HAINAN JINGLIANGHOLDINGS CO., LTD.ANNUAL REPORT 2021
March, 2022
HAINAN JINGLIANG HOLDINGS CO., LTD.
ANNUAL REPORT 2021Part I Important NotesThis Summary is based on the full Annual Report of Hainan Jingliang Holdings Co., Ltd. (together with itsconsolidated subsidiaries, the “Company”, except where the context otherwise requires). In order for a fullunderstanding of the Company’s operating results, financial position and future development plans, investorsshould carefully read the aforesaid full text, which has been disclosed together with this Summary on the mediadesignated by the China Securities Regulatory Commission (the “CSRC”).All the Company’s Directors have attended the Board meeting for the review of this Report and its summary.Independent auditor’s modified opinion:
□ Applicable √ Not applicable
Board-approved final cash and/or stock dividend plan for ordinary shareholders for the Reporting Period:
□ Applicable √ Not applicable
The Company has no final dividend plan, either in the form of cash or stock.Board-approved final cash and/or stock dividend plan for preferred shareholders for the Reporting Period:
□ Applicable √ Not applicable
This Summary has been prepared in both Chinese and English. Should there be any discrepancies ormisunderstandings between the two versions, the Chinese version shall prevail.Part II Key Corporate Information
1. Stock Profile
| Stock name | JLKG, JL-B | Stock code | 000505, 200505 | |
| Stock exchange for stock listing | Shenzhen Stock Exchange | |||
| Contact information | Board Secretary | Securities Representative | ||
| Name | Guan Ying | Gao Deqiu | ||
| Address | 15/F, Jing Liang Building, NO. 16 East Third Ring Middle Road, Chaoyang District, Beijing | 15/F, Jing Liang Building, NO. 16 East Third Ring Middle Road, Chaoyang District, Beijing | ||
| Fax | 010-51672010 | 010-51672010 | ||
| Tel. | 010-51672130 | 010-51672029 | ||
| Email address | 1124387865@qq.com | gaodeqiu_jl@163.com | ||
2. Principal Activities or Products in the Reporting Period
The Company is principally engaged in oils and oilseeds processing and trading, as well as food processing. With
Hainan Jingliang Holdings Co., Ltd. Annual Report 2021
regard to oils processing and trading, the Company refines, bottles, markets, imports and exports raw oils uponinitial pressing. As for oilseeds, the Company presses, refines, bottles, markets, imports and exports oilseeds suchas sesame, soybean, corn germ, sunflower seeds and peanuts. The Company runs its oils and oilseeds processingand trading business primarily in Beijing City, Tianjin City and Hebei Province under the brands of “Gu Chuan”,“Lv Bao”, “Gu Bi”, “Huo Niao”, etc., with the main products being soybean oil, rapeseed oil, sunflower seed oiland sesame oil and paste, among others. As for its food processing business, it primarily develops, produces andmarkets snack food and bread under the brands of “Little Prince”, “MS Dong”, “Jianqiang De Tudou” and “GuChuan”, among others, with the main products being potato chips, cakes and pastries and bread. The snack foodbusiness covers all provinces and municipalities in China, while the bread business focuses on theBeijing-Tianjin-Hebei region. In this regard, the Company is one of the major suppliers for KFC in North China.According to the Industry Categorization Results of Listed Companies, the Company falls into the major industrycategory of manufacturing—agri-food processing industry (code: C13). Specifically, the Company operates in thevegetable oil processing segment, with its food processing business accounting for a large proportion in grossprofit. With respect to the vegetable oil processing industry, industrial integration has accelerated anddifferentiation is increasingly evident, with minority oils such as sunflower seed oil, tea oil, corn oil and rice branoil seeing fast growth. In terms of the food processing industry, consumer needs have become increasingly diverse,resulting in better and richer product offerings. Nonetheless, there are only a handful of major brands in theindustry, indicating great potential for industrial integration.
3. Key Financial Information
(1) Key Financial Information of the Past Three Years
Indicate by tick mark whether there is any retrospectively restated datum in the table below.
□ Yes √ No
Unit: RMB
| 31 December 2021 | 31 December 2020 | Change of 31 December 2021 over 31 December 2020 (%) | 31 December 2019 | |
| Total assets | 6,046,600,058.90 | 5,695,504,493.73 | 6.16% | 5,231,266,600.19 |
| Equity attributable to the listed company’s shareholders | 2,915,802,291.05 | 2,710,571,543.53 | 7.57% | 2,406,039,283.87 |
| 2021 | 2020 | 2021-over-2020 change (%) | 2019 | |
| Operating revenue | 11,763,093,835.56 | 8,741,749,912.11 | 34.56% | 7,440,286,465.54 |
| Net profit attributable to the listed company’s shareholders | 204,459,771.08 | 184,846,956.70 | 10.61% | 133,341,925.75 |
| Net profit attributable to the listed company’s shareholders before exceptional items | 195,422,832.45 | 164,037,737.59 | 19.13% | 104,483,092.09 |
| Net cash generated from/used in operating activities | 632,240,056.44 | -246,540,910.08 | 356.44% | 297,366,794.05 |
| Basic earnings per share | 0.28 | 0.26 | 7.69% | 0.19 |
Hainan Jingliang Holdings Co., Ltd. Annual Report 2021
| (RMB/share) | ||||
| Diluted earnings per share (RMB/share) | 0.28 | 0.26 | 7.69% | 0.19 |
| Weighted average return on equity (%) | 7.27% | 7.17% | 0.10% | 5.70% |
(2) Key Financial Information by Quarter
Unit: RMB
| Q1 | Q2 | Q3 | Q4 | |
| Operating revenue | 2,338,783,061.35 | 2,989,463,774.48 | 2,987,496,084.26 | 3,447,350,915.47 |
| Net profit attributable to the listed company’s shareholders | 36,585,077.36 | 51,743,120.55 | 39,778,852.22 | 76,352,720.95 |
| Net profit attributable to the listed company’s shareholders before exceptional items | 32,694,567.66 | 50,578,769.74 | 39,320,196.40 | 72,829,298.65 |
| Net cash generated from/used in operating activities | 274,757,224.16 | 3,093,221.29 | 534,327,111.43 | -179,937,500.44 |
Indicate by tick mark whether any of the quarterly financial data in the table above or their summations differsmaterially from what have been disclosed in the Company’s quarterly or interim reports.
□ Yes √ No
4. Share Capital and Shareholder Information at the Period-End
(1) Numbers of Ordinary Shareholders and Preferred Shareholders with Resumed Voting Rights as well asHoldings of Top 10 Shareholders
Unit: share
| Number of ordinary shareholders at the period-end | 59,249 | Number of ordinary shareholders at the month-end prior to the disclosure of this Report | 53,755 | Number of preferred shareholders with resumed voting rights at the period-end | 0 | Number of preferred shareholders with resumed voting rights at the month-end prior to the disclosure of this Report | 0 | |||
| Top 10 shareholders | ||||||||||
| Name of shareholder | Nature of shareholder | Shareholding percentage | Total shares held at the period-end | Restricted shares held | Shares in pledge, marked or frozen | |||||
| Status | Shares | |||||||||
| BEIJING GRAIN GROUP CO., LTD. | State-owned legal person | 39.68% | 288,439,561 | 0 | ||||||
| BEIJING STATE-OWNED CAPITAL OPERATION AND MANAGEMENT COMPANY LIMITED | State-owned legal person | 6.67% | 48,510,460 | 0 | ||||||
| WANG YUECHENG | Domestic natural person | 5.66% | 41,159,887 | 41,159,887 | ||||||
| LI SHERYN ZHAN MING | Foreign natural person | 0.71% | 5,155,300 | 0 | ||||||
Hainan Jingliang Holdings Co., Ltd. Annual Report 2021
| GOLD BUFFALO RUNYING (TIANJIN) EQUITY INVESTMENT FUND MANAGEMENT CO., LTD.—GOLD BUFFALO RUNYING (TIANJIN) EQUITY INVESTMENT FUND (L.P.) | Other | 0.40% | 2,889,803 | 0 | ||
| MEI JIANYING | Domestic natural person | 0.36% | 2,604,203 | 0 | ||
| ZHANG XIAOXIA | Domestic natural person | 0.27% | 1,949,250 | 0 | ||
| WANG XIAOXING | Domestic natural person | 0.23% | 1,679,200 | 0 | ||
| ORIENT SECURITIES （HONG KONG） LIMITED | Foreign legal person | 0.18% | 1,330,400 | 0 | ||
| CITIC SECURITIES COMPANY LIMITED－TIANHONG CHINA SECURITIES FOOD AND BEVERAGES TRADING OPEN-ENDED INDEX SECURITIES INVESTMENT FUND | Other | 0.16% | 1,197,700 | 0 | ||
| Related or acting-in-concert parties among the shareholders above | ① Beijing State-Owned Capital Operation and Management Center owns an indirect 100% share of Beijing Grain Group Co., Ltd., and Beijing Grain Group Co., Ltd. is the controlling shareholder of the Company (a 39.68% holding). ② Wang Yuecheng is a Deputy General Manager of the Company. Apart from that, the Company does not know whether there are any other related parties or acting-in-concert parties among the top 10 shareholders. | |||||
| Shareholders involved in securities margin trading (if any) | Shareholder Wang Xiaoxing holds 1,679,200 shares in the Company through his account of collateral securities for margin trading in Soochow Securities Co., Ltd. | |||||
(2) Number of Preferred Shareholders and Shareholdings of Top 10 of Them
□ Applicable √ Not applicable
No preferred shareholders in the Reporting Period.
Hainan Jingliang Holdings Co., Ltd. Annual Report 2021
(3) Ownership and Control Relations between the Actual Controller and the Company
The State-Owned Assets Supervision andAdministration Commission of the People’s
Government of Beijing Municipality
39.68% 6.67%
5. Outstanding Bonds at the Date when this Report Was Authorized for Issue
□ Applicable √ Not applicable
Part III Significant Events2021 marks the commencement of China’s “14
th
Five-Year Plan”, the 100
thanniversary of the founding of theCommunist Party of China (the “CPC”), as well as the first year for the Company’s “Three-year Actions forState-owned Enterprise Reform”, which is aimed to drive leapfrog growth. In the year, the Company closelyfollowed the general principle of seeking progress while keeping performance stable, adhered to the right path ofinnovation, and managed to overcome multiple difficulties. With strong CPC leadership, the Company saw a goodstart for the 14
th
Five-Year Plan period, with effective anti-pandemic actions, as well as a stabilizing andimproving development momentum.For the year under review, the Company recorded operating revenue of RMB11.763 billion, up 34.56% year onyear; a gross profit of RMB315 million, up 10.56% year on year; a net profit attributable to the listed company’sshareholders of RMB204 million, up 10.61% year on year; and earnings per share of RMB0.28, up 7.69% year onyear. As such, the objectives for the year were successfully accomplished.No significant changes occurred to the Company’s operations in the Reporting Period.
Part VI 2021 Financial Statements
Beijing State-Owned Capital Operation
and Management Company LimitedBeijing Capital Agribusiness Group Co.,
Ltd.
Beijing Capital Agribusiness Group Co.,
Ltd.Beijing Grain Group Co., Ltd.
Beijing Grain Group Co., Ltd.
Hainan Jingliang Holdings Co., Ltd.
Hainan Jingliang Holdings Co., Ltd.100%
100%100%
100%100%
| Non-current assets: △Loans and advances Debt investment Other debt investments Long-term receivables Long-term equity investment230,799,437.53 217,762,487.79 VI.10Other equity instruments investment20,000,000.00 20,000,000.00 VI.11Other non-current financial assets Investment property20,925,683.56 22,560,212.50 VI.12Fixed assets1,120,758,409.49 1,131,143,854.07 VI.13Construction in process11,220,840.10 28,458,413.67 VI.14Productive biological assets Oil-and-gas assets Right-of-use assets8,045,406.28 VI.15Intangible assets339,970,477.87 354,139,335.32 VI.16Development expenditure Goodwill191,394,422.51 191,394,422.51 VI.17Long-term deferred expenses17,383,818.41 20,529,601.50 VI.18Deferred income tax assets13,571,063.19 3,346,814.27 VI.19Other non-current assets189,741,996.74 319,739,581.67 VI.20 |
| Total non-current assets2,163,811,555.68 2,309,074,723.30 |
| Total assets6,046,600,058.90 5,695,504,493.73 |
Consolidated Balance Sheet
| Consolidated Balance Sheet (Continued) | |
| 6,046,600,058.90 5,695,504,493.73 | |
| Balance Sheet |
| Debt investment- - Other debt investments- - Long-term receivables- - Long-term equity investment2,626,437,846.24 2,626,437,846.24 XVI.3Other equity instruments investment20,000,000.00 20,000,000.00 Other non-current financial assets- - Investment property5,880,839.21 6,222,001.73 Fixed assets6,009,399.58 2,809,083.51 Construction in process- - Productive biological assets- - Oil-and-gas assets- - Right-of-use assets- - Intangible assets85,534.58 209,185.10 Development expenditure- - Goodwill- - Long-term deferred expenses- - Deferred income tax assets- - Other non-current assets- - Total non-current assets2,658,413,619.61 2,655,678,116.58 Total assets2,842,282,866.47 2,663,961,971.07 |
| Balance Sheet (Continued) |
| Undistributed profit-408,809,468.50 -862,106,544.32 Total shareholder's equity2,807,862,747.73 2,353,475,671.91 Total liabilities and shareholder's equity2,842,282,866.47 2,663,961,971.07 |
| Prepared by: Hainan Jingliang Holdings Co., Ltd.Year 2021Monetary Unit: RMB Yuan | |
| ItemsAmount for the current periodAmount for the prior periodNote | |
| I. Total operating income11,763,093,835.56 8,741,749,912.11 | |
| Including: Operating income11,763,093,835.56 8,741,749,912.11 VI.40 | |
| △Interest income | |
| △Premiums earned | |
| △Fee and commission income | |
| II. Total operating cost11,440,200,537.43 8,493,126,170.72 | |
| Including: Operating cost11,037,154,469.50 8,090,847,245.42 VI.40 | |
| △Interest expenses | |
| △Fee and commission expenses | |
| △Surrenders | |
| △Net claims paid | |
| △Net appropriation for insurance contracts reserves | |
| △Dividend expenses for policyholders | |
| △Reinsurance expenditures | |
| Tax and surcharges23,788,999.87 23,182,521.26 VI.41 | |
| Selling expenses147,316,118.24 168,538,310.92 VI.42 | |
| Administration expenses198,767,892.19 179,538,728.93 VI.43 | |
| Research and development expenses12,049,947.96 9,903,221.93 VI.44 | |
| Financial expenses21,123,109.67 21,116,142.26 VI.45 | |
| Including: interest expenses42,302,007.06 31,742,996.45 VI.45 | |
| Interest income26,216,178.46 16,035,923.84 VI.45 | |
| Add: Other income14,535,083.32 16,222,504.88 VI.46 | |
| Income from investment (Losses shall be filled in with “-”)44,039,777.71 37,875,880.38 VI.47 | |
| Including: income from investment on joint venture and cooperative enterprise37,822,580.24 19,542,664.00 VI.47 | |
| Income from derecognition of financial assets measured at amortized cost | |
| △Income from exchange(Losses shall be filled in with “-”)- - | |
| Income from net exposure hedging(Losses shall be filled in with “-”) | |
| Income from changes in fair value (Losses shall be filled in with “-”)-66,667,420.88 -16,467,791.36 VI.48 | |
| Credit impairment loss(Losses shall be filled in with “-”)-539,523.46 251,710.19 VI.49 | |
| Income from assets impairment(Losses shall be filled in with “-”)-306,388.07 -63,449.10 VI.50 | |
| Income from asset disposal (Losses shall be filled in with “-”)-208,369.12 38,752.37 VI.51 | |
| III. Operating profit (Losses shall be filled in with “-”)313,746,457.63 286,481,348.75 | |
| Add: non-operating income2,067,373.20 746,589.42 VI.52 | |
| Less: non-operating expenditure328,641.29 1,888,144.99 VI.53 | |
| IV. Total profit (Total losses shall be filled in with “-”)315,485,189.54 285,339,793.18 | |
| Less: income tax expense76,251,467.60 66,115,298.62 VI.54 | |
| V. Net profit (Net loss shall be filled in with “-”)239,233,721.94 219,224,494.56 | |
| Including: net profit of the merged party before the merger | |
| (I) Classified by operations continuity: | |
| 1. Net profit from continuing operations (Net loss shall be filled in with “-”)239,233,721.94 219,224,494.56 | |
| 2. Net profit from discontinuing operations (Net loss shall be filled in with “-”) | |
| (II) Classified by ownership attribution: | |
| 1、Net profit attributable to shareholders of the parent company (Net loss shall be filled inwith “-”) | |
204,459,771.08 184,846,956.70
| Consolidated Income Statement | |
| -105,630.50 -81,510.00 | |
| （2）Changes in fair value of other debt investments- | |
| （3）Reclassification of financial assets included in other comprehensive income- | |
| （4）Provision for credit impairment of other debt investments- | |
| （5）Cash flow hedge reserve- | |
| （6）Balance arising from the translation of foreign currency-213,393.06 -549,376.80 | |
| （7）Other- | |
| Net of tax from other comprehensive income attributable to minority shareholder- | |
| VII. Total comprehensive income238,914,698.38 218,593,607.76 | |
| Total comprehensive income attributable to shareholders of the parent company204,140,747.52 184,216,069.90 | |
| Total comprehensive income attributable to minority shareholder34,773,950.86 34,377,537.86 | |
| VIII. Earnings per share: | |
| (I) Basic earnings per share0.28 0.26 | |
| (II) Diluted earnings per share0.28 0.26 |
| Prepared by: Hainan Jingliang Holdings Co., Ltd.Year 2021Monetary Unit: RMB Yuan | |
| ItemsAmount for the current periodAmount for the prior periodNote | |
| I. Total operating income591,060.56 1,181,687.83 | |
| Including: operating income591,060.56 1,181,687.83 XVI.4 | |
| △Interest income- - | |
| △Earned premium- - | |
| △Fee and commission income- - | |
| II. Total operating cost9,311,844.39 26,118,381.35 | |
| Including: operating cost341,162.52 - XVI.4 | |
| △Interest expenses- - | |
| △Fee and commission expenses- - | |
| △Surrenders- - | |
| △Net claims paid- - | |
| △Net appropriation for insurance contracts reserves- - | |
| △Dividend expenses for policyholders- - | |
| △Reinsurance expenditures- - | |
| Tax and surcharges259,377.02 151,241.71 | |
| Selling expenses- - | |
| Administration expenses8,710,846.48 25,988,631.19 | |
| Research and development expenses- - | |
| Financial expenses458.37 -21,491.55 | |
| Including: interest expenses- - | |
| Interest income2,566.23 26,478.83 | |
| Add: Other income84,564.61 79,821.19 | |
| Income from investment (Losses shall be filled in with “-”)461,597,751.35 206,400,562.23 XVI.5 | |
| Including: income from investment on joint venture and cooperative enterprise- - | |
| Income from derecognition of financial assets measured at amortized cost (Losses shallbe filled in with “-”) | |
| △Income from exchange(Losses shall be filled in with “-”)- - | |
| Income from net exposure hedging(Losses shall be filled in with “-”) | |
| Income from changes in fair value (Losses shall be filled in with “-”)- - | |
| Credit impairment loss(Losses shall be filled in with “-”)-99,118.26 -33,884.15 | |
| Income from assets impairment(Losses shall be filled in with “-”)- - | |
| Income from asset disposal (Losses shall be filled in with “-”)-24,042.07 - | |
| III. Total profit (Total losses shall be filled in with “-”)452,838,371.80 181,509,805.75 | |
| ?Add: non-operating income458,704.02 4,001.44 | |
| Less: non-operating expenditure- 1,015,288.35 | |
| IV. Total profit (Total losses shall be filled in with “-”)453,297,075.82 180,498,518.84 | |
| Less: income tax expense- - | |
| V. Net profit (Net loss shall be filled in with “-”)453,297,075.82 180,498,518.84 | |
| (I) Net profit from continuing operations (Net loss shall be filled in with “-”)453,297,075.82 180,498,518.84 | |
| (II) Net profit from discontinuing operations (Net loss shall be filled in with “-”)- - | |
| VI. Net of tax from other comprehensive income- - | |
| (I) Other comprehensive income that cannot be reclassified into the profit and loss- - | |
| 1.Other comprehensive income that cannot be reclassified into the profit and loss- - | |
| 2. Other comprehensive income that cannot be transferred to gains and losses underthe equity method | |
- -
| - - | |
| （2）Changes in fair value of other debt investments | |
| （3）Reclassification of financial assets included in other comprehensive income | |
| （4）Provision for credit impairment of other debt investments | |
| （5）Cash flow hedge reserve- - | |
| （6）Balance arising from the translation of foreign currency- - | |
| （7）Other | |
| VII. Total comprehensive income453,297,075.82 180,498,518.84 | |
| VIII. Earnings per share | |
| (I) Basic earnings per share- - | |
| (II) Diluted earnings per share- - |
Income Statement
| Consolidated Cash Flow Statement | |
| -343,788.00 -21,219,661.70 | |
| V. Net Increase in Cash and Cash Equivalents172,539,793.28 -220,708,759.80 VI.57 | |
| Add: Opening Balance of Cash and Cash Equivalents334,389,017.41 555,097,777.21 VI.57 | |
| VI. Closing Balance of Cash and Cash Equivalents506,928,810.69 334,389,017.41 VI.57 |
| Prepared by: Hainan Jingliang Holdings Co., Ltd.Year 2021Monetary Unit: RMB YuanItemsAmount for the current periodAmount for the prior periodNoteI. Cash Flows from Operating Activities:Cash Receipts from Sales of Goods or Rendering of Services- 540,121.28 |
| △Net increase in customer deposits and due to banks and other financial institutions- - |
| △Net increase in borrowings from the Central Bank- - |
| △Net increase in borrowings from other financial institutions- - |
| △Cash received for insurance premium- - |
△Net cash received from reinsurance contracts- -
| △Net increase in deposits and investments from policyholders- - |
| △Cash received for interest, fee and commission- - |
| △Net increase in borrowings from banks- - |
△Net cash increase under repurchase agreements- -
△Net increase received from securities trading brokerage business
Tax Refund Receipts- -Other Cash Receipts Concerning Operating Activities6,021,876.55 63,468,858.85
Subtotal of Cash Inflows from Operating Activities6,021,876.55 64,008,980.13Cash Paid for Purchase of Goods and Accepting Services- -
| Statement of Cash Flows |
| Subtotal of Cash Outflows from Investment Activities180,089,800.00 407,799.78 Net Cash Flows from Investment Activities281,558,151.35 206,283,762.45 III. Cash Flows from Financing Activities:Cash Receipts from Accepting Investment- - Including: Cash Received by Subsidiaries Absorbing the Investment from Minority Shareholders- - Cash Receipts from Borrowings- - Other Cash Receipts Concerning Financing Activities1,090,000.00 - Subtotal of Cash Inflows from Financing Activities1,090,000.00 - Cash Paid for Repayment of Debts- - Cash Paid for Distribution of Dividends, Profits or Repayment of Interests- - Including: Dividends and Profits Paid by Subsidiaries to Minority Shareholders- - Other Cash Paid Concerning Financing Activities280,859,694.11 - |
| Subtotal of Cash Outflows from Financing Activities280,859,694.11 - |
| Net Cash Flows from Financing Activities-279,769,694.11 - |
| IV. Exchange Rate Fluctuation Consequences on Cash and Cash Equivalents- - |
| V. Net Increase in Cash and Cash Equivalents9,864.25 -2,012,779.40 |
| Add: Opening Balance of Cash and Cash Equivalents1,523,322.79 3,536,102.19 |
| VI. Closing Balance of Cash and Cash Equivalents1,533,187.04 1,523,322.79 |
| - - | ||||||||||||
| Total shareholders'equities | ||||||||||||
| Special reserve | Surplus reserve | △General riskreserve | Undistributed profit | Others | Subtotal | |||||||
| 6. Others- - | ||||||||||||
| (V) Special reserve- - - - - - - - - - - - - - - | ||||||||||||
| 1. Withdrawal for current period- - | ||||||||||||
| 2. Use for current period- - | ||||||||||||
| (VI) Others- - | ||||||||||||
| IV. Closing balance of current year726,950,251.00 - - - 1,675,918,350.95 - -682,282.22 - 122,122,436.98 - 391,493,534.34 - 2,915,802,291.05 396,351,501.50 3,312,153,792.55 | ||||||||||||
Consolidated Statement of Changes in Equity
Consolidated Statement of Changes in Equity Year 2021
| Year 2021 | |||||||||
| Items | Current Amount | ||||||||
| Shareholder's Equity attributable to the Parent Company | Minority equity | ||||||||
| Capital stock | Other equity instruments | Capital reserve | Less: treasurystock | Othercomprehensiveincome | |||||
| - - | ||||
| 4. Others-126,601,129.37 -126,601,129.37 -227,118,308.04 -353,719,437.41 | ||||
| (III) Distribution of profits- - - - - - - - - - - - -3,713,626.89 -3,713,626.89 | ||||
| 1. Withdrawal of surplus reserves- - | ||||
| 2. Withdrawal of general risk reserve- - | ||||
3. Distribution to shareholders- -3,713,626.89 -3,713,626.89
| 4. Others- - | |
| (IV) Inner carrying-over of shareholders' equities- - - - - - - - - - - - - - - | |
| 1. Capital reserve converted into capital (or capitalstock) | |
- -
| Consolidated Statement of Changes in Equity (Continued) | |||||||||||||
| - - | |||||||||||||
| Year 2021 | |||||||||||||
| Items | Amount of Last Period | ||||||||||||
| Shareholder's Equity attributable to the Parent Company | Minority equity | Total shareholders'equities | |||||||||||
| Capital stock | Other equity instruments | Capital reserve | Less: treasurystock | Othercomprehensiveincome | Special reserve | Surplus reserve | △General riskreserve | Undistributed profit | Others | Subtotal | |||
| 6. Others- - | |||||||||||||
| (V) Special reserve- - - - - - - - - - - - - - - | |||||||||||||
| 1. Withdrawal for current period- - | |||||||||||||
| 2. Use for current period- - | |||||||||||||
| (VI) Others- - | |||||||||||||
| IV. Closing balance of current year726,950,251.00 - - - 1,674,828,350.95 - -363,258.66 - 122,122,436.98 - 187,033,763.26 - 2,710,571,543.53 388,601,959.83 3,099,173,503.36 | |||||||||||||
Prepared by: Hainan Jingliang Holdings Co., Ltd.Monetary Unit: RMB Yuan Preferredstock
| Preferredstock | Perpetualbond |
Others
| Statement of Changes in Equity | ||||||||||
| - | ||||||||||
| Year 2021 | ||||||||||
| Items | Current Amount | |||||||||
| Capital stock | Other equity instruments | Capital reserve | Less: treasurystock | Othercomprehensiveincome | Special reserve | Surplus reserve | △General riskreserve | Undistributed profit | Total shareholders'equities | |
| 6. Others- - - - - - - - - | ||||||||||
| (V) Withdrawal and use of Special reserve- - - - - - - - - - - - | ||||||||||
| 1. Withdrawal for current period- - - - - - - - - | ||||||||||
| 2. Use for current period- - - - - - - - - | ||||||||||
| (VI) Others- | ||||||||||
| IV. Closing balance of current year726,950,251.00 - - - 2,380,234,900.84 - - - 109,487,064.39 - -408,809,468.50 2,807,862,747.73 | ||||||||||
| Statement of Changes in Equity (Continued) | ||||||||||||
| - | ||||||||||||
| Year 2021 | ||||||||||||
| Items | Amount of Last Period | |||||||||||
| Capital stock | Other equity instruments | Capital reserve | Less: treasurystock | Othercomprehensiveincome | Specialreserve | Surplus reserve | △General riskreserve | Undistributed profit | Total shareholders'equities | |||
| 6. Others- - - - - - - - - | ||||||||||||
| (V) Withdrawal and use of Special reserve- - - - - - - - - - - - | ||||||||||||
| 1. Withdrawal for current period- - - - - - - - - | ||||||||||||
| 2. Use for current period- - - - - - - - - | ||||||||||||
| (VI) Others- | ||||||||||||
| IV. Closing balance of current year726,950,251.00 - - - 2,379,144,900.84 - - - 109,487,064.39 - -862,106,544.32 2,353,475,671.91 | ||||||||||||
Hainan Jingliang Holdings Co., Ltd.Notes to the 2021 Financial Statements(Unless otherwise stated, the amount unit is RMB Yuan)
I. Basic Information of the Company
1. Place of incorporation, form of organization and head office addressHainan Jingliang Holdings Co., Ltd. (hereinafter referred to as "the Company" or "Company" or"Jingliang Holdings") is established in accordance with the Hainan Provincial People's GovernmentGeneral Office QFBH (1992) No.1, approved by QY (1992) SGZ No. 6 Document of the People'sBank of Hainan Province and re-registered by Hainan Pearl River Enterprise Company on January 11,1992. The Company issued 81,880,000 shares in total upon re-registration, of which 60,793,600 shareswere converted from the net assets of the original company and 21,086,400 shares were newly issued.And the name of the Company is Hainan Pearl River Enterprise Co., Ltd. The business licenseregistration number of the joint-stock company is 20128455-6, and the holding parent companyGuangzhou Pearl River Enterprise Group holds 36,393,600 shares, accounting for 44.45%. Approvedby ZGB (1992) No. 83 Document of the People's Bank of China in December 1992, the additional21,086,400 shares were listed on the Shenzhen Stock Exchange for trading. The industry involved isreal estate.
On March 25, 1993, in response to QGBH (1993) No.028 of Hainan Provincial Leading GroupOffice and SRYFZ (1993) No.099 of Shenzhen Special Economic Zone Branch of the People's Bankof China, the Company increased its share capital by converting the original share capital into139,196,000 shares (according to distribution of 10, delivery of 5 and transfer of 2), with thecontrolling shareholder Guangzhou Pearl River Enterprises Group holding 48,969,120 sharesaccounting for 35.18% at the end of 1993.In 1994, the share capital was increased by 10 to 10, and the total share capital was 278,392,000shares after the increase. The controlling shareholder, Guangzhou Pearl River Enterprises Group,holds 97,938,240 shares, accounting for 35.18%.In 1995, the issuance of 50,000,000 B Shares was approved by SZBF (1995) No.45 and SZBF(1995) No.12. The share capital of the Company was increased by 10:1.5 on the basis of the sharecapital after the additional B shares were issued, and the share capital of the Company after theincrease was 377,650,800 shares. The holding parent company, Guangzhou Pearl River EnterprisesGroup, held 112,628,976 shares, accounting for 29.82% of the total.In 1999, Guangzhou Pearl River Enterprises Group transferred all 112,628,976 shares to Beijing
Wanfa Real Estate Development Co., Ltd.. After the transfer of shares was completed in June 1999,Beijing Wanfa Real Estate Development Co., Ltd. held 112,628,976 shares of the Company,accounting for 29.82% of the total shares of the Company, and became the controlling shareholder ofthe Company.
On January 10, 2000, the name of the Company was changed to Hainan Pearl River Holding Co.,Ltd. and the Business License for Enterprise Legal Person was renewed by Industrial & CommerceAdministration Bureau of Hainan Province.On August 17, 2006, the reform plan of the split share structure of the Company was implemented.The Company transferred 49,094,604 shares of capital stock to all shareholders at the ratio of 10 to 1.3.The original non-tradable shareholders transferred the increased shares to the tradable A-share holders.Beijing Wanfa Real Estate Development Co., Ltd. reimbursed the consideration shares of thenon-tradable shareholders who have not expressly expressed their opinions. The converted total sharecapital was 426,745,404 shares, and the original controlling shareholder Beijing Wanfa Real EstateDevelopment Co., Ltd. held 107,993,698 shares, accounting for 25.31%. Shareholders of non-tradableshares repaid 3,289,780 shares in consideration of the split share structure in 2007. Shareholders ofnon-tradable shares repaid 1,196,000 shares in consideration of the split share structure in 2009.On 2 September 2016, Beijing Wanfa Real Estate Development Co., Ltd., the original controllingshareholder, transferred all of its 112,479,478 shares to Beijing Grain Group Co., Ltd. (hereinafterreferred to as "Beijing Grain Group"). Upon completion of the share transfer in September 2016,Beijing Grain Group Co., Ltd. held 112,479,478 shares, accounting for 26.36% of the total shares ofthe Company. In November 2016, based on the confidence in the subject matter of the material assetrestructuring and the future development of the Company, Beijing Grain Group Co., Ltd. decided toincrease its shareholding through centralized bidding in the secondary market. After the increase, itheld 123,561,963 shares of the Company, accounting for 28.95% of the total number of shares, andbecame the largest shareholder of the Company.The Company determined July 31, 2017 as the delivery date of material assets in accordance withthe material assets restructuring plan and the delivery agreement. On September 14, 2017, approvedpursuant to the resolution of the Second Extraordinary General Meeting of Shareholders of theCompany on November 18, 2016 and the Approval Reply of the China Securities RegulatoryCommission dated July 28, 2017 On Approval of Hainan Pearl River Holding Co., Ltd. to PurchaseAssets and Raise Supporting Funds from Beijing Grain Group Co., Ltd. (ZJXK (2017) No.1391): 1)The Company purchased assets from the original shareholders of Beijing Grain Food Co., Ltd.(hereinafter referred to as Beijing Grain Food) by issuing 210,079,552 shares of the balance betweenthe transaction price of the injected assets and the assets to be purchased (the difference between the
transaction price of the injected assets and the assets to be purchased was RMB 1,699.5436 millionyuan). The par value in the issuance was RMB 1.00 per share and the issuance price was RMB 8.09 pershare; 2) The Company has issued 48,965,408 non-public shares of the Company to Beijing GrainGroup for the purpose of purchasing the supporting funds raised from the assets of the issuance ofshares. The par value per share of the Company was RMB1.00 and the issuance price was RMB8.82per share. The shareholder Beijing Grain Group conducted subscription in monetary funds. Uponcompletion of the issue, the registered capital was RMB 685,790,364.00 and the share capital wasRMB 685,790,364.00. Beijing Grain Group, which accounted for 42.06% of the total number of shares,became the largest shareholder of the Company.On November 21, 2019, with the approval of Beijing Shounong Food Group Co., Ltd. (BeijingShounong Food publish [2019] No. 212), Approval on the Plan of Purchasing Assets by Cash andIssuing Shares of Hainan Jingliang Holdings Co., Ltd, On April , 2020, with the approval of Approvalof Hainan Jingliang Holding Co., Ltd. Issuance Shares to Wang Yuecheng to Purchase Assets by ChinaSecurities Regulatory Commission [2020] No. 610, the company shall not issue more than 41,159,887new shares in private offering to raise funds supporting the purchase of assets through the issued shares.The Company and its subsidiary, Beijing Jingliang Food Co., Ltd., purchased the 25.1149% equitystake of Zhejiang Little Prince by cash and issuance of shares.As of December 31, 2021, the company has issued 726,950,251.00 shares, and the company'sshare capital is 726,950,251.00 yuan; Uniform Social Credit Code: 914600002012845568;Registration authority: Hainan Market Supervision Administration; Company type: Limited Company(Listed, State-controlled); Registered address: F29, Dihao Building, Pearl River Square, BinhaiAvenue, Haikou City; Legal representative: Li Shaoling.
2. The nature of the Company's business and its main business activitiesThe Company belongs to manufacturing-agricultural and sideline food processing industry. Itsmain business ativites mainly includes: food, beverages, agricultural and sideline products,vegetable proteins and their products, organic fertilizers, microbial fertilizers, production andmarketing of agricultural fertilizers; land consolidation, soil remediation; agricultural comprehensiveplanting development, animal husbandry and aquaculture, agricultural equipment production andmarketing; computer network technology, investment in communication projects, research anddevelopment and application of high-tech products; investment and consultation of environmentalprotection projects; animation, graphic design; import and export trade in goods and technology; rentalof own premises.
The Company and its subsidiaries are principally engaged in the processing, production and salesof foodstuffs, agricultural and sideline products, grease, oils, and leisure foods.
3. The name of the parent company and the ultimate parent company.The parent company of the company is Beijing Grain Group Co., Ltd., and the ultimate parentcompany is Beijing shounong Food Group Co., Ltd.
4. The approval institution and the approval date of the financial statements.These financial statements have been approved and reported by the Board of Directors of theCompany in its resolution dated March 29, 2022.
