Hainnan Jingliang Holdings Co.,Ltd. Semi-annual Report 2019
HAINAN JINGLIANG HOLDINGS CO., LTD.
SEMI-ANNUAL REPORT 2019
August , 2019
Hainnan Jingliang Holdings Co.,Ltd. Semi-annual Report 2019
HAINAN JINGLIANG HOLDINGS CO., LTD.
SEMI-ANNUAL REPORT 2019Part I Important Notes
This Summary is based on the full text of the 2019 Semi-annual Report of Hainan Jingliang Holdings Co., Ltd.(together with its consolidated subsidiaries, the “Company”, except where the context otherwise requires). Inorder for a full understanding of the Company’s operating results, financial condition and future developmentplans, investors should carefully read the aforesaid full text, which has been disclosed together with this Summaryon the media designated by the China Securities Regulatory Commission (the “CSRC”).All the Company’s Directors have attended the Board meeting for the review of this Report and its summary.This Summary has been prepared in both Chinese and English. Should there be any discrepancies ormisunderstandings between the two versions, the Chinese version shall prevail.Independent auditor’s modified opinion:
□ Applicable √ Not applicable
Board-approved interim cash and/or stock dividend plan for ordinary shareholders:
□ Applicable √ Not applicable
The Company has no interim dividend plan, either in the form of cash or stock.Board-approved interim cash and/or stock dividend plan for preferred shareholders:
□ Applicable √ Not applicable
Part II Key Corporate Information
1. Stock Profile
| Stock name | JLKG, JL-B | Stock code | 000505, 200505 | |
| Stock exchange for stock listing | Shenzhen Stock Exchange | |||
| Contact information | Board Secretary | Securities Representative | ||
| Name | Zhao Yinhu | |||
| Office address | Jing Liang Building, 16 East Third Ring Middle Road, Chaoyang District, Beijing | |||
| Tel. | 010-51672029 | |||
| E-mail address | 593374748@qq.com | |||
Hainnan Jingliang Holdings Co.,Ltd. Semi-annual Report 2019
2. Key Financial Information
Indicate by tick mark whether there is any retrospectively restated datum in the table below.
□ Yes √ No
| H1 2019 | H1 2018 | Change (%) | |
| Operating revenue (RMB) | 3,283,277,725.39 | 3,639,625,979.41 | -9.79% |
| Net profit attributable to the listed company’s shareholders (RMB) | 51,510,904.41 | 59,918,995.68 | -14.03% |
| Net profit attributable to the listed company’s shareholders before exceptional gains and losses (RMB) | 41,194,473.59 | 57,359,036.51 | -28.18% |
| Net cash generated from/used in operating activities (RMB) | 220,592,294.21 | 45,694,542.88 | 382.75% |
| Basic earnings per share (RMB/share) | 0.08 | 0.09 | -11.11% |
| Diluted earnings per share (RMB/share) | 0.08 | 0.09 | -11.11% |
| Weighted average return on equity (%) | 2.24% | 2.73% | -0.49% |
| 30 June 2019 | 31 December 2018 | Change (%) | |
| Total assets (RMB) | 5,173,875,154.65 | 4,917,148,996.28 | 5.22% |
| Equity attributable to the listed company’s shareholders (RMB) | 2,324,031,774.36 | 2,272,469,925.43 | 2.27% |
3. Shareholders and Their Shares at Period-End
Unit: share
| Number of ordinary shareholders | 40,642 | Number of preferred shareholders with resumed voting rights (if any) | 0 | ||||||
| Top 10 shareholders | |||||||||
| Name of shareholder | Nature of shareholder | Shareholding percentage | Number of shares | Restricted shares | Pledged or frozen shares | ||||
| Status | Shares | ||||||||
| BEIJING GRAIN GROUP CO., LTD. | State-owned legal person | 42.06% | 288,439,561 | 164,877,598 | |||||
| BEIJING STATE-OWNED CAPITAL OPERATION AND MANAGEMENT CENTER | State-owned legal person | 7.07% | 48,510,460 | 48,510,460 | |||||
| CHINA DEVELOPMENT BANK CAPITAL CO., LTD. | State-owned legal person | 2.97% | 20,393,051 | 0 | |||||
| LI SHERYN ZHAN MING | Foreign natural person | 2.69% | 18,443,600 | 0 | |||||
| GOLD BUFFALO RUNYING (TIANJIN) EQUITY INVESTMENT FUND MANAGEMENT CO., LTD.—GOLD BUFFALO RUNYING (TIANJIN) EQUITY | Other | 2.20% | 15,116,472 | 0 | |||||
Hainnan Jingliang Holdings Co.,Ltd. Semi-annual Report 2019
| INVESTMENT FUND (L.P.) | ||||||
| MEI JIANYING | Domestic natural person | 0.38% | 2,604,203 | 0 | ||
| HU TIANGAO | Domestic natural person | 0.34% | 2,356,052 | 0 | ||
| ZHANG XIAOXIA | Domestic natural person | 0.28% | 1,949,250 | 0 | ||
| WANG XIAOXING | Domestic natural person | 0.25% | 1,742,700 | 0 | ||
| WANG HANGYI | Domestic natural person | 0.24% | 1,666,000 | 0 | ||
| Connected or acting-in-concert parties among shareholders above | Beijing State-Owned Capital Operation and Management Center owns 100% ownership of Beijing Grain Group Co., Ltd., and Beijing Grain Group Co., Ltd. owns 42.06% shares of the company.. Apart from that, the Company does not know whether there are any other related parties or acting-in-concert parties among the top 10 shareholders. | |||||
| Shareholders conducting margin trading (if any) | 1. Shareholder Wang Xiaoxing holds 1,742,700 shares in the Company through his account of collateral securities for margin trading in Soochow Securities Co., Ltd. 2. Shareholder Hu Tiangao holds 338,000 shares in the Company through his account of collateral securities for margin trading in Zheshang Securities Co., Ltd., and 2,018,052 shares in the Company through his ordinary securities account. 3. Shareholder Wang Hangyi holds 333,000 shares in the Company through his account of collateral securities for margin trading in Zheshang Securities Co., Ltd., and 1,333,000 shares in the Company through his ordinary securities account. | |||||
4. Change of Controlling Shareholder or Actual Controller in Reporting PeriodChange of the controlling shareholder in the Reporting Period:
□ Applicable √ Not applicable
The controlling shareholder remained the same in the Reporting Period.Change of the actual controller in the Reporting Period:
□ Applicable √ Not applicable
The actual controller remained the same in the Reporting Period.
5. Numbers of Preferred Shareholders and Shareholdings of Top 10 of Them
□ Applicable √ Not applicable
No preferred shareholders in the Reporting Period.
6. Corporate bonds
Does the Company have any corporate bonds publicly offered and listed on the stock exchange, which were unduebefore the date of this Report’s approval or were due but could not be redeemed in full?
Hainnan Jingliang Holdings Co.,Ltd. Semi-annual Report 2019No.Part III Operating Performance Discussion and Analysis
1. Business Overview of Reporting Period
Is the Company subject to any industry-specific disclosure requirements?No.
(1) Overall Performance
In the first half of 2019, the company faces a serious operating enviroment. On one hand, the oils and oilseedsdivision of the Company took a heavier hit from the China-U.S trade war, with tough operating desicions andincreasing operating cost. On the another hand, as for the African swine fever (ASF), SBM market demand isweak, which directly impact on the performance of oils and oilseed division with relatively low sales. For thisperiod, the Company recorded operating revenue of RMB3,283 million, down 9.79% year-on-year; and profits ofRMB87.37 million, representing a 20.25% decline from a year ago. By operating division, the food divisionreported operating revenue of RMB452 million (a year-on-year growth of 7.60%) and profits of RMB88.99million (a 31.84% year-on-year expansion); and the oils and oilseeds division generated operating revenue ofRMB2,831 million (an 11.61% year-on-year decrease) and profits of RMB9.18 million (an 86.62% year-on-yeardecrease).
(2) Performance of the Oils and Oilseeds Division
With effect on the China-U.S. trade war and ASF, especially oil crushing business,the Company had to turn toimports from South America and reserved soybeans for raw materials for its oils pressing business due to the tradewar. Meanwhile, the decreasing domestic prices of soybean oil and meal severely squeezed profit of the oilsprocessing business and caused a loss in this business, which had a direct impact on the performance of the oilsand oilseeds division. Sale of oils in small packages and oils and oilseeds trading progressed steadily as plannedby the Board of the Company at the beginning of the year, with stable sales volumes of high added value productssuch as sunflower seed oil, camelina seed oil, olive oil and non-GMO soybean oil, as well as a further optimizedproduct mix.
(3) Performance of the Food Production Division
The food production division achieved a profit of RMB88.99 million, increasing 31.84% year-on-year despite thecontinuous influx of strategic competing products and the increased competition in the retail sales market,
Hainnan Jingliang Holdings Co.,Ltd. Semi-annual Report 2019maintaining a steady development momentum. The snack food business adhered to the “differentiated asymmetriccompeting strategy”, deepened the model of “professional production + cultural creativity + Internet”, and madegreat effort on the strategy of quality products and product transitions. During the Reporting Period, this businessrealized operating revenue of RMB405 million, increasing 4.80% year-on-year, and a profit of RMB85.91 million,increasing 30.32% year-on-year. The baking business focused on expanding custom and branded products to keeppace with market demand. During the Reporting Period, this business realized operating revenue of RMB48.02million, increasing 38.94% year-on-year, and a profit of RMB3.08 million, increasing 97.47% year-on-year.
(4) Performance of the Land Restoration Division
The Company is currently engaged in two land restoration projects, namely, the Jiangsu Xinyi Yaowan Townproject and the Tangshan Caofeidian project. After the ownership change, the Xinyi Yaowan Town project starteda new round of research and analysis on the project planning. The Tangshan Caofeidian project went on smoothly.Currently in the construction stage, this project is expected to include another 1,183 mu of farmland.
2. Matters Related to Financial Reporting
(1) Changes in Accounting Policies, Accounting Estimates or Measurement Methods Compared to LastAccounting Period
√ Applicable □ Not applicable
① The Ministry of Finance issued from 31 March 2017 the revised versions of certain accounting standards,including the Accounting Standard No. 22 for Business Enterprises—Recognition and Measurement of FinancialInstruments (CK [2017] No. 7), the Accounting Standard No. 23 for Business Enterprises—Transfer of FinancialAssets (CK [2017] No. 8), the Accounting Standard No. 24 for Business Enterprises—Hedge Accounting (CK[2017] No. 9), and the Accounting Standard No. 37 for Business Enterprises—Presentation of FinancialInstruments (CK [2017] No. 14), which were required to be applied, from 1 January 2019, to enterprises listeddomestically in China.
② The Ministry of Finance issued in May 2019 the revised versions of the Accounting Standard No. 7 forBusiness Enterprises—Exchange of Non-Monetary Assets (CK [2019] No. 8) and the Accounting Standard No. 12for Business Enterprises—Debt Restructuring (CK [2019] No. 9), which were required to be applied, from 10 and17 June 2019 respectively, to enterprises adopting China’s Accounting Standards for Business Enterprises.
Hainnan Jingliang Holdings Co.,Ltd. Semi-annual Report 2019
(2) Retrospective Restatements due to Correction of Material Accounting Errors in Reporting Period
□ Applicable √ Not applicable
No such cases.
(3) Changes in Scope of Consolidated Financial Statements Compared to Last Accounting Period
√ Applicable □ Not applicable
As reviewed by the 27th meeting of the 8th Board of the Company, the Company’s wholly-owned subsidiaryBeijing Jingliang Food Co., Ltd. was agreed to incorporate Beijing Jingliang Gu Bi Oils Co., Ltd. with RMB50million. Beijing Jingliang Gu Bi Oils Co., Ltd. was registered with the industrial and commercial administrationon 7 May 2019 and therefore included in the consolidated financial statements of the Reporting Period.Part IV Financial ReportI. Audit ReportIs the semi-annual report audited?
□ Yes √ No
The semi-annual financial report has not been audited.
II. Financial StatementsThe unit of financial statements in notions is RMB yuan.
Hainnan Jingliang Holdings Co.,Ltd. Semi-annual Report 2019
1. Consolidated Balance Sheet
Organization Unit: Hainan Jingliang Holdings Co., Ltd.
June 30, 2019
Unit: Yuan
| Program | June 30, 2019 | 31 December, 2018 |
| Current Assets: | ||
| Monetary Capital | 662,196,984.69 | 924,870,016.78 |
| Deposit Reservation for Balance | ||
| Lending Funds | ||
| Transactional Monetary Assets | ||
| The financial assets that are measured at fair value and the changes are included in current profits and losses. | ||
| Derivative Financial Assets | 58,421,469.00 | 71,260,414.60 |
| Notes Receivable | ||
| Account Receivable | 92,400,224.12 | 97,775,710.11 |
| Receivables Financing | ||
| Advance Payment | 138,065,524.84 | 120,181,442.89 |
| Receivable Premium | ||
| Reinsurance Accounts Receivable | ||
| Provision of Cession Receivable | ||
| Other Receivables | 44,773,393.44 | 18,256,513.93 |
| Including: The Interest Receivable | 3,199,806.95 | 2,400,877.51 |
| Dividend Receivable | ||
| Redemptory Monetary Capital for Sale | ||
| Inventory | 1,099,248,108.72 | 1,224,186,963.07 |
| Contract Assets | ||
| Holding Assets to be Sold. | ||
| Non Current Assets Expiring within One Year | ||
| Other Current Assets | 910,653,871.75 | 288,821,816.63 |
| Total Current Assets | 3,005,759,576.56 | 2,745,352,878.01 |
| Non-current Assets: | ||
| offer loans and make advance | ||
| Lending Investments | ||
| Available-for-Sale Financial Assets | 20,000,000.00 | |
| Other Investment on Bonds | ||
| Held-to-Maturity Investment | ||
| Long-term Receivables | ||
| Long-term Equity Investment | 185,669,644.32 | 182,827,226.11 |
| Investment in other equity instruments | 20,000,000.00 | |
| Other non-current financial assets | ||
| Investment Property | 32,588,226.23 | 33,395,101.68 |
Hainnan Jingliang Holdings Co.,Ltd. Semi-annual Report 2019
| Fixed Assets | 1,255,394,465.99 | 1,271,803,080.56 |
| Construction in progress | 23,919,886.30 | 37,369,757.78 |
| Productive Biological Asset | ||
| Oil and Gas Assets | ||
| Right-of-Use Asset | ||
| Intangible Assets | 374,298,421.29 | 383,382,527.68 |
| Development Expenditure | ||
| Goodwill | 191,394,422.51 | 191,394,422.51 |
| Long-term Unamortized Expenses | 24,161,942.12 | 34,671,018.22 |
| Deferred Tax Asset | 30,573,369.33 | 15,330,980.14 |
| Other Non-current Assets | 30,115,200.00 | 1,622,003.59 |
| Non-current Assets in Total | 2,168,115,578.09 | 2,171,796,118.27 |
| Total Assets | 5,173,875,154.65 | 4,917,148,996.28 |
| Current Liability: | ||
| Short-term Borrowing | 1,593,532,494.10 | 1,437,715,080.91 |
| Borrowing from the Central Bank | ||
| Borrowing Funds | ||
| Transactional Moneytary Liabilities | ||
| The financial liabilities that are measured at fair value and the changes are included in current profits and losses. | ||
| Derivative Financial Liabilities | ||
| Notes Payable | ||
| Accounts Payable | 191,662,878.39 | 140,564,713.11 |
| Account Collected in Advance | 117,127,396.25 | 145,317,064.18 |
| Financial Assets Sold for Repurchase | ||
| Deposits from Customers and Interbank | ||
| Receivings from Vicariously Traded Securities | ||
| Receivings from Vicariously Sold Securities | ||
| Employee Pay Payable | 13,690,528.10 | 31,494,568.05 |
| Tax Payable | 27,575,740.15 | 35,783,819.84 |
| Other payables | 164,157,301.47 | 111,288,708.99 |
| Including: The Payable Interest | 25,298,027.68 | 26,972,826.90 |
| Dividends Payable | 18,267,759.97 | 11,197,317.01 |
| Handling Charges and Commissions Payable | ||
| Dividend Payable for Reinsurance | ||
| Contract Liabilities | ||
| Holding Liabilities to Be Sold | ||
| Non Current Liabilities Expiring within One Year | ||
| Other current liabilities | 11,100,915.25 | |
| Total Current Liabilities | 2,107,746,338.46 | 1,913,264,870.33 |
| Non-Current Liabilities: | ||
| Provision for Insurance Contracts |
Hainnan Jingliang Holdings Co.,Ltd. Semi-annual Report 2019
| Long-Term Loan | ||
| Bonds payable | ||
| Including: Preference Shares | ||
| Perpetual Capital Securities | ||
| Lease Obligation | ||
| Long-term account payable | ||
| Long-term employee pay payable | 40,245,406.52 | 40,245,406.52 |
| Anticipation liabilities | ||
| Deferred Revenue | 73,235,777.42 | 74,953,385.51 |
| Deferred Income Tax Liabilities | 60,932,994.98 | 49,618,839.47 |
| Other Non-current Liabilities | ||
| Total Non-current Liabilities | 174,414,178.92 | 164,817,631.50 |
| Total Liabilities | 2,282,160,517.38 | 2,078,082,501.83 |
| Owners Equity: | ||
| Capital stock | 685,790,364.00 | 685,790,364.00 |
| Other equity instruments | ||
| Including: Preference Shares | ||
| Perpetual Capital Securities | ||
| Capital reserve | 1,595,711,805.31 | 1,595,711,805.31 |
| Minus: Treasury Stock | ||
| Other Comprehensive Income | 51,382.85 | 438.33 |
| Reasonable Reserve | ||
| Surplus reserves | 122,122,436.98 | 122,122,436.98 |
| Generic Risk Reserve | ||
| Undistributed profit | -79,644,214.78 | -131,155,119.19 |
| Total equity attributable to the shareholders of parent company | 2,324,031,774.36 | 2,272,469,925.43 |
| Minority Equity | 567,682,862.91 | 566,596,569.02 |
| Total owners' equity | 2,891,714,637.27 | 2,839,066,494.45 |
| Total liabilities and owner's equity | 5,173,875,154.65 | 4,917,148,996.28 |
Legal representative: Li Shaoling Financial Director: Guan Ying Director of Accounting Institutions: Liu Quanli
2. Balance sheet of parent company
Unit: Yuan
| Program | June 30, 2019 | December, 31, 2018 |
| Current Assets: | ||
| Monetary Capital | 9,077,656.91 | 13,597,659.66 |
| Transactional Monetary Assets | ||
| The financial assets that are measured at fair value and the changes are included in current profits and losses. | ||
| Derivative Financial Assets | ||
| Notes Receivable | ||
| Account Receivable | 74,460.00 | 79,986.00 |
| Receivables Financing | ||
| Advance Payment | 74,220.00 | 20,000.00 |
Hainnan Jingliang Holdings Co.,Ltd. Semi-annual Report 2019
| Other Receivables | 12,472,102.45 | 227,353.10 |
| Including: The Interest Receivable | ||
| Dividend Receivable | ||
| Inventory | 4,824,035.45 | 4,824,035.45 |
| Contract Assets | ||
| Holding Assets to be Sold. | ||
| Non Current Assets Expiring within One Year | ||
| Other Current Assets | 21,342,479.01 | 1,962,371.32 |
| Total Current Assets | 47,864,953.82 | 20,711,405.53 |
| Non-current Assets: | ||
| Lending Investments | ||
| Available-for-Sale Financial Assets | 20,000,000.00 | |
| Other Investment on Bonds | ||
| Held-to-Maturity Investment | ||
| Long-term Receivables | ||
| Long-term Equity Investment | 2,377,420,527.10 | 2,375,639,964.05 |
| Investment in other equity instruments | 20,000,000.00 | |
| Other non-current financial assets | ||
| Investment Property | 5,627,576.03 | 5,778,794.33 |
| Fixed Assets | 3,202,409.24 | 3,260,620.04 |
| Construction in progress | ||
| Productive Biological Asset | ||
| Oil and Gas Assets | ||
| Right-of-Use Asset | ||
| Intangible Assets | 119,748.42 | 171,069.18 |
| Development Expenditure | ||
| Goodwill | ||
| Long-term Unamortized Expenses | 133,647.76 | 180,817.60 |
| Deferred Tax Asset | ||
| Other Non-current Assets | ||
| Non-current Assets in Total | 2,406,503,908.55 | 2,405,031,265.20 |
| Total Assets | 2,454,368,862.37 | 2,425,742,670.73 |
| Current Liability: | ||
| Short-term Borrowing | ||
| Transactional Moneytary Liabilities | ||
| The financial liabilities that are measured at fair value and the changes are included in current profits and losses. | ||
| Derivative Financial Liabilities | ||
| Notes Payable | ||
| Accounts Payable | ||
| Account Collected in Advance | 38,896.41 | 38,896.41 |
| Contract Liabilities | ||
| Employee Pay Payable | 303,774.93 | 438,195.96 |
| Tax Payable | 980,706.10 | 976,458.68 |
Hainnan Jingliang Holdings Co.,Ltd. Semi-annual Report 2019
| Other payables | 500,322,646.64 | 449,947,050.56 |
| Including: The Payable Interest | 21,082,795.47 | 21,082,795.47 |
| Dividends Payable | 3,213,302.88 | 3,213,302.88 |
| Holding Liabilities to Be Sold | ||
| Non Current Liabilities Expiring within One Year | ||
| Other current liabilities | ||
| Total Current Liabilities | 501,646,024.08 | 451,400,601.61 |
| Non-Current Liabilities: | ||
| Long-Term Loan | ||
| Bonds payable | ||
| Including: Preference Shares | ||
| Perpetual Capital Securities | ||
| Lease Obligation | ||
| Long-term account payable | ||
| Long-term employee pay payable | ||
| Anticipation liabilities | ||
| Deferred Revenue | ||
| Deferred Income Tax Liabilities | ||
| Other Non-current Liabilities | ||
| Total Non-current Liabilities | ||
| Total Liabilities | 501,646,024.08 | 451,400,601.61 |
| Owners Equity: | ||
| Capital stock | 685,790,364.00 | 685,790,364.00 |
| Other equity instruments | ||
| Including: Preference Shares | ||
| Perpetual Capital Securities | ||
| Capital reserve | 2,173,387,468.71 | 2,173,387,468.71 |
| Minus: Treasury Stock | ||
| Other Comprehensive Income | ||
| Reasonable Reserve | ||
| Surplus reserves | 109,487,064.39 | 109,487,064.39 |
| Undistributed profit | -1,015,942,058.81 | -994,322,827.98 |
| Total owners' equity | 1,952,722,838.29 | 1,974,342,069.12 |
| Total liabilities and owner's equity | 2,454,368,862.37 | 2,425,742,670.73 |
Legal representative: Li Shaoling Financial Director: Guan Ying Director of Accounting Institutions: Liu Quanli
3. Consolidated Profit Statement
Unit: Yuan
| Program | Half year of 2019 | Half year of 2018 |
| I. Gross Revenue | 3,283,277,725.39 | 3,639,625,979.41 |
| Including: operating income | 3,283,277,725.39 | 3,639,625,979.41 |
| Interest Income | ||
| Earned Premium |
Hainnan Jingliang Holdings Co.,Ltd. Semi-annual Report 2019
| Handling charges and commissions income | ||
| II. Total Operating Cost | 3,253,814,226.61 | 3,560,869,369.98 |
| Operating costs | 3,040,678,741.14 | 3,335,328,124.32 |
| Interest Expenditure | ||
| Handling Charges and Commissions Expenditure | ||
| Surrender Value | ||
| Net Payments for Insurance Claims | ||
| Net withdrawal of reserve fund for insurance contracts | ||
| Bond Insurance Expense | ||
| Reinsurance Expenses | ||
| Tax and Surcharges | 11,600,563.64 | 14,312,146.36 |
| Selling Expenses | 101,231,138.27 | 91,626,009.36 |
| Administrative Expenses | 81,298,228.37 | 83,375,112.60 |
| Research and Development Expenditure | 531,066.00 | 723,660.50 |
| Financial Expenses | 18,474,489.19 | 35,504,316.84 |
| Including: The Interest Expense | 22,981,293.07 | 52,050,362.69 |
| Interest Income | 4,120,628.58 | 15,797,297.89 |
| plus: other income | 9,871,098.22 | 5,517,293.77 |
| Investment income ("-" refers to losses) | 9,179,302.09 | 10,912,613.02 |
| Of which: Income from investment in joint ventures | ||
| The financial assets measured at amortized cost terminates the recognition of income ( "-" refers to losses) | ||
| Exchange Earning ( "-" refers to losses) | ||
| Net Open Hedging Income ( "-" refers to losses) | ||
| Income of Fair Value Changes ( "-" refers to losses) | 26,158,281.22 | 13,890,967.44 |
| Credit Loss ( "-" refers to losses) | ||
| Assets Impairment Loss ( "-" refers to losses) | -197,695.56 | 482,419.74 |
| Assets Disposal Income ( "-" refers to losses) | 11,997,518.40 | -188,228.18 |
| III. Operating Profit ( "-" refers to losses) | 86,472,003.15 | 109,371,675.22 |
| plus: Non-operating income | 1,716,443.59 | 9,797,420.75 |
| minus: Non-operating expenses | 822,418.62 | 9,620,172.31 |
| IV. Total Profit ( "-" refers to total losses) | 87,366,028.12 | 109,548,923.66 |
| minus: income tax expense | 22,121,776.12 | 34,990,271.41 |
| V. Net Profit ( "-" refers to net losses) | 65,244,252.00 | 74,558,652.25 |
| i. Classified Based on Business Continuity | 65,244,252.00 | 74,558,652.25 |
| 1. Net income from continuing operation ( "-" refers to net losses) | 65,244,252.00 | 74,558,652.25 |
| 2. Net income from discontinuing |
Hainnan Jingliang Holdings Co.,Ltd. Semi-annual Report 2019
| operation ( "-" refers to net losses) | ||
| ii. Classified Based on the Attribution of the Ownership | 65,244,252.00 | 74,558,652.25 |
| 1. Net income attributed to shareholders of parent company | 51,510,904.41 | 59,918,995.68 |
| 2. Minority Interest Income | 13,733,347.59 | 14,639,656.57 |
| VI. Net of Tax of Other Comprehensive Income | 50,944.52 | 185,407.75 |
| Net of tax of other comprehensive income attributed to shareholders of parent company | 50,944.52 | 185,407.75 |
| i. Other Comprehensive Income That Can't Reclassify Income and Loss | ||
| 1. Re-measure the change value of defined benefit pension plans | ||
| 2. Other comprehensive income that can not reverse the income and loss under the equity law. | ||
| 3. Investment of other equity instruments in the fair value changes. | ||
| 4. The fair value changes of credit risk of the company | ||
| 5. Others | ||
| ii. Other Comprehensive Income That Can Be Re-classified into the Income and Loss | 50,944.52 | 185,407.75 |
| 1. Other comprehensive income that can reverse the income and loss under the equity law. | ||
| 2. Investment of other obligatory rights in the fair value changes. | ||
| 3. The fair value changes of financial assets that can be sold. | ||
| 4. Financial assets that can be re-classified into other comprehensive income | ||
| 5. Holding to maturity investment that can be reclassified as profit and loss of financial assets available for sale | ||
| 6. Credit impairment reserve for other creditor's rights investment | ||
| 7. Cash Flow Hedging Reserve | ||
| 8. The Balance of Conversion of Foreign Currency Financial Statements | 50,944.52 | 185,407.75 |
| 9. Others | ||
| Net of tax of other comprehensive income attributed to minority shareholder | ||
| VII. Total Comprehensive Income | 65,295,196.52 | 74,744,060.00 |
| Total comprehensive income attributed to shareholders of parent company | 51,561,848.93 | 60,104,403.43 |
| Total comprehensive income attributed to minority shareholder | 13,733,347.59 | 14,639,656.57 |
Hainnan Jingliang Holdings Co.,Ltd. Semi-annual Report 2019
| VIII. Earnings Per Share: | ||
| i. Basic Earnings Per Share | 0.08 | 0.09 |
| ii. Diluted Earnings Per Share | 0.08 | 0.09 |
Legal representative: Li Shaoling Financial Director: Guan Ying Director of Accounting Institutions: Liu Quanli
4. Income Statement of Parent Company
Unit: Yuan
| Program | Half year of 2019 | Half year of 2018 |
| I. Operating Income | ||
| minus: operating costs | 151,218.30 | |
| Tax and Surcharges | 69,076.80 | 1,014,351.16 |
| Selling Expenses | ||
| Administrative Expenses | 13,511,405.60 | 6,013,659.30 |
| Research and Development Expenditure | ||
| Financial Expenses | 7,564,964.27 | 6,395,406.74 |
| Of which: The Interest Expense | 7,571,583.49 | 7,341,047.78 |
| Interest Income | 11,083.83 | 951,528.04 |
| plus: other income | ||
| Investment income ("-" refers to losses) | ||
| Of which: Income from investment in joint ventures | ||
| The financial assets measured at amortized cost terminates the recognition of income ( "-" refers to losses) | ||
| Net open hedging income ( "-" refers to losses) | ||
| Income of Fair Value Changes ( "-" refers to losses) | ||
| Credit Loss ( "-" refers to losses) | ||
| Assets Impairment Loss ( "-" refers to losses) | -4,344.16 | 99,248.41 |
| Assets Disposal Income ( "-" refers to losses) | ||
| II. Operating Profit ( "-" refers to losses) | -21,149,790.83 | -13,475,387.09 |
| plus: Non-operating income | ||
| minus: Non-operating expenses | 469,440.00 | 100.00 |
| III. Total Profit ( "-" refers to total losses) | -21,619,230.83 | -13,475,487.09 |
| minus: income tax expense | ||
| IV. Net Profit ( "-" refers to net losses) | -21,619,230.83 | -13,475,487.09 |
| i. Net income from continuing operation ( "-" refers to net losses) | -21,619,230.83 | -13,475,487.09 |
| ii. Net income from discontinuing operation ( "-" refers to net losses) |
Hainnan Jingliang Holdings Co.,Ltd. Semi-annual Report 2019
| V. Net of Tax of Other Comprehensive Income | ||
| i. Other comprehensive income that can't reclassify income and loss | ||
| 1. Re-measure the change value of defined benefit pension plans | ||
| 2. Other comprehensive income that can not reverse the income and loss under the equity law. | ||
| 3. Investment of other equity instruments in the fair value changes. | ||
| 4. The fair value changes of credit risk of the company | ||
| 5. Others | ||
| ii. Other comprehensive income that can be re-classified into the income and loss | ||
| 1. Other comprehensive income that can reverse the income and loss under the equity law. | ||
| 2. Investment of other obligatory rights in the fair value changes. | ||
| 3. The fair value changes of financial assets that can be sold. | ||
| 4. Financial assets that can be re-classified into other comprehensive income | ||
| 5. Holding to maturity investment that can be reclassified as profit and loss of financial assets available for sale | ||
| 6. Credit impairment reserve for other creditor's rights investment | ||
| 7. Cash Flow Hedging Reserve | ||
| 8. The Balance of Conversion of Foreign Currency Financial Statements | ||
| 9. Others | ||
| VI. Total Comprehensive Income | -21,619,230.83 | -13,475,487.09 |
| VII. Earnings Per Share: | ||
| i. Basic Earnings Per Share | ||
| ii. Diluted Earnings Per Share |
Legal representative: Li Shaoling Financial Director: Guan Ying Director of Accounting Institutions: Liu Quanli
5. Consolidated Statement of Cash Flow
Unit: Yuan
| Program | Half year of 2019 | Half year of 2018 |
| I. Cash flow from operating activities: |
Hainnan Jingliang Holdings Co.,Ltd. Semi-annual Report 2019
| Cash received for selling goods and providing services | 3,560,970,102.54 | 4,489,940,451.03 |
| Net increase in customer deposits and interbank deposits | ||
| Net increase in borrowing from the Central Bank | ||
| Net increase in borrowing from other financial institutions | ||
| Cash received from the premium of the original insurance contract | ||
| Net cash received from reinsurance business | ||
| Net increase of insured deposit and investment | ||
| Cash charged with interest, handling fees and commissions | ||
| Net increase in borrowing funds | ||
| Net increase in repurchase funds | ||
| Net Cash Received of Acting Trading Securities | ||
| Refunds of Taxes Received | 4,638,160.06 | 7,687,755.45 |
| Other Cash Received Related to Business Activities | 348,104,540.90 | 923,614,901.14 |
| Subtotal of Cash flow of Operating Activities | 3,913,712,803.50 | 5,421,243,107.62 |
| Cash for Purchase of Goods and Labor Services | 3,124,587,948.71 | 4,152,499,375.46 |
| Net Increase in Customer Loans and Advances | ||
| Net Increase in Deposits in the Central Bank and Other Banks | ||
| Cash for Payment of Original Insurance Contract Claims | ||
| Net Increase in Financial Assets Held for Trading Purposes | ||
| Net Increase of Lending Funds | ||
| Cash to Pay the Interest, Handling Fees and Commissions | ||
| Cash to Pay the Policy Dividend | ||
| Cash Paid to and for Employees | 145,181,797.67 | 143,081,894.04 |
| Tax Payments | 83,586,844.52 | 105,936,471.03 |
| Cash Payment of Other Related Business Activities | 339,763,918.39 | 974,030,824.21 |
| Subtotal of Cash Outflow of Operating Activities | 3,693,120,509.29 | 5,375,548,564.74 |
| Net Cash Flow from Operating Activities | 220,592,294.21 | 45,694,542.88 |
| II. Cash Flow from Investment | ||
| Cash Received in Disinvestment | 1,302,736,691.57 | 1,445,344,274.34 |
| Cash Received in Return of Investment | 3,600,120.65 | 21,669,125.78 |
| Net Cash Received from Disposal of Fixed Assets, Intangible Assets and Other Long-term Assets | 66,511.68 | 868,775.86 |
| Net Cash Received from Disposal of Subsidiaries and Other Operating Units | ||
| Cash Received Related to Other Business Activities | ||
| Subtotal of Cash flow of Operating Activities | 1,306,403,323.90 | 1,467,882,175.98 |
| Net Cash Payment for the Purchase of Fixed Assets, Intangible Assets and Other Long-term Assets | 26,905,240.57 | 30,521,020.31 |
| Cash Payment for Investment | 1,870,848,788.60 | 1,373,516,008.52 |
| Net Increase in Hypothecated Loan | ||
| Net Cash Payment of Subsidiaries and Other Business Units | 7,954,985.00 | |
| Cash Payment of Other Activities Related to |
Hainnan Jingliang Holdings Co.,Ltd. Semi-annual Report 2019
| Investment | ||
| Subtotal of Cash Outflow of Investment Activities | 1,897,754,029.17 | 1,411,992,013.83 |
| Net Cash Flow from Investment Activities | 591,350,705.27 | 55,890,162.15 |
| III. Cash Flow from Financial Activities: | ||
| Cash Received by Absorbing Investment | 38,582,500.00 | |
| Of which: Cash Received by Subsidiaries in Absorbing Investment from Minority Shareholders | ||
| Cash Received from Loans | 1,441,114,788.78 | 1,087,306,254.51 |
| Cash Received by Issuing Bonds | ||
| Other Cash Received Related to Financial Activities | ||
| Subtotal of Cash flow of Financial Activities | 1,441,114,788.78 | 1,125,888,754.51 |
| Cash Payment for Debt | 1,268,871,965.95 | 1,094,921,869.63 |
| Cash Paid for Distribution of Dividends, Profits or Interests | 47,473,893.65 | 75,755,529.11 |
| Of which: Dividends and Profits Paid by Subsidiaries to Minority Shareholders | ||
| Cash Payment of Other Activities Related to Financial Activities | 73,647,073.24 | |
| Subtotal of Cash Outflow of Financial Activities | 1,316,345,859.60 | 1,244,324,471.98 |
| Net Cash Flow from Financial Activities | 124,768,929.18 | -118,435,717.47 |
| IV. The Impact of Change in Exchange Rate on Cash and Cash Equivalents | 3,248,224.24 | 121,053.37 |
| V. Net Increase in Cash and Cash Equivalents | -242,741,257.64 | -16,729,959.07 |
| Plus: Initial Cash and cash Equivalents Balance | 867,870,016.78 | 1,014,438,663.43 |
| VI. Cash and Cash Equivalents Balance at the End of the Period | 625,128,759.14 | 997,708,704.36 |
Legal representative: Li Shaoling Financial Director: Guan Ying Director of Accounting Institutions: Liu Quanli
6. Statement of Cash Flows of Parent Company
Unit: Yuan
| Program | Half year of 2019 | Half year of 2018 |
| I. Cash Flow from Operating Activities: | ||
| Cash received for selling goods and providing services | ||
| Net Increase in Customer Deposits and Interbank Deposits | ||
| Net increase in borrowing from the Central Bank | ||
| Net increase in borrowing from other financial institutions | ||
| Cash received from the premium of the original insurance contract | ||
| Net cash received from reinsurance business | ||
| Net increase of insured deposit and investment | ||
