Shandong Zhonglu Oceanic Fisheries Co., Ltd.
Annual Report of 2022
Annual Report of 2022
Section I Important Information, Contents, and Definitions
The Company’s Board of Directors, Board of Supervisors, directors, supervisors,
and officers ensure that the content of this annual report is true, accurate, and
complete without any false record, misleading statement, or significant omission and
bear joint and several legal liability.
Lu Lianxing, the principal of the Company, Fu Chuanhai, the person in charge
of accounting, and Lei Lixin, the person in charge of the accounting body
(accounting supervisor), declare that the financial report in this annual report is true,
accurate, and complete.
All directors attended the Board meeting at which this report was considered.
Prospective statements involving the Company’s future plans in this annual
report shall not constitute the Company’s material promises for investors. Investors
and relevant personnel shall have an adequate understanding of the risks and
understand the differences among plans, forecasts, and promises.
The Company describes potential risks in its operations and countermeasures in
“XI. Prospect of the Company’s Future Development” in Section III, “The
Management’s Discussion and Analysis.” Investors are reminded to pay attention to
the relevant content.
This report is prepared in Chinese and English. Where the Chinese and English
texts are interpreted in different ways, the Chinese text shall prevail.
The Company plans not to distribute cash dividends, not to distribute bonus
shares, and not to convert reserves into share capital.
Contents
Section I Important Information, Content, and Definitions................................................................................. .2
Section II Section II Company Introduction and Key Financial Indicators...........................................................6
Section III The Management's Discussion and Analysis......................................................................................11
Section IV Corporate Governance........................................................................................................................25
Section V Environmental and Social Responsibility............................................................................................39
Section VI Important Matters...............................................................................................................................40
Section VII Changes in Shares and Information on Shareholders.......................................................................47
Section VIII Preferred Shares...............................................................................................................................52
Section IX Bonds..................................................................................................................................................53
Section X Financial Report...................................................................................................................................54
List of Documents for Reference
(I) Financial statements with the signatures of the principal of the Company, the person in charge of accounting, and the person in
charge of the accounting body and affixed with the Company’s seal.
(II) The original of the audit report affixed with the accounting firm’s seal and the certified public accountant’s signature and seal.
(III) The originals of all corporate documents and the manuscripts of all announcements disclosed during the Reporting Period.
(IV) The text of the Company’s annual report for 2022 with the signature of the legal representative.
Definitions
Term Refers to Content
The Company, Company, or Zhonglu Oceanic Refers to Shandong Zhonglu Oceanic Fisheries Co., Ltd.
Shandong Guotou Refers to Shandong State-owned Assets Investment Holdings Co., Ltd.
Shandong Provincial State-owned Assets Supervision and
Provincial SASAC Refers to
Administration Commission
CSRC Refers to China Securities Regulatory Commission
This report Refers to The annual report of 2022 prepared by the Company
Section II Company Introduction and Key Financial Indicators
I. Company’s Information
Short stock name Zhonglu B Stock code 200992
Securities exchange where the
Shenzhen Stock Exchange
stocks are listed
Chinese name 山东省中鲁远洋渔业股份有限公司
Short Chinese name 中鲁远洋
Foreign name (if any) Shandong Zhonglu Oceanic Fisheries Company Limited
Acronym of the foreign name
ZLYY
(if any)
Legal representative Lu Lianxing
Registered address 29 Miaoling Road, Laoshan District, Qingdao, Shandong
Postal code of the registered
266061
address
Historical changes of the 57 Lishan Road, Jinan, China→43 Heping Road, Jinan, Shandong→29 Miaoling Road, Laoshan
Company’s registered address District, Qingdao, Shandong
Office address 31 Xianxialing Road, Laoshan District, Qingdao, Shandong
Postal code of the office
266061
address
Website http://www.zofco.cn/
Email zl000992@163.com
II. Contact Person and Contact Information
Board Secretary Securities Affairs Representative
Name Liang Shanglei Tang Yuntao
31 Xianxialing Road, Laoshan District, Qingdao,
Address 31 Xianxialing Road, Laoshan District, Qingdao, Shandong
Shandong
Tel 0532-55717968 0532-55715968
Fax 0532-55719258 0532-55719258
Email zl000992@163.com zl000992@163.com
III. Information Disclosure and Place of Report Storage
Stock exchange website where the Company discloses the annual report China Securities Journal
Media name and website where the Company discloses the annual report http://www.cninfo.com.cn
Place of annual report storage Company’s Board Office
IV. Registration Changes
Unified Social Credit Code 91370000863043102Y
(1) On July 14, 2000, the Company’s business scope changed from “high sea and
long range fishing; the culture, processing, and sales of aquatic products; the import
and export of commodities within the approved scope; the manufacture and sales of
machine-made ice; the manufacture, installation, and repair of refrigeration
equipment” to “high sea and long range fishing; the culture, processing, and sales of
aquatic products; the import and export of commodities within the approved scope;
the manufacture and sales of machine-made ice; the manufacture, installation, and
Changes in the Company’s main repair of refrigeration equipment; the leasing of refrigeration storage.” (2) On
businesses since listing (if any) November 30, 2000, the Company’s business scope changed from “high sea and long
range fishing; the culture, processing, and sales of aquatic products; the import and
export of commodities within the approved scope; the manufacture and sales of
machine-made ice; the manufacture, installation, and repair of refrigeration
equipment; the leasing of refrigeration storage” to “high sea and long range fishing;
the culture, processing, and sales of aquatic products; the import and export of
commodities within the approved scope; the manufacture and sales of machine-made
ice; the manufacture, installation, and repair of refrigeration equipment; refrigeration
and cold storage.” (3) On May 28, 2002, the Company’s business scope changed
from “high sea and long range fishing; the culture, processing, and sales of aquatic
products; the import and export of commodities within the approved scope; the
manufacture and sales of machine-made ice; the manufacture, installation, and repair
of refrigeration equipment; refrigeration and cold storage” to “high sea and long
range fishing; the culture, processing, and sales of aquatic products; the import and
export of commodities within the approved scope; the manufacture and sales of
machine-made ice; the manufacture, installation, and repair of refrigeration
equipment; refrigeration and cold storage; loading, unloading, and handling
services.” (4) On June 6, 2006, the Company’s business scope changed from “high
sea and long range fishing; the culture, processing, and sales of aquatic products; the
import and export of commodities within the approved scope; the manufacture and
sales of machine-made ice; the manufacture, installation, and repair of refrigeration
equipment; refrigeration and cold storage; loading, unloading, and handling services”
to “high sea and long range fishing; the processing and sales of aquatic products; the
import and export of commodities within the approved scope; the manufacture and
sales of machine-made ice; the manufacture, installation, and repair of refrigeration
equipment; refrigeration and cold storage; loading, unloading, and handling
services.” (5) On May 16, 2007, the Company’s business scope changed from “high
sea and long range fishing; the processing and sales of aquatic products; the import
and export of commodities within the approved scope; the manufacture and sales of
machine-made ice; the manufacture, installation, and repair of refrigeration
equipment; refrigeration and cold storage; loading, unloading, and handling services”
to “high sea and long range fishing; the processing and sales of aquatic products; the
import and export of commodities within the approved scope; the manufacture and
sales of machine-made ice; the manufacture, installation, and repair of refrigeration
equipment; refrigeration and cold storage; loading, unloading, and handling services;
property leasing.”
In December 2006, 88,000,000 shares of the Company held by Shandong
Aquaculture Enterprise Group as a state-owned legal person were transferred to
Shandong Guotou through judicial auction procedures and a court ruling. On June
21, 2007, Shandong Guotou received the Confirmation of Transferred Ownership
Registration from China Securities Depository and Clearing Co., Ltd. Shenzhen
Branch, which stated that the transfer procedures had been completed. By then,
Shandong Guotou held 88,000,000 shares of the Company as a state-owned legal
person, accounting for 33.07% of the Company’s total share capital. On July 20,
Changes in the controlling shareholder (if
2018, Shandong Guotou signed the Agreement for the Share Transfer of Shandong
any)
Zhonglu Oceanic Fisheries Co., Ltd. with Lucion Group to receive 37,731,320 shares
held by Lucion Group as a state-owned legal person, accounting for 14.18% of the
Company’s total share capital. On November 16, 2018, Shandong Guotou received
the Confirmation of Transferred Securities Ownership Registration, which stated that
the transfer procedures had been completed. As of December 31, 2022, Shandong
Guotou held 125,731,320 shares of the Company as a state-owned legal person,
accounting for 47.25% of the Company’s total share capital. Hence, Shandong
Guotou became the Company’s controlling shareholder.
V. Other Relevant Information
Accounting firm engaged by the Company
Name of accounting firm Shangkuai Certified Public Accountants (special general partnership)
Office address Floor 25, 755 Weihai Road, Jing’an District, Shanghai
Names of signatory accountants Xu Mao, Ma Haijun
Sponsor institution engaged by the Company to perform continuous supervision during the Reporting Period
□Applicable Not applicable
Financial adviser engaged by the Company to perform continuous supervision during the Reporting Period
□Applicable Not applicable
VI. Key Accounting Data and Financial Indicators
Whether the Company is required to make retroactive adjustments or restate the accounting data for previous years
□Yes No
2022 2021 Increase/Decrease 2020
Operating revenue
985,428,305.37 934,284,403.21 5.47% 966,213,019.66
(RMB)
Net profits attributable
to the Company’s 30,239,511.38 35,526,982.23 -14.88% 29,537,498.13
shareholders (RMB)
Net profits attributable
to the Company’s
shareholders after 22,593,100.41 30,732,469.56 -26.48% 20,070,745.84
deducting nonrecurring
items (RMB)
Net cash flows from
operating activities 12,732,673.10 169,895,824.82 -92.51% 113,245,710.65
(RMB)
Base earnings per share
0.11 0.13 -15.38% 0.11
(RMB/share)
Diluted earnings per
0.11 0.13 -15.38% 0.11
share (RMB/share)
Weighted average
3.12% 3.87% -0.75% 3.30%
return on equity
At the end of 2022 At the end of 2021 Increase/Decrease At the end of 2020
Total assets (RMB) 1,838,429,134.17 1,400,134,960.71 31.30% 1,259,611,234.89
Net assets attributable
to the Company’s 987,072,734.95 933,535,874.90 5.73% 903,248,772.52
shareholders (RMB)
The lower values of the Company’s net profits before and after deducting nonrecurring items for the last three accounting years are all
negative, and the audit report for the last one year shows that there are uncertainties in the Company’s sustainable operation ability.
□Yes No
The lower of the net profits before and after deducting nonrecurring items is negative
□Yes No
VII. Differences in Accounting Data under Domestic and Foreign Accounting Standards
1. Differences in net profits and net assets in the financial report disclosed both according to international
accounting standards and Chinese accounting standards
□Applicable Not applicable
For the Company, there was no difference in net profits and net assets in the financial report disclosed both according to international
accounting standards and Chinese accounting standards during the Reporting Period.
2. Differences in net profits and net assets in the financial report disclosed both according to overseas accounting
standards and Chinese accounting standards
□Applicable Not applicable
For the Company, there was no difference in net profits and net assets in the financial report disclosed both according to overseas accounting
standards and Chinese accounting standards during the Reporting Period.
VIII. Key Financial Indicators by Quarter
Unit: RMB
Q1 Q2 Q3 Q4
Operating revenue 164,162,518.80 206,386,475.96 251,306,507.46 363,572,803.15
Net profits attributable
to the Company’s -5,187,131.71 -3,831,994.07 39,571,643.36 -313,006.20
shareholders
Net profits attributable
to the Company’s
shareholders after -5,901,081.48 -9,616,188.72 39,513,717.28 -2,338,634.15
deducting nonrecurring
items
Net cash flows from
-24,721,530.23 -43,996,555.98 45,929,554.14 35,521,205.17
operating activities
Whether the above financial indicators or the sum of them are significantly different from the quarterly reports or semi-annual reports
disclosed by the Company
□Yes No
IX. Nonrecurring Items and Amounts
Applicable □Not applicable
Unit: RMB
Item Amount for 2022 Amount for 2021 Amount for 2020 Remark
Profit/loss on the
disposal of non-current 5,068,847.43 3,494,326.93 10,164,623.19
assets
Government grants
recognized in profit or
loss (closely related to
the Company’s
business, excluding
government grants that
meet the standards of 2,140,540.56 2,484,454.50 1,802,247.14
national policies and
are received in a
certain quota or
quantity according to
unified national
standards)
Profit/loss on debt
-127,527.03
restructuring
Except for effective
hedging business
related to the
Company’s normal
business, profit/loss on
fair value changes
arising from the
holding of financial
assets held for trading
1,172,034.24 49,972.60 15,287.67
and financial liabilities
held for trading, as
well as investment
gains from the disposal
of financial assets held
for trading, financial
liabilities held for
trading, and available-
for-sale financial assets
Trustee income from
1,273,584.91
trusteeship
Other non-operating
incomes and 117,625.16 798,473.53 -11,692.73
expenditures than the
above
Less: amount of the
1,587,719.20 1,086,874.90 247,241.88
effect of the income tax
amount of the effect of
the minority interest 538,502.13 818,312.96 2,256,471.10
(after tax)
Total 7,646,410.97 4,794,512.67 9,466,752.29 --
Details of other profit/loss items that conform to the definition of nonrecurring items:
□Applicable Not applicable
For the Company, there was no detail of other profit/loss items that conform to the definition of nonrecurring items.
Explanation of the situation where the nonrecurring items listed in the Explanatory Announcement No. 1 on Information Disclosure for
Companies Offering Their Securities to the Public - Nonrecurring Items are defined as recurring items
□Applicable Not applicable
The Company had no situation where it defined the nonrecurring items listed in the Explanatory Announcement No. 1 on Information
Disclosure for Companies Offering Their Securities to the Public - Nonrecurring Items as recurring items.
Section III The Management’s Discussion and Analysis
I. Overview of the Company’s Industry during the Reporting Period
Overview of the Company’s industry: Overseas fishing is China’s strategic industry and plays an important role in building a "maritime
community with a shared future" and "a strong marine country" and implementing the strategy of "going global" and the "Belt and Road"
initiative. It has great significance for increasing the supply of high-quality domestic and foreign aquatic products, ensuring food safety, and
promoting bilateral and multilateral cooperation in the fishery. China’s overseas fishing started in 1985, and China has become one of the
world’s major overseas fishing countries over more than three decades of development. Its operation seas include seas in the exclusive
economic zones of more than 40 countries, the high seas in the Pacific, Atlantic, and Indian Oceans, as well as the seas in Antarctica.
Climbing to the world’s top in size, China’s overseas fishing industry is characterized by a gradually improving industrial structure,
substantially improved equipment, much stronger scientific and technological support, and an ever-improving management system. It is
developing towards "transformation, upgrading, and standardized management." However, in terms of scientific and technological support
and the ability to develop and utilize comprehensive resources, China remains in a lower position with a big gap from advanced countries.
Meanwhile, negative factors such as the rapidly rising costs of human resources and the shortage of workers for the industry, in particular
crew members, are expected to disturb the development of long range fishing on a long-term basis. Companies need to continuously increase
spending on science and technology, accelerate transformation and upgrading, and improve their core competitiveness to actively respond to
fast-changing industrial developments.
Currently, China’s tuna market is witnessing soaring demand in coastal cities, including Shanghai, Beijing, Guangzhou, and Fujian. In
addition, the consumption potential of the inland market is also boosted to form a large market. It is foreseeable that China’s tuna
consumption is bound to increase rapidly in the future with growing living standards and as people shift their focus from eating enough and
high-quality food to eating nutritious and healthy food. China will resolutely implement new development concepts in the development of
the marine economy and develop the marine industry into a high-end, clustered, international, information-based, and intelligent industry
through scientific and technological innovation. This will inject strong forces into the sustainable development of the domestic tuna market.
For Zhonglu Oceanic, a company that always focuses on the marine economy and upholds a sustainable development strategy, the
macroeconomic policies of China will definitely help it achieve stronger development in the future.
II. Company’s Main Businesses during the Reporting Period
During the Reporting Period, the Company’s main businesses included long range fishing, cold storage transportation, and cold storage
processing and trading. These businesses rely on and promote each other, forming a complete industrial chain.
1. Long range fishing
During the Reporting Period, the Company had 25 long range fishing boats, including 7 sets of large tuna seiners, 14 large ultra-low
temperature tuna longliners, 2 medium-sized trawlers, and 2 squid fishing boats, which were operated in the Indian Ocean, the Atlantic, and
the Pacific, respectively. (1) In terms of longline fishing, the Company’s boats mainly worked in the Indian Ocean. In 2022, the boats did not
enter Somalian fisheries. Hence, fish production decreased substantially compared with previous years. To ensure the accomplishment of the
annual target, the 14 boats increased production by various means, including distributed operations and fishery temperature analysis, but
there was no major breakthrough in the production. (2) In terms of seining, the Company’s boats mainly worked in the Atlantic. As the
fishing-off season was shorter than the previous year and there was no delay in the dock repair of boats, the boats went fishing starting in
mid-March 2022. Hence, production increased to a certain extent. (3) The two squid fishing boats arrived at the fisheries in April 2022 and
achieved good production and operating results. The expected investment target was reached. (4) The trawlers in Ghana were undergoing
replacement and thus did not carry out production.
2. Cold storage transportation
During the Reporting Period, the Company’s 7 international cold storage transportation vessels were engaged in operating services with
a reach to major ports around the world. They carried out long range transportation of aquatic products, meat, poultry, vegetables, and fruits.
To accomplish all the economic targets, the Company took a combination of measures, including: (1) continuously strengthening policy
development to reinforce the management foundation; (2) based on the Asia Pacific special cold storage freight market, striving to increase
market shares, strictly controlling costs, and strengthening the equipment maintenance of the vessels to ensure the sailing rate; (3) keeping a
close watch on the changes in exchange rates and timely settling foreign exchange to reduce the exchange rate risk.
3. Cold storage processing and trade
During the Reporting Period, the Company’s cold storage processing and trade segments were affected by the economic downturn.
Hence, the Company focused on controlling inventory and stabilizing its market share. More than 20 tuna species are processed in this
segment, including yellowfin tuna, bluefin tuna, longfin tuna, swordfin tuna, redfin tuna, and blackfin tuna. They are processed into tuna
slices, chops, and plates. The products are mostly exported to Japan, the United States, Russia, the European Union, South Korea, and Israel.
The Company has passed the HACCP, EU, BRC, MSC, and SEDEX certifications. In the domestic market, the Company has built a sales
network where WeChat commerce, e-commerce, supermarkets, and distributed warehouses integrate with each other to form a system. It is
dedicated to providing the Chinese people with dark blue, green, healthy, and perfect tuna delicacies. The Company’s share of the domestic
market is growing year by year.
Business model: The Company conducts business in a centralized and diversified manner.
Market position: China’s top five oceanic fishery companies, the vice-presidential unit of the China Overseas Fisheries Association, and
the presidential unit of the Qingdao Overseas Fisheries Association.
III. Analysis of Core Competitiveness
The Company is a comprehensive and export-oriented company engaged in overseas fishing that was incorporated in July 1999 with the
approval of the Shandong Provincial People’s Government. It has a well-established industrial chain and is a leading enterprise in
Shandong’s overseas fishing industry. As a comprehensive listed fishing company, the Company’s core competitiveness lies in the following
aspects: (1) Through more than 20 years of development, the Company has grown into a comprehensive fishing enterprise that is engaged in
a combination of businesses, including overseas fishing, deep processing, trading, cold storage logistics, marine transportation, the
development and production of marine biomedicines, and entrepreneurship and investment in the modern marine industry. The Company’s
main businesses involve key links in the industrial chain. The businesses of the Company’s operating entities are highly associated, which
meets the conditions for holistically collaborative operations. This provides a guarantee for the Company to reform its operations and
strengthen and extend the industrial chain. (2) As one of the earliest companies engaged in overseas fishing in China, the Company started
production and operations early from a high ground with competent human resources and assets. Through years of dedicated operations, the
Company has gathered a pool of professionals specializing in relevant fields of the overseas fishing industry. (3) The Company’s overseas
fishing industry is part of China’s strategy of "going global" and building a strong marine country, and Shandong’s strategy of building a
strong marine province. There are development opportunities from the adjustment of the industrial depth. The Company has 14 ultra-low
temperature tuna fishing boats engaged in the longline fishing of tuna in the Indian Ocean. This is one of the Company’s main businesses,
making outstanding contributions to the Company’s business performance over the years. The Company’s tuna seining project in the
Atlantic can maintain the steady development of its tuna seining under the protection of ICCAT's strict rules. (4) Cold storage transportation
is an important part of the Company’s main businesses. The Company’s current cold storage transportation fleet is among the industry’s top
in the Southeastern transportation market, in terms of the number of vessels, total tonnage, and profitability. (5) The Company has the
earliest and largest ultra-low temperature refrigeration storage and raw food processing plant in China. Also, the China Tuna Exchange and
the newly built electronic tuna trading platform system strengthen the Company’s advantages in tuna processing and trading. (6) The
Company carries out long range fishing in the Atlantic and Indian Oceans, reaches most of the world’s major ports with its cold storage
transportation, and covers many countries with import and export. With the implementation of the “Belt and Road” strategy, the countries
along the “Belt and Road” will have stronger trust in each other and establish closer cooperation. In addition, the Company and the
governments at all levels have rolled out a suite of development plans and industrial preference policies. All these have brought new
opportunities for the development of the Company.
The Company will leverage the aforementioned advantages to pioneer, innovate, forge ahead, and proactively engage itself in the
conversion of old and new growth drivers. It will accelerate strategic transformation, vigorously extend the industrial chain, and further
improve its influence and competitiveness in domestic and even international markets.
IV. Analysis of Main Businesses
1. Overview
Refer to “II.Company’s Main Businesses during the Reporting Period” in “Section III The Management’s Discussion and Analysis.”
2. Revenue and cost
(1) Components of operating revenue
Unit: RMB
2022 2021
Year-on-year
Proportion in Proportion in increase/decrease
Amount Amount
operating revenue operating revenue
Total operating
985,428,305.37 100% 934,284,403.21 100% 5.47%
revenue
By industry
Long range fishing 397,948,714.28 40.38% 382,802,775.17 40.97% 3.96%
Cold storage
104,833,584.94 10.64% 92,334,301.43 9.88% 13.54%
transportation
Cold storage
processing and 530,394,523.46 53.82% 619,092,271.58 66.26% -14.33%
trading
Others 6,206,115.41 0.63% 4,336,099.74 0.46% 43.13%
Offset of internal
-53,954,632.72 -5.48% -164,281,044.71 -17.58% 67.16%
transactions
By product
Long range fishing 397,948,714.28 40.38% 382,802,775.17 40.97% 3.96%
Cold storage
104,833,584.94 10.64% 92,334,301.43 9.88% 13.54%
transportation
Cold storage
processing and 530,394,523.46 53.82% 619,092,271.58 66.26% -14.33%
trading
Others 6,206,115.41 0.63% 4,336,099.74 0.46% 43.13%
Offset of internal
-53,954,632.72 -5.48% -164,281,044.71 -17.58% 67.16%
transactions
By region
China 614,027,918.84 62.31% 434,438,548.98 46.50% 41.34%
Foreign countries 425,355,019.25 43.16% 664,126,898.94 71.08% -35.95%
Offset of internal
-53,954,632.72 -5.48% -164,281,044.71 -17.58% 67.16%
transactions
By sales model
Direct sales 985,428,305.37 100.00% 934,284,403.21 100.00% 5.47%
(2) Industries, products, regions, sales models accounting for more than 10% of the Company’s operating revenue or operating
profits
Applicable □Not applicable
Unit: RMB
Year-on-year Year-on-year Year-on-year
Operating Gross profit increase/decrea increase/decrea increase/decrea
Operating costs
revenue margin se in operating se in operating se in gross
revenue costs profit margin
By industry
Long range
397,948,714.28 346,060,080.63 13.04% 3.96% -4.97% 8.17%
fishing
Cold storage
104,833,584.94 89,172,040.28 14.94% 13.54% 24.43% -7.45%
transportation
Cold storage
processing and 530,394,523.46 490,294,383.82 7.56% -14.33% -14.90% 0.62%
trading
By product
Long range
397,948,714.28 346,060,080.63 13.04% 3.96% -4.97% 8.17%
fishing
Cold storage
104,833,584.94 89,172,040.28 14.94% 13.54% 24.43% -7.45%
transportation
Cold storage
processing and 530,394,523.46 490,294,383.82 7.56% -14.33% -14.90% 0.62%
trading
By region
China 614,027,918.84 522,170,827.43 14.96% 41.34% 33.62% 4.91%
Foreign
425,355,019.25 405,509,214.60 4.67% -35.95% -34.92% -1.51%
countries
By sales model
Direct sales 985,428,305.37 873,701,560.02 11.34% 5.47% 2.84% 2.27%
In the case where the statistical basis of the Company’s main business data was adjusted during the Reporting Period, the Company’s
adjusted main business data for the last one year on the statistical basis as at the end of the Reporting Period
□Applicable Not applicable
(3) Whether the Company’s revenue from the sales of physical goods exceeds its revenue from the provision of labor services
Yes □No
Year-on-year
Industry category Item Unit 2022 2021
increase/decrease
Sales volume Ton 30,918 29,764 3.88%
Production Ton 38,532 27,122 42.07%
Long range fishing
Inventory Ton 14,309 6,695 113.73%
Sales volume Ton 12,629 15,335 -17.65%
Cold storage
Production Ton 13,867 13,859 0.06%
processing and
trading Inventory Ton 5,241 4,003 30.93%
Reasons for year-on-year changes by more than 30%
Applicable □Not applicable
In the case of long range fishing, the total production increased due to the increase in production from seining. The inventory increased due
to the increase in fishing production and the long backhaul period. In the case of cold storage processing and trading, the inventory increased
due to the increased storage of raw materials.
(4) Performance of the Company’s significant sales contracts and significant purchase contracts as of the Reporting Period
□Applicable Not applicable
(5) Components of operating costs
Industry category
Unit: RMB
2022 2021 Year-on-year
Industry
Item Proportion in Proportion in increase/decrea
category Amount Amount
operating costs operating costs se
Fees for the
Long range
common of 12,033,931.09 3.48% 11,752,188.47 3.23% 2.40%
fishing
piscary
Long range
Raw materials 55,675,851.59 16.09% 63,706,896.43 17.49% -12.61%
fishing
Long range
Fuel power 125,427,447.13 36.24% 85,770,498.01 23.55% 46.24%
fishing
Long range
Staff salaries 53,803,238.26 15.55% 61,052,745.16 16.76% -11.87%
fishing
Long range Depreciation
21,660,438.48 6.26% 27,030,787.00 7.42% -19.87%
fishing costs
Long range
Others 77,459,174.08 22.38% 114,860,022.94 31.54% -32.56%
fishing
Long range
Total 346,060,080.63 100.00% 364,173,138.00 100.00% -4.97%
fishing
Cold storage
Staff salaries 41,023,514.31 46.00% 32,096,510.72 44.79% 27.81%
transportation
Cold storage Depreciation
11,185,555.19 12.54% 8,694,026.00 12.13% 28.66%
transportation costs
Cold storage
Supplies 4,453,482.41 4.99% 7,687,124.29 10.73% -42.07%
transportation
Cold storage
Inspection costs 475,180.74 0.53% 1,206,520.78 1.68% -60.62%
transportation
Cold storage
Insurance costs 4,458,991.35 5.00% 4,177,552.31 5.83% 6.74%
transportation
Cold storage
Fuel 4,980,104.66 5.58% 3,930,918.41 5.49% 26.69%
transportation
Cold storage
Repair costs 5,083,520.14 5.70% 5,860,423.67 8.18% -13.26%
transportation
Cold storage
Others 17,511,691.48 19.64% 8,011,579.54 11.18% 118.58%
transportation
Cold storage
Total 89,172,040.28 100.00% 71,664,655.72 100.00% 24.43%
transportation
Cold storage
Direct raw
processing and 413,600,999.63 84.36% 495,886,938.20 86.07% -16.59%
materials
trading
Cold storage
Packaging
processing and 14,814,847.62 3.02% 16,571,451.14 2.88% -10.60%
materials
trading
Cold storage
processing and Salaries 28,688,397.47 5.85% 29,735,610.88 5.16% -3.52%
trading
Cold storage
processing and Depreciation 6,725,714.54 1.37% 6,672,797.90 1.16% 0.79%
trading
Cold storage
processing and Others 26,464,424.56 5.40% 27,251,786.15 4.73% -2.89%
trading
Cold storage Total 490,294,383.82 100.00% 576,118,584.27 100.00% -14.90%
processing and
trading
Others Labor costs 119,830.00 5.56% 90,000.00 4.70% 33.14%
Out-of-pocket
Others 5,077.37 0.24% 3,999.90 0.21% 26.94%
expenses
Depreciation
Others 1,659,129.99 77.04% 1,452,005.25 75.83% 14.26%
costs
Others Electricity bills 141,118.51 6.55% 160,327.67 8.37% -11.98%
Others Repair costs 85,112.57 3.95% 58,598.51 3.06% 45.25%
Heating
Others 143,268.86 6.65% 149,915.29 7.83% -4.43%
expenses
Others Total 2,153,537.30 100.00% 1,914,846.62 100.00% 12.47%
Offset of
-
internal -53,978,482.01
164,283,093.86
transactions
Note
The components of the Company’s operating costs for the year are shown in the above table, which share the same statistical basis as the
previous year.
(6) Whether there was any change in the consolidated scope during the Reporting Period
□Yes No
(7) Any significant changes or adjustments to the Company’s businesses, products, or services during the Reporting Period
□Applicable Not applicable
(8) Key customers and key suppliers
The Company’s key customers
Total sales to the top five customers (RMB) 329,338,063.80
Proportion of the total sales to the top five customers in the total sales for the year 33.42%
Proportion of the sales to the related parties of the total sales to the top five customers in
0.00%
the total sales for the year
The Company’s top five customers
Proportion in the total sales
No. Customer’s name Sales (RMB)
for the year
1 F.C.F. Fishery Co., Ltd. 104,833,584.90 10.64%
2 Japan Weekly Co., Ltd. 69,577,677.97 7.06%
Qingdao Hengxin Aquatic
3 59,884,132.32 6.08%
Products Co., Ltd.
Zhoushan Jiahui Marine Food
4 52,218,508.01 5.30%
Co., Ltd.
Rongcheng Haizhirun Aquatic
5 42,824,160.53 4.35%
Food Co., Ltd.
Total -- 329,338,063.80 33.42%
Explanation of other situations related to the key customers
□Applicable Not applicable
Information of the Company’s key suppliers
Total purchases from the top five suppliers (RMB) 338,656,177.90
Proportion of the total purchases from the top five suppliers in
44.25%
the total purchases for the year
Proportion of the purchases from the related parties of the total
0.00%
purchases from the top five suppliers in the total purchases for
the year
The Company’s top five suppliers
Proportion in the total
No. Supplier’s name Amount of purchase (RMB)
purchase for the year
Rongcheng Overseas
1 81,417,541.07 10.64%
Fisheries Co., Ltd.
Rongcheng Rongyuan
2 79,764,864.21 10.42%
Fisheries Co., Ltd.
3 GOIL COMPANY LIMITED 78,631,832.54 10.28%
Yantai Jingyuan Fisheries
4 56,712,405.00 7.41%
Co., Ltd.
CNFC Overseas Fisheries
5 42,129,535.07 5.51%
Co., Ltd.
Total -- 338,656,177.90 44.25%
Explanation of other situations related to the key suppliers
□Applicable Not applicable
3. Expenses
Unit: RMB
Year-on-year Explanation of
2022 2021
increase/decrease significant changes
Selling expenses 3,380,701.10 3,548,619.96 -4.73%
Management expenses 64,374,235.07 64,478,320.35 -0.16%
Net exchange gains
Financial expenses -10,573,553.15 12,474,514.08 -184.76%
increased
R&D spending
R&D expenses 3,394,089.25 765,456.70 343.41%
increased
4. R&D spending
Applicable □Not applicable
Expected impact on the
Name of key R&D
Purpose Progress Intended objective Company’s future
project
development
Deep processing and
Innovative Recycle high-value
To develop and produce
of Auxiliary Completed Recycle of byproducts development of aquatic
higher value-added products
Ingredients of Tuna products
To improve the intelligent
office work efficiency for
Ensuring vessel safety,
vessels, achieve the shore
Improvement of intelligent Expected to be preventing oil
GuiderStar Full- base’s real-time monitoring
equipment applications and completed in contamination, and
Scale Vessel and management of vessels
software 2023 providing information
Application and key machinery and
for energy conservation
equipment, and reflect the
and emission reduction
“people-centered”
humanistic care concept
To improve the professional Creating higher take
level and efficiency of values and reducing the
Research on New
fishing boats, reduce fishing Expected to be To make new fishing net time and cost of
Fishing Net
production costs, increase completed in technology promote seining replacing fishing nets
Application
economic returns on 2023 and effectively realize to create more fishing
Technology for
fishing, and effectively application values time for boats, thus
Large Tuna Seiners
reduce pollution in the further increasing the
marine environment take
The Company’s R&D personnel
2022 2021 Changes (%)
Number of R&D personnel 31 10 210.00%
(person)
Proportion of R&D personnel 3.29% 1.09% 2.20%
Educational backgrounds of R&D personnel
Bachelor’s degree 25 3 733.33%
Master’s degree 2 1 100.00%
Diploma 4 6 -33.33%
Age groups of R&D personnel
Under 30 years old 2 7 -71.43%
30 to 40 years old 18 3 500.00%
Above 40 years old 11 0
Information of the Company’s R&D spending
2022 2021 Changes (%)
R&D spending (RMB) 3,394,089.25 765,456.70 343.41%
Proportion of R&D spending
0.34% 0.08% 0.26%
in operating revenue
Capitalized amount of R&D
0.00 0.00 0.00%
spending (RMB)
Proportion of capitalized
R&D spending in R&D 0.00% 0.00% 0.00%
spending
Reasons for and impact of significant changes in the Company’s R&D personnel
□Applicable Not applicable
Reasons for significant changes in the proportion of total R&D spending in operating revenue as compared with the previous year
Applicable □Not applicable
The number of R&D projects increased during the Reporting Period, which caused an increase in the R&D spending.
Reasons for substantial changes in the capitalization rate of R&D spending and explanation of the reasonableness
□Applicable Not applicable
5. Cash flow
Unit: RMB
Year-on-year
Item 2022 2021
increase/decrease
Subtotal of cash inflows from operating activities 1,097,521,246.08 1,055,769,245.34 3.95%
Subtotal of cash outflows for operating activities 1,084,788,572.98 885,873,420.52 22.45%
Net cash flows from operating activities 12,732,673.10 169,895,824.82 -92.51%
Subtotal of cash inflows from investment activities 279,235,423.12 10,169,097.24 2,645.92%
Subtotal of cash outflows for investment activities 508,356,110.72 336,947,752.68 50.87%
Net cash flows from investment activities -229,120,687.60 -326,778,655.44 29.89%
Subtotal of cash inflows from financing activities 454,300,000.00 227,138,476.01 100.01%
Subtotal of cash outflows for financing activities 229,344,287.69 111,583,222.48 105.54%
Net cash flows from financing activities 224,955,712.31 115,555,253.53 94.67%
Increase in cash and cash equivalents 17,615,036.32 -46,086,305.94 138.22%
Key factors for significant year-on-year changes in relevant data
Applicable □Not applicable
(1) In the case of net cash flows from operating activities, cash outflows increased year-on-year, mainly due to the increase in expenditure
for the purchase of fuel oil and raw materials during the Reporting Period.
(2) In the case of net cash flows from investment activities, cash outflows decreased year-on-year, mainly due to the decrease in expenditure
for the purchase and construction of fixed assets during the Reporting Period.
(3) In the case of net cash flows from financing activities, cash inflows increased year-on-year mainly because companies under the
Company absorbed minority shareholders’ investment during the Reporting Period.
Reasons for significant differences between the net cash flows from operating activities during the Reporting Period and the net profits for
the year
Applicable □Not applicable
(1) The amount of asset impairment provisions contributing to the differences is RMB54,630,000;
(2) The amount of fixed asset depreciation contributing to the differences is RMB58,220,000;
(3) The amount of inventory contributing to the differences is RMB-207,170,000;
(4) The amount of operating receivables and payables contributing to the differences is RMB71,260,000;
The above amounts resulted in significant differences between the net profits and the net cash flows from operating activities.
V. Analysis of Non-main Businesses
Applicable □Not applicable
Unit: RMB
Proportion in total Whether it is
Amount Reasons of formation
profits sustainable
Investment incomes
mainly comes from the
Investment income 773,612.72 1.87% No
disposal of financial
assets held for trading.
Asset impairment
Asset impairment -60,788,080.15 -146.96% mainly comes from No
inventory write-downs.
Non-operating income
mainly comes from the
recovery of other
Non-operating income 176,255.05 0.43% No
receivables for which
provisions have been
put aside for bad debts.
Non-operating
Non-operating expenses mainly come
71,313.09 0.17% No
expenses from the scrapping of
fixed assets.
VI. Analysis of Assets and Liabilities
1. Significant changes in asset components
Unit: RMB
At the end of 2022 At the beginning of 2022 Explanation of
Increase/Decrea
Proportion in Proportion in significant
Amount Amount se (%)
total assets total assets changes
Monetary
227,264,342.31 12.36% 210,573,782.49 15.04% -2.68%
capital
Accounts
57,833,671.83 3.15% 37,806,586.91 2.70% 0.45%
receivable
Inventory 426,125,273.33 23.18% 277,095,357.75 19.79% 3.39%
Investment
28,782,856.07 1.57% 30,108,932.75 2.15% -0.58%
property
Long-term
equity 1,983,923.48 0.11% 0.11%
investment
Fixed assets 630,970,963.32 34.32% 476,894,877.56 34.06% 0.26%
Construction in
344,727,296.32 18.75% 165,273,027.75 11.80% 6.95%
progress
Right-of-use
410,045.97 0.02% 2,354,943.86 0.17% -0.15%
assets
Short-term
20,024,144.40 1.09% 10,013,291.67 0.72% 0.37%
borrowings
Contractual
49,576,606.91 2.70% 13,220,675.60 0.94% 1.76%
liabilities
Long-term
283,557,577.77 15.42% 149,393,532.37 10.67% 4.75%
borrowings
The overseas assets account for a higher proportion
Applicable □Not applicable
Proportion
Control Whether
of overseas
Specific Operation measures to Return on there is any
Reasons of assets in
content of Asset size Location model guarantee assets significant
formation the
assets asset impairment
Company’s
security risk
net assets
HABITAT Wholly-
INTERNA owned Vessel and
289,784,63 Panama Independen 15,776,919
TI ONAL subsidiary personnel 23.22% No
2.26 t operations .07
CORPORA incorporate insurance
TION d overseas
Professiona
l
manageme
ZHONG
Wholly- nt team
GHA
owned stationed -
FOODS 136,731,93 Independen
subsidiary Ghana overseas 6,221,530.3 10.96% No
COMPAN 7.51 t operations
incorporate and vessel 4
Y
d overseas and
LIMITED
personnel
insurance
2. Assets and liabilities measured at fair value
□Applicable Not applicable
3. Restrictions over asset rights as of the end of the Reporting Period
Item Period-end book value Reasons
Fixed assets 101,156,162.87 Mortgage loans
Construction in progress 330,769,336.43 Mortgage loans
Intangible assets 4,795,207.52 Mortgage loans
Total 436,720,706.82
VII. Investment Analysis
1. Overview
Applicable □Not applicable
Investment amount for the Reporting Investment amount for the same period
Changes (%)
Period (RMB) in the previous year (RMB)
360,025,731.57 329,564,194.60 9.24%
2. Significant equity investment acquired during the Reporting Period
Applicable □Not applicable
Unit: RMB
Progr
Share Gains Any Discl Discl
Inves Inves Inves ess as Expe
Inves Main holdi Fund Prod /losse litigat osure osure
tment tment Coop tment of the cted
tee’s busin ng sourc uct s on ion date index
meth amou erator perio balan inco
name esses propo e type inves invol (if (if
od nt d ce me
rtion tment ved any) any)
sheet
date
Zhon
glu Proce
Ocea ssing
HAB
nic and
ITAT
(Qing tradin
INTE
dao) g of
RNA
Indus aquat Capit Equit
96,00 TI Indef Com
trial ic al 66.63 Bank y
0,000 ONA inite plete No
Inves produ incre % loans inves
.00 L d
tment cts ase tment
COR
and and
POR
Deve cold
ATIO
lopm chain
N
ent logist
Co., ics
Ltd.
