Kunming Chuanjinnuo Chemical Co., Ltd.
FY2025
Auditor's Report
Index Page
Auditor's Report 1-5
Financial Statements of the Company
- Consolidated Balance Sheet 1-2
- Balance Sheet of the Parent Company 3-4
- Consolidated Income Statement 5
- Income Statement of the Parent Company 6
- Consolidated Cash Flow Statement 7
- Cash Flow Statement of the Parent Company 8
- Consolidated Statement of Changes in Shareholders’ 9-10
Equity
- Parent Company's Statement of Changes in 11-12
Shareholders' Equity
- Notes to the Financial Statements 13-124
Kunming Chuanjinnuo Chemical Co., Ltd.
Notes to the financial statements
January 1st, 2025 - December 31st, 2025
(Unless indicated otherwise, all amounts are expressed in RMB)
I. Background of the Company
Kunming Chuanjinnuo Chemical Co., Ltd. (hereinafter referred to as “the Company”, or
collectively referred to as “the Group” when including subsidiaries) was established on June
Dongchuan District, Kunming, and its head office address on the 55th Floor, Office Building
#1 (Gemini-Dubhe), the First City of Colorful Yunnan, Wulong Street Office, Chenggong
District, Kunming, Yunnan Province. The A shares of RMB ordinary shares issued by the
Company have been listed on the Shenzhen Stock Exchange.
The Company, formerly known as Kunming Chuanjinnuo Chemical Company Limited, is
a limited liability company jointly established by Liu Meng, Liu Mingyi, Chen Zemin, and Wei
Jiagui. On June 2nd, 2005, it obtained the Business License for Enterprise Legal Person with
No. 5302002520475 issued by the Dongchuan District Administration for Industry and
Commerce of Kunming City, Yunnan Province. The original registered capital was RMB
In May 2007, the Company increased its registered capital (paid-in capital) by RMB
capital and paid-in capital were changed to RMB 10,000,000.00.
According to the resolution of the shareholders' meeting on November 12th, 2010 and
the amended Articles of Association of the Company, the Company increased its registered
capital (paid-in capital) by RMB 10,500,000.00, and the registered capital (paid-in capital)
after the change was RMB 20,500,000.00. The capital increase was registered with the
Administration for Industry and Commerce on November 19th, 2010.
According to the resolution of the shareholders' meeting on November 24th, 2010 and
the amended Articles of Association of the Company, the Company increased its registered
capital (paid-in capital) by RMB 269,500.00, and the registered capital (paid-in capital) after
the change was RMB 20,769,500.00. The capital increase was registered with the
Administration for Industry and Commerce on December 1st, 2010.
In July 2011, according to the “Promoter's Agreement on the Overall Conversion of
Kunming Chuanjinnuo Chemical Company Limited into a Joint Stock Company Limited by
Converting the Net Asset Value into Shares” signed by 30 shareholders, including Liu Meng
and Wei Jiagui, of Kunming Chuanjinnuo Chemical Company Limited and the Articles of
Association, and with the 30 shareholders as promoters, Kunming Chuanjinnuo Chemical
Company Limited as a whole was converted into a joint stock company by converting its
audited net assets of RMB 127,626,391.54 as of March 31st, 2011 into shares. After the
Kunming Chuanjinnuo Chemical Co., Ltd.
Notes to the financial statements
January 1st, 2025 - December 31st, 2025
(Unless indicated otherwise, all amounts are expressed in RMB)
conversion, the Company's registered capital (share capital) was RMB 65,000,000.00. The
conversion was registered with the Administration for Industry and Commerce on
September 15th, 2011.
According to the resolution of the shareholders' meeting of the Company on December
introduced Shenzhen Haotian Equity Investment Fund Management Co., Ltd. as an investor
to increase the capital of the Company, increasing the registered capital by RMB
Company was increased to RMB 70,010,000.00. The capital increase was registered with the
Administration for Industry and Commerce on December 28th, 2011.
According to the resolution of the 4th Extraordinary Shareholders' Meeting of 2012
held on September 22nd, 2012, the Reply of the China Securities Regulatory Commission on
Approving the Initial Public Offering of Shares by Kunming Chuanjinnuo Chemical Co., Ltd.
(CSRC License [2016] No. 92), and the Prospectus, the Company made an initial public
offering of 23,350,000 RMB ordinary shares with a nominal value of RMB 1 per share at an
issue price of RMB 10.25 per share, increasing the registered capital by RMB 23,350,000.00.
The registered capital (share capital) after the change was RMB 93,360,000.00. The capital
increase was registered with the Administration for Industry and Commerce on May 12th,
According to the resolution of the First Extraordinary Shareholders' Meeting of 2018 of
the Company, and the Reply of the China Securities Regulatory Commission on Approving
the Non-public Offering of Shares by Kunming Chuanjinnuo Chemical Co., Ltd. (CSRC License
[2019] No. 468), the Company made a non-public offering of 7,166,122.00 RMB ordinary
shares (A-shares) with a nominal value of RMB 1 per share at an issue price of RMB 21.49
per share, increasing the registered capital by RMB 7,166,122.00. The registered capital
(share capital) after the change was RMB 100,526,122.00. The capital increase was
registered with the Administration for Industry and Commerce on May 17th, 2019.
On March 20th, 2020, the Company held the 2019 annual general meeting and resolved
to transfer 3 shares for every 10 shares to all shareholders by capital reserve, totaling
Company was 130,683,958 shares. The transfer was registered with the Administration for
Industry and Commerce on July 24th, 2020.
As approved by the CSRC License [2020] No. 2260, the Company made a public offering
of 3,680,000 convertible corporate bonds on October 16th, 2020, with a nominal value of
RMB 100 each and a total issuance amount of RMB 368,000,000. The bonds were listed for
Kunming Chuanjinnuo Chemical Co., Ltd.
Notes to the financial statements
January 1st, 2025 - December 31st, 2025
(Unless indicated otherwise, all amounts are expressed in RMB)
trading on the Shenzhen Stock Exchange on November 5th, 2020, with the abbreviation of
“Jinnuo Convertible Bonds” and the bond code of “123069”, and the conversion period is
from April 22nd, 2021 to October 15th, 2026. From June to November 2021, the convertible
corporate bonds issued by the Company were converted into shares in three tranches,
totaling 19,110,108 shares. After the completion of the conversion, the total share capital of
the Company is 149,794,066 shares. The conversion was registered with the Administration
for Industry and Commerce on December 9th, 2021.
On April 20th, 2022, the Company held the 2021 annual general meeting and resolved to
transfer 5 shares for every 10 shares to all shareholders by capital reserve, totaling
Company was 224,691,099 shares. The transfer was registered with the Administration for
Industry and Commerce on June 16th, 2022.
