HAINAN JINGLIANGHOLDINGS CO., LTD.
SEMI-ANNUAL
FINANCIAL REPORT
2024
August, 2024
HAINAN JINGLIANG HOLDINGS CO., LTD.SEMI-ANNUAL FINANCIAL REPORT 2024
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 I Financial Report
Independent auditor’s modified opinion:
□ Applicable ? Not applicable
2024 Semi-Annual Financial Report is not audited by Independent auditor.
Part I I Financial Statement
The unit of financial statements in the financial notes is: Yuan
Editor: Hainan Jingliang Holdings Co., Ltd
| 1.Consolidated Balance Sheet | ||
| June 30,2024 | ||
| Prepared by: Hainan Jingliang Holdings Co., Ltd. | Monetary Unit: RMB Yuan | |
| Items | 30 June 2024 | 31 December 2023 |
| Current Assets: | ||
| Monetary capital | 1,181,398,242.40 | 1,543,385,751.86 |
| Transactional financial assets | ||
| Derivative financial assets | 31,223,815.72 | 31,684,620.00 |
| Notes receivable | ||
| Accounts receivable | 109,483,882.36 | 115,780,372.55 |
| Receivables financing | 2,442,328.82 | 2,502,308.90 |
| Prepayment | 267,344,829.04 | 87,352,234.48 |
| Other receivables | 386,904,030.80 | 303,099,589.59 |
| Including: Interest receivable | ||
| Dividends receivable | ||
| Inventory | 2,186,861,592.97 | 2,041,860,143.11 |
| Including: Data resources | ||
| Contract assets | ||
| Held-for-sale assets | ||
| Non-current assets due within one year | 22,188,083.34 | |
| Other current assets | 420,569,321.21 | 312,336,642.43 |
| Total current assets | 4,586,228,043.32 | 4,460,189,746.26 |
| Non-current assets: | ||
| Debt investment | ||
| Other debt investments | ||
| Long-term receivables | ||
| Long-term equity investment | 265,798,072.29 | 254,922,645.41 |
| Other equity instruments investment | 20,000,000.00 | 20,000,000.00 |
| Other non-current financial assets | ||
| Investment property | 19,051,808.01 | 20,045,503.77 |
| Fixed assets | 917,556,139.25 | 939,548,012.91 |
| Construction in process | 47,201,479.97 | 59,094,902.29 |
| Productive biological assets | ||
| Oil-and-gas assets | ||
| Right-of-use assets | 89,304,522.73 | 99,232,303.78 |
| Intangible assets | 404,165,474.64 | 412,676,845.93 |
| Including: Data resources | ||
| Development expenditure | ||
| Including: Data resources | ||
| Goodwill | 191,394,422.51 | 191,394,422.51 |
| Long-term deferred expenses | 17,397,533.45 | 17,655,736.82 |
| Deferred income tax assets | 5,452,387.35 | 8,798,915.22 |
| Other non-current assets | 13,709,866.66 | 13,223,950.00 |
| Total non-current assets | 1,991,031,706.86 | 2,036,593,238.64 |
| Total assets | 6,577,259,750.18 | 6,496,782,984.90 |
| Current liabilities: | ||
| Short-term borrowings | 1,036,717,261.11 | 1,163,479,691.67 |
| Transactional financial liabilities | ||
| Derivative financial liabilities | 15,805,393.88 | |
| Notes payable | ||
| Accounts payable | 70,607,024.80 | 82,474,823.84 |
| Account collected in advance | 1,800,138.12 | 1,075,801.34 |
| Contract liabilities | 619,028,078.42 | 411,033,219.08 |
| Employee payroll payable | 16,367,355.08 | 32,702,558.07 |
| Taxes payable | 11,264,377.79 | 11,577,392.47 |
| Other payables | 71,848,286.50 | 79,618,198.78 |
| Including: Interest payable | 20,000,000.00 | 21,082,795.47 |
| Dividends payable | 3,213,342.90 | 3,213,302.88 |
| Held-for-sale liabilities | ||
| Non-current liabilities due within one year | 119,091,031.53 | 175,940,949.28 |
| Other current liabilities | 58,741,540.34 | 60,439,400.68 |
| Total current liabilities | 2,005,465,093.69 | 2,034,147,429.09 |
| Non-current liabilities: | ||
| Long-term borrowings | 530,000,000.00 | 400,000,000.00 |
| Bonds payable | 299,025,000.00 | 298,800,000.00 |
| Including: Preferred stock | ||
| Perpetual capital bonds | ||
| Lease liabilities | 75,013,784.37 | 73,241,742.57 |
| Long-term payables | ||
| Long-term payable to employees | 5,677,134.00 | 5,677,134.00 |
| Estimated liabilities | ||
| Deferred income | 58,483,273.07 | 62,503,256.67 |
| Deferred income tax liabilities | 53,548,664.14 | 47,082,123.53 |
| Other non-current liabilities |
| Total non-current liabilities | 1,021,747,855.58 | 887,304,256.77 | |
| Total liabilities | 3,027,212,949.27 | 2,921,451,685.86 | |
| Owners' equity (or Shareholders' equity): | |||
| Paid-in capital | 726,950,251.00 | 726,950,251.00 | |
| Other equity instruments | |||
| Including: Preferred stock | |||
| Perpetual capital bonds | |||
| Capital reserves | 1,681,808,108.07 | 1,681,808,108.07 | |
| Less: treasury stock | |||
| Other comprehensive income | 1,512,111.69 | 1,369,980.92 | |
| Special reserves | |||
| Surplus reserves | 129,819,690.00 | 129,819,690.00 | |
| Undistributed profit | 600,000,561.70 | 627,555,511.45 | |
| Owner's Equity (or shareholder's equity) Attributable to Shareholders of the Parent Company | 3,140,090,722.46 | 3,167,503,541.44 | |
| Minority equity | 409,956,078.45 | 407,827,757.60 | |
| Total owners' equity (or shareholders' equity) | 3,550,046,800.91 | 3,575,331,299.04 | |
| Total liabilities and owners' equity (or shareholders' equity) | 6,577,259,750.18 | 6,496,782,984.90 | |
| Legal Representative:Chunli Wang Chief Financial Officer:Ying Guan Head of Accounting Department: Ling Cao | |||
| 2.Balance Sheet of Parent Company | |||
| Monetary Unit: RMB Yuan | |||
| Items | 30 June 2024 | 31 December 2023 | |
| Current Assets: | |||
| Monetary capital | 338,721,543.73 | 23,743,255.81 | |
| Transactional financial assets | |||
| Derivative financial assets | |||
| Notes receivable | |||
| Accounts receivable | |||
| Receivables financing | |||
| Prepayment | |||
| Other receivables | 910,000,000.00 | 950,000,000.00 | |
| Including: Interest receivable | |||
| Dividends receivable | |||
| Inventory | |||
| Including: Data resources | |||
| Contract assets | |||
| Held-for-sale assets | |||
| Non-current assets due within one year | ||
| Other current assets | 404,285.14 | 976,539.93 |
| Total current assets | 1,249,125,828.87 | 974,719,795.74 |
| Non-current assets: | ||
| Debt investment | ||
| Other debt investments | ||
| Long-term receivables | ||
| Long-term equity investment | 2,340,799,283.19 | 2,625,657,283.19 |
| Other equity instruments investment | 20,000,000.00 | 20,000,000.00 |
| Other non-current financial assets | ||
| Investment property | 5,027,932.91 | 5,198,514.17 |
| Fixed assets | 5,892,257.07 | 5,955,832.27 |
| Construction in process | ||
| Productive biological assets | ||
| Oil-and-gas assets | ||
| Right-of-use assets | ||
| Intangible assets | ||
| Including: Data resources | ||
| Development expenditure | ||
| Including: Data resources | ||
| Goodwill | ||
| Long-term deferred expenses | 444,366.61 | 495,639.67 |
| Deferred income tax assets | ||
| Other non-current assets | 3,168,200.00 | 2,833,950.00 |
| Total non-current assets | 2,375,332,039.78 | 2,660,141,219.30 |
| Total assets | 3,624,457,868.65 | 3,634,861,015.04 |
| Current liabilities: | ||
| Short-term borrowings | ||
| Transactional financial liabilities | ||
| Derivative financial liabilities | ||
| Notes payable | ||
| Accounts payable | 15,383.17 | 15,383.17 |
| Account collected in advance | 38,896.41 | 38,896.41 |
| Contract liabilities | ||
| Employee payroll payable | 170,825.08 | 157,166.68 |
| Taxes payable | 1,046,047.51 | 1,016,682.06 |
| Other payables | 31,176,883.86 | 32,458,140.29 | ||
| Including: Interest payable | 20,000,000.00 | 21,082,795.47 | ||
| Dividends payable | 3,213,342.90 | 3,213,302.88 | ||
| Held-for-sale liabilities | ||||
| Non-current liabilities due within one year | 7,200,000.00 | 2,880,000.00 | ||
| Other current liabilities | ||||
| Total current liabilities | 39,648,036.03 | 36,566,268.61 | ||
| Non-current liabilities: | ||||
| Long-term borrowings | ||||
| Bonds payable | 299,025,000.00 | 298,800,000.00 | ||
| Including: Preferred stock | ||||
| Perpetual capital bonds | ||||
| Lease liabilities | ||||
| Long-term payables | ||||
| Long-term payable to employees | ||||
| Estimated liabilities | ||||
| Deferred income | ||||
| Deferred income tax liabilities | ||||
| Other non-current liabilities | ||||
| Total non-current liabilities | 299,025,000.00 | 298,800,000.00 | ||
| Total liabilities | 338,673,036.03 | 335,366,268.61 | ||
| Owners' equity (or Shareholders' equity): | ||||
| Paid-in capital | 726,950,251.00 | 726,950,251.00 | ||
| Other equity instruments | ||||
| Including: Preferred stock | ||||
| Perpetual capital bonds | ||||
| Capital reserves | 2,386,084,900.84 | 2,386,084,900.84 | ||
| Less: treasury stock | ||||
| Other comprehensive income | ||||
| Special reserves | ||||
| Surplus reserves | 117,184,317.41 | 117,184,317.41 | ||
| Undistributed profit | 55,565,363.37 | 69,275,277.18 | ||
| Total owners' equity (or shareholders' equity) | 3,285,784,832.62 | 3,299,494,746.43 | ||
| Total liabilities and owners' equity (or shareholders' equity) | 3,624,457,868.65 | 3,634,861,015.04 | ||
| 3.Consolidated Income Statement | ||||
| Monetary Unit: RMB Yuan | ||||
| Items | Amount for the current period | Amount for the prior period | ||
| I. Total operating income | 5,555,906,994.14 | 4,823,234,208.18 | ||
| Including: Operating income | 5,555,906,994.14 | 4,823,234,208.18 |
| II. Total operating cost | 5,531,711,172.68 | 4,841,383,397.31 |
| Including: Operating cost | 5,332,015,618.17 | 4,630,970,469.14 |
| Tax and surcharges | 12,216,026.66 | 11,548,673.88 |
| Selling expenses | 71,736,656.94 | 78,437,823.61 |
| Administration expenses | 85,740,915.84 | 92,898,582.21 |
| Research and development expenses | 10,402,383.93 | 10,262,799.97 |
| Financial expenses | 19,599,571.14 | 17,265,048.50 |
| Including: Interest expenses | 28,948,644.46 | 25,265,021.07 |
| Interest income | 8,925,122.62 | 5,832,452.30 |
| Add: Other income | 9,870,484.92 | 6,324,214.58 |
| Income from investment (Losses shall be filled in with “-”) | 10,875,426.88 | 7,179,282.99 |
| Including: income from investment on joint venture and cooperative enterprise | 10,875,426.88 | 7,012,296.86 |
| income from derecognition of financial assets measured at amortized cost | ||
| Income from net exposure hedging(Losses shall be filled in with “-”) | ||
| Income from changes in fair value (Losses shall be filled in with “-”) | -9,906,096.90 | 143,869,459.30 |
| Credit impairment loss(Losses shall be filled in with “-”) | 1,779.74 | -115,984.57 |
| Income from assets impairment(Losses shall be filled in with “-”) | 130,887.98 | -25,186,589.63 |
| Income from asset disposal (Losses shall be filled in with “-”) | 23,411.62 | -2,209.46 |
| III. Operating profit (Losses shall be filled in with “-”) | 35,191,715.70 | 113,918,984.08 |
| Add: non-operating income | 10,604,405.63 | 3,903,501.36 |
| Less: non-operating expenditure | 4,779,998.99 | 527,980.44 |
| IV. Total profit (Total losses shall be filled in with “-”) | 41,016,122.34 | 117,294,505.00 |
| Less: income tax expense | 14,829,283.42 | 32,518,022.92 |
| V. Net profit (Net loss shall be filled in with “-”) | 26,186,838.92 | 84,776,482.08 |
| (I) Classified by operations continuity | ||
| 1. Net profit from continuing operations (Net loss shall be filled in with “-”) | 26,186,838.92 | 84,776,482.08 |
| 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 in with “-”) | 24,058,518.07 | 73,581,795.36 |
| 2.Minority interest income (Net loss shall be filled in with “-”) | 2,128,320.85 | 11,194,686.72 |
| VI. Net of tax from other comprehensive income | 142,130.77 | 730,651.63 |
| （一）Net of tax from other comprehensive income attributable to shareholders of the parent company | 142,130.77 | 730,651.63 |
| 1.Other comprehensive income that cannot be reclassified into the profit and loss | ||
| （1）Remeasure changes in defined benefit plans |
| （2）Other comprehensive income that cannot be transferred to gains and losses under the equity method | ||||
| （3）Changes in fair value of other equity instrument investments | ||||
| （4）Changes in the fair value of the company's own credit risk | ||||
| （5）Others | ||||
| 2.Other comprehensive income that will be reclassified into the profit and loss | 142,130.77 | 730,651.63 | ||
| （1）Other comprehensive income that can be transferred to gains and losses under the equity method | ||||
| （2）Changes in fair value of other debt investments | ||||
| （3）Reclassification of financial assets included in other comprehensive income | ||||
| （4）Provision for credit impairment of other debt investments | ||||
| （5）Cash flow hedge reserve | ||||
| （6）Balance arising from the translation of foreign currency | 142,130.77 | 730,651.63 | ||
| （7）Others | ||||
| （二） Net of tax from other comprehensive income attributable to minority shareholder | ||||
| VII. Total comprehensive income | 26,328,969.69 | 85,507,133.71 | ||
| (I) Total comprehensive income attributable to shareholders of the parent company | 24,200,648.84 | 74,312,446.99 | ||
| (II)Total comprehensive income attributable to minority shareholder | 2,128,320.85 | 11,194,686.72 | ||
| VIII. Earnings per share: | ||||
| (I) Basic earnings per share | 0.03 | 0.10 | ||
| (II) Diluted earnings per share | 0.03 | 0.10 | ||
| 4.Income Statement of Parent Company | ||||
| Monetary Unit: RMB Yuan | ||||
| Items | Amount for the current period | Amount for the prior period | ||
| I. Total operating income | 2,047,313.31 | 11,839,311.03 | ||
| Less：Operating cost | 170,581.26 | 170,581.26 | ||
| Tax and surcharges | 204,491.36 | 174,413.63 | ||
| Selling expenses | ||||
| Administration expenses | 3,150,269.36 | 3,410,680.07 | ||
| Research and development expenses | ||||
| Financial expenses | -9,722,064.50 | -5,278,290.51 | ||
| Including: Interest expenses | 4,545,000.00 | |||
| Interest income | 14,379,702.55 | 5,280,177.21 | ||
| Add: Other income | 619,000.43 | 2,308.28 | ||
| Income from investment (Losses shall be filled in with “-”) | 28,021,459.50 | 150,814.85 |
| Including: income from investment on joint venture and cooperative enterprise | ||
| Income from derecognition of financial assets measured at amortized cost | ||
| 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 “-”) | ||
| Income from assets impairment(Losses shall be filled in with “-”) | ||
| Income from asset disposal (Losses shall be filled in with “-”) | ||
| III. Operating profit (Losses shall be filled in with “-”) | 36,884,495.76 | 13,515,049.71 |
| Add: non-operating income | 1,082,795.47 | |
| Less: non-operating expenditure | 63,737.22 | 5,027.46 |
| IV. Total profit (Total losses shall be filled in with “-”) | 37,903,554.01 | 13,510,022.25 |
| Less: income tax expense | ||
| V. Net profit (Net loss shall be filled in with “-”) | 37,903,554.01 | 13,510,022.25 |
| 1. Net profit from continuing operations (Net loss shall be filled in with “-”) | 37,903,554.01 | 13,510,022.25 |
| 2. Net profit from discontinuing operations (Net loss shall be filled in with “-”) | ||
| V. Net of tax from other comprehensive income | ||
| 1.Other comprehensive income that cannot be reclassified into the profit and loss | ||
| （1）Remeasure changes in defined benefit plans | ||
| （2）Other comprehensive income that cannot be transferred to gains and losses under the equity method | ||
| （3）Changes in fair value of other equity instrument investments | ||
| （4）Changes in the fair value of the company's own credit risk | ||
| （5）Others | ||
| 2 .Other comprehensive income that will be reclassified into the profit and loss | ||
| （1）Other comprehensive income that can be transferred to gains and losses under the equity method | ||
| （2）Changes in fair value of other debt investments | ||
| （3）Reclassification of financial assets included in other comprehensive income | ||
| （4）Provision for credit impairment of other debt investments | ||
| （5）Cash flow hedge reserve | ||
| （6）Balance arising from the translation of foreign currency |
| （7）Others | ||
| VII. Total comprehensive income | 37,903,554.01 | 13,510,022.25 |
| VIII. Earnings per share: | ||
| (I) Basic earnings per share | ||
| (II) Diluted earnings per share |
| 5.Consolidated Cash Flow Statement | ||
| Monetary Unit: RMB Yuan | ||
| Items | Amount for the current period | Amount for the prior period |
| I. Cash Flows from Operating Activities: | ||
| Cash Receipts from Sales of Goods or Rendering of Services | 6,226,529,356.93 | 5,564,355,172.38 |
| Tax Refund Receipts | 3,062,799.77 | 3,808,897.99 |
| Other Cash Receipts Concerning Operating Activities | 1,514,916,662.94 | 1,023,812,040.53 |
| Subtotal of Cash Inflows from Operating Activities | 7,744,508,819.64 | 6,591,976,110.90 |
| Cash Paid for Purchase of Goods and Accepting Services | 6,051,673,881.18 | 5,631,656,925.26 |
| Cash Paid to and for Employees | 164,888,216.07 | 172,318,440.15 |
| Taxes and Fees Paid | 58,944,562.42 | 125,238,280.62 |
| Other Cash Paid Concerning Operating Activities | 1,690,067,582.06 | 800,112,010.66 |
| Subtotal of Cash Outflows from Operating Activities | 7,965,574,241.73 | 6,729,325,656.69 |
| Net Cash Flows from Operating Activities | -221,065,422.09 | -137,349,545.79 |
| II. Cash Flows from Investment Activities: | ||
| Cash Receipts from Disinvestment | 586,103,235.55 | |
| Cash Receipts from Returns on Investments | ||
| Net Cash from Disposal of Fixed Assets, Intangible Assets and Other Long-term Assets | 90,476.60 | 31,605.00 |
| Net Cash Received by Disposal of Subsidiaries and Other Business Units | ||
| Other Cash Receipts Concerning Investment Activities | ||
| Subtotal of Cash Inflows from Investment Activities | 90,476.60 | 586,134,840.55 |
| Cash Paid for Purchase and Construction of Fixed Assets, Intangible Assets and Other Long-term Assets | 19,760,482.96 | 43,140,379.93 |
| Cash Paid for Investments | 145,000,000.00 | |
| Net Cash Paid for obtaining Subsidiaries and Other Business Units | ||
| Other Cash Paid Concerning Investment Activities | 1,747,611.95 | |
| Subtotal of Cash Outflows from Investment Activities | 21,508,094.91 | 188,140,379.93 |
| Net Cash Flows from Investment Activities | -21,417,618.31 | 397,994,460.62 |
| 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 | 1,037,734,559.68 | 1,818,217,067.44 |
| Other Cash Receipts Concerning Financing Activities | ||
| Subtotal of Cash Inflows from Financing Activities | 1,037,734,559.68 | 1,818,217,067.44 |
| Cash Paid for Repayment of Debts | 1,087,734,559.68 | 1,331,768,577.44 |
| Cash Paid for Distribution of Dividends, Profits or Repayment of Interests | 70,758,033.33 | 47,016,149.43 |
| Including: Dividends and Profits Paid by Subsidiaries to Minority Shareholders | ||
| Other Cash Paid Concerning Financing Activities | 13,486,733.94 | 574,077.78 |
| Subtotal of Cash Outflows from Financing Activities | 1,171,979,326.95 | 1,379,358,804.65 |
| Net Cash Flows from Financing Activities | -134,244,767.27 | 438,858,262.79 |
| IV. Exchange Rate Fluctuation Consequences on Cash and Cash Equivalents | 6,088,920.99 | 724,617.12 |
| V. Net Increase in Cash and Cash Equivalents | -370,638,886.68 | 700,227,794.74 |
| Add: Opening Balance of Cash and Cash Equivalents | 1,540,639,079.95 | 551,439,110.07 |
| VI. Closing Balance of Cash and Cash Equivalents | 1,170,000,193.27 | 1,251,666,904.81 |
| 6.Cash Flow Statement of Parent Company | ||
| Monetary Unit: RMB Yuan | ||
| Items | Amount for the current period | Amount for the prior period |
| I. Cash Flows from Operating Activities: | ||
| Cash Receipts from Sales of Goods or Rendering of Services | 1,745,187.40 | 12,124,704.99 |
| Tax Refund Receipts | ||
| Other Cash Receipts Concerning Operating Activities | 1,683,080.27 | 5,610,597.06 |
| Subtotal of Cash Inflows from Operating Activities | 3,428,267.67 | 17,735,302.05 |
| Cash Paid for Purchase of Goods and Accepting Services | 635.30 | |
| Cash Paid to and for Employees | 972,050.75 | 1,499,566.85 |
| Taxes and Fees Paid | 448,876.77 | 324,239.47 |
| Other Cash Paid Concerning Operating Activities | 2,218,764.01 | 164,251,396.82 |
| Subtotal of Cash Outflows from Operating Activities | 3,640,326.83 | 166,075,203.14 |
| Net Cash Flows from Operating Activities | -212,059.16 | -148,339,901.09 |
| II. Cash Flows from Investment Activities: | ||
| Cash Receipts from Disinvestment | 324,858,000.00 | |
| Cash Receipts from Returns on Investments | 42,606,181.72 | 150,150,814.85 |
| Net Cash from Disposal of Fixed Assets, Intangible Assets and Other Long-term Assets | 3,444.00 | 800.00 |
| Net Cash Received by Disposal of Subsidiaries and Other Business Units | ||
| Other Cash Receipts Concerning Investment Activities | ||
| Subtotal of Cash Inflows from Investment Activities | 367,467,625.72 | 150,151,614.85 |
| Cash Paid for Purchase and Construction of Fixed Assets, Intangible Assets and Other Long-term Assets | 663,805.84 | 459,058.44 |
| Cash Paid for Investments | ||
| Net Cash Paid for obtaining Subsidiaries and Other Business Units | ||
| Other Cash Paid Concerning Investment Activities | |||||||||||||||
| Subtotal of Cash Outflows from Investment Activities | 663,805.84 | 459,058.44 | |||||||||||||
| Net Cash Flows from Investment Activities | 366,803,819.88 | 149,692,556.41 | |||||||||||||
| III. Cash Flows from Financing Activities: | |||||||||||||||
| Cash Receipts from Accepting Investment | |||||||||||||||
| Cash Receipts from Borrowings | |||||||||||||||
| Other Cash Receipts Concerning Financing Activities | |||||||||||||||
| Subtotal of Cash Inflows from Financing Activities | |||||||||||||||
| Cash Paid for Repayment of Debts | |||||||||||||||
| Cash Paid for Distribution of Dividends, Profits or Repayment of Interests | 51,613,472.80 | ||||||||||||||
| Other Cash Paid Concerning Financing Activities | |||||||||||||||
| Subtotal of Cash Outflows from Financing Activities | 51,613,472.80 | ||||||||||||||
| Net Cash Flows from Financing Activities | -51,613,472.80 | ||||||||||||||
| IV. Exchange Rate Fluctuation Consequences on Cash and Cash Equivalents | |||||||||||||||
| V. Net Increase in Cash and Cash Equivalents | 314,978,287.92 | 1,352,655.32 | |||||||||||||
| Add: Opening Balance of Cash and Cash Equivalents | 23,743,255.81 | 15,852,894.21 | |||||||||||||
| VI. Closing Balance of Cash and Cash Equivalents | 338,721,543.73 | 17,205,549.53 | |||||||||||||
| 7.Consolidated Statement of Changes in Equity | |||||||||||||||
| Monetary Unit: RMB Yuan | |||||||||||||||
| Items | Current Amount | ||||||||||||||
| Shareholder's Equity attributable to the Parent Company | Minority equity | Total shareholders' equities | |||||||||||||
| Paid-in capital | Other equity instruments | Capital reserve | Less: treasury stock | Other comprehensive income | Special reserve | Surplus reserve | Undistributed profit | Subtotal | |||||||
| Preferred stock | Perpetual bond | Others | |||||||||||||
| I. Year-end balance of last year | 726,950,251.00 | 1,681,808,108.07 | 1,369,980.92 | 129,819,690.00 | 627,555,511.45 | 3,167,503,541.44 | 407,827,757.60 | 3,575,331,299.04 | |||||||
| Add: changes in accounting policies | |||||||||||||||
| Correction of prior period errors | |||||||||||||||
| Merger of enterprises under the same control | |||||||||||||||
| Other | |||||||||||||||
| II. Balance at beginning of current year | 726,950,251.00 | 1,681,808,108.07 | 1,369,980.92 | 129,819,690.00 | 627,555,511.45 | 3,167,503,541.44 | 407,827,757.60 | 3,575,331,299.04 | |||||||
| III. Increases and decreases of current period (Decrease shall be filled in with “-”) | 142,130.77 | -27,554,949.75 | -27,412,818.98 | 2,128,320.85 | -25,284,498.13 | ||||||||
| (I) Total comprehensive income | 142,130.77 | 24,058,518.07 | 24,200,648.84 | 2,128,320.85 | 26,328,969.69 | ||||||||
| (II) Investment of shareholders and capital reduction | |||||||||||||
| 1. Common equity invested by shareholders | |||||||||||||
| 2. Capital invested by other equity instruments holders | |||||||||||||
| 3. The amount of shares recorded into the shareholder's equity | |||||||||||||
| 4. Others | |||||||||||||
| (III) Distribution of profits | -51,613,467.82 | -51,613,467.82 | -51,613,467.82 | ||||||||||
| 1. Withdrawal of surplus reserves | |||||||||||||
| 2. Distribution to shareholders | -51,613,467.82 | -51,613,467.82 | -51,613,467.82 | ||||||||||
| 3. Others | |||||||||||||
| (IV) Inner carrying-over of shareholders' equities | |||||||||||||
| 1. Capital reserve converted into capital (or capital stock) | |||||||||||||
| 2. Surplus public accumulation converted into capital (or capital stock) | |||||||||||||
| 3. Surplus public accumulation loss remedy | |||||||||||||
| 4. Change in defined benefit plan carried forward to retained earnings |
| 5.Other comprehensive income carried forward to retained earnings | |||||||||||||
| 6. Others | |||||||||||||
| (V) Special reserve | |||||||||||||
| 1. Withdrawal for current period | |||||||||||||
| 2. Use for current period | |||||||||||||
| (VI) Others | |||||||||||||
| IV. Closing balance of current period | 726,950,251.00 | 1,681,808,108.07 | 1,512,111.69 | 129,819,690.00 | 600,000,561.70 | 3,140,090,722.46 | 409,956,078.45 | 3,550,046,800.91 |
Amount of Last Period
| Items | Amount of Last Period | ||||||||||||
| Shareholder's Equity attributable to the Parent Company | Minority equity | Total shareholders' equities | |||||||||||
| Paid-in capital | Other equity instruments | Capital reserve | Less: treasury stock | Other comprehensive income | Special reserve | Surplus reserve | Undistributed profit | Subtotal | |||||
| Preferred stock | Perpetual bond | Others | |||||||||||
| I. Year-end balance of last year | 726,950,251.00 | 1,678,678,350.95 | 1,005,720.50 | 122,122,436.98 | 532,904,675.62 | 3,061,661,435.05 | 401,048,412.23 | 3,462,709,847.28 | |||||
| Add: changes in accounting policies | |||||||||||||
| Correction of prior period errors | |||||||||||||
| Merger of enterprises under the same control | |||||||||||||
| Other | |||||||||||||
| II. Balance at beginning of current year | 726,950,251.00 | 1,678,678,350.95 | 1,005,720.50 | 122,122,436.98 | 532,904,675.62 | 3,061,661,435.05 | 401,048,412.23 | 3,462,709,847.28 | |||||
| III. Increases and decreases of current period (Decrease shall be filled in with “-”) | 730,651.63 | 73,581,795.36 | 74,312,446.99 | 11,194,686.72 | 85,507,133.71 | ||||||||
| (I) Total comprehensive income | 730,651.63 | 73,581,795.36 | 74,312,446.99 | 11,194,686.72 | 85,507,133.71 | ||||||||
| (II) Investment of shareholders and capital reduction | |||||||||||||
| 1. Common equity invested by shareholders | |||||||||||||
| 2. Capital invested by other equity instruments holders | |||||||||||||
| 3. The amount of shares recorded into the shareholder's equity | |||||||||||||
| 4. Others | |||||||||||||
| (III) Distribution of profits | |||||||||||||
| 1. Withdrawal of surplus reserves | |||||||||||||
| 2. Distribution to shareholders | |||||||||||||
| 3. Others | |||||||||||||
| (IV) Inner carrying-over of shareholders' equities | |||||||||||||
| 1. Capital reserve converted into capital (or capital stock) | |||||||||||||
| 2. Surplus public accumulation converted into capital (or capital stock) | |||||||||||||
| 3. Surplus public accumulation loss remedy | |||||||||||||
| 4. Change in defined benefit plan carried forward to retained earnings | |||||||||||||
| 5.Other comprehensive income carried forward to retained earnings | |||||||||||||
| 6. Others | |||||||||||||
| (V) Special reserve | |||||||||||||
| 1. Withdrawal for current period | |||||||||||||
| 2. Use for current period | |||||||||||||
| (VI) Others | |||||||||||||
| IV. Closing balance of current period | 726,950,251.00 | 1,678,678,350.95 | 1,736,372.13 | 122,122,436.98 | 606,486,470.98 | 3,135,973,882.04 | 412,243,098.95 | 3,548,216,980.99 |
| 8.Statement of Changes in Equity of Parent Company | ||||||||||||
| Monetary Unit: RMB Yuan | ||||||||||||
| Items | Current Amount | |||||||||||
| Paid-in capital | Other equity instruments | Capital reserve | Less: treasury stock | Other comprehensive income | Special reserve | Surplus reserve | Undistributed profit | Subtotal | ||||
| Preferred stock | Perpetual bond | Others | ||||||||||
| I. Year-end balance of last year | 726,950,251.00 | 2,386,084,900.84 | 117,184,317.41 | 69,275,277.18 | 3,299,494,746.43 | |||||||
| Add: changes in accounting policies | ||||||||||||
| Correction of prior period errors | ||||||||||||
| Other | ||||||||||||
| II. Balance at beginning of current year | 726,950,251.00 | 2,386,084,900.84 | 117,184,317.41 | 69,275,277.18 | 3,299,494,746.43 | |||||||
| III. Increases and decreases of current period (Decrease shall be filled in with “-”) | -13,709,913.81 | -13,709,913.81 | ||||||||||
| (I) Total comprehensive income | 37,903,554.01 | 37,903,554.01 | ||||||||||
| (II) Investment of shareholders and capital reduction | ||||||||||||
| 1. Common equity invested by shareholders | ||||||||||||
| 2. Capital invested by other equity instruments holders | ||||||||||||
| 3. The amount of shares recorded into the shareholder's equity | ||||||||||||
| 4. Others | ||||||||||||
| (III) Distribution of profits | -51,613,467.82 | -51,613,467.82 | ||||||||||
| 1. Withdrawal of surplus reserves | ||||||||||||
| 2. Distribution to shareholders | -51,613,467.82 | -51,613,467.82 | ||||||||||
| 3. Others | ||||||||||||
| (IV) Inner carrying-over of shareholders' equities | ||||||||||||
| 1. Capital reserve converted into capital (or capital stock) | ||||||||||||
| 2. Surplus public accumulation converted into capital (or capital stock) | ||||||||||||
| 3. Surplus public accumulation loss remedy | |||||||||||
| 4. Change in defined benefit plan carried forward to retained earnings | |||||||||||
| 5.Other comprehensive income carried forward to retained earnings | |||||||||||
| 6. Others | |||||||||||
| (V) Special reserve | |||||||||||
| 1. Withdrawal for current period | |||||||||||
| 2. Use for current period | |||||||||||
| (VI) Others | |||||||||||
| IV. Closing balance of current period | 726,950,251.00 | 2,386,084,900.84 | 117,184,317.41 | 55,565,363.37 | 3,285,784,832.62 |
Amount of Last Period
| Items | Amount of Last Period | ||||||||||
| Paid-in capital | Other equity instruments | Capital reserve | Less: treasury stock | Other comprehensive income | Special reserve | Surplus reserve | Undistributed profit | Subtotal | |||
| Preferred stock | Perpetual bond | Others | |||||||||
| I. Year-end balance of last year | 726,950,251.00 | 2,382,994,900.84 | 109,487,064.39 | -239,475,977.89 | 2,979,956,238.34 | ||||||
| Add: changes in accounting policies | |||||||||||
| Correction of prior period errors | |||||||||||
| Other | |||||||||||
| II. Balance at beginning of current year | 726,950,251.00 | 2,382,994,900.84 | 109,487,064.39 | -239,475,977.89 | 2,979,956,238.34 | ||||||
| III. Increases and decreases of current period (Decrease shall be filled in with “-”) | 13,510,022.25 | 13,510,022.25 | |||||||||
| (I) Total comprehensive income | 13,510,022.25 | 13,510,022.25 | |||||||||
| (II) Investment of shareholders and capital reduction | |||||||||||
| 1. Common equity invested by shareholders | |||||||||||
| 2. Capital invested by other equity instruments holders | |||||||||||
| 3. The amount of shares recorded into the shareholder's equity | |||||||||||
| 4. Others | |||||||||||
| (III) Distribution of profits | |||||||||||
| 1. Withdrawal of surplus reserves | |||||||||||
| 2. Distribution to shareholders | |||||||||||
| 3. Others | |||||||||||
| (IV) Inner carrying-over of shareholders' equities | |||||||||||
| 1. Capital reserve converted into capital (or capital stock) | |||||||||||
| 2. Surplus public accumulation converted into capital (or capital stock) | |||||||||||
| 3. Surplus public accumulation loss remedy | |||||||||||
| 4. Change in defined benefit plan carried forward to retained earnings | |||||||||||
| 5.Other comprehensive income carried forward to retained earnings | |||||||||||
| 6. Others | |||||||||||
| (V) Special reserve | |||||||||||
| 1. Withdrawal for current period | |||||||||||
| 2. Use for current period | |||||||||||
| (VI) Others | |||||||||||
| IV. Closing balance of current period | 726,950,251.00 | 2,382,994,900.84 | 109,487,064.39 | -225,965,955.64 | 2,993,466,260.59 |
Hainan Jingliang Holdings Co., Ltd.Notes to the Semi-Annual of 2024 Financial Statements(Unless otherwise stated, the amount unit is RMB Yuan)
I.Basic Information of the Company
1. Place of incorporation, form of organization and head office address
Hainan Jingliang Holdings Co., Ltd. (hereinafter referred to as "the Company" or "Company" or "JingliangHoldings") is established in accordance with the Hainan Provincial People's Government General Office QFBH(1992) No.1, approved by QY (1992) SGZ No. 6 Document of the People's Bank of Hainan Province and re-registered by Hainan Pearl River Enterprise Company on January 11, 1992. The Company issued 81,880,000 sharesin total upon re-registration, of which 60,793,600 shares were converted from the net assets of the original companyand 21,086,400 shares were newly issued. And the name of the Company is Hainan Pearl River Enterprise Co., Ltd.The business license registration number of the joint-stock company is 20128455-6, and the holding parent companyGuangzhou Pearl River Enterprise Group holds 36,393,600 shares, accounting for 44.45%. Approved by ZGB (1992)No. 83 Document of the People's Bank of China in December 1992, the additional 21,086,400 shares were listed onthe Shenzhen Stock Exchange for trading. The industry involved is real estate.On March 25, 1993, in response to QGBH (1993) No.028 of Hainan Provincial Leading Group Office andSRYFZ (1993) No.099 of Shenzhen Special Economic Zone Branch of the People's Bank of China, the Companyincreased its share capital by converting the original share capital into 139,196,000 shares (according to distributionof 10, delivery of 5 and transfer of 2), with the controlling shareholder Guangzhou Pearl River Enterprises Groupholding 48,969,120 shares accounting for 35.18% at the end of 1993.In 1994, the share capital was increased by 10 to 10, and the total share capital was 278,392,000 shares afterthe increase. The controlling shareholder, Guangzhou Pearl River Enterprises Group, holds 97,938,240 shares,accounting for 35.18%.In 1995, the issuance of 50,000,000 B Shares was approved by SZBF (1995) No.45 and SZBF (1995) No.12.The share capital of the Company was increased by 10:1.5 on the basis of the share capital after the additional Bshares were issued, and the share capital of the Company after the increase was 377,650,800 shares. The holdingparent company, Guangzhou Pearl River Enterprises Group, held 112,628,976 shares, accounting for 29.82% of thetotal.