| Cash charged with interest, handling fees and commissions | ||
| Net increase in borrowing funds | ||
| Net increase in repurchase funds |
Hainnan Jingliang Holdings Co.,Ltd. Semi-annual Report 2019
| Net Cash Received of Acting Trading Securities | ||
| Refunds of Taxes Received | 1,800.00 | 750.00 |
| Other Cash Received Related to Business Activities | 29,377,536.58 | 7,478,871.23 |
| Subtotal of Cash flow of Operating Activities | 29,379,336.58 | 7,479,621.23 |
| Cash for Purchase of Goods and Labor Services | 12,526.92 | |
| Net Increase in Customer Loans and Advances | ||
| Net Increase in Deposits in the Central Bank and Other Banks | ||
| Cash for Payment of Original Insurance Contract Claims | ||
| Net Increase in Financial Assets Held for Trading Purposes | ||
| Net Increase of Lending Funds | ||
| Cash to Pay the Interest, Handling Fees and Commissions | ||
| Cash to Pay the Policy Dividend | ||
| Cash Paid to and for Employees | 9,271,322.77 | 5,523,002.62 |
| Tax Payments | 71,408.74 | 5,608,734.95 |
| Cash Payment of Other Related Business Activities | 50,350,341.42 | 12,218,236.66 |
| Subtotal of Cash Outflow of Operating Activities | 59,693,072.93 | 23,362,501.15 |
| Net Cash Flow from Operating Activities | -30,313,736.35 | -15,882,879.92 |
| II. Cash Flow from Investment | ||
| Cash Received in Disinvestment | ||
| Cash Received in Return of Investment | ||
| Net Cash Received from Disposal of Fixed Assets, Intangible Assets and Other Long-term Assets | -34,427.35 | |
| Net Cash Received from Disposal of Subsidiaries and Other Operating Units | ||
| Cash Received Related to Other Business Activities | ||
| Subtotal of Cash flow of Operating Activities | -34,427.35 | |
| Net Cash Payment for the Purchase of Fixed Assets, Intangible Assets and Other Long-term Assets | 109,751.52 | |
| Cash Payment for Investment | 1,780,563.05 | 39,000,000.00 |
| Net Increase in Hypothecated Loan | ||
| Net Cash Payment of Subsidiaries and Other Business Units | ||
| Cash Payment of Other Activities Related to Investment | ||
| Subtotal of Cash Outflow of Investment Activities | 1,890,314.57 | 39,000,000.00 |
| Net Cash Flow from Investment Activities | -1,890,314.57 | -39,034,427.35 |
| III. Cash Flow from Financial Activities: | ||
| Cash Received by Absorbing Investment | ||
| Of which: Cash Received by Subsidiaries in |
Hainnan Jingliang Holdings Co.,Ltd. Semi-annual Report 2019
| Absorbing Investment from Minority Shareholders | ||
| Cash Received from Loans | 27,700,000.00 | 75,900,000.00 |
| Cash Received by Issuing Bonds | ||
| Other Cash Received Related to Financial Activities | ||
| Subtotal of Cash flow of Financial Activities | 27,700,000.00 | 75,900,000.00 |
| Cash Payment for Debt | 16,000,000.00 | |
| Cash Paid for Distribution of Dividends, Profits or Interests | 3,649,220.00 | |
| Of which: Dividends and Profits Paid by Subsidiaries to Minority Shareholders | ||
| Cash Payment of Other Activities Related to Financial Activities | ||
| Subtotal of Cash Outflow of Financial Activities | 19,649,220.00 | |
| Net Cash Flow from Financial Activities | 27,700,000.00 | 56,250,780.00 |
| IV. The Impact of Change in Exchange Rate on Cash and Cash Equivalents | ||
| V. Net Increase in Cash and Cash Equivalents | -4,504,050.92 | 1,333,472.73 |
| Plus: Initial Cash and cash Equivalents Balance | 13,597,659.66 | 15,360,177.32 |
| VI. Cash and Cash Equivalents Balance at the End of the Period | 9,093,608.74 | 16,693,650.05 |
Legal representative: Li Shaoling Financial Director: Guan Ying Director of Accounting Institutions: Liu Quanli
Hainnan Jingliang Holdings Co.,Ltd. Semi-annual Report 2019
7. Consolidated Statement of Change in Equity
Unit: Yuan
| Program | Half year of 2019 | ||||||||||||||
| Ownership interest attributable to the parent company | Minority Equity | Total owners' equity | |||||||||||||
| Capital stock | Other equity instruments | Capital reserve | Minus: Treasury Stock | Other Comprehensive Income | Reasonable Reserve | Surplus reserves | Generic Risk Reserve | Undistributed profit | Others | In total | |||||
| Preference Shares | Perpetual Capital Securities | Others | |||||||||||||
| I. Ending Balance of Last Year | 685,790,364.00 | 1,595,711,805.31 | 438.33 | 122,122,436.98 | -131,155,119.19 | 2,272,469,925.43 | 566,596,569.02 | 2,839,066,494.45 | |||||||
| Plus: Changes in Accounting Policies | |||||||||||||||
| Early Error Correction | |||||||||||||||
| Enterprise Merger under the Same Control | |||||||||||||||
| Others | |||||||||||||||
| II. Beginning Balance of This Year | 685,790,364.00 | 1,595,711,805.31 | 438.33 | 122,122,436.98 | -131,155,119.19 | 2,272,469,925.43 | 566,596,569.02 | 2,839,066,494.45 | |||||||
| III. Changes in This Period ( "-" refers to losses) | 50,944.52 | 51,510,904.41 | 51,561,848.93 | 086,293.89 | 52,648,142.82 | ||||||||||
| A. Total Comprehensive Income | 31,507.57 | 51,510,904.41 | 51,542,411.98 | 13,733,347.59 | 65,275,759.57 | ||||||||||
| B. Input and Capital Reduction of Owners | -1,800,000.00 | -1,800,000.00 | |||||||||||||
| 1. Common Stock Invested by the Owner | -1,800,000.00 | -1,800,000.00 | |||||||||||||
| 2. Invested Capital of Other Equity Instrument Holders | |||||||||||||||
| 3. Share Payment Included in Owner's | |||||||||||||||
Hainnan Jingliang Holdings Co.,Ltd. Semi-annual Report 2019
| Equity | |||||||||||||||
| 4. Others | |||||||||||||||
| C. Profit Distribution | -10,847,053.70 | -10,847,053.70 | |||||||||||||
| 1. Withdrawal Legal Surplus | |||||||||||||||
| 2. Withdrawal Generic Risk Reserve | |||||||||||||||
| 3. Distribution of Owners (or Shareholders) | -10,847,053.70 | -10,847,053.70 | |||||||||||||
| 4. Others | |||||||||||||||
| D. Internal Carry-over of Owner's Rights and Interests | 19,436.95 | 19,436.95 | 19,436.95 | ||||||||||||
| 1. Conversion of Capital Reserve to Additional Capital (Or Equity) | |||||||||||||||
| 2. Conversion of Surplus Reserve to Additional Capital (Or Equity) | |||||||||||||||
| 3. Surplus Reserve Covers the Deficit | |||||||||||||||
| 4. Change of Benefit Plan Transferred to Retained Income | |||||||||||||||
| 5. Other Comprehensive Income Transferred to Retained Income | |||||||||||||||
| 6. Others | 19,436.95 | 19,436.95 | 19,436.95 | ||||||||||||
| E. Special Reserve | |||||||||||||||
| 1. Current Withdrawal | |||||||||||||||
| 2. Current Use | |||||||||||||||
| F. Others | |||||||||||||||
| IV. Current Ending Balance | 685,790,364.00 | 1,595,711,805.31 | 51,382.85 | 122,122,436.98 | -79,644,214.78 | 2,324,031,774.36 | 567,682,862.91 | 2,891,714,637.27 |
Unit: Yuan
Hainnan Jingliang Holdings Co.,Ltd. Semi-annual Report 2019
| Program | Half year of 2018 | ||||||||||||||
| Ownership interest attributable to the parent company | Minority Equity | Total owners' equity | |||||||||||||
| Capital stock | Other equity instruments | Capital reserve | Minus: Treasury Stock | Other Comprehensive Income | Reasonable Reserve | Surplus reserves | Generic Risk Reserve | Undistributed profit | Others | In total | |||||
| Preference Shares | Perpetual Capital Securities | Others | |||||||||||||
| I. Ending Balance of Last Year | 685,790,364.00 | 1,592,541,582.73 | 122,122,436.98 | -299,111,700.34 | 2,101,342,683.37 | 499,079,730.54 | 2,600,422,413.91 | ||||||||
| Plus: Changes in Accounting Policies | |||||||||||||||
| Early Error Correction | |||||||||||||||
| Enterprise Merger under the Same Control | |||||||||||||||
| Others | |||||||||||||||
| II. Beginning Balance of This Year | 685,790,364.00 | 1,592,541,582.73 | 122,122,436.98 | -299,111,700.34 | 2,101,342,683.37 | 499,079,730.54 | 2,600,422,413.91 | ||||||||
| III. Changes in This Period ( "-" refers to losses) | 185,407.75 | 59,918,995.68 | 60,104,403.43 | 30,991,453.66 | 91,095,857.09 | ||||||||||
| A. Total Comprehensive Income | 185,407.75 | 59,918,995.68 | 60,104,403.43 | 14,639,656.57 | 74,744,060.00 | ||||||||||
| B. Input and Capital Reduction of Owners | 32,000,000.00 | 32,000,000.00 | |||||||||||||
| 1. Common Stock Invested by the Owner | 32,000,000.00 | 32,000,000.00 | |||||||||||||
| 2. Invested Capital of Other Equity Instrument Holders | |||||||||||||||
| 3. Share Payment Included in Owner's Equity | |||||||||||||||
| 4. Others | |||||||||||||||
| C. Profit Distribution | -15,648,202.91 | -15,648,202.91 | |||||||||||||
| 1. Withdrawal Legal | |||||||||||||||
Hainnan Jingliang Holdings Co.,Ltd. Semi-annual Report 2019
| Surplus | |||||||||||||||
| 2. Withdrawal Generic Risk Reserve | |||||||||||||||
| 3. Distribution of Owners (or Shareholders) | -15,648,202.91 | -15,648,202.91 | |||||||||||||
| 4. Others | |||||||||||||||
| D. Internal Carry-over of Owner's Rights and Interests | |||||||||||||||
| 1. Conversion of Capital Reserve to Additional Capital (Or Equity) | |||||||||||||||
| 2. Conversion of Surplus Reserve to Additional Capital (Or Equity) | |||||||||||||||
| 3. Surplus Reserve Covers the Deficit | |||||||||||||||
| 4. Change of Benefit Plan Transferred to Retained Income | |||||||||||||||
| 5. Other Comprehensive Income Transferred to Retained Income | |||||||||||||||
| 6. Others | |||||||||||||||
| E. Special Reserve | |||||||||||||||
| 1. Current Withdrawal | |||||||||||||||
| 2. Current Use | |||||||||||||||
| F. Others | |||||||||||||||
| IV. Current Ending Balance | 685,790,364.00 | 1,592,541,582.73 | 185,407.75 | 122,122,436.98 | -239,192,704.66 | 2,161,447,086.80 | 530,071,184.20 | 2,691,518,271.00 |
Hainnan Jingliang Holdings Co.,Ltd. Semi-annual Report 2019
8. Statement of Change in Equity of Parent Company
Unit: Yuan
| Program | Half year of 2019 | |||||||||||
| Capital stock | Other equity instruments | Capital reserve | Minus: Treasury Stock | Other Comprehensive Income | Reasonable Reserve | Surplus reserves | Undistributed profit | Others | Total owners' equity | |||
| Preference Shares | Perpetual Capital Securities | Others | ||||||||||
| I. Ending Balance of Last Year | 685,790,364.00 | 2,173,387,468.71 | 109,487,064.39 | -994,322,827.98 | 1,974,342,069.12 | |||||||
| Plus: Changes in Accounting Policies | ||||||||||||
| Early Error Correction | ||||||||||||
| Others | ||||||||||||
| II. Beginning Balance of This Year | 685,790,364.00 | 2,173,387,468.71 | 109,487,064.39 | -994,322,827.98 | 1,974,342,069.12 | |||||||
| III. Changes in This Period ( "-" refers to losses) | -21,619,230.83 | -21,619,230.83 | ||||||||||
| A. Total Comprehensive Income | -21,619,230.83 | -21,619,230.83 | ||||||||||
| B. Input and Capital Reduction of Owners | ||||||||||||
| 1. Common Stock Invested by the Owner | ||||||||||||
| 2. Invested Capital of Other Equity Instrument Holders | ||||||||||||
| 3. Share Payment Included in Owner's Equity | ||||||||||||
| 4. Others | ||||||||||||
| C. Profit Distribution | ||||||||||||
| 1. Withdrawal Legal Surplus | ||||||||||||
Hainnan Jingliang Holdings Co.,Ltd. Semi-annual Report 2019
| 2. Distribution of Owners (or Shareholders) | ||||||||||||
| 3. Others | ||||||||||||
| D. Internal Carry-over of Owner's Rights and Interests | ||||||||||||
| 1. Conversion of Capital Reserve to Additional Capital (Or Equity) | ||||||||||||
| 2. Conversion of Surplus Reserve to Additional Capital (Or Equity) | ||||||||||||
| 3. Surplus Reserve Covers the Deficit | ||||||||||||
| 4. Change of Benefit Plan Transferred to Retained Income | ||||||||||||
| 5. Other Comprehensive Income Transferred to Retained Income | ||||||||||||
| 6. Others | ||||||||||||
| E. Special Reserve | ||||||||||||
| 1. Current Withdrawal | ||||||||||||
| 2. Current Use | ||||||||||||
| F. Others | ||||||||||||
| IV. Current Ending Balance | 685,790,364.00 | 2,173,387,468.71 | 109,487,064.39 | -1,015,942,058.81 | 1,952,722,838.29 |
Unit: Yuan
| Program | Half year of 2018 | |||||||||||
| Capital stock | Other equity instruments | Capital reserve | Minus: Treasury Stock | Other Comprehensive Income | Reasonable Reserve | Surplus reserves | Undistributed profit | Others | Total owners' equity | |||
| Preference Shares | Perpetual Capital Securities | Others | ||||||||||
| I. Ending Balance of Last Year | 685,790,364.00 | 2,173,387,468.71 | 109,487,064.39 | -975,186,549.45 | 1,993,478,347.65 | |||||||
Hainnan Jingliang Holdings Co.,Ltd. Semi-annual Report 2019
| Plus: Changes in Accounting Policies | ||||||||||||
| Early Error Correction | ||||||||||||
| Others | ||||||||||||
| II. Beginning Balance of This Year | 685,790,364.00 | 2,173,387,468.71 | 109,487,064.39 | -975,186,549.45 | 1,993,478,347.65 | |||||||
| III. Changes in This Period ( "-" refers to losses) | -13,475,487.09 | -13,475,487.09 | ||||||||||
| A. Total Comprehensive Income | -13,475,487.09 | -13,475,487.09 | ||||||||||
| B. Input and Capital Reduction of Owners | ||||||||||||
| 1. Common Stock Invested by the Owner | ||||||||||||
| 2. Invested Capital of Other Equity Instrument Holders | ||||||||||||
| 3. Share Payment Included in Owner's Equity | ||||||||||||
| 4. Others | ||||||||||||
| C. Profit Distribution | ||||||||||||
| 1. Withdrawal Legal Surplus | ||||||||||||
| 2. Distribution of Owners (or Shareholders) | ||||||||||||
| 3. Others | ||||||||||||
| D. Internal Carry-over of Owner's Rights and Interests | ||||||||||||
| 1. Conversion of Capital Reserve to Additional Capital (Or Equity) | ||||||||||||
| 2. Conversion of Surplus Reserve to |
Hainnan Jingliang Holdings Co.,Ltd. Semi-annual Report 2019
| Additional Capital (Or Equity) | ||||||||||||
| 3. Surplus Reserve Covers the Deficit | ||||||||||||
| 4. Change of Benefit Plan Transferred to Retained Income | ||||||||||||
| 5. Other Comprehensive Income Transferred to Retained Income | ||||||||||||
| 6. Others | ||||||||||||
| E. Special Reserve | ||||||||||||
| 1. Current Withdrawal | ||||||||||||
| 2. Current Use | ||||||||||||
| F. Others | ||||||||||||
| IV. Current Ending Balance | 685,790,364.00 | 2,173,387,468.71 | 109,487,064.39 | -988,662,036.54 | 1,980,002,860.56 |
Hainan Jingliang Holdings Co., Ltd.Notions for the Semiannual Financial Report in 2019
Ⅰ.The Basic Information of the Company??? The registration place, organizational form and headquarter address of the companyHainan Jingliang Holdings Co., Ltd.Hainan Jingliang Holdings Co., Ltd. is a limited company which was approved by No.1Qiongfu Document (1992) of the General Office of Hainan Provincial People's Government and No. 6 Qiongyin document (1992) ofHainan Provincial People's Bank and was re-registered by Hainan Zhujiang Industrial Company on January 11, 1992. After there-registration, the company issued 81,880,000 shares in which the net assets of the original company were exchanged with60,793,600 shares and 21,086,400 shares were newly issued. The company's name is Hainan Pearl River Industrial Co., Ltd. Theregistration number of the business license of the joint stock company is 20128455-6, and the holding parent company, GuangzhouZhujiang Industrial Company holds 36,393,600 shares, accounting for 44.45% of the shares. In December 1992, according to the No.83 document issued by the Securities and Exchange Administration Office of the People's Bank of China in 1992, the company wasapproved to issue additional 21,086,400 shares which were traded on Shenzhen Stock Exchange. The company mainly involves thereal estate industry.On March 25, 1993, according to No. 028 document issued by the Office of the Leading Group of Hainan Stock-holding PilotSystem (1993) and No. 099 document issued by Branch of Bank of China in Shenzhen Special Economic Zone(1993), the companyincreased its share capital by 2 shares in accordance with the original share capital allotment of 10 and 5, and then increased its sharecapital by 139,196,000 shares. At the end of 1993, the controlling shareholder, Guangzhou Pearl River Industrial Corporation held48,969,120 shares, accounting for 35.18%.
In 1994, the capital stocks were increased by the ratio of 10:10 and the total stock capital was 278,392,000 shares. The dominantstockholder, Guangzhou Pear River Industrial Company held 97,938,240 shares, accounting for 35.18% of the shares.
In 1995, according to No. 45 document and No. 12 documented issued by Shenzhen Securities Office (1995), the company wasapproved to issue 50,000,000 B shares. Based on the additional B shares, the capital stock was increased by 10:1.5 ratio. The capitalstock was 377,650,800 shares after the increase. The holding parent company Guangzhou Pearl River Industrial Corporation held112,628,976 shares, accounting for 29.82% of the shares.
In 1999, Guangzhou Pearl River Industrial Group Co., Ltd. transferred 112,628,976 shares to Beijing Wanfa Real EstateDevelopment Co., Ltd. After the equity transfer was completed in June 1999, Beijing Wanfa Real Estate Development Co., Ltd. held112,628,976 shares, accounting for 29.82% of the total shares, and became the dominant stockholder of the company.
On January 10 of 2000, the company was changed to Hainan Pearl River Holdings Co., Ltd. and the business license of businesslicense for legal person was renewed by the Administration for Industry and Commerce of Hainan Province.
On August 17 of 2006, the reform of the equity division structure of the company was implemented. The company increased itsshare capital to all shareholders in a ratio of 10 to 1.3. The total share capital increased by 49,094,604 shares. The originalnon-tradable shareholders transferred the additional shares to the tradable A-share shareholders. Beijing Wanfa Real Estate
Development Co., Ltd. advanced the consideration shares of shareholders who didn’t express their opinions clearly. After the increaseof shares, the total capital stock was 426,745,404 shares. The former controlling shareholder, Beijing Wanfa Real EstateDevelopment Co., Ltd., held 107,993,698 shares, accounting for 25.31% of the shares. In 2007, non-tradable shareholders repaid3,289,780 shares in equity division consideration. In 2009,non-tradable shareholders repaid 1,196,000 shares in equity divisionconsideration.On September 2 of 2016, Beijing Wanfa Real Estate Development Co., Ltd., the former controlling shareholder, transferred112,479,478 shares to Beijing Grain Group Co., Ltd. After the equity transfer was completed in September 2016, Beijing GrainGroup Co., Ltd. held 112,479,478 shares, accounting for 26.36% of the total shares. In November 2016, based on the goal of themajor assets reorganization and the confidence in the future of the company, Beijing Grain Group Co., Ltd. decided to increase itsshares through competitive bidding in the secondary market, increased its shares to 123,561,963 shares, accounting for 28.95% of thetotal shares and become the first majority shareholder of the company.According to the major assets reorganization plan and delivery agreement, the company determined July 31, 2017 as thedelivery date of major assets. On September 14, 2017, in accordance with the resolution of the 2nd provisional shareholders’ meetingof the company on November 18 of 2016 and the Approval of Hainan Pearl River Holding Company Limited to Purchase Assets andRaise Matching Funds from Beijing Grain Group Limited Company issued by China Securities Regulatory Commission on July 28,2017 (Approval No. 1391 Supervisory License (2017) authorization: 1), the company purchases assets from the original shareholdersof Beijing Grain Products Co., Ltd. by issuing 210,079,552 shares and paying the difference of transaction price (1,699,543,600yuan). The face value of the issued share was 1.00 yuan, and the issue price was 8.09 yuan per share. 2. The company has issued48,965,408 new shares to Beijing Grain Group in private as the matching funds to purchase the assets. The face value of the issuedshare was 1.00 yuan, and the issue price was RMB 8.82 per share. Beijing Grain Group purchased the shares with monetary capital.The registered capital after issuance is RMB 685,790,364.00 and the equity is RMB 685,790,364.00. Grain Group accounted for
42.06% of the total shares and became the largest shareholder of the company.
On March 10, 2018, the company completed the registration procedures for the change of company name, legal representative,registered capital and business scope, and obtained the Business License of Enterprise Legal Person approved and renewed byHainan Administration for Industry and Commerce.The company completed the procedures for the change of legal representative on April 16, 2019.The relevant information after the change is as follows:
Company Name: Hainan Jingliang Holdings Co., Ltd.
Unified Social Credit Code: 914600002012845568
Type: Limited company (listed and state-owned holding company)
Registration Address: 29 Floor, Emperor Building, Pearl River Plaza, Binhai Avenue, Haikou.
Office Address: 29 Floor, Emperor Building, Pearl River Plaza, Binhai Avenue, Haikou.
Legal Representative: Li Shaoling
Registered Capital: 685,790,364 RMB
Register Date: March 22, 1988Business Term: March 22 of 1988 to September 20 of 2025The parent company is Beijing Food Group Co., Ltd.??? The Nature of the Company's Business and Its Main Business Activities
1、 Business Scope
The company involves the manufacturing and agricultural and farm and sideline food processing industries which mainly include theproduction and marketing of food, beverage, oil, and its by-products, plant protein and its products, organic fertilizer, microbialfertilizer and agricultural fertilizer, land consolidation, soil remediation, agricultural comprehensive planting and development, animalhusbandry, aquaculture and the production and sales of agricultural equipment, investment on the computer network technology,communication projects, research and development and application of high-tech products, investment and consultation ofenvironmental protection projects, animation, graphic design, import and export trade of goods and technology, leasing of self-ownedhouses. (General operating items are operated by the company independently, and special business activities shall be operated withlicense or approval documents) (Projects that need the approval of the government can only be carried out after approval by relevantdepartments.)
2、 The Nature of the Business and Main Business Activities of the Company
The company and its subsidiaries are mainly engaged in the processing, production and marketing of food, agriculturalby-products, oils, and leisure foods.
3、 The Basic Structure of the Company
The company's basic organizational structure: the shareholders’ meeting is the company's highest authority, the board of directors is theexecutive body of the shareholders' meeting, the board of supervisors is the internal supervisory body and the general manager isresponsible for the daily management of the company. The company consists of the board of directors, the board of supervisors, thecomprehensive affairs department, the securities affairs department, the strategic investment department, the finance department(settlement center), the internal risk control department, the human resources department, the party and the masses work department,and the discipline inspection and supervision department.
On May 6 of 2010, Beijing Investment Consulting Company, the branch of Hainan Pearl River Holding Co., Ltd. was establishedand the unified the social credit code is 91110107554875351W. Address: Room 5078, Building 3, Xijing Road, Eight High-tech Parks,Shijingshan District, Beijing. Business scope includes investment consulting, hotel investment and management, purchase and lease ofconstruction equipment, sale of building materials, hardware and electrical appliances, furniture, plastics, daily necessities, leatherproducts, rubber products, feedstuff, packaging seeds, grains, legumes, potatoes, flowers, grass and ornamental plants, fertilizers,non-metallic ores, etc. Metal products, metal ores, metal materials, import and export of goods, research, development and applicationof high-tech products. (1.No fund shall be raised in a public way without the approval of the relevant departments. 2. No securitiesproducts and financial derivative instruments shall be traded in public. 3. No loans shall be granted. 4. No guarantee shall be providedfor enterprises other than the invested enterprises. 5. No commitment shall be made to investors that the investment will bring no loss orthe minimum earnings can be ensured. Projects that need to be approved according to law can be put into the operation after beingapproved by relevant departments.) On August 3 of 2018, it was renamed as Beijing Branch of Hainan Jingliang Holdings Co., Ltd.
??? The Approval of Financial Reports
This financial statement has been approved by the board of directors of the company on August 15, 2019.
??? Scope of Consolidated Statements
At the 27th meeting of the 8th Board of Directors, Beijing Grain Company was approved to invest 50 million RMB to establishBeijing Grain Gubi Oil Company which has completed the business registration procedures on May 7, 2019. Beijing Grain Gubi OilCo., Ltd. was included in the scope of the consolidated statements. Please see Note 7, changes in the scope of consolidation, Note 8, andrights and interests of other subjects.
Ⅱ. Preparation Basis of Financial Statement
1. Preparation Basis
The financial statements of the company are prepared on the basis of the going concern assumption, which are carried out inaccordance with the actual transactions and events, the Enterprise Accounting Standards promulgated by the Ministry of Finance and itsapplication guidelines, interpretations and other relevant provisions (collectively referred to as Enterprise Accounting Standards). Inaddition, the company also discloses relevant financial information in accordance with No. 15 Rules for Statements Compilation ofInformation Disclosure of Companies with Public Issuance: General Regulations on Financial Reporting (revised in 2014).According to the relevant provisions of the enterprise accounting standards, the accounting of the company is based on accrualbasis. Except for a few financial instruments, the financial statements are based on historical costs. The available-for-sale non-currentassets shall be priced at a lower price from the comparison between the estimated expenses that are deducted from the fair value and theoriginal book value that meet the conditions for holding non-current assets. If asset impairment is found, then provisions for impairmentshall be made in accordance with relevant regulations.
2. Continuing Operation
This financial statement is prepared on the basis of continuing operation. The company should be in a continuing operation for atleast 12 months from the end of the reporting period.
Ⅲ. Statement of Compliance with Enterprise Accounting Standards
The financial statements compiled by the company conform to the requirements of the accounting standards of the enterprise.They have truly and completely reflected the merger of the company on June 30, 2019, the financial information of the parent company,the merger of January to June, 2019, the business performance and the cash flow of the parent company.
Ⅳ. Important Accounting Policies and Accounting Estimates
1. Accounting Period
The accounting period of the company consists of annual and mid-term periods. The mid-term accounting period indicates thereport period which is shorter than an annual accounting period. The company adopts the the Gregorian calendar year as the accountingyear, which is from January 1 to December 31 each year.
2. Operating Cycle
The company takes 12 months as a business cycle which is also regarded as a partition criterion for liquidity of assets andliabilities.
3. Bookkeeping Base Currency
The company takes RMB as its bookkeeping base currency.
Beijing Food (Singapore) International Trade Co., Ltd., an offshore subsidiary of the company, determines the US dollar as thebookkeeping base currency in accordance with the main economic environment of its operation.
4. Accounting Processing Methods of Enterprise Merger under the Same Control and the Different Control
Enterprise merger refers to the consolidation of two or more separate enterprises into one reporting entity. Enterprise merger canbe divided into enterprise merger under the same control and enterprise merger under the different control.
A. Enterprise Merger under the Same Control
The enterprise under the same control refers to the company that is involved in the merger and ultimately controlled by the sameparty or the same multi-party. And the control is not temporary. In the case of an enterprise merger under the same control, the mergerparty is the one that obtains control over the other enterprises involved in the merger on the combining date, and the other enterprises inthe merger are the merged party. The combining date refers to the date when the merger party actually acquires control over themerged party.
The assets and liabilities acquired by the merger party are calculated on the book value of the merged party on the combining date.
If the difference between the book value of net assets acquired by the merger party and the book value of the combined considerationpaid (or the total face value of the issuing shares), the capital reserve (equity premium) shall be adjusted, and if the capital reserve(equity premium) is insufficient to offset, the retained earnings shall be adjusted.The direct expenses of the merger party generated in the merger activity shall be included into the current profit and loss.B. Enterprise Merger under Different ControlEnterprises participating in the merger are not ultimately controlled by the same party or the same multi-party before and after themerger, which is called the merger under different control. In a merger under the different control, the enterprise obtains the control overthe other merged enterprises on the purchase date is called the acquirer and the other enterprises that participate in the merger are calledthe acquiree. The date of purchase refers to the date on which the acquirer actually obtains the control over the acquiree.As for the merger under different control, the merger cost should be recorded into the current profits and loss which includes theassets, liabilities, the fair value of the issued equity securities, expenses of auditing, legal service and evaluation consultation and othermanagement fees incurred or assumed by the acquirer on the day of purchase to gain control over the acquiree. The acquirer shallinclude the transaction cost of equity securities or debt securities issued in a consolidated consideration into the initial confirmationamount of equity securities or debt securities. The fair value of consideration shall be included in the merger cost at the date of purchase.If the consideration needs to be adjusted within 12 month after the date of purchase, the consolidated goodwill shall be adjusted. Themerger costs incurred by the purchaser and the identifiable net assets acquired in the merger are calculated at the fair value on the dateof purchase. If the merger cost is more than the fair value of net identifiable assets obtained by the acquiree on the date of purchase, thenthe difference between them is recognized as goodwill. If the merger cost is less than the fair value of the obtained net identifiable assetsof the acquiree in the merger, then all the identifiable assets, liabilities, fair value with liabilities and the measurement of the merger costshall be reviewed first. After the review, if the merger cost is still less than the fair value of the obtained net identifiable assets of theacquiree, then the difference shall be included into the current profits and losses.
If the purchaser obtains the deductible temporary difference of the purchased party and fails to confirm it on the date of purchasebecause it does not meet the conditions for confirmation of deferred income tax assets, the deferred income tax assets can be confirmedwhen the new information indicates that the relevant situation on the date of purchase already exists and the purchaser is expected todeduct the temporary difference within 12 months after the date of purchase. In addition, the goodwill will be reduced. If the goodwillis insufficient to offset, the difference will be recognized as the current profits and losses. Apart from the above circumstances, thedeferred income tax assets related to the merger of enterprises will be included in the current profits and losses.Enterprise mergers under different control are realized through multiple transactions. According to the criteria of packagetransactions in the Notice of the Ministry of Finance on Issuing Interpretation No.5 of the Accounting Standards for BusinessEnterprises (No.19 in 2012) and Article 51 of the Accounting Standards for Enterprises No. 33 - Consolidated Financial Statements(see Notes Ⅳ. 5), it can be determined whether the multiple transactions are the package transaction. As for the package transaction, itshould be handled according to the rules of long-term equity investment in the previous paragraphs, notes Ⅳ. 14. For those that are notpackage transactions, please separate individual financial statements from consolidated financial statements and carry out relevantaccounting treatment.In individual financial statements, the book value of the equity investment of the purchased party held before the purchase date andthe additional investment cost of the purchased day are taken as the initial investment cost of the investment. If the equity of thepurchased party held before the purchase date involves other comprehensive income, then it will be dealt on the same basis as the assetsor liabilities directly disposed of by the purchased party (Except the corresponding share in the changes caused by the acquiree’sredetermination of the net liabilities or net assets of the beneficiary plan, the rest is recorded as the current investment profits).
In the consolidated financial statements, the equity of the purchased party held before the purchase date shall be re-measuredaccording to the fair value of the equity on the purchase date. The difference between the fair value and its book value shall be includedin the current investment income. If the equity of the purchased party held before the purchase date involves other comprehensiveincome, it shall be handled on the same basis as the assets or liabilities directly disposed of by the purchased party (Except for thecorresponding share of the changes in the net liabilities or net assets of the beneficiary plan set up by the purchased party in accordancewith the equity method, the rest shall be converted to the current investment income on the purchasing date).