96,00
Total -- -- 0,000 -- -- -- -- -- -- 0.00 0.00 -- -- --
.00
3. Significant non-equity investment in progress during the Reporting Period
Applicable □Not applicable
Unit: RMB
Reaso
ns for
failure
Total
Total to
actual
Wheth Invest incom reach
Industr invest
er it is ment e the
ies ment Disclo
Invest an amoun Expect realize planne Disclo
involv amoun Project sure
Project ment invest t for Fund ed d as of d sure
ed in t as at progre index
name metho ment the source invest the end progre date (if
the the end ss (if
d in Report ment of the ss and any)
invest of the any)
fixed ing Report realize
ment Report
assets Period ing the
ing
Period expect
Period
ed
incom
e
Proces
sing
and The
Zhongl
trading design
u
of ed
Marine Self- 23,390 73,440 Self-
aquatic capacit
Innova constr Yes ,949.7 ,949.7 owned 0.00
produc y is
tion uction 5 5 fund
ts and not
Industr
cold reache
y Park
chain d.
logisti
cs
The
Constr Self- design
uction owned ed
Self- 189,73 330,76
of two Fisher fund 92.00 capacit
constr Yes 8,926. 9,336. 0.00
large y and % y is
uction 25 43
tuna bank not
seiners loans reache
d.
213,12 404,21
Total -- -- -- -- -- 0.00 0.00 -- -- --
9,876. 0,286.
00 18
4. Financial asset investment
(1) Securities investment
□Applicable Not applicable
The Company did not have securities investments during the Reporting Period.
(2) Derivative investment
□Applicable Not applicable
The Company did not have derivative investments during the Reporting Period.
5. Use of raised funds
□Applicable Not applicable
The use of raised funds was not applicable to the Company during the Reporting Period.
VIII. Sale of Significant Assets and Equity
1. Sale of significant assets
□Applicable Not applicable
The Company did not sell any significant assets during the Reporting Period.
2. Sale of significant equity
□Applicable Not applicable
IX. Analysis of Key Shareholding Companies
Applicable □Not applicable
Key subsidiaries and shareholding companies affecting the Company’s net profits by more than 10%
Unit: RMB
Company Company Main Registered Operating Operating
Total assets Net assets Net profits
name type business capital revenue profits
Shandong
Zhonglu
Oceanic Food 476,018,27 339,663,59 530,394,52 20,468,657. 18,549,849.
Subsidiary 104,322,30
(Yantai) processing 4.13 5.62 3.46 54 33
0.00
Food Co.,
Ltd.
HABITAT
Cold
INTERNA
storage 289,784,63 199,739,33 85,521,704. 15,776,919. 15,776,919.
TIONAL Subsidiary 12,476,145.
transportati 2.26 0.80 69 07 07
CORPORA 60
on
TION
Shandong
Zhonglu
Haiyan Long range 221,617,34 513,273,61 408,926,22 274,187,93 8,018,735.9 8,062,035.3
Subsidiary
Oceanic fishing 9.00 6.50 1.39 0.05 0 0
Fisheries
Co., Ltd.
Acquisition and disposal of subsidiaries during the Reporting Period
□Applicable Not applicable
Information of key shareholding companies
Shandong Zhonglu Haiyan Oceanic Fisheries Co., Ltd.: Operating profits for the Reporting Period reached RMB8,018,735.90,
representing a substantial increase of 326.41% year-on-year, which was mainly due to the increase in production from seining and the rising
sales prices;
Shandong Zhonglu Oceanic (Yantai) Food Co., Ltd.: Operating profits for the Reporting Period reached RMB20,468,657.54,
representing a decrease of 17.58% year-on-year, which was mainly because the export of tuna and other relevant products was greatly
impacted by a combination of factors, including the economic downturn, the conflict between Russia and Ukraine, and the weak demand on
the markets of Japan, the United States, the European Union, and South America.
HABITAT INTERNATIONAL CORPORATION: Operating profits for the Reporting Period reached RMB15,776,919.07, representing
a substantial increase of 72.28% year-on-year, which was mainly due to more lease incomes from new cold storage transportation vessels
and exchange rate changes.
X. Structured Entities Controlled by the Company
□Applicable Not applicable
XI. Prospects of the Company’s Future Development
With the implementation of its marine strategy, China has rolled out a series of preferential policies for the overseas fishing industry
since it is an important part of the ocean economy. China’s overseas fishing industry is developing rapidly, with its long range fishing fleet
continuously expanding. However, obtaining resources is still the main focus, and raw fish remains the main product while high value-added
processed products, market development, sales, and the production service support system are still weak. Currently, as China is carrying out
the conversion of old and new growth drivers, the overseas fishing industry will welcome new opportunities for adjustment, transformation,
and development. It is expected that the future development trends will be as follows: First, the oceanic fishing industry will be stabilized.
The fishing of pelagic fish, cephalopods, and Antarctic krill will be expanded. Second, the trans-oceanic fishing industry will be
strengthened and improved. The transformation and upgrade of this industry will be promoted through a variety of measures, including
changing the cooperation models, improving management, upgrading fishing boats, and the merger and acquisition of projects. Third, the
cold storage, processing, and trading of aquatic products will be developed through the improvement of the industrial structure and the
extension of the industrial chain. Fourth, more efforts will be made to strengthen the development of the production service support system
for the fishing industry. Overseas oceanic fishing bases and offshore production platforms will be vigorously developed to carry out value-
added business activities, including fishing wharf services, fish warehousing and logistics, fishing boat repairs, marine transportation,
replenishment, and refueling services.
(I) Prospects of the Company’s main businesses
1. Long range fishing
The Company will continue to develop long range fishing centered around seining and longline fishing. In terms of tuna seining, the
two (sets of) newly built large seiners will sail to central and western Pacific to expand seining production on the basis of the existing seven
(sets of) seiners and increase profit growth points. In terms of longline fishing, the Company has strong support from Somalia and Tanzania
for maintaining high yields. Since four years ago, the Company’s longliners have reentered the Tanzanian cooperative area for fishing
production. So far, the production conditions have turned out to be good, and the fish production has increased markedly. At the same time,
the Company’s negotiation on the common of piscary to Somalia has ended with success. After paying the cooperation fees, the Company
will be allowed to enter the area to fish. According to the production plan, after the common of piscary in Tanzania ends, the Company will
shift to the Somalian cooperation area. The Company will make good use of the piscary advantage to stabilize production and increase
incomes. In terms of seiners, the Company will continue to invest in the two seiners. As of the end of 2022, 80% of the seiner building had
been completed. In terms of trawling, the Company plans to build two new fishing vessels that have advanced equipment, are suitable for
modern marine fishing, and conform to the country’s industrial policies to replace the two existing old trawlers operating in Ghana.
2. Cold storage transportation
The Company will strengthen and boost its cold transportation service. Oceanic cold storage transportation is always a stable business
segment in the Company’s business performance. Depending on the specific situation of the cold storage transportation market, the
Company will continue to phase out old vessels with small tonnages and upgrade relatively younger cold storage transportation vessels with
moderate tonnages to maintain the position of its transportation fleet in the industry. Meanwhile, the Company will explore other types of
vessel transportation services to expand its sea transportation services and increase profitability.
3. Cold storage processing and trading
The Company will proactively develop and extend its cold storage processing and trading services. First, the Company will seek
development through innovation. Centered around the featured tuna industry, the Company will continuously improve its product mix,
competitiveness and anti-risk capabilities. Second, the Company will further increase the scale of the backhaul, purchase, processing, and
sales of self-caught tuna to vigorously develop domestic and international markets. Third, while maintaining its existing businesses, the
Company will step up efforts to develop new products, deep-processed products, and other high-value-added products to foster new profit
growth points. Fourth, the Company will strengthen the innovation and implementation of production processes and improve production
automation to improve production efficiency, save production costs, and enhance production effectiveness. Fifth, the Company will reinforce
brand building and promotion and maintain the leading position of its products in China.
(II) Future development strategies
Closely aligning the strategic goals for its development, the Company will judge the overseas fishing situation, follow the development
requirements for listed companies, grasp opportunities to expedite development, prevent risks, and stabilize business performance. The
Company will also stick to the overseas fishing industry as its main business, increase brand visibility, and extend the industrial chain
according to the development vision of “stabilizing fishing, consolidating the industrial chain model that integrates cold storage, processing,
trading, and transportation, improving product structures, and carrying out transformation and upgrading.”
(III) Work plan for 2023
The Company will uphold the concept of “reform-based, innovation-driven, standardized, and steady development,” revolve around the
guidelines for “maintaining growth, emphasizing standards, adjusting structures, and promoting transformation,” and focus on improving its
development quality. With the purpose of increasing economic returns, the Company will convert old growth drivers into new ones, develop
markets, and drive the construction of key projects. It will strengthen the business foundation, seek progress while maintaining stable
development, blaze new trails, create new models, and take a combination of measures. Centered around the key problems restricting its
development, the Company will manage production, operations, transformation, market development, and standardized management. It will
proactively cultivate new profit growth points and continuously improve its control, competitiveness, influence, and anti-risk capabilities to
ensure the accomplishment of the annual targets. In 2023, the Company will do the following work: 1) improve the management of seining
projects, develop more supporting measures, develop diverse markets, increase project profitability, and proactively drive the construction of
the two (sets of) large seiners to cultivate profit growth points; 2) stabilize the profitability of the longline tuna fishing project in the Indian
Ocean, explore new operating fisheries, dispatch vessels on a scientific basis, conduct business in accordance with laws and regulations, and
ensure stable growth in fishing production; 3) strengthen and improve cold storage transportation and purchase and build modern and
intelligent transportation vessels; 4) expedite the abandonment of backward capacity and build two new fishing vessels that have advanced
equipment, are suitable for modern marine fishing, and conform to the country’s industrial policies to replace the two old trawlers in the sea
area of Ghana; 5) proactively develop and extend cold storage processing and trading services, step up efforts to develop new products,
deep-processed products, and other high-value-added products, create new sales models, and cultivate new profit growth points; 6) promote
the Company’s transformation to an innovation-driven company through “technological, product, business, and management innovation.”
(IV) Risks facing the Company and countermeasures
1. Risk of fishing resource fluctuations: Fishing resources usually fluctuate, and sometimes the fluctuations are big. Greater decreases in
fishing resources will have a greater impact on the Company’s profits. Cyclic changes, climates, hydrological conditions, and other relevant
conditions are all likely to cause fluctuations in fishing resources.
Countermeasures: The Company will develop new fisheries, dispatch vessels on a scientific basis, upgrade fishing and production
equipment, and gradually improve production vessels. It will make science-based and reasonable arrangements for vessel maintenance,
equipment repair, materials, fish baits, spare parts, and logistical support for personnel to ensure high sailing rates.
2. Risk of price fluctuations: Demand from overseas markets is shrinking in the context of the economic downturn, causing lingering
impacts on the aquatic processing industry. Coupled with frequent demurrage and persistently high sea freight rates, fish product prices
fluctuate substantially.
Countermeasures: The Company will accelerate the building of a new paradigm focusing on domestic circulation with mutual
promotion between domestic and international circulations. It will precisely target the domestic market, develop cooked products that
accommodate consumers’ needs, and expand domestic sales channels.
3. Risk of exchange risk fluctuations: Exchange rates fluctuate greatly due to the economic downturn and the war between Russia and
Ukraine.
Countermeasures: The Company will keep a close watch on the exchange rate changes and settle exchanges promptly. Meanwhile, the
Company will strengthen cooperation with financial institutions in the management of exchange rate risk, regulate the balance of foreign-
currency assets to the maximum extent possible, and use hedging instruments to mitigate exchange risk when necessary.
4. Risk of safety accidents.
Countermeasures: The Company will uphold the production safety policies, implement production safety measures, conduct safety
education regularly, prevent major safety accidents, and make tangible efforts to place production safety as a top priority.
XII. Reception of Surveys, Communications, and Interviews during the Reporting Period
Applicable □Not applicable
Type of Major content
Basic
Time of Place of Mode of reception Reception discussed and
information
reception reception reception subject subject documents
index of survey
provided
The Company’s
production,
operations, and
Individual other relevant
January 6, 2022 The Company Site survey Individual None
investors information
were discussed;
no documents
were provided.
The Company’s
production,
operations, and
Phone Individual other relevant
March 9, 2022 Online Individual None
communication investors information
were discussed;
no documents
were provided.
The Company’s
strategic plans
and other
Phone Individual relevant
April 20, 2022 Online Individual None
communication investors information
were discussed;
no documents
were provided.
May 12, 2022 Online Phone Individual Individual The Company’s None
communication investors production,
operations, and
other relevant
information
were discussed;
no documents
were provided.
The
government
grants received
by the
Phone Individual Company and
July 14, 2022 Online Individual None
communication investors other
information
were discussed;
no documents
were provided.
The Company’s
stock price was
November 14, Phone Individual
Online Individual discussed; no None
2022 communication investors
documents
were provided.
Section IV Corporate Governance
I. Basic status of corporate governance
During the reporting period, in accordance with the requirements of laws, regulations, and relevant normative documents
such as the Company Law, the Securities Law, the Governance Standards for Listed Companies, and Self-regulatory
Guideline No. 1 of the Shenzhen Stock Exchange for Listed Companies - Standardized Operation of Main Board Listed
Companies, the Company continuously improved its corporate governance structure, further standardized its operations,
and improved its governance level. The shareholders’ meeting, board of directors, and supervisory board can all be held
strictly in accordance with regulations and norms, and all directors and supervisors can fulfill their duties
conscientiously and diligently. The Company believes that there is no difference between the actual situation of
corporate governance during the reporting period and the requirements of the Company Law and relevant regulations of
the China Securities Regulatory Commission.
Are there significant differences between the actual situation of corporate governance and laws, administrative
regulations and the regulations on listed company governance issued by the China Securities Regulatory Commission?
□Yes No
There is no significant difference between the actual situation of corporate governance and laws, administrative
regulations and the regulations on listed company governance issued by the China Securities Regulatory Commission.
II. The independence of the Company relative to its controlling shareholders and actual controllers
in guaranteeing the Company’s assets, personnel, finance, institution, business, and other aspects
During the reporting period, the Company strictly operated in accordance with laws, regulations, and rules such as the
Company Law and the Articles of Association, and established a sound corporate governance structure. The Company is
completely separated from its controlling shareholders and actual controllers in terms of assets, personnel, finance,
institution, and business, and has independent and complete business and independent management capabilities.
1. Asset integrity. The Company’s assets are complete and independent, and have clear ownership relationships. No
assets or funds are occupied by the controlling shareholder, and the Company's assets are completely independent of the
controlling shareholder.
2. Personnel independence. The Company has established an independent HR system and a complete salary management
system, with an independent workforce. The Company's general manager, deputy general manager, financial manager,
board secretary and other senior management personnel have not held any administrative positions other than directors
or supervisors in the controlling shareholders or other enterprises under their control, and all receive compensations from
the Company. The Company's financial personnel also do not hold part-time positions in controlling shareholders or
other enterprises under their control.
3. Financial independence. The Company sets up an independent financial department and accounting personnel, a
complete and independent financial accounting system, and a standardized financial accounting system, capable of
making financial decisions independently. An independent bank account is opened and taxes are paid independently.
4. Institutional independence. The Company has a sound organizational structure that is completely separate from the
controlling shareholders in terms of institution. The shareholders' meeting, board of directors, and supervisory board all
operate independently and have independent decision-making and execution capabilities.
5. Business independence. The production, operation, and administrative management of the Company are completely
independent of the controlling shareholders, and there is no horizontal competition with the controlling shareholders.
III. Horizontal competition
□Applicable Non applicable
IV. Relevant information on annual and extraordinary shareholders' meetings held during the
reporting period
1. Situation of the shareholders' meeting during this reporting period
Investor
Date of Date of
Session Type participation Resolution
holding disclosing
ratio
Refer to the Announcement on the Resolution of
The first
the First Extraordinary General Meeting of
extraordinary general Extraordinary Jan. 6, Jan. 7,
49.68% Shareholders in 2022 (Announcement No. 2022-
meeting of general meeting 2022 2022
04) disclosed in the China Securities Journal,
shareholders in 2022
Hong Kong Business Daily, and CNINFO
Refer to the Announcement on the Resolution of
The second
the Second Extraordinary General Meeting of
extraordinary general Extraordinary Jan. 26, Jan. 27,
47.30% Shareholders in 2022 (Announcement No. 2022-
meeting of general meeting 2022 2022
06) disclosed in the China Securities Journal,
shareholders in 2022
Hong Kong Business Daily, and CNINFO
Refer to the Announcement on the Resolution of
2021 Annual General the 2021 Annual General Meeting of Shareholders
Annual general May 12, May 13,
Meeting of 48.26% (Announcement No. 2022-20) disclosed in the
meeting 2022 2022
Shareholders China Securities Journal, Hong Kong Business
Daily, and CNINFO
2. Preferred shareholders with restored voting rights request to convene an extraordinary shareholders' meeting
□Applicable Non applicable
V. Information on directors, supervisors, and senior management personnel
1. Basic status
Number
Number Number Number
of Reasons
of shares of shares of shares
shares for
Term held at the increased Other held at
Employment Term start reduced increase
Name Position Gender Age end beginning in the changes the end
status date in the or
date of the current (shares) of the
current decrease
period period period
period of shares
(shares) (shares) (shares)
(shares)
May
January
Lu Lianxing Chairman incumbent male 57 11, 0 0 0 0 0
25, 2018
2025
May
Managing June 07,
Wang Huan incumbent male 54 11, 0 0 0 0 0
Director 2018
2025
May
July 21,
Xin Li Director incumbent female 43 11, 0 0 0 0 0
2021
2025
May
Zhong Independent May 12,
incumbent male 55 11, 0 0 0 0 0
Zhigang director 2022
2025
May
Independent May 12,
Wang Shouhai incumbent male 46 11, 0 0 0 0 0
director 2022
2025
Liu Zhihui Chairman of the incumbent male 58 May 12, May 0 0 0 0 0
Supervisory 2022 11,
Board 2025
May
May 12,
Wang Fang Supervisor incumbent female 39 11, 0 0 0 0 0
2022
2025
May
Employee May 12,
Xue Xiangwei incumbent male 35 11, 0 0 0 0 0
supervisor 2022
2025
Secretary of the
Board of May
November
Liang Shanglei Directors, incumbent male 50 11, 0 0 0 0 0
19, 2020
Chairman of the 2025
Labor Union
May
Deputy General May 16,
Meng Fanyong incumbent male 53 11, 0 0 0 0 0
Manager 2019
2025
May
Financial January
Fu Chuanhai incumbent male 50 11, 0 0 0 0 0
director 04, 2019
2025
May
Dong Deputy General April 19,
incumbent male 51 11, 0 0 0 0 0
Guangming Manager 2022
2025
May
Independent May 19,
Jiang Lu resign male 63 12, 0 0 0 0 0
director 2016
2022
May
Independent May 19,
Song Xiliang resign male 57 12, 0 0 0 0 0
director 2016
2022
Chairman of the May
July 21,
Han Junpeng Supervisory resign male 44 12, 0 0 0 0 0
2021
Board 2022
May
January
Huang Wei Supervisor resign female 43 12, 0 0 0 0 0
22, 2019
2022
May
December
Qiu Hong Supervisor resign female 55 12, 0 0 0 0 0
29, 2017
2022
total -- -- -- -- -- -- 0 0 0 0 0 --
Whether there were any resignation of directors and supervisors and dismissal of senior executives during the reporting period
Yes □No
During the reporting period, due to work reasons, Mr. Liang Shanglei resigned from the position of deputy general manager of the
Company; the term of the seventh session of directors and supervisors of the Company expired, among which, Mr. Jiang Lu and Mr. Song
Xiliang no longer served as independent directors of the Company, and Mr. Han Junpeng no longer served as the Company's Chairman of
board of supervisors and supervisor, Ms. Huang Wei no longer served as the company's supervisor, and Ms. Qiu Hong no longer served as
the Company's employee supervisor.
Changes in Directors, Supervisors and Senior Management of the Company
Applicable □ Not applicable
Name Position held Type Date Reason
Dong Guangming Deputy General Manager Engaged April 21, 2022 Engaged
Liang Shanglei Deputy General Manager Resign April 21, 2022 Due to work reasons
Election at expiration of
Zhong Zhigang independent director was elected May 12, 2022
office terms
Election at expiration of
Wang Shouhai independent director was elected May 12, 2022
office terms
Chairman of the Election at expiration of
Liu Zhihui was elected May 12, 2022
Supervisory Board office terms
Election at expiration of
Wang Fang Supervisor was elected May 12, 2022
office terms
Election at expiration of
Xue Xiangwei Employee supervisor was elected May 12, 2022
office terms
Resignation at the end Resignation at the end of
Jiang Lu Independent director May 12, 2022
of the term the term
Resignation at the end Resignation at the end of
Song Xiliang Independent director May 12, 2022
of the term the term
Chairman of the Resignation at the end Resignation at the end of
Han Junpeng May 12, 2022
Supervisory Board of the term the term
Resignation at the end Resignation at the end of
Huang Wei Supervisor May 12, 2022
of the term the term
Resignation at the end Resignation at the end of
Qiu Hong Employee supervisor May 12, 2022
of the term the term
2. Employment status
Professional background, main work experience, and current main responsibilities of current directors, supervisors, and senior management
personnel of the Company
(1) Director
Lu Lianxing, a university graduate, a member of the Communist Party of China. Served as deputy manager and manager of the Import
and Export Company of Shandong Leather Industry Corporation, deputy chief accountant, chief accountant, general manager, chairman, and
deputy party secretary of Shandong Leather Industry Corporation, general manager and Secretary of the Party Committee of Shandong Qilu
Petrochemical Joint Venture Development Corporation, Chairman and Secretary of the Party Committee of Shandong Zhonglu Oceanic
Fisheries Co., Ltd., Vice President and Member of the Party Committee of Shandong State-owned Assets Investment Holding Co., Ltd.,
General Manager and Secretary of the Party Committee of Shandong Aquatic Enterprise Group Corporation, Chairman of Shandong
Dongyin Investment Co., Ltd., Secretary of the Party Committee, Director and Chairman of Zhongtai Xincheng Asset Management Co., Ltd.;
currently a member of the Standing Committee of the Party Committee, Director and Secretary of the Board of Shandong State-owned
Assets Investment Holdings Co., Ltd. From January 25 , 2018 , he served as the secretary of the party committee, director and chairman of
the Company.
Wang Huan, college degree, Bachelor of Economics. Used to be the deputy general manager of Shandong Zhonglu Oceanic Fisheries
Co., Ltd., the deputy manager of the Ocean Management Department, the business director of the Fisheries project in Ghana, the person in
charge of the Fisheries project in Gambia, the chairman and general manager of Shandong Zhonglu Aquatic Shipping Co., Ltd. Since June 7,
2018, Wang has been the general manager of the Company, and since January 22 , 2019, Wang has been the director and general manager of
the Company.
Xin Li, postgraduate degree, senior economist, member of the Communist Party of China. Xin used to be the deputy director of Human
Resources Department (Party and Mass Work Department ) of Shandong State-owned Assets Investment Holding Co., Ltd., director of
Shandong Cultural Industry Investment Group Co., Ltd., director of Shandong Longxin Investment Co., Ltd., director of Shandong Rongyue
Financial Holding Co., Ltd., Director of Dezhou Bank Co., Ltd. Xin is currently the executive director of Shandong State-owned Assets
Investment Holding Co., Ltd., the head of the Organization Department (Human Resources Department), and the director of Shandong
Huate Holding Group Co., Ltd. Xin served as a director of the Company from July 21, 2021 .
Zhong Zhigang, graduate degree, member of the Communist Party of China, first-class lawyer. He used to be an external director of
Shandong Iron and Steel Group Co., Ltd., a director of Jinan Lawyers Association, and an independent director of Shandong Zhonglu
Oceanic Fisheries Co., Ltd. He is currently a senior partner of Grandall Law Firm (Jinan); concurrently serves as the deputy director of the
Restructuring and M&A Professional Committee of the Jinan Lawyers Association, a member of the Restructuring and M&A Professional
Committee of the Shandong Lawyers Association, and the deputy director of the Finance and Securities Committee of the Jinan Law Society,
and postgraduate cooperation instructor of Shandong University of Finance and Economics Master of Business Administration (MBA),
independent director of Huafang Co., Ltd. From May 12 , 2022 , he served as an independent director of the Company.
Wang Shouhai, doctoral degree, member of the Communist Party of China, certified public accountant. He used to be the director and
assistant to the dean of the Accounting Department of Shandong University of Finance and Economics. He is currently a professor, deputy
dean and doctoral supervisor of the School of Accounting of Shandong University of Finance and Economics; he is also an independent
director of Inspur Software Co., Ltd., Weihai Cratefair Fan Co., Ltd. and Seco Environmental Energy Co., Ltd. From May 12 , 2022 , he
served as an independent director of the Company.
(2) Supervisors
Liu Zhihui, executive MBA, accountant, member of the Communist Party of China. Served as an accountant of the Service Center of the
Shandong Provincial Department of Communications; a staff member, section chief, and deputy manager of the Fund and Finance
Department of Shandong Provincial Transportation Development and Investment Company; business manager of the Capital Operation
Department of Shandong State-owned Assets Investment Holding Co., Ltd., deputy director and director of the Audit Department; Deputy
Secretary of the Party Committee, General Manager, Deputy General Manager, and Secretary of the Disciplinary Committee of Shandong
Machinery and Equipment Import and Export Group Corporation; Deputy Secretary of the Party Committee, Director, and General Manager
of Zhongtai Xincheng Asset Management Co., Ltd. He is currently a member of the party committee, chairman of the board of supervisors
and supervisor of Shandong Zhonglu Oceanic Fisheries Co., Ltd. From May 12 , 2022, he served as the chairman and supervisor of the
Company's board of supervisors .
Wang Fang, postgraduate degree, master of management. Wang used to be the cashier and senior business manager of the Finance
Department of Shandong State-owned Assets Investment Holding Co., Ltd., the assistant and business supervisor of the Capital Operation
Department, the business supervisor, senior business supervisor and senior business manager of the Equity Management Department. Wang
is currently the deputy director of the Finance Department of Shandong State-owned Assets Investment Holding Co., Ltd. Wang has been
the supervisor of the Company from May 12, 2022.
Xue Xiangwei, postgraduate degree, member of the Communist Party of China. He used to be the deputy director and employee of the
Human Resources Department of Shandong Zhonglu Oceanic Fisheries Co., Ltd., and the deputy secretary of the Party branch of Shandong
Zhonglu Oceanic (Yantai) Foods Co., Ltd. He is currently an employee supervisor and head of the Human Resources Department
(Organization Department) of Shandong Zhonglu Oceanic Fisheries Co., Ltd. He served as Employee Supervisor of the Company from May
12, 2022.
(3) Senior management personnel
Liang Shanglei, a university graduate, a member of the Communist Party of China. Served as an officer of the Political Department of
the Communication Corps of the Second Artillery 54 Base, a political instructor of the Seventh Brigade of the Jinan Detachment of the
Armed Police Corps Shandong Corps, director and deputy political commissar of the Political Division of the Shandong Provincial Corps
Hospital of the Armed Police Corps, chief staff member and publicity officer of the Capital Operation and Income Management Division,
and Deputy Director of the Complaints and Complaints Office (Party Committee Propaganda and Mass Work Department), of the Shandong
Provincial State-owned Assets Supervision and Administration Commission, Employee Director, Deputy General Manager, and Secretary of
the Disciplinary Committee of Shandong Zhonglu Oceanic Fisheries Co., Ltd. He is currently the deputy secretary of the party committee,
secretary of the board of directors and chairman of the labor union of Shandong Zhonglu Oceanic Fisheries Co., Ltd. From February 2, 2021,
he served as the secretary of the board of directors of the Company.
Meng Fanyong, college degree, economist, member of the Communist Party of China. Served as Deputy Chief of the Import and Export
Department of Shandong Aquatic Enterprise Group Corporation, Deputy Manager of Shandong Wanxiang Aquatic Products Co., Ltd.,
Chairman and General Manager of Shandong Zhonglu Oceanic (Yantai) Foods Co., Ltd., and chairman of Shandong Zhonglu Ocean
Refrigeration Co., Ltd.. He is currently a member of the party committee and deputy general manager of Shandong Zhonglu Oceanic
Fisheries Co., Ltd. From May 16 , 2019, he served as the deputy general manager of the Company.
Fu Chuanhai, postgraduate degree. He used to be the audit project manager and deputy department manager of Shandong Zhengyuan
Hexin Accounting Firm; the deputy director of the Finance Department of Himin Solar Group; the deputy director of the audit center of
Linuo Group; the chief accountant of China Resources Shandong Pharmaceutical Co., Ltd.; financial director of Zhongtai Xincheng Asset
Management Co., Ltd.. Since January 4, 2019, he has been the chief financial officer of the Company.
Dong Guangming, a university graduate, a member of the Communist Party of China. Served as a member of the supply department of
Jinan Mingshui Chemical Fertilizer Factory, technician and construction leader of Puji Radio and Television Station of Zhangqiu Radio and
Television Jade Bird Information Network Co., Ltd., deputy station chief and station chief of Diaozhen Radio and Television Station of
Zhangqiu Radio and Television Jade Bird Information Network Co., Ltd., station chief of Zhangqiu City Radio and Television Bureau Puji
Radio and Television Station, Station Master of Shuangshan Rural Radio Station of Zhangqiu Branch of Shandong Radio and Television
Network Co., Ltd., Senior Director and Director of the Administration and Comprehensive Department of Juneng Capital Management Co.,
Ltd., Member of the Party Committee and Secretary of the Disciplinary Committee of Zhongtai Xincheng Asset Management Co., Ltd. He is
currently a member of the party committee and deputy general manager of Shandong Zhonglu Oceanic Fisheries Co., Ltd. From April 19,
2022, he served as the deputy general manager of the Company.
Employment status in shareholder units
Applicable □ Not applicable
Whether to receive
Shareholder unit Term start Term end remuneration and
Staff name Positions held in shareholder
name date date allowances in
shareholder
Member of the Standing Committee
Shandong State
Lu Lianxing of the Party Committee, Director, yes
Investment
Secretary of the Board of Directors
Executive Director, Head of the
Shandong State
Xin Li Organization Department (Human yes
Investment
Resources Department)
Shandong State
Wang Fang Deputy Finance Minister yes
Investment
Employment in other units
Applicable □ Not applicable
Whether to receive
Term start Term end remuneration
Staff name Other unit names Positions held in other units
date date allowance in other
units
Grandall Lawyers
Zhong Zhigang Senior Partner yes
(Jinan) Firm
Shandong University Professor, Vice Dean and
Wang Shouhai of Finance and Doctoral Supervisor of yes
Economics School of Accounting
Punishments of the Company’s current and resigned directors, supervisors and senior executives during the reporting period in the past three
years by securities regulatory agencies
□Applicable Not Applicable
3. Remuneration of directors, supervisors and senior executives
Decision-making procedures, determination basis and actual payment of remuneration for directors, supervisors and senior executives
According to the relevant provisions and requirements of "Listed Company Governance Guidelines" of the China Securities Regulatory
Commission, the remuneration plan of the Company’s directors, supervisors and senior management personnel is proposed by remuneration
and appraisal committee of board of directors of the Company, reviewed and approved at the company's the seventh meeting of the third
session of board of directors held on February 14, 2008 and approved at the company's 2007 annual general meeting held on March 18 ,
2008; the tenth meeting of the seventh session of the board of directors held on December 29 , 2020 also reviewed and adopted the "The
Measures for the Administration of Remunerations of Directors, Senior Management Personnel” was reviewed and approved at the 2020
Annual General Meeting of Shareholders held on May 27 , 2021 .
Remuneration of directors, supervisors and senior executives of the Company during the reporting period
Unit: RMB 10,000
Whether to
Total pre-tax receive
Employment remuneration remuneration
Name Position Gender Age
status received from from related
the Company parties of the
Company
Lu Lianxing chairman male 57 incumbent 0 yes
Managing
Wang Huan male 54 incumbent 65.88 no
Director
Xin Li director female 43 incumbent 0 yes
independent
Zhong Zhigang male 55 incumbent 2 no
director
independent
Wang Shouhai male 46 incumbent 2 no
director
Chairman of
Liu Zhihui the Supervisory male 58 incumbent 40.97 no
Board
Wang Fang Supervisor female 39 incumbent 0 yes
Secretary of the
Board of
Directors,
Liang Shanglei male 50 incumbent 52.33 no
Chairman of
the Labor
Union
Deputy General
Meng Fanyong male 53 incumbent 51.79 no
Manager
financial
Fu Chuanhai male 50 incumbent 52.67 no
director
Dong Deputy General
male 51 incumbent 32.73 no
Guangming Manager
employee
Xue Xiangwei male 35 incumbent 21.65 no
supervisor
independent
Jiang Lu male 63 resign 2 no
director
independent
Song Xiliang male 57 resign 2 no
director
Chairman of
Han Junpeng the Supervisory male 44 resign 0 yes
Board
Huang Wei Supervisor female 43 resign 0 yes
employee
Qiu Hong female 55 resign 11.52 no
supervisor
Total -- -- -- -- 337.54 --
VI. Performance of duties by directors during the reporting period
1. The situation of the board of directors during the reporting period
Disclosure
Session Date Meeting Decision
date
The twentieth meeting of the 1. Regarding the proposal to consider the proposed change
seventh session of board of January 6, January 7, of accounting firm
directors (extraordinary 2022 2022 2. Proposal on deliberating and holding the second
meeting) extraordinary general meeting of shareholders in 2022
The twenty-first meeting of the 1. Proposal on reviewing the signing of the "2022 Annual
seventh session of board of March 29, March 30, Performance Responsibility Letter" by the Company's
directors (extraordinary 2022 2022 senior management
meeting) 2. Proposal on reviewing the 2022 annual investment plan
1. Proposal on reviewing the work report of the general
manager for 2021
2. Proposal on Reviewing the Work Report of the Board of
Directors for 2021
3. Proposal on reviewing the full text and abstract of the
2021 annual report
4. Proposal on reviewing the 2021 annual financial report
5. Proposal on reviewing the profit distribution plan for
2021
6. Proposal on reviewing the re-appointment of the audit
institution and determination of remuneration
7. Proposal on reviewing the 2021 internal control self-
evaluation report
The twenty-second meeting of
8. Proposal on reviewing the work report of independent
the seventh session of board of
April 19, 2022 April 21, 2022 directors for 2021
directors (extraordinary
9. Proposal on reviewing the re-election of the board of
meeting)
directors
10. Proposal on deliberating on applying for
comprehensive credit line from banks
11. Proposal on deliberating on using self-owned idle funds
to purchase bank wealth management products
12. Proposal on reviewing the Company's "14th Five-Year
Plan"
13. Proposal on reviewing the report for the first quarter of
2022
14. Proposal on deliberation on the appointment of deputy
general manager
15. Proposal on deliberation and convening of the 2021
Annual General Meeting of Shareholders
1. Proposal on the consideration of the election of the
chairman of the board
2. Proposal on deliberation and election of members of
special committees of the Board of Directors
3. Proposal on deliberating on the appointment of the
general manager
The first meeting of the eighth
4. Proposal on deliberating and appointing the secretary of
session of board of directors May 12, 2022 May 13, 2022
the board of directors
5. Proposal on deliberation on the appointment of deputy
general manager
6. Proposal on the consideration of the appointment of the
Chief Financial Officer
7. Proposal on deliberating on the appointment of
securities affairs representatives
1. Proposal on reviewing the 2022 semi-annual report and
The second meeting of the
its summary
eighth session of board of August 25, August 26,
2. Proposal on reviewing the "Comprehensive Risk
directors 2022 2022
Management Report 2021"
3. Proposal on deliberating and formulating the "Work
Regulations on Reporting to the Board of Directors by
General Manager"
4. Proposal on deliberating and formulating the "Board of
Directors Resolution Tracking Implementation and Post-
evaluation System"
5. Proposal on deliberating and formulating the
"Management System for External Donations"
The third meeting of the eighth
August 30, August 31, Proposal on Reviewing the Company's Borrowing from the
session of board of directors
2022 2022 China Development Bank
(extraordinary meeting)
1. Regarding the review of the Company's proposal to
increase the capital of its subsidiaries
The fourth meeting of the eighth September 13, September 14, 2. Proposal on reviewing the construction of cold storage
session of board of directors 2022 2022 by subsidiaries
3. Proposal on reviewing and revising the "Investor
Relations Management System"
The fifth meeting of the eighth October 27, October 28, Proposal on Consideration of the 2022 Third Quarter
session of board of directors 2022 2022 Report
1. Proposal on reviewing the annual assessment work plan
for senior managers
The Sixth Meeting of the eighth 2. Proposal on reviewing the "Debt Management System"
November 8, November 9,
session of Board of Directors 3. Proposal on reviewing the "Administrative Measures for
2022 2022
(Provisional Meeting) Total Wages"
4. Proposal on reviewing the list of matters authorized by
the board of directors
1. Proposal on deliberating on changing the Company's
The seventh meeting of the
December 29, December 30, domicile and amending the "Articles of Association"
eighth session of Board of
2022 2022 2. Proposal on reviewing and adjusting the members of the
Directors
Strategy Committee of the Board of Directors
2. Attendance of directors at board meetings and general meetings of shareholders
Attendance of Directors at Board Meetings and Shareholders' Meetings
The number
Number of Whether fail
of board Number of
board Number of Number of to attend two Attendance
meetings that board
Director meetings board absences board at
should be meetings
name attended by meetings from board meetings in shareholders'
attended in attended on
corresponden entrusted meetings person in a meetings
this reporting site
ce row?
period
Lu Lianxing 10 2 8 0 0 no 3
Wang Huan 10 2 8 0 0 no 3
Xin Li 10 2 8 0 0 no 3
Zhong
7 1 6 0 0 no 1
Zhigang
Wang
7 1 6 0 0 no 1
Shouhai
Jiang Lu 3 0 2 1 0 no 2
Song Xiliang 3 1 2 0 0 no 3
Explanation for failing to attend the board meeting in person for two consecutive times
Not applicable
3. The situation where the directors raise objections to the relevant matters of the Company
Whether the directors raise objections to the relevant matters of the Company
□ Yes No
During the reporting period, the directors raised no objection to the relevant matters of the Company.
4. Other instructions on the performance of duties by directors
Whether the directors’ suggestions to the Company are adopted
Yes □No
Explanation by the directors on whether the relevant proposals of the Company are adopted or not adopted
During the reporting period, the directors of the Company strictly followed the relevant provisions and requirements of the "Articles of
Association", "Working Rules of the Board of Directors" and relevant laws and regulations, actively attended the board of directors and
shareholders' meetings, and performed their duties diligently. Relevant opinions were put forward for governance and business decision-
making of the Company based on the actual situation of the Company. After full communication and discussion, a consensus was formed,
and the implementation of the resolutions of the board of directors was resolutely supervised and promoted to ensure scientific, timely and
efficient decision-making, and safeguard the legitimate rights and interests of the Company and all shareholders.