5. Consolidation scope
The consolidated scope of the consolidated financial statements of the company is determined onthe basis of control, including the financial statements of the company and all subsidiaries.Subsidiaries refer to enterprises or entities controlled by the Company.A total of 18 subsidiaries of the Company were included in the scope of consolidation on 31December, 2021, as detailed in Note 8 "Interests in Other Entities". The consolidation scope of theCompany for the current period is same as the previous period as detailed in Note 7, "Change inConsolidation Scope".II. Preparation Basis for Financial Statements
1. Preparation Basis
Based on the assumption of going concern and according to actual transaction events, thefinancial statements are prepared in accordance with the relevant provisions of Accounting Standardfor Business Enterprises and the following stated Significant Accounting Policies and Estimates.
2. Going concern
The Company has a going concern capability for 12 months from the end of the reporting periodand no material matters affecting the company's going concern capability were found. Therefore, thefinancial statements are presented on a going concern basis is reasonable.
III. Significant Accounting Policies and Estimates
The Company and its subsidiaries are engaged in the processing, production and sales of food,agricultural and sideline products, grease, oil and leisure food. According to the characteristics ofactual production and operation and the provisions of relevant accounting standards for businessenterprises, the Company and its subsidiaries have formulated a number of specific accountingpolicies and accounting estimates for transactions and events such as revenue recognition. For details,please refer to the descriptions in Note Ⅲ, 26 “Revenue". For descriptions of the significantaccounting judgments and estimates made by the management, please refer to Note Ⅲ, 32“Significant Accounting Judgments and Estimates"
1. Statement of Compliance of Accounting Standards for Business EnterprisesThe financial statements prepared by the Company based on the above preparation basis conformto the requirements of the Accounting Standards for Business Enterprises and their applicationguidelines, explanations and other relevant provisions (collectively referred to as "ASBE") and trulyand completely reflect the Company's financial status, operating results, cash flow and other relevantinformation.
In addition, the preparation of this financial report refers to the Rules for Preparation andReporting Information Disclosure of Companies Offering Securities to the Public No.15-GeneralProvisions on Financial Reports revised by China Securities Regulatory Commission in 2014 and thepresentation and disclosure requirements in Notice on Matters Related to the Implementation of theNew Accounting Standards for Enterprises by Listed Companies (Accounting Department Letter[2018] No. 453)
2. Accounting Period and Business Cycle
The accounting period of the Company is divided into an annual period and an interim period.The accounting interim period refers to the reporting period shorter than a full accounting year. Thefiscal year of the Company adopts the Gregorian calendar year, that is, from January 1 to December 31of each year.
The normal business cycle is the period from the time the Company purchases assets forprocessing to the time when cash or cash equivalents are realized. The Company uses 12 months as anbusiness cycle and uses it as a liquidity classification standard for assets and liabilities.
3. Bookkeeping Standard Currency
RMB is the currency in the main economic environment in which the Company and its domesticsubsidiaries operate. The Company and its domestic subsidiaries use RMB as the bookkeepingstandard currency. The offshore subsidiaries of the Company determine USD as their bookkeepingstandard currency based on the currencies in the main economic environment in which they operate.The currency used by the Company in preparing these financial statements is RMB.
4. The Accounting Treatment of Business Combination under the Same Control andDifferent Control
Business Combination refers to the transaction or event in which two or more separate enterprisesare merged to form one reporting entity. Business combination can be divided into businesscombination under the same control and business combination under different control.
(1) Business combination under the same control
Enterprises participating in the combination are ultimately controlled by the same party or
multiple parties before and after the combination, and the control is not temporary, so it is the businesscombination under the same control. In case of business combination under the same control, the partythat obtains control of other enterprises participating in the combination on the combination date shallbe the combination party, and the other enterprises participating in the combination shall be the mergedparty. The combination date refers to the date on which the combination party actually acquires controlover the merged party.The assets and liabilities acquired by the combination party are measured at the book value of themerged party at the date of consolidation, including goodwill that was formed during acquisition byend controller . If the difference between the book value of the net assets acquired by the merging partyand the book value of the merged consideration (or the total par value of the issued shares) paid by themerging party, and the capital reserve (share capital premium) shall be adjusted; If the capital reserve(equity premium) is insufficient to offset, the retained earnings shall be adjusted.The direct expenses incurred by the merging party for the purpose of business combination shallbe included in the profits and losses of the current period when they are incurred.
(2) Business combination under different control
If the enterprises participating in the merger are not ultimately controlled by the same party ormultiple parties before and after the merger, the enterprise merger is not under the same control. In caseof business combination under different control, the party that obtains control of other enterprisesparticipating in the combination on the date of purchase shall be the Purchaser, and the otherenterprises participating in the combination shall be the Purchasee. Purchase date means the date onwhich the Purchaser actually acquires control of the Purchasee.
For business combination under different control, the merger cost includes the assets, liabilitiesand fair value of equity securities issued by the Purchaser in order to obtain the control over thePurchasee on the date of purchase, and the intermediary fees such as audit, legal service, appraisal andconsultation and other management fees for the enterprise merger are used to record into the profitsand losses of the current period when incurred. The transaction costs of equity or debt securities issuedby the Purchaser as a merger consideration are included in the initial recognition amount of the equityor debt securities. Contingent consideration involved shall be included in the consolidation cost at itsfair value at the purchase date, and the consolidation goodwill shall be adjusted accordingly if new orfurther evidence of the existence of circumstances at the purchase date appears within 12 months afterthe purchase date and the adjustment or consideration is required. The consolidation cost incurred bythe Purchaser and the identifiable net assets acquired during the consolidation are measured at the fairvalue at the date of purchase. The difference between the merger costs and the fair value shares of theidentifiable net assets of the Purchasee at the purchase date obtained in the merger is recognized as
goodwill. If the combined cost is less than the fair value of the identifiable net assets of the Purchaseein the merger, first, the fair value of the identifiable assets, liabilities and contingent liabilities of thePurchasee and the measurement of the consolidation cost shall be re-checked. If the consolidation costis still smaller than the fair value share of the identifiable net assets of the Purchased obtained in theconsolidation after the re-check, the difference shall be recorded into the profits and losses of thecurrent period.
When the Purchaser acquires the deductible temporary difference of the Purchasee, if it fails torecognize the deferred income tax assets on the date of purchase because it does not meet therecognition conditions for the deferred income tax, and within 12 months of the date of purchase, newor further information is obtained indicating that the relevant circumstances at the purchase datealready exist and the economic benefits from the temporary difference deductible by the purchaser onthe purchase date are expected to be realized, the relevant deferred income tax assets shall berecognized, and the goodwill shall be reduced. If the goodwill is not sufficiently offset, the differenceshall be recognized as the current profit or loss; In addition to the above circumstances, the deferredincome tax assets related to the enterprise merger are recognized and included in the current profits andlosses.Through multi-transaction and step-by-step business combination under different control,according to the Circular of the Ministry of Finance on Printing and Issuing the Interpretation ofAccounting Standards for Business Enterprises No.5 (CK (2012) No.19) and Article 51 of theAccounting Standards for Business Enterprises No.33-Consolidated Financial Statements on thejudgment criteria of "package deal" (see 5 (2) of Note 3), it is determined whether the multipletransactions belong to the "package deal". In the case of a "package deal", the accounting treatmentshall be performed with reference to the description in the preceding paragraphs of this section andNote 3, 13 "Long-term Equity Investments"; If the transaction is not a "package deal", the accountingtreatment shall be distinguished between the individual financial statements and the consolidatedfinancial statements:
In the individual financial statements, the sum of the book value of the equity investment held bythe Purchaser prior to the purchase date and the cost of the new investment at the purchase date shall betaken as the initial investment cost of the investment; Where the equity of the Purchased held beforethe date of purchase involves other comprehensive income, the other consolidated income associatedwith the investment is accounted for on the same basis as the assets or liabilities directly disposed of bythe Purchaser (i.e., except for the corresponding share in the change caused by the acquisition of thenet liability or net assets of the defined benefit plan remeasured in accordance with the equity method,the rest is transferred to the current investment income).
In the consolidated financial statements, the equity of the Purchased held prior to the date ofpurchase is remeasured according to the fair value of the equity at the date of purchase, and thedifference between the fair value and the carrying value is included in the investment income of thecurrent period; Where the equity of the Purchasee held before the date of purchase involves othercomprehensive income, other consolidated income related thereto shall be accounted for on the samebasis as the direct disposal of the relevant assets or liabilities by the Purchaser (i.e., except for thecorresponding share in the change caused by the acquisition of the net liability or net asset of thedefined benefit plan remeasured in accordance with the equity method, the rest is converted into theinvestment income of the current period to which the acquisition date belongs).
5. Preparation Method of Consolidated Financial Statement
(1) Principles for determining the scope of the consolidated financial statement
The scope of consolidation of the consolidated financial statements is determined on a controlbasis. Control means that the Company has the authority over the Investee, enjoys a variable return byparticipating in the relevant activities of the Investee, and has the ability to use its authority over theInvestee to influence the amount of such return. The scope of the merger includes the Company and allits subsidiaries. Subsidiary refers to the main body controlled by the Company.
The Company will re-evaluate the above control definitions once the relevant facts andcircumstances change, which results in the change of the relevant elements.
(2) Preparation method of consolidated financial statement
The Company begins to incorporate the net assets of the subsidiary and the actual control of theproduction and operation decisions into the scope of the merger from the date when the subsidiary isacquired; Cease to be included in the scope of the merger as of the date of loss of effective control. Forthe subsidiaries disposed of, the operating results and cash flows prior to the date of disposal have beenappropriately included in the consolidated income statement and consolidated cash flow statement;For subsidiaries disposed of in the current period, the opening amount of the consolidated balancesheet is not adjusted. The operating results and cash flows of subsidiaries increased by consolidationafter purchase have been properly included in the consolidated income statement and consolidatedcash flow statement, and the opening and comparative amounts in the consolidated financialstatements have not been adjusted for subsidiaries that are not under the same control. The operatingresults and cash flows of the subsidiaries increased by consolidation under the same control from thebeginning of the consolidation period to the consolidation date have been appropriately included in theconsolidated profit statement and consolidated cash flow statement, and the comparative amount of theconsolidated financial statements has been adjusted at the same time.
In the preparation of the consolidated financial statements, if the accounting policies or
accounting periods adopted by the subsidiaries are inconsistent with those adopted by the Company,necessary adjustments shall be made to the financial statements of the subsidiaries in accordance withthe accounting policies and accounting periods of the Company. For subsidiaries acquired throughbusiness combination under different control, the financial statements shall be adjusted on the basis ofthe fair value of identifiable net assets at the date of purchase.All significant transaction balances, transactions and unrealized profits within the Company areoffset at the time of preparation of the consolidated financial statements.The shareholders' equity and the portion of the net profit or loss of the subsidiary that is notowned by the Company for the current period are separately presented as minority shareholders' equityand minority shareholders' profit or loss in the consolidated financial statements under shareholders'equity and net profit. The shares of minority shareholders' equity in the net profits and losses ofsubsidiaries for the current period are shown as "minority shareholders' profits and losses" under thenet profit item in the consolidated income statement. Losses shared by minority shareholders in asubsidiary exceed the minority shareholders' share in the shareholders' equity of the subsidiary at thebeginning of the period, and still decrease by a number of shareholders' equity.
When the control of the original subsidiary is lost due to the disposal of part of the equityinvestment or other reasons, the residual equity shall be revalued according to its fair value at the dateof loss of control. The sum of consideration obtained from the disposal of equity and the fair value ofthe remaining equity minus the difference between the shares of the net assets of the originalsubsidiary that shall be continuously calculated from the purchase date according to the originalshareholding proportion shall be included in the investment income of the current period of loss ofcontrol. Other comprehensive income related to the equity investment of the original subsidiary, in theevent of loss of control, the accounting treatment is performed on the same basis as the direct disposalof the relevant assets or liabilities by the Purchased (i.e. converted to current investment income,except for changes resulting from the re-measurement of the net liabilities or net assets of the DefinedBenefit Plan in the original subsidiary). Thereafter, the residual equity shall be subsequently measuredin accordance with the relevant provisions of Accounting Standards for Business EnterprisesNo.2-Long-term Equity Investment or Accounting Standards for Business EnterprisesNo.22-Recognition and Measurement of Financial Instruments, as detailed in Note Ⅲ, 13-Long-termEquity Investment or Note Ⅲ, 9-Financial Instruments.
If the Company disposes of the equity investment in subsidiaries step by step until it loses controlthrough multiple transactions. It is necessary to distinguish whether the transactions that dispose of theequity investment in subsidiaries until it loses control belong to a package deal or not. The terms,conditions and economic impact of the transactions for the disposal of equity investments in
subsidiaries are in accordance with one or more of the following circumstances and generally indicatethat multiple transactions should be accounted for as a package deal: ① These transactions wereentered into simultaneously or taking into account each other's influence; ② Only when thesetransactions are taken together can a complete business result be achieved; ③ The occurrence of onetransaction depends on the occurrence of at least one other transaction; ④ It is not economical toconsider a transaction alone, but it is economical to consider it in conjunction with other transactions.For transactions that are not part of the package deal, each transaction shall be accounted for inaccordance with the principles applicable to the "partial disposal of long-term equity investments insubsidiaries without loss of control" (as detailed in 13 of Note Ⅲ) and the "loss of control over existingsubsidiaries as a result of the disposal of part of the equity investments or other reasons" (as detailed inthe preceding paragraph), as appropriate. If the transactions involving the disposal of equityinvestments in subsidiaries until the loss of control belong to a package deal, the transactions shall beaccounted for as a transaction involving the disposal of subsidiaries and the loss of control; However,the difference between each disposal price and the share of the subsidiary's net assets corresponding tothe disposal investment prior to the loss of control is recognized in the consolidated financialstatements as other consolidated gains and transferred to the profit or loss for the current period of lossof control in the event of loss of control.
6. Classification of Joint Venture Arrangements and Accounting Treatment of JointOperationA joint venture arrangement is an arrangement under the joint control of two or more participants.The Company divides the joint venture arrangement into joint operation and joint venture inaccordance with the rights and obligations it enjoys in the joint venture arrangement. A joint operationis a joint arrangement whereby the parties that have joint control of the arrangement have rights to theassets, and obligations for the liabilities, relating to the arrangement. A joint venture is a type of jointarrangement whereby the parties that have joint control of the arrangement have rights to the net assetsof the joint venture.
The Company's investment in the joint venture is accounted for using the equity method, and shallbe treated in accordance with the accounting policy described in Note Ⅲ, 13 "Long-term EquityInvestment Accounted by the Equity Method".
The Company, as a joint venture party, recognizes the assets and liabilities held and assumed bythe Company separately, and recognizes the assets and liabilities jointly held and assumed by theCompany according to the shares of the Company; recognizes the revenue generated from the sale ofthe share of joint operating output enjoyed by the Company; recognizes revenue generated from thesale of output from joint operations on the basis of the Company's share; confirms the expenses
incurred by the Company individually and the expenses incurred by the joint operation according tothe shares of the Company.When the Company invests or sells assets as a joint venture (such assets do not constitute business,the same below), or purchases assets from the joint venture, the Company recognizes only the portionof the profits and losses attributable to the other participants in the joint venture that arises from thetransaction prior to the sale of such assets to a third party. Where such assets are impaired inaccordance with the provisions of Accounting Standards for Business Enterprises No.8-Impairment ofAssets, the Company shall fully recognize such losses in the case where the assets are cast or sold bythe Company to joint operations; For the assets purchased by the Company from the joint operation,the Company recognizes the losses according to the shares it assumes.
7. Determining Standards for Cash and Cash Equivalent
Cash and cash equivalents of the Company include cash on hand, deposits that can be readilywithdrawn on demand. Cash equivalents are investments held by the Company with a short term(usually maturing within three months from the date of purchase), high liquidity, readily convertible toknown amounts of cash and which are subject to an insignificant risk of changes in value.
8. Foreign Currency Business and Translation of Foreign Currency Statements
(1) Translation method for foreign currency transaction
At the time of initial confirmation, the foreign currency transactions occurring in the Companyshall be converted into the bookkeeping functional currency amount at the spot exchange rate on thetrading day, but the foreign currency exchange business or transactions involving foreign currencyexchange occurring in the Company shall be converted into the bookkeeping functional currencyamount at the actual exchange rate.
(2) Translation method for foreign currency monetary items and foreign currency non-monetaryitem
On the balance sheet date, the foreign currency monetary items are converted at the spot exchangerate on the balance sheet date, and the exchange difference arising therefrom shall be: ① Theexchange difference arising from the special foreign currency borrowings related to the acquisition andconstruction of assets eligible for capitalization shall be handled in accordance with the principle ofcapitalization of borrowing costs; ② The exchange difference of the hedging instruments used foreffective hedging of the net investment in overseas operations (the difference is included in othercomprehensive income, and is not recognized as current profit or loss until the net investment isdisposed of); ③ Except for the amortized cost, the exchange differences arising from the changes inthe book balance of the available-for-sale monetary items in foreign currencies shall be included in the
other comprehensive income, and shall be included in the profits and losses of the current period.Where the preparation of the consolidated financial statements involves overseas operations, ifthere are foreign currency monetary items constituting net investment in overseas operations, theexchange differences arising from exchange rate changes shall be included in other comprehensiveincome; When disposing of overseas operations, the profits and losses shall be transferred to thecurrent disposal period.Non-monetary items in foreign currencies measured at historical cost shall still be measured at thebookkeeping amount in functional currency translated at the spot exchange rate on the transaction date.For non-monetary items in foreign currencies measured at fair value, the spot exchange rate at the dateof fair value determination shall be adopted for conversion. The difference between the convertedamount in functional currency and the amount in original functional currency shall be treated as thechange in fair value (including the change in exchange rate), and shall be recorded into the profits andlosses of the current period or recognized as other comprehensive income.
(3) Translation method for financial statements in foreign currencies
Where the preparation of the consolidated financial statements involves overseas operations, ifthere are foreign currency monetary items constituting net investment in overseas operations, theexchange differences arising from exchange rate changes shall be as "foreign currency reportconversion difference" and be confirmed as other comprehensive income; When disposing ofoverseas operations, the profits and losses shall be transferred to the current disposal period.The foreign currency financial statements of overseas operations shall be converted into RMBstatements in the following ways: the assets and liabilities in the balance sheet shall be converted atthe spot exchange rate on the balance sheet date; Except for "undistributed profits", other items ofshareholders' equity shall be converted at the spot exchange rate at the time of occurrence. Theincome and expense items in the profit statement shall be converted at the average exchange rate ofthe current period on the date of transaction. The undistributed profit at the beginning of the periodshall be the undistributed profit at the end of the period converted from the previous year; Theundistributed profits at the end of the year shall be calculated and listed according to the convertedprofits distribution items; The difference between the converted asset items and the total amount ofthe liability items and shareholders' equity items shall be recognized as other comprehensive incomeas the translation difference in the foreign currency statements. In case of disposal of overseasoperations and loss of control, the balance in translation of the foreign currency statements related tothe overseas operations as shown below in the shareholders' equity items in the balance sheet shall betransferred to the profits and losses of the disposal period in whole or in proportion to the disposal ofthe overseas operations.
Cash flows in foreign currencies and cash flows of overseas subsidiaries shall be converted atthe average exchange rate of the current period on the date of occurrence of the cash flows. Theeffect of exchange rate changes on cash shall be presented separately in the statement of cash flowsas an reconciling item.
Opening amounts and prior-period actual amounts shall be shown on the basis of amountstranslated from the prior-period financial statements.
When disposing of all the owner's equity of the Company's overseas operations or losing thecontrol over overseas operations due to the disposal of part of the equity investment or for otherreasons, if the following items of shareholders' equity in the balance sheet are shown below, thebalance in translation of the foreign currency statement attributable to the owner's equity of theparent company related to the overseas operation shall be transferred to the profits and losses of thecurrent disposal period.
In the event that the proportion of overseas business interests is reduced due to the disposal ofpart of the equity investment or for other reasons, but the control over overseas business operations isnot lost, the balance in the translation of the foreign currency statements related to the disposal ofpart of overseas business operations shall be attributed to minority shareholders' interests and shallnot be transferred to the profits and losses of the current period. When disposing of part of the equityof an overseas operation as an associated enterprise or a joint venture, the balance of the translationof the foreign currency statements related to the overseas operation shall be transferred into theprofits and losses of the current disposal period in the proportion of the overseas operation disposedof.
9. Financial instruments
Financial instruments are the contracts that form the financial assets of one entity, and at thesame time form the financial liabilities or equity instruments of other entities.
(1) Classification, confirmation and measurement of financial assets
According to the business mode of managing financial assets and the contractual cash flowcharacteristics of financial assets, the Company divides financial assets into: Financial assetsmeasured at amortized cost. Financial assets measured at fair value with changes included in othercomprehensive income. Financial assets that are measured at fair value and whose movements areincluded in the current profits and losses.
Financial assets are measured at fair value at initial recognition. For financial assets measured atfair value and whose changes are included in current profits and losses, relevant transaction costs aredirectly included in current profits and losses. For other types of financial assets, relevant transactioncosts are included in the initial recognition amount. Accounts receivable or notes receivable arising
from the sale of products or the provision of labor services that do not contain or take into accountsignificant financing components shall be initially recognized by the Company in accordance withthe amount of consideration that the Company is expected to be entitled to receive.
① Financial assets measured at amortized cost
The Group measures financial assets at amortised cost if both of the following conditions aremet : the financial asset is held within a business model with the objective to hold financial assets inorder to collect contractual cash flows; the contractual terms of the financial asset give rise onspecified dates to cash flows that are solely payments of principal and interest on the principalamount outstanding, that is, the cash flow generated on a specific date is only the payment ofprincipal and interest based on the unpaid principal amount. For such financial assets, the Companyadopts the effective interest rate method and carries out subsequent measurement according toamortized cost. The profits or losses arising from amortization or impairment are included into thecurrent profits and losses.
② Financial assets measured at fair value with changes included in other comprehensiveincome
The Group measures financial assets at fair value through other comprehensive income if bothof the following conditions are met: the financial asset is held within a business model with theobjective of both holding to collect contractual cash flows and selling; the contractual terms of thefinancial asset give rise on specified dates to cash flows that are solely payments of principal andinterest on the principal amount outstanding. Interest income of such financial assets is recognisedbased on effective interest method. The Company measures these financial assets at fair value andtheir changes are included in other comprehensive income, but impairment loss or gain, exchangegain or loss and interest income calculated according to the effective interest rate method areincluded into the current profit and loss.
In addition, the Company designates some non tradable equity instrument investments asfinancial assets measured at fair value with changes included in other comprehensive income. TheCompany shall record the relevant dividend income of such financial assets into the current profitsand losses, and the change of fair value into other comprehensive income. When the financial asset isderecognized, the accumulated gains or losses previously included in other comprehensive incomewill be transferred from other comprehensive income to retained income and will not be included incurrent profits and losses.
③ Fair value through Profit and Loss Financial assets
The Company classifies the above financial assets measured at amortized cost and financial
assets measured at fair value with changes included in other comprehensive income into financialassets measured at fair value with changes included in current profits and losses. In addition, duringinitial recognition, in order to eliminate or significantly reduce accounting mismatch, the Companydesignated part of financial assets as financial assets measured at fair value with changes included incurrent profit and loss. For such financial assets, the Company adopts fair value for subsequentmeasurement, and the changes in fair value are included into the current profit and loss.
(2) Classification, recognition and measurement of financial liabilitiesFinancial liabilities upon initial recognition are classified as financial liabilities which aremeasured at fair value and whose changes are included in current profits and losses and otherfinancial liabilities. For the financial liabilities measured at fair value with the changes included intothe current profits and losses, the relevant transaction costs are directly included into the currentprofits and losses, and the relevant transaction costs of other financial liabilities are included in theinitial recognition amount.
① Financial liabilities at fair value through profit or loss
Financial liabilities measured at fair value with changes included in current profits and losses,which include transactional financial liabilities (including derivatives belonging to financialliabilities) and financial liabilities designated to be measured at fair value with changes included incurrent profits and losses at initial recognition.Trading financial liabilities (including derivatives belonging to financial liabilities) aresubsequently measured according to their fair values. Except for those related to hedge accounting,changes in fair values are included in current profits and losses.Financial liabilities designated to be measured at fair value with changes included in currentprofits and losses. Changes in the fair value of this liability caused by changes in the Company's owncredit risk are included in other comprehensive income. When the liability is derecognized, theaccumulated change in fair value caused by changes in its own credit risk included in othercomprehensive income is transferred to retained earnings. Changes in fair value are accounted intocurrent profits and losses. If the above-mentioned treatment of the impact of changes in the creditrisk of these financial liabilities will cause or expand accounting mismatch in profits and losses, theCompany will include all profits or losses of the financial liabilities (including the impact amount ofchanges in the credit risk of the enterprise itself) into the current profits and losses.
② Other financial liabilities
Except for financial liabilities and financial guarantee contracts formed by the transfer offinancial assets that do not meet the conditions for termination of recognition or continue to beinvolved in the transferred financial assets, other financial liabilities are classified as financialliabilities measured at amortized cost and subsequently measured at amortized cost. Gains or losses
arising from termination of recognition or amortization are included in current profits and losses.
(3) Basis of Confirmation and Calculation of financial instruments
Financial assets shall be derecognized if they meet one of the following conditions: ① Thetermination of the contractual right to receive cash flow from the financial asset. ② The financialasset has been transferred, and almost all risks and rewards related to the ownership of the financialasset have been transferred to the transferee. ③ The financial asset has been transferred. Althoughthe enterprise has neither transferred nor retained almost all risks and rewards in the ownership of thefinancial asset, it has given up its control over the financial asset.
If the enterprise neither transfers nor retains almost all the risks and rewards of the ownership ofthe financial assets, and does not give up the control over the financial assets, the relevant financialassets shall be recognized according to the extent of continuous involvement in the transferredfinancial assets, and the relevant liabilities shall be recognized accordingly. The degree of continuousinvolvement in the transferred financial assets refers to the risk level faced by the enterprise due tothe change in the value of the financial assets.
If the overall transfer of financial assets meets the conditions for termination of recognition, thedifference between the book value of the transferred financial assets and the sum of the considerationreceived due to the transfer and the accumulated amount of changes in fair value originally includedin other comprehensive income shall be included into the current profits and losses.
If the partial transfer of financial assets meets the conditions for termination of recognition, thebook value of the transferred financial assets shall be apportioned according to its relative fair valuebetween the derecognized part and the non derecognized part, and the difference between the sum ofthe consideration received due to the transfer and the accumulated change in fair value originallyincluded in other comprehensive income that shall be apportioned to the derecognized part and theallocated aforesaid book amount shall be included into the current profits and losses.
For financial assets sold by the Company with recourse, or for endorsement and transfer of heldfinancial assets, it is necessary to determine whether almost all risks and rewards in the ownership ofthe financial assets have been transferred. If almost all risks and rewards in the ownership of thefinancial asset have been transferred to the transferee, the recognition of the financial asset shall beterminated. If almost all risks and rewards on the ownership of a financial asset are retained, therecognition of the financial asset shall not be terminated. If almost all risks and rewards related to theownership of financial assets have not been transferred or retained, it shall continue to judge whetherthe enterprise retains control over the assets and carry out accounting treatment according to theprinciples mentioned in the preceding paragraphs.
(4) Termination of recognition of financial liabilities
If the current obligation of the financial liability (or part thereof) has been relieved, theCompany terminates the recognition of the financial liability (or part thereof). The Company (theborrower) and the lender sign an agreement to replace the original financial liabilities by assumingnew financial liabilities. If the contract terms of the new financial liabilities and the original financialliabilities are substantially different, the original financial liabilities shall be derecognized and a newfinancial liability shall be recognized at the same time. If the Company makes any substantialmodification to the contract terms of the original financial liability (or part thereof), the originalfinancial liability shall be derecognized and a new financial liability shall be recognized inaccordance with the modified terms.
If financial liabilities (or part thereof) are derecognized, the Company shall include thedifference between its book value and the consideration paid (including transferred non-cash assetsor liabilities assumed) into the current profits and losses.
(5) Offset of financial assets and financial liabilities
When the Company has the legal right to offset the recognized amount of financial assets andfinancial liabilities, and such legal right is currently enforceable, and the Company plans to settle thefinancial assets on a net basis or realize the financial assets and settle the financial liabilities at thesame time, the financial assets and financial liabilities are listed in the balance sheet at a net amountafter mutual offset. In addition, financial assets and financial liabilities shall be listed separately inthe balance sheet and shall not be offset against each other.
(6) The fair value determination method of financial assets and financial liabilities
Fair value refers to the price that market participants can receive from selling an asset or pay totransfer a liability in an orderly transaction on the measurement date. Where there is an active marketfor financial instruments, the Company adopts quotations in the active market to determine their fairvalues. Quoted price in active market refers to the price easily obtained from exchanges, brokers,industry associations, pricing service agencies, etc. on a regular basis, and represents the price ofmarket transactions actually occurred in fair trading. If there is no active market for financialinstruments, the Company uses evaluation techniques to determine their fair values. Evaluationtechniques include reference to prices used in recent market transactions by parties familiar with thesituation and willing to trade, reference to current fair values of other financial instruments that aresubstantially the same, discounting cash flow technique, option pricing model, etc. In valuation, theCompany adopts valuation techniques that are applicable under current circumstances and aresupported by sufficient available data and other information, selects input values that are consistentwith the characteristics of assets or liabilities considered by market participants in transactionsrelated to assets or liabilities, and gives priority to the use of relevant observable input values as
much as possible. If the relevant observable input value cannot be obtained or it is not impracticableto obtain it, the non-input value shall be used.
(7) Equity instruments
Equity instruments refer to contracts that can prove ownership of the Company's residual equityin assets after deducting all liabilities. The issuance (including refinancing), repurchase, sale orcancellation of equity instruments by the Company are treated as changes in equity, and transactioncosts related to equity transactions are deducted from equity. The Company does not recognizechanges in the fair value of equity instruments.Dividends (including "interest" generated by instruments classified as equity instruments)distributed by the Company's equity instruments during their existence shall be treated as profitdistribution.
10. Impairment of financial assets
The financial assets of the Company that need to confirm the impairment loss are financialassets measured at amortized cost and debt instrument investment measured at fair value withchanges included in other comprehensive income, mainly including notes receivable, accountsreceivable, other receivables, debt investment, other debt investment, long-term receivables, etc. Inaddition, for some financial guarantee contracts, impairment reserves and credit impairment lossesare also accrued in accordance with the accounting policies described in this part.
(1) Recognition method of impairment provision
On the basis of expected credit losses, the Company sets aside impairment reserves andrecognizes credit impairment losses for the above items according to the applicable expected creditloss measurement method (general method or simplified method).
Credit loss refers to the difference between all contractual cash flows receivable according tothe contract and all cash flows expected to be collected by the Company discounted according to theoriginal actual interest rate, i.e. the present value of all cash shortages. Among them, for the financialassets that have been purchased or incurred credit impairment, the Company discounts themaccording to the actual interest rate adjusted by credit.
The general method of measuring expected credit loss refers to the Company's assessment ofwhether the credit risk of financial assets has increased significantly since the initial recognition oneach balance sheet date. If the credit risk has increased significantly since the initial recognition, theCompany will measure the loss reserve by an amount equivalent to the expected credit loss duringthe entire period. If the credit risk has not increased significantly since the initial recognition, theCompany will measure the loss reserve according to the amount equivalent to the expected credit
loss in the next 12 months. In assessing the expected credit loss, the Company takes into account allreasonable and evidence-based information, including forward-looking information.
For financial instruments with low credit risk on the balance sheet date, the Company measuresthe loss reserve based on the expected credit loss amount within the next 12 months or the entireduration according to whether the credit risk has increased significantly since the initial recognition.
(2) Criteria for judging whether credit risk has increased significantly since initial recognition
If the default probability of a certain financial asset in the expected duration determined at thebalance sheet date is significantly higher than the default probability in the expected durationdetermined at the time of initial recognition, it indicates that the credit risk of the financial asset issignificantly increased. Except for special circumstances, the Company uses the change of defaultrisk in the next 12 months as a reasonable estimate of the change of default risk in the entire durationto determine whether the credit risk has increased significantly since the initial recognition.
Generally, if the overdue period is more than 90 days, the Company will consider that the creditrisk of the financial instrument has increased significantly, unless there is conclusive evidence thatthe credit risk of the financial instrument has not increased significantly since the initial recognition.
The Company will consider the following factors when evaluating whether the credit risk hasincreased significantly
1） Whether there is any significant change in the actual or expected operating results of thedebtor;
2） Whether there is any significant adverse change in the regulatory, economic ortechnological environment of the debtor;
3） Whether there is any significant change in the value of the collateral or the quality ofthe guarantee or credit enhancement provided by the third party, which are expected to reduce theeconomic motivation of the debtor's repayment according to the time limit stipulated in the contractor affect the probability of default;
4） Whether there is any significant change in the expected performance and repaymentbehavior of the debtor;
5） Whether there is any significant change in the Company's credit management methodsfor financial instruments, etc.
On the balance sheet date, if the Company judges that the financial instrument has only lowcredit risk, the Company assumes that the credit risk of the financial instrument has not increasedsignificantly since the initial recognition. If the default risk of a financial instrument is low, theborrower's ability to perform its contractual cash flow obligations in a short period of time is strong,and even if there are adverse changes in the economic situation and operating environment for a longperiod of time, it may not necessarily reduce the borrower's ability to perform its contractual cashobligations, then the financial instrument is considered to have low credit risk.
(3) Judgment criteria for financial assets with credit impairment:
When one or more events have an adverse impact on the expected future cash flow of afinancial asset, the financial asset becomes a financial asset with credit impairment. The evidence ofcredit impairment of financial assets includes the following observable information:
1） The issuer or debtor has major financial difficulties;
2） The debtor violates the contract, such as default or overdue payment of interest orprincipal, etc.;
3） The creditor gives concessions that the debtor will not make under any othercircumstances due to economic or contractual considerations related to the debtor's financialdifficulties;
4） The debtor is likely to go bankrupt or undergo other financial restructuring;
5） The active market of the financial assets disappears due to the financial difficulties ofthe issuer or the debtor;
6） Purchase or generate a financial asset at a substantial discount, which reflects the factthat credit losses have occurred.
Credit impairment of financial assets may be caused by the combined action of multiple events,but may not be caused by separately identifiable events.
(4) Portfolio approach to evaluate expected credit risk based on portfolio
The Company evaluates credit risks for financial assets with significantly different credit risks,such as: Accounts receivable with related parties. Receivables in dispute with the other party orinvolving litigation or arbitration. Receivables with obvious signs that the debtor is likely to beunable to perform the repayment obligation.
In addition to the financial assets with individual credit risk assessment, the Company dividesthe financial assets into different groups based on the common risk characteristics. The commoncredit risk characteristics adopted by the Company include: Credit risk shall be assessed on the basisof the aging portfolio, the receivables portfolio between the final controlling party and itssubordinate units, the public maintenance fund and house selling fund portfolio deposited in thehousing provident fund management center, the deposit/margin portfolio, and the petty cash ledgerportfolio formed by the employee loan of the unit.
(5) Accounting treatment method for impairment of financial assets
At the end of the period, the Company calculates the estimated credit losses of various financialassets. If the estimated credit losses are greater than the book amount of its current impairmentreserve, the difference is recognized as impairment loss. If it is less than the carrying amount of thecurrent impairment reserve, the difference is recognized as impairment gain.
(6) Methods for determining the credit loss of various financial assets
①Notes receivable
The Company measures the loss reserve for bills receivable according to the expected creditloss amount equivalent to the entire duration. Based on the credit risk characteristics of billsreceivable, they are divided into different portfolios:
| Item | Basis for determining portfolio |
| Bank acceptance bills | The acceptor is a bank with less credit risk |
| Commercial acceptance bill | According to the acceptor's credit risk classification, it should be the same as the "receivable" portfolio classification. |
③ Accounts receivable and other receivables
For receivables that do not contain significant financing components, the Company measuresthe loss reserve according to the expected credit loss amount equivalent to the entire duration.
For receivables that contain significant financing components, the Company measures the lossreserve based on whether the credit risk has increased significantly since the initial recognition, usingthe amount of expected credit loss within the next 12 months or the entire duration.
According to whether the credit risk of other receivables has increased significantly since theinitial recognition, the Company measures impairment loss with an amount equivalent to theexpected credit loss within the next 12 months or the entire duration.