5. Preparation Methods of Consolidated Financial Statements
A. Principles for the Determination of the Scope of Consolidated Financial StatementsThe consolidation scope of consolidated financial statements is determined on the basis of control. Control means that thecompany has the control over the invested unit, enjoys variable returns by participating in the activities of the invested unit, and has theability to use the power to influence the amount of the returns. The consolidation scope includes the company and all its subsidiaries.Subsidiary company refers to the subject controlled by the company.Once the relevant facts and circumstances change, the company will reevaluate the relevant elements involved in the abovedefinition of control.B. Preparation Methods of Consolidated Financial StatementsFrom the date of acquiring the net assets of subsidiaries and the actual control of production and operation decision-making, thecompany began to incorporate them into the consolidation scope and from the date of losing the actual control, the company will stopincorporating them into the consolidation scope. For the disposed subsidiaries, the operating results and cash flow before the disposaldate have been properly included in the consolidated profit statement and the consolidated cash flow statement. As for the subsidiariesdisposed in the current period, the initial number of the consolidated balance sheet is not adjusted. The operating results and cash flowof subsidiary of emerged companies which are not under the same control are properly included in the consolidated profit statement andthe consolidated cash flow statement. The opening balance and comparative figures of the consolidated financial statements are notadjusted. The operating results and cash flows of subsidiaries of the emerged enterprises under the same control from the beginning ofthe consolidation period to the consolidation date have been properly included in the consolidated profit statement and the consolidatedcash flow statement. The contrast 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 periods adopted by the subsidiarycompany are inconsistent with those of the company, it is necessary to make adjustments to the financial statements of the subsidiarycompany in accordance with accounting policies and accounting periods of the company. For subsidiaries acquired by enterprisesemerged under different control, the financial statements shall be adjusted on the basis of the fair value of identifiable net assets on thepurchase date.All significant current balances, transactions and unrealized profits of the company shall be offset in the preparation of theconsolidated financial statements.The rights and interests of shareholder in the subsidiary company and the part of current net profit and loss that does not belong tothe company are listed separately as the rights and interests and gains and losses of minority shareholder in the consolidated financialstatements under the item of shareholder's rights and interests and net profit. The rights and interests of minority shareholders in thecurrent net profit and loss of a subsidiary company shall be listed under the net profit item in the consolidated profit statement as theprofits and losses of minority shareholders. If the loss shared by minority shareholders in the subsidiary company exceeds rights andinterests enjoyed by minority shareholders at the beginning of the period in the subsidiary company, the rights and interests of minorityshareholders should still be offset.If the company looses the control over the original subsidiary company due to the disposal of equity investment or other reasons,the residual equity shall be re-measured according to its fair value on the date of loss of control. The sum of the consideration acquiredby equity disposal and the fair value of residual equity is subtracted from net assets that should be continuously calculated by theoriginal subsidiary company from the purchase date. The difference shall be included into the current investment income when thecontrol is lost. Other comprehensive returns related to the equity investment of the original subsidiary company are treated on the samebasis of the the assets or liabilities directly disposed by the purchased party when the control power is lost (Except for changes in the netliabilities or net assets of the beneficiary plan of the original subsidiary company, the rest are converted to current return on investment.)Then, the residual equity is measured in accordance with the relevant provisions of Accounting Standards for Enterprises No. 2 --Long-term Equity Investment or Accounting Standards for Enterprises No. 22 - -Recognition and Measurement of FinancialInstruments.If the company disposes of the equity investment on the subsidiary company through multiple transactions until it looses the
control, it is necessary to distinguish whether the transactions of the equity investment on the subsidiary company belong to a packagetransaction. If the terms, conditions and economic effects of the transactions of the equity investment of subsidiary companies conformto one or more of the following situations, then it usually indicates that the multiple transactions should be treated as a packagetransaction: 1. These transactions are conducted at the same time or in consideration of the influence on each other. 2. The transactionsshould be regarded as a whole and then a complete commercial result can be achieved. 3. The occurrence of a transaction depends onthe occurrence of at least one other transaction. 4. A single transaction is uneconomical, but it is economic when all transactions areconsidered as a whole. If the transactions are not a package transaction, it shall be treated according to the principles of disposal oflong-term equity investment in subsidiaries without loss of control and loss of control over original subsidiaries due to disposal ofpartial equity investment or other reasons. Transactions that are a package transaction involving investment in subsidiary shares shall betreated as transactions that make the company loose control over subsidiary companies. However, before the loss of control rights, eachdisposal price corresponding to the disposal investment shall enjoy the difference of the net assets of the subsidiary company. Thebalance is recognized as other comprehensive gains in the consolidated financial statements and is transferred to the current profits andlosses at the loss of control period.
6. Classification of Joint Venture Arrangements and Accounting Treatment of Joint VentureJoint venture arrangement refers to an arrangement controlled jointly by two or more participants. According to the rights andobligations in the joint venture arrangement, the company divides the joint venture arrangement into joint operation and cooperativeenterprise. Joint operation means that the company has the right to arrange relevant assets and bear the liabilities related to thearrangement. Cooperative enterprise indicates that the company only has the right for the arranged net assets.The investment of the Cooperative enterprise shall be calculated by the equity method and shall be handled in accordance with theaccounting policy described in Notes Ⅳ 14 “long-term equity investment”.The company, as a party of joint venture recognizes its own assets and liabilities and holds assets and bears liabilities jointlyaccording to the share of the company. In addition, the company can recognize the income generated from the sale income of the jointoperation. And it is necessary to confirm the income based on the shares of the company. It needs to confirm the expenses incurredseparately by the company and expenses incurred jointly in accordance with the shares of the company.When the company jointly invests or sells assets as a joint venture (which does not constitute a business. Similarly hereinafter) orpurchases assets from joint venture, the company only confirms that the profits and losses arising from the transaction belong to theother participants in the joint venture before selling such assets to a third party. Where the loss of impairment of assets occurs inaccordance with the provisions of Accounting Standards for Enterprises No. 8 - Impairment of Assets, the company shall recognize theloss in full in the case of the investment or sale of assets from the company to the joint operation, and in the case of the purchase ofassets by the company from the joint operation, the company shall recognize the loss in accordance with its share assumed.
7. Determination Standards for Cash and Cash Equivalents
The cash and cash equivalents of the company include cash in stock, deposits that can be used to pay at any time, the knownamount of cash that is held by the company for short term (usually due within three months from the date of purchase) and easy forconversion with strong fluidity and investment with little risk of value change.
8. Foreign Currency Operation and Foreign Currency Statements Conversion
A. Conversion Method of Foreign Currency Transaction
At the initial confirmation , the foreign currency transactions of the company are converted into the amount of the book-keepingbase currency at the spot exchange rate on the trading day. However, the foreign currency exchange business or transactionsinvolving foreign currency exchange of the company are converted into the amount of the book-keeping base currency at the actualexchange rate.
B. Conversion Methods for Foreign Currency Monetary Items and Foreign Currency Non-monetary Items
On the balance sheet day, the spot exchange rate on the balance sheet date is used to convert foreign currency monetary items. The
currency conversion differences are generated except the following contents. 1. The conversion differences arising from special foreigncurrency loans related to the purchase and construction of assets eligible for capitalization shall be treated in accordance with theprinciple of capitalization of borrowing costs. 2. As for the foreign currency goods available for sale, the currency translationdifferences arising from changes in book balances of monetary items except the amortized costs are included in other comprehensiveincome and losses of the current period.The non-monetary items of foreign currency measured at historical cost are still measured by the book-keeping base currencyconverted at the spot exchange rate on the date of transaction. Foreign currency non-monetary items measured by fair value shall beconverted by spot exchange rate on the date of determination of fair value. The difference between the converted amount ofbookkeeping base currency and the original amount of the bookkeeping base currency shall be treated as changes in fair value(including changes in exchange rate), and shall be included in current profits and losses or other comprehensive income.
C. Conversion Method of Foreign Currency Financial StatementsIn the preparation of consolidated financial statements that involves overseas operations, the exchange difference resulting fromthe change of exchange rate shall be recognized as conversion difference of foreign currency statements and confirmed as othercomprehensive income if foreign currency monetary item constitutes a net investment in overseas operations. The overseasoperations should be included in the current profits and losses.
Foreign currency financial statements of overseas operation are converted into RMB statements by the following methods: theassets and liabilities in the balance sheet are converted at the spot exchange rate on the balance sheet date. The shareholder equityitems are converted at the spot exchange rate at the time of occurrence, except for the undistributed profit items. Income and expenseitems in the profit statement shall be converted on the date of transaction. The undistributed profit at the beginning of the period isthe undistributed profit at the end of the previous year after the conversion. The undistributed profit at the end of the year iscalculated and distributed as the converted profit and listed under the items. The difference between the total amount of the assets andliabilities items and the equity items of shareholders after the conversion is recognized as the conversion difference of the foreigncurrency statement and as other comprehensive income. When the company looses the control right in the disposal of the overseasoperations, the balance of the converted foreign currency statements related to the overseas operations shown under the equity itemsof shareholders in the balance sheet shall be transferred to the current profits and losses of the disposal in full or in proportion to thedisposal of the overseas operations.Foreign currency cash flow and cash flow of overseas subsidiaries shall be converted at the average exchange rate of the currentperiod on the date of cash flow occurrence. The impact of exchange rate changes on cash is a reconciling item, which should bepresented separately in the cash flow statement.The opening balance and the actual number of the previous period are shown as the amount converted from the previousfinancial statements.
In the treatment of all ownership interest, part of equity investment or other reasons that have resulted in the loss of control overthe overseas operations, the converted balance of the foreign currency statements related to the overseas operations, which areattributable to the owner's rights and interests of the parent company, as shown below in the balance sheet, shall be transferred to thecurrent profits and losses.
In the treatment of part of the equity investment or other reasons that led to the decrease of the holding proportionate interest ofoverseas operations rather than the loss of control over the overseas operations, the balance of foreign currency statement conversionrelated to the part of overseas operation and disposal shall be attributed to the rights and interests of minority shareholders and shallnot be transferred to current profits and losses. In the disposal of some equity of overseas joint venture, the conversion difference ofthe of foreign currency statements related to the overseas operation shall be transferred to the current profits and losses according tothe disposing proportion of the overseas operation.
9. Financial Instrument
When the company becomes a party of the financial instrument contract, it confirms a financial asset or financial liability.
A. Financial Assets
a. Classification, Confirmation Basis and Measurement Method of Financial AssetsAccording to the business model of financial assets management and the characteristics of contract cash flow of financial assets,the financial assets are divided into financial assets that are measured by amortized cost, financial assets that are measured by fairvalue and the changes are included into other comprehensive income, and financial assets that are measured by fair value and theirchanges are included into current profits and losses.
The company classifies financial assets that meet the following conditions as financial assets measured at amortized cost. 1. Thebusiness model of the financial assets management is to collect contract cash flow. 2. The clauses of the financial asset contractrequire that the cash flow generated on a specific date is only the payment of principal and interest based on the amount of unpaidprincipal. Such financial assets are initially measured at fair value, and the related transaction costs are included in the initialconfirmation amount, which will subsequently measured at the amortized cost. Except for those designated as hedged items, thedifference between the initial amount and the amount due shall be amortized according to the actual interest rate method. Theamortization, impairment, exchange gains and losses, as well as the gains and losses arising from the terminal confirmation shall beincluded in the current profits and losses.The company classifies financial assets that meet the following conditions as financial assets measured at fair value and thechanges are included in other comprehensive income. 1. The business model of the financial assets management aims to collectcontract cash flow and sell the financial assets. 2. The clauses of the financial asset contract require that the cash flow generated on aspecific date is only the payment of principal and interest based on the amount of unpaid principal. Such financial assets are initiallymeasured at fair value, and related transaction costs are included in the initial confirmation amount. Except for those designated ashedged items, the other income and losses of such financial assets are included in other comprehensive income and losses except thelosses or gains of credit impairment, exchange gains and losses and the interest of the financial assets calculated based on theeffective interest method. When the recognition of financial assets is terminated, the accumulated gains or losses shall be transferredfrom the other comprehensive gains and shall be included in the current profits and losses.
The company confirms interest income in accordance with the effective interest method. Interest income is determined when thebook balance of financial assets multiplies by the actual interest rate, except the following cases. 1. For financial assets that havebeen purchased or originated with credit impairment, interest income shall be determined by calculating the amortization cost of thefinancial assets and the actual interest rate adjusted by credit from the initial confirmation. 2. For purchased or originated financialassets in which the credit impairment was not found at first but the credit impairment is observed in the subsequent period, theinterest income shall be determined based on the amortized cost and actual interest rate of the financial assets.
The company designates investment in non-tradable equity instruments as financial assets that are measured at fair value and thechanges are included in other comprehensive income. The designation shall not be cancelled once it is made. The investments ofnon-tradable equity instruments designated by the company, which are measured at fair value and the changes are included in othercomprehensive gains, are initially measured at fair value, and the related transaction costs are included in the initial confirmationamount. Apart from the dividends (except for the recovery of investment cost), they are included in the current profits and losses, andother related profits and losses (including exchange gains and losses) are included in the other comprehensive gains, which shall notbe transferred to current gains and losses. When it terminates recognition, the accumulated gains or losses previously included inother comprehensive gains are transferred to retained earnings.
The financial assets are classified as those measured by the amortized cost and those measured by fair value and the changes areincluded in other comprehensive income. The company also classifies them as financial assets measured by fair value and thechanges are included in current profits and losses. Such financial assets are initially measured by fair value, and related transactioncosts are directly included in current profits and losses. The profits or losses of such financial assets shall be included in the currentprofits and losses.
Where the company recognizes or considers financial assets in the merger of enterprises under different control, the financialassets are classified as financial assets measured at fair value and the changes are recorded in the current profits and losses.
When the company changes its business model of financial assets management, it reclassifies all relevant financial assets thathave been affected.
b. The Confirmation Basis and Measurement Method of Financial Assets TransferThe company will give the derecognition of the financial assets which meet one of the following conditions. 1. The contractualright to collect cash flow from the financial assets is terminated. 2. The transfer of financial assets results in the risk transfer andreturns in the ownership of the financial assets. 3. The financial assets are transferred, and the company neither transfers nor reservesall risks and returns in the ownership of financial assets and the company does not retain control over the financial assets.
If the transfer of financial assets satisfies the conditions derecognition, the book value of the transferred financial assets, thereceived consideration occurred in the transfer, cumulative amount of changes in the fair value that should be terminated in othercomprehensive income (The terms of the contract relating to the transfer of financial assets stipulate that cash flows generated on aspecific date are only payments of principal and interest based on the amount of outstanding principal) should be included in thecurrent income and losses.If the transfer of financial assets satisfies the conditions for termination of recognition, the book value of the transferredfinancial assets as a whole shall be apportioned between the termination confirmation part and the non-termination confirmation partin accordance with their respective relative fair values. The sum of consideration received as a result of the transfer and the amount ofthe corresponding termination confirmation in the cumulative amount of changes in fair value (The terms of the contract relating tothe transfer of financial assets stipulate that cash flows generated on a specific date are only payments of principal and interest basedon the amount of outstanding principal) and the difference from the overall book value of the financial assets is included in currentprofits and losses.
B. Financial Liabilities
a. Classification, Confirmation Basis and Measurement Method of Financial Liabilities
In the initial recognition, the financial liabilities of the company are divided into financial liabilities that are measured at fairvalue and the changes are included in current profits and losses and other financial liabilities.
Financial liabilities that are measured at fair value and the changes are included in current profits and losses, include thetransactional financial liabilities and financial liabilities that are designated at the time of initial recognition and measured at fairvalue and the changes are included in current profits and losses which are subsequently measured at fair value. The gains or lossesresulting from changes in fair value, the dividend and interest related to the financial liabilities and interest expenses shall beincluded in the current profits and losses.
Other financial liabilities are measured by effective interest method which are subsequently measured according to theamortized cost. The company classifies financial liabilities as financial liabilities measured at amortized cost except the followingitems. 1. Financial liabilities that are measured at fair value and the changes are included in current profits and losses, includetransactional financial liabilities (including derivatives of financial liabilities) and designated financial liabilities that are measured atfair value and the changes are included in current profits and losses. 2. Financial liabilities resulting from the transfer or continuedinvolvement of the transferred financial assets that do not meet the conditions for termination of recognition. 3. Financial guaranteecontracts that do not meet the requirements of the first and second items, and loan commitments with lower market interest rates thatdo not meet the requirements of the first items.
If the company recognizes or considers financial liabilities in the merger of enterprises under different control as purchaser party,it shall be measured at the fair value and its changes shall be included in the current profits and losses.
b. Termination Confirmation Conditions of Financial Liabilities
When the current obligation of a financial liability has been discharged in whole or in part, the recognition of the dischargedfinancial liabilities or obligation shall be terminated. The company and creditors sign an agreement to replace the existing financialliabilities by assuming new financial liabilities. If the terms of the contracts of the new financial liabilities and the existing financialliabilities are substantially different, then the existing financial liabilities shall be terminated and the new financial liabilities shall berecognized at the same time. If the company substantially amends all or part of the contract terms of the existing financial liabilities,it shall terminate the confirmation of the existing financial liabilities or part of them, and recognize the altered financial liabilities as anew financial liabilities at the same time. The difference between the book value of the termination confirmation part and theconsideration paid shall be included in the current profit and loss.
C. Determination Method of the Fair Value of Financial Assets and LiabilitiesThe fair value of financial assets and liabilities is measured at the price of principal market in the company. If there is noprincipal market, the then fair value of financial assets and liabilities shall be measured at the price of the most advantageousmarket and the applicable valuation technique with sufficient available data and support of other information shall be adopted. Theinput values used in fair value measurement can be divided into three levels. The first level of the input values is the unadjustedquotation of the same assets or liabilities that can be obtained on the measurement day in the active market. The second level of theinput value is the direct or indirect observable input value of related assets or liabilities except the first level of input value. The thirdlevel of input value is the unobservable input value of the related assets or liabilities. The company prefers the first level of inputvalues, and the third level of input values is the last option. The level of the results of fair value measurement is determined by thelowest level of input values which are of great significance to fair value measurement as a whole.
The investment in equity instruments of the company is measured at fair value. However, in limited cases, if the informationused to determine fair value is insufficient, or the possible estimated amount of fair value is widely distributed, and the costrepresents the best estimate of fair value in the range, then the cost can represent its proper estimation on fair value in the range ofdistribution.D. Setoff of Financial Assets and LiabilitiesThe financial assets and liabilities of the company are shown separately in the balance sheet which do not offset each other.However, when the following conditions are met at the same time, the net amount after mutual offset is shown on the balance sheet. 1.The company has the legal right to offset the recognized amount, and this legal right is currently enforceable. 2. The company plansto settle the financial assets or liquidate the financial liabilities at the same time for netting settlement.
E. Differentiation and Processing Methods of Financial Liabilities and Equity Instruments
The company distinguishes financial liabilities from equity instruments according to the following principles. 1. If the companyfails to unconditionally avoid fulfilling a contractual obligation by delivering cash or other financial assets, the contractual obligationis in line with the definition of financial liabilities. Although some financial instruments do not explicitly contain terms andconditions for the obligation to deliver cash or other financial assets, they may indirectly form contractual obligations through otherterms and conditions. 2. If a financial instrument can only be settled with the own equity instrument of the company, it is necessary toconsider whether the company's own equity instrument used for settlement is a substitute for cash or other financial assets, or is amethod to enable the holder of the instrument to enjoy residual rights in the assets after all liabilities have been deducted. If it is asubstitute for cash or other financial assets, then the instrument is the financial liability of the issuer. Else, the instrument is the equityinstrument of the issuer. In some cases, a financial instrument contract stipulates that the company shall use its own equityinstruments to settle the financial instrument, in which the amount of contractual rights or obligations is equal to the number of itsown equity instruments available or to be delivered multiplied by the fair value at the time of settlement. Regardless of the amount ofthe contractual rights or obligations is fixed or totally or partially based on changes in variables other than the market price of thecompany's own equity instruments (such as interest rates, the price of a commodity or the price of a financial instrument), which areclassified as financial liabilities.
When the company classifies financial instruments (or their components) in the consolidated statements, the company takes allterms and conditions reached between group members and holders of financial instruments into account. If the group assumes theobligation to deliver cash, other financial assets or settlement methods that result in the instrument becoming a financial liability, theninstrument should be classified as a financial liability.
If the financial instruments or the components belong to financial liabilities, then relevant interest, dividends, gains or losses, aswell as gains or losses arising from redemption or refinancing shall be included in the current profits and losses.
When the financial instrument or its components belong to an equity instrument and it is issued (including refinancing),repurchased, sold or cancelled, then the change of the fair value of the equity instrument shall not be recognized when the companydeals with the change of equity.
10. Accounts Receivables
The Determination Method and Accounting Treatment Method of Anticipated Credit Loss of Notes Receivable and AccountsReceivable.
The company always measures its loss preparation according to the amount equivalent to the anticipated credit loss in the wholeperiod for the accounts receivable formed by the transactions regulated by the Accounting Standards for Enterprises No. 14-Incomeand excluding major financing elements.
The judgment of whether credit risk has increased significantly since the initial recognition. By comparing the defaultprobability of the financial instrument in the expected lifetime determined at the initial confirmation with the default probability ofthe instrument in the expected lifetime determined at the balance sheet date, the company can determine whether the credit risk of thefinancial instrument has increased significantly. However, if the company determines that the financial instrument has only a lowcredit risk on the balance sheet date, it can be assumed that the credit risk of the financial instrument has not increased significantlysince the initial confirmation. Usually, if the expiry exceeds 30 days, it will be regarded that the credit risk of financial instrumentshas increased significantly. Unless the company does not have to pay unnecessary additional costs or efforts to obtain reasonable andwell-founded information, it can prove that credit risk has not increased significantly since the initial recognition even if the overdueperiod exceeds 30 days. In determining whether credit risk has increased significantly since the initial confirmation, the companyobtains reasonable and valid information, including forward-looking information without unnecessary additional costs or efforts.
Assessment Based on Combination. For bills receivable and accounts receivable, the company can not obtain sufficient evidenceof significant increase in credit risk at a reasonable cost at the single instrument level, but it is feasible to assess whether the creditrisk increases significantly on the basis of combination. Therefore, the company should evaluate the credit risk according to the typeof financial instruments, credit risk rating, initial confirmation date and residual contract duration. It is necessary to divide the notesreceivable and accounts receivable and assess whether credit risk increased significantly on the basis of combination.
Measurement of Expected Credit Loss Expected credit loss refers to the weighted average value of credit loss of financialinstruments weighted by the risk of default. Credit loss refers to the difference between the cash flow of all contracts discountedaccording to the original real interest rate and the expected cash flow of all contracts receivable according to the contract. It is thepresent value of all cash shortages.
The company calculates the expected credit loss of notes receivable and accounts receivable on the balance sheet date. If theexpected credit loss is more than the current book value of notes receivable and the provision for impairment of accounts receivable,the company recognizes the difference as impairment loss of notes receivable and accounts receivable. The credit impairment loss isthe debit and the bad-debt provision is the credit. On the contrary, the company recognizes the difference as impairment gains andmakes the opposite accounting records.
If the company actually incurs credit losses and finds that the relevant receivables and accounts receivable can’t be recoveredwhich are approved for cancellation, it shall debit bad debts preparation and credit notes receivable or accounts receivable accordingto the approved amount of write-off. If the amount of write-off is more than the loss provision that has been already accrued, thecredit impairment loss shall be debited according to the difference.
Based on the actual credit losses of previous years and the forward-looking information of the current year, the company hasadopted a portfolio-based accounting estimation policy to measure the expected credit losses which are as follows:
| Overdue Duration | Loss Given Default (%) |
| Within One Year | 2 |
| One to Two Years | 5 |
| Two to Three Years | 20 |
| Three to Four Years | 50 |
| Four to Five Years | 80 |
| Overdue Duration | Loss Given Default (%) |
| More Than Five Years | 100 |
11. Other Receivables
The Determination Method and Accounting Treatment of Anticipated Credit Loss of Other Receivables.The company measures the loss provisions of other receivables according to the following circumstances. 1. As for the financialassets of which the credit risk has not increased significantly since the initial confirmation, the company measures the loss provisionsaccording to the amount of anticipated credit loss in the next 12 months. 2. Financial assets of which the credit risk has increasedsignificantly since the initial recognition, the company shall measure the loss preparation according to the amount of anticipatedcredit loss in the whole duration of the financial instrument. 3. As for the purchased or originated financial assets, the company shallmeasure the loss provisions according to the amount of the anticipated credit loss in the whole duration.Assessment Based on Combination. For other receivables, the company can’t obtain sufficient evidence of significant increasein credit risk at a reasonable cost and a single instrument level. It is feasible to assess whether there is a significant increase in creditrisk on the basis of the combination. Therefore, according to the common risk characteristics including the financial instrument type,credit risk rating, initial recognition date and residual contract duration, the company divides other receivables into groups andassesses whether the credit risk has increased significantly on the basis of combination.
| Overdue Duration | Loss Given Default (%) |
| Within One Year | 2 |
| One to Two Years | 5 |
| Two to Three Years | 20 |
| Three to Four Years | 50 |
| Four to Five Years | 80 |
| More Than Five Years | 100 |
12. Inventory
a. Classification of InventoryInventory mainly includes raw materials, revolving materials, finished products, development cost, inventory goods and materialsin transit.b. Valuation Method for Acquisition and Issuance of InventoriesInventories are valued at actual cost when they are acquired, and the weighted average method is used to determine the actual costof the inventories that have been sent out.
c. Recognition of Net Realizable Value of Inventory and Calculation Method of Depreciation ReserveInventories at the end of the period are priced on the basis of the principle of lower cost and net realizable value. As for the costthat is not expected to be recoverable because of the damages to the inventory, obsolescence in whole or in part, or lower selling price,the falling price reserves of the inventory shall be prepared. The falling price reserves of inventory extracted by the difference betweenthe cost of a single inventory item and its net realizable value.The net realizable value of the inventory is determined by the amount when the estimated sale price of the inventory subtracts thesales cost and related taxes.
After the inventory falling price reserves are extracted, if the factors that can affect the value of the previously written-downinventory have disappeared and the net realizable value of the inventory is higher than its book value, then it shall be reversed within theamount of the original inventory falling price reserves, which shall be included into the current profits and losses.d. The inventory system is the perpetual system.
e. Amortization of Low-value Consumables and PackagesLow-value consumables and packages are amortized by the one-off amortization method or the divide second amortizemethod when they are consumed.
13. Holding Assets for Sale
If the company recovers its book value mainly by selling (including the exchange of non-monetary assets with commercialsubstance, the same below) rather than continuing to use a non-current asset or disposal group recouping the book value , it is classifiedas holding for sale. Specific criteria are as follows: a non-current asset or disposal group can be sold immediately in the current situationin accordance with the practice of selling such assets or disposal groups in similar transactions. The company has made a decision onthe sale plan and obtained a definite purchase commitment. The sale is expected to be completed within one year. Among them,disposal group refers to a group of assets disposed of as a whole through sale or other means in a transaction, and liabilities directlyrelated to these assets transferred in the transaction. The asset group or portfolio of the disposal group apportions the goodwill acquiredin the merger of enterprises in accordance with Accounting Standards for Enterprises No. 8 - Assets Impairment. The disposal groupshall include the goodwill apportioned to the disposal group.
When the initial measurement or re-measurement is divided into the non-current assets held for sale and the disposal group on thebalance sheet day, If the book value of the non-current assets held for sale is higher than the net amount of the fair value minus theselling expenses, the book value shall be written down to the net amount of the fair value minus the selling expenses. And the writtendown amount shall be recognized as the loss of the assets impairment, which should be included into the current profit and loss. At thesame time, the impairment provision of assets held for sale shall be accrued. For the disposal group, the recognized impairment loss ofassets first offsets the book value of goodwill in the disposal group, and then offsets proportionally the book value of non-flows assetsspecified in the measurement provisions of Accounting Standards for Enterprises No. 42 - Holding Non-Current Assets for Sale,Disposal Group and Termination of Business (hereinafter referred to as holding standards for sale) in the disposal group. If the fairvalue of the disposal group for sale at the subsequent balance sheet day subtracts the cost of sale and the net amount increases, then theamount previously written down shall be restored. The amount of loss of impairment of assets recognized by the criterion of holding thenon-current assets for sale shall be turned back after being classified as holding the categories for sale, and the amount returned shall beincluded in the current profits and losses. The book value of non-current assets shall be increased in proportion which is applicable tothe measurement requirement for holding for sale except goodwill. The book value of offset goodwill and the loss of the assetsimpairment before the non-current assets are classified as holding for sale which are applicable to the measurement of the criteria forholding for sale shall not be reversed.
No depreciation or amortization of the non-current assets held for sale is accrued. The interest and other expenses of the liabilitiesheld in the disposal group for sale shall be recognized.
When the non-current assets or disposal group no longer meet the requirements for the classification of holding assets for sale, thecompany will no longer classify the non-current assets into holding categories for sale or remove them from the disposal group for sale,which are measured according to the lower of the following two items. 1. Before the holding categories for sale are classified andassumed not to be, the book value is divided into the adjusted amount of depreciation, amortization or impairment that should have beenrecognized in the case of holding the category for sale. 2. Recoverable amount.
14. Long-term Equity Investment
The long-term equity investment in this part refers to the long-term equity investment in which the company has control, jointcontrol or significant impact on the invested enterprises. If the company has no control, joint control or significant impact on theinvested entity, then the long-term equity investment shall be accounted for as financial assets for sale or measured at fair value and thechanges are recorded in current profits and losses. The accounting policies of the company are detailed in Notes Ⅳ. 9 called FinancialInstruments.
Joint control refers to the company's control over an arrangement in accordance with relevant agreements, and the related activitiesin the arrangement must be agreed by the participants that share the control rights before decisions are made. Important impact means
that the company has the power to participate in the decision-making of the financial and operational policies of the invested enterprises,but it fails to control or jointly control the formulation of these policies with other parties.a. Determination of Investment CostFor the long-term equity investment obtained by the merger of enterprises under the same control, the initial investment cost of thelong-term equity investment is based on the share of the book value of the equity of the merged shareholders in the consolidatedfinancial statements of ultimate controlling party on the date of the merger. The difference between the initial investment cost oflong-term equity investment and the cash paid, the transferred non-cash assets and the book value of the assumed debt shall be adjustedto the capital reserve. If the capital reserve is insufficient to offset, the retained earnings shall be adjusted. Where equity securities areissued as merger consideration, the initial investment cost of long-term equity investment shall be the share of the book value of theequity of the merged shareholders in the consolidated financial statements of the ultimate controlling party on the date of merger. Thetotal face value of the issued shares shall be the equity capital. The difference between the initial investment cost of long-term equityinvestment and the total face value of the issued shares should be adjusted to the capital reserve. If the capital reserve is insufficient tooffset, the retained earnings shall be adjusted. Through multiple transactions, the shares of the merged party under the same control areobtained and the merger under the same control shall be treated according to the rules of the package transaction. If the merger is apackage transaction, the all transactions shall be treated as a transaction that has obtained the control. If it is not a package transaction,the initial investment cost of long-term equity investment shall be the share of the book value of the shareholders’ equity of the mergedparty in the consolidated financial statements of ultimate controlling party on the date of merger. The difference between the initialinvestment cost of long-term equity investment and the book value of long-term equity investment before the merger and the sum of thebook value of the new share payment on the merger date shall be adjusted to the capital reserve. If the capital reserve is insufficient tooffset, the retained earnings will be adjusted. The equity investments held before the merger date shall not be processed for the timebeing because they are measured by equity method or other comprehensive gains recognized for the sale of financial assets.
For the long-term equity investment acquired by the merger of enterprises under different control, the initial investment cost of thelong-term equity investment is the merger cost on the purchase date. The merger cost includes the sum of the fair value of the assetspaid by the purchaser, the liabilities incurred or assumed by the purchaser and the issued equity securities. If the equity of thepurchased party is acquired through multiple transactions and the merger of enterprises under different control is formed, it might bedealt with as a package transaction. If it is a package transaction, the transactions should be treated as a transaction to obtain the controlright. If it is not a package transaction, the initial investment cost of long-term equity investment shall be calculated according to thebook value of equity investment of the original holder and the sum of additional investment cost. As for the original equity that ismeasured by the equity method, the related other comprehensive earnings shall not be treated for the time being. If the original equityinvestment is a financial asset that can be sold, the difference between the fair value and book value, as well as the cumulative changesin fair value that was originally recorded in other comprehensive gains, are transferred to the current profits and losses.The intermediary expenses such as auditing, legal services, evaluation consultation and other related management expensesincurred by the merger or purchaser for the merger shall be included in the current profits and losses.Equity investments except long-term equity investments formed in the merger of enterprises are initially measured at cost. Sincethe long-term equity investments are acquired in different ways, the investment cost shall be determined in accordance with the actualcash purchase price paid by the company, the fair value of the equity securities issued by the company, the value agreed upon in theinvestment contract or agreement, the fair value or original book value of the assets exchanged in the non-monetary assets exchangetransaction, and the fair value of the long-term equity investment. Expenses, taxes and other necessary expenses directly related to theacquisition of long-term equity investment are also included in the investment cost. For the additional investment which can exert asignificant impact on the invested units or joint control but fails to constitute control, the cost of long-term equity investment is the sumof the fair value of the original equity investment and the additional investment cost in accordance with Accounting Standards forEnterprises No. 22 - Recognition and Measurement of Financial Instruments.
b. Follow-up Measurement and Recognition Method of Profit and Loss
The long-term equity investments that have joint control over the invested entity (except the joint operation) or have significantimpact on the invested entity shall be calculated with equity method. In addition, the cost method is adopted in the financial statements
of the company to control the long-term equity investment of the invested enterprise.
1. Long-Term Equity Investment Based on Cost Method
When the cost method is adopted, long-term equity investment is priced at the initial investment cost, and it needs to add orrecover the cost to adjust the cost of the long-term equity investment. Except for the actual price paid when the investment is obtainedor the declared but not yet paid cash dividend or profit in the consideration, the current investment income shall be recognized inaccordance with the cash dividend or profit declared by the invested unit.
2. Long-Term Equity Investment Based on Equity Method
If the initial investment cost of the long-term equity investment is more than the fair value of the identifiable net assets of theinvested unit when the equity method is used, the initial investment cost of the long-term equity investment shall not be adjusted. If theinitial investment cost is less than the enjoyed fair value of the identifiable net assets of the invested unit, the difference shall beincluded in current profits and losses, and the cost of long-term equity investment shall be adjusted.
