京粮B：2022年半年度报告(英文版)

HAINAN JINGLIANGHOLDINGS CO., LTD.

SEMI-ANNUAL REPORT 2022

HAINAN JINGLIANG HOLDINGS CO., LTD.

SEMI-ANNUAL REPORT 2022Part I Important NotesThis Report is based on the full Semi-annual Report of Hainan Jingliang Holdings Co., Ltd. (together with itsconsolidated subsidiaries, the “Company”, except where the context otherwise requires). In order for a fullunderstanding of the Company’s operating results, financial condition and future development plans, investorsshould carefully read the aforesaid full text, which has been disclosed together with this Report on the mediadesignated by the China Securities Regulatory Commission (the “CSRC”).All the Company’s Directors have attended the Board meeting for the review of this Report.This Report has been prepared in both Chinese and English. Should there be any discrepancies or misunderstandingsbetween the two versions, the Chinese version shall prevail.Independent auditor’s modified opinion:

□ Applicable ? Not applicable

Board-approved interim cash and/or stock dividend plan for ordinary shareholders:

□ Applicable ? Not applicable

The Company has no interim dividend plan, either in the form of cash or stock.Board-approved interim cash and/or stock dividend plan for preferred shareholders:

□ Applicable ? Not applicable

Part II Key Corporate Information

1. Stock Profile

Stock name	JLKG, JL-B	Stock code	000505, 200505
Stock exchange for stock listing	Shenzhen Stock Exchange
Contact information	Board Secretary	Securities Representative
Name	Guan Ying	Gao Deqiu
Office address	15/F, Jing Liang Building, NO. 16 East Third Ring Middle Road, Chaoyang District, Beijing	15/F, Jing Liang Building, NO. 16 East Third Ring Middle Road, Chaoyang District, Beijing
Tel.	010-51672130	010-51672029
E-mail address	[e-mail]	[e-mail]

2. Key Financial Information

Indicate by tick mark whether there is any retrospectively restated datum in the table below.

□ Yes ? No

H1 2022

H1 2021

Change (%)

Operating revenue (RMB)	5,512,781,270.32	5,328,246,835.83	3.46%
Net profit attributable to the listed company’s shareholders (RMB)	72,908,330.15	88,328,197.91	-17.46%
Net profit attributable to the listed company’s shareholders before exceptional gains and losses (RMB)	71,265,739.47	83,273,337.40	-14.42%
Net cash generated from/used in operating activities (RMB)	-174,610,409.43	277,850,445.45	-162.84%
Basic earnings per share (RMB/share)	0.10	0.12	-16.67%
Diluted earnings per share (RMB/share)	0.10	0.12	-16.67%
Weighted average return on equity (%)	2.47%	3.21%	-0.74%
	30 June 2022	31 December 2021	Change (%)
Total assets (RMB)	6,983,489,964.46	6,046,600,058.90	15.49%
Equity attributable to the listed company’s shareholders (RMB)	2,989,382,153.38	2,915,802,291.05	2.52%

3. Shareholders and Their Shares at Period-End

Unit: share

Number of ordinary shareholders		74,129	Number of preferred shareholders with resumed voting rights (if any)		0
Top 10 shareholders
Name of shareholder	Nature of shareholder	Shareholding percentage	Number of shares	Restricted shares	Pledged, marked or frozen shares
					Status	Shares
BEIJING GRAIN GROUP CO., LTD.	State-owned legal person	39.68%	288,439,561	0
BEIJING STATE-OWNED CAPITAL OPERATION AND MANAGEMENT COMPANY LIMITED	State-owned legal person	6.67%	48,510,460	0
WANG YUECHENG	Domestic natural person	5.66%	41,159,887	41,159,887
LISHERYNZHANMING	Foreign natural person	0.47%	3,397,400	0
MEI JIANYING	Domestic natural person	0.36%	2,604,203	0
WANG ZHIQIANG	Domestic natural person	0.30%	2,193,323	0
ZHANG XIAOXIA	Domestic natural person	0.27%	1,949,250	0
LIU XIN	Domestic natural person	0.25%	1,806,800	0
WANG XIAOXING	Domestic natural person	0.23%	1,679,200	0
YANG WENLI	Domestic natural person	0.17%	1,270,000	0
Connected or acting-in-concert parties among shareholders above		① Beijing State-Owned Capital Operation and Management Company Limited owns 100% of Beijing Grain Group Co., Ltd., and Beijing Grain Group Co., Ltd. is the controlling shareholder of the Company (a 39.68% holding). ② Wang Yuecheng is a Deputy General Manager of the Company. Apart from that, the Company does not know whether there are any other related parties or acting-in-concert parties among the top 10 shareholders.
Shareholders conducting margin trading (if any)		Shareholder Wang Xiaoxing holds 1,679,200 shares in the Company through his account of collateral securities for margin trading in Soochow Securities Co., Ltd.

4. Change of Controlling Shareholder or Actual Controller in Reporting PeriodChange of the controlling shareholder in the Reporting Period:

□ Applicable ? Not applicable

The controlling shareholder remained the same in the Reporting Period.Change of the actual controller in the Reporting Period:

□ Applicable ? Not applicable

The actual controller remained the same in the Reporting Period.

5. Numbers of Preferred Shareholders and Shareholdings of Top 10 of ThemNo preferred shareholders in the Reporting Period.

6. Outstanding Bonds at the Date when this Report Was Authorized for Issue

□ Applicable ? Not applicable

Part III Significant Events

1. The Company and Beijing Capital Agriculture Group have signed the Conditionally Effective ShareSubscription Agreement, and the Supplementary Agreement to the Conditionally Effective Share SubscriptionAgreement. As such, the Company intends to carry out a private placement of A-stock shares to Beijing CapitalAgriculture Group to raise no more than RMB523.67 million (inclusive) (including issuance costs). Having beenapproved by the Company’s Board of Directors and general meeting of shareholders, the non-public offering sharesand related-party transaction is subject to final approval by the China Securities Regulatory Commission.

2. In order to establish and refine its long-term incentive mechanism, attract and retain talent, and fully mobilizekey employees, the Company disclosed on 23 March 2022 the 2022 Restricted Share Incentive Plan (Draft) and ItsReport of Hainan Jingliang Holdings Co., Ltd. There are 7.21 million restricted shares (approximately 0.99% of theCompany’s total share capital) to be issued. They will be granted to no more than 45 awardees for the first grant.This plan is subject to approval by State-owned Assets Supervision and Administration Commission of People’sGovernment of Beijing Municipality and the Company’s general meeting of shareholders.

3. On 1 July 2022, the Company signed a Cooperation Agreement with the Yangpu Economic DevelopmentZone Administration Commission, Sinograin (Hainan) Co., Ltd., and SDIC Yangpu Port Co., Ltd. For details, seethe relevant announcement disclosed by the Company on 2 July 2022.Part VI Financial Statement

Prepared by: Hainan Jingliang Holdings Co., Ltd.Semi-annual of 2022Monetary Unit: RMB Yuan
ItemsAmount for the current periodAmount for the prior period
I. Total operating income382,744.96 295,530.28
Including: operating income382,744.96 295,530.28
△Interest income
△Earned premium
△Fee and commission income
II. Total operating cost-500,690.01 3,096,153.08
Including: operating cost170,581.26 170,581.26
△Interest expenses
△Fee and commission expenses
△Surrenders
△Net claims paid
△Net appropriation for insurance contracts reserves
△Dividend expenses for policyholders
△Reinsurance expenditures
Tax and surcharges201,808.38 98,713.86
Selling expenses
Administration expenses2,692,234.13 2,825,749.10
Research and development expenses
Financial expenses-3,565,313.78 1,108.86
Including: interest expenses
Interest income3,566,419.69 1,190.61
Add: Other income12,794.10 37,431.93
Income from investment (Losses shall be filled in with “-”)-28,691.03
Including: income from investment on joint venture and cooperative enterprise
Income from derecognition of financial assets measured at amortized cost (Losses shallbe filled in with “-”)
△Income from exchange(Losses shall be filled in with “-”)- -
Income from net exposure hedging(Losses shall be filled in with “-”)
Income from changes in fair value (Losses shall be filled in with “-”)
Credit impairment loss(Losses shall be filled in with “-”)-600.00
Income from assets impairment(Losses shall be filled in with “-”)-
Income from asset disposal (Losses shall be filled in with “-”)-31,898.67
III. Total profit (Total losses shall be filled in with “-”)895,629.07 -2,823,780.57
?Add: non-operating income
Less: non-operating expenditure
IV. Total profit (Total losses shall be filled in with “-”)895,629.07 -2,823,780.57
Less: income tax expense
V. Net profit (Net loss shall be filled in with “-”)895,629.07 -2,823,780.57
(I) Net profit from continuing operations (Net loss shall be filled in with “-”)895,629.07 -2,823,780.57
(II) Net profit from discontinuing operations (Net loss shall be filled in with “-”)
VI. Net of tax from other comprehensive income
(I) Other comprehensive income that cannot be reclassified into the profit and loss
（1）Other comprehensive income that cannot be reclassified into the profit and loss
（2）Other comprehensive income that cannot be transferred to gains and lossesunder 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
(II) Other comprehensive income that will be reclassified into the profit and loss- -
（1）Other comprehensive income that can be transferred to gains and losses underthe equity method

- -

- -
	（2）Changes in fair value of other debt investments
	（3）Reclassification of financial assets included in other comprehensive income
	（4）Provision for credit impairment of other debt investments
	（5）Cash flow hedge reserve- -
	（6）Balance arising from the translation of foreign currency- -
	（7）Other
	VII. Total comprehensive income895,629.07 -2,823,780.57
	VIII. Earnings per share
	(I) Basic earnings per share
	(II) Diluted earnings per share

Statement of Comprehensive Income

- - - - - - (VI) Others

- - (VI) Others

-

- - 1. Withdrawal for current period2. Use for current period(VI) Others

-

- 1. Withdrawal for current period2. Use for current period(VI) Others

Hainan Jingliang Holdings Co., Ltd.Notes to the Semi-Annual of 2022 Financial Statements(Unless otherwise stated, the amount unit is RMB Yuan)

I. Basic Information of the Company

1. Place of incorporation, form of organization and head office addressHainan Jingliang Holdings Co., Ltd. (hereinafter referred to as "the Company" or "Company" or"Jingliang Holdings") is established in accordance with the Hainan Provincial People's Government GeneralOffice QFBH (1992) No.1, approved by QY (1992) SGZ No. 6 Document of the People's Bank of HainanProvince and re-registered by Hainan Pearl River Enterprise Company on January 11, 1992. The Companyissued 81,880,000 shares in total upon re-registration, of which 60,793,600 shares were converted from thenet assets of the original company and 21,086,400 shares were newly issued. And the name of the Companyis Hainan Pearl River Enterprise Co., Ltd. The business license registration number of the joint-stockcompany is 20128455-6, and the holding parent company Guangzhou Pearl River Enterprise Group holds36,393,600 shares, accounting for 44.45%. Approved by ZGB (1992) No. 83 Document of the People's Bankof China in December 1992, the additional 21,086,400 shares were listed on the Shenzhen Stock Exchangefor trading. The industry involved is real estate.On March 25, 1993, in response to QGBH (1993) No.028 of Hainan Provincial Leading Group Officeand SRYFZ (1993) No.099 of Shenzhen Special Economic Zone Branch of the People's Bank of China, theCompany increased its share capital by converting the original share capital into 139,196,000 shares(according to distribution of 10, delivery of 5 and transfer of 2), with the controlling shareholder GuangzhouPearl River Enterprises Group holding 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 sharesafter the increase. The controlling shareholder, Guangzhou Pearl River Enterprises Group, holds 97,938,240shares, 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 theadditional B shares were issued, and the share capital of the Company after the increase was 377,650,800shares. The holding parent company, Guangzhou Pearl River Enterprises Group, held 112,628,976 shares,accounting for 29.82% of the total.

In 1999, Guangzhou Pearl River Enterprises Group transferred all 112,628,976 shares to Beijing WanfaReal Estate Development Co., Ltd.. After the transfer of shares was completed in June 1999, Beijing WanfaReal Estate Development Co., Ltd. held 112,628,976 shares of the Company, accounting for 29.82% of the

total shares of the Company, and became the controlling shareholder of the Company.On January 10, 2000, the name of the Company was changed to Hainan Pearl River Holding Co., Ltd.and the Business License for Enterprise Legal Person was renewed by Industrial & CommerceAdministration Bureau of Hainan Province.On August 17, 2006, the reform plan of the split share structure of the Company was implemented. TheCompany transferred 49,094,604 shares of capital stock to all shareholders at the ratio of 10 to 1.3. Theoriginal non-tradable shareholders transferred the increased shares to the tradable A-share holders. BeijingWanfa Real Estate Development Co., Ltd. reimbursed the consideration shares of the non-tradableshareholders who have not expressly expressed their opinions. The converted total share capital was426,745,404 shares, and the original controlling shareholder Beijing Wanfa Real Estate Development Co.,Ltd. held 107,993,698 shares, accounting for 25.31%. Shareholders of non-tradable shares repaid 3,289,780shares in consideration of the split share structure in 2007. Shareholders of non-tradable shares repaid1,196,000 shares in consideration of the split share structure in 2009.On 2 September 2016, Beijing Wanfa Real Estate Development Co., Ltd., the original controllingshareholder, transferred all of its 112,479,478 shares to Beijing Grain Group Co., Ltd. (hereinafter referredto as "Beijing Grain Group"). Upon completion of the share transfer in September 2016, Beijing Grain GroupCo., Ltd. held 112,479,478 shares, accounting for 26.36% of the total shares of the Company. In November2016, based on the confidence in the subject matter of the material asset restructuring and the futuredevelopment of the Company, Beijing Grain Group Co., Ltd. decided to increase its shareholding throughcentralized bidding in the secondary market. After the increase, it held 123,561,963 shares of the Company,accounting for 28.95% of the total number of shares, and became the largest shareholder of the Company.The Company determined July 31, 2017 as the delivery date of material assets in accordance with thematerial assets restructuring plan and the delivery agreement. On September 14, 2017, approved pursuantto the resolution of the Second Extraordinary General Meeting of Shareholders of the Company onNovember 18, 2016 and the Approval Reply of the China Securities Regulatory Commission dated July 28,2017 On Approval of Hainan Pearl River Holding Co., Ltd. to Purchase Assets and Raise Supporting Fundsfrom Beijing Grain Group Co., Ltd. (ZJXK (2017) No.1391): 1) The Company purchased assets from theoriginal shareholders of Beijing Grain Food Co., Ltd. (hereinafter referred to as Beijing Grain Food) byissuing 210,079,552 shares of the balance between the transaction price of the injected assets and the assetsto be purchased (the difference between the transaction price of the injected assets and the assets to bepurchased was RMB 1,699.5436 million yuan). The par value in the issuance was RMB 1.00 per share andthe issuance price was RMB 8.09 per share; 2) The Company has issued 48,965,408 non-public shares ofthe 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 was RMB8.82 per share. The shareholder Beijing Grain Group conducted subscription in monetaryfunds. Upon completion of the issue, the registered capital was RMB 685,790,364.00 and the share capitalwas RMB 685,790,364.00. Beijing Grain Group, which accounted for 42.06% of the total number of shares,became the largest shareholder of the Company.On November 21, 2019, with the approval of Beijing Shounong Food Group Co., Ltd. (BeijingShounong Food publish [2019] No. 212), Approval on the Plan of Purchasing Assets by Cash and IssuingShares of Hainan Jingliang Holdings Co., Ltd, On April , 2020, with the approval of Approval of HainanJingliang Holding Co., Ltd. Issuance Shares to Wang Yuecheng to Purchase Assets by China SecuritiesRegulatory Commission [2020] No. 610, the company shall not issue more than 41,159,887 new shares inprivate offering to raise funds supporting the purchase of assets through the issued shares. The Companyand its subsidiary, Beijing Jingliang Food Co., Ltd., purchased the 25.1149% equity stake of Zhejiang LittlePrince by cash and issuance of shares.As of June 30th, 2022, the company has issued 726,950,251.00 shares, and the company's share capitalis 726,950,251.00 yuan; Uniform Social Credit Code: 914600002012845568; Registration authority: HainanMarket Supervision Administration; Company type: Limited Company (Listed, State-controlled);Registered address: F29, Dihao Building, Pearl River Square, Binhai Avenue, Haikou City; Legalrepresentative: Wang Chunli.

2. The nature of the Company's business and its main business activitiesThe Company belongs to manufacturing-agricultural and sideline food processing industry. Its mainbusiness activities mainly includes: food, beverages, agricultural and sideline products, vegetable proteinsand their products, organic fertilizers, microbial fertilizers, production and marketing of agriculturalfertilizers; land consolidation, soil remediation; agricultural comprehensive planting development, animalhusbandry and aquaculture, agricultural equipment production and marketing; computer network technology,investment in communication projects, research and development and application of high-tech products;investment and consultation of environmental protection projects; animation, graphic design; import andexport trade in goods and technology; rental of own premises.The Company and its subsidiaries are principally engaged in the processing, production and sales offoodstuffs, agricultural and sideline products, grease, oils, and leisure foods.

3. The name of the parent company and the ultimate parent company.The parent company of the company is Beijing Grain Group Co., Ltd., and the ultimate parent companyis Beijing Capital Agricultural Food Group Co., Ltd.

4. The approval institution and the approval date of the financial statements.These financial statements have been approved and reported by the Board of Directors of the Company

in its resolution dated August 23rd, 2022.

5. Consolidation scope

The consolidated scope of the consolidated financial statements of the company is determined on thebasis of control, including the financial statements of the company and all subsidiaries. Subsidiaries refer toenterprises or entities controlled by the Company.A total of 19 subsidiaries of the Company were included in the scope of consolidation on June 30th,2022, as detailed in Note 8 Interests in Other Entities. The consolidation scope of the company in the currentperiod is increased by one account compared with that in the previous period. For details, please refer tonote 7 Change ofConsolidationScope.II. Preparation Basis for Financial Statements

1.Preparation Basis

Based on the assumption of going concern and according to actual transaction events, the financialstatements are prepared in accordance with the relevant provisions of Accounting Standard for BusinessEnterprises and the following stated Significant Accounting Policies and Estimates.

2. Going concern

The Company has a going concern capability for 12 months from the end of the reporting period andno material matters affecting the company's going concern capability were found. Therefore, the financialstatements are presented on a going concern basis is reasonable.

III. Significant Accounting Policies and Estimates

The Company and its subsidiaries are engaged in the processing, production and sales of food,agricultural and sideline products, grease, oil and leisure food. According to the characteristics of actualproduction and operation and the provisions of relevant accounting standards for business enterprises, theCompany and its subsidiaries have formulated a number of specific accounting policies and accountingestimates for transactions and events such as revenue recognition. For details, please refer to the descriptionsin Note Ⅲ, 26 Revenue. For descriptions of the significant accounting judgments and estimates made by themanagement, please refer to Note Ⅲ, 32 Significant Accounting Judgments and Estimates.

1. Statement of Compliance of Accounting Standards for Business Enterprises

The financial statements prepared by the Company based on the above preparation basis conform tothe requirements of the Accounting Standards for Business Enterprises and their application guidelines,explanations and other relevant provisions (collectively referred to as "ASBE") and truly and completelyreflect the Company's financial status, operating results, cash flow and other relevant information.

In addition, the preparation of this financial report refers to the Rules for Preparation and Reporting

Information Disclosure of Companies Offering Securities to the Public No.15-General Provisions onFinancial Reports revised by China Securities Regulatory Commission in 2014 and the presentation anddisclosure requirements in Notice on Matters Related to the Implementation of the New AccountingStandards for Enterprises by Listed Companies (Accounting Department Letter [2018] No. 453)

2. Accounting Period and Business Cycle

The accounting period of the Company is divided into an annual period and an interim period. Theaccounting interim period refers to the reporting period shorter than a full accounting year. The fiscal yearof the Company adopts the Gregorian calendar year, that is, from January 1 to December 31 of each year.The normal business cycle is the period from the time the Company purchases assets for processing tothe time when cash or cash equivalents are realized. The Company uses 12 months as an business cycle anduses it as a liquidity classification standard for assets and liabilities.

3. Bookkeeping Standard Currency

RMB is the currency in the main economic environment in which the Company and its domesticsubsidiaries operate. The Company and its domestic subsidiaries use RMB as the bookkeeping standardcurrency. The offshore subsidiaries of the Company determine USD as their bookkeeping standard currencybased on the currencies in the main economic environment in which they operate. The currency used by theCompany in preparing these financial statements is RMB.

4. The Accounting Treatment of Business Combination under the Same Control and DifferentControl

Business Combination refers to the transaction or event in which two or more separate enterprises aremerged to form one reporting entity. Business combination can be divided into business combination underthe same control and business combination under different control.

(1) Business combination under the same control

Enterprises participating in the combination are ultimately controlled by the same party or multipleparties before and after the combination, and the control is not temporary, so it is the business combinationunder the same control. In case of business combination under the same control, the party that obtains controlof other enterprises participating in the combination on the combination date shall be the combination party,and the other enterprises participating in the combination shall be the merged party. The combination daterefers to the date on which the combination party actually acquires control over the merged party.

The assets and liabilities acquired by the combination party are measured at the book value of themerged party at the date of consolidation, including goodwill that was formed during acquisition by endcontroller. If the difference between the book value of the net assets acquired by the merging party and thebook value of the merged consideration (or the total par value of the issued shares) paid by the merging

party, and the capital reserve (share capital premium) shall be adjusted; If the capital reserve (equity premium)is insufficient to offset, the retained earnings shall be adjusted.

The direct expenses incurred by the merging party for the purpose of business combination shall beincluded in the profits and losses of the current period when they are incurred.

(2) Business combination under different control

If the enterprises participating in the merger are not ultimately controlled by the same party or multipleparties before and after the merger, the enterprise merger is not under the same control. In case of businesscombination under different control, the party that obtains control of other enterprises participating in thecombination on the date of purchase shall be the Purchaser, and the other enterprises participating in thecombination shall be the Purchasee. Purchase date means the date on which the Purchaser actually acquirescontrol of the Purchasee.

For business combination under different control, the merger cost includes the assets, liabilities and fairvalue of equity securities issued by the Purchaser in order to obtain the control over the Purchasee on thedate of purchase, and the intermediary fees such as audit, legal service, appraisal and consultation and othermanagement fees for the enterprise merger are used to record into the profits and losses of the current periodwhen incurred. The transaction costs of equity or debt securities issued by the Purchaser as a mergerconsideration are included in the initial recognition amount of the equity or debt securities. Contingentconsideration involved shall be included in the consolidation cost at its fair value at the purchase date, andthe consolidation goodwill shall be adjusted accordingly if new or further evidence of the existence ofcircumstances at the purchase date appears within 12 months after the purchase date and the adjustment orconsideration is required. The consolidation cost incurred by the Purchaser and the identifiable net assetsacquired during the consolidation are measured at the fair value at the date of purchase. The differencebetween the merger costs and the fair value shares of the identifiable net assets of the Purchasee at thepurchase date obtained in the merger is recognized as goodwill. If the combined cost is less than the fairvalue of the identifiable net assets of the Purchasee in the merger, first, the fair value of the identifiableassets, liabilities and contingent liabilities of the Purchasee and the measurement of the consolidation costshall be re-checked. If the consolidation cost is still smaller than the fair value share of the identifiable netassets of the Purchased obtained in the consolidation after the re-check, the difference shall be recorded intothe profits and losses of the current period.

When the Purchaser acquires the deductible temporary difference of the Purchasee, if it fails torecognize the deferred income tax assets on the date of purchase because it does not meet the recognitionconditions for the deferred income tax, and within 12 months of the date of purchase, new or furtherinformation is obtained indicating that the relevant circumstances at the purchase date already exist and theeconomic benefits from the temporary difference deductible by the purchaser on the purchase date are

expected to be realized, the relevant deferred income tax assets shall be recognized, and the goodwill shallbe reduced. If the goodwill is not sufficiently offset, the difference shall be recognized as the current profitor loss; In addition to the above circumstances, the deferred income tax assets related to the enterprise mergerare recognized and included in the current profits and losses.Through multi-transaction and step-by-step business combination under different control, according tothe Circular of the Ministry of Finance on Printing and Issuing the Interpretation of Accounting Standardsfor Business Enterprises No.5 (CK (2012) No.19) and Article 51 of the Accounting Standards for BusinessEnterprises No.33-Consolidated Financial Statements on the judgment criteria of "package deal" (see 5 (2)of Note 3), it is determined whether the multiple transactions belong to the "package deal". In the case of a"package deal", the accounting treatment shall be performed with reference to the description in thepreceding paragraphs of this section and Note 3, 13 "Long-term Equity Investments"; If the transaction isnot a "package deal", the accounting treatment shall be distinguished between the individual financialstatements and the consolidated financial statements:

In the individual financial statements, the sum of the book value of the equity investment held by thePurchaser prior to the purchase date and the cost of the new investment at the purchase date shall be takenas the initial investment cost of the investment; Where the equity of the Purchased held before the date ofpurchase involves other comprehensive income, the other consolidated income associated with theinvestment is accounted for on the same basis as the assets or liabilities directly disposed of by the Purchaser(i.e., except for the corresponding share in the change caused by the acquisition of the net liability or netassets of the defined benefit plan remeasured in accordance with the equity method, the rest is transferred tothe current investment income).In the consolidated financial statements, the equity of the Purchased held prior to the date of purchaseis remeasured according to the fair value of the equity at the date of purchase, and the difference betweenthe fair value and the carrying value is included in the investment income of the current period; Where theequity of the Purchasee held before the date of purchase involves other comprehensive income, otherconsolidated income related thereto shall be accounted for on the same basis as the direct disposal of therelevant assets or liabilities by the Purchaser (i.e., except for the corresponding share in the change causedby the acquisition of the net liability or net asset of the defined benefit plan remeasured in accordance withthe equity method, the rest is converted into the investment income of the current period to which theacquisition date belongs).

5. Preparation Method of Consolidated Financial Statement

(1) Principles for determining the scope of the consolidated financial statement

The scope of consolidation of the consolidated financial statements is determined on a control basis.Control means that the Company has the authority over the Investee, enjoys a variable return by participating

in the relevant activities of the Investee, and has the ability to use its authority over the Investee to influencethe amount of such return. The scope of the merger includes the Company and all its subsidiaries. Subsidiaryrefers to the main body controlled by the Company.The Company will re-evaluate the above control definitions once the relevant facts and circumstanceschange, which results in the change of the relevant elements.

(2) Preparation method of consolidated financial statement

The Company begins to incorporate the net assets of the subsidiary and the actual control of theproduction and operation decisions into the scope of the merger from the date when the subsidiary is acquired;Cease to be included in the scope of the merger as of the date of loss of effective control. For the subsidiariesdisposed of, the operating results and cash flows prior to the date of disposal have been appropriatelyincluded in the consolidated income statement and consolidated cash flow statement; For subsidiariesdisposed of in the current period, the opening amount of the consolidated balance sheet is not adjusted. Theoperating results and cash flows of subsidiaries increased by consolidation after purchase have been properlyincluded in the consolidated income statement and consolidated cash flow statement, and the opening andcomparative amounts in the consolidated financial statements have not been adjusted for subsidiaries thatare not under the same control. The operating results and cash flows of the subsidiaries increased byconsolidation under the same control from the beginning of the consolidation period to the consolidationdate have been appropriately included in the consolidated profit statement and consolidated cash flowstatement, and the comparative amount of the consolidated financial statements has been adjusted at thesame time.

In the preparation of the consolidated financial statements, if the accounting policies or accountingperiods adopted by the subsidiaries are inconsistent with those adopted by the Company, necessaryadjustments shall be made to the financial statements of the subsidiaries in accordance with the accountingpolicies and accounting periods of the Company. For subsidiaries acquired through business combinationunder different control, the financial statements shall be adjusted on the basis of the fair value of identifiablenet assets at the date of purchase.

All significant transaction balances, transactions and unrealized profits within the Company are offsetat the time of preparation of the consolidated financial statements.

