HAINAN JINGLIANGHOLDINGS CO., LTD.SEMI-ANNUAL REPORT
2023
August, 2023
HAINAN JINGLIANG HOLDINGS CO., LTD.
SEMI-ANNUAL REPORT 2023
Part I Important NotesIn order for a full understanding of operating results, financial condition and future development plans ofHainan Jingliang Holdings Co., Ltd. (together with its consolidated subsidiaries, the “Company”, exceptwhere the context otherwise requires), the company makes a full text of semi-annual report 2023. Investorsshould carefully read the aforesaid full text, which has been disclosed together with this Summary on themedia designated by the China Securities Regulatory Commission (the “CSRC”).All the Company’s Directors have attended the Board meeting for the review of this Report and itssummary.This semi-annual report 2023 has been prepared in both Chinese and English. Should there be anydiscrepancies or misunderstandings between 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. | 010-51672270 | 010-51672029 |
| E-mail address | guanying@bjjlkg.cn | gaodeqiu@bjjlkg.cn |
2. Key Financial Information
Indicate by tick mark whether there is any retrospectively restated datum in the table below.
□ Yes ? No
| H1 2023 | H1 2022 | Change (%) | |
| Operating revenue (RMB) | 4,823,234,208.18 | 5,512,781,270.32 | -12.51% |
| Net profit attributable to the listed company’s shareholders (RMB) | 73,581,795.36 | 72,908,330.15 | 0.92% |
| Net profit attributable to the listed company’s shareholders before exceptional gains and losses (RMB) | 58,095,675.61 | 71,265,739.47 | -18.48% |
| Net cash generated from/used in operating activities (RMB) | -137,349,545.79 | -174,610,409.43 | 21.34% |
| Basic earnings per share (RMB/share) | 0.10 | 0.10 | 0.00% |
| Diluted earnings per share (RMB/share) | 0.10 | 0.10 | 0.00% |
| Weighted average return on equity (%) | 2.37% | 2.47% | -0.10% |
| 30 June 2023 | 31 December 2022 | Change (%) | |
| Total assets (RMB) | 6,940,517,445.79 | 6,105,144,167.96 | 13.68% |
| Equity attributable to the listed company’s shareholders (RMB) | 3,135,973,882.04 | 3,061,661,435.05 | 2.43% |
3. Shareholders and Their Shares at Period-End
Unit: share
| Number of ordinary shareholders | 61,502 | 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 | 6.61% | 48,032,160 | 0 | ||
| WANG YUECHENG | Domestic natural person | 5.66% | 41,159,887 | 30,869,915 | ||
| LISHERYNZHANMING | Foreign natural person | 0.40% | 2,892,800 | 0 | ||
| MEI JIANYING | Domestic natural person | 0.36% | 2,604,203 | 0 | ||
| WANG ZHIQIANG | Domestic natural person | 0.34% | 2,507,123 | 0 | ||
| CHEN TIANHUA | Domestic natural person | 0.29% | 2,101,100 | 0 | ||
| ZHANG XIAOXIA | Domestic natural person | 0.27% | 1,949,250 | 0 | ||
| WANG XIAOXING | Domestic natural person | 0.23% | 1,654,200 | 0 | ||
| LI YONGCHENG | Domestic natural person | 0.23% | 1,653,700 | 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 Beijing State-Owned Capital Operation and Management Company reduced its Shareholding by 478,300 share due to its participation in the securities lending business of Transferring and Financing.; Shareholder Chen Tianhua holds 2,093,500 shares in the Company through his account of collateral securities for margin trading in Founder Securities Co., Ltd.; Shareholder Wang Xiaoxing holds1,654,200 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 Them
□ Applicable ? Not applicable
No 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
During the reporting period, our company entered into the “Joint venture Agreement of Jingliang HainanYangpu Grain and oil processing, storage and Logistics project” with Guotou Yangpu Port Co., Ltd andChina Stored Grain Oil Co.,Ltd.,. The three parties jointly funded the establishment of the joint venturecompany, which is for implementation of the Jingliang Hainan Yangpu oil and grease processing project.For details, please refer to the “Announcement of Hainan Jingliang Holdings Co., Ltd on the investment
and Establishment of a Joint Venture Company to launch Jingliang Hainan Yangpu Oil and GreaseProcessing Project” (No. 2023 – 029) disclosed by the company On June 15, 2023.Par IV Financial ReportIndependent auditor’s modified opinion:
□ Applicable ? Not applicable
2023 Semi-Annual Financial Report is not audited by Independent auditor.The unit of financial statements in the financial notes is: YuanEditor: Hainan Jingliang Holdings Co., Ltd
1、Consolidated Balance sheet
06-June-2023
Monetary Unit: RMB Yuan
| Items | 30-June-2023 | 1-Jan-2023 |
| Current Assets： | ||
| Monetary Capital | 1,251,666,904.81 | 561,013,109.76 |
| Settlement reserves | ||
| Loans to banks and other financial institutions | ||
| Transactional financial assets | 16,175,691.49 | 11,005,983.98 |
| Derivative financial assets | 153,000.00 | 201,549.12 |
| Notes receivable | 154,945.01 | |
| Accounts receivable | 94,785,430.75 | 77,057,446.86 |
| Receivable Financing | ||
| Pre payments | 551,576,045.68 | 194,495,648.06 |
| Premium receivable | ||
| Receivables from reinsurance | ||
| Reserve for reinsurance receivables | ||
| Other receivables | 438,557,843.89 | 444,523,698.48 |
| Including :Interest receivable | ||
| Dividends receivable | ||
| Buy-back financial Assets |
| Inventory | 2,188,231,545.06 | 2,073,944,683.57 |
| Contract Assets | ||
| Held-for-sale assets | ||
| Within one year Non-Current Assets | 106,546,505.27 | 148,387,894.16 |
| Other current Assets | 363,863,811.42 | 632,929,899.75 |
| Total Current Assets | 5,011,711,723.38 | 4,143,559,913.74 |
| Non-Current Assets： | ||
| Loans and advances | ||
| Debt Investment | ||
| Other Debt Investment | ||
| Long-term receivables | ||
| Long-term equity investment | 250,566,213.84 | 243,553,916.98 |
| Other Instruments investment | 20,000,000.00 | 20,000,000.00 |
| Other Non-current financial assets | ||
| Investment property | 21,326,173.23 | 19,805,276.24 |
| fixed assets | 1,013,694,886.73 | 1,047,451,810.24 |
| Construction in progress | 38,472,961.91 | 22,695,003.52 |
| Productive biological assets | ||
| Oil and gas assets | ||
| Right-of-use assets | 6,241,335.91 | 6,968,426.20 |
| Intangible assets | 322,745,230.58 | 325,044,884.34 |
| Development expenditure | ||
| Goodwill | 191,394,422.51 | 191,394,422.51 |
| Long-term deferred expenses | 17,214,163.21 | 16,935,967.92 |
| Deferred income tax assets | 13,255,247.15 | 14,189,763.93 |
| Other Non-Current Assets | 33,895,087.34 | 53,544,782.34 |
| Total Non-Current Assets | 1,928,805,722.41 | 1,961,584,254.22 |
| Total Assets | 6,940,517,445.79 | 6,105,144,167.96 |
| Current liabilities： | ||
| Short-term borrowings | 1,642,308,166.66 | 1,260,543,148.81 |
| borrowings from central bank | ||
| Loans from bank and other financial institutions | ||
| Transactional financial liabilities | ||
| Derivative financial liabilities | 84,108,320.00 | 111,373,155.00 |
| Notes payable | 3,331,333.80 |
| Accounts payable | 128,731,589.03 | 110,911,877.21 |
| Account collected in advance | 1,371,674.51 | 922,982.41 |
| Contract liabilities | 589,737,348.35 | 285,555,581.80 |
| financial assets sold under repurchase agreements | ||
| Deposits from customers and interbank deposit | ||
| Funds from securities trading brokerage business | ||
| Funds from securities under writing business | ||
| Employee reroll payable | 15,002,267.33 | 43,928,760.76 |
| tax payable | 19,922,589.93 | 66,629,054.18 |
| Other payables | 113,457,778.24 | 83,999,685.56 |
| Including: Interest payable | 21,082,795.47 | 21,082,795.47 |
| dividend payable | 3,213,302.88 | 3,213,302.88 |
| Payable Fee and commission | ||
| Payable Reinsurance accounts | ||
| Held-for-sale liabilities | ||
| Within one year Non-current liabilities | 628,515.16 | 1,432,706.14 |
| Other current liabilities | 56,434,136.00 | 56,184,255.30 |
| Total current liabilities | 2,651,702,385.21 | 2,024,812,540.97 |
| Non-current liabilities： | ||
| Insurance Contract reserves | ||
| Long-term borrowings | 600,000,000.00 | 500,284,166.67 |
| Bonds payable | ||
| Including: preferred stock | ||
| Perpetual capital bonds | ||
| Lease liabilities | 757,257.80 | 704,390.98 |
| Long-term payables | ||
| Long-term Employee reroll payable | 5,677,134.00 | 5,677,134.00 |
| Estimated liabilities | ||
| Deferred revenue | 63,508,701.11 | 64,550,917.36 |
| Deferred income tax liabilities | 70,654,986.68 | 46,405,170.70 |
| Other Non-current liabilities | ||
| Total Non-current liabilities | 740,598,079.59 | 617,621,779.71 |
| Total Liabilities | 3,392,300,464.80 | 2,642,434,320.68 |
| Owner’s equity | ||
| Capital stock | 726,950,251.00 | 726,950,251.00 |
| Other equity instrument | ||
| Including: preferred stock | ||
| Perpetual capital bonds | ||
| Capital reserves | 1,678,678,350.95 | 1,678,678,350.95 |
| Less ：Treasury stock | ||
| Other comprehensive revenue | 1,736,372.13 | 1,005,720.50 |
| special reserves | ||
| Surplus reserves | 122,122,436.98 | 122,122,436.98 |
| general risk reserves | ||
| Undistributed profit | 606,486,470.98 | 532,904,675.62 |
| Total equity attributable to the parent company | 3,135,973,882.04 | 3,061,661,435.05 |
| Minority equity | 412,243,098.95 | 401,048,412.23 |
| Total owner’s equity | 3,548,216,980.99 | 3,462,709,847.28 |
| Total Liabilities and Total owner’s equity | 6,940,517,445.79 | 6,105,144,167.96 |
Authorized representative：Wang Chunli Person in charge of accounting：Guan YingHead of accounting organization ：Cao Ling
2、Statement of Financial positions
Monetary Unit: RMB Yuan
| Items | 30-June-2023 | 1-Jan-2023 |
| Current Assets： | ||
| Monetary Capital | 17,205,549.53 | 15,852,894.21 |
| Transactional financial assets | ||
| Derivative financial assets | ||
| Notes receivable | ||
| Accounts receivable | ||
| Receivable Financing | ||
| Pre payments | ||
| Other receivables | 360,000,115.58 | 349,000,000.00 |
| Including: Interest receivable | ||
| Dividends receivable | 150,000,000.00 |
| Inventory | ||
| Contract Assets | ||
| Held-for-sale assets | ||
| Within one year Non-Current Assets | ||
| Other current Assets | 465,029.16 | 1,168,502.66 |
| Total Current Assets | 377,670,694.27 | 366,021,396.87 |
| Non-Current Assets： | ||
| Debt Investment | ||
| Other Debt Investment | ||
| Long-term receivables | ||
| Long-term equity investment | 2,619,157,283.19 | 2,619,157,283.19 |
| Other Instruments investment | 20,000,000.00 | 20,000,000.00 |
| Other Non-current financial assets | ||
| Investment property | 5,369,095.43 | 5,539,676.69 |
| fixed assets | 5,811,842.52 | 5,575,316.44 |
| Construction in progress | ||
| Productive biological assets | ||
| Oil and gas assets | ||
| Right-of-use assets | ||
| Intangible assets | ||
| Development expenditure | ||
| Goodwill | ||
| Long-term deferred expenses | ||
| Deferred income tax assets | ||
| Other Non-Current Assets | ||
| Total Non-Current Assets | 2,650,338,221.14 | 2,650,272,276.32 |
| Total assets | 3,028,008,915.41 | 3,016,293,673.19 |
| current liabilities： | ||
| Short-term borrowings | ||
| Transactional financial liabilities | ||
| Derivative financial liabilities | ||
| Notes payable | ||
| Accounts payable | ||
| Account collected in advance | 38,896.41 | 38,896.41 |
| Contract liabilities |
| Employee reroll payable | 176,246.38 | 191,137.22 |
| Payable tax fee | 1,032,337.89 | 1,548,097.77 |
| Other payables | 33,295,174.14 | 34,559,303.45 |
| Including: Interest payable | 21,082,795.47 | 21,082,795.47 |
| Dividend payable | 3,213,302.88 | 3,213,302.88 |
| Held-for-sale liabilities | ||
| Within one year Non-current liabilities | ||
| Other current liabilities | ||
| Total current liabilities | 34,542,654.82 | 36,337,434.85 |
| Non-current liabilities： | ||
| Long-term borrowings | ||
| Bonds payable | ||
| Including: preferred stock | ||
| Perpetual capital bonds | ||
| Lease liabilities | ||
| Long-term payables | ||
| Long-term Employee reroll payable | ||
| Estimated liabilities | ||
| Deferred revenue | ||
| Deferred income tax liabilities | ||
| Other Non-current liabilities | ||
| Total Non-current liabilities | ||
| Total liabilities | 34,542,654.82 | 36,337,434.85 |
| Owner’s equity | ||
| Capital stock | 726,950,251.00 | 726,950,251.00 |
| Other equity instrument | ||
| Including: preferred stock | ||
| Perpetual capital bonds | ||
| Capital reserves | 2,382,994,900.84 | 2,382,994,900.84 |
| Less ：Treasury stock | ||
| Other comprehensive revenue | ||
| Special reserves | ||
| Surplus reserves | 109,487,064.39 | 109,487,064.39 |
| Undistributed profit | -225,965,955.64 | -239,475,977.89 |
| Total owner’s equity Total | 2,993,466,260.59 | 2,979,956,238.34 |
| Total Liabilities and Total owner’s equity | 3,028,008,915.41 | 3,016,293,673.19 |
Authorized representative：Wang Chunli Person in charge of accounting：Guan YingHead of accounting organization ：Cao Ling
3、Consolidated Income Statement
Monetary Unit: RMB Yuan
| Items | Semi-annual of 2023 | Semi-annual of 2022 |
| 一、Total operating income | 4,823,234,208.18 | 5,512,781,270.32 |
| Including: operating income | 4,823,234,208.18 | 5,512,781,270.32 |
| Interest income | ||
| Premiums earned | ||
| Fee and commission income | ||
| 二、Total operating cost | 4,841,383,397.31 | 5,465,754,564.15 |
| Including: operating cost | 4,630,970,469.14 | 5,274,364,092.66 |
| Interest expenditure | ||
| Fee and commission expenditure | ||
| Surrenders | ||
| Net claims paid | ||
| Net appropriation for insurances contracts reserves | ||
| Policy holders dividends expenditure | ||
| Reinsurance expenses | ||
| Tax and super charge | 11,548,673.88 | 17,015,865.16 |
| Selling expenses | 78,437,823.61 | 69,188,009.32 |
| Administration expenses | 92,898,582.21 | 87,740,667.69 |
| Research and development expenses | 10,262,799.97 | 4,876,642.24 |
| Financial expenses | 17,265,048.50 | 12,569,287.08 |
| Including: Interest expenses | 25,265,021.07 | 16,391,856.85 |
| Interest income | 5,832,452.30 | 6,825,161.06 |
| Add：Other revenue | 6,324,214.58 | 6,439,000.05 |
| Investment revenue | 7,179,282.99 | 12,205,590.86 |
| （Losses are recorded as “－”） | ||
| Including: joint venture and cooperative enterprise Investment revenue | 7,012,296.86 | 11,762,199.64 |
| derecognition of financial assets amortized revenue | ||
| exchange revenue （Losses are recorded as“-”） | ||
| Exposure hedging revenue （Losses are recorded as “－”） | ||
| Changes in fair value revenue （Losses are recorded as “－”） | 143,869,459.30 | 49,424,487.23 |
| Credit Less impairment （Losses are recorded as“-”） | -115,984.57 | -600.00 |
| Assets Less impairment （Losses are recorded as“-”） | -25,186,589.63 | |
| Assets disposal revenue （Losses are recorded as“-”） | -2,209.46 | 441,741.39 |
| operating profit （Losses are recorded as“-”） | 113,918,984.08 | 115,536,925.70 |
| Add：Non- operating Income | 3,903,501.36 | 475,215.44 |
| Less ：Non-operating expenditure | 527,980.44 | 358,327.53 |
| Total profit（Losses are recorded as“-”） | 117,294,505.00 | 115,653,813.61 |
| Less ：income tax expenses | 32,518,022.92 | 30,461,421.92 |
| Net profit （Net loss is presented as “－”） | 84,776,482.08 | 85,192,391.69 |
| Classified by operations continuity | ||
| Continuing operation Net profit （Net loss is presented as “－”） | 84,776,482.08 | 85,192,391.69 |
| Close for business Net profit （Net loss is presented as “－”） | ||
| Classified according to ownership | ||
| Parents company Total owner’s Net profit | 73,581,795.36 | 72,908,330.15 |
| Minority Lose | 11,194,686.72 | 12,284,061.54 |
| Other comprehensive revenue after tax | 730,651.63 | 671,532.18 |
| Parents company Total owner’s Other comprehensive revenue’s tax | 730,651.63 | 671,532.18 |
| Other comprehensive revenue cannot be reclassified into the lost |
| 1.Recalculation of changes in defined benefit plans | ||
| 2.Othercomprehensive income that cannot be transferred to gains and losses under the equity method | ||
| 3.OtherInstruments investment Changes in fair value | ||
| 4.Enterprise credit risk changes in fair value | ||
| 5.Other | ||
| Other comprehensive income that will be reclassified into the profit and loss | 730,651.63 | 671,532.18 |
| 1.Other comprehensive income that can be transferred to gains and losses under the equity method | ||
| 2. Changes in fair value of other debt investments | ||
| 3.reclassification of financial assets included in other comprehensive income | ||
| 4.Provision for credit impairment of other debt investments | ||
| 5.Cash flow hedge reserve | ||
| 6.Balance arising from the translation of foreign currency | 730,651.63 | 671,532.18 |
| 7.Other | ||
| Net of tax from other comprehensive income attributable to minority share holder | ||
| Total comprehensive income | 85,507,133.71 | 85,863,923.87 |
| Total comprehensive income attribute to shareholders of the parent company | 74,312,446.99 | 73,579,862.33 |
| Total comprehensive income attribute to minority shareholder | 11,194,686.72 | 12,284,061.54 |
| 8、per share revenue ： | ||
| （1）basic per share revenue | 0.10 | 0.10 |
| （2）diluted per share revenue | 0.10 | 0.10 |
Authorized representative：Wang Chunli Person in charge of accounting：Guan YingHead of accounting organization ：Cao Ling
4、Parents company profit statement
Monetary Unit: RMB Yuan
| Items | Semi-annual of 2023 | Semi-annual of 2022 |
| 一、 operating income | 11,839,311.03 | 382,744.96 |
| Less ： operating cost | 170,581.26 | 170,581.26 |
| Tax Add | 174,413.63 | 201,808.38 |
| Selling expenses | ||
| Administration expenses | 3,410,680.07 | 2,692,234.13 |
| Research and development expenses | ||
| Financial expenses | -5,278,290.51 | -3,565,313.78 |
| Including: Interest expenses | ||
| Interest income | 5,280,177.21 | 3,566,419.69 |
| Add：Other revenue | 2,308.28 | 12,794.10 |
| Investment revenue （Losses are recorded as “－”） | 150,814.85 | |
| Including: joint venture and cooperative enterprise Investment revenue | ||
| Derecognition of financial assets amortized revenue （Losses are recorded as“-”） | ||
| Exposure hedging revenue （Losses are recorded as “－”） | ||
| Changes in fair value revenue （Losses are recorded as “－”） | ||
| Credit Less impairment （Losses are recorded as“-”） | -600.00 | |
| Assets Less impairment （Losses are recorded as“-”） | ||
| Assets disposal revenue （Losses are recorded as“-”） | ||
| 二、operating profit （Losses are recorded as“-”） | 13,515,049.71 | 895,629.07 |
| Add：Non-operating Income | ||
| Less ：Non-operating | 5,027.46 |
| expenditure | ||
| 三、profit amounts （Losses are recorded as“-”） | 13,510,022.25 | 895,629.07 |
| Less ：income tax expenses | ||
| 四、Net profit （Net loss is presented as “－”） | 13,510,022.25 | 895,629.07 |
| （一）continuing operations Net profit （Net loss is presented as “－”） | 13,510,022.25 | 895,629.07 |
| （二）discontinuing operations Net profit （Net loss is presented as “－”） | ||
| 五、Net of tax from Other comprehensive income | ||
| （一）cannot reclassified to Lose Other comprehensive revenue | ||
| 1. Other comprehensive income that cannot be reclassified into the profit and loss | ||
| 2. Other comprehensive income that cannot to be transferred to gains and losses under the equity method | ||
| 3.Other Instruments investment Changes in fair value | ||
| 4.enterprise Credit risk Changes in fair value | ||
| 5.Other | ||
| （二）Other comprehensive income that will be reclassified into the profit and loss | ||
| 1. Other comprehensive income that can be transferred to gains and losses under the equity method | ||
| 2. Changes in fair value of other debt investments | ||
| 3.reclassification of financial assets included in other comprehensive income | ||
| 4.Provision for credit impairment of other debt investments | ||
| 5.Cash flow hedge reserve | ||
| 6.Balance arising from the |
| translation of foreign currency | ||
| 7.Other | ||
| 六、comprehensive revenue amounts | 13,510,022.25 | 895,629.07 |
| 七、per share revenue ： | ||
| （一）basic per share revenue | ||
| （二）diluted per share revenue |
Authorized representative：Wang Chunli Person in charge of accounting：Guan YingHead of accounting organization ：Cao Ling
5、Consolidated cash flow statement
Monetary Unit: RMB Yuan
| Items | Semi-annual of 2023 | Semi-annual of 2022 |
| 一、cash flow from operating activities： | ||
| Cash receipts from sale of good or rendering of services | 5,564,355,172.38 | 6,436,340,283.18 |
| Net increase in customer deposits and due to banks and other financial institutions | ||
| Net increase in borrowing from central bank | ||
| Net increase in borrowing from Other financial institutions | ||
| Cash received for Insurance premium | ||
| Net cash received from reinsurance contracts | ||
| Net increase in deposits and investments from policyholders | ||
| Cash received for Interest 、Fee and commission | ||
| Net increase in borrowing from banks | ||
| Net cash increase under repurchase agreements | ||
| Net increase received from securities trading brokerage business | ||
| Tax refund receipts | 3,808,897.99 | 6,528,639.35 |
| Other cash receipts concerning operating activities | 1,023,812,040.53 | 1,189,579,771.74 |
| Subtotal of cash flows from operating activities | 6,591,976,110.90 | 7,632,448,694.27 |
| Cash paid for purchase of goods and accepting services | 5,631,656,925.26 | 5,809,507,082.18 |
| Net increase in loans and advance to customers | ||
| Net increase in deposit in the central bank and due from banks and other financial institutions | ||
| Cash paid for claims in Insurance Contract | ||
| Net increase in Loans to banks and other financial institutions | ||
| Cash paid for Interest 、Fee and commission | ||
| cash paid for dividend for Policy holders | ||
| Cash paid to and for employees | 172,318,440.15 | 171,460,162.39 |
| Taxes and fees paid | 125,238,280.62 | 193,319,681.25 |
| Other cash paid concerning operating activities | 800,112,010.66 | 1,632,772,177.88 |
| Subtotal of cash outflows from operating activities | 6,729,325,656.69 | 7,807,059,103.70 |
| Net cash flows from operating activities | -137,349,545.79 | -174,610,409.43 |
| 2. cash flows from Investment activities ： | ||
| Cash receipts from disinvestment | 586,103,235.55 | 1,153,813,406.52 |
| Cash receipts from returns on investment | 526,196.09 | |
| Net cash from disposal of fixed assets、Intangible assets and other Long-term assets | 31,605.00 | 801,506.00 |
| Net cash received by disposal of subsidiaries and other | ||
| Other cash receipts concerning Investment activities | ||
| Subtotal of cash flows from Investment activities | 586,134,840.55 | 1,155,141,108.61 |
| Cash paid for purchase and construction of fixed assets、Intangible assets and Other long-term assets | 43,140,379.93 | 15,597,520.36 |
| Cash paid by Investment | 145,000,000.00 | 890,099,000.00 |
| Net increase in the amount of collateral loans | ||
| NET amount of cash paid by subsidiaries and other operating units | ||
| Other cash related to Investment activities | ||
| Subtotal of cash outflows from Investment activities | 188,140,379.93 | 905,696,520.36 |
| Net amount of cash flows generated by an Investment activity | 397,994,460.62 | 249,444,588.25 |
| 三、The cash flow generated by the financing activity： | ||
| Absorb the cash received by the Investment | ||
| Including: The subsidiary absorbs the cash received by Minority Investment | ||
| Obtain the cash received by borrowings | 1,818,217,067.44 | 2,725,178,991.98 |
| Receive Other cash in connection with the financing activity | ||
| Subtotal cash inflows from fund-raising activities | 1,818,217,067.44 | 2,725,178,991.98 |
| Cash paid to repay a debt | 1,331,768,577.44 | 2,466,903,503.77 |
| The distribution of dividends, profit, or cash payments for Interest | 47,016,149.43 | 30,461,365.20 |
| Including: The subsidiary pays Minority's dividends, profit | ||
| Payment of Other cash in connection with the financing activity | 574,077.78 | |
| Subtotal cash outflows from fund-raising activities | 1,379,358,804.65 | 2,497,364,868.97 |
| Net amount of cash flows arising from financing activities | 438,858,262.79 | 227,814,123.01 |
| 四、The effect of exchange rate movements on cash and cash equivalents | 724,617.12 | 1,311,859.12 |
| 五、Net add for cash and cash equivalents | 700,227,794.74 | 303,960,160.95 |
| Add：Cash and cash equivalents | 551,439,110.07 | 506,928,810.69 |
| balance at the beginning of the period | ||
| 六、Cash and cash equivalents balance at the end of the period | 1,251,666,904.81 | 810,888,971.64 |
Authorized representative：Wang Chunli Person in charge of accounting：Guan YingHead of accounting organization ：Cao Ling
6、Parents company cash flow statement
Monetary Unit: RMB Yuan
| Items | Semi-annual of 2023 | Semi-annual of 2022 |
| 一、Cash flow from operating activities： | ||
| Cash received for Selling goods or services | 12,124,704.99 | |
| Tax refunds received | 395,429.81 | |
| Receive Other cash related to operating activities | 5,610,597.06 | 26,066,599.79 |
| Subtotal cash inflows from operating activities | 17,735,302.05 | 26,462,029.60 |
| Cash paid for goods and services | ||
| Cash paid to and for employees | 1,499,566.85 | 948,373.99 |
| Tax fees paid | 324,239.47 | 165,632.57 |
| Payment of Other cash in connection with operating activities | 164,251,396.82 | 11,489,917.93 |
| Subtotal cash outflows from operating activities | 166,075,203.14 | 12,603,924.49 |
| NET amount of cash flow generated by operating activities | -148,339,901.09 | 13,858,105.11 |