7. The special committees under the board of directors during the reporting period
Other Specific
Important
Number of situations in circumstances
Date of Conference comments and
Committee name Membership meetings which duties of the
holding content suggestions put
held are objection (if
forward
performed any)
According to the
actual situation of
Regarding the
the company,
The first meeting of Proposal to
Song Xiliang, after full
the audit committee January 6, Consider the
Xin Li, Jiang 1 communication
of the board of 2022 Proposal to
Lu and discussion,
directors in 2022 Change the
the motion was
Accounting Firm
passed
unanimously.
1. Proposal on
reviewing the full
text and abstract
of the 2021
annual report
2. Proposal on
reviewing the
2021 annual
financial report
3. Proposal on
reviewing the
profit distribution According to the
plan for 2021 actual situation of
4. Proposal on the Company,
The second meeting reviewing the relevant opinions
of the audit Song Xiliang, reappointment of were put forward,
April 15,
committee of the Xin Li, Jiang 1 the auditor and and after full
2022
board of directors in Lu determining the communication
2022 remuneration and discussion,
5. Proposal on all proposals were
reviewing the unanimously
performance of passed.
the audit
committee and the
summary report
on the audit work
of the accounting
firm in 2021
6. Proposal on
reviewing the
2021 internal
control self-
evaluation report
7. Proposal on
reviewing the
provision for asset
impairment in
2021
8. Proposal on
reviewing the first
quarterly report of
2022
According to the
actual situation of
Proposal on the company,
The third meeting of Wang
reviewing the after full
the audit committee Shouhai, Xin August 22,
1 2022 semi-annual communication
of the board of Li, Zhong 2022
report and its and discussion,
directors in 2022 Zhigang
summary the motion was
passed
unanimously.
According to the
actual situation of
The Fourth Meeting the company,
Wang Proposal on
of the Audit after full
Shouhai, Xin October 27, Consideration of
Committee of the 1 communication
Li, Zhong 2022 the 2022 Third
Board of Directors and discussion,
Zhigang Quarter Report
in 2022 the motion was
passed
unanimously.
According to the
actual situation of
Proposal on
The Fifth Meeting the company,
Wang Reviewing the
of the Audit after full
Shouhai, Xin November 2022 Internal
Committee of the 1 communication
Li, Zhong 28, 2022 Control
Board of Directors and discussion,
Zhigang Evaluation Work
in 2022 the motion was
Plan
passed
unanimously.
According to the
1. Proposal on actual situation of
Examining the the company,
First Meeting of the Qualifications of relevant opinions
Nominating Jiang Lu, Lu Director were put forward,
April 15,
Committee of the Lianxing, 1 Candidates and after full
2022
Board of Directors Song Xiliang 2. Proposal on communication
in 2022 Examining the and discussion,
Qualifications of all proposals were
Senior Managers unanimously
passed.
According to the
actual situation of
The Second
the Company,
Meeting of the Zhong Proposal on
after full
Nomination Zhigang, Lu May 12, Examining the
1 communication
Committee of the Lianxing, 2022 Qualifications of
and discussion,
Board of Directors Wang Shouhai Senior Managers
the motion was
in 2022
passed
unanimously.
According to the
The first meeting of actual situation of
Proposal on
the Strategy Lu Lianxing, the company,
March 25, Reviewing the
Committee of the Wang Huan, 1 after full
2022 Investment Plan
Board of Directors Jiang Lu communication
for 2022
in 2022 and discussion,
the motion was
passed
unanimously.
According to the
actual situation of
The second meeting the company,
Proposal on
of the Strategy Lu Lianxing, after full
April 15, Reviewing the
Committee of the Wang Huan, 1 communication
2022 Company's "14th
Board of Directors Jiang Lu and discussion,
Five-Year Plan"
in 2022 the motion was
passed
unanimously.
1. Regarding the
According to the
review of the
actual situation of
Company's
the Company,
proposal to
The third meeting of relevant opinions
Lu Lianxing, increase the
the Strategy were put forward,
Wang Huan, September capital of its
Committee of the 1 and after full
Zhong 13, 2022 subsidiaries
Board of Directors communication
Zhigang 2. Proposal on
in 2022 and discussion,
reviewing the
all proposals were
construction of
unanimously
cold storage by
passed.
subsidiaries
Proposal on According to the
reviewing the actual situation of
The first meeting of
signing of the the company,
the remuneration
Jiang Lu, Xin "2022 Annual after full
and appraisal March 25,
Li, Song 1 Performance communication
committee of the 2022
Xiliang Responsibility and discussion,
board of directors in
Letter" by the the motion was
2022
Company's senior passed
management unanimously.
According to the
1. Proposal on
actual situation of
reviewing the
the company,
The second meeting annual assessment
relevant opinions
of the remuneration Zhong work plan for
were put forward,
and appraisal Zhigang, Xin November senior managers
1 and after full
committee of the Li, Wang 8, 2022 2. Proposal on
communication
board of directors in Shouhai reviewing the
and discussion,
2022 "Administrative
all proposals were
Measures for
unanimously
Total Wages"
passed.
8. Work of the Supervisory Committee
Whether the board of supervisors found any risks in the Company in the supervision activities during the reporting period
□ Yes No.
The Supervisory Committee had no objection to the supervisory matters during the reporting period.
IX. The Company's employees
1. Number of employees, professional composition and education level
Number of active employees of the parent company at the end
156
of the reporting period (person)
Number of active employees of major subsidiaries at the end of
786
the reporting period (person)
Total number of active employees at the end of the reporting
942
period (person)
Total number of employees receiving salaries in the current
942
period (person)
Number of retired employees (persons) for whom parent
258
company and major subsidiaries need to bear expenses
Professional composition
Major Constituent Category The number of professional constituents (person)
Production staff 703
Salesperson 26
Technical staff 27
Financial officer 34
Administration staff 152
total 942
Education level
Education level category Quantity (person)
Master 20
Undergraduate 90
Specialist 119
Secondary school 190
High school and below 523
Total 942
2. Remuneration policy
The Company scientifically formulates a salary management system based on the market, and improves a comprehensive salary system that
pays for "position, performance, and ability".
3. Training plan
According to the Company's high-quality development needs and the diverse training needs of employees, various forms of employee
trainings are carried out in different levels and categories.
4. Labor outsourcing
□Applicable Not Applicable
X. The Company's profit distribution and capitalization of capital reserves
Profit distribution policy during the reporting period, especially the formulation, implementation or adjustment of the cash dividend policy
□Applicable Not Applicable
The Company made a profit during the reporting period and the parent company’s profits available to shareholders were positive, but no cash
dividend distribution plan was proposed
□Applicable Not Applicable
Profit distribution and conversion of capital reserves into share capital during the reporting period
□Applicable Not Applicable
The Company plans not to distribute cash dividends or bonus shares, or increase share capital from public reserves.
XI. Implementation of the Company's equity incentive plan, employee stock ownership plan or
other employee incentive measures
□Applicable Not Applicable
During the reporting period, the Company had no equity incentive plan, employee stock ownership plan or other employee incentive
measures and their implementation.
XII. Construction and implementation of internal control system during the reporting period
1. Construction and implementation of internal control
The Company has a relatively complete internal control system, which is constantly updated, supplemented and revised according to
development changes and actual conditions. The Company's operations strictly implement various internal control systems.
2. Details of the major deficiencies in internal control discovered during the reporting period
□ Yes No
XIII. The Company's management and control over subsidiaries during the reporting period
Problems
Company Integration Resolve Follow-up
Integration plan Encountered in Measures taken
Name progress progress solution plan
Integration
not applicable not applicable not applicable not applicable not applicable not applicable not applicable
14. Internal control self-assessment report or internal control audit report
1. Internal control self-assessment report
Disclosure date of the full text of the
April 28, 2023
internal control evaluation report
Disclosure index of the full text of the
www.cninfo.com.cn
internal control evaluation report
The ratio of the total assets of the units
included in the evaluation scope to the
99.57%
total assets of the Company's
consolidated financial statements
The ratio of the operating income of
units included in the evaluation scope to
100.00%
the operating income of the Company's
consolidated financial statements
Defect identification standard
category financial report non-financial reporting
Major flaw: Major flaw:
a. Directors, supervisors and senior a. Violation of national laws and
executives commit fraud; regulations, such as environmental
b. The external audit found that there was pollution;
a material misstatement in the financial b. Project decision-making procedures
statements of the current period, but the are unscientific and lack of democratic
internal control failed to discover the decision-making procedures lead to
misstatement during the operation; decision-making mistakes;
c. Ineffective supervision of internal c. resignation of management personnel
control by the audit committee and or technical personnel;
internal audit agency; d. Frequent negative media news;
Qualitative standard
Important deficiencies: single e. The results of internal control
deficiencies or together with other evaluation, especially major or important
deficiencies lead to the inability to deficiencies have not been rectified;
prevent or discover and correct the f. Lack of system control or systematic
misstatements in the financial report in a failure of systems for important
timely manner, although they do not businesses.
reach and exceed the major deficiencies, Important defect: The seriousness of the
but should still attract the attention of the nature of the business involved in a
management; other situations are single defect or together with other
determined according to the degree of defects, and its direct or potential
impact. negative impact, do not reach or exceed
Common deficiencies: other internal the major defect, but should still attract
control deficiencies that do not constitute the attention of the management; other
major or important deficiencies. situations are determined according to
the degree of impact.
Common deficiencies: other internal
control deficiencies that do not constitute
major or important deficiencies.
The quantitative standard for internal
control deficiencies in financial reports is
determined by their impact on financial
statements, that is, comparing the amount
The amount of direct property loss is
misstated or omitted (that is, the amount
compared with a certain percentage of
affected by internal control deficiencies)
the Company's total profit in the current
by finance statements which may be or
consolidated financial statements to
have been caused by internal control
determine the type of internal control
deficiencies with certain proportion of
defects, as follows:
the total profit in the Company’s current
If the amount of direct property loss is
consolidated financial statements, so as
greater than 5% of the total profit, it shall
Quantitative standard to determine the type of internal control
be judged as a major defect;
defects, as follows:
If the amount of direct property loss is
If the impact of internal control defects is
greater than 3% and less than 5%
greater than 5% of the total profit, it is
(inclusive) of the total profit, it is judged
judged as a major defect;
as an important defect;
If the impact of internal control defects is
If the amount of direct property loss is
greater than 3% and less than 5%
less than 3% (inclusive) of the total
(inclusive) of the total profit, it is
profit, it is judged as a common defect.
determined to be an important defect;
If the impact of internal control defects is
less than 3% (inclusive) of the total
profit, it is judged as a common defect.
Number of major deficiencies in
0
financial reports (pieces)
Number of major deficiencies in non-
0
financial reporting (pieces)
Number of important deficiencies in
0
financial reports (pieces)
Number of important deficiencies in non-
0
financial reporting (pieces)
2. Internal control audit report
Applicable □ Not applicable
Deliberative Opinion Paragraph in Internal Control Audit Report
We believe that your Company maintained effective internal control over financial reporting in all material respects in accordance
with the Basic Standards for Enterprise Internal Control and relevant regulations on December 31, 2022.
Disclosure of Internal Control Audit Report disclosure
Disclosure date of the full text of the internal control audit
April 28, 2023
report
Internal control audit report full text disclosure index www.cninfo.com.cn
Types of Internal Control Audit Report Opinions standard unqualified opinion
Whether there are material deficiencies in non-financial
no
reporting
Does the accounting firm issue an internal control audit report with non-standard opinions?
□ Yes No
Whether the internal control audit report issued by the accounting firm is consistent with the self-evaluation report of the board of directors
Yes □ No
XV. The rectification of problems in the self-examination of the special action of corporate
governance of listed companies
Not applicable
Section V Environmental and Social Responsibility
I. Major environmental issues
Whether the listed company and its subsidiaries belong to the key pollutant discharge enterprises announced by the environmental protection
department
□ Yes No
Administrative penalties due to environmental issues during the reporting period
The impact on the
The company's
Company or Reason for production and
Violation Penalty result corrective
Subsidiary Name punishment operation of listed
measures
companies
none none none none none none
Other environmental information disclosed by reference with key pollutant discharge units
not applicable
Measures and effects taken to reduce its carbon emissions during the reporting period
□Applicable Not Applicable
Reasons for not disclosing other environmental information
The Company and its subsidiaries do not belong to the key pollutant discharge enterprises announced by the environmental protection
department.
II. Social Responsibility
The Company always regards assuming social responsibility and supporting social welfare as one of the core values of the enterprise,
and practices corporate social responsibility by respecting employees' rights, preventing pollution, promoting sustainable utilization of
resources, and paying attention to participating in public welfare undertakings.
3. Consolidate and expand the achievements of poverty alleviation and rural revitalization
none
Section VI Important Matters
I. Fulfillment of commitments
1. Commitments fulfilled by the Company’s actual controller, shareholders, related parties, acquirers, the
Company and other relevant parties, and commitments that have not been fulfilled by the end of the reporting
period
Applicable □ Not applicable
Promising Commitment Commitment Commitment
Reason Commitment content Fulfillment
party type time period
1. The Company does not directly
or indirectly own any shares,
equities or interests in any other
enterprises (hereinafter
collectively referred to as
"Competitors") that may compete
with Zhonglu OCEANIC, and
will not directly or indirectly
invest in or acquire any
Competitors; 2. If any business
opportunity obtained by the
Company and other companies
controlled by the Company from
any third party constitutes or may
constitute substantial competition
with the business of Zhonglu
OCEANIC, the Company will
immediately notify Zhonglu
Continue to
Shandong OCEANIC, and transfer such
be effective
Commitment Provincial business opportunity to Zhonglu
during the
made in State- OCEANIC to avoid horizontal
Commitment period when
acquisition owned competition or potential July 23,
to horizontal the in progress
report or Assets horizontal competition with 2008
competition Company
equity change Investment Zhonglu OCEANIC; 3. The
controls
report Holding Company and other companies
Zhonglu
Co., Ltd. controlled by the Company will
OCEANIC
not offer any business secrets
such as technical information,
process and sales channel to other
companies, enterprises,
organizations and individuals
which compete with the business
of Zhonglu OCEANIC; 4. The
Company promises not to use the
Company's position as a
controlling shareholder to damage
the rights and interests of Zhonglu
OCEANIC and other shareholders
of Zhonglu OCEANIC; 5. The
Company is willing to bear the
direct and indirect economic
losses, claims and additional
expenses caused by the violation
of the above commitments.
Commitment Shandong 1. The related party transactions Continue to
Related
made in Provincial between the Company and other July 23, be effective
transaction in progress
acquisition State- companies controlled by the 2008 during the
commitment
report or owned Company and Zhonglu period when
equity change Assets OCEANIC strictly abide by the the
report Investment relevant provisions of laws and enterprise
Holding regulations, and will be conducted controls
Co., Ltd. on the basis of equality and Zhonglu
voluntariness in accordance with OCEANIC
the principles of fairness, equality
and equivalent compensation. The
transaction price will be
determined according to the
reasonable price recognized by
the market. 2. The Company and
other companies controlled by the
Company will strictly abide by
the regulations on the avoidance
of related party transactions in the
articles of association of Zhonglu
OCEANIC, and the related party
transactions involved will be
carried out in accordance with the
related party transactions
decision-making procedures of
Zhonglu OCEANIC, and will
perform legal procedures and
information disclosure
obligations. 3. The Company and
other companies controlled by the
Company guarantee to strictly
abide by laws, regulations and
normative documents as well as
the relevant provisions of the
articles of association of Zhonglu
OCEANIC, and to exercise
shareholder rights and perform
shareholder obligations on an
equal footing with other
shareholders in accordance with
legal procedures, not to take
advantage of the position of the
controlling shareholder to seek
improper interests, and not to
damage the legitimate rights and
interests of Zhonglu OCEANIC
and other shareholders. 4. The
above commitments will continue
to be effective during the period
when the Company controls
Zhonglu OCEANIC. If the
Company fails to fulfill the
commitments made in this letter
of commitment and causes any
losses and consequences to
Zhonglu OCEANIC, the
Company will bear the
corresponding liability for
compensation.
Whether the
promise is
yes
fulfilled on
time
If the
commitment
none
is overdue
and not
fulfilled, the
specific
reasons for
the failure to
fulfill and the
next work
plan shall be
explained in
detail.
2. If there is a profit forecast for the Company's assets or projects, and the reporting period is still in the profit
forecast period, the Company will explain whether the assets or projects have reached the original profit forecast
and why
□Applicable Not Applicable
II. Non-operating capital occupation of listed companies by controlling shareholders and other
related parties
□Applicable Not Applicable
During the reporting period of the Company, there was no non-operating capital occupation of listed companies by controlling shareholders
and other related parties.
III. Illegal external guarantees
□Applicable Not Applicable
During the reporting period, the Company had no external guarantees in violation of regulations.
IV. Explanation of the board of directors on the latest “non-standard audit report”
□Applicable Not Applicable
V. Explanation of the board of directors, board of supervisors and independent directors (if any) on
the “non-standard audit report” of the accounting firm for the reporting period
□Applicable Not Applicable
VI. Compared with the financial report of the previous year, an explanation on the changes in
accounting policies and accounting estimates or the correction of major accounting errors
Applicable □ Not applicable
① "Interpretation of Accounting Standards for Business Enterprises No. 15" stipulates "Accounting treatment for the external sales of
products or by-products produced by enterprises before their fixed assets reach the intended usable state or during the research and
development process".
From January 1, 2022, the Company implements the provisions of "Interpretation of Accounting Standards for Business Enterprises No. 15"
promulgated by the Ministry of Finance concerning "Accounting treatment for the external sales of products or by-products produced by
enterprises before their fixed assets reach the intended usable state or during the research and development process." Retroactive adjustments
shall be made to the trial run sales that occurred between the beginning of the earliest period in which the financial statements implementing
such provisions for the first time are presented and January 1, 2022. This accounting policy change has no impact on the Company's
financial statements.
② "Judgment on onerous contracts" stipulated in Interpretation No. 15 of Accounting Standards for Business Enterprises
From January 1, 2022, the Company implements the provisions of the "Interpretation of Accounting Standards for Business Enterprises No.
15" promulgated by the Ministry of Finance concerning "Judgment on onerous contracts", and such provisions shall apply to contracts which
have not fulfilled all obligations as at January 1, 2022; the cumulative effect number adjusts the retained earnings at the beginning of 2022
and other related financial statement items, and does not adjust the information of the comparable period. The implementation of such
provisions has no impact on the Company's financial statements on January 1, 2022.
③ From November 30, 2022, the Company will implement the provisions of the "Interpretation of Accounting Standards for Business
Enterprises No. 16" promulgated by the Ministry of Finance concerning "Accounting Treatment for Income Tax Effects of Dividends
Related to Financial Instruments Classified as Equity Instruments by the Issuer".
From November 30, 2022, the Company implements the "Accounting Treatment for Income Tax Effects of Dividends Related to Financial
Instruments Classified as Equity Instruments" promulgated by the Ministry of Finance in the "Interpretation of Accounting Standards for
Business Enterprises No. 16". If the financial instruments classified as equity instruments confirm that the dividends payable occur between
January 1, 2022 and November 30, 2022, adjustments shall be made in accordance with such provisions. For financial instruments classified
as equity instruments that comply with this provision, if the dividends payable are recognized before January 1, 2022 and the relevant
financial instruments have not been derecognized on January 1, 2022, retroactive adjustments shall be made in accordance with this
provision. This accounting policy change has no impact on the Company's financial statements.
VII. Explanation on changes in the scope of consolidated statements compared with the financial
report of the previous year
□Applicable Not Applicable
During the reporting period of the Company, there was no change in the scope of consolidated statements.
VIII. Appointment and Dismissal of Accounting Firms
The current accounting firm
Domestic accounting firm name Shanghui Accounting Firm (Special General Partnership)
Domestic accounting firm remuneration (RMB 10,000) 35
Consecutive years of audit services provided by domestic
2
accounting firms
The name of the certified public accountant of the domestic
Xu Mao, Ma Haijun
accounting firm
Consecutive years of audit services of CPAs of domestic
Xu Mao (1 year), Ma Haijun (2 years)
accounting firms
Whether to change the accounting firm in the current period
□ Yes No
Employment of internal control audit accounting firms, financial consultants or sponsors
Applicable □ Not applicable
At the same time, the Company hired Shanghui Accounting Firm (special general partnership) as the Company's internal control audit
accounting firm in 2022, and paid a total of RMB 100,000 in remuneration.
IX. Facing delisting after annual report disclosure
□Applicable Not Applicable
X. Matters related to bankruptcy and reorganization
□Applicable Not Applicable
During the reporting period, there were no matters related to bankruptcy and reorganization of the Company.
XI. Major litigation and arbitration matters
□Applicable Not Applicable
During the reporting period, the Company had no major lawsuits or arbitrations.
XII. Punishment and rectification
□Applicable Not Applicable
There was no punishment and rectification in the reporting period of the Company.
XIII. Integrity status of the Company and its controlling shareholders and actual controllers
Applicable □ Not applicable
During the reporting period, the Company, its controlling shareholders and actual controllers did not fail to perform effective court
judgments, or owe large amounts of debts that were due and unpaid.
XIV. Significant connected transactions
1. Connected transactions related to daily operations
□Applicable Not Applicable
During the reporting period of the Company, there was no connected transaction related to daily operation.
2. Connected transactions in the acquisition and sale of assets or equity
□Applicable Not Applicable
During the reporting period, there was no connected transaction involving asset or equity acquisition or sale.
3. Connected transactions of joint foreign investment
□Applicable Not Applicable
During the reporting period, there was no connected transaction involving joint external investment.
4. Related creditor's rights and debts
□Applicable Not Applicable
During the reporting period, the company had no related creditor's rights and debts.
5. Contacts with associated financial companies t
□Applicable Not Applicable
There is no deposit, loan, credit or other financial business between the Company and associated financial company or the related party.
6. Communications between financial companies controlled by the Company and related parties
□Applicable Not Applicable
There is no deposit, loan, credit or other financial business between the financial company controlled by the Company and related parties.
7. Other major connected transactions
Applicable □ Not applicable
In January 2022, Zhongtai Xincheng Asset Management Co., Ltd. increased the capital of Shandong Zhonglu Oceanic (Yantai) Foods Co.,
Ltd., a subsidiary of the Company, by RMB 100 million. After this capital increase, the Company's direct shareholding ratio dropped from
74.23% to 53.79%, the indirect shareholding ratio dropped from 25.77% to 18.67%, and the minority shareholder Zhongtai Xincheng Asset
Management Co., Ltd. held 27.54% of shares.
Related Inquiries about Major Related Transactions at Interim Report Disclosure Website
Temporary Announcement Temporary announcement disclosure
Temporary announcement name
Disclosure Date website name
Announcement regarding the capital increase
of the holding subsidiary and waiver of
December 22, 2021 http://www.cninfo.com.cn
capital increase right of the same proportion
as well as connected transactions
XV. Significant contracts and their performance
1. Matters concerning trusteeship, contracting and leasing
(1) Trusteeship
Applicable □ Not applicable
Explanation on trusteeship
April 2022 , the Company has been entrusted by Shandong State-owned Assets Investment Holding Co., Ltd. to manage its subsidiary
Zhongtai Xincheng Asset Management Co., Ltd. (hereinafter referred to as "Zhongtai Xincheng"); as the shareholder proxy of Zhongtai
Xincheng, the Company shall comply with relevant provisions of the entrusted management agreement. Zhongtai Xincheng is not included
in the scope of the Company's consolidated statements.
Projects that bring profit or loss to the Company amounting to more than 10% of the Company's total profit in the reporting period
□Applicable Not Applicable
During the reporting period of the Company, there was no trusteeship project which brings profit or loss for the Company amounting to more
than 10% of the total profit of the Company.
(2) Contracting status
□Applicable Not Applicable
There was no contracting in the reporting period of the Company.
(3) Lease situation
□Applicable Not Applicable
There was no lease in the reporting period of the Company.
2. Major guarantee
□Applicable Not Applicable
During the reporting period, the Company had no major guarantees.
3. Entrusting others to manage cash assets
(1) Entrusted financial management
□Applicable Not Applicable
There was no entrusted wealth management in the reporting period of the Company.
(2) Entrusted loans
□Applicable Not Applicable
There was no entrusted loan in the reporting period of the Company.
4. Other major contracts
□Applicable Not Applicable
There were no other major contracts in the reporting period of the Company.
XVI. Explanation of other important matters
□Applicable Not Applicable
There are no other significant events that need to be explained during the reporting period of the Company.
XVII. Significant events of the Company's subsidiaries
Applicable □ Not applicable
During the reporting period, except for those disclosed, no other major events happened in the Company’s subsidiaries.
Section VII Changes in Shares and Information on Shareholders
1. Changes in shares
1. Changes in shares
Unit: share
Before this change Increase or decrease in this change (+, -) After this change
Issuance of Bonus Provident fund
Quantity Proportion Other Subtotal Quantity Proportion
new shares shares transfer
1. Unlisted 128,071,320
128,071,320 48.13% 48.13%
tradable shares .00
1. Promoter
128,071,320 48.13% 128,071,320 48.13%
shares
Of which:
shares held by 127,811,320 48.03% 127,811,320 48.03%
the state
Shares held
by domestic legal 260,000 0.10% 260,000 0.10%
persons
Shares held
by foreign
legal persons
Other
2. Raising
legal person
shares
3. Internal
staff shares
4. Preferred
stock or other
2. Listed tradable
138,000,000 51.87% 138,000,000 51.87%
shares
1. RMB
ordinary shares
2. Foreign
shares listed in 138,000,000 51.87% 138,000,000 51.87%
China
3. Foreign
shares listed
overseas
4. Others
3. Total number
266,071,320 100.00% 266,071,320 100.00%
of shares
Reason for Share Change
□Applicable Not Applicable
Approval status of shareholding changes
□Applicable Not Applicable
Transfer status of share changes
□Applicable Not Applicable
The impact of shareholding changes on financial indicators such as basic earnings per share, diluted earnings per share, and net assets per
share attributable to ordinary shareholders of the Company in the last year and the latest period
□Applicable Not Applicable
Other content that the Company deems necessary or required by securities regulators to disclose
□Applicable Not Applicable
2. Changes in restricted shares
□Applicable Not Applicable
II. Securities Issuance and Listing
1. Securities issuance (excluding preferred shares) during the reporting period
□Applicable Not Applicable
2. Explanation on changes in the total number of shares of the Company and the structure of shareholders, and
changes in the structure of the Company's assets and liabilities
□Applicable Not Applicable
3. Existing internal employee shares
□Applicable Not Applicable
III. Shareholders and actual controllers
1. Number of shareholders and shareholding status of the Company
Unit: share
The total
Total number
number of The total number of
of preferred
ordinary preference shareholders
Total number of shareholders
shareholders at whose voting rights
ordinary with voting
the end of the have been restored at
shareholders at the 10,059 10,059 rights restored 0 0
previous the end of the month
end of the reporting at the end of
month before preceding the annual
period the reporting
the annual report disclosure date (if
period (if any)
report any) (see note 8)
(see note 8)
disclosure date
Shareholdings of shareholders holding more than 5% of the shares or the top 10 shareholders
Number Pledge, Mark or
Changes Number of
Number of shares of Frozen Situation
Nature of Shareholding during the unlisted
Shareholder name held at the end of tradable
shareholders ratio reporting tradable Share
the reporting period shares Quantity
period shares held Status
held
Shandong State-
owned Assets State-owned
47.25% 125,731,320 125,731,320
Investment Holding legal person
Co., Ltd.
foreign natural
Chen Tianming 2.16% 5,760,427 5,760,427
person
Domestic
Zhu Shuzhen 1.88% 5,002,046 5,002,046
natural person
Domestic
Cai Yujiu 1.75% 4,668,300 134600 4,668,300
natural person
GUOTAI JUNAN Foreign legal 1.11% 2,952,425 367500 2,952,425
SECURITIES person
(HONGKONG)
LIMITEDGUOTAI
JUNAN
Domestic
Zhan Changcheng 1.01% 2,693,815 1225715 2,693,815
natural person
China National
State-owned
Heavy Duty Truck 0.73% 1,950,000 1,950,000
legal person
Group Co., Ltd.
Shenwan
Hongyuan Foreign legal
0.71% 1,897,854 1,897,854
Securities (Hong person
Kong) Co., Ltd.
Domestic
Lin Mingyu 0.56% 1,500,001 1,500,001
natural person
Foreign
Wang Dongsheng 0.43% 1,136,304 -125100 1,136,304
natural person
Strategic investors or general legal
persons becoming the top 10
not applicable
shareholders due to allotment of new
shares (if any) (see Note 3)
Explanation on the related relationship The Company does not know whether it has an associated relationship or is a person acting in concert as
or concerted action of aforesaid stipulated in the "Administrative Measures for Information Disclosure of Shareholding Changes in Listed
shareholders Companies".
Explanation of the above-mentioned
shareholders involved in
none
entrusted/entrusted voting rights and
waiver of voting rights
Special instructions for repurchase
accounts among the top 10 none
shareholders (if any) (see Note 10)
Shareholdings of the top 10 tradable shareholders
Number of tradable shares held at the end of the Type of shares
Shareholder name
reporting period Type of shares Quantity
Chen Tianming 5,760,427 Domestic listed foreign shares 5,760,427
Zhu Shuzhen 5,002,046 Domestic listed foreign shares 5,002,046
Cai Yujiu 4,668,300 Domestic listed foreign shares 4,668,300
GUOTAI JUNAN
SECURITIES (HONG KONG) 2,952,425 Domestic listed foreign shares 2,952,425
LIMITED
Zhan Changcheng 2,693,815 Domestic listed foreign shares 2,693,815
Shenwan Hongyuan Securities
(Hong Kong) Limited 1,897,854 Domestic listed foreign shares 1,897,854
company
Lin Mingyu 1,500,001 Domestic listed foreign shares 1,500,001
Wang Dongsheng 1,136,304 Domestic listed foreign shares 1,136,304
Huang Jiayi 1,048,687 Domestic listed foreign shares 1,048,687
Chen Cirou 1,016,760 Domestic listed foreign shares 1,016,760
Explanation on the associated
relationship or concerted action among
the top 10 shareholders of tradable The Company is not aware of whether the aforesaid shareholders have any associated relationship or are
shares not subject to sales restrictions, persons acting in concert as stipulated in the "Administrative Measures for the Disclosure of Information on
and between the top 10 shareholders of Changes in Shareholding of Shareholders of Listed Companies".
tradable shares not subject to sales
restrictions and the top 10 shareholders
Explanation on the participation of the
top 10 ordinary shareholders in the
none
margin trading and short selling business
(if any) (see Note 4)
Whether the Company’s top 10 shareholders of common shares and top 10 shareholders of common shares not subject to sales restrictions
conducted agreed repurchase transactions during the reporting period
□ Yes No
The Company's top 10 shareholders of common shares and top 10 shareholders of common shares not subject to sales restrictions did not
conduct agreed repurchase transactions during the reporting period.
2. Information about the controlling shareholder of the Company
Nature of the controlling shareholder: local state-owned holding
Type of controlling shareholder: legal person
Legal
Controlling Date of
representative/ Organization Code Main business
shareholder name establishment
Principal
Operation management and disposal
of state-owned property (share)
Shandong Provincial
rights, asset management, equity
State-owned Assets
Luan Jian March 25, 1994 91370000163073167C investment management and
Investment Holding
operation, corporate restructuring,
Co., Ltd.
mergers and acquisitions, investment
consulting.
0.06% of China Merchants Bank Co., Ltd., 1.42% of Guangzhou Pubang Garden Co., Ltd., 0.44% of
Tomson By-health Co., Ltd., 11.97% of Zhongtong Bus Holding Co., Ltd., 1.92% of Yunding
Technology Co., Ltd., 4.19% of Luyin Investment Group Co., Ltd., 3.31% of Shandong Lubei
Chemical Co., Ltd., 3.46% of Yinzuo Group Co., Ltd., 4.70% of Shandong Xinhua Medical Instrument
Equity of other
Co., Ltd., 1.85% of Yantai Zhenghai Magnetic Materials Co., Ltd., 1.80% of Yueyang Forestry and
domestic and foreign
Paper Co., Ltd., 1.51% of Guangzhou Halike Creative Home Co., Ltd., 2.02% of Jiangsu Guotai
listed companies held
International Group Co., Ltd., 4.29% of Shenzhen Aoto Electronics Co., Ltd., 1.54% of Shanghai
by controlling
Modern Pharmaceutical Co., Ltd., 0.74% of China United Network Communications (Hong Kong )
shareholders during the
Co., Ltd., 2.25% of Zhongtai Futures Co., Ltd., 1.73% of Zhongtai Securities Co., Ltd., 0.27% of
reporting period
Weichai Power Co., Ltd., 0.70% of Taihe New Materials Group Co., Ltd., 4.26% of Weichai Heavy
Machinery Co., Ltd., 0.04% of Yunnan Tin Industry Co., Ltd., 0.56% of Shandong Gold Mining Co.,
Ltd., 10.23% of Jicheng Electronics Co., Ltd., 2.07% of Hanhua Financial Holding Co., Ltd., 0.25% of
Red Star Macalline Group Co., Ltd., and 0.32% of China Energy Construction Corporation.
Changes in controlling shareholders during the reporting period
□Applicable Not Applicable
During the reporting period, the controlling shareholder of the Company remained unchanged.
3. The actual controller of the Company and its persons acting in concert
The nature of the actual controller: local state-owned assets management agency
Type of actual controller: legal person
Actual controller Legal representative/ Date of Organization
Main business
name Principal establishment Code
Shandong Provincial
People's Government Fulfilling the investor's duties,
State-owned Assets supervising the maintenance and
Man Shengang June 18, 2004 None
Supervision and appreciation of the state-owned assets
Administration under supervision, etc.
Commission
Equity of other
domestic and foreign
listed companies
controlled by the not applicable
actual controller
during the reporting
period
Changes in the actual controller during the reporting period
□Applicable Not Applicable
The actual controller of the Company did not change during the reporting period.
Block diagram of the property rights and control relationship between the Company and the actual controller
Shandong Provincial People's Government State-owned Assets Supervision and
70%
Shandong Provincial State-owned Assets Investment Holding Co., Ltd.
47.25%
The Company
The actual controller controls the Company through trust or other asset management methods
□Applicable Not Applicable
4. The accumulative number of pledged shares of the Company's controlling shareholder or the largest
shareholder and its persons acting in concert accounts for 80% of the Company's shares held by it
□Applicable Not Applicable
5. Other legal person shareholders holding more than 10% of the shares
□Applicable Not Applicable
6. Restrictions on reduction of shareholding by Controlling shareholders, actual controllers, reorganization
parties and other commitment subjects
□Applicable Not Applicable
IV. Specific implementation of share repurchase during the reporting period
Implementation progress of share repurchases
□Applicable Not Applicable
The progress of the implementation of the reduction of repurchased shares by means of centralized bidding transactions
□Applicable Not Applicable
Section VIII Preferred Shares
□Applicable Not Applicable
During the reporting period, the Company had no preferred shares.
