China Hainan Rubber Industry Group Co.Ltd(601118)
Notes to financial statements of 2021
(unless otherwise specified, the monetary unit is RMB)
1、 Basic information of the company
China Hainan Rubber Industry Group Co.Ltd(601118) (hereinafter referred to as "the company" or "the group") was approved by the Ministry of agriculture's reply on the China Hainan Rubber Industry Group Co.Ltd(601118) establishment plan (Nongken letter [2005] No. 1) in principle and the Hainan Provincial Bureau of Agricultural Reclamation's China Hainan Rubber Industry Group Co.Ltd(601118) establishment plan, and the Hainan Provincial People's government's reply on agreeing to establish China Hainan Rubber Industry Group Co.Ltd(601118) was approved. The company is composed of Hainan Agricultural Reclamation Corporation (renamed as Hainan agricultural reclamation Group Co., Ltd. in September 2010, and merged into Hainan Agricultural Reclamation Investment Holding Group Co., Ltd. in December 2015, hereinafter referred to as "agricultural reclamation group"), Beijing rubber industry research and Design Institute, Zhonglian Rubber Co., Ltd., Guangdong Agricultural Reclamation Group Co., Ltd Hainan xingshida Industrial Co., Ltd. and Sinochem International Corporation(600500) (holding) Co., Ltd. were jointly initiated and established by six legal person enterprises. The current office address of the headquarters is located on the 4th floor of Fortune Plaza, No. 103 Binhai Avenue, Haikou City, Hainan Province.
The company and its subsidiaries (collectively referred to as "the group") are mainly engaged in natural rubber planting, processing, trade, rubber wood processing and sales, etc.
The financial report was approved and submitted at the 8th meeting of the 6th board of directors of the company on April 7, 2022. As of December 31, 2021, the group has 81 subsidiaries included in the consolidation scope. See note VIII, "equity in other entities" for details. The consolidation scope of the group this year increased by 1 over the previous year. See note VII, "change of consolidation scope" for details.
2、 Preparation basis of financial statements
The financial statements of the group are based on the assumption of going concern, according to the actual transactions and events, and in accordance with the accounting standards for business enterprises - Basic Standards (issued by order No. 33 of the Ministry of Finance and revised by order No. 76 of the Ministry of Finance), 41 specific accounting standards, application guidelines of accounting standards for business enterprises issued and revised on and after February 15, 2006 The interpretation of the accounting standards for business enterprises and other relevant provisions (hereinafter collectively referred to as the "accounting standards for business enterprises") and the preparation of the disclosure provisions of the rules for the preparation of information disclosure of companies offering securities to the public No. 15 - General Provisions on financial reports (revised in 2014) of the China Securities Regulatory Commission.
According to the relevant provisions of the accounting standards for business enterprises, the accounting of the group is based on the accrual basis. Except for some financial instruments, the financial statements are measured on the basis of historical cost. If an asset is impaired, the corresponding impairment provision shall be withdrawn in accordance with relevant regulations.
3、 Statement of compliance with accounting standards for business enterprises
The financial statements prepared by the company comply with the requirements of the accounting standards for business enterprises and truly and completely reflect the financial position of the company and the group as of December 31, 2021 and the operating results and cash flow of 2021. In addition, the financial statements of the company and the group comply in all material respects with the disclosure requirements of the financial statements and notes in the rules for the preparation of information disclosure of companies offering securities to the public No. 15 - General Provisions on financial reports revised by the China Securities Regulatory Commission in 2014.
4、 Significant accounting policies and accounting estimates
According to the actual production and operation characteristics and the provisions of relevant accounting standards for business enterprises, the group has formulated a number of specific accounting policies and accounting estimates for transactions and events such as revenue recognition. See the description of "revenue" in note IV, 31 for details. For the description of significant accounting judgments and estimates made by the management, please refer to note IV, 38, "significant accounting judgments and estimates".
1. Accounting period
The accounting period of the group is divided into annual period and interim period, which refers to the reporting period shorter than a complete accounting year. The accounting year of the group is the Gregorian calendar year, i.e. from January 1 to December 31. 2. Business cycle
The normal business cycle refers to the period from the purchase of assets for processing to the realization of cash or cash equivalents. The group takes 12 months as an operating cycle and takes it as the liquidity division standard of assets and liabilities.
3. Recording currency
RMB is the currency in the main economic environment in which the company and its domestic subsidiaries operate. The company and its domestic subsidiaries use RMB as the bookkeeping base currency. The overseas subsidiaries of the company determine US dollar as their bookkeeping base currency according to the currency in the main economic environment in which they operate. The currency used by the group in preparing the financial statements is RMB.
