HAINAN JINGLIANG

HOLDINGS CO. LTD.ANNUAL REPORT 2021

March 2022HAINAN JINGLIANG HOLDINGS CO. LTD.ANNUAL REPORT 2021

Part I Important Notes

This Summary is based on the full Annual Report of Hainan Jingliang Holdings Co. Ltd. (together with its

consolidated subsidiaries the “Company” except where the context otherwise requires). In order for a full

understanding of the Company’s operating results financial position and future development plans investors

should carefully read the aforesaid full text which has been disclosed together with this Summary on the media

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 its summary.Independent auditor’s modified opinion:

□ Applicable √ Not applicable

Board-approved final cash and/or stock dividend plan for ordinary shareholders for the Reporting Period:

□ Applicable √ Not applicable

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

□ Applicable √ Not applicable

This Summary has been prepared in both Chinese and English. Should there be any discrepancies or

misunderstandings between the two versions the Chinese version shall prevail.Part II Key Corporate Information

1. Stock Profile

Stock name JLKG JL-B Stock code 000505 200505

Stock exchange for stock listing Shenzhen Stock Exchange

Contact information Board Secretary Securities Representative

Name Guan Ying Gao Deqiu

15/F Jing Liang Building NO. 16 East Third 15/F Jing Liang Building NO. 16 East Third

Address Ring Middle Road Chaoyang District Ring Middle Road Chaoyang District

Beijing Beijing

Fax 010-51672010 010-51672010

Tel. 010-51672130 010-51672029

Email address 1124387865@qq.com gaodeqiu_jl@163.com

2. Principal Activities or Products in the Reporting Period

The Company is principally engaged in oils and oilseeds processing and trading as well as food processing. WithHainan Jingliang Holdings Co. Ltd. Annual Report 2021

regard to oils processing and trading the Company refines bottles markets imports and exports raw oils upon

initial pressing. As for oilseeds the Company presses refines bottles markets imports and exports oilseeds such

as sesame soybean corn germ sunflower seeds and peanuts. The Company runs its oils and oilseeds processing

and trading business primarily in Beijing City Tianjin City and Hebei Province under the brands of “Gu Chuan”

“Lv Bao” “Gu Bi” “Huo Niao” etc. with the main products being soybean oil rapeseed oil sunflower seed oil

and sesame oil and paste among others. As for its food processing business it primarily develops produces and

markets snack food and bread under the brands of “Little Prince” “MS Dong” “Jianqiang De Tudou” and “GuChuan” among others with the main products being potato chips cakes and pastries and bread. The snack food

business covers all provinces and municipalities in China while the bread business focuses on the

Beijing-Tianjin-Hebei region. In this regard the Company is one of the major suppliers for KFC in North China.According to the Industry Categorization Results of Listed Companies the Company falls into the major industry

category of manufacturing—agri-food processing industry (code: C13). Specifically the Company operates in the

vegetable oil processing segment with its food processing business accounting for a large proportion in gross

profit. With respect to the vegetable oil processing industry industrial integration has accelerated and

differentiation is increasingly evident with minority oils such as sunflower seed oil tea oil corn oil and rice bran

oil seeing fast growth. In terms of the food processing industry consumer needs have become increasingly diverse

resulting in better and richer product offerings. Nonetheless there are only a handful of major brands in the

industry indicating great potential for industrial integration.

3. Key Financial Information

(1) Key Financial Information of the Past Three Years

Indicate by tick mark whether there is any retrospectively restated datum in the table below.□ Yes √ No

Unit: RMB

Change of 31

31 December 2021 31 December 2020 December 2021 over 31 December 2019

31 December 2020 (%)

Total assets 6046600058.90 5695504493.73 6.16% 5231266600.19

Equity attributable to the listed

2915802291.052710571543.537.57%2406039283.87

company’s shareholders

2021-over-2020

202120202019

change (%)

Operating revenue 11763093835.56 8741749912.11 34.56% 7440286465.54

Net profit attributable to the listed

204459771.08184846956.7010.61%133341925.75

company’s shareholders

Net profit attributable to the listed

company’s shareholders before 195422832.45 164037737.59 19.13% 104483092.09

exceptional items

Net cash generated from/used in

632240056.44-246540910.08356.44%297366794.05

operating activities

Basic earnings per share 0.28 0.26 7.69% 0.19Hainan Jingliang Holdings Co. Ltd. Annual Report 2021

(RMB/share)

Diluted earnings per share

0.280.267.69%0.19

(RMB/share)

Weighted average return on equity

7.27%7.17%0.10%5.70%

(%)

(2) Key Financial Information by Quarter

Unit: RMB

Q1 Q2 Q3 Q4

Operating revenue 2338783061.35 2989463774.48 2987496084.26 3447350915.47

Net profit attributable to the listed

36585077.3651743120.5539778852.2276352720.95

company’s shareholders

Net profit attributable to the listed

company’s shareholders before 32694567.66 50578769.74 39320196.40 72829298.65

exceptional items

Net cash generated from/used in

274757224.163093221.29534327111.43-179937500.44

operating activities

Indicate by tick mark whether any of the quarterly financial data in the table above or their summations differs

materially from what have been disclosed in the Company’s quarterly or interim reports.□ Yes √ No

4. Share Capital and Shareholder Information at the Period-End

(1) Numbers of Ordinary Shareholders and Preferred Shareholders with Resumed Voting Rights as well as

Holdings of Top 10 Shareholders

Unit: share

Number of preferred

Number of Number of

shareholders with

Number of ordinary preferred

resumed voting

ordinary shareholders at the shareholders

59249 53755 0 rights at the 0

shareholders at month-end prior to with resumed

month-end prior to

the period-end the disclosure of voting rights at

the disclosure of this

this Report the period-end

Report

Top 10 shareholders

Shareholdi Total shares Shares in pledge

Nature of

Name of shareholder ng held at the Restricted shares held marked or frozen

shareholder

percentage period-end Status Shares

BEIJING GRAIN GROUP CO. State-owned

39.68%2884395610

LTD. legal person

BEIJING STATE-OWNED

CAPITAL OPERATION AND State-owned

6.67%485104600

MANAGEMENT COMPANY legal person

LIMITED

Domestic

WANG YUECHENG natural 5.66% 41159887 41159887

person

Foreign

LI SHERYN ZHAN MING natural 0.71% 5155300 0

personHainan Jingliang Holdings Co. Ltd. Annual Report 2021

GOLD BUFFALO RUNYING

(TIANJIN) EQUITY

INVESTMENT FUND

MANAGEMENT CO. Other 0.40% 2889803 0

LTD.—GOLD BUFFALO

RUNYING (TIANJIN) EQUITY

INVESTMENT FUND (L.P.)

Domestic

MEI JIANYING natural 0.36% 2604203 0

person

Domestic

ZHANG XIAOXIA natural 0.27% 1949250 0

person

Domestic

WANG XIAOXING natural 0.23% 1679200 0

personORIENT SECURITIES （HONG Foreign

0.18%13304000KONG） LIMITED legal person

CITIC SECURITIES COMPANY

LIMITED－TIANHONG CHINA

SECURITIES FOOD AND

BEVERAGES TRADING Other 0.16% 1197700 0

OPEN-ENDED INDEX

SECURITIES INVESTMENT

FUND

* Beijing State-Owned Capital Operation and Management Center owns an

indirect 100% share of Beijing Grain Group Co. Ltd. and Beijing Grain Group

Related or acting-in-concert parties among the Co. Ltd. is the controlling shareholder of the Company (a 39.68% holding). *

shareholders above 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.Shareholder Wang Xiaoxing holds 1679200 shares in the Company through his

Shareholders involved in securities margin

account of collateral securities for margin trading in Soochow Securities Co.trading (if any)

Ltd.

(2) Number of Preferred Shareholders and Shareholdings of Top 10 of Them

□ Applicable √ Not applicable

No preferred shareholders in the Reporting Period.Hainan Jingliang Holdings Co. Ltd. Annual Report 2021

(3) Ownership and Control Relations between the Actual Controller and the Company

The State-Owned Assets Supervision and

Administration Commission of the People’s

Government of Beijing Municipality

100%

Beijing State-Owned Capital Operation

and Management Company Limited

100%

Beijing Capital Agrib usiness Group Co.Lt d.

100%

Beijing Grain Group Co. Ltd.

39.68%6.67%

Hainan Jingliang Holdings Co. Ltd.

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

□ Applicable √ Not applicable

Part III Significant Events

2021 marks the commencement of China’s “14th Five-Year Plan” the 100th anniversary of the founding of the

Communist Party of China (the “CPC”) as well as the first year for the Company’s “Three-year Actions forState-owned Enterprise Reform” which is aimed to drive leapfrog growth. In the year the Company closely

followed the general principle of seeking progress while keeping performance stable adhered to the right path of

innovation and managed to overcome multiple difficulties. With strong CPC leadership the Company saw a good

start for the 14th Five-Year Plan period with effective anti-pandemic actions as well as a stabilizing and

improving development momentum.For the year under review the Company recorded operating revenue of RMB11.763 billion up 34.56% year on

year; a gross profit of RMB315 million up 10.56% year on year; a net profit attributable to the listed company’s

shareholders of RMB204 million up 10.61% year on year; and earnings per share of RMB0.28 up 7.69% year on

year. As such the objectives for the year were successfully accomplished.No significant changes occurred to the Company’s operations in the Reporting Period.Part VI 2021 Financial StatementsConsolidated Balance Sheet

Prepared by: Hainan Jingliang Holdings Co. Ltd. Monetary Unit: RMB Yuan

Items 31 December 2021 31 December 2020 Notes

Current Assets:

Monetary capital 507144668.45 335466169.61 VI.1

△Settlement reserves

△Loans to banks and other financial institutions

Transactional financial assets 40377048.08 63478071.73 VI.2

Derivative financial assets

Notes receivable 456565.85 VI.3

Accounts receivable 82694094.62 92245667.60 VI.4

Receivables financing

Prepayment 87803762.15 282343218.05 VI.5

△Premium receivable

△Reinsurance accounts receivable

△Reinsurance reserves receivable

Other receivables 284756636.27 541905656.97 VI.6

Including: Interest receivable

Dividends receivable

△Buy-back financial assets

Inventory 1903372572.18 1225083742.26 VI.7

Contract assets

Held-for-sale assets

Non-current assets due within one year 156139100.00 VI.8

Other current assets 820500621.47 845450678.36 VI.9

Total current assets 3882788503.22 3386429770.43

Non-current assets:

△Loans and advances

Debt investment

Other debt investments

Long-term receivables

Long-term equity investment 230799437.53 217762487.79 VI.10

Other equity instruments investment 20000000.00 20000000.00 VI.11

Other non-current financial assets

Investment property 20925683.56 22560212.50 VI.12

Fixed assets 1120758409.49 1131143854.07 VI.13

Construction in process 11220840.10 28458413.67 VI.14

Productive biological assets

Oil-and-gas assets

Right-of-use assets 8045406.28 VI.15

Intangible assets 339970477.87 354139335.32 VI.16

Development expenditure

Goodwill 191394422.51 191394422.51 VI.17

Long-term deferred expenses 17383818.41 20529601.50 VI.18

Deferred income tax assets 13571063.19 3346814.27 VI.19

Other non-current assets 189741996.74 319739581.67 VI.20

Total non-current assets 2163811555.68 2309074723.30

Total assets 6046600058.90 5695504493.73Consolidated Balance Sheet (Continued)

Prepared by: Hainan Jingliang Holdings Co. Ltd. Monetary Unit: RMB Yuan

Items 31 December 2021 31 December 2020 Notes

Current liabilities:

Short-term borrowings 1521669601.35 1497414079.05 VI.21

△Borrowings from central bank

△Loans from banks and other financial institutions

Transactional financial liabilities

Derivative financial liabilities 70305871.37 371219136.84 VI.22

Notes payable

Accounts payable 186748746.42 75384075.39 VI.23

Account collected in advance 996173.41 1087874.02 VI.24

Contract liabilities 520816995.93 346874260.90 VI.25

△Financial assets sold under repurchase agreements

△Deposits from customers and interbank deposits

△Funds from securities trading brokerage business

△Funds from securities underwriting business

Employee payroll payable 42130650.49 33345136.94 VI.26

Taxes payable 104347852.69 50884214.64 VI.27

Other payables 73985586.39 72292881.24 VI.28

Including: Interest payable 21082795.47 21082795.47 VI.28

Dividends payable 3213302.88 11013302.88 VI.28

△Employee payroll payable

△Payables for reinsurance

Held-for-sale liabilities

Non-current liabilities due within one year 1582978.69 VI.29

Other current liabilities 22994553.60 8319696.79 VI.30

Total current liabilities 2545579010.34 2456821355.81

Non-current liabilities:

△Insurance contract reserves

Long-term borrowings 71000000.00 VI.31

Bonds payable

Including: Preferred stock

Perpetual capital bonds

Lease liabilities 1694702.62 VI.32

Long-term payables

Long-term payable to employees 5677134.00 5677134.00 VI.33

Estimated liabilities

Deferred income 65244499.48 68716699.34 VI.34

Deferred income tax liabilities 45250919.91 65115801.22 VI.19

Other non-current liabilities

Total non-current liabilities 188867256.01 139509634.56

Total liabilities 2734446266.35 2596330990.37

Owners' equity (or Shareholders' equity):

Capital stock 726950251.00 726950251.00 VI.35

Other equity instruments

Including: Preferred stock

Perpetual capital bonds

Capital reserves 1675918350.95 1674828350.95 VI.36

Less: treasury stock

Other comprehensive income - 682282.22 -363258.66 VI.37

Special reserves

Surplus reserves 122122436.98 122122436.98 VI.38

△General risk reserve

Undistributed profit 391493534.34 187033763.26 VI.39

Total equity attributable to the parent company 2915802291.05 2710571543.53

Minority equity 396351501.50 388601959.83

Total owners' equity (or shareholders' equity) 3312153792.55 3099173503.36

Total liabilities and owners' equity (or shareholders' equity) 6046600058.90 5695504493.73Balance Sheet

Prepared by: Hainan Jingliang Holdings Co. Ltd. Monetary Unit: RMB Yuan

Items December 31 2021 December 31 2020 Note

Current assets:

Monetary capital 1533187.04 1523322.79

△Settlement reserves - -

△Loans to banks and other financial institutions - -

Transactional financial assets - -

Derivative financial assets - -

Notes receivable - -

Accounts receivable 6 00.00 11784.00 XVI.1

Receivables financing - -

Prepayment - 423679.12

△Premium receivable - -

△Reinsurance accounts receivable - -

△Reinsurance reserves receivable - -

Other receivables 1 80000000.00 103341.26

XVI.2

Including: Interest receivable - -

Dividends receivable - -

△Financial assets purchased under reverse repurchase agreements - -

Inventory - 3775954.85

Contract assets - -

Held-for-sale assets - -

Non-current assets due within one year - -

Other current assets 2335459.82 2445772.47

Total current assets 1 83869246.86 8283854.49

Non-current assets

△Loans and advances - -

Debt investment - -

Other debt investments - -

Long-term receivables - -

Long-term equity investment 2626437846.24 2626437846.24 XVI.3

Other equity instruments investment 2 0000000.00 2 0000000.00

Other non-current financial assets - -

Investment property 5 880839.21 6222001.73

Fixed assets 6009399.58 2809083.51

Construction in process - -

Productive biological assets - -

Oil-and-gas assets - -

Right-of-use assets - -

Intangible assets 85534.58 2 09185.10

Development expenditure - -

Goodwill - -

Long-term deferred expenses - -

Deferred income tax assets - -

Other non-current assets - -

Total non-current assets 2 658413619.61 2655678116.58

Total assets 2842282866.47 2 663961971.07Balance Sheet (Continued)

Prepared by: Hainan Jingliang Holdings Co. Ltd. Monetary Unit: RMB Yuan

Items December 31 2021 December 31 2020 Note

Current liabilities:

Short-term borrowings - -

△Borrowings from central bank - -

△Loans from banks and other financial institutions - -

Transactional financial liabilities - -

Derivative financial liabilities - -

Notes payable - -

Accounts payable - -

Account collected in advance 38896.41 38896.41

Contract liabilities - -

△Financial assets sold under repurchase agreements

△Deposits from customers and interbank deposits

△Funds from securities trading brokerage business

△Funds from securities underwriting business

Employee payroll payable 177720.27 341902.14

Taxes payable 977825.28 1037881.62

Other payables 33225676.78 3 09067618.99

Including: Interest payable 21082795.47 2 1082795.47

Dividends payable 3213302.88 3 213302.88

△Employee payroll payable

△Payables for reinsurance

Held-for-sale liabilities

Non-current liabilities due within one year

Other current liabilities

Total current liabilities 34420118.74 310486299.16

Non-current liabilities:

△Insurance contract reserves

Long-term borrowings

Bonds payable

Including: Preferred stock

Perpetual capital bonds

Lease liabilities

Long-term payables

Long-term payable to employees

Estimated liabilities

Deferred income

Deferred income tax liabilities

Other non-current liabilities

Total non-current liabilities

Total liabilities 34420118.74 310486299.16

Shareholder's equity: - -

Capital stock 726950251.00 726950251.00

Other equity instruments

Including: Preferred stock

Perpetual capital bonds

Capital reserves 2380234900.84 2379144900.84

Less: treasury stock

Other comprehensive income

Special reserves

Surplus reserves 109487064.39 1 09487064.39

△General risk reserve

Undistributed profit - 408809468.50 -862106544.32

Total shareholder's equity 2807862747.73 2353475671.91

Total liabilities and shareholder's equity 2842282866.47 2663961971.07Consolidated Income Statement

Prepared by: Hainan Jingliang Holdings Co. Ltd. Year 2021 Monetary Unit: RMB Yuan

Items Amount for the current period Amount for the prior period Note

I. Total operating income 1 1763093835.56 8 741749912.11

Including: Operating income 11763093835.56 8741749912.11 VI.40

△Interest income

△Premiums earned

△Fee and commission income

II. Total operating cost 11440200537.43 8 493126170.72

Including: Operating cost 1 1037154469.50 8090847245.42 VI.40

△Interest expenses

△Fee and commission expenses

△Surrenders

△Net claims paid

△Net appropriation for insurance contracts reserves

△Dividend expenses for policyholders

△Reinsurance expenditures

Tax and surcharges 23788999.87 23182521.26 VI.41

Selling expenses 147316118.24 1 68538310.92 VI.42

Administration expenses 198767892.19 1 79538728.93 VI.43

Research and development expenses 12049947.96 9903221.93 VI.44

Financial expenses 21123109.67 21116142.26 VI.45

Including: interest expenses 42302007.06 3 1742996.45 VI.45

Interest income 2 6216178.46 1 6035923.84 VI.45

Add: Other income 1 4535083.32 16222504.88 VI.46

Income from investment (Losses shall be filled in with “-”) 44039777.71 3 7875880.38 VI.47

Including: income from investment on joint venture and cooperative enterprise 3 7822580.24 1 9542664.00 VI.47

Income from derecognition of financial assets measured at amortized cost

△Income from exchange(Losses shall be filled in with “-”) - -

Income from net exposure hedging(Losses shall be filled in with “-”)

Income from changes in fair value (Losses shall be filled in with “-”) - 66667420.88 -16467791.36 VI.48

Credit impairment loss(Losses shall be filled in with “-”) -539523.46 2 51710.19 VI.49

Income from assets impairment(Losses shall be filled in with “-”) - 306388.07 - 63449.10 VI.50

Income from asset disposal (Losses shall be filled in with “-”) -208369.12 3 8752.37 VI.51

III. Operating profit (Losses shall be filled in with “-”) 313746457.63 286481348.75

Add: non-operating income 2067373.20 746589.42 VI.52

Less: non-operating expenditure 3 28641.29 1 888144.99 VI.53

IV. Total profit (Total losses shall be filled in with “-”) 3 15485189.54 2 85339793.18

Less: income tax expense 7 6251467.60 66115298.62 VI.54

V. Net profit (Net loss shall be filled in with “-”) 239233721.94 219224494.56

Including: net profit of the merged party before the merger

(I) Classified by operations continuity:

1. Net profit from continuing operations (Net loss shall be filled in with “-”) 239233721.94 2 19224494.56

2. Net profit from discontinuing operations (Net loss shall be filled in with “-”)

(II) Classified by ownership attribution:

1、Net profit attributable to shareholders of the parent company (Net loss shall be filled in

204459771.08184846956.70

with “-”)

2、Minority interest income (Net loss shall be filled in with “-”) 3 4773950.86 3 4377537.86

VI. Net of tax from other comprehensive income -319023.56 - 630886.80

Net of tax from other comprehensive income attributable to shareholders of the parent

-319023.56-630886.80

company

1.Other comprehensive income that cannot be reclassified into the profit and loss - -

（1）Remeasure changes in defined benefit plans - -

（2）Other comprehensive income that cannot be transferred to gains and losses under the

--

equity method

（3）Changes in fair value of other equity instrument investments -

（4）Changes in the fair value of the company's own credit risk -

2.Other comprehensive income that will be reclassified into the profit and loss -319023.56 - 630886.80

（1）Other comprehensive income that can be transferred to gains and losses under the

-105630.50-81510.00

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 -213393.06 - 549376.80

（7）Other -

Net of tax from other comprehensive income attributable to minority shareholder -

VII. Total comprehensive income 238914698.38 2 18593607.76

Total comprehensive income attributable to shareholders of the parent company 2 04140747.52 184216069.90

Total comprehensive income attributable to minority shareholder 34773950.86 3 4377537.86

VIII. Earnings per share:

(I) Basic earnings per share 0 .28 0 .26

(II) Diluted earnings per share 0.28 0.26Income Statement

Prepared by: Hainan Jingliang Holdings Co. Ltd. Year 2021 Monetary Unit: RMB Yuan

Items Amount for the current period Amount for the prior period Note

I. Total operating income 591060.56 1 181687.83

Including: operating income 5 91060.56 1181687.83 XVI.4

△Interest income - -

△Earned premium - -

△Fee and commission income - -

II. Total operating cost 9 311844.39 26118381.35

Including: operating cost 3 41162.52 - XVI.4

△Interest expenses - -

△Fee and commission expenses - -

△Surrenders - -

△Net claims paid - -

△Net appropriation for insurance contracts reserves - -

△Dividend expenses for policyholders - -

△Reinsurance expenditures - -

Tax and surcharges 259377.02 1 51241.71

Selling expenses - -

Administration expenses 8710846.48 25988631.19

Research and development expenses - -

Financial expenses 4 58.37 - 21491.55

Including: interest expenses - -

Interest income 2 566.23 2 6478.83

Add: Other income 8 4564.61 7 9821.19

Income from investment (Losses shall be filled in with “-”) 461597751.35 206400562.23 XVI.5

Including: income from investment on joint venture and cooperative enterprise - -

Income from derecognition of financial assets measured at amortized cost (Losses shall

be filled in with “-”)

△Income from exchange(Losses shall be filled in with “-”) - -

Income from net exposure hedging(Losses shall be filled in with “-”)

Income from changes in fair value (Losses shall be filled in with “-”) - -

Credit impairment loss(Losses shall be filled in with “-”) -99118.26 - 33884.15

Income from assets impairment(Losses shall be filled in with “-”) - -

Income from asset disposal (Losses shall be filled in with “-”) - 24042.07 -

III. Total profit (Total losses shall be filled in with “-”) 452838371.80 181509805.75

?Add: non-operating income 458704.02 4001.44

Less: non-operating expenditure - 1015288.35

IV. Total profit (Total losses shall be filled in with “-”) 453297075.82 180498518.84

Less: income tax expense - -

V. Net profit (Net loss shall be filled in with “-”) 453297075.82 180498518.84

(I) Net profit from continuing operations (Net loss shall be filled in with “-”) 453297075.82 1 80498518.84

(II) Net profit from discontinuing operations (Net loss shall be filled in with “-”) - -

VI. Net of tax from other comprehensive income - -

(I) Other comprehensive income that cannot be reclassified into the profit and loss - -

1.Other comprehensive income that cannot be reclassified into the profit and loss - -

2. Other comprehensive income that cannot be transferred to gains and losses under

--

the equity method

（3）Changes in fair value of other equity instrument investments

（4）Changes in the fair value of the company's own credit risk

(II) Other comprehensive income that will be reclassified into the profit and loss - -

（1）Other comprehensive income that can be transferred to gains and losses 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

VII. Total comprehensive income 453297075.82 180498518.84

VIII. Earnings per share

(I) Basic earnings per share - -

(II) Diluted earnings per share - -Consolidated Cash Flow Statement

Prepared by: Hainan Jingliang Holdings Co. Ltd. Year 2021 Monetary Unit: RMB Yuan

Items Amount for the current period Amount for the prior period Note

I. Cash Flows from Operating Activities:

Cash Receipts from Sales of Goods or Rendering of Services 12849760935.34 9385571737.86

△Net increase in customer deposits and due to banks and other

--

financial institutions

△Net increase in borrowings from the Central Bank - -

△Net increase in borrowings from other financial institutions - -

△Cash received for insurance premium - -

△Net cash received from reinsurance contracts - -

△Net increase in deposits and investments from policyholders - -

△Cash received for interest fee and commission - -

△Net increase in borrowings from banks - -

△Net cash increase under repurchase agreements - -

△Net increase received from securities trading brokerage business

Tax Refund Receipts 11281074.60 14262674.77

Other Cash Receipts Concerning Operating Activities 1593774303.16 963876029.48 VI.56

Subtotal of Cash Inflows from Operating Activities 14454816313.10 10363710442.11

Cash Paid for Purchase of Goods and Accepting Services 11555020531.14 8473107195.86

△Net increase in loans and advances to customers

△Net increase in deposit in the Central Bank and due from banks

and other financial institutions

△Cash paid for claims in insurance contracts

△Net increase in loans to banks and other financial institutions

△Cash paid for interest fee and commission

△Cash paid for dividends for policyholders

Cash Paid to and for Employees 343905871.99 307592571.93

Taxes and Fees Paid 196473475.29 179390552.66

Other Cash Paid Concerning Operating Activities 1727176378.24 1650161031.74 VI.56

Subtotal of Cash Outflows from Operating Activities 13822576256.66 10610251352.19

Net Cash Flows from Operating Activities 632240056.44 -246540910.08 VI.57

II. Cash Flows from Investment Activities:

Cash Receipts from Disinvestment 2148406585.67 3601922000.00

Cash Receipts from Returns on Investments 30892440.84 19842141.06

Net Cash from Disposal of Fixed Assets Intangible Assets and Other

344988.321266650.68

Long-term Assets

Net Cash Received by Disposal of Subsidiaries and Other Business - 5000000.00

Other Cash Receipts Concerning Investment Activities - 960000.00 VI.56

Subtotal of Cash Inflows from Investment Activities 2179644014.83 3628990791.74

Cash Paid for Purchase and Construction of Fixed Assets Intangible

66831643.3237391421.93

Assets and Other Long-term Assets

Cash Paid for Investments 2591605029.22 3556280248.53

△Net increase in mortgage loans

Net Cash Paid for obtaining Subsidiaries and Other Business Units

Other Cash Paid Concerning Investment Activities

Subtotal of Cash Outflows from Investment Activities 2658436672.54 3593671670.46

Net Cash Flows from Investment Activities -478792657.71 35319121.28

III. Cash Flows from Financing Activities:

Cash Receipts from Accepting Investment - -

Including: Cash Received by Subsidiaries Absorbing the Investment from Minority Shareholders - -

Cash Receipts from Borrowings 3597869836.82 2552237354.30

Other Cash Receipts Concerning Financing Activities 1090000.00 - VI.56

Subtotal of Cash Inflows from Financing Activities 3598959836.82 2552237354.30

Cash Paid for Repayment of Debts 3501459721.50 2385384073.90

Cash Paid for Distribution of Dividends Profits or Repayment of Interests 77126416.25 50390323.04

Including: Dividends and Profits Paid by Subsidiaries to Minority Shareholders 27054652.03 3713626.89

Other Cash Paid Concerning Financing Activities 937516.52 104730266.66 VI.56

Subtotal of Cash Outflows from Financing Activities 3579523654.27 2540504663.60

Net Cash Flows from Financing Activities 19436182.55 11732690.70

IV. Exchange Rate Fluctuation Consequences on Cash and

-343788.00-21219661.70

Cash Equivalents

V. Net Increase in Cash and Cash Equivalents 172539793.28 -220708759.80 VI.57

Add: Opening Balance of Cash and Cash Equivalents 334389017.41 555097777.21 VI.57

VI. Closing Balance of Cash and Cash Equivalents 506928810.69 334389017.41 VI.57Statement of Cash Flows

Prepared by: Hainan Jingliang Holdings Co. Ltd. Year 2021 Monetary Unit: RMB Yuan

Items Amount for the current period Amount for the prior period Note

I. Cash Flows from Operating Activities:

Cash Receipts from Sales of Goods or Rendering of Services - 540121.28

△Net increase in customer deposits and due to banks and other financial institutions - -

△Net increase in borrowings from the Central Bank - -

△Net increase in borrowings from other financial institutions - -

△Cash received for insurance premium - -

△Net cash received from reinsurance contracts - -

△Net increase in deposits and investments from policyholders - -

△Cash received for interest fee and commission - -

△Net increase in borrowings from banks - -

△Net cash increase under repurchase agreements - -

△Net increase received from securities trading brokerage business

Tax Refund Receipts - -

Other Cash Receipts Concerning Operating Activities 6021876.55 6 3468858.85

Subtotal of Cash Inflows from Operating Activities 6021876.55 64008980.13

Cash Paid for Purchase of Goods and Accepting Services - -

△Net increase in loans and advances to customers - -

△Net increase in deposit in the Central Bank and due from banks and other financial institutions - -

△Cash paid for claims in insurance contracts - -

△Net increase in loans to banks and other financial institutions

△Cash paid for interest fee and commission - -

△Cash paid for dividends for policyholders - -

Cash Paid to and for Employees 4083376.46 2 0082555.72

Taxes and Fees Paid 253557.02 390600.97

Other Cash Paid Concerning Operating Activities 3463536.06 251832365.29

Subtotal of Cash Outflows from Operating Activities 7800469.54 272305521.98

Net Cash Flows from Operating Activities -1778592.99 -208296541.85

II. Cash Flows from Investment Activities:

Cash Receipts from Disinvestment - -

Cash Receipts from Returns on Investments 461597751.35 206400562.23

Net Cash from Disposal of Fixed Assets Intangible Assets and Other Long-term Assets 50200.00 2 91000.00

Net Cash Received by Disposal of Subsidiaries and Other Business Units - -

Other Cash Receipts Concerning Investment Activities - -

Subtotal of Cash Inflows from Investment Activities 461647951.35 206691562.23

Cash Paid for Purchase and Construction of Fixed Assets Intangible Assets and Other Long-term Assets 89800.00 407799.78

Cash Paid for Investments - -

△Net increase in mortgage loans - -

Net Cash Paid for obtaining Subsidiaries and Other Business Units - -

Other Cash Paid Concerning Investment Activities 180000000.00 -

Subtotal of Cash Outflows from Investment Activities 180089800.00 407799.78

Net Cash Flows from Investment Activities 281558151.35 206283762.45

III. Cash Flows from Financing Activities:

Cash Receipts from Accepting Investment - -

Including: Cash Received by Subsidiaries Absorbing the Investment from Minority Shareholders - -

Cash Receipts from Borrowings - -

Other Cash Receipts Concerning Financing Activities 1090000.00 -

Subtotal of Cash Inflows from Financing Activities 1090000.00 -

Cash Paid for Repayment of Debts - -

Cash Paid for Distribution of Dividends Profits or Repayment of Interests - -

Including: Dividends and Profits Paid by Subsidiaries to Minority Shareholders - -