Section IX Bonds
□Applicable Not Applicable
Section X Financial Report
Consolidated Balance Sheet
Dec 31,2022
Prepared by：Shandong Zhonglu Oceanic Fisheries Co., Ltd. Unit：RMB Yuan
Item Note As at 31/12/2022 As at 31/12/2021 Item Note As at 31/12/2022 As at 31/12/2021
Current assets: Current liabilities:
Cash at bank and on hand 6.1 227,264,342.31 210,573,782.49 Short-term loans 6.16 20,024,144.40 10,013,291.67
Financial assets held for
trading Financial liabilities held for trading
Derivative financial assets Derivative financial liabilities 6.7
Notes receivable Notes payable
Accounts receivable 6.2 57,833,671.83 37,806,586.91 Accounts payable 6.18 134,272,304.05 50,121,395.04
Receivables for financing Advances from customers 6.19 1,684,961.19
Prepayments 6.3 Contract liabilities 6.20
26,860,050.66 18,683,750.61 49,576,606.91 13,220,675.60
Other receivables 6.4 Employee benefits payable 6.21
5,562,546.59 3,596,759.88 55,116,034.18 45,410,711.06
Including:Interest receivable Taxes and surcharges payable 6.22
4,341,676.32 4,258,871.51
Dividends
Other payables 6.23
receivable 18,326,716.51 9,774,065.87
Inventories 6.5 426,125,273.33 277,095,357.75 Including:Interest payable
Contract assets Dividends payable
Held-for-sale assets Held-for-sale liabilities
Non-current assets due Non-current liabilities due within one
6.24
within one year year 6,502,041.67 4,909,314.65
Other current assets 6.6 10,791,446.11 20,633,592.23 Other current liabilities 6.25 223,557.01 14,100.55
Total current assets 754,437,330.83 568,389,829.87 Total current liabilities 290,068,042.24 137,722,425.95
Non-current assets: Non-current liabilities:
Debt investments Long-term loans 6.26 283,557,577.77 149,393,532.37
Other debt investments Bonds payable
Long-term receivables Including: Preference shares
Long-term equity 6.7 Perpetual loans
investments 1,983,923.48 -
Other equity instrument Lease liabilities
investments
Other non-current financial
Long-term account payable
assets
Investment property 6.8 Long-term employee benefits payable 6.27
28,782,856.07 30,108,932.75 616,935.20 1,026,222.58
Fixed assets 6.9 630,970,963.32 476,894,877.56 Anticipation liabilities
Construction in process 6.10 344,727,296.32 165,273,027.75 Deferred income 6.28 13,500,315.67 13,691,209.07
Productive biological assets Deferred tax liabilities 6.14
2,610,499.36 2,777,589.45
Oil and gas assets Other non-current liabilities
Right-of-use assets 6.11 Total non-current liabilities
410,045.97 2,354,943.86 300,285,328.00 166,888,553.47
Intangible assets 6.12 Total liabilities
62,627,704.04 12,110,397.72 590,353,370.24 304,610,979.42
Development expenditures Shareholders' equity:
Goodwill Share capital 6.29
266,071,320.00 266,071,320.00
Long-term deferred expenses 6.13 Other equity instruments
79,090.36 220,738.00
Deferred tax assets 6.14 Including: Preference shares
1,557,933.07 1,644,945.96
Other non-current assets 6.15 12,851,990.71 143,137,267.24 Perpetual loans
Total non-current assets 1,083,991,803.34 831,745,130.84 Capital reserve 6.30 295,620,272.02 284,054,997.75
Less:treasury shares
- -
Other comprehensive income 6.31 6,291,344.58 18,256,201.98
Special reserve 6.32
- 232,783.00
Surplus reserve 6.33
21,908,064.19 21,908,064.19
Undistributed profit 6.34
409,764,423.32 379,524,911.94
Equity attributable to parent company
987,072,734.95 933,535,874.90
Minority interests 261,003,028.98 161,988,106.39
Total equity 1,248,075,763.93 1,095,523,981.29
Total of assets Total liabilities and equity
1,838,429,134.17 1,400,134,960.71 1,838,429,134.17 1,400,134,960.71
Person in charge of the company:lulianxing Person in charge of accounting function:fuchuanhai Person in charge of accounting depertment:leilixin
Consolidated Statement of Income
For the year ended 31 December 2022
Prepared by：Shandong Zhonglu Oceanic Fisheries Co., Ltd. Unit：RMB Yuan
N
Year ended Year ended Year ended
Item Note Year ended 31/12/2022 31/12/2021 Item ot 31/12/2022 31/12/2021
e
1.Total operating income 6.35 985,428,305.37 934,284,403.21 Categorized by ownership
Including: Operating 6.35 985,428,305.37 934,284,403.21 1. Net profit attributable to 30,239,511.38 35,526,982.23
income parent company
2. Profit/loss attributable
2.Total operating cost 936,984,781.98 8,410,031.96 1,126,885.04
933,025,967.92 to minority shareholders
6. Other comprehensive
Less: Operating costs 6.35 873,701,560.02 849,588,130.75 income net of tax 14,135,022.30 -6,886,431.99
Total comprehensive income
Taxes and surcharges 6.36 2,707,749.69 attributable to shareholders of 6.4 11,964,857.40 -5,472,662.85
2,170,926.08 9
parent company
(1) Comprehensive income not
Selling and distribution
expenses 6.37 3,380,701.10 3,548,619.96 to be reclassified to profit or
loss
General and administrative 1) Changes in remeasurement
expenses 6.38 64,374,235.07 64,478,320.35 of defined benefit obligations
2) Other comprehensive
Research and development 6.39 3,394,089.25 income not to be reclassified to
expenses 765,456.70
profit or loss in equity method
Finance expenses 6.40 -10,573,553.15 12,474,514.08 3) Fair value changes in other
equity instrument investments
Including:Interest 4) Fair value changes in the
6.40 2,904,189.24
expenses 1,548,600.65 enterprise's own credit risk
Interest income 6.40 672,995.57 569,224.71 5)Others
Add: Other income 6.41 47,748,665.86 40,916,418.36 (2) Comprehensive income to 6.4 11,964,857.40 -5,472,662.85
be reclassified to profit or loss 9
1) Other comprehensive
Investment income ("-" 6.42 773,612.72 - income to be reclassified to
for loss) 77,554.43
profit or loss in equity method
Including: Investment 2) Gain or loss from fair value
income from associates and joint 6.42 -398,421.52 - changes of other debt
ventures instruments
Income from 3) The amount of financial
derecognition of financial assets assets reclassified to other
measured at amortised cost comprehensive income
Net exposure hedging 4) Credit impairment provision
gains ("-" for loss) of other debt investment
Gain from fair value
changes ("-" for loss) 5) Cash flow hedging reserve
Credit impairment losses 6.43 -826,867.20 1,631,064.94 6) Currency translation 6.4 11,964,857.40 -5,472,662.85
("-" for loss) difference 9
Impairment on assets ("-" -
6.44 -59,961,212.95 7) Others
for loss) 7,167,438.13
Gains from disposal of Other comprehensive income 6.4
6.45 5,081,530.63 attributable to minority share- 2,170,164.90 -1,413,769.14
assets ("-" for loss) 3,494,326.93 holders, net of tax 9
3. Operating profits ("-" for loss) 41,259,252.45 40,055,252.96 7. Total comprehensive income 52,784,565.64 29,767,435.28
(1) Total comprehensive
Add: Non-operating income 6.46 176,255.05 income attributable to 42,204,368.78 30,054,319.38
884,810.25 shareholders of parent
company
(2) Total comprehensive
Less:Non-operating expenses 6.47 71,313.09 income attributable to minority 10,580,196.86 -286,884.10
86,336.72
shareholders
4. Profit before tax ("-" for loss) 41,364,194.41 8. Earnings per share
40,853,726.49
Less:income tax expenses 6.48 2,714,651.07 4,199,859.22 (1) Basic earnings per share 0.11 0.13
5. Net profit ("-" for net loss) 38,649,543.34 (2) Diluted earnings per share 0.11 0.13
36,653,867.27
Categorized by going concern basis
1. Profit or loss from
continuing operations 38,649,543.34 36,653,867.27
2. Profit or loss from
discontinued operations
Person in charge of the company: lulianxing Person in charge of accounting function:fuchuanhai Person in charge of accounting depertment:leilixin
Consolidated Statement of Cash Flows
For the year ended 31 December 2022
Prepared by：Shandong Zhonglu Oceanic Fisheries Co., Ltd. Unit：RMB Yuan
Year ended Year ended Year ended
Item Note Year ended 31/12/2022 Item Note
31/12/2021 31/12/2022 31/12/2021
3. Cash flows from financing
1. Cash flows from operating activities
activities:
Cash received from
Cash received from sales and services 997,628,271.08 975,952,422.42
investments by others 100,000,000.00 -
Including: cash received
Taxes and surcharges refunds 42,646,182.32 38,193,930.62 by subsidiaries from minority
100,000,000.00 -
shareholders' investments
Cash received related to other operating Cash received from
6.50 57,246,792.68 41,622,892.30
activities borrowings 354,300,000.00 227,138,476.01
Total cash inflows from operating Cash received related to
1,097,521,246.08 1,055,769,245.34
activities other financing activities - -
Total cash inflows from
Cash paid for goods and services 876,993,067.62 690,728,218.89
financing activities 454,300,000.00 227,138,476.01
Cash paid to and for employees 177,259,066.49 165,791,072.24 Cash repayments for debts
217,605,316.00 105,644,255.24
Cash payments for
Taxes and surcharges cash payments 13,319,654.61 7,890,850.24 distribution of dividends,
9,958,538.93 2,311,232.88
profit and interest expenses
Including: dividends or
Cash paid related to other operating
6.50 17,216,784.26 21,463,279.15 profit paid by subsidiaries to
activities - -
minority shareholders
Total cash outflows from operating Cash paid related to other
1,084,788,572.98 885,873,420.52 6.50
activities financing activities 1,780,432.76 3,627,734.36
Total cash outflows from
Net cash flows from operating activities 12,732,673.10 169,895,824.82
financing activities 229,344,287.69 111,583,222.48
Net cash flows from
2. Cash flows from investing activities： - -
financing activities 224,955,712.31 115,555,253.53
4. Effect of foreign exchange
Cash received from withdraw of -
265,112,800.00 5,000,000.00 rate changes on cash and
investments 9,047,338.51 4,758,728.85
cash equivalents
5. Net increase in cash and -
Cash received from investment income 1,076,034.24 49,972.60
cash equivalents 17,615,036.32 46,086,305.94
Net cash received from disposal of
Add: beginning balance of
\property, plant and 8,046,588.88 5,119,124.64
cash and cash equivalents 209,649,305.99 255,735,611.93
equipement,intangible assets and other
long-term assets
Net cash received from disposal of 6. Ending balance of cash
- -
subsidiaries and other business units and cash equivalents 227,264,342.31 209,649,305.99
Cash received related to other investing
5,000,000.00 -
activities
Total cash inflows from investing
279,235,423.12 10,169,097.24
activities
Cash paid for property, plant and
equipement,intangible assets and other 240,956,965.72 336,947,752.68
long-term assets
Cash payments for investments 267,399,145.00 -
Net cash paid for acquiring subsidiaries
- -
and other business units
Cash paid related to other investing
- -
activities
Total cash outflows from investing
508,356,110.72 336,947,752.68
activities
Net cash flows from investing activities -229,120,687.60 -326,778,655.44
Person in charge of the company: lulianxing Person in charge of accounting function:fuchuanhai Person in charge of accounting depertment:leilixin
Consolidated Statement of Changes in Equity
For the year ended 31 December 2022
Prepared by：Shandong Zhonglu Oceanic Fisheries Co., Ltd. Unit：RMB Yuan
Year 2022
Equity attributable to shareholders of parent company
Other equity Minorit
Item instruments Other Total
Gener y owners'
Share Prefe Capital Less:tr compr Special Surplu al risk Undistr Sub- interest
renc Perp Othe easury ehensi s ibuted Others s equity
capital reserve shares ve reserve reserve prepar profit total
e etual ation
shar loans rs income
es
-
1. Ending balance of last year 266,071, 284,054, 18,256, 232,783 21,908, 379,524, 933,535, 161,988, 1,095,52
- - - - - -
320.00 997.75 201.98 .00 064.19 911.94 874.90 106.39 3,981.29
Add: Impact from changes in
accounting policies - - - - - - - - - - - - - - -
Impact from corrections of
errors in prior period - - - - - - - - - - - - - - -
Business combination under
common control - - - - - - - - - - - - - - -
Others
- - - - - - - - - - - - - - -
-
2. Beginning balance of current 266,071, 284,054, 18,256, 232,783 21,908, 379,524, 933,535, 161,988, 1,095,52
year - - - - - -
320.00 997.75 201.98 .00 064.19 911.94 874.90 106.39 3,981.29
-
3. Movement for current year("-" 11,565,2 11,964, 232,783 30,239,5 53,536,8 99,014,9 152,551,
for decrease） - - - - - - - -
74.27 857.40 .00 11.38 60.05 22.59 782.64
(1) Total comprehensive income - - - - - - 11,964, - - - 30,239,5 - 42,204,3 10,580,1 52,784,5
857.40 11.38 68.78 96.86 65.64
(2) Shareholder's contributions
and withdrawals of captial - - - - 11,565,2 - - - - - - - 11,565,2 88,434,7 100,000,
74.27 74.27 25.73 000.00
1) Common stock contributed by
100,000, 100,000,
shareholders - - - - - - - - - - - - - 000.00 000.00
2) Capital contributed by other
equity instruments holders - - - - - - - - - - - - - - -
3) Share-based payment recorded
in shareholder's equity - - - - - - - - - - - - - - -
4) Others -
- - - - 11,565,2 - - - - - - - 11,565,2 11,565,2 -
74.27 74.27 74.27
(3) Profits distribution
- - - - - - - - - - - - - - -
1) Appropriation of surplus
reserve - - - - - - - - - - - - - - -
2) Distribution to shareholders - - - - - - - - - - - - - - -
3) Others
- - - - - - - - - - - - - - -
(4) Internal transfer within
shareholder's equity - - - - - - - - - - - - - - -
1) Conversion of capital reserve
into share capital - - - - - - - - - - - - - - -
2) Conversion of surplus reserve
into share capital - - - - - - - - - - - - - - -
3) Recover of loss by surplus
reserve - - - - - - - - - - - - - - -
4) Change of defined benefit
obligations carried forward to
retained earnings - - - - - - - - - - - - - - -
5) Other comprehensive income
carried forward to retained
earnings - - - - - - - - - - - - - - -
6) Others
- - - - - - - - - - - - - - -
- -
-
(5) Special reserve - - - - - - - 232,783 - - - - 232,783. - 232,783.
.00 00
00
1) Accrual of special reserve 849,791 849,791. 849,791.
- - - - - - - - - - - -
.41 41 41
2) Utilization of special reserve - - - - - - - 1,082,5 - - - - 1,082,57 - 1,082,57
74.41 4.41 4.41
(6) Others
- - - - - - - - - - - - - - -
-
4. Ending balance of current year 266,071, 295,620, 6,291,3 21,908, 409,764, 987,072, 261,003, 1,248,07
- - - - - - -
320.00 272.02 44.58 064.19 423.32 734.95 028.98 5,763.93
Person in charge of the company: lulianxing Person in charge of accounting function:fuchuanhai Person in charge of accounting depertment:leilixin
Consolidated Statement of Changes in Equity (Continued)
For the year ended 31 December 2022
Prepared by：Shandong Zhonglu Oceanic Fisheries Co., Ltd. Unit：RMB Yuan
Year 2021
Equity attributable to shareholders of parent company
Other equity
instruments Other Minorit
Item Gener Total
Prefe Less:tr compr Surplu Undistr y
Share Capital Special al risk Sub- owners'
renc Perp easury ehensi s ibuted Others interest
capital Othe reserve reserve prepar total equity
shares ve reserve profit s
e etual
rs ation
shar loans income
es
-
1. Ending balance of last year 266,071, 284,054 12,783, 21,908, 343,997, 903,248, 162,274, 1,065,52
- - - - - - -
320.00 ,997.75 539.13 064.19 929.71 772.52 990.49 3,763.01
Add: Impact from changes in
accounting policies - - - - - - - - - - - - - - -
Impact from corrections of
errors in prior period - - - - - - - - - - - - - - -
Business combination under
common control - - - - - - - - - - - - - - -
Others
- - - - - - - - - - - - - - -
-
2. Beginning balance of current
266,071, 284,054 12,783, 21,908, 343,997, 903,248, 162,274, 1,065,52
year - - - - - - -
320.00 ,997.75 539.13 064.19 929.71 772.52 990.49 3,763.01
3. Movement for current year("-" - -
5,472,6 232,783 35,526,9 30,287,1 286,884. 30,000,2
for decrease） - - - - - - - - -
62.85 .00 82.23 02.38 10 18.28
- -
(1) Total comprehensive income 5,472,6 35,526,9 30,054,3 286,884. 29,767,4
- - - - - - - - - -
62.85 82.23 19.38 10 35.28
(2) Shareholder's contributions
and withdrawals of captial - - - - - - - - - - - - - - -
1) Common stock contributed by
shareholders - - - - - - - - - - - - - - -
2) Capital contributed by other
equity instruments holders - - - - - - - - - - - - - - -
3) Share-based payment recorded
in shareholder's equity - - - - - - - - - - - - - - -
4) Others
- - - - - - - - - - - - - - -
(3) Profits distribution
- - - - - - - - - - - - - - -
1) Appropriation of surplus
reserve - - - - - - - - - - - - - - -
2) Distribution to shareholders
- - - - - - - - - - - - - - -
3) Others
- - - - - - - - - - - - - - -
(4) Internal transfer within
shareholder's equity - - - - - - - - - - - - - - -
1) Conversion of capital reserve
into share capital - - - - - - - - - - - - - - -
2) Conversion of surplus reserve
into share capital - - - - - - - - - - - - - - -
3) Recover of loss by surplus
reserve - - - - - - - - - - - - - - -
4) Change of defined benefit
obligations carried forward to
- - - - - - - - - - - - - - -
retained earnings
5) Other comprehensive income
carried forward to retained
- - - - - - - - - - - - - - -
earnings
6) Others
- - - - - - - - - - - - - - -
(5) Special reserve 232,783 232,783. 232,783.
- - - - - - - - - - - -
.00 00 00
1) Accrual of special reserve 954,700 954,700. 954,700.
- - - - - - - - - - - -
.51 51 51
2) Utilization of special reserve 721,917 721,917. 721,917.5
- - - - - - - - - - - -
.51 51 1
(6) Others
- - - - - - - - - - - - - - -
-
4. Ending balance of current year 266,071, 284,054 18,256, 232,783 21,908, 379,524, 933,535, 161,988, 1,095,52
- - - - - -
320.00 ,997.75 201.98 .00 064.19 911.94 874.90 106.39 3,981.29
Person in charge of the company: lulianxing Person in charge of accounting function:fuchuanhai Person in charge of accounting depertment:leilixin
Balance Sheet
Dec 31,2022
Prepared by：Shandong Zhonglu Oceanic Fisheries Co., Ltd. Unit：RMB Yuan
As at As at
Item Note As at 31/12/2022 As at 31/12/2021 Item Note
31/12/2022 31/12/2021
Current assets: Current liabilities:
Cash at bank and on hand Short-term loans
50,352,735.39 49,943,353.89 - -
Financial assets held for
Financial liabilities held for trading
trading - - - -
Derivative financial assets Derivative financial liabilities
- - - -
Notes receivable Notes payable
- - - -
Accounts receivable 14.1 Accounts payable
416,945.02 8,731,060.84 44,867,412.91 12,713,180.90
Receivables for financing Advances from customers
- - 1,684,961.19 -
Prepayments Contract liabilities
11,978,519.28 3,565,433.92 19,914,211.04 1,930,695.41
Other receivables 14.2 Employee benefits payable
124,833,179.13 119,015,186.36 16,132,001.87 13,477,985.59
Including:Interest receivable Taxes and surcharges payable
- - 847,721.94 426,832.47
Dividends receivable 14.2 Other payables
79,137,061.83 85,085,303.70 161,941,857.71 43,495,400.72
Inventories Including:Interest payable
73,584,901.53 47,379,848.34 - -
Contract assets Dividends payable
- - - -
Held-for-sale assets Held-for-sale liabilities
- - - -
Non-current assets due within Non-current liabilities due within one
one year - - year 6,502,041.67 3,840,573.17
Other current assets Other current liabilities
1,036,415.04 8,240,901.15 - -
Total current assets Total current liabilities
262,202,695.39 236,875,784.50 251,890,208.33 75,884,668.26
Non-current assets: Non-current liabilities:
- - - -
Debt investments Long-term loans 149,393,532.3
- - 283,557,577.77
7
Other debt investments Bonds payable
- - - -
Long-term receivables Including: Preference shares
3,852,541.51 3,858,748.19 - -
Long-term equity investments 14.3 Perpetual loans
328,189,455.23 232,189,455.23 - -
Other equity instrument
Lease liabilities
investments - - - -
Other non-current financial
Long-term account payable
assets - - - -
Investment property Long-term employee benefits payable
28,782,856.07 30,108,932.75 528,268.97 682,730.26
Fixed assets Anticipation liabilities
112,981,919.66 47,561,985.28 - -
Construction in process Deferred income
330,769,336.43 118,472,605.94 - -
Productive biological assets Deferred tax liabilities
- - - -
Oil and gas assets Other non-current liabilities
- - - -
Right-of-use assets Total non-current liabilities 150,076,262.6
- 1,003,689.06 284,085,846.74
3
Intangible assets Total liabilities 225,960,930.8
242,789.22 488,798.76 535,976,055.07
9
Development expenditures Shareholders' equity:
- - - -
Goodwill Share capital 266,071,320.0
- - 266,071,320.00
0
Long-term deferred expenses Other equity instruments
- - - -
Deferred tax assets Including: Preference shares
- - - -
Other non-current assets Perpetual loans
3,677,308.80 89,675,267.24 - -
Total non-current assets Capital reserve 279,115,900.1
808,496,206.92 523,359,482.45 279,115,900.17
7
Less:treasury shares
- - - -
Other comprehensive income
- - - -
Special reserve
- - - -
Surplus reserve
- - 19,184,672.34 19,184,672.34
-
Undistributed profit -
- - 29,649,045.27
30,097,556.45
Total equity 534,274,336.0
- - 534,722,847.24
6
Total of assets Total liabilities and equity 1,070,698,902. 760,235,266.9
1,070,698,902.31 760,235,266.95
31 5
Person in charge of the company: lulianxing Person in charge of accounting function:fuchuanhai Person in charge of accounting depertment:leilixin
Statement of Income
For the year ended 31 December 2022
Prepared by：Shandong Zhonglu Oceanic Fisheries Co., Ltd. Unit：RMB Yuan
Year Year
Year ended
Item Note Year ended 31/12/2021 Item Note ended ended
31/12/2022
31/12/2022 31/12/2021
1.Including: Operating income 14.4 133,301,999.64 139,327,287.43 4. Net profit ("-" for net loss) 7,358,317.8
448,511.18
0
1. Profit or loss from continuing
Less: Operating costs 14.4 104,663,835.75 116,889,774.06 7,358,317.8
operations 448,511.18
0
2. Profit or loss from
Taxes and surcharges 1,277,316.00 688,962.71
discontinued operations - -
Selling and distribution 5. Other comprehensive income net of
302,268.33 233,063.78
expenses tax - -
General and administrative (1) Comprehensive income not to be
34,807,826.22 32,987,053.48
expenses reclassified to profit or loss - -
Research and development 1) Changes in remeasurement of
1,375,367.02 623,103.64
expenses defined benefit obligations - -
2) Other comprehensive income not
Finance expenses -2,686,950.98 2,366,265.87 to be reclassified to profit or loss in
- -
equity method
3) Fair value changes in other equity
Including:Interest expenses 3,531,483.95 382,300.01
instrument investments - -
4) Fair value changes in the
Interest income 455,083.61 116,329.43
enterprise's own credit risk - -
Add: Other income 14,050,335.87 13,154,771.02 5)Others
- -
Investment income ("-" for (2) Comprehensive income to be
14.5 9,576,034.24 8,867,101.36
loss) reclassified to profit or loss - -
Including: Investment 1) Other comprehensive income to be
income from associates and joint - - reclassified to profit or loss in equity
- -
ventures method
Income from
2) Gain or loss from fair value
derecognition of financial assets - -
changes of other debt instruments - -
measured at amortised cost
3) The amount of financial assets
Net exposure hedging gains
- - reclassified to other comprehensive
("-" for loss) - -
income
Gain from fair value changes ("- 4) Credit impairment provision of
- -
" for loss) other debt investment - -
Credit impairment losses ("-"
432,771.33 -115,883.09 5) Cash flow hedging reserve
for loss) - -
Impairment on assets ("-" for
-17,298,401.93 -117,230.42 6) Currency translation difference
loss) - -
Gains from disposal of assets
- 17,065.22 7) Others
("-" for loss) - -
2. Operating profits ("-" for loss) 323,076.81 7,344,887.98 6. Total comprehensive income 7,358,317.8
448,511.18
0
Add: Non-operating income 130,785.30 13,479.82 7. Earnings per share
- -
Less:Non-operating expenses 5,350.93 50.00 (1) Basic earnings per share
- -
3. Profit before tax ("-" for loss) 448,511.18 7,358,317.80 (2) Diluted earnings per share
- -
Less:income tax expenses - -
- -
Person in charge of the company: lulianxing Person in charge of accounting function:fuchuanhai Person in charge of accounting depertment:leilixin
Statement of Cash Flows
For the year ended 31 December 2022
Prepared by：Shandong Zhonglu Oceanic Fisheries Co., Ltd. Unit：RMB Yuan
Year ended Year ended Year ended Year ended
Item Note Item Note
31/12/2022 31/12/2021 31/12/2022 31/12/2021
1. Cash flows from operating 3. Cash flows from financing
-
activities activities: -
Cash received from sales Cash received from
116,957,691.93 78,815,609.56 -
and services investments by others -
Taxes and surcharges Cash received from
7,654,485.04 - 334,300,000.00
refunds borrowings 207,138,476.01
Cash received related to Cash received related to other
20,554,267.15 88,202,298.50 147,894,716.30
other operating activities financing activities 44,124,032.99
Total cash inflows from Total cash inflows from
145,166,444.12 167,017,908.06 482,194,716.30
operating activities financing activities 251,262,509.00
Cash paid for goods and
60,229,439.09 43,827,721.36 Cash repayments for debts 207,605,316.00
services 54,808,284.01
Cash payments for
Cash paid to and for
45,178,179.52 40,070,474.81 distribution of dividends, profit 9,654,019.71
employees 797,792.63
and interest expenses
Taxes and surcharges cash Cash paid related to other
1,333,379.07 903,215.39 58,952,610.51
payments financing activities 5,345,639.48
Cash paid related to other Total cash outflows from
7,288,776.43 80,422,024.59 276,211,946.22
operating activities financing activities 60,951,716.12
Total cash outflows from Net cash flows from financing
114,029,774.11 165,223,436.15 205,982,770.08
operating activities activities 190,310,792.88
4. Effect of foreign exchange
Net cash flows from operating -
31,136,670.01 1,794,471.91 rate changes on cash and cash -533,788.56
activities 126,645.14
equivalents
2. Cash flows from investing 5. Net increase in cash and cash
- - 409,381.50
activities： equivalents 17,756,470.50
Cash received from Add: beginning balance of cash
260,000,000.00 5,000,000.00 49,943,353.89
withdraw of investments and cash equivalents 32,186,883.39
Cash received from 6. Ending balance of cash and
15,524,276.11 25,559,172.60 50,352,735.39
investment income cash equivalents 49,943,353.89
Net cash received from
disposal of \property, plant
and equipement,intangible - 30,000.00 -
-
assets and other long-term
assets
Net cash received from
disposal of subsidiaries and - - -
-
other business units
Cash received related to
- 13,000,000.00 -
other investing activities -
Total cash inflows from
275,524,276.11 43,589,172.60 -
investing activities -
Cash paid for property,
plant and
155,700,546.14 214,643,321.75 -
equipement,intangible assets -
and other long-term assets
Cash payments for
356,000,000.00 - -
investments -
Net cash paid for acquiring
subsidiaries and other - - -
-
business units
Cash paid related to other
- 3,168,000.00 -
investing activities -
Total cash outflows from
511,700,546.14 217,811,321.75 -
investing activities -
Net cash flows from investing
-236,176,270.03 -174,222,149.15 -
activities -
Person in charge of the company: lulianxing Person in charge of accounting function:fuchuanhai Person in charge of accounting depertment:leilixin
Statement of Changes in Equity
For the year ended 31 December 2022
Prepared by：Shandong Zhonglu Oceanic Fisheries Co., Ltd. Unit：RMB Yuan
Year 2022
Other equity instruments Other
Item Less:trea Undistrib Total
Share Prefer Perpet Capital compreh Special Surplus
sury uted Others owners'
capital ence ual Others reserve ensive reserve reserve
shares profit equity
shares loans income
-
1. Ending balance of last year 266,071,32 279,115,9 19,184,67 30,097,556 534,274,33
- - - - - - -
0.00 00.17 2.34 .45 6.06
Add: Impact from changes in accounting
policies - - - - - - - - - - - -
Impact from corrections of errors in
prior period - - - - - - - - - - - -
Others
- - - - - - - - - - - -
-
2. Beginning balance of current year 266,071,32 279,115,9 19,184,67 30,097,556 534,274,33
- - - - - - -
0.00 00.17 2.34 .45 6.06
3. Movement for current year("-" for
decrease） - - - - - - - - - 448,511.18 - 448,511.18
(1) Total comprehensive income
- - - - - - - - - 448,511.18 - 448,511.18
(2) Shareholder's contributions and
withdrawals of captial - - - - - - - - - - - -
1) Common stock contributed by
shareholders - - - - - - - - - - - -
2) Capital contributed by other equity
instruments holders - - - - - - - - - - - -
3) Share-based payment recorded in
shareholder's equity - - - - - - - - - - - -
4) Others
- - - - - - - - - - - -
(3) Profits distribution
- - - - - - - - - - - -
1) Appropriation of surplus reserve
- - - - - - - - - - - -
2) Distribution to shareholders
- - - - - - - - - - - -
3) Others
- - - - - - - - - - - -
(4) Internal transfer within shareholder's
equity - - - - - - - - - - - -
1) Conversion of capital reserve into share
capital - - - - - - - - - - - -
2) Conversion of surplus reserve into share
capital - - - - - - - - - - - -
3) Recover of loss by surplus reserve
- - - - - - - - - - - -
4) Change of defined benefit obligations
carried forward to retained earnings - - - - - - - - - - - -
5) Other comprehensive income carried
forward to retained earnings - - - - - - - - - - - -
6) Others
- - - - - - - - - - - -
(5) Special reserve
- - - - - - - - - - - -
1) Accrual of special reserve
- - - - - - - - - - - -
2) Utilization of special reserve
- - - - - - - - - - - -
(6) Others
- - - - - - - - - - - -
-
4. Ending balance of current year 266,071,32 279,115,9 19,184,67 29,649,045 534,722,84
- - - - - - -
0.00 00.17 2.34 .27 7.24
Person in charge of the company: lulianxing Person in charge of accounting function:fuchuanhai Person in charge of accounting depertment:leilixin
Statement of Changes in Equity (Continued)
For the year ended 31 December 2022
Prepared by：Shandong Zhonglu Oceanic Fisheries Co., Ltd. Unit：RMB Yuan
Year 2021
Other equity instruments Other
Item Less:trea Undistrib Total
Share Prefer Perpet Capital compreh Special Surplus
Other sury uted Others owners'
capital ence ual reserve ensive reserve reserve
s shares profit equity
shares loans income
-
1. Ending balance of last year 266,071,32 279,115,9 19,184,67 37,455,874 526,916,01
- - - - - - -
0.00 00.17 2.34 .25 8.26
Add: Impact from changes in accounting
policies - - - - - - - - - - - -
Impact from corrections of errors in
prior period - - - - - - - - - - - -
Others
- - - - - - - - - - - -
-
2. Beginning balance of current year 266,071,32 279,115,9 19,184,67 37,455,874 526,916,01
- - - - - - -
0.00 00.17 2.34 .25 8.26
3. Movement for current year("-" for
7,358,317. 7,358,317.
decrease） - - - - - - - - - -
80 80
(1) Total comprehensive income 7,358,317. 7,358,317.
- - - - - - - - - -
80 80
(2) Shareholder's contributions and
withdrawals of captial - - - - - - - - - - - -
1) Common stock contributed by
shareholders - - - - - - - - - - - -
2) Capital contributed by other equity
instruments holders - - - - - - - - - - - -
3) Share-based payment recorded in
shareholder's equity - - - - - - - - - - - -
4) Others
- - - - - - - - - - - -
(3) Profits distribution
- - - - - - - - - - - -
1) Appropriation of surplus reserve
- - - - - - - - - - - -
2) Distribution to shareholders
- - - - - - - - - - - -
3) Others
- - - - - - - - - - - -
(4) Internal transfer within shareholder's
equity - - - - - - - - - - - -
1) Conversion of capital reserve into share
capital - - - - - - - - - - - -
2) Conversion of surplus reserve into share
capital - - - - - - - - - - - -
3) Recover of loss by surplus reserve
- - - - - - - - - - - -
4) Change of defined benefit obligations
carried forward to retained earnings - - - - - - - - - - - -
5) Other comprehensive income carried
forward to retained earnings - - - - - - - - - - - -
6) Others
- - - - - - - - - - - -
(5) Special reserve
- - - - - - - - - - - -
1) Accrual of special reserve
- - - - - - - - - - - -
2) Utilization of special reserve
- - - - - - - - - - - -
(6) Others
- - - - - - - - - - - -
-
4. Ending balance of current year 266,071,32 279,115,9 19,184,67 30,097,556 534,274,33
- - - - - - -
0.00 00.17 2.34 .45 6.06
Person in charge of the company: lulianxing Person in charge of accounting function:fuchuanhai Person in charge of accounting depertment:leilixin
Full text of the annual report of 2022, Shandong Zhonglu Oceanic Fisheries Co., Ltd.
1. Company profile
1.1 The registered address of Shandong Zhonglu Oceanic Fishery Co., Ltd. (hereinafter referred to as “the Company”)
is 29 Miaoqiao Road, Laoshan District, Qingdao, Shandong. It is a company limited by shares established on July 30,
1999, by means of promotion with Shandong Aquaculture Enterprise Group as the key promoter, with the approval
of the Shandong Economic Restructuring Commission through Document LTGZ [1999] No. 85. With the approval
of the China Securities Regulatory Commission through Document ZJFXZ [2000] No. 82 on June 26, 2000, the
Company’s B-shares were listed on the Shenzhen Stock Exchange on July 24, 2000. The short stock name is “Zhonglu
B,” and the stock code is “200992.”
The Company’s basic organizational structure consists of: Annual General Meeting, Board of Directors, Board of
Supervisors, General Manager’s Office (Party Committee’s Office), Board Office, Human Resources Department
(Organizational Department), Financial Management Department (Capital Operations Department), Corporate
Development Department, Audit Department, Oceanic Management Departments, Discipline Inspection
Committee’s Office, Party’s Mass Work Department, and Risk Control Department (Legal Affairs Department).
1.2 Business Nature and Key Operating Activities
The Company is engaged in the oceanic fishery industry.
The Company’s key products include tuna and its products.
The Company’s business scope is: general business items: processing and sale of aquatic products; commodity import
and export within the approved scope; manufacture and sale of machine-made ice; manufacture, installation, and
repair of refrigeration equipment; refrigeration and cold storage; loading, unloading, and handling services; property
leasing.
Business items with prerequisite licensing: open-water fishing and long-range fishing.
1.3 Name of the parent company and the ultimate parent company of the Group is Shandong State-owned Assets
Investment Holdings Co., Ltd
1.4 Approver and Approval Date of Financial Reports for Release.
The financial statements have been approved by the Company’s Board through the resolution made on April 26, 2023.
2. Scope of Consolidated Financial Statements for the Year
As at December 31, 2022, five tier-2 companies, four tier-3 companies, and one economic entity of which the control
is formed through operating leasing were included in the scope of the Company’s consolidated financial statements.
The five tier-2 companies include: Shandong Zhonglu Aquaculture Shipping Co., Ltd., Shandong Zhonglu Oceanic
(Yantai) Food Co., Ltd., Habitat International Corporation, Shandong Zhonglu Haiyan Oceanic Fishery Co., Ltd., and
Zhonglu Oceanic (Qingdao) Industrial Investment and Development Co., Ltd.; the four tier-3 companies include: Laif
Fisheries Company Limited, Shandong Zhonglu Oceanic Cold Storage Co., Ltd., Africa Star Fisheries Limited, and
Zhong Gha Foods Company Limited; the economic entity of which the control is formed through operating leasing is
Yaw Addo Fisheries Company Limited. For the scope of the consolidated financial statements for the year and the
changes, refer to the notes “VII. Change of the Consolidated Scope” and “VIII. Disclosure of Equity in Other
Entities.”
75
Full text of the annual report of 2022, Shandong Zhonglu Oceanic Fisheries Co., Ltd.
3. Basis of preparation of financial statements
3.1 Basis of preparation
On the basis of going concern and transactions and events actually occurred, accounting is based on Accrual Basis.
The company generally adopts historical cost to measure accounting elements. On the premise that the amount of
accounting elements determined can be obtained and measured reliably, the company adopts Replacement cost, Net
realizable value, Present value and Fair value to measure accounting elements.
3.2 Going concern
Within at least 12 months of this report, the company should maintain its operational capacity without matters that
have potential impact on ability of the continuing operations.
4. Significant accounting policies and accounting estimates
4.1 Declaration on compliance with the Accounting Standards for Business Enterprises
The financial statements and notes are in accordance with the Accounting Standards for Business Enterprises
promulgated by the Ministry of Finance, the application guidelines, Interpretation of the Accounting Standards for
Business Enterprises, “No. 15 rules for the preparation and reporting of information disclosure by companies that
issue securities to the public – general provisions on financial reports [2014 Amendment]" issued by the China
Securities Regulatory Commission and relevant supplementary provisions, which truly and completely reflect the
company’s financial status, operating results, changes in shareholders’ equity and cash flow and other relevant
information.
4.2 Accounting period
The financial year of the Company is from January 1 to December 31 of each calendar year.
4.3 Operating cycle
The Company’s operating cycle is 12 months in each calendar year and it classifies the assets and liabilities' liquidity by
operating cycle.
4.4 Functional currency
The Company's functional currency is Chinese Renminbi.
4.5 Business combination
4.5.1 Business combinations involving enterprises under common control
In a business combination involving enterprises under common control, if the acquirer pays for the business
combination in cash, by transferring of non-cash assets or assuming liabilities, the initial investment cost is the holding
share of the acquiree's equity in the ultimate controlling party's consolidated financial statements measured at the
carrying amounts at the acquisition date. If the acquirer issues equity instruments for the business combination, the
acquirer measures the share capital by the par value of the shares issued. The difference between the original
76
Full text of the annual report of 2022, Shandong Zhonglu Oceanic Fisheries Co., Ltd.
investment cost and the carrying amount (or the total par value of shares issued) will be adjusted to the capital reserve.
If the capital reserve is insufficient to absorb the difference, the remaining amount shall be deducted from the retained
earnings. The intermediary fees of auditing, legal services, evaluation and consultation and other related management
expenses incurred for business combination shall be recorded into current profits and losses when incurred. The
bonds issued for the combination of enterprise or the handling fees and commissions paid for assumption other debts
shall be included in initial measurement amount of the bonds and other debts issued. The handling fees, commissions
and other expenses incurred from the issuance of equity securities in the course of business combination shall be
offset against the premium income of equity securities, and retained earning shall be offset if the premium income is
not sufficient to be offset.
4.5.2 Business combinations involving enterprises not under uncommon control
(a) In a business combination involving enterprises not under common control, the combination costs are determined
according to the following conditions: a. the aggregate of the fair values of the assets paid, the liabilities incurred or
assumed and the equity instruments issued by the acquirer in exchange for control over the acquiree at the acquisition
date; b. for the Business combinations which is realized step by step through multiple exchange transactions, the initial
investment cost of long-term equity investment is the sum of each single transaction cost; c. The intermediary fees of
auditing, legal services, evaluation and consultation and other related management expenses incurred for business
combination shall be recorded into the current profit and loss when incurred. Transaction cost of equity securities or
debt securities issued as consideration for the combination is included in the initial recognition amount of the equity
securities or debt securities; d. If the future events that may affect the merger cost are stipulated in the combination
contract or agreement, and if it is estimated that the future events are likely to occur and the amount of influence on
the merger cost can be measured reliably on the purchase date, it will be included in the initial investment cost of the
long-term equity investment.
(b) At the acquisition date, the acquired assets, liabilities and contingent liabilities of the acquiree that meet the
recognition criteria are measured at their fair value.
If investment cost of long-term equity investment is more than the difference in the share of fair value of identifiable
net assets acquired by the purchaser in the merger, it shall be recognized as goodwill.
If investment cost of long-term equity investment is less than the difference in the share of fair value of identifiable
net assets acquired by the purchaser in the merger, it shall be handled in the following way: a. Review the measurement
of the fair value of all identifiable assets, liabilities and contingent liabilities of the acquired purchaser and the
combined cost; b. If the merger cost is still less than the fair value share of identifiable net assets acquired during the
merger after review, the difference shall be recorded into profit or loss for the current period entirely.
4.6 Preparation of consolidated financial statements
The consolidated scope of the consolidated financial statements is determined on a control basis. Control refers to the
investor has the power of the investee, through participation in the investee related activities and enjoy variable
returns, and have the ability to use the power of the investee influence its return amount.
The Company incorporates all its subsidiaries (including individual entities under its control) into the scope of the
consolidated financial statements, including the enterprises controlled by the Company, divisible part in the investees
and structured entities.
77
Full text of the annual report of 2022, Shandong Zhonglu Oceanic Fisheries Co., Ltd.
If the parent company is an investment entity, the parent company should only include its subsidiaries (if any) that
provide relevant services for its investment activities into the scope of consolidation and prepare consolidated
financial statements; other subsidiaries shall not be consolidated. The parent company's investment in other
subsidiaries shall be measured at fair value and its changes shall be recorded into profits and loss for the current
period entirely. When the parent company simultaneously satisfies the following conditions, the parent company
belongs to the investment subject: a. The parent company obtains funds from one or more investors for the purpose
of providing investment management services to investors; b. The sole purpose of the parent company's operations is
to generate returns for investors through capital gain, income from investment or both; c. The parent company
measures and evaluates the performance of almost all investments at fair value.
The unified accounting policy and period used by the company and the consolidated subsidiary when preparing of
consolidated statements. The consolidated financial statements are prepared based on the individual financial
statements of the Company and its subsidiaries, after elimination of the transactions incurred among the Company
and the subsidiaries. Where a subsidiary or business has been acquired through a business combination involving
enterprises under common control in the reporting period, the company should adjust the opening balance of the
consolidated balance sheet. Where a subsidiary or business has been acquired through a business combination
involving enterprises not under common control in the reporting period, the company should not adjust the opening
balance of the consolidated balance sheet. Where a subsidiary or business has been acquired through a business
combination involving enterprises under common control in the reporting period, the income, expense, profit and
cash flow of the subsidiary from the beginning of the consolidation period to the end of the reporting period are
included in the consolidated income statement and cash flow statement. Where a subsidiary or business has been
acquired through a business combination involving enterprises not under common control in the reporting period, the
income, expenses, profit and cash flow of the subsidiary from the purchase date to the end of the reporting period are
included in the consolidated income statement and cash flow statement. The company disposed of the subsidiary
during the reporting period, the income, expenses, profit and cash flow of the subsidiary from the beginning of the
year to the disposal date are included in the consolidated income statement and cash flow statement.
When the parent company purchases the equity of the subsidiary owned by the minority shareholders of the subsidiary,
in the consolidated financial statements, the difference between the newly acquired long-term equity investment due
to the purchase of minority equity and the proportion of the newly added shareholding shall be entitled to the
subsidiary’s continuous calculation from the date of purchase or the date of consolidation should be adjusted to the
capital reserve and if the capital reserve is insufficient to absorb the difference, the remaining amount shall be
deducted from the retained earnings.
In the consolidated financial statements, when the Company partly disposes its investment in a subsidiary without
losing its control on the subsidiary, the difference between the consideration received and its corresponding portion of
the net asset continually calculated from the purchase date or combination date should be adjusted to the capital
reserve and if the capital reserve is insufficient to absorb the difference, the remaining amount will be deducted from
the retained earnings.
In the consolidated financial statements, if the Company loses its control on an investee because of disposing some
portion of its equity investment in the investee, the remaining balance of its equity investment will be remeasured at
the fair value of the date at which it loses its control. The difference between the sum of the consideration received
and the fair value of the remaining equity investment, and its corresponding interest portion of the net asset
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continually calculated from the purchase date or the combination date should be recorded in the investment income
of the current period, and be deducted to goodwill simultaneously. Other comprehensive income (OCI) etc. relating
to the investment in the former subsidiary will be transferred to the investment income in the same period in which it
loses its control, other comprehensive income arising from the change in net liabilities or net assets of the defined
benefit plan remeasured by the investee shall be excluded.