In addition to the accounts receivable and other receivables that individually assess credit risk,they are divided into different portfolios based on their credit risk characteristics:
| Item | Basis for determining portfolio |
| Item | Basis for determining portfolio |
| Portfolio 1 | Aging portfolio |
| Portfolio 2 | A portfolio of receivables between the ultimate controller and its subordinate units |
| Portfolio 3 | The portfolio of public maintenance funds and house sales funds deposited in the housing provident fund management center |
| Portfolio 4 | Deposit/margin portfolio |
| Portfolio 5 | The portfolio of reserve fund ledger formed by the Company's staff loan |
The accrual method of bad debt reserves for different portfolios:
| Item | Accrual method |
| Aging portfolio | According to the accrual proportion corresponding to the aging period |
| Portfolio of receivables between the ultimate controlling party and its subordinate units | Referring to the historical credit loss experience, combined with the current situation and the forecast of future economic conditions, the expected credit loss is calculated thr-ough the default risk exposure and the expected credit loss rate within the next 12 months or the entire duration, and the expected credit loss rate of the portfolio is zero. |
| The portfolio of public maintenance funds and house sales funds deposited into the MPF Management Center | |
| Deposit/margin portfolio | |
| The portfolio of reserve fund ledger formed by the Company's staff loan. |
a. In portfolio, the portfolio method of withdrawing bad debt reserves by aging analysis
| Aging | Expected loss rate of notes receivable (%) | Expected loss rate of accounts receivable (%) | Expected loss rate of other receivables (%) |
| Within 1 year (including 1 year, the same below) | |||
| Among them: Within the credit period (within 3 months) | 0 | 0 | 0 |
| Credit period~1 year | 2 | 2 | 2 |
| 1-2 years | 5 | 5 | 5 |
| 2-3years | 20 | 20 | 20 |
| 3-4years | 50 | 50 | 50 |
| 4-5years | 80 | 80 | 80 |
| More than 5 years | 100 | 100 | 100 |
b. In the portfolio, the description of the accrual method for accrual of bad debt reserves byother methods is given.
| Aging | Expected loss rate of notes receivable (%) | Expected loss rate of accounts receivable (%) | Expected loss rate of other receivables (%) |
| Accounts receivable between the final controlling party and its subordinate | 0 | 0 | 0 |
| Public maintenance fund and house sale fund deposited into MPF Management Center | 0 | 0 | 0 |
| Deposit/margin | 0 | 0 | 0 |
| The reserve fund ledger formed by the Company's staff loan. | 0 | 0 | 0 |
11. Inventory
(1) Classification of inventory
Inventories mainly include raw materials, work in progress, finished goods, in transit materialsinventory goods, reserve tanker storage commissioned processing, and manufacturing consignment,etc..
(2) Valuation method for obtaining and issuing inventory
Inventories are initially measured at cost. Inventory costs include purchase costs, processingcosts and other expenditures. The actual cost of inventories upon delivery is calculated using theweighted average method.
(3) Confirmation of net realizable value of inventories and method of accrual of falling pricereserve
Net Realizable Value refers to the amount of estimated selling price of inventories minus theestimated cost till completion, estimated expenses for selling activity and related taxes and fees indaily activities. When determining the net realizable value of inventories, solid evidence obtainedshall be the basis, and the purpose of holding the inventories and the impact of events after thebalance sheet date shall be considered.
On the balance sheet date, inventories shall be measured at lower of cost and net realizablevalue. When the net realizable value is lower than the cost, the provision for inventory devaluationshall be accrued. The provision for inventory devaluation shall be accrued based on the differencebetween the cost of a single inventory item and its net realizable value. The provision for inventorydevaluation of a large number of inventories with low unit prices shall be based on the type ofinventory; for inventories related to the product range produced and sold in same region, having thesame or similar end use or purpose, and difficult to be separated from other items for measurement,their provision for inventory devaluation can be combined and accrued.
After the provision for inventory devaluation is accrued, if the factors cause the previouswritten-down inventory value have disappeared, and the situation results in the fact that the netrealizable value of the inventories higher than the book value, the amount of the provision forinventory devaluation that has been accrued shall be reversed and included in the current periodprofit or loss.
(4) The Company adopts perpetual inventory system as its inventory system.
(5) Amortization method of low-value consumables and packaging materials
Low-value consumables are amortized by one-off amortization method when they are received;packaging materials are amortized by one-off amortization method when they are received.
12. Held-for-sale assets and disposal group
A non-current asset or disposal group is classified as held for sale when its carrying amount willbe recovered principally through a sale transaction rather than through continuous use. The followingconditions need to be simultaneously met to be classified as held for sale: a non-current asset orto-be-disposed portfolio can be sold immediately under the current conditions based on the practiceof selling such asset or to-be-disposed portfolio in similar transactions; the Company has alreadydecided on the sale plan and obtained confirmed purchase commitment; the sale is scheduled to becompleted within one year. Among them, a Disposal Portfolio refers to a group of assets that will bedisposed of as a whole through sale or other approaches in a transaction, and the liabilities directlyassociated with these assets transferred along with the assets in transaction. If the portfolio of assetsor group of portfolios of assets is allocated goodwill acquired in business merger in accordance withAccounting Standards for Business Enterprises No. 8 - Asset Impairment, the Disposal Portfolio shallinclude the goodwill allocated to it.
In the event that the book value of a non-current asset or to-be-disposed portfolio that has beendesignated as held-for-sale category is higher than the net amount of fair value less sales expenseswhen the non-current asset or to-be-disposed portfolio is initially measured or measured on thebalance sheet date, the book value shall be to the net amount of fair value minus sales expenses, andthe written-down amount shall be recognized as asset impairment loss and included in current periodprofit or loss. The provision for impairment loss of the held-for-sale asset shall be accrued. For aDisposal Portfolio, the confirmed impairment loss shall deduct the book value of the goodwill in theDisposal Portfolio, then deduct the book value of the non-current assets determined by themeasurement on a pro-rata basis in accordance with the applicable Accounting Standards forBusiness Enterprises No. 42 held-for-sale non-current assets, Disposal Portfolio and Termination ofOperations (hereinafter referred to as the “Guide for Held-For-Sale”). In the event of an increase of
the book value of the held-for-sale Disposal Portfolio minus sales expenses on the subsequent thebalance sheet date, the amount previously written down shall be recovered and be reversed within themount of the asset impairment loss recognized in the non-current assets measured by themeasurement “Guide for Held-For-Sale” after being classified as held for sale asset, the reversalamount shall be included in the current period profit or loss, and the book value of all non-currentassets (except for goodwill) determined by the measurement on a pro-rata basis in accordance withthe applicable “Guide for Held-For-Sale” shall be increased on a pro-rata basis. The book value ofthe goodwill that has been deducted and the impairment loss of the assets recognized before theclassification of the held-for-sale non-current assets in accordance with the applicable “Guide forHeld-For-Sale” shall not be reversed.In terms of the held-for-sale non-current assets or non-current assets in Disposal Portfolio, thereis no accrual or amortization for depreciation, and the interest from and other expenses from theliabilities in held-for-sale Disposal Portfolio shall still be recognized.
When a non-current asset or Disposal Portfolio no longer meets the conditions forHeld-For-Sale category, non-current asset or Disposal Portfolio will no longer be classified asHeld-For-Sale category by the Company or the non-current asset will be removed from theHeld-For-Sale Disposal Portfolio, and be measured based on one of the following two values,whichever is lower: (1) The book value before being classified as held-for-sale category adjustedbased on the depreciation, amortization or impairment that should have be confirmed if it is notclassified as held-for-sale category; (2) recoverable amount.
13. Long-term equity investment
The long-term equity investment refers to in this part refers to the long-term equity investmentthat the Company has control, joint control or significant influence on the invested entity. Thelong-term equity investment of the Company that does not have control, joint control or significantimpact on the investee shall be accounted as a financial asset measured at fair value with its changesincluded into the current profits and losses. Among them, if it is non-transactional, the Company maychoose to designate it as a financial asset measured at fair value and its changes are included in theaccounting of other comprehensive income at the time of initial recognition. For details of itsaccounting policies, please refer to Note Ⅲ, 9 “Financial Instruments".
Joint control refers to the control that the Company shares with other party/parties for anarrangement in accordance with relevant agreements, and relevant activities of the arrangement canonly be decided based on the consensus of all parties sharing the control rights before making adecision. Significant Influence refers to power of the Company to participate in the decision-makingof the financial and operating policies of the investee, but the Company cannot control or jointly
control the development of these policies with other parties.
(1) Determination of investment cost
For a long-term equity investment obtained from a combination of businesses under the samecontrol, the apportioned share of the book value in the final controller's consolidated financialstatements on the combination date in accordance with the shareholders' equity shall be the initialinvestment cost of the long-term equity investment. The capital reserve shall be adjusted subject tothe difference between the initial investment cost of the long-term equity investment and the cashpaid, the non-cash assets transferred, and the book value of the debts assumed; if the capital reserveis insufficient for offsetting, the retained earnings shall be adjusted. Where the equity securities areissued as merger consideration, the apportioned share of the book value in the final controller'sconsolidated financial statements on the combination date in accordance with the shareholders'equity shall be the initial investment cost of the long-term equity investment, and the total par valueof the issued shares is taken as the share capital. The capital reserve shall be adjusted subject to thedifference between the initial investment cost of the long-term equity investment and the total parvalue of the shares issued; if the capital reserve is insufficient for offsetting, the retained earningsshall be adjusted. Where the equity of combined parties under the same control is obtained throughmultiple transactions and a business combination under the same control is formed finally, it shall betreated differentially based on whether it is a “package deal”: if it belongs to a “package deal”, alltransactions will be treated as a transaction that obtains control. If it is not a “package deal”, theapportioned share of the book value in the final controller's consolidated financial statements on thecombination date in accordance with the shareholders' equity shall be the initial investment cost ofthe long-term equity investment. The capital reserve shall be adjusted subject to the differencebetween the initial investment cost of the long-term equity investment and the sum of the book valueof long-term equity investment before combination date and the book value of the new considerationfor the new share on the combination date. If the capital reserve is insufficient for offsetting, theretained earnings shall be adjusted. The equity investments that are held prior to the combinationdate and are recognized with equity recognized or as available-for-sale financial asset as othercomprehensive income will not be given accounting treatment for the moment.For a long-term equity investment obtained from a combination of businesses not under thesame control, the initial investment cost of the long-term equity investment shall be based on thecombination cost on the purchase date. The combination cost includes the assets paid by purchaser,the liabilities incurred or assumed, and the sum of the fair value of issued equity securities. Wherethe equity of combined parties not under the same control is obtained through multiple transactionsand a business combination under the same control is formed finally, it shall be treated differentially
based on whether it is a “package deal”: if it belongs to a “package deal”, all transactions will betreated as a transaction that obtains control. If it is not a “package deal”, the initial investment cost ofthe long-term equity investment calculated by the cost method shall be calculated based on the sumof the book value of the equity investment in the original holder and the new investment cost. Theoriginal share holding that measured using equity method, the relevant other comprehensive incomedoes temporarily not conduct accounting treatment.Intermediary expenses such as for auditing, legal services, assessment and other relatedexpenses incurred by a combining party or a purchaser for business combination shall be recognizedin current period profit or loss when incurred.The equity investments other than formed by business combination shall be initially measuredat cost. The cost will be determined based on the following amount according to different methods ofthe acquisition of long-term equity investment: the purchase price in cash actually paid by theCompany; the fair value of the equity securities issued by the Company, the value agreed in relevantinvestment contract or agreement; the fair value or original book value of the assets exchanged innon-monetary asset exchange transaction; the fair value of the long-term equity investment itself.Any expenses, taxes and other necessary expenses directly related to the acquisition of long-termequity investments shall also be included in the cost of investment. The cost of long-term equityinvestment for the additional investment that can exert significant influence on investee orimplement joint control but does not constitute control shall be the sum of the fair value of theoriginally held equity investment recognized in accordance with the Accounting Standards forBusiness Enterprises No.. 22 – Recognition and Measurement of Financial Instruments and the costfor new investment.
(2) Follow-up measurement and confirmation methods for profit and lossThe Equity Method shall be used to account for long-term equity investments that have jointcontrol over the invested entity (except for those constituting joint operators) or have significantimpact on the invested entity. In addition, the company's financial statements use the Cost Method toaccount for long-term equity investments, which can control the long-term equity investment of theinvestee.
a. Long-term equity investment based on Cost MethodWhen accounting with Cost Method, long-term equity investment is priced at the initialinvestment cost, and the cost of the long-term equity investment is adjusted by adding or recoveringthe investment. Except for the actual payment at the time of obtaining investment or the cashdividends or profits included in the consideration but not yet issued, the current investment incomeshall be recognized according to the cash dividends or profits declared by the investee.
b. Long-term equity investment accounted for by Equity MethodWhen accounting with Equity Method, if the initial investment cost of a long-term equityinvestment is greater than the fair value share of the identifiable net assets of the investee wheninvesting, and the initial investment cost of the long-term equity investment shall not be adjusted; ifthe initial investment cost is less than the fair value share of the identifiable net assets of the investeewhen investing, the difference shall be included in the current profit and loss, and the cost of thelong-term equity investment shall be adjustedWhen accounting with Equity Method, the investment income and other comprehensive incomeare recognized separately according to the shares of the net profit or loss and other comprehensiveincome that should be enjoyed or shared, and the book value of the long-term equity investmentshould be adjusted at the same time. The book value of long-term equity investment is reducedaccordingly by calculating the share that should be enjoyed according to the profit or cash dividenddeclared by the investee. The book value of long-term equity investment shall be adjusted andincluded in the capital reserve for other changes in the owner's rights and interests of the investedentity other than the net profit and loss, other comprehensive income and profit distribution. Whenconfirming the share of the net profit and loss of the investee, the net profit of the investee shall beadjusted and confirmed on the basis of the fair value of the identifiable assets of the investee at thetime of investment. If the accounting policies and periods adopted by the invested entity areinconsistent with the Company, the financial statements of the invested entity shall be adjusted inaccordance with the accounting policies and periods of the Company, and the investment income andother comprehensive income shall be confirmed accordingly. For the transactions between theCompany and the associates and joint ventures, the assets invested or sold do not constitute abusiness, and the unrealized gains and losses from internal transactions are offset against the portionof the Company that is attributable to the proportion of the shares, on this basis. investment profitand loss should be confirmed. However, the unrealized internal transaction losses incurred by theCompany and the investee are not included in the impairment losses of the transferred assets. Wherethe assets invested by the Company into a joint venture or an associates constitute a business, if theinvestor obtains long-term equity investment but does not control, the fair value of the investedbusiness shall be deemed as the initial investment cost of the new long-term equity investment, andthe difference between the initial investment cost and the book value of the invested business is fullyrecognized in the current profits and losses. If the assets sold by the Company to a joint venture or anassociate that constitute a business, the difference between the consideration value obtained and thebook value of the business shall be fully recognized in the profits and losses of the current period.When confirming the net loss that incurred by the investee should be shared, the book value of
the long-term equity investment and other long-term equity that substantially constitutes the netinvestment of the investee are reduced to zero. In addition, if the Company has an obligation to bearadditional losses to the investee, the estimated liabilities shall be recognized according to theestimated obligations and included in the current investment losses. If the investee achieves net profitin the following period, the Company shall resume recognizing the share of income after making upfor the unrecognized share of loss.For the long-term equity investment in the joint ventures and associates held by the Companyfor the first time before the implementation of the new accounting standards, if there is a debitbalance of equity investments related to the investment, the current profits and losses shall beaccounted for by the straight-line amortization of the original remaining period.c. Acquisition of Minority EquityIn the preparation of the consolidated financial statements, if the difference between thelong-term equity investment added by purchasing minority shares and the net assets share that shouldbe continuously calculated by the subsidiary company from the purchase date (or the consolidationdate) is calculated according to the proportion of newly added shares, the retained earnings shall beadjusted; and if the capital reserve is insufficient to offset, the retained earnings shall be adjusted.d. Disposal of long-term equity investmentIn the consolidated financial statements, the parent company partially of disposes of thelong-term equity investment of the subsidiary without losing control, the difference of thecorresponding net assets in the subsidiary between the disposal price and the disposal of thelong-term equity investment is included in the shareholders' equity. it shall be treated in accordancewith the relevant accounting policies described in “Notes on the preparation of consolidated financialstatements” in Note Ⅲ.5 .
For the disposal of long-term equity investment in other cases, the difference between the bookvalue of the disposed equity and the actual acquisition price shall be included in the current profitsand losses.
If the long-term equity investment is accounted for by equity method, the remaining equity afterdisposal is still accounted for by equity method, when disposing, the other comprehensive incomewhich were originally included in shareholder's rights and interests shall be accounted for on thesame basis as the assets or liabilities directly disposed of by the investee. The owner's equityrecognized as a result of changes in the owner's equity of the investee other than net profit or loss,other comprehensive income and profit distribution, it should be carried forward to the current profitand loss
For the long-term equity investment accounted by Cost Method, the remaining equity is still
accounted by Cost Method after disposal, other comprehensive income that recognized by equitymethod accounting or financial instrument recognition and measurement criteria accounting beforeobtaining control over the investee shall be accounted for on the same basis as the assets or liabilitiesdirectly disposed of by the investee, and shall be settled to the current profit and loss in proportion.Changes of the net assets of investee in the owner's equity other than net profit or loss, othercomprehensive income and profit distribution 's that recognized by equity method shall be settled tothe current profit and loss in proportion.Where the Company loses control over the investee due to disposal of part of its equityinvestment, when preparing individual financial statements, if the remaining equity after disposal canexercise joint control or exert significant influence on the investee, it shall be accounted for by equitymethod instead, and the remaining equity shall be adjusted by accounting by equity method when itis deemed to be acquired. If the remaining equity after disposal cannot be jointly controlled or exertssignificant influence on the investee, it shall be accounted for according to the relevant provisions ofthe financial instrument recognition and measurement criteria, and the difference between the fairvalue and the book value on the date of loss of control. It is included in the current profit and loss.Before the Company obtains control over the investee, other comprehensive income recognized byequity method accounting or financial instrument recognition and measurement criteria is used todirectly dispose of the relevant assets with the investee, accounting treatment based on the samebasis as the investee directly disposes of related assets or liabilities when the control of the investeeis lost, Accounting is treated on the same basis as the liabilities. Changes in the owner's equity otherthan net profit or loss, other comprehensive income and profit distribution of the investee's net assetsrecognized by the equity method are carried forward to the current profit or loss when the control ofthe investee is lost. Among them, the remaining equity after disposal is accounted for using theequity method. Where the remaining equity after disposal is accounted for by equity method, othercomprehensive income and other owner's equity should be settled by proportion. If the remainingequity is accounted for using financial instrument recognition and measurement standard, all of othercomprehensive income and other shareholder’s equity should be settled.If the Company loses its joint control or significant influence on the investee due to the disposalof part of the equity investment, the remaining equity after disposal shall be accounted for accordingto the financial instrument recognition and measurement criteria, and the difference between the fairvalue and the book value on the date of loss of joint control or significant influence is recognised inthe current profit or loss. The other comprehensive income recognized in the original equityinvestment by the equity method is accounted for on the same basis as the investee's direct disposalof related assets or liabilities when the equity method is terminated, Owner's equity recognized as a
result of changes in other owners' equity other than net profit or loss, other comprehensive incomeand profit distribution of the investee should be transferred to current investment income whenterminating the equity methodThe Company disposes of the equity investment in the subsidiaries step by step throughmultiple transactions until the loss of control. If the above-mentioned transactions are part of apackage transaction, the transactions are treated as a transaction dealing with the equity investmentof the subsidiary and losing control. The difference between the book value of each long-term equityinvestment corresponding to the disposal price and the disposal of the equity before loss of control isfirst recognized as other comprehensive income, and when the control is lost, it is transferred to thecurrent profit and loss of loss of control.14．Investment PropertyInvestment Property refers to property held for the purpose of earning rent or capitalappreciation, or both, including land use rights that have been leased, land use rights that are heldand prepared for transfer after appreciation, and buildings that have been rented. Investment propertyis initially measured at cost. The expenses related to investment property, if the economic benefitsrelated to this asset are highly probable to flow into the company and the cost canbe measuredreliably, then the expense will account for as the cost of investment property. Other expenses areaccounted for in profit and loss when incurred.
The Company adopts the cost model to conduct subsequent measurement of investmentproperty and depreciation or amortization according to the policy consistent with the building or landuse rights.For details of the impairment test method and impairment provision method of property, pleaserefer to Note Ⅲ. 20 “Long-Term Asset Impairment”.When the self-use property or inventory is converted into investment property or investmentproperty is converted into self-use property, the book value before conversion is used as the recordedvalue after conversion.
When the use of investment property is changed to self-use, the investment property isconverted into fixed assets or intangible assets from the date of change. When the use of self-useproperty changes to earn rent or capital appreciation, the fixed assets or intangible assets areconverted into investment property from the date of change. In the case of investment propertymeasured by the cost model when the conversion occurs, the book value before conversion is used asthe entry value after conversion; if it is converted into investment property measured by the fairvalue model, the fair value of the conversion date is used as the entry value after conversion.
When an investment real estate is disposed of, or permanently withdrawn from use and is not
expected to obtain economic benefits from its disposal, the confirmation of the investment real estateshall be terminated. Disposal income from the sale, transfer, retirement or damage of investmentproperties is charged to the current profit and loss after deducting its book value and related taxesand fees.
15. Fixed Assets
(1) Confirmation conditions for fixed assets
Fixed Assets refer to tangible assets held for the purpose of producing goods, providing laborservices, renting or operating management, and having a service life of more than one fiscal year.Fixed assets are recognized only when the economic benefits associated with them are likely to flowinto the Company and their costs can be reliably measured. Fixed assets are initially measured at costand taking into account the impact of projected abandonment costs.
(2) Depreciation methods for various types of fixed assets
Fixed assets are depreciated over their useful lives using the straight-line method from themonth following the scheduled availability. The depreciation period, estimated net residual value rateand annual depreciation rate of each category of fixed assets are as follows:
| Category | Depreciation Method | Depreciation period (Year) | Net esidual rate(%) | Annual depreciation rate (%) |
| Buildings | straight-line depreciation | 8-50 | 5 | 1.90— 11.88 |
| uipElectronic eqment | straight-line depreciation | 3-10 | 4、5 | 9.50—32.00 |
| Machinery equipment | straight-line depreciation | 5-28 | 4、5 | 3.39—19.20 |
| Transport facility | straight-line depreciation | 5-10 | 4、5 | 9.50—19.20 |
| Office equipment | straight-line depreciation | 3-10 | 4、5 | 9.50—32.00 |
| Other equipment | straight-line depreciation | 5-28 | 4、5 | 3.39—19.20 |
The estimated net residual value refers to the expected state after the estimated useful life of thefixed assets has expired and is at the end of its useful life. The amount currently obtained by theCompany from the disposal of the assets after deducting the estimated disposal expenses.
(3) Impairment test method and Impairment provision method for fixed assets
For details of Impairment test method and impairment provision method for fixed assets, pleaserefer to Note Ⅲ. 21 “Long-Term Asset Impairment”.
(4) Recognition basis and valuation method of fixed assets acquired by finance leaseA finance lease is a lease that transfers substantially all the risks and rewards associated withownership of an asset, and its ownership may or may not be transferred. If it is reasonable todetermine the ownership of the leased asset at the expiration of the lease term, the depreciation shallbe calculated within the useful life of the leased asset; If it is not reasonable to determine theownership of the leased asset at the expiration of the lease term, depreciation shall be calculatedwithin a relatively short period of the lease term and the service life of the leased assets.
(5) Others
The subsequent expenses related to fixed assets, if the economic benefits related to the fixedassets are likely to flow in and their costs can be reliably measured, are included in the cost of fixedassets and the book value of the replaced part should be terminated. The subsequent expendituresother than mentioned as above are recognized in profit or loss in the period in which they areincurred.The fixed asset is derecognized when the fixed asset is in disposal or is not expected to generateeconomic benefits by using or disposal. The difference between the disposal income from the sale,transfer, retirement or damage of the fixed assets less the carrying amount and related taxes isrecognized in profit or loss for the current period.The Company reviews the useful life, estimated net residual value and depreciation method offixed assets at least at the end of the year, and changes as an accounting estimate if changes occur.
16. Construction in progress
The cost of construction in progress is determined based on actual project expenditure,including various project expenditures incurred during the construction period, capitalized borrowingcosts before the project reaches the expected usable status, and other related expenses. Constructionin progress is carried forward to fixed assets when it is ready for its intended use.
For details of the impairment test method and impairment provision method for constructionin progress, please refer to Note Ⅲ. 21 “Long-Term Asset Impairment”.
17. Borrowing Costs
Borrowing costs include interest on borrowings, amortization of discounts or premiums,ancillary expenses, and exchange differences arising from foreign currency borrowings. Borrowingcosts directly attributable to the acquisition, construction or production of assets eligible forcapitalization, capitalization is began when asset expenditures have occurred, borrowing costs haveoccurred, and the acquisition, construction or production activities necessary to bring the assets to theintended usable or saleable state have begun. And capitalization is stopped when the assets under
construction or production that meet the capitalization conditions are ready for their intended use orsaleable status. The remaining borrowing costs are recognized as an expense in the period in whichthey are incurred.The interest expenses actually incurred in the current period of special borrowings shall becapitalized after subtracting the interest income from the unused borrowing funds deposited into thebank or the investment income obtained from the temporary investment. For the general borrowings,according to the accumulated asset expenditures exceed the special borrowings. The capitalizationamount is determined by multiplying the weighted average of which accumulated asset expenditureexceeds the asset expenditure of the special borrowing portion by the capitalization rate of thegeneral borrowings used. The capitalization rate is determined based on the weighted averageinterest rate of general borrowings.During the capitalization period, the exchange differences of foreign currency specialborrowings are all capitalized; the exchange differences of foreign currency general borrowings areincluded in the current profit and loss.Assets eligible for capitalization refer to assets such as fixed assets, investment property andinventories that require a substantial period of acquisition, construction or production activities toachieve the intended use or sale status.If the assets eligible for capitalization are interrupted abnormally during the acquisition,construction or production process and the interruption period lasts for more than 3 months, thecapitalization of the borrowing costs shall be suspended until the acquisition, construction orproduction of the assets resumes.
18. Right-of-use assets (applicable from 1 January 2021)
Right-of-use assets of the Group mainly consist of buildings, power generation and transmissionequipment, plant, machinery and equipment, motor vehicles, furniture and fixtures and others.At the commencement date of the lease, the Group recognises the right to use the leased assetsduring the lease term as a right-of-use asset, including: the initial measurement amount of the leaseliability; the amount of lease payment paid on or before the beginning of the lease term, the amountof lease incentive already enjoyed shall be deducted if there is a lease incentive; initial directexpenses incurred by the lessee; the costs that the lessee is expected to incur in order to dismantleand remove the leased asset, restore the leased asset to the site or restore the leased asset to the stateagreed upon in the lease terms. The right-of-use assets are depreciated on a straight-line basissubsequently by the Group. If the Group is reasonably certain that the ownership of the underlyingasset will be transferred to the Group at the end of the lease term, the Group depreciates the assetfrom the commencement date to the end of the useful life of the asset. Otherwise, the Group
depreciates the assets from the commencement date to the earlier of the end of the useful life of theasset or the end of the lease term.The Group remeasures the lease liability at the present value of the revised lease payments andadjusts the carrying amount of the right-of-use assets accordingly, when the carrying amount of theright-of-use asset is reduced to zero, and there is a further reduction in the measurement of the leaseliability, the Group recognises the remaining amount of the remeasurement in profit or loss for thecurrent period
19. Intangible assets
(1) Intangible assets
Intangible assets refer to identifiable non-monetary assets without physical form owned orcontrolled by the Company.Intangible assets are initially measured at cost. Expenditure related to intangible assets isincluded in the cost of intangible assets if the relevant economic benefits are likely to flow to theCompany and its costs can be measured reliably. However, the intangible assets acquired throughbusiness combination not involving enterprises under common control should be measured at fairvalue separately as intangible assets when their fair values can be reliably measured.The acquired land use rights are usually accounted for as intangible assets. The related land userights and building construction costs of self-developed and constructed buildings are accounted foras intangible assets and fixed assets, respectively. In the case of purchased houses and buildings, therelevant price is distributed between the land use rights and the buildings. If it is difficult to allocatethem reasonably, all of them are treated as fixed assets.Since the intangible assets with limited useful life are available for use, the original value minusthe estimated net residual value and the accumulated amount of impairment reserve shall beamortized by the straight-line method during their expected service life. Intangible assets withuncertain service life shall not be amortized.
Among them, the useful life and amortization method of intellectual property are as follows:
| Item | Amortization period (year) | Amortization method |
| Trademark | 20 | Straight-line method |
At the end of the period, the useful life and amortization methods of intangible assets withlimited useful life are reviewed, and if any change occurs, it is treated as a change of accountingestimate. In addition, the useful life of intangible assets with uncertain service life is also reviewed.
If there is evidence that the period for which the intangible assets bring economic benefits to theenterprise is foreseeable, the useful life of intangible assets is estimated and amortized according tothe amortization policy of intangible assets with limited useful life
(2) Research and development expenditure
The company's expenditure for internal research and development project is divided intoresearch phase expenditure and development phase expenditure.
Expenditures for the research phase shall be recognized in profit or loss when incurred.
Expenditures for the development phase that meet the following conditions shall be recognizedas intangible assets, and expenditures in the development stage that fail to meet the followingconditions are included in current profit and loss:
a. It is technically feasible to complete the intangible asset to enable it to be used or sold.
b. The intent to complete the intangible asset and use or sell it;
c. The way in which intangible assets generate economic benefits, including the ability to provethat the products produced from the intangible assets having a market or the intangible assets havinga market, and the intangible assets will be used internally, which can prove its usefulness;
d. sufficient technical, financial resources and other resources for supporting the development ofthe intangible assets and the ability to use or sell the intangible assets.
e. Expenditure attributable to the development phase of the intangible asset can be reliablymeasured.
If it is impossible to distinguish the expenditures between research phase and developmentphase, all research and development expenditures incurred will be included in the current profit andloss.
(3) Impairment test method and Impairment provision method for intangible assets
For details of the impairment test method and impairment provision method, please refer toNote Ⅲ. 21 “Long-Term Asset Impairment”.
20．Long-term Deferred Expenses
The long-term deferred expenses are all expenses that have occurred but shall be borne by thereporting period and subsequent periods with amortization period of more than one year. Thecompany's long-term deferred expenses mainly include lease of land use right and renovation costsof factory building. Long-term deferred expenses are amortized on a straight-line basis over theestimated benefit period.
21. Long-term assets impairment
For fixed assets, construction in progress, intangible assets with limited useful life, investment
property measured by cost model, and non-current non-financial assets such as long-term equityinvestments in subsidiaries, joint ventures and associates, the Company determines whether there isany indication of impairment on the balance sheet date. If there is any indication of impairment, therecoverable amount is estimated and the impairment test is carried out. Goodwill, intangible assetswith uncertain service life and intangible assets that not yet ready for use are tested for impairmentannually, regardless of whether there is any indication of impairment.
If the result of the impairment test indicates that the recoverable amount of the asset is lowerthan its book value, the impairment provision is made based on the difference and is included in theimpairment loss. The recoverable amount is the higher of the fair value of the asset less the disposalexpense and the present value of the estimated future cash flow of the asset. The fair value of assetsis determined according to the sale agreement price in a fair transaction. If there is no salesagreement but there is an active market for the asset, the fair value is determined according to thebuyer's bid for the asset; if there is neither sales agreement nor active market for assets, the fair valueof assets shall be estimated based on the best information available. Asset disposal expenses includelegal fee, taxes, transportation expenses and direct expenses incurred to make assets saleable. Thepresent value of the estimated future cash flow of an asset is determined by the appropriate discountrate discounting and the estimated future cash flow generated by the asset during its continuous useand final disposal. The asset impairment provision is calculated and confirmed based on individualassets. If it is difficult to estimate the recoverable amount of an individual asset, the recoverableamount of the asset is determined by the asset group which the asset belongs to. An asset group is thesmallest portfolio of assets that can generate cash inflows independently.The book value of the goodwill listed separately in the financial statements is amortized intoasset groups or portfolios that are expected to benefit from the synergies of business combinationswhen impairment tests are conducted. The test results show that the recoverable amount of the assetgroup or portfolio containing the assessed goodwill is lower than its book value, the correspondingimpairment losses should be confirmed. The amount of impairment loss is first deducted from thebook value of the goodwill amortized to the asset group or portfolio, and then deductedproportionally from the book value of other assets according to the proportion of the book value ofassets other than goodwill in the asset group or portfolio.Once the above asset impairment loss is confirmed, it will not be reversed to the part where thevalue is restored in the future period.
22. Employee Compensation
The Company's employee compensation mainly includes short-term employee remuneration,Post-employment Benefits, Termination Benefits and benefits for other long-term employee. Among
them:
Short-term employees remuneration mainly includes wages, bonuses, allowances and subsidies,employee welfare fees, medical insurance premiums, maternity insurance premiums, work injuryinsurance premiums, housing fund, labor union funds, employee education funds, and non-monetarybenefits. The Company recognizes the actual short-term employee's remuneration as a liability in theaccounting period in which employees provide services to the Company and recognizes them inprofit or loss or related asset costs. Non-monetary benefits are measured at fair value.Post-employment Benefits mainly include basic retirement security, unemployment insurance,and annuities. The Post-employment Benefit Scheme includes a Defined Contribution Plan and aDefined Benefit Plan. If a Defined Contribution Plan is adopted, the corresponding amount of thedeposit shall be included in the relevant asset cost or current profit and loss as incurred. (1) TheDefined Contribution Plan is recognized as a liability based on a fixed fee paid to an independentfund and is included in the current profit and loss or related asset costs; (2) The Defined Benefit Planis accounted for using the expected cumulative benefits unit method Specifically, the Company willconvert the welfare obligation arising from the Defined Benefit Plan into the final value of thedeparture time according to the formula determined by the expected cumulative benefits unit method;then it is attributed to the employee's in-service period and is included in the current profit and lossor related asset cost.If the labor relationship with the employee is terminated before the employee's labor contractexpires, or if the employee is encouraged to accept the reduction voluntarily, when cannotwithdrawing unilaterally the dismissal benefits provided by the termination of the labor relationshipplan or the reduction proposal, and when confirming the costs associated with the restructuringinvolving the payment of the dismissal benefits, whichever is earlier, the Company will recognize theemployee compensation liabilities arising from the dismissal benefits, and included in the currentprofit and loss. However, if the dismissal benefits are not expected to be fully paid within 12 monthsafter the end of annual reporting period, they shall be treated in accordance with other long-termemployee compensations.
The internal retirement plan for employees shall be treated in the same way as theabove-mentioned dismissal benefits. The company will pay the internal retired staff the salary andthe social insurance premiums from the employee's lay-off to normal retirement, and will include inthe current profit and loss (dismissal benefits) when the conditions of the estimated liabilities aremet.
If the other long-term employee benefits provided by the Company to the employees are in linewith the Defined Contribution Plan, they shall be accounted for Defined Contribution Plan, and
otherwise accounted for the Defined Benefit Plan.
23. Lease liabilities
At the commencement date of the lease period, the Group recognises the present value ofoutstanding lease payments as a lease liability, excluding short-term leases and leases of low-valueassets. The Group adopts the interest rate implicit in the lease as the discount rate to calculate thepresent value of the lease payments. Where the interest rate implicit in the lease cannot bedetermined, the incremental borrowing rate of the lessee shall be used as the discount rate. TheGroup calculates the interest expense of the lease liability during each period of the lease term inaccordance with the constant periodic rate of interest and recognises it in profit and loss for thecurrent period, except otherwise stipulated in the cost of related assets. The variable lease paymentthat is not included in the measurement of lease liabilities is recognised in the profit and loss for thecurrent period when it actually occurs, except that it is otherwise stipulated to be included in the costof relevant assets.After a lease term commences, when there is a change in the amount of in-substance fixed leasepayments, a change in the amounts expected to be payable under a residual value guarantee, a changein future lease payments resulting from a change in an index or a rate used to determine thosepayments, a change in assessment of an option to purchase the underlying asset, renew or terminatethe lease, or change in the actual exercise of an option, the Group remeasures the carrying amount ofthe lease liability by discounting the revised lease payments
24. Estimated liabilities
When the obligations related to the contingencies meet the following conditions, they arerecognized as contingent liabilities: (1) The obligation is the present obligation assumed by theCompany; (2) The performance of this obligation is likely to result in the outflow of economicbenefits; (3) The amount of the obligation can be reliably measured.
On the balance sheet date, taking into account factors such as risks, uncertainties and time valueof money related to contingencies, the estimated liabilities are measured in accordance with the bestestimate of the expenditure required to perform the relevant current obligations.
If all or part of the expenses required to discharge the estimated liabilities are expected to becompensated by the third party, the compensation amount will be separately recognized as an assetwhen it is basically determined to be received, and the confirmed compensation amount does notexceed the book value of the estimated liabilities.
(1) Loss Contract
A loss contract is a contract in which the cost of fulfilling a contractual obligation will
inevitably occur more than the expected economic benefit. If the contract to be executed becomes aloss contract, and the obligation arising from the loss contract satisfies the conditions for therecognition of the above-mentioned estimated liabilities, the portion of the contract's estimated lossthat exceeds the recognized impairment loss (if any) of the contracted asset is recognized as theestimated liability.