| 二、Cash flows from Investment activities： | ||
| Take Back the cash received by the Investment | ||
| Cash received from Investment revenue | 150,150,814.85 | |
| NET amount of cash recovered from disposal fixed assets, Intangible assets and Other Long-term assets | 800.00 | |
| NET amount of cash received by disposal and other operating units | ||
| Receive Other cash related to Investment activities |
| Subtotal of cash inflows from Investment activities | 150,151,614.85 | |
| Cash paid for fixed assets, Intangible assets and other long-term assets | 459,058.44 | |
| Cash paid by Investment | 8,000,000.00 | |
| NET amount of cash paid by subsidiaries and other operating units | ||
| Other cash related to Investment activities | ||
| Subtotal of cash outflows from Investment activities | 459,058.44 | 8,000,000.00 |
| Net amount of cash flows generated by an Investment activity | 149,692,556.41 | -8,000,000.00 |
| 三、The cash flow generated by the financing activity： | ||
| Absorb the cash received by the Investment | ||
| Obtain the cash received by borrowings | ||
| Receive Other cash in connection with the financing activity | ||
| Subtotal cash inflows from fund-raising activities | ||
| Cash paid to repay a debt | ||
| The distribution of dividends, profit, or cash payments for Interest | ||
| Payment of Other cash in connection with the financing activity | ||
| Subtotal cash outflows from fund-raising activities | ||
| Net amount of cash flows arising from financing activities | ||
| 四、The effect of exchange rate movements on cash and cash equivalents | ||
| 五、Net add for cash and cash equivalents | 1,352,655.32 | 5,858,105.11 |
| Add：Cash and cash equivalents balance at the beginning of the period | 15,852,894.21 | 1,533,187.04 |
| 六、Cash and cash equivalents balance | 17,205,549.53 | 7,391,292.15 |
at the end of the period
Authorized representative：Wang Chunli Person in charge of accounting：Guan YingHead of accounting organization ：Cao Ling
7、Consolidated Statement of changes in Equity
Current amount
Monetary Unit: RMB Yuan
| Items | Semi-annual of 2023 | ||||||||||||||
| attributed to Parents company Total owner’sequity | Minority equity | Total owner’sequity Total | |||||||||||||
| Capital stock | Other equity instrument | Capital reserves | Less ：Treasury stock | Othercomprehensive revenue | special reserves | Surplus reserves | general risk reserves | Undistributedprofit | Other | Subtotal | |||||
| preferred stock | Perpetual capital bonds | Other | |||||||||||||
| 一、Balance at the end of last year | 726,950,251.00 | 1,678,678,350.95 | 1,005,720.50 | 122,122,436.98 | 532,904,675.62 | 3,061,661,435.05 | 401,048,412.23 | 3,462,709,847.28 | |||||||
| Add: change in accounting policy | |||||||||||||||
| Pre-error correction | |||||||||||||||
| Enterprise consolidation under the same control | |||||||||||||||
| Other | |||||||||||||||
| 二、Balance at the beginning of the year | 726,950,251.00 | 1,678,678,350.95 | 1,005,720.50 | 122,122,436.98 | 532,904,675.62 | 3,061,661,435.05 | 401,048,412.23 | 3,462,709,847.28 | |||||||
| 三、In the current period, the change amount of Less shall be added (Less shall be filled in with”-” number) | 730,651.63 | 73,581,795.36 | 74,312,446.99 | 11,194,686.72 | 85,507,133.71 | ||||||||||
| （一）comprehensive revenue amounts | 730,651.63 | 73,581,795.36 | 74,312,446.99 | 11,194,686.72 | 85,507,133.71 | ||||||||||
| （二）Total owner's | |||||||||||||||
| investment and Less | |||||||||||||||
| 1．Total owner's investments in common stock | |||||||||||||||
| 2．Other equity instrument holders invest capital | |||||||||||||||
| 3．Share payments are included in the Total owner' equity amount | |||||||||||||||
| 4．Other | |||||||||||||||
| （三）Profit allocation | |||||||||||||||
| 1．Surplus reserves | |||||||||||||||
| 2．General risk reserves | |||||||||||||||
| 3．The distribution of Total owner's (or shareholders) | |||||||||||||||
| 4．Other | |||||||||||||||
| （四）Total Owner' equity internal carryover | |||||||||||||||
| 1．Capital reserves to increase Capital (or Capital stock) | |||||||||||||||
| 2．Surplus reserves turn to Capital stock | |||||||||||||||
| 3．Surplus reserves | |||||||||||||||
| 4．Set up benefit plan changes to carry forward retained revenue | |||||||||||||||
| 5．Other comprehensive revenue carryover of retained revenue | |||||||||||||||
| 6．Other | |||||||||||||||
| （五）special |
| reserves | |||||||||||||||
| 1．Withdraw during the period | |||||||||||||||
| 2.Usage during the period | |||||||||||||||
| （六）Other | |||||||||||||||
| 四、The balance at the end of the current period | 726,950,251.00 | 1,678,678,350.95 | 1,736,372.13 | 122,122,436.98 | 606,486,470.98 | 3,135,973,882.04 | 412,243,098.95 | 3,548,216,980.99 |
Authorized representative：Wang Chunli Person in charge of accounting：Guan YingHead of accounting organization ：Cao Ling
The amount of the preceding period
Monetary Unit: RMB Yuan
| Items | Semi-annual of 2022 | ||||||||||||||
| attributed to Parents company Total owner’sequity | Minority equity | Total owner’sequity Total | |||||||||||||
| Capital stock | Other equity instrument | Capital reserves | Less ：Treasury stock | Othercomprehensive revenue | special reserves | Surplus reserves | general risk reserves | Undistributedprofit | Other | Subtotal | |||||
| preferred stock | Perpetual capital bonds | Other | |||||||||||||
| 一、Balance at the end of last year | 726,950,251.00 | 1,675,918,350.95 | -682,282.22 | 122,122,436.98 | 391,493,534.34 | 2,915,802,291.05 | 396,351,501.50 | 3,312,153,792.55 | |||||||
| Add: change in accounting policy | |||||||||||||||
| Add: change in accounting policy | |||||||||||||||
| Enterprise consolidation under the same control | |||||||||||||||
| Other | |||||||||||||||
| 二、Balance at the beginning of the year | 726,950,251.00 | 1,675,918,350.95 | -682,282.22 | 122,122,436.98 | 391,493,534.34 | 2,915,802,291.05 | 396,351,501.50 | 3,312,153,792.55 | |||||||
| 三、In the current period, the change amount of Less | 671,532.18 | 72,908,330.15 | 73,579,862.33 | 12,284,061.54 | 85,863,923.87 | ||||||||||
| shall be added (Less shall be filled in with”-” number) | |||||||||||||||
| （一）comprehensive revenue amounts | 671,532.18 | 72,908,330.15 | 73,579,862.33 | 12,284,061.54 | 85,863,923.87 | ||||||||||
| （二）Total owner's investment and Less | |||||||||||||||
| 1．Total owner's investments in common stock | |||||||||||||||
| 2．Other equity instrument holders invest capital | |||||||||||||||
| 3．Share payments are included in the Total owner' sequity amount | |||||||||||||||
| 4．Other | |||||||||||||||
| （三）Profit allocation | |||||||||||||||
| 1．Surplus reserves | |||||||||||||||
| 2．General risk reserves | |||||||||||||||
| 3．The distribution of Total owner's (or shareholders) | |||||||||||||||
| 4．Other | |||||||||||||||
| （四）Total Owner' sequity internal carryover | |||||||||||||||
| 1．Capital reserves to increase Capital (or Capital stock) | |||||||||||||||
| 2．Surplus reserves turn to Capital stock | |||||||||||||||
| 3．Surplus reserves | |||||||||||||||
| 4．Set up benefit plan changes to |
| carry forward retained revenue | |||||||||||||||
| 5．Othercomprehensive revenue carryover of retained revenue | |||||||||||||||
| 6．Other | |||||||||||||||
| （五）special reserves | |||||||||||||||
| 1．This period | |||||||||||||||
| 2．Used in this period | |||||||||||||||
| （六）Other | |||||||||||||||
| 四、The balance at the end of the current period | 726,950,251.00 | 1,675,918,350.95 | -10,750.04 | 122,122,436.98 | 464,401,864.49 | 2,989,382,153.38 | 408,635,563.04 | 3,398,017,716.42 |
Authorized representative：Wang Chunli Person in charge of accounting：Guan YingHead of accounting organization ：Cao Ling
8、Parents company Total owner’s equity change statement
Amount of the current period
Monetary Unit: RMB Yuan
| Items | Semi-annual of 2023 | |||||||||||
| Capital stock | Other equity instrument | Capital reserves | Less ：Treasury stock | Othercomprehensive revenue | special reserves | Surplus reserves | Undistributedprofit | Other | Total owner’sequity Total | |||
| preferred stock | Perpetual capital bonds | Other | ||||||||||
| 一、Balance at the end of last year | 726,950,251.00 | 2,382,994,900.84 | 109,487,064.39 | -239,475,977.89 | 2,979,956,238.34 | |||||||
| Add: change in accounting policy | ||||||||||||
| Pre-error correction | ||||||||||||
| Other | ||||||||||||
| 二、Balance at the beginning of the year | 726,950,251.00 | 2,382,994,900.84 | 109,487,064.39 | -239,475,977.89 | 2,979,956,238.34 | |||||||
| 三、In the current period, the change amount of Less shall | 13,510,022.25 | 13,510,022.25 | ||||||||||
| be added (Less shall be filled in with”-” number) | ||||||||||||
| （一）comprehensive revenue amounts | 13,510,022.25 | 13,510,022.25 | ||||||||||
| （二）Total owner's investment and Less | ||||||||||||
| 1．Total owner's investments in common stock | ||||||||||||
| 2．Other equity instrument holders invest capital | ||||||||||||
| 3．Share payments are included in the Total owner' s equity amount | ||||||||||||
| 4．Other | ||||||||||||
| （三）Profit allocation | ||||||||||||
| 1．Surplus reserves | ||||||||||||
| 2．The distribution of Total owner's (or shareholders) | ||||||||||||
| 3．Other | ||||||||||||
| （四）Total owner's equity | ||||||||||||
| 1．Capital reserves to increase Capital (or Capital stock) | ||||||||||||
| 2．Surplus reserves turn to Capital stock | ||||||||||||
| 3．Surplus reserves | ||||||||||||
| 4．Set up benefit plan changes to carry forward retained revenue | ||||||||||||
| 5．Other comprehensive revenue carryover of retained revenue |
| 6．Other | ||||||||||||
| （五）special reserves | ||||||||||||
| 1．This period | ||||||||||||
| 2．Used in this period | ||||||||||||
| （六）Other | ||||||||||||
| 四、The balance at the end of the current period | 726,950,251.00 | 2,382,994,900.84 | 109,487,064.39 | -225,965,955.64 | 2,993,466,260.59 |
Authorized representative：Wang Chunli Person in charge of accounting：Guan YingHead of accounting organization ：Cao Ling
The amount of the preceding period Monetary Unit: RMB Yuan
| Items | Semi-annual of 2022 | |||||||||||
| Capital stock | Other equity instrument | Capital reserves | Less ：Treasury stock | Othercomprehensive revenue | special reserves | Surplus reserves | Undistributedprofit | Other | Total owner’sequity Total | |||
| preferred stock | Perpetual capital bonds | Other | ||||||||||
| 一、Balance at the end of last year | 726,950,251.00 | 2,380,234,900.84 | 109,487,064.39 | -408,809,468.50 | 2,807,862,747.73 | |||||||
| Add: change in accounting policy | ||||||||||||
| Pre-error correction | ||||||||||||
| Other | ||||||||||||
| 二、Balance at the beginning of the year | 726,950,251.00 | 2,380,234,900.84 | 109,487,064.39 | -408,809,468.50 | 2,807,862,747.73 | |||||||
| 三、In the current period, the change amount of Less shall be added (Less shall be filled in with”-” number) | 895,629.07 | 895,629.07 | ||||||||||
| （一）comprehensive revenue amounts | 895,629.07 | 895,629.07 | ||||||||||
| （二）Total | ||||||||||||
| owner's investment and Less | ||||||||||||
| 1．Total owner's investments in common stock | ||||||||||||
| 2．Other equity instrument holders invest capital | ||||||||||||
| 3．Share payments are included in the Total owner' sequity amount | ||||||||||||
| 4．Other | ||||||||||||
| （三）Profit allocation | ||||||||||||
| 1．Surplus reserves | ||||||||||||
| 2．The distribution of Total owner's (or shareholders) | ||||||||||||
| 3．Other | ||||||||||||
| （四）Total Owner' sequity internal carryover | ||||||||||||
| 1．Capital reserves to increase Capital (or Capital stock) | ||||||||||||
| 2．Surplus reserves turn to Capital stock | ||||||||||||
| 3．Surplus reserves | ||||||||||||
| 4．Set up benefit plan changes to carry forward retained revenue | ||||||||||||
| 5．Other comprehensive revenue carryover of retained revenue | ||||||||||||
| 6．Other | ||||||||||||
| （五）special reserves | ||||||||||||
| 1．This period |
| 2．Used in this period | ||||||||||||
| （六）Other | ||||||||||||
| 四、The balance at the end of the current period | 726,950,251.00 | 2,380,234,900.84 | 109,487,064.39 | -407,913,839.43 | 2,808,758,376.80 |
Authorized representative：Wang Chunli Person in charge of accounting：Guan YingHead of accounting organization ：Cao Ling
Hainan Jingliang Holdings Co., Ltd.Notes to the Semi-Annual of 2023 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 referred toas "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 pursuant tothe resolution of the Second Extraordinary General Meeting of Shareholders of the Company on November18, 2016 and the Approval Reply of the China Securities Regulatory Commission dated July 28, 2017 OnApproval of Hainan Pearl River Holding Co., Ltd. to Purchase Assets and Raise Supporting Funds fromBeijing Grain Group Co., Ltd. (ZJXK (2017) No.1391): 1) The Company purchased assets from the originalshareholders of Beijing Grain Food Co., Ltd. (hereinafter referred to as Beijing Grain Food) by issuing210,079,552 shares of the balance between the transaction price of the injected assets and the assets to bepurchased (the difference between the transaction price of the injected assets and the assets to be purchasedwas RMB 1,699.5436 million yuan). The par value in the issuance was RMB 1.00 per share and the issuanceprice was RMB 8.09 per share; 2) The Company has issued 48,965,408 non-public shares of the Company toBeijing Grain Group for the purpose of purchasing the supporting funds raised from the assets of theissuance 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 monetary funds. Uponcompletion of the issue, the registered capital was RMB 685,790,364.00 and the share capital was RMB685,790,364.00. Beijing Grain Group, which accounted for 42.06% of the total number of shares, becamethe largest shareholder of the Company.On November 21, 2019, with the approval of Beijing Capital Agricultural Food Group Co., Ltd.(Beijing Capital Agricultural Food publish [2019] No. 212), Approval on the Plan of Purchasing Assets byCash and Issuing Shares of Hainan Jingliang Holdings Co., Ltd, On April , 2020, with the approval ofApproval of Hainan Jingliang Holding Co., Ltd. Issuance Shares to Wang Yuecheng to Purchase Assets byChina Securities Regulatory Commission [2020] No. 610, the company shall not issue more than 41,159,887new shares in private offering to raise funds supporting the purchase of assets through the issued shares. TheCompany and its subsidiary, Beijing Jingliang Food Co., Ltd., purchased the 25.1149% equity stake ofZhejiang Little Prince 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, sales andtrading of foodstuffs, agricultural and sideline products, grease, oils, and leisure foods.
3. The name of the parent company and the ultimate parent company.The parent company of the company is Beijing Grain Group Co., Ltd., and the ultimate 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 date on August 23rd, 2023.
5. Operation Duration
From March 22
nd, 1998 to September 20
th
, 2025.
6. 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 18 subsidiaries of the Company were included in the scope of consolidation on June 30th,2023, please refer to note 7 Change of Consolidation Scope.
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 and nomaterial 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, sales and trading offoodstuff, agricultural and sideline products, grease, oil and leisure food. According to the characteristicsof actual production and operation and the provisions of relevant accounting standards for businessenterprises, the Company and its subsidiaries have formulated a number of specific accounting policies andaccounting estimates for transactions and events such as revenue recognition. For details, please refer tothe descriptions in Note Ⅲ, 26 Revenue. For descriptions of the significant accounting judgments andestimates made by the management, please refer to Note Ⅲ, 32 Significant Accounting Judgments andEstimates.
1. Statement of Compliance of Accounting Standards for Business Enterprises
The financial statements prepared by the Company based on the above preparation basis conform to therequirements of the Accounting Standards for Business Enterprises and their application guidelines,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 ReportingInformation 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 year ofthe 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 the
book 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) isinsufficient 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 the dateof 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 identifiable assets,liabilities and contingent liabilities of the Purchasee and the measurement of the consolidation cost shall bere-checked. If the consolidation cost is still smaller than the fair value share of the identifiable net assets ofthe Purchased obtained in the consolidation after the re-check, the difference shall be recorded into theprofits 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 the
economic benefits from the temporary difference deductible by the purchaser on the purchase date areexpected to be realized, the relevant deferred income tax assets shall be recognized, and the goodwill shall bereduced. If the goodwill is not sufficiently offset, the difference shall be recognized as the current profit orloss; 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 is nota "package deal", the accounting treatment shall be distinguished between the individual financial statementsand 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 taken asthe 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 purchase isremeasured according to the fair value of the equity at the date of purchase, and the difference between thefair value and the carrying value is included in the investment income of the current period; Where the equityof the Purchasee held before the date of purchase involves other comprehensive income, other consolidatedincome related thereto shall be accounted for on the same basis as the direct disposal of the relevant assets orliabilities by the Purchaser (i.e., except for the corresponding share in the change caused by the acquisition ofthe net liability or net asset of the defined benefit plan remeasured in accordance with the equity method, therest is converted into the investment income of the current period to which the acquisition date belongs).
5. Preparation Method of Consolidated Financial Statement
(1) Principles for determining the scope of the consolidated financial statement
The scope of consolidation of the consolidated financial statements is determined on a 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 isacquired; Cease to be included in the scope of the merger as of the date of loss of effective control. For thesubsidiaries disposed of, the operating results and cash flows prior to the date of disposal have beenappropriately included in the consolidated income statement and consolidated cash flow statement; Forsubsidiaries disposed of in the current period, the opening amount of the consolidated balance sheet is notadjusted. The operating results and cash flows of subsidiaries increased by consolidation after purchase havebeen properly included in the consolidated income statement and consolidated cash flow statement, and theopening and comparative amounts in the consolidated financial statements have not been adjusted forsubsidiaries that are not under the same control. The operating results and cash flows of the subsidiariesincreased by consolidation under the same control from the beginning of the consolidation period to theconsolidation date have been appropriately included in the consolidated profit statement and consolidatedcash flow statement, and the comparative amount of the consolidated financial statements has been adjustedat the same 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 investment orother 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 performed onthe same basis as the direct disposal of the relevant assets or liabilities by the Purchased (i.e. converted tocurrent investment income, except for changes resulting from the re-measurement of the net liabilities or netassets 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 EnterprisesNo.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 it inconjunction 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 event ofloss 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 shallbe converted into the bookkeeping functional currency amount at the spot exchange rate on the trading day,but the foreign currency exchange business or transactions involving foreign currency exchange occurringin the Company shall be converted into the bookkeeping functional currency amount at the actualexchange rate.
(2) Translation method for foreign currency monetary items and foreign currency non-monetary item
On the balance sheet date, the foreign currency monetary items are converted at the spot exchange rateon the balance sheet date, and the exchange difference arising therefrom shall be: ① The exchangedifference arising from the special foreign currency borrowings related to the acquisition and construction ofassets eligible for capitalization shall be handled in accordance with the principle of capitalization ofborrowing costs; 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 in theprofits and losses of the current period.
Where the preparation of the consolidated financial statements involves overseas operations, if there areforeign 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 thespot exchange rate on the balance sheet date; Except for "undistributed profits", other items ofshareholders' equity shall be converted at the spot exchange rate at the time of occurrence. The income andexpense items in the profit statement shall be converted at the average exchange rate of the current periodon the date of transaction. The undistributed profit at the beginning of the period shall be the undistributedprofit at the end of the period converted from the previous year; The undistributed profits at the end of theyear shall be calculated and listed according to the converted profits distribution items; The differencebetween the converted asset items and the total amount of the liability items and shareholders' equity itemsshall be recognized as other comprehensive income as the translation difference in the foreign currencystatements. In case of disposal of overseas operations and loss of control, the balance in translation of theforeign currency statements related to the overseas operations as shown below in the shareholders' equityitems in the balance sheet shall be transferred to the profits and losses of the disposal period in whole or inproportion to 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 anreconciling item.
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 disposalperiod in 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 sametime form the financial liabilities or equity instruments of other entities.
(1) Classification, confirmation and measurement of financial assets
According to the business mode of managing financial assets and the contractual cash flowcharacteristics of financial assets, the Company divides financial assets into: Financial 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 riseon specified 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 othercomprehensive income, but impairment loss or gain, exchange gain or loss and interest income calculatedaccording to the effective 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 assetsmeasured at fair value with changes included in current profits and losses. In addition, during initialrecognition, in order to eliminate or significantly reduce accounting mismatch, the Company designatedpart of financial assets as financial assets measured at fair value with changes included in current profit andloss. For such financial assets, the Company adopts fair value for subsequent measurement, and thechanges in fair value are 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. Forthe financial liabilities measured at fair value with the changes included into the current profits and losses,the relevant transaction costs are directly included into the current profits and losses, and the relevanttransaction costs 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 fairvalues are included in current profits and losses.
Financial liabilities designated to be measured at fair value with changes included in current profitsand losses. Changes in the fair value of this liability caused by changes in the Company's own credit riskare included in other comprehensive income. When the liability is derecognized, the accumulated changein fair value caused by changes in its own credit risk included in other comprehensive income istransferred to retained earnings. Changes in fair value are accounted into current profits and losses. If theabove-mentioned treatment 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 lossesof the financial liabilities (including the impact amount of changes in the credit risk of the enterprise itself)into the current profits and losses.