4.7 Joint arrangement classification and accounting treatments
4.7.1 The classification of joint arrangement
Joint arrangements are classified as joint operations or joint ventures.
Joint operation refers to a joint arrangement in which the joint venture party enjoys the relevant assets of the
arrangement and assumes the relevant liabilities of the arrangement.
The Company acted as a party participating in joint operations, confirm the following items relating to its interests in
the joint operations and accounts for them in accordance with related requirements of Accounting Standards for
Business Enterprises:
(a) Its solely-held assets and solely-assumed liabilities, and its share of any assets and liabilities held jointly;
(b) Its revenue from the sale of its share of the output arising from the joint operation;
(c) Its share of the revenue from the sale of the output by the joint operation;
(d) Its own expenses and its share of any expenses incurred jointly.
A joint venture refers to a joint arrangement in which the joint venture party only has rights to the net assets of the
arrangement. Investments in joint ventures are accounted for by the company in accordance with the equity method.
4.8 Cash and cash equivalents
The cash in the Company's statement of cash flows is cash on hand and deposits that can be readily drawn on demand.
Cash equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash and
which are subject to an insignificant risk of change in value.
4.9 Foreign currency transactions and translation of financial statements denominated in foreign currency
(1) In the initial confirmation of a foreign currency transaction, the foreign currency amount shall be converted into
THE RMB amount using an approximate exchange rate of the spot exchange rate at the date when the transactions
occurs.
(2) On the balance sheet date, foreign currency monetary items and foreign currency non-monetary items shall be
handled in accordance with the following methods:
(a) Foreign currency monetary items shall be translated at the central rate of THE EXCHANGE rate of RMB
published by the People's Bank of China on the balance sheet date. Foreign exchange difference between the
prevailing exchange rate on that date and the prevailing exchange rate on initial recognition or on the previous balance
sheet date are recognized in profit or loss for the current period.
(b) Non-monetary items denominated in foreign currency that are measured at historical cost are still translated at
amount in functional currency exchanged at the prevailing exchange rate at the transaction date. Non-monetary items
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denominated in foreign currency that are measured at fair value are translated using the exchange rate at the date when
fair value was determined and the difference between the translated functional currency amount and the prior
translated amount on initial recognition or on the previous balance sheet date are recorded in profit or loss for the
current period or other comprehensive income.
Monetary items refer to the monetary funds held by the company and the assets or liabilities to be collected or paid at
a fixed or determinable amount. The term "non-monetary items" refers to items other than monetary items.
(3) The translation of financial statements denominated in foreign currency
(a) The assets and liabilities are translated to RMB amounts using the spot exchange rate at the balance sheet date.
Items of the equity, except for "retained earnings ", are translated at the spot exchange rate at the dates when such
items occurred.
(b) The revenue and expenditures in the statement of income are translated using an approximate exchange rate of the
spot exchange rate at the transaction date.
(c) The difference arising from foreign currency financial statements translation is presented in other comprehensive
income at the consolidated balance sheet within equity.
(4) The company shall translate the financial statements of overseas operations in an economy with hyperinflation in
accordance with the following methods:
The balance sheet items shall be restated using the general price index, and the income statement items shall be
restated using the changes of the general price index, and then translated according to the spot exchange rate on the
latest balance sheet date; when the overseas operation is no longer in the hyperinflationary economy, the restatement
shall be stopped and the financial statements restated shall be converted according to the price level on the cessation
date.
(5) When disposing of foreign operations, exchange differences of foreign currency financial statements attributable to
the foreign operations are transferred to profit or loss for the current period entirely or in proportion with the
disposal portion of the foreign operations.
4.10 Financial instruments
Financial instruments are the contracts under which the financial assets of an entity are formed and correspondingly
the financial liabilities or equity instruments of any other entity are formed. When a company becomes a party to a
financial instrument contract, the related financial asset or financial liability is recognized.
4.10.1 Financial assets
4.10.1.1 Classification and initial measurement
According to the business model of financial assets management and contractual cash flow characteristics of financial
assets, the company divides financial assets into:
a) Financial assets measured at amortized cost;
b) Financial assets measured at fair value through other comprehensive income;
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c) Financial assets measured at fair value through profit or loss.
The Company measures financial instruments at fair value upon their initial recognition. The related transaction fees
for the financial assets subsequently measured at fair value through profit or loss are charged in profit or loss directly.
The related transaction fees for other financial assets are included in their initial costs. The Company measures the
accounts receivable and notes receivable deriving from selling goods or providing services at their transaction price if
the accounts receivable and notes receivable do not contain a significant financing component or the Company
applies the practical expedient not considering the significant financing component.
(a) Debt instruments
Debt instruments held by the company refer to those instruments that conform to the definition of financial liabilities
from the perspective of the issuer and are measured in the following three ways:
a) Measured at amortized cost:
The Company classifies a financial asset as subsequently measured at amortized cost that meets both of the following
conditions:
The financial asset is held within a business model whose objective is to collect contractual cash flows; The
contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the
principal amount outstanding.
The company recognizes interest income on such financial assets in accordance with the effective interest rate method.
Such financial assets mainly include cash at bank and on hand, notes receivable and accounts receivable, contract
assets, other receivables, debt investments, lease receivables and long-term receivables, etc. The company lists the debt
investments and long-term receivables that mature within one year (including one year) from the date of the balance
sheet as non-current assets that mature within one year; debt investments with a maturity of one year (including one
year) at the time of acquisition are listed as other current assets.
b) Measured at fair value through other comprehensive income
The Company classifies a financial asset as subsequently measured at fair value through other comprehensive income
that meets both of the following conditions:
The financial asset is held within a business model whose objective is achieved by both collecting contractual cash
flows and selling the financial asset. The contractual terms give rise on specified dates to cash flows that are solely
payments of principal and interest on the principal amount outstanding.
Such financial assets are measured at fair value and their changes are included in other comprehensive income, but
assert impairment losses or gains, exchange gains or losses and interest income calculated in accordance with the
effective interest rate method are included in profit or loss for the current period entirely. Such financial assets are
listed as other debt investments, and other debt investments maturing within one year (including one year) from the
date of the balance sheet are listed as non-current assets maturing within one year; other debt investments with a
maturity of one year (inclusive) at the time of acquisition are listed as other current assets.
c) Measured at fair value through profit or loss
The Company classifies a financial asset as subsequently measured at fair value through profit or loss and listed as
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financial assets held for trading unless it is subsequently measured at amortized cost or measured at fair value through
other comprehensive income. The Company may make an irrevocable election at initial recognition to designate a
financial asset as subsequently measured at fair value through profit or loss if doing so eliminates or significantly
reduces an accounting mismatch. Other non-current financial assets shall be listed as those that mature more than one
year from the balance sheet date and are expected to be held for more than one year.
(b) equity instrument
The company shall measure the equity instrument investment over which it has no control, joint control or significant
influence according to the fair value through profit and loss, and list it as financial assets held for trading; those
expected to be held for more than one year from the balance sheet date shall be listed as other non-current financial
assets.
In addition, the Company designated part of non-tradable equity instrument investments as financial assets measured
at fair value through other comprehensive income, and listed as other equity instrument investments. The related
dividend income of such financial assets is recorded in the profit or loss for the current period entirely. Once made,
the designation cannot be revoked. Where the contingent consideration recognized by the company in a business
combination not under the common control constitutes a financial asset, the financial asset shall be classified as a
financial asset measured at fair value through profit or loss.
For non-tradable equity instrument investments, the company may, upon initial recognition, irrevocably designate
them as financial assets measured at fair value through other comprehensive income. The designation is made on a
single investment basis that meets the definition of an equity instrument from the issuer's point of view.
4.10.1.2 Impairment of assets
The company recognizes loss provisions on the basis of expected credit losses for financial assets measured at
amortized cost, debt instrument investments which measured at fair value through other comprehensive income, lease
receivables, contract assets and financial guarantee contracts. The Company considers reasonable and reliable
information about past events, current conditions and the forecast of future economic conditions, and takes the risk
of default as the weight to calculate the present value of the difference between the cash flow receivable under the
contract and the cash flow which expected to receive. Then the probability-weighted amount of the present value
should be recognized as expected credit loss.
At each balance sheet date, the company separately measures the expected credit losses of financial instruments
at different stages. If the credit risk of the financial instrument does not increase significantly after the initial
recognition, it is in the first stage, and the company measures the loss provisions according to the expected credit
losses in the next 12 months. If the credit risk of a financial instrument has increased significantly since the initial
recognition but no credit impairment has occurred, the financial instrument is in the second stage, and the
company shall measure the loss provision according to the expected credit loss during the entire life of the
instrument. If a financial instrument has suffered credit impairment since its initial recognition, it is in the third
stage, and the company shall measure the loss provision according to the expected credit losses during the entire
life of the instrument.
The Company calculates interest income based on the book balance and effective interest rate of financial
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instruments in stages I and II and with low credit risk. For financial instruments in the third stage, the interest
income shall be calculated on the basis of the amortized cost and the effective interest rate after deducting the
book balance from the provision for impairment.
For notes receivable and accounts receivable, lease receivables and contract assets, regardless of the existence of
a significant financing component, the Company may measure the loss provision in accordance with the
expected credit losses for the entire life of the company.
a) Credit risk significantly increases judgment criteria
At each balance sheet date, the Company evaluates whether the credit risk of the relevant financial instrument
has increased significantly since the initial recognition.
In determining whether credit risk has increased significantly since the initial recognition, the Company considers
that reasonable and evidence-based information that can be obtained without unnecessary additional cost or
effort, including qualitative and quantitative analyses based on historical data of the Company, external credit risk
ratings and forward-looking information Based on a single financial instrument or a combination of financial
instruments with similar credit risk characteristics, the company compares the risk of default of financial
instruments on the balance sheet date with the risk of default on the initial recognition date to determine the
change of the risk of default of financial instruments during their expected lifetime.
When one or more of the following quantitative or qualitative criteria are triggered, the Company believes that
the credit risk of the financial instrument has increased significantly: a.The quantitative standard is mainly that
the default probability of the remaining duration on the reporting date increases by more than a certain
proportion compared with the initial confirmation; b.The qualitative criteria mainly include the occurrence of
significant adverse changes in the debtor's business or financial situation, the list of early warning customers, etc;
c.The upper limit indicator is that the debtor's contract payment (including principal and interest) is generally
overdue for more than 90 days, and the longest is not more than 180 days.
b) Definition of assets with credit impairment
In order to determine the occurrence of credit impairment, the definition criteria adopted by the Company are
consistent with the internal credit risk management objectives for the relevant financial instruments, and both
quantitative and qualitative indicators are taken into account. When evaluating whether the debtor has credit
impairment, the company mainly considers the following factors: a. The issuer or the debtor has significant
financial difficulties; b. The debtor violates the contract, such as default or overdue payment of interest or
principal, etc.; c. Concessions granted by the creditor to the debtor for economic or contractual reasons related
to the debtor's financial difficulties that would not have been made in any other circumstances; d. The debtor is
likely to go bankrupt or undergo other financial restructuring; e. Financial difficulties of the issuer or debtor
cause the disappearance of the active market for the financial asset; f. To purchase or generate a financial asset at
a substantial discount that reflects the fact that a credit loss has occurred.
The occurrence of credit impairment of financial assets may be caused by the joint action of multiple events, not
necessarily by independently identifiable events
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c) Parameters for the measurement of expected credit losses
Depending on whether there is a significant increase in credit risk and whether there has been a credit
impairment, the company measures the impairment provisions for different assets at the expected credit losses
of 12 months or the whole life. The key parameters of expected credit loss measurement include default
probability, default loss rate and default risk exposure. The company considers quantitative analysis and
prospective information of historical statistical data (such as counterparty rating, guarantee method and category
of pledge, repayment method, etc.) to establish probability of default, loss given default rate and default risk
exposure model.
Relevant definitions are as follows:
a. Probability of default refers to the possibility that the debtor will be unable to fulfill its payment obligations in the
next 12 months or in the entire remaining term. The default probability of the company is adjusted based on the
results of the historical credit loss model, and forward-looking information is added to reflect the default probability
of the debtor in the current macroeconomic environment.
b. Loss given default rate refers to the company's expectation of the loss degree of default risk exposure. Loss given
default rates vary depending on the type of counterparty, method of recourse and priority, and collateral. The loss
given default rate is the percentage of the risk exposure loss at the time of default and is calculated on the basis of the
next 12 months or the entire lifetime;
c. Default risk exposure model is the amount payable to the company at the time of default in the next 12 months or
for the remainder of its life.
d) Prospective information
Prospective information is involved in both the evaluation of the significant increase of credit risks and the calculation
of expected credit loss. By analyzing historical data, the Company identifies credit risks for all business types and key
economic indicators for expected credit loss.
When the Company is unable to evaluate expected credit loss at reasonable cost for a single asset, the Company
divides accounts receivable into several groups based on credit risk characteristics and calculates expected credit loss
by groups. The basis for group determination is as follows:
Item Basis for group Method of measuring expected credit loss
determination
Banker’s acceptance receivable Acceptor The Company calculates expected credit loss using
default risk exposure and the lifetime expected credit
loss rate by reference to historical experience of credit
loss and based on current conditions as well as
forecasts of future economic conditions.
Trade acceptance receivable Acceptor By aging analysis
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Accounts receivable - group of Companies within the The Company measures bad debt provisions by
related parties consolidated scope reference to historical experience of credit loss and
based on forecasts of future economic conditions.
Accounts receivable - group of Companies outside the The Company calculates expected credit loss using
external clients consolidated scope and aging and the lifetime expected credit loss rate.
Lease receivable - group of third-party clients
external clients
Contract assets - group of Companies outside the The Company calculates expected credit loss using
external clients consolidated scope and aging and the lifetime expected credit loss rate.
third-party clients
Other receivables - group of Companies within the The Company measures bad debt provisions by
related parties consolidated scope reference to historical experience of credit loss and
based on forecasts of future economic conditions.
Other receivables - group of Companies outside the The Company measures loss provisions using the
external clients consolidated scope and general method, namely, the “three phases” model.
third-party clients
Long-term receivables - group Companies outside the The Company measures loss provisions using the
of external clients consolidated scope and general method, namely, the “three phases” model.
third-party clients
The comparison table between the aging of accounts receivable portfolio and the expected credit loss rate of the entire
life of accounts receivable portfolio and lease receivable portfolio:
Account receivable age Expected credit loss rate on accounts receivable
Within 6 months 5.00%
Six months to a year 10.00%
1 to 2 years 30.00%
2 to 3 years 50.00%
More than 3 years 100.00%
For other receivables divided into portfolios, the company refers to historical credit loss experience, combined with
current conditions and forecasts of future economic conditions, through default risk exposure and the expected credit
loss rate within the next 12 months or the entire duration to calculate the expected credit loss. In order to reflect the
changes in the credit risk of financial instruments since the initial recognition, the company and its subsidiaries re-
measure the expected credit losses on each balance sheet date, and the resulting increase or reversal of the loss
provision shall be regarded as impairment losses or the profit is included in the current profit and loss. For financial
assets measured at amortized cost, the loss provision is deducted from the book value of the financial assets listed in
the balance sheet; for debt investments measured at fair value through other comprehensive income, the loss
provision in the company and its subsidiaries is recognized in other comprehensive income without deducting the
book value of the financial asset.
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4.10.1.3 Terminate confirmation
The recognition of a financial asset shall be terminated if it meets any of the following conditions:
a. Termination of the contractual right to receive the cash flow of the financial asset;
b. The financial asset has been transferred, and the Company has transferred almost all the risks and rewards in the
ownership of the financial asset to the transferee;
c. The financial asset has been transferred. Although the company neither transfers nor retains almost all risks and
rewards in the ownership of the financial asset, it gives up control over the financial asset.
When other equity instrument investment is terminated for recognition, the difference between its book value and the
sum of the consideration received and the accumulative amount of the fair value changes originally recorded directly
into other comprehensive income shall be recorded into retained earnings; When the recognition of other financial
assets is terminated, the difference between its book value and the sum of the consideration received and the
accumulative amount of fair value changes originally recorded directly into other comprehensive income shall be
recorded into the profit or loss for the current period.
4.10.1.4 Write-off
If the company and its subsidiaries no longer reasonably expect to recover all or part of the contractual cash flow of
the financial asset, the book balance of the financial asset shall be directly written down. Such write downs constitute a
termination recognition of the underlying financial asset. This typically occurs when the company and its subsidiaries
determine that the debtor has no assets or sources of income that can generate sufficient cash flow to repay the
amount to be written down. However, in accordance with the procedures for the company and its subsidiaries to
recover amounts due, the financial assets that are written down may still be affected by the execution activities.
If the financial assets that have been written down are recovered later, they shall be included in the profit or loss for
the current period as the reversal of the asset impairment loss.
4.10.2 Financial liabilities
Financial liabilities are classified into financial liabilities measured at amortized cost and financial liabilities measured at
fair value through profit or loss at the time of initial recognition.
The Company classifies financial liabilities as financial liabilities measured at amortized cost, except as follows:
(a) Financial liabilities measured at fair value through profit or loss, including financial liabilities held for trading
(including derivatives that are financial liabilities) and financial liabilities designated at fair value through profit or loss.
(b) Financial liabilities that arise when transfers of financial assets do not qualify for derecognition or when the
continuing involvement approach applies
(c) Financial guarantee contracts which are not classified as (a) or (b) and commitments to provide a loan at a
belowmarket interest rate which are not classified as (a). In a business combination not under the common control,
if the company is recognized as the purchaser of the contingent consideration and forms financial liabilities, the
financial liabilities shall be measured at fair value through profit and loss.
At the time of initial recognition, in order to provide more relevant accounting information, the company may
designate financial liabilities as financial liabilities measured at fair value through profit or loss for the current period.
Such designation satisfies one of the following conditions:
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(a) Can eliminate or significantly reduce accounting mismatches.
(b) Manage and evaluate the portfolio of financial liabilities or financial assets and portfolio of financial liabilities on
the basis of fair value in accordance with the enterprise risk management or investment strategy stated in formal
written documents, and report to key management personnel within the company on this basis. Once made, the
designation cannot be revoked.
The company's financial liabilities are mainly financial liabilities measured at amortized cost, including notes payable
and accounts payable, other payables, loans and bonds payable, etc. This kind of financial liability is initially measured
at its fair value after deducting transaction expenses, and the effective interest rate method is adopted for subsequent
measurement. Where the maturity is less than one year (including one year), it is listed as current liabilities; Where the
maturity is more than one year but matures within one year (including one year) from the date of the balance sheet, it
is shown as the non-current liabilities due within one year; The remainder is shown as non-current liabilities.
When the current obligation of a financial liability (or a part of it) has been discharged, the company derecognizes the
part of the financial liability or the discharged obligation. The difference between the book value of the derecognized
part and the consideration paid is included in the current profit and loss.
When the current obligation of a financial liability (or a part of it) has been discharged, the company derecognizes the
financial liability (or this part of the financial liability).
4.10.3 Measurement method of financial instruments' fair value
For financial instruments that active markets exist, the Company uses the quoted prices in the active markets to
determine their fair value. If there is no active market for the financial instruments, the Company uses valuation
techniques to determine their fair value. When valuing, the company adopts valuation techniques that are applicable
under the current circumstances and that there are sufficient available data and other information to support, and
selects a valuation technique that is consistent with the characteristics of the asset or liability considered by market
participants in the transaction of the relevant asset or liability. Input values and, where possible, prefer relevant
observable input values. Unobservable input values are used when the relevant observable input values are unavailable
or impractical to obtain.
4.10.4 Subsequent measurement
After initial recognition, the company shall make subsequent measurement of different types of financial assets at
amortized cost, measured at fair value through other comprehensive income, or measured at fair value through profit
and loss.
After initial recognition, the company shall make subsequent measurement of different types of financial liabilities at
amortized cost, measured at fair value through profits and losses or through other appropriate methods.
The amortized cost of a financial asset or financial liability shall be determined by the following adjustment of the
initial recognized amount of the financial asset or financial liability:
(a) Deduct the principal already repaid.
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(b) Plus or minus the cumulative amortization amount formed by amortizing the difference between the initial
recognition amount and the amount at maturity using the effective interest rate method.
(c) Deduct the accumulated loss provisions (only applicable to financial assets).
The company recognizes interest income according to the effective interest rate method. Interest income is calculated
and determined by multiplying the book balance of the financial asset by the actual interest rate, except in the
following cases:
(a) For the financial assets acquired or originated with credit impairment, the Company shall calculate and determine
the interest income according to the amortized cost of the financial asset and the effective interest rate adjusted by
credit since the initial recognition.
(b) For financial assets purchased or generated without credit impairment but which become credit impairment in
subsequent periods, the Company shall calculate and determine its interest income according to the amortized cost
and effective interest rate of the financial asset in subsequent periods. Company according to the policy of the
financial asset amortized cost using the actual interest rate method to calculate the interest income, if the financial
instruments in the subsequent period no longer exist for its credit risk has improved credit impairment, and the
improved objectively and application after the policy associated with the occurrence of an event, such as the debtor's
credit rating was raised, The company turns to the actual interest rate multiplied by the book balance of the financial
asset to determine the interest income.
4.11 Notes receivable
For the determination and accounting treatment of expected credit losses of notes receivable, please refer to Note IV,
10 -- Financial Instruments.
4.12 Accounts receivable
For the determination and accounting treatment of expected credit losses of accounts receivable, please refer to
Notes IV, 10 -- Financial Instruments.
4.13 Receivables for financing
For the determination and accounting treatment of expected credit losses of receivables for financing, please
refer to Note IV, 10 -- Financial Instruments.
4.14. Other receivables
For the determination and accounting treatment of other expected credit losses of other receivables, please refer to
Note IV, 10 -- Financial Instruments.
4.15 Inventories
4.15.1 Categories of inventories
Inventories include raw materials, work-in-progress, semi-finished products, finished products, commodities in stock,
turnover materials, low-value consumables and contract performance costs., etc. The "Contract performance cost" are
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detailed in 17, "Contract Costs".
4.15.2 Measurement of inventories upon delivery
Weighted average method is used to measure the actual costs of inventories upon delivery.
4.15.3 Provision for diminution in value of inventories
At each balance sheet date, inventories are measured at the lower of cost and net realizable value. When the cost of
inventory exceeds its net realizable value, provision for diminution in value of inventories is recognized and included
in the current profit and loss.
Net realizable value refers to the estimated selling price of inventories in daily activities minus the estimated costs to
be incurred upon completion, estimated selling expenses and related taxes.
The basis for determining the net realizable value of various inventories is as follows:
(a) Finished products, commodities in stock and materials for sale that directly used for sale are the estimated selling
price minus the estimated cost of sales and relevant taxes.
(b) Materials held for production are based on cost measurement when the finished products’ net realizable value is
higher than cost; the material price decline shows that the finished products’ net realizable value is lower than cost, net
realizable value is calculated as an estimated sales price minus the estimated cost, the cost of sales and the relevant
taxes amount.
(c) On the balance sheet date, if a part of the same inventory has contract price and the other parts do not have
contract price, the net realizable value shall be determined respectively, and the corresponding cost shall be compared
to determine the amount of withdrawal or reversal of the inventory depreciation reserve.
Goods in stock drops in price preparing shall be made on a single inventory item (or category of inventory) and
consolidated for inventories that are related to product series produced and sold in the same region, have the same or
similar end use or purpose, and are difficult to measure separately from other items.
4.15.4 Inventory count system
The Company adopts the perpetual inventory system.
4.15.5 Amortization methods of low-value consumables
Low-cost consumables are amortized by the equal-split amortization method.
4.16 Contract assets
4.16.1 Method and standard for the confirmation of contract assets
A contractual asset is a right to receive consideration that has been transferred to a customer and that right depends
on factors other than the passage of time. Contract assets and liabilities under the same contract shall be shown on a
net basis, and those under different contracts shall not be set off.
4.16.2 Determination method and accounting treatment method of expected credit loss of contract assets
The provision for impairment of contractual assets shall refer to the expected credit loss method of financial
instruments. For contract assets that do not contain significant financing components, the Company adopts a
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simplified method to measure loss provisions. For the contract assets containing significant financing elements, the
Company shall measure the loss provisions in accordance with the general method.
In the event of an impairment loss on a contract asset, the “asset impairment loss” shall be debited according to the
amount to be written down, and the contract asset impairment provision shall be credited; the reverse entry shall be
made when the accrued asset impairment provision is reversed.
4.17 Contract costs
4.17.1 Determination method of asset amount related to contract costs
The contract costs of the Company include the incremental costs to obtain a contract and the costs to fulfil a contract.
If the costs incurred in fulfilling a contract with a customer are not within the scope of another standard like
Accounting Standards for Business Enterprises No. 14 - Revenue (Revised in 2017), they will be treated as the costs to
fulfil a contract and recognized as an asset when meeting the following conditions:
(a) the costs relate directly to a contract or to an anticipated contract that the Company can specifically identify,
including direct labour, direct materials, allocations of costs that relate directly to the contract, costs that are explicitly
chargeable to the customer under the contract and other costs that are incurred only because the Company entered
into the contract;
(b) the costs generate or enhance resources of the Company that will be used in satisfying performance obligations in
the future;
(c) the costs are expected to be recovered.
The cost of obtaining the contract, that is, the incremental cost of obtaining a contract is expected to be recovered, is
recognized as an asset as contract acquisition cost. Incremental costs are costs that would not have occurred without
the acquisition of the contract. If the amortization period of the asset does not exceed one year, it may be recorded
into the profit or loss for the current period at the time of occurrence.
Expenditures incurred by the enterprise to obtain the contract, other than incremental costs expected to be recovered,
shall be recorded in the profit or loss for the current period when incurred, unless these expenditures are expressly
borne by the customer.
4.17.2 Amortization of assets related to contract costs
Assets related to contract costs are amortized on the same basis as the commodity revenue related to the asset is
recognized, and are included in the current profit and loss.
4.17.3 Impairment of assets related to contract costs
The Company recognizes an impairment loss in profit or loss to the extent that the carrying amount of an asset
recognized exceeds:
(a) the remaining amount of consideration that the Company expects to receive in exchange for the goods or services
to which the asset relates; less
(b) the costs that relate directly to providing those goods or services and that are estimated to incur.
When the impairment conditions no longer exist or have improved that make the total of (a) and (b) higher than
carrying amount of an asset, the Company will recognize in profit or loss a reversal of some or all of an impairment
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loss previously recognized. The increased carrying amount of the asset will not exceed the amount that would have
been determined (net of amortisation) if no impairment loss had been recognized previously.
4.18 Hold assets for sale
4.18.1 Non-current assets held for sale and disposal group recognition criteria
A company that recovers its carrying value primarily through sales (including exchange of non-monetary assets of
commercial substance, the same below) rather than the ongoing use of a non-current asset or disposal group will
classify it as held for sale. The specific criteria are as follows:
(a) In accordance with the practice of selling such assets or disposal groups in similar transactions, they can be sold
immediately under the current conditions.
(b) The sale is very likely to occur, that is, the company has made a resolution on a sale plan and obtained a firm
purchase commitment, and the sale is expected to be completed within one year.
Among them, the disposal group refers to a group of assets that are disposed of as a whole in a transaction through
sale or other means, and the liabilities directly related to these assets transferred in the transaction. If the asset group
or combination of asset groups to which the disposal group belongs has apportioned the goodwill obtained in the
business combination in accordance with the Accounting Standards for Business Enterprises No. 8 – Impairment of
Assets, the disposal group shall include the goodwill apportioned to the disposal group.
4.18.2 Accounting treatment
When the initial measurement or re-measurement on the balance sheet date is divided into non-current assets held for
sale and disposal group, if the book value is higher than the net amount after the fair value minus the cost of sale, the
book value is written down to the fair value The net amount after deducting the selling expenses, the written-down
amount is recognized as asset impairment loss, which is included in the current profit and loss, and at the same time,
an impairment provision for assets held for sale is made. For the disposal group, the recognized asset impairment loss
is first deducted from the book value of the goodwill in the disposal group, and then deducted proportionally to the
"Accounting Standards for Business Enterprises No. 42 - Non-current Assets Held for Sale, The book value of each
non-current asset specified in the measurement of "Disposal Group and Discontinued Operation" (hereinafter
referred to as "Hold-for-sale Standards"). If the net amount of the disposal group held for sale on the subsequent
balance sheet date increases after deducting the selling expenses, the previously written down amount shall be restored,
and the held-for-sale standard shall be applied after being classified as held-for-sale The amount of asset impairment
loss recognized for non-current assets subject to measurement requirements shall be reversed, and the reversal
amount shall be included in the current profit and loss, and the book value of each non-current asset in the disposal
group shall be subject to the measurement provisions of the held-for-sale standard except for goodwill. The
proportion increases its book value proportionally; the book value of goodwill that has been written off, and the non-
current assets that are subject to the measurement requirements of the held-for-sale standard, the asset impairment
loss recognized before being classified as held-for-sale shall not be reversed.
No depreciation or amortization is provided for the non-current assets held for sale or the non-current assets in the
disposal group, and the interest and other expenses of the liabilities in the disposal group held for sale continue to be
recognized.
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When the non-current assets or disposal groups no longer meet the classification conditions of the held-for-sale
category, they will no longer be classified as held-for-sale categories or the non-current assets will be removed from
the held-for-sale disposal group, and the lower of the following is measured:
(a) The book value before being classified as held-for-sale category, adjusted according to the depreciation,
amortization or impairment that should have been recognized under the assumption that it was not classified as held-
for-sale category;
(b) The recoverable amount.
4.19 Debt investment
For the confirmation method and accounting treatment method of expected credit loss of debt investment, please
refer to Note IV. 10 - Financial Instruments.
4.20 Other debt investments
For the confirmation method and accounting treatment method of expected credit losses of other debt investments,
please refer to Note IV. 10 - Financial Instruments.
4.21 Long-term receivables
For the confirmation method and accounting treatment method of the expected credit loss of long-term receivables,
please refer to Note IV. 10 - Financial Instruments.
4.22 Long-term equity investment
Long-term equity investment refers to the equity investment in which the company controls and has significant
influence on the investee, as well as the investment in its joint ventures.
4.22.1 Determination of initial investment cost
Long-term equity investment acquired through a business combination: For a business combination involving
enterprises under common control, the initial investment cost of a long-term equity investment is the holding share of
the acquiree's equity in the ultimate controlling party's consolidated financial statements measured at the carrying
amounts at the acquisition date. For a business combination not involving enterprises under common control, the
initial investment cost of a long-term equity investment is the cost of acquisition determined at the date of acquisition.
For a long-term equity investment acquired in cash, the initial investment cost is the amount of cash paid. For a long-
term equity investment acquired by issuing equity securities, the initial investment cost is the fair value of the equity
securities issued. For a long-term equity investment acquired by debt restructuring, the initial investment cost is
determined according to related requirements of Accounting Standards for Business Enterprises No. 12- Debt
Restructuring. For a long-term equity investment acquired by exchange of non-cash assets, the initial investment cost
is determined according to related requirements of Accounting Standards for Business Enterprises No. 7- Exchange
of Non-monetary Assets.
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4.22.2 Subsequent measurement and recognition of profit or loss
a) Where the Company is able to exercise control over an investee, the long-term equity investment is accounted for
using the cost method.
Long-term equity investments accounted for using the cost method are priced at the initial investment cost. Additional
or recovered investment should adjust the cost of long-term equity investment. Cash dividends or profits announced
to be distributed by the investee are recognized as investment income for the current period.
b) Where the Company has investment in associates and joint ventures, the long-term equity investment is accounted
for using the equity method.
When the long-term equity investment is accounted for by the equity method, if the investment cost of the long-term
equity investment is greater than the share of the fair value of the identifiable net assets of the investee at the time of
investment, the investment cost of the long-term equity investment shall not be adjusted; the investment cost of the
long-term equity investment is less than If the investee should enjoy a share of the fair value of the identifiable net
assets of the investee at the time of investment, the book value of the long-term equity investment shall be adjusted,
and the difference shall be included in the current profit and loss of the investment.
In the equity method accounting, when long-term equity investment is obtained, the investment profit and loss and
other comprehensive income are respectively recognized according to the share of net profit and loss and other
comprehensive income realized by the investee that should be enjoyed or shared, and the book value of long-term
equity investment shall be adjusted. The investing enterprise shall calculate the portion that should be distributed
according to the profits or cash dividends declared and distributed by the invested unit, and correspondingly reduce
the book value of the long-term equity investment. The investor shall adjust the book value of the long-term equity
investment and include it in the owner's equity for other changes in the owner's equity other than the net profit and
loss, other comprehensive income and profit distribution of the investee.
To confirm the net loss of the investee, the book value of the long-term equity investment and other long-term equity
that substantially constitutes the net investment in the investee shall be written down to zero, unless the company is
obliged to bear additional losses to the investee . If the invested unit realizes a net profit in the future, the investing
enterprise shall resume the recognition of the profit-sharing amount after its profit-sharing amount makes up for the
unrecognized loss-sharing amount. For other changes in the owner's equity of the investee other than net profit and
loss, other comprehensive income and profit distribution, the book value of the long-term equity investment is
adjusted and included in the owner's equity.
Long-term equity investments are accounted for under the equity method. When recognizing investment gains and
losses, the net profit of the investee is first adjusted to the fair value of the investee's identifiable assets, accounting
policies and accounting periods when the investment is obtained, and then adjustments should be made according to
the appropriate amount. The net profit or loss share of the investee that enjoys or should be shared is recognized in
the current investment profit and loss. The unrealized profit and loss of internal transactions with associates and joint
ventures shall be calculated according to the shareholding ratio and attributable to the company, and the investment
profit and loss shall be recognized on the basis of offset.
4.22.3 Basis for recognition of joint control or significant influence over an investee
Joint control refers to the common control of an arrangement in accordance with relevant agreements, and the
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relevant activities of the arrangement must be decided by the unanimous consent of the participants sharing the
control rights. When judging whether there is joint control, the first determine is whether all participants or a
combination of participants collectively control the arrangement. If all participants or a group of participants must
act in unison to decide the relevant activities of an arrangement, it is considered that all participants or a group of
parties collectively control the arrangement. Secondly, it is judged whether the decision-making of the relevant
activities of the arrangement must be unanimously agreed by the participants who collectively control the
arrangement. If there is a combination of two or more parties that can collectively control an arrangement, it does not
constitute joint control. When judging whether there is joint control, the protective rights enjoyed are not considered.
Significant influence refers to the power to participate in the decision-making of an enterprise's financial and
operating policies, but cannot control or jointly control the formulation of these policies with other parties. When
determining whether it can exert significant influence on the investee, consider the voting shares directly or indirectly
held by the investor and the impact of current executable potential voting rights held by the investor and other parties
after it is assumed to be converted into the equity of the investee, including the current convertible warrants, share
options and convertible corporate bonds issued by the investee.
4.23 Investment property
Investment real estate refers to real estate held for rent or capital appreciation, or both, including leased land use rights,
land use rights held and ready to be transferred after appreciation, and leased buildings.
Investment property of the Company use rights held for resale after appreciation. Investment property is initially
measured at acquisition cost, and is subsequently measured using the cost method or using the fair value model.
4.23.1 Using the cost model
The investment real estate is depreciated or amortized on a straight-line basis according to the following service life
and estimated net residual value rate:
Category Depreciation period (years) Residual rate Annual depreciation rate
Buildings 20-40 0%-10% 2.25%-5.00%
4.23.2 Using the fair value model
No depreciation or amortization is made for investment real estate, and its book value is adjusted based on the fair
value of the investment real estate on the balance sheet date, and the difference between the fair value and the original
book value is included in the current profit and loss.
4.24 Fixed assets
4.24.1 Recognition criteria for fixed assets
Fixed assets refer to tangible assets held for the purpose of producing commodities, services rendering, renting or
business administration with useful lives exceeding one accounting year. Fixed assets can be recognized when the
following criteria are met: a) It is probable that the economic benefits relating to the fixed assets will flow into the
Company; and b) The costs of the fixed assets can be measured reliably.
4.24.2 Classification and depreciation method of fixed assets
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The categories of fixed assets mainly include: buildings, boats & nets, machinery & equipment, transportation
equipment, furniture and office equipment. The Company adopts the straight line method for depreciation. The useful
life and residual value of an asset is assessed based on its nature and the manner of use. At the end of each financial
year, the useful lives, residual values and the depreciation method are reviewed, and adjusted if there are variances with
the original estimates. Other than fully depreciated assets which are still in use and land individually measured and
recorded, depreciation is provided for all fixed assets.
Category The method for Depreciation period Residual rate Annual depreciation rate
depreciation (years)
Buildings Straight-line depreciation 20-40 0%-10% 2.25%-5.00%
Boats & nets Straight-line depreciation 5-30 3%-5% 3.17%-19.40%
Machinery & equipment Straight-line depreciation 8-20 0%-10% 4.50%-12.50%
Transportation equipment Straight-line depreciation 5 0%-10% 18.00%-20.00%
Furniture and office equipment Straight-line depreciation 5 0%-10% 18.00%-20.00%
4.25 Construction in progress
The construction in progress of the Company includes self-construction and sub-contracting construction.
Construction in progress is transferred to fixed assets when it has reached the working condition for its intended use.
The recognition criteria of intended use include any of the followings: a) The tangible work of fixed assets (including
installation) have been entirely or substantively completed; b) Trial production or trial operation has occurred whose
outcome indicates the asset can be operated properly or manufacture quality product steadily; c) No expenditure or
insignificant expenditure occur subsequently for the constructed asset; d) The constructed asset has achieved or
substantively achieved the requirement of design or contract.
4.26 Borrowing costs
4.26.1 Recognition criteria for capitalization of borrowing costs
Borrowing costs are capitalized when they are directly attributable to the acquisition, construction or production of a
qualifying asset and included in the cost of related assets. Qualifying assets that meet conditions for capitalization are
fixed assets, investment property, inventory or other assets that take a substantial period of time for construction or
production in order to get ready for their intended use or sale. Other borrowing costs are recognized as expenses and
recorded in profit or loss for the current period when incurred. Borrowing costs include borrowing interest,
amortization of discount or premium, auxiliary expenses, and foreign exchange differences arising from foreign
currency borrowings.
4.26.2 Borrowing costs will be capitalized if they meet the following conditions at the same time
(a) The asset expenditure has occurred, and the asset expenditure includes the cash paid for the purchase, construction
or production of assets eligible for capitalization, the transfer of non-cash assets or the payment of interest-bearing
debts;
(b) The borrowing costs have been incurred;
(c) The acquisition, construction or production activities necessary to make the asset ready for its intended use or sale
have begun.
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The capitalization of borrowing costs shall cease when the purchased, constructed or produced assets that meet the
capitalization conditions are ready for intended use or sale. If an asset that meets the capitalization conditions is
abnormally interrupted in the process of acquisition, construction or production, and the interruption lasts for more
than 3 months, the capitalization of borrowing costs will be suspended. The borrowing costs incurred during the
interruption period are recognized as expenses and included in the current profit and loss until the acquisition,
construction or production of the asset resumes. The capitalization of borrowing costs continues if the interruption
is a necessary procedure for the acquired, constructed or produced assets eligible for capitalization to be ready for
their intended use or sale.
4.26.3 During the capitalization period, the capitalized amount of interest (including the amortization of discount or
premium) for each accounting period shall be determined in accordance with the following provisions:
(a) If a special loan is borrowed for the purchase, it is determined by the amount interest expense actually incurred in
the current period of the special loan, minus the interest income obtained from the unused loan funds or the
investment income obtained from temporary investment.
(b) If general borrowings are occupied for the purchase, it is determined by the weighted average of accumulated asset
expenditures of the accumulated asset expenditures in exceed the special borrowings by the capitalization rate of
occupied general borrowings. The capitalization rate is determined based on the weighted average interest rate of
general borrowings.
