HAINAN JINGLIANG HOLDINGS CO. LTD.
ANNUALREPORT 2020
March 27 2021
HAINAN JINGLIANG HOLDINGS CO. LTD.
ANNUALREPORT 2020
Part I Important Notes
This Summary is based on the full text of the 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”).
Director Qingmei Pingcuo didn’t attend the Board Meeting in person due to a business trip and authorized
director Guan Ying to attend and vote on her behalf. Other directors attended the Board Meeting for reviewing 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
Address
15/F Jing Liang Building NO. 16 East
Third Ring Middle Road Chaoyang
District Beijing
15/F Jing Liang Building NO. 16 East
Third Ring Middle Road Chaoyang
District Beijing
Fax 010-51672010 010-51672010
Tel. 010-51672130 010-51672029
Email address 1124387865@qq.com gaodeqiu_jl@163.com
2. Principal Activities or Products in the Reporting Period
The Company is principally engaged in oils and oilseeds processing and trading as well as food production. It
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” and “Huo Niao” with the main products being
soybean oil rapeseed oil sunflower seed oil and sesame oil and paste among others. As for its food production
business it primarily develops produces and markets snack food and bread under the brands of “Little Prince”
“MS Dong” “Jianqiang De Tudou” and “Gu Chuan” 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.
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
2020 2019
2020-over-2019
change (%) 2018
Operating revenue 8741749912.11 7440286465.54 17.49% 7409124303.41
Net profit attributable to the listed
company’s shareholders 184846956.70 133341925.75 38.63% 167956581.15
Net profit attributable to the listed
company’s shareholders before
exceptional items
164037737.59 104483092.09 57.00% 127425177.20
Net cash generated from/used in
operating activities -246540910.08 297366794.05 -182.91% 850167551.24
Basic earnings per share
(RMB/share) 0.26 0.19 36.84% 0.24
Diluted earnings per share
(RMB/share) 0.26 0.19 36.84% 0.24
Weighted average return on equity
(%) 7.17% 5.70% 1.47% 7.69%
31 December 2020 31 December 2019
Change of 31
December 2020 over
31 December 2019 (%)
31 December
2018
Total assets 5695504493.73 5231266600.19 8.87% 4917148996.28
Equity attributable to the listed
company’s shareholders 2710571543.53 2406039283.87 12.66% 2272469925.43
(2) Key Financial Information by Quarter
Unit: RMB
Q1 Q2 Q3 Q4
Operating revenue 1719261111.71 2031511955.92 1928342701.75 3062634142.73
Net profit attributable to the
listed company’s shareholders 27655045.32 46107849.87 40894930.95 70189130.56
Net profit attributable to the
listed company’s shareholders
before exceptional items
23730342.72 44264847.23 32040014.29 64002533.35
Net cash generated from/used in
operating activities 328948834.32 -141853013.56 -273955632.37 -159681098.47
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
ordinary
shareholders at
the period-end
71627
Number of ordinary
shareholders at the
month-end prior to the
disclosure of this Report
68899
Number of
preferred
shareholders
with resumed
voting rights
at the
period-end
0
Number of
preferred
shareholders with
resumed voting
rights at the
month-end prior
to the disclosure
of this Report
0
Top 10 shareholders
Name of shareholder Nature ofshareholder
Shareholdi
ng
percentage
Total shares
held at the
period-end
Restricted shares held
Shares in pledge or
frozen
Status Shares
BEIJING GRAIN GROUP
CO. LTD.
State-owned
legal person 39.68% 288439561 164877598
BEIJING STATE-OWNED
CAPITAL OPERATION
AND MANAGEMENT
CENTER
State-owned
legal person 6.67% 48510460
WANGYUECHENG
Domestic
natural
person
5.66% 41159887 41159887
LI SHERYN ZHAN MING
Foreign
natural
person
1.23% 8939300
GOLD BUFFALO
RUNYING (TIANJIN)
EQUITY INVESTMENT
FUND MANAGEMENT
CO. LTD.—GOLD
BUFFALO RUNYING
Other 0.51% 3684503
(TIANJIN) EQUITY
INVESTMENT FUND (L.P.)
MEI JIANYING
Domestic
natural
person
0.36% 2604203
ZHANG XIAOXIA
Domestic
natural
person
0.27% 1949250
WANG XIAOXING
Domestic
natural
person
0.24% 1748400
TANWENQIONG
Domestic
natural
person
0.20% 1419700
ORIENT SECURITIES（HONG KONG）LIMITED
Foreign legal
person 0.19% 1354500
Related or acting-in-concert parties among the
shareholders above
① Beijing State-Owned Capital Operation and Management Center owns
100% of Beijing Grain Group Co. Ltd. and Beijing Grain Group Co. Ltd. is
the controlling shareholder of the Company (a 39.68% holding). ② Wang
Yuecheng is a Deputy General Manager of the Company. Apart from that the
Company does not know whether there are any other related parties or
acting-in-concert parties among the top 10 shareholders.Shareholders involved in securities margin
trading (if any)
Shareholder Wang Xiaoxing holds 1748400 shares in the Company through
his account of collateral securities for margin trading in Soochow Securities
Co. Ltd.
(2) Number of Preferred Shareholders and Shareholdings of Top 10 of Them
□ Applicable √ Not applicable
No preferred shareholders in the Reporting Period.
(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
39.68%
Beijing State-Owned Capital Operation
and Management Center
Beijing Capital Agribusiness Group Co.
Ltd.
Beijing Grain Group Co. Ltd.
Hainan Jingliang Holdings Co. Ltd.
100%
100%
100%
5. Corporate Bonds
Does the Company have any corporate bonds publicly offered on the stock exchange which were outstanding
before the date of this Report’s approval or were due but could not be redeemed in full?
No.Part III Operating Performance Discussion and Analysis
1. Business Overview of the Reporting Period
(1) Overall Performance
The year 2020 saw sudden perplexing and tremendous changes in macroeconomic conditions. Facing the impact
of the Covid-19 pandemic the China-United Sates (US) trade war the economic slowdown and other negative
factors we withstood the pressure and responded swiftly. We strengthened operation and management while
making unremitting efforts in pandemic control and prevention. As a public company we explored and analyzed
new means to increase our profitability while strengthening the internal control and regulatory compliance as the
foundation of operational stability and long-term development. Finally we finished the year with steady growth in
operating performance. For the year under review the Company recorded operating revenue of RMB8.742 billion
up 17.49% year on year; a gross profit of RMB285 million up 9.87% year on year; a net profit attributable to the
listed company’s shareholders of RMB185 million up 38.63% year on year; and earnings per share of RMB0.26
up 36.84% year on year. As such the objectives for the year were successfully accomplished.
(II) Major Results Achieved
1. The Oils and Oilseeds Division: Stable development in a positive direction
The Oils and Oilseeds Division effectively resisted the impact of the China-US trade war and the Covid-19
pandemic by leveraging the advantages of the oils and oilseeds industry chain. The Division recorded a total profit
of RMB136 million during the Reporting Period. Adhering to the operation mode of "Hedging + Basis Trading +
Inventory Rotation" and leveraging its experience in coping with the China-US trade war Jingliang Tianjin made
science-based analyses and judgments and planned preemptively finally securing a stable operating profit. The
annual output of soybean oil hit a new record high exceeding the target set for the year. Adopting a hedging mode
Jingliang Oils and Oilseeds strengthened the research and development of new product categories and
implemented more rigorous market analysis focusing on categories with stable demand and small impact from the
pandemic such as domestic soybean sunflower seed oil and non-genetically modified rapeseed oil. The annual
sales of oils and oilseeds hit a new record high. Through the trusteeship of Hongjingyuan Guchuan Edible Oil
innovated the mode of Beijing-Inner Mongolia industry assistance as the trusteeship is a win-win cooperation
between two companies of complementary advantages and the new mode is expected to produce a greater poverty
alleviation effect. In addition by developing the Group's trade union benefits platform the Division made all-out
efforts to promote the sales of all categories of products and implement online promotions. Tianweikang
continued to develop its warehousing services platform strengthened the management of edible oil reserves
improved the level of warehousing services improved the inventory rotation efficiency and implemented
emergency stock allocation tasks.
2. The Foods Division: Stable growth
Due to the pandemic-induced sluggish market demand the Foods Division recorded a total profit of RMB174
million in the Reporting Period. Zhejiang Xiaowangzi actively worked to develop new products and explore new
channels. The 4D Corn Roll a new product has been launched on the top three platforms namely Be & Cheery
Lyfen and Three Squirrels. The sales volume has grown significantly. With the "in-store special-shaped island
booth" strategy implemented in Yonghui RT-Mart Walmart and other hypermarkets the average sales per store
has grown significantly. Thanks to the growing sales of new products and stable sales of old products a good
momentum has been maintained. Taking advantage of the stabilizing domestic situation of the pandemic Guchuan
Bread increased sales at KFC and Green Tea stores increasing the proportion of sales at Green Tea stores and
distributors and further optimizing the customer/channel structure.
3. Stable expansion through acquisition and trusteeship
Following the plan of "implement a batch" "improve a batch" and "expand a batch" acquisition and restructuring
were implemented in a layer-by-layer step-by-step approach. During the Reporting Period we successfully
acquired the remaining equities of Zhejiang Xiaowangzi. Through this project we gained experience and laid a
foundation for future acquisition and restructuring projects. We improved the management of the two companies
under the Company's trusteeship Hongjingyuan and Shanghai Sunlon by providing standardized guidance and
professional management improving their corporate governance structures and streamlining their operation
processes. The preset targets for the trusteeships have been achieved.
4. Solid and effective efforts in pandemic control and prevention
We actively responded to the severe challenges posed by the Covid-19 pandemic implementing targeted control
and preventive actions in a well-planned manner. Promptly responding to the calls from government authorities
we established a pandemic control and prevention leadership team and a pandemic control and prevention
inspection team established a pandemic control and prevention system and implemented various pandemic
control and prevention measures in a strictly disciplined and thoroughly planned manner. We actively worked to
use the financial support policies for pandemic relief to reduce the Company's cost of capital.
5. Continuous improvement in management level
First with the implementation of an online office platform the power of execution has been improved better
ensuring the implementation of the Company's policies and plans. Second a personnel development system has
been established and improved which has served to promote multi-directional communication and upper-lower
interaction. The Jingliang Holdings Forum was created as a means to improve the overall quality of the
Company's middle and senior managers promote their market-consciousness and share their management
experience. Third pilot efforts were made to drive regulatory compliance. We investigated our headquarters and
subsidiaries for regulatory compliance batch by batch reviewed the regulatory compliance policies liabilities and
risks of our major businesses and updated the checklist of regulatory compliance risks associated with our equity
investments thereby laying a solid foundation for regulatory compliance and improving the regulatory
compliance management level.
2. Significant Change to Principal Activities in the Reporting Period
□ Yes √ No
3. Product Category Contributing over 10% of Principal Business Revenue or Profit
√ Applicable □ Not applicable
Unit: RMB
Product
category Operating revenue Operating profit
Gross profit
margin
YoY change in
operating
revenue (%)
YoY change in
operating profit
(%)
YoY change in
gross profit
margin (%)
Oils and
oilseeds 7799378959.10 136231943.72 4.64% 20.90% 52.85% 0.15%
Food
processing 898193522.11 174173301.85 29.46% -4.52% -6.77% -2.18%
4. Business Seasonality that Calls for Special Attention
□ Yes √ No
5. Significant YoY Changes in Operating Revenue Cost of Sales and Net Profit Attributable to the Listed
Company’s Ordinary Shareholders or Their Compositions
√ Applicable □ Not applicable
Net profit attributable to the listed company’s ordinary shareholders increased year on year primarily driven by a
greater processing volume as a result of recovery in market demand the increase in both revenue and profit due to
a rising profit from the oils pressing business as well as the acquisition of non-controlling interests in the current
period.
6. Delisting
□ Applicable √ Not applicable
7. Matters Related to Financial Reporting
(1) YoY Changes to Accounting Policies Accounting Estimates or Measurement Methods
√ Applicable □ Not applicable
On 5 July 2017 the Ministry of Finance (MOF) issued the Notice on Revising and Implementing the Accounting
Standards No. 14: Revenues (Caikuai [2017] No. 22). According to the revised version of the accounting
standards and the requirements laid down in the notice of the MOF the Company started implementing the new
revenue accounting standards on 1 January 2020. According to requirements for the transition from the old to the
new accounting standards the Company started implementing the new standards on 1 January 2020 but only
adjusted the description and amount of relevant items of the year-beginning financial statements made no
adjustments to comparable within-period information and made no retrospective adjustments to the financial
statements of the Company's previous fiscal years.
(2) Retrospective Restatements due to Correction of Material Accounting Errors in the Reporting Period
□ Applicable √ Not applicable
No such cases.
(3) YoY Changes to the Scope of Consolidated Financial Statements
□ Applicable √ Not applicable
No such cases.Hainan Jingliang Holdings Co. Ltd.
27 March 2021
1
Auditor’s Report
Baker Tilly China [2021] No.16171
All Shareholders of Hainan Jingliang Holdings Co. Ltd.:
I. Audit Opinion
We have audited the financial statements of Hainan Jingliang Holdings Co. Ltd. (hereinafter referred to as the
"Jingliang Holdings") which comprise the consolidated balance sheet and balance sheet of parent company as at
December 31 2020 consolidated income statement and income statement of parent company consolidated
statement cash flow statement and cash flow statement of parent company consolidated statement of changes in
shareholders’ equity and statement of changes in shareholders’ equity of parent company and notes to relevant
financial statements in 2020.In our opinion the attached financial statements are prepared in accordance with Accounting Standards for
Business Enterprises and Accounting System for Business Enterprises in all major aspects and fairly reflect the
Jingliang Holdings’s consolidated and parent company's financial position as at December 31 2020 as well as
the consolidated and parent company's operation results and cash flows in 2020.II. Basis of Forming Audit Opinions
We conducted the audit work in accordance with the regulations of Auditing Standards for Chinese Certified
Public Accountant. "Responsibility of Certified Public Accountant for Auditing Financial Statements" the part of
the audit report further elaborated our responsibilities under these standards. In accordance with the code of
professional ethics for the Chinese Certified Public Accountants we are independent of Jingliang Holdings and
perform other responsibilities in the field of professional ethics. We believed that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for our audit opinions.III. Key Audit Matters
We considered that key audit matters are the most important items to audit the current financial statements
according to our professional judgment. These matters shall be dealt with in the context of an audit and opinion of
the financial statements as a whole and we do not comment on these matters in isolation. We identified the
following items as key audit items to be communicated in the audit report.(I) Revenue confirmation
1. Items Description
In 2020 as stated in the "Note VI (36)" of the financial statements of Jingliang Holdings the operating income in
2
the consolidated income statement of Jingliang holdings is RMB 8741749912.11 which is mainly generated
from oil trade food production processing and sales. The occurrence and integrity of operating revenue have a
significant impact on the operating results of Jingliang Holdings. Therefore we determine the occurrence and
integrity of operating revenue as key audit matters.
2. Audit Response
The main audit procedures we performed are as follows:
(1) Understanding and testing the whole process and relevant system of sales and collection cycle of Jingliang
Holdings and conducting controlling test on sales and collection cycle and evaluating the effectiveness of its
design and operation;
(2) Checking whether the accounting policies and specific methods of revenue confirmation of Jingliang Holdings
and revenue confirmation timing conform to the requirements of the accounting standards for business enterprises;
(3) Carrying out the analysis procedure for the operating income analyzing the rationality of the change of the
gross profit rate of Jingliang Holdings comparing with the similar indicators in the previous period and
identifying and investigating the causes of abnormal fluctuations.
(4) Take sampling method to check the contracts invoices delivery orders and other original documents related to
revenue confirmation of Jingliang Holdings;
(5) Checking the relevant contracts invoices issue order and other revenue recognition documents for the
operating income recognized before and after the balance sheet date of Jingliang Holdings executing the cut-off
test procedure and evaluating whether the sales income of Jingliang Holdings is recorded in the appropriate
accounting period;
(6) Performing confirmation procedures for accounts receivable and conducting substitution tests on unresponded
samples.(II) Goodwill Impairment Provision
1. Items Description
As at December 31 2020 as stated in "Note VI. 16" of consolidated financial statement of Jingliang Holdings the
goodwill amount in the consolidated balance sheet of the company is RMB 191394422.51 which was generated
from acquiring Zhejiang Little Prince Food Co. Ltd. (hereinafter referred to as the “Zhejiang Little Prince”) in
2015. The management conducted impairment test on the mentioned goodwill according to the accounting policy
of "Note III (20)" of the financial statements of Jingliang Holdings determined the recoverable amount of the
asset group containing the goodwill based on the prediction of present value of the expected future cash flow on
the basis of the continuous operation and considered that provision for impairment of goodwill is not required.3
The key parameters used in the impairment test of goodwill included expected revenue growth rate pre-tax
operating profit rate and discount rate etc. which may involve significant accounting estimation and judgment.The management face the risk of preference when selecting assumptions and estimations. Therefore we
determined the impairment provision of goodwill as a key audit matter.
2. Audit Response
The main audit procedures we performed are as follows:
(1) Understanding and evaluating the design of internal control related to the goodwill impairment test and
effectiveness of key control execution which includes the adopted key assumptions and parameters and the
relevant internal control;
(2) Evaluating the appropriateness of the goodwill impairment test method adopted by the management. We
evaluate the rationality of the main assessment assumptions and the key parameters used in the goodwill
impairment test such as the expected income growth rate pre-tax operating profit rate and discount rate through
analying of the main economic indicators of past years interviewing with the management considering the
market development and comparing the industry or market data.
(3) Testing the accuracy of the calculation process of goodwill impairment test;
(4) Evaluating the accuracy of the prediction of the realized annual data. For example comparing the expected
future cash flow of the previous year or acquisition time with the actual business performance in the current year
and considering any management bias that exist in the process of goodwill impairment test that conducted by
management.
(5) For the goodwill impairment test report prepared by the third-party experts employed by the audited unit in
addition to the audit procedures (1) to (4) above the audit team also evaluates the competency professional
quality and objectivity of the third-party experts and records the evaluation results in the audit draft which
includes obtaining the professional qualification of the third-party experts such as having the securities period We
have evaluated the accuracy of the forecast data for the year of realization such as business license of an appraisal
institution with securities and futures qualification and the qualification certificate of the asset appraiser etc.IV. Other Information
The management of Jingliang Holdings (hereinafter referred to as management) was responsible for other
information which includes information covered in Jingliang Holdings 2020 annual report but not the financial
statements and our audit report.Our audit opinions on the financial statements didn’t cover other information and we do not publish any form of
assurance conclusion of other information.4
In combination with our audit of the financial statements our responsibility is to read other information and
consider any material inconsistencies or material misstatement appears between other information and the
financial statements or the situation we learned in the audit process
Based on the work we have performed we are expected to report the fact of recognized material misstatement in
other information. In this respect we do not have any matters to report.V. Responsibilities of Management and Governance for Financial Statements
The management is responsible for preparing the consolidated financial statements in accordance with the
Accounting Standards for Business Enterprises to achieve fair reflection and to design implement and maintain
necessary internal controls to ensure that the consolidated financial statements are free from material misstatement
due to fraud or error.When preparing the financial statements management is responsible for assessing the sustainable operation
capability of Jingliang Holdings disclosing matters related to the sustainable operation (if applicable) and
applying the continuing operation assumption unless management plans to liquidate the Jingliang Holdings
terminate operations or have no other realistic options.The governance is responsible for supervising the financial reporting process of Jingliang Holdings.VI. The Responsibility of Certified Public Accountants for Auditing Financial Statements
Our goal is to obtain reasonable assurance on no material misstatement due to fraud or error in the whole financial
statements and to issue an audit report containing audit opinions. Reasonable assurance was a high level of
assurance but it does not guarantee that the material misstatement in audit process in accordance with the audit
standards can always be found.Misstatements may result from fraud or error and are generally considered to be material if the individual or
aggregated misstatements are reasonably expected to affect the economic decisions made by users of the financial
statements on the basis of the consolidated financial statements.In the process of performing the audit in accordance with the audit standards we exercise professional judgment
and maintain professional skepticism. Meanwhile we also implement the following work:
(1) Identifying and assessing the risk of material misstatement in the consolidated financial statements due to
fraud or error designing and implementing audit procedures to address these risks and obtaining sufficient and
appropriate audit evidences as the basis for issuing audit opinions. Since fraud may involve collusion forgery
willful omission misrepresentation or overriding internal control the risk of failing to recognize a material
misstatement resulting from fraud is higher than the risk of failing to recognize a material misstatement resulting
from error.5
(2) Understanding internal controls related to audit to design appropriate audit procedures.
