山东省中鲁远洋渔业股份有限公司 2017 年半年度报告全文 Shandong Zhonglu Oceanic Fisheries Co., Ltd. Semi-Annual Report for Year of 2017 August 2017 1 山东省中鲁远洋渔业股份有限公司 2017 年半年度报告全文 Section I. Important Notice, Contents and Paraphrase Board of Directors, Supervisory Committee, all directors, supervisors and senior executives of Shandong Zhonglu Oceanic Fisheries Co., Ltd. (hereinafter referred to as the Company) hereby confirm that there are no any fictitious statements, misleading statements, or important omissions carried in this report, and shall take all responsibilities, individual and/or joint, for the reality, accuracy and completion of the whole contents. Chi Weizhen, Principal of the Company, Yue Juan, person in charge of accounting works and Lei Lixin, person in charge of accounting organ (accounting principal) hereby confirm that the Financial Report of Semi- Annual Report 2017 is authentic, accurate and complete. All directors are attended the Board Meeting for report deliberation. China Securities Journal, Hong Kong Commercial Daily and Juchao Website (www.cninfo.com.cn) are the media for information disclosure appointed by the Company, all information under the name of the Company disclosed on the above said media shall prevail, and Investors are advised to exercise caution of investment risks. The Company has no plans of cash dividend distributed, no bonus shares and has no share converted from capital reserve either 2 山东省中鲁远洋渔业股份有限公司 2017 年半年度报告全文 Contents Semi-annual Report 2017 .................................................................................................................. 1 Section I Important Notice and Paraphrase .................................................................................. 2 Section II Company Profile and Main Finnaical Indexes .............................................................. 5 Section III Summary of Company Business .................................................................................... 8 Section IV Discussion and Analysis of Business ............................................................................ 11 Section V Important Events ............................................................................................................ 19 Section VI Changes in shares and particular about shareholders……………………………...24 Section VII Preferred Stock ............................................................................................................ 29 Section VIII Particulars about Directors, Supervisors and Senior Executives .......................... 30 Section IX Corporate Bond ............................................................................................................. 32 Section X Financial Report ............................................................................................................. 32 Section XI Documents available for reference ............................................................................ 133 3 山东省中鲁远洋渔业股份有限公司 2017 年半年度报告全文 Paraphrase Items Refers to Contents “The Company” or “Company” Refers to Shandong Zhonglu Oceanic Fisheries Co., Ltd. "Shandong State-owned Assets Investment" Refers to Shandong State-owned Assets Investment Holding Company Limited "Luxin Group" Refers to Shandong Luxin Investment Holding Company Limited State-owned Assets Supervision and Administration Commission of "SASACP" Refers to Shandong Provincial Government “CSRC” Refers to China Securities Regulatory Commission “The report” Refers to Semi-Annual Report for 2017 compiled by the Company 4 山东省中鲁远洋渔业股份有限公司 2017 年半年度报告全文 Section II Company Profile and Main Finnaical Indexes I. Company profile Short form of the stock Zhonglu-B Stock code 200992 Stock exchange for listing Shenzhen Stock Exchange Name of the Company (in 山东省中鲁远洋渔业股份有限公司 Chinese) Short form of the Company 中鲁远洋 (in Chinese) Foreign name of the Company Shandong Zhonglu Oceanic Fisheries Company Limited (if applicable) Short form of foreign name of ZLYY the Company (if applicable) Legal representative Chi Weizhen II. Person/Way to contact Secretary of the Board Rep. of security affairs Name Li Ming Li Ying No.65 Haier Road, Laoshan District, No.65 Haier Road, Laoshan District, Contacts add. Qingdao, Shandong Province Qingdao, Shandong Province Tel. 0532-55717968 0532-55715968 Fax. 0532-55719258 0532-55719258 Email ZL000992@163.com ZL000992@163.com III. Others 1. Way of contact Whether registrations address, offices address and codes as well as website and email of the Company changed in reporting period or not √Applicable □ Not applicable Registration address No.29 Miapling Road, Laoshan District, Qingdao, Shandong Province Code of the registration address 266061 CMB Fortune Building, No. 65 Haier Road, Laoshan District, Qingdao, Office address Shandong Province 5 山东省中鲁远洋渔业股份有限公司 2017 年半年度报告全文 Code of the office address 266061 Website www.zofco.cn e-mail ZL000992@163.com Date for extraordinary notice inquiry on 2017-04-29 appointed website (if applicable) Index for extraordinary notice inquiry on www.cninfo.com.cn appointed website (if applicable) 2. Information disclosure and preparation place Whether information disclosure and preparation place changed in reporting period or not □ Applicable √ Not applicable The newspaper appointed for information disclosure, website for semi-annual report publish appointed by CSRC and preparation place for semi-annual report have no change in reporting period, found more details in Annual Report 2016. IV. Main accounting data and financial indexes Whether it has retroactive adjustment or re-statement on previous accounting data or not □Yes √ No Increase/decrease in this Current period Same period of last year report y-o-y Operating revenue (RMB) 440,178,091.75 407,890,793.78 7.92% Net profit attributable to shareholders of 32,001,590.86 11,560,370.58 176.82% the listed company(RMB) Net profit attributable to shareholders of the listed company after deducting 31,391,015.10 8,143,813.27 285.46% non-recurring gains and losses(RMB) Net cash flow arising from operating 17,876,156.54 16,233,581.58 10.12% activities(RMB) Basic earnings per share (RMB/Share) 0.12 0.04 200.00% Diluted earnings per share (RMB/Share) 0.12 0.04 200.00% Weighted average ROE 5.05% 2.02% 3.03% Increase/decrease in this End of current period End of last period report-end over that of last period-end Total assets (RMB) 1,006,752,497.95 835,239,699.07 20.53% Net assets attributable to shareholder of 650,018,587.56 617,662,263.72 5.24% listed company(RMB) 6 山东省中鲁远洋渔业股份有限公司 2017 年半年度报告全文 V. Difference of the accounting data under accounting rules in and out of China 1. Difference of the net profit and net assets disclosed in financial report, under both IAS (International Accounting Standards) and Chinese GAAP (Generally Accepted Accounting Principles) □ Applicable √ Not applicable The Company has no difference of the net profit and net assets disclosed in financial report, under both IAS (International Accounting Standards) and Chinese GAAP (Generally Accepted Accounting Principles) in reporting period 2. Difference of the net profit and net assets disclosed in financial report, under both foreign accounting rules and Chinese GAAP (Generally Accepted Accounting Principles) □ Applicable √ Not applicable The Company has no difference of the net profit and net assets disclosed in financial report, under both foreign accounting rules and Chinese GAAP (Generally Accepted Accounting Principles) in reporting period VI. Items and amounts of extraordinary profit (gains)/loss √Applicable □Not applicable In RMB Item Amount Note Gains/losses from the disposal of non-current asset (including the 262,376.43 Revenue from vehicles disposal write-off that accrued for impairment of assets) Governmental subsidy reckoned into current gains/losses (not including the subsidy enjoyed in quota or ration according to Subsidy for construction of the 433,402.16 national standards, which are closely relevant to enterprise’s Blue Economic Zone business) Other non-operating income and expenditure except for the -85,202.83 aforementioned items Total 610,575.76 -- Concerning the extraordinary profit (gain)/loss defined by Q&A Announcement No.1 on Information Disclosure for Companies Offering Their Securities to the Public --- Extraordinary Profit/loss, and the items defined as recurring profit (gain)/loss according to the lists of extraordinary profit (gain)/loss in Q&A Announcement No.1 on Information Disclosure for Companies Offering Their Securities to the Public --- Extraordinary Profit/loss, explain reasons □ Applicable √ Not applicable In reporting period, the Company has no particular about items defined as recurring profit (gain)/loss according to the lists of extraordinary profit (gain)/loss in Q&A Announcement No.1 on Information Disclosure for Companies Offering Their Securities to the Public --- Extraordinary Profit/loss 7 山东省中鲁远洋渔业股份有限公司 2017 年半年度报告全文 Section III Summary of Company Business I Main businesses of the company in the reporting period Whether the company needs to comply with the disclosure requirements of the particular industry No The Company is a comprehensive fishery enterprise integrated with ocean-going fishing, ocean refrigerated transport, and refrigeration, processing and trading of aquatic products, main business of the Company are as: 1. Ocean-going fishing During the reporting period, the company has owned a total of 22 vessels for ocean-going fishing, including 7 large-scale tuna seiners, 13 large ultra-low temperature tuna long liners, and 2 medium-sized trawlers, which have been respectively working in the Indian Ocean, and Ghana sea area in the Atlantic Ocean. During the reporting period, the pattern of world's tuna resources have been changing, some fishery resources decline sharply, the company has adhered to the principle of combining deploying and retracting, operated scientifically, deployed reasonably, and positively implemented offshore production based on the fishing characteristics and the actual situation of offshore production. 2. Refrigerated transport During the reporting period, the company had 7 ocean cold-storage boats for operation service and took various measures to complete the annual economic indicators. The first was to stand on the special refrigerated shipping market, conform to the market demands, expand the navigation area, increase the transport capacity, and strive to enhance the market share. The second was to strictly control the cost accounting, and ensure all expenses, especially the overwhelming expenses were under surveillance all the time. The third was to take account of the non-operating income, especially focus on the exchange rate trend of US dollar against RMB, so as to make foreign exchange settlement at the appropriate time. The fourth was to strengthen the risk management and control, and minimize the risk factors of uncertainties. The fifth was to increase the self-repair efforts to ships and achieve good results in both benefits and technology. 3. Refrigeration processing trade During the reporting period, the company’s refrigeration processing trade had a foothold on “two markets”, the first was to insist on internal absorption and external introduction, give full play to advantages of industrial clusters, resist the risks and face the market development together with fishing industry, strengthen efforts to the return shipping and deep processing of tuna, form a processing industry chain by centering on Zhonglu food, and give a real play to the distributing centre as the deep-processing of deep-sea fishing products and cold-chain logistics base in Shandong Province and the tuna trading center of China, and had far-reaching significance to refine and strengthen the tuna industry chain. The second was to focus on improving the automatic mechanization level of processing, strive to improve the automatic mechanization level of important processes and key processes in the production, which increased the production capacity, reduced the waste of raw materials, stabilized the product quality and reduced the operating costs. The third was to expand the processing business, and increase the 8 山东省中鲁远洋渔业股份有限公司 2017 年半年度报告全文 market development efforts. II. Major changes in main assets 1. Major changes in main assets Major assets Note of major changes Equity assets No major change. Fixed assets No major change. Intangible assets No major change. Increased 148,802,700 Yuan over that of period-begin, with 3558.78% up. Mainly Construction in progress because subsidiary(Zhonglu Haiyan Branch) purchased five tuna seines in the period, the vessels are in handling procedures without transferred to assets yet 2. Main overseas assets √Applicable □Not applicable Control Ratio of the Whether has measures to overseas major Operating Earnings Content Reasons Assets scale Location ensure the assets in net impairment mode status safety of assets of the risks or not assets Company (Y/N) HABITAT INTERNATI Vessels and Wholly-owne 201,546,332. Independent 9,511,909.83 ONAL Panama crew 31.00% N d subsidiary 32 Yuan operation Yuan CORPORATI insurance ON III. Core competitive-ness analysis Whether or not the Company complies with disclosure requirement of the special industry No As a comprehensive fishery enterprise, the company's core competitiveness is mainly reflected in the following aspects: Firstly, the company is a comprehensive fishery enterprise integrating deep-sea fishing, refrigerated transport, and refrigeration and processing and trading of aquatic products, its main business involves all key links of industry chain, and the businesses among all operating entities are highly related, possess the conditions for overall collaborative operation, and provides guarantee for strengthening and extending the industrial chain strategy; secondly, as one of the enterprises engaged in deep-sea fishing business at the earliest in China, the company starts the production and operation early with high starting point, and high-quality talents and assets. After more than ten years of professional management, we have a professional talent echelon and favorable 9 山东省中鲁远洋渔业股份有限公司 2017 年半年度报告全文 operation management team, in aspect of vary field of the business in the Company. For both vessel numbers, gross tonnage and profitability of current refrigerated transport fleet, the Company occupies the national leading level. We owns biggest super-low temperature cold storage and raw food processing factory in China. The advantage of tuna processing and trading ability are being strengthen by the Tuna Trading Center and new Tuna E-Trading Platform System; and the 30000 tons variable-temperature cold storage and supporting facilities in Yantai tide refrigerated logistic center adopted many new technology, initiate cold storage establishment in China, and it lay out a foundation of the indusrial development of on-land business for the Company in future; Thirdly, deep-sea fishing, as the company's main business, is a constituent part of China’s ocean strategy and the blue economic zone plan of Shandong Province to which the central government and governments at all levels pay high attention, and policy advantages are the important strategic resource for an enterprise’s development and expansion. Our country implements a number of preferential policies for the development of deep-sea fishing for a long term. In May 2017, the company headquarters removed from Jinan to Qingdao, as the leading enterprise in deep-sea fishing industry of Shandong Province, and under the strong supports of various supportive policies of the national, provincial and municipal governments, the company will usher in new development opportunities; furthermore, Ghana purse seine project which belongs to the company’s subsidiary – Zhonglu Haiyan Company has purchased five large tuna purse-seine boats from overseas, plus the previous two seine boats, the purse seine tuna production will be greatly increased so as to promote the development of the company’s main business. The above mentioned factors were provided a powerful strategic support for the development of the Company; the Company will make good use of these strategic resources, creating innovative to accelerate the strategic transformation, and vigorously implement the industrial chain extension projects to upgrade the influence and completive in deep-sea fishing market in and out of China. 10 山东省中鲁远洋渔业股份有限公司 2017 年半年度报告全文 Section IV Discussion and Analysis of Business I. Introduction During the reporting period, the company faced the severe and complex economic environment, the changing market forms and the great pressure from the adjustment and development of the enterprise. The company closely focused on the goal of “promoting the rapid, harmonious and healthy development of enterprise”, closely stuck to the business positioning of “one body with two wings, integrative development”, insisted on the development ideas of taking the deep-sea fishing as the subject and the refrigerated transport and refrigerated processing trade as the wings, vigorously developed the deep-sea fishing business, consolidated and improved the refrigerated transport business, actively expanded the domestic and foreign processing business, and achieved good results. (i) Review of the company’s main business in the report period 1. Refrigerated transport leasing section: took "safety is efficiency, promote development by safety" as the long-term guiding ideology, avoided the occurrence of ship accident, guaranteed the ships’ navigation days, while increased the self repair of ships, which not only saved costs, but also built up, trained and improved the technical level of the company's professionals, achieved operating income of 50,007,800 Yuan, an increase of 11.63% on a year-on-year basis; achieved net profits of 11,830,500 Yuan, an increase of 35.48% on a year-on-year basis. 2. Ocean-going fishing section: as the company timely refurbished the two seines and realized the transitions from the Pacific to the Atlantic, it achieved net profits of RMB 3,424,100. By strengthening cost management, reasonably arranging the production and scientifically scheduling fishery, the Tuna long line fishing business achieved net profits of RMB 13,898,900, an increase of 1627.86% on a year-on-year basis. 3. Aquatic products refrigerated processing trade section: committed to the development of new products, increased the exports, overcame the unfavorable factors such as the shortage of supply of goods, rise in raw material prices and so on, during the reporting period, the company achieved operating income of RMB 344,245,500, an increase of 6.17% on a year-on-year basis, net profits of RMB 10,567,200, an increase of 2.97% on a year-on-year basis. (ii) General operation In first half of 2017 (Jan. –Jun.), the Company achieved operation revenue of 440.1781 million Yuan, increased 7.92% compared last year’s 407.8908 million Yuan; operation costs achieved 378.3674 million Yuan, decreased 1% over that of 382.1970 million Yuan in last period; net profit attributable to parent company amounted as 32.0016 million Yuan, an 176.82% growth over that of 11.5604 million Yuan at last year. II. Main business analysis See “I. Introduction” in “Discussion and Analysis of Business”. y-o-y change of main financial data In RMB 11 山东省中鲁远洋渔业股份有限公司 2017 年半年度报告全文 Current period Same period of last year Y-o-y increase/decrease Reasons for changes Operation revenue 440,178,091.75 407,890,793.78 7.92% Operation cost 378,367,434.21 382,196,992.60 -1.00% Sales business of purse Sales expenses 4,081,303.48 2,738,457.38 49.04% seiner increased Administrative expenses 16,193,699.81 14,381,558.82 12.60% The Company has major ratio of short-term loans Financial cost 6,517,713.00 -804,850.82 909.80% in the period, the net income from exchange declined sharply. Taxable profit from Income tax expense 453,724.36 264,529.60 71.52% Zhonglu Yantai (Food) Co., Ltd. increased The capital used for purchasing raw material Net cash flow arising 17,876,156.54 16,233,581.58 10.12% of the purse seiner are from operation activities major than the account collection in the period Purchased five purse Net cash flow arising seiner from Zhonglu from investment -153,617,939.11 -3,166,006.13 -4,752.10% Haiyan Company in the activities period Purchased five purse Net cash flow arising seiner vessels have 110,437,409.49 -8,804,287.01 1,354.36% from financing activities supporting entrusted loans financing Net increase of cash and More investment input in -26,636,709.82 7,344,317.84 -462.68% cash equivalent the period Major changes on profit composition or profit resources in reporting period □ Applicable √ Not applicable No major changes on profit composition or profit resources occurred in reporting period Constitution of main business In RMB Increase or Increase or Increase or decrease of decrease of decrease of gross Operating Operating cost Gross profit ratio operating revenue operating cost profit ratio over revenue over same period over same period same period of of last year of last year last year According to industries 12 山东省中鲁远洋渔业股份有限公司 2017 年半年度报告全文 Seine tuna fishing 28,960,517.15 22,165,361.29 23.46% 2,447.18% 343.48% 363.06% Long lines tuna 74,325,384.96 55,460,775.11 25.38% 93.33% 52.74% 19.83% fishing Boat rental 50,007,780.12 33,202,808.42 33.60% 11.63% -9.00% 15.05% Other deep-sea 3,527,909.01 4,491,479.15 -27.31% -37.76% -18.14% -30.52% fishing Refrigeration processing trade 342,272,267.26 325,597,261.33 4.87% 9.40% 9.24% 3.11% of the aquatic products According to products Seine tuna fishing 28,960,517.15 22,165,361.29 23.46% 2,447.18% 343.48% 363.06% Long lines tuna 74,325,384.96 55,460,775.11 25.38% 93.33% 52.74% 19.83% fishing Boat rental 50,007,780.12 33,202,808.42 33.60% 11.63% -9.00% 15.05% Other deep-sea 3,527,909.01 4,491,479.15 -27.31% -37.76% -18.14% -30.52% fishing Refrigeration processing trade 342,272,267.26 325,597,261.33 4.87% 9.40% 9.24% 3.11% of the aquatic products According to region Taiwan China 97,234,078.43 76,912,295.19 20.90% 84.51% 37.58% 12.00% Mainland China 190,335,025.22 164,240,856.00 13.71% 31.79% 17.83% 7.15% Garner 5,271,429.19 4,922,982.63 6.61% -7.00% -11.45% 3.40% Japan 159,098,228.43 150,685,110.15 5.29% 9.90% 7.13% 1.95% Thailand 8,674,022.26 6,006,710.80 30.75% Singapore 5,760,273.67 5,534,183.74 3.92% -11.08% -10.40% -0.60% South Korea 12,712,185.67 12,212,600.32 3.93% -71.26% -69.13% -1.19% Other 16,480,706.62 15,911,467.32 3.45% -64.94% -64.72% -0.13% III. Analysis of the non-main business □Applicable √Not applicable 13 山东省中鲁远洋渔业股份有限公司 2017 年半年度报告全文 IV. Assets and liability 1. Major changes of assets composition In RMB End of current period End of last period Ratio Ratio in total Ratio in total Notes of major changes Amount Amount changes assets assets 102,884,493.4 Monetary fund 10.22% 79,772,739.78 9.63% 0.59% 7 Account 41,823,925.36 4.15% 41,627,611.45 5.02% -0.87% receivable 211,862,695.2 Inventory 21.04% 204,322,596.29 24.65% -3.61% 4 Investment real 32,309,303.25 3.21% 32,947,724.94 3.98% -0.77% estate Long term equity 0.00% investment 399,550,767.0 Fixed assets 39.69% 414,357,638.71 50.00% -10.31% Accrual of the depreciation for assets 1 Construction in 152,869,726.8 The new purse seiner purchased in the 15.18% 9,928,188.11 1.20% 13.98% progress 1 period did not transfer to fix assets yet Short-term 168,666,366.6 More short-term loans from the bank in 16.75% 40,991,679.09 4.95% 11.80% borrowing 1 the period 2. Assets and liability measure by fair value □ Applicable √ Not applicable 3. Assets right restriction till end of reporting period Found more in 77 of the Note in consolidation statement V. Investment 1. Overall situation √Applicable □ Not applicable Amount invested (RMB) Last period’s amount (RMB) Changes 162,425,625.20 0.00 100.00% 14 山东省中鲁远洋渔业股份有限公司 2017 年半年度报告全文 2. The major equity investment obtained in Reporting Period □ Applicable √ Not applicable 3. The major non-equity investment doing in Reporting Period √Applicable □Not applicable In RMB Reasons Earning Whether Amount of fails Disclos s Disclos it is a Amount actual Estimat to the ure Investme Capital achieve ure date Investme fixed input in invested Progres ed estimate index Project nt resource d ended (if nt way assets the up to s earning d (if industry s as applica investme period period-e s earning applica period-e ble) nt (Y/N) nd s and ble) nd plans Accordi ng to the Short-ter general m loans http://w progres Purchased the Acquisiti 162,425, 162,425, from the 2016-12 ww.cni Y Fishery 98.75% 0.00 0.00 s of the tuna seine boat on 625.20 625.20 bank and -31 nfo.com Compa owned .cn ny, final fund paymen t still not paid 162,425, 162,425, Total -- -- -- -- -- 0.00 0.00 -- -- -- 625.20 625.20 4. Financial assets investment (1) Securities investment □ Applicable √ Not applicable The company had no securities investment in the reporting period. (2) Derivative investment □ Applicable √ Not applicable The company had no derivative investment in the reporting period. 