS CO., LTD.
SEMI-ANNUAL REPORT 2022
This Summary has been prepared in both Chinese and English. Should there be any discrepancies or
misunderstandings between the two versions, the Chinese version shall prevail.
Part I Financial Report
Independent auditor’s modified opinion:
□ Applicable Not applicable
2022 Semi-Annual Financial Report is not audited by Independent auditor.
Part I I Financial Statement
The unit of financial statements in the financial notes is: Yuan
Editor: Hainan Jingliang Holdings Co., Ltd
Hainan Jingliang Holdings Co., Ltd. Semi-Annual Report 2022
Hainan Jingliang Holdings Co., Ltd. Semi-Annual Report 2022
Hainan Jingliang Holdings Co., Ltd. Semi-Annual Report 2022
Statement of Comprehensive Income
Prepared by: Hainan Jingliang Holdings Co., Ltd. Semi-annual of 2022 Monetary Unit: RMB Yuan
Items Amount for the current period Amount for the prior period
I. Total operating income 382,744.96 295,530.28
Including: operating income 382,744.96 295,530.28
△Interest income
△Earned premium
△Fee and commission income
II. Total operating cost -500,690.01 3,096,153.08
Including: operating cost 170,581.26 170,581.26
△Interest expenses
△Fee and commission expenses
△Surrenders
△Net claims paid
△Net appropriation for insurance contracts reserves
△Dividend expenses for policyholders
△Reinsurance expenditures
Tax and surcharges 201,808.38 98,713.86
Selling expenses
Administration expenses 2,692,234.13 2,825,749.10
Research and development expenses
Financial expenses -3,565,313.78 1,108.86
Including: interest expenses
Interest income 3,566,419.69 1,190.61
Add: Other income 12,794.10 37,431.93
Income from investment (Losses shall be filled in with “-”) -28,691.03
Including: income from investment on joint venture and cooperative enterprise
Income from derecognition of financial assets measured at amortized cost (Losses shall
be filled in with “-”)
△Income from exchange(Losses shall be filled in with “-”) - -
Income from net exposure hedging(Losses shall be filled in with “-”)
Income from changes in fair value (Losses shall be filled in with “-”)
Credit impairment loss(Losses shall be filled in with “-”) -600.00
Income from assets impairment(Losses shall be filled in with “-”) -
Income from asset disposal (Losses shall be filled in with “-”) -31,898.67
III. Total profit (Total losses shall be filled in with “-”) 895,629.07 -2,823,780.57
Add: non-operating income
Less: non-operating expenditure
IV. Total profit (Total losses shall be filled in with “-”) 895,629.07 -2,823,780.57
Less: income tax expense
V. Net profit (Net loss shall be filled in with “-”) 895,629.07 -2,823,780.57
(I) Net profit from continuing operations (Net loss shall be filled in with “-”) 895,629.07 -2,823,780.57
(II) Net profit from discontinuing operations (Net loss shall be filled in with “-”)
VI. Net of tax from other comprehensive income
(I) Other comprehensive income that cannot be reclassified into the profit and loss
（1）Other comprehensive income that cannot be reclassified into the profit and loss
（2）Other comprehensive income that cannot be transferred to gains and losses
under the equity method
（3）Changes in fair value of other equity instrument investments
（4）Changes in the fair value of the company's own credit risk
(II) Other comprehensive income that will be reclassified into the profit and loss - -
（1）Other comprehensive income that can be transferred to gains and losses under
- -
the equity method
（2）Changes in fair value of other debt investments
（3）Reclassification of financial assets included in other comprehensive income
（4）Provision for credit impairment of other debt investments
（5）Cash flow hedge reserve - -
（6）Balance arising from the translation of foreign currency - -
（7）Other
VII. Total comprehensive income 895,629.07 -2,823,780.57
VIII. Earnings per share
(I) Basic earnings per share
(II) Diluted earnings per share
Consolidated Statement of Changes in Equity
Pr epar ed by: Hainan Jingliang Holdings Co., Ltd. Semi-annual of 2022 Monetar y Unit: RMB Yuan
Current Amount
Shareholder' s Equity attributable to the Parent Company
Items Total shareholders'
Other equity instruments Other Minority equity
Less: treasury △ General risk equities
Capital stock Capital reserve comprehensive Special reserve Surplus reserve Undistributed profit Others Subtotal
Perpetual bond Others
Preferred stock stock reserve
income
I. Year-end balance of last year 726,950,251.00 1,675,918,350.95 -682,282.22 122,122,436.98 391,493,534.34 - 2,915,802,291.05 396,351,501.50 3,312,153,792.55
Add: changes in accounting policies - - -
Correction of prior period errors - - -
Merger of enterprises under the same control - -
Other - - -
II. Balance at beginning of current year 726,950,251.00 - - - 1,675,918,350.95 - -682,282.22 - 122,122,436.98 - 391,493,534.34 - 2,915,802,291.05 396,351,501.50 3,312,153,792.55
III. Increases and decreases of current year
- - - - - - 671,532.18 - - - 72,908,330.15 - 73,579,862.33 12,284,061.54 85,863,923.87
(Decrease shall be filled in with “-”)
(I) Total comprehensive income 671,532.18 72,908,330.15 73,579,862.33 12,284,061.54 85,863,923.87
(II) Investment of shareholders and capital
- - - - - - - - - - - - - -
reduction
1. Common equity invested by shareholders - -
2. Capital invested by other equity instruments
- -
holders
3. The amount of shares recorded into the
- -
shareholder's equity
4. Others - -
(III) Distribution of profits - - - - - - - - - - - - - -
1. Withdrawal of surplus reserves - -
2. Withdrawal of general risk reserve - -
3. Distribution to shareholders - -
4. Others - -
(IV) Inner carrying-over of shareholders'
- - - - - - - - - - - - - - -
equities
1. Capital reserve converted into capital (or capital
- -
stock)
2. Surplus public accumulation converted into
- -
capital (or capital stock)
3. Surplus public accumulation loss remedy - -
4. Change in defined benefit plan carried forward
- -
to retained earnings
5.Other comprehensive income carried forward to
- -
retained earnings
6. Others - -
(V) Special reserve - - - - - - - - - - - - - - -
1. Withdrawal for current period - -
2. Use for current period - -
(VI) Others - -
IV. Closing balance of current year 726,950,251.00 - - - 1,675,918,350.95 - -10,750.04 - 122,122,436.98 - 464,401,864.49 - 2,989,382,153.38 408,635,563.04 3,398,017,716.42
Consolidated Statement of Changes in Equity (Continued)
Pr epar ed by: Hainan Jingliang Holdings Co., Ltd. Semi-annual of 2022 Monetar y Unit: RMB Yuan
Amount of Last Period
Shareholder' s Equity attributable to the Parent Company
Items Total shareholders'
Other equity instruments Other Minority equity
Less: treasury △ General risk equities
Capital stock Capital reserve comprehensive Special reserve Surplus reserve Undistributed profit Others Subtotal
Preferred stock bondOthers stock reserve
income
I. Year-end balance of last year 726,950,251.00 1,674,828,350.95 -363,258.66 122,122,436.98 187,033,763.26 - 2,710,571,543.53 388,601,959.83 3,099,173,503.36
Add: changes in accounting policies - -
Correction of prior period errors - -
Merger of enterprises under the same control - -
Other - -
II. Balance at beginning of current year 726,950,251.00 - - - 1,674,828,350.95 - -363,258.66 - 122,122,436.98 - 187,033,763.26 - 2,710,571,543.53 388,601,959.83 3,099,173,503.36
III. Increases and decreases of current year
-80,447.42 - 88,328,197.91 88,247,750.49 10,110,607.82 98,358,358.31
(Decrease shall be filled in with “-”)
(I) Total comprehensive income -80,447.42 88,328,197.91 88,247,750.49 10,110,607.82 98,358,358.31
(II) Investment of shareholders and capital
- - - - - - - - -
reduction
1. Common equity invested by shareholders - -
2. Capital invested by other equity instruments
- -
holders
3. The amount of shares recorded into the
- -
shareholder's equity
4. Others -
(III) Distribution of profits - - - - - - - - - - - - -
1. Withdrawal of surplus reserves - -
2. Withdrawal of general risk reserve - -
3. Distribution to shareholders - -
4. Others - -
(IV) Inner carrying-over of shareholders'
- - - - - - - - - - - - - - -
equities
1. Capital reserve converted into capital (or capital
- -
stock)
2. Surplus public accumulation converted into
- -
capital (or capital stock)
3. Surplus public accumulation loss remedy - -
4. Change in defined benefit plan carried forward
- -
to retained earnings
5.Other comprehensive income carried forward to
- -
retained earnings
6. Others - -
(V) Special reserve - - - - - - - - - - - - - - -
1. Withdrawal for current period - -
2. Use for current period - -
(VI) Others - -
IV. Closing balance of current year 726,950,251.00 - - - 1,674,828,350.95 - -443,706.08 - 122,122,436.98 - 275,361,961.17 - 2,798,819,294.02 398,712,567.65 3,197,531,861.67
Statement of Changes in Equity
Prepared by: Hainan J ingliang Holdings Co., Ltd. Semi-annual of 2022 Monetary Unit: RMB Yuan
Current Amount
Other equity instruments
Items Other
Less: treasury △ General risk Total shareholders'
Capital stock Capital reserve comprehensive Special reserve Surplus reserve Undistributed profit
Preferred Perpetual stock reserve equities
Others income
stock bond
I. Year-end balance of last year 726,950,251.00 2,380,234,900.84 - - - 109,487,064.39 - -408,809,468.50 2,807,862,747.73
Add: changes in accounting policies - - - - - -
Correction of prior period errors - - - - - -
Other - - - - -
II. Balance at beginning of current year 726,950,251.00 - - - 2,380,234,900.84 - - - 109,487,064.39 - -408,809,468.50 2,807,862,747.73
III. Increases and decreases of current year
- - - - - - - - - - 895,629.07 895,629.07
(Decrease shall be filled in with “-”)
(I) Total comprehensive income - - - - 895,629.07 895,629.07
(II) Investment of shareholders and capital reduction - - - -
1. Common equity invested by shareholders - - - - - - - - - - -
2. Capital invested by other equity instruments holders - - - - -
3. The amount of shares recorded into the shareholder's
- - - - -
equity
4. Others - - - - -
(III) Distribution of profits - - - - -
1. Withdrawal of surplus reserves - - - - - - - - - - - -
2. Withdrawal of general risk reserve - - - - -
3. Distribution to shareholders - - - - -
4. Others - - - - -
(IV) Inner carrying-over of shareholders' equities - - - - -
1. Capital reserve converted into capital (or capital
- - - - - - - - - - - -
stock)
2. Surplus public accumulation converted into capital (or
- - - - -
capital stock)
3. Surplus public accumulation loss remedy - - - - -
4. Change in defined benefit plan carried forward to
- - - - -
retained earnings
5.Other comprehensive income carried forward to
-
retained earnings
6. Others - - - - -
(V) Withdrawal and use of Special reserve - - - - -
1. Withdrawal for current period - - - - - - - - - - - -
2. Use for current period - - - - -
(VI) Others -
IV. Closing balance of current year 726,950,251.00 - - - 2,380,234,900.84 - - - 109,487,064.39 - -407,913,839.43 2,808,758,376.80
Statement of Changes in Equity (Continued)
Prepared by: Hainan J ingliang Holdings Co., Ltd. Semi-annual of 2022 Monetary Unit: RMB Yuan
Amount of Last Period
Other equity instruments
Items Other
Less: treasury Special △ General risk Total shareholders'
Capital stock Capital reserve comprehensive Surplus reserve Undistributed profit
Preferred Perpetual stock reserve reserve equities
Others income
stock bond
I. Year-end balance of last year 726,950,251.00 2,379,144,900.84 109,487,064.39 - -862,106,544.32 2,353,475,671.91
Add: changes in accounting policies - -
Correction of prior period errors - -
Other - -
II. Balance at beginning of current year 726,950,251.00 - - - 2,379,144,900.84 - - - 109,487,064.39 - -862,106,544.32 2,353,475,671.91
III. Increases and decreases of current year
- - - -2,823,780.57 -2,823,780.57
(Decrease shall be filled in with “-”)
(I) Total comprehensive income - -2,823,780.57 -2,823,780.57
(II) Investment of shareholders and capital reduction -
1. Common equity invested by shareholders - - - - - - -
2. Capital invested by other equity instruments holders - -
3. The amount of shares recorded into the shareholder's
- -
equity
4. Others - -
(III) Distribution of profits -
1. Withdrawal of surplus reserves - - - - - - - - - - -
2. Withdrawal of general risk reserve - -
3. Distribution to shareholders - -
4. Others - -
(IV) Inner carrying-over of shareholders' equities - -
1. Capital reserve converted into capital (or capital
- - - - - - - - - - - -
stock)
2. Surplus public accumulation converted into capital (or
- -
capital stock)
3. Surplus public accumulation loss remedy - -
4. Change in defined benefit plan carried forward to
- -
retained earnings
5.Other comprehensive income carried forward to
-
retained earnings
6. Others - -
(V) Withdrawal and use of Special reserve - -
1. Withdrawal for current period - - - - - - - - - - - -
2. Use for current period - -
(VI) Others -
IV. Closing balance of current year 726,950,251.00 - - - 2,379,144,900.84 - - - 109,487,064.39 - -864,930,324.89 2,350,651,891.34
Hainan Jingliang Holdings Co., Ltd.
Notes to the Semi-Annual of 2022 Financial Statements
(Unless otherwise stated, the amount unit is RMB Yuan)
I. Basic Information of the Company
1. Place of incorporation, form of organization and head office address
Hainan Jingliang Holdings Co., Ltd. (hereinafter referred to as "the Company" or "Company" or
"Jingliang Holdings") is established in accordance with the Hainan Provincial People's Government General
Office QFBH (1992) No.1, approved by QY (1992) SGZ No. 6 Document of the People's Bank of Hainan
Province and re-registered by Hainan Pearl River Enterprise Company on January 11, 1992. The Company
issued 81,880,000 shares in total upon re-registration, of which 60,793,600 shares were converted from the
net assets of the original company and 21,086,400 shares were newly issued. And the name of the Company
is Hainan Pearl River Enterprise Co., Ltd. The business license registration number of the joint-stock
company is 20128455-6, and the holding parent company Guangzhou Pearl River Enterprise Group holds
36,393,600 shares, accounting for 44.45%. Approved by ZGB (1992) No. 83 Document of the People's Bank
of China in December 1992, the additional 21,086,400 shares were listed on the Shenzhen Stock Exchange
for trading. The industry involved is real estate.
On March 25, 1993, in response to QGBH (1993) No.028 of Hainan Provincial Leading Group Office
and SRYFZ (1993) No.099 of Shenzhen Special Economic Zone Branch of the People's Bank of China, the
Company increased its share capital by converting the original share capital into 139,196,000 shares
(according to distribution of 10, delivery of 5 and transfer of 2), with the controlling shareholder Guangzhou
Pearl River Enterprises Group holding 48,969,120 shares accounting for 35.18% at the end of 1993.
In 1994, the share capital was increased by 10 to 10, and the total share capital was 278,392,000 shares
after the increase. The controlling shareholder, Guangzhou Pearl River Enterprises Group, holds 97,938,240
shares, accounting for 35.18%.
In 1995, the issuance of 50,000,000 B Shares was approved by SZBF (1995) No.45 and SZBF (1995)
No.12. The share capital of the Company was increased by 10:1.5 on the basis of the share capital after the
additional B shares were issued, and the share capital of the Company after the increase was 377,650,800
shares. The holding parent company, Guangzhou Pearl River Enterprises Group, held 112,628,976 shares,
accounting for 29.82% of the total.
In 1999, Guangzhou Pearl River Enterprises Group transferred all 112,628,976 shares to Beijing Wanfa
Real Estate Development Co., Ltd.. After the transfer of shares was completed in June 1999, Beijing Wanfa
Real Estate Development Co., Ltd. held 112,628,976 shares of the Company, accounting for 29.82% of the
total shares of the Company, and became the controlling shareholder of the Company.
On January 10, 2000, the name of the Company was changed to Hainan Pearl River Holding Co., Ltd.
and the Business License for Enterprise Legal Person was renewed by Industrial & Commerce
Administration Bureau of Hainan Province.
On August 17, 2006, the reform plan of the split share structure of the Company was implemented. The
Company transferred 49,094,604 shares of capital stock to all shareholders at the ratio of 10 to 1.3. The
original non-tradable shareholders transferred the increased shares to the tradable A-share holders. Beijing
Wanfa Real Estate Development Co., Ltd. reimbursed the consideration shares of the non-tradable
shareholders who have not expressly expressed their opinions. The converted total share capital was
426,745,404 shares, and the original controlling shareholder Beijing Wanfa Real Estate Development Co.,
Ltd. held 107,993,698 shares, accounting for 25.31%. Shareholders of non-tradable shares repaid 3,289,780
shares in consideration of the split share structure in 2007. Shareholders of non-tradable shares repaid
1,196,000 shares in consideration of the split share structure in 2009.
On 2 September 2016, Beijing Wanfa Real Estate Development Co., Ltd., the original controlling
shareholder, transferred all of its 112,479,478 shares to Beijing Grain Group Co., Ltd. (hereinafter referred
to as "Beijing Grain Group"). Upon completion of the share transfer in September 2016, Beijing Grain Group
Co., Ltd. held 112,479,478 shares, accounting for 26.36% of the total shares of the Company. In November
2016, based on the confidence in the subject matter of the material asset restructuring and the future
development of the Company, Beijing Grain Group Co., Ltd. decided to increase its shareholding through
centralized bidding in the secondary market. After the increase, it held 123,561,963 shares of the Company,
accounting for 28.95% of the total number of shares, and became the largest shareholder of the Company.
The Company determined July 31, 2017 as the delivery date of material assets in accordance with the
material assets restructuring plan and the delivery agreement. On September 14, 2017, approved pursuant
to the resolution of the Second Extraordinary General Meeting of Shareholders of the Company on
November 18, 2016 and the Approval Reply of the China Securities Regulatory Commission dated July 28,
2017 On Approval of Hainan Pearl River Holding Co., Ltd. to Purchase Assets and Raise Supporting Funds
from Beijing Grain Group Co., Ltd. (ZJXK (2017) No.1391): 1) The Company purchased assets from the
original shareholders of Beijing Grain Food Co., Ltd. (hereinafter referred to as Beijing Grain Food) by
issuing 210,079,552 shares of the balance between the transaction price of the injected assets and the assets
to be purchased (the difference between the transaction price of the injected assets and the assets to be
purchased was RMB 1,699.5436 million yuan). The par value in the issuance was RMB 1.00 per share and
the issuance price was RMB 8.09 per share; 2) The Company has issued 48,965,408 non-public shares of
the Company to Beijing Grain Group for the purpose of purchasing the supporting funds raised from the
assets of the issuance of shares. The par value per share of the Company was RMB1.00 and the issuance
price was RMB8.82 per share. The shareholder Beijing Grain Group conducted subscription in monetary
funds. Upon completion of the issue, the registered capital was RMB 685,790,364.00 and the share capital
was RMB 685,790,364.00. Beijing Grain Group, which accounted for 42.06% of the total number of shares,
became the largest shareholder of the Company.
