Shandong Zhonglu Oceanic Fisheries Co., Ltd.
Annual Report of 2023
[Time of Disclosure]
Annual Report of 2023
Section I Important Information, Contents, and Definitions
The Company’s Board of Directors, Board of Supervisors, directors,
supervisors, and officers ensure that the content of this annual report is true,
accurate, and complete without any false record, misleading statement, or
significant omission and bear joint and several legal liability.
Liang Shanglei, the principal of the Company, Fu Chuanhai, the person in
charge of accounting, and Lei Lixin, the person in charge of the accounting body
(accounting supervisor), declare that the financial report in this annual report is
true, accurate, and complete.All directors attended the Board meeting at which
this report was considered.
Prospective statements involving the Company’s future plans in this annual
report shall not constitute the Company’s material promises for investors.
Investors and relevant personnel shall have an adequate understanding of the
risks and understand the differences among plans, forecasts, and promises.
The Company describes potential risks in its operations and
countermeasures in “XI. Prospect of the Company’s Future Development” in
Section III, “The Management’s Discussion and Analysis.” Investors are
reminded to pay attention to the relevant content.
This report is prepared in Chinese and English. Where the Chinese and
English texts are interpreted in different ways, the Chinese text shall prevail.
The Company plans not to distribute cash dividends, not to distribute
bonus shares, and not to convert reserves into share capital.
Contents
Section I Important Information, Content, and Definitions..................................................................................2
Section II Section II Company Introduction and Key Financial Indicators...........................................................6
Section III The Management's Discussion and Analysis......................................................................................11
Section IV Corporate Governance........................................................................................................................28
Section V Environmental and Social Responsibility............................................................................................44
Section VI Important Matters...............................................................................................................................46
Section VII Changes in Shares and Information on Shareholders.......................................................................53
Section VIII Preferred Shares...............................................................................................................................59
Section IX Bonds..................................................................................................................................................60
Section X Financial Report...................................................................................................................................61
List of Documents for Reference
(I) Financial statements with the signatures of the principal of the Company, the person in charge of accounting, and the person
in charge of the accounting body and affixed with the Company’s seal.
(II) The original of the audit report affixed with the accounting firm’s seal and the certified public accountant’s signature and
seal.
(III) The originals of all corporate documents and the manuscripts of all announcements disclosed during the Reporting Period.
(IV) The text of the Company’s annual report for 2023 with the signature of the legal representative.
Definitions
Term Refers to Content
The Company, Company, or Zhonglu Oceanic Refers to Shandong Zhonglu Oceanic Fisheries Co., Ltd.
Shandong Guotou Refers to Shandong State-owned Assets Investment Holdings Co., Ltd.
Shandong Provincial State-owned Assets Supervision and
Provincial SASAC Refers to
Administration Commission
CSRC Refers to China Securities Regulatory Commission
This report Refers to The annual report of 2023 prepared by the Company
Zhonglu Haiyan Refers to Shandong Zhonglu Haiyan Oceanic Fisheries Co., Ltd.
Zhonglu Food Refers to Shandong Zhonglu Oceanic (Yantai) Food Co., Ltd.
Section II Company Introduction and Key Financial Indicators
I. Company’s Information
Short stock name Zhonglu B Stock code 200992
Securities exchange where the
Shenzhen Stock Exchange
stocks are listed
Chinese name 山东省中鲁远洋渔业股份有限公司
Short Chinese name 中鲁远洋
Foreign name (if any) Shandong Zhonglu Oceanic Fisheries Company Limited
Acronym of the foreign name
ZLYY
(if any)
Legal representative Liang Shanglei
Registered address 29 Miaoling Road, Laoshan District, Qingdao, Shandong
Postal code of the registered
266061
address
Historical changes of the 57 Lishan Road, Jinan, Shandong→43 Heping Road, Jinan, Shandong→29 Miaoling Road,
Company’s registered address Laoshan District, Qingdao, Shandong
Office address 31 Xianxialing Road, Laoshan District, Qingdao, Shandong
Postal code of the office
266061
address
Website http://www.zofco.cn/
Email zl000992@163.com
II. Contact Person and Contact Information
Board Secretary Securities Affairs Representative
Name Liang Shanglei Tang Yuntao
25th Floor, Building 1, Guoxin Financial Center, No. 31 25th Floor, Building 1, Guoxin Financial Center, No. 31
Address
Xianxialing Road, Laoshan District, Qingdao, Shandong Xianxialing Road, Laoshan District, Qingdao, Shandong
Tel 0532-55717968 0532-55715968
Fax 0532-55719258 0532-55719258
Email zl000992@163.com zl000992@163.com
III. Information Disclosure and Place of Report Storage
Stock exchange website where the Company discloses the annual report China Securities Journal
Media name and website where the Company discloses the annual report CNINFO http://www.cninfo.com.cn
Place of annual report storage Company’s Board Office
IV. Registration Changes
Unified Social Credit Code 91370000863043102Y
(1) On July 14, 2000, the Company’s business scope changed from “high sea and
long range fishing; the culture, processing, and sales of aquatic products; the import
and export of commodities within the approved scope; the manufacture and sales of
Changes in the Company’s main machine-made ice; the manufacture, installation, and repair of refrigeration
businesses since listing (if any) equipment” to “high sea and long range fishing; the culture, processing, and sales of
aquatic products; the import and export of commodities within the approved scope;
the manufacture and sales of machine-made ice; the manufacture, installation, and
repair of refrigeration equipment; the leasing of refrigeration storage.” (2) On
November 30, 2000, the Company’s business scope changed from “high sea and long
range fishing; the culture, processing, and sales of aquatic products; the import and
export of commodities within the approved scope; the manufacture and sales of
machine-made ice; the manufacture, installation, and repair of refrigeration
equipment; the leasing of refrigeration storage” to “high sea and long range fishing;
the culture, processing, and sales of aquatic products; the import and export of
commodities within the approved scope; the manufacture and sales of machine-made
ice; the manufacture, installation, and repair of refrigeration equipment; refrigeration
and cold storage.” (3) On May 28, 2002, the Company’s business scope changed
from “high sea and long range fishing; the culture, processing, and sales of aquatic
products; the import and export of commodities within the approved scope; the
manufacture and sales of machine-made ice; the manufacture, installation, and repair
of refrigeration equipment; refrigeration and cold storage” to “high sea and long
range fishing; the culture, processing, and sales of aquatic products; the import and
export of commodities within the approved scope; the manufacture and sales of
machine-made ice; the manufacture, installation, and repair of refrigeration
equipment; refrigeration and cold storage; loading, unloading, and handling
services.” (4) On June 6, 2006, the Company’s business scope changed from “high
sea and long range fishing; the culture, processing, and sales of aquatic products; the
import and export of commodities within the approved scope; the manufacture and
sales of machine-made ice; the manufacture, installation, and repair of refrigeration
equipment; refrigeration and cold storage; loading, unloading, and handling services”
to “high sea and long range fishing; the processing and sales of aquatic products; the
import and export of commodities within the approved scope; the manufacture and
sales of machine-made ice; the manufacture, installation, and repair of refrigeration
equipment; refrigeration and cold storage; loading, unloading, and handling
services.” (5) On May 16, 2007, the Company’s business scope changed from “high
sea and long range fishing; the processing and sales of aquatic products; the import
and export of commodities within the approved scope; the manufacture and sales of
machine-made ice; the manufacture, installation, and repair of refrigeration
equipment; refrigeration and cold storage; loading, unloading, and handling services”
to “high sea and long range fishing; the processing and sales of aquatic products; the
import and export of commodities within the approved scope; the manufacture and
sales of machine-made ice; the manufacture, installation, and repair of refrigeration
equipment; refrigeration and cold storage; loading, unloading, and handling services;
property leasing.”
In December 2006, 88,000,000 shares of the Company held by Shandong
Aquaculture Enterprise Group as a state-owned legal person were transferred to
Shandong Guotou through judicial auction procedures and a court ruling. On June
21, 2007, Shandong Guotou received the Confirmation of Transferred Ownership
Registration from China Securities Depository and Clearing Co., Ltd. Shenzhen
Branch, which stated that the transfer procedures had been completed. By then,
Shandong Guotou held 88,000,000 shares of the Company as a state-owned legal
person, accounting for 33.07% of the Company’s total share capital. On July 20,
Changes in the controlling shareholder (if
2018, Shandong Guotou signed the Agreement for the Share Transfer of Shandong
any)
Zhonglu Oceanic Fisheries Co., Ltd. with Lucion Group to receive 37,731,320 shares
held by Lucion Group as a state-owned legal person, accounting for 14.18% of the
Company’s total share capital. On November 16, 2018, Shandong Guotou received
the Confirmation of Transferred Securities Ownership Registration, which stated that
the transfer procedures had been completed. As of December 31, 2022, Shandong
Guotou held 125,731,320 shares of the Company as a state-owned legal person,
accounting for 47.25% of the Company’s total share capital. Hence, Shandong
Guotou became the Company’s controlling shareholder.
V. Other Relevant Information
Accounting firm engaged by the Company
Name of accounting firm Shangkuai Certified Public Accountants (special general partnership)
Office address Floor 25, 755 Weihai Road, Jing’an District, Shanghai
Names of signatory accountants Xu Mao, Ma Haijun
Sponsor institution engaged by the Company to perform continuous supervision during the Reporting Period
□Applicable Not applicable
Financial adviser engaged by the Company to perform continuous supervision during the Reporting Period
□Applicable Not applicable
VI. Key Accounting Data and Financial Indicators
Whether the Company is required to make retroactive adjustments or restate the accounting data for previous years
□Yes No
2023 2022 Increase/Decrease 2021
Operating revenue
1,145,252,422.09 985,428,305.37 16.22% 934,284,403.21
(RMB)
Net profits attributable
to the Company’s 39,599,325.61 30,239,511.38 30.95% 35,526,982.23
shareholders (RMB)
Net profits attributable
to the Company’s
shareholders after 34,139,489.17 22,593,100.41 51.11% 30,732,469.56
deducting nonrecurring
items (RMB)
Net cash flows from
operating activities 81,536,757.82 12,732,673.10 540.37% 169,895,824.82
(RMB)
Base earnings per share
0.1488 0.1137 30.87% 0.1355
(RMB/share)
Diluted earnings per
0.1488 0.1137 30.87% 0.1355
share (RMB/share)
Weighted average
3.93% 3.12% 0.81% 3.87%
return on equity
At the end of 2023 At the end of 2022 Increase/Decrease At the end of 2021
Total assets (RMB) 2,048,135,067.78 1,838,429,134.17 11.41% 1,400,134,960.71
Net assets attributable
to the Company’s 1,029,594,896.14 987,072,734.95 4.31% 933,535,874.90
shareholders (RMB)
The lower values of the Company’s net profits before and after deducting nonrecurring items for the last three accounting years are
all negative, and the audit report for the last one year shows that there are uncertainties in the Company’s sustainable operation ability.
□Yes No
The lower of the net profits before and after deducting nonrecurring items is negative
□Yes No
VII. Differences in Accounting Data under Domestic and Foreign Accounting Standards
1. Differences in net profits and net assets in the financial report disclosed both according to international
accounting standards and Chinese accounting standards
□Applicable Not applicable
For the Company, there was no difference in net profits and net assets in the financial report disclosed both according to international
accounting standards and Chinese accounting standards during the Reporting Period.
2. Differences in net profits and net assets in the financial report disclosed both according to overseas
accounting standards and Chinese accounting standards
□Applicable Not applicable
For the Company, there was no difference in net profits and net assets in the financial report disclosed both according to overseas
accounting standards and Chinese accounting standards during the Reporting Period.
VIII. Key Financial Indicators by Quarter
Unit: RMB
Q1 Q2 Q3 Q4
Operating revenue 225,222,371.08 228,996,893.12 253,823,146.01 437,210,011.88
Net profits attributable
to the Company’s -3,004,775.96 -7,196,557.06 39,311,407.36 10,489,251.27
shareholders
Net profits attributable
to the Company’s
shareholders after -3,969,137.32 -8,277,290.19 38,095,318.72 8,290,597.96
deducting nonrecurring
items
Net cash flows from
-26,490,464.03 -27,975,495.58 68,651,807.38 67,350,910.05
operating activities
Whether the above financial indicators or the sum of them are significantly different from the quarterly reports or semi-annual reports
disclosed by the Company
□Yes No
IX. Nonrecurring Items and Amounts
Applicable □Not applicable
Unit: RMB
Item Amount for 2023 Amount for 2022 Amount for 2021 Remark
Gains or losses from
the disposal of non-
current assets
(including the write- -84,285.00 5,068,847.43 3,494,326.93
offs for which the asset
impairment provision
was accrued)
Government subsidies
recognized in the profit
or loss (excluding
government subsidies
3,914,296.75 2,140,540.56 2,484,454.50
that are closely
associated with the
Company’s ordinary
course of business,
comply with national
policies, are enjoyed
according to
established standards,
and have continuous
effects on the
Company’s profit or
loss)
Gains or losses from
fair value change
arising from the
financial assets and
financial liabilities held
by non-financial
businesses and gains or
losses from the -79,486.61 1,172,034.24 49,972.60
disposal of financial
assets and financial
liabilities, except for
effective hedging
business related to the
Company’s ordinary
course of business
Profit/loss on debt
-127,527.03
restructuring
Trustee income from
1,698,113.20 1,273,584.91
trusteeship
Other non-operating
incomes and
1,583,319.90 117,625.16 798,473.53
expenditures than the
above
Less: amount of the
286,560.82 1,587,719.20 1,086,874.90
effect of the income tax
amount of the effect of
the minority interest 1,285,560.98 538,502.13 818,312.96
(after tax)
Total 5,459,836.44 7,646,410.97 4,794,512.67 --
Details of other profit/loss items that conform to the definition of nonrecurring items:
□Applicable Not applicable
For the Company, there was no detail of other profit/loss items that conform to the definition of nonrecurring items.
Explanation of the situation where the nonrecurring items listed in the Explanatory Announcement No. 1 on Information Disclosure
for Companies Offering Their Securities to the Public - Nonrecurring Items are defined as recurring items
□Applicable Not applicable
The Company had no situation where it defined the nonrecurring items listed in the Explanatory Announcement No. 1 on Information
Disclosure for Companies Offering Their Securities to the Public - Nonrecurring Items as recurring items.
Section III The Management’s Discussion and Analysis
I. Overview of the Company’s Industry during the Reporting Period
Overview of the Company’s industry: According to the statistics of the State Council Information Office, China had 177
approved enterprises and 2,551 vessels (including 1,498 high seas fishing vessels) in the distant-water fishing industry in 2022,
which operated in the high seas of the Pacific, Indian and Atlantic oceans, and the seas around Antarctica, as well as in the waters
under the jurisdiction of cooperating countries. Overseas fishing is China’s strategic industry and plays an important role in building
a "maritime community with a shared future" and "a strong marine country" and implementing the strategy of "going global" and the
"Belt and Road" initiative. It has great significance for increasing the supply of high-quality domestic and foreign aquatic products,
ensuring food safety, and promoting bilateral and multilateral cooperation in the fishery. China’s overseas fishing started in 1985,
and China has become one of the world’s major overseas fishing countries over more than three decades of development. Its
operation seas include seas in the exclusive economic zones of more than 40 countries, the high seas in the Pacific, Atlantic, and
Indian Oceans, as well as the seas in Antarctica. Climbing to the world’s top in size, China’s overseas fishing industry is
characterized by a gradually improving industrial structure, substantially improved equipment, much stronger scientific and
technological support, and an ever-improving management system. It is developing towards "transformation, upgrading, and
standardized management." However, in terms of scientific and technological support and the ability to develop and utilize
comprehensive resources, China remains in a lower position with a big gap from advanced countries. Meanwhile, negative factors
such as the rapidly rising costs of human resources and the shortage of workers for the industry, in particular crew members, are
expected to disturb the development of long range fishing on a long-term basis. Companies need to continuously increase spending
on science and technology, accelerate transformation and upgrading, and improve their core competitiveness to actively respond to
fast-changing industrial developments.
Currently, China’s tuna market is witnessing soaring demand in coastal cities, including Beijing, Shanghai, and Guangzhou. In
addition, the consumption potential of the inland market is also boosted to form a large market. It is foreseeable that China’s tuna
consumption is bound to increase rapidly in the future with growing living standards and as people shift their focus from eating
enough and high-quality food to eating nutritious and healthy food. China will resolutely implement new development concepts in
the development of the marine economy and develop the marine industry into a high-end, clustered, international, information-based,
and intelligent industry through scientific and technological innovation. This will inject strong forces into the sustainable
development of the domestic tuna market. For Zhonglu Oceanic, a company that always focuses on the marine economy and upholds
a sustainable development strategy, the macroeconomic policies of China will definitely help it achieve stronger development in the
future.
II. Company’s Main Businesses during the Reporting Period
During the Reporting Period, the Company’s main businesses included long range fishing, cold storage transportation, and cold
storage processing and trading. These businesses rely on and promote each other, forming a complete industrial chain.
1. Long range fishing
During the Reporting Period, the Company had 27 distant-water fishing boats, including 14 large ultra-low temperature tuna
longliners, nine (sets of) large tuna seiners, two medium-sized trawlers, and two squid fishing boats, in 2023, the Company’s
production in the cooperating zones was good, representing a substantial increase compared with the corresponding period in the
prior year. (2) The Company carried out seining in the Atlantic and the Western-central Pacific; seven (sets of) seiners operated in the
Atlantic, which brought considerable production; the other two boats that were built in the year were put into production in the
Western-central Pacific, which brought steadily increasing production. (3) Production by the two squid fishing boats decreased as it
took a long time for them to transfer to different fisheries in the first half of 2023. (4) The Company’s trawlers were undergoing
replacement and thus did not carry out production.
2. Cold storage transportation
During the Reporting Period, the Company’s eight large distant-water transportation vessels are equipped with advanced
equipment, feature good performance, and provide standard services under strict management. They are suitable for the distant-water
frozen and cold storage transport of aquatic products, meat, poultry, vegetables, and fruits. The vessels provide services to some seas
and ports in the Western-central Pacific, the Indian Ocean, the Atlantic, and North and South America. The vessels were focused on
their main responsibilities and businesses, upheld the principles of stability and strictness, and continuously improved leadership,
staff management, and professional skills. They prioritized the development of a talent team and deepened the “introduction,
cultivation, utilization, and retention” of talents. In terms of safety, the vessels strengthened awareness of the bottom line of
production safety and consolidated the defense line according to high standards and strict requirements to achieve positive
interactions between high-quality development and high-level security.
3. Cold storage processing and trade
The Company’s cold storage processing and trade segment during the Reporting Period: Despite the fact that the pandemic was
over, due to the impact of a combination of factors, including political factors, market factors, and consumption concepts, the price of
raw materials plunged, and the inventory on the international consumption market continued to grow without being consumed. The
Company strengthened efforts to develop the market and expand its business volume. More than 20 tuna species were processed in
this segment, including yellowfin tuna, bluefin tuna, longfin tuna, swordfin tuna, redfin tuna, and blackfin tuna. They were processed
into tuna slices, chops, and plates. The products were mostly exported to Japan, Russia, the European Union, and South Korea. The
Company has passed the HACCP, EU, BRC, MSC, and BSCI certifications. For domestic sales, the Company promotes “custom
services” offline, develops “popular science + publicity” online, accelerates the development of “brand + innovation” dual drivers,
and upgrades its business throughout the whole industrial chain of “fishing, transportation, storage, and supply.” The Company
combines tuna fish with “industrial tourism” to form the “tourism + promotion” new marketing model.
Business model: The Company conducts business in a centralized and diversified manner.
Market position: the vice-presidential unit of the China Overseas Fisheries Association and the presidential unit of the Qingdao
Overseas Fisheries Association.
III. Analysis of Core Competitiveness
The Company is a comprehensive and export-oriented company engaged in overseas fishing that was incorporated in July 1999
with the approval of the Shandong Provincial People’s Government. It has a well-established industrial chain and is a leading
enterprise in Shandong’s overseas fishing industry. As a comprehensive listed fishing company, the Company’s core competitiveness
lies in the following aspects: (1) Through more than 20 years of development, the Company has grown into a comprehensive fishing
enterprise that is engaged in a combination of businesses, including overseas fishing, deep processing, trading, cold storage logistics,
marine transportation, the development and production of marine biomedicines, and entrepreneurship and investment in the modern
marine industry. The Company’s main businesses involve key links in the industrial chain. The businesses of the Company’s
operating entities are highly associated, which meets the conditions for holistically collaborative operations. This provides a
guarantee for the Company to reform its operations and strengthen and extend the industrial chain. (2) As one of the earliest
companies engaged in overseas fishing in China, the Company started production and operations early from a high ground with
competent human resources and assets. Through years of dedicated operations, the Company has gathered a pool of professionals
specializing in relevant fields of the overseas fishing industry. (3) The Company’s overseas fishing industry is part of China’s
strategy of "going global" and building a strong marine country, and Shandong’s strategy of building a strong marine province. There
are development opportunities from the adjustment of the industrial depth. The Company has 14 ultra-low temperature tuna fishing
boats engaged in the longline fishing of tuna in the Indian Ocean. This is one of the Company’s main businesses, making outstanding
contributions to the Company’s business performance over the years. With the protection under the rigorous rules of international
organizations in all the regions, the tuna seining project will enable the Company to achieve stable development in its tuna seining
business. (4) Over 30 years of the cultivation of the international marine cold storage market, the Company has established long-term,
stable cooperation with many countries and regions, including China, Thailand, the Philippines, Vietnam, Mexico, Ecuador, and
Taiwan of China, built a service brand with distinctive “Zhonglu characteristics,” and enjoyed a good reputation on the Asia-Pacific
marine cold storage transport market. (5) The Company has the earliest and largest ultra-low temperature refrigeration storage and
raw food processing plant in China. Also, the China Tuna Exchange and the newly built electronic tuna trading platform system
strengthen the Company’s advantages in tuna processing and trading. (6) The Company carries out long range fishing in the Atlantic,
Indian Oceans and Western-central Pacific, reaches most of the world’s major ports with its cold storage transportation, and covers
many countries with import and export. With the implementation of the “Belt and Road” strategy, the countries along the “Belt and
Road” will have stronger trust in each other and establish closer cooperation. In addition, the Company and the governments at all
levels have rolled out a suite of development plans and industrial preference policies. All these have brought new opportunities for
the development of the Company.The Company will leverage the aforementioned advantages to pioneer, innovate, forge ahead, and
proactively engage itself in the conversion of old and new growth drivers. It will accelerate strategic transformation, vigorously
extend the industrial chain, and further improve its influence and competitiveness in domestic and even international markets.
IV. Analysis of Main Businesses
1. Overview
Refer to “II.Company’s Main Businesses during the Reporting Period” in “Section III The Management’s Discussion and
Analysis.”
2. Revenue and cost
(1) Components of operating revenue
Unit: RMB
2023 2022
Proportion in Year-on-year
Proportion in increase/decrease
Amount operating Amount
operating revenue
revenue
Total operating
1,145,252,422.09 100% 985,428,305.37 100% 16.22%
revenue
By industry
Long range fishing 587,596,974.83 51.31% 397,948,714.28 40.38% 47.66%
Cold storage
133,990,730.81 11.70% 104,833,584.94 10.64% 27.81%
transportation
Cold storage
processing and 484,346,724.57 42.29% 530,394,523.46 53.82% -8.68%
trading
Others 7,275,475.75 0.64% 6,206,115.41 0.63% 17.23%
Offset of internal
-67,957,483.87 -5.93% -53,954,632.72 -5.48% 25.95%
transactions
By product
Long range fishing 587,596,974.83 51.31% 397,948,714.28 40.38% 47.66%
Cold storage
133,990,730.81 11.70% 104,833,584.94 10.64% 27.81%
transportation
Cold storage
processing and 484,346,724.57 42.29% 530,394,523.46 53.82% -8.68%
trading
Others 7,275,475.75 0.64% 6,206,115.41 0.63% 17.23%
Offset of internal -67,957,483.87 -5.93% -53,954,632.72 -5.48% 25.95%
transactions
By region
China 674,787,548.22 58.92% 614,027,918.84 62.31% 9.90%
Foreign countries 538,422,357.74 47.01% 425,355,019.25 43.16% 26.58%
Offset of internal
-67,957,483.87 -5.93% -53,954,632.72 -5.48% 25.95%
transactions
By sales model
Direct sales 1,145,252,422.09 100.00% 985,428,305.37 100.00% 16.22%
(2) Industries, products, regions, sales models accounting for more than 10% of the Company’s operating revenue or
operating profits
Applicable □Not applicable
Unit: RMB
Year-on-year Year-on-year Year-on-year
Gross
increase/decrea increase/decrea increase/decrea
Operating revenue Operating costs profit
se in operating se in operating se in gross
margin
revenue costs profit margin
By industry
Long range
587,596,974.83 524,746,569.37 10.70% 47.66% 51.63% -2.34%
fishing
Cold storage
133,990,730.81 98,561,814.99 26.44% 27.81% 10.53% 11.50%
transportation
Cold storage
processing and 484,346,724.57 443,980,508.64 8.33% -8.68% -9.45% 0.77%
trading
By product
Long range
587,596,974.83 524,746,569.37 10.70% 47.66% 51.63% -2.34%
fishing
Cold storage
133,990,730.81 98,561,814.99 26.44% 27.81% 10.53% 11.50%
transportation
Cold storage
processing and 484,346,724.57 443,980,508.64 8.33% -8.68% -9.45% 0.77%
trading
By region
China 674,787,548.22 604,369,941.62 10.44% 9.90% 15.74% -4.52%
Foreign
538,422,357.74 465,075,908.56 13.62% 26.58% 14.69% 8.95%
countries
By sales model
Direct sales 1,145,252,422.09 997,975,267.34 12.86% 16.22% 14.22% 1.52%
In the case where the statistical basis of the Company’s main business data was adjusted during the Reporting Period, the Company’s
adjusted main business data for the last one year on the statistical basis as at the end of the Reporting Period
□Applicable Not applicable
(3) Whether the Company’s revenue from the sales of physical goods exceeds its revenue from the provision of labor services
Yes □No
Year-on-year
Industry category Item Unit 2023 2022
increase/decrease
Sales volume Ton 42,363 30,918 37.02%
Long range fishing Production Ton 42,341 38,532 9.89%
Inventory Ton 14,287 14,309 -0.15%
Cold storage Sales volume Ton 13,461 12,629 6.59%
processing and Production Ton 14,522 13,867 4.72%
trading Inventory Ton 6,302 5,241 20.24%
Reasons for year-on-year changes by more than 30%
Applicable □Not applicable
The total sales volume of distant-water fishing increased due to the increase in the catch and sales of seining.
(4) Performance of the Company’s significant sales contracts and significant purchase contracts as of the Reporting Period
□Applicable Not applicable
(5) Components of operating costs
Industry category
Unit: RMB
2023 2022
Year-on-year
Industry Proportion in Proportion in
Item increase/decrea
category Amount operating Amount operating se
costs costs
Fees for the
Long range
common of 56,184,735.95 10.71% 12,033,931.09 3.48% 366.89%
fishing
piscary
Long range
Raw materials 83,788,979.29 15.97% 55,675,851.59 16.09% 50.49%
fishing
Long range
Fuel power 178,559,515.43 34.03% 125,427,447.13 36.24% 42.36%
fishing
Long range
Staff salaries 73,927,951.66 14.09% 53,803,238.26 15.55% 37.40%
fishing
Long range Depreciation
35,044,853.46 6.68% 21,660,438.48 6.26% 61.79%
fishing costs
Long range
Others 97,240,533.57 18.53% 77,459,174.08 22.38% 25.54%
fishing
Long range
Total 524,746,569.37 100.00% 346,060,080.63 100.00% 51.63%
fishing
Cold storage
Staff salaries 45,146,821.38 45.81% 41,023,514.31 46.00% 10.05%
transportation
Cold storage Depreciation
15,484,130.31 15.71% 11,185,555.19 12.54% 38.43%
transportation costs
Cold storage
Supplies 4,824,039.77 4.89% 4,453,482.41 4.99% 8.32%
transportation
Cold storage
Inspection costs 244,781.13 0.25% 475,180.74 0.53% -48.49%
transportation
Cold storage
Insurance costs 6,148,325.61 6.24% 4,458,991.35 5.00% 37.89%
transportation
Cold storage
Fuel 6,490,133.87 6.58% 4,980,104.66 5.58% 30.32%
transportation
Cold storage
Repair costs 5,667,878.96 5.75% 5,083,520.14 5.70% 11.50%
transportation
Cold storage
Others 14,555,703.96 14.77% 17,511,691.48 19.64% -16.88%
transportation
Cold storage
Total 98,561,814.99 100.00% 89,172,040.28 100.00% 10.53%
transportation
Cold storage
Direct raw
processing and 385,730,463.16 86.88% 413,600,999.63 84.36% -6.74%
materials
trading
Cold storage
Packaging
processing and 12,376,170.23 2.79% 14,814,847.62 3.02% -16.46%
materials
trading
Cold storage
processing and Salaries 29,267,495.29 6.59% 28,688,397.47 5.85% 2.02%
trading
Cold storage
processing and Depreciation 6,233,178.25 1.40% 6,725,714.54 1.37% -7.32%
trading
Cold storage
processing and Others 10,373,201.71 2.34% 26,464,424.56 5.40% -60.80%
trading
Cold storage
processing and Total 443,980,508.64 100.00% 490,294,383.82 100.00% -9.45%
trading
Others Labor costs 141,400.00 6.56% 119,830.00 5.56% 18.00%
Out-of-pocket
Others 4,426.70 0.21% 5,077.37 0.24% -12.82%
expenses
Depreciation
Others 1,326,076.68 61.48% 1,659,129.99 77.04% -20.07%
costs
Others Electricity bills 140,113.49 6.50% 141,118.51 6.55% -0.71%
Others Repair costs 99,302.90 4.60% 85,112.57 3.95% 16.67%
Heating
Others 192,899.46 8.94% 143,268.86 6.65% 34.64%
expenses
Carry-over of
Others finished 252,737.95 11.72% 100.00%
product costs
Others Total 2,156,957.18 100.00% 2,153,537.30 100.00% 0.16%
Offset of
internal -71,470,582.84 -53,978,482.01
transactions
Note
The components of the Company’s operating costs for the year are shown in the above table, which share the same statistical basis as
the previous year.
(6) Whether there was any change in the consolidated scope during the Reporting Period
□Yes No
(7) Any significant changes or adjustments to the Company’s businesses, products, or services during the Reporting Period
□Applicable Not applicable
(8) Key customers and key suppliers
The Company’s key customers
Total sales to the top five customers (RMB) 444,359,300.09
Proportion of the total sales to the top five customers in the total sales for the year 38.79%
Proportion of the sales to the related parties of the total sales to the top five customers in
0.00%
the total sales for the year
The Company’s top five customers
Proportion in the total sales
No. Customer’s name Sales (RMB)
for the year
1 A 158,288,335.81 13.82%
2 B 79,752,069.54 6.96%
3 C 74,675,670.99 6.52%
4 D 70,833,638.76 6.18%
5 E 60,809,584.99 5.31%
Total -- 444,359,300.09 38.79%
Explanation of other situations related to the key customers
□Applicable Not applicable
Information of the Company’s key suppliers
Total purchases from the top five suppliers (RMB) 345,382,973.71
Proportion of the total purchases from the top five suppliers in
42.46%
the total purchases for the year
Proportion of the purchases from the related parties of the total
purchases from the top five suppliers in the total purchases for 0.00%
the year
The Company’s top five suppliers
Proportion in the total
No. Supplier’s name Amount of purchase (RMB)
purchase for the year
1 A 92,602,144.83 11.38%
2 B 92,443,388.84 11.37%
3 C 77,313,412.96 9.51%
4 D 42,169,359.00 5.18%
5 E 40,854,668.08 5.02%
Total -- 345,382,973.71 42.46%
Explanation of other situations related to the key suppliers
□Applicable Not applicable
3. Expenses
Unit: RMB
Year-on-year Explanation of
2023 2022
increase/decrease significant changes
Selling expenses 3,644,441.03 3,380,701.10 7.80%
Management expenses 68,621,908.48 64,374,235.07 6.60%
It was mainly caused
by the decrease in the
exchange net income
Financial expenses 10,181,066.34 -10,573,553.15 196.29%
and the increase in the
expensed interest upon
the transfer of the
seining project into
fixed assets.
R&D expenses 3,276,567.05 3,394,089.25 -3.46%
4. R&D spending
Applicable □Not applicable
Expected impact on the
Name of key R&D
Purpose Progress Intended objective Company’s future
project
development
Deep processing and
Innovative Recycle high-value
To develop and produce
of Auxiliary Completed Recycle of byproducts development of aquatic
higher value-added products
Ingredients of Tuna products
Completed To improve the intelligent
office work efficiency for
Ensuring vessel safety,
vessels, achieve the shore
Improvement of intelligent preventing oil
GuiderStar Full- base’s real-time monitoring
equipment applications and contamination, and
Scale Vessel and management of vessels
software providing information
Application and key machinery and
for energy conservation
equipment, and reflect the
and emission reduction
“people-centered”
humanistic care concept
Completed It helps reduce the corrosion
Upgrading of the To extend the service life of
of the evaporator pipelines, It will lengthen the
defrosting system of the storage evaporator, save
cooling fins, brackets, maintenance cycle,
the storage the costs of equipment
defrosting trays, and the save repair costs, and
refrigeration maintenance and servicing,
evaporator-vicinity walls, improve the
evaporator used for and improve the
floors, and storage bilge refrigeration effect.
boats refrigeration effect
wells.
To improve the professional Completed
level and efficiency of
Research on New It will reduce fishing
fishing boats, reduce fishing To make new fishing net
Fishing Net preparation time,
production costs, increase technology promote seining
Application increase catch, and
economic returns on and effectively realize
Technology for create a higher catch
fishing, and effectively application values
Large Tuna Seiners value.
reduce pollution in the
marine environment
The Company’s R&D personnel
2023 2022 Changes (%)
Number of R&D personnel
20 31 -35.48%
(person)
Proportion of R&D personnel 2.18% 3.29% -1.11%
Educational backgrounds of R&D personnel
Bachelor’s degree 9 25 -64.00%
Master’s degree 3 2 50.00%
Diploma 8 4 100.00%
Age groups of R&D personnel
Under 30 years old 4 2 100.00%
30 to 40 years old 5 18 -72.22%
Above 40 years old 11 11 0.00%
Information of the Company’s R&D spending
2023 2022 Changes (%)
R&D spending (RMB) 3,276,567.05 3,394,089.25 -3.46%
Proportion of R&D spending
0.29% 0.34% -0.05%
in operating revenue
Capitalized amount of R&D
0.00 0.00 0.00%
spending (RMB)
Proportion of capitalized
R&D spending in R&D 0.00% 0.00% 0.00%
spending
Reasons for and impact of significant changes in the Company’s R&D personnel
□Applicable Not applicable
Reasons for significant changes in the proportion of total R&D spending in operating revenue as compared with the previous year
□Applicable Not applicable
Reasons for substantial changes in the capitalization rate of R&D spending and explanation of the reasonableness
□Applicable Not applicable
5. Cash flow
Unit: RMB
Year-on-year
Item 2023 2022
increase/decrease
Subtotal of cash inflows from operating activities 1,246,834,189.84 1,097,521,246.08 13.60%
Subtotal of cash outflows for operating activities 1,165,297,432.02 1,084,788,572.98 7.42%
Net cash flows from operating activities 81,536,757.82 12,732,673.10 540.37%
Subtotal of cash inflows from investment activities 130,058.18 279,235,423.12 -99.95%
Subtotal of cash outflows for investment activities 195,953,698.24 508,356,110.72 -61.45%
Net cash flows from investment activities -195,823,640.06 -229,120,687.60 14.53%
Subtotal of cash inflows from financing activities 223,035,507.16 454,300,000.00 -50.91%
Subtotal of cash outflows for financing activities 92,564,246.05 229,344,287.69 -59.64%
Net cash flows from financing activities 130,471,261.11 224,955,712.31 -42.00%
Increase in cash and cash equivalents 15,863,080.72 17,615,036.32 -9.95%
Key factors for significant year-on-year changes in relevant data
Applicable □Not applicable
(1) For net cash flows from operating activities, inflows increased from the corresponding period in the prior year, which was
mainly due to the increase in the cash received from the sale of products and the provision of labor services during the
Reporting Period.
(2) For net cash flows from investment activities, outflows decreased from the corresponding period in the prior year, which
was mainly due to the decrease in expenditure for the purchase of fixed assets during the Reporting Period.
(3) For net cash flows from financing activities, inflows decreased from the corresponding period in the prior year, which was
mainly due to the subsidiaries’ absorption of minority shareholders during the corresponding period in the prior year.
Reasons for significant differences between the net cash flows from operating activities during the Reporting Period and the net
profits for the year
Applicable □Not applicable
For details, refer to “Section X. VII. 53. (1) Complementary information to the cash flow statement.”
V. Analysis of Non-main Businesses
Applicable □Not applicable
Unit: RMB
Proportion in total Whether it is
Amount Reasons of formation
profits sustainable
It was mainly the
income from long-term
equity investment
Investment income -649,378.77 -1.45% No
calculated using the
equity method in the
Reporting Period.
It was mainly the
inventory revaluation
Asset impairment -67,560,742.65 -150.72% No
reserve accrued during
the Reporting Period.
It was mainly the
insurance
Non-operating income 1,583,319.90 3.53% compensation received No
during the Reporting
Period.
It was mainly the loss
Non-operating from the scrapping of
98,172.78 0.22% No
expenses fixed assets during the
Reporting Period.
VI. Analysis of Assets and Liabilities
1. Significant changes in asset components
Unit: RMB
At the end of 2023 At the beginning of 2023 Explanation of
Increase/Decrea
Proportion in Proportion in significant
Amount Amount se (%)
total assets total assets changes
Monetary
262,127,423.03 12.80% 227,264,342.31 12.36% 0.44%
capital
Accounts
48,424,004.91 2.36% 57,833,671.83 3.15% -0.79%
receivable
Inventory 495,699,535.13 24.20% 426,125,273.33 23.18% 1.02%
Investment
27,456,779.39 1.34% 28,782,856.07 1.57% -0.23%
property
Long-term
equity 1,414,031.32 0.07% 1,983,923.48 0.11% -0.04%
investment
It was mainly
due to the
transfer of
newly built
1,019,386,437.
Fixed assets 49.77% 630,970,963.32 34.32% 15.45% seiners into
83
fixed assets
during the
Reporting
Period.
It was mainly
Construction in
65,288,052.12 3.19% 344,727,296.32 18.75% -15.56% due to the
progress
transfer of
newly built
seiners into
fixed assets
during the
Reporting
Period.
Right-of-use
91,606.72 0.00% 410,045.97 0.02% -0.02%
assets
Short-term
58,011,311.42 2.83% 20,024,144.40 1.09% 1.74%
borrowings
Contractual
29,481,400.42 1.44% 49,576,606.91 2.70% -1.26%
liabilities
Long-term
390,665,507.16 19.07% 283,557,577.77 15.42% 3.65%
borrowings
The overseas assets account for a higher proportion
Applicable □Not applicable
Proportion
Control Whether
of overseas
Specific Operation measures to Return on there is any
Reasons of assets in
content of Asset size Location model guarantee assets significant
formation the
assets asset impairment
Company’s
security risk
net assets
HABITAT Wholly-
INTERNA owned Vessel and
318,596,75 Panama Independen 25,272,284.
TIONAL subsidiary personnel 24.67% No
4.92 t operations 26
CORPORA incorporate insurance
TION d overseas
Professiona
l
manageme
ZHONG
Wholly- nt team
GHA
owned stationed -
FOODS 133,499,14 Independen
subsidiary Ghana overseas 6,050,886.3 10.34% No
COMPAN 4.82 t operations
incorporate and vessel 8
Y
d overseas and
LIMITED
personnel
insurance
2. Assets and liabilities measured at fair value
□Applicable Not applicable
3. Restrictions over asset rights as of the end of the Reporting Period
Item Period-end book value Reasons
Monetary capital 19,000,000.00 Bill guarantees
Fixed assets 462,793,007.43 Mortgage loans
Intangible assets 4,558,790.48 Mortgage loans
Total 486,351,797.91
VII. Investment Analysis
1. Overview
Applicable □Not applicable
Investment amount for the Reporting Investment amount for the same period
Changes (%)
Period (RMB) in the previous year (RMB)
183,718,038.36 360,025,731.57 -48.97%
2. Significant equity investment acquired during the Reporting Period
□Applicable Not applicable
3. Significant non-equity investment in progress during the Reporting Period
Applicable □Not applicable
Unit: RMB
Reaso
ns for
failure
Total
Total to
actual
Wheth Invest incom reach
Industr invest
er it is ment e the
ies ment Disclo
Invest an amoun Expect realize planne Disclo
involv amoun Project sure
Project ment invest t for Fund ed d as of d sure
ed in t as at progre index
name metho ment the source invest the end progre date (if
the the end ss (if
d in Report ment of the ss and any)
invest of the any)
fixed ing Report realize
ment Report
assets Period ing the
ing
Period expect
Period
ed
incom
e
Proces
sing
and The
Zhongl
trading design
u
of ed
Marine Self- 28,703 102,14 Self-
aquatic capacit
Innova constr Yes ,878.0 4,827. owned 0.00
produc y is
tion uction 1 76 fund
ts and not
Industr
cold reache
y Park
chain d.
logisti
cs
Constr Self-
uction owned Target
Self- 45,591 376,36 24,650
of two Fisher fund 100.00 output
constr Yes ,103.1 0,439. ,461.8
large y and % reache
uction 1 54 5
tuna bank d
seiners loans
74,294 478,50 24,650
Total -- -- -- ,981.1 5,267. -- -- 0.00 ,461.8 -- -- --
2 30 5
4. Financial asset investment
(1) Securities investment
□Applicable Not applicable
The Company did not have securities investments during the Reporting Period.