In 1999, Guangzhou Pearl River Enterprises Group transferred all 112,628,976 shares to Beijing Wanfa RealEstate Development Co., Ltd. After the transfer of shares was completed in June 1999, Beijing Wanfa Real EstateDevelopment Co., Ltd. held 112,628,976 shares of the Company, accounting for 29.82% of the total shares of theCompany, and became the controlling shareholder of the Company.
On January 10, 2000, the name of the Company was changed to Hainan Pearl River Holding Co., Ltd. and theBusiness License for Enterprise Legal Person was renewed by Industrial & Commerce Administration Bureau of
Hainan Province.On August 17, 2006, the reform plan of the split share structure of the Company was implemented. TheCompany transferred 49,094,604 shares of capital stock to all shareholders at the ratio of 10 to 1.3. The originalnon-tradable shareholders transferred the increased shares to the tradable A-share holders. Beijing Wanfa Real EstateDevelopment Co., Ltd. reimbursed the consideration shares of the non-tradable shareholders who have not expresslyexpressed their opinions. The converted total share capital was 426,745,404 shares, and the original controllingshareholder Beijing Wanfa Real Estate Development Co., Ltd. held 107,993,698 shares, accounting for 25.31%.Shareholders of non-tradable shares repaid 3,289,780 shares in consideration of the split share structure in 2007.Shareholders of non-tradable shares repaid 1,196,000 shares in consideration of the split share structure in 2009.On 2 September 2016, Beijing Wanfa Real Estate Development Co., Ltd., the original controlling shareholder,transferred all of its 112,479,478 shares to Beijing Grain Group Co., Ltd. (hereinafter referred to as "Beijing GrainGroup"). Upon completion of the share transfer in September 2016, Beijing Grain Group Co., Ltd. held 112,479,478shares, accounting for 26.36% of the total shares of the Company. In November 2016, based on the confidence inthe subject matter of the material asset restructuring and the future development of the Company, Beijing GrainGroup Co., Ltd. decided to increase its shareholding through centralized bidding in the secondary market. After theincrease, it held 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 with the materialassets restructuring plan and the delivery agreement. On September 14, 2017, approved pursuant to the resolutionof the Second Extraordinary General Meeting of Shareholders of the Company on November 18, 2016 and theApproval Reply of the China Securities Regulatory Commission dated July 28, 2017 On Approval of Hainan PearlRiver Holding Co., Ltd. to Purchase Assets and Raise Supporting Funds from Beijing Grain Group Co., Ltd. (ZJXK(2017) No.1391): 1) The Company purchased assets from the original shareholders of Beijing Grain Food Co., Ltd.(hereinafter referred to as Beijing Grain Food) by issuing 210,079,552 shares of the balance between the transactionprice of the injected assets and the assets to be purchased (the difference between the transaction price of the injectedassets and the assets to be purchased was RMB 1,699.5436 million yuan). The par value in the issuance was RMB
1.00 per share and the issuance price was RMB 8.09 per share; 2) The Company has issued 48,965,408 non-publicshares of the Company to Beijing Grain Group for the purpose of purchasing the supporting funds raised from theassets of the issuance of shares. The par value per share of the Company was RMB1.00 and the issuance price wasRMB8.82 per 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 was RMB685,790,364.00. Beijing Grain Group, which accounted for 42.06% of the total number of shares, became the largestshareholder of the Company.On November 21, 2019, with the approval of Beijing Shounong Food Group Co., Ltd. (Beijing Shounong Foodpublish [2019] No. 212), Approval on the Plan of Purchasing Assets by Cash and Issuing Shares of Hainan JingliangHoldings Co., Ltd, On April , 2020, with the approval of Approval of Hainan Jingliang Holding Co., Ltd. IssuanceShares to Wang Yuecheng to Purchase Assets by China Securities Regulatory Commission [2020] No. 610, the
company shall not issue more than 41,159,887 new shares in private offering to raise funds supporting the purchaseof assets through the issued shares. The Company and its subsidiary, Beijing Jingliang Food Co., Ltd., purchasedthe 25.1149% equity stake of Zhejiang Little Prince by cash and issuance of shares.As of June 30, 2024, the company has issued 726,950,251.00 shares, and the company's share capital is726,950,251.00 yuan; Uniform Social Credit Code: 914600002012845568; Registration authority: Hainan MarketSupervision Administration; Company type: Limited Company (Listed, State-controlled); Registered address: F29,Dihao Building, Pearl River Square, Binhai Avenue, Haikou City; Legal representative: WangChunli.
2.The nature of the Company's business and its main business activities
The Company belongs to manufacturing-agricultural and sideline food processing industry. Its main businessactivities mainly includes: food, beverages, oilseeds and by products, vegetable proteins and their products, organicfertilizers, microbial fertilizers, production and marketing of agricultural fertilizers; land consolidation, soilremediation; agricultural comprehensive planting development, animal husbandry and aquaculture, agriculturalequipment production and marketing; computer network technology, investment in communication projects,research and development and application of high-tech products; investment and consultation of environmentalprotection projects; animation, graphic design; import and export trade in goods and technology; rental of ownpremises.The Company and its subsidiaries are principally engaged in the processing, production and sales of oil andoilseeds, and processing and sales of foodstuffs.
3.The name of the parent company and the ultimate parent company.
The parent company of the company is Beijing Grain Group Co., Ltd., and the ultimate parent company isBeijing Capital Agribusiness Food Group Co., Ltd.
4.Business Cycle
From 22 March 1988 to 20 September 2025.
5. The approval institution and the approval date of the financial statements.
The financial statements have been approved by the Board of Directors of the Company in its resolution datedAugust 26th, 2024.
II.Preparation Basis for Financial Statements
1. Preparation Basis
Based on the assumption of going concern and according to actual transaction events, the financial statementsare prepared in accordance with the relevant provisions of Accounting Standard for Business Enterprises and thefollowing stated Significant Accounting Policies and Estimates.
2. Going concern
The Company has a going concern capability for 12 months from the end of the reporting period and no material
matters affecting the company's going concern capability were found. Therefore, the financial statements arepresented on a going concern basis is reasonable.III.Significant Accounting Policies and EstimatesThe Company and its subsidiaries are engaged in the processing, production and sales of oil and oilseeds, andprocessing and sales of foodstuffs. According to the characteristics of actual production and operation and theprovisions of relevant accounting standards for business enterprises, the Company and its subsidiaries haveformulated a number of specific accounting policies and accounting estimates for transactions and events such asrevenue recognition. For details, please refer to the descriptions in Note Ⅲ, 27 “Revenue".
1. Statement of Compliance of Accounting Standards for Business Enterprises
The financial statements prepared by the Company based on the above preparation basis conform to therequirements of the Accounting Standards for Business Enterprises and their application guidelines, explanationsand other relevant provisions (collectively referred to as "ASBE") and truly and completely reflect the Company'sfinancial status, operating results, cash flow and other relevant information.In addition, this financial report has been prepared with reference to the presentation and disclosurerequirements of the “Rules Governing the Preparation of Disclosure of Information by Companies Offering PublicSecurities No. 15 - General Provisions on Financial Reporting” (Revised 2023) issued by the Securities and FuturesCommission.
2. Accounting Period
The accounting period of the Company is divided into an annual period and an interim period. The accountinginterim period refers to the reporting period shorter than a full accounting year. The fiscal year of the Companyadopts the Gregorian calendar year, that is, from January 1 to December 31 of each year.
3. Business Cycle
The normal business cycle is the period from the time the Company purchases assets for processing to the timewhen cash or cash equivalents are realized. The Company uses 12 months as a business cycle and uses it as aliquidity classification standard for assets and liabilities.
4. Bookkeeping Standard Currency
RMB is the currency in the main economic environment in which the Company and its domestic subsidiariesoperate. The Company and its domestic subsidiaries use RMB as the bookkeeping standard currency. The offshoresubsidiaries of the Company determine USD as their bookkeeping standard currency based on the currencies in themain economic environment in which they operate. The currency used by the Company in preparing these financialstatements is RMB.
5. Materiality Standards Determination Method and Selection Basis
The company follows the materiality principle when preparing and disclosing financial reports. If disclosurematters involve the judgment of materiality standards. the methods of determining materiality standards and
selection basis are disclosed as follows:
| Disclosure matters involve the judgment of materiality standards | Methods of determining materiality standards and selection basis |
| Impairment test made on individual accounts receivable with significant amounts. | Impairment test made on individual accounts receivables accounting over 10% as total provision for various types of bad debts receivables, and amounts exceeding 5 million yuan |
| Significant bad debt reserve for accounts receivable recovered or reversed | Individual item recovered or reversed accounting over 10% as total amounts for various types of receivables and exceeding 5 million yuan |
| Significant receivables actually written off | Individual write-off amount accounting for over 10% as total amounts of various types of bad debts reserve for receivables, and amounts exceeding 5 million yuan |
| Significant contractual liabilities with aging over one year | Individual contractual liabilities with aging over one year accounting over 10% of total amount of contractual liabilities, and amounts exceeding 10 million yuan |
| Significant project under construction | Projects with investments exceeding 5 million yuan |
| Significant non-wholly owned subsidiaries | Non-wholly owned subsidiaries with individual entity revenue and net profit accounting 10% for items related to the Company's consolidated statements |
| Significant associated enterprise and joint-venture. | Associated enterprise and joint-venture with net profit share recognized in the current period accounting 5% for items related to the Company’s consolidated statements |
6. The Accounting Treatment of Business Combination under the Same Control and Different ControlBusiness Combination refers to the transaction or event in which two or more separate enterprises are mergedto form one reporting entity. Business combination can be divided into business combination under the same controland 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 partiesbefore and after the combination, and the control is not temporary, so it is the business combination under the samecontrol. In case of business combination under the same control, the party that obtains control of other enterprisesparticipating in the combination on the combination date shall be the combination party, and the other enterprisesparticipating in the combination shall be the merged party. The combination date refers to the date on which thecombination party actually acquires control over the merged party.The assets and liabilities acquired by the combination party are measured at the book value of the merged partyat the date of consolidation, including goodwill that was formed during acquisition by end controller. If thedifference between the book value of the net assets acquired by the merging party and the book value of the mergedconsideration (or the total par value of the issued shares) paid by the merging party, and the capital reserve (sharecapital premium) shall be adjusted; If the capital reserve (equity premium) is insufficient to offset, the retainedearnings shall be adjusted.
The direct expenses incurred by the merging party for the purpose of business combination shall be includedin the profits and losses of the current period when they are incurred.
(2) Business combination under different control
If the enterprises participating in the merger are not ultimately controlled by the same party or multiple partiesbefore and after the merger, the enterprise merger is not under the same control. In case of business combinationunder different control, the party that obtains control of other enterprises participating in the combination on thedate of purchase shall be the Purchaser, and the other enterprises participating in the combination shall be thePurchasee. Purchase date means the date on which the Purchaser actually acquires control of the Purchasee.For business combination under different control, the merger cost includes the assets, liabilities and fair valueof equity securities issued by the Purchaser in order to obtain the control over the Purchasee on the date of purchase,and the intermediary fees such as audit, legal service, appraisal and consultation and other management fees for theenterprise merger are used to record into the profits and losses of the current period when incurred. The transactioncosts of equity or debt securities issued by the Purchaser as a merger consideration are included in the initialrecognition amount of the equity or debt securities. Contingent consideration involved shall be included in theconsolidation cost at its fair value at the purchase date, and the consolidation goodwill shall be adjusted accordinglyif new or further evidence of the existence of circumstances at the purchase date appears within 12 months after thepurchase date and the adjustment or consideration is required. The consolidation cost incurred by the Purchaser andthe identifiable net assets acquired during the consolidation are measured at the fair value at the date of purchase.The difference between the merger costs and the fair value shares of the identifiable net assets of the Purchasee atthe purchase date obtained in the merger is recognized as goodwill. If the combined cost is less than the fair valueof the identifiable net assets of the Purchasee in the merger, first, the fair value of the identifiable assets, liabilitiesand contingent liabilities of the Purchasee and the measurement of the consolidation cost shall be re-checked. If theconsolidation cost is still smaller than the fair value share of the identifiable net assets of the Purchased obtained inthe consolidation after the re-check, the difference shall be recorded into the profits and losses of the current period.When the Purchaser acquires the deductible temporary difference of the Purchasee, if it fails to recognize thedeferred income tax assets on the date of purchase because it does not meet the recognition conditions for thedeferred income tax, and within 12 months of the date of purchase, new or further information is obtained indicatingthat the relevant circumstances at the purchase date already exist and the economic benefits from the temporarydifference deductible by the purchaser on the purchase date are expected to be realized, the relevant deferred incometax assets shall be recognized, and the goodwill shall be reduced. If the goodwill is not sufficiently offset, thedifference shall 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 and losses.Through multi-transaction and step-by-step business combination under different control, according to theCircular of the Ministry of Finance on Printing and Issuing the Interpretation of Accounting Standards for BusinessEnterprises No.5 (CK (2012) No.19) and Article 51 of the Accounting Standards for Business Enterprises No.33-Consolidated Financial Statements on the judgment criteria of "package deal" (see 7 (2) of Note Ⅲ), it is determinedwhether the multiple transactions belong to the "package deal". In the case of a "package deal", the accountingtreatment shall be performed with reference to the description in the preceding paragraphs of this section and NoteⅢ, 15 "Long-term Equity Investments"; If the transaction is not a "package deal", the accounting treatment shall be
distinguished between the individual financial statements and the consolidated financial statements:
In the individual financial statements, the sum of the book value of the equity investment held by the Purchaserprior to the purchase date and the cost of the new investment at the purchase date shall be taken as the initialinvestment cost of the investment; Where the equity of the Purchased held before the date of purchase involvesother comprehensive income, the other consolidated income associated with the investment is accounted for on thesame basis as the assets or liabilities directly disposed of by the Purchaser (i.e., except for the corresponding sharein the change caused by the acquisition of the net liability or net assets of the defined benefit plan remeasured inaccordance with the equity method, the rest is transferred to the current investment income).
In the consolidated financial statements, the equity of the Purchased held prior to the date of purchase isremeasured according to the fair value of the equity at the date of purchase, and the difference between the fair valueand the carrying value is included in the investment income of the current period; Where the equity of the Purchaseeheld before the date of purchase involves other comprehensive income, other consolidated income related theretoshall be accounted for on the same basis as the direct disposal of the relevant assets or liabilities by the Purchaser(i.e., except for the corresponding share in the change caused by the acquisition of the net liability or net asset ofthe defined benefit plan remeasured in accordance with the equity method, the rest is converted into the investmentincome of the current period to which the acquisition date belongs).
7. Criteria for the Judgment of Control and Methods for the Preparation of Consolidated FinancialStatements.
(1) Criteria for the Judgment of Control
The scope of consolidation of the consolidated financial statements is determined on a control basis. Controlmeans that the Company has the authority over the Investee, enjoys a variable return by participating in the relevantactivities of the Investee, and has the ability to use its authority over the Investee to influence the amount of suchreturn. The scope of the merger includes the Company and all its subsidiaries. Subsidiary refers to the main bodycontrolled by the Company.
The Company will re-evaluate the above control definitions once the relevant facts and circumstances change,which results in the change of the relevant elements.
(2) Preparation method of consolidated financial statement
The Company begins to incorporate the net assets of the subsidiary and the actual control of the productionand operation decisions into the scope of the merger from the date when the subsidiary is acquired; Cease to beincluded in the scope of the merger as of the date of loss of effective control. For the subsidiaries disposed of, theoperating results and cash flows prior to the date of disposal have been appropriately included in the consolidatedincome statement and consolidated cash flow statement; For subsidiaries disposed of in the current period, theopening amount of the consolidated balance sheet is not adjusted. The operating results and cash flows ofsubsidiaries increased by consolidation after purchase have been properly included in the consolidated incomestatement and consolidated cash flow statement, and the opening and comparative amounts in the consolidatedfinancial statements have not been adjusted for subsidiaries that are not under the same control. The operating results
and cash flows of the subsidiaries increased by consolidation under the same control from the beginning of theconsolidation period to the consolidation date have been appropriately included in the consolidated profit statementand consolidated cash flow statement, and the comparative amount of the consolidated financial statements has beenadjusted at the same time.In the preparation of the consolidated financial statements, if the accounting policies or accounting periodsadopted by the subsidiaries are inconsistent with those adopted by the Company, necessary adjustments shall bemade to the financial statements of the subsidiaries in accordance with the accounting policies and accountingperiods of the Company. For subsidiaries acquired through business combination under different control, thefinancial statements shall be adjusted on the basis of the fair value of identifiable net assets at the date of purchase.All significant transaction balances, transactions and unrealized profits within the Company are offset at thetime of preparation of the consolidated financial statements.
The shareholders' equity and the portion of the net profit or loss of the subsidiary that is not owned by theCompany for the current period are separately presented as minority shareholders' equity and minority shareholders'profit or loss in the consolidated financial statements under shareholders' equity and net profit. The shares ofminority shareholders' equity in the net profits and losses of subsidiaries for the current period are shown as"minority shareholders' profits and losses" under the net profit item in the consolidated income statement. Lossesshared by minority shareholders in a subsidiary exceed the minority shareholders' share in the shareholders' equityof the subsidiary at the beginning of the period, and still decrease by a number of shareholders' equity.When the control of the original subsidiary is lost due to the disposal of part of the equity investment or otherreasons, the residual equity shall be revalued according to its fair value at the date of loss of control. The sum ofconsideration obtained from the disposal of equity and the fair value of the remaining equity minus the differencebetween the shares of the net assets of the original subsidiary that shall be continuously calculated from the purchasedate according to the original shareholding proportion shall be included in the investment income of the currentperiod of loss of control. Other comprehensive income related to the equity investment of the original subsidiary, inthe event of loss of control, the accounting treatment is performed on the same basis as the direct disposal of therelevant assets or liabilities by the Purchased (i.e. converted to current investment income, except for changesresulting from the re-measurement of the net liabilities or net assets of the Defined Benefit Plan in the originalsubsidiary). Thereafter, the residual equity shall be subsequently measured in accordance with the relevantprovisions of Accounting Standards for Business Enterprises No.2-Long-term Equity Investment or AccountingStandards for Business Enterprises No.22-Recognition and Measurement of Financial Instruments, as detailed inNote Ⅲ, 15-Long-term Equity Investment or Note Ⅲ, 11-Financial Instruments.
If the Company disposes of the equity investment in subsidiaries step by step until it loses control throughmultiple transactions. It is necessary to distinguish whether the transactions that dispose of the equity investment insubsidiaries until it loses control belong to a package deal or not. The terms, conditions and economic impact of thetransactions for the disposal of equity investments in subsidiaries are in accordance with one or more of thefollowing circumstances and generally indicate that multiple transactions should be accounted for as a package deal:
①These transactions were entered into simultaneously or taking into account each other's influence; ②Only whenthese transactions are taken together can a complete business result be achieved; ③The occurrence of onetransaction depends on the occurrence of at least one other transaction; ④It is not economical to consider atransaction alone, but it is economical to consider it in conjunction with other transactions. For transactions that arenot part of the package deal, each transaction shall be accounted for in accordance with the principles applicable tothe "partial disposal of long-term equity investments in subsidiaries without loss of control" (as detailed in 15 ofNote Ⅲ) and the "loss of control over existing subsidiaries as a result of the disposal of part of the equityinvestments or other reasons" (as detailed in the preceding paragraph), as appropriate. If the transactions involvingthe disposal of equity investments in subsidiaries until the loss of control belong to a package deal, the transactionsshall be accounted for as a transaction involving the disposal of subsidiaries and the loss of control; However, thedifference between each disposal price and the share of the subsidiary's net assets corresponding to the disposalinvestment prior to the loss of control is recognized in the consolidated financial statements as other consolidatedgains and transferred to the profit or loss for the current period of loss of control in the event of loss of control.8 Classification of Joint Venture Arrangements and Accounting Treatment of Joint OperationA joint venture arrangement is an arrangement under the joint control of two or more participants. TheCompany divides the joint venture arrangement into joint operation and joint venture in accordance with the rightsand obligations it enjoys in the joint venture arrangement. A joint operation is a joint arrangement whereby theparties that have joint control of the arrangement have rights to the assets, and obligations for the liabilities, relatingto the arrangement. A joint venture is a type of joint arrangement whereby the parties that have joint control of thearrangement have rights to the net assets of the joint venture.The Company's investment in the joint venture is accounted for using the equity method, and shall be treatedin accordance with the accounting policy described in Note Ⅲ, 15 "Long-term Equity Investment Accounted bythe Equity Method".The Company, as a joint venture party, recognizes the assets and liabilities held and assumed by the Companyseparately, and recognizes the assets and liabilities jointly held and assumed by the Company according to the sharesof the Company; recognizes the revenue generated from the sale of the share of joint operating output enjoyed bythe Company; recognizes revenue generated from the sale of output from joint operations on the basis of theCompany's share; confirms the expenses incurred by the Company individually and the expenses incurred by thejoint operation according to the shares of the Company.
When the Company invests or sells assets as a joint venture (such assets do not constitute business, the samebelow), or purchases assets from the joint venture, the Company recognizes only the portion of the profits and lossesattributable to the other participants in the joint venture that arises from the transaction prior to the sale of suchassets to a third party. Where such assets are impaired in accordance with the provisions of Accounting Standardsfor Business Enterprises No.8-Impairment of Assets, the Company shall fully recognize such losses in the casewhere the assets are cast or sold by the Company to joint operations; For the assets purchased by the Company fromthe joint operation, the Company recognizes the losses according to the shares it assumes.
9. Determining Standards for Cash and Cash Equivalent
Cash and cash equivalents of the Company include cash on hand, deposits that can be readily withdrawn ondemand. Cash equivalents are investments held by the Company with a short term (usually maturing within threemonths from the date of purchase), high liquidity, readily convertible to known amounts of cash and which aresubject to an insignificant risk of changes in value.
10. Foreign Currency Business and Translation of Foreign Currency Statements
(1) Translation method for foreign currency transaction
At the time of initial confirmation, the foreign currency transactions occurring in the Company shall beconverted into the bookkeeping functional currency amount at the spot exchange rate on the trading day, but theforeign currency exchange business or transactions involving foreign currency exchange occurring in the Companyshall be converted into the bookkeeping functional currency amount at the actual exchange rate.
(2) Translation method for foreign currency monetary items and foreign currency non-monetary item
On the balance sheet date, the foreign currency monetary items are converted at the spot exchange rate on thebalance sheet date, and the exchange difference arising therefrom shall be: ① The exchange difference arisingfrom the special foreign currency borrowings related to the acquisition and construction of assets eligible forcapitalization shall be handled in accordance with the principle of capitalization of borrowing costs; ② Theexchange difference of the hedging instruments used for effective hedging of the net investment in overseasoperations (the difference is included in other comprehensive income, and is not recognized as current profit or lossuntil the net investment is disposed of); ③ Except for the amortized cost, the exchange differences arising fromthe changes in the book balance of the available-for-sale monetary items in foreign currencies shall be included inthe other comprehensive income, and shall be included in the profits and losses of the current period.
Where the preparation of the consolidated financial statements involves overseas operations, if there are foreigncurrency monetary items constituting net investment in overseas operations, the exchange differences arising fromexchange rate changes shall be included in other comprehensive income; When disposing of overseas operations,the profits and losses shall be transferred to the current disposal period.
Non-monetary items in foreign currencies measured at historical cost shall still be measured at the bookkeepingamount in functional currency translated at the spot exchange rate on the transaction date. For non-monetary itemsin foreign currencies measured at fair value, the spot exchange rate at the date of fair value determination shall beadopted for conversion. The difference between the converted amount in functional currency and the amount inoriginal functional currency shall be treated as the change in fair value (including the change in exchange rate), andshall be recorded into the profits and losses of the current period or recognized as other comprehensive income.
(3) Translation method for financial statements in foreign currencies
Where the preparation of the consolidated financial statements involves overseas operations, if there are foreigncurrency monetary items constituting net investment in overseas operations, the exchange differences arising fromexchange rate changes shall be as "foreign currency report conversion difference" and be confirmed as other
comprehensive income; When disposing of overseas operations, the profits and losses shall be transferred to thecurrent disposal period.The foreign currency financial statements of overseas operations shall be converted into RMB statements inthe following ways: the assets and liabilities in the balance sheet shall be converted at the spot exchange rate on thebalance sheet date; Except for "undistributed profits", other items of shareholders' equity shall be converted at thespot exchange rate at the time of occurrence. The income and expense items in the profit statement shall be convertedat the average exchange rate of the current period on the date of transaction. The undistributed profit at the beginningof the period shall 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 converted profitsdistribution items; The difference between the converted asset items and the total amount of the liability items andshareholders' equity items shall be recognized as other comprehensive income as the translation difference in theforeign currency statements. In case of disposal of overseas operations and loss of control, the balance in translationof the foreign currency statements related to the overseas operations as shown below in the shareholders' equityitems in the balance sheet shall be transferred to the profits and losses of the disposal period in whole or in proportionto the disposal of the overseas operations.Cash flows in foreign currencies and cash flows of overseas subsidiaries shall be converted at the averageexchange rate of the current period on the date of occurrence of the cash flows. The effect of exchange rate changeson cash shall be presented separately in the statement of cash flows as a reconciling item.Opening amounts and prior-period actual amounts shall be shown on the basis of amounts translated from theprior-period financial statements.When disposing of all the owner's equity of the Company's overseas operations or losing the control overoverseas operations due to the disposal of part of the equity investment or for other reasons, if the following itemsof shareholders' equity in the balance sheet are shown below, the balance in translation of the foreign currencystatement attributable to the owner's equity of the parent company related to the overseas operation shall betransferred to the profits and losses of the current disposal period.In the event that the proportion of overseas business interests is reduced due to the disposal of part of the equityinvestment or for other reasons, but the control over overseas business operations is not lost, the balance in thetranslation of the foreign currency statements related to the disposal of part of overseas business operations shall beattributed to minority shareholders' interests and shall not be transferred to the profits and losses of the currentperiod. When disposing of part of the equity of an overseas operation as an associated enterprise or a joint venture,the balance of the translation of the foreign currency statements related to the overseas operation shall be transferredinto the profits and losses of the current disposal period in the proportion of the overseas operation disposed of.
11. Financial instruments
Financial instruments are the contracts that form the financial assets of one entity, and at the same time formthe financial liabilities or equity instruments of other entities.
(1) Classification, confirmation and measurement of financial assets
According to the business mode of managing financial assets and the contractual cash flow characteristics offinancial assets, the Company divides financial assets into: Financial assets measured at amortized cost. Financialassets measured at fair value with changes included in other comprehensive income. Financial assets that aremeasured at fair value and whose movements are included in the current profits and losses.Financial assets are measured at fair value at initial recognition. For financial assets measured at fair value andwhose changes are included in current profits and losses, relevant transaction costs are directly included in currentprofits and losses. For other types of financial assets, relevant transaction costs are included in the initial recognitionamount. Accounts receivable or notes receivable arising from the sale of products or the provision of labor servicesthat do not contain or take into account significant financing components shall be initially recognized by theCompany in accordance with the amount of consideration that the Company is expected to be entitled to receive.
①Financial assets measured at amortized cost
The Group measures financial assets at fair value through other comprehensive income if both of the followingconditions are met: the financial asset is held within a business model with the objective of both holding to collectcontractual cash flows and selling; the contractual terms of the financial asset give rise on specified dates to cashflows that are solely payments of principal and interest on the principal amount outstanding. Interest income of suchfinancial assets is recognized based on effective interest method. The Company measures these financial assets atfair value and their 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 are included into thecurrent profit and loss.
②Financial assets measured at fair value with changes included in other comprehensive income
The Group measures financial assets at fair value through other comprehensive income if both of the followingconditions are met: the financial asset is held within a business model with the objective of both holding to collectcontractual cash flows and selling; the contractual terms of the financial asset give rise on specified dates to cashflows that are solely payments of principal and interest on the principal amount outstanding. Interest income of suchfinancial assets is recognised based on effective interest method. The Company measures these financial assets atfair value and their 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 are included into thecurrent profit and loss.
In addition, the Company designates some non-tradable equity instrument investments as financial assetsmeasured at fair value with changes included in other comprehensive income. The Company shall record therelevant dividend income of such financial assets into the current profits and losses, and the change of fair valueinto other comprehensive income. When the financial asset is derecognized, the accumulated gains or lossespreviously included in other comprehensive income will be transferred from other comprehensive income toretained income and will not be included in current profits and losses.
③Fair value through Profit and Loss Financial assets
The Company classifies the above financial assets measured at amortized cost and financial assets measuredat fair value with changes included in other comprehensive income into financial assets measured at fair value withchanges included in current profits and losses. In addition, during initial recognition, in order to eliminate orsignificantly reduce accounting mismatch, the Company designated part of financial assets as financial assetsmeasured at fair value with changes included in current profit and loss. For such financial assets, the Companyadopts fair value for subsequent measurement, and the changes in fair value are included into the current profit andloss.
(2) Classification, recognition and measurement of financial liabilities
Financial liabilities upon initial recognition are classified as financial liabilities which are measured at fairvalue and whose changes are included in current profits and losses and other financial liabilities. For the financialliabilities measured at fair value with the changes included into the current profits and losses, the relevant transactioncosts are directly included into the current profits and losses, and the relevant transaction costs of other financialliabilities are included in the initial recognition amount.
①Financial liabilities at fair value through profit or loss
Financial liabilities measured at fair value with changes included in current profits and losses, which includetransactional financial liabilities (including derivatives belonging to financial liabilities) and financial liabilitiesdesignated to be measured at fair value with changes included in current profits and losses at initial recognition.
Trading financial liabilities (including derivatives belonging to financial liabilities) are subsequently measuredaccording to their fair values. Except for those related to hedge accounting, changes in fair values are included incurrent profits and losses.
Financial liabilities designated to be measured at fair value with changes included in current profits and losses.Changes in the fair value of this liability caused by changes in the Company's own credit risk are included in othercomprehensive income. When the liability is derecognized, the accumulated change in fair value caused by changesin its own credit risk included in other comprehensive income is transferred to retained earnings. Changes in fairvalue are accounted into current profits and losses. If the above-mentioned treatment of the impact of changes inthe credit risk 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 of changes in thecredit risk of the enterprise itself) into the current profits and losses.
②Other financial liabilities
Except for financial liabilities and financial guarantee contracts formed by the transfer of financial assets thatdo not meet the conditions for termination of recognition or continue to be involved in the transferred financialassets, other financial liabilities are classified as financial liabilities measured at amortized cost and subsequentlymeasured at amortized cost. Gains or losses arising from termination of recognition or amortization are included incurrent profits and losses.
(3) Basis of Confirmation and Calculation of financial instruments
Financial assets shall be derecognized if they meet one of the following conditions: ① The termination of thecontractual right to receive cash flow from the financial asset. ② The financial asset has been transferred, andalmost all risks and rewards related to the ownership of the financial asset have been transferred to the transferee.