When the equity method is adopted, the investment income and other comprehensive income should be recognized respectivelyaccording to the net profit and loss and other comprehensive income of the invested enterprise that should be enjoyed or shared. At thesame time, the book value of long-term equity investment should be adjusted at the same time. The share should be calculatedaccording to the profit or cash dividend declared by the invested enterprise. The book value of long-term equity investment should bereduced accordingly. For other changes in owner's rights and interests, net profit and loss, other comprehensive income and profitdistribution, the book value of long-term equity investment should be adjusted and included in capital reserve. To recognize the enjoyedshare of the net profit and loss of the invested enterprise, the net profit of the invested enterprise shall be adjusted and recognized on thebasis of the fair value of the identifiable assets of the invested enterprise when the investment is obtained. If the accounting policies andperiods adopted by the invested unit are inconsistent with those of the company, the financial statements of the invested unit shall beadjusted according to the accounting policies and periods of the company, and the investment income and other comprehensive incomeshall be confirmed accordingly. For transactions between the company and associated enterprises and joint ventures, when assetsinvested or sold do not constitute business, the unrealized internal trading gains and losses shall be offset by the portion attributable tothe company in proportion to the share enjoyed, and the investment gains and losses shall be recognized on this basis. However, if theunrealized internal trading loss between the company and the invested unit is an impairment loss of the transferred asset, it shall not beoffset. If the invested assets from the company to the joint venture or consortium constitute a business, and investors, therefore obtainthe long-term equity investment, but not gain the control right, the fair value of the invested business is taken as the initial investmentcost of the new long-term equity investment. The difference between the initial investment cost and the book value of the investedbusiness is fully recorded in the current profit and loss. Where the assets sold by the company to a joint venture or consortium constitutea business, the difference between the consideration obtained and the book value of the business shall be fully recorded in the currentprofits and losses. If the assets purchased by the company from the joint venture and consortium constitute the business, the companyshall conduct accounting treatment in accordance with the provisions of the Accounting Standards for Enterprises No. 20 - BusinessCombination to fully recognize the profits or losses related to the transaction.
When recognizing the net loss payable to the invested entity, the book value of the long-term equity investment and otherlong-term equity that substantially constitutes the net investment of the invested unit shall be reduced to zero. In addition, if thecompany is obligated to bear additional losses to the invested unit, the estimated liabilities shall be recognized according to theexpected obligations and recorded into the current investment loss. When the invested unit makes a net profit during a subsequentperiod, the company shall resume the recognition of the income sharing amount after making up for the unrecognized loss sharingamount.
For the long-term equity investment in the joint venture and the joint venture held by the company before the implementation ofthe new Accounting Standards for the first time, if there is a difference between the equity investment debits related to the investment,the straight amortization amount of the original remaining term shall be recorded into the current profit and loss.
3.Purchase Minority Share Holding
When preparing and consolidating the financial statements, the difference between the new long-term equity investment due to thepurchase of minority shares and the net asset share continuously calculated according to the new shareholding ratio since the purchase
date (or merger date) shall be adjusted for the capital reserve. If the capital reserve is insufficient to offset, the retained earnings shall beadjusted.
4. Dispose of Long-term Equity Investments
In the consolidated financial statements, the parent company partially disposes its long-term equity investment in the subsidiarycompany without losing the control right, and the difference between the disposal price and the disposal of long-term equity investmentcorresponding to the net assets of the subsidiary company was recorded into the shareholders' equity.When the parent company losesthe control right of the subsidiary company due to the partial disposal of its long-term equity investment in the subsidiary company, itshall be treated in accordance with the relevant accounting policies described in Appendix IV, 5. D “Methods for PreparingConsolidated Financial Statements”.For the disposal of long-term equity investment under other circumstances, the difference between the book value of the disposedequity and the actual acquired price shall be recorded into the current profit and loss.For long-term equity investment accounted by the equity method, if the residual equity after disposal is still checked by the equitymethod, the other comprehensive income originally included in the shareholders' equity shall be accounted by the same basis as thedirect disposal of relevant assets or liabilities by the invested unit in accordance with the corresponding proportion at the time ofdisposal. Owners' equity recognized due to changes in owners' equity other than net gains and losses of the invested unit, othercomprehensive income and profit distribution shall be converted into current profits and losses in proportion.As to a long-term equity investment measured by the cost method still uses the cost accounting method after the disposal of theremaining stake, before its control on the invested unit, other comprehensive incomes confirmed by the equity method or financialinstrument and checked by measurement criteria conduct the same accounting treatment with the same basis as the direct disposal ofrelevant assets or liabilities by the invested unit, and the current profits and losses shall be carried forward in proportion; changes inowners' equity other than net profit and loss, other comprehensive incomes and profits distribution in net assets of invested unitsconfirmed by the equity method shall be carried forward to current profits and losses in proportion.
If the company loses the control on the invested unit due to the disposal of partial equity investment, when preparing individualfinancial statements, in case that the residual equity after disposal can exert common control or significant influence on the investedunit, it shall be accounted according to the equity method, and the residual equity shall be treated as self-acquired and adjusted by theequity method; if the residual equity after disposal cannot be jointly controlled or exert significant influence on the invested unit, it shallbe confirmed by financial instrument relevant provisions of measurement standards, and the difference between its fair value and bookvalue on the date of loss of control shall be recorded into current profits and losses. Before the company gaining the control on theinvested unit, other comprehensive incomes confirmed by equity method or financial instrument and measurement standards shall betreated on the same basis as the invested unit directly disposes related assets or liabilities when losing the control on the invested unit.Changes in owners' equity other than net profit and loss, other comprehensive incomes and profits distribution in the net assets of theinvested unit confirmed by the equity method are carried forward into current profits and losses when losing the control over theinvested entity. When the residual equity after disposal is checked by the equity method, other comprehensive incomes and otherowners' equity shall be carried forward in proportion; if the remaining equity after disposal is processed according to financialinstrument and measurement standards, all other comprehensive incomes and other owners' equity shall be carried forward.
If the company loses the common control or significant influence on the invested unit due to the disposal of partial equityinvestments, the remaining equity after disposal shall be calculated according to the financial instrument and measurement standards,and the difference between the fair value and the book value on the date of the loss of the common control or significant impact shall berecorded into the current profit and loss. Other comprehensive incomes of the original equity by using the equity method shall betreated on the same basis as the invested unit directly disposes related assets or liabilities when stop adopting the equity method.Owners' equity confirmed due to changes in owners' equity other than net gains and losses, other comprehensive incomes and profitsdistribution of the invested unit shall be transferred into the current investment income upon termination of the equity method.
The company disposes the equity investment of subsidiary company step by step through multiple transactions until losing controlright. If the above transaction belongs to the package deal, each transaction will be treated as one deal to dispose the equity investmentof subsidiary company and lose control right. The difference between each disposal price and the book value of long-term equity
investment corresponding to the disposed equity before losing the control right shall be first confirmed as other comprehensive incomeand then transferred into the current profit and loss when losing the control right.
15. Investment Property
The investment property is one that is held for rent, capital appreciation or both. It includes the use right of leased land, the landuse right transferred after holding and preparing for appreciation, and the leased buildings. In addition, if the board of directors makesa written resolution to use the vacant buildings held by the company for operating and leasing, and they makes it clear that the intentionof operating, leasing and holding the building will not change in a short term, the building will also be as investment property.The investment property is initially measured by cost. Subsequent expenditures related to the investment property are included inthe cost of the investment property if the economic benefits related to the assets are likely to flow in and reliably measured. Othersubsequent expenditures shall be recorded into current profits and losses when incurred.The company uses the cost model to carry out follow-up measurement of the investment property, and carries out depreciation oramortization in accordance with the policy consistent with the building or land use right.
Refer to Appendix IV. 21 "Impairment of Long-term Assets" for the impairment test method and impairment provision method ofinvestment property.
When the self-used real estate property or inventory is converted into investment property or the investment property is convertedinto self-used property, the book value before conversion shall be taken as the converted entry value.
When the investment property is disposed of, or permanently withdrawn from use, and it is expected that no economic benefit canbe obtained from its disposal, the recognition of the investment property shall be terminated. The disposal income of selling,transferring, scrapping or damaging the investment property shall be recorded into the current profit and loss after deducting its bookvalue and relevant taxes.
16. Fixed Assets
(1) Recognition Criteria of Fixed Assets
Fixed assets refer to the tangible assets held for producing commodities, providing labor services, lease or operation andmanagement with a service life exceeding one accounting year. Fixed assets are recognized only when the economic benefits related tothem are likely to flow into the company and their costs can be reliably measured. Fixed assets are initially measured at cost and takinginto account the impact of estimated disposal costs.
(2) Depreciation Methods of Various Fixed Assets
The depreciation of fixed assets shall be calculated and withdrawn within the service life by using the life average method from thenext month after the fixed assets reaching the intended serviceable state. The service life, expected net salvage value and annualdepreciation rate of all kinds of fixed assets are as follows:
| Type | Depreciation Method | Depreciation Term (Year) | Ratio of Remaining Value (%) | Yearly Depreciation Rate (%) |
| Building | Straight-line Depreciation | 8-50 | 5 | 1.90-12.00 |
| Electronic Equipment | Straight-line Depreciation | 3-10 | 4??5 | 9.50—32.00 |
| Machine Equipment | Straight-line Depreciation | 5-28 | 4??5 | 3.39—19.20 |
| Transportation Equipment | 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 is the amount that the company currently obtains from the disposal of a fixed asset after deductingthe estimated disposal expenses, assuming that the expected service life of the fixed asset is full and in the expected state at the end of
its service life.
(3) Impairment Test Method and Impairment Provision Method for Fixed Assets
Refer to Appendix IV. 21 "Impairment of Long-term Assets" for the impairment test method and impairment provision method offixed assets.
(4) Identification Basis and Valuation Method of Fixed Assets Leased by Financing
The finance lease is a lease that substantially transfers all the risks and rewards related to the ownership of assets, and itsownership may or may not be transferred eventually. Fixed assets leased in the form of finance lease shall be depreciated in accordancewith the policy of owning fixed assets. If the ownership of the leased assets can be reasonably determined upon expiration of the leaseterm, the depreciation shall be accrued within the service life of the leased assets; if it is impossible to reasonably determine that theownership of the leased assets can be acquired upon the expiration of the lease term, the depreciation shall be accrued within the shorterperiod between the lease term and the service life of the leased assets.
(5) Other Instructions
Subsequent expenditures related to a fixed assets, if the economic benefits related to the fixed assets are likely to flow in and arereliably measured, will be included in the cost of the fixed assets and ceased to confirm the book value of the replaced portion. Besides,other subsequent expenditures shall be recorded into current profits and losses when incurred.
The recognition of fixed assets shall be terminated when they are in the disposal state or no economic benefit is expected to begenerated through the use or disposal. The difference of the disposal income of selling, transferring, scrapping or damaging fixed assetsafter deducting its book value and relevant taxes is recorded into current profits and losses.
The company shall review the service life, estimated net residual value and depreciation method of fixed assets at least at the endof each year, and any change occured will be treated as accounting estimate alteration.
17. Construction in Progress
The cost of the construction in progress shall be determined according to the actual project expenditure, including all the projectexpenditure during the construction period, the capitalized borrowing expense before the construction reaching the expected usablestate and other related expenses. The construction in progress is carried over to fixed assets after reaching a scheduled usable state.
Refer to Appendix IV 21 "Impairment of Long-term Assets" for the impairment test method and impairment provision method ofconstruction in progress.
18. Borrowing Expenses
The borrowing expenses include interest on borrowing, amortization of discount or premium, auxiliary expenses and exchangedifference due to foreign currency borrowing. The borrowing expenses generated by purchasing, building or producing the assets thatcould directly meet the capitalization conditions begin to capitalize when the asset expenditures and borrowing expenses have occurred,when the purchasing, building or producing activities necessary for making assets reach a scheduled usable or marketable state havebegun; when the built or produced assets meeting the capitalization conditions reach the a scheduled usable or marketable state, thecapitalization will then be terminated. The remaining borrowing expenses are recognized as costs in the current period.
The interest expenses actually incurred in the current period of the special loan shall be capitalized after deducting the interestincome obtained from the unused loan funds deposited in the bank or the investment income obtained from the temporary investment;the capitalization amount is determined by multiplying the weighted average of the accumulated assets expenditure over the specialborrowing amount by the capitalization rate of the general borrowing. The capitalization rate is calculated according to the weightedaverage interest rate of general borrowings.
Within the capitalization period, the exchange difference of the special foreign currency loans is fully capitalized; the exchangedifference of general foreign currency borrowings shall be recorded into current profits and losses.
Assets meeting capitalization conditions refer to fixed assets, investment property and inventory that could reach a usable ormarketable state after a long period of purchasing, building or producing activities.
If the assets meeting the capitalization conditions are abnormally interrupted in the process of purchasing, building or producing
for a period of more than 3 months, the capitalization of borrowing expenses shall be suspended until the purchasing, building orproducing activities of the assets restart.
19. Intangible Assets
(1) Intangible Assets
The intangible assets refer to the identifiable non-monetary assets that are owned or controlled by the company and have nophysical form.
The intangible assets are initially measured at costs. Expenses related to intangible assets are included in the cost of intangibleassets if the relevant economic benefits are likely to flow into the company and are reliably measured. Expenditure of other itemsbesides this shall be recorded into current profits and losses when incurred.
Land use rights acquired are usually accounted for as intangible assets. For the development and construction of buildings such asfactories, the relevant land use right expenditure and building construction cost are accounted for as intangible assets and fixed assetsrespectively. If the houses and buildings are purchased from outside, the relevant price shall be distributed between the land use rightand the buildings, and if it is difficult to distribute reasonably, they shall all be treated as fixed assets.
When intangible assets with limited service life are available for use, the original value minus the expected net salvage value andthe accumulated amount of impairment provision is amortized by straight line method in average stages within their expected servicelife. Intangible assets with uncertain service life shall not be amortized.
At the end of the period, the service life and amortization method of intangible assets with limited service life shall be reviewed,and any changes shall be treated as alteration in accounting estimates. In addition, the service life of intangible assets with uncertainservice life is also reviewed. If there is evidence showing that the term of intangible assets brings economic benefits to the enterprise isforeseeable, its service life is estimated and amortized according to the amortization policy of intangible assets with limited service life.
(2) Research and Development Expenditures
The expenditure of the company's internal research and development projects is divided into research phase and developmentphase.
The expenditure in the research phase shall be recorded into the profit and loss of the current period when it occurs.
Where the expenditures in the development stage meet the following conditions simultaneously, they shall be recognized asintangible assets, and the expenditures in the development stage that cannot meet the following conditions shall be recorded into theprofits and losses of the current period:
①Being technically feasible to complete the intangible asset so that it can be used or sold;
②Having the intention of completing, using or selling the intangible assets;
③The ways in which intangible assets generate economic benefits include those that can prove the existence of a market for theproducts produced by using such intangible assets or the existence of a market for intangible assets. The intangible assets will be usedinternally and can prove their usefulness;
④Having sufficient technical, financial and other resources to complete the development of the intangible assets and have theability to use or sell the intangible assets;
⑤The development expenditures of the intangible assets can be reliably measured.
When it is impossible to distinguish research and development expenditures, all R&D expenditures incurred shall be accountedinto current profits and losses.
(3) Impairment test method and impairment provision method for intangible assets
Refer to Appendix IV. 21 "Impairment of Long-term Assets" for the impairment test method and impairment provision method ofintangible assets.
20. Long-term Unamortized Expenses
The long-term unamortized expenses refers to expenses that have been occurred but are subject to an apportionment period of
more than one year for the reporting period and subsequent periods. The company's long-term unamortized costs mainly include costsof renovation and land lease. The long-term unamortized expenses are amortized using the straight-line method during the period ofexpected benefit.
21. Long-term Assets Devaluation
For fixed assets, construction in progress, intangible assets with limited service life, investment property measured by cost modeland long-term equity investment in subsidiaries, joint ventures and associated enterprises and other non-current non-financial assets,the company shall decide whether there is any sign of devaluation on the balance sheet date. If there is any indication of devaluation, thecompany will estimate the recoverable amount and conduct an devaluation test. Goodwill, intangible assets with uncertain service lifeand intangible assets that have not yet reached the usable state shall undergo devaluation test every year regardless of whether there isany sign of devaluation.If the devaluation test results show that the recoverable amount of an asset is lower than its book value, the impairment provisionshall be made according to the difference and the impairment loss shall be recorded. The recoverable amount is the higher between thenet amount of the fair value of the asset minus the disposal expenses and the present value of the expected future cash flow of the asset.The fair value of the assets shall be determined according to the price of sales agreement in the fair transaction; if there is no salesagreement but there is an active asset market, the fair value shall be determined according to the bid of the buyer of the asset; if there areno sales agreement nor active market for assets, the fair value of the assets shall be estimated on the basis of the best availableinformation. Disposal costs include legal costs related to asset disposal, related taxes, carriage expenses and direct costs incurred tomake the asset marketable. The present value of the expected future cash flow of the asset is determined by selecting the appropriatediscount rate according to the expected future cash flow generated during the continuous use of the asset and the final disposal. Theasset impairment reserve shall be calculated and recognized on the basis of single asset. If it is difficult to estimate the recoverableamount of single asset, the recoverable amount of the asset group shall be determined by the asset group that the asset belongs to. Agroup of assets is the smallest group of assets that is able to generate independent cash flow.The book value of goodwill separately listed in the financial statements is allocated to the asset group or asset group combinationto expected benefit from the synergies of the enterprise merger during the impairment test. If the test results show that the recoverableamount of the asset group or asset group combination containing the amortized goodwill is lower than its book value, the correspondingimpairment loss shall be recognized. The amount of impairment loss shall first be deducted from the book value of goodwillapportioned to the asset group or asset group combination, and then the book value of other assets shall be deducted proportionallyaccording to the proportion of book value of assets except goodwill in the asset group or asset group combination.Once the above-mentioned asset impairment loss is recognized, it shall not be transferred back to the part whose value is recoveredin the subsequent period.
22. Employee Compensation
The company's employee compensation mainly includes short-term employee compensation, post-resignation benefits, dismissalbenefits and other long-term employee benefits. ??????
Short-term salary mainly includes salary, bonus, allowance and subsidy, employee welfare, medical insurance premium, maternityinsurance premium, industrial injury insurance premium, housing accumulation fund, trade union fund and employee education fund,non-monetary welfare, etc. During the accounting period when the staff and workers provide services to the company, the company willrecognize the actual short-term staff and workers' remuneration as liabilities and record it into the current profit and loss or the cost ofrelevant assets. Among them, non-monetary welfare is measured by fair value.
After leaving office, the benefits mainly include basic endowment insurance, unemployment insurance and annuity. Thepost-service benefit plan includes defined contribution plan and benefit plan. If a predetermined plan is adopted, the correspondingamount payable shall be recorded into the cost of relevant assets or current profits and losses at the time of occurrence. (1) The definedcontribution plan is recognized as a liability according to the fixed expense paid to an independent fund and recorded into the currentprofit and loss or the cost of relevant assets; (2) The defined benefit plan adopts the expected cumulative benefit unit method for
accounting treatment. Specifically, the company will convert the welfare obligations arising from the defined benefit plan into the finalvalue when leaving the office according to the formula determined by the expected cumulative welfare unit law; after that, it isattributed to the service period provided by employees and recorded into current profit and loss or related asset cost.
In order to remove the labor relations with employees before the expiration of labor contract, or putting forward suggestions forthe compensation to encourage employees to voluntarily accept layoff, when the company is unable to unilaterally withdraw the plan orprovide the welfare in the layoff suggestions, the company will confirm the liabilities of employee compensation arising from thetermination benefits and included in the current profits and losses on the earlier date of confirming the related cost of recombinationinvolved in paying for dismiss benefit. But if the dismiss benefit will not be fully paid within twelve months after the end of annualreport period, it will be handled according to salary of other long-term workers.The internal retirement plan shall be handled in the same way as the dismissal benefits mentioned above. The salary and socialinsurance premium paid by the company during the period since the employees stop providing services will be included in the currentprofit and loss (dismissal benefit) when meeting the recognition conditions of expected liabilities.
If other long-term employee benefits provided by the company are in line with the defined contribution plan, accounting treatmentshall be carried out in accordance with the defined contribution plan. In addition, accounting treatment shall be carried out according tothe defined contribution plan.
23. Estimated Liabilities
An estimated liability is recognized when the obligations relating to contingencies meet the following conditions: (1) Thisobligation is an existing one for the company; (2) Compliance with this obligation is likely to result in an outflow of economic benefits;
(3) The amount of the obligation can be measured in a reliable way.
On the balance sheet date, the estimated liabilities are measured according to the best estimate of the expenditure required to fulfillthe relevant current obligations, taking into account the risks, uncertainties and time value of money related to contingencies.
If all or part of the expenses required to pay off the estimated liabilities are expected to be compensated by a third party, thecompensation amount shall be separately recognized as an asset when basically determined to be received, and the confirmedcompensation amount shall not exceed the book value of the estimated liabilities.
(1) Onerous Contract
The onerous contract is a contract in which the inevitable cost of performing contractual obligations exceeds the expectedeconomic benefits. When the pending contract becomes an onerous contract, and the obligations arising from the onerous contract meetthe recognition conditions of the above-mentioned expected liabilities, the part of defined impairment loss (if any) exceeding thecontract assets in the contract estimated loss will recognized as the expected liability.
(2) Reorganization Obligations
For the detailed, formal and publicly announced reorganization plan, the estimated amount of liabilities shall be determined inaccordance with the direct expenditures related to the reorganization, provided that the aforementioned recognition conditions forexpected liabilities are met. Restructuring obligations related to the sales of partial business shall be recognized only when the companypromises to sell a part of the business (namely signing a binding sales agreement).
24. Stock Payment
(1) Accounting Method of Stock Payment
Stock payment is a transaction to grant equity instruments or assume liabilities based on equity instruments in order to obtainservices from employees or other parties. Stock payment is divided into equity-settled stock payment and cash-settled stock payment.
① Equity-settled Stock Payment
The equity-settled stock payment for exchanging employee services is measured by the fair value on the date when granting theemployee equity tool. If the amount of the fair value will only exercise when completing the service in the waiting period or meet theprescribed performance conditions. During the waiting period, based on the best estimate of number of equity tools of feasible right,when the related cost or expenses are accounted in according to straight-line method/exercise immediately after granting, the relevant
cost or expenses are included in the granting date and the capital reserve will increase correspondingly.During each balance sheet date of the waiting period, the company shall make the best estimate and revise the number of equityinstruments expected to exercise the rights based on the latest obtained information such as the change of the number of employees withfeasible rights and other subsequent information. The above estimated impact shall be included in the relevant costs or expenses of thecurrent period and the capital reserve shall be adjusted accordingly.
The equity-settled stock payment to exchange for the services of other parties, if the fair value of the services of other parties couldbe measured reliably, is measured by the fair value of the date that gaining the services from other parties. If the fair value of theservices of other parties could not be measured reliably while the fair value of equity tool could be measured reliably, it is measured bythe fair value of the date that gaining the service of equity tool. The related cost or expenses are included and the stockholders' equityincrease correspondingly.
② Cash-settled Stock Payment
The cash-settled stock payment is measured by the fair value of defined liabilities borne by the company on the basis of stock orother equity tools. If the right is exercisable immediately after granting, it shall be recorded into the relevant cost or expense on the dateof granting, and the liability shall be increased correspondingly; If the right is not feasible until the service during the waiting period iscompleted or the specified performance conditions are met, on each balance sheet date of the waiting period, the service acquiredduring the current period shall be recorded into the cost or expense according to the fair value amount of liabilities borne by thecompany on the basis of the best estimate of the feasible right situation and the liabilities shall be increased correspondingly.
On each balance sheet date and settlement date before the settlement of the relevant liabilities, the fair value of the liabilities shallbe re-measured, and the changes thereof shall be recorded into the profits and losses of the current period.
(2) Modify and Terminate the Relevant Accounting Treatment of the Stock Payment Plan
When the company modifies the stock payment plan, if the modification increases the fair value of the granted equity instrument,the company shall recognize the increase of the acquired service according to the increase of the fair value of the equity instrument. Theincrease of the fair value of equity instruments refers to the difference of the fair value of equity instruments before and after themodification date. If the modification reduces the total fair value of the stock payment or otherwise adopts the method going againstwith the employees, the accounting treatment of the acquired services shall continue as if the change has never occurred, unless thecompany cancels some or all of the granted equity instruments.
During the waiting period, if the granted equity instruments are canceled, the company shall treat the canceled equity instrumentsas accelerated exercise, and immediately record the amount to be recognized in the remaining waiting period into current profits andlosses, and at the same time the capital reserve is confirmed. If the employee or other party is able to choose to meet the conditions ofnon-feasible right but fails to meet during the waiting period, the company will regard it as the cancellation of the grant of equityinstrument.
(3) Accounting treatment of stock payment transactions involving the company and its shareholders or actual controllers
For stock payment transactions involving the company and its shareholders or actual controllers, if one of the settlemententerprises and the enterprises that receiving the services are in the company or the other is outside the company, the company shallconduct accounting treatment in accordance with the following provisions in the consolidated financial statements of the company:
①When the settlement enterprise uses its own equity instruments for settlement, the stock payment transaction shall be treated asequity-settled stock payment and in addition, as cash-settled stock payment.
If the settlement enterprise is an investor of the enterprise that receives services, it shall be recognized as a long-term equityinvestment in the enterprise that receives services according to the fair value of the equity instrument on the date of granting or the fairvalue of the liabilities to be borne, and the capital reserve (other capital reserve) or liabilities shall be recognized at the same time.
②If the enterprise that receives services has no settlement obligation or grant its own equity instruments to its employees, thestock payment transaction shall be treated as equity-settled stock payment; if the enterprise that receives services has settlementobligations and grants its employees an equity instrument other than its own, the stock transaction shall be treated as a cash-settledstock payment.
For stock payment transactions among enterprises within the company, if the enterprise that receives services and the settlemententerprise are not the same one, the confirmation and measurement of the stock payment transactions in the respective financialstatements of the enterprise that receives services and the settlement enterprise shall be handled in accordance with the aboveprinciples.
25. Preferred Stock, Perpetual Bonds and Other Financial Instruments
(1) Distinction between perpetual bond and preferred stock
Financial instruments such as perpetual bonds and preferred stock issued by the company, which meet the following conditions atthe same time, shall be regarded as equity instruments:
①The financial instrument does not include a contractual obligation to deliver cash or other financial assets to another party or toexchange financial assets or liabilities with another party under potential adverse conditions;
②If the enterprise's own equity instruments are required or available to settle such financial instruments in the future, in case thatthe financial instruments are non-derivative ones, the contractual obligation to deliver a variable number of its own equity instrumentsfor settlement shall not be included; if it is derivative instrument, the company can only settle such financial instruments by exchanginga fixed amount with its own equity instruments for a fixed amount of cash or other financial assets.
In addition to financial instruments that can be classified as equity instruments according to the above conditions, other financialinstruments issued by the company shall be classified as financial liabilities.
If the financial instrument issued by the company is a compound one, it shall be recognized as a liability according to the fair valueof the liability component, and the amount deducted the fair value of the liability component according to the amount actually receivedshall be recognized as "other equity instrument". Transaction costs incurred in issuing compound financial instruments shall beapportioned between the liability component and the equity component in proportion to the total issuance price respectively.
(2) Accounting treatment of perpetual bonds and preferred stocks
The relevant interest, dividend (or interest), gain or loss, and gain or loss from redemption or refinancing of perpetual bonds,preferred stocks of financial instruments such as perpetual bonds and preferred stocks classified as financial liabilities shall be includedin the current profits and losses, except for the borrowing expense meeting capitalization conditions (refer to Appendix IV. 18"Borrowing Expenses").
When issuing (including refinancing), repurchasing, selling or canceling the financial instruments classified as equity instrumentssuch as perpetual bonds and preferred stocks, the company deals with it as alteration of equity and the relevant transaction costs arededucted from equity. The distribution of equity instrument holders by the company shall be treated as profit distribution.
The company does not recognize changes in the fair value of equity instruments.
26. Income
(1) Income from Commodity Sales
The general principles for the recognition of income from the sale of commodities by the company are as follows: the company hastransferred the major risks and rewards related to the ownership of commodities to the buyer; the company has neither retained the rightto continue management related to all rights, nor exercised effective control over the goods sold; the amount of income can be measuredreliably; related economic benefits are likely to flow into the enterprise; related costs incurred or to be incurred can be reliablymeasured and the realization of revenue from merchandise sales is confirmed.
The specific principles for the company to confirm the income from sales of commodities are as follows: ① wholesale business:
sales revenue is recognized when the goods have been delivered to the customer and have been signed and confirmed by the customer,and the company has received the payment or obtained the proof of payment claim; ② retail business: sales revenue is recognizedwhen goods have been paid and delivered to customers.
(2) Income of providing labor service
If the result of the transaction of providing labor services can be estimated reliably, the income of providing labor services shall berecognized on the balance sheet date according to the percentage of completion method. The completion schedule of labor transaction
shall be determined according to the measurement of completed work/the proportion of provided labor in the total amount of labor to beprovided/the proportion of incurred labor cost in the estimated total cost.The results of labor service transactions can be reliably estimated is to meet: ① the amount of income can be reliably measured;
② the relevant economic benefits are likely to flow into the enterprise; ③ the completion of the transaction can be reliably determined;
④ the costs incurred and to be incurred in a transaction can be measured reliably.
If the result of labor service transaction cannot be estimated reliably, the labor income provided shall be confirmed according tothe amount of labor cost that has occurred and is expected to be compensated, and the labor cost that has occurred shall be taken ascurrent expenses. If the labor cost that has occurred is not expected to be compensated, the income will not be recognized.Processing business of supplied materials (charging processing fee): the income of processing fee shall be confirmed when theprocessing fee has been charged or the relevant credentials of charging processing fee have been obtained after the relevantcommodities have been processed and delivered to the customer.Contracts or agreements signed between the company and other enterprises include the sales of goods and the provision of laborservices. If the parts of goods sold and services provided can be distinguished and measured separately, the parts of goods sold andservices provided shall be handled separately.If the parts of goods sold and services provided cannot be distinguished, or if the parts canbe distinguished but cannot be measured separately, all the contract shall be treated as sales of goods.
(3) Income of transferring the use right of assets
When the economic benefits related to the transaction are likely to flow into the enterprise and the amount of income can bemeasured reliably, the amount of income from transferring the use right of assets shall be determined in the following ways: ①intererst income amount is calculated and determined according to the time of using the monetary capital of the company and actualinterest rate; ② the income of use right of trademark is calculated and determined by co-agreed payment time and method of use rightof trademark.
27. Government Subsidy
Government subsidy means that the company obtains monetary assets and non-monetary assets freely from the government,excluding the capital invested by the government as an investor and enjoying the corresponding owner's equity. Government subsidiesare divided into asset-related ones and income-related ones. The company defines the government subsidy obtained for the purchaseand construction of long-term assets or the formation of long-term assets in other ways as the government subsidy related to assets;theremaining government subsidies are defined as income-related government subsidies. If the government document does not clearlyspecify the subsidy objects, the subsidy funds are divided into income-related government subsidies and assets-related governmentsubsidies in the following ways: (1) If the government documents specify the special item targeted by subsidies, the division shall bemade according to the relative proportion of the expenditure amount forming assets and the expenditure amount recorded into expensesin the budget of the specific project. The division proportion shall be reviewed on each balance sheet date and changed if necessary; (2)If the purpose of the government document is only described in general terms and no specific item is specified, it shall be regarded asincome-related government subsidy. When government subsidies are monetary assets, they shall be measured according to the amountreceived or receivable. When government subsidies are non-monetary assets, they shall be measured at their fair value; if the fair valuecannot be obtained reliably, it shall be measured in accordance with the nominal amount. Government subsidies measured in nominalamounts shall be directly accounted into current profits and losses.
The company shall confirm and measure the government subsidy according to the amount actually received when it is actuallyreceived. However, at the end of the period, if there is conclusive evidence that the related conditions meeting stipulations of thefinancial policies is expected to receive financial support funds and it is calculated and measured according to amount receivable. Thegovernment subsidy measured according to the amount receivable shall meet the following conditions at the same time: (1) the amountof allowance receivable has been confirmed by the document of relevant government departments, or can be reasonably calculatedaccording to the relevant provisions of the officially issued financial fund management measures, and it is expected that there is nomajor uncertainty in the amount; (2) based on the financial support project actively publicized by local financial department according
to stipulations in the Regulation of Government Information Disclosure and its financial fund management method which shall beinclusive (any enterprise that meets the conditions could apply for) other than specially made for specific enterprise; (3) The approvaldocument of the relevant subsidies, the time limit for the appropriation of the funds has been clearly promised, and the appropriation ofthe funds is guaranteed by the corresponding financial budget, so it can be reasonably guaranteed that the funds can be received withinthe specified time limit; (4) Other relevant conditions that should be satisfied according to the specific situation of the company and thesubsidy.Assets-related government subsidies shall be recognized as deferred income, and shall be recorded into current profits and lossesor offset the book value of relevant assets in reasonable and systematic ways within the service life of relevant assets. Income-relatedgovernment subsidies, which are used to compensate related expenses or losses in subsequent periods, shall be recognized as deferredincome, and shall be recorded into current profits and losses or offset related costs during the period of recognition of related expensesor losses; if it is used to compensate the related costs or losses already incurred, it shall be directly recorded into the current profits andlosses or offset the related costs.At the same time, it includes government subsidies related to assets and income, and makes accounting treatment for differentparts. If it is hard to distinguish, it is classified as income-related government subsidies.Government subsidies related to the company's daily activities shall be included into other earnings or offset related costsaccording to the nature of economic business; the government subsidies unrelated to daily activities shall be included intonon-operating income and expenditure.
When the recognized government subsidy needs to be returned, the book balance of relevant deferred income shall be offset, andthe excess shall be recorded into the current profits or losses or the book value of the relevant government subsidy and adjusted assetthat has been written off during the initial recognition.In other cases, it shall be directly recorded into current profits and losses.
28. Deferred Income Tax Assets/Liabilities
(1) Income Tax of Current Period
On the balance sheet date, the current income tax liabilities (or assets) formed in the current and previous periods are measured bythe expected amount of income tax payable (or returned) in accordance with the provisions of the Tax Law. The amount of taxableincome on which current income tax expenses are calculated is based on the corresponding adjustment of pretax accounting profits inthe reporting period in accordance with the relevant tax laws.
(2) Deferred Income Tax Assets/Liabilities
The difference among the book value of certain assets and liabilities and their tax base, as well as the temporary differencebetween the book value of items not recognized as assets and liabilities and the difference between the book value of items that candetermine their tax base and the tax base according to the tax law, adopts the balance sheet liabilities method to confirm the deferredincome tax assets and liabilities.
The deferred tax liability shall not be recognized if it relates to the initial recognition of goodwill or the taxable temporarydifferences related to the initial recognition of assets or liabilities arising from a transaction that is neither a business combination noroccurs and does not affect accounting profits and taxable income (or deductible losses). In addition, the deferred income tax liabilitiesrelated to taxable temporary differences related to investments of subsidiaries, associated enterprises and joint ventures shall not berecognized if the company can control the time when the temporary differences are reversed and such temporary differences areunlikely to be reversed in the foreseeable future. Besides the above situations, the company acknowledges all other taxable temporarydifferences arising from deferred tax liabilities.