If there is a discount or premium on the loan, the amount of the discount or premium amortized in each accounting
period shall be determined according to the actual interest rate method, and the interest amount of each period shall
be adjusted. During the capitalization period, the capitalized amount of interest in each accounting period shall not
exceed the actual amount of interest incurred on the relevant borrowings in the current period.
4.26.4 The auxiliary expenses incurred by special borrowing, which are incurred before the purchased, built or
produced assets meeting the capitalization conditions reach the scheduled state of being available for use or sale, shall
be capitalized according to the amount incurred when incurred and included into the cost of the assets meeting the
capitalization conditions; Where an asset purchased, built or produced conforming to the capitalization conditions has
reached the pre-scheduled state of being usable or saleable, it shall be recognized as an expense according to the
amount incurred at the time of occurrence and recorded into the profit or loss for the current period. Auxiliary
expenses incurred by general borrowing shall be recognized as expenses according to the amount incurred when
incurred, and shall be recorded into the profit or loss for the current period.
4.27 Right-of-use assets
The right-of-use assets class of the company mainly includes housing and buildings.
4.27.1 Conditions for the confirmation of the right-of-use assets
The right-of-use assets refer to the right that the company, as the lessee, can use the leased assets during the lease term.
The company shall confirm the right-of-use assets on the date when the lease term begins. Right-of-use assets are
recognized when economic benefits are likely to flow in and costs can be measured reliably.
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4.27.2 Initial measurement of right-of-use assets
The right-of-use assets are initially measured at cost, which includes:
(a) The initial measurement amount of lease liabilities.
(b) The amount of lease payment paid on or before the beginning of the lease term, if there is lease incentive, will be
deducted from the amount of lease incentive already enjoyed.
(c) Initial direct expenses incurred by the lessee.
(d) The expected costs incurred by the lessee in disassembling and removing the leased asset, restoring the site where
the leased asset is located or restoring the leased asset to the state stipulated in the lease terms.
4.27.3 Subsequent measurement of the right-of-use assets
(a) Use the cost model to measure the right-of-use assets.
(b) Depreciation of the right-of-use assets. Where the ownership of the leased asset can be reasonably determined at
the end of the lease term, the company shall calculate depreciation during the remaining service life of the leased asset.
Where it is not reasonably certain that the ownership of the leased asset can be acquired at the end of the lease term,
the company shall calculate depreciation during the period during which the lease term and the remaining service life
of the leased asset are shorter. The specific depreciation methods of various right-of-use assets are as follows.
4.27.4 Depreciation methods of various right-of-use assets
All types of fixed assets are depreciated using the straight-line method according to the following service life time,
estimated net residual value rateand depreciation rate:
Category The method for depreciation Depreciation period (years) Residual rate Annual depreciation rate
Buildings Straight-line depreciation 1.5-3 - -
4.27.5 Change of lease
When the lease liabilities are re-measured according to the present value of the changed lease payments and the book
value of the right-of-use assets is adjusted accordingly, if the book value of the right-of-use assets has been reduced to
zero but the lease liabilities still need to be further reduced, the remaining amount shall be recorded into the profit or
loss for the current period.
4.27.6 Impairment test method and impairment provision method of usufruct
On the balance sheet date, if there is any indication that the right-of-use assets are impaired, the corresponding
impairment provision shall be set aside according to the difference between the carrying value and the recoverable
amount.
4.28 Intangible assets
4.28.1 Intangible assets refer to identifiable non-monetary assets without physical form owned or controlled by an
enterprise. Intangible assets are initially measured at cost, and their service life is analyzed and judged upon acquisition
of intangible assets.
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4.28.2 The company usually considers the following factors in determining the service life of intangible assets:
(a) The usual life cycle of the products produced with the asset and the available information about the service life of
similar assets;
(b) The current situation of technology and process and the estimation of the future development trend;
(c) Market demand for products or services produced by the assets;
(d) Actions expected by current or potential competitors;
(e) The expected maintenance expenditure to maintain the ability of the asset to bring economic benefits, and the
company's expected ability to pay the related expenditure;
(f) Relevant legal provisions or similar restrictions on the asset control period, such as the franchise period, lease
period, etc.;
(g) Correlation with the service life of other assets held by enterprises.
If it is impossible to foresee the period during which intangible assets bring economic benefits to the company, they
shall be regarded as intangible assets with uncertain service life.
4.28.3 For intangible assets with limited service life, they shall be amortized systematically and reasonably (or by
straight line method) during their service life. At the end of each year, the company shall review the service life and
amortization method of intangible assets with limited service life. If the service life and amortization method of
intangible assets are different from those previously estimated, the amortization period and amortization method will
be changed.
For intangible assets with limited service life, when the straight-line method is used to calculate the amortization
amount, the service life and residual rate of each intangible asset are as follows:
Category Amortization period (years) Residual rate
land use rights 42-49 0%
software 5-10 0%
4.28.4 Internally generated projects
(a) Expenditure of internal research and development project, including expenditure of research stage and expenditure
of development stage, among which: Research is an original and planned investigation for the acquisition and
understanding of new scientific or technical knowledge; Development refers to the application of research results or
other knowledge to a plan or design for the production of new or substantially improved materials, devices, products,
etc., prior to commercial production or use.
(b) Expenditure in the research phase is recognized as an expense in profit or loss for current period when it is
incurred. Expenditure in the development phase of internally generated projects is capitalized if they meet the
following conditions at the same time:
1) It is technically feasible to complete the intangible asset so that it can be used or sold;
2) The intent that the intangible asset can be completed and used or sold;
3) The way in which the intangible assets can generate economic benefits include the ability to prove that the products
produced by using the intangible assets have a market or that the intangible assets themselves exist in the market. If
the intangible assets will be used internally, its usefulness shall be proved;
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4) Have sufficient technical, financial and other resource support to complete the development of the intangible asset
and have the ability to use or sell the intangible asset;
5) Expenses attributable to the development stage of the intangible asset can be measured reliably.
4.29 Goodwill
Goodwill is the difference between the initial merger cost and the fair value share of identifiable net assets acquired in
the combination of enterprises not under common control. The company does not amortize goodwill, which is
measured by the amount of costs less accumulated impairment provisions and shown separately in the consolidated
balance sheet.
4.30 Impairment of long-term assets
For fixed assets, construction in process, intangible assets with limited service life, investment property measured by
cost model and non-current non-financial assets such as long-term equity investment in subsidiaries, cooperative
enterprise and associated enterprises, the company shall judge whether there is any sign of impairment on the balance
sheet date. If there is any indication of impairment, the recoverable amount shall be estimated and the impairment test
shall be conducted. Goodwill, intangible assets with uncertain service life and intangible assets that have not yet
reached a usable state, regardless of whether there are signs of impairment, are tested for impairment every year.
If the impairment test results show that the recoverable amount of an asset is lower than its carrying value, the
impairment provision shall be made and the impairment loss shall be recorded according to the difference. The
recoverable amount is the higher of the net value of the fair value of the asset less the disposal expense and the
present value of the estimated future cash flows of the asset. The fair value of the asset is determined according to the
sales agreement price in a fair transaction; If there is no sales agreement but there is an active market for the asset, the
fair value shall be determined according to the bid price of the buyer of the asset; Where there is no sale agreement
and an active market for the asset, the fair value of the asset is estimated based on the best available information.
Disposal costs include legal fees related to the disposal of assets, related taxes, handling fees and direct expenses
incurred to bring the assets into a saleable state. The present value of the estimated future cash flow of an asset is
determined according to the estimated future cash flow generated during the continuous use of the asset and the final
disposal by choosing an appropriate discount rate. The asset impairment reserve is calculated and recognized on the
basis of a single asset. If it is difficult to estimate the recoverable amount of a single asset, the recoverable amount of
the asset group to which the asset belongs shall be determined. Asset group is the minimum portfolio of assets that
can generate cash inflow independently.
As for the impairment test of goodwill, the book value of goodwill formed as a result of business combination shall be
allocated to the relevant asset group in a reasonable way from the purchase date; If it is difficult to allocate to the
related asset group, allocate to the related asset group portfolio. The relevant asset group or asset group combination
is the asset group or asset group combination that can benefit from the synergies of the business combination and is
not larger than the reporting segment identified by the Company.
When conducting impairment tests on related asset groups or asset group combinations containing goodwill, if there
are signs of impairment in the asset groups or asset group combinations related to goodwill, the impairment tests shall
first be conducted on the asset groups or asset group combinations that do not contain goodwill to calculate
recoverable amounts and confirm the corresponding impairment losses. And goodwill of the asset group or
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combination of group assets impairment test, comparing its book value and recoverable amount, such as the
recoverable amount is lower than the book value, the amount of impairment loss first deduction allocation to the asset
group or combination of group assets in the book value of the goodwill, again according to the asset group or
combination of group assets all assets except goodwill in the book value of the share, Deduct the carrying value of
other assets in proportion, provided that the carrying value of each asset after deduction shall not be less than the net
of the fair value of the asset minus disposal expenses (if determined) and the present value of the estimated future
cash flows of the asset (if determined), whichever is higher, and shall not be less than zero.
Once the aforesaid impairment loss of assets is recognized, the part whose value can be recovered shall not be turned
back in subsequent periods.
4.31 Long-term deferred expenses
Long-term deferred expenses refer to expenses that have been paid but their benefit period is more than one year
(excluding one year). Long-term deferred expenses will be amortized in the benefit periods. If one long-term deferred
expense can't benefit the Company in the subsequent periods, the remaining balance of the long-term deferred
expense shall be recognized as expense in profit or loss for the current period.
Long-term deferred expenses are amortized on an average basis using the straight-line method over the following
years:
Category Amortization period (years)
Renovation costs 2 to 5 years
4.32 Contract liabilities
Contractual liabilities reflect obligations to transfer goods to customers for consideration received or receivable. If the
customer has paid the contract consideration or obtained the right to unconditionally receive the contract
consideration before transferring the goods to the customer, the contract liability shall be recognized according to the
amount received or receivable at the earlier date of the actual payment made by the customer and the amount due and
payable. Contract assets and liabilities under the same contract shall be shown on a net basis, and those under
different contracts shall not be set off.
4.33 Employee benefits
Employee benefits refer to all forms of consideration or compensation given by the Company in exchange for service
rendered by employees or for the termination of employment relationship. Employee benefits include short-term
employee benefits, post-employment benefits, termination benefits and other long-term employee benefits. The
benefits provided by the company to employees’ spouses, children, dependents, survivors of deceased employees and
other beneficiaries are also considered as employee benefits.
4.33.1 Short-time employee benefits
Short-term employee benefits refer to the employee compensation that the company needs to pay in full within 12
months after the end of the annual report period for the employee to provide relevant services.
Short-term employee benefits include employee salary, bonus, allowance and subsidy, employee welfare, medical
insurance premium, industrial injury insurance premium and maternity insurance premium, housing provident fund,
labor union funds and employee education funds, short-term paid absenteeism, short-term profit sharing plan, non-
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monetary welfare and other short-term remuneration.
In the accounting period in which employees have rendered services, the Company recognizes the short-term
employee benefits as liability, and charges to profit or loss for the current period or includes in the cost of relevant
assets.
4.33.2 Post-employment benefits
Post-employment benefits refer to various forms of remuneration and welfare provided by the company for the
service provided by the employee after the employee retires or terminates the labor relationship with the company,
excluding short-term remuneration and dismissal welfare.
The post-employment benefits plan includes a defined contribution plan and a defined benefit plan. Among them, the
set contribution plan refers to the post-employment welfare plan in which the company no longer bears the further
payment obligation after the fixed expenses are deposited in the independent fund. Defined benefit plans refer to
post-employment benefit plans other than defined contribution plans.
Defined contribution plan including basic endowment insurance, unemployment insurance, etc. During the accounting
period when the employee provides services, the amount payable calculated according to the defined contribution plan
is recognized as a liability and recorded into the profit or loss for the current period or the cost of related assets.
At the end of the reporting period, the employee compensation costs arising from the defined benefit plans are
recognized as the following components:
(a) Service cost, including current service cost, past service cost and settlement gain or loss.
(b) Net interest on defined benefit plan net liabilities or net assets, including interest income on plan assets, interest
expense on defined benefit plan obligations, and interest affected by asset caps.
(c) Recalculate changes in net liabilities or net assets of defined benefit plans
Unless other accounting standards require or allow the cost of employee benefits to be included in the cost of assets,
items (a) and (b) above shall be included in the current profit and loss; Item (c) shall be included in other
comprehensive income and shall not be allowed to be transferred back to profit and loss in subsequent accounting
periods, but such amounts recognized in other comprehensive income may be transferred within the scope of equity.
Under the defined benefit plan, the earliest date on which past service costs are recognized as current expenses is:
(a) When modifying the defined benefit plan.
(b) When the company confirms relevant restructuring expenses or dismissal benefits.
Recognize a settlement gain or loss at the time of defined benefit plan settlement.
4.33.3 Termination benefits
Termination benefits refer to the compensation given to employees by the company for terminating their labor
relations with employees before the expiration of their labor contracts or for encouraging employees to accept layoffs
voluntarily.
Termination benefits provided by the Company to employees are recognized as an employee benefit liability and
charged to profit or loss for the current period at the earlier of the following dates: (a) The Company cannot
unilaterally withdraw the offer of termination benefits because of an employment termination plan or a curtailment
proposal; and (b) When the Company recognizes costs or expenses related to the restructuring that involves the
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payment of termination benefits.
4.33.4 Other long-term employee benefits
Other long-term employee benefits refers to all employee compensation except short-term compensation, post-
separation benefits and dismissal benefits, including long-term paid absenteeism, long-term disability benefits, long-
term profit sharing plans, etc.
If other long-term employee benefits provided by the Company to the employees meet the conditions for classifying
as a defined contributions plan, those benefits are accounted for in accordance with the above requirements relating to
defined contribution plan. Besides, net obligations or net assets of other long-term employee benefits are recognized
and measured in accordance with the above requirements relating to defined benefits plan. At the end of the reporting
period, the enterprise shall recognize the employee compensation costs generated by other long-term employee
benefits as the following components:
(a) Service cost
(b) Net interest on net liabilities or net assets of other long-term employee benefits
(c) Changes in net liabilities or net assets of other long-term employee benefits are re-measured.
In order to simplify the related accounting treatment, the total net amount of the above items is included in the
current profit and loss or the cost of the related assets
4.34 Lease liabilities
Recognize the present value of outstanding lease payments as lease liabilities on the commencement date of the lease
term, except for short-term leases and leases of low value assets. When calculating the present value of the lease
payment, the lease embedded interest rate is used as the discount rate. If the inherent interest rate cannot be
determined, the incremental interest rate of the lessee shall be used as the discount rate. The interest expense of the
lease liability during each period of the lease term shall be calculated according to the fixed periodic interest rate and
recorded into the profit and loss of the current period, except for those recorded into the cost of assets in accordance
with note 4 and 25. Variable lease payments that are not included in the measurement of lease liabilities shall be
included in current profit and loss when actually incurred, unless otherwise stipulated to be included in the cost of
related assets.
Lease term began, in the future when substantial changes occurred in the fixed payment, the guaranteed residual value
is expected to cope with the amount of change, is used to determine the lease payment ratio index or change, call
options, renewal options or terminate the option evaluation results or the actual exercise changes, according to the
changes of the lease the present value of the payments to measure lease liability.
4.35 Estimated liabilities
Obligations related to contingent events that meet the following conditions at the same time are recognized as
estimated liabilities：
(a) The obligation is a present obligation of the enterprise;
(b) The performance of the obligation is likely to result in the outflow of economic benefits from the enterprise;
(c) The amount of the obligation can be measured reliably.
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Estimated liabilities should be initially measured according to the best estimate of the expenditure required to perform
the relevant current obligations.
4.36 Share-based payment
4.36.1 Types of share-based payment
Share-based payment is divided into equity-settled share-based payment and cash-settled share-based payment.
Equity-settled share-based payment refers to a transaction in which an enterprise uses shares or other equity
instruments as consideration in order to obtain services. The equity instruments referred to here are the enterprise's
own equity instruments.
Cash-settled share-based payment refers to a transaction in which an enterprise undertakes an obligation to deliver
cash or other assets calculated and determined on the basis of shares or other equity instruments in order to obtain
services.
4.36.2 Determination method of fair value of equity instruments.
If there is an active market for equity instruments, it shall be determined according to the quotation in the active
market.
If there is no active market for equity instruments, use valuation techniques, including reference to prices used in
recent market transactions between parties who are familiar with the situation and willing to trade, reference to the
current fair value, discounted cash flow of other financial instruments that are substantially the same. It is determined
by methods such as cash method and option pricing model.
4.36.3 The basis for confirming the best estimate of vested equity instruments.
On each balance sheet date, according to the latest follow-up information such as the change in the number of
exercisable people and the completion of performance indicators, the number of stock options that are expected to be
exercised is revised, and the expenses to be apportioned in each period are confirmed on this basis. For an option cost
spanning multiple accounting periods, it can generally be apportioned according to the proportion of the waiting
period length of the option to the entire waiting period length in a certain accounting period.
4.36.4 Accounting treatment related to implementation, modification and termination of share-based payment plan
4.36.4.1 The equity-settled share-based payment that is exercisable immediately after the grant in exchange for
employee services shall be included in the relevant costs or expenses according to the fair value of the equity
instruments on the grant date, and the capital reserve shall be increased accordingly.
Equity-settled share-based payment that can be exercised in exchange for employee services after the completion of
the service during the waiting period or when the specified performance conditions are met, on each balance sheet
date during the waiting period, the best estimate of the number of exercisable equity instruments is Based on the fair
value of the equity instruments on the grant date, the services obtained in the current period are included in the
relevant costs or expenses and capital reserves.
On the balance sheet date, if the subsequent information indicates that the number of exercisable equity instruments is
different from the previous estimate, adjustments shall be made and adjusted to the actual number of exercisable
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equity instruments on the exercise date.
For equity-settled share-based payments, no adjustments will be made to the confirmed costs and total owner's equity
after the vesting date. On the exercise date, the share capital and share premium will be confirmed according to the
exercise situation, and the capital reserves (other capital reserves) confirmed during the waiting period will be carried
forward.
For the granted equity instruments such as options in an active market, the fair value shall be determined according to
the quotation in the active market. For granted options and other equity instruments that do not have an active market,
the option pricing model should be used to determine their fair value, and the option pricing model selected should at
least consider the following factors:
a) The exercise price of the option;
b) The validity period of the option;
c) The current price of the underlying shares;
d) Estimated stock price volatility;
e) Estimated dividends on the shares;
f) The risk-free interest rate during the life of the option.
4.36.4.2 The cash-settled share-based payment that can be exercised immediately after the grant shall be included in
the relevant costs or expenses at the fair value of the liabilities assumed by the enterprise on the grant date, and the
liabilities shall be increased accordingly.
For the cash-settled share-based payment that can only be exercised after completing the services during the waiting
period or meeting the specified performance conditions, on each balance sheet date during the waiting period, on the
basis of the best estimate of the vesting situation, the liability shall be borne by the enterprise according to the the fair
value amount of the service obtained in the current period is included in the cost or expense and the corresponding
liability.
On each balance sheet date and settlement date before the settlement of the relevant liabilities, the fair value of the
liabilities is re-measured, and the changes are included in the current profit and loss.
4.37 Revenues
Accounting policies used for revenue recognition and measurement.
4.37.1 Principles of revenue recognition
When the contract with the customer meets the following conditions at the same time, the revenue is recognized
when the customer obtains the control of the relevant commodity:
(a) The parties to the contract have approved the contract and promised to perform their respective obligations;
(b) The contract clarifies the rights and obligations of the parties to the contract in relation to the transferred goods or
the provision of labor services;
(c) The contract has clear payment terms related to the transferred goods;
(d) The contract has commercial substance, that is, the performance of the contract will change the risk, time
distribution or amount of future cash flows of the Group;
(e) The consideration entitled to the transfer of goods to the customer is likely to be recovered.
Evaluate the contract on the contract inception date, identify each individual performance obligation contained in the
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contract, and allocate the transaction price to each individual performance obligation according to the relative
proportion of the stand-alone selling price of the commodities promised by each individual performance obligation.
In determining the transaction price, the influence of factors such as variable consideration, significant financing
components in the contract, non-cash consideration, and consideration payable to customers are considered. Then
determine whether each individual performance obligation is performed within a certain period of time or at a certain
point in time, and recognize revenue separately when each individual performance obligation is performed.
If one of the following conditions is met, the performance obligation is fulfilled within a certain period of time;
otherwise, the performance obligation is fulfilled at a certain point in time:
a) The customer obtains and consumes the economic benefits brought by the company's performance when the
company performs the contract;
b) The customer can control the commodities under construction in the process of contract performance;
c) The commodities produced by the enterprise during the performance of the contract have irreplaceable uses, and
the enterprise has the right to receive payment for the part of the performance that has been completed so far during
the entire contract period.
For performance obligations performed within a certain period of time, revenue is recognized according to the
progress of performance within that period. The progress of contract performance is determined by the input method
or output method according to the nature of the transferred goods. When the progress of contract performance
cannot be reasonably determined, and the costs incurred are expected to be compensated, revenue shall be recognized
according to the amount of costs incurred until the progress of contract performance can be reasonably determined.
If one of the above conditions is not met, revenue will be recognized at the transaction price allocated to the single
performance obligation when the customer obtains control over the relevant commodity. The following indications
should be considered when judging whether a customer has acquired control of a commodity:
The enterprise has the current right to receive payment for the product, that is, the customer has the current
payment obligation for the product;
The enterprise has transferred the legal ownership of the product to the customer, that is, the customer already
owns the legal ownership of the product;
The enterprise has transferred the commodity in kind to the customer, that is, the customer has physically
possessed the commodity;
The enterprise has transferred the main risks and rewards of the ownership of the commodity to the customer,
that is, the customer has obtained the main risks and rewards of the ownership of the commodity;
The customer has accepted the product;
Other indications that the customer has obtained control of the goods.
4.37.2 Methods of revenue recognition used by the Company
(a) Revenue recognized by the Company at a point in time in the control over assets
For the foreign sale of seine fish, the Company uses sales contracts and settlement contracts as the basis, recognizes
the change of ownership based on the date of settlement contracts, and then recognizes revenue accordingly.
TMost of the Company’s fish from long-line fishing is transported back to China for sale. Sales contracts and
settlement contracts are used as the basis. The Company recognizes the change of ownership based on the date of
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settlement contracts and then recognizes revenue accordingly.
Processing of aquatic products for domestic sale by the Company: Shandong Zhonglu Oceanic (Yantai) Food Co., Ltd.
issues shipment confirmations according to faxed or email orders from domestic clients. The Company delivers goods
based on shipping notes issued by the sales department and confirmed by the warehouse department. After clients
acknowledge receipt, the Company will recognize revenue.
Processing of aquatic products for foreign sale by the Company: After receiving purchase orders from foreign clients,
the international trade department will issue export shipment confirmations and arrange the storage and transport
department to prepare the goods. The Company will revenue sales revenue based on shipping notes, packing lists,
customs declaration forms, and other export documents.
(b) Revenue recognized by the Company by performance period:
The Company’s revenue from cold storage: After receiving orders from clients and after the goods are put in storage,
the warehouse department will issue warehouse warrants to clients to confirm the specific names, specifications,
pieces, weight, and storage dates. After the warehouse warrants are signed by the warehouse manager and confirmed
by clients, the Company will recognize revenue by calculating the storage fees based on the actual number of storage
days.
4.38 Government grants
Government grants are the monetary assets and non-monetary assets received from the government without
consideration to be paid which are not including the capital injected by the government acted as an owner role.
4.38.1 Judgment basis and accounting treatment method of government grants related to assets
If the government documents explicitly state that the government grants will be used to establish or form long-term
assets, the government grants will be classified as government grants related to assets. Government grants related to
assets are recognized as deferred income. They are amortized in profit or loss for each period over the related assets'
estimated useful period on a systematic basis.
If the relevant assets are sold, transferred, scrapped or damaged before the end of their useful life, the undistributed
balance of relevant deferred income shall be transferred to the profit and loss of the current period of asset disposal.
Government grants related to the Company's routine operation will be recorded in other income based on the nature
of its economic substance and government grants not related to the Company's routine operation will be recorded in
non-operating income or expenses.
4.38.2 Judgment basis and accounting treatment method of government grants related to income
Except those grants which are classified as government grants related to assets, other government grants are classified
as government grants related to income.
If there is no explicit subsidy object in the government document, the portion related to long-term assets will be
classified as government grants related to assets and the rest portion will be classified as government grants related to
income.
If the grant related to income is a compensation for related expenses or losses to be incurred in subsequent periods,
the grant is recognized as deferred income, and amortized in profit or loss over the periods in which the related costs
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are recognized. If the grant related to income is a compensation for related expenses or losses already incurred, the
grant is recognized directly in profit or loss for the current period.
Government grants related to the Company's routine operation will be recorded in other income based on the nature
of its economic substance and government grants not related to the Company's routine operation will be recorded in
non-operating income or expenses.
If the company obtains policy-based preferential loan discounts, it shall distinguish two situations when the finance
allocates the discounted funds to the lending bank and the finance directly allocates the discounted funds to the
enterprise:
When a bank receives the discount interest fund from the financial sector and then provides a loan to the Company
with preferential interest rate, the Company accounts for the loan at the actual received amount and related interest
expenses will be calculated based on the principal and the preferential interest rate. When the Company receives the
discount interest fund from the financial sector directly, the discount interest fund will be deducted from related
borrowing cost.
4.38.3 The recognition timing for government grants
If the government subsidy is a monetary asset, the company will recognize it when it meets the conditions attached to
the government subsidy and is actually received; if the government subsidy is a non-monetary asset, the company
recognizes the government subsidy when it obtains the control right of the non-monetary asset. Among them, non-
monetary assets are measured at fair value; if the fair value cannot be obtained reliably, it is measured at the nominal
amount.
When the confirmed government grant needs to be returned, if there is a relevant deferred income balance, the book
balance of the relevant deferred income will be offset, and the excess will be included in the current profit and loss; if
there is no relevant deferred income, it will be directly included in the current profit and loss.
4.39 Deferred tax asset and deferred tax liability
Income tax is accounted for using the balance sheet liability method. Temporary differences arising from the
difference between the carrying amount of an asset or liability (asset or liability not recognized in balance sheet but the
tax base is ascertained by the current tax laws and regulation, the tax base is the temporary difference) and its tax base
are recognized as deferred tax calculating by the effective tax rate in the expected period to receive the asset or
discharge the liability.
On the basis of calculating and determining the current income tax (that is, the income tax payable in the current
period) and the deferred income tax expenses (or gains), the sum of the two is recognized as the income tax expenses
(or gains) in the income statement, but Excludes income tax effects of transactions or events that are directly included
in owners' equity.
On the balance sheet date, review the book value of deferred tax assets. If it is probable that sufficient taxable profits
will not be available in future periods to allow the benefit of the deferred tax asset to be utilized, the carrying amount
of the deferred tax asset is reduced.
4.40 Leases
A lease is a contract that transfers or acquires the right to control the use of one or more identified assets for a
specified period in exchange for or payment of consideration. At the inception date of a contract, assess whether the
contract is or contains a lease.
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4.40.1 Company as the lessee
The main categories of leased assets are office buildings and cold storage.
4.40.1.1 Initially measured
On the commencement date of the lease term, the right to use the leased asset during the lease term is recognized as a
right-of-use asset, and the present value of the unpaid lease payments is recognized as a lease liability (except for
short-term leases and leases of low-value assets). When calculating the present value of lease payments, the interest
rate implicit in the lease is used as the discount rate; if the interest rate implicit in the lease cannot be determined, the
incremental borrowing rate of the lessee is used as the discount rate.
4.40.1.2 Subsequently measured
With reference to the relevant depreciation provisions of "Accounting Standards for Business Enterprises No. 4 -
Fixed Assets", the right-of-use assets are depreciated (see Note IV. 27 "Right-of-use assets"), and it can be reasonably
determined that the ownership of the leased assets will be obtained when the lease term expires. Depreciation is
accrued over the remaining useful life of the leased asset. If it cannot be reasonably determined that the ownership of
the leased asset can be obtained at the expiration of the lease term, depreciation shall be accrued within the shorter of
the lease term and the remaining useful life of the leased asset.
For lease liabilities, the interest expense in each period of the lease term is calculated at a fixed periodic interest rate,
and is included in the current profit and loss or included in the cost of relevant assets. Variable lease payments that are
not included in the measurement of lease liabilities are included in the current profit and loss or the cost of related
assets when they are actually incurred.
4.40.1.3 After the lease commencement date, when there is a change in the actual fixed payment amount, a change in
the
estimated payable amount of the guaranteed residual value, a change in the index or ratio used to determine the lease
payment amount, a purchase option, a lease renewal option or a termination option When there is a change in the
assessment result or the actual exercise of the option, the company re-measures the lease liability according to the
present value of the changed lease payments, and adjusts the book value of the right-of-use asset accordingly. If the
book value of the right-of-use asset has been reduced to zero, but the lease liability still needs to be further reduced,
the remaining amount shall be included in the current profit and loss.
4.40.1.4 Short-term leases and leases of low-value assets
For short-term leases (leases with a term of less than 12 months on the lease commencement date) and leases of low-
value assets, a simplified approach is adopted, and the right to use assets and lease liabilities are not recognized. The
Company recognizes lease payments for operating leases in profit or loss applying a straight-line basis in each period
over the lease term. The Company capitalized the initial direct expenses incurred which are amortizes in profit or loss
over the lease term on the same recognition basis as the lease income.
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4.40.2 Company as lessor
On the lease inception date, based on the substance of the transaction, leases are classified into finance leases and
operating leases. A finance lease is a lease that substantially transfers substantially all the risks and rewards associated
with ownership of the leased asset. Operating leases refer to leases other than finance leases.
4.40.2.1 Operating lease
The Company recognizes lease payments for operating leases in profit or loss applying a straight-line basis in each
period over the lease term. Variable lease payments related to operating leases that are not included in lease receipts
are included in profit or loss for the current period when they are actually incurred.
4.40.2.2 Finance lease
On the commencement date of the lease period, the financial lease receivables are recognized and the financial lease
assets are derecognized. The financial lease receivables are initially measured with the net investment in the lease (the
sum of the unguaranteed residual value and the present value of the lease receipts not yet received at the start date of
the lease term, discounted at the interest rate embedded in the lease), and the interest income during the lease period is
calculated and recognized at a fixed periodic interest rate. The variable lease payments obtained that are not included
in the net lease investment measurement are included in the current profit and loss when they are actually incurred.
4.40.2.3 The Company’s revenue applicable to the lease standards
The Company’s revenue from vessel leases: Shandong Zhonglu Aquaculture Shipping Co., Ltd. and Habitat
International Corporation lease their vessels by time charter. The Company leases vessels equipped with operating
staff to others for certain periods. During the lease term, the ships are subject to the lessees’ dispatch. Regardless of
whether they run any business using the vessels, the Company charges lease fees to them and bears any fixed costs
incurred (such as staff salaries, maintenance costs, etc.). During the lease term, the fees are settled on a regular basis
between the Company and its clients. The Company recognizes revenue based on the number of lease days as agreed
upon with the clients.
The Company’s property and other lease revenue: After entering into a lease contract with a client, the Company
charges lease fees based on the lease area and the contractual unit price to the lessee and bears any fixed costs (such as
staff salaries, maintenance costs, etc.). During the lease term, the fees are settled on a regular basis between the
Company and the client. The Company recognizes revenue based on the lease period.
4.41 Other Important Accounting Policies and Accounting Estimations
Production safety expenditures
In November 2022, the Ministry of Finance and the Ministry of Emergency Management issued the Management
Measures for the Withdrawal and Utilization of Production Safety Expenditures in Enterprise (CZ [2022] No. 136),
and it was implemented on, and as of, the date of issue. At the same time, the Management Measures for the
Withdrawal and Utilization of Production Safety Expenditures in Enterprises (CQ [2012] No. 16) was superseded.
Basis and accounting treatment of the withdrawal and utilization of production safety expenditures:
The Company withdraws production safety expenditures for water transportation - general transportation at 1% of the
revenue for the previous year.
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4.42 Changes in Important Accounting Policies and Accounting Estimations
4.42.1 “Companies’ accounting treatment of the foreign sale of products or byproducts produced before fixed assets
reach the intended use or during research and development” in the Interpretation of ASBE No. 15.
Since January 1, 2022, the Company has started to implement the provision on “companies’ accounting treatment of
the foreign sale of products or byproducts produced before fixed assets reach the intended use or during research and
development” in the Interpretation of ASBE No. 15 issued by the Ministry of Finance. The Company has made
retroactive adjustments to the trial sales that occurred from the beginning of the earliest period of the financial
statements, during which the Company first implemented the provision, to January 1, 2022. This accounting policy
change has no impact on the Company’s financial statements.
4.42.2 “The judgement of onerous contracts” in the Interpretation of ASBE No. 15.
Since January 1, 2022, the Company has started to implement the provision on “the judgement of onerous contracts”
in the Interpretation of ASBE No. 15 issued by the Ministry of Finance. The Company implemented the provision for
all obligations that had yet to be performed as at January 1, 2022. Based on the cumulative effects, the Company
adjusted the retained earnings as at the beginning of 2022 as well as the amounts of other relevant items in the
financial statements. The information during the comparable period was not adjusted. Implementing this provision
has no impact on the Company’s financial statements as at January 1, 2022.
4.42.3 Since November 30, 2022, the Company has started to implement the provision on “the accounting treatment
of income tax effects from the dividends of financial instruments classified as equity instruments by the issuer” in the
Interpretation of ASBE No. 16 issued by the Ministry of Finance.
Since November 30, 2022, the Company has started to implement the provision on “the accounting treatment of
income tax effects from the dividends of financial instruments classified as equity instruments by the issuer” in the
Interpretation of ASBE No. 16 issued by the Ministry of Finance. For the recognized dividends payable of financial
instruments classified as equity instruments that fall within the scope of the provision and occurred between January 1,
2022 and November 30, 2022, the Company made adjustments according to the provision. For the recognized
dividends payable of financial instruments classified as equity instruments that fall within the scope of the provision
and occurred before January 1, 2022 with the relevant financial instruments yet to be derecognized as at January 1,
2022, the Company made retroactive adjustments according to the provision. This accounting policy change has no
impact on the Company’s financial statements.
4.42.4 Since November 30, 2022, the Company has started to implement the provision on “the accounting treatment
of companies’ change of cash-settled share-based payment to equity-settled share-based payment” in the
Interpretation of ASBE No. 16 issued by the Ministry of Finance.
Since November 30, 2022, the Company has started to implement the provision on “the accounting treatment of
companies’ change of cash-settled share-based payment to equity-settled share-based payment” in the Interpretation
of ASBE No. 16 issued by the Ministry of Finance. For new transactions between January 1, 2022 and November 30,
2022, the Company has made adjustments according to the provision. For transactions that occurred before January 1,
2022, the Company has made adjustments according to the provision by adjusting the retained earnings as at January 1,
2022 as well as the amounts of other relevant items in the financial statements based on the cumulative effects. The
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information during the comparable period was not adjusted. This accounting policy change has no impact on the
Company’s financial statements.
4.43 Significant accounting judgments and estimates
In the process of applying accounting policies, the company needs to make judgments, estimates and assumptions
about the book value of statement items that cannot be accurately measured due to the inherent uncertainty of
operating activities. These judgments, estimates and assumptions are made based on the past historical experience of
the company's management and taking into account other relevant factors. These judgments, estimates and
assumptions affect the reported amounts of revenue, expenses, assets and liabilities and the disclosure of contingent
liabilities at the balance sheet date. However, the actual results caused by the uncertainty of these estimates may differ
from the current estimates of the company's management, resulting in significant adjustments to the carrying amounts
of the assets or liabilities affected in the future.
The company regularly reviews the aforementioned judgments, estimates and assumptions on a going concern basis. If
the change in accounting estimates only affects the current period of the change, the amount of impact will be
recognized in the current period of the change; if it affects both the current period of the change and the future period,
the affected amount shall be confirmed in the current period of the change and the future period.
On the balance sheet date, the important areas where the company needs to make judgments, estimates and
assumptions about the amounts of financial statement items are as follows:
(1) Revenue recognition
As stated in Note IV.37, “Revenue”, the recognition of revenue involves the following significant accounting
judgments and estimates:
Estimate the recoverability of consideration to which the customer is entitled for the transfer of goods to the
customer:
Enterprises mainly rely on past experience and work to make judgments. These major judgments and changes in
estimates may have an impact on operating income, operating costs, and profit or loss in the current or subsequent
periods of the change, and may have a significant impact.
(2) Significant accounting judgments and estimates related to leases
① Identification of lease
When a company identifies whether a contract is a lease or contains a lease, it needs to assess whether there is an
identified asset and the customer controls the right-of-use the asset for a certain period of time. In assessing, it is
necessary to consider the nature of the asset, substantive substitution rights, and whether the customer is entitled to
substantially all of the economic benefits arising from the use of the asset during that period and is able to direct the
use of the asset.
② Classification of lease
When a company acts as a lessor, it classifies leases as operating leases and finance leases. When classifying,
management needs to make analysis and judgment on whether all risks and rewards related to the ownership of leased
assets have been substantially transferred to the lessee.
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③ Lease liabilities
When the company is the lessee, the lease liability is initially measured at the present value of the unpaid lease
payments on the commencement date of the lease term. In measuring the present value of lease payments, the
company estimates the discount rate to use and the lease term of lease contracts for which renewal or termination
options exist. When evaluating the lease term, the company comprehensively considers all relevant facts and
circumstances that bring economic benefits from the exercise of the option by the company, including expected
changes in facts and circumstances from the commencement date of the lease term to the date when the option is
exercised. Different judgments and estimates may affect the recognition of lease liabilities and right-of-use assets, and
will affect profit or loss in subsequent periods.
(3) Impairment of financial instruments
The company uses the expected credit loss model to evaluate the impairment of financial instruments. The application
of the expected credit loss model requires major judgments and estimates, and all reasonable and evidence-based
information, including forward-looking information, must be considered. When making such judgments and estimates,
the company infers the expected changes in the debtor's credit risk based on historical repayment data combined with
economic policies, macroeconomic indicators, industry risks and other factors.
(4) Provision for inventory depreciation
According to the inventory accounting policy, the company measures at the lower of cost and net realizable value. For
inventories whose cost is higher than net realizable value and obsolete and slow-moving inventory, provision for
inventory depreciation is made. The impairment of inventories to net realizable value is based on an assessment of the
marketability of inventories and their net realisable value. Identifying the impairment of inventories requires
management to make judgments and estimates on the basis of obtaining conclusive evidence and considering factors
such as the purpose of holding inventories and the impact of events after the balance sheet date. The difference
between the actual result and the original estimate will affect the book value of inventories and the accrual or reversal
of the provision for impairment of inventories in the period in which the estimate is changed.
(5) Provision for impairment of long-term assets
On the balance sheet date, the company judges whether there are signs of possible impairment of non-current assets
other than financial assets. For intangible assets with indefinite useful lives, in addition to the annual impairment test,
when there is an indication of impairment, the impairment test is also performed. Other non-current assets other than
financial assets shall be tested for impairment when there is an indication that their carrying amount is unrecoverable.
When the book value of the asset or asset group is higher than the recoverable amount, that is, the higher of the net
amount after the fair value minus disposal costs and the present value of the expected future cash flow, it indicates
that an impairment has occurred.
The net amount after the fair value minus disposal costs is determined by reference to the sale agreement price or
observable market price of similar assets in an arm's length transaction, minus the incremental cost that can be directly
attributable to the disposal of the asset.
When estimating the present value of future cash flows, it is necessary to make significant judgments on the output,
selling price, relevant operating costs and the discount rate used in calculating the present value of the asset (or asset
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group). When estimating the recoverable amount, the company will use all relevant information that can be obtained,
including the forecast of production, selling price and related operating costs based on reasonable and supportable
assumptions.