The shareholders' equity and the portion of the net profit or loss of the subsidiary that is not owned bythe Company for the current period are separately presented as minority shareholders' equity and minorityshareholders' profit or loss in the consolidated financial statements under shareholders' equity and net profit.The shares of minority shareholders' equity in the net profits and losses of subsidiaries for the current periodare shown as "minority shareholders' profits and losses" under the net profit item in the consolidated incomestatement. Losses shared by minority shareholders in a subsidiary exceed the minority shareholders' share

in the shareholders' equity of the subsidiary at the beginning of the period, and still decrease by a number ofshareholders' equity.When the control of the original subsidiary is lost due to the disposal of part of the equity investmentor other reasons, the residual equity shall be revalued according to its fair value at the date of loss of control.The sum of consideration obtained from the disposal of equity and the fair value of the remaining equityminus the difference between the shares of the net assets of the original subsidiary that shall be continuouslycalculated from the purchase date according to the original shareholding proportion shall be included in theinvestment income of the current period of loss of control. Other comprehensive income related to the equityinvestment of the original subsidiary, in the event of loss of control, the accounting treatment is performedon the same basis as the direct disposal of the relevant assets or liabilities by the Purchased (i.e. convertedto current investment income, except for changes resulting from the re-measurement of the net liabilities ornet assets of the Defined Benefit Plan in the original subsidiary). Thereafter, the residual equity shall besubsequently measured in accordance with the relevant provisions of Accounting Standards for BusinessEnterprises No.2-Long-term Equity Investment or Accounting Standards for Business Enterprises No.22-Recognition and Measurement of Financial Instruments, as detailed in Note Ⅲ, 13-Long-term EquityInvestment or Note Ⅲ, 9-Financial Instruments.If the Company disposes of the equity investment in subsidiaries step by step until it loses controlthrough multiple transactions. It is necessary to distinguish whether the transactions that dispose of theequity investment in subsidiaries until it loses control belong to a package deal or not. The terms, conditionsand economic impact of the transactions for the disposal of equity investments in subsidiaries are inaccordance with one or more of the following circumstances and generally indicate that multiple transactionsshould be accounted for as a package deal: ① These transactions were entered into simultaneously or takinginto account each other's influence; ② Only when these transactions are taken together can a completebusiness result be achieved; ③ The occurrence of one transaction depends on the occurrence of at least oneother transaction; ④ It is not economical to consider a transaction alone, but it is economical to consider itin conjunction with other transactions. For transactions that are not part of the package deal, each transactionshall be accounted for in accordance with the principles applicable to the "partial disposal of long-termequity investments in subsidiaries without loss of control" (as detailed in 13 of Note Ⅲ) and the "loss ofcontrol over existing subsidiaries as a result of the disposal of part of the equity investments or other reasons"(as detailed in the preceding paragraph), as appropriate. If the transactions involving the disposal of equityinvestments in subsidiaries until the loss of control belong to a package deal, the transactions shall beaccounted for as a transaction involving the disposal of subsidiaries and the loss of control; However, thedifference between each disposal price and the share of the subsidiary's net assets corresponding to thedisposal investment prior to the loss of control is recognized in the consolidated financial statements as other

consolidated gains and transferred to the profit or loss for the current period of loss of control in the eventof loss of control.

6. 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 therights and obligations it enjoys in the joint venture arrangement. A joint operation is a joint arrangementwhereby the parties that have joint control of the arrangement have rights to the assets, and obligations forthe liabilities, relating to the arrangement. A joint venture is a type of joint arrangement whereby the partiesthat have joint control of the arrangement 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 betreated in accordance with the accounting policy described in Note Ⅲ, 13 "Long-term Equity InvestmentAccounted by the Equity Method".

The Company, as a joint venture party, recognizes the assets and liabilities held and assumed by theCompany separately, and recognizes the assets and liabilities jointly held and assumed by the Companyaccording to the shares of the Company; recognizes the revenue generated from the sale of the share of jointoperating output enjoyed by the Company; recognizes revenue generated from the sale of output from jointoperations on the basis of the Company's share; confirms the expenses incurred by the Company individuallyand the expenses incurred by the joint 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, thesame below), or purchases assets from the joint venture, the Company recognizes only the portion of theprofits and losses attributable to the other participants in the joint venture that arises from the transactionprior to the sale of such assets to a third party. Where such assets are impaired in accordance with theprovisions of Accounting Standards for Business Enterprises No.8-Impairment of Assets, the Company shallfully recognize such losses in the case where the assets are cast or sold by the Company to joint operations;For the assets purchased by the Company from the joint operation, the Company recognizes the lossesaccording to the shares it assumes.

7. Determining Standards for Cash and Cash Equivalent

Cash and cash equivalents of the Company include cash on hand, deposits that can be readily withdrawn ondemand. Cash equivalents are investments held by the Company with a short term (usually maturing withinthree months from the date of purchase), high liquidity, readily convertible to known amounts of cash andwhich are subject to an insignificant risk of changes in value.

8. Foreign Currency Business and Translation of Foreign Currency Statements

(1) Translation method for foreign currency transaction

At the time of initial confirmation, the foreign currency transactions occurring in the Company shall beconverted into the bookkeeping functional currency amount at the spot exchange rate on the trading day, butthe foreign currency exchange business or transactions involving foreign currency exchange occurring inthe Company shall be converted into the bookkeeping functional currency amount at the actual exchangerate.

(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 rateon the balance sheet date, and the exchange difference arising therefrom shall be: ① The exchange differencearising from the special foreign currency borrowings related to the acquisition and construction of assetseligible for capitalization shall be handled in accordance with the principle of capitalization of borrowingcosts; ② The exchange difference of the hedging instruments used for effective hedging of the netinvestment in overseas operations (the difference is included in other comprehensive income, and is notrecognized as current profit or loss until the net investment is disposed of); ③ Except for the amortized cost,the exchange differences arising from the changes in the book balance of the available-for-sale monetaryitems in foreign currencies shall be included in the other comprehensive income, and shall be included inthe profits and losses of the current period.

Where the preparation of the consolidated financial statements involves overseas operations, if thereare foreign currency monetary items constituting net investment in overseas operations, the exchangedifferences arising from exchange rate changes shall be included in other comprehensive income; Whendisposing 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 thebookkeeping amount in functional currency translated at the spot exchange rate on the transaction date. Fornon-monetary items in foreign currencies measured at fair value, the spot exchange rate at the date of fairvalue determination shall be adopted for conversion. The difference between the converted amount infunctional currency and the amount in original functional currency shall be treated as the change in fair value(including the change in exchange rate), and shall be recorded into the profits and losses of the current periodor 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 thereare foreign currency monetary items constituting net investment in overseas operations, the exchangedifferences arising from exchange rate changes shall be as "foreign currency report conversion difference"and be confirmed as other comprehensive income; When disposing of overseas operations, the profits andlosses shall be transferred to the current disposal period.

The foreign currency financial statements of overseas operations shall be converted into RMBstatements in the following ways: the assets and liabilities in the balance sheet shall be converted at the spotexchange rate on the balance sheet date; Except for "undistributed profits", other items of shareholders'equity shall be converted at the spot exchange rate at the time of occurrence. The income and expense itemsin the profit statement shall be converted at the average exchange rate of the current period on the date oftransaction. The undistributed profit at the beginning of the period shall be the undistributed profit at the endof the period converted from the previous year; The undistributed profits at the end of the year shall becalculated and listed according to the converted profits distribution items; The difference between theconverted asset items and the total amount of the liability items and shareholders' equity items shall berecognized as other comprehensive income as the translation difference in the foreign currency statements.In case of disposal of overseas operations and loss of control, the balance in translation of the foreigncurrency statements related to the overseas operations as shown below in the shareholders' equity items inthe 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 theaverage exchange rate of the current period on the date of occurrence of the cash flows. The effect ofexchange rate changes on cash shall be presented separately in the statement of cash flows as an reconcilingitem.

Opening amounts and prior-period actual amounts shall be shown on the basis of amounts translatedfrom the prior-period financial statements.

When disposing of all the owner's equity of the Company's overseas operations or losing the controlover overseas operations due to the disposal of part of the equity investment or for other reasons, if thefollowing items of shareholders' equity in the balance sheet are shown below, the balance in translation ofthe foreign currency statement attributable to the owner's equity of the parent company related to theoverseas operation shall be transferred 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 ofthe equity investment or for other reasons, but the control over overseas business operations is not lost, thebalance in the translation of the foreign currency statements related to the disposal of part of overseasbusiness operations shall be attributed to minority shareholders' interests and shall not be transferred to theprofits and losses of the current period. When disposing of part of the equity of an overseas operation as anassociated enterprise or a joint venture, the balance of the translation of the foreign currency statementsrelated to the overseas operation shall be transferred into the profits and losses of the current disposal periodin the proportion of the overseas operation disposed of.

9. Financial instruments

Financial instruments are the contracts that form the financial assets of one entity, and at the same timeform the financial liabilities or equity instruments of other entities.

(1) Classification, confirmation and measurement of financial assets

According to the business mode of managing financial assets and the contractual cash flowcharacteristics of financial assets, the Company divides financial assets into: Financial assets measured atamortized cost. Financial assets measured at fair value with changes included in other comprehensiveincome. Financial assets that are measured at fair value and whose movements are included in the currentprofits and losses.

Financial assets are measured at fair value at initial recognition. For financial assets measured at fairvalue and whose changes are included in current profits and losses, relevant transaction costs are directlyincluded in current profits and losses. For other types of financial assets, relevant transaction costs areincluded in the initial recognition amount. Accounts receivable or notes receivable arising from the sale ofproducts or the provision of labor services that do not contain or take into account significant financingcomponents shall be initially recognized by the Company in accordance with the amount of considerationthat the Company is expected to be entitled to receive.

① Financial assets measured at amortized cost

The Group measures financial assets at amortized cost if both of the following conditions are met : thefinancial asset is held within a business model with the objective to hold financial assets in order to collectcontractual cash flows; the contractual terms of the financial asset give rise on specified dates to cash flowsthat are solely payments of principal and interest on the principal amount outstanding, that is, the cash flowgenerated on a specific date is only the payment of principal and interest based on the unpaid principalamount. For such financial assets, the Company adopts the effective interest rate method and carries outsubsequent measurement according to amortized cost. The profits or losses arising from amortization orimpairment are included into the current profits and losses.

② Financial 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 thefollowing conditions are met: the financial asset is held within a business model with the objective of bothholding to collect contractual cash flows and selling; the contractual terms of the financial asset give rise onspecified dates to cash flows that are solely payments of principal and interest on the principal amountoutstanding. Interest income of such financial assets is recognized based on effective interest method. TheCompany measures these financial assets at fair value and their changes are included in other comprehensiveincome, but impairment loss or gain, exchange gain or loss and interest income calculated according to theeffective interest rate method are included into the current profit and loss.

In addition, the Company designates some non tradable equity instrument investments as financialassets measured at fair value with changes included in other comprehensive income. The Company shallrecord the relevant dividend income of such financial assets into the current profits and losses, and thechange of fair value into other comprehensive income. When the financial asset is derecognized, theaccumulated gains or losses previously included in other comprehensive income will be transferred fromother comprehensive income to retained income and will not be included in current profits and losses.

③ Fair value through Profit and Loss Financial assets

The Company classifies the above financial assets measured at amortized cost and financial assetsmeasured at fair value with changes included in other comprehensive income into financial assets measuredat fair value with changes included in current profits and losses. In addition, during initial recognition, inorder to eliminate or significantly reduce accounting mismatch, the Company designated part of financialassets as financial assets measured at fair value with changes included in current profit and loss. For suchfinancial assets, the Company adopts fair value for subsequent measurement, and the changes in fair valueare included into the current profit and loss.

(2) Classification, recognition and measurement of financial liabilities

Financial liabilities upon initial recognition are classified as financial liabilities which are measured atfair value and whose changes are included in current profits and losses and other financial liabilities. For thefinancial liabilities measured at fair value with the changes included into the current profits and losses, therelevant transaction costs are directly included into the current profits and losses, and the relevant transactioncosts of other financial liabilities are included in the initial recognition amount.

① Financial liabilities at fair value through profit or loss

Financial liabilities measured at fair value with changes included in current profits and losses, whichinclude transactional financial liabilities (including derivatives belonging to financial liabilities) andfinancial liabilities designated to be measured at fair value with changes included in current profits andlosses at initial recognition.

Trading financial liabilities (including derivatives belonging to financial liabilities) are subsequentlymeasured according to their fair values. Except for those related to hedge accounting, changes in fair valuesare included in current profits and losses.

Financial liabilities designated to be measured at fair value with changes included in current profits andlosses. Changes in the fair value of this liability caused by changes in the Company's own credit risk areincluded in other comprehensive income. When the liability is derecognized, the accumulated change in fairvalue caused by changes in its own credit risk included in other comprehensive income is transferred toretained earnings. Changes in fair value are accounted into current profits and losses. If the above-mentionedtreatment of the impact of changes in the credit risk of these financial liabilities will cause or expand

accounting mismatch in profits and losses, the Company will include all profits or losses of the financialliabilities (including the impact amount of changes in the credit risk of the enterprise itself) into the currentprofits and losses.

② Other financial liabilities

Except for financial liabilities and financial guarantee contracts formed by the transfer of financialassets that do not meet the conditions for termination of recognition or continue to be involved in thetransferred financial assets, other financial liabilities are classified as financial liabilities measured atamortized cost and subsequently measured at amortized cost. Gains or losses arising from termination ofrecognition or amortization are included in current profits and losses.

(3) Basis of Confirmation and Calculation of financial instruments

Financial assets shall be derecognized if they meet one of the following conditions: ① The terminationof the contractual right to receive cash flow from the financial asset. ② The financial asset has beentransferred, and almost all risks and rewards related to the ownership of the financial asset have beentransferred to the transferee. ③ The financial asset has been transferred. Although the enterprise has neithertransferred nor retained almost all risks and rewards in the ownership of the financial asset, it has given upits control over the financial asset.

If the enterprise neither transfers nor retains almost all the risks and rewards of the ownership of thefinancial assets, and does not give up the control over the financial assets, the relevant financial assets shallbe recognized according to the extent of continuous involvement in the transferred financial assets, and therelevant liabilities shall be recognized accordingly. The degree of continuous involvement in the transferredfinancial assets refers to the risk level faced by the enterprise due to the change in the value of the financialassets.

If the overall transfer of financial assets meets the conditions for termination of recognition, thedifference between the book value of the transferred financial assets and the sum of the considerationreceived due to the transfer and the accumulated amount of changes in fair value originally included in othercomprehensive income shall be included into the current profits and losses.

If the partial transfer of financial assets meets the conditions for termination of recognition, the bookvalue of the transferred financial assets shall be apportioned according to its relative fair value between thederecognized part and the non-derecognized part, and the difference between the sum of the considerationreceived due to the transfer and the accumulated change in fair value originally included in othercomprehensive income that shall be apportioned to the derecognized part and the allocated aforesaid bookamount shall be included into the current profits and losses.

For financial assets sold by the Company with recourse, or for endorsement and transfer of heldfinancial assets, it is necessary to determine whether almost all risks and rewards in the ownership of the

financial assets have been transferred. If almost all risks and rewards in the ownership of the financial assethave been transferred to the transferee, the recognition of the financial asset shall be terminated. If almostall risks and rewards on the ownership of a financial asset are retained, the recognition of the financial assetshall not be terminated. If almost all risks and rewards related to the ownership of financial assets have notbeen transferred or retained, it shall continue to judge whether the enterprise retains control over the assetsand carry out accounting treatment according to the principles mentioned in the preceding paragraphs.

(4) Termination of recognition of financial liabilities

If the current obligation of the financial liability (or part thereof) has been relieved, the Companyterminates the recognition of the financial liability (or part thereof). The Company (the borrower) and thelender sign an agreement to replace the original financial liabilities by assuming new financial liabilities. Ifthe contract terms of the new financial liabilities and the original financial liabilities are substantiallydifferent, the original financial liabilities shall be derecognized and a new financial liability shall berecognized at the same time. If the Company makes any substantial modification to the contract terms of theoriginal financial liability (or part thereof), the original financial liability shall be derecognized and a newfinancial liability shall be recognized in accordance with the modified terms.If financial liabilities (or part thereof) are derecognized, the Company shall include the differencebetween its book value and the consideration paid (including transferred non-cash assets or liabilitiesassumed) into the current profits and losses.

(5) Offset of financial assets and financial liabilities

When the Company has the legal right to offset the recognized amount of financial assets and financialliabilities, and such legal right is currently enforceable, and the Company plans to settle the financial assetson a net basis or realize the financial assets and settle the financial liabilities at the same time, the financialassets and financial liabilities are listed in the balance sheet at a net amount after mutual offset. In addition,financial assets and financial liabilities shall be listed separately in the balance sheet and shall not be offsetagainst 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 transfera liability in an orderly transaction on the measurement date. Where there is an active market for financialinstruments, the Company adopts quotations in the active market to determine their fair values. Quoted pricein active market refers to the price easily obtained from exchanges, brokers, industry associations, pricingservice agencies, etc. on a regular basis, and represents the price of market transactions actually occurred infair trading. If there is no active market for financial instruments, the Company uses evaluation techniquesto determine their fair values. Evaluation techniques include reference to prices used in recent markettransactions by parties familiar with the situation and willing to trade, reference to current fair values of

other financial instruments that are substantially the same, discounting cash flow technique, option pricingmodel, etc. In valuation, the Company adopts valuation techniques that are applicable under currentcircumstances and are supported by sufficient available data and other information, selects input values thatare consistent with the characteristics of assets or liabilities considered by market participants in transactionsrelated to assets or liabilities, and gives priority to the use of relevant observable input values as much aspossible. If the relevant observable input value cannot be obtained or it is not impracticable to obtain it, thenon-input value shall be used.

(7) Equity instruments

Equity instruments refer to contracts that can prove ownership of the Company's residual equity inassets after deducting all liabilities. The issuance (including refinancing), repurchase, sale or cancellation ofequity instruments by the Company are treated as changes in equity, and transaction costs related to equitytransactions are deducted from equity. The Company does not recognize changes in the fair value of equityinstruments.

Dividends (including "interest" generated by instruments classified as equity instruments) distributedby the Company's equity instruments during their existence shall be treated as profit distribution.

10. Impairment of financial assets

The financial assets of the Company that need to confirm the impairment loss are financial assetsmeasured at amortized cost and debt instrument investment measured at fair value with changes included inother comprehensive income, mainly including notes receivable, accounts receivable, other receivables, debtinvestment, other debt investment, long-term receivables, etc. In addition, for some financial guaranteecontracts, impairment reserves and credit impairment losses are also accrued in accordance with theaccounting 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 recognizescredit impairment losses for the above items according to the applicable expected credit loss measurementmethod (general method or simplified method).

Credit loss refers to the difference between all contractual cash flows receivable according to thecontract and all cash flows expected to be collected by the Company discounted according to the originalactual interest rate, i.e. the present value of all cash shortages. Among them, for the financial assets that havebeen purchased or incurred credit impairment, the Company discounts them according to the actual interestrate adjusted by credit.

The general method of measuring expected credit loss refers to the Company's assessment of whetherthe credit risk of financial assets has increased significantly since the initial recognition on each balance

sheet date. If the credit risk has increased significantly since the initial recognition, the Company willmeasure the loss reserve by an amount equivalent to the expected credit loss during the entire period. If thecredit risk has not increased significantly since the initial recognition, the Company will measure the lossreserve according to the amount equivalent to the expected credit loss in the next 12 months. In assessingthe expected credit loss, the Company takes into account all reasonable and evidence-based information,including forward-looking information.For financial instruments with low credit risk on the balance sheet date, the Company measures the lossreserve based on the expected credit loss amount within the next 12 months or the entire duration accordingto whether the credit risk has increased significantly since the initial recognition.

(2) Criteria for judging whether credit risk has increased significantly since initial recognitionIf the default probability of a certain financial asset in the expected duration determined at the balancesheet date is significantly higher than the default probability in the expected duration determined at the timeof initial recognition, it indicates that the credit risk of the financial asset is significantly increased. Exceptfor special circumstances, the Company uses the change of default risk in the next 12 months as a reasonableestimate of the change of default risk in the entire duration to determine whether the credit risk has increasedsignificantly since the initial recognition.

Generally, if the overdue period is more than 90 days, the Company will consider that the credit risk ofthe financial instrument has increased significantly, unless there is conclusive evidence that the credit riskof the financial instrument has not increased significantly since the initial recognition.The Company will consider the following factors when evaluating whether the credit risk has increasedsignificantly1） 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 technologicalenvironment of the debtor;3） Whether there is any significant change in the value of the collateral or the quality of the guaranteeor credit enhancement provided by the third party, which are expected to reduce the economic motivation ofthe debtor's repayment 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 ofthe debtor;5） Whether there is any significant change in the Company's credit management methods forfinancial instruments, etc.

On the balance sheet date, if the Company judges that the financial instrument has only low credit risk,the Company assumes that the credit risk of the financial instrument has not increased significantly since

the initial recognition. If the default risk of a financial instrument is low, the borrower's ability to performits contractual cash flow obligations in a short period of time is strong, and even if there are adverse changesin the economic situation and operating environment for a long period of time, it may not necessarily reducethe borrower's ability to perform its contractual cash obligations, then the financial instrument is consideredto 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,the financial asset becomes a financial asset with credit impairment. The evidence of credit impairment offinancial assets includes the following observable information:

1） The issuer or debtor has major financial difficulties;

2） The debtor violates the contract, such as default or overdue payment of interest or principal, etc.;

3） The creditor gives concessions that the debtor will not make under any other circumstances due

to economic or 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 issueror the debtor;

6） Purchase or generate a financial asset at a substantial discount, which reflects the fact that creditlosses have occurred.

Credit impairment of financial assets may be caused by the combined action of multiple events, butmay not be caused by separately identifiable events.

(4) Portfolio approach to evaluate expected credit risk based on portfolio

The Company evaluates credit risks for financial assets with significantly different credit risks, such as:

Accounts receivable with related parties. Receivables in dispute with the other party or involving litigationor arbitration. Receivables with obvious signs that the debtor is likely to be unable to perform the repaymentobligation.

In addition to the financial assets with individual credit risk assessment, the Company divides thefinancial assets into different groups based on the common risk characteristics. The common credit riskcharacteristics adopted by the Company include: Credit risk shall be assessed on the basis of the agingportfolio, the receivables portfolio between the final controlling party and its subordinate units, the publicmaintenance fund and house selling fund portfolio deposited in the housing provident fund managementcenter, the deposit/margin portfolio, and the petty cash ledger portfolio formed by the employee loan of theunit.

(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 the estimated credit losses are greater than the book amount of its current impairment reserve, thedifference is recognized as impairment loss. If it is less than the carrying amount of the current impairmentreserve, the difference is recognized as impairment gain.

(6) Methods for determining the credit loss of various financial assets

①Notes receivable

The Company measures the loss reserve for bills receivable according to the expected credit lossamount equivalent to the entire duration. Based on the credit risk characteristics of bills receivable, they aredivided into different portfolios:

Item	Basis for determining portfolio
Bank acceptance bills	The acceptor is a bank with less credit risk
Commercial acceptance bill	According to the acceptor's credit risk classification, it should be the same as the "receivable" portfolio classification.

③ Accounts receivable and other receivables

For receivables that do not contain significant financing components, the Company measures the lossreserve according to the expected credit loss amount equivalent to the entire duration.

For receivables that contain significant financing components, the Company measures the loss reservebased on whether the credit risk has increased significantly since the initial recognition, using the amountof expected credit loss within the next 12 months or the entire duration.

According to whether the credit risk of other receivables has increased significantly since the initialrecognition, the Company measures impairment loss with an amount equivalent to the expected credit losswithin the next 12 months or the entire duration.

In addition to the accounts receivable and other receivables that individually assess credit risk, they aredivided into different portfolios based on their credit risk characteristics:

Item	Basis for determining portfolio
Portfolio 1	Aging portfolio
Portfolio 2	A portfolio of receivables between the ultimate controller and its subordinate units
Portfolio 3	The portfolio of public maintenance funds and house sales funds deposited in the housing provident fund management center
Portfolio 4	Deposit/margin portfolio
Portfolio 5	The portfolio of reserve fund ledger formed by the Company's staff loan

The accrual method of bad debt reserves for different portfolios:

Item	Accrual method
Aging portfolio	According to the accrual proportion corresponding to the aging period
Portfolio of receivables between the ultimate controlling party and its subordinate units	Referring to the historical credit loss experience, combined with the current situation and the forecast of future economic conditions, the expected credit loss is calculated through the default risk exposure and the expected credit loss rate within the next 12 months or the entire duration, and the expected credit loss rate of the portfolio is zero.
The portfolio of public maintenance funds and house sales funds deposited into the MPF Management Center
Deposit/margin portfolio
The portfolio of reserve fund ledger formed by the Company's staff loan.

a. In portfolio, the portfolio method of withdrawing bad debt reserves by aging analysis

Aging	Expected loss rate of notes receivable (%)	Expected loss rate of accounts receivable (%)	Expected loss rate of other receivables (%)
Within 1 year (including 1 year, the same below)
Among them: Within the credit period (within 3 months)	0	0	0
Credit period~1 year	2	2	2
1-2 years	5	5	5
2-3years	20	20	20
3-4years	50	50	50
4-5years	80	80	80
More than 5 years	100	100	100

b. In the portfolio, the description of the accrual method for accrual of bad debt reserves by othermethods is given.

Aging	Expected loss rate of notes receivable (%)	Expected loss rate of accounts receivable (%)	Expected loss rate of other receivables (%)
Accounts receivable between the final controlling party and its subordinate	0	0	0
Public maintenance fund and house sale fund deposited into MPF Management Center	0	0	0
Deposit/margin	0	0	0
The reserve fund ledger formed by the Company's staff loan.	0	0	0

11. Inventory

(1) Classification of inventory

Inventories mainly include raw materials, work in progress, finished goods, in transit materialsinventory goods, reserve tanker storage commissioned processing, and manufacturing consignment, etc..

(2) Valuation method for obtaining and issuing inventory

Inventories are initially measured at cost. Inventory costs include purchase costs, processing costs andother expenditures. The actual cost of inventories upon delivery is calculated using the weighted averagemethod.

(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 estimatedcost till completion, estimated expenses for selling activity and related taxes and fees in daily activities.When determining the net realizable value of inventories, solid evidence obtained shall be the basis, and thepurpose of holding the inventories 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. Whenthe net realizable value is lower than the cost, the provision for inventory devaluation shall be accrued. Theprovision for inventory devaluation shall be accrued based on the difference between the cost of a singleinventory item and its net realizable value. The provision for inventory devaluation of a large number ofinventories with low unit prices shall be based on the type of inventory; for inventories related to the productrange produced and sold in same region, having the same or similar end use or purpose, and difficult to beseparated from other items for measurement, their provision for inventory devaluation can be combined andaccrued.

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 theinventories higher than the book value, the amount of the provision for inventory devaluation that has beenaccrued 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;packaging materials are amortized by one-off amortization method when they are received.

12. Held-for-sale assets and disposal group

A non-current asset or disposal group is classified as held for sale when its carrying amount will berecovered principally through a sale transaction rather than through continuous use. The followingconditions need to be simultaneously met to be classified as held for sale: a non-current asset or to-be-disposed portfolio can be sold immediately under the current conditions based on the practice of selling suchasset or to-be-disposed portfolio in similar transactions; the Company has already decided on the sale planand obtained confirmed purchase commitment; the sale is scheduled to be completed within one year.Among them, a Disposal Portfolio refers to a group of assets that will be disposed of as a whole through saleor other approaches in a transaction, and the liabilities directly associated with these assets transferred along

with the assets in transaction. If the portfolio of assets or group of portfolios of assets is allocated goodwillacquired in business merger in accordance with Accounting Standards for Business Enterprises No. 8 - AssetImpairment, the Disposal Portfolio shall include the goodwill allocated to it.In the event that the book value of a non-current asset or to-be-disposed portfolio that has beendesignated as held-for-sale category is higher than the net amount of fair value less sales expenses when thenon-current asset or to-be-disposed portfolio is initially measured or measured on the balance sheet date, thebook value shall be to the net amount of fair value minus sales expenses, and the written-down amount shallbe recognized as asset impairment loss and included in current period profit or loss. The provision forimpairment loss of the held-for-sale asset shall be accrued. For a Disposal Portfolio, the confirmedimpairment loss shall deduct the book value of the goodwill in the Disposal Portfolio, then deduct the bookvalue of the non-current assets determined by the measurement on a pro-rata basis in accordance with theapplicable Accounting Standards for Business Enterprises No. 42 held-for-sale non-current assets, DisposalPortfolio and Termination of Operations (hereinafter referred to as the “Guide for Held-For-Sale”). In theevent of an increase of the book value of the held-for-sale Disposal Portfolio minus sales expenses on thesubsequent 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 themeasurement “Guide for Held-For-Sale” after being classified as held for sale asset, the reversal amountshall be included in the current period profit or loss, and the book value of all non-current assets (except forgoodwill) determined by the measurement on a pro-rata basis in accordance with the applicable “Guide forHeld-For-Sale” shall be increased on a pro-rata basis. The book value of the goodwill that has been deductedand the impairment loss of the assets recognized before the classification of the held-for-sale non-currentassets in accordance with the applicable “Guide for 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 noaccrual or amortization for depreciation, and the interest from and other expenses from the liabilities in held-for-sale Disposal Portfolio shall still be recognized.When a non-current asset or Disposal Portfolio no longer meets the conditions for Held-For-Salecategory, non-current asset or Disposal Portfolio will no longer be classified as Held-For-Sale category bythe Company or the non-current asset will be removed from the Held-For-Sale Disposal Portfolio, and bemeasured based on one of the following two values, whichever is lower: (1) The book value before beingclassified as held-for-sale category adjusted based on the depreciation, amortization or impairment thatshould have be confirmed if it is not classified as held-for-sale category; (2) recoverable amount.