The deferred tax assets shall not be recognized for the deductible temporary differences that are related to the initial recognition ofassets or liabilities arising from transactions that are neither a business combination nor occur and do not affect accounting profits andtaxable income (or deductible losses). In addition, the deferred tax assets related to the deductible temporary differences related toinvestments of subsidiaries, associated enterprises and joint ventures shall not be recognized if the temporary differences are not likelyto be reversed in the foreseeable future or the taxable income amount used to offset the deductible temporary differences is not likely tobe obtained in the future. Besides the above situations, the company shall recognize the deferred tax assets arising from other deductible
temporary differences to the limit of the taxable income amount that is likely to be obtained to offset the deductible temporarydifferences.For the deductible losses and tax deductions that can be carried forward in the following years, the corresponding deferred taxassets shall be recognized to the limit of the future taxable income that is likely to be used to offset the deductible losses and taxdeductions.On the balance sheet date, the deferred income tax assets and liabilities shall be measured according to the applicable tax ratesduring the expected collection of related assets or repayment of related liabilities according to the provisions of the tax law.On the balance sheet date, the book value of the deferred income tax asset is reviewed. If it is likely that sufficient taxable incomeamount cannot be obtained to offset the benefits of the deferred income tax assets in the future, the book value of the deferred incometax assets will be written down. When it is likely to obtain sufficient taxable income, the amount written down shall be reversed.
(3) Expenses of Income Tax
Income tax expenses include current income tax and deferred income tax.In addition to defined other comprehensive income or current income tax and deferred income tax related to the transactions anditems directly included in to stockholder equity, as well as the book value of goodwill adjustment of deferred income tax arising fromenterprise merger, the rest current income tax and deferred income tax expenses or benefit will be included into the current profits andlosses.
(4) Offset of Income Tax
Where the company has a legal right to settle in net and the intention is to settle in net or to acquire assets and liquidate liabilitiessimultaneously, the company's current income tax assets and liabilities are declared with the offset net amount.When having the legal right to settle current income tax assets and liabilities on a net basis, and the deferred income tax assets andliabilities are related to the income tax levied by the same tax collection and administration department on the same tax payer or todifferent tax payers, however, for each significant period in the future during which deferred tax assets and liabilities are rolled back,when the taxpayer concerned intends to settle the income tax assets and liabilities of the current period on a net basis or acquire assetsand pay off liabilities at the same time, the company's deferred income tax assets and liabilities are declared with the offset net amount.
29. Lease
The finance lease is a lease that substantially transfers all the risks and rewards related to the ownership of assets, and itsownership may or may not be transferred eventually. Leases other than finance leases are operating leases.
(1) The company records and operates the leasing business as the lessee
The rental expenditure of operating lease shall be recorded into the cost of relevant assets or current profits and losses in eachperiod of the lease period according to the straight-line method. Initial direct expenses are included into current profits and losses.Contingent rents are recorded as current profits and losses when actually incurred.
(2) The company records and operates the leasing business as the leaser
The rental income of the operating lease shall be recognized as current profits and losses according to the straight-line methodduring the leasing period. The initial direct expenses with a large amount shall be capitalized at the time of occurrence, and shall berecorded into the profits and losses of the current period in accordance with the same basic stages as confirmed rental income during thewhole lease period; other initial direct expenses with small amount shall be recorded into current profits and losses when incurred.Contingent rents are recorded as current profits and losses when actually incurred.
(3) The company records financial leasing business as lessee
At the beginning of the lease period, the lower between the fair value of the leased assets at the lease beginning date and the presentvalue of the minimum lease payment is taken as the recorded value of the leased assets. The minimum lease payment is taken as thelong-term payable account value, and the difference is taken as the unrecognized financing expense. Besides, the initial direct costsattributable to the leasing project incurred during the lease negotiation and signing of the lease contract are also included in the value ofthe leased assets. The balance of the minimum lease payment after deducting unrecognized financing expenses is shown as long-termliabilities and long-term liabilities due within one year respectively.
The unrecognized financing expense shall be calculated and confirmed by the effective interest rate method during the lease term.Contingent rents are recorded as current profits and losses when actually incurred.
(4) The company records financial leasing business as lessor
On the beginning date of the lease term, the sum of the minimum lease receipt and the initial direct expenses on the beginning dateof the lease shall be taken as the recorded value of the finance lease receivable, and the unguaranteed residual value shall berecorded.The difference between the sum of the minimum lease receipts, initial direct expenses and unguaranteed residual value and thesum of its present value is recognized as unrealized financing income. The balance of the finance lease receivables after deducting theunrealized financing income shall be presented as long-term claims and long-term claims due within one year respectively.
During the lease term, the unrealized financing income is calculated and confirmed by using the effective interest rate method.Contingent rents are recorded as current profits and losses when actually incurred.
30. Other Important Accounting Policies and Estimates
(1) Termination of Operation
Termination of operation means a component that has been disposed of or classified as being held for sale by the company andwhich can be distinguished separately in operations and preparation of financial statements that meets one of the following conditions:
① this component represents an independent principal business or a major area of operation; ② the component is part of a plan todispose an independent major business or a main area of operation; ③ the component is a subsidiary acquired solely for resalepurpose.
(2) Hedge Accounting
Hedging refers to a risk management activity that the company, in order to manage the risk exposure caused by the specific riskssuch as foreign exchange risk, interest rate risk, price risk and credit risk, designates the financial instrument as hedging instrument anduses the fair value or cash flow of the hedging instrument to expected to offset all or part of the changes in fair value or cash flow of ahedged item. For the hedging instrument that simultaneously meets the following conditions, the company shall use the hedgeaccounting method to deal with:
The hedging relationship consists only of qualified hedging instrument and hedged item;
At the beginning of the hedging, the company formally specifies the hedging instrument and hedged item, and prepares the writtendocument about the hedging relationship and risk management strategy & target of the enterprise engaged in hedging. The documentshall at least specify the hedging instrument, hedged item, nature of the hedged risk and hedging effectiveness evaluation method(including the cause analysis of the ineffective part of hedging and the hedging ratio determination method) and other contents;
The hedging relationship conforms to the requirements of hedging effectiveness.
The hedging effectiveness refers to the extent to which the changes in the fair value or cash flow of the hedging instrument canoffset the changes in the fair value or cash flow of the hedged item caused by the hedged risk. The part where the change in the fairvalue or cash flow of the hedging instrument is greater or less than that of the hedged item is the invalid part of hedging.
When the fair value hedge meets the conditions for using the hedge accounting method, the company shall handle it in accordancewith the following provisions:
The profits or losses generated by the hedging instrument shall be recorded into the current profits and losses. If the hedgeinstrument is hedging a non-tradable equity instrument investment (or its component part) which is measured at fair value and whosechanges are included in other comprehensive incomes, the profits or losses generated by the hedge instrument shall be included in othercomprehensive incomes.
The gains or losses of the hedged item due to the hedged risk exposure are recorded into the current profits and losses, and thebook value of the recognized hedged item which is not measured at fair value is adjusted at the same time. If the hedged item is afinancial asset (or its component part) measured at fair value and its changes are included in other comprehensive incomes, the profitsor losses of the hedged risk exposure are included in the current profits and losses, and its book value has been measured at fair valueand no adjustment is needed; if the hedged item is a non-tradable equity instrument investment (or its component part) which ismeasured at fair value and whose changes are included in other comprehensive incomes of the company, the gains or losses of the
hedged risk exposure are included in other comprehensive incomes, and its book value has been measured at fair value and noadjustment is needed.If the hedging of cash flow meets the conditions of using the hedge accounting method, the company shall handle it in accordancewith the following provisions:
The profits or losses generated by the hedging instrument shall be the effective part of the hedging and shall be included in othercomprehensive incomes as the cash flow hedging reserve.
The amount of cash flow hedge reserve shall be determined according to the lower absolute amount of the following two items:
- The accumulated profits or losses of the hedging instrument from the beginning of hedging;
- The cumulative change in the present value of the estimated future cash flow of the hedged item since the beginning of thehedging. The amount of cash flow hedging reserve booked into other comprehensive incomes in each period shall be taken as thechange amount of cash flow hedging reserve in the current period.
In the profits or losses generated by the hedging instrument, the part that is invalid in the hedging (that is, the other profits or lossesdeducting other comprehensive incomes) shall be recorded into the current profits or losses.
31. Changes in Important Accounting Policies and Estimates
(1) Changes in Accounting Policies
Since March 31, 2017, the Ministry of Finance has revised and promulgated No.22 Accounting Standards for Business Enterprises- Confirmation and Measurement of Financial Instruments (Cai Kuai [2017] No.7), No.23 Accounting Standards for BusinessEnterprises - Transfer of Financial Assets (Cai Kuai [2017] No.8), No.24 Accounting Standards for Business Enterprises – HedgingAccounting (Cai Kuai [2017] No.9) and No.37 Accounting Standards for Business Enterprises –Presentation of Financial Instruments(Cai Kuai [2017] No.14) (collectively referred to as the "new financial instruments guidelines") which are required to be implementedin domestic listed companies from January 1, 2019. The company shall make changes to its accounting policies in accordance with theprovisions and requirements of the above new standards and notices of financial instruments. In May 2019, the Ministry of Finance hasrevised and promulgated No.7 Accounting Standards for Business Enterprises - Non-monetary Assets Exchange (Cai Kuai [2019] No.8)and No.12 Accounting Standards for Business Enterprises - Debt Restructuring (Cai Kuai [2019] No.9) are respectively required to beimplemented within the enterprises that exercising the Accounting Standards for Business Enterprises since June 10, 2019 and June 17,2019. According to the above two standards, the company changes and adjusts the original accounting policies and relevant accountingitems. According to the cohesion rules between old and new standards, enterprises shall adjust the non-monetary assets exchange anddebt restructuring occurred between January 1, 2019 and the implementation date according to the standards, and do not requireretroactive adjustment for the non-monetary assets exchange and debt restructuring occurred before January 1, 2019. That is to say, inthe 2019 semi-annual financial reports and the subsequent period, if the information presented in the comparative financial statementsis inconsistent with the requirements of the standards, there is no need to make retroactive adjustment.
(2) Changes in Accounting Estimates
The main accounting estimates have not changed during the reporting period.Ⅴ. Tax
1. Main Taxes and Tax Rates of the Company
| Tax Category | Taxation Basis | Tax Rate |
| Value Added Tax | Income from sales of goods, Taxable Labor Service and Taxable Service | 0、3%、5%、6%、9%、10%、13%、16% |
| Urban Maintenance and Construction Tax | Actual Payment of Turnover Tax | 5%、7% |
| Education Surcharge | Actual Payment of Turnover Tax | 3% |
| Tax Category | Taxation Basis | Tax Rate |
| Local Education Surcharge | Actual Payment of Turnover Tax | 1.5%、2% |
| Enterprise Income Tax | Taxable Income | 10%、15%、17%、25% |
| House Property Tax | The tax base is 70% of the original value of the property (or rental income) | 1.2%、8%、12% |
Description of tax payers of different enterprise income tax rates:
| Name of Taxpayer | Income Tax Rate |
| Linan Chunmanyuan Agricultural Development Co., Ltd. | 10% |
| Beijing Guchuan Bread Food Co., Ltd. | 15% |
| Jingliang (Singapore) International Trading Limited | 17% |
2. Tax Incentives and Approvals
Hangzhou Linan Angel Food Co., Ltd., the level 4 subsidiary of the company, is a welfare enterprise, enjoying the preferentialpolicy of immediate collection and refund of VAT of 35,000 Yuan per year for each the disabled from January to April in 2015 and2016, and the preferential policy of immediate collection and refund of VAT limit in Notice on Preferential VAT Policy for theEmployment of Disabled Persons (Cai Shui [2016] No.52) since May 2016.According to the stipulations in Notice on Preferential Policies for Enterprise Income Tax Concerning Employment of DisabledPersons (Cai Shui [2009] No.70) issued by the Ministry of Finance and State Bureau of Taxation, Hangzhou Linan Angel Food Co.,Ltd., the level 4 subsidiary of the company, when employing the disabled, on the basis of the actual deduction of the wages paid to thedisabled employees, an additional deduction of 100% of the wages paid to the disabled employees may be made when calculating thetaxable income amount.According to the Zhejiang Provincial Tax Bureau Announcement (2014 No.8) and approval of local tax department, HangzhouLinan Angel Food Co., Ltd., the level 4 subsidiary of the company, could enjoy the preferential policies of reduction of urban land useright tax with an annual quota of 2,000 person/year for an annual average number of actual employment. And the maximum amount ofreduction shall be the urban land use tax payable by the unit in the current year.The stamp tax of Linqing Xiaowangzi Food Co., Ltd., the level 4 subsidiary of the company shall be checked and levied at 50% ofthe sales income on the basis of the stamp duty payable in the industrial purchase and sales process stipulated in the No. 10Announcement of Shandong Provincial Tax Service, State Taxation Administration in 2018. The stamp duty paid by LinqingXiaowangzi Food Co., Ltd. from January to September in 2018 shall be calculated as 130% of the sales revenue, and the stamp dutypaid from October 2018 shall be calculated as 50% of the sales revenue.Jingliang (Singapore) International Trade Limited Company, the level 3 subsidiary of the company is taxed according to theprinciple of territory. For newly established Singapore companies, in the first consecutive three-year audit year, they can enjoy thegovernment tax exemption plan for the first three years. The tax exemption plan of Singapore is as follows: the first SGD $100,000 ofannual income, the first SGD $100,000 with a tax rate of 0. The part from $100,001 to $300,000 with a tax rate of 8.5%. The partexceeds SGD $300,000 with a tax rate of 17%.Beijing Guchuan Food Co., Ltd., the level 3 subsidiary of the company is a new high-tech enterprise and gains the New High-techEnterprise Certificate (Certificate No. GR201811007245) with the period of validity of three years on November 30, 2018. Accordingto the Law of the People's Republic of China on the Administration of Tax Collection and Detailed Rules for the Implementation of theLaw of the People's Republic of China on the Administration of Tax Collection and other relevant provisions, the enterprise income taxshall be paid at a preferential tax rate of 15%.
According to [Cai Shui Zi. [1999] No.198] Document of Notice of the State Administration of Taxation of the Ministry of Finance
on the Exemption of VAT for Grain Enterprises, Jingliang (Hebei) Grease Industrial Co., Ltd., the level 4 subsidiary of the company isexempted from the SAT for the sales of government reserved edible vegetable oil.According to Article V of Notice of the State Administration of Taxation of the Ministry of Finance on the Exemption of VAT forGrain Enterprises (Cai Shui Zi (1999) No.198), Beijing Tianweikang Grease Distribution Center Co., Ltd., the level 3 subsidiary of thecompany is one of the state-owned grain purchasing and selling enterprises that undertake the task of purchasing and storing grain,other grain trading enterprises that operate the duty-free items listed in this circular, as well as the enterprises that sell governmentreserved edible vegetable oils, which is required to verify the tax exemption qualification by the competent tax authorities. Without theapproval of the competent tax authorities, no tax exemption is allowed. As of June 1, 2017, the company will be exempt from VAT forthe government reserved edible vegetable oil.Ⅵ. Notes to Key Items in Consolidated Financial Statements(The following units are RMB yuan unless otherwise specified)Appendix 1 Monetary Capital
| Program | Ending Balance | Beginning Balance |
| Cash on Hand | 60,478.21 | 46,418.17 |
| Bank Deposit | 607,608,193.13 | 794,705,225.28 |
| Other Monetary Funds | 54,528,313.35 | 130,118,373.33 |
| Total | 662,196,984.69 | 924,870,016.78 |
The restricted monetary funds are listed below:
| Program | Ending Balance | Beginning Balance |
| Fixed Deposit Receipt | 35,000,000.00 | 57,000,000.00 |
| Freezing of Litigation Preservation | 2,068,225.55 | |
| Total | 37,068,225.55 | 57,000,000.00 |
Note: as of June 30, 2019, the limited monetary funds of the company are the freezing of litigation preservation of Beijing GrainHolding Company and fixed deposit receipt of its subsidiary Xiaowangzi. See Note 48 for details.Appendix 2 Derivative Financial Assets
| Program | Ending Balance | Beginning Balance |
| Futures Contract | 58,421,469.00 | 71,260,414.60 |
| Total | 58,421,469.00 | 71,260,414.60 |
Note: the derivative financial assets of the company are futures contracts of soybean oil, palm oil, rapeseed oil and bean pulp purchasedby level 3 and level 4 subsidiaries.Appendix 3 Account Receivable
1. Classified Disclosure of Accounts Receivable
| Type | Ending Balance | ||||
| Book Balance | Bad-debt Provision | Book Value | |||
| Amount | Ratio (%) | Amount | Accrual Ratio (%) | ||
| The accounts receivable for which provision for bad debts is made on a single item basis | 420,575.29 | 0.45 | 420,575.29 | 100.00 | 0.00 |
| Include?? | |||||
| Accounts receivable for which a single amount is not significant but is separately made for bad debt provision | 420,575.29 | 0.45 | 420,575.29 | 100.00 | 0.00 |
| Accounts receivable for bad debt provision on a combined basis | 93,014,185.12 | 99.55 | 613,961.00 | 0.66 | 92,400,224.12 |
| Include?? | |||||
| Group 1- Accounts Receivable Analyzed by Aging | 79,240,767.38 | 4.81 | 613,961.00 | 0.77 | 78,626,806.38 |
| Group 2-Accounts Receivable of Related parties | 13,773,417.74 | 14.74 | 13,773,417.74 | ||
| Total | 93,434,760.41 | 100.00 | 1,034,536.29 | 1.11 | 92,400,224.12 |
Continue:
| Type | Beginning Balance | ||||
| Book Balance | Bad-debt Provision | Book Value | |||
| Amount | Ratio (%) | Amount | Accrual Ratio (%) | ||
| The accounts receivable for which provision for bad debts is made on a single item basis | 420,575.29 | 0.43 | 420,575.29 | 100.00 | |
| Include: | |||||
| Accounts receivable for which a single amount is not significant but is separately made for bad debt provision | 420,575.29 | 0.43 | 420,575.29 | 100.00 | |
| Accounts receivable for bad debt provision on a combined basis | 98,222,012.82 | 99.57 | 446,302.71 | 0.45 | 97,775,710.11 |
| Include: | |||||
| Group 1- Accounts Receivable Analyzed by Aging | 94,766,012.02 | 96.07 | 446,302.71 | 0.47 | 94,319,709.31 |
| Group 2-Accounts Receivable of Related parties | 3,456,000.80 | 3.50 | 3,456,000.80 | ||
| Total | 98,642,588.11 | 100.00 | 866,878.00 | 0.88 | 97,775,710.11 |
① Provision for bad debts on an individual basis:
| Name | Ending Balance | |||
| Book Balance | Bad-debt Provision | Accrual Ratio | Accrual Reason | |
| Accounts receivable for which a single amount is not significant but is separately made for bad debt provision | 420,575.29 | 420,575.29 | 100.00% | |
| Total | 420,575.29 | 420,575.29 | -- | -- |
② Provision for Bad debt by Group:
| Name | Ending Balance | ||
| Book Balance | Bad-debt Provision | Accrual Ratio | |
| The accounts receivable for which bad debt provisions are drawn according to a combination of credit risk features | |||
| Group 1-Accounts Receivable Analyzed by Aging | 79,240,767.38 | 613,961.00 | 0.77 % |
| Group 2-Accounts Receivable of Related parties | 13,773,417.74 | ||
| Total | 93,014,185.12 | 613,961.00 | 0.66% |
③ In the group, the accounts receivable for bad debt provision is drawn according to aging method
| Aging | Ending Balance | |||
| Account Receivable | Bad-debt Provision | Net Amount | Accrual Ratio (%) | |
| Within the Credit Period | 51,654,362.52 | 0 | 51,654,362.52 | 0 |
| Within 1 Year (From Credit Period to 1 Year) | 20,367,681.03 | 301,504.54 | 20,066,176.49 | 2 |
| 1-2 Years | 7,095,303.83 | 260,646.46 | 6,834,657.37 | 5 |
| 2-3 Years | 33,000.00 | 6,600.00 | 26,400.00 | 20 |
| 3-4 Years | 90,420.00 | 45,210.00 | 45,210.00 | 50 |
| 4-5 Years | 80 | |||
| Above 5 Years | 100 | |||
| Total | 79,240,767.38 | 613,961.00 | 78,626,806.38 | ----- |
Continue:
| Aging | Beginning Balance | |||
| Account Receivable | Bad-debt Provision | Net Amount | Accrual Ratio (%) | |
| Within the Credit Period | 82,537,774.17 | 0.00 | 82,537,774.17 | 0 |
| Within 1 Year (From Credit Period to 1 Year) | 6,840,738.97 | 136,814.78 | 6,703,924.19 | 2 |
| 1-2 Years | 5,264,078.88 | 263,203.93 | 5,000,874.95 | 5 |
| 2-3 Years | 51,420.00 | 10,284.00 | 41,136.00 | 20 |
| 3-4 Years | 72,000.00 | 36,000.00 | 36,000.00 | 50 |
| 4-5 Years | 80 | |||
| Above 5 Years | 100 | |||
| Total | 94,766,012.02 | 446,302.71 | 94,319,709.31 | ----- |
The accounts receivable at the end of this report do not include the debts owed by shareholders holding more than 5% (including5%) of the voting shares of the company.
2. The top five accounts receivable of the ending balance collected by the debtors
Appendix 4 Advance Payment
1． Advance Payments is shown by aging
| Aging | Ending Balance | ||
| Prepayment | Ratio (%) | Bad-debt Provision | |
| Within 1 Year | 137,747,931.14 | 99.77 | |
| 1-2 Years | 294,493.70 | 0.21 | |
| 2-3 Years | 23,100.00 | 0.02 | |
| Above 3 Years | |||
| Total | 138,065,524.84 | 100.00 | |
Continue:
| Aging | Beginning Balance | ||
| Prepayment | Ratio (%) | Bad-debt Provision | |
| Within 1 Year | 119,883,849.19 | 99.75 | |
| 1-2 Years | 297,593.70 | 0.25 | |
| 2-3 Years | |||
| Above 3 Years | |||
| Total | 120,181,442.89 | 100.00 | |
| Unit Name | Ending Balance | Percentage in the Ending Balance of Accounts Receivable (%) | Accrued Bad Debt Provision | Payment Nature |
| Client I | 13,600,135.00 | 14.56 | Compensation for Demolition | |
| Client II | 12,243,795.07 | 13.10 | 128,837.15 | Loan |
| Client III | 10,013,730.00 | 10.72 | Loan | |
| Client IV | 4,151,738.67 | 4.44 | Loan | |
| Client V | 2,996,528.59 | 3.21 | Loan | |
| Total | 43,005,927.33 | 46.03 | 128,837.15 |
2． Advance payments in the top five of the ending balance grouped by prepaid objects
| Unit Name | Ending Amount | Percentage in total prepayment (%) | Prepayment Time |
| Supplier I | 65,948,802.82 | 47.77 | Within 1 Year |
| Supplier II | 19,690,200.00 | 14.26 | Within 1 Year |
| Supplier III | 17,837,825.26 | 12.92 | Within 1 Year |
| Supplier IV | 6,746,420.81 | 4.89 | Within 1 Year |
| Supplier V | 3,739,509.13 | 2.71 | Within 1 Year |
| Total | 113,962,758.02 | 82.54 |
No shareholder holding more than 5% (including 5%) of the voting shares of the company is in arrears of the advance payment atthe end of the present report.Appendix 5 Other Receivables
| Program | Ending Balance | Beginning Balance |
| Interest Receivable | 3,199,806.95 | 2,400,877.51 |
| Dividend Receivable | ||
| Other Receivables | 41,573,586.49 | 15,855,636.42 |
| Total | 44,773,393.44 | 18,256,513.93 |
1. Other Receivables
(1) Classified Disclosure of Other Receivables
| Type | Ending Balance | ||||
| Book Balance | Bad-debt Provision | Book Value | |||
| Amount | Ratio (%) | Amount | Accrual Ratio (%) | ||
| Other Receivables with Significant Single Amount and Separate Bad Debt Provision | |||||
| Other receivables for which bad debt provisions are drawn according to the combination of credit risk features | |||||
| Group 1 - Other Receivables Analyzed by Aging | 41,950,549.98 | 100.00 | 376,963.49 | 0.90 | 41,573,586.49 |
| Group 2 - Other Receivables of Related Parties | |||||
| Group Total | 41,950,549.98 | 100 | 376,963.49 | 0.90 | 41,573,586.49 |
| Other receivables for which the bad debt provision is drawn separately, although the amount is not significant | |||||
| Total | 41,950,549.98 | 100 | 376,963.49 | 0.90 | 41,573,586.49 |
Continue:
| Type | Beginning Balance | ||||
| Book Balance | Bad-debt Provision | Book Value | |||
| Amount | Ratio (%) | Amount | Accrual Ratio (%) | ||
| Other Receivables with Significant Single Amount and Separate Bad Debt Provision | |||||
| Other receivables for which bad debt provisions are drawn according to the combination of credit risk features | |||||
| Group 1 - Other Receivables Analyzed by Aging | 16,152,562.64 | 99.88 | 296,926.22 | 1.84 | 15,855,636.42 |
| Group 2 - Other Receivables of Related Parties | |||||
| Group Total | 16,152,562.64 | 99.88 | 296,926.22 | 1.84 | 15,855,636.42 |
| Other receivables for which the bad debt provision is drawn separately, although the amount is not significant | 20,000.00 | 0.12 | 20,000.00 | 100.00 | |
| Total | 16,172,562.64 | 100 | 316,926.22 | 1.96 | 15,855,636.42 |
Description of categories of other receivables:
①Group 1, other receivables are drawn for bad debt provision according to aging analysis method
| Aging | Ending Balance | |||
| Other Receivables | Bad-debt Provision | Net Amount | Accrual Ratio (%) | |
| Within the Credit Period | 28,523,485.24 | - | 28,523,485.24 | 0 |
| Within 1 Year | 10,765,038.62 | 164,579.97 | 10,600,458.65 | 2 |
| 1-2 Years | 2,406 ,104.12 | 125,699.12 | 2,280 ,405.00 | 5 |
| 2-3 Years | 30,000.00 | 1,500.00 | 28,500.00 | 20 |
| 3-4 Years | 175,922.00 | 35,184.40 | 140,737.60 | 50 |
| 4-5 Years | 80 | |||
| Above 5 Years | 50,000.00 | 50,000.00 | 100 | |
| Total | 41,950,549.98 | 376,963.49 | 41,573,586.49 | ----- |
Continue:
The bad debt provision for the current period is 60,037.27 YuanOther accounts receivable at the end of this report do not include the debts owed by shareholders holding more than 5% (including5%) of the voting shares of the company.