On November 21, 2019, with the approval of Beijing Shounong Food Group Co., Ltd. (Beijing
Shounong Food publish [2019] No. 212), Approval on the Plan of Purchasing Assets by Cash and Issuing
Shares of Hainan Jingliang Holdings Co., Ltd, On April , 2020, with the approval of Approval of Hainan
Jingliang Holding Co., Ltd. Issuance Shares to Wang Yuecheng to Purchase Assets by China Securities
Regulatory Commission [2020] No. 610, the company shall not issue more than 41,159,887 new shares in
private offering to raise funds supporting the purchase of assets through the issued shares. The Company
and its subsidiary, Beijing Jingliang Food Co., Ltd., purchased the 25.1149% equity stake of Zhejiang Little
Prince by cash and issuance of shares.
As of 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 and sales of
foodstuffs, agricultural and sideline products, grease, oils, and leisure foods.
3. The name of the parent company and the ultimate parent company.
The parent company of the company is Beijing Grain Group Co., Ltd., and the ultimate parent company
is Beijing 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 dated August 23rd, 2022.
5. Consolidation scope
The consolidated scope of the consolidated financial statements of the company is determined on the
basis of control, including the financial statements of the company and all subsidiaries. Subsidiaries refer to
enterprises or entities controlled by the Company.
A total of 19 subsidiaries of the Company were included in the scope of consolidation on June 30th,
2022, as detailed in Note 8 Interests in Other Entities. The consolidation scope of the company in the current
period is increased by one account compared with that in the previous period. For details, 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 and sales of food,
agricultural and sideline products, grease, oil and leisure food. According to the characteristics of actual
production and operation and the provisions of relevant accounting standards for business enterprises, the
Company and its subsidiaries have formulated a number of specific accounting policies and accounting
estimates for transactions and events such as revenue recognition. For details, please refer to the descriptions
in Note Ⅲ, 26 Revenue. For descriptions of the significant accounting judgments and estimates made by the
management, please refer to Note Ⅲ, 32 Significant Accounting Judgments and Estimates.
1. Statement of Compliance of Accounting Standards for Business Enterprises
The financial statements prepared by the Company based on the above preparation basis conform to
the requirements of the Accounting Standards for Business Enterprises and their application guidelines,
explanations and other relevant provisions (collectively referred to as "ASBE") and truly and completely
reflect the Company's financial status, operating results, cash flow and other relevant information.
In addition, the preparation of this financial report refers to the Rules for Preparation and Reporting
Information Disclosure of Companies Offering Securities to the Public No.15-General Provisions on
Financial Reports revised by China Securities Regulatory Commission in 2014 and the presentation and
disclosure requirements in Notice on Matters Related to the Implementation of the New Accounting
Standards for Enterprises by Listed Companies (Accounting Department Letter [2018] No. 453)
2. Accounting Period and Business Cycle
The accounting period of the Company is divided into an annual period and an interim period. The
accounting interim period refers to the reporting period shorter than a full accounting year. The fiscal year
of the Company adopts the Gregorian calendar year, that is, from January 1 to December 31 of each year.
The normal business cycle is the period from the time the Company purchases assets for processing to
the time when cash or cash equivalents are realized. The Company uses 12 months as an business cycle and
uses it as a liquidity classification standard for assets and liabilities.
3. Bookkeeping Standard Currency
RMB is the currency in the main economic environment in which the Company and its domestic
subsidiaries operate. The Company and its domestic subsidiaries use RMB as the bookkeeping standard
currency. The offshore subsidiaries of the Company determine USD as their bookkeeping standard currency
based on the currencies in the main economic environment in which they operate. The currency used by the
Company in preparing these financial statements is RMB.
4. The Accounting Treatment of Business Combination under the Same Control and Different
Control
Business Combination refers to the transaction or event in which two or more separate enterprises are
merged to form one reporting entity. Business combination can be divided into business combination under
the same control and business combination under different control.
(1) Business combination under the same control
Enterprises participating in the combination are ultimately controlled by the same party or multiple
parties before and after the combination, and the control is not temporary, so it is the business combination
under the same control. In case of business combination under the same control, the party that obtains control
of other enterprises participating in the combination on the combination date shall be the combination party,
and the other enterprises participating in the combination shall be the merged party. The combination date
refers to the date on which the combination party actually acquires control over the merged party.
The assets and liabilities acquired by the combination party are measured at the book value of the
merged party at the date of consolidation, including goodwill that was formed during acquisition by end
controller. If the difference between the book value of the net assets acquired by the merging party and the
book value of the merged consideration (or the total par value of the issued shares) paid by the merging
party, and the capital reserve (share capital premium) shall be adjusted; If the capital reserve (equity premium)
is insufficient to offset, the retained earnings shall be adjusted.
The direct expenses incurred by the merging party for the purpose of business combination shall be
included in the profits and losses of the current period when they are incurred.
(2) Business combination under different control
If the enterprises participating in the merger are not ultimately controlled by the same party or multiple
parties before and after the merger, the enterprise merger is not under the same control. In case of business
combination under different control, the party that obtains control of other enterprises participating in the
combination on the date of purchase shall be the Purchaser, and the other enterprises participating in the
combination shall be the Purchasee. Purchase date means the date on which the Purchaser actually acquires
control of the Purchasee.
For business combination under different control, the merger cost includes the assets, liabilities and fair
value of equity securities issued by the Purchaser in order to obtain the control over the Purchasee on the
date of purchase, and the intermediary fees such as audit, legal service, appraisal and consultation and other
management fees for the enterprise merger are used to record into the profits and losses of the current period
when incurred. The transaction costs of equity or debt securities issued by the Purchaser as a merger
consideration are included in the initial recognition amount of the equity or debt securities. Contingent
consideration involved shall be included in the consolidation cost at its fair value at the purchase date, and
the consolidation goodwill shall be adjusted accordingly if new or further evidence of the existence of
circumstances at the purchase date appears within 12 months after the purchase date and the adjustment or
consideration is required. The consolidation cost incurred by the Purchaser and the identifiable net assets
acquired during the consolidation are measured at the fair value at the date of purchase. The difference
between the merger costs and the fair value shares of the identifiable net assets of the Purchasee at the
purchase date obtained in the merger is recognized as goodwill. If the combined cost is less than the fair
value of the identifiable net assets of the Purchasee in the merger, first, the fair value of the identifiable
assets, liabilities and contingent liabilities of the Purchasee and the measurement of the consolidation cost
shall be re-checked. If the consolidation cost is still smaller than the fair value share of the identifiable net
assets of the Purchased obtained in the consolidation after the re-check, the difference shall be recorded into
the profits and losses of the current period.
When the Purchaser acquires the deductible temporary difference of the Purchasee, if it fails to
recognize the deferred income tax assets on the date of purchase because it does not meet the recognition
conditions for the deferred income tax, and within 12 months of the date of purchase, new or further
information is obtained indicating that the relevant circumstances at the purchase date already exist and the
economic benefits from the temporary difference deductible by the purchaser on the purchase date are
expected to be realized, the relevant deferred income tax assets shall be recognized, and the goodwill shall
be reduced. If the goodwill is not sufficiently offset, the difference shall be recognized as the current profit
or loss; In addition to the above circumstances, the deferred income tax assets related to the enterprise merger
are recognized and included in the current profits and losses.
Through multi-transaction and step-by-step business combination under different control, according to
the Circular of the Ministry of Finance on Printing and Issuing the Interpretation of Accounting Standards
for Business Enterprises No.5 (CK (2012) No.19) and Article 51 of the Accounting Standards for Business
Enterprises No.33-Consolidated Financial Statements on the judgment criteria of "package deal" (see 5 (2)
of Note 3), it is determined whether the multiple transactions belong to the "package deal". In the case of a
"package deal", the accounting treatment shall be performed with reference to the description in the
preceding paragraphs of this section and Note 3, 13 "Long-term Equity Investments"; If the transaction is
not a "package deal", the accounting treatment shall be distinguished between the individual financial
statements and the consolidated financial statements:
In the individual financial statements, the sum of the book value of the equity investment held by the
Purchaser prior to the purchase date and the cost of the new investment at the purchase date shall be taken
as the initial investment cost of the investment; Where the equity of the Purchased held before the date of
purchase involves other comprehensive income, the other consolidated income associated with the
investment is accounted for on the same basis as the assets or liabilities directly disposed of by the Purchaser
(i.e., except for the corresponding share in the change caused by the acquisition of the net liability or net
assets of the defined benefit plan remeasured in accordance with the equity method, the rest is transferred to
the current investment income).
In the consolidated financial statements, the equity of the Purchased held prior to the date of purchase
is remeasured according to the fair value of the equity at the date of purchase, and the difference between
the fair value and the carrying value is included in the investment income of the current period; Where the
equity of the Purchasee held before the date of purchase involves other comprehensive income, other
consolidated income related thereto shall be accounted for on the same basis as the direct disposal of the
relevant assets or liabilities by the Purchaser (i.e., except for the corresponding share in the change caused
by the acquisition of the net liability or net asset of the defined benefit plan remeasured in accordance with
the equity method, the rest is converted into the investment income of the current period to which the
acquisition date belongs).
5. Preparation Method of Consolidated Financial Statement
(1) Principles for determining the scope of the consolidated financial statement
The scope of consolidation of the consolidated financial statements is determined on a control basis.
Control means that the Company has the authority over the Investee, enjoys a variable return by participating
in the relevant activities of the Investee, and has the ability to use its authority over the Investee to influence
the amount of such return. The scope of the merger includes the Company and all its subsidiaries. Subsidiary
refers to the main body controlled by the Company.
The Company will re-evaluate the above control definitions once the relevant facts and circumstances
change, which results in the change of the relevant elements.
(2) Preparation method of consolidated financial statement
The Company begins to incorporate the net assets of the subsidiary and the actual control of the
production and operation decisions into the scope of the merger from the date when the subsidiary is acquired;
Cease to be included in the scope of the merger as of the date of loss of effective control. For the subsidiaries
disposed of, the operating results and cash flows prior to the date of disposal have been appropriately
included in the consolidated income statement and consolidated cash flow statement; For subsidiaries
disposed of in the current period, the opening amount of the consolidated balance sheet is not adjusted. The
operating results and cash flows of subsidiaries increased by consolidation after purchase have been properly
included in the consolidated income statement and consolidated cash flow statement, and the opening and
comparative amounts in the consolidated financial statements have not been adjusted for subsidiaries that
are not under the same control. The operating results and cash flows of the subsidiaries increased by
consolidation under the same control from the beginning of the consolidation period to the consolidation
date have been appropriately included in the consolidated profit statement and consolidated cash flow
statement, and the comparative amount of the consolidated financial statements has been adjusted at the
same time.
In the preparation of the consolidated financial statements, if the accounting policies or accounting
periods adopted by the subsidiaries are inconsistent with those adopted by the Company, necessary
adjustments shall be made to the financial statements of the subsidiaries in accordance with the accounting
policies and accounting periods of the Company. For subsidiaries acquired through business combination
under different control, the financial statements shall be adjusted on the basis of the fair value of identifiable
net assets at the date of purchase.
All significant transaction balances, transactions and unrealized profits within the Company are offset
at the time of preparation of the consolidated financial statements.
The shareholders' equity and the portion of the net profit or loss of the subsidiary that is not owned by
the Company for the current period are separately presented as minority shareholders' equity and minority
shareholders' profit or loss in the consolidated financial statements under shareholders' equity and net profit.
The shares of minority shareholders' equity in the net profits and losses of subsidiaries for the current period
are shown as "minority shareholders' profits and losses" under the net profit item in the consolidated income
statement. Losses shared by minority shareholders in a subsidiary exceed the minority shareholders' share
in the shareholders' equity of the subsidiary at the beginning of the period, and still decrease by a number of
shareholders' equity.
When the control of the original subsidiary is lost due to the disposal of part of the equity investment
or other reasons, the residual equity shall be revalued according to its fair value at the date of loss of control.
The sum of consideration obtained from the disposal of equity and the fair value of the remaining equity
minus the difference between the shares of the net assets of the original subsidiary that shall be continuously
calculated from the purchase date according to the original shareholding proportion shall be included in the
investment income of the current period of loss of control. Other comprehensive income related to the equity
investment of the original subsidiary, in the event of loss of control, the accounting treatment is performed
on the same basis as the direct disposal of the relevant assets or liabilities by the Purchased (i.e. converted
to current investment income, except for changes resulting from the re-measurement of the net liabilities or
net assets of the Defined Benefit Plan in the original subsidiary). Thereafter, the residual equity shall be
subsequently measured in accordance with the relevant provisions of Accounting Standards for Business
Enterprises No.2-Long-term Equity Investment or Accounting Standards for Business Enterprises No.22-
Recognition and Measurement of Financial Instruments, as detailed in Note Ⅲ, 13-Long-term Equity
Investment or Note Ⅲ, 9-Financial Instruments.
If the Company disposes of the equity investment in subsidiaries step by step until it loses control
through multiple transactions. It is necessary to distinguish whether the transactions that dispose of the
equity investment in subsidiaries until it loses control belong to a package deal or not. The terms, conditions
and economic impact of the transactions for the disposal of equity investments in subsidiaries are in
accordance with one or more of the following circumstances and generally indicate that multiple transactions
should be accounted for as a package deal: ① These transactions were entered into simultaneously or taking
into account each other's influence; ② Only when these transactions are taken together can a complete
business result be achieved; ③ The occurrence of one transaction depends on the occurrence of at least one
other transaction; ④ It is not economical to consider a transaction alone, but it is economical to consider it
in conjunction with other transactions. For transactions that are not part of the package deal, each transaction
shall be accounted for in accordance with the principles applicable to the "partial disposal of long-term
equity investments in subsidiaries without loss of control" (as detailed in 13 of Note Ⅲ) and the "loss of
control over existing subsidiaries as a result of the disposal of part of the equity investments or other reasons"
(as detailed in the preceding paragraph), as appropriate. If the transactions involving the disposal of equity
investments in subsidiaries until the loss of control belong to a package deal, the transactions shall be
accounted for as a transaction involving the disposal of subsidiaries and the loss of control; However, the
difference between each disposal price and the share of the subsidiary's net assets corresponding to the
disposal investment prior to the loss of control is recognized in the consolidated financial statements as other
consolidated gains and transferred to the profit or loss for the current period of loss of control in the event
of loss of control.
6. Classification of Joint Venture Arrangements and Accounting Treatment of Joint Operation
A joint venture arrangement is an arrangement under the joint control of two or more participants. The
Company divides the joint venture arrangement into joint operation and joint venture in accordance with the
rights and obligations it enjoys in the joint venture arrangement. A joint operation is a joint arrangement
whereby the parties that have joint control of the arrangement have rights to the assets, and obligations for
the liabilities, relating to the arrangement. A joint venture is a type of joint arrangement whereby the parties
that have joint control of the arrangement have rights to the net assets of the joint venture.
The Company's investment in the joint venture is accounted for using the equity method, and shall be
treated in accordance with the accounting policy described in Note Ⅲ, 13 "Long-term Equity Investment
Accounted by the Equity Method".
The Company, as a joint venture party, recognizes the assets and liabilities held and assumed by the
Company separately, and recognizes the assets and liabilities jointly held and assumed by the Company
according to the shares of the Company; recognizes the revenue generated from the sale of the share of joint
operating output enjoyed by the Company; recognizes revenue generated from the sale of output from joint
operations on the basis of the Company's share; confirms the expenses incurred by the Company individually
and the expenses incurred by the joint operation according to the shares of the Company.
When the Company invests or sells assets as a joint venture (such assets do not constitute business, the
same below), or purchases assets from the joint venture, the Company recognizes only the portion of the
profits and losses attributable to the other participants in the joint venture that arises from the transaction
prior to the sale of such assets to a third party. Where such assets are impaired in accordance with the
provisions of Accounting Standards for Business Enterprises No.8-Impairment of Assets, the Company shall
fully recognize such losses in the case where the assets are cast or sold by the Company to joint operations;
For the assets purchased by the Company from the joint operation, the Company recognizes the losses
according to the shares it assumes.
7. Determining Standards for Cash and Cash Equivalent
Cash and cash equivalents of the Company include cash on hand, deposits that can be readily withdrawn on
demand. Cash equivalents are investments held by the Company with a short term (usually maturing within
three months from the date of purchase), high liquidity, readily convertible to known amounts of cash and
which are subject to an insignificant risk of changes in value.
8. Foreign Currency Business and Translation of Foreign Currency Statements
(1) Translation method for foreign currency transaction
At the time of initial confirmation, the foreign currency transactions occurring in the Company shall be
converted into the bookkeeping functional currency amount at the spot exchange rate on the trading day, but
the foreign currency exchange business or transactions involving foreign currency exchange occurring in
the Company shall be converted into the bookkeeping functional currency amount at the actual exchange
rate.
(2) Translation method for foreign currency monetary items and foreign currency non-monetary item
On the balance sheet date, the foreign currency monetary items are converted at the spot exchange rate
on the balance sheet date, and the exchange difference arising therefrom shall be: ① The exchange
difference arising from the special foreign currency borrowings related to the acquisition and construction
of assets eligible for capitalization shall be handled in accordance with the principle of capitalization of
borrowing costs; ② The exchange difference of the hedging instruments used for effective hedging of the
net investment in overseas operations (the difference is included in other comprehensive income, and is not
recognized as current profit or loss until the net investment is disposed of); ③ Except for the amortized
cost, the exchange differences arising from the changes in the book balance of the available-for-sale
monetary items in foreign currencies shall be included in the other comprehensive income, and shall be
included in the profits and losses of the current period.
Where the preparation of the consolidated financial statements involves overseas operations, if there
are foreign currency monetary items constituting net investment in overseas operations, the exchange
differences arising from exchange rate changes shall be included in other comprehensive income; When
disposing of overseas operations, the profits and losses shall be transferred to the current disposal period.