Other Cash Paid Concerning Financing Activities 280859694.11 -

Subtotal of Cash Outflows from Financing Activities 280859694.11 -

Net Cash Flows from Financing Activities - 279769694.11 -

IV. Exchange Rate Fluctuation Consequences on Cash and Cash Equivalents - -

V. Net Increase in Cash and Cash Equivalents 9864.25 -2012779.40

Add: Opening Balance of Cash and Cash Equivalents 1523322.79 3536102.19

VI. Closing Balance of Cash and Cash Equivalents 1533187.04 1523322.79Consolidated Statement of Changes in Equity

Prepared by: Hainan Jingliang Holdings Co. Ltd. Year 2021 Monetary Unit: RMB Yuan

Current Amount

Shareholder's Equity attributable to the Parent Company

Items Total shareholders'

Other equity instruments Other Less: treasury △General risk Minority equity

Capital stock Capital reserve comprehensive Special reserve Surplus reserve Undistributed profit Others Subtotal equities

Preferred stocPkerpetual bond Others stock reserveincome

I. Year-end balance of last year 726950251.00 1 674828350.95 - -363258.66 - 1 22122436.98 - 187033763.26 - 2710571543.53 388601959.83 3099173503.36

Add: changes in accounting policies - - -

Correction of prior period errors - - -

Merger of enterprises under the same control - -

Other - - -

II. Balance at beginning of current year 726950251.00 - - - 1 674828350.95 - -363258.66 - 1 22122436.98 - 187033763.26 - 2710571543.53 388601959.83 3099173503.36

III. Increases and decreases of current year

----1090000.00--319023.56---204459771.08-205230747.527749541.67212980289.19

(Decrease shall be filled in with “-”)

(I) Total comprehensive income - 319023.56 204459771.08 204140747.52 34773950.86 2 38914698.38

(II) Investment of shareholders and capital

----1090000.00-------1090000.00-1090000.00

reduction

1. Common equity invested by shareholders - -

2. Capital invested by other equity instruments

--

holders

3. The amount of shares recorded into the

--

shareholder's equity

4. Others 1 090000.00 1090000.00 1090000.00

(III) Distribution of profits - - - - - - - - - - - - - -27024409.19 -27024409.19

1. Withdrawal of surplus reserves - -

2. Withdrawal of general risk reserve - -

3. Distribution to shareholders - -27024409.19 -27024409.19

4. Others - -

(IV) Inner carrying-over of shareholders' equities - - - - - - - - - - - - - - -

1. Capital reserve converted into capital (or capital

--

stock)

2. Surplus public accumulation converted into

--

capital (or capital stock)

3. Surplus public accumulation loss remedy - -

4. Change in defined benefit plan carried forward

--

to retained earnings

5.Other comprehensive income carried forward to

--

retained earnings

6. Others - -

(V) Special reserve - - - - - - - - - - - - - - -

1. Withdrawal for current period - -

2. Use for current period - -

(VI) Others - -

IV. Closing balance of current year 726950251.00 - - - 1675918350.95 - -682282.22 - 122122436.98 - 391493534.34 - 2915802291.05 396351501.50 3312153792.55Consolidated Statement of Changes in Equity (Continued)

Prepared by: Hainan Jingliang Holdings Co. Ltd. Year 2021 Monetary Unit: RMB Yuan

Amount of Last Period

Shareholder's Equity attributable to the Parent Company

Items

Other Total shareholders' Other equity instruments Less: treasury △General risk Minority equity

Capital stock Capital reserve comprehensive Special reserve Surplus reserve Undistributed profit Others Subtotal equities

Preferred sPtoecrkpetual bondOthers stock reserveincome

I. Year-end balance of last year 685790364.00 1595672048.19 - 267628.14 - 122122436.98 - 2186806.56 - 2406039283.87 585056356.90 2991095640.77

Add: changes in accounting policies - -

Correction of prior period errors - -

Merger of enterprises under the same control - -

Other - -

II. Balance at beginning of current year 685790364.00 - - - 1595672048.19 - 267628.14 - 122122436.98 - 2 186806.56 - 2406039283.87 585056356.90 2991095640.77

III. Increases and decreases of current year

41159887.00---79156302.76--630886.80---184846956.70-304532259.66-196454397.07108077862.59

(Decrease shall be filled in with “-”)

(I) Total comprehensive income - - - -630886.80 - - 1 84846956.70 - 1 84216069.90 34377537.86 218593607.76

(II) Investment of shareholders and capital

41159887.00---79156302.76-------120316189.76-227118308.04-106802118.28

reduction

1. Common equity invested by shareholders 41159887.00 205757432.13 2 46917319.13 246917319.13

2. Capital invested by other equity instruments

--

holders

3. The amount of shares recorded into the

--

shareholder's equity

4. Others -126601129.37 -126601129.37 -227118308.04 -353719437.41

(III) Distribution of profits - - - - - - - - - - - - -3713626.89 -3713626.89

1. Withdrawal of surplus reserves - -

2. Withdrawal of general risk reserve - -

3. Distribution to shareholders - -3713626.89 -3713626.89

4. Others - -

(IV) Inner carrying-over of shareholders' equities - - - - - - - - - - - - - - -

1. Capital reserve converted into capital (or capital

--

stock)

2. Surplus public accumulation converted into

--

capital (or capital stock)

3. Surplus public accumulation loss remedy - -

4. Change in defined benefit plan carried forward

--

to retained earnings

5.Other comprehensive income carried forward to

--

retained earnings

6. Others - -

(V) Special reserve - - - - - - - - - - - - - - -

1. Withdrawal for current period - -

2. Use for current period - -

(VI) Others - -

IV. Closing balance of current year 726950251.00 - - - 1674828350.95 - -363258.66 - 122122436.98 - 187033763.26 - 2710571543.53 388601959.83 3099173503.36Statement of Changes in Equity

Prepared by: Hainan Jingliang Holdings Co. Ltd. Year 2021 Monetary Unit: RMB Yuan

Current Amount

Other equity instruments

Items Other Less: treasury △General risk Total shareholders'

Capital stock Capital reserve comprehensive Special reserve Surplus reserve Undistributed profit

Preferred Perpetual stock reserve equities

Others income

stock bond

I. Year-end balance of last year 726950251.00 2379144900.84 - - - 109487064.39 - -862106544.32 2353475671.91

Add: changes in accounting policies - - - - - - - - -

Correction of prior period errors - - - - - - - - -

Other - - - - - - - - -

II. Balance at beginning of current year 726950251.00 - - - 2379144900.84 - - - 109487064.39 - - 862106544.32 2353475671.91

III. Increases and decreases of current year (Decrease

----1090000.00-----453297075.82454387075.82

shall be filled in with “-”)

(I) Total comprehensive income - - - - - - - 453297075.82 453297075.82

(II) Investment of shareholders and capital reduction - - - - 1090000.00 - - - - - - 1090000.00

1. Common equity invested by shareholders - - - - - - - - -

2. Capital invested by other equity instruments holders - - - - - - - - -

3. The amount of shares recorded into the shareholder's

---------

equity

4. Others - 1090000.00 - - - - - - 1090000.00

(III) Distribution of profits - - - - - - - - - - - -

1. Withdrawal of surplus reserves - - - - - - - - -

2. Withdrawal of general risk reserve - - - - - - - - -

3. Distribution to shareholders - - - - - - - - -

4. Others - - - - - - - - -

(IV) Inner carrying-over of shareholders' equities - - - - - - - - - - - -

1. Capital reserve converted into capital (or capital stock) - - - - - - - - -

2. Surplus public accumulation converted into capital (or

---------

capital stock)

3. Surplus public accumulation loss remedy - - - - - - - - -

4. Change in defined benefit plan carried forward to

---------

retained earnings

5.Other comprehensive income carried forward to

-

retained earnings

6. Others - - - - - - - - -

(V) Withdrawal and use of Special reserve - - - - - - - - - - - -

1. Withdrawal for current period - - - - - - - - -

2. Use for current period - - - - - - - - -

(VI) Others -

IV. Closing balance of current year 726950251.00 - - - 2380234900.84 - - - 109487064.39 - -408809468.50 2807862747.73Statement of Changes in Equity (Continued)

Prepared by: Hainan Jingliang Holdings Co. Ltd. Year 2021 Monetary Unit: RMB Yuan

Amount of Last Period

Other equity instruments

Items Other Less: treasury Special △General risk Total shareholders'

Capital stock Capital reserve comprehensive Surplus reserve Undistributed profit

Preferred Perpetual stock reserve reserve equities

Others income

stock bond

I. Year-end balance of last year 6 85790364.00 2173387468.71 - - - 109487064.39 - -1042605063.16 1926059833.94

Add: changes in accounting policies - - - - - - - - -

Correction of prior period errors - - - - - - - - -

Other - - - - - - - - -

II. Balance at beginning of current year 6 85790364.00 - - - 2 173387468.71 - - - 109487064.39 - -1042605063.16 1926059833.94

III. Increases and decreases of current year (Decrease

41159887.00---205757432.13-----180498518.84427415837.97

shall be filled in with “-”)

(I) Total comprehensive income - - - - - - - 1 80498518.84 180498518.84

(II) Investment of shareholders and capital reduction 4 1159887.00 - - - 2 05757432.13 - - - - - - 2 46917319.13

1. Common equity invested by shareholders 4 1159887.00 2 05757432.13 - - - - - - 246917319.13

2. Capital invested by other equity instruments holders - - - - - - - - -

3. The amount of shares recorded into the shareholder's

---------

equity

4. Others - - - - - - - - -

(III) Distribution of profits - - - - - - - - - - - -

1. Withdrawal of surplus reserves - - - - - - - - -

2. Withdrawal of general risk reserve - - - - - - - - -

3. Distribution to shareholders - - - - - - - - -

4. Others - - - - - - - - -

(IV) Inner carrying-over of shareholders' equities - - - - - - - - - - - -

1. Capital reserve converted into capital (or capital stock) - - - - - - - - -

2. Surplus public accumulation converted into capital (or

---------

capital stock)

3. Surplus public accumulation loss remedy - - - - - - - - -

4. Change in defined benefit plan carried forward to

---------

retained earnings

5.Other comprehensive income carried forward to

-

retained earnings

6. Others - - - - - - - - -

(V) Withdrawal and use of Special reserve - - - - - - - - - - - -

1. Withdrawal for current period - - - - - - - - -

2. Use for current period - - - - - - - - -

(VI) Others -

IV. Closing balance of current year 726950251.00 - - - 2 379144900.84 - - - 109487064.39 - -862106544.32 2353475671.91Hainan Jingliang Holdings Co. Ltd.Notes to the 2021 Financial Statements

(Unless otherwise stated the amount unit is RMB Yuan)

I. Basic Information of the Company

1. Place of incorporation form of organization and head office address

Hainan 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

General Office QFBH (1992) No.1 approved by QY (1992) SGZ No. 6 Document of the People's

Bank of Hainan Province and re-registered by Hainan Pearl River Enterprise Company on January 11

1992. The Company issued 81880000 shares in total upon re-registration of which 60793600 shares

were converted from the net assets of the original company and 21086400 shares were newly issued.And the name of the Company is Hainan Pearl River Enterprise Co. Ltd. The business license

registration number of the joint-stock company is 20128455-6 and the holding parent company

Guangzhou Pearl River Enterprise Group holds 36393600 shares accounting for 44.45%. Approved

by ZGB (1992) No. 83 Document of the People's Bank of China in December 1992 the additional

21086400 shares were listed on the Shenzhen Stock Exchange for trading. The industry involved is

real estate.On March 25 1993 in response to QGBH (1993) No.028 of Hainan Provincial Leading Group

Office and SRYFZ (1993) No.099 of Shenzhen Special Economic Zone Branch of the People's Bank

of China the Company increased its share capital by converting the original share capital into

139196000 shares (according to distribution of 10 delivery of 5 and transfer of 2) with the

controlling shareholder Guangzhou Pearl River Enterprises Group holding 48969120 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 278392000

shares after the increase. The controlling shareholder Guangzhou Pearl River Enterprises Group

holds 97938240 shares accounting for 35.18%.In 1995 the issuance of 50000000 B Shares was approved by SZBF (1995) No.45 and SZBF

(1995) No.12. The share capital of the Company was increased by 10:1.5 on the basis of the share

capital after the additional B shares were issued and the share capital of the Company after the

increase was 377650800 shares. The holding parent company Guangzhou Pearl River Enterprises

Group held 112628976 shares accounting for 29.82% of the total.In 1999 Guangzhou Pearl River Enterprises Group transferred all 112628976 shares to BeijingWanfa Real Estate Development Co. Ltd.. After the transfer of shares was completed in June 1999

Beijing Wanfa Real Estate Development Co. Ltd. held 112628976 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 & Commerce

Administration Bureau of Hainan Province.On August 17 2006 the reform plan of the split share structure of the Company was implemented.The Company transferred 49094604 shares of capital stock to all shareholders at the ratio of 10 to 1.3.The original non-tradable shareholders transferred the increased shares to the tradable A-share holders.Beijing Wanfa Real Estate Development Co. Ltd. reimbursed the consideration shares of the

non-tradable shareholders who have not expressly expressed their opinions. The converted total share

capital was 426745404 shares and the original controlling shareholder Beijing Wanfa Real Estate

Development Co. Ltd. held 107993698 shares accounting for 25.31%. Shareholders of non-tradable

shares repaid 3289780 shares in consideration of the split share structure in 2007. Shareholders of

non-tradable shares repaid 1196000 shares in consideration of the split share structure in 2009.On 2 September 2016 Beijing Wanfa Real Estate Development Co. Ltd. the original controlling

shareholder transferred all of its 112479478 shares to Beijing Grain Group Co. Ltd. (hereinafter

referred to as "Beijing Grain Group"). Upon completion of the share transfer in September 2016

Beijing Grain Group Co. Ltd. held 112479478 shares accounting for 26.36% of the total shares of

the Company. In November 2016 based on the confidence in the subject matter of the material asset

restructuring and the future development of the Company Beijing Grain Group Co. Ltd. decided to

increase its shareholding through centralized bidding in the secondary market. After the increase it

held 123561963 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

the material assets restructuring plan and the delivery agreement. On September 14 2017 approved

pursuant to the resolution of the Second Extraordinary General Meeting of Shareholders of the

Company on November 18 2016 and the Approval Reply of the China Securities Regulatory

Commission dated July 28 2017 On Approval of Hainan Pearl River Holding Co. Ltd. to Purchase

Assets and Raise Supporting Funds from Beijing Grain Group Co. Ltd. (ZJXK (2017) No.1391): 1)

The Company purchased assets from the original shareholders of Beijing Grain Food Co. Ltd.(hereinafter referred to as Beijing Grain Food) by issuing 210079552 shares of the balance between

the transaction price of the injected assets and the assets to be purchased (the difference between thetransaction price of the injected assets and the assets to be purchased was RMB 1699.5436 million

yuan). The par value in the issuance was RMB 1.00 per share and the issuance price was RMB 8.09 per

share; 2) The Company has issued 48965408 non-public shares of the Company to Beijing Grain

Group for the purpose of purchasing the supporting funds raised from the assets of the issuance of

shares. The par value per share of the Company was RMB1.00 and the issuance price was RMB8.82

per share. The shareholder Beijing Grain Group conducted subscription in monetary funds. Upon

completion of the issue the registered capital was RMB 685790364.00 and the share capital was

RMB 685790364.00. Beijing Grain Group which accounted for 42.06% of the total number of shares

became the largest shareholder of the Company.On November 21 2019 with the approval of Beijing Shounong Food Group Co. Ltd. (Beijing

Shounong Food publish [2019] No. 212) Approval on the Plan of Purchasing Assets by Cash and

Issuing Shares of Hainan Jingliang Holdings Co. Ltd On April 2020 with the approval of Approval

of Hainan Jingliang Holding Co. Ltd. Issuance Shares to Wang Yuecheng to Purchase Assets by China

Securities Regulatory Commission [2020] No. 610 the company shall not issue more than 41159887

new shares in private offering to raise funds supporting the purchase of assets through the issued shares.The Company and its subsidiary Beijing Jingliang Food Co. Ltd. purchased the 25.1149% equity

stake of Zhejiang Little Prince by cash and issuance of shares.As of December 31 2021 the company has issued 726950251.00 shares and the company's

share capital is 726950251.00 yuan; Uniform Social Credit Code: 914600002012845568;

Registration authority: Hainan Market Supervision Administration; Company type: Limited Company

(Listed State-controlled); Registered address: F29 Dihao Building Pearl River Square Binhai

Avenue Haikou City; Legal representative: Li Shaoling.

2. The nature of the Company's business and its main business activities

The Company belongs to manufacturing-agricultural and sideline food processing industry. Its

main business ativites mainly includes: food beverages agricultural and sideline products

vegetable proteins and their products organic fertilizers microbial fertilizers production and

marketing of agricultural fertilizers; land consolidation soil remediation; agricultural comprehensive

planting development animal husbandry 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 and export trade in goods and technology; rental

of own premises.The Company and its subsidiaries are principally engaged in the processing production and sales

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

company is Beijing shounong Food Group Co. Ltd.

4. The approval institution and the approval date of the financial statements.

These financial statements have been approved and reported by the Board of Directors of the

Company in its resolution dated March 29 2022.

5. Consolidation scope

The consolidated scope of the consolidated financial statements of the company is determined on

the basis of control including the financial statements of the company and all subsidiaries.Subsidiaries refer to enterprises or entities controlled by the Company.A total of 18 subsidiaries of the Company were included in the scope of consolidation on 31

December 2021 as detailed in Note 8 "Interests in Other Entities". The consolidation scope of the

Company for the current period is same as the previous period as detailed in Note 7 "Change in

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

financial statements are prepared in accordance with the relevant provisions of Accounting Standard

for Business Enterprises and the following stated Significant Accounting Policies and Estimates.

2. Going concern

The Company has a going concern capability for 12 months from the end of the reporting period

and no material matters affecting the company's going concern capability were found. Therefore the

financial statements are presented on a going concern basis is reasonable.III. Significant Accounting Policies and Estimates

The Company and its subsidiaries are engaged in the processing production and sales of food

agricultural and sideline products grease oil and leisure food. According to the characteristics of

actual production and operation and the provisions of relevant accounting standards for business

enterprises the Company and its subsidiaries have formulated a number of specific accounting

policies and accounting estimates for transactions and events such as revenue recognition. For detailsplease refer to the descriptions in Note Ⅲ 26 “Revenue". For descriptions of the significantaccounting judgments and estimates made by the management please refer to Note Ⅲ 32“Significant Accounting Judgments and Estimates"1. Statement of Compliance of Accounting Standards for Business EnterprisesThe financial statements prepared by the Company based on the above preparation basis conform

to the requirements of the Accounting Standards for Business Enterprises and their application

guidelines explanations and other relevant provisions (collectively referred to as "ASBE") and truly

and completely reflect the Company's financial status operating results cash flow and other relevant

information.In addition the preparation of this financial report refers to the Rules for Preparation and

Reporting Information Disclosure of Companies Offering Securities to the Public No.15-General

Provisions on Financial Reports revised by China Securities Regulatory Commission in 2014 and the

presentation and disclosure requirements in Notice on Matters Related to the Implementation of the

New Accounting Standards for Enterprises by Listed Companies (Accounting Department Letter

[2018] No. 453)

2. Accounting Period and Business Cycle

The accounting period of the Company is divided into an annual period and an interim period.The accounting interim period refers to the reporting period shorter than a full accounting year. The

fiscal year of the Company adopts the Gregorian calendar year that is from January 1 to December 31

of each year.The normal business cycle is the period from the time the Company purchases assets for

processing to the time when cash or cash equivalents are realized. The Company uses 12 months as an

business cycle and uses it as a liquidity classification standard for assets and liabilities.

3. Bookkeeping Standard Currency

RMB is the currency in the main economic environment in which the Company and its domestic

subsidiaries operate. The Company and its domestic subsidiaries use RMB as the bookkeeping

standard currency. The offshore subsidiaries of the Company determine USD as their bookkeeping

standard currency based on the currencies in the main economic environment in which they operate.The currency used by the Company in preparing these financial statements is RMB.

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

Different Control

Business Combination refers to the transaction or event in which two or more separate enterprises

are merged to form one reporting entity. Business combination can be divided into business

combination under the same control and business combination under different control.

(1) Business combination under the same control

Enterprises participating in the combination are ultimately controlled by the same party ormultiple parties before and after the combination and the control is not temporary so it is the business

combination under the same control. In case of business combination under the same control the party

that obtains control of 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 date refers 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 the

merged party at the date of consolidation including goodwill that was formed during acquisition by

end controller . 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) is insufficient to offset the retained earnings shall be adjusted.The direct expenses incurred by the merging party for the purpose of business combination shall

be included in the profits and losses of the current period when they are incurred.

(2) Business combination under different control

If the enterprises participating in the merger are not ultimately controlled by the same party or

multiple parties before and after the merger the enterprise merger is not under the same control. In case

of business combination under different control the party that obtains control of other enterprises

participating in the combination on the date of purchase shall be the Purchaser and the other

enterprises participating in the combination shall be the Purchasee. Purchase date means the date on

which the Purchaser actually acquires control of the Purchasee.For business combination under different control the merger cost includes the assets liabilities

and fair value of equity securities issued by the Purchaser in order to obtain the control over the

Purchasee on the date of purchase and the intermediary fees such as audit legal service appraisal and

consultation and other management fees for the enterprise merger are used to record into the profits

and losses of the current period when incurred. The transaction costs of equity or debt securities issued

by the Purchaser as a merger consideration are included in the initial recognition amount of the equity

or debt securities. Contingent consideration involved shall be included in the consolidation cost at its

fair value at the purchase date and the consolidation goodwill shall be adjusted accordingly if new or

further evidence of the existence of circumstances at the purchase date appears within 12 months after

the purchase date and the adjustment or consideration is required. The consolidation cost incurred by

the Purchaser and the identifiable net assets acquired during the consolidation are measured at the fair

value at the date of purchase. The difference between the merger costs and the fair value shares of the

identifiable net assets of the Purchasee at the purchase date obtained in the merger is recognized asgoodwill. If the combined cost is less than the fair value 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 be re-checked. If the consolidation cost

is still smaller than the fair value share of the identifiable net assets of the Purchased obtained in the

consolidation after the re-check the difference shall be recorded into the profits and losses of the

current period.When the Purchaser acquires the deductible temporary difference of the Purchasee if it fails to

recognize the deferred income tax assets on the date of purchase because it does not meet the

recognition conditions for the deferred income tax and within 12 months of the date of purchase new

or further information 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 are expected to be realized the relevant deferred income tax assets shall be

recognized and the goodwill shall be reduced. If the goodwill is not sufficiently offset the difference

shall be recognized as the current profit or loss; In addition to the above circumstances the deferred

income tax assets related to the enterprise merger are recognized and included in the current profits and

losses.Through multi-transaction and step-by-step business combination under different control

according to the Circular of the Ministry of Finance on Printing and Issuing the Interpretation of

Accounting Standards for Business Enterprises No.5 (CK (2012) No.19) and Article 51 of the

Accounting Standards for Business Enterprises No.33-Consolidated Financial Statements on the

judgment criteria of "package deal" (see 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 the preceding paragraphs of this section and

Note 3 13 "Long-term Equity Investments"; If the transaction is not a "package deal" the accounting

treatment shall be distinguished between the individual financial statements and the consolidated

financial statements:

In the individual financial statements the sum of the book value of the equity investment held by

the Purchaser prior to the purchase date and the cost of the new investment at the purchase date shall be

taken as the initial investment cost of the investment; Where the equity of the Purchased held before

the date of purchase involves other comprehensive income the other consolidated income associated

with the investment 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 net assets of the defined benefit plan remeasured in accordance with the equity method

the rest is transferred to the current investment income).In the consolidated financial statements the equity of the Purchased held prior to the date of

purchase is remeasured according to the fair value of the equity at the date of purchase and the

difference between the fair value and the carrying value is included in the investment income of the

current period; Where the equity of the Purchasee held before the date of purchase involves other

comprehensive income other consolidated income related thereto shall be accounted for on the same

basis as the direct disposal of the relevant assets or liabilities by the Purchaser (i.e. except for the

corresponding share in the change caused by the acquisition of the net liability or net asset of the

defined benefit plan remeasured in accordance with the equity method the rest 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 influence the amount of such return. The scope of the merger includes the Company and all

its subsidiaries. Subsidiary refers to the main body controlled by the Company.The Company will re-evaluate the above control definitions once the relevant facts and

circumstances change which results in the change of the relevant elements.

(2) Preparation method of consolidated financial statement

The Company begins to incorporate the net assets of the subsidiary and the actual control of the

production and operation decisions into the scope of the merger from the date when the subsidiary is

acquired; Cease to be included in the scope of the merger as of the date of loss of effective control. For

the subsidiaries disposed of the operating results and cash flows prior to the date of disposal have been

appropriately included in the consolidated income statement and consolidated cash flow statement;

For subsidiaries disposed of in the current period the opening amount of the consolidated balance

sheet is not adjusted. The operating results and cash flows of subsidiaries increased by consolidation

after purchase have been properly included in the consolidated income statement and consolidated

cash flow statement and the opening and comparative amounts in the consolidated financial

statements have not been adjusted for subsidiaries that are not under the same control. The operating

results and cash flows of the subsidiaries increased by consolidation under the same control from the

beginning of the consolidation period to the consolidation date have been appropriately included in the

consolidated profit statement and consolidated cash flow statement and the comparative amount of the

consolidated financial statements has been adjusted at the same time.In the preparation of the consolidated financial statements if the accounting policies oraccounting periods adopted by the subsidiaries are inconsistent with those adopted by the Company

necessary adjustments shall be made to the financial statements of the subsidiaries in accordance with

the accounting policies and accounting periods of the Company. For subsidiaries acquired through

business combination under different control the financial statements shall be adjusted on the basis of

the fair value of identifiable net assets at the date of purchase.All significant transaction balances transactions and unrealized profits within the Company are

offset at 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 by the Company for the current period are separately presented as minority shareholders' equity

and minority shareholders' profit or loss in the consolidated financial statements under shareholders'

equity and net profit. The shares of minority shareholders' equity in the net profits and losses of

subsidiaries for the current period are shown as "minority shareholders' profits and losses" under the

net profit item in the consolidated income statement. 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 of shareholders' equity.When the control of the original subsidiary is lost due to the disposal of part of the equity

investment or other reasons the residual equity shall be revalued according to its fair value at the date

of loss of control. The sum of consideration obtained from the disposal of equity and the fair value of

the remaining equity minus the difference between the shares of the net assets of the original

subsidiary that shall be continuously calculated from the purchase date according to the original

shareholding proportion shall be included in the investment income of the current period of loss of

control. Other comprehensive income related to the equity investment of the original subsidiary in the

event of loss of control the accounting treatment is performed on the same basis as the direct disposal

of the relevant assets or liabilities by the Purchased (i.e. converted to current investment income

except for changes resulting from the re-measurement of the net liabilities or net assets of the Defined

Benefit Plan in the original subsidiary). Thereafter the residual equity shall be subsequently measured

in accordance with the relevant provisions of Accounting Standards for Business Enterprises

No.2-Long-term Equity Investment or Accounting Standards for Business Enterprises

No.22-Recognition and Measurement of Financial Instruments as detailed in Note Ⅲ 13-Long-term

Equity Investment or Note Ⅲ 9-Financial Instruments.If the Company disposes of the equity investment in subsidiaries step by step until it loses control

through multiple transactions. It is necessary to distinguish whether the transactions that dispose of the

equity investment in subsidiaries until it loses control belong to a package deal or not. The terms

conditions and economic impact of the transactions for the disposal of equity investments insubsidiaries are in accordance with one or more of the following circumstances and generally indicate

that multiple transactions should be accounted for as a package deal: * These transactions were

entered into simultaneously or taking into account each other's influence; * Only when these

transactions are taken together can a complete business result be achieved; * The occurrence of one

transaction depends on the occurrence of at least one other transaction; * It is not economical to

consider a transaction alone but it is economical to consider it in conjunction with other transactions.For transactions that are not part of the package deal each transaction shall be accounted for in

accordance with the principles applicable to the "partial disposal of long-term equity investments in

subsidiaries without loss of control" (as detailed in 13 of Note Ⅲ) and the "loss of control 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 equity

investments in subsidiaries until the loss of control belong to a package deal the transactions shall be

accounted for as a transaction involving the disposal of subsidiaries and the loss of control; However

the difference between each disposal price and the share of the subsidiary's net assets corresponding to

the disposal 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 of loss of control.

6. Classification of Joint Venture Arrangements and Accounting Treatment of Joint

Operation

A joint venture arrangement is an arrangement under the joint control of two or more participants.The Company divides the joint venture arrangement into joint operation and joint venture in

accordance with the rights and obligations it enjoys in the joint venture arrangement. A joint operation

is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the

assets and obligations for the liabilities relating to the arrangement. A joint venture is a type of joint

arrangement whereby the parties that 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

be treated in accordance with the accounting policy described in Note Ⅲ 13 "Long-term Equity

Investment Accounted by the Equity Method".The Company as a joint venture party recognizes the assets and liabilities held and assumed by

the Company separately and recognizes the assets and liabilities jointly held and assumed by the

Company according to the shares of the Company; recognizes the revenue generated from the sale of

the share of joint operating output enjoyed by the Company; recognizes revenue generated from the

sale of output from joint operations on the basis of the Company's share; confirms the expensesincurred by the Company individually and 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

the same below) or purchases assets from the joint venture the Company recognizes only the portion

of the profits and losses attributable to the other participants in the joint venture that arises from the

transaction prior to the sale of such assets to a third party. Where such assets are impaired in

accordance with the provisions of Accounting Standards for Business Enterprises No.8-Impairment of

Assets the Company shall fully 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 losses according to the shares it assumes.

7. Determining Standards for Cash and Cash Equivalent

Cash and cash equivalents of the Company include cash on hand deposits that can be readily

withdrawn on demand. Cash equivalents are investments held by the Company with a short term

(usually maturing within three months from the date of purchase) high liquidity readily convertible to

known amounts of cash and which are subject to an insignificant risk of changes in value.

8. Foreign Currency Business and Translation of Foreign Currency Statements

(1) Translation method for foreign currency transaction

At the time of initial confirmation the foreign currency transactions occurring in the Company

shall be 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 occurring in the Company shall be converted into the bookkeeping functional currency

amount at the actual exchange rate.

(2) Translation method for foreign currency monetary items and foreign currency non-monetary

item

On the balance sheet date the foreign currency monetary items are converted at the spot exchange

rate on the balance sheet date and the exchange difference arising therefrom shall be: * The

exchange difference arising from the special foreign currency borrowings related to the acquisition and

construction of assets eligible for capitalization shall be handled in accordance with the principle of

capitalization of borrowing costs; * The exchange difference of the hedging instruments used for

effective hedging of the net investment in overseas operations (the difference is included in other

comprehensive income and is not recognized as current profit or loss until the net investment is

disposed of); * Except for the amortized cost the exchange differences arising from the changes in

the book balance of the available-for-sale monetary items in foreign currencies shall be included in theother comprehensive income and shall be included in the profits and losses of the current period.Where the preparation of the consolidated financial statements involves overseas operations if

there are foreign currency monetary items constituting net investment in overseas operations the

exchange differences arising from exchange rate changes shall be included in other comprehensive

income; When disposing of overseas operations the profits and losses shall be transferred to the

current disposal period.Non-monetary items in foreign currencies measured at historical cost shall still be measured at the

bookkeeping amount in functional currency translated at the spot exchange rate on the transaction date.For non-monetary items in foreign currencies measured at fair value the spot exchange rate at the date

of fair value determination shall be adopted for conversion. The difference between the converted

amount in functional 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 period or recognized as other comprehensive income.