15 山东省中鲁远洋渔业股份有限公司 2017 年半年度报告全文 VI. Sales of major assets and equity 1. Sales of major assets □ Applicable √ Not applicable The Company had no sales of major assets in the reporting period. 2. Sales of major equity □ Applicable √ Not applicable VII. Analysis of main holding company and stock-jointly companies √Applicable □Not applicable Particular about main subsidiaries and stock-jointly companies net profit over 10% In RMB Company Main Register Operating Operating Type Industry Total assets Net Assets Net profit name business capital revenue profit Shandong Zhonglu Processing Oceanic trade of 364,655,50 173,857,14 344,245,48 10,548,92 10,567,271.8 Subsidiary Fishery 75,593,300 (Yantai) aquatic 3.72 1.26 6.87 0.32 8 Food Co., products Ltd. Shandong Zhonglu Haiyan High sea 320,393,17 184,389,06 46,126,136. 7,552,899 Subsidiary Fishery 138,731,90 7,776,226.98 Oceanic fishing 5.03 5.81 87 .29 0.00 Fishery Co., Ltd. HABITAT Transport INTERNAT rental of the Transportati 201,546,33 194,294,65 32,462,659. 9,509,870 IONAL Subsidiary 12,476,145. 9,511,909.83 refrigeratio on 2.32 9.09 63 .67 CORPORA 60 n vessels TION Shandong Transport Zhonglu rental of the Transportati 22,505,600. 37,456,899. 4,199,339.7 17,545,120. 2,411,078 Fishery Subsidiary 2,318,577.62 refrigeratio on 00 10 9 49 .70 Shipping n vessels Co., Ltd. Particular about subsidiaries obtained or disposed in report period □ Applicable √ Not applicable 16 山东省中鲁远洋渔业股份有限公司 2017 年半年度报告全文 Notes of main holding company and stock-jointly companies VIII. Structured vehicle controlled by the Company □ Applicable √ Not applicable IX. Prediction of business performance from January – September 2017 Estimation on accumulative net profit from the beginning of the year to the end of next report period to be loss probably or the warning of its material change compared with the corresponding period of the last year and explanation on reason □ Applicable √ Not applicable X. Risks and countermeasures 1. Policy change risk It mainly includes changes in domestic and international fishery policies. The various national supportive policies to the deep-sea fishing may possibly be adjusted and have impacts on the company’s non-operating income; the risks of international fishery policies are mainly reflected when there is any change in the fishing access, investment, and fishery management policies in the fishing access countries and regions, the costs will increase Countermeasures: pay close attention to changes in domestic and foreign policies, timely make judgments and corresponding business adjustments, and reduce the losses brought by this risk as much as possible. 2. Resource change risk At present, the company's main ocean-going fishing operation areas are in the Indian Ocean and the Atlantic Ocean, the uncertainties of the changes in fishing resources will affect the output and income of the company's main business. Countermeasures: take use of fleet scale advantages, increase the grasp and control to the catching season of existing fisheries; make arrangements for the development and exploration operations to new fishing ground. 3. Cost change risk As the company's main businesses, both ocean-going fishing and refrigerated transport have risks of fuel price changes, continuous increase of labor costs, and uncertainties of fishing access costs. Countermeasures: reduce the relevant costs by scientifically selecting the refueling time and place and the suppliers, the crew localization, and strengthening the negotiations with the fishing access countries and regions. 4. Exchange rate fluctuation risk The company’s main business incomes are settled by US dollars, yen and other foreign currencies, and have exchange rate fluctuation risks. Countermeasures: pay close attention to the international financial market, rationally use the foreign exchange receipts and payments, and timely make adjustment and settlement of exchange. 5. Market development risk The main market for fish sales is single, so the market fluctuations can have great impacts on the company's main business income. 17 山东省中鲁远洋渔业股份有限公司 2017 年半年度报告全文 Countermeasures: further explore the international and domestic markets, especially the domestic market, take the purpose of “meeting the domestic consumers’ ever-increasing demand for marine high-quality protein” as the vision, actively discuss and build new domestic trade system, and ensure the healthy and rapid development of domestic trade business with new systems and mechanisms. 6. New business development risk: the company purchased five large tuna seine boats from overseas, so the new business management, brand-new fishing fisheries and sales market have uncertain risks. Countermeasures: strengthen the leadership and coordination, and gather various resources of the Company to ensure the smooth implementation of the project. 18 山东省中鲁远洋渔业股份有限公司 2017 年半年度报告全文 Section V. Important Events I. In the report period, the Company held annual shareholders’ general meeting and extraordinary shareholders’ general meeting 1. Annual Shareholders’ General Meeting in the report period Ratio of investor Session of meeting Type Date Date of disclosure Index of disclosure participation The Resolution of Annual General Annual General Meeting 2016 AGM 51.07% 2017-06-15 2017-06-16 Meeting of 2016 (Notice No.: 2017-16) on Juchao website 2. Request for extraordinary general meeting by preferred stockholders whose voting rights restore □ Applicable √ Not applicable II. Profit distribution plan and capitalizing of common reserves plan for the Period □ Applicable √ Not applicable The Company has no plans of cash dividend distributed, no bonus shares and has no share converted from capital reserve either for the year III. Commitments completed in Period and those without completed till end of the Period from actual controller, shareholders, related parties, purchaser and companies □ Applicable √ Not applicable The Company has no commitments completed in Period and those without completed till end of the Period from actual controller, shareholders, related parties, purchaser and companies IV. Appointment and non-reappointment (dismissal) of CPA Whether the semi-annual financial report had been audited □Yes √ No The semi-annual report was not audited V. Explanation on “Qualified Opinion” from CPA by the Board and Supervisory Committee □ Applicable √ Not applicable 19 山东省中鲁远洋渔业股份有限公司 2017 年半年度报告全文 VI. Explanation from the Board for “Qualified Opinion” of last year’s □ Applicable √ Not applicable VII. Bankruptcy reorganization □ Applicable √ Not applicable No bankruptcy reorganization for the Company in reporting period. VIII. Lawsuits Material lawsuits and arbitration □ Applicable √ Not applicable No material lawsuits and arbitration in the reporting Other lawsuits √Applicable□ Not applicable Amount Progress of Trial Results and Judgment Basic Situation of Whether Disclosure Disclosure Related to the Litigation Effects of Implementation Litigation Formed Accrued Date Index Case (Yuan) (Arbitration Litigation of Litigation (Arbitration) Liabilities(Y/N) ) (Arbitration) (Arbitration) In the process of Jinan Intermediat implementing the e People's loan dispute case Court rejected the of Shenzhen Qiwu request of Wealth Shenzhen Qiwu Management Co., Wealth Ltd. and Shandong Managemen Progress of t Co., Ltd. Longkou Aquatic about the Lawsuits Integrated Co., applying for (Notice No.: adding Ltd., the execution Shandong Reject an 2017-15 ; Zhonglu There is no ruling applicant 1,936.24 N application, 2017-06-10 No.: 2017-18 Oceanic on reconsideration Shenzhen Qiwu Fisheries unenforced and No.: Wealth Co., Ltd. as 2017-19) on the person Management Co., subject to Juchao enforcemen Ltd. applied for website t in this adding the case; Shenzhen Company as the Qiwu person subject to Wealth Managemen enforcement to t Co., Ltd. Jinan Intermediate applied for reconsiderat People's Court. ion to 20 山东省中鲁远洋渔业股份有限公司 2017 年半年度报告全文 Shandong Higher People’s Court. IX. Penalty and rectification □ Applicable √ Not applicable No penalty and rectification for the Company in reporting period. X Integrity of the company and its controlling shareholders and actual controllers □Applicable √Not applicable XI. Implementation of the company’s stock incentive plan, employee stock ownership plan or other employee incentives □ Applicable √ Not applicable During the reporting period, the company has no stock incentive plan, employee stock ownership plan or other employee incentives that have not been implemented. XII. Material related transactions 1. Related transaction with daily operation concerned □ Applicable √ Not applicable No related transaction with daily operation concerned for the Company in reporting period. 2. Related transactions by assets acquisition and sold □ Applicable √ Not applicable No related transactions by assets acquisition and sold for the Company in reporting period. 3. Main related transactions of mutual investment outside □ Applicable √ Not applicable No main related transactions of mutual investment outside for the Company in reporting period 4. Contact of related credit and debt □ Applicable √ Not applicable No contact of related credit and debt for the Company in reporting period 21 山东省中鲁远洋渔业股份有限公司 2017 年半年度报告全文 5. Other material related transactions □ Applicable √ Not applicable No other material related transactions for the Company in reporting period XIII. Non-operational fund occupation from controlling shareholders and its related party □ Applicable √ Not applicable No non-operational fund occupation from controlling shareholders and its related party in period. XIV. Major contract and implantation 1. Trusteeship, contract and leasing (1) Trusteeship □ Applicable √ Not applicable The Company had no trusteeship in the reporting period. (2) Contract □ Applicable √ Not applicable The Company had no contract in the reporting period. (3) Leasing □ Applicable √ Not applicable The Company had no leasing in the reporting period. 2. Major guarantee □ Applicable √ Not applicable The Company had no guarantee in the reporting period. 3. Other material contracts □ Applicable √ Not applicable The Company had no other material contracts in the reporting period. XV. Social responsibility 1. Targeted poverty alleviation social responsibility The Company did not has plan of targeted poverty alleviation temporary in first half of 2017, and there is no further plan either 22 山东省中鲁远洋渔业股份有限公司 2017 年半年度报告全文 2. Material environmental protection The listed Company and its subsidiary whether belongs to the key sewage units released from environmental protection department No XVI. Explanation on other significant events √Applicable □Not applicable Name of the Notice Released date Website or index for disclosure Performance Forcast for year of 2016 2017-1-7 http//www.cninfo.com.cn Notice of the Resignation of Directors 2017-2-18 http//www.cninfo.com.cn Resolution of 5th session of 6th BOD 2017-3-4 http//www.cninfo.com.cn Resolution of 4th session of 6th Supervisory Committee 2017-3-4 http//www.cninfo.com.cn Summary of Annual Report 2016 2017-3-4 http//www.cninfo.com.cn Notice of Suspension of Important Matters 2017-4-6 http//www.cninfo.com.cn Performance Forcast for 1Q 2017-4-11 http//www.cninfo.com.cn Progress of Suspension of Important Matters 2017-4-12 http//www.cninfo.com.cn Notice of Resumption of Important Matters 2017-4-19 http//www.cninfo.com.cn Summary of 1Q of 2017 2017-4-29 http//www.cninfo.com.cn Notice of Change the Office Address, Contact Way and 2017-4-29 http//www.cninfo.com.cn Logo of the Company Resolution of 7th session of 6th BOD 2017-5-26 http//www.cninfo.com.cn Notice of Convening the AGM 2016 2017-5-26 http//www.cninfo.com.cn Reminder Notice of Convening the AGM 2016 2017-6-9 http//www.cninfo.com.cn Notice of Lawsuits 2017-6-10 http//www.cninfo.com.cn Resolution of AGM of 2016 2017-6-16 http//www.cninfo.com.cn XVII. Significant event of subsidiary of the Company √ Applicable □ Not applicable The fourth meeting of the 6th Board of Directors of the Company examined and approved the Proposal on the Purchase of Tuna Seine Boat Project, agreed the company’s holding subsidiary – Shandong Zhonglu Haiyan Oceanic Fishery Co., Ltd. to purchase five tuna seine boats with ICCAT registered fishing license. During the reporting period, RMB 162,425,625.20 was invested, and five boats have been handed over up to the disclosure date of this report, and one boat has gone to sea for fishing, the maintenance and preparation and operations of relevant assets of other boats are being processed actively and shall be put into operation. 23 山东省中鲁远洋渔业股份有限公司 2017 年半年度报告全文 Section VI. Changes in Shares and Particulars about Shareholders I. Changes in Shares 1. Changes in Shares In Share Before the Change Increase/Decrease in the Change (+, -) After the Change Capitalizat New Bonus ion of Amount Proportion shares Others Subtotal Amount Proportion shares public issued reserve 128,071,3 128,071,3 I. Unlisted shares 48.13% 48.13% 20 20 128,071,3 128,071,3 1. Sponsor shares 48.13% 48.13% 20 20 Including: State-owned 127,811,3 127,811,3 48.04% 48.04% shares 20 20 Domestic corporate 260,000 0.10% 260,000 0.10% shares 138,000,0 138,000,0 II. Listed shares 51.87% 51.87% 00 00 2. Domestically listed 138,000,0 138,000,0 51.87% 51.87% foreign shares 00 00 266,071,3 266,071,3 III. Total shares 100.00% 100.00% 20 20 Reasons for share changed □Applicable √ Not applicable Approval of share changed □Applicable √ Not applicable Ownership transfer of share changed □Applicable √Not applicable Influence on the basic EPS and diluted EPS as well as other financial indexes of net assets per share attributable to common shareholders of Company in latest year and period □Applicable √Not applicable Other information necessary to disclose for the Company or need to disclosed under requirement from security regulators □Applicable √Not applicable 2. Changes of restricted shares □ Applicable √ Not applicable 24 山东省中鲁远洋渔业股份有限公司 2017 年半年度报告全文 II. Securities issuance and listing □ Applicable √ Not applicable III. Amount of shareholders of the Company and particulars about shares holding In share Total preference shareholders Total common shareholders at with voting rights recovered at 12,053 0 period-end end of reporting period (if applicable) (see Note 8) Particulars about shares held above 5% by common shareholders or top ten common shareholders Amount Amount Number of share pledged/frozen Number of of of Changes holding holding common Nature of Proportion of in unlisted listed Shareholders shares shareholder shares held reportin common common Status Amount held at g period circulati circulati period-e on on nd shares shares Shandong State-owned Assets State-owned 88,000,0 88,000,0 Investment 33.07% corporate 00 00 Holding Company Limited Shandong Luxin Investment State-owned 37,731,3 37,731,3 14.18% Holding corporate 20 20 Company Limited Shenwan Hongyuan 9,367,59 9,367,59 Overseas corporate 3.52% Securities (HK) 0 0 Limited Overseas natural 5,760,42 5,760,42 Chen Tianming 2.16% person 7 7 GUOTAI JUNAN 5,331,69 5,331,69 Overseas corporate 2.00% SECURITIES( 6 6 HONGKONG) 25 山东省中鲁远洋渔业股份有限公司 2017 年半年度报告全文 LIMITED Haitong International Securities 2,180,90 2,180,90 Overseas corporate 0.82% Company 0 0 Limited-Accou nt Client China Everbright 2,072,00 2,072,00 Overseas corporate 0.78% Securities 0 0 (H.K.) Co., Ltd. China National Heavy Duty State-owned 1,950,00 1,950,00 Truck Group 0.73% corporate 0 0 Jinan Truck LLC. Wang Overseas natural 1,209,50 1,209,50 0.45% Dongsheng person 2 2 Domestic nature 1,083,22 1,083,22 Qin Jun 0.41% person 0 0 Strategy investors or general corporate becomes top 10 common Not applicable shareholders due to rights issued (if applicable)(Note 3) Shandong State-owned Assets Investment Holding Co., Ltd and Shandong Luxin Investment Holding Group Co., Ltd are provincial state-owned enterprises under the same stock controlling of Shandong Provincial Commission; China National Heavy Duty Truck Group Jinan Truck LLC is the sponsor shareholder of the Company and the above mentioned shareholders have no Explanation on associated associated relationships or not belong to consistent actors regulated by Management relationship among the aforesaid Regulation of Information Disclosure on Change of Shareholding for Listed Companies. Rests shareholders of the shareholders are the domestically listed foreign shareholders, and t he Company is unknown whether there exists associated relationship or belongs to consistent actor regulated by “management method for acquisition of listed company” among the above said shareholders. Particulars about the shares held by the top ten circulation common shareholders Amount of circulated common shares held at Type of shares Shareholders period-end Type Amount Domestically Shenwan Hongyuan Securities (HK) 9,367,590 listed foreign Limited shares Chen Tianming 5,760,427 Domestically 26 山东省中鲁远洋渔业股份有限公司 2017 年半年度报告全文 listed foreign shares GUOTAI JUNAN Domestically SECURITIES(HONGKONG) 5,331,696 listed foreign LIMITED shares Domestically Haitong International Securities 2,180,900 listed foreign Company Limited-Account Client shares Domestically China Everbright Securities (H.K.) 2,072,000 listed foreign Co., Ltd. shares Domestically Wang Dongsheng 1,209,502 listed foreign shares Domestically Qin Jun 1,083,220 listed foreign shares Domestically Yi Ying 1,078,200 listed foreign shares Domestically Huang Jiayi 1,048,687 listed foreign shares Domestically Lin Mingyu 959,501 listed foreign shares Expiation on associated relationship or consistent actors within the top It is unknown whether the shareholders just mentioned belong to consistent actors or have 10 un-restrict common shareholders associated relationship or regulated by the Management Regulation of Information Disclosure and between top 10 un-restrict on Change of Shareholding for Listed Companies. common shareholders and top 10 common shareholders Explanation on top 10 common shareholders involving margin Not applicable business (if applicable)(see note4) Whether top ten common shareholders or top ten common shareholders with un-restrict shares held have a buy-back agreement dealing in reporting period □ Yes √ No The top ten common shareholders or top ten common shareholders with un-restrict shares held of the Company have no buy-back agreement dealing in reporting period. 27 山东省中鲁远洋渔业股份有限公司 2017 年半年度报告全文 IV. Changes of controlling shareholders or actual controller Changes of controlling shareholders in reporting period □ Applicable √ Not applicable Changes of controlling shareholders had no change in reporting period. Changes of actual controller in reporting period □ Applicable √ Not applicable Changes of actual controller in reporting period had no change in reporting period. 28 山东省中鲁远洋渔业股份有限公司 2017 年半年度报告全文 Section VII. Preferred Stock □ Applicable √ Not applicable The Company had no preferred stock in the reporting. 29 山东省中鲁远洋渔业股份有限公司 2017 年半年度报告全文 Section VIII. Directors, Supervisors and Senior Executives I. Changes of shares held by directors, supervisors and senior executives □Applicable √ Not applicable Found more in annual report 2016 for the changes of shares held by directors, supervisors and senior executives II. Resignation and dismissal of directors, supervisors and senior executives √Applicable □Not applicable Name Position held Type Date Cause Zhao Zhiguo Director Outgoing 2017-06-15 Leave for job change Sui Jianshi Director Election 2017-06-15 Election on AGM 2016 Sui Jianshi Deputy GM Appointment 2017-03-02 Appointed by 5th session of 6th BOD 30 山东省中鲁远洋渔业股份有限公司 2017 年半年度报告全文 Section IX Corporate Bond Whether the Company has a corporation bonds that issuance publicly and listed on stock exchange and without due on the date when semi-annual report approved for released or fail to cash in full on due No 31 山东省中鲁远洋渔业股份有限公司 2017 年半年度报告全文 Section X. Financial Report I. Audit reports Whether the semi-annual report was audited or not □ Yes √ No The financial report of this semi-annual report was unaudited II. Financial statements Units in Notes of Financial Statements is RMB 1. Consolidated balance sheet Prepared by: Shandong Zhonglu Oceanic Fisheries Co., Ltd 2017-06-30 In RMB Item Closing balance Opening balance Current assets: Monetary funds 102,884,493.47 129,521,203.29 Settlement provisions Capital lent Financial assets measured by fair value and with variation reckoned into current gains/losses Derivative financial liability Notes receivable Accounts receivable 41,823,925.36 42,679,066.65 Accounts paid in advance 9,416,627.12 7,787,603.40 Insurance receivable Reinsurance receivables Contract reserve of reinsurance receivable Interest receivable Dividend receivable Other receivables 6,957,211.27 9,384,672.16 Purchase restituted finance asset 32 山东省中鲁远洋渔业股份有限公司 2017 年半年度报告全文 Inventories 211,862,695.24 154,636,414.05 Divided into assets held for sale Non-current asset due within one year Other current assets 33,268,828.90 23,748,949.31 Total current assets 406,213,781.36 367,757,908.86 Non-current assets: Loans and payments on behalf Finance asset available for sales Held-to-maturity investment Long-term account receivable Long-term equity investment Investment property 32,309,303.25 32,338,392.18 Fixed assets 399,550,767.01 415,683,489.86 Construction in progress 152,869,726.81 4,066,989.68 Engineering material Disposal of fixed asset -15,678.87 Productive biological asset Oil and gas asset Intangible assets 12,916,096.12 13,107,393.57 Expense on Research and Development Goodwill Long-term expenses to be 622,977.35 apportioned Deferred income tax asset Other non-current asset 2,285,524.92 2,285,524.92 Total non-current asset 600,538,716.59 467,481,790.21 Total assets 1,006,752,497.95 835,239,699.07 Current liabilities: Short-term loans 168,666,366.61 54,961,454.59 Loan from central bank Absorbing deposit and interbank deposit Capital borrowed Financial liability measured by fair value and with variation reckoned into current gains/losses 33 山东省中鲁远洋渔业股份有限公司 2017 年半年度报告全文 Derivative financial liability Notes payable Accounts payable 103,110,640.88 59,173,732.88 Accounts received in advance 7,948,258.28 19,940,900.11 Selling financial asset of repurchase Commission charge and commission payable Wage payable 20,956,213.42 30,612,403.76 Taxes payable 1,183,524.32 1,344,879.85 Interest payable 86,747.10 Dividend payable Other accounts payable 7,608,658.44 5,221,040.82 Reinsurance payables Insurance contract reserve Security trading of agency Security sales of agency Divided into liability held for sale Non-current liabilities due within 1 433,292.74 866,585.48 year Other current liabilities Total current liabilities 309,906,954.69 172,207,744.59 Non-current liabilities: Long-term loans Bonds payable Including: preferred stock Perpetual capital securities Long-term account payable Long-term wages payable 1,699,751.84 1,699,751.84 Special accounts payable Projected liabilities Deferred income 10,572,454.62 10,572,454.62 Deferred income tax liabilities Other non-current liabilities Total non-current liabilities 12,272,206.46 12,272,206.46 Total liabilities 322,179,161.15 184,479,951.05 34 山东省中鲁远洋渔业股份有限公司 2017 年半年度报告全文 Owner’s equity: Share capital 266,071,320.00 266,071,320.00 Other equity instrument Including: preferred stock Perpetual capital securities Capital public reserve 279,998,206.82 279,998,206.82 Less: Inventory shares Other comprehensive income -310,326.09 -665,059.07 Reasonable reserve Surplus public reserve 21,908,064.19 21,908,064.19 Provision of general risk Retained profit 82,351,322.64 50,349,731.78 Total owner’s equity attributable to 650,018,587.56 617,662,263.72 parent company Minority interests 34,554,749.24 33,097,484.30 Total owner’s equity 684,573,336.80 650,759,748.02 Total liabilities and owner’s equity 1,006,752,497.95 835,239,699.07 Legal Representative: Chi Weizhen Person in Charge of Accounting: Yue Juan Person in Charge of Accounting Department: Lei Lixin 2. Balance Sheet of Parent Company In RMB Item Closing balance Opening balance Current assets: Monetary funds 10,826,333.59 43,007,956.89 Financial assets measured by fair value and with variation reckoned into current gains/losses Derivative financial liability Notes receivable Accounts receivable 10,152,444.68 13,062,916.00 Account paid in advance 6,400,994.97 734,980.49 35 山东省中鲁远洋渔业股份有限公司 2017 年半年度报告全文 Interest receivable Dividends receivable Other receivables 63,207,947.36 39,910,882.35 Inventories 32,853,149.11 35,431,052.28 Divided