4. Accounting treatment methods for business combinations under the same control and not under the same control
Business combination refers to the transaction or event in which two or more separate enterprises are combined to form a reporting entity. Business combinations are divided into business combinations under the same control and business combinations not under the same control.
(1) Business combination under the same control
A business combination under the same control is a business combination in which the enterprises participating in the merger are ultimately controlled by the same party or the same parties before and after the merger, and the control is not temporary. For business combinations under the same control, the party that obtains control over other enterprises participating in the merger on the merger date is the merging party, and other enterprises participating in the merger are the merged party. The merger date refers to the date on which the combining party actually obtains control over the merged party.
The assets and liabilities acquired by the combining party shall be measured at the book value of the combined party on the combining date. The difference between the book value of the net assets obtained by the combining party and the book value of the merger consideration paid (or the total face value of the issued shares) shall be adjusted to the capital reserve (share capital premium); If the capital reserve (capital stock premium) is insufficient to offset, the retained earnings shall be adjusted. All direct expenses incurred by the combining party for business combination shall be included in the current profit and loss when incurred.
(2) Business combination not under the same control
A business combination not under the same control is a business combination in which the enterprises participating in the merger are not ultimately controlled by the same party or the same parties before and after the merger. For business combinations not under the same control, the party that obtains control over other enterprises participating in the merger on the acquisition date is the purchaser, and other enterprises participating in the merger are the acquiree. The date of purchase refers to the date on which the purchaser actually obtains control over the acquiree.
For business combination not under the same control, the combination cost includes the fair value of assets paid, liabilities incurred or assumed and equity securities issued by the acquirer to obtain the control over the acquiree on the acquisition date. The intermediary expenses such as audit, legal services, evaluation and consultation and other management expenses incurred for business combination are included in the current profit and loss when incurred. The transaction costs of equity securities or debt securities issued by the Purchaser as merger consideration shall be included in the initial recognition amount of equity securities or debt securities. The contingent consideration involved shall be included in the merger cost according to its fair value on the acquisition date. If there is new or further evidence of the existing situation on the acquisition date within 12 months after the acquisition date and the contingent consideration needs to be adjusted, the consolidated goodwill shall be adjusted accordingly.
The combination costs incurred by the acquirer and the identifiable net assets obtained in the combination shall be measured at the fair value on the acquisition date. The difference between the combination cost and the fair value of the identifiable net assets obtained by the acquiree on the acquisition date is recognized as goodwill. If the merger cost is less than the fair value of the identifiable net assets of the acquiree obtained in the merger, the fair value of the identifiable assets, liabilities and contingent liabilities of the acquiree obtained and the measurement of the merger cost shall be reviewed first. If the merger cost is still less than the fair value of the identifiable net assets of the acquiree obtained in the merger, the difference shall be included in the current profit and loss.
If the deductible temporary difference obtained by the purchaser from the acquiree is not recognized on the acquisition date because it does not meet the recognition conditions of deferred income tax assets, within 12 months after the acquisition date, if new or further information indicates that the relevant situation on the acquisition date already exists and the economic benefits brought by the deductible temporary difference of the acquiree on the acquisition date are expected to be realized, the relevant deferred income tax assets shall be recognized, At the same time, reduce the goodwill. If the goodwill is insufficient to offset, the difference shall be recognized as the current profit and loss; In addition to the above circumstances, the deferred income tax assets related to business combination shall be included in the current profits and losses.
For business combinations not under the same control realized step by step through multiple transactions, according to the notice of the Ministry of Finance on printing and distributing the interpretation of accounting standards for Business Enterprises No. 5 (CK [2012] No. 19) and the judgment standard of "package deal" in Article 51 of accounting standards for business Enterprises No. 33 - consolidated financial statements (see note IV, 5, "preparation method of consolidated financial statements" (2)), Judge whether the multiple transactions belong to "package deal". If it is a "package deal", accounting treatment shall be carried out in accordance with the relevant provisions of long-term equity investment; If it is not a "package deal", separate individual financial statements from consolidated financial statements for relevant accounting treatment:
In individual financial statements, the sum of the book value of the equity investment held by the acquiree before the acquisition date and the new investment cost on the acquisition date shall be regarded as the initial investment cost of the investment; If the equity of the acquiree held before the acquisition date involves other comprehensive income, the other comprehensive income related to the investment shall be accounted for on the same basis as the acquiree's direct disposal of relevant assets or liabilities.
In the consolidated financial statements, the equity of the acquiree held before the acquisition date is remeasured according to the fair value of the equity on the acquisition date, and the difference between the fair value and its book value is included in the current investment income; If the equity of the acquiree held before the acquisition date involves other comprehensive income, the relevant other comprehensive income shall be accounted for on the same basis as the acquiree's direct disposal of relevant assets or liabilities. 5. Preparation method of consolidated financial statements
(1) Principles for determining the scope of consolidated financial statements
The consolidation scope of the consolidated financial statements is determined on the basis of control. Control means that the group has the power to the investee, enjoys variable returns by participating in relevant activities of the investee, and has the ability to use the power to the investee to affect the amount of return. The scope of consolidation includes the company and all subsidiaries. Subsidiaries refer to the entities controlled by the group.