(3) Translation method for financial statements in foreign currencies

Where the preparation of the consolidated financial statements involves overseas operations if

there are foreign currency monetary items constituting net investment in overseas operations the

exchange differences 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 and losses shall be transferred to the current disposal period.The foreign currency financial statements of overseas operations shall be converted into RMB

statements in the following ways: the assets and liabilities in the balance sheet shall be converted at

the spot exchange rate on the balance sheet date; Except for "undistributed profits" other items of

shareholders' equity shall be converted at the spot exchange rate at the time of occurrence. The

income and expense items in the profit statement shall be converted at the average exchange rate of

the current period on the date of transaction. The undistributed profit at the beginning of the period

shall be the undistributed profit at the end of the period converted from the previous year; The

undistributed profits at the end of the year shall be calculated and listed according to the converted

profits distribution items; The difference between the converted asset items and the total amount of

the liability items and shareholders' equity items shall be recognized as other comprehensive income

as the translation difference in the foreign currency statements. In case of disposal of overseas

operations and loss of control the balance in translation of the foreign currency statements related to

the overseas operations as shown below in the shareholders' equity items in the balance sheet shall be

transferred to the profits and losses of the disposal period in whole or in proportion to the disposal of

the overseas operations.Cash flows in foreign currencies and cash flows of overseas subsidiaries shall be converted at

the average exchange rate of the current period on the date of occurrence of the cash flows. The

effect of exchange rate changes on cash shall be presented separately in the statement of cash flows

as an reconciling item.Opening amounts and prior-period actual amounts shall be shown on the basis of amounts

translated from the prior-period financial statements.When disposing of all the owner's equity of the Company's overseas operations or losing the

control over overseas operations due to the disposal of part of the equity investment or for other

reasons if the following items of shareholders' equity in the balance sheet are shown below the

balance in translation of the foreign currency statement attributable to the owner's equity of the

parent company related to the overseas 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 of the equity investment or for other reasons but the control over overseas business operations is

not lost the balance in the translation of the foreign currency statements related to the disposal of

part of overseas business operations shall be attributed to minority shareholders' interests and shall

not be transferred to the profits and losses of the current period. When disposing of part of the equity

of an overseas operation as an associated enterprise or a joint venture the balance of the translation

of the foreign currency statements related to the overseas operation shall be transferred into the

profits and losses of the current disposal period 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

same time form the financial liabilities or equity instruments of other entities.

(1) Classification confirmation and measurement of financial assets

According to the business mode of managing financial assets and the contractual cash flow

characteristics of financial assets the Company divides financial assets into: Financial assets

measured at amortized cost. Financial assets measured at fair value with changes included in other

comprehensive income. Financial assets that are measured at fair value and whose movements are

included in the current profits and losses.Financial assets are measured at fair value at initial recognition. For financial assets measured at

fair value and whose changes are included in current profits and losses relevant transaction costs are

directly included in current profits and losses. For other types of financial assets relevant transaction

costs are included in the initial recognition amount. Accounts receivable or notes receivable arisingfrom the sale of products or the provision of labor services that do not contain or take into account

significant financing components shall be initially recognized by the Company in accordance with

the amount of consideration that the Company is expected to be entitled to receive.* Financial assets measured at amortized cost

The Group measures financial assets at amortised cost if both of the following conditions are

met : the financial asset is held within a business model with the objective to hold financial assets in

order to collect contractual cash flows; the contractual terms of the financial asset give rise on

specified dates to cash flows that are solely payments of principal and interest on the principal

amount outstanding that is the cash flow generated on a specific date is only the payment of

principal and interest based on the unpaid principal amount. For such financial assets the Company

adopts the effective interest rate method and carries out subsequent measurement according to

amortized cost. The profits or losses arising from amortization or impairment are included into the

current profits and losses.* 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 the following conditions are met: the financial asset is held within a business model with the

objective of both holding to collect contractual cash flows and selling; the contractual terms of the

financial asset give rise on specified dates to cash flows that are solely payments of principal and

interest on the principal amount outstanding. Interest income of such financial assets is recognised

based on effective interest method. The Company measures these financial assets at fair value and

their changes are included in other comprehensive income but impairment loss or gain exchange

gain or loss and interest income calculated according 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

financial assets measured at fair value with changes included in other comprehensive income. The

Company shall record the relevant dividend income of such financial assets into the current profits

and losses and the change of fair value into other comprehensive income. When the financial asset is

derecognized the accumulated gains or losses previously included in other comprehensive income

will be transferred from other comprehensive income to retained income and will not be included in

current profits and losses.* Fair value through Profit and Loss Financial assets

The Company classifies the above financial assets measured at amortized cost and financialassets measured at fair value with changes included in other comprehensive income into financial

assets measured at fair value with changes included in current profits and losses. In addition during

initial recognition in order to eliminate or significantly reduce accounting mismatch the Company

designated part of financial assets as financial assets measured at fair value with changes included in

current profit and loss. For such financial assets the Company adopts fair value for subsequent

measurement and the changes 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 at fair value and whose changes are included in current profits and losses and other

financial liabilities. For the 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 relevant transaction costs of other financial liabilities are included in the

initial recognition amount.* Financial liabilities at fair value through profit or loss

Financial liabilities measured at fair value with changes included in current profits and losses

which include transactional financial liabilities (including derivatives belonging to financial

liabilities) and financial liabilities designated to be measured at fair value with changes included in

current profits and losses at initial recognition.Trading financial liabilities (including derivatives belonging to financial liabilities) are

subsequently measured according to their fair values. Except for those related to hedge accounting

changes in fair values are included in current profits and losses.Financial liabilities designated to be measured at fair value with changes included in current

profits and losses. Changes in the fair value of this liability caused by changes in the Company's own

credit risk are included in other comprehensive income. When the liability is derecognized the

accumulated change in fair value caused by changes in its own credit risk included in other

comprehensive income is transferred to retained earnings. Changes in fair value are accounted into

current profits and losses. If the above-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 losses of the financial liabilities (including the impact amount of

changes in the credit risk of the enterprise itself) into the current profits and losses.* Other financial liabilities

Except for financial liabilities and financial guarantee contracts formed by the transfer of

financial assets that do not meet the conditions for termination of recognition or continue to be

involved in the transferred financial assets other financial liabilities are classified as financial

liabilities measured at amortized cost and subsequently measured at amortized cost. Gains or lossesarising from termination of recognition or amortization are included in current profits and losses.

(3) Basis of Confirmation and Calculation of financial instruments

Financial assets shall be derecognized if they meet one of the following conditions: * The

termination of the contractual right to receive cash flow from the financial asset. * The financial

asset has been transferred and almost all risks and rewards related to the ownership of the financial

asset have been transferred to the transferee. * The financial asset has been transferred. Although

the enterprise has neither transferred nor retained almost all risks and rewards in the ownership of the

financial asset it has given up its control over the financial asset.If the enterprise neither transfers nor retains almost all the risks and rewards of the ownership of

the financial assets and does not give up the control over the financial assets the relevant financial

assets shall be recognized according to the extent of continuous involvement in the transferred

financial assets and the relevant liabilities shall be recognized accordingly. The degree of continuous

involvement in the transferred financial assets refers to the risk level faced by the enterprise due to

the change in the value of the financial assets.If the overall transfer of financial assets meets the conditions for termination of recognition the

difference between the book value of the transferred financial assets and the sum of the consideration

received due to the transfer and the accumulated amount of changes in fair value originally included

in other comprehensive income shall be included into the current profits and losses.If the partial transfer of financial assets meets the conditions for termination of recognition the

book value of the transferred financial assets shall be apportioned according to its relative fair value

between the derecognized part and the non derecognized part and the difference between the sum of

the consideration received due to the transfer and the accumulated change in fair value originally

included in other comprehensive income that shall be apportioned to the derecognized part and the

allocated aforesaid book amount shall be included into the current profits and losses.For financial assets sold by the Company with recourse or for endorsement and transfer of held

financial 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 asset have been transferred to the transferee the recognition of the financial asset shall be

terminated. If almost all risks and rewards on the ownership of a financial asset are retained the

recognition of the financial asset shall not be terminated. If almost all risks and rewards related to the

ownership of financial assets have not been transferred or retained it shall continue to judge whether

the enterprise retains control over the assets and carry out accounting treatment according to the

principles mentioned in the preceding paragraphs.

(4) Termination of recognition of financial liabilitiesIf the current obligation of the financial liability (or part thereof) has been relieved the

Company terminates the recognition of the financial liability (or part thereof). The Company (the

borrower) and the lender sign an agreement to replace the original financial liabilities by assuming

new financial liabilities. If the contract terms of the new financial liabilities and the original financial

liabilities are substantially different the original financial liabilities shall be derecognized and a new

financial liability shall be recognized at the same time. If the Company makes any substantial

modification to the contract terms of the original financial liability (or part thereof) the original

financial liability shall be derecognized and a new financial liability shall be recognized in

accordance with the modified terms.If financial liabilities (or part thereof) are derecognized the Company shall include the

difference between its book value and the consideration paid (including transferred non-cash assets

or liabilities assumed) into the current profits and losses.

(5) Offset of financial assets and financial liabilities

When the Company has the legal right to offset the recognized amount of financial assets and

financial liabilities and such legal right is currently enforceable and the Company plans to settle the

financial assets on a net basis or realize the financial assets and settle the financial liabilities at the

same time the financial assets and financial liabilities are listed in the balance sheet at a net amount

after mutual offset. In addition financial assets and financial liabilities shall be listed separately in

the balance sheet and shall not be offset against each other.

(6) The fair value determination method of financial assets and financial liabilities

Fair value refers to the price that market participants can receive from selling an asset or pay to

transfer a liability in an orderly transaction on the measurement date. Where there is an active market

for financial instruments the Company adopts quotations in the active market to determine their fair

values. Quoted price in active market refers to the price easily obtained from exchanges brokers

industry associations pricing service agencies etc. on a regular basis and represents the price of

market transactions actually occurred in fair trading. If there is no active market for financial

instruments the Company 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 to trade reference to current fair values of other financial instruments that are

substantially the same discounting cash flow technique option pricing model etc. In valuation the

Company adopts valuation techniques that are applicable under current circumstances and are

supported by sufficient available data and other information selects input values that are consistent

with the characteristics of assets or liabilities considered by market participants in transactions

related to assets or liabilities and gives priority to the use of relevant observable input values asmuch as possible. If the relevant observable input value cannot be obtained 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

in assets after deducting all liabilities. The issuance (including refinancing) repurchase sale or

cancellation of equity instruments by the Company are treated as changes in equity and transaction

costs related to equity transactions are deducted from equity. The Company does not recognize

changes in the fair value of equity instruments.Dividends (including "interest" generated by instruments classified as equity instruments)

distributed by 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

assets measured at amortized cost and debt instrument investment measured at fair value with

changes included in other comprehensive income mainly including notes receivable accounts

receivable other receivables debt investment other debt investment long-term receivables etc. In

addition for some financial guarantee contracts impairment reserves and credit impairment losses

are also accrued in accordance with the accounting policies described in this part.

(1) Recognition method of impairment provision

On the basis of expected credit losses the Company sets aside impairment reserves and

recognizes credit impairment losses for the above items according to the applicable expected credit

loss measurement method (general method or simplified method).Credit loss refers to the difference between all contractual cash flows receivable according to

the contract and all cash flows expected to be collected by the Company discounted according to the

original actual interest rate i.e. the present value of all cash shortages. Among them for the financial

assets that have been purchased or incurred credit impairment the Company discounts them

according to the actual interest rate adjusted by credit.The general method of measuring expected credit loss refers to the Company's assessment of

whether the credit risk of financial assets has increased significantly since the initial recognition on

each balance sheet date. If the credit risk has increased significantly since the initial recognition the

Company will measure the loss reserve by an amount equivalent to the expected credit loss during

the entire period. If the credit risk has not increased significantly since the initial recognition the

Company will measure the loss reserve according to the amount equivalent to the expected creditloss in the next 12 months. In assessing the expected credit loss the Company takes into account all

reasonable and evidence-based information including forward-looking information.For financial instruments with low credit risk on the balance sheet date the Company measures

the loss reserve based on the expected credit loss amount within the next 12 months or the entire

duration according to whether the credit risk has increased significantly since the initial recognition.

(2) Criteria for judging whether credit risk has increased significantly since initial recognition

If the default probability of a certain financial asset in the expected duration determined at the

balance sheet date is significantly higher than the default probability in the expected duration

determined at the time 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 a reasonable estimate of the change of default risk in the entire duration

to determine whether the credit risk has increased significantly since the initial recognition.Generally if the overdue period is more than 90 days the Company will consider that the credit

risk of the financial instrument has increased significantly unless there is conclusive evidence that

the credit risk of the financial instrument has not increased significantly since the initial recognition.The Company will consider the following factors when evaluating whether the credit risk has

increased 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

technological environment of the debtor;

3） Whether there is any significant change in the value of the collateral or the quality of

the guarantee or credit enhancement provided by the third party which are expected to reduce the

economic motivation of the debtor's repayment according to the time limit stipulated in the contract

or affect the probability of default;

4） Whether there is any significant change in the expected performance and repayment

behavior of the debtor;

5） Whether there is any significant change in the Company's credit management methods

for financial instruments etc.On the balance sheet date if the Company judges that the financial instrument has only low

credit risk the Company assumes that the credit risk of the financial instrument has not increased

significantly since the initial recognition. If the default risk of a financial instrument is low the

borrower's ability to perform its contractual cash flow obligations in a short period of time is strong

and even if there are adverse changes in the economic situation and operating environment for a long

period of time it may not necessarily reduce the borrower's ability to perform its contractual cash

obligations then the financial instrument is considered to have low credit risk.

(3) Judgment criteria for financial assets with credit impairment:

When one or more events have an adverse impact on the expected future cash flow of a

financial asset the financial asset becomes a financial asset with credit impairment. The evidence of

credit impairment of financial assets includes the following observable information:

1） The issuer or debtor has major financial difficulties;

2） The debtor violates the contract such as default or overdue payment of interest or

principal etc.;

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

circumstances due to economic or contractual considerations related to the debtor's financial

difficulties;

4） The debtor is likely to go bankrupt or undergo other financial restructuring;

5） The active market of the financial assets disappears due to the financial difficulties of

the issuer or the debtor;

6） Purchase or generate a financial asset at a substantial discount which reflects the fact

that credit losses have occurred.Credit impairment of financial assets may be caused by the combined action of multiple events

but may not be caused by separately identifiable events.

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

The Company evaluates credit risks for financial assets with significantly different credit risks

such as: Accounts receivable with related parties. Receivables in dispute with the other party or

involving litigation or arbitration. Receivables with obvious signs that the debtor is likely to be

unable to perform the repayment obligation.In addition to the financial assets with individual credit risk assessment the Company divides

the financial assets into different groups based on the common risk characteristics. The common

credit risk characteristics adopted by the Company include: Credit risk shall be assessed on the basis

of the aging portfolio the receivables portfolio between the final controlling party and its

subordinate units the public maintenance 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 the unit.

(5) Accounting treatment method for impairment of financial assets

At the end of the period the Company calculates the estimated credit losses of various financial

assets. If the estimated credit losses are greater than the book amount of its current impairment

reserve the difference is recognized as impairment loss. If it is less than the carrying amount of the

current impairment reserve the difference is recognized as impairment gain.

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

* Notes receivable

The Company measures the loss reserve for bills receivable according to the expected credit

loss amount equivalent to the entire duration. Based on the credit risk characteristics of bills

receivable they are divided into different portfolios:

Item Basis for determining portfolio

Bank acceptance bills The acceptor is a bank with less credit risk

According to the acceptor's credit risk classification it should be

Commercial acceptance bill

the same as the "receivable" portfolio classification.* Accounts receivable and other receivables

For receivables that do not contain significant financing components the Company measures

the loss reserve according to the expected credit loss amount equivalent to the entire duration.For receivables that contain significant financing components the Company measures the loss

reserve based on whether the credit risk has increased significantly since the initial recognition using

the amount of expected credit loss within the next 12 months or the entire duration.According to whether the credit risk of other receivables has increased significantly since the

initial recognition the Company measures impairment loss with an amount equivalent to the

expected credit loss within the next 12 months or the entire duration.In addition to the accounts receivable and other receivables that individually assess credit risk

they are divided into different portfolios based on their credit risk characteristics:

Item Basis for determining portfolioItem Basis for determining portfolio

Portfolio 1 Aging portfolio

A portfolio of receivables between the ultimate controller and its subordinate

Portfolio 2

units

The portfolio of public maintenance funds and house sales funds deposited in the

Portfolio 3

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

According to the accrual proportion

Aging portfolio

corresponding to the aging period

Portfolio of receivables between the ultimate Referring to the historical credit loss

controlling party and its subordinate units experience combined with the current

The portfolio of public maintenance funds and house situation and the forecast of future

sales funds deposited into the MPF Management Center economic conditions the expected credit

loss is calculated thr-ough the default risk

Deposit/margin portfolio exposure and the expected credit loss rate

The portfolio of reserve fund ledger formed by the within the next 12 months or the entire

Company's staff loan. duration and the expected credit loss rate

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

Expected loss rate of Expected loss rate of

Expected loss rate of

Aging notes receivable (%) accounts receivable

other receivables (%)

(%)

Within 1 year (including 1

year the same below)

Among them: Within the credit 0 0 0

period (within 3 months)

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

other methods is given.Expected loss rate Expected loss rate of Expected loss rate

Aging of notes accounts receivable of other receivables

receivable (%) (%) (%)

Accounts receivable between the final 0 0 0

controlling party and its subordinate

Public maintenance fund and house sale 0 0 0

fund deposited into MPF Management

Center

Deposit/margin 0 0 0

The reserve fund ledger formed by the 0 0 0

Company's staff loan.

11. Inventory

(1) Classification of inventory

Inventories mainly include raw materials work in progress finished goods in transit materials

inventory 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 and other expenditures. The actual cost of inventories upon delivery is calculated using the

weighted average method.

(3) Confirmation of net realizable value of inventories and method of accrual of falling price

reserve

Net Realizable Value refers to the amount of estimated selling price of inventories minus the

estimated cost till completion estimated expenses for selling activity and related taxes and fees in

daily activities. When determining the net realizable value of inventories solid evidence obtained

shall be the basis and the purpose of holding the inventories and the impact of events after the

balance sheet date shall be considered.On the balance sheet date inventories shall be measured at lower of cost and net realizable

value. When the net realizable value is lower than the cost the provision for inventory devaluation

shall be accrued. The provision for inventory devaluation shall be accrued based on the difference

between the cost of a single inventory item and its net realizable value. The provision for inventory

devaluation of a large number of inventories with low unit prices shall be based on the type of

inventory; for inventories related to the product range produced and sold in same region having the

same or similar end use or purpose and difficult to be separated from other items for measurement

their provision for inventory devaluation can be combined and accrued.After the provision for inventory devaluation is accrued if the factors cause the previous

written-down inventory value have disappeared and the situation results in the fact that the net

realizable value of the inventories higher than the book value the amount of the provision for

inventory devaluation that has been accrued shall be reversed and included in the current period

profit or loss.

(4) The Company adopts perpetual inventory system as its inventory system.

(5) Amortization method of low-value consumables and packaging materials

Low-value consumables are amortized by one-off amortization method when they are received;

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

be recovered principally through a sale transaction rather than through continuous use. The following

conditions need to be simultaneously met to be classified as held for sale: a non-current asset or

to-be-disposed portfolio can be sold immediately under the current conditions based on the practice

of selling such asset or to-be-disposed portfolio in similar transactions; the Company has already

decided on the sale plan and obtained confirmed purchase commitment; the sale is scheduled to be

completed within one year. Among them a Disposal Portfolio refers to a group of assets that will be

disposed of as a whole through sale or other approaches in a transaction and the liabilities directly

associated with these assets transferred along with the assets in transaction. If the portfolio of assets

or group of portfolios of assets is allocated goodwill acquired in business merger in accordance with

Accounting Standards for Business Enterprises 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 been

designated as held-for-sale category is higher than the net amount of fair value less sales expenses

when the non-current asset or to-be-disposed portfolio is initially measured or measured on the

balance sheet date the book value shall be to the net amount of fair value minus sales expenses and

the written-down amount shall be recognized as asset impairment loss and included in current period

profit or loss. The provision for impairment loss of the held-for-sale asset shall be accrued. For a

Disposal Portfolio the confirmed impairment loss shall deduct the book value of the goodwill in the

Disposal Portfolio then deduct the book value of the non-current assets determined by the

measurement on a pro-rata basis in accordance with the applicable Accounting Standards for

Business Enterprises No. 42 held-for-sale non-current assets Disposal Portfolio and Termination of

Operations (hereinafter referred to as the “Guide for Held-For-Sale”). In the event of an increase ofthe book value of the held-for-sale Disposal Portfolio minus sales expenses on the subsequent the

balance sheet date the amount previously written down shall be recovered and be reversed within the

mount of the asset impairment loss recognized in the non-current assets measured by the

measurement “Guide for Held-For-Sale” after being classified as held for sale asset the reversal

amount shall be included in the current period profit or loss and the book value of all non-current

assets (except for goodwill) determined by the measurement on a pro-rata basis in accordance with

the applicable “Guide for Held-For-Sale” shall be increased on a pro-rata basis. The book value of

the goodwill that has been deducted and the impairment loss of the assets recognized before theclassification of the held-for-sale non-current assets in accordance with the applicable “Guide forHeld-For-Sale” shall not be reversed.In terms of the held-for-sale non-current assets or non-current assets in Disposal Portfolio there

is no accrual or amortization for depreciation and the interest from and other expenses from the

liabilities in held-for-sale Disposal Portfolio shall still be recognized.When a non-current asset or Disposal Portfolio no longer meets the conditions for

Held-For-Sale category non-current asset or Disposal Portfolio will no longer be classified as

Held-For-Sale category by the Company or the non-current asset will be removed from the

Held-For-Sale Disposal Portfolio and be measured based on one of the following two values

whichever is lower: (1) The book value before being classified as held-for-sale category adjusted

based on the depreciation amortization or impairment that should have be confirmed if it is not

classified as held-for-sale category; (2) recoverable amount.

13. Long-term equity investment

The long-term equity investment refers to in this part refers to the long-term equity investment

that the Company has control joint control or significant influence on the invested entity. The

long-term equity investment of the Company that does not have control joint control or significant

impact on the investee shall be accounted as a financial asset measured at fair value with its changes

included into the current profits and losses. Among them if it is non-transactional the Company may

choose to designate it as a financial asset measured at fair value and its changes are included in the

accounting of other comprehensive income at the time of initial recognition. For details of itsaccounting policies please refer to Note Ⅲ 9 “Financial Instruments".Joint control refers to the control that the Company shares with other party/parties for an

arrangement in accordance with relevant agreements and relevant activities of the arrangement can

only be decided based on the consensus of all parties sharing the control rights before making a

decision. Significant Influence refers to power of the Company to participate in the decision-making

of the financial and operating policies of the investee but the Company cannot control or jointlycontrol the development of these policies with other parties.

(1) Determination of investment cost

For a long-term equity investment obtained from a combination of businesses under the same

control the apportioned share of the book value in the final controller's consolidated financial

statements on the combination date in accordance with the shareholders' equity shall be the initial

investment cost of the long-term equity investment. The capital reserve shall be adjusted subject to

the difference between the initial 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 retained earnings shall be adjusted. Where the equity securities are

issued as merger consideration the apportioned share of the book value in the final controller's

consolidated financial statements on the combination date in accordance with the shareholders'

equity shall be the initial investment cost of the long-term equity investment and the total par value

of the issued shares is taken as the share capital. The capital reserve shall be adjusted subject to the

difference between the initial investment cost of the long-term equity investment 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 is obtained 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” the

apportioned share of the book value in the final controller's consolidated financial statements on the

combination date in accordance with the shareholders' equity shall be the initial investment cost of

the long-term equity investment. The capital reserve shall be adjusted subject to the difference

between the initial investment cost of the long-term equity investment and the sum of the book value

of long-term equity investment before combination date and the book value of the new consideration

for the new share on the combination date. If the capital reserve is insufficient for offsetting the

retained earnings shall be adjusted. The equity investments that are held prior to the combination

date and are recognized with equity recognized or as available-for-sale financial asset as other

comprehensive income will not be given accounting treatment for the moment.For a long-term equity investment obtained from a combination of businesses not under the

same control the initial investment cost of the long-term equity investment shall be based on the

combination cost on the purchase date. The combination cost includes the assets paid by purchaser

the liabilities incurred or assumed and the sum of the fair value of issued equity securities. Where

the equity of combined parties not under the same control is obtained through multiple transactions

and a business combination under the same control is formed finally it shall be treated differentiallybased 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” the initial investment cost of

the long-term equity investment calculated by the cost method shall be calculated based on the sum

of the book value of the equity investment in the original holder and the new investment cost. The

original share holding that measured using equity method the relevant other comprehensive income

does temporarily not conduct accounting treatment.Intermediary expenses such as for auditing legal services assessment and other related

expenses incurred by a combining party or a purchaser for business combination shall be recognized

in current period 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

the acquisition of long-term equity investment: the purchase price in cash actually paid by the

Company; the fair value of the equity securities issued by the Company the value agreed in relevant

investment contract or agreement; the fair value or original book value of the assets exchanged in

non-monetary asset exchange transaction; the fair value of the long-term equity investment itself.Any expenses taxes and other necessary expenses directly related to the acquisition of long-term

equity investments shall also be included in the cost of investment. The cost of long-term equity

investment for the additional investment that can exert significant influence on investee or

implement joint control but does not constitute control shall be the sum of the fair value of the

originally held equity investment recognized in accordance with the Accounting Standards for

Business Enterprises No.. 22 – Recognition and Measurement of Financial Instruments and the cost

for new investment.

(2) Follow-up measurement and confirmation methods for profit and loss

The Equity Method shall be used to account for long-term equity investments that have joint

control over the invested entity (except for those constituting joint operators) or have significant

impact on the invested entity. In addition the company's financial statements use the Cost Method to

account for long-term equity investments which can control the long-term equity investment of the

investee.a. Long-term equity investment based on Cost Method

When accounting with Cost Method long-term equity investment is priced at the initial

investment cost 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 included in the consideration but not yet issued the current investment income

shall be recognized according to the cash dividends or profits declared by the investee.b. Long-term equity investment accounted for by Equity Method

When accounting with Equity Method if the initial investment cost of a long-term equity

investment is greater than the fair value share of the identifiable net assets of the investee when

investing and the initial investment cost of the long-term equity investment shall not be adjusted; if

the initial investment cost is less than the fair value share of the identifiable net assets of the investee

when investing the difference shall be included in the current profit and loss and the cost of the

long-term equity investment shall be adjusted

When accounting with Equity Method the investment income and other comprehensive income

are recognized separately according to the shares of the net profit or loss and other comprehensive

income that should be enjoyed or shared and the book value of the long-term equity investment

should be adjusted at the same time. The book value of long-term equity investment is reduced

accordingly by calculating the share that should be enjoyed according to the profit or cash dividend

declared by the investee. The book value of long-term equity investment shall be adjusted and

included in the capital reserve for other changes in the owner's rights and interests of the invested

entity other than the net profit and loss other comprehensive income and profit distribution. When

confirming the share of the net profit and loss of the investee the net profit of the investee shall be

adjusted and confirmed on the basis of the fair value of the identifiable assets of the investee at the

time of investment. If the accounting policies and periods adopted by the invested entity are

inconsistent with the Company the financial statements of the invested entity shall be adjusted in

accordance with the accounting policies and periods of the Company and the investment income and

other comprehensive income shall be confirmed accordingly. For the transactions between the

Company and the associates and joint ventures the assets invested or sold do not constitute a

business and the unrealized gains and losses from internal transactions are offset against the portion

of the Company that is attributable to the proportion of the shares on this basis. investment profit

and loss should be confirmed. However the unrealized internal transaction losses incurred by the

Company and the investee are not included in the impairment losses of the transferred assets. Where

the assets invested by the Company into a joint venture or an associates constitute a business if the

investor obtains long-term equity investment but does not control the fair value of the invested

business shall be deemed as the initial investment cost of the new long-term equity investment and

the difference between the initial investment cost and the book value of the invested business is fully

recognized in the current profits and losses. If the assets sold by the Company to a joint venture or an

associate that constitute a business the difference between the consideration value obtained and the

book value of the business shall be fully recognized in the profits and losses of the current period.When confirming the net loss that incurred by the investee should be shared the book value ofthe long-term equity investment and other long-term equity that substantially constitutes the net

investment of the investee are reduced to zero. In addition if the Company has an obligation to bear

additional losses to the investee the estimated liabilities shall be recognized according to the

estimated obligations and included in the current investment losses. If the investee achieves net profit

in the following period the Company shall resume recognizing the share of 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 the first time before the implementation of the new accounting standards if there is a debit

balance of equity investments related to the investment the current profits and losses shall be

accounted for by the straight-line amortization of the original remaining period.c. Acquisition of Minority Equity

In the preparation of the consolidated financial statements if the difference between the

long-term equity investment added by purchasing minority shares and the net assets share that should

be continuously calculated by the subsidiary company from the purchase date (or the consolidation

date) is calculated according to the proportion of newly added shares the retained earnings shall be

adjusted; and if the capital reserve is insufficient to offset the retained earnings shall be adjusted.d. Disposal of long-term equity investment

In the consolidated financial statements the parent company partially of disposes of the

long-term equity investment of the subsidiary without losing control the difference of the

corresponding net assets in the subsidiary between the disposal price and the disposal of the

long-term equity investment is included in the shareholders' equity. it shall be treated in accordancewith the relevant accounting policies described in “Notes on the preparation of consolidated financialstatements” in Note Ⅲ.5 .For the disposal of long-term equity investment in other cases the difference between the book

value of 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 after

disposal 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 the assets or liabilities directly disposed of by the investee. The owner's equity

recognized as a result of changes in the owner's equity of the investee other than net profit or loss

other comprehensive income and profit distribution it should be carried forward to the current profit

and loss

For 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

method accounting or financial instrument recognition and measurement criteria accounting before

obtaining control over the investee shall be accounted for on the same basis as the assets or liabilities

directly disposed of by the investee and shall be settled to the current profit and loss in proportion.Changes of the net assets of investee in the owner's equity other than net profit or loss other

comprehensive income and profit distribution 's that recognized by equity method shall be settled to

the current profit and loss in proportion.Where the Company loses control over the investee due to disposal of part of its equity

investment when preparing individual financial statements if the remaining equity after disposal can

exercise joint control 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 be acquired. If the remaining equity after disposal cannot be jointly controlled or exerts

significant influence on the investee it shall be accounted for according to the relevant provisions of

the financial instrument recognition and measurement criteria and the difference between the fair

value and the book value on the date of loss of control. It is included in the current profit and loss.Before the Company obtains control over the investee other comprehensive income recognized by

equity method accounting or financial instrument recognition and measurement criteria is used to

directly dispose of the relevant assets with the investee accounting treatment based on the same

basis as the investee directly disposes of related assets or liabilities 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 profit distribution of the investee's net assets

recognized by the equity method are carried forward to the current profit or loss when the control of

the investee is lost. Among them the remaining equity after disposal is accounted for using the

equity method. Where the remaining equity after disposal is accounted for by equity method other

comprehensive income and other owner's equity should be settled by proportion. If the remaining

equity is accounted for using financial instrument recognition and measurement standard all of 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

of part of the equity investment the remaining equity after disposal shall be accounted for according

to the financial 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 recognised in

the current profit or loss. The other comprehensive income recognized in the original equity

investment by the equity method is accounted for on the same basis as the investee's direct disposal

of related assets or liabilities when the equity method is terminated Owner's equity recognized as aresult of changes in other owners' equity other than net profit or loss other comprehensive income

and profit distribution of the investee should 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

multiple transactions 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 losing control. The difference between the book value of each long-term equity

investment corresponding to the disposal price and the disposal of the equity before loss of control is

first recognized as other comprehensive income and when the control is lost it is transferred to the

current profit and loss of loss of control.