(3) Evaluating the appropriateness of accounting policies adopted by management and the rationality of
accounting estimates and relevant disclosures.
(4) Drawing conclusions about the appropriateness of going concern assumption adopted by management.
Meanwhile drawing conclusions about the matters that may lead to significant doubts about sustainable operation
capacity of Jingliang Holdings or significant uncertainties of situation. If we concluded that significant
uncertainties exist according to the requirements of the audit standards we should draw the attention of statement
users to the relevant disclosures in the consolidated financial statements in the audit report. If the disclosure was
insufficient we should express a non-unqualified opinion. Our conclusions were based on available information
as at the audit report date. However future events or circumstances may cause the unsustainable operation of the
Jingliang Holdings.
(5) Evaluating the overall presentation structure and content of the consolidated financial statements and
assessing whether the financial statements fairly reflected relevant transactions and events.
(6) Obtaining sufficient and appropriate audit evidences of financial information of entities or business activities
in Jingliang Holdings to issue audit opinions on consolidated financial statements.We are responsible for guiding
supervising and executing group audits and take full responsibility for audit opinions.We communicated with governance about the planned scope of audit time arrangement and the major audit
findings including the concerned internal control deficiencies that we identified during the auditing process.We also provide governance with a statement that we have complied with the professional ethical requirements
relating to our independence and communicate with governance all relationships and other matters that may
reasonably be considered to affect our independence as well as the relevant precautions if applicable.
Among the matters that we have communicated governance we determine the most important matters to the audit
of the current consolidated financial statements and thus constitute the key audit matters. We describe these
matters in the audit report unless laws and regulations prohibit public disclosure of such matters or in rare
circumstances we determine that we should not communicate a matter in our audit report if it is reasonably
expected that the negative consequences of communicating such matter in our audit report would outweigh the
benefits in the public interest.
Beijing China
Mar. 25th 2021
Chinese Certified Public
Accountant:
(Engagement partner)
Wang Jijun
Chinese Certified Public
Accountant: Shi Tao
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1
Hainan Jingliang Holdings Co. Ltd.Notes to the 2020 Financial Statements
(Unless otherwise stated the amount unit is RMBYuan)
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 Beijing Wanfa Real Estate
Development Co. Ltd.. After the transfer of shares was completed in June 1999 Beijing Wanfa Real Estate Development
Co. Ltd. held 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
2
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 the transaction 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
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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 2020 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 25 2021.
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 17 subsidiaries of the Company were included in the scope of consolidation on 31 December 2020 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
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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 25 “Revenue". For descriptions of the significant accounting judgments andestimates made by the management please refer to Note Ⅲ 31 “Significant Accounting Judgments and Estimates"
1. Statement of Compliance of Accounting Standards for Business Enterprises
The financial statements prepared by the Company based on the above preparation basis conform 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
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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 or multiple 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
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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 as goodwill. 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).7
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 or accounting periods adopted by
the subsidiaries are inconsistent with those adopted by the Company necessary adjustments shall be made to the financial
statements of the subsidiaries in accordance 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.8
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 in subsidiaries 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: ① These transactions were entered
into simultaneously or taking into account each other's influence; ② Only when these transactions are taken together can a
complete business result be achieved; ③ The occurrence of one transaction depends on the occurrence of at least one other
transaction; ④ 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
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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 ventures and joint ventures in accordance with the rights and obligations it
enjoys in the joint venture arrangement. Joint operation refers to the joint venture arrangement in which the Company enjoys
the assets related to the arrangement and assumes the liabilities related to the arrangement. A joint venture refers to a joint
venture arrangement in which the Company only has rights over the net assets of the arrangement.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 expenses incurred 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 used for payment at any time
and investments held by the Company with a short term (usually maturing within three months from the date of purchase)
high liquidity easy conversion into cash of a known amount and little risk of value change.
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
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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: ① 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; ② 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); ③ 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 the other comprehensive income and shall be included in the
profits and losses of the current period.Where the preparation of the consolidated financial statements involves overseas operations 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
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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
A financial asset or financial liability is recognized when the Company becomes a party to a financial instrument
contract.
(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 arising from the sale of products or the provision of labor services that do not contain or take
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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.
1 Financial assets measured at amortized cost
The Company's business model of managing financial assets measured in amortized cost is aimed at collecting
contractual cash flow and the contractual cash flow characteristics of such financial assets are consistent with the basic
lending arrangements 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.
2 Financial assets measured at fair value with changes included in other comprehensive income
The Company's business model for managing such financial assets is to collect and sell contractual cash flow and the
contractual cash flow characteristics of such financial assets are consistent with the basic lending arrangements. 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.
3 Fair value through Profit and Loss Financial assets
The Company classifies the above financial assets measured at amortized cost and financial assets measured at fair
value with changes included in other comprehensive income into 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.
1 Fair value through Profit and Loss Financial liabilities
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.
2 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 losses arising from termination of recognition or amortization are included in current profits and losses.
(3) Basis of Confirmation and Calculation of financial instruments
Financial assets shall be derecognized if they meet one of the following conditions: ① The termination of the
contractual right to receive cash flow from the financial asset. ② 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. ③ 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 liabilities
If 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 as much 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 credit loss 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
①Notes 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
Commercial acceptance bill
According to the acceptor's credit risk classification it should be the same as
the "receivable" portfolio classification.
3 Accounts receivable and other receivables
For receivables that do not contain significant financing components the Company measures the 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 portfolio
Portfolio 1 Aging portfolio
Portfolio 2 A portfolio of receivables between the ultimate controller and its subordinate units
Portfolio 3
The portfolio of public maintenance funds and house sales funds deposited in the housing
provident fund management center
Portfolio 4 Deposit/margin portfolio
Portfolio 5 The portfolio of reserve fund ledger formed by the Company's staff loan
The accrual method of bad debt reserves for different portfolios:
Item Accrual method
Aging portfolio
According to the accrual proportion corresponding
to the aging period
Portfolio of receivables between the ultimate controlling party and
its subordinate units
Referring to the historical credit loss experience
combined with the current situation and the forecast
of future economic conditions the expected credit
loss is calculated thr-ough the default risk exposure
and the expected credit loss rate within the next 12
months or the entire duration and the expected
credit loss rate of the portfolio is zero.The portfolio of public maintenance funds and house sales funds
deposited into the MPF Management Center
Deposit/margin portfolio
The portfolio of reserve fund ledger formed by the Company's staff
loan.a. In portfolio the portfolio method of withdrawing bad debt reserves by aging analysis
Aging
Expected loss rate of
notes receivable (%)
Expected loss rate of
accounts receivable (%)
Expected loss rate of other
receivables (%)
Within 1 year (including 1 year the
Aging
Expected loss rate of
notes receivable (%)
Expected loss rate of
accounts receivable (%)
Expected loss rate of other
receivables (%)
same below)
Among them: Within the credit period
(within 3 months)
0 0 0
Credit period~1 year 2 2 2
1-2 years 5 5 5
2-3years 20 20 20
3-4years 50 50 50
4-5years 80 80 80
More than 5 years 100 100 100
b. In the portfolio the description of the accrual method for accrual of bad debt reserves by other methods is given.
Aging
Expected loss rate of
notes receivable (%)
Expected loss rate of
accounts receivable (%)
Expected loss rate of
other receivables (%)
Accounts receivable between the final
controlling party and its subordinate u
0 0 0
Public maintenance fund and house sale fund
deposited into MPF Management Center
0 0 0
Deposit/margin 0 0 0
The reserve fund ledger formed by the
Company's staff loan.
0 0 0
11. Inventory
(1) Classification of inventory
Inventories mainly include raw materials turnover materials developed products in transit materials inventory goods
reserve tanker storage commissioned processing and manufacturing consignment etc..
(2) Valuation method for obtaining and issuing inventory
Inventories are valued at actual cost when they are acquired. Inventory costs include purchase costs processing costs
and other costs. They are valued with weighted average method when they are used and issued.
(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
If the book value of a non-current asset or to-be-disposed portfolio is recovered by the Company mainly through sale
activities (including the exchange of non-monetary assets with commercial nature the same below) the non-current asset or
to-be-disposed portfolio falls into held-for-sale category. The specific criteria: both of the following conditions shall be
satisfied: 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 of the
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 theassets recognized before the classification of the held-for-sale non-current assets in accordance with the applicable “Guidefor Held-For-Sale” shall not be reversed.In terms of the held-for-sale non-current assets or non-current assets in Disposal Portfolio there is no 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 its accounting 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
jointly control the development of these policies with other parties.
(1) Determination of investment cost
For a long-term equity investment obtained from a combination of businesses under the same control 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 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 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 of the 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
accordance with 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 still accounted 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 a result 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-TermAsset Impairment”.When the self-use property or inventory is converted into investment property or investmentproperty is converted into
self-use property the book value before conversion is used as the 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 not expected 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 service life estimated net residual value and annual depreciation rate of various fixed assets are
as follows:
Category
Depreciation
Method
Depreciation
period (Year)
Net esidual
rate(%)
Annual depreciation rate
(%)
Buildings
straight-line
depreciation
8-50 5 1.90— 11.88
uipElectronic eqment
straight-line
depreciation
3-10 4、5 9.50—32.00
Machinery equipment
straight-line
depreciation
5-28 4、5 3.39—19.20
Transport facility
straight-line
depreciation
5-10 4、5 9.50—19.20
Office equipment
straight-line
depreciation
3-10 4、5 9.50—32.00
Other equipment
straight-line
depreciation
5-28 4、5 3.39—19.20
The estimated net residual value refers to the expected state after the estimated useful life of 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 . 20
“Long-TermAsset 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. 20 “Long-TermAsset 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 under construction 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. 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.
Expenditure on other items other than this is recognised in profit and loss when incurred.
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:
Item Amortization period (year) Amortization method
Trademark 20 Straight-line method
At the end of the period the useful life and amortization methods of intangible assets with 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. 20 “Long-Term
Asset Impairment”.
19．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.
20. Long-term assets impairment
For fixed assets construction in progress intangible assets with limited useful life investment property measured by
cost model and non-current non-financial assets such as long-term 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.
21. Employee Compensation
The Company's employee compensation mainly includes short-term employee remuneration Post-employment
Benefits Termination Benefits and benefits for other long-term employee. Among them:
Short-term employees remuneration mainly includes wages bonuses allowances and subsidies employee welfare fees
medical insurance premiums maternity insurance premiums work injury 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 and otherwise accounted for the Defined Benefit
Plan.
22. Estimated liabilities
When the obligations related to the contingencies meet the following conditions they are recognized as estimated
liabilities: (1) The obligation is the current 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 will inevitably 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).
23. 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 be measured 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 receiving enterprise 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
24. Preferred Stock Perpetual Capital Securities and Other Financial Instruments
(1) Distinction between perpetual capital securities and Preferred Stock
Financial instruments such as perpetual bonds and preferred stocks issued by the Company as well as meeting the
following conditions shall be used as equity instruments:
a.) The financial instrument does not include contractual obligations to deliver cash or other financial assets to other
parties or to exchange financial assets or financial liabilities with other parties under potentially adverse conditions.b.) In the case of the financial instrument is to be settled or available with the company's own equity instruments in the
future if the financial instrument is a non-derivative it does not include the contractual obligation to deliver a variable
amount of its own equity instruments; if it is a derivative the Company can only settle the financial instrument by
exchanging a fixed amount of cash or other financial assets with a fixed amount of its own equity instruments.
Except for financial instruments that can be classified under the above conditions other financial instruments issued by
the Company should be classified as financial liabilities.If the financial instruments issued by the Company are compound financial instruments they are recognized as a
liability based on the fair value of the liability component and are recognized as “other equity instruments” based on the
amount actually received after deducting the fair value of the liability component. The transaction costs incurred in issuing a
compound financial instrument are apportioned in proportion to their respective total issue price between the liability
component and the equity component.
(2) Accounting treatment methods such as perpetual capital securities and preferred stocks
Related interest dividends gains or losses of financial instruments such as perpetual capital securities and preferred
stocks classified as financial liabilities and gains or losses arising from redemption or refinancing are included in thecurrent profits and losses except for borrowing costs that meet the capitalization conditions (see Note 3 17 “Borrowing
Fees”).
When financial instruments such as perpetual capital securities and preferred stocks classified as equity instruments are
issued (including refinancing) repurchased sold or cancelled the Company shall treat it as a change in equity and related
transaction costs are also deducted from equity. The Company's allocation of equity instrument holders is treated as profit
distribution.The Company does not recognize changes in the fair value of equity instruments.
25. 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 the qualification 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.
26. Contract cost
1. 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.
27. 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 the payment 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.
28. 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 current income 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 income will 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.
29. 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 are capitalized when occurring and the profits and
losses of the current period shall be recorded in stages on the same basis as the recognized 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.
30. 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: ① This component represents an
independent major business or a separate major business area. ② This component is part of an associated plan to dispose of
an independent major business or a separate major business area. ③ This component is a subsidiary company acquired
specifically for resale.
For the accounting treatment methods for termination of operations please refer to the relevant descriptions 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.
31. 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 liabilities and
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 of impairment. 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
Value Added Tax
After deducting the allowable amount of input tax deducted in the
current period the difference between the sales of goods taxable
services and taxable services income calculated in accordance
with the provisions of the Tax Law is the taxable value-added tax.
3%、5%、6%、9%、
10%、13%
Urban Maintenance &
Construction Tax According to the actual value-added tax 5%、7%
Extra charges of
education funds
According to value added tax and consumption tax on the basis of
actual payment 3%
Local Extra Charges of
Education Funds
According to value added tax and consumption tax on the basis of
actual payment 2%
Corporate Taxes According to taxable income 15%、17%、25%
Property Tax
According to 70% of original value of the real estate (or rental
income) as the tax base; according to the original value of the real
estate deducted 30% at a time.
1.2%、12%
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 (2018) 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. Ltd. 17%
Beijing Guchuan Bread Food Co. Ltd. 15%
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).In accordance with the relevant provisions of Ministry of Finance and State Administration of Taxation “Notice onPreferential Enterprise Income Tax Policies for Employment of Persons with Disabilities ” (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 of taxable income according to 100% of the wages paid to the disabled workers.
According to the announcement of Zhejiang Provincial Tax Bureau (No. 8 2014) Hangzhou Linan Little Angel Food
Co. Ltd. a 4th subsidiary company of the Company can enjoy the preferential policy of reducing the urban land use tax by
an annual quota of 2000 yuan per person for the average number of actual resettlement and the maximum amount of
reduction is the urban land use tax payable by the unit in the current 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 2020 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.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 SGD10000 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.
Beijing Guchuan Bread&Food Co. Ltd. a 3rd tier subsidiary of the Company is a high-tech enterprise. On November
30 2018 it obtained the certificate of high-tech enterprise and the certificate number GR201811007245. It is valid for three
years. It enjoys the preferential tax policy of paying enterprise income tax at the 15% tax rate according to the relevant
provisions of both “Law of the People's Republic of China on Tax Collection and Administration” and “Rules for theImplementation of the Tax Collection and Administration Law of the People's Republic of China”.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 tax and 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 the sale of ediblevegetable oil stored by the government from VAT according to “ Notice of the Ministry of Finance and the State
Administration of Taxation on the Levy and Exemption of Value Added Tax for Food Enterprises”（Cai Shui [1999] No.198）
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 1999 the company will exempt edible
vegetable oil stored by the government from VAT.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 The Implementation 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.
Ⅴ. Changes in accounting policies accounting estimates and explanation of corrections to previous errors
1. Changes in accounting policies
On July 5 2017 the Ministry of Finance issued the "Notice on the Amendment and Printing of the ‘Accounting
Standards for Business Enterprises No. 14 – Income' " (Finance and Accounting [2017] No. 22). Based on the accounting
standard revision and the requirements of the notice of the Ministry of Finance Jingliang Holdings shall implement the new
revenue standards as of January 1 2020.According to the convergence of the old and new standards the company has
implemented the new standards since January 1 2020. It only adjusts the listing of relevant items and corresponding
amounts in the financial statements at the beginning of the year and does not adjust the information of comparable periods
which does not involve retroactive adjustment of the previous years of the company.
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 first time to implement the new revenue standard adjustment and the first time to implement the financial
statements at the beginning of the year related items
Consolidated Balance Sheet
Monetary Unit: RMB Yuan
Items 31 December 2019 1 January 2020 Adjustments
Current Assets:
Monetary capital 557168512.39 557168512.39
Transactional financial assets 161300000.00 161300000.00
Derivative financial assets 88792254.00 88792254.00
Notes receivable
Accounts receivable 80743986.81 80743986.81
Receivables financing
Prepayment 138379800.10 138379800.10
Other receivables 19220097.34 19220097.34
Including: Interest receivable 3927438.90 3927438.90
Dividends receivable
Inventory 1412755661.65 1412755661.65
Contract assets
Held-for-sale assets
Non-current assets due within one year
Other current assets 560297233.13 560297233.13
Total current assets
3018657545.42 3018657545.42
Non-current assets:
Long-term equity investment 198301333.79 198301333.79
Other equity instruments investment 20000000.00 20000000.00
Other non-current financial assets
Investment property 31781350.74 31781350.74
Items 31 December 2019 1 January 2020 Adjustments
Fixed assets 1210450340.22 1210450340.22
Construction in process 17876177.78 17876177.78
Intangible assets 368170434.38 368170434.38
Development expenditure
Goodwill 191394422.51 191394422.51
Long-term deferred expenses 21026628.97 21026628.97
Deferred income tax assets 2603066.38 2603066.38
Other non-current assets 151005300.00 151005300.00
Total non-current assets 2212609054.77 2212609054.77
Total assets 5231266600.19 5231266600.19
Current liabilities:
Short-term borrowings
1329238701.60 1329238701.60
Accounts payable 130568413.43 130568413.43
Account collected in advance 481119461.41 983521.42
-480135939.99
Contract liabilities 480135939.99 480135939.99
Employee payroll payable 25192583.58 25192583.58
Taxes payable 47842621.41 47842621.41
Other payables 96171396.23 96171396.23
Including: Interest payable 24604524.69 24604524.69
Dividends payable 11013302.88 11013302.88
Total current liabilities 2110133177.66 2110133177.66
Non-current liabilities:
Long-term borrowings
Long-term payable to employees 5730662.87 5730662.87
Estimated liabilities
Deferred income 71518169.27 71518169.27
Deferred income tax liabilities 52788949.62 52788949.62
Other non-current liabilities
Items 31 December 2019 1 January 2020 Adjustments
Total non-current liabilities 130037781.76 130037781.76
Total liabilities 2240170959.42 2240170959.42
Owners' equity (or Shareholders' equity):
Capital stock 685790364.00 685790364.00
Other equity instruments
Including: Preferred stock
Perpetual capital bonds
Capital reserves 1595672048.19 1595672048.19
Less: treasury stock
Other comprehensive income 267628.14 267628.14
Special reserves
Surplus reserves 122122436.98 122122436.98
Undistributed profit 2186806.56 2186806.56
Total equity attributable to the parent company 2406039283.87 2406039283.87
Minority equity 585056356.90 585056356.90
Total owners' equity (or shareholders' equity) 2991095640.77 2991095640.77
Total liabilities and owners' equity (or shareholders'
equity)
5231266600.19 5231266600.19
Parent company balance sheet
Monetary Unit: RMB Yuan
Items 31 December 2019 1 January 2020 Adjustments
Current Assets:
Monetary capital 5606837.37 5606837.37
Accounts receivable 42510.00 42510.00
Prepayment 532843.92 532843.92
Other receivables 12612756.48 12612756.48
Including: Interest receivable
Dividends receivable
Inventory 4824035.45 4824035.45
Other current assets 2114765.22 2114765.22
Items 31 December 2019 1 January 2020 Adjustments
Total current assets 25733748.44 25733748.44
Non-current assets:
Long-term equity investment 2377420527.10 2377420527.10
Other equity instruments investment 20000000.00 20000000.00
Investment property 5476357.73 5476357.73
Fixed assets 3028013.69 3028013.69
Development expenditure 94800.66 94800.66
Long-term deferred expenses 86477.92 86477.92
Total non-current assets 2406106177.10 2406106177.10
Total assets 2431839925.54 2431839925.54
Current liabilities:
Short-term borrowings
Accounts payable
Account collected in advance 38896.41 38896.41
Contract liabilities
Employee payroll payable 480445.28 480445.28
Taxes payable 1709752.97 1709752.97
Other payables 503550996.94 503550996.94
Including: Interest payable 21082795.47 21082795.47
Dividends payable 3213302.88 3213302.88
Held-for-sale liabilities
Non-current liabilities due within one year
Other current liabilities
Total current liabilities 505780091.60 505780091.60
Non-current liabilities:
Long-term borrowings
Deferred income
Deferred income tax liabilities
Other non-current liabilities
Total non-current liabilities
Total liabilities 505780091.60 505780091.60
Owners' equity (or Shareholders' equity):
Capital stock 685790364.00 685790364.00
Items 31 December 2019 1 January 2020 Adjustments
Capital reserves 2173387468.71 2173387468.71
Less: treasury stock
Surplus reserves 109487064.39 109487064.39
Undistributed profit -1042605063.16 -1042605063.16
Total owners' equity (or shareholders' equity) 1926059833.94 1926059833.94
Total liabilities and owners' equity (or shareholders' equity) 2431839925.54 2431839925.54
Ⅵ. Notes on Items in Consolidated Financial Statements
Note: The ‘beginning’ of the period refers to January 1 2020 and the ‘end’ of the period refers to December 31
2020. The previous period refers to the year 2019 and the current period refers to the year 2020.
1. Monetary funds
(1) Classification list
Items Ending Balance Beginning Balance
Cash 16761.72 27780.31
Bank Deposits 299235964.61 555138729.05
Other Currency Funds 36213443.28 2002003.03
Total 335466169.61 557168512.39
Among them: the total amount of money
deposited abroad 3153447.17 76673.88
(2) At the end of the period there are 1077152.20 yuan of freezing and other restricted funds.