③ The financial asset has been transferred. Although the enterprise has neither transferred nor retained almost allrisks and rewards in the ownership of the financial asset, it has given up its control over the financial asset.
If the enterprise neither transfers nor retains almost all the risks and rewards of the ownership of the financialassets, and does not give up the control over the financial assets, the relevant financial assets shall be recognizedaccording to the extent of continuous involvement in the transferred financial assets, and the relevant liabilities shallbe recognized accordingly. The degree of continuous involvement in the transferred financial assets refers to therisk level faced by the enterprise due to the change in the value of the financial assets.
If the overall transfer of financial assets meets the conditions for termination of recognition, the differencebetween the book value of the transferred financial assets and the sum of the consideration received due to thetransfer and the accumulated amount of changes in fair value originally included in other comprehensive incomeshall be included into the current profits and losses.
If the partial transfer of financial assets meets the conditions for termination of recognition, the book value ofthe transferred financial assets shall be apportioned according to its relative fair value between the derecognizedpart and the non-derecognized part, and the difference between the sum of the consideration received due to thetransfer and the accumulated change in fair value originally included in other comprehensive income that shall beapportioned to the derecognized part and the allocated aforesaid book amount shall be included into the currentprofits and losses.
For financial assets sold by the Company with recourse, or for endorsement and transfer of held financial assets,it is necessary to determine whether almost all risks and rewards in the ownership of the financial assets have beentransferred. If almost all risks and rewards in the ownership of the financial asset have been transferred to thetransferee, the recognition of the financial asset shall be terminated. If almost all risks and rewards on the ownershipof a financial asset are retained, the recognition of the financial asset shall not be terminated. If almost all risks andrewards related to the ownership of financial assets have not been transferred or retained, it shall continue to judgewhether the enterprise retains control over the assets and carry out accounting treatment according to the principlesmentioned in the preceding paragraphs.
(4) Termination of recognition of financial liabilities
If the current obligation of the financial liability (or part thereof) has been relieved, the Company terminatesthe recognition of the financial liability (or part thereof). The Company (the borrower) and the lender sign anagreement to replace the original financial liabilities by assuming new financial liabilities. If the contract terms ofthe new financial liabilities and the original financial liabilities are substantially different, the original financialliabilities shall be derecognized and a new financial liability shall be recognized at the same time. If the Companymakes any substantial modification to the contract terms of the original financial liability (or part thereof), theoriginal financial liability shall be derecognized and a new financial liability shall be recognized in accordance with
the modified terms.If financial liabilities (or part thereof) are derecognized, the Company shall include the difference between itsbook value and the consideration paid (including transferred non-cash assets or liabilities assumed) into the currentprofits and losses.
(5) Offset of financial assets and financial liabilities
When the Company has the legal right to offset the recognized amount of financial assets and financialliabilities, and such legal right is currently enforceable, and the Company plans to settle the financial assets on a netbasis or realize the financial assets and settle the financial liabilities at the same time, the financial assets andfinancial liabilities are listed in the balance sheet at a net amount after mutual offset. In addition, financial assetsand financial liabilities shall be listed separately in the balance sheet and shall not be offset against each other.
(6) The fair value determination method of financial assets and financial liabilities
Fair value refers to the price that market participants can receive from selling an asset or pay to transfer aliability in an orderly transaction on the measurement date. Where there is an active market for financial instruments,the Company adopts quotations in the active market to determine their fair values. Quoted price in active marketrefers to the price easily obtained from exchanges, brokers, industry associations, pricing service agencies, etc. ona regular basis, and represents the price of market transactions actually occurred in fair trading. If there is no activemarket for financial instruments, the Company uses evaluation techniques to determine their fair values. Evaluationtechniques include reference to prices used in recent market transactions by parties familiar with the situation andwilling to trade, reference to current fair values of other financial instruments that are substantially the same,discounting cash flow technique, option pricing model, etc. In valuation, the Company adopts valuation techniquesthat are applicable under current circumstances and are supported by sufficient available data and other information,selects input values that are consistent with the characteristics of assets or liabilities considered by marketparticipants in transactions related to assets or liabilities, and gives priority to the use of relevant observable inputvalues as much as possible. If the relevant observable input value cannot be obtained or it is not impracticable toobtain it, the non-input value shall be used.
(7) Equity instruments
Equity instruments refer to contracts that can prove ownership of the Company's residual equity in assets afterdeducting all liabilities. The issuance (including refinancing), repurchase, sale or cancellation of equity instrumentsby the Company are treated as changes in equity, and transaction costs related to equity transactions are deductedfrom equity. The Company does not recognize changes in the fair value of equity instruments.
Dividends (including "interest" generated by instruments classified as equity instruments) distributed by theCompany's equity instruments during their existence shall be treated as profit distribution.
12. Impairment of financial assets
The financial assets of the Company that need to confirm the impairment loss are financial assets measured atamortized cost and debt instrument investment measured at fair value with changes included in other comprehensive
income, mainly including notes receivable, accounts receivable, other receivables, debt investment, other debtinvestment, long-term receivables, etc. In addition, for some financial guarantee contracts, impairment reserves andcredit impairment losses are also accrued in accordance with the accounting policies described in this part.
(1) Recognition method of impairment provision
On the basis of expected credit losses, the Company sets aside impairment reserves and recognizes creditimpairment losses for the above items according to the applicable expected credit loss measurement method (generalmethod or simplified method).Credit loss refers to the difference between all contractual cash flows receivable according to the contract andall cash flows expected to be collected by the Company discounted according to the original actual interest rate, i.e.the present value of all cash shortages. Among them, for the financial assets that have been purchased or incurredcredit impairment, the Company discounts them according to the actual interest rate adjusted by credit.
The general method of measuring expected credit loss refers to the Company's assessment of whether the creditrisk of financial assets has increased significantly since the initial recognition on each balance sheet date. If thecredit risk has increased significantly since the initial recognition, the Company will measure the loss reserve by anamount equivalent to the expected credit loss during the entire period. If the credit risk has not increased significantlysince the initial recognition, the Company will measure the loss reserve according to the amount equivalent to theexpected 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 measures the loss reservebased on the expected credit loss amount within the next 12 months or the entire duration according to whether thecredit risk has increased significantly since the initial recognition.
(2) Criteria for judging whether credit risk has increased significantly since initial recognition
If the default probability of a certain financial asset in the expected duration determined at the balance sheetdate is significantly higher than the default probability in the expected duration determined at the time of initialrecognition, it indicates that the credit risk of the financial asset is significantly increased. Except for specialcircumstances, the Company uses the change of default risk in the next 12 months as a reasonable estimate of thechange of default risk in the entire duration to determine whether the credit risk has increased significantly sincethe initial recognition.
Generally, if the overdue period is more than 90 days, the Company will consider that the credit risk of thefinancial instrument has increased significantly, unless there is conclusive evidence that the credit risk of thefinancial instrument has not increased significantly since the initial recognition.
The Company will consider the following factors when evaluating whether the credit risk has increasedsignificantly
1) Whether there is any significant change in the actual or expected operating results of the debtor;
2) Whether there is any significant adverse change in the regulatory, economic or technological environment
of the debtor;
3) Whether there is any significant change in the value of the collateral or the quality of the guarantee or creditenhancement provided by the third party, which are expected to reduce the economic motivation of the debtor'srepayment according to the time limit stipulated in the contract or affect the probability of default;
4) Whether there is any significant change in the expected performance and repayment behavior of the debtor;
5) Whether there is any significant change in the Company's credit management methods for financialinstruments, etc.
On the balance sheet date, if the Company judges that the financial instrument has only low credit risk, theCompany assumes that the credit risk of the financial instrument has not increased significantly since the initialrecognition. If the default risk of a financial instrument is low, the borrower's ability to perform its contractual cashflow obligations in a short period of time is strong, and even if there are adverse changes in the economic situationand operating environment for a long period of time, it may not necessarily reduce the borrower's ability to performits contractual cash obligations, then the financial instrument is considered to have low credit risk.
(3) Judgment criteria for financial assets with credit impairment:
When one or more events have an adverse impact on the expected future cash flow of a financial asset, thefinancial asset becomes a financial asset with credit impairment. The evidence of credit impairment of financialassets includes the following observable information:
1) The issuer or debtor has major financial difficulties;
2) The debtor violates the contract, such as default or overdue payment of interest or principal, etc.;
3) The creditor gives concessions that the debtor will not make under any other circumstances due to economicor contractual considerations related to the debtor's financial difficulties;
4) The debtor is likely to go bankrupt or undergo other financial restructuring;
5) The active market of the financial assets disappears due to the financial difficulties of the issuer or the debtor;
6) Purchase or generate a financial asset at a substantial discount, which reflects the fact that credit losses haveoccurred.
Credit impairment of financial assets may be caused by the combined action of multiple events, but may notbe caused by separately identifiable events.
(4) Portfolio approach to evaluate expected credit risk based on portfolio
The Company evaluates credit risks for financial assets with significantly different credit risks, such as:
Accounts receivable with related parties. Receivables in dispute with the other party or involving litigation orarbitration. Receivables with obvious signs that the debtor is likely to be unable to perform the repayment obligation.
In addition to the financial assets with individual credit risk assessment, the Company divides the financialassets into different groups based on the common risk characteristics. The common credit risk characteristics
adopted by the Company include: Credit risk shall be assessed on the basis of the aging portfolio, the receivablesportfolio between the final controlling party and its subordinate units, the public maintenance fund and house sellingfund portfolio deposited in the housing provident fund management center, the deposit/margin portfolio, and thepetty cash ledger portfolio formed by the employee loan of the unit.
(5) Accounting treatment method for impairment of financial assets
At the end of the period, the Company calculates the estimated credit losses of various financial assets. If theestimated credit losses are greater than the book amount of its current impairment reserve, the difference isrecognized as impairment loss. If it is less than the carrying amount of the current impairment reserve, the differenceis recognized as impairment gain.
(6) Methods for determining the credit loss of various financial assets
①Notes receivable
The Company measures the loss reserve for bills receivable according to the expected credit loss amountequivalent to the entire duration. Based on the credit risk characteristics of bills receivable, they are divided intodifferent 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. |
As for the notes receivables’ classified as portfolio, the Company referred to the historical credit lossexperience, combined with current situation and forecast for the future economic condition, calculating the expectedcredit loss. Through risk exposure at default and lifetime expected credit loss.
② Accounts receivable and other receivables
For receivables that do not contain significant financing components, the Company measures the loss reserveaccording to the expected credit loss amount equivalent to the entire duration.
For receivables that contain significant financing components, the Company measures the loss reserve basedon whether the credit risk has increased significantly since the initial recognition, using the amount of expectedcredit loss within the next 12 months or the entire duration.
According to whether the credit risk of other receivables has increased significantly since the initial recognition,the Company measures impairment loss with an amount equivalent to the expected credit loss within the next 12months or the entire duration.
In addition to the accounts receivable and other receivables that individually assess credit risk, they are dividedinto different portfolios based on their credit risk characteristics:
| Item | Basis for determining portfolio |
| Portfolio 1 | Credit portfolio |
As for the receivables classified as portfolio, the Company referred to the historical credit loss experience,combined with current situation and forecast for the future economic condition, calculating the expected credit loss.Through cross reference table between the aging of receivables and lifetime expected credit loss. The aging ofreceivables is calculated on the date of recognition.The portfolio of other receivable is recognized as follows:
| Item | Basis for determining portfolio |
| Portfolio 1 | Credit portfolio |
| Portfolio 2 | Deposit/margin portfolio |
| Portfolio 3 | The portfolio of reserve fund ledger formed by the Company's staff loan |
As for the other receivables classified as portfolio, the Company referred to the historical credit loss experience,combined with current situation and forecast for the future economic condition, calculating the expected credit loss.Through risk exposure at default and lifetime expected credit loss in the coming 12 months. For the otherreceivables classified as aging, is calculated on the date of recognition.
13.Inventory
(1) Classification of inventory
Inventories mainly include raw materials, revolving materials, inventory goods, and materials in transit, etc..
(2) Valuation method for obtaining and issuing inventory
Inventories are initially measured at cost. Inventory costs include purchase costs, processing costs and otherexpenditures. The actual cost of inventories upon delivery is calculated using the weighted average method.
(3) Confirmation of net realizable value of inventories and method of accrual of falling price reserve
Net Realizable Value refers to the amount of estimated selling price of inventories minus the estimated cost tillcompletion, estimated expenses for selling activity and related taxes and fees in daily activities. When determiningthe net realizable value of inventories, solid evidence obtained shall be the basis, and the purpose of holding theinventories and the impact of events after the balance sheet date shall be considered.
On the balance sheet date, inventories shall be measured at lower of cost and net realizable value. When thenet realizable value is lower than the cost, the provision for inventory devaluation shall be accrued. The provisionfor inventory devaluation shall be accrued based on the difference between the cost of a single inventory item andits net realizable value. The provision for inventory devaluation of a large number of inventories with low unit pricesshall be based on the type of inventory; for inventories related to the product range produced and sold in same region,having the same or similar end use or purpose, and difficult to be separated from other items for measurement, theirprovision for inventory devaluation can be combined and accrued.
After the provision for inventory devaluation is accrued, if the factors cause the previous written-downinventory value have disappeared, and the situation results in the fact that the net realizable value of the inventorieshigher than the book value, the amount of the provision for inventory devaluation that has been accrued shall be
reversed and included in the current period profit or loss.
(4) The Company adopts perpetual inventory system as its inventory system.
(5) Amortization method of low-value consumables and packaging materials
Low-value consumables are amortized by one-off amortization method when they are received; packagingmaterials are amortized by one-off amortization method when they are received.
14. Held-for-sale assets and disposal group
(1) Recognition standards and accounting method treatment for Held-for-sale assets and disposal group
A non-current asset or disposal group is classified as held for sale when its carrying amount will be recoveredprincipally through a sale transaction rather than through continuous use. The following conditions need to besimultaneously met to be classified as held for sale: a non-current asset or to-be-disposed portfolio can be soldimmediately under the current conditions based on the practice of selling such asset or to-be-disposed portfolio insimilar transactions; the Company has already decided on the sale plan and obtained confirmed purchasecommitment; the sale is scheduled to be completed within one year. Among them, a Disposal Portfolio refers to agroup of assets that will be disposed of as a whole through sale or other approaches in a transaction, and the liabilitiesdirectly associated with these assets transferred along with the assets in transaction. If the portfolio of assets orgroup of portfolios of assets is allocated goodwill acquired in business merger in accordance with AccountingStandards for Business Enterprises No. 8 - Asset Impairment, the Disposal Portfolio shall include the goodwillallocated to it.
In the event that the book value of a non-current asset or to-be-disposed portfolio that has been designated asheld-for-sale category is higher than the net amount of fair value less sales expenses when the non-current asset orto-be-disposed portfolio is initially measured or measured on the balance sheet date, the book value shall be to thenet amount of fair value minus sales expenses, and the written-down amount shall be recognized as asset impairmentloss and included in current period profit or loss. The provision for impairment loss of the held-for-sale asset shallbe accrued. For a Disposal Portfolio, the confirmed impairment loss shall deduct the book value of the goodwill inthe Disposal Portfolio, then deduct the book value of the non-current assets determined by the measurement on apro-rata basis in accordance with the applicable Accounting Standards for Business Enterprises No. 42 held-for-salenon-current assets, Disposal Portfolio and Termination of Operations (hereinafter referred to as the “Guide for Held-For-Sale”). In the event of an increase of the book value of the held-for-sale Disposal Portfolio minus sales expenseson the subsequent the balance sheet date, the amount previously written down shall be recovered and be reversedwithin the mount of the asset impairment loss recognized in the non-current assets measured by the measurement“Guide for Held-For-Sale” after being classified as held for sale asset, the reversal amount shall be included in thecurrent period profit or loss, and the book value of all non-current assets (except for goodwill) determined by themeasurement on a pro-rata basis in accordance with the applicable “Guide for Held-For-Sale” shall be increased ona pro-rata basis. The book value of the goodwill that has been deducted and the impairment loss of the assetsrecognized before the classification of the held-for-sale non-current assets in accordance with the applicable “Guidefor Held-For-Sale” shall not be reversed.
In terms of the held-for-sale non-current assets or non-current assets in Disposal Portfolio, there is no accrualor amortization for depreciation, and the interest from and other expenses from the liabilities in held-for-saleDisposal Portfolio shall still be recognized.When a non-current asset or Disposal Portfolio no longer meets the conditions for Held-For-Sale category,non-current asset or Disposal Portfolio will no longer be classified as Held-For-Sale category by the Company orthe non-current asset will be removed from the Held-For-Sale Disposal Portfolio, and be measured based on one ofthe following two values, whichever is lower: (1) The book value before being classified as held-for-sale categoryadjusted based on the depreciation, amortization or impairment that should have be confirmed if it is not classifiedas held-for-sale category; (2) recoverable amount.
(2) Standards for Determining and Methods for the Presentation of Discontinued Operations.
A component of an entity that either has been disposed of or is classified as held for sale and:
a) represents a separate major line of business or geographical area of operations,
b) is part of a single coordinated plan to dispose of a separate major line of business or geographical area ofoperations or
c) is a subsidiary acquired exclusively with a view to resale.
Net profit from continuing operation and Net profit from discontinued Operation are added under the Item NetProfit of the Profit and Loss Statement, a single amount in the statement of comprehensive income comprising thetotal of:i) the post-tax profit or loss of continuing operation and discontinued operations. Profit and Loss from thediscontinued operation shall listed as Discontinued Operation Profit and Loss, which comprises of the entirereporting period, not only recognized as the reporting period after the termination of the operation.
15. Long-term equity investment
The long-term equity investment refers to in this part refers to the long-term equity investment that theCompany has control, joint control or significant influence on the invested entity. The long-term equity investmentof the Company that does not have control, joint control or significant impact on the investee shall be accounted asa financial asset measured at fair value with its changes included into the current profits and losses. Among them,if it is non-transactional, the Company may choose to designate it as a financial asset measured at fair value and itschanges are included in the accounting of other comprehensive income at the time of initial recognition. For detailsof its accounting policies, please refer to Note ②, 11 “Financial Instruments".
Joint control refers to the control that the Company shares with other party/parties for an arrangement inaccordance with relevant agreements, and relevant activities of the arrangement can only be decided based on theconsensus of all parties sharing the control rights before making a decision. Significant Influence refers to power ofthe Company to participate in the decision-making of the financial and operating policies of the investee, but theCompany cannot control or jointly control the development of these policies with other parties.
(1) Determination of investment cost
For a long-term equity investment obtained from a combination of businesses under the same control, theapportioned share of the book value in the final controller's consolidated financial statements on the combinationdate in accordance with the shareholders' equity shall be the initial investment cost of the long-term equityinvestment. The capital reserve shall be adjusted subject to the difference between the initial investment cost of thelong-term equity investment and the cash paid, the non-cash assets transferred, and the book value of the debtsassumed; if the capital reserve is insufficient for offsetting, the retained earnings shall be adjusted. Where the equitysecurities are issued 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 theinitial investment cost of the long-term equity investment, and the total par value of the issued shares is taken as theshare capital. The capital reserve shall be adjusted subject to the difference between the initial investment cost ofthe long-term equity investment and the total par value of the shares issued; if the capital reserve is insufficient foroffsetting, the retained earnings shall be adjusted. Where the equity of combined parties under the same control isobtained through multiple transactions and a business combination under the same control is formed finally, it shallbe treated differentially based on whether it is a “package deal”: if it belongs to a “package deal”, all transactionswill be treated as a transaction that obtains control. If it is not a “package deal”, the apportioned share of the bookvalue in the final controller's consolidated financial statements on the combination date in accordance with theshareholders' equity shall be the initial investment cost of the long-term equity investment. The capital reserve shallbe adjusted subject to the difference between the initial investment cost of the long-term equity investment and thesum of the book value of long-term equity investment before combination date and the book value of the newconsideration for 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 combination date and arerecognized with equity recognized or as available-for-sale financial asset as other comprehensive income will notbe given accounting treatment for the moment.For a long-term equity investment obtained from a combination of businesses not under the same control, theinitial investment cost of the long-term equity investment shall be based on the combination cost on the purchasedate. The combination cost includes the assets paid by purchaser, the liabilities incurred or assumed, and the sum ofthe fair value of issued equity securities. Where the equity of combined parties not under the same control is obtainedthrough multiple transactions and a business combination under the same control is formed finally, it shall be treateddifferentially 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 of the long-termequity investment calculated by the cost method shall be calculated based on the sum of the book value of the equityinvestment in the original holder and the new investment cost. The original shareholding that measured using equitymethod, the relevant other comprehensive income does temporarily not conduct accounting treatment.Intermediary expenses such as for auditing, legal services, assessment and other related expenses incurred bya combining party or a purchaser for business combination shall be recognized in current period profit or loss whenincurred.The equity investments other than formed by business combination shall be initially measured at cost. The cost
will be determined based on the following amount according to different methods of the acquisition of long-termequity investment: the purchase price in cash actually paid by the Company; the fair value of the equity securitiesissued by the Company, the value agreed in relevant investment contract or agreement; the fair value or originalbook value of the assets exchanged in non-monetary asset exchange transaction; the fair value of the long-termequity investment itself. Any expenses, taxes and other necessary expenses directly related to the acquisition oflong-term equity 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 or implement joint controlbut does not constitute control shall be the sum of the fair value of the originally held equity investment recognizedin accordance with the Accounting Standards for Business Enterprises No.. 22 – Recognition and Measurement ofFinancial Instruments and the cost for new investment.
(2) Follow-up measurement and confirmation methods for profit and loss
The Equity Method shall be used to account for long-term equity investments that have joint control over theinvested entity (except for those constituting joint operators) or have significant impact on the invested entity. Inaddition, the company's financial statements use the Cost Method to account for long-term equity investments,which can control the long-term equity investment of the investee.
② Long-term equity investment based on Cost Method
When accounting with Cost Method, long-term equity investment is priced at the initial investment cost, andthe cost of the long-term equity investment is adjusted by adding or recovering the investment. Except for the actualpayment at the time of obtaining investment or the cash dividends or profits included in the consideration but notyet issued, the current investment income shall be recognized according to the cash dividends or profits declared bythe investee.
② Long-term equity investment accounted for by Equity Method
When accounting with Equity Method, if the initial investment cost of a long-term equity investment is greaterthan the fair value share of the identifiable net assets of the investee when investing, and the initial investment costof the long-term equity investment shall not be adjusted; if the initial investment cost is less than the fair value shareof the identifiable net assets of the investee when investing, the difference shall be included in the current profit andloss, and the cost of the long-term equity investment shall be adjusted
When accounting with Equity Method, the investment income and other comprehensive income are recognizedseparately according to the shares of the net profit or loss and other comprehensive income that should be enjoyedor shared, and the book value of the long-term equity investment should be adjusted at the same time. The bookvalue of long-term equity investment is reduced accordingly by calculating the share that should be enjoyedaccording to the profit or cash dividend declared by the investee. The book value of long-term equity investmentshall be adjusted and included in the capital reserve for other changes in the owner's rights and interests of theinvested entity 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 be adjusted andconfirmed on the basis of the fair value of the identifiable assets of the investee at the time of investment. If the
accounting policies and periods adopted by the invested entity are inconsistent with the Company, the financialstatements of the invested entity shall be adjusted in accordance with the accounting policies and periods of theCompany, and the investment income and other comprehensive income shall be confirmed accordingly. For thetransactions between the Company and the associates and joint ventures, the assets invested or sold do not constitutea business, and the unrealized gains and losses from internal transactions are offset against the portion of theCompany that is attributable to the proportion of the shares, on this basis. investment profit and loss should beconfirmed. However, the unrealized internal transaction losses incurred by the Company and the investee are notincluded in the impairment losses of the transferred assets. Where the assets invested by the Company into a jointventure or an associates constitute a business, if the investor obtains long-term equity investment but does notcontrol, the fair value of the invested business shall be deemed as the initial investment cost of the new long-termequity investment, and the difference between the initial investment cost and the book value of the invested businessis fully recognized 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 the book value ofthe 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-termequity investment and other long-term equity that substantially constitutes the net investment of the investee arereduced to zero. In addition, if the Company has an obligation to bear additional losses to the investee, the estimatedliabilities shall be recognized according to the estimated obligations and included in the current investment losses.If the investee achieves net profit in the following period, the Company shall resume recognizing the share of incomeafter making up for the unrecognized share of loss.For the long-term equity investment in the joint ventures and associates held by the Company for the first timebefore the implementation of the new accounting standards, if there is a debit balance of equity investments relatedto the investment, the current profits and losses shall be accounted for by the straight-line amortization of the originalremaining period.
(3) Acquisition of Minority Equity
In the preparation of the consolidated financial statements, if the difference between the long-term equityinvestment added by purchasing minority shares and the net assets share that should be continuously calculated bythe subsidiary company from the purchase date (or the consolidation date) is calculated according to the proportionof newly added shares, the retained earnings shall be adjusted; and if the capital reserve is insufficient to offset, theretained earnings shall be adjusted.
(4) Disposal of long-term equity investment
In the consolidated financial statements, the parent company partially of disposes of the long-term equityinvestment of the subsidiary without losing control, the difference of the corresponding net assets in the subsidiarybetween the disposal price and the disposal of the long-term equity investment is included in the shareholders' equity.it shall be treated in accordance with the relevant accounting policies described in “Notes on the preparation ofconsolidated financial statements” in Note ②.7.
For the disposal of long-term equity investment in other cases, the difference between the book value of thedisposed equity and the actual acquisition price shall be included in the current profits and losses.If the long-term equity investment is accounted for by equity method, the remaining equity after disposal isstill accounted for by equity method, when disposing, the other comprehensive income which were originallyincluded in shareholder's rights and interests shall be accounted for on the same basis as the assets or liabilitiesdirectly disposed of by the investee. The owner's equity recognized as a result of changes in the owner's equity ofthe investee other than net profit or loss, other comprehensive income and profit distribution, it should be carriedforward to the current profit and lossFor the long-term equity investment accounted by Cost Method, the remaining equity is still accounted by CostMethod after disposal, other comprehensive income that recognized by equity method accounting or financialinstrument recognition and measurement criteria accounting before obtaining control over the investee shall beaccounted for on the same basis as the assets or liabilities directly disposed of by the investee, and shall be settledto the current profit and loss in proportion. Changes of the net assets of investee in the owner's equity other than netprofit or loss, other comprehensive income and profit distribution 's that recognized by equity method shall be settledto the current profit and loss in proportion.
Where the Company loses control over the investee due to disposal of part of its equity investment, whenpreparing individual financial statements, if the remaining equity after disposal can exercise joint control or exertsignificant influence on the investee, it shall be accounted for by equity method instead, and the remaining equityshall be adjusted by accounting by equity method when it is deemed to be acquired. If the remaining equity afterdisposal cannot be jointly controlled or exerts significant influence on the investee, it shall be accounted foraccording to the relevant provisions of the financial instrument recognition and measurement criteria, and thedifference between the fair value and the book value on the date of loss of control. It is included in the current profitand loss. Before the Company obtains control over the investee, other comprehensive income recognized by equitymethod accounting or financial instrument recognition and measurement criteria is used to directly dispose of therelevant assets with the investee, accounting treatment based on the same basis as the investee directly disposes ofrelated assets or liabilities when the control of the investee is lost, Accounting is treated on the same basis as theliabilities. Changes in the owner's equity other than net profit or loss, other comprehensive income and profitdistribution of the investee's net assets recognized by the equity method are carried forward to the current profit orloss when the control of the investee is lost. Among them, the remaining equity after disposal is accounted for usingthe equity 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 remaining equity isaccounted for using financial instrument recognition and measurement standard, all of other comprehensive incomeand other shareholder’s equity should be settled.
If the Company loses its joint control or significant influence on the investee due to the disposal of part of theequity investment, the remaining equity after disposal shall be accounted for according to the financial instrumentrecognition and measurement criteria, and the difference between the fair value and the book value on the date ofloss of joint control or significant influence is recognized in the current profit or loss. The other comprehensive
income recognized in the original equity investment by the equity method is accounted for on the same basis as theinvestee's direct disposal of related assets or liabilities when the equity method is terminated, Owner's equityrecognized 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 when terminating theequity methodThe Company disposes of the equity investment in the subsidiaries step by step through multiple transactionsuntil the loss of control. If the above-mentioned transactions are part of a package transaction, the transactions aretreated as a transaction dealing with the equity investment of the subsidiary and losing control. The differencebetween the book value of each long-term equity investment corresponding to the disposal price and the disposal ofthe equity before loss of control is first recognized as other comprehensive income, and when the control is lost, itis transferred to the current profit and loss of loss of control.
16. Investment Property
Investment Property refers to property held for the purpose of earning rent or capital appreciation, or both,including land use rights that have been leased, land use rights that are held and prepared for transfer afterappreciation, and buildings that have been rented. Investment property is initially measured at cost. The expensesrelated to investment property, if the economic benefits related to this asset are highly probable to flow into thecompany and the cost can be measured reliably, then the expense will account for as the cost of investment property.Other expenses are accounted for in profit and loss when incurred.
The Company adopts the cost model to conduct subsequent measurement of investment property anddepreciation or amortization according to the policy consistent with the building or land use rights.
For details of the impairment test method and impairment provision method of property, please refer to Note
②. 23 “Long-Term Asset Impairment”.
When the self-use property or inventory is converted into investment property or investment property isconverted into self-use property, the book value before conversion is used as the recorded value after conversion.
When the use of investment property is changed to self-use, the investment property is converted into fixedassets or intangible assets from the date of change. When the use of self-use property changes to earn rent or capitalappreciation, the fixed assets or intangible assets are converted into investment property from the date of change.In the case of investment property measured by the cost model when the conversion occurs, the book value beforeconversion is used as the entry value after conversion; if it is converted into investment property measured by thefair value model, the fair value of the conversion date is used as the entry value after conversion.
When an investment real estate is disposed of, or permanently withdrawn from use and is not expected toobtain economic benefits from its disposal, the confirmation of the investment real estate shall be terminated.Disposal income from the sale, transfer, retirement or damage of investment properties is charged to the currentprofit and loss after deducting its book value and related taxes and fees.
17. Fixed Assets
(1) Confirmation conditions for fixed assets
Fixed Assets refer to tangible assets held for the purpose of producing goods, providing labor services, rentingor operating management, and having a service life of more than one fiscal year. Fixed assets are recognized onlywhen the economic benefits associated with them are likely to flow into the Company and their costs can be reliablymeasured. Fixed assets are initially measured at cost and taking into account the impact of projected abandonmentcosts.
(2) Depreciation methods for various types of fixed assets
Fixed assets are depreciated over their useful lives using the straight-line method from the month followingthe scheduled availability. The depreciation period, estimated net residual value rate and annual depreciation rate ofeach category of fixed assets are as follows:
| Category | Depreciation Method | Depreciation period (Year) | Net salvage rate (%) | Annual depreciation rate (%) |
| Buildings | straight-line depreciation | 8-50 | 5 | 1.90— 11.88 |
| 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 |
| Electronic equipment | straight-line depreciation | 3-10 | 4、5 | 9.50—32.00 |
| 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 the fixed assetshas expired and is at the end of its useful life. The amount currently obtained by the Company from the disposal ofthe assets after deducting the estimated disposal expenses.
(3) Impairment test method and Impairment provision method for fixed assets
For details of Impairment test method and impairment provision method for fixed assets, please refer to Note
②. 23 “Long-Term Asset Impairment”.
(4) Recognition basis and valuation method of fixed assets acquired by finance lease
A finance lease is a lease that transfers substantially all the risks and rewards associated with ownership of anasset, and its ownership may or may not be transferred. If it is reasonable to determine the ownership of the leasedasset at the expiration of the lease term, the depreciation shall be calculated within the useful life of the leased asset;If it is not reasonable to determine the ownership of the leased asset at the expiration of the lease term, depreciationshall be calculated within a relatively short period of the lease term and the service life of the leased assets.
(5) Others
The subsequent expenses related to fixed assets, if the economic benefits related to the fixed assets are likelyto flow in and their costs can be reliably measured, are included in the cost of fixed assets and the book value of thereplaced part should be terminated. The subsequent expenditures other than mentioned as above are recognized inprofit or loss in the period in which they are incurred.
The fixed asset is derecognized when the fixed asset is in disposal or is not expected to generate economicbenefits by using or disposal. The difference between the disposal income from the sale, transfer, retirement ordamage of the fixed assets less the carrying amount and related taxes is recognized in profit or loss for the currentperiod.The Company reviews the useful life, estimated net residual value and depreciation method of fixed assets atleast at the end of the year, and changes as an accounting estimate if changes occur.
18. Construction in progress
The cost of construction in progress is determined based on actual project expenditure, including variousproject expenditures incurred during the construction period, capitalized borrowing costs before the project reachesthe expected usable status, and other related expenses. Construction in progress is carried forward to fixed assetswhen it is ready for its intended use.
For details of the impairment test method and impairment provision method for construction in progress, pleaserefer to Note ②. 23 “Long-Term Asset Impairment”.
19. Borrowing Costs
Borrowing costs include interest on borrowings, amortization of discounts or premiums, ancillary expenses,and exchange differences arising from foreign currency borrowings. Borrowing costs directly attributable to theacquisition, construction or production of assets eligible for capitalization, capitalization is begun when assetexpenditures have occurred, borrowing costs have occurred, and the acquisition, construction or productionactivities necessary to bring the assets to the intended usable or saleable state have begun. And capitalization isstopped when the assets under construction or production that meet the capitalization conditions are ready for theirintended use or saleable 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 be capitalized aftersubtracting the interest income from the unused borrowing funds deposited into the bank or the investment incomeobtained from the temporary investment. For the general borrowings, according to the accumulated assetexpenditures exceed the special borrowings. The capitalization amount is determined by multiplying the weightedaverage of which accumulated asset expenditure exceeds the asset expenditure of the special borrowing portion bythe capitalization rate of the general borrowings used. The capitalization rate is determined based on the weightedaverage interest rate of general borrowings.
During the capitalization period, the exchange differences of foreign currency special borrowings are allcapitalized; the exchange differences of foreign currency general borrowings are included in the current profit andloss.
Assets eligible for capitalization refer to assets such as fixed assets, investment property and inventories thatrequire a substantial period of acquisition, construction or production activities to achieve the intended use or salestatus.
If the assets eligible for capitalization are interrupted abnormally during the acquisition, construction orproduction process and the interruption period lasts for more than 3 months, the capitalization of the borrowingcosts shall be suspended until the acquisition, construction or production of the assets resumes.