(2) Classification of Other Receivables According to the Nature of the Money
| Aging | Beginning Balance | |||
| Other Receivables | Bad-debt Provision | Net Amount | Accrual Ratio (%) | |
| Within the Credit Period | 9,060,501.22 | 9,060,501.22 | 0 | |
| Within 1 Year | 4,385,505.15 | 87,710.10 | 4,297,795.05 | 2 |
| 1-2 Years | 2,480,634.27 | 124,031.72 | 2,356,602.55 | 5 |
| 2-3 Years | 175,922.00 | 35,184.40 | 140,737.60 | 20 |
| 3-4 Years | 50 | |||
| 4-5 Years | 80 | |||
| Above 5 Years | 50,000.00 | 50,000.00 | 100 | |
| Total | 16,152,562.64 | 296,926.22 | 15,855,636.42 | ----- |
| Payment Nature | Ending Balance | Beginning Balance |
| Fund of Disbursement | 402,105.61 | 233,548.14 |
| Guarantee Deposit | 4,473,345.17 | 2,011,122.17 |
| Intercourse Funds of Unit | 34,398,610.76 | 12,213,774.63 |
| Employee Accounts Receivable | 469,836.87 | 418,634.62 |
| Tax Refund Receivable | 1,796,435.95 | 1,169,522.00 |
| Other Payments | 33,252.13 | 125,961.08 |
| Total | 41,573,586.49 | 16,172,562.64 |
(3) Provision for Bad Debt
| Bad-debt Provision | Stage I | Stage II | Stage III | Total |
| Expected Credit Losses over the Next 12 Months | Expected Credit Loss for the Entire Duration (No Credit Impairment is Occurred) | Expected Credit Loss for the Entire Duration (Credit Impairment has Occurred) | ||
| Balance on January 1, 2019 | 296,926.22 | 296,926.22 | ||
| Balance for the Current Period on January 1, 2019 | —— | —— | —— | —— |
| --Transfer into Stage II | ||||
| --Transfer into Stage III | ||||
| --Return to Stage II | ||||
| --Return to Stage I | ||||
| Accrual for the Current Period | 80,037.27 | 80,037.27 | ||
| Return for Current Period | ||||
| Write-off for Current Period | ||||
| Charge-off for Current Period | ||||
| Other Changes | ||||
| Balance on June 30, 2019 | 376,963.49 | 376,963.49 |
(4) Other receivables in the top five of the ending balance collected by the debtors
| Unit Name | Payment Nature | Ending Balance | Aging | Percentage of ending balance of other receivables (%) | Bad-debt Provision |
| Ending Balance | |||||
| Unit 1 | Intercourse Funds | 4,800,000.00 | Within 1 Year | 11.44 | |
| Unit 2 | Reserve Fee | 1,985,271.01 | Within 1 Year | 4.73 | |
| Unit 3 | Cash Deposit | 1,861,540.50 | Within 3 Months | 4.44 | |
| Unit 4 | VAT Refund | 1,620,513.95 | Within 3 Months | 3.86 | |
| Unit 5 | Intercourse Funds | 400,134.07 | Within 3 Months | 0.95 | |
| Total | 10,667,459.53 | ----- | 25.43 |
2. Interest Receivable
| Program | Ending Balance | Year-Beginning Balance |
| Fixed Deposit | 3,199,806.95 | 2,400,877.51 |
| Total | 3,199,806.95 | 2,400,877.51 |
Appendix 6 Inventory
1． Inventory Classification
| Program | Ending Balance | Beginning Balance | ||||
| Book Balance | Falling Price Reserves | Book Value | Book Balance | Falling Price Reserves | Book Value | |
| Raw Materials | 165,426,593.75 | 67,131.25 | 165,359,462.50 | 201,025,950.79 | 67,131.25 | 200,958,819.54 |
| Revolving Materials | 4,490,349.30 | 4,490,349.30 | 3,454,520.07 | 3,454,520.07 | ||
| Merchandise Inventory | 670,085,926.75 | 2,984,521.77 | 667,101,404.98 | 711,226,691.70 | 5,292,085.61 | 705,934,606.09 |
| Development Cost | 12,750,180.69 | 12,750,180.69 | 7,043,775.28 | 7,043,775.28 | ||
| Product Development | 16,497,730.12 | 11,673,694.67 | 4,824,035.45 | 16,497,730.12 | 11,673,694.67 | 4,824,035.45 |
| Materials in Transit | 53,773,706.64 | 53,773,706.64 | ||||
| Reserved Oil | 243,608,789.60 | 243,608,789.60 | 248,197,500.00 | 248,197,500.00 | ||
| Others | 1,113,886.20 | 1,113,886.20 | ||||
| Total | 1,113,973,456.41 | 14,725,347.69 | 1,099,248,108.72 | 1,241,219,874.60 | 17,032,911.53 | 1,224,186,963.07 |
2． Falling Price Reserves of Inventory
| Inventory Type | Beginning Balance | Increased Amount in the Current Period | Reduced Amount in the Current Period | Ending Balance | |||
| Accrual | Others | Return | Write-off | Others | |||
| Product Development | 11,673,694.67 | 11,673,694.67 | |||||
| Raw Materials | 67,131.25 | 67,131.25 | |||||
| Merchandise Inventory | 5,292,085.61 | 2,307,563.84 | 2,984,521.77 | ||||
| Consigned Processing Materials | |||||||
| Total | 17,032,911.53 | 2,307,563.84 | 14,725,347.69 | ||||
The book value of the inventory used as mortgage at the end of the period is 4,824,035.45 Yuan.Appendix 7 Other Current Assets
| Type & Content | Ending Balance | Year-Beginning Balance |
| Financial Products | 785,655,030.23 | 223,300,000.00 |
| Advance Payment of Taxes | 5,308,435.34 | 6,207,985.16 |
| Nondeductible Income Tax of VAT | 64,894,878.98 | 59,155,031.47 |
| Changes in the Fair Value of Hedged Items | 12,393,512.89 | 158,800.00 |
| Others | 42,402,014.31 | |
| Total | 910,653,871.75 | 288,821,816.63 |
Appendix 8 Long-term Equity Investment
| Invested Unit | Beginning Balance | Increase or Decrease in Current Period | |||
| Additional Investment | Negative Investment | Investment Gains and Losses Recognized by Equity Method | Adjustment of Other Comprehensive Incomes | ||
| I. Joint Venture | |||||
| Beijing Zhengda Feed Co., Ltd. (50%) | 65,339,624.28 | 2,646,053.86 | |||||||||
| In total | 65,339,624.28 | 2,646,053.86 | |||||||||
| II. Affiliated Business | |||||||||||
| Zhongchuliang (Tianjin) Storage and Logistics Co., Ltd. (30%) | 117,487,601.83 | 196,364.35 | |||||||||
| In total | 117,487,601.83 | 196,364.35 | |||||||||
| Total | 182,827,226.11 | 2,842,418.21 | |||||||||
| Continue: | |||||||||||
| Invested Unit | Increase or Decrease in Current Period | Ending Balance | Ending Balance of Impairment Provision | ||||||||
| Other Changes in Equity | Declare to Distribute Dividends or Profits | Accrual Reduced-value Allowance | Others | ||||||||
| I. Joint Venture | |||||||||||
| Beijing Zhengda Feed Co., Ltd. | 67,985,678.14 | ||||||||||
| In total | 67,985,678.14 | ||||||||||
| II. Affiliated Business | |||||||||||
| Zhongchuliang (Tianjin) Storatge and Logistics Co., Ltd. | 117,683,966.18 | ||||||||||
| In total | 117,683,966.18 | ||||||||||
| Total | 185,669,644.32 | ||||||||||
Appendix 9 Investment of Other Equity Instruments
| Program | Ending Balance | Beginning Balance | ||||
| Book Balance | Provision for Impairment | Book Value | Book Balance | Provision for Impairment | Book Value | |
| Calculated and Measured by Cost | 30,500,000.00 | 10,500,000.00 | 20,000,000.00 | |||
| Total | 30,500,000.00 | 10,500,000.00 | 20,000,000.00 | |||
Appendix 10 Investment Property
1． Situation of Investment Property
| Program | House, Building | Land Use Right | Construction in Process | Total |
| I. Original Book Value | ||||
| 1?? Beginning Balance | 42,634,619.63 | 42,634,619.63 | ||
| 2?? Increased Amount in the Current Period | ||||
| 3?? Reduced Amount in the Current Period | 627,583.36 | 627,583.36 | ||
| 4?? Ending Balance | 42,007,036.27 | 42,007,036.27 | ||
| II. Accumulated Depreciation (Amortization) | ||||
| 1?? Beginning Balance | 8,785,674.23 | 8,785,674.23 | ||
| 2?? Increased Amount in the Current Period | 179,292.09 | 179,292.09 | ||
| (1) Accrual or Amortization | 179,292.09 | 179,292.09 | ||
| 3?? Reduced Amount in the Current Period | ||||
| 4?? Ending Balance | 8,964,966.32 | 8,964,966.32 | ||
| III. Provision for Impairment | ||||
| 1?? Beginning Balance | 453,843.72 | 453,843.72 | ||
| 2?? Increased Amount in the Current Period | ||||
| 3?? Reduced Amount in the Current Period | ||||
| 4?? Ending Balance | 453,843.72 | 453,843.72 |
| IV. Book Value | ||||
| 1?? Ending Book Value | 32,588,226.23 | 32,588,226.23 | ||
| 2?? Beginning Book Value | 33,395,101.68 | 33,395,101.68 |
2． The situation of investment property that has not obtained the certificate of ownership by the end of the reportperiod
| Program | Book Value | Reasons for not having gained the certificate of ownership |
| Building | 253,785.96 | House Appendage that does not Gain Property Right Certificate |
| Total | 253,785.96 |
The book value of the investment property used for mortgage at the end of the period is 5,627,576.03 Yuan.Appendix 11 Fixed Assets
| Program | Ending Balance | Year-Beginning Balance |
| Fixed Assets | 1,255,393,420.02 | 1,271,803,080.56 |
| Disposal of Fixed Assets | 1,045.97 | |
| Total | 1,255,394,465.99 | 1,271,803,080.56 |
1． Situation of Fixed Assets
| Program | House & Building | Machine Equipment | Transportation Facility | Electronic Equipment | Office Equipment | Other Equipment | Total |
| I. Total Original Book Value | |||||||
| 1. Beginning Balance | 1,077,389,877.09 | 351,603,267.61 | 22,251,285.06 | 13,665,889.56 | 2,203,862.02 | 367,808,765.17 | 1,834,922,946.51 |
| 2. Increased Amount in Current Period | 76,053,102.85 | 15,157,082.12 | 591,753.16 | 394,101.60 | 14,414.84 | 1,507,208.55 | 93,717,663.12 |
| (1) Purchase | 252,719.56 | 15,157,082.12 | 591,753.16 | 394,101.60 | 14,414.84 | 587,987.11 | 16,998,058.39 |
| (2) Transfer from Construction in Progress | 12,066,424.68 | 18,464,615.33 | 30,531,040.01 | ||||
| (3) Other Transfer | 46,188,564.72 | 46,188,564.72 | |||||
| 3. Reduced Amount in the Current Period | 173,330.00 | 47,905.45 | 248,000.00 | 42,960.00 | 15,090.00 | 527,285.45 | |
| (1) Disposal or Scrapping | 173,330.00 | 47,905.45 | 248,000.00 | 42,960.00 | 15,090.00 | 527,285.45 | |
| (2) Other Transfer | |||||||
| 4. Ending Balance | 1,093,469,089.75 | 350,391,028.83 | 21,029,736.37 | 13,848,880.03 | 2,218,276.86 | 369,420,440.72 | 1,850,377,452.56 |
| II. Accumulated Depreciation | |||||||
| 1. Beginning Balance | 261,968,544.04 | 127,867,150.08 | 15,804,410.57 | 9,560,648.53 | 1,268,971.00 | 138,366,719.21 | 554,836,443.43 |
| 2. Increased Amount in the Current Period | 18,907,831.13 | 13,897,816.78 | 515,014.58 | 979,901.04 | 74,264.43 | 12,110,593.47 | 46,485,421.43 |
| (1) Accrual | 18,907,831.13 | 13,897,816.78 | 515,014.58 | 979,901.04 | 74,264.43 | 12,110,593.47 | 46,485,421.43 |
| (2) Others |
| 3． Reduced Amount in the Current Period | 132,344.37 | 29,171.07 | 235,008.00 | 40,839.70 | 14,402.40 | 451,765.54 | |
| (1) Disposal or Scrapping | 132,344.37 | 29,171.07 | 235,008.00 | 40,839.70 | 14,402.40 | 451,765.54 | |
| (2) Other Transfer | |||||||
| 4．Ending Balance | 273,349,059.50 | 135,705,417.41 | 15,474,588.17 | 10,297,888.11 | 1,343,235.43 | 150,530,421.40 | 586,700,610.02 |
| III. Provision for Impairment | |||||||
| 1. Beginning Balance | 7,499,295.92 | 784,126.60 | 8,283,422.52 | ||||
| 2. Increased Amount in Current Period | |||||||
| 3．Reduced Amount in the Current Period | |||||||
| 4. Ending Balance | 7,499,295.92 | 784,126.60 | 8,283,422.52 | ||||
| IV. Total Book Value | |||||||
| 1. Ending Book Value | 812,620,734.33 | 213,901,484.82 | 5,555,148.20 | 3,550,991.92 | 875,041.43 | 218,890,019.32 | 1,255,393,420.02 |
| 2. Beginning Book Value | 807,922,037.13 | 222,951,990.93 | 6,446,874.49 | 4,105,241.03 | 934,891.02 | 229,442,045.96 | 1,271,803,080.56 |
2． Disposal of Fixed Assets
| Program | Ending Balance | Year-Beginning Balance |
| Disposal of Fixed Assets | 1,045.97 | |
| Total | 1,045.97 |
3． Situation of the fixed assets that have not received the certificate of ownership by the end of the report period
| Program | Book Value | Remarks |
| Building | 2,222,939.03 | Attached house can not get the house ownership certificate |
| Total | 2,222,939.03 |
Book value of fixed assets used for guarantee at the end of the period is 2,461,350.50 Yuan.Appendix 12 Construction in Process
1． Situation of Construction in Process
| Program | Ending Balance | Beginning Balance | ||||
| Book Balance | Provision for Impairment | Book Value | Book Balance | Provision for Impairment | Book Value | |
| Category of Equipment Installation Engineering | 19,125,609.06 | 19,125,609.06 | 36,034,188.98 | 36,034,188.98 | ||
| Category of Technical Transformation | 3,279,753.34 | 3,279,753.34 | 1,335,568.80 | 1,335,568.80 | ||
| Category of Building Construction | 1,514,523.90 | 1,514,523.90 | ||||
| Total | 23,919,886.30 | 23,919,886.30 | 37,369,757.78 | 37,369,757.78 | ||
2． Changes of important projects under construction in the current period
| Project Name | Beginning Balance | Increase in the Current Period | Fixed Assets Transferred in the | Other Reduction in | Ending Balance |
| Current Period | the Current Period | ||||
| Project of Tianjin Grain & Oil | 9,408,554.52 | 2,657,870.16 | 12,066,424.68 | ||
| Baked Potato Production Line of No.2 Factory | 766,735.78 | 196,000.00 | 78,000.00 | 884,735.78 | |
| Walnut Cake Production Line of No.2 Factory | 7,672,354.52 | 129,283.00 | 3,001,230.77 | 4,800,406.75 | |
| Project of Linqing Color Steel House | 46,006.63 | 46,006.63 | |||
| Small Fried Potato Chips | 1,798,382.97 | 1,798,382.97 | |||
| 4D Overlay Corn Flake Production Line | 1,830,000.00 | 4, 927,929.50 | 6,757,929.50 | ||
| Production Line for Extruded Baked Corn Flakes | 2,691,598.53 | 76,119.00 | 2,241,356.77 | 526,360.76 | |
| Non-fried Potato Chip Production Line of Leisure No.2 Factory | 9,760,300.00 | 5,728,300.00 | 4,032,000.00 | ||
| Duoyidao Steamed Dry Cake | 1,227,344.82 | 1,187,000.00 | 40,344.82 | ||
| Gege Mofang Transformation of Lesiure No.1 Factory | 299,000.00 | 299,000.00 | |||
| Slope Treatment Project of No.3 Factory | 403,041.51 | 1,470,084.28 | 1,873,125.79 | ||
| Production Line 1 of Fried Potato Chips of Lesiure No.1 Factory (FH-Tablet Machine) | 298,000.00 | 298,000.00 | |||
| Production Line 6 for Non-fried Potato Chips (Project of Newly-built Production Line 7 for Non-fried Potato Chips)-Garland Potato Baking Project | 498,000.00 | 498,000.00 | |||
| Production Line 6 of Fried Potato Chips of Leisure No.1 Factory (Continuous Frying Machine) | 430,000.00 | 430,000.00 | |||
| Technical Reform of Pea Chips Project | 88,432.14 | 10,867.49 | 99,299.63 | ||
| Technical Reform of Salad Bar Project | 844,095.15 | 22,711.14 | 866,806.29 | ||
| Technical Reform of Quality Improvement of Congming Bar | 134,296.85 | 134,296.85 | |||
| Project of Upgrading and Transformation of Blasting Machine of Congming Bar Chicken Nuggets | 306,224.78 | 306,224.78 | |||
| Total | 36,789,839.94 | 11,203,392.83 | 26,399,695.19 | 40,344.82 | 21,553,192.76 |
Appendix 13 Intangible Assets1． Situation of Intangible Assets
| Program | Software | Land Use Right | Trademark Right | Others | Total |
| I. Total Original Book Value | |||||
| 1． Beginning Balance | 3,614,817.40 | 317,067,215.98 | 154,841,200.00 | 662,400.00 | 476,185,633.38 |
| 2． Increased Amount in the Current Period | |||||
| (1) Purchase | |||||
| (2) Internal R&D | |||||
| (3) Others | |||||
| 3． Reduced Amount in the Current Period | 4,693,162.18 | 4,693,162.18 |
| (1) Disposal | |||||
| (2) Others | 4,693,162.18 | 4,693,162.18 | |||
| 4． Ending Balance | 3,614,817.40 | 312,374,053.80 | 154,841,200.00 | 662,400.00 | 471,492,471.20 |
| II. Accumulated Amortization | |||||
| 1． Beginning Balance | 2,879,015.55 | 48,654,170.18 | 40,607,519.97 | 92,140,705.70 | |
| 2． Increased Amount in the Current Period | 295,388.94 | 2,991,577.44 | 1,392,395.43 | 4,679,361.81 | |
| (1) Accrual | 295,388.94 | 2,991,577.44 | 1,392,395.43 | 4,679,361.81 | |
| (2) Others | |||||
| 3． Reduced Amount in the Current Period | 288,417.60 | 288,417.60 | |||
| (1) Disposal | |||||
| (2) Others | 288,417.60 | 288,417.60 | |||
| 4． Ending Balance | 3,174,404.49 | 51,357,330.02 | 41,999,915.40 | 96,531,649.91 | |
| III. Provision for Impairment | |||||
| 1． Beginning Balance | 662,400.00 | ||||
| 2． Increased Amount in the Current Period | |||||
| (1) Accrual | |||||
| 3． Reduced Amount in the Current Period | |||||
| (1) Disposal | |||||
| 4． Ending Balance | 662,400.00 | ||||
| IV. Total Book Value | |||||
| 1．Ending Book Value | 440,412.91 | 261,016,723.78 | 112,841,284.60 | 374,298,421.29 | |
| 2．Beginning Book Value | 735,801.85 | 268,413,045.80 | 114,233,680.03 | 383,382,527.68 |
Appendix 14 GoodwillOriginal Book Value of Goodwill
| Invested Unit Name or Item Forming the Goodwill | Beginning Balance | Increase in the Current Period | Reduction in the Current Period | Ending Balance |
| Formed by Business Merger | Disposal | |||
| Purchase the Stock Equity of Zhejiang Xiaowangzi Food Co., Ltd. | 191,394,422.51 | 191,394,422.51 | ||
| Total | 191,394,422.51 | 191,394,422.51 |
Note :(1) The goodwill of the company is mainly formed by the acquisition of the stock right of Zhejiang Xiaowangzi Food Co., Ltd.
(2) Goodwill impairment test process, parameters and goodwill impairment loss recognition methodThe company defines all the assets of Zhejiang Xiaowangzi Food Co., Ltd. as an asset group, and the recoverable amount of theasset group is calculated according to the present value of the expected future cash flow of the asset group based on the cash flowforecast for the next five years. In the impairment test, the key data used in the cash flow forecast, such as expected selling price, salescost and other related expenses, are determined according to the company's historical experience and the forecast of marketdevelopment. The discount rate used in the cash flow forecast is determined by referring to the time value of current market currenciesand the specific risks of related asset groups. The company's test of the above recoverable amount of goodwill indicates that there is noimpairment loss of goodwill.
Appendix 15 Long-term Deferred Expenses
| Program | Beginning Balance | Increase Amount of the Current Period | Amortization Amount of the Current Period | Other Decrease Amount | Ending Balance |
| Plant Functional Transformation | 16,362,080.78 | 367,826.40 | 15,994,254.38 | ||
| Forest Land Lease | 5,196,528.00 | 56,484.00 | 5,140,044.00 | ||
| Brand Image Promotion | 10,061,782.90 | 970,873.79 | 11,032,656.69 | ||
| Business Premises Decoration | 2,869,808.94 | 30,783.50 | 6,596.46 | 2,893,995.98 | |
| Information Software | 180,817.60 | 47,169.84 | 133,647.76 | ||
| Total | 34,671,018.22 | 1,001,657.29 | 11,510,733.39 | 24,161,942.12 |
Appendix 16 Deferred Tax Assets and Deferred Tax Liabilities1． Non-offset Deferred Tax Assets
| Program | Ending Balance | Beginning Balance | ||
| Deductible Temporary Difference | Deferred Tax Assets | Deductible Temporary Difference | Deferred Tax Assets | |
| Preparation for the Impairment of Assets | 3,861,427.27 | 964,704.31 | 5,975,793.94 | 1,493,058.58 |
| Deductible Losses | 68,994,962.13 | 17,248,740.54 | 2,378,893.29 | 594,723.33 |
| Valuation of Financial Instruments and Derivative Financial Instruments | 11,652,792.92 | 2,913,198.23 | ||
| Deferred Income | 9,469,697.92 | 2,367,424.48 | 1,350,000.00 | 337,500.00 |
| Payroll Payable | 39,970,000.00 | 9,992,500.00 | 39,970,000.00 | 9,992,500.00 |
| Total | 122,296,087.32 | 30,573,369.33 | 61,327,480.15 | 15,330,980.14 |
2． Unoffset Deferred Tax Liabilities
| Program | Ending Balance | Beginning Balance | ||
| Taxable Temporary Difference | Deferred Income Tax Liabilities | Taxable Temporary Difference | Deferred Income Tax Liabilities | |
| Valuation of Financial Instruments and Derivative Financial Instruments | 51,049,016.09 | 12,762,254.02 | 407,589.76 | 101,897.44 |
| The difference between the fair value of the identifiable net assets confirmed by business merger and their net book assets | 192,682,963.84 | 48,170,740.96 | 198,067,768.12 | 49,516,942.03 |
| Total | 243,731,979.93 | 60,932,994.98 | 198,475,357.88 | 49,618,839.47 |
3． Details of deductible temporary difference of undefined deferred income tax assets
| Program | Ending Balance | Beginning Balance |
| Deductible Losses | 57,023,145.09 | 35,403,914.26 |
| Deductible Temporary Difference | -2,714,794.81 | |
| Total | 57,023,145.09 | 32,689,119.45 |
4． The deductible loss of undefined deferred income tax assets will expire in the next year
| Year | Ending Balance | Beginning Balance | Remarks |
| 2020 | 6,473,030.05 | 6,473,030.05 |
| 2021 | 4,504,020.42 | 4,504,020.42 | |
| 2022 | 4,021,787.39 | 4,021,787.39 | |
| 2023 | 20,405,076.40 | 20,405,076.40 | |
| 2024 | 21,619,230.83 | ||
| Total | 57,023,145.09 | 35,403,914.26 |
Appendix 17 Other Non-Current Assets
| Type & Content | Ending Balance | Beginning Balance |
| Advance Payment for Equipment and Project | 115,200.00 | 1,622,003.59 |
| 3-Year Fixed Deposit Receipt | 30,000,000.00 | |
| Total | 30,115,200.00 | 1,622,003.59 |
Appendix 18 Short-term Loan
| Program | Ending Balance | Beginning Balance |
| Guaranteed Loan | 520,907,793.00 | 370,000,000.00 |
| Loan in Credit | 1,072,624,701.10 | 1,067,715,080.91 |
| Total | 1,593,532,494.10 | 1,437,715,080.91 |
Appendix 19 Accounts Payable1． Payable According to the Nature of the Payment
| Program | Ending Balance | Beginning Balance |
| Materials Payable | 177,263,907.58 | 121,681,815.91 |
| Construction Cost Payable | 638,810.77 | 289,019.48 |
| Payables on Equipment | 9,281,379.27 | 15,527,703.10 |
| Cash Deposit | 447,606.81 | 583,301.20 |
| Others | 4,031,173.96 | 2,482,873.42 |
| Total | 191,662,878.39 | 140,564,713.11 |
Appendix 20 Advance Receipt1． Divided by the Payment Nature of Advance Receipt
| Program | Ending Balance | Beginning Balance |
| Advances on Sales | 116,450,620.41 | 143,857,900.77 |
| Advance Payment for Rent and Equipment | 676,775.84 | 1,459,163.41 |
| Total | 117,127,396.25 | 145,317,064.18 |
Appendix 21 Payroll Payable1． Payroll Payable List
| Program | Beginning Balance | Increase in the Current Period | Reduction in the Current Period | Ending Balance |
| Short-term Salary | 29,938,059.15 | 119,338,905.95 | 136,673,349.09 | 12,603,616.01 |
| Post-service Benefits - Set up a Contribution Plan | 1,402,397.44 | 12,548,305.01 | 12,863,790.36 | 1,086,912.09 |
| Dismission Welfare | 154,111.46 | 1,820,151.70 | 1,974,263.16 | |
| Total | 31,494,568.05 | 133,707,362.66 | 151,511,402.61 | 13,690,528.10 |
2． Short-term Salary List
| Program | Beginning Balance | Increase in the Current Period | Reduction in the Current Period | Ending Balance |
| Salaries, bonuses, allowances and subsidies | 25,667,018.98 | 98,709,800.29 | 116,167,248.93 | 8,209,570.34 |
| Employee Benefits Costs | 250,488.10 | 2,851,298.01 | 3,069,429.91 | 32,356.20 |
| Social Insurance Charges | 910,019.83 | 7,906,161.03 | 8,052,490.03 | 763,690.83 |
| Include: Basic Medical Insurance Premiums | 340,442.01 | 5,947,659.17 | 6,139,812.81 | 148,288.37 |
| Industrial Injury Insurance Premium | 131,267.02 | 659,281.16 | 608,959.62 | 181,588.56 |
| Birth Insurance Premium | 45,767.66 | 420,014.78 | 424,511.68 | 41,270.76 |
| Others | 392,543.14 | 879,205.92 | 879,205.92 | 392,543.14 |
| housing Provident Fund | 189,641.00 | 5,062,593.06 | 5,060,172.06 | 192,062.00 |
| Trade union funds and employee' education funds | 2,914,225.62 | 2,116,151.91 | 1,902,408.51 | 3,127,969.02 |
| Labor Union Expenditure and Employee Education Expenses | 6,665.62 | 2,692,901.65 | 2,421,599.65 | 277,967.62 |
| Total | 29,938,059.15 | 119,338,905.95 | 136,673,349.09 | 12,603,616.01 |
3． Defined Contribution Plan List
| Program | Beginning Balance | Increase in the Current Period | Reduction in the Current Period | Ending Balance |
| Basic Endowment Insurance | 1,331,134.58 | 11,500,517.90 | 11,862,610.40 | 969,042.08 |
| Unemployment Insurance Expense | 51,379.22 | 398,379.93 | 409,294.00 | 40,465.15 |
| Enterprise Annuity Payment | 19,883.64 | 532,624.83 | 475,103.61 | 77,404.86 |
| Others | 116,782.35 | 116,782.35 | ||
| Total | 1,402,397.44 | 12,548,305.01 | 12,863,790.36 | 1,086,912.09 |
Appendix 22 Tax Payable
| Tax Items | Ending Balance | Beginning Balance |
| Value Added Tax | 8,060,817.85 | 5,633,418.89 |
| Urban Maintenance and Construction Tax | 699,275.18 | 495,841.40 |
| Enterprise Income Tax | 14,085,138.52 | 26,772,270.05 |
| House Property Tax | 1,542,225.37 | 1,447,610.40 |
| Land Use Tax | 694,610.74 | 276,169.59 |
| Individual Income Tax | 1,886,419.80 | 482,771.95 |
| Education Surcharge | 251,361.50 | 174,446.12 |
| Local Education Surcharge | 219,718.07 | 168,441.14 |
| Stamp Tax | 124,708.21 | 317,916.69 |
| Resource Tax | 9,076.00 | 11,532.00 |
| Other Taxes | 2,388.91 | 3,401.61 |
| Total | 27,575,740.15 | 35,783,819.84 |
Appendix 23 Other Payables
| Program | Ending Balance | Year-Beginning Balance |
| Other Payables | 120,591,513.82 | 73,118,565.08 |
| Payable Interest | 25,298,027.68 | 26,972,826.90 |
| Dividend Payable | 18,267,759.97 | 11,197,317.01 |
| 合 计 | 164,157,301.47 | 111,288,708.99 |
1. Other Payables
Other Payables Listed by Payment Nature
| Payment Nature | Ending Balance | Beginning Balance |
| Intercourse Funds of Other Units Except Related Parties | 96,575,761.98 | 50,733,320.82 |
| Personal Intercourse Funds | 3,035,871.20 | 776,050.31 |
| Employee Insurances | 1,459,080.01 | 797,312.51 |
| Employee Loan Payable | 372,463.91 | 91,986.85 |
| Guarantee Deposit | 12,887,066.65 | 15,199,146.39 |
| Warehouse Rental Fee, Storage Fee | 59,425.16 | 2,568,894.01 |
| Receivables and Payables among Units of Related Parties | 3,812,278.84 | 817,333.26 |
| Others | 2,389,566.07 | 2,134,520.93 |
| Total | 120,591,513.82 | 73,118,565.08 |
Important other payables with an aging of over one year
2. Payable Interest
| Program | Ending Balance | Beginning Balance |
| Loan Interests among Enterprises | 21,082,795.47 | 21,082,795.47 |
| Bank Loan Interest | 4,215,232.21 | 5,890,031.43 |
| 合 计 | 25,298,027.68 | 26,972,826.90 |
3. Dividend Payable
| Program | Ending Balance | Beginning Balance |
| Dividends Payable on Corporate Shares | 3,397,317.01 | 3,397,317.01 |
| Unit Name | Ending Balance | Reasons for non-payment or carryover |
| Tianjin Binhai New Area Jinzhengyang Logistics Co., Ltd. | 100,000.00 | Cash Deposit |
| Tianjin Aofei Xinzhi Enterprise Management Consulting Co., Ltd. | 400,000.00 | Cash Deposit |
| Tianjin Huiyue Labor Servicee Co., Ltd. | 500,000.00 | Cash Deposit |
| Tianjin Yixin Transportation Co., Ltd. | 280,500.00 | Cash Deposit |
| Tianjin Wanyuan Trade Co., Ltd. | 200,000.00 | Cash Deposit |
| Tianjin Ruihengda International Trade Co., Ltd. | 200,000.00 | Cash Deposit |
| Shijiazhuang Jinding Grain and Oil Sales Co., Ltd. | 200,000.00 | Cash Deposit |
| Hebei Runsiji Trading Co., Ltd. | 200,000.00 | Cash Deposit |
| Huabo Feed Wholesale Department of Guantao County | 200,000.00 | Cash Deposit |
| Handan Guanxin Technology Co., Ltd. | 200,000.00 | Cash Deposit |
| Cangzhou Xinhai Feed Trading Co., Ltd. | 200,000.00 | Cash Deposit |
| Hengshui Longce Trading Co., Ltd. | 200,000.00 | Cash Deposit |
| Total | 2,880,500.00 |
| Dividends Payable on Minority Corporate Shares | 14,870,442.96 | 7,800,000.00 |
| Total | 18,267,759.97 | 11,197,317.01 |
Appendix 24 Other Current Liabilities
| Program | Ending Balance | Beginning Balance |
| Changes in the Fair Value of Hedged Items | 11,100,915.25 | |
| Total | 11,100,915.25 |
Appendix 25 Long-term Employee Compensation Payable
| Program | Ending Balance | Beginning Balance |
| I. Post-service Benefits - Defined Benefit Plan Net Liability | ||
| II. Dismission Welfare | 275,406.52 | 275,406.52 |
| III. Other Long-term Welfare | 39,970,000.00 | 39,970,000.00 |
| Total | 40,245,406.52 | 40,245,406.52 |
Appendix 26 Deferred Income
| Program | Beginning Balance | Increase in the Current Period | Reduction in the Current Period | Ending Balance | Forming Reason |
| Governmental Subsidy | 74,019,319.59 | 806,960.76 | 73,212,358.83 | ||
| Others | 934,065.92 | 910,647.33 | 23,418.59 | ||
| Total | 74,953,385.51 | 1,717,608.09 | 73,235,777.42 |
Items involving governmental subsidies:
| Liabilities Items | Beginning Balance | New Subsidy Amount of Current Period | Non-operating Income Amount Included in Current Period | Other Income Amount Included in Current Period | Amount to Write off Costs in Current Period | Other Changes | Ending Balance | Related to Assets/Income |
| Governmental Subsidies for Infrastructure | 55,021,168.86 | 749,863.20 | 54,271,305.66 | Related to Assets | ||||
| Technical Reform Subsidy | 13,996,221.13 | 57,097.56 | 13,939,123.57 | Related to Assets | ||||
| Compensation for Demolition | 5,001,929.60 | 5,001,929.60 | Related to Assets | |||||
| Total | 74,019,319.59 | 806,960.76 | 73,212,358.83 |
Appendix 27 Capital stock
| Program | Beginning Balance | Increase (+) or Decrease (-) of Current Changes | Ending Balance | ||||
| New Issue of Shares | Donate Shares | Shares Transfer from Public Reserve Funds | Others | In total | |||
| 1. Shares with Limited Sales Conditions | |||||||
| (1) State-held Shares | |||||||
| (2) Shares Held by State-owned Legal Person | 213,388,058.00 | 213,388,058.00 | |||||
| (3) Shares Held by Other Domestic Capital | 1,299,500.00 | 1,299,500.00 | |||||
| Include： | |||||||
| Shares Held by Domestic Legal Person | 1,299,500.00 | 1,299,500.00 | |||||
| Shares Held by Domestic Natural Person | |||||||
| (4) Shares Held by Foreign Capital | |||||||
| Include： | |||||||
| Shares Held by Foreign Legal Person | |||||||
| Shares Held by Foreign Natural Person | |||||||
| Total Shares with Limited Sales Conditions | 214,687,558.00 | 214,687,558.00 | |||||
| 2. Shares without Limited Sales Conditions | |||||||
| (1) RMB Common Stocks | 406,127,806.00 | 406,127,806.00 | |||||
| (2) Foreign Capital Stocks Listed in China | 64,975,000.00 | 64,975,000.00 | |||||
| (3) Foreign Capital Stocks Listed outside China | |||||||
| (4) Others | |||||||
| Total Shares without Limited Sales Conditions | 471,102,806.00 | 471,102,806.00 | |||||
| Total | 685,790,364.00 | 685,790,364.00 |
Appendix 28 Capital reserveAppendix 29 Other Comprehensive Income
| Program | Beginning Balance | Increase in the Current Period | Reduction in the Current Period | Ending Balance |
| Capital Premium (Stock Premium) | 1,243,771,440.74 | 1,243,771,440.74 | ||
| Other Capital Reserve | 351,940,364.57 | 351,940,364.57 | ||
| Total | 1,595,711,805.31 | 1,595,711,805.31 |
| Program | Beginning Balance | Amount Incurred in the Current Period | Ending Balance | |||||
| Amount Incurred before Income Tax in the Current Period | Minus: Other Comprehensive Incomes in the Early Period and Profits and Losses in the Current Period | Minus: Other Comprehensive Incomes in the Early Period and Retained Profits and Losses in the Current Period | Minus: Income Tax Expenses | Belong to Parent Company after Tax | Belong to Minority Shareholder after Tax | |||
| I. Other Comprehensive Incomes that can't be reclassified into the Profits and Losses | ||||||||
| Include: Re-measure the Chang Value of Defined Benefit Plan | ||||||||
| Other Comprehensive Incomes that Can not Convert to the Profits and Losses under the Equity Method | ||||||||
| Changes in the Fair Value of Other Equity Instruments | ||||||||
| Changes in the Fair Value of the Enterprise's Own Credit Risk | ||||||||
| II. Other Comprehensive Incomes that will be Reclassified into Profits and Losses | 438.33 | 50,944.52 | 50,944.52 | 51,382.85 | ||||
| Include: Other Comprehensive Incomes that can be Converted to Profits or Losses under the Equity Method | ||||||||
| Changes in the Fair Value of Other Debt Investments | ||||||||
| Amount of Financial Assets Reclassified into Other Comprehensive Incomes | ||||||||
| Provisions for Credit Impairment of Other Credit Investments | ||||||||
| Hedging Reserve of Cash Flow | ||||||||
| Translation Difference in Foreign Currency Financial Statements | 421,716.33 | 50,944.52 | 50,944.52 | 472,660.85 | ||||
| The share of other | -421,278.00 | -421,278.00 | ||||||
| comprehensive incomes to be reclassified into profit and loss by the invested unit under the equity method | ||||||||
| Total of Other Comprehensive Incomes | 438.33 | 50,944.52 | 50,944.52 | 51,382.85 |
Appendix 30 Surplus reserves
| Program | Beginning Balance | Increase in the Current Period | Reduction in the Current Period | Ending Balance |
| Legal Surplus Reserve | 84,487,609.05 | 84,487,609.05 | ||
| Discretionary Surplus Reserve | 37,634,827.93 | 37,634,827.93 | ||
| Total | 122,122,436.98 | 122,122,436.98 |
Appendix 31 Undistributed profit
| Program | Current Amount | Last Term Amount |
| Adjust the undistributed profits at the end of the prior period | -131,155,119.19 | -299,111,700.34 |
| Adjust the total undistributed profits at the beginning of the period (Add+, Minus-) | ||
| Adjusted undistributed profits at the beginning of the period | -131,155,119.19 | -299,111,700.34 |
| Add: Net income attributable to the owner of the parent company for the current period | 51,510,904.41 | 59,918,995.68 |
| Minus: Withdrawal of legal surplus reserve | ||
| Withdrawal of discretionary surplus reserve | ||