(3) At the end of the period there is no funds deposited abroad and the return of funds is restricted.
2. Transactional financial assets
Items Ending Balance Beginning Balance
Financial assets measured at fair value with changes included
in current profits and losses 63478071.73
Among them: debt instrument investment 63478071.73
Designated as financial assets measured at fair value with
changes included in current profits and losses 161300000.00
Among them: debt instrument investment
equity instrument investment
Items Ending Balance Beginning Balance
others 161300000.00
Total 63478071.73 161300000.00
3. Derivative Financial Assets
Items Ending Balance Beginning Balance
Changes in fair value of hedging instruments 88792254.00
Total 88792254.00
Note: The Company hedges the inventory and expected transactions corresponding to the varieties involved in production
operation and trade and the hedging instruments are listed in the items in this table.
4. Notes receivable
(1) Classification list
Items Ending Balance Beginning Balance
Bank acceptance bill 456565.85
Commercial acceptance bill
Total 456565.85
5. Accounts Receivable
（1）Disclosed according to aging
Aging Ending Balance
Within 1 Year (including 1 year) 92064378.81
Among them: Within the credit (within 3 months) 87160593.21
Credit period to 1 year 4903785.60
1 to 2 years (including 2 years) 1133267.48
2 to 3 years (including 3 years) 31789.50
3 to 4 years (including 4 years) 45270.42
4 to 5 years (including 5 years) 51420.00
More than 5 years 401135.40
Total 93727261.61
（2）Present according to the method of provision for bad debt
Type(s)
Ending Balance
Book Balance Bad Debt Provision
Book Value
Amount Ratio(%) Amount
Provision
Ratio(%)
Separate provision for bad debts 1325135.40 1.41 1325135.40 100.00
Portfolio provision for bad debts 92402126.21 98.59 156458.61 0.17 92245667.60
Among them: aging portfolio 69364375.49 74.01 156458.61 0.23 69207916.88
related parties portfolio 23037750.72 24.58 23037750.72
Total 93727261.61 一一 1481594.01 一一 92245667.60
（Continued）
Type(s)
Beginning Balance
Book Balance Bad Debt Provision
Book Value
Amount Ratio(%) Amount
Provision
Ratio(%)
Separate provision for bad debts 1325135.40 1.61 1325135.40 100.00
Portfolio provision for bad debts 80930719.37 98.39 186732.56 0.23 80743986.81
Among them: aging portfolio 71459010.77 86.87 186732.56 0.26 71272278.21
related parties portfolio 9471708.60 11.52 9471708.60
Total 82255854.77 1511867.96 80743986.81
A. Separate provision for bad debts
Name
Ending Balance
Accounts
Receivable
Bad Debt
Provision
Provision
Ratio
Provision Reason
Beijing Xidan spicy town food limited
996000.00 996000.00 100.00
expected
unrecoverable
Beijing Rongfa Lida Grain and Oil Trade Co.
Ltd. 163143.00 163143.00 100.00
expected
unrecoverable
Fujian Jingxin Industrial Group Co. Ltd 151844.00 151844.00 100.00 expected
Name
Ending Balance
Accounts
Receivable
Bad Debt
Provision
Provision
Ratio
Provision Reason
unrecoverable
Beijing Guotai Ping'an Department Store Co.
Ltd. 10862.90 10862.90 100.00
expected
unrecoverable
Beijing Guotai Ping'an Tianzhu Commercial
Development Co. Ltd. 1809.60 1809.60 100.00
expected
unrecoverable
Carrefour (Shanghai) Supply Chain Management
Co. Ltd. Tianjin Branch 875.90 875.90 100.00
expected
unrecoverable
Beijing Shunyi Longhua Shopping Center 600.00 600.00 100.00
expected
unrecoverable
Total 1325135.40 1325135.40 －－ －－
B. Portfolio provision for bad debts
1. Portfolio provision: aging portfolio
Name
Ending Balance Beginning Balance
Accounts
receivable
Bad Debt
Provision
Provision
Ratio
Accounts
receivable
Bad Debt
Provision
Provision
Ratio
Within 1 Year (including 1 year) 69026628.
09
7466.13
71034407.
08
53078.5
0
Among them: Within the credit
(within 3 months)
68653321.
59
0
68380481.
82
0
Credit period to 1 year
373306.50 7466.13 2
2653925.2
6
53078.5
0
2
1 to 2 years (including 2 years) 137267.48
6863.37
5 65951.22 3297.57 5
2 to 3 years (including 3 years) 31789.50
6357.90
20 235232.47
47046.4
9
20
3 to 4 years (including 4 years) 45270.42
22635.2
1
50 51420.00
25710.0
0
50
4 to 5 years (including 5 years) 51420.00
41136.0
0
80 72000.00
57600.0
0
80
More than 5 years 72000.00
72000.0
0
100 100
Name
Ending Balance Beginning Balance
Accounts
receivable
Bad Debt
Provision
Provision
Ratio
Accounts
receivable
Bad Debt
Provision
Provision
Ratio
Total
69364375.
49
156458.
61
71459010.
77
186732.
56
2. Portfolio provision: related parties portfolio
Name
Ending Balance Beginning Balance
Accounts
receivable
Bad Debt
Provision
Provision
Ratio
Accounts
receivable
Bad Debt
Provision
Provision
Ratio
Related parties portfolio 23037750.72 9471708.60
Total 23037750.72 9471708.60
（3） details of bad debt provision
Items Beginning
Balance
The amount changed for the period Ending Balance
Addition Withdrawal
or reversal
Write-off Other
changes
Credit impairment loss 1511867.96 30273.95 1481594.01
Total 1511867.96 30273.95 1481594.01
（4）Accounts receivable actually written off in the current period
The company has no accounts receivable written off during the reporting period.
（5）Accounts Receivable of the Top 5 Balances Collected by Debtors at the End of the Period
Debtors
Accounts
receivable
Ratio of
totalaccounts
receivable (%)
Aging
Whether
related
Bad Debt
Provision
Tangshan Caofeidian District
Finance Bureau
18207344.00 19.43
Within 3
months
No
Beijing ershang Wangzhihe Food
Co. Ltd
8584555.70 9.16
Within 3
months
Yes
Xilin Gol League hongjingyuan
Oil Co. Ltd
7811500.00 8.33
Within 3
months
No
Shenzhen Green Tea Trading Co.Ltd
7312953.42 7.80
Within 3
months
No
Debtors
Accounts
receivable
Ratio of
totalaccounts
receivable (%)
Aging
Whether
related
Bad Debt
Provision
Tianjin dongyushun Oil Co. Ltd 3182915.70 3.40
Within 3
months
No
Total 45099268.82 48.12 —— —— ——
6. Advanced Payment
(1) Advances are presented by age
Aging
Ending Balance Beginning Balance
Amount Ratio(%) Amount Ratio(%)
Within 1 year (including 1 year) 282123364.15 99.92 138172859.10 99.85
1 to 2 years (including 2 years) 88505.90 0.03 183841.00 0.13
2 to 3 years (including 3 years) 108248.00 0.04 23100.00 0.02
More than 3 years 23100.00 0.01
Total 282343218.05 100.00 138379800.10 100.00
(2) Advance payment of the top five Ending Balances by prepaid objects
Debtor Name Ending Balance
Ratio of the total ending balance of
prepayments (%)
Hong Kong Yuheng Industrial Co. Ltd 211019021.84 74.74
Tianjin Lida grain and Oil Co. Ltd 10606650.00 3.76
Bangji (Taixing) Grain and Oil Co. Ltd 9723430.25 3.44
Louis Dreyfus (Tianjin) International Trade Co. Ltd 7746347.39 2.74
Sinograin Oils Corporation 7544866.13 2.67
Total 246640315.61 87.35
7. Other Receivables
1. Overview
(1) Classification
Item(s) Ending Balance Beginning Balance
Interest Receivable 3927438.90
Item(s) Ending Balance Beginning Balance
Dividend Receivable
Other Receivables 541905656.97 15292658.44
Total 541905656.97 19220097.34
2. Interest Receivable
(1) Interest receivable classification
Item(s) Ending Balance Beginning Balance
Time deposit interest 3927438.90
Loan by mandate
Bond investment
Total 3927438.90
3. Other Receivables
A. Disclosed according to aging
Aging Ending Balance
Within 1 Year (including 1 year) 540101070.14
Among them: Within the credit (within 3 months) 528131439.50
Credit period to 1 year 11969630.64
1 to 2 years (including 2 years) 808105.13
2 to 3 years (including 3 years) 332945.29
3 to 4 years (including 4 years) 370000.00
4 to 5 years (including 5 years)
More than 5 years 350000.00
Total 541962120.56
B. 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 535330041.21 5772303.92
Intercourse Funds of Units 5472834.58 5736772.70
Tax Refund Receivables 302433.21 2366765.34
Employee Receivables 532115.87 600224.88
Personal Intercourse Funds 50000.00 833000.00
Petty Cash 114271.85
Substitute Advance 26638.00
Others 274695.69 80581.58
Total 541962120.56 15530558.27
C. Details about allowance for bad debt
Provision for bad debt
Stage 1 Stage 2 Stage 3
TotalExpected credit loss
in the next 12
months
Expected credit loss
for the whole period
(no credit
impairment)
Expected credit loss for
the whole period (with
credit impairment)
Amount on 1st January 2020 187899.83 50000.00 237899.83
Carrying amount on 1st January
2020 that in this period:
——Get into Stage 2
——Get into Stage 3
——Get back to Stage 2
——Get back to Stage 1
Provision for the period
Reverse for the period 181436.24 181436.24
Transfer for the period
Write off for the period
Other changes
Amount on 31st December 2020 6463.59 50000.00 56463.59
D. Details of bad debt provision
Type Carrying
amount at the
beginning
Amount changes for the period Carrying
amount at
the end
Addi
tion
Withdrawal or
reversal
Write
-off
Other
chan
ges
Credit
impairment
loss 237899.83 181436.24 56463.59
Total 237899.83 181436.24 56463.59
E. Other receivables actually written off in the current period
The company has no other receivables actually written off during the reporting period.
F. Other receivables according to top five of balance at end of period collected by debtors
Name of Organization Nature of Funds
Balance at End of
Period
Aging
Proportion in overall
ending balance of
other receivables (%)
Ending balance
of bad debt
reserves
Haitong Futures Co. Ltd Futures margin
326955685.60
Within 3
months
60.33
Zhongtian Futures Co. Ltd
Futures margin
132505264.40
Within 3
months
24.45
CITIC Futures Co. Ltd
Futures margin
39541813.80
Within 3
months
7.30
Zhongzhou Futures Co. Ltd
Futures margin
17714120.00
Within 3
months
3.27
SDICAnxin Futures Co. Ltd
Futures margin
10408872.80
Within 3
months
1.92
Total — 527125756.60 — 97.27
G. Receivables related to government grants
Name of the grant
company
Name of
government
grants
Carrying amount at
the end
Aging at the end of
the period
Time amount and evidence of expected
collection
Tax Bureau of Linan
DIatrict Hangzhou
Zhejiang Province
Refund of
VAT
302433.21 Within 3 months
All amount will be collected in January
2021 the company always qualify for tax
refund policy for disabled person
Total —— 302433.21 —— ——
8. Inventory
(1) Inventory Category
Items
Ending Balance Beginning Balance
Book Balance
Falling
Price
Reserves
Book Value Book Balance
Falling Price
Reserves
Book Value
Raw
Materials 303448302.51 303448302.51 186791440.87 186791440.87
Items
Ending Balance Beginning Balance
Book Balance
Falling
Price
Reserves
Book Value Book Balance
Falling Price
Reserves
Book Value
Revolving
Materials 5520559.22 5520559.22 6155422.13 6155422.13
Goods and
materials in
transit 36413482.38 36413482.38
Inventory
goods 622783856.56 233790.56 622550066.00 943448494.73 170341.46 943278153.27
Developmen
t costs 2415243.42 2415243.42 18909838.76 18909838.76
Developing
commodities 5315696.54
1539741.6
9 3775954.85 16497730.12
11673694.6
7 4824035.45
Commission
processing 2762633.88 2762633.88 4599271.17 4599271.17
Replacemen
t of oil
reserve 248197500.00 248197500.00 248197500.00 248197500.00
Total
1226857274.5
1
1773532.2
5
1225083742.2
6
1424599697.7
8
11844036.1
3
1412755661.6
5
(2) Inventory Falling Price Reserves and provision for impairment of contract performance costs
Items
Balance at
Beginning of
Year
Increased Amounts in the
Current Period
Decreased Amounts in the Current
Period Balance at End of
Period
Accrual Others
Recover or
Charge Off
Others
Stock Goods 170341.46 63449.10 233790.56
Develop Products 11673694.67 10133952.98 1539741.69
In total 11844036.13 63449.10 10133952.98 1773532.25
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
Items
Ending Balance Beginning Balance
Book Balance
Falling Price
Reserves
Book Value Book Balance
Falling Price
Reserves
Book Value
Items
Ending Balance Beginning Balance
Book Balance
Falling Price
Reserves
Book Value Book Balance
Falling Price
Reserves
Book Value
Grease
and oils 594886731.71
233790.56 594652941.1
5
925286704.1
7
170341.46 925116362.7
1
Food
27880182.78
27880182.78 18160623.35 18160623.35
Others 16942.07 16942.07 1167.21 1167.21
合计 622783856.56
233790.56
622550066.0
0
943448494.7
3
170341.46
943278153.2
7
9. Other Current Assets
Items Balance at End of Period Balance at Beginning of Period
Financial Products 280000000.00 393198608.68
Pre-paid Taxes and Fees 16921026.50 1369643.50
Pending Deduct VAT Input Tax 46701271.74 69764662.41
Fair Value Changes of Items Trapped at
Hedging 501828380.12 95964318.54
In total 845450678.36 560297233.13
10. Long-term Equity Investment
Invested Unit
Balance at
Beginning of Year
Increase or Decrease in the Current Period
Additional
Investment
Negative Investment
Confirmed Profit and Loss on
Investment under Equity Law
1. Cooperative Enterprise
CP Group 72816569.30 18089839.19
Sub-total 72816569.30 18089839.19
2. Joint Venture
China Grain Reserves
(Tianjin) Warehouse
Logistics Co. Ltd. 117636450.78 1964865.65
Jingliang Miss Me Food
Management (Tianjin)
Limited 7848313.71 -512040.84
Sub-total 125484764.49 1452824.81
Total 198301333.79 19542664.00
(Continued)
Increase or Decrease in the Current Period Balance at End
of Period
Ending Balance
of Impairment
Reserves
Adjustment of
other
comprehensive
income
Other
changes in
equity
Announce to
Distribute Case
Dividends or
Profits
Accrual of
Impairment
Reserves
Others
-81510.00 90824898.49
-81510.00 90824898.49
119601316.43
7336272.87
126937589.30
-81510.00 217762487.79
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
Items Buildings Land Use Right
Projects under
Construction
Total
One. Original Book Value 53844801.60 53844801.60
1. Balance at Beginning of Year 42634619.63 42634619.63
2. Increased Amounts in the Current
Period 11210181.97 11210181.97
(1) Outsourcing
(2) Inventory transfer 11182033.58 11182033.58
(3) Others 28148.39 28148.39
3. Decreased Amounts in the Current
Period
(1) Disposal
(2) Other transfer out
4. Balance at End of Period 53844801.60 53844801.60
Two. Accumulated Impairment and
Accumulated Amortization
Items Buildings Land Use Right
Projects under
Construction
Total
1. Balance at Beginning of Year 10399425.17 10399425.17
2. Increased Amounts in the Current
Period 10297367.23 10297367.23
(1) Accrual or Amortization 10297367.23 10297367.23
3. Decreased Amounts in the Current
Period
(1) Disposal
(2) Other transfer out
4. Balance at End of Period 20696792.40 20696792.40
Three. Impairment Reserves
1. Balance at Beginning of Year 453843.72 453843.72
2. Increased Amounts in the Current
Period 10133952.98 10133952.98
(1) Accrual
(2) Inventory transfer 10133952.98 10133952.98
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 22560212.50 22560212.50
2. Book Value at Beginning of Year 31781350.74 31781350.74
13. Fixed Assets
1. Overview
(1) Classification
Items Balance at End of Period Balance at Beginning of Year
Fixed Assets 1131143854.07 1210450340.22
Disposal of Fixed Assets
In total 1131143854.07 1210450340.22
2. Fixed Assets
(1) Fixed Assets Situation
Items Buildings
Machinery
Equipment
Transportation
Equipment
Electronic
Equipment
Office
Equipment
Others Total
One. Original
Items Buildings
Machinery
Equipment
Transportation
Equipment
Electronic
Equipment
Office
Equipment
Others Total
Book Value
1. Balance at
Beginning of
Year
1072321981.43 378411230.58 19545084.11 14918304.67 2158897.13 371548039.27 1858903537.19
2. Increased
Amounts in
the Current
Period
5098428.92 10359999.01 1364968.24 4153708.99 3960.40 5540740.14 26521805.70
(1) Purchase 184850.61 7108991.99 1364968.24 1762305.98 3960.40 4505383.72 14930460.94
(2) Roll-in of
Project under
Construction
4913578.31 3251007.02 1757656.71 1035356.42 10957598.46
(3) Others 633746.30 633746.30
3. Decreased
Amounts in
the Current
Period
268379.92 12841218.01 1426401.32 467491.68 473137.55 15476628.48
(1) Disposal
or Scrap
268379.92 12841218.01 1426401.32 467491.68 473137.55 15476628.48
4. Balance at
End of Period
1077152030.43 375930011.58 19483651.03 18604521.98 2162857.53 376615641.86 1869948714.41
Two.