into assets held for sale Non-current assets maturing within one year Other current assets 847,311.46 848,434.74 Total current assets 124,288,181.17 132,996,222.75 Non-current assets: Available-for-sale financial assets Held-to-maturity investments Long-term receivables 6,286,413.22 6,078,056.38 Long-term equity investments 204,189,455.23 204,189,455.23 Investment property 32,309,303.25 32,338,392.18 Fixed assets 82,806,461.10 89,752,865.40 Construction in progress Project materials Disposal of fixed assets Productive biological assets Oil and natural gas assets Intangible assets 23,204.37 22,566.74 Research and development costs Goodwill Long-term deferred expenses 622,977.35 Deferred income tax assets Other non-current assets 285,524.92 285,524.92 Total non-current assets 326,523,339.44 332,666,860.85 Total assets 450,811,520.61 465,663,083.60 Current liabilities: Short-term borrowings Financial liability measured by fair value and with variation reckoned into current gains/losses Derivative financial liability 36 山东省中鲁远洋渔业股份有限公司 2017 年半年度报告全文 Notes payable Accounts payable 5,677,586.89 10,161,960.89 Accounts received in advance 1,448,468.77 2,530,163.00 Wage payable 10,703,006.68 15,154,703.75 Taxes payable 518,656.55 242,626.86 Interest payable Dividend payable Other accounts payable 71,745,021.05 81,881,163.31 Divided into liability held for sale Non-current liabilities due within 1 year Other current liabilities Total current liabilities 90,092,739.94 109,970,617.81 Non-current liabilities: Long-term loans Bonds payable Including: preferred stock Perpetual capital securities Long-term account payable Long-term wages payable 1,188,790.98 1,188,790.98 Special accounts payable Projected liabilities Deferred income Deferred income tax liabilities Other non-current liabilities Total non-current liabilities 1,188,790.98 1,188,790.98 Total liabilities 91,281,530.92 111,159,408.79 Owners’ equity: Share capita 266,071,320.00 266,071,320.00 Other equity instrument Including: preferred stock Perpetual capital securities Capital public reserve 279,115,900.17 279,115,900.17 37 山东省中鲁远洋渔业股份有限公司 2017 年半年度报告全文 Less: Inventory shares Other comprehensive income Reasonable reserve Surplus reserve 19,184,672.34 19,184,672.34 Retained profit -204,841,902.82 -209,868,217.70 Total owner’s equity 359,529,989.69 354,503,674.81 Total liabilities and owner’s equity 450,811,520.61 465,663,083.60 3. Consolidated Profit Statement In RMB Item Current Period Last Period I. Total operating income 440,178,091.75 407,890,793.78 Including: Operating income 440,178,091.75 407,890,793.78 Interest income Insurance gained Commission charge and commission income II. Total operating cost 406,876,087.35 398,752,608.95 Including: Operating cost 378,367,434.21 382,196,992.60 Interest expense Commission charge and commission expense Cash surrender value Net amount of expense of compensation Net amount of withdrawal of insurance contract reserve Bonus expense of guarantee slip Reinsurance expense Operating tax and extras 1,705,436.85 240,450.97 Sales expenses 4,081,303.48 2,738,457.38 Administration expenses 16,193,699.81 14,381,558.82 Financial expenses 6,517,713.00 -804,850.82 Losses of devaluation of asset 10,500.00 Add: Changing income of fair 38 山东省中鲁远洋渔业股份有限公司 2017 年半年度报告全文 value(Loss is listed with “-”) Investment income (Loss is listed with “-”) Including: Investment income on affiliated company and joint venture Exchange income (Loss is listed with “-”) Other income III. Operating profit (Loss is listed with 33,302,004.40 9,138,184.83 “-”) Add: Non-operating income 910,977.92 3,426,238.02 Including: Disposal gains of 262,776.33 2,672,766.60 non-current asset Less: Non-operating expense 300,402.16 9,680.71 Including: Disposal loss of 399.90 9,680.71 non-current asset IV. Total Profit (Loss is listed with “-”) 33,912,580.16 12,554,742.14 Less: Income tax expense 453,724.36 264,529.60 V. Net profit (Net loss is listed with “-”) 33,458,855.80 12,290,212.54 Net profit attributable to owner’s of 32,001,590.86 11,560,370.58 parent company Minority shareholders’ gains and 1,457,264.94 729,841.96 losses VI. Net after-tax of other comprehensive 354,732.98 -182,005.93 income Net after-tax of other comprehensive income attributable to owners of parent 354,732.98 -182,005.93 company (I) Other comprehensive income items which will not be reclassified subsequently to profit of loss 1. Changes as a result of re-measurement of net defined benefit plan liability or asset 2. Share of the other comprehensive income of the investee accounted for using equity method which will not be reclassified subsequently to profit and loss 39 山东省中鲁远洋渔业股份有限公司 2017 年半年度报告全文 (II) Other comprehensive income items which will be reclassified 354,732.98 -182,005.93 subsequently to profit or loss 1. Share of the other comprehensive income of the investee accounted for using equity method which will be reclassified subsequently to profit or loss 2. Gains or losses arising from changes in fair value of available-for-sale financial assets 3. Gains or losses arising from reclassification of held-to-maturity investment as available-for-sale financial assets 4. The effect hedging portion of gains or losses arising from cash flow hedging instruments 5. Translation differences arising on translation of foreign currency 354,732.98 -182,005.93 financial statements 6. Other Net after-tax of other comprehensive income attributable to minority shareholders VII. Total comprehensive income 33,813,588.78 12,108,206.61 Total comprehensive income 32,356,323.84 11,378,364.65 attributable to owners of parent Company Total comprehensive income 1,457,264.94 729,841.96 attributable to minority shareholders VIII. Earnings per share: (i) Basic earnings per share 0.12 0.04 (ii) Diluted earnings per share 0.12 0.04 Enterprise combine under the same control in the Period, the combined party realized net profit of 0 Yuan before combination, and realized 0 Yuan at last period for combined party Legal Representative: Chi Weizhen Person in Charge of Accounting: Yue Juan Person in Charge of Accounting Department: Lei Lixin 40 山东省中鲁远洋渔业股份有限公司 2017 年半年度报告全文 4. Profit Statement of Parent Company In RMB Item Current Period Last Period I. Operating income 59,539,271.88 14,143,001.64 Less: Operating cost 43,838,067.27 17,632,539.08 Operating tax and extras 452,021.58 239,862.47 Sales expenses 2,225,689.69 Administration expenses 8,254,821.34 7,408,255.61 Financial expenses -262,508.81 -697,673.61 Losses of devaluation of asset 10,500.00 Add: Changing income of fair value(Loss is listed with “-”) Investment income (Loss is listed with “-”) Including: Investment income on affiliated company and joint venture Other income II. Operating profit (Loss is listed 5,020,680.81 -10,439,981.91 with “-”) Add: Non-operating income 266,306.33 302,000.00 Including: Disposal gains of 262,576.33 non-current asset Less: Non-operating expense 260,672.26 7,516.91 Including: Disposal loss of 7,516.91 non-current asset III. Total Profit (Loss is listed with 5,026,314.88 -10,145,498.82 “-”) Less: Income tax expense IV. Net profit (Net loss is listed with 5,026,314.88 -10,145,498.82 “-”) V. Net after-tax of other comprehensive income (I) Other comprehensive income items which will not be reclassified subsequently to profit of loss 1. Changes as a result of re-measurement of net defined benefit 41 山东省中鲁远洋渔业股份有限公司 2017 年半年度报告全文 plan liability or asset 2. Share of the other comprehensive income of the investee accounted for using equity method which will not be reclassified subsequently to profit and loss (II) Other comprehensive income items which will be reclassified subsequently to profit or loss 1. Share of the other comprehensive income of the investee accounted for using equity method which will be reclassified subsequently to profit or loss 2. Gains or losses arising from changes in fair value of available-for-sale financial assets 3. Gains or losses arising from reclassification of held-to-maturity investment as available-for-sale financial assets 4. The effect hedging portion of gains or losses arising from cash flow hedging instruments 5. Translation differences arising on translation of foreign currency financial statements 6. Other VI. Total comprehensive income 5,026,314.88 -10,145,498.82 VII. Earnings per share: (i) Basic earnings per share (ii) Diluted earnings per share 5. Consolidated Cash Flow Statement In RMB Item Current Period Last Period I. Cash flows arising from operating activities: Cash received from selling 405,702,926.35 405,899,058.35 commodities and providing labor 42 山东省中鲁远洋渔业股份有限公司 2017 年半年度报告全文 services Net increase of customer deposit and interbank deposit Net increase of loan from central bank Net increase of capital borrowed from other financial institution Cash received from original insurance contract fee Net cash received from reinsurance business Net increase of insured savings and investment Net increase of amount from disposal financial assets that measured by fair value and with variation reckoned into current gains/losses Cash received from interest, commission charge and commission Net increase of capital borrowed Net increase of returned business capital Write-back of tax received 34,892,340.04 25,846,875.82 Other cash received concerning 43,104,120.67 37,108,348.64 operating activities Subtotal of cash inflow arising from 483,699,387.06 468,854,282.81 operating activities Cash paid for purchasing commodities and receiving labor 350,844,053.24 326,653,829.29 service Net increase of customer loans and advances Net increase of deposits in central bank and interbank Cash paid for original insurance contract compensation Cash paid for interest, commission charge and commission Cash paid for bonus of guarantee 43 山东省中鲁远洋渔业股份有限公司 2017 年半年度报告全文 slip Cash paid to/for staff and workers 56,040,388.83 51,459,471.79 Taxes paid 4,539,217.08 7,096,981.37 Other cash paid concerning 54,399,571.37 67,410,418.78 operating activities Subtotal of cash outflow arising from 465,823,230.52 452,620,701.23 operating activities Net cash flows arising from operating 17,876,156.54 16,233,581.58 activities II. Cash flows arising from investing activities: Cash received from recovering investment Cash received from investment income Net cash received from disposal of fixed, intangible and other long-term 312,482.88 5,006,095.00 assets Net cash received from disposal of subsidiaries and other units Other cash received concerning investing activities Subtotal of cash inflow from investing 312,482.88 5,006,095.00 activities Cash paid for purchasing fixed, 153,930,421.99 8,087,541.71 intangible and other long-term assets Cash paid for investment Net increase of mortgaged loans Net cash received from subsidiaries and other units obtained Other cash paid concerning 84,559.42 investing activities Subtotal of cash outflow from investing 153,930,421.99 8,172,101.13 activities Net cash flows arising from investing -153,617,939.11 -3,166,006.13 activities III. Cash flows arising from financing activities 44 山东省中鲁远洋渔业股份有限公司 2017 年半年度报告全文 Cash received from absorbing investment Including: Cash received from absorbing minority shareholders’ investment by subsidiaries Cash received from loans 157,501,563.84 19,589,731.78 Cash received from issuing bonds Other cash received concerning financing activities Subtotal of cash inflow from financing 157,501,563.84 19,589,731.78 activities Cash paid for settling debts 44,521,400.44 27,340,971.72 Cash paid for dividend and profit 2,542,753.91 1,053,047.07 distributing or interest paying Including: Dividend and profit of minority shareholder paid by subsidiaries Other cash paid concerning financing activities Subtotal of cash outflow from financing 47,064,154.35 28,394,018.79 activities Net cash flows arising from financing 110,437,409.49 -8,804,287.01 activities IV. Influence on cash and cash equivalents due to fluctuation in -1,332,336.74 3,081,029.40 exchange rate V. Net increase of cash and cash -26,636,709.82 7,344,317.84 equivalents Add: Balance of cash and cash 128,737,661.78 72,428,421.94 equivalents at the period -begin VI. Balance of cash and cash 102,100,951.96 79,772,739.78 equivalents at the period -end 6. Cash Flow Statement of Parent Company In RMB Item Current Period Last Period I. Cash flows arising from operating activities: 45 山东省中鲁远洋渔业股份有限公司 2017 年半年度报告全文 Cash received from selling commodities and providing labor 16,987,592.08 37,549,036.30 services Write-back of tax received Other cash received concerning 25,919,003.74 1,957,724.04 operating activities Subtotal of cash inflow arising from 42,906,595.82 39,506,760.34 operating activities Cash paid for purchasing commodities and receiving labor 15,123,541.05 8,146,479.78 service Cash paid to/for staff and workers 14,657,227.96 12,905,058.54 Taxes paid 315,684.06 3,364,550.60 Other cash paid concerning 44,713,882.83 42,287,457.92 operating activities Subtotal of cash outflow arising from 74,810,335.90 66,703,546.84 operating activities Net cash flows arising from operating -31,903,740.08 -27,196,786.50 activities II. Cash flows arising from investing activities: Cash received from recovering investment Cash received from investment income Net cash received from disposal of fixed, intangible and other long-term 287,282.88 assets Net cash received from disposal of subsidiaries and other units Other cash received concerning investing activities Subtotal of cash inflow from investing 287,282.88 activities Cash paid for purchasing fixed, 543,090.00 125,056.87 intangible and other long-term assets Cash paid for investment Net cash received from 46 山东省中鲁远洋渔业股份有限公司 2017 年半年度报告全文 subsidiaries and other units Other cash paid concerning investing activities Subtotal of cash outflow from investing 543,090.00 125,056.87 activities Net cash flows arising from investing -255,807.12 -125,056.87 activities III. Cash flows arising from financing activities Cash received from absorbing investment Cash received from loans Cash received from issuing bonds Other cash received concerning financing activities Subtotal of cash inflow from financing activities Cash paid for settling debts 1,900,000.00 Cash paid for dividend and profit 15,856.43 distributing or interest paying Other cash paid concerning financing activities Subtotal of cash outflow from financing 1,915,856.43 activities Net cash flows arising from financing -1,915,856.43 activities IV. Influence on cash and cash equivalents due to fluctuation in -22,076.10 -4,836.22 exchange rate V. Net increase of cash and cash -32,181,623.30 -29,242,536.02 equivalents Add: Balance of cash and cash 43,007,956.89 40,612,855.17 equivalents at the period -begin VI. Balance of cash and cash 10,826,333.59 11,370,319.15 equivalents at the period -end 7. Statement of Changes in Owners’ Equity (Consolidated) This Period 47 山东省中鲁远洋渔业股份有限公司 2017 年半年度报告全文 In RMB This Period Owners’ equity attributable to parent company Other equity instrument Item Less: Other Provisio Minorit Total Perpet Reason Capital Invento compre Surplus n of Retaine y owners’ Share Prefer ual able capita reserve ry hensive reserve general d profit interests equity red Other reserve l shares income risk stock securi ties 266,07 I. Balance at the 279,998 -665,05 21,908, 50,349, 33,097, 650,759 1,320. end of the last year ,206.82 9.07 064.19 731.78 484.30 ,748.02 00 Add: Changes of accounting policy Error correction of the last period Enterprise combine under the same control Other II. Balance at the 266,07 279,998 -665,05 21,908, 50,349, 33,097, 650,759 beginning of this 1,320. ,206.82 9.07 064.19 731.78 484.30 ,748.02 year 00 III. Increase/ Decrease in this 354,732 32,001, 1,457,2 33,813, year (Decrease is .98 590.86 64.94 588.78 listed with “-”) (i) Total 354,732 32,001, 1,457,2 33,813, comprehensive .98 590.86 64.94 588.78 income (ii) Owners’ devoted and decreased capital 1.Common shares invested by shareholders 2. Capital invested by holders of other equity instruments 3. Amount reckoned into owners equity with share-based 48 山东省中鲁远洋渔业股份有限公司 2017 年半年度报告全文 payment 4. Other (III) Profit distribution 1. Withdrawal of surplus reserves 2. Withdrawal of general risk provisions 3. Distribution for owners (or shareholders) 4. Other (IV) Carrying forward internal owners’ equity 1. Capital reserves conversed to capital (share capital) 2. Surplus reserves conversed to capital (share capital) 3. Remedying loss with surplus reserve 4. Other (V) Reasonable reserve 1. Withdrawal in the report period 2. Usage in the report period (VI)Others IV. Balance at the 266,07 279,998 -310,32 21,908, 82,351, 34,554, 684,573 end of the report 1,320. ,206.82 6.09 064.19 322.64 749.24 ,336.80 period 00 Last Period In RMB Last Period Owners’ equity attributable to the parent Company Minorit Item Other Less: Other Provisio Total Reason y Share equity instrument Capital Invento compre Surplus n of Retaine interest owners’ able equity capital Prefer Perpet reserve ry hensive reserve general d profit s Other reserve red ual shares income risk 49 山东省中鲁远洋渔业股份有限公司 2017 年半年度报告全文 stock capita l securi ties 266,07 I. Balance at the 279,998 -34,029. 21,908, -2,235,3 28,042, 593,750 1,320. end of the last year ,206.82 26 064.19 38.96 285.19 ,507.98 00 Add: Changes of accounting policy Error correction of the last period Enterprise combine under the same control Other II. Balance at the 266,07 279,998 -34,029. 21,908, -2,235,3 28,042, 593,750 beginning of this 1,320. ,206.82 26 064.19 38.96 285.19 ,507.98 year 00 III. Increase/ Decrease in this -182,00 11,560, 729,841 12,108, year (Decrease is 5.93 370.58 .96 206.61 listed with “-”) (i) Total -182,00 11,560, 729,841 12,108, comprehensive 5.93 370.58 .96 206.61 income (ii) Owners’ devoted and decreased capital 1.Common shares invested by shareholders 2. Capital invested by holders of other equity instruments 3. Amount reckoned into owners equity with share-based payment 4 Other (III) Profit distribution 1. Withdrawal of surplus reserves 2. Withdrawal of general risk provisions 50 山东省中鲁远洋渔业股份有限公司 2017 年半年度报告全文 3. Distribution for owners (or shareholders) 4. Other (IV) Carrying forward internal owners’ equity 1. Capital reserves conversed to capital (share capital) 2. Surplus reserves conversed to capital (share capital) 3. Remedying loss with surplus reserve 4. Other (V) Reasonable reserve 1. Withdrawal in the report period 2. Usage in the report period (VI)Others IV. Balance at the 266,07 279,998 -216,03 21,908, 9,325,0 28,772, 605,858 end of the report 1,320. ,206.82 5.19 064.19 31.62 127.15 ,714.59 period 00 8. Statement of Changes in Owners’ Equity (Parent Company) This Period In RMB This Period Other equity instrument Other Total Item Perpetu Less: Share Capital comprehe Reasonab Surplus Retaine al Inventory owners’ capital Preferre reserve nsive le reserve reserve d profit capital Other shares equity d stock income securiti es -209,86 I. Balance at the 266,071, 279,115,9 19,184,67 354,503,6 8,217.7 end of the last year 320.00 00.17 2.34 74.81 0 51 山东省中鲁远洋渔业股份有限公司 2017 年半年度报告全文 Add: Changes of accounting policy Error correction of the last period Other II. Balance at the 266,071, -209,86 279,115,9 19,184,67 354,503,6 beginning of this 8,217.7 320.00 00.17 2.34 74.81 year 0 III. Increase/ Decrease in this 5,026,3 5,026,314 year (Decrease is 14.88 .88 listed with “-”) (i) Total 5,026,3 5,026,314 comprehensive 14.88 .88 income (ii) Owners’ devoted and decreased capital 1.Common shares invested by shareholders 2. Capital invested by holders of other equity instruments 3. Amount reckoned into owners equity with share-based payment 4. Other (III) Profit distribution 1. Withdrawal of surplus reserves 2. Distribution for owners (or shareholders) 3. Other (IV) Carrying forward internal owners’ equity 1. Capital reserves conversed to capital (share capital) 2. Surplus reserves 52 山东省中鲁远洋渔业股份有限公司 2017 年半年度报告全文 conversed to capital (share capital) 3. Remedying loss with surplus reserve 4. Other (V) Reasonable reserve 1. Withdrawal in the report period 2. Usage in the report period (VI)Others IV. Balance at the 266,071, -204,84 279,115,9 19,184,67 359,529,9 end of the report 1,902.8 320.00 00.17 2.34 89.69 period 2 Last period In RMB Last period Other equity instrument Other Total Item Perpetu Less: Share Capital comprehe Reasonab Surplus Retaine al Inventory owners’ capital Preferre reserve nsive le reserve reserve d profit capital Other shares equity d stock income securiti es -199,48 I. Balance at the 266,071, 279,115,9 19,184,67 364,883,2 8,637.6 end of the last year 320.00 00.17 2.34 54.83 8 Add: Changes of accounting policy Error correction of the last period Other II. Balance at the 266,071, -199,48 279,115,9 19,184,67 364,883,2 beginning of this 8,637.6 320.00 00.17 2.34 54.83 year 8 III. Increase/ Decrease in this -10,145, -10,145,4 year (Decrease is 498.82 98.82 listed with “-”) 53 山东省中鲁远洋渔业股份有限公司 2017 年半年度报告全文 (i) Total -10,145, -10,145,4 comprehensive 498.82 98.82 income (ii) Owners’ devoted and decreased capital 1.Common shares invested by shareholders 2. Capital invested by holders of other equity instruments 3. Amount reckoned into owners equity with share-based payment 4. Other (III) Profit distribution 1. Withdrawal of surplus reserves 2. Distribution for owners (or shareholders) 3. Other (IV) Carrying forward internal owners’ equity 1. Capital reserves conversed to capital (share capital) 2. Surplus reserves conversed to capital (share capital) 3. Remedying loss with surplus reserve 4. Other (V) Reasonable reserve 1. Withdrawal in the report period 2. Usage in the report period (VI)Others 54 山东省中鲁远洋渔业股份有限公司 2017 年半年度报告全文 IV. Balance at the 266,071, -209,63 279,115,9 19,184,67 354,737,7 end of the report 4,136.5 320.00 00.17 2.34 56.01 period 0 III. Company profile (I) Enterprise registration place, Organization form and Headquarters address Shandong Zhonglu Oceanic Fisheries Co., Ltd. (the “Company”), registration address: No. 29 Miaoling Road, Laoshan District, Qingdao Shangdong, headquarter locates at No. 65 Haier Road, Qingdao Shangdong, was incorporated as a joint stock limited company in the People’s Republic of China on 30 July 1999 according to the documentation of Lu Ti Gai Zi [1999] No.85 issued by Shandong Development and Reform Commission, and the holding company of the Company is Shandong Fisheries Enterprise Group General Corporation, the main sponsor. On 26 June 2000, being approved by the documentation of Zheng Jian Fa Xing Zi [2000] No.82 issued by the China Securities Regulatory Commission, the Company’s B-share, stock ID ”Zhonglu B”, stock code” 200992” are listing for trading on Shenzhen Stock Exchange dated 24 July 2000. Basic organization structure of the Company: board of shareholders, board of directors, supervisory committee, office of the board, departments of human resources, financing plan department, corporate operation department, office of auditory supervision and general affairs department. (II) Business nature and main business activities of Enterprise Corporate industry: sea-going fisheries Corporate major products: tuna and its products Operating scope: general management projects: sales and processing of aquatic products; merchandise import and export business within approved scope; ice machine manufacture and sale; refrigeration equipment manufacturing, installation, maintenance; refrigeration; load and unload services; housing lease. Pre-licensing projects: offshore fishing and distant fishing. (III) person approve teh Financial report for disclosed and date for reprot The financial report has been approved for report by the Board dated 29 August 2017. (IV) Scope and changes of consolidated statements during the reporting period Ended as 30 June 2017, consolidation scope of the Company is as: four subsidiaries, that is Shandong Zhonglu Fishery Shipping Co., Ltd., Shandong Zhonglu Oceanic (Yantai) Foods Co., Ltd., HABITAT INTERNATIONAL CORPORATION and Shandong Zhonglu Haiyan Deep-sea Fishery Co., Ltd; three sub-subsidiary: LAIFFISHERIES COMPANY LIMITED, ZHONG GHA FOODS COMPANY LIMITED and Shandong Zhonglu Ocean Refrigerated Co., Ltd.; and one operation entity with controlling rights obtained through operating lease: YAW ADDO FISHERIES COMPANY LIMITED. Found more in Note VIII. Change of Consolidation Rage and Note IX. Equity in Other entity 55 山东省中鲁远洋渔业股份有限公司 2017 年半年度报告全文 IV. Preparation basis of Financial Statements 1. Preparation basis Base on the running continuously and actual transactions and events, in line with the Accounting Standards for Business Enterprise – Basic Standards and specific principle of accounting standards issued by the Ministry of Finance, the Company prepared and formulate the financial statement lies on the followed important accounting policy and estimation. 