13. Long-term equity investment

The long-term equity investment refers to in this part refers to the long-term equity investment that theCompany has control, joint control or significant influence on the invested entity. The long-term equity

investment of the Company that does not have control, joint control or significant impact on the investeeshall be accounted as a financial asset measured at fair value with its changes included into the current profitsand losses. Among them, if it is non-transactional, the Company may choose to designate it as a financialasset measured at fair value and its changes are included in the accounting of other comprehensive incomeat the time of initial recognition. For details of its accounting policies, please refer to Note Ⅲ, 9 “FinancialInstruments".

Joint control refers to the control that the Company shares with other party/parties for an arrangementin accordance with relevant agreements, and relevant activities of the arrangement can only be decided basedon the consensus of all parties sharing the control rights before making a decision. Significant Influencerefers to power of the Company to participate in the decision-making of the financial and operating policiesof the investee, but the Company cannot control or jointly control the development of these policies withother parties.

(1) Determination of investment cost

For a long-term equity investment obtained from a combination of businesses under the same control,the apportioned share of the book value in the final controller's consolidated financial statements on thecombination date in accordance with the shareholders' equity shall be the initial investment cost of the long-term equity investment. The capital reserve shall be adjusted subject to the difference between the initialinvestment cost of the long-term equity investment and the cash paid, the non-cash assets transferred, andthe book value of the debts assumed; if the capital reserve is insufficient for offsetting, the retained earningsshall be adjusted. Where the equity securities are issued as merger consideration, the apportioned share ofthe book value in the final controller's consolidated financial statements on the combination date inaccordance with the shareholders' equity shall be the initial investment cost of the long-term equityinvestment, and the total par value of the issued shares is taken as the share capital. The capital reserve shallbe adjusted subject to the difference between the initial investment cost of the long-term equity investmentand the total par value of the shares issued; if the capital reserve is insufficient for offsetting, the retainedearnings shall be adjusted. Where the equity of combined parties under the same control is obtained throughmultiple transactions and a business combination under the same control is formed finally, it shall be treateddifferentially based on whether it is a “package deal”: if it belongs to a “package deal”, all transactions willbe treated as a transaction that obtains control. If it is not a “package deal”, the apportioned share of thebook value in the final controller's consolidated financial statements on the combination date in accordancewith the shareholders' equity shall be the initial investment cost of the long-term equity investment. Thecapital reserve shall be adjusted subject to the difference between the initial investment cost of the long-termequity investment and the sum of the book value of long-term equity investment before combination dateand the book value of the new consideration for the new share on the combination date. If the capital reserve

is insufficient for offsetting, the retained earnings shall be adjusted. The equity investments that are heldprior to the combination date and are recognized with equity recognized or as available-for-sale financialasset as other comprehensive income will not be given accounting treatment for the moment.For a long-term equity investment obtained from a combination of businesses not under the samecontrol, the initial investment cost of the long-term equity investment shall be based on the combination coston the purchase date. The combination cost includes the assets paid by purchaser, the liabilities incurred orassumed, and the sum of the fair value of issued equity securities. Where the equity of combined parties notunder the same control is obtained through multiple transactions and a business combination under the samecontrol is formed finally, it shall be treated differentially based on whether it is a “package deal”: if it belongsto a “package deal”, all transactions will be treated as a transaction that obtains control. If it is not a “packagedeal”, the initial investment cost of the long-term equity investment calculated by the cost method shall becalculated based on the sum of the book value of the equity investment in the original holder and the newinvestment cost. The original shareholding that measured using equity method, the relevant othercomprehensive income does temporarily not conduct accounting treatment.Intermediary expenses such as for auditing, legal services, assessment and other related expensesincurred by a combining party or a purchaser for business combination shall be recognized in current periodprofit or loss when incurred.

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 acquisitionof long-term equity investment: the purchase price in cash actually paid by the Company; the fair value ofthe equity securities issued by the Company, the value agreed in relevant investment contract or agreement;the fair value or original book value of the assets exchanged in non-monetary asset exchange transaction;the fair value of the long-term equity investment itself. Any expenses, taxes and other necessary expensesdirectly related to the acquisition of long-term equity investments shall also be included in the cost ofinvestment. The cost of long-term equity investment for the additional investment that can exert significantinfluence on investee or implement joint control but does not constitute control shall be the sum of the fairvalue of the originally held equity investment recognized in accordance with the Accounting Standards forBusiness Enterprises No.. 22 – Recognition and Measurement of Financial Instruments and the cost for newinvestment.

(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 controlover the invested entity (except for those constituting joint operators) or have significant impact on theinvested entity. In addition, 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.

a. Long-term equity investment based on Cost MethodWhen accounting with Cost Method, long-term equity investment is priced at the initial investmentcost, and the cost of the long-term equity investment is adjusted by adding or recovering the investment.Except for the actual payment at the time of obtaining investment or the cash dividends or profits includedin the consideration but not yet issued, the current investment income shall be recognized according to thecash dividends or profits declared by the investee.

b. Long-term equity investment accounted for by Equity MethodWhen accounting with Equity Method, if the initial investment cost of a long-term equity investmentis greater than the fair value share of the identifiable net assets of the investee when investing, and the initialinvestment cost of the long-term equity investment shall not be adjusted; if the initial investment cost is lessthan the fair value share of the identifiable net assets of the investee when investing, the difference shall beincluded in the current profit and loss, and the cost of the long-term equity investment shall be adjustedWhen accounting with Equity Method, the investment income and other comprehensive income arerecognized separately according to the shares of the net profit or loss and other comprehensive income thatshould be enjoyed or shared, and the book value of the long-term equity investment should be adjusted atthe same time. The book value of long-term equity investment is reduced accordingly by calculating theshare that should be enjoyed according to the profit or cash dividend declared by the investee. The bookvalue of long-term equity investment shall be adjusted and included in the capital reserve for other changesin the owner's rights and interests of the invested entity other than the net profit and loss, othercomprehensive income and profit distribution. When confirming the share of the net profit and loss of theinvestee, the net profit of the investee shall be adjusted and confirmed on the basis of the fair value of theidentifiable assets of the investee at the time of investment. If the accounting policies and periods adoptedby the invested entity are inconsistent with the Company, the financial statements of the invested entity shallbe adjusted in accordance with the accounting policies and periods of the Company, and the investmentincome and other comprehensive income shall be confirmed accordingly. For the transactions between theCompany and the associates and joint ventures, the assets invested or sold do not constitute a business, andthe unrealized gains and losses from internal transactions are offset against the portion of the Company thatis attributable to the proportion of the shares, on this basis. investment profit and loss should be confirmed.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 intoa joint venture or an associates constitute a business, if the investor obtains long-term equity investment butdoes not control, the fair value of the invested business shall be deemed as the initial investment cost of thenew long-term equity investment, and the difference between the initial investment cost and the book valueof the invested business is fully recognized in the current profits and losses. If the assets sold by the Company

to a joint venture or an associate that constitute a business, the difference between the consideration valueobtained and the book value of the business shall be fully recognized in the profits and losses of the currentperiod.When confirming the net loss that incurred by the investee should be shared, the book value of thelong-term equity investment and other long-term equity that substantially constitutes the net investment ofthe investee are reduced to zero. In addition, if the Company has an obligation to bear additional losses tothe investee, the estimated liabilities shall be recognized according to the estimated obligations and includedin the current investment losses. If the investee achieves net profit in the following period, the Companyshall resume recognizing the share of income after 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 thefirst time before the implementation of the new accounting standards, if there is a debit balance of equityinvestments related to the investment, the current profits and losses shall be accounted for by the straight-line amortization of the original remaining period.c. Acquisition of Minority EquityIn the preparation of the consolidated financial statements, if the difference between the long-termequity investment added by purchasing minority shares and the net assets share that should be continuouslycalculated by the subsidiary company from the purchase date (or the consolidation date) is calculatedaccording to the proportion of newly added shares, the retained earnings shall be adjusted; and if the capitalreserve is insufficient to offset, the retained earnings shall be adjusted.d. Disposal of long-term equity investmentIn the consolidated financial statements, the parent company partially of disposes of the long-termequity investment of the subsidiary without losing control, the difference of the corresponding net assets inthe subsidiary between the disposal price and the disposal of the long-term equity investment is included inthe shareholders' equity. it shall be treated in accordance with the relevant accounting policies described in“Notes on the preparation of consolidated financial statements” in Note Ⅲ.5 .For the disposal of long-term equity investment in other cases, the difference between the book valueof the disposed 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 afterdisposal is still accounted for by equity method, when disposing, the other comprehensive income whichwere originally included in shareholder's rights and interests shall be accounted for on the same basis as theassets or liabilities directly disposed of by the investee. The owner's equity recognized as a result of changesin the owner's equity of the investee other than net profit or loss, other comprehensive income and profitdistribution, it should be carried forward to the current profit and loss

For the long-term equity investment accounted by Cost Method, the remaining equity is still accountedby Cost Method after disposal, other comprehensive income that recognized by equity method accountingor financial instrument recognition and measurement criteria accounting before obtaining control over theinvestee shall be accounted for on the same basis as the assets or liabilities directly disposed of by theinvestee, and shall be settled to the current profit and loss in proportion. Changes of the net assets of investeein the owner's equity other than net profit or loss, other comprehensive income and profit distribution 's thatrecognized by equity method shall be settled to the current profit and loss in proportion.Where the Company loses control over the investee due to disposal of part of its equity investment,when preparing individual financial statements, if the remaining equity after disposal can exercise jointcontrol or exert significant influence on the investee, it shall be accounted for by equity method instead, andthe remaining equity shall be adjusted by accounting by equity method when it is deemed to be acquired. Ifthe remaining equity after disposal cannot be jointly controlled or exerts significant influence on the investee,it shall be accounted for according to the relevant provisions of the financial instrument recognition andmeasurement criteria, and the difference between the fair value and the book value on the date of loss ofcontrol. It is included in the current profit and loss. Before the Company obtains control over the investee,other comprehensive income recognized by equity method accounting or financial instrument recognitionand measurement criteria is used to directly dispose of the relevant assets with the investee, accountingtreatment based on the same basis as the investee directly disposes of related assets or liabilities when thecontrol of the investee is lost, Accounting is treated on the same basis as the liabilities. Changes in theowner's equity other than net profit or loss, other comprehensive income and profit distribution of theinvestee's net assets recognized by the equity method are carried forward to the current profit or loss whenthe 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 comprehensiveincome and 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 partof the equity investment, the remaining equity after disposal shall be accounted for according to the financialinstrument recognition and measurement criteria, and the difference between the fair value and the bookvalue on the date of loss 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 isaccounted for on the same basis as the investee's direct disposal of related assets or liabilities when the equitymethod is terminated, Owner's equity recognized as a result of changes in other owners' equity other thannet profit or loss, other comprehensive income and profit distribution of the investee should be transferred

to current investment income when terminating the equity methodThe Company disposes of the equity investment in the subsidiaries step by step through multipletransactions until the loss of control. If the above-mentioned transactions are part of a package transaction,the transactions are treated as a transaction dealing with the equity investment of the subsidiary and losingcontrol. The difference between the book value of each long-term equity investment corresponding to thedisposal price and the disposal of the equity before loss of control is first recognized as other comprehensiveincome, and when the control is lost, it is transferred to the current profit and loss of loss of control.14．Investment PropertyInvestment Property refers to property held for the purpose of earning rent or capital appreciation, orboth, including land use rights that have been leased, land use rights that are held and prepared for transferafter appreciation, and buildings that have been rented. Investment property is initially measured at cost.The expenses related to investment property, if the economic benefits related to this asset are highly probableto flow into the company and the cost can be measured reliably, then the expense will account for as the costof 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 toNote Ⅲ. 20 Long-Term Asset Impairment.When the self-use property or inventory is converted into investment property or investment propertyis converted into self-use property, the book value before conversion is used as the recorded value afterconversion.When the use of investment property is changed to self-use, the investment property is converted intofixed assets or intangible assets from the date of change. When the use of self-use property changes to earnrent or capital appreciation, the fixed assets or intangible assets are converted into investment property fromthe date of change. In the case of investment property measured by the cost model when the conversionoccurs, the book value before conversion is used as the entry value after conversion; if it is converted intoinvestment property measured by the fair value model, the fair value of the conversion date is used as theentry value after conversion.

When an investment real estate is disposed of, or permanently withdrawn from use and is not expectedto obtain economic benefits from its disposal, the confirmation of the investment real estate shall beterminated. Disposal income from the sale, transfer, retirement or damage of investment properties ischarged to the current profit and loss after deducting its book value and related taxes and fees.

15. Fixed Assets

(1) Confirmation conditions for fixed assets

Fixed Assets refer to tangible assets held for the purpose of producing goods, providing labor services,renting or operating management, and having a service life of more than one fiscal year. Fixed assets arerecognized only when the economic benefits associated with them are likely to flow into the Company andtheir costs can be reliably measured. Fixed assets are initially measured at cost and taking into account theimpact of projected abandonment costs.

(2) Depreciation methods for various types of fixed assets

Fixed assets are depreciated over their useful lives using the straight-line method from the monthfollowing the scheduled availability. The depreciation period, estimated net residual value rate and annualdepreciation rate of each category of fixed assets are as follows:

Category	Depreciation Method	Depreciation period (Year)	Net residual rate(%)	Annual depreciation rate (%)
Buildings	straight-line depreciation	8-50	5	1.90— 11.88
Electronic equipment	straight-line depreciation	3-10	4、5	9.50—32.00
Machinery equipment	straight-line depreciation	5-28	4、5	3.39—19.20
Transport facility	straight-line depreciation	5-10	4、5	9.50—19.20
Office equipment	straight-line depreciation	3-10	4、5	9.50—32.00
Other equipment	straight-line depreciation	5-28	4、5	3.39—19.20

The estimated net residual value refers to the expected state after the estimated useful life of the fixedassets has expired and is at the end of its useful life. The amount currently obtained by the Company fromthe disposal of the assets after deducting the estimated disposal expenses.

(3) Impairment test method and Impairment provision method for fixed assets

For details of Impairment test method and impairment provision method for fixed assets, please referto Note Ⅲ. 21 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 ownershipof an asset, and its ownership may or may not be transferred. If it is reasonable to determine the ownershipof the leased asset at the expiration of the lease term, the depreciation shall be calculated within the usefullife of the leased asset; If it is not reasonable to determine the ownership of the leased asset at the expirationof the lease term, depreciation shall be calculated within a relatively short period of the lease term and theservice life of the leased assets.

(5) Others

The subsequent expenses related to fixed assets, if the economic benefits related to the fixed assets are

likely to flow in and their costs can be reliably measured, are included in the cost of fixed assets and thebook value of the replaced part should be terminated. The subsequent expenditures other than mentioned asabove are recognized in profit 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 generateeconomic benefits by using or disposal. The difference between the disposal income from the sale, transfer,retirement or damage of the fixed assets less the carrying amount and related taxes is recognized in profit orloss for the current period.The Company reviews the useful life, estimated net residual value and depreciation method of fixedassets at least at the end of the year, and changes as an accounting estimate if changes occur.

16. Construction in progress

The cost of construction in progress is determined based on actual project expenditure, includingvarious project expenditures incurred during the construction period, capitalized borrowing costs before theproject reaches the expected usable status, and other related expenses. Construction in progress is carriedforward to fixed assets when it is ready for its intended use.

For details of the impairment test method and impairment provision method for construction in

progress, please refer to Note Ⅲ. 21 Long-Term Asset Impairment.

17. Borrowing Costs

Borrowing costs include interest on borrowings, amortization of discounts or premiums, ancillaryexpenses, and exchange differences arising from foreign currency borrowings. Borrowing costs directlyattributable to the acquisition, construction or production of assets eligible for capitalization, capitalizationis began when asset expenditures have occurred, borrowing costs have occurred, and the acquisition,construction or production activities necessary to bring the assets to the intended usable or saleable statehave begun. And capitalization is stopped when the assets under construction or production that meet thecapitalization conditions are ready for their intended use or saleable status. The remaining borrowing costsare recognized as an expense in the period in which they are incurred.

The interest expenses actually incurred in the current period of special borrowings shall be capitalizedafter subtracting the interest income from the unused borrowing funds deposited into the bank or theinvestment income obtained from the temporary investment. For the general borrowings, according to theaccumulated asset expenditures exceed the special borrowings. The capitalization amount is determined bymultiplying the weighted average of which accumulated asset expenditure exceeds the asset expenditure ofthe special borrowing portion by the capitalization rate of the general borrowings used. The capitalizationrate is determined based on the weighted average interest rate of general borrowings.

During the capitalization period, the exchange differences of foreign currency special borrowings are

all capitalized; the exchange differences of foreign currency general borrowings are included in the currentprofit and loss.Assets eligible for capitalization refer to assets such as fixed assets, investment property and inventoriesthat require a substantial period of acquisition, construction or production activities to achieve the intendeduse or sale status.

If the assets eligible for capitalization are interrupted abnormally during the acquisition, constructionor production process and the interruption period lasts for more than 3 months, the capitalization of theborrowing costs shall be suspended until the acquisition, construction or production of the assets resumes.

18. Right-of-use assets

Right-of use assests refer to the right of the Company as the lessee to use the leased assets during theterm of the lease.

(1) Initial measurement: At the commencement date of the lease, the company recongnizes an initialmeasurement of the right-of –use assets as cost, not including the following four terms: ①the intitialmeasurement amount of the lease liability; ②the lease payment on the lease date or before. If there is leaseincentive, the amount of lease incentive already enjoyed shall be deducted; ③initial direct expenses incurredby the lessee, as is incremental cost incurred in achieving the lease;④The cost to be expected, which iccuresfor disassembling & removing and recovering lease assets where is in the place, or lease assets recoveringto the state of lease term agreed upon on, shall be subject to the Accounting Standards for BusinessEnterprises No.1 – inventory.

The company comfirms and mesearues the above as the the Accounting Standards for BusinessEnterprises No.13- contingencies.

（2）Subsequent measurement: After the commencement date of the lease term, if the company adoptsthe cost model to carry out subsequent measurement of the right-of-use assets, that is, it is measured at costless accumulated depreciation and accumulated impairment losses; the company remeasured lease liabilitiesas the lease regulations, and adjust the book value of the right-of-use asset accordingly.

With reference to the relevant depreciation provisions of Accounting Standards for BusinessEnterprises No. 4 - Fixed Assets, the Company accrues depreciation for right-of-use assets. From thecommencement date of the lease term, the Company accrues depreciation for the right-of-use asset. Right-of-use assets are generally depreciated from the month in which the lease term begins. The accrueddepreciation amount is included in the cost of the relevant assets or the current profit and loss according tothe purpose of the right-of-use asset. When determining the depreciation method of the right-of-use asset,the Company makes a decision based on the expected consumption pattern of the economic benefits relatedto the right-of-use asset, and depreciates the right-of-use asset on a straight-line basis. When determiningthe depreciation period of the right-of-use asset, the company follows the following principles: if it can bereasonably determined that the ownership of the leased asset will be obtained at the expiration of the lease

term, depreciation will be accrued within the remaining useful life of the leased asset; If the asset is owned,depreciation is accrued within the shorter of the lease term and the remaining useful life of the leased asset.If the right-of-use asset is depreciated, the company will carry out subsequent depreciation accordingto the book value of right-of-use assets after deducting the impairment loss.The company has chosen not to recognize right-of-use assets and lease liabilities for short-term leases(leases with a lease term of not more than 12 months) and low-value asset leases, and has included therelevant lease payments on a straight-line basis over each period of the lease term. Current profit and lossor related asset cost. Please refer to Note III 21-Long-term Assets Impairmen for the method of impairmenttest and provision for impairment of right-of-use assets.

19. Intangible assets

(1) Intangible assets

Intangible assets refer to identifiable non-monetary assets without physical form owned or controlledby the Company.

Intangible assets are initially measured at cost. Expenditure related to intangible assets is included inthe cost of intangible assets if the relevant economic benefits are likely to flow to the Company and its costscan be measured reliably. However, the intangible assets acquired through business combination notinvolving enterprises under common control should be measured at fair value separately as intangible assetswhen their fair values can be reliably measured.

The acquired land use rights are usually accounted for as intangible assets. The related land use rightsand building construction costs of self-developed and constructed buildings are accounted for as intangibleassets and fixed assets, respectively. In the case of purchased houses and buildings, the relevant price isdistributed between the land use rights and the buildings. If it is difficult to allocate them reasonably, all ofthem are treated as fixed assets.

Since the intangible assets with limited useful life are available for use, the original value minus theestimated net residual value and the accumulated amount of impairment reserve shall be amortized by thestraight-line method during their expected service life. Intangible assets with uncertain service life shall notbe amortized.

Among them, the useful life and amortization method of intellectual property are as follows:

Item	Amortization period (year)	Amortization method
Trademark	20	Straight-line method

At the end of the period, the useful life and amortization methods of intangible assets with limiteduseful life are reviewed, and if any change occurs, it is treated as a change of accounting estimate. In addition,the useful life of intangible assets with uncertain service life is also reviewed. If there is evidence that the

period for which the intangible assets bring economic benefits to the enterprise is foreseeable, the useful lifeof intangible assets is estimated and amortized according to the amortization policy of intangible assets withlimited 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 asintangible assets, and expenditures in the development stage that fail to meet the following conditions areincluded in current profit and loss:

a. It is technically feasible to complete the intangible asset to enable it to be used or sold.

b. The intent to complete the intangible asset and use or sell it;

c. The way in which intangible assets generate economic benefits, including the ability to prove thatthe products produced from the intangible assets having a market or the intangible assets having a market,and the intangible assets will be used internally, which can prove its usefulness;

d. sufficient technical, financial resources and other resources for supporting the development of theintangible assets 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, allresearch and 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 Ⅲ.21 Long-Term Asset Impairment.

20．Long-term Deferred Expenses

The long-term deferred expenses are all expenses that have occurred but shall be borne by the reportingperiod and subsequent periods with amortization period of more than one year. The company's long-termdeferred expenses mainly include lease of land use right and renovation costs of factory building. Long-termdeferred expenses are amortized on a straight-line basis over the estimated benefit period.

21. 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 insubsidiaries, joint ventures and associates, the Company determines whether there is any indication ofimpairment on the balance sheet date. If there is any indication of impairment, the recoverable amount is

estimated and the impairment test is carried out. Goodwill, intangible assets with uncertain service life andintangible assets that not yet ready for use are tested for impairment annually, regardless of whether there isany indication of impairment.If the result of the impairment test indicates that the recoverable amount of the asset is lower than itsbook value, the impairment provision is made based on the difference and is included in the impairmentloss. The recoverable amount is the higher of the fair value of the asset less the disposal expense and thepresent value of the estimated future cash flow of the asset. The fair value of assets is determined accordingto the sale agreement price in a fair transaction. If there is no sales agreement but there is an active marketfor the asset, the fair value is determined according to the buyer's bid for the asset; if there is neither salesagreement nor active market for assets, the fair value of assets shall be estimated based on the bestinformation available. Asset disposal expenses include legal fee, taxes, transportation expenses and directexpenses incurred to make assets saleable. The present value of the estimated future cash flow of an asset isdetermined by the appropriate discount rate discounting and the estimated future cash flow generated by theasset during its continuous use and final disposal. The asset impairment provision is calculated andconfirmed based on individual assets. If it is difficult to estimate the recoverable amount of an individualasset, the recoverable amount of the asset is determined by the asset group which the asset belongs to. Anasset 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 assetgroups or portfolios that are expected to benefit from the synergies of business combinations whenimpairment tests are conducted. The test results show that the recoverable amount of the asset group orportfolio containing the assessed goodwill is lower than its book value, the corresponding impairment lossesshould be confirmed. The amount of impairment loss is first deducted from the book value of the goodwillamortized to the asset group or portfolio, and then deducted proportionally from the book value of otherassets according to the proportion of the book value of assets other than goodwill in the asset group orportfolio.Once the above asset impairment loss is confirmed, it will not be reversed to the part where the valueis restored in the future period.

22. Employee Compensation

The Company's employee compensation mainly includes short-term employee remuneration, Post-employment Benefits, Termination Benefits and benefits for other long-term employee. Among them:

Short-term employees remuneration mainly includes wages, bonuses, allowances and subsidies,employee welfare fees, medical insurance premiums, maternity insurance premiums, work injury insurancepremiums, housing fund, labor union funds, employee education funds, and non-monetary benefits. TheCompany recognizes the actual short-term employee's remuneration as a liability in the accounting period

in which employees provide services to the Company and recognizes them in profit or loss or related assetcosts. Non-monetary benefits are measured at fair value.Post-employment Benefits mainly include basic retirement security, unemployment insurance, andannuities. The Post-employment Benefit Scheme includes a Defined Contribution Plan and a DefinedBenefit Plan. If a Defined Contribution Plan is adopted, the corresponding amount of the deposit shall beincluded in the relevant asset cost or current profit and loss as incurred. (1) The Defined Contribution Planis recognized as a liability based on a fixed fee paid to an independent fund and is included in the currentprofit and loss or related asset costs; (2) The Defined Benefit Plan is accounted for using the expectedcumulative benefits unit method Specifically, the Company will convert the welfare obligation arising fromthe Defined Benefit Plan into the final value of the departure time according to the formula determined bythe expected cumulative benefits unit method; then it is attributed to the employee's in-service period and isincluded 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 the employee is encouraged to accept the reduction voluntarily, when cannot withdrawing unilaterallythe dismissal benefits provided by the termination of the labor relationship plan or the reduction proposal,and when confirming the costs associated with the restructuring involving the payment of the dismissalbenefits, whichever is earlier, the Company will recognize the employee compensation liabilities arisingfrom the dismissal benefits, and included in the current profit and loss. However, if the dismissal benefitsare not expected to be fully paid within 12 months after the end of annual reporting period, they shall betreated in accordance with other long-term employee compensations.The internal retirement plan for employees shall be treated in the same way as the above-mentioneddismissal benefits. The company will pay the internal retired staff the salary and the social insurancepremiums from the employee's lay-off to normal retirement, and will include in the current profit and loss(dismissal benefits) when the conditions of the estimated liabilities are met.If the other long-term employee benefits provided by the Company to the employees are in line withthe Defined Contribution Plan, they shall be accounted for Defined Contribution Plan, and otherwiseaccounted for the Defined Benefit Plan.

23. Lease liabilities

At the commencement date of the lease period, the Group recognizes the present value of outstandinglease payments as a lease liability, excluding short-term leases and leases of low-value assets. The Groupadopts the interest rate implicit in the lease as the discount rate to calculate the present value of the leasepayments. Where the interest rate implicit in the lease cannot be determined, the incremental borrowing rateof the lessee shall be used as the discount rate. The Group calculates the interest expense of the lease liabilityduring each period of the lease term in accordance with the constant periodic rate of interest and recognizes

it in profit and loss for the current period, except otherwise stipulated in the cost of related assets. Thevariable lease payment that is not included in the measurement of lease liabilities is recognized in the profitand loss for the current period when it actually occurs, except that it is otherwise stipulated to be includedin the cost of relevant assets.After a lease term commences, when there is a change in the amount of in-substance fixed leasepayments, a change in the amounts expected to be payable under a residual value guarantee, a change infuture lease payments resulting from a change in an index or a rate used to determine those payments, achange in assessment of an option to purchase the underlying asset, renew or terminate the lease, or changein the actual exercise of an option, the Group remeasures the carrying amount of the lease liability bydiscounting the revised lease payments

24. Estimated liabilities

When the obligations related to the contingencies meet the following conditions, they are recognizedas contingent liabilities: (1) The obligation is the present obligation assumed by the Company; (2) Theperformance of this obligation is likely to result in the outflow of economic benefits; (3) The amount of theobligation can be reliably measured.On the balance sheet date, taking into account factors such as risks, uncertainties and time value ofmoney related to contingencies, the estimated liabilities are measured in accordance with the best estimateof the expenditure required to perform the relevant current obligations.If all or part of the expenses required to discharge the estimated liabilities are expected to becompensated by the third party, the compensation amount will be separately recognized as an asset when itis basically determined to be received, and the confirmed compensation amount does not exceed the bookvalue of the estimated liabilities.