As approved by the CSRC License [2023] No. 1055, the Company made a non-public
offering of 50,176,424 RMB ordinary shares (A shares) in July 2023, which was listed and
traded on the GEM Board of the Shenzhen Stock Exchange on July 28th, 2023. After this
non-public offering, the total share capital of the Company changed to RMB 274,867,523.00.
The change was registered with the Administration for Industry and Commerce on
September 22nd, 2023.
Registered capital of the Company: RMB 274,867,523.00;
Unified Social Credit Identifier: 91530100778560690W;
Legal representative: Liu Meng;
The controlling shareholder of the Company is Liu Meng, the largest shareholder.
The Company belongs to the chemical raw materials and chemical products
manufacturing industry, and is mainly engaged in the research and development, production
and sales of phosphorus chemical products, as well as the research and development,
production and sales of new energy material products. The Company's main products
include feed-grade dicalcium phosphate (type I, type III), feed-grade calcium dihydrogen
phosphate, calcium triple superphosphate, purified phosphoric acid, lithium iron phosphate
and so on.
The financial statements were approved by the Board of Directors of the Company on
March 18th, 2026.
Kunming Chuanjinnuo Chemical Co., Ltd.
Notes to the financial statements
January 1st, 2025 - December 31st, 2025
(Unless indicated otherwise, all amounts are expressed in RMB)
II. Basis for the preparation of financial statements
The financial statements of the Group have been prepared on the basis of transactions
and events that actually occurred, in accordance with the Accounting Standards for Business
Enterprises and its application guidelines, interpretations and other relevant regulations
(hereinafter collectively referred to as ASBE) issued by the Ministry of Finance and the
disclosure-related provisions of the Rules for the Preparation of Information Disclosure by
Companies Offering Their Securities to the Public No. 15 - General Provisions on Financial
Reporting (revised in 2023) issued by the China Securities Regulatory Commission (CSRC).
The Group has evaluated its ability to continue as a going concern for the twelve months
beginning December 31st, 2025, and no matters or circumstances have been identified that cast
significant doubt on its ability to continue as a going concern. The financial statements are
presented on a going concern basis.
III. Significant accounting policies and accounting estimates
Specific accounting policies and accounting estimates: The specific accounting policies
and accounting estimates formulated by the Group based on actual production and
operation characteristics include bad debt provision for receivables, provision for decline in
value of inventories, depreciation of fixed assets, amortisation of intangible assets,
conditions for capitalization of research and development expenses, recognition and
measurement of income, recognition and measurement of financial assets and liabilities,
recognition and measurement of long-term assets, etc.
The financial statements comply with the requirements of ASBE and give a true,
accurate and complete account of the financial position of the Company and the Group as at
December 31st, 2025 and of the results of their operations and their cash flows in the year
The accounting period of the Group is from January 1st to December 31st of the calendar
year.
The Company uses a 12-month period as its operating cycle and as a criterion for
classifying the liquidity of its assets and liabilities.
Kunming Chuanjinnuo Chemical Co., Ltd.
Notes to the financial statements
January 1st, 2025 - December 31st, 2025
(Unless indicated otherwise, all amounts are expressed in RMB)
The Company uses RMB as the functional currency.
The Group follows the principle of materiality in the preparation and disclosure of its
financial statements. The matters disclosed in the notes to the financial statements that
involve the judgment of materiality criteria and the methodology for determining materiality
criteria and basis for selection are set out below:
Location of disclosure
Disclosures involving the of this matter in the Methodology for determining materiality criteria and basis
judgment of materiality criteria notes to the financial for selection
statements
The significant amount of bad debt
V.4 The amount of bad debt provision recovered or reversed
provision recovered or reversed in
V.7 greater than RMB 500,000
the current year
Significant accounts receivable and
V.4
other receivables written off Write-off amount greater than RMB 500,000
V.7
during the year
Other receivables with individually
Individual balance sheet items exceeding RMB 500,000 and
significant amounts and separately V.7
involving specific credit risks
provided for bad debts
Changes in significant construction Current period's occurrence or closing balances greater than
V.11
in progress during the year RMB 1 million
Significant accounts payable with
V.20 Closing balance greater than RMB 500,000
an aging of over 1 year or overdue
Significant other payables with the
V.21 Closing balance greater than RMB 500,000
aging over 1 year
Significant contingencies/events XIII.2
Subject amount greater than RMB 1 million
after the balance sheet date XIV.2
common control
(1) Business combinations under common control
A business combination is a business combination under common control if the
enterprises participating in the combination are under the ultimate control of the same
party or parties before and after the combination and the control is not of a temporary
nature.
Assets and liabilities acquired by the Group as a consolidator in a business combination
under common control are measured at the book value of the consolidated party in the
consolidated statements of the ultimate controlling party at the date of consolidation. The
difference between the book value of the net assets acquired and the book value of the
Kunming Chuanjinnuo Chemical Co., Ltd.
Notes to the financial statements
January 1st, 2025 - December 31st, 2025
(Unless indicated otherwise, all amounts are expressed in RMB)
consideration paid for the merger is adjusted to capital reserves; if capital reserves are not
sufficient to offset the difference, retained earnings are adjusted.
(2) Business combinations not under common control
A business combination is not under common control if the parties involved in the
combination are not under the ultimate control of the same party or the same multiple
parties before and after the combination.
Identifiable assets, liabilities and contingent liabilities of the purchased party acquired
by the Group as the purchaser in a business combination not under common control are
measured at fair value at the date of acquisition. If the cost of merger is greater than the
share of the fair value of the identifiable net assets of the acquiree acquired in the merger,
the difference is recognized as goodwill; if the cost of merger is less than the share of the fair
value of the identifiable net assets of the acquiree acquired in the merger, the fair value of
each identifiable asset, liability and contingent liability acquired in the merger, and
consolidation costs are first reviewed, and if, after the review, the cost of merger is still less
than the share of the fair value of the identifiable net assets of the acquiree acquired in the
merger, the difference is recognized as non-operating income in the period of the merger.
The scope of consolidation of the Group's consolidated financial statements is
determined on the basis of control and includes the Company and all subsidiaries controlled
by the Company. The Group’s standard for judging control is that the Group have the power
over the invested party, enjoy variable returns through participating in related activities of
the invested party, and have the ability to use the power over the invested party to influence
its return amount.
In preparing the consolidated financial statements, if the accounting policies or
accounting periods adopted by a subsidiary and the Company are not consistent, the
necessary adjustments are made to the financial statements of the subsidiary in accordance
with the Company's accounting policies or accounting periods.
The effects on the consolidated financial statements of internal transactions between
the Company and its subsidiaries and between subsidiaries are eliminated on consolidation.