(2) Restructuring Obligations
For restructuring plans that are detailed, formal, and have been announced to the public, theamount of the estimated liabilities are determined based on the direct expenses related to thereorganization, subject to the recognition conditions of the aforementioned estimated liabilities. Forthe restructuring obligation to the part of business sold, the obligation related to the reorganization isconfirmed only when the company promises to sell part of the business (that is, when the bindingsale agreement is signed).
25. Share-based Payments
(1) Accounting Treatment of Share-based Payments
A share-based payment is a transaction that grants an equity instrument or assumes a liabilitydetermined based on an equity instrument in order to obtain services from employees or other parties.Share-based Payments include equity-settled share payment and cash-settled share payment.
a) Equity-settled Share Payment
The equity-settled share payment in exchange for the services from employee is measured at thefair value of the granting of employees' equity instruments at the grant date. If the fair value is vestedin the completion of the waiting period of service or the fulfillment of the required performanceconditions, during the waiting period, the amount of the fair value is calculated by the straight-linemethod into the relevant costs or expenses based on the best estimate of the number of vesting equityinstruments; Or If the vesting right is granted immediately after the grant, the calculation of theamount of the fair value is included in the relevant cost or expense on the grant date, and the capitalreserve is increased accordingly.
On each balance sheet date during the waiting period, the Company makes the best estimatebased on the latest information on the changes in the number of employees with vesting rights andcorrects the number of equity instruments that are expected to be vested. The impact of the aboveestimates shall be included in the current related costs or expenses, and the capital reserve is adjustedaccordingly.
In the case of equity-settled share-based payments in exchange for other parties' services, if thefair value of other parties' services can be reliably measured, the fair value of other services shall be
measured at the fair value on the date of acquisition; If the fair value of the other party's servicescannot be measured reliably, the fair value shall be measured at the fair value of the equityinstrument at the date the service is acquired, and is included in the relevant cost or expense, whichincreases the shareholders' equity accordingly.b) Cash-settled Share PaymentThe cash-settled share payment is measured at the fair value of the liabilities determined by theCompany based on shares or other equity instruments. If the vesting right is available immediatelyafter the grant, the relevant costs or expenses shall be included on the date of grant, and the liabilitiesshall be increased accordingly; if vesting right is available after the service is completed within thewaiting period or met the required performance conditions, based on the best estimate of the vestingrights on each balance sheet date of the waiting period, according to the fair value of the liabilitiesassumed by the company, the services obtained in the current period are included in the cost orexpense, and the liabilities are increased accordingly.
The fair value of the liabilities shall be re-measured on each balance sheet date and settlementdate before the settlement of the relevant liabilities, and the changes shall be recorded in the profitand loss of the current period.
(2) Relevant Accounting Treatment of share-based payment plan’s modification and termination
When the Company modifies the share-based payment plan, if the modification increases thefair value of the equity instruments granted, the increase in the fair value of the equity instruments isrecognized accordingly. The increase in the fair value of equity instruments refers to the differencebetween the fair value of the equity instruments before and after the modification. If the modificationreduces the total fair value of the share-based payment or adopts other methods that are notconducive to the employee, the service obtained shall continue to be accounted for, as if the changehas never occurred, unless the Company cancels some or all of equity instruments.
During the waiting period, if the granted equity instrument is cancelled, the Company willcancel the granted equity instrument as an accelerated exercise, and the amount to be recognized inthe remaining waiting period will be immediately included in the current profit and loss, and thecapital reserve will be recognized. If the employee or other party can choose to meet the non-vestingconditions but fails to meet the waiting period, the Company will treat it as a cancellation of theequity instrument.
(3) Accounting Treatment of Share Payment Transactions between the Company and itsShareholders or Actual Controllers
In respect of the share-based payment transaction between the company and the shareholders oractual controllers of the company, If one of the settlement enterprise and the service receiving
enterprise is in the company and the other is outside the company, it shall be accounted for in theconsolidated financial statements of the company according to the following provisions:
a.) If the settlement enterprise settles with its own equity instrument, the share-based paymenttransaction shall be treated as equity-settled share-based payment; otherwise, it shall be treated as acash-settled share-based payment.If the settlement enterprise is an investor of a serviced enterprise, it shall be recognized as thelong-term equity investment of the serviced enterprise according to the fair value of the equityinstrument at the grant date or the fair value of the liability to be assumed, and the capital reserve(other capital reserve) or liabilities shall be recognized.b.) If the serviced enterprise has no settlement obligation or grants its own employees the equityinstruments, the share payment transaction shall be treated as equity-settled share payment; if theserviced enterprise has settlement obligation and grants its employees other than its own equityinstruments, the share payment transaction shall be treated as a cash-settled share payment.For the share based payment incurred between companies within the group, if the servicedenterprise and settlememt enterprise are not the same, then the payment should be recpgnized andmeasured in their individual financial statements, they should be accounted for using the aboveprinciples
26. Revenue
The company's operating income mainly includes income from selling goods, income fromproviding services, royalty income, interest income, etc. When the company signs a contract, itevaluates the contract, identifies the individual performance obligations contained in the contract,and determines whether the individual performance obligations are performed within a certain periodof time or at a certain point of time. When the company has fulfilled all the performance obligationsin the contract, the revenue shall be recognized respectively according to the transaction priceapportioned to the performance obligations.
(1) Revenue recognition for fulfilling performance obligation at a certain time point
Generally, the company recognizes the revenue from the sales of goods based on the transactionprice apportioned to the single performance obligation when the customer obtains the control right ofthe relevant goods on the basis of comprehensively considering the following factors: the companyhas the right to receive payment in respect of the goods or services currently, that is, the customer hasthe obligation to pay for the goods currently; the company has transferred the legal ownership of thegoods to the customer, that is, the customer has the legal ownership of the goods; The Company hastransferred the physical goods of the commodity to the Customer or the Customer has obtained the
qualification of physical goods right of the commodity. The consideration obtained by the Companyin respect of the transfer of the commodity is likely to be recovered; Other indications that thecustomer has taken control of the commodity.The specific principles of the company's sales revenue recognition are as follows: when thecommodity have been delivered to the customer and signed by the customer for confirmation, or theownership certificate of the commodity has been delivered to the customer, the sales revenue isrecognized when the company has received the payment or obtained the evidence of payment.
(2) Revenue recognition for fulfilling performance obligation within a certain period of
timeFor the performance obligations performed in a certain period of time, such as the servicesprovided, the company adopts the output method or input method to determine the appropriateperformance progress, and recognizes the revenue according to the performance progress in thatperiod of time. On the balance sheet date, the company shall recognize the current income accordingto the total transaction price of the contract multiplied by the progress of performance minus theaccumulated recognized income. If one of the following conditions is satisfied, it is regarded as theperformance obligation performed during a certain period of time: the Customer obtains andconsumes the economic benefits arising from the performance of the Company at the same time ofthe performance of the Company; Customers can control the goods under construction during theperformance of the contract; The products produced by the Company during the performance of theContract are of irreplaceable use, and the Company shall be entitled to receive payment for theaccumulated part of the completed performance so far during the whole term of the Contract.Otherwise, the Company recognizes revenue at the point when the Customer acquires control of therelevant goods or services.
The Company's rights to receive consideration for goods or services transferred to theCustomer (and such rights depend on factors other than the time passage) are presented ascontractual assets, which are subject to impairment on the basis of expected credit losses. Thecompany's right to collect consideration from customers unconditionally (only depending on thepassage of time) is listed as receivables. The obligation of the Company to transfer goods or servicesto customers for which consideration has been received or receivable is presented as a contractualliability.
27. Contract cost
1. Contract performance cost
The cost incurred by the company for the performance of the contract, which does not fallwithin the scope of other accounting standards for business enterprises other than the incomestandard and meets the following conditions at the same time, is recognized as an asset as thecontract performance cost:
(1) The cost is directly related to a current or expected contract, including direct labor, directmaterials, manufacturing expenses (or similar expenses), costs explicitly borne by the customer andother costs incurred solely as a result of the contract;
(2) The cost increases the company's resources for fulfilling its performance obligations in thefuture;
(3) The cost is expected to be recovered.
The assets are presented in inventory or other non-current assets according to whether theamortization period has exceeded one normal operating cycle at the time of its initial recognition.
2. Contract acquisition cost
If the incremental cost incurred by the company to obtain the contract is expected to berecovered, it shall be recognized as an asset as the contract acquisition cost. Incremental cost refersto the cost that will not occur if the company does not obtain the contract.
3. Amortization of contract costs
The assets related to the contract cost mentioned above shall be amortized at the time ofperformance of the obligation or according to the performance progress on the same basis as theincome recognition of the commodity or service related to the asset and shall be recorded into thecurrent profit and loss.
4. Impairment of contract cost
If the book value of the above assets related to the contract cost is higher than the differencebetween the residual consideration expected to be obtained by the company due to the transfer of thegoods related to the assets and the estimated cost to be incurred for the transfer of the relevant goods,the excess part shall be set aside as an impairment provision and recognized as an impairment loss ofthe asset.
28. Government grants
Government grant refers to the company's acquisition of monetary and non-monetary assetsfrom the government free of charge, excluding the capital invested by the government as an investorand enjoying the corresponding owner's rights and interests. Government grants includeassets-related grants and revenue-related grants. The company defines the government grant obtainedfor the purchase and construction of long-term assets or for the formation of long-term assets in otherways as the government grant related to assets; the remaining government grant is defined as thegovernment grant related to income. If the object of grants is not specified in government documents,the grants shall be divided into income-related government grants and assets-related governmentgrants in the following ways: (1) If the government document clarifies the specific project for whichthe grant is targeted, the proportion of the expenditure amount of the assets to be formed and theamount of the expenditures included in the expenses in the budget of the specific project are divided,and the proportion of grant division needs to be reviewed on each balance sheet day and changed ifnecessary. (2) In government documents, if the purpose is expressed only in general terms and nospecific project is specified, the grant shall be regarded as a government grant related to the income.Where a government grant is a monetary asset, it shall be measured according to the amount receivedor receivable. If the government grants are non-monetary assets, they shall be measured at the fairvalue; if the fair value cannot be obtained reliably, they shall be measured at the nominal amount.Government grants measured in nominal amounts shall be recognized directly in current profits andlosses.
The Company usually confirms and measures the government grant according to the amountwhen it is actually received. However, if there is conclusive evidence at the end of the period that therelevant conditions stipulated in the financial support policy can be met and the financial supportfunds are expected to be received, it shall be measured according to the amount receivable.Government grants measured in accordance with the amount receivable shall meet the followingconditions at the same time: (1) The amount of the subvention receivable has been confirmed by theauthorized government departments, or can be reasonably calculated according to the relevantprovisions of the formally issued financial fund management measures, and there is no significantuncertainty in the amount expected; (2) According to the "Regulations on the Openness ofGovernment Information" that the local financial department officially released and in accordancewith the provisions of the "Regulations on the Openness of Government Information," the financialsupport project and its financial fund management measures should be inclusive (any eligibleenterprise can apply for them), rather than being specifically tailored to specific companies; (3)The relevant grant approval has clearly promised the payment period, and the allocation of the
payment is guaranteed by the corresponding budget, so it can be reasonably ensure that it can bereceived within the prescribed time limit; (4) Other relevant conditions (if any) to be met inaccordance with the specific circumstances of the Company and the grants.Government grants related to assets are recognized as deferred earnings and are divided intocurrent profits and losses in a reasonable and systematic way during the service life of the assetsconcerned. The government grants related to revenue, which are used to compensate for the relatedcost or loss in the subsequent period, shall be recognized as deferred income, and shall be recognizedin profit or loss in the period in which the related costs or losses are recognized; if it is used tocompensate the related costs or losses that has occurred, it shall be directly recognized in the currentprofit and loss.It includes government grants related to both assets and income, and different parts areseparately classified for accounting treatment; if it is difficult to distinguish, the whole is classified asgovernment grants related to income.Government grants related to the daily activities of the Company shall be included in otherincome or cost deductions according to the nature of the economic business; government subsidiesunrelated to daily activities shall be included in the non-operating revenues and expenses.When the recognized government grants need to be returned, if there are relevant deferredearnings balances, the book balance of related deferred earnings shall be deducted, and the excesspart shall be included in the current profits and losses or the book value of assets shall be adjusted,otherwise, the book value of assets shall be directly included in the current profits and losses.
The company will obtain preferential policy loans discount in accordance with the finance willbe allocated to the loan bank discount funds and the finance will be directly allocated to the companydiscount funds in two cases:
(1) If the finance department allocates the discount interest funds to the lending bank, and thelending bank provides the loan to the Company at the policy preferential interest rate, the Companychooses to conduct accounting treatment according to the following methods: the loan amountactually received shall be taken as the entry value of the loan, and the relevant borrowing costs shallbe calculated in accordance with the loan principal and the policy preferential interest rate.
(2) If the finance allocates the discount funds directly to the company, the company will offsetthe corresponding discount against the relevant borrowing costs.
29. Deferred Income Tax Assets / Deferred Income Tax Liabilities
(1) Current Income Tax
On the balance sheet date, the current income tax liabilities (or assets) formed in the current andprevious periods are measured by the expected amount of income tax payable (or returned) inaccordance with the provisions of the Tax Law. The amount of taxable income on which current
income tax expenses are calculated is based on the corresponding adjustment of pre-tax accountingprofits in the reporting period in accordance with the relevant tax laws.
(2) Deferred Income Tax Assets and Deferred Income Tax Liabilities
The difference between the book value of certain assets and liabilities and their tax basis, andthe temporary difference between the book value of items that are not recognized as assets andliabilities but which can be determined as their tax basis according to the tax law, are confirmed bythe balance sheet liability method.
Taxable temporary differences which related to the initial recognition of goodwill and the initialrecognition of an asset or liability arising from a transaction that is neither a business combinationnor an accounting profit or taxable income (or deductible loss), relevant deferred income taxliabilities shall not be recognized. In addition, for taxable temporary differences related toinvestments in subsidiaries, associates and joint ventures, if the Company is able to control theturnaround time of temporary differences, and the temporary difference is unlikely to be reversed inthe foreseeable future, the related deferred income tax liabilities shall not be recognized. Except forthe above exceptions, the Company recognizes all other deferred income tax liabilities arising fromtaxable temporary differences.
Taxable temporary differences which related to the initial recognition of an asset or liabilityarising from a transaction that is neither a business combination nor an accounting profit or taxableincome (or deductible loss), relevant deferred income tax liabilities shall not be recognized. Inaddition, for taxable temporary differences related to investments in subsidiaries, associates and jointventures, if the temporary difference is unlikely to be reversed in the foreseeable future, or theamount of taxable income used to offset the temporary difference is unlikely to be obtained in thefuture, the deferred income tax assets concerned shall not be recognized. Except for the aboveexceptions, the Company recognizes other deferred income tax assets that can offset temporarydifferences, subject to the amount of taxable income that is likely to be obtained to offset temporarydifferences.
For deductible losses and tax credits that can be carried forward in subsequent years, thecorresponding deferred income tax assets are recognized to the extent that it is probable that thefuture taxable income shall be used to offset the deductible losses and tax credits.
On the balance sheet date, the deferred income tax assets and deferred income tax liabilitiesshall be measured at the applicable tax rates in the period in which the related assets are recovered orthe related liabilities are recovered in accordance with the tax laws.
On the balance sheet date, the book value of deferred income tax assets is reviewed. and thebook value of deferred income tax assets is written down if it is likely that sufficient taxable income
will not be available to offset the benefits of deferred income tax assets in the future. When it ispossible to obtain sufficient taxable income, the amount written down shall be reversed.
(3) Income tax expenses
Income tax expenses include current income tax and deferred income tax.In addition to recognizing that the current income tax and deferred income tax related to othertransactions and matters directly included in shareholder's rights and interests shall be recognized inother comprehensive income or shareholder's rights and interests, and the book value of adjustedgoodwill from deferred income tax resulting from the merger of enterprises, the other current incometax and deferred income tax expenses or gains shall be recognized in profit or loss for the currentperiod.
(4) Offset of Income Tax
When the company has legal rights to settle on a net basis, and intends to settle on a net basis oracquire assets and pay off liabilities at the same time, the company's current income tax assets andcurrent income tax liabilities shall be presented on a net basis after the offset.When it has the legal right to settle current income tax assets and current income tax liabilitieson a net basis, and deferred income tax assets and deferred income tax liabilities are related to theincome tax levied by the same tax administration department on the same tax payer or to different taxpayers, but in the future, during each important period of deferred income tax assets and liabilitiesbeing reversed, the taxpayer involved intends to settle the current income tax assets and liabilities ona net basis, or acquire assets and pay off liabilities simultaneously, the deferred the income tax assetsand deferred income tax liabilities of the Company shall be presented on a net basis after offset.
30. Lease
Finance lease is a lease that essentially transfers all risks and rewards related to the ownershipof assets. Its ownership may or may not be transferred eventually. Leases other than finance leasesare operating leases.
(1) The Company records operating lease business as a lessee.
Rental expenses for operating leases shall be included in the related asset costs or current profitsand losses in the straight-line method during each period of the lease period. The initial direct costsshall be included in the current profits and losses. Contingent rentals shall be recognized in profitsand losses when incurred.
(2) The company records operating leasie business as a lessor
The rental income of operating lease shall be recognized as current profit and loss according tothe straight-line method during each period of the lease period. The larger initial direct expenses are
capitalized when occurring, and the profits and losses of the current period shall be recorded instages on the same basis as the recognized rental income during the whole lease period; the smallerinitial direct expenses shall be recorded in the profits and losses of the current period when occurring.Contingent rentals shall be included in current profits and losses when actually occurring.
(3) The company records finane lease business as a lessee
At the beginning of the lease period, the lower of the fair value of the leased assets and thepresent value of the minimum lease payment on the lease start date is regarded as the entry value ofthe leased assets, and the lowest lease payment shall be regarded as the entry value of the long-termpayables, and the difference shall be regarded as the unrecognized financing cost. In addition, theinitial direct costs attributable to the lease project shall also be included in the value of the leasedassets when they occur during the lease negotiation and the signing of the lease contract. The balanceof the minimum lease payment after deducting the unrecognized financing costs shall be presented aslong-term liabilities and long-term liabilities due within one year, respectively.
The unrecognized financing cost shall be calculated by the real interest rate method during thelease period. Contingent rentals shall be included in current profits and losses when actuallyoccurring.
(4) The company records financie lease business as a lessor
At the beginning of the lease period, the sum of the minimum lease receipt and the initial directcost on the lease start date is regarded as the entry value of the financial lease receivable, and theunsecured balance shall be recorded. The difference between the sum of the minimum leasereceivable, the initial direct cost and the unsecured balance and the sum of its present value isrecognized as the unrealized financing income. The balance of the receivable financial lease afterdeducting the unrealized financial income shall be presented as long-term claims and long-termclaims maturing within one year, respectively.
The unrealized financing income shall be calculated and confirmed by the real interest ratemethod during the lease period. Contingent rentals shall be recognized in current profits and losseswhen actually occurring.
31. Other important accounting policies and accounting estimates
(1) Termination of business
Termination of operation refers to a component that meets one of the following conditions, canbe separately distinguished and has been disposed of or classified as held for sale by the Company:
① This component represents an independent major business or a separate major business area. ②This component is part of an associated plan to dispose of an independent major business or a
separate major business area. ③ This component is a subsidiary company acquired specifically forresale.For the accounting treatment methods for termination of operations, please refer to the relevantdescriptions in Note 3, 12 “Assets held for sale and disposal group".
(2) Hedge accounting
In order to avoid some risks, the Company hedges some financial instruments as hedginginstruments. For the hedges meeting the specified conditions, the Company adopts the hedgeaccounting method for treatment. The hedging of the Company is fair value hedging.
At the beginning of hedging, the Company formally designates hedging instruments and hedgeditems, and prepares written documents on hedging relationship and risk management strategy andrisk management objectives of the Company engaged in hedging. In addition, the Company willcontinuously evaluate the effectiveness of hedging at the beginning and after the hedging.
Fair value hedging
If a hedging instrument is designated as a fair value hedge and meets the conditions, the profitsor losses arising therefrom shall be included into the current profits and losses. If the hedginginstrument hedges the non-trading equity instrument investment (or its components) that is measuredat fair value and whose changes are included in other comprehensive income, the gains and lossesgenerated by the hedging instrument are included in other comprehensive income. The profit or lossof the hedged item due to the hedged risk exposure shall be included into the current profits andlosses, and the book value of the hedged item shall be adjusted at the same time. If the hedged item ismeasured at fair value, the gain or loss of the hedged item due to the hedged risk does not need toadjust the book value of the hedged item, and the relevant gains and losses are included into thecurrent profits and losses or other comprehensive income.
When the Company cancels the designation of the hedging relationship, the hedging instrumenthas expired or been sold, the contract has been terminated or exercised, or no longer meets theconditions for the application of hedge accounting, the application of hedge accounting shall beterminated.
32. Significant accounting judgments and estimates
In the process of applying accounting policies, due to the inherent uncertainty of businessactivities, the Company needs to judge, estimate and assume the book value of statement items thatcannot be accurately measured. These judgments, estimates and assumptions are based on theCompany's management's past historical experience and other relevant factors. These judgments,estimates and assumptions will affect the reported amounts of income, expenses, assets and liabilities
and the disclosure of contingent liabilities at the balance sheet date. However, the actual resultscaused by the uncertainty of these estimates may be different from the current estimates of theCompany's management, resulting in a significant adjustment to the carrying amount of the assets orliabilities affected in the future.The Company reviews the aforesaid judgments, estimates and assumptions on a regular basis onthe basis of going concern. If the change of accounting estimates only affects the current period ofchange, the number of impacts shall be recognized in the current period of change. If the changeaffects both the current and future periods, the number of impacts will be confirmed in the currentand future periods of the change.On the balance sheet date, the Company needs to judge, estimate and assume the amount offinancial statement items in the following important areas:
1. Impairment of financial assets
The Company uses the expected credit loss model to evaluate the impairment of financialinstruments. The application of the expected credit loss model requires significant judgment andestimation, and all reasonable and basis information, including forward-looking information, shall beconsidered. In making these judgments and estimates, the Company deduces the expected changes inthe debtor's credit risk based on historical data and combined with economic policies,macroeconomic indicators, industry risks, external market environment, technological environment,changes in customer conditions and other factors.
2. Inventory falling price reserves
According to the inventory accounting policy, the Company measures according to the lower ofcost and net realizable value. For the inventory whose cost is higher than net realizable value andwhich is obsolete and unsalable, the Company makes provision for inventory falling price.Impairment of inventories to net realizable value is based on the evaluation of the marketability ofinventories and their net realizable value. The appraisal of impairment of inventories requires themanagement to make judgment and estimation on the basis of obtaining conclusive evidence andconsidering factors such as the purpose of holding inventories and the influence of events after thebalance sheet date. The difference between the actual result and the original estimate will affect thebook value of inventory and the accrual or reversal of inventory depreciation reserve during theperiod when the estimate is changed.
3. Provision for impairment of long-term assets
On the balance sheet date, the Company judges whether there are signs of possible impairmentfor non-current assets other than financial assets. For intangible assets with uncertain service life, inaddition to the annual impairment test, the impairment test is also carried out when there are signs of
impairment. Other non-current assets other than financial assets shall be tested for impairment whenthere are indications that their book amounts are not recoverable.
When the book value of an asset or asset group is higher than the recoverable amount, that is,the higher of the net amount of the fair value minus the disposal expenses and the present value ofthe estimated future cash flow, it indicates that an impairment has occurredThe net amount of the fair value less the disposal expenses shall be determined by referring tothe sales agreement price or observable market price of similar assets in fair transactions, anddeducting the incremental cost directly attributable to the disposal of such assets.When estimating the present value of future cash flow, it is necessary to make a significantjudgment on the output, sales price, related operating costs and the discount rate used in thecalculation of the present value of the asset (or asset group). In estimating the recoverable amount,the Company will use all relevant information available, including forecasts of production, sellingprice and related operating costs based on reasonable and supportable assumptions.
The Company shall test whether goodwill is impaired at least every year. This requires anestimate of the present value of the future cash flows of the asset group or portfolio of asset groups towhich goodwill has been allocated. When predicting the present value of future cash flow, theCompany needs to predict the cash flow generated by the future asset group or asset group portfolio,and at the same time, select the appropriate discount rate to determine the present value of futurecash flow.
4. Depreciation and amortization
After considering the residual value of investment real estate, fixed assets and intangible assets,the Company will accrue depreciation and amortization on a straight-line basis during their servicelives. The Company reviews the service life regularly to determine the amount of depreciation andamortization expenses to be included in each reporting period. The service life is determined by theCompany based on the past experience of similar assets and in portfolio with the expectedtechnological updates. If there is a significant change in previous estimates, the depreciation andamortization charges will be adjusted in the future.
5. Deferred income tax assets
To the extent that there is likely to be sufficient taxable profits to offset the losses, the Companyrecognizes deferred income tax assets for all unused tax losses. This requires the Company'smanagement to use a large number of judgments to estimate the time and amount of future taxableprofits, combined with tax planning strategies, to determine the amount of deferred income tax assetsto be recognized.
6. Income tax
In the normal business activities of the Company, there are certain uncertainties in the final taxtreatment and calculation of some transactions. Whether some items can be paid before tax requiresthe approval of the tax authorities. If there is a difference between the final determination result ofthese tax matters and the amount initially estimated, the difference will have an impact on the currentincome tax and deferred income tax during the final determination period.
7. Accrued liabilities
According to the terms of the contract, existing knowledge and historical experience, theCompany estimates and makes corresponding provision for product quality assurance, estimatedcontract losses, liquidated damages for delayed delivery, etc. In the event that such contingencieshave formed a current obligation and the performance of the current obligations is likely to result inoutflow of economic benefits from the Company, the Company recognizes the contingencies asestimated liabilities based on the best estimate of the expenditure required to perform the relevantcurrent obligations. The recognition and measurement of the estimated liabilities depend to a largeextent on the judgment of the management. In the process of judgment, the Company needs toevaluate the risks, uncertainties, time value of money and other factors related to these contingencies.
Among them, the Company will make an estimated liability for the after-sales qualitymaintenance commitments provided to customers for the sale, maintenance and renovation of thegoods sold. The Company's recent maintenance experience data have been taken into account whenestimating liabilities, but the recent maintenance experience may not reflect the future maintenancesituation. Any increase or decrease in this provision may affect the profit and loss in the future years.
8. Fair value measurement
Certain assets and liabilities of the Company are measured at fair value in the financialstatements. When estimating the fair value of an asset or liability, the Company adopts the availableobservable market data available. If the first level input value cannot be obtained, the Company willemploy a qualified third-party appraiser to perform the appraisal. The Company works closely withqualified external appraisers to determine the appropriate valuation techniques and inputs to therelevant models
IV. Taxes
1. Main Taxes and Tax Rates
| Types | Tax Basis | Tax Rate |
| Value Added Tax | After deducting the allowable amount of input tax deducted in the current period, the difference between the sales of goods, taxable services and taxable services income calculated in accordance with the | 1%、3%、5%、6%、 |
| Types | Tax Basis | Tax Rate |
| provisions of the Tax Law is the taxable value-added tax. | 9%、10%、13% | |
| Urban Maintenance & Construction Tax | According to the actual value-added tax | 7%、5% |
| Extra charges of education funds | According to value added tax and consumption tax on the basis of actual payment | 3% |
| Local Extra Charges of Education Funds | According to value added tax and consumption tax on the basis of actual payment | 2% |
| Corporate Taxes | According to taxable income | 25%、17%、15%、20% |
| Property Tax | According to 70% of original value of the real estate (or rental income) as the tax base; according to the original value of the real estate deducted 30% at a time. | 12%、1.2% |
The company conducts VAT taxable sales or imports goods. According to the announcementissued by Ministry of Finance, State Administration of Taxation and China Custom about the policyrelating to deepening VAT reform ( Announcement by Ministry of Finance, State Administration ofTaxation and China Custom (2019) No.39), from 1st April 2019 onwards, the applicable rates areadjusted to 13%/9%. Meanwhile, the company can deduct VAT by additional deductible rate of 10%from 1st April 2019 to 31st December 2021 because of its business nature as service provider.Representation on tax payers of different enterprise income tax rates:
| Tax Payers | Income Tax Rate |
| Jingliang (Singapore) International Trade Co., Ltd. | 17% |
| Beijing Guchuan Bread Food Co., Ltd. | 15% |
| Hangzhou Lin'an Chunmanyuan Agricultural Development Co., Ltd. | 20% |
2. Important preferential tax policies and basis
Hangzhou Linan Little Angel Food Co., Ltd., a 4th tier subsidiary company of the Company, isa welfare enterprise. Since May 2016, it has enjoyed the preferential VAT policy of immediate refundupon payment in Preferential Value-Added Tax Policies for Promoting the Employment of DisabledPersons (CaiShui [2016] No.52).
The level 2 subsidiary of the company-Jingliang Caofeidian Agricultural Development Limited,according to the document JTCFDST(2018) No. 1539765025415 issued by tax authority ofCaofeidian District, Tangshan, affiliated to State Administration of Taxation, and also followed therules in Law of the People's Republic of China on the Administration of Tax Collection, The
Implementation Guideline of Law of the People's Republic of China on the Administration of TaxCollection, the rice under the brand of Tixiang produced by Caofeidian company if exempted fromVAT.The level 2 subsidiary of the company-Jingliang Caofeidian Agricultural Development Limited,according to the rules under Clause 27 of Corporate Law and its Implementation Guideline Clause86, the rice under the brand of Tixiang produced by Caofeidian company if exempted fromCorporation tax.Beijing Guchuan Bread&Food Co., Ltd., a 3rd tier subsidiary of the Company, is a high-techenterprise. It enjoys the preferential tax policy of paying enterprise income tax at the 15% tax rateaccording to the relevant provisions of both “Law of the People's Republic of China on TaxCollection and Administration” and “Rules for the Implementation of the Tax Collection andAdministration Law of the People's Republic of China”. It obtained the certificate of high-techenterprise No. GR202111000657, valid until September 14, 2024.The company level 3 subsidiary Beijing day weikang grease DiaoXiao center co., LTD.,according to the national tax administration of the ministry of finance, the notice about foodenterprises exempted from VAT tax word (1999), article 5, 198, responsible for collection andstorage of grain purchase and sale of state-owned grain enterprises and business duty-free itemslisted in the notice of other food business, and government reserves edible vegetable oil salesenterprises, which should be examined by the competent tax authorities deemed tax-exempt status,not reported to the competent tax authorities where the audit determined that no exemption, FromJune 1, 2017 to December 31, 9999, the company will exempt edible vegetable oil stored by thegovernment from VAT.Jingliang (Singapore) International Trade Co., Ltd., a 3rd tier subsidiary of the Company, leviestaxes on the principle of territoriality. The company is taxed on the territoriality principle. Accordingto Singapore's preferential tax policy, the company enjoys tax exemption plan is as follows: for thefirst SGD$10,000 of taxable income amount the taxable income amount shall be reduced by 75%; forthe portion between SGD$10,001 and SGD$200,000, the taxable income amount shall be reduced by50%; For the portion exceeding SGD$200,000, the taxable income amount shall not be reduced. Thecompany shall pay income tax at the rate of 17% on the taxable income amount after exemption.In accordance with the relevant provisions of Ministry of Finance and State Administration ofTaxation “Notice on Preferential Enterprise Income Tax Policies for Employment of Persons withDisabilities”(Cai Shui[2009] No.70), Hangzhou Linan Little Angel Food Co., Ltd. , a 4th tiersubsidiary company of the Company: Where an enterprise employs persons with disabilities, on thebasis of deduction according to the wages paid to the disabled workers, it may deduct the amount of
taxable income according to 100% of the wages paid to the disabled workers.The company level 3 subsidiary Zhejiang Xiaowangzi Foodstuff Co., Ltd. and 4th tiersubsidiary company-Hangzhou Linan Little Angel Food Co., Ltd. ,are entitled to enjoy the urbanland use tax reduction policy of unified implementation of classification and grading for taxpayers inthe manufacturing industry within the province (including Ningbo City) according to the provisionsof the General Office of the People's Government of Zhejiang Province Document No. 62 of 2019,and enjoy 100% and 80% reduction of urban land use tax for Class A and Class B enterprisesrespectively until December 31, 2021, with the maximum reduction of 100% and 80% of the urbanland use tax payable by the Unit for the year.Linqing Little Prince Food Co., Ltd., a fourth-level subsidiary of the company, shall be subjectto 50% of the sales revenue on the basis of the stamp tax payable in the industrial procurement linkand sales link in the purchase and sale contract of industrial enterprises according to the annountmentNo.10, 2018 issued by Shandong Provincial Tax Bureau. The base of stamp duty payable in 2021shall be calculated according to 50% of the sales revenue.Company’s level 4 subsidiary-Liaoning Xiaowangzi Food Limited, according to theSupplementary Announcement on Land Use Tax issued by Ministry of Finance and StateAdministration of Taxation (89) GSDZ No.140 Clause 13 states that public land such as municipalstreet, square, public green etc. can be exempted from land use tax, when computing land use tax, thearea used in the computation is total area less the area for afforest and street.
Company’s level 4 subsidiary-Hangzhou Lin'an Chunmanyuan Agricultural Development Co.,Ltd. , according to the Announcement of the State Administration of Taxation on Matters Relatingto the Implementation of Preferential Income Tax Policies to Support the Development of Small andMicro-profit Enterprises and Individual Entrepreneurs and State Administration of TaxationAnnouncement No. 8 of 2021, from January 1, 2021 to December 31, 2022, for small andmicro-profit enterprises with annual taxable income not exceeding RMB1 million The part of theannual taxable income of small and medium-sized enterprises shall be reduced by 12.5% of thetaxable income and the enterprise income tax shall be calculated at a tax rate of 20%.The company level 4 subsidiary Jingliang (Hebei) Oil Industry Co., Ltd., according to thefinancial department documents, local taxation bureau in hebei province, hebei province document jicaishui [2019] no. 56 "about parts reserve commodity announcement concerning the tax policy,accounting books shall be exempt from stamp duty for funds, to undertake business book stand in theprocess of buying and selling contract commodity reserves shall be exempt from stamp duty, otherparties in the contract should pay the stamp duty shall also be subject to duty-payment according tothe parties. Property tax and land use tax of cities and towns shall be exempted from the property tax
and land use tax of cities and towns that undertake the business of commodity reserve for their ownuse. The notice will be executed on January 1, 2019 and will terminate on 31st December., 2021.
Jingliang (Hebei) Oil Industry Co., Ltd., a 4th subsidiary company of the Company, exempts thesale of edible vegetable oil stored by the government from VAT according to “Notice of the Ministryof Finance and the State Administration of Taxation on the Levy and Exemption of Value Added Taxfor Food Enterprises”（Cai Shui [1999] No.198）
Ⅴ. Changes in accounting policies, accounting estimates, and explanation of corrections toprevious errors
1. Changes in accounting policies
(1) The Company adopted the relevant provisions of Chinese Accounting Standards forBusiness Enterprises No.21 – Leases (Accounting (2018) No. 35) from January 1, 2021, and adjustedthe amounts of right-of-use assets, lease liabilities and other related items in the financial statementsbased on the cumulative effect number, without adjusting the information for the comparable periods.The change in accounting policy resulted in the following impacts
| Changes in accounting policies and reasons | Implication for the financial position and income |
| The new lease standard requires companies to separately present right-of-use assets and lease liabilities in the balance sheet (except short-term leases and leases of low-value assets). Among them, lease liabilities are usually divided into non-current liabilities and Current portion of non-current liabilities. In the income statement, the lessee should show the interest expense of the lease liabilities and the depreciation expense of the right-of-use assets separately. The interest expense of lease liabilities is shown in the financial expense. The main accounts affecting the statement are right-of-use assets, lease liabilities, and Current portion of non-current liabilities. The amount of retained earnings and other related items in the financial statements at the beginning of the year are adjusted according to the cumulative effect.No adjustment is made to the information of comparable periods. | The consolidated balance sheet as of January 1, 2021 presents right-of-use assets of 7,787,410.08yuan, current portion of non-current liabilities 1,154,817.69yuan, and lease liabilities of 1,459,723.40yuan. The parent company has no leasing business,so the change in accounting policy has no effect on the parent company's statement items. |
(2) The Company adopted the relevant provisions of Chinese Accounting Standards for Business
Enterprises No.14 (Financial accounting [2021] No. 1) from January 1, 2021 to adjust the openingamount of retained earnings and other related items in the financial statements based on thecumulative effect number, without adjusting the information for the comparable periods. This changein accounting policy has no impact on the Company's financial statement.