(1) Loss Contract

A loss contract is a contract in which the cost of fulfilling a contractual obligation will inevitably occurmore than the expected economic benefit. If the contract to be executed becomes a loss contract, and theobligation arising from the loss contract satisfies the conditions for the recognition of the above-mentionedestimated liabilities, the portion of the contract's estimated loss that exceeds the recognized impairment loss(if any) of the contracted asset is recognized as the estimated liability.

(2) Restructuring Obligations

For restructuring plans that are detailed, formal, and have been announced to the public, the amount ofthe estimated liabilities are determined based on the direct expenses related to the reorganization, subject tothe recognition conditions of the aforementioned estimated liabilities. For the restructuring obligation to thepart of business sold, the obligation related to the reorganization is confirmed only when the company

promises to sell part of the business (that is, when the binding sale agreement is signed).

25. Share-based Payments

(1) Accounting Treatment of Share-based Payments

A share-based payment is a transaction that grants an equity instrument or assumes a liabilitydetermined based on an equity instrument in order to obtain services from employees or other parties. Share-based Payments include equity-settled share payment and cash-settled share payment.a) Equity-settled Share PaymentThe equity-settled share payment in exchange for the services from employee is measured at the fairvalue of the granting of employees' equity instruments at the grant date. If the fair value is vested in thecompletion of the waiting period of service or the fulfillment of the required performance conditions, duringthe waiting period, the amount of the fair value is calculated by the straight-line method into the relevantcosts or expenses based on the best estimate of the number of vesting equity instruments; Or If the vestingright is granted immediately after the grant, the calculation of the amount of the fair value is included in therelevant 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 onthe latest information on the changes in the number of employees with vesting rights and corrects the numberof equity instruments that are expected to be vested. The impact of the above estimates shall be included inthe current related costs 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 fairvalue of other parties' services can be reliably measured, the fair value of other services shall be measuredat the fair value on the date of acquisition; If the fair value of the other party's services cannot be measuredreliably, the fair value shall be measured at the fair value of the equity instrument at the date the service isacquired, and is included in the relevant cost or expense, which increases the shareholders' equityaccordingly.

b) Cash-settled Share Payment

The cash-settled share payment is measured at the fair value of the liabilities determined by theCompany based on shares or other equity instruments. If the vesting right is available immediately after thegrant, the relevant costs or expenses shall be included on the date of grant, and the liabilities shall beincreased accordingly; if vesting right is available after the service is completed within the waiting periodor met the required performance conditions, based on the best estimate of the vesting rights on each balancesheet date of the waiting period, according to the fair value of the liabilities assumed by the company, theservices obtained in the current period are included in the cost or expense, and the liabilities are increasedaccordingly.

The fair value of the liabilities shall be re-measured on each balance sheet date and settlement datebefore the settlement of the relevant liabilities, and the changes shall be recorded in the profit and loss ofthe current period.

(2) Relevant Accounting Treatment of share-based payment plan’s modification and termination

When the Company modifies the share-based payment plan, if the modification increases the fair valueof the equity instruments granted, the increase in the fair value of the equity instruments is recognizedaccordingly. The increase in the fair value of equity instruments refers to the difference between the fairvalue of the equity instruments before and after the modification. If the modification reduces the total fairvalue of the share-based payment or adopts other methods that are not conducive to the employee, the serviceobtained shall continue to be accounted for, as if the change has never occurred, unless the Company cancelssome or all of equity instruments.

During the waiting period, if the granted equity instrument is cancelled, the Company will cancel thegranted equity instrument as an accelerated exercise, and the amount to be recognized in the remainingwaiting period will be immediately included in the current profit and loss, and the capital reserve will berecognized. If the employee or other party can choose to meet the non-vesting conditions but fails to meetthe waiting period, the Company will treat it as a cancellation of the equity instrument.

(3) Accounting Treatment of Share Payment Transactions between the Company and its Shareholdersor Actual Controllers

In 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 thecompany and the other is outside the company, it shall be accounted for in the consolidated financialstatements of the company according to the following provisions:

a.) If the settlement enterprise settles with its own equity instrument, the share-based paymenttransaction shall be treated as equity-settled share-based payment; otherwise, it shall be treated as 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 equity investment of the serviced enterprise according to the fair value of the equity instrument at thegrant date or the fair value of the liability to be assumed, and the capital reserve (other capital reserve) orliabilities shall be recognized.

b.) If the serviced enterprise has no settlement obligation or grants its own employees the equityinstruments, the share payment transaction shall be treated as equity-settled share payment; if the servicedenterprise has settlement obligation and grants its employees other than its own equity instruments, the sharepayment transaction shall be treated as a cash-settled share payment.

For the share based payment incurred between companies within the group, if the serviced enterpriseand the settlememt enterprise are not the same, then the payment should be recognized and measured in theirindividual financial statements, they should be accounted for using the above principles

26. Revenue

The company's operating income mainly includes income from selling goods, income from providingservices, royalty income, interest income, etc. When the company signs a contract, it evaluates the contract,identifies the individual performance obligations contained in the contract, and determines whether theindividual performance obligations are performed within a certain period of time or at a certain point of time.When the company has fulfilled all the performance obligations in the contract, the revenue shall berecognized respectively according to the transaction price apportioned to the performance obligations.

(1) Revenue recognition for fulfilling performance obligation at a certain time point

Generally, the company recognizes the revenue from the sales of goods based on the transaction priceapportioned to the single performance obligation when the customer obtains the control right of the relevantgoods on the basis of comprehensively considering the following factors: the company has the right toreceive payment in respect of the goods or services currently, that is, the customer has the obligation to payfor the goods currently; the company has transferred the legal ownership of the goods to the customer, thatis, the customer has the legal ownership of the goods; The Company has transferred the physical goods ofthe commodity to the Customer or the Customer has obtained the qualification of physical goods right ofthe commodity. The consideration obtained by the Company in respect of the transfer of the commodity islikely to be recovered. Other indications that the customer has taken control of the commodity.

The specific principles of the company's sales revenue recognition are as follows: when the commodityhave been delivered to the customer and signed by the customer for confirmation, or the ownershipcertificate of the commodity has been delivered to the customer, the sales revenue is recognized when thecompany has received the payment or obtained the evidence of payment.

(2) Revenue recognition for fulfilling performance obligation within a certain period of timeFor the performance obligations performed in a certain period of time, such as the services provided,the company adopts the output method or input method to determine the appropriate performance progress,and recognizes the revenue according to the performance progress in that period of time. On the balancesheet date, the company shall recognize the current income according to the total transaction price of thecontract multiplied by the progress of performance minus the accumulated recognized income. If one of thefollowing conditions is satisfied, it is regarded as the performance obligation performed during a certainperiod of time: the Customer obtains and consumes the economic benefits arising from the performance ofthe 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 produced by the Company during theperformance of the Contract are of irreplaceable use, and the Company shall be entitled to receive paymentfor the accumulated part of the completed performance so far during the whole term of the Contract.Otherwise, the Company recognizes revenue at the point when the Customer acquires control of the relevantgoods or services.The Company's rights to receive consideration for goods or services transferred to the Customer (andsuch rights depend on factors other than the time passage) are presented as contractual assets, which aresubject to impairment on the basis of expected credit losses. The company's right to collect considerationfrom customers unconditionally (only depending on the passage of time) is listed as receivables. Theobligation of the Company to transfer goods or services to customers for which consideration has beenreceived or receivable is presented as a contractual liability.

27. Contract cost

1. Contract performance cost

The cost incurred by the company for the performance of the contract, which does not fall within thescope of other accounting standards for business enterprises other than the income standard and meets thefollowing conditions 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 costsincurred solely as 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 amortizationperiod has exceeded one normal operating cycle at the time of its initial recognition.

2. Contract acquisition cost

If the incremental cost incurred by the company to obtain the contract is expected to be recovered, itshall be recognized as an asset as the contract acquisition cost. Incremental cost refers to the cost that willnot occur if the company does not obtain the contract.

3. Amortization of contract costs

The assets related to the contract cost mentioned above shall be amortized at the time of performanceof the obligation or according to the performance progress on the same basis as the income recognition ofthe commodity or service related to the asset and shall be recorded into the current profit and loss.

4. Impairment of contract cost

If the book value of the above assets related to the contract cost is higher than the difference betweenthe residual consideration expected to be obtained by the company due to the transfer of the goods relatedto the assets and the estimated cost to be incurred for the transfer of the relevant goods, the excess part shallbe set aside as an impairment provision and recognized as an impairment loss of the asset.

28. Government grants

Government grant refers to the company's acquisition of monetary and non-monetary assets from thegovernment free of charge, excluding the capital invested by the government as an investor and enjoyingthe corresponding owner's rights and interests. Government grants include assets-related grants and revenue-related grants. The company defines the government grant obtained for the purchase and construction oflong-term assets or for the formation of long-term assets in other ways as the government grant related toassets; the remaining government grant is defined as the government grant related to income. If the objectof grants is not specified in government documents, the grants shall be divided into income-relatedgovernment grants and assets-related government grants in the following ways: (1) If the governmentdocument clarifies the specific project for which the grant is targeted, the proportion of the expenditureamount of the assets to be formed and the amount of the expenditures included in the expenses in the budgetof the specific project are divided, and the proportion of grant division needs to be reviewed on each balancesheet day and changed if necessary. (2) In government documents, if the purpose is expressed only in generalterms and no specific project is specified, the grant shall be regarded as a government grant related to theincome. Where a government grant is a monetary asset, it shall be measured according to the amountreceived or receivable. If the government grants are non-monetary assets, they shall be measured at the fairvalue; if the fair value cannot be obtained reliably, they shall be measured at the nominal amount.Government grants measured in nominal amounts shall be recognized directly in current profits and losses.

The Company usually confirms and measures the government grant according to the amount when itis actually received. However, if there is conclusive evidence at the end of the period that the relevantconditions stipulated in the financial support policy can be met and the financial support funds are expectedto be received, it shall be measured according to the amount receivable. Government grants measured inaccordance with the amount receivable shall meet the following conditions at the same time: (1) The amountof the subvention receivable has been confirmed by the authorized government departments, or can bereasonably calculated according to the relevant provisions of the formally issued financial fund managementmeasures, and there is no significant uncertainty in the amount expected; (2) According to the "Regulationson the Openness of Government Information" that the local financial department officially released and inaccordance with the provisions of the "Regulations on the Openness of Government Information," thefinancial support project and its financial fund management measures should be inclusive (any eligibleenterprise can apply for them), rather than being specifically tailored to specific companies; (3) The relevant

grant approval has clearly promised the payment period, and the allocation of the payment is guaranteed bythe corresponding budget, so it can be reasonably ensure that it can be received within the prescribed timelimit; (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 currentprofits and losses in a reasonable and systematic way during the service life of the assets concerned. Thegovernment grants related to revenue, which are used to compensate for the related cost or loss in thesubsequent period, shall be recognized as deferred income, and shall be recognized in profit or loss in theperiod in which the related costs or losses are recognized; if it is used to compensate the related costs orlosses that has occurred, it shall be directly recognized in the current profit and loss.

It includes government grants related to both assets and income, and different parts are separatelyclassified for accounting treatment; if it is difficult to distinguish, the whole is classified as governmentgrants related to income.

Government grants related to the daily activities of the Company shall be included in other income orcost deductions according to the nature of the economic business; government subsidies unrelated to dailyactivities shall be included in the non-operating revenues and expenses.

When the recognized government grants need to be returned, if there are relevant deferred earningsbalances, the book balance of related deferred earnings shall be deducted, and the excess part shall beincluded in the current profits and losses or the book value of assets shall be adjusted, otherwise, the bookvalue of assets shall be directly included in the current profits and losses.

The company will obtain preferential policy loans discount in accordance with the finance will beallocated to the loan bank discount funds and the finance will be directly allocated to the company discountfunds in two cases:

(1) If the finance department allocates the discount interest funds to the lending bank, and the lendingbank provides the loan to the Company at the policy preferential interest rate, the Company chooses toconduct accounting treatment according to the following methods: the loan amount actually received shallbe taken as the entry value of the loan, and the relevant borrowing costs shall be calculated in accordancewith the loan principal and the policy preferential 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.

29. Deferred Income Tax Assets / Deferred Income Tax Liabilities

(1) Current Income Tax

On the balance sheet date, the current income tax liabilities (or assets) formed in the current andprevious periods are measured by the expected amount of income tax payable (or returned) in accordancewith the provisions of the Tax Law. The amount of taxable income on which current income tax expenses

are calculated is based on the corresponding adjustment of pre-tax accounting profits in the reporting periodin accordance with the relevant tax laws.

(2) Deferred Income Tax Assets and Deferred Income Tax Liabilities

The difference between the book value of certain assets and liabilities and their tax basis, and thetemporary difference between the book value of items that are not recognized as assets and liabilities butwhich can be determined as their tax basis according to the tax law, are confirmed by the balance sheetliability method.Taxable temporary differences which related to the initial recognition of goodwill and the initialrecognition of an asset or liability arising from a transaction that is neither a business combination nor anaccounting profit or taxable income (or deductible loss), relevant deferred income tax liabilities shall not berecognized. In addition, for taxable temporary differences related to investments in subsidiaries, associatesand joint ventures, if the Company is able to control the turnaround time of temporary differences, and thetemporary difference is unlikely to be reversed in the foreseeable future, the related deferred income taxliabilities shall not be recognized. Except for the above exceptions, the Company recognizes all otherdeferred income tax liabilities arising from taxable temporary differences.Taxable temporary differences which related to the initial recognition of an asset or liability arisingfrom a transaction that is neither a business combination nor an accounting profit or taxable income (ordeductible loss), relevant deferred income tax liabilities shall not be recognized. In addition, for taxabletemporary differences related to investments in subsidiaries, associates and joint ventures, if the temporarydifference is unlikely to be reversed in the foreseeable future, or the amount of taxable income used to offsetthe temporary difference is unlikely to be obtained in the future, the deferred income tax assets concernedshall not be recognized. Except for the above exceptions, the Company recognizes other deferred incometax assets that can offset temporary differences, subject to the amount of taxable income that is likely to beobtained 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 shallbe used to offset the deductible losses and tax credits.On the balance sheet date, the deferred income tax assets and deferred income tax liabilities shall bemeasured at the applicable tax rates in the period in which the related assets are recovered or the relatedliabilities are recovered in accordance with the tax laws.On the balance sheet date, the book value of deferred income tax assets is reviewed. and the book valueof deferred income tax assets is written down if it is likely that sufficient taxable income will not be availableto offset the benefits of deferred income tax assets in the future. When it is possible to obtain sufficienttaxable income, the amount written down shall be reversed.

(3) Income tax expenses

Income tax expenses include current income tax and deferred income tax.In addition to recognizing that the current income tax and deferred income tax related to othertransactions and matters directly included in shareholder's rights and interests shall be recognized in othercomprehensive income or shareholder's rights and interests, and the book value of adjusted goodwill fromdeferred income tax resulting from the merger of enterprises, the other current income tax and deferredincome tax expenses or gains shall be recognized in 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 acquireassets and pay off liabilities at the same time, the company's current income tax assets and current incometax liabilities shall be presented on a net basis after the offset.

When it has the legal right to settle current income tax assets and current income tax liabilities on a netbasis, and deferred income tax assets and deferred income tax liabilities are related to the income tax leviedby the same tax administration department on the same tax payer or to different tax payers, but in the future,during each important period of deferred income tax assets and liabilities being reversed, the taxpayerinvolved intends to settle the current income tax assets and liabilities on a net basis, or acquire assets andpay off liabilities simultaneously, the deferred the income tax assets and deferred income tax liabilities ofthe Company shall be presented on a net basis after offset.

30. Lease

Finance lease is a lease that essentially transfers all risks and rewards related to the ownership of assets.Its ownership may or may not be transferred eventually. Leases other than finance leases are operating leases.

(1) The Company records operating lease business as a lessee.

Rental expenses for operating leases shall be included in the related asset costs or current profits andlosses in the straight-line method during each period of the lease period. The initial direct costs shall beincluded in the current profits and losses. Contingent rentals shall be recognized in profits and losses whenincurred.

(2) The company records operating lease business as a lessor

The rental income of operating lease shall be recognized as current profit and loss according to thestraight-line method during each period of the lease period. The larger initial direct expenses are capitalizedwhen occurring, and the profits and losses of the current period shall be recorded in stages on the same basisas the recognized rental income during the whole lease period; the smaller initial direct expenses shall berecorded in the profits and losses of the current period when occurring. Contingent rentals shall be includedin current profits and losses when actually occurring.

(3) The company records financial lease business as a lessee

At the beginning of the lease period, the lower of the fair value of the leased assets and the presentvalue of the minimum lease payment on the lease start date is regarded as the entry value of the leased assets,and the lowest lease payment shall be regarded as the entry value of the long-term payables, and thedifference shall be regarded as the unrecognized financing cost. In addition, the initial direct costsattributable to the lease project shall also be included in the value of the leased assets when they occur duringthe lease negotiation and the signing of the lease contract. The balance of the minimum lease payment afterdeducting the unrecognized financing costs shall be presented as long-term liabilities and long-termliabilities due within one year, respectively.The unrecognized financing cost shall be calculated by the real interest rate method during the leaseperiod. Contingent rentals shall be included in current profits and losses when actually occurring.

(4) The company records financial lease business as a lessor

At the beginning of the lease period, the sum of the minimum lease receipt and the initial direct cost onthe lease start date is regarded as the entry value of the financial lease receivable, and the unsecured balanceshall be recorded. The difference between the sum of the minimum lease receivable, the initial direct costand the unsecured balance and the sum of its present value is recognized as the unrealized financing income.The balance of the receivable financial lease after deducting the unrealized financial income shall bepresented as long-term claims and long-term claims maturing within one year, respectively.

The unrealized financing income shall be calculated and confirmed by the real interest rate methodduring the lease period. Contingent rentals shall be recognized in current profits and losses when actuallyoccurring.

31. Other important accounting policies and accounting estimates

(1) Termination of business

Termination of operation refers to a component that meets one of the following conditions, can beseparately distinguished and has been disposed of or classified as held for sale by the Company: ① Thiscomponent represents an independent major business or a separate major business area. ② This componentis part of an associated plan to dispose of an independent major business or a separate major business area.

③ This component is a subsidiary company acquired specifically for resale.

For the accounting treatment methods for termination of operations, please refer to the relevantdescriptions in Note 3, 12 “Assets held for sale and disposal group".

(2) Hedge accounting

In order to avoid some risks, the Company hedges some financial instruments as hedging instruments.For the hedges meeting the specified conditions, the Company adopts the hedge accounting method for

treatment. The hedging of the Company is fair value hedging.At the beginning of hedging, the Company formally designates hedging instruments and hedged items,and prepares written documents on hedging relationship and risk management strategy and risk managementobjectives of the Company engaged in hedging. In addition, the Company will continuously evaluate theeffectiveness of hedging at the beginning and after the hedging.Fair value hedgingIf a hedging instrument is designated as a fair value hedge and meets the conditions, the profits or lossesarising therefrom shall be included into the current profits and losses. If the hedging instrument hedges thenon-trading equity instrument investment (or its components) that is measured at fair value and whosechanges are included in other comprehensive income, the gains and losses generated by the hedginginstrument are included in other comprehensive income. The profit or loss of the hedged item due to thehedged risk exposure shall be included into the current profits and losses, and the book value of the hedgeditem shall be adjusted at the same time. If the hedged item is measured at fair value, the gain or loss of thehedged item due to the hedged risk does not need to adjust the book value of the hedged item, and therelevant gains and losses are included into the current profits and losses or other comprehensive income.When the Company cancels the designation of the hedging relationship, the hedging instrument hasexpired or been sold, the contract has been terminated or exercised, or no longer meets the conditions forthe application of hedge accounting. The application of hedge accounting shall be terminated.

32. Significant accounting judgments and estimates

In the process of applying accounting policies, due to the inherent uncertainty of business activities,the Company needs to judge, estimate and assume the book value of statement items that cannot beaccurately measured. These judgments, estimates and assumptions are based on the Company'smanagement's past historical experience and other relevant factors. These judgments, estimates andassumptions will affect the reported amounts of income, expenses, assets and liabilities and the disclosureof contingent liabilities at the balance sheet date. However, the actual results caused by the uncertainty ofthese estimates may be different from the current estimates of the Company's management, resulting in asignificant adjustment to the carrying amount of the assets or liabilities affected in the future.

The Company reviews the aforesaid judgments, estimates and assumptions on a regular basis on thebasis of going concern. If the change of accounting estimates only affects the current period of change, thenumber of impacts shall be recognized in the current period of change. If the change affects both the currentand future periods, the number of impacts will be confirmed in the current and future periods of the change.

On the balance sheet date, the Company needs to judge, estimate and assume the amount of financialstatement items in the following important areas:

1. Impairment of financial assets

The Company uses the expected credit loss model to evaluate the impairment of financial instruments.The application of the expected credit loss model requires significant judgment and estimation, and allreasonable and basis information, including forward-looking information, shall be considered. In makingthese judgments and estimates, the Company deduces the expected changes in the debtor's credit risk basedon historical data and combined with economic policies, macroeconomic indicators, industry risks, externalmarket environment, technological environment, changes in customer conditions and other factors.

2. Inventory falling price reserves

According to the inventory accounting policy, the Company measures according to the lower of costand net realizable value. For the inventory whose cost is higher than net realizable value and which isobsolete and unsalable, the Company makes provision for inventory falling price. Impairment of inventoriesto net realizable value is based on the evaluation of the marketability of inventories and their net realizablevalue. The appraisal of impairment of inventories requires the management to make judgment and estimationon the basis of obtaining conclusive evidence and considering factors such as the purpose of holdinginventories and the influence of events after the balance sheet date. The difference between the actual resultand the original estimate will affect the book value of inventory and the accrual or reversal of inventorydepreciation reserve during the period when the estimate is changed.

3. Provision for impairment of long-term assets

On the balance sheet date, the Company judges whether there are signs of possible impairment for non-current assets other than financial assets. For intangible assets with uncertain service life, in addition to theannual impairment test, the impairment test is also carried out when there are signs of impairment. Othernon-current assets other than financial assets shall be tested for impairment when there are indications thattheir book amounts are not recoverable.

When the book value of an asset or asset group is higher than the recoverable amount, that is, the higherof the net amount of the fair value minus the disposal expenses and the present value of the estimated futurecash flow, it indicates that an impairment has occurred

The net amount of the fair value less the disposal expenses shall be determined by referring to the salesagreement price or observable market price of similar assets in fair transactions, and deducting theincremental cost directly attributable to the disposal of such assets.

When estimating the present value of future cash flow, it is necessary to make a significant judgmenton the output, sales price, related operating costs and the discount rate used in the calculation of the presentvalue of the asset (or asset group). In estimating the recoverable amount, the Company will use all relevantinformation available, including forecasts of production, selling price and related operating costs based onreasonable and supportable assumptions.

The Company shall test whether goodwill is impaired at least every year. This requires an estimate ofthe present value of the future cash flows of the asset group or portfolio of asset groups to which goodwillhas been allocated. When predicting the present value of future cash flow, the Company needs to predict thecash flow generated by the future asset group or asset group portfolio, and at the same time, select theappropriate discount rate to determine the present value of future cash flow.

4. Depreciation and amortization

After considering the residual value of investment real estate, fixed assets and intangible assets, theCompany will accrue depreciation and amortization on a straight-line basis during their service lives. TheCompany reviews the service life regularly to determine the amount of depreciation and amortizationexpenses to be included in each reporting period. The service life is determined by the Company based onthe past experience of similar assets and in portfolio with the expected technological updates. If there is asignificant change in previous estimates, the depreciation and amortization charges will be adjusted in thefuture.

5. Deferred income tax assets

To the extent that there is likely to be sufficient taxable profits to offset the losses, the Companyrecognizes deferred income tax assets for all unused tax losses. This requires the Company's managementto use a large number of judgments to estimate the time and amount of future taxable profits, combined withtax planning strategies, to determine the amount of deferred income tax assets to be recognized.

6. Income tax

In the normal business activities of the Company, there are certain uncertainties in the final taxtreatment and calculation of some transactions. Whether some items can be paid before tax requires theapproval of the tax authorities. If there is a difference between the final determination result of these taxmatters and the amount initially estimated, the difference will have an impact on the current income tax anddeferred income tax during the final determination period.

7. Accrued liabilities

According to the terms of the contract, existing knowledge and historical experience, the Companyestimates and makes corresponding provision for product quality assurance, estimated contract losses,liquidated damages for delayed delivery, etc. In the event that such contingencies have formed a currentobligation and the performance of the current obligations is likely to result in outflow of economic benefitsfrom the Company, the Company recognizes the contingencies as estimated liabilities based on the bestestimate of the expenditure required to perform the relevant current obligations. The recognition andmeasurement of the estimated liabilities depend to a large extent on the judgment of the management. In theprocess of judgment, the Company needs to evaluate the risks, uncertainties, time value of money and otherfactors related to these contingencies.

Among them, the Company will make an estimated liability for the after-sales quality maintenancecommitments provided to customers for the sale, maintenance and renovation of the goods sold. TheCompany's recent maintenance experience data have been taken into account when estimating liabilities, butthe recent maintenance experience may not reflect the future maintenance situation. Any increase or decreasein this provision may affect the profit and loss in the future years.

8. Fair value measurement

Certain assets and liabilities of the Company are measured at fair value in the financial statements.When estimating the fair value of an asset or liability, the Company adopts the available observable marketdata available. If the first level input value cannot be obtained, the Company will employ a qualified third-party appraiser to perform the appraisal. The Company works closely with qualified external appraisers todetermine the appropriate valuation techniques and inputs to the relevant models

IV. Taxes

1. Main Taxes and Tax Rates

Types	Tax Basis	Tax Rate
Value Added Tax	After deducting the allowable amount of input tax deducted in the current period, the difference between the sales of goods, taxable services and taxable services income calculated in accordance with the 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 value added tax and consumption tax on the basis of actual payment	3%
Local Extra Charges of Education Funds	According to value added tax and consumption tax on the basis of actual payment	2%
Corporate Taxes	According to taxable income	25%、17%、15%、20%
Property Tax	According to 70% of original value of the real estate (or rental income) as the tax base; according to the original value of the real estate deducted 30% at a time.	12%、1.2%

The company conducts VAT taxable sales or imports goods. According to the announcement issued byMinistry of Finance, State Administration of Taxation and China Custom about the policy relating todeepening VAT reform (Announcement by Ministry of Finance, State Administration of Taxation and ChinaCustom (2019) No.39), from 1st April 2019 onwards, the applicable rates are adjusted to 13%/9%.Meanwhile, the company can deduct VAT by additional deductible rate of 10% from 1st April 2019 to 31stDecember 2022 because of its business nature as service provider.

Representation on tax payers of different enterprise income tax rates:

Tax Payers	Income Tax Rate
Jingliang (Singapore) International Trade Co., Ltd.	17%
Beijing Guchuan Bread Food Co., Ltd.	15%

Tax Payers	Income Tax Rate
Hangzhou Lin'an Chunmanyuan Agricultural Development Co., Ltd.	20%

2. Important preferential tax policies and basis

Hangzhou Linan Little Angel Food Co., Ltd., a 4th tier subsidiary company of the Company, is awelfare enterprise. Since May 2016, it has enjoyed the preferential VAT policy of immediate refund uponpayment in Preferential Value-Added Tax Policies for Promoting the Employment of Disabled Persons(CaiShui [2016] No.52).The level 2 subsidiary of the company-Jingliang Caofeidian Agricultural Development Limited,according to the document JTCFDST(2018) No. 1539765025415 issued by tax authority of CaofeidianDistrict, Tangshan, affiliated to State Administration of Taxation, and also followed the rules in Law of thePeople's Republic of China on the Administration of Tax Collection, The Implementation Guideline of Lawof the People's Republic of China on the Administration of Tax Collection, the rice under the brand ofTixiang produced by Caofeidian company if exempted from VAT.The level 2 subsidiary of the company-Jingliang Caofeidian Agricultural Development Limited,according to the rules under Clause 27 of Corporate Law and its Implementation Guideline Clause 86, therice under the brand of Tixiang produced by Caofeidian company if exempted from Corporation tax.

Beijing Guchuan Bread&Food Co., Ltd., a 3rd tier subsidiary of the Company, is a high-tech enterprise.It enjoys the preferential tax policy of paying enterprise income tax at the 15% tax rate according to therelevant provisions of both “Law of the People's Republic of China on Tax Collection and Administration”and “Rules for the Implementation of the Tax Collection and Administration Law of the People's Republicof China”. It obtained the certificate of high-tech enterprise No. GR202111000657, valid until September14, 2024.