(2) Derivative investment
□Applicable Not applicable
The Company did not have derivative investments during the Reporting Period.
5. Use of raised funds
□Applicable Not applicable
The use of raised funds was not applicable to the Company during the Reporting Period.
VIII. Sale of Significant Assets and Equity
1. Sale of significant assets
□Applicable Not applicable
The Company did not sell any significant assets during the Reporting Period.
2. Sale of significant equity
□Applicable Not applicable
IX. Analysis of Key Shareholding Companies
Applicable □Not applicable
Key subsidiaries and shareholding companies affecting the Company’s net profits by more than 10%
Unit: RMB
Company Company Main Registered Operating Operating
Total assets Net assets Net profits
name type business capital revenue profits
Shandong
Zhonglu
Oceanic Food 104,322,30 520,529,98 351,948,05 484,598,35 21,302,734. 18,154,681.
Subsidiary
(Yantai) processing 0.00 2.73 5.26 1.95 15 19
Food Co.,
Ltd.
HABITAT
Cold
INTERNA
storage 12,476,145. 318,596,75 227,020,80 116,555,94 25,272,284. 25,272,284.
TIONAL Subsidiary
transportati 60 4.92 3.49 5.38 26 26
CORPORA
on
TION
Shandong
Zhonglu
- -
Haiyan Long range 221,617,34 570,587,43 403,029,73 310,869,56
Subsidiary 9,313,715.3 7,787,483.7
Oceanic fishing 9.00 5.59 1.79 9.04
2 0
Fisheries
Co., Ltd.
Acquisition and disposal of subsidiaries during the Reporting Period
□Applicable Not applicable
Information of key shareholding companies
Shandong Zhonglu Oceanic (Yantai) Food Co., Ltd.: Operating profits for the Reporting Period reached RMB21,302,734.15,
representing an increase of 4.07% year-on-year
HABITAT INTERNATIONAL CORPORATION: Operating profits for the Reporting Period reached RMB25,272,284.26,
representing a substantial increase of 60.19% year-on-year, which was mainly due to during the Reporting Period, the new cold
storage transportation vessels brought additional lease income, causing the profit to rise;
Shandong Zhonglu Haiyan Oceanic Fisheries Co., Ltd.: During the Reporting Period, its operating profit was RMB-
9,313,715.32, down 216.15% year-on-year, which was mainly due to the substantial decline in the market price of longline fishing
goods during the Reporting Period compared with the corresponding period in the prior year.
X. Structured Entities Controlled by the Company
□Applicable Not applicable
XI. Prospects of the Company’s Future Development
With the implementation of its marine strategy, China has rolled out a series of preferential policies for the overseas fishing
industry since it is an important part of the ocean economy. China’s overseas fishing industry is developing rapidly, with its long
range fishing fleet continuously expanding. However, obtaining resources is still the main focus, and raw fish remains the main
product while high value-added processed products, market development, sales, and the production service support system are still
weak. Currently, as China is carrying out the conversion of old and new growth drivers, the overseas fishing industry will welcome
new opportunities for adjustment, transformation, and development. It is expected that the future development trends will be as
follows: First, the oceanic fishing industry will be stabilized. The fishing of pelagic fish, cephalopods, and Antarctic krill will be
expanded. Second, the trans-oceanic fishing industry will be strengthened and improved. The transformation and upgrade of this
industry will be promoted through a variety of measures, including changing the cooperation models, improving management,
upgrading fishing boats, and the merger and acquisition of projects. Third, the cold storage, processing, and trading of aquatic
products will be developed through the improvement of the industrial structure and the extension of the industrial chain. Fourth, more
efforts will be made to strengthen the development of the production service support system for the fishing industry. Overseas
oceanic fishing bases and offshore production platforms will be vigorously developed to carry out value-added business activities,
including fishing wharf services, fish warehousing and logistics, fishing boat repairs, marine transportation, replenishment, and
refueling services.
(I) Prospects of the Company’s main businesses
1. Long range fishing
The Company will continue to develop long range fishing centered around seining and longline fishing. Tuna seining: For
seining in the Western-central Pacific, as a rare target of the seining in the Western-central Pacific and an important step for reaching
the targets of the Company’s “14th Five-Year” Plan, the two large tuna seiners, “Tailong 7” and “Tailong 9,” operated at full steam
and realized stably good production. As of now, the two seiners have carried out more than 10 transshipments, and the fish catch they
transported back was gradually sold. So far, the company has maintained good cooperation with customers, creating steady channels
for the sale of catch, with the catch sold out upon arrival at the port. For seining in the Atlantic, the Company will strengthen
management to guarantee the sustainable operation of the boats and ensure the sailing rate. Longline fishing: The Company will
proactively explore high-latitude fisheries in the south while maintaining existing fishing access cooperation. Squid fishing: The
Company will study and evaluate the feasibility of developing squid fisheries in the Northern Pacific and continuously develop new
fisheries and new resources to maintain new profit growth points. Trawling: The two new trawlers with advanced equipment that are
suitable for modern marine fishing and conform to national industrial policies went to the waters of Ghana for trawling in the year.
The replacement project for the two trawlers has maintained the diversity of operation and the existing profit growth points in the
course of the Company’s transoceanic fishing cooperation, which is of great importance for the Company to further develop distant-
water fishing and make active use of fishing resources in developing countries and regions to achieve high-quality development.
2. Cold storage transportation
The Company will strengthen and boost its cold transportation service. Oceanic cold storage transportation is always a stable
business segment in the Company’s business performance. Depending on the specific situation of the cold storage transportation
market, the Company will continue to phase out old vessels with small tonnages and upgrade relatively younger cold storage
transportation vessels with moderate tonnages to maintain the position of its transportation fleet in the industry. Meanwhile, the
Company will explore other types of vessel transportation services to expand its sea transportation services and increase profitability.
3. Cold storage processing and trading
The Company will proactively extend its cold storage processing and trade, emphasize “increasing the sales volume,” and
expand the paths for enterprise development. First, the Company will stabilize its share of the international market, deliver
breakthroughs, and constantly develop new markets and customers. Second, the Company will broaden channels for domestic market
sales and increase market control and occupancy. Third, the Company will focus on “strengthening research and innovation” to
improve its competitiveness for enterprise development. The Company will beef up the R&D of new products, promote the deep
integration of innovation and enterprise development, step up efforts in biotechnology, strive to achieve automatic and intelligent
processing, and make sure that it always enjoys an industrially leading position for tuna processing technology and products. Fourth,
driven by both brand and innovation, the Company will speed up the advancement of the online and offline sales models, broaden
channels for domestic sales, and proactively develop markets at all levels.
(II) Future development strategies
Closely aligning the strategic goals for its development, the Company will judge the overseas fishing situation, follow the
development requirements for listed companies, grasp opportunities to expedite development, prevent risks, and stabilize business
performance. The Company will also stick to the overseas fishing industry as its main business, increase brand visibility, and extend
the industrial chain according to the development vision of “stabilizing fishing, consolidating the industrial chain model that
integrates cold storage, processing, trading, and transportation, improving product structures, and carrying out transformation and
upgrading.”
(III) Work plan for 2024
The Company will uphold the concept of “reform-based, innovation-driven, standardized, and steady development,” revolve
around the guidelines for “maintaining growth, emphasizing standards, adjusting structures, and promoting transformation,” and
focus on improving its development quality. With the purpose of increasing economic returns, the Company will convert old growth
drivers into new ones, develop markets, and drive the construction of key projects. It will strengthen the business foundation, seek
progress while maintaining stable development, blaze new trails, create new models, and take a combination of measures. Centered
around the key problems restricting its development, the Company will manage production, operations, transformation, market
development, and standardized management. It will proactively cultivate new profit growth points and continuously improve its
control, competitiveness, influence, and anti-risk capabilities to ensure the accomplishment of the annual targets. In 2023, the
Company will do the following work: 1) improve the management of seining projects, develop more supporting measures, develop
diverse markets, increase project profitability, and proactively drive the construction of the two (sets of) large seiners to cultivate
profit growth points; 2) stabilize the profitability of the longline tuna fishing project in the Indian Ocean, explore new operating
fisheries, dispatch vessels on a scientific basis, conduct business in accordance with laws and regulations, and ensure stable growth in
fishing production; 3) strengthen and improve cold storage transportation and purchase and build modern and intelligent
transportation vessels; 4) At present, the Southern Pacific tuna cold storage transport market has not reached saturation, with
abundant room for development. Hence, the Company plans to acquire a relatively new secondhand cold storage transport vessel
with a suitable tonnage.5) proactively develop and extend cold storage processing and trading services, step up efforts to develop
new products, deep-processed products, and other high-value-added products, create new sales models, and cultivate new profit
growth points; 6) promote the Company’s transformation to an innovation-driven company through “technological, product, business,
and management innovation.”
(IV) Risks facing the Company and countermeasures
1. Risk of fishing resource fluctuations: Fishing resources usually fluctuate, and sometimes the fluctuations are big. Greater
decreases in fishing resources will have a greater impact on the Company’s profits. Cyclic changes, climates, hydrological conditions,
and other relevant conditions are all likely to cause fluctuations in fishing resources. Countermeasures: The Company will develop
new fisheries, dispatch vessels on a scientific basis, upgrade fishing and production equipment, and gradually improve production
vessels. It will make science-based and reasonable arrangements for vessel maintenance, equipment repair, materials, fish baits, spare
parts, and logistical support for personnel to ensure high sailing rates.
2. Risk of price fluctuations: The price of tuna raw materials declined continuously from the beginning of 2023 to November.
The price of tuna raw materials of various varieties and specifications dropped by about 40%. Since December 2023, the price has
recovered slowly, up about 10% from the low levels.Countermeasures: The Company will accelerate the building of a new paradigm
focusing on domestic circulation with mutual promotion between domestic and international circulations. It will precisely target the
domestic market, develop cooked products that accommodate consumers’ needs, and expand domestic sales channels.
3. Safety risk: The aging of boats causes a reduction in productivity and market competitiveness. Countermeasures: The
Company will proactively promote the replacement of aged boats, improve asset allocation, and prevent safety risks.
XII. Reception of Surveys, Communications, and Interviews during the Reporting Period
Applicable □Not applicable
Type of Major content
Basic
Time of Place of Mode of reception Reception discussed and
information
reception reception reception subject subject documents
index of survey
provided
The Company’s
production,
operations, and
Phone Individual other relevant
April 27, 2023 Online Individual None
communication investors information
were discussed;
no documents
were provided.
The Company’s
production,
operations, and
Phone Individual other relevant
May 18, 2023 Online Individual None
communication investors information
were discussed;
no documents
were provided.
The Company’s
production,
operations, and
Phone Individual other relevant
June 01, 2023 Online Individual None
communication investors information
were discussed;
no documents
were provided.
June 30, 2023 Online Phone Individual Individual The Company’s None
communication investors production,
operations, and
other relevant
information
were discussed;
no documents
were provided.
The Company’s
production,
operations, and
Phone Individual other relevant
August 25, 2023 Online Individual None
communication investors information
were discussed;
no documents
were provided.
The Company’s
production,
operations, and
September 25, Phone Individual other relevant
Online Individual None
2023 communication investors information
were discussed;
no documents
were provided.
October 17, The Company’s
2023 production,
operations, and
Phone Individual other relevant
Online Individual None
communication investors information
were discussed;
no documents
were provided.
October 25, The Company’s
2023 production,
operations, and
Phone Individual other relevant
Online Individual None
communication investors information
were discussed;
no documents
were provided.
October 27, The Company’s
2023 production,
operations, and
Phone Individual other relevant
Online Individual None
communication investors information
were discussed;
no documents
were provided.
October 31, The Company’s
2023 production,
operations, and
Phone Individual other relevant
Online Individual None
communication investors information
were discussed;
no documents
were provided.
November 02, Phone Individual The Company’s
Online Individual None
2023 communication investors production,
operations, and
other relevant
information
were discussed;
no documents
were provided.
December 20, The Company’s
2023 production,
operations, and
Phone Individual other relevant
Online Individual None
communication investors information
were discussed;
no documents
were provided.
XIII. Implementation of the “Better Quality, Higher Investment Returns” Action Plan
Whether the Company has disclosed the “Better Quality, Higher Investment Returns” action plan
□Yes No
Section IV Corporate Governance
I. Basic status of corporate governance
During the reporting period, in accordance with the requirements of laws, regulations, and relevant normative
documents such as the Company Law, the Securities Law, the Governance Standards for Listed Companies, and
Self-regulatory Guideline No. 1 of the Shenzhen Stock Exchange for Listed Companies - Standardized Operation
of Main Board Listed Companies, the Company continuously improved its corporate governance structure, further
standardized its operations, and improved its governance level. The shareholders’ meeting, board of directors, and
supervisory board can all be held strictly in accordance with regulations and norms, and all directors and
supervisors can fulfill their duties conscientiously and diligently. The Company believes that there is no difference
between the actual situation of corporate governance during the reporting period and the requirements of the
Company Law and relevant regulations of the China Securities Regulatory Commission.
Are there significant differences between the actual situation of corporate governance and laws, administrative
regulations and the regulations on listed company governance issued by the China Securities Regulatory
Commission?
□Yes No
There is no significant difference between the actual situation of corporate governance and laws, administrative
regulations and the regulations on listed company governance issued by the China Securities Regulatory
Commission.
II. The independence of the Company relative to its controlling shareholders and actual
controllers in guaranteeing the Company’s assets, personnel, finance, institution, business,
and other aspects
During the reporting period, the Company strictly operated in accordance with laws, regulations, and rules such as
the Company Law and the Articles of Association, and established a sound corporate governance structure. The
Company is completely separated from its controlling shareholders and actual controllers in terms of assets,
personnel, finance, institution, and business, and has independent and complete business and independent
management capabilities.
1. Asset integrity. The Company’s assets are complete and independent, and have clear ownership relationships.
No assets or funds are occupied by the controlling shareholder, and the Company's assets are completely
independent of the controlling shareholder.
2. Personnel independence. The Company has established an independent HR system and a complete salary
management system, with an independent workforce. The Company's general manager, deputy general manager,
financial manager, board secretary and other senior management personnel have not held any administrative
positions other than directors or supervisors in the controlling shareholders or other enterprises under their control,
and all receive compensations from the Company. The Company's financial personnel also do not hold part-time
positions in controlling shareholders or other enterprises under their control.
3. Financial independence. The Company sets up an independent financial department and accounting personnel, a
complete and independent financial accounting system, and a standardized financial accounting system, capable
of making financial decisions independently. An independent bank account is opened and taxes are paid
independently.
4. Institutional independence. The Company has a sound organizational structure that is completely separate from
the controlling shareholders in terms of institution. The shareholders' meeting, board of directors, and supervisory
board all operate independently and have independent decision-making and execution capabilities.
5. Business independence. The production, operation, and administrative management of the Company are
completely independent of the controlling shareholders, and there is no horizontal competition with the
controlling shareholders.
III. Horizontal competition
□Applicable Non applicable
IV. Relevant information on annual and extraordinary shareholders' meetings held during the
reporting period
1. Situation of the shareholders' meeting during this reporting period
Investor
Date of Date of
Session Type participation Resolution
holding disclosing
ratio
Refer to the Announcement on the Resolution of
2022 Annual Annual the 2022 Annual General Meeting of
May 25, May 26,
General Meeting of general 47.63% Shareholders (Announcement No. 2023-14)
2023 2023
Shareholders meeting disclosed in the China Securities Journal and
CNINFO
2. Preferred shareholders with restored voting rights request to convene an extraordinary shareholders' meeting
□Applicable Non applicable
V. Information on directors, supervisors, and senior management personnel
1. Basic status
Number
Number Number Number
of Reasons
of shares of shares of shares
shares for
Term held at the increased Other held at
Employment Term start reduced increase
Name Gender Age Position end beginning in the changes the end
status date in the or
date of the current (shares) of the
current decrease
period period period
period of shares
(shares) (shares) (shares)
(shares)
May
Managing June 07,
Wang Huan male 55 incumbent 11, 0 0 0 0 0
Director 2018
2025
Chairman, incumbent
Secretary of
the Board of May
November
Liang Shanglei male 51 Directors, 11, 0 0 0 0 0
19, 2020
Chairman of 2025
the Labor
Union
incumbent May
Zeng April 25,
male 55 Director 11, 0 0 0 0 0
Xianzhong 2024
2025
incumbent May
Zhong Independent May 12,
male 56 11, 0 0 0 0 0
Zhigang director 2022
2025
incumbent May
Wu Independent April 25,
male 45 11, 0 0 0 0 0
Hengguang director 2024
2025
Chairman of incumbent
May
the April 25,
Zhou Yi female 50 11, 0 0 0 0 0
Supervisory 2024
2025
Board
incumbent May
May 12,
Wang Fang female 40 Supervisor 11, 0 0 0 0 0
2022
2025
incumbent May
Employee May 12,
Xue Xiangwei male 36 11, 0 0 0 0 0
supervisor 2022
2025
Deputy incumbent May
May 16,
Meng Fanyong male 54 General 11, 0 0 0 0 0
2019
Manager 2025
male incumbent May
Financial January
Fu Chuanhai 51 11, 0 0 0 0 0
director 04, 2019
2025
male Deputy incumbent May
Dong April 19,
52 General 11, 0 0 0 0 0
Guangming 2022
Manager 2025
male resign April
January
Lu Lianxing 58 Chairman 25, 0 0 0 0 0
25, 2018
2024
resign April
July 21,
Xinli female 44 Director 25, 0 0 0 0 0
2021
2024
Independent resign May 12, April
Wang Shouhai male 47 0 0 0 0 0
director 2022 25,
2024
Chairman of resign
April
the May 12,
Liu Zhihui male 59 25, 0 0 0 0 0
Supervisory 2022
2024
Board
total -- -- -- -- -- -- 0 0 0 0 0 --
Whether there were any resignation of directors and supervisors and dismissal of senior executives during the reporting period
□YesNo
Changes in Directors, Supervisors and Senior Management of the Company
□Applicable Not applicable
2. Employment status
Professional background, main work experience, and current main responsibilities of current directors, supervisors, and senior
management personnel of the Company .
(1) Director
Wang Huan, college degree, Bachelor of Economics. Used to be the deputy general manager of Shandong Zhonglu Oceanic
Fisheries Co., Ltd., the deputy manager of the Ocean Management Department, the business director of the Fisheries project in
Ghana, the person in charge of the Fisheries project in Gambia, the chairman and general manager of Shandong Zhonglu Aquatic
Shipping Co., Ltd. He serves as director and general manager of the Company.
Liang Shanglei is a university graduate and a member of the Communist Party of China. His previous positions include: officer
of the Political Department of the Communication Corps of the Second Artillery 54 Base; political instructor of the Seventh Brigade
of the Jinan Detachment of the Armed Police Corps Shandong Corps; director and deputy political commissar of the Political
Division of the Shandong Provincial Corps Hospital of the Armed Police Corps; chief staff member and publicity officer of the
Capital Operation and Income Management Division, and deputy director of the Complaints and Complaints Office (Party
Committee Propaganda and Mass Work Department), of the Shandong Provincial State-owned Assets Supervision and
Administration Commission; and employee director, deputy general manager, and secretary of the Disciplinary Committee, and
deputy Party secretary of Shandong Zhonglu Oceanic Fisheries Co., Ltd. He is currently the Party secretary, chairman, board
secretary, and chairman of the Labor Union of the Company.
Zeng Xianzhong is a spare time university graduate and an auditor. His previous positions include: deputy head and senior
business manager of the Investment and Development Department and deputy head and senior business manager of the Asset
Management Department of Shandong State-owned Assets Investment Holding Co., Ltd.; supervisor of Inspur Group Co., Ltd.; and
chairman of the board of supervisors of Integrated Electronic Systems Lab Co., Ltd. He is currently a full-time external director and
supervisor of Shandong State-owned Assets Investment Holding Co., Ltd. (director of Shandong Light Industry Supply and Sale Co.,
Ltd., director of Shandong Pharmaceutical Group Co., Ltd., Shandong State-controlled New Energy Technology Co., Ltd., director of
Shandong Gold International Mining Co., Ltd., and director of Shandong National Chemical Communications Construction Group
Co., Ltd.). He serves as director of the Company.
Zhong Zhigang, graduate degree, member of the Communist Party of China, first-class lawyer. He is currently a senior partner
of Grandall Law Firm (Jinan); concurrently serves as the deputy director of the Restructuring and M&A Professional Committee of
the Jinan Lawyers Association, a member of the Restructuring and M&A Professional Committee of the Shandong Lawyers
Association, and the deputy director of the Finance and Securities Committee of the Jinan Law Society, and postgraduate cooperation
instructor of Shandong University of Finance and Economics Master of Business Administration (MBA). He serves as independent
director of the Company and Huafang Co., Ltd.
Wu Hengguang holds a PhD in accounting. He is a CPC member and a professor, doctoral supervisor, director of the Audit
Department, and secretary of the Faculty Party Branch 4 of Shandong University of Finance and Economics. He has been selected for
the National Leading Talent in Accounting (academic) training program by the Ministry of Finance. His positions include: senior
visiting scholar of the Accounting and Finance Department of Iowa State University Ivy College of Business; senior visiting scholar
of the Department of Accounting NCCU College of Commerce; panel expert of the China Academic Degrees and Graduate
Education Development Center; fund supervision expert of the Ministry of Education; special expert of Finance Research, a financial
magazine in China; and special fellow at the Chinese Government Audit Center. He is currently an independent director of the
Company, Shandong INOV New Material Co., Ltd. and Jinneng Science and Technology Company Limited.
(2) Supervisors
Zhou Yi holds a master’s degree in engineering. She is a CPC member and a senior accountant. Her previous positions include:
head of the Finance Management Department of Shandong Lianda Group Co., Ltd.; manager of the Financial Settlement Department
of the Shandong Property Right Exchange Center; senior business manager of the Finance Department, deputy head of the General
Department of the Disciplinary Inspection Committee, head of the Audit Department, and general manager of the Asset Management
Center of Shandong State-owned Assets Investment Holding Co., Ltd.; director of Shandong Dongyin Investment Co., Ltd.;
chairman of the Board of Supervisors of Shandong Transport Group Co., Ltd.; chairman of the Board of Supervisors of Shandong
Assets Management and Operation Co., Ltd.; and director of Shandong State-controlled Assets Operation Co., Ltd. She is currently a
full-time external director and supervisor of Shandong State-owned Assets Investment Holding Co., Ltd. (chairman of the Board of
Supervisors of Integrated Electronic Systems Lab Co., Ltd., chairman of the Board of Supervisors of Zhongtong Bus Holding Co.,
Ltd., and chairman of the Board of Supervisors of Rizhao Gangshan Steel Port Co., Ltd.). She serves as chairman of the Board of
Supervisors of the Company.
Wang Fang, postgraduate degree, master of management. Her previous positions include: deputy head and senior business
manager of the Finance Department of Shandong State-owned Assets Investment Holding Co., Ltd., the assistant and business
supervisor of the Capital Operation Department, the business supervisor, senior business supervisor and senior business manager of
the Equity Management Department. She currently serves as head of the Finance Department of Shandong State-owned Assets
Investment Holding Co., Ltd. and Supervisors of the Company.
Xue Xiangwei, postgraduate degree, member of the Communist Party of China. He used to be the deputy director and employee
of the Human Resources Department of Shandong Zhonglu Oceanic Fisheries Co., Ltd., and the deputy secretary of the Party branch
of Shandong Zhonglu Oceanic (Yantai) Foods Co., Ltd. He is currently an employee supervisor and head of the Human Resources
Department (Organization Department) of Shandong Zhonglu Oceanic Fisheries Co., Ltd.
(3) Senior management personnel
Meng Fanyong, college degree, economist, member of the Communist Party of China. Served as Deputy Chief of the Import
and Export Department of Shandong Aquatic Enterprise Group Corporation, Deputy Manager of Shandong Wanxiang Aquatic
Products Co., Ltd., Chairman and General Manager of Shandong Zhonglu Oceanic (Yantai) Foods Co., Ltd., and chairman of
Shandong Zhonglu Ocean Refrigeration Co., Ltd.. He is currently a member of the party committee and deputy general manager of
the Company.
Fu Chuanhai holds a postgraduate degree. He is a certified public accountant and senior accountant. He used to be the audit
project manager and deputy department manager of Shandong Zhengyuan Hexin Accounting Firm; the deputy director of the Finance
Department of Himin Solar Group; the deputy director of the audit center of Linuo Group; the chief accountant of China Resources
Shandong Pharmaceutical Co., Ltd.; financial director of Zhongtai Xincheng Asset Management Co., Ltd.. He serves as CFO of the
Company.
Dong Guangming, a university graduate, a member of the Communist Party of China. Served as a member of the supply
department of Jinan Mingshui Chemical Fertilizer Factory, technician and construction leader of Puji Radio and Television Station of
Zhangqiu Radio and Television Jade Bird Information Network Co., Ltd., deputy station chief and station chief of Diaozhen Radio
and Television Station of Zhangqiu Radio and Television Jade Bird Information Network Co., Ltd., station chief of Zhangqiu City
Radio and Television Bureau Puji Radio and Television Station, Station Master of Shuangshan Rural Radio Station of Zhangqiu
Branch of Shandong Radio and Television Network Co., Ltd., Senior Director and Director of the Administration and
Comprehensive Department of Juneng Capital Management Co., Ltd., Member of the Party Committee and Secretary of the
Disciplinary Committee of Zhongtai Xincheng Asset Management Co., Ltd. He is a member of the Party committee and deputy
general manager of the Company.
Employment status in shareholder units
Applicable □ Not applicable
Whether to receive
Shareholder unit Term start Term end remuneration and
Staff name Positions held in shareholder
name date date allowances in
shareholder
Shandong State- Full-time external director and
Zeng owned Assets supervisor
yes
Xianzhong Investment Holding
Co., Ltd.
Shandong State- Full-time external director and
owned Assets supervisor
Zhou Yi yes
Investment Holding
Co., Ltd.
Shandong State- Head of Finance
owned Assets
Wang Fang yes
Investment Holding
Co., Ltd.
Employment in other units
Applicable □ Not applicable
Whether to receive
Term start Term end remuneration
Staff name Other unit names Positions held in other units
date date allowance in other
units
Grandall Lawyers
Zhong Zhigang Senior Partner yes
(Jinan) Firm
Professor, doctoral supervisor,
director of the Audit
Shandong University
Department, and secretary of
Wu Hengguang of Finance and yes
the Faculty Party Branch 4 of
Economics
Shandong University of
Finance and Economics
Punishments of the Company’s current and resigned directors, supervisors and senior executives during the reporting period in the
past three years by securities regulatory agencies
□Applicable Not Applicable
3. Remuneration of directors, supervisors and senior executives
Decision-making procedures, determination basis and actual payment of remuneration for directors, supervisors and senior
executives
According to the relevant provisions and requirements of "Listed Company Governance Guidelines" of the China Securities
Regulatory Commission, the remuneration plan of the Company’s directors, supervisors and senior management personnel is
proposed by remuneration and appraisal committee of board of directors of the Company, reviewed and approved at the company's
the seventh meeting of the third session of board of directors held on February 14, 2008 and approved at the company's 2007 annual
general meeting held on March 18 , 2008; the tenth meeting of the seventh session of the board of directors held on December 29 ,
2020 also reviewed and adopted the "The Measures for the Administration of Remunerations of Directors, Senior Management
Personnel” was reviewed and approved at the 2020 Annual General Meeting of Shareholders held on May 27 , 2021 .
Remuneration of directors, supervisors and senior executives of the Company during the reporting period
Unit: RMB 10,000
Whether to
Total pre-tax receive
Employment remuneration remuneration
Name Gender Age Position
status received from from related
the Company parties of the
Company
Managing
Wang Huan male 55 incumbent 73.63 no
Director
Chairman,
Secretary of the
Board of
Liang Shanglei male 51 incumbent 56.77 no
Directors,
Chairman of the
Labor Union
Zeng male
55 Director incumbent 0 yes
Xianzhong
male Independent
Zhong Zhigang 56 incumbent 4 no
director
male Independent
Wu Hengguang 45 incumbent 0 no
director
female Chairman of the
Zhou Yi 50 incumbent 0 yes
Supervisory Board
Wang Fang female 40 Supervisor incumbent 0 yes
male Employee
Xue Xiangwei 36 incumbent 32.46 no
supervisor
male Deputy General
Meng Fanyong 54 incumbent 56.84 no
Manager
Fu Chuanhai male 51 Financial director incumbent 56.84 no
Dong male Deputy General
52 incumbent 57.45 no
Guangming Manager
Lu Lianxing male 58 Chairman resign 0 yes
Xinli female 44 Director resign 0 yes
male Independent
Wang Shouhai 47 resign 4 no
director
male Chairman of the
Liu Zhihui 59 resign 71.89 no
Supervisory Board
Total -- -- -- -- 413.88 --
Other information
□Applicable Not applicable
VI. Performance of duties by directors during the reporting period
1. The situation of the board of directors during the reporting period
Disclosure
Session Date Meeting Decision
date
The following proposals were considered and approved:
1. Proposal on reviewing the Three-Year Rolling
The eighth meeting of the
Development Plan (2022-2024)
eighth session of board of January 17, January 18,
2. Proposal on reviewing the annual remuneration and the
directors (extraordinary 2023 2023
incentive payment plan for managerial members
meeting)
3. Proposal on reviewing the payroll settlement plan for
2022
The following proposals were considered and approved:
1. Proposal on reviewing the work report of the general
manager for 2022
2. Proposal on Reviewing the Work Report of the Board of
Directors for 2022
3. Proposal on reviewing the full text and abstract of the
2022 annual report
4. Proposal on reviewing the 2022 annual financial report
5. Proposal on reviewing the profit distribution plan for
2022
6. Proposal on reviewing the internal control self-
evaluation report for 2022
7. Proposal on reviewing the reappointment of the audit
firm and the determination of remuneration
The ninth meeting of the eighth 8. Proposal on reviewing the application to the bank for
April 26, 2023 April 28, 2023 general credit limit
session of board of directors
9. Proposal on reviewing the purchase of bank financial
products with self-owned idle funds
10. Proposal on reviewing the guarantee limit within the
scope of the Company’s consolidated statements
11. Proposal on reviewing the Q1 report of 2023
12. Proposal on reviewing the investment plan for 2023
13. Proposal on reviewing the amendment to the Working
Rules for General Manager
14. Proposal on reviewing the amendment to the
implementation rules of the specialized committees under
the Board of Directors
15. Proposal on reviewing the execution of the payroll
budget for 2022 and the payroll budget plan for 2023
16. Proposal on reviewing the convening of the 2022
annual general meeting
The following proposal was considered and approved:
The tenth meeting of the eighth August 28, August 29,
Proposal on reviewing the semi-annual report of 2023 and
session of board of directors 2023 2023
the summary
The following proposals were considered and approved:
The eleventh meeting of the
October 27, October 28, 1 . Proposal on reviewing the Q3 report of 2023
eighth session of board of
2023 2023 2. Proposal on reviewing the amendment to the Articles of
directors
Incorporation
The following proposals were considered and approved:
The twelfth meeting of the 1. Proposal on reviewing the construction of intelligent
December 27, December 28,
eighth session of board of cold storage with variable temperatures in subsidiaries
2023 2023
directors 2. Proposal on reviewing the clearing of the Company’s
bank accounts
2. Attendance of directors at board meetings and general meetings of shareholders
Attendance of Directors at Board Meetings and Shareholders' Meetings
The number
Number of Whether fail
of board Number of
board Number of Number of to attend two Attendance
meetings that board
Director meetings board absences board at
should be meetings
name attended by meetings from board meetings in shareholders'
attended in attended on
corresponden entrusted meetings person in a meetings
this reporting site
ce row?
period
Lu Lianxing 5 0 5 0 0 no 0
Wang Huan 5 0 5 0 0 no 1
Xinli 5 0 5 0 0 no 1
Zhong
5 0 5 0 0 no 1
Zhigang
Wang
5 0 5 0 0 no 1
Shouhai
Explanation for failing to attend the board meeting in person for two consecutive times
Not applicable
3. The situation where the directors raise objections to the relevant matters of the Company
Whether the directors raise objections to the relevant matters of the Company
□ Yes No
During the reporting period, the directors raised no objection to the relevant matters of the Company.
4. Other instructions on the performance of duties by directors
Whether the directors’ suggestions to the Company are adopted
Yes □No
Explanation by the directors on whether the relevant proposals of the Company are adopted or not adopted
During the reporting period, the directors of the Company strictly followed the relevant provisions and requirements of the
"Articles of Association", "Working Rules of the Board of Directors" and relevant laws and regulations, actively attended the board
of directors and shareholders' meetings, and performed their duties diligently. Relevant opinions were put forward for governance
and business decision-making of the Company based on the actual situation of the Company. After full communication and
discussion, a consensus was formed, and the implementation of the resolutions of the board of directors was resolutely supervised
and promoted to ensure scientific, timely and efficient decision-making, and safeguard the legitimate rights and interests of the
Company and all shareholders.
7. The special committees under the board of directors during the reporting period
Other Specific
Important
Number of situations in circumstances
Date of Conference comments and
Committee name Membership meetings which duties of the
holding content suggestions put
held are objection (if
forward
performed any)
The first meeting of Wang April 21, 1. Proposal on According to the
1
the audit committee Shouhai, Xin 2023 reviewing the full actual situation of
of the board of Li, Zhong text and abstract the company,
directors in 2023 Zhigang of the 2022 after full
annual report communication
2. Proposal on and discussion,
reviewing the all proposals were
2022 annual unanimously
financial report passed.
3. Proposal on
reviewing the
profit distribution
plan for 2022
4. Proposal on
reviewing the
reappointment of
the auditor and
determining the
remuneration
5. Proposal on
reviewing the
performance of
the audit
committee and the
summary report
on the audit work
of the accounting
firm in 2022
6. Proposal on
reviewing the
2022 internal
control self-
evaluation report
7. Proposal on
reviewing the
provision for asset
impairment in
2022
8. Proposal on
reviewing the first
quarterly report of
2023
9. Proposal on
reviewing the
internal audit
work plan for
2023
According to the
actual situation of
The second meeting Proposal on the company,
Wang
of the audit reviewing the after full
Shouhai, Xin August 28,
committee of the 1 2023 semi-annual communication
Li, Zhong 2023
board of directors in report and its and discussion,
Zhigang
2023 summary the motion was
passed
unanimously.
The third meeting of Wang 1. Proposal on According to the
the audit committee Shouhai, Xin October 27, reviewing the actual situation of
1
of the board of Li, Zhong 2023 third quarterly the company,
directors in 2023 Zhigang report of 2023 after full
2. Proposal on communication
reviewing the and discussion,
accrual of asset all proposals were
impairment unanimously
provision for the passed.
first three quarters
of 2023
1. Proposal on
Reviewing the
2023 Internal
Control
Evaluation Work
Plan
2. Proposal on
reviewing the
operations
management audit
report for 2022 in
According to the
respect of the
actual situation of
enterprises owned
The Fourth Meeting the company,
Wang by the Company
of the Audit after full
Shouhai, Xin November 3. Proposal on
Committee of the 1 communication
Li, Zhong 24, 2023 reviewing the
Board of Directors and discussion,
Zhigang economic
in 2023 all proposals were
responsibility
unanimously
audit report for
passed.
the term of Mr.
Jiang Chongyou
4. Proposal on
reviewing the
report on the
procedures and
financial
statements and
audit for the
construction of
two seiners
1. Proposal on
reviewing the
According to the
annual
actual situation of
The first meeting of remuneration and
the company,
the remuneration Zhong the incentive
after full
and appraisal Zhigang, Xin January 17, payment plan for
1 communication
committee of the Li, Wang 2023 managerial
and discussion,
board of directors in Shouhai members
all proposals were
2023 2. Proposal on
unanimously
reviewing the
passed.
payroll settlement
plan for 2022
According to the
Proposal on actual situation of
The second meeting
reviewing the the company,
of the remuneration Zhong
execution of the after full
and appraisal Zhigang, Xin April 21,
1 payroll budget for communication
committee of the Li, Wang 2023
2022 and the and discussion,
board of directors in Shouhai
payroll budget the motion was
2023
plan for 2023 passed
unanimously.
According to the
actual situation of
Proposal on
The first meeting of the company,
reviewing the
the Strategy Lu Lianxing, after full
January 17, Three-Year
Committee of the Xin Li, Zhong 1 communication
2023 Rolling
Board of Directors Zhigang and discussion,
Development Plan
in 2023 the motion was
(2022-2024)
passed
unanimously.
According to the
actual situation of
The second meeting the company,
Proposal on
of the Strategy Lu Lianxing, after full
April 21, reviewing the
Committee of the Xin Li, Zhong 1 communication
2023 investment plan
Board of Directors Zhigang and discussion,
for 2023
in 2023 the motion was
passed
unanimously.
8. Work of the Supervisory Committee
Whether the board of supervisors found any risks in the Company in the supervision activities during the reporting period
□ Yes No.
The Supervisory Committee had no objection to the supervisory matters during the reporting period.
IX. The Company's employees
1. Number of employees, professional composition and education level
Number of active employees of the parent company at the end
174
of the reporting period (person)
Number of active employees of major subsidiaries at the end of
744
the reporting period (person)
Total number of active employees at the end of the reporting
918
period (person)
Total number of employees receiving salaries in the current
918
period (person)
Number of retired employees (persons) for whom parent
224
company and major subsidiaries need to bear expenses
Professional composition
Major Constituent Category The number of professional constituents (person)
Production staff 667
Salesperson 27
Technical staff 35
Financial officer 39
Administration staff 150
total 918
Education level
Education level category Quantity (person)
Master 25
Undergraduate 99
Specialist 104
Secondary school 159
High school and below 531
Total 918
2. Remuneration policy
Scientifically formulates a salary management system based on the market, and improves a comprehensive salary system that pays
for "position, performance, and ability".
3. Training plan
According to the Company's high-quality development needs and the diverse training needs of employees, various forms of
employee trainings are carried out in different levels and categories.
4. Labor outsourcing
□Applicable Not Applicable
X. The Company's profit distribution and capitalization of capital reserves
Profit distribution policy during the reporting period, especially the formulation, implementation or adjustment of the cash dividend
policy
□Applicable Not Applicable
The Company made a profit during the reporting period and the parent company’s profits available to shareholders were positive, but
no cash dividend distribution plan was proposed
□Applicable Not Applicable
Profit distribution and conversion of capital reserves into share capital during the reporting period
□Applicable Not Applicable
The Company plans not to distribute cash dividends or bonus shares, or increase share capital from public reserves.
XI. Implementation of the Company's equity incentive plan, employee stock ownership plan
or other employee incentive measures
□Applicable Not Applicable
During the reporting period, the Company had no equity incentive plan, employee stock ownership plan or other employee incentive
measures and their implementation.
XII. Construction and implementation of internal control system during the reporting period
1. Construction and implementation of internal control
The Company has a relatively complete internal control system, which is constantly updated, supplemented and revised
according to development changes and actual conditions. The Company's operations strictly implement various internal control
systems.
2. Details of the major deficiencies in internal control discovered during the reporting period
□ Yes No
XIII. The Company's management and control over subsidiaries during the reporting period
Problems
Company Integration Resolve Follow-up
Integration plan Encountered in Measures taken
Name progress progress solution plan
Integration
not applicable not applicable not applicable not applicable not applicable not applicable not applicable
14. Internal control self-assessment report or internal control audit report
1. Internal control self-assessment report
Disclosure date of the full text of the
April 26, 2024
internal control evaluation report
Disclosure index of the full text of the
www.cninfo.com.cn
internal control evaluation report
The ratio of the total assets of the units
included in the evaluation scope to the
99.63%
total assets of the Company's
consolidated financial statements
The ratio of the operating income of
units included in the evaluation scope to
100.00%
the operating income of the Company's
consolidated financial statements
Defect identification standard
category financial report non-financial reporting
Major flaw: Major flaw:
a. Directors, supervisors and senior a. Violation of national laws and
executives commit fraud; regulations, such as environmental
b. The external audit found that there was pollution;
a material misstatement in the financial b. Project decision-making procedures
statements of the current period, but the are unscientific and lack of democratic
internal control failed to discover the decision-making procedures lead to
misstatement during the operation; decision-making mistakes;
c. Ineffective supervision of internal c. resignation of management personnel
control by the audit committee and or technical personnel;
internal audit agency; d. Frequent negative media news;
Important deficiencies: single e. The results of internal control
Qualitative standard
deficiencies or together with other evaluation, especially major or important
deficiencies lead to the inability to deficiencies have not been rectified;
prevent or discover and correct the f. Lack of system control or systematic
misstatements in the financial report in a failure of systems for important
timely manner, although they do not businesses.
reach and exceed the major deficiencies, Important defect: The seriousness of the
but should still attract the attention of the nature of the business involved in a
management; other situations are single defect or together with other
determined according to the degree of defects, and its direct or potential
impact. negative impact, do not reach or exceed
Common deficiencies: other internal the major defect, but should still attract
control deficiencies that do not constitute the attention of the management; other
major or important deficiencies. situations are determined according to
the degree of impact.
Common deficiencies: other internal
control deficiencies that do not constitute
major or important deficiencies.