Accumulated
Impairment
1. Balance at
Beginning of
Year
299179918.09 153988342.69 13256657.54 11374349.35 1442278.04 161541068.22 640782613.93
2. Increased
Amounts in
the Current
Period
39659825.80 34581697.75 1276693.37 1493660.77 112296.33 23716323.60 100840497.62
(1) Accrual 39659825.80 34581697.75 1276693.37 1493660.77 112296.33 23716323.60 100840497.62
3. Decreased
Amounts in
the Current
Period
222503.58 7920605.07 1353588.47 456806.03 449790.54 10403293.69
(1) Disposal
or Scrap
222503.58 7920605.07 1353588.47 456806.03 449790.54 10403293.69
4. Balance at
End of Period
338617240.31 180649435.37 13179762.44 12411204.09 1554574.37 184807601.28 731219817.86
Items Buildings
Machinery
Equipment
Transportation
Equipment
Electronic
Equipment
Office
Equipment
Others Total
Three.Impairment
Reserves
1. Balance at
Beginning of
Year
7499295.92 171287.12 7670583.04
2. Increased
Amounts in
the Current
Period
(1) Accrual
3. Decreased
Amounts in
the Current
Period
85540.56 85540.56
(1) Disposal
or Scrap
85540.56 85540.56
4. Balance at
End of Period
7499295.92 85746.56 7585042.48
Four. Book
Value
1. Book
Value at End
of Period
731035494.20 195194829.65 6303888.59 6193317.89 608283.16 191808040.58 1131143854.07
2. Book
Value at
Beginning of
Year
765642767.42 224251600.77 6288426.57 3543955.32 716619.09 210006971.05 1210450340.22
(2) Fixed assets without property right certificate
Project Book Value Reasons for failure to complete certificate of title
Buildings 2892386.06 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 28458413.67 17876177.78
Engineering materials
Items Balance at End of Period Balance at Beginning of Year
Total 28458413.67 17876177.78
2. Project under Construction
(1) Situation of Project under Construction
Items
Balance at End of Period Balance at Beginning of Year
Book Balance
Impairment
Reserves
Book Value Book Balance
Impairment
Reserves
Book Value
1. roasted potato
supporting automation
line project
6986820.05 6986820.05 459218.39 459218.39
2. Walnut cake
production line of No.2
plant
4780643.33 4780643.33 4457068.09 4457068.09
3. slope treatment
project of No.3 plant
3565377.15 3565377.15 1887688.90 1887688.90
4. add two 4D Corn
Flake production lines
3207668.25 3207668.25
5. 32400 tons of oil
tank and terminal oil
pipeline project
2869993.38 2869993.38
6. 2600bph project of
packaging oil 10L
production line
2809734.52 2809734.52
7. New production line
of small fried compound
potato chips in leisure
No.1 Factory
1784537.82 1784537.82
8. Fried potato chips
automation
transformation project
and others
2453639.17 2453639.17 11072202.40 11072202.40
In total 28458413.67 28458413.67 17876177.78 17876177.78
(2) Change Condition of Important Engineering Projects under Construction in the Current Period
Project Name
Balance at
Beginning of Year
Increased Amounts
in the Current
Period
Roll-in Fixed
Assets Amount in
the Current Period
Other Decreased
Amounts in the
Current Period
Balance at End of
Period
Walnut cake production line of No.2
factory 4457068.09 323575.24 4780643.33
Slope treatment project of No.3
Factory 1887688.90 1677688.25 3565377.15
Project Name
Balance at
Beginning of Year
Increased Amounts
in the Current
Period
Roll-in Fixed
Assets Amount in
the Current Period
Other Decreased
Amounts in the
Current Period
Balance at End of
Period
Two new 4D Corn Flake production
lines 3207668.25 3207668.25
32400 ton oil tank and wharf oil
pipeline project 2869993.38 2869993.38
2600bph project of packaging oil
10L production line 2809734.52 2809734.52
Production line of baked potato
workshop in No.2 factory 848372.58 848372.58
4D stacked Corn Flake production
line 68000.00 68000.00
Extrusion baking Corn Flake
production line 50000.00 50000.00
7 non fried potato chips production
lines 3800000.00 3800000.00
New bar equipment investment
project 1717083.99 131287.03 1848371.02
Renovation project of maishao
packaging automation and blasting
machine 217699.11 9251.52 226950.63
Flame retardant color steel plate for
van room 2764384.39 71866.04 2836250.43
Fire fighting facilities in Van room 974577.28 1102750.60 2077327.88
Total 16784874.34 12203814.83 7728321.91 3800000.00 17460367.26
Note: the other projects in progress with a decrease of 3.8 million yuan in the current period are the first and second
non fried potato chips production lines (first and second in leisure plant) in 2020 and 7 non fried potato production lines
(first and second leisure plants) and the supporting automatic production line of roasted potatoes are all part of the non fried
production line so they are combined into one project.
15. Intangible Assets
(1) Intangible Assets Situation
Items Software Land Use Right Trademark Right Others In total
Items Software Land Use Right Trademark Right Others In total
One Original Book Value
1. Balance at Beginning of Year 3614817.40 316407869.54 154841200.00 689220.00 475553106.94
2. Increased Amounts in the
Current Period 718557.35 718557.35
(1) Purchase 401743.19 401743.19
(2) Internal R&D 316814.16 316814.16
(3) Business mergers increased
3. Decreased Amounts in the
Current Period
(1) Disposal
4. Balance at End of Period 4333374.75 316407869.54 154841200.00 689220.00 476271664.29
Two Accumulated Amortization
1. Balance at Beginning of Year 3376870.13 55021509.60 48321445.83 447.00 106720272.56
2. Increased Amounts in the
Current Period 220888.51 6809478.04 7713925.86 5364.00 14749656.41
(1) Accrual 220888.51 6809478.04 7713925.86 5364.00 14749656.41
3. Decreased Amounts in the
Current Period
(1) Disposal
4. Balance at End of Period 3597758.64 61830987.64 56035371.69 5811.00 121469928.97
Three Impairment Reserves
1. Balance at Beginning of Year 662400.00 662400.00
2. Increased Amounts in the
Current Period
(1) Accrual
3. Decreased Amounts in the
Current Period
(1) Disposal
4. Balance at End of Period 662400.00 662400.00
Four Book Value
1. Book Value at End of Period 735616.11 254576881.90 98805828.31 21009.00 354139335.32
2. Book Value at Beginning of
Year 237947.27 261386359.94 106519754.17 26373.00 368170434.38
16. Goodwill
1. Original Book Value of Goodwill
Name of Invested Unit or
Items Forming Goodwill
Balance at
Beginning of
Increase in the Current Period
Decrease in the Current
Period
Balance at End
of Period
Year Formed by
Enterprise Merger
Others Disposal Others
Acquire stock shares of
Zhejiang Xiaowangzi
Food Co. Ltd.
191394422.51 191394422.51
In total 191394422.51 191394422.51
2. Relevant information about the group or groups of assets that include goodwill
Book value of goodwill Asset group or portfolio of asset groups
Main components Book value Determination
method
Is there any
change in the
current period
191394422.51 Fixed assets investment real estate
intangible assets construction in
progress etc
855866837.0
2
Income method No
tests on the goodwill formed by the acquisition of the equity of Zhejiang Little Prince Food Co. Ltd. The book value of the
asset group including goodwill was 855.87 million yuan and the recoverable amount was no less than 913.17 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 is recoverable 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; ⑤The management of the unit being assessed is responsible stable and capable of performing its duties.3）Key parameter
Item Forecast period
Revenue growth
rate over the
forecast period
Revenue growth
rate over the stable
period
Profit margin
Pre-tax discount
rate
Zhejiang Little Prince
Food Co. Ltd.
2021 to 2025 3.17% 0
Calculated based on
forecasted revenue
costs expenses etc.
16.84%
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.
17. Long-term Unamortized Expenses
Items
Balance at
Beginning of
Year
Increased
Amounts in
the Current
Period
Amortized Amounts
in the Current
Period
Other
Decreased
Amounts
Balance at End
of Period
Reconstruction of majuqiao plant 15562508.21 674188.08 14888320.13
Linan spring garden woodland
rental fees 5083560.00 112968.00 4970592.00
Aisen green treasure company
housing renovation 158659.20 17638.68 141020.52
Ancient coin branch car rental fee 117833.06 23804.07 94028.99
Amortization of laboratory
decoration costs 438613.86 7371.66 431242.20
Information disclosure fee 86477.92 86477.92
Office decoration 17590.58 13192.92 4397.66
Total 21026628.97 438613.86 935641.33 20529601.50
18. Deferred Income TaxAssets/Deferred Income Tax Liabilities
1. Deferred Income Tax Assets Not Being Offset
Items
Balance at End of Period Balance at Beginning of Year
Deductible
Temporary
Difference
Deferred Income Tax
Assets
Deductible
Temporary
Difference
Deferred Income Tax Assets
Asset Impairment Reserves 254446.99 63611.73 190997.89 47749.46
Deductible Loss 30360671.96 7590167.99 31275069.48 7818767.37
Credit impairment Loss 1368158.01 341929.04 1613752.34 400338.47
Deferred Income 10722337.40 2680584.35 1901363.76 475340.94
Valuation of Financial
Instruments and Derivative
Financial Instruments 5687080.00 1421770.00
Credit impairment Loss 5677134.00 1419283.50 8344697.92 2086174.48
In total 48382748.36 12095576.61 49012961.39 12250140.72
2. Details of Deferred Income Tax Liabilities Not Being Offset
Items
Balance at End of Period Balance at Beginning of Year
Taxable Temporary
Difference
Deferred Income Tax
Liabilities
Taxable Temporary
Difference
Deferred Income Tax
Liabilities
Valuation and appreciation of
assets in merger of
enterprises not under the
same control
164849010.97 41212252.73 187755812.28 46938953.07
Valuation of Financial
Instruments and Derivative
Financial Instruments
130600895.97 32652310.83 61988283.56 15497070.89
In total 295449906.94 73864563.56 249744095.84 62436023.96
3. Details of Deferred Income Tax Liabilities after Offset
Items
Offseting amount of
deferred tax assets
and liabilities
Carrying amount after
offsetting between
deferred tax assets and
liabilities
offseting amount of
deferred tax assets and
liabilities at the end of
last period
Carrying amount after
offsetting between
deferred tax assets and
liabilitie at the end of
last period
Deferred tax asset 8748762.34 3346814.27 9647074.34 2603066.38
Deferred tax liabilities 8748762.34 65115801.22 9647074.34 52788949.62
4. Details of Deferred Income Tax Assets Not Being Confirmed
Items Balance at End of Period Balance at Beginning of Year
Deductible Loss 33884.15 29906.20
Deductible temporary differences 100248841.85 80581354.00
In total 100282726.00 80611260.20
5. Deductible loss on deferred income tax assets not being confirmed will be due at the following years
Year Balance at End of Period Balance at Beginning of Year Notes
2020 5769102.97
Year Balance at End of Period Balance at Beginning of Year Notes
2021 4504020.42 4504020.42
2022 4030889.63 4030889.63
2023 19123515.53 19123515.53
2024 47484926.46 47153825.45
2025 25105489.81
Total 100248841.85 80581354.00
19. Other Non-current Assets
Items
Ending Balance Beginning Balance
Book balance
Provision
for
impairment
Book value Book balance
Provision
for
impairment
Book value
Equipment
and Project
Funds
2517240.00 2517240.00 1005300.00 1005300.00
Three-year
term deposit
317222341.67 317222341.67 150000000.00 150000000.00
Total 319739581.67 319739581.67 151005300.00 151005300.00
20. Short-term Borrowings
1. Classification of Short-term Borrowings
Items Balance at End of Period Balance at Beginning of Year
Pledge loan
Mortgage loan
Guaranteed Loan 105088229.17 310000000.00
Fiduciary Loan 1392325849.88 1019238701.60
In total 1497414079.05 1329238701.60
21. Derivative financial liability
Item Ending balance Beginning balance
Changes in fair value of hedging instruments 371219136.84
Total 371219136.84
22. Accounts Payable
1. Accounts Payable Listed
Items Balance at End of Period Balance at Beginning of Year
Material Funds Payable 60908293.40 117367304.89
Project Funds Payable 12181233.26 5013460.24
Items Balance at End of Period Balance at Beginning of Year
Equipment Funds Payable 1182750.00 5511888.97
Others 1111798.73 2675759.33
In total 75384075.39 130568413.43
23. Advance payment
1. Advance payment Listed
Items Balance at End of Period Balance at Beginning of Year
Advance collection of rent 1087874.02 983521.42
In total 1087874.02 983521.42
24. Contract liabilities
1. Classification of contract liabilities
Items Balance at End of Period Balance at Beginning of Year
Loans 341860984.30 466156950.04
Service payment 5013276.60 13825688.07
Others 153301.88
In total 346874260.90 480135939.99
25. Wages Payable
1. List of Wages Payable
Items
Balance at
Beginning of Year
Increase in the
Current Period
Decrease in the
Current Period
Balance at End of
Period
One Short-term Compensation 23995435.46 309847530.49 301744158.24 32098807.71
Two After-service Welfare- Set up ESP
liabilities
1164705.96 10253171.81 10171548.54 1246329.23
Three Dismission Welfare 32442.16 181482.78 213924.94
Four Other benefits due within one year
In total 25192583.58 320282185.08 312129631.72 33345136.94
2. List of Short-term Compensation
Items
Balance at
Beginning of Year
Increase in the
Current Period
Decrease in the
Current Period
Balance at End of
Period
1. Wage Bonus Allowance and
Subsidy
20180061.36 257182401.78 249260667.15 28101795.99
2. Welfare Expense of Employee 60.00 8582309.44 8582349.44 20.00
3. Social Insurance Expense 846432.39 14407129.68 14570419.69 683142.38
Among them: Medical Insurance
Premiums
655966.86 12116675.13 12192941.93 579700.06
Industrial Injury Insurance Premiums 139694.48 321528.25 408903.39 52319.34
Items
Balance at
Beginning of Year
Increase in the
Current Period
Decrease in the
Current Period
Balance at End of
Period
Birth Insurance Premiums 50771.05 655980.86 656033.87 50718.04
Others 1312945.44 1312540.50 404.94
4. Housing Provident Funds 305120.07 13914481.52 13891257.74 328343.85
5. Labor Union Expense and Personnel
Education Fund
2663761.64 4855446.20 4533702.35 2985505.49
6. Short-term Compensated Absences
7. Short-term profit sharing plan
8. Other short-term remuneration 10905761.87 10905761.87
In total 23995435.46 309847530.49 301744158.24 32098807.71
3. List of Stated Drawings Plan
Items
Balance at
Beginning of Year
Increase in the
Current Period
Decrease in the
Current Period
Balance at End of
Period
1. Basic Pension Insurance 1084152.50 7894572.60 7804929.55 1173795.55
2. Unemployment Insurance Expense 46187.77 353003.80 362740.78 36450.79
3. Enterprise Annuity Charges 34365.69 2005595.41 2003878.21 36082.89
Total 1164705.96 10253171.81 10171548.54 1246329.23
26. Taxes and Fees Payable
Items Balance at End of Period Balance at Beginning of Year
Corporate Income Tax 21972563.71 25362765.03
VAT 20557653.24 9856580.09
Urban Maintenance and Construction Tax 1662803.83 780497.63
House Property Tax 2330072.39 2679468.56
Land Use Tax 1203859.39 466291.09
Individual Income Tax 1681176.51 7588240.51
Educational Surtax 663399.57 297757.24
Local Educational Surtax 494409.45 250647.90
Stamp Tax 314395.32 552502.89
Resources Tax 4240.00
Environmental protection tax 3737.44 2600.25
Water conservancy construction fee 143.79 1030.22
In total 50884214.64 47842621.41
27. Other Accounts Payable
1. Overview
(1) Classification
Items Balance at End of Period Balance at Beginning of Year
Interest Payable 21082795.47 24604524.69
Dividends Payable 11013302.88 11013302.88
Other Accounts Payable 40196782.89 60553568.66
In total 72292881.24 96171396.23
2. Interest Payable
(1) Classification
Items Balance at End of Period Balance at Beginning of Year
Interest on long-term loans with interest paid by
installments and principal paid at maturity
Interest payable on short term loans 3521729.22
Loan Interest between Enterprises 21082795.47 21082795.47
In total 21082795.47 24604524.69
3. Dividends Payable
(1) Classification
Items Balance at End of Period Balance at Beginning of Year
Common stock dividends 7800000.00 7800000.00
Others 3213302.88 3213302.88
In total 11013302.88 11013302.88
4. Other Accounts Payable
(1) List of Other Accounts Payable by Nature of Funds
Items Balance at End of Period Balance at Beginning of Year
Loan and Interest 11258346.00
Intercourse Funds of Related Parties 1831079.90 7852823.90
Intercourse Funds between Units 13468108.09 12791535.12
Personal Intercourse Funds 4025881.59 2930547.58
Guaranteed Deposit and Deposit 16271518.35 21235322.03
Various Insurances of Employee 2102370.03 1605759.25
Warehouse and Storage Charges 701645.19
Others 2497824.93 2177589.59
In total 40196782.89 60553568.66
28. Other current liability
1. Other current liability statement
Item End balance Beginning balance
Value-added tax to be written off 8319696.79
Total 8319696.79
29. 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 43582.87
Other Long-term Welfare 5677134.00 5687080.00
In total 5677134.00 5730662.87
30. Deferred Income
Items
Balance at
Beginning of
Year
Increase in the
Current Period
Decrease in the
Current Period
Balance at End
of Period
Cause of Formation
Government Subsidy 71518169.27 633746.30 3435216.23 68716699.34
In total 71518169.27 633746.30 3435216.23 68716699.34 --
Among them， items involving government subsidy
Items Receiving Subsidy
Balance at
Beginning of
Year
Increase in
the Current
Period
Charge to
Non-opera
ting
Income
Charge to
other Profits
Other
changes
Balance at End
of Period
Asset related
/ income
related
Enterprise foundation
supporting in the
construction stage of
"Tianjin Lingang
Industrial Zone
Management Committee"
51206627.7
7
1277504.16 49929123.61 Asset related
Special subsidy for
infrastructure investment
11205178.9
5
908692.05 10296486.90 Asset related
The relocation
compensation
4617165.78 384763.82 4232401.96 Asset related
Tianjin Binhai New
District ’ s Industrially
Technical Renovation and
Park Construction Funds
as well as Expenditures
for Science and
Technology
2314814.69 222222.24 2092592.45 Asset related
Items Receiving Subsidy
Balance at
Beginning of
Year
Increase in
the Current
Period
Charge to
Non-opera
ting
Income
Charge to
other Profits
Other
changes
Balance at End
of Period
Asset related
/ income
related
Special subsidies for
technical upgrading of
production lines
900000.00 450000.00 450000.00 Asset related
Key technology research
and industrialization
project of "moderate
processing" of grain and
oil
856227.08 77838.84 778388.24 Asset related
Construction of provincial
grain reserve information
management system to
form asset entry project
633746.30 633746.30 Asset related
Research and technology
demonstration of green
and clean production
equipment and process for
edible oil
299569.96 56000.04 243569.92 Asset related
Design of electric heating
system for oil tank
118585.04 58195.08 60389.96 Asset related
In total
71518169.2
7
633746.30 3435216.23 68716699.34 --
31. Share Capital
Items
Balance at
Beginning of
Year
Changes in the Current Period（+、-）
Balance at End of
PeriodNew Share
Issue
Share
Donation
Share
Transfer of
Provident
Fund
Others Sub-total
1. Shares with
Restricted
Conditions
214687558.0
0
41159887.00 -48510460.0
0
-7350573.00 207336985.00
(1) State
Shareholding
(2) State-owned
Legal-person
Shareholding
213388058.0
0
-48510460.0
0
-48510460.0
0
164877598.00
(3) Other Domestic
Capital Shareholding
1299500.00 41159887.00 41159887.00 42459387.00
Including:
Domestic
Legal-person
Shareholding
1299500.00 1299500.00
Domestic Natural 41159887.00 41159887.00 41159887.00