14．Investment Property

Investment Property refers to property held for the purpose of earning rent or capital

appreciation or both including land use rights that have been leased land use rights that are held

and prepared for transfer after appreciation and buildings that have been rented. Investment property

is initially measured at cost. The expenses related to investment property if the economic benefits

related to this asset are highly probable to flow into the company and the cost canbe measured

reliably then the expense will account for as the cost of investment property. Other expenses are

accounted for in profit and loss when incurred.The Company adopts the cost model to conduct subsequent measurement of investment

property and depreciation or amortization according to the policy consistent with the building or land

use rights.For details of the impairment test method and impairment provision method of property please

refer to Note Ⅲ. 20 “Long-Term Asset Impairment”.When the self-use property or inventory is converted into investment property or investment

property is converted into self-use property the book value before conversion is used as the recorded

value after conversion.When the use of investment property is changed to self-use the investment property is

converted into fixed assets or intangible assets from the date of change. When the use of self-use

property changes to earn rent or capital appreciation the fixed assets or intangible assets are

converted into investment property from the date of change. In the case of investment property

measured by the cost model when the conversion occurs the book value before conversion is used as

the entry value after conversion; if it is converted into investment property measured by the fair

value model the fair value of the conversion date is used as the entry value after conversion.When an investment real estate is disposed of or permanently withdrawn from use and is notexpected to obtain economic benefits from its disposal the confirmation of the investment real estate

shall be terminated. Disposal income from the sale transfer retirement or damage of investment

properties is charged to the 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 are recognized only when the economic benefits associated with them are likely to flow

into the Company and their costs can be reliably measured. Fixed assets are initially measured at cost

and taking into account the impact of projected abandonment costs.

(2) Depreciation methods for various types of fixed assets

Fixed assets are depreciated over their useful lives using the straight-line method from the

month following the scheduled availability. The depreciation period estimated net residual value rate

and annual depreciation rate of each category of fixed assets are as follows:

Depreciation Depreciation Net esidual Annual depreciation

Category

Method period (Year) rate(%) rate (%)

straight-line

Buildings 8-50 5 1.90— 11.88

depreciation

straight-line

uipElectronic eqment 3-10 4、5 9.50—32.00

depreciation

straight-line

Machinery equipment 5-28 4、5 3.39—19.20

depreciation

straight-line

Transport facility 5-10 4、5 9.50—19.20

depreciation

straight-line

Office equipment 3-10 4、5 9.50—32.00

depreciation

straight-line

Other equipment 5-28 4、5 3.39—19.20

depreciation

The estimated net residual value refers to the expected state after the estimated useful life of the

fixed assets has expired and is at the end of its useful life. The amount currently obtained by the

Company from the disposal of the assets after deducting the estimated disposal expenses.

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

For details of Impairment test method and impairment provision method for fixed assets please

refer to Note Ⅲ. 21 “Long-Term Asset Impairment”.(4) Recognition basis and valuation method of fixed assets acquired by finance lease

A finance lease is a lease that transfers substantially all the risks and rewards associated with

ownership of an asset and its ownership may or may not be transferred. If it is reasonable to

determine the ownership 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 at the expiration of the lease term depreciation shall be calculated

within a relatively short period of the lease term and the service life of the leased assets.

(5) Others

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

assets are likely to flow in and their costs can be reliably measured are included in the cost of fixed

assets and the book value of the replaced part should be terminated. The subsequent expenditures

other than mentioned as above 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 generate

economic benefits by using or disposal. The difference between the disposal income from the sale

transfer retirement or damage of the fixed assets less the carrying amount and related taxes is

recognized in profit or loss for the current period.The Company reviews the useful life estimated net residual value and depreciation method of

fixed assets at least at the end of the year and changes as an accounting estimate if changes occur.

16. Construction in progress

The cost of construction in progress is determined based on actual project expenditure

including various project expenditures incurred during the construction period capitalized borrowing

costs before the project reaches the expected usable status and other related expenses. Construction

in progress is carried forward to fixed assets when it is ready for its intended use.For details of the impairment test method and impairment provision method for construction

in progress please refer to Note Ⅲ. 21 “Long-Term Asset Impairment”.

17. Borrowing Costs

Borrowing costs include interest on borrowings amortization of discounts or premiums

ancillary expenses and exchange differences arising from foreign currency borrowings. Borrowing

costs directly attributable to the acquisition construction or production of assets eligible for

capitalization capitalization is 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 state have begun. And capitalization is stopped when the assets underconstruction or production that meet the capitalization conditions are ready for their intended use or

saleable status. The remaining borrowing costs are 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

capitalized after subtracting the interest income from the unused borrowing funds deposited into the

bank or the investment 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 by multiplying the weighted average of which accumulated asset expenditure

exceeds the asset expenditure of the special borrowing portion by the capitalization rate of the

general borrowings used. The capitalization rate is determined based on the weighted average

interest rate of general borrowings.During the capitalization period the exchange differences of foreign currency special

borrowings are all capitalized; the exchange differences of foreign currency general borrowings are

included in the current profit and loss.Assets eligible for capitalization refer to assets such as fixed assets investment property and

inventories that require a substantial period of acquisition construction or production activities to

achieve the intended use or sale status.If the assets eligible for capitalization are interrupted abnormally during the acquisition

construction or production process and the interruption period lasts for more than 3 months the

capitalization of the borrowing costs shall be suspended until the acquisition construction or

production of the assets resumes.

18. Right-of-use assets (applicable from 1 January 2021)

Right-of-use assets of the Group mainly consist of buildings power generation and transmission

equipment plant machinery and equipment motor vehicles furniture and fixtures and others.At the commencement date of the lease the Group recognises the right to use the leased assets

during the lease term as a right-of-use asset including: the initial measurement amount of the lease

liability; the amount of lease payment paid on or before the beginning of the lease term the amount

of lease incentive already enjoyed shall be deducted if there is a lease incentive; initial direct

expenses incurred by the lessee; the costs that the lessee is expected to incur in order to dismantle

and remove the leased asset restore the leased asset to the site or restore the leased asset to the state

agreed upon in the lease terms. The right-of-use assets are depreciated on a straight-line basis

subsequently by the Group. If the Group is reasonably certain that the ownership of the underlying

asset will be transferred to the Group at the end of the lease term the Group depreciates the asset

from the commencement date to the end of the useful life of the asset. Otherwise the Groupdepreciates the assets from the commencement date to the earlier of the end of the useful life of the

asset or the end of the lease term.The Group remeasures the lease liability at the present value of the revised lease payments and

adjusts the carrying amount of the right-of-use assets accordingly when the carrying amount of the

right-of-use asset is reduced to zero and there is a further reduction in the measurement of the lease

liability the Group recognises the remaining amount of the remeasurement in profit or loss for the

current period

19. Intangible assets

(1) Intangible assets

Intangible assets refer to identifiable non-monetary assets without physical form owned or

controlled by the Company.Intangible assets are initially measured at cost. Expenditure related to intangible assets is

included in the cost of intangible assets if the relevant economic benefits are likely to flow to the

Company and its costs can be measured reliably. However the intangible assets acquired through

business combination not involving enterprises under common control should be measured at fair

value separately as intangible assets when their fair values can be reliably measured.The acquired land use rights are usually accounted for as intangible assets. The related land use

rights and building construction costs of self-developed and constructed buildings are accounted for

as intangible assets and fixed assets respectively. In the case of purchased houses and buildings the

relevant price is distributed between the land use rights and the buildings. If it is difficult to allocate

them reasonably all of them are treated as fixed assets.Since the intangible assets with limited useful life are available for use the original value minus

the estimated net residual value and the accumulated amount of impairment reserve shall be

amortized by the straight-line method during their expected service life. Intangible assets with

uncertain service life shall not be amortized.Among them the useful life and amortization method of intellectual property are as follows:

Amortization period

Item Amortization method

(year)

Trademark 20 Straight-line method

At the end of the period the useful life and amortization methods of intangible assets with

limited useful life are reviewed and if any change occurs it is treated as a change of accounting

estimate. In addition the useful life of intangible assets with uncertain service life is also reviewed.If there is evidence that the period for which the intangible assets bring economic benefits to the

enterprise is foreseeable the useful life of intangible assets is estimated and amortized according to

the amortization policy of intangible assets with limited useful life

(2) Research and development expenditure

The company's expenditure for internal research and development project is divided into

research phase expenditure and development phase expenditure.Expenditures for the research phase shall be recognized in profit or loss when incurred.Expenditures for the development phase that meet the following conditions shall be recognized

as intangible assets and expenditures in the development stage that fail to meet the following

conditions are included in current profit and loss:

a. It is technically feasible to complete the intangible asset to enable it to be used or sold.b. The intent to complete the intangible asset and use or sell it;

c. The way in which intangible assets generate economic benefits including the ability to prove

that the 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

the intangible assets and the ability to use or sell the intangible assets.e. Expenditure attributable to the development phase of the intangible asset can be reliably

measured.If it is impossible to distinguish the expenditures between research phase and development

phase all research and development expenditures incurred will be included in the current profit and

loss.

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

For details of the impairment test method and impairment provision method please refer to

Note Ⅲ. 21 “Long-Term Asset Impairment”.

20．Long-term Deferred Expenses

The long-term deferred expenses are all expenses that have occurred but shall be borne by the

reporting period and subsequent periods with amortization period of more than one year. The

company's long-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 equity

investments in subsidiaries joint ventures and associates the Company determines whether there is

any indication of impairment on the balance sheet date. If there is any indication of impairment the

recoverable amount is estimated and the impairment test is carried out. Goodwill intangible assets

with uncertain 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 its book value the impairment provision is made based on the difference and is included in the

impairment loss. The recoverable amount is the higher of the fair value of the asset less the disposal

expense and the present value of the estimated future cash flow of the asset. The fair value of assets

is determined according to the sale agreement price in a fair transaction. If there is no sales

agreement but there is an active market for the asset the fair value is determined according to the

buyer's bid for the asset; if there is neither sales agreement nor active market for assets the fair value

of assets shall be estimated based on the best information available. Asset disposal expenses include

legal fee taxes transportation expenses and direct expenses incurred to make assets saleable. The

present value of the estimated future cash flow of an asset is determined by the appropriate discount

rate discounting and the estimated future cash flow generated by the asset during its continuous use

and final disposal. The asset impairment provision is calculated and confirmed based on individual

assets. If it is difficult to estimate the recoverable amount of an individual asset the recoverable

amount of the asset is determined by the asset group which the asset belongs 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

asset groups or portfolios that are expected to benefit from the synergies of business combinations

when impairment tests are conducted. The test results show that the recoverable amount of the asset

group or portfolio containing the assessed goodwill is lower than its book value the corresponding

impairment losses should be confirmed. The amount of impairment loss is first deducted from the

book value of the goodwill amortized to the asset group or portfolio and then deducted

proportionally from the book value of other assets according to the proportion of the book value of

assets other than goodwill in the asset group or portfolio.Once the above asset impairment loss is confirmed it will not be reversed to the part where the

value is 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. Amongthem:

Short-term employees remuneration mainly includes wages bonuses allowances and subsidies

employee welfare fees medical insurance premiums maternity insurance premiums work injury

insurance premiums housing fund labor union funds employee education funds and non-monetary

benefits. The Company recognizes the actual short-term employee's remuneration as a liability in the

accounting period in which employees provide services to the Company and recognizes them in

profit or loss or related asset costs. Non-monetary benefits are measured at fair value.Post-employment Benefits mainly include basic retirement security unemployment insurance

and annuities. The Post-employment Benefit Scheme includes a Defined Contribution Plan and a

Defined Benefit Plan. If a Defined Contribution Plan is adopted the corresponding amount of the

deposit shall be included in the relevant asset cost or current profit and loss as incurred. (1) The

Defined Contribution Plan is recognized as a liability based on a fixed fee paid to an independent

fund and is included in the current profit and loss or related asset costs; (2) The Defined Benefit Plan

is accounted for using the expected cumulative benefits unit method Specifically the Company will

convert the welfare obligation arising from the Defined Benefit Plan into the final value of the

departure time according to the formula determined by the expected cumulative benefits unit method;

then it is attributed to the employee's in-service period and is included in the current profit and 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 unilaterally the 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 dismissal benefits whichever is earlier the Company will recognize the

employee compensation liabilities arising from the dismissal benefits and included in the current

profit and loss. However if the dismissal benefits are not expected to be fully paid within 12 months

after the end of annual reporting period they shall be treated in accordance with other long-term

employee compensations.The internal retirement plan for employees shall be treated in the same way as the

above-mentioned dismissal benefits. The company will pay the internal retired staff the salary and

the social insurance premiums 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

with the Defined Contribution Plan they shall be accounted for Defined Contribution Plan andotherwise accounted for the Defined Benefit Plan.

23. Lease liabilities

At the commencement date of the lease period the Group recognises the present value of

outstanding lease payments as a lease liability excluding short-term leases and leases of low-value

assets. The Group adopts the interest rate implicit in the lease as the discount rate to calculate the

present value of the lease payments. Where the interest rate implicit in the lease cannot be

determined the incremental borrowing rate of the lessee shall be used as the discount rate. The

Group calculates the interest expense of the lease liability during each period of the lease term in

accordance with the constant periodic rate of interest and recognises it in profit and loss for the

current period except otherwise stipulated in the cost of related assets. The variable lease payment

that is not included in the measurement of lease liabilities is recognised in the profit and loss for the

current period when it actually occurs except that it is otherwise stipulated to be included in the cost

of relevant assets.After a lease term commences when there is a change in the amount of in-substance fixed lease

payments a change in the amounts expected to be payable under a residual value guarantee a change

in future lease payments resulting from a change in an index or a rate used to determine those

payments a change in assessment of an option to purchase the underlying asset renew or terminate

the lease or change in the actual exercise of an option the Group remeasures the carrying amount of

the lease liability by discounting the revised lease payments

24. Estimated liabilities

When the obligations related to the contingencies meet the following conditions they are

recognized as contingent liabilities: (1) The obligation is the present obligation assumed by the

Company; (2) The performance of this obligation is likely to result in the outflow of economic

benefits; (3) The amount of the obligation can be reliably measured.On the balance sheet date taking into account factors such as risks uncertainties and time value

of money related to contingencies the estimated liabilities are measured in accordance with the best

estimate of the expenditure required to perform the relevant current obligations.If all or part of the expenses required to discharge the estimated liabilities are expected to be

compensated by the third party the compensation amount will be separately recognized as an asset

when it is basically determined to be received and the confirmed compensation amount does not

exceed the book value of the estimated liabilities.

(1) Loss Contract

A loss contract is a contract in which the cost of fulfilling a contractual obligation willinevitably occur more than the expected economic benefit. If the contract to be executed becomes a

loss contract and the obligation arising from the loss contract satisfies the conditions for the

recognition of the above-mentioned estimated liabilities the portion of the contract's estimated loss

that exceeds the recognized impairment loss (if any) of the contracted asset is recognized as the

estimated liability.

(2) Restructuring Obligations

For restructuring plans that are detailed formal and have been announced to the public the

amount of 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 restructuring obligation to the part of business sold the obligation related to the reorganization is

confirmed only when the company promises to sell part of the business (that is when the binding

sale agreement is signed).

25. Share-based Payments

(1) Accounting Treatment of Share-based Payments

A share-based payment is a transaction that grants an equity instrument or assumes a liability

determined 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

fair value of the granting of employees' equity instruments at the grant date. If the fair value is vested

in the completion 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 the relevant costs or expenses based on the best estimate of the number of vesting equity

instruments; Or If the vesting right is granted immediately after the grant the calculation of the

amount of the fair value is included in the relevant cost or expense on the grant date and the capital

reserve is increased accordingly.On each balance sheet date during the waiting period the Company makes the best estimate

based on the latest information on the changes in the number of employees with vesting rights and

corrects the number of equity instruments that are expected to be vested. The impact of the above

estimates shall be included 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

fair value of other parties' services can be reliably measured the fair value of other services shall bemeasured at the fair value on the date of acquisition; If the fair value of the other party's services

cannot be measured reliably the fair value shall be measured at the fair value of the equity

instrument at the date the service is acquired and is included in the relevant cost or expense which

increases the shareholders' equity accordingly.b) Cash-settled Share Payment

The cash-settled share payment is measured at the fair value of the liabilities determined by the

Company based on shares or other equity instruments. If the vesting right is available immediately

after the grant the relevant costs or expenses shall be included on the date of grant and the liabilities

shall be increased accordingly; if vesting right is available after the service is completed within the

waiting period or met the required performance conditions based on the best estimate of the vesting

rights on each balance sheet date of the waiting period according to the fair value of the liabilities

assumed by the company the services obtained in the current period are included in the cost or

expense and the liabilities are increased accordingly.The fair value of the liabilities shall be re-measured on each balance sheet date and settlement

date before the settlement of the relevant liabilities and the changes shall be recorded in the profit

and loss of the current period.

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

When the Company modifies the share-based payment plan if the modification increases the

fair value of the equity instruments granted the increase in the fair value of the equity instruments is

recognized accordingly. The increase in the fair value of equity instruments refers to the difference

between the fair value of the equity instruments before and after the modification. If the modification

reduces the total fair value of the share-based payment or adopts other methods that are not

conducive to the 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 the granted equity instrument as an accelerated exercise and the amount to be recognized in

the remaining waiting period will be immediately included in the current profit and loss and the

capital reserve will be recognized. If the employee or other party can choose to meet the non-vesting

conditions but fails to meet the 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

Shareholders or Actual Controllers

In respect of the share-based payment transaction between the company and the shareholders or

actual controllers of the company If one of the settlement enterprise and the service receivingenterprise is in the company and the other is outside the company it shall be accounted for in the

consolidated financial statements of the company according to the following provisions:

a.) If the settlement enterprise settles with its own equity instrument the share-based payment

transaction shall be treated as equity-settled share-based payment; otherwise it shall be treated as a

cash-settled share-based payment.If the settlement enterprise is an investor of a serviced enterprise it shall be recognized as the

long-term equity investment of the serviced enterprise according to the fair value of the equity

instrument at the grant date or the fair value of the liability to be assumed and the capital reserve

(other capital reserve) or liabilities shall be recognized.b.) If the serviced enterprise has no settlement obligation or grants its own employees the equity

instruments the share payment transaction shall be treated as equity-settled share payment; if the

serviced enterprise has settlement obligation and grants its employees other than its own equity

instruments the share payment transaction shall be treated as a cash-settled share payment.For the share based payment incurred between companies within the group if the serviced

enterprise and settlememt enterprise are not the same then the payment should be recpgnized and

measured in their 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

providing services 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 the individual performance obligations are performed within a certain period

of time or at a certain point of time. When the company has fulfilled all the performance obligations

in the contract the revenue shall be recognized 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

price apportioned to the single performance obligation when the customer obtains the control right of

the relevant goods on the basis of comprehensively considering the following factors: the company

has the right to receive payment in respect of the goods or services currently that is the customer has

the obligation to pay for the goods currently; the company has transferred the legal ownership of the

goods to the customer that is the customer has the legal ownership of the goods; The Company has

transferred the physical goods of the commodity to the Customer or the Customer has obtained thequalification of physical goods right of the commodity. The consideration obtained by the Company

in respect of the transfer of the commodity is likely to be recovered; Other indications that the

customer has taken control of the commodity.The specific principles of the company's sales revenue recognition are as follows: when the

commodity have been delivered to the customer and signed by the customer for confirmation or the

ownership certificate of the commodity has been delivered to the customer the sales revenue is

recognized when the company has received the payment or obtained the evidence of payment.

(2) Revenue recognition for fulfilling performance obligation within a certain period of

time

For 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 balance sheet 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 of the following conditions is satisfied it is regarded as the

performance obligation performed during a certain period of time: the Customer obtains and

consumes the economic benefits arising from the performance of the Company at the same time of

the performance of the Company; Customers can control the goods under construction during the

performance of the contract; The products produced by the Company during the performance of the

Contract are of irreplaceable use and the Company shall be entitled to receive payment for the

accumulated part of the completed performance so far during the whole term of the Contract.Otherwise the Company recognizes revenue at the point when the Customer acquires control of the

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 which are subject to impairment on the basis of expected credit losses. The

company's right to collect consideration from customers unconditionally (only depending on the

passage of time) is listed as receivables. The obligation of the Company to transfer goods or services

to customers for which consideration has been received or receivable is presented as a contractual

liability.

27. Contract cost1. Contract performance cost

The cost incurred by the company for the performance of the contract which does not fall

within the scope of other accounting standards for business enterprises other than the income

standard and meets the following 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 costs incurred solely as a result of the contract;

(2) The cost increases the company's resources for fulfilling its performance obligations in the

future;

(3) The cost is expected to be recovered.

The assets are presented in inventory or other non-current assets according to whether the

amortization 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 it shall be recognized as an asset as the contract acquisition cost. Incremental cost refers

to the cost that will not occur if the company does not obtain the contract.

3. Amortization of contract costs

The assets related to the contract cost mentioned above shall be amortized at the time of

performance of 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

between the residual consideration expected to be obtained by the company due to the transfer of the

goods related to the assets and the estimated cost to be incurred for the transfer of the relevant goods

the excess part shall be set aside as an impairment provision and recognized as an impairment loss of

the asset.28. Government grants

Government grant refers to the company's acquisition of monetary and non-monetary assets

from the government free of charge excluding the capital invested by the government as an investor

and enjoying the corresponding owner's rights and interests. Government grants include

assets-related grants and revenue-related grants. The company defines the government grant obtained

for the purchase and construction of long-term assets or for the formation of long-term assets in other

ways as the government grant related to assets; the remaining government grant is defined as the

government grant related to income. If the object of grants is not specified in government documents

the grants shall be divided into income-related government grants and assets-related government

grants in the following ways: (1) If the government document clarifies the specific project for which

the grant is targeted the proportion of the expenditure amount of the assets to be formed and the

amount of the expenditures included in the expenses in the budget of the specific project are divided

and the proportion of grant division needs to be reviewed on each balance sheet day and changed if

necessary. (2) In government documents if the purpose is expressed only in general terms and no

specific project is specified the grant shall be regarded as a government grant related to the income.Where a government grant is a monetary asset it shall be measured according to the amount received

or receivable. If the government grants are non-monetary assets they shall be measured at the fair

value; if the fair value cannot be obtained reliably they shall be measured at the nominal amount.Government grants measured in nominal amounts shall be recognized directly in current profits and

losses.The Company usually confirms and measures the government grant according to the amount

when it is actually received. However if there is conclusive evidence at the end of the period that the

relevant conditions stipulated in the financial support policy can be met and the financial support

funds are expected to be received it shall be measured according to the amount receivable.Government grants measured in accordance with the amount receivable shall meet the following

conditions at the same time: (1) The amount of the subvention receivable has been confirmed by the

authorized government departments or can be reasonably calculated according to the relevant

provisions of the formally issued financial 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 Openness of Government Information" the financial

support project and its financial fund management measures should be inclusive (any eligible

enterprise can apply for them) rather than being specifically tailored to specific companies; (3)

The relevant grant approval has clearly promised the payment period and the allocation of thepayment is guaranteed by the corresponding budget so it can be reasonably ensure that it can be

received within the prescribed time limit; (4) Other relevant conditions (if any) to be met in

accordance with the specific circumstances of the Company and the grants.Government grants related to assets are recognized as deferred earnings and are divided into

current profits and losses in a reasonable and systematic way during the service life of the assets

concerned. The government grants related to revenue which are used to compensate for the related

cost or loss in the subsequent period shall be recognized as deferred income and shall be recognized

in profit or loss in the period in which the related costs or losses are recognized; if it is used to

compensate the related costs or losses 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

separately classified for accounting treatment; if it is difficult to distinguish the whole is classified as

government grants related to income.Government grants related to the daily activities of the Company shall be included in other

income or cost deductions according to the nature of the economic business; government subsidies

unrelated to daily activities shall be included in the non-operating revenues and expenses.When the recognized government grants need to be returned if there are relevant deferred

earnings balances the book balance of related deferred earnings shall be deducted and the excess

part shall be included in the current profits and losses or the book value of assets shall be adjusted

otherwise the book value of assets shall be directly included in the current profits and losses.The company will obtain preferential policy loans discount in accordance with the finance will

be allocated to the loan bank discount funds and the finance will be directly allocated to the company

discount funds in two cases:

(1) If the finance department allocates the discount interest funds to the lending bank and the

lending bank provides the loan to the Company at the policy preferential interest rate the Company

chooses to conduct accounting treatment according to the following methods: the loan amount

actually received shall be taken as the entry value of the loan and the relevant borrowing costs shall

be calculated in accordance with the loan principal and the policy preferential interest rate.

(2) If the finance allocates the discount funds directly to the company the company will offset

the corresponding discount against the relevant borrowing costs.

29. Deferred Income Tax Assets / Deferred Income Tax Liabilities

(1) Current Income Tax

On the balance sheet date the current income tax liabilities (or assets) formed in the current and

previous periods are measured by the expected amount of income tax payable (or returned) in

accordance with the provisions of the Tax Law. The amount of taxable income on which currentincome tax expenses are calculated is based on the corresponding adjustment of pre-tax accounting

profits in the reporting period in accordance with the relevant tax laws.

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

The difference between the book value of certain assets and liabilities and their tax basis and

the temporary difference between the book value of items that are not recognized as assets and

liabilities but which can be determined as their tax basis according to the tax law are confirmed by

the balance sheet liability method.Taxable temporary differences which related to the initial recognition of goodwill and the initial

recognition of an asset or liability arising from a transaction that is neither a business combination

nor an accounting profit or taxable income (or deductible loss) relevant deferred income tax

liabilities shall not be recognized. In addition for taxable temporary differences related to

investments in subsidiaries associates and joint ventures if the Company is able to control the

turnaround time of temporary differences and the temporary difference is unlikely to be reversed in

the foreseeable future the related deferred income tax liabilities shall not be recognized. Except for

the above exceptions the Company recognizes all other deferred income tax liabilities arising from

taxable temporary differences.Taxable temporary differences which related to the initial recognition of an asset or liability

arising from a transaction that is neither a business combination nor an accounting profit or taxable

income (or deductible loss) relevant deferred income tax liabilities shall not be recognized. In

addition for taxable temporary differences related to investments in subsidiaries associates and joint

ventures if the temporary difference is unlikely to be reversed in the foreseeable future or the

amount of taxable income used to offset the temporary difference is unlikely to be obtained in the

future the deferred income tax assets concerned shall not be recognized. Except for the above

exceptions the Company recognizes other deferred income tax assets that can offset temporary

differences subject to the amount of taxable income that is likely to be obtained to offset temporary

differences.For deductible losses and tax credits that can be carried forward in subsequent years the

corresponding deferred income tax assets are recognized to the extent that it is probable that the

future taxable income shall be used to offset the deductible losses and tax credits.On the balance sheet date the deferred income tax assets and deferred income tax liabilities

shall be measured at the applicable tax rates in the period in which the related assets are recovered or

the related liabilities are recovered in accordance with the tax laws.On the balance sheet date the book value of deferred income tax assets is reviewed. and the

book value of deferred income tax assets is written down if it is likely that sufficient taxable incomewill not be available to offset the benefits of deferred income tax assets in the future. When it is

possible to obtain sufficient taxable income the amount written down shall be reversed.

(3) Income tax expenses

Income tax expenses include current income tax and deferred income tax.In addition to recognizing that the current income tax and deferred income tax related to other

transactions and matters directly included in shareholder's rights and interests shall be recognized in

other comprehensive income or shareholder's rights and interests and the book value of adjusted

goodwill from deferred income tax resulting from the merger of enterprises the other current income

tax and deferred income tax expenses or gains shall be recognized in profit or loss for the current

period.

(4) Offset of Income Tax

When the company has legal rights to settle on a net basis and intends to settle on a net basis or

acquire assets and pay off liabilities at the same time the company's current income tax assets and

current income tax liabilities shall be presented on a net basis after the offset.When it has the legal right to settle current income tax assets and current income tax liabilities

on a net basis and deferred income tax assets and deferred income tax liabilities are related to the

income tax levied by the same tax administration department on the same tax payer or to different tax

payers but in the future during each important period of deferred income tax assets and liabilities

being reversed the taxpayer involved intends to settle the current income tax assets and liabilities on

a net basis or acquire assets and pay off liabilities simultaneously the deferred the income tax assets

and deferred income tax liabilities of the Company shall be presented on a net basis after offset.

30. Lease

Finance lease is a lease that essentially transfers all risks and rewards related to the ownership

of assets. Its ownership may or may not be transferred eventually. Leases other than finance leases

are operating leases.

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

Rental expenses for operating leases shall be included in the related asset costs or current profits

and losses in the straight-line method during each period of the lease period. The initial direct costs

shall be included in the current profits and losses. Contingent rentals shall be recognized in profits

and losses when incurred.

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

The rental income of operating lease shall be recognized as current profit and loss according to

the straight-line method during each period of the lease period. The larger initial direct expenses arecapitalized when occurring and the profits and losses of the current period shall be recorded in

stages on the same basis as the recognized rental income during the whole lease period; the smaller

initial direct expenses shall be recorded in the profits and losses of the current period when occurring.Contingent rentals shall be included in current profits and losses when actually occurring.

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

At the beginning of the lease period the lower of the fair value of the leased assets and the

present value of the minimum lease payment on the lease start date is regarded as the entry value of

the leased assets and the lowest lease payment shall be regarded as the entry value of the long-term

payables and the difference shall be regarded as the unrecognized financing cost. In addition the

initial direct costs attributable to the lease project shall also be included in the value of the leased

assets when they occur during the lease negotiation and the signing of the lease contract. The balance

of the minimum lease payment after deducting the unrecognized financing costs shall be presented as

long-term liabilities and long-term liabilities due within one year respectively.The unrecognized financing cost shall be calculated by the real interest rate method during the

lease period. Contingent rentals shall be included in current profits and losses when actually

occurring.

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

At the beginning of the lease period the sum of the minimum lease receipt and the initial direct

cost on the lease start date is regarded as the entry value of the financial lease receivable and the

unsecured balance shall be recorded. The difference between the sum of the minimum lease

receivable the initial direct cost and the unsecured balance and the sum of its present value is

recognized as the unrealized financing income. The balance of the receivable financial lease after

deducting the unrealized financial income shall 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

method during the lease period. Contingent rentals shall be recognized in current profits and losses

when actually occurring.