The quantitative standard for internal
control deficiencies in financial reports is
determined by their impact on financial
statements, that is, comparing the amount
The amount of direct property loss is
misstated or omitted (that is, the amount
compared with a certain percentage of
affected by internal control deficiencies)
the Company's total profit in the current
by finance statements which may be or
consolidated financial statements to
have been caused by internal control
determine the type of internal control
deficiencies with certain proportion of
defects, as follows:
the total profit in the Company’s current
If the amount of direct property loss is
consolidated financial statements, so as
greater than 5% of the total profit, it shall
Quantitative standard to determine the type of internal control
be judged as a major defect;
defects, as follows:
If the amount of direct property loss is
If the impact of internal control defects is
greater than 3% and less than 5%
greater than 5% of the total profit, it is
(inclusive) of the total profit, it is judged
judged as a major defect;
as an important defect;
If the impact of internal control defects is
If the amount of direct property loss is
greater than 3% and less than 5%
less than 3% (inclusive) of the total
(inclusive) of the total profit, it is
profit, it is judged as a common defect.
determined to be an important defect;
If the impact of internal control defects is
less than 3% (inclusive) of the total
profit, it is judged as a common defect.
Number of major deficiencies in
0
financial reports (pieces)
Number of major deficiencies in non-
0
financial reporting (pieces)
Number of important deficiencies in
0
financial reports (pieces)
Number of important deficiencies in non-
0
financial reporting (pieces)
2. Internal control audit report
Applicable □ Not applicable
Deliberative Opinion Paragraph in Internal Control Audit Report
We believe that your Company maintained effective internal control over financial reporting in all material respects in accordance
with the Basic Standards for Enterprise Internal Control and relevant regulations on December 31, 2023.
Disclosure of Internal Control Audit Report disclosure
Disclosure date of the full text of the internal control audit
April 26, 2024
report
Internal control audit report full text disclosure index www.cninfo.com.cn
Types of Internal Control Audit Report Opinions standard unqualified opinion
Whether there are material deficiencies in non-financial
no
reporting
Does the accounting firm issue an internal control audit report with non-standard opinions?
□ Yes No
Whether the internal control audit report issued by the accounting firm is consistent with the self-evaluation report of the board of
directors
Yes □ No
XV. The rectification of problems in the self-examination of the special action of corporate
governance of listed companies
Not applicable
Section V Environmental and Social Responsibility
I. Major environmental issues
Whether the listed company and its subsidiaries belong to the key pollutant discharge enterprises announced by the environmental
protection department
□ Yes No
Administrative penalties due to environmental issues during the reporting period
The impact on the
The company's
Company or Reason for production and
Violation Penalty result corrective
Subsidiary Name punishment operation of listed
measures
companies
none none none none none none
Other environmental information disclosed by reference with key pollutant discharge units
The Company and its subsidiaries do not belong to the key pollutant discharge enterprises announced by the environmental
protection department.
Measures and effects taken to reduce its carbon emissions during the reporting period
□Applicable Not Applicable
Reasons for not disclosing other environmental information
Not Applicable
II. Social Responsibility
1. Serving Rural Revitalization
The Company took the initiative to serve the overall interests. It sent four Party cadres to participate in Shandong’s campaign of
serving the development of communities, rural areas, projects, and enterprises, playing an active role in supporting people’s
livelihoods and promoting high-quality economic and social development.
2. Contributing to Public Benefits and Charity Projects
The Company was deeply engaged in the “doing concrete work for the public” campaign, took part in more than 40 volunteer
services, including blood donation, free clinic services, civilization promotion, hygiene and sanitation, and visits to those in
difficulties, and donated various supplies worth about RMB200,000.
The Company carried out the “Charitable One-day Donation” activity and donated RMB56,000, which was transferred to the
account of the Shandong Charity Federation for use in charity activities, including supporting the impoverished, the sick, and the
disabled, providing relief to natural disasters, and assisting in rural revitalization and public health events.
3. Fulfilling the Responsibility Overseas
Zhonglu Shipping’s SEA PEARL 1 successfully rescued two fishermen in danger in the Federated States of Micronesia and was
commended by the Chinese embassy in the Federated States of Micronesia and the fishery administration of the Federated States of
Micronesia. It demonstrated the responsibilities of a Chinese state-owned enterprise and built a positive image among international
fishing organizations and the oceanic shipping industry.
Zhonglu’s representative office in Ghana contributed to local talent development by helping two management staff members
from the Ministry of Fisheries and Aquaculture Development of Ghana successfully enroll in the postgraduate program in fishery
development at Nanjing Agricultural University; it proactively participated in the “Return to the Campus” program initiated by
TEMEEF by donating 25,000 cedi to support local impoverished students in Tema to return to the campus.
4. Practicing Humanistic Care
The Company vigorously implemented the “humanistic care project,” respected and protected the basic rights and interests of
employees, attached great importance to staff development, cared about their lives, and continuously improved their sense of gain,
well-being, and security. The Company has rolled out 30 relevant policies on humanistic care, spent RMB7.45 million in various
financial subsidies, carried out 74 caring projects, and organized visits to 2,544 individuals.
The Company has built law-abiding, harmonious, and stable labor relations, constantly improved the remuneration and benefit
system, and refined the democratic management mechanism to safeguard the democratic rights and interests of employees.
The Company has improved the staff development system and perfected the channels for talent selection, skill improvement,
and promotion in a bid to promote talent echelon building. In 2023, the Company selected and hired 50 employees, promoted nine
post-90s employees to management positions, and issued high-level occupational qualifications to five employees.
The Company strengthened caring for employees by setting up the Zhonglu “Benevolence” fund, building the “delivering
warmth to the boat, to home, to heart” caring mechanism, regularly visiting frontline crew members, employees in difficulties and
their families, and implementing a combination of caring measures, including staff physical check-ups, awards for children who pass
entrance exams, and staff honorary retirement, to tangibly make employees feel the caring of the Company.
The Company organized mass cultural and sports activities in various forms, strengthened the “cultural oceanic fishing” staff
base building, furnished distant-water fishing boats with boat book corners and cultural and sports amenities, enriched staff’s cultural
activities, and continuously enhanced employee well-being and corporate cohesion.
In 2023, the Labor Union of the Company was recommended to be a National Model Home for Employees by the National
Committee of Agricultural, Forestry, Water Conservancy and Meteorological Workers’ Union; the Zhonglu Tuna Popular Science
Museum was granted the title “Base under Shandong Provincial SASAC’s Caring for Next Generation’s Education;” a captain of a
distant-water fishing boat won the title of the third session of “Most Beautiful Employee for Ecological Conservation” granted by the
National Committee of Agricultural, Forestry, Water Conservancy and Meteorological Workers’ Union; multiple works by
employees won awards in the National Agriculture, Fishery, and Animal Husbandry Staff Thematic Photography Competition and
Short Video Competition; six individuals and four Party branches received commendations from the Shandong Provincial SASAC
and Shandong State-owned Assets Investment Holding; and one overseas employee won the title “Meritorious Individual” granted by
Shandong State-owned Assets Investment Holding.
III. Consolidate and expand the achievements of poverty alleviation and rural revitalization
none
Section VI Important Matters
I. Fulfillment of commitments
1. Commitments fulfilled by the Company’s actual controller, shareholders, related parties, acquirers, the
Company and other relevant parties, and commitments that have not been fulfilled by the end of the
reporting period
Applicable □ Not applicable
Promising Commitment Commitment Commitment
Reason Commitment content Fulfillment
party type time period
1. The Company does not directly
or indirectly own any shares,
equities or interests in any other
enterprises (hereinafter
collectively referred to as
"Competitors") that may compete
with Zhonglu OCEANIC, and
will not directly or indirectly
invest in or acquire any
Competitors; 2. If any business
opportunity obtained by the
Company and other companies
controlled by the Company from
any third party constitutes or may
constitute substantial competition
with the business of Zhonglu
OCEANIC, the Company will
Continue to
Shandong immediately notify Zhonglu
be effective
Commitment Provincial OCEANIC, and transfer such
during the
made in State- business opportunity to Zhonglu
Commitment period when
acquisition owned OCEANIC to avoid horizontal July 23,
to horizontal the in progress
report or Assets competition or potential 2008
competition Company
equity change Investment horizontal competition with
controls
report Holding Zhonglu OCEANIC; 3. The
Zhonglu
Co., Ltd. Company and other companies
OCEANIC
controlled by the Company will
not offer any business secrets
such as technical information,
process and sales channel to other
companies, enterprises,
organizations and individuals
which compete with the business
of Zhonglu OCEANIC; 4. The
Company promises not to use the
Company's position as a
controlling shareholder to damage
the rights and interests of Zhonglu
OCEANIC and other shareholders
of Zhonglu OCEANIC; 5. The
Company is willing to bear the
direct and indirect economic
losses, claims and additional
expenses caused by the violation
of the above commitments.
1. The related party transactions
between the Company and other
companies controlled by the
Company and Zhonglu
OCEANIC strictly abide by the
relevant provisions of laws and
regulations, and will be conducted
on the basis of equality and
voluntariness in accordance with
the principles of fairness, equality
and equivalent compensation. The
transaction price will be
determined according to the
reasonable price recognized by
the market. 2. The Company and
other companies controlled by the
Company will strictly abide by
the regulations on the avoidance
of related party transactions in the
articles of association of Zhonglu
OCEANIC, and the related party
transactions involved will be
carried out in accordance with the
related party transactions
Continue to
Shandong decision-making procedures of
be effective
Commitment Provincial Zhonglu OCEANIC, and will
during the
made in State- perform legal procedures and
Related period when
acquisition owned information disclosure July 23,
transaction the in progress
report or Assets obligations. 3. The Company and 2008
commitment enterprise
equity change Investment other companies controlled by the
controls
report Holding Company guarantee to strictly
Zhonglu
Co., Ltd. abide by laws, regulations and
OCEANIC
normative documents as well as
the relevant provisions of the
articles of association of Zhonglu
OCEANIC, and to exercise
shareholder rights and perform
shareholder obligations on an
equal footing with other
shareholders in accordance with
legal procedures, not to take
advantage of the position of the
controlling shareholder to seek
improper interests, and not to
damage the legitimate rights and
interests of Zhonglu OCEANIC
and other shareholders. 4. The
above commitments will continue
to be effective during the period
when the Company controls
Zhonglu OCEANIC. If the
Company fails to fulfill the
commitments made in this letter
of commitment and causes any
losses and consequences to
Zhonglu OCEANIC, the
Company will bear the
corresponding liability for
compensation.
Whether the
promise is
yes
fulfilled on
time
If the
commitment
is overdue
and not
fulfilled, the
specific
reasons for none
the failure to
fulfill and the
next work
plan shall be
explained in
detail.
2. If there is a profit forecast for the Company's assets or projects, and the reporting period is still in the
profit forecast period, the Company will explain whether the assets or projects have reached the original
profit forecast and why
□Applicable Not Applicable
II. Non-operating capital occupation of listed companies by controlling shareholders and
other related parties
□Applicable Not Applicable
During the reporting period of the Company, there was no non-operating capital occupation of listed companies by controlling
shareholders and other related parties.
III. Illegal external guarantees
□Applicable Not Applicable
During the reporting period, the Company had no external guarantees in violation of regulations.
IV. Explanation of the board of directors on the latest “non-standard audit report”
□Applicable Not Applicable
V. Explanation of the board of directors, board of supervisors and independent directors (if
any) on the “non-standard audit report” of the accounting firm for the reporting period
□Applicable Not Applicable
VI. Compared with the financial report of the previous year, an explanation on the changes in
accounting policies and accounting estimates or the correction of major accounting errors
□Applicable Not Applicable
During the Reporting Period, the Company had no changes in accounting policies and accounting estimates or the correction of major
accounting errors.
VII. Explanation on changes in the scope of consolidated statements compared with the
financial report of the previous year
□Applicable Not Applicable
During the reporting period of the Company, there was no change in the scope of consolidated statements.
VIII. Appointment and Dismissal of Accounting Firms
The current accounting firm
Domestic accounting firm name Shanghui Accounting Firm (Special General Partnership)
Domestic accounting firm remuneration (RMB 10,000) 35
Consecutive years of audit services provided by domestic
3
accounting firms
The name of the certified public accountant of the domestic
Xu Mao, Ma Haijun
accounting firm
Consecutive years of audit services of CPAs of domestic
Xu Mao (2 year), Ma Haijun (3 years)
accounting firms
Whether to change the accounting firm in the current period
□ Yes No
Employment of internal control audit accounting firms, financial consultants or sponsors
Applicable □ Not applicable
At the same time, the Company hired Shanghui Accounting Firm (special general partnership) as the Company's internal control
audit accounting firm in 2023, and paid a total of RMB 100,000 in remuneration.
IX. Facing delisting after annual report disclosure
□Applicable Not Applicable
X. Matters related to bankruptcy and reorganization
□Applicable Not Applicable
During the reporting period, there were no matters related to bankruptcy and reorganization of the Company.
XI. Major litigation and arbitration matters
□Applicable Not Applicable
During the reporting period, the Company had no major lawsuits or arbitrations.
XII. Punishment and rectification
□Applicable Not Applicable
There was no punishment and rectification in the reporting period of the Company.
XIII. Integrity status of the Company and its controlling shareholders and actual controllers
Applicable □ Not applicable
During the reporting period, the Company, its controlling shareholders and actual controllers did not fail to perform effective court
judgments, or owe large amounts of debts that were due and unpaid.
XIV. Significant connected transactions
1. Connected transactions related to daily operations
□Applicable Not Applicable
During the reporting period of the Company, there was no connected transaction related to daily operation.
2. Connected transactions in the acquisition and sale of assets or equity
□Applicable Not Applicable
During the reporting period, there was no connected transaction involving asset or equity acquisition or sale.
3. Connected transactions of joint foreign investment
□Applicable Not Applicable
During the reporting period, there was no connected transaction involving joint external investment.
4. Related creditor's rights and debts
□Applicable Not Applicable
During the reporting period, the company had no related creditor's rights and debts.
5. Contacts with associated financial companies t
□Applicable Not Applicable
There is no deposit, loan, credit or other financial business between the Company and associated financial company or the related
party.
6. Communications between financial companies controlled by the Company and related parties
□Applicable Not Applicable
There is no deposit, loan, credit or other financial business between the financial company controlled by the Company and related
parties.
7. Other major connected transactions
□Applicable Not applicable
During the Reporting Period, the Company had no other significant connected transactions.
XV. Significant contracts and their performance
1. Matters concerning trusteeship, contracting and leasing
(1) Trusteeship
Applicable □ Not applicable
Explanation on trusteeship
April 2022 , the Company has been entrusted by Shandong State-owned Assets Investment Holding to manage its subsidiary
Zhongtai Xincheng Asset Management Co., Ltd. (hereinafter referred to as "Zhongtai Xincheng"); as the shareholder proxy of
Zhongtai Xincheng, the Company shall comply with relevant provisions of the entrusted management agreement. Zhongtai Xincheng
is not included in the scope of the Company's consolidated statements.
Projects that bring profit or loss to the Company amounting to more than 10% of the Company's total profit in the reporting period
□Applicable Not Applicable
During the reporting period of the Company, there was no trusteeship project which brings profit or loss for the Company amounting
to more than 10% of the total profit of the Company.
(2) Contracting status
□Applicable Not Applicable
There was no contracting in the reporting period of the Company.
(3) Lease situation
□Applicable Not Applicable
There was no lease in the reporting period of the Company.
2. Major guarantee
□Applicable Not Applicable
During the reporting period, the Company had no major guarantees.
3. Entrusting others to manage cash assets
(1) Entrusted financial management
□Applicable Not Applicable
There was no entrusted wealth management in the reporting period of the Company.
(2) Entrusted loans
□Applicable Not Applicable
There was no entrusted loan in the reporting period of the Company.
4. Other major contracts
□Applicable Not Applicable
There were no other major contracts in the reporting period of the Company.
XVI. Explanation of other important matters
Applicable □Not Applicable
1. During the Reporting Period, Mr. Lu Lianxing resigned as chairman and director of the eighth session of directors of the
Company; Mr. Wang Shouhai resigned as independent director of the board of directors of the Company. For details, refer to the
Announcement on the Resignation of Chairman (Announcement No.: 2023-13) and the Announcement on the Resignation of
Independent Director (Announcement No.: 2023-24) disclosed by the Company on the China Securities Journal and the CNINFO
website (www.cninfo.com.cn) on May 6, 2023, and December 13, 2023, respectively.
2. The Company received written resignation letters from Ms. Xin Li, director of the Company, and Mr. Liu Zhihui, chairman of
the board of supervisors, on April 8, 2024. Ms. Xin Li applied for resignation as director of the eighth session of directors of the
Company; Mr. Liu Zhihui applied for resignation as chairman and supervisor of the eighth session of supervisors of the Company.
On April 25, 2024, upon deliberation at the 2024 first extraordinary general meeting of the Company, it was approved that Mr. Liang
Shanglei and Mr. Zeng Xianzhong be elected as directors of the eighth session of directors of the Company, Mr. Wu Hengguang be
elected as independent director of the eighth session of directors of the Company, and Ms. Zhou Yi be elected as supervisor of the
eighth session of supervisors of the Company. On the same day, upon deliberation at the 15th meeting of the eighth session of
directors of the Company and the eighth meeting of the eighth session of supervisors, it was approved that Mr. Liang Shanglei be
elected as chairman of the eighth session of directors of the Company and Ms. Zhou Yi be elected as chairman of the eighth session
of supervisors of the Company. For details, refer to the Announcement on the Resignation of Directors and Supervisors
(Announcement No.: 2024-04), the Announcement on the Resolution of the First Extraordinary General Meeting in 2024
(Announcement No.: 2024-09), the Announcement on the Resolution of the 15th Meeting of the Eighth Session of Directors
(Announcement No.: 2024-10), and the Announcement on the Resolution of the Eighth Meeting of the Eighth Session of Supervisors
(Announcement No.: 2024-18) disclosed by the Company on the China Securities Journal and the CNINFO website
(www.cninfo.com.cn) on April 10, 2024, and April 26, 2024, respectively.
3. The 2022 annual general meeting of the Company considered and approved the Proposal on Changing Company’s Domicile
and Amending Articles of Incorporation, changing the Company’s domicile from “29 Miaoling Road, Qingdao, Shandong” to “31
Xianxialing Road, Qingdao, Shandong.” For details, refer to the Announcement on the Resolution of the Annual General Meeting in
2022 (Announcement No.: 2023-14) disclosed by the Company on the China Securities Journal and the CNINFO website
(www.cninfo.com.cn) on May 26, 2023. As of now, the change to the Company’s domicile has yet to be submitted to the Qingdao
Municipal Bureau of Administrative Services for registration. The registered address after the change is subject to the approval of the
administrative authority.
XVII. Significant events of the Company's subsidiaries
□Applicable Not applicable
Section VII Changes in Shares and Information on Shareholders
1. Changes in shares
1. Changes in shares
Unit: share
Before this change Increase or decrease in this change (+, -) After this change
Issuance of Bonus Provident fund
Quantity Proportion Other Subtotal Quantity Proportion
new shares shares transfer
1. Unlisted
128,071,320 48.13% 128,071,320 48.13%
tradable shares
1. Promoter
128,071,320 48.13% 128,071,320 48.13%
shares
Of which:
shares held by 127,811,320 48.03% 127,811,320 48.03%
the state
Shares held
by domestic legal 260,000 0.10% 260,000 0.10%
persons
Shares held
by foreign
legal persons
Other
2. Raising
legal person
shares
3. Internal
staff shares
4. Preferred
stock or other
2. Listed tradable
138,000,000 51.87% 138,000,000 51.87%
shares
1. RMB
ordinary shares
2. Foreign
shares listed in 138,000,000 51.87% 138,000,000 51.87%
China
3. Foreign
shares listed
overseas
4. Others
3. Total number
266,071,320 100.00% 266,071,320 100.00%
of shares
Reason for Share Change
□Applicable Not Applicable
Approval status of shareholding changes
□Applicable Not Applicable
Transfer status of share changes
□Applicable Not Applicable
The impact of shareholding changes on financial indicators such as basic earnings per share, diluted earnings per share, and net assets
per share attributable to ordinary shareholders of the Company in the last year and the latest period
□Applicable Not Applicable
Other content that the Company deems necessary or required by securities regulators to disclose
□Applicable Not Applicable
2. Changes in restricted shares
□Applicable Not Applicable
II. Securities Issuance and Listing
1. Securities issuance (excluding preferred shares) during the reporting period
□Applicable Not Applicable
2. Explanation on changes in the total number of shares of the Company and the structure of shareholders,
and changes in the structure of the Company's assets and liabilities
□Applicable Not Applicable
3. Existing internal employee shares
□Applicable Not Applicable
III. Shareholders and actual controllers
1. Number of shareholders and shareholding status of the Company
Unit: share
The total
Total number
number of The total number of
of preferred
ordinary preference shareholders
Total number of shareholders
shareholders at whose voting rights
ordinary with voting
the end of the have been restored at
shareholders at the 9,570 9,576 rights restored 0 0
previous the end of the month
end of the reporting at the end of
month before preceding the annual
period the reporting
the annual report disclosure date (if
period (if any)
report any) (see note 8)
(see note 8)
disclosure date
Shareholdings of shareholders holding more than 5% of the shares or the top 10 shareholders(excluding shares lent through refinancing)
Number Pledge, Mark or
Changes Number of
Number of shares of Frozen Situation
Nature of Shareholding during the unlisted
Shareholder name held at the end of tradable
shareholders ratio reporting tradable Share
the reporting period shares Quantity
period shares held Status
held
Shandong State-
Not
owned Assets State-owned
47.25% 125,731,320 0 125,731,320 0 Applic 0
Investment Holding legal person
able
Co., Ltd.
Not
foreign natural
Chen Tianming 2.16% 5,760,427 0 0 5,760,427 Applic 0
person
able
Not
Domestic
Zhu Shuzhen 1.88% 5,002,046 0 0 5,002,046 Applic 0
natural person
able
Not
Domestic
Cai Yujiu 1.75% 4,668,300 0 0 4,668,300 Applic 0
natural person
able
Not
Domestic
Zhan Changcheng 1.07% 2,854,515 160700 0 2,854,515 Applic 0
natural person
able
GUOTAI JUNAN
Not
SECURITIES Foreign legal
1.04% 2,761,025 -191400 0 2,761,025 Applic 0
（HONG person
able
KONG）LIMITED
Not
Domestic
Chen Cirou 0.73% 1,954,850 938090 0 1,954,850 Applic 0
natural person
able
China National Not
State-owned
Heavy Duty Truck 0.73% 1,950,000 0 1,950,000 0 Applic 0
legal person
Group Co., Ltd. able
Shenwan
Not
Hongyuan Foreign legal
0.69% 1,847,854 -50000 0 1,847,854 Applic 0
Securities (Hong person
able
Kong) Co., Ltd.
Not
Domestic
Lin Mingyu 0.56% 1,500,001 0 0 1,500,001 Applic 0
natural person
able
Strategic investors or general legal
persons becoming the top 10
not applicable
shareholders due to allotment of new
shares (if any) (see Note 3)
Explanation on the related relationship The Company does not know whether it has an associated relationship or is a person acting in concert as
or concerted action of aforesaid stipulated in the "Administrative Measures for Information Disclosure of Shareholding Changes in Listed
shareholders Companies".
Explanation of the above-mentioned
shareholders involved in
none
entrusted/entrusted voting rights and
waiver of voting rights
Special instructions for repurchase
accounts among the top 10 none
shareholders (if any) (see Note 10)
Shareholdings of the top 10 tradable shareholders
Number of tradable shares held at the end of the Type of shares
Shareholder name
reporting period Type of shares Quantity
Chen Tianming 5,760,427 Domestic listed foreign shares 5,760,427
Zhu Shuzhen 5,002,046 Domestic listed foreign shares 5,002,046
Cai Yujiu 4,668,300 Domestic listed foreign shares 4,668,300
Zhan Changcheng 2,854,515 Domestic listed foreign shares 2,854,515
GUOTAI JUNAN 2,761,025 Domestic listed foreign shares 2,761,025
SECURITIES (HONG KONG)
LIMITED
Chen Cirou 1,954,850 Domestic listed foreign shares 1,954,850
Shenwan Hongyuan Securities
(Hong Kong) Limited 1,847,854 Domestic listed foreign shares 1,847,854
company
Lin Mingyu 1,500,001 Domestic listed foreign shares 1,500,001
Cao Yifan 1,280,000 Domestic listed foreign shares 1,280,000
Zhan Hanbin 1,047,044 Domestic listed foreign shares 1,047,044
Explanation on the associated
relationship or concerted action among
the top 10 shareholders of tradable The Company is not aware of whether the aforesaid shareholders have any associated relationship or are
shares not subject to sales restrictions, persons acting in concert as stipulated in the "Administrative Measures for the Disclosure of Information on
and between the top 10 shareholders of Changes in Shareholding of Shareholders of Listed Companies".
tradable shares not subject to sales
restrictions and the top 10 shareholders
Explanation on the participation of the
top 10 ordinary shareholders in the
none
margin trading and short selling business
(if any) (see Note 4)
Top ten shareholders’ participation in lending shares through refinancing
□op ten sharNot applicable
Changes in top ten shareholders compared with the previous period
Applicable Not applicable
Unit: share
Changes in top ten shareholders compared with the end of the previous period
Quantity of shares held in the
Quantity of shares lent through shareholder’s ordinary account and credit
Addition/withdraw refinancing that were not returned as at account and shares lent through
Shareholder’s the end of the Reporting Period refinancing that were not returned as at
al in the Reporting
name (full name) the end of the Reporting Period
Period
Proportion in total Proportion in total
Total quantity Total quantity
shares shares
Chen Cirou Addition 0 0.00% 0 0.00%
Wang Dongsheng Withdrawal 0 0.00% 0 0.00%
Whether the Company’s top 10 shareholders of common shares and top 10 shareholders of common shares not subject to sales
restrictions conducted agreed repurchase transactions during the reporting period
□ Yes No
The Company's top 10 shareholders of common shares and top 10 shareholders of common shares not subject to sales restrictions did
not conduct agreed repurchase transactions during the reporting period.
2. Information about the controlling shareholder of the Company
Nature of the controlling shareholder: local state-owned holding
Type of controlling shareholder: legal person
Legal
Controlling Date of
representative/ Organization Code Main business
shareholder name establishment
Principal
Operation management and disposal
of state-owned property (share)
Shandong Provincial
rights, asset management, equity
State-owned Assets
Luan Jian March 25, 1994 91370000163073167C investment management and
Investment Holding
operation, corporate restructuring,
Co., Ltd.
mergers and acquisitions, investment
consulting.
Equity of other
domestic and foreign
listed companies held
Not Applicable
by controlling
shareholders during the
reporting period
Changes in controlling shareholders during the reporting period
□Applicable Not Applicable
During the reporting period, the controlling shareholder of the Company remained unchanged.
3. The actual controller of the Company and its persons acting in concert
The nature of the actual controller: local state-owned assets management agency
Type of actual controller: legal person
Actual controller Legal representative/ Date of Organization
Main business
name Principal establishment Code
Shandong Provincial
People's Government Fulfilling the investor's duties,
State-owned Assets supervising the maintenance and
Man Shengang June 18, 2004 None
Supervision and appreciation of the state-owned assets
Administration under supervision, etc.
Commission
Equity of other
domestic and foreign
listed companies
controlled by the not applicable
actual controller
during the reporting
period
Changes in the actual controller during the reporting period
□Applicable Not Applicable
The actual controller of the Company did not change during the reporting period.
Block diagram of the property rights and control relationship between the Company and the actual controller
Shandong Provincial People's Government State-owned Assets Supervision and Administration Commission
70%
Shandong Provincial State-owned Assets Investment Holding Co., Ltd.
47.25%
The Company
The actual controller controls the Company through trust or other asset management methods
□Applicable Not Applicable
4. The accumulative number of pledged shares of the Company's controlling shareholder or the largest
shareholder and its persons acting in concert accounts for 80% of the Company's shares held by it
□Applicable Not Applicable
5. Other legal person shareholders holding more than 10% of the shares
□Applicable Not Applicable
6. Restrictions on reduction of shareholding by Controlling shareholders, actual controllers, reorganization
parties and other commitment subjects
□Applicable Not Applicable
IV. Specific implementation of share repurchase during the reporting period
Implementation progress of share repurchases
□Applicable Not Applicable
The progress of the implementation of the reduction of repurchased shares by means of centralized bidding transactions
□Applicable Not Applicable
Section VIII Preferred Shares
□Applicable Not Applicable
During the reporting period, the Company had no preferred shares.
Section IX Bonds
□Applicable Not Applicable
Section X Financial Report
Auditor's Report
SCPAR (2024) No. 3928
Date: April 25, 2024
To the Shareholders of Shandong Zhonglu Oceanic Fisheries Co., Ltd:
I. Opinion
We have audited the financial statements of Shandong Zhonglu Oceanic Fisheries Co., Ltd (hereafter
referred to as “the Company”), which comprise the consolidated and the Company's balance sheets as
at December 31, 2023, the consolidated and the Company's statements of income, the consolidated and
the Company's statements of cash flows and the consolidated and the Company's statements of
changes in equity for the year then ended, and notes to the financial statements.
In our opinion, the accompanying financial statements give a true and fair view of the financial position
of the Company as at December 31, 2023, and of its financial performance and cash flows for the year
then ended in accordance with Accounting Standards for Business Enterprises.
II. Basis for Opinion
We conducted our audit in accordance with Chinese Certified Public Accountants Auditing Standards.
Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the
Audit of the Financial Statements section of our report. We are independent of the Company in
accordance with the Code of Ethics for Chinese Certified Public Accountants and have fulfilled our
other ethical responsibilities in accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our audit opinion.
III. Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our
audit of the financial statements of the current period. These matters were addressed in the context of
our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not
provide a separate opinion on these matters.The key audit matters identified in our audit are as follows:
A. Revenue recognition
1. The Matter
Regarding income accounting policies, please refer to Note Ⅳ.27; Please refer to Note Ⅵ.36 for the
amount of income generated.
In 2023, your company's operating revenue amounted to 1145.2524 million yuan. As revenue is a key
indicator of company profits, there is an inherent risk of misstatement in whether revenue is based on
real transactions and whether it is included in appropriate accounting periods. Therefore, we have
identified revenue recognition as a key audit item.
2. Audit response
Our audit procedures for revenue recognition mainly include:
① Understand the internal control design related to revenue recognition in your company, evaluate the
effectiveness of the design and implement walkthrough testing, and check whether the relevant internal
control systems are effectively implemented;
② Verify the principles and methods of revenue recognition, combined with the essence of the
company's business and the "five step method", examine the contract signing methods and contents
under different business models, analyze the rights and obligations of the contract signing parties,
examine various performance obligations, identify the fulfillment of performance obligations over a
period of time, and determine whether the fulfillment of performance obligations at a certain point in
time complies with the provisions of the Enterprise Accounting Standards;
③ Check the authenticity of income and the basis for revenue recognition, such as sales contracts,
delivery orders, value statements or settlement documents, transportation bills, customs declaration
materials, bills of lading, credit policies, etc. Evaluate whether your company's revenue recognition
meets the requirements of the Enterprise Accounting Standards based on the collection of accounts
receivable after the period;
④ Conduct a cut-off test, select samples from income transactions recorded before and after the
balance sheet date, and check for any cross period income;
⑤ Implement a letter of confirmation procedure for major clients, extract sufficient samples to verify
the amount and balance of accounts receivable and contractual liabilities, and confirm the
reasonableness of revenue recognition.
B. The impairment of inventory
1. Key audit matters
Regarding inventory accounting policies, please refer to Note Ⅳ.11; Please refer to Note Ⅵ.6 for the
book balance and provision for impairment of inventory.
As of December 31, 2023, the book balance of your company's inventory is 573.2376 million yuan,
with a provision for impairment of 77.5381 million yuan and a book value of 495.6995 million yuan,
accounting for 24.20% of the total assets at the end of the period. Given the significant amount of
inventory and the significant judgment of management involved in the provision for inventory
impairment, we have identified the provision for inventory impairment as a key audit item.
2. Audit response
Our audit procedures for inventory impairment mainly include:
① Understand the design of internal controls related to inventory management and inventory
impairment in your company, evaluate the effectiveness of the design and implement walkthrough tests,
and check whether the relevant internal control systems are effectively implemented;
② Implementing inventory monitoring, checking the quantity, condition, and product shelf life of
inventory;
③ Obtain the inventory age list of ending inventory, conduct analytical review on inventory with
longer inventory age, and analyze whether the provision for inventory impairment is reasonable;
④ Analyze the changes in the provision for inventory impairment made in previous years during the
current period, and assess the adequacy of the provision for inventory impairment; Obtain the latest
product sales prices before and after the balance sheet date, sample the inventory sold after the balance
sheet date, and compare the actual selling price of the sample with the expected selling price;
⑤ Obtain the calculation table and relevant basis for impairment provision provision from the
management, evaluate the rationality of the key data provisioned, and recalculate to evaluate the
accuracy of the management's impairment calculation process;
⑥ Review whether the provision for inventory depreciation has been fully and appropriately disclosed
in accordance with the standard requirements.
IV. Other Information
The directors of the Company are responsible for the other information. The other information
comprises all of the information included in the annual report other than the financial statements and
our auditor’s report thereon.
Our opinion on the financial statements does not cover the other information and we do not express
any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other
information and, in doing so, consider whether the other information is materially inconsistent with the
financial statements or our knowledge obtained in the audit or otherwise appears to be materially
misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
V. Responsibilities of the Directors and Those Charged with Governance for the Financial
Statements
The directors of the Company are responsible for the preparation of financial statements that give a
true and fair view in accordance with Accounting Standards for Business Enterprises, and for such
internal control as the directors determine is necessary to enable the preparation of the financial
statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the Company’s ability
to continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Company or to
cease operations or have no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Company’s financial reporting
process.
VI. Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in
accordance with auditing standards will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic decisions of users taken on the
basis of these financial statements.
As part of an audit in accordance with auditing standards, we exercise professional judgement and
maintain professional scepticism throughout the audit. We also:
A. Identify and assess the risks of material misstatement of the financial statements, whether due to
fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting
a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may
involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
B. Obtain an understanding of internal control relevant to the audit in order to design audit procedures
that are appropriate in the circumstances.
C. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the directors.
D. Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and,
based on the audit evidence obtained, whether a material uncertainty exists related to events or
conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If
we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report
to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify
our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s
report. However, future events or conditions may cause the Company to cease to continue as a going
concern.
E. Evaluate the overall presentation, structure and content of the financial statements, and whether the
financial statements represent the underlying transactions and events in a manner that achieves fair
presentation.
F. Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Company to express an opinion on the financial statements. We are
responsible for the direction, supervision and performance of the group audit. We remain solely
responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned
scope and timing of the audit and significant audit findings, including any significant deficiencies in
internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant
ethical requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, related
safeguards.
From the matters communicated with those charged with governance, we determine those matters that
were of most significance in the audit of the financial statements of the current period and are therefore
the key audit matters. We describe these matters in our auditor’s report unless law or regulation
precludes public disclosure about the matter or when, in extremely rare circumstances, we determine
that a matter should not be communicated in our report because the adverse consequences of doing so
would reasonably be expected to outweigh the public interest benefits of such communication.
C.P.A
Mao Xu
Haijun Ma
Shanghai Certified Public Accountants (Special General Partnership)
Shanghai, China
Full text of the annual report of 2023, Shandong Zhonglu Oceanic Fisheries Co., Ltd.
Consolidated Balance Sheet
Dec 31,2023
Prepared by：Shandong Zhonglu Oceanic Fisheries Co., Ltd. Unit：RMB Yuan
Item Note As at 31/12/2023 As at 31/12/2022 Item Note As at 31/12/2023 As at 31/12/2022
Current assets: Current liabilities:
Cash at bank and on hand Ⅵ.1 262,127,423.03 227,264,342.31 Short-term loans Ⅵ.17 58,011,311.42 20,024,144.40
Financial assets held for trading Financial liabilities held for trading
Derivative financial assets Derivative financial liabilities
Notes receivable Ⅵ.2 Notes payable Ⅵ.18 35,000,000.00 -
Accounts receivable Ⅵ.3 48,424,004.91 57,833,671.83 Accounts payable Ⅵ.19 89,326,349.08 134,272,304.05
Receivables for financing Advances from customers Ⅵ.20 1,776,439.64 1,684,961.19
Prepayments Ⅵ.4 26,126,976.75 26,860,050.66 Contract liabilities Ⅵ.21 29,481,400.42 49,576,606.91
Other receivables Ⅵ.5 6,596,879.89 5,562,546.59 Employee benefits payable Ⅵ.22 63,219,358.85 55,116,034.18
Including:Interest receivable Taxes and surcharges payable Ⅵ.23 5,665,448.27 4,341,676.32
Dividends receivable Other payables Ⅵ.24 19,578,219.96 18,326,716.51
Inventories Ⅵ.6 495,699,535.13 426,125,273.33 Including:Interest payable - -
Contract assets Dividends payable 1,616,659.01 -
Held-for-sale assets Held-for-sale liabilities
Non-current liabilities due within
Non-current assets due within one year Ⅵ.25 8,837,283.90 6,502,041.67
one year
Other current assets Ⅵ.7 14,384,969.64 10,791,446.11 Other current liabilities Ⅵ.26 6,256.07 223,557.01
Total current assets 853,359,789.35 754,437,330.83 Total current liabilities 310,902,067.61 290,068,042.24
Non-current assets: Non-current liabilities:
Debt investments Long-term loans Ⅵ.27 390,665,507.16 283,557,577.77
Other debt investments Bonds payable
Long-term receivables Including: Preference shares
Long-term equity investments Ⅵ.8 1,414,031.32 1,983,923.48 Perpetual loans
Other equity instrument investments Lease liabilities
66
Full text of the annual report of 2023, Shandong Zhonglu Oceanic Fisheries Co., Ltd.
Other non-current financial assets Long-term account payable
Long-term employee benefits
Investment property Ⅵ.9 27,456,779.39 28,782,856.07 Ⅵ.28 543,215.85 616,935.20
payable
Fixed assets Ⅵ.10 1,019,386,437.83 630,970,963.32 Anticipation liabilities
Construction in process Ⅵ.11 65,288,052.12 344,727,296.32 Deferred income Ⅵ.29 51,980,968.73 13,500,315.67
Productive biological assets Deferred tax liabilities Ⅵ.15 2,476,855.62 2,610,499.36
Oil and gas assets Other non-current liabilities
Right-of-use assets Ⅵ.12 91,606.72 410,045.97 Total non-current liabilities 445,666,547.36 300,285,328.00
Intangible assets Ⅵ.13 60,956,382.69 62,627,704.04 Total liabilities 756,568,614.97 590,353,370.24
Development expenditures Shareholders' equity:
Goodwill Share capital Ⅵ.30 266,071,320.00 266,071,320.00
Long-term deferred expenses Ⅵ.14 3,354,279.19 79,090.36 Other equity instruments
Deferred tax assets Ⅵ.15 1,425,048.80 1,557,933.07 Including: Preference shares
Other non-current assets Ⅵ.16 15,402,660.37 12,851,990.71 Perpetual loans
Total non-current assets 1,194,775,278.43 1,083,991,803.34 Capital reserve Ⅵ.31 295,620,272.02 295,620,272.02
Less:treasury shares
Other comprehensive income Ⅵ.32 -3,370,081.48 -6,291,344.58
Special reserve Ⅵ.33 1,572.48 -
Surplus reserve Ⅵ.34 21,908,064.19 21,908,064.19
Undistributed profit Ⅵ.35 449,363,748.93 409,764,423.32
Equity attributable to parent company 1,029,594,896.14 987,072,734.95
Minority interests 261,971,556.67 261,003,028.98
Total equity 1,291,566,452.81 1,248,075,763.93
Total of assets 2,048,135,067.78 1,838,429,134.17 Total liabilities and equity 2,048,135,067.78 1,838,429,134.17
Person in charge of the company:liangshanglei Person in charge of accounting function:fuchuanhai Person in charge of accounting depertment:leilixin
67
Full text of the annual report of 2023, Shandong Zhonglu Oceanic Fisheries Co., Ltd.
Balance Sheet
Dec 31,2023
Prepared by：Shandong Zhonglu Oceanic Fisheries Co., Ltd. Unit：RMB Yuan
As at
Item Note As at 31/12/2023 As at 31/12/2022 Item Note As at 31/12/2022
31/12/2023
Current assets: Current liabilities:
Cash at bank and on hand 44,741,230.62 50,352,735.39 Short-term loans
Financial assets held for trading Financial liabilities held for trading
Derivative financial assets Derivative financial liabilities
Notes receivable Notes payable
Accounts receivable XVI.1 4,435,572.18 416,945.02 Accounts payable 20,928,446.50 44,867,412.91
Receivables for financing Advances from customers 1,776,439.64 1,684,961.19
Prepayments 8,580,637.18 11,978,519.28 Contract liabilities 15,236,924.77 19,914,211.04
Other receivables XVI.2 198,681,271.55 124,833,179.13 Employee benefits payable 23,238,500.79 16,132,001.87
Including:Interest receivable Taxes and surcharges payable 1,048,588.31 847,721.94
Dividends receivable XVI.2 79,137,061.83 79,137,061.83 Other payables 194,456,754.42 161,941,857.71
Inventories 114,734,732.97 73,584,901.53 Including:Interest payable
Contract assets Dividends payable
Held-for-sale assets Held-for-sale liabilities
Non-current liabilities due within
Non-current assets due within one year 8,837,283.90 6,502,041.67
one year
Other current assets 1,246,348.88 1,036,415.04 Other current liabilities
Total current assets 372,419,793.38 262,202,695.39 Total current liabilities 265,522,938.33 251,890,208.33
Non-current assets: Non-current liabilities:
Debt investments Long-term loans 390,665,507.16 283,557,577.77
Other debt investments Bonds payable
Long-term receivables 3,364,469.81 3,852,541.51 Including: Preference shares
Long-term equity investments XVI.3 328,189,455.23 328,189,455.23 Perpetual loans
Other equity instrument investments Lease liabilities
68
Full text of the annual report of 2023, Shandong Zhonglu Oceanic Fisheries Co., Ltd.