Once the relevant factors involved in the above control definition are changed due to the change of relevant facts and circumstances, the group will reassess.
(2) Preparation method of consolidated financial statements
From the date of obtaining the actual control over the net assets and production and operation decisions of the subsidiaries, the group began to incorporate them into the scope of consolidation; It shall cease to be included in the scope of consolidation from the date of loss of actual control. For the disposed subsidiaries, the operating results and cash flows before the disposal date have been properly included in the consolidated income statement and consolidated cash flow statement; For subsidiaries disposed of in the current period, the opening balance of the consolidated balance sheet shall not be adjusted. The operating results and cash flows of subsidiaries increased by business combination not under the same control after the purchase date have been properly included in the consolidated income statement and consolidated cash flow statement, and the opening amount and comparative amount of the consolidated financial statements will not be adjusted. The operating results and cash flows of subsidiaries increased by business combination under the same control from the beginning of the current period to the date of combination have been properly included in the consolidated income statement and the consolidated cash flow statement, and the comparative figures of the consolidated financial statements have been adjusted at the same time.
When preparing the consolidated financial statements, if the accounting policies or accounting periods adopted by the subsidiary are inconsistent with those adopted by the company, the financial statements of the subsidiary shall be adjusted as necessary according to the accounting policies and accounting periods of the company. For subsidiaries acquired through business combination not under the same control, their financial statements shall be adjusted based on the fair value of identifiable net assets on the acquisition date.
All significant transaction balances, transactions and unrealized profits within the group shall be offset during the preparation of the consolidated financial statements. The shareholders' equity and current net profit and loss of subsidiaries that are not owned by the company are separately listed as minority shareholders' equity and minority shareholders' profit and loss under shareholders' equity and net profit in the consolidated financial statements. The shares belonging to minority shareholders' equity in the current net profit and loss of subsidiaries are listed as "minority shareholders' profit and loss" under the net profit item in the consolidated income statement. If the loss of a subsidiary shared by minority shareholders exceeds the share of minority shareholders in the opening shareholders' equity of the subsidiary, the minority shareholders' equity is still offset.
When the control over the original subsidiary is lost due to the disposal of part of the equity investment or other reasons, the remaining equity shall be re measured according to its fair value on the date of loss of control. The difference between the sum of the consideration obtained from the disposal of equity and the fair value of the remaining equity minus the share of the net assets of the original subsidiary continuously calculated from the purchase date calculated according to the original shareholding ratio shall be included in the investment income of the current period when the control right is lost. Other comprehensive income related to the equity investment of the original subsidiary shall be accounted for on the same basis as the direct disposal of relevant assets or liabilities by the subsidiary when the control right is lost. Subsequently, the remaining equity of this part shall be subsequently measured in accordance with the relevant provisions of the accounting standards for Business Enterprises No. 2 - long term equity investment or the accounting standards for Business Enterprises No. 22 - recognition and measurement of financial instruments.
If the group disposes the equity investment in subsidiaries step by step through multiple transactions until it loses control, it is necessary to distinguish whether the transactions dealing with the equity investment in subsidiaries until it loses control belong to "package transactions". The terms, conditions and economic impact of various transactions for the disposal of equity investment in subsidiaries meet one or more of the following conditions, which usually indicates that multiple transactions should be accounted for as "package transactions": ① these transactions are concluded at the same time or considering the influence of each other; ② These transactions as a whole can achieve a complete business result; ③ The occurrence of one transaction depends on the occurrence of at least one other transaction; ④ A transaction is uneconomic alone, but it is economical when considered together with other transactions. If it is not a "package deal", each transaction shall be accounted for according to the applicable principles of "partial disposal of long-term equity investment in subsidiaries without losing control" and "loss of control over original subsidiaries due to disposal of partial equity investment or other reasons" (see the preceding paragraph for details). If all transactions from the disposal of equity investment in subsidiaries to the loss of control are "package transactions", all transactions shall be treated as a transaction for the disposal of subsidiaries and the loss of control; However, before the loss of control, the difference between each disposal price and the share of the subsidiary's net assets corresponding to the disposal of investment shall be recognized as other comprehensive income in the consolidated financial statements, and shall be transferred to the profit and loss of the current period when the control is lost.
6. Accounting classification and joint operation arrangement
Joint venture arrangement refers to an arrangement jointly controlled by two or more participants. The group's rights and obligations under the joint venture arrangement