② Other financial liabilities
Except for financial liabilities and financial guarantee contracts formed by the transfer 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 Thetermination of the contractual right to receive cash flow from the financial asset. ② The financial asset hasbeen transferred, 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 up itscontrol 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 thetransferred financial assets refers to the risk level faced by the enterprise due to the change in the value ofthe financial assets.
If the overall transfer of financial assets meets the conditions for termination of recognition, thedifference between the book value of the transferred financial assets and the sum of the considerationreceived due to the transfer and the accumulated amount of changes in fair value originally included inother comprehensive income shall be included into the current profits and losses.
If the partial transfer of financial assets meets the conditions for termination of recognition, 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 financialasset shall not be terminated. If almost all risks and rewards related to the ownership of financial assetshave not been transferred or retained, it shall continue to judge whether the enterprise retains control overthe assets and carry out accounting treatment according to the principles mentioned in the precedingparagraphs.
(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 ofthe original financial liability (or part thereof), the original financial liability shall be derecognized and anew financial 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 andfinancial liabilities, and such legal right is currently enforceable, and the Company plans to settle thefinancial assets on a net basis or realize the financial assets and settle the financial liabilities at the sametime, the financial assets and financial liabilities are listed in the balance sheet at a net amount after mutualoffset. In addition, financial assets and financial liabilities shall be listed separately in the balance sheet andshall not be offset against each other.
(6) The fair value determination method of financial assets and financial liabilities
Fair value refers to the price that market participants can receive from selling an asset or pay totransfer a liability in an orderly transaction on the measurement date. Where there is an active market forfinancial instruments, the Company adopts quotations in the active market to determine their fair values.Quoted price in active market refers to the price easily obtained from exchanges, brokers, industryassociations, pricing service agencies, etc. on a regular basis, and represents the price of markettransactions actually occurred in fair trading. If there is no active market for financial instruments, theCompany uses evaluation techniques to determine their fair values. Evaluation techniques include
reference to prices used in recent market transactions by parties familiar with the situation and willing totrade, reference to current fair values of other financial instruments that are substantially the same,discounting cash flow technique, option pricing model, etc. In valuation, the Company adopts valuationtechniques that are applicable under current circumstances and are supported by sufficient available dataand other information, selects input values that are consistent with the characteristics of assets or liabilitiesconsidered by market participants in transactions related to assets or liabilities, and gives priority to the useof relevant observable input values as much as possible. If the relevant observable input value cannot beobtained or it is not impracticable to obtain it, the non-input value shall be used.
(7) Equity instruments
Equity instruments refer to contracts that can prove ownership of the Company's residual equity inassets after deducting all liabilities. The issuance (including refinancing), repurchase, sale or cancellationof equity instruments by the Company are treated as changes in equity, and transaction costs related toequity transactions are deducted from equity. The Company does not recognize changes in the fair value ofequity instruments.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 includedin other comprehensive income, mainly including notes receivable, accounts receivable, other receivables,debt investment, other debt investment, long-term receivables, etc. In addition, for some financialguarantee contracts, impairment reserves and credit impairment losses are also accrued in accordance withthe accounting policies described in this part.
(1) Recognition method of impairment provision
On the basis of expected credit losses, the Company sets aside impairment reserves and 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 thathave been purchased or incurred credit impairment, the Company discounts them according to the actualinterest rate adjusted by credit.
The general method of measuring expected credit loss refers to the Company's assessment of whether
the credit risk of financial assets has increased significantly since the initial recognition on each balancesheet 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 theloss reserve based on the expected credit loss amount within the next 12 months or the entire durationaccording to 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 thetime of initial recognition, it indicates that the credit risk of the financial asset is significantly increased.Except for special circumstances, the Company uses the change of default risk in the next 12 months as areasonable estimate of the change of default risk in the entire duration to determine whether the credit riskhas increased significantly since the initial recognition.
Generally, if the overdue period is more than 90 days, the Company will consider that the credit riskof the financial instrument has increased significantly, unless there is conclusive evidence that the creditrisk of the financial instrument has not increased significantly since the initial recognition.
The Company will consider the following factors when evaluating whether the credit risk hasincreased significantly
1） Whether there is any significant change in the actual or expected operating results of 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 theguarantee or credit enhancement provided by the third party, which are expected to reduce the economicmotivation of the debtor's repayment according to the time limit stipulated in the contract or affect theprobability 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 sincethe 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 adversechanges in the economic situation and operating environment for a long period of time, it may notnecessarily reduce the borrower's ability to perform its contractual cash obligations, then the financialinstrument is considered to have low credit risk.
(3) Judgment criteria for financial assets with credit impairment:
When one or more events have an adverse impact on the expected future cash flow of a financial asset,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 dueto 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, suchas: Accounts receivable with related parties. Receivables in dispute with the other party or involvinglitigation or arbitration. Receivables with obvious signs that the debtor is likely to be unable to perform therepayment obligation.
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 management
center, 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, theyare divided into different portfolios:
| Item | Basis for determining portfolio |
| Bank acceptance bills | The acceptor is a bank with less credit risk |
| Commercial acceptance bill | According to the acceptor's credit risk classification, it should be the same as the "receivable" portfolio classification. |
③ Accounts receivable and other receivables
For receivables that do not contain significant financing components, the Company 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, theyare divided 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 theestimated cost till completion, estimated expenses for selling activity and related taxes and fees in dailyactivities. When determining the net realizable value of inventories, solid evidence obtained shall be thebasis, and the purpose of holding the inventories and the impact of events after the balance sheet date shallbe considered.
On the balance sheet date, inventories shall be measured at lower of cost and net realizable value.When the net realizable value is lower than the cost, the provision for inventory devaluation shall beaccrued. The provision for inventory devaluation shall be accrued based on the difference between the costof a single inventory item and its net realizable value. The provision for inventory devaluation of a largenumber of inventories with low unit prices shall be based on the type of inventory; for inventories relatedto the product range produced and sold in same region, having the same or similar end use or purpose, anddifficult to be separated from other items for measurement, their provision for inventory devaluation can becombined and accrued.
After the provision for inventory devaluation is accrued, if the factors cause the previouswritten-down inventory value have disappeared, and the situation results in the fact that the net realizablevalue of the inventories higher than the book value, the amount of the provision for inventory devaluationthat has been accrued shall be reversed and included in the current period profit or loss.
(4) The Company adopts perpetual inventory system as its inventory system.
(5) Amortization method of low-value consumables and packaging materials
Low-value consumables are amortized by one-off amortization method when they are received;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 orto-be-disposed portfolio can be sold immediately under the current conditions based on the practice ofselling such asset or to-be-disposed portfolio in similar transactions; the Company has already decided onthe sale plan and obtained confirmed purchase commitment; the sale is scheduled to be completed withinone year. Among them, a Disposal Portfolio refers to a group of assets that will be disposed of as a whole
through sale or other approaches in a transaction, and the liabilities directly associated with these assetstransferred along with the assets in transaction. If the portfolio of assets or group of portfolios of assets isallocated goodwill acquired in business merger in accordance with Accounting Standards for BusinessEnterprises No. 8 - Asset Impairment, 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 whenthe non-current asset or to-be-disposed portfolio is initially measured or measured on the balance sheetdate, the book value shall be to the net amount of fair value minus sales expenses, and the written-downamount shall be recognized as asset impairment loss and included in current period profit or loss. Theprovision for impairment loss of the held-for-sale asset shall be accrued. For a Disposal Portfolio, theconfirmed impairment loss shall deduct the book value of the goodwill in the Disposal Portfolio, thendeduct the book value of the non-current assets determined by the measurement on a pro-rata basis inaccordance with the applicable Accounting Standards for Business Enterprises No. 42 held-for-salenon-current assets, Disposal Portfolio and Termination of Operations (hereinafter referred to as the “Guidefor Held-For-Sale”). In the event of an increase of the book value of the held-for-sale Disposal Portfoliominus sales expenses on the subsequent the balance sheet date, the amount previously written down shallbe recovered and be reversed within the mount of the asset impairment loss recognized in the non-currentassets measured by the measurement “Guide for Held-For-Sale” after being classified as held for sale asset,the reversal amount shall be included in the current period profit or loss, and the book value of allnon-current assets (except for goodwill) determined by the measurement on a pro-rata basis in accordancewith the applicable “Guide for Held-For-Sale” shall be increased on a pro-rata basis. The book value of thegoodwill that has been deducted and the impairment loss of the assets recognized before the classificationof the held-for-sale non-current assets in accordance with the applicable “Guide for Held-For-Sale” shallnot 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 inheld-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 thatthe Company has control, joint control or significant influence on the invested entity. The long-term equityinvestment 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 currentprofits and losses. Among them, if it is non-transactional, the Company may choose to designate it as afinancial asset measured at fair value and its changes are included in the accounting of othercomprehensive income at the time of initial recognition. For details of its accounting policies, please referto Note Ⅲ, 9 “Financial Instruments".
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 decidedbased on the consensus of all parties sharing the control rights before making a decision. SignificantInfluence refers to power of the Company to participate in the decision-making of the financial andoperating policies of the investee, but the Company cannot control or jointly control the development ofthese policies with other parties.
(1) Determination of investment cost
For a long-term equity investment obtained from a combination of businesses under the same control,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 thelong-term equity investment. The capital reserve shall be adjusted subject to the difference between theinitial investment cost of the long-term equity investment and the cash paid, the non-cash assets transferred,and the book value of the debts assumed; if the capital reserve is insufficient for offsetting, the retainedearnings shall be adjusted. Where the equity securities are issued as merger consideration, the apportionedshare of the book value in the final controller's consolidated financial statements on the combination datein accordance 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 reserveshall be adjusted subject to the difference between the initial investment cost of the long-term equityinvestment and the total par value of the shares issued; if the capital reserve is insufficient for offsetting,the retained earnings shall be adjusted. Where the equity of combined parties under the same control isobtained through multiple transactions and a business combination under the same control is formed finally,it shall be treated differentially based on whether it is a “package deal”: if it belongs to a “package deal”,all transactions will be treated as a transaction that obtains control. If it is not a “package deal”, theapportioned share of the book value in the final controller's consolidated financial statements on thecombination date in accordance with the shareholders' equity shall be the initial investment cost of thelong-term equity investment. The capital reserve shall be adjusted subject to the difference between the
initial investment cost of the long-term equity investment and the sum of the book value of long-termequity investment before combination date and the book value of the new consideration for the new shareon the combination date. If the capital reserve is insufficient for offsetting, the retained earnings shall beadjusted. The equity investments that are held prior to the combination date and are recognized with equityrecognized or as available-for-sale financial asset as other comprehensive income will not be givenaccounting 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 combinationcost on the purchase date. The combination cost includes the assets paid by purchaser, the liabilitiesincurred or assumed, and the sum of the fair value of issued equity securities. Where the equity ofcombined parties not under the same control is obtained through multiple transactions and a businesscombination under the same control is formed finally, it shall be treated differentially based on whether itis a “package deal”: if it belongs to a “package deal”, all transactions will be treated as a transaction thatobtains control. If it is not a “package deal”, the initial investment cost of the long-term equity investmentcalculated by the cost method shall be calculated based on the sum of the book value of the equityinvestment in the original holder and the new investment cost. The original shareholding that measuredusing equity method, the relevant other comprehensive income does temporarily not conduct accountingtreatment.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 currentperiod profit 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 theacquisition of long-term equity investment: the purchase price in cash actually paid by the Company; thefair value of the equity securities issued by the Company, the value agreed in relevant investment contractor agreement; the fair value or original book value of the assets exchanged in non-monetary asset exchangetransaction; the fair value of the long-term equity investment itself. Any expenses, taxes and othernecessary expenses directly related to the acquisition of long-term equity investments shall also beincluded in the cost of investment. The cost of long-term equity investment for the additional investmentthat can exert significant influence on investee or implement joint control but does not constitute controlshall be the sum of the fair value of the originally held equity investment recognized in accordance withthe Accounting Standards for Business Enterprises No.. 22 – Recognition and Measurement of FinancialInstruments and the cost for new investment.
(2) Follow-up measurement and confirmation methods for profit and loss
The Equity Method shall be used to account for long-term equity investments that have joint 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 forlong-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 theinitial investment cost of the long-term equity investment shall not be adjusted; if the initial investmentcost is less than the fair value share of the identifiable net assets of the investee when investing, thedifference shall be included in the current profit and loss, and the cost of the long-term equity investmentshall be adjusted
When 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 entityshall be adjusted in accordance with the accounting policies and periods of the Company, and theinvestment income and other comprehensive income shall be confirmed accordingly. For the transactionsbetween the Company and the associates and joint ventures, the assets invested or sold do not constitute abusiness, and the unrealized gains and losses from internal transactions are offset against the portion of theCompany that is attributable to the proportion of the shares, on this basis. investment profit and loss shouldbe confirmed. However, the unrealized internal transaction losses incurred by the Company and the
investee are not included in the impairment losses of the transferred assets. Where the assets invested bythe Company into a joint venture or an associates constitute a business, if the investor obtains long-termequity investment but does not control, the fair value of the invested business shall be deemed as the initialinvestment cost of the new long-term equity investment, and the difference between the initial investmentcost and the book value of the invested business is fully recognized in the current profits and losses. If theassets sold by the Company to a joint venture or an associate that constitute a business, the differencebetween the consideration value obtained and the book value of the business shall be fully recognized inthe profits and losses of the current period.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 andincluded in the current investment losses. If the investee achieves net profit in the following period, theCompany shall 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 thestraight-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 thecapital reserve is insufficient to offset, the retained earnings shall be adjusted.d. Disposal of long-term equity investmentIn the consolidated financial statements, the parent company partially of disposes of 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 which
were 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 ofchanges in the owner's equity of the investee other than net profit or loss, other comprehensive income andprofit distribution, it should be carried forward to the current profit and lossFor the long-term equity investment accounted by Cost Method, the remaining equity is stillaccounted by Cost Method after disposal, other comprehensive income that recognized by equity methodaccounting or financial instrument recognition and measurement criteria accounting before obtainingcontrol over the investee shall be accounted for on the same basis as the assets or liabilities directlydisposed of by the investee, and shall be settled to the current profit and loss in proportion. Changes of thenet assets of investee in the owner's equity other than net profit or loss, other comprehensive income andprofit distribution 's that recognized by equity method shall be settled to the current profit and loss inproportion.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,and the remaining equity shall be adjusted by accounting by equity method when it is deemed to beacquired. If the remaining equity after disposal cannot be jointly controlled or exerts significant influenceon the investee, it shall be accounted for according to the relevant provisions of the financial instrumentrecognition and measurement criteria, and the difference between the fair value and the book value on thedate of loss of control. It is included in the current profit and loss. Before the Company obtains controlover the investee, other comprehensive income recognized by equity method accounting or financialinstrument recognition and measurement criteria is used to directly dispose of the relevant assets with theinvestee, accounting treatment based on the same basis as the investee directly disposes of related assets orliabilities when the control of the investee is lost, Accounting is treated on the same basis as the liabilities.Changes in the owner's equity other than net profit or loss, other comprehensive income and profitdistribution of the investee's net assets recognized by the equity method are carried forward to the currentprofit or loss when the control of the investee is lost. Among them, the remaining equity after disposal isaccounted for using the equity method. Where the remaining equity after disposal is accounted for byequity method, other comprehensive income and other owner's equity should be settled by proportion. Ifthe remaining equity is accounted for using financial instrument recognition and measurement standard, allof other comprehensive income and other shareholder’s equity should be settled.If the Company loses its joint control or significant influence on the investee due to the disposal ofpart of the equity investment, the remaining equity after disposal shall be accounted for according to thefinancial instrument recognition and measurement criteria, and the difference between the fair value and
the book value on the date of loss of joint control or significant influence is recognized in the current profitor loss. The other comprehensive income recognized in the original equity investment by the equitymethod is accounted for on the same basis as the investee's direct disposal of related assets or liabilitieswhen the equity method is terminated, Owner's equity recognized as a result of changes in other owners'equity other than net profit or loss, other comprehensive income and profit distribution of the investeeshould be transferred to current investment income when terminating the equity method
The 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 othercomprehensive income, and when the control is lost, it is transferred to the current profit and loss of loss ofcontrol.
14．Investment Property
Investment 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 highlyprobable to flow into the company and the cost can be measured reliably, then the expense will account foras the cost of investment property. Other expenses are accounted for in profit and loss when incurred.
The Company adopts the cost model to conduct subsequent measurement of investment property anddepreciation or amortization according to the policy consistent with the building or land use rights.
For details of the impairment test method and impairment provision method of property, please referto Note 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 propertyfrom the date of change. In the case of investment property measured by the cost model when theconversion occurs, the book value before conversion is used as the entry value after conversion; if it isconverted into investment property measured by the fair value model, the fair value of the conversion dateis used as the entry value after conversion.
When an investment real estate is disposed of, or permanently withdrawn from use and is notexpected to obtain economic benefits from its disposal, the confirmation of the investment real estate shallbe terminated. 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 withownership of an asset, and its ownership may or may not be transferred. If it is reasonable to determine theownership of the leased asset at the expiration of the lease term, the depreciation shall be calculated within
the useful life of the leased asset; If it is not reasonable to determine the ownership of the leased asset atthe expiration of the lease term, depreciation shall be calculated within a relatively short period of the leaseterm and the service life of the leased assets.
(5) Others
The subsequent expenses related to fixed assets, if the economic benefits related to the fixed assets arelikely 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 profitor loss 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 beforethe project reaches the expected usable status, and other related expenses. Construction in progress iscarried forward to fixed assets when it is ready for its intended use.
For details of the impairment test method and impairment provision method for construction inprogress, 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 the
accumulated 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 areall 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 andinventories that require a substantial period of acquisition, construction or production activities to achievethe intended use 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 recovering tothe state of lease term agreed upon on, shall be subject to the Accounting Standards for Business EnterprisesNo.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 leaseliabilities as 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 accrued
depreciation 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 benefitsrelated to the right-of-use asset, and depreciates the right-of-use asset on a straight-line basis. Whendetermining the depreciation period of the right-of-use asset, the company follows the following principles:
if it can be reasonably determined that the ownership of the leased asset will be obtained at the expirationof the lease term, depreciation will be accrued within the remaining useful life of the leased asset; If theasset is owned, depreciation is accrued within the shorter of the lease term and the remaining useful life ofthe 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 itscosts can be measured reliably. However, the intangible assets acquired through business combination notinvolving enterprises under common control should be measured at fair value separately as intangibleassets when 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. Inaddition, the useful life of intangible assets with uncertain service life is also reviewed. If there is evidencethat the period for which the intangible assets bring economic benefits to the enterprise is foreseeable, theuseful life of intangible assets is estimated and amortized according to the amortization policy of intangibleassets with limited useful life
(2) Research and development expenditure
The company's expenditure for internal research and development project is divided into researchphase expenditure and development phase expenditure.
Expenditures for the research phase shall be recognized in profit or loss when incurred.
Expenditures for the development phase that meet the following conditions shall be 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 thereporting period and subsequent periods with amortization period of more than one year. The company'slong-term deferred expenses mainly include lease of land use right and renovation costs of factory building.
Long-term deferred 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, investmentproperty measured by cost model, and non-current non-financial assets such as long-term equityinvestments in subsidiaries, joint ventures and associates, the Company determines whether there is anyindication of impairment on the balance sheet date. If there is any indication of impairment, therecoverable amount is estimated and the impairment test is carried out. Goodwill, intangible assets withuncertain service life and intangible assets that not yet ready for use are tested for impairment annually,regardless of whether there is any indication of impairment.If the result of the impairment test indicates that the recoverable amount of the asset is lower than 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 determinedaccording to the sale agreement price in a fair transaction. If there is no sales agreement but there is anactive market for the asset, the fair value is determined according to the buyer's bid for the asset; if there isneither sales agreement nor active market for assets, the fair value of assets shall be estimated based on thebest information available. Asset disposal expenses include legal fee, taxes, transportation expenses anddirect expenses incurred to make assets saleable. The present value of the estimated future cash flow of anasset is determined by the appropriate discount rate discounting and the estimated future cash flowgenerated by the asset during its continuous use and final disposal. The asset impairment provision iscalculated and confirmed based on individual assets. If it is difficult to estimate the recoverable amount ofan individual asset, the recoverable amount of the asset is determined by the asset group which the assetbelongs to. An asset group is the smallest portfolio of assets that can generate cash inflows independently.
The book value of the goodwill listed separately in the financial statements is amortized into 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 impairmentlosses should be confirmed. The amount of impairment loss is first deducted from the book value of thegoodwill amortized to the asset group or portfolio, and then deducted proportionally from the book valueof other assets according to the proportion of the book value of assets other than goodwill in the assetgroup or portfolio.
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 periodin 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 andis included in the current profit and loss or related asset cost.
If the labor relationship with the employee is terminated before the employee's labor contract expires,or if 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 borrowingrate of the lessee shall be used as the discount rate. The Group calculates the interest expense of the leaseliability during each period of the lease term in accordance with the constant periodic rate of interest andrecognizes it in profit and loss for the current period, except otherwise stipulated in the cost of relatedassets. The variable lease payment that is not included in the measurement of lease liabilities is recognizedin the profit and loss for the current period when it actually occurs, except that it is otherwise stipulated tobe included in 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 inevitablyoccur more than the expected economic benefit. If the contract to be executed becomes a loss contract, andthe obligation arising from the loss contract satisfies the conditions for the recognition of theabove-mentioned estimated liabilities, the portion of the contract's estimated loss that exceeds therecognized 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 amountof the estimated liabilities are determined based on the direct expenses related to the reorganization,subject to the recognition conditions of the aforementioned estimated liabilities. For the restructuringobligation to the part of business sold, the obligation related to the reorganization is confirmed only whenthe 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 Payment
The 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,during the waiting period, the amount of the fair value is calculated by the straight-line method into therelevant costs or expenses based on the best estimate of the number of vesting equity instruments; Or If thevesting right is granted immediately after the grant, the calculation of the amount of the fair value isincluded in the relevant cost or expense on the grant date, and the capital reserve is increased accordingly.
On each balance sheet date during the waiting period, the Company makes the best estimate based onthe latest information on the changes in the number of employees with vesting rights and corrects thenumber of equity instruments that are expected to be vested. The impact of the above estimates shall beincluded in the 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 be
increased 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 eachbalance sheet date of the waiting period, according to the fair value of the liabilities assumed by thecompany, the services obtained in the current period are included in the cost or expense, and the liabilitiesare increased accordingly.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 terminationWhen the Company modifies the share-based payment plan, if the modification increases the fairvalue of the equity instruments granted, the increase in the fair value of the equity instruments isrecognized accordingly. The increase in the fair value of equity instruments refers to the differencebetween the fair value of the equity instruments before and after the modification. If the modificationreduces the total fair value of the share-based payment or adopts other methods that are not conducive tothe employee, the service obtained shall continue to be accounted for, as if the change has never occurred,unless the Company cancels some or all of equity instruments.During the waiting period, if the granted equity instrument is cancelled, the Company will cancel 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 acash-settled share-based payment.
If the settlement enterprise is an investor of a serviced enterprise, it shall be recognized as thelong-term equity investment of the serviced enterprise according to the fair value of the equity instrumentat the grant date or the fair value of the liability to be assumed, and the capital reserve (other capitalreserve) or liabilities shall be recognized.
b.) If the serviced enterprise has no settlement obligation or grants its own employees the equityinstruments, the share payment transaction shall be treated as equity-settled share payment; if the servicedenterprise has settlement obligation and grants its employees other than its own equity instruments, theshare payment 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 intheir individual 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 oftime. 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 therelevant goods on the basis of comprehensively considering the following factors: the company has theright to receive payment in respect of the goods or services currently, that is, the customer has theobligation to pay for the goods currently; the company has transferred the legal ownership of the goods tothe customer, that is, the customer has the legal ownership of the goods; The Company has transferred thephysical goods of the commodity to the Customer or the Customer has obtained the qualification ofphysical goods right of the commodity. The consideration obtained by the Company in respect of thetransfer of the commodity is likely to be recovered. Other indications that the customer has taken controlof the commodity.
The specific principles of the company's sales revenue recognition are as follows: when thecommodity have been delivered to the customer and signed by the customer for confirmation, or theownership certificate of the commodity has been delivered to the customer, the sales revenue is recognizedwhen the company has received the payment or obtained the evidence of payment.