20. Right-of-use assets
Right-of-use assets of the Group mainly consist of buildings, power generation and transmission equipment,plant, machinery and equipment, motor vehicles, furniture and fixtures and others.
(1) Initial accountings
At the commencement date of the lease, the Group recognizes the right to use the leased assets during the leaseterm as a right-of-use asset, including: the initial measurement amount of the lease liability; the amount of leasepayment paid on or before the beginning of the lease term, the amount of lease incentive already enjoyed shall bededucted if there is a lease incentive; initial direct expenses incurred by the lessee; the costs that the lessee isexpected to incur in order to dismantle and remove the leased asset, restore the leased asset to the site or restore theleased asset to the state agreed upon in the lease terms. The right-of-use assets are depreciated on a straight-linebasis subsequently by the Group. If the Group is reasonably certain that the ownership of the underlying asset willbe transferred to the Group at the end of the lease term, the Group depreciates the asset from the commencementdate to the end of the useful life of the asset. Otherwise, the Group depreciates the assets from the commencementdate to the earlier of the end of the useful life of the asset or the end of the lease term.
The company recognizes and measures the above costs under Item 4 in accordance with theAccounting Standards for Enterprises No.13–Contingencies.
(2) Subsequent accounting
The Company accursed the right-of-use assets according to the Accounting Standards for Enterprises NO.4-Fixed Assets. Commencement from the date of lease, the Company shall accrue the right-of-use assets. Generally,the right-of-use assets are accrued at the start of the lease date, the expenses of depreciation accrued shall includeinto relevant asset cost or profit and loss in the current period based on the purpose of right-of-use assets. Whilerecognizing the method of right-of-use assets, the Company shall make decisions on the economic benefit of forecastconsumption mode related to the right-of-use assets, accrues the deprecation by straight-line method. When theCompany recognize the depreciation period of right-of-use assets, maturity of lease period can be determined in areasonable and well-grounded manner on the acquisition of the right-of-use assets, accursed the deprecation in itsremaining service life. If the right-of-use lease assets could not be determined reasonably while the service life ismature, depreciation is applied with the short period of time between the lease term and the remaining useful life ofthe lease asset.
If there is impaired right-of-use assets, the Company shall accrue the subsequent deprecation based on the bookvalue of right-of-use assets after deducting the loss of impairment.
The Company determined not to recognized the right-of-use assets and lease liabilities on the short-term lease(lease term not exceeding 12 months), and recognizes the relevant lease payment during the respective lease term
in the current profit and loss or cost of assets relevant in straight line method. Impairment test methodand the provision method for diminution in value of right-of-use assets are detailed in Note III 23 “Long-Term AssetImpairment”.
21. Intangible assets
Intangible assets refer to identifiable non-monetary assets without physical form owned or controlled by theCompany.Intangible assets are initially measured at cost. Expenditure related to intangible assets is included in the costof intangible assets if the relevant economic benefits are likely to flow to the Company and its costs can be measuredreliably. However, the intangible assets acquired through business combination not involving enterprises undercommon control should be measured at fair value separately as intangible assets when their fair values can bereliably measured.
The acquired land use rights are usually accounted for as intangible assets. The related land use rights andbuilding construction costs of self-developed and constructed buildings are accounted for as intangible assets andfixed assets, respectively. In the case of purchased houses and buildings, the relevant price is distributed betweenthe land use rights and the buildings. If it is difficult to allocate them reasonably, all of them are treated as fixedassets.
(1) Basis for determining the service life, the estimate thereof, and amortization methods and the proceduresfor reviewing their service life
When recognizing the service life of the intangible assets, being sourced from any contractual right or otherstatutory rights, its service life shall not exceed the life of contractual rights or other statutory rights. As for theintangible assets not specified either under the contract or legal regulations, the company combined varioussituations, such as employing relevant professional persons to undergo the justification or make comparison withthe situation of the same industry and the historical experience of the Company, determining the future economicbenefit service life which is brought by the intangible assets. If the efforts are made, but could not recognizedreasonably that the intangible asset shall bring the economic benefit service life for the Company, then shall treatthis as uncertain service life of the intangible asset.
Since the intangible assets with limited useful life are available for use, the original value minus the estimatednet residual value and the accumulated amount of impairment reserve shall be amortized by the straight-line methodduring their expected service life. Intangible assets with uncertain service life shall not be amortized.
Among them, the useful life and amortization method of intellectual property are as follows:
| Item | Amortization period (year) | Amortization method |
| Trademark | 20 | Straight-line method |
| Software | 3-10 | Straight-line method |
| Land-use rights | 50 | Straight-line method |
At the end of the period, the useful life and amortization methods of intangible assets with limited useful life
are reviewed, and if any change occurs, it is treated as a change of accounting estimate. In addition, the useful lifeof intangible assets with uncertain service life is also reviewed. If there is evidence that the period for which theintangible assets bring economic benefits to the enterprise is foreseeable, the useful life of intangible assets isestimated and amortized according to the amortization policy of intangible assets with limited useful life
(2) Research and development expenditure
The company's expenditure for internal research and development project is divided into research phaseexpenditure and development phase expenditure.
Expenditures for the research phase shall be recognized in profit or loss when incurred.
Expenditures for the development phase that meet the following conditions shall be recognized as intangibleassets, and expenditures in the development stage that fail to meet the following conditions are included in currentprofit and loss:
a. It is technically feasible to complete the intangible asset to enable it to be used or sold.
b. The intent to complete the intangible asset and use or sell it;
c. The way in which intangible assets generate economic benefits, including the ability to prove that theproducts produced from the intangible assets having a market or the intangible assets having a market, and theintangible assets will be used internally, which can prove its usefulness;
d. sufficient technical, financial resources and other resources for supporting the development of the intangibleassets and the ability to use or sell the intangible assets.
e. Expenditure attributable to the development phase of the intangible asset can be reliably measured.
If it is impossible to distinguish the expenditures between research phase and development phase, all researchand development expenditures incurred will be included in the current profit and loss.
(3) Impairment test method and Impairment provision method for intangible assets
For details of the impairment test method and impairment provision method, please refer to Note ②. 23 “Long-Term Asset Impairment”.
22. Long-term Deferred Expenses
The long-term deferred expenses are all expenses that have occurred but shall be borne by the reporting periodand subsequent periods with amortization period of more than one year. The company's long-term deferred expensesmainly include lease of land use right and renovation costs of factory building. Long-term deferred expenses areamortized on a straight-line basis over the estimated benefit period.
23. Long-term assets impairment
For fixed assets, construction in progress, intangible assets with limited useful life, investment propertymeasured by cost model, and non-current non-financial assets such as long-term equity investments in subsidiaries,joint ventures and associates, the Company determines whether there is any indication of impairment on the balance
sheet date. If there is any indication of impairment, the recoverable amount is estimated and the impairment test iscarried out. Goodwill, intangible assets with uncertain service life and intangible assets that not yet ready for useare tested for impairment annually, regardless of whether there is any indication of impairment.If the result of the impairment test indicates that the recoverable amount of the asset is lower than its bookvalue, the impairment provision is made based on the difference and is included in the impairment loss. Therecoverable amount is the higher of the fair value of the asset less the disposal expense and the present value of theestimated future cash flow of the asset. The fair value of assets is determined according to the sale agreement pricein a fair transaction. If there is no sales agreement but there is an active market for the asset, the fair value isdetermined according to the buyer's bid for the asset; if there is neither sales agreement nor active market for assets,the fair value of assets shall be estimated based on the best information available. Asset disposal expenses includelegal fee, taxes, transportation expenses and direct expenses incurred to make assets saleable. The present value ofthe estimated future cash flow of an asset is determined by the appropriate discount rate discounting and theestimated future cash flow generated by the asset during its continuous use and final disposal. The asset impairmentprovision is calculated and confirmed based on individual assets. If it is difficult to estimate the recoverable amountof an individual asset, the recoverable amount of the asset is determined by the asset group which the asset belongsto. An asset group is the smallest portfolio of assets that can generate cash inflows independently.The book value of the goodwill listed separately in the financial statements is amortized into asset groups orportfolios that are expected to benefit from the synergies of business combinations when impairment tests areconducted. The test results show that the recoverable amount of the asset group or portfolio containing the assessedgoodwill is lower than its book value, the corresponding impairment losses should be confirmed. The amount ofimpairment loss is first deducted from the book value of the goodwill amortized to the asset group or portfolio, andthen deducted proportionally 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 the value is restoredin the future period.
24. 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, employeewelfare fees, medical insurance premiums, maternity insurance premiums, work injury insurance premiums,housing fund, labor union funds, employee education funds, and non-monetary benefits. The Company recognizesthe actual short-term employee's remuneration as a liability in the accounting period in which employees provideservices to the Company and recognizes them in profit or loss or related asset costs. Non-monetary benefits aremeasured at fair value.
Post-employment Benefits mainly include basic retirement security, unemployment insurance, and annuities.The Post-employment Benefit Scheme includes a Defined Contribution Plan and a Defined Benefit Plan. If a
Defined Contribution Plan is adopted, the corresponding amount of the deposit shall be included in the relevantasset cost or current profit and loss as incurred. (1) The Defined Contribution Plan is recognized as a liability basedon a fixed fee paid to an independent fund and is included in the current profit and loss or related asset costs; (2)The Defined Benefit Plan is accounted for using the expected cumulative benefits unit method Specifically, theCompany will convert 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 isattributed to the employee's in-service period and is included in the current profit and loss or related asset cost.If the labor relationship with the employee is terminated before the employee's labor contract expires, or if theemployee is encouraged to accept the reduction voluntarily, when cannot withdrawing unilaterally the dismissalbenefits provided by the termination of the labor relationship plan or the reduction proposal, and when confirmingthe costs associated with the restructuring involving the payment of the dismissal benefits, whichever is earlier, theCompany will recognize the employee compensation liabilities arising from the dismissal benefits, and included inthe current profit 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-term employeecompensations.The internal retirement plan for employees shall be treated in the same way as the above-mentioned dismissalbenefits. The company will pay the internal retired staff the salary and the social insurance premiums from theemployee's lay-off to normal retirement, and will include in the current profit and loss (dismissal benefits) when theconditions of the estimated liabilities are met.If the other long-term employee benefits provided by the Company to the employees are in line with theDefined Contribution Plan, they shall be accounted for Defined Contribution Plan, and otherwise accounted for theDefined Benefit Plan.
25.Estimated liabilities
When the obligations related to the contingencies meet the following conditions, they are recognized ascontingent liabilities: (1) The obligation is the present obligation assumed by the Company; (2) The performance ofthis obligation is likely to result in the outflow of economic benefits; (3) The amount of the obligation can be reliablymeasured.On the balance sheet date, taking into account factors such as risks, uncertainties and time value of moneyrelated to contingencies, the estimated liabilities are measured in accordance with the best estimate of theexpenditure required to perform the relevant current obligations.If all or part of the expenses required to discharge the estimated liabilities are expected to be compensated bythe third party, the compensation amount will be separately recognized as an asset when it is basically determinedto be received, and the confirmed compensation amount does not exceed the book value of the estimated liabilities.
(1) Loss Contract
A loss contract is a contract in which the cost of fulfilling a contractual obligation will inevitably occur more
than the expected economic benefit. If the contract to be executed becomes a loss contract, and the obligation arisingfrom the loss contract satisfies the conditions for the recognition of the above-mentioned estimated liabilities, theportion of the contract's estimated loss that exceeds the recognized impairment loss (if any) of the contracted assetis recognized as the estimated liability.
(2) Restructuring Obligations
For restructuring plans that are detailed, formal, and have been announced to the public, the amount of theestimated liabilities is determined based on the direct expenses related to the reorganization, subject to therecognition conditions of the aforementioned estimated liabilities. For the restructuring obligation to the part ofbusiness sold, the obligation related to the reorganization is confirmed only when the company promises to sell partof the business (that is, when the binding sale agreement is signed).
26. Share-based Payments
(1) Accounting Treatment of Share-based Payments
A share-based payment is a transaction that grants an equity instrument or assumes a liability determined basedon an equity instrument in order to obtain services from employees or other parties. Share-based Payments includeequity-settled share payment and cash-settled share payment.
② Equity-settled Share Payment
The equity-settled share payment in exchange for the services from employee is measured at the fair value ofthe granting of employees' equity instruments at the grant date. If the fair value is vested in the completion of thewaiting period of service or the fulfillment of the required performance conditions, during the waiting period, theamount of the fair value is calculated by the straight-line method into the relevant costs or expenses based on thebest estimate of the number of vesting equity instruments; Or If the vesting right is granted immediately after thegrant, the calculation of the amount of the fair value is included in the relevant cost or expense on the grant date,and the capital reserve is increased accordingly.
On each balance sheet date during the waiting period, the Company makes the best estimate based on the latestinformation on the changes in the number of employees with vesting rights and corrects the number of equityinstruments that are expected to be vested. The impact of the above estimates shall be included in the current relatedcosts or expenses, and the capital reserve is adjusted accordingly.
In the case of equity-settled share-based payments in exchange for other parties' services, if the fair value ofother parties' services can be reliably measured, the fair value of other services shall be measured at the fair valueon the date of acquisition; If the fair value of the other party's services cannot be measured reliably, the fair valueshall be measured at the fair value of the equity instrument at the date the service is acquired, and is included in therelevant cost or expense, which increases the shareholders' equity accordingly.
② Cash-settled Share Payment
The cash-settled share payment is measured at the fair value of the liabilities determined by the Company basedon shares or other equity instruments. If the vesting right is available immediately after the grant, the relevant costs
or expenses shall be included on the date of grant, and the liabilities shall be increased accordingly; if vesting rightis available after the service is completed within the waiting period or met the required performance conditions,based on the best estimate of the vesting rights on each balance sheet date of the waiting period, according to thefair value of the liabilities assumed by the company, the services obtained in the current period are included in thecost or expense, and the liabilities are increased accordingly.The fair value of the liabilities shall be re-measured on each balance sheet date and settlement date before thesettlement of the relevant liabilities, and the changes shall be recorded in the profit and loss of the current period.
(2) Relevant Accounting Treatment of share-based payment plan’s modification and terminationWhen the Company modifies the share-based payment plan, if the modification increases the fair value of theequity instruments granted, the increase in the fair value of the equity instruments is recognized accordingly. Theincrease in the fair value of equity instruments refers to the difference between the fair value of the equityinstruments before and after the modification. If the modification reduces the total fair value of the share-basedpayment or adopts other methods that are not conducive to the employee, the service obtained shall continue to beaccounted for, as if the change has never occurred, unless the Company cancels some or all of equity instruments.During the waiting period, if the granted equity instrument is cancelled, the Company will cancel the grantedequity instrument as an accelerated exercise, and the amount to be recognized in the remaining waiting period willbe immediately included in the current profit and loss, and the capital reserve will be recognized. If the employeeor other party can choose to meet the non-vesting conditions but fails to meet the waiting period, the Company willtreat it as a cancellation of the equity instrument.
(3) Accounting Treatment of Share Payment Transactions between the Company and its Shareholders or ActualControllersIn respect of the share-based payment transaction between the company and the shareholders or actualcontrollers of the company, If one of the settlement enterprise and the service receiving enterprise is in the companyand the other is outside the company, it shall be accounted for in the consolidated financial statements of thecompany according to the following provisions:
② If the settlement enterprise settles with its own equity instrument, the share-based payment transaction shallbe treated as equity-settled share-based payment; otherwise, it shall be treated as a cash-settled share-based payment.
If the settlement enterprise is an investor of a serviced enterprise, it shall be recognized as the long-term equityinvestment of the serviced enterprise according to the fair value of the equity instrument at the grant date or the fairvalue of the liability to be assumed, and the capital reserve (other capital reserve) or liabilities shall be recognized.
② If the serviced enterprise has no settlement obligation or grants its own employees the equity instruments,the share payment transaction shall be treated as equity-settled share payment; if the serviced enterprise hassettlement obligation and grants its employees other than its own equity instruments, the share payment transactionshall be treated as a cash-settled share payment.
For the share-based payment incurred between companies within the group, if the serviced enterprise and
settlement enterprise are not the same, then the payment should be recognized and measured in their individualfinancial statements, they should be accounted for using the above principles.
27. Revenue
The term “revenue” refers to the gross inflow of economic benefits arising in the course of the ordinaryactivities of an enterprise, which may increase of the shareholder's equities and is irrelevant to the capital of theshareholder. When the company signs a contract, it evaluates the contract, identifies the individual performanceobligations contained in the contract, and determines whether the individual performance obligations are performedwithin a certain period of time or at a certain point of time. When the company has fulfilled all the performanceobligations in the contract, the revenue shall be recognized respectively according to the transaction priceapportioned to the performance obligations. A contract with a customer generally explicitly states the goods orservices that an entity promises to transfer to a customer. The transaction price is the amount of consideration towhich an entity expects to be entitled in exchange for transferring promised goods or services to a customer,excluding amounts collected on behalf of third parties.Generally, the company recognizes the revenue from the sales of goods based on the transaction priceapportioned to the single performance obligation when the customer obtains the control right of the relevant goodson the basis of comprehensively considering the following factors: the company has the right to receive payment inrespect of the goods or services currently, that is, the customer has the obligation to pay for the goods currently; thecompany has transferred the legal ownership of the goods to the customer, that is, the customer has the legalownership of the goods; The Company has transferred the physical goods of the commodity to the Customer or theCustomer has obtained the qualification of physical goods right of the commodity. The consideration obtained bythe Company in respect of the transfer of the commodity is likely to be recovered; Other indications that thecustomer has taken control of the commodity.For the performance obligations performed in a certain period of time, such as the services provided, thecompany adopts the input method to determine the appropriate performance progress, and recognizes the revenueaccording to the performance progress in that period of time. On the balance sheet date, the company shall recognizethe current income according to the total transaction price of the contract multiplied by the progress of performanceminus the accumulated 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 and consumes the economicbenefits arising from the performance of the Company at the same time of the performance of the Company;Customers can control the goods under construction during the performance of the contract; The products producedby the Company during the performance of the Contract are of irreplaceable use, and the Company shall be entitledto receive payment for the accumulated part of the completed performance so far during the whole term of theContract. Otherwise, the Company recognizes revenue at the point when the Customer acquires control of therelevant goods or services.Where the contract contains two or more performance obligations, an entity shall, on the commencement dateof the contract, allocate the transaction price to each performance obligation identified in the contract on a relativestandalone selling price basis. Except when an entity has observable evidence that the entire discount relates to only
one or more, but not all, performance obligations in a contract, the entity shall allocate a discount proportionatelyto all performance obligations in the contract. Stand-alone selling price refers to the price of the goods or servicessold by the Company to the customer separately. If the stand-alone selling price cannot be directly observed, theCompany shall take into account all relevant information reasonably available and estimate the stand-alone sellingprice by observable input values to the maximum extent.As for the sales with quality guarantee, except for it guarantees the product on sale of service meets thedesignated standards to the customer, providing a single separate service, this quality guaranteed composes thesingle performance obligation. Otherwise, the Company shall treat the accounting method on quality guaranteeobligations in accordance with the Enterprise Accounting Standards No,13- Contingencies.If the contract comprised of significant financing elements, the Company shall recognize the amount ofpayables in cash to determine the trading price based on the assumption that the customer obtains the products orservice control rights. The difference between the price stipulated in the contract or agreement and its contractconsideration shall be amortized within the period of the contract or agreement. through the real interest method.As a practical expedient, an entity need not adjust the promised amount of consideration for the effects of asignificant financing component if the entity expects, at contract inception, that the period between when the entitytransfers a promised good or service to the customer and when the customer pays for that good or service will beone year or less.The Company justifies the trading identity is the major responsible person or on behalf based on whether it hasthe control right to the product or the service before transferring the products or service to the customer. As themajor responsible person of the Company, shall recognizes the revenue based on the total consideration of theamount received or receivable. Otherwise, as the agent of the Company, shall recognizes the revenue based on theexpected right of obtaining the commission or service charge, which is calculated as the total consideration on theamount received or receivable deducting the net amount payable to other related parties or recognizes on the amountof commission or proportion etc.The Company received the amount of products sales or service in advance, shall recognizes it as liabilities inthe first, then accounted as revenue upon fulfilling relevant performance obligations.The Company has transferred the products or service to its clients and has rights to obtain the considerations(and this rights is obliged to other elements of passing time) listed as the contractual assets. Contractual assets areaccrued the devaluation provision based on the expected credit loss. The Company has the unconditional rights（only depends on the passing of time） to its customer for obtaining the considerations, listed as item receivables.The consideration of amount received or receivable, which is obtained to its customer, shall transfer product orservice obligation to them, listed as contractual liabilities.The detailed accounting policies related to the major activities of obtaining the revenue of the Company
(1) Sales processing
The production and processing sales comprise mainly of sales of oils and oilseeds, food etc. The Companyrecognized the sales revenue when the amounts received or identification obtained upon sales, which has been
submitted and signed by the customer.
(2) Trading Revenue
If the Company obtained the product control rights from the third party and transferred to the client, assumedthe significant obligations under the transaction of transferring the products to the client. i.e. inventory risk, and hasrights to determine the price of the products oneself. The identity of the Company under the transaction is the majorresponsible person, recognizing the trading revenue based on the expected rights for obtaining the total considerationstipulated on the contract. The Company made commitment to arrange others to provide specific products, but hasno control rights on this before providing the specific products to clients. The identity of the Company under thetransaction is agent, recognizing the revenue on the commission obtained or service amount for arranging others toprovide the specific products to clients.
28. Contract cost
Contract cost comprises contract performance cost and contract acquisition cost.
The cost incurred by the company for the performance of the contract, which does not fall within the scope ofother accounting standards for business enterprises other than the income standard and meets the followingconditions at the same time, is recognized as an asset as the contract performance cost:
(1) The cost is directly related to a current or expected contract, including direct labor, direct materials,manufacturing expenses (or similar expenses), costs explicitly borne by the customer and other costs incurred solelyas a result of the contract;
(2) The cost increases the company's resources for fulfilling its performance obligations in the future;
(3) The cost is expected to be recovered.
The assets are presented in inventory or other non-current assets according to whether the amortization periodhas exceeded one normal operating cycle at the time of its initial recognition.
If the incremental cost incurred by the company to obtain the contract is expected to be recovered, it shall berecognized as an asset as the contract acquisition cost. Incremental cost refers to the cost that will not occur if thecompany does not obtain the contract.
The assets related to the contract cost mentioned above shall be amortized at the time of performance of theobligation or according to the performance progress on the same basis as the income recognition of the commodityor service related to the asset and shall be recorded into the current profit and loss.
If the book value of the above assets related to the contract cost is higher than the difference between theresidual consideration expected to be obtained by the company due to the transfer of the goods related to the assetsand the estimated cost to be incurred for the transfer of the relevant goods, the excess part shall be set aside as animpairment provision and recognized as an impairment loss of the asset.
29. Government grants
Government grant refers to the company's acquisition of monetary and non-monetary assets from the
government free of charge, excluding the capital invested by the government as an investor and enjoying thecorresponding owner's rights and interests. Government grants include assets-related grants and revenue-relatedgrants. The company defines the government grant obtained for the purchase and construction of long-term assetsor for the formation of long-term assets in other ways as the government grant related to assets; the remaininggovernment grant is defined as the government grant related to income. If the object of grants is not specified ingovernment documents, the grants shall be divided into income-related government grants and assets-relatedgovernment grants 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 the amount of theexpenditures included in the expenses in the budget of the specific project are divided, and the proportion of grantdivision needs to be reviewed on each balance sheet day and changed if necessary. (2) In government documents,if the purpose is expressed only in general terms and no specific project is specified, the grant shall be regarded asa government grant related to the income. Where a government grant is a monetary asset, it shall be measuredaccording to the amount received or receivable. If the government grants are non-monetary assets, they shall bemeasured at the fair value; if the fair value cannot be obtained reliably, they shall be measured at the nominal amount.Government grants measured in nominal amounts shall be recognized directly in current profits and losses.The Company usually confirms and measures the government grant according to the amount when it is actuallyreceived. However, if there is conclusive evidence at the end of the period that the relevant conditions stipulated inthe financial support policy can be met and the financial support funds are expected to be received, it shall bemeasured according to the amount receivable. Government grants measured in accordance with the amountreceivable shall meet the following conditions at the same time: (1) The amount of the subvention receivable hasbeen confirmed by the authorized government departments, or can be reasonably calculated according to the relevantprovisions of the formally issued financial fund management measures, and there is no significant uncertainty in theamount expected; (2) According to the "Regulations on the Openness of Government Information" that the localfinancial department officially released and in accordance with the provisions of the "Regulations on the Opennessof Government Information," the financial support project and its financial fund management measures should beinclusive (any eligible enterprise can apply for them), rather than being specifically tailored to specific companies;
(3) The relevant grant approval has clearly promised the payment period, and the allocation of the payment isguaranteed by the corresponding budget, so it can be reasonably ensure that it can be received within the prescribedtime limit; (4) Other relevant conditions (if any) to be met in accordance with the specific circumstances of theCompany and the grants.Government grants related to assets are recognized as deferred earnings and are divided into current profitsand losses in a reasonable and systematic way during the service life of the assets concerned. The government grantsrelated to revenue, which are used to compensate for the related cost or loss in the subsequent period, shall berecognized as deferred income, and shall be recognized in profit or loss in the period in which the related costs orlosses are recognized; if it is used to compensate the related costs or losses that has occurred, it shall be directlyrecognized in the current profit and loss.It includes government grants related to both assets and income, and different parts are separately classified
for accounting treatment; if it is difficult to distinguish, the whole is classified as government grants related toincome.Government grants related to the daily activities of the Company shall be included in other income or costdeductions according to the nature of the economic business; government subsidies unrelated to daily activities shallbe included in the non-operating revenues and expenses.When the recognized government grants need to be returned, if there are relevant deferred earnings balances,the book balance of related deferred earnings shall be deducted, and the excess part shall be included in the currentprofits and losses or the book value of assets shall be adjusted, otherwise, the book value of assets shall be directlyincluded in the current profits and losses.The company will obtain preferential policy loans discount in accordance with the finance will be allocated tothe loan bank discount funds and the finance will be directly allocated to the company discount funds in two cases:
(1) If the finance department allocates the discount interest funds to the lending bank, and the lending bankprovides the loan to the Company at the policy preferential interest rate, the Company chooses to conduct accountingtreatment according to the following methods: the loan amount actually received shall be taken as the entry valueof the loan, and the relevant borrowing costs shall be calculated in accordance with the loan principal and the policypreferential interest rate.
(2) If the finance allocates the discount funds directly to the company, the company will offset thecorresponding discount against the relevant borrowing costs.
30. Deferred Income Tax Assets / Deferred Income Tax Liabilities
(1) Current Income Tax
On the balance sheet date, the current income tax liabilities (or assets) formed in the current and previousperiods are measured by the expected amount of income tax payable (or returned) in accordance with the provisionsof the Tax Law. The amount of taxable income on which current income tax expenses are calculated is based on thecorresponding adjustment of pre-tax accounting profits in the reporting period in accordance with the relevant taxlaws.
(2) Deferred Income Tax Assets and Deferred Income Tax Liabilities
The difference between the book value of certain assets and liabilities and their tax basis, and the temporarydifference between the book value of items that are not recognized as assets and liabilities but which can bedetermined as their tax basis according to the tax law, are confirmed by the balance sheet liability method.
Taxable temporary differences which related to the initial recognition of goodwill and the initial recognition ofan asset or liability arising from a transaction that is neither a business combination nor an accounting profit ortaxable income (or deductible loss), relevant deferred income tax liabilities shall not be recognized. In addition, fortaxable temporary differences related to investments in subsidiaries, associates and joint ventures, if the Companyis able to control the turnaround time of temporary differences, and the temporary difference is unlikely to bereversed in the foreseeable future, the related deferred income tax liabilities shall not be recognized. Except for the
above exceptions, the Company recognizes all other deferred income tax liabilities arising from taxable temporarydifferences.Taxable temporary differences which related to the initial recognition of an asset or liability arising from atransaction that is neither a business combination nor an accounting profit or taxable income (or deductible loss),relevant deferred income tax liabilities shall not be recognized. In addition, for taxable temporary differences relatedto investments in subsidiaries, associates and joint ventures, if the temporary difference is unlikely to be reversedin the foreseeable future, or the amount of taxable income used to offset the temporary difference is unlikely to beobtained in the future, 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 temporary differences, subjectto the amount of taxable income that is likely to be obtained to offset temporary differences.For deductible losses and tax credits that can be carried forward in subsequent years, the correspondingdeferred income tax assets are recognized to the extent that it is probable that the future taxable income shall beused to offset the deductible losses and tax credits.On the balance sheet date, the deferred income tax assets and deferred income tax liabilities shall be measuredat the applicable tax rates in the period in which the related assets are recovered or the related liabilities are recoveredin accordance with the tax laws.On the balance sheet date, the book value of deferred income tax assets is reviewed. and the book value ofdeferred income tax assets is written down if it is likely that sufficient taxable income will not be available to offsetthe benefits of deferred income tax assets in the future. When it is possible to obtain sufficient taxable income, theamount written down shall be reversed.
(3) Income tax expenses
Income tax expenses include current income tax and deferred income tax.In addition to recognizing that the current income tax and deferred income tax related to other transactions andmatters directly included in shareholder's rights and interests shall be recognized in other comprehensive income orshareholder's rights and interests, and the book value of adjusted goodwill from deferred income tax resulting fromthe merger of enterprises, the other current income tax and deferred income tax expenses or gains shall be recognizedin profit or loss for the current period.
(4) Offset of Income Tax
When the company has legal rights to settle on a net basis, and intends to settle on a net basis or acquire assetsand pay off liabilities at the same time, the company's current income tax assets and current income tax liabilitiesshall be presented on a net basis after the offset.When it has the legal right to settle current income tax assets and current income tax liabilities on a net basis,and deferred income tax assets and deferred income tax liabilities are related to the income tax levied by the sametax administration department on the same tax payer or to different tax payers, but in the future, during eachimportant period of deferred income tax assets and liabilities being reversed, the taxpayer involved intends to settle
the current income tax assets and liabilities on a net basis, or acquire assets and pay off liabilities simultaneously,the deferred the income tax assets and deferred income tax liabilities of the Company shall be presented on a netbasis after offset.
31. Lease
On the commencement date of a contract, an enterprise shall assess whether the contract is a lease or includesa lease. Where a party to a contract transfers the right to control the use of one or more identified assets for a certainperiod of time in return for consideration, the contract is a lease or includes a lease. To determine whether the rightto control the use of identified assets within a certain period of time under a contract has been transferred, anenterprise shall assess whether a client in the contract has the right to use almost all of the economic benefits arisingfrom the use of the identified assets during the period of use, and has the right to dominate the use of identifiedassets during this period of use.Where a contract concurrently contains multiple separate leases, the lessee and lessor shall split the contractand conduct accounting treatment respectively for all separate leases.Where the following conditions are concurrently met, use of the rights of identified assets shall constitute aseparate lease in a contract:
②A lessee may earn profits from separate use of the assets or joint use with other resources readily available.
②There is no high dependence or high correlation between the assets and other assets in the contract.
Where a contract concurrently includes both leased and non-leased parts, the Company, as the lessee and lessor,shall split the leased and non-leased parts to conduct accounting treatment.
(1) The Company records operating lease business as a lessee.
The main types of leased assets of the company include houses and buildings, transportation equipment andland use rights etc.
1)Initial measurement
At the beginning of the lease period, the Company recognizes its right to use the leased assets during the leaseperiod as a right-of-use asset, recognition of the present value of outstanding lease payments as lease liabilities,except short-term and low-value asset leases. In calculating the present value of the lease payment, the Companyuses the interest rate included in the lease as the discount rate. Where the interest rate included in the lease cannotbe determined, the Company uses the incremental borrowing rate as the discount rate
The lease period is the irrevocable period during which the Company is entitled to use the lease assets. Wherethe Company has the option to renew the lease, that is, the right to choose to renew the lease of the asset, andreasonably determines that the option will be exercised, The lease period also includes the period covered by thelease renewal option. The Company has the option to terminate the lease, that is, the right to terminate the lease ofthe asset, Provided that it is reasonably determined that the option will not be exercised, the lease period includesthe period covered by the option to terminate the lease. Where a material event or change within the control of the
Company occurs and affects whether the Company reasonably determines that the appropriate option will beexercised... The Company will determine to exercise the option of renewing the lease, re-evaluation of the optionto purchase or not to exercise the option to terminate the leas on its reasonability.
2)Subsequent measurement
The Company adopts the straight-line method to depreciate the right to use assets. Where it is reasonable todetermine that the leased assets are to be owned upon expiry of the lease term, the Company shall calculate theleased assets within the remaining useful life of the leased assets. If the ownership of the leased assets upon expiryof the lease term is unable to be reasonably determined, the Company shall accrue depreciation within a short periodof time between the lease term and the remaining useful life of the leased assets. The interest expenses of the leaseliabilities for each period of the lease term at the discount rate is recognized by the Company and shall be includedinto the current profit or loss. Variable lease payments that are not included in the leasehold liability measure areincluded in the current profit and loss at the time of actual incurrence.After commencement of the lease period, when there is a change in the amount of substantial fixed paymentsand the amount due to which the guarantee balance is expected, changes in indices or ratios used to determine rentalpayments, where the assessment of purchase options, the renewal option or termination option or actual exercise ofthe option changes, the Company re-measures the lease liabilities according to the present value of the change inlease payments, and adjust the book value of the right to use assets accordingly. If the book value of the right to useassets has been reduced to zero, but the lease liability still needs to be further reduced, the Company will record theremaining amount in the current profit or loss.
3)Lease change
Lease modification refers to the modification of the lease scope, lease consideration and lease term beyond theterms of the original contract, including increasing or terminating the right to use one or more leased assets,extending or shortening the lease term specified in the contract, etc.
If the lease changes and the following conditions are met, the Company will account for the lease change as aseparate lease:
② The lease change expands the scope of the lease by adding the right to use one or more leased assets;
② The increased consideration is equivalent to the separate price for the extended portion of the lease, adjustedfor the circumstances of the contract.