2. Going concern The Company have the ability to continue as a going concern within 12 months at least since end of the reporting period, there are no major events that impact the ability to continue as a going concern V. Important accounting policy and estimation Notes on specific accounting policies and accounting estimation: The Company and subsidiaries determine specific accounting policies and accounting estimation based on their production and operation, which mainly differ in accrual method for bad debt provision of the account receivable, evaluation of inventory, depreciation of fixed assets and intangible assets amortization and recognization time of the revenue etc. 1. Declaration of obedience to Accounting Standards for Business Enterprise The Financial Statements of the Company are up to requirements of Accounting Standards for Business Enterprise and also a true and thorough reflection to the relevant information as the Company’s financial position dated 30th June 2017 and the operation results as well as cash flow from January to June in 2017. 2. Accounting period The Company’s accounting year is Gregorian calendar year, namely from 1st January to 31st December of every year. 3. Business cycle The Company’s business cycle is one year(12 months) as a normal cycle, and the business cycle is the determining criterion for the liquidity of assets and liabilities of the Company. 4. Bookkeeping standard currency The Renminbi (RMB) is taken as the book-keeping standard currency 56 山东省中鲁远洋渔业股份有限公司 2017 年半年度报告全文 5. Accounting methods for consolidation of enterprises under the same control or otherwise (1) Consolidation of enterprises under the same control Where the Company for long term equity investment arising from business combination under common control satisfies the combination consideration by payment of cash, transfer of non-cash assets or assumption of debt, the carrying value of the net assets of the acquire in combined financial statement of the ultimate controller shared by the Company as at the combination date shall be deemed as the initial investment cost of such long term equity investment. If the equity instrument issued by combining party are consider as the combination consideration, than the total value of the issuing shares are consider as the share capital. The difference between the initial cost of long-term equity investment and book value of consideration (or total face value of the shares issued) paid, capital surplus adjusted; if the capital surplus not enough to written down, than retained earning adjusted. (2) Business combination not under common control As for business combination not under common control, combination costs refer to the sum of the fair value of the assets paid, liabilities occurred or assumed as well as equity securities issued by the acquirer to obtain control over the acquire as at the acquisition date. As for acquiree that obtained by consolidation not under the same control, the qualified confirmation of identified assets, liability and contingency liabilities should calculated by fair value on day of purchased. If the consolidation cost larger than the fair value amount of indentified net assts from acquiree’s, the differences should be recognized as goodwill. If the consolidation cost less than the fair value amount of indentified net assts from acquiree’s, the differences should reckoned into current gains/losses after re-examination. 6. Preparation methods for consolidated financial statements (1) Consolidation financial statement range The Company includes all the subsidiaries (including the separate entities controlled by the Company) into consolidated financial statement, including companies controlled by the Company, non-integral part of the investees and structural main body. (2) Centralize accounting policies, balance sheet dates and accounting periods of parent and subsidiaries. As for the inconsistency between the subsidiaries and the Company in the accounting policies and periods, the necessary adjustment is made on the subsidiaries’ financial statements in the preparation of the consolidated financial statements according to the Company’s accounting policies and periods. (3) Setoff of consolidated financial statement The consolidated financial statements shall be prepared on the basis of the balance sheet of the parent company and subsidiaries, which offset the internal transactions incurred between the parent company and subsidiaries and within subsidiaries. The owner’s equity of the subsidiaries not attributable to the parent company shall be presented as minority equity under the owner’s equity item in the consolidated balance sheet. The long term equity investment of the parent company held by the subsidiaries, deemed as treasury stock of the corporate group as well as the reduction of owners’ equity, shall be presented as “Less: treasury stock” under the owners’ equity item in the consolidated balance sheet. (4) Accounting for acquisition of subsidiary through combination For subsidiaries acquired under enterprise merger involving enterprises under common control, the assets, liabilities, operating results and cash flows of the subsidiaries are included in the consolidated financial 57 山东省中鲁远洋渔业股份有限公司 2017 年半年度报告全文 statements from the beginning of the financial year in which the combination took place. When preparing the consolidated financial statements, for the subsidiaries acquired from business combination not involving entities under common control, the identifiable net assets of the subsidiaries are adjusted on the basis of their fair values on the date of acquisition. 7. Classification of joint arrangements and accounting treatment of joint operation (1) Classification of joint arrangements Joint arrangements are divided into joint operations and joint ventures. Joint arrangements achieved not through separate entities are classified as joint operations. Separate entities refer to the entities with separate identifiable financial architecture including separate legal entities and legally recognized entities without the qualification of legal entity. Joint arrangements achieved through separate entities are generally classified as joint ventures. In case of changes in rights entitled to and obligations undertaken by the parties of joint venture under a joint arrangement due to the changes in relevant facts and circumstances, the parties of joint venture will re-assess the classification of joint arrangements. (2) Accounting treatment for joint operations The parties of joint operation should recognize the following items in relation to their share of interest in joint operation, and proceed with accounting in accordance with the relevant provisions under the Accounting Standards for Business Enterprises: to recognize their separate assets or liabilities held, and recognize the assets or liabilities jointly held according to their respective shares; to recognize the income from the disposal of their output share under joint operation; to recognize the income from the disposal of output under joint operation according to their respective shares; to recognize the expenses incurred separately, and recognize the expenses incurred under joint operation according to their respective shares. For the parties of a joint operation not under common control, if they are entitled to relevant assets and undertake relevant liabilities of the joint operation, accounting will be carried out with reference to the provisions of the parties of joint operation; otherwise, it should be subject to relevant Accounting Standards for Business Enterprises. (3) Accounting treatment for joint ventures The parties of a joint venture should perform accounting for investments by the joint venture in accordance with the Accounting Standards for Business Enterprises No. 2 – Long-term Equity Investments. The parties not under common control should carry out accounting depending on their influence on the joint venture. 8. Determination criteria of cash and cash equivalent The cash recognized in the preparation of the cash flow statements, is the Company’s storage cash and deposits available for payment anytime. The cash equivalents recognized in the preparation of the cash flow statements refers to the investment held by the Company with characteristic of short-term, strong mobility, easy transfer to known sum cash and has slim risk from value changes. 9. Foreign currency exchange and the conversion of foreign currency statements (1) Foreign currency exchange The foreign currency exchange is booked on the current exchange rate on the transaction day and converted in the bookkeeping standard currency. On the balance sheet day, the monetary items are converted on the current rate on 58 山东省中鲁远洋渔业股份有限公司 2017 年半年度报告全文 the balance sheet day, concerning the exchange differences between teh spot exchange rate on that date and initial confirmation or the sport exchange rate on previously balance sheet date, should reckoned in to current gains/losses except the capitalizing on exchange differences for foreign specific loans, which was reckoned into cost for capitalizing. The non-monetary items measured on the historic cost are still measured by the original bookkeeping rate with the sum of the bookkeeping standard currency unchanged. Items of non-monetary foreign currency which was calculated by fair value, should converted by spot exchange rate on the confirmation day of fair value, difference between the converted amount of bookkeeping currency and original amount of bookkeeping currency, was treated as changes of fair value (including exchange rate changed) reckoned into current gains/losses or recognized as other consolidated income. (2) Conversion of foreign currency financial statements Upon the conversion of the foreign currency financial statements of the controlling subsidiaries, joint enterprises, and the affiliated enterprises on the bookkeeping standard currency different from the Company’s, the accounting check and preparation of the consolidated financial statements are made. Assets and liabilities items in the balance sheet, are converted on the current rate on the balance sheet day; owners’ equity items besides the “retained profit” item, the other items are converted on the actual rate. Incomes and expenses items in the profit statement are converted on the current rate. The conversion difference of the foreign currency financial statements is listed specifically in the owners’ equity in the balance sheet. The foreign currency cash flow is converted on the current rate on the cash flow actual day. The cash influenced by the rate fluctuation is listed specifically in the cash flow statement. As for the foreign operation, the conversion difference of the foreign currency statement related to the foreign operation is transferred in proportion into the disposal of the current loss/gain. 10. Financial instruments (1) Categories and recognition of financial instruments The financial instruments are classified as the financial assets or liabilities and equity instruments. As the Company becomes one party of the financial instrument contract, the instrument is recognized as one financial asset or liability or equity instruments. In the initial recognition, the financial assets are classified as, the financial assets measured on fair value and with its changes reckoned into the current loss/gain, long-term invest-bonds, account receivables, and financial assets available for sale. Categories of the financial assets besides account receivables are dependent on the holding intention and purpose of the Company and its subsidiaries for the financial assets. In the initial recognition, the financial liabilities are classified as the financial liabilities measured on the fair value and with its changes reckoned into the current loss/gain, other financial liabilities. Financial assets measure by fair value and of which the changes are included in the current profits and losses include the trading financial assets with holding purpose of selling in the short run and the financial assets designated to be measure by fair value in the initial recognition and of which the changes are included in the current profits and losses; receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market; available-for-sale financial assets are non-derivative financial assets that are either designated in this category or not classified in any of the other categories at initial recognition; 59 山东省中鲁远洋渔业股份有限公司 2017 年半年度报告全文 held-to-maturity investments are non-derivative financial assets with fixed maturity and fixed or determinable payments that management has the positive intention and ability to hold to maturity. (2) Measurement of financial instruments In the initial recognition, the financial instruments are measured on fair value; and the follow-up measurements are: financial assets and financial assets available for sale that measured by fair value and with alteration reckoned into current gains/losses together with the financial liabilities that measured by fair value with alteration reckoned into current gains/losses should measured by fair value; the held-to-maturity securities, loans, account receivable and other financial liability are measured by amortized cost; as for the equity instrument investment without quote in an active market and with its fair value can not be reliably measured, and those derivative financial assets or liability that paid with equity instrument, which have hook with such instrument, should measured by cost. The loss/gain from the fair value changes in the follow-up measurement of the financial assets and liabilities, besides one related to the hedge, is dealt with in the following methods: ① The financial assets or liabilities measured on the fair value and with its changes reckoned into the current loss/gain, are reckoned into the fair value loss/gain; ② The fair value change of the financial assets available for sale, is reckoned into the other comprehensive income. (3) Recognition of the fair value for the financial assets and liabilities For those financial instruments existing in active markets, market quotation in the active market is used to confirm their fair values; fair value of the financial instruments which have no active market is confirmed by adoption of estimation technology. The estimation technology mainly including market approach, income approach and cost method (4) Recognition basis and measurement method for the transfer of financial assets/liabilities As for the financial assets with all risks and compensations on their patent transferred, or all risks and compensations neither maintained nor transferred but the control over the assets given up, the recognition of the financial asset may terminate. For the financial assets are qualified for the recognition of termination conditions, the measurement may be taken on the financial assets transfer, namely the difference is reckoned into the current loss/gain, between the book value of the transferred financial assets and, the total of the consideration value received from the transfer and the fair value change accumulative sum originally booked into the capital reserve. If the partial transfer satisfies the criteria for derecognition, the entire carrying value of the transferred financial asset shall proportionally allocated between the derecognized portion and the retained portion according to their respective relative fair value. When all or part of the current obligation to a financial liability has been terminated, the entire or part of such financial liability shall be derecognized. (5) Impairment loss on financial assets When an impairment loss on a financial asset carried at amortized cost has occurred, the amount of loss is provided for at the difference between the asset’s carrying amount and the present value of its estimated future cash flows (excluding future credit losses that have not been incurred). If there is objective evidence that the value of the financial asset recovered and the recovery is related objectively to an event occurring after the impairment was recognized, the previously recognized impairment loss is reversed and the amount of reversal is recognized in profit or loss. When an impairment loss on a financial asset measured at cost has occurred, the amount of loss is provided for at the difference between the asset’s carrying amount and the present value of its estimated future cash flows. The impairment loss on such financial asset is not reversed once it is recognized. 60 山东省中鲁远洋渔业股份有限公司 2017 年半年度报告全文 Where there is objective evidence that an impairment loss on available-for-sale financial assets occurs, the cumulative loss arising from the decline in fair value that had been recognized directly in equity is removed from equity and recognized in impairment loss. For en investment in debt instrument classified as available-for-sale on which impairment losses have been recognized, if, in a subsequent period, its fair value increases and the increase can be objectively related to an even occurring after the impairment loss was recognized in profit or loss, the previously recognized impairment loss is reversed and recognized in profit or loss for the current period. For an investment in an equity instrument classified as available-for-sale on which impairment losses have been recognized, the increase in its fair value in a subsequent period is recognized in equity directly. For investments in equity instruments, the specific quantitative criteria for the Company to determine “serious” or “not temporary” decrease in their fair value, cost computing method, method for determining closing fair value, and basis for determining the continuous decrease period are set out below: Specific quantitative criterion on “serious” decrease in Decrease in closing fair value relative to the cost has reached or their fair value exceeded 50% Specific quantitative criterion on “not temporary” Fall for 12 consecutive months decrease in their fair value Consideration of payment at acquisition (net of cash dividends declared but not yet paid or due but unpaid interest on bonds) Cost computing method and the relevant transaction cost are recognized as the investment cost. As for a financial instrument for which there is an active market, the quoted prices in the active market shall be used to Method for determining closing fair value recognize the fair values thereof. Where there is no active market for a financial instrument, the enterprise concerned shall adopt value appraisal techniques to determine its fair value. The rebound in the continuous fall or the period with the tread Basis for determining the of fall is less than 20% margin. Rebound duration not more continuous decrease period than six months is treated as continuous decrease period. 11. Account receivable (1) Account receivables with single major amount and withdrawal bad debt provision independently Book balance of the account receivable with over one million Criterion or amount standards of major single amount Yuan (one million yean inclusive) Withdrawal method for individual bad debt provision accrual Recognized on the difference between the book value and the with major single amount concerned current value of the estimative future cash flow (2) Account receivable with bad debt provision accrual by portfolio Portfolio Accrued method for bad Age portfolio Aging of accounts Withdrawing bad bed provision by aging method in portfolio: 61 山东省中鲁远洋渔业股份有限公司 2017 年半年度报告全文 √ Applicable □ Not applicable Accrued proportion of other accounts Account ages Accrued proportion of accounts receivable receivable Within six months 5.00% 5.00% 6 months – 1 year (including 1 year) 10.00% 10.00% 1-2 years 30.00% 30.00% 2-3 years 50.00% 50.00% Over three years 100.00% 100.00% Withdrawing bad bed provision by percentage of total accounts receivable outstanding in portfolio: □ Applicable √ Not applicable Withdrawing bad bed provision by other methods in portfolio : □ Applicable √ Not applicable (3) Account receivable with minor single amount but has individual bad debt provision accrual Account receivable with over three years in account age and has Reasons for individual bad debt prevision accrual objective evidence of impairment appears Recognized on the difference between the book value and the Accrued method for bad debt provision current value of the estimative future cash flow 12. Inventory Whether the company needs to comply with the disclosure requirements of the particular industry No 13. Classify to assets available for sale 14. Long term equity investment (1) Recognition of initial investment cost Initial investment cost of long term equity investment obtained by corporate consolidation: in the case of the consolidation of enterprises under the same control, recognized as the initial cost is the book value of the owners’ equity obtained from the consolidated party; in the case of the consolidation of enterprises not under the same control, recognized as the initial cost is the recognized consolidation cost on the purchase day. As for the long term equity investment obtained by cash payment, the initial investment cost is the actual purchase payment. As for the long term equity investment obtained by the equity securities offering, the initial investment cost is the fair value of the equity securities. As for the long-term equity investment obtained by debt reorganization, initial investment cost of such investment should determine by relevant regulation of the “Accounting Standards for Business Enterprise No.12- Debt Reorganization”; As for the long term equity investment obtained by the exchange of the non-monetary assets and the debts restructuring, the initial investment cost is recognized on the relevant rules in the Principles. 62 山东省中鲁远洋渔业股份有限公司 2017 年半年度报告全文 (2) Subsequent measurement and profit or loss recognition Where the investor has a control over the investee, long-term equity investments are measured using cost method. Long-term equity investments in associates and joint ventures are measured using equity method. Where part of the equity investments of an investor in its associates are held indirectly through venture investment institutions, common fund, trust companies or other similar entities including investment linked insurance funds, such part of equity investments indirectly held by the investor shall be measured at fair value through profit or loss according to according to relevant requirements of Accounting Standards for Business Enterprises No.22—Recognization and measurement of Financial Instruments regardless whether the above entities have significant influence on such part of equity investments, while the remaining part shall be measured using equity method. (3) Basis of conclusion for common control and significant influence over the investee Joint control over an investee refers to where the activities which have a significant influence on return on certain arrangement could be decided only by mutual consent of the investing parties sharing the control, which includes the sales and purchase of goods or services, management of financial assets, acquisition and disposal of assets, research and development activities and financing activities, etc.; Significant influence on the investee refers to that: significant influence over the investee exists when holding more than 20% but less than 50% of the shares with voting rights or even if the holding is below 20%, there is still significant influence if any of the following conditions is met: there is representative in the board of directors or similar governing body of the investee; participation in the investee’s policy setting process; assign key management to the investee; the investee relies on the technology or technical information of the investing company; or major transactions with the investee. 15. Investment real estate Measurement for investment real estate Cost method Depreciation or amortization method Category of the Company’s investment real estate: rented land use rights, rented buildings and land use rights held for transfer after appreciation. Investment real estate of the Company is initially measured by cost and conducting follow-up measures by cost mode. Accrued on the year averaging is the depreciation of the lease buildings in the Company’s investment property. The detailed check principle is same as that of the fixed assets. The rented land use rights and land use rights held for transfer after appreciation owned by the Company was adopted line amortization method. Detail calculation policy was similar to intangible assets. 