(2) Revenue recognition for fulfilling performance obligation within a certain period of timeFor the performance obligations performed in a certain period of time, such as the 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 the
contract multiplied by the progress of performance minus the accumulated recognized income. If one ofthe following conditions is satisfied, it is regarded as the performance obligation performed during acertain period of time: the Customer obtains and consumes the economic benefits arising from theperformance of the Company at the same time of the performance of the Company; Customers can controlthe goods under construction during the performance of the contract; The products produced by theCompany during the performance of the Contract are of irreplaceable use, and the Company shall beentitled to receive payment for the accumulated part of the completed performance so far during the wholeterm of the Contract. Otherwise, the Company recognizes revenue at the point when the Customer acquirescontrol of the relevant goods or services.The Company's rights to receive consideration for goods or services transferred to the Customer(and such rights depend on factors other than the time passage) are presented as contractual assets, whichare subject to impairment on the basis of expected credit losses. The company's right to collectconsideration from customers unconditionally (only depending on the passage of time) is listed asreceivables. The obligation of the Company to transfer goods or services to customers for whichconsideration has been received 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 theamortization period has exceeded one normal operating cycle at the time of its initial recognition.
2. Contract acquisition cost
If the incremental cost incurred by the company to obtain the contract is expected to 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 of
the 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 partshall be 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 andrevenue-related grants. The company defines the government grant obtained for the purchase andconstruction of long-term assets or for the formation of long-term assets in other ways as the governmentgrant related to assets; the remaining government grant is defined as the government grant related toincome. If the object of grants is not specified in government documents, the grants shall be divided intoincome-related government grants and assets-related government grants in the following ways: (1) If thegovernment document clarifies the specific project for which the grant is targeted, the proportion of theexpenditure amount of the assets to be formed and the amount of the expenditures included in the expensesin the budget of the specific project are divided, and the proportion of grant division needs to be reviewedon each balance sheet day and changed if necessary. (2) In government documents, if the purpose isexpressed only in general terms and no specific project is specified, the grant shall be regarded as agovernment grant related to the income. Where a government grant is a monetary asset, it shall bemeasured according to the amount received or receivable. If the government grants are non-monetaryassets, they shall be measured at the fair value; if the fair value cannot be obtained reliably, they shall bemeasured at the nominal amount. Government grants measured in nominal amounts shall be recognizeddirectly 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 areexpected to be received, it shall be measured according to the amount receivable. Government grantsmeasured in accordance with the amount receivable shall meet the following conditions at the same time:
(1) The amount of the subvention receivable has been confirmed by the authorized governmentdepartments, or can be reasonably calculated according to the relevant provisions of the formally issuedfinancial fund management measures, and there is no significant uncertainty in the amount expected; (2)According to the "Regulations on the Openness of Government Information" that the local financial
department officially released and in accordance with the provisions of the "Regulations on the Opennessof Government Information," the financial support project and its financial fund management measuresshould be inclusive (any eligible enterprise can apply for them), rather than being specifically tailored tospecific companies; (3) The relevant grant approval has clearly promised the payment period, and theallocation of the payment is guaranteed by the corresponding budget, so it can be reasonably ensure that itcan be received within the prescribed time limit; (4) Other relevant conditions (if any) to be met inaccordance with the specific circumstances of the Company and the grants.
Government grants related to assets are recognized as deferred earnings and are divided 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 expensesare calculated is based on the corresponding adjustment of pre-tax accounting profits in the reportingperiod in accordance with the relevant tax laws.
(2) Deferred Income Tax Assets and Deferred Income Tax Liabilities
The difference between the book value of certain assets and liabilities and their tax basis, 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 notbe recognized. In addition, for taxable temporary differences related to investments in subsidiaries,associates and joint ventures, if the Company is able to control the turnaround time of temporarydifferences, and the temporary difference is unlikely to be reversed in the foreseeable future, the relateddeferred income tax liabilities shall not be recognized. Except for the above exceptions, the Companyrecognizes all other deferred 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 tooffset the temporary difference is unlikely to be obtained in the future, the deferred income tax assetsconcerned shall not be recognized. Except for the above exceptions, the Company recognizes otherdeferred income tax assets that can offset temporary differences, subject to the amount of taxable incomethat is likely to be obtained to offset temporary differences.
For deductible losses and tax credits that can be carried forward in subsequent years, thecorresponding deferred income tax assets are recognized to the extent that it is probable that the futuretaxable income shall be used to offset the deductible losses and tax credits.
On the balance sheet date, the deferred income tax assets and deferred income tax 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
value of deferred income tax assets is written down if it is likely that sufficient taxable income will not beavailable to offset the benefits of deferred income tax assets in the future. When it is possible to obtainsufficient taxable income, the amount written down shall be reversed.
(3) Income tax expenses
Income tax expenses include current income tax and deferred income tax.In addition to recognizing that the current income tax and deferred income tax related to othertransactions and matters directly included in shareholder's rights and interests shall be recognized 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 oracquire assets and pay off liabilities at the same time, the company's current income tax assets and currentincome tax liabilities shall be presented on a net basis after the offset.
When it has the legal right to settle current income tax assets and current income tax liabilities on anet basis, and deferred income tax assets and deferred income tax liabilities are related to the income taxlevied by the same tax administration department on the same tax payer or to different tax payers, but inthe future, during each important period of deferred income tax assets and liabilities being reversed, thetaxpayer involved intends to settle the current income tax assets and liabilities on a net basis, or acquireassets and pay off liabilities simultaneously, the deferred the income tax assets and deferred income taxliabilities of the Company shall be presented on a net basis after offset.
30. Lease
Finance lease is a lease that essentially transfers all risks and rewards related to the ownership ofassets. Its ownership may or may not be transferred eventually. Leases other than finance leases areoperating 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
capitalized when occurring, and the profits and losses of the current period shall be recorded in stages onthe same basis as the recognized rental income during the whole lease period; the smaller initial directexpenses shall be recorded in the profits and losses of the current period when occurring. Contingentrentals shall be included in 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 leasedassets, 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 occurduring the lease negotiation and the signing of the lease contract. The balance of the minimum leasepayment after deducting the unrecognized financing costs shall be presented as long-term liabilities andlong-term liabilities 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 coston the lease start date is regarded as the entry value of the financial lease receivable, and the unsecuredbalance shall be recorded. The difference between the sum of the minimum lease receivable, the initialdirect cost and the unsecured balance and the sum of its present value is recognized as the unrealizedfinancing income. The balance of the receivable financial lease after deducting the unrealized financialincome shall be presented 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 fortreatment. 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 riskmanagement objectives of the Company engaged in hedging. In addition, the Company will continuouslyevaluate the effectiveness of hedging at the beginning and after the hedging.
Fair value hedging
If a hedging instrument is designated as a fair value hedge and meets the conditions, the profits orlosses arising therefrom shall be included into the current profits and losses. If the hedging instrumenthedges the non-trading equity instrument investment (or its components) that is measured at fair value andwhose changes 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 the
basis 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 thecurrent and future periods, the number of impacts will be confirmed in the current and future periods of thechange.
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,external market environment, technological environment, changes in customer conditions and otherfactors.
(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 ofinventories to net realizable value is based on the evaluation of the marketability of inventories and theirnet realizable value. The appraisal of impairment of inventories requires the management to makejudgment and estimation on the basis of obtaining conclusive evidence and considering factors such as thepurpose of holding inventories and the influence of events after the balance sheet date. The differencebetween the actual result and the original estimate will affect the book value of inventory and the accrualor reversal of inventory depreciation 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 fornon-current assets other than financial assets. For intangible assets with uncertain service life, in additionto the annual impairment test, the impairment test is also carried out when there are signs of impairment.Other non-current assets other than financial assets shall be tested for impairment when there areindications that their book amounts are not recoverable.
When the book value of an asset or asset group is higher than the recoverable amount, that is, thehigher of the net amount of the fair value minus the disposal expenses and the present value of theestimated future cash 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 thesales agreement 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 predictthe cash 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, combinedwith tax 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 taxand deferred 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. Inthe process of judgment, the Company needs to evaluate the risks, uncertainties, time value of money andother factors 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,but the recent maintenance experience may not reflect the future maintenance situation. Any increase ordecrease in this provision may affect the profit and loss in the future years.
(8) Fair value measurement
Certain assets and liabilities of the Company are measured at fair value in the 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 qualifiedthird-party appraiser to perform the appraisal. The Company works closely with qualified externalappraisers to determine 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%、20%、17%、15% |
| Property Tax | According to 70% of original value of the real estate (or rental income) as the tax base; according to the original value of the real estate deducted 30% at a time. | 12%、1.2% |
Representation on tax payers of different enterprise income tax rates:
| Tax Payers | Income Tax Rate |
| Hangzhou Lin'an Chunmanyuan Agricultural Development Co., Ltd. | 20% |
| Jingliang (Singapore) International Trade Co., Ltd. | 17% |
| Beijing Guchuan Bread Food Co., Ltd. | 15% |
2. Important preferential tax policies and basis
The level 3 subsidiary of the company, Hangzhou Linan Little Angel Food Co., Ltd.,is a welfareenterprise. Since May 2016, it has enjoyed the preferential VAT policy of immediate refund upon paymentin 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 ofLaw of 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-techenterprise. It enjoys the preferential tax policy of paying enterprise income tax at the 15% tax rateaccording to the relevant provisions of both “Law of the People's Republic of China on Tax Collection andAdministration” and “Rules for the Implementation of the Tax Collection and Administration Law of thePeople's Republic of China”. It obtained the certificate of high-tech enterprise No. GR202111000657, validuntil September 14, 2024.
The level 3 subsidiary of the company, Beijing Tianweikang oil and fat distribution center Co., Ltd., isexempt 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 andthe State 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.
The level 3 subsidiary of the company, Jingliang (Singapore) International Trade Co., Ltd. is taxedaccording 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.The level 4 subsidiary of the company, Hangzhou Linan Little Angel Food Co., Ltd., according to therelevant provisions of the Notice on Enterprise Income Tax Preferential Policies for Employing DisabledPersons (Cai Shui [2009] No. 70) issued by the Ministry of Finance and the State Administration ofTaxation, if an enterprise arranges disabled persons, it can deduct 100% of the salary paid to disabledemployees based on the actual deduction of the salary paid to them when calculating the taxable income.The level 3 subsidiary of the company, Zhejiang Little Prince Food Co., Ltd., and the level 4subsidiary of the company, Hangzhou Linan Little Angel Food Co., Ltd., according to the ZhejiangProvincial People's Government Office Document No. 62 (2019), urban land use tax reduction andexemption policies that are uniformly implemented by taxpayers in the manufacturing industry throughoutthe province (including Ningbo City) can be enjoyed. Before December 31, 2022, urban land use taxreductions of 100% and 80% for Class A and Class B enterprises can be enjoyed, respectively. Themaximum reduction limit is 100% of the urban land use tax amount that the unit should pay in the currentyear 80%.
The level 4 subsidiary of the company, Linqing Little Prince Food Co., Ltd., 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, 2018issued by Shandong Provincial Tax Bureau. The base of stamp duty payable in 2022 shall be calculatedaccording to 50% of the sales revenue.
The level 4 subsidiary of the company, Liaoning Xiaowangzi Food Limited, is subjected to theregulation that according to the Supplementary Announcement on Land Use Tax issued by Ministry ofFinance and State Administration of Taxation (89) GSDZ No.140 Clause 13 states that public land such asmunicipal street, square, public green etc. can be exempted from land use tax, when computing land usetax, the area used in the computation is total area less the area for afforest and street.
The company level 4 subsidiary of the company, Jingliang (Hebei) Oil Industry Co., Ltd., accordingto Announcement No. 8 of 2022 issued by the Ministry of Finance and the State Administration ofTaxation, the Ministry of Finance and the State Administration of Taxation on the Continuation of TaxPreferential Policies for Some National Commodity Reserves, and Notice No. 8 issued by Hebei Provinceon Organizing the Application of Tax Exemption Qualification for Local Reserve Commodity Storage
Enterprises, is subjected to the regulation that stamp duty is exempted on capital account books, and stampduty is exempted on purchase and sales contracts signed during the process of undertaking commodityreserve business, Stamp duty payable by other parties to the contract shall be levied in accordance withregulations. Real estate tax and urban land use tax are exempted for the self use of property and land thatundertake commodity reserve business. The execution period of this notice is from January 1, 2022 toDecember 31, 2023. Our fourth level subsidiary, Jingliang (Hebei) Oil Industry Co., Ltd., has exempted thesales of government reserve edible vegetable oil from value-added tax in accordance with the Notice of theMinistry of Finance and the State Administration of Taxation on the Levy and Exemption of Value AddedTax for Grain Enterprises (Cai Shui Zi [1999] No. 198).The level 2 subsidiary of the company, Jingliang (Beijing) Food Marketing Management Co., Ltd.,and the level 4 subsidiary of Linqing Little Prince Co., Ltd., according to Announcement No. 6 of 2023 ofthe Ministry of Finance and the State Administration of Taxation on the Preferential Policies for IncomeTax for Small and Micro Enterprises and Individual Industrial and Commercial Households, is subjected tothe regulation that the portion of the annual taxable income of small and micro profit enterprises that doesnot exceed 1 million yuan shall be reduced by 25% and included in the taxable income, and the enterpriseincome tax shall be paid at a 20% tax rate.
The level 2 subsidiary of the company, Jingliang (Beijing) Food Marketing Management Co., Ltd.,the level 4 subsidiary of Linqing Little Prince Co., Ltd. And the level 4 subsidiary of the company,Hangzhou Lin'an Chunmanyuan Agricultural Development Co., Ltd., are subject to the Announcement ofthe Ministry of Finance and the State Administration of Taxation on Further Implementing the "Six Taxesand Two Fees" Reduction Policy for Small and Micro Enterprises in this period, issued by the Ministry ofFinance and the State Administration of Taxation in the form of Cai Shui [2022] No. 10. Our companymeets the conditions for the recognition of small and micro enterprises, The preferential policies applicablefor 2022 are as follows: "The people's governments of provinces, autonomous regions, and municipalitiesdirectly under the central government shall determine based on the actual situation of the local area and theneeds of macroeconomic regulation, and small-scale value-added tax taxpayers, small low-profitenterprises, and individual industrial and commercial households can reduce their capital tax, urbanmaintenance and construction tax, real estate tax, urban land use tax, and stamp tax (excluding securitiestransaction stamp tax) within a 50% tax amount range Farmland occupation tax and education surcharge,local education surcharge.
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 StatementsNote: The beginning of the period refers to December 31th, 2022 and the end of the period refers toJune 30
th, 2023. The previous period refers to the semiannual of 2022 and the current period refers to thesemiannual of 2023.
1. Monetary funds
(1) Classification list
| Items | Ending Balance | Beginning Balance |
| Cash | 24,244.79 | 10,693.10 |
| Bank Deposits | 1,204,708,171.25 | 541,089,415.35 |
| Other Currency Funds | 46,934,488.77 | 19,913,001.31 |
| Total | 1,251,666,904.81 | 561,013,109.76 |
| Among them: the total amount of money deposited abroad | 5,306,117.93 | 16,585,678.20 |
(2) 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 | 16,175,691.49 | 11,005,983.98 |
| Among them: debt instrument investment | 16,175,691.49 | 11,005,983.98 |
| Total | 16,175,691.49 | 11,005,983.98 |
3. Derivative financial assets
| Items | Ending Balance | Beginning Balance |
| Changes in fair value of hedging instruments | 153,000.00 | 201,549.12 |
| Total | 153,000.00 | 201,549.12 |
4. Notes receivale
(1) Classification list
| Items | Ending Balance | Beginning Balance |
| Banker’s acceptance | 154,945.01 | |
| Commerical acceptances |
| Items | Ending Balance | Beginning Balance |
| Total | 154,945.01 |
5. Accounts Receivable
(1) Disclosed according to aging
| Aging | Ending Balance |
| Within 1 Year (including 1 year) | 70,099,387.88 |
| Among them: Within the credit (within 3 months) | 64,381,969.87 |
| Credit period to 1 year | 5,717,418.01 |
| 1 to 2 years (including 2 years) | 19,663,495.39 |
| 2 to 3 years (including 3 years) | 7,499,480.04 |
| 3 to 4 years (including 4 years) | |
| 4 to 5 years (including 5 years) | |
| More than 5 years | 328,259.50 |
| Sub-total | 97,590,622.81 |
| Less Bad Debt provision | 2,805,192.06 |
| Total | 94,785,430.75 |
（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 | 328,259.50 | 0.34 | 328,259.50 | 100.00 | |
| Portfolio provision for bad debts | 97,262,363.31 | 99.66 | 2,476,932.56 | 2.55 | 94,785,430.75 |
| Among them: portfolio 1 | 65,527,069.02 | 67.14 | 2,476,932.56 | 3.78 | 63,050,136.46 |
| portfolio 2 | 31,735,294.29 | 32.52 | 31,735,294.29 | ||
| Total | 97,590,622.81 | 100.00 | 2,805,192.06 | 94,785,430.75 | |
（Continued）
| Type(s) | Beginning Balance | ||||
| Book Balance | Bad Debt Provision | Book Value | |||
| Amount | Ratio(%) | Amount | Provision Ratio(%) | ||
| Separate provision for bad debts | 328,259.50 | 0.41 | 328,259.50 | 100.00 | |
| Portfolio provision for bad debts | 79,545,807.01 | 99.59 | 2,488,360.15 | 3.13 | 77,057,446.86 |
| Among them: portfolio 1 | 67,813,844.17 | 84.90 | 2,488,360.15 | 3.67 | 65,325,484.02 |
A. Separate provision for bad debts