The shares of owners' equity of subsidiaries that are not attributable to the parent company
and the shares of net profit or loss, other comprehensive income and total comprehensive
income for the period that are attributable to non-controlling interests are presented in the
consolidated financial statements under “non-controlling interests, gains or losses on
non-controlling interests, other comprehensive income attributable to non-controlling
Kunming Chuanjinnuo Chemical Co., Ltd.
Notes to the financial statements
January 1st, 2025 - December 31st, 2025
(Unless indicated otherwise, all amounts are expressed in RMB)
interests and total comprehensive income attributable to non-controlling interests”,
respectively.
For subsidiaries acquired through business combinations under common control, their
operating results and cash flows are included in the consolidated financial statements from
the beginning of the period of consolidation. When preparing the comparative consolidated
financial statements, the relevant items in the prior year's financial statements are adjusted
as if the reporting entity formed by the merger had existed since the point at which control
by the ultimate controlling party began.
For a subsidiary acquired through a business combination not under common control,
the results of operations and cash flows are included in the consolidated financial
statements from the date the Group obtains control. In preparing the consolidated financial
statements, the financial statements of subsidiaries are adjusted on the basis of the fair
value of each identifiable asset, liability and contingent liability determined at the date of
purchase.
If the Group loses control over an investee due to, for example, the disposal of a
portion of an equity investment, the remaining equity interest shall be remeasured at its fair
value at the date of the loss of control in the preparation of the consolidated financial
statements. The difference between the sum of the consideration obtained from the
disposal of equity interest and the fair value of the remaining equity interest and the share
of the original subsidiary's net assets continuously calculated from the date of purchase or
the date of consolidation based on the original shareholding ratio, is included in investment
gains and losses in the period in which control is lost, and goodwill is also written down.
Other comprehensive income, etc. related to original equity investments in the subsidiary is
transferred to current investment gains and losses when control is lost.
operations
The Group's joint arrangements include joint operations and joint ventures. Joint
operations are joint venture arrangements in which the parties to the arrangement are
entitled to the assets and assumes the liabilities associated with the arrangements. A joint
venture refers to a joint arrangement which gives the joint venturers only the rights to the
net assets of the arrangement.
For jointly-operated projects, the Group recognizes assets held and liabilities assumed
individually and assets held and liabilities assumed on a share basis as a joint venture
partner in a jointly-operated project, and recognizes the related income and expenses
individually or on a share basis in accordance with the relevant agreements. If a transaction
Kunming Chuanjinnuo Chemical Co., Ltd.
Notes to the financial statements
January 1st, 2025 - December 31st, 2025
(Unless indicated otherwise, all amounts are expressed in RMB)
with a joint operation occurs for the purchase or sale of an asset that does not constitute a
business, only the portion of the gain or loss resulting from the transaction that is
attributable to the other participants in the joint operation is recognized.
Cash in the Group's cash flow statement represents cash on hand and deposits that are
readily available for disbursement. Cash equivalents in the cash flow statement represent
investments that are held for less than three months, are highly liquid, are readily
convertible to known amounts of cash, and are subject to an insignificant risk of changes in
value.
statements
(1) Foreign currency transactions
Upon initial recognition of a foreign currency transaction, the Group translates the
foreign currency amount into the amount in local currency of accounts using the spot
exchange rate on the date of the transaction. At the balance sheet date, foreign currency
monetary items are translated into the local currency using the spot exchange rate at the
balance sheet date, and the resulting translation differences are recognized directly in profit
or loss, except for the exchange differences arising from special loans in foreign currencies
for the purpose of purchasing, constructing or producing assets eligible for capitalization,
which are handled in accordance with the principle of capitalization; foreign currency
non-monetary items measured at historical cost are translated using the spot exchange rate
at the date of transaction, without changing the amount of their local currency; foreign
currency non-monetary items measured at fair value are translated using the spot exchange
rate on the date when the fair value is determined, and the difference between the
translated amount in the carrying amount in the local currency and the original amount in
the carrying amount in the local currency is treated as a change in fair value (including
exchange rate changes) and recognized in profit or loss for the current period; capital
received from investors in foreign currencies is translated using the spot exchange rate on
the date when the transaction occurs, and no foreign currency capital translation differences
arise between the capital contributions in foreign currencies and the carrying amounts of
the corresponding monetary items in the local currency.
(2) Translation of foreign currency financial statements
In preparing its consolidated financial statements, the Group translates the financial
statements of its overseas operations into Renminbi as follows: assets and liabilities in the
Kunming Chuanjinnuo Chemical Co., Ltd.
Notes to the financial statements
January 1st, 2025 - December 31st, 2025
(Unless indicated otherwise, all amounts are expressed in RMB)
foreign currency balance sheet are translated at the spot exchange rate prevailing on the
balance sheet date; equity items, with the exception of "Undistributed profit", are translated
at the spot exchange rate prevailing at the time the transaction occurred; and revenue and
expense items in the income statement are translated at the average exchange rate for the
period in which the transaction took place. The foreign currency translation differences
arising from the above conversion are presented under “Other comprehensive income”.
Foreign currency cash flows are converted using the average exchange rate for the period in
which the transaction took place. The effect of exchange rate fluctuations on cash is shown
separately in the cash flow statement.
(1) Recognition and derecognition of financial instruments
A financial asset or a financial liability is recognized when the Group becomes a party to
a financial instrument contract.
A financial asset (or part of a financial asset, or part of a group of similar financial assets)
is derecognized, i.e., the financial assets recognized before are transferred out from the
balance sheet, if the following conditions are met: 1) the right to receive cash flows from the
financial asset expires; 2) the right to receive cash flows from the financial asset is
transferred or the obligation under a "pass-through agreement" to pay the full amount of
cash flows received to a third party in a timely manner is assumed; and 3) Substantially all
the risks and rewards of ownership of the financial asset are transferred, or control over the
financial asset is relinquished although substantially all the risks and rewards of ownership of
the financial asset are neither transferred nor retained.
A financial liability is derecognized if the obligation for the financial liability has been
discharged, reversed or expired. If an existing financial liability is replaced by another
financial liability with substantially different terms by the same creditor, or if the terms of an
existing liability are substantially modified, such replacement or modification shall be
treated as derecognition of the original liability and recognition of a new liability, and the
difference shall be recognized in current profit or loss.
Financial assets traded on a regular basis are recognized and derecognized on the basis
of trade date accounting. Trade date refers to the date on which the Group commits to
buying or selling a financial asset.
(2) Classification and measurement of financial assets
The Group's financial assets are classified at initial recognition as financial assets
measured at amortized cost, financial assets at fair value through other comprehensive
Kunming Chuanjinnuo Chemical Co., Ltd.