Non-monetary items in foreign currencies measured at historical cost shall still be measured at the
bookkeeping amount in functional currency translated at the spot exchange rate on the transaction date. For
non-monetary items in foreign currencies measured at fair value, the spot exchange rate at the date of fair
value determination shall be adopted for conversion. The difference between the converted amount in
functional currency and the amount in original functional currency shall be treated as the change in fair value
(including the change in exchange rate), and shall be recorded into the profits and losses of the current period
or recognized as other comprehensive income.
(3) Translation method for financial statements in foreign currencies
Where the preparation of the consolidated financial statements involves overseas operations, if there
are foreign currency monetary items constituting net investment in overseas operations, the exchange
differences arising from exchange rate changes shall be as "foreign currency report conversion difference"
and be confirmed as other comprehensive income; When disposing of overseas operations, the profits and
losses shall be transferred to the current disposal period.
The foreign currency financial statements of overseas operations shall be converted into RMB
statements in the following ways: the assets and liabilities in the balance sheet shall be converted at the spot
exchange rate on the balance sheet date; Except for "undistributed profits", other items of shareholders'
equity shall be converted at the spot exchange rate at the time of occurrence. The income and expense items
in the profit statement shall be converted at the average exchange rate of the current period on the date of
transaction. The undistributed profit at the beginning of the period shall be the undistributed profit at the end
of the period converted from the previous year; The undistributed profits at the end of the year shall be
calculated and listed according to the converted profits distribution items; The difference between the
converted asset items and the total amount of the liability items and shareholders' equity items shall be
recognized as other comprehensive income as the translation difference in the foreign currency statements.
In case of disposal of overseas operations and loss of control, the balance in translation of the foreign
currency statements related to the overseas operations as shown below in the shareholders' equity items in
the balance sheet shall be transferred to the profits and losses of the disposal period in whole or in proportion
to the disposal of the overseas operations.
Cash flows in foreign currencies and cash flows of overseas subsidiaries shall be converted at the
average exchange rate of the current period on the date of occurrence of the cash flows. The effect of
exchange rate changes on cash shall be presented separately in the statement of cash flows as an reconciling
item.
Opening amounts and prior-period actual amounts shall be shown on the basis of amounts translated
from the prior-period financial statements.
When disposing of all the owner's equity of the Company's overseas operations or losing the control
over overseas operations due to the disposal of part of the equity investment or for other reasons, if the
following items of shareholders' equity in the balance sheet are shown below, the balance in translation of
the foreign currency statement attributable to the owner's equity of the parent company related to the
overseas operation shall be transferred to the profits and losses of the current disposal period.
In the event that the proportion of overseas business interests is reduced due to the disposal of part of
the equity investment or for other reasons, but the control over overseas business operations is not lost, the
balance in the translation of the foreign currency statements related to the disposal of part of overseas
business operations shall be attributed to minority shareholders' interests and shall not be transferred to the
profits and losses of the current period. When disposing of part of the equity of an overseas operation as an
associated enterprise or a joint venture, the balance of the translation of the foreign currency statements
related to the overseas operation shall be transferred into the profits and losses of the current disposal period
in the proportion of the overseas operation disposed of.
9. Financial instruments
Financial instruments are the contracts that form the financial assets of one entity, and at the same time
form the financial liabilities or equity instruments of other entities.
(1) Classification, confirmation and measurement of financial assets
According to the business mode of managing financial assets and the contractual cash flow
characteristics of financial assets, the Company divides financial assets into: Financial assets measured at
amortized cost. Financial assets measured at fair value with changes included in other comprehensive
income. Financial assets that are measured at fair value and whose movements are included in the current
profits and losses.
Financial assets are measured at fair value at initial recognition. For financial assets measured at fair
value and whose changes are included in current profits and losses, relevant transaction costs are directly
included in current profits and losses. For other types of financial assets, relevant transaction costs are
included in the initial recognition amount. Accounts receivable or notes receivable arising from the sale of
products or the provision of labor services that do not contain or take into account significant financing
components shall be initially recognized by the Company in accordance with the amount of consideration
that the Company is expected to be entitled to receive.
① Financial assets measured at amortized cost
The Group measures financial assets at 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 the
Company's staff loan. 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; ③ initial 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%、17%、15%、
Corporate Taxes According to taxable income
20%
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.
The company conducts VAT taxable sales or imports goods. According to the announcement issued by
Ministry of Finance, State Administration of Taxation and China Custom about the policy relating to
deepening VAT reform (Announcement by Ministry of Finance, State Administration of Taxation and China
Custom (2019) No.39), from 1st April 2019 onwards, the applicable rates are adjusted to 13%/9%.
Meanwhile, the company can deduct VAT by additional deductible rate of 10% from 1st April 2019 to 31st
December 2022 because of its business nature as service provider.
Representation on tax payers of different enterprise income tax rates:
Tax Payers Income Tax Rate
Jingliang (Singapore) International Trade Co., Ltd. 17%
Beijing Guchuan Bread Food Co., Ltd. 15%
Tax Payers Income Tax Rate
Hangzhou Lin'an Chunmanyuan Agricultural
Development Co., Ltd. 20%
2. Important preferential tax policies and basis
Hangzhou Linan Little Angel Food Co., Ltd., a 4th tier subsidiary company of the Company, is a
welfare enterprise. Since May 2016, it has enjoyed the preferential VAT policy of immediate refund upon
payment in Preferential Value-Added Tax Policies for Promoting the Employment of Disabled Persons
(CaiShui [2016] No.52).
The level 2 subsidiary of the company-Jingliang Caofeidian Agricultural Development Limited,
according to the document JTCFDST(2018) No. 1539765025415 issued by tax authority of Caofeidian
District, Tangshan, affiliated to State Administration of Taxation, and also followed the rules in Law of the
People's Republic of China on the Administration of Tax Collection, The Implementation Guideline of Law
of the People's Republic of China on the Administration of Tax Collection, the rice under the brand of
Tixiang produced by Caofeidian company if exempted from VAT.
The level 2 subsidiary of the company-Jingliang Caofeidian Agricultural Development Limited,
according to the rules under Clause 27 of Corporate Law and its Implementation Guideline Clause 86, the
rice under the brand of Tixiang produced by Caofeidian company if exempted from Corporation tax.
Beijing Guchuan Bread&Food Co., Ltd., a 3rd tier subsidiary of the Company, is a high-tech enterprise.
It enjoys the preferential tax policy of paying enterprise income tax at the 15% tax rate according to the
relevant provisions of both “Law of the People's Republic of China on Tax Collection and Administration”
and “Rules for the Implementation of the Tax Collection and Administration Law of the People's Republic
of China”. It obtained the certificate of high-tech enterprise No. GR202111000657, valid until September
14, 2024.
The third level 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.
Jingliang (Singapore) International Trade Co., Ltd., a third level subsidiary of the company, 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.
Linqing Little Prince Food Co., Ltd., a fourth-level subsidiary of the company, shall be subject to 50%
of the sales revenue on the basis of the stamp tax payable in the industrial procurement link and sales link
in the purchase and sale contract of industrial enterprises according to the 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.
Company’s level 4 subsidiary-Liaoning Xiaowangzi Food Limited, according to the Supplementary
Announcement on Land Use Tax issued by Ministry of Finance and State Administration of Taxation (89)
GSDZ No.140 Clause 13 states that public land such as municipal street, square, public green etc. can be
exempted from land use tax, when computing land use tax, the area used in the computation is total area less
the area for afforest and street.
Company’s level 4 subsidiary-Hangzhou Lin'an Chunmanyuan Agricultural Development Co., Ltd. ,
according to the Announcement of the State Administration of Taxation on Matters Relating to the
Implementation of Preferential Income Tax Policies to Support the Development of Small and Micro-profit
Enterprises and Individual Entrepreneurs and State Administration of Taxation Announcement No. 8 of 2021,
from January 1, 2021 to December 31, 2022, for small and micro-profit enterprises with annual taxable
income not exceeding RMB1 million The part of the annual taxable income of small and medium-sized
enterprises shall be reduced by 12.5% of the taxable income and the enterprise income tax shall be calculated
at a tax rate of 20%.
The company level 4 subsidiary Jingliang (Hebei) Oil Industry Co., Ltd., according to the financial
department documents, local taxation bureau in Hebei province, Hebei province document Ji caishui [2019]
No. 56 "about parts reserve commodity announcement concerning the tax policy, accounting books shall be
exempt from stamp duty for funds, to undertake business book stand in the process of buying and selling
contract commodity reserves shall be exempt from stamp duty, other parties in the contract should pay the
stamp duty shall also be subject to duty-payment according to the parties. Property tax and land use tax of
cities and towns shall be exempted from the property tax and land use tax of cities and towns that undertake
the business of commodity reserve for their own use. The notice will be executed on January 1, 2022 and
will terminate on 31 December., 2023.
Jingliang (Hebei) Oil Industry Co., Ltd., a 4th subsidiary company of the Company, exempts the sale
of edible vegetable oil stored by the government from VAT according to “Notice of the Ministry of Finance
and the State Administration of Taxation on the Levy and Exemption of Value Added Tax for Food
Enterprises”（Cai Shui [1999] No.198）
Ⅴ. Changes in accounting policies, accounting estimates, and explanation of corrections to
previous errors
1. Changes in accounting policies
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.
Ⅴ. Notes on Items in Consolidated Financial Statements
Note: The ‘beginning’ of the period refers to January 1st, 2022 and the ‘end’ of the period refers to June
30th, 2022. The previous period refers to the semiannual of 2021 and the current period refers to the
semiannual of 2022.
1. Monetary funds
(1) Classification list
Items Ending Balance Beginning Balance
Cash 37,656.19 15,012.17
Bank Deposits 625,517,712.74 465,853,913.24
Other Currency Funds 185,380,838.97 41,275,743.04
Total 810,936,207.90 507,144,668.45
Among them: the total amount of money deposited abroad 18,641,508.38 16,432,706.23
(2) At the end of the period, there was 47236.26 yuan of frozen funds in the long-standing account,
which was cancelled on July 1, 2022 and unfrozen.
(3) At the end of the period, there is no funds deposited abroad and the return of funds is restricted.
2. Transactional financial assets
Items Ending Balance Beginning Balance
Financial assets measured at fair value with changes
20,000,000.00 40,377,048.08
included in current profits and losses
Among them: debt instrument investment 20,000,000.00 40,377,048.08
Total 20,000,000.00 40,377,048.08
3. Derivative financial assets
Items Ending Balance Beginning Balance
Changes in fair value of hedging instruments 170,724,737.45
Total 170,724,737.45
Note: The Company hedges the inventories and expected transactions corresponding to the varieties
involved in the production, operation and trade business, and lists the hedging instruments in this table.
4. Accounts Receivable
（1）Disclosed according to aging
Aging Ending Balance
Within 1 Year (including 1 year) 88,431,686.35
Among them: Within the credit (within 3 months) 63,145,461.86
Credit period to 1 year 25,286,224.49
1 to 2 years (including 2 years) 7,821,775.78
2 to 3 years (including 3 years) 0.00
3 to 4 years (including 4 years) 996,000.00
4 to 5 years (including 5 years) 12,508.15
More than 5 years 436,259.50
Sub-total 97,698,229.78
Less Bad Debt provision 1,909,063.21
Total 95,789,166.57
（2）Present according to the method of provision for bad debt
Ending Balance
Book Balance Bad Debt Provision
Type(s)
Provision Book Value
Amount Ratio(%) Amount
Ratio(%)
Separate provision for bad debts 1,324,259.50 1.36 1,324,259.50 100.00
Portfolio provision for bad debts 96,373,970.28 98.64 584,803.71 0.61 95,789,166.57
Among them: portfolio 1 84,355,863.35 86.34 584,803.71 0.69 83,771,059.64
portfolio 2 12,018,106.93 12.30 12,018,106.93
Total 97,698,229.78 100.00 1,909,063.21 ---- 95,789,166.57
（Continued）
Beginning Balance
Book Balance Bad Debt Provision
Type(s)
Provision Book Value
Amount Ratio(%) Amount
Ratio(%)
Separate provision for bad debts 1,324,259.50 1.57 1,324,259.50 100.00
Beginning Balance
Book Balance Bad Debt Provision
Type(s)
Provision Book Value
Amount Ratio(%) Amount
Ratio(%)
Portfolio provision for bad debts 83,278,298.33 98.43 584,203.71 0.70 82,694,094.62
Among them: portfolio 1 74,329,280.51 87.86 584,203.71 0.79 73,745,076.80
portfolio 2 8,949,017.82 10.58 8,949,017.82
Total 84,602,557.83 100.00 1,908,463.21 82,694,094.62
A. Separate provision for bad debts
Ending Balance
Name Accounts Bad Debt Provision Provision
Receivable Provision Ratio Reason
expected
Beijing Xidan spicy town food limited 996,000.00 996,000.00 100.00
unrecoverable
expected
Beijing Rongfa Lida Grain and Oil Trade Co., Ltd. 163,143.00 163,143.00 100.00
unrecoverable
expected
Others 165,116.50 165,116.50 100.00
unrecoverable
Total 1,324,259.50 1,324,259.50 －－ －－
B. Portfolio provision for bad debts
1. Portfolio provision: aging portfolio
Ending Balance Beginning Balance
Name Accounts Bad Debt Provision Accounts Bad Debt Provision
receivable Provision Ratio receivable Provision Ratio
Within 1 Year
(including 1 year) 76,413,579.42 75,708.40 65,611,523.16 34,531.93
Among them: Within
the credit (within 3 72,628,159.42 0.00 0 63,884,932.01 0
months)
Credit period to 1 year 3,785,420.00 75,708.40 2 1,726,591.15 34,531.93 2
1 to 2 years (including
2 years) 7,821,775.78 391,088.79 5 8,594,045.46 429,702.27 5
2 to 3 years (including
3 years) 0.00 0.00 20 20
3 to 4 years (including
4 years) 0.00 0.00 50 50
4 to 5 years (including
5 years) 12,508.15 10,006.52 80 18,711.89 14,969.51 80
More than 5 years 108,000.00 108,000.00 100 105,000.00 105,000.00 100
Total 84,355,863.35 584,803.71 74,329,280.51 584,203.71
2. Portfolio provision: related parties portfolio
Ending Balance Beginning Balance
Provis
Name Accounts Bad Debt Provision Accounts Bad Debt
ion
receivable Provision Ratio receivable Provision
Ratio
Related parties portfolio 12,018,106.93 8,949,017.82
Total 12,018,106.93 8,949,017.82
3. details of bad debt provision
Ending
The amount changed for the period
Beginning Balance
Items
Balance Withdrawal Other
Addition Write-off
or reversal changes
Bad debt provision on
individual basis 1,324,259.50 1,324,259.50
Credit impairment loss
584,203.71 600.00 584,803.71
Total 1,908,463.21 600.00 1,909,063.21
4. Accounts receivable actually written off in the current period
There is no accounts receivable written off during the period.
5. Accounts Receivable of the Top 5 Balances Collected by Debtors at the End of the Period
Ratio of total
Accounts Whethe Bad Debt
Debtors accounts Aging
receivable r related Provision
receivable (%)
Tangshan Caofeidian District Within 1 year
25,997,336.04 26.61 No 374,974.00
Finance Bureau or 1 to 2 years
Zhejiang Lvqin Supply Chain
7,211,503.93 7.38 Within 1 year No
Management Co., Ltd.
Within 3
Shanghai Laiyifen Co.,Ltd. 5,745,933.30 5.88 No
month
COFCO Sihaifeng
Within 3
(Zhangjiagang) Trading Co., 4,366,405.68 4.47 No
month
Ltd
Wumart South Development 1 year to 2
4,339,327.38 4.44 No 48,102.10
Co., Ltd. years
Total 47,660,506.33 48.78 —— —— 423,076.10
5. Advanced Payment
(1) Advances are presented by age
Ending Balance Beginning Balance
Aging
Amount Ratio (%) Amount Ratio (%)
Within 1 year (including 1 year) 276,334,931.22 99.99 87,713,762.15 99.90
1 to 2 years (including 2 years) 0.00 - 90,000.00 0.10
2 to 3 years (including 3 years) 30,000.00 0.01
More than 3 years 0.00 -
Total 276,364,931.22 100.00 87,803,762.15 100.00
(2) Advance payment of the top five Ending Balances by prepaid objects
Ratio of the total ending
Debtor Name Ending Balance
balance of prepayments (%)
TIANJIN CUSTOMS DISTRICT P.R.CHINA 127,057,304.04 38.94
Sinograin Oils Corporation 108,919,676.23 33.38
Tianjin Lingang Port Group Co., Ltd 8,161,206.05 2.5
Jiangsu Jianghai grain and Oil Group Co., Ltd 6,852,000.00 2.1
Bangji Zhengda (Tianjin) grain and Oil Co., Ltd 5,478,745.84 1.68
Total 256,468,932.16 78.6
6. Other Receivables
A. Overview
(1) Classification
Item(s) Ending Balance Beginning Balance
Interest Receivable
Dividend Receivable
Other Receivables 134,897,411.13 284,756,636.27
Total 134,897,411.13 284,756,636.27
B. Other Receivables
（1）Disclosed according to aging
Aging Ending Balance
Within 1 Year (including 1 year) 134,251,771.13
Among them: Within the credit (within 3 months) 100,099,385.68
Credit period to 1 year 34,152,385.45
1 to 2 years (including 2 years) 335,837.00
2 to 3 years (including 3 years) 89,589.00
3 to 4 years (including 4 years) 102,714.00
4 to 5 years (including 5 years) 95,000.00
More than 5 years 123,197.85
Aging Ending Balance
Sub-Total 134,998,108.98
Less Bad Debt provision 100,697.85
Total 134,897,411.13
（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 120,351,735.89 277,445,730.08
Intercourse Funds of Units 13,747,226.79 6,142,777.03
Employee Receivables 747,480.76 755,783.37
Tax Refund Receivables 363,103.93
Others 151,665.54 149,939.71
Total 134,998,108.98 284,857,334.12
C. Details about allowance for bad debt
Stage 1 Stage 2 Stage 3
Expected credit Expected credit
Expected credit
Provision for bad debt loss for the whole loss for the whole Total
loss in the next
period (no credit period (with credit
12 months
impairment) impairment)
Amount on 1st January 2022 100,697.85 100,697.85
1st
Carrying amount on January
2022 that in this period:
——Get into Stage 2
——Get into Stage 3
——Get back to Stage 2
——Get back to Stage 1
Provision for the period
Reverse for the period
Transfer for the period
Write off for the period
Other changes
Amount on June 30th, 2022 100,697.85 100,697.85
D. Details of bad debt provision
Carrying Amount changes for the period
Carrying
amount at Withdra Other
Type Addi amount at
the wal or Write-off change
tion the end
beginning reversal s
Credit 100,697.85 100,697.85
impairment loss
Total 100,697.85 100,697.85
E. Other receivables actually written off in the current period
No other receivables were written off during the current period.