31. Other important accounting policies and accounting estimates

(1) Termination of business

Termination of operation refers to a component that meets one of the following conditions can

be separately distinguished and has been disposed of or classified as held for sale by the Company:

* This component represents an independent major business or a separate major business area. *

This component is part of an associated plan to dispose of an independent major business or aseparate major business area. * This component is a subsidiary company acquired specifically for

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

(2) Hedge accounting

In order to avoid some risks the Company hedges some financial instruments as hedging

instruments. For the hedges meeting the specified conditions the Company adopts the hedge

accounting method for treatment. The hedging of the Company is fair value hedging.At the beginning of hedging the Company formally designates hedging instruments and hedged

items and prepares written documents on hedging relationship and risk management strategy and

risk management objectives of the Company engaged in hedging. In addition the Company will

continuously evaluate the effectiveness of hedging at the beginning and after the hedging.Fair value hedging

If a hedging instrument is designated as a fair value hedge and meets the conditions the profits

or losses arising therefrom shall be included into the current profits and losses. If the hedging

instrument hedges the non-trading equity instrument investment (or its components) that is measured

at fair value and whose changes are included in other comprehensive income the gains and losses

generated by the hedging instrument are included in other comprehensive income. The profit or loss

of the hedged item due to the hedged risk exposure shall be included into the current profits and

losses and the book value of the hedged item shall be adjusted at the same time. If the hedged item is

measured at fair value the gain or loss of the hedged item due to the hedged risk does not need to

adjust the book value of the hedged item and the relevant 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

has expired or been sold the contract has been terminated or exercised or no longer meets the

conditions for the 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 be accurately measured. These judgments estimates and assumptions are based on the

Company's management's past historical experience and other relevant factors. These judgments

estimates and assumptions will affect the reported amounts of income expenses assets and liabilitiesand the disclosure of contingent liabilities at the balance sheet date. However the actual results

caused by the uncertainty of these estimates may be different from the current estimates of the

Company's management resulting in a significant 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 the number of impacts shall be recognized in the current period of change. If the change

affects both the current and future periods the number of impacts will be confirmed in the current

and future periods of the change.On the balance sheet date the Company needs to judge estimate and assume the amount of

financial statement items in the following important areas:

1. Impairment of financial assets

The Company uses the expected credit loss model to evaluate the impairment of financial

instruments. The application of the expected credit loss model requires significant judgment and

estimation and all reasonable and basis information including forward-looking information shall be

considered. In making these judgments and estimates the Company deduces the expected changes in

the debtor's credit risk based on historical data and combined with economic policies

macroeconomic indicators industry risks external market environment technological environment

changes in customer conditions and other factors.

2. Inventory falling price reserves

According to the inventory accounting policy the Company measures according to the lower of

cost and net realizable value. For the inventory whose cost is higher than net realizable value and

which is obsolete and unsalable the Company makes provision for inventory falling price.Impairment of inventories to net realizable value is based on the evaluation of the marketability of

inventories and their net realizable value. The appraisal of impairment of inventories requires the

management to make judgment and estimation on the basis of obtaining conclusive evidence and

considering factors such as the purpose of holding inventories and the influence of events after the

balance sheet date. The difference between the actual result and the original estimate will affect the

book value of inventory and the accrual or 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

for non-current assets other than financial assets. For intangible assets with uncertain service life in

addition to the annual impairment test the impairment test is also carried out when there are signs ofimpairment. Other non-current assets other than financial assets shall be tested for impairment when

there are indications that their book amounts are not recoverable.When the book value of an asset or asset group is higher than the recoverable amount that is

the higher of the net amount of the fair value minus the disposal expenses and the present value of

the estimated 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

the sales agreement price or observable market price of similar assets in fair transactions and

deducting the incremental cost directly attributable to the disposal of such assets.When estimating the present value of future cash flow it is necessary to make a significant

judgment on the output sales price related operating costs and the discount rate used in the

calculation of the present value of the asset (or asset group). In estimating the recoverable amount

the Company will use all relevant information available including forecasts of production selling

price and related operating costs based on reasonable and supportable assumptions.The Company shall test whether goodwill is impaired at least every year. This requires an

estimate of the present value of the future cash flows of the asset group or portfolio of asset groups to

which goodwill has been allocated. When predicting the present value of future cash flow the

Company needs to predict the cash flow generated by the future asset group or asset group portfolio

and at the same time select the appropriate discount rate to determine the present value of future

cash flow.

4. Depreciation and amortization

After considering the residual value of investment real estate fixed assets and intangible assets

the Company will accrue depreciation and amortization on a straight-line basis during their service

lives. The Company reviews the service life regularly to determine the amount of depreciation and

amortization expenses to be included in each reporting period. The service life is determined by the

Company based on the past experience of similar assets and in portfolio with the expected

technological updates. If there is a significant change in previous estimates the depreciation and

amortization charges will be adjusted in the future.

5. Deferred income tax assets

To the extent that there is likely to be sufficient taxable profits to offset the losses the Company

recognizes deferred income tax assets for all unused tax losses. This requires the Company's

management to use a large number of judgments to estimate the time and amount of future taxable

profits combined with 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 tax

treatment and calculation of some transactions. Whether some items can be paid before tax requires

the approval of the tax authorities. If there is a difference between the final determination result of

these tax matters and the amount initially estimated the difference will have an impact on the current

income tax and deferred income tax during the final determination period.

7. Accrued liabilities

According to the terms of the contract existing knowledge and historical experience the

Company estimates 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 current obligation and the performance of the current obligations is likely to result in

outflow of economic benefits from the Company the Company recognizes the contingencies as

estimated liabilities based on the best estimate of the expenditure required to perform the relevant

current obligations. The recognition and measurement of the estimated liabilities depend to a large

extent on the judgment of the management. In the process of judgment the Company needs to

evaluate the risks uncertainties time value of money and other factors related to these contingencies.Among them the Company will make an estimated liability for the after-sales quality

maintenance commitments provided to customers for the sale maintenance and renovation of the

goods sold. The Company'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 or decrease in this provision may affect the profit and loss in the future years.

8. Fair value measurement

Certain assets and liabilities of the Company are measured at fair value in the financial

statements. When estimating the fair value of an asset or liability the Company adopts the available

observable market data available. If the first level input value cannot be obtained the Company will

employ a qualified third-party appraiser to perform the appraisal. The Company works closely with

qualified external appraisers 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

After deducting the allowable amount of input tax

deducted in the current period the difference between

Value Added Tax 1%、3%、5%、6%、

the sales of goods taxable services and taxable

services income calculated in accordance with theTypes Tax Basis Tax Rate

provisions of the Tax Law is the taxable value-added

9%、10%、13%

tax.Urban Maintenance

According to the actual value-added tax 7%、5%

& Construction Tax

Extra charges of According to value added tax and consumption tax on

3%

education funds the basis of actual payment

Local Extra Charges According to value added tax and consumption tax on

2%

of Education Funds the basis of actual payment

25%、17%、15%、Corporate Taxes According to taxable income

20%

According to 70% of original value of the real estate

(or rental income) as the tax base; according to the

Property Tax 12%、1.2%

original value of the real estate deducted 30% at a

time.The company conducts VAT taxable sales or imports goods. According to the announcement

issued by Ministry of Finance State Administration of Taxation and China Custom about the policy

relating to deepening VAT reform ( Announcement by Ministry of Finance State Administration of

Taxation and China Custom (2019) No.39) from 1st April 2019 onwards the applicable rates are

adjusted to 13%/9%. Meanwhile the company can deduct VAT by additional deductible rate of 10%

from 1st April 2019 to 31st December 2021 because of its business nature as service provider.Representation on tax payers of different enterprise income tax rates:

Tax Payers Income Tax Rate

Jingliang (Singapore) International Trade Co. 17%

Ltd.Beijing Guchuan Bread Food Co. Ltd. 15%

Hangzhou Lin'an Chunmanyuan Agricultural 20%

Development Co. Ltd.

2. Important preferential tax policies and basis

Hangzhou Linan Little Angel Food Co. Ltd. a 4th tier subsidiary company of the Company is

a welfare enterprise. Since May 2016 it has enjoyed the preferential VAT policy of immediate refund

upon payment in Preferential Value-Added Tax Policies for Promoting the Employment of Disabled

Persons (CaiShui [2016] No.52).The level 2 subsidiary of the company-Jingliang Caofeidian Agricultural Development Limited

according to the document JTCFDST(2018) No. 1539765025415 issued by tax authority of

Caofeidian District Tangshan affiliated to State Administration of Taxation and also followed the

rules in Law of the People's Republic of China on the Administration of Tax Collection TheImplementation Guideline of Law of the People's Republic of China on the Administration of Tax

Collection the rice under the brand of Tixiang 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 the rice under the brand of Tixiang produced by Caofeidian company if exempted from

Corporation tax.Beijing Guchuan Bread&Food Co. Ltd. a 3rd tier subsidiary of the Company is a high-tech

enterprise. It enjoys the preferential tax policy of paying enterprise income tax at the 15% tax rateaccording to the relevant provisions of both “Law of the People's Republic of China on TaxCollection and Administration” and “Rules for the Implementation of the Tax Collection andAdministration Law of the People's Republic of China”. It obtained the certificate of high-tech

enterprise No. GR202111000657 valid until September 14 2024.The company level 3 subsidiary Beijing day weikang grease DiaoXiao center co. LTD.according to the national tax administration of the ministry of finance the notice about food

enterprises exempted from VAT tax word (1999) article 5 198 responsible for collection and

storage of grain purchase and sale of state-owned grain enterprises and business duty-free items

listed in the notice of other food business and government reserves edible vegetable oil sales

enterprises which should be examined by the competent tax authorities deemed tax-exempt status

not reported to the competent tax authorities where the audit determined that no exemption From

June 1 2017 to December 31 9999 the company will exempt edible vegetable oil stored by the

government from VAT.Jingliang (Singapore) International Trade Co. Ltd. a 3rd tier subsidiary of the Company levies

taxes on the principle of territoriality. The company is taxed on the territoriality principle. According

to Singapore's preferential tax policy the company enjoys tax exemption plan is as follows: for the

first SGD$10000 of taxable income amount the taxable income amount shall be reduced by 75%; for

the portion between SGD$10001 and SGD$200000 the taxable income amount shall be reduced by

50%; For the portion exceeding SGD$200000 the taxable income amount shall not be reduced. The

company shall pay income tax at the rate of 17% on the taxable income amount after exemption.In accordance with the relevant provisions of Ministry of Finance and State Administration ofTaxation “Notice on Preferential Enterprise Income Tax Policies for Employment of Persons withDisabilities”(Cai Shui[2009] No.70) Hangzhou Linan Little Angel Food Co. Ltd. a 4th tier

subsidiary company of the Company: Where an enterprise employs persons with disabilities on the

basis of deduction according to the wages paid to the disabled workers it may deduct the amount oftaxable income according to 100% of the wages paid to the disabled workers.The company level 3 subsidiary Zhejiang Xiaowangzi Foodstuff Co. Ltd. and 4th tier

subsidiary company-Hangzhou Linan Little Angel Food Co. Ltd. are entitled to enjoy the urban

land use tax reduction policy of unified implementation of classification and grading for taxpayers in

the manufacturing industry within the province (including Ningbo City) according to the provisions

of the General Office of the People's Government of Zhejiang Province Document No. 62 of 2019

and enjoy 100% and 80% reduction of urban land use tax for Class A and Class B enterprises

respectively until December 31 2021 with the maximum reduction of 100% and 80% of the urban

land use tax payable by the Unit for the year.Linqing Little Prince Food Co. Ltd. a fourth-level subsidiary of the company shall be subject

to 50% of the sales revenue on the basis of the stamp tax payable in the industrial procurement link

and sales link in the purchase and sale contract of industrial enterprises according to the annountment

No.10 2018 issued by Shandong Provincial Tax Bureau. The base of stamp duty payable in 2021

shall be calculated according to 50% of the sales revenue.Company’s level 4 subsidiary-Liaoning Xiaowangzi Food Limited according to the

Supplementary Announcement on Land Use Tax issued by Ministry of Finance and State

Administration of Taxation (89) GSDZ No.140 Clause 13 states that public land such as municipal

street square public green etc. can be exempted from land use tax when computing land use tax the

area used in the computation is total area less the area for afforest and street.Company’s level 4 subsidiary-Hangzhou Lin'an Chunmanyuan Agricultural Development Co.Ltd. according to the Announcement of the State Administration of Taxation on Matters Relating

to the Implementation of Preferential Income Tax Policies to Support the Development of Small and

Micro-profit Enterprises and Individual Entrepreneurs and State Administration of Taxation

Announcement No. 8 of 2021 from January 1 2021 to December 31 2022 for small and

micro-profit enterprises with annual taxable income not exceeding RMB1 million The part of the

annual taxable income of small and medium-sized enterprises shall be reduced by 12.5% of the

taxable income and the enterprise income tax shall be calculated at a tax rate of 20%.The company level 4 subsidiary Jingliang (Hebei) Oil Industry Co. Ltd. according to the

financial department documents local taxation bureau in hebei province hebei province document ji

caishui [2019] no. 56 "about parts reserve commodity announcement concerning the tax policy

accounting books shall be exempt from stamp duty for funds to undertake business book stand in the

process of buying and selling contract commodity reserves shall be exempt from stamp duty other

parties in the contract should pay the stamp duty shall also be subject to duty-payment according to

the parties. Property tax and land use tax of cities and towns shall be exempted from the property taxand land use tax of cities and towns that undertake the business of commodity reserve for their own

use. The notice will be executed on January 1 2019 and will terminate on 31st December. 2021.Jingliang (Hebei) Oil Industry Co. Ltd. a 4th subsidiary company of the Company exempts thesale of edible vegetable oil stored by the government from VAT according to “Notice of the Ministryof Finance and the State Administration of Taxation on the Levy and Exemption of Value Added Taxfor Food Enterprises”（Cai Shui [1999] No.198）

Ⅴ. Changes in accounting policies accounting estimates and explanation of corrections to

previous errors

1. Changes in accounting policies

(1) The Company adopted the relevant provisions of Chinese Accounting Standards for

Business Enterprises No.21 – Leases (Accounting (2018) No. 35) from January 1 2021 and adjusted

the amounts of right-of-use assets lease liabilities and other related items in the financial statements

based on the cumulative effect number without adjusting the information for the comparable periods.The change in accounting policy resulted in the following impacts

Implication for the financial position

Changes in accounting policies and reasons

and income

The new lease standard requires companies to separately

present right-of-use assets and lease liabilities in the

balance sheet (except short-term leases and leases of

low-value assets). Among them lease liabilities are usually

divided into non-current liabilities and Current portion of The consolidated balance sheet as of

non-current liabilities. January 1 2021 presents right-of-use

In the income statement the lessee should show the assets of 7787410.08yuan current

interest expense of the lease liabilities and the depreciation portion of non-current liabilities

expense of the right-of-use assets separately. The interest 1154817.69yuan and lease liabilities

expense of lease liabilities is shown in the financial of 1459723.40yuan.expense. The parent company has no leasing

The main accounts affecting the statement are right-of-use businessso the change in accounting

assets lease liabilities and Current portion of non-current policy has no effect on the parent

liabilities. company's statement items.The amount of retained earnings and other related items in

the financial statements at the beginning of the year are

adjusted according to the cumulative effect.No adjustment

is made to the information of comparable periods.

(2) The Company adopted the relevant provisions of Chinese Accounting Standards for BusinessEnterprises No.14 (Financial accounting [2021] No. 1) from January 1 2021 to adjust the opening

amount of retained earnings and other related items in the financial statements based on the

cumulative effect number without adjusting the information for the comparable periods. This change

in accounting policy has no impact on the Company's financial statement.

(3) The Company adopted the relevant provisions of Chinese Accounting Standards for

Business Enterprises No.15 (Financial accounting [2021] No. 35) on "Presentation related to

centralized management of funds" on January 1 2021 and if the financial statements of an enterprise

before the issuance of the interpretation are not presented in accordance with the above provisions

the financial statement data of the comparable period shall be adjusted in accordance with this

interpretation. The change in accounting policy has no impact on the Company's financial

statements.

2. Changes in accounting estimates

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

3. Correction of previous accounting errors

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

4. The Company implemented the new lease standard for the first time on January 1 2021.

The impact of the financial statements as January 1 2021 is as follows：Consolidated Balance Sheet

Monetary Unit: RMB Yuan

Items 31 December 2020 1 January 2021 Adjustments

Current Assets:

Monetary capital 335466169.61 335466169.61

Transactional financial assets 63478071.73 63478071.73

Derivative financial assets

Notes receivable 456565.85 456565.85

Accounts receivable 92245667.60 92245667.60

Receivables financing

Prepayment 282343218.05 282234970.05 -108248.00

Other receivables 541905656.97 541905656.97

Including: Interest receivable

Dividends receivable

Inventory 1225083742.26 1225083742.26

Contract assets

Held-for-sale assets

Non-current assets due within one year

Other current assets 845450678.36 845450678.36

Total current assets 3386429770.43 3386321522.43 -108248.00

Non-current assets:

Long-term equity investment 217762487.79 217762487.79

Other equity instruments investment 20000000.00 20000000.00

Other non-current financial assets

Investment property 22560212.50 22560212.50

Fixed assets 1131143854.07 1131143854.07

Construction in process 28458413.67 28458413.67

Right-of-use assets 7787410.08 7787410.08

Intangible assets 354139335.32 354139335.32

Development expenditure

Goodwill 191394422.51 191394422.51

Long-term deferred expenses 20529601.50 15464980.51 -5064620.99

Deferred income tax assets 3346814.27 3346814.27Items 31 December 2020 1 January 2021 Adjustments

Other non-current assets 319739581.67 319739581.67

Total non-current assets 2309074723.30 2311797512.39 2722789.09

Total assets 5695504493.73 5698119034.82 2614541.09

Current liabilities:

Short-term borrowings 1497414079.05 1497414079.05

Derivative financial liabilities 371219136.84 371219136.84

Accounts payable 75384075.39 75384075.39

Account collected in advance 1087874.02 1087874.02

Contract liabilities 346874260.90 346874260.90

Employee payroll payable 33345136.94 33345136.94

Taxes payable 50884214.64 50884214.64

Other payables 72292881.24 72292881.24

Including: Interest payable 21082795.47 21082795.47

Dividends payable 11013302.88 11013302.88

Current portion of non-current liabilities 1154817.69 1154817.69

Other current liabilities 8319696.79 8319696.79

Total current liabilities 2456821355.81 2457976173.50 1154817.69

Non-current liabilities:

Long-term borrowings

Long-term payable to employees 5677134.00 5677134.00

Estimated liabilities

Lease liabilities 1459723.40 1459723.40

Deferred income 68716699.34 68716699.34

Deferred income tax liabilities 65115801.22 65115801.22

Other non-current liabilities

Total non-current liabilities 139509634.56 140969357.96 1459723.40

Total liabilities 2596330990.37 2598945531.46 2614541.09

Owners' equity (or Shareholders' equity):

Capital stock 726950251.00 726950251.00

Other equity instruments

Including: Preferred stock

Perpetual capital bonds

Capital reserves 1674828350.95 1674828350.95Items 31 December 2020 1 January 2021 Adjustments

Less: treasury stock

Other comprehensive income -363258.66 -363258.66

Special reserves

Surplus reserves 122122436.98 122122436.98

Undistributed profit 187033763.26 187033763.26

Total equity attributable to the parent company 2710571543.53 2710571543.53

Minority equity 388601959.83 388601959.83

Total owners' equity (or shareholders' equity) 3099173503.36 3099173503.36 -

Total liabilities and owners' equity (or shareholders' equity) 5695504493.73 5698119034.82 2614541.09

Ⅵ. Notes on Items in Consolidated Financial Statements

Note: The ‘beginning’ of the period refers to January 1 2021 and the ‘end’ of the period refers

to December 31 2021. The previous period refers to the year 2020 and the current period refers to

the year 2021

1. Monetary funds

(1) Classification list

Items Ending Balance Beginning Balance

Cash 15012.17 16761.72

Bank Deposits 465853913.24 299235964.61

Other Currency Funds 41275743.04 36213443.28

Total 507144668.45 335466169.61

Among them: the total amount of money deposited abroad 16432706.23 3153447.17

(2) At the end of the period there are 215857.76yuan of freezing and other restricted funds. Of

this amount 166353.66yuan was unfrozen before the reporting date.

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

restricted.

2. Transactional financial assets

Items Ending Balance Beginning Balance

Financial assets measured at fair value with 40377048.08 63478071.73

changes included in current profits and losses

Among them: debt instrument investment 40377048.08 63478071.73

Total 40377048.08 63478071.733. Notes receivable

(1) Classification list

Items Ending Balance Beginning Balance

Bank acceptance bill 456565.85

Commercial acceptance bill

Total 456565.85

4. Accounts Receivable

（1）Disclosed according to aging

Aging Ending Balance

Within 1 Year (including 1 year) 74560540.98

Among them: Within the credit (within 3 65852621.38

months)

Credit period to 1 year 8707919.60

1 to 2 years (including 2 years) 8594045.46

2 to 3 years (including 3 years) 996000.00

3 to 4 years (including 4 years)

4 to 5 years (including 5 years) 18711.89

More than 5 years 433259.50

Sub-total 84602557.83

Less Bad Debt provision 1908463.21

Total 82694094.62

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

Ending Balance

Book Balance Bad Debt Provision

Type(s)

Provision Book Value

Amount Ratio(%) Amount

Ratio(%)

Separate provision for bad

1324259.501.571324259.50100.00

debts

Portfolio provision for bad

83278298.3398.43584203.710.7082694094.62

debts

Among them: portfolio 1 74329280.51 87.86 584203.71 0.79 73745076.80

portfolio 2 8949017.82 10.58 8949017.82

Total 84602557.83 100.00 1908463.21 82694094.62

（Continued）Beginning Balance

Book Balance Bad Debt Provision

Type(s)

Provision Book Value

Amount Ratio(%) Amount

Ratio(%)

Separate provision for bad

1325135.401.411325135.40100.00

debts

Portfolio provision for bad

92402126.2198.59156458.610.1792245667.60

debts

Among them: portfolio 1 69364375.49 74.01 156458.61 0.23 69207916.88

portfolio 2 23037750.72 24.58 23037750.72

Total 93727261.61 一一 1481594.01 一一 92245667.60

A. Separate provision for bad debts

Ending Balance

Name

Accounts Bad Debt Provision Provision

Receivable Provision Ratio Reason

Beijing Xidan spicy town food expected

996000.00996000.00100.00

limited unrecoverable

Beijing Rongfa Lida Grain and expected

163143.00163143.00100.00

Oil Trade Co. Ltd. unrecoverable

expected

Others 165116.50 165116.50 100.00

unrecoverable

Total 1324259.50 1324259.50 －－ －－

B. Portfolio provision for bad debts

1. Portfolio provision: aging portfolio

Ending Balance Beginning Balance

Name Accounts Bad Debt Provision Accounts Bad Debt Provision

receivable Provision Ratio receivable Provision Ratio

Within 1 Year (including 1

65611523.1634531.9369026628.097466.13

year)

Among them: Within the

63884932.01068653321.590

credit (within 3 months)

Credit period to 1 year 1726591.15 34531.93 2 373306.50 7466.13 2

1 to 2 years (including 2

8594045.46429702.275137267.486863.375

years)

2 to 3 years (including 3

2031789.506357.9020

years)Ending Balance Beginning Balance

Name Accounts Bad Debt Provision Accounts Bad Debt Provision

receivable Provision Ratio receivable Provision Ratio

3 to 4 years (including 4

5045270.4222635.2150

years)

4 to 5 years (including 5

18711.8914969.518051420.0041136.0080

years)

More than 5 years 105000.00 105000.00 100 72000.00 72000.00 100

Total 74329280.51 584203.71 69364375.49 156458.61

2. Portfolio provision: related parties portfolio

Ending Balance Beginning Balance

Name Accounts Bad Debt Provision Accounts Bad Debt Provision

receivable Provision Ratio receivable Provision Ratio

Related parties

8949017.8223037750.72

portfolio

Total 8949017.82 23037750.72

3. details of bad debt provision

The amount changed for the period

Beginning Ending

Items Withdrawal or Other

Balance Addition Write-off Balance

reversal changes

Bad debt provision on

individual basis 1325135.40 875.90 1324259.50

Credit impairment

loss 156458.61 446165.10 18420.00 584203.71

Total 1481594.01 446165.10 875.90 18420.00 1908463.21

4.Accounts receivable actually written off in the current period

Items Write-off amount

Actual amount 18420.00

During the period the board of directors approved to write off the Beijing branch of Hainan

Food Holdings Co. Ltd. and to write off the uncollectible receivables.

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

Ratio of Whethe

Accounts Bad Debt

Debtors totalaccounts Aging r

receivable Provision

receivable (%) related

Tangshan Caofeidian District Within 3 months

25997336.04 30.73 No 374974.00

Finance Bureau 1-2 yearsRatio of Whethe

Accounts Bad Debt

Debtors totalaccounts Aging r

receivable Provision

receivable (%) related

Zhejiang Lvqin Supply Chain

9215135.62 10.89 Within 3 months No

Management Co. Ltd.Wumart South Development

4459551.94 5.27 4-12 months No 30502.52

Co. Ltd.Shanghai Laiyifen Co.Ltd. 3446650.77 4.07 Within 3 months No

Feed Branch of Beijing

Sanyuan Seed Technology 3000236.98 3.55 Within 3 months No

Co. Ltd.Total 46118911.35 54.51 —— —— 405476.52

5. Advanced Payment

(1) Advances are presented by age

Ending Balance Beginning Balance

Aging

Amount Ratio(%) Amount Ratio(%)

Within 1 year (including 1 year) 87713762.15 99.90 282123364.15 99.96

1 to 2 years (including 2 years) 90000.00 0.10 88505.90 0.03

2 to 3 years (including 3 years)

More than 3 years 23100.00 0.01

Total 87803762.15 100.00 282234970.05 100.00

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

Ratio of the total ending

Ending

Debtor Name balance of prepayments

Balance

(%)

TIANJIN CUSTOMS DISTRICT P.R.CHINA 31704415.67 36.11

Sinograin Oils Corporation 12362849.07 14.08

Ahcof International Development Co. Ltd. 11037512.77 12.57

Cargill Ventures (China) Co. Ltd. 9540000.00 10.87

Louis Dreyfus (Tianjin) International Trade

6603326.467.52

Co. Ltd

Total 71248103.97 81.15

6. Other Receivables

A. Overview

(1) ClassificationItem(s) Ending Balance Beginning Balance

Interest Receivable

Dividend Receivable

Other Receivables 284756636.27 541905656.97

Total 284756636.27 541905656.97

B. Other Receivables

（1）Disclosed according to aging

Aging Ending Balance

Within 1 Year (including 1 year) 283134947.28

Among them: Within the credit (within 3 months) 211108084.83

Credit period to 1 year 72026862.45

1 to 2 years (including 2 years) 885837.00

2 to 3 years (including 3 years) 213638.00

3 to 4 years (including 4 years) 99713.99

4 to 5 years (including 5 years) 130000.00

More than 5 years 393197.85

Sub-Total 284857334.12

Less Bad Debt provision 100697.85

Total 284756636.27

（2）Classification of other receivables by nature of funds

Nature of Funds Book Balance at End of Period Book Balance at Beginning of Year

Guaranteed Deposit and Deposit 277445730.08 535330041.21

Intercourse Funds of Units 6142777.03 5472834.58

Employee Receivables 755783.37 532115.87

Tax Refund Receivables 363103.93 302433.21

Personal Intercourse Funds 50000.00

Others 149939.71 274695.69

Total 284857334.12 541962120.56

C. Details about allowance for bad debt

Provision for bad debt Stage 1 Stage 2 Stage 3 TotalExpected credit

Expected Expected credit

loss for the whole

credit loss in loss for the whole

period (with

the next 12 period (no credit

credit

months impairment)

impairment)

Amount on 1st January 2021

6463.5950000.0056463.59

Carrying amount on 1st

January 2021 that in this

period:

——Get into Stage 2

——Get into Stage 3

——Get back to Stage 2

——Get back to Stage 1

Provision for the period 94234.26 94234.26

Reverse for the period

Transfer for the period

Write off for the period 50000.00 50000.00

Other changes

Amount on 31st December

2021100697.85100697.85

D. Details of bad debt provision

Carrying Amount changes for the period

Carrying

amount at

Type Withdrawal or Other amount at the

the Addition Write-off

reversal changes end

beginning

Credit

impairment 56463.59 94234.26 50000.00 100697.85

loss

Total 56463.59 94234.26 50000.00 100697.85

E. Other receivables actually written off in the current period

Items Write-off amount

Actual amount 50000.00

During the period the board of directors approved to write off the Beijing branch of Hainan

Food Holdings Co. Ltd. and to write off the uncollectible receivablesF. Other receivables according to top five of balance at end of period collected by debtors

Proportion in Ending

Nature of Balance at End overall ending balance of

Name of Organization Aging

Funds of Period balance of other bad debt

receivables (%) reserves

94315663.80 W ithin 33.11

Zhongtian Futures Co. Ltd Futures margin

1 year

89987154.70 W ithin 31.59

Haitong Futures Co. Ltd Futures margin

1 year

Sdic Cgog Futures Co. Futures margin 28434143.60 W ithin 9.98

Ltd. 1 year

Dalian Commodity Futures margin 23269880.00 W ithin 8.17

Exchange 1 year

Futures margin 19127100.00 W ithin 6.71

ADM International Sarl

1 year

Total — 255133942.10 — 89.57

G. Receivables related to government grants

Name of Carrying Aging at the

Name of the grant Time amount and evidence of

government amount at the end of the

company expected collection

grants end period

All amount will be collected in

Tax Bureau of Linan

Refund of Within 3 January 2022 the company

DIatrict Hangzhou 363103.93

VAT months always qualify for tax refund

Zhejiang Province

policy for disabled person

Total —— 363103.93 —— ——

7. Inventory

(1) Inventory Category

Ending Balance Beginning Balance

Items Falling Price Falling Price

Book Balance Book Value Book Balance Book Value

Reserves Reserves

Raw Materials 120983829.85 120997.67 120862832.18 303448302.51 303448302.51

Revolving 5247229.29 5247229.29 5520559.22 5520559.22

Materials

Goods and 522101505.11 522101505.11 36413482.38 36413482.38

materials in transit

Inventory goods 1007319237.46 355731.86 1006963505.60 622783856.56 233790.56 622550066.00Ending Balance Beginning Balance

Items Falling Price Falling Price

Book Balance Book Value Book Balance Book Value

Reserves Reserves

Development costs 2415243.42 2415243.42

Developing 5315696.54 1539741.69 3775954.85

commodities

Commission 2762633.88 2762633.88

processing

Replacement of oil 248197500.00 248197500.00 248197500.00 248197500.00

reserve

Total 1903849301.71 476729.53 1903372572.18 1226857274.51 1773532.25 1225083742.26

(2) Inventory Falling Price Reserves and provision for impairment of contract performance

costs

Increased

Decreased Amounts in the

Balance at Amounts in the Current Period Balance at End of

Items Beginning of Current Period

Period

Year Recover or

Accrual Others Others

Charge Off

Stock Goods 233790.56 185390.40 63449.10 355731.86

Develop 1539741.69 1539741.69

Products

Raw material 120997.67 120997.67

In total 1773532.25 306388.07 63449.10 1539741.69 476729.53

Note: the basis for the provision of depreciation is the market quotation of the world granary

website. The other reason is that the development commodities are adjusted to the investment real

estate and the corresponding price adjustment is adjusted synchronously.(

（3）Stock Goods listed by major product type

Ending Balance Beginning Balance

Falling Falling

Items Book

Book Balance Price Book Value Price Book Value

Balance

Reserves Reserves

Grease 975554568.82 170341.46 975384227.36 594886731.71 233790.56 594652941.15

and

oils

Food 31764668.64 185390.40 31579278.24 27880182.78 27880182.78

Others 16942.07 16942.07Ending Balance Beginning Balance

Falling Falling

Items Book

Book Balance Price Book Value Price Book Value

Balance

Reserves Reserves

Total 1007319237.46 355731.86 1006963505.60 622783856.56 233790.56 622550066.00

8. Non-current assets due within one year

Balance at Beginning of

Items Balance at End of Period

Period

Three-year term deposits 156139100.00

In total 156139100.00

9. Other Current Assets

Balance at Beginning of

Items Balance at End of Period

Period

Financial Products 742800000.00 280000000.00

Pre-paid Taxes and Fees 1192806.93 16921026.50

Pending Deduct VAT Input Tax 13930489.13 46701271.74

Fair Value Changes of Items 62577325.41 501828380.12

Trapped at Hedging

In total 820500621.47 845450678.36

10. Long-term Equity Investment

Increase or Decrease in the Current Period

Balance at

Invested Unit Beginning of Confirmed Profit and Additional Negative

Year Loss on Investment Investment Investment

under Equity Law

1. Cooperative Enterprise

Beijing CHIA TAI Feedmill 90824898.49 21297148.65

Limited

Sub-total 90824898.49 21297148.65

2. Joint Venture

China Grain Reserves 119601316.43 16973446.46

(Tianjin) Warehouse

Logistics Co. Ltd.Jingliang Mismi Catering 7336272.87 -448014.87

Management (Beijing) Co.Ltd.Sub-total 126937589.30 16525431.59

Total 217762487.79 37822580.24(Continued)