Notes to the financial statements
January 1st, 2025 - December 31st, 2025
(Unless indicated otherwise, all amounts are expressed in RMB)
income, and financial assets at fair value through profit or loss, based on the Group's
business model for managing financial assets and the contractual cash flow characteristics of
the financial assets. All affected underlying financial assets are reclassified when, and only
when, the Group changes its business model for managing the financial assets.
In judging the business model, the Group considers, among other things, the manner in
which the business evaluates and reports the performance of the financial assets to key
management personnel, the risks affecting the performance of the financial assets and the
manner in which they are managed, and the manner in which the management of the
relevant business is compensated. In assessing whether the objective is to collect the
contractual cash flows, the Group analyzes the reasons, timing, frequency and value of sales
of financial assets prior to their maturity dates.
In determining the contractual cash flow characteristics, the Group determines whether
the contractual cash flows are only payments of principal and interest based on the
outstanding principal, (including when assessing the revisions to the time value of money,
whether there is a significant difference compared to the base cash flows/for financial assets
that include early repayment features, whether the fair value of the early repayment
characteristics is very small, etc.).
Financial assets are measured at fair value on initial recognition, except for accounts
receivable or notes receivable arising from the sale of goods or rendering of services, etc.
that do not contain significant financing components or do not take into account a financing
component that is not more than one year old, which are initially measured at the
transaction price.
For financial assets at fair value through profit or loss, the related transaction costs are
recognized directly in profit or loss; for other categories of financial assets, the related
transaction costs are included in the initial recognition amount.
The subsequent measurement of a financial asset depends on its classification:
Financial assets are classified as measured at amortized cost if they simultaneously
meet the following conditions: ① The business model for managing the financial assets is to
collect the contractual cash flows. ② The contractual terms of the financial asset provide
that the cash flows arising on a specific date are only payments of principal and interest
based on the outstanding principal amount. Interest income on such financial assets is
recognised using the effective interest method, and any gains or losses arising from the
derecognition, modification or impairment of such assets are recognised in profit or loss for
Kunming Chuanjinnuo Chemical Co., Ltd.
Notes to the financial statements
January 1st, 2025 - December 31st, 2025
(Unless indicated otherwise, all amounts are expressed in RMB)
the period. The Group's financial assets that fall into this category mainly include: cash and
cash equivalents, accounts receivable, notes receivable and other receivables, etc.
Financial assets are classified as financial assets at fair value through other
comprehensive income if they simultaneously meet the following conditions: ① The
Group’s business model for managing the financial assets is to both collect the contractual
cash flows and to sell the financial assets. ② The contractual terms of the financial asset
provide that the cash flows arising on a specific date are only payments of principal and
interest based on the outstanding principal amount. Interest income is recognized on such
financial assets using the effective interest method. Changes in fair value are recognized in
other comprehensive income, except for interest income, impairment losses and exchange
differences, which are recognized in current profit or loss. When a financial asset is
derecognized, the cumulative gains or losses previously recognized in other comprehensive
income shall be transferred from other comprehensive income to the current profit or loss.
The Group's financial assets that fall into this category mainly include: receivables financing.
Financial assets other than above-mentioned financial assets classified as measured at
amortized cost and financial assets classified or designated as financial assets measured at
fair value through other comprehensive income. The Group classifies this as financial assets
at fair value through profit or loss. Such financial assets are subsequently measured at fair
value, with all changes in fair value recognized in profit or loss except those relating to hedge
accounting. The Group's financial assets that fall into this category mainly include: financial
assets held for trading, and derivative financial assets.
(3) Classification, recognition basis and measurement of financial liabilities
The Group's financial liabilities are classified on initial recognition as follows: financial
liabilities at fair value through profit or loss, financial liabilities measured at amortized cost,
except for financial guarantee contracts issued, loan commitments to lend at below-market
interest rates, and financial liabilities arising from transfers of financial assets that do not
meet the conditions for derecognition or from the continuation of involvement in the
transferred financial assets. For financial liabilities at fair value through profit or loss, the
related transaction costs are recognized directly in profit or loss, and for Financial liabilities
measured at amortized cost, the related transaction costs are included in their initial
recognition amounts.
The subsequent measurement of a financial liability depends on its classification:
Kunming Chuanjinnuo Chemical Co., Ltd.
Notes to the financial statements
January 1st, 2025 - December 31st, 2025
(Unless indicated otherwise, all amounts are expressed in RMB)
Financial liabilities measured at amortized cost are subsequently measured at
amortized cost using the effective interest method.
Financial liabilities at fair value through profit or loss (including derivatives that are
financial liabilities) include financial liabilities held for trading and financial liabilities
designated on initial recognition as at fair value through profit or loss. Financial liabilities
held for trading (including derivatives that are financial liabilities) are subsequently
measured at fair value, with all changes in fair value recognized in profit or loss, except those
relating to hedge accounting. Financial liabilities designated as at fair value through profit or
loss are subsequently measured at fair value, with changes in fair value recognized in profit
or loss, except for changes in fair value attributable to changes in the Group's own credit risk,
which are recognized in other comprehensive income; if the recognition of changes in fair
value attributable to changes in the Group's own credit risk in other comprehensive income
would result in, or magnify, accounting mismatches in profit or loss, the Group recognizes all
changes in fair value (including the amount of the effect of changes in the Group's own
credit risk) in current profit or loss.
(4) Impairment of financial instruments
The Group impairs financial assets measured at amortized cost, debt investments at fair
value through other comprehensive income, contract assets, lease receivables, loan
commitments and financial guarantee contracts on the basis of expected credit losses and
recognizes a loss provision.
Expected credit loss is the weighted average of credit losses on financial instruments
weighted by the risk of default. Credit losses represent the difference between all
contractual cash flows receivable by the Group under the contract and all cash flows
expected to be collected, discounted at the original effective interest rate, which is the
present value of the entire cash shortfall.
Expected credit losses over the entire duration are expected credit losses due to all
possible events of default that could occur over the entire expected duration of the financial
instrument. Expected credit losses within the next 12 months are expected credit losses due
to events of default on a financial instrument that may occur within 12 months after the
balance sheet date (or the expected duration if the expected duration of the financial
Kunming Chuanjinnuo Chemical Co., Ltd.
Notes to the financial statements
January 1st, 2025 - December 31st, 2025
(Unless indicated otherwise, all amounts are expressed in RMB)
instrument is less than 12 months) and are a component of expected credit losses over the
entire duration.
For accounts receivable, notes receivable, receivables financing, contract assets, and
other receivables that do not contain a significant financing component, arising from
ordinary business activities such as the sale of goods and the provision of services, the Group
applies a simplified measurement method and measures the loss provision at an amount
equal to the expected credit loss over the entire life of the asset.