F. Other receivables according to top five of balance at end of period collected by debtors
Proportion in Ending
Balance at End of overall ending balance of
Name of Organization Nature of Funds Aging
Period balance of other bad debt
receivables (%) reserves
Beijing Capital Futures Co.,
Futures margin 61,574,507.20 Within 1 year 45.61
Ltd
Haitong Futures Co., Ltd Futures margin 27,236,112.80 Within 1 year 20.18
Sdic Cgog Futures Co., Ltd. Futures margin 17,471,005.20 Within 1 year 12.94
Beijing yangu grain and oil Storage fee
13,421,626.47 Within 1 year 9.94
purchase and sales Co., Ltd
ADM International Sarl Deposits 10,039,500.00 Within 1 year 7.44
Total — 129,742,751.67 96.11
7. Inventory
(1) Inventory Category
Ending Balance Beginning Balance
Items Falling Falling
Book Balance Price Book Value Book Balance Price Book Value
Reserves Reserves
Raw
243,932,236.96 120,997.67 243,811,239.29 120,983,829.85 120,997.67 120,862,832.18
Materials
Revolving
5,184,025.19 0.00 5,184,025.19 5,247,229.29 5,247,229.29
Materials
Goods and
materials in 568,416,059.36 0.00 568,416,059.36 522,101,505.11 522,101,505.11
transit
Inventory
1,558,615,267.65 355,731.86 1,558,259,535.79 1,007,319,237.46 355,731.86 1,006,963,505.60
goods
Replacement
245,116,134.92 245,116,134.92 248,197,500.00 248,197,500.00
of oil reserve
Total 2,621,263,724.08 476,729.53 2,620,786,994.55 1,903,849,301.71 476,729.53 1,903,372,572.18
(2) Inventory Falling Price Reserves and provision for impairment of contract performance costs
Increased
Amounts in Decreased Amounts in the
Balance at Beginning the Current Current Period Balance at End of
Items
of Year Period Period
Accru Othe Recover or
Others
al rs Charge Off
Stock Goods 355,731.86 355,731.86
Increased
Amounts in Decreased Amounts in the
Balance at Beginning the Current Current Period Balance at End of
Items
of Year Period Period
Accru Othe Recover or
Others
al rs Charge Off
Raw material 120,997.67 120,997.67
In total 476,729.53 476,729.53
（3）Stock Goods listed by major product type
Ending Balance Beginning Balance
Falling Falling
Items
Book Balance Price Book Value Book Balance Price Book Value
Reserves Reserves
Grease
1,540,840,593.86 170,341.46 1,540,670,252.40 975,554,568.82 170,341.46 975,384,227.36
and oils
185,390.40 31,764,668.64 185,390.40 31,579,278.24
Food 17,774,673.79 17,589,283.39
1,007,319,237.46 355,731.86 1,006,963,505.60
Total 1,558,615,267.65 355,731.86 1,558,259,535.79
8. Non-current assets due within one year
Items Balance at End of Period Balance at Beginning of Period
Three-year term deposits 145,318,533.34 156,139,100.00
In total 145,318,533.34 156,139,100.00
9. Other Current Assets
Items Balance at End of Period Balance at Beginning of Period
Financial Products 499,999,000.00 742,800,000.00
Pre-paid Taxes and Fees 25,453,200.78 1,192,806.93
Pending Deduct VAT Input Tax 57,863,273.60 13,930,489.13
Fair Value Changes of Items Trapped 62,577,325.41
30,857,817.86
at Hedging
In total 614,173,292.24 820,500,621.47
10. Long-term Equity Investment
Increase or Decrease in the Current Period
Balance at
Confirmed Profit and
Invested Unit Beginning of Additional Negative
Loss on Investment
Year Investment Investment
under Equity Law
1. Cooperative Enterprise
Beijing CHIA TAI Feedmill 112,016,416.64 8,593,354.95
Limited
Sub-total 112,016,416.64 8,593,354.95
Increase or Decrease in the Current Period
Balance at
Confirmed Profit and
Invested Unit Beginning of Additional Negative
Loss on Investment
Year Investment Investment
under Equity Law
2. Joint Venture
China Grain Reserves (Tianjin) 111,894,762.89 3,168,844.69
Warehouse Logistics Co., Ltd.
Jingliang Mismi Catering 6,888,258.00
Management (Beijing) Co., Ltd.
Sub-total 118,783,020.89 3,168,844.69
Total 230,799,437.53 11,762,199.64
(Continued)
Increase or Decrease in the Current Period Balance at End Ending Balance
of Period of Impairment
Adjustment of other Other Announce to Accrual of Others
Reserves
comprehensive changes in Distribute Case Impairment
income equity Dividends or Reserves
Profits
120,609,771.59
120,609,771.59
115,063,607.58
6,888,258.00
121,951,865.58
242,561,637.17
11. Other equity instruments investment
Item Ending Balance Beginning Balance
Chongqing long jinbao network technology co. LTD 20,000,000.00 20,000,000.00
Total 20,000,000.00 20,000,000.00
12. Investment Real Estate
(1) Investment Real Estate Adopting Cost Measurement Model
Land Use Projects under
Items Buildings Total
Right Construction
One. Original Book Value
1. Balance at Beginning of Year 53,844,801.60 53,844,801.60
2. Increased Amounts in the Current
Period 978,420.00 978,420.00
(1) Outsourcing 978,420.00 978,420.00
(2) Inventory transfer
(3) Others
3. Decreased Amounts in the
Current Period
(1) Disposal
(2) Other transfer out
4. Balance at End of Period 54,823,221.60 54,823,221.60
Two. Accumulated Impairment and
Accumulated Amortization
1. Balance at Beginning of Year 22,331,321.34 22,331,321.34
2. Increased Amounts in the Current
Period 1,189,598.10 1,189,598.10
(1) Accrual or Amortization 1,189,598.10 1,189,598.10
3. Decreased Amounts in the Current
Period
(1) Disposal
(2) Other transfer out
4. Balance at End of Period 23,520,919.44 23,520,919.44
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 20,714,505.46 20,714,505.46
2. Book Value at Beginning of Year 20,925,683.56 20,925,683.56
13. Fixed Assets
1. Overview
(1) Classification
Items Balance at End of Period Balance at Beginning of Year
Fixed Assets 1,070,634,397.11 1,120,758,409.49
Disposal of Fixed Assets
In total 1,070,634,397.11 1,120,758,409.49
2. Fixed Assets
(1) Fixed Assets Situation
Transportati
Machinery Electronic Office
Items Buildings on Others Total
Equipment Equipment Equipment
Equipment
One. Original
Book Value
1. Balance at
1,119,870,541.94 788,852,320.80 21,026,928.92 12,402,490.91 7,137,610.08 1,641,296.49 1,950,931,189.14
Beginning of Year
2. Increased
Amounts in the 29,810.84 2,332,577.59 579,414.45 77,912.59 101,234.56 - 3,120,950.03
Current Period
(1) Purchase 0.00 2,263,741.91 579,414.45 77,912.59 101,234.56 0.00 3,022,303.51
(2) Roll-in of
Project under 29,810.84 40,030.88 0.00 0.00 0.00 0.00 69,841.72
Construction
(3) Roll-in of
0.00 28,804.80 0.00 0.00 0.00 0.00 28,804.80
inventory
3. Decreased
Amounts in the 1,250,731.12 6,287,065.37 304,039.00 35,327.92 99,852.14 - 7,977,015.55
Current Period
(1) Disposal or
1,250,731.12 6,287,065.37 304,039.00 35,327.92 99,852.14 - 7,977,015.55
Scrap
4. Balance at End
1,118,649,621.66 784,897,833.02 21,302,304.37 12,445,075.58 7,138,992.50 1,641,296.49 1,946,075,123.62
of Period
Two. Accumulated
Impairment
1. Balance at
378,851,324.94 414,055,308.60 13,724,476.80 8,323,942.98 5,502,808.17 592,046.43 821,049,907.92
Beginning of Year
2. Increased
Amounts in the 19,918,733.11 27,742,670.92 768,843.06 658,679.11 268,954.83 30,243.25 49,388,124.28
Current Period
(1) Accrual 19,918,733.11 27,742,670.92 768,843.06 658,679.11 268,954.83 30,243.25 49,388,124.28
3. Decreased
Amounts in the 636,122.76 3,063,838.46 288,837.05 33,561.50 95,009.54 - 4,117,369.31
Current Period
(1) Disposal or
636,122.76 3,063,838.46 288,837.05 33,561.50 95,009.54 - 4,117,369.31
Scrap
4. Balance at End
398,133,935.29 438,734,141.06 14,204,482.81 8,949,060.59 5,676,753.46 622,289.68 866,320,662.89
of Period
Three. Impairment
Reserves
1. Balance at
9,047,959.13 74,912.60 0.00 0.00 0.00 0.00 9,122,871.73
Beginning of Year
2. Increased
Amounts in the 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Current Period
(1) Accrual 0.00 0.00 0.00 0.00 0.00 0.00 0.00
3. Decreased
Amounts in the 0.00 2,808.11 0.00 0.00 0.00 0.00 2,808.11
Current Period
(1) Disposal or 0.00 2,808.11 0.00 0.00 0.00 0.00 2,808.11
Scrap
4. Balance at End 0.00 0.00 0.00 0.00 9,120,063.62
9,047,959.13 72,104.49
of Period
Four. Book Value
1. Book Value at
711,467,727.24 346,091,587.47 7,097,821.56 3,496,014.99 1,462,239.04 1,019,006.81 1,070,634,397.11
End of Period
2. Book Value at
731,971,257.87 374,722,099.60 7,302,452.12 4,078,547.93 1,634,801.91 1,049,250.06 1,120,758,409.49
Beginning of Year
(2) Fixed assets without property right certificate
Items Book Value Reasons for failure to complete certificate of title
Buildings 1,824,844.67 No title certificate for auxiliary assets
14. Project under Construction
1. Overview
(1) Classification
Items Balance at End of Period Balance at Beginning of Year
Project under Construction 18,103,097.95 11,220,840.10
Total 18,103,097.95 11,220,840.10
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
1.Walnut cake
production line 4,406,844.00 4,406,844.00 4,234,344.00 4,234,344.00
of No.2 plant
2.Slope
treatment project 5,241,054.32 5,241,054.32 3,584,245.07 3,584,245.07
of No.3 plant
3.New
production line
of small fried
compound 1,650,338.89 1,650,338.89 44,252.17 44,252.17
potato chips in
leisure No.1
Factory
4.New
production line
2,239,773.70 2,239,773.70 2,038,825.39 2,038,825.39
of fried potato
chips
5.Feed
processing
project in 1,368,571.33 1,368,571.33 113,207.54 113,207.54
Comprehensive
Bonded Zone
6. Others 3,196,515.71 3,196,515.71 1,205,965.93 1,205,965.93
Total 18,103,097.95 18,103,097.95 11,220,840.10 11,220,840.10
(2) Change Condition of Important Engineering Projects under Construction in the Current Period
Other
Roll-in Fixed
Balance at Increased Decreased
Assets Amount Balance at
Project Name Beginning of Amounts in the Amounts in
in the Current End of Period
Year Current Period the Current
Period
Period
Walnut cake production 172,500.00 4,406,844.00
line of No.2 factory 4,234,344.00
Slope treatment project of 3,584,245.07 1,656,809.25 5,241,054.32
No.3 Factory
Baked potato project of 11,000.00 898,734.00 909,734.00
workshop 1 of NO.3
Factory
Konjac test line project 364,763.09 533,843.07 898,606.16
New production line of 2,038,825.39 240,979.19 40,030.88 2,239,773.70
fried potato chips
Feed processing project in 113,207.54 1,255,363.79 1,368,571.33
Other
Roll-in Fixed
Balance at Increased Decreased
Assets Amount Balance at
Project Name Beginning of Amounts in the Amounts in
in the Current End of Period
Year Current Period the Current
Period
Period
Comprehensive Bonded
Zone
Total 10,346,385.09 4,758,229.30 40,030.88 15,064,583.51
15. Right-of-use asset
Transportation
Items Buildings Land Use Right In total
Equipment
One Original Book Value
1. Balance at Beginning of
Year 4,423,305.76 202,276.99 4,970,592.00 9,596,174.75
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 4,423,305.76 202,276.99 4,970,592.00 9,596,174.75
Two Accumulated
Depreciation
1. Balance at Beginning of
Year 1,337,882.83 99,917.64 112,968.00 1,550,768.47
2. Increased Amounts in the
Current Period 697,952.29 43,591.28 56,484.00 798,027.57
(1) Accrual 697,952.29 43,591.28 56,484.00 798,027.57
3. Decreased Amounts in
the Current Period
Lease expiration or change
4. Balance at End of Period 2,035,835.12 143,508.92 169,452.00 2,348,796.04
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 2,387,470.64 58,768.07 4,801,140.00 7,247,378.71
2. Book Value at Beginning
of Year 3,085,422.93 102,359.35 4,857,624.00 8,045,406.28
16. Intangible Assets
(1) Intangible Assets Situation
Trademark Others
Items Software Land Use Right In total
Right
One Original Book Value
1. Balance at Beginning of Year 4,993,743.75 316,407,869.54 154,841,200.00 662,400.00 476,905,213.29
2. Increased Amounts in the Current 20,000.00 20,000.00
Period
(1) Purchase 20,000.00 20,000.00
(2)Internal R&D
(3)Increase in business consolidation
3. Decreased Amounts in the Current
Period
(1) Disposal
4. Balance at End of Period 5,013,743.75 316,407,869.54 154,841,200.00 662,400.00 476,925,213.29
Two Accumulated Amortization
1. Balance at Beginning of Year 3,882,572.92 68,640,464.95 63,749,297.55 136,272,335.42
2. Increased Amounts in the Current 148,596.22 3,427,285.81 3,856,963.03 7,432,845.06
Period
(1) Accrual 148,596.22 3,427,285.81 3,856,963.03 7,432,845.06
3. Decreased Amounts in the Current
Period
(1) Disposal
4. Balance at End of Period 4,031,169.14 72,067,750.76 67,606,260.58 143,705,180.48
Three Impairment Reserves
1. Balance at Beginning of Year 662,400.00 662,400.00
2. Increased Amounts in the Current
Period
(1) Accrual
3. Decreased Amounts in the Current
Period
(1) Disposal
4. Balance at End of Period 662,400.00 662,400.00
Four Book Value
1. Book Value at End of Period 982,574.61 244,340,118.78 87,234,939.42 332,557,632.81
2. Book Value at Beginning of Year 1,111,170.83 247,767,404.59 91,091,902.45 339,970,477.87
17. Goodwill
Original Book Value of Goodwill
Decrease in the Current
Balance at Increase in the Current Period
Name of Invested Unit or Period Balance at End
Beginning of
Items Forming Goodwill Formed by of Period
Year Others Disposal Others
Enterprise Merger
Acquire stock shares of
191,394,422.51 191,394,422.51
Zhejiang Xiaowangzi
Food 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.