(3) The Company adopted the relevant provisions of Chinese Accounting Standards forBusiness Enterprises No.15 (Financial accounting [2021] No. 35) on "Presentation related tocentralized management of funds" on January 1, 2021, and if the financial statements of an enterprisebefore the issuance of the interpretation are not presented in accordance with the above provisions,the financial statement data of the comparable period shall be adjusted in accordance with thisinterpretation. The change in accounting policy has no impact on the Company's financialstatements.
2. Changes in accounting estimates
There is no change in accounting estimate during the reporting period.
3. Correction of previous accounting errors
There is no previous accounting error correction in this reporting period.
4. The Company implemented the new lease standard for the first time on January 1, 2021.The impact of the financial statements as January 1, 2021 is as follows：
Consolidated Balance Sheet
Monetary Unit: RMB Yuan
| Items | 31 December 2020 | 1 January 2021 | Adjustments |
| Current Assets: | |||
| Monetary capital | 335,466,169.61 | 335,466,169.61 | |
| Transactional financial assets | 63,478,071.73 | 63,478,071.73 | |
| Derivative financial assets | |||
| Notes receivable | 456,565.85 | 456,565.85 | |
| Accounts receivable | 92,245,667.60 | 92,245,667.60 | |
| Receivables financing | |||
| Prepayment | 282,343,218.05 | 282,234,970.05 | -108,248.00 |
| Other receivables | 541,905,656.97 | 541,905,656.97 | |
| Including: Interest receivable | |||
| Dividends receivable | |||
| Inventory | 1,225,083,742.26 | 1,225,083,742.26 | |
| Contract assets | |||
| Held-for-sale assets | |||
| Non-current assets due within one year | |||
| Other current assets | 845,450,678.36 | 845,450,678.36 | |
| Total current assets | 3,386,429,770.43 | 3,386,321,522.43 | -108,248.00 |
| Non-current assets: | |||
| Long-term equity investment | 217,762,487.79 | 217,762,487.79 | |
| Other equity instruments investment | 20,000,000.00 | 20,000,000.00 | |
| Other non-current financial assets | |||
| Investment property | 22,560,212.50 | 22,560,212.50 | |
| Fixed assets | 1,131,143,854.07 | 1,131,143,854.07 | |
| Construction in process | 28,458,413.67 | 28,458,413.67 | |
| Right-of-use assets | 7,787,410.08 | 7,787,410.08 | |
| Intangible assets | 354,139,335.32 | 354,139,335.32 | |
| Development expenditure | |||
| Goodwill | 191,394,422.51 | 191,394,422.51 | |
| Long-term deferred expenses | 20,529,601.50 | 15,464,980.51 | -5,064,620.99 |
| Deferred income tax assets | 3,346,814.27 | 3,346,814.27 |
| Items | 31 December 2020 | 1 January 2021 | Adjustments |
| Other non-current assets | 319,739,581.67 | 319,739,581.67 | |
| Total non-current assets | 2,309,074,723.30 | 2,311,797,512.39 | 2,722,789.09 |
| Total assets | 5,695,504,493.73 | 5,698,119,034.82 | 2,614,541.09 |
| Current liabilities: | |||
| Short-term borrowings | 1,497,414,079.05 | 1,497,414,079.05 | |
| Derivative financial liabilities | 371,219,136.84 | 371,219,136.84 | |
| Accounts payable | 75,384,075.39 | 75,384,075.39 | |
| Account collected in advance | 1,087,874.02 | 1,087,874.02 | |
| Contract liabilities | 346,874,260.90 | 346,874,260.90 | |
| Employee payroll payable | 33,345,136.94 | 33,345,136.94 | |
| Taxes payable | 50,884,214.64 | 50,884,214.64 | |
| Other payables | 72,292,881.24 | 72,292,881.24 | |
| Including: Interest payable | 21,082,795.47 | 21,082,795.47 | |
| Dividends payable | 11,013,302.88 | 11,013,302.88 | |
| Current portion of non-current liabilities | 1,154,817.69 | 1,154,817.69 | |
| Other current liabilities | 8,319,696.79 | 8,319,696.79 | |
| Total current liabilities | 2,456,821,355.81 | 2,457,976,173.50 | 1,154,817.69 |
| Non-current liabilities: | |||
| Long-term borrowings | |||
| Long-term payable to employees | 5,677,134.00 | 5,677,134.00 | |
| Estimated liabilities | |||
| Lease liabilities | 1,459,723.40 | 1,459,723.40 | |
| Deferred income | 68,716,699.34 | 68,716,699.34 | |
| Deferred income tax liabilities | 65,115,801.22 | 65,115,801.22 | |
| Other non-current liabilities | |||
| Total non-current liabilities | 139,509,634.56 | 140,969,357.96 | 1,459,723.40 |
| Total liabilities | 2,596,330,990.37 | 2,598,945,531.46 | 2,614,541.09 |
| Owners' equity (or Shareholders' equity): | |||
| Capital stock | 726,950,251.00 | 726,950,251.00 | |
| Other equity instruments | |||
| Including: Preferred stock | |||
| Perpetual capital bonds | |||
| Capital reserves | 1,674,828,350.95 | 1,674,828,350.95 |
| Items | 31 December 2020 | 1 January 2021 | Adjustments |
| Less: treasury stock | |||
| Other comprehensive income | -363,258.66 | -363,258.66 | |
| Special reserves | |||
| Surplus reserves | 122,122,436.98 | 122,122,436.98 | |
| Undistributed profit | 187,033,763.26 | 187,033,763.26 | |
| Total equity attributable to the parent company | 2,710,571,543.53 | 2,710,571,543.53 | |
| Minority equity | 388,601,959.83 | 388,601,959.83 | |
| Total owners' equity (or shareholders' equity) | 3,099,173,503.36 | 3,099,173,503.36 | - |
| Total liabilities and owners' equity (or shareholders' equity) | 5,695,504,493.73 | 5,698,119,034.82 | 2,614,541.09 |
Ⅵ. Notes on Items in Consolidated Financial StatementsNote: The ‘beginning’ of the period refers to January 1, 2021 and the ‘end’ of the period refersto December 31, 2021. The previous period refers to the year 2020 and the current period refers tothe year 2021
1. Monetary funds
(1) Classification list
| Items | Ending Balance | Beginning Balance |
| Cash | 15,012.17 | 16,761.72 |
| Bank Deposits | 465,853,913.24 | 299,235,964.61 |
| Other Currency Funds | 41,275,743.04 | 36,213,443.28 |
| Total | 507,144,668.45 | 335,466,169.61 |
| Among them: the total amount of money deposited abroad | 16,432,706.23 | 3,153,447.17 |
(2) At the end of the period, there are 215,857.76yuan of freezing and other restricted funds. Ofthis amount, 166,353.66yuan was unfrozen before the reporting date.
(3) At the end of the period, there is no funds deposited abroad and the return of funds isrestricted.
2. Transactional financial assets
| Items | Ending Balance | Beginning Balance |
| Financial assets measured at fair value with changes included in current profits and losses | 40,377,048.08 | 63,478,071.73 |
| Among them: debt instrument investment | 40,377,048.08 | 63,478,071.73 |
| Total | 40,377,048.08 | 63,478,071.73 |
3. Notes receivable
(1) Classification list
| Items | Ending Balance | Beginning Balance |
| Bank acceptance bill | 456,565.85 | |
| Commercial acceptance bill | ||
| Total | 456,565.85 |
4. Accounts Receivable
（1）Disclosed according to aging
| Aging | Ending Balance |
| Within 1 Year (including 1 year) | 74,560,540.98 |
| Among them: Within the credit (within 3 months) | 65,852,621.38 |
| Credit period to 1 year | 8,707,919.60 |
| 1 to 2 years (including 2 years) | 8,594,045.46 |
| 2 to 3 years (including 3 years) | 996,000.00 |
| 3 to 4 years (including 4 years) | |
| 4 to 5 years (including 5 years) | 18,711.89 |
| More than 5 years | 433,259.50 |
| Sub-total | 84,602,557.83 |
| Less Bad Debt provision | 1,908,463.21 |
| Total | 82,694,094.62 |
（2）Present according to the method of provision for bad debt
| Type(s) | Ending Balance | ||||
| Book Balance | Bad Debt Provision | Book Value | |||
| Amount | Ratio(%) | Amount | Provision Ratio(%) | ||
| Separate provision for bad debts | 1,324,259.50 | 1.57 | 1,324,259.50 | 100.00 | |
| Portfolio provision for bad debts | 83,278,298.33 | 98.43 | 584,203.71 | 0.70 | 82,694,094.62 |
| Among them: portfolio 1 | 74,329,280.51 | 87.86 | 584,203.71 | 0.79 | 73,745,076.80 |
| portfolio 2 | 8,949,017.82 | 10.58 | 8,949,017.82 | ||
| Total | 84,602,557.83 | 100.00 | 1,908,463.21 | 82,694,094.62 | |
（Continued）
| Type(s) | Beginning Balance | ||||
| Book Balance | Bad Debt Provision | Book Value | |||
| Amount | Ratio(%) | Amount | Provision Ratio(%) | ||
| Separate provision for bad debts | 1,325,135.40 | 1.41 | 1,325,135.40 | 100.00 | |
| Portfolio provision for bad debts | 92,402,126.21 | 98.59 | 156,458.61 | 0.17 | 92,245,667.60 |
| Among them: portfolio 1 | 69,364,375.49 | 74.01 | 156,458.61 | 0.23 | 69,207,916.88 |
| portfolio 2 | 23,037,750.72 | 24.58 | 23,037,750.72 | ||
| Total | 93,727,261.61 | 一一 | 1,481,594.01 | 一一 | 92,245,667.60 |
A. Separate provision for bad debts
| Name | Ending Balance | |||
| Accounts Receivable | Bad Debt Provision | Provision Ratio | Provision Reason | |
| Beijing Xidan spicy town food limited | 996,000.00 | 996,000.00 | 100.00 | expected unrecoverable |
| Beijing Rongfa Lida Grain and Oil Trade Co., Ltd. | 163,143.00 | 163,143.00 | 100.00 | expected unrecoverable |
| Others | 165,116.50 | 165,116.50 | 100.00 | expected unrecoverable |
| Total | 1,324,259.50 | 1,324,259.50 | －－ | －－ |
B. Portfolio provision for bad debts
1. Portfolio provision: aging portfolio
| Name | Ending Balance | Beginning Balance | |||||
| Accounts receivable | Bad Debt Provision | Provision Ratio | Accounts receivable | Bad Debt Provision | Provision Ratio | ||
| Within 1 Year (including 1 year) | 65,611,523.16 | 34,531.93 | 69,026,628.09 | 7,466.13 | |||
| Among them: Within the credit (within 3 months) | 63,884,932.01 | 0 | 68,653,321.59 | 0 | |||
| Credit period to 1 year | 1,726,591.15 | 34,531.93 | 2 | 373,306.50 | 7,466.13 | 2 | |
| 1 to 2 years (including 2 years) | 8,594,045.46 | 429,702.27 | 5 | 137,267.48 | 6,863.37 | 5 | |
| 2 to 3 years (including 3 years) | 20 | 31,789.50 | 6,357.90 | 20 | |||
| Name | Ending Balance | Beginning Balance | |||||
| Accounts receivable | Bad Debt Provision | Provision Ratio | Accounts receivable | Bad Debt Provision | Provision Ratio | ||
| 3 to 4 years (including 4 years) | 50 | 45,270.42 | 22,635.21 | 50 | |||
| 4 to 5 years (including 5 years) | 18,711.89 | 14,969.51 | 80 | 51,420.00 | 41,136.00 | 80 | |
| More than 5 years | 105,000.00 | 105,000.00 | 100 | 72,000.00 | 72,000.00 | 100 | |
| Total | 74,329,280.51 | 584,203.71 | 69,364,375.49 | 156,458.61 | |||
2. Portfolio provision: related parties portfolio
| Name | Ending Balance | Beginning Balance | ||||
| Accounts receivable | Bad Debt Provision | Provision Ratio | Accounts receivable | Bad Debt Provision | Provision Ratio | |
| Related parties portfolio | 8,949,017.82 | 23,037,750.72 | ||||
| Total | 8,949,017.82 | 23,037,750.72 | ||||
3. details of bad debt provision
| Items | Beginning Balance | The amount changed for the period | Ending Balance | |||
| Addition | Withdrawal or reversal | Write-off | Other changes | |||
| Bad debt provision on individual basis | 1,325,135.40 | 875.90 | 1,324,259.50 | |||
| Credit impairment loss | 156,458.61 | 446,165.10 | 18,420.00 | 584,203.71 | ||
| Total | 1,481,594.01 | 446,165.10 | 875.90 | 18,420.00 | 1,908,463.21 | |
4.Accounts receivable actually written off in the current period
| Items | Write-off amount |
| Actual amount | 18,420.00 |
During the period, the board of directors approved to write off the Beijing branch of HainanFood Holdings Co., Ltd. and to write off the uncollectible receivables.
5. Accounts Receivable of the Top 5 Balances Collected by Debtors at the End of the Period
| Debtors | Accounts receivable | Ratio of totalaccounts receivable (%) | Aging | Whether related | Bad Debt Provision |
| Tangshan Caofeidian District Finance Bureau | 25,997,336.04 | 30.73 | Within 3 months, 1-2 years | No | 374,974.00 |
| Debtors | Accounts receivable | Ratio of totalaccounts receivable (%) | Aging | Whether related | Bad Debt Provision |
| Zhejiang Lvqin Supply Chain Management Co., Ltd. | 9,215,135.62 | 10.89 | Within 3 months | No | |
| Wumart South Development Co., Ltd. | 4,459,551.94 | 5.27 | 4-12 months | No | 30,502.52 |
| Shanghai Laiyifen Co.,Ltd. | 3,446,650.77 | 4.07 | Within 3 months | No | |
| Feed Branch of Beijing Sanyuan Seed Technology Co., Ltd. | 3,000,236.98 | 3.55 | Within 3 months | No | |
| Total | 46,118,911.35 | 54.51 | —— | —— | 405,476.52 |
5. Advanced Payment
(1) Advances are presented by age
| Aging | Ending Balance | Beginning Balance | ||
| Amount | Ratio(%) | Amount | Ratio(%) | |
| Within 1 year (including 1 year) | 87,713,762.15 | 99.90 | 282,123,364.15 | 99.96 |
| 1 to 2 years (including 2 years) | 90,000.00 | 0.10 | 88,505.90 | 0.03 |
| 2 to 3 years (including 3 years) | ||||
| More than 3 years | 23,100.00 | 0.01 | ||
| Total | 87,803,762.15 | 100.00 | 282,234,970.05 | 100.00 |
(2) Advance payment of the top five Ending Balances by prepaid objects
| Debtor Name | Ending Balance | Ratio of the total ending balance of prepayments (%) |
| TIANJIN CUSTOMS DISTRICT P.R.CHINA | 31,704,415.67 | 36.11 |
| Sinograin Oils Corporation | 12,362,849.07 | 14.08 |
| Ahcof International Development Co., Ltd. | 11,037,512.77 | 12.57 |
| Cargill Ventures (China) Co., Ltd. | 9,540,000.00 | 10.87 |
| Louis Dreyfus (Tianjin) International Trade Co., Ltd | 6,603,326.46 | 7.52 |
| Total | 71,248,103.97 | 81.15 |
6. Other Receivables
A. Overview
(1) Classification
| Item(s) | Ending Balance | Beginning Balance |
| Interest Receivable | ||
| Dividend Receivable | ||
| Other Receivables | 284,756,636.27 | 541,905,656.97 |
| Total | 284,756,636.27 | 541,905,656.97 |
B. Other Receivables
（1）Disclosed according to aging
| Aging | Ending Balance |
| Within 1 Year (including 1 year) | 283,134,947.28 |
| Among them: Within the credit (within 3 months) | 211,108,084.83 |
| Credit period to 1 year | 72,026,862.45 |
| 1 to 2 years (including 2 years) | 885,837.00 |
| 2 to 3 years (including 3 years) | 213,638.00 |
| 3 to 4 years (including 4 years) | 99,713.99 |
| 4 to 5 years (including 5 years) | 130,000.00 |
| More than 5 years | 393,197.85 |
| Sub-Total | 284,857,334.12 |
| Less Bad Debt provision | 100,697.85 |
| Total | 284,756,636.27 |
（2）Classification of other receivables by nature of funds
| Nature of Funds | Book Balance at End of Period | Book Balance at Beginning of Year |
| Guaranteed Deposit and Deposit | 277,445,730.08 | 535,330,041.21 |
| Intercourse Funds of Units | 6,142,777.03 | 5,472,834.58 |
| Employee Receivables | 755,783.37 | 532,115.87 |
| Tax Refund Receivables | 363,103.93 | 302,433.21 |
| Personal Intercourse Funds | 50,000.00 | |
| Others | 149,939.71 | 274,695.69 |
| Total | 284,857,334.12 | 541,962,120.56 |
C. Details about allowance for bad debt
| Provision for bad debt | Stage 1 | Stage 2 | Stage 3 | Total |
| Expected credit loss in the next 12 months | Expected credit loss for the whole period (no credit impairment) | Expected credit loss for the whole period (with credit impairment) | ||
| Amount on 1st January 2021 | 6,463.59 | 50,000.00 | 56,463.59 | |
| Carrying amount on 1st January 2021 that in this period: | ||||
| ——Get into Stage 2 | ||||
| ——Get into Stage 3 | ||||
| ——Get back to Stage 2 | ||||
| ——Get back to Stage 1 | ||||
| Provision for the period | 94,234.26 | 94,234.26 | ||
| Reverse for the period | ||||
| Transfer for the period | ||||
| Write off for the period | 50,000.00 | 50,000.00 | ||
| Other changes | ||||
| Amount on 31st December 2021 | 100,697.85 | 100,697.85 |
D. Details of bad debt provision
| Type | Carrying amount at the beginning | Amount changes for the period | Carrying amount at the end | |||
| Addition | Withdrawal or reversal | Write-off | Other changes | |||
| Credit impairment loss | 56,463.59 | 94,234.26 | 50,000.00 | 100,697.85 | ||
| Total | 56,463.59 | 94,234.26 | 50,000.00 | 100,697.85 | ||
E. Other receivables actually written off in the current period
| Items | Write-off amount |
| Actual amount | 50,000.00 |
During the period, the board of directors approved to write off the Beijing branch of HainanFood Holdings Co., Ltd. and to write off the uncollectible receivables
F. Other receivables according to top five of balance at end of period collected by debtors
| Name of Organization | Nature of Funds | Balance at End of Period | Aging | Proportion in overall ending balance of other receivables (%) | Ending balance of bad debt reserves |
| Zhongtian Futures Co. Ltd | Futures margin | 94,315,663.80 | Within 1 year | 33.11 | |
| Haitong Futures Co., Ltd | Futures margin | 89,987,154.70 | Within 1 year | 31.59 | |
| Sdic Cgog Futures Co., Ltd. | Futures margin | 28,434,143.60 | Within 1 year | 9.98 | |
| Dalian Commodity Exchange | Futures margin | 23,269,880.00 | Within 1 year | 8.17 | |
| ADM International Sarl | Futures margin | 19,127,100.00 | Within 1 year | 6.71 | |
| Total | — | 255,133,942.10 | — | 89.57 |
G. Receivables related to government grants
| Name of the grant company | Name of government grants | Carrying amount at the end | Aging at the end of the period | Time, amount and evidence of expected collection |
| Tax Bureau of Linan DIatrict, Hangzhou, Zhejiang Province | Refund of VAT | 363,103.93 | Within 3 months | All amount will be collected in January 2022, the company always qualify for tax refund policy for disabled person |
| Total | —— | 363,103.93 | —— | —— |
7. Inventory
(1) Inventory Category
| Items | Ending Balance | Beginning Balance | ||||
| Book Balance | Falling Price Reserves | Book Value | Book Balance | Falling Price Reserves | Book Value | |
| Raw Materials | 120,983,829.85 | 120,997.67 | 120,862,832.18 | 303,448,302.51 | 303,448,302.51 | |
| Revolving Materials | 5,247,229.29 | 5,247,229.29 | 5,520,559.22 | 5,520,559.22 | ||
| Goods and materials in transit | 522,101,505.11 | 522,101,505.11 | 36,413,482.38 | 36,413,482.38 | ||
| Inventory goods | 1,007,319,237.46 | 355,731.86 | 1,006,963,505.60 | 622,783,856.56 | 233,790.56 | 622,550,066.00 |
| Items | Ending Balance | Beginning Balance | ||||
| Book Balance | Falling Price Reserves | Book Value | Book Balance | Falling Price Reserves | Book Value | |
| Development costs | 2,415,243.42 | 2,415,243.42 | ||||
| Developing commodities | 5,315,696.54 | 1,539,741.69 | 3,775,954.85 | |||
| Commission processing | 2,762,633.88 | 2,762,633.88 | ||||
| Replacement of oil reserve | 248,197,500.00 | 248,197,500.00 | 248,197,500.00 | 248,197,500.00 | ||
| Total | 1,903,849,301.71 | 476,729.53 | 1,903,372,572.18 | 1,226,857,274.51 | 1,773,532.25 | 1,225,083,742.26 |
(2) Inventory Falling Price Reserves and provision for impairment of contract performancecosts
| Items | Balance at Beginning of Year | Increased Amounts in the Current Period | Decreased Amounts in the Current Period | Balance at End of Period | ||
| Accrual | Others | Recover or Charge Off | Others | |||
| Stock Goods | 233,790.56 | 185,390.40 | 63,449.10 | 355,731.86 | ||
| Develop Products | 1,539,741.69 | 1,539,741.69 | ||||
| Raw material | 120,997.67 | 120,997.67 | ||||
| In total | 1,773,532.25 | 306,388.07 | 63,449.10 | 1,539,741.69 | 476,729.53 | |
Note: the basis for the provision of depreciation is the market quotation of the world granarywebsite. The other reason is that the development commodities are adjusted to the investment realestate, and the corresponding price adjustment is adjusted synchronously.(
（3）Stock Goods listed by major product type
| Items | Ending Balance | Beginning Balance | ||||
| Book Balance | Falling Price Reserves | Book Value | Book Balance | Falling Price Reserves | Book Value | |
| Grease and oils | 975,554,568.82 | 170,341.46 | 975,384,227.36 | 594,886,731.71 | 233,790.56 | 594,652,941.15 |
| Food | 31,764,668.64 | 185,390.40 | 31,579,278.24 | 27,880,182.78 | 27,880,182.78 | |
| Others | 16,942.07 | 16,942.07 | ||||
8. Non-current assets due within one year
| Items | Balance at End of Period | Balance at Beginning of Period |
| Three-year term deposits | 156,139,100.00 | |
| In total | 156,139,100.00 |
9. Other Current Assets
| Items | Balance at End of Period | Balance at Beginning of Period |
| Financial Products | 742,800,000.00 | 280,000,000.00 |
| Pre-paid Taxes and Fees | 1,192,806.93 | 16,921,026.50 |
| Pending Deduct VAT Input Tax | 13,930,489.13 | 46,701,271.74 |
| Fair Value Changes of Items Trapped at Hedging | 62,577,325.41 | 501,828,380.12 |
| In total | 820,500,621.47 | 845,450,678.36 |
10. Long-term Equity Investment
| Invested Unit | Balance at Beginning of Year | Increase or Decrease in the Current Period | ||
| Additional Investment | Negative Investment | Confirmed Profit and Loss on Investment under Equity Law | ||
| 1. Cooperative Enterprise | ||||
| Beijing CHIA TAI Feedmill Limited | 90,824,898.49 | 21,297,148.65 | ||
| Sub-total | 90,824,898.49 | 21,297,148.65 | ||
| 2. Joint Venture | ||||
| China Grain Reserves (Tianjin) Warehouse Logistics Co., Ltd. | 119,601,316.43 | 16,973,446.46 | ||
| Jingliang Mismi Catering Management (Beijing) Co., Ltd. | 7,336,272.87 | -448,014.87 | ||
| Sub-total | 126,937,589.30 | 16,525,431.59 | ||
| Total | 217,762,487.79 | 37,822,580.24 | ||
Items
| Items | Ending Balance | Beginning Balance | ||||
| Book Balance | Falling Price Reserves | Book Value | Book Balance | Falling Price Reserves | Book Value | |
| Total | 1,007,319,237.46 | 355,731.86 | 1,006,963,505.60 | 622,783,856.56 | 233,790.56 | 622,550,066.00 |
(Continued)
| Increase or Decrease in the Current Period | Balance at End of Period | Ending Balance of Impairment Reserves | ||||
| Adjustment of other comprehensive income | Other changes in equity | Announce to Distribute Case Dividends or Profits | Accrual of Impairment Reserves | Others | ||
| -105,630.50 | 112,016,416.64 | |||||
| -105,630.50 | 112,016,416.64 | |||||
| -24,680,000.00 | 111,894,762.89 | |||||
| 6,888,258.00 | ||||||
| -24,680,000.00 | 118,783,020.89 | |||||
| -105,630.50 | -24,680,000.00 | 230,799,437.53 | ||||
11. Other equity instruments investment
| Item | Ending Balance | Beginning Balance |
| Chongqing long jinbao network technology co. LTD | 20,000,000.00 | 20,000,000.00 |
| China Net Technology Investment Co., Ltd | ||
| Hainan General Chamber of Commerce | ||
| Total | 20,000,000.00 | 20,000,000.00 |
12. Investment Real Estate
(1) Investment Real Estate Adopting Cost Measurement Model
| Items | Buildings | Land Use Right | Projects under Construction | Total |
| One. Original Book Value | ||||
| 1. Balance at Beginning of Year | 53,844,801.60 | 53,844,801.60 | ||
| 2. Increased Amounts in the Current Period | ||||
| (1) Outsourcing | ||||
| (2) Inventory transfer | ||||
| (3) Others | ||||
| 3. Decreased Amounts in the Current Period | ||||
| (1) Disposal |
| Items | Buildings | Land Use Right | Projects under Construction | Total |
| (2) Other transfer out | ||||
| 4. Balance at End of Period | 53,844,801.60 | 53,844,801.60 | ||
| Two. Accumulated Impairment and Accumulated Amortization | ||||
| 1. Balance at Beginning of Year | 20,696,792.40 | 20,696,792.40 | ||
| 2. Increased Amounts in the Current Period | 1,634,528.94 | 1,634,528.94 | ||
| (1) Accrual or Amortization | 1,634,528.94 | 1,634,528.94 | ||
| 3. Decreased Amounts in the Current Period | ||||
| (1) Disposal | ||||
| (2) Other transfer out | ||||
| 4. Balance at End of Period | 22,331,321.34 | 22,331,321.34 | ||
| Three. Impairment Reserves | ||||
| 1. Balance at Beginning of Year | 10,587,796.70 | 10,587,796.70 | ||
| 2. Increased Amounts in the Current Period | ||||
| (1) Accrual | ||||
| (2) Inventory transfer | ||||
| 3. Decreased Amounts in the Current Period | ||||
| (1) Disposal | ||||
| (2) Other transfer out | ||||
| 4. Balance at End of Period | 10,587,796.70 | 10,587,796.70 | ||
| Four. Book Value | ||||
| 1. Book Value at End of Period | 20,925,683.56 | 20,925,683.56 | ||
| 2. Book Value at Beginning of Year | 22,560,212.50 | 22,560,212.50 |
13. Fixed Assets
1. Overview
(1) Classification
| Items | Balance at End of Period | Balance at Beginning of Year |
| Fixed Assets | 1,120,758,409.49 | 1,131,143,854.07 |
| Items | Balance at End of Period | Balance at Beginning of Year |
| Disposal of Fixed Assets | ||
| In total | 1,120,758,409.49 | 1,131,143,854.07 |
2. Fixed Assets
(1) Fixed Assets Situation
| Items | Buildings | Machinery Equipment | Transportation Equipment | Electronic Equipment | Office Equipment | Others | Total |
| One. Original Book Value | |||||||
| 1. Balance at Beginning of Year | 1,078,081,803.33 | 749,741,236.96 | 21,309,684.25 | 12,169,795.89 | 6,663,883.31 | 1,982,310.67 | 1,869,948,714.41 |
| 2. Increased Amounts in the Current Period | 42,680,307.70 | 42,033,084.81 | 1,802,302.05 | 919,994.36 | 621,378.05 | 108,733.24 | 88,165,800.21 |
| (1) Purchase | 1,039,623.58 | 7,384,654.28 | 1,802,302.05 | 919,994.36 | 621,378.05 | 108,733.24 | 11,876,685.56 |
| (2) Roll-in of Project under Construction | 36,324,987.58 | 34,648,430.53 | 70,973,418.11 | ||||
| (3) Roll-in of inventory | 5,315,696.54 | 5,315,696.54 | |||||
| 3. Decreased Amounts in the Current Period | 891,569.09 | 2,922,000.97 | 2,085,057.38 | 687,299.34 | 147,651.28 | 449,747.42 | 7,183,325.48 |
| (1) Disposal or Scrap | 891,569.09 | 2,922,000.97 | 2,085,057.38 | 687,299.34 | 147,651.28 | 449,747.42 | 7,183,325.48 |
| 4. Balance at End of Period | 1,119,870,541.94 | 788,852,320.80 | 21,026,928.92 | 12,402,490.91 | 7,137,610.08 | 1,641,296.49 | 1,950,931,189.14 |
| Two. Accumulated Impairment | |||||||
| 1. Balance at Beginning of Year | 339,519,183.27 | 364,190,293.60 | 14,229,852.32 | 7,539,317.97 | 5,075,816.87 | 665,353.83 | 731,219,817.86 |
| 2. Increased Amounts in the Current Period | 39,480,369.58 | 52,269,780.02 | 1,448,240.33 | 1,413,475.10 | 567,746.97 | 125,917.77 | 95,305,529.77 |
| (1) Accrual | 39,480,369.58 | 52,269,780.02 | 1,448,240.33 | 1,413,475.10 | 567,746.97 | 125,917.77 | 95,305,529.77 |
| 3. Decreased Amounts in the Current Period | 148,227.91 | 2,404,765.02 | 1,953,615.85 | 628,850.09 | 140,755.67 | 199,225.17 | 5,475,439.71 |
| (1) Disposal or Scrap | 148,227.91 | 2,404,765.02 | 1,953,615.85 | 628,850.09 | 140,755.67 | 199,225.17 | 5,475,439.71 |
| Items | Buildings | Machinery Equipment | Transportation Equipment | Electronic Equipment | Office Equipment | Others | Total |
| 4. Balance at End of Period | 378,851,324.94 | 414,055,308.60 | 13,724,476.80 | 8,323,942.98 | 5,502,808.17 | 592,046.43 | 821,049,907.92 |
| Three. Impairment Reserves | |||||||
| 1. Balance at Beginning of Year | 7,508,217.44 | 76,825.04 | 7,585,042.48 | ||||
| 2. Increased Amounts in the Current Period | 1,539,741.69 | 1,539,741.69 | |||||
| (1) Accrual | |||||||
| (2) Roll-in of inventory | 1,539,741.69 | 1,539,741.69 | |||||
| 3. Decreased Amounts in the Current Period | 1,912.44 | 1,912.44 | |||||
| (1) Disposal or Scrap | 1,912.44 | 1,912.44 | |||||
| 4. Balance at End of Period | 9,047,959.13 | 74,912.60 | 9,122,871.73 | ||||
| Four. Book Value | |||||||
| 1. Book Value at End of Period | 731,971,257.87 | 374,722,099.60 | 7,302,452.12 | 4,078,547.93 | 1,634,801.91 | 1,049,250.06 | 1,120,758,409.49 |
| 2. Book Value at Beginning of Year | 731,054,402.62 | 385,474,118.32 | 7,079,831.93 | 4,630,477.92 | 1,588,066.44 | 1,316,956.84 | 1,131,143,854.07 |
(2) Fixed assets without property right certificate
| Project | Book Value | Reasons for failure to complete certificate of title |
| Buildings | 2,236,948.76 | No title certificate for auxiliary assets |
14. Project under Construction
1. Overview
(1) Classification
| Items | Balance at End of Period | Balance at Beginning of Year |
| Project under Construction | 11,220,840.10 | 28,458,413.67 |
| Total | 11,220,840.10 | 28,458,413.67 |
2. Project under Construction
(1) Situation of Project under Construction
| Items | Balance at End of Period | Balance at Beginning of Year | ||||
| Book Balance | Impairment Reserves | Book Value | Book Balance | Impairment Reserves | Book Value | |
| 1. roasted potato supporting automation line project | 6,986,820.05 | 6,986,820.05 | ||||
| 2. Walnut cake production line of No.2 plant | 4,234,344.00 | 4,234,344.00 | 4,780,643.33 | 4,780,643.33 | ||
| 3. slope treatment project of No.3 plant | 3,584,245.07 | 3,584,245.07 | 3,565,377.15 | 3,565,377.15 | ||
| 4. add two 4D Corn Flake production lines | 3,207,668.25 | 3,207,668.25 | ||||
| 5. 32,400 tons of oil tank and terminal oil pipeline project | 2,869,993.38 | 2,869,993.38 | ||||
| 6. 2600bph project of packaging oil 10L production line | 2,809,734.52 | 2,809,734.52 | ||||
| 7. New production line of small fried compound potato chips in leisure No.1 Factory | 1,784,537.82 | 1,784,537.82 | ||||
| 8. New production line of fried potato chips | 2,038,825.39 | 2,038,825.39 | ||||
| 9. Fried potato chips automation transformation project and others | 1,552,470.00 | 1,552,470.00 | ||||
| 10. Others | 1,363,425.64 | 1,363,425.64 | 901,169.17 | 901,169.17 | ||
| Total | 11,220,840.10 | 11,220,840.10 | 28,458,413.67 | 28,458,413.67 | ||
(2) Change Condition of Important Engineering Projects under Construction in the Current Period
| Project Name | Balance at Beginning of Year | Increased Amounts in the Current Period | Roll-in Fixed Assets Amount in the Current Period | Other Decreased Amounts in the Current Period | Balance at End of Period |
| Baked potato supporting automation line project | 6,986,820.05 | 7,468,869.13 | 14,455,689.18 | ||
| Walnut cake production line of No.2 factory | 4,780,643.33 | 1,525,769.90 | 2,072,069.23 | 4,234,344.00 | |
| Slope treatment project of No.3 Factory | 3,565,377.15 | 18,867.92 | 3,584,245.07 | ||
| Two new 4D Corn Flake production lines | 3,207,668.25 | 1,939,772.10 | 5,147,440.35 | ||
| 32400 ton oil tank and wharf oil pipeline project | 2,869,993.38 | 30,888,177.59 | 33,758,170.97 | ||
| 2600bph project of packaging oil 10L production line | 2,809,734.52 | 2,809,734.52 | |||
| Production line of baked potato workshop in No.2 factory | 1,784,537.82 | 790,120.35 | 2,574,658.17 | ||
| Fried potato chips automation transformation project and others | 1,552,470.00 | 738,638.94 | 2,291,108.94 | ||
| New production line of fried potato chips | 2,038,825.39 | 2,038,825.39 | |||
| Total | 27,557,244.50 | 45,409,041.32 | 63,108,871.36 | 9,857,414.46 |
（3）There was no provision for impairment of Project under Construction during the period.