Other non-current financial assets Long-term account payable
Long-term employee benefits
Investment property 27,456,779.39 28,782,856.07 463,135.85 528,268.97
payable
Fixed assets 478,978,332.36 112,981,919.66 Anticipation liabilities
Construction in process 22,793,103.19 330,769,336.43 Deferred income 39,774,011.30 -
Productive biological assets Deferred tax liabilities
Oil and gas assets Other non-current liabilities
Right-of-use assets Total non-current liabilities 430,902,654.31 284,085,846.74
Intangible assets 63,265.27 242,789.22 Total liabilities 696,425,592.64 535,976,055.07
Development expenditures Shareholders' equity:
Goodwill Share capital 266,071,320.00 266,071,320.00
Long-term deferred expenses 1,943,863.35 - Other equity instruments
Deferred tax assets Including: Preference shares
Other non-current assets - 3,677,308.80 Perpetual loans
Total non-current assets 862,789,268.60 808,496,206.92 Capital reserve 279,115,900.17 279,115,900.17
Less:treasury shares
Other comprehensive income -
Special reserve
Surplus reserve 19,184,672.34 19,184,672.34
Undistributed profit -25,588,423.17 -29,649,045.27
Total equity 538,783,469.34 534,722,847.24
Total of assets 1,235,209,061.98 1,070,698,902.31 Total liabilities and equity 1,235,209,061.98 1,070,698,902.31
Person in charge of the company:liangshanglei Person in charge of accounting function:fuchuanhai Person in charge of accounting depertment:leilixin
69
Full text of the annual report of 2023, Shandong Zhonglu Oceanic Fisheries Co., Ltd.
Consolidated Statement of Income
For the year ended 31 December 2023
Prepared by：Shandong Zhonglu Oceanic Fisheries Co., Ltd. Unit：RMB Yuan
Year ended Year ended Year ended Year ended
Item Note Item Note
31/12/2023 31/12/2022 31/12/2023 31/12/2022
1.Total operating income Ⅵ.36 1,145,252,422.09 985,428,305.37 Categorized by ownership
1. Net profit attributable to parent
Including: Operating income Ⅵ.36 1,145,252,422.09 985,428,305.37 39,599,325.61 30,239,511.38
company
2. Profit/loss attributable to
2.Total operating cost 1,086,624,263.46 936,984,781.98 1,810,824.62 8,410,031.96
minority shareholders
6. Other comprehensive income net
Less: Operating costs Ⅵ.36 997,975,267.34 873,701,560.02 3,695,625.18 14,135,022.30
of tax
Total comprehensive income
Taxes and surcharges Ⅵ.37 2,925,013.22 2,707,749.69 attributable to shareholders of 2,921,263.10 11,964,857.40
parent company
(1) Comprehensive income not to be
Selling and distribution expenses Ⅵ.38 3,644,441.03 3,380,701.10
reclassified to profit or loss
1) Changes in remeasurement of
General and administrative expenses Ⅵ.39 68,621,908.48 64,374,235.07
defined benefit obligations
2) Other comprehensive income not
Research and development expenses Ⅵ.40 3,276,567.05 3,394,089.25 to be reclassified to profit or loss in
equity method
3) Fair value changes in other
Finance expenses Ⅵ.41 10,181,066.34 -10,573,553.15
equity instrument investments
4) Fair value changes in the
Including:Interest expenses Ⅵ.41 11,440,531.09 2,904,189.24
enterprise's own credit risk
Interest income Ⅵ.41 408,232.29 672,995.57 5)Others
(2) Comprehensive income to be
Add: Other income Ⅵ.42 53,031,926.38 47,748,665.86 2,921,263.10 11,964,857.40
reclassified to profit or loss
1) Other comprehensive income to
Investment income ("-" for loss) Ⅵ.43 -649,378.77 773,612.72 be reclassified to profit or loss in
equity method
Including: Investment income from 2) Gain or loss from fair value
associates and joint ventures Ⅵ.43 -569,892.16 -398,421.52
changes of other debt instruments
Income from 3) The amount of financial assets
derecognition of financial assets measured at reclassified to other comprehensive
amortised cost income
Net exposure hedging gains ("-" for 4) Credit impairment provision of
loss) other debt investment
Gain from fair value changes ("-" for 5) Cash flow hedging reserve
70
Full text of the annual report of 2023, Shandong Zhonglu Oceanic Fisheries Co., Ltd.
loss)
Credit impairment losses ("-" for loss) Ⅵ.44 -124,369.44 -826,867.20 6) Currency translation difference 2,921,263.10 11,964,857.40
Impairment on assets ("-" for loss) Ⅵ.45 -67,560,742.65 -59,961,212.95 7) Others
Other comprehensive income
Gains from disposal of assets ("-" for
Ⅵ.46 13,887.78 5,081,530.63 attributable to minority share- 774,362.08 2,170,164.90
loss)
holders, net of tax
3. Operating profits ("-" for loss) 43,339,481.93 41,259,252.45 7. Total comprehensive income 45,105,775.41 52,784,565.64
(1) Total comprehensive income
Add: Non-operating income Ⅵ.47 1,583,319.90 176,255.05 attributable to shareholders of 42,520,588.71 42,204,368.78
parent company
(2) Total comprehensive income
Less:Non-operating expenses Ⅵ.48 98,172.78 71,313.09 attributable to minority 2,585,186.70 10,580,196.86
shareholders
4. Profit before tax ("-" for loss) 44,824,629.05 41,364,194.41 8. Earnings per share
Less:income tax expenses Ⅵ.49 3,414,478.82 2,714,651.07 (1) Basic earnings per share 0.15 0.11
5. Net profit ("-" for net loss) 41,410,150.23 38,649,543.34 (2) Diluted earnings per share 0.15 0.11
Categorized by going concern basis
1. Profit or loss from continuing operations 41,410,150.23 38,649,543.34
2. Profit or loss from discontinued
operations
Person in charge of the company:liangshanglei Person in charge of accounting function:fuchuanhai Person in charge of accounting depertment:leilixin
71
Full text of the annual report of 2023, Shandong Zhonglu Oceanic Fisheries Co., Ltd.
Statement of Income
For the year ended 31 December 2023
Prepared by：Shandong Zhonglu Oceanic Fisheries Co., Ltd. Unit：RMB Yuan
Year ended Year ended Year ended Year ended
Item Note Item Note
31/12/2023 31/12/2022 31/12/2023 31/12/2022
1.Including: Operating income XVI.4 287,276,341.66 133,301,999.64 4. Net profit ("-" for net loss) 4,060,622.10 448,511.18
1. Profit or loss from
Less: Operating costs XVI.4 232,833,224.00 104,663,835.75 4,060,622.10 448,511.18
continuing operations
2. Profit or loss from
Taxes and surcharges 1,352,824.32 1,277,316.00
discontinued operations
5. Other comprehensive income net
Selling and distribution expenses 502,629.53 302,268.33
of tax
(1) Comprehensive income not to
General and administrative expenses 36,606,050.15 34,807,826.22
be reclassified to profit or loss
1) Changes in remeasurement of
Research and development expenses 635,515.70 1,375,367.02
defined benefit obligations
2) Other comprehensive income
Finance expenses 12,736,618.19 -2,686,950.98 not to be reclassified to profit or
loss in equity method
3) Fair value changes in other
Including:Interest expenses 12,945,034.01 3,531,483.95
equity instrument investments
4) Fair value changes in the
Interest income 865,138.53 455,083.61
enterprise's own credit risk
Add: Other income 16,188,028.81 14,050,335.87 5)Others
(2) Comprehensive income to be
Investment income ("-" for loss) XVI.5 4,215,737.37 9,576,034.24
reclassified to profit or loss
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Full text of the annual report of 2023, Shandong Zhonglu Oceanic Fisheries Co., Ltd.
1) Other comprehensive income to
Including: Investment income from
be reclassified to profit or loss in
associates and joint ventures
equity method
Income from
2) Gain or loss from fair value
derecognition of financial assets measured at
changes of other debt instruments
amortised cost
3) The amount of financial assets
Net exposure hedging gains ("-" for
reclassified to other comprehensive
loss)
income
Gain from fair value changes ("-" for 4) Credit impairment provision of
loss) other debt investment
Credit impairment losses ("-" for loss) -179,541.90 432,771.33 5) Cash flow hedging reserve
Impairment on assets ("-" for loss) -18,693,997.45 -17,298,401.93 6) Currency translation difference
Gains from disposal of assets ("-" for
- - 7) Others
loss)
2. Operating profits ("-" for loss) 4,139,706.60 323,076.81 6. Total comprehensive income 4,060,622.10 448,511.18
Add: Non-operating income 19,088.28 130,785.30 7. Earnings per share
Less:Non-operating expenses 98,172.78 5,350.93 (1) Basic earnings per share
3. Profit before tax ("-" for loss) 4,060,622.10 448,511.18 (2) Diluted earnings per share
Less:income tax expenses - -
Person in charge of the company:liangshanglei Person in charge of accounting function:fuchuanhai Person in charge of accounting depertment:leilixin
73
Full text of the annual report of 2023, Shandong Zhonglu Oceanic Fisheries Co., Ltd.
Consolidated Statement of Cash Flows
For the year ended 31 December 2023
Prepared by：Shandong Zhonglu Oceanic Fisheries Co., Ltd. Unit：RMB Yuan
Year ended Year ended Year ended Year ended
Item Note Item Note
31/12/2023 31/12/2022 31/12/2023 31/12/2022
1. Cash flows from operating activities 3. Cash flows from financing activities:
Cash received from investments by
Cash received from sales and services 1,119,751,613.55 997,628,271.08 - 100,000,000.00
others
Including: cash received by
Taxes and surcharges refunds 31,058,904.03 42,646,182.32 subsidiaries from minority 100,000,000.00
shareholders' investments
Cash received related to other
Ⅵ.51 96,023,672.26 57,246,792.68 Cash received from borrowings 223,035,507.16 354,300,000.00
operating activities
Total cash inflows from operating Cash received related to other
1,246,834,189.84 1,097,521,246.08 - -
activities financing activities
Total cash inflows from financing
Cash paid for goods and services 953,115,746.93 876,993,067.62 223,035,507.16 454,300,000.00
activities
Cash paid to and for employees 181,212,097.10 177,259,066.49 Cash repayments for debts 75,900,000.00 217,605,316.00
Cash payments for distribution of
Taxes and surcharges cash payments 13,727,999.12 13,319,654.61 16,469,246.05 9,958,538.93
dividends, profit and interest expenses
Including: dividends or profit
Cash paid related to other operating
Ⅵ.51 17,241,588.87 17,216,784.26 paid by subsidiaries to minority - -
activities
shareholders
Total cash outflows from operating Cash paid related to other financing
1,165,297,432.02 1,084,788,572.98 Ⅵ.51 195,000.00 1,780,432.76
activities activities
Total cash outflows from financing
Net cash flows from operating activities 81,536,757.82 12,732,673.10 92,564,246.05 229,344,287.69
activities
Net cash flows from financing
2. Cash flows from investing activities： 130,471,261.11 224,955,712.31
activities
Cash received from withdraw of 4. Effect of foreign exchange rate
- 265,112,800.00 -321,298.15 9,047,338.51
investments changes on cash and cash equivalents
5. Net increase in cash and cash
Cash received from investment income - 1,076,034.24 15,863,080.72 17,615,036.32
equivalents
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Full text of the annual report of 2023, Shandong Zhonglu Oceanic Fisheries Co., Ltd.
Net cash received from disposal of
\property, plant and Add: beginning balance of cash and
130,058.18 8,046,588.88 227,264,342.31 209,649,305.99
equipement,intangible assets and other cash equivalents
long-term assets
Net cash received from disposal of 6. Ending balance of cash and cash
- - 243,127,423.03 227,264,342.31
subsidiaries and other business units equivalents
Cash received related to other investing
- 5,000,000.00
activities
Total cash inflows from investing
130,058.18 279,235,423.12
activities
Cash paid for property, plant and
equipement,intangible assets and other 195,953,698.24 240,956,965.72
long-term assets
Cash payments for investments - 267,399,145.00
Net cash paid for acquiring
- -
subsidiaries and other business units
Cash paid related to other investing
- -
activities
Total cash outflows from investing
195,953,698.24 508,356,110.72
activities
Net cash flows from investing activities -195,823,640.06 -229,120,687.60
Person in charge of the company:liangshanglei Person in charge of accounting function:fuchuanhai Person in charge of accounting depertment:leilixin
75
Full text of the annual report of 2023, Shandong Zhonglu Oceanic Fisheries Co., Ltd.
Statement of Cash Flows
For the year ended 31 December 2023
Unit：RMB
Prepared by：Shandong Zhonglu Oceanic Fisheries Co., Ltd.
Yuan
Year ended Year ended Year ended Year ended
Item Note Item Note
31/12/2023 31/12/2022 31/12/2023 31/12/2022
1. Cash flows from operating activities 3. Cash flows from financing activities:
Cash received from investments by
Cash received from sales and services 254,593,750.64 116,957,691.93 -
others
Taxes and surcharges refunds - 7,654,485.04 Cash received from borrowings 165,065,507.16 334,300,000.00
Cash received related to other Cash received related to other
65,929,069.79 20,554,267.15 15,722,745.11 147,894,716.30
operating activities financing activities
Total cash inflows from operating Total cash inflows from financing
320,522,820.43 145,166,444.12 180,788,252.27 482,194,716.30
activities activities
Cash paid for goods and services 176,784,438.54 60,229,439.09 Cash repayments for debts 55,900,000.00 207,605,316.00
Cash payments for distribution of
Cash paid to and for employees 52,006,009.86 45,178,179.52 15,353,225.58 9,654,019.71
dividends, profit and interest expenses
Cash paid related to other financing
Taxes and surcharges cash payments 1,667,556.43 1,333,379.07 90,556,272.86 58,952,610.51
activities
Cash paid related to other operating Total cash outflows from financing
6,953,137.69 7,288,776.43 161,809,498.44 276,211,946.22
activities activities
Total cash outflows from operating Net cash flows from financing
237,411,142.52 114,029,774.11 18,978,753.83 205,982,770.08
activities activities
4. Effect of foreign exchange rate
Net cash flows from operating activities 83,111,677.91 31,136,670.01 -196,492.01 -533,788.56
changes on cash and cash equivalents
5. Net increase in cash and cash
2. Cash flows from investing activities： -5,611,504.77 409,381.50
equivalents
Cash received from withdraw of Add: beginning balance of cash and
- 260,000,000.00 50,352,735.39 49,943,353.89
investments cash equivalents
6. Ending balance of cash and cash
Cash received from investment income - 15,524,276.11 44,741,230.62 50,352,735.39
equivalents
Net cash received from disposal of
\property, plant and 52,448.27 -
equipement,intangible assets and other
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long-term assets
Net cash received from disposal of
- -
subsidiaries and other business units
Cash received related to other investing
- -
activities
Total cash inflows from investing
52,448.27 275,524,276.11
activities
Cash paid for property, plant and
equipement,intangible assets and other 107,557,892.77 155,700,546.14
long-term assets
Cash payments for investments - 356,000,000.00
Net cash paid for acquiring
- -
subsidiaries and other business units
Cash paid related to other investing
- -
activities
Total cash outflows from investing
107,557,892.77 511,700,546.14
activities
Net cash flows from investing activities -107,505,444.50 -236,176,270.03
Person in charge of the company:liangshanglei Person in charge of accounting function:fuchuanhai Person in charge of accounting depertment:leilixin
77
Full text of the annual report of 2023, Shandong Zhonglu Oceanic Fisheries Co., Ltd.
Consolidated Statement of Changes in Equity
For the year ended 31 December 2023
Prepared by：Shandong Zhonglu Oceanic Fisheries Co., Ltd. Unit：RMB Yuan
Year 2023
Equity attributable to shareholders of parent company
Other equity Other
Minorit
instruments compr Surpl Gener Total
Item Less:tr Undistr Ot y
Share Prefe Perp Capital ehensi Special us al risk Sub- owners'
Ot easury ibuted her interest
capital rence etual reserve ve reserve reserv prepa total equity
her shares profit s s
share loan incom e ration
s
s s e
- 21,908
266,071, 295,620, 409,764, 987,072, 261,003, 1,248,075,
1. Ending balance of last year - - - - 6,291,3 - ,064.1 - -
320.00 272.02 423.32 734.95 028.98 763.93
44.58 9
Add: Impact from changes in
- -
accounting policies
Impact from corrections of errors in
- -
prior period
Others
- 21,908
266,071, 295,620, 409,764, 987,072, 261,003, 1,248,075,
2. Beginning balance of current year - - - - 6,291,3 - ,064.1 - -
320.00 272.02 423.32 734.95 028.98 763.93
44.58 9
3. Movement for current year("-" for 2,921,2 39,599,3 42,522,16 968,527. 43,490,68
- - - - - - 1,572.48 - - -
decrease） 63.10 25.61 1.19 69 8.88
2,921,2 39,599,3 42,520,5 2,585,18 45,105,77
(1) Total comprehensive income
63.10 25.61 88.71 6.70 5.41
(2) Shareholder's contributions and
- - - - - - - - - - - - - - -
withdrawals of captial
1) Common stock contributed by
- -
shareholders
2) Capital contributed by other equity
- -
instruments holders
3) Share-based payment recorded in
- -
shareholder's equity
4) Others - -
1,616,65 1,616,659.
(3) Profits distribution - - - - - - - - - - - - -
9.01 01
78
Full text of the annual report of 2023, Shandong Zhonglu Oceanic Fisheries Co., Ltd.
1) Appropriation of surplus reserve - -
1,616,65 1,616,659.
2) Distribution to shareholders -
9.01 01
3) Others - -
(4) Internal transfer within
- - - - - - - - - - - - - - -
shareholder's equity
1) Conversion of capital reserve into
- -
share capital
2) Conversion of surplus reserve into
- -
share capital
3) Recover of loss by surplus reserve - -
4) Change of defined benefit obligations
- -
carried forward to retained earnings
5) Other comprehensive income carried
- -
forward to retained earnings
6) Others - -
(5) Special reserve - - - - - - - 1,572.48 - - - - 1,572.48 - 1,572.48
2,679,97 2,679,97 2,679,975
1) Accrual of special reserve
5.32 5.32 .32
2,678,40 2,678,40 2,678,402
2) Utilization of special reserve
2.84 2.84 .84
(6) Others - -
- 21,908
266,071, 295,620, 449,363, 1,029,594 261,971, 1,291,566,
4. Ending balance of current year - - - - 3,370,0 1,572.48 ,064.1 - -
320.00 272.02 748.93 ,896.14 556.67 452.81
81.48 9
Person in charge of the company:liangshanglei Person in charge of accounting function:fuchuanhai Person in charge of accounting depertment:leilixin
79
Full text of the annual report of 2023, Shandong Zhonglu Oceanic Fisheries Co., Ltd.
Consolidated Statement of Changes in Equity (Continued)
For the year ended 31 December 2023
Prepared by：Shandong Zhonglu Oceanic Fisheries Co., Ltd. Unit：RMB Yuan
Year 2022
Equity attributable to shareholders of parent company
Other equity Minorit
Item instruments Other Specia Gener Total
Less:tr Surplu Undistr Ot y
Share Prefe Perp Capital compre l al risk Sub- owners'
Ot easury s ibuted her interest
capital rence etual reserve hensive reserv prepa total equity
her shares reserve profit s s
share loan income e ration
s
s s
-
266,071, 284,054, 232,78 21,908, 379,524, 933,535, 161,988, 1,095,523
1. Ending balance of last year - - - - 18,256,2 -
320.00 997.75 3.00 064.19 911.94 874.90 106.39 ,981.29
01.98
Add: Impact from changes in
- -
accounting policies
Impact from corrections of errors in
- -
prior period
Others
-
266,071, 284,054, 232,78 21,908, 379,524, 933,535, 161,988, 1,095,523
2. Beginning balance of current year - - - - 18,256,2 - -
320.00 997.75 3.00 064.19 911.94 874.90 106.39 ,981.29
01.98
3. Movement for current year("-" for -
11,565,2 11,964,8 30,239,5 53,536,8 99,014,9 152,551,7
- - - - - 232,78 - - -
decrease） 74.27 57.40 11.38 60.05 22.59 82.64
3.00
11,964,8 30,239,5 42,204,3 10,580,1 52,784,56
(1) Total comprehensive income
57.40 11.38 68.78 96.86 5.64
(2) Shareholder's contributions and 11,565,2 11,565,2 88,434,7 100,000,0
- - - - - - - - - - -
withdrawals of captial 74.27 74.27 25.73 00.00
1) Common stock contributed by 100,000, 100,000,0
-
shareholders 000.00 00.00
2) Capital contributed by other equity
- -
instruments holders
3) Share-based payment recorded in
- -
shareholder's equity
-
11,565,2 11,565,2
4) Others 11,565,2 -
74.27 74.27
74.27
80
Full text of the annual report of 2023, Shandong Zhonglu Oceanic Fisheries Co., Ltd.
(3) Profits distribution - -
1) Appropriation of surplus reserve - -
2) Distribution to shareholders - -
3) Others - -
(4) Internal transfer within shareholder's
- -
equity
1) Conversion of capital reserve into
- -
share capital
2) Conversion of surplus reserve into
- -
share capital
3) Recover of loss by surplus reserve - -
4) Change of defined benefit obligations
- -
carried forward to retained earnings
5) Other comprehensive income carried
- -
forward to retained earnings
6) Others - -
- - -
(5) Special reserve - - - - - - - 232,78 - - - - 232,783. - 232,783.0
3.00 00 0
849,79 849,791. 849,791.4
1) Accrual of special reserve
1.41 41 1
1,082,5 1,082,57 1,082,574
2) Utilization of special reserve
74.41 4.41 .41
(6) Others - -
-
266,071, 295,620, 21,908, 409,764, 987,072, 261,003, 1,248,075
4. Ending balance of current year - - - - 6,291,34 - - -
320.00 272.02 064.19 423.32 734.95 028.98 ,763.93
4.58
Person in charge of the company:liangshanglei Person in charge of accounting function:fuchuanhai Person in charge of accounting depertment:leilixin
81
Full text of the annual report of 2023, Shandong Zhonglu Oceanic Fisheries Co., Ltd.
Statement of Changes in Equity
For the year ended 31 December 2023
Prepared by：Shandong Zhonglu Oceanic Fisheries Co., Ltd. Unit：RMB Yuan
Year 2023
Other equity
instruments Other Spec
Item Less:trea Undistrib Total
Share Capital comprehe ial Surplus Oth
Prefere Perpet sury uted owners'
capital Oth reserve nsive reser reserve ers
nce ual shares profit equity
ers income ve
shares loans
-
266,071,3 279,115,9 19,184,67 534,722,8
1. Ending balance of last year - - - - - - 29,649,04 -
20.00 00.17 2.34 47.24
5.27
Add: Impact from changes in accounting policies -
Impact from corrections of errors in prior period -
Others -
-
266,071,3 279,115,9 19,184,67 534,722,8
2. Beginning balance of current year - - - - - - 29,649,04 -
20.00 00.17 2.34 47.24
5.27
4,060,622. 4,060,622.
3. Movement for current year("-" for decrease） - - - - - - - - - -
10 10
4,060,622. 4,060,622.
(1) Total comprehensive income
10 10
(2) Shareholder's contributions and withdrawals of
- - - - - - - - - - - -
captial
1) Common stock contributed by shareholders -
2) Capital contributed by other equity instruments
-
holders
3) Share-based payment recorded in shareholder's
-
equity
4) Others -
(3) Profits distribution - - - - - - - - - - - -
82
Full text of the annual report of 2023, Shandong Zhonglu Oceanic Fisheries Co., Ltd.
1) Appropriation of surplus reserve -
2) Distribution to shareholders -
3) Others -
(4) Internal transfer within shareholder's equity - - - - - - - - - - - -
1) Conversion of capital reserve into share capital -
2) Conversion of surplus reserve into share capital -
3) Recover of loss by surplus reserve -
4) Change of defined benefit obligations carried
-
forward to retained earnings
5) Other comprehensive income carried forward to
-
retained earnings
6) Others -
(5) Special reserve - - - - - - - - - - - -
1) Accrual of special reserve -
2) Utilization of special reserve -
(6) Others -
-
266,071,3 279,115,9 19,184,67 538,783,4
4. Ending balance of current year - - - - - - 25,588,42 -
20.00 00.17 2.34 69.34
3.17
Person in charge of the company:liangshanglei Person in charge of accounting function:fuchuanhai Person in charge of accounting depertment:leilixin
83
Full text of the annual report of 2023, Shandong Zhonglu Oceanic Fisheries Co., Ltd.
Statement of Changes in Equity (Continued)
For the year ended 31 December 2023
Prepared by：Shandong Zhonglu Oceanic Fisheries Co., Ltd. Unit：RMB Yuan
Year 2022
Other equity
Other Spec
Item instruments Less:trea Undistrib Total
Share Capital comprehe ial Surplus Oth
Prefere Perpet sury uted owners'
capital Oth reserve nsive reser reserve ers
nce ual shares profit equity
ers income ve
shares loans
-
266,071,3 279,115,9 19,184,67 534,274,3
1. Ending balance of last year - - - - - - 30,097,55
20.00 00.17 2.34 36.06
6.45
Add: Impact from changes in accounting policies -
Impact from corrections of errors in prior period -
Others -
-
266,071,3 279,115,9 19,184,67 534,274,3
2. Beginning balance of current year - - - - - - 30,097,55 -
20.00 00.17 2.34 36.06
6.45
3. Movement for current year("-" for decrease） - - - - - - - - - 448,511.18 - 448,511.18
(1) Total comprehensive income 448,511.18 448,511.18
(2) Shareholder's contributions and withdrawals of
- - - - - - - - - - - -
captial
1) Common stock contributed by shareholders -
2) Capital contributed by other equity instruments
-
holders
3) Share-based payment recorded in shareholder's
-
equity
4) Others -
(3) Profits distribution - - - - - - - - - - - -
1) Appropriation of surplus reserve -
2) Distribution to shareholders -
3) Others -
(4) Internal transfer within shareholder's equity - - - - - - - - - - - -
1) Conversion of capital reserve into share capital -
2) Conversion of surplus reserve into share capital -
3) Recover of loss by surplus reserve -
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Full text of the annual report of 2023, Shandong Zhonglu Oceanic Fisheries Co., Ltd.
4) Change of defined benefit obligations carried
-
forward to retained earnings
5) Other comprehensive income carried forward to
-
retained earnings
6) Others -
(5) Special reserve - - - - - - - - - - - -
1) Accrual of special reserve -
2) Utilization of special reserve -
(6) Others -
-
266,071,3 279,115,9 19,184,67 534,722,8
4. Ending balance of current year - - - - - - 29,649,04 -
20.00 00.17 2.34 47.24
5.27
Person in charge of the company:liangshanglei Person in charge of accounting function:fuchuanhai Person in charge of accounting depertment:leilixin
85
Full text of the annual report of 2023, Shandong Zhonglu Oceanic Fisheries Co., Ltd.
Ⅰ.Profile of the Company
1． Registered Capital, Place of Registration, Organization Type, and Head Office Address
The registered address of Shandong Zhonglu Oceanic Fishery Co., Ltd. (hereinafter referred to as “the Company”) is 29
Miaoqiao Road, Laoshan District, Qingdao, Shandong. It is a company limited by shares established on July 30, 1999, by means
of promotion with Shandong Aquaculture Enterprise Group as the key promoter, with the approval of the Shandong Economic
Restructuring Commission through Document LTGZ [1999] No. 85. With the approval of the China Securities Regulatory
Commission through Document ZJFXZ [2000] No. 82 on June 26, 2000, the Company’s B-shares were listed on the Shenzhen
Stock Exchange on July 24, 2000. The short stock name is “Zhonglu B,” and the stock code is “200992.” As of December 21,
2023, the share capital of the Company was RMB 266,071,320.00 yuan.
The Company’s basic organizational structure consists of: Annual General Meeting, Board of Directors, Board of Supervisors,
General Manager’s Office (Party Committee’s Office), Board Office, Human Resources Department (Organizational
Department), Financial Management Department (Capital Operations Department), Corporate Development Department,
Audit Department, Oceanic Management Departments, Discipline Inspection Committee’s Office, Party’s Mass Work
Department, and Risk Control Department (Legal Affairs Department).
2. The nature of the business and the main business activities the Company actually engaged in.
The Company’s key products include tuna and its products.
The Company’s business scope is: general business items: processing and sale of aquatic products; commodity import and
export within the approved scope; manufacture and sale of machine-made ice; manufacture, installation, and repair of
refrigeration equipment; refrigeration and cold storage; loading, unloading, and handling services; property leasing.
Business items with prerequisite licensing: open-water fishing and long-range fishing.
3. Name of the parent company and the final group parent company.
Shandong State-owned Assets Investment Holding Co., Ltd.
4. The approval date of the financial report and the approval date of the financial report.
This financial statement is approved by the resolution of the Board of Directors of the Company on April 25,2024.
Ⅱ. T Basis for the preparation of the financial statements.
1． Foundation of the preparation
The company takes continuing operation as the basis for preparing financial statements and takes the accrual basis as the basis
for bookkeeping. The company generally adopts the historical cost to measure the accounting elements, and adopts the
replacement cost, the realizable net value, the present value and the fair value on the premise that the determined amount of the
accounting elements can be obtained and be measured reliably.
2. Going concern
The company shall have the ability of going concern for at least 12 months from the end of this report, and have no major
matters affecting the ability of going concern.
Ⅲ. Statement following the Accounting Standards for Business Enterprises
The Company’s financial statements and notes were issued by the accounting standards, application guidelines, accounting
standards for business enterprises, the China Securities Regulatory Commission issued the public issuance of securities company
86
Full text of the annual report of 2023, Shandong Zhonglu Oceanic Fisheries Co., Ltd.
information disclosure reporting rules no. 15-the general provisions of financial report [2023 revision] and the requirements of
the relevant provisions, truly and completely reflects the company's current financial situation, operating results, changes in
shareholders' equity and cash flow and other relevant information.
Ⅳ. Important accounting policies and accounting estimates
According to the actual characteristics of production and operation and the provisions of relevant accounting standards for
enterprises, the company has formulated several specific accounting policies and accounting estimates for transactions and
matters such as revenue recognition, see Note Ⅳ and 27 "revenue" for details. For the statement of significant accounting
judgments and estimates made by management team, please refer to Note IV, 34 "Major Accounting judgments and Estimates".
1． Accounting period
The fiscal year starts from January 1 to December 31 of the Gregorian calendar.
2． Operation period
The normal business cycle is the period from the company's purchase of assets for processing to the realization of cash or cash
equivalents. The company takes 12 months as a business cycle and takes it as the liquidity standard of assets and liabilities.
3． Base currency for bookkeeping
RMB Yuan
4． Importance criteria determination method and selection basis
The preparation and disclosure of the financial statements follow the principle of importance. The matters disclosed in the notes
to the financial statements involve the importance criteria and the importance criteria of the Company are as follows:
Item Position disclosed in the notes to this Importance criteria determination method and selection
Financial Statements basis
Other profits Note VI, 42 1 million yuan
Important non-wholly owned subsidiary Notes IX, 1, and (2) Asset size greater than 100 million Yuan
Important associate companies Notes IX, and 2 The net profit scale is greater than 5 million yuan
Important projects under construction Note VI, 11 10 million yuan
5． Accounting treatment method of enterprise merger under the same control and not under the same control.
Enterprise merger refers to the transaction or event in which two or more separate enterprises are merged to form a reporting
entity. Business merger is divided into enterprise merger under the same control and enterprise merger not under the same
control.
(1) Enterprise merger under the same control
The enterprises participating in the merger are subject to the final control of the same party or the same multiple parties before
and after the merger, and the control is not temporary and is the enterprise merger under the same control. For an enterprise
merger under the same control, the party acquiring control over the other enterprises participating in the merger on the merger
date shall be the merger party, and the other enterprises participating in the merger shall be the merged party. The merger date
refers to the date on which the merged party actually obtains the control right of the incorporated party.
The assets and liabilities acquired by the consolidated party are measured at the book value of the consolidated party at the
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Full text of the annual report of 2023, Shandong Zhonglu Oceanic Fisheries Co., Ltd.
merger date. The balance between the book value of the net assets acquired by the consolidated party (or the total book value of
the issued shares) shall adjust the capital reserve (equity premium); if the capital reserve (equity premium) is insufficient to offset,
the retained earnings shall be adjusted.
The merger party is the direct expenses incurred in the enterprise merger, which shall be recorded into the current profit and
loss at the time of occurrence.
(2) Enterprise merger not under the same control
If the enterprise participating in the merger is not under the final control of the same party or the same multiple parties before
and after the merger, it is the enterprise merger not under the same control. For an enterprise merger not under the same
control, the party who obtains the control right over the other enterprises participating in the merger on the purchase date shall
be the acquirer, and the other enterprises participating in the merger shall be the acquiree. The date of purchase is the date on
which the acquirer actually obtains control over the acquiree.
For merger of enterprises not under the same control, the cost of consolidation includes the assets paid by the acquirer on the
purchase date to acquire control over the acquiree, liabilities incurred or assumed by the acquirer and equity securities issued to
acquire control of the acquiree at the purchase date. The cost of audit for the merger of the enterprise, legal services, evaluation
and consulting intermediary fees and other management fees shall be recorded in the current profit and losses. The transaction
expense of equity or debt securities issued by the acquirer as the combined consideration shall be included in the initial
recognized amount of equity or debt securities. The contingent consideration involved shall be included in the consolidated cost
according to its fair value on the purchase date. If there is new or further evidence of the existed situations of the purchase date
within 12 months after it, the consolidated goodwill shall be adjusted accordingly. The merger costs incurred by the acquirer and
the identifiable net assets acquired in the merger should be measured at the fair value of the purchase date. The difference
between the merger cost and the share of the fair value of the identifiable net assets of the purchased party on the purchase date
shall be recognized as goodwill. If the consolidated cost is less than the fair value of identifiable net assets of the merger, first of
the fair value of the identifiable assets, liabilities and contingent liabilities and combined cost measurement, review the combined
cost is still less than the identifiable net assets of the merger, the difference included in the current profit and loss.
If the acquirer obtains the deductible temporary difference of the acquiree, and is not recognized on the purchase date because it
does not meet the conditions of deferred income tax assets for recognition, if new or further information confirming the
existence of relevant situations is obtained with in 12 months after the purchase date, the acquirer shall confirm the deferred
income tax assets and reduce the goodwill, if the goodwill is insufficient, the difference shall be recognized as the current profit
and loss; Except for the above situation, the deferred income tax assets related to the enterprise merger shall be included in the
current profit and loss.
For business merger not under the same control achieved through multiple transactions step by step, it should be determined
whether the multiple transactions belongs to "package deal" according to the Ministry of Finance on the notice of the
accounting standards interpretation no. 5 (accounting [2012] no. 19) and "accounting standards no. 33 —— consolidated
financial statements" article 51 criteria about "package deal" (see Note Ⅳ.6, judging criteria of the control and preparation of the
consolidated financial statements), For "package transaction", refer to the previous paragraphs in this section for accounting
treatment; For those not belong to "package transaction", distinguish individual financial statements from consolidated financial
statements in the accounting statement:
In individual financial statements, the sum of the book value of the equity interest of the acquiree held prior to the purchase date
and the cost of new investment on the purchase date is taken as the initial investment cost of the investment. Where the equity
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interest of the acquiree held prior to the purchase date involves other comprehensive income, the other comprehensive income
associated with the investment will be accounted for on the same basis as if the acquiree had disposed of the relevant asset or
liability directly (i.e., With the exception of the corresponding share of the change resulting from the remeasurement of net
liabilities or net assets of the defined benefit plan by the acquiree under the equity method, the remainder is transferred to
investment income for the period).
In the consolidated financial statements, for the equity of the acquiree held prior to the purchase date, remeasure at the fair value
of the equity at the purchase date, the difference between the fair value and its book value shall be included in the current
investment income; Where the equity of the acquiree held before the purchase date involves other comprehensive income, the
other comprehensive income shall be treated on the same basis as the direct disposal of the relevant assets or liabilities (i. e.,
Except for the corresponding share accounted for under the equity method in the change resulting from the remeasurement of
net liabilities or net assets of the defined benefit plan by the acquirer, the remainder is converted to investment income for the
period at the purchase date).
6． Judging standard of control and the preparation method of the consolidated financial statements
(1) Judging standard of the control
The consolidation scope of consolidated financial statements is determined on the basis of control. Control means that the
Company has the power over the investee, enjoys a variable return by participating in the relevant activities of the investee, and
has the ability to use the power of the investee to influence the amount of the return. Among them, the Company has the
current right to enable the Company to dominate the relevant activities of the investee regardless of whether the Company
actually exercises the power; if the return from the investee may change with the performance of the investee, it shall be deemed
to enjoy a variable return; if the Company exercises the decision-making power as the principal responsible person, the
Company shall be deemed to use the power of the investee to affect the return amount. The scope of the merger includes the
Company and all of its subsidiaries. Subsidiary, refers to the subject controlled by the Company.
The Company judges whether to control the investee on the basis of comprehensive consideration of all relevant facts and
circumstances. The relevant facts and conditions mainly include: the purpose of the establishment of the investee; the relevant
activities of the investee and how to make decisions on the relevant activities; whether the rights of the Company enable the
Company to dominate the relevant activities of the investee; whether the Company enjoys a variable return by participating in
the relevant activities of the investee; whether the Company has the ability to influence the power of the investee; the
relationship between the Company and the other parties, etc. Once changes in the relevant facts and circumstances lead to
changes in the relevant elements involved in the above control definition, the Company will reevaluate them.
(2) Method of preparing the consolidated financial statements
From the date of acquiring the net assets of the subsidiary and the actual control right of production and operation decisions,
the Company will begin to bring it into the merger scope, and stop to do to so after the date of losing the actual control right.
For the subsidiaries under disposal, the operating results and cash flow before the disposal date have been appropriately
included in the consolidated income statement and the consolidated cash flow statement; for the current disposition subsidiaries,
the beginning of the consolidated balance sheet will not be adjusted. For subsidiaries not under the same control, the operating
results and cash flow after the purchase date have been appropriately included in the consolidated income statement and the
consolidated cash flow statement, and the initial and comparative numbers of the consolidated financial statements will not be
adjusted. For the subsidiaries increased by the enterprise merger under the same control and the merged party under the
absorption merger, the operating results and cash flow from the beginning of the current period to the merger date have been
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appropriately included in the consolidated income statement and the consolidated cash flow statement, and the comparison
number of the consolidated financial statements shall be adjusted at the same time.
At the time of preparing the consolidated financial statements, if the accounting policies or accounting periods adopted by the
subsidiary is inconsistent with that adopted by the Company, necessary adjustments to the financial statements of the subsidiary
shall be made in accordance with the accounting policies and accounting periods of the Company. For subsidiaries not acquired
under the same control, their financial statements shall be adjusted on the basis of the fair value of identifiable net assets on the
purchase date.
All significant transaction balances, transactions and outstanding profits within the Company should be offset by the preparation
of the consolidated financial statements.
The shareholders' equity and the net profit and loss of the current period that are not owned by the Company should be listed
separately as the minority shareholders' equity and the minority shareholders' profit and loss under the shareholders' equity and
net profit in the consolidated financial statements. The share of the current net profit and loss of the subsidiary belonging to the
minority shareholders' equity shall be listed in the item of "minority shareholders' profit and loss" under the net profit items in
the consolidated profit statement. The loss of the subsidiary shared by the minority shareholders exceeds the share of the
minority shareholders 'equity of the subsidiary at the beginning of the period, and the number of the shareholders' equity is still
reduced.
When the control of the original subsidiary is lost due to the disposal of some equity investment or other reasons, the remaining
equity shall be remeasured according to its fair value on the date of the loss of control. The sum of the consideration obtained
from the disposal of the shares and the fair value of the remaining shares, after deducting the share of the net assets of the
original subsidiary calculated from the purchase date, shall be included in the investment income of the period of the loss of
control. For other comprehensive income related to the equity investment of the original subsidiary, the accounting treatment of
control shall be lost on the same basis as the direct disposal of the relevant assets or liabilities of the subsidiary. Subsequently,
the remaining equity shall be measured in accordance with the 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 and other relevant provisions, see Note Ⅳ and 14 "Long-term Equity Investment" or Note Ⅳ and 10
"Financial Instruments".
If the Company disposed of the equity investment in the subsidiary until the loss of control through multiple transactions, it is
necessary to distinguish whether the transaction of the equity investment until the loss of control is a package transaction. If the
terms, conditions and economic impact of the disposal of subsidiary equity investments meet one or more of the following
circumstances, usually indicating that those multiple transactions should be treated as package transactions:
1 These transactions are made simultaneously or made in consideration of mutual influence;
2 These deals as a whole can achieve a complete business result;
3 The occurrence of one transaction depends on the occurrence of at least one other transaction;
4 One trade is uneconomical, but it is economic when considered together with other trades.
For each transaction that does not belong to the package transaction, according to the circumstances, the principle of "partial
disposal of long-term equity investment of subsidiaries without losing control" (see Note Ⅳ,14 "long-term equity investment" (2)
④) and "loss of control of the disposal of the original subsidiary" (see the preceding paragraph) should be applied in the
accounting treatment. If the transaction of the subsidiary equity investment until the loss of control is a package transaction, the
transaction shall be treated as a transaction of the disposal of the subsidiary and losing the control; however, the difference
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between the disposal price and the share of the net assets of the subsidiary before the loss of control should be recognized as
other comprehensive income in the consolidated financial statements, and the profit and loss of the period of the loss of control.