18. Long-term Unamortized Expenses
Increased
Balance at Amortized Other
Amounts in Balance at End
Items Beginning of Amounts in the Decreased
the Current of Period
Year Current Period Amounts
Period
Reconstruction of majuqiao 14,214,132.05
674,188.08 13,539,943.97
plant
Amortization of laboratory
decoration costs 1,811,130.71 328,688.12 57,664.95 2,082,153.88
Factory No.3 compartment 604,558.74 0.00 604,558.74
maintenance
Housing renovation 753,996.91 52,493.13 701,503.78
Total
17,383,818.41 328,688.12 784,346.16 16,928,160.37
19. Deferred Income Tax Assets/Deferred Income Tax Liabilities
(1) Deferred Income Tax Assets Not Being Offset
Balance at End of Period Balance at Beginning of Year
Deductible Deductible
Items Deferred Income Deferred Income Tax
Temporary Temporary
Tax Assets Assets
Difference Difference
Asset Impairment 560,563.61 140,140.91 560,563.61 140,140.91
Reserves
Lease liabilities 456,335.82 114,084.05 196,089.81 49,022.46
Deductible Loss
Credit impairment Loss 1,809,163.08 452,290.67 1,808,563.08 452,140.67
Deferred Income 11,836,808.11 2,959,202.03 12,097,654.47 3,024,413.62
Wages payable 5,677,134.00 1,419,283.50 5,677,134.00 1,419,283.50
Valuation of Financial 33,944,248.10 8,486,062.03
Instruments and
Derivative Financial
Instruments
In total 20,340,004.62 5,085,001.16 54,284,253.07 13,571,063.19
(2) Details of Deferred Income Tax Liabilities Not Being Offset
Balance at End of Period Balance at Beginning of Year
Items Taxable Temporary Deferred Income Taxable Temporary Deferred Income Tax
Difference Tax Liabilities Difference Liabilities
Valuation and
appreciation of assets in 149,631,999.56 37,407,999.89 154,787,977.45 38,696,994.37
merger of enterprises not
under the same control
Valuation of Financial
Instruments and
Derivative Financial 93,012,186.67 23,253,046.67 26,215,702.16 6,553,925.54
Instruments
Total 181,003,679.61 45,250,919.91
242,644,186.23 60,661,046.56
(3)Details of Deferred Income Tax Liabilities after Offset
Carrying amount
Offseting amount Carrying amount offseting amount of
after offsetting
of deferred tax after offsetting deferred tax assets
Items between deferred tax
assets and between deferred tax and liabilities at the
assets and liabilitie at
liabilities assets and liabilities end of last period
the end of last period
Deferred tax asset 2,822,620.34 2,262,380.82 13,571,063.19
Deferred tax liabilities 2,822,620.34 57,838,426.22 45,250,919.91
(4)Details of Deferred Income Tax Assets Not Being Confirmed
Items Balance at End of Period Balance at Beginning of Year
Deductible temporary differences 200,597.85 200,597.85
Deductible Loss 130,584,827.40 107,793,038.93
In total 130,785,425.25 107,993,636.78
(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
2022 4,446,986.94 4,021,787.39
2023 19,123,515.53 19,123,515.53
2024 47,153,825.45 47,153,825.45
2025 25,114,592.05 25,114,592.05
2026 12,379,318.51 12,379,318.51
2027 22,366,588.92
Total 130,584,827.40 107,793,038.93
20. Other Non-current Assets
Ending Balance Beginning Balance
Provisi
Items Provision
on for
Book balance Book value Book balance for Book value
impair
impairment
ment
Three-year
term 172,095,077.15 172,095,077.15 189,741,996.74 189,741,996.74
deposit
Ending Balance Beginning Balance
Provisi
Items Provision
on for
Book balance Book value Book balance for Book value
impair
impairment
ment
Total 172,095,077.15 172,095,077.15 189,741,996.74 189,741,996.74
21. Short-term Borrowings
（1）Classification of Short-term Borrowings
Items Balance at End of Period Balance at Beginning of Year
Guaranteed Loan 210,582,550.72 23,262,063.93
Fiduciary Loan 1,570,230,104.11 1,498,407,537.42
In total 1,780,812,654.83 1,521,669,601.35
22. Derivative financial liability
Item Ending balance Beginning balance
Changes in fair value of hedging instruments 10,447,490.00 70,305,871.37
Total 10,447,490.00 70,305,871.37
23. Notes Payable
Item Ending balance Beginning balance
Bank acceptance bill 248,855,576.61
Total 248,855,576.61
24. Accounts Payable
（1）Accounts Payable Listed
Items Balance at End of Period Balance at Beginning of Year
Material Funds Payable 203,348,611.77 176,725,835.45
Project Funds Payable 6,383,547.02 7,291,515.18
Equipment Funds Payable 544,099.77 1,746,573.40
Storage Payable 1,133,931.60
Lease Payable 1,055,100.00
Others 181,004.74 984,822.39
In total 212,646,294.90 186,748,746.42
25. Advance payment
（1）Advance payment Listed
Items Balance at End of Period Balance at Beginning of Year
Advance collection of rent 1,434,527.74 996,173.41
Items Balance at End of Period Balance at Beginning of Year
In total 1,434,527.74 996,173.41
26. Contract liabilities
（1） Classification of contract liabilities
Items Balance at End of Period Balance at Beginning of Year
Loans 919,436,607.41 520,816,995.93
Service payment
In total 919,436,607.41 520,816,995.93
27. Wages Payable
（1）List of Wages Payable
Balance at Increase in the Decrease in the Balance at End of
Items
Beginning of Year Current Period Current Period Period
One Short-term Compensation 40,757,672.48 132,809,847.42 160,237,545.94 13,329,973.96
Two After-service Welfare- Set up
1,372,978.01 16,876,364.62 16,563,735.36 1,685,607.27
ESP liabilities
Three Dismission Welfare 0.00 519,760.00 409,760.00 110,000.00
In total 42,130,650.49 150,205,972.04 177,211,041.30 15,125,581.23
（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
36,829,352.40 110,393,865.16 137,745,010.19 9,478,207.37
Subsidy
2. Welfare Expense of Employee 20.00 2,794,433.59 2,749,775.11 44,678.48
3. Social Insurance Expense 867,037.88 9,770,450.32 9,759,389.38 878,098.82
Among them: Medical Insurance
766,979.62 8,992,717.65 8,966,512.87 793,184.40
Premiums
Industrial Injury Insurance
65,373.41 591,687.14 587,607.82 69,452.73
Premiums
Birth Insurance Premiums 34,684.85 161,295.81 180,518.97 15,461.69
Others 0.00 24,749.72 24,749.72 -
4. Housing Provident Funds 129,165.23 7,693,963.45 7,675,934.19 147,194.49
5. Labor Union Expense and
2,932,096.97 2,157,134.90 2,307,437.07 2,781,794.80
Personnel Education Fund
In total 40,757,672.48 132,809,847.42 160,237,545.94 13,329,973.96
（3）List of Stated Drawings Plan
Balance at Increase in the Decrease in the Balance at End of
Items
Beginning of Year Current Period Current Period Period
1. Basic Pension Insurance 1,281,915.76 14,740,816.53 14,550,047.43 1,472,684.86
Balance at Increase in the Decrease in the Balance at End of
Items
Beginning of Year Current Period Current Period Period
2. Unemployment Insurance
44,475.16 476,118.52 353,113.58 167,480.10
Expense
3. Enterprise Annuity Charges 46,587.09 1,659,429.57 1,660,574.35 45,442.31
Total 1,372,978.01 16,876,364.62 16,563,735.36 1,685,607.27
28. Taxes and Fees Payable
Items Balance at End of Period Balance at Beginning of Year
Corporate Income Tax 14,257,634.30 74,174,903.15
VAT 18,766,909.84 23,320,246.23
Urban Maintenance and Construction Tax 1,380,050.48 1,876,669.91
House Property Tax 971,999.24 2,302,350.63
Land Use Tax 299,222.52 176,087.89
Individual Income Tax 249,685.24 671,107.90
Educational Surtax 545,469.85 760,843.86
Local Educational Surtax 415,789.61 559,372.28
Stamp Tax 409,166.54 500,830.44
Environmental protection tax 3,663.70 5,193.36
Water conservancy construction fee 247.04
In total 37,299,591.32 104,347,852.69
29. 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 47,950,959.66 49,689,488.04
In total 72,247,058.01 73,985,586.39
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 19,938,831.56 25,053,238.93
Intercourse Funds between Units 12,363,930.65 9,931,464.29
Intercourse Funds of Related Parties 7,554,925.28 5,722,550.45
Personal Intercourse Funds 2,983,643.60 4,032,688.22
Various Insurances of Employee 3,402,959.14 2,768,202.89
Others 1,706,669.43 2,181,343.26
In total 47,950,959.66 49,689,488.04
30. Non-current liabilities due within one year
Item End balance Beginning balance
Current portion of lease liability 701,615.82 1,582,978.69
Total 701,615.82 1,582,978.69
31. Other current liability
1. Other current liability statement
Item End balance Beginning balance
VAT from Unearned Revenues 56,678,234.13 22,994,553.60
Fair Value Changes of Items Trapped at Hedging 100,059,642.60
Total 156,737,876.73 22,994,553.60
32. Long term borrowing
Item End balance Beginning balance
Credit Loan 71,000,000.00
Total 71,000,000.00
33. Lease liability
Item End balance Beginning balance
Lease liability 2,840,455.73 3,464,242.09
Less:Unrecognized financing
124,932.64 186,560.78
expenses
Non current liabilities
reclassified to maturity within one 701,615.82 1,582,978.69
year
Total 2,013,907.27 1,694,702.62
34. Long term wage payable
(1)List of long-term wage payable
Items Balance at End of Period Balance at Beginning of Year
Net liabilities of defined benefit
plan in post employment benefits
Dismission Welfare
Other Long-term Welfare 5,677,134.00 5,677,134.00
In total 5,677,134.00 5,677,134.00
35. Deferred Income
Balance at Increase in Decrease in
Balance at
Items Beginning of the Current the Current Cause of Formation
End of Period
Year Period Period
Government Subsidy 65,244,499.48 1,046,593.53 64,197,905.95
In total 65,244,499.48 1,046,593.53 64,197,905.95 --
Among them, items involving government subsidy are as follows:
Asset
Balance at Increase in
Items Receiving Charge to Other Balance at related /
Beginning of the Current
Subsidy other Profits changes End of Period income
Year Period
related
Enterprise foundation
supporting in the
construction stage of
Asset
"Tianjin Lingang 48,651,619.45 638,752.08 48,012,867.37 related
Industrial Zone
Management
Committee"
Special subsidy for Asset
infrastructure investment 9,387,794.81 9,387,794.81 related
The relocation Asset
compensation 3,847,638.14 3,847,638.14 related
Tianjin Binhai New
District’s Industrially
Technical Renovation
Asset
and Park Construction 1,870,370.21 111,111.12 1,759,259.09 related
Funds as well as
Expenditures for Science
and Technology
Key technology research
and industrialization
Asset
project of "moderate 700,549.40 38,919.42 661,629.98 related
processing" of grain and
oil
Construction of
provincial grain reserve
Asset
information management 433,059.98 100,343.16 332,716.82 related
system to form asset
entry project
Design of electric
Asset
heating system for oil 223,999.76 28,000.02 195,999.74 related
tank
Special subsidies for
Asset
Beijing Reserve Granary 129,467.73 129,467.73 - related
Facility Maintenance
In total 65,244,499.48 917,125.80 129,467.73 64,197,905.95 --
36. Share Capital
Balance at End
Changes in the Current Period（+、-）
of Period
Balance at Share
Items Beginning of New Share Transfer
Year Share Donati of Others Sub-total
Issue on Provident
Fund
1. Shares with
Restricted 42,459,387.00 -1,299,500.00 -1,299,500.00 41,159,887.00
Conditions
(1) State
Shareholding
(2) State-
owned Legal-
149,500.00 -149,500.00 -149,500.00 0.00
person
Shareholding
(3) Other
Domestic
42,309,887.00 -1,150,000.00 -1,150,000.00 41,159,887.00
Capital
Shareholding
Including:
Domestic
1,150,000.00 -1,150,000.00 -1,150,000.00 0.00
Legal-person
Shareholding
Domestic
Natural Person 41,159,887.00 41,159,887.00
Shareholding
(4) Foreign
Shareholding
Including:
Foreign Legal-
person
Shareholding
Foreign
Natural Person
Shareholding
2. Tradable
Shares without
684,490,864.00 1,299,500.00 1,299,500.00 685,790,364.00
Restricted
Conditions
(1) RMB
Ordinary 619,515,864.00 1,299,500.00 1,299,500.00 620,815,364.00
Shares
(2)
Domestically
64,975,000.00 64,975,000.00
Listed Foreign
Shares
(3) Listed
Foreign Shares
Overseas
(4) Others
In total 726,950,251.00 726,950,251.00
Note: Haikou Branch of Ping An Bank Co., Ltd. held 1150000 restricted shares of the company, and
Beijing Wanfa Real Estate Development Co., Ltd. held 149500 restricted shares of the company, which was
lifted on February 21, 2022.
37. Capital Reserves
Balance at Increase in the Decrease in the Balance at End of
Items
Beginning 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 112,316,357.36 112,316,357.36
Original System
Other Capital Reserves 240,714,007.21 240,714,007.21
In total 1,675,918,350.95 1,675,918,350.95
38. Other Comprehensive Incomes
Amounts Occurred in the Current Period
Amounts Less: included in
Less: Other
Occurred other comprehensive
Comprehensive Attributable to
Balance at before income in the Attributable to
Items Incomes Charged at Less: Income Minority Balance at End
Beginning of Income Tax previous period and Parent Company
Earlier Stage and Tax Expense Shareholders of Period
Year in the transferred to After Tax
Current Roll-in Profit After Tax
Current retained income in
and Loss
Period the current period
One Other
comprehensive
incomes that won’t
be classified into
profit and loss
1. Remeasure and
set the change
amount of benefit
plan
2. Other
comprehensive
income that cannot
be transferred to
profits and losses
under the equity
method
3. Changes in the
fair value of other
equity instrument
investments
4. Changes in fair
value of the
enterprise's own
credit risk
Two Other
comprehensive
incomes that will be -682,282.22 671,532.18 671,532.18 -10,750.04
classified into profit
and loss
1. Other
comprehensive
income transferable
-460,842.50 -460,842.50
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 -221,439.72 671,532.18 671,532.18 450,092.46
financial statements
Total -682,282.22 671,532.18 671,532.18 -10,750.04
39. Surplus Reserves
Balance at Increase in the Decrease in the
Items Balance at End of Period
Beginning of Year Current Period Current Period
Statutory
Surplus 84,487,609.05 84,487,609.05
Reserves
Free Surplus
Reserves 37,634,827.93 37,634,827.93
In total 122,122,436.98 122,122,436.98
40. Undistributed Profit
Amounts in the Current Amounts in the Prior
Items
Period Period
Adjustment on undistributed profit at end of last year 391,493,534.34 187,033,763.26
Adjustment on total number of undistributed profit at
beginning of period (increase+ and decrease-)
Adjusted undistributed profit at beginning of period 391,493,534.34 187,033,763.26
Add: net profit attributable to parent company in the 72,908,330.15 88,328,197.91
current period
Less: withdrawal legal surplus reserves
Withdrawal free surplus reserves
Withdrawal general risk reserves
Ordinary stock dividends payable
Ordinary stock dividends transferred to capital
Undistributed profit at end of period 464,401,864.49 275,361,961.17
41. 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 5,494,462,329.87 5,267,887,989.16 5,314,299,316.84 5,095,458,647.50
Other Business 18,318,940.45 6,476,103.50 13,947,518.99 4,086,340.91
In total 5,512,781,270.32 5,274,364,092.66 5,328,246,835.83 5,099,544,988.41
(2) Prime Business (Industry and Business-classified)
Name of Industry (or Amounts in the Current Period Amounts in the Prior Period
Business) Revenue Cost Revenue Cost
Oil and Oil Seeds 5,029,994,012.13 4,897,082,807.80 4,869,341,487.59 4,764,017,743.17
Food Processing 464,468,317.74 370,805,181.36 444,957,829.25 331,440,904.33
In total 5,494,462,329.87 5,267,887,989.16 5,314,299,316.84 5,095,458,647.50
(3)Prime Business (Region-classified)
Amounts in the Current Period Amounts in the Prior Period
Name of Region
Revenue Cost Revenue Cost
North China 4,554,123,662.96 4,422,630,118.98 4,914,886,135.81 4,796,869,662.51
East China 364,861,708.51 286,122,942.00 334,001,372.42 245,689,750.46
Northeast China 70,369,663.99 58,672,431.76 65,411,808.61 52,899,234.53
South East 505,107,294.41 500,462,496.42
In total 5,494,462,329.87 5,267,887,989.16 5,314,299,316.84 5,095,458,647.50
42. Tariff And Annex
Amounts in the Prior
Items Amounts in the Current Period
Period
Urban Maintenance and Construction Tax 5,547,508.14 3,913,915.24
Educational Surtax 2,383,077.24 1,707,476.99
Local Educational Surtax 1,588,718.13 1,138,317.97
House Property tax 3,000,706.17 2,381,706.84
Land Use Tax 810,831.84 494,944.34
Stamp Tax 3,643,485.85 1,688,284.40
Vehicle and Vessel Use Tax 20,909.30 13,396.03
Other Taxes and Fees 20,628.49 25,862.08
In total 17,015,865.16 11,363,903.89
43. Sales Expenses
Amounts in the Amounts in the Prior
Items
Current Period Period
Employee Compensation (including social security, etc) 29,291,508.50 31,765,392.17
Sales Promotion Expenses 4,055,810.11 14,691,957.83
Warehousing Fees 8,497,141.26 6,167,549.59
Depreciation 7,901,751.09 6,696,732.33
Material consumption, sample and product cost 1,948,756.28 2,485,399.23
Travel Expenses 2,393,868.84 3,258,440.43
Repair Costs 125,442.17 306,168.70
Handling fees 392,895.96 715,023.09
Water and Electricity Fees 630,075.86 661,247.68
Vehicle Fees 131,919.41 483,097.45
Packing Expenses 53,683.76 87,852.52
Test and Detection Fees 88,133.90 82,360.64
Business Entertainment Expenses 31,445.59 130,610.36
Others 13,645,576.59 9,145,744.50
Total 69,188,009.32 76,677,576.52
44. Administration Expenses
Amounts in the Amounts in the Prior
Items
Current Period Period
Employee Compensation (including social security, etc) 50,434,025.42 43,851,104.43
Amortization of Assets 13,005,624.37 11,973,858.13
Impairment Costs 4,327,122.86 4,901,086.37
Fees of Employing Agent 2,920,279.69 3,847,980.48
Company Expenses 1,892,233.41 1,404,552.02
Repair Costs 1,473,228.80 817,744.13
Lease fee 2,080,164.07 1,891,512.26
Vehicle Fees 1,270,341.36 1,204,195.24
Information Network Fees 749,443.87 213,966.44
Business Entertainment Expenses 358,026.74 602,406.43
Environmental Protection Fees 640,492.40 452,173.78
Commercial Insurance Expenses 429,123.43 419,856.67
Workers Insurance Expenses 0.00 364,967.31
Security Protection Fees 424,416.84 371,966.61
Labor Protection Fees 190,101.64 198,526.82
Material Consumption 312,740.16 183,533.95
Travel Expenses 83,289.71 498,287.95
Other Expenses 7,150,012.92 11,601,981.52
In total 87,740,667.69 84,799,700.54
45. Research and Development Expenses
Items Amounts in the Current Period Amounts in the Prior Period
R&D Expenses 4,876,642.24 5,170,755.15
In total 4,876,642.24 5,170,755.15
46. Financial Expenses
Items Amounts in the Current Period Amounts in the Prior Period
Interest Expenses 16,391,856.85 19,854,113.81
Less: Interest Income 6,825,161.06 5,408,203.94
Exchange Profit and Loss -196,022.86 25,480.77
Service Charges 3,198,614.15 1,149,403.55
In total 12,569,287.08 15,620,794.19
47. Other Profits
Items Amounts in the Current Period Amounts in the Prior Period
Government Subsidy Related to Daily