15. Right-of-use asset
| Items | Buildings | Transportation Equipment | Land Use Right | In total |
| One Original Book Value | ||||
| 1. Balance at Beginning of Year | 2,614,541.09 | 202,276.99 | 4,970,592.00 | 7,787,410.08 |
| 2. Increased Amounts in the Current | 1,808,764.67 | 1,808,764.67 |
| Items | Buildings | Transportation Equipment | Land Use Right | In total |
| Period | ||||
| (1) Lease | 1,808,764.67 | 1,808,764.67 | ||
| 3. Decreased Amounts in the Current Period | ||||
| (1) Expiration of the lease or change the lease term | ||||
| 4. Balance at End of Period | 4,423,305.76 | 202,276.99 | 4,970,592.00 | 9,596,174.75 |
| Two Accumulated Depreciation | ||||
| 1. Balance at Beginning of Year | ||||
| 2. Increased Amounts in the Current Period | 1,337,882.83 | 99,917.64 | 112,968.00 | 1,550,768.47 |
| (1) Accrual | 1,337,882.83 | 99,917.64 | 112,968.00 | 1,550,768.47 |
| 3. Decreased Amounts in the Current Period | ||||
| Lease expiration or change | ||||
| 4. Balance at End of Period | 1,337,882.83 | 99,917.64 | 112,968.00 | 1,550,768.47 |
| Three Impairment Reserves | ||||
| 1. Balance at Beginning of Year | ||||
| 2. Increased Amounts in the Current Period | ||||
| (1) Accrual | ||||
| 3. Decreased Amounts in the Current Period | ||||
| (1) Disposal | ||||
| 4. Balance at End of Period | ||||
| Four Book Value | ||||
| 1. Book Value at End of Period | 3,085,422.93 | 102,359.35 | 4,857,624.00 | 8,045,406.28 |
| 2. Book Value at Beginning of Year | 2,614,541.09 | 202,276.99 | 4,970,592.00 | 7,787,410.08 |
16. Intangible Assets
(1) Intangible Assets Situation
| Items | Software | Land Use Right | Trademark Right | Others | In total |
| One Original Book Value | |||||
| 1. Balance at Beginning of Year | 4,333,374.75 | 316,407,869.54 | 154,841,200.00 | 689,220.00 | 476,271,664.29 |
| Items | Software | Land Use Right | Trademark Right | Others | In total |
| 2. Increased Amounts in the Current Period | 660,369.00 | 660,369.00 | |||
| (1) Purchase | 660,369.00 | 660,369.00 | |||
| 3. Decreased Amounts in the Current Period | 26,820.00 | 26,820.00 | |||
| (1) Disposal | 26,820.00 | 26,820.00 | |||
| 4. Balance at End of Period | 4,993,743.75 | 316,407,869.54 | 154,841,200.00 | 662,400.00 | 476,905,213.29 |
| Two Accumulated Amortization | |||||
| 1. Balance at Beginning of Year | 3,597,758.64 | 61,830,987.64 | 56,035,371.69 | 5,811.00 | 121,469,928.97 |
| 2. Increased Amounts in the Current Period | 284,814.28 | 6,809,477.31 | 7,713,925.86 | 1,788.00 | 14,810,005.45 |
| (1) Accrual | 284,814.28 | 6,809,477.31 | 7,713,925.86 | 1,788.00 | 14,810,005.45 |
| 3. Decreased Amounts in the Current Period | 7,599.00 | 7,599.00 | |||
| (1) Disposal | 7,599.00 | 7,599.00 | |||
| 4. Balance at End of Period | 3,882,572.92 | 68,640,464.95 | 63,749,297.55 | - | 136,272,335.42 |
| Three Impairment Reserves | |||||
| 1. Balance at Beginning of Year | 662,400.00 | 662,400.00 | |||
| 2. Increased Amounts in the Current Period | |||||
| (1) Accrual | |||||
| 3. Decreased Amounts in the Current Period | |||||
| (1) Disposal | |||||
| 4. Balance at End of Period | 662,400.00 | 662,400.00 | |||
| Four Book Value | |||||
| 1. Book Value at End of Period | 1,111,170.83 | 247,767,404.59 | 91,091,902.45 | 339,970,477.87 | |
| 2. Book Value at Beginning of Year | 735,616.11 | 254,576,881.90 | 98,805,828.31 | 21,009.00 | 354,139,335.32 |
17. Goodwill
(1) Original Book Value of Goodwill
| Name of Invested Unit or Items | Balance at Beginning of | Increase in the Current Period | Decrease in the Current Period | Balance at End of |
| Forming Goodwill | Year | Formed by Enterprise Merger | Others | Disposal | Others | Period |
| Acquire stock shares of Zhejiang Xiaowangzi Food Co., Ltd. | 191,394,422.51 | 191,394,422.51 | ||||
| In total | 191,394,422.51 | 191,394,422.51 |
(2) Relevant information about the group or groups of assets that include goodwill
| Book value of goodwill | Asset group or portfolio of asset groups | |||
| Main components | Book value | Determination method | Is there any change in the current period | |
| 191,394,422.51 | Fixed assets, investment real estate, intangible assets, construction in progress, etc | 835,262,103.15 | Income method | No |
Note: Taking December 31, 2021 as the base date of evaluation, Beijing Jinggrain Food Co., Ltd.conducted impairment tests on the goodwill l formed by the acquisition of the equity of ZhejiangLittle Prince Food Co., Ltd. The book value of the asset group including goodwill was 835.26million yuan, and the recoverable amount was no less than 843.20 million yuan. The test resultsshowed that there was no impairment of goodwill.
The component of group or groups of assets: impairment test for goodwill related asset as groupof asset, main cash in is independent from cash in of other group of assets, this group of assetsshould be consistent with the group of assets that was recognized in the impairment test of goodwillon acquisition date and previous years.
(3) Recognition method of goodwill impairment loss and process, key assumptions and keyparameters of goodwill test
1) At the end of the period, the company performed an impairment test on the asset grouprelated to goodwill. When performing an impairment test on a related asset group or asset groupcombination that includes goodwill, if there is an impairment of the asset group or asset groupcombination related to goodwill If there are signs, an impairment test is performed on the asset groupor combination of asset groups that does not include goodwill, and the recoverable amount iscalculated and compared with the book value to confirm the corresponding impairment loss. Thenperform an impairment test on the asset group or asset group combination that includes goodwill, andcompare the book value of the asset group or asset group combination that contains the distributedgoodwill with its recoverable amount. If the relevant asset group or asset group combination is
recoverable, The amount is lower than its book value, and the impairment loss of goodwill isrecognized.
2) Important key assumptions adopted and their basis: 1. As for the actual situation of assets onthe evaluation base date, it is assumed that the company continues to operate; 2. Assume that thecash inflows rated as units after the evaluation base date are uniform inflows, and cash outflows areuniform outflows; 3.On the basis of the existing management methods and management levels, thecompany's business scope and methods are consistent with the current direction; 4. There will be nomajor changes in the interest rates, exchange rates, taxation benchmarks and tax rates, and policylevy fees; 5. The management of the unit being assessed is responsible, stable and capable ofperforming its duties.3）Key parameter
| Item | Forecast period | Revenue growth rate over the forecast period | Revenue growth rate over the stable period | Profit margin | Pre-tax discount rate |
| Zhejiang Little Prince Food Co., Ltd. | 2022 to 2025 | 2.10% | 0 | Calculated based on forecasted revenue, costs, expenses, etc. | 15.47% |
(4) Impact of goodwill impairment test
After testing, the company's goodwill formed by the acquisition of the operating asset group ofZhejiang Little Prince Food Co., Ltd. is not impaired.
18. Long-term Unamortized Expenses
| Items | Balance at Beginning of Year | Increased Amounts in the Current Period | Amortized Amounts in the Current Period | Other Decreased Amounts | Balance at End of Period |
| Reconstruction of majuqiao plant | 14,888,320.13 | 674,188.08 | 14,214,132.05 | ||
| Amortization of laboratory decoration costs | 1,837,732.69 | 26,601.98 | 1,811,130.71 | ||
| Factory No.3 compartment maintenance | 604,558.74 | 604,558.74 | |||
| Housing renovation | 576,660.38 | 275,532.06 | 98,195.53 | 753,996.91 | |
| Total | 15,464,980.51 | 2,717,823.49 | 798,985.59 | 17,383,818.41 |
19. Deferred Income Tax Assets/Deferred Income Tax Liabilities
(1) Deferred Income Tax Assets Not Being Offset
| Items | Balance at End of Period | Balance at Beginning of Year | ||
| Deductible Temporary Difference | Deferred Income Tax Assets | Deductible Temporary Difference | Deferred Income Tax Assets | |
| Asset Impairment Reserves | 560,563.61 | 140,140.91 | 254,446.99 | 63,611.73 |
| Lease liabilities | 196,089.81 | 49,022.46 | ||
| Deductible Loss | 30,360,671.96 | 7,590,167.99 | ||
| Credit impairment Loss | 1,808,563.08 | 452,140.67 | 1,368,158.01 | 341,929.04 |
| Deferred Income | 12,097,654.47 | 3,024,413.62 | 10,722,337.40 | 2,680,584.35 |
| Wages payable | 5,677,134.00 | 1,419,283.50 | 5,677,134.00 | 1,419,283.50 |
| Valuation of Financial Instruments and Derivative Financial Instruments | 33,944,248.10 | 8,486,062.03 | ||
| In total | 54,284,253.07 | 13,571,063.19 | 48,382,748.36 | 12,095,576.61 |
(2) Details of Deferred Income Tax Liabilities Not Being Offset
| Items | Balance at End of Period | Balance at Beginning of Year | ||
| Taxable Temporary Difference | Deferred Income Tax Liabilities | Taxable Temporary Difference | Deferred Income Tax Liabilities | |
| Valuation and appreciation of assets in merger of enterprises not under the same control | 154,787,977.45 | 38,696,994.37 | 164,849,010.97 | 41,212,252.73 |
| Valuation of Financial Instruments and Derivative Financial Instruments | 26,215,702.16 | 6,553,925.54 | 130,600,895.97 | 32,652,310.83 |
| Total | 181,003,679.61 | 45,250,919.91 | 295,449,906.94 | 73,864,563.56 |
(3)Details of Deferred Income Tax Liabilities after Offset
| Items | Offseting amount of deferred tax assets and liabilities | Carrying amount after offsetting between deferred tax assets and liabilities | offseting amount of deferred tax assets and liabilities at the end of last period | Carrying amount after offsetting between deferred tax assets and liabilitie at the end of last period |
| Deferred tax asset | 13,571,063.19 | 8,748,762.34 | 3,346,814.27 | |
| Deferred tax liabilities | 45,250,919.91 | 8,748,762.34 | 65,115,801.22 |
(4)Details of Deferred Income Tax Assets Not Being Confirmed
| Items | Balance at End of Period | Balance at Beginning of Year |
| Deductible temporary differences | 200,597.85 | 33,884.15 |
| Deductible Loss | 107,793,038.93 | 100,248,841.85 |
| In total | 107,993,636.78 | 100,282,726.00 |
(5)Deductible loss on deferred income tax assets not being confirmed will be due at thefollowing years
| Year | Balance at End of Period | Balance at Beginning of Year | Notes |
| 2021 | 4,504,020.42 | ||
| 2022 | 4,021,787.39 | 4,021,787.39 | |
| 2023 | 19,123,515.53 | 19,123,515.53 | |
| 2024 | 47,153,825.45 | 47,484,926.46 | |
| 2025 | 25,114,592.05 | 25,114,592.05 | |
| 2026 | 12,379,318.51 | ||
| Total | 107,793,038.93 | 100,248,841.85 |
20. Other Non-current Assets
| Items | Ending Balance | Beginning Balance | ||||
| Book balance | Provision for impairment | Book value | Book balance | Provision for impairment | Book value | |
| Equipment and Project Funds | 2,517,240.00 | 2,517,240.00 | ||||
| Three-year term deposit | 189,741,996.74 | 189,741,996.74 | 317,222,341.67 | 317,222,341.67 | ||
| Total | 189,741,996.74 | 189,741,996.74 | 319,739,581.67 | 319,739,581.67 | ||
21. Short-term Borrowings
（1）Classification of Short-term Borrowings
| Items | Balance at End of Period | Balance at Beginning of Year |
| Guaranteed Loan | 23,262,063.93 | 105,088,229.17 |
| Fiduciary Loan | 1,498,407,537.42 | 1,392,325,849.88 |
| In total | 1,521,669,601.35 | 1,497,414,079.05 |
22. Derivative financial liability
| Item | Ending balance | Beginning balance |
| Changes in fair value of hedging instruments | 70,305,871.37 | 371,219,136.84 |
| Total | 70,305,871.37 | 371,219,136.84 |
23. Accounts Payable
（1）Accounts Payable Listed
| Items | Balance at End of Period | Balance at Beginning of Year |
| Material Funds Payable | 176,725,835.45 | 60,908,293.40 |
| Project Funds Payable | 7,291,515.18 | 12,181,233.26 |
| Equipment Funds Payable | 1,746,573.40 | 1,182,750.00 |
| Others | 984,822.39 | 1,111,798.73 |
| In total | 186,748,746.42 | 75,384,075.39 |
24. Advance payment
（1）Advance payment Listed
| Items | Balance at End of Period | Balance at Beginning of Year |
| Advance collection of rent | 996,173.41 | 1,087,874.02 |
| In total | 996,173.41 | 1,087,874.02 |
25. Contract liabilities
（1） Classification of contract liabilities
| Items | Balance at End of Period | Balance at Beginning of Year |
| Loans | 520,816,995.93 | 341,860,984.30 |
| Service payment | 5,013,276.60 | |
| In total | 520,816,995.93 | 346,874,260.90 |
26. Wages Payable
（1）List of Wages Payable
| Items | Balance at Beginning of Year | Increase in the Current Period | Decrease in the Current Period | Balance at End of Period |
| One Short-term Compensation | 32,098,807.71 | 325,952,837.77 | 317,293,973.00 | 40,757,672.48 |
| Two After-service Welfare- Set up ESP liabilities | 1,246,329.23 | 31,654,445.70 | 31,527,796.92 | 1,372,978.01 |
| Three Dismission Welfare | 503,074.27 | 503,074.27 |
| Items | Balance at Beginning of Year | Increase in the Current Period | Decrease in the Current Period | Balance at End of Period |
| In total | 33,345,136.94 | 358,110,357.74 | 349,324,844.19 | 42,130,650.49 |
（2）List of Short-term Compensation
| Items | Balance at Beginning of Year | Increase in the Current Period | Decrease in the Current Period | Balance at End of Period |
| 1. Wage, Bonus, Allowance and Subsidy | 28,101,795.99 | 276,304,575.40 | 267,577,018.99 | 36,829,352.40 |
| 2. Welfare Expense of Employee | 20.00 | 9,220,188.74 | 9,220,188.74 | 20.00 |
| 3. Social Insurance Expense | 683,142.38 | 19,597,336.49 | 19,413,440.99 | 867,037.88 |
| Among them: Medical Insurance Premiums | 579,700.06 | 17,959,986.89 | 17,772,707.33 | 766,979.62 |
| Industrial Injury Insurance Premiums | 52,319.34 | 1,046,126.00 | 1,033,071.93 | 65,373.41 |
| Birth Insurance Premiums | 50,718.04 | 440,079.57 | 456,112.76 | 34,684.85 |
| Others | 404.94 | 151,144.03 | 151,548.97 | |
| 4. Housing Provident Funds | 294,633.05 | 15,146,374.28 | 15,311,842.10 | 129,165.23 |
| 5. Labor Union Expense and Personnel Education Fund | 3,019,216.29 | 5,684,362.86 | 5,771,482.18 | 2,932,096.97 |
| In total | 32,098,807.71 | 325,952,837.77 | 317,293,973.00 | 40,757,672.48 |
（3）List of Stated Drawings Plan
| Items | Balance at Beginning of Year | Increase in the Current Period | Decrease in the Current Period | Balance at End of Period |
| 1. Basic Pension Insurance | 1,173,795.55 | 27,100,169.39 | 26,992,049.18 | 1,281,915.76 |
| 2. Unemployment Insurance Expense | 36,450.79 | 981,723.01 | 973,698.64 | 44,475.16 |
| 3. Enterprise Annuity Charges | 36,082.89 | 3,572,553.30 | 3,562,049.10 | 46,587.09 |
| Total | 1,246,329.23 | 31,654,445.70 | 31,527,796.92 | 1,372,978.01 |
27. Taxes and Fees Payable
| Items | Balance at End of Period | Balance at Beginning of Year |
| Corporate Income Tax | 74,174,903.15 | 21,972,563.71 |
| Items | Balance at End of Period | Balance at Beginning of Year |
| VAT | 23,320,246.23 | 20,557,653.24 |
| Urban Maintenance and Construction Tax | 1,876,669.91 | 1,662,803.83 |
| House Property Tax | 2,302,350.63 | 2,330,072.39 |
| Land Use Tax | 176,087.89 | 1,203,859.39 |
| Individual Income Tax | 671,107.90 | 1,681,176.51 |
| Educational Surtax | 760,843.86 | 663,399.57 |
| Local Educational Surtax | 559,372.28 | 494,409.45 |
| Stamp Tax | 500,830.44 | 314,395.32 |
| Environmental protection tax | 5,193.36 | 3,737.44 |
| Water conservancy construction fee | 247.04 | 143.79 |
| In total | 104,347,852.69 | 50,884,214.64 |
28. Other Accounts Payable
A. Overview
(1) Classification
| Items | Balance at End of Period | Balance at Beginning of Year |
| Interest Payable | 21,082,795.47 | 21,082,795.47 |
| Dividends Payable | 3,213,302.88 | 11,013,302.88 |
| Other Accounts Payable | 49,689,488.04 | 40,196,782.89 |
| In total | 73,985,586.39 | 72,292,881.24 |
B. Interest Payable
(1) Classification
| Items | Balance at End of Period | Balance at Beginning of Year |
| Loan Interest between Enterprises | 21,082,795.47 | 21,082,795.47 |
| In total | 21,082,795.47 | 21,082,795.47 |
C. Dividends Payable
(1) Classification
| Items | Balance at End of Period | Balance at Beginning of Year |
| Items | Balance at End of Period | Balance at Beginning of Year |
| Common stock dividends | 7,800,000.00 | |
| Others | 3,213,302.88 | 3,213,302.88 |
| In total | 3,213,302.88 | 11,013,302.88 |
D. Other Accounts Payable
(1) List of Other Accounts Payable by Nature of Funds
| Items | Balance at End of Period | Balance at Beginning of Year |
| Guaranteed Deposit and Deposit | 25,053,238.93 | 16,271,518.35 |
| Intercourse Funds between Units | 9,931,464.29 | 13,468,108.09 |
| Intercourse Funds of Related Parties | 5,722,550.45 | 1,831,079.90 |
| Personal Intercourse Funds | 4,032,688.22 | 4,025,881.59 |
| Various Insurances of Employee | 2,768,202.89 | 2,102,370.03 |
| Others | 2,181,343.26 | 2,497,824.93 |
| In total | 49,689,488.04 | 40,196,782.89 |
29. Non-current liabilities due within one year
| Item | End balance | Beginning balance |
| Current portion of lease liability | 1,582,978.69 | 1,154,817.69 |
| Total | 1,582,978.69 | 1,154,817.69 |
30. Other current liability
1. Other current liability statement
| Item | End balance | Beginning balance |
| Value-added tax to be written off | 22,994,553.60 | 8,319,696.79 |
| Total | 22,994,553.60 | 8,319,696.79 |
31. Long term borrowing
| Item | End balance | Beginning balance | Interest Rate |
| Guaranteed Loan | 71,000,000.00 | 3.51% | |
| Total | 71,000,000.00 |
32. Lease liability
| Item | End balance | Beginning balance |
| Lease liability | 1,694,702.62 | 1,459,723.40 |
33. Long term wage payable
(1)List of long-term wage payable
| Items | Balance at End of Period | Balance at Beginning of Year |
| Net liabilities of defined benefit plan in post employment benefits | ||
| Dismission Welfare | ||
| Other Long-term Welfare | 5,677,134.00 | 5,677,134.00 |
| In total | 5,677,134.00 | 5,677,134.00 |
34. Deferred Income
| Items | Balance at Beginning of Year | Increase in the Current Period | Decrease in the Current Period | Balance at End of Period | Cause of Formation |
| Government Subsidy | 68,716,699.34 | 129,467.73 | 3,601,667.59 | 65,244,499.48 | |
| In total | 68,716,699.34 | 129,467.73 | 3,601,667.59 | 65,244,499.48 | -- |
Among them, items involving government subsidy are as follows:
| Items Receiving Subsidy | Balance at Beginning of Year | Increase in the Current Period | Charge to other Profits | Other changes | Balance at End of Period | Asset related / income related |
| Enterprise foundation supporting in the construction stage of "Tianjin Lingang Industrial Zone Management Committee" | 49,929,123.61 | 1,277,504.16 | 48,651,619.45 | Asset related | ||
| Special subsidy for infrastructure investment | 10,296,486.90 | 908,692.09 | 9,387,794.81 | Asset related | ||
| The relocation compensation | 4,232,401.96 | 384,763.82 | 3,847,638.14 | Asset related | ||
| Tianjin Binhai New District’s Industrially Technical Renovation and Park Construction | 2,092,592.45 | 222,222.24 | 1,870,370.21 | Asset related |
| Items Receiving Subsidy | Balance at Beginning of Year | Increase in the Current Period | Charge to other Profits | Other changes | Balance at End of Period | Asset related / income related |
| Funds as well as Expenditures for Science and Technology | ||||||
| Key technology research and industrialization project of "moderate processing" of grain and oil | 778,388.24 | 77,838.84 | 700,549.40 | Asset related | ||
| Construction of provincial grain reserve information management system to form asset entry project | 633,746.30 | 200,686.32 | 433,059.98 | Asset related | ||
| Research and technology demonstration of green and clean production equipment and process for edible oil | 450,000.00 | 450,000.00 | Asset related | |||
| Design of electric heating system for oil tank | 303,959.88 | 79,960.12 | 223,999.76 | Asset related | ||
| Special subsidies for Beijing Reserve Granary Facility Maintenance | 129,467.73 | 129,467.73 | Asset related | |||
| In total | 68,716,699.34 | 129,467.73 | 3,601,667.59 | 65,244,499.48 | -- |
35. Share Capital
| Items | Balance at Beginning of Year | Changes in the Current Period（+、-） | Balance at End of Period | ||||
| New Share Issue | Share Donation | Share Transfer of Provident Fund | Others | Sub-total | |||
1. Shares with
Restricted Conditions
| 1. Shares with Restricted Conditions | 207,336,985.00 | -164,877,598.00 | -164,877,598.00 | 42,459,387.00 |
(1) State Shareholding
| (1) State Shareholding |
| Items | Balance at Beginning of Year | Changes in the Current Period（+、-） | Balance at End of Period | ||||
| New Share Issue | Share Donation | Share Transfer of Provident Fund | Others | Sub-total | |||
(2) State-owned
Legal-personShareholding
| (2) State-owned Legal-person Shareholding | 164,877,598.00 | -164,728,098.00 | -164,728,098.00 | 149,500.00 |
(3) Other Domestic
Capital Shareholding
| (3) Other Domestic Capital Shareholding | 42,459,387.00 | -149,500.00 | -149,500.00 | 42,309,887.00 |
Including: DomesticLegal-personShareholding
| Including: Domestic Legal-person Shareholding | 1,299,500.00 | -149,500.00 | -149,500.00 | 1,150,000.00 |
Domestic NaturalPerson Shareholding
| Domestic Natural Person Shareholding | 41,159,887.00 | 41,159,887.00 |
(4) Foreign
Shareholding
| (4) Foreign Shareholding |
Including: ForeignLegal-personShareholding
| Including: Foreign Legal-person Shareholding |
Foreign NaturalPerson Shareholding
| Foreign Natural Person Shareholding |
2. Tradable Shares
without RestrictedConditions
| 2. Tradable Shares without Restricted Conditions | 519,613,266.00 | 164,877,598.00 | 164,877,598.00 | 684,490,864.00 |
(1) RMB Ordinary
Shares
| (1) RMB Ordinary Shares | 454,638,266.00 | 164,877,598.00 | 164,877,598.00 | 619,515,864.00 |
(2) Domestically
Listed Foreign Shares
| (2) Domestically Listed Foreign Shares | 64,975,000.00 | 64,975,000.00 |
(3) Listed Foreign
Shares Overseas
| (3) Listed Foreign Shares Overseas |
(4) Others
| (4) Others |
In total
| In total | 726,950,251.00 | 726,950,251.00 |
36. Capital Reserves
| Items | Balance at Beginning of Year | Increase in the Current Period | Decrease in the Current Period | Balance at End of Period |
| Capital Premium (Stock Premium) | 1,322,887,986.38 | 1,322,887,986.38 | ||
| Capital Reserves Roll-in Under Original System | 112,316,357.36 | 112,316,357.36 | ||
| Other Capital Reserves | 239,624,007.21 | 1,090,000.00 | 240,714,007.21 | |
| In total | 1,674,828,350.95 | 1,090,000.00 | 1,675,918,350.95 |
Note: The increase of capital reserve was due to the funds received from the parent company,Beijing Capital Agriculture Group, for technology projects of RMB1.09 million.
37. Other Comprehensive Incomes
| Items | Amounts Occurred in the Current Period | |||||||
| Balance at Beginning of Year | Amounts Occurred before Income Tax in the Current Period | Less: Other Comprehensive Incomes Charged at Earlier Stage and Current Roll-in Profit and Loss | Less: included in other comprehensive income in the previous period and transferred to retained income in the current period | Less: Income Tax Expense | Attributable to Parent Company After Tax | Attributable to Minority Shareholders After Tax | Balance at End of Period | |
| One Other comprehensive incomes that won’t be classified into profit and loss | ||||||||
| 1. Remeasure and set the change amount of benefit plan | ||||||||
| 2. Other comprehensive income that cannot be transferred to profits and losses under the equity method | ||||||||
| 3. Changes in the fair value of other equity instrument investments | ||||||||
| 4. Changes in fair value of the enterprise's own credit risk | ||||||||
| Items | Amounts Occurred in the Current Period | |||||||
| Balance at Beginning of Year | Amounts Occurred before Income Tax in the Current Period | Less: Other Comprehensive Incomes Charged at Earlier Stage and Current Roll-in Profit and Loss | Less: included in other comprehensive income in the previous period and transferred to retained income in the current period | Less: Income Tax Expense | Attributable to Parent Company After Tax | Attributable to Minority Shareholders After Tax | Balance at End of Period | |
| Two Other comprehensive incomes that will be classified into profit and loss | -363,258.66 | -319,023.56 | -319,023.56 | -682,282.22 | ||||
| 1. Other comprehensive income transferable to profit and loss under the equity method | -355,212.00 | -105,630.50 | -105,630.50 | -460,842.50 | ||||
| 2. Changes in the fair value of other debt investments | ||||||||
| 3. Amount of financial assets reclassified into other comprehensive income | ||||||||
| 4. Provision for credit impairment of other debt investment | ||||||||
| 5. Effective part of cash flow hedging | ||||||||
| Items | Amounts Occurred in the Current Period | |||||||
| Balance at Beginning of Year | Amounts Occurred before Income Tax in the Current Period | Less: Other Comprehensive Incomes Charged at Earlier Stage and Current Roll-in Profit and Loss | Less: included in other comprehensive income in the previous period and transferred to retained income in the current period | Less: Income Tax Expense | Attributable to Parent Company After Tax | Attributable to Minority Shareholders After Tax | Balance at End of Period | |
| 6. Converted difference between foreign currency financial statements | -8,046.66 | -213,393.06 | -213,393.06 | -221,439.72 | ||||
| Total | -363,258.66 | -319,023.56 | -319,023.56 | -682,282.22 | ||||
38. Surplus Reserves
| Items | Balance at Beginning of Year | Increase in the Current Period | Decrease in the Current Period | Balance at End of Period |
| Statutory Surplus Reserves | 84,487,609.05 | 84,487,609.05 | ||
| Free Surplus Reserves | 37,634,827.93 | 37,634,827.93 | ||
| In total | 122,122,436.98 | 122,122,436.98 |
39. Undistributed Profit
| Items | Amounts in the Current Period | Amounts in the Prior Period |
| Adjustment on undistributed profit at end of last year | 187,033,763.26 | 2,186,806.56 |
| Adjustment on total number of undistributed profit at beginning of period (increase+ and decrease-) | ||
| Adjusted undistributed profit at beginning of period | 187,033,763.26 | 2,186,806.56 |
| Add: net profit attributable to parent company in the current period | 204,459,771.08 | 184,846,956.70 |
| Less: withdrawal legal surplus reserves | ||
| Withdrawal free surplus reserves | ||
| Withdrawal general risk reserves | ||
| Ordinary stock dividends payable | ||
| Ordinary stock dividends transferred to capital | ||
| Undistributed profit at end of period | 391,493,534.34 | 187,033,763.26 |
40. Operation Revenue and Operation Cost
(1)Operation Revenue and Operation Cost
| Items | Amounts in the Current Period | Amounts in the Prior Period | ||
| Revenue | Cost | Revenue | Cost | |
| Prime Business | 11,728,067,785.65 | 11,016,949,345.82 | 8,697,572,481.21 | 8,071,341,928.74 |
| Other Business | 35,026,049.91 | 20,205,123.68 | 44,177,430.90 | 19,505,316.68 |
| In total | 11,763,093,835.56 | 11,037,154,469.50 | 8,741,749,912.11 | 8,090,847,245.42 |
(2) Prime Business (Industry and Business-classified)
| Name of Industry | Amounts in the Current Period | Amounts in the Prior Period |
| (or Business) | Revenue | Cost | Revenue | Cost |
| Oil and Oil Seeds | 10,791,474,243.86 | 10,317,711,108.68 | 7,765,755,097.07 | 7,410,229,164.25 |
| Food Processing | 920,002,290.84 | 694,188,764.74 | 898,193,522.11 | 633,566,522.42 |
| Others | 16,591,250.95 | 5,049,472.40 | 33,623,862.03 | 27,546,242.07 |
| In total | 11,728,067,785.65 | 11,016,949,345.82 | 8,697,572,481.21 | 8,071,341,928.74 |
(3)Prime Business (Region-classified)
| Name of Region | Amounts in the Current Period | Amounts in the Prior Period | ||
| Revenue | Cost | Revenue | Cost | |
| North China | 10,123,343,396.24 | 9,651,908,242.01 | 7,884,008,703.50 | 7,498,580,786.26 |
| East China | 686,657,679.09 | 512,187,178.67 | 686,167,569.63 | 473,944,001.23 |
| Northeast China | 137,074,930.91 | 111,781,498.62 | 127,396,208.08 | 98,817,141.25 |
| South East | 780,991,779.41 | 741,072,426.52 | ||
| In total | 11,728,067,785.65 | 11,016,949,345.82 | 8,697,572,481.21 | 8,071,341,928.74 |
41. Tariff And Annex
| Items | Amounts in the Current Period | Amounts in the Prior Period |
| Urban Maintenance and Construction Tax | 8,123,144.87 | 6,612,721.25 |
| Educational Surtax | 3,533,840.85 | 2,895,143.94 |
| Local Educational Surtax | 2,355,895.48 | 1,930,095.99 |
| House Property tax | 5,496,760.45 | 6,842,452.33 |
| Land Use Tax | 247,528.32 | 2,222,677.37 |
| Stamp Tax | 3,952,317.43 | 2,582,084.39 |
| Vehicle and Vessel Use Tax | 40,100.87 | 40,775.71 |
| Land Value Added Tax | 4,790.20 | |
| Other Taxes and Fees | 39,411.60 | 51,780.08 |
| In total | 23,788,999.87 | 23,182,521.26 |
42. Sales Expenses
| Items | Amounts in the Current Period | Amounts in the Prior Period |
| Employee Compensation (including social security, etc) | 77,384,564.22 | 72,069,470.68 |
| Sales Promotion Expenses | 24,192,308.99 | 39,131,372.82 |
| Warehousing Fees | 11,180,870.38 | 13,401,508.98 |
| Depreciation | 13,626,528.80 | 13,195,597.53 |
| Travel Expenses | 6,561,854.51 | 5,425,245.85 |
| Items | Amounts in the Current Period | Amounts in the Prior Period |
| Material consumption, sample and product cost | 2,171,906.30 | 7,457,562.25 |
| Lease fee | 2,000,200.72 | 2,110,200.00 |
| Repair Costs | 1,600,732.45 | 4,741,287.38 |
| Operation Expenses | 3,122,152.06 | 4,142,565.31 |
| Terminal Charges | 1,123,800.00 | 1,769,880.36 |
| Water and Electricity Fees | 1,225,185.96 | 1,149,996.78 |
| Commodity Wastage | 116,599.55 | 1,144,468.29 |
| Vehicle Fees | 992,762.32 | 653,952.78 |
| Packing Expenses | 300,227.81 | 606,343.75 |
| Test and Detection Fees | 226,300.00 | 252,606.47 |
| Business Entertainment Expenses | 212,052.40 | 221,142.33 |
| Labor Protection Fees | 185,886.35 | 134,970.62 |
| Commercial Insurance Expenses | 14,344.90 | 9,339.62 |
| Others | 1,077,840.52 | 920,799.12 |
| Total | 147,316,118.24 | 168,538,310.92 |
43. Administration Expenses
| Items | Amounts in the Current Period | Amounts in the Prior Period |
| Employee Compensation (including social security, etc) | 121,587,427.82 | 105,757,801.44 |
| Impairment Costs | 18,237,865.60 | 21,138,588.30 |
| Amortization of Assets | 15,563,814.96 | 15,395,887.82 |
| Fees of Employing Agent | 13,163,766.91 | 12,235,888.01 |
| Company Expenses | 7,442,124.18 | 5,320,755.54 |
| Repair Costs | 3,259,784.08 | 3,347,098.20 |
| Lease fee | 3,039,488.99 | 3,335,385.77 |
| Vehicle Fees | 2,675,743.19 | 2,737,975.97 |
| Security Protection Fees | 1,469,824.47 | 953,250.21 |
| Information Network Fees | 1,312,483.04 | 2,558,612.63 |
| Environmental Protection Fees | 1,304,184.21 | 1,031,270.41 |
| Business Entertainment Expenses | 1,089,431.81 | 1,180,688.87 |
| Commercial Insurance Expenses | 995,916.41 | 991,422.05 |
| Workers Insurance Expenses | 956,937.28 | 970,146.22 |
| Travel Expenses | 713,609.91 | 409,662.51 |
| Material Consumption | 616,035.77 | 545,101.54 |
| Items | Amounts in the Current Period | Amounts in the Prior Period |
| Labor Protection Fees | 489,960.00 | 782,547.70 |
| Taxes in Expenses | 222,145.86 | 146,246.44 |
| Other Expenses | 4,627,347.70 | 700,399.30 |
| In total | 198,767,892.19 | 179,538,728.93 |
44. Research and Development Expenses
| Items | Amounts in the Current Period | Amounts in the Prior Period |
| Salary | 8,705,588.81 | 6,967,316.66 |
| Material consumption | 2,434,367.21 | 1,713,717.37 |
| Design expense | 391,188.30 | 308,142.99 |
| Transportation Expense | 35,559.99 | 48,507.01 |
| Others | 483,243.65 | 865,537.90 |
| In total | 12,049,947.96 | 9,903,221.93 |
45. Financial Expenses
| Items | Amounts in the Current Period | Amounts in the Prior Period |
| Interest Expenses | 42,302,007.06 | 31,742,996.45 |
| Less: Interest Income | 26,216,178.46 | 16,035,923.84 |
| Exchange Profit and Loss | 82,807.14 | 3,881,862.45 |
| Service Charges | 4,954,473.93 | 1,527,207.20 |
| In total | 21,123,109.67 | 21,116,142.26 |
46. Other Profits
| Items | Amounts in the Current Period | Amounts in the Prior Period |
| Government Subsidy Related to Daily Corporate Activities | 13,801,864.25 | 15,837,109.11 |
| Return of Service Charges of Withholding Individual Income Tax | 642,939.07 | 281,742.91 |
| Refund of VAT and surtax | 90,280.00 | 103,652.86 |
| In total | 14,535,083.32 | 16,222,504.88 |
47. Investment Income
| Items | Amounts in the Current Period | Amounts in the Prior Period |
| Long-term equity investment income accounted | 37,822,580.24 | 19,542,664.00 |
| Items | Amounts in the Current Period | Amounts in the Prior Period |
| with equity method | ||
| Investment income from disposal of wealth management products | 5,161,567.20 | 13,327,294.52 |
| Investment income of disposing trading financial asssets | 668,372.69 | 4,097,586.02 |
| Investment income obtained during the holding of transactional financial assets | 387,257.58 | 401,460.93 |
| Others | 506,874.91 | |
| In total | 44,039,777.71 | 37,875,880.38 |
48. Profits on Changes in Fair Value
| Source of generating income with changes in fair value | Amounts in the Current Period | Amounts in the Prior Period |
| Financial assets that are measured as per fair value and for which the changes are included in the current profit and loss | -66,667,420.88 | -16,467,791.36 |
| Including: income with changes in fair value generated by derivative financial instruments | -66,667,420.88 | -16,467,791.36 |
| Trading financial liabilities | ||
| Investment real estate measured by fair value | ||
| In total | -66,667,420.88 | -16,467,791.36 |
49. Credit impairment loss
| Items | Amounts in the Current Period | Amounts in the Prior Period |
| Accounts receivable bad debt loss | -445,289.20 | 30,273.95 |
| Other receivables bad debt loss | -94,234.26 | 221,436.24 |
| Total | -539,523.46 | 251,710.19 |
50. Loss from Asset Devaluation
| Items | Amounts in the Current Period | Amounts in the Prior Period |
| Loss on Bad Debts | ||
| Loss on Inventory Price Drop | -306,388.07 | -63,449.10 |
| In total | -306,388.07 | -63,449.10 |
51. Assets Disposal Income
| Items | Amounts in the Current Period | Amounts in the Prior Period |
| Gains or losses on disposal of fixed assets | -208,369.12 | 38,752.37 |
| In total | -208,369.12 | 38,752.37 |
52. Non-operating Income
(1)Classification
| Items | Amounts in the Current Period | Amounts in the Prior Period | Amounts Charged to Non-recurring Profit and Loss |
| Total non current assets retirement gains: | 72,098.18 | 37,474.17 | 72,098.18 |
| Including: fixed assets scrap profit | 72,098.18 | 37,474.17 | 72,098.18 |
| profit from scrap of intangible assets | |||
| Penalty income | 994,966.56 | 74,975.30 | 994,966.56 |
| Payable amounts not required to be paid | 487,265.26 | 487,265.26 | |
| Government Subsidy | 174,221.00 | 60,000.00 | 174,221.00 |
| Relocation Compensation | 144,789.85 | 159,967.20 | 144,789.85 |
| Other Gains | 194,032.35 | 414,172.75 | 194,032.35 |
| In total | 2,067,373.20 | 746,589.42 | 2,067,373.20 |
(2)Government Subsidy Charged to Non-recurring Profit and Loss
| Subsidy projects | Amounts in the Current Period | Amounts in the Prior Period | Asset related / income related |
| Relocation Compensation | 119,121.00 | Income related | |
| Incentive Funds | 45,100.00 | Income related | |
| Special subsidies for the activities of "two new" organisations | 10,000.00 | Income related | |
| Quality and patent awards in 2020 | 50,000.00 | Income related | |
| Relief policy subsidy | 10,000.00 | Income related | |
| Total | 174,221.00 | 60,000.00 | - |
53. Non-operating Expenses
| Items | Amounts in the Current Period | Amounts in the Prior Period | Amounts Charged to Non-recurring Profit and Loss |
| Total loss on scrap of non current assets | 157,143.75 | 457,274.93 | 157,143.75 |
| Including: loss on scrap of fixed assets | 157,143.75 | 457,274.93 | 157,143.75 |
| Items | Amounts in the Current Period | Amounts in the Prior Period | Amounts Charged to Non-recurring Profit and Loss |
| Penalty expenditure | 24,500.00 | 1,020,523.67 | 24,500.00 |
| Others | 146,997.54 | 410,346.39 | 146,997.54 |
| Total | 328,641.29 | 1,888,144.99 | 328,641.29 |
54. Income Tax Expenses
(1) List of Income Tax Expenses
| Amounts in the Current Period | Amounts in the Prior Period | Amounts in the Current Period |
| Income Tax Expenses of the Current Period | 106,340,597.83 | 54,532,194.91 |
| Deferred Income Tax Expenses | -30,089,130.23 | 11,583,103.71 |
| Total | 76,251,467.60 | 66,115,298.62 |
(2) Accounting Profit and Income Tax Expense Adjustment Process
| Items | Amounts in the Current Period | Amounts in the Prior Period |
| Total Profits | 315,485,189.54 | 285,339,793.18 |
| Income tax expenses calculated by statutory/applicable tax rate | 78,871,297.39 | 71,334,948.30 |
| Effect of subsidiary corporations being applicable to different tax rates | -1,844,755.24 | -947,694.04 |
| Adjustment on effect of income tax in the prior period | 2,489,564.19 | 430,220.89 |
| Effect of Non-taxable Incomes | -5,760,010.74 | -3,847,972.30 |
| Effect of Non-deductible cost, expense and loss | -879,902.43 | 970,773.85 |
| Effect of deductible loss on usage of unconfirmed deferred income tax assets in the prior period | -5,363,511.97 | -5,783,060.94 |
| Effect of deductible temporary difference or deductible loss on unconfirmed deferred income tax in the current period | 9,498,499.81 | 6,278,648.02 |
| Effect of deductions | -795,213.37 | -2,320,565.16 |
| Others | 35,499.96 | |
| Income Tax Expenses | 76,251,467.60 | 66,115,298.62 |
55. Other comprehensive income items and their income tax impact andtransferred to profit and loss
See details of ‘Appendix Six Notes on Items in Consolidated Financial Statements,37 Other Comprehensive Incomes’
56. Notes to items related cash flow statement
(1) Receiving other cash related to operation activities
| Items | Amounts in the Current Period | Amounts in the Prior Period |
| Future Margins | 1,459,292,560.77 | 874,862,645.55 |
| Intercourse Funds of Other Units | 106,778,161.58 | 47,080,919.02 |
| Interest Income | 17,053,537.35 | 15,727,323.95 |
| Intercourse Funds of Related Parties | 3,304,968.87 | 6,059,604.42 |
| Non-operating Income and other income | 4,106,124.86 | 14,165,759.99 |
| Others | 3,238,949.73 | 5,979,776.55 |
| Total | 1,593,774,303.16 | 963,876,029.48 |
(2) Other Cash Payment Related to Operation Activities
| Items | Amounts in the Current Period | Amounts in the Prior Period |
| Future Margins | 1,594,071,648.75 | 1,383,095,725.00 |
| Payment for Administration Expenses | 43,378,783.81 | 36,716,789.68 |
| Intercourse Funds of Other Units | 13,893,169.13 | 85,094,941.48 |
| Payment for Operating Expenses | 56,305,025.22 | 103,477,595.33 |
| Intercourse Funds of Related Parties | 7,669,514.72 | 27,810,666.27 |
| Bank Charges | 4,879,506.88 | 1,527,207.20 |
| Petty Cash Paid | 198,860.83 | 785,283.72 |
| Non-operating Expenses | 90,694.64 | 1,435,373.86 |
| Others | 6,689,174.26 | 10,217,449.20 |
| In total | 1,727,176,378.24 | 1,650,161,031.74 |
(3) Other cash received related to investment activities
| Items | Amounts in the Current Period | Amounts in the Prior Period |
| Fixed assets subsidy | 960,000.00 | |
| In total | 960,000.00 |
(4) Other cash received related to financing activities
| Items | Amounts in the Current Period | Amounts in the Prior Period |
| Subsidies related to R&D from Beijing Capital Agriculture Group | 1,090,000.00 | |
| In total | 1,090,000.00 |
(5) Other cash paid related to financing activities
| Items | Amounts in the Current Period | Amounts in the Prior Period |
| Acquisition of minority shareholders' equity of Zhejiang Little Prince | 104,730,266.66 | |
| Lease payment amount | 937,516.52 | |
| In total | 937,516.52 | 104,730,266.66 |
57. Supplementary Materials of Cash Flows Statement
(1) Supplementary Materials of Cash Flows Statement
| Supplementary Materials | Amounts in the Current Period | Amounts in the Prior Period |
| 1. Adjusting net accounting profit to operating cash flow | ||
| Net Profit | 239,233,721.94 | 219,224,494.56 |
| Add: Assets Impairment Reserves | 306,388.07 | 63,449.10 |
| Credit impairment loss | 539,523.46 | -251,710.19 |
| Fixed Assets Depreciation, Oil-and-gas Assets Depreciation and Productive Biological Assets Depreciation | 98,490,827.18 | 111,137,864.85 |
| Amortization of Intangible Assets | 14,810,005.45 | 14,749,656.41 |
| Amortization of Long-term Deferred Expenses | 798,985.59 | 935,641.33 |
| Losses on Disposal of Fixed Assets, Intangible Assets and Other Long-term Assets (Fill in profit with symbol “－”) | 208,369.12 | -38,752.37 |
| Losses on Retirement of Fixed Assets (Fill in profit with symbol “－”) | 85,045.57 | 419,800.76 |
| Losses on Changes in Fair Value (Fill in profit with symbol “－”) | 66,667,420.88 | 16,467,791.36 |
| Financial Expenses (Fill in profit with symbol “－”) | 42,302,007.06 | 31,742,996.45 |
| Investment Losses (Fill in profit with symbol “－”) | -44,039,777.71 | -37,875,880.38 |
| Decrease in Deferred Income Tax Assets (Fill in increase with symbol “－”) | -10,224,248.92 | -743,747.89 |
| Increase in Deferred Income Tax Reliabilities (Fill in decrease with symbol “－”) | -19,864,881.31 | 12,326,851.60 |
| Supplementary Materials | Amounts in the Current Period | Amounts in the Prior Period |
| Decrease in Inventory (Fill in increase with symbol “－”) | -682,307,723.74 | 186,560,389.70 |
| Decrease in Items of Operating Receivables (Fill in increase with symbol “－”) | 461,225,511.97 | -682,322,952.93 |
| Increase in Items of Operating Receivables (Fill in decrease with symbol “－”) | 464,008,881.83 | -118,936,802.44 |
| Others | ||
| Net Cash Flows from Operating Activities | 632,240,056.44 | -246,540,910.08 |
| 2. Major investment and financing activities that do not involve cash payments | ||
| Conversion of Debt into Capital | ||
| Convertible Bonds Due Within One Year | ||
| Fixed Assets under Financing Lease | ||
| 3. Net change conditions in cash and cash equivalents | ||
| Cash balance at end of period | 506,928,810.69 | 334,389,017.41 |
| Less: cash balance at beginning of period | 334,389,017.41 | 555,097,777.21 |
| Add: balance of the cash equivalents at end of period | ||
| Less: balance of the cash equivalents at beginning of period | ||
| Cash and cash equivalent net increase quota | 172,539,793.28 | -220,708,759.80 |
(2) Composition of cash and cash equivalents
| Items | Balance at End of Period | Balance at Beginning of Period |
| One Cash | 506,928,810.69 | 334,389,017.41 |
| Including: cash in stock | 15,012.17 | 16,761.72 |
| Bank deposit available for payment at any time | 465,650,779.09 | 298,158,812.41 |
| Other currency funds available for payment at any time | 41,263,019.43 | 36,213,443.28 |
| Deposits with central bank available for payment | ||
| Interbank deposit | ||
| Interbank placements | ||
| Two Cash Equivalents | ||
| Including: bond investment maturing within three months | ||
| Three Balance of Cash and Cash Equivalents at End | 506,928,810.69 | 334,389,017.41 |
| Items | Balance at End of Period | Balance at Beginning of Period |
| of Period | ||
| Including: restricted cash and cash equivalents used by parent company or intra-group affiliates |
58. Assets with restricted ownership or right to use
| Items | Book Value at End of Period | Reasons being Restricted |
| Currency Funds | 215,857.76 | Letter of Credit Margin and Account Suspension |
| Inventory | 3,550,960.00 | Pledge of warehouse receipts |
| Investment Real Estate | 5,880,839.21 | Litigation Freeze |
| Fixed Assets | 5,822,183.64 | Litigation Freeze |
| In total | 15,469,840.61 | —— |
Note: Restricted amounts of 215,857.76yuan existed at the end of the period. Of which166,353.66yuan was released from freeze before the reporting date.