| Name | Ending Balance | |||
| Accounts Receivable | Bad Debt Provision | Provision Ratio | Provision Reason | |
| Beijing Rongfa Lida Grain and Oil Trade Co., Ltd. | 163,143.00 | 163,143.00 | 100.00 | expected unrecoverable |
| Fujian JINGXIN Industrial Group Co., Ltd. | 151,844.00 | 151,844.00 | 100.00 | expected unrecoverable |
| Others | 13,272.50 | 13,272.50 | 100.00 | expected unrecoverable |
| Total | 328,259.50 | 328,259.50 | －－ | －－ |
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) | 39,001,364.78 | 25,725.34 | 41,621,729.49 | 53,832.41 | ||
| Among them: Within the credit (within 3 months) | 37,715,097.78 | 38,930,117.33 | ||||
| Credit period to 1 year | 1,286,267.00 | 25,725.34 | 2 | 2,691,612.16 | 53,832.41 | 2 |
| 1 to 2 years (including 2 years) | 19,026,224.20 | 951,311.21 | 5 | 18,692,634.64 | 934,631.73 | 5 |
| 2 to 3 years (including 3 years) | 7,499,480.04 | 1,499,896.01 | 20 | 7,499,480.04 | 1,499,896.01 | 20 |
| 3 to 4 years (including 4 years) | ||||||
| 4 to 5 years (including 5 years) | 80 | |||||
| More than 5 years | 100 | |||||
| Total | 65,527,069.02 | 2,476,932.56 | 67,813,844.17 | 2,488,360.15 | ||
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 | 31,735,294.29 | 11,731,962.84 | ||||
Type(s)
| Type(s) | Beginning Balance | ||||
| Book Balance | Bad Debt Provision | Book Value | |||
| Amount | Ratio(%) | Amount | Provision Ratio(%) | ||
| portfolio 2 | 11,731,962.84 | 14.69 | 11,731,962.84 | ||
| Total | 79,874,066.51 | 100.00 | 2,816,619.65 | 77,057,446.86 | |
| Name | Ending Balance | Beginning Balance | ||||
| Accounts receivable | Bad Debt Provision | Provision Ratio | Accounts receivable | Bad Debt Provision | Provision Ratio | |
| portfolio | ||||||
| Total | 31,735,294.29 | 11,731,962.84 | ||||
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 | 328,259.50 | 328,259.50 | ||||
| Credit impairment loss | 2,488,360.15 | 2,656.98 | 8,770.61 | 2,476,932.56 | ||
| Total | 2,816,619.65 | 2,656.98 | 8,770.61 | 2,805,192.06 | ||
4. 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 | 26.64 | 1 to 2 years or 2 to 3 years | No | 2,424,788.81 |
| Shanghai Shounong Investment Holding Co., Ltd. | 19,432,675.33 | 19.91 | Within 3 month | Yes | |
| Kudi Technology (Fujian) Co.,Ltd. | 8,252,864.70 | 8.46 | Within 3 month | No | |
| Zhejiang luqin Supply Chain Management CO., Ltd | 5,339,283.52 | 5.47 | Within 4 month to 1 year | No | |
| Beijing Sanyuan seed Industry Science and Technology Co., Ltd Feed Branch | 3,288,386.72 | 3.37 | Within 3 month | No | |
| Total | 62,310,546.31 | 63.85 | —— | 2,424,788.81 |
6. Advanced Payment
(1) Advances are presented by age
| Aging | Ending Balance | Beginning Balance | ||
| Amount | Ratio (%) | Amount | Ratio (%) | |
| Within 1 year (including 1 year) | 551,432,045.68 | 99.97 | 194,490,369.48 | 99.99 |
| 1 to 2 years (including 2 years) | 144,000.00 | 0.03 | 5,278.58 | 0.01 |
| 2 to 3 years (including 3 years) | ||||
| Aging | Ending Balance | Beginning Balance | ||
| Amount | Ratio (%) | Amount | Ratio (%) | |
| More than 3 years | ||||
| Total | 551,576,045.68 | 100.00 | 194,495,648.06 | 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 (%) |
| Shanghai Shounong Investment Holding Co. , Ltd. | 379,840,707.34 | 68.86 |
| People’s Republic of China Tianjin Port Customs | 34,401,072.95 | 6.24 |
| Zhongchu Grain Zhenjiang grain and Oil Co. , Ltd | 25,028,439.68 | 4.54 |
| China Stored Grain Oil Co. , Ltd | 23,236,284.00 | 4.21 |
| China stored grain oil (Tangshan) Co. , Ltd. | 15,949,391.34 | 2.89 |
| Total | 478,455,895.31 | 86.74 |
7. Other Receivables
A. Overview
(1) Classification
| Item(s) | Ending Balance | Beginning Balance |
| Other Receivables | 438,557,843.89 | 444,523,698.48 |
| Total | 438,557,843.89 | 444,523,698.48 |
B. Other Receivables
（1）Disclosed according to aging
| Aging | Ending Balance |
| Within 1 Year (including 1 year) | 438,178,697.89 |
| Among them: Within the credit (within 3 months) | 325,052,390.76 |
| Credit period to 1 year | 113,126,307.13 |
| 1 to 2 years (including 2 years) | 86,732.00 |
| 2 to 3 years (including 3 years) | 67,888.00 |
| 3 to 4 years (including 4 years) | 194,526.00 |
| 4 to 5 years (including 5 years) | |
| More than 5 years | 30,000.00 |
| Sub-Total | 438,557,843.89 |
| Less Bad Debt provision | |
| Total | 438,557,843.89 |
（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 | 425,195,908.35 | 436,908,577.53 |
| Intercourse Funds of Units | 12,221,802.45 | 5,728,584.30 |
| Employee Receivables | 817,509.23 | 1,051,023.02 |
| Tax Refund Receivables | 548,483.77 | |
| Others | 322,623.86 | 287,029.86 |
| Total | 438,557,843.89 | 444,523,698.48 |
(3) Other receivables according to top five of balance at end of period collected by debtors
| Name of Organization | Nature of Funds | Balance at End of Period | Aging | Proportion in overall ending balance of other receivables (%) | Ending balance of bad debt reserves |
| Zhongtian Futures Co. , Ltd. | margin | 220,973,638.50 | Within3month | 50.39 | |
| Haitong Futures Co. , Ltd | margin | 160,014,429.87 | Within3month | 36.49 | |
| Beijing Pioneer Futures Co. , Ltd. | margin | 16,256,670.00 | Within3month | 3.71 | |
| Guotuanxin Futures Co. , Ltd. | margin | 7,957,390.26 | Within3month | 1.81 | |
| Port of Tianjin customs of the People's Republic of China | Deposit for tax increase | 3,011,883.09 | Within3month | 0.69 | |
| Total | 408,214,011.72 | 93.08 |
8. 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 | 287,416,443.90 | 287,416,443.90 | 445,721,945.85 | 4,599.51 | 445,717,346.34 | |
| Revolving Materials | 5,170,140.01 | 5,170,140.01 | 5,267,896.63 | 5,267,896.63 | ||
| Goods and materials in transit | 266,834,372.64 | 266,834,372.64 | 337,276,381.65 | 337,276,381.65 | ||
| Inventory goods | 1,440,688,746.62 | 31,212,235.53 | 1,409,476,511.09 | 1,081,693,725.26 | 44,208,166.31 | 1,037,485,558.95 |
| Replacement of oil reserve | 219,334,077.42 | 219,334,077.42 | 248,197,500.00 | 248,197,500.00 | ||
| Total | 2,219,443,780.59 | 31,212,235.53 | 2,188,231,545.06 | 2,118,157,449.39 | 44,212,765.82 | 2,073,944,683.57 |
(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 | 44,208,166.31 | 25,376,091.85 | 38,372,022.63 | 31,212,235.53 | ||
| 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 | |||
| Raw material | 4,599.51 | 4,599.51 | ||||
| In total | 44,212,765.82 | 25,376,091.85 | 38,376,622.14 | 31,212,235.53 | ||
（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 and oils | 1,416,567,964.06 | 31,212,235.53 | 1,385,355,728.53 | 1,048,142,485.94 | 44,023,263.60 | 1,004,119,222.34 |
| Food | 24,120,782.56 | 24,120,782.56 | 33,551,239.32 | 184,902.71 | 33,366,336.61 | |
| Total | 1,440,688,746.62 | 31,212,235.53 | 1,409,476,511.09 | 1,081,693,725.26 | 44,208,166.31 | 1,037,485,558.95 |
9. Non-current assets due within one year
| Items | Balance at End of Period | Balance at Beginning of Period |
| Three-year term deposits | 106,546,505.27 | 148,387,894.16 |
| In total | 106,546,505.27 | 148,387,894.16 |
10. Other Current Assets
| Items | Balance at End of Period | Balance at Beginning of Period |
| Financial Products | 405,999,000.00 | |
| Pre-paid Taxes and Fees | 60,468,116.85 | 15,477,676.61 |
| Pending Deduct VAT Input Tax | 71,822,934.33 | 45,572,085.33 |
| Fair Value Changes of Items Trapped at Hedging | 231,572,760.24 | 165,881,137.81 |
| In total | 363,863,811.42 | 632,929,899.75 |
11. 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 | 121,605,419.10 | 3,239,417.30 | ||
| Sub-total | 121,605,419.10 | 3,239,417.30 | ||
| 2. Joint Venture | ||||
| China Grain Reserves (Tianjin) Warehouse Logistics Co., Ltd. | 115,506,829.06 | 3,772,879.56 | ||
| Jingliang Mismi Catering Management (Beijing) Co., Ltd. | 6,441,668.82 | |||
| 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 | ||
| Sub-total | 121,948,497.88 | 3,772,879.56 | ||
| Total | 243,553,916.98 | 7,012,296.86 | ||
(Continued)
| Increase or Decrease in the Current Period | Balance at End of Period | Ending Balance of Impairment Reserves | ||||
| Adjustment of other comprehensive income | Other changes in equity | Announce to Distribute Case Dividends or Profits | Accrual of Impairment Reserves | Others | ||
| 124,844,836.40 | ||||||
| 124,844,836.40 | ||||||
| 119,279,708.62 | ||||||
| 6,441,668.82 | ||||||
| 125,721,377.44 | ||||||
| 250,566,213.84 | ||||||
12. 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 |
13. Investment Real Estate
(1) Investment Real Estate Adopting Cost Measurement Model
| Items | Buildings | Land Use Right | Total |
| One. Original Book Value | |||
| 1. Balance at Beginning of Year | 54,691,581.60 | 54,691,581.60 | |
| 2. Increased Amounts in the Current Period | 9,000,432.40 | 576,510.00 | 9,576,942.40 |
| (1) Outsourcing | |||
| (2) Inventory transfer | |||
| (3) Others | 9,000,432.40 | 576,510.00 | 9,576,942.40 |
| 3. Decreased Amounts in the Current Period | |||
| (1) Disposal | |||
| (2) Other transfer out | |||
| 4. Balance at End of Period | 63,692,014.00 | 576,510.00 | 64,268,524.00 |
| Two. Accumulated Impairment and Accumulated Amortization |
| 1. Balance at Beginning of Year | 24,298,508.66 | 24,298,508.66 | |
| 2. Increased Amounts in the Current Period | 7,853,306.06 | 202,739.35 | 8,056,045.41 |
| (1) Accrual or Amortization | 7,853,306.06 | 202,739.35 | 8,056,045.41 |
| 3. Decreased Amounts in the Current Period | |||
| (1) Disposal | |||
| (2) Other transfer out | |||
| 4. Balance at End of Period | 32,151,814.72 | 202,739.35 | 32,354,554.07 |
| 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 | 20,952,402.58 | 373,770.65 | 21,326,173.23 |
| 2. Book Value at Beginning of Year | 19,805,276.24 | 19,805,276.24 |
14. Fixed Assets
1. Overview
(1) Classification
| Items | Balance at End of Period | Balance at Beginning of Year |
| Fixed Assets | 1,013,694,886.73 | 1,047,451,810.24 |
| Disposal of Fixed Assets | ||
| In total | 1,013,694,886.73 | 1,047,451,810.24 |
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 | 1,122,769,627.81 | 804,825,222.53 | 20,457,864.28 | 13,030,802.85 | 7,015,485.32 | 1,644,096.49 | 1,969,743,099.28 |
| 2. Increased Amounts in the Current Period | 5,224,389.40 | 10,769,641.77 | 1,167,164.62 | 658,831.34 | 177,108.99 | 8,849.56 | 18,005,985.68 |
| (1) Purchase | 3,479,022.05 | 10,769,641.77 | 1,167,164.62 | 498,154.36 | 177,108.99 | 8,849.56 | 16,099,941.35 |
| (2) Roll-in of Project under Construction | 1,745,367.35 | 160,676.98 | 1,906,044.33 | ||||
| (3) Roll-in of inventory | |||||||
| 3. Decreased Amounts in the Current Period | 9,000,432.40 | 441,168.84 | 274,776.00 | 7,566.36 | 58,297.66 | 9,782,241.26 | |
| (1) Disposal or Scrap | 441,168.84 | 274,776.00 | 7,566.36 | 58,297.66 | 781,808.86 | ||
| (2) Other Turn-in | 9,000,432.40 | 9,000,432.40 | |||||
| 4. Balance at End of Period | 1,118,993,584.81 | 815,153,695.46 | 21,350,252.90 | 13,682,067.83 | 7,134,296.65 | 1,652,946.05 | 1,977,966,843.70 |
| Two. Accumulated Impairment | |||||||
| 1. Balance at Beginning of Year | 417,797,356.22 | 465,777,890.41 | 13,737,392.56 | 9,541,958.53 | 5,664,529.67 | 652,098.03 | 913,171,225.42 |
| 2. Increased Amounts in the Current Period | 19,787,650.65 | 28,568,662.65 | 721,737.19 | 682,869.85 | 215,300.32 | 30,457.51 | 50,006,678.17 |
| (1) Accrual | 19,787,650.65 | 28,568,662.65 | 721,737.19 | 682,869.85 | 215,300.32 | 30,457.51 | 50,006,678.17 |
| 3. Decreased Amounts in the Current Period | 6,986,360.14 | 717,265.14 | 262,789.80 | 5,630.13 | 53,965.03 | 8,026,010.24 | |
| (1) Disposal or Scrap | 717,265.14 | 262,789.80 | 5,630.13 | 53,965.03 | 1,039,650.10 | ||
| (2)Other Turn-out | 6,986,360.14 | 6,986,360.14 | |||||
| 4. Balance at End of Period | 430,598,646.73 | 493,629,287.92 | 14,196,339.95 | 10,219,198.25 | 5,825,864.96 | 682,555.54 | 955,151,893.35 |
| Three. Impairment Reserves | |||||||
| 1. Balance at Beginning of Year | 9,047,959.13 | 72,104.49 | 9,120,063.62 | ||||
| 2. Increased Amounts in the Current Period | |||||||
| (1) Accrual | |||||||
| 3. Decreased Amounts in the Current Period | |||||||
| (1) Disposal or Scrap | |||||||
| 4. Balance at End of Period | 9,047,959.13 | 72,104.49 | 9,120,063.62 | ||||
| Four. Book Value | |||||||
| 1. Book Value at End of Period | 679,346,978.95 | 321,452,303.05 | 7,153,912.95 | 3,462,869.58 | 1,308,431.69 | 970,390.51 | 1,013,694,886.73 |
| 2. Book Value at Beginning of Year | 695,924,312.46 | 338,975,227.63 | 6,720,471.72 | 3,488,844.32 | 1,350,955.65 | 991,998.46 | 1,047,451,810.24 |
(2) Fixed assets without property right certificate
| Items | Book Value | Reasons for failure to complete certificate of title |
| Buildings | 2,969,274.46 | No title certificate for auxiliary assets |
15. Project under Construction
1. Overview
(1) Classification
| Items | Balance at End of Period | Balance at Beginning of Year |
| Project under Construction | 38,472,961.91 | 22,695,003.52 |
| Total | 38,472,961.91 | 22,695,003.52 |
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 | |
| Third plant slope treatment project | 7,609,297.51 | 7,609,297.51 | 5,244,356.21 | 5,244,356.21 | ||
| Comprehensive Free Trade Zone feed processing project | 6,123,665.24 | 6,123,665.24 | 5,224,681.81 | 5,224,681.81 | ||
| Second factory walnut cake production line | 4,238,844.00 | 4,238,844.00 | 4,238,844.00 | 4,238,844.00 | ||
| Konjac test line | 1,875,277.65 | 1,875,277.65 | 1,787,067.94 | 1,787,067.94 | ||
| Soybean puffing and rumen soybean meal processing project | 9,666,877.40 | 9,666,877.40 | 1,618,517.50 | 1,618,517.50 | ||
| Second factory baked potato supporting automation line | 953,600.00 | 953,600.00 | 953,600.00 | 953,600.00 | ||
| Heat Energy Recovery and utilization project | 856,263.58 | 856,263.58 | 856,263.58 | 856,263.58 | ||
| Odor control project | 1,585,321.11 | 1,585,321.11 | 792,660.56 | 792,660.56 | ||
| Test line for Vegetarian meat | 542,214.80 | 542,214.80 | 542,214.80 | 542,214.80 | ||
| Westhospital leaching workshop decoration project | 625,510.72 | 625,510.72 | 344,775.86 | 344,775.86 | ||
| Second Plant Baked Potato Line 2 flexible automation transformation project | 1,261,061.95 | 1,261,061.95 | ||||
| Expansion of Konjac production line | 869,036.30 | 869,036.30 | ||||
| Automatic transformation of Mai Shao packaging | 880,299.69 | 880,299.69 | ||||
| Others | 1,385,691.96 | 1,385,691.96 | 1,092,021.26 | 1,092,021.26 | ||
| Total | 38,472,961.91 | 38,472,961.91 | 22,695,003.52 | 22,695,003.52 | ||
(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 |
| Odor control project | 792,660.56 | 792,660.55 | 1,585,321.11 | ||
| Third plant slope treatment project | 5,244,356.21 | 2,364,941.30 | 7,609,297.51 | ||
| Second factory walnut cake production line | 4,238,844.00 | 4,238,844.00 |
| 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 |
| Konjac test line | 1,787,067.94 | 88,209.71 | 1,875,277.65 | ||
| Soybean puffing and rumen soybean meal processing project | 1,618,517.50 | 8,048,359.90 | - | 9,666,877.40 | |
| Comprehensive Free Trade Zone feed processing project | 5,224,681.81 | 898,983.43 | 6,123,665.24 | ||
| Second Plant Baked Potato Line 2 flexible automation transformation project | 1,261,061.95 | 1,261,061.95 | |||
| Total | 18,906,128.02 | 13,454,216.84 | 32,360,344.86 |
16. 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 | 630,874.50 | 4,970,592.00 | 10,024,772.26 |
| 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 | 630,874.50 | 4,970,592.00 | 10,024,772.26 |
| Two Accumulated Depreciation | ||||
| 1. Balance at Beginning of Year | 2,733,787.38 | 96,622.68 | 225,936.00 | 3,056,346.06 |
| 2. Increased Amounts in the Current Period | 623,367.02 | 47,239.27 | 56,484.00 | 727,090.29 |
| (1) Accrual | 623,367.02 | 47,239.27 | 56,484.00 | 727,090.29 |
| 3. Decreased Amounts in the Current Period | ||||
| Lease expiration or change | ||||
| 4. Balance at End of Period | 3,357,154.40 | 143,861.95 | 282,420.00 | 3,783,436.35 |
| 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 | 1,066,151.36 | 487,012.55 | 4,688,172.00 | 6,241,335.91 |
| 2. Book Value at Beginning of Year | 1,689,518.38 | 534,251.82 | 4,744,656.00 | 6,968,426.20 |
17. 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 | 5,172,273.84 | 316,139,303.96 | 154,841,200.00 | 476,152,777.80 | |
| 2. Increased Amounts in the Current Period | 98,141.60 | 5,430,549.36 | 5,528,690.96 | ||
| (1) Purchase | 98,141.60 | 5,430,549.36 | 5,528,690.96 | ||
| (2)Internal R&D | |||||
| (3)Increase in business consolidation | |||||
| 3. Decreased Amounts in the Current Period | 576,510.00 | 576,510.00 | |||
| (1) Disposal | |||||
| (2) Turn out | 576,510.00 | 576,510.00 | |||
| 4. Balance at End of Period | 5,270,415.44 | 320,993,343.32 | 154,841,200.00 | 481,104,958.76 | |
| Two Accumulated Amortization | |||||
| 1. Balance at Beginning of Year | 4,176,674.41 | 75,467,995.64 | 71,463,223.41 | 151,107,893.46 | |
| 2. Increased Amounts in the Current Period | 108,117.86 | 3,488,532.41 | 3,856,962.95 | 7,453,613.22 | |
| (1) Accrual | 108,117.86 | 3,488,532.41 | 3,856,962.95 | 7,453,613.22 | |
| 3. Decreased Amounts in the Current Period | 201,778.50 | 201,778.50 | |||
| (1) Disposal | |||||
| (2) Turn out | 201,778.50 | 201,778.50 | |||
| 4. Balance at End of Period | 4,284,792.27 | 78,754,749.55 | 75,320,186.36 | 158,359,728.18 | |
| Three Impairment Reserves | |||||
| 1. Balance at Beginning of Year | |||||
| 2. Increased Amounts in the Current Period |
| Items | Software | Land Use Right | Trademark Right | Others | In total |
| (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 | 985,623.17 | 242,238,593.77 | 79,521,013.64 | 322,745,230.58 | |
| 2. Book Value at Beginning of Year | 995,599.43 | 240,671,308.32 | 83,377,976.59 | 325,044,884.34 |
18. 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 LittlePrince Food Co., Ltd. the asset group of the goodwill is mainly composed of fixed assets, investment realestate, intangible assets and projects under construction.
19. 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 | 13,539,943.97 | 337,094.04 | 13,202,849.93 | ||
| Amortization of laboratory decoration costs | 2,230,677.31 | 80,246.16 | 2,150,431.15 | ||
| Factory No.3 compartment maintenance | 516,335.99 | 333,206.96 | 72,601.19 | 776,941.76 | |
| Housing renovation | 649,010.65 | 494,801.98 | 59,872.26 | 1,083,940.37 | |
| Total | 16,935,967.92 | 828,008.94 | 549,813.65 | 17,214,163.21 |
20. 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 | Deferred Income Tax Assets | Deductible Temporary | Deferred Income Tax Assets | |
| Difference | Difference | |||
| Asset Impairment Reserves | 31,274,517.52 | 7,818,629.38 | 44,268,191.18 | 11,067,047.80 |
| Lease liabilities | 142,681.30 | 35,670.33 | 167,668.58 | 41,917.15 |
| Deductible Loss | 1,383,480.84 | 345,870.21 | 1,383,480.84 | 345,870.21 |
| Credit impairment Loss | 3,811,842.32 | 952,960.58 | 3,811,842.32 | 952,960.58 |
| Deferred Income | 11,824,538.36 | 2,956,134.59 | 11,824,538.36 | 2,956,134.59 |
| 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 | 7,516,681.73 | 1,879,170.43 | 211,060.00 | 52,765.00 |
| Contract rebate | 3,451,347.72 | 862,836.93 | 3,215,300.44 | 803,825.11 |
| In total | 65,082,223.79 | 16,270,555.95 | 70,559,215.72 | 17,639,803.94 |
(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 | 139,511,373.01 | 34,877,843.25 | 144,667,350.88 | 36,166,837.72 |
| Valuation of Financial Instruments and Derivative Financial Instruments | 155,135,359.76 | 38,783,839.94 | 54,719,042.81 | 13,679,760.70 |
| Right to use assets | 34,449.15 | 8,612.29 | 34,449.15 | 8,612.29 |
| Total | 294,681,181.92 | 73,670,295.48 | 199,420,842.84 | 49,855,210.71 |
(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 | 3,015,308.80 | 13,255,247.15 | 3,450,040.01 | 14,189,763.93 |
| Deferred tax liabilities | 3,015,308.80 | 70,654,986.68 | 3,450,040.01 | 46,405,170.70 |
(4)Details of Deferred Income Tax Assets Not Being Confirmed
| Items | Balance at End of Period | Balance at Beginning of Year |
| Deductible temporary differences | ||
| Deductible Loss | 162,271,141.83 | 160,184,970.56 |
| In total | 162,271,141.83 | 160,184,970.56 |
(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 |
| 2023 | 9,688,448.81 | 9,688,448.81 | |
| 2024 | 47,153,825.45 | 47,153,825.45 | |
| 2025 | 25,114,592.05 | 25,114,592.05 | |
| 2026 | 12,221,704.26 | 12,221,704.26 | |
| 2027 | 66,006,399.99 | 66,006,399.99 | |
| 2028 | 2,086,171.27 | ||
| Total | 162,271,141.83 | 160,184,970.56 |
21. 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 | 33,895,087.34 | 33,895,087.34 | 53,544,782.34 | 53,544,782.34 | ||
| Total | 33,895,087.34 | 33,895,087.34 | 53,544,782.34 | 53,544,782.34 | ||
22. Short-term Borrowings
（1）Classification of Short-term Borrowings
| Items | Balance at End of Period | Balance at Beginning of Year |
| Guaranteed Loan | 1,642,308,166.66 | 1,260,543,148.81 |
| In total | 1,642,308,166.66 | 1,260,543,148.81 |
23. Derivative financial liability
| Item | Ending balance | Beginning balance |
| Changes in fair value of hedging instruments | 84,108,320.00 | 111,373,155.00 |
| Total | 84,108,320.00 | 111,373,155.00 |
24. Notes Payable
| Item | Ending balance | Beginning balance |
| Bank acceptance bill | 3,331,333.80 | |
| Total | 3,331,333.80 |
25. Accounts Payable
（1）Accounts Payable Listed
| Items | Balance at End of Period | Balance at Beginning of Year |
| Items | Balance at End of Period | Balance at Beginning of Year |
| Material Funds Payable | 113,538,785.12 | 99,975,435.40 |
| Project Funds Payable | 7,586,930.60 | 8,989,252.43 |
| Equipment Funds Payable | 271,620.81 | 765,432.60 |
| Others | 7,334,252.50 | 1,181,756.78 |
| In total | 128,731,589.03 | 110,911,877.21 |
26. Advance payment
（1）Advance payment Listed
| Items | Balance at End of Period | Balance at Beginning of Year |
| Advance collection of rent | 1,371,674.51 | 922,982.41 |
| In total | 1,371,674.51 | 922,982.41 |
27. Contract liabilities
（1） Classification of contract liabilities
| Items | Balance at End of Period | Balance at Beginning of Year |
| Loans | 589,737,348.35 | 285,555,581.80 |
| In total | 589,737,348.35 | 285,555,581.80 |
28. 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 | 42,220,454.37 | 129,794,334.67 | 158,476,573.49 | 13,538,215.55 |
| Two After-service Welfare- Set up ESP liabilities | 1,708,306.39 | 16,697,603.52 | 16,941,858.13 | 1,464,051.78 |
| Three Dismission Welfare | 240,454.26 | 240,454.26 | ||
| In total | 43,928,760.76 | 146,732,392.45 | 175,658,885.88 | 15,002,267.33 |
（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 | 38,119,437.46 | 105,739,879.46 | 133,942,598.44 | 9,916,718.48 |
| 2. Welfare Expense of Employee | 6,920.00 | 3,851,141.03 | 3,817,968.23 | 40,092.80 |