If the lease change is not accounted for as a separate lease, on the effective date of the lease change, theCompany redetermines the lease term and discounts the changed lease payment at the revised discount rate toremeasure the lease liability. In calculating the present value of the lease payment after the change, the Companyuses the inherent interest rate of the lease during the remaining lease term as the discount rate; If the inherent interestrate of the lease for the remaining lease term cannot be determined, the Company's incremental borrowing rate onthe effective date of the lease change shall be used as the discount rate.
The Company accounts for the impact of the above adjustment of lease liabilities in the following cases:
② If the lease change results in the reduction of the lease scope or the shortening of the lease term, the Companyshall reduce the book value of the right of use assets to reflect the partial or complete termination of the lease. TheCompany recognises gains or losses related to partial or complete termination of the lease in profit or loss for thecurrent period.
② For other lease changes, the company shall adjust the book value of the right to use assets accordingly
4)Short-term leases and leases of low value assets
The Company will consider a lease for a period not exceeding 12 months and excluding a purchase option asa short-term lease on the commencement date of the lease term; A lease with a lower value when a single leasedasset is a new asset is identified as a low-value asset lease. Where the Company subleases or intends to subleaseleased assets, the original lease is not deemed to be a low-value asset lease. The relevant asset cost or current profitor loss is recognised on a straight-line basis during each period of the lease term, and the contingent rent isrecognised in current profit or loss when actually incurred
(2) The company records operating lease business as a lessor
The lease commencement date essentially transfers almost all the risks and rewards associated with theownership of the leased asset to finance leases, and all other leases are operating leases
1) Operating lease
The rental income of operating lease shall be recognized as current profit and loss according to the straight-line method during each period of the lease period. The larger initial direct expenses are capitalized when occurring,and the profits and losses of the current period shall be recorded in stages on the same basis as the recognized rentalincome during the whole lease period; the smaller initial direct expenses shall be recorded in the profits and lossesof the current period when occurring. Contingent rentals shall be included in current profits and losses when actuallyoccurring.
2) Finance lease
At the beginning date of the lease term, the Company recognizes the financial lease payment receivable for thefinancial lease and terminates the recognition of the financial lease assets. When the Company makes the initialmeasurement of the financial lease receivable, the net lease investment is taken as the recorded value of the financiallease receivable. The net lease investment is the sum of the unsecured balance and the present value of the leaseproceeds not yet received at the commencement date of the lease term, discounted at the intrinsic interest rate of thelease. The Company calculates and recognizes interest income for each period of the lease term based on the inherentinterest rate of the lease.
The Company presents financial lease receivables as long-term receivables, and financial lease receivablesreceived within one year (including one year) from the balance sheet date are presented as non-current assetsmaturing within one year.
32. Other important accounting policies and accounting estimates
(1) Hedge accounting
In order to avoid some risks, the Company hedges some financial instruments as hedging instruments. For thehedges meeting the specified conditions, the Company adopts the hedge accounting method for treatment. Thehedging of the Company is fair value hedging.At the beginning of hedging, the Company formally designates hedging instruments and hedged items, andprepares written documents on hedging relationship and risk management strategy and risk management objectivesof the Company engaged in hedging. In addition, the Company will continuously evaluate the effectiveness ofhedging at the beginning and after the hedging.
(2) Fair value hedging
If a hedging instrument is designated as a fair value hedge and meets the conditions, the profits or losses arisingtherefrom shall be included into the current profits and losses. If the hedging instrument hedges the non-tradingequity instrument investment (or its components) that is measured at fair value and whose changes are included inother comprehensive income, the gains and losses generated by the hedging instrument are included in othercomprehensive income. The profit or loss of the hedged item due to the hedged risk exposure shall be included intothe current profits and losses, and the book value of the hedged item shall be adjusted at the same time. If the hedgeditem is measured at fair value, the gain or loss of the hedged item due to the hedged risk does not need to adjust thebook value of the hedged item, and the relevant gains and losses are included into the current profits and losses orother comprehensive income.
When the Company cancels the designation of the hedging relationship, the hedging instrument has expired orbeen sold, the contract has been terminated or exercised, or no longer meets the conditions for the application ofhedge accounting, the application of hedge accounting shall be terminated.
33. Significant accounting judgments and estimates
There is no significant change on the accounting judgments and estimates.
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 provisions of the Tax Law is the taxable value-added tax. | 1%、3%、5%、6%、9%、10%、13% |
| Urban Maintenance & Construction Tax | According to the actual value-added tax | 7%、5% |
| Extra charges of education funds | According to the actual value-added tax | 3% |
| Local Extra Charges of Education Funds | According to the actual value-added tax | 2% |
| Types | Tax Basis | Tax Rate |
| Corporate Taxes | According to taxable income | 25%、20%、17%、15% |
| 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% |
Representation on tax payers of different enterprise income tax rates:
| Tax Payers | Income Tax Rate |
| Hangzhou Lin'an Chunmanyuan Agricultural Development Co., Ltd. Jingliang (Beijing) Food Marketing Management Co., Ltd. | 20% |
| Jingliang (Singapore) International Trade Co., Ltd. | 17% |
| Beijing Guchuan Bread Food Co., Ltd. | 15% |
2. Preferential tax
Beijing Guchuan Bread Food Co., Ltd., a grade-3 subsidiary of the Company, is a high-tech enterprise. It enjoysthe preferential tax policy of paying enterprise income tax at the 15% tax rate according to the relevant provisionsof both “Law of the People's Republic of China on Tax Collection and Administration” and “Rules for theImplementation of the Tax Collection and Administration Law of the People's Republic of China”. It obtained thecertificate of high-tech enterprise No. GR202111000657, valid until September 14, 2024. According to theAnnouncement of the General Administration of Taxation of the Ministry of Finance on the Policy of Value-addedTax Deduction for Advanced Manufacturing Enterprises, Announcement No. 43 of 2023, from January 1, 2023 toDecember 31, 2027, advanced manufacturing enterprises are allowed to deduct 5% of the value-added tax payablein accordance with the current deductible input tax.Jingliang (Singapore) International Trade Co., Ltd., a grade-3 subsidiary of the Company, levies taxes on theprinciple of territoriality. The company is taxed on the territoriality principle. According to Singapore's preferentialtax policy, the company enjoys tax exemption plan is as follows: for the first SGD$10,000 of taxable income amountthe taxable income amount shall be reduced by SGD$7,500; for the portion between SGD$10,001 andSGD$200,000, the taxable income amount shall be reduced by SGD$95,000; For the portion exceedingSGD$200,001, the taxable income amount shall not be reduced. The company shall pay income tax at the rate of17% on the taxable income amount after exemption.
In accordance with the relevant provisions of Ministry of Finance and State Administration of Taxation “Noticeon Preferential Enterprise Income Tax Policies for Employment of Persons with Disabilities”(Cai Shui[2009]No.70), the grade-3 subsidiary Zhejiang Xiao Wang Zi Food Co., Ltd., the grade-4 subsidiary Hangzhou Lin’anXiaotianshi Food Co., Ltd., Linqing Xiao Wang Zi Food Co., Ltd., and Liaoning Xiao Wang Zi Food Co., Ltd.,:
Where an enterprise employs persons with disabilities, on the basis of deduction according to the wages paid to thedisabled workers, it may deduct the amount of taxable income according to 100% of the wages paid to the disabledworkers.
Hangzhou Lin’an Xiaotianshi Food Co., Ltd., a grade-4 subsidiary company of the Company, is a welfare
enterprise. Since May 2016, it has enjoyed the preferential VAT policy of immediate refund upon payment inPreferential Value-Added Tax Policies for Promoting the Employment of Disabled Persons (CaiShui [2016] No.52).The grade-4 subsidiary-Liaoning Xiao Wang ZiFood Co., Ltd., according to the Supplementary Announcementon Land Use Tax issued by Ministry of Finance and State Administration of Taxation (89) GSDZ No.140 Clause 13states that public land such as municipal street, square, public green etc. can be exempted from land use tax, whencomputing land use tax, the area used in the computation is total area less the area for afforest and street.The grade-2 subsidiary, Jingliang (Beijing) Food Marketing Management Co., Ltd. and the grade-4 subsidiaryHangzhou Lin’an Chunmanyuan Agricultural Development Co., Ltd., are applicable to the Announcement onPreferential Income Tax Policies for Small and Micro Enterprises and Individual Industrial and CommercialHouseholds, the State Administration of Taxation Announcement No. 6, 2023, the Company meets the conditionsfor identification of small and micro enterprises, and the applicable preferential policies for 2024 are as follows:
"The part of the annual taxable income of small, low-profit enterprises not exceeding 1 million yuan shall beincluded in the taxable income amount at a reduced rate of 25%, and the enterprise income tax shall be paid at a taxrate of 20%."
The grade-2 subsidiary, Jingliang (Beijing) Food Marketing Management Co., Ltd. and Hangzhou Lin’anChunmanyuan Agricultural Development Co., Ltd., are applicable to the fiscal and tax No.12 [2023] issued by theState Administration of Taxation of the Ministry of Finance on the Further Supporting the Development of Microand Small Enterprises and Individual Industrial and Commercial Households (No. 12 [2023],. The company meetsthe requirements for identification as a small and micro enterprise, and the preferential policies applicable in 2024are as follows: "For small-scale VAT taxpayers, small and low-profit enterprises and individual industrial andcommercial households, resource tax (excluding water resource taxation), urban maintenance and construction tax,property tax, urban land use tax, stamp tax (excluding stamp tax on securities transactions), cultivated landoccupation tax, education fee surcharge and local education surcharge may be reduced within the 50% tax range.V. Notes on Items in Consolidated Financial StatementsNote: The ‘Opening Balance’ of the period refers to December 31, 2023 and the ‘Closing Balance’ of the periodrefers to June 30, 2024. The prior period refers to January 1, 2023 to June 30, 2023, and the current period refers toJanuary 1, 2024 to June 30, 2024. The currency unit is RMB Yuan.
1.Monetary funds
| Items | Closing Balance | Opening Balance |
| Cash on hand | 16,474.45 | 9,949.26 |
| Bank Deposits | 554,008,559.84 | 533,387,412.58 |
| Other Currency Funds | 95,067,211.84 | 119,931,760.14 |
| Deposit in the Financial Company | 532,305,996.27 | 890,056,629.88 |
| Total | 1,181,398,242.40 | 1,543,385,751.86 |
| Among them: the total amount of money deposited abroad | 22,458,482.24 | 3,113,810.75 |
2.Derivative financial assets
| Items | Closing Balance | Opening Balance |
| Hedging instrument floating profit and loss | 31,223,815.72 | 31,684,620.00 |
| Total | 31,223,815.72 | 31,684,620.00 |
3.Accounts Receivable
(1) Disclosed according to aging
| Aging | Closing Balance | Opening Balance |
| Within 1 Year (including 1 year) | 90,220,633.63 | 96,507,223.82 |
| 1 to 2 years (including 2 years) | 752,867.27 | 762,767.27 |
| 2 to 3 years (including 3 years) | 18,497,856.00 | 18,497,856.00 |
| 3 to 4 years (including 4 years) | 7,499,480.04 | 7,499,480.04 |
| 4 to 5 years (including 5 years) | ||
| More than 5 years | 328,259.50 | 328,259.50 |
| Total | 117,299,096.44 | 123,595,586.63 |
(2) Present according to the method of provision for bad debt
| Type(s) | Closing Balance | ||||
| Book Balance | Bad Debt Provision | Book Value | |||
| Amount | Ratio(%) | Amount | Provision Ratio(%) | ||
| Separate provision for bad debts | 328,259.50 | 0.28 | 328,259.50 | 100.00 | |
| Portfolio provision for bad debts | 116,970,836.94 | 99.72 | 7,486,954.58 | 6.40 | 109,483,882.36 |
| Total | 117,299,096.44 | —— | 7,815,214.08 | —— | 109,483,882.36 |
（Continued）
| Type(s) | Opening Balance | ||||
| Book Balance | Bad Debt Provision | Book Value | |||
| Amount | Ratio(%) | Provision Ratio(%) | |||
| Separate provision for bad debts | 328,259.50 | 0.27 | 328,259.50 | 100.00 | |
| Portfolio provision for bad debts | 123,267,327.13 | 99.73 | 7,486,954.58 | 6.07 | 115,780,372.55 |
| Total | 123,595,586.63 | 7,815,214.08 | 115,780,372.55 | ||
A. Separate provision for bad debts
| Name | Closing Balance | |||
| Accounts Receivable | Bad Debt Provision | Provision Ratio | Provision Reason | |
| Fujian Jingxin Industrial Group Co., Ltd | 151,844.00 | 151,844.00 | 100.00 | expected unrecoverable |
| Beijing Guotai Pingan Tianzhu Commercial Development Co., Ltd. | 1,809.60 | 1,809.60 | 100.00 | expected unrecoverable |
| Beijing Rongfa Lida Grain and Oil Trade Co., Ltd. | 163,143.00 | 163,143.00 | 100.00 | expected unrecoverable |
| Beijing Guotai Pingan Department Store Co., Ltd | 10,862.90 | 10,862.90 | 100.00 | expected unrecoverable |
| Beijing Shunyi Longhua Shopping Mall | 600.00 | 600.00 | 100.00 | expected unrecoverable |
| Total | 328,259.50 | 328,259.50 | —— | —— |
B. Portfolio provision for bad debtsPortfolio provision Items are as follows:
| Name | Closing Balance | ||
| Accounts receivable | Bad Debt Provision | Provision Ratio | |
| Credit Risk Portfolio | 116,970,836.94 | 7,486,954.58 | 6.40 |
| Total | 116,970,836.94 | 7,486,954.58 | 6.40 |
（Continued）
| Name | Opening Balance | ||
| Accounts receivable | Bad Debt Provision | Provision Ratio | |
| Credit Risk Portfolio | 123,267,327.13 | 7,486,954.58 | 6.07 |
| Total | 123,267,327.13 | 7,486,954.58 | 6.07 |
(3) details of bad debt provision
| Items | Opening Balance | The amount changed for the period | Closing Balance | |||
| Addition | Withdrawal or reversal | Write-off | Other changes | |||
| Bad debt provision on individual basis | 328,259.50 | 328,259.50 | ||||
| Credit risk profile portfolio | 7,486,954.58 | 7,486,954.58 | ||||
| Total | 7,815,214.08 | 7,815,214.08 | ||||
(4) Accounts Receivable of the Top 5 Balances Collected by Debtors and contractual assets situations at theEnd of the Period
| Name of Entity | Accounts receivable | Contract Assets Ending Balance | Ending Balance of Receivables and Contract Assets | Proportion of Ending Balance of Receivables and Contract Assets（%） | Bad Debt Provision |
| Tangshan Caofeidian District Finance Bureau | 25,997,336.04 | 25,997,336.04 | 22.16 | 7,449,311.22 | |
| Wuhan National Rice Trading Center Co., Ltd. | 25,689,600.00 | 25,689,600.00 | 21.90 | ||
| Hebei Luanping Huadu Food Co., Ltd | 13,145,439.04 | 13,145,439.04 | 11.21 | ||
| Zhejiang Lvqin Supply Chain Management Co., Ltd | 8,717,018.25 | 8,717,018.25 | 7.43 | ||
| C.P. Raw Material Supply Co., Ltd. | 4,507,632.84 | 4,507,632.84 | 3.84 | ||
| Total | 78,057,026.17 | 78,057,026.17 | 66.54 | 7,449,311.22 |
4.Accounts receivable Financing
(1) Presented and sorted by category
| Item | Closing Balance | Opening Balance |
| Notes receivable | 2,442,328.82 | 2,502,308.90 |
| Total | 2,442,328.82 | 2,502,308.90 |
(2) The ending notes receivable that have been endorsed or discounted and not expired on balance sheet date
| Item | Amount derecognized as at the end of the reporting period | Amount not derecognized as at the end of the reporting period. |
| Banker's Acceptance | 1,307,900.00 | |
| Total | 1,307,900.00 |
5.Advanced Payment
(1) Advances are presented by age
| Aging | Closing Balance | Opening Balance | ||
| Amount | Ratio(%) | Amount | Ratio(%) | |
| Within 1 year (including 1 year) | 267,344,829.04 | 100.00 | 87,352,234.48 | 100.00 |
| Total | 267,344,829.04 | 100.00 | 87,352,234.48 | 100.00 |
(2) Advance payment of the top five Closing Balances by prepaid objects
| Debtor Name | Closing Balance | Ratio of the total Closing Balance of prepayments (%) |
| Tianjin Lingang Customs of the People's Republic of China | 63,996,755.07 | 23.94 |
| Bangji (Dongguan) Grain and Oil Co., Ltd. | 40,184,621.14 | 15.03 |
| Jiangsu Jianghai Grease & Oil Group Co. Ltd. | 28,767,869.40 | 10.76 |
| Debtor Name | Closing Balance | Ratio of the total Closing Balance of prepayments (%) |
| Xiamen ITG Agricultural Products Co., Ltd. | 23,464,521.74 | 8.78 |
| SINOGRAIN OILS Corporation | 21,163,895.76 | 7.92 |
| Total | 177,577,663.11 | 66.43 |
6.Other Receivables
| Item(s) | Closing Balance | Opening Balance |
| Other Receivables | 386,904,030.80 | 303,099,589.59 |
| Total | 386,904,030.80 | 303,099,589.59 |
(1) Other Receivables
A. Disclosed according to aging
| Aging | Closing Balance | Opening Balance |
| Within 1 Year (including 1 year) | 385,104,921.29 | 301,234,542.67 |
| 1 to 2 years (including 2 years) | 490,899.52 | 641,412.67 |
| 2 to 3 years (including 3 years) | 216,525.79 | 144,888.00 |
| 3 to 4 years (including 4 years) | 417,658.21 | 459,888.00 |
| 4 to 5 years (including 5 years) | 92,026.00 | 88,638.00 |
| More than 5 years | 581,999.99 | 531,999.99 |
| Total | 386,904,030.80 | 303,101,369.33 |
B. Classification of other receivables by nature of funds
| Nature of Funds | Book Balance at End of Period | Book Balance at Beginning of Year |
| Deposit and Guaranteed Deposit | 382,297,330.22 | 301,372,189.38 |
| Intercourse Funds of Units | 2,128,121.60 | 502,432.60 |
| Employee Receivables | 962,353.24 | 840,868.84 |
| Tax Refund Receivables | 1,182,669.16 | |
| Others | 333,556.58 | 385,878.51 |
| Total | 386,904,030.80 | 303,101,369.33 |
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 2024 | 1,779.74 | 1,779.74 |
| 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) | ||
| Carrying amount on 1st January 2024 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 | -1,779.74 | -1,779.74 | ||
| Reverse for the period | ||||
| Transfer for the period | ||||
| Write off for the period | ||||
| Other changes | ||||
| Amount on June 30th, 2024 |
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 Risk Portfolio | 1,779.74 | -1,779.74 | ||||
| Total | 1,779.74 | -1,779.74 | ||||
E. Other receivables according to top five of balance at end of period collected by debtors
| Name of Organization | Balance at End of Period | Proportion in overall Closing Balance of other receivables (%) | Nature of Funds | Aging | Closing Balance of bad debt reserves |
| Zhongtian Futures Co. Ltd | 114,029,471.85 | 29.47 | Guaranteed Deposit | Within 1 year | |
| CITIC Futures Co., Ltd. | 89,893,896.44 | 23.23 | Guaranteed Deposit | Within 1 year | |
| China Grain Storage and Transportation Co., Ltd. | 80,283,920.00 | 20.75 | Guaranteed Deposit | Within 1 year | |
| Haitong Futures Co., Ltd | 40,716,550.69 | 10.52 | Guaranteed Deposit | Within 1 year | |
| Beijing Capital Futures Co., Ltd | 25,761,664.50 | 6.66 | Guaranteed Deposit | Within 1 year | |
| Total | 350,685,503.48 | 90.64 |
7.Inventory
(1) Inventory Category
| Items | Closing Balance | ||
| Book Balance | Inventory Falling Price Reserves/ Provision for impairment of contract performance cost. | Book Value | |
| Raw Materials | 272,754,976.75 | 23,955.82 | 272,731,020.93 |
| Inventory goods | 1,085,540,832.20 | 170,341.46 | 1,085,370,490.74 |
| Revolving Materials | 4,976,986.93 | 4,976,986.93 | |
| Goods and materials in transit | 823,783,094.37 | 823,783,094.37 | |
| Total | 2,187,055,890.25 | 194,297.28 | 2,186,861,592.97 |
（Continued）
| Items | Opening Balance | ||
| Book Balance | Inventory Falling Price Reserves/ Provision for impairment of contract performance cost. | Book Value | |
| Raw Materials | 324,815,755.86 | 82,063.38 | 324,733,692.48 |
| Inventory goods | 1,122,785,703.06 | 1,743,754.31 | 1,121,041,948.75 |
| Revolving Materials | 5,049,542.63 | 5,049,542.63 | |
| Goods and materials in transit | 591,034,959.25 | 591,034,959.25 | |
| Total | 2,043,685,960.80 | 1,825,817.69 | 2,041,860,143.11 |
(2) Inventory Falling Price Reserves and provision for impairment of contract performance costs
| Items | Balance at Beginning of Year | Increased Amounts in the Current Period | |
| Accrual | Others | ||
| Raw material | 82,063.38 | ||
| Inventory Goods | 1,743,754.31 | ||
| In total | 1,825,817.69 | ||
(Continued)
| Items | Decreased Amounts in the Current Period | Balance at End of Period | |
| Recover or Charge Off | Others | ||
| Raw material | 58,107.56 | 23,955.82 | |
| Inventory Goods | 1,573,412.85 | 170,341.46 | |
| In total | 1,631,520.41 | 194,297.28 | |
(3) Inventory Goods listed by major product type
| Items | Closing Balance | ||
| Book Balance | Falling Price Reserves | Book Value | |
| Grease and oils | 1,069,557,817.71 | 170,341.46 | 1,069,387,476.25 |
| Food | 15,983,014.49 | 15,983,014.49 | |
| Total | 1,085,540,832.20 | 170,341.46 | 1,085,370,490.74 |
(Continued)
| Items | Opening Balance | ||
| Book Balance | Falling Price Reserves | Book Value | |
| Grease and oils | 1,097,527,087.36 | 1,598,094.34 | 1,095,928,993.02 |
| Food | 25,258,615.70 | 145,659.97 | 25,112,955.73 |
| Total | 1,122,785,703.06 | 1,743,754.31 | 1,121,041,948.75 |
8.Non-current assets due within one year
| Items | Balance at End of Period | Balance at Beginning of Period |
| One-year term deposits | 22,188,083.34 | |
| In total | 22,188,083.34 |
9.Other Current Assets
| Items | Balance at End of Period | Balance at Beginning of Period |
| Pending Deduct VAT Input Tax | 52,271,021.82 | 57,549,582.61 |
| Pre-paid Taxes and Fees | 37,642,598.24 | 16,226,031.95 |
| Input Tax to Be Certified | 42,301.32 | 202,103.63 |
| Fair Value Changes of Items Trapped at Hedging | 330,613,399.83 | 238,358,924.24 |
| In total | 420,569,321.21 | 312,336,642.43 |
10.Long-term Equity Investment
Details
| Invested Entity | Balance at Beginning of Year | Increase or Decrease in the Current Period | ||||
| Additional Investment | Negative Investment | Confirmed Profit and Loss on Investment under Equity Method | Adjustment of other comprehensive income | Other changes in equity | ||
| 1. Cooperative Enterprise | 128,393,543.26 | 2,313,991.99 | ||||
| Beijing CHIA TAI Feedmill Co. ,Limited | 128,393,543.26 | 2,313,991.99 | ||||
| Sub-total | 128,393,543.26 | 2,313,991.99 | ||||
| 2. Joint Venture | 126,529,102.15 | 8,561,434.89 | ||||
| China Grain Reserves (Tianjin) Warehouse Logistics Co., Ltd. | 120,176,935.53 | 8,606,185.99 | ||||
| Jingliang Missme Catering Management (Beijing) Co., Ltd. | 6,352,166.62 | -44,751.10 | ||||
| Sub-total | 126,529,102.15 | 8,561,434.89 | ||||
| Total | 254,922,645.41 | 10,875,426.88 |
(Continued)
| invested entity | Increase or Decrease in the Current Period | Balance at End of Period | Closing Balance of Impairment Reserves | ||
| Announce to Distribute Case Dividends or Profits | Accrual of Impairment Reserves | Others | |||
| 1. Cooperative Enterprise | 130,707,535.25 | ||||
| Beijing CHIA TAI Feedmill Co. ,Limited | 130,707,535.25 | ||||
| Sub-total | 130,707,535.25 | ||||
| 2. Joint Venture | 135,090,537.04 | ||||
| China Grain Reserves (Tianjin) Warehouse Logistics Co., Ltd. | 128,783,121.52 | ||||
| Jingliang Missme Catering Management (Beijing) Co., Ltd. | 6,307,415.52 | ||||
| Sub-total | 135,090,537.04 | ||||
| Total | 265,798,072.29 | ||||
11.Other equity instruments investment
Details
| Item | Opening Balance | Changes in the Current Period | Closing Balance | ||||
| Additional Investment | Disinvestment | Profits included in other comprehensive income in the current period. | Losses included in other comprehensive income in the current period. | Others | |||
| Chongqing long jinbao network technology Co. | 20,000,000.00 | 20,000,000.00 | |||||
| LTD | |||||||
| Total | 20,000,000.00 | 20,000,000.00 |
(Continued)
| Item | Dividend revenue recognized in current period | . Accumulated profit recognized in other comprehensive income | . Accumulated losses recognized in other comprehensive income | Designated at Fair Value Measurement and Reasons on Changes included in Other Comprehensive Income |
| Chongqing long jinbao network technology Co. LTD | Non-trading equity instrument | |||
| Total | / |
12.Investment Real Estate
(1) Investment Real Estate Adopting Cost Measurement Model
| Items | Buildings | Land Use Right | Total |
| One. Original Book Value | |||
| 1.Balance at Beginning of Year | 62,845,234.00 | 576,510.00 | 63,421,744.00 |
| 2.Increased Amounts in the Current Period | |||
| —Inventory\Fixed Assets Construction in progress transferred into | |||
| 3.Decreased Amounts in the Current Period | |||
| —Business Combination Decrease | |||
| 4.Balance at End of Period | 62,845,234.00 | 576,510.00 | 63,421,744.00 |
| Two. Accumulated Impairment and Accumulated Amortization | |||
| 1. Balance at Beginning of Year | 32,579,939.08 | 208,504.45 | 32,788,443.53 |
| 2. Increased Amounts in the Current Period | 987,930.66 | 5,765.10 | 993,695.76 |
| —Accrual or Amortization | 987,930.66 | 5,765.10 | 993,695.76 |
| —Others | |||
| 3. Decreased Amounts in the Current Period | |||
| —Business Combination Decrease | |||
| 4. Balance at End of Period | 33,567,869.74 | 214,269.55 | 33,782,139.29 |
| Three. Impairment Reserves | |||
| 1. Balance at Beginning of Year | 10,587,796.70 | 10,587,796.70 | |
| 2. Balance at End of Period | 10,587,796.70 | 10,587,796.70 | |
| Four. Book Value |
| 1. Book Value at End of Period | 18,689,567.56 | 362,240.45 | 19,051,808.01 |
| 2. Book Value at Beginning of Year | 19,677,498.22 | 368,005.55 | 20,045,503.77 |
13.Fixed Assets
| Items | Balance at End of Period | Balance at Beginning of Period |
| Fixed Assets | 917,556,139.25 | 939,548,012.91 |
| Disposal of Fixed Assets | ||
| In total | 917,556,139.25 | 939,548,012.91 |
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 | 1,064,558,047.21 | 795,460,322.57 | 20,074,431.07 | 14,133,767.59 | 7,545,793.53 | 1,385,077.43 | 1,903,157,439.40 |
| 2. Increased Amounts in the Current Period | 1,216,887.26 | 23,443,233.90 | 812,127.60 | 276,319.61 | 174,321.05 | 25,922,889.42 | |
| (1) Purchase | 91,284.40 | 2,884,547.80 | 812,127.60 | 242,458.23 | 98,214.86 | 4,128,632.89 | |
| (2) Roll-in of Project under Construction | 1,125,602.86 | 20,558,686.10 | 33,861.38 | 76,106.19 | 21,794,256.53 | ||
| 3. Decreased Amounts in the Current Period | 1,699,296.90 | 1,553,250.61 | 267,996.51 | 3,260.00 | 3,523,804.02 | ||
| (1) Disposal or Scrap | 1,699,296.90 | 1,553,250.61 | 267,996.51 | 3,260.00 | 3,523,804.02 | ||
| Decrease on Business Combination Scope | |||||||
| Other transferred out | |||||||
| 4. Balance at End of Period | 1,065,774,934.47 | 817,204,259.57 | 19,333,308.06 | 14,142,090.69 | 7,716,854.58 | 1,385,077.43 | 1,925,556,524.80 |
| Two. Accumulated Impairment | |||||||
| 1. Balance at Beginning of Year | 440,697,875.26 | 487,687,828.69 | 11,852,350.93 | 9,595,147.99 | 4,305,164.06 | 350,995.94 | 954,489,362.87 |
| 2. Increased Amounts in the Current Period | 18,983,479.38 | 26,195,647.62 | 930,855.08 | 651,955.82 | 387,431.11 | 34,300.59 | 47,183,669.60 |