16. Fixed assets (1) Recognition The fixed assets are tangible assets held for the goods production, labor supply, lease or operation & management, and with above one-accounting-year service life; meanwhile as up to the following conditions, they are recognized: The economic interest related to the fixed assets probably flow into the Company; The cost of the fixed assets can be measured reliably. 63 山东省中鲁远洋渔业股份有限公司 2017 年半年度报告全文 (2) Depreciation method Category Depreciation method Depreciation life (year) Salvage rate Annual depreciation rate House and building Straight-line depreciation 20-40 3-5 2.00-5.00 Vessel and netting gear Straight-line depreciation 5-30 3-5 3.17-19.40 Machine equipment Straight-line depreciation 8-20 3-5 5.00-12.00 Transportation Straight-line depreciation 5 3-5 19.00-19.40 equipment Furniture and office Straight-line depreciation 5 3-5 19.00-19.40 equipment The Company's fixed assets mainly include housing and buildings, vessels and netting, machinery and equipment, transportation equipment, furniture and office equipment; and the depreciation method adopts the straight-line depreciation. The useful life and estimated net residual value of fixed assets are determined by the nature and use condition of various types of fixed assets. The useful life, estimated net residual value, and depreciation method of fixed assets are rechecked at the end of the year, if there is difference with the former estimated number, corresponding adjustments should be made. In addition to the fixed assets that have been accrued depreciation and still continue to use and the land that has been separately valued and recorded, the Company counts and draws the depreciation of all fixed assets. (3) Recognition, evaluation and depreciation of the fixed assets under finance lease Recognition of fixed assets under finance lease: the nature of this kind of lease is a transfer of all risk and rewards related to the ownership of assets. Measurement of fixed assets under finance lease: the initial amount of a fixed asset under finance lease should be recorded as the lower of fair value of the leased asset at the beginning date of lease term and the present value of minimum lease payment. Subsequent measurement of fixed assets under finance lease should be in accordance with the accounting policies adopted for self-owned fixed assets in respect of provision of depreciation and impairment. 17. Project in progress Project in progress of the Company divided as self-run construction and out-bag construction. The project in progress of the Company carried forward as fixed assets while the construction is ready for the intended use. Criteria of the expected condition for use should apply one of the follow conditions: The substance construction (installation included) of the fixed assets has completed all or basically; As the projects have been in test production or operation, and the results show that the assets can operate properly and produce the qualified products stably, or the test operation result shows the assets can operate or open properly. The expenditure of the fixed assets on the construction, is a little or little. The fixed assets of the project constructed have been up to the requirements of the design or contract, or basically up to. 18. Borrowing expenses (1) Recognition principle on capitalization of borrowing expenses As for the Company’s actual borrowing expenses directly attributable to the assets construction or production, it is capitalized and reckoned into the relevant assets cost; as for other borrowing expenses, it is recognized on the 64 山东省中鲁远洋渔业股份有限公司 2017 年半年度报告全文 actual sum and reckoned into the current loss/gain. The assets up to the capitalization are assets as the capital assets, investment real estate, and inventory reaching the expectant availability or sale ability. (2) Calculation of the capitalization Capitalization term: the period from the time starts to capitalization to the time the capitalization ends. The period of capitalization suspended is not included. The capitalization of borrowing expenses should be suspended while the abnormal interrupt, which surpass three months continuously, in the middle of acquisition or construction or production. As for the borrowing of the specific borrowing, the capitalization sum is recognized on the current actual interest expenses less the interest income of the borrowing capital not utilized but deposited in the bank or the return of the temporary investment; As for the appropriation of the general borrowing, the capitalization sum is recognized on the weighted average of, the accumulative assets expenditure above the specific borrowing, and times the capitalization rate of the appropriation; As for the discount or premium of the borrowing, the discount or premium to be diluted in every accounting period is recognized in the actual rate method. The effective interest method is the method for the measurement of the diluted discount or premium or interest expenses on the actual interest rate; and the actual interest rate is the interest rate used in the discount of the future cash flow in the expectant duration period as the current book value of the borrowing. 19. Biological assets 20. Oil-and-gas assets 21. Intangible assets (1) Accounting method, service life and impairment test 1) Accounting method for intangible assets The Company’s intangible assets are measured initially on cost. The intangible assets purchased in are taken as the actual cost on the actual payment and relevant expenditure. As for the intangible assets invested in by the investors, the actual cost is recognized on the value stipulated in the contract or agreement; however, if what is stipulated in the contract or agreement is not fair value, the actual cost is recognized on fair value. As for the self-developed intangible assets, their cost is the actual total expenditure before reaching the expectant purpose. The follow-up measurements of the Company’s intangible assets respectively are: the line amortization method is taken on the intangible assets of finite service life, and at the yea-end, the check is taken on the service life and dilution of the intangible assets, and the corresponding adjustment is made if there is inconsistency with the previous estimative ones. As for the intangible assets of uncertain service life, it is not diluted, however, the service life is checked at year-end; If there is solid evidence to its finite service life, its service life is estimated and diluted in straight line method. 2) Recognition principle of intangible assets with uncertain service life Recognized as the intangible assets of uncertain service life is refers to those intangible assets of un-expectable period of economic benefits brought into the Company, or of the uncertain service period. Recognition principle 65 山东省中鲁远洋渔业股份有限公司 2017 年半年度报告全文 of uncertain service life: from contract right or other legal rights, the uncertain service period is stipulated in the contract or law; after the integration of the situations and relevant expertise argumentation in the same trade, the period of the economic interest brought into the Company by the intangible assets still cannot be recognized. At every year-end, the check is taken on the intangible assets of uncertain service life, mainly in bottom-up way, namely the basic check is taken by the department relevant to the assets utilization, to assess whether there is change in the recognition principle of the uncertain service life. (2) Accounting policy of the internal R&D expenditure 22. Long-term investment impairment Long-term equity investments, investment properties measured at cost and long-term assets such as fixed assets, construction in progress, productive biological assets at cost method, oil and gas assets, intangible assets and goodwill are tested for impairment if there is any indication that an asset may be impaired at the balance date. If the result of the impairment test indicates that the recoverable amount of the asset is less than its carrying amount, a provision for impairment and an impairment loss are recognized for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and the present value of the future cash flows expected to be derived from the asset. Provision for asset impairment is determined and recognized on the individual asset basis. If it is not possible to estimate the recoverable amount of an individual asset, the recoverable amount of a group of assets to which the asset belongs is determined. A group of assets is the smallest group of assets that is able to generate independent cash inflows. Goodwill arising from a business combination is tested for impairment at least at each year end, irrespective of whether there is any indication that the asset may be impaired. For the purpose of impairment testing, the carrying amount of goodwill acquired in a business combination is allocated from the acquisition date on a reasonable basis to each of the related asset groups; if it is impossible to allocate to the related asset groups, it is allocated to each of the related set of asset groups. If the carrying amount of the asset group or set of asset groups is higher than its recoverable amount, the amount of the impairment loss first reduced by the carrying amount of the goodwill allocated to the asset group or set of asset groups, and then the carrying amount of other assets (other than the goodwill) within the asset group or set of asset groups, pro rata based on the carrying amount of each asset. Once the impairment loss of such assets is recognized, it is not be reversed in any subsequent period. 23. Long-term deferred expenditure The Company’s long-term deferred expenditure are expenses paid out and with one year above (1-year included) benefit period. The long-term unamortized expenses are diluted by periods according to the benefit period. As the long-term unamortized expenses cannot enable the accounting period’s beneficiary, all dilution values of the project undiluted yet, are transferred into the current loss/gain. 66 山东省中鲁远洋渔业股份有限公司 2017 年半年度报告全文 24. Employees benefits (1) Accounting for short-term benefits In the period of employee services, short-term benefits are actually recognized as liabilities and charged to profit or loss, or if otherwise required or allowed by other accounting standards, to the related costs of assets for the current period. At the time of actual occurrence, The Company’s employee benefits are recorded into the profits and losses of the current year or assets associated costs according to the actual amount. The non-monetary employee benefits are measured at fair value. Regarding to the medical and health insurance, industrial injury insurance, maternity insurance and other social insurances, housing fund and labor union expenditure and personnel education that the Company paid for employees, the Company should recognize corresponding employees benefits payable according to the appropriation basis and proportion as stipulated by relevant requirements and recognize the corresponding liabilities and include these expenses in the profits or losses of the current period or recognized as respective assets costs. (2) Accounting for post-employment benefits During the accounting period in which an employee provides service, the amount payable calculated under defined contribution scheme shall be recognized as a liability and recorded in profit and loss of the current period or in assets. In respect of the defined benefit scheme, the Company shall use the projected unit credit method and attribute the welfare obligations calculated using the formula stipulated by the defined benefit scheme to the service period of the employee, and record the obligation in the current profit and loss or related assets cost. (3) Accounting for termination benefits The Company recognizes a liability and expenses in the current profit or loss for termination benefits at the earlier of the following dates: when the Company can no longer withdraw the offer of those benefits; and when the Company recognizes costs for restructuring involving the payment of termination costs. (4) Accounting for other long-term employee benefits. The Company provides other long-term employee benefits to its employees. For those falling within the scope of defined contribution scheme, the Company shall account for them according to relevant requirements of the defined contribution scheme. In addition, the Company recognizes and measures the net liabilities or net assets of the other long-term employee benefits according to relevant requirements of the defined contribution scheme. 25. Accrual liability 26. Share-based payment 27. Other financial instrument of preferred stock and perpetual capital securities 28. Revenue Whether the company needs to comply with the disclosure requirements of the particular industry 67 山东省中鲁远洋渔业股份有限公司 2017 年半年度报告全文 No (1) Sales of goods The Company shall ascertain the revenue incurred by selling goods in accordance with the received or receivable price stipulated in the contract or agreement signed between the enterprise and the buyer unless the following conditions are met simultaneously: ① the significant risks and rewards of ownership of the goods have been transferred to the buyer by the enterprise; ② the enterprise retains neither continuous management right that usually keeps relation with the ownership nor effective control over the sold goods; ③the relevant amount of revenue can be measured in a reliable way; ④ relevant economic benefits may flow into the enterprise and ⑤ the relevant costs incurred or to be incurred can be measured in a reliable way. The Company mainly conducts seine fisheries sales on sea. In detail, our production vessel directly unloads fisheries products to the shipping vessel of purchaser. Upon delivery of such products to shipping vessel, parties from both production vessel and shipping vessel would confirm the unloaded quantity and issue delivery bill (both parties sign ship receipt); finance department would confirm sales revenue based on ship receipt and sales contract. Fisheries products gained from long line fishing by the Company are all shipped back to domestic market for sale. Our sales department makes external sales by reference to the trading price in Qingshui of Japan. Change in ownership of cargos is based on sales contract and value determination table. Finance department would confirm sales revenue based on sales contract and value determination table. The Company processes aquatic products for domestic sales: Shandong Zhonglu Oceanic (Yantai) Food Co., Ltd. issues delivery confirmation according to the fax or email orders from domestic customers, then sales staff would arrange warehouse department to prepare stock and deliver cargos via airline and long trip auto transportation. Finance department will issue sales invoice according to the delivery bill issued by sales department and signed and confirmed by warehouse department, and confirm sales revenue. The Company processes aquatic products for overseas sales: once receipt purchase orders from overseas customers, our international trade department will issue export delivery confirmation and arrange warehouse department to prepare relevant orders. Once the cargos to be exported is packed and delivered, warehouse department will sign on the delivery bill issued by international trade department to confirm. Upon completion of export by unloading cargos on vessels, we will obtain packing slip, delivery order and other export bills issued by the transportation department and also bill of clearance from custom. Finance department will issued sales invoice and confirm sales revenue based on delivery bill, packing slip, bill of clearance, etc. (2) Labor service providing If an enterprise can, on the date of the balance sheet, reliably estimate the outcome of a transaction concerning the labor services it provides, it shall recognize the revenue from providing services employing the percentage-of-completion method. The enterprise can ascertain the schedule of completion (percentage-of-completion) under the transaction concerning the providing of labor services based on calculation of completed works, if an enterprise can not, on the date of the balance sheet, measure the result of a transaction concerning the providing of labor service in a reliable way, it shall be conducted in accordance with the following circumstances, respectively: ①if the cost of labor services incurred is expected to be compensated, the revenue 68 山东省中鲁远洋渔业股份有限公司 2017 年半年度报告全文 from the providing of labor services shall be recognized in accordance with the amount of the cost of labor services incurred, and the cost of labor services shall be carried forward at the same amount; ②if the cost of labor services incurred is not expected to compensate, the cost incurred should be included in the current profits and losses, and no revenue from the providing of labor services may be recognized. (3) Transition of asset use right When economic benefits relating to transition of asset use right is likely to inflow into the Company and the relevant income can be measured reliably, the Company shall recognize such income from transition of asset use right. The Company's vessel rental income: the transport vessel leases of Shandong Zhonglu Aquatic Shipping Co., Ltd. and Habitat International Corporation adopt the time charter, the company leases the ships equipped with operators to others for a certain period of time, and waits for the dispatch and assignment of the leasee during the lease period, and charges the rental fee from the leasee according to the number of days whether the leasee operates or not, and the company takes charge of the fixed charges (such as the staff salary, maintenance costs, etc.). During the lease period, the company settles accounts with the customer per 15 days and confirms the incomes according to the lease days confirmed with the customer. 29. Government subsidy (1) Determination basis and accounting treatment for government grants related to assets Government grant obtained by the Company for the purpose of constructing or otherwise forming long term assets is recognized as government grant related to assets which will be recognized as deferred income. Deferred income is averagely allocated against the estimated service life of asset since the asset is available for use, and recorded in profit or loss for the current period. (2) Determination basis and accounting treatment for government grants related to income The government grants other than the government grants related to assets are recognized as government grants related to income. Government grants related to income shall be treated as follows: those used to compensate relevant expenses or losses to be incurred by the enterprise in subsequent periods are recognized as deferred income and recorded in profit and loss for the current period when such expenses are recognized; and those used to compensate relevant expenses or losses that have been incurred by the enterprise are recorded directly in profit or loss for the current period. 30. Deferred income tax asset and deferred income tax liability (1) Where there is difference between the carrying amount of the assets or liabilities and its tax base, (as for an item that has not been recognized as an asset or liability, if its tax base can be determined in light of the tax law, the tax base shall recognized as the difference) the deferred income tax and deferred income tax liabilities shall be determined according to the applicable tax rate in period of assets expected to recover or liability expected to pay off. 69 山东省中鲁远洋渔业股份有限公司 2017 年半年度报告全文 (2) The deferred income tax assets shall be recognized to the extent of the amount of the taxable income which it is most likely to obtain and which can be deducted from the deductible temporary difference. On balance sheet date, if there have concrete evidence of obtaining, in future period, enough taxable amounts to deduct the deductible temporary difference, the un-confirmed deferred income tax assts in previous accounting period shall be recognized. If there has no enough taxable amounts, obtained in future period, to deducted the deferred income tax assets, book value of the deferred income tax assets shall be kept in decreased. (3) The taxable temporary differences related to the investments of subsidiary companies and associated enterprises shall recognized as deferred income tax liability, unless the Company can control the time of the reverse of temporary differences and the temporary differences are unlikely to be reversed in the expected future. As for the deductible temporary difference related to the investment of the subsidiary companies and associated enterprises, deferred income tax assets shall be recognized while the temporary differences are likely to be reversed in the expected future and it is likely to acquire any amount of taxable income tax that may be used for making up the deductible temporary differences. 31. Leasing (1) Accounting treatment for operating lease Operating lease payments are recognized on a straight-line basis over the term of the relevant lease, and are either included in the cost of related asset or charged to profit or loss for the period. (2) Accounting treatment for finance lease At the commencement of the lease term, the Group records the leased asset at an amount equal to the lower of the fair value of the leased asset and the present value of the minimum lease payments. The difference between the recorded amounts is accounted for as unrecognized finance charge, using the effective interest method amortization during the lease term. Minimum lease payments deducting unrecognized financing charges are listed as long-term payables. 32. Other important accounting policy and estimation Nil 33. Changes in important accounting policies and estimates (1) Changes in important accounting policies □ Applicable √ Not applicable (2) Changes in important accounting estimates □ Applicable √ Not applicable 70 山东省中鲁远洋渔业股份有限公司 2017 年半年度报告全文 34. Other Nil VI. Taxes 1. Major tax and tax rate Taxes Taxation basis Tax rate VAT Output tax minor the deductible input tax 17%、13%、11%、6% Urban maintenance and construction tax Turnover taxes payable 7% Corporate income ax Taxable amount 25% Explain the different taxation entity of the enterprise income tax Taxation entity Income tax rate Shandong Zhonglu Oceanic Fisheries Company Limited Imposing no tax on distant fishing, and 25% for the house leasing Shandong Zhonglu Haiyan Oceanic Co., Ltd. Exemption HABITAT INTERNATIONAL CORPORATION Exemption Shandong Zhonglu Fishery Shipping Co., Ltd. 25% Shandong Zhonglu Oceanic (Yantai) Foods Co., Ltd. Imposing no tax on aquatic product processing 2. Preferential tax (1)VAT tax preference: According to the relevant provisions of the Circular About the Provisional Management Method of Not Levying the Tax on the Aquatic Products Directly Caught by Ocean Fishery Enterprises (SS No. [2000] 260), China's ocean fishery enterprises stipulate on the high seas or in accordance with the relevant agreements that the aquatic products caught in foreign sea areas and sent back for domestic sales should be regarded as the domestic products and should not be levied the import duties and import VAT. If the corresponding domestic sales business is the primary agricultural products sales, exempt from the VAT according to the provisions of VAT rules. The Company's sales revenue from ocean-going fishing operations is exempt from VAT. (2) Income tax preference: According to the Circular of the Preferential Policies Concerning Corporate Income Tax (CSZ No.[1994]001), the Letter About Relevant Issue About Accelerating the Development of China's Ocean Fisheries (CN No. [2000] 104) of the Ministry of Finance, the Enterprise Income Tax Law of the People's Republic of China (PRC Presidential Decree No. [2007] 63), the Enforcement Regulations of Enterprise Income Tax Law of the People's Republic of China (PRC State Council Decree No. 512), Notice About Issuing the Preliminary Processing Scope (Trial) of Agricultural Products that Enjoy the Preferential Policy of Enterprise Income Tax of Ministry of Finance and State Administration of Taxation (CS No. [2008]149), and the Supplement Notice About the Preliminary Processing Scope of Agricultural Products that Enjoy the Preferential Policy of Enterprise Income Tax of Ministry of Finance and State Administration of Taxation (CS No. [2011] 26), the processing charges for the preliminary processing of agricultural products can be handled by the tax-exempt items of preliminary processing of agricultural products. The Company's income obtained from the ocean-going fishing business and the preliminary processing of agricultural products is exempted from corporate income tax. The Company's income obtained from the business except for the ocean-going fishing and the preliminary processing of agricultural products should pay the enterprise income tax at 25%. 