Items
Balance at
Beginning of
Year
Changes in the Current Period（+、-）
Balance at End of
PeriodNew Share
Issue
Share
Donation
Share
Transfer of
Provident
Fund
Others Sub-total
Person Shareholding
(4) Foreign
Shareholding
Including: Foreign
Legal-person
Shareholding
Foreign Natural
Person Shareholding
2. Tradable Shares
without Restricted
Conditions
471102806.0
0
48510460.00 48510460.00 519613266.00
(1) RMB Ordinary
Shares
406127806.0
0
48510460.00 48510460.00 454638266.00
(2) Domestically
Listed Foreign
Shares
64975000.00 64975000.00
(3) Listed Foreign
Shares Overseas
(4) Others
In total
685790364.0
0
41159887.00 41159887.00 726950251.00
32. Capital Reserves
Items
Balance at Beginning
of Year
Increase in the
Current Period
Decrease in the
Current Period
Balance at End of
Period
Capital Premium (Stock Premium) 1243731683.62 205757432.13 126601129.37 1322887986.38
Capital Reserves Roll-in Under Original
System 112316357.36 112316357.36
Other Capital Reserves 239624007.21 239624007.21
In total 1595672048.19 205757432.13 126601129.37 1674828350.95
Note: The increase of capital reserve is the net amount of the 25.1149% equity premium of minority shareholders of
Zhejiang Little Prince Food Co. Ltd after deducting the issuing expenses. The decrease of capital reserve is the difference
between the newly acquired long-term equity investment in purchasing minority shareholders' equity of the subsidiary
Zhejiang Little Prince Food Co. Ltd. and the share of net assets that should be continuously calculated since the date of
merger based on the proportion of newly added shares.33. Other Comprehensive Incomes
Items
Amounts Occurred in the Current Period
Balance at
Beginning of
Year
Amounts
Occurred before
Income Tax in
the Current
Period
Less: Other
Comprehensive Incomes
Charged at Earlier Stage
and Current Roll-in Profit
and Loss
Less: included in other
comprehensive income
in the previous period
and transferred to
retained income in the
current period
Less: Income Tax
Expense
Attributable to
Parent Company
After Tax
Attributable to
Minority
Shareholders After
Tax
Balance at End of
Period
One Other
comprehensive incomes
that won’t be classified
into profit and loss
1. Remeasure and set
the change amount of
benefit plan
2. Other comprehensive
income that cannot be
transferred to profits
and losses under the
equity method
3. Changes in the fair
value of other equity
instrument investments
4. Changes in fair value
of the enterprise's own
credit risk
Two Other
comprehensive incomes
that will be classified
into profit and loss
267628.14 -630886.80 -630886.80 -363258.66
1. Other comprehensive
income transferable to
profit and loss under
the equity method
-273702.00 -81510.00 -81510.00 -355212.00
2. Changes in the fair
value of other debt
investments
3. Amount of financial
assets reclassified into
other comprehensive
income
4. Provision for credit
impairment of other
debt investment
5. Effective part of cash
flow hedging
6. Converted difference
between foreign
currency financial
statements
541330.14 -549376.80 -549376.80 -8046.66
Total 267628.14 -630886.80 -630886.80 -363258.66
34. Surplus Reserves
Items
Balance at Beginning
of Year
Increase in the
Current Period
Decrease in the Current
Period
Balance at End of
Period
Statutory Surplus Reserves 84487609.05 84487609.05
Free Surplus Reserves 37634827.93 37634827.93
In total 122122436.98 122122436.98
35. Undistributed Profit
Items Amounts in the Current Period Amounts in the Prior Period
Adjustment on undistributed profit at end of last year 2186806.56 -131155119.19
Adjustment on total number of undistributed profit at
beginning of period (increase+ and decrease-)
Adjusted undistributed profit at beginning of period 2186806.56 -131155119.19
Add: net profit attributable to parent company in the
current period 184846956.70 133341925.75
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 187033763.26 2186806.56
36. Operation Revenue and Operation Cost
1. Operation Revenue and Operation Cost
Items
Amounts in the Current Period Amounts in the Prior Period
Revenue Cost Revenue Cost
Prime Business 8697572481.21 8071341928.74 7391949995.86 6804978163.57
Other Business 44177430.90 19505316.68 48336469.68 9085593.97
In total 8741749912.11 8090847245.42 7440286465.54 6814063757.54
2. Prime Business (Industry and Business-classified)
Name of Industry (or Business)
Amounts in the Current Period Amounts in the Prior Period
Revenue Cost Revenue Cost
Oil and Oil Seeds 7765755097.07 7410229164.25 6428529306.74 6139381151.14
Food Processing 898193522.11 633566522.42 940737948.76 643054491.71
Others 33623862.03 27546242.07 22682740.36 22542520.72
In total 8697572481.21 8071341928.74 7391949995.86 6804978163.57
3. Prime Business (Region-classified)
Name of Region
Amounts in the Current Period Amounts in the Prior Period
Revenue Cost Revenue Cost
Beijing 3710872460.99 3440771897.41 2747243314.18 2397680893.09
Tianjin 3830727489.25 3763990283.10 3281919197.95 3326423104.55
Zhejiang 643672378.87 432673898.28 660855948.74 432813437.59
Shandong 42495190.76 41270102.95 51495923.63 45030001.48
Liaoning 127396208.08 98817141.25 135881783.18 102395375.88
Hebei 342408753.26 293818605.75 514553828.18 500635350.98
In total 8697572481.21 8071341928.74 7391949995.86 6804978163.57
37. Tariff And Annex
Items Amounts in the Current Period Amounts in the Prior Period
Urban Maintenance and Construction Tax 6612721.25 6093645.72
Educational Surtax 2895143.94 2682713.53
Local Educational Surtax 1930095.99 1788475.73
House Property tax 6842452.33 7936929.23
Land Use Tax 2222677.37 2356178.12
Stamp Tax 2582084.39 2731286.14
Vehicle and Vessel Use Tax 40775.71 48509.20
Resources Tax 4790.20 118258.80
Other Taxes and Fees 51780.08 59027.13
In total 23182521.26 23815023.60
38. Sales Expenses
Items Amounts in the Current Period Amounts in the Prior Period
Employee Compensation (including social
security etc) 72069470.68 62457654.45
Sales Promotion Expenses 39131372.82 45368001.12
Transportation Fees 20843864.55
Warehousing Fees 13401508.98 12030169.38
Depreciation 13195597.53 16706266.82
Material consumption sample and product
cost 7457562.25 6401606.55
Travel Expenses 5425245.85 7459494.17
Repair Costs 4741287.38 988553.17
Operation Expenses 4142565.31 3367394.63
Lease fee 2110200.00 2110200.00
Items Amounts in the Current Period Amounts in the Prior Period
Terminal Charges 1769880.36 1781254.51
Water and Electricity Fees 1149996.78 1317285.88
Commodity Wastage 1144468.29 428904.88
Vehicle Fees 653952.78 1078366.27
Packing Expenses 606343.75 1327097.49
Test and Detection Fees 252606.47 267201.08
Business Entertainment Expenses 221142.33 550474.52
Labor Protection Fees 134970.62 79030.24
Commercial Insurance Expenses 9339.62 10435.78
Advertising Expenses 11085644.09
Others 920799.12 567895.16
Total 168538310.92 196226794.74
39. Administration Expenses
Items Amounts in the Current Period Amounts in the Prior Period
Employee Compensation (including social
security etc)
105757801.44 102691365.80
Impairment Costs 21138588.30 18137368.85
Amortization of Assets 15395887.82 16650941.54
Fees of Employing Agent 12011480.46 9421510.94
Company Expenses 4579775.70 4107943.99
Repair Costs 3347098.20 2999695.40
Lease fee 3335385.77 3636177.17
Vehicle Fees 2737975.97 3867315.61
Information Network Fees 2558612.63 1862267.09
Business Entertainment Expenses 1180688.87 1980884.01
Environmental Protection Fees 1031270.41 808496.07
Commercial Insurance Expenses 991422.05 721834.71
Workers Insurance Expenses 970146.22 1263337.27
Security Protection Fees 953250.21 852488.34
Labor Protection Fees 782547.70 340774.62
Office Expenses 740979.84 1653825.87
Material Consumption 545101.54 650553.96
Travel Expenses 409662.51 1582115.44
Consultation Service Fees 224407.55 161320.75
Taxes in Expenses 146246.44 303532.72
Items Amounts in the Current Period Amounts in the Prior Period
Other Expenses 700399.30 2130893.15
In total 179538728.93 175824643.30
40. Research and Development Expenses
Items Amounts in the Current Period Amounts in the Prior Period
Salary 6967316.66 5613787.98
Material consumption 1713717.37 693150.43
Design expense 308142.99 207467.10
Transportation Expense 48507.01 42738.99
Others 865537.90 904544.07
In total 9903221.93 7461688.57
41. Financial Expenses
Items Amounts in the Current Period Amounts in the Prior Period
Interest Expenses 31742996.45 47287539.19
Less: Interest Income 16035923.84 14712048.02
Exchange Profit and Loss 3881862.45 -163503.06
Service Charges 1527207.20 747948.92
In total 21116142.26 33159937.03
42. Other Profits
Items
Amounts in the
Current Period
Amounts in the Prior
Period
Government Subsidy Related to Daily Corporate Activities 15837109.11 20745415.25
Return of Service Charges of Withholding Individual Income Tax 281742.91 64036.13
Refund of VAT and surtax 103652.86
In total 16222504.88 20809451.38
43. Investment Income
Items
Amounts in the Current
Period
Amounts in the Prior
Period
Long-term equity investment income accounted with equity method 19542664.00 7478217.97
Investment income generated from disposing long-term equity investment -357650.19
Investment income obtained during the holding of transactional financial
assets
401460.93 2392808.34
Investment income from disposal of wealth management products 13327294.52 8242426.95
Investment income of disposing trading financial asssets 4097586.02 2340631.67
Others 506874.91
Items
Amounts in the Current
Period
Amounts in the Prior
Period
In total 37875880.38 20096434.74
44. Profits on Changes in Fair Value
Source of generating income with changes in fair value
Amounts in the Current
Period
Amounts in the Prior
Period
Financial assets that are measured as per fair value and for which the
changes are included in the current profit and loss
-16467791.36 11943192.05
Including: income with changes in fair value generated by derivative
financial instruments
-16467791.36 11943192.05
Trading financial liabilities
Investment real estate measured by fair value
In total -16467791.36 11943192.05
45. Credit impairment loss
Items
Amounts in the Current
Period
Amounts in the Prior
Period
Accounts receivable bad debt loss 30273.95 -1191417.76
Other receivables bad debt loss 221436.24 -104250.03
Total 251710.19 -1295667.79
46. Loss fromAsset Devaluation
Items Amounts in the Current Period Amounts in the Prior Period
Loss on Bad Debts
Loss on Inventory Price Drop -63449.10 -32583.96
In total -63449.10 -32583.96
47. Assets Disposal Income
Items
Amounts in the Current
Period
Amounts in the Prior Period
Gains or losses on disposal of fixed assets 38752.37 -2667430.71
Gains or losses on disposal of intangible assets 12052586.13
In total 38752.37 9385155.42
48. Non-operating Income
1. Classification
Items
Amounts in the
Current Period
Amounts in the
Prior Period
Amounts Charged to
Non-recurring Profit
and Loss
Total non current assets retirement gains: 37474.17 37474.17
Including: fixed assets scrap profit 37474.17 37474.17
profit from scrap of intangible assets
Donation Gains 10000.00 10000.00
Government Subsidy 60000.00 60000.00
Asset Inventory Surplus Gains 2.50
Relocation Compensation 159967.20 9351899.02 159967.20
Demand Compensation Income 74975.30 172020.83 74975.30
Other Gains 404172.75 1684640.56 404172.75
In total 746589.42 11208562.91 746589.42
2. Government Subsidy Charged to Non-recurring Profit and Loss
Subsidy projects
Amounts in the
Current Period
Amounts in the
Prior Period
Asset related /
income related
Quality and patent awards in 2020 50000.00 Income related
Relief policy subsidy 10000.00 Income related
Total 60000.00 -
49. Non-operating Expenses
Items
Amounts in the Current
Period
Amounts in the Prior Period
Amounts Charged to
Non-recurring Profit and
Loss
Total loss on scrap of non current assets 457274.93 210659.85 457274.93
Including: loss on scrap of fixed assets 457274.93 210659.85 457274.93
loss on scrap of intangible assets
Donation Expenses 48940.54 5250.00 48940.54
Underground parking 1020523.67 1020523.67
Repayment of loan principal of small
loans 359396.32 359396.32
Relocation Loss 234171.72
Penalty expenditure 2400.26
Compensation 196.47
Others 2009.53 1688885.07 2009.53
Total 1888144.99 2141563.37 1888144.99
50. Income Tax Expenses
(1) List of Income Tax Expenses
Amounts in the Current Period
Amounts in the Prior
Period
Amounts in the Current
Period
Income Tax Expenses of the Current Period 54532194.91 65171407.12
Deferred Income Tax Expenses 11583103.71 15898023.91
Others 66115298.62 81069431.03
(2) Accounting Profit and Income Tax Expense Adjustment Process
Items Amounts in the Current
Period
Amounts in the Prior Period
Total Profits 285339793.18 259707602.14
Income tax expenses calculated by statutory/applicable tax
rate
71334948.30 64926900.54
Effect of subsidiary corporations being applicable to
different tax rates
-947694.04 -772184.46
Adjustment on effect of income tax in the prior period 430220.89 94976.38
Effect of Non-taxable Incomes -3847972.30 -4788633.58
Effect of Non-deductible cost expense and loss 970773.85 12015552.86
Effect of deductible loss on usage of unconfirmed deferred
income tax assets in the prior period
-5783060.94 -308800.54
Effect of deductible temporary difference or deductible
loss on unconfirmed deferred income tax in the current
period
6278648.02 12219210.36
Effect of deductions -2320565.16 -2461970.17
Others 144379.64
Income Tax Expenses 66115298.62 81069431.03
51. 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 33 Other Comprehensive
Incomes’
52. Notes to items related cash flow statement
(1) Receiving other cash related to operation activities
Items
Amounts in the Current
Period
Amounts in the Prior
Period
Intercourse Funds of Related Parties 6059604.42 10772776.17
Intercourse Funds of Other Units 47080919.02 101636552.56
Non-operating Income and other income 14165759.99 2228326.84
Interest Income 15727323.95 12495698.33
Future Margins 874862645.55 505801637.81
Items
Amounts in the Current
Period
Amounts in the Prior
Period
Others 5979776.55 9827734.85
Total 963876029.48 642762726.56
(2) Other Cash Payment Related to Operation Activities
Items
Amounts in the Current
Period
Amounts in the Prior
Period
Intercourse Funds of Related Parties 27810666.27 4628731.15
Intercourse Funds of Other Units 85094941.48 205840325.66
Payment for Administration Expenses 36716789.68 31856659.10
Payment for Operating Expenses 103477595.33 55226822.83
Non-operating Expenses 1435373.86 137198.62
Petty Cash Paid 785283.72 1067049.09
Bank Charges 1527207.20 741832.78
Future Margins 1383095725.00 356196432.00
Others 10217449.20 13079169.86
In total 1650161031.74 668774221.09
(3) Other cash received related to investment activities
Items
Amounts in the Current
Period
Amounts in the Prior
Period
Fixed assets subsidy 960000.00
In total 960000.00
(4) Other cash paid related to financing activities
Items
Amounts in the Current
Period
Amounts in the Prior
Period
Acquisition of minority shareholders' equity of Zhejiang Little Prince 104730266.66
In total 104730266.66
53. Supplementary Materials of Cash Flows Statement
(1) Supplementary Materials of Cash Flows Statement
Supplementary Materials Amounts in the Current
Period
Amounts in the
Prior Period
1. Adjusting net accounting profit to operating cash flow
Net Profit 219224494.56 178638171.11
Add: Assets Impairment Reserves 23449.10 32583.96
Credit impairment loss -211710.19 1295667.79
Supplementary Materials Amounts in the Current
Period
Amounts in the
Prior Period
Fixed Assets Depreciation Oil-and-gas Assets Depreciation and
Productive Biological Assets Depreciation 111137864.85 98222379.13
Amortization of Intangible Assets 14749656.41 15035549.01
Amortization of Long-term Deferred Expenses 935641.33 11894070.59
Losses on Disposal of Fixed Assets Intangible Assets and Other
Long-term Assets (Fill in profit with symbol “－”) -38752.37 -9385155.42
Losses on Retirement of Fixed Assets (Fill in profit with symbol “－”) 419800.76 210659.85
Losses on Changes in Fair Value (Fill in profit with symbol “－”) 16467791.36 -11943192.05
Financial Expenses (Fill in profit with symbol “－”) 31742996.45 47124036.13
Investment Losses (Fill in profit with symbol “－”) -37875880.38 -20096434.74
Decrease in Deferred Income Tax Assets (Fill in increase with symbol
“－”) -743747.89 3080839.42
Increase in Deferred Income Tax Reliabilities (Fill in decrease with
symbol “－”) 12326851.60 12817184.49
Decrease in Inventory (Fill in increase with symbol “－”) 186560389.70 -183379823.18
Decrease in Items of Operating Receivables (Fill in increase with symbol
“－”) -682322952.93 -549567530.18
Increase in Items of Operating Receivables (Fill in decrease with symbol
“－”) -118936802.44 703387788.14
Others
Net Cash Flows from Operating Activities -246540910.08 297366794.05
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
Supplementary Materials Amounts in the Current
Period
Amounts in the
Prior Period
3. Net change conditions in cash and cash equivalents
Cash balance at end of period 334389017.41 555097777.21
Less: cash balance at beginning of period 555097777.21 867870016.78
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 -220708759.80 -312772239.57
(2) Net cash received for disposal of subsidiaries during the current period
Items Amounts
Dispose of cash or cash equivalents received by the subsidiary during the current period
Plus: cash or cash equivalents received in the current period from the disposal of subsidiaries in previous
periods 5000000.00
Among them: Jingliang Xinchuang (Tianjin) Business Management Co. Ltd 5000000.00
Disposal of net cash received by subsidiaries 5000000.00
(3) Composition of cash and cash equivalents
Items Balance at End of Period
Balance at Beginning of
Period
One Cash 334389017.41 555097777.21
Including: cash in stock 16761.72 27780.31
Bank deposit available for payment at any time 298158812.41 553067993.87
Other currency funds available for payment at any time 36213443.28 2002003.03
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 of Period 334389017.41 555097777.21
Including: restricted cash and cash equivalents used by parent
company or intra-group affiliates
54. Assets with restricted ownership or right to use
Items Book Value at End of Period Reasons being Restricted
Currency Funds 1077152.20 Arbitration freezing
Inventory 3775954.85 Loan Mortgage
Investment Real Estate 6222001.73 Loan Mortgage
Fixed Assets 2060096.30 Loan Mortgage
In total 13135205.08 ——
55. Monetary Items of Foreign Currency
(1) Monetary Items of Foreign Currency
Items
Balance of Foreign
Currency at End of Period
Exchange Rate Convert
Balance of Converting to
RMB at End of Period
Monetary fund 774973.43 6.5249 5056624.13
Including: US Dollars 774973.43 6.5249 5056624.13
Accounts receivable 160130.00 6.5249 1044832.24
Including: US Dollars 160130.00 6.5249 1044832.24
Tax payable 15397.40 6.5249 100466.50
Including: US Dollars 15397.40 6.5249 100466.50
Other Payables 58400.00 6.5249 381054.16
Including: US Dollars 58400.00 6.5249 381054.16
(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.
56. Hedging items and related hedging instruments
Please refer to 21. Derivative financial liability under Section VI of the Notes.