| Withdrawal of general risk premium | ||
| Dividend payable on common stock | ||
| Dividends on common stock transferred to share capital | ||
| Undistributed profits at the end of the period | -79,644,214.78 | -239,192,704.66 |
Appendix 32 Business Income and Business Cost1． Business Income, Business Cost
| Program | Amount Incurred in the Current Period | Amount incurred in the last period | ||
| Income | Cost | Income | Cost | |
| Main Business | 3,257,865,991.64 | 3,035,952,555.86 | 3,621,653,806.72 | 3,331,327,381.84 |
| Other Businesses | 25,411,733.75 | 4,726,185.28 | 17,972,172.69 | 4,000,742.48 |
| Total | 3,283,277,725.39 | 3,040,678,741.14 | 3,639,625,979.41 | 3,335,328,124.32 |
2． Main Business (Industry-classified)
| Industry Name | Amount Incurred in the Current Period | Amount incurred in the last period | ||
| Business Income | Business Cost | Business Income | Business Cost | |
| Grease | 2,806,393,935.07 | 2,729,552,663.26 | 3,202,820,489.71 | 3,043,367,152.88 |
| Food Processing | 451,472,056.57 | 306,399,892.60 | 418,833,317.01 | 287,960,228.96 |
| Total | 3,257,865,991.64 | 3,035,952,555.86 | 3,621,653,806.72 | 3,331,327,381.84 |
3． Main Business (Region-classified)
| Region Name | Amount Incurred in the Current Period | Amount incurred in the last period | ||
| Business Income | Business Cost | Business Income | Business Cost | |
| North China | 2,877,861,106.26 | 2,780,606,295.60 | 1,838,990,286.16 | 1,708,912,769.17 |
| East China | 317,198,978.31 | 208,643,288.47 | 818,033,025.18 | 694,976,320.17 |
| South China | 684,479,152.81 | 665,613,631.04 | ||
| Northeast China | 62,805,907.07 | 46,702,971.79 | 135,206,322.90 | 124,218,390.58 |
| Central China | 109,128,146.18 | 102,369,058.66 | ||
| Northwest China | 35,816,873.49 | 35,237,212.22 | ||
| Total | 3,257,865,991.64 | 3,035,952,555.86 | 3,621,653,806.72 | 3,331,327,381.84 |
Appendix 33 Taxes and Surcharges
| Program | Amount Incurred in the Current Period | Amount incurred in the last period |
| Urban Maintenance and Construction Tax | 2,461,913.37 | 2,936,383.93 |
| Education Surcharge | 1,087,154.91 | 1,294,856.42 |
| Local education fee surcharge | 724,769.95 | 863,237.61 |
| House Property Tax | 4,677,651.66 | 5,110,776.57 |
| Land Use Tax | 1,313,154.94 | 1,438,247.18 |
| Vehicle and Boat Use Fee | 20,390.50 | 22,417.32 |
| Stamp Tax | 1,223,926.02 | 2,414,561.10 |
| Resource Tax | 24,644.00 | 52,271.80 |
| Other Taxes | 66,958.29 | 179,394.43 |
| Total | 11,600,563.64 | 14,312,146.36 |
Appendix 34 Sales Expenses
| Program | Amount Incurred in the Current Period | Amount incurred in the last period |
| Employee Compensation | 26,278,771.73 | 27,598,228.55 |
| Advertisement Fee | 11,032,656.69 | 165,235.49 |
| Maintenance Fee | 268,787.39 | 673,256.54 |
| Package Fee | 521,273.55 | 317,695.62 |
| Transportation Fee | 9,731,907.07 | 10,368,672.82 |
| Handling Charge | 814,392.75 | 692,832.51 |
| Water and Electricity Fee | 617,732.44 | 961,919.38 |
| Vehicle Expenses | 510,991.71 | 594,269.55 |
| Storage Charge | 10,118,318.32 | 9,355,132.36 |
| Test and Inspection Fee | 133,936.52 | 140,940.26 |
| Commercial Insurance Fee | 10,435.78 | 71,511.78 |
| Promotion Expenses | 12,619,447.62 | 13,665,004.15 |
| Business entertainment expenses | 90,324.45 | 263,996.29 |
| Labor Protection Fee | 2,501,255.24 | 2,151,249.91 |
| Sample and Products Loss | 3,324,432.17 | 3,250,164.32 |
| Sales Service Fee | 6,424,598.55 | 5,553,538.85 |
| Trademark Use Fee | 1,189,380.88 | 231,410.08 |
| Office allowance | 51,371.72 | 107,484.77 |
| Travel Expenses | 3,584,743.56 | 3,788,163.68 |
| Depreciation cost | 8,329,518.71 | 8,072,866.53 |
| Other Expenses | 3,076,861.42 | 3,602,435.92 |
| Total | 101,231,138.27 | 91,626,009.36 |
Appendix 35 Administration Expenses
| Program | Amount Incurred in the Current Period | Amount incurred in the last period |
| Employee Compensation | 43,327,621.22 | 46,673,511.00 |
| Labor Insurance Fee | 401,623.47 | 610,543.04 |
| Company Funds | 4,790,871.80 | 3,824,054.32 |
| Commercial Insurance Fee | 335,106.88 | 220,656.54 |
| Vehicle Expenses | 1,842,062.94 | 1,856,806.62 |
| Depreciation cost | 7,123,583.86 | 7,415,406.80 |
| Maintenance Fee | 922,490.45 | 1,284,428.88 |
| Cost Tax | 124,708.21 | 143,407.29 |
| Assets Amortization | 10,030,497.46 | 10,627,573.46 |
| Material Consumption | 345,488.89 | 180,710.84 |
| Intermediary Institution Expenses | 3,525,514.48 | 2,785,391.84 |
| Information Network Fee | 504,859.82 | 962,250.84 |
| Labor Protection Fee | 91,851.64 | 168,872.35 |
| Environmental Protection Fee | 275,063.52 | 534,068.21 |
| Security Fee | 397,403.41 | 387,490.37 |
| Meeting Expenses | 2,089,180.89 | 1,220,601.05 |
| Business entertainment expenses | 831,498.05 | 1,137,223.75 |
| Travel Expenses | 717,873.17 | 516,987.65 |
| Office Expenses | 448,964.24 | 753,838.84 |
| Rental Fee | 1,544,749.18 | 692,837.00 |
| Water and Electricity Fee | 97,764.85 | 381,333.68 |
| Other Expenses | 1,529,449.94 | 997,118.23 |
| Total | 81,298,228.37 | 83,375,112.60 |
Appendix 36 Development Expenses
| Type | Amount Incurred in the Current Period | Amount incurred in the last period |
| Scientific Research Expenses | 531,066.00 | 723,660.50 |
| Total | 531,066.00 | 723,660.50 |
Appendix 37 Financial Expenses
| Type | Amount Incurred in the Current Period | Amount incurred in the last period |
| Interest Expenditure | 22,981,293.07 | 52,050,362.69 |
| Minus: Interest Income | 4,120,628.58 | 15,797,297.89 |
| Exchange Gains and Losses | -707,452.18 | -1,054,003.29 |
| Service Charge | 321,276.88 | 305,255.33 |
| Total | 18,474,489.19 | 35,504,316.84 |
Appendix 38 Other Incomes
| Program | Amount Incurred in the Current Period | Amount incurred in the last period | Amount recorded into current non-recurring profits and losses |
| Government subsidies related to the daily | 9,871,098.22 | 5,517,293.77 | 147,947.43 |
| activities of enterprises | |||
| Total | 9,871,098.22 | 5,517,293.77 | 147,947.43 |
Appendix 39 Investment Income
| Program | Amount Incurred in the Current Period | Amount incurred in the last period |
| Income of long-term equity investment calculated by equity method | 2,824,933.21 | 6,931,525.10 |
| Investment income of financial assets measured at fair value and recorded in current profits and losses during the holding period | -158,515.55 | -292,094.74 |
| Investment income obtained from the disposal of financial assets measured at fair value and recorded in current profits and losses | ||
| Income of Bank Financial Product | 6,512,884.43 | 4,273,182.66 |
| Total | 9,179,302.09 | 10,912,613.02 |
Appendix 40 Income of changes in fair value
| Source of producing income of changes in fair value | Amount Incurred in the Current Period | Amount incurred in the last period |
| Financial assets measured at fair value and whose changes are recorded in current profits and losses | 26,158,281.22 | 13,890,967.44 |
| Include: income of changes in fair value generated by derivative financial instruments | 26,158,281.22 | 13,890,967.44 |
| Total | 26,158,281.22 | 13,890,967.44 |
Appendix 41 Impairment Loss
| Program | Amount Incurred in the Current Period | Amount incurred in the last period |
| Bad debt loss | 197,695.56 | -456,423.00 |
| Loss on Inventory Valuation | -25,996.74 | |
| Impairment Loss of Fixed Assets | ||
| Total | 197,695.56 | -482,419.74 |
Appendix 42 Income of Assets Disposal
| Program | Amount Incurred in the Current Period | Amount incurred in the last period | Amount recorded into current non-recurring profits and losses |
| Income of Disposal of Non-current Assets | 11,997,518.40 | -188,228.18 | 11,997,518.40 |
| Include: Income of Disposal of Fixed Assets | 11,997,518.40 | -188,228.18 | 11,997,518.40 |
| Total | 11,997,518.40 | -188,228.18 | 11,997,518.40 |
Appendix 43 Non-operating Income
| Program | Amount Incurred in the Current Period | Amount incurred in the last period | Amount of non-recurring profits and losses recorded in the current period |
| Income from Compensation for Breach of Contract | 12,256.67 | 6,556,654.89 | 12,256.67 |
| Governmental Subsidy | 38,919.42 | 74,686.78 | 38,919.42 |
| Relocation Compensation Income | 88,793.40 | 3,091,660.35 | 88,793.40 |
| Other Gains | 1,576,474.10 | 74,418.73 | 1,576,474.10 |
| Total | 1,716,443.59 | 9,797,420.75 | 1,716,443.59 |
Appendix 44 Non-operating Expenditure
| Program | Amount Incurred in the Current Period | Amount incurred in the last period | Amount recorded into current non-recurring profits and losses |
| Donation | 4,000.00 | 4,000.00 | |
| Loss of assets scrap and damage | 9,041.80 | 9,041.80 | |
| Compensation and Liquidated Damages | 6,430,005.15 | ||
| Demolition Expenditure | 85,950.31 | 3,081,033.39 | 85,950.31 |
| Other Expenditures | 723,426.51 | 109,133.77 | 723,426.51 |
| Total | 822,418.62 | 9,620,172.31 | 822,418.62 |
Appendix 45 Income Tax Expenses
1． Income Tax Expenses Form
| Program | Amount Incurred in the Current Period | Amount incurred in the last period |
| Income Tax Expenses of the Current Period | 9,220,010.91 | 27,664,025.42 |
| Deferred Income Tax Expenses | 12,901,765.21 | 7,326,245.99 |
| Total | 22,121,776.12 | 34,990,271.41 |
2． Adjustment process of accounting profits and income tax expenses
| Program | Amount Incurred in the Current Period |
| Total Profits | 87,366,028.12 |
| Income tax expense calculated at statutory tax rate | 21,841,507.03 |
| Subsidiaries are affected by different tax rates | 734,474.05 |
| Adjust the impact of income tax for previous periods | -35,198.18 |
| Impact of other non-taxable income | -1,983,995.52 |
| Impact of non-deductible costs, expenses and losses | -1,207,927.94 |
| Impact of using deductible loss of deferred tax assets not recognized in the early stage | -255,461.24 |
| Impact of deductible temporary differences or deductible losses of deferred tax assets not recognized in the current period | 2,849,800.03 |
| Impact of recognize the deferred tax assets that can be used to offset losses in the early period | 175,981.77 |
| Others | 2,596.12 |
| Income Tax Expenses | 22,121,776.12 |
Appendix 46 Notes to the cash flow statement1． Other cash received in connection with operating activities
| Program | Amount Incurred in the Current Period | Amount incurred in the last period |
| Intercourse funds of related parties | 569,937.02 | 318,591.80 |
| Intercourse funds of other units | 342,920,924.84 | 917,966,054.20 |
| Non-operating Income | 1,475,758.10 | 1,150,546.52 |
| Others | 3,137,920.94 | 4,179,708.62 |
| Total | 348,104,540.90 | 923,614,901.14 |
2． Other cash payment related to operating activities
| Program | Amount Incurred in the Current Period | Amount incurred in the last period |
| Intercourse funds of related parties | 1,045,623.70 | 26,613,911.26 |
| Intercourse funds of other units | 297,279,937.27 | 893,316,091.22 |
| Expenditure of administrative expenses | 13,042,670.47 | 25,120,249.09 |
| Expenditure of operating expenses | 22,095,807.54 | 21,595,947.18 |
| Non-operating Expenditure | 558,429.32 | 487,168.62 |
| Reserve Payment | 499,480.07 | 247,490.00 |
| Bank Charges | 321,755.60 | 323,092.04 |
| Others | 4,920,214.42 | 6,326,874.80 |
| Total | 339,763,918.39 | 974,030,824.21 |
3． Other cash paid in connection with fund-raising activities
| Program | Amount Incurred in the Current Period | Amount incurred in the last period |
| Current borrowings and interest paid | 73,647,073.24 | |
| Total | 73,647,073.24 |
Appendix 47 Supplementary information on cash flow statement
1． Supplementary information on cash flow statement
| Program | Current Amount | Last Term Amount |
| 1. Adjust net profit to cash flow of operating activities | ||
| Net profit | 65,244,252.00 | 74,558,652.25 |
| Add: assets impairment provision | 197,695.56 | -259,467.16 |
| Depreciation of fixed assets, depletion of oil and gas assets, depreciation of productive biological assets | 46,664,713.52 | 45,223,218.20 |
| Amortization of intangible assets | 4,679,361.81 | 4,645,877.37 |
| Amortization of long-term unamortized expenses | 11,510,733.39 | 791,454.71 |
| Loss on disposal of fixed assets, intangible assets and other long-term assets (marked with "-" for income) | -11,997,518.40 | 199,107.14 |
| Loss on scrapping fixed assets (marked with "-" for income) | 9,041.80 | |
| Loss of fair value change (earnings marked with "-") | -26,158,281.22 | -23,082,074.49 |
| Financial expenses (marked with "-" for income) | 22,273,840.89 | 51,994,715.95 |
| Investment loss (marked with "-" for income) | -9,179,302.09 | -88,943,376.95 |
| Decrease of deferred tax assets (marked with "-" for increase) | -15,242,389.19 | 1,803,821.51 |
| Deferred tax liabilities increase (decrease marked with "-") | 11,314,155.51 | 7,319,746.80 |
| Reduction in inventory (marked with "-" for increase) | 127,246,418.19 | 274,302,914.67 |
| Decrease in operational receivables (marked with "-" for increase) | -39,843,479.45 | -613,311,955.84 |
| Increase in operational payable items (marked with "-" for decrease) | 49,764,970.19 | 311,142,335.40 |
| Others | -15,891,918.30 | -690,426.68 |
| Net Cash Flow from Operating Activities | 220,592,294.21 | 45,694,542.88 |
| 2. Major investments and financing activities that do not involve cash receipts and disbursements | ||
| Transfer debt to capital | ||
| Convertible corporate bonds maturing within one year |
| Financial Leased Fixed Assets | ||
| 3. Net changes in cash and cash equivalents | ||
| Ending balance of cash | 625,128,759.14 | 997,708,704.36 |
| Minus: Beginning balane of cash | 867,870,016.78 | 1,014,438,663.43 |
| Add: Ending balance of cash equivalents | ||
| Minus: Beginning balance of cash equivalents | ||
| Net increase in cash and cash equivalents | -242,741,257.64 | -16,729,959.07 |
2． Composition of cash and cash equivalents
| Program | Ending Balance | Beginning Balance |
| I. Cash | 625,128,759.14 | 867,870,016.78 |
| Include: Cash on hand | 60,478.21 | 46,418.17 |
| Bank deposit that readily available for payment | 570,539,967.58 | 737,705,225.28 |
| Other monetary funds readily available for payment | 54,528,313.35 | 130,118,373.33 |
| II. Cash equivalents | ||
| Include: Bond investment that matures in three months | ||
| III. Ending balance of cash and cash equivalents | 625,128,759.14 | 867,870,016.78 |
| Include: cash and cash equivalents restrictedly used by the parent company or subsidiaries of the group |
Appendix 48 Assets whose ownership or use rights are restricted
| Program | Balance | Restricted reason |
| Monetary Capital | 37,068,225.55 | Freezing of fixed deposit receipt and litigation preservation |
| Inventory | 4,824,035.45 | Loan Mortgage |
| Investment Property | 5,627,576.03 | Loan Mortgage |
| Fixed Assets | 2,461,350.50 | Loan Mortgage |
| Other Non-Current Assets | 30,000,000.00 | Fixed term of 3 years |
| Stock equity | 39,000,000.00 | Freezing of Litigation Preservation |
| Total | 118,981,187.53 |
Appendix 49 Item of foreign currency monetary
| Program | Ending balance of foreign currency | Discount rate | Converted RMB balance in the end of the period |
| Monetary Capital | 263,143.73 | 6.8632 | 1,809,032.74 |
| Include: Dollar | 263,143.73 | 6.8632 | 1,809,032.74 |
| Prepayment | 146,921.49 | 6.8632 | 1,018,775.76 |
| Include: Dollar | 146,921.49 | 6.8632 | 1,018,775.76 |
Appendix 50 HedgingPlease refer to the related contents in Note Ⅵ.2 "derivative financial assets"VII. Changes in merge scopeAt the 27th meeting of the 8th Board of Directors, Beijing Grain Company was approved to invest 50 million RMB to establishBeijing Grain Gubi Oil Company which has completed the business registration procedures on May 7, 2019. Beijing Grain Gubi OilCo., Ltd. was included in the scope of the consolidated statements.
VIII. Rights and interests in another subject(I) Rights and interests in subsidiaries1． Composition of enterprise groups
| Name of subsidiaries | Main place of business | Registration place | Business nature | Shareholding ratio (%) | Gaining method | |
| Direct | Indirect | |||||
| Beijing Jingliang Food Co., Ltd. | Beijing | Beijing | Investment Company | 100 | Same control merger | |
| Jingliang (Tianjin) Grain and Oil Industrial Co., Ltd. | Tianjin | Tianjin | Grease processing | 70 | Same control merger | |
| Beijing Jingliang Grease Co., Ltd. | Beijing | Beijing | Grease and Oil Material Trade | 100 | Same control merger | |
| Jingliang Xinchuang (Tianjin) Commercial Management Co., Ltd. | Tianjin | Tianjin | Commercial service industry | 51 | Same control merger | |
| Jingliang (Hebei) Grease Industrial Co., Ltd. | Hebei | Hebei | Grease processing | 51 | Same control merger | |
| Beijing Guchuan Grease Co., Ltd. | Beijing | Beijing | Grease processing | 100 | Same control merger | |
| Beijing Aisen Lubao Grease Co., Ltd. | Beijing | Beijing | Grease processing | 100 | Same control merger | |
| Beijing Jingliang Gubi Grease Co., Ltd. | Beijing | Beijing | Grease and Oil Material Trade | 100 | Invest and establish | |
| Beijing Taiweikang Grease Distribution Center Co., Ltd. | Beijing | Beijing | Warehouse and Storage | 100 | Same control merger | |
| Beijing Guchuan Bread Food Co., Ltd. | Beijing | Beijing | Food Processing | 100 | Same control merger | |
| Jingliang Misi Catering Management (Tianjin) Co., Ltd. | Tianjin | Tianjin | Food Processing | 51 | Same control merger | |
| Misi Mihui Catering Management (Tianjin) Co., Ltd. | Tianjin | Tianjin | Food Processing | 51 | Same control merger | |
| Misi Mihui Catering Management (Beijing) Co., Ltd. | Beijing | Beijing | Food Processing | 51 | Same control merger | |
| Zhejiang Xiaowangzi Food Co., Ltd. | Hangzhou | Hangzhou | Food Processing | 69.7716 | Non-identical control merger | |
| Hangzhou Linan Xiaotianshi Food Co., Ltd. | Hangzhou | Hangzhou | Food Processing | 69.7716 | Non-identical control merger | |
| Liaoning Xiaowangzi Food Co., Ltd. | Liaoning | Liaoning | Food Processing | 69.7716 | Non-identical control merger | |
| Linqing Xiaowangzi Food Co., Ltd. | Linqing | Linqing | Food Processing | 69.7716 | Non-identical control merger | |
| Linan Chunmanyuan Agricultural Development Co., Ltd. | Hangzhou | Hangzhou | Food Processing | 69.7716 | Non-identical control merger | |
| Jingliang (Singapore) International Trading Limited | Singapore | Singapore | Grease and Oil Material Trade | 100 | Invest and establish | |
| Jingliang Rural Complex Construction and Operation (Xinyi) Co., Ltd. | Jiangsu | Xuzhou | Comprehensive agricultural development | 51 | Invest and establish | |
| Jingliang (Caofeidian) Agricultural Development Co., Ltd. | Hebei | Tangshan | Comprehensive agricultural development | 51 | Invest and establish | |
2． Important not wholly-owned subsidiaries
| Name of subsidiaries | Shareholding ratio of minority shareholders (%) | Profits and losses belong to minority shareholders in the current period | Dividends distributed to minority shareholders in the current period | Balance of minority shareholders' equity at the end of the period |
| Jingliang (Tianjin) Grain and Oil Industrial Co., Ltd. | 30 | -5,225,716.82 | 236,278,286.24 | |
| Zhejiang Xiaowangzi Food Co., Ltd. | 30.2284 | 19,009,828.12 | 8,838,053.70 | 243,176,268.57 |
| Jingliang (Hebei) Grease Industrial Co., Ltd. | 49 | 194,411.35 | 2,009,000.00 | 34,563,838.80 |
| Jingliang Rural Complex Construction and Operation (Xinyi) Co., Ltd. | 49 | -34,559.75 | 14,435,529.83 | |
| Jingliang (Caofeidian) Agricultural Development Co., Ltd. | 49 | -200,415.99 | 24,142,685.45 |
3. Major financial information of non-wholly-owned subsidiaries
| Name of subsidiaries | Ending Balance | |||||
| Current Assets | Non-current Assets | Total Assets | Current Liabilities | Non-current Liabilities | Total Liabilities | |
| Jingliang (Tianjin) Grain and Oil Industrial Co., Ltd. | 664,871,440.17 | 841,733,671.39 | 1,506,605,111.56 | 655,119,172.64 | 63,891,651.46 | 719,010,824.10 |
| Zhejiang Xiaowangzi Food Co., Ltd. | 437,262,450.07 | 398,972,713.08 | 836,235,163.15 | 120,807,472.99 | 57,564,072.70 | 178,371,545.69 |
| Jingliang (Hebei) Grease Industrial Co., Ltd. | 310,912,347.99 | 89,902,463.85 | 400,814,811.84 | 330,232,835.32 | 43,530.00 | 330,276,365.32 |
| Jingliang Rural Complex Construction and Operation (Xinyi) Co., Ltd. | 29,103,469.60 | 368,668.10 | 29,472,137.70 | 354.00 | 354.00 | |
| Jingliang (Caofeidian) Agricultural Development Co., Ltd. | 62,562,143.86 | 430,504.11 | 62,992,647.97 | 13,721,861.34 | 13,721,861.34 | |
Continue:
| Name of subsidiaries | Beginning Balance | |||||
| Current Assets | Non-current Assets | Total Assets | Current Liabilities | Non-current Liabilities | Total Liabilities | |
| Jingliang (Tianjin) Grain and Oil Industrial Co., Ltd. | 643,318,329.95 | 864,787,149.34 | 1,508,105,479.29 | 648,070,966.90 | 55,021,168.86 | 703,092,135.76 |
| Zhejiang Xiaowangzi Food Co., Ltd. | 434,538,712.02 | 384,616,054.08 | 819,154,766.10 | 139,320,269.31 | 58,435,800.61 | 197,756,069.92 |
| Jingliang (Hebei) Grease Industrial Co., Ltd. | 389,424,891.03 | 91,971,278.94 | 481,396,169.97 | 407,110,951.30 | 43,530.00 | 407,154,481.30 |
| Jingliang Rural Complex Construction and Operation (Xinyi) Co., Ltd. | 29,196,334.50 | 386,000.53 | 29,582,335.05 | 354.00 | 354.00 | |
| Jingliang (Caofeidian) Agricultural Development Co., Ltd. | 51,880,588.02 | 321,598.36 | 52,202,186.38 | 2,522,387.52 | 2,522,387.52 |
Continue:
| Name of subsidiaries | Current Amount | |||
| Business Income | Net profit | Total Amount of Comprehensive Incomes | Cash Flow from Operating Activities | |
| Jingliang (Tianjin) Grain and Oil Industrial Co., Ltd. | 1,463,348,174.86 | -17,419,056.07 | -17,419,056.07 | 47,286,961.09 |
| Zhejiang Xiaowangzi Food Co., Ltd. | 404,961,227.15 | 65,702,534.89 | 65,702,534.89 | 61,504,068.82 |
| Jingliang (Hebei) Grease Industrial Co., Ltd. | 180,415,803.56 | 396,757.85 | 396,757.85 | 45,461,151.90 |
| Jingliang Rural Complex Construction and Operation (Xinyi) Co., Ltd. | -110,197.35 | -110,197.35 | -3,666,156.27 | |
| Jingliang (Caofeidian) Agricultural Development Co., Ltd. | 5,498,020.87 | -409,012.23 | -409,012.23 | -6,847,756.31 |
Continue:
| Name of subsidiaries | Amount of last year | |||
| Business Income | Net profit | Total Amount of Comprehensive Incomes | Cash Flow from Operating Activities | |
| Jingliang (Tianjin) Grain and Oil Industrial Co., Ltd. | 1,643,788,487.08 | 2,908,895.69 | 2,908,895.69 | -172,222,048.52 |
| Zhejiang Xiaowangzi Food Co., Ltd. | 386,408,244.69 | 50,378,679.66 | 50,378,679.66 | 83,221,633.75 |
| Jingliang (Hebei) Grease Industrial Co., Ltd. | 121,186,048.78 | 1,616,810.38 | 1,616,810.38 | -35,588,805.50 |
| Jingliang Rural Complex Construction and Operation (Xinyi) Co., Ltd. | -191,243.14 | -191,243.14 | -233,925.20 | |
| Jingliang (Caofeidian) Agricultural Development Co., Ltd. | -43,179.82 | -43,179.82 | -7,380,882.40 | |
(II) The share of owner's equity in the subsidiary changes but still controls the transaction of the subsidiary1． A statement of a change in the share of owners' equity in the subsidiaryXinyi Grain was registered on January 10 of 2018, the company accounts for 45% of the shares. On November 27 of 2018, at the30th meeting of the eighth board of directors, the company approved the Bill on the Partial Equity Rights of Beijing Grain PastoralComplex Construction and Operation (Xinyi) Co., Ltd. Yujinzhu Agricultural Partnership Enterprise (General Partnership) in ShizhuTujia Autonomous County transferred 6% of Xinyi Grain to the company and after the transaction, the company held 51% of the shares of Xinyi Grain. In March 2019, Xinyi Grain completed the changes in the registration and banking business.2． The impact of the transaction on minority shareholders' equity and owners' equity attributable to the parentcompanyAfter the transaction, the increase of the ownership interest attributed to the parent company was 1,780,563.05 yuan, while the decrease in minority equity was 1,780,563.05 yuan.(III) Equity in a joint venture or joint venture
(1) Important joint venture or affiliated business
| Name of joint venture or affiliated business | Main place of business | Registration place | Business nature | Shareholding ratio (%) | Accounting Treatment to Enterprise Investment of Joint Venture or | |
| Direct | Indirect | |||||
| Affiliated Business | ||||||
| Beijing Zhengda Feed Co., Ltd. | Niulanshan, Shunyi District, Beijing | Niulanshan, Shunyi District, Beijing | Production Company | 50.00 | Equity Method | |
| Zhongchuliang (Tianjin) Storatge and Logistics Co., Ltd. | No.1, Lingang Economic Zone, Binhai New District, Tianjin | No.1, Lingang Economic Zone, Binhai New District, Tianjin | Transportation, Warehousing | 30.00 | Equity Method |
(2) Important main financial information of joint venture
| Program | Beijing Zhengda Feed Co., Ltd. | Beijing Zhengda Feed Co., Ltd. |
| Ending Balance/Current Amount | Beginning Balance/Previous Amount | |
| Current Assets | 38,232,398.26 | 53,128,106.97 |
| Include: Cash and Cash Equivalents | 1,922,894.41 | 4,164,426.47 |
| Non-current Assets | 167,031,061.18 | 166,435,292.09 |
| Total Assets | 205,263,459.44 | 219,563,399.06 |
| Current Liabilities | 75,693,810.89 | 95,250,888.23 |
| Non-current Liabilities | ||
| Total Liabilities | 75,693,810.89 | 95,250,888.23 |
| Minority Equity | ||
| Equity belong to the parent company | 129,569,648.55 | 124,312,510.83 |
| Share of net assets in proportion to the shareholding ratio | 64,784,824.28 | 62,156,255.42 |
| Adjusting Items | ||
| --Goodwill | ||
| --Internal transaction is not profitable | ||
| --Others | ||
| Book value of equity investment in joint venture | 67,985,678.14 | 65,339,624.28 |
| Fair value of equity investment of a joint venture with publicly quoted prices | ||
| Business Income | 128,269,508.30 | 206,302,854.35 |
| Financial Expenses | -1,228,641.61 | -890,925.87 |
| Income Tax Expenses | 1,752,379.24 | 3,483,325.87 |
| Net profit | 5,292,107.72 | 10,583,134.31 |
| Net profit from termination of operation | ||
| Other Comprehensive Income | ||
| Total Amount of Comprehensive Incomes | 5,292,107.72 | 10,583,134.31 |
| Dividends received in the current period from the joint venture |
(3) Key financial information of the joint venture
| Program | Ending Balance/Current Amount | Beginning Balance/Previous Amount |
| Zhongchuliang (Tianjin) Storatge and Logistics Co., Ltd. | Zhongchuliang (Tianjin) Storatge and Logistics Co., Ltd. | |
| Current Assets | 116,185,192.13 | 120,310,983.11 |
| Non-current Assets | 344,178,944.31 | 349,183,791.13 |
| Program | Ending Balance/Current Amount | Beginning Balance/Previous Amount |
| Zhongchuliang (Tianjin) Storatge and Logistics Co., Ltd. | Zhongchuliang (Tianjin) Storatge and Logistics Co., Ltd. | |
| Total Assets | 460,364,136.44 | 469,494,774.24 |
| Current Liabilities | 9,634,249.16 | 19,419,434.80 |
| Non-current Liabilities | 58,450,000.00 | 58,450,000.00 |
| Total Liabilities | 68,084,249.16 | 77,869,434.80 |
| Minority Equity | ||
| Equity belong to the parent company | 392,279,887.28 | 391,625,339.44 |
| Share of net assets in proportion to the shareholding ratio | 117,683,966.18 | 117,487,601.83 |
| Adjusting Items | ||
| --Goodwill | ||
| --Internal transaction is not profitable | ||
| --Others | ||
| Book value of equity investment in joint venture | 117,683,966.18 | 117,487,601.83 |
| Fair value of equity investments in associated enterprises that are publicly quoted | ||
| Business Income | 2,896,792.95 | 10,944,998.17 |
| Net profit | 654,547.84 | 5,466,526.47 |
| Net profit from termination of operation | ||
| Other Comprehensive Income | ||
| Total Amount of Comprehensive Incomes | 654,547.84 | 5,466,526.47 |
| Dividends received from affiliated business during the current period |
IX. Risk disclosure related to financial instrumentsThe company's business activities will face various financial risks such as credit risk, liquidity risk and market risk (mainly interestrate risk). The company's overall risk management plan aims at the unpredictability of the financial market and strives to reduce thepotential adverse impact on the company's financial performance.(I) Credit RiskThe company's credit risk is mainly from monetary funds, accounts receivable, other receivables and available for sale of financialassets. Management has established appropriate credit policies and continuously monitors the exposure of these credit risks.The monetary funds held by the company are mainly deposited in commercial banks and other financial institutions. Themanagement believes that these commercial banks have high reputation and assets status, as well as low credit risk. The companyadopts a quota policy to avoid credit risk to any financial institution.For accounts receivable and other receivables, the company sets relevant policies to control credit risk exposure. The companyevaluates the customer's credit qualification and sets the corresponding credit period based on the customer's financial condition, thepossibility of obtaining guarantees from third parties, credit history and other factors such as current market conditions. The companywill regularly monitor the credit records of customers. For customers with poor credit records, the company will adopt writtenreminders, shorten the credit period or cancel the credit period to ensure that the overall credit risk of the company is within acontrollable range.
The maximum credit risk exposure of the company is the book amount of each financial asset in the balance sheet. Except for thefinancial guarantee provided by the company in the notes, the company does not provide any other guarantee that may expose thecompany to credit risk.(II) Liquidity RiskLiquidity risk refers to the risk that the company cannot obtain sufficient funds in time to meet the needs of business developmentor pay the debts due and other payment obligations.The company's finance department continuously monitors the company's short-term and long-term capital needs to ensure themaintenance of adequate cash reserves; It will also continue to monitor whether it is in compliance with the terms of the borrowingagreements and obtains commitments from major financial institutions to provide adequate reserve funds to meet short-term andlong-term funding needs.As of June 30, 2019, the company's financial assets and liabilities with undiscounted contract cash flow are listed as follows:
| Program | Ending Balance | |||||
| Net Book Value | Original Book Value | Within 1 Year | 1-2 Years | 2-5 Years | Above 5 Years | |
| Monetary Funds | 662,196,984.69 | 662,196,984.69 | 662,196,984.69 | |||
| Account Receivable | 92,400,224.12 | 93,434,760.41 | 86,216,036.58 | 7,095,303.83 | 123,420.00 | |
| Other Receivables | 44,773,393.44 | 45,150,356.93 | 42,488,330.81 | 2,406,104.12 | 205,922.00 | 50,000.00 |
| In total | 799,370,602.25 | 800,782,102.03 | 790,901,352.08 | 9,501,407.95 | 329,342.00 | 50,000.00 |
| Short-term Loan | 1,593,532,494.10 | 1,593,532,494.10 | 1,593,532,494.10 | |||
| Accounts Payable | 191,662,878.39 | 191,662,878.39 | 191,662,878.39 | |||
| Other Payables | 164,157,301.47 | 164,157,301.47 | 161,276,801.47 | 2,880,500.00 | ||
| In total | 1,949,352,673.96 | 1,949,352,673.96 | 1,946,472,173.96 | 2,880,500.00 | ||
Continue:
| Program | Beginning Balance | |||||
| Net Book Value | Original Book Value | Within 1 Year | 1-2 Years | 2-5 Years | Above 5 Years | |
| Monetary Funds | 924,870,016.78 | 924,870,016.78 | 924,870,016.78 | |||
| Account Receivable | 97,775,710.11 | 98,642,588.11 | 98,642,588.11 | |||
| Other Receivables | 18,256,513.93 | 18,573,440.15 | 18,573,440.15 | |||
| Financial assets available for sale | 20,000,000.00 | 30,500,000.00 | 30,500,000.00 | |||
| In total | 1,060,902,240.82 | 1,072,586,045.04 | 1,072,586,045.04 | |||
| Short-term Loan | 1,437,715,080.91 | 1,437,715,080.91 | 1,437,715,080.91 | |||
| Accounts Payable | 140,564,713.11 | 140,564,713.11 | 140,564,713.11 | |||
| Other Payables | 111,288,708.99 | 111,288,708.99 | 111,288,708.99 | |||
| In total | 1,689,568,503.01 | 1,689,568,503.01 | 689,568,503.01 | |||
(III) Market Risk
1． Interest Rate Risk
The company's interest rate risk is mainly from bank loans.
As of June 30, 2019, the company's interest-bearing debt is mainly RMB denominated floating rate contract with the amount of1,593,532,494.10 Yuan.