7． Classification of joint venture arrangement and accounting treatment methods for joint operation
Joint venture arrangement means an arrangement under the joint control of two or more parties. The Company shall, according
to the rights and obligations enjoyed in the joint venture arrangement, divide the joint venture arrangement into joint operation
and joint company. Joint operation means the joint venture arrangement in which the Company enjoys the relevant assets of the
arrangement and assumes the liabilities related to the arrangement. Joint company means a joint venture arrangement in which
the Company only enjoys rights to the net assets of the arrangement.
The company's investment in joint venture shall be calculated by equity method, which shall be treated in accordance with the
accounting policies described in Note Ⅳ,14 "Long-term Equity Investment" (2) ② "Long-term equity investment calculated by
equity method".
The Company, as the joint venture, recognizes the assets held by the Company, the liabilities and the liabilities held by the shares
of the Company, and the liabilities held by the Company. Recognize the income generated by the sale of the share of the output
incurred by the Company, and the expenses incurred by the Company in accordance with the share of the Company.
When the Company invests or sells assets as the joint venture (the assets do not constitute business, the same should be applied
below) or purchases assets from the joint venture, prior to the sale of such assets to a third party, the Company recognizes only
the portion of the profit or loss arising from the transaction attributable to other participants in the joint venture. For the asset
impairment loss in accordance with the Accounting Standards for Business Enterprises No.8 —— Asset Impairment, the
Company shall recognize the loss for the assets that the Company purchased the assets, the Company shall recognize the loss
according to the share borne by itself.
8． Standards for determining cash and cash equivalents
Cash refers to cash on hand and deposits that can be used for payment at any time. Cash equivalents refer to investments held
by the company with a short term (generally due within three months from the purchase date), which are highly liquid, easy to
be converted into a known amount of cash and with little risk of change in value.
9． Foreign currency business and foreign currency statement translation
(1) The method for determining the exchange rate when foreign currency transactions occur
When a foreign currency transaction is initially recognized, the approximate spot exchange rate on the day of the transaction is
used to convert the amount into RMB.
(2) On the balance sheet date, foreign currency currency items and foreign currency non-currency items shall be treated in the
following methods:
① Foreign currency currency items shall be converted through the central parity rate of RMB foreign exchange price published
by the People's Bank of China on the balance sheet date. The exchange difference caused from the difference between the spot
exchange rate on the balance sheet date and the initial recognition date or the previous balance sheet date shall be included in
the current profit and loss.
② Foreign currency non-monetary items measured at historical cost shall still be converted at the spot exchange rate on the date
of the transaction without changing the bookkeeping standard amount; foreign currency non-monetary items measured at fair
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value shall be converted at the spot exchange rate on the date of fair value; the difference between the original bookkeeping
standard amount shall be treated as the change of fair value (including change in exchange rate) and be included into the current
profit and loss or other comprehensive income according to the nature of the non-monetary items.
Monetary items refer to the monetary funds held by the Company and the assets or liabilities to be collected in a fixed or definite
amount.
Non-monetary items refer to items other than monetary items.
(3) Conversion method of foreign currency financial statements of overseas operating entities:
① The assets and liabilities in the balance sheet shall be converted at the spot exchange rate on the balance sheet date, and the
owner's equity items except the "undistributed profit" shall be converted at the spot exchange rate at the time of occurrence;
② The income and expense items in the income statement shall be converted at the exchange rate similar ③ The conversion
difference in the foreign currency financial statements generated from the above ① and ② conversion shall be listed separately
under the owner's equity items in the balance sheet.to the spot exchange rate on the date of the transaction;
④ The financial statements of overseas operations in hyperinflation economy shall be converted in the following methods:
Restate the balance sheet items by using the general price index, and restate the income statement items by using the general
price index changes, then convert at the spot rate at the latest balance sheet date.
When the overseas operation is no longer in the hyperinflation economy, the restatement shall be stopped and the financial
statements reconverted according to the price level on the date of cessation.
⑤ In the disposal of overseas operations, the Company shall convert the difference between the foreign currency financial
statements related to the owner equity items of the balance sheet for the current disposal of overseas operations, the conversion
difference of the foreign currency financial statements of the disposal portion shall be calculated at the proportion of the
disposal and transferred to the profit and loss of the current disposal.
10．Financial instrument
The financial instrument means a contract that forms the financial assets of one party and forms the financial liabilities or equity
instruments of the other party. When the Company becomes a party to the financial instrument contract, it recognize the
relevant financial assets or financial liabilities.
(1) Financial Assets
1 Classification and the initial measurement
According to the business model of managing financial assets and the contractual cash flow characteristics of financial assets, the
Company divides the financial assets into:
1) Financial assets measured at an amortized cost
The Company manages the business model of financial assets measured at amortized cost, and the contract cash flow
characteristic of such financial assets is consistent with the basic lending arrangement, that is, the cash flow generated on a
specific date is only the payment of the principal and the interest based on the outstanding principal amount. For such financial
assets, the Company adopts the real interest rate method to conduct the follow-up measurement for the amortized cost, and the
profit or loss generated by the amortization or impairment shall be recorded in the current profit and loss.
2) Financial assets measured at fair value and whose changes are included in other comprehensive income
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The business model of the Company for managing such financial assets is to target both collecting and selling of the contractual
cash flow, and the contractual cash flow characteristics of such financial assets are consistent with the basic lending arrangement.
The Company measures such financial assets at fair value and their changes are included in other comprehensive income, but
the impairment losses or gains, exchange gains and losses and interest income calculated in accordance with the real interest rate
method are included in the current profits and losses.among:
<1> Debt instrument investment measured at fair value and whose changes are included in other c Subsequent measurement
should be performed at fair value. Interest rates, impairment losses or gains and exchange gains and losses calculated by the real
interest rate method shall be included in the current profits and losses, while other gains or losses shall be included in other
comprehensive gains. Upon the termination of recognition, the accumulated gains or losses previously included in other
comprehensive income shall be transferred from other comprehensive income and recorded in the current profit and
loss.omprehensive income
<2> Equity instrument investment measured at fair value and whose changes are included in other comprehensive income
Subsequent measurement should be performed at fair value. The dividends obtained (except for the part of the investment cost
recovery) shall be included in the current profit and loss, and other gains or losses shall be included in other comprehensive
income. Upon the termination of recognition, the accumulated gains or losses previously included in other comprehensive
income shall be transferred from other comprehensive income and included in the retained earnings.
For non-trading equity instrument investments, the Company may, upon initial recognition, irrevocably designate them as a
financial asset measured at fair value and its changes included in other comprehensive income. The designation is made on the
basis of a single investment, and the relevant investment meets the definition of the equity instrument from the perspective of
the issuer.
3) Financial assets measured at fair value and whose changes are included in the current profit and loss.
The Company classifies the above financial assets measured at amortized cost and the financial assets measured at fair value and
whose changes are included in other comprehensive income as the financial assets measured at fair value and whose changes are
included in the current profit and loss. In addition, at the initial recognition, in order to eliminate or significantly reduce the
accounting mismatch, the Company designated some financial assets as financial assets measured at fair value and their changes
are included in the current profit and loss. For such financial assets, the Company adopts the fair value for subsequent
measurement, and the change in the fair value is included in the current profit and loss.
The investment in equity instruments over which the Company has no control, joint control and significant influence will be
measured at fair value and its changes will be included in current profit or loss, and listed as trading financial assets; Those
expected to hold for more than one year from the balance sheet date are listed as other non-current financial assets.
Financial assets are measured at fair value at the initial recognition. For financial assets measured at fair value and whose changes
are included in the current profit and loss, relevant transaction expenses are directly included in the current profit and loss; for
other categories of financial assets, relevant transaction expenses are included in the initial recognition amount. For accounts
receivable or notes receivable arising from the sale of products or the provision of services that do not include or do not take
into account the significant financing components, the amount of consideration that the Company is expected to be entitled to
collect shall be the initial recognition amount.
4) Equity instrument
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An equity instrument is a contract that demonstrates ownership of the remaining interest in the assets excluding all liabilities.
The company's issuance (including refinancing), repurchase, sale or cancellation of equity instruments shall be treated as changes
in equity, and the transaction expenses related to equity transactions shall be deducted from the equity. The Company does not
recognize the change in the fair value of the equity instruments.
During the duration of the Company (including the "interest" generated by the "instruments" classified as "equity instruments"),
it shall be treated as profit distribution.
2 Impairment of financial assets
1) Method of recognition of the impairment provision
On the basis of expected credit loss, the Company makes impairment provision and confirms the applicable expected credit loss
measurement method (general method or simplified method).
Credit loss refers to the difference between all the contractual cash flows receivable under the contract and all the expected cash
flows collected, i. e., the present value of the total cash shortage. Among them, for the financial assets purchased or derived with
credit impairment, the Company shall discount the actual interest rate of the financial assets.
The general method of measuring expected credit loss refers to measuring whether the credit risk of the financial assets
(including contract assets and other applicable items, the same below) assessed by the Company on the balance sheet date has
increased significantly since the initial confirmation, the Company measures the loss preparation according to the amount
equivalent to the expected credit loss in the whole duration; if the credit risk does not increase significantly after the initial
confirmation, the Company measures the loss preparation according to the amount equivalent to the expected credit loss in the
next 12 months. For the financial assets purchased or derived with credit impairment, the Company shall only recognize the
cumulative changes of the expected credit loss during the initial period on the balance sheet date. The Company considers all
reasonable and grounded information, including forward-looking information, when assessing expected credit losses.
For receivables and contractual assets that are formed from transactions regulated by Accounting Standard for Business
Enterprises No. 14 - Revenue and do not have a significant financing component or that the Company does not take into
account the financing component of contracts not exceeding one year, the Company uses a simplified measurement method to
measure the loss provision in terms of the amount of expected credit losses over the entire duration.
For financial assets other than the above measurement methods, the Company assess whether its credit risk has significantly
increased since the initial recognition. If the credit risk has significantly increased since the initial confirmation, the Company
measures the loss provision according to the amount of the expected credit loss in the entire duration; if the credit risk does not
increase significantly after the initial confirmation, the Company measures the loss provision according to the amount of the
expected credit loss in the next 12 months.
The Company uses available reasonable and warranted information, including forward-looking information, to compare the risk
of default of the financial instrument on the balance sheet date with the risk of default on the initial recognition date to
determine whether the credit risk of the financial instrument has increased significantly since the initial confirmation.
On the balance sheet date, if the Company determines that the financial instrument only has a low credit risk, it is assumed that
the credit risk of the financial instrument has not increased significantly since the initial recognition.
The Company evaluates expected credit risk and measures expected credit losses on the basis of a single financial instrument or
portfolio of financial instruments. When based on a combination of financial instruments, the Company divides financial
instruments into different combinations based on common risk characteristics.
The Company re-measures the expected credit loss on each balance sheet date, and the increase or reversal of the loss provision
will be recorded as impairment loss or gains. For the financial assets measured at amortized cost, the loss provision shall offset
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the book value of the financial assets listed in the balance sheet; for the debt investment measured at fair value and its changes
included in other comprehensive income, the Company confirms the loss provision in other comprehensive income, which does
not offset the book value of the financial assets.
2) The criterion of whether credit risk increases significantly after initial confirmation
If the default probability of a financial asset within the expected duration determined on the balance sheet date is significantly
higher than the default probability determined during the expected duration determined at the initial confirmation, it indicates
that the credit risk of the financial asset is significantly increased. Except in special circumstances, the Company should use the
change of the default risk in the next 12 months as a reasonable estimate of the change of the default risk during the entire
duration to determine whether the credit risk increases significantly after the initial confirmation.
3) A portfolio approach to assessing expected credit risk on a portfolio basis
The Company evaluates credit risks for individual financial assets with significantly different credit risks, such as receivables of
relevant parties, receivables for matters in dispute with the other side or matters involved in litigation or arbitration, and
receivables where the debtor is likely to fail to fulfill repayment obligations.
In addition to individual financial assets that assess credit risk, the Company divides financial assets into different groups based
on common risk characteristics and evaluates credit risk on the basis of a portfolio.
4) Accounting treatment method for the impairment of financial assets
At the end of the period, the Company calculates the estimated credit loss of various financial assets, if the estimated credit loss
is greater than the book amount of the current impairment provision, the difference should be recognized as an impairment loss;
if it is less than the current impairment provision, the difference should be recognized as an impairment gain.
5) Determination method of credit loss of various financial assets
The company needs to confirm the impairment loss of financial assets measured by amortized cost of financial assets, debt
instruments measured at fair value and whose changes are included in other comprehensive incomes, as well as lease receivables,
mainly including notes receivable, accounts receivable, receivables financing, other receivables, creditor's rights investment, other
creditor's rights investment, long-term receivables, etc. In addition, for the contract assets and part of the financial guarantee
contracts, impairment provisions and credit impairment losses are confirmed in accordance with the accounting policies
described in this part.
<1> The account for receivables and contract assets for expected credit losses based on a combination of credit risk
characteristics
Basis for confirming the
Consolidation category Method of measuring expected credit losses
consolidation
Bank acceptance bill receivable With reference to the historical credit loss experience, combined
with the current situation and the forecast of the future economic
Bill type situation, the expected credit loss should be calculated through the
Trade acceptance receivable default risk exposure and the expected credit loss rate of the whole
duration
With reference to the historical experience of credit loss, and
Receivable-Account receivable age
combined with the current situation and the forecast of the future
portfolio
Account receivable age economic situation, the comparison table between the age of
Contract asset - Account receivable age
accounts receivable and the expected credit loss rate of the whole
Portfolio
duration is prepared to calculate the expected credit loss
Accounts receivable —— consolidated Based on historical credit loss experience, current conditions and
Scope of merger
related parties portfolio expected future economic conditions
With reference to the historical credit loss experience, combined
Other receivables - Account receivable age with the current situation and the forecast of the future economic
Account receivable age
portfolio situation, prepare the comparison table of other receivables age and
the expected credit loss rate, and calculate the expected credit loss
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Basis for confirming the
Consolidation category Method of measuring expected credit losses
consolidation
rate in the next 12 months or the whole duration
The allowance for bad debts is measured with reference to historical
Other receivables - consolidated related
Scope of merger credit loss experience, combined with current conditions and
parties portfolio
expectations of future economic conditions
<2> Aging combination of aging and expected credit loss ratio comparison table
Account receivable age Expected credit loss rate of accounts Expected credit loss rate of other receivables
receivable
Within 6 months 5.00% 5.00%
Six months to a year 10.00% 10.00%
1 to 2 years 30.00% 30.00%
2 to 3 years 50.00% 50.00%
More than 3 years 100.00% 100.00%
The age of accounts for the self-examination of accounts receivable and other receivables contracts starts from the month when
the payment actually occurs.
For the receivables and contract assets formed by the transactions regulated by the Accounting Standards for Business
Enterprises No.14 —— Income, the Company uses the simplified measurement method to measure the loss preparation
according to the amount equivalent to the expected credit loss within the entire duration.
For leasing receivables, by the accounting standards for enterprises no. 14 —— income specification of transaction formation,
and without significant financing components or the company does not consider not more than a year of financing receivables
and contract assets of the contract, the company using the simplified measurement method, according to the entire duration of
expected credit loss amount measurement loss.
For notes receivable and debt receivables measured at fair value and whose changes are included in other comprehensive income,
if the maturity period is within one year (including one year from the initial confirmation date), they shall be reported as
receivables financing. The Company measures the impairment loss by using the amount of the expected credit loss of the entire
duration.
Debt investment is mainly accounted for by bond investment measured at amortized cost. The Company measures the
impairment loss in the amount equivalent to the expected credit loss within the next 12 months, or for the entire duration, based
on whether its credit risk has increased significantly since the initial recognition.
Other creditor's rights investments shall be mainly accounted for bond investment measured at fair value and whose changes are
included in other comprehensive income. Financing of receivables with a maturity period of more than one year from the initial
confirmation date shall also be reported as other creditor's rights investments. For other debt investments (including receivables
listed in other debt investments), the Company shall measure the impairment loss by using the amount equivalent to the
expected credit loss within the next 12 months or the entire duration based on whether its credit risk has increased significantly
after the initial confirmation. For receivables financing that does not include major financing components, the Company
measures the loss preparation according to the expected amount of credit loss equivalent to the entire duration.
<3> The criteria for the identification of receivables and contract assets for the provision of expected credit losses on a single
basis
For receivables and contract assets whose credit risk is significantly different from combined credit risk, the Company shall draw
expected credit losses according a single item.
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3 Confirmation basis and measurement method for terminating the transfer of financial assets
If the financial assets meet one of the following conditions, the recognition of them shall be terminated:
1) Termination of the contractual right to collect the cash flow of the financial assets;
2) The financial assets have been transferred, and the Company transfers almost all the risks and rewards in the ownership of
the financial assets to the transferred party;
3) The financial asset has been transferred. Although the Company has neither transferred nor retained almost all the risks and
rewards in the ownership of the financial asset, it has abandoned the control of the financial asset.
Upon the confirmation termination of the investment of other equity instruments, the difference between the book value and
the consideration received and the sum of the fair value directly recorded in other comprehensive income shall be included in
the retained earnings, and the book value of the remaining financial assets and the sum of the fair value directly recorded in
other comprehensive income shall be included in the current profit and loss.
If the Company has neither transferred nor retained almost all the risks and rewards in the ownership of the financial assets, and
has not abandoned the control over the financial assets, the relevant financial assets shall be recognized according to the extent
of the transferred financial assets, and the relevant liabilities shall be recognized accordingly. The degree to which the continued
involvement of the transferred financial assets is involved refers to the risk level faced by the enterprise caused by 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 between the sum of the consideration received from the transfer and the
fair value change originally included in other comprehensive income shall be included in the current profit and loss.
If the partial transfer of the financial assets meets the conditions of termination of recognition, the book value of the
transferred financial assets shall be apportioned according to the relative fair value between the fair value of the transfer and the
sum of the sum of the transfer of the transfer shall be included into the current profit and loss.
For the financial assets sold by recourse, or the endorsement transfer of the held financial assets, the Company needs to
determine whether almost all the risks and rewards in the ownership of the financial assets have been transferred. If almost all
the risks and rewards in the ownership of the financial asset have been transferred to the transferred party, the recognition of
the financial asset should be terminated; if the financial asset retains the ownership of the financial asset and almost all the risks
and rewards in the ownership of the financial asset, the recognition of the financial asset should not be terminated, if there is
no transfer nor retention of almost all the risks and remuneration in the ownership of the financial asset, the company shall
continue to judge whether the enterprise has retained the control of the asset and conduct treatment according to the principles
described in the preceding paragraphs.
4 Cancel after verification
If the Company no longer reasonably expects that the contractual cash flow of the financial asset can be recovered in whole or
in part, the book balance of the financial asset will be written down directly. This write-down constitutes the termination of
recognition of the relevant financial assets. This usually occurs when the Company determines that the debtor has no assets or
sources of income to generate sufficient cash flow to repay the amount that will be written down. However, the financial assets
under the Company may allow the process to be affected by the execution activities.
If the write-down financial assets are recovered later, they shall be transferred back as impairment losses and recorded into the
profits and losses of the current period.
(2) Financial liabilities
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Financial liabilities are classified at the initial recognition as financial liabilities measured at amortized cost and financial liabilities
measured at fair value and whose changes are included in the current profits and losses.
In addition to the following, the Company classifies financial liabilities as financial liabilities measured at amortized cost costs:
① Financial liabilities measured at fair value and whose changes are included in current profits and losses, include transactional
financial liabilities (including derivatives of financial liabilities) and financial liabilities designated as measured at fair value and
whose changes are included in current profits and losses.
② The transfer of financial assets does not meet the conditions for termination of recognition or continues to be involved in
the transferred financial assets.
③ The financial guarantee contract not subject to Item ① or ② of this Article and a loan commitment at a below market rate
that is not subject to Item ① of this Article. In a business merger not under the same control, if the contingent consideration
recognized by the Company as the acquirer forms the financial liabilities, the financial liabilities should be measured at fair value
and the changes should be included in the profit and loss of the current period.
At the time of initial recognition, in order to provide more relevant accounting information, the Company may designate
financial liabilities measured at fair value and recorded in the profit and loss of the current period, which meets one of the
following conditions:
1) Eliminate or significantly reduce accounting mismatch.
2) Manage and evaluate the performance of a portfolio of financial liabilities or a portfolio of financial assets and financial
liabilities on a fair value basis in accordance with the corporate risk management or investment strategy set out in formal written
documents, and report internally to key management on that basis. Such designation, once made, cannot be revoked.
The financial liabilities of the Company are mainly financial liabilities measured at amortized cost, including notes payable and
accounts payable, other payables, borrowings and bonds payable, etc. Such financial liabilities are initially measured according to
the fair value after deducting transaction expenses, and subsequently measured by the real interest rate method. If the term is
less than one year (including one year), it should be listed as current liabilities; if the term is more than one year but is due within
one year (including one year) from the balance sheet date, it should be listed as non-current liabilities due within one year; the
rest are listed as non-current liabilities.
When the current obligation of the financial liability has been discharged in whole or in part, the Company terminate the
recognition of the part of the financial liability or discharged obligation. The difference between the book value of the
terminated part and the consideration paid shall be included in the current profit and loss.
If the current obligation of the financial liability (or a part of it) has been discharged, the Company shall terminate the
recognition of the financial liability (or such a part of the financial liability).
(3) Determination of fair value of financial instruments
For financial instruments with active market, the fair value should be determined by the quotation in the active market. For
financial instruments with no active market, the valuation techniques should be used to determine their fair value. The company
divides the input values used by the valuation technology at the following levels and uses them successively:
① The first level of input value is an unadjusted offer of the same assets or liabilities in the active market that can be obtained
on the measurement date;
② The second level of input value is the input value directly or indirectly visible besides the first level of input value, including:
the quotation of similar assets or liabilities in the active market; the quotation of the same or similar assets or liabilities in the
nonactive market; the other observable input value other than the quotation, such as the interest rate and yield curve observable
during the normal quotation interval; the input value of market verification, etc.;
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③ The third level of input value is the unobservable input value of the relevant assets or liabilities, including interest rates that
cannot be directly observed or cannot be verified by observable market data, stock volatility, future cash flow of abandonment
obligations in business mergers, financial forecasts made using their own data, etc.
(4) Follow-up measurement
After the initial recognition, the Company shall measure different categories of financial assets at amortized cost, fair value and
their changes in other comprehensive income or fair value and their changes in the current profit and loss.
After the initial recognition, the Company shall measure different categories of financial liabilities at amortized cost, fair value
and changes in the current profit or loss or by other appropriate methods.
The amortized cost of a financial asset or financial liability is determined by the initial recognized amount of the financial asset
or financial liability after the following adjustments:
① Deduct the repaid principal.
② Add or subtract the cumulative amortization amount formed by amortifying the difference between the initial recognized
amount and the due date amount by the effective interest rate method.
③ Excluding accumulated losses (only for financial assets).
The Company recognizes the interest income in accordance with the real interest rate method. Interest income should be
calculated from the book balance of financial assets multiplied by the effective interest rate unless:
1) For the financial assets purchased or derived with credit impairment, the Company shall determine the interest income
according to the amortized cost of the amortized assets and the actual interest rate of the financial assets.
2) For the purchased or generated financial assets that have no credit impairment but become credit impairment in the
subsequent period, the Company shall determine the interest income according to the amortized cost and actual interest rate of
the financial assets in the subsequent period. If the Company uses the real interest rate method to calculate the credit
impairment in the subsequent period, and the improvement can be objectively related to an event occurring after the application
of the above policy (if the credit rating of the debtor's credit rating is raised), the Company transfers the real interest rate
multiplied by the book balance of the financial assets.
11．Inventory
(1) Classification of inventory
Inventory includes raw materials, in-process products, semi-finished products, finished products, inventory goods, turnover
materials, low-value consumables and contract performance costs, etc. (For "Contract Performance Cost", see Note Ⅳ, 28 and
"Contract Acquisition Cost and Contract Performance Cost".)
(2) Method of valuation of issued issued
The inventory should be priced on the weighted average basis when issued.
(3) The basis for determining the net realizable value of inventory and the withdrawal method for inventory depreciation reserve
On the balance sheet date, the inventory shall be measured according to the lower cost and the net realizable value. If the
inventory cost is higher than its net realizable value, the provision for inventory depreciation shall be withdrawn and recorded
into the current profit and loss. Net realizable value refers to the amount after the estimated selling price of inventory minus the
estimated cost, estimated sales expenses and related taxes at completion.
The net realizable value of various inventories is determined as follows:
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① The inventory of goods directly used for sale, such as finished products, goods and materials used for sale, shall, in the
normal process of production and operation, determine the net realizable value after the estimated selling price of the inventory
minus the estimated sales expenses and relevant taxes.
② For the inventory of materials to be processed, its net realizable value is determined in the normal course of production and
operation by the estimated selling price of the finished products produced less the estimated cost to be incurred at the time of
completion, estimated selling expenses and related taxes.
③ On the balance sheet date, if one part of the same inventory has the contract price without the other part, the net realizable
value shall be determined respectively, and compared with the corresponding cost, the amount of the withdrawal or reversal of
the inventory depreciation provision shall be determined respectively.
Inventory depreciation provision shall be made according to a single inventory item (or inventory category), and inventory
depreciation provision shall be related to the same or similar product series produced or sold in the same region, and is difficult
to be measured separately from other items.
(4) Inventory system
The inventory system adopts the perpetual inventory system.
(5) The amortization method of low-value consumables and packaging
The low-value consumables are amortized by 50-50.
12．Contract assets
(1) Methods and standards for the recognition of contract assets
The contractual asset means the right to receive a consideration and to depend on any other factor than the passage of time.
Contractual assets and liabilities under the same contract are listed in net value, and contractual assets and liabilities under
different contracts shall not be offset.
(2) Methods for determining and accounting for expected credit losses of contract assets
The provision for impairment of contract assets shall be subject to the expected credit loss method of financial instruments. For
contractual assets that do not include significant financing components, the Company uses a simplified method to measure loss
preparation. For contractual assets containing significant financing components, the Company measures loss provisions in
general methods.
In case of impairment loss of the contract assets, the amount shall be deducted and the "asset impairment loss" shall debit the
provision for impairment of the contract assets.
13．Holding assets for sale or disposal group
(1) Non-current assets held for sale or disposal group recognition criteria
If the Company recovers its book value primarily by sale (including the exchange of non-monetary assets with commercial
substance, the same below) rather than the continuous use of a non-current asset or disposal group, it should be categorized
under “held for sale”. The specific criteria shall simultaneously meet the following conditions:
① According to the practice of selling such assets or disposal groups in similar transactions, they can be sold immediately under
current conditions;
② The sale is most likely, where the company has made a resolution on a sale plan and obtained a definite purchase
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commitment, and the sale is expected to be completed within a year.
Among them, the disposal group is a group of assets disposed of as a whole by sale or other method in a transaction, and the
liabilities directly related to those assets transferred in the transaction. Where the asset group or asset group portfolio of the
disposal group shares the goodwill acquired in the enterprise merger in accordance with the Accounting Standards for Business
Enterprises No.8-Asset Impairment, the disposal group shall include the goodwill allocated to the disposal group.
(2) Accounting treatment methods
If the carrying value of non-current assets held for sale and disposal group is higher than the net amount after using the fair
value minus disposal expense when the initial measurement or remeasurement is made at the balance sheet date, the carrying
value should be written down to the net amount after using the fair value minus the disposal expense, and the amount written
down should be recognized as asset impairment loss and included in current profit or loss, and the impairment provision for
assets held for sale should also be made. For the disposal group, the confirmed asset impairment loss first offset the carrying
value of goodwill in the disposal group, and then offset the book value of the non-current assets stipulated in the accounting
Standards for Business Enterprises No.42- -Non-current Assets held for Sale, Disposal Group and Terminated Operation
(hereinafter referred to as the "Standards for Holding for Sale" in the disposal group). After deducting the selling expense, if the
net amount of the fair value of the disposal group held for sale increased on the subsequent balance sheet date, the amount
previously written down shall be restored and reversed within the amount of asset impairment loss recognized in the non-
current assets as prescribed by the held for sale standard after being classified into the holding for sale category, the carry-back
amount is recognised in profit or loss for the current period and its carrying value is increased in proportion to the carrying
value of each non-current asset in the disposal group as measured by the applicable hold-for-sale criteria other than goodwill;
The carrying value of goodwill that has been written off, as well as the asset impairment losses recognized prior to classifying
non-current assets as held for sale under the applicable holding for sale measurement criteria, cannot be rolled back.
There is no depreciation or amortization of the non-current assets held for sale or the non-current assets in the disposal group,
and the interest and other expenses of the liabilities in the disposal group held for sale continue to be recognized.
If the non-current assets or disposal group no longer meets the requirements of the held for sale category, it will not continue to
divide the held for sale category or remove the non-current assets from the disposal group held for sale and measure below:
① The book value before the held for sale category, the amount adjusted for depreciation, amortization or impairment assumed
not to be recognized in the held for sale category;
② Recreable amount.
(3) Termination of operation
Termination of operations is a component of ownership that is separate and has been disposed of or classified by the Company
under one of the following conditions:
① The component represents an independent main business or a separate main operating area;
② This component is part of a plan associated with the disposition of a separate principal business or a separate main business
area of operation;
③ The component is a subsidiary acquired exclusively for resale.
The Company shall separately report the profit and loss of terminated operation in the income statement, and the impairment
loss and loss amount of terminated operation and loss shall be presented as the profit and loss of terminated operation.
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14．Long-term equity investment
The long-term equity investment mentioned in this part refers to the long-term equity investment that the Company has the
control, joint control or significant influence on the invested unit. The Company has no control, joint control or significant
influence of the invested unit as a financial assets accounting measured at fair value and included in the current profits and losses.
If the changes is non-tradable, the Company may choose to designate it as financial assets accounting measured at fair value and
whose changes are included in other comprehensive income. The accounting policies are detailed in Note IV and 10 "Financial
Instruments".
Joint control means the common control of the Company over an arrangement in accordance with the relevant agreement, and
the relevant activities of the arrangement must be decided after the unanimous consent of the participants who share the control
right. Significant impact means that the Company has the right to participate in the decision-making of the financial and
operational policies of the investee, but is unable to control or jointly control the formulation of these policies together with
other parties.
(1) Determination of the investment cost
For the long-term equity investment acquired by the enterprise merger under the same control, the initial investment cost of the
long-term equity investment shall be based on the merger date of the share of the book value of the incorporated party in the
consolidated financial statements of the final controlling party. The difference between the initial investment cost of the long-
term equity investment and the cash paid, the transferred non-cash assets and the book value of the debts undertaken shall
adjust the capital reserves; if the capital reserve is insufficient, the retained earnings shall be adjusted. If the issue of equity
securities is taken as the merger consideration, the capital reserves shall be adjusted on the basis of the share of the shareholders'
equity of the merged party in the consolidated financial statements of the final controlling party as the initial investment cost of
the long-term equity investment and the total face value of the issued shares as equity, and the difference between the initial
investment cost of the long-term equity investment and the total face value of the issued shares; if the capital reserve is
insufficient to offset, the retained earnings shall be adjusted. If the equity of the merged party under the same control is acquired
through multiple transactions step by step, and the enterprise merger under the same control, whether it is a "package
transaction" respectively: for a "package transaction", each transaction shall be treated as a transaction that obtains control right.
If it does not belong to the "package transaction", the capital reserves shall be adjusted on the merger date according to the sum
of the book value of the equity of the shares of the final controller and the initial investment cost of the book value before the
merger date; if the capital reserve is insufficient, the retained earnings shall be adjusted. The equity investment held by the equity
method before the merger date or recognized as financial assets measured at fair value and whose changes are included in other
comprehensive income shall not be accounted for for the time being.
For the long-term equity investment acquired by the enterprise merger not under the same control, the merger cost shall be
taken as the initial investment cost of the long-term equity investment on the purchase date, and the merger cost includes the
sum of the assets paid by the acquirer, the liabilities incurred or assumed, and the equity securities issued. If the equity of the
acquirer is acquired step by step through multiple transactions and the enterprise merger is not under the same control, it shall
be treated whether it belongs to the "package transaction" respectively: for the "package transaction", each transaction shall be
treated as a transaction acquiring control. If it does not belong to the "package transaction", the sum of the book value of the
equity investment of the original acquiree plus the new investment cost shall be the initial investment cost of the long-term
equity investment calculated according to the cost method. If the equity originally held is accounted by the equity method, the
relevant other comprehensive income shall not be treated for the time being.
The fee of audit, legal services, evaluation and consulting and other related management matters incurred by the consolidated
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party or the acquirer shall be recorded into the current profits and losses at the time of occurrence.
Equity investments other than long-term equity investments formed by business mergers are initially measured at cost, which
depends on the manner in which long-term equity investments are acquired. It is determined in accordance with the actual cash
purchase price paid by the Company, the fair value of the equity securities issued by the Company, the value agreed in the
investment contract or agreement, the fair value or original book value of the assets exchanged in the non-monetary asset
exchange transaction, and the fair value of the long-term equity investment itself. Fees, taxes and other necessary expenses
directly related to the acquisition of long-term equity investments are also included in the cost of investment. For the additional
investment that can exert a significant impact on the invested unit or exercise joint control but does not constitute control, the
cost of long-term equity investment is the sum of the fair value of the original equity investment plus the cost of the new
investment determined in accordance with Accounting Standard for Business Enterprises No. 22 - Recognition and
Measurement of Financial Instruments.
(2) Follow-up measurement and profit and loss recognition methods
The long-term equity investment with joint control (except the co-operator) or significant impact, shall be accounted by the
equity method. In addition, the Company's financial statements use the cost method to account for the long-term equity
investment that can be controlled by the invested unit.
① Long-term equity investment calculated by the cost method
When the cost method is used, the long-term equity investment is priced at the cost of the initial investment, and the cost of the
additional or withdrawn investment is adjusted for the long-term equity investment. In addition to the cash dividends or profits
actually paid at the time of obtaining the investment or the cash dividends declared but not yet paid included in the
consideration, the investment income of the current period shall be recognized in accordance with the cash dividends or profits
declared by the invested unit.
② Long-term equity investment accounted for by the equity method
When using the equity method, if the initial investment cost of a long-term equity investment is greater than the fair value share
of the investee's identifiable net assets when the investment is made, the initial investment cost of the long-term equity
investment should not be adjusted; If the initial investment cost is less than the fair value share of the identifiable net assets of
the investee, the difference should be included in the current profit or loss, and the cost of long-term equity investment should
be adjusted at the same time.
When using the equity method, the investment income and other comprehensive income shall be confirmed according to the
share of the book value of the invested unit; the value and the book value of the long-term equity investment shall be adjusted
according to the profit or cash dividend of the long-term equity investment and included in the capital reserve. When
recognizing the share of the net profit and loss of the invested entity, the net profit of the invested entity shall be adjusted on
the basis of the fair value of the identifiable assets of the invested entity at the time of obtaining the investment. If the
accounting policies and accounting 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 accounting periods of the
Company, and the investment income and other comprehensive income shall be confirmed. For the transactions between the
Company and the joint venture, if the assets invested or sold do not constitute business, the unrealized internal transaction gains
and losses shall be offset by the Company, and the investment gains and losses shall be recognized. However, the unrealized
internal transaction loss incurred by the Company and the invested entity belongs to the impairment loss of the transferred
assets and shall not be offset. If the assets invested by the Company into a joint venture or an associate constitute a business,
and the investor thus obtains long-term equity investment but does not acquire control, the fair value of the invested business
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shall be taken 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 shall be fully included in the current profit or loss. Where the assets
sold by the Company to a joint venture or associate constitute a business, the difference between the consideration obtained and
the carrying value of the business should be fully included in the current profit or loss. Where the assets purchased by the
Company from associates and joint ventures constitute business, the accounting treatment shall be carried out in accordance
with the provisions of Accounting Standard for Business Enterprises No. 20 - Business Combination, and the gain or loss
related to the transaction shall be fully recognized.
When confirming the net loss incurred by the investee, the book value of the long-term equity investment and the other long-
term equity that substantially constitute the net investment of the investee shall be written down to zero. In addition, if the
Company has the obligation to bear additional losses to the investee, the estimated liabilities shall be recognized according to the
expected obligations and included in the current investment losses. If the invested entity achieves net profit in the following
period, the Company shall resume the recognized income share after the earnings share makes up for the unrecognized loss
share.
③ Acquisition of minority equity
At the time of preparing the consolidated financial statements, the capital reserves shall be adjusted due to the difference
between the new long-term equity investment of the purchase of minority shares and the share of the net assets continuously
calculated by the subsidiary since the purchase date (or merger date). If the capital reserves are insufficient to write down, the
retained earnings shall be adjusted.
④ Disposal of long-term equity investments
In the consolidated financial statements, the parent company shall partially dispose of the long-term equity investment of the
subsidiary and the difference between the disposal price and the long-term equity investment of the subsidiary and the disposal
of the relevant accounting policies described in Note IV, 6, "Judgment Standard for Control and Preparation Method of
Consolidated Financial Statements" (2).
For the disposal of long-term equity investment under other circumstances, the difference between the book value and the
actual obtained price shall be recorded in the current profit and loss.
For the long-term equity investment calculated by the equity method, if the remaining equity after disposal is still calculated by
the equity method, the other comprehensive income parts originally included in the shareholders' equity shall be treated on the
same basis as the direct disposal of the related assets or liabilities of the invested unit in the corresponding proportion. The
owner's equity recognized due to the owner's equity other than the net profit and loss, other comprehensive income and profit
distribution shall be transferred to the profit and loss of the current period.
If a long-term equity investment is accounted for by the cost method and the remaining equity is still accounted for by the cost
method after disposal, the other comprehensive income recognized by the equity method or financial instrument recognition
and measurement criteria before the acquisition of control of the investee shall be accounted for on the same basis as the direct
disposal of the relevant assets or liabilities by the investee. And carry forward the current profit and loss pro rata; Changes in
owners' equity other than net profit and loss, other comprehensive income and profit distribution in the net assets of investee
units recognized as a result of the equity method of accounting are carried forward to current profit and loss in proportion.
If the Company loses control of the investee due to the disposal of part of the equity investment, when preparing individual
financial statements, the remaining equity after disposal can exercise common control or exert significant influence on the
investee, it shall be calculated according to the equity method, and when the remaining equity is regarded as self-acquired, it shall
be adjusted by the equity method. If the remaining equity after disposal cannot jointly control or exert significant influence on
the investee, it shall be accounted for in accordance with the relevant provisions of the Standards for the recognition and
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measurement of financial instruments, and the difference between the fair value and the carrying value on the date of loss of
control shall be included in the current profit or loss. Other comprehensive income recognised by the equity method or financial
instrument recognition and measurement standards before the Company acquired control of the investee shall be accounted for
on the same basis as the direct disposal of the relevant assets or liabilities by the investee when it loses control of the investee.
Changes in owner's equity other than net profit and loss, other comprehensive income and profit distribution in the net assets of
the investee recognized by the equity method are transferred to current profit and loss when the control over the investee is lost.
Among them, if the remaining equity after disposal is accounted for by the equity method, other comprehensive income and
other owner's equity are carried forward in proportion; If the remaining equity after disposal is changed to accounting treatment
according to the recognition and measurement standards of financial instruments, other comprehensive income and other
owners' equity are all carried forward.
If the Company loses its joint control or significant impact on the invested unit due to the disposal of part of the equity
investment, the remaining equity after disposal shall be calculated according to the financial instrument recognition and
measurement criteria, and the difference between the fair value and the book value on the day of the loss of joint control or
significant impact shall be recorded into the current profit and loss. The original equity investment due to the equity method and
accounting confirmation of other comprehensive income, in the termination of the accounting of the basis of the same, because
of the investment except the net profit and loss, other comprehensive income and profit distribution of other owner's equity
changes, when the equity method all into the current investment income.
The Company will dispose of its equity investment in subsidiaries step by step through multiple transactions until it loses control.
If the above transactions are package transactions, each transaction shall be accounted for as one transaction disposing of the
equity investment of subsidiaries and losing control, and the difference between the disposal price of each disposal and the book
value of the long-term equity investment corresponding to the equity disposed of before the loss of control shall be the
difference between the disposal price and the long-term equity investment corresponding to the equity disposed before the loss
of control. First recognized as other comprehensive income, when the loss of control is transferred to the loss of control of the
current period profit and loss.
See Note Ⅳ and 20 "Long-term asset impairment" for the recognition standard and withdrawal method of impairment
provisions for long-term equity investment.
15．Investment real estate
The company's investment real estate refers to the real estate held for the purpose of earning rent or capital appreciation, or
both, including the land use right leased, the land use right held and ready to be transferred after the appreciation, and the leased
buildings. The investment real estate shall be initially measured according to the cost, and the cost model shall be adopted to
subsequently measure the investment real estate or the fair value model on the balance sheet date.
(1) Adopt the cost model
Investment real estate is depreciated or amortized by the following useful life and estimated net residual value rate:
Name Service life Estimated net residual value Annual depreciation rate or
rate amortization rate
House and buildings 20-40 years 0%-10% 2.25%-5.00%
See Note Ⅳ and 20 "Long-term asset impairment" for the recognition standard and withdrawal method of investment real
estate impairment provisions using the cost model.
(2) Adopt the fair value model
Without depreciation or amortization of the investment real estate, the book value shall be adjusted based on the fair value of
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the investment real estate on the balance sheet date, and the difference between the fair value and the original book value shall
be included in the current profit and loss.
16．Fixed assets
(1) Fixed assets recognition conditions
Fixed assets refer to tangible assets held for the production of goods, providing labor services, leasing or operation and
management, and with a service life of more than one fiscal year. Fixed assets shall be confirmed if the following conditions are
met:
① Economic benefits related to this fixed asset are likely to flow into the enterprise;
② The cost of this fixed asset can be measured reliably.