| 3. Social Insurance Expense | 832,783.50 | 9,578,934.23 | 9,801,131.53 | 610,586.20 |
| Among them: Medical Insurance Premiums | 750,291.67 | 8,824,747.29 | 9,025,984.28 | 549,054.68 |
| Industrial Injury Insurance Premiums | 66,211.98 | 559,270.87 | 579,086.94 | 46,395.91 |
| Items | Balance at Beginning of Year | Increase in the Current Period | Decrease in the Current Period | Balance at End of Period |
| Birth Insurance Premiums | 16,279.85 | 162,207.82 | 163,352.06 | 15,135.61 |
| Others | 32,708.25 | 32,708.25 | ||
| 4. Housing Provident Funds | 146,594.49 | 8,349,033.00 | 8,380,862.00 | 114,765.49 |
| 5. Labor Union Expense and Personnel Education Fund | 3,114,718.92 | 2,275,346.95 | 2,534,013.29 | 2,856,052.58 |
| In total | 42,220,454.37 | 129,794,334.67 | 158,476,573.49 | 13,538,215.55 |
（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 | 1,616,949.93 | 14,377,885.25 | 14,609,042.21 | 1,385,792.97 |
| 2. Unemployment Insurance Expense | 42,937.75 | 477,670.30 | 487,651.13 | 32,956.92 |
| 3. Enterprise Annuity Charges | 48,418.71 | 1,842,047.97 | 1,845,164.79 | 45,301.89 |
| Total | 1,708,306.39 | 16,697,603.52 | 16,941,858.13 | 1,464,051.78 |
29. Taxes and Fees Payable
| Items | Balance at End of Period | Balance at Beginning of Year |
| Corporate Income Tax | 12,163,716.53 | 39,893,369.93 |
| VAT | 4,672,877.79 | 18,489,749.05 |
| Urban Maintenance and Construction Tax | 697,085.89 | 1,352,280.58 |
| House Property Tax | 1,003,999.30 | 2,316,064.99 |
| Land Use Tax | 279,642.34 | 150,746.89 |
| Individual Income Tax | 395,864.23 | 2,331,343.41 |
| Educational Surtax | 247,729.15 | 542,273.76 |
| Local Educational Surtax | 217,295.83 | 413,658.90 |
| Stamp Tax | 241,216.09 | 1,135,833.99 |
| Environmental protection tax | 3,162.78 | 3,732.68 |
| In total | 19,922,589.93 | 66,629,054.18 |
30. 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 | 89,161,679.89 | 59,703,587.21 |
| In total | 113,457,778.24 | 83,999,685.56 |
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 | 37,852,852.41 | 18,847,429.40 |
| Intercourse Funds between Units | 33,094,910.72 | 27,733,578.06 |
| Intercourse Funds of Related Parties | 4,401,686.83 | 3,070,641.51 |
| Personal Intercourse Funds | 3,135,810.63 | 3,829,316.55 |
| Various Insurances of Employee | 4,170,279.11 | 2,507,094.75 |
| Others | 6,506,140.19 | 3,715,526.94 |
| In total | 89,161,679.89 | 59,703,587.21 |
31. Non-current liabilities due within one year
| Item | End balance | Beginning balance |
| Current portion of lease liability | 628,515.16 | 1,432,706.14 |
| Total | 628,515.16 | 1,432,706.14 |
32. Other current liability
1.Other current liability statement
| Item | End balance | Beginning balance |
| Sales tax to be transferred | 56,434,136.00 | 56,184,255.30 |
| Total | 56,434,136.00 | 56,184,255.30 |
33. Long term borrowing
| Item | End balance | Beginning balance |
| Credit Loan | 600,000,000.00 | 500,284,166.67 |
| Total | 600,000,000.00 | 500,284,166.67 |
34. Lease liability
| Item | End balance | Beginning balance |
| Lease liability | 1,427,888.14 | 2,216,669.37 |
| Less:Unrecognized financing expenses | 42,115.18 | 79,572.25 |
| Non current liabilities reclassified to maturity within one year | 628,515.16 | 1,432,706.14 |
| Total | 757,257.80 | 704,390.98 |
35. 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 | ||
| Other Long-term Welfare | 5,677,134.00 | 5,677,134.00 |
| In total | 5,677,134.00 | 5,677,134.00 |
36. Deferred Income
| Items | Balance at Beginning of Year | Increase in the Current Period | Decrease in the Current Period | Balance at End of Period | Cause of Formation |
| Government Subsidy | 64,550,917.36 | 1,042,216.25 | 63,508,701.11 | ||
| In total | 64,550,917.36 | 1,042,216.25 | 63,508,701.11 |
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" | 47,374,115.29 | 638,752.08 | 46,735,363.21 | Asset related | ||
| Special subsidy for infrastructure investment | 8,520,037.90 | 8,520,037.90 | Asset related | |||
| The relocation compensation | 3,462,874.32 | 3,462,874.32 | Asset related | |||
| “Oil tank expansion and Winter Transformation Project” subsidy fund | 2,522,657.94 | 125,090.45 | 2,397,567.50 |
| Tianjin Binhai New District’s Industrially Technical Renovation and Park Construction Funds as well as Expenditures for Science and Technology | 1,648,147.97 | 111,111.12 | 1,537,036.84 | Asset related | ||
| Key technology research and industrialization project of "moderate processing" of grain and oil | 622,710.56 | 38,919.42 | 583,791.14 | Asset related | ||
| Construction of provincial grain reserve information management system to form asset entry project | 232,373.66 | 100,343.16 | 132,030.50 | Asset related | ||
| Design of electric heating system for oil tank | 167,999.72 | 28,000.02 | 139,999.70 | Asset related | ||
| In total | 64,550,917.36 | 1,042,216.25 | 63,508,701.11 |
37. Share Capital
| Items | Balance at Beginning of Year | Changes in the Current Period（+、-） | Balance at End of Period | ||||
| New Share Issue | Share Donation | Share Transfer of Provident Fund | Others | Sub-total | |||
1. Shares with
RestrictedConditions
| 1. Shares with Restricted Conditions | 41,159,887.00 | -10,289,972.00 | 30,869,915.00 |
(1) State
Shareholding
| (1) State Shareholding |
(2) State-owned
Legal-personShareholding
| (2) State-owned Legal-person Shareholding |
(3) Other
Domestic CapitalShareholding
| (3) Other Domestic Capital Shareholding | 41,159,887.00 | -10,289,972.00 | 30,869,915.00 |
Including:
DomesticLegal-personShareholding
| Including: Domestic Legal-person Shareholding |
Domestic NaturalPersonShareholding
| Domestic Natural Person Shareholding | 41,159,887.00 | -10,289,972.00 | 30,869,915.00 |
(4) Foreign
Shareholding
| (4) Foreign Shareholding |
| Including: Foreign Legal-person Shareholding |
Foreign NaturalPersonShareholding
| Foreign Natural Person Shareholding |
2. Tradable Shares
without RestrictedConditions
| 2. Tradable Shares without Restricted Conditions | 685,790,364.00 | 10,289,972.00 | 696,080,336.00 |
(1) RMB
Ordinary Shares
| (1) RMB Ordinary Shares | 620,815,364.00 | 10,289,972.00 | 631,105,336.00 |
(2) Domestically
Listed ForeignShares
| (2) Domestically Listed Foreign Shares | 64,975,000.00 | 64,975,000.00 |
(3) Listed Foreign
Shares Overseas
| (3) Listed Foreign Shares Overseas |
(4) Others
| (4) Others |
In total
| In total | 726,950,251.00 | 726,950,251.00 |
38. Capital Reserves
| Items | Balance at Beginning of Year | Increase in the Current Period | Decrease in the Current Period | Balance at End of Period |
| Capital Premium (Stock Premium) | 1,322,887,986.38 | 1,322,887,986.38 | ||
| Capital Reserves Roll-in Under Original System | 112,316,357.36 | 112,316,357.36 | ||
| Other Capital Reserves | 243,474,007.21 | 243,474,007.21 | ||
| In total | 1,678,678,350.95 | 1,678,678,350.95 |
39. 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 | 1,005,720.50 | 730,651.63 | 730,651.63 | 1,736,372.13 | ||||
| 1. Other comprehensive income transferable to profit and loss under the equity method | ||||||||
| 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 | 1,005,720.50 | 730,651.63 | 730,651.63 | 1,736,372.13 | ||||
| Total | 1,005,720.50 | 730,651.63 | 730,651.63 | 1,736,372.13 |
40. Surplus Reserves
| Items | Balance at Beginning of Year | Increase in the Current Period | Decrease in the Current Period | Balance at End of Period |
| Statutory Surplus Reserves | 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 |
41. Undistributed Profit
| Items | Amounts in the Current Period | Amounts in the Prior Period |
| Adjustment on undistributed profit at end of last year | 532,904,675.62 | 391,493,534.34 |
| Items | Amounts in the Current Period | Amounts in the Prior Period |
| Adjustment on total number of undistributed profit at beginning of period (increase+ and decrease-) | ||
| Adjusted undistributed profit at beginning of period | 532,904,675.62 | 391,493,534.34 |
| Add: net profit attributable to parent company in the current period | 73,581,795.36 | 72,587,347.65 |
| Other factor | -23,682.87 | |
| 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 | 606,486,470.98 | 464,080,881.99 |
42. Operation Revenue and Operation Cost
(1)Operation Revenue and Operation Cost
| Items | Amounts in the Current Period | Amounts in the Prior Period | ||
| Revenue | Cost | Revenue | Cost | |
| Prime Business | 4,792,494,443.33 | 4,604,819,197.36 | 5,494,462,329.87 | 5,267,887,989.16 |
| Other Business | 30,739,764.85 | 26,151,271.78 | 18,318,940.45 | 6,476,103.50 |
| In total | 4,823,234,208.18 | 4,630,970,469.14 | 5,512,781,270.32 | 5,274,364,092.66 |
(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 | 4,305,004,934.04 | 4,237,929,626.02 | 5,029,994,012.13 | 4,897,082,807.80 |
| Food Processing | 487,489,509.29 | 366,889,571.34 | 464,468,317.74 | 370,805,181.36 |
| In total | 4,792,494,443.33 | 4,604,819,197.36 | 5,494,462,329.87 | 5,267,887,989.16 |
(3)Prime Business (Region-classified)
| Name of Region | Amounts in the Current Period | Amounts in the Prior Period | ||
| Revenue | Cost | Revenue | Cost | |
| North China | 4,139,917,098.94 | 4,074,148,710.63 | 4,554,123,662.96 | 4,422,630,118.98 |
| East China | 375,856,398.15 | 279,165,994.80 | 364,861,708.51 | 286,122,942.00 |
| Northeast China | 68,978,807.28 | 53,627,460.77 | 70,369,663.99 | 58,672,431.76 |
| South East | 207,742,138.96 | 197,877,031.16 | 505,107,294.41 | 500,462,496.42 |
| In total | 4,792,494,443.33 | 4,604,819,197.36 | 5,494,462,329.87 | 5,267,887,989.16 |
43. Tariff And Annex
| Items | Amounts in the Current Period | Amounts in the Prior Period |
| Items | Amounts in the Current Period | Amounts in the Prior Period |
| Urban Maintenance and Construction Tax | 2,164,523.24 | 5,547,508.14 |
| Educational Surtax | 937,938.89 | 2,383,077.24 |
| Local Educational Surtax | 625,292.57 | 1,588,718.13 |
| House Property tax | 3,040,839.14 | 3,000,706.17 |
| Land Use Tax | 914,015.59 | 810,831.84 |
| Stamp Tax | 3,825,650.53 | 3,643,485.85 |
| Vehicle and Vessel Use Tax | 20,323.53 | 20,909.30 |
| Other Taxes and Fees | 20,090.39 | 20,628.49 |
| In total | 11,548,673.88 | 17,015,865.16 |
44. Sales Expenses
| Items | Amounts in the Current Period | Amounts in the Prior Period |
| Employee Compensation (including social security, etc) | 25,300,609.41 | 29,291,508.50 |
| Sales Promotion Expenses | 7,282,685.02 | 4,055,810.11 |
| Warehousing Fees | 14,257,898.37 | 8,497,141.26 |
| Depreciation | 7,985,937.31 | 7,901,751.09 |
| Material consumption, sample and product cost | 3,712,801.42 | 1,948,756.28 |
| Travel Expenses | 3,070,763.08 | 2,393,868.84 |
| Repair Costs | 115,097.47 | 125,442.17 |
| Handling fees | 146,400.18 | 392,895.96 |
| Water and Electricity Fees | 547,038.39 | 630,075.86 |
| Vehicle Fees | 481,627.88 | 131,919.41 |
| Packing Expenses | 251,296.30 | 53,683.76 |
| Test and Detection Fees | 133,279.64 | 88,133.90 |
| Business Entertainment Expenses | 1,514,904.94 | |
| Others | 13,637,484.20 | 13,677,022.18 |
| Total | 78,437,823.61 | 69,188,009.32 |
45. Administration Expenses
| Items | Amounts in the Current Period | Amounts in the Prior Period |
| Employee Compensation (including social security, etc) | 50,938,225.39 | 50,434,025.42 |
| Amortization of Assets | 13,240,946.13 | 13,005,624.37 |
| Impairment Costs | 3,687,167.40 | 4,327,122.86 |
| Fees of Employing Agent | 3,545,562.82 | 2,920,279.69 |
| Company Expenses | 1,694,907.02 | 1,892,233.41 |
| Repair Costs | 1,485,217.53 | 1,473,228.80 |
| Items | Amounts in the Current Period | Amounts in the Prior Period |
| Lease fee | 1,437,456.70 | 2,080,164.07 |
| Vehicle Fees | 922,140.12 | 1,270,341.36 |
| Information Network Fees | 896,801.93 | 749,443.87 |
| Business Entertainment Expenses | 487,704.84 | 358,026.74 |
| Environmental Protection Fees | 475,656.29 | 640,492.40 |
| Commercial Insurance Expenses | 287,138.08 | 429,123.43 |
| Workers Insurance Expenses | 125,998.48 | 0.00 |
| Security Protection Fees | 822,264.35 | 424,416.84 |
| Labor Protection Fees | 27,309.72 | 190,101.64 |
| Material Consumption | 301,685.55 | 312,740.16 |
| Travel Expenses | 433,247.37 | 83,289.71 |
| Other Expenses | 12,089,152.49 | 7,150,012.92 |
| In total | 92,898,582.21 | 87,740,667.69 |
46. Research and Development Expenses
| Items | Amounts in the Current Period | Amounts in the Prior Period |
| R&D Expenses | 10,262,799.97 | 4,876,642.24 |
| In total | 10,262,799.97 | 4,876,642.24 |
47. Financial Expenses
| Items | Amounts in the Current Period | Amounts in the Prior Period |
| Interest Expenses | 25,265,021.07 | 16,391,856.85 |
| Less: Interest Income | 5,832,452.30 | 6,825,161.06 |
| Exchange Profit and Loss | -2,719,736.45 | -196,022.86 |
| Service Charges | 552,216.18 | 3,198,614.15 |
| In total | 17,265,048.50 | 12,569,287.08 |
48. Other Profits
| Items | Amounts in the Current Period | Amounts in the Prior Period |
| Government Subsidy Related to Daily Corporate Activities | 6,149,861.75 | 6,346,260.64 |
| Return of Service Charges of Withholding Individual Income Tax | 156,397.49 | 92,739.41 |
| Others | 17,955.34 | |
| In total | 6,324,214.58 | 6,439,000.05 |
49. Investment Income
| Items | Amounts in the Current Period | Amounts in the Prior Period |
| Items | Amounts in the Current Period | Amounts in the Prior Period |
| Long-term equity investment income accounted with equity method | 7,012,296.86 | 11,762,199.64 |
| Investment income from disposal of wealth management products | 267,083.33 | |
| Investment income of disposing trading financial asssets | 128,861.80 | |
| Investment income obtained during the holding of transactional financial assets | 169,707.51 | 47,446.09 |
| Others | -2,721.38 | |
| In total | 7,179,282.99 | 12,205,590.86 |
50. Profits on Changes in Fair Value
| Source of generating income with changes in fair value | Amounts in the Current Period | Amounts in the Prior Period |
| Financial assets that are measured as per fair value and for which the changes are included in the current profit and loss | 143,869,459.30 | 49,424,487.23 |
| Including: income with changes in fair value generated by derivative financial instruments | 143,869,459.30 | 49,424,487.23 |
| Trading financial liabilities | ||
| In total | 143,869,459.30 | 49,424,487.23 |
51. Credit impairment loss
| Items | Amounts in the Current Period | Amounts in the Prior Period |
| Accounts receivable bad debt loss | -115,984.57 | -600.00 |
| Other receivables bad debt loss | ||
| Total | -115,984.57 | -600.00 |
52. Assets impairment loss
| 项 目 | Amounts in the Current Period | Amounts in the Prior Period |
| Bad debt loss | ||
| Loss from inventory depreciation and loss from impairment of contract performance costs | -25,186,589.63 | |
| Total | -25,186,589.63 |
53. Assets Disposal Income
| Items | Amounts in the Current Period | Amounts in the Prior Period |
| Gains or losses on disposal of fixed assets | -2,209.46 | 441,741.39 |
| In total | -2,209.46 | 441,741.39 |
54. Non-operating Income
(1) Classification list
| Items | Amounts in the Current Period | Amounts in the Prior Period | Amounts Charged to Non-recurring Profit and Loss |
| 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: | 10,274.33 | 40,746.10 | 10,274.33 |
| Including: fixed assets scrap profit | 10,274.33 | 40,746.10 | 10,274.33 |
| profit from scrap of intangible assets | |||
| Deafult revenue | 3,636,895.41 | 36,613.84 | 3,636,895.41 |
| Non-payable liabilities | 13,284.33 | 13,284.33 | |
| Government Subsidy | 4,502.00 | ||
| Relocation Compensation | 98,808.18 | 354,192.63 | 98,808.18 |
| Other Gains | 144,239.11 | 39,160.87 | 144,239.11 |
| In total | 3,903,501.36 | 475,215.44 | 3,903,501.36 |
55. 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: | 67,613.57 | 16,790.13 | 67,613.57 |
| Including: fixed assets scrap loss | 67,613.57 | 16,790.13 | 67,613.57 |
| intangible assets scrap loss | |||
| Deafult revenue | 65.46 | 96,944.84 | 65.46 |
| Others | 460,301.41 | 244,592.56 | 460,301.41 |
| Total | 527,980.44 | 358,327.53 | 527,980.44 |
56. 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 | 7,333,690.17 | 6,105,743.64 |
| Deferred Income Tax Expenses | 25,184,332.75 | 24,355,678.28 |
| Total | 32,518,022.92 | 30,461,421.92 |
(2) Accounting Profit and Income Tax Expense Adjustment Process
| Items | Amounts in the Current Period | Amounts in the Prior Period |
| Total Profits | 117,294,505.00 | 115,653,813.61 |
| Income tax expenses calculated by statutory/applicable tax rate | 29,323,626.25 | 28,913,453.40 |
| Effect of subsidiary corporations being applicable to different tax rates | -109,569.75 | -465,871.81 |
| Adjustment on effect of income tax in the prior period | 1,348,133.02 | |
| Effect of Non-taxable Incomes | -2,568,992.91 | -2,866,400.51 |
| Effect of Non-deductible cost, expense and loss | 8,614.93 | 17,385.49 |
| Effect of deductible loss on usage of unconfirmed deferred income tax assets in the prior period | -36,728.82 | |
| Effect of deductible temporary difference or deductible loss on unconfirmed deferred income tax in the current period | 5,913,515.30 | 3,795,413.88 |
| Effect of deductions | ||
| Others | -12,442.08 | -280,691.55 |
| Income Tax Expenses | 32,518,022.92 | 30,461,421.92 |
57. Other comprehensive income items and their income tax impact and transferred to profitand loss
See 39 Other Comprehensive Incomes under Section VIII of the Notes for details “Appendix SixNotes on Items in Consolidated Financial Statements,
58. 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 | 879,899,688.90 | 1,092,728,826.43 |
| Intercourse Funds of Other Units | 129,523,949.12 | 77,884,840.10 |
| Non-operating Income and other income | 5,111,702.84 | 5,306,053.12 |
| Interest Income | 2,409,511.39 | 6,708,697.32 |
| Future Margins | 4,937,540.00 | 2,151,049.48 |
| Others | 1,929,648.28 | 4,800,305.29 |
| Total | 1,023,812,040.53 | 1,189,579,771.74 |
(2) Other Cash Payment Related to Operation Activities
| Items | Amounts in the Current Period | Amounts in the Prior Period |
| Intercourse Funds of Related Parties | 41,389,562.45 | 31,495,939.51 |
| Intercourse Funds of Other Units | 693,763,069.50 | 1,581,633,115.17 |
| Payment for Administration Expenses | 54,046,499.12 | 11,211,289.78 |
| Payment for Operating Expenses | 3,013,507.59 | 2,011,580.36 |
| Non-operating Expenses | 3,500,409.16 | 3,173,814.38 |
| Petty Cash Paid | 141,253.83 | 147,809.79 |
| Bank Charges | 369,183.00 | 358,327.53 |
| Others | 3,888,526.01 | 2,740,301.36 |
| In total | 800,112,010.66 | 1,632,772,177.88 |
(3)Other cash payments related to financing activities
| Items | Amounts in the Current Period | Amounts in the Prior Period |
| Lease payment amount | 574,077.78 | |
| In total | 574,077.78 |
59. Supplementary Materials of Cash Flows Statement
(1) Supplementary Materials of Cash Flows Statement
| Supplementary Materials | Amounts in the Current Period | Amounts in the Prior Period |
| 1. Adjusting net accounting profit to operating cash flow | ||
| Net Profit | 84,776,482.08 | 85,192,391.69 |
| Add: Assets Impairment Reserves | 25,186,589.63 | |
| Credit impairment loss | 115,984.57 | 600.00 |
| Fixed Assets Depreciation, Oil-and-gas Assets Depreciation and Productive Biological Assets Depreciation | 50,733,768.46 | 46,068,782.54 |
| Amortization of Intangible Assets | 7,453,613.22 | 7,432,845.06 |
| Amortization of Long-term Deferred Expenses | 549,813.65 | 784,346.16 |
| Losses on Disposal of Fixed Assets, Intangible Assets and Other Long-term Assets (Fill in profit with symbol “－”) | 2,009.46 | -441,741.39 |
| Losses on Retirement of Fixed Assets (Fill in profit with symbol “－”) | 60,624.57 | 16,790.13 |
| Losses on Changes in Fair Value (Fill in profit with symbol “－”) | -143,869,459.30 | -49,424,487.23 |
| Financial Expenses (Fill in profit with symbol “－”) | 17,265,048.50 | 12,569,287.08 |
| Investment Losses (Fill in profit with symbol “－”) | -7,179,282.99 | -12,205,590.86 |
| Decrease in Deferred Income Tax Assets (Fill in increase with symbol “－”) | 934,516.78 | 11,308,682.37 |
| Increase in Deferred Income Tax Reliabilities (Fill in decrease with symbol “－”) | 24,249,815.98 | 12,587,506.31 |
| Decrease in Inventory (Fill in increase with symbol “－”) | -114,286,861.49 | -717,414,422.37 |
| Decrease in Items of Operating Receivables (Fill in increase with symbol “－”) | -360,191,592.16 | -64,104,630.81 |
| Increase in Items of Operating Receivables (Fill in decrease with symbol “－”) | 276,849,383.25 | 493,019,231.89 |
| Others | ||
| Net Cash Flows from Operating Activities | -137,349,545.79 | -174,610,409.43 |
| 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 | 1,251,666,904.81 | 810,888,971.64 |
| Less: cash balance at beginning of period | 551,439,110.07 | 506,928,810.69 |
| 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 | 700,227,794.74 | 303,960,160.95 |
(2) Composition of cash and cash equivalents
| Items | Balance at End of Period | Balance at Beginning of Period |
| 1.Cash | 1,251,666,904.81 | 551,439,110.07 |
| Including: cash in stock | 24,244.79 | 10,693.10 |
| Bank deposit available for payment at any time | 1,204,708,171.25 | 531,515,415.66 |
| Other currency funds available for payment at any time | 46,934,488.77 | 19,913,001.31 |
| Deposits with central bank available for payment | ||
| Interbank deposit | ||
| Interbank placements | ||
| 2.Cash Equivalents | ||
| Including: bond investment maturing within three months | ||
| 3.Balance of Cash and Cash Equivalents at End of Period | 1,251,666,904.81 | 551,439,110.07 |
| Including: restricted cash and cash equivalents used by parent company or intra-group affiliates |
60. Assets with restricted ownership or right to use
| Items | Book Value at End of Period | Reasons being Restricted |
| Investment Real Estate | 5,369,095.43 | Litigation Freeze |
| Fixed Assets | 5,201,543.82 | Litigation Freeze |
| In total | 10,570,639.25 |
61. 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 | 1,957,173.26 | 7.2258 | 14,142,142.55 |
| Including: US Dollars | 1,957,173.26 | 7.2258 | 14,142,142.55 |
| Accounts payable | 587,546.12 | 7.2258 | 4,245,490.73 |
| Including: US Dollars | 587,546.12 | 7.2258 | 4,245,490.73 |
| Other Payable | 1,886,180.38 | 7.2258 | 13,629,162.16 |
| Including: US Dollars | 1,886,180.38 | 7.2258 | 13,629,162.16 |
(2) Instruction of Operational Entity Overseas
The registrant and operating unit of the Company is Beijing Grain (Singapore) International TradeCo., Ltd. with main business place of Singapore and recording currency of US Dollars.
62. Hedging items and related hedging instruments
Please refer to the related content on Derivative financial liability under Section VI (23) of the Notes.