The third level subsidiary of the company, Beijing Tianweikang oil and fat distribution center Co., Ltd.,is exempt from stamp tax on capital account books and purchase and sales contracts signed in the course ofundertaking commodity reserve business according to the announcement of the Ministry of Finance and theState Administration of Taxation on the continuation of the preferential tax policies for some nationalcommodity reserves (No. 8 of 2022) issued by the Beijing Municipal Bureau of finance, the StateAdministration of Taxation and the Beijing Municipal Bureau of Taxation (Beijing Finance Tax [2022] No.1230), Stamp tax payable by other parties to the contract shall be collected according to regulations. Thereal estate and land used for self use by undertaking commodity reserve business shall be exempted fromreal estate tax and urban land use tax. The notice will be implemented from January 1, 2022 to December31, 2023.

Jingliang (Singapore) International Trade Co., Ltd., a third level subsidiary of the company, is taxed

according to the principle of territoriality. According to Singapore's tax exemption policy, the company canenjoy the following tax exemption plan: for the first $10000 of taxable income, deduct $7500; for the partbetween $10001 and $200000, deduct $95000; for the part exceeding $200001, the company will not beexempted. The company will pay income tax at the rate of 17% based on the taxable income after taxexemption.Linqing Little Prince Food Co., Ltd., a fourth-level subsidiary of the company, shall be subject to 50%of the sales revenue on the basis of the stamp tax payable in the industrial procurement link and sales linkin the purchase and sale contract of industrial enterprises according to the Announcement No.10, 2018 issuedby Shandong Provincial Tax Bureau. The base of stamp duty payable in 2022 shall be calculated accordingto 50% of the sales revenue.Company’s level 4 subsidiary-Liaoning Xiaowangzi Food Limited, according to the SupplementaryAnnouncement on Land Use Tax issued by Ministry of Finance and State Administration of Taxation (89)GSDZ No.140 Clause 13 states that public land such as municipal street, square, public green etc. can beexempted from land use tax, when computing land use tax, the area used in the computation is total area lessthe area for afforest and street.Company’s level 4 subsidiary-Hangzhou Lin'an Chunmanyuan Agricultural Development Co., Ltd. ,according to the Announcement of the State Administration of Taxation on Matters Relating to theImplementation of Preferential Income Tax Policies to Support the Development of Small and Micro-profitEnterprises and Individual Entrepreneurs and State Administration of Taxation Announcement No. 8 of 2021,from January 1, 2021 to December 31, 2022, for small and micro-profit enterprises with annual taxableincome not exceeding RMB1 million The part of the annual taxable income of small and medium-sizedenterprises shall be reduced by 12.5% of the taxable income and the enterprise income tax shall be calculatedat a tax rate of 20%.The company level 4 subsidiary Jingliang (Hebei) Oil Industry Co., Ltd., according to the financialdepartment documents, local taxation bureau in Hebei province, Hebei province document Ji caishui [2019]No. 56 "about parts reserve commodity announcement concerning the tax policy, accounting books shall beexempt from stamp duty for funds, to undertake business book stand in the process of buying and sellingcontract commodity reserves shall be exempt from stamp duty, other parties in the contract should pay thestamp duty shall also be subject to duty-payment according to the parties. Property tax and land use tax ofcities and towns shall be exempted from the property tax and land use tax of cities and towns that undertakethe business of commodity reserve for their own use. The notice will be executed on January 1, 2022 andwill terminate on 31 December., 2023.Jingliang (Hebei) Oil Industry Co., Ltd., a 4th subsidiary company of the Company, exempts the saleof edible vegetable oil stored by the government from VAT according to “Notice of the Ministry of Finance

and the State Administration of Taxation on the Levy and Exemption of Value Added Tax for FoodEnterprises”（Cai Shui [1999] No.198）

Ⅴ. Changes in accounting policies, accounting estimates, and explanation of corrections toprevious errors

1. Changes in accounting policies

There is no change in accounting policies during the reporting period.

2. Changes in accounting estimates

There is no change in accounting estimate during the reporting period.

3. Correction of previous accounting errors

There is no previous accounting error correction in this reporting period.

Ⅵ. Notes on Items in Consolidated Financial Statements

Note: The ‘beginning’ of the period refers to January 1st, 2022 and the ‘end’ of the period refers to June

th, 2022. The previous period refers to the semiannual of 2021 and the current period refers to thesemiannual of 2022.

1. Monetary funds

(1) Classification list

Items	Ending Balance	Beginning Balance
Cash	37,656.19	15,012.17
Bank Deposits	625,517,712.74	465,853,913.24
Other Currency Funds	185,380,838.97	41,275,743.04
Total	810,936,207.90	507,144,668.45
Among them: the total amount of money deposited abroad	18,641,508.38	16,432,706.23

(2) At the end of the period, there was 47236.26 yuan of frozen funds in the long-standing account,which was cancelled on July 1, 2022 and unfrozen.

(3) At the end of the period, there is no funds deposited abroad and the return of funds is restricted.

2. Transactional financial assets

Items	Ending Balance	Beginning Balance
Financial assets measured at fair value with changes included in current profits and losses	20,000,000.00	40,377,048.08
Among them: debt instrument investment	20,000,000.00	40,377,048.08
Total	20,000,000.00	40,377,048.08

3. Derivative financial assets

Items	Ending Balance	Beginning Balance
Changes in fair value of hedging instruments	170,724,737.45
Total	170,724,737.45

Note: The Company hedges the inventories and expected transactions corresponding to the varietiesinvolved in the production, operation and trade business, and lists the hedging instruments in this table.

4. Accounts Receivable

（1）Disclosed according to aging

Aging	Ending Balance
Within 1 Year (including 1 year)	88,431,686.35
Among them: Within the credit (within 3 months)	63,145,461.86
Credit period to 1 year	25,286,224.49
1 to 2 years (including 2 years)	7,821,775.78
2 to 3 years (including 3 years)	0.00
3 to 4 years (including 4 years)	996,000.00
4 to 5 years (including 5 years)	12,508.15
More than 5 years	436,259.50
Sub-total	97,698,229.78
Less Bad Debt provision	1,909,063.21
Total	95,789,166.57

（2）Present according to the method of provision for bad debt

Type(s)	Ending Balance
	Book Balance		Bad Debt Provision		Book Value
	Amount	Ratio(%)	Amount	Provision Ratio(%)
Separate provision for bad debts	1,324,259.50	1.36	1,324,259.50	100.00
Portfolio provision for bad debts	96,373,970.28	98.64	584,803.71	0.61	95,789,166.57
Among them: portfolio 1	84,355,863.35	86.34	584,803.71	0.69	83,771,059.64
portfolio 2	12,018,106.93	12.30			12,018,106.93
Total	97,698,229.78	100.00	1,909,063.21	----	95,789,166.57

（Continued）

Type(s)	Beginning Balance
	Book Balance		Bad Debt Provision		Book Value
	Amount	Ratio(%)	Amount	Provision Ratio(%)
Separate provision for bad debts	1,324,259.50	1.57	1,324,259.50	100.00
Portfolio provision for bad debts	83,278,298.33	98.43	584,203.71	0.70	82,694,094.62

Type(s)	Beginning Balance
	Book Balance		Bad Debt Provision		Book Value
	Amount	Ratio(%)	Amount	Provision Ratio(%)
Among them: portfolio 1	74,329,280.51	87.86	584,203.71	0.79	73,745,076.80
portfolio 2	8,949,017.82	10.58			8,949,017.82
Total	84,602,557.83	100.00	1,908,463.21		82,694,094.62

A. Separate provision for bad debts

Name	Ending Balance
	Accounts Receivable	Bad Debt Provision	Provision Ratio	Provision Reason
Beijing Xidan spicy town food limited	996,000.00	996,000.00	100.00	expected unrecoverable
Beijing Rongfa Lida Grain and Oil Trade Co., Ltd.	163,143.00	163,143.00	100.00	expected unrecoverable
Others	165,116.50	165,116.50	100.00	expected unrecoverable
Total	1,324,259.50	1,324,259.50	－－	－－

B. Portfolio provision for bad debts

1. Portfolio provision: aging portfolio

Name	Ending Balance			Beginning Balance
	Accounts receivable	Bad Debt Provision	Provision Ratio	Accounts receivable	Bad Debt Provision	Provision Ratio
Within 1 Year (including 1 year)	76,413,579.42	75,708.40		65,611,523.16	34,531.93
Among them: Within the credit (within 3 months)	72,628,159.42	0.00	0	63,884,932.01		0
Credit period to 1 year	3,785,420.00	75,708.40	2	1,726,591.15	34,531.93	2
1 to 2 years (including 2 years)	7,821,775.78	391,088.79	5	8,594,045.46	429,702.27	5
2 to 3 years (including 3 years)	0.00	0.00	20			20
3 to 4 years (including 4 years)	0.00	0.00	50			50
4 to 5 years (including 5 years)	12,508.15	10,006.52	80	18,711.89	14,969.51	80
More than 5 years	108,000.00	108,000.00	100	105,000.00	105,000.00	100
Total	84,355,863.35	584,803.71		74,329,280.51	584,203.71

2. Portfolio provision: related parties portfolio

Name	Ending Balance			Beginning Balance
	Accounts receivable	Bad Debt Provision	Provision Ratio	Accounts receivable	Bad Debt Provision	Provision Ratio
Related parties portfolio	12,018,106.93			8,949,017.82

Name	Ending Balance			Beginning Balance
	Accounts receivable	Bad Debt Provision	Provision Ratio	Accounts receivable	Bad Debt Provision	Provision Ratio
Total	12,018,106.93			8,949,017.82

3. details of bad debt provision

Items	Beginning Balance	The amount changed for the period					Ending Balance
		Addition	Withdrawal or reversal	Write-off	Other changes
Bad debt provision on individual basis	1,324,259.50						1,324,259.50
Credit impairment loss	584,203.71	600.00					584,803.71
Total	1,908,463.21	600.00					1,909,063.21

4. Accounts receivable actually written off in the current period

There is no accounts receivable written off during the period.

5. Accounts Receivable of the Top 5 Balances Collected by Debtors at the End of the Period

Debtors	Accounts receivable	Ratio of total accounts receivable (%)	Aging	Whether related	Bad Debt Provision
Tangshan Caofeidian District Finance Bureau	25,997,336.04	26.61	Within 1 year or 1 to 2 years	No	374,974.00
Zhejiang Lvqin Supply Chain Management Co., Ltd.	7,211,503.93	7.38	Within 1 year	No
Shanghai Laiyifen Co.,Ltd.	5,745,933.30	5.88	Within 3 month	No
COFCO Sihaifeng (Zhangjiagang) Trading Co., Ltd	4,366,405.68	4.47	Within 3 month	No
Wumart South Development Co., Ltd.	4,339,327.38	4.44	1 year to 2 years	No	48,102.10
Total	47,660,506.33	48.78	——	——	423,076.10

5. Advanced Payment

(1) Advances are presented by age

Aging	Ending Balance		Beginning Balance
	Amount	Ratio (%)	Amount	Ratio (%)
Within 1 year (including 1 year)	276,334,931.22	99.99	87,713,762.15	99.90
1 to 2 years (including 2 years)	0.00	-	90,000.00	0.10
2 to 3 years (including 3 years)	30,000.00	0.01
More than 3 years	0.00	-

Aging	Ending Balance		Beginning Balance
	Amount	Ratio (%)	Amount	Ratio (%)
Total	276,364,931.22	100.00	87,803,762.15	100.00

(2) Advance payment of the top five Ending Balances by prepaid objects

Debtor Name	Ending Balance	Ratio of the total ending balance of prepayments (%)
TIANJIN CUSTOMS DISTRICT P.R.CHINA	127,057,304.04	38.94
Sinograin Oils Corporation	108,919,676.23	33.38
Tianjin Lingang Port Group Co., Ltd	8,161,206.05	2.5
Jiangsu Jianghai grain and Oil Group Co., Ltd	6,852,000.00	2.1
Bangji Zhengda (Tianjin) grain and Oil Co., Ltd	5,478,745.84	1.68
Total	256,468,932.16	78.6

6. Other Receivables

A. Overview

(1) Classification

Item(s)	Ending Balance	Beginning Balance
Interest Receivable
Dividend Receivable
Other Receivables	134,897,411.13	284,756,636.27
Total	134,897,411.13	284,756,636.27

B. Other Receivables

（1）Disclosed according to aging

Aging	Ending Balance
Within 1 Year (including 1 year)	134,251,771.13
Among them: Within the credit (within 3 months)	100,099,385.68
Credit period to 1 year	34,152,385.45
1 to 2 years (including 2 years)	335,837.00
2 to 3 years (including 3 years)	89,589.00
3 to 4 years (including 4 years)	102,714.00
4 to 5 years (including 5 years)	95,000.00
More than 5 years	123,197.85
Sub-Total	134,998,108.98
Less Bad Debt provision	100,697.85
Total	134,897,411.13

（2）Classification of other receivables by nature of funds

	Book Balance at End of Period	Book Balance at Beginning of Year
Guaranteed Deposit and Deposit	120,351,735.89	277,445,730.08
Intercourse Funds of Units	13,747,226.79	6,142,777.03
Employee Receivables	747,480.76	755,783.37
Tax Refund Receivables		363,103.93
Others	151,665.54	149,939.71
Total	134,998,108.98	284,857,334.12

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 2022	100,697.85			100,697.85
Carrying amount on 1st January 2022 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
Reverse for the period
Transfer for the period
Write off for the period
Other changes
Amount on June 30th, 2022	100,697.85			100,697.85

D. Details of bad debt provision

Type	Carrying amount at the beginning	Amount changes for the period				Carrying amount at the end
		Addition	Withdrawal or reversal	Write-off	Other changes
Credit impairment loss	100,697.85					100,697.85
Total	100,697.85					100,697.85

E. Other receivables actually written off in the current periodNo other receivables were written off during the current period.F. Other receivables according to top five of balance at end of period collected by debtors

Name of Organization	Nature of Funds	Balance at End of Period	Aging	Proportion in overall ending balance of other receivables (%)	Ending balance of bad debt reserves
Beijing Capital Futures Co., Ltd	Futures margin	61,574,507.20	Within 1 year	45.61
Haitong Futures Co., Ltd	Futures margin	27,236,112.80	Within 1 year	20.18
Sdic Cgog Futures Co., Ltd.	Futures margin	17,471,005.20	Within 1 year	12.94
Beijing yangu grain and oil purchase and sales Co., Ltd	Storage fee	13,421,626.47	Within 1 year	9.94
ADM International Sarl	Deposits	10,039,500.00	Within 1 year	7.44
Total	—	129,742,751.67		96.11

7. Inventory

(1) Inventory Category

Items	Ending Balance			Beginning Balance
	Book Balance	Falling Price Reserves	Book Value	Book Balance	Falling Price Reserves	Book Value
Raw Materials	243,932,236.96	120,997.67	243,811,239.29	120,983,829.85	120,997.67	120,862,832.18
Revolving Materials	5,184,025.19	0.00	5,184,025.19	5,247,229.29		5,247,229.29
Goods and materials in transit	568,416,059.36	0.00	568,416,059.36	522,101,505.11		522,101,505.11
Inventory goods	1,558,615,267.65	355,731.86	1,558,259,535.79	1,007,319,237.46	355,731.86	1,006,963,505.60
Replacement of oil reserve	245,116,134.92		245,116,134.92	248,197,500.00		248,197,500.00
Total	2,621,263,724.08	476,729.53	2,620,786,994.55	1,903,849,301.71	476,729.53	1,903,372,572.18

(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		Decreased Amounts in the Current Period		Balance at End of Period
		Accrual	Others	Recover or Charge Off	Others
Stock Goods	355,731.86					355,731.86
Raw material	120,997.67					120,997.67
In total	476,729.53					476,729.53

（3）Stock Goods listed by major product type

Items	Ending Balance			Beginning Balance
	Book Balance	Falling Price Reserves	Book Value	Book Balance	Falling Price Reserves	Book Value
Grease	1,540,840,593.86	170,341.46	1,540,670,252.40	975,554,568.82	170,341.46	975,384,227.36

8. Non-current assets due within one year

Items	Balance at End of Period	Balance at Beginning of Period
Three-year term deposits	145,318,533.34	156,139,100.00
In total	145,318,533.34	156,139,100.00

9. Other Current Assets

Items	Balance at End of Period	Balance at Beginning of Period
Financial Products	499,999,000.00	742,800,000.00
Pre-paid Taxes and Fees	25,453,200.78	1,192,806.93
Pending Deduct VAT Input Tax	57,863,273.60	13,930,489.13
Fair Value Changes of Items Trapped at Hedging	30,857,817.86	62,577,325.41
In total	614,173,292.24	820,500,621.47

10. Long-term Equity Investment

Invested Unit	Balance at Beginning of Year	Increase or Decrease in the Current Period
		Additional Investment	Negative Investment	Confirmed Profit and Loss on Investment under Equity Law
1. Cooperative Enterprise
Beijing CHIA TAI Feedmill Limited	112,016,416.64			8,593,354.95
Sub-total	112,016,416.64			8,593,354.95
2. Joint Venture
China Grain Reserves (Tianjin) Warehouse Logistics Co., Ltd.	111,894,762.89			3,168,844.69
Jingliang Mismi Catering Management (Beijing) Co., Ltd.	6,888,258.00
Sub-total	118,783,020.89			3,168,844.69
Total	230,799,437.53			11,762,199.64

(Continued)

Increase or Decrease in the Current Period

Balance at End

Ending Balance

Items

Items	Ending Balance			Beginning Balance
	Book Balance	Falling Price Reserves	Book Value	Book Balance	Falling Price Reserves	Book Value
and oils
Food	17,774,673.79	185,390.40	17,589,283.39	31,764,668.64	185,390.40	31,579,278.24
Total	1,558,615,267.65	355,731.86	1,558,259,535.79	1,007,319,237.46	355,731.86	1,006,963,505.60

Adjustment of other comprehensive income	Other changes in equity	Announce to Distribute Case Dividends or Profits	Accrual of Impairment Reserves	Others	of Period	of Impairment Reserves
					120,609,771.59
					120,609,771.59
					115,063,607.58
					6,888,258.00
					121,951,865.58
					242,561,637.17

11. Other equity instruments investment

Item	Ending Balance	Beginning Balance
Chongqing long jinbao network technology co. LTD	20,000,000.00	20,000,000.00
Total	20,000,000.00	20,000,000.00

12. Investment Real Estate

(1) Investment Real Estate Adopting Cost Measurement Model

Items	Buildings	Land Use Right	Projects under Construction	Total
One. Original Book Value
1. Balance at Beginning of Year	53,844,801.60			53,844,801.60
2. Increased Amounts in the Current Period	978,420.00			978,420.00
(1) Outsourcing	978,420.00			978,420.00
(2) Inventory transfer
(3) Others
3. Decreased Amounts in the Current Period
(1) Disposal
(2) Other transfer out
4. Balance at End of Period	54,823,221.60			54,823,221.60
Two. Accumulated Impairment and Accumulated Amortization
1. Balance at Beginning of Year	22,331,321.34			22,331,321.34
2. Increased Amounts in the Current Period	1,189,598.10			1,189,598.10
(1) Accrual or Amortization	1,189,598.10			1,189,598.10
3. Decreased Amounts in the Current Period

(1) Disposal
(2) Other transfer out
4. Balance at End of Period	23,520,919.44			23,520,919.44
Three. Impairment Reserves
1. Balance at Beginning of Year	10,587,796.70			10,587,796.70
2. Increased Amounts in the Current Period
(1) Accrual
(2) Inventory transfer
3. Decreased Amounts in the Current Period
(1) Disposal
(2) Other transfer out
4. Balance at End of Period	10,587,796.70			10,587,796.70
Four. Book Value
1. Book Value at End of Period	20,714,505.46			20,714,505.46
2. Book Value at Beginning of Year	20,925,683.56			20,925,683.56

13. Fixed Assets

1. Overview

(1) Classification

Items	Balance at End of Period	Balance at Beginning of Year
Fixed Assets	1,070,634,397.11	1,120,758,409.49
Disposal of Fixed Assets
In total	1,070,634,397.11	1,120,758,409.49

2. Fixed Assets

(1) Fixed Assets Situation

Items	Buildings	Machinery Equipment	Transportation Equipment	Electronic Equipment	Office Equipment	Others	Total
One. Original Book Value
1. Balance at Beginning of Year	1,119,870,541.94	788,852,320.80	21,026,928.92	12,402,490.91	7,137,610.08	1,641,296.49	1,950,931,189.14
2. Increased Amounts in the Current Period	29,810.84	2,332,577.59	579,414.45	77,912.59	101,234.56	-	3,120,950.03
(1) Purchase	0.00	2,263,741.91	579,414.45	77,912.59	101,234.56	0.00	3,022,303.51
(2) Roll-in of Project under Construction	29,810.84	40,030.88	0.00	0.00	0.00	0.00	69,841.72
(3) Roll-in of inventory	0.00	28,804.80	0.00	0.00	0.00	0.00	28,804.80
3. Decreased Amounts in the Current Period	1,250,731.12	6,287,065.37	304,039.00	35,327.92	99,852.14	-	7,977,015.55

(1) Disposal or Scrap	1,250,731.12	6,287,065.37	304,039.00	35,327.92	99,852.14	-	7,977,015.55
4. Balance at End of Period	1,118,649,621.66	784,897,833.02	21,302,304.37	12,445,075.58	7,138,992.50	1,641,296.49	1,946,075,123.62
Two. Accumulated Impairment
1. Balance at Beginning of Year	378,851,324.94	414,055,308.60	13,724,476.80	8,323,942.98	5,502,808.17	592,046.43	821,049,907.92
2. Increased Amounts in the Current Period	19,918,733.11	27,742,670.92	768,843.06	658,679.11	268,954.83	30,243.25	49,388,124.28
(1) Accrual	19,918,733.11	27,742,670.92	768,843.06	658,679.11	268,954.83	30,243.25	49,388,124.28
3. Decreased Amounts in the Current Period	636,122.76	3,063,838.46	288,837.05	33,561.50	95,009.54	-	4,117,369.31
(1) Disposal or Scrap	636,122.76	3,063,838.46	288,837.05	33,561.50	95,009.54	-	4,117,369.31
4. Balance at End of Period	398,133,935.29	438,734,141.06	14,204,482.81	8,949,060.59	5,676,753.46	622,289.68	866,320,662.89
Three. Impairment Reserves
1. Balance at Beginning of Year	9,047,959.13	74,912.60	0.00	0.00	0.00	0.00	9,122,871.73
2. Increased Amounts in the Current Period	0.00	0.00	0.00	0.00	0.00	0.00	0.00
(1) Accrual	0.00	0.00	0.00	0.00	0.00	0.00	0.00
3. Decreased Amounts in the Current Period	0.00	2,808.11	0.00	0.00	0.00	0.00	2,808.11
(1) Disposal or Scrap	0.00	2,808.11	0.00	0.00	0.00	0.00	2,808.11
4. Balance at End of Period	9,047,959.13	72,104.49	0.00	0.00	0.00	0.00	9,120,063.62
Four. Book Value
1. Book Value at End of Period	711,467,727.24	346,091,587.47	7,097,821.56	3,496,014.99	1,462,239.04	1,019,006.81	1,070,634,397.11
2. Book Value at Beginning of Year	731,971,257.87	374,722,099.60	7,302,452.12	4,078,547.93	1,634,801.91	1,049,250.06	1,120,758,409.49

(2) Fixed assets without property right certificate

Items	Book Value	Reasons for failure to complete certificate of title
Buildings	1,824,844.67	No title certificate for auxiliary assets

14. Project under Construction

1. Overview

(1) Classification

Items	Balance at End of Period	Balance at Beginning of Year
Project under Construction	18,103,097.95	11,220,840.10
Total	18,103,097.95	11,220,840.10

2. Project under Construction

(1) Situation of Project under Construction

Items	Balance at End of Period			Balance at Beginning of Year
	Book Balance	Impairment Reserves	Book Value	Book Balance	Impairment Reserves	Book Value
1.Walnut cake production line of No.2 plant	4,406,844.00		4,406,844.00	4,234,344.00		4,234,344.00

Items	Balance at End of Period			Balance at Beginning of Year
	Book Balance	Impairment Reserves	Book Value	Book Balance	Impairment Reserves	Book Value
2.Slope treatment project of No.3 plant	5,241,054.32		5,241,054.32	3,584,245.07		3,584,245.07
3.New production line of small fried compound potato chips in leisure No.1 Factory	1,650,338.89		1,650,338.89	44,252.17		44,252.17
4.New production line of fried potato chips	2,239,773.70		2,239,773.70	2,038,825.39		2,038,825.39
5.Feed processing project in Comprehensive Bonded Zone	1,368,571.33		1,368,571.33	113,207.54		113,207.54
6. Others	3,196,515.71		3,196,515.71	1,205,965.93		1,205,965.93
Total	18,103,097.95		18,103,097.95	11,220,840.10		11,220,840.10

(2) Change Condition of Important Engineering Projects under Construction in the Current Period

Project Name	Balance at Beginning of Year	Increased Amounts in the Current Period	Roll-in Fixed Assets Amount in the Current Period	Other Decreased Amounts in the Current Period	Balance at End of Period
Walnut cake production line of No.2 factory	4,234,344.00	172,500.00			4,406,844.00
Slope treatment project of No.3 Factory	3,584,245.07	1,656,809.25			5,241,054.32
Baked potato project of workshop 1 of NO.3 Factory	11,000.00	898,734.00			909,734.00
Konjac test line project	364,763.09	533,843.07			898,606.16
New production line of fried potato chips	2,038,825.39	240,979.19	40,030.88		2,239,773.70
Feed processing project in Comprehensive Bonded Zone	113,207.54	1,255,363.79			1,368,571.33
Total	10,346,385.09	4,758,229.30	40,030.88		15,064,583.51

15. Right-of-use asset

Items	Buildings	Transportation Equipment	Land Use Right	In total
One Original Book Value

1. Balance at Beginning of Year	4,423,305.76	202,276.99	4,970,592.00	9,596,174.75
2. Increased Amounts in the Current Period
(1) Lease
3. Decreased Amounts in the Current Period
(1) Expiration of the lease or change the lease term
4. Balance at End of Period	4,423,305.76	202,276.99	4,970,592.00	9,596,174.75
Two Accumulated Depreciation
1. Balance at Beginning of Year	1,337,882.83	99,917.64	112,968.00	1,550,768.47
2. Increased Amounts in the Current Period	697,952.29	43,591.28	56,484.00	798,027.57
(1) Accrual	697,952.29	43,591.28	56,484.00	798,027.57
3. Decreased Amounts in the Current Period
Lease expiration or change
4. Balance at End of Period	2,035,835.12	143,508.92	169,452.00	2,348,796.04
Three Impairment Reserves
1. Balance at Beginning of Year
2. Increased Amounts in the Current Period
(1) Accrual
3. Decreased Amounts in the Current Period
(1) Disposal
4. Balance at End of Period
Four Book Value
1. Book Value at End of Period	2,387,470.64	58,768.07	4,801,140.00	7,247,378.71
2. Book Value at Beginning of Year	3,085,422.93	102,359.35	4,857,624.00	8,045,406.28

16. Intangible Assets

(1) Intangible Assets Situation

Items	Software	Land Use Right	Trademark Right	Others	In total
One Original Book Value
1. Balance at Beginning of Year	4,993,743.75	316,407,869.54	154,841,200.00	662,400.00	476,905,213.29
2. Increased Amounts in the Current Period	20,000.00				20,000.00
(1) Purchase	20,000.00				20,000.00
(2)Internal R&D
(3)Increase in business consolidation

Items	Software	Land Use Right	Trademark Right	Others	In total
3. Decreased Amounts in the Current Period
(1) Disposal
4. Balance at End of Period	5,013,743.75	316,407,869.54	154,841,200.00	662,400.00	476,925,213.29
Two Accumulated Amortization
1. Balance at Beginning of Year	3,882,572.92	68,640,464.95	63,749,297.55		136,272,335.42
2. Increased Amounts in the Current Period	148,596.22	3,427,285.81	3,856,963.03		7,432,845.06
(1) Accrual	148,596.22	3,427,285.81	3,856,963.03		7,432,845.06
3. Decreased Amounts in the Current Period
(1) Disposal
4. Balance at End of Period	4,031,169.14	72,067,750.76	67,606,260.58		143,705,180.48
Three Impairment Reserves
1. Balance at Beginning of Year				662,400.00	662,400.00
2. Increased Amounts in the Current Period
(1) Accrual
3. Decreased Amounts in the Current Period
(1) Disposal
4. Balance at End of Period				662,400.00	662,400.00
Four Book Value
1. Book Value at End of Period	982,574.61	244,340,118.78	87,234,939.42		332,557,632.81
2. Book Value at Beginning of Year	1,111,170.83	247,767,404.59	91,091,902.45		339,970,477.87

17. Goodwill

Original Book Value of Goodwill

Name of Invested Unit 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	Others	Disposal	Others
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

The goodwill of the company is mainly formed by the acquisition of the equity of Zhejiang little princeFood Co., Ltd. the asset group of the goodwill is mainly composed of fixed assets, investment real estate,intangible assets and projects under construction.