(2) Various depreciation methods of fixed assets
All kinds of fixed assets adopt the straight line method and make depreciation according to the following useful life, estimated
net residual value rate and depreciation rate:
Categories Depreciation method Service life Estimated net salvage rate Yearly depreciation rate
Houses and buildings straight-line depreciation 20-40 years 0%-10% 2.25%-5.00%
method
Ships and nets straight-line depreciation 5-30 years 3%-5% 3.17%-19.40%
method
Machinery equipment straight-line depreciation 8-20 years 0%-10% 4.50%-12.50%
method
Delivery equipment straight-line depreciation 5 years 0%-10% 18.00%-20.00%
method
Furniture and office straight-line depreciation 5 years 0%-10% 18.00%-20.00%
equipment method
(3) See Note Ⅳ and 20 "Long-term asset impairment" for the impairment test method and the withdrawal method of the
impairment provisions of fixed assets.
17．Construction in process
The cost of the project under construction shall be determined according to the actual project expenditure, including the project
expenditure incurred during the period under construction, the capitalized borrowing expenses before the project reaches the
predetermined usable state and other related expenses.
The construction under construction is carried forward to fixed assets after reaching the predetermined usable state, in which
the construction under construction is carried forward to fixed assets when delivered with fishing conditions, and the
construction is carried forward to fixed assets when the physical construction (including installation) work has been fully
completed or has been substantially completed.
See Note Ⅳ and 20 "Long-term asset impairment" for the impairment test method and impairment provision method of the
construction under construction.
18．Borrowing costs
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(1) If the loan expenses incurred by the Company can be directly attributed to the purchase, construction or production of the
assets meeting the capitalization conditions, they shall be capitalized and included in the relevant asset costs. Assets that meet
the capitalization conditions refer to the assets such as fixed assets, investment real estate and inventory that take a long time
(usually one year or more) for purchase, construction or production activities to reach the predetermined marketable status.
Other borrowing expenses shall be recognized as expenses according to the amount of occurrence and shall be included in the
current profits and losses. Borrowing expenses include borrowing interest, amortization of discount or premium, auxiliary
expenses and exchange difference due to foreign currency borrowing, etc.
(2) If the borrowing costs meet the following conditions, the capitalization should begin:
① Asset expenditure has been incurred, including the cash paid for the purchase, construction or production of assets that meet
the conditions for capitalization, the transfer of non-cash assets or the assumption of interest-bearing debts;
② Borrowing expenses have been incurred;
When the purchase, construction or production of assets meeting the capitalization conditions reach the predetermined usable
or marketable status, the borrowing expenses shall be capitalized.
In case of the abnormal interruption of the assets for more than 3 consecutive months, the capitalization of the borrowing
expenses shall be suspended. The borrowing expenses incurred during the interruption period are recognized as expenses and
recorded into the current profits and losses until the purchase and construction of the assets or the production activities resume.
If the interruption is due to the capitalization of the qualified assets purchased or produced as necessary for the intended usable
or marketable status, the capitalization of the borrowing costs continues.
(3) During the capitalization period, the amount of interest (including amortization of discounts or premiums) capitalized for
each accounting period shall be determined as follows:
① Where a special loan is borrowed for the purpose of purchase, construction or production of assets that meet the conditions
for capitalization, the amount shall be determined by the interest expense actually incurred in the current period, minus the
interest income of the unused borrowing funds deposited in the bank or the investment income obtained from temporary
investment.
② Where a general loan is occupied for the purpose of purchase, construction or production of assets that meet the conditions
for capitalization, the amount of interest on which the general loan shall be capitalized shall be calculated and determined by
multiplying the weighted average of the accumulated asset expenditure exceeding the special loan by the capitalization rate of the
general loan occupied. The capitalization rate is determined according to the weighted average interest rate of general borrowing.
Where there is a discount or premium for the loan, the amount of discount or premium for each accounting period shall be
determined according to the actual interest rate method and the amount of interest for each period shall be adjusted.
During the capitalization period, the amount of interest in each accounting period shall not exceed the amount of interest
actually incurred by relevant loans in the current period.
(4) The auxiliary expenses incurred by special loans, which are incurred before the assets purchased, built or produced eligible
for capitalization reach the predetermined usable or marketable state, are capitalized according to the amount incurred at the
time of occurrence and are included in the cost of the assets eligible for capitalization; If an asset that is purchased, built or
produced and eligible for capitalization has reached a predetermined useable or marketable state, it shall be recognized as an
expense based on the amount incurred at the time of occurrence and recorded in the current profit or loss. Auxiliary expenses
incurred by general loans are recognized as expenses according to their amount at the time of occurrence and are included in
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current profit or loss.
19．Intangible assets
(1) Intangible assets refer to the identifiable non-monetary assets owned or controlled by an enterprise without a physical form.
Intangible assets are initially measured according to the cost. Analyze and judge the service life of the intangible assets when they
are acquired.
(2) The Company generally determines the useful life of intangible assets:
① Information on the usual life cycle of the product produced with the asset;
② Technology, process and other aspects of the current situation and the estimation of the future development trend;
③ The market demand for the products or services produced with the asset;
④ Action expected by current or potential competitors;
⑤ Prospective maintenance expenditures to maintain the ability to bring economic benefits to the asset, and the Company's
ability to expect to pay related expenditures;
⑥ Relevant legal provisions or similar restrictions on the control period of the asset, such as the concession period, lease term,
etc.;
⑦ The correlation with the service life of other assets held by enterprises.
If it is impossible to foresee the period of intangible assets to bring economic benefits to the Company, it shall be regarded as
intangible assets with uncertain service life.
(3) For intangible assets with limited service life, the system shall amortize reasonably (or straight line method) during the service
life. At the end of each year, the Company will review the service life and amortization methods of intangible assets with limited
service life. If the service life and amortization method of intangible assets are different from the previous estimate, the
amortization period and amortization method will be changed. For the intangible assets with limited service life, the service life
and the estimated net residual value rate of the intangible assets are as follows:
Name Service life Judging basis Estimated net
of service life salvage rate
Land use right 42-49 years Term of land certificate 0%
Software 5-10 years Historical experience 0%
See Note Ⅳ and 20 "Long-term asset Impairment" for the impairment test method and impairment provision withdrawal
method of intangible assets with limited service life.
(4) Intangible assets with uncertain service life include intangible assets that have been continued to be used after amortization,
while intangible assets with uncertain service life shall not be amortized
(5) Internal research and development
1. Expenditure of internal research and development project, including expenditure of research stage and development stage,
including:
1) Research is an original planned survey for acquiring and understanding new scientific or technical knowledge.
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2) Development refers to the application of research results or other knowledge to a plan or design to produce new or
substantially improved materials, devices, products, etc.
2. Expenditures incurred during the research phase of internal research and development projects are recognized in the current
period's profit and loss; expenditures during the development phase that meet the following conditions are recognized as
intangible assets:
1) It is technically feasible to complete the intangible assets to use or sell them;
2) Having the intention to complete the intangible assets and use or sell them;
3) The ways in which the intangible assets generate economic benefits, including proving that the products produced with the
intangible assets exist in the market or that the intangible assets themselves exist in the market, and that the intangible assets will
be used internally, their usefulness shall be proved;
4) Having sufficient technical, financial resources and other resources to complete the development of the intangible assets and
having the ability to use or sell the intangible assets;
5) The expenditure attributable to the development phase of the intangible asset can be measured reliably.
20．Long-term asset impairment
For non-current non-financial assets such as fixed assets, construction projects under construction, use assets with limited use
life, intangible assets, investment real estate measured by cost mode and long-term equity investment in subsidiaries, joint
ventures and joint ventures, the Company determines whether there are signs of impairment on the balance sheet date. If there
are signs of impairment, the recoverable amount shall be estimated and the impairment test shall be conducted. Goodwill,
intangible assets with uncertain service life and intangible assets that have not yet reached the usable state shall be subject to
impairment test every year, regardless of whether there are signs 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 shall be drawn according to the difference and included in the impairment loss. The recoverable amount is
the higher value between the fair value of the asset minus the disposal expense and the present value of the estimated future
cash flow of the asset. The fair value of the asset is determined according to the price of the sales agreement in fair trading; if
there is no sales agreement but there is an active asset market, the fair value is determined according to the acquiree bid of the
asset; if there is no sales agreement and asset active market, the fair value of the asset is estimated on the basis of the best-
available information. The disposal expenses include legal expenses related to the disposal of the assets, related taxes, handling
fees, and direct expenses incurred to bring the assets to a marketable status. The present value of the estimated future cash flow
of the asset shall be determined according to the amount of the estimated future cash flow generated during the continuous use
of the asset and the final disposal at an appropriate discount rate. The asset impairment provision is calculated and confirmed on
the basis of a single asset. If it is difficult to estimate the recoverable amount of a single asset, the recoverable amount of the
asset group shall be determined by the asset group to which the asset belongs. Asset groups are the minimum portfolio that can
independently generate cash inflows.
In the case of impairment test of goodwill, the carrying value of goodwill is allocated to the relevant asset group reasonably from
the date of purchase; if it is difficult to allocate to the relevant asset group, it shall be allocated to the relevant asset group
portfolio. The relevant asset group or asset group portfolio is an asset group or asset portfolio that can benefit from the
synergies of business consolidation and is not greater than the reporting division determined by the Company.
When the impairment test is conducted on the relevant asset group or asset group portfolio containing goodwill, if there are
signs of impairment in the asset group or asset group portfolio related to goodwill, the impairment test shall be conducted on
the asset group or asset group portfolio excluding goodwill to calculate the recoverable amount and confirm the corresponding
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impairment loss. Then conduct impairment tests on the asset group or portfolio of asset groups containing goodwill, Compare
its carrying value to the recoverable amount, If the recoverable amount is lower than the carrying value, The amount of
impairment loss is first offset against the carrying value of goodwill in the asset group or portfolio, According to the proportion
of the book value of other assets except goodwill in the asset group or asset group portfolio, offset the book value of other
assets, Provided that the book value of each asset after deduction shall not be lower than the fair value of the asset minus the net
amount (if certain) and the present value of the estimated future cash flow of the asset (if certain), And not lower than zero.
Once the impairment loss of the above assets is recognized, the value shall not be recovered in the later period.
21．Long-term deferred expenses
Long-term deferred expenses are the expenses incurred by the Company that shall be borne by the current and subsequent
period for more than one year (excluding one year). Long-term deferred expenses are equally amortized during the benefit
period. If the long-term deferred expenses cannot benefit the later accounting period, the unamortized surplus value will be
transferred to the current profit and loss.
Long-term deferred expenses are amortized on a straight-line basis over the following period:
Name Amortization period
Renovation costs 2-5 years
22．Contract liabilities
Contract liabilities reflect the obligation to transfer goods to the customer for the consideration received or receivable. If the
customer has paid the contract consideration or has obtained the right to receive the contract consideration unconditionally
before the transfer to the customer, the contract liabilities shall be recognized according to the amount received or receivable
when the actual payment and the amount due. Contractual assets and liabilities under the same contract shall be listed in net
value, and contractual assets and liabilities under different contracts shall not be offset.
23．Employee compensation
(1) The range of employee compensation
Employee compensation refers to the various forms of compensation or compensation given by the company for the service
provided by the employee or for the termination of the labor relationship. Employee compensation includes short-term
compensation, post-resignation benefits, dismissal benefits and other long-term employee benefits. The benefits provided by the
company to the employees' spouses, children, dependants, family of the deceased employees and other beneficiaries also belong
to the employee compensation.
(2) Short-term compensation refers to the full employee compensation to be paid within 12 months after the end of the annual
reporting period provided by relevant services.
Short-term salary includes social insurance premiums such as employees' wages, bonuses, allowances and subsidies, employee
welfare, medical insurance, working injury insurance and maternity insurance, housing provident fund, trade union fund and
employee education fund, short-term paid absence, short-term profit sharing plan, non-monetary welfare and other short-term
salary.
Short-term compensation during the accounting period when the employee provides services for the company, the actual short-
term compensation is recognized as a liability and recorded in the current profit and loss or related asset costs.
Post-resignation benefits refer to all forms of remuneration and benefits provided by the Company for the retirement of the
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employee or the termination of the labor relationship with the Company, except for short-term compensation and dismissal
benefits.
Post-resignation benefit plan include the defined contribution plan and the defined benefit plan. Among them, the defined
contribution plan is the post-resignation welfare plan in which the Company no longer assumes further payment obligations; the
defined benefit plan refers to the post-resignation welfare plan other than the defined contribution plan.
The defined contribution plan includes basic endowment insurance, unemployment insurance, etc. During the accounting period
when the employee provides the service, the amount payable calculated according to the defined contribution plan shall be
recognized as liabilities and included in the current profit and loss or related asset costs.
At the end of the reporting period, the employee compensation costs arising from the defined benefit plan should be recognized
as the following components:
① Service costs, including current service costs, past service costs, and settlement gains or losses.
② Net interest on the net liabilities or net assets of the defined benefit plan, including interest income on the planned assets,
interest expense on the obligations of defined benefit plan, and interest affected by the asset ceiling.
③ Remeasure the change in the net liabilities or net assets of the defined benefit plan.
Unless other accounting standards require or allow employee benefit costs to be included in asset costs, items ① and ② above
shall be included in current profits and losses; item ③ shall be included in other comprehensive benefits and will not be
returned to profits and losses during subsequent accounting periods, but these amounts recognized in other comprehensive
benefits may be transferred within the equity.
Under the defined benefit plan, the past service costs are recognized as current expenses on the following date:
1) When modifying the defined benefit plan.
2) When the enterprise confirms the relevant restructuring costs or dismissal benefits.
Determine a settlement benefit or loss when setting a defined benefit plan settlement.
(3) Dismissal benefits refer to the compensation given by the Company to the employee to terminate the labor relationship with
the employee before the expiration of the labor contract, or to encourage the employee to voluntarily accept the reduction.
If the Company provides dismissal benefits to the employees, the Company shall confirm the liabilities and include in the
current profit and loss: when the Company cannot unilaterally withdraw the dismissal benefits due to the termination of labor
relationship plan or reduction proposal; when the Company recognizes the costs or expenses related to the restructuring of the
dismissal benefits.
(4) Other long-term employee benefits refer to all employee compensation except short-term compensation, post-resignation
benefits and dismissal benefits, including long-term paid absence, long-term disability benefits, long-term profit sharing plan, etc.
Other long-term employee benefits provided by the Company to employees that meet the conditions of the deposit plan shall
apply to the relevant provisions of the above deposit plan.
Except for the circumstances that meet the conditions for the defined contribution plan, other long-term employee welfare net
liabilities or net assets shall be recognized and measured in accordance with the relevant provisions of the defined benefit plan.
At the end of this period, the Company recognizes the employee compensation costs generated by other long-term employee
benefits as the following components:
① Service cost.
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② Net interest on other long-term employee welfare net liabilities or net assets.
③ Re-measure changes in the net liabilities or net assets of other long-term employee benefits.
In order to simplify the relevant accounting treatment, the total net amount of the above items is included in the current profit
or loss or related asset costs.
24．The obligations related to the contingent which meet the following conditions shall be recognized as estimated liabilities:
(1) This obligation is the current obligation of the enterprise;
(2) Performing this obligation is likely to lead to the outflow of economic benefits from the enterprise;
(3) The amount of the obligation can be reliably measured.
The estimated liabilities shall be initially measured at the best estimate of the expenditures required to meet the relevant current
obligations.
25．Share payment
(1) Accounting treatment method of share payment
Share payment is a transaction that grants the equity instruments or assumes the liabilities determined based on the equity
instruments for the purpose of obtaining the services provided by the employee or other parties. Share payment is divided into
share payment settled by equity and share payment settled in cash.
① Share payments settled by equity
Share payment for equity settlement of services provided by the employee, should be measured at the fair value of the employee
equity instrument on the grant date. The amount of the fair value shall be calculated in the relevant costs or expenses on the
basis of the best estimate of the waiting period, including the relevant costs or expenses on the grant date and the capital reserve
shall be increased accordingly.
On each balance sheet date during the waiting period, the Company makes the best estimate and corrects the estimated number
of feasible equity instruments based on the latest subsequent information, including changes in the number of feasible
employees. The impact of the above estimate shall be included in the relevant costs or expenses of the current period, and the
capital reserves shall be adjusted accordingly.
In exchange for the equity settlement of the fair value of the service can be measured reliably, according to the fair value of the
service in the date, if the fair value of the other services cannot be measured reliably, but the fair value of the equity instrument
can be measured reliably, according to the fair value of the date of the service, included in the relevant costs or expenses, and
increase the shareholders' equity accordingly.
② Payment in shares settled in cash
Share payments settled in cash are measured at the fair value of the liabilities determined on the basis of shares or other equity
instruments undertaken by the Company. If the right is available immediately after the grant, increase the liabilities on the grant
date and the amount of the right on the basis of the best estimate on the basis of the fair value of the liabilities.
On each balance sheet date and settlement date before the settlement of relevant liabilities, the fair value of the liabilities shall be
measured and the changes shall be included in the current profit and loss.
(2) Modify or terminate the relevant accounting treatment of the share payment plan
When the Company changes the share payment plan, if the modification increases the fair value of the granted equity instrument,
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the increase in the acquired services shall be recognized according to the increase in the fair value of the equity instrument. The
increase in the fair value of the equity instrument is the difference between the fair value of the equity instrument on the date of
amendment before and after the amendment. If the amendment reduces the total fair value of share payment or adopts any
other way unfavorable to the employee, the accounting for the services obtained shall be deemed to have never occurred unless
the Company cancels part or all of the granted equity instruments.
During the waiting period, if the granted equity instrument is cancelled, the Company will treat the cancellation of the granted
equity instrument as an accelerated exercise of right, immediately record the amount recognized during the remaining waiting
period into the current profit and loss, and recognize the capital reserves. If the employee or other party can choose to meet the
non-viable conditions but not within the waiting period, the company will cancel them as the interest granting instrument.
(3) Accounting for share payment transactions involving the Company and shareholders or actual controllers of the Company
Where one of the settlement enterprises of the Company and the enterprise receiving services is outside the Company, and one
of the other is outside the Company, accounting treatment shall be made in the consolidated financial statements of the
Company in accordance with the following provisions:
① If the settlement enterprise settles with its own equity instrument, the share payment transaction shall be treated as share
payment for equity settlement; in addition, as share payment for cash settlement.
If the settlement enterprise is an investor of the service enterprise, it shall be recognized as a long-term equity investment in the
service enterprise according to the fair value of the equity instrument on the grant date, and the capital reserves (other capital
reserves) or liabilities shall be recognized.
② If the service enterprise has no settlement obligation or the employee is its own equity instrument, the share payment
transaction shall be treated as the share payment for equity settlement; if the service enterprise has the settlement obligation and
is not its own equity instrument, the share payment transaction shall be treated as the share payment for cash settlement.
For the share payment transaction between the enterprises in the Company, and the settlement enterprise is not the same
enterprise, the confirmation and measurement of the share payment transaction in the individual financial statements of the
service enterprise and the settlement enterprise shall be handled in accordance with the above principles.
26．Preferred shares, perpetual bonds and other financial instruments
(1) The distinction between perpetual bonds and preferred shares
Financial instruments such as perpetual bonds and preferred shares issued by the Company, which meet the following
conditions:
① The financial instrument does not include the contractual obligation to deliver cash or other financial assets to other parties,
or to exchange financial assets or financial liabilities with other parties under potentially adverse conditions;
② If the financial instrument is required to be settled, if the financial instrument is not derivative, the contractual obligation of
delivering a derivative, the Company can only settle the financial instrument by exchanging a fixed amount of cash or other
financial assets in a fixed amount of its own equity instruments.
Except for financial instruments that can be classified as equity instruments under the above conditions, other financial
instruments issued by the Company shall be classified as financial liabilities.
If the financial instruments issued by the Company are compound financial instruments, they shall be recognized as a liability
according to the fair value of the liability component, and shall be recognized as "other equity instruments" according to the
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amount actually received after deducting the fair value of the liability component. The transaction costs incurred in the issuance
of compound financial instruments shall be apportioned between the liability components and the equity component according
to their respective proportion to the total issuance price.
(2) Accounting methods for perpetual debt and preferred shares, etc
Financial instruments such as perpetual debt or preferred shares, or financial instruments classified as financial liabilities, whose
related interest, dividends (or dividends), gains or losses, and gains or losses arising from redemption or refinancing, are included
in the current profit and loss, except for the borrowing expenses meeting the capitalization conditions (see Note IV and 18
"borrowing expenses").
For financial instruments such as perpetual bonds and preferred shares classified as equity instruments, upon issuance (including
refinancing), repurchase, sale or cancellation, the Company shall be treated as a change in equity, and the relevant transaction
costs shall also be deducted from the equity. The Company treats the distribution of the equity instrument holder as a profit
distribution.
The Company does not recognize the change in the fair value of the equity instruments.
27．Revenue
Accounting policies used for revenue recognition and measurement
(1) Revenue recognition principle
When the contract with the customer meets both of the following conditions, revenue is recognized when the customer obtains
control of the relevant goods:
① The parties have approved the contract and undertake to perform their respective obligations;
② The contract specifies the rights and obligations of the parties related to the transfer of the goods or services provided;
③ The contract has a clear payment clause related to the transferred goods;
④ The contract has commercial substance, that is, the performance of the contract will change the risk, time distribution or
amount of the Company's future cash flow;
⑤ A consideration entitled to for the transfer of goods to a customer is likely to be recovered.
Assess the contract on the start date of the contract, identify the individual performance obligations contained in the contract,
and share the transaction price to each individual performance obligation in relative proportion to the individual selling price of
the goods promised by each individual performance obligation. The influence of variable consideration, significant financing
components existing in the contract, non-cash consideration, payable customer consideration and other factors are considered in
determining the transaction price. Then determine whether the individual performance obligation should be performed within a
certain period or at a certain point, and recognize the income respectively when performing each individual performance
obligation.
If one of the following conditions is met, it shall be performed within a certain period; otherwise, or at a certain point:
1) The customer obtains and consumes the economic benefits brought by the enterprise's performance at the same time;
2) Customers can control the goods under construction during the performance process of the enterprise;
3) The commodities produced by the enterprise during the performance of the contract have irreplaceable purposes, and the
enterprise has the right to collect money for the accumulated performance that has been completed during the whole contract
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period.
For the performance obligations performed within a certain period of time, the revenue shall be recognized according to the
performance progress during that period. The performance progress shall be determined by the input method or the output
method according to the nature of the transferred goods. If the performance progress cannot be reasonably determined and the
cost incurred is expected to be compensated, the income shall be recognized according to the amount of the cost incurred until
the performance progress can be reasonably determined.
If one of the above conditions is not met, the revenue will be apportioned to the transaction price of the individual performance
obligation at the point when the customer obtains control of the relevant goods. When determining whether the customer has
acquired control of the commodity:
<1> The enterprise has the right to current payment for the goods, that is, the customer has the obligation of current payment
for the goods;
<2> The enterprise has transferred the legal ownership of the commodity to the customer, that is, the customer has the legal
ownership of the commodity;
<3> The enterprise has transferred the product to the customer, that is, the customer has the physical possession of the
commodity;
<4> The enterprise has transferred the main risks and remuneration in the ownership of the commodity to the customer, that is,
the customer has acquired the main risks and remuneration in the ownership of the commodity;
<5> The customer has accepted the item;
<6> Other indications that the customer has acquired control of the goods.
(2) Methods of revenue recognition used by the Company
① Revenue recognized by the Company at a point in time in the control over assets
For the foreign sale of seine fish, the Company uses sales contracts and settlement contracts as the basis, recognizes the change
of ownership based on the date of settlement contracts, and then recognizes revenue accordingly.
Most of the Company’s long-line fishing utensil and fishing goods will be transported back to China for sale. Sales contracts and
settlement contracts will be used as the basis. The Company recognizes the change of ownership based on the date of settlement
contracts and then recognizes revenue accordingly.
Processing of aquatic products for domestic sale by the Company: Shandong Zhonglu Oceanic (Yantai) Food Co., Ltd. issues
shipment confirmations according to faxed or email orders from domestic clients. The Company delivers goods based on
shipping notes issued by the sales department and confirmed by the warehouse department. After clients acknowledge receipt,
the Company will recognize revenue.
Processing of aquatic products for foreign sale by the Company: After receiving purchase orders from foreign clients, the
international trade department will issue export shipment confirmations and arrange the storage and transport department to
prepare the goods. The Company will revenue sales revenue based on shipping notes, packing lists, customs declaration forms,
and other export documents.
② Revenue recognized by the Company by performance period:
The Company’s revenue from cold storage: After receiving orders from clients and after the goods are put in storage, the
warehouse department will issue warehouse warrants to clients to confirm the specific names, specifications, pieces, weight, and
storage dates. After the warehouse warrants are signed by the warehouse manager and confirmed by clients, the Company will
recognize revenue by calculating the storage fees based on the actual number of storage days.
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28．Contract acquisition cost and contract performance cost
(1) Method of determining the amount of assets related to the contract cost
The assets related to the contract costs include the contract acquisition costs and the contract performance costs.
Contract acquisition cost, that is, if the incremental cost incurred in the contract acquisition is expected to be recovered, it is
recognized as an asset as the cost of contract acquisition. Incremental cost refers to the cost that will not occur without
obtaining a contract (such as sales commission, etc.). If the amortization period of the asset does not exceed one year, it may be
recorded into the current profit and loss at the time of occurrence.
Other expenses incurred in the Company to obtain the Contract in addition to the incremental cost expected to be recovered (e.
g. travel expenses, bid expenses, bid expenses, and related expenses incurred in preparing the bid materials) shall be recorded in
the current profits and losses upon occurrence, unless these expenses are clearly borne by the customer.
Contract performance cost, that is, the cost incurred in the performance of the contract, which does not fall within the scope of
other accounting standards for enterprises other than the Accounting Standards for Business Enterprises No.14-Revenue (2017
Revision) and meets the following conditions, is recognized as the contract performance cost as an asset:
① This cost is directly related to a current or expected acquired contract, including direct labor, direct materials, manufacturing
costs (or similar costs), costs clearly borne by the Customer, and other costs incurred only because of the Contract;
② This cost increases the future resources of the enterprise to fulfill its performance obligations;
③ This cost is expected to be recoverable.
(2) Amortization of assets related to the contract costs
Assets related to the contract cost are amortized on the same basis as the recognition of the asset and recorded into the current
profit and loss.
(3) Impairment of assets relating to the contract costs
When determining the impairment of assets related to the contract cost, firstly determine the impairment loss of other assets
recognized in accordance with other relevant business accounting standards; Then, if the book value is higher than the
difference of Item ① minus Item ②, the excess part shall be deducted and recognized as the asset impairment loss:
① The remaining consideration expected to obtain due to the transfer of the goods related to the asset;
② Estimated estimated for the transfer of the related goods.
During the period before the impairment factors after changes, make the enterprise after the item ① minus the ② of the
difference higher than the asset book value, back to the original asset impairment provision, and included in the current profits
and losses, but the book value of the assets should not exceed the assumed not provision for impairment of the assets in the
book value.
29．Governmental subsidy
(1) A lease is a contract in which the Company has transferred or acquired the right to control one or more use of identified
assets for a certain period in exchange for or pay consideration. On the commencement date of a contract, the Company
evaluates whether the contract is a lease or contains a lease.
(2) Judgment basis of government subsidies and accounting treatment methods related to assets
The government subsidies related to assets refers to the government subsidies obtained by the Company for purchase and
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construction or otherwise forming long-term assets.
Government subsidies related to assets shall be recognized as deferred income. Where government subsidies related to assets are
recognized as deferred income, they shall be recorded into profits and losses in reasonable and systematic ways within the
service life of the relevant assets. The government subsidies measured in accordance with the nominal amount shall be directly
recorded into the current profit and loss.
If the relevant assets are sold, transferred, scrapped or damaged before the end of their service life, the undistributed balance of
the relevant deferred income shall be transferred into the profit and loss of the current period of asset disposal.
The government subsidies related to the daily activities of the Company shall be included in other profits according to the
essence of the economic business. The government subsidies unrelated to the daily activities of the Company shall be included
in the non-operating income and expenditure.
(3) The judgment basis and accounting treatment method of government subsidies related to income
Revenue-related government subsidies refer to government subsidies other than those related to assets.
For the government subsidies of comprehensive projects, the Company needs to be decomposed into asset-related parts and
earnings-related parts for accounting treatment separately; if it is difficult to distinguish, it shall be classified as government
subsidies related to income.
If government subsidies related to earnings are used to compensate the related expenses or losses of the enterprise in the future
period, they shall be recognized as deferred income and included in the current profits and losses in the related costs or losses in
the period to compensate the related expenses or losses incurred by the enterprise, which shall be directly recorded in the
current profits and losses.
The government subsidies related to the daily activities of the Company shall be included in other profits according to the
essence of the economic business. The government subsidies unrelated to the daily activities of the Company shall be included
in the non-operating income and expenditure.
(4) The time of recognition of government subsidies
Where the government subsidies are monetary assets, they shall be measured at the amount received. The government subsidy,
measured according to the receivable amount, shall be confirmed at the end of the period by meeting the relevant conditions of
the financial support policy, if the government subsidy is non-monetary assets, the government subsidy shall be confirmed
according to the ownership risk and remuneration transfer of the non-monetary assets. Where non-monetary assets shall be
measured at fair value; if the fair value cannot be obtained reliably, they shall be measured at nominal amount.
When the recognized government subsidies need to be returned, if there is a balance of relevant deferred income, the book
balance of relevant deferred income shall be written down, and the excess part shall be included into the current profit and loss;
if there is no relevant deferred income, it shall be directly recorded in the current profit and loss.
30．Deferred tax assets/deferred tax liabilities
Income tax is accounted by the balance sheet debt method. On the balance sheet date, analyze and compare the book value of
assets and liabilities and their tax basis. If there is a difference between the two, recognize the deferred income tax assets,
deferred income tax liabilities and the corresponding deferred income tax expenses (or earnings). On the basis of the calculation
and determination of the current income tax (i. e., income tax payable for the current period) and deferred income tax expenses
(or income), the sum of the two is recognized as the income tax expenses (or income) in the income statement, but excluding
the income tax impact of transactions or matters directly included in the owner's equity.
Review the book value of deferred income tax assets. If it is likely that insufficient taxable income amount may be obtained to
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offset the benefits of the deferred income tax assets, the book value of the deferred income tax assets shall be written down.
31．Lease
A lease is a contract in which the Company has transferred or acquired the right to control one or more use of identified assets
for a certain period in exchange for or pay consideration. On the commencement date of a contract, the Company evaluates
whether the contract is a lease or contains a lease.
(1) The Company acts as lessee
The categories of leased assets of the Company are mainly office buildings and cold storage.
① Initial measurement
On the beginning date of the lease term, the Company shall recognize the right to use the lease assets as the use right assets
during the lease term, and recognize the present value of the outstanding lease payment as lease liabilities, except for short-term
lease and low-value asset lease. When calculating the present value of the lease payment, the Company uses the lease interest rate
as the discount rate; if the lease interest rate cannot be determined, the lessee incremental borrowing rate shall be used as the
discount rate.
② Follow-up measurement
If the company can reasonably determine the ownership of the leased assets at the time of the expiration of the lease term, the
depreciation shall be withdrawn within the remaining useful life of the leased assets. If it is impossible to reasonably determine
that the ownership of the lease asset can be acquired at the expiration of the lease term, the depreciation shall be deducted
within the shorter period of the lease term and the remaining service life of the leased asset.
See Note Ⅳ and 20 "Long-term asset impairment" for the impairment test method and impairment provision method of the use
assets.
For the lease liabilities, the Company shall calculate the interest expenses for each period during the lease term at the fixed
periodic interest rate, which is included in the current profit and loss or the relevant asset costs. Variable lease payments not
included in the measurement of lease liabilities are recorded into current profit and loss or related asset costs upon actual
occurrence.
After the start of the lease term, when the substantial fixed payment changes, the expected payable amount changes, the index or
ratio used to determine the lease payment changes, the purchase option, the renewal option, or the actual exercise situation
changes, the lease payment, and adjust the book value of the use assets accordingly. If the book value of the use right assets has
been reduced to zero, but the lease liabilities still need to be further reduced, the remaining amount shall be included in the
current profit and loss.
③ Short-term lease and low-value asset leasing
For short-term lease (in the lease start day lease not more than 12 months) and low value asset lease, the company to simplify
processing method, do not confirm the use of assets and lease liabilities, and during the lease period according to the line
method or other system reasonable lease payments into the relevant asset cost or current profit and loss.
④ Lease obligation
On the beginning date of the lease term, the Company recognizes the present value of the outstanding lease payment as a lease
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liability. When calculating the present value of the lease payment, the lease interest rate shall be used as the discount rate. If the
interest rate of the lease cannot be determined, the company's incremental borrowing rate shall be used as the discount rate. The
difference between the lease payment and its present value shall be regarded as the unidentified financing fee, and the interest
expense shall be recognized during the lease period at the discount rate of the present value of the lease payment and included in
the current profit and loss. Variable lease payments not included in the measurement of lease liabilities shall be recorded into the
current profit and loss upon actual occurrence.
After the commencement of the lease term, when the substantially fixed payment amount changes, the expected payable amount
changes, the index or ratio of the lease payment amount changes, the result of the assessment or the change of the lease
payment amount, if the book value of the asset has been reduced to zero, but the lease liabilities still need to be further reduced,
the remaining amount shall be included in the current profit and loss.
(2) The Company acts as lessor
On the commencement date of the lease, the Company divides the lease into financial lease and operating lease based on the
substance of the transaction. A finance lease is a lease that substantially transfers almost all of the risks and rewards associated
with the ownership of the leased assets. Operating lease refers to a lease other than a financial lease.
① Operating lease
The Company adopts the straight-line method to confirm the lease collection amount of the operating lease as the rental income
of each period during the lease term. Variable lease payments related to the operating lease and not included in the lease
collection amount shall be included in the current profit and loss upon actual occurrence.
② The Company’s revenue applicable to the lease standards
The Company’s revenue from vessel leases: Shandong Zhonglu Aquaculture Shipping Co., Ltd. and Habitat International
Corporation lease their vessels by time charter. The Company leases vessels equipped with operating staff to others for certain
periods. During the lease term, the ships are subject to the lessees’ dispatch. Regardless of whether they run any business using
the vessels, the Company charges lease fees to them and bears any fixed costs incurred (such as staff salaries, maintenance costs,
etc.). During the lease term, the fees are settled on a regular basis between the Company and its clients. The Company
recognizes revenue based on the number of lease days as agreed upon with the clients.
The Company’s property and other lease revenue: After entering into a lease contract with a client, the Company charges lease
fees based on the lease area and the contractual unit price to the lessee and bears any fixed costs (such as staff salaries,
maintenance costs, etc.). During the lease term, the fees are settled on a regular basis between the Company and the client. The
Company recognizes revenue based on the lease period.
32．Other Important Accounting Policies and Accounting Estimations
(1) Production safety expenditures
In November 2022, the Ministry of Finance and the Ministry of Emergency Management issued the Management Measures for
the Withdrawal and Utilization of Production Safety Expenditures in Enterprise (CZ [2022] No. 136), and it was implemented
on, and as of, the date of issue. At the same time, the Management Measures for the Withdrawal and Utilization of Production
Safety Expenditures in Enterprises (CQ [2012] No. 16) was superseded.
(2) Debt restructuring
When the Company participates in the debt restructuring as a creditor, and pays off the debt with assets or turns the debt into
equity instruments for debt restructuring, it shall be confirmed when the relevant assets meet its definition and confirmation
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conditions. If the debt-offset assets are financial assets, see Note IV, 10 and financial instruments; if the debt-offset assets are
non-financial assets, the initial measured amount is the sum of the fair value of the waived claims and other directly attributable
costs. The difference between the fair value of the abandoned claim and the book value shall be included in the current profit
and loss. If the debt is restructured by means of modifying other terms, the Company shall, according to the substantive
modification of the contract, judge whether the original creditor's right to terminate the confirmation, and confirm a new
creditor's right according to the revised terms, or recalculate the book balance of the creditor's right.
When the company participates in debt restructuring, debt restructuring with assets or converting debt into equity instruments,
terminate the relevant assets and the liquidated liabilities meet the conditions for termination of confirmation, and measure the
fair value of the equity instruments (according to the fair value of the liquidated debt when the fair value cannot be estimated
reliably). The difference between the book value of the paid debts and the book value of the transferred assets (or the
recognized amount of the equity instruments) shall be recorded in the current profit and loss.
If the debt is restructured by modifying other terms, the Company shall, according to the substantive modification of the
contract, confirm a new debt in accordance with the revised terms, or recalculate the book balance of the debt. For the
exemption of the debt restructuring, the recognition can only be terminated if the Company no longer have the current
obligation to repay the debt restructuring.
33．Changes in significant accounting policies and accounting estimates
(1) Important accounting policy changes
Since 2023, the Company has implemented the provisions of the Interpretation of Accounting Standards for Business
Enterprises No.16 issued by the Ministry of Finance, "The deferred income tax related to assets and liabilities arising from single
transactions does not apply to the accounting treatment of initial recognition exemption"
he Company shall, starting from 2023, implement the accounting treatment of the initial recognition exemption of deferred
income tax on the assets and liabilities arising from individual transactions issued by the Ministry of Finance. For the lease
liabilities and use right assets recognized at the beginning of the earliest period of the first presentation of the financial
statements, subject to the proposed provisions, and the provisions of the Accounting Standards for Business Enterprises and
other relevant financial statements items during the earliest period. This change in the accounting policy has no impact on the
company's financial statements.
34．Significant accounting judgments and estimates
In the process of applying accounting policies, the company, due to the internal uncertainty of business activities, needs to judge,
estimate and assume the book value of the statement items that cannot be accurately measured. These judgments, estimates and
assumptions are based on the past history of the company's management and on considering other relevant factors. These
judgments, estimates and assumptions affect the reported amount of revenues, expenses, assets and liabilities and the disclosure
of contingent liabilities on the balance sheet date. However, the actual results of the uncertainty of these estimates may differ
from the current estimates of the Company's management, which in turn results in a significant adjustment of the carrying
amount of the assets or liabilities affected in the future.
The Company shall periodically review the aforementioned judgments, estimates and assumptions on the basis of the change,
the accounting estimates shall be confirmed in the current period; and the current period, the impact shall be confirmed in the
current period and the future period.
On the balance sheet date, the Company shall judge, estimate and assume the amount of the financial statement as follows:
(1) Revenue recognition
As stated in Note IV, 27, "revenue", the following significant accounting judgments and estimates are involved in terms of
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revenue recognition:
Estimating the recovery of the consideration entitled to for the transfer of goods to the Customer:
Enterprises mainly rely on past experience and work to make judgments, these major judgments and estimated changes may
have an impact on the operating income, operating costs, and profit and loss during the period of the change, and may
constitute a significant impact.
(2) Significant accounting judgments and estimates related to leasing
① Identification of leases
When identifying whether a contract is a lease or includes a lease, the Company needs to evaluate whether an identified asset
exists, and the Client controls the right to use the asset for a certain period. In the appraisal, the nature of the asset, the material
replacement right, and whether the client is entitled to almost all the financial benefits arising from using the asset during the
period and to dominate the use of the asset are considered.
② Classification of leases
When the Company, as a lessor, classifies the lease into operating lease and financial lease. In the classification, the management
needs to make an analysis and judgment on whether all the risks and rewards related to the ownership of the leased assets have
been substantially transferred to the lessee.
③ Lease obligation
When the Company is the lessee, the lease liabilities are initially measured at the present value of the lease payments outstanding
on the beginning date of the lease term. When measuring the present value of the lease payment, the Company estimates the
discount rate used and the lease term of the lease contract with a renewal option or termination option. In evaluating the lease
term, the Company considers all relevant facts and circumstances related to the economic benefits of exercising the option,
including the expected changes in the facts and circumstances between the beginning of the lease term and the exercise date of
the option. Different judgments and estimates may affect the recognition of lease liabilities and tenure assets, and will affect the
profits and losses of the subsequent period.
(3) Impairment of financial instruments
The Company uses the expected credit loss model to evaluate the impairment of financial instruments, and application of the
expected credit loss model requires the company to make significant judgments and estimates, and to consider all reasonable and
grounded information, including forward-looking information. When making such judgments and estimates, the Company
deduces the expected changes in the debtor's credit risk based on the historical repayment data combined with economic
policies, macroeconomic indicators, industry risks and other factors.
(4) Reserve for inventory depreciation
According to the inventory accounting policy, the company measures the lower cost and the net realizable value, and sets aside
the inventory depreciation provision for the cost that is higher than the net realizable value and the old and unsalable inventory.
The impairment of inventory to net realizable value is based on the sale of inventory and its net realizable value. The appraisal of
inventory impairment requires the management to make a judgment and estimate on the basis of obtaining conclusive evidence
and considering the purpose of holding the inventory and the impact of matters after the balance sheet date. The difference
between the actual result and the original estimate will affect the withdrawal or reversal of the book value of the inventory and
the inventory depreciation provision during the estimated change period.
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(5) Fair value of the financial instruments
For financial instruments that do not have an active trading market, the Company determines its fair value through various
valuation methods. These valuation methods include discounted cash flow model analysis, etc. At the valuation, the Company
estimates the future cash flow, credit risk, market volatility and correlation, and selects the appropriate discount rate. These
relevant assumptions are uncertain, and their changes can have an impact on the fair value of the financial instruments.
(6) Long-term asset impairment provision
On the balance sheet date, the Company judged the possible impairment of non-current assets except the financial assets. For
the intangible assets with uncertain service life, in addition to the annual impairment test, the impairment test is also conducted
when there are signs of impairment. Other non-current assets other than financial assets shall be tested for impairment when
there is evidence that their book amount is not recoverable.
When the book value of an asset or asset group is higher than the recoverable amount, that is, the net value minus the disposal
expense and the present value of the expected future cash flow, the impairment has occurred.
The net fair value minus the disposal expense is determined by referring to the sales agreement price of a similar asset in fair
trading or the observable market price, minus the incremental cost that may be directly attributable to the disposal of the asset.