63. Government Subsidies
（1）Basic conditions of government grants
| Type | Amount | Presentation item | Amount recorded in profit and loss |
| VAT refunds | 2,909,904.59 | Other income | 2,909,904.59 |
| Stable post subsidy | 4,207.22 | Other income | 4,207.22 |
| Port of Tianjin Free Trade Zone Development and Reform Bureau in 2020 first to fourth batch of Tianjin energy saving funds | 71,000.00 | Other income | 71,000.00 |
| Special Fund for Intelligent Manufacturing of Science, technology and Industrial Innovation Bureau of Port of Tianjin Free Trade Zone (district level) | 100,000.00 | Other income | 100,000.00 |
| Employment Allowance for the disabled | 75,262.57 | Other income | 75,262.57 |
| Employment subsidy for employment administration in Lin 'an District | 4,500.00 | Other income | 4,500.00 |
| Mayor of Tieling Award for quality (Little Prince of Liaoning province） | 200,000.00 | Other income | 200,000.00 |
| Liaoning small prince expanded potato chip production line new equipment subsidies | 1,304,400.00 | Other income | 1,304,400.00 |
| Liaoning Little Prince New Factory expansion support bonus | 261,643.00 | Other income | 261,643.00 |
| Tax Control System service fee | 840.00 | Other income | 840.00 |
| The credit bureau“Preempt the opportunity, spell the economy” subsidy | 60,000.00 | Other income | 60,000.00 |
| Tax incentives for small and micro enterprises | 1,188.12 | Other income | 1,188.12 |
| Land tax rebates | 101,200.00 | Other income | 101,200.00 |
| Subsidies for recruiting fresh graduates | 13,500.00 | Other income | 13,500.00 |
| “Tianjin Port Industrial Zone Administrative Committee” construction phase of enterprise infrastructure matching grants | 63,130,000.00 | Defer income,other income | 638,752.08 |
| Beijing food and material reserve bureau“Oil tank expansion and Winter Transformation Project” subsidy fund | 2,626,900.00 | Defer income, Other income | 125,090.45 |
| Capital and expenditure on science and technology for industrial and park construction in Binhai New Area | 4,000,000.00 | Defer income, Other income | 111,111.12 |
| Grain and oil“Moderate processing” key technology research and industrialization projects to form fixed assets | 1,089,743.60 | Defer income,other incoe | 38,919.42 |
| The construction of provincial-level grain reserve information management system forms an asset entry project | 633,746.30 | Defer income , other income | 100,343.16 |
| Green and clean production equipment for edible oil and electric heating system for oil tank | 855,179.48 | Defer income, other income | 28,000.02 |
| In total | 77,443,214.88 | 6,149,861.75 |
VII. Change in Consolidation ScopeThere were no changes in the scope of consolidation for the company during the reporting period.VIII. Equities in Other Entities
1. Equities in Subsidiaries
(1) Composition of the Company
| Name of Subsidiary | Principle Place of Business | Registered Place | Nature of Business | Shareholding Ratio (%) | Voting rights ratio (%) | Mode of Acquisition | |
| Direct | Indirect | ||||||
| Beijing Jingliang Food Co., Ltd. | Beijing | Beijing | Investment management | 100 | 100 | Merger under the same control | |
| Jingliang (Tianjin) Grain and Oil Industry Co., Ltd. | Tianjin | Tianjin | Agricultural Product and By Product Processing | 70 | 70 | Merger under the same control | |
| Beijing Jingliang Oil and Fat Co., Ltd. | Beijing | Beijing | Grain and oil trade | 100 | 100 | Merger under the same control | |
| Jingliang (Hebei) Oil Industry Co., Ltd. | Hebei | Hebei | Agricultural Product and By Product Processing | 51 | 51 | Merger under the same control | |
| Beijing Guchuan Edible Oil Co., Ltd. | Beijing | Beijing | Grain and oil trade | 100 | 100 | Merger under the same control | |
| Beijing Eisen-Lubao Oil Co., Ltd. | Beijing | Beijing | Agricultural Product and By Product Processing | 100 | 100 | Merger under the same control | |
| Beijing Tianweikang Oil Distribution Center Co., Ltd. | Beijing | Beijing | Warehousing | 100 | 100 | Merger under the same control | |
| Beijing Guchuan Bread Food Co., Ltd. | Beijing | Beijing | Food Processing | 100 | 100 | Merger under the same control | |
| Zhejiang Xiao Wang Zi Food Co., Ltd. | Hangzhou | Hangzhou | Food Processing | 17.6794 | 77.2072 | 94.8866 | |
| 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 | Linqing | Linqing | Food Processing | 17.6794 | 77.2072 | 94.8866 | Combination not under |
| Name of Subsidiary | Principle Place of Business | Registered Place | Nature of Business | Shareholding Ratio (%) | Voting rights ratio (%) | Mode of Acquisition | |
| Co., Ltd. | 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 | 100 | Establishment by investment | |
| Jingliang (Caofeidian) Agricultural Development Co., Ltd. | Tangshan | Tangshan | Plantation | 51 | 51 | 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 | 65 | 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 | 2,680,698.34 | 54,933,201.02 | |
| Jingliang (Tianjin) Grain and Oil Industry Co., Ltd. | 30.00 | 30.00 | 7,692,000.00 | 291,700,095.75 |
(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 | 689,613,771.26 | 1,769,547,834.10 |
| Non-current Assets | 340,142,967.05 | 720,438,339.29 |
| Items | Ending balance or Amount incurred in the current period | |
| Total Assets | 1,029,756,738.31 | 2,489,986,173.39 |
| Current Liabilities | 98,855,827.71 | 1,030,677,448.23 |
| Non-current Liabilities | 17,660,046.22 | 486,976,623.09 |
| Total Liabilities | 116,515,873.93 | 1,517,654,071.32 |
| Operating Income | 428,413,574.82 | 2,364,528,344.23 |
| Net Profit (Loss) | 46,252,797.77 | 25,638,449.60 |
| Total Comprehensive Income | 46,252,797.77 | 25,638,449.60 |
| Cash Flow from Operating Activities | -2,843,845.04 | 568,809,524.65 |
(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 | 694,319,525.47 | 1,765,160,961.33 |
| Non-current Assets | 344,517,064.82 | 729,047,006.26 |
| Total Assets | 1,038,836,590.29 | 2,494,207,967.59 |
| Current Liabilities | 154,188,477.46 | 1,184,852,881.71 |
| Non-current Liabilities | 17,660,046.22 | 362,661,433.41 |
| Total Liabilities | 171,848,523.68 | 1,547,514,315.12 |
| 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 |
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 | |||||
| 1. Joint Ventures | ||||||
| (1) Beijing Zhengda Feed Co., Ltd. | Beijing | Beijing | Manufacturer | 50.00 | Equity method | |
| 2. Affiliates | ||||||
| (1) SINOGRAIN (Tianjin) Warehousing Logistics Co., Ltd. | Tianjin | Tianjin | Transportation and warehousing | 30.00 | Equity method | |
| (2) Jingliang Misimi food management Co.,Ltd | Beijing | Beijing | Manufacturer | 48.00 | Equity method | |
(2) Important financial information on major joint ventures
| Item | Ending Balance/Current Amount | Beginning Balance/Last Term Amount |
| Beijing Zhengda Feed Co., Ltd. | Beijing Zhengda Feed Co., Ltd. | |
| Current assets | 307,375,930.54 | 301,420,356.94 |
| Including: cash and cash equivalents | 26,707,472.30 | 21,778,758.99 |
| Non-current assets | 20,087,101.50 | 21,331,443.39 |
| Total assets | 327,463,032.04 | 322,751,800.33 |
| Current liabilities | 74,335,955.24 | 75,869,110.91 |
| Non-current liabilities | 3,050,827.76 | 4,593,536.23 |
| Total liabilities | 77,386,783.00 | 80,462,647.14 |
| Minority shareholder's equity | ||
| Shareholders' equity attributable to the parent company | 250,076,249.04 | 242,289,153.19 |
| Share of net assets based on shareholding ratio | 125,038,124.52 | 121,144,576.60 |
| Adjustments | ||
| -- Goodwill | ||
| -- Unrealized profits from internal transactions | ||
| -- Other | -193,288.12 | |
| Book value of equity investment in joint ventures | 124,844,836.40 | 121,144,576.60 |
| Fair value of equity investment in joint ventures with open offers | ||
| Operating income | 164,726,777.97 | 152,840,560.07 |
| Financial costs | -3,959,367.67 | -3,176,445.74 |
| Income tax expense | 2,271,436.27 | 5,728,902.62 |
| Net profit | 6,478,834.60 | 17,186,709.90 |
| Net profit from discontinued operations | ||
| Other comprehensive income | ||
| Total comprehensive income | 6,478,834.60 | 17,186,709.90 |
| Dividends received from affiliates in the current period |
(3) Important financial information on major affiliates
| Item | Ending Balance/Current Amount | Beginning Balance/Last Term Amount |
| SINOGRAIN (Tianjin) Warehousing Logistics Co., Ltd. | SINOGRAIN (Tianjin) Warehousing Logistics Co., Ltd. | |
| Current assets | 52,098,977.43 | 122,303,388.75 |
| Non-current assets | 851,901,950.11 | 816,481,284.48 |
| Total assets | 904,000,927.54 | 938,784,673.23 |
| Current liabilities | 51,839,195.69 | 110,559,868.69 |
| Non-current liabilities | 450,217,363.67 | 438,856,701.56 |
| Total liabilities | 502,056,559.36 | 549,416,570.25 |
| Minority shareholder's equity | ||
| Shareholders' equity attributable to the parent company | 401,944,368.18 | 389,368,102.98 |
| Item | Ending Balance/Current Amount | Beginning Balance/Last Term Amount |
| SINOGRAIN (Tianjin) Warehousing Logistics Co., Ltd. | SINOGRAIN (Tianjin) Warehousing Logistics Co., Ltd. | |
| Share of net assets based on shareholding ratio | 120,583,310.45 | 116,810,430.89 |
| Adjustments | ||
| -- Goodwill | ||
| -- Unrealized profits from internal transactions | ||
| -- Others | -1,303,601.83 | |
| Book value of equity investment in affiliates | 119,279,708.62 | 116,810,430.89 |
| Fair value of equity investment in affiliates with open offers | ||
| Operating income | 31,195,596.27 | 23,237,902.69 |
| Net profit | 12,576,265.20 | 10,562,815.64 |
| Net profit from discontinued operations | ||
| Other comprehensive income | ||
| Total comprehensive income | 12,576,265.20 | 10,562,815.64 |
| Dividends received from affiliates in the current period |
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 instrumentsis to finance the operations of the Company.The Company has a variety of other financial assets andliabilities directly arising from its operations, such as accounts receivable and accounts payable.The main risks caused by the Company's financial instruments are credit risk, liquidity risk andmarket risk.
1. Classification of financial instruments
(1) Book value of various financial assets on the balance sheet date
A. June 30
th
, 2023
| Financial asset items | Financial assets measured at amortized cost | Financial assets measured at fair value and the changes recorded in current profits and losses | Financial assets measured at fair value and the changes recorded in other comprehensive income | Total |
| Monetary funds | 1,251,666,904.81 | 1,251,666,904.81 | ||
| Transactional financial assets | 16,175,691.49 | 16,175,691.49 | ||
| Derivative financial assets | 153,000.00 | 153,000.00 | ||
| Notes receivables | 154,945.01 | 154,945.01 | ||
| Accounts receivables | 94,785,430.75 | 94,785,430.75 | ||
| Other receivables | 438,557,843.89 | 438,557,843.89 | ||
| Investment in other equity instruments | 20,000,000.00 | 20,000,000.00 |
| 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 |
| Current portion of non-current assets | 106,546,505.27 | 106,546,505.27 | ||
| Other current assets | 231,572,760.24 | 231,572,760.24 | ||
| Other non-current assets | 33,895,087.34 | 33,895,087.34 |
B. December 31, 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 | 561,013,109.76 | 561,013,109.76 | ||
| Transactional financial assets | 11,005,983.98 | 11,005,983.98 | ||
| Derivative financial assets | 201,549.12 | 201,549.12 | ||
| Accounts receivables | 77,057,446.86 | 77,057,446.86 | ||
| Other receivables | 444,523,698.48 | 444,523,698.48 | ||
| Investment in other equity instruments | 20,000,000.00 | 20,000,000.00 | ||
| Current portion of non-current assets | 148,387,894.16 | 148,387,894.16 | ||
| Other current assets | 405,999,000.00 | 165,881,137.81 | 571,880,137.81 | |
| Other non-current assets | 53,544,782.34 | 53,544,782.34 |
(2) Book value of various financial liabilities on the balance sheet date
A. June 30th, 2023
B. December 31, 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 | 1,642,308,166.66 | 1,642,308,166.66 | |
| Derivative financial liability | 84,108,320.00 | 84,108,320.00 | |
| Notes Payable | 0.00 | 0.00 | |
| Accounts Payable | 128,731,589.03 | 128,731,589.03 | |
| Other Payables | 113,457,778.24 | 113,457,778.24 | |
| Long term loans | 600,000,000.00 | 600,000,000.00 |
| Financial liability items | Financial liabilities measured at fair value and changes included in current profits and losses | Other financial liability | Total |
| Short term loans | 1,260,543,148.81 | 1,260,543,148.81 | |
| Derivative financial liability | 111,373,155.00 | 111,373,155.00 | |
| Notes payable | 3,331,333.80 | 3,331,333.80 | |
| Accounts payable | 110,911,877.21 | 110,911,877.21 | |
| Other payables | 83,999,685.56 | 83,999,685.56 | |
| Long term loans | 500,284,166.67 | 500,284,166.67 |
2. Credit Risk
On June 30
th
, 2023, the largest credit risk exposure that may cause financial loss to the Companymainly comes from the loss on financial assets of the Company due to the failure of the other party toperform its obligations, including:
Book value of financial assets recognized in the consolidated balance sheet; for a financial instrumentmeasured at fair value, its book value reflects its risk exposure instead of their biggest risk exposure, andits biggest risk 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, setscorresponding credit periods based on customer’s financial position, possibility of obtaining guaranteesfrom third parties, credit records and other factors such as current market conditions and other creditqualifications for customer assessment, and implements other monitoring procedures to ensure thatnecessary measures are taken to recover overdue credits. In addition, the Company reviews the collectionof individual account receivables on each balance sheet date in order to make sufficient provision for baddebts for collectable amounts. Therefore, the Company's management believes that the Company's creditrisk has been greatly reduced.The liquidity funds of the Company are deposited in banks with high credit rating, so the credit risk ofliquidity funds is low.
3. Liquidity Risk
When managing liquidity risk, the Company keeps and monitors adequate cash and cash equivalentsapproved by its management in order to meet the Company's business needs and reduce the influences ofcash flow fluctuations. The Company's management monitors the use of bank loans and ensures theperformance of loan agreements.
Maturity analysis of financial liabilities in terms of undiscounted contractual cash flows:
| Item | June 30th, 2023 | |||
| Within One Year | 1 To 5 Years | Above Five Years | Total | |
| Short term loans | 1,642,308,166.66 | 1,642,308,166.66 | ||
| Derivative financial liability | 84,108,320.00 | 84,108,320.00 | ||
| Notes payable | ||||
| Accounts Payable | 124,107,328.14 | 4,624,260.89 | 128,731,589.03 | |
| Other payables | 113,457,778.24 | 113,457,778.24 | ||
| Long term loans | 600,000,000.00 | 600,000,000.00 | ||
Item
| Item | December 31, 2022 | |||
| Within One Year | 1 To 5 Years | Above Five Years | Total | |
| Short term loans | 1,260,543,148.81 | 1,260,543,148.81 | ||
| Derivative financial | 111,373,155.00 | 111,373,155.00 | ||
(Continued)
4. Market risk
Market risk refers to the risk that the fair value or future cash flow of financial instruments willfluctuate due to the change of market price. Market risk mainly includes interest rate risk, foreignexchange risk and other price risks, 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 floatinginterest rates bring the Company the interest rate risk on cash flow, while the financial liabilities at fixedinterest rates bring the Company the interest rate risk on fair value. The Company decides the relativeproportion of fixed interest rate contracts and floating interest rate contracts according to the currentmarket environment.
As of June 30th, 2023, the Company's interest-bearing liabilities under floating rate contractsdenominated in RMB amounted to RMB 1,248,197,500.00 and those under fixed rate contractsdenominated in RMB amounted to RMB 992,930,000.00.
(2) Exchange Rate Risk
The risk of foreign exchange changes faced by the company is mainly related to the company'soperating activities (when the income and expenditure are settled in a foreign currency different from therecording currency of the company) and its net investment in overseas subsidiaries. The company'sexposure to foreign exchange risk is mainly related to US dollars. Except that some subsidiaries of thecompany purchase and sell in US dollars, other major business activities of the company are priced andsettled in RMB. As of June 30, 2023, the assets and liabilities of the company are all RMB balances,except that the assets or liabilities described in the following table are USD balances. The foreignexchange risk arising from the assets and liabilities of such foreign currency balance may have an impacton the operating performance of the company.
| Items | Ending Balance | Beginning Balance |
| Monetary funds | 14,142,142.55 | 26,078,226.16 |
| Prepayments | 4,245,490.73 | |
| Short term borrowings | 208,938,000.00 | |
| Other Payable | 13,629,162.16 |
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 andpossible changes of risk variables on current profit and loss or owner's equity. Since any risk variablerarely changes in isolation, and the correlation between variables will have a significant effect on the finalimpact amount of a risk variable change, the following contents are carried out on the assumption that thechange of each variable is independent.
On the assumption that foreign currency assets and foreign currency liabilities remain relatively stableand other variables remain unchanged, the after tax impact of possible reasonable changes in exchange rateon current profit 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% | 237,923.56 | 237,923.56 |
Item
| Item | December 31, 2022 | |||
| Within One Year | 1 To 5 Years | Above Five Years | Total | |
| liability | ||||
| Notes payable | 3,331,333.80 | 3,331,333.80 | ||
| Accounts payable | 106,405,184.62 | 4,506,692.59 | 110,911,877.21 | |
| Other Payables | 83,999,685.56 | 83,999,685.56 | ||
| The yuan appreciated against the US dollar | -5% | -237,923.56 | -237,923.56 |
| 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% | -38,998,793.58 | -38,998,793.58 |
| The yuan appreciated against the US dollar | -5% | 38,998,793.58 | 38,998,793.58 |
X. Disclosure of Fair Values
1. Fair values of assets and liabilities measured at fair value at the end of the period
| Item | Fair Values at the End of the Period | |||
| First Level Fair Value Measurement | Second Level Fair Value Measurement | Third Level Fair Value Measurement | Total | |
| One. Continuous fair value measurement | ||||
| Ⅰ. Transactional financial assets | 16,175,691.49 | 0.00 | 0.00 | 16,175,691.49 |
| 1. Financial assets that are measured at fair value and whose changes are included in the current profits and losses | 16,175,691.49 | 0.00 | 0.00 | 16,175,691.49 |
| (1) Investment in debt instruments | 16,175,691.49 | 16,175,691.49 | ||
| (2) Investment in equity instruments | 0.00 | |||
| (3) Derivative financial assets | 0.00 | |||
| 2. Financial assets designated as fair value through profit or loss | 0.00 | |||
| (1) Investment in debt instruments | 0.00 | |||
| (2) Investment in equity instruments | 0.00 | |||
| (3) Others | 0.00 | |||
| Ⅱ. Other debt investment | 0.00 | |||
| Ⅲ. Investment in other equity instruments | 20,000,000.00 | 20,000,000.00 | ||
| Total assets continuously measured at fair value | 16,175,691.49 | 0.00 | 20,000,000.00 | 36,175,691.49 |
| Ⅵ.Transactional financial liabilities | 84,108,320.00 | 0.00 | 0.00 | 84,108,320.00 |
| 1. Financial liabilities measured at fair value with changes included in current profits and losses | 84,108,320.00 | 0.00 | 0.00 | 84,108,320.00 |
| Including: transactional bonds issued | 0.00 | |||
| derivative financial liability | 84,108,320.00 | 84,108,320.00 | ||
| others | 0.00 | |||
| 2. Financial liabilities designated as fair value through profit or loss | 0.00 | |||
| Total liabilities continuously measured at fair value | 84,108,320.00 | 0.00 | 0.00 | 84,108,320.00 |
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 thefutures exchange 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 valuationtechniques and qualitative and quantitative information of important parameters
The company‘s investment in other equity instruments of the third level fair value measurementproject is the ”three noes“ equity investment that without control, joint control and significant influenceheld by the company. On the basis of analyzing the operation status of the invested enterprise andcombining with relevant situations, the company takes the investment cost as the fair value of other equityinstrument investment for measurement at the end of the period.
XI. Related Parties and Related-Party Transactions
1. Identification criteria of related parties
If one party controls, jointly controls or exerts significant influence on the other party, and two ormore parties are controlled, jointly controlled or significantly influenced by the same party, they constituterelated parties.
2. Parent Company of the Company
| Name of Parent Company | Company type | Registered Place | Legal representative | Nature of Business | Registered Capital (ten thousand Yuan) |
| Beijing Grain Group Co. Ltd. | Wholly state-owned enterprise | Beijing | 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 | 91110000700224507H |
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 Liubiju Foods Co.,Ltd | Controlled by the ultimate controlling party |
| Shanghai Shounong Investment Holding Co.,Ltd | Controlled by the ultimate controlling party |
| Beijing Sanyuan Seed Industry Technology Co.,Ltd | Controlled by the ultimate controlling party |
| Beijing Dahongmen Grain Storage Co.,Ltd | Controlled by the ultimate controlling party |
| Beijing Gushun Foods Co.,Ltd | Controlled by the ultimate controlling party |
| Name of Other Related Party | Relationship with the Company |
| Hebei Sanyuan Foods Co.,Ltd | Controlled by the ultimate controlling party |
| Beijing Jingliang E-commerce Co.,Ltd | Controlled by the ultimate controlling party |
| Beijing Hundred Years Chestnut Garden Ecological Agriculture Co.,Ltd | Controlled by the ultimate controlling party |
| Beijing Sanyuan Foods Co.,Ltd | Controlled by the ultimate controlling party |
| Beijing Ershang Dahongmen Wulinlian Food Co.,Ltd | Controlled by the ultimate controlling party |
| Beijing Heiliu Herding Technology Co.,Ltd | Controlled by the ultimate controlling party |
| Beijing Ancient Boat Rice Co.,Ltd | Controlled by the ultimate controlling party |
| Hebei Luanping Huadu Food Co.,Ltd | Controlled by the ultimate controlling party |
| Beijing Shucheng Shanshui Real Estate Co.,Ltd | Controlled by the ultimate controlling party |
| Beijing Bai Jiayi Food Co.,Ltd | Controlled by the ultimate controlling party |
| Beijing Baofeng Vegetable Distribution Co.,Ltd | Controlled by the ultimate controlling party |
| Beijing Jingliang Dongfang Grain and Oil Trading Co.,Ltd | Controlled by the ultimate controlling party |
| Beijing Zhangxin Grain Reserve Co.,Ltd | Controlled by the ultimate controlling party |
| Beijing Haidian Xijiao Grain and Oil Supply Station Co.,Ltd | Controlled by the ultimate controlling party |
| Beijing No.34 Food Supply Department Co.,Ltd | Controlled by the ultimate controlling party |
| Beijing Shounong Dot-to-Dot E-commerce Co.,Ltd | Controlled by the ultimate controlling party |
| Beijing Grain Group Co.,Ltd | Controlled by the ultimate controlling party |
| Beijing Shounong Commercial Chain Co.,Ltd | Controlled by the ultimate controlling party |
| Beijing Wuhuan Shuntong Supply Chain Management Co.,Ltd | Controlled by the ultimate controlling party |
| Beijing Shounong Consumption and Poverty Alleviation Double Creation Center Co.,Ltd | Controlled by the ultimate controlling party |
| Beijing Yunong Quality Agricultural Products Cultivation Co.,Ltd | Controlled by the ultimate controlling party |
| Beijing Shounong Taste Group Co.,Ltd | Controlled by the ultimate controlling party |
| Beijing Ershang Xijie Food Co.,Ltd | Controlled by the ultimate controlling party |
| Beijing Wang Zhihe Food Co.,Ltd | Controlled by the ultimate controlling party |
| Hebei Shounong Modern Agriculture Technology Co.,Ltd | Controlled by the ultimate controlling party |
| Shanghai Shounong Commercial Management Co.,Ltd | Controlled by the ultimate controlling party |
| Beijing Shounong Food Group Finance Co.,Ltd | Controlled by the ultimate controlling party |
| Beijing Shounong Food Group Co.,Ltd | Controlled by the ultimate controlling party |