18. Long-term Unamortized Expenses

Items	Balance at Beginning of Year	Increased Amounts in the Current Period	Amortized Amounts in the Current Period	Other Decreased Amounts	Balance at End of Period
Reconstruction of majuqiao plant	14,214,132.05		674,188.08		13,539,943.97
Amortization of laboratory decoration costs	1,811,130.71	328,688.12	57,664.95		2,082,153.88
Factory No.3 compartment maintenance	604,558.74		0.00		604,558.74
Housing renovation	753,996.91		52,493.13		701,503.78
Total	17,383,818.41	328,688.12	784,346.16		16,928,160.37

19. Deferred Income Tax Assets/Deferred Income Tax Liabilities

(1) Deferred Income Tax Assets Not Being Offset

Items	Balance at End of Period		Balance at Beginning of Year
	Deductible Temporary Difference	Deferred Income Tax Assets	Deductible Temporary Difference	Deferred Income Tax Assets
Asset Impairment Reserves	560,563.61	140,140.91	560,563.61	140,140.91
Lease liabilities	456,335.82	114,084.05	196,089.81	49,022.46
Deductible Loss
Credit impairment Loss	1,809,163.08	452,290.67	1,808,563.08	452,140.67
Deferred Income	11,836,808.11	2,959,202.03	12,097,654.47	3,024,413.62
Wages payable	5,677,134.00	1,419,283.50	5,677,134.00	1,419,283.50
Valuation of Financial Instruments and Derivative Financial Instruments			33,944,248.10	8,486,062.03
In total	20,340,004.62	5,085,001.16	54,284,253.07	13,571,063.19

(2) Details of Deferred Income Tax Liabilities Not Being Offset

Items	Balance at End of Period		Balance at Beginning of Year
	Taxable Temporary Difference	Deferred Income Tax Liabilities	Taxable Temporary Difference	Deferred Income Tax Liabilities
Valuation and appreciation of assets in merger of enterprises not under the same control	149,631,999.56	37,407,999.89	154,787,977.45	38,696,994.37
Valuation of Financial Instruments and Derivative Financial Instruments	93,012,186.67	23,253,046.67	26,215,702.16	6,553,925.54
Total	242,644,186.23	60,661,046.56	181,003,679.61	45,250,919.91

(3)Details of Deferred Income Tax Liabilities after Offset

Items	Offseting amount of deferred tax assets and liabilities	Carrying amount after offsetting between deferred tax assets and liabilities	offseting amount of deferred tax assets and liabilities at the end of last period	Carrying amount after offsetting between deferred tax assets and liabilitie at the end of last period
Deferred tax asset	2,822,620.34	2,262,380.82		13,571,063.19
Deferred tax liabilities	2,822,620.34	57,838,426.22		45,250,919.91

(4)Details of Deferred Income Tax Assets Not Being Confirmed

Items	Balance at End of Period	Balance at Beginning of Year
Deductible temporary differences	200,597.85	200,597.85
Deductible Loss	130,584,827.40	107,793,038.93
In total	130,785,425.25	107,993,636.78

(5)Deductible loss on deferred income tax assets not being confirmed will be due at the followingyears

Year	Balance at End of Period	Balance at Beginning of Year	Notes
2022	4,446,986.94	4,021,787.39
2023	19,123,515.53	19,123,515.53
2024	47,153,825.45	47,153,825.45
2025	25,114,592.05	25,114,592.05
2026	12,379,318.51	12,379,318.51
2027	22,366,588.92
Total	130,584,827.40	107,793,038.93

20. Other Non-current Assets

Items	Ending Balance			Beginning Balance
	Book balance	Provision for impairment	Book value	Book balance	Provision for impairment	Book value
Three-year term deposit	172,095,077.15		172,095,077.15	189,741,996.74		189,741,996.74
Total	172,095,077.15		172,095,077.15	189,741,996.74		189,741,996.74

21. Short-term Borrowings

（1）Classification of Short-term Borrowings

Items	Balance at End of Period	Balance at Beginning of Year
Guaranteed Loan	210,582,550.72	23,262,063.93
Fiduciary Loan	1,570,230,104.11	1,498,407,537.42
In total	1,780,812,654.83	1,521,669,601.35

22. Derivative financial liability

Item	Ending balance	Beginning balance
Changes in fair value of hedging instruments	10,447,490.00	70,305,871.37
Total	10,447,490.00	70,305,871.37

23. Notes Payable

Item	Ending balance	Beginning balance
Bank acceptance bill	248,855,576.61
Total	248,855,576.61

24. Accounts Payable

（1）Accounts Payable Listed

Items	Balance at End of Period	Balance at Beginning of Year
Material Funds Payable	203,348,611.77	176,725,835.45
Project Funds Payable	6,383,547.02	7,291,515.18
Equipment Funds Payable	544,099.77	1,746,573.40
Storage Payable	1,133,931.60
Lease Payable	1,055,100.00
Others	181,004.74	984,822.39
In total	212,646,294.90	186,748,746.42

25. Advance payment

（1）Advance payment Listed

Items	Balance at End of Period	Balance at Beginning of Year
Advance collection of rent	1,434,527.74	996,173.41
In total	1,434,527.74	996,173.41

26. Contract liabilities

（1） Classification of contract liabilities

Items	Balance at End of Period	Balance at Beginning of Year
Loans	919,436,607.41	520,816,995.93
Service payment
In total	919,436,607.41	520,816,995.93

27. Wages Payable

（1）List of Wages Payable

Items	Balance at Beginning of Year	Increase in the Current Period	Decrease in the Current Period	Balance at End of Period
One Short-term Compensation	40,757,672.48	132,809,847.42	160,237,545.94	13,329,973.96
Two After-service Welfare- Set up ESP liabilities	1,372,978.01	16,876,364.62	16,563,735.36	1,685,607.27
Three Dismission Welfare	0.00	519,760.00	409,760.00	110,000.00
In total	42,130,650.49	150,205,972.04	177,211,041.30	15,125,581.23

（2）List of Short-term Compensation

Items	Balance at Beginning of Year	Increase in the Current Period	Decrease in the Current Period	Balance at End of Period
1. Wage, Bonus, Allowance and Subsidy	36,829,352.40	110,393,865.16	137,745,010.19	9,478,207.37
2. Welfare Expense of Employee	20.00	2,794,433.59	2,749,775.11	44,678.48
3. Social Insurance Expense	867,037.88	9,770,450.32	9,759,389.38	878,098.82
Among them: Medical Insurance Premiums	766,979.62	8,992,717.65	8,966,512.87	793,184.40
Industrial Injury Insurance Premiums	65,373.41	591,687.14	587,607.82	69,452.73
Birth Insurance Premiums	34,684.85	161,295.81	180,518.97	15,461.69
Others	0.00	24,749.72	24,749.72	-
4. Housing Provident Funds	129,165.23	7,693,963.45	7,675,934.19	147,194.49
5. Labor Union Expense and Personnel Education Fund	2,932,096.97	2,157,134.90	2,307,437.07	2,781,794.80
In total	40,757,672.48	132,809,847.42	160,237,545.94	13,329,973.96

（3）List of Stated Drawings Plan

Items	Balance at Beginning of Year	Increase in the Current Period	Decrease in the Current Period	Balance at End of Period
1. Basic Pension Insurance	1,281,915.76	14,740,816.53	14,550,047.43	1,472,684.86
2. Unemployment Insurance Expense	44,475.16	476,118.52	353,113.58	167,480.10
3. Enterprise Annuity Charges	46,587.09	1,659,429.57	1,660,574.35	45,442.31
Total	1,372,978.01	16,876,364.62	16,563,735.36	1,685,607.27

28. Taxes and Fees Payable

Items	Balance at End of Period	Balance at Beginning of Year
Corporate Income Tax	14,257,634.30	74,174,903.15
VAT	18,766,909.84	23,320,246.23
Urban Maintenance and Construction Tax	1,380,050.48	1,876,669.91
House Property Tax	971,999.24	2,302,350.63
Land Use Tax	299,222.52	176,087.89
Individual Income Tax	249,685.24	671,107.90
Educational Surtax	545,469.85	760,843.86
Local Educational Surtax	415,789.61	559,372.28

Items	Balance at End of Period	Balance at Beginning of Year
Stamp Tax	409,166.54	500,830.44
Environmental protection tax	3,663.70	5,193.36
Water conservancy construction fee		247.04
In total	37,299,591.32	104,347,852.69

29. Other Accounts Payable

A. Overview

(1) Classification

Items	Balance at End of Period	Balance at Beginning of Year
Interest Payable	21,082,795.47	21,082,795.47
Dividends Payable	3,213,302.88	3,213,302.88
Other Accounts Payable	47,950,959.66	49,689,488.04
In total	72,247,058.01	73,985,586.39

B. Interest Payable

(1) Classification

Items	Balance at End of Period	Balance at Beginning of Year
Loan Interest between Enterprises	21,082,795.47	21,082,795.47
In total	21,082,795.47	21,082,795.47

C. Dividends Payable

(1) Classification

Items	Balance at End of Period	Balance at Beginning of Year
Common stock dividends
Others	3,213,302.88	3,213,302.88
In total	3,213,302.88	3,213,302.88

D. Other Accounts Payable

(1) List of Other Accounts Payable by Nature of Funds

Items	Balance at End of Period	Balance at Beginning of Year
Guaranteed Deposit and Deposit	19,938,831.56	25,053,238.93
Intercourse Funds between Units	12,363,930.65	9,931,464.29
Intercourse Funds of Related Parties	7,554,925.28	5,722,550.45
Personal Intercourse Funds	2,983,643.60	4,032,688.22
Various Insurances of Employee	3,402,959.14	2,768,202.89
Others	1,706,669.43	2,181,343.26
In total	47,950,959.66	49,689,488.04

30. Non-current liabilities due within one year

Item

End balance

Beginning balance

Current portion of lease liability	701,615.82	1,582,978.69
Total	701,615.82	1,582,978.69

31. Other current liability

1. Other current liability statement

Item	End balance	Beginning balance
VAT from Unearned Revenues	56,678,234.13	22,994,553.60
Fair Value Changes of Items Trapped at Hedging	100,059,642.60
Total	156,737,876.73	22,994,553.60

32. Long term borrowing

Item	End balance	Beginning balance
Credit Loan		71,000,000.00
Total		71,000,000.00

33. Lease liability

Item	End balance	Beginning balance
Lease liability	2,840,455.73	3,464,242.09
Less:Unrecognized financing expenses	124,932.64	186,560.78
Non current liabilities reclassified to maturity within one year	701,615.82	1,582,978.69
Total	2,013,907.27	1,694,702.62

34. Long term wage payable

(1)List of long-term wage payable

Items	Balance at End of Period	Balance at Beginning of Year
Net liabilities of defined benefit plan in post employment benefits
Dismission Welfare
Other Long-term Welfare	5,677,134.00	5,677,134.00
In total	5,677,134.00	5,677,134.00

35. 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	65,244,499.48		1,046,593.53	64,197,905.95
In total	65,244,499.48		1,046,593.53	64,197,905.95	--

Among them, items involving government subsidy are as follows:

Items Receiving Subsidy

Balance at Beginning of Year

Increase in the Current Period

Charge to other Profits

Other changes

Balance at End of Period

Asset related / income related

Enterprise foundation supporting in the construction stage of "Tianjin Lingang Industrial Zone Management Committee"	48,651,619.45		638,752.08		48,012,867.37	Asset related
Special subsidy for infrastructure investment	9,387,794.81				9,387,794.81	Asset related
The relocation compensation	3,847,638.14				3,847,638.14	Asset related
Tianjin Binhai New District’s Industrially Technical Renovation and Park Construction Funds as well as Expenditures for Science and Technology	1,870,370.21		111,111.12		1,759,259.09	Asset related
Key technology research and industrialization project of "moderate processing" of grain and oil	700,549.40		38,919.42		661,629.98	Asset related
Construction of provincial grain reserve information management system to form asset entry project	433,059.98		100,343.16		332,716.82	Asset related
Design of electric heating system for oil tank	223,999.76		28,000.02		195,999.74	Asset related
Special subsidies for Beijing Reserve Granary Facility Maintenance	129,467.73			129,467.73	-	Asset related
In total	65,244,499.48		917,125.80	129,467.73	64,197,905.95	--

36. 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

RestrictedConditions

1. Shares with Restricted Conditions

42,459,387.00

-1,299,500.00

-1,299,500.00

41,159,887.00

(1) State

Shareholding

(1) State Shareholding

(2) State-

owned Legal-personShareholding

(2) State-owned Legal-person Shareholding

149,500.00

-149,500.00

-149,500.00

0.00

(3) Other Domestic Capital Shareholding

42,309,887.00

-1,150,000.00

-1,150,000.00

41,159,887.00

Including:

DomesticLegal-personShareholding

Including: Domestic Legal-person Shareholding

1,150,000.00

-1,150,000.00

-1,150,000.00

0.00

DomesticNatural PersonShareholding

Domestic Natural Person Shareholding

41,159,887.00

41,159,887.00

(4) Foreign

Shareholding

(4) Foreign Shareholding

Including:

Foreign Legal-personShareholding

Including: Foreign Legal-person Shareholding

ForeignNatural PersonShareholding

Foreign Natural Person Shareholding

2. Tradable

Shares withoutRestrictedConditions

2. Tradable Shares without Restricted Conditions

684,490,864.00

1,299,500.00

1,299,500.00

685,790,364.00

(1) RMB

OrdinaryShares

(1) RMB Ordinary Shares

619,515,864.00

1,299,500.00

1,299,500.00

620,815,364.00

(2)DomesticallyListed ForeignShares

(2) Domestically Listed Foreign Shares

64,975,000.00

64,975,000.00

(3) Listed

Foreign SharesOverseas

(3) Listed Foreign Shares Overseas

(4) Others

(4) Others

In total

In total

726,950,251.00

726,950,251.00

Note: Haikou Branch of Ping An Bank Co., Ltd. held 1150000 restricted shares of the company, andBeijing Wanfa Real Estate Development Co., Ltd. held 149500 restricted shares of the company, which waslifted on February 21, 2022.

37. 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	240,714,007.21			240,714,007.21
In total	1,675,918,350.95			1,675,918,350.95

38. Other Comprehensive Incomes

Items	Amounts Occurred in the Current Period
	Balance at Beginning of Year	Amounts Occurred before Income Tax in the Current Period	Less: Other Comprehensive Incomes Charged at Earlier Stage and Current Roll-in Profit and Loss	Less: included in other comprehensive income in the previous period and transferred to retained income in the current period	Less: Income Tax Expense	Attributable to Parent Company After Tax	Attributable to Minority Shareholders After Tax	Balance at End of Period
One Other comprehensive incomes that won’t be classified into profit and loss
1. Remeasure and set the change amount of benefit plan
2. Other comprehensive income that cannot be transferred to profits and losses under the equity method
3. Changes in the fair value of other equity instrument investments
4. Changes in fair value of the enterprise's own credit risk

Two Other comprehensive incomes that will be classified into profit and loss	-682,282.22	671,532.18				671,532.18		-10,750.04
1. Other comprehensive income transferable to profit and loss under the equity method	-460,842.50							-460,842.50
2. Changes in the fair value of other debt investments
3. Amount of financial assets reclassified into other comprehensive income
4. Provision for credit impairment of other debt investment
5. Effective part of cash flow hedging
6. Converted difference between foreign currency financial statements	-221,439.72	671,532.18				671,532.18		450,092.46
Total	-682,282.22	671,532.18				671,532.18		-10,750.04

39. Surplus Reserves

Items	Balance at Beginning of Year	Increase in the Current Period	Decrease in the Current Period	Balance at End of Period
Statutory Surplus Reserves	84,487,609.05			84,487,609.05
Free Surplus Reserves	37,634,827.93			37,634,827.93
In total	122,122,436.98			122,122,436.98

40. Undistributed Profit

Items	Amounts in the Current Period	Amounts in the Prior Period
Adjustment on undistributed profit at end of last year	391,493,534.34	187,033,763.26
Adjustment on total number of undistributed profit at beginning of period (increase+ and decrease-)
Adjusted undistributed profit at beginning of period	391,493,534.34	187,033,763.26
Add: net profit attributable to parent company in the current period	72,908,330.15	88,328,197.91
Less: withdrawal legal surplus reserves
Withdrawal free surplus reserves
Withdrawal general risk reserves
Ordinary stock dividends payable
Ordinary stock dividends transferred to capital
Undistributed profit at end of period	464,401,864.49	275,361,961.17

41. 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	5,494,462,329.87	5,267,887,989.16	5,314,299,316.84	5,095,458,647.50
Other Business	18,318,940.45	6,476,103.50	13,947,518.99	4,086,340.91
In total	5,512,781,270.32	5,274,364,092.66	5,328,246,835.83	5,099,544,988.41

(2) Prime Business (Industry and Business-classified)

Name of Industry (or Business)	Amounts in the Current Period		Amounts in the Prior Period
	Revenue	Cost	Revenue	Cost
Oil and Oil Seeds	5,029,994,012.13	4,897,082,807.80	4,869,341,487.59	4,764,017,743.17
Food Processing	464,468,317.74	370,805,181.36	444,957,829.25	331,440,904.33
In total	5,494,462,329.87	5,267,887,989.16	5,314,299,316.84	5,095,458,647.50

(3)Prime Business (Region-classified)

Hainan Jingliang Holdings Co., Ltd. Semi-annual Report 2022

Name of Region	Amounts in the Current Period		Amounts in the Prior Period
	Revenue	Cost	Revenue	Cost
North China	4,554,123,662.96	4,422,630,118.98	4,914,886,135.81	4,796,869,662.51
East China	364,861,708.51	286,122,942.00	334,001,372.42	245,689,750.46
Northeast China	70,369,663.99	58,672,431.76	65,411,808.61	52,899,234.53
South East	505,107,294.41	500,462,496.42
In total	5,494,462,329.87	5,267,887,989.16	5,314,299,316.84	5,095,458,647.50

42. Tariff And Annex

Items	Amounts in the Current Period	Amounts in the Prior Period
Urban Maintenance and Construction Tax	5,547,508.14	3,913,915.24
Educational Surtax	2,383,077.24	1,707,476.99
Local Educational Surtax	1,588,718.13	1,138,317.97
House Property tax	3,000,706.17	2,381,706.84
Land Use Tax	810,831.84	494,944.34
Stamp Tax	3,643,485.85	1,688,284.40
Vehicle and Vessel Use Tax	20,909.30	13,396.03
Other Taxes and Fees	20,628.49	25,862.08
In total	17,015,865.16	11,363,903.89

43. Sales Expenses

Items	Amounts in the Current Period	Amounts in the Prior Period
Employee Compensation (including social security, etc)	29,291,508.50	31,765,392.17
Sales Promotion Expenses	4,055,810.11	14,691,957.83
Warehousing Fees	8,497,141.26	6,167,549.59
Depreciation	7,901,751.09	6,696,732.33
Material consumption, sample and product cost	1,948,756.28	2,485,399.23
Travel Expenses	2,393,868.84	3,258,440.43
Repair Costs	125,442.17	306,168.70
Handling fees	392,895.96	715,023.09
Water and Electricity Fees	630,075.86	661,247.68
Vehicle Fees	131,919.41	483,097.45
Packing Expenses	53,683.76	87,852.52
Test and Detection Fees	88,133.90	82,360.64
Business Entertainment Expenses	31,445.59	130,610.36
Others	13,645,576.59	9,145,744.50
Total	69,188,009.32	76,677,576.52

44. Administration Expenses

Hainan Jingliang Holdings Co., Ltd. Semi-annual Report 2022

Items	Amounts in the Current Period	Amounts in the Prior Period
Employee Compensation (including social security, etc)	50,434,025.42	43,851,104.43
Amortization of Assets	13,005,624.37	11,973,858.13
Impairment Costs	4,327,122.86	4,901,086.37
Fees of Employing Agent	2,920,279.69	3,847,980.48
Company Expenses	1,892,233.41	1,404,552.02
Repair Costs	1,473,228.80	817,744.13
Lease fee	2,080,164.07	1,891,512.26
Vehicle Fees	1,270,341.36	1,204,195.24
Information Network Fees	749,443.87	213,966.44
Business Entertainment Expenses	358,026.74	602,406.43
Environmental Protection Fees	640,492.40	452,173.78
Commercial Insurance Expenses	429,123.43	419,856.67
Workers Insurance Expenses	0.00	364,967.31
Security Protection Fees	424,416.84	371,966.61
Labor Protection Fees	190,101.64	198,526.82
Material Consumption	312,740.16	183,533.95
Travel Expenses	83,289.71	498,287.95
Other Expenses	7,150,012.92	11,601,981.52
In total	87,740,667.69	84,799,700.54

45. Research and Development Expenses

Items	Amounts in the Current Period	Amounts in the Prior Period
R&D Expenses	4,876,642.24	5,170,755.15
In total	4,876,642.24	5,170,755.15

46. Financial Expenses

Items	Amounts in the Current Period	Amounts in the Prior Period
Interest Expenses	16,391,856.85	19,854,113.81
Less: Interest Income	6,825,161.06	5,408,203.94
Exchange Profit and Loss	-196,022.86	25,480.77
Service Charges	3,198,614.15	1,149,403.55
In total	12,569,287.08	15,620,794.19

47. Other Profits

Items	Amounts in the Current Period	Amounts in the Prior Period
Government Subsidy Related to Daily Corporate Activities	6,346,260.64	5,839,070.44

Hainan Jingliang Holdings Co., Ltd. Semi-annual Report 2022

Return of Service Charges of Withholding Individual Income Tax	92,739.41	586,991.10
In total	6,439,000.05	6,426,061.54

48. Investment Income

Items	Amounts in the Current Period	Amounts in the Prior Period
Long-term equity investment income accounted with equity method	11,762,199.64	25,976,509.34
Investment income of financial assets measured at fair value with changes included in current profit and loss during the holding period
Investment income from disposal of wealth management products	47,446.09	607,342.87
Investment income of disposing trading financial asssets	267,083.33	4,663,045.87
Investment income obtained during the holding of transactional financial assets	128,861.80
Others
In total	12,205,590.86	31,246,898.08

49. Profits on Changes in Fair Value

Source of generating income with changes in fair value	Amounts in the Current Period	Amounts in the Prior Period
Financial assets that are measured as per fair value and for which the changes are included in the current profit and loss	49,424,487.23	61,697,730.47
Including: income with changes in fair value generated by derivative financial instruments	49,424,487.23	61,697,730.47
Trading financial liabilities
Investment real estate measured by fair value
In total	49,424,487.23	61,697,730.47

50. Credit impairment loss

Items	Amounts in the Current Period	Amounts in the Prior Period
Accounts receivable bad debt loss	-600.00
Other receivables bad debt loss
Total	-600.00

51. Assets Disposal Income

Items	Amounts in the Current Period	Amounts in the Prior Period
Gains or losses on disposal of fixed assets	441,741.39	-58,126.00
Gains or losses on disposal of Intangible Assets		-559.83
In total	441,741.39	-58,685.83

52. Non-operating Income

(1)Classification

Hainan Jingliang Holdings Co., Ltd. Semi-annual Report 2022

Items	Amounts in the Current Period	Amounts in the Prior Period	Amounts Charged to Non-recurring Profit and Loss
Total non current assets retirement gains:	40,746.10	63,990.38	40,746.10
Including: fixed assets scrap profit	40,746.10	63,990.38	40,746.10
profit from scrap of intangible assets
Government Subsidy	4,502.00		4,502.00
Relocation Compensation	354,192.63	49,231.02	354,192.63
Penalty income	36,613.84	1,040,420.14	36,613.84
Other Gains	39,160.87	125,472.26	39,160.87
In total	475,215.44	1,279,113.80	475,215.44

53. Non-operating Expenses

Items	Amounts in the Current Period	Amounts in the Prior Period	Amounts Charged to Non-recurring Profit and Loss
Total non current assets retirement loss:	16,790.13	174,235.08	16,790.13
Including: fixed assets scrap loss	16,790.13	174,235.08	16,790.13
intangible assets scrap loss
External donation	86,722.08		86,722.08
Inventory loss		24,500.00
Demolition loss		51,705.77
Penalty expenditure	69,109.99	11,410.09	69,109.99
Compensatory payment	27,834.85		27,834.85
Others	157,870.48	844.38	157,870.48
Total	358,327.53	262,695.32	358,327.53

54. Income Tax Expenses

(1) List of Income Tax Expenses

Amounts in the Current Period	Amounts in the Prior Period	Amounts in the Current Period
Income Tax Expenses of the Current Period	6,105,743.64	30,647,755.00
Deferred Income Tax Expenses	24,355,678.28	6,310,979.14
Total	30,461,421.92	36,958,734.14

(2) Accounting Profit and Income Tax Expense Adjustment Process

Items	Amounts in the Current Period	Amounts in the Prior Period
Total Profits	115,653,813.61	135,397,539.87
Income tax expenses calculated by statutory/applicable tax rate	28,913,453.40	33,849,384.97
Effect of subsidiary corporations being applicable to different tax rates	-465,871.81	-205,910.89

Hainan Jingliang Holdings Co., Ltd. Semi-annual Report 2022

Adjustment on effect of income tax in the prior period	1,348,133.02	69,840.82
Effect of Non-taxable Incomes	-2,866,400.51	-5,206,628.35
Effect of Non-deductible cost, expense and loss	17,385.49	11,964.14
Effect of deductible loss on usage of unconfirmed deferred income tax assets in the prior period
Effect of deductible temporary difference or deductible loss on unconfirmed deferred income tax in the current period	3,795,413.88	8,487,990.35
Effect of deductions
Others	-280,691.55	-47,906.90
Income Tax Expenses	30,461,421.92	36,958,734.14

55. Other comprehensive income items and their income tax impact and transferred to profit and lossSee details of ‘Appendix Six Notes on Items in Consolidated Financial Statements, 38 Other ComprehensiveIncomes’

56. Notes to items related cash flow statement

(1) Receiving other cash related to operation activities

Items	Amounts in the Current Period	Amounts in the Prior Period
Intercourse Funds of Related Parties	6,708,697.32	21,322,392.80
Intercourse Funds of Other Units	77,884,840.10	68,948,398.19
Non-operating Income and other income	2,151,049.48	461,551.34
Interest Income	5,306,053.12	4,224,691.03
Future Margins	1,092,728,826.43	1,194,590,311.77
Others	4,800,305.29	7,011,863.15
Total	1,189,579,771.74	1,296,559,208.28

(2) Other Cash Payment Related to Operation Activities

Items	Amounts in the Current Period	Amounts in the Prior Period
Intercourse Funds of Related Parties	2,011,580.36	1,581,282.06
Intercourse Funds of Other Units	1,581,633,115.17	1,036,471,337.77
Payment for Administration Expenses	31,495,939.51	12,020,073.04
Payment for Operating Expenses	11,211,289.78	17,754,375.04
Non-operating Expenses	358,327.53	108,141.65
Petty Cash Paid	147,809.79	478,289.75
Bank Charges	3,173,814.38	1,125,306.40
Others	2,740,301.36	9,848,614.49
In total	1,632,772,177.88	1,079,387,420.20

57. Supplementary Materials of Cash Flows Statement

(1) Supplementary Materials of Cash Flows Statement

Hainan Jingliang Holdings Co., Ltd. Semi-annual Report 2022

Supplementary Materials	Amounts in the Current Period	Amounts in the Prior Period
1. Adjusting net accounting profit to operating cash flow
Net Profit	85,192,391.69	98,438,805.73
Add: Assets Impairment Reserves
Credit impairment loss	600.00
Fixed Assets Depreciation, Oil-and-gas Assets Depreciation and Productive Biological Assets Depreciation	46,068,782.54	52,265,152.07
Amortization of Intangible Assets	7,432,845.06	7,436,713.40
Amortization of Long-term Deferred Expenses	784,346.16	451,034.11
Losses on Disposal of Fixed Assets, Intangible Assets and Other Long-term Assets (Fill in profit with symbol “－”)	-441,741.39	58,685.83
Losses on Retirement of Fixed Assets (Fill in profit with symbol “－”)	16,790.13	-174,235.08
Losses on Changes in Fair Value (Fill in profit with symbol “－”)	-49,424,487.23	-61,697,730.47
Financial Expenses (Fill in profit with symbol “－”)	12,569,287.08	19,879,594.58
Investment Losses (Fill in profit with symbol “－”)	-12,205,590.86	-31,246,898.08
Decrease in Deferred Income Tax Assets (Fill in increase with symbol “－”)	11,308,682.37	-11,734,401.87
Increase in Deferred Income Tax Reliabilities (Fill in decrease with symbol “－”)	12,587,506.31	16,853,619.06
Decrease in Inventory (Fill in increase with symbol “－”)	-717,414,422.37	-374,437,109.01
Decrease in Items of Operating Receivables (Fill in increase with symbol “－”)	-64,104,630.81	206,404,522.78
Increase in Items of Operating Receivables (Fill in decrease with symbol “－”)	493,019,231.89	355,352,692.40
Others
Net Cash Flows from Operating Activities	-174,610,409.43	277,850,445.45
2. Major investment and financing activities that do not involve cash payments
Conversion of Debt into Capital
Convertible Bonds Due Within One Year
Fixed Assets under Financing Lease
3. Net change conditions in cash and cash equivalents
Cash balance at end of period	810,888,971.64	778,877,443.37
Less: cash balance at beginning of period	506,928,810.69	334,389,017.41
Add: balance of the cash equivalents at end of period
Less: balance of the cash equivalents at beginning of period
Cash and cash equivalent net increase quota	303,960,160.95	444,488,425.96

(2) Composition of cash and cash equivalents

Items	Balance at End of Period	Balance at Beginning of Period
One Cash	810,888,971.64	506,928,810.69
Including: cash in stock	37,656.19	15,012.17
Bank deposit available for payment at any time	625,470,476.48	465,650,779.09
Other currency funds available for payment at any time	185,380,838.97	41,263,019.43
Deposits with central bank available for payment
Interbank deposit

Hainan Jingliang Holdings Co., Ltd. Semi-annual Report 2022

Items	Balance at End of Period	Balance at Beginning of Period
Interbank placements
Two Cash Equivalents
Including: bond investment maturing within three months
Three Balance of Cash and Cash Equivalents at End of Period	810,888,971.64	506,928,810.69
Including: restricted cash and cash equivalents used by parent company or intra-group affiliates

58. Assets with restricted ownership or right to use

Items	Book Value at End of Period	Reasons being Restricted
Monetary Fund	47,236.26	Long term suspended account
Investment Real Estate	5,710,257.95	Litigation Freeze
Fixed Assets	5,615,303.70	Litigation Freeze
In total	11,372,797.91	——

At the end of the period, there was 47236.26 yuan of frozen funds in the long-standing account, which wascancelled on July 1

st, 2022 and unfrozen.