For lease receivables, receivables and contract assets with significant financing
components, the Group elects to apply a simplified measurement method and measures the
loss provision at an amount equal to the expected credit loss over the entire life of the asset.
The Group recognizes receivables amounting to RMB 500,000 or more and subject to
special credit risk as individually significant receivables. The Group performs separate
impairment tests for receivables that are individually significant.
For financial assets (e.g., debt investments, other debt investments, other receivables),
loan commitments and financial guarantee contracts other than those described above that
are measured using the simplified measurement method, the Group uses the general
method (three-stage method) to accrue for expected credit losses. The Group assesses at
each balance sheet date whether the credit risk has increased significantly since initial
recognition. If the credit risk has not increased significantly since initial recognition and is in
the first stage, the Group measures the provision for losses at an amount equal to the
expected credit losses over the next 12 months and calculates interest income based on the
book balance and the effective interest rate; if the credit risk has increased significantly since
initial recognition but no credit impairment has occurred, it is in the second stage, and the
Group measures the provision for losses at an amount equal to the expected credit losses
over the entire life of the asset and calculates interest income based on the book balance
and the effective interest rate; if credit impairment occurs after initial recognition, it is in the
third stage, and the Group measures the provision for losses at an amount equal to the
expected credit losses over the entire life of the asset and calculates interest income based
on the amortized cost and the effective interest rate.
For financial instruments with only low credit risk at the balance sheet date, the Group
assumes that the credit risk has not increased significantly since initial recognition. For
disclosure of the Group's criteria for determining significant increase in credit risk and the
definition of credit-impaired assets, please refer to Note X.1.
In assessing the impairment of financial instruments and contract assets using the
expected credit loss model, the Group extrapolates the expected changes in the credit risk of
Kunming Chuanjinnuo Chemical Co., Ltd.
Notes to the financial statements
January 1st, 2025 - December 31st, 2025
(Unless indicated otherwise, all amounts are expressed in RMB)
the debtors based on historical repayment data and taking into account factors such as
economic policies, macroeconomic indicators and industry risks. Different estimates may
affect the provision for impairment, and the impairment provision that has been made may
not equal the actual amount of future impairment losses.
portfolio of credit risk characteristics and the determination basis
The Group evaluates expected credit losses on financial instruments on an individual
and portfolio basis. When evaluating financial instruments on a portfolio basis, the Group
categorizes financial instruments into groups based on common credit risk characteristics.
The common credit risk characteristics used by the Group include: type of financial
instrument, credit risk rating, geographical location of the debtor, industry of the debtor,
overdue information, aging of receivables, etc.
① Portfolio categories and determination basis for accounts receivable (and contract
assets)
The Group groups accounts receivable (and contract assets) by similarity and relevance
of credit risk characteristics based on information such as aging, nature of payment,
exposure to credit risk, and history of repayment. For accounts receivable (and contract
assets), the Group determines that aging is the primary influence on its credit risk; therefore,
the Group evaluates its expected credit losses on the basis of aging portfolios. The Group
determines the aging based on the date of invoicing.
② Portfolio categories and determination basis for notes receivable
The Group classifies notes receivable into different portfolios based on the credit risk of
the obligor as common risk characteristics and determines the accounting estimation policy
for expected credit losses: a. for bank acceptance notes, the Group evaluates such accounts
to have a low credit risk and does not recognize expected credit losses; b. for commercial
acceptance notes, the provision for losses is recognized by referring to the expected loss rate
in accordance with the Group's accounts receivable policy, which is the same as the portfolio
classification of accounts receivable.
③ Portfolio categories and determination basis for other receivables
The Group's other receivables mainly consist of deposits receivable and guarantees,
employee imprests receivable, etc.
individual basis
Kunming Chuanjinnuo Chemical Co., Ltd.
Notes to the financial statements
January 1st, 2025 - December 31st, 2025
(Unless indicated otherwise, all amounts are expressed in RMB)
If the credit risk characteristics of a customer are significantly different from those of
other customers in the portfolio, or if there is a significant change in the credit risk
characteristics of the customer, for example, if the customer is in severe financial difficulty
and the expected credit loss rate on receivables from this customer has significantly
exceeded the expected credit loss rate for the aging and overdue ranges in which the
customer is located, etc., the Group makes an provision for losses on an individual basis for
amounts due from this customer.
When the Group reasonably expects that the contractual cash flows from a financial
asset will no longer be fully or partially recoverable, the Group writes down the book value
of the financial asset directly. If a financial asset that has been written down is subsequently
recovered, the reversal of the impairment loss is recognized in profit or loss in the period in
which it is recovered.
(5) Recognition basis and measurement for transfer of financial assets
For financial asset transfer transactions, if the Group has transferred substantially all
the risks and rewards of ownership of a financial asset to the transferee, the financial asset is
derecognized; if substantially all the risks and rewards of ownership of the financial asset are
retained, the financial asset is not derecognized; if substantially all the risks and rewards of
ownership of the financial asset are neither transferred nor retained, and if the control of
the financial asset has been relinquished, the financial asset is derecognized and the
resulting assets and liabilities are recognized; if the control over the financial asset has not
been relinquished, the financial asset is recognized to the extent of its continuing
involvement in the transferred financial asset, and a corresponding liability is recognized.
If a transfer of a financial asset as a whole satisfies the derecognition condition, the
difference between the book value of the transferred financial asset at the date of
derecognition and the sum of the consideration received for the transfer and the cumulative
amount of changes in fair value previously recognized directly in other comprehensive
income corresponding to the derecognized portion is recognized in profit or loss for the
current period (The financial asset involved in the transfer meets both the following
conditions: ① the Group's business model for managing the financial asset is aimed at both
collecting the contractual cash flows and selling the financial asset; and ② the contractual
terms of the financial asset provide that the cash flows arising on a specific date are solely
payments of principal and interest based on the outstanding principal amount.)
If a partial transfer of a financial asset satisfies the conditions for derecognition, the
book value of the financial asset transferred as a whole is apportioned between the
Kunming Chuanjinnuo Chemical Co., Ltd.
Notes to the financial statements
January 1st, 2025 - December 31st, 2025
(Unless indicated otherwise, all amounts are expressed in RMB)
derecognized portion and the unrecognized portion according to their respective relative fair
values. The difference between the apportioned overall book value of the aforementioned
financial asset and the sum of the consideration received for the transfer and the amount
corresponding to the derecognized portion of the accumulated changes in fair value
previously recognized in other comprehensive income that should be apportioned to the
derecognized portion is recognized in profit or loss for the current period (The financial asset
involved in the transfer meets both the following conditions: ① the Group's business model
for managing the financial asset is aimed at both collecting the contractual cash flows and
selling the financial asset; and ② the contractual terms of the financial asset provide that
the cash flows arising on a specific date are solely payments of principal and interest based
on the outstanding principal amount.)