| (1) Accrual | 18,983,479.38 | 26,195,647.62 | 930,855.08 | 651,955.82 | 387,431.11 | 34,300.59 | 47,183,669.60 |
| 3. Decreased Amounts in the Current Period | 1,059,428.81 | 1,475,588.08 | 254,596.65 | 3,097.00 | 2,792,710.54 | ||
| (1) Disposal or Scrap | 1,059,428.81 | 1,475,588.08 | 254,596.65 | 3,097.00 | 2,792,710.54 | ||
| Decrease on Business Combination Scope | |||||||
| Other transferred out | |||||||
| 4. Balance at End of Period | 459,681,354.64 | 512,824,047.50 | 11,307,617.93 | 9,992,507.16 | 4,689,498.17 | 385,296.53 | 998,880,321.93 |
| Three. Impairment Reserves | |||||||
| 1. Balance at Beginning of Year | 9,047,959.13 | 72,104.49 | 9,120,063.62 | ||||
| 4. Balance at End of Period | 9,047,959.13 | 72,104.49 | 9,120,063.62 | ||||
| Four. Book Value |
| Items | Buildings | Machinery Equipment | Transportation Equipment | Electronic Equipment | Office Equipment | Others | Total |
| 1. Book Value at End of Period | 597,045,620.70 | 304,308,107.58 | 8,025,690.13 | 4,149,583.53 | 3,027,356.41 | 999,780.90 | 917,556,139.25 |
| 2. Book Value at Beginning of Year | 614,812,212.82 | 307,700,389.39 | 8,222,080.14 | 4,538,619.60 | 3,240,629.47 | 1,034,081.49 | 939,548,012.91 |
14.Project under Construction
| Items | Balance at End of Period | Balance at Beginning of Year |
| Project under Construction | 47,201,479.97 | 59,094,902.29 |
| Total | 47,201,479.97 | 59,094,902.29 |
(1) Project under Construction
A. 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 | |
| Caofeidian comprehensive bonded zone feed processing project automation line project | 7,786,834.64 | 7,786,834.64 | 7,773,303.43 | 7,773,303.43 | ||
| Soybean extruding and rumen soybean meal processing project | 24,935,424.20 | 24,935,424.20 | 23,078,937.34 | 23,078,937.34 | ||
| production line of fried potato chips | 8,392,300.91 | 8,392,300.91 | ||||
| Slope treatment project of No.3 plant | 6,969,126.85 | 6,969,126.85 | 6,969,126.85 | 6,969,126.85 | ||
| The 3rd recreation factory baked potato No.5 Flexible Packing Automation Line Transformation Project | 2,556,466.47 | 2,556,466.47 | ||||
| The 1strecreation factory baked potato No.3 Flexible | 2,497,033.51 | 2,497,033.51 | ||||
| Items | Balance at End of Period | Balance at Beginning of Year | ||||
| Book Balance | Impairment Reserves | Book Value | Book Balance | Impairment Reserves | Book Value | |
| Packing Automation Line Transformation Project | ||||||
| The 1st recreation factory baked potato No.4 Flexible Packing Automation Line Transformation Project | 1,619,325.55 | 1,619,325.55 | ||||
| Odor control project | 1,585,321.11 | 1,585,321.11 | 1,585,321.11 | 1,585,321.11 | ||
| The 3rd recreation factory baked potato No.8 Line Oven Transformation Project | 1,240,093.10 | 1,240,093.10 | ||||
| Jingliang Hainan Yang Pu Grease & Oil Processing Project | 1,823,718.65 | 1,823,718.65 | 434,369.04 | 434,369.04 | ||
| Snowcone Workshop Category Expansion Program | 833,714.41 | 833,714.41 | ||||
| Others | 3,267,340.11 | 3,267,340.11 | 2,948,624.98 | 2,948,624.98 | ||
| Total | 47,201,479.97 | 47,201,479.97 | 59,094,902.29 | 59,094,902.29 | ||
B. Change Condition of Important Engineering Projects under Construction in the Current Period
| Project Name | Budget Amount | 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 |
| Caofeidian comprehensive bonded zone feed processing project | 7,184,400.00 | 7,773,303.43 | 13,531.21 | 7,786,834.64 |
| Project Name | Budget Amount | 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 |
| automation line | ||||||
| Soybean extruding and rumen soybean meal processing project | 49,429,300.00 | 23,078,937.34 | 1,856,486.86 | 24,935,424.20 | ||
| Production line of fried potato chips | 9,700,000.00 | 8,392,300.91 | 71,735.48 | 8,464,036.39 | ||
| Slope treatment project of No.3 plant | 17,110,000.00 | 6,969,126.85 | 6,969,126.85 | |||
| Jingliang Hainan Yang Pu Grease & Oil Processing Project | 661,324,100.00 | 434,369.04 | 1,389,349.61 | 1,823,718.65 | ||
| Total | —— | 46,648,037.57 | 3,331,103.16 | 8,464,036.39 | 41,515,104.34 |
(Continued)
| Project Name | Proportion of accumulated input of the project on Budgeted Amount（%） | Progress of the Project | Accumulated Amount of Interest Capitalization | Including: Interest Capitalization Amount occurred in Current Period | Interest Capitalization Rate in the Current Period（%） | Sources of Capital |
| Caofeidian comprehensive bonded zone feed processing project automation line | 108.39 | 99.00% | Equity Fund | |||
| Soybean extruding and rumen soybean meal processing project | 50.45 | 85.00% | Equity Fund | |||
| Production line of fried potato chips | 87.26 | 100.00% | Equity Fund | |||
| Slope treatment project of No.3 plant | 40.73 | 80.00% | Equity Fund | |||
| Jingliang Hainan Yang Pu Grease & Oil Processing Project | 0.28 | 0.28% | Enterprise Self-funded | |||
| Total | —— | —— | —— | —— |
15.Right-of-use Asset
Details
| Items | Buildings | Land Use Right | Transportation Equipment | In total |
| One Original Book Value | ||||
| 1. Balance at Beginning of Year | 121,031,786.76 | 5,648,400.00 | 607,367.22 | 127,287,553.98 |
| 2. Increased Amounts in the Current Period | 2,414,106.37 | 2,414,106.37 | ||
| (1) Lease | 2,414,106.37 | 2,414,106.37 | ||
| 3. Decreased Amounts in the Current Period | 2,098,724.66 | 2,098,724.66 | ||
| (1) Expiration of the lease or change the lease term | 2,098,724.66 | 2,098,724.66 | ||
| 4. Balance at End of Period | 121,347,168.47 | 5,648,400.00 | 607,367.22 | 127,602,935.69 |
| Two Accumulated Depreciation | ||||
| 1. Balance at Beginning of Year | 26,870,944.28 | 1,016,712.00 | 167,593.92 | 28,055,250.20 |
| 2. Increased Amounts in the Current Period | 12,238,164.16 | 56,484.00 | 47,239.26 | 12,341,887.42 |
| (1) Accrual | 12,238,164.16 | 56,484.00 | 47,239.26 | 12,341,887.42 |
| 3. Decreased Amounts in the Current Period | 2,098,724.66 | 2,098,724.66 | ||
| —Disposal | 2,098,724.66 | 2,098,724.66 | ||
| —Other Transferred Out | ||||
| 4. Balance at End of Period | 37,010,383.78 | 1,073,196.00 | 214,833.18 | 38,298,412.96 |
| Three Impairment Reserves | ||||
| Four Book Value | ||||
| 1. Book Value at End of Period | 84,336,784.69 | 4,575,204.00 | 392,534.04 | 89,304,522.73 |
| 2. Book Value at Beginning of Year | 94,160,842.48 | 4,631,688.00 | 439,773.30 | 99,232,303.78 |
16.Intangible Assets
Intangible Assets Situation
| Items | Land Use Right | Software | Trademark Right | In total |
| One Original Book Value | ||||
| 1. Balance at Beginning of Year | 415,718,033.78 | 5,370,415.44 | 154,841,200.00 | 575,929,649.22 |
| 2. Increased Amounts in the Current Period | 17,735.85 | 17,735.85 | ||
| (1) Purchase | 17,735.85 | 17,735.85 | ||
| —Others | ||||
| 3. Decreased Amounts in the Current Period | ||||
| —Business Combination Decrease |
| Items | Land Use Right | Software | Trademark Right | In total |
| —Other Transferred Out | ||||
| 4. Balance at End of Period | 415,718,033.78 | 5,388,151.29 | 154,841,200.00 | 575,947,385.07 |
| Two Accumulated Amortization | ||||
| 1. Balance at Beginning of Year | 79,667,120.07 | 4,408,533.97 | 79,177,149.25 | 163,252,803.29 |
| 2. Increased Amounts in the Current Period | 4,542,322.72 | 129,821.46 | 3,856,962.96 | 8,529,107.14 |
| (1) Accrual | 4,542,322.72 | 129,821.46 | 3,856,962.96 | 8,529,107.14 |
| 3. Decreased Amounts in the Current Period | ||||
| — Business Combination Decrease | ||||
| — Other Transferred Out | ||||
| 4. Balance at End of Period | 84,209,442.79 | 4,538,355.43 | 83,034,112.21 | 171,781,910.43 |
| Three Impairment Reserves | ||||
| Four Book Value | ||||
| 1. Book Value at End of Period | 331,508,590.99 | 849,795.86 | 71,807,087.79 | 404,165,474.64 |
| 2. Book Value at Beginning of Year | 336,050,913.71 | 961,881.47 | 75,664,050.75 | 412,676,845.93 |
17.Goodwill
(1) Original Book Value of Goodwill
| Name of Invested Entity or Items Forming Goodwill | Balance at Beginning of Year | Increase in the Current Period | Decrease in the Current Period | Balance at End of Period |
| Formed by Enterprise Merger | Disposal | |||
| 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
| Name | Composition and Basis of Group of Assets or Group belongs | Operation Segment and Basis belongs | Whether consistent with Prior Period |
| Acquire stock shares of Zhejiang Xiaowangzi Food Co., Ltd. | Group of Assets comprises of Goodwill related assets，the flow-in cash generated shall be independent of those by other group assets. | Assets mainly used food processing, belong to the Food Segment | Yes |
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 | 12,865,755.89 | 337,094.04 | 12,528,661.85 | ||
| Maintenance of leased assets | 2,085,375.43 | 72,650.94 | 2,012,724.49 | ||
| Factory compartment maintenance | 760,612.42 | 49,206.89 | 101,490.12 | 708,329.19 | |
| Housing renovation | 1,943,993.08 | 394,180.68 | 190,355.84 | 2,147,817.92 | |
| Total | 17,655,736.82 | 443,387.57 | 701,590.94 | 17,397,533.45 |
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 | 290,095.28 | 72,523.81 | 1,906,843.70 | 476,710.92 |
| Deductible Loss | 196,701,038.40 | 49,175,259.60 | 190,924,419.06 | 47,731,104.76 |
| Lease liabilities | 84,702,417.52 | 21,175,604.38 | 95,982,927.96 | 23,995,732.00 |
| Credit impairment Loss | 7,777,570.72 | 1,944,392.67 | 7,816,993.82 | 1,954,248.46 |
| Deferred Income | 12,600,638.84 | 3,150,159.71 | 12,600,638.84 | 3,150,159.71 |
| 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 | 12,433,441.20 | 3,108,360.30 | ||
| Rebate on contracts | 1,112,100.00 | 278,025.00 | 1,112,100.00 | 278,025.00 |
| In total | 308,860,994.76 | 77,215,248.67 | 328,454,498.58 | 82,113,624.65 |
(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 of Financial Instruments and Derivative Financial Instruments | 288,957,465.79 | 72,239,366.45 | 252,306,904.70 | 63,076,726.18 |
| Valuation and appreciation of assets in merger of enterprises not under the same | 129,963,606.68 | 32,490,901.67 | 135,119,584.58 | 33,779,896.15 |
| 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 | |
| control | ||||
| Use right assets | 82,325,029.38 | 20,581,257.34 | 94,160,842.48 | 23,540,210.63 |
| Total | 501,246,101.85 | 125,311,525.46 | 481,587,331.76 | 120,396,832.96 |
(3) Details of Deferred Income Tax Liabilities after Offset
| Items | Offset amount of deferred tax assets and liabilities | Carrying amount after offsetting between deferred tax assets and liabilities | offset amount of deferred tax assets and liabilities at the end of last period | Carrying amount after offsetting between deferred tax assets and liabilities at the end of last period |
| Deferred tax asset | 71,762,861.32 | 5,452,387.35 | 73,314,709.43 | 8,798,915.22 |
| Deferred tax liabilities | 71,762,861.32 | 53,548,664.14 | 73,314,709.43 | 47,082,123.53 |
(4) Details of Deferred Income Tax Assets Not Being Confirmed
| Items | Balance at End of Period | Balance at Beginning of Year |
| Deductible temporary differences | 19,626,834.31 | 19,626,834.31 |
| Deductible Loss | 278,526,782.97 | 243,290,588.25 |
| In total | 298,153,617.28 | 262,917,422.56 |
(5) Deductible loss on deferred income tax assets not being confirmed will be due at the following years
| Year | Balance at End of Period | Balance at Beginning of Year |
| 2024 | 28,130,103.97 | 38,012,198.48 |
| 2025 | 25,114,592.05 | 25,114,592.05 |
| 2026 | 37,744,225.64 | 37,744,225.64 |
| 2027 | 62,607,514.09 | 63,628,940.88 |
| 2028 | 78,790,631.20 | 78,790,631.20 |
| 2029 | 46,139,716.02 | |
| Total | 278,526,782.97 | 243,290,588.25 |
20.Other Non-current Assets
| Items | Closing Balance | Opening Balance | ||||
| Book balance | Provision for impairment | Book value | Book balance | Provision for impairment | Book value | |
| software purchase advancement | 3,168,200.00 | 3,168,200.00 | 2,833,950.00 | 2,833,950.00 | ||
| Three-year term deposit | 10,541,666.66 | 10,541,666.66 | 10,390,000.00 | 10,390,000.00 | ||
| Total | 13,709,866.66 | 13,709,866.66 | 13,223,950.00 | 13,223,950.00 |
21.Asset items where the ownership or the right of use is restricted
| Items | Ending Balance | |||
| Book balance | Book value | Restricted type ' | Constraints | |
| Monetary Funds | 11,398,049.13 | 11,398,049.13 | Freezing amount due to lawsuit, Banker's letter of guarantee, deposit, etc. | Freezing amount due to lawsuit, Banker's letter of guarantee, deposit etc. |
| Fixed Assets | 21,719,189.02 | 4,787,783.94 | Freezing amount due to lawsuit | Freezing amount due to lawsuit |
| Investment Real Estates | 19,594,735.46 | 5,027,932.91 | Freezing amount due to lawsuit | Freezing amount due to lawsuit |
| In total | 52,711,973.61 | 21,213,765.98 | / | / |
(Continued)
| Item | Beginning Balance | |||
| Book balance | Book value | Restricted type ' | Constraints | |
| Monetary Funds | 2,746,671.91 | 2,746,671.91 | Banker's letter of guarantee, deposit, etc. | Banker's letter of guarantee, deposit, etc. |
| Fixed Assets | 21,719,189.02 | 4,994,664.88 | Freezing amount due to lawsuit | Freezing amount due to lawsuit |
| Investment Real Estates | 19,594,735.46 | 5,198,514.17 | Freezing amount due to lawsuit | Freezing amount due to lawsuit |
| In total | 44,060,596.39 | 12,939,850.96 | / | / |
22.Short-term Borrowings
Classification of Short-term Borrowings
| Items | Balance at End of Period | Balance at Beginning of Year |
| Debt of honour | 1,036,717,261.11 | 1,163,479,691.67 |
| In total | 1,036,717,261.11 | 1,163,479,691.67 |
23.Derivative financial liability
| Item | Closing Balance | Opening Balance |
| Changes in fair value of hedging instruments | 15,805,393.88 | |
| Total | 15,805,393.88 |
24.Accounts Payable
Accounts Payable Presentation
| Items | Balance at End of Period | Balance at Beginning of Year |
| Material Funds Payable | 54,559,950.19 | 67,912,958.96 |
| Project Funds Payable | 1,312,278.91 | 3,013,449.11 |
| Equipment Funds Payable | 4,266,240.40 | 3,002,660.91 |
| Consultancy Services | 2,563,467.22 | 3,283,467.22 |
| Rental Fee | 1,378,125.00 | 650,000.00 |
| Storage Charge | 5,129,772.80 | 2,752,000.00 |
| Others | 1,397,190.28 | 1,860,287.64 |
| In total | 70,607,024.80 | 82,474,823.84 |
25.Advance payment
Advance payment Presented
| Items | Balance at End of Period | Balance at Beginning of Year |
| Advance collection of rent | 1,800,138.12 | 1,075,801.34 |
| In total | 1,800,138.12 | 1,075,801.34 |
26.Contract liabilities
Classification of contract liabilities
27.Wages Payable
(1) Wages Payable Presented
| Items | Balance at Beginning of Year | Increase in the Current Period | Decrease in the Current Period | Balance at End of Period |
| Short-term Compensation | 30,758,435.00 | 133,390,483.35 | 149,971,192.38 | 14,177,725.97 |
| After-service Welfare- Set up ESP liabilities | 1,944,123.07 | 19,183,912.20 | 18,938,406.16 | 2,189,629.11 |
| Dismission Welfare | 76,791.04 | 76,791.04 | ||
| In total | 32,702,558.07 | 152,651,186.59 | 168,986,389.58 | 16,367,355.08 |
(2) Short-term Compensation Presented
| 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 | 26,776,551.56 | 105,190,699.26 | 122,292,867.29 | 9,674,383.53 |
Items
| Items | Balance at End of Period | Balance at Beginning of Year |
| Loans | 619,028,078.42 | 411,012,990.81 |
| Services | 19,801.98 | |
| Others | 426.29 | |
| In total | 619,028,078.42 | 411,033,219.08 |
| Items | Balance at Beginning of Year | Increase in the Current Period | Decrease in the Current Period | Balance at End of Period |
| 2. Welfare Expense of Employee | 18,700.00 | 3,608,971.82 | 3,432,745.50 | 194,926.32 |
| 3. Social Insurance Expense | 932,905.62 | 10,685,246.64 | 10,559,280.30 | 1,058,871.96 |
| Among them: Medical Insurance Premiums | 863,418.27 | 9,729,586.47 | 9,622,039.65 | 970,965.09 |
| Industrial Injury Insurance Premiums | 53,651.72 | 773,377.55 | 756,613.50 | 70,415.77 |
| Birth Insurance Premiums | 15,835.63 | 182,282.62 | 180,627.15 | 17,491.10 |
| 4. Housing Provident Funds | 114,997.49 | 8,417,025.00 | 8,420,512.00 | 111,510.49 |
| 5. Labor Union Expense and Personnel Education Fund | 2,695,150.33 | 2,306,336.92 | 2,231,611.29 | 2,769,875.96 |
| 6.Other Short-term wages | 220,130.00 | 3,182,203.71 | 3,034,176.00 | 368,157.71 |
| In total | 30,758,435.00 | 133,390,483.35 | 149,971,192.38 | 14,177,725.97 |
(3) Stated Drawings Plan Presented
| 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 | 1,848,825.70 | 16,517,674.95 | 16,291,473.91 | 2,075,026.74 |
| 2. Unemployment Insurance Expense | 49,574.79 | 541,507.67 | 535,896.53 | 55,185.93 |
| 3. Enterprise Annuity Charges | 45,722.58 | 2,124,729.58 | 2,111,035.72 | 59,416.44 |
| Total | 1,944,123.07 | 19,183,912.20 | 18,938,406.16 | 2,189,629.11 |
28.Taxes and Fees Payable
| Items | Balance at End of Period | Balance at Beginning of Year |
| VAT | 3,672,452.79 | 1,535,814.90 |
| Corporate Income Tax | 4,822,889.67 | 4,643,368.25 |
| Urban Maintenance and Construction Tax | 357,425.10 | 184,732.38 |
| House Property Tax | 976,287.01 | 2,317,671.84 |
| Land Use Tax | 370,587.69 | 985,671.07 |
| Individual Income Tax | 494,925.66 | 1,655,912.41 |
| Stamp Tax | 344,887.74 | 152,358.18 |
| Educational Surtax (Including local educational surcharge） | 222,410.12 | 99,058.19 |
| Environmental protection tax | 2,512.01 | 2,805.25 |
| Items | Balance at End of Period | Balance at Beginning of Year |
| In total | 11,264,377.79 | 11,577,392.47 |
29.Other Accounts Payable
| Items | Balance at End of Period | Balance at Beginning of Year |
| Interest Payable | 20,000,000.00 | 21,082,795.47 |
| Dividends Payable | 3,213,342.90 | 3,213,302.88 |
| Other Accounts Payable | 48,634,943.60 | 55,322,100.43 |
| In total | 71,848,286.50 | 79,618,198.78 |
(1) Interest Payable
| Items | Balance at End of Period | Balance at Beginning of Year |
| Loan Interest between Enterprises | 20,000,000.00 | 21,082,795.47 |
| In total | 20,000,000.00 | 21,082,795.47 |
(2) Dividends Payable
(3) Other Accounts Payable
Other Accounts Payable by Nature of Funds Presented
| Items | Balance at End of Period | Balance at Beginning of Year |
| Intercourse Funds of Related Parties | 4,606,890.00 | 3,687,264.48 |
| Guaranteed Deposit and Deposit | 23,721,815.28 | 27,614,619.18 |
| Intercourse Funds between Units | 7,963,932.31 | 9,684,592.82 |
| Personal Intercourse Funds | 3,295,630.45 | 3,731,133.46 |
| Various Insurances of Employee | 2,649,275.00 | 3,688,119.63 |
| Storage Charge | 2,873,402.86 | 2,832,948.18 |
| Hebei Jiliang Oil and Fat Co., Ltd. Gains and Losses Divestment during transition | 1,747,611.95 | |
| Others | 3,523,997.70 | 2,335,810.73 |
| In total | 48,634,943.60 | 55,322,100.43 |
30.Non-current liabilities due within one year
| Item | End balance | Opening Balance |
| Long-term Loans due Within One Year | 100,000,000.00 | 150,000,000.00 |
Items
| Items | Balance at End of Period | Balance at Beginning of Year |
| Others | 3,213,342.90 | 3,213,302.88 |
| In total | 3,213,342.90 | 3,213,302.88 |
| Item | End balance | Opening Balance |
| Lease Liability due Within One Year | 11,891,031.53 | 22,741,185.39 |
| Long-term Loans Interest due Within One Year | 319,763.89 | |
| Bond Interest Payable due Within One Year | 7,200,000.00 | 2,880,000.00 |
| Total | 119,091,031.53 | 175,940,949.28 |
31.Other current liability
| Item | End balance | Opening Balance |
| Value-added tax to be written off | 58,741,540.34 | 45,928,019.48 |
| Changes of the Fair Value of the Hedged Item | 14,511,381.20 | |
| Total | 58,741,540.34 | 60,439,400.68 |
32.Long term borrowing
| Item | End balance | Opening Balance |
| Debt of honour | 530,000,000.00 | 400,000,000.00 |
| Total | 530,000,000.00 | 400,000,000.00 |
33.Bonds payable
(1) Bonds payable
| Item | Ending Balance | Opening Balance |
| Corporate Bond | 299,025,000.00 | 298,800,000.00 |
| Total | 299,025,000.00 | 298,800,000.00 |
(2) Bond payable situation (not including other financial instruments i.e. the Financial Liabilities preferenceshares perpetuities etc)
| Name of Bond | Face Value | Coupon rate（%） | Release Date | Bond Period | Issuing Amount | Opening Balance | The Issuance |
| 23 Jingliang 01 Corporate Bond | 300,000,000.00 | 2.88 | 21Aug-22 Aug 2023 | 3 years | 300,000,000.00 | 301,680,000.00 | |
| Total | ∕ | ∕ | ∕ | ∕ | 300,000,000.00 | 301,680,000.00 |
(Continued)
| Name of Bond | Interest accrued at face value | Amortization of Premiums or Discounts | Repayment in the Period | Other Direct Fees | Ending Balance | Whether in default |
| 23 Jingliang 01 Corporate Bond | 4,320,000.00 | -225,000.00 | 306,225,000.00 | |||
| Total | 4,320,000.00 | -225,000.00 | 306,225,000.00 | ∕ |
34.Lease liability
| Item | End balance | Opening Balance |
| Lease Payment | 92,871,464.76 | 103,803,204.86 |
| Less: unrecognized Financing Cost | 5,966,648.86 | 7,820,276.90 |
| Reclassified as non-current liabilities due within One year | 11,891,031.53 | 22,741,185.39 |
| Net Lease Liabilities | 75,013,784.37 | 73,241,742.57 |
35.Long term wage payable
Long-term wage payable presented
| Items | Balance at End of Period | Balance at Beginning of Year |
| Other Long-term Welfare | 5,677,134.00 | 5,677,134.00 |
| In total | 5,677,134.00 | 5,677,134.00 |
36.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 | 62,503,256.67 | 4,019,983.60 | 58,483,273.07 | ||
| In total | 62,503,256.67 | 4,019,983.60 | 58,483,273.07 |
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 | Amount rolled in non-operating income in the current period. | Refund in this Period | Other Changes | Balance at End of Period | Reasons on Refund | Asset related / income related |
| Edible Oil Renewable Clean Production Equipment and Oil Tank Electric Heating System Project | 111,999.68 | 28,000.02 | 83,999.66 | Assets related | |||||
| Grain & Oil processing key technology research and industrialization project, forming fixed assets | 544,871.72 | 38,919.42 | 505,952.30 | Assets related | |||||
| Tianjin Binhai New Zone industrialized technological transformationand zone construction fund and scientific technology expenses | 1,425,925.73 | 111,111.13 | 1,314,814.60 | Assets related | |||||
| Enterprise foundation supporting in the construction stage of "Tianjin Lingang Industrial Zone Management Committee" | 46,096,611.13 | 638,752.08 | 45,457,859.05 | Assets related | |||||
| Subsidized by Beijing Municipal Food and Strategic | 2,272,477.03 | 125,090.45 | 2,147,386.58 | Assets related |
| Items Receiving Subsidy | Balance at Beginning of Year | Increase in the Current Period | Charge to other Profits | Amount rolled in non-operating income in the current period. | Refund in this Period | Other Changes | Balance at End of Period | Reasons on Refund | Asset related / income related |
| Reserves Bureau for "Tank Expansion and Winterization Renovation Project | |||||||||
| The relocation compensation | 3,078,110.50 | 3,078,110.50 | Assets related | ||||||
| Special subsidy for infrastructure investment | 8,973,260.88 | 8,973,260.88 | Assets related | ||||||
| In total | 62,503,256.67 | 4,019,983.60 | 58,483,273.07 | —— | —— |
37.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 | 30,869,915.00 | -1,275,000.00 | -1,275,000.00 | 29,594,915.00 | |||
| (1) State Shareholding | |||||||
| (2) State-owned Legal-person Shareholding | |||||||
| (3) Other Domestic Capital Shareholding | 30,869,915.00 | -1,275,000.00 | -1,275,000.00 | 29,594,915.00 | |||
| Including: Domestic Legal-person Shareholding | |||||||
| Domestic Natural Person Shareholding | 30,869,915.00 | -1,275,000.00 | -1,275,000.00 | 29,594,915.00 | |||
| (4) Foreign Shareholding | |||||||
| Including: Foreign Legal-person Shareholding | |||||||
| Foreign Natural Person Shareholding | |||||||
| 2. Tradable Shares without Restricted Conditions | 696,080,336.00 | 1,275,000.00 | 1,275,000.00 | 697,355,336.00 | |||
| (1) RMB Ordinary Shares | 631,105,336.00 | 1,275,000.00 | 1,275,000.00 | 632,380,336.00 | |||
| (2) Domestically Listed Foreign Shares | 64,975,000.00 | 64,975,000.00 | |||||
| (3) Listed Foreign Shares Overseas | |||||||
| (4) Others | |||||||
| In total | 726,950,251.00 | 726,950,251.00 | |||||
38.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 | 246,603,764.33 | 246,603,764.33 | ||
| In total | 1,681,808,108.07 | 1,681,808,108.07 |
39.Other Comprehensive Incomes
| Items | Balance at Beginning of Year | Amounts Occurred in the Current Period | Balance at End of Period | |||||
| 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 | |||
| One Other comprehensive incomes that won’t be classified into profit and loss | ||||||||
| Two Other comprehensive incomes that will be classified into profit and loss | 1,369,980.92 | 142,130.77 | 142,130.77 | 1,512,111.69 | ||||
| Including: Converted difference between foreign currency financial statements | 1,369,980.92 | 142,130.77 | 142,130.77 | 1,512,111.69 | ||||
| Total | 1,369,980.92 | 142,130.77 | 142,130.77 | 1,512,111.69 | ||||
40.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 | 92,184,862.07 | 92,184,862.07 | ||
| Free Surplus Reserves | 37,634,827.93 | 37,634,827.93 | ||
| In total | 129,819,690.00 | 129,819,690.00 |
41.Undistributed Profit
| Items | Amounts in the Current Period | Amounts in the Prior Period |
| Adjustment on undistributed profit at end of last year | 627,555,511.45 | 532,904,675.62 |
| Adjustment on total number of undistributed profit at beginning of period (increase+ and decrease-) | ||
| Adjusted undistributed profit at beginning of period | 627,555,511.45 | 532,904,675.62 |
| Add: net profit attributable to parent company in the current period | 24,058,518.07 | 73,581,795.36 |
| Less: withdrawal statutory surplus reserves | ||
| Less: distribution to shareholders | 51,613,467.82 | |
| Undistributed profit at end of period | 600,000,561.70 | 606,486,470.98 |
42.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 | 5,543,192,577.80 | 5,317,117,982.23 | 4,792,494,443.33 | 4,604,819,197.36 |
| Other Business | 12,714,416.34 | 14,897,635.94 | 30,739,764.85 | 26,151,271.78 |
| In total | 5,555,906,994.14 | 5,332,015,618.17 | 4,823,234,208.18 | 4,630,970,469.14 |
(2) Operation revenue and operation cost presented
| Contract Category | Operation Revenue | Operation Cost |
| Industry and Business-classified | ||
| Including: Oil and Oil Seeds | 5,102,927,349.82 | 4,970,240,307.32 |
| Food | 440,265,227.98 | 346,877,674.91 |
| Others | 12,714,416.34 | 14,897,635.94 |
| Region-classified | ||
| Including: North China | 2,898,283,251.48 | 2,802,952,823.15 |
| East China | 1,322,719,192.37 | 1,232,829,464.07 |
| South China | 485,970,049.77 | 475,601,613.53 |
| Northeast China | 355,266,820.98 | 333,933,488.58 |
| Abroad | 249,601,523.13 | 249,383,597.05 |
| Central China | 125,839,395.10 | 122,666,307.34 |
| Others | 118,226,761.31 | 114,648,324.45 |
| Time for the transfer of commodities classified | ||
| Revenue recognition at a given time | 5,555,906,994.14 | 5,332,015,618.17 |
| Sales channel-classified | ||
| Including: Direct | 3,400,859,827.75 | 3,317,529,873.23 |
| Distribution | 2,142,332,750.05 | 1,999,588,109.00 |
| Others | 12,714,416.34 | 14,897,635.94 |
| In total | 5,555,906,994.14 | 5,332,015,618.17 |
(3) Performance obligations explanation
| Item | Time of performance obligations | Important payment terms | Nature of the commitment to transfer commodities by the company | Whether main responsible person | Expected refund to the customer by the Company | Quality assurance category provided by the Company and relevant obligations |
| Processing,sales and trading of oil and oilseeds, as | Upon delivery | Mainly payment first | Mainly sales of oil and oilsees, snack food | Yes | No | Statutory guarantees |
well as foodstuffs
Note: Company and distributors adopt the payment first method, certain credit lines offered by the companyto partial distributors with long-term cooperation and good reputation. For settlement, partial direct sale customersand supermarkets shall be proceeded on agreed payment terms in accordance with the contract
(4) Amortization on remaining performance obligations explanation
Contract has been signed at end reporting period; however, the corresponding amount is RMB 619,028,078.42for the outstanding obligations or obligations not yet complete fulfilled. The revenue shall be recognized in 2024.