59. Monetary Items of Foreign Currency

(1) Monetary Items of Foreign Currency

Items	Balance of Foreign Currency at End of Period	Exchange Rate Convert	Balance of Converting to RMB at End of Period
Monetary fund	4,029,048.18	6.7114	27,040,553.98
Including: US Dollars	4,029,048.18	6.7114	27,040,553.98
Accounts receivable	79,359,769.17	6.7114	532,615,154.83
Including: US Dollars	79,359,769.17	6.7114	532,615,154.83
Notes receivable	37,079,532.83	6.7114	248,855,576.61
Including: US Dollars	37,079,532.83	6.7114	248,855,576.61
Other Payable	576,543.96	6.7114	3,869,417.13
Including: US Dollars	576,543.96	6.7114	3,869,417.13
Other Receivable	2,493,145.99	6.7114	16,732,500.00
Including: US Dollars	2,493,145.99	6.7114	16,732,500.00

(2) Instruction of Operational Entity Overseas

The registrant and operating unit of the Company is Beijing Grain (Singapore) International Trade Co., Ltd.with main business place of Singapore and recording currency of US Dollars.

60. Hedging items and related hedging instruments

Please refer to the related content on 3.Derievative financial asset and 22. Derivative financial liability underSection VI of the Notes.

61. Government Subsidies

Hainan Jingliang Holdings Co., Ltd. Semi-annual Report 2022

（1）Basic conditions of government grants

Type	Amount	Presentation item	Amount recorded in profit and loss
VAT refunds	3,881,079.77	Other income	3,881,079.77
Supporting enterprise foundation in the construction stage of "Tianjin Lingang Industrial Zone Management Committee"	63,130,000.00	Deferred income	638,752.08
Special subsidy for infrastructure investment	18,176,788.00	Deferred income
Research and technology demonstration of green and clean production equipment and process of edible oil	4,500,000.00	Deferred income
Relocation compensation	7,695,276.34	Deferred income
Subsidies for replacing training with work	146,100.00	Other income	146,100.00
Tianjin Binhai New Area Industrial Technology Transformation and park construction funds and science and technology expenditure	4,000,000.00	Deferred income	111,111.12
The construction of provincial grain reserve information management system forms an asset entry project	633,746.30	Deferred income	229,810.89
Job stabilization subsidy	270,734.42	Other income	270,734.42
Subsidy for operation of disabled persons' home	187,180.00	Other income	187,180.00
Post subsidy for the disabled	70,040.65	Other income	70,040.65
Allocation for oil tank electric heating system	855,179.48	Deferred income	28,000.02
Key technology research and industrialization project of "moderate processing" of grain and oil	1,089,743.60	Deferred income	38,919.42
Training subsidies	87,000.00	Other income	87,000.00
Emergency Revolving grain subsidy	15,000.00	Other income	15,000.00
Tianjin Port Free Trade Zone Finance Bureau intelligent manufacturing municipal special fund	100,000.00	Other income	100,000.00
Tianjin Port Free Trade Zone Development and Reform Bureau Tianjin special fund for energy conservation	522,000.00	Other income	522,000.00
Subsidies for water balance projects	150,000.00	Other income	150,000.00
Others	4,502.00	Non-operating income	4,502.00
In total	105,514,370.56		6,480,230.37

VII. Change in Consolidation ScopeDuring the reporting period, the company added Jingliang (Beijing) Food Marketing Management Co., Ltd.,with 100% of the company's shares, which was included in the consolidated statements.

VIII. Equities in Other Entities

1. Equities in Subsidiaries

(1) Composition of the Company

Name of Subsidiary	Principle Place of Business	Registered Place	Nature of Business	Shareholding Ratio (%)		Voting rights ratio (%)	Mode of Acquisition
				Direct	Indirect

Hainan Jingliang Holdings Co., Ltd. Semi-annual Report 2022

Beijing Jingliang Food Co., Ltd.	Beijing	Beijing	Investment management	100		100	Merger under the same control
Jingliang (Tianjin) Grain and Oil Industry Co., Ltd.	Tianjin	Tianjin	Agricultural Product and By Product Processing		70	70	Merger under the same control
Beijing Jingliang Oil and Fat Co., Ltd.	Beijing	Beijing	Grain and oil trade		100.00	100.00	Merger under the same control
Jingliang (Hebei) Oil Industry Co., Ltd.	Hebei	Hebei	Agricultural Product and By Product Processing		51.00	51.00	Merger under the same control
Beijing Guchuan Edible Oil Co., Ltd.	Beijing	Beijing	Grain and oil trade		100.00	100.00	Merger under the same control
Beijing Eisen-Lubao Oil Co., Ltd.	Beijing	Beijing	Agricultural Product and By Product Processing		100.00	100.00	Merger under the same control
Beijing Tianweikang Oil Distribution Center Co., Ltd.	Beijing	Beijing	Warehousing		100.00	100.00	Merger under the same control
Beijing Guchuan Bread Food Co., Ltd.	Beijing	Beijing	Food Processing		100.00	100.00	Merger under the same control
Zhejiang Xiao Wang Zi Food Co., Ltd.	Hangzhou	Hangzhou	Food Processing	17.6794	77.2072	94.8866	Combination not under same control
Hangzhou Lin'an Xiaotianshi Food Co., Ltd.	Hangzhou	Hangzhou	Food Processing	17.6794	77.2072	94.8866	Combination not under same control
Liaoning Xiao Wang Zi Food Co., Ltd.	Liaoning	Liaoning	Food Processing	17.6794	77.2072	94.8866	Combination not under same control
Linqing Xiao Wang Zi Food Co., Ltd.	Linqing	Linqing	Food Processing	17.6794	77.2072	94.8866	Combination not under same control
Lin'an Chunmanyuan Agricultural Development Co., Ltd.	Hangzhou	Hangzhou	Food Processing	17.6794	77.2072	94.8866	Combination not under same control
Jingliang (Singapore) International Trade Co., Ltd.	Singapore	Singapore	Grain trade		100.00	100.00	Establishment by investment
Jingliang Rural Complex Construction and Operations (Xinyi) Co., Ltd.	Xinyi	Xinyi	Land remediation	51.00		51.00	Establishment by investment

Hainan Jingliang Holdings Co., Ltd. Semi-annual Report 2022

Jingliang (Caofeidian) Agricultural Development Co., Ltd.	Tangshan	Tangshan	Plantation	51.00		51.00	Establishment by investment
Beijing jingliang gubi oil and grease co. LTD	Beijing	Beijing	Grain and oil trade		100	100	Establishment by investment
Jingliang (Yueyang) Grain and Oil Industry Co., Ltd.	Hunan	Hunan	Agricultural products	65.00		65.00	Establishment by investment
Jingliang (Beijing) Food Marketing Management Co., Ltd	Beijing	Beijing	Food Processing	100		100	Establishment by investment

(2) Major non-wholly-owned subsidiaries

Name of Subsidiary	Shareholding Ratio of Minority Shareholders (%)	Voting rights ratio of Minority Shareholders (%)	Profit And Loss Attributable to Minority Shareholders for the Current Period	Dividends Distributed to Minority Shareholders for the Current Period	Balance of Minority Shareholder's Equity at the End of the Period
Zhejiang Xiao Wang Zi Food Co., Ltd.	5.1134	5.1134	1,861,987.97		52,045,860.83
Jingliang (Tianjin) Grain and Oil Industry Co., Ltd.	30	30	9,748,547.33		279,085,991.98

(3) Important financial information on major non-wholly-owned subsidiaries

Items	Ending balance or Amount incurred in the current period
	Zhejiang Xiao Wang Zi Food Co., Ltd.	Jingliang (Tianjin) Grain and Oil Industry Co., Ltd.
Current Assets	565,884,751.11	2,199,407,377.24
Non-current Assets	464,558,996.04	746,222,353.87
Total Assets	1,030,443,747.15	2,945,629,731.11
Current Liabilities	109,500,103.80	1,958,808,082.68
Non-current Liabilities	18,912,566.95	65,624,908.51
Total Liabilities	128,412,670.75	2,024,432,991.19
Operating Income	416,698,873.70	2,947,104,694.61
Net Profit (Loss)	37,568,959.39	32,495,157.75
Total Comprehensive Income	37,568,959.39	32,495,157.75
Cash Flow from Operating Activities	13,058,616.32	-213,367,607.66

Hainan Jingliang Holdings Co., Ltd. Semi-annual Report 2022

(Continued)

Items	Beginning balance or Amount incurred in the prior period
	Zhejiang Xiao Wang Zi Food Co., Ltd.	Jingliang (Tianjin) Grain and Oil Industry Co., Ltd.
Current Assets	545,563,045.64	1,393,747,379.61
Non-current Assets	496,391,615.83	782,065,202.69
Total Assets	1,041,954,661.47	2,175,812,582.30
Current Liabilities	158,579,977.51	1,235,715,663.77
Non-current Liabilities	18,912,566.95	51,395,336.36
Total Liabilities	177,492,544.46	1,287,111,000.13
Operating Income	400,535,661.71	2,066,464,701.05
Net Profit (Loss)	42,774,753.04	25,929,844.42
Total Comprehensive Income	42,774,753.04	25,929,844.42
Cash Flow from Operating Activities	21,727,662.43	424,430,320.67

2. Equity in Joint Ventures or Affiliates

1. Important Joint Ventures or Affiliates

Name of Joint Venture or Affiliate	Principle Place of Business	Registered Place	Nature of Business	Shareholding Ratio (%)		Accounting Treatment Methods for Investment in Joint Ventures or Affiliates
				Direct	Indirect
One Joint Ventures
1. Beijing Zhengda Feed Co., Ltd.	Beijing	Beijing	Manufacturer		50.00	Equity method
Two Affiliates
1. SINOGRAIN (Tianjin) Warehousing Logistics Co., Ltd.	Tianjin	Tianjin	Transportation and warehousing		30.00	Equity method

2. Important financial information on major joint ventures

Item	Ending Balance/Current Amount	Beginning Balance/Last Term Amount
	Beijing Zhengda Feed Co., Ltd.	Beijing Zhengda Feed Co., Ltd.
Current assets	291,989,950.25	259,094,822.42
Including: cash and cash equivalents	41,459,305.70	30,509,860.94
Non-current assets	22,818,385.41	24,949,630.10
Total assets	314,808,335.66	284,044,452.52
Current liabilities	74,131,852.21	59,463,197.04
Non-current liabilities	4,020,732.57	5,112,214.50
Total liabilities	78,152,584.78	64,575,411.54
Minority shareholder's equity

Hainan Jingliang Holdings Co., Ltd. Semi-annual Report 2022

Item	Ending Balance/Current Amount	Beginning Balance/Last Term Amount
	Beijing Zhengda Feed Co., Ltd.	Beijing Zhengda Feed Co., Ltd.
Shareholders' equity attributable to the parent company	236,655,750.88	219,469,040.98
Share of net assets based on shareholding ratio	118,327,875.44	109,734,520.49
Adjustments
-- Goodwill
-- Unrealized profits from internal transactions
-- Other	2,281,896.15
Book value of equity investment in joint ventures	120,609,771.59	109,734,520.49
Fair value of equity investment in joint ventures with open offers
Operating income	152,840,560.07	185,991,526.96
Financial costs	-3,176,445.74	-2,549,556.75
Income tax expense	5,728,902.62	6,749,196.01
Net profit	17,186,709.90	20,298,087.13
Net profit from discontinued operations
Other comprehensive income	0.00	0.00
Total comprehensive income	17,186,709.90	20,298,087.13

3. Important financial information on major affiliates

Item	Ending Balance/Current Amount	Beginning Balance/Last Term Amount
	SINOGRAIN (Tianjin) Warehousing Logistics Co., Ltd.	SINOGRAIN (Tianjin) Warehousing Logistics Co., Ltd.
Current assets	69,416,144.10	104,812,139.17
Non-current assets	660,859,459.30	555,196,631.04
Total assets	730,275,603.40	660,008,770.21
Current liabilities	62,694,174.90	32,099,278.71
Non-current liabilities	279,690,730.44	250,581,609.08
Total liabilities	342,384,905.34	282,680,887.79
Minority shareholder's equity
Shareholders' equity attributable to the parent company	387,890,698.06	377,327,882.42
Share of net assets based on shareholding ratio	116,367,209.42	113,198,364.73
Adjustments
-- Goodwill
-- Unrealized profits from internal transactions
-- Others	-1,303,601.84
Book value of equity investment in affiliates	115,063,607.58	113,198,364.73

Hainan Jingliang Holdings Co., Ltd. Semi-annual Report 2022

Item	Ending Balance/Current Amount	Beginning Balance/Last Term Amount
	SINOGRAIN (Tianjin) Warehousing Logistics Co., Ltd.	SINOGRAIN (Tianjin) Warehousing Logistics Co., Ltd.
Fair value of equity investment in affiliates with open offers
Operating income	23,237,902.69	28,434,555.09
Net profit	10,562,815.64	4,116,892.01
Net profit from discontinued operations
Other comprehensive income
Total comprehensive income	10,562,815.64	4,116,892.01
Dividends received from affiliates in the current period	0.00	24,680,000.00

IX. Risks Related to Financial InstrumentsThe Company's principal financial instruments include equity investment, creditors' investment, borrowing,accounts receivable, accounts payable, etc. The primary purpose 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

th, 2022

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	810,936,207.90			810,936,207.90
Transactional financial assets		20,000,000.00		20,000,000.00
Derivative financial assets		170,724,737.45		170,724,737.45
Notes receivables				0.00
Accounts receivables	95,789,166.57			95,789,166.57
Other receivables	134,897,411.13			134,897,411.13
Investment in other equity instruments			20,000,000.00	20,000,000.00
Current portion of non-current assets	145,318,533.34			145,318,533.34
Other current assets	499,999,000.00	30,857,817.86		530,856,817.86
Other non-current assets	172,095,077.15			172,095,077.15

B. December 31, 2021

Hainan Jingliang Holdings Co., Ltd. Semi-annual Report 2022

Financial asset items	Financial assets measured at amortized cost	Financial assets measured at fair value and the changes recorded in current profits and losses	Financial assets measured at fair value and the changes recorded in other comprehensive income	Total
Monetary funds	507,144,668.45			507,144,668.45
Transactional financial assets		40,377,048.08		40,377,048.08
Derivative financial assets
Notes receivables
Accounts receivables	82,694,094.62			82,694,094.62
Other receivables	284,756,636.27			284,756,636.27
Investment in other equity instruments			20,000,000.00	20,000,000.00
Current portion of non-current assets	156,139,100.00			156,139,100.00
Other current assets	742,800,000.00	62,577,325.41		805,377,325.41
Other non-current assets	189,741,996.74			189,741,996.74

(2) Book value of various financial liabilities on the balance sheet date

A. June 30

th, 2022

Financial liability items	Financial liabilities measured at fair value and changes included in current profits and losses	Other financial liability	Total
Short term loans		1,780,812,654.83	1,780,812,654.83
Derivative financial liability	10,447,490.00		10,447,490.00
Notes Payable		248,855,576.61	248,855,576.61
Accounts Payable		212,646,294.90	212,646,294.90
Other Payables		72,247,058.01	72,247,058.01
Other Current Liability		100,059,642.60	100,059,642.60

B. December 31, 2021

Financial liability items	Financial liabilities measured at fair value and changes included in current profits and losses	Other financial liability	Total
Short term loans		1,521,669,601.35	1,521,669,601.35
Derivative financial liability	70,305,871.37		70,305,871.37
Accounts payable		186,748,746.42	186,748,746.42
Other Payables		73,985,586.39	73,985,586.39

2. Credit Risk

On June 30

th

, 2022, 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 risk

Hainan Jingliang Holdings Co., Ltd. Semi-annual Report 2022

exposure 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 with high credit rating, so the credit risk of liquidityfunds 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 30th, 2022
	Within One Year	1 To 5 Years	Above Five Years	Total
Short term loans	1,780,812,654.83			1,780,812,654.83
Derivative financial liability	10,447,490.00			10,447,490.00
Accounts payable	210,979,576.75	1,666,718.15		212,646,294.90
Other Payable	72,247,058.01			72,247,058.01
Notes Payable	248,855,576.61			248,855,576.61
Other Current Liability	100,059,642.60			100,059,642.60

(Continued)

Item	December 31, 2021
	Within One Year	1 To 5 Years	Above Five Years	Total
Short term loans	1,521,669,601.35			1,521,669,601.35
Derivative financial liability	70,305,871.37			70,305,871.37
Accounts payable	185,082,028.27	1,666,718.15		186,748,746.42
Other Payables	73,985,586.39			73,985,586.39

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.

(1) 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 bringthe 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 30th, 2022, the Company's interest-bearing liabilities under floating rate contracts denominated in

Hainan Jingliang Holdings Co., Ltd. Semi-annual Report 2022

RMB amounted to RMB 850,000,000.00 and those under fixed rate contracts denominated in RMB amounted toRMB 398,197,500.00.

(2) Exchange Rate Risk

The risk of foreign exchange changes faced by the company is mainly related to the company's operatingactivities (when the income and expenditure are settled in a foreign currency different from the recording currencyof the company) and its net investment in overseas subsidiaries. The company's exposure to foreign exchange riskis mainly related to US dollars. Except that some subsidiaries of the company purchase and sell in US dollars, othermajor business activities of the company are priced and settled in RMB. As of June 30, 2022, the assets and liabilitiesof the company are all RMB balances, except that the assets or liabilities described in the following table are USDbalances. The foreign exchange risk arising from the assets and liabilities of such foreign currency balance mayhave an impact on the operating performance of the company.

Items	Ending Balance	Beginning Balance
Monetary funds	27,040,553.98	23,046,783.19
Short term borrowings	532,615,154.83	802,427,368.52
Accounts Payable		595,286.36
Other Payable	3,869,417.13
Notes payable	248,855,576.61
Other Receivables	16,732,500.00

Note: the company pays close attention to the impact of exchange rate changes on the company.

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. Since any risk variable rarely changes inisolation, and the correlation between variables will have a significant effect on the final impact amount of a riskvariable change, the following contents are carried out on the assumption that the change of each variable isindependent.

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 currentprofit and loss and equity is as follows:

Item	Current period
	[US dollar] Exchange rate Increase /(decrease)	Gross profit/net profit increase /(decrease)	Increase/(decrease) in shareholders' equity
The yuan depreciated against the US dollar	5%	-37,078,354.73	-37,078,354.73
The yuan appreciated against the US dollar	-5%	37,078,354.73	37,078,354.73

Item	Prior period
	[US dollar] Exchange rate Increase / (decrease)	Gross profit/net profit increase /(decrease)	Increase/(decrease) in shareholders' equity
The yuan depreciated against the US dollar	5%	579,852.37	579,852.37
The yuan appreciated against the US dollar	-5%	-578,852.37	-578,852.37

X. Disclosure of Fair Values

Hainan Jingliang Holdings Co., Ltd. Semi-annual Report 2022

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	190,724,737.45			190,724,737.45
1. Financial assets that are measured at fair value and whose changes are included in the current profits and losses	190,724,737.45			190,724,737.45
(1) Investment in debt instruments	20,000,000.00			20,000,000.00
(2) Investment in equity instruments
(3) Derivative financial assets	170,724,737.45			170,724,737.45
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	190,724,737.45		20,000,000.00	210,724,737.45
Ⅵ.Transactional financial liabilities	10,447,490.00			10,447,490.00
1. Financial liabilities measured at fair value with changes included in current profits and losses	10,447,490.00			10,447,490.00
Including: transactional bonds issued
derivative financial liability	10,447,490.00			10,447,490.00
others
2. Financial liabilities designated as fair value through profit or loss
Total liabilities continuously measured at fair value	10,447,490.00			10,447,490.00

2. Basis for determining market prices of continuous and non-continuous first level fair valuemeasurement itemsThe 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 isthe ”three noes“ 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.

XI. Related Parties and Related-Party Transactions

1. Identification criteria of related parties

If one party controls, jointly controls or exerts significant influence on the other party, and two or more partiesare controlled, jointly controlled or significantly influenced by the same party, they constitute related parties.

Hainan Jingliang Holdings Co., Ltd. Semi-annual Report 2022

2. Parent Company of the Company

Name of Parent Company	Company type	Registered Place	Legal representative	Nature of Business	Registered Capital (ten thousand Yuan)
Beijing Grain Group Co. Ltd.	Wholly state-owned enterprise	Beijing	Zhang Lijun	Investment Management	90,000.00

(Continued)

Proportion of Shares Held by Parent Company in the Company (%)	Proportion of Voting Power Held by Parent Company in the Company (%)	The ultimate controlling party of the Company	Organization code
39.68	39.68	Beijing State-owned Capital Operation and Management Center	683551038

3. Subsidiaries of the Company

See 1. Equity in Subsidiaries under Section VIII of the Notes for details.

4. Joint Ventures and Affiliates of the Company

See 2. Equity in Joint Ventures or Affiliates under Section VIII of the Notes for details.

5. Other Related Parties

Name of Other Related Party	Relationship with the Company
Beijing Ai Lai FA Xi Food Co., Ltd	Controlled by the ultimate controlling party
Beijing baijiayi Food Co., Ltd	Controlled by the ultimate controlling party
Beijing Bainian Liyuan Ecological Agriculture Co., Ltd	Controlled by the ultimate controlling party
Beijing North Jingtang foreign wine sales Co., Ltd	Controlled by the ultimate controlling party
Beijing Beishui Food Industry Co., Ltd	Controlled by the ultimate controlling party
Kangtai culture branch of Beijing ershang Group Co., Ltd	Controlled by the ultimate controlling party
Beijing ershang Jinghua Tea Co., Ltd	Controlled by the ultimate controlling party
Beijing ershang Jinghua Tea Co., Ltd	Controlled by the ultimate controlling party
Beijing ershang Jingshen seafood Co., Ltd	Controlled by the ultimate controlling party
Beijing ershang Mochi Zhonghong Food Co., Ltd	Controlled by the ultimate controlling party
Beijing ershang Meat Food Group Co., Ltd	Controlled by the ultimate controlling party
Beijing ershang Xijie Food Co., Ltd	Controlled by the ultimate controlling party
Beijing ershang Yihe Sunshine Property Management Co., Ltd	Controlled by the ultimate controlling party
Beijing ershang Yihe Sunshine Real Estate Co., Ltd	Controlled by the ultimate controlling party
Beijing Guchuan Rice Industry Co., Ltd	Controlled by the ultimate controlling party
Beijing Guchuan Food Co., Ltd	Controlled by the ultimate controlling party
Beijing heiliu animal husbandry technology Co., Ltd	Controlled by the ultimate controlling party
Food center of Beijing heiliu animal husbandry technology Co., Ltd	Controlled by the ultimate controlling party
Beijing Hongyuan Lijun grain and oil supply Co., Ltd	Controlled by the ultimate controlling party
Beijing Huadu liquor Marketing Co., Ltd	Controlled by the ultimate controlling party

Hainan Jingliang Holdings Co., Ltd. Semi-annual Report 2022

Beijing Jingliang e-commerce Co., Ltd	Controlled by the ultimate controlling party
Beijing Jingliang Dongfang grain and Oil Trading Co., Ltd	Controlled by the ultimate controlling party
Beijing Jingliang Logistics Co., Ltd	Controlled by the ultimate controlling party
Beijing Jingliang canal grain and Oil Trading Co., Ltd	Controlled by the ultimate controlling party
Beijing junzhiyuan grain and oil purchase and sales Co., Ltd	Controlled by the ultimate controlling party
Beijing Lanfeng Vegetable Distribution Co., Ltd	Controlled by the ultimate controlling party
Beijing Grain Group Co., Ltd	Controlled by the ultimate controlling party
Beijing Liubiju Food Co., Ltd	Controlled by the ultimate controlling party
Huairou brewery of Beijing Liubiju Food Co., Ltd	Controlled by the ultimate controlling party
Beijing Longmen vinegar Co., Ltd	Controlled by the ultimate controlling party
Beijing Longsheng Zhongwang breakfast Co., Ltd	Controlled by the ultimate controlling party
Beijing celon International Cultural Development Co., Ltd	Controlled by the ultimate controlling party
Beijing Sanyuan Meiyuan Food Co., Ltd	Controlled by the ultimate controlling party
Beijing Sanyuan Food Co., Ltd	Controlled by the ultimate controlling party
Feed branch of Beijing Sanyuan Seed Technology Co., Ltd	Controlled by the ultimate controlling party
Beijing Beijiao farm Co., Ltd	Controlled by the ultimate controlling party
Beijing dahongmen grain storage Co., Ltd	Controlled by the ultimate controlling party
Beijing Desheng Hotel 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 Huacheng Trading Co., Ltd	Controlled by the ultimate controlling party
Beijing Liangguan grain and oil supply Co., Ltd	Controlled by the ultimate controlling party
Beijing Grain Science Research Institute Co., Ltd	Controlled by the ultimate controlling party
Beijing Longqing Xiadu military grain supply Co., Ltd	Controlled by the ultimate controlling party
Beijing Maliandao grain and oil special supply station Co., Ltd	Controlled by the ultimate controlling party
Beijing Nanyuan vegetable oil factory Co., Ltd	Controlled by the ultimate controlling party
Beijing milk Co., Ltd	Controlled by the ultimate controlling party
Beijing food supply department No. 34 supply department Co., Ltd	Controlled by the ultimate controlling party
Beijing xinderun Agricultural Tourism Development Co., Ltd	Controlled by the ultimate controlling party
Beijing Yanqing farm Co., Ltd	Controlled by the ultimate controlling party
Daxing Branch of Beijing Yunong high quality agricultural products planting Co., Ltd	Controlled by the ultimate controlling party
Huairou branch of Beijing Yunong high quality agricultural products planting Co., Ltd	Controlled by the ultimate controlling party
Beijing Changyang farm Co., Ltd	Controlled by the ultimate controlling party
Beijing zizibing grain and oil supply Co., Ltd	Controlled by the ultimate controlling party
Beijing Shoucheng Shanshui Real Estate Co., Ltd	Controlled by the ultimate controlling party
Beijing shounong Oriental Food Supply Chain Management Group Co., Ltd	Controlled by the ultimate controlling party