57. Government Subsidies
（1）Basic conditions of government grants
Type Amount Presentation item
Amount recorded in profit
and loss
Financial discount for epidemic situation 9874392.47 Financial expenses 9874392.47
VAT return 9719521.14 Other income 9719521.14
Construction of provincial grain reserve
information management system to form asset
entry project 633746.30
Other income
Kunpeng ProgramAward 500000.00 Other income 500000.00
Type Amount Presentation item
Amount recorded in profit
and loss
Subsidies for replacing training with work 455100.00 Other income 455100.00
Land tax relief 286000.02 Other income 286000.02
Subsidy for job stabilization 205416.29 Other income 205416.29
Compensation for coal to gas boiler 200000.00 Other income 200000.00
Financial assistance from the Bureau of
Commerce 131200.00
Other income
131200.00
Reconstruction project of palletizing system
of medium packaging production line 130000.00
Other income
130000.00
Tianjin business port construction subsidy 114147.00 Other income 114147.00
Unemployment management fund 105000.00 Other income 105000.00
Special funds for ecological and
environmental protection 101200.00
Other income
101200.00
Incentive funds for industrial enterprises 90000.00 Other income 90000.00
Online training subsidy 86100.00 Other income 86100.00
Post subsidy for the disabled 99756.57 Other income 99756.57
Quality and patent awards in 2020
50000.00
Non-operating
income 50000.00
Maternity insurance allowance 45158.86 Other income 45158.86
Tax preference for retired soldiers (VAT
preference) 45000.00
Other income
45000.00
Subsidy for low nitrogen combustion
transformation project of gas fired boiler 30000.00
Other income
30000.00
Subsidy for working grain of Commerce
Bureau 30000.00
Other income
30000.00
Development and Reform Bureau 2019 Lin'an
district energy "double control" target
assessment Award 16423.00
Other income
16423.00
Relief policy subsidy
10000.00
Non-operating
income 10000.00
Type Amount Presentation item
Amount recorded in profit
and loss
Enterprise subsidies and Awards 8200.00 Other income 8200.00
Little prince multi patent pea subsidy 2000.00 Other income 2000.00
Grain and oil market information monitoring
fee subsidy 1390.00
Other income
1390.00
Preferential tax control system 280.00 Other income 280.00
Total 22970031.65 22336285.35
VII. Change in Consolidation Scope
The Company has no change in the scope of merger during this reporting period.VIII. Equities in Other Entities
1. Equities in Subsidiaries
(1) Composition of the Company
Name of Subsidiary
Principle
Place of
Business
Registered
Place
Nature of
Business
Shareholding Ratio
(%)
Voting
rights
ratio
(%)
Mode of
Acquisition
Direct Indirect
Beijing Jingliang Food
Co. Ltd.
Beijing Beijing
Investment
management
100 100
Merger under
the same
control
Jingliang (Tianjin) Grain
and Oil Industry Co. Ltd.Tianjin Tianjin
Agricultural
Product and
By Product
Processing
70 70
Merger under
the same
control
Beijing Jingliang Oil and
Fat Co. Ltd.
Beijing Beijing
Grain and oil
trade
100 100
Merger under
the same
control
Jingliang (Hebei) Oil
Industry Co. Ltd.Hebei Hebei
Farm and
Sideline Food
Processing
51 51
Merger under
the same
control
Beijing Guchuan Edible
Oil Co. Ltd.
Beijing Beijing
Grain and oil
trade
100 100
Merger under
the same
control
Beijing Eisen-Lubao Oil
Co. Ltd.
Beijing Beijing
Farm and
Sideline Food
Processing
100 100
Merger under
the same
control
Name of Subsidiary
Principle
Place of
Business
Registered
Place
Nature of
Business
Shareholding Ratio
(%)
Voting
rights
ratio
(%)
Mode of
Acquisition
Direct Indirect
Beijing Tianweikang Oil
Distribution Center Co.
Ltd.
Beijing Beijing Warehousing 100 100
Merger under
the same
control
Beijing Guchuan Bread
Food Co. Ltd.
Beijing Beijing
Food
Processing
100 100
Merger under
the same
control
Zhejiang Xiao Wang Zi
Food Co. Ltd.
Hangzhou Hangzhou
Food
Processing
17.6794 77.2072 94.8866
Combination
not under
same control
Hangzhou Lin'an
Xiaotianshi Food Co.Ltd.Hangzhou Hangzhou
Food
Processing
17.6794 77.2072 94.8866
Combination
not under
same control
Liaoning Xiao Wang Zi
Food Co. Ltd.
Liaoning Liaoning
Food
Processing
17.6794 77.2072 94.8866
Combination
not under
same control
Linqing Xiao Wang Zi
Food Co. Ltd.
Linqing Linqing
Food
Processing
17.6794 77.2072 94.8866
Combination
not under
same control
Lin'an Chunmanyuan
Agricultural Development
Co. Ltd.
Hangzhou Hangzhou
Food
Processing
17.6794 77.2072 94.8866
Combination
not under
same control
Jingliang (Singapore)
International Trade Co.Ltd.Singapore Singapore Grain trade 100 100
Establishment
by investment
Jingliang Rural Complex
Construction and
Operations (Xinyi) Co.Ltd.Xinyi Xinyi
Land
remediation
51 51
Establishment
by investment
Jingliang (Caofeidian)
Agricultural Development
Co. Ltd.
Tangshan Tangshan Plantation 51 51
Establishment
by investment
Beijing jingliang gubi oil
and grease co. LTD
Beijing Beijing
Grain and oil
trade
100 100
Establishment
by investment
(3) Major non-wholly-owned subsidiaries
Name of Subsidiary
Shareholding
Ratio of
Minority
Shareholders
(%)
Voting rights
ratio of
Minority
Shareholders
(%)
Profit And Loss
Attributable to
Minority
Shareholders for
the Current
Period
Dividends
Distributed to
Minority
Shareholders
for the Current
Period
Balance of Minority
Shareholder's Equity
at the End of the
Period
Zhejiang Xiao Wang Zi
Food Co. Ltd.
5.1134 5.1134 15155396.93 1704626.89 48469370.18
Jingliang (Tianjin) Grain
and Oil Industry Co.Ltd.
30 30 18060680.13 265260839.72
Jingliang (Hebei) Oil
Industry Co. Ltd.
49 49 1756853.44 2009000.00 37180745.87
Jingliang (Caofeidian)
Agricultural
Development Co. Ltd.
49 49 1162543.53 25196306.01
(3) Important financial information on major non-wholly-owned subsidiaries
Items
Ending balance or Amount incurred in the current period
Zhejiang Xiao
Wang Zi Food Co.Ltd.Jingliang
(Tianjin) Grain and
Oil Industry Co. Ltd.Jingliang
(Hebei) Oil Industry
Co. Ltd.
Jingliang
(Caofeidian)
Agricultural
Development Co.
Ltd.
Current Assets 348212958.32 1451014894.50 355193589.41 65386539.00
Non-current Assets 636041329.78 784620786.80 83905315.98 267113.52
Total Assets 984254288.10 2235635681.30 439098905.39 65653652.52
Current Liabilities 140227047.42 1283603409.67 361352282.65 14232619.85
Non-current Liabilities 20656022.86 67829472.58 1867549.53
Total Liabilities 160883070.28 1351432882.25 363219832.18 14232619.85
Operating Income 817382788.30 3947727557.55 353156192.23 37886609.79
Net Profit (Loss) 131200734.73 60202267.11 3585415.19 2372537.81
Total Comprehensive
Income 131200734.73 60202267.11 3585415.19 2372537.81
Cash Flow from Operating
Activities 26043033.24 -504494426.93 -16169538.34 -5128929.53
(Continued)
Items Beginning balance or Amount incurred in the prior period
Zhejiang Xiao
Wang Zi Food Co.Ltd.Jingliang
(Tianjin) Grain and
Oil Industry Co. Ltd.Jingliang
(Hebei) Oil Industry
Co. Ltd.
Jingliang
(Caofeidian)
Agricultural
Development Co.
Ltd.
Current Assets 361264401.11 649743907.75 311637220.63 67396596.62
Non-current Assets 509389952.91 818631677.47 87738015.01 556027.91
Total Assets 870654354.02 1468375585.22 399375235.64 67952624.53
Current Liabilities 122737979.36 587965574.01 322979490.79 18904129.67
Non-current Liabilities 22409424.73 56409479.27 2086.83
Total Liabilities 145147404.09 644375053.28 322981577.62 18904129.67
Operating Income 851434597.05 3430996815.48 568997293.50 22700740.36
Net Profit (Loss) 133345867.36 18987188.41 6251969.35 -631304.00
Total Comprehensive
Income
133345867.36 18987188.41 6251969.35 -631304.00
Cash Flow from Operating
Activities
133234182.94 232318428.44 43354962.74 3109638.50
2. Transaction in a subsidiary in which the share of ownership in the subsidiary changes and remains in control
1. Explanation of the changes in the shares of owners' equity in the subsidiary
With the approval of Beijing shounong Food Group Co. Ltd. on the plan of purchasing assets by cash and issuing
shares of Hainan Jingliang Holding Co. Ltd. (jingshounong food Fa [2019] No. 212) Hainan Jingliang Holding Co. Ltd.
Beijing Jingliang Food Co. Ltd. and six natural persons including Wang Yuecheng Shuai Yiwu Yao Zishan Zhu Yanjun
Hong muqiang and Qiu Xiaobin made payment The shareholders' meeting of Zhejiang little prince Food Co. Ltd. formed a
resolution on agreeing to transfer the equity.Jingliang Holding purchased the 17.6794% equity of Zhejiang Little Prince held by Wang Yuecheng by issuing shares
with the transaction consideration of RMB 249017319.14 yuan. Based on the issuing price of RMB 6.05 per share
Jingliang Holding issued 41159887 shares to Wang Yuecheng.
In April 2020 the company issued 41159887 shares to Wang Yuecheng to purchase assets with the approval of the
reply on approving Hainan Jingliang Holding Co. Ltd. to issue shares to Wang Yuecheng (ZJXK [2020] No. 610) issued by
China Securities Regulatory Commission. After the issuance the company directly and indirectly holds 94.8866% equity of
Zhejiang little prince Food Co. Ltd.
2. The impact of the transaction on minority shareholders' equity and equity attributable to the parent company
Items Zhejiang Xiao Wang Zi Food Co. Ltd.
Consideration for purchase cost 353747585.80
Including: cash 104730266.66
Items Zhejiang Xiao Wang Zi Food Co. Ltd.
Fair value of non-cash assets 249017319.14
Total consideration for purchase cost 353747585.80
Less: share of net assets of subsidiaries calculated according to the
proportion of equity acquired 227146456.43
Difference 126601129.37
Including: adjustment of capital reserve 126601129.37
Adjustment of surplus reserve
Adjustment of undistributed profit 353747585.80
3. Equity in Joint Ventures orAffiliates
1. Important Joint Ventures or Affiliates
Name of Joint Venture
or Affiliate
Principle Place
of Business
Registered Place
Nature of
Business
Shareholding Ratio (%) Accounting Treatment
Methods for Investment
in Joint Ventures or
Affiliates
Direct Indirect
One Joint Ventures
1. Beijing Zhengda
Feed Co. Ltd.
Beijing Beijing
Manufact
urer
50.00 Equity method
TwoAffiliates
1. SINOGRAIN
(Tianjin) Warehousing
Logistics Co. Ltd.Tianjin Tianjin
Transport
ation and
warehousi
ng
30.00 Equity method
2. Jingliang Missme
Catering Management
(Beijing) Co. Ltd.
Beijing Beijing
Manufact
urer
48.00 Equity method
2. Important financial information on major joint ventures
Item
Ending Balance/Current Amount Beginning Balance/Last TermAmount
Beijing Zhengda Feed Co. Ltd. Beijing Zhengda Feed Co. Ltd.
Current assets 228921574.13 38402384.29
Including: cash and cash equivalents 95186696.60 2851108.24
Non-current assets 25478642.09 166838127.64
Total assets 254400216.22 205240511.93
Current liabilities 73979867.51 65443549.59
Non-current liabilities 4076166.52
Item
Ending Balance/Current Amount Beginning Balance/Last TermAmount
Beijing Zhengda Feed Co. Ltd. Beijing Zhengda Feed Co. Ltd.
Total liabilities 78056034.03 65443549.59
Minority shareholder's equity
Shareholders' equity attributable to the
parent company
176344182.19 139796962.34
Share of net assets based on
shareholding ratio
88172091.10 69898481.17
Adjustments 2652807.39 2918088.13
-- Goodwill
-- Unrealized profits from internal
transactions
-- Other 2652807.39 2918088.13
Book value of equity investment in
joint ventures
90824898.49 72816569.30
Fair value of equity investment in joint
ventures with open offers
Operating income 336626475.66 269935049.46
Financial costs -3211106.78 -2443395.79
Income tax expense 11205730.33 5150946.69
Net profit 36873259.85 15189299.51
Net profit from discontinued
operations
Other comprehensive income -163020.00 295152.00
Total comprehensive income 36710239.85 15484451.51
Dividends received from joint ventures
in the current period
3. Important financial information on major affiliates
Item
Ending Balance/Current Amount Beginning Balance/Last TermAmount
SINOGRAIN (Tianjin) Warehousing
Logistics Co. Ltd.SINOGRAIN (Tianjin) Warehousing Logistics
Co. Ltd.
Current assets 87560108.46 97971129.85
Non-current assets 407888087.68 384616624.25
Total assets 495448196.14 482587754.10
Current liabilities 24167311.59 10362807.69
Non-current liabilities 72609829.76 80103443.80
Total liabilities 96777141.35 90466251.49
Minority shareholder's equity
Item
Ending Balance/Current Amount Beginning Balance/Last TermAmount
SINOGRAIN (Tianjin) Warehousing
Logistics Co. Ltd.SINOGRAIN (Tianjin) Warehousing Logistics
Co. Ltd.
Shareholders' equity
attributable to the parent
company
398671054.79 392121502.61
Share of net assets based on
shareholding ratio
119601316.43 117636450.78
Adjustments
-- Goodwill
-- Unrealized profits from
internal transactions
-- Others
Book value of equity
investment in affiliates
119601316.43 117636450.78
Fair value of equity investment
in affiliates with open offers
Operating income 36413675.87 28173217.37
Net profit 6549552.18 496163.17
Net profit from discontinued
operations
Other comprehensive income
Total comprehensive income 6549552.18 496163.17
Dividends received from
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 2020
Financial asset
items
Financial assets
measured at
amortized cost
Financial assets measured at
fair value and the changes
recorded in current profits
and losses
Financial assets measured at
fair value and the changes
recorded in other
comprehensive income
Total
Monetary funds 335466169.61 335466169.61
Transactional
financial assets
63478071.73 63478071.73
Derivative
Financial asset
items
Financial assets
measured at
amortized cost
Financial assets measured at
fair value and the changes
recorded in current profits
and losses
Financial assets measured at
fair value and the changes
recorded in other
comprehensive income
Total
financial assets
Notes
receivables
456565.85 456565.85
Accounts
receivables
92245667.60 92245667.60
Other
receivables 541905656.97 541905656.97
Investment in
other equity
instruments 20000000.00 20000000.00
Other
non-current
assets 319739581.67 319739581.67
B. December 31 2019
Financial asset
items
Financial assets
measured at
amortized cost
Financial assets measured at
fair value and the changes
recorded in current profits
and losses
Financial assets measured at
fair value and the changes
recorded in other
comprehensive income
Total
Monetary funds 557168512.39 557168512.39
Transactional
financial assets 161300000.00 161300000.00
Derivative
financial assets 88792254.00 88792254.00
Notes
receivables
Accounts
receivables 80743986.81 80743986.81
Other
receivables 19220097.34 19220097.34
Investment in
other equity
instruments 20000000.00 20000000.00
Other
non-current
assets 151005300.00 151005300.00
(2) Book value of various financial liabilities on the balance sheet date
A. December 31 2020
Financial
liability items
Financial liabilities measured at fair value and
changes included in current profits and losses Other financial liability Total
Short term loans 1497414079.05 1497414079.05
Derivative
financial
liability 371219136.84 371219136.84
Accounts
payable 75384075.39 75384075.39
Other Payables 72292881.24 72292881.24
B. December 31 2019
Financial
liability items
Financial liabilities measured at fair value and
changes included in current profits and losses Other financial liability Total
Short term loans 1329238701.60 1329238701.60
Derivative
financial
liability
Accounts
payable 130568413.43 130568413.43
Other Payables 96171396.23 96171396.23
2. Credit Risk
On December 31 2020 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:
Item
December 31 2020
Within One Year 1 To 5 Years Above Five Years Total
Short term
loans
1497414079.05 1497414079.05
Derivative
financial
liability
371219136.84 371219136.84
Accounts
payable
72075894.39 3308181.00 75384075.39
Other
Payables
72292881.24 72292881.24
(Continued)
Item
December 31 2019
Within One Year 1 To 5 Years Above Five Years Total
Short term
loans
1329238701.60 1329238701.60
Derivative
financial
liability
Item
December 31 2019
Within One Year 1 To 5 Years Above Five Years Total
Accounts
payable
130568413.43 130568413.43
Other
Payables
96171396.23 96171396.23
4. 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 2020 the Company's interest-bearing liabilities under floating rate contracts denominated in RMB
amounted to RMB 319687500.00 and those under fixed rate contracts denominated in RMB amounted to RMB
1176404482.00.
(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 2020 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 5056624.13 6768083.00
Accounts receivable 1044832.24 1590894.85
Accounts payable 134399.21
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 possible reasonable changes in exchange rate on current profits and
losses and rights and interests is as follows:
Item Current period
[US dollar] Exchange rate
Increase / (decrease)
Gross profit/net profit
increase /(decrease)
Increase/(decrease) in
shareholders' equity
The yuan depreciated
against the US dollar
5% 286020.11 286020.11
The yuan appreciated
against the US dollar
-5% -286020.11 -286020.11
Item
Prior period
[US dollar] Exchange rate
Increase / (decrease)
Gross profit/net profit
increase /(decrease)
Increase/(decrease) in
shareholders' equity
The yuan depreciated
against the US dollar
5% 411217.15 411217.15
The yuan appreciated
against the US dollar
-5% -411217.15 -411217.15
X. Disclosure of Fair Values
1. Fair values of assets and liabilities measured at fair value at the end of the period
Item
Fair Values at the End of the Period
First Level Fair
Value Measurement
Second Level
Fair Value
Measurement
Third Level Fair
Value
Measurement
Total
One. Continuous fair value measurement
Ⅰ. Transactional financial assets 63478071.73 63478071.73
1. Financial assets that are measured at
fair value and whose changes are
included in the current profits and losses
63478071.73 63478071.73
(1) Investment in debt instruments 63478071.73 63478071.73
(2) Investment in equity instruments
(3) Derivative financial assets
2. Financial assets designated as fair
value through profit or loss
(1) Investment in debt instruments
(2) Investment in equity instruments
(3) Others
Ⅱ. Other debt investment
Ⅲ . Investment in other equity
instruments
20000000.00 20000000.00
Total assets continuously measured at
fair value
63478071.73 20000000.00 83478071.73
Ⅵ.Transactional financial liabilities 371219136.84 371219136.84
1. Financial liabilities measured at fair
value with changes included in current
profits and losses
371219136.84 371219136.84
Item
Fair Values at the End of the Period
First Level Fair
Value Measurement
Second Level
Fair Value
Measurement
Third Level Fair
Value
Measurement
Total
Including: transactional bonds issued
derivative financial liability 371219136.84 371219136.84
others
2. Financial liabilities designated as fair
value through profit or loss
Total liabilities continuously measured
at fair value
371219136.84 371219136.84
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 parametersThe company‘s investment in other equity instruments of the third level fair value measurement project is the ”threenoes“ equity investment that without control joint control and significant influence held by the company. On the basis ofanalyzing 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
Name of Parent Company Company type Registered Place
Legal
representative
Nature of
Business
Registered Capital
(ten thousand
Yuan)
Beijing Grain Group Co. Ltd.
Wholly
state-owned
enterprise
Beijing
Wang
Zhenzhong
Investment
Management
90000.00
(Continued)
Proportion of Shares Held by Parent
Company in the Company (%)
Proportion of Voting Power
Held by Parent Company in the
Company (%)
The ultimate controlling party
of the Company
Organization code
39.68 39.68
Beijing State-owned Capital
Operation and Management
Center
683551038
3. Subsidiaries of the Company
See 1. Equity in Subsidiaries under Section VIII of the Notes for details.
4. Joint Ventures and Affiliates of the Company
See 3. Equity in Joint Ventures or Affiliates under Section VIII of the Notes for details.