Increase or Decrease in the Current Period Balance at Ending

Adjustment of Other Announce to Accrual of Others End of Balance of

other changes Distribute Impairment Period Impairment

comprehensive in equity Case Reserves Reserves

income Dividends

or Profits

-105630.50112016416.64

-105630.50112016416.64

-24680000.00111894762.89

6888258.00

-24680000.00118783020.89

-105630.50-24680000.00230799437.53

11. Other equity instruments investment

Item Ending Balance Beginning Balance

Chongqing long jinbao network technology co. LTD 20000000.00 20000000.00

China Net Technology Investment Co. Ltd

Hainan General Chamber of Commerce

Total 20000000.00 20000000.00

12. Investment Real Estate

(1) Investment Real Estate Adopting Cost Measurement Model

Land Use Projects under

Items Buildings Total

Right Construction

One. Original Book Value

1. Balance at Beginning of Year 53844801.60 53844801.60

2. Increased Amounts in the

Current Period

(1) Outsourcing

(2) Inventory transfer

(3) Others

3. Decreased Amounts in the

Current Period

(1) DisposalLand Use Projects under

Items Buildings Total

Right Construction

(2) Other transfer out

4. Balance at End of Period

53844801.6053844801.60

Two. Accumulated Impairment and

Accumulated Amortization

1. Balance at Beginning of Year 20696792.40 20696792.40

2. Increased Amounts in the Current 1634528.94 1634528.94

Period

(1) Accrual or Amortization 1634528.94 1634528.94

3. Decreased Amounts in the

Current Period

(1) Disposal

(2) Other transfer out

4. Balance at End of Period 22331321.34 22331321.34

Three. Impairment Reserves

1. Balance at Beginning of Year 10587796.70 10587796.70

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 10587796.70 10587796.70

Four. Book Value

1. Book Value at End of Period 20925683.56 20925683.56

2. Book Value at Beginning of Year 22560212.50 22560212.50

13. Fixed Assets

1. Overview

(1) Classification

Items Balance at End of Period Balance at Beginning of Year

Fixed Assets 1120758409.49 1131143854.07Items Balance at End of Period Balance at Beginning of Year

Disposal of Fixed Assets

In total 1120758409.49 1131143854.07

2. Fixed Assets

(1) Fixed Assets Situation

Machinery Transportation Electronic Office

Items Buildings Others Total

Equipment Equipment Equipment Equipment

One. Original Book

Value

1. Balance at

1078081803.33749741236.9621309684.2512169795.896663883.311982310.671869948714.41

Beginning of Year

2. Increased

Amounts in the 42680307.70 42033084.81 1802302.05 919994.36 621378.05 108733.24 88165800.21

Current Period

(1) Purchase 1039623.58 7384654.28 1802302.05 919994.36 621378.05 108733.24 11876685.56

(2) Roll-in of Project

36324987.5834648430.5370973418.11

under Construction

(3) Roll-in of

5315696.545315696.54

inventory

3. Decreased

Amounts in the 891569.09 2922000.97 2085057.38 687299.34 147651.28 449747.42 7183325.48

Current Period

(1) Disposal or

891569.092922000.972085057.38687299.34147651.28449747.427183325.48

Scrap

4. Balance at End of

1119870541.94788852320.8021026928.9212402490.917137610.081641296.491950931189.14

Period

Two. Accumulated

Impairment

1. Balance at

339519183.27364190293.6014229852.327539317.975075816.87665353.83731219817.86

Beginning of Year

2. Increased

Amounts in the 39480369.58 52269780.02 1448240.33 1413475.10 567746.97 125917.77 95305529.77

Current Period

(1) Accrual 39480369.58 52269780.02 1448240.33 1413475.10 567746.97 125917.77 95305529.77

3. Decreased

Amounts in the 148227.91 2404765.02 1953615.85 628850.09 140755.67 199225.17 5475439.71

Current Period

(1) Disposal or

148227.912404765.021953615.85628850.09140755.67199225.175475439.71

ScrapMachinery Transportation Electronic Office

Items Buildings Others Total

Equipment Equipment Equipment Equipment

4. Balance at End of

378851324.94414055308.6013724476.808323942.985502808.17592046.43821049907.92

Period

Three. Impairment

Reserves

1. Balance at

7508217.4476825.047585042.48

Beginning of Year

2. Increased

Amounts in the 1539741.69 1539741.69

Current Period

(1) Accrual

(2) Roll-in of

1539741.691539741.69

inventory

3. Decreased

Amounts in the 1912.44 1912.44

Current Period

(1) Disposal or

1912.441912.44

Scrap

4. Balance at End of

9047959.1374912.609122871.73

Period

Four. Book Value

1. Book Value at

731971257.87374722099.607302452.124078547.931634801.911049250.061120758409.49

End of Period

2. Book Value at

731054402.62385474118.327079831.934630477.921588066.441316956.841131143854.07

Beginning of Year

(2) Fixed assets without property right certificate

Project Book Value Reasons for failure to complete certificate of title

Buildings 2236948.76 No title certificate for auxiliary assets

14. Project under Construction

1. Overview

(1) Classification

Items Balance at End of Period Balance at Beginning of Year

Project under Construction 11220840.10 28458413.67

Total 11220840.10 28458413.67

2. Project under Construction

(1) Situation of Project under ConstructionBalance at End of Period Balance at Beginning of Year

Items Book Impairment Book Impairment

Book Value Book Value

Balance Reserves Balance Reserves

1. roasted potato

supporting

6986820.056986820.05

automation line

project

2. Walnut cake

production line of 4234344.00 4234344.00 4780643.33 4780643.33

No.2 plant

3. slope treatment

project of No.3 3584245.07 3584245.07 3565377.15 3565377.15

plant

4. add two 4D

Corn Flake 3207668.25 3207668.25

production lines

5. 32400 tons of

oil tank and

2869993.382869993.38

terminal oil

pipeline project

6. 2600bph

project of

2809734.522809734.52

packaging oil 10L

production line

7. New

production line of

small fried

1784537.821784537.82

compound potato

chips in leisure

No.1 Factory

8. New

production line of 2038825.39 2038825.39

fried potato chips

9. Fried potato

chips automation

1552470.001552470.00

transformation

project and others

10. Others 1363425.64 1363425.64 901169.17 901169.17

Total 11220840.10 11220840.10 28458413.67 28458413.67

(2) Change Condition of Important Engineering Projects under Construction in the Current PeriodRoll-in Fixed Other

Increased

Balance at Assets Decreased

Amounts in Balance at

Project Name Beginning of Amount in the Amounts in

the Current End of Period

Year Current the Current

Period

Period Period

Baked potato supporting

6986820.057468869.1314455689.18

automation line project

Walnut cake production

4780643.331525769.902072069.234234344.00

line of No.2 factory

Slope treatment project of

3565377.1518867.923584245.07

No.3 Factory

Two new 4D Corn Flake

3207668.251939772.105147440.35

production lines

32400 ton oil tank and

2869993.3830888177.5933758170.97

wharf oil pipeline project

2600bph project of

packaging oil 10L 2809734.52 2809734.52

production line

Production line of baked

potato workshop in No.2 1784537.82 790120.35 2574658.17

factory

Fried potato chips

automation transformation 1552470.00 738638.94 2291108.94

project and others

New production line of

2038825.392038825.39

fried potato chips

Total 27557244.50 45409041.32 63108871.36 9857414.46

（3）There was no provision for impairment of Project under Construction during the period.

15. Right-of-use asset

Transportation

Items Buildings Land Use Right In total

Equipment

One Original Book Value

1. Balance at Beginning of Year 2614541.09 202276.99 4970592.00 7787410.08

2. Increased Amounts in the Current 1808764.67 1808764.67Transportation

Items Buildings Land Use Right In total

Equipment

Period

(1) Lease 1808764.67 1808764.67

3. Decreased Amounts in the

Current Period

(1) Expiration of the lease or change

the lease term

4. Balance at End of Period 4423305.76 202276.99 4970592.00 9596174.75

Two Accumulated Depreciation

1. Balance at Beginning of Year

2. Increased Amounts in the Current

1337882.8399917.64112968.00

Period 1550768.47

(1) Accrual 1337882.83 99917.64 112968.00

1550768.47

3. Decreased Amounts in the

Current Period

Lease expiration or change

4. Balance at End of Period 1337882.83 99917.64 112968.00 1 550768.47

Three Impairment Reserves

1. Balance at Beginning of Year

2. Increased Amounts in the Current

Period

(1) Accrual

3. Decreased Amounts in the

Current Period

(1) Disposal

4. Balance at End of Period

Four Book Value

1. Book Value at End of Period 3085422.93 102359.35 4857624.00 8045406.28

2. Book Value at Beginning of Year 2614541.09 202276.99 4970592.00 7787410.08

16. Intangible Assets

(1) Intangible Assets Situation

Land Use Trademark Others

Items Software In total

Right Right

One Original Book Value

1. Balance at Beginning of

4333374.75316407869.54154841200.00689220.00476271664.29

YearLand Use Trademark Others

Items Software In total

Right Right

2. Increased Amounts in the

660369.00660369.00

Current Period

(1) Purchase 660369.00 660369.00

3. Decreased Amounts in the

26820.0026820.00

Current Period

(1) Disposal 26820.00 26820.00

4. Balance at End of Period 4993743.75 316407869.54 154841200.00 662400.00 476905213.29

Two Accumulated

Amortization

1. Balance at Beginning of

3597758.6461830987.6456035371.695811.00121469928.97

Year

2. Increased Amounts in the

284814.286809477.317713925.861788.0014810005.45

Current Period

(1) Accrual 284814.28 6809477.31 7713925.86 1788.00 14810005.45

3. Decreased Amounts in the

7599.007599.00

Current Period

(1) Disposal 7599.00 7599.00

4. Balance at End of Period 3882572.92 68640464.95 63749297.55 - 136272335.42

Three Impairment Reserves

1. Balance at Beginning of

662400.00662400.00

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 662400.00 662400.00

Four Book Value

1. Book Value at End of Period 1111170.83 247767404.59 91091902.45 339970477.87

2. Book Value at Beginning of

735616.11254576881.9098805828.3121009.00354139335.32

Year

17. Goodwill

(1) Original Book Value of Goodwill

Name of Invested Balance at Increase in the Current Decrease in the Current Balance at

Unit or Items Beginning of Period Period End ofForming Goodwill Year Formed by Period

Enterprise Others Disposal Others

Merger

Acquire stock shares

of Zhejiang

191394422.51191394422.51

Xiaowangzi Food

Co. Ltd.In total 191394422.51 191394422.51

(2) Relevant information about the group or groups of assets that include goodwill

Book value of Asset group or portfolio of asset groups

goodwill Main components Book value Determinati Is there any

on method change in the

current period

191394422.51 Fixed assets investment 835262103.15 Income No

real estate intangible method

assets construction in

progress etc

Note: Taking December 31 2021 as the base date of evaluation Beijing Jinggrain Food Co. Ltd.conducted impairment tests on the goodwill l formed by the acquisition of the equity of Zhejiang

Little Prince Food Co. Ltd. The book value of the asset group including goodwill was 835.26

million yuan and the recoverable amount was no less than 843.20 million yuan. The test results

showed that there was no impairment of goodwill.The component of group or groups of assets: impairment test for goodwill related asset as group

of asset main cash in is independent from cash in of other group of assets this group of assets

should be consistent with the group of assets that was recognized in the impairment test of goodwill

on acquisition date and previous years.

(3) Recognition method of goodwill impairment loss and process key assumptions and key

parameters of goodwill test

1) At the end of the period the company performed an impairment test on the asset group

related to goodwill. When performing an impairment test on a related asset group or asset group

combination that includes goodwill if there is an impairment of the asset group or asset group

combination related to goodwill If there are signs an impairment test is performed on the asset group

or combination of asset groups that does not include goodwill and the recoverable amount is

calculated and compared with the book value to confirm the corresponding impairment loss. Then

perform an impairment test on the asset group or asset group combination that includes goodwill and

compare the book value of the asset group or asset group combination that contains the distributed

goodwill with its recoverable amount. If the relevant asset group or asset group combination isrecoverable The amount is lower than its book value and the impairment loss of goodwill is

recognized.

2) Important key assumptions adopted and their basis: 1. As for the actual situation of assets on

the evaluation base date it is assumed that the company continues to operate; 2. Assume that the

cash inflows rated as units after the evaluation base date are uniform inflows and cash outflows are

uniform outflows; 3.On the basis of the existing management methods and management levels the

company's business scope and methods are consistent with the current direction; 4. There will be no

major changes in the interest rates exchange rates taxation benchmarks and tax rates and policy

levy fees; 5. The management of the unit being assessed is responsible stable and capable of

performing its duties.

3）Key parameter

Revenue

Revenue growth

Forecast growth rate Pre-tax

Item rate over the Profit margin

period over the stable discount rate

forecast period

period

Zhejiang Little Calculated based on

Prince Food Co. 2022 to 2025 2.10% 0 forecasted revenue 15.47%

Ltd. costs expenses etc.

(4) Impact of goodwill impairment test

After testing the company's goodwill formed by the acquisition of the operating asset group of

Zhejiang Little Prince Food Co. Ltd. is not impaired.

18. Long-term Unamortized Expenses

Increased

Balance at Amortized Other

Amounts in Balance at

Items Beginning of Amounts in the Decreased

the Current End of Period

Year Current Period Amounts

Period

Reconstruction of majuqiao

14888320.13674188.0814214132.05

plant

Amortization of laboratory

1837732.6926601.981811130.71

decoration costs

Factory No.3 compartment

604558.74604558.74

maintenance

Housing renovation 576660.38 275532.06 98195.53 753996.91

Total 15464980.51 2717823.49 798985.59 17383818.41

19. Deferred Income Tax Assets/Deferred Income Tax Liabilities

(1) Deferred Income Tax Assets Not Being OffsetBalance at End of Period Balance at Beginning of Year

Items Deductible Deductible Deferred Income Deferred Income Tax

Temporary Temporary

Tax Assets Assets

Difference Difference

Asset Impairment

560563.61140140.91254446.9963611.73

Reserves

Lease liabilities 196089.81 49022.46

Deductible Loss 30360671.96 7590167.99

Credit impairment Loss 1808563.08 452140.67 1368158.01 341929.04

Deferred Income 12097654.47 3024413.62 10722337.40 2680584.35

Wages payable 5677134.00 1419283.50 5677134.00 1419283.50

Valuation of Financial

Instruments and

33944248.108486062.03

Derivative Financial

Instruments

In total 54284253.07 13571063.19 48382748.36 12095576.61

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

Balance at End of Period Balance at Beginning of Year

Items Taxable Temporary Deferred Income Taxable TemporaryD eferred Income Tax

Difference Tax Liabilities Difference Liabilities

Valuation and 154787977.45 38696994.37 164849010.97 41212252.73

appreciation of assets

in merger of enterprises

not under the same

control

Valuation of Financial 26215702.16 6553925.54 130600895.97 32652310.83

Instruments and

Derivative Financial

Instruments

Total 181003679.61 45250919.91 295449906.94 73864563.56

(3)Details of Deferred Income Tax Liabilities after Offset

Carrying amount

Offseting Carrying amount

offseting amount of after offsetting

amount of after offsetting

deferred tax assets between deferred

Items deferred tax between deferred

and liabilities at the tax assets and

assets and tax assets and

end of last period liabilitie at the end

liabilities liabilities

of last period

Deferred tax asset 13571063.19 8748762.34 3346814.27

Deferred tax liabilities 45250919.91 8748762.34 65115801.22

(4)Details of Deferred Income Tax Assets Not Being ConfirmedItems Balance at End of Period Balance at Beginning of Year

Deductible temporary differences 200597.85 33884.15

Deductible Loss 107793038.93 100248841.85

In total 107993636.78 100282726.00

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

following years

Balance at End of

Year Balance at Beginning of Year Notes

Period

20214504020.42

20224021787.394021787.39

202319123515.5319123515.53

202447153825.4547484926.46

202525114592.0525114592.05

202612379318.51

Total 107793038.93 100248841.85

20. Other Non-current Assets

Ending Balance Beginning Balance

Provis Provision

Items ion for for

Book balance Book value Book balance Book value

impair impairme

ment nt

Equipment 2517240.00 2517240.00

and Project

Funds

Three-year 189741996.74 189741996.74 317222341.67 317222341.67

term deposit

Total 189741996.74 189741996.74 319739581.67 319739581.67

21. Short-term Borrowings

（1）Classification of Short-term Borrowings

Items Balance at End of Period Balance at Beginning of Year

Guaranteed Loan 23262063.93 105088229.17

Fiduciary Loan 1498407537.42 1392325849.88

In total 1521669601.35 1497414079.05

22. Derivative financial liabilityItem Ending balance Beginning balance

Changes in fair value of hedging instruments 70305871.37 371219136.84

Total 70305871.37 371219136.84

23. Accounts Payable

（1）Accounts Payable Listed

Items Balance at End of Period Balance at Beginning of Year

Material Funds Payable 176725835.45 60908293.40

Project Funds Payable 7291515.18 12181233.26

Equipment Funds Payable 1746573.40 1182750.00

Others 984822.39 1111798.73

In total 186748746.42 75384075.39

24. Advance payment

（1）Advance payment Listed

Items Balance at End of Period Balance at Beginning of Year

Advance collection of rent 996173.41 1087874.02

In total 996173.41 1087874.02

25. Contract liabilities

（1） Classification of contract liabilities

Items Balance at End of Period Balance at Beginning of Year

Loans 520816995.93 341860984.30

Service payment 5013276.60

In total 520816995.93 346874260.90

26. Wages Payable

（1）List of Wages Payable

Balance at

Increase in the Decrease in the Balance at End

Items Beginning of

Current Period Current Period of Period

Year

One Short-term 32098807.71 325952837.77 317293973.00 40757672.48

Compensation

Two After-service Welfare- 1246329.23 31654445.70 31527796.92 1372978.01

Set up ESP liabilities

Three Dismission Welfare 503074.27 503074.27Balance at

Increase in the Decrease in the Balance at End

Items Beginning of

Current Period Current Period of Period

Year

In total 33345136.94 358110357.74 349324844.19 42130650.49

（2）List of Short-term Compensation

Balance at

Increase in the Decrease in the Balance at End

Items Beginning of

Current Period Current Period of Period

Year

1. Wage Bonus Allowance 28101795.99 2 76304575.40 2 67577018.99 36829352.40

and Subsidy

2. Welfare Expense of 20.00 9220188.74 9220188.74 20.00

Employee

3. Social Insurance Expense 683142.38 19597336.49 19413440.99 867037.88

Among them: Medical 579700.06 17959986.89 17772707.33 766979.62

Insurance Premiums

Industrial Injury Insurance 52319.34 1046126.00 1033071.93 65373.41

Premiums

Birth Insurance Premiums 50718.04 440079.57 456112.76 34684.85

Others 404.94 151144.03 151548.97

4. Housing Provident Funds 294633.05 15146374.28 15311842.10 129165.23

5. Labor Union Expense and 3019216.29 5684362.86 5771482.18 2932096.97

Personnel Education Fund

In total 32098807.71 3 25952837.77 3 17293973.00 40757672.48

（3）List of Stated Drawings Plan

Balance at

Increase in the Decrease in the Balance at End

Items Beginning of

Current Period Current Period of Period

Year

1. Basic Pension Insurance 1173795.55 27100169.39 26992049.18 1281915.76

2. Unemployment Insurance 36450.79 981723.01 973698.64 44475.16

Expense

3. Enterprise Annuity 36082.89 3572553.30 3562049.10 46587.09

Charges

Total 1246329.23 31654445.70 31527796.92 1372978.01

27. Taxes and Fees Payable

Balance at Beginning of

Items Balance at End of Period

Year

Corporate Income Tax 74174903.15 21972563.71Balance at Beginning of

Items Balance at End of Period

Year

VAT 23320246.23 20557653.24

Urban Maintenance and Construction Tax 1876669.91 1662803.83

House Property Tax 2302350.63 2330072.39

Land Use Tax 176087.89 1203859.39

Individual Income Tax 671107.90 1681176.51

Educational Surtax 760843.86 663399.57

Local Educational Surtax 559372.28 494409.45

Stamp Tax 500830.44 314395.32

Environmental protection tax 5193.36 3737.44

Water conservancy construction fee 247.04 143.79

In total 104347852.69 50884214.64

28. Other Accounts Payable

A. Overview

(1) Classification

Balance at Beginning of

Items Balance at End of Period

Year

Interest Payable 21082795.47 21082795.47

Dividends Payable 3213302.88 11013302.88

Other Accounts Payable 49689488.04 40196782.89

In total 73985586.39 72292881.24

B. Interest Payable

(1) Classification

Balance at Beginning of

Items Balance at End of Period

Year

Loan Interest between Enterprises 21082795.47 21082795.47

In total 21082795.47 21082795.47

C. Dividends Payable

(1) Classification

Balance at Beginning of

Items Balance at End of Period

YearBalance at Beginning of

Items Balance at End of Period

Year

Common stock dividends 7800000.00

Others 3213302.88 3213302.88

In total 3213302.88 11013302.88

D. Other Accounts Payable

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

Balance at Beginning of

Items Balance at End of Period

Year

Guaranteed Deposit and Deposit 25053238.93 16271518.35

Intercourse Funds between Units 9931464.29 13468108.09

Intercourse Funds of Related Parties 5722550.45 1831079.90

Personal Intercourse Funds 4032688.22 4025881.59

Various Insurances of Employee 2768202.89 2102370.03

Others 2181343.26 2497824.93

In total 49689488.04 40196782.89

29. Non-current liabilities due within one year

Item End balance Beginning balance

Current portion of lease liability 1582978.69 1154817.69

Total 1582978.69 1154817.69

30. Other current liability

1. Other current liability statement

Item End balance Beginning balance

Value-added tax to be written off 22994553.60 8319696.79

Total 22994553.60 8319696.79

31. Long term borrowing

Item End balance Beginning balance Interest Rate

Guaranteed Loan 71000000.00 3.51%

Total 71000000.00

32. Lease liabilityItem End balance Beginning balance

Lease liability 1694702.62 1459723.40

33. Long term wage payable

(1)List of long-term wage payable

Items Balance at End of Period Balance at Beginning of Year

Net liabilities of defined benefit

plan in post employment

benefits

Dismission Welfare

Other Long-term Welfare 5677134.00 5677134.00

In total 5677134.00 5677134.00

34. Deferred Income

Balance at Increase in Decrease in Balance at

Items Beginning of the Current the Current End of Cause of Formation

Year Period Period Period

Government Subsidy 68716699.34 129467.73 3601667.59 65244499.48

In total 68716699.34 129467.73 3601667.59 65244499.48 --

Among them items involving government subsidy are as follows:

Increase in Asset

Balance at Charge to Balance at

Items Receiving the Other related /

Beginning other End of

Subsidy Current changes income

of Year Profits Period

Period related

Enterprise foundation

supporting in the

construction stage of

"Tianjin Lingang 49929123.61 1277504.16 48651619.45 Asset related

Industrial Zone

Management

Committee"

Special subsidy for

infrastructure 10296486.90 908692.09 9387794.81 Asset related

investment

The relocation

4232401.96 384763.82 3847638.14 Asset related

compensation

Tianjin Binhai New

District’s Industrially

2092592.45 222222.24 1870370.21 Asset related

Technical Renovation

and Park ConstructionIncrease in Asset

Balance at Charge to Balance at

Items Receiving the Other related /

Beginning other End of

Subsidy Current changes income

of Year Profits Period

Period related

Funds as well as

Expenditures for

Science and

Technology

Key technology

research and

industrialization

778388.24 77838.84 700549.40 Asset related

project of "moderate

processing" of grain

and oil

Construction of

provincial grain

reserve information

633746.30 200686.32 433059.98 Asset related

management system to

form asset entry

project

Research and

technology

demonstration of

green and clean 450000.00 450000.00 Asset related

production equipment

and process for edible

oil

Design of electric

heating system for oil 303959.88 79960.12 223999.76 Asset related

tank

Special subsidies for

Beijing Reserve

129467.73 129467.73 Asset related

Granary Facility

Maintenance

In total 68716699.34 129467.73 3601667.59 65244499.48 --

35. Share Capital

Balance at End

Changes in the Current Period（+、-）

Balance at of Period

Items Beginning of Share Transfer

Year New Share Share of Provident Others Sub-total

Issue Donation

Fund

1. Shares with

207336985.00-164877598.00-164877598.0042459387.00

Restricted Conditions

(1) State ShareholdingBalance at End

Changes in the Current Period（+、-）

Balance at of Period

Items Beginning of Share Transfer

Year New Share Share of Provident Others Sub-total

Issue Donation

Fund

(2) State-owned -164728098.00 -164728098.00 149500.00

Legal-person 164877598.00

Shareholding

(3) Other Domestic

42459387.00-149500.00-149500.0042309887.00

Capital Shareholding

Including: Domestic -149500.00 -149500.00 1150000.00

Legal-person 1299500.00

Shareholding

Domestic Natural

41159887.0041159887.00

Person Shareholding

(4) Foreign

Shareholding

Including: Foreign

Legal-person

Shareholding

Foreign Natural

Person Shareholding

2. Tradable Shares

without Restricted 519613266.00 164877598.00 164877598.00 684490864.00

Conditions

(1) RMB Ordinary

454638266.00164877598.00164877598.00619515864.00

Shares

(2) Domestically

64975000.0064975000.00

Listed Foreign Shares

(3) Listed Foreign

Shares Overseas

(4) Others

In total 726950251.00 726950251.00

36. Capital Reserves

Balance at Increase in Decrease in

Balance at End

Items Beginning of the Current the Current

of Period

Year Period Period

Capital Premium (Stock 1322887986.38 1322887986.38

Premium)

Capital Reserves Roll-in 112316357.36 112316357.36

Under Original System

Other Capital Reserves 239624007.21 1090000.00 240714007.21

In total 1674828350.95 1090000.00 1675918350.95

Note: The increase of capital reserve was due to the funds received from the parent company

Beijing Capital Agriculture Group for technology projects of RMB1.09 million.37. Other Comprehensive Incomes

Amounts Occurred in the Current Period

Amounts Less: included in other

Less: Other

Occurred comprehensive income Attributable to

Balance at Comprehensive Incomes Attributable to

Items before in the previous period Less: Income Tax Minority Balance at End of

Beginning of Charged at Earlier Stage Parent Company

Income Tax in and transferred to Expense Shareholders After Period

Year and Current Roll-in Profit After Tax

the Current retained income in the Tax

and Loss

Period current 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 riskAmounts Occurred in the Current Period

Amounts Less: included in other

Less: Other

Occurred comprehensive income Attributable to

Balance at Comprehensive Incomes Attributable to

Items before in the previous period Less: Income Tax Minority Balance at End of

Beginning of Charged at Earlier Stage Parent Company

Income Tax in and transferred to Expense Shareholders After Period

Year and Current Roll-in Profit After Tax

the Current retained income in the Tax

and Loss

Period current period

Two Other -363258.66 -319023.56 -319023.56 -682282.22

comprehensive incomes

that will be classified

into profit and loss

1. Other comprehensive -355212.00 -105630.50 -105630.50 -460842.50

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 hedgingAmounts Occurred in the Current Period

Amounts Less: included in other

Less: Other

Occurred comprehensive income Attributable to

Balance at Comprehensive Incomes Attributable to

Items before in the previous period Less: Income Tax Minority Balance at End of

Beginning of Charged at Earlier Stage Parent Company

Income Tax in and transferred to Expense Shareholders After Period

Year and Current Roll-in Profit After Tax

the Current retained income in the Tax

and Loss

Period current period

6. Converted difference -8046.66 -213393.06 -213393.06 -221439.72

between foreign

currency financial

statements

Total -363258.66 -319023.56 -319023.56 -682282.2238. Surplus Reserves

Balance at Increase in the Decrease in the Balance at End of

Items

Beginning of Year Current Period Current Period Period

Statutory 84487609.05 84487609.05

Surplus

Reserves

Free Surplus 37634827.93 37634827.93

Reserves

In total 122122436.98 122122436.98

39. Undistributed Profit

Amounts in the Amounts in the

Items

Current Period Prior Period

Adjustment on undistributed profit at end of last 187033763.26 2186806.56

year

Adjustment on total number of undistributed

profit at beginning of period (increase+ and

decrease-)

Adjusted undistributed profit at beginning of 187033763.26 2186806.56

period

Add: net profit attributable to parent company in 204459771.08 184846956.70

the current period

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 391493534.34 187033763.26

40. Operation Revenue and Operation Cost

(1)Operation Revenue and Operation Cost

Amounts in the Current Period Amounts in the Prior Period

Items

Revenue Cost Revenue Cost

Prime Business 11728067785.65 11016949345.82 8697572481.21 8071341928.74

Other Business 35026049.91 20205123.68 44177430.90 19505316.68

In total 11763093835.56 11037154469.50 8741749912.11 8090847245.42

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

Name of Industry Amounts in the Current Period Amounts in the Prior Period(or Business) Revenue Cost Revenue Cost

Oil and Oil Seeds 10791474243.86 10317711108.68 7765755097.07 7410229164.25

Food Processing 920002290.84 694188764.74 898193522.11 633566522.42

Others 16591250.95 5049472.40 33623862.03 27546242.07

In total 11728067785.65 11016949345.82 8697572481.21 8071341928.74

(3)Prime Business (Region-classified)