59. Monetary Items of Foreign Currency
(1) Monetary Items of Foreign Currency
| Items | Balance of Foreign Currency at End of Period | Exchange Rate Convert | Balance of Converting to RMB at End of Period |
| Monetary fund | 3,614,784.76 | 6.3757 | 23,046,783.19 |
| Including: US Dollars | 3,614,784.76 | 6.3757 | 23,046,783.19 |
| Accounts receivable | 93,368.00 | 6.3757 | 595,286.36 |
| Including: US Dollars | 93,368.00 | 6.3757 | 595,286.36 |
| Short-term borrowing | 125,857,140.16 | 6.3757 | 802,427,368.52 |
| Including: US Dollars | 125,857,140.16 | 6.3757 | 802,427,368.52 |
(2) Instruction of Operational Entity Overseas
The registrant and operating unit of the Company is Beijing Grain (Singapore)International Trade Co., Ltd. with main business place of Singapore and recording currencyof US Dollars.
60. Hedging items and related hedging instruments
Please refer to 22. Derivative financial liability under Section VI of the Notes.
61. Government Subsidies
（1）Basic conditions of government grants
| Type | Amount | Presentation item | Amount recorded in profit and loss |
| VAT refunds | 8,435,960.05 | Other income | 8,435,960.05 |
| Special subsidy funds for infrastructure support fees | 63,130,000.00 | Deferred income | 1,277,504.16 |
| Special subsidy for infrastructure input | 18,176,788.00 | Deferred income | 908,692.09 |
| Special subsidy for production line technical reform | 4,500,000.00 | Deferred income | 450,000.00 |
| Subsidy for job stabilization | 401,368.35 | Other income | 401,368.35 |
| Compensation for demolition and relocation | 7,695,276.34 | Deferred income | 384,763.82 |
| Subsidy for Work-in-Training | 347,900.00 | Other income | 347,900.00 |
| Tianjin Lingang Grain and Oil Processing Warehouse and Logistics Project of Beijing Grain Group | 4,000,000.00 | Deferred income | 222,222.24 |
| Provincial grain reserve information management system construction | 633,746.30 | Deferred income | 200,686.32 |
| Job Stabilization Subsidy | 180,870.53 | Other income | 180,870.53 |
| Gas boiler low-NOx transformation subsidy | 160,000.00 | Other income | 160,000.00 |
| Subsidy for the operation of the home for the disabled | 133,165.00 | Other income | 133,165.00 |
| Compensation for demolition and relocation | 119,121.00 | Non-operating income | 119,121.00 |
| Subsidies for disabled persons' jobs | 118,177.13 | Other income | 118,177.13 |
| Industrial enterprise incentive funds | 100,000.00 | Other income | 100,000.00 |
| Financial boiler low-NOx subsidy | 80,000.00 | Other income | 80,000.00 |
| Green cleaning and oil tank electric heating | 855,179.48 | Deferred income | 79,960.12 |
| Oil and fat enzymatic moderate refining sets of equipment | 1,089,743.60 | Deferred income | 77,838.84 |
| Training subsidies | 65,500.00 | Other income | 65,500.00 |
| Policy cashing incentive funds | 55,100.00 | Non-operating income | 55,100.00 |
| Tax benefits for retired soldiers (VAT benefits) | 45,000.00 | Other income | 45,000.00 |
| Smart manufacturing special funds incentives (green factory) | 40,000.00 | Other income | 40,000.00 |
| Emergency turnover food subsidies | 30,000.00 | Other income | 30,000.00 |
| Type | Amount | Presentation item | Amount recorded in profit and loss |
| Unemployment insurance rebate | 23,705.60 | Other income | 23,705.60 |
| 2020 Foreign Economic and Trade Project Subsidy | 23,600.00 | Other income | 23,600.00 |
| Others | 14,950.00 | Other income | 14,950.00 |
| In total | 110,455,151.38 | 13,976,085.25 |
VII. Change in Consolidation ScopeThe Company invested jointly with Sinograin Oils Corporation to establishJingliang (Yueyang) Grain and Oil Industry Co., Ltd, with a shareholding of 65%. Thesubsidiary is in the stage of preparation for opening and has not yet completed the paid-incapital. The above-mentioned entity was included in the scope of consolidation during thereporting period.VIII. Equities in Other Entities
1. Equities in Subsidiaries
(1) Composition of the Company
| Name of Subsidiary | Principle Place of Business | Registered Place | Nature of Business | Shareholding Ratio (%) | Voting rights ratio (%) | Mode of Acquisition | |
| Direct | Indirect | ||||||
| Beijing Jingliang Food Co., Ltd. | Beijing | Beijing | Investment management | 100 | 100 | Merger under the same control | |
| Jingliang (Tianjin) Grain and Oil Industry Co., Ltd. | Tianjin | Tianjin | Agricultural Product and By Product Processing | 70 | 70 | Merger under the same control | |
| Beijing Jingliang Oil and Fat Co., Ltd. | Beijing | Beijing | Grain and oil trade | 100.00 | 100.00 | Merger under the same control | |
| Jingliang (Hebei) Oil Industry Co., Ltd. | Hebei | Hebei | Agricultural Product and By Product Processing | 51.00 | 51.00 | Merger under the same control | |
| Beijing Guchuan Edible Oil Co., Ltd. | Beijing | Beijing | Grain and oil trade | 100.00 | 100.00 | Merger under the same control | |
| Beijing Eisen-Lubao Oil Co., Ltd. | Beijing | Beijing | Agricultural Product and By Product Processing | 100.00 | 100.00 | Merger under the same control | |
| Beijing Tianweikang Oil Distribution Center Co., Ltd. | Beijing | Beijing | Warehousing | 100.00 | 100.00 | Merger under the same control | |
| Beijing Guchuan Bread Food Co., Ltd. | Beijing | Beijing | Food Processing | 100.00 | 100.00 | Merger under the same control | |
| Zhejiang Xiao Wang Zi Food Co., Ltd. | Hangzhou | Hangzhou | Food Processing | 17.6794 | 77.2072 | 94.8866 | Combination not under same control |
| Hangzhou Lin'an Xiaotianshi Food Co., Ltd. | Hangzhou | Hangzhou | Food Processing | 17.6794 | 77.2072 | 94.8866 | Combination not under same control |
| Liaoning Xiao Wang Zi Food Co., Ltd. | Liaoning | Liaoning | Food Processing | 17.6794 | 77.2072 | 94.8866 | Combination not under same control |
| Linqing Xiao Wang Zi Food Co., Ltd. | Linqing | Linqing | Food Processing | 17.6794 | 77.2072 | 94.8866 | Combination not under same control |
| Lin'an Chunmanyuan Agricultural Development Co., Ltd. | Hangzhou | Hangzhou | Food Processing | 17.6794 | 77.2072 | 94.8866 | Combination not under same control |
| Jingliang (Singapore) International Trade Co., Ltd. | Singapore | Singapore | Grain trade | 100.00 | 100.00 | Establishment by investment | |
| Jingliang Rural Complex Construction and Operations (Xinyi) Co., Ltd. | Xinyi | Xinyi | Land remediation | 51.00 | 51.00 | Establishment by investment | |
| Jingliang (Caofeidian) Agricultural Development Co., Ltd. | Tangshan | Tangshan | Plantation | 51.00 | 51.00 | Establishment by investment |
| Beijing jingliang gubi oil and grease co. LTD | Beijing | Beijing | Grain and oil trade | 100 | 100 | Establishment by investment | |
| Jingliang (Yueyang) Grain and Oil Industry Co., Ltd. | Hunan | Hunan | Agricultural products | 65.00 | 65.00 | Establishment by investment |
(2) Major non-wholly-owned subsidiaries
| Name of Subsidiary | Shareholding Ratio of Minority Shareholders (%) | Voting rights ratio of Minority Shareholders (%) | Profit And Loss Attributable to Minority Shareholders for the Current Period | Dividends Distributed to Minority Shareholders for the Current Period | Balance of Minority Shareholder's Equity at the End of the Period |
| Zhejiang Xiao Wang Zi Food Co., Ltd. | 5.1134 | 5.1134 | 15,155,396.93 | 1,704,626.89 | 48,469,370.18 |
| Jingliang (Tianjin) Grain and Oil Industry Co., Ltd. | 30 | 30 | 18,060,680.13 | 265,260,839.72 | |
| Jingliang (Hebei) Oil Industry Co., Ltd. | 49 | 49 | 1,756,853.44 | 2,009,000.00 | 37,180,745.87 |
| Jingliang (Caofeidian) Agricultural Development Co., Ltd. | 49 | 49 | 1,162,543.53 | 25,196,306.01 |
(3) Important financial information on major non-wholly-owned subsidiaries
| Items | Ending balance or Amount incurred in the current period | |||
| Zhejiang Xiao Wang Zi Food Co., Ltd. | Jingliang (Tianjin) Grain and Oil Industry Co., Ltd. | Jingliang (Hebei) Oil Industry Co., Ltd. | Jingliang (Caofeidian) Agricultural Development Co., Ltd. | |
| Current Assets | 545,563,045.64 | 1,393,747,379.61 | 272,382,537.61 | 63,924,854.13 |
| Items | Ending balance or Amount incurred in the current period | |||
| Zhejiang Xiao Wang Zi Food Co., Ltd. | Jingliang (Tianjin) Grain and Oil Industry Co., Ltd. | Jingliang (Hebei) Oil Industry Co., Ltd. | Jingliang (Caofeidian) Agricultural Development Co., Ltd. | |
| Non-current Assets | 496,391,615.83 | 782,065,202.69 | 81,817,706.52 | 677,625.84 |
| Total Assets | 1,041,954,661.47 | 2,175,812,582.30 | 354,200,244.13 | 64,602,479.97 |
| Current Liabilities | 158,579,977.51 | 1,235,715,663.77 | 274,199,358.63 | 7,710,550.95 |
| Non-current Liabilities | 18,912,566.95 | 51,395,336.36 | 511,739.20 | |
| Total Liabilities | 177,492,544.46 | 1,287,111,000.13 | 274,711,097.83 | 7,710,550.95 |
| Operating Income | 827,007,026.15 | 4,636,677,763.70 | 399,581,771.45 | 18,556,537.62 |
| Net Profit (Loss) | 106,691,266.57 | 87,588,683.12 | 6,610,073.09 | 5,470,896.35 |
| Total Comprehensive Income | 106,691,266.57 | 87,588,683.12 | 6,610,073.09 | 5,470,896.35 |
| Cash Flow from Operating Activities | 116,629,645.06 | 724,136,543.87 | 108,028,487.75 | -3,617,581.51 |
(Continued)
| Items | Beginning balance or Amount incurred in the prior period | |||
| Zhejiang Xiao Wang Zi Food Co., Ltd. | Jingliang (Tianjin) Grain and Oil Industry Co., Ltd. | Jingliang (Hebei) Oil Industry Co., Ltd. | Jingliang (Caofeidian) Agricultural Development Co., Ltd. | |
| Current Assets | 348,212,958.32 | 1,451,014,894.50 | 355,193,589.41 | 65,278,291.00 |
| Non-current Assets | 636,041,329.78 | 784,620,786.80 | 83,905,315.98 | 375,361.52 |
| Total Assets | 984,254,288.10 | 2,235,635,681.30 | 439,098,905.39 | 65,653,652.52 |
| Current Liabilities | 140,227,047.42 | 1,283,603,409.67 | 361,352,282.65 | 14,232,619.85 |
| Non-current Liabilities | 20,656,022.86 | 67,829,472.58 | 1,867,549.53 | |
| Total Liabilities | 160,883,070.28 | 1,351,432,882.25 | 363,219,832.18 | 14,232,619.85 |
| Operating Income | 817,382,788.30 | 3,947,727,557.55 | 353,156,192.23 | 37,886,609.79 |
| Items | Beginning balance or Amount incurred in the prior period | |||
| Zhejiang Xiao Wang Zi Food Co., Ltd. | Jingliang (Tianjin) Grain and Oil Industry Co., Ltd. | Jingliang (Hebei) Oil Industry Co., Ltd. | Jingliang (Caofeidian) Agricultural Development Co., Ltd. | |
| Net Profit (Loss) | 131,200,734.73 | 60,202,267.11 | 3,585,415.19 | 2,372,537.81 |
| Total Comprehensive Income | 131,200,734.73 | 60,202,267.11 | 3,585,415.19 | 2,372,537.81 |
| Cash Flow from Operating Activities | 26,043,033.24 | -504,494,426.93 | -16,169,538.34 | -5,128,929.53 |
2. Equity in Joint Ventures or Affiliates
1. Important Joint Ventures or Affiliates
| Name of Joint Venture or Affiliate | Principle Place of Business | Registered Place | Nature of Business | Shareholding Ratio (%) | Accounting Treatment Methods for Investment in Joint Ventures or Affiliates | |
| Direct | Indirect | |||||
| One Joint Ventures | ||||||
| 1. Beijing Zhengda Feed Co., Ltd. | Beijing | Beijing | Manufacturer | 50.00 | Equity method | |
| Two Affiliates | ||||||
| 1. SINOGRAIN (Tianjin) Warehousing Logistics Co., Ltd. | Tianjin | Tianjin | Transportation and warehousing | 30.00 | Equity method | |
| 2. Jingliang Missme Catering Management (Beijing) Co., Ltd. | Beijing | Beijing | Manufacturer | 48.00 | Equity method | |
2. Important financial information on major joint ventures
| Item | Ending Balance/Current Amount | Beginning Balance/Last Term Amount |
| Beijing Zhengda Feed Co., Ltd. | Beijing Zhengda Feed Co., Ltd. | |
| Current assets | 259,094,822.42 | 228,921,574.13 |
| Item | Ending Balance/Current Amount | Beginning Balance/Last Term Amount |
| Beijing Zhengda Feed Co., Ltd. | Beijing Zhengda Feed Co., Ltd. | |
| Including: cash and cash equivalents | 30,509,860.94 | 95,186,696.60 |
| Non-current assets | 24,949,630.10 | 25,478,642.09 |
| Total assets | 284,044,452.52 | 254,400,216.22 |
| Current liabilities | 59,463,197.04 | 73,979,867.51 |
| Non-current liabilities | 5,112,214.50 | 4,076,166.52 |
| Total liabilities | 64,575,411.54 | 78,056,034.03 |
| Minority shareholder's equity | ||
| Shareholders' equity attributable to the parent company | 219,469,040.98 | 176,344,182.19 |
| Share of net assets based on shareholding ratio | 109,734,520.49 | 88,172,091.10 |
| Adjustments | 2,652,807.39 | |
| -- Goodwill | ||
| -- Unrealized profits from internal transactions | ||
| -- Other | 2,652,807.39 | |
| Book value of equity investment in joint ventures | 109,734,520.49 | 90,824,898.49 |
| Fair value of equity investment in joint ventures with open offers | ||
| Operating income | 369,615,151.09 | 336,626,475.66 |
| Financial costs | -5,587,491.34 | -3,211,106.78 |
| Income tax expense | 14,082,117.12 | 11,205,730.33 |
| Net profit | 43,173,099.79 | 36,873,259.85 |
| Net profit from discontinued operations | ||
| Other comprehensive income | -211,261.00 | -163,020.00 |
| Total comprehensive income | 42,961,838.79 | 36,710,239.85 |
| Dividends received from joint ventures in the current period |
3. Important financial information on major affiliates
| Item | Ending Balance/Current Amount | Beginning Balance/Last Term Amount |
| SINOGRAIN (Tianjin) Warehousing Logistics Co., Ltd. | SINOGRAIN (Tianjin) Warehousing Logistics Co., Ltd. |
| Item | Ending Balance/Current Amount | Beginning Balance/Last Term Amount |
| SINOGRAIN (Tianjin) Warehousing Logistics Co., Ltd. | SINOGRAIN (Tianjin) Warehousing Logistics Co., Ltd. | |
| Current assets | 104,812,139.17 | 87,560,108.46 |
| Non-current assets | 555,196,631.04 | 407,888,087.68 |
| Total assets | 660,008,770.21 | 495,448,196.14 |
| Current liabilities | 32,099,278.71 | 24,167,311.59 |
| Non-current liabilities | 250,581,609.08 | 72,609,829.76 |
| Total liabilities | 282,680,887.79 | 96,777,141.35 |
| Minority shareholder's equity | ||
| Shareholders' equity attributable to the parent company | 377,327,882.42 | 398,671,054.79 |
| Share of net assets based on shareholding ratio | 113,198,364.73 | 119,601,316.43 |
| Adjustments | ||
| -- Goodwill | ||
| -- Unrealized profits from internal transactions | ||
| -- Others | ||
| Book value of equity investment in affiliates | 113,198,364.73 | 119,601,316.43 |
| Fair value of equity investment in affiliates with open offers | ||
| Operating income | 52,065,840.85 | 36,413,675.87 |
| Net profit | 7,936,827.63 | 6,549,552.18 |
| Net profit from discontinued operations | ||
| Other comprehensive income | ||
| Total comprehensive income | 7,936,827.63 | 6,549,552.18 |
| Dividends received from affiliates in the current period | 24,680,000.00 |
IX. Risks Related to Financial InstrumentsThe Company's principal financial instruments include equity investment, creditors'investment, borrowing, accounts receivable, accounts payable, etc. The primary purpose ofthese financial instruments is to finance the operations of the Company.The Company has avariety of other financial assets and liabilities directly arising from its operations, such asaccounts receivable and accounts payable.
The main risks caused by the Company's financial instruments are credit risk, liquidityrisk and market risk.
1. Classification of financial instruments
(1) Book value of various financial assets on the balance sheet date
A. December 31, 2021
| Financial asset items | Financial assets measured at amortized cost | Financial assets measured at fair value and the changes recorded in current profits and losses | Financial assets measured at fair value and the changes recorded in other comprehensive income | Total |
| Monetary funds | 507,144,668.45 | 507,144,668.45 | ||
| Transactional financial assets | 40,377,048.08 | 40,377,048.08 | ||
| Derivative financial assets | ||||
| Notes receivables | ||||
| Accounts receivables | 82,694,094.62 | 82,694,094.62 | ||
| Other receivables | 284,756,636.27 | 284,756,636.27 | ||
| Investment in other equity instruments | 20,000,000.00 | 20,000,000.00 | ||
| Current portion of non-current assets | 156,139,100.00 | 156,139,100.00 | ||
| Other current assets | 742,800,000.00 | 62,577,325.41 | 805,377,325.41 | |
| Other non-current assets | 189,741,996.74 | 189,741,996.74 |
B. December 31, 2020
| Financial asset items | Financial assets measured at amortized cost | Financial assets measured at fair value and the changes recorded in current profits and losses | Financial assets measured at fair value and the changes recorded in other comprehensive income | Total |
| Monetary funds | 335,466,169.61 | 335,466,169.61 | ||
| Transactional financial assets | 63,478,071.73 | 63,478,071.73 |
| Financial asset items | Financial assets measured at amortized cost | Financial assets measured at fair value and the changes recorded in current profits and losses | Financial assets measured at fair value and the changes recorded in other comprehensive income | Total |
| Derivative financial assets | ||||
| Notes receivables | 456,565.85 | 456,565.85 | ||
| Accounts receivables | 92,245,667.60 | 92,245,667.60 | ||
| Other receivables | 541,905,656.97 | 541,905,656.97 | ||
| Investment in other equity instruments | 20,000,000.00 | 20,000,000.00 | ||
| Other non-current assets | 319,739,581.67 | 319,739,581.67 |
(2) Book value of various financial liabilities on the balance sheet dateA. December 31, 2021
| Financial liability items | Financial liabilities measured at fair value and changes included in current profits and losses | Other financial liability | Total |
| Short term loans | 1,521,669,601.35 | 1,521,669,601.35 | |
| Derivative financial liability | 70,305,871.37 | 70,305,871.37 | |
| Accounts payable | 186,748,746.42 | 186,748,746.42 | |
| Other Payables | 73,985,586.39 | 73,985,586.39 |
B. December 31, 2020
| Financial liability items | Financial liabilities measured at fair value and changes included in current profits and losses | Other financial liability | Total |
| Short term loans | 1,497,414,079.05 | 1,497,414,079.05 | |
| Derivative financial liability | 371,219,136.84 | 371,219,136.84 | |
| Accounts payable | 75,384,075.39 | 75,384,075.39 | |
| Other Payables | 72,292,881.24 | 72,292,881.24 |
2. Credit Risk
On December 31, 2021, the largest credit risk exposure that may cause financial lossto the Company mainly comes from the loss on financial assets of the Company due to thefailure of the other party to perform its obligations, including:
Book value of financial assets recognized in the consolidated balance sheet; for afinancial instrument measured at fair value, its book value reflects its risk exposure insteadof their biggest risk exposure, and its biggest risk exposure may vary with the change of itsfuture fair value.
In order to reduce the credit risk, the Company sets relevant policies to control itsexposure, sets corresponding credit periods based on customer’s financial position,possibility of obtaining guarantees from third parties, credit records and other factors suchas current market conditions and other credit qualifications for customer assessment, andimplements other monitoring procedures to ensure that necessary measures are taken torecover overdue credits. In addition, the Company reviews the collection of individualaccount receivables on each balance sheet date in order to make sufficient provision for baddebts for collectable amounts. Therefore, the Company's management believes that theCompany's credit risk has been greatly reduced.
The liquidity funds of the Company are deposited in banks with high credit rating, sothe credit risk of liquidity funds is low.
3. Liquidity Risk
When managing liquidity risk, the Company keeps and monitors adequate cash andcash equivalents approved by its management in order to meet the Company's businessneeds and reduce the influences of cash flow fluctuations. The Company's managementmonitors the use of bank loans and ensures the performance of loan agreements.
Maturity analysis of financial liabilities in terms of undiscounted contractual cashflows:
| Item | December 31, 2021 | |||
| Within One Year | 1 To 5 Years | Above Five Years | Total | |
| Short term loans | 1,521,669,601.35 | 1,521,669,601.35 | ||
| Derivative financial liability | 70,305,871.37 | 70,305,871.37 | ||
| Accounts payable | 185,082,028.27 | 1,666,718.15 | 186,748,746.42 | |
| Other Payables | 73,985,586.39 | 73,985,586.39 | ||
(Continued)
| Item | December 31, 2020 | |||
| Within One Year | 1 To 5 Years | Above Five Years | Total | |
| Short term loans | 1,497,414,079.05 | 1,497,414,079.05 | ||
| Derivative financial liability | 371,219,136.84 | 371,219,136.84 | ||
| Accounts payable | 72,075,894.39 | 3,308,181.00 | 75,384,075.39 | |
| Other Payables | 72,292,881.24 | 72,292,881.24 | ||
4. Market risk
Market risk refers to the risk that the fair value or future cash flow of financialinstruments will fluctuate due to the change of market price. Market risk mainly includesinterest rate risk, foreign exchange risk and other price risks, such as equity instrumentinvestment price risk.
(1) Interest Rate Risk
The Company's interest rate risk mainly arises from bank loans. The financial liabilitiesat floating interest rates bring the Company the interest rate risk on cash flow, while thefinancial liabilities at fixed interest rates bring the Company the interest rate risk on fairvalue. The Company decides the relative proportion of fixed interest rate contracts andfloating interest rate contracts according to the current market environment.
As of December 31, 2021, the Company's interest-bearing liabilities under floatingrate contracts denominated in RMB amounted to RMB 170,000,000.00 and those underfixed rate contracts denominated in RMB amounted to RMB 1,351,669,601.35.
(2) Exchange Rate Risk
The Company's exposure to foreign exchange risks is primarily related to theCompany's operating activities (when revenues and expenditures are settled in foreigncurrencies other than the Company's accounting standard currency) and its net investmentsin its overseas subsidiaries.
The Company's exposure to foreign exchange risks is mainly related to US dollars.Except that some of the Company's subsidiaries purchase and sell in US dollars, othermajor business activities of the Company are priced and settled in RMB.
As at December 31, 2021, the Company's assets and liabilities are in RMB, except theassets or liabilities described in the table below are in US dollars.
The foreign exchange risks arising from the assets and liabilities of such foreigncurrency balances may have an impact on the Company's operating results.
| Items | Ending Balance | Beginning Balance |
| Monetary funds | 23,046,783.19 | 5,056,624.13 |
| Accounts receivable | 1,044,832.24 | |
| Short-term borrowing | 802,427,368.52 | |
| Accounts payable | 595,286.36 | |
| Other Payables | 381,054.16 |
Note: The Company pays close attention to the impact of exchange rate fluctuationson the Company.
The company adopts sensitivity analysis technology to analyze the possible impact ofreasonable and possible changes of risk variables on current profit and loss or owner'sequity. As any risk variable rarely changes in isolation, and the correlation betweenvariables will have a significant effect on the final impact amount of a risk variable change,the following content is carried out under the assumption that the change of each variable isindependent.
On the assumption that foreign currency assets and foreign currency liabilities remainrelatively stable and other variables remain unchanged, the after-tax impact of possible
reasonable changes in exchange rate on current profits and losses and rights and interests isas follows:
| Item | Current period | ||
| [US dollar] Exchange rate Increase /(decrease) | Gross profit/net profit increase /(decrease) | Increase/(decrease) in shareholders' equity | |
| The yuan depreciated against the US dollar | 5% | -38,998,793.58 | -38,998,793.58 |
| The yuan appreciated against the US dollar | -5% | 38,998,793.58 | 38,998,793.58 |
| Item | Prior period | ||
| [US dollar] Exchange rate Increase / (decrease) | Gross profit/net profit increase /(decrease) | Increase/(decrease) in shareholders' equity | |
| The yuan depreciated against the US dollar | 5% | 286,020.11 | 286,020.11 |
| The yuan appreciated against the US dollar | -5% | -286,020.11 | -286,020.11 |
X. Disclosure of Fair Values
1. Fair values of assets and liabilities measured at fair value at the end of theperiod
| Item | Fair Values at the End of the Period | |||
| First Level Fair Value Measurement | Second Level Fair Value Measurement | Third Level Fair Value Measurement | Total | |
| One. Continuous fair value measurement | ||||
| Ⅰ. Transactional financial assets | 40,377,048.08 | 40,377,048.08 | ||
| 1. Financial assets that are measured at fair value and whose changes are included in the current profits and losses | 40,377,048.08 | 40,377,048.08 | ||
| (1) Investment in debt instruments | 40,377,048.08 | 40,377,048.08 | ||
| (2) Investment in equity instruments | ||||
| Item | Fair Values at the End of the Period | |||
| First Level Fair Value Measurement | Second Level Fair Value Measurement | Third Level Fair Value Measurement | Total | |
| (3) Derivative financial assets | ||||
| 2. Financial assets designated as fair value through profit or loss | ||||
| (1) Investment in debt instruments | ||||
| (2) Investment in equity instruments | ||||
| (3) Others | ||||
| Ⅱ. Other debt investment | ||||
| Ⅲ. Investment in other equity instruments | 20,000,000.00 | 20,000,000.00 | ||
| Total assets continuously measured at fair value | 40,377,048.08 | 20,000,000.00 | 60,377,048.08 | |
| Ⅵ.Transactional financial liabilities | 70,305,871.37 | 70,305,871.37 | ||
| 1. Financial liabilities measured at fair value with changes included in current profits and losses | 70,305,871.37 | 70,305,871.37 | ||
| Including: transactional bonds issued | ||||
| derivative financial liability | 70,305,871.37 | 70,305,871.37 | ||
| others | ||||
| 2. Financial liabilities designated as fair value through profit or loss | ||||
| Total liabilities continuously measured at fair value | 70,305,871.37 | 70,305,871.37 | ||
2. Basis for determining market prices of continuous and non-continuous firstlevel fair value measurement itemsThe Company makes offers for first level fair value measurement according to opencontracts of the futures exchange and the quote from the bank on financial product at theend of the period.