43.Tariff And Annex
| Items | Amounts in the Current Period | Amounts in the Prior Period |
| Urban Maintenance and Construction Tax | 1,930,404.14 | 2,164,523.24 |
| House Property tax | 2,996,889.52 | 3,040,839.14 |
| Land Use Tax | 1,110,300.54 | 914,015.59 |
| Educational Surtax | 1,367,095.51 | 1,563,231.46 |
| Vehicle and Vessel Use Tax | 18,756.16 | 20,323.53 |
| Environmental Protection Fees | 54,450.43 | 15,744.17 |
| Stamp Tax | 4,631,570.93 | 3,825,650.53 |
| Other Taxes and Fees | 106,559.43 | 4,346.22 |
| In total | 12,216,026.66 | 11,548,673.88 |
44.Sales Expenses
| Items | Amounts in the Current Period | Amounts in the Prior Period |
| Employee Compensation | 30,377,531.25 | 25,300,609.41 |
| Sales Promotion Expenses | 9,624,316.03 | 7,282,685.02 |
| Warehousing Fees | 9,713,134.98 | 14,257,898.37 |
| Depreciation | 8,454,450.87 | 7,985,937.31 |
| Material consumption, sample and product cost | 2,868,577.30 | 3,712,801.42 |
| Repair Costs | 281,101.68 | 115,097.47 |
| Water and Electricity Fees | 553,716.94 | 547,038.39 |
| Lease fee | 1,460,132.81 | 1,514,904.94 |
| Vehicle Fees | 420,329.68 | 481,627.88 |
| Packing Expenses | 194,466.00 | 251,296.30 |
| Terminal Charges | 18,771.23 | 146,400.18 |
| Travel Expenses | 2,827,900.27 | 3,070,763.08 |
| Test and Detection Fees | 80,186.87 | 133,279.64 |
| Items | Amounts in the Current Period | Amounts in the Prior Period |
| Others | 4,862,041.03 | 13,637,484.20 |
| Total | 71,736,656.94 | 78,437,823.61 |
45.Administration Expenses
| Items | Amounts in the Current Period | Amounts in the Prior Period |
| Employee Compensation | 50,395,828.76 | 50,938,225.39 |
| Impairment Costs | 12,012,948.46 | 13,240,946.13 |
| Amortization of Assets | 3,946,432.50 | 3,687,167.40 |
| Fees of Employing Agent | 2,806,410.34 | 3,545,562.82 |
| Repair Costs | 1,025,293.49 | 1,485,217.53 |
| Company Expenses | 2,734,054.99 | 1,694,907.02 |
| Lease fee | 1,635,076.96 | 1,437,456.70 |
| Vehicle Fees | 914,805.66 | 922,140.12 |
| Security Protection Fees | 501,625.64 | 822,264.35 |
| Amortization of long-term prepayments | 701,590.94 | 549,813.65 |
| Information Network Fees | 57,119.80 | 41,734.11 |
| Commercial Insurance Expenses Workers Insurance Expense | 521,959.67 | 896,801.93 |
| Travel Expenses | 611,737.08 | 413,136.56 |
| Business Entertainment Expenses | 451,086.09 | 433,247.37 |
| Business Entertainment Expenses | 518,825.54 | 475,656.29 |
| Material Consumption | 555,492.73 | 487,704.84 |
| Company Expenses | 384,965.26 | 301,685.55 |
| Labor Protection Fees | 155,649.15 | 27,309.72 |
| Other Expenses | 5,810,012.78 | 11,497,604.73 |
| In total | 85,740,915.84 | 92,898,582.21 |
46.Research and Development Expenses
| Items | Amounts in the Current Period | Amounts in the Prior Period |
| Salary | 6,050,611.00 | 5,106,613.56 |
| Material fee | 3,159,584.65 | 4,254,432.69 |
| Fuel and Power Fee | 221,731.83 | 3,461.18 |
| Depreciation and amortization | 574,493.03 | 179,206.98 |
| Design expense | 8,000.00 | 9,708.74 |
| Equipment Cost | 14,946.90 | |
| Transportation Expense | 33,717.43 | 10,517.31 |
| Others | 339,299.09 | 698,859.51 |
| In total | 10,402,383.93 | 10,262,799.97 |
47.Financial Expenses
| Items | Amounts in the Current Period | Amounts in the Prior Period |
| Interest Expenses | 28,960,078.11 | 25,265,021.07 |
| Less: Interest Income | 8,925,122.62 | 5,832,452.30 |
| Exchange Gain or Loss | -1,401,234.64 | -2,719,736.45 |
| Service Charges | 965,850.29 | 552,216.18 |
| In total | 19,599,571.14 | 17,265,048.50 |
48.Other Profits
| Items | Amounts in the Current Period | Amounts in the Prior Period |
| Government Subsidy | 9,669,801.08 | 6,149,861.75 |
| Return of Service Charges of Withholding Individual Income Tax | 200,683.84 | 156,397.49 |
| Others | 17,955.34 | |
| In total | 9,870,484.92 | 6,324,214.58 |
49.Investment Income
| Items | Amounts in the Current Period | Amounts in the Prior Period |
| Long-term equity investment income accounted with equity method | 10,875,426.88 | 7,012,296.86 |
| Investment income from disposal of wealth management products | ||
| Investment income of disposing trading financial assets | ||
| Investment income obtained during the holding of transactional financial assets | 169,707.51 | |
| Others | -2,721.38 | |
| In total | 10,875,426.88 | 7,179,282.99 |
50.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 |
| Trading Financial assets | -9,906,096.90 | 143,869,459.30 |
| Including: income with changes in fair value generated by hedging instruments and hedged item | -9,906,096.90 | 143,869,459.30 |
| In total | -9,906,096.90 | 143,869,459.30 |
51.Credit impairment loss
| Items | Amounts in the Current Period | Amounts in the Prior Period |
| Accounts receivable bad debt loss | -115,984.57 | |
| Other receivables bad debt loss | 1,779.74 | |
| Total | 1,779.74 | -115,984.57 |
52.Loss from Asset Devaluation
| Items | Amounts in the Current Period | Amounts in the Prior Period |
| Loss on Inventory Price Loss & Impairment loss on contract performance costs | 130,887.98 | -25,186,589.63 |
| In total | 130,887.98 | -25,186,589.63 |
53.Assets Disposal Income
| Items | Amounts in the Current Period | Amounts in the Prior Period |
| Gains or losses on disposal of fixed assets | 23,411.62 | -2,209.46 |
| In total | 23,411.62 | -2,209.46 |
54.Non-operating Income
| Items | Amounts in the Current Period | Amounts in the Prior Period | Amounts Charged to Non-recurring Profit and Loss |
| Non-current assets retirement gains | 10,274.33 | ||
| Fines, liquidated damages, late fees, compensation income | 9,309,450.43 | 3,636,895.41 | 9,309,450.43 |
| Payable amounts not required to be paid | 1,190,843.15 | 13,284.33 | 1,190,843.15 |
| Waste disposal gains | 49,231.02 | 98,808.18 | 49,231.02 |
| Others | 54,881.03 | 144,239.11 | 54,881.03 |
| In total | 10,604,405.63 | 3,903,501.36 | 10,604,405.63 |
55.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 | 83,271.40 | 67,613.57 | 83,271.40 |
| Penalty expenditure | 4,288,497.08 | 65.46 | 4,288,497.08 |
| Others | 408,230.51 | 460,301.41 | 408,230.51 |
| Total | 4,779,998.99 | 527,980.44 | 4,779,998.99 |
56.Income Tax Expenses
(1) List of Income Tax Expenses
| Items | Amounts in the Current Period | Amounts in the Prior Period |
| Income Tax Expenses of the Current Period | 5,016,214.94 | 7,333,690.17 |
| Deferred Income Tax Expenses | 9,813,068.48 | 25,184,332.75 |
| Total | 14,829,283.42 | 32,518,022.92 |
(2) Accounting Profit and Income Tax Expense Adjustment Process
| Items | Amounts in the Current Period |
| Total Profits | 41,016,122.34 |
| Income tax expenses calculated by statutory/applicable tax rate | 10,254,030.59 |
| Effect of subsidiary corporations being applicable to different tax rates | -377,296.99 |
| Adjustment on effect of income tax in the prior period | 250,584.99 |
| Effect of Non-taxable Incomes | |
| Effect of Non-deductible cost, expense and loss | 169,877.34 |
| Effect of deductible loss on usage of unconfirmed deferred income tax assets in the prior period | -2,623,737.65 |
| Effect of deductible temporary difference or deductible loss on unconfirmed deferred income tax in the current period | 11,534,929.01 |
| Effect of Research expenses, disables weighted deduction | -930,668.99 |
| Effect of asset depreciation reserve write-off or reversal | -130,887.98 |
| Effect of non-taxable investment income | -2,718,856.73 |
| Others | -598,690.17 |
| Income Tax Expenses | 14,829,283.42 |
57.Other comprehensive income items and their income tax impact and transferred to profit and lossSee details of‘Appendix V Notes on Items in Consolidated Financial Statements 39. Other ComprehensiveIncomes’
58.Notes to items related cash flow statement
(1) Cash related to operating activities
A. Receiving other cash related to operation activities
| Items | Amounts in the Current Period | Amounts in the Prior Period |
| Security Deposit | 1,454,397,995.52 | 879,899,688.90 |
| Intercourse Funds of Other Units | 33,138,626.70 | 129,523,949.12 |
| Interest Income | 9,529,738.72 | 5,111,702.84 |
| Intercourse Funds of Related Parties | 7,215,785.96 | 2,409,511.39 |
| Non-operating Income and other income | 8,976,653.99 | 4,937,540.00 |
| Items | Amounts in the Current Period | Amounts in the Prior Period |
| Others | 1,657,862.05 | 1,929,648.28 |
| Total | 1,514,916,662.94 | 1,023,812,040.53 |
(2) Cash related to investment activities
Other cash payment related to investment activities
| Items | Amounts in the Current Period | Amounts in the Prior Period |
| Transitional gains and losses, etc., returned to Hebei Jiliang Oil and Fat Co., Ltd. | 1,747,611.95 | |
| In total | 1,747,611.95 |
(3) Cash related to financing activities
A. Other cash paid related to financing activities
| Items | Amounts in the Current Period | Amounts in the Prior Period |
| Lease payment amount | 13,486,733.94 | 574,077.78 |
| In total | 13,486,733.94 | 574,077.78 |
B. Various liability change situation From Financing Activities
| Item | Beginning Balance | Increase in this period | Decrease in this period | Ending Balance | ||
| Cash Movement | Non-cash Movement | Cash Movement | Non-cash Movement | |||
| Short-term borrowing | 1,163,479,691.67 | 907,734,559.68 | 17,262,148.84 | 1,051,759,139.08 | 1,036,717,261.11 | |
| Long-term borrowing | 550,319,763.89 | 130,000,000.00 | 4,800,222.22 | 55,119,986.11 | 630,000,000.00 | |
| Bond Payable | 301,680,000.00 | 4,545,000.00 | 306,225,000.00 | |||
| Lease Liability | 95,982,927.96 | 4,408,621.88 | 13,486,733.94 | 86,904,815.90 | ||
| Total | 2,111,462,383.52 | 1,037,734,559.68 | 31,015,992.94 | 1,120,365,859.13 | 2,059,847,077.01 | |
Note: amount presented above includes that of reclassification to non-current liabilities due in one year
59.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 | 26,186,838.92 | 84,776,482.08 |
| Add: Assets Impairment Reserves | -130,887.98 | 25,186,589.63 |
| Credit impairment loss | -1,779.74 | 115,984.57 |
| Fixed Assets Depreciation, Oil-and-gas Assets Depreciation and Productive Biological Assets Depreciation | 44,390,959.06 | 50,006,678.17 |
| Right-of-use assets depreciation | 10,243,162.76 | 727,090.29 |
| Amortization of Intangible Assets | 8,529,107.14 | 7,453,613.22 |
| Amortization of Long-term Deferred Expenses | 701,590.94 | 549,813.65 |
| Losses on Disposal of Fixed Assets, Intangible Assets and Other Long-term Assets (Fill in profit with symbol “－”) | -23,411.62 | 2,009.46 |
| Losses on Retirement of Fixed Assets (Fill in profit with symbol “－”) | 60,624.57 | |
| Losses on Changes in Fair Value (Fill in profit with symbol “－”) | 9,906,096.90 | -143,869,459.30 |
| Financial Expenses (Fill in profit with symbol “－”) | 19,144,560.53 | 17,265,048.50 |
| Investment Losses (Fill in profit with symbol “－”) | -10,875,426.88 | -7,179,282.99 |
| Decrease in Deferred Income Tax Assets (Fill in increase with symbol “－”) | 3,346,527.87 | 934,516.78 |
| Increase in Deferred Income Tax Reliabilities (Fill in decrease with symbol “－”) | 6,466,540.61 | 24,249,815.98 |
| Decrease in Inventory (Fill in increase with symbol “－”) | -145,001,449.86 | -114,286,861.49 |
| Decrease in Items of Operating Receivables (Fill in increase with symbol “－”) | -344,857,880.05 | -360,191,592.16 |
| Increase in Items of Operating Receivables (Fill in decrease with symbol “－”) | 150,910,029.31 | 276,849,383.25 |
| Net Cash Flows from Operating Activities | -221,065,422.09 | -137,349,545.79 |
| 2. Major investment and financing activities that do not involve cash payments | —— | —— |
| 3. Net change conditions in cash and cash equivalents | ||
| Cash balance at end of period | 1,170,000,193.27 | 1,251,666,904.81 |
| Less: cash balance at beginning of period | 1,540,639,079.95 | 551,439,110.07 |
| Cash and cash equivalent net increase | -370,638,886.68 | 700,227,794.74 |
(2) Composition of cash and cash equivalents
| Items | Balance at End of Period | Balance at Beginning of Period |
| One. Cash | 1,170,000,193.27 | 1,540,639,079.95 |
| Including: Cash on hand | 16,474.45 | 9,949.26 |
| Bank deposit available for payment at any time | 1,077,499,569.76 | 1,423,321,137.06 |
| Other currency funds available for payment at any time | 92,484,149.06 | 117,307,993.63 |
| Two. Cash Equivalents | ||
| Three. Balance of Cash and Cash Equivalents at End of Period | 1,170,000,193.27 | 1,540,639,079.95 |
60.Monetary Items of Foreign Currency
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 | —— | —— | 141,976,671.98 |
| Including: US Dollars | 19,921,517.65 | 7.1268 | 141,976,671.98 |
| Accounts receivable | —— | —— | 592,736.91 |
| Items | Balance of Foreign Currency at End of Period | Exchange Rate Convert | Balance of Converting to RMB at End of Period |
| Including: US Dollars | 83,170.13 | 7.1268 | 592,736.91 |
61. Lease
(1) As Lessee
| Item | Amount |
| Interest cost on the lease liability | 1,901,742.24 |
| Short-term lease expenses for simplified processing of related asset costs or profit or loss in the current period | 3,494,753.60 |
| Total Cash Outflow related to lease | 13,860,930.58 |
(2) As Lessor
Operating lease as lessor
| Item | Leasehold income | Including: Income related to variable lease payments not included in lease income |
| Leasehold income | 1,077,492.03 | |
| Total | 1,077,492.03 |
VI Research and Development ExpensesDisclosed by nature of expenses
| Item | Amount in current period | Amount in prior period |
| Salary | 6,050,611.00 | 5,106,613.56 |
| Material expense | 3,159,584.65 | 4,254,432.69 |
| Fuel & Power expenses | 221,731.83 | 3,461.18 |
| Depreciation and Amortization Fee | 574,493.03 | 179,206.98 |
| Design Fee | 8,000.00 | 9,708.74 |
| Equipment cost | 14,946.90 | |
| Travel expense | 33,717.43 | 10,517.31 |
| Others | 339,299.09 | 698,859.51 |
| Total | 10,402,383.93 | 10,262,799.97 |
| Including: R&D expenditure | 10,402,383.93 | 10,262,799.97 |
| Capitalized R&D expenditure |
VII Change in Consolidation Scope
1.There were no changes in the scope of consolidation for the company during the reporting periodVIII Equities in Other Entities
1. Equities in Subsidiaries
(1) Composition of the Company
| Name of Subsidiary | Principle Place of Business | Registered Capital（In ten thousands Yuan） | Registered Place | Nature of Business | Shareholding Ratio (%) | Mode of Acquisition | |
| Direct | Indirect | ||||||
| Jingliang (Tianjin) Grain and Oil Industry Co., Ltd. | Tianjin | 56,000.00 | Tianjin | Agricultural Product and By Product Processing | 70.00 | Merger under the same control | |
| Beijing Jingliang Oil and Fat Co., Ltd. | Beijing | 5,000.00 | Beijing | Grain and oil trade | 100.00 | Merger under the same control | |
| Beijing Guchuan Edible Oil Co., Ltd. | Beijing | 12,558.46 | Beijing | Grain and oil trade | 100.00 | Merger under the same control | |
| Beijing Eisen-Lubao Oil Co., Ltd. | Beijing | 5,050.00 | Beijing | Agricultural Product and By Product Processing | 100.00 | Merger under the same control | |
| Beijing Tianweikang Oil Distribution Center Co., Ltd. | Beijing | 500.00 | Beijing | Warehousing | 100.00 | Merger under the same control | |
| Beijing Guchuan Bread Food Co., Ltd. | Beijing | 5,550.00 | Beijing | Food Processing | 100.00 | Merger under the same control | |
| Zhejiang Xiao Wang Zi Food Co., Ltd. | Hangzhou | 5,156.00 | Hangzhou | Food Processing | 17.6794 | 77.2072 | Combination not under same control |
| Hangzhou Lin'an Xiaotianshi Food Co., Ltd. | Hangzhou | 4,900.00 | Hangzhou | Food Processing | 17.6794 | 77.2072 | ditto |
| Liaoning Xiao Wang Zi Food Co., Ltd. | Liaoning | 3,000.00 | Liaoning | Food Processing | 17.6794 | 77.2072 | ditto |
| Linqing Xiao Wang Zi Food Co., Ltd. | Linqing | 2,132.50 | Linqing | Food Processing | 17.6794 | 77.2072 | ditto |
| Hangzhou Lin'an Chunmanyuan Agricultural Development Co., Ltd. | Hangzhou | 600.00 | Hangzhou | Food Processing | 17.6794 | 77.2072 | ditto |
| Jingliang (Singapore) International Trade Co., Ltd. | Singapore | 643.35 | Singapore | Grain trade | 100.00 | Invest in the establishment | |
| Beijing jingliang gubi oil and grease co. LTD | Beijing | 5,000.00 | Beijing | Grain and oil trade | 100.00 | Invest in the establishment | |
| Beijing Jingliang Food Co., Ltd. | Beijing | 105,658.96 | Beijing | Investment management | 100.00 | Merger under the same control | |
| Jingliang (Caofeidian) Agricultural Development Co., Ltd. | Tangshan | 5,000.00 | Tangshan | Plantation | 51.00 | Invest in the establishment | |
| Jingliang (Yueyang) Grain and Oil Industry Co., Ltd. | Hunan | 68,000.00 | Hunan | Agricultural products | 65.00 | Invest in the establishment | |
| Jingliang (Beijing) Food Marketing Management Co., Ltd | Beijing | 800.00 | Beijing | Commercial services | 100.00 | Invest in the establishment | |
| Jingliang (Yangpu) Grain and Oil Industry Co., Ltd. | Hainan | 50,000.00 | Hainan | Agricultural Product and By Product Processing | 65.00 | Invest in the establishment | |
(2) Major non-wholly-owned subsidiaries
| Name of Subsidiary | Shareholding 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 |
| Jingliang (Tianjin) Grain and Oil Industry Co., Ltd. | 30.00% | 677,459.84 | 222,943,883.54 | |
| Zhejiang Xiao Wang Zi Food Co., Ltd. | 5.11% | 2,303,461.00 | 46,752,334.36 |
(3) Important financial information on major non-wholly-owned subsidiaries
| Name of Subsidiary | Closing Balance | |||||
| Current Assets | Non-current Assets | Total Assets | Current Liabilities | Non-current Liabilities | Total Liabilities | |
| Jingliang (Tianjin) Grain and Oil Industry Co., Ltd. | 1,979,394,102.08 | 692,588,050.46 | 2,671,982,152.54 | 1,534,023,560.02 | 394,812,314.02 | 1,928,835,874.04 |
| Zhejiang Xiao Wang Zi Food Co., Ltd. | 580,424,113.52 | 323,527,826.28 | 903,951,939.80 | 83,043,388.61 | 14,650,394.88 | 97,693,783.49 |
(Continued)
| Name of Subsidiary | Opening Balance | |||||
| Current Assets | Non-current Assets | Total Assets | Current Liabilities | Non-current Liabilities | Total Liabilities | |
| Jingliang (Tianjin) Grain and Oil Industry Co., Ltd. | 1,690,703,873.13 | 715,120,631.78 | 2,405,824,504.91 | 1,401,536,126.49 | 263,400,299.40 | 1,664,936,425.89 |
| Zhejiang Xiao Wang Zi Food Co., Ltd. | 556,236,641.71 | 333,141,896.19 | 889,378,537.90 | 103,727,129.38 | 17,728,505.38 | 121,455,634.76 |
(Continued)
| Name of Subsidiary | Amount incurred in the current period | |||
| Operating Income | Net Profit | Total Comprehensive Income | Cash Flow from Operating Activities | |
| Jingliang (Tianjin) Grain and Oil Industry Co., Ltd. | 1,948,859,877.07 | 2,258,199.48 | 2,258,199.48 | -339,856,449.70 |
| Zhejiang Xiao Wang Zi Food Co., Ltd. | 377,946,737.77 | 38,335,253.17 | 38,335,253.17 | 12,319,557.86 |
(Continued)
| Name of Subsidiary | Amount incurred in the prior period | |||
| Operating Income | Net Profit | Total Comprehensive Income | Cash Flow from Operating Activities | |
| Jingliang (Tianjin) Grain and Oil Industry Co., Ltd. | 2,364,528,344.23 | 25,638,449.60 | 25,638,449.60 | 568,809,524.65 |
| Zhejiang Xiao Wang Zi Food Co., Ltd. | 428,413,574.82 | 46,252,797.77 | 46,252,797.77 | -2,843,845.04 |
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 | |||||
| Beijing Zhengda Feed Co., Ltd. | Beijing | Beijing | Manufacturer | 50.00 | Equity method | |
| SINOGRAIN (Tianjin) Warehousing Logistics Co., Ltd. | Tianjin | Tianjin | Transportation and warehousing | 30.00 | Equity method | |
| Jingliang Missme Catering Management (Beijing) Co., | Beijing | Beijing | Manufacturer | 48.00 | Equity method | |
Ltd.
(2) Important financial information on major joint ventures
| Item | Closing Balance/Current Amount | Opening Balance/Last Term Amount |
| Beijing Zhengda Feed Co., Ltd. | Beijing Zhengda Feed Co., Ltd. | |
| Current assets | 318,764,832.62 | 319,779,538.52 |
| Including: cash and cash equivalents | 10,014,848.50 | 12,804,613.72 |
| Non-current assets | 19,836,156.12 | 19,900,378.39 |
| Total assets | 338,600,988.74 | 339,679,916.91 |
| Current liabilities | 56,845,400.96 | 58,198,209.39 |
| Non-current liabilities | 20,340,517.28 | 24,694,621.01 |
| Total liabilities | 77,185,918.24 | 82,892,830.40 |
| Minority shareholder's equity | ||
| Shareholders' equity attributable to the parent company | 261,415,070.50 | 256,787,086.51 |
| Share of net assets based on shareholding ratio | 130,707,535.25 | 128,393,543.26 |
| Book value of equity investment in joint ventures | 130,707,535.25 | 128,393,543.26 |
| Operating income | 141,505,276.76 | 164,726,777.97 |
| Financial costs | -4,813,744.60 | -3,959,367.67 |
| Income tax expense | 1,414,888.95 | 2,271,436.27 |
| Net profit | 3,976,901.01 | 6,478,834.60 |
| Dividends received from joint ventures in the current period |
(3) Important financial information on major affiliates
| Item | Closing Balance/Current Amount | Opening Balance/Last Term Amount |
| SINOGRAIN (Tianjin) Warehousing Logistics Co., Ltd. | SINOGRAIN (Tianjin) Warehousing Logistics Co., Ltd. | |
| Current assets | 59,998,800.78 | 59,019,697.43 |
| Non-current assets | 955,410,475.33 | 886,062,609.97 |
| Total assets | 1,015,409,276.11 | 945,082,307.40 |
| Current liabilities | 32,028,004.29 | 33,964,613.24 |
| Non-current liabilities | 554,104,200.08 | 506,182,569.64 |
| Total liabilities | 586,132,204.37 | 540,147,182.88 |
| Minority shareholder's equity | ||
| Shareholders' equity attributable to | 429,277,071.74 | 404,935,124.52 |
| Item | Closing Balance/Current Amount | Opening Balance/Last Term Amount |
| SINOGRAIN (Tianjin) Warehousing Logistics Co., Ltd. | SINOGRAIN (Tianjin) Warehousing Logistics Co., Ltd. |
the parent company
| the parent company | ||
| Share of net assets based on shareholding ratio | 128,783,121.52 | 121,480,537.36 |
| Book value of equity investment in affiliates | 128,783,121.52 | 121,480,537.36 |
| Fair value of equity investment in affiliates with open offers | ||
| Operating income | 46,973,215.82 | 31,195,596.27 |
| Net profit | 24,341,947.22 | 12,576,265.20 |
| Net profit from discontinued operations | ||
| Other comprehensive income | ||
| Total comprehensive income | 24,341,947.22 | 12,576,265.20 |
| Dividends received from affiliates in the current period |
(4) Non-important aggregated financial information on affiliates
| Item | Closing Balance/Current Amount | Opening Balance/Last Term Amount |
| Associated enterprises：Jingliang Missme Catering Management (Beijing) Co., Ltd. | ||
| Total of Investment Book Value | 6,307,415.52 | 6,352,166.62 |
| Items calculated according to shareholding ratio | ||
| -- Net profit | -44,751.10 | |
| -- Other comprehensive income | ||
| -- Total comprehensive income | -44,751.10 |
IX Government SubsidiesGovernment subsidy included in current profit or loss
| Item | Current Amount | Last Term Amount |
| VAT refunds | 4,245,468.93 | 2,909,904.59 |
| Supporting subsidy during the establishment phase for Tianjin Lingang Industrial zone management committee | 638,752.08 | 638,752.08 |
| Special subsidy for infrastructure input | 1,304,400.00 | |
| Compensation for demolition and relocation | 3,078,110.50 | |
| The disabled employment subsidy | 194,719.10 | 75,262.57 |
| Development zone extension supporting bonus | 261,643.00 |
| Item | Current Amount | Last Term Amount |
| Beijing Municipal Food and Material Reserve Bureau "Oil Tank Expansion and Winter Transformation Project" subsidy fund | 274,970.45 | 125,090.45 |
| Subsidy for job stabilization/University student employment subsidy/Social security subsidy | 156,055.99 | 22,207.22 |
| Tianjin Binhai New Area industrial technological transformation and park construction funds and science and technology expenditure | 111,111.13 | 111,111.12 |
| Tieling Mayor qualification bonus | 200,000.00 | |
| Urban land use tax refund | 101,200.00 | |
| Tianjin Port Free Trade Zone Development and Reform Bureau 2020 the 1st to 4th batch of Tianjin energy saving special funds | 71,000.00 | |
| Special Funds for Intelligent Manufacturing Issued by the Bureau of Science, Technology and Industrial Innovation of Tianjin Port Free Trade Zone (District Portion) | 100,000.00 | |
| Personal Tax Handling Fee Refund | 200,638.84 | |
| Bureau of Economic and Information Technology “seize the opportunity to fight for the economy” subsidies | 60,000.00 | |
| Incentive Funds for Promoting Accelerated Development of Financial Industry in Hainan Province | 600,000.00 | |
| Beijing Economic Development Zone "ShouShengGui" Reward | 300,000.00 | |
| Others | 70,657.90 | 169,290.72 |
| In total | 9,870,484.92 | 6,149,861.75 |
X Risks Related to Financial Instruments
1. Risks Related to Financial Instruments
The Company's principal financial instruments include equity investment, creditors' investment, borrowing,accounts receivable, accounts payable, etc. The primary purpose of these financial instruments is to finance theoperations of the Company. The Company has a variety of other financial assets and liabilities directly arising fromits operations, such as accounts receivable and accounts payable.The main risks caused by the Company's financial instruments are credit risk, liquidity risk and market risk.
(1) Classification of financial instruments
① Book value of various financial assets on the balance sheet date
A. June 30, 2024
| 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 | 1,181,398,242.40 | 1,181,398,242.40 |
| 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 | 31,223,815.72 | 31,223,815.72 | ||
| Accounts receivables | 109,483,882.36 | 109,483,882.36 | ||
| Accounts receivable financing | 2,442,328.82 | 2,442,328.82 | ||
| Other receivables | 386,904,030.80 | 386,904,030.80 | ||
| Investment in other equity instruments | 20,000,000.00 | 20,000,000.00 | ||
| Other current assets | 330,613,399.83 | 330,613,399.83 | ||
| Other non-current assets | 10,541,666.66 | 10,541,666.66 |
B. December 31, 2023
| 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 | 1,543,385,751.86 | 1,543,385,751.86 | ||
| Derivative financial assets | 31,684,620.00 | 31,684,620.00 | ||
| Accounts receivables | 115,780,372.55 | 115,780,372.55 | ||
| Accounts receivable financing | 2,502,308.90 | 2,502,308.90 | ||
| Other receivables | 303,099,589.59 | 303,099,589.59 | ||
| Investment in other equity instruments | 20,000,000.00 | 20,000,000.00 | ||
| Non-current assets due within 1 year | 22,188,083.34 | 22,188,083.34 | ||
| Other current assets | 238,358,924.24 | 238,358,924.24 | ||
| Other non-current assets | 10,390,000.00 | 10,390,000.00 |
② Book value of various financial liabilities on the balance sheet date
A. June 30, 2024
| Financial liability items | Financial liabilities measured at fair value and changes included in current profits and losses | Other financial liability | Total |
| Short term loans | 1,036,717,261.11 | 1,036,717,261.11 | |
| Accounts payable | 70,607,024.80 | 70,607,024.80 | |
| Other Payables | 71,848,286.50 | 71,848,286.50 | |
| Long term loans | 530,000,000.00 | 530,000,000.00 | |
| Notes payable | 299,025,000.00 | 299,025,000.00 | |
| Non-current liability due within one year | 100,000,000.00 | 100,000,000.00 |
B. December 31, 2023
| Financial liability items | Financial liabilities measured at fair value and changes included in current profits and losses | Other financial liability | Total |
| Short term loans | 1,163,479,691.67 | 1,163,479,691.67 | |
| Derivative financial liability | 15,805,393.88 | 15,805,393.88 | |
| Accounts payable | 82,474,823.84 | 82,474,823.84 | |
| Other Payables | 79,618,198.78 | 79,618,198.78 | |
| Long term loans | 400,000,000.00 | 400,000,000.00 | |
| Notes payable | 298,800,000.00 | 298,800,000.00 | |
| Non-current liability due within one year | 153,199,763.89 | 153,199,763.89 |
(2) Credit Risk
On June 30, 2024, the largest credit risk exposure that may cause financial loss to the Company mainly comesfrom the loss on financial assets of the Company due to the failure of the other party to perform its obligations,including:
Book value of financial assets recognized in the consolidated balance sheet; for a financial instrument measuredat fair value, its book value reflects its risk exposure instead of their biggest risk exposure, and its biggest riskexposure may vary with the change of its future fair value.
In order to reduce the credit risk, the Company sets relevant policies to control its exposure, sets correspondingcredit periods based on customer’s financial position, possibility of obtaining guarantees from third parties, creditrecords and other factors such as current market conditions and other credit qualifications for customer assessment,and implements other monitoring procedures to ensure that necessary measures are taken to recover overdue credits.In addition, the Company reviews the collection of individual account receivables on each balance sheet date inorder to make sufficient provision for bad debts for collectable amounts. Therefore, the Company's managementbelieves that the Company's credit risk has been greatly reduced.
The liquidity funds of the Company are deposited in banks and other financial institutions with high credit
rating, so the credit risk of liquidity funds is low.
(3) Liquidity Risk
When managing liquidity risk, the Company keeps and monitors adequate cash and cash equivalents approvedby its management in order to meet the Company's business needs and reduce the influences of cash flowfluctuations. The Company's management monitors the use of bank loans and ensures the performance of loanagreements.
Maturity analysis of financial liabilities in terms of undiscounted contractual cash flows:
| Item | June 30, 2024 | |||
| Within One Year | One To Five Years | Above Five Years | Total | |
| Short term loans | 1,036,717,261.11 | 1,036,717,261.11 | ||
| Accounts payable | 70,607,024.80 | 70,607,024.80 | ||
| Other Payables | 71,848,286.50 | 71,848,286.50 | ||
| Long term loans | 530,000,000.00 | 530,000,000.00 | ||
| Notes payable | 299,025,000.00 | 299,025,000.00 | ||
| Non-current liability due within one year | 100,000,000.00 | 100,000,000.00 | ||
(Continued)
| Item | December 31, 2023 | |||
| Within One Year | One To Five Years | Above Five Years | Total | |
| Short term loans | 1,163,479,691.67 | 1,163,479,691.67 | ||
| Derivative financial liability | 15,805,393.88 | 15,805,393.88 | ||
| Accounts payable | 82,474,823.84 | 82,474,823.84 | ||
| Other Payables | 79,618,198.78 | 79,618,198.78 | ||
| Long term loans | 400,000,000.00 | 400,000,000.00 | ||
| Notes payable | 298,800,000.00 | 298,800,000.00 | ||
| Non-current liability due within one year | 153,199,763.89 | 153,199,763.89 | ||
(4) Market risk
Market risk refers to the risk that the fair value or future cash flow of financial instruments will fluctuate dueto the change of market price. Market risk mainly includes interest rate risk, foreign exchange risk and other pricerisks, such as equity instrument investment price risk.
A. Interest Rate Risk
The Company's interest rate risk mainly arises from bank loans. The financial liabilities at floating interestrates bring the Company the interest rate risk on cash flow, while the financial liabilities at fixed interest rates bring
the Company the interest rate risk on fair value. The Company decides the relative proportion of fixed interest ratecontracts and floating interest rate contracts according to the current market environment.As of June 30, 2024, the Company's interest-bearing liabilities under floating rate contracts denominated inRMB amounted to RMB 550,000,000.00 and those under fixed rate contracts denominated in RMB amounted toRMB 1,415,742,261.11.B. Exchange Rate RiskThe Company's exposure to foreign exchange risks is primarily related to the Company's operating activities(when revenues and expenditures are settled in foreign currencies other than the Company's accounting standardcurrency) and its net investments in its overseas subsidiaries.The Company's exposure to foreign exchange risks is mainly related to US dollars. Except that some of theCompany's subsidiaries purchase and sell in US dollars, other major business activities of the Company are pricedand settled in RMB.
As on June 30, 2024, the Company's assets and liabilities are in RMB, except the assets or liabilities describedin the table below are in US dollars.The foreign exchange risks arising from the assets and liabilities of such foreign currency balances may havean impact on the Company's operating results.
| Items | Closing Balance | Opening Balance |
| Monetary funds | 141,976,671.98 | 132,735,270.36 |
| Accounts Receivables | 592,736.91 | |
| Other Receivables | 60,753,187.26 |
The company adopts sensitivity analysis technology to analyze the possible impact of reasonable and possiblechanges of risk variables on current profit and loss or owner's equity. As any risk variable rarely changes in isolation,and the correlation between variables will have a significant effect on the final impact amount of a risk variablechange, the following content is carried out under the assumption that the change of each variable is independent.
On the assumption that foreign currency assets and foreign currency liabilities remain relatively stable andother variables remain unchanged, the after-tax impact of possible reasonable changes in exchange rate on currentprofits and losses and rights and interests is as follows:
| Item | Current period | ||
| [US dollar] Exchange rate Increase /(decrease) | Gross profit/net profit increase /(decrease) | Increase/(decrease) in shareholders' equity | |
| The RMB yuan depreciated against the US dollar | 5% | 1,000,234.39 | 1,000,234.39 |
| The RMB yuan appreciated against the US dollar | -5% | -1,000,234.39 | -1,000,234.39 |
（Continued）
| Item | Prior period | ||
| [US dollar] Exchange rate Increase / (decrease) | Gross profit/net profit increase /(decrease) | Increase/(decrease) in shareholders' equity | |
| The RMB yuan depreciated against the US dollar | 5% | 237,923.56 | 237,923.56 |
| The RMB yuan appreciated against the US dollar | -5% | -237,923.56 | -237,923.56 |
2. Hedging
(1) The Company undertake risk management through hedging operation
| Item | Corresponding risk management strategy and target | Qualitative and quantitative information on hedged risk | The economic relationship between the hedged project & relevant hedged instruments | Expected effective achievement of risk management objectives | Effects of risk exposure from the relevant hedged activities |
| Oil and Oil Seeds | Using the hedging function of futures instruments to carry out hedging business, effectively avoid the risk of market price fluctuations, in order to achieve stable management | Qualitative: non-credit risk, including basis risk, substitute risk, supply-demand risk etc. Quantitative: market price fluctuation for the hedged project and instruments | Expected Fair value or cash flow due to the hedged risk of hedged project and relevant hedging instruments move in opposite direction By the Changes with the same base variable or similar base variable that is economically relevant | The target of expected risk management has been basically achieved | Effectively avoid risk exposure |
(2) The company conducts eligible hedging business and applies hedging accounting
| Item | Book value related to the hedged Item and instruments | Hedging Adjustments on book value of hedged item which has been recognized, in which comprises of hedged item accumulated fair value | Hedging validity and sources of hedging invalidity aspect | Effect of hedging accounting on the company's financial statements |
| Hedging Risk Type | ||||
| Risk to changes in the fair value of hedging | 330,613,399.83 | 330,613,399.83 | The invalidated portion of fair value hedges during the financial statement period is not material. | Note 1 |
| Hedging Type | ||||
| Fair value hedging | 31,223,815.72 | 31,223,815.72 | The invalidated portion of fair value hedges during the financial statement period is not | Note 1 |
material.EffectiveHedging
Note 1: The Company is engaged in the production and processing of imported soybeans and related products.In order to hedge the risk of changes in the prices of imported soybeans and other products, the Company uses thefollowing futures contracts to manage the commodity price risk faced by its holdings of inventory and unrecognizedfirm purchase commitment.The Company uses standard soybean meal and soybean oil futures contracts on the Dalian CommodityExchange to hedge the Company's holdings of soybean meal and soybean oil inventories as well as its unrecognizedfirm purchase commitments as a means of hedging the Company's exposure to the risk of changes in fair valuearising from fluctuations in the market price of imported soybeans; the use of standard futures contracts for soybeans,palm oil, soybean oil, rapeseed oil and other futures contracts on the Dalian Commodity Exchange and ZhengzhouCommodity Exchange Hedging of certain inventories of domestic soybeans, palm oil, soybean oil, rapeseed oil andother Oil and Oil Seeds held by the Company, as well as unrecognized firm purchase commitment, as a means ofhedging the risk of changes in fair value arising from fluctuations in the market prices of domestic soybeans, palmoil, soybean oil, rapeseed oil and other Oil and Oil Seeds borne by the Company.The changes in market prices of soybean meal and soybean oil produced by the Company's processing ofimported soybeans contain a risk component associated with the standard soybean meal and soybean oil futurescontracts, which the Company designates as the hedged item, and the standard soybean meal and soybean oil futurescontracts as the hedging instruments. There is a correlation between the economic relationship between the hedgeditem and the hedging instrument, such that the soybean meal and soybean oil futures contracts and the value of thesoybean meal and soybean oil squeezed from imported soybeans change in opposite directions and are correlatedbecause they are exposed to the same hedged risk. The movements in the market prices of domestic soybeans, palmoil, soybean oil, rapeseed oil and other Oil and Oil Seeds operated by the Company contain a risk componentassociated with the standard soybean, palm oil, soybean oil, rapeseed oil and other Oil and Oil Seeds futurescontracts, respectively, and the Company designates this risk component as the hedged item and the standardsoybean, palm oil, soybean oil and rapeseed oil and other Oil and Oil Seeds futures contracts as hedging instruments.Through qualitative analysis, the Company determined that the ratio of the number of hedging instruments to thenumber of hedged items should not exceed 0.9:1.
The Company utilizes fair value hedges for these types of hedges, and the specific hedging arrangements areas follows:
| Hedged Items | Hedging Instruments | Hedging Methods |
| Risk components in inventories and unrecognized firm purchase commitments (soybean oil, soybean meal, domestically produced soybeans, palm oil, rapeseed oil and other Oil and Oil Seeds) | Soybean oil, soybean meal, standard soybean, palm oil, rapeseed oil and other Oil and Oil Seeds futures contracts on the Dalian and Zhengzhou Commodity Exchange | Use of commodity futures contracts to lock in price fluctuations for spot and unrecognized |
firm purchasecommitment
During the reporting period, the Company's hedging instruments hedged the gains and losses of the hedgeditems, and the realized gains and losses from the combination of futures and spot amounted to RMB143,892,300.XI Disclosure of Fair Values
1. Fair values of assets and liabilities measured at fair value at the end of the period
| 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 | 31,223,815.72 | 31,223,815.72 | ||
| 1. Financial assets that are measured at fair value and whose changes are included in the current profits and losses | 31,223,815.72 | 31,223,815.72 | ||
| (1) Investment in debt instruments | ||||
| (2) Investment in equity instruments | ||||
| (3) Derivative financial assets | 31,223,815.72 | 31,223,815.72 | ||
| 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 | 31,223,815.72 | 20,000,000.00 | 51,223,815.72 | |
| Ⅵ.Transactional financial liabilities | ||||
| 1. Financial liabilities measured at fair value with changes included in current profits and losses | ||||
| Including: transactional bonds issued | ||||
| derivative financial liability | ||||
| others | ||||
| 2. Financial liabilities designated as fair value through profit or loss | ||||
| Total liabilities continuously measured at fair value | ||||
2.Basis for determining market prices of continuous and non-continuous first level fair value
measurement items
The Company makes offers for first level fair value measurement according to open contracts of the futuresexchange and the quote from the bank on financial product at the end of the period.