6,346,260.64 5,839,070.44
Corporate Activities
Return of Service Charges of Withholding
92,739.41 586,991.10
Individual Income Tax
In total 6,439,000.05 6,426,061.54
48. Investment Income
Amounts in the Current Amounts in the
Items
Period Prior Period
Long-term equity investment income accounted with equity
11,762,199.64 25,976,509.34
method
Investment income of financial assets measured at fair value
with changes included in current profit and loss during the
holding period
Investment income from disposal of wealth management
47,446.09 607,342.87
products
Investment income of disposing trading financial asssets 267,083.33 4,663,045.87
Investment income obtained during the holding of
128,861.80
transactional financial assets
Others
In total 12,205,590.86 31,246,898.08
49. 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 49,424,487.23 61,697,730.47
Including: income with changes in fair value generated by
derivative financial instruments 49,424,487.23 61,697,730.47
Trading financial liabilities
Investment real estate measured by fair value
In total 49,424,487.23 61,697,730.47
50. Credit impairment loss
Amounts in the Amounts in the Prior
Items
Current Period Period
Accounts receivable bad debt loss -600.00
Other receivables bad debt loss
Total -600.00
51. Assets Disposal Income
Amounts in the Current Amounts in the Prior
Items
Period Period
Gains or losses on disposal of fixed assets 441,741.39 -58,126.00
Gains or losses on disposal of Intangible Assets -559.83
In total 441,741.39 -58,685.83
52. Non-operating Income
(1)Classification
Amounts
Amounts in the Amounts in the Charged to Non-
Items
Current Period Prior Period recurring Profit
and Loss
Total non current assets retirement gains: 40,746.10 63,990.38 40,746.10
Including: fixed assets scrap profit 40,746.10 63,990.38 40,746.10
profit from scrap of intangible assets
Government Subsidy 4,502.00 4,502.00
Relocation Compensation 354,192.63 49,231.02 354,192.63
Penalty income 36,613.84 1,040,420.14 36,613.84
Other Gains 39,160.87 125,472.26 39,160.87
In total 475,215.44 1,279,113.80 475,215.44
53. 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: 16,790.13 174,235.08 16,790.13
Including: fixed assets scrap loss 16,790.13 174,235.08 16,790.13
intangible assets scrap loss
External donation 86,722.08 86,722.08
Inventory loss 24,500.00
Demolition loss 51,705.77
Penalty expenditure 69,109.99 11,410.09 69,109.99
Compensatory payment 27,834.85 27,834.85
Others 157,870.48 844.38 157,870.48
Total 358,327.53 262,695.32 358,327.53
54. 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 6,105,743.64 30,647,755.00
Deferred Income Tax Expenses 24,355,678.28 6,310,979.14
Total 30,461,421.92 36,958,734.14
(2) Accounting Profit and Income Tax Expense Adjustment Process
Amounts in the Current Amounts in the Prior
Items
Period Period
Total Profits 115,653,813.61 135,397,539.87
Income tax expenses calculated by 28,913,453.40 33,849,384.97
statutory/applicable tax rate
Effect of subsidiary corporations being applicable -465,871.81 -205,910.89
to different tax rates
Adjustment on effect of income tax in the prior 1,348,133.02 69,840.82
period
Effect of Non-taxable Incomes -2,866,400.51 -5,206,628.35
Effect of Non-deductible cost, expense and loss 17,385.49 11,964.14
Effect of deductible loss on usage of unconfirmed
deferred income tax assets in the prior period
Effect of deductible temporary difference or
deductible loss on unconfirmed deferred income 3,795,413.88 8,487,990.35
tax in the current period
Effect of deductions
Others -280,691.55 -47,906.90
Income Tax Expenses 30,461,421.92 36,958,734.14
55. Other comprehensive income items and their income tax impact and transferred to profit and loss
See details of ‘Appendix Six Notes on Items in Consolidated Financial Statements, 38 Other Comprehensive
Incomes’
56. Notes to items related cash flow statement
(1) Receiving other cash related to operation activities
Amounts in the Amounts in the Prior
Items
Current Period Period
Intercourse Funds of Related Parties 6,708,697.32 21,322,392.80
Intercourse Funds of Other Units 77,884,840.10 68,948,398.19
Non-operating Income and other income 2,151,049.48 461,551.34
Interest Income 5,306,053.12 4,224,691.03
Future Margins 1,092,728,826.43 1,194,590,311.77
Others 4,800,305.29 7,011,863.15
Total 1,189,579,771.74 1,296,559,208.28
(2) Other Cash Payment Related to Operation Activities
Amounts in the Amounts in the Prior
Items
Current Period Period
Intercourse Funds of Related Parties 2,011,580.36 1,581,282.06
Intercourse Funds of Other Units 1,581,633,115.17 1,036,471,337.77
Payment for Administration Expenses 31,495,939.51 12,020,073.04
Payment for Operating Expenses 11,211,289.78 17,754,375.04
Non-operating Expenses 358,327.53 108,141.65
Petty Cash Paid 147,809.79 478,289.75
Bank Charges 3,173,814.38 1,125,306.40
Others 2,740,301.36 9,848,614.49
In total 1,632,772,177.88 1,079,387,420.20
57. 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 85,192,391.69 98,438,805.73
Add: Assets Impairment Reserves
Amounts in the Amounts in the Prior
Supplementary Materials
Current Period Period
Credit impairment loss 600.00
Fixed Assets Depreciation, Oil-and-gas Assets
Depreciation and Productive Biological Assets 46,068,782.54 52,265,152.07
Depreciation
Amortization of Intangible Assets 7,432,845.06 7,436,713.40
Amortization of Long-term Deferred Expenses 784,346.16 451,034.11
Losses on Disposal of Fixed Assets, Intangible Assets and
-441,741.39 58,685.83
Other Long-term Assets (Fill in profit with symbol “－”)
Losses on Retirement of Fixed Assets (Fill in profit with
16,790.13 -174,235.08
symbol “－”)
Losses on Changes in Fair Value (Fill in profit with symbol
-49,424,487.23 -61,697,730.47
“－”)
Financial Expenses (Fill in profit with symbol “－”) 12,569,287.08 19,879,594.58
Investment Losses (Fill in profit with symbol “－”) -12,205,590.86 -31,246,898.08
Decrease in Deferred Income Tax Assets (Fill in increase
11,308,682.37 -11,734,401.87
with symbol “－”)
Increase in Deferred Income Tax Reliabilities (Fill in
12,587,506.31 16,853,619.06
decrease with symbol “－”)
Decrease in Inventory (Fill in increase with symbol “－”) -717,414,422.37 -374,437,109.01
Decrease in Items of Operating Receivables (Fill in increase
-64,104,630.81 206,404,522.78
with symbol “－”)
Increase in Items of Operating Receivables (Fill in decrease
493,019,231.89 355,352,692.40
with symbol “－”)
Others
Net Cash Flows from Operating Activities -174,610,409.43 277,850,445.45
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 810,888,971.64 778,877,443.37
Less: cash balance at beginning of period 506,928,810.69 334,389,017.41
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 303,960,160.95 444,488,425.96
(2) Composition of cash and cash equivalents
Balance at End of Balance at Beginning
Items
Period of Period
One Cash 810,888,971.64 506,928,810.69
Including: cash in stock 37,656.19 15,012.17
Bank deposit available for payment at any time 625,470,476.48 465,650,779.09
Other currency funds available for payment at any time 185,380,838.97 41,263,019.43
Deposits with central bank available for payment
Interbank deposit
Interbank placements
Two Cash Equivalents
Balance at End of Balance at Beginning
Items
Period of Period
Including: bond investment maturing within three months
Three Balance of Cash and Cash Equivalents at End of
Period 810,888,971.64 506,928,810.69
Including: restricted cash and cash equivalents used by
parent company or intra-group affiliates
58. Assets with restricted ownership or right to use
Items Book Value at End of Period Reasons being Restricted
Monetary Fund 47,236.26 Long term suspended account
Investment Real Estate 5,710,257.95 Litigation Freeze
Fixed Assets 5,615,303.70 Litigation Freeze
In total 11,372,797.91 ——
At the end of the period, there was 47236.26 yuan of frozen funds in the long-standing account, which was
cancelled on July 1st, 2022 and unfrozen.
59. 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 4,029,048.18 6.7114 27,040,553.98
Including: US Dollars 4,029,048.18 6.7114 27,040,553.98
Accounts receivable 79,359,769.17 6.7114 532,615,154.83
Including: US Dollars 79,359,769.17 6.7114 532,615,154.83
Notes receivable 37,079,532.83 6.7114 248,855,576.61
Including: US Dollars 37,079,532.83 6.7114 248,855,576.61
Other Payable 576,543.96 6.7114 3,869,417.13
Including: US Dollars 576,543.96 6.7114 3,869,417.13
Other Receivable 2,493,145.99 6.7114 16,732,500.00
Including: US Dollars 2,493,145.99 6.7114 16,732,500.00
(2) Instruction of Operational Entity Overseas
The registrant and operating unit of the Company is Beijing Grain (Singapore) International Trade Co., Ltd.
with main business place of Singapore and recording currency of US Dollars.
60. Hedging items and related hedging instruments
Please refer to the related content on 3.Derievative financial asset and 22. Derivative financial liability under
Section VI of the Notes.
61. Government Subsidies
（1）Basic conditions of government grants
Amount recorded
Type Amount Presentation item
in profit and loss
VAT refunds 3,881,079.77 Other income 3,881,079.77
Supporting enterprise foundation in the Deferred income
construction stage of "Tianjin Lingang 63,130,000.00 638,752.08
Industrial Zone Management Committee"
Special subsidy for infrastructure investment 18,176,788.00 Deferred income
Research and technology demonstration of Deferred income
green and clean production equipment and 4,500,000.00
process of edible oil
Relocation compensation 7,695,276.34 Deferred income
Subsidies for replacing training with work 146,100.00 Other income 146,100.00
Tianjin Binhai New Area Industrial Technology Deferred income
Transformation and park construction funds 4,000,000.00 111,111.12
and science and technology expenditure
The construction of provincial grain reserve Deferred income
information management system forms an asset 633,746.30 229,810.89
entry project
Job stabilization subsidy 270,734.42 Other income 270,734.42
Subsidy for operation of disabled persons' Other income
187,180.00 187,180.00
home
Post subsidy for the disabled 70,040.65 Other income 70,040.65
Allocation for oil tank electric heating system 855,179.48 Deferred income 28,000.02
Key technology research and industrialization Deferred income
project of "moderate processing" of grain and 1,089,743.60 38,919.42
oil
Training subsidies 87,000.00 Other income 87,000.00
Emergency Revolving grain subsidy 15,000.00 Other income 15,000.00
Tianjin Port Free Trade Zone Finance Bureau Other income
intelligent manufacturing municipal special 100,000.00 100,000.00
fund
Tianjin Port Free Trade Zone Development and Other income
Reform Bureau Tianjin special fund for energy 522,000.00 522,000.00
conservation
Subsidies for water balance projects 150,000.00 Other income 150,000.00
Others 4,502.00 Non-operating income 4,502.00
In total 105,514,370.56 6,480,230.37
VII. Change in Consolidation Scope
During the reporting period, the company added Jingliang (Beijing) Food Marketing Management Co., Ltd.,
with 100% of the company's shares, which was included in the consolidated statements.
VIII. Equities in Other Entities
1. Equities in Subsidiaries
(1) Composition of the Company
Shareholding Ratio Voting
Principle
Name of Registered Nature of (%) rights Mode of
Place of
Subsidiary Place Business ratio Acquisition
Business Direct Indirect
(%)
Beijing Merger under
Investment
Jingliang Food Beijing Beijing 100 100 the same
management
Co., Ltd. control
Jingliang
Agricultural
(Tianjin) Grain Merger under
Product and
and Oil Tianjin Tianjin 70 70 the same
By Product
Industry Co., control
Processing
Ltd.
Beijing
Merger under
Jingliang Oil Grain and oil
Beijing Beijing 100.00 100.00 the same
and Fat Co., trade
control
Ltd.
Jingliang Agricultural
Merger under
(Hebei) Oil Product and
Hebei Hebei 51.00 51.00 the same
Industry Co., By Product
control
Ltd. Processing
Beijing Merger under
Grain and oil
Guchuan Edible Beijing Beijing 100.00 100.00 the same
trade
Oil Co., Ltd. control
Agricultural
Beijing Eisen- Merger under
Product and
Lubao Oil Co., Beijing Beijing 100.00 100.00 the same
By Product
Ltd. control
Processing
Beijing
Merger under
Tianweikang
Beijing Beijing Warehousing 100.00 100.00 the same
Oil Distribution
control
Center Co., Ltd.
Beijing Merger under
Food
Guchuan Bread Beijing Beijing 100.00 100.00 the same
Processing
Food Co., Ltd. control
Zhejiang Xiao Combination
Food
Wang Zi Food Hangzhou Hangzhou 17.6794 77.2072 94.8866 not under
Processing
Co., Ltd. same control
Hangzhou
Combination
Lin'an Food
Hangzhou Hangzhou 17.6794 77.2072 94.8866 not under
Xiaotianshi Processing
same control
Food Co., Ltd.
Liaoning Xiao Combination
Food
Wang Zi Food Liaoning Liaoning 17.6794 77.2072 94.8866 not under
Processing
Co., Ltd. same control
Linqing Xiao Combination
Food
Wang Zi Food Linqing Linqing 17.6794 77.2072 94.8866 not under
Processing
Co., Ltd. same control
Lin'an
Chunmanyuan Combination
Food
Agricultural Hangzhou Hangzhou 17.6794 77.2072 94.8866 not under
Processing
Development same control
Co., Ltd.
Jingliang
(Singapore) Establishment
Singapore Singapore Grain trade 100.00 100.00
International by investment
Trade Co., Ltd.
Jingliang Rural
Complex
Construction Land Establishment
Xinyi Xinyi 51.00 51.00
and Operations remediation by investment
(Xinyi) Co.,
Ltd.
Jingliang
(Caofeidian)
Establishment
Agricultural Tangshan Tangshan Plantation 51.00 51.00
by investment
Development
Co., Ltd.
Beijing
jingliang gubi Grain and oil Establishment
Beijing Beijing 100 100
oil and grease trade by investment
co. LTD
Jingliang
(Yueyang)
Agricultural Establishment
Grain and Oil Hunan Hunan 65.00 65.00
products by investment
Industry Co.,
Ltd.
Jingliang
(Beijing) Food
Food Establishment
Marketing Beijing Beijing 100 100
Processing by investment
Management
Co., Ltd
(2) Major non-wholly-owned subsidiaries
Profit And Loss Dividends Balance of
Shareholdin Voting rights
Attributable to Distributed to Minority
g Ratio of ratio of
Minority Minority Shareholder's
Name of Subsidiary Minority Minority
Shareholders for Shareholders Equity at the
Shareholders Shareholders
the Current for the Current End of the
(%) (%)
Period Period Period
Zhejiang Xiao Wang
5.1134 5.1134 1,861,987.97 52,045,860.83
Zi Food Co., Ltd.
Jingliang (Tianjin)
Grain and Oil 30 30 9,748,547.33 279,085,991.98
Industry Co., Ltd.
(3) Important financial information on major non-wholly-owned subsidiaries
Ending balance or Amount incurred in the current period
Items Zhejiang Xiao Wang Zi Food Jingliang (Tianjin) Grain and
Co., Ltd. Oil Industry Co., Ltd.
Current Assets 565,884,751.11 2,199,407,377.24
Non-current Assets 464,558,996.04 746,222,353.87
Total Assets 1,030,443,747.15 2,945,629,731.11
Current Liabilities 109,500,103.80 1,958,808,082.68
Non-current Liabilities 18,912,566.95 65,624,908.51
Total Liabilities 128,412,670.75 2,024,432,991.19
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
13,058,616.32 -213,367,607.66
Activities
(Continued)
Beginning balance or Amount incurred in the prior period
Items Zhejiang Xiao Wang Zi Food Jingliang (Tianjin) Grain and
Co., Ltd. Oil Industry Co., Ltd.
Current Assets 545,563,045.64 1,393,747,379.61
Non-current Assets 496,391,615.83 782,065,202.69
Total Assets 1,041,954,661.47 2,175,812,582.30
Current Liabilities 158,579,977.51 1,235,715,663.77
Non-current Liabilities 18,912,566.95 51,395,336.36
Total Liabilities 177,492,544.46 1,287,111,000.13
Operating Income 400,535,661.71 2,066,464,701.05
Net Profit (Loss) 42,774,753.04 25,929,844.42
Total Comprehensive Income 42,774,753.04 25,929,844.42
Cash Flow from Operating Activities 21,727,662.43 424,430,320.67
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
One Joint Ventures
1. Beijing Zhengda
Beijing Beijing Manufacturer 50.00 Equity method
Feed Co., Ltd.
Two Affiliates
1. SINOGRAIN
(Tianjin) Transportation
Tianjin Tianjin 30.00 Equity method
Warehousing and warehousing
Logistics Co., Ltd.
2. Important financial information on major joint ventures
Ending Balance/Current Beginning Balance/Last Term
Amount Amount
Item
Beijing Zhengda Feed Co., Beijing Zhengda Feed Co.,
Ltd. Ltd.
Current assets 291,989,950.25 259,094,822.42
Including: cash and cash equivalents 41,459,305.70 30,509,860.94
Non-current assets 22,818,385.41 24,949,630.10
Total assets 314,808,335.66 284,044,452.52
Current liabilities 74,131,852.21 59,463,197.04
Non-current liabilities 4,020,732.57 5,112,214.50
Total liabilities 78,152,584.78 64,575,411.54
Minority shareholder's equity
Shareholders' equity attributable to the parent
236,655,750.88 219,469,040.98
company
Share of net assets based on shareholding ratio 118,327,875.44 109,734,520.49
Ending Balance/Current Beginning Balance/Last Term
Amount Amount
Item
Beijing Zhengda Feed Co., Beijing Zhengda Feed Co.,
Ltd. Ltd.
Adjustments
-- Goodwill
-- Unrealized profits from internal transactions
-- Other 2,281,896.15
Book value of equity investment in joint
120,609,771.59 109,734,520.49
ventures
Fair value of equity investment in joint
ventures with open offers
Operating income 152,840,560.07 185,991,526.96
Financial costs -3,176,445.74 -2,549,556.75
Income tax expense 5,728,902.62 6,749,196.01
Net profit 17,186,709.90 20,298,087.13
Net profit from discontinued operations
Other comprehensive income 0.00 0.00
Total comprehensive income 17,186,709.90 20,298,087.13
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 69,416,144.10 104,812,139.17
Non-current assets 660,859,459.30 555,196,631.04
Total assets 730,275,603.40 660,008,770.21
Current liabilities 62,694,174.90 32,099,278.71
Non-current liabilities 279,690,730.44 250,581,609.08
Total liabilities 342,384,905.34 282,680,887.79
Minority shareholder's equity
Shareholders' equity attributable to
387,890,698.06 377,327,882.42
the parent company
Share of net assets based on
116,367,209.42 113,198,364.73
shareholding ratio
Adjustments
-- Goodwill
-- Unrealized profits from internal
transactions
-- Others -1,303,601.84
Book value of equity investment in
115,063,607.58 113,198,364.73
affiliates
Fair value of equity investment in
affiliates with open offers
Operating income 23,237,902.69 28,434,555.09
Beginning Balance/Last Term
Ending Balance/Current Amount
Amount
Item
SINOGRAIN (Tianjin) SINOGRAIN (Tianjin)
Warehousing Logistics Co., Ltd. Warehousing Logistics Co., Ltd.