Name of Amounts in the Current Period Amounts in the Prior Period

Region Revenue Cost Revenue Cost

North China 10123343396.24 9651908242.01 7884008703.50 7498580786.26

East China 686657679.09 512187178.67 686167569.63 473944001.23

Northeast 137074930.91 111781498.62 127396208.08 98817141.25

China

South East 780991779.41 741072426.52

In total 11728067785.65 11016949345.82 8697572481.21 8071341928.74

41. Tariff And Annex

Amounts in the Current Amounts in the Prior

Items

Period Period

Urban Maintenance and Construction Tax 8123144.87 6612721.25

Educational Surtax 3533840.85 2895143.94

Local Educational Surtax 2355895.48 1930095.99

House Property tax 5496760.45 6842452.33

Land Use Tax 247528.32 2222677.37

Stamp Tax 3952317.43 2582084.39

Vehicle and Vessel Use Tax 40100.87 40775.71

Land Value Added Tax 4790.20

Other Taxes and Fees 39411.60 51780.08

In total 23788999.87 23182521.26

42. Sales Expenses

Amounts in the Amounts in the

Items

Current Period Prior Period

Employee Compensation (including social security etc) 77384564.22 72069470.68

Sales Promotion Expenses 24192308.99 39131372.82

Warehousing Fees 11180870.38 13401508.98

Depreciation 13626528.80 13195597.53

Travel Expenses 6561854.51 5425245.85Amounts in the Amounts in the

Items

Current Period Prior Period

Material consumption sample and product cost 2171906.30 7457562.25

Lease fee 2000200.72 2110200.00

Repair Costs 1600732.45 4741287.38

Operation Expenses 3122152.06 4142565.31

Terminal Charges 1123800.00 1769880.36

Water and Electricity Fees 1225185.96 1149996.78

Commodity Wastage 116599.55 1144468.29

Vehicle Fees 992762.32 653952.78

Packing Expenses 300227.81 606343.75

Test and Detection Fees 226300.00 252606.47

Business Entertainment Expenses 212052.40 221142.33

Labor Protection Fees 185886.35 134970.62

Commercial Insurance Expenses 14344.90 9339.62

Others 1077840.52 920799.12

Total 147316118.24 168538310.92

43. Administration Expenses

Amounts in the Amounts in the

Items

Current Period Prior Period

Employee Compensation (including social security etc) 121587427.82 105757801.44

Impairment Costs 18237865.60 21138588.30

Amortization of Assets 15563814.96 15395887.82

Fees of Employing Agent 13163766.91 12235888.01

Company Expenses 7442124.18 5320755.54

Repair Costs 3259784.08 3347098.20

Lease fee 3039488.99 3335385.77

Vehicle Fees 2675743.19 2737975.97

Security Protection Fees 1469824.47 953250.21

Information Network Fees 1312483.04 2558612.63

Environmental Protection Fees 1304184.21 1031270.41

Business Entertainment Expenses 1089431.81 1180688.87

Commercial Insurance Expenses 995916.41 991422.05

Workers Insurance Expenses 956937.28 970146.22

Travel Expenses 713609.91 409662.51

Material Consumption 616035.77 545101.54Amounts in the Amounts in the

Items

Current Period Prior Period

Labor Protection Fees 489960.00 782547.70

Taxes in Expenses 222145.86 146246.44

Other Expenses 4627347.70 700399.30

In total 198767892.19 179538728.93

44. Research and Development Expenses

Amounts in the Prior

Items Amounts in the Current Period

Period

Salary 8705588.81 6967316.66

Material consumption 2434367.21 1713717.37

Design expense 391188.30 308142.99

Transportation Expense 35559.99 48507.01

Others 483243.65 865537.90

In total 12049947.96 9903221.93

45. Financial Expenses

Amounts in the Prior

Items Amounts in the Current Period

Period

Interest Expenses 42302007.06 31742996.45

Less: Interest Income 26216178.46 16035923.84

Exchange Profit and Loss 82807.14 3881862.45

Service Charges 4954473.93 1527207.20

In total 21123109.67 21116142.26

46. Other Profits

Amounts in Amounts in

Items the Current the Prior

Period Period

Government Subsidy Related to Daily Corporate Activities 13801864.25 15837109.11

Return of Service Charges of Withholding Individual Income Tax 642939.07 281742.91

Refund of VAT and surtax 90280.00 103652.86

In total 14535083.32 16222504.88

47. Investment Income

Amounts in the Amounts in the

Items

Current Period Prior Period

Long-term equity investment income accounted 37822580.24 19542664.00Amounts in the Amounts in the

Items

Current Period Prior Period

with equity method

Investment income from disposal of wealth 5161567.20 13327294.52

management products

Investment income of disposing trading financial 668372.69 4097586.02

asssets

Investment income obtained during the holding of 387257.58 401460.93

transactional financial assets

Others 506874.91

In total 44039777.71 37875880.38

48. Profits on Changes in Fair Value

Source of generating income with changes in fair Amounts in the Amounts in the

value Current Period Prior Period

Financial assets that are measured as per fair value -66667420.88 -16467791.36

and for which the changes are included in the

current profit and loss

Including: income with changes in fair value -66667420.88 -16467791.36

generated by derivative financial instruments

Trading financial liabilities

Investment real estate measured by fair value

In total -66667420.88 -16467791.36

49. Credit impairment loss

Amounts in the Amounts in the

Items

Current Period Prior Period

Accounts receivable bad debt loss -445289.20 30273.95

Other receivables bad debt loss -94234.26 221436.24

Total -539523.46 251710.19

50. Loss from Asset Devaluation

Amounts in the Current Amounts in the Prior

Items

Period Period

Loss on Bad Debts

Loss on Inventory Price Drop -306388.07 -63449.10

In total -306388.07 -63449.10

51. Assets Disposal IncomeAmounts in the Amounts in the Prior

Items

Current Period Period

Gains or losses on disposal of fixed assets -208369.12 38752.37

In total -208369.12 38752.37

52. Non-operating Income

(1)Classification

Amounts

Amounts in Amounts in Charged to

Items the Current the Prior Non-recurring

Period Period Profit and

Loss

Total non current assets retirement gains: 72098.18 37474.17 72098.18

Including: fixed assets scrap profit 72098.18 37474.17 72098.18

profit from scrap of intangible assets

Penalty income 994966.56 74975.30 994966.56

Payable amounts not required to be paid 487265.26 487265.26

Government Subsidy 174221.00 60000.00 174221.00

Relocation Compensation 144789.85 159967.20 144789.85

Other Gains 194032.35 414172.75 194032.35

In total 2067373.20 746589.42 2067373.20

(2)Government Subsidy Charged to Non-recurring Profit and Loss

Amounts in the Amounts in the Asset related /

Subsidy projects

Current Period Prior Period income related

Relocation Compensation 119121.00 Income related

Incentive Funds 45100.00 Income related

Special subsidies for the activities of "two 10000.00 Income related

new" organisations

Quality and patent awards in 2020 50000.00 I ncome related

Relief policy subsidy 10000.00 I ncome related

Total 174221.00 60000.00 -

53. Non-operating Expenses

Amounts

Amounts in the Amounts in the Charged to

Items

Current Period Prior Period Non-recurring

Profit and Loss

Total loss on scrap of non current assets 157143.75 457274.93 157143.75

Including: loss on scrap of fixed assets 157143.75 457274.93 157143.75Amounts

Amounts in the Amounts in the Charged to

Items

Current Period Prior Period Non-recurring

Profit and Loss

Penalty expenditure 24500.00 1020523.67 24500.00

Others 146997.54 410346.39 146997.54

Total 328641.29 1888144.99 328641.29

54. Income Tax Expenses

(1) List of Income Tax Expenses

Amounts in the Amounts in the

Amounts in the Current Period

Prior Period Current Period

Income Tax Expenses of the Current Period 106340597.83 54532194.91

Deferred Income Tax Expenses -30089130.23 11583103.71

Total 76251467.60 66115298.62

(2) Accounting Profit and Income Tax Expense Adjustment Process

Items Amounts in the Amounts in the Prior

Current Period Period

Total Profits 315485189.54 285339793.18

Income tax expenses calculated by 78871297.39 71334948.30

statutory/applicable tax rate

Effect of subsidiary corporations being -1844755.24 -947694.04

applicable to different tax rates

Adjustment on effect of income tax in the 2489564.19 430220.89

prior period

Effect of Non-taxable Incomes -5760010.74 -3847972.30

Effect of Non-deductible cost expense and -879902.43 970773.85

loss

Effect of deductible loss on usage of -5363511.97 -5783060.94

unconfirmed deferred income tax assets in

the prior period

Effect of deductible temporary difference or 9498499.81 6278648.02

deductible loss on unconfirmed deferred

income tax in the current period

Effect of deductions -795213.37 -2320565.16

Others 35499.96

Income Tax Expenses 76251467.60 66115298.6255. Other comprehensive income items and their income tax impact and

transferred to profit and loss

See details of ‘Appendix Six Notes on Items in Consolidated Financial Statements

37 Other Comprehensive Incomes’

56. Notes to items related cash flow statement

(1) Receiving other cash related to operation activities

Amounts in the Amounts in the

Items

Current Period Prior Period

Future Margins 1459292560.77 874862645.55

Intercourse Funds of Other Units 106778161.58 47080919.02

Interest Income 17053537.35 15727323.95

Intercourse Funds of Related Parties 3304968.87 6059604.42

Non-operating Income and other income 4106124.86 14165759.99

Others 3238949.73 5979776.55

Total 1593774303.16 963876029.48

(2) Other Cash Payment Related to Operation Activities

Amounts in the Amounts in the

Items

Current Period Prior Period

Future Margins 1594071648.75 1383095725.00

Payment for Administration Expenses 43378783.81 36716789.68

Intercourse Funds of Other Units 13893169.13 85094941.48

Payment for Operating Expenses 56305025.22 103477595.33

Intercourse Funds of Related Parties 7669514.72 27810666.27

Bank Charges 4879506.88 1527207.20

Petty Cash Paid 198860.83 785283.72

Non-operating Expenses 90694.64 1435373.86

Others 6689174.26 10217449.20

In total 1727176378.24 1650161031.74

(3) Other cash received related to investment activities

Amounts in the Amounts in the

Items

Current Period Prior Period

Fixed assets subsidy 960000.00

In total 960000.00

(4) Other cash received related to financing activitiesAmounts in the Amounts in the Prior

Items

Current Period Period

Subsidies related to R&D from Beijing Capital 1090000.00

Agriculture Group

In total 1090000.00

(5) Other cash paid related to financing activities

Amounts in the Amounts in the Prior

Items

Current Period Period

Acquisition of minority shareholders' equity of 104730266.66

Zhejiang Little Prince

Lease payment amount 937516.52

In total 937516.52 104730266.66

57. Supplementary Materials of Cash Flows Statement

(1) Supplementary Materials of Cash Flows Statement

Amounts in the Amounts in the

Supplementary Materials

Current Period Prior Period

1. Adjusting net accounting profit to operating

cash flow

Net Profit 239233721.94 219224494.56

Add: Assets Impairment Reserves 306388.07 63449.10

Credit impairment loss 539523.46 -251710.19

Fixed Assets Depreciation Oil-and-gas Assets 98490827.18 111137864.85

Depreciation and Productive Biological Assets

Depreciation

Amortization of Intangible Assets 14810005.45 14749656.41

Amortization of Long-term Deferred Expenses 798985.59 935641.33

Losses on Disposal of Fixed Assets Intangible Assets

and Other Long-term Assets (Fill in profit with symbol 208369.12 -38752.37

“－”)

Losses on Retirement of Fixed Assets (Fill in profit

85045.57419800.76

with symbol “－”)

Losses on Changes in Fair Value (Fill in profit with

66667420.8816467791.36

symbol “－”)

Financial Expenses (Fill in profit with symbol “－”) 42302007.06 31742996.45

Investment Losses (Fill in profit with symbol “－”) -44039777.71 -37875880.38

Decrease in Deferred Income Tax Assets (Fill in

-10224248.92-743747.89

increase with symbol “－”)

Increase in Deferred Income Tax Reliabilities (Fill in

-19864881.3112326851.60

decrease with symbol “－”)Amounts in the Amounts in the

Supplementary Materials

Current Period Prior Period

Decrease in Inventory (Fill in increase with symbol

-682307723.74186560389.70

“－”)

Decrease in Items of Operating Receivables (Fill in

461225511.97-682322952.93

increase with symbol “－”)

Increase in Items of Operating Receivables (Fill in

464008881.83-118936802.44

decrease with symbol “－”)

Others

Net Cash Flows from Operating Activities 632240056.44 -246540910.08

2. Major investment and financing activities that do

not involve cash payments

Conversion of Debt into Capital

Convertible Bonds Due Within One Year

Fixed Assets under Financing Lease

3. Net change conditions in cash and cash

equivalents

Cash balance at end of period 506928810.69 334389017.41

Less: cash balance at beginning of period 334389017.41 555097777.21

Add: balance of the cash equivalents at end of period

Less: balance of the cash equivalents at beginning of

period

Cash and cash equivalent net increase quota 172539793.28 -220708759.80

(2) Composition of cash and cash equivalents

Balance at

Balance at End of

Items Beginning of

Period

Period

One Cash 506928810.69 334389017.41

Including: cash in stock 15012.17 16761.72

Bank deposit available for payment at any time 465650779.09 298158812.41

Other currency funds available for payment at any 41263019.43 36213443.28

time

Deposits with central bank available for payment

Interbank deposit

Interbank placements

Two Cash Equivalents

Including: bond investment maturing within three

months

Three Balance of Cash and Cash Equivalents at End 506928810.69 334389017.41Balance at

Balance at End of

Items Beginning of

Period

Period

of Period

Including: restricted cash and cash equivalents used

by parent company or intra-group affiliates

58. Assets with restricted ownership or right to use

Items Book Value at End of Period Reasons being Restricted

Currency Funds 215857.76 Letter of Credit Margin and

Account Suspension

Inventory 3550960.00 Pledge of warehouse receipts

Investment Real Estate 5880839.21 Litigation Freeze

Fixed Assets 5822183.64 Litigation Freeze

In total 15469840.61 ——

Note: Restricted amounts of 215857.76yuan existed at the end of the period. Of which

166353.66yuan was released from freeze before the reporting date.

59. Monetary Items of Foreign Currency

(1) Monetary Items of Foreign Currency

Balance of Foreign Balance of

Exchange Rate

Items Currency at End of Converting to RMB at

Convert

Period End of Period

Monetary fund 3614784.76 6.3757 23046783.19

Including: US Dollars 3614784.76 6.3757 23046783.19

Accounts receivable 93368.00 6.3757 595286.36

Including: US Dollars 93368.00 6.3757 595286.36

Short-term borrowing 125857140.16 6.3757 802427368.52

Including: US Dollars 125857140.16 6.3757 802427368.52

(2) Instruction of Operational Entity Overseas

The registrant and operating unit of the Company is Beijing Grain (Singapore)

International Trade Co. Ltd. with main business place of Singapore and recording currency

of US Dollars.

60. Hedging items and related hedging instruments

Please refer to 22. Derivative financial liability under Section VI of the Notes.

61. Government Subsidies

（1）Basic conditions of government grantsAmount recorded in

Type Amount Presentation item

profit and loss

VAT refunds 8435960.05 Other income 8435960.05

Special subsidy funds for Deferred income 1277504.16

infrastructure support fees 63130000.00

Special subsidy for infrastructure 18176788.00 Deferred income 908692.09

input

Special subsidy for production line 4500000.00 Deferred income 450000.00

technical reform

Subsidy for job stabilization 401368.35 Other income 401368.35

Compensation for demolition and 7695276.34 Deferred income 384763.82

relocation

Subsidy for Work-in-Training 347900.00 Other income 347900.00

Tianjin Lingang Grain and Oil 4000000.00 Deferred income 222222.24

Processing Warehouse and Logistics

Project of Beijing Grain Group

Provincial grain reserve information 633746.30 Deferred income 200686.32

management system construction

Job Stabilization Subsidy 180870.53 Other income 180870.53

Gas boiler low-NOx transformation 160000.00 Other income 160000.00

subsidy

Subsidy for the operation of the 133165.00 Other income 133165.00

home for the disabled

Compensation for demolition and 119121.00 Non-operating 119121.00

relocation income

Subsidies for disabled persons' jobs 118177.13 Other income 118177.13

Industrial enterprise incentive funds 100000.00 Other income 100000.00

Financial boiler low-NOx subsidy 80000.00 Other income 80000.00

Green cleaning and oil tank electric 855179.48 Deferred income 79960.12

heating

Oil and fat enzymatic moderate 1089743.60 Deferred income 77838.84

refining sets of equipment

Training subsidies 65500.00 Other income 65500.00

Policy cashing incentive funds 55100.00 Non-operating 55100.00

income

Tax benefits for retired soldiers (VAT 45000.00 Other income 45000.00

benefits)

Smart manufacturing special funds 40000.00 Other income 40000.00

incentives (green factory)

Emergency turnover food subsidies 30000.00 Other income 30000.00Amount recorded in

Type Amount Presentation item

profit and loss

Unemployment insurance rebate 23705.60 Other income 23705.60

2020 Foreign Economic and Trade 23600.00 Other income 23600.00

Project Subsidy

Others 14950.00 Other income 14950.00

In total 110455151.38 13976085.25

VII. Change in Consolidation Scope

The Company invested jointly with Sinograin Oils Corporation to establish

Jingliang (Yueyang) Grain and Oil Industry Co. Ltd with a shareholding of 65%. The

subsidiary is in the stage of preparation for opening and has not yet completed the paid-in

capital. The above-mentioned entity was included in the scope of consolidation during the

reporting period.VIII. Equities in Other Entities

1. Equities in Subsidiaries

(1) Composition of the Company

Shareholding Voting

Principle

Name of Registered Nature of Ratio (%) rights Mode of

Place of

Subsidiary Place Business ratio Acquisition

Business Direct Indirect

(%)

Beijing Merger under

Investment

Jingliang Food Beijing Beijing 100 100 the same

management

Co. Ltd. control

Jingliang

Agricultural

(Tianjin) Grain Merger under

Product and

and Oil Tianjin Tianjin 70 70 the same

By Product

Industry Co. control

Processing

Ltd.Beijing

Merger under

Jingliang Oil Grain and oil

Beijing Beijing 100.00 100.00 the same

and Fat Co. trade

control

Ltd.Jingliang Agricultural

Merger under

(Hebei) Oil Product and

Hebei Hebei 51.00 51.00 the same

Industry Co. By Product

control

Ltd. Processing

Beijing Merger under

Grain and oil

Guchuan Edible Beijing Beijing 100.00 100.00 the same

trade

Oil Co. Ltd. controlAgricultural

Beijing Merger under

Product and

Eisen-Lubao Beijing Beijing 100.00 100.00 the same

By Product

Oil Co. Ltd. control

Processing

Beijing

Merger under

Tianweikang

Beijing Beijing Warehousing 100.00 100.00 the same

Oil Distribution

control

Center Co. Ltd.Beijing Merger under

Food

Guchuan Bread Beijing Beijing 100.00 100.00 the same

Processing

Food Co. Ltd. control

Zhejiang Xiao Combination

Food

Wang Zi Food Hangzhou Hangzhou 17.6794 77.2072 94.8866 not under

Processing

Co. Ltd. same control

Hangzhou

Combination

Lin'an Food

Hangzhou Hangzhou 17.6794 77.2072 94.8866 not under

Xiaotianshi Processing

same control

Food Co. Ltd.Liaoning Xiao Combination

Food

Wang Zi Food Liaoning Liaoning 17.6794 77.2072 94.8866 not under

Processing

Co. Ltd. same control

Linqing Xiao Combination

Food

Wang Zi Food Linqing Linqing 17.6794 77.2072 94.8866 not under

Processing

Co. Ltd. same control

Lin'an

Chunmanyuan Combination

Food

Agricultural Hangzhou Hangzhou 17.6794 77.2072 94.8866 not under

Processing

Development same control

Co. Ltd.Jingliang

(Singapore) Establishment

Singapore Singapore Grain trade 100.00 100.00

International by investment

Trade Co. Ltd.Jingliang Rural

Complex

Construction Land Establishment

Xinyi Xinyi 51.00 51.00

and Operations remediation by investment

(Xinyi) Co.Ltd.Jingliang

(Caofeidian)

Establishment

Agricultural Tangshan Tangshan Plantation 51.00 51.00

by investment

Development

Co. Ltd.Beijing

jingliang gubi Grain and oil Establishment

Beijing Beijing 100 100

oil and grease trade by investment

co. LTD

Jingliang

(Yueyang)

Agricultural Establishment

Grain and Oil Hunan Hunan 65.00 65.00

products by investment

Industry Co.Ltd.

(2) Major non-wholly-owned subsidiaries

Profit And Dividends

Balance of

Shareholding Voting rights Loss Distributed to

Minority

Ratio of ratio of Attributable to Minority

Name of Shareholder's

Minority Minority Minority Shareholders

Subsidiary Equity at the

Shareholders Shareholders Shareholders for the

End of the

(%) (%) for the Current Current

Period

Period Period

Zhejiang Xiao

Wang Zi

5.11345.113415155396.931704626.8948469370.18

Food Co.Ltd.Jingliang

(Tianjin)

Grain and Oil 30 30 18060680.13 265260839.72

Industry Co.Ltd.Jingliang

(Hebei) Oil

49491756853.442009000.0037180745.87

Industry Co.Ltd.Jingliang

(Caofeidian)

Agricultural 49 49 1162543.53 25196306.01

Development

Co. Ltd.

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

Ending balance or Amount incurred in the current period

Jingliang

Jingliang Jingliang

Items Zhejiang Xiao (Caofeidian) (Tianjin) Grain (Hebei) Oil

Wang Zi Food Agricultural

and Oil Industry Industry Co.Co. Ltd. Development

Co. Ltd. Ltd.Co. Ltd.Current Assets 545563045.64 1393747379.61 272382537.61 63924854.13Ending balance or Amount incurred in the current period

Jingliang

Jingliang Jingliang

Items Zhejiang Xiao (Caofeidian) (Tianjin) Grain (Hebei) Oil

Wang Zi Food Agricultural

and Oil Industry Industry Co.Co. Ltd. Development

Co. Ltd. Ltd.Co. Ltd.Non-current

496391615.83782065202.6981817706.52677625.84

Assets

Total Assets 1041954661.47 2175812582.30 354200244.13 64602479.97

Current

158579977.511235715663.77274199358.637710550.95

Liabilities

Non-current

18912566.9551395336.36511739.20

Liabilities

Total Liabilities 177492544.46 1287111000.13 274711097.83 7710550.95

Operating 827007026.15 4636677763.70 399581771.45 18556537.62

Income

Net Profit (Loss) 106691266.57 87588683.12 6610073.09 5470896.35

Total 106691266.57 87588683.12 6610073.09 5470896.35

Comprehensive

Income

Cash Flow from 116629645.06 724136543.87 108028487.75 -3617581.51

Operating

Activities

(Continued)

Beginning balance or Amount incurred in the prior period

Jingliang

Zhejiang Jingliang Jingliang

Items (Caofeidian) Xiao Wang Zi (Tianjin) Grain (Hebei) Oil

Agricultural

Food Co. and Oil Industry Industry Co.Development Co.Ltd. Co. Ltd. Ltd.Ltd.Current Assets 348212958.32 1451014894.50 355193589.41 65278291.00

Non-current

636041329.78784620786.8083905315.98375361.52

Assets

Total Assets 984254288.10 2235635681.30 439098905.39 65653652.52

Current

140227047.421283603409.67361352282.6514232619.85

Liabilities

Non-current

20656022.8667829472.581867549.53

Liabilities

Total Liabilities 160883070.28 1351432882.25 363219832.18 14232619.85

Operating Income 817382788.30 3947727557.55 353156192.23 37886609.79Beginning balance or Amount incurred in the prior period

Jingliang

Zhejiang Jingliang Jingliang

Items (Caofeidian) Xiao Wang Zi (Tianjin) Grain (Hebei) Oil

Agricultural

Food Co. and Oil Industry Industry Co.Development Co.Ltd. Co. Ltd. Ltd.Ltd.Net Profit (Loss) 131200734.73 60202267.11 3585415.19 2372537.81

Total

Comprehensive 131200734.73 60202267.11 3585415.19 2372537.81

Income

Cash Flow from

Operating 26043033.24 -504494426.93 -16169538.34 -5128929.53

Activities

2. Equity in Joint Ventures or Affiliates

1. Important Joint Ventures or Affiliates

Shareholding Accounting

Ratio (%) Treatment

Name of Joint Principle

Registered Nature of Methods for

Venture or Place of

Place Business Investment in Joint

Affiliate Business Direct Indirect Ventures or

Affiliates

One Joint Ventures

1. Beijing

Zhengda Feed Co. Beijing Beijing Manufacturer 50.00 Equity method

Ltd.Two Affiliates

1. SINOGRAIN

Transportation

(Tianjin)

Tianjin Tianjin and 30.00 Equity method

Warehousing

warehousing

Logistics Co. Ltd.

2. Jingliang

Missme Catering

Beijing Beijing Manufacturer 48.00 Equity method

Management

(Beijing) Co. Ltd.

2. Important financial information on major joint ventures

Ending Balance/Current Beginning Balance/Last

Amount Term Amount

Item

Beijing Zhengda Feed Beijing Zhengda Feed Co.Co. Ltd. Ltd.Current assets 259094822.42 228921574.13Ending Balance/Current Beginning Balance/Last

Amount Term Amount

Item

Beijing Zhengda Feed Beijing Zhengda Feed Co.Co. Ltd. Ltd.Including: cash and cash equivalents 30509860.94 95186696.60

Non-current assets 24949630.10 25478642.09

Total assets 284044452.52 254400216.22

Current liabilities 59463197.04 73979867.51

Non-current liabilities 5112214.50 4076166.52

Total liabilities 64575411.54 78056034.03

Minority shareholder's equity

Shareholders' equity attributable to the 219469040.98 176344182.19

parent company

Share of net assets based on 109734520.49 88172091.10

shareholding ratio

Adjustments 2652807.39

-- Goodwill

-- Unrealized profits from internal

transactions

-- Other 2652807.39

Book value of equity investment in joint 109734520.49 90824898.49

ventures

Fair value of equity investment in joint

ventures with open offers

Operating income 369615151.09 336626475.66

Financial costs -5587491.34 -3211106.78

Income tax expense 14082117.12 11205730.33

Net profit 43173099.79 36873259.85

Net profit from discontinued operations

Other comprehensive income -211261.00 -163020.00

Total comprehensive income 42961838.79 36710239.85

Dividends received from joint ventures

in the current period

3. Important financial information on major affiliates

Ending Balance/Current Beginning Balance/Last Term

Amount Amount

Item SINOGRAIN (Tianjin) SINOGRAIN (Tianjin)

Warehousing Logistics Co. Warehousing Logistics Co.Ltd. Ltd.Ending Balance/Current Beginning Balance/Last Term

Amount Amount

Item SINOGRAIN (Tianjin) SINOGRAIN (Tianjin)

Warehousing Logistics Co. Warehousing Logistics Co.Ltd. Ltd.Current assets 104812139.17 87560108.46

Non-current assets 555196631.04 407888087.68

Total assets 660008770.21 495448196.14

Current liabilities 32099278.71 24167311.59

Non-current liabilities 250581609.08 72609829.76

Total liabilities 282680887.79 96777141.35

Minority shareholder's equity

Shareholders' equity 377327882.42 398671054.79

attributable to the parent

company

Share of net assets based on 113198364.73 119601316.43

shareholding ratio

Adjustments

-- Goodwill

-- Unrealized profits from

internal transactions

-- Others

Book value of equity 113198364.73 119601316.43

investment in affiliates

Fair value of equity investment

in affiliates with open offers

Operating income 52065840.85 36413675.87

Net profit 7936827.63 6549552.18

Net profit from discontinued

operations

Other comprehensive income

Total comprehensive income 7936827.63 6549552.18

Dividends received from 24680000.00

affiliates in the current period

IX. Risks Related to Financial Instruments

The Company's principal financial instruments include equity investment creditors'

investment borrowing accounts receivable accounts payable etc. The primary purpose of

these financial instruments is to finance the operations of the Company.The Company has a

variety of other financial assets and liabilities 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 and market risk.

1. Classification of financial instruments

(1) Book value of various financial assets on the balance sheet date

A. December 31 2021

Financial assets

Financial assets

Financial measured at fair

measured at fair value

Financial asset assets value and the

and the changes Total

items measured at changes recorded

recorded in other

amortized cost in current profits

comprehensive income

and losses

Monetary funds 507144668.45 507144668.45

Transactional 40377048.08 40377048.08

financial assets

Derivative

financial assets

Notes

receivables

Accounts 82694094.62 82694094.62

receivables

Other 284756636.27 284756636.27

receivables

Investment in

other equity

instruments 20000000.00 20000000.00

Current portion 156139100.00 156139100.00

of non-current

assets

Other current 742800000.00 62577325.41 805377325.41

assets

Other 189741996.74 189741996.74

non-current

assets

B. December 31 2020

Financial assets

Financial assets

Financial measured at fair

measured at fair value

Financial asset assets value and the

and the changes Total

items measured at changes recorded

recorded in other

amortized cost in current profits

comprehensive income

and losses

Monetary funds 335466169.61 335466169.61

Transactional 63478071.73 63478071.73

financial assetsFinancial assets

Financial assets

Financial measured at fair

measured at fair value

Financial asset assets value and the

and the changes Total

items measured at changes recorded

recorded in other

amortized cost in current profits

comprehensive income

and losses

Derivative

financial assets

Notes 456565.85 456565.85

receivables

Accounts 92245667.60 92245667.60

receivables

Other 541905656.97 541905656.97

receivables

Investment in 20000000.00 20000000.00

other equity

instruments

Other 319739581.67 319739581.67

non-current

assets

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

A. December 31 2021

Financial liabilities

measured at fair value and Other financial

Financial liability items Total

changes included in current liability

profits and losses

Short term loans 1521669601.35 1521669601.35

Derivative financial 70305871.37 70305871.37

liability

Accounts payable 186748746.42 186748746.42

Other Payables 73985586.39 73985586.39

B. December 31 2020

Financial liabilities

measured at fair value and Other financial

Financial liability items Total

changes included in current liability

profits and losses

Short term loans 1497414079.05 1497414079.05

Derivative financial 371219136.84 371219136.84

liability

Accounts payable 75384075.39 75384075.39

Other Payables 72292881.24 72292881.24

2. Credit RiskOn December 31 2021 the largest credit risk exposure that may cause financial loss

to the Company mainly comes from the loss on financial assets of the Company due to the

failure of the other party to perform its obligations including:

Book value of financial assets recognized in the consolidated balance sheet; for a

financial instrument measured at fair value its book value reflects its risk exposure instead

of their biggest risk exposure and its 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 sets corresponding credit periods based on customer’s financial position

possibility of obtaining guarantees from third parties credit records and other factors such

as current market conditions and other credit qualifications for customer assessment and

implements other monitoring procedures to ensure that necessary measures are taken to

recover overdue credits. In addition the Company reviews the collection of individual

account receivables on each balance sheet date in order to make sufficient provision for bad

debts for collectable amounts. Therefore the Company's management believes that the

Company's credit risk has been greatly reduced.The liquidity funds of the Company are deposited in banks with high credit rating so

the credit risk of liquidity funds is low.

3. Liquidity Risk

When managing liquidity risk the Company keeps and monitors adequate cash and

cash equivalents approved by its management in order to meet the Company's business

needs and reduce the influences of cash flow fluctuations. The Company's management

monitors the use of bank loans and ensures the performance of loan agreements.Maturity analysis of financial liabilities in terms of undiscounted contractual cash

flows:

December 31 2021

Item Above Five

Within One Year 1 To 5 Years Total

Years

Short term loans 1521669601.35 1521669601.35

Derivative financial 70305871.37 70305871.37

liability

Accounts payable 185082028.27 1666718.15 186748746.42

Other Payables 73985586.39 73985586.39

(Continued)

December 31 2020

Item Above Five

Within One Year 1 To 5 Years Total

Years

Short term loans 1497414079.05 1497414079.05

Derivative financial 371219136.84 371219136.84

liability

Accounts payable 72075894.39 3308181.00 75384075.39

72292881.24

Other Payables

72292881.244. Market risk

Market risk refers to the risk that the fair value or future cash flow of financial

instruments will fluctuate due to the change of market price. Market risk mainly includes

interest rate risk foreign exchange 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 floating interest rates bring the Company the interest rate risk on cash flow while the

financial liabilities at fixed interest rates bring the Company the interest rate risk on fair

value. The Company decides the relative proportion of fixed interest rate contracts and

floating interest rate contracts according to the current market environment.As of December 31 2021 the Company's interest-bearing liabilities under floating

rate contracts denominated in RMB amounted to RMB 170000000.00 and those under

fixed rate contracts denominated in RMB amounted to RMB 1351669601.35.