If the continuing involvement is achieved by providing a financial guarantee over the
transferred financial asset, the asset resulting from the continuing involvement is recognized
at the lower of the book value of the financial asset and the amount of the financial
guarantee. The amount of the financial guarantee is the maximum amount of consideration
received that will be required to be repaid.
(6) Distinction between financial liabilities and equity instruments and related
treatment
The Group distinguishes financial liabilities from equity instruments in accordance with
the following principles: (1) If the Group cannot unconditionally avoid the performance of a
contractual obligation by delivering cash or other financial assets, that contractual obligation
meets the definition of a financial liability. Some financial instruments do not explicitly
contain terms and conditions for the obligation to deliver cash or other financial assets, but
may indirectly create contractual obligations through other terms and conditions. (2) If a
financial instrument is required to be settled with or may be settled with the Group's own
equity instruments, it is necessary to consider whether the Group's own equity instruments
used to settle the instrument are intended as a substitute for cash or other financial assets
or are intended to give the holder of the instrument a residual interest in the assets of the
issuer after deducting all liabilities. In the former case, the instrument is a financial liability of
the issuer; in the latter case, the instrument is an equity instrument of the issuer. In certain
circumstances, if a financial instrument contract stipulates that the Group must or may
settle the financial instrument with its own equity instrument, where the amount of the
contractual right or contractual obligation is equal to the quantity of its own equity
instrument available or to be delivered multiplied by its fair value at the time of settlement,
whether the amount of the contractual right or obligation is fixed or varies wholly or
partially based on changes in variables (e.g. interest rates, the price of a commodity or the
Kunming Chuanjinnuo Chemical Co., Ltd.
Notes to the financial statements
January 1st, 2025 - December 31st, 2025
(Unless indicated otherwise, all amounts are expressed in RMB)
price of a financial instrument) other than the market price of the Group's own equity
instrument, the contract is classified as a financial liability.
In classifying financial instruments (or their components) in the consolidated financial
statements, the Group considers all terms and conditions agreed between the members of
the Group and the holders of the financial instruments. An instrument should be classified as
a financial liability if the Group as a whole has an obligation to deliver cash, other financial
assets or settle in a manner that otherwise causes the instrument to become a financial
liability as a result of the instrument.
Based on the contractual terms of the preference shares and perpetual bonds issued
and the economic substance reflected therein, and by taking into account the definitions of
financial assets, financial liabilities, and equity instruments, the Group classifies these
financial instruments, or components thereof, as financial assets, financial liabilities or
equity instruments at initial recognition.
If financial instruments or their components are financial liabilities, the related interest,
dividends, gains or losses, and gains or losses arising from redemption or refinancing are
recognized in profit or loss for the current period.
If financial instruments or their components are equity instruments, the Group treats
them as a change in equity and does not recognize changes in the fair value of the equity
instruments upon their issuance (including refinancing), repurchase, sale or cancellation.
(7) Derivative financial instruments
The Group uses derivative financial instruments, such as foreign exchange forward
contracts, commodity forward contracts and interest rate swaps, to hedge exchange rate
risk, commodity price risk and interest rate risk, respectively. Derivative financial
instruments are initially measured at fair value at the date the derivative transaction
contract is entered into and subsequently measured at their fair value. Derivative financial
instruments with a positive fair value are recognized as an asset and those with a negative
fair value are recognized as a liability.
Gains or losses arising from changes in the fair value of derivatives are recognized
directly in profit or loss, except in relation to hedge accounting.
(8) Financial guarantee contracts
A financial guarantee contract is a contract under which the Group pays a specified
amount of money to the holder of the contract who suffers a loss if a specified debtor fails
to pay the debt when due in accordance with the terms of the debt instrument. Financial
guarantee contracts are measured at fair value on initial recognition, except for financial
Kunming Chuanjinnuo Chemical Co., Ltd.
Notes to the financial statements
January 1st, 2025 - December 31st, 2025
(Unless indicated otherwise, all amounts are expressed in RMB)
guarantee contracts for financial liabilities designated as at fair value through profit or loss,
which are subsequently measured at the higher of the amount of the provision for expected
credit losses determined at the balance sheet date and the amount initially recognized less
accumulated amortization in accordance with the principles of revenue recognition.
(9) Convertible bonds
The Group issues convertible bonds with terms that determine whether they contain
both liability and equity components.
If a convertible bond issued contains both a liability component and an equity
component, the liability and equity components are separated at initial recognition and
treated separately. Upon separation, the fair value of the liability component is determined
and used as its initially recognized amount, and then the initially recognized amount of the
equity component is determined on the basis of the issue price of the convertible bonds as a
whole less the amount initially recognized for the liability component. Transaction costs are
apportioned between the liability component and the equity component based on their
respective relative fair values. Liability components are presented as liabilities and are
subsequently measured at amortized cost until reversed, converted or redeemed. Equity
components are presented as equity and are not subsequently measured.
If a convertible bond issued contains only liability components and embedded
derivatives, i.e., if the share conversion right has the characteristics of an embedded
derivative, it is separated from the convertible bond as a whole and treated separately as a
derivative financial instrument, which is initially recognized at its fair value. The excess of the
issue price over the initial recognition of a derivative financial instrument is recognized as a
debt instrument. Transaction costs are allocated on a pro rata basis based on the issue price
allocated to debt instruments and derivative financial instruments at initial recognition.
Transaction costs related to debt instruments are recognized as liabilities and those related
to derivative financial instruments are recognized in profit or loss.
(10) Offsetting between financial assets and financial liabilities
The Group's financial assets and financial liabilities are presented separately in the
balance sheet and are not offset against each other. However, when the following
conditions are also met, the net amount after mutual offset is presented in the balance
sheet: 1) the Group has a legal right to offset the recognized amount and such legal right is
currently enforceable; and 2) the Group plans to settle on a net basis or to realize the
financial assets and settle the financial liabilities at the same time.
Kunming Chuanjinnuo Chemical Co., Ltd.
Notes to the financial statements
January 1st, 2025 - December 31st, 2025
(Unless indicated otherwise, all amounts are expressed in RMB)
The Group's inventory mainly consists of goods in transit, raw materials,
work-in-process, goods in stock, packaging, goods in transit, etc.
Inventories are initially measured at cost. The cost of inventories includes purchase cost,
processing cost and other costs. Inventories are maintained on a perpetual inventory basis;
the weighted-average method is used to determine the actual cost of inventories when they
are claimed or issued. Low-value consumables and packaging are amortized using the
one-time reversal method.