Net profit 10,562,815.64 4,116,892.01
Net profit from discontinued
operations
Other comprehensive income
Total comprehensive income 10,562,815.64 4,116,892.01
Dividends received from affiliates
0.00 24,680,000.00
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, 2022
Financial assets Financial assets
Financial assets measured at fair value measured at fair value
Financial asset
measured at and the changes and the changes Total
items
amortized cost recorded in current recorded in other
profits and losses comprehensive income
Monetary funds 810,936,207.90 810,936,207.90
Transactional
20,000,000.00 20,000,000.00
financial assets
Derivative
170,724,737.45 170,724,737.45
financial assets
Notes receivables 0.00
Accounts
95,789,166.57 95,789,166.57
receivables
Other receivables 134,897,411.13 134,897,411.13
Investment in other
20,000,000.00 20,000,000.00
equity instruments
Current portion of
145,318,533.34 145,318,533.34
non-current assets
Other current
499,999,000.00 30,857,817.86 530,856,817.86
assets
Other non-current
172,095,077.15 172,095,077.15
assets
B. December 31, 2021
Financial assets Financial assets
Financial assets measured at fair value measured at fair value
Financial asset
measured at and the changes and the changes recorded Total
items
amortized cost recorded in current in other comprehensive
profits and losses income
Monetary funds 507,144,668.45 507,144,668.45
Transactional
40,377,048.08 40,377,048.08
financial assets
Derivative
financial assets
Financial assets Financial assets
Financial assets measured at fair value measured at fair value
Financial asset
measured at and the changes and the changes recorded Total
items
amortized cost recorded in current in other comprehensive
profits and losses income
Notes receivables
Accounts
82,694,094.62 82,694,094.62
receivables
Other receivables 284,756,636.27 284,756,636.27
Investment in other
20,000,000.00 20,000,000.00
equity instruments
Current portion of
156,139,100.00 156,139,100.00
non-current assets
Other current
742,800,000.00 62,577,325.41 805,377,325.41
assets
Other non-current
189,741,996.74 189,741,996.74
assets
(2) Book value of various financial liabilities on the balance sheet date
A. June 30th, 2022
Financial liabilities measured at fair
Other financial
Financial liability items value and changes included in current Total
liability
profits and losses
Short term loans 1,780,812,654.83 1,780,812,654.83
Derivative financial liability 10,447,490.00 10,447,490.00
Notes Payable 248,855,576.61 248,855,576.61
Accounts Payable 212,646,294.90 212,646,294.90
Other Payables 72,247,058.01 72,247,058.01
Other Current Liability 100,059,642.60 100,059,642.60
B. December 31, 2021
Financial liabilities
measured at fair value and
Financial liability items Other financial liability Total
changes included in current
profits and losses
Short term loans 1,521,669,601.35 1,521,669,601.35
Derivative financial liability 70,305,871.37 70,305,871.37
Accounts payable 186,748,746.42 186,748,746.42
Other Payables 73,985,586.39 73,985,586.39
2. Credit Risk
On June 30th, 2022, 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, 2022
Item
Within One Year 1 To 5 Years Above Five Years Total
Short term loans 1,780,812,654.83 1,780,812,654.83
Derivative financial
10,447,490.00 10,447,490.00
liability
Accounts payable 210,979,576.75 1,666,718.15 212,646,294.90
Other Payable 72,247,058.01 72,247,058.01
Notes Payable 248,855,576.61 248,855,576.61
Other Current Liability 100,059,642.60 100,059,642.60
(Continued)
December 31, 2021
Item
Within One Year 1 To 5 Years Above Five Years Total
Short term loans 1,521,669,601.35 1,521,669,601.35
Derivative financial
70,305,871.37 70,305,871.37
liability
Accounts payable 185,082,028.27 1,666,718.15 186,748,746.42
Other Payables 73,985,586.39 73,985,586.39
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, 2022, the Company's interest-bearing liabilities under floating rate contracts denominated in
RMB amounted to RMB 850,000,000.00 and those under fixed rate contracts denominated in RMB amounted to
RMB 398,197,500.00.
(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, 2022, 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 27,040,553.98 23,046,783.19
Items Ending Balance Beginning Balance
Short term borrowings 532,615,154.83 802,427,368.52
Accounts Payable 595,286.36
Other Payable 3,869,417.13
Notes payable 248,855,576.61
Other Receivables 16,732,500.00
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 5% -37,078,354.73 -37,078,354.73
US dollar
The yuan appreciated
-5% 37,078,354.73 37,078,354.73
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
5% 579,852.37 579,852.37
against the US dollar
The yuan appreciated
-5% -578,852.37 -578,852.37
against the US dollar
X. Disclosure of Fair Values
1. Fair values of assets and liabilities measured at fair value at the end of the period
Fair Values at the End of the Period
Third Level
Item First Level Fair Second Level Fair
Fair Value Total
Value Measurement Value Measurement
Measurement
One. Continuous fair value
measurement
Ⅲ. Transactional financial assets 190,724,737.45 190,724,737.45
1. Financial assets that are
measured at fair value and whose
190,724,737.45 190,724,737.45
changes are included in the current
profits and losses
(1) Investment in debt instruments 20,000,000.00 20,000,000.00
(2) Investment in equity
instruments
(3) Derivative financial assets 170,724,737.45 170,724,737.45
2. Financial assets designated as
fair value through profit or loss
(1) Investment in debt instruments
(2) Investment in equity
instruments
(3) Others
Ⅲ. Other debt investment
Ⅲ. Investment in other equity
20,000,000.00 20,000,000.00
instruments
Total assets continuously
190,724,737.45 20,000,000.00 210,724,737.45
measured at fair value
Ⅲ.Transactional financial
10,447,490.00 10,447,490.00
liabilities
1. Financial liabilities measured at
fair value with changes included in 10,447,490.00 10,447,490.00
current profits and losses
Including: transactional bonds
issued
derivative financial liability 10,447,490.00 10,447,490.00
others
2. Financial liabilities designated
as fair value through profit or loss
Total liabilities continuously
10,447,490.00 10,447,490.00
measured at fair value
2. Basis for determining market prices of continuous and non-continuous first level fair value
measurement items
The Company makes offers for first level fair value measurement according to open contracts of the futures
exchange and the quote from the bank on financial product at the end of the period.
3. Continuous and non-continuous third-level fair value measurement items adopt valuation techniques
and qualitative and quantitative information of important parameters
The company‘s investment in other equity instruments of the third level fair value measurement project is
the ”three noes“ equity investment that without control, joint control and significant influence held by the company.
On the basis of analyzing the operation status of the invested enterprise and combining with relevant situations, the
company takes the investment cost as the fair value of other equity instrument investment for measurement at the
end of the period.
XI. Related Parties and Related-Party Transactions
1. Identification criteria of related parties
If one party controls, jointly controls or exerts significant influence on the other party, and two or more parties
are controlled, jointly controlled or significantly influenced by the same party, they constitute related parties.
2. Parent Company of the Company
Registered
Name of Parent Registered Legal Capital
Company type Nature of Business
Company Place representative (ten thousand
Yuan)
Beijing Grain Wholly state-owned Investment
Beijing Zhang Lijun 90,000.00
Group Co. Ltd. enterprise Management
(Continued)
Proportion of Shares Held by Proportion of Voting Power
The ultimate controlling party Organization
Parent Company in the Held by Parent Company in the
of the Company code
Company (%) Company (%)
Beijing State-owned Capital
39.68 39.68 Operation and Management 683551038
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 Ai Lai FA Xi Food Co., Ltd Controlled by the ultimate controlling party
Beijing baijiayi Food Co., Ltd Controlled by the ultimate controlling party
Beijing Bainian Liyuan Ecological Agriculture Co., Ltd Controlled by the ultimate controlling party
Beijing North Jingtang foreign wine sales Co., Ltd Controlled by the ultimate controlling party
Beijing Beishui Food Industry Co., Ltd Controlled by the ultimate controlling party
Kangtai culture branch of Beijing ershang Group Co., Ltd Controlled by the ultimate controlling party
Beijing ershang Jinghua Tea Co., Ltd Controlled by the ultimate controlling party
Beijing ershang Jinghua Tea Co., Ltd Controlled by the ultimate controlling party
Beijing ershang Jingshen seafood Co., Ltd Controlled by the ultimate controlling party
Beijing ershang Mochi Zhonghong Food Co., Ltd Controlled by the ultimate controlling party
Beijing ershang Meat Food Group Co., Ltd Controlled by the ultimate controlling party
Beijing ershang Xijie Food Co., Ltd Controlled by the ultimate controlling party
Beijing ershang Yihe Sunshine Property Management Co., Ltd Controlled by the ultimate controlling party
Beijing ershang Yihe Sunshine Real Estate Co., Ltd Controlled by the ultimate controlling party
Beijing Guchuan Rice Industry Co., Ltd Controlled by the ultimate controlling party
Beijing Guchuan Food Co., Ltd Controlled by the ultimate controlling party
Beijing heiliu animal husbandry technology Co., Ltd Controlled by the ultimate controlling party
Food center of Beijing heiliu animal husbandry technology Co., Ltd Controlled by the ultimate controlling party
Beijing Hongyuan Lijun grain and oil supply Co., Ltd Controlled by the ultimate controlling party
Beijing Huadu liquor Marketing Co., Ltd Controlled by the ultimate controlling party
Beijing Jingliang e-commerce Co., Ltd Controlled by the ultimate controlling party
Beijing Jingliang Dongfang grain and Oil Trading Co., Ltd Controlled by the ultimate controlling party
Beijing Jingliang Logistics Co., Ltd Controlled by the ultimate controlling party
Beijing Jingliang canal grain and Oil Trading Co., Ltd Controlled by the ultimate controlling party
Beijing junzhiyuan grain and oil purchase and sales Co., Ltd Controlled by the ultimate controlling party
Beijing Lanfeng Vegetable Distribution Co., Ltd Controlled by the ultimate controlling party
Beijing Grain Group Co., Ltd Controlled by the ultimate controlling party
Beijing Liubiju Food Co., Ltd Controlled by the ultimate controlling party
Huairou brewery of Beijing Liubiju Food Co., Ltd Controlled by the ultimate controlling party
Beijing Longmen vinegar Co., Ltd Controlled by the ultimate controlling party
Beijing Longsheng Zhongwang breakfast Co., Ltd Controlled by the ultimate controlling party
Beijing celon International Cultural Development Co., Ltd Controlled by the ultimate controlling party
Beijing Sanyuan Meiyuan Food Co., Ltd Controlled by the ultimate controlling party
Beijing Sanyuan Food Co., Ltd Controlled by the ultimate controlling party
Feed branch of Beijing Sanyuan Seed Technology Co., Ltd Controlled by the ultimate controlling party
Beijing Beijiao farm Co., Ltd Controlled by the ultimate controlling party
Beijing dahongmen grain storage Co., Ltd Controlled by the ultimate controlling party
Beijing Desheng Hotel Co., Ltd Controlled by the ultimate controlling party
Beijing Haidian Xijiao grain and oil supply station Co., Ltd Controlled by the ultimate controlling party
Beijing Huacheng Trading Co., Ltd Controlled by the ultimate controlling party
Beijing Liangguan grain and oil supply Co., Ltd Controlled by the ultimate controlling party
Beijing Grain Science Research Institute Co., Ltd Controlled by the ultimate controlling party
Beijing Longqing Xiadu military grain supply Co., Ltd Controlled by the ultimate controlling party
Beijing Maliandao grain and oil special supply station Co., Ltd Controlled by the ultimate controlling party
Beijing Nanyuan vegetable oil factory Co., Ltd Controlled by the ultimate controlling party
Beijing milk Co., Ltd Controlled by the ultimate controlling party
Beijing food supply department No. 34 supply department Co., Ltd Controlled by the ultimate controlling party
Beijing xinderun Agricultural Tourism Development Co., Ltd Controlled by the ultimate controlling party
Beijing Yanqing farm Co., Ltd Controlled by the ultimate controlling party
Daxing Branch of Beijing Yunong high quality agricultural products
Controlled by the ultimate controlling party
planting Co., Ltd
Huairou branch of Beijing Yunong high quality agricultural products
Controlled by the ultimate controlling party
planting Co., Ltd
Beijing Changyang farm Co., Ltd Controlled by the ultimate controlling party
Beijing zizibing grain and oil supply Co., Ltd Controlled by the ultimate controlling party
Beijing Shoucheng Shanshui Real Estate Co., Ltd Controlled by the ultimate controlling party
Beijing shounong Oriental Food Supply Chain Management Group Co.,
Controlled by the ultimate controlling party
Ltd
Beijing shounong Development Co., Ltd Controlled by the ultimate controlling party
Beijing shounong commercial chain 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
Beijing shounong Food Emergency Support Center Co., Ltd Controlled by the ultimate controlling party
Beijing shounong Flavor Industry Group Co., Ltd Controlled by the ultimate controlling party
Beijing shounong Xiangshan Conference Center Co., Ltd Controlled by the ultimate controlling party
Beijing shounong consumption assistance and Innovation Center Co.,
Controlled by the ultimate controlling party
Ltd
Beijing Shuangta Green Valley Agriculture Co., Ltd Controlled by the ultimate controlling party
Beijing sugar tobacco & Wine Group Co., Ltd Controlled by the ultimate controlling party
Sugar business branch of Beijing sugar tobacco & Wine Group Co., Ltd Controlled by the ultimate controlling party
Beijing Taoshan Grain Reserve Co., Ltd Controlled by the ultimate controlling party
Beijing Wuhuan Shuntong Supply Chain Management Co., Ltd Controlled by the ultimate controlling party
Beijing Xing Fashion Trading Co., Ltd Controlled by the ultimate controlling party
Beijing Yanqi Yueshengzhai Halal Food Co., Ltd Controlled by the ultimate controlling party
Beijing Zhujun grain and oil supply Co., Ltd Controlled by the ultimate controlling party
Chengde Sanyuan Jinxing duck industry Co., Ltd Controlled by the ultimate controlling party
Hebei Luanping Huadu Food Co., Ltd Controlled by the ultimate controlling party
Hebei Sanyuan Food Co., Ltd Controlled by the ultimate controlling party
Hebei shounong Modern Agricultural Technology Co., Ltd Controlled by the ultimate controlling party
Jingliang diandaowang (Beijing) Trading Co., Ltd Controlled by the ultimate controlling party
Shandong Fukuan Bioengineering Co., Ltd Controlled by the ultimate controlling party
Shanghai shounong Investment Holding 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 7,719.00 8,536.00
Co., Ltd
Beijing Beishui Food Industry Co., Ltd Purchase of goods 11,990.50 12,976.00
Beijing ershang Jinghua Tea Co., Ltd Purchase of goods 10,395.00
Beijing ershang Mochi Zhonghong Food Co., Ltd Purchase of goods 32,992.00 345.60
Beijing ershang Meat Food Group Co., Ltd Purchase of goods 182,656.94 303,970.00
Beijing shounong Flavor Industry Group Co., Ltd Purchase of goods 11,760.00
22,074.11
Beijing Guchuan Rice Industry Co., Ltd Purchase of goods 139,190.30 31,372.00
Beijing Guchuan Food Co., Ltd Purchase of goods 6,374,564.09 7,084,342.52
Beijing heiliu animal husbandry technology Co.,
Purchase of goods 15,387.50 89,111.30
Ltd
Food center of Beijing heiliu animal husbandry
Purchase of goods 10,153.30 23,951.90
technology Co., Ltd
Beijing Huadu liquor Marketing Co., Ltd Purchase of goods 13,200.00 136,320.00
Beijing Jingliang Dongfang grain and Oil Trading
Purchase of goods 251,745.52 246,304.00
Co., Ltd
Beijing Liubiju Food Co., Ltd Purchase of goods 3,304.00 15,320.00
Beijing Longmen vinegar Co., Ltd Purchase of goods 290.00
Beijing Sanyuan Meiyuan Food Co., Ltd Purchase of goods 66,477.60 24,883.20
Beijing Sanyuan Food Co., Ltd Purchase of goods 100,874.00 196,816.00
Beijing Changyang farm Co., Ltd Purchase of goods 1,470.00
Sugar business branch of Beijing sugar tobacco &
Purchase of goods 678.90 430.90
Wine Group Co., Ltd
Beijing Yanqi Yueshengzhai Halal Food Co., Ltd Purchase of goods 993,596.60 280,682.00
Shandong Fukuan Bioengineering Co., Ltd Purchase of goods 489,983.19
Huairou branch of Beijing Yunong high quality
Purchase of goods 2,850.00
agricultural products planting Co., Ltd
Beijing shounong consumption assistance and
Purchase of goods 4,405.00
Innovation Center Co., Ltd
Chengde Sanyuan Jinxing duck industry Co., Ltd Purchase of goods 900.00
Total 8,735,137.55 8,468,881.42
(2) Sale of goods/ provision of labor services
Related-party
Related Party Current Amount Last Term Amount
Transaction
Beijing baijiayi Food Co., Ltd Sale of goods 588,600.00 468,970.00
Beijing North Jingtang foreign wine sales Co.,
Sale of goods 25,597.00 21,959.00
Ltd
Beijing shounong Flavor Industry Group Co.,
Sale of goods 31,138,627.74 43,848,848.09
Ltd
Beijing ershang Xijie Food Co., Ltd Sale of goods 1,701,284.40 928,990.83
Beijing ershang Jingshen seafood Co., Ltd Sale of goods 53,592.00
Beijing ershang Yihe Sunshine Real Estate Co.,
Sale of goods 49,620.00 23,880.00
Ltd
Beijing Guchuan Rice Industry Co., Ltd Sale of goods 154,817.50 631,349.72
Beijing Guchuan Food Co., Ltd Sale of goods 1,083,679.52 5,727,639.42
Beijing Hongyuan Lijun grain and oil supply
Sale of goods 221,000.00 417,500.00
Co., Ltd
Beijing Jingliang e-commerce Co., Ltd Sale of goods 723,045.08
Beijing Jingliang Dongfang grain and Oil
Sale of goods 2,807,978.31 4,665,430.59
Trading Co., Ltd
Beijing Jingliang Logistics Co., Ltd Sale of goods 92,140.00 86,554.91
Beijing Jingliang canal grain and Oil Trading
Sale of goods 38,502.00 119,432.07
Co., Ltd
Beijing junzhiyuan grain and oil purchase and
Sale of goods 624,175.00
sales Co., Ltd
Beijing Lanfeng Vegetable Distribution Co.,
Sale of goods 448,590.00
Ltd
Huairou brewery of Beijing Liubiju Food Co.,
Sale of goods 3,159,049.53 231,300.00
Ltd
Beijing Longmen vinegar Co., Ltd Sale of goods 201.83 6,600.00
Beijing Longsheng Zhongwang breakfast Co.,
Sale of goods 20,633.00
Ltd
Beijing celon International Cultural
Sale of goods 275.00
Development Co., Ltd
Beijing Sanyuan Food Co., Ltd Sale of goods 107,695.00 492,000.00
Feed branch of Beijing Sanyuan Seed
Sale of goods 26,720,100.70 27,347,850.05
Technology Co., Ltd
Beijing Beijiao farm Co., Ltd Sale of goods 5,818.00 1,000.00
Beijing Desheng Hotel Co., Ltd Sale of goods 73,930.00 32,557.03
Beijing Haidian Xijiao grain and oil supply
Sale of goods 2,820,200.00 1,799,085.28
station Co., Ltd
Beijing Huacheng Trading Co., Ltd Sale of goods 5,319.00
Beijing Liangguan grain and oil supply Co., Ltd Sale of goods 12,500.92
Beijing Longqing Xiadu military grain supply
Sale of goods 458,000.00 95,200.00
Co., Ltd
Beijing Maliandao grain and oil special supply
Sale of goods 77,000.00
station Co., Ltd
Beijing milk Co., Ltd Sale of goods 3,546.00
Beijing food supply department No. 34 supply
Sale of goods 1,007,533.90 2,497,733.27
department Co., Ltd
Beijing Yanqing farm Co., Ltd Sale of goods 14,998.35
Beijing zizibing grain and oil supply Co., Ltd Sale of goods 1,952,000.00 971,200.00
Beijing shounong Food Group Finance Co., Ltd Sale of goods 6,160.00
Beijing shounong Food Group Co., Ltd Sale of goods 27,269.73 637,256.86
Beijing shounong Xiangshan Conference
Sale of goods 7,560.00 5,328.00
Center Co., Ltd
Beijing shounong consumption assistance and
Sale of goods 6,262,107.00 5,051,520.00
Innovation Center Co., Ltd
Beijing Shuangta Green Valley Agriculture
Sale of goods 15,816.51
Co., Ltd
Beijing sugar tobacco & Wine Group Co., Ltd Sale of goods 4,400.00
Beijing Wuhuan Shuntong Supply Chain
Sale of goods 2,393,912.53 670,442.20
Management Co., Ltd
Beijing Zhujun grain and oil supply Co., Ltd Sale of goods 1,893,933.20 960,383.95
Hebei Luanping Huadu Food Co., Ltd Sale of goods 8,703,134.00 2,399,477.40
Hebei shounong Modern Agricultural
Sale of goods 10,909,242.63 10,400,433.52
Technology Co., Ltd
Jingliang diandaowang (Beijing) Trading Co.,
Sale of goods 250,655.29 7,884.00
Ltd
Shanghai shounong Investment Holding Co.,
Sale of goods 101,524,844.91 139,402.80
Ltd
Beijing Ai Lai FA Xi Food Co., Ltd Sale of goods 21,240.00
Beijing ershang Meat Food Group Co., Ltd Sale of goods 23,400.00
Beijing Grain Science Research Institute Co.,
Sale of goods 830.00
Ltd
Beijing xinderun Agricultural Tourism
Sale of goods 59,659.36
Development Co., Ltd
Daxing Branch of Beijing Yunong high quality
Sale of goods 59,975.70
agricultural products planting Co., Ltd
Huairou branch of Beijing Yunong high quality
Sale of goods 171,074.00
agricultural products planting Co., Ltd
Beijing Shoucheng Shanshui Real Estate Co.,
Sale of goods 114,935.00
Ltd
Beijing shounong Oriental Food Supply Chain
Sale of goods 1,038,926.00
Management Group Co., Ltd
Beijing shounong Development Co., Ltd Sale of goods 12,739.00
Beijing shounong commercial chain Co., Ltd Sale of goods 29.55
Beijing Taoshan Grain Reserve Co., Ltd Sale of goods 13,073.39
Beijing Xing Fashion Trading Co., Ltd Sale of goods 9,357.80
Shanghai shounong Investment Holding Co., Provision of
671,924.51
Ltd services
Total 208,839,787.38 112,233,671.50
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
Beijing Grain Group
House leasing Market price 580,000.00
Co., Ltd.