5. Other Related Parties
Name of Other Related Party Relationship with the Company
Beijing Guchun Food Co. Ltd Controlled by the ultimate controlling party
Beijing Sanyuan Food Co. Ltd Controlled by the ultimate controlling party
Beijing Jingliang Dongfang grain and Oil Trading Co. Ltd Controlled by the ultimate controlling party
Beijing Yueshengzhai Halal Food Co. Ltd Controlled by the ultimate controlling party
Beijing ershang dahongmen Meat Food Co. Ltd Controlled by the ultimate controlling party
Shandong Fukuan Bioengineering Co. Ltd Controlled by the ultimate controlling party
Beijing Guchun rice Co. Ltd Controlled by the ultimate controlling party
Beijing ershang Wangzhihe Food Co. Ltd Controlled by the ultimate controlling party
Beijing heiliu animal husbandry technology Co. Ltd Controlled by the ultimate controlling party
Beijing Yanqi Yueshengzhai Halal Food Co. Ltd Controlled by the ultimate controlling party
Hebei Luanping Huadu Food Co. Ltd Controlled by the ultimate controlling party
Beijing Liubiju Food Co. Ltd Controlled by the ultimate controlling party
Beijing ershang Moqi Zhonghong Food Co. Ltd Controlled by the ultimate controlling party
Beijing ershang Jinghua Tea Co. Ltd Controlled by the ultimate controlling party
Beijing Huayu Food Co. Ltd Controlled by the ultimate controlling party
Beijing Wuhuan Shuntong Supply Chain Management Co. Ltd Controlled by the ultimate controlling party
Beijing Huadu liquor Marketing Co. Ltd Controlled by the ultimate controlling party
Beijing Beishui Food Industry Co. Ltd Controlled by the ultimate controlling party
Chengde Sanyuan Venus duck industry Co. Ltd Controlled by the ultimate controlling party
Beijing jinggrain e-commerce Co. Ltd Controlled by the ultimate controlling party
Beijing Er Shang Longhe Food Co. Ltd Controlled by the ultimate controlling party
Beijing Changyang farm Co. Ltd Controlled by the ultimate controlling party
Beijing hundred year old Liyuan Ecological Agriculture Co. Ltd Controlled by the ultimate controlling party
Beijing Er Shang palace Yifu 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
Beijing shounong Supply Chain Management Co. Ltd Controlled by the ultimate controlling party
Hebei shounong Modern Agricultural Technology 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 Zhujun grain and oil supply Co. Ltd Controlled by the ultimate controlling party
Beijing first agricultural consumption poverty alleviation and
Entrepreneurship Center Co. Ltd
Controlled by the ultimate controlling party
Beijing Children soldiers grain and oil supply Co. Ltd Controlled by the ultimate controlling party
Liangguan grain and oil supply station of Beijing Controlled by the ultimate controlling party
Beijing maliandou special supply station Co. Ltd Controlled by the ultimate controlling party
Name of Other Related Party Relationship with the Company
Beijing junchengyuan grain and oil purchase and Marketing Co. Ltd Controlled by the ultimate controlling party
Beijing food supply office No.34 supply department Co. Ltd Controlled by the ultimate controlling party
Beijing Longqing Xiadu military grain supply Co. Ltd Controlled by the ultimate controlling party
Beijing baijiayi Food Co. Ltd Controlled by the ultimate controlling party
Beijing Hongyuan Lijun grain and oil supply Co. Ltd Controlled by the ultimate controlling party
Beijing Desheng Hotel Co. Ltd Controlled by the ultimate controlling party
Beijing jinggrain Real Estate Co. Ltd Controlled by the ultimate controlling party
Beijing jinggrain Logistics Co. Ltd Controlled by the ultimate controlling party
Beijing jinggrain canal grain and Oil Trade Co. Ltd Controlled by the ultimate controlling party
Beijing Shuangta Green Valley Agriculture Co. Ltd Controlled by the ultimate controlling party
Beijing southern suburb agricultural production and Management Co.
Ltd
Controlled by the ultimate controlling party
Beijing Dongcheng sugar industry tobacco and Wine Co. Ltd Controlled by the ultimate controlling party
Beijing North Beijing sugar wine sales Co. Ltd Controlled by the ultimate controlling party
Beijing shounong commercial chain Co. Ltd. Hebei xiong'an branch Controlled by the ultimate controlling party
Beijing Sanyuan Taxi Co. Ltd Controlled by the ultimate controlling party
Beijing Business School Controlled by the ultimate controlling party
Beijing maisui Hotel Management Co. Ltd Controlled by the ultimate controlling party
Beijing shounong Xiangshan Conference Center Co. Ltd Controlled by the ultimate controlling party
Beijing sugar industry tobacco & Wine Group Co. Ltd Controlled by the ultimate controlling party
Beijing grain (Tianjin) e-commerce Co. Ltd Controlled by the ultimate controlling party
Beijing Automobile Service Co. Ltd Controlled by the ultimate controlling party
Beijing shounong Food Group Finance Co. Ltd Controlled by the ultimate controlling party
Beijing dahongmen grain storage Co. Ltd Controlled by the ultimate controlling party
Beijing Dongjiao farm Co. Ltd Controlled by the ultimate controlling party
Beijing aquatic products Co. Ltd Controlled by the ultimate controlling party
Beijing Beijing automobile driving technical school Controlled by the ultimate controlling party
Beijing grain (Tianjin) Trade Development Co. Ltd Controlled by the ultimate controlling party
Beijing Jingliang Xinda Property Management Co. Ltd Controlled by the ultimate controlling party
Beijing Beishui Jialun water products market Co. Ltd Controlled by the ultimate controlling party
Beijing Xicheng sugar industry tobacco and Wine Co. Ltd Controlled by the ultimate controlling party
Beijing jinggrain Industrial Asset Management Co. Ltd Controlled by the ultimate controlling party
Beijing Er Shang Fuyue Food Co. Ltd Controlled by the ultimate controlling party
Beijing Yanqing farm Co. Ltd Controlled by the ultimate controlling party
Beijing Jingliang Taihe Real Estate Co. Ltd Controlled by the ultimate controlling party
Name of Other Related Party Relationship with the Company
Beijing first agricultural Pinggu agricultural science and technology
innovation investment and Development Co. Ltd
Controlled by the ultimate controlling party
Beijing Shunyi grain and Oil Co. Ltd Controlled by the ultimate controlling party
Beijing Longsheng Zhongwang breakfast Co. Ltd Controlled by the ultimate controlling party
Beijing shounong Animal Husbandry Development Co. Ltd Controlled by the ultimate controlling party
Tianjin Hongda international freight forwarding company Controlled by the ultimate controlling party
Beijing Lanfeng Vegetable Distribution Co. Ltd Controlled by the ultimate controlling party
Beijing Jingliang Taiyu Real Estate Co. Ltd Controlled by the ultimate controlling party
Beijing xingfashion Trade Co. Ltd Controlled by the ultimate controlling party
Beijing zhongdairich Property Management Co. Ltd Controlled by the ultimate controlling party
Beijing Huacheng Trading Co. Ltd Controlled by the ultimate controlling party
Beijing haipetrochemical (Tianjin) Co. Ltd Controlled by the ultimate controlling party
Beijing daimo flour Co. Ltd Controlled by the ultimate controlling party
Beijing jinggrain Taixing Real Estate Co. Ltd Controlled by the ultimate controlling party
Beijing milk Co. Ltd Controlled by the ultimate controlling party
Beijing hongbaoyuan Trading Co. Ltd Controlled by the ultimate controlling party
Beijing Grain Group Co. Ltd Controlled by the ultimate controlling party
Beijing Dongfeng International Sports Culture Co. Ltd Controlled by the ultimate controlling party
Beijing grain century cloud Technology Co. Ltd Controlled by the ultimate controlling party
China Ocean Real Estate Co. Ltd Controlled by the ultimate controlling party
Beijing Sanyuan Oil Co. Ltd Controlled by the ultimate controlling party
Beijing sidaokou aquatic products Co. Ltd Controlled by the ultimate controlling party
Beijing Yonghe Xincheng grain and oil supply Co. Ltd Controlled by the ultimate controlling party
Beijing Longde Business Management Co. Ltd Controlled by the ultimate controlling party
Beijing jinggrain Shengyuan grain and Oil Sales Co. Ltd Controlled by the ultimate controlling party
Beijing Daxing National Food Reserve Co. Ltd Controlled by the ultimate controlling party
China Meat Food Research Center Controlled by the ultimate controlling party
Beijing Pinggu grain and oil industry and Trade Co. Ltd Controlled by the ultimate controlling party
Beijing Academy of Food Science Controlled by the ultimate controlling party
Beijing jinggrain Biotechnology Industry Co. Ltd Controlled by the ultimate controlling party
Beijing zhibohui Architectural Design Institute Co. Ltd Controlled by the ultimate controlling party
Beijing Beishui Yongxing water products Sales Co. Ltd Controlled by the ultimate controlling party
Beijing ershang Group Co. Ltd Controlled by the ultimate controlling party
Beijing Er Shang Yihe Sunshine Property Management Co. Ltd Controlled by the ultimate controlling party
Beijing Beijiao farm Co. Ltd Controlled by the ultimate controlling party
Name of Other Related Party Relationship with the Company
Beijing Great Wall Danyu animal products Co. Ltd Controlled by the ultimate controlling party
Beijing grain point to net (Beijing) commerce Co. Ltd Controlled by the ultimate controlling party
Beijing jinggrain Dagu grain and Oil Trade Co. Ltd Controlled by the ultimate controlling party
Shanghai shounong Investment Holding Co. Ltd Controlled by the ultimate controlling party
Beijing Daxing national grain storage Co. Ltd Controlled by the ultimate controlling party
Beijing Nanyuan vegetable oil factory Co. Ltd Controlled by the ultimate controlling party
Feed branch of Beijing Sanyuan Seed Industry Technology Co. Ltd Controlled by the ultimate controlling party
Hebei shounong Modern Agricultural Technology Co. Ltd Controlled by the ultimate controlling party
6. Related-party Transactions
1. Related-party transactions for purchasing and saling goods and provision and acceptance of labor services
(1) Purchase of goods or acceptance of labor services
Related Party
Related-party
Transaction
Current Amount Last TermAmount
Beijing Guchun Food Co. Ltd Purchase of goods 13155894.06 13274529.45
Beijing Sanyuan Food Co. Ltd Purchase of goods 1400066.43 316219.35
Beijing Jingliang Dongfang grain and Oil
Trading Co. Ltd
Purchase of goods
524008.25
158104.64
Beijing Yueshengzhai Halal Food Co. Ltd Purchase of goods 461453.98 111127.87
Beijing ershang dahongmen Meat Food Co.
Ltd
Purchase of goods
403578.27
101205.53
Shandong Fukuan Bioengineering Co. Ltd Purchase of goods 164147.79 1218650.72
Beijing Guchun rice Co. Ltd Purchase of goods 136622.01 1644568.82
Beijing ershang Wangzhihe Food Co. Ltd Purchase of goods 110429.56 87887.76
Beijing heiliu animal husbandry technology
Co. Ltd
Purchase of goods
99883.20
Beijing Yanqi Yueshengzhai Halal Food Co.
Ltd
Purchase of goods
49702.65
Hebei Luanping Huadu Food Co. Ltd Purchase of goods 29341.09
Beijing Liubiju Food Co. Ltd Purchase of goods 24407.26 69868.58
Beijing ershang Moqi Zhonghong Food Co.
Ltd
Purchase of goods
23314.69
3173.10
Beijing ershang Jinghua Tea Co. Ltd Purchase of goods 21165.31
Beijing Huayu Food Co. Ltd Purchase of goods 15250.80
Related Party
Related-party
Transaction
Current Amount Last TermAmount
Beijing Wuhuan Shuntong Supply Chain
Management Co. Ltd
Purchase of goods
10912.84
31796.95
Beijing Huadu liquor Marketing Co. Ltd Purchase of goods 9557.52
Beijing Beishui Food Industry Co. Ltd Purchase of goods 6466.97 23237.58
Chengde Sanyuan Jinxing duck industry Co.
Ltd
Purchase of goods 6194.50
Beijing Jingliang e-commerce Co. Ltd Purchase of goods 4424.78
Beijing ershang Longhe Food Co. Ltd Purchase of goods 1781.15 35615.04
Beijing Changyang farm Co. Ltd Purchase of goods 1470.00
Beijing Bainian Liyuan Ecological Agriculture
Co. Ltd
Purchase of goods 1210.00
Beijing ershang gongyifu Food Co. Ltd Purchase of goods 92.04 70286.43
Beijing shounong Food Group Co. Ltd Display fee 600000.00
(2) Sale of goods/ provision of labor services
Related Party
Related-party
Transaction
Current Amount Last TermAmount
Beijing ershang Wangzhihe Food Co. Ltd Sale of goods 71047922.42 7384328.98
Feed branch of Beijing Sanyuan Seed Industry
Technology Co. Ltd
Sale of goods
31339925.94 21335658.32
Beijing shounong Supply Chain Management Co. Ltd Sale of goods 29226266.13 2784256.97
Hebei shounong Modern Agricultural Technology Co.Ltd
Sale of goods
14233603.95 14391575.42
Beijing Haidian Xijiao grain and oil supply station Co.
Ltd
Sale of goods
15886751.23 12209419.51
Beijing Guchun Food Co. Ltd Sale of goods 5605452.37 2521048.16
Beijing Zhujun grain and oil supply Co. Ltd Sale of goods 5097181.62 6889083.61
Beijing first agricultural consumption poverty alleviation
and Entrepreneurship Center Co. Ltd
Sale of goods
2916212.83
Beijing Jingliang Dongfang grain and Oil Trading Co.
Ltd
Sale of goods
4114303.41 6752881.06
Beijing Children soldiers grain and oil supply Co. Ltd Sale of goods 3366280.71 3366310.21
Beijing Wuhuan Shuntong Supply Chain Management
Co. Ltd
Sale of goods
2200674.09 2623304.40
Related Party
Related-party
Transaction
Current Amount Last TermAmount
Liangguan grain and oil supply station of Beijing Sale of goods 2706388.99
Beijing maliandou special supply station Co. Ltd Sale of goods 2757335.78 3139992.55
Beijing junchengyuan grain and oil purchase and
Marketing Co. Ltd
Sale of goods
1986543.12 1881534.61
Beijing food supply office No.34 supply department Co.
Ltd
Sale of goods
3381064.38 1509710.74
Beijing huaduyukou poultry Co. Ltd Sale of goods 1539631.42
Beijing Longqing Xiadu military grain supply Co. Ltd Sale of goods 859559.64 363175.15
Beijing Guchun rice Co. Ltd Sale of goods 803839.21 713247.71
Beijing baijiayi Food Co. Ltd Sale of goods 478710.09 537436.35
Beijing Hongyuan Lijun grain and oil supply Co. Ltd Sale of goods 735871.56 635017.51
Beijing Sanyuan Food Co. Ltd Sale of goods 470695.16 418081.94
Beijing Desheng Hotel Co. Ltd Sale of goods 418648.14
Beijing Jingliang e-commerce Co. Ltd Sale of goods 711015.24 1011202.58
Beijing jinggrain Real Estate Co. Ltd Sale of goods 272473.94 260904.42
Beijing jinggrain Logistics Co. Ltd Sale of goods 314747.04 46842.97
Beijing jinggrain canal grain and Oil Trade Co. Ltd Sale of goods 214732.03 233836.12
Huairou Brewing Factory of Beijing Liubiju Food Co.Ltd
Sale of goods
174678.90
Beijing Shuangta Green Valley Agriculture Co. Ltd Sale of goods 126330.20
Beijing southern suburb agricultural production and
Management Co. Ltd
Sale of goods
75831.20
Beijing Dongcheng sugar industry tobacco and Wine Co.
Ltd
Sale of goods
47375.16
Beijing North Beijing sugar wine sales Co. Ltd Sale of goods 56197.83 69201.68
Beijing shounong commercial chain Co. Ltd. Hebei
xiong'an branch
Sale of goods
41834.86
Beijing Sanyuan Taxi Co. Ltd Sale of goods 40733.94
Beijing Business School Sale of goods 38680.73
Beijing maisui Hotel Management Co. Ltd Sale of goods 33636.44 31872.10
Beijing shounong Xiangshan Conference Center Co. Ltd Sale of goods 30227.89 64267.89
Beijing sugar industry tobacco & Wine Group Co.
Ltd
Sale of goods
23759.35
Beijing grain (Tianjin) e-commerce Co. Ltd Sale of goods 40309.51 113831.89
Beijing ershang Longhe Food Co. Ltd Sale of goods 17860.54 30510.27
Beijing ershang gongyifu Food Co. Ltd Sale of goods 17256.88 89716.61
Related Party
Related-party
Transaction
Current Amount Last TermAmount
Beijing Automobile Service Co. Ltd Sale of goods 17064.22
Beijing shounong Food Group Finance Co. Ltd Sale of goods 16517.02
Beijing dahongmen grain storage Co. Ltd Sale of goods 13694.23 6789.00
Beijing Dongjiao farm Co. Ltd Sale of goods 12235.66
Beijing aquatic products Co. Ltd Sale of goods 11908.26 8678.51
Beijing Beijing automobile driving technical school Sale of goods 11681.42
Beijing grain (Tianjin) Trade Development Co. Ltd Sale of goods 10560.00
Beijing Jingliang Xinda Property Management Co. Ltd Sale of goods 9993.09 12120.37
Beijing Beishui Jialun water products market Co. Ltd Sale of goods 7871.56 4244.86
Beijing Xicheng sugar industry tobacco and Wine Co.
Ltd
Sale of goods
7678.90
Beijing jinggrain Industrial Asset Management Co. Ltd Sale of goods 7032.19 3669.71
Beijing Er Shang Fuyue Food Co. Ltd Sale of goods 6844.03
Beijing Yanqing farm Co. Ltd Sale of goods 5504.58 3000.00
Beijing Jingliang Taihe Real Estate Co. Ltd Sale of goods 4441.36 4489.04
Beijing first agricultural Pinggu agricultural science and
technology innovation investment and Development Co.Ltd
Sale of goods
4441.36
Beijing Shunyi grain and Oil Co. Ltd Sale of goods 4353.98
Beijing Longsheng Zhongwang breakfast Co. Ltd Sale of goods 3697.25 1830.27
Beijing shounong Animal Husbandry Development Co.
Ltd
Sale of goods
3522.95 13002.86
Tianjin Hongda international freight forwarding company Sale of goods 3520.00
Beijing Lanfeng Vegetable Distribution Co. Ltd Sale of goods 3035.32
Beijing Jingliang Taiyu Real Estate Co. Ltd Sale of goods 2960.91 2244.51
Beijing xingfashion Trade Co. Ltd Sale of goods 2697.25 16438.70
Beijing Liubiju Food Co. Ltd Sale of goods 2522.94 2727.27
Beijing zhongdairich Property Management Co. Ltd Sale of goods 2311.93
Related Party
Related-party
Transaction
Current Amount Last TermAmount
Beijing Huacheng Trading Co. Ltd Sale of goods 2295.42 5863.63
Beijing haipetrochemical (Tianjin) Co. Ltd Sale of goods 2112.00
Beijing shounong Food Group Co. Ltd Sale of goods 4346.76
Beijing daimo flour Co. Ltd Sale of goods 1850.57 2244.51
Beijing jinggrain Taixing Real Estate Co. Ltd Sale of goods 1850.57
Beijing Yueshengzhai Halal Food Co. Ltd Sale of goods 1834.86
Beijing milk Co. Ltd Sale of goods 1785.32 2400.00
Beijing hongbaoyuan Trading Co. Ltd Sale of goods 1656.64
Beijing Grain Group Co. Ltd Sale of goods 1651.37
Beijing Dongfeng International Sports Culture Co. Ltd Sale of goods 1610.09
Beijing grain century cloud Technology Co. Ltd Sale of goods 740.24
China Ocean Real Estate Co. Ltd Sale of goods 366.97
Beijing Sanyuan Oil Co. Ltd Sale of goods 286.24
Beijing sidaokou aquatic products Co. Ltd Sale of goods 161.47
Beijing Yonghe Xincheng grain and oil supply Co. Ltd Sale of goods 1011374.44
Beijing Longde Business Management Co. Ltd Sale of goods 77727.27
Beijing jinggrain Shengyuan grain and Oil Sales Co. Ltd Sale of goods 72318.18
Beijing Daxing National Food Reserve Co. Ltd Sale of goods 18927.28
Beijing shounong Food Group Co. Ltd Sale of goods 14954.20
China Meat Food Research Center Sale of goods 11348.18
Beijing Pinggu grain and oil industry and Trade Co. Ltd Sale of goods 2672.73
Beijing Academy of Food Science Sale of goods 140000.00 6708.36
Beijing jinggrain Biotechnology Industry Co. Ltd Sale of goods 8886.11
Beijing Sanyuan Oil Co. Ltd Sale of goods 1428.60
Beijing zhibohui Architectural Design Institute Co. Ltd Sale of goods 9545.45
Beijing Beishui Yongxing water products Sales Co. Ltd Sale of goods 780.53
Beijing ershang dahongmen Meat Food Co. Ltd Sale of goods 2800.00
Related Party
Related-party
Transaction
Current Amount Last TermAmount
Beijing ershang Group Co. Ltd Sale of goods 1506.90
Beijing Er Shang Yihe Sunshine Property Management
Co. Ltd
Sale of goods
9688.07
Beijing Beijiao farm Co. Ltd Sale of goods 4896.79
Beijing Great Wall Danyu animal products Co. Ltd Sale of goods 2877.05
Beijing grain point to net (Beijing) commerce Co. Ltd Sale of goods 2025.69
Beijing Guchun Food Co. Ltd Provision of services 98481.29
Beijing Academy of Food Science Provision of services 141633.74 48207.55
Beijing Grain Group Co. Ltd Provision of services 574150.93
Beijing shounong Food Group Co. Ltd Provision of services 799999.97
Beijing jinggrain Dagu grain and Oil Trade Co. Ltd Provide technical
services 245377.35
Shanghai shounong Investment Holding Co. Ltd Storage fee 23867.92
Beijing Guchun Food Co. Ltd Trademark royalty 2959185.29 3136541.91
Beijing Guchun rice Co. Ltd Trademark royalty 192513.09 226419.63
Beijing Jingliang Dongfang grain and Oil Trading Co.