(6) Depreciation and amortization
After considering the residual value of investment real estate, fixed assets and intangible assets, the company accrues
depreciation and amortization on a straight-line basis within their useful lives. The company periodically reviews the
useful life to determine the amount of depreciation and amortization that will be charged to each reporting period.
The useful life is determined by the company based on past experience with similar assets combined with expected
technological updates. Depreciation and amortization expense is adjusted in future periods if there are material
changes from previous estimates.
(7) Deferred tax assets
To the extent that it is probable that there will be sufficient taxable profits to offset the losses, the company
recognizes deferred tax assets for all unused tax losses. This requires the management of the company to use a lot of
judgment to estimate the time and amount of future taxable profits, and combine tax planning strategies to determine
the amount of deferred tax assets that should be recognized.
(8) Income tax
In the normal business activities of the company, there are certain uncertainties in the final tax treatment and
calculation of some transactions. Whether some items can be listed as disbursements before tax requires the approval
of the tax authorities. If there is a difference between the final determination result of these tax matters and the
initially estimated amount, the difference will have an impact on the current income tax and deferred income tax
during the final determination period.
(9) Internal retirement benefits and supplementary retirement benefits
The company's internal retirement benefits and supplementary retirement benefits expenses and liabilities are
determined based on various assumptions. These assumptions include discount rate, growth rate of average medical
expenses, growth rate of subsidies for internal retirees and retirees and other factors. Differences between actual
results and assumptions will be recognized and charged to current year expenses as soon as they occur. Although the
management believes that reasonable assumptions have been adopted, changes in actual experience and assumptions
will still affect the company's internal retirement benefits and supplementary retirement benefits expenses and
liabilities.
(10) Other major accounting policies, accounting estimates and methods of preparing financial statements
The company shall determine the operating divisions based on the internal organizational structure, management
requirements and internal reporting system, and shall determine the reporting divisions based on the operating
divisions.
① This component can generate income and expenses in daily activities;
② The enterprise management can regularly evaluate the operating results of this component to decide to allocate
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resources to it and evaluate its performance;
③ The enterprise can obtain the financial status, operating results and cash flow of this component of accounting
information.
5. Taxes
5.1 Main taxes categories and tax rates
Tax category Tax basis Tax rate
Value added tax Output tax deducted input tax that can be credited 13%，9%、6%、5%、Tax exemption
against the output tax
Urban maintenance and construction Turnover tax payable 7%
tax
Enterprise income tax Taxable income Tax exemption、25%、8%
Income tax rate of taxpayers adopting different income tax rate
Name of tax enterprise Tax rate of income tax
Shandong Zhonglu Oceanic Fisheries Co., Ltd. Ocean fisheries part is tax exemption; housing lease part is
25%.
Shandong zhonglu Haiyan Oceanic Fisheries Co., Ltd. tax exemption
AFRICA STAR FISHERIES LIMITED Export sales part is 8%, domestic sales part is 25%.
HABITAT INTERNATIONAL CORPORATION tax exemption
LAIF FISHERIES CO.LTD 25%
ZHONG GHA FOODS COMP ANY LIMITED 25%
Shandong Zhonglu Oceanic Fisheries Transportation Co., Ltd. 25%
Shandong zhonglu ocean refrigeration co. LTD Aquatic products processing part is tax exemption;
refrigeration part is 25%.
Shandong Zhonglu Oceanic (Yantai) Food Co. Aquatic products processing part is tax exemption;
refrigeration part is 25%.
Sino-Ocean (Qingdao) Industrial Investment Development Co., Ltd. 25%
5.2 Tax Preferences and Approval Documents
5.2.1 Value-added tax preference
In accordance with Item 1 of Article 15 of the Provisional Regulations of the People’s Republic of China on Value-
Added Tax, Item 1 of Article 35 of the Implementation Rules of the Provisional Regulations of the People’s Republic
of China on Value-Added Tax, and the notice of the Ministry of Finance and the State Taxation Administration on
issuing the Notes to the Scope of Taxation for Agricultural Products through CSZ [1995] No. 52, the sales revenue of
the Company and its subsidiaries from long-range fishing falls within the scope of the aquaculture industry as defined
in the foregoing provisions, and hence, it is entitled to the value-added tax preference.
In accordance with the provisions of the Notice on the Comprehensive Roll-out of Business Tax to Value Added Tax
Transformation Pilot Program (No. 36 of 2016), the value-added tax is exempt for the direct or indirect international
freight forwarding services provided by taxpayers. Shandong Zhonglu Aquaculture Shipping Co., Ltd., a subsidiary of
the Company, is exempt from the value-added tax for the relevant sales revenue it has gained.
5.2.2 Income tax preference
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In accordance with relevant provisions of the Enterprise Income Tax Law of the People’s Republic of China (Order
No. 63 of the President of the People’s Republic of China), the Implementation Rules of the Enterprise Income Tax
Law of the People’s Republic of China (Order No. 512 of the State Council of the People’s Republic of China), the
Notice of the Ministry of Finance and the State Taxation Administration on Issuing the Primary Processing Scope of
Agricultural Products Entitled to Enterprise Income Tax Preference Policies (Trial) (CS [2008] No. 149), the
Supplementary Notice of the Ministry of Finance and the State Taxation Administration on the Relevant Primary
Processing Scope of Agricultural Products Entitled to Enterprise Income Tax Preference Policies (CS [2011] No. 26)
and the Announcement of the State Taxation Administration on Issues Concerning the Enterprise Income Tax
Preference for the Implementation of Farming, Forestry, Husbandry, and Fishery Projects (Announcement No. 48 of
2011 of the State Taxation Administration), the processing fees charged by the Company for its primary processing of
agricultural products and authorized primary processing of agricultural products can be treated as tax-exempt items
for the primary processing of agricultural products. The income gained by the Company from its long-range fishing
and primary processing of agricultural products is exempt from the enterprise income tax. Other income gained by the
company than the income from its long-range fishing and primary processing of agricultural products will be subject
to the enterprise income tax at a tax rate of 25%.
6. Notes to the consolidated financial statements
6.1 Cash at bank and on hand
Item Balance as at 31/12/2022 Balance as at 1/1/2022
Cash on hand 2,325,815.71 1,975,275.82
Cash at bank 224,938,526.60 207,674,030.17
Other monetary funds - 924,476.50
Total 227,264,342.31 210,573,782.49
Including: the total balance deposited overseas 39,621,432.70 87,451,424.69
The total amount of funds that have restrictions on use 924,476.50
due to mortgages, pledges, or freezes
Note: Funds deposited abroad shall be cash and bank deposits of foreign subsidiaries.
6.2 Accounts receivable
6.2.1 Accounts receivable by aging
Aging Balance as at 31/12/2022
Within 6 months 60,810,015.72
6 months-1 years 44,911.41
1-2 years 8,063.83
2-3 years 36,183.87
More than 3 years 6,530,131.36
Total 67,429,306.19
6.2.2 Accounts receivable by provision method for allowance credit losses
Item As at 31/12/2022
Book Balance PCT Allowance for PCT Carrying amount
credit losses
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Item As at 31/12/2022
Book Balance PCT Allowance for PCT Carrying amount
credit losses
Individually assessment subject to - - - - -
allowance for credit losses
Grouping assessment subject to 67,429,306.19 100.00% 9,595,634.36 14.23% 57,833,671.83
allowance for credit losses
Total 67,429,306.19 100.00% 9,595,634.36 14.23% 57,833,671.83
(Continued)
Item As at 1/1/2022
Book Balance PCT Allowance for PCT Carrying amount
credit losses
Individually assessment subject to - - - - -
allowance for credit losses
Grouping assessment subject to 46,647,616.30 100.00% 8,841,029.39 18.95% 37,806,586.91
allowance for credit losses
Total 46,647,616.30 100.00% 8,841,029.39 18.95% 37,806,586.91
Accounts receivable that are assessed allowance for credit losses on grouping basis
Item As at 31/12/2022
Balance Allowance for PCT
credit losses
Within 6 months 60,810,015.72 3,040,500.74 5.00%
6 months-1 years 44,911.41 4,491.17 10.00%
1-2 years 8,063.83 2,419.15 30.00%
2-3 years 36,183.87 18,091.94 50.00%
More than 3 years 6,530,131.36 6,530,131.36 100.00%
Total 67,429,306.19 9,595,634.36
(Continued)
Item As at 1/1/2022
Balance Allowance for PCT
credit losses
Within 6 months 38,283,321.00 1,914,166.05 5.00%
6 months-1 years 737,361.46 73,736.15 10.00%
1-2 years 1,043,422.97 313,026.89 30.00%
2-3 years 86,821.17 43,410.59 50.00%
More than 3 years 6,496,689.70 6,496,689.71 100.00%
Total 46,647,616.30 8,841,029.39
6.2.3 Allowance for credit losses
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Item As at 1/1/2022 Amount of change in the current period As at 31/12/2021
Provision Recovery or Write off Exchange impact
reversal
Grouping 8,841,029.39 740,557.76 - - 14,047.21 9,595,634.36
assessment
subject to
allowance for
credit losses
6.2.4 Accounts receivable due from the top five debtors of the Company are as follows:
Entity name Relationship with Balance as at Proportion in the Number of years Balance of
the company 31/12/2022 total period-end allowance for
balance of credit losses as at
accounts 31/12/2022
receivable
Seafood Supply Chain Limited unrelated party 21,569,895.30 31.99% 0-6 months 1,078,494.77
W.E.C.F. CO..LTD. unrelated party 10,809,108.09 16.03% 0-6 months 540,455.40
Shanghai Hanlong Food Sales Co., Ltd. unrelated party 3,112,625.99 4.62% 0-6 months 155,631.30
Shenzhen Shenzhiyang Trading Co., unrelated party 4,349,474.45 6.45% 0-6 months 217,473.72
Ltd.
SNB INTERNATIONAL CO., LTD. unrelated party 2,262,517.73 3.36* 0-6 months 113,125.89
Total 42,103,621.56 62.45% 2,105,181.08
6.3 Prepayments
6.3.1 Aging analysis of prepayments
Aging As at 31/12/2022 As at 1/1/2022
Balance PCT Balance PCT
Within 1 year 25,486,029.47 94.88% 18,422,346.91 98.60%
1-2 years 1,374,021.19 5.12% 31,878.50 0.17%
2-3 years - - 229,525.20 1.23%
More than 3 years - - - -
Total 26,860,050.66 100.00% 18,683,750.61 100.00%
6.3.2 The top five prepayments are as follows
Company name Relationship with Balance as at Proportion in the Prepayment time Unbilled Reason
the company 31/12/2022 total balance
China Oceanographic Fisheries unrelated party 10,940,120.63 40.73% 2021-2022 fishing certificate
Association（Note）
PARTIES TO THE NAURU unrelated party 2,653,512.60 9.88% 2022 Billing period not
AGREEMENT yet reached
Yantai Haijin Food Co., Ltd. unrelated party 2,426,340.39 9.03% 2022 Billing period not
yet reached
KIRIBATI GOVERNMENT NO.1 unrelated party 2,298,840.35 8.56% 2022 Billing period not
yet reached
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Company name Relationship with Balance as at Proportion in the Prepayment time Unbilled Reason
the company 31/12/2022 total balance
TECNICAS DEL MAR DE VIGO unrelated party 1,853,304.78 6.90% 2022 Billing period not
S.L. yet reached
Total 20,172,118.75 75.10%
Note: The payment in advance to China Oceangoing Fisheries Association is the balance of amortization of the
prepaid fishing certificate.
6.4 Other receivables
Item Balance as at 31/12/2022 Balance as at 1/1/2022
Interest receivable - -
Dividends receivable - -
Other receivables 10,452,939.40 8,391,035.64
Total 10,452,939.40 8,391,035.64
6.4.1 Other receivables
6.4.1.1 Aging of other receivables
Aging As at 31/12/2022
Within 6 months 4,597,586.29
6 months-1 years 996,717.31
1-2 years 188,086.06
2-3 years 332,267.80
More than 3 years 4,338,281.94
Total 10,452,939.40
6.4.1.2 Category of other receivables by nature
Nature Balance as at 31/12/2022 Balance as at 1/1/2022
Guarantee deposit 605,619.95 974,758.29
Current account and others 9,847,319.45 7,416,277.35
Total 10,452,939.40 8,391,035.64
6.4.1.3 The provision of allowance for credit losses
The allowance for credit losses Stage one Stage two Stage three Total
12-month ECL Lifetime ECL Lifetime ECL
(credit- (credit-impaired)
unimpaired)
Beginning balance 407,478.95 - 4,386,796.81 4,794,275.76
Revaluation of beginning balance 407,478.95 - 4,386,796.81 4,794,275.76
Provision 134,824.30 - -48,514.86 86,309.44
Reversal - - - -
Charge-off - - - -
Write-off - - - -
Exchange impact 9,807.61 - - 9,807.61
Total 552,110.86 - 4,338,281.95 4,890,392.81
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6.4.1.4 Allowance for credit losses
Item As at 1/1/2022 Amount of change in the current period As at 31/12/2022
Provision Recovery or Write off Exchange impact
reversal
Allowance for credit 4,794,275.76 86,309.44 9,807.61 4,890,392.81
losses of other
receivables
6.4.1.5 Other receivables due from the top five debtors are as follows:
Company name Nature of Balance as at Aging PCT Balance of
payment 31/12/2022 allowance for
credit losses as at
31/12/2022
Shandong State-owned Assets Management fee 1,350,000.00 Within 6 months 12.92% 67,500.00
Investment Holding Co., Ltd.
BakSeongHo employee loan 610,875.93 Within 6 months 5.84% 30,543.80
Ju IL Hyun employee loan 392,612.33 Within 1 year 3.76% 34,907.20
Yu Shian International Pty Ltd Margin 348,230.00 Within 6 months 3.33% 17,411.50
Shandong Tianzong Culture Media Margin 299,000.00 2-3 years 2.86% 149,500.00
Co., Ltd.
Total 3,000,718.26 28.71% 299,862.50
6.5 Inventories
6.5.1 Inventories by categories
Item As at 31/12/2022 As at 1/1/2022
Book balance Provision for Carrying amount Book balance Provision for Carrying amount
diminution in diminution in
value or value or
impairment impairment
provision for costs provision for costs
to fulfil contracts to fulfil contracts
Raw materials 161,964,426.73 4,070,413.82 157,894,012.91 82,776,760.71 1,219,147.19 81,557,613.52
Low-value 595,249.07 - 595,249.07 635,909.00 - 635,909.00
consumables
Commodities 315,997,100.12 54,150,416.89 261,846,683.23 195,084,739.68 5,310,785.27 189,773,954.41
Revolving materials 1,109,413.83 - 1,109,413.83 714,207.27 - 714,207.27
Costs to fulfil 3,416,444.22 - 3,416,444.22 668,796.62 - 668,796.62
contracts
Inventories in 5,304,761.22 4,041,291.15 1,263,470.07 4,714,393.22 969,516.29 3,744,876.93
transit
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Item As at 31/12/2022 As at 1/1/2022
Book balance Provision for Carrying amount Book balance Provision for Carrying amount
diminution in diminution in
value or value or
impairment impairment
provision for costs provision for costs
to fulfil contracts to fulfil contracts
Total 488,387,395.19 62,262,121.86 426,125,273.33 284,594,806.50 7,499,448.75 277,095,357.75
6.5.2 Provision for diminution in value of inventories and impairment of costs to fulfil contracts
Item As at Additions during the year Reductions during the year As at 31/12/2022
1/1/2022 Provision Other Reversal or write- Exchange impact
down
Raw materials 1,219,147.19 3,769,828.13 - 918,561.50 - 4,070,413.82
Commodities 5,310,785.27 52,150,093.67 - 3,396,590.25 -86,128.20 54,150,416.89
Inventories in 969,516.29 4,041,291.15 - 1,014,299.23 -44,782.94 4,041,291.15
transit
Total 7,499,448.75 59,961,212.95 - 5,329,450.98 -130,911.14 62,262,121.86
6.6 Other current assets
Item As at 31/12/2022 As at 1/1/2022
Input tax to be deducted 10,392,999.68 20,462,827.93
Prepaid income tax 374,592.16 104,950.69
Prepaid other taxes 23,854.27 65,813.61
Total 10,791,446.11 20,633,592.23
6.7 Long-term equity investments
Item As at Increase/decrease for the period
1/1/2022 Additional Reduce I Investment Adjustment to Changes in other
investment investment gains/losses other equity
recognized under comprehensive
the equity method income
Ji Nan Qin Zhen - 2,382,345.00 - -398,421.52 - -
Food Technology
Co., Ltd.
Total - 2,382,345.00 - -398,421.52 - -
(Continued)
Item Increase/decrease for the period As at 31/12/2022 Impairment
Cash dividends or Withdrawal of Other Period-end
profits declared impairment balance of the
for distribution provisions impairment
provision e
Ji Nan Qin Zhen Food Technology - - - 1,983,923.48 -
Co., Ltd.
Total - - - 1,983,923.48 -
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6.8 Investment property
6.8.1Investment property measured by cost
Item Buildings Total
Cost
Balance as at 1/1/2022 51,308,578.35 51,308,578.35
Additions - -
Including: Purchase - -
Inventory\fixed assets\construction in progress transfer - -
Business combination increase - -
Reductions - -
Including: Disposition - -
Other transfer out - -
Balance as at 31/12/2022 51,308,578.35 51,308,578.35
Accumulated depreciation or amortization
Balance as at 1/1/2022 20,313,133.54 20,313,133.54
Additions 1,326,076.68 1,326,076.68
Including: Depreciation or amortization 1,326,076.68 1,326,076.68
Reductions - -
Including: Disposition - -
Other transfer out - -
Balance as at 31/12/2022 21,639,210.22 21,639,210.22
Provision for impairment
Balance as at 1/1/2022 886,512.06 886,512.06
Additions - -
Including: provision - -
Reductions - -
Including: Disposition - -
Other transfer out - -
Balance as at 31/12/2022 886,512.06 886,512.06
Carrying amount
As at 31/12/2022 28,782,856.07 28,782,856.07
As at 1/1/2022 30,108,932.75 30,108,932.75
6.9 Fixed assets
Category Balance as at 31/12/2022 Balance as at 1/1/2022
Fixed assets 630,970,963.32 476,894,877.56
Disposal of fixed assets - -
Total 630,970,963.32 476,894,877.56
6.9.1 Movement of fixed assets
Item Buildings Boats & nets Machinery & Transportation Furniture and office Total
equipment vehicles equipment
Cost
Balance as at 1/1/2022 123,131,088.57 635,972,457.95 62,092,102.73 9,211,315.93 11,082,537.05 841,489,502.23
Additions 72,916,289.55 149,115,538.98 1,801,203.01 372,895.27 1,329,717.58 225,535,644.39
Including: Purchase 3,775,816.87 12,664,734.28 1,787,780.30 - 1,273,023.59 19,501,355.04
Transfer from 69,047,720.93 102,852,597.46 - - - 171,900,318.39
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Item Buildings Boats & nets Machinery & Transportation Furniture and office Total
equipment vehicles equipment
construction in process
Impact of exchange rate 92,751.75 33,598,207.24 13,422.71 372,895.27 56,693.99 34,133,970.96
fluctuations
Reductions - 43,940,068.63 384,200.00 35,775.41 345,720.33 44,705,764.37
Including: Disposals or scrap - 43,940,068.63 384,200.00 35,775.41 345,720.33 44,705,764.37
Impact of exchange rate - - - - - -
fluctuations
Balance as at 31/12/2022 196,047,378.12 741,147,928.30 63,509,105.74 9,548,435.79 12,066,534.30 1,022,319,382.25
Accumulated depreciation
Balance as at 1/1/2022 37,829,371.76 282,378,158.59 29,198,385.63 6,143,680.84 8,887,454.35 364,437,051.17
Additions 8,682,893.37 54,559,375.62 3,724,991.81 1,649,578.06 621,398.62 69,238,237.48
Including: Provision 8,667,473.70 42,603,543.71 3,718,371.29 1,343,023.70 575,942.43 56,908,354.83
Impact of exchange rate 15,419.67 11,955,831.91 6,620.52 306,554.36 45,456.19 12,329,882.65
fluctuations
Reductions - 41,787,901.93 345,780.00 23,075.09 327,686.20 42,484,443.22
Including: Disposals or scrap - 41,787,901.93 345,780.00 23,075.09 327,686.20 42,484,443.22
Impact of exchange rate - - - - - -
fluctuations
Balance as at 31/12/2022 46,512,265.13 295,149,632.28 32,577,597.44 7,770,183.81 9,181,166.77 391,190,845.43
Provision for impairment
Balance as at 1/1/2022 - 157,573.50 - - - 157,573.50
Additions - - - - - -
Reductions - - - - - -
Balance as at 31/12/2022 - 157,573.50 - - - 157,573.50
Carrying amount
As at 31/12/2022 149,535,112.99 445,840,722.52 30,931,508.30 1,778,251.98 2,885,367.53 630,970,963.32
As at 1/1/2022 85,301,716.81 353,436,725.86 32,893,717.10 3,067,635.09 2,195,082.70 476,894,877.56
① Temporarily idle fixed assets at 31/12/2022
Item Cost Accumulated Provision for Carrying amount Remark
depreciation impairment
Machinery & equipment 2,179,020.00 1,961,118.00 217,902.00 -
② Fixed assets for which the certificate of title has not been obtained
In accordance with the Opinions on Debt Compensation between the Company and Shandong Aquaculture Enterprise Group in April
2006 and Civil Ruling (2005) LZZ No. 1299 of the Lixia District People’s Court of Jinan, Shandong Aquaculture Enterprise Group shall
compensate Shandong Zhonglu Oceanic Fishery Co., Ltd. for the debt with its office building and office supplies located at 43 Heping
Road, Lixia District, Jinan. The confirmed original book value of the office building is RMB 54,223,132.40, and the book value is RMB
31,807,244.79 (with the self-used part recognized as fixed assets and the leased part as investment property). The land of the property was
classified as allocated land. Hence, the certificate of title has not been obtained.
6.10 Construction in process
Category Balance as at 31/12/2022 Balance as at 1/1/2022
Constructed in process 344,727,296.32 165,273,027.75
Construction materials - -
Total 344,727,296.32 165,273,027.75
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6.10.1 Construction in process
Item As at 31/12/2022 As at 1/1/2022
Book balance Provision for Carrying amount Book balance Provision for Carrying amount
impairment impairment
The Atlantic Seine 4,077,658.55 4,077,658.55 - 4,077,658.55 4,077,658.55 -
project
Phase I of Marine 13,957,959.89 - 13,957,959.89 - - -
Innovation
Industrial Park
Project
Lu Qing Yuan Yu - - - 7,112,575.38 - 7,112,575.38
161 Squid Fishing
Boat
Lu Qing Yuan Yu - - - 7,346,386.83 - 7,346,386.83
162 Squid Fishing
Boat
Tyrone 7 Seine 169,190,918.22 - 169,190,918.22 25,875,000.00 - 25,875,000.00
Boat
Tyrone 9 Seine 161,578,418.21 - 161,578,418.21 25,875,000.00 - 25,875,000.00
Boat
Sea Future cargo - - - 32,341,459.60 - 32,341,459.60
ship
Office building - - - 66,722,605.94 - 66,722,605.94
Total 348,804,954.87 4,077,658.55 344,727,296.32 169,350,686.30 4,077,658.55 165,273,027.75
① Movement of significant construction in progress
Project name Budget As at 1/1/2022 Additions Transfer to fixed Other reductions Percentage of
assets accumulated
input over budget
Tyrone 7 Seine 207,000,000.00 25,875,000.00 143,315,918.22 - - 69.23%
Boat
Tyrone 9 Seine 207,000,000.00 25,875,000.00 135,703,418.21 - - 65.56%
Boat
Phase I of Marine 90,000,000.00 - 13,957,959.89 - - 15.51%
Innovation
Industrial Park
Project
Sea Future cargo 38,000,000.00 32,341,459.60 6,403,892.29 38,745,351.89 - 101.96%
ship
Sea Blazer cargo 36,700,000.00 - 42,109,618.28 42,109,618.28 - 114.74%
ship
Office building 79,000,000.00 66,722,605.94 1,827,691.68 68,550,297.62 - 86.77%
Total 657,700,000.00 150,814,065.54 343,318,498.57 - -
123
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(Continued)
Project name Construction Accumulated Including:Interest Capitalization Sources of Balance as at
progress capitalized capitalized in current rate in current funds 31/12/2022
interest period period
Tyrone 7 Seine Boat 69.23% 3,008,103.70 2,803,591.20 5.49% loan、self- 169,190,918.22
raised
Tyrone 9 Seine Boat 65.56% 3,008,103.70 2,803,591.20 5.49% loan、self- 161,578,418.21
raised
Phase I of Marine 15.51% 942,666.66 942,666.66 3.50% loan、self- 13,957,959.89
Innovation Industrial Park raised
Project
Sea Future cargo ship 100.00% - - - self-raised -
Sea Blazer cargo ship 100.00% - - - self-raised -
Office building 100.00% - - - self-raised -
Total 6,958,874.06 6,549,849.06 344,727,296.32
6.11 Right-of-use asset
Item Buildings Total
Cost
Balance as at 1/1/2022 5,498,108.96 5,498,108.96
Additions 243,165.46 243,165.46
Including: New leases 128,066.88 128,066.88
Impact of exchange rate fluctuations 115,098.58 115,098.58
Reductions 3,931,334.79 3,931,334.79
Including: Exchange impact 3,931,334.79 3,931,334.79
Impact of exchange rate fluctuations - -
Balance as at 31/12/2022 1,809,939.63 1,809,939.63
Accumulated depreciation
Balance as at 1/1/2022 3,143,165.10 3,143,165.10
Additions 2,082,156.75 2,082,156.75
Including: Provision 2,017,599.39 2,017,599.39
Impact of exchange rate fluctuations 64,557.36 64,557.36
Reductions 3,825,428.19 3,825,428.19
Including: Exchange impact 3,825,428.19 3,825,428.19
Impact of exchange rate fluctuations - -
Balance as at 31/12/2022 1,399,893.66 1,399,893.66
Provision for impairment
Balance as at 1/1/2022 - -
Additions - -
Reductions - -
Balance as at 31/12/2022 - -
Carrying amount
As at 31/12/2022 410,045.97 410,045.97
As at 1/1/2022 2,354,943.86 2,354,943.86
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6.12 Intangible assets
Item Land use rights Computer software Total
Cost
Balance as at 1/1/2022 17,154,729.00 2,331,484.03 19,486,213.03
Additions 52,255,113.26 3,631.86 52,258,745.12
Including: Purchase 52,255,113.26 3,631.86 52,258,745.12
Reductions - - -
Including: Disposition - - -
Balance as at 31/12/2022 69,409,842.26 2,335,115.89 71,744,958.15
Accumulated depreciation
Balance as at 1/1/2022 5,989,252.97 1,386,562.34 7,375,815.31
Additions 1,428,972.48 312,466.32 1,741,438.80
Including: Provision 1,428,972.48 312,466.32 1,741,438.80
Reductions - - -
Including: Disposition - - -
Balance as at 31/12/2022 7,418,225.45 1,699,028.66 9,117,254.11
Provision for impairment
Balance as at 1/1/2022 - - -
Additions - - -
Including: Provision - - -
Reductions - - -
Including: Disposition - - -
Balance as at 31/12/2022 - - -
Carrying amount
As at 31/12/2022 61,991,616.81 636,087.23 62,627,704.04
As at 1/1/2022 11,165,476.03 944,921.69 12,110,397.72
6.13 Long-term deferred expenses
Item Balance as at Additions Amortization Reductions Balance as at
1/1/2022 31/12/2022
Office renovation costs 220,738.00 - 141,647.64 - 79,090.36
6.14 Deferred tax assets and deferred tax liabilities
6.14.1 Deferred tax assets before offsetting
Item As at 31/12/2022 As at 1/1/2022
Deductible Deferred tax Deductible Deferred tax
temporary assets temporary assets
differences differences
Allowance for credit losses 893,111.12 223,277.77 891,919.22 222,979.80
Deferred income 5,338,621.20 1,334,655.30 5,687,864.64 1,421,966.16
Total 6,231,732.32 1,557,933.07 6,579,783.86 1,644,945.96
6.14.2 Deferred tax liabilities before offsetting
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Item As at 31/12/2022 As at 1/1/2022
Taxable Deferred tax Taxable temporary Deferred tax
temporary liabilities differences liabilities
differences
Accelerated depreciation of fixed assets before tax 10,441,997.43 2,610,499.36 11,110,357.81 2,777,589.45
deduction
6.14.3 The items not recognised deferred tax assets
Item Balance as at 31/12/2022 Balance as at 1/1/2022
Deductible temporary differences -Allowance for credit losses 13,592,916.05 12,743,385.93
Deductible temporary differences -Provision for inventories 62,262,121.86 7,499,448.75
Deductible temporary differences -Deductible losses 7,987,245.92 16,328,215.40
Deductible temporary differences -Provision for impairment of 4,077,658.55 4,077,658.55
construction in progress
Total 87,919,942.38 40,648,708.63
Note: Deferred income tax assets are not recognized for deductible temporary differences. This is mainly because the
Company is exempt from the enterprise income tax for the part that forms deductible temporary differences. The
Company will not have the obligation to pay the income tax in the future. There are uncertainties about whether some
companies will generate sufficient taxable income.
6.15 Other non-current assets
Item Balance as at 31/12/2022 Balance as at 1/1/2022
Book Provision for Carrying amount Book balance Provision for Carrying
balance impairment impairment amount
Prepayment for 2,000,000.00 - 2,000,000.00 52,050,000.00 - 52,050,000.00
land
Prepayment for 10,851,990.71 - 10,851,990.71 91,087,267.24 - 91,087,267.24
construction in
process
Total 12,851,990.71 - 12,851,990.71 143,137,267.24 - 143,137,267.24
6.16 Short-term loans
Item Balance as at 31/12/2022 Balance as at 1/1/2022
Collateral loan 10,012,533.29 10,013,291.67
Loans on credit 10,011,611.11 -
Total 20,024,144.40 10,013,291.67
Note: The balance of the borrowings for the period includes an amount of RMB 24,144.40 in interest;
The collateral for the borrowings is as follows: Property under Certificates YFQZKZ No. 102954, No. 102984, No.
102985, No. 102986, No. 106566, and No. K02875, and its book value is RMB 29,767,038.80;
Land use rights under Certificate YGY(2002) No. 1047, and its book value is RMB 4,795,207.52.
6.17 Derivative financial liabilities
Item Balance as at Additions Reductions As at 31/12/2022
1/1/2022
126
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Foreign exchange swap - 5,208,800.00 5,208,800.00 -
Total - 5,208,800.00 5,208,800.00 -
6.18 Accounts payable
Item Balance as at 31/12/2022 Balance as at 1/1/2022
Within 1 year(including 1 year) 129,391,901.74 45,582,797.03
More than 1 year 4,880,402.31 4,538,598.01
Total 134,272,304.05 50,121,395.04
6.19 Advances from customers
Item Balance as at 31/12/2022 Balance as at 1/1/2022
Rent 1,684,961.19 -
6.20 Contract liabilities
Item Balance as at 31/12/2022 Balance as at 1/1/2022
Advance payment for goods 49,576,606.91 13,220,675.60
6.21 Employee benefits payable
6.21.1 Movement of employee benefits payable
Item As at 1/1/2022 Increase Decrease As at 31/12/2022
Short-term employee benefits 42,756,190.82 190,639,071.40 180,317,340.71 53,077,921.51
Post-employment benefits—defined contribution plans 2,616,616.32 12,038,474.14 12,629,013.16 2,026,077.30
Termination benefits 30,578.89 741,781.43 768,398.32 3,962.00
Other benefits due within one year 7,325.03 741,867.73 741,119.39 8,073.37
Total 45,410,711.06 204,161,194.70 194,455,871.58 55,116,034.18
6.21.2 Details of the short-term employee benefits
Item As at 1/1/2022 Accrued Paid As at 31/12/2022
Salaries, bonus, and allowances 41,313,575.06 175,494,966.35 165,155,078.05 51,653,463.36
Staff welfare - 4,001,580.78 3,929,412.78 72,168.00
Social insurances - 5,808,726.33 5,796,011.01 12,715.32
Including: Medical insurance - 5,321,253.21 5,310,324.25 10,928.96
Work injury insurance - 487,473.12 485,686.76 1,786.36
Maternity insurance - - - -
Housing Fund - 4,841,484.89 4,841,484.89 -
Union funds and employee education fee 1,442,615.76 492,313.05 595,353.98 1,339,574.83
Short-term paid absences - - - -
Short-term profit sharing plan - - - -
Total 42,756,190.82 190,639,071.40 180,317,340.71 53,077,921.51
6.21.3 Defined contribution plans
Item As at 1/1/2022 Accrued Paid As at 31/12/2022
Primary endowment insurance - 9,393,336.01 9,371,684.81 21,651.20
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Unemployment insurance - 429,728.31 428,781.07 947.24
Pension insurance 2,616,616.32 2,181,851.88 2,794,989.34 2,003,478.86
Social security and subsidies for retired workers - 33,557.94 33,557.94 -
Total 2,616,616.32 12,038,474.14 12,629,013.16 2,026,077.30
6.22 Taxes and surcharges payable
Category Balance as at 31/12/2022 Balance as at 1/1/2022
Value added tax 282,208.25 201,859.84
Enterprise income tax 1,541,093.07 2,149,052.53
Urban maintenance and construction tax 4,008.32 8,435.55
Estate tax 340,194.59 242,944.78
Land use tax 200,210.82 121,326.11
Individual income tax 559,650.11 329,417.86
Educational surtax 2,863.10 6,025.38
Withholding tax 1,239,249.44 1,098,761.23
Other taxes and surcharges 172,198.62 101,048.23
Total 4,341,676.32 4,258,871.51
6.23 Other payables
Item Balance as at 31/12/2022 Balance as at 1/1/2022
Interest payable - -
Dividends payable - -
Other payables 18,326,716.51 9,774,065.87
Total 18,326,716.51 9,774,065.87
6.23.1Other payables
Item Balance as at 31/12/2022 Balance as at 1/1/2022
Deposit 5,965,114.77 2,591,521.16
Staff cost 716,721.01 1,922,570.29
Safe production cost 1,667,772.64 -
Others 9,977,108.09 5,259,974.42
Total 18,326,716.51 9,774,065.87
6.24 Non-current assets due within one year
Item Balance as at 31/12/2022 Balance as at 1/1/2022
Long-term loans due within one year 6,502,041.67 3,200,000.00
Lease liabilities due within one year - 1,709,314.65
Total 6,502,041.67 4,909,314.65
6.25 Other current liabilities
Item Balance as at 31/12/2021 Balance as at 1/1/2021
Advance collection of sales tax 223,557.01 14,100.55
6.26 Long-term loans
128
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Long-term loans by category
Item Balance as at 31/12/2021 Balance as at 1/1/2021
Credit borrowings - 7,612,534.71
Guaranteed borrowings 96,093,333.33 -
Collateral borrowings 47,264,244.44 -
Collateral and guaranteed borrowings 140,200,000.00 141,780,997.66
Total 283,557,577.77 149,393,532.37
Note 1: The balance of long-term borrowings includes an amount of RMB 157,577.77 in accrued interest.
Note 2: The guarantor of the guaranteed borrowings is Shandong Zhonglu Haiyan Oceanic Fishery Co., Ltd.
Note 3: The collateral for the collateral borrowings is Units 2501-2506, Guoxin Financial Center, Building No. 1, 31 Xianxialing Road,
Laoshan District, Qingdao. The corresponding certificates of title are L2022QDSLSQBDCZ No. 0051706, No. 0051707, No. 0051708,
No. 0051709, No. 0051710, and No. 0051711, and the collateral’s book value is RMB 71,389,124.07.
Note 4: The collateral for the collateral and guaranteed borrowings is the construction in progress projects Tailong No. 7 and Tailong No.
9 purse seiners. The guarantor is Shandong Zhonglu Oceanic (Yantai) Food Co., Ltd.
6.27 Long-term employee benefits payable
Item Balance as at 31/12/2022 Balance as at 1/1/2022
Post employment benefits—defined benefits plans - 384,340.48
Other long-term benefits 616,935.20 641,882.10
Total 616,935.20 1,026,222.58
6.28 Deferred income
Item Balance as at Increase Decrease Balance as at Reason for the
1/1/2022 31/12/2022 deferred income
Government grants 13,691,209.07 1,048,150.00 1,239,043.40 13,500,315.67 Government
grants related asset
Deferred income from government grants
Item Balance as at Increase Recorded in non- recorded in other
1/1/2022 operating income income for
for current period current period
Construction special fund 7,929,748.40 1,048,150.00 - 1,023,789.36
Subsidy of boat manufacture 5,761,460.67 - - 215,254.04
Total 13,691,209.07 1,048,150.00 - 1,239,043.40
(Continued)
Item Recorded in offset Other changes Balance as at Related to
cost for current 31/12/2022 assets/income
period
Construction special fund - - 7,954,109.04 Assets
Subsidy of boat manufacture - - 5,546,206.63 Assets
Total - - 13,500,315.67
6.29 Share capital
129
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Item Balance as at Movement Balance as at
1/1/2022 Issuance of Bonus shares Capital reserve Others sub-total 31/12/2022
new share transfer in
Total shares 266,071,320.00 - - - - - 266,071,320.00
6.30 Capital reserve
Item Balance as at Increase Decrease Balance as at
1/1/2022 31/12/2022
Share premiums 189,093,492.79 - - 189,093,492.79
Other capital reserve 94,961,504.96 11,565,274.27 - 106,526,779.23
Total 284,054,997.75 11,565,274.27 - 295,620,272.02
Note: The increase in the capital reserve for the period was caused by the single capital increase of subsidiaries’
minority shareholders. For more details, refer to Note “VIII. Equity in Other Entities 2. Transactions in which the
owners’ equity in subsidiaries changes but the control over subsidiaries remains.”