3. Continuous and non-continuous third-level fair value measurement itemsadopt valuation techniques and qualitative and quantitative information of importantparametersThe company‘s investment in other equity instruments of the third level fair valuemeasurement project is the ”three noes“ equity investment that without control, jointcontrol and significant influence held by the company. On the basis of analyzing theoperation status of the invested enterprise and combining with relevant situations, thecompany takes the investment cost as the fair value of other equity instrument investmentfor measurement at the end of the period.XI. Related Parties and Related-Party Transactions
1. Identification criteria of related parties
If one party controls, jointly controls or exerts significant influence on the other party,and two or more parties are controlled, jointly controlled or significantly influenced by thesame party, they constitute related parties.
2. Parent Company of the Company
| Name of Parent Company | Company type | Registered Place | Legal representative | Nature of Business | Registered Capital (ten thousand Yuan) |
| Beijing Grain Group Co. Ltd. | Wholly state-owned enterprise | Beijing | Wang Zhenzhong | Investment Management | 90,000.00 |
(Continued)
| Proportion of Shares Held by Parent Company in the Company (%) | Proportion of Voting Power Held by Parent Company in the Company (%) | The ultimate controlling party of the Company | Organization code |
| 39.68 | 39.68 | Beijing State-owned Capital Operation and Management Center | 683551038 |
3. Subsidiaries of the Company
See 1. Equity in Subsidiaries under Section VIII of the Notes for details.
4. Joint Ventures and Affiliates of the Company
See 3. Equity in Joint Ventures or Affiliates under Section VIII of the Notes for details.
5. Other Related Parties
| Name of Other Related Party | Relationship with the Company |
| Beijing Ershang Wangzhihe Food Co., Ltd. | Controlled by the ultimate controlling party |
| Feed branch of Beijing Sanyuan Seed Industry Technology Co., Ltd | Controlled by the ultimate controlling party |
| Hebei shounong Modern Agricultural Technology Co., Ltd | Controlled by the ultimate controlling party |
| Name of Other Related Party | Relationship with the Company |
| Beijing Shounong Consumption Assistance Innovation and Entrepreneurship Center Co., Ltd. | Controlled by the ultimate controlling party |
| Beijing Guchun Food Co., Ltd | Controlled by the ultimate controlling party |
| Hebei Luanping Huadu Food Co., Ltd | Controlled by the ultimate controlling party |
| Beijing Er Shang palace Yifu Food Co., Ltd | Controlled by the ultimate controlling party |
| Beijing Jingliang Dongfang grain and Oil Trading Co., Ltd | Controlled by the ultimate controlling party |
| Huairou Brewery of Beijing Liubiju Food Co. | Controlled by the ultimate controlling party |
| Beijing food supply office No.34 supply department Co., Ltd | Controlled by the ultimate controlling party |
| Beijing Haidian Xijiao grain and oil supply station Co., Ltd | Controlled by the ultimate controlling party |
| Beijing shounong Supply Chain Management Co., Ltd | Controlled by the ultimate controlling party |
| Beijing Zhujun grain and oil supply Co., Ltd | Controlled by the ultimate controlling party |
| Beijing Children soldiers grain and oil supply Co., Ltd | Controlled by the ultimate controlling party |
| Beijing Wuhuan Shuntong Supply Chain Management Co., Ltd | Controlled by the ultimate controlling party |
| Beijing Guchun rice Co., Ltd | Controlled by the ultimate controlling party |
| Beijing baijiayi Food Co., Ltd | Controlled by the ultimate controlling party |
| Beijing Sanyuan Food Co., Ltd | Controlled by the ultimate controlling party |
| Beijing jinggrain e-commerce Co., Ltd | Controlled by the ultimate controlling party |
| Beijing junchengyuan grain and oil purchase and Marketing Co., Ltd | Controlled by the ultimate controlling party |
| Beijing Hongyuan Lijun grain and oil supply Co., Ltd | Controlled by the ultimate controlling party |
| Beijing Dongfang Agricultural Group Supply Chain Management Co., Ltd. | Controlled by the ultimate controlling party |
| Beijing maliandou special supply station Co., Ltd | Controlled by the ultimate controlling party |
| Beijing Liangguan Grain and Oil Supply Co., Ltd. | Controlled by the ultimate controlling party |
| Beijing Huadu Yukou Poultry Co., Ltd. | Controlled by the ultimate controlling party |
| Shanghai shounong Investment Holding Co., Ltd | Controlled by the ultimate controlling party |
| Shandong Fukuan Bioengineering Co., Ltd | Controlled by the ultimate controlling party |
| Beijing Yueshengzhai Halal Food Co., Ltd | Controlled by the ultimate controlling party |
| Da Hong Men Meat Food Co.,ltd Beijing Er Shang Group | Controlled by the ultimate controlling party |
| Beijing heiliu animal husbandry technology Co., Ltd | Controlled by the ultimate controlling party |
| Beijing Capital Agriculture Group | Controlled by the ultimate controlling party |
| Beijing Grain Group Co., Ltd | Controlled by the ultimate controlling party |
| Beijing Academy of Food Science | Controlled by the ultimate controlling party |
| Beijing jinggrain Dagu grain and Oil Trade Co., Ltd | Controlled by the ultimate controlling party |
| Beijing Shounong Grain Reserve Co., Ltd. | Controlled by the ultimate controlling party |
| Beijing Daxing National Food Reserve Co., Ltd | Controlled by the ultimate controlling party |
| Beijing Shounong Development Co., Ltd. | Controlled by the ultimate controlling party |
| Name of Other Related Party | Relationship with the Company |
| Beijing dahongmen grain storage Co., Ltd | Controlled by the ultimate controlling party |
| Beijing Nanyuan vegetable oil factory Co., Ltd | Controlled by the ultimate controlling party |
| Beijing Grain Group Head Company | Controlled by the ultimate controlling party |
| Beijing shounong Xiangshan Conference Center Co., Ltd | Controlled by the ultimate controlling party |
| Beijing shounong Food Group Finance Co., Ltd | Controlled by the ultimate controlling party |
| Tianjin Juxiang Technology Co., Ltd. | Controlled by the ultimate controlling party |
6. Related-party Transactions
A. Related-party transactions for purchasing and saling goods and provision andacceptance of labor services
(1) Purchase of goods or acceptance of labor services
| Related Party | Related-party Transaction | Current Amount | Last Term Amount |
| Shanghai Sunlon Investment HOLDINGS Ltd. | Purchase of goods | 65,000,554.51 | |
| Beijing Guchun Food Co., Ltd | Purchase of goods | 17,625,723.68 | 13,155,894.06 |
| Shandong Fukuan Bioengineering Co., Ltd | Purchase of goods | 780,495.67 | 164,147.79 |
| Beijing Yueshengzhai Halal Food Co., Ltd | Purchase of goods | 562,891.05 | 511,156.63 |
| Beijing Jingliang Dongfang grain and Oil Trading Co., Ltd | Purchase of goods | 405,452.28 | 524,008.25 |
| Da Hong Men Meat Food Co.,ltd Beijing Er Shang Group | Purchase of goods | 394,945.43 | 403,578.27 |
| Beijing Sanyuan Food Co., Ltd | Purchase of goods | 280,809.77 | 1,400,066.43 |
| Beijing heiliu animal husbandry technology Co., Ltd | Purchase of goods | 203,640.70 | 99,883.20 |
| Other related units | Purchase of goods | 306,797.14 | 402,640.52 |
| Beijing Shounong Grain Reserve Co., Ltd. | Storage fee | 493,822.64 | |
| Beijing shounong Food Group Co., Ltd | Display and exhibition fees | 600,000.00 |
(2) Sale of goods/ provision of labor services
| Related Party | Related-party Transaction | Current Amount | Last Term Amount |
| Shanghai shounong Investment Holding Co., Ltd | Sale of goods | 639,999,993.00 | |
| Beijing Ershang Wangzhihe Food Co., Ltd. | Sale of goods | 62,085,307.44 | 71,047,922.42 |
| Feed branch of Beijing Sanyuan Seed Industry Technology Co., Ltd | Sale of goods | 47,175,363.45 | 31,339,925.94 |
| Related Party | Related-party Transaction | Current Amount | Last Term Amount |
| Hebei shounong Modern Agricultural Technology Co., Ltd | Sale of goods | 17,038,071.30 | 14,233,603.95 |
| Beijing Shounong Consumption Assistance Innovation and Entrepreneurship Center Co., Ltd. | Sale of goods | 15,515,188.10 | 2,916,212.83 |
| Beijing Guchun Food Co., Ltd | Sale of goods | 15,317,021.38 | 5,605,452.37 |
| Hebei Luanping Huadu Foodstuff Co., Ltd. | Sale of goods | 9,820,008.43 | |
| Beijing Ershang Xijie Foodstuff Co., Ltd. | Sale of goods | 9,367,917.44 | |
| Beijing Jingliang Dongfang grain and Oil Trading Co., Ltd | Sale of goods | 7,259,668.09 | 4,114,303.41 |
| Huairou Brewing Factory of Beijing Liubiju Food Co., Ltd | Sale of goods | 5,207,793.60 | 174,678.90 |
| Beijing food supply office No.34 supply department Co., Ltd | Sale of goods | 4,825,987.13 | 3,381,064.38 |
| Beijing Haidian Xijiao grain and oil supply station Co., Ltd | Sale of goods | 3,014,544.41 | 15,886,751.23 |
| Beijing shounong Supply Chain Management Co., Ltd | Sale of goods | 2,427,623.76 | 29,226,266.13 |
| Beijing Zhujun grain and oil supply Co., Ltd | Sale of goods | 2,406,903.69 | 5,097,181.62 |
| Beijing Children soldiers grain and oil supply Co., Ltd | Sale of goods | 2,219,449.54 | 3,366,280.71 |
| Beijing Wuhuan Shuntong Supply Chain Management Co., Ltd | Sale of goods | 1,604,476.13 | 2,200,674.09 |
| Beijing Guchun rice Co., Ltd | Sale of goods | 1,267,478.96 | 803,839.21 |
| Beijing baijiayi Food Co., Ltd | Sale of goods | 1,172,768.81 | 478,710.09 |
| Beijing Sanyuan Food Co., Ltd | Sale of goods | 747,433.70 | 470,695.16 |
| Beijing Jingliang e-commerce Co., Ltd | Sale of goods | 682,187.95 | 711,015.24 |
| Beijing junchengyuan grain and oil purchase and Marketing Co., Ltd | Sale of goods | 618,123.86 | 1,986,543.12 |
| Beijing Hongyuan Lijun grain and oil supply Co., Ltd | Sale of goods | 492,201.84 | 735,871.56 |
| Beijing maliandou special supply station Co., Ltd | Sale of goods | 70,642.20 | 2,757,335.78 |
| Beijing Liangguan Grain and Oil Supply Co., Ltd. | Sale of goods | 11,559.64 | 2,706,388.99 |
| Beijing huaduyukou poultry Co., Ltd | Sale of goods | 1,539,631.42 |
| Related Party | Related-party Transaction | Current Amount | Last Term Amount |
| Other-related units | Sale of goods | 2,215,034.03 | 3,008,834.25 |
| Shanghai Sunlon Investment Holding Co., Ltd | Provision of services | 12,533,333.63 | 23,867.92 |
| Beijing Capital Agriculture Group Co., Ltd | Provision of services | 599,999.98 | 799,999.97 |
| Beijing Guchuan Food Co., Ltd | Provision of services | 23,691.32 | 98,481.29 |
| Beijing Grain Group Co., Ltd | Provision of services | 574,150.93 | |
| Beijing Academy of Food Science | Provision of services | 141,633.74 | |
| Beijing jinggrain Dagu grain and Oil Trade Co., Ltd | Provision of services | 245,377.35 |
Related-party transactions for purchasing and saling goods and provision andacceptance of labor services: The price of a related-party transaction shall be equal to theprice charged for a unrelated-party transaction that is same as or similar to suchrelated-party transaction.B. Related-party lease
(1) If the Company is the lessor,
| Name of Lessee | Type of Leased Asset | Lease start date | Lease termination date | Pricing basis of rental income | Lease Income Recognized in the Current Period | Lease Income Recognized in the Prior Period |
| Beijing Guchuan Food Co., Ltd. | House leasing | January 1, 2020 | December 31,2020 | Market price | 13,333,333.30 | |
| Beijing Jingliang E-commerce Co., Ltd. | Warehouse leasing | January 1, 2020 | December 31,2020 | Market price | 664,311.28 | |
| Beijing Jingliang E-commerce Co., Ltd | Vehicle leasing | January 1, 2021 | December 31,2021 | Market price | 11,265.13 | 22,530.26 |
| Total | -- | -- | -- | -- | 11,265.13 | 14,020,174.84 |
(2)If the Company is the lessee,
| Name of Lessee | Type of Leased Asset | Pricing basis of rleasing fee | Lease Expense Recognized in the Current Period | Lease Expense Recognized in the Prior Period |
| Name of Lessee | Type of Leased Asset | Pricing basis of rleasing fee | Lease Expense Recognized in the Current Period | Lease Expense Recognized in the Prior Period |
| Beijing Daxing National Grain Purchasing & Storage Warehouse | House leasing | Market price | 1,935,963.30 | 2,110,200.00 |
| Beijing Shounong Development Co., Ltd. | House leasing | Market price | 1,803,247.58 | 1,297,946.86 |
| Beijing Dahongmen Foodstuff Storage | House leasing | Market price | 623,474.62 | |
| Beijing Grain Group Co., Ltd. | House leasing | Market price | 555,229.36 | 1,075,575.22 |
| Beijing Nanyuan Plant Oil Factory | House leasing | Market price | 311,926.61 | |
| Beijing Grain Group Head Company | House leasing | Market price | 33,027.52 | |
| Total | -- | -- | 5,262,868.99 | 4,483,722.08 |
3. Other Related-party Transactions
| Guaranteed Party | Related-party Transaction | Current Amount | Last Term Amount |
| Beijing Dahongmen Foodstuff Storage | Heating fee, cleaning fee, electricity fee | 177,183.60 | 60,359.34 |
| Beijing Shounong Development Co., Ltd. | Utilities, property fees | 98,847.10 | 52,527.02 |
| Beijing Haidian Xiangshan Rest House | Conference service fees | 20,654.60 | |
| Beijing Shounong Food Group Finance Co., Ltd. | Interest income | 1,589,080.65 | 396,546.91 |
| Beijing Guchuan Food Co., Ltd. | Brand royalty | 2,561,865.51 | 2,959,185.29 |
| Beijing Guchuan Rice Co., Ltd. | Brand royalty | 186,540.99 | 192,513.09 |
| Beijing Jingliang Dongfang Grain and Oil Trading Co., Ltd. | Brand royalty | 2,230.47 | 3,874.42 |
| Tianjin Juxiang Technology Co., Ltd. | Technical Service Fee | 1,582.20 |
(3)Remuneration for key management staff
| Item | Current Amount (Unit: ten thousand yuan) | Last Term Amount (Unit: ten thousand yuan) |
| Remuneration for Key Management Staff | 624.05 | 528.28 |
7. Related-party Receivables and Payables
(1) Receivables
| Item | Related-party | Ending Balance | Beginning Balance | ||
| Book Balance | Provision for Bad Debts | Book Balance | Provision for Bad Debts | ||
| Monetary funds | Beijing shounong Food Group Finance Co., Ltd | 167,000,000.00 | 158,585,719.53 | ||
| Receivables | Feed Branch of Beijing Sanyuan Seed Technology Co., Ltd. | 3,000,236.98 | 1,544,618.10 | ||
| Beijing Shounong Consumption Assistance Innovation and Entrepreneurship Center Co., Ltd. | 1,359,375.00 | 3,178,672.00 | |||
| Beijing Guchun Food Co., Ltd | 1,260,000.00 | 330,872.00 | |||
| Shanghai Sunlon Investment HOLDINGS Ltd. | 1,002,945.54 | ||||
| Beijing Ershang Xijie Foodstuff Co., Ltd. | 621,830.00 | ||||
| Beijing Jingliang Dongfang grain and Oil Trading Co., Ltd | 584,491.00 | 914,231.75 | |||
| Hebei Shounong Modern Agricultural Technology Co., Ltd. | 369,525.30 | 1,473,919.32 | |||
| Beijing Zhujun grain and oil supply Co., Ltd | 261,500.00 | 1,598,080.00 | |||
| Beijing baijiayi Food Co., Ltd | 196,800.00 | 23,100.00 | |||
| Beijing Dongfang Agricultural Group Supply Chain Management Co., Ltd. | 161,106.00 | ||||
| Beijing Guchun rice Co., Ltd | 72,688.00 | ||||
| Beijing Junyuan grain and oil purchasing and Marketing Co., Ltd | 43,000.00 | 1,009,912.00 | |||
| Item | Related-party | Ending Balance | Beginning Balance | ||
| Book Balance | Provision for Bad Debts | Book Balance | Provision for Bad Debts | ||
| Beijing Ershang Yihe Sunshine Real Estate Co., Ltd. | 15,520.00 | ||||
| Beijing Ershang Wangzhihe Food Co., Ltd. | 8,584,555.70 | ||||
| Beijing shounong Supply Chain Management Co., Ltd | 1,965,569.85 | ||||
| Beijing Haidian Xijiao grain and oil supply station Co., Ltd | 1,420,904.00 | ||||
| Beijing Liangguan grain and oil supply Co., Ltd | 672,100.00 | ||||
| Beijing Wuhuan Shuntong Supply Chain Management Co., Ltd | 147,000.00 | ||||
| Beijing food supply department No.34 supply department Co., Ltd | 83,260.00 | ||||
| Beijing Jingliang e-commerce Co., Ltd | 56,600.00 | ||||
| Beijing zidibing grain and oil supply Co., Ltd | 29,106.00 | ||||
| Beijing shounong Xiangshan Conference Center Co., Ltd | 5,250.00 | ||||
(2) Payables
| Item | Related-party | Ending Balance | Beginning balance |
| Contract liability | Shanghai Sunlon Investment HOLDINGS Ltd. | 3,943,587.12 | |
| Payables | Beijing Guchun Food Co., Ltd | 358,762.54 | 293,871.55 |
| Beijing Er Shang Mo Qi Zhong Hong Foods Co., Ltd. | 382.30 | ||
| Beijing Jingliang Dongfang grain and Oil Trading Co., Ltd | 294.51 | 20,674.03 | |
| Beijing Sunnyum Foods Co., Ltd. | 31.19 | ||
| Beijing Sanyuan Food Co., Ltd | 13,677.70 |
| Beijing Yueshengzhai Islamic Food Co., Ltd. | 1,922.50 | ||
| Beijing Changyang farm Co., Ltd | 1,470.00 | ||
| Other payables | Beijing Grain Group Co., Ltd. | 2,819,620.39 | 1,712,270.30 |
| Shanghai Sunlon Investment HOLDINGS Ltd. | 2,591,003.45 | ||
| Beijing Nanyuan vegetable oil factory Co., Ltd | 311,926.61 | ||
| Beijing Jingliang e-commerce Co., Ltd | 118,809.60 |
8. Related-party Commitments
The Company has no related-party commitments this year.XII. Share based paymentThere are no share based payments incurred this year for the company.
XIII. Commitments and Contingencies
| The company's subsidiary Beijing Jingliang Food Co., Ltd. as the guarantor is as follows:Guaranteed Party | Amount Guaranteed | Actual guarantee amount | Effective Date | Due Date | Whether the Guarantee Has Been Fulfilled |
| Beijing Tianweikang Oil Marketing Center Co., Ltd. | 122,070,000.00 | 36,000,000.00 | 2021.1.20 | Effective from the date of deliberation and approval of the 2020 general meeting of shareholders, for a period of one year | No |
| Jingliang (Tianjin) Grain and Oil Industry Co., Ltd. | 300,000,000.00 | 2020.4.17 | From the date of signing the agreement on designated delivery warehouse (designated warehouse) of Dalian Commodity Exchange to two years after the termination of the agreement on designated delivery warehouse (designated warehouse) of Dalian Commodity Exchange. | No | |
| Jingliang (Tianjin) Grain and Oil Industry Co., Ltd. | 200,000,000.00 | 2021.9.2 | From the date of signing the agreement on designated delivery warehouse (designated warehouse) of Dalian Commodity Exchange to two years after the termination of the agreement on designated delivery warehouse (designated warehouse) of Dalian Commodity Exchange. | No | |
| Beijing Jingliang Oil and Fat Co., Ltd. | 227,150,000.00 | 2021.11.16 | 2 years after the maturity of the debt as agreed in the main contract | No | |
| Beijing Jingliang Oil and Fat Co., Ltd. | 400,000,000.00 | 4,540,646.03 | 2021.6.18 | Effective from the date of deliberation and approval of the general meeting of shareholders in 2020 to the date of convening the general meeting of shareholders in 2021 | No |
| Beijing Jingliang Oil and Fat Co., Ltd. | 188,500,000.00 | 3,264,400.00 | 2021.6.18 | From the date of drawing or actual occurrence of the first financing under the financing letter to two years after the maturity date of the latest one of all the financing provided by the bank during the occurrence of the guaranteed debt under the financing letter. | No |
| Jingliang (Singapore) International Trade Co., Ltd. | 436,800,000.00 | 305,545,510.00 | 2021.5.17 | From March 2, 2021 to March 2, 2026 | No |
| Jingliang (Singapore) International Trade Co., Ltd. | 370,000,000.00 | 265,942,308.35 | 2021.6.18 | Effective from the date of deliberation and approval of the general meeting of shareholders in 2020 to the date of convening the general meeting of shareholders in 2021 | No |
XIV. Events after the Balance Sheet Date
1. Distribution of Profits
As of the financial report date of the company, the 24th meeting of the ninth board of directors in2022 approved that no profit distribution will be conducted in 2021, which still needs to be approvedby the general meeting of shareholders.
XV. Other Important Matters
1. Annuity Plan
Basic information of annuity: Beijing Jingliang Food Co., Ltd., Beijing Guchun Oil Co., Ltd.,Beijing Eisen Lubao Oil Co., Ltd., Beijing Jingliang Oil Co., Ltd. and Beijing Guchun Bread FoodCo., Ltd. of the company participated in the enterprise annuity plan of Beijing shounong FoodGroup Co., Ltd., and formulated the implementation rules of their respective enterprises under theannuity plan. The name of the annuity plan is Ping An Jinxiu life enterprise annuity plan; the trusteeand account manager are ping an Endowment Insurance Co., Ltd.; the trustee is China CITIC BankCo., Ltd.
2. Information of Divisions
(1) Basis of determination and accounting policies for reporting of divisionsThe Company's businesses consist of food processing, oil and grease and so on according to itsinternal organizational structure, management requirements and internal reporting system. TheCompany's management regularly evaluates the operating results of these divisions to determine theallocation of resources to them and evaluate their performance. The information reported bydivisions should be disclosed according to the accounting policies and measurement standardsadopted by such divisions when they are reporting to the management. These measurement basesshould be consistent with the accounting and measurement bases for preparation of financialstatements.
(2) Reporting of the financial information of divisions
| Item | Food Processing | Oil & Grease | Other | Offset Among Dvisions | Total |
| Operating income | 923,407,034.84 | 13,532,624,216.99 | 19,147,598.18 | -2,712,085,014.45 | 11,763,093,835.56 |
| Operating costs | 695,212,963.09 | 13,019,942,435.75 | 9,047,615.76 | -2,687,048,545.10 | 11,037,154,469.50 |
| Operating profit | 143,511,101.12 | 329,147,752.65 | 456,538,047.78 | -615,303,028.14 | 313,893,873.41 |
| Net profit attributable to parent company | 111,657,924.43 | 283,588,240.34 | 453,536,391.13 | -644,323,098.16 | 204,459,457.74 |
| Total assets | 1,129,395,611.60 | 8,120,235,309.43 | 2,927,459,631.31 | -6,130,490,493.44 | 6,046,600,058.90 |
| Total liabilities | 181,357,027.44 | 4,760,321,999.97 | 42,492,656.55 | -2,249,725,417.61 | 2,734,446,266.35 |
3. Lease
The lessee shall disclose the following information in relation with the lease.
| Item | Amount |
| Interest expense | 158,835.45 |
| Short-term lease payments charged to current profit or loss | 5,686,616.63 |
| Lease costs for low-value assets recognized in current profit or loss |
| Item | Amount |
| Variable lease payments not included in the measurement of lease liabilities | |
| Income from sublease of right-to-use assets | |
| Total cash outflows related to leases | 5,737,518.73 |
| Gains and losses related to sale and leaseback transactions |
XVI. Notes to Main Financial Statement Items of Parent Company
1. Accounts Receivable
（1）Disclosed according to aging
| Aging | Ending Balance |
| Within 1 Year (including 1 year) | |
| Among them: Within credit period (within 3 months) | |
| Credit period to 1 year | |
| 1 to 2 years (including 2 years) | |
| 2 to 3 years (including 3 years) | |
| 3 to 4 years (including 4 years) | |
| 4 to 5 years (including 5 years) | 3,000.00 |
| More than 5 years | 105,000.00 |
| Sub-total | 108,000.00 |
| Less: Allowance for bad debts | 107,400.00 |
| Total | 600.00 |
（2）Disclosed according to the method of provision for bad debt
| Type(s) | Ending Balance | ||||
| Book Balance | Bad Debt Provision | Book Value | |||
| Amount | Ratio(%) | Amount | Provision Ratio(%) | ||
| Separate provision for bad debts | |||||
| Portfolio provision for bad debts | 108,000.00 | 100.00 | 107,400.00 | 99.44 | 600.00 |
| Among them: Portfolio 1 | 108,000.00 | 100.00 | 107,400.00 | 99.44 | 600.00 |
| Total | 108,000.00 | -- | 107,400.00 | -- | 600.00 |
（Continued）
| Type(s) | Beginning Balance | ||
| Book Balance | Bad Debt Provision | Book Value | |
| Amount | Ratio(%) | Amount | Provision Ratio(%) | ||
| Separate provision for bad debts | |||||
| Portfolio provision for bad debts | 126,420.00 | 100.00 | 114,636.00 | 90.68 | 11,784.00 |
| Among them: Portfolio 1 | 126,420.00 | 100.00 | 114,636.00 | 90.68 | 11,784.00 |
| Total | 126,420.00 | -- | 114,636.00 | -- | 11,784.00 |
Portfolio provision for bad debts:
Portfolio provision item: aging portfolio
| Name | Ending Balance | Beginning Balance | ||||
| Accounts receivable | Bad Debt Provision | Provision Ratio | Accounts receivable | Bad Debt Provision | Provision Ratio | |
| Within 1 Year (including 1 year) | ||||||
| Among them: Within the credit period (within 3 months) | ||||||
| Credit period to 1 year | ||||||
| 1 to 2 years (including 2 years) | ||||||
| 2 to 3 years (including 3 years) | ||||||
| 3 to 4 years (including 4 years) | 3,000.00 | 1,500.00 | 50.00 | |||
| 4 to 5 years (including 5 years) | 3,000.00 | 2,400.00 | 80.00 | 51,420.00 | 41,136.00 | 80.00 |
| More than 5 years | 105,000.00 | 105,000.00 | 100.00 | 72,000.00 | 72,000.00 | 100.00 |
| Total | 108,000.00 | 107,400.00 | -- | 126,420.00 | 114,636.00 | |
(3) Details of bad debt provision
| Type | Carrying amount at the beginning | Amount changes for the period | Carrying amount at the end | |||
| Addition | Withdrawal or reversal | Write-off | Other changes | |||
| Bad debt provision | 114,636.00 | 11,184.00 | 18,420.00 | 107,400.00 | ||
| Total | 114,636.00 | 11,184.00 | 18,420.00 | 107,400.00 | ||
(4) Receivables actually written off in the current period
| Item | Amount |
| Item | Amount |
| Actual write-off amount | 18,420.00 |
During the period, the board of directors approved to write off the Beijing Branch of HainanJingliang Holding Co., Ltd., and to write off the uncollectible receivables.
（5）Accounts Receivable of the Top 5 Balances Collected by Debtors at the End of the Period
| Debtors | Book balance | Ratio of the total balance of accounts receivable(%) | Aging | Is it related | Bad debt provision |
| Hainan pearl river pipe pile co. LTD | 108,000.00 | 100.00 | 4-5 years, more than 5 years | No | 107,400.00 |
| Total | 108,000.00 | 100.00 | —— | —— | —— |
2. Other Receivables
A. Overview
(1) Classification
| Item | Ending Balance | Beginning Balance |
| Interest receivable | ||
| Dividends receivable | ||
| Other receivables | 180,000,000.00 | 103,341.26 |
| Total | 180,000,000.00 | 103,341.26 |
2. Other Receivables
(1) Disclosed according to aging
| Aging | Ending Balance |
| Within 1 Year (including 1 year) | 180,000,000.00 |
| Among them: Within credit period (within 3 months) | 180,000,000.00 |
| Credit period to 1 year | |
| 1 to 2 years (including 2 years) | |
| 2 to 3 years (including 3 years) | |
| 3 to 4 years (including 4 years) | |
| 4 to 5 years (including 5 years) | |
| More than 5 years | 93,197.85 |
| Sub-total | 180,093,197.85 |
| Less: Allowance for bad debts | 93,197.85 |
| Total | 180,000,000.00 |
(2) Classification of other receivables by nature of funds
| Nature of Funds | Book Balance at End of Period | Book Balance at Beginning of Year |
| Intercourse Funds of Units | 180,000,000.00 | 3,333.00 |
| Employee Receivables | ||
| Personal Intercourse Funds | 50,000.00 | |
| Petty Cash | 93,197.85 | 105,271.85 |
| Others | ||
| Total | 180,093,197.85 | 158,604.85 |
(3) Details about allowance for bad debt
| Provision for bad debt | Stage 1 | Stage 2 | Stage 3 | Total |
| Expected credit loss in the next 12 months | Expected credit loss for the whole period (no credit impairment) | Expected credit loss for the whole period (with credit impairment) | ||
| Amount on January 1, 2021 | 5,263.59 | 50,000.00 | 55,263.59 | |
| Carrying amount on January 1, 2021 during this period: | ||||
| ——Get into Stage 2 | ||||
| ——Get into Stage 3 | ||||
| ——Get back to Stage 2 | ||||
| ——Get back to Stage 1 | ||||
| Provision for the period | 87,934.26 | 87,934.26 | ||
| Reverse for the period | ||||
| Transfer for the period | ||||
| Write off for the period | 50,000.00 | 50,000.00 | ||
| Other changes | ||||
| Balance at December 31, 2021 | 93,197.85 | 93,197.85 |
(4) Details of bad debt provision
| Type | Carrying | Amount changes for the period | Carrying |
| amount at the beginning | Addition | Withdrawal or reversal | Write-off | Other changes | amount at the end | |
| Bad debt provision | 55,263.59 | 87,934.26 | 50,000.00 | 93,197.85 | ||
| Total | 55,263.59 | 87,934.26 | 50,000.00 | 93,197.85 |
(5)Other receivables actually written off in the current period
| Itam | Amount |
| Receivables actually written off | 50,000.00 |
During the period, the board of directors approved to write off the Beijing Branch of HainanJingliang Holding Co., Ltd., and to write off the uncollectible other receivables.
(6) Other receivables according to top five of balance at end of period collected by debtors
| Name of Organization | Nature of Funds | Balance at End of Period | Aging | Proportion in overall ending balance of other receivables (%) | Ending balance of bad debt reserves |
| Beijing Grain Stock Co., Ltd. | Related party borrowing | 180,000,000.00 | Within 3 months | 99.94 | |
| Yan Yan | Reserve fund | 46,000.00 | 2-3 years | 0.026 | 46,000.00 |
| Pai Feng | Reserve fund | 26,671.80 | 2-3 years | 0.015 | 26,671.80 |
| Zhongwei Cui | Reserve fund | 14,007.40 | 2-3 years | 0.007 | 14,007.40 |
| Xiaohong Liu | Reserve fund | 5,170.00 | 2-3 years | 0.003 | 5,170.00 |
| Total | —— | 180,091,849.20 | —— | 99.99 | 91,849.20 |
3. Long-term Equity Investment
| Item | Ending Balance | Beginning Balance | ||||
| Book Balance | Provision for Impairment | Book Value | Book Balance | Provision for Impairment | Book Value | |
| Investment in subsidiaries | 2,626,437,846.24 | 2,626,437,846.24 | 2,626,437,846.24 | 2,626,437,846.24 | ||
| Total | 2,626,437,846.24 | 2,626,437,846.24 | 2,626,437,846.24 | 2,626,437,846.24 | ||
(1)Investment in subsidiaries
| Invested Entity | Beginning Balance | Current Increase | Current Decrease | Ending Balance | Current Provision for Impairment | Ending Balance of Provision for Impairment |
| Beijing Jingliang Food Co., Ltd. | 2,336,639,964.05 | 2,336,639,964.05 | ||||
| Zhejiang little prince Food Co., Ltd | 249,017,319.14 | 249,017,319.14 | ||||
| Jingliang rural complex construction and operation (Xinyi) Co., Ltd | 15,280,563.05 | 15,280,563.05 | ||||
| Jingliang (Caofeidian) Agricultural Development Co., Ltd. | 25,500,000.00 | 25,500,000.00 | ||||
| Total | 2,626,437,846.24 | 2,626,437,846.24 |
4. Operating income and operating costs
1. Details of operating income and operating costs
| Item | Current Amount | Last Term Amount | ||
| Income | Cost | Income | Cost | |
| Core business | ||||
| Other businesses | 591,060.56 | 341,162.52 | 1,181,687.83 | |
| Total | 591,060.56 | 341,162.52 | 1,181,687.83 | |
5. Income from investment
| Sources of investment income | Current Amount | Last Term Amount |
| Long term equity investment income calculated by cost method | 461,597,751.35 | 205,893,687.32 |
| Others | 506,874.91 | |
| Total | 461,597,751.35 | 206,400,562.23 |
XVII. Supplementary Information
1. According to the requirements of the CSRC's "Explanatory Announcement onInformation Disclosure of Companies Publicly Issuing Securities No. 1 - Non-recurringGains and Losses", the non-recurring gains and losses during the reporting period shallbe reported
1. Details of non-recurring profit and loss in the reporting period
| Details of non-recurring profit and loss | Amouont | Note |
| (1) Gains and losses on disposal of non current assets | -208,369.12 | |
| (2) Government subsidies included in the current profits and losses (closely related to the business of the enterprise, except the government subsidies enjoyed according to the national unified standard quota or quantitative) | 5,397,695.52 | |
| (3) In addition to the effective hedging business related to the normal business of the company, the profit and loss from changes in fair value arising from holding trading financial assets, derivative financial assets, trading financial liabilities and derivative financial liabilities, as well as the investment income from the disposal of trading financial assets, derivative financial assets, trading financial liabilities, derivative financial liabilities and other debt investments | 6,221,323.63 | |
| (4) Other non-operating income and expenses other than the above | 1,564,510.91 | |
| (5) Other profit and loss items that meet the definition of non recurring profit and loss | ||
| Total non recurring profit and loss | 12,975,160.94 | |
| Less: amount affected by income tax | 3,214,422.14 | |
| Non recurring profit and loss after deducting the influence of income tax | 9,760,738.80 | |
| Including: non recurring profit and loss attributable to the owner of the parent company | 9,036,938.63 | |
| Non recurring profit and loss attributable to minority shareholders | 723,800.17 |
2. Return on equity and earnings per share
| Current Profit | Weighted Return on Average Equity (ROAE) (%) | EPS | |
| Basic EPS | Diluted EPS | ||
| Net profit attributable to the Company's common shareholders | 7.27 | 0.28 | 0.28 |
| Net profit attributable to common shareholders after deduction of non-recurring gains and losses | 6.95 | 0.27 | 0.27 |
Hainan Jingliang Holdings Co., Ltd.
31 March 2022