Ltd
Trademark royalty
3874.42 5282.64
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.
2. Related-party lease
(1) If the Company is the lessor
Name of
Lessee
Type of
Leased Asset
Lease start
date
Lease
termination date
Pricing
basis of rental
income
Lease Income
Recognized in the
Current Period
Lease
Income
Recognized in the
Prior Period
Beijing
Guchuan Food
Co. Ltd.
House leasing January 1 2020
December 31
2020 Market price 13333333.30 13333333.30
Beijing
Jingliang
E-commerce
Co. Ltd.
Warehouse
leasing
January 1 2020
December 31
2020
Market price
664311.28 459905.62
Name of
Lessee
Type of
Leased Asset
Lease start
date
Lease
termination date
Pricing
basis of rental
income
Lease Income
Recognized in the
Current Period
Lease
Income
Recognized in the
Prior Period
Beijing
Jingliang
E-commerce
Co. Ltd
Vehicle leasing January 1 2020
December 31
2020
Market price
22530.26 22530.26
Total -- -- -- -- 14020174.84 13815769.18
① If the Company is the lessee
Name of Lessee Type of Leased Asset
Pricing basis of rleasing
fee
Lease Expense
Recognized in the
Current Period
Lease Expense
Recognized in the
Prior Period
Beijing Daxing National
Grain Purchasing & Storage
Warehouse
House leasing Market price 2110200.00 1935963.30
Beijing Jingliang Real Estate
Limited
House leasing
Market price
1297946.86 1408464.67
Beijing Grain Group Co. Ltd. House leasing Market price 1075575.22 629912.61
Beijing Nanyuan Plant Oil
Factory
323809.52
Total -- -- 4483722.08 4298150.10
3. Related-party guarantee
Beijing Jingliang Food Co. Ltd. a subsidiary of the company is the guaranteed party
Guaranteed Party
Amount
Guaranteed
Effective Date Due Date
Whether
the Guarantee
Has Been
Fulfilled
Beijing Grain Group Co. Ltd
70000000.00
March 26 2020 March 25 2021 No
4. Remuneration for key management staff
Item
Current Amount (Unit: ten
thousand yuan)
Last Term Amount (Unit: ten
thousand yuan)
Remuneration for Key Management Staff 528.28 715.23
7. Related-party Receivables and Payables
(1) Receivables
Item Related-party
Ending Balance Beginning Balance
Book Balance Provision
for Bad
Debts
Book Balance Provision
for Bad
Debts
Item Related-party
Ending Balance Beginning Balance
Book Balance Provision
for Bad
Debts
Book Balance Provision
for Bad
Debts
Monetary
funds
Beijing shounong Food Group Finance Co.
Ltd
158585719.53 326474443.01
Receivables Beijing ershang Wangzhihe Food Co. Ltd 8584555.70
Beijing shounong consumption poverty
alleviation and Innovation Center Co. Ltd
3178672.00
Beijing shounong Supply Chain
Management Co. Ltd
1965569.85
2880252.00
Feed branch of Beijing Sanyuan Seed
Technology Co. Ltd
1544618.10
1938842.06
Hebei shounong Modern Agricultural
Technology Co. Ltd
1473919.32
1579153.54
Beijing Haidian Xijiao grain and oil supply
station Co. Ltd
1420904.00
7800.00
Beijing Zhujun grain and oil supply Co.
Ltd
1598080.00
981204.00
Beijing Junyuan grain and oil purchasing
and Marketing Co. Ltd
1009912.00
148800.00
Beijing Jingliang Dongfang grain and Oil
Trading Co. Ltd
914231.75
1122310.00
Beijing Liangguan grain and oil supply
Co. Ltd
672100.00
Beijing Guchun Food Co. Ltd 330872.00 139100.00
Beijing Wuhuan Shuntong Supply Chain
Management Co. Ltd
147000.00
289880.00
Beijing food supply department No.34
supply department Co. Ltd
83260.00
Beijing Jingliang e-commerce Co. Ltd 56600.00 238918.00
Beijing zidibing grain and oil supply Co.
Ltd
29106.00
Beijing baijiayi Food Co. Ltd 23100.00 110400.00
Beijing shounong Xiangshan Conference
Center Co. Ltd
5250.00
Beijing Beishui Yongxing aquatic products
Sales Co. Ltd
882.00
Beijing ershang gongyifu Food Co. Ltd 17226.00
Beijing Guchun rice Co. Ltd 11397.00
Item Related-party
Ending Balance Beginning Balance
Book Balance Provision
for Bad
Debts
Book Balance Provision
for Bad
Debts
Beijing Beishui Jialun aquatic products
market Co. Ltd
2856.00
Beijing aquatic products Co. Ltd 2688.00
(2) Payables
Item Related-party Ending Balance Beginning balance
Short-term loans
Beijing shounong Food Group Finance
Co. Ltd 170000000.00
Payables Beijing Guchun Food Co. Ltd 293871.55
Beijing Jingliang Dongfang grain and Oil
Trading Co. Ltd 20641.00
Beijing Sanyuan Food Co. Ltd 13677.70
Beijing Yanqi Yueshengzhai Halal Food
Co. Ltd 1922.50
Beijing Changyang farm Co. Ltd 1470.00
Beijing Jingliang Dongfang grain and Oil
Trading Co. Ltd 33.03
Beijing ershang dahongmen Meat Food
Co. Ltd 11176.11
Beijing Wuhuan Shuntong Supply Chain
Management Co. Ltd 10495.41
Advance receipts Beijing Jingliang e-commerce Co. Ltd 153301.88
Beijing Wuhuan Shuntong Supply Chain
Management Co. Ltd 7524.00
Other payables Beijing Jingliang Group Co. Ltd 1712270.30 1137030.30
Beijing Jingliang e-commerce Co. Ltd 118809.60 444268.80
Beijing Nanyuan vegetable oil factory
Co. Ltd 50360.92
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
Important contingencies on the balance sheet date
1. In the case of guarantee contract dispute between Jingliang holdings and Chongqing longjinbao Network Technology
Co. Ltd. (hereinafter referred to as longjinbao) and Shanghai Oulan enterprise management center (general partnership)
(hereinafter referred to as Oulan Center) Sichuan Provincial Higher People's court made (2019) CMC No. 58 civil judgment
on January 26 2021 rejecting the claims of the plaintiffs longjinbao and Oulan center If you are not satisfied with the
judgment you may submit an appeal to this court within 15 days from the date of service of the judgment. Longjinbao and
Oulan center filed an appeal to the Supreme People's Court on February 20 2020. As of the date of this report the second
instance has not yet been heard.
According to the agreement on material assets replacement and issue of shares to purchase assets the agreement on
delivery of assets in material assets reorganization signed by the company and the former controlling shareholders and the
relevant parties in the process of material assets reorganization and the relevant commitments issued by the relevant parties
in the process of material assets reorganization any third party shall pay to the company the additional liabilities that are not
disclosed and actually undertaken by the company and exceed those recorded in the financial statements on the base date
Any claim or demand put forward by the company shall be settled and borne by the original controlling shareholder or its
designated subject. For details please refer to the company's website on August 1 2017（ www.cninfo.com.cn ）Hainan
Pearl River Holding Co. Ltd. major asset replacement and issue shares to purchase assets and raise matching funds and
related party transactions report (Revised Version) disclosed on the. Therefore the company does not expect the above
matters to have a significant impact on the company's current or future profits.2. The company's subsidiary Beijing Jingliang Food Co. Ltd. as the guarantor is as follows:
Guaranteed Party Amount Guaranteed Actual guarantee amount Effective Date Due Date
Whether the
Guarantee Has
Been Fulfilled
Beijing Jingliang Oil
and Fat Co. Ltd.
200000000.00 8279500.00 September 22 2020
The guarantee period shall be two years from the
date of the expiration of the principal creditor's rights.No
Beijing Jingliang Oil
and Fat Co. Ltd.
175000000.00 May 9 2020
From the date of drawing or actual occurrence of
the first financing under the financing letter to two years
after the maturity date of the latest one of all the
financing provided by the bank during the occurrence of
the guaranteed debt under the financing letter.No
Beijing Jingliang Oil
and Fat Co. Ltd.
35000000.00 35000000.00 May 20 2020 2 years No
Beijing Jingliang Oil
and Fat Co. Ltd.
100000000.00 April 24 2020
Two years from the date of maturity of the
guaranteed debt
No
Beijing Jingliang Oil
and Fat Co. Ltd.
500000000.00 16988200.00 April 18 2020
Effective from the date of deliberation and
approval of the general meeting of shareholders in 2019
to the date of convening the general meeting of
shareholders in 2020
No
Jingliang (Singapore) 220000000.00 22819200.00 April 18 2020 Effective from the date of deliberation and No
Guaranteed Party Amount Guaranteed Actual guarantee amount Effective Date Due Date
Whether the
Guarantee Has
Been Fulfilled
International Trade Co.Ltd.approval of the general meeting of shareholders in 2019
to the date of convening the general meeting of
shareholders in 2020
Jingliang (Tianjin)
Grain and Oil Industry
Co. Ltd.
300000000.00 April 17 2020
From the date of signing the agreement on
designated delivery warehouse (designated warehouse)
of Dalian Commodity Exchange to two years after the
termination of the agreement on designated delivery
warehouse (designated warehouse) of Dalian
Commodity Exchange.
No
Jingliang (Singapore)
International Trade Co.Ltd.
268000000.00 March 8 2019 2 years after the maturity of the principal debt Yes
Jingliang (Singapore)
International Trade Co.Ltd.
241500000.00 68388000.00 June 11 2019 2 years after the maturity of the principal debt No
XIV. Events after the Balance Sheet Date
1. Distribution of Profits
As of the financial report date of the company the 13th meeting of the ninth board of directors in 2021 approved that
no profit distribution will be conducted in 2020 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
income 900954870.93 7807584596.58 39068297.62 -5857853.02 8741749912.11
Operating costs 634070590.38 7422438475.16 33344346.49 993833.39 8090847245.42
Operating profit 174173301.85 228636812.48 179945497.27 -296274262.85 286481348.75
Net profit
attributable to
parent company 135635955.55 193095816.27 179283431.81 -323168246.93 184846956.70
Total assets 1071951853.43 6941985318.78 2755064358.64 -5073497037.12 5695504493.73
Total liabilities 166422649.66 3305490897.89 324723775.01 -1200306332.19 2596330990.37
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)
Aging Ending Balance
2 to 3 years (including 3 years)
3 to 4 years (including 4 years) 3000.00
4 to 5 years (including 5 years) 51420.00
More than 5 years 72000.00
Total 126420.00
（2）Disclosed according to the method of provision for bad debt
Type(s)
Ending Balance
Book Balance Bad Debt Provision
Book Value
Amount Ratio(%) Amount
Provision
Ratio(%)
Separate provision for bad debts
Portfolio provision for bad debts 126420.00 100.00 114636.00 90.68 11784.00
Among them: aging portfolio 126420.00 100.00 114636.00 90.68 11784.00
Total 126420.00 -- 114636.00 -- 11784.00
（Continued）
Type(s)
Beginning Balance
Book Balance Bad Debt Provision
Book Value
Amount Ratio(%) Amount
Provision
Ratio(%)
Separate provision for bad debts
Portfolio provision for bad debts 126420.00 100.00 83910.00 66.37 42510.00
Among them: aging portfolio 126420.00 100.00 83910.00 66.37 42510.00
Total 126420.00 -- 83910.00 -- 42510.00
Portfolio provision for bad debts:
Portfolio provision item: aging portfolio
Name
Ending Balance Beginning Balance
Accounts
receivable
Bad Debt
Provision
Provision
Ratio
Accounts
receivable
Bad Debt
Provision
Provision
Ratio
Within 1 Year (including 1
Name
Ending Balance Beginning Balance
Accounts
receivable
Bad Debt
Provision
Provision
Ratio
Accounts
receivable
Bad Debt
Provision
Provision
Ratio
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)
3000.00 600.00 20.00
3 to 4 years (including 4
years)
3000.00 1500.00 50.00 51420.00 25710.00 50.00
4 to 5 years (including 5
years)
51420.00 41136.00 80.00 72000.00 57600.00 80.00
More than 5 years 72000.00 72000.00 100.00
Total 126420.00 114636.00 126420.00 83910.00
(3) Details of bad debt provision
Type Carrying amount at
the beginning
Amount changes for the period Carrying amount
at the endAddition Withdrawal
or reversal
Write-off Other changes
Bad debt
provision
83910.00 30726.00 114636.00
Total 83910.00 30726.00 114636.00
（4）Accounts Receivable of the Top 5 Balances Collected by Debtors at the End of the Period
Debtors
Book
balance
Ratio of the total
balance of
accounts
receivable
(%)
Aging
Is it
related
Bad
debt
provision
Hainan pearl river pipe pile co.
LTD
108000.00 85.43
3-4 years 4-5 years more
than 5 years
No 99900.00
Ceibs agricultural qinhuangdao
development co. LTD
18420.00 14.57 4-5years No 14736.00
Total 126420.00 100.00 —— —— ——
2. Other Receivables
1. Overview
(1) Classification
Item Ending Balance Beginning Balance
Interest receivable
Dividends receivable
Other receivables 103341.26 12612756.48
Total 103341.26 12612756.48
2. Other Receivables
(1) Disclosed according to aging
Aging Ending Balance
Within 1 Year (including 1 year) 3333.00
Among them: Within credit period (within 3 months) 3333.00
Credit period to 1 year
1 to 2 years (including 2 years) 105271.85
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 50000.00
Total 158604.85
(2) Classification of other receivables by nature of funds
Nature of Funds Book Balance at End of Period
Book Balance at Beginning
of Year
Intercourse Funds of Units 3333.00 12200000.00
Employee Receivables 18590.07
Personal Intercourse Funds 50000.00
Petty Cash 105271.85 105271.85
Others 341000.00
Total 158604.85 12664861.92
(3) Details about allowance for bad debt
Provision for bad debt Stage 1 Stage 2 Stage 3 Total
Expected credit loss
in the next 12
months
Expected credit loss
for the whole period
(no credit
impairment)
Expected credit loss
for the whole period
(with credit
impairment)
Amount on January 1 2020 2105.44 50000.00 52105.44
Carrying amount on January
1 2020 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 3158.15 3158.15
Reverse for the period
Transfer for the period
Write off for the period
Other changes
Carrying amount at the end
of the period 5263.59 50000.00 55263.59
(4) Details of bad debt provision
Type
Carrying
amount at the
beginning
Amount changes for the period
Carrying amount
at the end
Additio
n
Withdrawal
or reversal
Write
-off
Other
change
s
Bad debt
provision
52105.44 3158.15 55263.59
Total 52105.44 3158.15 55263.59
(5) Other receivables actually written off in the current period
The Company has no other receivables actually written off in the current period.
(6) Other receivables according to top five of balance at end of period collected by debtors
Name of Organization Nature of Funds
Balance at End of
Period
Aging
Proportion in overall
ending balance of other
receivables (%)
Ending balance of
bad debt reserves
Song Wang Personal payments 50000.00
More than 5
years
31.52
50000.00
Yan Yan Reserve fund 46000.00 1-2 years 29.00 2300.00
Pai Feng Reserve fund 26671.80 1-2 years 16.82 1333.59
Zhongwei Cui Reserve fund 14007.40 1-2 years 8.83 700.37
Guangjie Huang Reserve fund 10005.00 1-2 years 6.31 500.25
Total —— 146684.20 —— 92.48 54834.21
3. Long-term Equity Investment
Item
Ending Balance Beginning Balance
Book Balance
Provision
for
Impairme
nt
Book Value Book Balance
Provisio
n for
Impairm
ent
Book Value
Investment in
subsidiaries
2626437846.24 2626437846.24 2377420527.10 2377420527.10
Total 2626437846.24 2626437846.24 2377420527.10 2377420527.10
(1) Investment in subsidiaries
Invested Entity
Beginning
Balance
Current
Increase
Curre
nt
Decr
ease
Ending Balance
Current
Provision
for
Impairme
nt
Ending
Balance of
Provision for
Impairment
Beijing Jingliang
Food Co. Ltd. 2336639964.05 2336639964.05
Zhejiang little prince
Food Co. Ltd 249017319.14 249017319.14
Jingliang rural
complex construction
and operation (Xinyi)
Co. Ltd 15280563.05 15280563.05
Jingliang
(Caofeidian)
Agricultural
Development Co.
Ltd.
25500000.00 25500000.00
Total 2377420527.10 249017319.14 2626437846.24
4. Operating income and operating costs
1. Details of operating income and operating costs
Item
Current Amount Last TermAmount
Income Cost Income Cost
Core business
Other businesses 1181687.83 2190925.69
Total 1181687.83 2190925.69
5. Income from investment
Sources of investment income Current Amount Last TermAmount
Long term equity investment income calculated by
cost method
205893687.32
Others 506874.91
Total 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 reported
1. Details of non-recurring profit and loss in the reporting period
Details of non-recurring profit and loss Amouont Note
(1) Gains and losses on disposal of non current assets -381048.39
(2) Government subsidies included in the current profits and losses (closely
related to the business of the enterprise except the government subsidies
enjoyed according to the national unified standard quota or quantitative)
16051980.44
(3) In addition to the effective hedging business related to the normal business
of the company the profit and loss from changes in fair value arising from
holding trading financial assets derivative financial assets trading financial
liabilities and derivative financial liabilities as well as the investment income
from the disposal of trading financial assets derivative financial assets
trading financial liabilities derivative financial liabilities and other debt
investments
18333216.38
(4) Other non-operating income and expenses other than the above -781754.81
(5) Other profit and loss items that meet the definition of non recurring profit
and loss
103652.86
Details of non-recurring profit and loss Amouont Note
Total non recurring profit and loss 33326046.48
Less: amount affected by income tax 8331511.62
Non recurring profit and loss after deducting the influence of income tax 24994534.86
Including: non recurring profit and loss attributable to the owner of the parent
company
20809219.11
Non recurring profit and loss attributable to minority shareholders 4185315.75
2. Return on equity and earnings per share
Current Profit
Weighted Return on
Average Equity (ROAE)
(%)
EPS
Basic EPS Diluted EPS
Net profit attributable to the Company's common
shareholders
7.17 0.26 0.26
Net profit attributable to common shareholders after
deduction of non-recurring gains and losses
6.36 0.23 0.23
Hainan Jingliang Holdings Co. Ltd.
27 March 2021
沪公网安备31011802005267号