6.31 Other comprehensive income
Item Balance as at Year ended 31/12/2022
1/1/2021(A) Amount before Less: OCI in prior Less: OCI in prior
tax periods transfer in periods carried
profit or loss for forward to
the current period retained earnings
OCI items which will be reclassified subsequently to profit -18,256,201.98 14,135,022.30 - -
or loss
Translation differences from translation of foreign -18,256,201.98 14,135,022.30 - -
currency financial statements
Total of OCI -18,256,201.98 14,135,022.30 - -
(Continued)
Item Year ended 31/12/2022 Balance as at
Less: income tax Amount after tax Amount after tax 31/12/2021
attributable to the attributable to (C)=(A)+(B
Company(B) minority interests
OCI items which will be reclassified subsequently to profit - 11,964,857.40 2,170,164.90 -6,291,344.58
or loss
Translation differences from translation of foreign - 11,964,857.40 2,170,164.90 -6,291,344.58
currency financial statements
Total of OCI - 11,964,857.40 2,170,164.90 -6,291,344.58
6.32 Special reserve
Item Balance as at Increase Decrease Balance as at
1/1/2022 31/12/2022
Safety costs 232,783.00 849,791.41 1,082,574.41 -
6.33 Surplus reserve
Item Balance as at Increase Decrease Balance as at
1/1/2022 31/12/2022
130
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Item Balance as at Increase Decrease Balance as at
1/1/2022 31/12/2022
Statutory surplus reserve 21,908,064.19 - - 21,908,064.19
6.34 Undistributed profit
Item Year ended Year ended Appropriation proportion
31/12/2022 31/12/2021
Retained earnings As at 1/1/2022 before adjustment 379,524,911.94 343,997,929.71 -
The total adjustment of retained earnings As at 1/1/2021 - - -
(Increase+, decrease-)
Retained earnings As at 1/1/2022 after adjustment 379,524,911.94 343,997,929.71 -
Add: Net profit attributable to the Company during the 30,239,511.38 35,526,982.23 -
year
Less: Appropriation of statutory surplus reserve - - -
Withdrawal of discretionary surplus reserve - - -
Extract general risk provision - - -
Common stock dividends payable - - -
Common stock dividends converted to share capital - - -
Retained earnings as at 31/12/2022 409,764,423.32 379,524,911.94
6.35 Operating income and operating costs
6.35.1 Operating income and operating costs
Item Year ended 31/12/2022 Year ended 31/12/2021
Income Costs Income Costs
Primary operating business 974,379,678.94 871,717,684.87 925,478,546.47 847,799,212.70
Other operating business 11,048,626.43 1,983,875.15 8,805,856.74 1,788,918.05
Total 985,428,305.37 873,701,560.02 934,284,403.21 849,588,130.75
6.35.2 Status of income from contracts
① Operating income and operating costs by recognition timing
Revenue recognition timing Sales income Agent Processing Refrigeration Other operating
income income income
At a point of time 852,832,637.33 6,188,609.91 - 6,738,036.75
Over a period of time - - 10,524,846.76 -
Total 852,832,637.33 6,188,609.91 10,524,846.76 6,738,036.75
② Income adapted to the lease standard
Item Vessels leasing House rental and others
Primary operating business 104,833,584.94 -
Other operating business - 4,310,589.68
131
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Item Vessels leasing House rental and others
Total 104,833,584.94 4,310,589.68
6.36 Taxes and surcharges
Item Year ended 31/12/2022 Year ended 31/12/2021
Urban maintenance and construction tax 26,174.82 20,427.36
Educational surcharge 11,071.73 8,730.91
Local educational surcharge 7,381.10 5,820.63
Local water conservancy construction fund - -304.98
Property tax 1,830,955.81 1,247,826.59
Land use tax 485,954.94 542,585.28
Stamp duty 323,934.60 290,074.03
Vehicle and vessel tax 22,276.69 55,766.26
Total 2,707,749.69 2,170,926.08
6.37 Selling and distribution expenses
Item Year ended 31/12/2022 Year ended 31/12/2021
Employee compensation expenditure 2,109,250.88 2,166,098.09
Business promotion fees 694,114.96 725,851.68
Travelling expenses 151,823.54 74,793.63
Depreciation charges 110,135.36 123,919.04
Depreciation of right-of-use asset 52,953.25 90,777.05
Communication expenses 20,713.67 31,359.17
Others 241,709.44 335,821.30
Total 3,380,701.10 3,548,619.96
6.38General and administrative expenses
Item Year ended 31/12/2022 Year ended 31/12/2021
Employee compensation expenditure 44,888,814.48 45,810,749.61
Depreciation and amortization charges 2,800,685.41 1,928,160.24
Depreciation of Right-of-use assets 1,964,646.14 3,057,840.23
Travelling expenses 1,229,326.50 1,235,873.02
Business entertainment 486,442.83 562,059.13
Vehicle expenses 1,044,697.40 888,939.29
Agent service fees 1,426,362.08 1,211,002.54
Office expenses 3,823,262.06 4,441,038.20
Water and electricity expenses 1,587,335.49 1,309,137.24
Others 5,122,662.68 4,033,520.85
Total 64,374,235.07 64,478,320.35
6.39 Research and development expenses
Item Year ended 31/12/2022 Year ended 31/12/2021
Employee compensation expenditure 2,286,319.66 738,409.64
Materials 246,207.46 21,089.10
132
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Item Year ended 31/12/2022 Year ended 31/12/2021
Depreciation and amortization charges 160,974.73 -
Commissioned external r&d fee 300,000.00 -
Others 400,587.40 5,957.96
Total 3,394,089.25 765,456.70
6.40 Finance expenses
Item Year ended 31/12/2022 Year ended 31/12/2021
Interest expenses 2,904,189.24 1,548,600.65
Less: interest income 672,995.57 569,224.71
Losses or gains from foreign exchange -13,875,632.54 10,378,601.88
Finance charges 989,435.15 884,531.16
Interest expenses on lease liabilities 57,441.35 102,193.34
Others 24,009.22 129,811.76
Total -10,573,553.15 12,474,514.08
6.41 Other income
Item Year ended Year ended
31/12/2022 31/12/2021
Subsidy fund for improving international performance capacity（Note 1） 45,608,125.30 38,431,963.86
Transportation insurance subsidy - 165,500.00
Financial shipbuilding subsidy fund 215,254.04 205,983.97
Financial subsidy for Special Construction funds in Blue Economic Zone（Note 2） 698,486.88 738,267.48
Special fund for cold chain logistics 282,423.60 299,236.72
Subsidy for the renovation of fishing boat equipment（Note 3） 681,939.00 983,373.00
Return of individual income tax service charge 22,803.07 24,855.48
Steady post subsidies 13,345.08 36,737.85
Work-for-training subsidy - 18,000.00
Measurement Equipment subsidy - 7,500.00
Research subsidies from the Institute of Oceanology - -
Intellectual property rights subsidy funds - 5,000.00
Collectively VAT deduction 148,410.01 -
Ammonia refrigeration modification subsidy 42,878.88 -
Manufacturing incentive 30,000.00 -
Golden Seed "talent training fund subsidy 5,000.00 -
Total 47,748,665.86 40,916,418.36
Note 1: The company received RMB 45,608,125.30 government grants for improving international performance
capacity from finance bureau;
Note 2: In 2011, the Company obtained the Blue Economic Zone special construction fund subsidy from the Finance
Bureau of Yantai Development Zone. Related subsidies and assets are included in deferred income and amortized
133
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according to the estimated remaining useful life of related assets with average method. The amount included in other
income this year is RMB698,486.88.
6.42 Investment income
Item Year ended Year ended
31/12/2022 31/12/2021
Income from long-term equity investments accounted for by the equity method -398,421.52 -
Investment gains from the disposal of trading financial assets 1,076,034.24 49,972.60
Investment gain from disposal of derivative financial liabilities 96,000.00 -
Gains on debt restructuring - -127,527.03
Total 773,612.72 -77,554.43
6.43 Credit impairment losses
Item Year ended 31/12/2022 Year ended 31/12/2021
Allowance for credit losses of accounts receivable -740,557.76 1,558,165.28
Allowance for credit losses of other receivables -86,309.44 72,899.66
Total -826,867.20 1,631,064.94
6.44 Assets impairment losses
Item Year ended 31/12/2022 Year ended 31/12/2021
Provision for diminution in value of inventory and Loss of contract -59,961,212.95 -7,167,438.13
performance costs
Note: In this period, due to the decrease of fishing quantity of longline plate and the increase of production cost, the
unit cost of fish goods increased, resulting in a large inventory price decline.
6.45 Gains from disposal of assets
Item Year ended 31/12/2022 Year ended 31/12/2021
Gains and losses on disposal of fixed assets 5,081,530.63 3,494,326.93
Note : In the current period, the subsidiary Shandong Zhonglu Aquatic Shipping Co., Ltd. disposed of the Taining
vessel with a disposal income of RMB 5,105,581.41.
6.46 Non-operating income
Item Year ended Year ended Amount to be included in non-
31/12/2022 31/12/2021 recurring gain or loss for the year
Reparations income - 884,810.25 -
Others 176,255.05 - 176,255.05
Total 176,255.05 884,810.25 176,255.05
6.47 Non-operating expenses
Item Year ended Year ended Amount to be included in non-
31/12/2022 31/12/2021 recurring gain or loss for the year
Loss of scrapped fixed assets 46,310.64 49,503.75 46,310.64
134
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Item Year ended Year ended Amount to be included in non-
31/12/2022 31/12/2021 recurring gain or loss for the year
Others 25,002.45 36,832.97 25,002.45
Total 71,313.09 86,336.72 71,313.09
6.48 Income tax expenses
6.48.1 Details of income tax expenses
Item Year ended 31/12/2022 Year ended 31/12/2021
Current income tax 2,794,728.27 2,774,329.98
Deferred income tax -80,077.20 1,425,529.24
Total 2,714,651.07 4,199,859.22
6.48.2 Reconciliation between income tax expenses and accounting profit is as follows:
Item Year ended 31/12/2022
Total profits 41,364,194.41
Income tax expenses calculated at the statutory/applicable tax rate 10,341,048.60
Effect of different tax rates applicable to subsidiaries -
Effect of the adjustments of income taxes for previous periods 49,206.95
Effect of non-taxable income -19,419,403.40
Effect of non-deductible costs, expenses, and losses -74,009.52
Effect of the deductible losses for which deferred income tax assets were not recognized during the early -2,247,761.16
stage of use
Effect of deductible temporary differences or deductible losses for which deferred income tax assets were 14,065,569.60
not recognized for the period
Income tax expenses 2,714,651.07
6.49 Other comprehensive income
As note 31.
6.50 Notes to statement of cash flows
6.50.1 Cash received relating to other operating activities
Item Year ended Year ended
31/12/2022 31/12/2021
Finance expenses- interest income 672,995.57 569,224.71
Government grants and others 47,472,059.73 40,153,114.89
Credit deposit 924,476.50 -
Current account and other 8,177,260.88 900,552.70
Total 57,246,792.68 41,622,892.30
6.50.2 Cash paid related to other operating activities
Item Year ended Year ended
31/12/2022 31/12/2021
Cash payment to selling expenses 1,108,361.61 1,053,784.11
135
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Cash payment to administrative expense 13,907,155.67 13,550,391.30
Cash payment to research and development expenses 946,794.86 27,047.06
Security deposit - 884,531.16
Current account and other 1,254,472.12 5,947,525.52
Total 17,216,784.26 21,463,279.15
6.50.3 Cash received related to other investing activities
Item Year ended Year ended
31/12/2022 31/12/2021
Lease payment 5,000,000.00 -
6.50.4 Cash paid related to other financing activities
Item Year ended Year ended
31/12/2022 31/12/2021
Lease payment 1,780,432.76 3,627,734.35
6.50.5 Supplement to statement of cash flows
Item Year ended Year ended
31/12/2022 31/12/2021
1.Net profit adjusted to cash flows from operating activities
Net profit 38,649,543.34 36,653,867.27
Add:losses Provision for asset impairment 54,631,761.97 3,827,620.99
Credit impairment 826,867.20 -1,631,064.94
Depreciation of fixed assets, depletion of oil and gas assets, depreciation of productive 58,223,115.23 52,151,188.06
biological assets and depreciation of investment property
Depreciation of right-of-use asset 2,017,599.39 3148617.28
Amortization of intangible assets 696,336.48 745,729.62
Amortization of long-term deferred expenses 121,875.00 177,916.67
Losses on disposal of fixed assets, intangible assets and other long-term assets ("-" for gains) -5,081,530.63 -3,494,326.93
Losses on write-down of fixed assets ("-" for gains） 46,310.64 49,503.75
Losses from changes in fair value ("-" for gains) - -
Financial expenses ("-" for income) -634,206.25 4,397,806.07
Investments losses ("-" for gains) -773,612.72 77,554.43
Decreases in the deferred tax assets ("-" for increases) 87,012.89 99,691.02
Increases in the deferred tax liabilities ("-" for decreases) -167,090.09 1,325,838.22
Decreases in inventories ("-" for increases) -207,166,597.03 57,995,811.51
Decreases in operating receivables ("-" for increases) -16,135,680.34 20,661,022.03
Increases in operating payables ("-" for decreases) 87,390,968.02 -6,290,950.23
Others - -
Net cash flows from operating activities 12,732,673.10 169,895,824.82
2. Significant investing and financing activities not involving cash inflow and outflow
Conversion of debt into capital - -
Convertible corporate bonds maturing within one year - -
Fixed assets acquired under financial lease - -
3. Net change in cash and cash equivalents
136
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Item Year ended Year ended
31/12/2022 31/12/2021
Cash as at 31/12/2022 227,264,342.31 209,649,305.99
Less: cash As at 1/1/2022 209,649,305.99 255,735,611.93
Add: cash equivalents as at 31/12/2022 - -
Less: cash equivalents as at 31/12/2021 - -
Net increase in cash and cash equivalents 17,615,036.32 -46,086,305.94
6.50.6 Cash and cash equivalents
Item Balance as at Balance as at
31/12/2022 1/1/2022
1. Cash 227,264,342.31 209,649,305.99
Including: cash on hand 2,325,815.71 1,975,275.82
Unrestricted bank deposits 224,938,526.60 207,674,030.17
2.Cash equivalents - -
Bond investments due within 3 months - -
3. Cash and cash equivalents As at 1/1/2022 227,264,342.31 209,649,305.99
6.51 Ownership or using rights of assets subject to restriction
Item Carrying amount Restriction reason
as at 31/12/2022
Fixed assets 101,156,162.87 Collateral loan
Construction in process 330,769,336.43 Collateral loan
Intangible assets 4,795,207.52 Collateral loan
Total 436,720,706.82
6.52 Monetary items denominated in foreign currency
6.52.1 Monetary items denominated in foreign currency
Item Balance in foreign Exchange rate Balance translated into RMB as at
currency as at 31/12/2022
31/12/2022
Cash at hand and in banks
Including: USD 8,463,795.36 6.9646 58,946,949.16
Euro 88,313.68 7.4229 655,543.62
GHS 3,005,425.61 0.8376 2,517,344.49
XAF 20,266,954.87 0.0113 229,016.59
JPY 250,602,490.84 0.0524 13,131,570.52
Accounts receivable
Including: USD 5,929,159.78 6.9646 41,294,226.19
GHS 10,465.77 0.8376 8,766.13
JPY 31,417,142.71 0.0524 1,644,938.76
Other receivables
Including: USD 258,357.31 6.9646 1,799,355.31
GHS 397,520.93 0.8376 332,963.53
Accounts payable
Including: USD 3,448,092.64 6.9646 24,014,586.00
137
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Euro 234.43 7.4229 1,740.15
GHS 101,857.69 0.8376 85,316.00
JPY 200.000.00 0.0524 10,471.60
XAF 97,845,794.69 0.0113 1,105,657.48
Other payables
Including: USD 301,491.64 6.9646 2,099,768.69
GHS 824,997.34 0.8376 691,017.77
6.52.2 Reporting currencies of significant foreign operating entities
Significant foreign operating entity Overseas location of Reporting Basis for
primary operation currency determination
HABITAT INTERNATIONAL CORPORATION The Republic of USD Business
Panama environment
LAIF FISHERIES COMPANY LIMITED The Republic of Ghana USD Business
environment
YAW ADDO FISHERIES COMPANY LIMITED The Republic of Ghana USD Business
environment
ZHONG GHA FOODS COMPANY LIMITED The Republic of Ghana USD Business
environment
AFRICA STAR FISHERIES LIMITED The Republic of Ghana USD Business
environment
6.53 Government subsidies
Item amount Report project recorded in other
income for
current period
Subsidy fund for improving international performance capacity 45,608,125.30 Other income 45,608,125.30
Financial shipbuilding subsidy fund 6,405,900.00 Deferred income 215,254.04
Financial subsidy for Special Construction funds in Blue Economic Zone 13,600,000.00 Deferred income 698,486.88
Special fund for cold chain logistics 2,000,000.00 Deferred income 282,423.60
Ammonia refrigeration modification subsidy 1,048,150.00 Deferred income 42,878.88
Subsidy for the renovation of fishing boat equipment 681,939.00 Other income 681,939.00
Total 69,344,114.30 47,529,107.70
7. Changes in consolidation scope
There are no consolidation scope changes in the current period.
8. Interest in other entities
8.1 Interest in subsidiaries
8.1.1 Constitution of the Company
Subsidiary name Registration place Principal place of Business nature Shareholding Acquisition
business Direct Indirect method
Shandong Zhonglu Shandong Shandong Qingdao Refrigeration 100.00% Investment
Oceanic Fisheries Qingdao transportation
Transportation Co., Ltd.
138
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Subsidiary name Registration place Principal place of Business nature Shareholding Acquisition
business Direct Indirect method
Shandong Zhonglu Shandong Yantai Shandong Yantai Food processing 53.79% 18.67% Investment
Oceanic (Yantai) Food
Co., Ltd.
Shandong Zhonglu Shandong Shandong Qingdao Oceanic fishing 59.05% Investment
Haiyan Oceanic Fisheries Qingdao
Co., Ltd.
Zhonglu Oceanic Shandong Shandong Qingdao Refrigeration 51.00% 49.00% Investment
(Qingdao) Industrial Qingdao transportation
Investment Development
Co., Ltd.
HABITAT The Republic of The Republic of Refrigeration 100.00% - Investment
INTERNATIONAL Panama Panama transportation
CORPORATION
LAIF FISHERIES The Republic of The Republic of Oceanic fishing - Shandong Zhonglu Haiyan Investment
COMPANY LIMITED Ghana Ghana Oceanic Fisheries Co., Ltd
holds 100% shares
AFRICA STAR The Republic of The Republic of Oceanic fishing - Shandong Zhonglu Haiyan Investment
FISHERIES LIMITED Ghana Ghana Oceanic Fisheries Co., Ltd
holds 100% shares
ZHONG GHA FOODS The Republic of The Republic of Oceanic fishing - Shandong Zhonglu Haiyan Investment
COMPANY LIMITED Ghana Ghana Oceanic Fisheries Co., Ltd
holds 100% shares
Shandong zhonglu ocean Shandong Yantai Shandong Yantai Food processing - Shandong Zhonglu Oceanic Investment
refrigeration co. LTD (Yantai) Food Co., Ltd. holds
100% shares
YAW ADDO The Republic of The Republic of Oceanic fishing - - Operating lease
FISHERIES Ghana Ghana
COMPANY LIMITED
8.1.2 Important non-wholly-owned subsidiaries
Name of subsidiary Proportion of rofits/losses Dividends paid to Balance of the
shares held by attributable to minority minority interests
minority minority shareholders for as at 31/12/2022
shareholders shareholders for the period
the period
Shandong Zhonglu Haiyan Oceanic Fisheries Co., Ltd. 40.95% 3,301,403.46 - 167,459,674.75
Shandong Zhonglu Oceanic (Yantai) Food Co., Ltd. 27.54% 5,108,628.50 - 93,543,354.23
Total 8,410,031.96 - 261,003,028.98
8.1.3 Main financial information of significant non-wholly owned subsidiary
Subsidiary name As at 31/12/2022
Current assets Non-current Total assets Current liabilities Non-current Total liabilities
assets liabilities
Shandong Zhonglu 284,746,514.95 228,527,101.55 513,273,616.50 98,801,188.48 5,546,206.63 104,347,395.11
Haiyan Oceanic
Fisheries Co., Ltd.
Shandong Zhonglu 349,063,247.82 126,955,026.31 476,018,274.13 125,790,070.11 10,564,608.40 136,354,678.51
Oceanic (Yantai)
139
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Food Co., Ltd.
Total 633,809,762.77 355,482,127.86 989,291,890.63 224,591,258.59 16,110,815.03 240,702,073.62
(Continued)
Subsidiary name As at 1/1/2022
Current assets Non-current Total assets Current liabilities Non-current Total liabilities
assets liabilities
Shandong Zhonglu 230,078,254.48 228,556,206.12 458,634,460.60 57,308,361.86 5,761,460.67 63,069,822.53
Haiyan Oceanic
Fisheries Co., Ltd.
Shandong Zhonglu 174,444,432.90 131,698,553.85 306,142,986.75 74,321,902.61 10,707,337.85 85,029,240.46
Oceanic (Yantai)
Food Co., Ltd
Total 404,522,687.38 360,254,759.97 764,777,447.35 131,630,264.47 16,468,798.52 148,099,062.99
(Continued)
Subsidiary name Year ended 31/12/2022
Operating income Net profit Total Cash flows from
comprehensive operating activities
income
Shandong Zhonglu Haiyan Oceanic Fisheries Co., Ltd. 274,187,930.05 8,062,035.30 13,361,583.32 -34,928,144.20
Shandong Zhonglu Oceanic (Yantai) Food Co., Ltd 530,394,523.46 18,549,849.33 18,549,849.33 2,792,648.54
Total 804,582,453.51 26,611,884.63 31,911,432.65 -32,135,495.66
(Continued)
Subsidiary name Year ended 31/12/2021
Operating income Net profit Total Cash flows from
comprehensive operating activities
income
Shandong Zhonglu Haiyan Oceanic Fisheries Co., Ltd. 249,754,578.58 2,751,856.01 -700,571.69 72,260,920.89
Shandong Zhonglu Oceanic (Yantai) Food Co., Ltd 619,092,271.58 22,025,927.84 22,025,927.84 63,560,065.21
Total 868,846,850.16 24,777,783.85 21,325,356.15 135,820,986.10
8.2 Transactions in which the owners’ equity in subsidiaries changes but the control over subsidiaries remains
Explanation of changes in the owners’ equity in subsidiaries
During the period, Zhong Tai Xin Cheng Asset Management Co., Ltd. injected an amount of RMB 100,000,000.00 to
the capital of Shandong Zhonglu Oceanic (Yantai) Food Co., Ltd. After the capital increase, the shares held directly
and indirectly by the Company account for 72.46%, and the shares held by Zhong Tai Xin Cheng Asset Management
Co., Ltd. account for 27.54%.
8.2.1 Effect of the transaction on the minority interest and on the owners’ equity attributable to the parent company
Item Shandong Zhonglu Oceanic
(Yantai) Food Co., Ltd
140
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Amount of capital increase by minority shareholders Total
Of which: cash 100,000,000.00
Fair value of non-cash assets
Total 100,000,000.00
Minus: Minority interest calculated in the shareholding proportion after capital increase by minority 88,434,725.73
shareholders
Difference 11,565,274.27
Of which: adjustment to the capital reserve 11,565,274.27
8.3 Interests in joint venture arrangements or joint ventures
Important associates
Item Principal Registration Nature of Shareholding ratio Right to vote Accounting treatment
place of place business Direct Indirect PCT method
business
Ji Nan Qin Zhen Food Shandong Shandong Food 10.87% 10.87% Equity method of
Technology Co., Ltd. jinan jinan processing accounting
Holding less than 20% of the voting rights but having significant influence on the basis of:
Shandong Zhonglu Oceanic (Yantai) Food Co., Ltd a subsidiary of the company, holds 15.00% of Ji Nan Qin Zhen
Food Technology Co., Ltd. and appoints directors to it, which has a significant influence on its production and
operation.
9. Related risks of financial instruments
The financial assets of the Company include notes receivable, account receivable and other receivables, the financial
liabilities include notes payable, account payable, other payables and long-term loan, for details see Notes Ⅵ.
Company is faced with Various risks in operating activities, including credit risk, liquidity risk and market risk, board
of directors establish and supervise company’s ERM architecture, establish and supervise company’s risk management
policy with full authority.
The goals of Company engaged in the risk management is to achieve the proper balance between the risks and
benefits, reduced the negative impact to the Company operating performance risk to a minimum, maximized the
profits of shareholders and other equity investors.
9.1 Credit risk
Credit risk what may lead to the financial losses was the other party of the contract failed to fulfill the obligations and
causes loss of the Company‘s financial assets. Credit risk is mainly from the customers’ receivables. The book value of
account receivable, note receivable and other account receivable are the biggest credit risk of the company’s financial
assets.
9.2 Liquidity Risk
Liquidity risk is the risk that the company is in short of capital when fulfilling its obligations related to financial
liabilities. In the capital normal and stressful situation, the company ensures that there is sufficient liquidity to fulfill
the due debt, and consult with the financial institutions to maintain a certain level of reserve credit line to reduce
liquidity risk.
141
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9.3 Market risk
9.3.1 Foreign exchange risk
Foreign exchange risk is referred to the risk incurred due to loss of changes in exchange rate. The company's foreign
exchange risk is mainly derived from the dollar denominated financial assets. The amount of foreign currency
denominated financial assets to be converted into RMB is as note 6.53 the foreign currency monetary items stated.
9.3.2 Interest Rate Risk
Interest rate risk refers to the risk that the fair value or future cash flows of financial instruments will fluctuate due to
changes in market interest rates. The Company's exposure to interest rate risk mainly arises from long-term bank
borrowings. The Company's borrowings are at floating interest rates and are subject to the risk of changes in the RMB
benchmark interest rate.
10. Related parties and transactions
10.1 The parent company of the Company
Name of parent Registration Type of business Registered (%)Shareholding ratio (%)Voting rights
company place capital of the Company proportion % of the
Company
Shandong State- Shandong Investment and management, asset 4.5 billion 47.25% 47.25%
owned assets Jinan management and capital operation,
investment Co. Ltd entrustment management,
investment consulting
Note: State-owned Assets Supervision and Administration Commission of Shandong Provincial People's Government
is the ultimate controller of the Company.
10.2 Subsidiaries of the Company
Details of subsidiaries refer to Note 8 Interest in other entities.
10.3 Other related parties
Entity name Relationship
Inspur Genersoft Software lnc. A company that has a transaction in the current period controlled by the same
parent company
Dezhou Bank Co.,LTD A company that has a transaction in the current period controlled by the same
parent company
ZhongTai XinCheng Asset Management Co., Ltd A company that has a transaction in the current period controlled by the same
parent company
Ji Nan Qin Zhen Food Technology Co., Ltd. Consortium
10.4 Transactions with related parties
10.4.1 List of goods sold/services provided
142
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Item Condition of Year ended Year ended
underlying assets 31/12/2022 31/12/2022
Rental the rent Rental the rent
Ji Nan Qin Zhen Food Technology Co., Ltd. Tuna 212,715.94 -
Shandong State-owned Assets Investment Holding Co., Ltd. Management fee 1,273,584.91 -
10.4.2 Leases with related parties
The company, as the lessee:
Lesser Condition of Rent paid Assume the lease liability Increased use-right assets
underlying interest payments
assets Year ended Year ended Year ended Year ended Year ended Year ended
31/12/2022 31/12/2021 31/12/2022 31/12/2021 31/12/2022 31/12/2021
ZhongTai XinCheng Office 195,000.00 195,000.00 8,128.89 - - 190,935.56
Asset Management Co., building
Ltd
10.4.3 Remuneration of key management
Item Year ended 31/12/2022 Year ended 31/12/2021
Remuneration of key management 2,854,957.00 2,225,053.60
10.4.4 Other related transactions
Interest revenue
Item Related party Year ended 31/12/2022 Year ended 31/12/2021
Interest revenue Dezhou Bank Co.,LTD 2,542.64 2,274.66
10.5 Receivables due from and payables due to related parties
10.5.1 Accounts receivable
Item Related party As aAs at 31/12/2022 As aAs at 1/1/2022
Balance Allowance for Balance Allowance for
credit losses credit losses
Payment for sales Ji Nan Qin Zhen Food Technology Co., 75,268.40 3,763.42 16,511.40 825.57
Ltd.
10.5.2 Other receivables
Item Related party As aAs at 31/12/2022 As aAs at 1/1/2022
Balance Allowance for Balance Allowance for
credit losses credit losses
Payment for sales Shandong State-owned Assets Investment 1,350,000.00 67,500.00 - -
Holding Co., Ltd.
Deposit ZhongTai XinCheng Asset Management 20,000.00 20,000.00 20,000.00 20,000.00
Co., Ltd
10.5.3 Other non-current assets
Item Related party Balance as at 31/12/2021 Balance as at 1/1/2021
143
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Item Related party Balance as at 31/12/2021 Balance as at 1/1/2021
Book balance Allowance for Book balance Allowance for
credit losses credit losses
Prepayments Inspur Genersoft Software lnc. - - 394,857.06 -
11. Commitments and contingencies
11.1 Commitments
None.
11.2 Contingencies
None.
12. Post balance sheet events
12.1 Significant non-adjustment events after balance sheet date
None.
12.2 Distribution of profit
None.
13. Other significant events
13.1 Pension scheme
According to relative laws, regulations and policies, the pension system of the company has been established to pay
supplementary endowment insurance for employees (namely enterprise annuity) on the basis of attending primary
endowment insurance lawfully. The company has set the operating efficiency coefficient in accordance with the actual
operating conditions every year, and calculated the total amount paid by the enterprise through it. In the enterprise
pension, the borne expenses of the company have been disclosed in the case of employee pay payable and the
condition of the established escrow plan, and the individual cost has been paid by the company from their salary. This
year, the enterprise pension has been increased RMB 2.18 million, relevant information shall be referred to
"Attachment 6 (21) employee pay payable".
13.2 Segment reporting
13.2.1 Determination basis of segment reporting and related accounting policy
The company’s mainly business are oceanic fishing, aquatic products processing, vessels leasing and others. The
company disclosure the branches reports by the character and plate of its main bussiness.
13.2.2 Financial information of segment reporting
Item Oceanic fishing Vessels leasing Aquatic products Others Elimination Total
processing and between branches
refrigeration
Operating income 397,948,714.28 104,833,584.94 525,258,170.43 293,842.01 -53,954,632.72 974,379,678.94
Operating cost 346,028,689.47 89,172,040.28 490,294,383.82 201,053.31 -53,978,482.01 871,717,684.87
Credit impairment 588,450.77 1,647.98 -1,407,749.72 -9,216.23 - -826,867.20
144
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Item Oceanic fishing Vessels leasing Aquatic products Others Elimination Total
processing and between branches
refrigeration
losses
Impairment of -51,347,991.04 - -8,613,116.24 -105.67 - -59,961,212.95
assets
Depreciation and 38,485,369.91 11,557,740.61 7,763,740.43 3,252,075.15 - 61,058,926.10
amortization
Profit before tax 26,851,443.99 6,601,586.21 20,510,769.08 -12,599,604.87 - 41,364,194.41
Income tax - 831,358.16 1,883,292.91 - - 2,714,651.07
expenses
Net profit 26,851,443.99 18,246,373.65 18,627,476.17 -25,075,750.47 - 38,649,543.34
Total assets 873,299,218.75 303,330,761.54 466,728,750.82 577,110,123.00 -382,039,719.94 1,838,429,134.17
Total liabilities 209,010,643.00 103,370,036.03 137,080,841.90 450,867,595.61 -309,975,746.30 590,353,370.24
14. Notes to the financial statements of the Company
14.1 Accounts receivable
14.1.1 Aging analysis by aging
Aging Balance as at 31/12/2022
Within 6 months 438,889.50
6 months-1 years -
1-2 years -
2-3 years -
More than 3 years 5,689,018.01
Total 6,127,907.51
14.1.2 Accounts receivable by provision method for allowance credit losses
Item As at 31/12/2022
Balance PCT Allowance for credit PCT Carrying amount
losses
Individually assessment subject to - - - - -
allowance for credit losses
Grouping assessment subject to 6,127,907.51 100.00% 5,710,962.49 93.20% 416,945.02
allowance for credit losses
Group 1: Non-affiliated party 6,127,907.51 100.00% 5,710,962.49 93.20% 416,945.02
customer portfolio
Group 2: Combination of related - - - - -
parties
Total 6,127,907.51 100.00% 5,710,962.49 93.20% 416,945.02
(Continued)
Item As at 1/1/2022
Balance PCT Allowance for credit PCT Carrying amount
losses
Individually assessment subject to - - - - -
allowance for credit losses
145
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Item As at 1/1/2022
Balance PCT Allowance for credit PCT Carrying amount
losses
Grouping assessment subject to 14,879,608.37 100.00% 6,148,547.53 41.32% 8,731,060.84
allowance for credit losses
Group 1: Non-affiliated party 14,879,608.37 100.00% 6,148,547.53 41.32% 8,731,060.84
customer portfolio
Group 2: Combination of related - - - - -
parties
Total 14,879,608.37 100.00% 6,148,547.53 41.32% 8,731,060.84
Group 1: Accounts receivable due from non-affiliated party customer portfolio:
Aging As at 31/12/2022
Balance Allowance for PCT
credit losses
Within 6 months 438,889.50 21,944.48 5.00%
6 months-1 years - - -
1-2 years - - -
2-3 years - - -
More than 3 years 5,689,018.01 5,689,018.01 100.00%
Total 6,127,907.51 5,710,962.49
(Continued)
Aging As at 1/1/2022
Balance Allowance for PCT
credit losses
Within 6 months 9,190,590.36 459,529.52 5.00%
6 months-1 years - - -
1-2 years - - -
2-3 years - - -
More than 3 years 5,689,018.01 5,689,018.01 100.00%
Total 14,879,608.37 6,148,547.53
14.1.3 Allowance for credit losses
Item As at 1/1/2022 Amount of change in the current period As at 31/12/2022
Provision Recovery or Write off Others
reversal
Accounts 6,148,547.53 -437,585.04 - - - 5,710,962.49
receivable
14.1.4 Accounts receivable due from the top five debtors of the Company are as follows:
Company name Related party Balance as at PCT Aging Balance of
31/12/2022 allowance for
credit losses as at
31/12/2022
PACIFIC PANDA.INC Non-related party 3,600,962.12 58.76% More than 3 years 3,600,962.12
146
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Xue Han Non-related party 293,209.20 4.78% More than 3 years 293,209.20
Shandong Linghua Engineering Non-related party 237,037.50 3.87% Within 6 months 11,851.88
Consulting Co., Ltd.
Zhoushan Haihui Seafood Co., Ltd. Non-related party 201,852.00 3.29% Within 6 months 10,092.60
Ming Lv Non-related party 158,154.98 2.58% More than 3 years 158,154.98
Total 4,491,215.80 73.28% 4,074,270.78
14.2 Other receivables
Item Balance as at 31/12/2022 Balance as at 1/1/2022
Interest receivable - -
Dividends receivable 79,137,061.83 85,085,303.70
Other receivables 49,296,863.40 37,525,815.05
Total 128,433,925.23 122,611,118.75
14.2.1 Dividends receivable
14.2.1.1 Classification and disclosure of dividends receivable
Item Balance as at 31/12/2022 Balance as at 31/12/2022
Subsidiary dividend 79,137,061.83 85,085,303.70
Less: Allowance for credit losses - -
Total 79,137,061.83 85,085,303.70
14.2.2 Other receivables
14.2.2.1 Aging analysis of other receivables
Aging Balance as at 31/12/2022
Within 6 months 32,810,640.91
6 months-1 years 87,549.95
1-2 years 3,192,920.91
2-3 years 2,445,424.82
More than 3 years 10,760,326.81
Total 49,296,863.40
14.2.2.2 Category of other receivables by nature
Nature Balance as at 31/12/2022 Balance as at 1/1/2022
Internal current account 43,971,159.92 33,377,123.62
Revolving fund and other 5,325,703.48 4,148,691.43
Total 49,296,863.40 37,525,815.05
14.2.2.3 The provision of allowance for credit losses
The allowance for credit losses Stage one Stage two Stage three Total
12-month ECL Lifetime ECL Lifetime ECL
(credit - (credit-impaired)
unimpaired)
Beginning balance 108,964.33 - 3,486,968.06 3,595,932.39
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The allowance for credit losses Stage one Stage two Stage three Total
Revaluation of beginning balance 108,964.33 - 3,486,968.06 3,595,932.39
Provision 19,730.79 - -14,917.08 4,813.71
Reversal - - - -
Charge off - - - -
Write-off - - - -
Other changes - - - -
Ending balance 128,695.12 - 3,472,050.98 3,600,746.10
14.2.2.4 Allowance for credit losses
Item Balance as at Amount of change in the current period Balance as at
1/1/2021 Allowance Take back or turn write off Other change 31/12/2021
back
Other 3,595,932.39 4,813.71 - - - 3,600,746.10
receivables
14.2.2.5 Other receivables due from the top five debtors are as follows:
Company name Nature of Balance as at Aging PCT Ending balance of
payment 31/12/2022 allowance for
credit losses
LAIF FISHERIES CO.,LTD Current account 16,823,428.32 0-3 years or more 34.13% -
AFRICA STAR FISHERIES Current account 13,520,061.48 0-3 years or more 27.43% -
LIMITED
YAW ADDO FISHERIES Current account 8,699,435.21 0-3 years or more 17.65% -
COMPANY LIMITED
ZHONG GHA FOODS COMPANY Current account 3,672,438.32 1-3 years or more 7.45% -
LIMITED
Shandong State-owned Assets Management fee 1,350,000.00 Within 6 months 2.74% 67,500.00
Investment Holding Co., Ltd.
Total 44,065,363.33 89.40% 67,500.00
14.3 Long-term equity investments
Item As at 31/12/2022 As at 1/1/2022
Balance Provision Carrying amount Balance Provision Carrying amount
for impairment for impairment
Investment to 328,189,455.23 - 328,189,455.23 232,189,455.23 - 232,189,455.23
subsidiaries
14.3.1 Investment to subsidiaries
Investee Balance as at Additions Reductions Balance as at Provision Balance of
1/1/2022 31/12/2022 for impairment in provision
current period for impairment As
at 31/12/2022
HABITAT 12,476,145.60 - - 12,476,145.60 - -
INTERNATION
AL CORP.
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Investee Balance as at Additions Reductions Balance as at Provision Balance of
1/1/2022 31/12/2022 for impairment in provision
current period for impairment As
at 31/12/2022
Shandong 22,869,513.38 - - 22,869,513.38 - -
Zhonglu Oceanic
Fisheries
Transportation
Co., Ltd.
Shandong 55,448,185.24 - - 55,448,185.24 - -
Zhonglu Oceanic
(Yantai) Food Co.,
Ltd.
Shandong 141,395,611.01 - - 141,395,611.01 - -
zhonglu Haiyan
Oceanic Fisheries
Co., Ltd.
Zhonglu Ocean - 96,000,000.00 - 96,000,000.00 - -
(Qingdao)
Industrial
Investment
Development Co.,
Ltd.
Total 232,189,455.23 - - 328,189,455.23 - -
14.4 Operating income and operating costs
14.4.1 Operating income and operating costs
Item Year ended 31/12/2022 Year ended 31/12/2021
Income Cost Income Cost
Primary operating business 127,389,726.24 102,711,351.76 135,171,275.55 115,100,856.01
Other operating business 5,912,273.40 1,952,483.99 4,156,011.88 1,788,918.05
Total 133,301,999.64 104,663,835.75 139,327,287.43 116,889,774.06
14.5 Investment income
Item Year ended Year ended
31/12/2022 31/12/2021
Gain/(Loss) from long-term equity investments in cost method 8,500,000.00 8,817,128.76
Gain/(Loss) on financial assets held for trading for the current period 1,076,034.24 49,972.60
Total 9,576,034.24 8,867,101.36
15. Supplementary information
15.1 Details of non-recurring gain or loss for the year
Item Amount Remark
Gain or loss on disposal of non-current assets 5,068,847.43 -
Government grants (except the government grants closely related to the business of the Company 2,140,540.56 -
and enjoyed according to unified quota or ration standards)
Gain or loss from fair value change of financial assets held-for-trading, other non-current financial 1,172,034.24 -
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Item Amount Remark
assets, derivative financial assets and financial liabilities held-for-trading etc., and investment
income from disposal of financial assets held-for-trading, other non-current financial assets, other
debt investments, financial liabilities held-for-trading and derivative financial liabilities, excluding
effective hedging operations related to normal business of the Company
The trusteeship fee income obtained from the entrusted operation 1,273,584.91 -
Other non-operating income/(expenses) except the above items 117,625.16 -
Effects of income tax on non-recurring items 1,587,719.20 -
Effects of non-recurring items attributable to the minority shareholders of the Company 538,502.13 -
Total 7,646,410.97
Note: The company received RMB 45,608,125.30 of subsidy funds for the improvement of the country’s international
contract performance capacity this year. Because the subsidy is closely related to the enterprise’s contract performance
score and fishing vessel operation time, the subsidy fund is based on the company’s contract performance score,
fishing vessel operation time and other parameters, according to the country, Standard calculation and confirmation of
relevant provincial departments. Therefore, it is not listed as non-recurring profit or loss.t.
15.2 Return on equity and earnings per share
Profit in report period Weighted average return on Earnings per share
equity Basic earnings per Diluted earnings
share per share
Net profit attributable to the common share holders 3.12% 0.11 0.11
Net profit attributable to the common shareholders after deducting 2.33% 0.08 0.08
non-recurring gain or loss items
150