Hainan Jingliang Holdings Co., Ltd. Semi-annual Report 2022

Beijing shounong Development Co., Ltd	Controlled by the ultimate controlling party
Beijing shounong commercial chain 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
Beijing shounong Food Emergency Support Center Co., Ltd	Controlled by the ultimate controlling party
Beijing shounong Flavor Industry Group Co., Ltd	Controlled by the ultimate controlling party
Beijing shounong Xiangshan Conference Center Co., Ltd	Controlled by the ultimate controlling party
Beijing shounong consumption assistance and Innovation Center Co., Ltd	Controlled by the ultimate controlling party
Beijing Shuangta Green Valley Agriculture Co., Ltd	Controlled by the ultimate controlling party
Beijing sugar tobacco & Wine Group Co., Ltd	Controlled by the ultimate controlling party
Sugar business branch of Beijing sugar tobacco & Wine Group Co., Ltd	Controlled by the ultimate controlling party
Beijing Taoshan Grain Reserve Co., Ltd	Controlled by the ultimate controlling party
Beijing Wuhuan Shuntong Supply Chain Management Co., Ltd	Controlled by the ultimate controlling party
Beijing Xing Fashion Trading Co., Ltd	Controlled by the ultimate controlling party
Beijing Yanqi Yueshengzhai Halal Food Co., Ltd	Controlled by the ultimate controlling party
Beijing Zhujun grain and oil supply Co., Ltd	Controlled by the ultimate controlling party
Chengde Sanyuan Jinxing duck industry Co., Ltd	Controlled by the ultimate controlling party
Hebei Luanping Huadu Food Co., Ltd	Controlled by the ultimate controlling party
Hebei Sanyuan Food Co., Ltd	Controlled by the ultimate controlling party
Hebei shounong Modern Agricultural Technology Co., Ltd	Controlled by the ultimate controlling party
Jingliang diandaowang (Beijing) Trading Co., Ltd	Controlled by the ultimate controlling party
Shandong Fukuan Bioengineering Co., Ltd	Controlled by the ultimate controlling party
Shanghai shounong Investment Holding Co., Ltd	Controlled by the ultimate controlling party

6. Related-party Transactions

A. Related-party transactions for purchasing and saling goods and provision and acceptance of laborservices

(1) Purchase of goods or acceptance of labor services

Related Party	Related-party Transaction	Current Amount	Last Term Amount
Beijing Bainian Liyuan Ecological Agriculture Co., Ltd	Purchase of goods	7,719.00	8,536.00
Beijing Beishui Food Industry Co., Ltd	Purchase of goods	11,990.50	12,976.00
Beijing ershang Jinghua Tea Co., Ltd	Purchase of goods	10,395.00
Beijing ershang Mochi Zhonghong Food Co., Ltd	Purchase of goods	32,992.00	345.60
Beijing ershang Meat Food Group Co., Ltd	Purchase of goods	182,656.94	303,970.00
Beijing shounong Flavor Industry Group Co., Ltd	Purchase of goods	22,074.11	11,760.00
Beijing Guchuan Rice Industry Co., Ltd	Purchase of goods	139,190.30	31,372.00
Beijing Guchuan Food Co., Ltd	Purchase of goods	6,374,564.09	7,084,342.52
Beijing heiliu animal husbandry technology Co., Ltd	Purchase of goods	15,387.50	89,111.30

Hainan Jingliang Holdings Co., Ltd. Semi-annual Report 2022

Food center of Beijing heiliu animal husbandry technology Co., Ltd	Purchase of goods	10,153.30	23,951.90
Beijing Huadu liquor Marketing Co., Ltd	Purchase of goods	13,200.00	136,320.00
Beijing Jingliang Dongfang grain and Oil Trading Co., Ltd	Purchase of goods	251,745.52	246,304.00
Beijing Liubiju Food Co., Ltd	Purchase of goods	3,304.00	15,320.00
Beijing Longmen vinegar Co., Ltd	Purchase of goods		290.00
Beijing Sanyuan Meiyuan Food Co., Ltd	Purchase of goods	66,477.60	24,883.20
Beijing Sanyuan Food Co., Ltd	Purchase of goods	100,874.00	196,816.00
Beijing Changyang farm Co., Ltd	Purchase of goods		1,470.00
Sugar business branch of Beijing sugar tobacco & Wine Group Co., Ltd	Purchase of goods	678.90	430.90
Beijing Yanqi Yueshengzhai Halal Food Co., Ltd	Purchase of goods	993,596.60	280,682.00
Shandong Fukuan Bioengineering Co., Ltd	Purchase of goods	489,983.19
Huairou branch of Beijing Yunong high quality agricultural products planting Co., Ltd	Purchase of goods	2,850.00
Beijing shounong consumption assistance and Innovation Center Co., Ltd	Purchase of goods	4,405.00
Chengde Sanyuan Jinxing duck industry Co., Ltd	Purchase of goods	900.00
Total		8,735,137.55	8,468,881.42

(2) Sale of goods/ provision of labor services

Related Party	Related-party Transaction	Current Amount	Last Term Amount
Beijing baijiayi Food Co., Ltd	Sale of goods	588,600.00	468,970.00
Beijing North Jingtang foreign wine sales Co., Ltd	Sale of goods	25,597.00	21,959.00
Beijing shounong Flavor Industry Group Co., Ltd	Sale of goods	31,138,627.74	43,848,848.09
Beijing ershang Xijie Food Co., Ltd	Sale of goods	1,701,284.40	928,990.83
Beijing ershang Jingshen seafood Co., Ltd	Sale of goods		53,592.00
Beijing ershang Yihe Sunshine Real Estate Co., Ltd	Sale of goods	49,620.00	23,880.00
Beijing Guchuan Rice Industry Co., Ltd	Sale of goods	154,817.50	631,349.72
Beijing Guchuan Food Co., Ltd	Sale of goods	1,083,679.52	5,727,639.42
Beijing Hongyuan Lijun grain and oil supply Co., Ltd	Sale of goods	221,000.00	417,500.00
Beijing Jingliang e-commerce Co., Ltd	Sale of goods		723,045.08
Beijing Jingliang Dongfang grain and Oil Trading Co., Ltd	Sale of goods	2,807,978.31	4,665,430.59
Beijing Jingliang Logistics Co., Ltd	Sale of goods	92,140.00	86,554.91
Beijing Jingliang canal grain and Oil Trading Co., Ltd	Sale of goods	38,502.00	119,432.07
Beijing junzhiyuan grain and oil purchase and sales Co., Ltd	Sale of goods		624,175.00
Beijing Lanfeng Vegetable Distribution Co., Ltd	Sale of goods	448,590.00
Huairou brewery of Beijing Liubiju Food Co., Ltd	Sale of goods	3,159,049.53	231,300.00
Beijing Longmen vinegar Co., Ltd	Sale of goods	201.83	6,600.00
Beijing Longsheng Zhongwang breakfast Co., Ltd	Sale of goods		20,633.00
Beijing celon International Cultural Development Co., Ltd	Sale of goods		275.00
Beijing Sanyuan Food Co., Ltd	Sale of goods	107,695.00	492,000.00

Hainan Jingliang Holdings Co., Ltd. Semi-annual Report 2022

Feed branch of Beijing Sanyuan Seed Technology Co., Ltd	Sale of goods	26,720,100.70	27,347,850.05
Beijing Beijiao farm Co., Ltd	Sale of goods	5,818.00	1,000.00
Beijing Desheng Hotel Co., Ltd	Sale of goods	73,930.00	32,557.03
Beijing Haidian Xijiao grain and oil supply station Co., Ltd	Sale of goods	2,820,200.00	1,799,085.28
Beijing Huacheng Trading Co., Ltd	Sale of goods		5,319.00
Beijing Liangguan grain and oil supply Co., Ltd	Sale of goods		12,500.92
Beijing Longqing Xiadu military grain supply Co., Ltd	Sale of goods	458,000.00	95,200.00
Beijing Maliandao grain and oil special supply station Co., Ltd	Sale of goods		77,000.00
Beijing milk Co., Ltd	Sale of goods		3,546.00
Beijing food supply department No. 34 supply department Co., Ltd	Sale of goods	1,007,533.90	2,497,733.27
Beijing Yanqing farm Co., Ltd	Sale of goods	14,998.35
Beijing zizibing grain and oil supply Co., Ltd	Sale of goods	1,952,000.00	971,200.00
Beijing shounong Food Group Finance Co., Ltd	Sale of goods		6,160.00
Beijing shounong Food Group Co., Ltd	Sale of goods	27,269.73	637,256.86
Beijing shounong Xiangshan Conference Center Co., Ltd	Sale of goods	7,560.00	5,328.00
Beijing shounong consumption assistance and Innovation Center Co., Ltd	Sale of goods	6,262,107.00	5,051,520.00
Beijing Shuangta Green Valley Agriculture Co., Ltd	Sale of goods		15,816.51
Beijing sugar tobacco & Wine Group Co., Ltd	Sale of goods		4,400.00
Beijing Wuhuan Shuntong Supply Chain Management Co., Ltd	Sale of goods	2,393,912.53	670,442.20
Beijing Zhujun grain and oil supply Co., Ltd	Sale of goods	1,893,933.20	960,383.95
Hebei Luanping Huadu Food Co., Ltd	Sale of goods	8,703,134.00	2,399,477.40
Hebei shounong Modern Agricultural Technology Co., Ltd	Sale of goods	10,909,242.63	10,400,433.52
Jingliang diandaowang (Beijing) Trading Co., Ltd	Sale of goods	250,655.29	7,884.00
Shanghai shounong Investment Holding Co., Ltd	Sale of goods	101,524,844.91	139,402.80
Beijing Ai Lai FA Xi Food Co., Ltd	Sale of goods	21,240.00
Beijing ershang Meat Food Group Co., Ltd	Sale of goods	23,400.00
Beijing Grain Science Research Institute Co., Ltd	Sale of goods	830.00
Beijing xinderun Agricultural Tourism Development Co., Ltd	Sale of goods	59,659.36
Daxing Branch of Beijing Yunong high quality agricultural products planting Co., Ltd	Sale of goods	59,975.70
Huairou branch of Beijing Yunong high quality agricultural products planting Co., Ltd	Sale of goods	171,074.00
Beijing Shoucheng Shanshui Real Estate Co., Ltd	Sale of goods	114,935.00
Beijing shounong Oriental Food Supply Chain Management Group Co., Ltd	Sale of goods	1,038,926.00
Beijing shounong Development Co., Ltd	Sale of goods	12,739.00
Beijing shounong commercial chain Co., Ltd	Sale of goods	29.55
Beijing Taoshan Grain Reserve Co., Ltd	Sale of goods	13,073.39
Beijing Xing Fashion Trading Co., Ltd	Sale of goods	9,357.80
Shanghai shounong Investment Holding Co., Ltd	Provision of services	671,924.51
Total		208,839,787.38	112,233,671.50

Hainan Jingliang Holdings Co., Ltd. Semi-annual Report 2022

Related-party transactions for purchasing and saling goods and provision and acceptance of labor services: Theprice of a related-party transaction shall be equal to the price charged for a unrelated-party transaction that is sameas or similar to such related-party transaction.B. Related-party lease

(1) If the Company is the lessee,

Name of Lessee	Type of Leased Asset	Pricing basis of rleasing fee	Lease Expense Recognized in the Current Period	Lease Expense Recognized in the Prior Period
Beijing Grain Group Co., Ltd.	House leasing	Market price		580,000.00
Beijing shounong Food Emergency Support Center Co., Ltd	House leasing	Market price	1,147,575.39	1,055,100.00
Beijing Nanyuan Plant Oil Factory	House leasing	Market price		340,000.00
Beijing Dahongmen Foodstuff Storage	House leasing	Market price	327,298.99	309,577.33
Beijing Shounong Development Co., Ltd.	House leasing	Market price	1,774,606.64	255,583.71
Total	--	--	3,249,481.02	2,540,261.04

(3)Related party guarantee

None.

(4)Remuneration for key management staff

Item	Current Amount (Unit: ten thousand yuan)	Last Term Amount (Unit: ten thousand yuan)
Remuneration for Key Management Staff	177.61	122.27

7. Related-party Receivables and Payables

(1) Receivables

Item	Related-party	Ending Balance		Beginning Balance
		Book Balance	Provision for Bad Debts	Book Balance	Provision for Bad Debts
Monetary funds	Beijing shounong Food Group Finance Co., Ltd	252,120,000.00		167,000,000.00
	Total	252,120,000.00		167,000,000.00
Receivables	Feed Branch of Beijing Sanyuan Seed Technology Co., Ltd.	3,571,012.53		3,000,236.98
	Beijing Shounong Consumption Assistance Innovation and Entrepreneurship Center Co., Ltd.	489,000.00		1,359,375.00
	Beijing Guchun Food Co., Ltd	66,800.00		1,260,000.00
	Shanghai Sunlon Investment HOLDINGS Ltd.	700,000.00		1,002,945.54
	Beijing Ershang Xijie Foodstuff Co., Ltd.	0.00		621,830.00
	Beijing Jingliang Dongfang grain and Oil Trading Co., Ltd	865,555.00		584,491.00

Hainan Jingliang Holdings Co., Ltd. Semi-annual Report 2022

	Hebei Shounong Modern Agricultural Technology Co., Ltd.	920,472.30		369,525.30
	Beijing Zhujun grain and oil supply Co., Ltd	398,880.00		261,500.00
	Beijing baijiayi Food Co., Ltd	144,000.00		196,800.00
	Beijing Dongfang Agricultural Group Supply Chain Management Co., Ltd.	517,020.00		161,106.00
	Beijing Guchun rice Co., Ltd	95.00		72,688.00
	Beijing Junyuan grain and oil purchasing and Marketing Co., Ltd			43,000.00
	Beijing Ershang Yihe Sunshine Real Estate Co., Ltd.	12,540.00		15,520.00
	Beijing Wuhuan Shuntong Supply Chain Management Co., Ltd	389,537.00
	Beijing food supply department No.34 supply department Co., Ltd	559,180.00
	Beijing zidibing grain and oil supply Co., Ltd	425,600.00
	Beijing Jingliang Logistics Co., Ltd	22,000.00
	Beijing Lanfeng Vegetable Distribution Co., Ltd	161,660.00
	Huairou brewery of Beijing Liubiju Food Co., Ltd	75,600.00
	Daxing Branch of Beijing Yunong high quality agricultural products planting Co., Ltd	40,055.70
	Huairou branch of Beijing Yunong high quality agricultural products planting Co., Ltd	111,330.00
	Beijing Shoucheng Shanshui Real Estate Co., Ltd	114,935.00
	Hebei Luanping Huadu Food Co., Ltd	2,421,086.40
	Jingliang diandaowang (Beijing) Trading Co., Ltd	11,748.00
	Total	12,018,106.93		8,949,017.82
Prepaid Expenses	Beijing ershang Jinghua Tea Co., Ltd	24,450.00
	Beijing shounong Development Co., Ltd	1,263,919.08
	Total	1,288,369.08		0.00

(2) Payables

Item	Related-party	Ending Balance	Beginning balance
Contract liability	Shanghai Sunlon Investment HOLDINGS Ltd.	11,871.05	3,943,587.12
	Beijing shounong commercial chain Co., Ltd	633.20
	ToTal	12,504.25	3,943,587.12

Hainan Jingliang Holdings Co., Ltd. Semi-annual Report 2022

Payables	Beijing Guchun Food Co., Ltd	187,818.33	358,762.54
	Beijing Er Shang Mo Qi Zhong Hong Foods Co., Ltd.	7,646.02	382.30
	Beijing Jingliang Dongfang grain and Oil Trading Co., Ltd		294.51
	Beijing Sanyuan Meiyuan Food Co., Ltd	2,548.67	31.19
	Beijing Sanyuan Food Co., Ltd	50,169.51
	Beijing Guchuan Rice Co., Ltd	11,345.87
	Beijing shounong Food Emergency Support Center Co., Ltd	1,055,100.00
	Total	1,314,628.40	359,470.54
Other payables	Beijing Grain Group Co., Ltd.	2,810,527.27	2,819,620.39
	Shanghai Sunlon Investment HOLDINGS Ltd.		2,591,003.45
	Beijing Nanyuan vegetable oil factory Co., Ltd	311,926.61	311,926.61
	Beijing Jingliang e-commerce Co., Ltd	93,350.40
	Hebei Sanyuan Food Co., Ltd	50,000.00
	Beijing Guchuan Food Co., Ltd	4,288,911.00
	Kangtai culture branch of Beijing ershang Group Co., Ltd	210.00
	ToTal	7,554,925.28	5,722,550.45

8. Related-party Commitments

The Company has no related-party commitments this year.XII. Share based paymentThere are no share based payments incurred this year for the company.XIII. Commitments and ContingenciesAfter this guarantee, the company and its holding subsidiaries guarantee an estimated amount of 6.021 billionyuan, of which the total amount of guarantee signed by the company and its holding subsidiaries within theguarantee period is 3.535 billion yuan, and the actual amount of guarantee by the company and its holdingsubsidiaries is 1.224 billion yuan, accounting for 40.95% of the company's latest audited net assets. These areguarantees between the company and its holding subsidiaries. The company and its holding subsidiaries do notprovide guarantees to units outside the consolidated statements, and the company does not have overdue externalguarantees, guarantees involving litigation and losses due to the judgment of losing the guarantee.XIV. 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 be

Hainan Jingliang Holdings Co., Ltd. Semi-annual Report 2022

disclosed.

XV. Other Important Matters

1. Annuity Plan

Basic information of annuity: Beijing Jingliang Food Co., Ltd., Beijing Guchuan Oil Co., Ltd., Beijing EssenLubao Oil Co., Ltd., Beijing Jingliang Oil Co., Ltd., Beijing Guchuan bread and Food Co., Ltd., Jingliang (Tianjin)grain and oil industry Co., Ltd. and Beijing tianweikang Oil Distribution Center Co., Ltd. participated in theenterprise annuity scheme of Beijing shounong Food Group Co., Ltd, To formulate the detailed rules for theimplementation of their respective enterprises under the annuity scheme. The name of the annuity plan is Ping AnJinxiu life enterprise annuity plan; Both the trustee and the account manager are ping an Endowment Insurance Co.,Ltd; The trustee is China CITIC Bank Co., Ltd.

2. Information of Divisions

(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	Other	Offset Among Dvisions	Total
Operating income	459,469,664.64	5,052,926,055.72	385,549.96	0.00	5,512,781,270.32
Operating costs	362,668,111.26	4,911,517,308.09	178,673.31	0.00	5,274,364,092.66
Operating profit	51,248,223.29	64,454,408.64	-165,706.23	0.00	115,536,925.70
Net profit attributable to parent company	39,038,580.53	33,560,383.09	-259,033.47	568,400.00	72,908,330.15
Total assets	1,076,156,547.02	5,808,478,780.14	2,935,576,771.91	-2,836,722,134.61	6,983,489,964.46
Total liabilities	135,434,803.38	3,601,600,318.19	50,721,414.84	-202,284,288.37	3,585,472,248.04

3. Lease

The lessee shall disclose the following information in relation with the lease.

Item	Amount
Interest expense	61,628.14
Short-term lease payments charged to current profit or loss	3,244,651.90

Hainan Jingliang Holdings Co., Ltd. Semi-annual Report 2022

Lease costs for low-value assets recognized in current profit or loss	72,832.49
Variable lease payments not included in the measurement of lease liabilities
Income from sublease of right-to-use assets
Total cash outflows related to leases	3,141,766.94
Gains and losses related to sale and leaseback transactions

XVI. Notes to Main Financial Statement Items of Parent Company

1. Accounts Receivable

（1）Disclosed according to aging

Aging	Ending Balance
Within 1 Year (including 1 year)
Among them: Within credit period (within 3 months)
Credit period to 1 year
1 to 2 years (including 2 years)
2 to 3 years (including 3 years)
3 to 4 years (including 4 years)
4 to 5 years (including 5 years)
More than 5 years	108,000.00
Sub-total	108,000.00
Less: Allowance for bad debts	108,000.00
Total	-

（2）Disclosed according to the method of provision for bad debt

Type(s)	Ending Balance
	Book Balance		Bad Debt Provision		Book Value
	Amount	Ratio(%)	Amount	Provision Ratio(%)
Separate provision for bad debts
Portfolio provision for bad debts	108,000.00	100.00	108,000.00	100.00	--
Among them: Portfolio 1	108,000.00	100.00	108,000.00	100.00	--
Total	108,000.00	--	108,000.00	--	--

（Continued）

Type(s)	Beginning Balance
	Book Balance		Bad Debt Provision		Book Value
	Amount	Ratio(%)	Amount	Provision Ratio(%)
Separate provision for bad debts
Portfolio provision for bad debts	108,000.00	100.00	107,400.00	99.44	600.00
Among them: Portfolio 1	108,000.00	100.00	107,400.00	99.44	600.00
Total	108,000.00	--	107,400.00	--	600.00

Hainan Jingliang Holdings Co., Ltd. Semi-annual Report 2022

Portfolio provision for bad debts:

Portfolio provision item: aging portfolio

Name	Ending Balance			Beginning Balance
	Accounts receivable	Bad Debt Provision	Provision Ratio	Accounts receivable	Bad Debt Provision	Provision Ratio
Within 1 Year (including 1 year)
Among them: Within the credit period (within 3 months)
Credit period to 1 year
1 to 2 years (including 2 years)
2 to 3 years (including 3 years)
3 to 4 years (including 4 years)
4 to 5 years (including 5 years)				3,000.00	2,400.00	80.00
More than 5 years	108,000.00	108,000.00	100.00	105,000.00	105,000.00	100.00
Total	108,000.00	108,000.00		108,000.00	107,400.00	--

(3) Details of bad debt provision

Type	Carrying amount at the beginning	Amount changes for the period				Carrying amount at the end
		Addition	Withdrawal or reversal	Write-off	Other changes
Bad debt provision	107,400.00	600.00				108,000.00
Total	107,400.00	600.00				108,000.00

(4) Accounts receivable actually written off in the current period

The parent company has no written off accounts receivable in the reporting period.

(5) Accounts Receivable of the Top 5 Balances Collected by Debtors at the End of the Period

Debtors	Book balance	Ratio of the total balance of accounts receivable(%)	Aging	Is it related	Bad debt provision
Hainan Pearl River Pipe Pile Co. LTD	108,000.00	100.00	Over 5 years	No	108,000.00
Total	108,000.00	100.00	——	——	108,000.00

2. Other Receivables

A. Overview

(1) Classification

Item	Ending Balance	Beginning Balance
Interest receivable

Hainan Jingliang Holdings Co., Ltd. Semi-annual Report 2022

Item	Ending Balance	Beginning Balance
Dividends receivable
Other receivables	179,000,000.00	180,000,000.00
Total	179,000,000.00	180,000,000.00

2. Other Receivables

(1) Disclosed according to aging

Aging	Ending Balance
Within 1 Year (including 1 year)	179,000,000.00
Among them: Within credit period (within 3 months)
Credit period to 1 year	179,000,000.00
1 to 2 years (including 2 years)
2 to 3 years (including 3 years)
3 to 4 years (including 4 years)
4 to 5 years (including 5 years)
More than 5 years	93,197.85
Sub-total	179,093,197.85
Less: Allowance for bad debts	93,197.85
Total	179,000,000.00

(2) Classification of other receivables by nature of funds

Nature of Funds	Book Balance at End of Period	Book Balance at Beginning of Year
Intercourse Funds of Units	179,000,000.00	180,000,000.00
Employee Receivables
Personal Intercourse Funds
Petty Cash	93,197.85	93,197.85
Others
Total	179,093,197.85	180,093,197.85

(3) Details about allowance for bad debt

Provision for bad debt	Stage 1	Stage 2	Stage 3	Total
	Expected credit loss in the next 12 months	Expected credit loss for the whole period (no credit impairment)	Expected credit loss for the whole period (with credit impairment)
Amount on January 1, 2022	93,197.85			93,197.85
Carrying amount on January 1, 2022 during this period:				-
——Get into Stage 2				-
——Get into Stage 3				-
——Get back to Stage 2				-
——Get back to Stage 1				-
Provision for the period				-
Reverse for the period				-

Hainan Jingliang Holdings Co., Ltd. Semi-annual Report 2022

Transfer for the period				-
Write off for the period				-
Other changes				-
Balance at June 30th, 2022	93,197.85	-	-	93,197.85

(4) Details of bad debt provision

Type	Carrying amount at the beginning	Amount changes for the period				Carrying amount at the end
		Addition	Withdrawal or reversal	Write-off	Other changes
Bad debt provision	93,197.85					93,197.85
Total	93,197.85					93,197.85

(5)Other receivables actually written off in the current period

There are no other receivables actually written off in the current period.

(6) Other receivables according to top five of balance at end of period collected by debtors

Name of Organization	Nature of Funds	Balance at End of Period	Aging	Proportion in overall ending balance of other receivables (%)	Ending balance of bad debt reserves
Beijing Jingliang Food Co., Ltd	Related party borrowing	179,000,000.00	Within 1 year	99.948
Yan Yan	Reserve fund	46,000.00	Over 5 years	0.026	46,000.00
Pai Feng	Reserve fund	26,671.80	Over 5 years	0.015	26,671.80
Zhongwei Cui	Reserve fund	14,007.40	Over 5 years	0.008	14,007.40
Xiaohong Liu	Reserve fund	5,170.00	Over 5 years	0.003	5,170.00
Total	——	179,091,849.20	——	100.00	91,849.20

3. Long-term Equity Investment

Item	Ending Balance			Beginning Balance
	Book Balance	Provision for Impairment	Book Value	Book Balance	Provision for Impairment	Book Value
Investment in subsidiaries	2,634,437,846.24		2,634,437,846.24	2,626,437,846.24		2,626,437,846.24
Total	2,634,437,846.24		2,634,437,846.24	2,626,437,846.24		2,626,437,846.24

(1)Investment in subsidiaries

Invested Entity	Beginning Balance	Current Increase	Current Decrease	Ending Balance	Current Provision for Impairment	Ending Balance of Provision for Impairment
Beijing Jingliang Food Co., Ltd.	2,336,639,964.05			2,336,639,964.05
Zhejiang little prince Food Co., Ltd	249,017,319.14			249,017,319.14
Jingliang rural complex construction and operation (Xinyi) Co., Ltd	15,280,563.05			15,280,563.05

Hainan Jingliang Holdings Co., Ltd. Semi-annual Report 2022

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	2,626,437,846.24	8,000,000.00		2,634,437,846.24

4. Operating income and operating costs

1. Details of operating income and operating costs

Item	Current Amount		Last Term Amount
	Income	Cost	Income	Cost
Core business
Other businesses	382,744.96	170,581.26	295,530.28	170,581.26
Total	382,744.96	170,581.26	295,530.28	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
Others		-28,691.03
Total		-28,691.03

XVII. Supplementary Information

1. According to the requirements of the CSRC's "Explanatory Announcement on InformationDisclosure of Companies Publicly Issuing Securities No. 1 - Non-recurring Gains and Losses", the non-recurring gains and losses during the reporting period shall be reported

1. Details of non-recurring profit and loss in the reporting period

Details of non-recurring profit and loss	Amouont	Note
(1) Gains and losses on disposal of non current assets	441,741.39
(2) Government subsidies included in the current profits and losses (closely related to the business of the enterprise, except the government subsidies enjoyed according to the national unified standard quota or quantitative)	1,479,341.13
(3) In addition to the effective hedging business related to the normal business of the company, the profit and loss from changes in fair value arising from holding trading financial assets, derivative financial assets, trading financial liabilities and derivative financial liabilities, as well as the investment income from the disposal of trading financial assets, derivative financial assets, trading financial liabilities, derivative financial liabilities and other debt investments	418,083.33
(4) Other non-operating income and expenses other than the above	116,887.91
(5) Other profit and loss items that meet the definition of non recurring profit and loss
Total non recurring profit and loss	2,456,053.76
Less: amount affected by income tax	615,013.94
Non recurring profit and loss after deducting the influence of income tax	1,841,039.82

Hainan Jingliang Holdings Co., Ltd. Semi-annual Report 2022

Details of non-recurring profit and loss	Amouont	Note
Including: non recurring profit and loss attributable to the owner of the parent company	1,642,590.68
Non recurring profit and loss attributable to minority shareholders	198,449.14

2. Return on equity and earnings per share

Current Profit	Weighted Return on Average Equity (ROAE) (%)	EPS
		Basic EPS	Diluted EPS
Net profit attributable to the Company's common shareholders	2.47	0.10	0.10
Net profit attributable to common shareholders after deduction of non-recurring gains and losses	2.41	0.10	0.10

Hainan Jingliang Holdings Co., Ltd.

25 August 2022