| Shandong Fukuan Biological Engineering Co.,Ltd | Controlled by the ultimate controlling party |
| Chengde Sanyuan Jinxing Duck Industry Co.,Ltd | Controlled by the ultimate controlling party |
| Beijing Xinderun Agricultural Tourism Development Co.,Ltd | Controlled by the ultimate controlling party |
| Beijing Ailai Fahi Foods Co.,Ltd | Controlled by the ultimate controlling party |
| Name of Other Related Party | Relationship with the Company |
| Beijing North Beijing Sugar & Wine Sales Co.,Ltd | Controlled by the ultimate controlling party |
| Beijing Ershang Yiho Sunshine Real Estate Co.,Ltd | Controlled by the ultimate controlling party |
| Beijing Shounong Big Kitchen Supply Chain Management Group Co.,Ltd | Controlled by the ultimate controlling party |
| Beijing Jinggou Taiyu Real Estate Co.,Ltd | Controlled by the ultimate controlling party |
| Beijing Municipal Grain Research Institute Co.,Ltd | Controlled by the ultimate controlling party |
| Beijing Jinggong Lugu Trading Co.,Ltd | Controlled by the ultimate controlling party |
| Beijing Jiefang Grain & Oil Supply Co.,Ltd | Controlled by the ultimate controlling party |
| Beijing Jinggong Logistics Co.,Ltd | Controlled by the ultimate controlling party |
| Beijing Sanjiadian Grain Storage Co.,Ltd | Controlled by the ultimate controlling party |
| Beijing Hongyuan Lijun Grain and Oil Supply Co.,Ltd | Controlled by the ultimate controlling party |
| Beijing Jingliang Canal Grain and Oil Trading Co.,Ltd | Controlled by the ultimate controlling party |
| Beijing Jingjing Jingu Grain Purchasing and Marketing Co.,Ltd | Controlled by the ultimate controlling party |
| Beijing Sons and Daughters Grain and Oil Supply Co.,Ltd | Controlled by the ultimate controlling party |
| Beijing Longqing Xadu Military Grain Supply Co.,Ltd | Controlled by the ultimate controlling party |
| Beijing Desheng Hotel Co.,Ltd | Controlled by the ultimate controlling party |
| Beijing Shuangtong Huihe Agricultural Science and Technology Development Co.,Ltd | Controlled by the ultimate controlling party |
| Beijing Shounong Xiangshan Conference Center Co.,Ltd | Controlled by the ultimate controlling party |
| Beijing Beijiao Farm Co.,Ltd | Controlled by the ultimate controlling party |
| Beijing Yanqing Farm Co.,Ltd | Controlled by the ultimate controlling party |
| Beijing Longmen Vinegar Co.,Ltd | Controlled by the ultimate controlling party |
| Beijing Jingliang Biotechnology Group Co.,Ltd | Controlled by the ultimate controlling party |
| Tianjin Xincheng Kanda Pharmaceutical Co.,Ltd | Controlled by the ultimate controlling party |
| Beijing Xing Fashion Trade Co.,Ltd | Controlled by the ultimate controlling party |
| Beijing Taoshan Grain Reserve Co.,Ltd | Controlled by the ultimate controlling party |
| Beijing Shenghua Sihe Asset Management Co.,Ltd | Controlled by the ultimate controlling party |
| Beijing Municipal Grain Co.,Ltd | Controlled by the ultimate controlling party |
| Beijing Shounong Grain Reserve Co.,Ltd | Controlled by the ultimate controlling party |
| Beijing Shounong Grain Reserve Co.,Ltd | Controlled by the ultimate controlling party |
| Beijing Shounong Food Emergency Security Center Co.,Ltd | Controlled by the ultimate controlling party |
| Beijing Yue Sheng Zhai Halal Food Co.,Ltd | Controlled by the ultimate controlling party |
| Beijing Yanqi Yue Sheng Zhai Halal Food Co.,Ltd | Controlled by the ultimate controlling party |
6. Related-party Transactions
A. Related-party transactions for purchasing and saling goods and provision and acceptance of
labor services
(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 | 3,134.00 | 7,719.00 |
| Beijing Beishui Food Industry Co., Ltd | Purchase of goods | 75,781.00 | |
| Beijing ershang Dahongmen five meat Co., Ltd | Purchase of goods | 343,499.50 | |
| Beijing ershang Mochi Zhonghong Food Co., Ltd | Purchase of goods | 3,927.00 | 32,992.00 |
| Beijing ershang mu xiang yuan Qing zhen Meat Food Group Co., Ltd | 6,508.00 | ||
| Beijing ershang Meat Food Group Co., Ltd | Purchase of goods | 1,695.00 | 182,656.94 |
| Beijing Guchuan Rice Industry Co., Ltd | Purchase of goods | 1,203,330.50 | 139,190.30 |
| Beijing Guchuan Food Co., Ltd | Purchase of goods | 6,462,585.18 | 6,374,564.09 |
| Beijing heiliu animal husbandry technology Co., Ltd | Purchase of goods | 127,762.40 | 15,387.50 |
| Food center of Beijing heiliu animal husbandry technology Co., Ltd | Purchase of goods | 8,950.60 | 10,153.30 |
| Beijing Huadu liquor Marketing Co., Ltd | Purchase of goods | 19,476.00 | 13,200.00 |
| Beijing Huayu Food Co.,Ltd | Purchase of goods | 55,416.00 | |
| Beijing Jingliang Dongfang grain and Oil Trading Co., Ltd | Purchase of goods | 109,950.98 | 251,745.52 |
| Beijing Liubiju Food Co., Ltd | Purchase of goods | 10,740.00 | 3,304.00 |
| Beijing Nan jiao agriculture production management Co., Ltd | Purchase of goods | 2,810.00 | |
| Beijing Sanyuan Food Co., Ltd | Purchase of goods | 189,648.00 | 100,874.00 |
| Beijing shounong diandao technology business Co.,Ltd | Purchase of goods | 300.00 | |
| Beijing Shounong Consumer Support Shuangchuang Center Co. , Ltd. | Purchase of goods | 4,405.00 | |
| Beijing Shuangtong Huihe Agricultural Science and Technology Development Co. , Ltd. | Purchase of goods | 732.00 | |
| Beijing sugar industry tobacco and Liquor Group Co. , Ltd. | Purchase of goods | 19,646.02 | 678.90 |
| Beijing Yanqi Yueshengzhai Halal Food Co. , Ltd. | Purchase of goods | 232,494.60 | 993,596.60 |
| Beijing Yueshengzhai Halal Food Co. , Ltd. | Purchase of goods | 116.10 | |
| Shandong Fukuan Biological Engineering Co. , Ltd. | Purchase of goods | 679,424.79 | 489,983.19 |
| Shanghai Shounong Investment Holding Co. , Ltd. | Purchase of goods | 174,185,557.44 | |
| Chengde Sanyuan Jinxing Duck Industry Co. , Ltd. | Purchase of goods | 900.00 | |
| Beijing North Water Food Industry Co. , Ltd. | Purchase of goods | 11,990.50 |
| Beijing Ershang Jinghua Tea Industry Co. , Ltd. | Purchaseof goods | 10,395.00 | |
| Beijing First Agricultural Flavor Group Co. , Ltd | Purchaseof goods | 22,074.11 | |
| Beijing Sanyuan Meiyuan Food Co. , Ltd. | Purchase of goods | 66,477.60 | |
| Yu Nong High Quality Agricultural Products Co. , Ltd. . Huairou District Branch | Purchase of goods | 2,850.00 | |
| Total | 183,743,485.11 | 8,735,137.55 |
(2) Sale of goods/ provision of labor services
| Related Party | Related-party Transaction | Current Amount | Last Term Amount |
| Beijing Alai Faxi Food Co. , Ltd. | Sale of goods | 83,096.00 | 21,240.00 |
| Beijing Baijiayi Food Co. , Ltd. | Sale of goods | 2,028,592.00 | 588,600.00 |
| Beijing North Beijing Sugar Foreign Wine Sales Co. , Ltd. | Sale of goods | 15,851.00 | 25,597.00 |
| Beijing Ershang Dahongmen Wulian Food Co. , Ltd | Sale of goods | 10,807.00 | |
| Beijing Ershang Jinghua Tea Industry Co. , Ltd. | Sale of goods | 706.42 | |
| Beijing Ershang Meat Food Group Co. , Ltd | Sale of goods | 24,000.00 | 23,400.00 |
| Beijing Guchuan Rice Industry Co. , Ltd | Sale of goods | 77,187.02 | 154,817.50 |
| Beijing Guchuan Food Co. , Ltd | Sale of goods | 184,647.44 | 1,083,679.52 |
| Beijing Jingliang Dongfang grain and Oil Trading Co. , Ltd | Sale of goods | 1,578,881.67 | 2,807,978.31 |
| Beijing Jingliang Biotechnology Group Co. , Ltd | Sale of goods | 660.55 | |
| Beijing Jingliangtaiyu Real Estate Co. , Ltd | Sale of goods | 111,600.00 | |
| Beijing Jingdingsheng Sugar Trading Co. , Ltd | Sale of goods | 6,927.00 | |
| Beijing luanfeng Vegetable Distribution Co. , Ltd | Sale of goods | 286,494.00 | 448,590.00 |
| Beijing Liubiju Huairou District BreweryCo., Ltd | Sale of goods | 6,684,323.12 | 3,159,049.53 |
| Beijing Nanjiao Agricultural Production Management Co. , Ltd. | Sale of goods | 18,470.00 | |
| Beijing Sanjiadian Grain Storage Co. , Ltd | Sale of goods | 99,456.00 | |
| Beijing Sanyuan Food Co. , Ltd | Sale of goods | 151,170.00 | 107,695.00 |
| Beijing Sanyuan Seed Industry Science and Technology Co. , Ltd. . Feed branch | Sale of goods | 29,995,064.69 | 26,720,100.70 |
| Beijing Beijiao Farm Co. , Ltd | Sale of goods | 3,080.00 | 5,818.00 |
| Beijing Haidian District Xijiao Grain and Oil Supply Station Co. , Ltd | Sale of goods | 1,738,000.00 | 2,820,200.00 |
| Beijing Kyoto Kanaya Grain Purchasing and Marketing Co. , Ltd. | Sale of goods | 655,540.00 | |
| Beijing Academy of Grain Science Co. , Ltd | Sale of goods | 1,700.00 | 830.00 |
| Beijing Longqing Xiadu Military Food Supply Co. , Ltd | Sale of goods | 284,000.00 | 458,000.00 |
| Beijing Food Supply Office No. 34 Supply Department Co. , Ltd | Sale of goods | 1,488,023.46 | 1,007,533.90 |
| Beijing Yanqing District Farm Co. , Ltd | Sale of goods | 3,000.00 | 14,998.35 |
| Beijing Zhangxin Grain Reserve Co. , Ltd | Sale of goods | 1,356,413.11 | |
| Beijing Changyang Farm Co. , Ltd | Sale of goods | 148,928.65 | |
| Beijing Shoucheng Landscape Property Co. , Ltd | Sale of goods | 45,720.00 | 114,935.00 |
| Beijing first agricultural point to Network e-commerce Co. , Ltd | Sale of goods | 126,210.49 | 250,655.29 |
| Beijing First Agricultural Development Co. , Ltd | Sale of goods | 30,838.00 | 12,739.00 |
| Beijing Shounong Commercial Chain Co. , Ltd. . Yanqing District Branch | Sale of goods | 81,163.00 | 29.55 |
| Beijing Shounong Food Group Co. , Ltd | Sale of goods | 38,354.49 | 27,269.73 |
| Beijing shounong Xiangshan Convention Center Co. , Ltd | Sale of goods | 42,750.00 | 7,560.00 |
| Beijing Shounong Consumer Support Shuangchuang Center Co. , Ltd | Sale of goods | 5,309,640.00 | 6,262,107.00 |
| Beijing Shuangtong Huihe Agricultural Science and Technology Development Co. , Ltd | Sale of goods | 31,225.00 | |
| Beijing Momoyama Grain Reserve Co. , Ltd | Sale of goods | 15,484.00 | 13,073.39 |
| Beijing First Agricultural Flavor Group Co. , Ltd | Sale of goods | 15,469,952.89 | 31,138,627.74 |
| Beijing Wuhuan Shuntong Supply Chain Management Co. , Ltd | Sale of goods | 570,548.64 | 2,393,912.53 |
| Beijing Xing Fashion Trading Co. , Ltd | Sale of goods | 13,073.39 | 9,357.80 |
| Hebei Anping Dahongmen Food Co. , Ltd | Sale of goods | 621,651.37 | |
| Hebei Luanping Huadu Food Co. , Ltd. | Sale of goods | 21,221,360.94 | 8,703,134.00 |
| Hebei Sanyuan Food Co. , Ltd | Sale of goods | 994,300.00 |
| Hebei Shounong Modern Agricultural Technology Co. , Ltd | Sale of goods | 7,153,219.41 | 10,909,242.63 |
| Shanghai Shounong Investment Holding Co. , Ltd | Sale of goods | 216,123,328.83 | 101,524,844.91 |
| Tianjin Xincheng Kangda Pharmaceutical Co. , Ltd | Sale of goods | 610.00 | |
| Beijing Ershang Xijie Food Co. , Ltd | Sale of goods | 1,701,284.40 | |
| Beijing Ershang Jardine Sunshine Property Co. , Ltd | Sale of goods | 49,620.00 | |
| Beijing Hongyuan Li military food and Oil Supply Co. , Ltd | Sale of goods | 221,000.00 | |
| Beijing Jingliang Logistics Co. , Ltd | Sale of goods | 92,140.00 | |
| Beijing Jingliang Canal Grain and Oil Trading Co. , Ltd | Sale of goods | 38,502.00 | |
| Beijing Longmen Vinegar Industry Co. , Ltd. | Sale of goods | 201.83 | |
| Beijing Desheng Hotel Co. , Ltd | Sale of goods | 73,930.00 | |
| Beijing Zi di Bing Grain and Oil Supply Co. , Ltd. | Sale of goods | 1,952,000.00 | |
| Beijing Zhujun Grain and Oil Supply Co. , Ltd | Sale of goods | 1,893,933.20 | |
| Beijing Xinderun Agricultural Tourism Development Co. , Ltd | Sale of goods | 59,659.36 | |
| Beijing Yunong high-quality Agricultural Products Co. , Ltd. . Daxing branch | Sale of goods | 59,975.70 | |
| Yu Nong High Quality Agricultural Products Co. , Ltd. . Huairou District Branch | Sale of goods | 171,074.00 | |
| Beijing Shounong Oriental Food Supply Chain Management Group Co. , Ltd | Sale of goods | 1,038,926.00 | |
| Shanghai Shounong Investment Holding Co. , Ltd | Provision of services | 4,677,494.81 | 671,924.51 |
| Beijing Capital Agricultural Food Group Co., Ltd. | Provision of services | 11,438,400.93 | |
| Total | 331,041,945.32 | 208,839,787.38 |
Related-party transactions for purchasing and saling goods and provision and acceptance of laborservices: The price of a related-party transaction shall be equal to the price charged for a unrelated-partytransaction that is same as 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 |
| 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 First Agricultural Development Co. , Ltd. | House leasing | Market price | 1,774,606.64 | |
| Beijing Dahongmen Grain Storage Co. , Ltd. | House leasing | Market price | 311,324.36 | 327,298.99 |
| Beijing shounong Food Emergency Support Center Co. , Ltd | House leasing | Market price | 1,312,500.00 | 1,147,575.39 |
| Beijing Nanyuan Vegetable Oil Factory Co. , Ltd | House leasing | Market price | 323,809.52 | |
| Total | 1,947,633.88 | 3,249,481.02 |
C.Other relative transaction
| Related parties | Nature of related party transcations | Current Amount | Last Term Amount |
| Beijing Grain Group Co. , Ltd. | Electricity and telephone charges | 2,768.48 | |
| Beijing Dahongmen Grain Storage Co. , Ltd. | Electricity, cleaning, Internet usage | 38,018.00 | 35,177.08 |
| Beijing Haidian District Second Commercial Vocational Skills Training School | Training fees | 1,650.00 | |
| Beijing Shounong Development Co., Ltd. | Electricity and telephone charges | 1,237.69 | 5,755.81 |
| Beijing shounong Food Emergency Support Center Co. , Ltd. | Electricity charges, pound charges | 63,518.42 | 104,497.20 |
| Beijing shounong Xiangshan Convention Center Co. , Ltd. | Training Fee, conference fee | 4,433.97 | |
| Subtotal | 111,626.56 | 145,430.09 |
D.Remuneration for key management staff
| Item | Current Amount (Unit: ten thousand yuan) | Last Term Amount (Unit: ten thousand yuan) |
| Remuneration for Key Management Staff | 223.83 | 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 | 978,765,297.11 | 339,487,166.55 | ||
| Total | 978,765,297.11 | 339,487,166.55 | |||
| Receivables | Shanghai Shounong Investment Holding Co. , Ltd | 19,432,675.33 | |||
| Hebei Luanping Huadu Food Co. , Ltd | 3,565,820.80 | 3,548,214.00 | |||
| Beijing Sanyuan Seed Industry Science and Technology Co. , Ltd. . Feed branch | 3,288,386.72 | 2,056,939.44 | |||
| Beijing Shounong Consumer Support Shuangchuang Center Co. , Ltd | 1,986,690.00 | 1,737,500.00 | |||
| Hebei Shounong Modern Agricultural Technology Co. , Ltd | 1,294,453.94 | ||||
| Hebei Anping Dahongmen Food Co. , Ltd | 483,200.00 | ||||
| Beijing Zhangxin Grain Reserve Co. , Ltd | 481,320.00 | 665,000.00 | |||
| Beijing Jingliang Dongfang grain and Oil Trading Co. , Ltd | 344,135.00 | 1,198,484.00 | |||
| Beijing Food Supply Office No. 34 Supply Department Co. , Ltd | 309,996.00 | 279,035.00 | |||
| Beijing Baijiayi Food Co. , Ltd | 179,400.00 | 180,695.00 | |||
| Beijing Sanyuan Food Co. , Ltd | 127,200.00 | ||||
| Beijing Longqing Xiadu Military Food Supply Co. , Ltd | 84,000.00 | ||||
| Beijing luanfeng Vegetable Distribution Co. , Ltd | 53,600.00 | 84,200.00 | |||
| Beijing First Agricultural Development Co. , Ltd | 38,663.00 | ||||
| Beijing Wuhuan Shuntong Supply Chain Management Co. , Ltd | 18,245.50 | ||||
| Beijing Shoucheng Landscape Property Co. , Ltd | 17,610.00 | 33,355.00 | |||
| Huairou District Brewery | 13,080.00 | ||||
| Beijing Alai Faxi Food Co. , Ltd | 10,265.00 | ||||
| Beijing Nanjiao Agricultural Production Management Co. , Ltd | 3,270.00 | ||||
| Beijing North Beijing Sugar Foreign Wine Sales Co. , Ltd | 2,618.00 | ||||
| Beijing Jingdingsheng Sugar Trading Co. , Ltd | 380.00 | ||||
| Beijing Guchuan Rice Industry Co. , Ltd | 285.00 | ||||
| Beijing Guchuan Food Co. , Ltd | 82,800.00 | ||||
| Beijing Haidian District Xijiao Grain and Oil Supply Station Co. , Ltd | 82,500.00 | ||||
| Beijing first agricultural point to Network e-commerce Co. , Ltd | 95,120.40 | ||||
| Hebei Sanyuan Food Co. , Ltd | 1,685,000.00 |
| Beijing Yunong high-quality Agricultural Products Co. , Ltd | 3,120.00 | ||||
| Total | 31,735,294.29 | 11,731,962.84 | |||
| Prepaid Expenses | Shanghai Shounong Investment Holding Co. , Ltd | 379,840,707.34 | |||
| Beijing Academy of Grain Science Co. , Ltd | 16,400,000.00 | ||||
| Beijing Huadu Liquor Marketing Co. , Ltd | 13,200.00 | ||||
| Beijing Wang Zhihe Food Co. , Ltd | 96.00 | ||||
| Total | 396,254,003.34 | ||||
| Other receivebles | Beijing Dahongmen Grain Storage Co. , Ltd | 55,232.00 | 55,232.00 | ||
| Beijing Guchuan Rice Industry Co. , Ltd | 50,000.00 | 50,000.00 | |||
| Total | 105,232.00 | 105,232.00 |
(2) Payables
| Item | Related-party | Ending Balance | Beginning balance |
| Contract liability | Shanghai Shounong Investment Holding Co. , Ltd | 3,614,532.86 | 3,448,410.37 |
| Beijing Shoucheng Landscape Property Co. , Ltd | 29,350.00 | ||
| Beijing First Agricultural Development Co. , Ltd. | 21,500.00 | ||
| Beijing Jingliang Dongfang grain and Oil Trading Co. , Ltd | 15,088.20 | 15,088.20 | |
| Beijing Wuhuan Shuntong Supply Chain Management Co. , Ltd | 3,192.54 | 3,192.54 | |
| Beijing Liubiju Food Co. , Ltd | 59,300.00 | ||
| Beijing Shounong Commercial Chain Co. , Ltd | 293.20 | ||
| Total | 3,683,663.60 | 3,526,284.31 | |
| Payables | Beijing shounong Food Emergency Support Center Co. , Ltd | 1,312,500.00 | |
| Beijing Guchuan Food Co. , Ltd | 244,537.59 | 240,000.00 |
| Beijing Guchuan Rice Industry Co. , Ltd | 21,284.40 | ||
| Beijing Sanyuan Food Co. , Ltd | 18,134.16 | 50.48 | |
| Beijing Jingliang Dongfang grain and Oil Trading Co. , Ltd | 10,012.00 | ||
| Beijing Liubiju Food Co. , Ltd | 5,789.39 | ||
| Beijing Huayu Food Co. , Ltd | 546.00 | ||
| Beijing Heiliu Animal Husbandry Technology Co. , Ltd | 397.20 | ||
| Beijing Heiliu Animal Husbandry Technology Co. , Ltd | 372.00 | 2,826.00 | |
| Beijing Alai Faxi Food Co. , Ltd | 309.73 | ||
| Beijing Ershang Dahongmen Wulian Food Co. , Ltd | 96.79 | 19,115.04 | |
| Beijing Wang Zhihe Food Co. , Ltd | 84.96 | ||
| Beijing Nanjiao Agricultural Production Management Co. , Ltd | 75.00 | ||
| Beijing century Li Yuan Ecological Agriculture Co. , Ltd | 110.00 | ||
| Total | 1,614,139.22 | 262,101.52 | |
| Other payables | Beijing Grain Group Co. , Ltd | 3,442,750.30 | 2,862,750.30 |
| Beijing Guchuan Food Co. , Ltd | 751,045.33 | ||
| Hebei Sanyuan Food Co. , Ltd | 140,000.00 | 140,000.00 | |
| Beijing Jingliang Electronic Commerce Co. , Ltd | 67,891.20 | 67,891.21 | |
| Total | 6,015,826.05 | 3,332,743.03 |
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 ContingenciesBy the end of the reporting period, the amount of guarantee of the company and its holding subsidiaryhad been approved was 5.788 billion yuan, and the actual amount of guarantee of the company and itsholding subsidiaries was 1.185 billion yuan, accounting for the company's recent audit of the proportion ofthe net assets belonging to the parent company is 37.79% , are between the company and the holdingsubsidiary of the guarantee. There is no guarantee provided by the company and its holding subsidiary to
the entity outside the consolidated statement. There is no guarantee for the company beyond the time limit,the guarantee involving litigation and the loss due to the judgment of losing litigation.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 needto be disclosed.XV. Other Important Matters
1. Annuity Plan
Basic information of annuity: Beijing Jingliang Food Co., Ltd., Beijing Guchuan Oil Co., Ltd.,Beijing Essen Lubao 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 CenterCo., Ltd. participated in the enterprise annuity scheme of Beijing shounong Food Group Co., Ltd, Toformulate the detailed rules for the implementation of their respective enterprises under the annuity scheme.The name of the annuity plan is Ping An Jinxiu life enterprise annuity plan; Both the trustee and theaccount 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
According to the internal organization structure, operation demands and internal reporting system ofthe company, the Company's business scopes consist of food processing, oil and grease and so onaccording to its internal organizational structure, management requirements and internal reporting system.The Company's management regularly evaluates the operating results of these divisions to determine theallocation of resources to them and evaluate their performance. The information reported by divisionsshould be disclosed according to the accounting policies and measurement standards adopted by suchdivisions when they are reporting to the management. These measurement bases should be consistent withthe accounting and measurement bases for preparation of financial statements.
(2) Reporting of the financial information of divisions
| Item | Food Processing | Oil & Grease | Other | Offset Among Dvisions | Total |
| Operating income | 492,060,119.06 | 6,651,725,370.87 | -2,320,551,281.75 | 4,823,234,208.18 | |
| Operating costs | 370,305,726.97 | 6,573,919,795.87 | -2,313,255,053.70 | 4,630,970,469.14 | |
| Operating profit | 61,990,033.62 | 91,617,449.38 | -39,688,498.92 | 113,918,984.08 | |
| Net profit attributable to parent company | 47,234,242.53 | 75,941,743.99 | -49,594,191.16 | 73,581,795.36 | |
| Total assets | 1,125,252,721.72 | 12,119,578,000.48 | -6,304,313,276.41 | 6,940,517,445.79 | |
| Total liabilities | 129,791,795.46 | 5,649,302,979.78 | -2,386,794,310.44 | 3,392,300,464.80 |
3. Lease
The lessee shall disclose the following information in relation with the lease.
| Item | Amount |
| Interest expense on lease liability | 32,165.52 |
| Short-term lease payments charged to current profit or loss | 2,803,833.88 |
| Lease costs for low-value assets recognized in current profit or loss | |
| 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 | 1,512,001.62 |
| Gains and losses related to sale and leaseback transactions |
XVI. Notes to Main Financial Statement Items of Parent CompanyA.Other receivables
1. Classification of General table
| Item | Ending balance | Beginning balance |
| Interest receivable | ||
| Dividends receivable | 150,000,000.00 | |
| Other receivables | 360,000,115.58 | 199,000,000.00 |
| Total | 360,000,115.58 | 349,000,000.00 |
2. Other receivables
（1）Disclosed according to aging
| Aging | Ending Balance |
| Within 1 Year (including 1 year) | 360,000,115.58 |
| Among them: Within credit period (within 3 months) | 161,000,115.58 |
| Credit period to 1 year | 199,000,000.00 |
| 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 | |
| Sub-total | 360,000,115.58 |
| Less: Allowance for bad debts | |
| Total | 360,000,115.58 |
(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 | 360,000,115.58 | 199,000,000.00 |
| Reserve fund | ||
| Total | 360,000,115.58 | 199,000,000.00 |
(3) 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 | 360,000,000.00 | Within 1 year,1 to 2 years | 99.99 | |
| Total | 360,000,000.00 |
B. 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 | 2,619,157,283.19 | 2,619,157,283.19 | 2,619,157,283.19 | 2,619,157,283.19 | ||
| Total | 2,619,157,283.19 | 2,619,157,283.19 | 2,619,157,283.19 | 2,619,157,283.19 | ||
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 (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 | 2,619,157,283.19 | 2,619,157,283.19 |
C.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 | 11,839,311.03 | 170,581.26 | 382,744.96 | 170,581.26 |
| Total | 11,839,311.03 | 170,581.26 | 382,744.96 | 170,581.26 |
D. Income from investment
| Sources of investment income | Current Amount | Last Term Amount |
| Long term equity investment income calculated by cost method | 150,814.85 | |
| Total | 150,814.85 |
XVII. Supplementary Information
1. According to the requirements of the CSRC's "Explanatory Announcement on Information
Disclosure of Companies Publicly Issuing Securities No. 1 - Non-recurring Gains and Losses", thenon-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 | Amount | Note |
| (1) Gains and losses on disposal of non current assets | -2,209.46 | |
| (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) | 2,076,110.00 | |
| (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 | 169,707.51 | |
| (4) Custodial fee income from entrusted operations | 11,438,400.93 | |
| (5) Other non-operating income and expenses other than the above | 3,375,520.92 | |
| (6) Other profit and loss items that meet the definition of non recurring profit and loss | ||
| Total non recurring profit and loss | 17,057,529.90 | |
| Less: amount affected by income tax | 1,396,591.07 | |
| Non recurring profit and loss after deducting the influence of income tax | 15,660,938.83 | |
| Including: non recurring profit and loss attributable to the owner of the parent company | 15,486,119.75 | |
| Non recurring profit and loss attributable to minority shareholders | 174,819.08 |
(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 | 2.37 | 0.10 | 0.10 |
| Net profit attributable to common shareholders after deduction of non-recurring gains and losses | 1.88 | 0.08 | 0.08 |
Hainan Jingliang Holdings Co., Ltd.
August 25
th
,
2023