When predicting the present value of future cash flows, it is necessary to make significant judgments on the output, selling price,
related operating costs and the discount rate used in calculating the present value. In estimating the recoverable amount, the
Company will use all relevant information available, including projections of production, selling prices and associated operating
costs based on reasonable and supportive assumptions.
(7) Depreciation and amortization
After considering the residual value of the investment real estate, fixed assets and intangible assets, the Company shall make
depreciation and amortization according to the straight-line method. The Company periodically reviews the service life to
determine the amount of depreciation and amortization expense that will be included in each reporting period. The service life is
determined by the Company based on past experience with similar assets and combined with expected technical updates. If
previous estimates have changed significantly, depreciation and amortization charges will be adjusted in the future period.
(8) Deferred income tax assets
Within the limits of potentially sufficient taxable profits to offset losses, the Company recognizes deferred income tax assets for
all unused tax losses. This requires the management of the company to use a lot of judgment to estimate the time and amount of
future taxable profits, and combine the tax planning strategy to determine the amount of deferred income tax assets that should
be recognized.
(9) Income tax
In the normal business activities of the company, there are some uncertainties in the final tax treatment and calculation of some
transactions. Whether some items can be itemized before tax requires the examination and approval of the competent tax
authorities. If the final determination of these tax matters varies from the original estimated amount, the difference will affect
the current income tax and deferred income tax during the final determination period.
(10) Internal retirement benefits and supplementary retirement benefits
The amount of the company's internal retirement benefits and supplementary retirement benefits expenses and liabilities is
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determined according to various assumptions. These assumptions include the discount rate, the average growth rate of medical
expenses, the growth rate of subsidies for retired and retired personnel, and other factors. Differences in actual results and
assumptions will be immediately recognized and charged for the current year. Although the management believes that
reasonable assumptions have been adopted, the change in the actual experience value and the assumptions will still affect the
expenses and liabilities of the Company's internal retirement benefits and supplementary retirement benefits.
35．Other major accounting policies, accounting estimates and methods of preparing financial statements
① This component can generate income and incurred expenses in daily activities;
② The management of the enterprise can regularly evaluate the operating results of this component, so as
③ The enterprise can obtain the financial position, operating results and cash flow of the component.
Ⅴ.Tax
1. Main taxes and tax rates
Tax Taxation base Tax rate
VAT Output tax minus the deductible input tax 13%， 9%，6%， 5%， exempted
Urban maintenance & construction tax Circulation tax amount payable 7%
Business income taxes taxable income Exempted，25%， 20%， 8%
Explanation of enterprise income tax rate for tax entities with different rates
Name of tax entity Income tax rate
Shandong Zhonglu Oceanic Fisheries Co., LTD Pelagic fishing is exempted, the rest will be taxed at 25%
Shandong Zhonglu Haiyan Oceanic Fisheries Co., LTD exempted
AFRICA STAR FISHERIES LIMITED According to the local regulations of Ghana, the export part is taxed at
8%, and the domestic part is taxed at 25%
HABITAT INTERNATIONAL CORPORATION exempted
LAIF FISHERIES CO.LTD 25%
ZHONG GHA FOODS COMP ANY LIMITED 25%
Shandong Zhonglu Aquatic Marine Co., LTD 20%
Shandong Zhonglu Oceanic Refrigeration Co., LTD The part of the aquatic product processing industry is exempted, and
other parts are 25%
Shandong Zhonglu Oceanic (Yantai) Food Co., LTD The part of the aquatic product processing industry is exempted, and
other parts are 25%
Zhonglu Oceanic (Qingdao) Industrial Investment and Development Co., 25%
LTD
2. Tax preference
Tax Preferences and Approval Documents
In accordance with Item 1 of Article 15 of the Provisional Regulations of the People’s Republic of China on Value-Added Tax,
Item 1 of Article 35 of the Implementation Rules of the Provisional Regulations of the People’s Republic of China on Value-
Added Tax, and the notice of the Ministry of Finance and the State Taxation Administration on issuing the Notes to the Scope
of Taxation for Agricultural Products through CSZ [1995] No. 52, the sales revenue of the Company and its subsidiaries from
long-range fishing falls within the scope of the aquaculture industry as defined in the foregoing provisions, and hence, it is
entitled to the value-added tax preference.
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In accordance with the provisions of the Notice on the Comprehensive Roll-out of Business Tax to Value Added Tax
Transformation Pilot Program (No. 36 of 2016), the value-added tax is exempt for the direct or indirect international freight
forwarding services provided by taxpayers. Shandong Zhonglu Aquaculture Shipping Co., Ltd., a subsidiary of the Company, is
exempt from the value-added tax for the relevant sales revenue it has gained.
According to the enterprise income tax law of the People's Republic of China (the President of the People's Republic of China
order no. 63), the State Council of the People's Republic of China order no. 512, the implementation of the law of the People's
Republic of China, the Ministry of Finance, state administration of taxation on enjoy preferential policies of enterprise income
tax of agricultural products (try out) notice (tax [2008] no. 149), the Ministry of Finance, the state administration of taxation on
enjoy preferential enterprise income tax of agricultural products about the scope of supplementary notice (Fiscal and Taxation
[2011] No.26) and the relevant provisions of the Announcement of the State Administration of Taxation on the Implementation
of Preferential Enterprise Income Tax Treatment for Agriculture, Forestry, Animal Husbandry and Fishery Projects
(Announcement of the State Administration of Taxation No.48,2011), The company carries out the primary processing of
agricultural products and the entrusted primary processing of agricultural products, The processing fees it charges, Can be
handled according to the duty-free items of the primary processing of agricultural products. The company engaged in ocean
fishing business and primary processing of agricultural products income is exempted from enterprise income tax. The income
obtained from the company except ocean fishing and primary processing of agricultural products shall be paid at the rate of 25%.
According to the announcement of the Ministry of Finance and the State Administration of Taxation on further implementing
the preferential income tax policies for small and micro enterprises (Announcement No. 13 of 2022 of the Ministry of Finance
and the State Administration of Taxation) and the announcement on the preferential income tax policies for small and micro
enterprises and individual industrial and commercial households (Announcement No. 6 of 2023 of the Ministry of Finance and
the State Administration of Taxation), the part of the annual taxable income not exceeding 1 million yuan shall be included in
the taxable income at a reduced rate of 25%, and the taxable income shall be included at 20% For the part of the annual taxable
income exceeding 1 million yuan but not exceeding 3 million yuan, it will be included in the taxable income at a reduced rate of
25%, and the enterprise income tax shall be paid at a rate of 20%, and the subsidiary Shandong Zhonglu Aquatic Products
Shipping Co., Ltd. shall apply the tax preference.
Ⅵ. Notes to the key items in the consolidated financial statements
(The following items (including the main items in the financial statements of the parent Company) Unless specifically noted,
"beginning" means January 1,2023, "end" means December 31,2023, "previous end" means December 31,2022, "Current"
means 2023, and "previous" means 2022.）
1. Cash at bank and on hand
Item Ending Balance Initial Balance
Cash on hand 8,419,757.05 2,325,815.71
Cash at bank 234,707,665.98 224,938,526.60
Other monetary funds 19,000,000.00 -
Total 262,127,423.03 227,264,342.31
Including: the total balance deposited overseas 73,953,963.38 39,621,432.70
The total amount of funds that have restrictions on use due to 19,000,000.00 -
mortgages, pledges, or freezes
Note: Overseas deposits are cash and bank deposits of foreign subsidiaries; other monetary funds are paper margin.
2. Notes receivable
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Notes receivable that have been endorsed or discounted by our company at the end of the period and have not yet matured on the balance sheet date.
Item Ending Balance Initial Balance
Bank acceptance bills 10,000,000.00 -
total 10,000,000.00 -
3. Accounts receivable
(1) Accounts receivable by aging
Aging Ending book balance Opening book balance
Within 6 months 49,740,127.31 60,810,015.72
6 months-1 years 673,357.14 44,911.41
1-2 years 801,390.66 8,063.83
2-3 years 7,772.15 36,183.87
More than 3 years 6,518,472.25 6,530,131.36
Total 57,741,119.51 67,429,306.19
(2) Accounts receivable by provision method for allowance credit losses
Item Ending Balance
Book Balance PCT (%) Allowance for credit PCT Carrying amount
losses
Individually assessment subject to - - - - -
allowance for credit losses
Grouping assessment subject to allowance 57,741,119.51 100.00% 9,317,114.60 16.14% 48,424,004.91
for credit losses
Total 57,741,119.51 100.00% 9,317,114.60 16.14% 48,424,004.91
(Continued)
Item Initial Balance
Book Balance PCT Allowance for credit PCT Carrying amount
losses
Individually assessment subject to - - - - -
allowance for credit losses
Grouping assessment subject to allowance 67,429,306.19 100.00% 9,595,634.36 14.23% 57,833,671.83
for credit losses
Total 67,429,306.19 100.00% 9,595,634.36 14.23% 57,833,671.83
Accounts receivable that are assessed allowance for credit losses on grouping basis
Item Ending Balance
Balance Allowance for credit PCT
losses
Within 6 months 49,740,127.31 2,487,003.36 5.00%
6 months-1 years 673,357.14 67,335.71 10.00%
1-2 years 801,390.66 240,417.20 30.00%
2-3 years 7,772.15 3,886.08 50.00%
More than 3 years 6,518,472.25 6,518,472.25 100.00%
Total 57,741,119.51 9,317,114.60
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(Continued)
Item Initial Balance
Balance Allowance for credit PCT
losses
Within 6 months 60,810,015.72 3,040,500.74 5.00%
6 months-1 years 44,911.41 4,491.17 10.00%
1-2 years 8,063.83 2,419.15 30.00%
2-3 years 36,183.87 18,091.94 50.00%
More than 3 years 6,530,131.36 6,530,131.36 100.00%
Total 67,429,306.19 9,595,634.36
(3) Allowance for credit losses
Item Initial Balance Amount of change in the current period Ending Balance
Provision Recovery or reversal Write off Exchange impact
Grouping 9,595,634.36 -236,791.90 43,423.00 1,695.14 9,317,114.60
assessment subject
to allowance for
credit losses
Total 9,595,634.36 -236,791.90 43,423.00 1,695.14 9,317,114.60
(4) Accounts receivable due from the top five debtors of the Company are as follows:
Company name Ending balance of Ending balance Ending balance Proportion of the Ending balance of
accounts receivable of contract of accounts total amount allowance for doubtful
assets receivable and accounts
contract assets
A 16,919,874.00 16,919,874.00 29.30% 845,993.70
B 5,323,670.22 5,323,670.22 9.22% 266,183.51
C 2,539,481.94 2,539,481.94 4.40% 126,974.10
D 2,426,266.14 2,426,266.14 4.20% 146,362.19
E 2,083,993.53 2,083,993.53 3.61% 104,199.68
Total 29,293,285.83 - 29,293,285.83 50.73% 1,489,713.18
4.Prepayments
(1) Aging analysis of prepayments
Aging Ending Balance Initial Balance
Balance PCT Balance PCT
Within 1 year 25,903,548.53 99.14% 25,486,029.47 94.88%
1-2 years 223,428.22 0.86% 1,374,021.19 5.12%
2-3 years
More than 3 years
Total 26,126,976.75 100.00% 26,860,050.66 100.00%
(2) The top five prepayments are as follows
Company name Relationship with Ending balance Proportion of total Advance payment Reason for the
the company amount time failure of settlement
A unrelated party 13,541,737.50 51.83% 2023Annual Unfinished
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Company name Relationship with Ending balance Proportion of total Advance payment Reason for the
the company amount time failure of settlement
amortization
B unrelated party 2,390,142.04 9.15% 2023Annual Billing period not
yet reached
C unrelated party 1,536,191.45 5.88% 2023Annual Billing period not
yet reached
D unrelated party 968,803.30 3.71% 2023Annual Billing period not
yet reached
E unrelated party 770,887.50 2.95% 2023Annual Billing period not
yet reached
Total 19,207,761.79 73.52%
5. Other receivables
Item Ending Balance Initial Balance
Interest receivable - -
Dividends receivable - -
Other receivables 6,596,879.89 5,562,546.59
Total 6,596,879.89 5,562,546.59
Other receivables
① Aging of other receivables
Aging Ending book balance Opening book balance
Within 6 months 5,754,947.11 4,597,586.29
6 months-1 years 558,050.83 996,717.31
1-2 years 821,558.10 188,086.06
2-3 years 104,687.79 332,267.80
More than 3 years 4,608,407.31 4,338,281.94
Total 11,847,651.14 10,452,939.40
② Category of other receivables by nature
Nature Ending book balance Opening book balance
Guarantee deposit 1,114,033.05 605,619.95
Current account and others 10,733,618.09 9,847,319.45
Total 11,847,651.14 10,452,939.40
③ Classified disclosure by bad debt provision method
category Ending Balance
Book balance proportion Bad debt provision Provision ratio book value
Provision for bad debts based on
individual items
Provision for bad debts by combination 11,847,651.14 100.00% 5,250,771.25 44.32% 6,596,879.89
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category Ending Balance
Book balance proportion Bad debt provision Provision ratio book value
Total 11,847,651.14 100.00% 5,250,771.25 44.32% 6,596,879.89
(Continued)
category Initial Balance
Book balance proportion Bad debt provision Provision ratio book value
Provision for bad debts based on
individual items
Provision for bad debts by combination 10,452,939.40 100.00% 4,890,392.81 46.78% 5,562,546.59
total 10,452,939.40 100.00% 4,890,392.81 46.78% 5,562,546.59
1) Provision for bad debts by combination：
Combination provision item: aging combination
Aging of accounts Ending Balance
Book balance Bad debt provision Provision ratio
Within 6 months 5,754,947.11 287,747.37 5.00%
6 months-1 years 558,050.83 55,805.08 10.00%
1-2 years 821,558.10 246,467.52 30.00%
2-3 years 104,687.79 52,343.97 50.00%
More than 3 years 4,608,407.31 4,608,407.31 100.00%
Total 11,847,651.14 5,250,771.25
(Continued)
Aging of accounts Initial Balance
Book balance Bad debt provision Provision ratio
Within 6 months 4,597,586.27 229,879.38 5.00%
6 months-1 years 996,717.31 99,671.74 10.00%
1-2 years 188,086.06 56,425.83 30.00%
2-3 years 332,267.80 166,133.91 50.00%
More than 3 years 4,338,281.96 4,338,281.95 100.00%
Total 10,452,939.40 4,890,392.81
④ The provision of allowance for credit losses
The allowance for credit losses Stage one Stage two Stage three Total
12-month ECL Lifetime ECL Lifetime ECL
(credit-unimpaired) (credit-impaired)
Beginning balance 552,110.86 4,338,281.95 4,890,392.81
Revaluation of beginning balance
Provision 91,035.98 270,125.36 361,161.34
Reversal
Charge-off -
Write-off 6,445.11 6,445.11
Exchange impact 5,662.21 5,662.21
Total 642,363.94 - 4,608,407.31 5,250,771.25
128
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⑤ Other receivables due from the top five debtors are as follows:
Company name Nature of the fund Ending balance Aging Proportion in the Ending balance of
t total amount allowance for
doubtful accounts
A Custody fee 1,800,000.00 Within 6 months 15.19% 90,000.00
B Margin 491,562.50 Within 6 months 4.15% 24,578.13
C Margin 354,135.00 Within 1 year 2.99% 104,300.50
D loan 317,224.57 Within 6 months 2.68% 15,861.23
E Payment on behalf 281,057.05 2-3 years 2.37% 14,052.85
Total 3,243,979.12 27.38% 248,792.71
6. Inventories
(1) Inventories by categories
Item Ending Balance Initial Balance
Book balance Provision for Carrying amount Book balance Provision for Carrying amount
diminution in value diminution in value
or impairment or impairment
provision for costs provision for costs
to fulfil contracts to fulfil contracts
Raw materials 171,115,003.44 5,163,639.14 165,951,364.30 161,964,426.73 4,070,413.82 157,894,012.91
Low-value 525,444.02 525,444.02 595,249.07 595,249.07
consumables
Commodities 393,062,301.96 72,374,497.28 320,687,804.68 315,997,100.12 54,150,416.89 261,846,683.23
Revolving materials 1,026,078.89 1,026,078.89 1,109,413.83 1,109,413.83
Costs to fulfil 7,508,843.24 7,508,843.24 3,416,444.22 3,416,444.22
contracts
Inventories in transit - - 5,304,761.22 4,041,291.15 1,263,470.07
Total 573,237,671.55 77,538,136.42 495,699,535.13 488,387,395.19 62,262,121.86 426,125,273.33
(2) Provision for diminution in value of inventories and impairment of costs to fulfil contracts
Item Initial Balance Additions during the year Reductions during the year Ending Balance
Provision Other Reversal or write- Exchange impact
down
Raw materials 4,070,413.82 4,271,993.76 3,178,768.44 5,163,639.14
Commodities 54,150,416.89 63,288,748.89 45,064,668.50 - 72,374,497.28
Inventories in transit 4,041,291.15 - 4,041,291.15 - -
Total 62,262,121.86 67,560,742.65 - 52,284,728.09 - 77,538,136.42
7. Other current assets
Item Ending Balance Initial Balance
Input tax to be deducted 14,255,448.40 10,392,999.68
Prepaid income tax 117,102.08 374,592.16
Prepaid other taxes 12,419.16 23,854.27
Total 14,384,969.64 10,791,446.11
8. Long-term equity investments
129
Full text of the annual report of 2023, Shandong Zhonglu Oceanic Fisheries Co., Ltd.
Item Initial Balance Change in the current year
Additional Reduce Investment gains Other Other
investment investment and losse comprehensive changes in
income equity
Ji Nan Qin Zhen Food Technology 1,983,923.48 - - -569,892.16
Co., Ltd.
Total 1,983,923.48 - - -569,892.16
(Continued)
Item Change in the current year Ending Balance Impairment
Declare a cash Provision for Other reserve ending
dividend or profit impairment balance
Ji Nan Qin Zhen Food Technology Co., Ltd. 1,414,031.32
Total 1,414,031.32
9. Investment property
Investment property measured by cost
Item Buildings Total
① Cost
Initial Balance 51,308,578.35 51,308,578.35
Additions - -
Reductions - -
Ending Balance 51,308,578.35 51,308,578.35
② Accumulated depreciation or amortization -
Initial Balance 21,639,210.22 21,639,210.22
Additions 1,326,076.68 1,326,076.68
Including: Depreciation or amortization 1,326,076.68 1,326,076.68
Reductions - -
Including: Disposition -
Ending Balance 22,965,286.90 22,965,286.90
③ Provision for impairment -
Initial Balance 886,512.06 886,512.06
Additions -
Reductions -
Ending Balance 886,512.06 886,512.06
④ Carrying amount
Ending Balance 27,456,779.39 27,456,779.39
Initial Balance 28,782,856.07 28,782,856.07
10. Fixed assets
Category Ending Balance Initial Balance
Fixed assets 1,019,386,437.83 630,970,963.32
Disposal of fixed assets
130
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Category Ending Balance Initial Balance
Total 1,019,386,437.83 630,970,963.32
① Movement of fixed assets
Item Buildings Boats & nets Machinery & Transportation Furniture and Total
equipment vehicles office equipment
Cost
Initial Balance 196,047,378.12 741,147,928.30 63,509,105.74 9,548,435.79 12,066,534.30 1,022,319,382.25
Additions 18,600.75 461,748,548.76 347,337.84 742,642.85 300,152.36 463,157,282.56
Including: Purchase - 32,493,400.89 344,646.00 672,330.01 285,463.70 33,795,840.60
Transfer from construction in process - 421,177,103.21 - - - 421,177,103.21
Impact of exchange rate fluctuations 18,600.75 8,078,044.66 2,691.84 70,312.84 14,688.66 8,184,338.75
Reductions - 2,958,130.80 - 557,361.41 27,340.22 3,542,832.43
Including: Disposals or scrap - 2,958,130.80 - 557,361.41 27,340.22 3,542,832.43
Impact of exchange rate fluctuations -
Ending Balance 196,065,978.87 1,199,938,346.26 63,856,443.58 9,733,717.23 12,339,346.44 1,481,933,832.38
Accumulated depreciation -
Initial Balance 46,512,265.13 295,149,632.28 32,577,597.44 7,770,183.81 9,181,166.77 391,190,845.43
Additions 9,904,232.41 59,846,872.92 3,446,698.25 763,104.07 573,732.76 74,534,640.41
Including: Provision 9,900,454.92 57,065,527.29 3,441,517.47 690,859.82 566,965.94 71,665,325.44
Impact of exchange rate fluctuations 3,777.49 2,781,345.63 5,180.78 72,244.25 6,766.82 2,869,314.97
Reductions - 2,810,224.26 - 500,814.82 24,625.71 3,335,664.79
Including: Disposals or scrap - 2,810,224.26 - 500,814.82 24,625.71 3,335,664.79
Impact of exchange rate fluctuations -
Ending Balance 56,416,497.54 352,186,280.94 36,024,295.69 8,032,473.06 9,730,273.82 462,389,821.05
Provision for impairment -
Initial Balance - 157,573.50 - - - 157,573.50
Additions -
Reductions -
Ending Balance - 157,573.50 - - - 157,573.50
Carrying amount -
Ending Balance 139,649,481.33 847,594,491.82 27,832,147.89 1,701,244.17 2,609,072.62 1,019,386,437.83
Initial Balance 149,535,112.99 445,840,722.52 30,931,508.30 1,778,251.98 2,885,367.53 630,970,963.32
② Temporarily idle fixed assets
Item Cost Accumulated Provision for Carrying amount Remark
depreciation impairment
Machinery & equipment 2,179,020.00 1,961,118.00 - 217,902.00
Netting gear 13,428,790.56 11,473,228.33 1,955,562.23
Total 15,607,810.56 13,434,346.33 - 2,173,464.23
③ Fixed assets leased through operating leases
project Closing book value
Transport ship 209,481,709.77
④ Fixed assets with incomplete property rights certificates
131
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According to the Debt Repayment Opinion signed between our company and Shandong Fisheries Group Corporation in April
2006, as well as the Civil Ruling (2005) Lizhi Zi No. 1299 issued by the People's Court of Lixia District, Jinan City, Shandong
Fisheries Group Corporation will offset the debt owed to Shandong Zhonglu Yuanyang Fisheries Co., Ltd. by its office complex
building and office supplies located at 43 Heping Road, Lixia District, Jinan City. The original book value of the office complex
building is 54,223,132.40 yuan, with a book value of 31,807,244.79 yuan (of which the self use part is included in fixed assets
and the rental part is included in investment real estate). The land used for this property was originally allocated land, and the
property ownership certificate is for the property. Not yet processed。
11. Construction in process
Category Ending Balance Initial Balance
Constructed in process 65,288,052.12 344,727,296.32
Construction materials
Total 65,288,052.12 344,727,296.32
① Construction in process
Item Ending Balance Initial Balance
Book balance Provision for Carrying amount Book balance Provision for Carrying amount
impairment impairment
Atlantic Siege Project 4,077,658.55 4,077,658.55 - 4,077,658.55 4,077,658.55
Zone B of Phase I of the 42,494,948.92 42,494,948.92 13,957,959.89 13,957,959.89
Marine Innovation Industrial
Park Project
Tailong 7 seine boat - 169,190,918.22 169,190,918.22
Tailong 9 seine boat - 161,578,418.21 161,578,418.21
Zhonglu Fishing 1003 11,396,551.60 11,396,551.60
Zhonglu Fishing 1004 11,396,551.60 11,396,551.60
total 69,365,710.67 4,077,658.55 65,288,052.12 348,804,954.87 4,077,658.55 344,727,296.32
② Movement of significant construction in progress
Project name Budget Initial Balance Additions Transfer to fixed Other Ending Balance
assets reductions
Tyrone 7 Seine Boat 207,000,000.00 169,190,918.22 19,004,434.81 188,195,353.03 -
Tyrone 9 Seine Boat 207,000,000.00 161,578,418.21 26,586,668.30 188,165,086.51 -
Phase I of Marine Innovation 95,038,200.00 13,957,959.89 28,536,989.03 42,494,948.92
Industrial Park Project
Sea Future cargo ship 13,000,000.00 11,396,551.60 11,396,551.60
Sea Blazer cargo ship 13,000,000.00 11,396,551.60 11,396,551.60
SEA BLAZER 39,460,000.00 44,816,663.67 44,816,663.67 -
Total 574,498,200.00 344,727,296.32 141,737,859.01 421,177,103.21 - 65,288,052.12
(Continued)
Project name Proportion of Project progress Interest capitalization Where: the Current Source of funds
cumulative accumulated amount amount of interest interest
project input to capitalization in capitalization
budget the current period rate
Tyrone 7 Seine Boat 90.92% 100.00% 9,513,320.61 861,838.70 4.00% Long term loans
and own funds
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Tyrone 9 Seine Boat 90.90% 100.00% 9,513,320.61 861,838.70 4.00% Long term loans
and own funds
Phase I of Marine Innovation 44.71% 44.71% 4,182,444.35 3,239,777.69 3.50% Long term loans
Industrial Park Project and own funds
Sea Future cargo ship 87.67% 87.67% 192,615.67 192,615.67 3.97% Long term loans
and own funds
Sea Blazer cargo ship 87.67% 87.67% 192,615.67 192,615.67 3.97% Long term loans
and own funds
SEA BLAZER 113.57% 100.00% Own funds
Total 23,594,316.91 5,348,686.43 -
12. Right-of-use asset
Item Buildings Total
（1）Cost
Initial Balance 1,809,939.63 1,809,939.63
Additions 390,058.87 390,058.87
Including: New leases 381,871.11 381,871.11
Impact of exchange rate fluctuations 8,187.76 8,187.76
Reductions 1,708,962.13 1,708,962.13
Including: Exchange impact 1,708,962.13 1,708,962.13
Impact of exchange rate fluctuations
Ending Balance 491,036.37 491,036.37
（2）Accumulated depreciation -
Initial Balance 1,399,893.66 1,399,893.66
Additions 517,562.56 517,562.56
Including: Provision 512,656.85 512,656.85
Impact of exchange rate fluctuations 4,905.71 4,905.71
Reductions 1,518,026.57 1,518,026.57
Including: Exchange impact 1,518,026.57 1,518,026.57
Impact of exchange rate fluctuations -
Ending Balance 399,429.65 399,429.65
Provision for impairment -
Initial Balance -
Additions -
Reductions -
Ending Balance -
Carrying amount -
Ending Balance 91,606.72 91,606.72
Initial Balance 410,045.97 410,045.97
13. Intangible assets
Item Land use rights Computer software Total
①Cost
Initial Balance 69,409,842.26 2,335,115.89 71,744,958.15
Additions - - -
Including: Purchase - - -
Reductions - - -
Including: Disposition -
133
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Ending Balance 69,409,842.26 2,335,115.89 71,744,958.15
②Accumulated depreciation -
Initial Balance 7,418,225.45 1,699,028.66 9,117,254.11
Additions 1,428,972.48 242,348.87 1,671,321.35
Including: Provision 1,428,972.48 242,348.87 1,671,321.35
Reductions - - -
Including: Disposition
Ending Balance 8,847,197.93 1,941,377.53 10,788,575.46
③Provision for impairment -
Initial Balance -
Additions -
Including: Provision -
Reductions -
Including: Disposition -
Ending Balance -
④Carrying amount -
Ending Balance 60,562,644.33 393,738.36 60,956,382.69
Initial Balance 61,991,616.81 636,087.23 62,627,704.04
14. Long-term deferred expenses
Item Initial Balance Additions Amortization Reductions Ending Balance
Office building decoration 79,090.36 1,993,706.00 69,615.29 2,003,181.07
Decoration of Tuna Technology Museum 1,473,925.23 122,827.11 1,351,098.12
total 79,090.36 3,467,631.23 192,442.40 - 3,354,279.19
15. Deferred tax assets and deferred tax liabilities
(1) Deferred tax assets before offsetting
Item Ending Balance Initial Balance
Deductible Deferred tax assets Deductible Deferred tax assets
temporary temporary
differences differences
Allowance for credit losses 880,463.98 177,704.36 893,111.12 223,277.77
Deferred income 4,989,377.76 1,247,344.44 5,338,621.20 1,334,655.30
Total 5,869,841.74 1,425,048.80 6,231,732.32 1,557,933.07
(2) Deferred tax liabilities before offsetting
Item Ending Balance Initial Balance
Taxable temporary Deferred tax Taxable temporary Deferred tax
differences liabilities differences liabilities
Accelerated depreciation of fixed assets before tax deduction 9,907,422.47 2,476,855.62 10,441,997.43 2,610,499.36
total 9,907,422.47 2,476,855.62 10,441,997.43 2,610,499.36
134
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(3) The items not recognised deferred tax assets
Item Ending Balance Initial Balance
Deductible temporary differences -Allowance for credit losses 13,687,421.87 13,592,916.05
Deductible temporary differences -Provision for inventories 77,538,136.42 62,262,121.86
Deductible temporary differences -Deductible losses 36,075,622.60 37,304,854.04
Deductible temporary differences -Provision for impairment of 4,077,658.55 4,077,658.55
construction in progress
Total 131,378,839.44 117,237,550.50
Note: No deferred income tax assets are recognized for deductible temporary differences, due to the exemption of corporate
income tax for those companies that form deductible temporary differences. There is uncertainty about whether some
companies will be able to generate sufficient taxable income in the future.
(4) The deductible losses of unconfirmed deferred income tax assets will expire in the following years
Year Ending Balance Initial Balance Remarks
year 2025 36,075,622.60 37,197,760.25
year 2026 - 107,093.79
total 36,075,622.60 37,304,854.04
16. Other non-current assets
Item Ending Balance Initial Balance
Book balance Provision for Carrying amount Book balance Provision for Carrying
impairment impairment amount
Prepayment for land 2,000,000.00 2,000,000.00 2,000,000.00 2,000,000.00
Prepayment for 13,402,660.37 13,402,660.37 10,851,990.71 10,851,990.71
construction in
process
Total 15,402,660.37 - 15,402,660.37 12,851,990.71 12,851,990.71
17. Short-term loans
Item Ending Balance Initial Balance
Collateral loan 18,021,175.00 10,012,533.29
Loans on credit 39,990,136.42 10,011,611.11
Total 58,011,311.42 20,024,144.40
Note: The loan balance of the current period includes the interest payable of RMB 41,311.42;
The collateral for the mortgage loan is as follows:
(1) Property of YFQZK No.102954,102984,102985,102986,106566, K028075, with the book value of 28,541,106.44 yuan;
(2) Land use right of YGY (2002) No. 1047 , with book value of 4,558,790.48 yuan.
18. Notes payable
Item Ending Balance Initial Balance
Banker's acceptance 35,000,000.00
135
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total 35,000,000.00
19. Accounts payable
Item Ending Balance Initial Balance
Within 1 year(including 1 year) 84,462,881.55 129,391,901.74
More than 1 year 4,863,467.53 4,880,402.31
Total 89,326,349.08 134,272,304.05
20. Advances from customers
Item Ending Balance Initial Balance
Rent 1,776,439.64 1,684,961.19
Total 1,776,439.64 1,684,961.19
21. Contract liabilities
Item Ending Balance Initial Balance
Advance payment for goods 29,481,400.42 49,576,606.91
Total 29,481,400.42 49,576,606.91
22. Employee benefits payable
(1) Movement of employee benefits payable
Item Initial Balance Increase Decrease Ending Balance
Short-term employee benefits 53,077,921.51 202,903,864.90 194,912,816.49 61,068,969.92
Post-employment benefits—defined contribution plans 2,026,077.30 13,233,862.97 13,122,099.57 2,137,840.70
Termination benefits 3,962.00 423,428.00 423,428.00 3,962.00
Other benefits due within one year 8,073.37 15,520.86 15,008.00 8,586.23
Total 55,116,034.18 216,576,676.73 208,473,352.06 63,219,358.85
(2) Details of the short-term employee benefits
Item Initial Balance Accrued Paid Ending Balance
Salaries, bonus, and allowances 51,653,463.36 188,269,529.48 180,359,966.96 59,563,025.88
Staff welfare 72,168.00 3,240,786.52 3,312,954.52 -
Social insurances 12,715.32 5,824,975.46 5,837,690.78 -
Including: Medical insurance 10,928.96 5,119,815.42 5,130,744.38 -
Work injury insurance 1,786.36 702,802.93 704,589.29 -
Maternity insurance - 2,357.11 2,357.11 -
Housing Fund - 4,621,650.21 4,621,650.21 -
Union funds and employee education fee 1,339,574.83 946,923.23 780,554.02 1,505,944.04
Short-term paid absences -
Short-term profit sharing plan -
Total 53,077,921.51 202,903,864.90 194,912,816.49 61,068,969.92
(3) Defined contribution plans
Item Initial Balance Accrued Paid Ending Balance
Primary endowment insurance 21,651.20 10,328,541.15 10,350,192.35 -
Unemployment insurance 947.24 446,575.23 447,522.47 -
Pension insurance 2,003,478.86 2,074,492.96 1,940,131.12 2,137,840.70
Social security and subsidies for retired workers - 384,253.63 384,253.63 -
136
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Total 2,026,077.30 13,233,862.97 13,122,099.57 2,137,840.70
23. Taxes and surcharges payable
Category Ending Balance Initial Balance
Value added tax 362,005.97 282,208.25
Enterprise income tax 2,233,670.77 1,541,093.07
Urban maintenance and construction tax 19,762.85 4,008.32
Estate tax 348,748.88 340,194.59
Land use tax 323,681.23 200,210.82
Individual income tax 774,108.88 559,650.11
Educational surtax 14,116.30 2,863.10
Withholding tax 1,464,295.39 1,239,249.44
Other taxes and surcharges 125,058.00 172,198.62
Total 5,665,448.27 4,341,676.32
24.Other payables
Item Ending Balance Initial Balance
Interest payable
Dividends payable 1,616,659.01
Other payables 17,961,560.95 18,326,716.51
Total 19,578,219.96 18,326,716.51
(1) Dividends payable
Item Ending Balance Initial Balance Reasons for non-payment for more than
1 year
Common stock dividend 1,616,659.01
Total 1,616,659.01
(2) Other payables
Item Ending Balance Initial Balance
Security deposit 5,819,576.92 5,965,114.77
Staff expenses 692,412.01 716,721.01
Safety cost 1,655,016.56 1,667,772.64
other 9,794,555.46 9,977,108.09
Total 17,961,560.95 18,326,716.51
25. Non-current assets due within one year
Item Ending Balance Initial Balance
Long-term loans due within one year 8,837,283.90 6,502,041.67
Total 8,837,283.90 6,502,041.67
26. Other current liabilities
Item Ending Balance Initial Balance
Advance collection of sales tax 6,256.07 223,557.01
Total 6,256.07 223,557.01
137
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27. Long-term loans
Long-term loans by category
Item Ending Balance Initial Balance
Secured loan 111,410,333.33 96,093,333.33
Mortgage loan 48,766,286.11
Mortgage or guarantee a loan 288,092,457.73 145,200,000.00
Less: long-term loans maturing within one year 8,837,283.90 6,502,041.67
Total 390,665,507.16 283,557,577.77
Note 1: The guarantors of the guaranteed loan are Shandong Zhonglu Haiyan Ocean Fishery Co., Ltd. and Shandong Zhonglu Ocean (Yantai) Food
Co., LTD.
Note 2: Mortgage and collateral of Tailong 7 and Tailong 9, with book value RMB 368,415,052.42, and the property located at Room 2501-2506,
Building 1,31, Xianxialing Road, Laoshan District, the number of property ownership certificate: Lu 2022 QDLS BDCQ No. 0051706,
0051707,0051708,0051709,005170051710, book value RMB 67,755,1711,0052,224.37. The guarantor is Shandong Zhonglu Haiyan Ocean Fishery Co.,
LTD. And Shandong Zhonglu Ocean (Yantai) Food Co., LTD.
28. Long-term employee benefits payable
Item Ending Balance Initial Balance
Other long-term benefits 543,215.85 616,935.20
Total 543,215.85 616,935.20
29. Deferred income
Item Initial Balance Increase Decrease Ending Balance Reason for the
deferred income
Government grants 13,500,315.67 40,000,000.00 1,519,346.94 51,980,968.73 asset-related
Total 13,500,315.67 40,000,000.00 1,519,346.94 51,980,968.73
30. Share capital
Item Initial Balance Movement Ending Balance
Issuance of new Bonus shares Capital reserve Others sub-total
share transfer in
Total shares 266,071,320.00 266,071,320.00
31. Capital reserve
Item Initial Balance Increase Decrease Ending Balance
Share premiums 189,093,492.79 189,093,492.79
Other capital reserve 106,526,779.23 106,526,779.23
Total 295,620,272.02 - - 295,620,272.02
32. Other comprehensive income
Item Initial Balance (A) Year ended 31/12/2023
Amount before tax Less: OCI in prior Less: OCI in prior
periods transfer in periods carried
profit or loss for the forward to retained
current period earnings
138
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OCI items which will be reclassified subsequently to profit or -6,291,344.58 3,695,625.18 - -
loss
Translation differences from translation of foreign currency -6,291,344.58 3,695,625.18
financial statements
Total of OCI -6,291,344.58 3,695,625.18 - -
(Continued)
Item Year ended 31/12/2023 Ending Balance
Less: income tax Amount after tax Amount after tax (C)=(A)+(B
attributable to the attributable to
Company(B) minority interests
OCI items which will be reclassified subsequently to profit or - 2,921,263.10 774,362.08 -3,370,081.48
loss
Translation differences from translation of foreign currency 2,921,263.10 774,362.08 -3,370,081.48
financial statements
Total of OCI - 2,921,263.10 774,362.08 -3,370,081.48
33. Special reserve
Item Initial Balance Increase Decrease Ending Balance
Safety costs - 2,679,975.32 2,678,402.84 1,572.48
Total - 2,679,975.32 2,678,402.84 1,572.48
34. Surplus reserve
Item Initial Balance Increase Decrease Ending Balance
Statutory surplus reserve 21,908,064.19 21,908,064.19
Total 21,908,064.19 - - 21,908,064.19
35. Undistributed profit
Item Year ended 31/12/2023 Year ended 31/12/2022
Retained earnings As at 31/12/2022 before adjustment 409,764,423.32 379,524,911.94
The total adjustment of retained earnings As at 1/1/2023 (Increase+, decrease-)
Retained earnings As at 1/1/2023 after adjustment 409,764,423.32 379,524,911.94
Add: Net profit attributable to the Company during the year 39,599,325.61 30,239,511.38
Less: Appropriation of statutory surplus reserve -
Withdrawal of discretionary surplus reserve
Extract general risk provision
Common stock dividends payable
Common stock dividends converted to share capital
Retained earnings as at 31/12/2023 449,363,748.93 409,764,423.32
36. Operating income and operating costs
(1) Operating income and operating costs
Item Year ended 31/12/2023 Year ended 31/12/2022
Income Costs Income Costs
Primary operating business 1,134,306,096.06 996,071,048.11 974,379,678.94 871,717,684.87
Other operating business 10,946,326.03 1,904,219.23 11,048,626.43 1,983,875.15
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Item Year ended 31/12/2023 Year ended 31/12/2022
Income Costs Income Costs
Total 1,145,252,422.09 997,975,267.34 985,428,305.37 873,701,560.02
(2)Status of income from contracts
① Operating income and operating costs by recognition timing
Item Product sales revenue Processing income Cold storage revenue
Operating income Operating cost Operating Operating cost Operating Operating cost
income income
Confirm at a certain 988,950,583.08 891,090,888.04 4,556,012.13 4,009,714.33 - -
point
Confirm within a certain - - - - 6,808,770.04 2,421,902.65
period of time
Total 988,950,583.08 891,090,888.04 4,556,012.13 4,009,714.33 6,808,770.04 2,421,902.65
（Continue）
Other business income Total
Item
Operating income Operating cost Operating income Operating cost
Confirm at a certain point 4,276,994.74 - 997,783,589.95 895,100,602.37
Confirm within a certain 1,698,113.20 - 8,506,883.24 2,421,902.65
period of time
Total 5,975,107.94 - 1,006,290,473.19 897,522,505.02
② Income adapted to the lease standard
Item Boat charter Rent Rental and others Total
Operating income Operating cost Operating Operating cost Operating income Operating cost
income
Income from main 133,990,730.81 98,561,814.99 - - 133,990,730.81 98,561,814.99
business
Other business - - 4,971,218.09 1,890,947.33 4,971,218.09 1,890,947.33
income
Total 133,990,730.81 98,561,814.99 4,971,218.09 1,890,947.33 138,961,948.90 100,452,762.32
(3) Description of the performance obligations
The sale of goods by the Company is the performance obligation at a certain point, and the Company recognizes the income
when the control of the goods transfers; the processing service of the Company is the performance obligation at a certain point,
and the Company recognizes the income when the delivery delivers the products.
The cold storage fee income of the company belongs to the performance obligation within a certain period of time, and the
company recognizes the income based on the actual days of goods stored every month.
The ship lease income of the Company belongs to the performance obligations performed within a certain period of time, and
the Company recognizes the income in accordance with the consistent lease days determined with the customer.
The company's housing and other rental income of the company belongs to the performance obligations performed within a
certain period of time, and the company recognizes the income according to the customer's lease period.