At the balance sheet date, inventories are measured at the lower of cost or net
realizable value. If the cost of inventories is higher than their net realizable value, a provision
for impairment of inventories is made and recognized in current profit or loss. Net realizable
value is the estimated selling price of inventories in the ordinary course of activities less
costs estimated to be incurred to completion, estimated selling expenses and related taxes.
The Group makes provision for decline in value of inventories for raw materials,
work-in-process, and goods in stock on the basis of individual inventory items. The net
realizable value of inventories of merchandise used directly for sale, such as goods in stock,
work-in-process, and materials held for sale, is determined as the estimated selling price of
such inventories less estimated selling expenses and related taxes; the net realizable value of
inventories of materials held for production is determined as the estimated selling price of
the finished goods produced less the estimated costs to be incurred until completion,
estimated selling expenses and related taxes.
(1) Contract assets
A contractual asset is a right to receive consideration for goods that the Group has
transferred to a customer, which is dependent on factors other than the passage of time. For
the method of determining and accounting for expected credit losses on contract assets,
please refer to the content related to financial asset impairment in Note III.11 above.
(2) Contract liabilities
Contract liabilities reflect the Group's obligation to transfer goods to customers for
consideration received or receivable from customers.
Contract assets and contract liabilities under the same contract are presented on a net
basis.
(1) Method of determining the amount of assets related to contract costs
Kunming Chuanjinnuo Chemical Co., Ltd.
Notes to the financial statements
January 1st, 2025 - December 31st, 2025
(Unless indicated otherwise, all amounts are expressed in RMB)
The Group's assets related to contract costs include contract performance costs and
contract acquisition costs. Depending on their liquidity, contract performance costs are
presented separately in inventories and other non-current assets, and contract acquisition
costs are presented separately in other current assets and other non-current assets.
Contract performance costs, i.e., costs incurred by the Group to perform a contract,
that do not fall within the scope of the relevant accounting standard specifications for
inventories, fixed assets or intangible assets, are recognized as an asset as contract
performance costs when the following conditions are also met: the costs are directly related
to a current contract or expected contract to be obtained, including direct labor, direct
materials, manufacturing costs (or similar costs), costs explicitly borne by the customer and
other costs incurred solely as a result of the contract; the costs increase the Group's future
resources available to meet its performance obligations; and the costs are expected to be
recovered.
Contract acquisition costs, which are the incremental costs incurred by the Group to
acquire a contract that are expected to be recovered, are recognized as an asset as contract
acquisition costs. If the amortization period of the asset does not exceed one year, the
Group has elected the simplified treatment of recognizing the asset in profit or loss when
incurred. Incremental costs, which are costs that would not have been incurred without
obtaining the contract (e.g., sales commissions, etc.). Expenses incurred by the Group to
obtain a contract other than incremental costs expected to be recovered (such as travel
expenses that would have been incurred regardless of whether the contract was obtained)
are charged to current profit or loss as incurred, except for those explicitly borne by the
customer.
(2) Amortization of assets related to contract costs
The Group's assets related to contract costs are amortized to current profit or loss using
the same basis as that used to recognize income from the goods to which the assets relate.
(3) Impairment of assets related to contract costs
If the book value of an asset related to the cost of a contract exceeds the difference
between: ① the remaining consideration that the enterprise expects to receive for the
transfer of goods related to the asset; and ② the estimated costs to be incurred for the
transfer of the related goods, an impairment provision is made for the excess, and the
excess is recognized as asset impairment loss. After making the provision for impairment, if
there is a change in the factors for impairment in previous periods, such that the two
aforementioned differences are higher than the book value of the asset, the original
provision for impairment is reversed and recognized in current profit or loss, but the book
Kunming Chuanjinnuo Chemical Co., Ltd.
Notes to the financial statements
January 1st, 2025 - December 31st, 2025
(Unless indicated otherwise, all amounts are expressed in RMB)
value of the reversed asset should not exceed the book value of the asset at the date of
reversal assuming no provision for impairment was made.
The Group's long-term equity investments include investments in subsidiaries,
investments in associates and equity investments in joint ventures.
(1) Judgment of significant influence and common control
The Group's equity investments in investees in which it has significant influence are
investments in associates. Significant influence means that the Group has the power to
participate in the decision-making of the investee's financial and operating policies, but does
not control, or jointly control with other parties, the formulation of those policies. The
Company is generally considered to have significant influence over an investee when it owns,
directly or indirectly through its subsidiaries, more than 20% but less than 50% of the
investee's voting right, unless there is clear evidence that the Group is unable to participate
in the decision-making of the investee's production and operation or to develop control over
the investee. When the Group holds less than 20% of the voting rights in an investee, the
Group is considered to have significant influence over the investee if the Group has a
representative on the board of directors or a similar authority of the investee/participates in
the process of formulating the investee's financial and operating policies/enters into
significant transactions with the investee/assigns management personnel to the
investee/provides the investee with key technological information, etc.
An equity investment in an investee in which the Group, together with other joint
ventures, exercises joint control over the investee and has rights to the net assets of the
investee is an investment in a joint venture. Joint control is the contractually agreed sharing
of control of an arrangement whose relevant activities can only be decided after the
unanimous consent of the parties sharing control. The Group bases its judgment of joint
control on the fact that all participants or a combination of participants collectively control
the arrangement and that the policies of the activities related to the arrangement must be
unanimously agreed by those participants who collectively control the arrangement.
(2) Accounting treatment
The Group initially measures long-term equity investments acquired at initial
investment cost.
Long-term equity investments acquired through a business combination under common
control shall use the share of the book value of the net assets of the combined party in the
consolidated statements of the ultimate controlling party as of the date of combination as
Kunming Chuanjinnuo Chemical Co., Ltd.
Notes to the financial statements
January 1st, 2025 - December 31st, 2025
(Unless indicated otherwise, all amounts are expressed in RMB)
the initial investment cost; if the book value of the net assets of the combined party as of
the date of combination is a negative amount, the initial investment cost is determined as
zero.
For long-term equity investments acquired through a business combination not under
common control, the cost of the combination is used as the initial investment cost. If a
business combination not under common control is acquired step by step through multiple
transactions and the transactions are not a package deal, the sum of the book value of the
equity investment originally held and the cost of the new investment is used as the initial
investment cost.