(2) Exchange Rate Risk

The Company's exposure to foreign exchange risks is primarily related to the

Company's operating activities (when revenues and expenditures are settled in foreign

currencies other than the Company's accounting standard currency) and its net investments

in its overseas subsidiaries.The Company's exposure to foreign exchange risks is mainly related to US dollars.Except that some of the Company's subsidiaries purchase and sell in US dollars other

major business activities of the Company are priced and settled in RMB.As at December 31 2021 the Company's assets and liabilities are in RMB except the

assets or liabilities described in the table below are in US dollars.The foreign exchange risks arising from the assets and liabilities of such foreign

currency balances may have an impact on the Company's operating results.Items Ending Balance Beginning Balance

Monetary funds 23046783.19 5056624.13

Accounts receivable 1044832.24

Short-term borrowing 802427368.52

Accounts payable 595286.36

Other Payables 381054.16

Note: The Company pays close attention to the impact of exchange rate fluctuations

on the Company.The company adopts sensitivity analysis technology to analyze the possible impact of

reasonable and possible changes of risk variables on current profit and loss or owner's

equity. As any risk variable rarely changes in isolation and the correlation between

variables will have a significant effect on the final impact amount of a risk variable change

the following content is carried out under the assumption that the change of each variable is

independent.On the assumption that foreign currency assets and foreign currency liabilities remain

relatively stable and other variables remain unchanged the after-tax impact of possiblereasonable changes in exchange rate on current profits and losses and rights and interests is

as follows:

Current period

Item [US dollar] Gross profit/net Increase/(decrease) in

Exchange rate profit increase

shareholders' equity

Increase /(decrease) /(decrease)

The yuan

depreciated against 5% -38998793.58 -38998793.58

the US dollar

The yuan

appreciated against -5% 38998793.58 38998793.58

the US dollar

Prior period

Item [US dollar] Gross profit/net Increase/(decrease) in

Exchange rate profit increase

shareholders' equity

Increase / (decrease) /(decrease)

The yuan

depreciated against 5% 286020.11 286020.11

the US dollar

The yuan

appreciated against -5% -286020.11 -286020.11

the US dollar

X. Disclosure of Fair Values

1. Fair values of assets and liabilities measured at fair value at the end of the

period

Fair Values at the End of the Period

Item First Level Fair Second Level Third Level

Value Fair Value Fair Value Total

Measurement Measurement Measurement

One. Continuous fair

value measurement

Ⅰ. Transactional financial

40377048.0840377048.08

assets

1. Financial assets that

are measured at fair value

and whose changes are 40377048.08 40377048.08

included in the current

profits and losses

(1) Investment in debt

40377048.0840377048.08

instruments

(2) Investment in equity

instrumentsFair Values at the End of the Period

Item First Level Fair Second Level Third Level

Value Fair Value Fair Value Total

Measurement Measurement Measurement

(3) Derivative financial

assets

2. Financial assets

designated as fair value

through profit or loss

(1) Investment in debt

instruments

(2) Investment in equity

instruments

(3) Others

Ⅱ. Other debt investment

Ⅲ. Investment in other

20000000.0020000000.00

equity instruments

Total assets

continuously measured 40377048.08 20000000.00 60377048.08

at fair value

Ⅵ.Transactional financial

70305871.3770305871.37

liabilities

1. Financial liabilities

measured at fair value

70305871.3770305871.37

with changes included in

current profits and losses

Including: transactional

bonds issued

derivative financial

70305871.3770305871.37

liability

others

2. Financial liabilities

designated as fair value

through profit or loss

Total liabilities

continuously measured 70305871.37 70305871.37

at fair value

2. Basis for determining market prices of continuous and non-continuous first

level fair value measurement items

The Company makes offers for first level fair value measurement according to open

contracts of the futures 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 valuation techniques and qualitative and quantitative information of important

parameters

The company‘s investment in other equity instruments of the third level fair valuemeasurement project is the ”three noes“ equity investment that without control jointcontrol and significant influence held by the company. On the basis of analyzing the

operation status of the invested enterprise and combining with relevant situations the

company takes the investment cost as the fair value of other equity instrument 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 or more parties are controlled jointly controlled or significantly influenced by the

same party they constitute related parties.

2. Parent Company of the Company

Registered

Capital

Name of Parent Registered Legal Nature of

Company type (ten

Company Place representative Business

thousand

Yuan)

Wholly

Beijing Grain Wang Investment

state-owned Beijing 90000.00

Group Co. Ltd. Zhenzhong Management

enterprise

(Continued)

Proportion of Voting

Proportion of Shares

Power Held by Parent The ultimate controlling Organization

Held by Parent Company

Company in the Company party of the Company code

in the Company (%)

(%)

Beijing State-owned

39.68 39.68 Capital Operation and 683551038

Management Center

3. Subsidiaries of the Company

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

4. Joint Ventures and Affiliates of the Company

See 3. Equity in Joint Ventures or Affiliates under Section VIII of the Notes for details.

5. Other Related Parties

Name of Other Related Party Relationship with the Company

Beijing Ershang Wangzhihe Food Co. Ltd. Controlled by the ultimate controlling party

Feed branch of Beijing Sanyuan Seed Industry Technology Co. Ltd Controlled by the ultimate controlling party

Hebei shounong Modern Agricultural Technology Co. Ltd Controlled by the ultimate controlling partyName of Other Related Party Relationship with the Company

Beijing Shounong Consumption Assistance Innovation and

Controlled by the ultimate controlling party

Entrepreneurship Center Co. Ltd.Beijing Guchun Food Co. Ltd Controlled by the ultimate controlling party

Hebei Luanping Huadu Food Co. Ltd Controlled by the ultimate controlling party

Beijing Er Shang palace Yifu Food Co. Ltd Controlled by the ultimate controlling party

Beijing Jingliang Dongfang grain and Oil Trading Co. Ltd Controlled by the ultimate controlling party

Huairou Brewery of Beijing Liubiju Food Co. Controlled by the ultimate controlling party

Beijing food supply office No.34 supply department Co. Ltd Controlled by the ultimate controlling party

Beijing Haidian Xijiao grain and oil supply station Co. Ltd Controlled by the ultimate controlling party

Beijing shounong Supply Chain Management Co. Ltd Controlled by the ultimate controlling party

Beijing Zhujun grain and oil supply Co. Ltd Controlled by the ultimate controlling party

Beijing Children soldiers grain and oil supply Co. Ltd Controlled by the ultimate controlling party

Beijing Wuhuan Shuntong Supply Chain Management Co. Ltd Controlled by the ultimate controlling party

Beijing Guchun rice Co. Ltd Controlled by the ultimate controlling party

Beijing baijiayi Food Co. Ltd Controlled by the ultimate controlling party

Beijing Sanyuan Food Co. Ltd Controlled by the ultimate controlling party

Beijing jinggrain e-commerce Co. Ltd Controlled by the ultimate controlling party

Beijing junchengyuan grain and oil purchase and Marketing Co. Ltd Controlled by the ultimate controlling party

Beijing Hongyuan Lijun grain and oil supply Co. Ltd Controlled by the ultimate controlling party

Beijing Dongfang Agricultural Group Supply Chain Management Co.Controlled by the ultimate controlling party

Ltd.Beijing maliandou special supply station Co. Ltd Controlled by the ultimate controlling party

Beijing Liangguan Grain and Oil Supply Co. Ltd. Controlled by the ultimate controlling party

Beijing Huadu Yukou Poultry Co. Ltd. Controlled by the ultimate controlling party

Shanghai shounong Investment Holding Co. Ltd Controlled by the ultimate controlling party

Shandong Fukuan Bioengineering Co. Ltd Controlled by the ultimate controlling party

Beijing Yueshengzhai Halal Food Co. Ltd Controlled by the ultimate controlling party

Da Hong Men Meat Food Co.ltd Beijing Er Shang Group Controlled by the ultimate controlling party

Beijing heiliu animal husbandry technology Co. Ltd Controlled by the ultimate controlling party

Beijing Capital Agriculture Group Controlled by the ultimate controlling party

Beijing Grain Group Co. Ltd Controlled by the ultimate controlling party

Beijing Academy of Food Science Controlled by the ultimate controlling party

Beijing jinggrain Dagu grain and Oil Trade Co. Ltd Controlled by the ultimate controlling party

Beijing Shounong Grain Reserve Co. Ltd. Controlled by the ultimate controlling party

Beijing Daxing National Food Reserve Co. Ltd Controlled by the ultimate controlling party

Beijing Shounong Development Co. Ltd. Controlled by the ultimate controlling partyName of Other Related Party Relationship with the Company

Beijing dahongmen grain storage Co. Ltd Controlled by the ultimate controlling party

Beijing Nanyuan vegetable oil factory Co. Ltd Controlled by the ultimate controlling party

Beijing Grain Group Head Company Controlled by the ultimate controlling party

Beijing shounong Xiangshan Conference Center Co. Ltd Controlled by the ultimate controlling party

Beijing shounong Food Group Finance Co. Ltd Controlled by the ultimate controlling party

Tianjin Juxiang Technology Co. Ltd. Controlled by the ultimate controlling party

6. Related-party Transactions

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

acceptance of labor services

(1) Purchase of goods or acceptance of labor services

Related-party Last Term

Related Party Current Amount

Transaction Amount

Shanghai Sunlon Investment

Purchase of goods 65000554.51

HOLDINGS Ltd.Beijing Guchun Food Co. Ltd Purchase of goods 17625723.68 13155894.06

Shandong Fukuan Bioengineering Co. Ltd Purchase of goods 780495.67 164147.79

Beijing Yueshengzhai Halal Food Co. Ltd Purchase of goods 562891.05 511156.63

Beijing Jingliang Dongfang grain and Oil

Purchase of goods 405452.28 524008.25

Trading Co. Ltd

Da Hong Men Meat Food Co.ltd

Purchase of goods 394945.43 403578.27

Beijing Er Shang Group

Beijing Sanyuan Food Co. Ltd Purchase of goods 280809.77 1400066.43

Beijing heiliu animal husbandry technology

Purchase of goods 203640.70 99883.20

Co. Ltd

Other related units Purchase of goods 306797.14 402640.52

Beijing Shounong Grain Reserve Co. Ltd. Storage fee 493822.64

Beijing shounong Food Group Co. Ltd Display and

600000.00

exhibition fees

(2) Sale of goods/ provision of labor services

Related-party Last Term

Related Party Current Amount

Transaction Amount

Shanghai shounong Investment Holding

Sale of goods 639999993.00

Co. Ltd

Beijing Ershang Wangzhihe Food Co.Sale of goods 62085307.44 71047922.42

Ltd.Feed branch of Beijing Sanyuan Seed

Sale of goods 47175363.45 31339925.94

Industry Technology Co. LtdRelated-party Last Term

Related Party Current Amount

Transaction Amount

Hebei shounong Modern Agricultural

Sale of goods 17038071.30 14233603.95

Technology Co. Ltd

Beijing Shounong Consumption Assistance

Innovation and Entrepreneurship Center Sale of goods 15515188.10 2916212.83

Co. Ltd.Beijing Guchun Food Co. Ltd Sale of goods 15317021.38 5605452.37

Hebei Luanping Huadu Foodstuff Co. Ltd. Sale of goods 9820008.43

Beijing Ershang Xijie Foodstuff Co.Sale of goods 9367917.44

Ltd.Beijing Jingliang Dongfang grain and Oil

Sale of goods 7259668.09 4114303.41

Trading Co. Ltd

Huairou Brewing Factory of Beijing Liubiju

Sale of goods 5207793.60 174678.90

Food Co. Ltd

Beijing food supply office No.34 supply

Sale of goods 4825987.13 3381064.38

department Co. Ltd

Beijing Haidian Xijiao grain and oil supply

Sale of goods 3014544.41 15886751.23

station Co. Ltd

Beijing shounong Supply Chain

Sale of goods 2427623.76 29226266.13

Management Co. Ltd

Beijing Zhujun grain and oil supply Co.Sale of goods 2406903.69 5097181.62

Ltd

Beijing Children soldiers grain and oil

Sale of goods 2219449.54 3366280.71

supply Co. Ltd

Beijing Wuhuan Shuntong Supply Chain

Sale of goods 1604476.13 2200674.09

Management Co. Ltd

Beijing Guchun rice Co. Ltd Sale of goods 1267478.96 803839.21

Beijing baijiayi Food Co. Ltd Sale of goods 1172768.81 478710.09

Beijing Sanyuan Food Co. Ltd Sale of goods 747433.70 470695.16

Beijing Jingliang e-commerce Co. Ltd Sale of goods 682187.95 711015.24

Beijing junchengyuan grain and oil

Sale of goods 618123.86 1986543.12

purchase and Marketing Co. Ltd

Beijing Hongyuan Lijun grain and oil

Sale of goods 492201.84 735871.56

supply Co. Ltd

Beijing maliandou special supply station

Sale of goods 70642.20 2757335.78

Co. Ltd

Beijing Liangguan Grain and Oil Supply

Sale of goods 11559.64 2706388.99

Co. Ltd.Beijing huaduyukou poultry Co. Ltd Sale of goods 1539631.42Related-party Last Term

Related Party Current Amount

Transaction Amount

Other-related units Sale of goods 2215034.03 3008834.25

Shanghai Sunlon Investment Holding Co. Provision of

12533333.6323867.92

Ltd services

Beijing Capital Agriculture Group Co. Ltd Provision of

599999.98799999.97

services

Beijing Guchuan Food Co. Ltd Provision of

23691.3298481.29

services

Beijing Grain Group Co. Ltd Provision of

574150.93

services

Beijing Academy of Food Science Provision of

141633.74

services

Beijing jinggrain Dagu grain and Oil Trade Provision of

245377.35

Co. Ltd services

Related-party transactions for purchasing and saling goods and provision and

acceptance of labor services: The price of a related-party transaction shall be equal to the

price charged for a unrelated-party transaction that is same as or similar to such

related-party transaction.B. Related-party lease

(1) If the Company is the lessor

Pricing Lease Income Lease Income

Lease

Name of Type of Lease basis of Recognized in Recognized in

termination

Lessee Leased Asset start date rental the Current the Prior

date

income Period Period

Beijing

January 1 December Market

Guchuan Food House leasing 13333333.30

2020 312020 price

Co. Ltd.Beijing

Jingliang Warehouse January 1 December Market

664311.28

E-commerce leasing 2020 312020 price

Co. Ltd.Beijing

Jingliang Vehicle January December Market

11265.1322530.26

E-commerce leasing 1 2021 312021 price

Co. Ltd

Total -- -- -- -- 11265.13 14020174.84

(2)If the Company is the lessee

Lease Expense

Pricing basis of Lease Expense Recognized

Name of Lessee Type of Leased Asset Recognized in the Prior

rleasing fee in the Current Period

PeriodLease Expense

Pricing basis of Lease Expense Recognized

Name of Lessee Type of Leased Asset Recognized in the Prior

rleasing fee in the Current Period

Period

Beijing Daxing National

Grain Purchasing & House leasing Market price 1935963.30 2110200.00

Storage Warehouse

Beijing Shounong

House leasing Market price 1803247.58 1297946.86

Development Co. Ltd.Beijing Dahongmen

House leasing Market price 623474.62

Foodstuff Storage

Beijing Grain Group Co.House leasing Market price 555229.36 1075575.22

Ltd.Beijing Nanyuan Plant Oil

House leasing Market price 311926.61

Factory

Beijing Grain Group Head

House leasing Market price 33027.52

Company

Total -- -- 5262868.99 4483722.08

3. Other Related-party Transactions

Related-party Last Term

Guaranteed Party Current Amount

Transaction Amount

Beijing Dahongmen Heating fee cleaning

177183.6060359.34

Foodstuff Storage fee electricity fee

Beijing Shounong

Utilities property fees 98847.10 52527.02

Development Co. Ltd.Beijing Haidian Xiangshan

Conference service fees 20654.60

Rest House

Beijing Shounong Food 1589080.65

Interest income 396546.91

Group Finance Co. Ltd.Beijing Guchuan Food C

o. Ltd. Brand royalty 2561865.51

2959185.29

Beijing Guchuan Rice Co.Brand royalty 186540.99 192513.09

Ltd.Beijing Jingliang Dongfang

Grain and Oil Trading Co. Brand royalty 2230.47 3874.42

Ltd.Tianjin Juxiang Technology

Technical Service Fee 1582.20

Co. Ltd.

(3)Remuneration for key management staff

Current Amount (Unit: ten Last Term Amount (Unit: ten

Item

thousand yuan) thousand yuan)Remuneration for Key

624.05528.28

Management Staff

7. Related-party Receivables and Payables

(1) Receivables

Ending Balance Beginning Balance

Item Related-party Book Provision Book Provision

Balance for Bad Balance for Bad

Debts Debts

Monetary Beijing shounong Food

167000000.00158585719.53

funds Group Finance Co. Ltd

Feed Branch of Beijing

Receivables Sanyuan Seed Technology 3000236.98 1544618.10

Co. Ltd.Beijing Shounong

Consumption Assistance

Innovation and 1359375.00 3178672.00

Entrepreneurship Center Co.Ltd.Beijing Guchun Food Co.

1260000.00330872.00

Ltd

Shanghai Sunlon Investment

1002945.54

HOLDINGS Ltd.Beijing Ershang Xijie

621830.00

Foodstuff Co. Ltd.Beijing Jingliang Dongfang

grain and Oil Trading Co. 584491.00 914231.75

Ltd

Hebei Shounong Modern

Agricultural Technology Co. 369525.30 1473919.32

Ltd.Beijing Zhujun grain and oil

261500.001598080.00

supply Co. Ltd

Beijing baijiayi Food Co.

196800.0023100.00

Ltd

Beijing Dongfang

Agricultural Group Supply 161106.00

Chain Management Co. Ltd.Beijing Guchun rice Co. Ltd 72688.00

Beijing Junyuan grain and

oil purchasing and 43000.00 1009912.00

Marketing Co. LtdEnding Balance Beginning Balance

Item Related-party Book Provision Book Provision

Balance for Bad Balance for Bad

Debts Debts

Beijing Ershang Yihe

Sunshine Real Estate Co. 15520.00

Ltd.Beijing Ershang Wangzhihe

8584555.70

Food Co. Ltd.Beijing shounong Supply

1965569.85

Chain Management Co. Ltd

Beijing Haidian Xijiao grain

and oil supply station Co. 1420904.00

Ltd

Beijing Liangguan grain and

672100.00

oil supply Co. Ltd

Beijing Wuhuan Shuntong

Supply Chain Management 147000.00

Co. Ltd

Beijing food supply

department No.34 supply 83260.00

department Co. Ltd

Beijing Jingliang

56600.00

e-commerce Co. Ltd

Beijing zidibing grain and oil

29106.00

supply Co. Ltd

Beijing shounong Xiangshan

5250.00

Conference Center Co. Ltd

(2) Payables

Item Related-party Ending Balance Beginning balance

Contract Shanghai Sunlon Investment

3943587.12

liability HOLDINGS Ltd.Payables Beijing Guchun Food Co. Ltd 358762.54 293871.55

Beijing Er Shang Mo Qi Zhong

382.30

Hong Foods Co. Ltd.Beijing Jingliang Dongfang grain

294.5120674.03

and Oil Trading Co. Ltd

Beijing Sunnyum Foods Co.

31.19

Ltd.Beijing Sanyuan Food Co. Ltd 13677.70Beijing Yueshengzhai Islamic

1922.50

Food Co. Ltd.Beijing Changyang farm Co. Ltd 1470.00

Beijing Grain Group Co.Other payables 2819620.39 1712270.30

Ltd.Shanghai Sunlon Investment

2591003.45

HOLDINGS Ltd.Beijing Nanyuan vegetable oil

311926.61

factory Co. Ltd

Beijing Jingliang e-commerce

118809.60

Co. Ltd

8. Related-party Commitments

The Company has no related-party commitments this year.XII. Share based payment

There are no share based payments incurred this year for the company.XIII. Commitments and Contingencies

The company's subsidiary Beijing Whether the

Amount Actual guarantee

Jingliang Food Co. Ltd. as the guarantor Effective Date Due Date Guarantee Has

Guaranteed amount

is as follows:Guaranteed Party Been Fulfilled

Beijing Tianweikang Oil Marketing 12207000 Effective from the date of deliberation and approval of the 2020

36000000.00 2021.1.20 No

Center Co. Ltd. 0.00 general meeting of shareholders for a period of one year

From the date of signing the agreement on designated delivery

Jingliang (Tianjin) Grain and Oil 30000000 warehouse (designated warehouse) of Dalian Commodity Exchange to

2020.4.17 No

Industry Co. Ltd. 0.00 two years after the termination of the agreement on designated delivery

warehouse (designated warehouse) of Dalian Commodity Exchange.From the date of signing the agreement on designated delivery

Jingliang (Tianjin) Grain and Oil 20000000 warehouse (designated warehouse) of Dalian Commodity Exchange to

2021.9.2 No

Industry Co. Ltd. 0.00 two years after the termination of the agreement on designated delivery

warehouse (designated warehouse) of Dalian Commodity Exchange.

22715000

Beijing Jingliang Oil and Fat Co. Ltd. 2021.11.16 2 years after the maturity of the debt as agreed in the main contract No

0.00

Effective from the date of deliberation and approval of the general

40000000

Beijing Jingliang Oil and Fat Co. Ltd. 4540646.03 2021.6.18 meeting of shareholders in 2020 to the date of convening the general No

0.00

meeting of shareholders in 2021

From the date of drawing or actual occurrence of the first financing

18850000 under the financing letter to two years after the maturity date of the

Beijing Jingliang Oil and Fat Co. Ltd. 3264400.00 2021.6.18 No

0.00 latest one of all the financing provided by the bank during the

occurrence of the guaranteed debt under the financing letter.Jingliang (Singapore) International 43680000

305545510.00 2021.5.17 From March 2 2021 to March 2 2026 No

Trade Co. Ltd. 0.00Effective from the date of deliberation and approval of the general

Jingliang (Singapore) International 37000000

265942308.35 2021.6.18 meeting of shareholders in 2020 to the date of convening the general No

Trade Co. Ltd. 0.00

meeting of shareholders in 2021XIV. Events after the Balance Sheet Date

1. Distribution of Profits

As of the financial report date of the company the 24th meeting of the ninth board of directors in

2022 approved that no profit distribution will be conducted in 2021 which still needs to be approved

by the general meeting of shareholders.XV. Other Important Matters

1. Annuity Plan

Basic information of annuity: Beijing Jingliang Food Co. Ltd. Beijing Guchun Oil Co. Ltd.Beijing Eisen Lubao Oil Co. Ltd. Beijing Jingliang Oil Co. Ltd. and Beijing Guchun Bread Food

Co. Ltd. of the company participated in the enterprise annuity plan of Beijing shounong Food

Group Co. Ltd. and formulated the implementation rules of their respective enterprises under the

annuity plan. The name of the annuity plan is Ping An Jinxiu life enterprise annuity plan; the trustee

and account manager are ping an Endowment Insurance Co. Ltd.; the trustee is China CITIC Bank

Co. Ltd.

2. Information of Divisions

(1) Basis of determination and accounting policies for reporting of divisions

The Company's businesses consist of food processing oil and grease and so on according to its

internal organizational structure management requirements and internal reporting system. The

Company's management regularly evaluates the operating results of these divisions to determine the

allocation of resources to them and evaluate their performance. The information reported by

divisions should be disclosed according to the accounting policies and measurement standards

adopted by such divisions when they are reporting to the management. These measurement bases

should be consistent with the 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

923407034.8413532624216.9919147598.18-2712085014.4511763093835.56

income

Operating costs 695212963.09 13019942435.75 9047615.76 -2687048545.10 11037154469.50

Operating profit 143511101.12 329147752.65 456538047.78 -615303028.14 313893873.41

Net profit

attributable to 111657924.43 283588240.34 453536391.13 -644323098.16 204459457.74

parent company

Total assets 1129395611.60 8120235309.43 2927459631.31 -6130490493.44 6046600058.90

Total liabilities 181357027.44 4760321999.97 42492656.55 -2249725417.61 2734446266.35

3. Lease

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

Interest expense 158835.45

Short-term lease payments charged to current profit

5686616.63

or loss

Lease costs for low-value assets recognized in

current profit or lossItem Amount

Variable lease payments not included in the

measurement of lease liabilities

Income from sublease of right-to-use assets

Total cash outflows related to leases 5737518.73

Gains and losses related to sale and leaseback

transactions

XVI. Notes to Main Financial Statement Items of Parent Company

1. Accounts Receivable

（1）Disclosed according to aging

Aging Ending Balance

Within 1 Year (including 1 year)

Among them: Within credit period (within 3

months)

Credit period to 1 year

1 to 2 years (including 2 years)

2 to 3 years (including 3 years)

3 to 4 years (including 4 years)

4 to 5 years (including 5 years) 3000.00

More than 5 years 105000.00

Sub-total 108000.00

Less: Allowance for bad debts 107400.00

Total 600.00

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

Ending Balance

Book Balance Bad Debt Provision

Type(s)

Provision Book Value

Amount Ratio(%) Amount

Ratio(%)

Separate provision for bad

debts

Portfolio provision for bad

108000.00100.00107400.0099.44600.00

debts

Among them: Portfolio 1 108000.00 100.00 107400.00 99.44 600.00

Total 108000.00 -- 107400.00 -- 600.00

（Continued）

Beginning Balance

Type(s)

Book Balance Bad Debt Provision Book ValueProvision

Amount Ratio(%) Amount

Ratio(%)

Separate provision for bad

debts

Portfolio provision for bad

126420.00100.00114636.0090.6811784.00

debts

Among them: Portfolio 1 126420.00 100.00 114636.00 90.68 11784.00

Total 126420.00 -- 114636.00 -- 11784.00

Portfolio provision for bad debts:

Portfolio provision item: aging portfolio

Ending Balance Beginning Balance

Name Accounts Bad Debt Provision Accounts Bad Debt Provision

receivable Provision Ratio receivable Provision Ratio

Within 1 Year

(including 1 year)

Among them: Within

the credit period

(within 3 months)

Credit period to 1 year

1 to 2 years (including

2 years)

2 to 3 years (including

3 years)

3 to 4 years (including

3000.001500.0050.00

4 years)

4 to 5 years (including

3000.002400.0080.0051420.0041136.0080.00

5 years)

More than 5 years 105000.00 105000.00 100.00 72000.00 72000.00 100.00

Total 108000.00 107400.00 -- 126420.00 114636.00

(3) Details of bad debt provision

Carrying Amount changes for the period Carrying

Type amount at the Addition Withdrawal Write-off Other amount at the

beginning or reversal changes end

Bad debt

114636.0011184.0018420.00107400.00

provision

Total 114636.00 11184.00 18420.00 107400.00

(4) Receivables actually written off in the current period

Item AmountItem Amount

Actual write-off amount 18420.00

During the period the board of directors approved to write off the Beijing Branch of Hainan

Jingliang Holding Co. Ltd. and to write off the uncollectible receivables.

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

Ratio of the total

Is it Bad debt

Debtors Book balance balance of accounts Aging

related provision

receivable(%)

Hainan pearl river pipe 4-5 years more

108000.00 100.00 No 107400.00

pile co. LTD than 5 years

Total 108000.00 100.00 —— —— ——

2. Other Receivables

A. Overview

(1) Classification

Item Ending Balance Beginning Balance

Interest receivable

Dividends receivable

Other receivables 180000000.00 103341.26

Total 180000000.00 103341.26

2. Other Receivables

(1) Disclosed according to aging

Aging Ending Balance

Within 1 Year (including 1 year) 180000000.00

Among them: Within credit period (within 3

180000000.00

months)

Credit period to 1 year

1 to 2 years (including 2 years)

2 to 3 years (including 3 years)

3 to 4 years (including 4 years)

4 to 5 years (including 5 years)

More than 5 years 93197.85

Sub-total 180093197.85

Less: Allowance for bad debts 93197.85

Total 180000000.00(2) Classification of other receivables by nature of funds

Book Balance at End of Book Balance at

Nature of Funds

Period Beginning of Year

Intercourse Funds of Units 180000000.00 3333.00

Employee Receivables

Personal Intercourse Funds 50000.00

Petty Cash 93197.85 105271.85

Others

Total 180093197.85 158604.85

(3) Details about allowance for bad debt

Stage 1 Stage 2 Stage 3

Expected Expected credit loss Expected credit

Provision for bad debt credit loss in for the whole period loss for the whole Total

the next 12 (no credit period (with credit

months impairment) impairment)

Amount on January 1 2021 5263.59 50000.00 55263.59

Carrying amount on January 1

2021 during this period:

——Get into Stage 2

——Get into Stage 3

——Get back to Stage 2

——Get back to Stage 1

Provision for the period 87934.26 87934.26

Reverse for the period

Transfer for the period

Write off for the period 50000.00 50000.00

Other changes

Balance at December 31 2021 93197.85 93197.85

(4) Details of bad debt provision

Type Carrying Amount changes for the period Carryingamount at amount at

Withdrawal Other

the Addition Write-off the end

or reversal changes

beginning

Bad debt

55263.5987934.2650000.0093197.85

provision

Total 55263.59 87934.26 50000.00 93197.85

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

Itam Amount

Receivables actually written off 50000.00

During the period the board of directors approved to write off the Beijing Branch of Hainan

Jingliang Holding Co. Ltd. and to write off the uncollectible other receivables.

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

Proportion in

Ending balance

Name of Nature of Balance at overall ending

Aging of bad debt

Organization Funds End of Period balance of other

reserves

receivables (%)

Beijing Grain Stock Related party 180000000.00 Within 3 99.94

Co. Ltd. borrowing months

Yan Yan Reserve fund 46000.00 2-3 years 0.026 46000.00

Pai Feng Reserve fund 26671.80 2-3 years 0.015 26671.80

Zhongwei Cui Reserve fund 14007.40 2-3 years 0.007 14007.40

Xiaohong Liu Reserve fund 5170.00 2-3 years 0.003 5170.00

Total —— 180091849.20 —— 99.99 91849.20

3. Long-term Equity Investment

Ending Balance Beginning Balance

Item

Provision

Provision for

Book Balance for Book Value Book Balance Book Value

Impairment

Impairment

Investment in

2626437846.242626437846.242626437846.242626437846.24

subsidiaries

Total 2626437846.24 2626437846.24 2626437846.24 2626437846.24

(1)Investment in subsidiariesCurrent

Ending

Provision

Beginning Current Current Ending Balance of

Invested Entity for

Balance Increase Decrease Balance Provision for

Impairme

Impairment

nt

Beijing Jingliang 2336639964.05 2336639964.05

Food Co. Ltd.Zhejiang little 249017319.14 249017319.14

prince Food Co.Ltd

Jingliang rural 15280563.05 15280563.05

complex

construction and

operation (Xinyi)

Co. Ltd

Jingliang 25500000.00 25500000.00

(Caofeidian)

Agricultural

Development Co.Ltd.Total 2626437846.24 2626437846.24

4. Operating income and operating costs

1. Details of operating income and operating costs

Current Amount Last Term Amount

Item

Income Cost Income Cost

Core business

Other businesses 591060.56 341162.52 1181687.83

Total 591060.56 341162.52 1181687.83

5. Income from investment

Sources of investment income Current Amount Last Term Amount

Long term equity investment income 461597751.35 205893687.32

calculated by cost method

Others 506874.91

Total 461597751.35 206400562.23

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" the non-recurring gains and losses during the reporting period shall

be reported1. Details of non-recurring profit and loss in the reporting period

Details of non-recurring profit and loss Amouont Note

(1) Gains and losses on disposal of non current assets -208369.12

(2) Government subsidies included in the current profits and

losses (closely related to the business of the enterprise

5397695.52

except the government subsidies enjoyed according to the

national unified standard quota or quantitative)

(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

6221323.63

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

(4) Other non-operating income and expenses other than the

1564510.91

above

(5) Other profit and loss items that meet the definition of

non recurring profit and loss

Total non recurring profit and loss

12975160.94

Less: amount affected by income tax 3214422.14

Non recurring profit and loss after deducting the influence

9760738.80

of income tax

Including: non recurring profit and loss attributable to the

9036938.63

owner of the parent company

Non recurring profit and loss attributable to minority

723800.17

shareholders

2. Return on equity and earnings per share

Weighted Return EPS

Current Profit on Average Equity

(ROAE) (%) Basic EPS Diluted EPS

Net profit attributable to the Company's

7.270.280.28

common shareholders

Net profit attributable to common

shareholders after deduction of 6.95 0.27 0.27

non-recurring gains and losses

Hainan Jingliang Holdings Co. Ltd.

31 March 2022