X. Fair Value
| Program | Ending Fair Value | |||
| Level 1 Fair Value Measurement | Level 2 Fair Value Measurement | Level 3 Fair Value Measurement | Total | |
| I. Continuous fair value measurement | -- | -- | -- | -- |
| (I) Transactional financial assets | ||||
| 1. Financial assets measured at fair value and whose changes are recorded in current profits and losses | ||||
| (1) Debt instrument investment | ||||
| (2) Equity instrument investment | ||||
| (3) Derivative financial assets | ||||
| 2. Financial asset that is measured at fair value and whose changes are recorded in current profits and losses | ||||
| (1) Debt instrument investment | ||||
| (2) Equity instrument investment | ||||
| (II) Other creditor's rights investment | ||||
| (III) Other equity instrument investment | 20,000,000.00 | 20,000,000.00 | ||
| (IV) Investment property | ||||
| 1. Right to use land for lease | ||||
| 2. Leased building | ||||
| 3. Hold and prepare for the transfer of land use rights after appreciation | ||||
| (V) Biological assets | ||||
| 1. Consumptive biological assets | ||||
| 2. Productive biological assets | ||||
| Total assets continuously measured at fair value | ||||
| (VI) Transactional financial liabilities | ||||
| Include: Issued transactional bond | ||||
| Derivative financial liability | ||||
| Others | ||||
| (VII) Financial liability that is s designated as being measured by fair value and being included in current | ||||
| profits and losses | ||||
| Amount of liabilities continuously measured at fair value | ||||
| II. Non-continuous fair value measurement | -- | -- | -- | -- |
| (I) Hold assets for sale | ||||
| Total assets not continuously measured at fair value | ||||
| Total liabilities not continuously measured at fair value |
XI. Related parties and related transactions(I) Situation of the parent company of the enterprise
| Name of parent name | Registration place | Business nature | Registered capital | Shareholding ratio of the company (%) | Ratio of voting rights of the company (%) |
| (Ten Thousand Yuan) | |||||
| Beijing Grain Group Co., Ltd. | Beijing City | Investment Management | 90,000.00 | 42.06 | 42.06 |
The actual controller of the company is the State-owned Assets Supervision and Administration Commission of People's Governmentof Beijing Municipality.(II) Situation of the company's subsidiariesRefer to Note Ⅷ (Ⅰ) Equity in subsidies
(Ⅲ)Situation of the company's joint venture or affiliated businessThe company's important joint venture or affiliated business refer to the equity in the joint venture or affiliated business in thenotes Ⅷ (Ⅲ).(Ⅳ)Situation of other related parties
| Name of other related parties | Other related parties' relation with the company |
| Beijing Baijiayi Food Co. Ltd. | Subject to final control |
| Beijing Sugar & Wine Sales Co., Ltd | Subject to final control |
| Beijing Damofang Flour Co., Ltd. | Subject to final control |
| Beijing Daxing National Grain Reserve | Subject to final control |
| Beijing Er Shang Dahongmen Meat & Food Co., Ltd. | Subject to final control |
| Beijing Er Shang Gongyifu Food Co., Ltd. | Subject to final control |
| Beijing Er Shang Longhe Food Co., Ltd. | Subject to final control |
| Beijing Guchuan Rice Industry Co., Ltd. | Subject to final control |
| Beijing Guchuan Food Co., Ltd. | Subject to final control |
| Beijing Hongyuan Lijun Grain and Oil Supply Co., Ltd. | Subject to final control |
| Beijing Jingliang E-Commerce Co., Ltd. | Subject to final control |
| Name of joint venture or affiliated business | Relations with the company |
| Beijing Zhengda Feed Co., Ltd. | Joint venture |
| Zhongchuliang (Tianjin) Storatge and Logistics Co., Ltd. | Affiliated Business |
| Beijing Jingliang Oriental Grain and Oil Trade Co., Ltd. | Subject to final control |
| Beijing Jingliang Biotechnology Industry Co., Ltd. | Subject to final control |
| Beijing Jingliang Taihe Realty Co., Ltd. | Subject to final control |
| Beijing Jingliang Taiyu Realty Co., Ltd. | Subject to final control |
| Beijing Jingliang Logistics Co., Ltd. | Subject to final control |
| Beijing Jingliang Xinda Property Management Co., Ltd. | Subject to final control |
| Beijing Jingliang Canal Grain and Oil Trade Co., Ltd. | Subject to final control |
| Beijing Jingliang Realty Co., Ltd. | Subject to final control |
| Beijing Juncheng Nuoyuan Grain and Oil Trade Co., Ltd. | Subject to final control |
| Beijing Grain Group Co., Ltd. | Subject to final control |
| Beijing Capital Agribusiness Group Finance Co., Ltd. | Subject to final control |
| Beijing Liubiju Food Co., Ltd. | Subject to final control |
| Beijing Longde Business Management Co., Ltd. | Subject to final control |
| Beijing Mysleep Hotel Management Co., Ltd. | Subject to final control |
| Beijing Sanyuan Oil Co., Ltd. | Subject to final control |
| Beijing Sanyuan Food Co., Ltd. | Subject to final control |
| Feed Branch of Beijing Sanyuan Seed Technology Co., Ltd. | Subject to final control |
| Beijing Dahongmen Grain Storage Co., Ltd. | Subject to final control |
| Beijing Dahongmen Oil Factory Co., Ltd. | Subject to final control |
| Beijing Haidianxijiao Grain & Oil Supply Station Co., Ltd. | Subject to final control |
| Beijing Huacheng Trade Co., Ltd. | Subject to final control |
| Beijing Jingliang Shengyuan Grain & Oil Sale Co., Ltd. | Subject to final control |
| Beijing Liangguan Grain & Oil Supply Station | Subject to final control |
| Beijing Grain Science Research Station | Subject to final control |
| Beijing Longqing Xiadu Army Grain Supply Co., Ltd. | Subject to final control |
| Beijing Maliandao Special Grain & Oil Supply Station Co., Ltd. | Subject to final control |
| Beijing Pinggu Grain & Oil Industry & Trade Co., Ltd. | Subject to final control |
| No. 34 of Supply Station of Beijing Food Supply Department | Subject to final control |
| Beijing Yanqing Farm Co., Ltd. | Subject to final control |
| Beijing Yonghe Xincheng Grain & Oil Supply Co., Ltd. | Subject to final control |
| Beijing Zidibing Grain & Oil Supply Co., Ltd. | Subject to final control |
| Beijing Shounong Animal Husbandry Development Co., Ltd. | Subject to final control |
| Beijing Shounong Supply Chain Management Co., Ltd. | Subject to final control |
| Beijing Shounong Food Group Co., Ltd. | Subject to final control |
| Beijing Shounong Xiangshan Meeting Center Co., Ltd. | Subject to final control |
| Beijing Aquatic Product Co., Ltd. | Subject to final control |
| Beijing Wuhuan Shuntong Supply Chain Management Co., Ltd. | Subject to final control |
| Beijing Xingshishang Trade Co., Ltd. | Subject to final control |
| Beijing Yueshengzhai Halal Food Co., Ltd. | Subject to final control |
| Beijing Changcheng Danyu Livestock Products Co., Ltd. | Subject to final control |
| Beijing Zhibohui Architectural Design Institute Co., Ltd. | Subject to final control |
| Beijing Zhujun Grain and Oil Supply Co., Ltd. | Subject to final control |
| Hebei Shounong Modern Agriculture Technology Co., Ltd. | Subject to final control |
| Jingliang (Tianjin) E-commerce Co., Ltd. | Subject to final control |
| Jingliang (Tianjin) Trade Development Co., Ltd. | Subject to final control |
| Shandong Fukuan Biological Engineering Co., Ltd. | Subject to final control |
| China Meat Research Center | Subject to final control |
(Ⅴ) Transaction of Related Parties
1. For subsidiaries that have a controlling relationship and have been included in the consolidated financial statements ofthe company, their mutual transactions and parent-subsidiary transactions have been set off.
2. Purchase goods, receive labor services related transactions
| Related parties | Related transaction content | Amount Incurred in the Current Period | Approved transaction limit | Whether exceed the transaction limit | Amount incurred in the last period |
| Beijing Guchuan Food Co., Ltd. | Purchase goods | 6,712,357.05 | 25,800,000.00 | No | 8,704,540.14 |
| Beijing Guchuan Rice Co., Ltd. | Purchase goods | 1,080,320.62 | 12,700,000.00 | No | 2,321,519.05 |
| Beijing Jingliang Dongfang Grain and Oil Trade Co., Ltd. | Purchase goods | 62,306.04 | 700,000.00 | No | 238,733.49 |
| Other related parties of the company | Purchase goods | 681,702.10 | 1,900,000.00 | No | 3,385,024.22 |
| Total | 8,536,685.81 | 41,100,000.00 | 14,649,816.90 |
3. Situation of selling goods/providing labor services
| Related parties | Related transaction content | Amount Incurred in the Current Period | Amount incurred in the last period |
| Beijing Sanyuan Seed Technology Co., Ltd. | Sell Goods | 14,515,875.28 | |
| Hebei Shounong Modern Agricultural Technology Co., Ltd. | Sell Goods | 10,975,282.69 | |
| Beijing Haidian Western Suburb Grain and Oil Supply Station Co., Ltd. | Sell Goods | 5,797,596.22 | 6,439,818.19 |
| Beijing Jingliang Electronic Commerce Co., Ltd. | Sell Goods | 556,667.87 | 4,812,771.10 |
| Beijing Zidibing Grain and Oil Supply Co., Ltd. | Sell Goods | 1,578,420.33 | 2,183,385.73 |
| Beijing Food Supply Division No.34 Supply Department Co., Ltd. | Sell Goods | 1,056,193.89 | 1,116,117.18 |
| Beijing Jingliang Dongfang Grain and Oil Trade Co., Ltd. | Sell Goods | 3,098,779.64 | 2,848,458.76 |
| Beijing Maliandao Grain and Oil Special Supply Co., Ltd. | Sell Goods | 1,299,552.22 | 1,401,727.24 |
| Beijing Longqing Xiadu Military Grain Supply Co., Ltd. | Sell Goods | 363,175.15 | 360,148.97 |
| Beijing Zhujun Grain and Oil Special Supply Co., Ltd. | Sell Goods | 3,014,819.43 | 2,491,096.58 |
| Beijing Guchuan Rice Co., Ltd. | Sell Goods | 380,345.69 | 189,562.50 |
| Beijing Guchuan Food Co., Ltd. | Sell Goods | 1,120,065.36 | 1,175,322.73 |
| Beijing Guchuan Food Co., Ltd. | Sales services | 66,742.78 | |
| Other related parties of the company | Sell Goods | 4,360,746.94 | 1,126,204.26 |
| Total | 48,117,520.71 | 24,211,356.02 |
Note: the transaction price of the affiliated transaction shall be the price charged by the same or similar business activities between thenon-affiliated parties as the transaction price of the affiliated transaction.
4. Related leasing situation
①The company as leaser
| Leasee's name | Leasing assets type | Rental income recognized in the current period | Rental income recognized in the last period |
| Beijing Jingliang Electronic Commerce Co., Ltd. | Car rental | 5,440.00 | |
| Beijing Guchuan Food Co., Ltd. | House rent | 9,523,809.50 | 3,500,000.00 |
| Total | 9,523,809.50 | 3,505,440.00 |
②The company as leasee
| Leaser's name | Leasing assets type | Rental income recognized in the current period | Rental income recognized in the last period |
| Beijing Dahongmen Grain Collection Storage Warehouse Co., Ltd. | House rent | 956,592.00 | 2,019,284.63 |
| Beijing Grain Group Co., Ltd. | House rent | 700,000.00 | 2,453,228.62 |
| Beijing Dahongmen Oil Plant | House rent | 340,000.00 | |
| Beijing Daxing State Grain Storage Warehouse | Oil tank and office rent | 1,055,100.00 | 1,055,100.00 |
| Total | 3,051,692.00 | 5,527,613.25 |
5. Related party funds borrowing
As of June 30, 2019, the company has borrowed 270 million yuan from Beijing Shounong Food Group Finance Co., Ltd.
6. Key management compensation
| Program | Amount of current year (ten thousand Yuan) | Amount of last year (ten thousand Yuan) |
| Key management compensation | 78.26 | 68.65 |
7. Other related transactions
8. Receivables and payables of related parties
(1) Receivables
| Item Name | Ending Balance | Beginning Balance | ||
| Book Balance | Bad-debt Provision | Book Balance | Bad-debt Provision | |
| Accounts receivable: | ||||
| Beijing Liangguan Grain and Oil Supply Station | 37,200.00 | |||
| Beijing Jingliang Electronic Commerce Co., Ltd. | 1,500.00 | 146,333.80 | ||
| Beijing Jingliang Dongfang Grain and Oil Trade Co., Ltd. | 24,240.00 | |||
| Beijing Zhujun Grain and Oil Special Supply Co., Ltd. | 446,400.00 | 1,394,180.00 | ||
| Beijing Jingliang Dongfang Grain and Oil Trade Co., Ltd. | 153,037.00 | 1,067,408.00 | ||
| Beijing Guchuan Food Co., Ltd. | 10,013,730.00 | 370,505.00 | ||
| Beijing Guchuan Rice Co., Ltd. | 2,000.00 | |||
| Beijing Haidian Western Suburb Grain and Oil Supply Station Co., Ltd. | 177,320.00 | 436,300.00 | ||
| Beijing Ershanggong Yifu Food Co., Ltd. | 35,640.00 | |||
| Leaser's name | Program | Volume confirmed for the current period | Volume confirmed for the last period |
| Beijing Guchuan Food Co., Ltd. | Water and electricity Fee | 1,380,188.9 | 1,693,878.38 |
| Total | 1,380,188.9 | 1,693,878.38 |
| Item Name | Ending Balance | Beginning Balance | ||
| Book Balance | Bad-debt Provision | Book Balance | Bad-debt Provision | |
| Feed Branch of Beijing Sanyuan Seed Technology Co., Ltd. | 2,523,693.10 | |||
| Hebei Shounong Modern Agricultural Technology Co., Ltd. | 395,857.64 | |||
| Jingliang (Tianjin) Electronic Commerce Co., Ltd. | 4,074.00 | |||
| Total | 13,773,417.74 | 3,456,000.80 | ||
(2) Payable Items
| Item Name | Ending Balance | Beginning Balance |
| Accounts payable: | ||
| Beijing Sanyuan Food Co., Ltd. | 8,234.86 | |
| Beijing Guchuan Food Co., Ltd. | 133,577.98 | 211,309.09 |
| Beijing Jingliang Dongfang Grain and Oil Trade Co., Ltd. | 309.63 | 127.27 |
| Shandong Fukuan Biological Engineering Co., Ltd. | 56,187.93 | |
| Total | 142,122.47 | 267,624.29 |
| Advance payment: | ||
| Beijing Guchuan Rice Co., Ltd. | 11,988.01 | |
| Total | 11,988.01 | |
| Other payables: | ||
| Beijing Grain Group Co., Ltd. | 1,141,790.30 | 561,790.30 |
| Beijing Jingliang Electronic Commerce Co., Ltd. | 169,728.00 | |
| Beijing Guchuan Food Co., Ltd. | 260,405.90 | |
| Dahongmen Oil Plant | 47,025.76 | |
| Beijing Daxing State Grain Storage Warehouse | 1,055,100.00 | |
| Jingliang (Tianjin) Trade Development Co., Ltd. | 38,789.20 | |
| Total | 2,457,296.2 | 817,333.26 |
XII. Commitments and contingencies
1. Items of major commitments
(1) Supplementary Agreement (II) to the Profit Compensation Agreement approved by the seventh meeting of the eighth board ofdirectors of the company stipulates that the promised net profits of Beijing Jingliang Food Co., Ltd. in 2017, 2018 and 2019 shall be noless than 130,011,500 Yuan, 150,393,700 Yuan and 162,160,500 Yuan respectively.
2. Contingency
Except for the pending litigation disclosed in Section 5 of the semi-annual report, the company has no other contingencies todisclose at the end of this report.
XIII.Events after the balance sheet date
Nil
XIV.Description of other important matters
Nil
XV. Notes to key items in the parent company's financial statementsAppendix 1. Accounts receivable
1. Classified disclosure of accounts receivable
| Type | Ending Balance | ||||
| Book Balance | Bad-debt Provision | Book Value | |||
| Amount | Ratio (%) | Amount | Accrual Ratio (%) | ||
| The accounts receivable for which provision for bad debts is made on a single item basis | |||||
| Include： | |||||
| Accounts receivable for bad debt provision on a combined basis | 126,420.00 | 100.00 | 51,960.00 | 41.10 | 74,460.00 |
| Include： | |||||
| Group1-the accounts receivable according to aging analysis method | 126,420.00 | 100.00 | 51,960.00 | 41.10 | 74,460.00 |
| Total | 126,420.00 | 100.00 | 51,960.00 | 41.10 | 74,460.00 |
Continue:
| Type | Beginning Balance | ||||
| Book Balance | Bad-debt Provision | Book Value | |||
| Amount | Ratio (%) | Amount | Accrual Ratio (%) | ||
| The accounts receivable for which provision for bad debts is made on a single item basis | |||||
| Include: | |||||
| Accounts receivable for bad debt provision on a combined basis | 126,420.00 | 100.00 | 46,434.00 | 36.73 | 79,986.00 |
| Include: | |||||
| Group1-the accounts receivable according to aging analysis method | 126,420.00 | 100.00 | 46,434.00 | 36.73 | 79,986.00 |
①In group, accounts receivable transfers to bad debt provision according to aging analysis method
| Aging | Ending Balance | |||
| Account Receivable | Bad-debt Provision | Net Amount | Accrual Ratio (%) | |
| Within 1 Year | 2 | |||
| 1-2 Years | 3000.00 | 150.00 | 2,850.00 | 5 |
| 2-3 Years | 33000.00 | 6,600.00 | 26,400.00 | 20 |
| 3-4 Years | 90420.00 | 45,210.00 | 45,210.00 | 50 |
| 4-5 Years | 80 | |||
| Above 5 Years | 100 | |||
| Total | 126,420.00 | 51,960.00 | 74,460.00 | ----- |
Continue:
| Aging | Beginning Balance | |||
| Account Receivable | Bad-debt Provision | Net Amount | Accrual Ratio (%) | |
| Within 1 Year | 2 | |||
| 1-2 Years | 3000.00 | 150.00 | 2,850.00 | 5 |
| 2-3 Years | 51420.00 | 10284.00 | 41,136.00 | 20 |
| 3-4 Years | 72,000.00 | 36,000.00 | 36,000.00 | 50 |
| 4-5 Years | 80 | |||
| Above 5 Years | 100 | |||
| Total | 126,420.00 | 46,434.00 | 79,986.00 | — |
2. No shareholder holding more than 5%(including 5%) of the voting shares of the company in the accounts
receivable at the end of the reporting period.
3. No related party accounts receivable at the end of the period.
Appendix 2. Advance Payment
| Aging | Ending Balance | ||
| Prepayment | Ratio (%) | Bad-debt Provision | |
| Within 1 Year | 54,220.00 | 73.05 | |
| 1-2 Years | 20,000.00 | 26.95 | |
| 2-3 Years | |||
| Above 3 Years | |||
| Total | 74,220.00 | 100.00 | |
| Continue: | |||
| Aging | Beginning Balance | ||
| Prepayment | Ratio (%) | Bad-debt Provision | |
| Within 1 Year | |||
| 1-2 Years | 20,000.00 | 100.00 | |
| 2-3 Years | |||
| Above 3 Years | |||
| Total | 20,000.00 | 100.00 | |
Appendix 3 Other Receivables
| Program | Ending Balance | Year-Beginning Balance |
| Other Receivables | 12,472,102.45 | 227,353.10 |
| Interest Receivable | ||
| Dividend Receivable | ||
| 合 计 | 12,472,102.45 | 227,353.10 |
1. Classified disclosure of other receivables
| Type | Ending Balance | ||||
| Book Balance | Bad-debt Provision | Book Value | |||
| Amount | Ratio (%) | Amount | Accrual Ratio (%) | ||
| Other Receivables with Significant Single Amount and Separate Bad Debt Provision | |||||
| Other receivables for which bad debt provisions are drawn according to the combination of credit risk features | |||||
| Group 1 - Other Receivables Analyzed by Aging | 325,069.85 | 2.60 | 52,967.40 | 16.29 | 272,102.45 |
| Group 2 - Other Receivables of Related Parties | 12,200,000.00 | 97.40 | 12,200,000.00 | ||
| Group Total | 12,525,069.85 | 100.00 | 52,967.40 | 0.42 | 12,472,102.45 |
| Other receivables for which the bad debt provision is drawn separately, although the amount is not significant | |||||
| Total | 12,525,069.85 | 100.00 | 52,967.40 | 0.42 | 12,472,102.45 |
Continue:
| Type | Beginning Balance | ||||
| Book Balance | Bad-debt Provision | Book Value | |||
| Amount | Ratio (%) | Amount | Accrual Ratio (%) | ||
| Other Receivables with Significant Single Amount and Separate Bad Debt Provision | |||||
| Other receivables for which bad debt provisions are drawn according to the combination of credit risk features | |||||
| Group 1: Aging Group | 281,502.34 | 100 | 54,149.24 | 19.24 | 227,353.10 |
| Group 2 - Other Receivables of Related Parties | |||||
| Sub-total of Group | 281,502.34 | 100 | 54,149.24 | 19.24 | 227,353.10 |
| Other receivables for which the bad debt provision is drawn separately, although the amount is not significant | |||||
| Total | 281,502.34 | 100 | 54,149.24 | 19.24 | 227,353.10 |
①In group, other receivables of bad debt provision are drawn according to aging analysis method
| Aging | Ending Balance | |||
| Other Receivables | Bad-debt Provision | Net Amount | Accrual Ratio (%) | |
| Within the Credit Period | 2,200.00 | 2,200.00 | 0 | |
| Within 1 Year | 124,500.00 | 124,500.00 | 2 | |
| 1-2 Years | 148,369.85 | 2,967.40 | 145,402.45 | 5 |
| 2-3 Years | 20 | |||
| 3-4 Years | 50 | |||
| 4-5 Years | 80 | |||
| Above 5 Years | 50,000.00 | 50,000.00 | 100 | |
| Total | 325,069.85 | 52,967.40 | 272,102.45 | ----- |
Continue:
| Aging | Beginning Balance | |||
| Other Receivables | Bad-debt Provision | Net Amount | Accrual Ratio (%) | |
| Within the Credit Period | 24,040.24 | 24,040.24 | 0 | |
| Within 1 Year | 207,462.10 | 4,149.24 | 203,312.86 | 2 |
| 1-2 Years | 5 | |||
| 2-3 Years | 20 | |||
| 3-4 Years | 50 | |||
| 4-5 Years | 80 | |||
| Above 5 Years | 50,000 | 50,000 | 100 | |
| Total | 281,502.34 | 54,149.24 | 227,353.10 | ----- |
2. Bad debt provision for the current period
The amount of bad debt provision transferred back to the current period is 1,181.84 Yuan.
3. Other receivables are classified according to the payment nature
| Payment Nature | Ending Balance | Beginning Balance |
| Fund of Disbursement | 148,369.85 | 207,462.10 |
| Intercourse Funds of Unit | 12,324,500.00 | |
| Employee Accounts Receivable | 50,000.00 | 24,040.24 |
| Others | 2,200.00 | 50,000.00 |
| Total | 12,525,069.85 | 281,502.34 |
4. Withdrawing situation of bad-debt provision
| Bad-debt Provision | Stage I | Stage II | Stage III | Total |
| Expected Credit Losses over the Next 12 Months | Expected Credit Loss for the Entire Duration (No Credit Impairment is Occurred) | Expected Credit Loss for the Entire Duration (Credit Impairment has Occurred) | ||
| Balance on Juanry 1, 2019 | 54,149.24 | |||
| Balance for the Current Period on January 1, 2019 | —— | —— | —— | —— |
| --Transfer into Stage II | ||||
| --Transfer into Stage III | ||||
| --Return to Stage II | ||||
| --Return to Stage I | ||||
| Accrual for the Current Period | ||||
| Return for Current Period | 1,181.84 | |||
| Write-off for Current Period | ||||
| Charge-off for Current Period | ||||
| Other Changes | ||||
| Balance on June 30, 2019 | 52,967.40 |
5. Among other accounts receivable at the end of the period, there is no shareholder holding more than 5%
(including 5%) of the voting shares of the company debt.
6. Other receivables in the top five of the ending balance collected by the defaulting party
| Unit Name | Payment Nature | Ending Balance | Aging | Percentage of ending balance of other receivables (%) | Bad-debt Provision |
| Ending Balance | |||||
| Unit I | Intercourse Funds | 12,200,000.00 | 1-2 Years | 97.40 | |
| Unit II | Borrowing | 124,500.00 | Within 3 Months | 0.99 | |
| Unit III | Personal Intercourse Funds | 50,000.00 | Above 5 Years | 0.40 |
| Unit IV | Personal Intercourse Funds | 46,000.00 | Above 5 Years | 0.37 | |
| Total | 12,420,500.00 | ----- | 99.17 |
Appendix 4 Inventory
1. Inventory Classification
| Program | Ending Balance | Beginning Balance | ||||
| Book Balance | Falling Price Reserves | Book Value | Book Balance | Falling Price Reserves | Book Value | |
| Product Development | 16,497,730.12 | 11,673,694.67 | 4,824,035.45 | 16,497,730.12 | 11,673,694.67 | 4,824,035.45 |
| Total | 16,497,730.12 | 11,673,694.67 | 4,824,035.45 | 16,497,730.12 | 11,673,694.67 | 4,824,035.45 |
2. Falling Price Reserves of Inventory
| Inventory Type | Beginning Balance | Increased Amount in the Current Period | Reduced Amount in the Current Period | Ending Balance | |||
| Accrual | Others | Return | Write-off | Others | |||
| Product Development | 11,673,694.67 | 11,673,694.67 | |||||
| Total | 11,673,694.67 | 11,673,694.67 | |||||
Appendix 5 Other Current Assets
| Program | Ending Balance | Year-Beginning Balance |
| Advance Payment of Taxes | 75,984.05 | 75,984.05 |
| Nondeductible Income Tax of VAT | 2,095,794.96 | 1,886,387.27 |
| Others | 19,170,700.00 | |
| Total | 21,342,479.01 | 1,962,371.32 |
Appendix 6 Long-term Equity Investment
(1) Classification of long-term equity investment
| Payment Nature | Ending Balance | Beginning Balance | ||||
| Book Balance | Provision for Impairment | Book Value | Book Balance | Provision for Impairment | Book Value | |
| Investment to subsidiary | 2,377,420,527.10 | 2,377,420,527.10 | 2,375,639,964.05 | 2,375,639,964.05 | ||
| Investment to joint venture and affiliated business | ||||||
| Total | 2,377,420,527.10 | 2,377,420,527.10 | 2,375,639,964.05 | 2,375,639,964.05 | ||
(2) Investment to subsidiary
| Invested Unit | Year-Beginning Balance | Increase in the Current Period | Reduction in the Current Period | Ending Balance | Impairment provision for the current period | Ending Balance of Impairment Provision |
| Beijing Jingliang Food Co., Ltd. | 2,336,639,964.05 | 2,336,639,964.05 |
| Invested Unit | Year-Beginning Balance | Increase in the Current Period | Reduction in the Current Period | Ending Balance | Impairment provision for the current period | Ending Balance of Impairment Provision |
| Jingliang Rural Complex Construction and Operation (Xinyi) Co., Ltd. | 13,500,000.00 | 1,780,563.05 | 15,280,563.05 | |||
| Jingliang (Caofeidian) Agricultural Development Co., Ltd. | 25,500,000.00 | 25,500,000.00 | ||||
| Total | 2,375,639,964.05 | 1,780,563.05 | 2,377,420,527.1 |
Appendix 7 Investment of Other Equity Instruments
| Program | Ending Balance | Beginning Balance | ||||
| Book Balance | Provision for Impairment | Book Value | Book Balance | Provision for Impairment | Book Value | |
| Calculated and Measured by Cost | 30,500,000.00 | 10,500,000.00 | 20,000,000.00 | |||
| Total | 30,500,000.00 | 10,500,000.00 | 20,000,000.00 | |||
Appendix 8 Investment Property
| Program | House, Building | Land Use Right | Construction in Process | Total |
| I. Original Book Value | ||||
| 1． Beginning Balance | 8,412,701.88 | 8,412,701.88 | ||
| 2． Increased Amount in the Current Period | ||||
| 3． Reduced Amount in the Current Period | ||||
| (1) Disposal | ||||
| 4． Ending Balance | 8,412,701.88 | 8,412,701.88 | ||
| II. Accumulated Depreciation (Amortization) | ||||
| 1． Beginning Balance | 2,180,063.83 | 2,180,063.83 | ||
| 2． Increased Amount in the Current Period | 151,218.30 | 151,218.30 | ||
| (1) Accrual or Amortization | 151,218.30 | 151,218.30 | ||
| 3． Reduced Amount in the Current Period | ||||
| (1) Disposal | ||||
| 4． Ending Balance | 2,331,282.13 | 2,331,282.13 | ||
| III. Provision for Impairment | ||||
| 1． Beginning Balance | 453,843.72 | 453,843.72 | ||
| 2． Increased Amount in the Current Period | ||||
| 3． Reduced Amount in the Current Period | ||||
| (1) Disposal |
| 4． Ending Balance | 453,843.72 | 453,843.72 | ||
| IV. Book Value | ||||
| 1． Ending Book Value | 5,627,576.03 | 5,627,576.03 | ||
| 2． Beginning Book Value | 5,778,794.33 | 5,778,794.33 |
The book value of the investment property used for mortgage at the end of the period is 5,627,576.03 Yuan.Appendix 9 Fixed Assets
| Program | Ending Balance | Year-Beginning Balance |
| Fixed Assets | 3,202,409.24 | 3,260,620.04 |
| 合 计 | 3,202,409.24 | 3,260,620.04 |
1. Situation of Fixed Assets
| Program | House & Building | Machine Equipment | Transportation Facility | Electronic Equipment | Office Equipment | Other Equipment | Total |
| I. Total Original Book Value | |||||||
| 1． Beginning Balance | 16,403,491.48 | 6,019,026.00 | 801,869.16 | 23,224,386.64 | |||
| 2． Increased Amount in the Current Period | 109,751.52 | 109,751.52 | |||||
| (1) Purchase | 109,751.52 | 109,751.52 | |||||
| (2) Transfer from Construction in Progress | |||||||
| (3) Other Transfer | |||||||
| 3． Reduced Amount in the Current Period | |||||||
| (1) Disposal or Scrapping | |||||||
| (2) Other Transfer | |||||||
| 4． Ending Balance | 16,403,491.48 | 6,019,026.00 | 911,620.68 | 23,334,138.16 | |||
| II. Accumulated Depreciation | |||||||
| 1． Beginning Balance | 6,038,500.68 | 5,718,074.70 | 707,895.30 | 12,464,470.68 | |||
| 2． Increased Amount in the Current Period | 150,709.12 | 17,253.20 | 167,962.32 | ||||
| (1) Accrual | 150,709.12 | 17,253.20 | 167,962.32 | ||||
| (2) Others | |||||||
| 3． Reduced Amount in the Current Period | |||||||
| (1) Disposal or Scrapping | |||||||
| (2) Other Transfer |
| 4． Ending Balance | 6,189,209.80 | 5,718,074.70 | 725,148.50 | 12,632,433.00 | |||
| III. Provision for Impairment | |||||||
| 1． Beginning Balance | 7,499,295.92 | 7,499,295.92 | |||||
| 2． Increased Amount in the Current Period | |||||||
| 3． Reduced Amount in the Current Period | |||||||
| 4． Ending Balance | 7,499,295.92 | 7,499,295.92 | |||||
| IV. Total Book Value | |||||||
| 1． Ending Book Value | 2,714,985.76 | 300,951.30 | 186,472.18 | 3,202,409.24 | |||
| 2． Beginning Book Value | 2,865,694.88 | 300,951.30 | 93,973.86 | 3,260,620.04 |
Book value of fixed assets used for guarantee at the end of the period is 2,461,350.50 Yuan.Appendix 10 Intangible Assets
| Program | Software | Land Use Right | Trademark Right | Patent right | Others | Total |
| I. Total Original Book Value | ||||||
| 1． Beginning Balance | 217,013.02 | 217,013.02 | ||||
| 2． Increased Amount in the Current Period | ||||||
| (1) Purchase | ||||||
| (2) Internal R&D | ||||||
| (3) Others | ||||||
| 3． Reduced Amount in the Current Period | ||||||
| (1) Disposal | ||||||
| (2) Others | ||||||
| 4． Ending Balance | 217,013.02 | 217,013.02 | ||||
| II. Accumulated Amortization | ||||||
| 1． Beginning Balance | 45,943.84 | 45,943.84 | ||||
| 2． Increased Amount in the Current Period | 51,320.76 | 51,320.76 | ||||
| (1) Accrual | 51,320.76 | 51,320.76 | ||||
| (2) Others | ||||||
| 3． Reduced Amount in the Current Period | ||||||
| (1) Disposal | ||||||
| (2) Others | ||||||
| 4． Ending Balance | 97,264.60 | 97,264.60 |
| III. Provision for Impairment | ||||||
| 1． Beginning Balance | ||||||
| 2． Increased Amount in the Current Period | ||||||
| (1) Accrual | ||||||
| 3． Reduced Amount in the Current Period | ||||||
| (1) Disposal | ||||||
| 4． Ending Balance | ||||||
| IV. Total Book Value | ||||||
| 1． Ending Book Value | 119,748.42 | 119,748.42 | ||||
| 2． Beginning Book Value | 171,069.18 | 171,069.18 |
Appendix 11 Payroll Payable
| 1.Employee compensation payable |
| Program | Beginning Balance | Increase in the Current Period | Reduction in the Current Period | Ending Balance |
| Short-term Salary | 438,195.96 | 7,290,012.21 | 7,424,433.24 | 303,774.93 |
| Post-service Benefits - Set up a Contribution Plan | 95,254.58 | 95,254.58 | ||
| Dismission Welfare | 1,785,625.22 | 1,785,625.22 | ||
| Total | 438,195.96 | 9,170,892.01 | 9,305,313.04 | 303,774.93 |
| 2.Short-term Salary List | ||||
| Program | Beginning Balance | Increase in the Current Period | Reduction in the Current Period | Ending Balance |
| Salaries, bonuses, allowances and subsidies | 296,694.93 | 5,479,219.58 | 5,604,579.58 | 171,334.93 |
| Employee Benefits Costs | 128,842.66 | 128,842.66 | ||
| Social Insurance Charges | 1,151,165.43 | 1,151,165.43 | ||
| Include: Basic Medical Insurance Premiums | 403,957.30 | 403,957.30 | ||
| Industrial Injury Insurance Premium | 16,460.69 | 16,460.69 | ||
| Birth Insurance Premium | 31,617.01 | 31,617.01 | ||
| Others | 699,130.43 | 699,130.43 | ||
| housing Provident Fund | 517,711.00 | 517,711.00 | ||
| Trade union funds and employee' education funds | 141,501.03 | 13,073.54 | 22,134.57 | 132,440.00 |
| 合 计 | 438,195.96 | 7,290,012.21 | 7,424,433.24 | 303,774.93 |
| 3. Defined Withdrawn Plan | ||||
| Program | Beginning Balance | Increase in the Current Period | Reduction in the Current Period | Ending Balance |
| Basic Endowment Insurance | 92,850.00 | 92,850.00 |
| Unemployment Insurance Expense | 2,404.58 | 2,404.58 | ||
| Total | 95,254.58 | 95,254.58 |
Appendix 12 Tax Payable
| Tax Items | Ending Balance | Beginning Balance |
| Urban Maintenance and Construction Tax | 119,051.20 | 119,051.20 |
| Enterprise Income Tax | 165,292.16 | 165,292.16 |
| House Property Tax | 582,345.82 | 582,300.15 |
| Land Use Tax | 5,349.84 | 5,349.84 |
| Individual Income Tax | 56,524.01 | 52,322.26 |
| Local Education Surcharge | 52,143.07 | 52,143.07 |
| Total | 980,706.10 | 976,458.68 |
Appendix 13 Other Payables
| Program | Ending Balance | Year-Beginning Balance |
| Other Payables | 476,026,548.29 | 425,650,952.21 |
| Payable Interest | 21,082,795.47 | 21,082,795.47 |
| Dividend Payable | 3,213,302.88 | 3,213,302.88 |
| 合 计 | 500,322,646.64 | 449,947,050.56 |
Appendix 14 Business Income and Business Cost
1.Business Income, Business Cost
| Program | Amount Incurred in the Current Period | Amount incurred in the last period | ||
| Income | Cost | Income | Cost | |
| Main Business | ||||
| Other Businesses | 151,218.30 | |||
| Total | 151,218.30 | |||
XVI. Supplementary materials(I) Statement of current non-recurring profits and losses
| Program | Amount | Description |
| Disposal profits and losses of Illiquid assets | 11,997,518.40 | |
| Government subsidies credited to current profits and losses (closely related to the business of the enterprise, except government subsidies enjoyed in accordance with the unified national standard or quota) | 186,866.85 | |
| In addition to the effective hedging business related to the company's normal business operations, the fair value changes and losses arising from the holding of trading financial assets and trading financial liabilities, as well as the investment gains obtained from the disposal of trading financial assets, trading financial liabilities and available for sale financial assets | 750,047.17 | |
| Income and expenditure other than those mentioned above | 1,327,699.79 | |
| Other profit and loss items that meet the definition of non-recurring profit and loss | 14,022.57 | |
| In total | 14,276,154.78 |
| Income tax impact | -3,381,157.42 | |
| Impact on minority shareholders' equity (after tax) | -578,566.54 | |
| Total | 10,316,430.82 |
(II) Income of equity and earnings per share
| Legal representative: Li Shaoling Financial Director: Guan Ying Director of Accounting Institutions: Liu Quanli |
Hainan Jingliang Holdings Co., Ltd.
August 17, 2019
| Profits of report period | Weighted average net assets Income rate (%) | Earnings per share | |
| Basic earnings per share | Diluted earnings per share | ||
| Net profit attributable to common shareholders of the company | 2.24 | 0.08 | 0.08 |
| Net profit attributable to common shareholders after deducting non-recurrent gains and losses | 1.79 | 0.06 | 0.06 |