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37. Taxes and surcharges
Item Year ended 31/12/2023 Year ended 31/12/2022
Urban maintenance and construction tax 123,538.99 26,174.82
Educational surcharge 52,901.70 11,071.73
Local educational surcharge 35,267.77 7,381.10
Property tax 1,876,323.05 1,830,955.81
Land use tax 491,634.92 485,954.94
Stamp duty 178,829.99 323,934.60
Vehicle and vessel tax 166,451.76 22,276.69
Others 65.04
Total 2,925,013.22 2,707,749.69
38. Selling and distribution expenses
Item Year ended 31/12/2023 Year ended 31/12/2022
Employee compensation expenditure 2,125,067.97 2,109,250.88
Business promotion fees 860,160.87 694,114.96
Travelling expenses 311,248.56 151,823.54
Depreciation charges 98,442.05 110,135.36
Depreciation of right-of-use asset 52,953.25
Communication expenses 11,605.04 20,713.67
Others 237,916.54 241,709.44
Total 3,644,441.03 3,380,701.10
39. General and administrative expenses
Item Year ended 31/12/2023 Year ended 31/12/2022
Employee compensation expenditure 50,809,554.49 44,888,814.48
Depreciation and amortization charges 3,923,713.57 2,800,685.41
Depreciation of Right-of-use assets 512,656.85 1,964,646.14
Travelling expenses 1,770,966.60 1,229,326.50
Business entertainment 784,909.97 486,442.83
Vehicle expenses 1,009,026.61 1,044,697.40
Agent service fees 1,043,733.58 1,426,362.08
Office expenses 3,791,321.72 3,823,262.06
Water and electricity expenses 1,681,203.55 1,587,335.49
Others 3,294,821.54 5,122,662.68
Total 68,621,908.48 64,374,235.07
40. Research and development expenses
Item Year ended 31/12/2023 Year ended 31/12/2022
Employee compensation expenditure 1,271,827.17 2,286,319.66
Materials 892,761.14 246,207.46
Depreciation and amortization charges 507,920.78 160,974.73
Commissioned external r&d fee 300,000.00
Others 604,057.96 400,587.40
Total 3,276,567.05 3,394,089.25
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41. Finance expenses
Item Year ended 31/12/2023 Year ended 31/12/2022
Interest expenses 11,440,531.09 2,904,189.24
Less: interest income 408,232.29 672,995.57
Losses or gains from foreign exchange -1,988,101.64 -13,875,632.54
Finance charges 1,125,109.11 989,435.15
Interest expenses on lease liabilities - 57,441.35
Others 11,760.07 24,009.22
Total 10,181,066.34 -10,573,553.15
42. Other income
Item Year ended 31/12/2023 Year ended 31/12/2022
International compliance Enhancement grant funds 49,101,500.00 45,608,125.30
Financial subsidies for special construction funds of the Blue 738,508.76 698,486.88
Economic Zone
Industrial and commercial capital investment in rural revitalization 1,400,000.00
project construction award
others 1,791,917.62 1,442,053.68
total 53,031,926.38 47,748,665.86
43. Investment income
Item Year ended 31/12/2023 Year ended 31/12/2022
Income from long-term equity investments accounted for by the equity -569,892.16 -398,421.52
method
Investment gains from the disposal of trading financial assets 1,076,034.24
Investment gain from disposal of derivative financial liabilities 96,000.00
Gains on debt restructuring -79,486.61
Total -649,378.77 773,612.72
44. Credit impairment losses
Item Year ended 31/12/2023 Year ended 31/12/2022
Allowance for credit losses of accounts receivable 236,791.90 -740,557.76
Allowance for credit losses of other receivables -361,161.34 -86,309.44
Total -124,369.44 -826,867.20
45. Impairment on assets
Item Year ended 31/12/2023 Year ended 31/12/2022
Provision for diminution in value of inventory and Loss of contract -67,560,742.65 -59,961,212.95
performance costs
Total -67,560,742.65 -59,961,212.95
46. Gains from disposal of assets
Item Year ended 31/12/2023 Year ended 31/12/2022
Gains and losses on disposal of fixed assets 13,887.78 5,081,530.63
47. Non-operating income
142
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Item Year ended Year ended Amount to be included in non-recurring
31/12/2023 31/12/2022 gain or loss for the year
Reparations income 1,502,649.65 1,502,649.65
Others 80,670.25 176,255.05 80,670.25
Total 1,583,319.90 176,255.05 1,583,319.90
48. Non-operating expenses
Item Year ended Year ended Amount to be included in non-recurring
31/12/2023 31/12/2022 gain or loss for the year
Loss of scrapped fixed assets 98,172.78 46,310.64 98,172.78
Others - 25,002.45 -
Total 98,172.78 71,313.09 98,172.78
49. Income tax expenses
(1) Details of income tax expenses
Item Year ended 31/12/2023 Year ended 31/12/2022
Current income tax 3,415,238.29 2,794,728.27
Deferred income tax -759.47 -80,077.20
Total 3,414,478.82 2,714,651.07
(2) Reconciliation between income tax expenses and accounting profit is as follows:
Item Year ended 31/12/2022
Profit before tax 44,824,629.05
Income tax expenses calculated at statutory/applicable tax rates 11,206,157.26
Effect of different tax rate of subsidiaries -441,553.71
Effect of adjustment for income tax in prior year 48,025.77
Effect of income not subject to income tax -11,135,894.37
Effect of expenses nondeductible for tax purposes 202,421.63
Effect of using deductible losses of deferred tax assets not recognised in prior periods -307,320.94
Effect of unrecognised deductible temporary differences and deductible losses in current period 3,842,643.18
Income tax expenses 3,414,478.82
50. Other comprehensive income
As note Ⅵ.32.
51. Notes to statement of cash flows
(1) Cash flows from operating activities
① Cash received related to other operating activities
Item Year ended 31/12/2023 Year ended 31/12/2022
Finance expenses- interest income 408,232.29 672,995.57
Government grants and others 93,079,769.72 47,472,059.73
Credit deposit - 924,476.50
Current account and other 2,535,670.25 8,177,260.88
Total 96,023,672.26 57,246,792.68
② Cash paid related to other operating activities
143
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Item Year ended Year ended
31/12/2022 31/12/2022
Cash payment to selling expenses 908,274.16 1,108,361.61
Cash payment to administrative expense 13,711,386.50 13,907,155.67
Cash payment to research and development expenses 1,496,819.10 946,794.86
Current account and other 1,125,109.11 1,254,472.12
Total 17,241,588.87 17,216,784.26
(2) Cash flows from investing activities
Cash received related to other investing activities
Item Year ended Year ended
31/12/2023 31/12/2022
Construction deposit 5,000,000.00
Total 5,000,000.00
(3) Cash flows from financing activities:
① Cash paid related to other financing activities
Item Year ended 31/12/2023 Year ended 31/12/2022
Lease payment 195,000.00 1,780,432.76
Total 195,000.00 1,780,432.76
② Changes in liabilities arising from financing activities
Item Initial Balance Current increase Current decrease Ending Balance
Cash movement Non-cash Cash movement Non-cash
movement movement
Short-term loan 20,024,144.40 107,370,000.00 17,167.02 69,400,000.00 58,011,311.42
Long-term loan 283,557,577.77 115,665,507.16 277,664.46 8,835,242.23 390,665,507.16
Non-current 6,502,041.67 8,837,283.90 6,502,041.67 8,837,283.90
liabilities due within
one year
Total 310,083,763.84 223,035,507.16 9,132,115.38 75,902,041.67 8,835,242.23 457,514,102.48
52. Supplement to statement of cash flows
(1) Supplement to statement of cash flows
Item Year ended Year ended
31/12/2023 31/12/2022
1.Net profit adjusted to cash flows from operating activities
Net profit 41,410,150.23 38,649,543.34
Add:losses Provision for asset impairment 15,276,014.56 54,631,761.97
Credit impairment 74,501.33 826,867.20
Depreciation of fixed assets, depletion of oil and gas assets, depreciation of productive biological 72,965,338.74 58,223,115.23
assets and depreciation of investment property
Depreciation of right-of-use asset 516,267.02 2,017,599.39
Amortization of intangible assets 626,219.03 696,336.48
Amortization of long-term deferred expenses 172,669.76 121,875.00
Losses on disposal of fixed assets, intangible assets and other long-term assets ("-" for gains) -13,887.78 -5,081,530.63
144
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Item Year ended Year ended
31/12/2023 31/12/2022
Losses on write-down of fixed assets ("-" for gains） 98,172.78 46,310.64
Losses from changes in fair value ("-" for gains)
Financial expenses ("-" for income) 7,806,062.67 -634,206.25
Investments losses ("-" for gains) 569,892.16 -773,612.72
Decreases in the deferred tax assets ("-" for increases) 132,884.27 87,012.89
Increases in the deferred tax liabilities ("-" for decreases) -133,643.74 -167,090.09
Decreases in inventories ("-" for increases) -84,850,276.36 -207,166,597.03
Decreases in operating receivables ("-" for increases) -12,104,355.67 -16,135,680.34
Increases in operating payables ("-" for decreases) 38,990,748.82 87,390,968.02
Others
Net cash flows from operating activities 81,536,757.82 12,732,673.10
2. Significant investing and financing activities not involving cash inflow and outflow
Conversion of debt into capital
Convertible corporate bonds maturing within one year
Fixed assets acquired under financial lease
3. Net change in cash and cash equivalents
Cash as at 31/12/2023 243,127,423.03 227,264,342.31
Less: cash As at 1/1/2023 227,264,342.31 209,649,305.99
Add: cash equivalents as at 31/12/2023
Less: cash equivalents as at 31/12/2022
Net increase in cash and cash equivalents 15,863,080.72 17,615,036.32
(2) Cash and cash equivalents
Item Balance as at Balance as at
31/12/2023 31/12/2022
1. Cash 243,127,423.03 227,264,342.31
Including: cash on hand 8,419,757.05 2,325,815.71
Unrestricted bank deposits 234,707,665.98 224,938,526.60
2.Cash equivalents
Bond investments due within 3 months
3. Cash and cash equivalents As at 31/12/2023 243,127,423.03 227,264,342.31
(3) Monetary funds other than cash and cash equivalents
Item Year ended Year ended argument
31/12/2023 31/12/2022
Other monetary funds 19,000,000.00 - Bill deposit
53. Ownership or using rights of assets subject to restriction
Item Ending Balance
Book balance Book value Restricted type Restricted case
Monetary funds 19,000,000.00 19,000,000.00 Bill deposit
Fixed assets 495,427,503.84 462,793,007.43 Mortgage for loan
Intangible assets 9,929,529.00 4,558,790.48 Mortgage for loan
Total 524,357,032.84 486,351,797.91
（continue）
145
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Item Initial Balance
Book balance Book value Restricted type Restricted case
Fixed assets 119,067,064.30 101,156,162.87 Mortgage for loan
Intangible assets 9,929,529.00 4,795,207.52 Mortgage for loan
Construction in progress 330,769,336.43 330,769,336.43 Mortgage for loan
Total 459,765,929.73 436,720,706.82
54. Monetary items denominated in foreign currency
(1) Monetary items denominated in foreign currency
Item Balance in foreign Exchange rate Balance translated into
currency as at RMB as at 31/12/2023
31/12/2023
Monetary funds 101,043,692.79
Among: USD 10,854,072.77 7.0827 76,876,141.20
EUR 43,262.01 7.8592 340,004.76
GHS 5,270,842.14 0.6082 3,205,726.19
FCFA 264,017.50 0.0120 3,168.21
JPY 410,730,128.09 0.0502 20,618,652.43
Accounts receivable 40,008,624.14
Among：USD 4,396,759.46 7.0827 31,140,928.26
GHS 2,839,386.12 0.6082 1,726,914.64
JPY 118,412,147.81 0.0502 5,944,289.82
FCFA 99,707,618.33 0.0120 1,196,491.42
Other receivables 1,943,438.58
Among：USD 232,310.70 7.0827 1,645,387.01
GHS 487,741.61 0.6082 296,644.45
FCFA 117,260.00 0.0120 1,407.12
Accounts payable 43,066,495.60
Among：USD 5,074,239.03 7.0827 35,939,312.79
EUR 234.43 7.8592 1,842.43
GHS 35.99 0.6082 21.89
JPY 133,131,977.69 0.0502 6,683,225.28
FCFA 36,841,100.83 0.0120 442,093.21
Other payables 1,768,327.90
Among：USD 245,189.17 7.0827 1,736,601.30
GHS 52,164.75 0.6082 31,726.60
(2) Reporting currencies of significant foreign operating entities
Significant foreign operating entity Overseas location of Reporting currency Basis for
primary operation determination
HABITAT INTERNATIONAL CORPORATION The Republic of Panama USD Business
environment
LAIF FISHERIES COMPANY LIMITED The Republic of Ghana USD Business
environment
YAW ADDO FISHERIES COMPANY LIMITED The Republic of Ghana USD Business
environment
ZHONG GHA FOODS COMPANY LIMITED The Republic of Ghana USD Business
146
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environment
AFRICA STAR FISHERIES LIMITED The Republic of Ghana USD Business
environment
55. Lease
(1) The company as lessee
The total cash outflow related to the lease was 195,000.00 yuan.
(2) Our company acts as lessor
Operating lease
Item Lease income Among them: Income related to
variable lease payments not included in
lease collections
Rental income 4,971,218.09
Vessel charter income 133,990,730.81
total 138,961,948.90
Ⅶ. Research and development expenses
List by property
Item Year ended 31/12/2023 Year ended 31/12/2022
Employee compensation 1,271,827.17 2,286,319.66
Materials 892,761.14 246,207.46
Depreciation cost 507,920.78 160,974.73
Commissioned external research and development Expenses - 300,000.00
Other 604,057.96 400,587.40
Total 3,276,567.05 3,394,089.25
Includes: Expensed research and development expenditures 3,276,567.05 3,394,089.25
Ⅷ. Changes in consolidation scope
There are no consolidation scope changes in the current period.
Ⅸ. Interest in other entities
1 .Interest in subsidiaries
(1) Composition of the Company
Subsidiary name Principal Registered capital Place of Business nature Shareholding ratio（%） Acquisition mode
place of registration
operation direct indirect
Shandong Zhonglu aquatic shipping Co., LTD Qingdao, 2,250.56 Ten Qingdao, Boat charter 100 Investment and
Shandong thousand RMB Shandong Province establishment
Province
Shandong Zhonglu Yuanyang (Yantai) Food Co., Yantai, 10,432.23 Ten Yantai, Shandong Food processing 46.69 25.77 Investment and
LTD. (hereinafter referred to as "Zhonglu Food") Shandong thousand RMB and refrigeration establishment
Province
Shandong Zhonglu Haiyan Ocean Fishing Co., Qingdao, 22,161.73 Ten Qingdao, Pelagic fishing 59.05 Investment and
LTD. (referred to as "Zhonglu Haiyan Zi") Shandong thousand RMB Shandong Province establishment
Province
Zhonglu Yuanyang (Qingdao) Industrial Qingdao, 19,200 Ten Qingdao, Food processing 66.63 33.37 Investment and
147
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Subsidiary name Principal Registered capital Place of Business nature Shareholding ratio（%） Acquisition mode
place of registration
operation direct indirect
Investment Development Co., LTD Shandong thousand RMB Shandong Province and refrigeration establishment
Province
HABITAT INTERNATIONAL Panama 150.74 Ten Panama Boat charter 100 Investment and
CORPORATION thousand USD establishment
LAIF FISHERIES COMPANY LIMITED Ghana 40 Ten thousand Ghana Pelagic fishing Zhonglu Hai Investment and
USD Yanzi holding establishment
100.00
AFRICA STAR FISHERIES LIMITED Ghana 40 Ten thousand Ghana Pelagic fishing Zhonglu Hai Investment and
USD Yanzi holding establishment
100.00
ZHONG GHA FOODS COMPANY Ghana 50 Ten thousand Ghana Pelagic fishing Zhonglu Hai Investment and
LIMITED USD Yanzi holding establishment
100.00
Shandong Zhonglu Ocean cold storage Co., LTD Yantai, 1,500 Ten Yantai, Shandong Warehousing Zhonglu Food Investment and
Shandong thousand RMB Province service holdings 100.00 establishment
Province
YAW ADDO FISHERIES COMPANY Ghana Ghana Pelagic fishing Operating lease
LIMITED
(2) Significant non-wholly owned subsidiary
Company name Minority Profit or loss Dividends Balance of the
shareholding attributable to the announced to minority interests as
minority for the distribute to the at 31/12/2023
current period minority
Shandong Zhonglu Haiyan Oceanic Fisheries Co., Ltd. 40.95% -3,188,974.58 165,040,675.17
Shandong Zhonglu Oceanic (Yantai) Food Co., Ltd. 27.54% 4,999,799.20 1,616,659.01 96,926,494.42
Total 1,810,824.62 1,616,659.01 261,967,169.59
(3) Main financial information of significant non-wholly owned subsidiary
Subsidiary name Ending Balance
Current assets Non-current assets Total assets Current liabilities Non-current Total liabilities
liabilities
Shandong Zhonglu 341,079,219.81 229,508,215.78 570,587,435.59 162,226,751.21 5,330,952.59 167,557,703.80
Haiyan Oceanic
Fisheries Co., Ltd.
Shandong Zhonglu 399,572,629.62 120,957,353.11 520,529,982.73 159,229,067.01 9,352,860.46 168,581,927.47
Oceanic (Yantai)
Food Co., Ltd.
Total 740,651,849.43 350,465,568.89 1,091,117,418.32 321,455,818.22 14,683,813.05 336,139,631.27
(Continued)
Subsidiary name Initial Balance
Current assets Non-current assets Total assets Current liabilities Non-current Total liabilities
liabilities
Shandong Zhonglu 284,746,514.95 228,527,101.55 513,273,616.50 98,801,188.48 5,546,206.63 104,347,395.11
Haiyan Oceanic
148
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Fisheries Co., Ltd.
Shandong Zhonglu 349,063,247.82 126,955,026.31 476,018,274.13 125,790,070.11 10,564,608.40 136,354,678.51
Oceanic (Yantai)
Food Co., Ltd
Total 633,809,762.77 355,482,127.86 989,291,890.63 224,591,258.59 16,110,815.03 240,702,073.62
(Continued)
Subsidiary name Year ended 31/12/2023
Operating income Net profit Total Cash flows from
comprehensive operating activities
income
Shandong Zhonglu Haiyan Oceanic Fisheries Co., Ltd. 310,869,569.04 -7,787,483.70 -5,896,489.60 -48,352,787.31
Shandong Zhonglu Oceanic (Yantai) Food Co., Ltd 484,598,351.95 18,154,681.19 18,154,681.19 11,111,932.51
Total 795,467,920.99 10,367,197.49 12,258,191.59 -37,240,854.80
(Continued)
Subsidiary name Year ended 31/12/2022
Operating income Net profit Total Cash flows from
comprehensive operating activities
income
Shandong Zhonglu Haiyan Oceanic Fisheries Co., Ltd. 274,187,930.05 8,062,035.30 13,361,583.32 -34,928,144.20
Shandong Zhonglu Oceanic (Yantai) Food Co., Ltd 530,394,523.46 18,549,849.33 18,549,849.33 2,792,648.54
Total 804,582,453.51 26,611,884.63 31,911,432.65 -32,135,495.66
2. Interests in joint venture arrangements or joint ventures
Summary financial information of non-material joint ventures and associates
Item Ending Balance / Year ended Initial Balance / Year ended 31/12/2022
31/12/2023
Associated enterprise：
Jinan Qini Food Technology Co., LTD 1,414,031.32 1,983,923.48
Total 1,414,031.32 1,983,923.48
The sum of the following items in proportion to shareholding -569,892.16 -398,421.52
Among them: Net profit -569,892.16 -398,421.52
Other comprehensive income
Total comprehensive income -569,892.16 -398,421.52
① The basis for holding less than 20% of the voting rights with a significant impact, or holding 20% or more of the voting
rights with no significant impact.
The subsidiary of the Company, Shandong Zhonglu Oceanic (Yantai) Food Co., Ltd., holds 15.00% of Jinan Qinzhen Food
Technology Co., Ltd., and appoints directors, which has a significant impact on its production and operation.
Ⅹ. Government subsidy
1. Liabilities involving government subsidies
149
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Financial statement As at New in the Current account Amount Other in the As at And assets
item 31/12/2022 current period Amount of non- transferred to current period 31/12/2023 / revenue
Amount of operating income other income in alteration correlation
subsidy the current
period
Deferred income 13,500,315.67 40,000,000.00 - 1,519,346.94 - 51,980,968.73 asset-related
2. Government grants recognised in profit or loss for the current period
Item Amount due in 2023 Amount due in 2022
Other income 53,015,796.75 47,600,255.85
Total 53,015,796.75 47,600,255.85
XI. Related risks of financial instruments
1. The risk of the financial instruments
The main financial instruments of the Company include receivables, other receivables, payables and other payables, etc. For
details of various financial instruments, see six relevant items in this Note. The goal of the company engaged in risk management
is to achieve an appropriate balance between risk and income, reduce the negative impact of risk on the company's business
performance to a minimum level, and maximize the interests of shareholders and other equity investors. Based on this risk
management objective, the basic strategy of the company's risk management is to determine and analyze various risks faced by
the company, establish appropriate risk tolerance bottom line and conduct risk management, and timely and reliably supervise
various risks, and control the risks within a limited range.
(1) Credit risk
If the financial instrument or the other party involved in the financial loss caused to the Company, it is a credit risk. Credit risk
mainly comes from customer payment receivable. The carrying value of accounts receivable and notes receivable and other
receivables is the maximum credit risk of the Company for financial assets.
(2) Market risk
The market risk of financial instruments refers to the risk that the fair value of financial instruments or the future cash flow
fluctuates due to the market price changes, including the exchange rate risk, interest rate risk and other price risks.
The Company uses sensitivity analysis technology to analyze the possible impact of reasonable and possible changes of market
risk-related variables on the current profit and loss or shareholders' equity. Since any risk variable rarely changes in isolation and
the correlation between variables will have a significant effect on the final amount of impact of a change in a risk variable, the
following is made assuming that the change of each variable is independent.
① Exchange rate risk
Exchange rate risk refers to the risk that the fair value of financial instruments or the future cash flow fluctuates due to changes
in the foreign exchange rate. The foreign exchange risks faced by the Company mainly come from the financial assets
denominated in US dollars, and the amount of foreign currency financial assets converted into RMB is listed as described in
item Ⅵ and 54 foreign currency monetary items.
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② Interest rate risk
Interest rate risk refers to the risk that the fair value of financial instruments or the future cash flow fluctuates due to changes in
the market interest rate. The interest rate risks faced by the Company mainly come from long-term bank loans. The company's
loans are floating interest rate, and there is the risk of change in the RMB benchmark interest rate.
(3) Liquidity risk
Liquidity risk is the risk that the Company meets its obligations related to financial liabilities. Under the case of normal and tight
funds, the Company ensures that there is sufficient liquidity to fulfill the maturing debts, and conducts financing consultations
with financial institutions to maintain a certain level of standby credit line to reduce liquidity risk.
2. Transfer of financial assets
(1) Classification of transfer mode
Tranfer system The nature of the Amount of financial Termination of T Judgment basis
transferred financial assets transferred recognition situation for the termination
assets of the recognition
Discount on notes Banker's acceptance 10,000,000.00 Fully terminated the Banker's acceptance
bill recognition bill with high credit
rating
total 10,000,000.00
(2) Financial assets terminated from recognition due to the transfer
Item The method of The amount of Gains or losses
transferring financial assets associated with the
financial assetd whose recognition termination of
has been terminated recognition
Bill receivable Discount on notes 10,000,000.00 -79,486.61
Total 10,000,000.00 -79,486.61
XII. Related parties and transactions
1. The parent company of the Company
Name of parent Registered Nature of business Registration The shareholding ratio The proportion of the
company Address capital of the parent company voting rights of the parent
in the Company company
Shandong State- Shandong Jinan Investment and management, asset 4.5 billion 47.25% 47.25%
owned assets management and capital operation,
investment Co. Ltd entrustment management, investment
consulting
Note: State-owned Assets Supervision and Administration Commission of Shandong Provincial People's Government is the
ultimate controller of the Company.
2. Subsidiaries of the Company
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Details of subsidiaries refer to Note Ⅷ Interest in other entities.
3. The Group's joint ventures and associates
Significant joint ventures or associates of the Group are detailed in Note Ⅸ.2。
Any other joint venture or joint venture that has a balance of related party transactions with the Group in the current period or
related party transactions with the Group in the previous period
The company situation is as follows:
Name of a joint venture or joint venture Relationship with the Group
Jinan Qini Food Technology Co., LTD Associated enterprise
4. Other related parties
Entity name Relationship
Inspur General Software LTD Controlled by the same parent company
Dezhou Bank Co., LTD Controlled by the same parent company
Zhongtai Xincheng Asset Management Co., LTD Controlled by the same parent company
5. Transactions with related parties
(1) List of goods sold/services provided
Item Related party transaction Current amount Amount incurred in
content the previous period
Ji Nan Qin Zhen Food Technology Co., Ltd. Tuna product 108,554.52 212,715.94
Shandong State-owned Assets Investment Holding Co., Ltd. Entrusted management 1,698,113.20 1,273,584.91
fee
Total 1,806,667.72 1,486,300.85
(2) Associated entrusted management/contracting and entrusted management/contracting
Entrusted management/contracting information of the company
Name of client Name of trustee Types of entrusted Commencement Trustee termination Custodial income Current recognized
assets date date pricing basis Escrow income
Shandong State- Shandong Zhonglu Stock right 2022/4/14 Contract agreement 1,698,113.20
owned Assets ocean fishing Co.,
Investment Holding LTD
Co., LTD
(3) Related lease situation
We are the lessee
Name of lessor Types of Rent paid Interest expense incurred on Increased access to assets
leasehold assets lease liabilities
Current period Previous period Current period Previous Current period Previous
accrual accrual accrual period accrual period
accrual accrual
Zhongtai Xincheng tenement 195,000.00 195,000.00 8,128.89 381,871.11
Asset Management
Co., LTD
(4) Key management compensation
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Item Current amount Amount incurred in the previous period
Key management compensation 4,058,866.00 2,854,957.00
(5) Other related transactions
Item Affiliated party Current amount Amount incurred in
the previous period
Deposit interest income Dezhou Bank Co. LTD 3,873.13 2,542.64
(6)R eceivables due from and payables due to related parties
①Accounts receivable
Item Related party Ending Balance Initial Balance
Balance Allowance for credit Balance Allowance for credit
losses losses
Accounts receivable Jinan Qini Food Technology Co., 68,244.40 5,248.42 75,268.40 3,763.42
LTD
Other receivables Zhongtai Xincheng Asset 20,000.00 20,000.00 20,000.00 20,000.00
Management Co., LTD
Other receivables Shandong State-owned Assets 1,800,000.00 90,000.00 1,350,000.00 67,500.00
Investment Holding Co., LTD
② Payable items
Item Related party Ending Balance Initial Balance
Balance Allowance for credit Balance Allowance for credit losses
losses
Dividends receivable Zhongtai Xincheng Asset 1,616,659.01
Management Co., LTD
ⅩⅢ. Commitments and contingencies
1. Commitments
None.
2. Contingencies
None.
XIV. Post balance sheet events
1. Significant non-adjustment events after balance sheet date
None.
2. Distribution of profit
None.
XV. Other significant events
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1. Pension scheme
According to relative laws, regulations and policies, the pension system of the company has been established to pay
supplementary endowment insurance for employees (namely enterprise annuity) on the basis of attending primary endowment
insurance lawfully. The company has set the operating efficiency coefficient in accordance with the actual operating conditions
every year, and calculated the total amount paid by the enterprise through it. In the enterprise pension, the borne expenses of
the company have been disclosed in the case of employee pay payable and the condition of the established escrow plan, and the
individual cost has been paid by the company from their salary. This year, the enterprise pension has been increased RMB 2.0745
million , relevant information shall be referred to "Attachment 6Ⅵ.22 employee pay payable".
2. Segment reporting
(1) Determination basis of segment reporting and related accounting policy
The company’s mainly business are oceanic fishing, aquatic products processing, vessels leasing and others. The company
disclosure the branches reports by the character and plate of its main bussiness.
(2) Financial information of segment reporting
Item Oceanic fishing Vessels leasing Aquatic products Others Elimination between Total
processing and branches
refrigeration
Operating income 587,596,974.83 133,990,730.81 480,321,357.21 354,517.08 -67,957,483.87 1,134,306,096.06
Operating cost 524,746,569.37 98,561,814.99 443,980,508.64 252,737.95 -71,470,582.84 996,071,048.11
Credit impairment -503,147.59 -24,869.12 431,829.62 -28,182.35 - -124,369.44
losses
Impairment of assets -60,007,929.18 - -7,550,257.78 -2,555.69 - -67,560,742.65
Depreciation and 46,925,457.26 15,722,191.04 7,340,300.97 4,292,545.28 - 74,280,494.55
amortization
Profit before tax 20,406,057.97 27,683,468.65 21,520,437.69 -23,759,561.88 -1,025,773.38 44,824,629.05
Income tax expenses - 210,157.97 3,204,320.85 - - 3,414,478.82
Net profit 20,406,057.97 27,473,310.68 18,316,116.84 -23,759,561.88 -1,025,773.38 41,410,150.23
Total assets 1,222,019,933.78 347,067,805.46 681,769,162.72 591,420,336.95 -794,142,171.13 2,048,135,067.78
Total liabilities 286,672,176.87 94,753,494.98 169,709,521.89 596,520,435.40 -391,087,014.17 756,568,614.97
XVI. Notes to major items in the parent company's financial statements
1. Accounts receivable
(1 )Aging disclosure
Aging Ending book balance Opening book balance
Within 6 months 4,535,849.02 438,889.50
6 months-1 years -
1-2 years
2-3 years
More than 3 years 5,689,018.01 5,689,018.01
Total 10,224,867.03 6,127,907.51
(2) Accounts receivable by provision method for allowance credit losses
Item Ending Balance
Balance PCT Allowance for credit PCT Carrying amount
losses
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Item Ending Balance
Balance PCT Allowance for credit PCT Carrying amount
losses
Individually assessment subject to - - - - -
allowance for credit losses
Grouping assessment subject to 10,224,867.03 100.00% 5,789,294.85 56.62% 4,435,572.18
allowance for credit losses
Group 1: Non-affiliated party 7,694,555.03 75.25% 5,789,294.85 75.24% 1,905,260.18
customer portfolio
Group 2: Combination of related 2,530,312.00 24.75% 2,530,312.00
parties
Total 10,224,867.03 100.00% 5,789,294.85 56.62% 4,435,572.18
(Continued)
Item Initial Balance
Balance PCT Allowance for credit PCT Carrying amount
losses
Individually assessment subject to - - - - -
allowance for credit losses
Grouping assessment subject to 6,127,907.51 100.00% 5,710,962.49 93.20% 416,945.02
allowance for credit losses
Group 1: Non-affiliated party 6,127,907.51 100.00% 5,710,962.49 93.20% 416,945.02
customer portfolio
Group 2: Combination of related
parties
Total 6,127,907.51 100.00% 5,710,962.49 93.20% 416,945.02
Group 1: Accounts receivable due from non-affiliated party customer portfolio:
Aging Ending Balance
Balance Allowance for credit PCT
losses
Within 6 months 2,005,537.02 100,276.84 5.00%
6 months-1 years -
1-2 years -
2-3 years -
More than 3 years 5,689,018.01 5,689,018.01 100.00%
Total 7,694,555.03 5,789,294.85
(Continued)
Aging Initial Balance
Balance Allowance for credit PCT
losses
Within 6 months 438,889.50 21,944.48 5.00%
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Aging Initial Balance
Balance Allowance for credit PCT
losses
6 months-1 years -
1-2 years -
2-3 years -
More than 3 years 5,689,018.01 5,689,018.01 100.00%
Total 6,127,907.51 5,710,962.49
Group 2: Combine related party combinations
Item Ending Balance
Book balance Bad debt reserve Provision ratio Reason for
provision
Combine related party combinations 2,530,312.00
Total 2,530,312.00
(3) Allowance for credit losses
Item Initial Balance Amount of change in the current period Ending Balance
Provision Recovery or reversal Write off Others
Accounts 5,710,962.49 78,332.36 5,789,294.85
receivable
Total 5,710,962.49 78,332.36 - - - 5,789,294.85
(4) Account receivables and contractual assets in the top five closing balances collected by defaulter
Name of the company Ending balance of Ending balance of Ending balance of Proportion of the Ending balance of
accounts receivable contract assets accounts receivable total amount allowance for
and contract assets doubtful accounts
A 2,530,312.00 2,530,312.00 24.75% 126,515.60
B 725,340.87 725,340.87 7.09% 72,534.09
C 497,843.00 497,843.00 4.87% 49,784.30
D 390,999.00 390,999.00 3.82% 39,099.90
E 170,036.27 170,036.27 1.66% 17,003.63
Total 4,314,531.14 4,314,531.14 42.19% 304,937.52
2. Other receivables
Item Ending Balance Initial Balance
Interest receivable
Dividends receivable 79,137,061.83 79,137,061.83
Other receivables 119,544,209.72 45,696,117.30
Total 198,681,271.55 124,833,179.13
(1) Dividends receivable
① Classification and disclosure of dividends receivable
Item Ending Balance Initial Balance
Subsidiary dividend 79,137,061.83 79,137,061.83
Less: Allowance for credit losses
Total 79,137,061.83 79,137,061.83
156
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② Significant dividends receivable older than 1 year
Investee Ending Balance Aging Reasons for not Whether the
recovering impairment
occurred and the
basis of judgment
HABITAT INTERNATIONAL CORPORATION 79,137,061.83 1-3 years or more Ensure the funds The subsidiary is
needed for the operating well and
production and no impairment has
operation of the occurred
subsidiary
Total 79,137,061.83
(2) Other receivables
① Aging analysis of other receivables
Aging Ending book balance Opening book balance
Within 6 months 82,086,147.46 32,810,640.91
6 months-1 years 3,918,721.07 87,549.95
1-2 years 23,973,733.23 3,192,920.91
2-3 years 1,516,080.33 2,445,424.82
More than 3 years 11,750,263.11 10,760,326.81
Total 123,244,945.20 49,296,863.40
② Category of other receivables by nature
Nature Ending book balance Opening book balance
Intra-company transaction 116,125,779.70 43,971,159.92
Imprest funds and others 7,119,165.50 5,325,703.48
Total 123,244,945.20 49,296,863.40
③ Classified disclosure according to bad debt provision method
category Ending Balance
Book balance scale Bad debt reserve Provision ratio Book value
Provision for bad debts on an individual
basis
Provision for bad debts on a portfolio 123,244,945.20 100.00% 3,700,735.48 3.00% 119,544,209.72
basis
Including：Aging portfolio 7,119,165.50 5.78% 3,700,735.48 51.98% 3,418,430.02
Combine related party combinations 116,125,779.70 94.22% 116,125,779.70
Total 123,244,945.20 100.00% 3,700,735.48 3.00% 119,544,209.72
(continue)
Item Initial Balance
Book balance scale Bad debt reserve Provision ratio Book value
Provision for bad debts on an individual
basis
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Item Initial Balance
Book balance scale Bad debt reserve Provision ratio Book value
Provision for bad debts on a portfolio 49,296,863.40 100.00% 3,600,746.10 7.30% 45,696,117.30
basis
Including：Aging portfolio 5,325,703.48 10.80% 3,600,746.10 67.61% 1,724,957.38
Combine related party combinations 43,971,159.92 89.20% 43,971,159.92
Total 49,296,863.40 100.00% 3,600,746.10 7.30% 45,696,117.30
1) Provision for bad debts on a portfolio basis
Combined itemization：Aging portfolio
name Ending Balance
Book balance Bad debt reserve Provision ratio
0-6 months 3,279,713.83 163,985.69 5.00%
6 months. - 1 year 191,731.09 19,173.11 10.00%
1 to 2 years 148,700.61 44,610.18 30.00%
2 to3 years 52,106.95 26,053.48 50.00%
More than 3 years 3,446,913.02 3,446,913.02 100.00%
Total 7,119,165.50 3,700,735.48
（continue）
name Initial Balance
Book balance Bad debt reserve Provision ratio
0-6 months 1,659,480.87 82,974.05 5.00%
6 months. - 1 year 86,849.95 8,685.00 10.00%
1 to 2 years 83,123.86 24,937.16 30.00%
2 to3 years 24,197.81 12,098.91 50.00%
More than 3 years 3,472,050.99 3,472,050.98 100.00%
Total 5,325,703.48 3,600,746.10
④ The provision of allowance for credit losses
The allowance for credit losses Stage one Stage two Stage three Total
12-month ECL Lifetime ECL (credit Lifetime ECL
-unimpaired) (credit-impaired)
Beginning balance 128,695.12 - 3,472,050.98 3,600,746.10
Revaluation of beginning balance
Provision 126,347.50 -25,137.96 101,209.54
Reversal -
Charge off 1,220.16 1,220.16
Write-off
Other changes -
Ending balance 253,822.46 3,446,913.02 3,700,735.48
⑤ Other receivables due from the top five debtors are as follows:
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Name of the unit Nature of Ending Balance Aging As a percentage of Ending balance of
payment the total amount allowance for credit
losses
A Current account 38,985,833.68 0-3 years or more 31.63% -
B Current account 32,945,605.78 0-3 years or more 26.73% -
C Current account 17,498,884.64 0-3 years or more 14.20% -
D Current account 11,673,277.08 1-3 years or more 9.47% -
E Current account 9,382,699.25 Within 6 months 7.61%
Total 110,486,300.43 89.64%
3.Long-term equity investments
Item Ending Balance Initial Balance
Balance Provision Carrying amount Balance Provision Carrying amount
for impairment for impairment
Investment to 328,189,455.23 328,189,455.23 328,189,455.23 328,189,455.23
subsidiaries
Total 328,189,455.23 - 328,189,455.23 328,189,455.23 - 328,189,455.23
Investment to subsidiaries
Investee Initial Balance Additions Reductions Ending Balance
HABITAT INTERNATIONAL CORP. 12,476,145.60 - - 12,476,145.60
Shandong Zhonglu Oceanic Fisheries 22,869,513.38 - - 22,869,513.38
Transportation Co., Ltd.
Shandong Zhonglu Oceanic (Yantai) Food 55,448,185.24 - - 55,448,185.24
Co., Ltd.
Shandong zhonglu Haiyan Oceanic 141,395,611.01 - - 141,395,611.01
Fisheries Co., Ltd.
Zhonglu Ocean (Qingdao) Industrial 96,000,000.00 - - 96,000,000.00
Investment Development Co., Ltd.
Total 328,189,455.23 - - 328,189,455.23
4. Operating income and operating costs
(1) Operating income and operating costs
Item Year ended 31/12/2023 Year ended 31/12/2022
Income Cost Income Cost
Primary operating business 280,607,010.37 230,942,276.67 127,389,726.24 102,711,351.76
Other operating business 6,669,331.29 1,890,947.33 5,912,273.40 1,952,483.99
Total 287,276,341.66 232,833,224.00 133,301,999.64 104,663,835.75
(2) The income generated by the contract
159
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① Current operating income is classified according to the time of revenue recognition
Classification of Product sales revenue Other business income total
contract Operating income Operating cost Operating income Operating cost Operating income Operating cost
Confirm at a 280,607,010.37 230,942,276.67 280,607,010.37 230,942,276.67
certain point
Confirm within a 1,698,113.20 1,698,113.20
certain period of
time
Total 280,607,010.37 230,942,276.67 1,698,113.20 282,305,123.57 230,942,276.67
② Income from applicable lease criteria
Item Rent Rental and others Total
Operating income Operating cost Operating income Operating cost
Income from main business
Other business income 4,281,820.01 1,878,426.05 4,281,820.01 1,878,426.05
Total 4,281,820.01 1,878,426.05 4,281,820.01 1,878,426.05
5. Investment income
Item Year ended Year ended
31/12/2023 31/12/2022
Gain/(Loss) from long-term equity investments in cost method 4,253,562.54 8,500,000.00
Gain/(Loss) on financial assets held for trading for the current period 1,076,034.24
Bill discounting expenses -37,825.17
Total 4,215,737.37 9,576,034.24
XVII. Supplementary information
1. Details of non-recurring gain or loss for the year
Item Amount Remark
Disposal of profits and losses of non-current assets, including the offset part of the asset impairment -84,285.00 -
provisions
The government subsidies included in the current profit and loss, except the government subsidies that are 3,914,296.75 -
closely related to the normal operation of the company, conform to the national policies and regulations,
are enjoyed according to the determined standards, and have a sustained impact on the company's profit
and loss
In addition to the effective hedging business related to the normal operation of the Company, the gains -79,486.61 -
and losses arising from the fair value changes caused by the holding of financial assets and financial
liabilities and the gains and losses generated by the disposal of financial assets and financial liabilities
Custodian fee income obtained from the entrusted operation 1,698,113.20 -
Other non-operating income and expenses other than the above items 1,583,319.90 -
Deduct: Income tax impact 286,560.82 -
The impact of minority shareholders' equity 1,285,560.98 -
Total 5,459,836.44 -
Note: According to the Notice of the General Office of the Ministry of Agriculture and Rural Affairs and the General Office of
the Ministry of Finance on the Implementation of Fishery Development Subsidy Policy in 2021 (Agricultural Finance (2021)
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No.24) and the Notice of the Ministry of Agriculture and Rural Affairs and the Ministry of Finance on the Implementation of
Agricultural Production Development in 2022 (Agricultural Finance (2022) No.13), This year, the company has obtained the
national subsidy fund for international performance capacity improvement 49, 101, five hundred yuan, Because the subsidy is
closely related to the performance score of enterprises and the operation time of fishing vessels, The subsidy funds are based on
the performance score and the operation time of fishing vessels, Calculate and confirm according to the standards of relevant
national and provincial departments. Therefore, it is not listed as a non-recurring profit and loss.
2. Return on equity and earnings per share
Profit in report period Weighted average return on Earnings per share
equity Basic earnings per Diluted earnings per
share share
Net profit attributable to the common share holders 3.93 0.15 0.15
Net profit attributable to the common shareholders after deducting non- 3.39 0.13 0.13
recurring gain or loss items
161