3.Continuous and non-continuous third-level fair value measurement items adopt valuation techniquesand qualitative and quantitative information of important parameters
The company's investment in other equity instruments of the third level fair value measurement project is the“three notes”equity investment that without control, joint control and significant influence held by the company.On the basis of analyzing the operation status of the invested enterprise and combining with relevant situations, thecompany takes the investment cost as the fair value of other equity instrument investment for measurement at theend of the period.
XII Related Parties and Related Party Transactions
1. Parent Company of the Company
| Name of Parent Company | Registered Place | Nature of Business | Registered Capital (ten thousand Yuan) | Proportion of Shares Held by Parent Company in the Company (%) | Proportion of Voting Power Held by Parent Company in the Company (%) |
| Beijing Grain Group Co. Ltd. | Beijing | Investment Management | 90,000.00 | 39.68 | 39.68 |
Note: The ultimate controlling party is Beijing State-owned Capital Operation Management Co.,Ltd.
2. Subsidiaries of the Company
See 1. Equity in Subsidiaries under Section VIII of the Notes for details.
3. Joint Ventures and Affiliates of the Company
See 2. Equity in Joint Ventures or Affiliates under Section VIII of the Notes for details.
4. Other Related Parties
| Name of Other Related Party | Relationship with the Company |
| Beijing Liubiju Foods Co.,Ltd | Controlled by the ultimate controlling party |
| Shanghai Shounong Investment Holding Co.,Ltd | Controlled by the ultimate controlling party |
| Beijing Sanyuan Seed Industry Technology Co.,Ltd | Controlled by the ultimate controlling party |
| Beijing Dahongmen Grain Storage Co.,Ltd | Controlled by the ultimate controlling party |
| Beijing Gushun Foods Co.,Ltd | Controlled by the ultimate controlling party |
| Hebei Sanyuan Foods Co.,Ltd | Controlled by the ultimate controlling party |
| Beijing Jingliang E-commerce Co.,Ltd | Controlled by the ultimate controlling party |
| Beijing Hundred Years Chestnut Garden Ecological Agriculture Co.,Ltd | Controlled by the ultimate controlling party |
| Name of Other Related Party | Relationship with the Company |
| Beijing Sanyuan Foods Co.,Ltd | Controlled by the ultimate controlling party |
| Beijing Ershang Dahongmen Wulinlian Food Co.,Ltd | Controlled by the ultimate controlling party |
| Beijing Heiliu Herding Technology Co.,Ltd | Controlled by the ultimate controlling party |
| Beijing Ancient Boat Rice Co.,Ltd | Controlled by the ultimate controlling party |
| Hebei Luanping Huadu Food Co.,Ltd | Controlled by the ultimate controlling party |
| Beijing Shucheng Shanshui Real Estate Co.,Ltd | Controlled by the ultimate controlling party |
| Beijing Bai Jiayi Food Co.,Ltd | Controlled by the ultimate controlling party |
| Beijing Lanfeng Vegetable Distribution Co.,Ltd | Controlled by the ultimate controlling party |
| Beijing Jingliang Dongfang Grain and Oil Trading Co.,Ltd | Controlled by the ultimate controlling party |
| Beijing Zhangxin Grain Reserve 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 No.34 Food Supply Department Co.,Ltd | Controlled by the ultimate controlling party |
| Beijing Shounong Dot-to-Dot E-commerce Co.,Ltd | Controlled by the ultimate controlling party |
| Beijing Grain Group Co.,Ltd | Controlled by the ultimate controlling party |
| Beijing Shounong Commercial Chain Co.,Ltd | Controlled by the ultimate controlling party |
| Beijing Wuhuan Shuntong Supply Chain Management Co.,Ltd | Controlled by the ultimate controlling party |
| Beijing Shounong Consumption and Poverty Alleviation Double Creation Center Co.,Ltd | Controlled by the ultimate controlling party |
| Beijing Yunong Quality Agricultural Products Cultivation Co.,Ltd | Controlled by the ultimate controlling party |
| Beijing Shounong Taste Group Co.,Ltd | Controlled by the ultimate controlling party |
| Beijing Wang Zhihe Food Co.,Ltd | Controlled by the ultimate controlling party |
| Hebei Shounong Modern Agriculture Technology Co.,Ltd | Controlled by the ultimate controlling party |
| Shanghai Shounong Commercial Management Co.,Ltd | Controlled by the ultimate controlling party |
| Beijing Shounong Food Group Finance Co.,Ltd | Controlled by the ultimate controlling party |
| Beijing Shounong Food Group Co.,Ltd | Controlled by the ultimate controlling party |
| Shandong Fukuan Biological Engineering Co.,Ltd | Controlled by the ultimate controlling party |
| Chengde Sanyuan Jinxing Duck Industry Co.,Ltd | Controlled by the ultimate controlling party |
| Beijing Xinderun Agricultural Tourism Development Co.,Ltd | Controlled by the ultimate controlling party |
| Beijing Ailai Fahi Foods Co.,Ltd | Controlled by the ultimate controlling party |
| Beijing North Beijing Sugar & Wine Sales Co.,Ltd | Controlled by the ultimate controlling party |
| Beijing Ershang Yihe Sunshine Real Estate Co.,Ltd | Controlled by the ultimate controlling party |
| Beijing Shounong Big Kitchen Supply Chain Management Group Co.,Ltd | Controlled by the ultimate controlling party |
| Name of Other Related Party | Relationship with the Company |
| Beijing Jinggou Taiyu Real Estate Co.,Ltd | Controlled by the ultimate controlling party |
| Beijing Municipal Grain Research Institute Co.,Ltd | Controlled by the ultimate controlling party |
| Beijing Jingliang Green Valley trading Co., LTD | Controlled by the ultimate controlling party |
| Beijing Jinggong Logistics Co.,Ltd | Controlled by the ultimate controlling party |
| Beijing Sanjiadian Grain Storage Co.,Ltd | Controlled by the ultimate controlling party |
| Beijing Jingliang Canal Grain and Oil Trading Co.,Ltd | Controlled by the ultimate controlling party |
| Beijing Jingjing Jingu Grain Purchasing and Marketing Co.,Ltd | Controlled by the ultimate controlling party |
| Beijing Longqing Xiadu Military Grain Supply Co.,Ltd | Controlled by the ultimate controlling party |
| Beijing Desheng Hotel Co.,Ltd | Controlled by the ultimate controlling party |
| Beijing Shuangtong Huihe Agricultural Science and Technology Development Co.,Ltd | Controlled by the ultimate controlling party |
| Beijing Shounong Xiangshan Conference Center Co.,Ltd | Controlled by the ultimate controlling party |
| Beijing Beijiao Farm Co.,Ltd | Controlled by the ultimate controlling party |
| Beijing Yanqing Farm Co.,Ltd | Controlled by the ultimate controlling party |
| Beijing Longmen Vinegar Co.,Ltd | Controlled by the ultimate controlling party |
| Beijing Jingliang Biotechnology Group Co.,Ltd | Controlled by the ultimate controlling party |
| Tianjin Xincheng Kanda Pharmaceutical Co.,Ltd | Controlled by the ultimate controlling party |
| Beijing Xing Fashion Trade Co.,Ltd | Controlled by the ultimate controlling party |
| Beijing Taoshan Grain Reserve Co.,Ltd | Controlled by the ultimate controlling party |
| Beijing Shenghua Sihe Asset Management Co.,Ltd | Controlled by the ultimate controlling party |
| Beijing Municipal Grain Co.,Ltd | Controlled by the ultimate controlling party |
| Beijing Shounong Grain Reserve Co.,Ltd | Controlled by the ultimate controlling party |
| Beijing Jingliang Gurun Trade, Ltd. | Controlled by the ultimate controlling party |
| Beijing Shounong Food Emergency Security Center Co.,Ltd | Controlled by the ultimate controlling party |
| Beijing Yue Sheng Zhai Halal Food Co.,Ltd | Controlled by the ultimate controlling party |
| Beijing Yanqi Yue Sheng Zhai Halal Food Co.,Ltd | Controlled by the ultimate controlling party |
| Beijing Ershang Meat Food Group Co., Ltd. | Controlled by the ultimate controlling party |
| Beijing Yunong Quality Agricultural Products Cultivation Co.,Ltd Huairou Branch | Controlled by the ultimate controlling party |
| Beijing Shounong Development Co.,Ltd. | Controlled by the ultimate controlling party |
| Beijing Nanyuan Plant Oil Factory. | Controlled by the ultimate controlling party |
| Beijing Liubiju Food Co., Ltd. Huairou Brewery | Controlled by the ultimate controlling party |
| Beijing Sanyuan Seed Industry Technology Co.,Ltd Feed Branch | Controlled by the ultimate controlling party |
| Name of Other Related Party | Relationship with the Company |
| Beijing Sugar Cigarette And Wine Group Co.,Ltd. Sugar Management Branch | Controlled by the ultimate controlling party |
| Beijing Changyang Farming Co., Ltd. | Controlled by the ultimate controlling party |
| Beijing Southern Rural Agricultural Production and Operation Management Co., Ltd. | Controlled by the ultimate controlling party |
| Beijing Beishui Yongxing Aquatic Products Sales Co., Ltd. | Controlled by the ultimate controlling party |
| Beijing Ershang Jinghua Tea Industry Co., Ltd. | Controlled by the ultimate controlling party |
| Beijing Ershang Moqi Zhonghong Food Co., Ltd. | Controlled by the ultimate controlling party |
| Beijing Vegetable Co., Ltd. | Controlled by the ultimate controlling party |
| Beijing Ershang Muxiangyuan Qingzhen Meat Food Co. Ltd. | Controlled by the ultimate controlling party |
| Beijing Heiliu Herding Technology Co.,Ltd Food Center | Controlled by the ultimate controlling party |
| Beijing Huadu Sales Co. Ltd. | Controlled by the ultimate controlling party |
| Hebei Anping Dahongmen Food Co., Ltd. | Controlled by the ultimate controlling party |
| Kaifeng Dahongmmen Meat Food Co., Ltd. | Controlled by the ultimate controlling party |
| Beijing Haiyunxing shuichan Food Co., Ltd | Controlled by the ultimate controlling party |
| Beijing Jingmen Lianshi Asset Operation Management Co. Ltd. | Controlled by the ultimate controlling party |
| Beijing Shounong Commercial Chain Co., Ltd. Yanqing Branch | Controlled by the ultimate controlling party |
| Beijing Shounong Xiangshan Commercial Co., Ltd. | Controlled by the ultimate controlling party |
| Beijing Xinanjiao Grain Stroage Co. Ltd. | Controlled by the ultimate controlling party |
| Kangtai Culture Branch of Beijing Ershang Group Co., Ltd | Controlled by the ultimate controlling party |
| Beijing Cailanzi Group Co., Ltd | Controlled by the ultimate controlling party |
| Beijing Ershang Jingshen Seafood Co., Ltd | Controlled by the ultimate controlling party |
| Beijing Sanyuan Meiyuan Food Co., Ltd | Controlled by the ultimate controlling party |
| Beijing Changhua Property Service Center Co., Ltd | Controlled by the ultimate controlling party |
| Beijing Huanong Materials Co., Ltd | Controlled by the ultimate controlling party |
| Beijing Sidaokou Aquatic Products Trading Market Co., Ltd | Controlled by the ultimate controlling party |
| Fruit Business Branch of Beijing Nankou Farm Co., Ltd. | Controlled by the ultimate controlling party |
| Beijing Taiyu Property Management Co., Ltd | Controlled by the ultimate controlling party |
| Fresh Supermarket First Branch of Beijing Xinderun Hotel Management Co., Ltd. | Controlled by the ultimate controlling party |
| Fengzhen DahongmenAgri-animal Husbandry Co., Ltd | Controlled by the ultimate controlling party |
| Huai'an Jingliang Lvgu Food Co., Ltd | Controlled by the ultimate controlling party |
| Shanghai Sanyuan Dairy Co., Ltd | Controlled by the ultimate controlling party |
| Tongliao Dacang Grain Trading Co., Ltd | Controlled by the ultimate controlling party |
| Name of Other Related Party | Relationship with the Company |
| Wang Zhihe (Fujian) Food Co., Ltd | Controlled by the ultimate controlling party |
| Beijing Jingtang Dingsheng Trading Co., Ltd | Controlled by the ultimate controlling party |
| Beijing Baiyu Food Co., Ltd | Controlled by the ultimate controlling party |
| Beijing Haidian District two business vocational skills training school | Controlled by the ultimate controlling party |
5. Related-party Transactions
(1) Related-party transactions for purchasing and selling goods and provision and acceptance of labor servicesPurchase of goods or acceptance of labor services
| Related Party | Related-party Transaction | Current Amount | Amount of transactions approved（in ten thousands Yuan） | Whether the transaction limit is exceeded | Last Term Amount |
| Beijing Gushun Foods Co.,Ltd | Purchase of goods | 7,564,498.25 | 1,800.00 | No | 6,462,585.18 |
| Other related entities | Purchase of goods | 9,794,747.08 | 1,200.00 | No | 177,280,899.93 |
| Other related entities | Acceptance of labor services | 580.00 | No |
Sale of goods/ provision of labor services
| Related Party | Related-party Transaction | Current Amount | Last Term Amount |
| Beijing Bai Jiayi Food Co.,Ltd | Sale of goods | 956,697.25 | 2,028,592.00 |
| Beijing Ancient Boat Rice Co.,Ltd | Sale of goods | 573,980.75 | 77,187.02 |
| Beijing Jingliang Dongfang Grain and Oil Trading Co.,Ltd | Sale of goods | 1,341,520.28 | 1,578,881.67 |
| Beijing Lanfeng Vegetable Distribution Co.,Ltd | Sale of goods | 348,547.63 | 286,494.00 |
| Beijing Liubiju Food Co., Ltd. Huairou Brewery | Sale of goods | 54,495.41 | 6,684,323.12 |
| Beijing Sanyuan Seed Industry Technology Co.,Ltd Feed Branch | Sale of goods | 26,911,055.50 | 29,995,064.69 |
| Beijing Haidian Xijiao Grain and Oil Supply Station Co.,Ltd | Sale of goods | 874,862.38 | 1,738,000.00 |
| Beijing Jingjing Jingu Grain Purchasing and Marketing Co.,Ltd | Sale of goods | 1,008,073.39 | 655,540.00 |
| Beijing No.34 Food Supply Department Co.,Ltd | Sale of goods | 1,283,674.22 | 1,488,023.46 |
| Beijing Zhangxin Grain Reserve Co.,Ltd | Sale of goods | 804,587.15 | 1,356,413.11 |
| Beijing Shounong Development Co.,Ltd. | Sale of goods | 488,546.78 | 30,838.00 |
| Beijing Shounong Consumption and Poverty Alleviation Double Creation Center Co.,Ltd | Sale of goods | 4,945,882.56 | 5,309,640.00 |
| Related Party | Related-party Transaction | Current Amount | Last Term Amount |
| Beijing Wang Zhihe Food Co.,Ltd | Sale of goods | 13,829,319.37 | 15,469,952.89 |
| Beijing Wuhuan Shuntong Supply Chain Management Co.,Ltd | Sale of goods | 1,081,550.08 | 570,548.64 |
| Fengzhen DahongmenAgri-animal Husbandry Co., Ltd | Sale of goods | 243,453.21 | |
| Hebei Anping Dahongmen Food Co., Ltd. | Sale of goods | 233,410.08 | 621,651.37 |
| Hebei Luanping Huadu Food Co.,Ltd | Sale of goods | 22,679,467.01 | 21,221,360.94 |
| Hebei Shounong Modern Agriculture Technology Co.,Ltd | Sale of goods | 9,595,145.59 | 7,153,219.41 |
| Shanghai Shounong Investment Holding Co.,Ltd | Sale of goods | 221,340,202.14 | 216,123,328.83 |
| Hebei Sanyuan Foods Co.,Ltd | Sale of goods | 994,300.00 | |
| Other-related entities | Sale of goods | 1,389,957.38 | 1,542,690.43 |
| Beijing Shounong Food Group Co.,Ltd | Provision of services | 1,745,187.40 | 11,438,400.93 |
| Shanghai Shounong Investment Holding Co.,Ltd | Provision of services | 112,517.83 | 4,677,494.81 |
| Beijing Gushun Foods Co.,Ltd | Provision of services | 55,691.22 |
Related-party transactions for purchasing and selling goods and provision and acceptance of labor services:
The price of a related-party transaction shall be equal to the price charged for an unrelated-party transaction that issame as or similar to such related-party transaction.
(2) Related-party lease
If the Company is the lessee
| Name of Lessee | Name of Lessor | Type of Leased Asset | Rental cost of simplified treatment of short-term lease and low-value lease asset | Variable lease payment not included in the calculation of lease liabilities | ||
| Lease Expense Recognized in the Current Period | Lease Expense Recognized in the Prior Period | Lease Expense Recognized in the Current Period | Lease Expense Recognized in the Prior Period | |||
| Beijing Guchuan Edible Oil Co., Ltd. | Beijing Grain Group Co.,Ltd | House leasing | 580,000.00 | |||
| Beijing Guchuan Edible Oil Co., Ltd. | Beijing Nanyuan Plant Oil Factory. | House leasing | 323,809.52 | 323,809.52 | ||
| Beijing Jingliang Food Co., | Beijing Municipal Grain | House leasing | 1,618,878.70 | |||
| Ltd. | Research Institute Co.,Ltd | |||||
| Beijing jingliang gubi oil and grease co. LTD | Beijing Grain Group Co.,Ltd | House leasing | 1,150,480.00 | |||
| Beijing Jingliang Oil and Fat Co., Ltd. | Beijing Dahongmen Grain Storage Co.,Ltd | House leasing | 311,324.36 | |||
| Beijing Tianweikang Oil Distribution Center Co., Ltd. | Beijing Shounong Food Emergency Security Center Co.,Ltd | House leasing | 1,378,125.00 | 1,312,500.00 |
（Continued ）
| Name of Lessee | Payment of rent | Interest expense on lease liabilities | Increase in right-of-use assets | |||
| Lease Expense Recognized in the Current Period | Lease Expense Recognized in the Prior Period | Lease Expense Recognized in the Current Period | Lease Expense Recognized in the Prior Period | Lease Expense Recognized in the Current Period | Lease Expense Recognized in the Prior Period | |
| Beijing Guchuan Edible Oil Co., Ltd. | ||||||
| Beijing Guchuan Edible Oil Co., Ltd. | 323,809.52 | 323,809.52 | ||||
| Beijing Jingliang Food Co., Ltd. | 12,880,733.94 | 1,842,194.39 | ||||
| Beijing jingliang gubi oil and grease co. LTD | ||||||
| Beijing Jingliang Oil and Fat Co., Ltd. | 311,324.36 | |||||
| Beijing Tianweikang | ||||||
| Name of Lessee | Payment of rent | Interest expense on lease liabilities | Increase in right-of-use assets | |||
| Lease Expense Recognized in the Current Period | Lease Expense Recognized in the Prior Period | Lease Expense Recognized in the Current Period | Lease Expense Recognized in the Prior Period | Lease Expense Recognized in the Current Period | Lease Expense Recognized in the Prior Period | |
| Oil Distribution Center Co., Ltd. | ||||||
(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 | 249.88 | 223.83 |
(4) Other Related-party Transactions
| Guaranteed Party | Related-party Transaction | Current Amount | Last Term Amount |
| Beijing Gushun Foods Co.,Ltd | Brand royalty income | 1,497,800.00 | |
| Beijing Haidian District two business vocational skills training school | Training expenses | 1,650.00 | |
| Beijing Municipal Grain Research Institute Co.,Ltd | Telephone income | 19,163.48 | |
| Beijing Shounong Food Emergency Security Center Co.,Ltd | Electricity and other expenses | 92,671.26 | 63,518.42 |
| Beijing Shounong Food Group Finance Co.,Ltd | Interest income | 3,888,582.97 | 2,066,407.44 |
| Beijing Shounong Xiangshan Conference Center Co.,Ltd | Conference and other expenses | 24,801.89 | 4,433.97 |
6. Related party Receivables and Payables
(1) Receivables
| Item | Related-party | Closing Balance | Opening Balance | ||
| Book Balance | Provision for Bad Debts | Book Balance | Provision for Bad Debts | ||
| Monetary funds | Beijing Shounong Food Group Finance Co.,Ltd | 532,305,996.27 | 890,056,629.88 | ||
| Receivables | Beijing Ailai Fahi Foods Co.,Ltd | 21,289.60 | |||
| Receivables | Beijing Bai Jiayi Food Co.,Ltd | 191,250.00 | 228,000.00 | ||
| Item | Related-party | Closing Balance | Opening Balance | ||
| Book Balance | Provision for Bad Debts | Book Balance | Provision for Bad Debts | ||
| Receivables | Beijing Ershang Meat Food Group Co., Ltd. | 16,825.00 | 13,200.00 | ||
| Receivables | Beijing Ancient Boat Rice Co.,Ltd | 295,520.00 | |||
| Receivables | Beijing Gushun Foods Co.,Ltd | 1,500,635.00 | |||
| Receivables | Beijing Jingliang Dongfang Grain and Oil Trading Co.,Ltd | 285,663.50 | 212,077.75 | ||
| Receivables | Beijing Jinggou Taiyu Real Estate Co.,Ltd | 69,600.00 | |||
| Receivables | Beijing Lanfeng Vegetable Distribution Co.,Ltd | 56,250.00 | 36,765.00 | ||
| Receivables | Beijing Sanyuan Seed Industry Technology Co.,Ltd Feed Branch | 3,825,909.02 | 2,271,574.62 | ||
| Receivables | Beijing Huanong Materials Co., Ltd | 3,223.00 | |||
| Receivables | Beijing Jingjing Jingu Grain Purchasing and Marketing Co.,Ltd | 300,800.00 | |||
| Receivables | Beijing No.34 Food Supply Department Co.,Ltd | 67,680.00 | |||
| Receivables | Beijing Zhangxin Grain Reserve Co.,Ltd | 246,000.00 | 99,000.00 | ||
| Receivables | Beijing Shucheng Shanshui Real Estate Co.,Ltd | 6,730.00 | |||
| Receivables | Beijing Shounong Dot-to-Dot E-commerce Co.,Ltd | 53,886.00 | |||
| Receivables | Beijing Shounong Commercial Chain Co.,Ltd | 658.00 | |||
| Receivables | Beijing Shounong Xiangshan Commercial Co., Ltd. | 48,325.00 | |||
| Receivables | Beijing Shounong Consumption and Poverty Alleviation Double Creation Center Co.,Ltd | 2,088,600.00 | 399,500.00 | ||
| Receivables | Beijing Wuhuan Shuntong Supply Chain Management Co.,Ltd | 326,612.50 | |||
| Item | Related-party | Closing Balance | Opening Balance | ||
| Book Balance | Provision for Bad Debts | Book Balance | Provision for Bad Debts | ||
| Receivables | Hebei Anping Dahongmen Food Co., Ltd. | 178,200.00 | 86,000.00 | ||
| Receivables | Hebei Luanping Huadu Food Co.,Ltd | 13,145,439.04 | 3,619,958.60 | ||
| Receivables | Hebei Shounong Modern Agriculture Technology Co.,Ltd | 1,176,790.58 | 1,047,816.96 | ||
| Receivables | Kaifeng Dahongmmen Meat Food Co., Ltd. | 64,500.00 | |||
| Receivables | Beijing Sanyuan Foods Co.,Ltd | 112,290.00 | |||
| Receivables | Shanghai Shounong Investment Holding Co.,Ltd | 677,093.11 | |||
| Receivables | Beijing Ershang Dahongmen Wulinlian Food Co.,Ltd | 477.00 | |||
| Prepayment | Beijing Baiyu Food Co., Ltd | 550.00 | |||
| Other Receivables | Beijing Ancient Boat Rice Co.,Ltd | 50,000.00 | |||
(2) Payables
| Item | Related-party | Closing Balance | Opening Balance |
| Payables | Beijing Ershang Meat Food Group Co., Ltd. | 79,497.34 | 3,633.06 |
| Payables | Beijing Ancient Boat Rice Co.,Ltd | 64,711.01 | |
| Payables | Beijing Gushun Foods Co.,Ltd | 153,137.62 | 464,000.00 |
| Payables | Beijing Liubiju Foods Co.,Ltd | 458.76 | |
| Payables | Beijing Southern Rural Agricultural Production and Operation Management Co., Ltd. | 660.00 | 410.00 |
| Payables | Beijing Shounong Food Emergency Security Center Co.,Ltd | 1,378,125.00 | |
| Payables | Beijing Sugar Cigarette And Wine Group Co.,Ltd. Sugar Management Branch | 775.22 | 3,763.10 |
| Payables | Beijing Yanqi Yue Sheng Zhai Halal Food Co.,Ltd | 50.45 | |
| Payables | Beijing Shounong Grain Reserve Co.,Ltd | 720,000.00 | |
| Payables | Beijing Ershang Dahongmen Wulinlian Food Co.,Ltd | 96.79 | |
| Payables | Beijing Shounong Development Co.,Ltd. | 559,500.00 |
| Item | Related-party | Closing Balance | Opening Balance |
| Other payables | Kangtai Culture Branch of Beijing Ershang Group Co., Ltd | 210.00 | 210.00 |
| Other payables | Beijing Jingliang E-commerce Co.,Ltd | 42,432.00 | |
| Other payables | Beijing Grain Group Co.,Ltd | 4,606,680.00 | 3,456,200.00 |
| Other payables | Shanghai Shounong Investment Holding Co.,Ltd | 188,422.48 | |
| Contract liability | Beijing Shucheng Shanshui Real Estate Co.,Ltd | 3,091.74 | |
| Contract liability | Beijing Shounong Development Co.,Ltd. | 49,082.57 | |
| Contract liability | Beijing Shuangtong Huihe Agricultural Science and Technology Development Co.,Ltd | 2,201.83 | |
| Contract liability | Shanghai Shounong Investment Holding Co.,Ltd | 3,341,866.73 | 7,259,750.24 |
| Other current liability | Beijing Shuangtong Huihe Agricultural Science and Technology Development Co.,Ltd | 198.17 | |
| Other current liability | Shanghai Shounong Investment Holding Co.,Ltd | 300,768.01 | 653,377.52 |
| Other current liability | Beijing Shucheng Shanshui Real Estate Co.,Ltd | 278.26 | |
| Other current liability | Beijing Shounong Development Co.,Ltd. | 4,417.43 | |
| Account collected in advance | Beijing Jingliang E-commerce Co.,Ltd | 42,432.00 |
XIII Share based paymentThere are no share-based payments incurred this year for the company.XIV Commitments and ContingenciesBy the end of this report, the actual amount of guarantee of the company and its holding subsidiaries is 1.589billion yuan, accounting for 50.62% of the company's audited net assets attributable to the parent company in thelatest period, which are all guarantees between the company and its holding subsidiaries. There is no guaranteeprovided by the Company and its holding subsidiary to any entity other than the consolidated statement, and thereis no delay in external guarantee, guarantee involving litigation or loss due to the judgment of loss due to guarantee.XV Events after the Balance Sheet Date
1. Distribution of Profits
As of the date of this financial report, the company has no important non adjustment matters that need to bedisclosed.XVI Other Important Matters
1. Annuity Plan
Basic information of annuity: Beijing Jingliang Food Co., Ltd., Jingliang (Tianjin) grain and Oil Industry Co.,
Ltd., Beijing Guchuan Oil Co., Ltd., Beijing Eisen Lubao Oil Co., Ltd., Beijing Jingliang Oil Co., Ltd., BeijingGuchuan Bread Food Co., Ltd., and Beijing Tianweikang Oil Distribution Center Co., Ltd. of the companyparticipated in the enterprise annuity plan of Beijing shounong Food Group Co., Ltd., and formulated theimplementation rules of their respective enterprises under the annuity plan. The name of the annuity plan is PingAn Jinxiu life enterprise annuity plan; the trustee and account manager are ping an Endowment Insurance Co., Ltd.;the trustee is China CITIC Bank Co., Ltd.
2. Information of Division
(1) Basis of determination and accounting policies for reporting of divisions
The Company's businesses consist of food processing, oil and grease and so on according to its internalorganizational structure, management requirements and internal reporting system. The Company's managementregularly evaluates the operating results of these divisions to determine the allocation of resources to them andevaluate their performance. The information reported by divisions should be disclosed according to the accountingpolicies and measurement standards adopted by such divisions when they are reporting to the management. Thesemeasurement bases should 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 | Offset Among Divisions | Total |
| Operating income | 437,380,249.12 | 5,118,555,457.42 | 28,712.40 | 5,555,906,994.14 |
| Operating costs | 344,064,429.13 | 4,987,979,901.44 | 28,712.40 | 5,332,015,618.17 |
| Total assets | 999,091,734.40 | 6,010,168,087.78 | 432,000,072.00 | 6,577,259,750.18 |
| Total liabilities | 107,509,630.38 | 3,351,703,390.89 | 432,000,072.00 | 3,027,212,949.27 |
XVII Notes to Main Financial Statement Items of Parent Company
1. Monetary funds
| Item | Closing Balance | Opening Balance |
| Cash on hand | ||
| Bank Deposits | 338,712,954.06 | 23,734,670.48 |
| Other Currency Funds | 8,589.67 | 8,585.33 |
| Total | 338,721,543.73 | 23,743,255.81 |
2. Other Receivable
| Item | Closing Balance | Opening Balance |
| Dividends receivable | ||
| Other receivables | 910,000,000.00 | 950,000,000.00 |
| Total | 910,000,000.00 | 950,000,000.00 |
(1) Other Receivables
A. Disclosed according to aging
| Aging | Closing Balance | Opening Balance |
| Within 1 Year (including 1 year) | 290,000,000.00 | 800,000,000.00 |
| 1 to 2 years (including 2 years) | 510,000,000.00 | 29,000,000.00 |
| 2 to 3 years (including 3 years) | 29,000,000.00 | 121,000,000.00 |
| 3 to 4 years (including 4 years) | 81,000,000.00 | |
| Total | 910,000,000.00 | 950,000,000.00 |
B. 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 Entities | 910,000,000.00 | 950,000,000.00 |
| Total | 910,000,000.00 | 950,000,000.00 |
C. Other receivables according to top five of balance at end of period collected by debtors
| Name of Organization | Balance at End of Period | Proportion in overall Closing Balance of other receivables (%)%） | Nature of Funds | Aging | Closing Balance of bad debt reserves |
| Beijing Jingliang Food Co., Ltd. | 910,000,000.00 | 100.00 | Related party borrowing | Within 4 years | |
| Total | 910,000,000.00 | 100.00 |
3. Long-term Equity Investment
| Item | Closing Balance | ||
| Book Balance | Provision for Impairment | Book Value | |
| Investment in subsidiaries | 2,340,799,283.19 | 2,340,799,283.19 | |
| Total | 2,340,799,283.19 | 2,340,799,283.19 | |
(Continued)
| Item | Opening Balance | ||
| Book Balance | Provision for Impairment | Book Value | |
| Investment in subsidiaries | 2,625,657,283.19 | 2,625,657,283.19 | |
| Total | 2,625,657,283.19 | 2,625,657,283.19 | |
Investment in subsidiaries
| Invested Entity | Opening Balance | Current Increase | Current Decrease | Closing Balance | Current Provision for Impairment | Closing Balance of Provision for Impairment |
| Beijing Jingliang Food Co., Ltd. | 2,336,639,964.05 | 284,858,000.00 | 2,051,781,964.05 | |||
| Zhejiang little prince Food Co., Ltd | 249,017,319.14 | 249,017,319.14 | ||||
| Jingliang (Yangpu) Grain and Oil Industry Co., Ltd. | 6,500,000.00 | 6,500,000.00 | ||||
| Jingliang (Caofeidian) Agricultural Development Co., Ltd. | 25,500,000.00 | 25,500,000.00 | ||||
| Jingliang (Beijing) Food Marketing Management Co., Ltd | 8,000,000.00 | 8,000,000.00 | ||||
| Total | 2,625,657,283.19 | 284,858,000.00 | 2,340,799,283.19 |
4. Operating Income and Operating costs
Details of operating income and operating costs
| Item | Current Amount | Last Term Amount | ||
| Income | Cost | Income | Cost | |
| Other businesses | 2,047,313.31 | 170,581.26 | 11,839,311.03 | 170,581.26 |
| Total | 2,047,313.31 | 170,581.26 | 11,839,311.03 | 170,581.26 |
5. Income from investment
| Sources of investment income | Current Amount | Last Term Amount |
| Long term equity investment income calculated by cost method | 191,582.04 | 150,814.85 |
| Investment income from disposal of long-term equity investments | 27,829,877.46 | |
| Total | 28,021,459.50 | 150,814.85 |
XVIII Supplementary Information
1. Details of non-recurring profit and loss in the reporting period
| Details of non-recurring profit and loss | Amount | Note |
| Gains and losses on disposal of non current assets， including provision for asset impairment write-off portion | -59,859.78 | |
| 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) | 5,876,740.78 | |
| 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 the holding of financial assets and financial liabilities by non-financial enterprises,as well as the investment income from the disposal of financial assets and financial liabilities | ||
| Income from custodial fees obtained from entrusted operations | 1,646,403.21 | |
| Other non-operating income and expenses other than the above | 5,907,678.04 | |
| Other profit and loss items that meet the definition of non recurring profit and loss | ||
| Less: amount affected by income tax | 1,166,874.83 | |
| Non recurring profit and loss attributable to minority shareholders (after tax) | 1,435,780.72 | |
| Total | 10,768,306.70 |
2. Return on equity and earnings per share
Situation on 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 | 0.76 | 0.03 | 0.03 |
| Net profit attributable to common shareholders after deduction of non-recurring gains and losses | 0.42 | 0.02 | 0.02 |
Hainan Jingliang Holdings Co., Ltd.
26 August 2024