71 山东省中鲁远洋渔业股份有限公司 2017 年半年度报告全文 3. Other VII. Notes to main items in consolidated financial statement 1. Monetary fund In RMB Item Closing balance Opening balance Cash on hand 2,768,761.41 1,741,848.59 Bank deposit 99,561,338.48 126,995,290.36 Other monetary fund 554,393.58 784,064.34 Total 102,884,493.47 129,521,203.29 Including: Total amount save aboard 393,805.29 506,231.81 Other explanation 2. Financial assets measured by fair value and with its variation reckoned into current gains/losses In RMB Item Closing balance Opening balance Other explanation: 3. Derivative financial assets □ Applicable √ Not applicable 4. Note receivable (1) Category In RMB Item Closing balance Opening balance (2) Note receivable pledged at period-end In RMB Item Amount pledged (3) Note receivable which have endorsed and discount at period-end and has not expired on balance sheet date In RMB 72 山东省中鲁远洋渔业股份有限公司 2017 年半年度报告全文 Item De-reorganization amount at period-end Un de-reorganization amount at period-end (4) Note transferred to account receivable due to the drawer failure to perform at period-end In RMB Item Amount transferred to account receivable at period-end Other explanation 5. Account receivable (1) Category of account receivable In RMB Closing balance Opening balance Book balance Bad debt provision Book balance Bad debt provision Category Book Proportio Accrual Proportio Accrual Book value Amount Amount value Amount Amount n ratio n ratio Account receivable with bad debt 49,884,6 8,060,72 41,823,92 50,739, 8,060,723 42,679,066. 100.00% 16.16% 100.00% 15.89% provision accrual by 48.45 3.09 5.36 789.74 .09 65 portfolio 49,884,6 8,060,72 41,823,92 50,739, 8,060,723 42,679,066. Total 100.00% 100.00% 15.89% 48.45 3.09 5.36 789.74 .09 65 Account receivable with major single amount and withdrawal bad debt provision single at period-end: □ Applicable √ Not applicable Account receivable with bad debt provision withdrawal by method of account age in portfolio: √ Applicable □ Not applicable In RMB Closing balance Account age Account receivable Bad debt provision Accrual ratio Sub-item of within one year 1-6 months 43,040,072.80 2,035,596.75 5.00% Subtotal of within one year 43,040,072.80 2,035,596.75 5.00% 1-2 years 1,155,557.64 329,333.93 30.00% 2-3 years 13,548.80 6,774.40 50.00% Over three years 5,689,018.01 5,689,018.01 100.00% Total 49,884,648.45 8,060,723.09 Explanation on portfolio basis: 73 山东省中鲁远洋渔业股份有限公司 2017 年半年度报告全文 Withdrawing bad bed provision by percentage of total accounts receivable outstanding in portfolio: □ Applicable √ Not applicable Withdrawing bad bed provision by other methods in portfolio: (2) Bad debt provision accrual, switch-back or taken back in the period Amount accrual in the Period; amount switch-back or taken back in the Period Including major amount of bad debt provision that switch-back or taken back in the Period: In RMB Company Amount switch back or taken back Way (3) Account receivables actually written-off during the reporting period In RMB Item Amount verified Including major account receivables written-off: In RMB Occurred due to Company Nature Amount verified Reasons Verified procedures related transaction (Y/N) Explanation on account receivable written-off (4) Top five receivables collected by arrears party at ending balance Company Ending balance Ratio in total account Bad debt provision receivable (%) balance Hong Kong Luen 7,455,254.79 15.04% 372762.74 Thai Seafood Taiwan Herpao 4,151,594.33 8.37% 207579.72 Ameican H&T 2,641,015.78 5.33% 132050.79 SEAFOOD INC Taiwan Sip 1,952,944.25 3.94% 97647.21 Japan Wiki 1,553,477.46 3.13% 77673.87 Total 17,754,286.61 35.81% 887714.33 (5) Account receivables derecognized due to financial assets transfer (6) Transfer the account receivable and assets & liabilities arising from further involvement Other explanation: 74 山东省中鲁远洋渔业股份有限公司 2017 年半年度报告全文 6. Prepayments (1) Prepayments listed by account age In RMB Closing balance Opening balance Account age Amount Proportion Amount Proportion Within one year 9,416,627.12 100.00% 7,773,914.94 99.82% 1-2 years 13,688.46 0.18% Total 9,416,627.12 -- 7,787,603.40 -- Explanation on prepayments with over one year in age and reasons of un-settle: (2) Top 5 prepayments collected by objects at ending balance Company Relationship with Ending balance Ratio in total prepayment % theCompany Liye International Agency 5,599,893.70 12.66% Company Dongyi Sea Supplier 1,968,557.18 4.45% Transporation Personal Company Inspur Service provider 470,000.00 1.06% Fishing license of Access fishing fee 317,528.42 0.72% Ivory Coast Rental of new Leasehold relation 235,085.76 0.53% house(10 Block) Total 8,591,065.06 19.42% Other explanation: 7. Interest receivable (1) Category In RMB Item Closing balance Opening balance (2) Major overdue interest Whether has impairment Borrower Closing balance Overdue time Causes occurred and determination basis 75 山东省中鲁远洋渔业股份有限公司 2017 年半年度报告全文 Other explanation: 8. Dividend receivable (1) Dividend receivable In RMB Item (or invested company) Closing balance Opening balance (2) Major dividend receivable with over one year aged In RMB Whether has impairment Item (or invested Closing balance Age Causes 未收回的原因 occurred and company) determination basis Other explanation: 9. Other account receivable (1) Category of other account receivable In RMB Closing balance Opening balance Book balance Bad debt provision Book balance Bad debt provision Category Book Proportio Accrual Proportio Accrual Book value Amount Amount value Amount Amount n ratio n ratio Other account receivable with bad 11,526,4 4,569,22 6,957,211 13,943, 4,558,806 9,384,672.1 100.00% 39.64% 100.00% 32.69% debt provision 34.77 3.50 .27 479.12 .96 6 accrual by portfolio Other account receivable with single minor amount 0.00 but withdrawal bad debt provision singly 11,526,4 4,569,22 6,957,211 13,943, 4,558,806 9,384,672.1 Total 100.00% 39.64% 100.00% 32.69% 34.77 3.50 .27 479.12 .96 6 Other account receivable with major single amount and withdrawal bad debt provision single at period-end: □ Applicable √ Not applicable Other account receivable with bad debt provision withdrawal by method of account age in portfolio: √ Applicable □ Not applicable 76 山东省中鲁远洋渔业股份有限公司 2017 年半年度报告全文 In RMB Closing balance Account age Other account receivable Bad debt provision Accrual ratio Sub-item of within one year 1-6 months 1,629,006.63 81,727.11 5.00% 6-12 months 873,686.24 87,368.62 10.00% Subtotal of within one year 2,502,692.87 169,095.74 1-2 years 268,126.14 80,437.84 30.00% 2-3 years 150,669.20 75,334.60 50.00% Over three years 4,244,355.32 4,244,355.32 100.00% Total 7,165,843.53 4,569,223.50 Explanation on portfolio basis: Withdrawing bad bed provision by percentage of total other accounts receivable outstanding in portfolio □ Applicable √ Not applicable Withdrawing bad bed provision by other methods in portfolio: √ Applicable □ Not applicable Portfolio Ending amount Opening amount Book balance Accrual Bad debt Book balance Accrual ratio Bad debt ratio provision % provision % Shandong Maritime Bureau 1,000,000.00 1,000,000.00 Star of Afica Co., Ltd. 3,360,591.24 3,360,591.24 Total 4,360,591.24 4,360,591.24 (2) Bad debt provision accrual, switch-back or taken back in reporting period Amount RMB 10,416.54 accrual in the Period; amount switch-back or taken back in the Period. Including major amount of bad debt provision that switch-back or taken back in the Period: In RMB Company Amount switch-back or taken back Way (3) Other receivables actually written-off during the reporting period In RMB Item Amount verified Including major other account receivables written-off: In RMB 77 山东省中鲁远洋渔业股份有限公司 2017 年半年度报告全文 Occurred due to Company Nature Amount verified Reasons Verified procedures related transaction (Y/N) Explanation on write-off of other receivables: (4) Classify according to nature In RMB Nature Ending book balance Opening book balance Margin 1,100,520.00 1,021,836.03 Insurance claims payment receivable 252,832.54 220,450.00 Receivable export refund tax 5,593,057.42 Transactions and others 10,173,082.23 7,108,135.67 Total 11,526,434.77 13,943,479.12 (5) Top 5 other receivables collected by arrears party at ending balance In RMB Proportion in total Ending balance of Company Nature Ending balance Account age other receivables at bad debt provision period-end Shandong Marine Margin 1,000,000.00 Over three years 8.68% Affairs Bureau Daihatsu Intercourse funds 288,896.39 Over three years 2.51% 288,896.39 Insurance company Insurance 252,832.54 0-6 months 2.19% 31,949.88 DIVING SEAGULL Intercourse funds 207,072.50 Over three years 1.80% 207,072.50 Qingdao Branch of Deposit for rental 200,000.00 0-6 months 1.74% CMB Total -- 1,948,801.43 -- 16.92% 527,918.77 (6)Account receivable involved government subsidies In RMB Time, amount and basis Company Government subsidies Ending balance Ending account age estimated to received 78 山东省中鲁远洋渔业股份有限公司 2017 年半年度报告全文 (7) Other account receivables derecognized due to financial assets transfer (8) Transfer the other account receivable and assets & liabilities arising from further involvement Other explanation: 10. Inventory Whether the company needs to comply with the disclosure requirements of the particular industry No (1) Category of inventory In RMB Closing balance Opening balance Item Provision for Provision for Book balance Book value Book balance Book value price fall-down price fall-down Raw materials 128,752,757.23 32,811.83 128,719,945.40 71,541,108.42 32,811.83 71,508,296.59 Inventory 82,355,688.25 522,823.51 81,832,864.74 84,023,702.28 2,472,715.03 81,550,987.25 Revolving 864,431.93 864,431.93 763,206.04 763,206.04 material Low value 445,453.17 445,453.17 813,924.17 813,924.17 consumables Total 212,418,330.58 555,635.34 211,862,695.24 157,141,940.91 2,505,526.86 154,636,414.05 Does the Company comply with the disclosure requirement of “Information Disclosure Guidelines of Shenzhen Stock Exchange No.4 – Listed Companies Engaged in Seed Industry and Planting Business” or not No (2) Provision for price fall-down In RMB Current increased Current decreased Items Opening balance Switch back or Closing balance Accrual Other Other Written-off Raw materials 32,811.83 32,811.83 Inventory 2,472,715.03 1,949,891.52 522,823.51 Total 2,505,526.86 1,949,891.52 555,635.34 Switch back of the provision for price fall-down refers to the sals of inventory 79 山东省中鲁远洋渔业股份有限公司 2017 年半年度报告全文 (3) Explanation on capitalization of borrowing costs in ending balance of inventory (4) Assets completed without settle resulted by construction contract at period-end In RMB Items Amount Other explanation: 11. Classified as assets held for sale In RMB Expected disposal Item Ending book value Fair value Expected disposal time expenses Other explanation: 12. Non-current assets due within one year In RMB Item Closing balance Opening balance Other explanation: 13. Other current assets In RMB Items Closing balance Opening balance Taxable VAT paid at period-end 33,136,423.87 23,616,544.28 Income tax prepaid 88,480.55 88,480.55 Other tax prepaid 43,924.48 43,924.48 Total 33,268,828.90 23,748,949.31 Other explanation: 14. Finance asset available for sales (1) Finance asset available for sales In RMB Closing balance Opening balance Items Impairment Impairment Book balance Book value Book balance Book value provision provision Equity instrument available 33,000,000.00 33,000,000.00 33,000,000.00 33,000,000.00 80 山东省中鲁远洋渔业股份有限公司 2017 年半年度报告全文 for sales: Measured by cost 33,000,000.00 33,000,000.00 33,000,000.00 33,000,000.00 Total 33,000,000.00 33,000,000.00 33,000,000.00 33,000,000.00 (2) Finance asset available for sales measured by fair value at period-end In RMB Equity instrument Debt instrument Category Total available for sale available for sale (3) Finance asset available for sales measured by cost at period-end In RMB Book balance Impairment provision Cash Invested Holding dividend Period-beg Increase in Decrease Period-beg Increase in Decrease proportion in Unit in the Period-end in the Period-end invested unit for the in the period in the period period period period Equity investment 33,000,000 33,000,000 33,000,000 33,000,000 - South 0.87% .00 .00 .00 .00 Securities Co., Ltd. 33,000,000 33,000,000 33,000,000 33,000,000 Total -- .00 .00 .00 .00 (4) Impairment reserve of finance asset available for sales In RMB Equity instrument Debt instrument Category Total available for sale available for sale (5) Explanation on closing fair value of equity instrument available for sale which was down sharply or other-than-temporary drop without accrual the impairment provision In RMB Decline changes Time to drop Accrual Equity instrument of fair value Reasons without Investment cost Ending fair value continuously impairment available for sale comparing with accrual (month) amount its costs Other explanation 81 山东省中鲁远洋渔业股份有限公司 2017 年半年度报告全文 15. Held-to-maturity investment (1) Held-to-maturity investment In RMB Closing balance Opening balance Item Impairment Impairment Book balance Book value Book balance Book value provision provision (2) Major held-to-maturity investment at Period-end In RMB Bond Face value Coupon rate Real interest rates Maturity date (3) Re-classified as held-to-maturity investment in the period Other explanation 16. Long-term account receivable (1) Long-term account receivable In RMB Closing balance Opening balance Discount rate Item Bad debt Bad debt Book balance Book value Book balance Book value interval provision provision (2) Long-term account receivable derecognition due to financial assets transfer (3) Assets and liabilities resulted by long-term account receivable transfer and continues involvement Other explanation 17. Long-term equity investment In RMB +,- Ending Investme Other Cash balance The Additiona Opening nt gains comprehe Other dividend Closing of invested l Capital Impairme balance recognize nsive equity or profit Other balance impairme entity investmen reduction nt accrual d under income change announce nt t equity adjustmen d to provision 82 山东省中鲁远洋渔业股份有限公司 2017 年半年度报告全文 t issued I. Joint venture II. Associated enterprise Other explanation 18. Investment real estate (1) Investment real estate measured at cost √ Applicable □ Not applicable In RMB Item House and building Land use right Construction in process Total I. Original book value 1.Opening balance 47,120,794.80 47,120,794.80 2.Current increased 581,176.39 581,176.39 (1) Outsourcing (2) Inventory\fixed assets\construction in process transfer-in (3) Increased by combination (4) Increase of 581,176.39 581,176.39 office building lease 3.Current decreased (1) Disposal (2) Other transfer-out 4.Closing balance 47,701,971.19 47,701,971.19 II. Accumulated depreciation and accumulated amortization 1.Opening balance 13,895,890.56 13,895,890.56 2.Current increased 610,265.32 610,265.32 (1) Accrual or 610,265.32 610,265.32 amortization 83 山东省中鲁远洋渔业股份有限公司 2017 年半年度报告全文 3.Current decreased (1) Disposal (2) Other transfer-out 4.Closing balance 14,506,155.88 14,506,155.88 III. Depreciation reserves 1.Opening balance 886,512.06 886,512.06 2.Current increased (1) Accrual 3. Current decreased (1) Disposal (2) Other transfer-out 4.Closing balance 886,512.06 886,512.06 IV. Book value 1. Ending Book 32,309,303.25 32,309,303.25 value 2. Opening Book 32,338,392.18 32,338,392.18 value (2) Investment real estate measure on fair value □ Applicable √ Not applicable (3) Investment real estate without property certificate completed In RMB Items Book value Reasons Other explanation 19. Fixed assets (1) Fixed assets In RMB 84 山东省中鲁远洋渔业股份有限公司 2017 年半年度报告全文 House and Vessel and netting Machine Transportation Furniture and Items Total building gear equipment equipment office equipment I. Original book value: 1.Opening 117,457,596.34 459,879,579.56 40,577,242.13 7,142,397.05 11,139,890.83 636,196,705.91 balance 2.Current 48,117.95 462,580.33 510,698.28 increased (1) 48,117.95 462,580.33 510,698.28 Purchasing (2) Construction in progress transfer-in (3) Increased by combination 3.Current 714,141.41 162,533.11 773,766.52 98,457.84 1,748,898.88 decreased (1) Disposal 714,141.41 162,533.11 773,766.52 98,457.84 1,748,898.88 or scrapping 4.Closing 116,743,454.93 459,717,046.50 40,625,360.08 6,368,630.53 11,504,013.32 634,958,505.31 balance II. Accumulative depreciation 1.Opening 22,569,125.34 169,453,741.31 15,716,521.23 4,991,762.41 7,624,492.26 220,355,642.55 balance 2.Current 4,468,238.17 12,383,378.93 1,019,260.03 214,124.64 385,397.55 18,470,399.32 increased (1) Accrual 4,468,238.17 12,383,378.93 1,019,260.03 214,124.64 385,397.55 18,470,399.32 3.Current 2,742,410.40 764.56 738,376.01 94,326.10 3,575,877.07 decreased (1) Disposal 2,742,410.40 764.56 738,376.01 94,326.10 3,575,877.07 or scrapping 4.Closing 24,294,953.11 181,837,120.20 16,735,016.70 4,467,511.04 7,915,563.71 235,250,164.80 85 山东省中鲁远洋渔业股份有限公司 2017 年半年度报告全文 balance III. Depreciation reserves 1.Opening 157,573.50 157,573.50 balance 2.Current increased (1) Accrual 3.Current decreased (1) Disposal or scrapping 4.Closing 157,573.50 157,573.50 balance IV. Book value 1. Ending 92,448,501.82 277,879,926.20 23,890,343.38 1,901,119.49 3,588,449.61 399,550,767.01 Book value 2. Opening 94,888,471.00 290,268,264.75 24,860,720.90 2,150,634.64 3,515,398.57 415,683,489.86 Book value (2) Temporary idle fixed assets In RMB Depreciation Impairment Items Original book value Book value Note accumulative provision (3) Fixed assets leasing-in by financing lease In RMB Depreciation Items Original book value Impairment provision Book value accumulative (4) Fixed assets leasing-out by operational lease In RMB Items Ending book value 86 山东省中鲁远洋渔业股份有限公司 2017 年半年度报告全文 (5) Fixed assets without property certificate obtained In RMB Items Book value Reasons for certificate un-settled Other explanation Pursuant to the Debt Compensation Opinion entered into between the Company and Shandong Aquatic Products Group in April 2006 and the civil verdict issued by People Court of Lixia district of Jinan city (2005 LZZDi-1299), the comprehensive office building owned by Shandong Aquatic Products Group at No.43, Heping road, Lixia District, Jinan with original value of RMB54,221,197.05 (among which, RMB9,592,434.61 was recorded as fixed assets and others were recorded as investment property) was ruled to be vested to the Company, so as to compensate the relevant debts. Building ownership transfer has not been registered yet; management of the Company is in the process of making active coordination among various parties seeking for early completion of such registration. 20. Construction in progress (1) Construction in progress In RMB Closing balance Opening balance Items Impairment Impairment Book balance Book value Book balance Book value provision provision Purchased the 148,802,737.13 148,802,737.13 tuna purse seiner Atlantic fencing 4,066,989.68 4,066,989.68 4,066,989.68 4,066,989.68 Total 152,869,726.81 152,869,726.81 4,066,989.68 4,066,989.68 (2) Changes of major project in progress In RMB Accumul Proporti Includin ative on of g: Transfer Other amount Opening Current Ending project Work interest Capitaliz Capital Item Budget to fixed decreasin of balance increased balance investme progress capitaliz ing rate resources assets g interest nt in ation in capitaliz budget Period ation Purchase Loan d the 153,180, 148,802, 148,802, from tuna 97.14% 000.00 737.13 737.13 financial purse organ seiner 87 山东省中鲁远洋渔业股份有限公司 2017 年半年度报告全文 153,180, 148,802, 148,802, Total -- -- -- 000.00 737.13 737.13 (3) Impairment provision of construction in process accrual in the Period In RMB Items Accrual amount Reasons Other explanation 21. Engineering material In RMB Items Closing balance Opening balance Other explanation: 22. Disposal of fixed assets In RMB Items Closing balance Opening balance Disposal of transportation equipment -15,678.87 Total -15,678.87 Other explanation: 23. Productive biological assets (1) Measured by cost □ Applicable √ Not applicable (2) Measured by fair value □ Applicable √ Not applicable 24. Oil/gas assets □ Applicable √ Not applicable 25. Intangible assets (1) Intangible assets In RMB Items Land use right Patent right Non-patented Computer software Total 88 山东省中鲁远洋渔业股份有限公司 2017 年半年度报告全文 technology I. Original book value 1.Opening 17,154,729.00 197,000.00 17,351,729.00 balance 2.Current 4,512.82 4,512.82 increased (1) Purchasing (2) Internal R&D (3) Increased by combination 3.Current decreased (1) Disposal 4.Closing 17,154,729.00 201,512.82 17,356,241.82 balance II. Accumulated amortization 1.Opening 4,069,902.17 174,433.26 4,244,335.43 balance 2.Current 191,935.08 3,875.19 195,810.27 increased (1) Accrual 3,875.19 3,875.19 3.Current decreased (1) Disposal 4.Closing 4,261,837.25 178,308.45 4,440,145.70 balance III. Depreciation reserves 1.Opening balance 89 山东省中鲁远洋渔业股份有限公司 2017 年半年度报告全文 2.Current increased (1) Accrual 3.Current decreased (1) disposal 4.Closing balance IV. Book value 1. Ending Book 12,892,891.75 23,204.37 12,916,096.12 value 2. Opening 13,084,826.83 22,566.74 13,107,393.57 Book value The proportion of intangible assets form by internal R&D in total book value of intangible assets at period-end. (2) Land use right without property certificate completed In RMB Items Book value Reasons Other explanation: 26. Development expenses In RMB Opening Closing Items Current increased Current decreased balance balance Other explanation 27. Goodwill (1) Original book value of goodwill In RMB The invested entity of events Opening balance Increase during the period Decrease during this period Closing balance with goodwill resulted 90 山东省中鲁远洋渔业股份有限公司 2017 年半年度报告全文 (2) Impairment provision of goodwill In RMB The invested entity of events Opening balance Increase during the period Decrease during this period Closing balance with goodwill resulted Explain the impairment testing, parameter and recognition method of the impairment losses of goodwill: Other explanation 28. Long-term deferred expenditure In RMB Items Opening balance Current increased Amortized in Period Other decreased Closing balance Amortization of 0.00 622,977.35 622,977.35 decoration in HQ Total 622,977.35 622,977.35 Other explanation 29. Deferred income tax asset /deferred income tax liability (1) Deferred income tax assets un-offset In RMB Closing balance Opening balance Items Deductible temporary Deferred income tax Deductible temporary Deferred income tax differences asset differences asset (2) Deferred income tax liabilities un-offset In RMB Closing balance Opening balance Items Taxable temporary Deferred income tax Taxable temporary Deferred income tax differences liability differences liability (3) Amount of deferred income tax asset and deferred income tax liability after trade-off In RMB Trade-off between the Ending balance of Trade-off between the Opening balance of Items deferred income tax deferred income tax deferred income tax deferred income tax assets and liabilities assets or liabilities after assets and liabilities at assets or liabilities after 91 山东省中鲁远洋渔业股份有限公司 2017 年半年度报告全文 off-set period-begin off-set (4) Deferred income tax asset without confirmed In RMB Items Closing balance Opening balance (5) Deductible losses of deferred income tax asset without confirmed will expired in later year In RMB Year Closing amount Opening amount Note Other explanation: 30. Other non-current assets In RMB Items Closing balance Opening balance INSPUR 285,524.92 285,524.92 Land prepayment for phase II of Zhonglu 2,000,000.00 2,000,000.00 Refrigeration Total 2,285,524.92 2,285,524.92 Other explanation: 31. Short-term borrowing (1) Category of short-term borrowing In RMB Items Closing balance Opening balance Mortgage loan 41,832,687.84 28,000,000.00 Guaranteed loan 100,000,000.00 Credit loan 26,833,678.77 26,961,454.59 Total 168,666,366.61 54,961,454.59 Explanation on category of short-term borrowing: (2) Short-term loans un-paid by expired Total short-term loans un-paid by expired at end of the Period was 0 Yuan, including important short-term loans are as: In RMB Unit Ending balance Loans rate Overdue time Overdue interest rate Other explanation: 92 山东省中鲁远洋渔业股份有限公司 2017 年半年度报告全文 32. Financial liability measured by fair value and with its variation reckoned into current gains/losses In RMB Item Closing balance Opening balance Other explanation: 33. Derivative financial liabilities □ Applicable √ Not applicable 34. Note payable In RMB Category Closing balance Opening balance Totally Yuan due note payable are paid at period-end. 35. Account payable (1) Account payable In RMB Items Closing balance Opening balance Within one year (one year included) 98,536,221.70 52,427,574.40 Over 1 year 4,574,419.18 6,746,158.48 Total 103,110,640.88 59,173,732.88 (2) Major account payable over one year In RMB Items Closing balance Reasons of un-paid or carry-over Other explanation: 36. Account received in advance (1) Account received in advance In RMB Items Closing balance Opening balance Within one year (one year included) 7,598,394.56 19,591,036.39 Over 1 year 349,863.72 349,863.72 93 山东省中鲁远洋渔业股份有限公司 2017 年半年度报告全文 Total 7,948,258.28 19,940,900.11 (2) Major account received in advance with over one year age In RMB Items Closing balance Reasons of un-paid or carry-over (3) Projects un-completed but settled from construction contract at end of the Period In RMB Items Amount Other explanation: 37. Salary payable (1) Salary payable In RMB Increase during the Decrease during this Items Opening balance Closing balance period period I. Short-term compensation 30,320,927.64 48,536,179.20 58,120,425.92 20,736,680.92 II. Post-employment welfare- defined 0.00 3,419,616.12 3,419,616.12 0.00 contribution plans III. Dismissal welfare 253,690.98 0.00 71,943.62 181,747.36 IV. Other welfare due 37,785.14 0.00 0.00 37,785.14 within one year Total 30,612,403.76 51,955,795.32 61,611,985.66 20,956,213.42 (2) Short-term compensation In RMB Increase during the Decrease during this Items Opening balance Closing balance period period 1. Wages,bonuses,allowances 28,903,757.58 42,500,459.30 52,271,626.22 19,132,590.66 andsubsidies 2. Welfare for workers 0.00 1,919,377.99 1,919,377.99 0.00 and staff 3. Social insurance 0.00 1,783,700.58 1,783,700.58 0.00 Including: Medical 0.00 1,488,566.47 1,488,566.47 0.00 94 山东省中鲁远洋渔业股份有限公司 2017 年半年度报告全文 insurance Work injury 0.00 136,868.09 136,868.09 0.00 insurance Maternity 0.00 158,266.02 158,266.02 0.00 insurance 4. Housing accumulation 0.00 1,429,305.17 1,429,305.17 0.00 fund 5. Labor union expenditure and 1,417,170.06 226,532.01 39,611.81 1,604,090.26 personnel education expense 6. Short-term paid 0.00 676,804.15 676,804.15 0.00 absence 7. Short-term profit 0.00 0.00 0.00 0.00 sharing scheme Total 30,320,927.64 48,536,179.20 58,120,425.92 20,736,680.92 (3) Defined contribution plans In RMB Increase during the Decrease during this Items Opening balance Closing balance period period 1. Basic endowment 3,153,847.07 3,153,847.07 insurance 2. Unemployment 128,966.45 128,966.45 insurance 3. Enterprise annuity 0.00 0.00 payment 4. Other 136,802.60 136,802.60 Total 0.00 3,419,616.12 3,419,616.12 0.00 Other explanation: 38. Tax payable In RMB Items Closing balance Opening balance Value-added tax 107,772.18 147,692.07 Enterprise income tax 296,757.07 701,435.86 Individual income tax 217,407.94 120,112.87 95 山东省中鲁远洋渔业股份有限公司 2017 年半年度报告全文 Urban maintenance and construction tax 274.66 2,068.39 House property tax 401,341.49 211,836.25 Land use tax 150,809.98 154,055.30 Educational additional 1,091.04 886.45 Other tax 8,069.96 6,792.66 Total 1,183,524.32 1,344,879.85 Other explanation: 39. Interest payable In RMB Items Closing balance Opening balance Interest payable for short-term loans 86,747.10 Total 86,747.10 Interest overdue without paid: In RMB Borrower Amount overdue Reasons Other explanation: 40. Dividend payable In RMB Items Closing balance Opening balance Other explanation, including dividend payable unpaid over one year, and explain the reasons: 41. Other payable (1) Classification of other payable according to nature of account In RMB Items Closing balance Opening balance Within 1 year (including 1 year) 4,476,852.04 785,938.83 Over 1 year 3,131,806.40 4,435,101.99 Total 7,608,658.44 5,221,040.82 (2) Significant other payable with over one year age In RMB 96 山东省中鲁远洋渔业股份有限公司 2017 年半年度报告全文 Items Closing balance Reasons of un-paid or carry-over Other explanation 42. Classified as liabilities held for sale In RMB Items Closing balance Opening balance Other explanation: 43. Non-current liabilities due within one year In RMB Items Closing balance Opening balance Deferred income due within one year 433,292.74 866,585.48 Total 433,292.74 866,585.48 Other explanation: 44. Other current liability In RMB Items Closing balance Opening balance Changes of short-term payable bonds: In RMB Amortizat Interest ion of Face Issuing Bond Issue Opening Issued in accrual premium Paid in Closing Bond value date period amount balance the Period by face price and the Period balance value conversio n Other explanation: 45. Long-term loans (1) Classification of long-term loans In RMB Items Closing balance Opening balance Explanation on category of long-term loans: Other explanation, including interest rate section: 97 山东省中鲁远洋渔业股份有限公司 2017 年半年度报告全文 46. Bonds payable (1) Bonds payable In RMB Item Closing balance Opening balance (2) Changes of bond payable (excluding other financial instrument of preferred stock and perpetual capital securities that classified as financial liability) In RMB (3) Condition of convertible bonds and time of transferring (4) Other financial instrument classified as financial liabilities Outstanding preferred stock and perpetual capital securities at period-end Changes of the outstanding preferred stock and perpetual capital securities at period-end In RMB Outstanding Period-begin Increase during the period Decrease during this period Period-end financial Amount Book value Amount Book value Amount Book value Amount Book value instrument Explanations on basis of other financial instrument classified into financial liabilities Other explanation 47. Long-term account payable (1) Listed by nature In RMB Items Closing balance Opening balance Other explanation: 48. Long-term employee payable (1) Long-term employee payable In RMB Items Closing balance Opening balance I Post-employment benefit – net liability of 648,548.88 648,548.88 the defined benefit plan III. Other long-term welfare 1,051,202.96 1,051,202.96 98 山东省中鲁远洋渔业股份有限公司 2017 年半年度报告全文 Total 1,699,751.84 1,699,751.84 (2) Change of defined benefit plan Present value of the obligation of defined benefit plan: In RMB Items Current Period Last Period Scheme assets: In RMB Items Current Period Last Period Net liability(assets) of the defined benefit plan In RMB Items Current Period Last Period Contents of defined benefit plan and the risks associate thereof, influences upon the Company’s future cash flow, timing and uncertainty: The material actuary assumption and sensitive analysis relating to defined benefit plan is explained as follows: Other explanation: 49. Special payable In RMB Increase during the Decrease during this Items Opening balance Closing balance Causes period period Other explanation: 50. Accrued liabilities In RMB Items Closing balance Opening balance Causes Other explanation, including relevant important hypothesis and estimation: 51. Deferred income In RMB Increase during the Decrease during this Items Opening balance Closing balance Causes period period Government grants 10,572,454.62 10,572,454.62 Total 10,572,454.62 10,572,454.62 -- Item with government subsidy concerned: In RMB 99 山东省中鲁远洋渔业股份有限公司 2017 年半年度报告全文 Amount reckoned into Subsidy increase Assets-related/ Item Opening balance non-operation Other changes Closing balance during this period Income-related revenue in the Period Construction 9,867,781.98 9,867,781.98 special fund Financial ship-building 704,672.64 704,672.64 discount Total 10,572,454.62 10,572,454.62 -- Other explanation: 52. Other non-current liability In RMB Items Closing balance Opening balance Other explanation: 53. Share capital In RMB Changes in the Period (+,-) Opening Shares transfer Closing Issuing new balance Bonus shares from public Other Subtotal balance shares reserves Total shares 266,071,320.00 266,071,320.00 Other explanation: 54. Other equity instrument (1) Other financial instrument of outstanding preferred stock and perpetual capital securities at period-end (2) Changes of financial instrument of outstanding preferred stock and perpetual capital securities at period-end In RMB Outstanding Period-begin Increase during the period Decrease during this period Period-end financial Amount Book value Amount Book value Amount Book value Amount Book value instrument Changes of other equity instrument, explanation on changes and basis of relevant accounting treatment: 100 山东省中鲁远洋渔业股份有限公司 2017 年半年度报告全文 Other explanation: 55. Capital surplus In RMB Increase during the Decrease during this Items Opening balance Closing balance period period Capital premium (equity 185,036,701.86 185,036,701.86 premium) Other Capital surplus 94,961,504.96 94,961,504.96 Total 279,998,206.82 279,998,206.82 Other explanation, including changes and reasons of changes: 56. Treasury stock In RMB Increase during the Decrease during this Items Opening balance Closing balance period period Other explanation, including changes and reasons for changes: 57. Other consolidated income In RMB Current Period Less: written in other comprehensive Account Belong to Belong to Opening income in Closing Items before Less : income parent minority balance previous period balance income tax in tax expense company after shareholders and carried the period tax after tax forward to gains and losses in current period (II) Other comprehensive income -310,326. items which will be reclassified -665,059.07 354,732.98 354,732.98 09 subsequently to profit or loss Translation differences of foreign -310,326. -665,059.07 354,732.98 354,732.98 financial sheet 09 -310,326. Total of other consolidated income -665,059.07 354,732.98 354,732.98 09 Other explanation, including the active part of the hedging gains/losses of cash flow transfer to initial reorganization adjustment for 101 山东省中鲁远洋渔业股份有限公司 2017 年半年度报告全文 the arbitraged items: 58. Reasonable reserve In RMB Increase during the Decrease during this Items Opening balance Closing balance period period Other explanation, including changes and reasons for changes: 59. Surplus reserves In RMB Increase during the Decrease during this Items Opening balance Closing balance period period Statutory surplus 21,908,064.19 21,908,064.19 reserves Total 21,908,064.19 21,908,064.19 Other explanation, including changes and reasons for changes: 60. Retained profit In RMB Items This period Last period Retained profits at the end of last year before 50,349,731.78 -2,235,338.96 adjustment Retained profits at the beginning of the period 50,349,731.78 -2,235,338.96 after adjustment Add: net profit attributable to owners of parent 32,001,590.86 52,585,070.74 company Retained profit at period-end 82,351,322.64 50,349,731.78 Details about adjusting the retained profits at the beginning of the period: 1) The retroactive adjustments to Accounting Standards for Business Enterprises and its relevant new regulations affect the retained profits at the beginning of the period amounting to 0 Yuan. 2) The changes in accounting policies affect the retained profits at the beginning of the period amounting to 0 Yuan. 3) The major accounting error correction affects the retained profits at the beginning of the period amounting to 0 Yuan 4) Merge scope changes caused by the same control affect the retained profits at the beginning of the period amounting to 0 Yuan. 5) Other adjustments affect the retained profits at the beginning of the period amounting to 0 Yuan 61. Operating income and cost In RMB 102 山东省中鲁远洋渔业股份有限公司 2017 年半年度报告全文 Current Period Last Period Items Income Cost Income Cost Main operating 435,825,365.50 377,649,192.30 402,902,159.56 381,353,587.60 Other operating 4,352,726.25 718,241.91 4,988,634.22 843,405.00 Total 440,178,091.75 378,367,434.21 407,890,793.78 382,196,992.60 62. Tax and surcharges In RMB Items Current Period Last Period City maintenance and construction tax 305,392.09 4,508.00 Educational surtax 218,137.21 3,192.50 House property tax 740,050.43 133,200.00 Land use tax 315,805.99 Vehicle and vessel tax 27,664.36 Stamp tax 54,922.03 Business tax 64,400.00 Local water conservancy construction fund 43,464.74 Other 35,150.47 Total 1,705,436.85 240,450.97 Other explanation: 63. Sales expenses In RMB Items Current Period Last Period Payroll payable 734,426.40 502,157.65 Port surcharge 355,592.64 1,491,034.68 Freight and miscellaneous charges 2,851,332.58 577,967.71 Customs censoring charges Travelling charge 11,898.35 38,367.10 Business publicity expenses 86,618.05 95,279.59 Other 41,435.46 33,650.65 Total 4,081,303.48 2,738,457.38 Other explanation: 103 山东省中鲁远洋渔业股份有限公司 2017 年半年度报告全文 64. Administrative expenses In RMB Items Current Period Last Period Payroll payable 9,212,316.46 8,917,176.41 Depreciation 556,028.52 760,740.14 Travelling charge 1,054,696.16 338,936.43 Business entertainment expenses 555,868.54 661,253.56 Expense of taxation 781,002.24 Vehicles charge 125,250.73 254,460.57 Attorney charge 813,954.48 708,252.22 Office allowance 212,314.01 267,058.20 Property water and electricity 153,112.13 96,610.32 Amortization of intangible assets 195,735.06 195,735.06 Other 3,314,423.72 1,400,333.67 Total 16,193,699.81 14,381,558.82 Other explanation: 65.Financial expenses In RMB Items Current Period Last Period Interest costs 2,891,553.08 1,810,730.46 Less: interest income 352,460.61 181,267.53 Exchange loss 4,141,704.98 839,850.57 Less: exchange gains 562,848.61 3,449,536.51 Handing expense 330,949.94 123,871.81 Other expense 68,814.21 51,500.39 Total 6,517,713.00 -804,850.82 Other explanation: 66. Losses on assets impairment In RMB Item Current Period Last Period I. Bad debt losses 10,500.00 Total 10,500.00 104 山东省中鲁远洋渔业股份有限公司 2017 年半年度报告全文 Other explanation: 67. Gains from changes of fair value In RMB Source of gains from changes of fair value Current Period Last Period Other explanation: 68. Gains on investment In RMB Item Current Period Last Period Other explanation: 69. Other income In RMB Sources Current Period Last Period 70. Non-operating expenditure In RMB Amount reckoned in current Items Current Period Last Period non-recurring gains/losses Total income from disposal of 262,776.33 2,672,766.60 non-current assets Including: Gains from disposal 262,776.33 40,831.07 262,776.33 of fixed assets Government subsidy 433,292.74 443,568.74 433,292.74 Indemnity from insurance 205,791.69 205,791.69 company Other 9,117.16 2,941,838.21 9,117.16 Total 910,977.92 3,426,238.02 910,977.92 Government subsidy reckoned into current gains/losses: In RMB Subsidy impact The special Assets-relate Issuing Offering Amount in Amount in Item Nature current subsidy d/income-rela subject causes the Period last period gains/losses (Y/N) ted (Y/N) 105 山东省中鲁远洋渔业股份有限公司 2017 年半年度报告全文 Subsidy achieved for engaging in specific business or industry encouraged Financial and Assets-relate ship-building Subsidy Y N 14,188.00 14,188.00 supported by d discount the country (obtained legitimately according to national policies and regulations) Subsidy achieved for engaging in specific business or industry encouraged Special and Assets-relate construction Subsidy Y N 419,104.74 429,380.74 supported by d fund the country (obtained legitimately according to national policies and regulations) Total -- -- -- -- -- 433,292.74 443,568.74 -- Other explanation: 71. Non-operating expenses In RMB Amount included in current Item Current Period Last Period non-recurring profits or losses Total losses on disposal of 399.90 9,680.71 non-current assets 106 山东省中鲁远洋渔业股份有限公司 2017 年半年度报告全文 Including: loss on disposal of 399.90 2,163.80 399.90 fixed assets Other 295,719.88 7,516.91 295,719.88 Additional overdue find of state 4,282.38 4,282.38 taxes Total 300,402.16 9,680.71 300,402.38 Other explanation: 72. Income tax expenses (1) Statement of income tax expense In RMB Items Current Period Last Period Current income tax expense 453,724.36 264,529.60 Total 453,724.36 264,529.60 (2) Adjustment on accounting profit and income tax expenses In RMB Items Current Period Total profit 33,912,580.16 Income tax based on statutory/applicable rate 453,724.36 Income tax expense 453,724.36 Other explanation 73. Other comprehensive income See Note 57. 74. Items of statement of cash flow (1) Other cash received in relation to operation activities In RMB Items Current Period Last Period Intercourse funds and others 42,741,358.46 36,914,813.79 Including: financial expense- interest 362,762.21 193,534.85 income 107 山东省中鲁远洋渔业股份有限公司 2017 年半年度报告全文 Total 43,104,120.67 37,108,348.64 Explanation on other cash received in relation to operation activities: (2) Other cash paid in relation to operation activities In RMB Items Current Period Last Period Expenses of management cash paid 4,119,883.15 9,521,672.42 Sales expenses paid in cash 1,234,748.50 2,738,457.38 Intercourse funds and others 49,044,939.72 48,150,288.98 Purchase of financial products 7,000,000.00 Total 54,399,571.37 67,410,418.78 Explanation on other cash paid in relation to operation activities: (3) Cash received from other investment activities In RMB Items Current Period Last Period Explanation on cash received from other investment activities (4) Cash paid related with investment activities In RMB Items Current Period Last Period Other 84,559.42 Total 84,559.42 支付的其他与投资活动有关的现金说明: (5) Other cash received in relation to financing activities In RMB Items Current Period Last Period Explanation on other cash received in relation to financing activities (6) Cash paid related with financing activities In RMB Items Current Period Last Period Explanation on cash paid related with financing activities: 75. Supplementary information to statement of cash flow 108 山东省中鲁远洋渔业股份有限公司 2017 年半年度报告全文 (1) Supplementary information to statement of cash flow In RMB Supplementary information This Period Last Period 1. Net profit adjusted to cash flow of -- -- operation activities: Net profit 33,458,855.80 12,290,212.54 Add: Assets impairment provision -1,943,630.88 -201,172.25 Depreciation of fixed assets, consumption of oil assets and depreciation of productive 15,751,219.98 16,243,824.31 biology assets Amortization of intangible assets 195,735.06 195,735.06 Loss from disposal of fixed assets, intangible assets and other long-term assets(gain is -247,813.32 -2,663,085.89 listed with “-”) Financial expenses (gain is listed with “-”) 2,891,561.26 1,050,289.43 Decrease of inventory (increase is listed with -55,276,389.67 -14,960,244.79 “-”) Decrease of operating receivable accounts -1,486,025.93 -34,189,476.51 (increase is listed with “-”) Increase of operating payable accounts 24,532,644.24 38,467,499.68 (decrease is listed with “-”) Net cash flow arising from operating 17,876,156.54 16,233,581.58 activities 2. Material investment and financing not -- -- involved in cash flow 3. Net change of cash and cash equivalents: -- -- Balance of cash at period end 102,884,493.47 79,772,739.78 Less: Balance of cash equivalent at 129,521,203.29 72,428,421.94 year-begin Net increasing of cash and cash equivalents -26,636,709.82 7,344,317.84 (2) Net cash paid for obtaining subsidiary in the Period In RMB Amount Including: -- Including: -- Including: -- 109 山东省中鲁远洋渔业股份有限公司 2017 年半年度报告全文 Other explanation: (3) Net cash received by disposing subsidiary in the Period In RMB Amount Including: -- Including: -- Including: -- Other explanation: (4) Constitution of cash and cash equivalent: In RMB Item Closing balance Opening balance Ⅰ. Cash 102,884,493.47 129,521,203.29 Including: Cash on hand 2,768,761.41 1,733,006.22 Bank deposit available for payment 99,561,338.48 128,664,656.08 at any time Other monetary fund available for 554,393.58 784,064.34 payment at any time Ⅲ. Balance of cash and cash equivalent at 102,100,951.96 128,737,661.78 period-end Other explanation: 76. Notes of changes of owners’ equity Explain the name and adjusted amount in “Other” at end of last period: 77. Assets with ownership or use right restricted In RMB Item Ending book value Restriction reasons Other monetary fund, L/C Guarantee Monetary fund 783,541.51 deposits Fixed assets 80,517,681.32 Real estate, mortgage bank Intangible assets 12,892,891.75 Lands, mortgage bank Total 94,194,114.58 -- Other explanation: 110 山东省中鲁远洋渔业股份有限公司 2017 年半年度报告全文 78. Item of foreign currency (1) Item of foreign currency In RMB Closing balance of foreign Items Rate of conversion Ending RMB balance converted currency Including: USD 4,363,269.58 6.7744 29,558,533.44 EUR 36,817.90 7.7496 285,324.00 JPY 72,612,178.00 0.060485 4,391,947.59 CEDI 1,573,618.46 1.6258 2,558,388.89 Including: USD 2,667,650.06 6.7744 18,071,728.57 JPY 171,613,198.59 0.060485 10,380,024.32 Other explanation: (2) Explanation on foreign operational entity, including as for the major foreign operational entity, disclosed main operation place, book-keeping currency and basis for selection; if the book-keeping currency changed, explain reasons √Applicable □ Not applicable major foreign operation Foreign main operation place Book-keping currency Basis entity HABITAT The economic enviornment INTERNATIONAL Panama CNY in the operation sites CORPORATION LAIF FISHERIES The economic enviornment Garner USD COMPANY LIMITED in the operation sites YAW ADDO FISHERIES The economic enviornment Garner USD COMPANY LIMITED in the operation sites 79. Hedging Disclosed hedging items and relevant hedging instrument based on hedging’s category, disclosed qualitative and quantitative information for the arbitrage risks: 111 山东省中鲁远洋渔业股份有限公司 2017 年半年度报告全文 80. Other VIII. Changes of consolidation scope 1. Enterprise consolidation not under the same control (1) Enterprise consolidation not under the same control In RMB Income of Net profit of Standard to Time point Cost of Ratio of Acquired acquiree from acquiree from Purchasing determine the Acquiree for equity equity equity way Equity purchasing purchasing date purchasing obtained obtained obtained obtained way date to date to date period-end period-end Other explanation: (2) Combination cost and goodwill In RMB Combination cost Determination method for fair value of the combination cost and contingent consideration and changes: Main reasons for large goodwill resulted: Other explanation: (3) Identifiable assets and liability on purchasing date under the acquiree In RMB Fair value on purchasing date Book value on purchasing date Determination method for fair value of the identifiable assets and liabilities: Contingent liability of the acquiree bear during combination: Other explanation: (4) Gains or losses arising from re-measured by fair value for the equity held before purchasing date Whether it is a business combination realized by two or more transactions of exchange and a transaction of obtained control rights in the Period or not □Y √N 112 山东省中鲁远洋渔业股份有限公司 2017 年半年度报告全文 (5) On purchasing date or period-end of the combination, combination consideration or fair value of identifiable assets and liability for the acquiree are un-able to confirm rationally (6) Other explanation 2. Enterprise combined under the same control (1) Enterprise combined under the same control in the Period In RMB Income of the Net profit of combined the combined Income of the Net profit of party from party from Basis of Standard to combined the combined Equity ratio period-begin period-begin combined Combination determine the party during party during Acquiree obtained in of of under the date combination the the combination combination combination same control date comparison comparison to the to the period period combination combination date date Other explanation: (2) Combination cost In RMB Combination cost Explanation on contingent consideration and its changes: Other explanation: (3) Assets and liability of the combined party on combination date In RMB Combination date Ending period of last year Contingent liability of the combined party bear during combination Other explanation: 3. Counter purchase Basic information of transactions, basis of transactions constituting counter purchase, whether assets and liabilities reserved by listed companies constituting business and their basis, confirmation of combined cost, the amount occurred when adjusting rights and interests in accordance with equity transaction and its calculation: 113 山东省中鲁远洋渔业股份有限公司 2017 年半年度报告全文 4. Disposal of subsidiaries Losing controlling rights while dispose subsidiary on one-time □Yes √No Dispose subsidiary step by step through multi-dealings and losing controlling rights in the Period □Yes √No 5. Changes of combination scope Other reasons contributed the changes for combination scope (e.g. new subsidiary established, liquidate subsidiary etc.): 6. Other IX. Equity in other entity 1. Equity in subsidiary (1) Constitute of enterprise group Main operation Share-holding ratio Subsidiary Registered place Business nature Acquired way place Directly Indirectly Shandong Zhonglu Fishery Qingdao Qingdao Refrigerated 100.00% Investment Shipping Co., Shandong Shandong transport Ltd. Shandong Zhonglu Oceanic Yantai Shandong Yantai Shandong Food processing 100.00% Investment (Yantai) Food Co., Ltd. Shandong Zhonglu Haiyan Qingdao Qingdao Pelagic fishing 81.26% Investment Oceanic Fishery Shandong Shandong Co., Ltd. HABITAT INTERNATION Refrigerated Panama Panama 100.00% Investment AL transport CORPORATION YAW ADDO FISHERIES Garner Garner Pelagic fishing Operating lease COMPANY LIMITED Explanation on share-holding ratio in subsidiary different from ratio of voting right: 114 山东省中鲁远洋渔业股份有限公司 2017 年半年度报告全文 Basis for controlling the invested entity with half or below voting rights held and without controlling invested entity but with over half and over voting rights: Controlling basis for the structuring entity included in consolidated range: Basis on determining to be an agent or consignor: Other explanation: (2) Important non-wholly-owned subsidiary In RMB Dividend announced to Share-holding ratio of Gains/losses attributable Ending equity of Subsidiary distribute for minority in minority to minority in the Period minority the Period Shandong Zhonglu Haiyan Oceanic Fishery 18.74% 5,055,199.11 33,097,484.30 Co., Ltd. Explanation on share-holding ratio of minority different from ratio of voting right: Other explanation: (3) Main finance of the important non-wholly-owned subsidiary In RMB Closing balance Opening balance Subsidia Non-curr Non-curr Non-curr Non-curr Current Total Current Total Current Total Current Total ry ent ent ent ent assets assets liability liability assets assets liability liability assets liability assets liability Shandon g Zhonglu 80,825,5 239,567, 320,393, 135,299, 704,672. 