Beijing shounong Food
Emergency Support House leasing Market price 1,147,575.39 1,055,100.00
Center Co., Ltd
Beijing Nanyuan Plant
House leasing Market price 340,000.00
Oil Factory
Beijing Dahongmen
House leasing Market price 327,298.99 309,577.33
Foodstuff Storage
Beijing Shounong
House leasing Market price 1,774,606.64 255,583.71
Development Co., Ltd.
Total -- -- 3,249,481.02 2,540,261.04
(3)Related party guarantee
None.
(4)Remuneration for key management staff
Current Amount (Unit: ten Last Term Amount (Unit: ten
Item
thousand yuan) thousand yuan)
Remuneration for Key Management Staff 177.61 122.27
7. Related-party Receivables and Payables
(1) Receivables
Ending Balance Beginning Balance
Item Related-party Provision for Provision for
Book Balance Book Balance
Bad Debts Bad Debts
Monetary Beijing shounong Food
252,120,000.00 167,000,000.00
funds Group Finance Co., Ltd
Total 252,120,000.00 167,000,000.00
Feed Branch of Beijing
Receivables Sanyuan Seed Technology 3,571,012.53 3,000,236.98
Co., Ltd.
Beijing Shounong
Consumption Assistance
Innovation and 489,000.00 1,359,375.00
Entrepreneurship Center
Co., Ltd.
Beijing Guchun Food Co.,
66,800.00 1,260,000.00
Ltd
Shanghai Sunlon Investment
700,000.00 1,002,945.54
HOLDINGS Ltd.
Beijing Ershang Xijie
0.00 621,830.00
Foodstuff Co., Ltd.
Beijing Jingliang Dongfang
grain and Oil Trading Co., 865,555.00 584,491.00
Ltd
Hebei Shounong Modern
Agricultural Technology 920,472.30 369,525.30
Co., Ltd.
Beijing Zhujun grain and oil
398,880.00 261,500.00
supply Co., Ltd
Beijing baijiayi Food Co.,
144,000.00 196,800.00
Ltd
Beijing Dongfang
Agricultural Group Supply
517,020.00 161,106.00
Chain Management Co.,
Ltd.
Beijing Guchun rice Co.,
95.00 72,688.00
Ltd
Beijing Junyuan grain and
oil purchasing and 43,000.00
Marketing Co., Ltd
Beijing Ershang Yihe
Sunshine Real Estate Co., 12,540.00 15,520.00
Ltd.
Beijing Wuhuan Shuntong
Supply Chain Management 389,537.00
Co., Ltd
Beijing food supply
department No.34 supply 559,180.00
department Co., Ltd
Beijing zidibing grain and
425,600.00
oil supply Co., Ltd
Beijing Jingliang Logistics
22,000.00
Co., Ltd
Beijing Lanfeng Vegetable
161,660.00
Distribution Co., Ltd
Huairou brewery of Beijing
75,600.00
Liubiju Food Co., Ltd
Daxing Branch of Beijing
Yunong high quality
40,055.70
agricultural products
planting Co., Ltd
Huairou branch of Beijing
Yunong high quality
111,330.00
agricultural products
planting Co., Ltd
Beijing Shoucheng
Shanshui Real Estate Co., 114,935.00
Ltd
Hebei Luanping Huadu
2,421,086.40
Food Co., Ltd
Jingliang diandaowang
11,748.00
(Beijing) Trading Co., Ltd
Total 12,018,106.93 8,949,017.82
Prepaid Beijing ershang Jinghua Tea
24,450.00
Expenses Co., Ltd
Beijing shounong
1,263,919.08
Development Co., Ltd
Total 1,288,369.08 0.00
(2) Payables
Beginning balance
Item Related-party Ending Balance
Shanghai Sunlon Investment HOLDINGS
Contract liability 11,871.05 3,943,587.12
Ltd.
Beijing shounong commercial chain Co.,
633.20
Ltd
ToTal
12,504.25 3,943,587.12
Beijing Guchun Food Co., Ltd
Payables 187,818.33 358,762.54
Beijing Er Shang Mo Qi Zhong Hong
7,646.02 382.30
Foods Co., Ltd.
Beijing Jingliang Dongfang grain and Oil
294.51
Trading Co., Ltd
Beijing Sanyuan Meiyuan Food Co.,
2,548.67 31.19
Ltd
Beijing Sanyuan Food Co., Ltd
50,169.51
Beijing Guchuan Rice Co., Ltd
11,345.87
Beijing shounong Food Emergency
1,055,100.00
Support Center Co., Ltd
Total
1,314,628.40 359,470.54
Beijing Grain Group Co., Ltd.
Other payables 2,810,527.27 2,819,620.39
Shanghai Sunlon Investment HOLDINGS
2,591,003.45
Ltd.
Beijing Nanyuan vegetable oil factory Co.,
311,926.61 311,926.61
Ltd
Beijing Jingliang e-commerce Co., Ltd
93,350.40
Hebei Sanyuan Food Co., Ltd
50,000.00
Beijing Guchuan Food Co., Ltd
4,288,911.00
Kangtai culture branch of Beijing ershang
210.00
Group Co., Ltd
ToTal
7,554,925.28 5,722,550.45
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
After this guarantee, the company and its holding subsidiaries guarantee an estimated amount of 6.021 billion
yuan, of which the total amount of guarantee signed by the company and its holding subsidiaries within the guarantee
period is 3.535 billion yuan, and the actual amount of guarantee by the company and its holding subsidiaries is
1.224 billion yuan, accounting for 40.95% of the company's latest audited net assets. These are guarantees between
the company and its holding subsidiaries. The company and its holding subsidiaries do not provide guarantees to
units outside the consolidated statements, and the company does not have overdue external guarantees, guarantees
involving litigation and losses due to the judgment of losing the guarantee.
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
The Company's businesses consist of food processing, oil and grease and so on according to its internal
organizational structure, management requirements and internal reporting system. The Company's management
regularly evaluates the operating results of these divisions to determine the allocation of resources to them and
evaluate their performance. The information reported by divisions should be disclosed according to the accounting
policies and measurement standards adopted by such divisions when they are reporting to the management. These
measurement bases should be consistent with the accounting and measurement bases for preparation of financial
statements.
(2) Reporting of the financial information of divisions
Offset Among
Item Food Processing Oil & Grease Other Total
Dvisions
Operating income 459,469,664.64 5,052,926,055.72 385,549.96 0.00 5,512,781,270.32
Operating costs 362,668,111.26 4,911,517,308.09 178,673.31 0.00 5,274,364,092.66
Operating profit 51,248,223.29 64,454,408.64 -165,706.23 0.00 115,536,925.70
Net profit attributable to
39,038,580.53 33,560,383.09 -259,033.47 568,400.00 72,908,330.15
parent company
Total assets 1,076,156,547.02 5,808,478,780.14 2,935,576,771.91 -2,836,722,134.61 6,983,489,964.46
Total liabilities 135,434,803.38 3,601,600,318.19 50,721,414.84 -202,284,288.37 3,585,472,248.04
3. Lease
The lessee shall disclose the following information in relation with the lease.
Item Amount
Interest expense 61,628.14
Short-term lease payments charged to current profit or loss 3,244,651.90
Lease costs for low-value assets recognized in current profit
72,832.49
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 3,141,766.94
Gains and losses related to sale and leaseback transactions
XVI. Notes to Main Financial Statement Items of Parent Company
1. Accounts Receivable
（1）Disclosed according to aging
Aging Ending Balance
Within 1 Year (including 1 year)
Among them: Within credit period (within 3 months)
Credit period to 1 year
1 to 2 years (including 2 years)
2 to 3 years (including 3 years)
3 to 4 years (including 4 years)
4 to 5 years (including 5 years)
Aging Ending Balance
More than 5 years 108,000.00
Sub-total 108,000.00
Less: Allowance for bad debts 108,000.00
Total -
（2）Disclosed 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
Portfolio provision for bad debts 108,000.00 100.00 108,000.00 100.00 --
Among them: Portfolio 1 108,000.00 100.00 108,000.00 100.00 --
Total 108,000.00 -- 108,000.00 -- --
（Continued）
Beginning Balance
Type(s) Book Balance Bad Debt Provision
Provision Book Value
Amount Ratio(%) Amount
Ratio(%)
Separate provision for bad debts
Portfolio provision for bad debts 108,000.00 100.00 107,400.00 99.44 600.00
Among them: Portfolio 1 108,000.00 100.00 107,400.00 99.44 600.00
Total 108,000.00 -- 107,400.00 -- 600.00
Portfolio provision for bad debts:
Portfolio provision item: aging portfolio
Ending Balance Beginning Balance
Name Accounts Bad Debt Provision Accounts Bad Debt Provision
receivable Provision Ratio receivable Provision Ratio
Within 1 Year (including 1
year)
Among them: Within the
credit period (within 3
months)
Credit period to 1 year
1 to 2 years (including 2
years)
2 to 3 years (including 3
years)
3 to 4 years (including 4
years)
4 to 5 years (including 5
3,000.00 2,400.00 80.00
years)
More than 5 years 108,000.00 108,000.00 100.00 105,000.00 105,000.00 100.00
Ending Balance Beginning Balance
Name Accounts Bad Debt Provision Accounts Bad Debt Provision
receivable Provision Ratio receivable Provision Ratio
Total 108,000.00 108,000.00 108,000.00 107,400.00 --
(3) Details of bad debt provision
Carrying Amount changes for the period
Carrying amount
Type amount at the Addition Withdrawal Write-off Other
at the end
beginning or reversal changes
Bad debt 107,400.00 600.00 108,000.00
provision
Total 107,400.00 600.00 108,000.00
(4) Accounts receivable actually written off in the current period
The parent company has no written off accounts receivable in the reporting period.
(5) Accounts Receivable of the Top 5 Balances Collected by Debtors at the End of the Period
Ratio of the total balance
Is it Bad debt
Debtors Book balance of accounts Aging
related provision
receivable(%)
Hainan Pearl River Pipe Pile
108,000.00 100.00 Over 5 years No 108,000.00
Co. LTD
Total 108,000.00 100.00 —— —— 108,000.00
2. Other Receivables
A. Overview
(1) Classification
Item Ending Balance Beginning Balance
Interest receivable
Dividends receivable
Other receivables 179,000,000.00 180,000,000.00
Total 179,000,000.00 180,000,000.00
2. Other Receivables
(1) Disclosed according to aging
Aging Ending Balance
Within 1 Year (including 1 year) 179,000,000.00
Among them: Within credit period (within 3 months)
Credit period to 1 year 179,000,000.00
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 93,197.85
Aging Ending Balance
Sub-total 179,093,197.85
Less: Allowance for bad debts 93,197.85
Total 179,000,000.00
(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 179,000,000.00 180,000,000.00
Employee Receivables
Personal Intercourse Funds
Petty Cash 93,197.85 93,197.85
Others
Total 179,093,197.85 180,093,197.85
(3) Details about allowance for bad debt
Stage 1 Stage 2 Stage 3
Expected Expected credit loss Expected credit loss
Provision for bad debt credit loss in for the whole period for the whole period Total
the next 12 (no credit (with credit
months impairment) impairment)
Amount on January 1, 2022 93,197.85 93,197.85
Carrying amount on January
-
1, 2022 during this period:
——Get into Stage 2 -
——Get into Stage 3 -
——Get back to Stage 2 -
——Get back to Stage 1 -
Provision for the period -
Reverse for the period -
Transfer for the period -
Write off for the period -
Other changes -
Balance at June 30th, 2022 93,197.85 - - 93,197.85
(4) Details of bad debt provision
Carrying Amount changes for the period Carrying
Type amount at the Withdrawal Other amount at
Addition Write-off
beginning or reversal changes the end
Bad debt
93,197.85 93,197.85
provision
Total 93,197.85 93,197.85
(5)Other receivables actually written off in the current period
There are no other receivables actually written off in the current period.
(6) Other receivables according to top five of balance at end of period collected by debtors
Proportion in overall Ending balance
Name of Balance at End of
Nature of Funds Aging ending balance of of bad debt
Organization Period
other receivables (%) reserves
Beijing Jingliang Related party Within 1
179,000,000.00 99.948
Food Co., Ltd borrowing year
Over 5
Yan Yan Reserve fund 46,000.00 0.026 46,000.00
years
Over 5
Pai Feng Reserve fund 26,671.80 0.015 26,671.80
years
Over 5
Zhongwei Cui Reserve fund 14,007.40 0.008 14,007.40
years
Over 5
Xiaohong Liu Reserve fund 5,170.00 0.003 5,170.00
years
Total —— 179,091,849.20 —— 100.00 91,849.20
3. Long-term Equity Investment
Ending Balance Beginning Balance
Provisi Provisio
Item on for n for
Book Balance Book Value Book Balance Book Value
Impair Impair
ment ment
Investment in
2,634,437,846.24 2,634,437,846.24 2,626,437,846.24 2,626,437,846.24
subsidiaries
Total 2,634,437,846.24 2,634,437,846.24 2,626,437,846.24 2,626,437,846.24
(1)Investment in subsidiaries
Ending
Current
Balance of
Current Current Provision
Invested Entity Beginning Balance Ending Balance Provision
Increase Decrease for
for
Impairment
Impairment
Beijing Jingliang Food
2,336,639,964.05 2,336,639,964.05
Co., Ltd.
Zhejiang little prince
249,017,319.14 249,017,319.14
Food Co., Ltd
Jingliang rural
complex construction
15,280,563.05 15,280,563.05
and operation (Xinyi)
Co., 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 2,626,437,846.24 8,000,000.00 2,634,437,846.24
4. Operating income and operating costs
1. Details of operating income and operating costs
Current Amount Last Term Amount
Item
Income Cost Income Cost
Core business
Other businesses 382,744.96 170,581.26 295,530.28 170,581.26
Total 382,744.96 170,581.26 295,530.28 170,581.26
5. Income from investment
Sources of investment income Current Amount Last Term Amount
Long term equity investment income calculated by cost method
Others -28,691.03
Total -28,691.03
XVII. Supplementary Information
1. According to the requirements of the CSRC's "Explanatory Announcement on Information
Disclosure of Companies Publicly Issuing Securities No. 1 - Non-recurring Gains and Losses", the non-
recurring gains and losses during the reporting period shall be reported
1. Details of non-recurring profit and loss in the reporting period
Details of non-recurring profit and loss Amouont Note
(1) Gains and losses on disposal of non current assets 441,741.39
(2) Government subsidies included in the current profits and losses (closely
related to the business of the enterprise, except the government subsidies 1,479,341.13
enjoyed according to the national unified standard quota or quantitative)
(3) In addition to the effective hedging business related to the normal
business of the company, the profit and loss from changes in fair value
arising from holding trading financial assets, derivative financial assets,
trading financial liabilities and derivative financial liabilities, as well as the 418,083.33
investment income from the disposal of trading financial assets, derivative
financial assets, trading financial liabilities, derivative financial liabilities
and other debt investments
(4) Other non-operating income and expenses other than the above 116,887.91
(5) Other profit and loss items that meet the definition of non recurring
profit and loss
Total non recurring profit and loss 2,456,053.76
Less: amount affected by income tax 615,013.94
Non recurring profit and loss after deducting the influence of income tax 1,841,039.82
Including: non recurring profit and loss attributable to the owner of the
1,642,590.68
parent company
Non recurring profit and loss attributable to minority shareholders 198,449.14
2. Return on equity and earnings per share
EPS
Current Profit Weighted Return on Average Equity (ROAE) (%) Basic Diluted
EPS EPS
Net profit attributable to the Company's
common shareholders 2.47 0.10 0.10
Net profit attributable to common shareholders
after deduction of non-recurring gains and 2.41 0.10 0.10
losses
Hainan Jingliang Holdings Co., Ltd.
August 23rd, 2022