136,004, 96,844,1 92,416,5 189,260, 12,017,6 704,672. 12,722,2 Haiyan 28.26 646.77 175.03 436.58 64 109.22 05.24 72.75 677.99 18.20 64 90.84 Oceanic Fishery Co., Ltd. In RMB Current Period Last Period Cash flow Cash flow Total Total Subsidiary Operation from Operation from Net profit comprehensi Net profit comprehensi Income operation Income operation ve income ve income activity activity Shandong 46,126,136.8 34,584,084.0 28,313,004.2 18,146,183.3 Zhonglu 7,776,226.98 7,819,205.69 3,894,567.56 3,672,699.56 7 5 4 7 Haiyan 115 山东省中鲁远洋渔业股份有限公司 2017 年半年度报告全文 Oceanic Fishery Co., Ltd. Other explanation: (4) Use of the corporate funds and major limitation of debt liquidation of the group (5) Financial supporting or other supports offer to the structured body, which included in consolidation statement scope Other explanation: 2. Transaction that has owners equity shares changed in subsidiary but still with controlling rights (1) Owners equity shares changed in subsidiary (2) Impact on minority’s interest and owners’ equity attributable to parent company In RMB Other explanation 3. Equity in joint venture and cooperative enterprise (1) Important joint venture and cooperative enterprise Share-holding ratio Accounting treatment on Main operation investment for Name Registered place Business nature place Directly Indirectly joint venture and cooperative enterprise Share-holding ratio or shares enjoyed different from voting right ratio: Basis of the voting rights with 20% below but with major influence, or without major influence but with over 20% (20% included) voting rights hold: (2) Main financial information of the important joint venture In RMB Closing balance /Current Period Opening balance /Last Period 116 山东省中鲁远洋渔业股份有限公司 2017 年半年度报告全文 Other explanation (3) Main financial information of the important cooperative enterprise In RMB Closing balance /Current Period Opening balance /Last Period Other explanation (4) Summary of the financial information for those minor joint venture and affiliates In RMB Closing balance /Current Period Opening balance /Last Period Joint venture: -- -- Total of the items counted by share-holding -- -- ratio Cooperative enterprise: -- -- Total of the items counted by share-holding -- -- ratio Other explanation (5) Major limitation of the capital transfer to the Company from joint venture or affiliates (6)Excess deficit arising from joint venture or affiliates In RMB Loss un-confirmed in the Period Accumulative loss Accumulative loss confirmed at Joint venture or affiliates (or net profit shared in the un-confirmed previous period-end Period) Other explanation (7)Un-confirmed commitment with joint venture investment concerned (8)Contingency with investment of joint venture investment concerned 4. Major co-management Share-holding ratio /shares enjoyed Name Main operation place Registered place Business nature Directly Indirectly Explanation on difference of the voting rights over share-holding or share enjoyed in co-management: As for the independent entity, basis of co-management classification: 117 山东省中鲁远洋渔业股份有限公司 2017 年半年度报告全文 Other explanation 5. Equity in structured entities not included in the consolidated financial statements Note of structured entities not included in the consolidated financial statements: 6. Other X. Risks related to financial instruments The financial assets of the Company include accounts receivable and other receivables. The financial liabilities of the Company include accounts payable, other payables and short-term loans. For details of each financial instrument, please refer to the relevant items in Note 5. The Company is faced with the risks of various financial instruments in its daily activities, mainly including credit risk, liquidity risk and market risk. The board of directors is responsible for establishing and supervising the risk management structure of the Company and developing and monitoring the Company's risk management policies. Risk management objectives and policies: the Company's goal of risk management is to strike a proper balance between risks and profits, minimize the negative impacts of the risks on the Company's operating results and maximize the benefits of shareholders and other equity investors. 1. Credit risk If the customer or the other party involving in the financial instruments cannot fulfill the obligations under the contract and cause financial losses to the Company, that is credit risk. Credit risk is mainly from the customer receivables. The book value of account receivables and notes receivable and other receivables is the maximum credit risk of the Company for financial assets. 2. Liquidity risk Liquidity risk is the risk of the shortage of funds when the Company is fulfilling its obligations related to financial liabilities. In the case of normal and tense funds, the Company needs to ensure that there is sufficient liquidity to meet its due debts and negotiate with financial institutions for financing so as to maintain a certain level of reserve credit line to reduce the liquidity risk. 3. Market risk (1) Foreign exchange risk Foreign exchange risk refers to the risk that the fair value of financial instruments or the future cash flows fluctuate due to changes in foreign exchange rates. The foreign exchange risk faced by the Company mainly comes from the financial assets valued in US dollars, and the amount of foreign currency financial assets converted into RMB is listed as described in VII. 78 foreign currency monetary items. (2) Interest rate risk Interest rate risk refers to the risk that the fair value of financial instruments or future cash flows fluctuate due to changes in market interest rates. The interest rate risk faced by the Company mainly comes from the long-term bank loans, the Company’s loans are floating interest rate, and there is risk of RMB benchmark interest rate change. XI. Disclosure of fair value 1. Ending fair value of the assets and liabilities measured by fair value In RMB Ending fair value Item First-order Second-order Third-order Total 118 山东省中鲁远洋渔业股份有限公司 2017 年半年度报告全文 I. Sustaining measured by -- -- -- -- fair value II. Non-persistent measure -- -- -- -- 2. Basis for determining the market price of the sustained and non-sustained first-level fair value measurement projects 3. The qualitative and quantitative information of the valuation techniques and important parameters adopted for the sustained and non-sustained second-level fair value measurement projects 4. The qualitative and quantitative information of the valuation techniques and important parameters adopted for the sustained and non-sustained third-level fair value measurement projects 5. The adjustment information about book value between the beginning and the end of the period and the unobservable parameter sensitivity analysis of the sustained third-level fair value measurement projects 6. The sustained third-level fair value measurement projects that conversion has occurred among various levels in the current period, the reasons for change and the policy determining the conversion point 7. Valuation techniques change occurred during the current period and the reasons for change 8. The fair value situations of the financial assets and financial liabilities not measured by the fair value 9. Other XII. Related party and related transactions 1. Parent company of the enterprise Share-holding ratio Voting right ratio on Parent company Registration place Business nature Registered capital on the enterprise for the enterprise parent company Investment and Shandong management, State-owned Assets management and Jinan Shandong RMB 4,500,000,000 33.07% 33.07% Investment Holding operation of assets, Company Limited managed operations, investment advisory Explanation on parent company of the enterprise Ultimate controller of the Company is Shandong State-owned Assets Investment Holdings Co., Ltd. Other explanation: 119 山东省中鲁远洋渔业股份有限公司 2017 年半年度报告全文 2. Subsidiary of the Enterprise Found more in Note IX. 1.” Equity in subsidiary” 3. Cooperative enterprise and joint venture Found more in Note. Other cooperative enterprise and joint venture that have related transaction with the Company in the Period or occurred in previous period Name Relationship Other explanation 4. Other related party Other related party Relationship with the Enterprise Shandong Luxin Investment Holding Company Limited Shareholders with over 5% shares held Other explanation 5. Related transaction (1) Goods purchasing, labor service providing and receiving Goods purchasing/labor service receiving In RMB Whether over the Amount of this Trading limit Related party Content approved limited or Amount of last period period approved not Goods sold/labor service providing In RMB Related party Content Amount of this period Amount of last period Explanation on goods purchasing, labor service providing and receiving In RMB (2)Related trusteeship management/contracts and entrusted management/outsourcing Statement of trusteeship management/contract: In RMB Managed Managed Client/Contract-o Entrusting Trustee/assts Trustee /start Trustee /ends earnings /pricing earnings ut party party/Contractor contract of the contract confirmed in the 120 山东省中鲁远洋渔业股份有限公司 2017 年半年度报告全文 earnings period / contract earnings Related managed/contract: Entrusted management/outsourcing: In RMB Entrusted Trustee fee / earnings Client/Contract-o Entrusting Entrust /assets Entrust /start Entrust /ends pricing of the confirmed in the ut party party/Contractor outsourcing outsourcing period / outsourcing costs Related management/ outsourcing: (3) Related lease As a lessor for the Company: In RMB Lease income in recognized in Lease income in recognized last Lessee Assets type the Period the Period As a lessee for the Company: In RMB Lease income in recognized in Lease income in recognized last Lessor Assets type the Period the Period Explanation on related lease (4) Related guarantee As the guarantor In RMB Secured party Amount guarantee Start End Completed or not (Y/N) As the secured party In RMB Guarantor Amount guarantee Start End Completed or not (Y/N) Shandong State-owned Assets Investment 100,000,000.00 2017-04-28 2017-09-27 N Holding Company Limited Explanation on related guarantee 121 山东省中鲁远洋渔业股份有限公司 2017 年半年度报告全文 (5) Related party’s fund loan In RMB Related party Fund loan Start End Note Borrowing Lending (6) Related party’s assets transfer and debt reorganization In RMB Related party Content Current Period Last Period (7) Remuneration of key manager In RMB Items Current Period Last Period Total remuneration 1,078,527.06 1,055,088.22 (8) Other related transactions 6. Receivable/payable items of related parties (1) Receivable item In RMB Closing balance Opening balance Item Related party Book balance Bad debt reserves Book balance Bad debt reserves (2) Payable item In RMB Item Related party Ending book balance Opening book balance 7. Commitments of related party 8. Other XIII. Share-based payment 1. Share-based payment □ Applicable √ Not applicable 122 山东省中鲁远洋渔业股份有限公司 2017 年半年度报告全文 2. Share-based payment settled by equity □ Applicable √ Not applicable 3. Share-based payment settled by cash □ Applicable √ Not applicable 4. Amendment and termination of the share-based payment 5. Other XIV. Commitment or contingency 1. Important commitment Important commitment on balance sheet date Nil 2. Contingency (1) Contingency on balance sheet date Nil (2) if the Company has no contingency need to disclosed, explain reasons The Company has no important contingency that need to disclosed 3. Other XV. Event occurring after balance sheet date 1. Important non-adjusting events In RMB Impact on financial status and Reasons of unable to estimated Item Content operation results the impact 2. Profit distribution In RMB 123 山东省中鲁远洋渔业股份有限公司 2017 年半年度报告全文 3, Sales return XVI. Other important event 1. Error correction for previous period (1) Retrospective restatement In RMB Item with impact in statement Correction content Treatment procedure Cumulative impact in every comparative period (2) Prospective application Correction content Approval procedure Cause of prospective application adoption 2. Debt reorganization 3. Assets replacement (1) exchange of non-monetary assets (2) other assets replacement 4. Pension plan 5. Discontinuing operation In RMB Profit of discontinuing Income tax operation Item Revenue Expenses Total profit Net profit expenses attributable to owners of parent company Other explanation 6. Segment information (1) determination basis and accounting policy for segment (2) Financial information of the segment In RMB 124 山东省中鲁远洋渔业股份有限公司 2017 年半年度报告全文 Item Offset between segment Total (3) If the Company has no segment reporting, or unable to disclosed the total assets and liabilities of the segment, explain reasons (4) Other explanation 7. Other important transactions and events shows impact on investor decision-making 8. Other XVII. Principle notes of financial statements of parent company 1. Accounts receivable (1)Category of account receivable In RMB Closing balance Opening balance Book balance Bad debt reserves Book balance Bad debt reserves Category Book Accrual Accrual Book value Amount Ratio Amount value Amount Ratio Amount ratio ratio Account receivable with bad debt 15,540,7 5,388,33 10,152,44 18,751, 5,689,018 13,062,916. provision accrual by 83.49 8.81 4.68 934.01 .01 00 portfolio 15,540,7 5,388,33 10,152,44 18,751, 5,689,018 13,062,916. Total 83.49 8.81 4.68 934.01 .01 00 Account receivable with major single amount and withdrawal bad debt provision single at period-end: □ Applicable √ Not applicable Account receivable with bad debt provision withdrawal by method of account age in portfolio: √ Applicable □ Not applicable In RMB Closing balance A/C age Account receivable Bad debt reserves Accrual ratio Sub-item of within one year Subtotal of within one year 10,152,444.68 Over three years 5,388,338.81 5,388,338.81 100.00% Total 15,540,783.49 5,388,338.81 Explanation on portfolio basis: 125 山东省中鲁远洋渔业股份有限公司 2017 年半年度报告全文 In combination, withdrawal proportion of bad debt provision based on balance proportion for account receivable: □ Applicable √ Not applicable In combination, withdrawal proportion of bad debt provision based on other methods for account receivable: (2)Bad debt provision accrual, switch-back or taken back in reporting period Amount accrual in the Period; amount 300,679.20 Yuan switch-back or taken back in the Period 。 Including major amount of bad debt provision that switch-back or taken back in the Period: In RMB Company Amount switch back or taken back Way (3) Account receivables actually written-off during the reporting period In RMB Items Amount verified Including major account receivables written-off: In RMB Occurred due to Company Nature Amount verified Reasons Verified procedures related transaction (Y/N) Explanation on account receivable written-off : (4)Top five receivables collected by arrears party at ending balance Balance of bad debt Company Ending balance Ratio in total receivable (%) provision Shandong Zhonglu Oceanic 9,968,835.00 64.15% (Yantai) Food Co., Ltd. PACIFIC PANDA,INC 3,600,962.12 23.17% 3,600,962.12 Qingdao Haifeng Gorup 430,625.10 2.77% 430,625.10 Limited Lv Ming 158,154.98 1.02% 158,154.98 Daqun Company 156,875.50 1.01% 156,875.50 Total 14,315,452.70 4,346,617.70 (5)Account receivables derecognized due to financial assets transfer (6)Transfer the account receivable and assets & liabilities arising from further involvement Other explanation: 126 山东省中鲁远洋渔业股份有限公司 2017 年半年度报告全文 2. Other accounts receivable (1)Category of other account receivable In RMB Closing balance Opening balance Book balance Bad debt reserves Book balance Bad debt reserves Category Book Accrual Accrual Book value Amount Ratio Amount value Amount Ratio Amount ratio ratio Other account receivable with bad 65,327,6 2,119,72 63,207,94 43,482, 3,571,189 39,910,882. debt provision 71.34 3.98 7.36 072.02 .67 35 accrual by portfolio 65,327,6 2,119,72 63,207,94 43,482, 3,571,189 39,910,882. Total 71.34 3.98 7.36 072.02 .67 35 Other account receivable with major single amount and withdrawal bad debt provision single at period-end: □ Applicable √ Not applicable Other account receivable with bad debt provision withdrawal by method of account age in portfolio: √ Applicable □ Not applicable In RMB Closing balance A/C age Other receivable Bad debt reserves Accrual ratio Sub-item of within one year Subtotal of within one year 63,108,214.30 88,434.09 1-2 years 225,840.14 67,752.04 2-3 years 60,158.10 30,079.05 Over three years 1,933,458.80 1,933,458.80 Total 65,327,671.34 2,119,723.98 Explanation on portfolio basis: In combination, withdrawal proportion of bad debt provision based on balance proportion for other account receivable □ Applicable √ Not applicable In combination, withdrawal proportion of bad debt provision based on other methods for other account receivable □Applicable √ Not applicable (2)Bad debt provision accrual, switch-back or taken back in reporting period Amount accrual in the Period; amount 1,451,465.69 Yuan switch-back or taken back in the Period Including major amount of bad debt provision that switch-back or taken back in the Period: In RMB 127 山东省中鲁远洋渔业股份有限公司 2017 年半年度报告全文 Company Amount switch-back or taken back Way (3)Other receivables actually written-off during the reporting period In RMB Items Amount verified Including major other account receivables written-off In RMB Occurred due to Nature of other Company Amount verified Reasons Verified procedures related transaction receivables (Y/N) Explanation on write-off of other receivables: (4) Other receivables by nature In RMB Nature Ending book balance Opening book balance Intercourse funds and others 64,294,173.91 43,482,072.02 Employee’s borrowing 823,497.43 Leasing margin 210,000.00 Total 65,327,671.34 43,482,072.02 (5) top 5 other receivables collected by arrears party at ending balance In RMB Proportion in total Ending balance of Company Nature Ending balance Account age other receivables at bad debt provision year-end Shandong Zhonglu Fishery Shipping Co., Internal transactions 24,714,718.67 Over 2 years 38.00% Ltd. Shandong Zhonglu Haiyan Oceanic Internal transactions 20,000,000.00 Within one year 31.00% Fishery Co., Ltd. YAWADDO FISHERIES Internal transactions 11,214,657.74 Within one year 17.00% COMPANY LIMITED LAIF FISHERIES Internal transactions 6,034,049.51 1-3 years 9.00% CO.LTD 128 山东省中鲁远洋渔业股份有限公司 2017 年半年度报告全文 Employee loans Personal loan 801,572.43 Within one year 1.00% 77,934.09 Total -- 62,764,998.35 -- 77,934.09 (6)Account receivable involved government subsidies In RMB Time, amount and basis Company Name Ending balance Ending account age estimated to received (7)Other account receivables derecognized due to financial assets transfer (8)Transfer the other account receivable and assets & liabilities arising from further involvement Other explanation: 3. Long-term equity investment In RMB Closing balance Opening balance Items Impairment Impairment Book balance Book value Book balance Book value provision provision Investment for 204,189,455.23 204,189,455.23 204,189,455.23 204,189,455.23 subsidiary Total 204,189,455.23 204,189,455.23 204,189,455.23 204,189,455.23 (1) Investment for subsidiary In RMB Ending balance of Increase during Decrease during Impairment The invested entity Opening balance Closing balance impairment the period this period accrual provision HabitatInternation 12,476,145.60 12,476,145.60 alCorporation Shandong Zhonglu Fishery Shipping 22,869,513.38 22,869,513.38 Co., Ltd. Shandong Zhonglu Oceanic (Yantai) 55,448,185.24 55,448,185.24 Food Co., Ltd. Shandong Zhonglu 113,395,611.01 113,395,611.01 Haiyan Oceanic 129 山东省中鲁远洋渔业股份有限公司 2017 年半年度报告全文 Fishery Co., Ltd. Total 204,189,455.23 204,189,455.23 (2) Investment for associates and joint venture In RMB +,- Ending Other Cash Investme balance Additiona comprehe dividend Opening nt gains Other Closing of Company l Capital nsive or profit Impairme balance recognize equity Other balance impairme investmen reduction income announce nt accrual d under change nt t adjustmen d to equity provision t issued I. Joint venture II. Associated enterprise (3) Other explanation 4. Operating income and cost In RMB Current Period Last Period Items Income Cost Income Cost Main business 57,174,319.09 43,119,825.36 11,269,475.74 16,789,134.08 Other business 2,364,952.79 718,241.91 2,873,525.90 843,405.00 Total 59,539,271.88 43,838,067.27 14,143,001.64 17,632,539.08 Other explanation: 5. Investment gains In RMB Items Current Period Last Period 6. Other XVIII. Supplementary Information 1. Current non-recurring gains/losses √ Applicable □ Not applicable In RMB 130 山东省中鲁远洋渔业股份有限公司 2017 年半年度报告全文 Item Amount Note Gains/losses from the disposal of 262,376.43 Revenue from vehicles disposal non-current asset Governmental subsidy reckoned into current gains/losses (not including the subsidy Subsidy for construction of the Blue enjoyed in quota or ration according to 433,402.16 Economic Zone national standards, which are closely relevant to enterprise’s business) Other non-operating income and expenditure -85,202.83 except for the aforementioned items Total 610,575.76 -- Concerning the extraordinary profit (gain)/loss defined by Q&A Announcement No.1 on Information Disclosure for Companies Offering Their Securities to the Public --- Extraordinary Profit/loss, and the items defined as recurring profit (gain)/loss according to the lists of extraordinary profit (gain)/loss in Q&A Announcement No.1 on Information Disclosure for Companies Offering Their Securities to the Public --- Extraordinary Profit/loss, explain reasons □ Applicable √ Not applicable 2. REO and earnings per share Earnings per share Profits during report period Weighted average ROE Basic EPS (RMB/Share) Diluted EPS (RMB/Share) Net profits belong to common stock 5.05% 0.12 0.12 stockholders of the Company Net profits belong to common stock stockholders of the Company after 4.95% 0.12 0.12 deducting nonrecurring gains and losses 3. Difference of the accounting data under accounting rules in and out of China (1) Difference of the net profit and net assets disclosed in financial report, under both IAS (International Accounting Standards) and Chinese GAAP (Generally Accepted Accounting Principles) □ Applicable √ Not applicable (2) Difference of the net profit and net assets disclosed in financial report, under both foreign accounting rules and Chinese GAAP (Generally Accepted Accounting Principles) □ Applicable √ Not applicable 131 山东省中鲁远洋渔业股份有限公司 2017 年半年度报告全文 (3) Explain accounting difference over the accounting rules in and out of China; as for the difference adjustment for data audited by foreign auditing organ, noted the name of such foreign organ 4. Other 132 山东省中鲁远洋渔业股份有限公司 2017 年半年度报告全文 Section XI Documents available for reference (i) The financial statement of the Company with signature and seal from the person in charge of the Company, person in charge of the accounting works and person in charge of accounting; (ii) Original audit report (if applicable) with seal of the CPA and signature and seal of the accountant; (iii) Original text of all documents of the Company as well as manuscript of the announcement that disclosed on website appointed by CSRC Shandong Zhonglu Oceanic Fisheries Co., Ltd. President: Chi Weizhen 31 August 2017 133