Except for long-term equity investments resulting from business combinations, for
long-term equity investments acquired by paying cash, the actual purchase price paid and
expenses directly related to the acquisition of the long-term equity investment, taxes and
other necessary expenditures are used as the initial investment cost; for long-term equity
investments acquired through the issuance of equity securities, the fair value of the equity
securities issued is used as the cost of investment; for long-term equity investments
acquired through debt restructuring in the form of settlement of debts by assets, the fair
value of the renounced debts and other costs such as taxes and fees directly attributable to
the investment are used as the initial cost of investment; and for long-term equity
investments acquired through the exchange of non-monetary assets, the fair value/carrying
value of the assets exchanged and related taxes is used as the initial investment cost.
The Company's investments in subsidiaries are accounted for in the individual financial
statements using the cost method. When the cost method of accounting is adopted,
long-term equity investments are carried at initial investment cost. When additional
investment is made, the book value of the long-term equity investment is increased by the
fair value of the cost of the additional investment and any related transaction costs incurred.
Cash dividends or profits declared by the investee are recognized as investment income at
the amount entitled.
The Group's investments in joint ventures and associates are accounted for using the
equity method. When the equity method is adopted, if the initial investment cost of a
long-term equity investment is greater than the share of the fair value of the identifiable net
assets of the investee unit at the time of investment, no adjustment is made to the book
value of the long-term equity investment; if the initial investment cost of a long-term equity
investment is less than the share of the fair value of the identifiable net assets of the
investee unit at the time of investment, the difference is adjusted to the book value of the
Kunming Chuanjinnuo Chemical Co., Ltd.
Notes to the financial statements
January 1st, 2025 - December 31st, 2025
(Unless indicated otherwise, all amounts are expressed in RMB)
long-term equity investment, and at the same time, recognized in current profit or loss when
the investment is acquired.
For long-term equity investments accounted for under the equity method of accounting
for subsequent measurement, the book value of the long-term equity investment is
increased or decreased accordingly with the changes in the owner's equity of the investee
during the period in which the investment is held. In particular, in recognizing the share of
net profit or loss of the investee, the portion attributable to the Group according to the
proportion that should be enjoyed is calculated based on the fair value of each identifiable
asset of the investee at the time the investment is acquired, in accordance with the Group's
accounting policies and accounting period, with the offsetting of unrealized gains and losses
on internal transactions arising from transactions with associates and joint ventures that do
not constitute operations (internal transaction losses that belong to asset impairment losses
are fully recognized), and the net profit of the investee is recognized after adjustment. The
Group recognizes a net loss incurred by an investee to the extent that the book value of the
long-term equity investment and other long-term equity interests that in substance
constitute a net investment in the investee are written down to zero, except to the extent
that the Group has an obligation to incur additional losses.
The Group's fixed assets are tangible assets with a useful life of more than one year that
are held for use in the production of goods, rendering of services, leasing or business
management.
Fixed assets are recognized when it is probable that the economic benefits associated
with them will flow to the Group and their cost can be measured reliably. The Group's fixed
assets include houses and buildings, machinery and equipment, transportation equipment,
electronic equipment and others.
The Group depreciates all fixed assets, except for those that are fully depreciated and
continue to be used and land that is separately recorded in the accounts. The provision for
depreciation is made using the straight-line method. The categorized depreciable lives,
estimated net residual value rates and depreciation rates of the Group's fixed assets are as
follows:
Depreciable life Estimated residual value Annual depreciation
No. Category
(years) rate (%) rate (%)
Kunming Chuanjinnuo Chemical Co., Ltd.
Notes to the financial statements
January 1st, 2025 - December 31st, 2025
(Unless indicated otherwise, all amounts are expressed in RMB)
Depreciable life Estimated residual value Annual depreciation
No. Category
(years) rate (%) rate (%)
The Group reviews the estimated useful lives, estimated net residual values and
depreciation methods of fixed assets at the end of each year, and treats any changes as
changes in accounting estimates.
The cost of construction in progress is determined on the basis of actual construction
expenditures, including all necessary construction expenditures incurred during the
construction period, borrowing costs to be capitalized before the project reaches the state
of intended use, and other related costs.
Construction in progress is carried forward to fixed assets at the estimated value from
the date it reaches the intended useable state, based on the project budget, cost or actual
cost of construction, etc. Depreciation starts from the following month, and the difference in
the original value of fixed assets is adjusted after the completion of the final accounting
procedures.
An item of construction in progress is transferred to fixed assets when it reaches its
intended useable condition according to the following criteria:
Item Criteria for transfer to fixed assets
Houses and The main construction works and ancillary works have been substantially completed, and the construction
buildings works have met the intended design requirements and passed acceptance.
(1) Production projects: the relevant equipment and supporting facilities have been installed; the equipment
can maintain normal and stable operation for a period of time after debugging; the production equipment can
Machinery and produce stable output of qualified products for a period of time; and the equipment has been accepted by the
equipment relevant departments and transferred to the production; (2) R&D projects: the relevant equipment and
supporting facilities have been installed; their physical properties meet the design requirements and the needs
of R&D use; and they are accepted by the relevant departments and handed over to the R&D department.
The Group capitalizes borrowing costs incurred that can be directly attributed to the
construction or production of assets qualified for capitalization, and includes them in the
cost of the related assets, while other borrowing costs are included in the current profit or
loss. Borrowing costs for assets eligible for capitalization, including fixed assets, investment
properties and inventories that require more than one year of acquisition, construction or
production activities to reach the condition for their intended use or sale, begin to be
capitalized when expenditures on the assets have been incurred, the borrowing costs have
been incurred and the acquisition, construction or production activities necessary to bring
the assets to the intended use or sale have commenced; capitalization ceases when the
Kunming Chuanjinnuo Chemical Co., Ltd.
Notes to the financial statements
January 1st, 2025 - December 31st, 2025
(Unless indicated otherwise, all amounts are expressed in RMB)
assets eligible for capitalization after acquisition, construction or production are available for
intended use or sale. Borrowing costs incurred subsequently are recognized in profit or loss.
If there is an unusual interruption in the acquisition, construction or production of an asset
eligible for capitalization and the interruption lasts for more than three consecutive months,
the capitalization of borrowing costs is suspended until the acquisition, construction or
production of the asset resumes.
For each accounting period within the capitalization period, the Group recognizes the
amount of borrowing costs capitalized in accordance with the following methods: for special
borrowings, the amount is determined on the basis of the actual interest expense incurred in
the current period, net of the amount of interest income earned on the unused borrowed
funds deposited in the bank or the amount of investment income earned on the temporary
investment made; if general borrowings are taken up, the amount is determined by
multiplying the weighted average of the cumulative asset expenditures in excess of the
portion of asset expenditures on special borrowings by the capitalization rate of the general
borrowings taken up, where the capitalization rate is determined by calculating the
weighted average interest rate of the general borrowings.
The Group's intangible assets, including land use rights and computer software, are
measured at actual cost at the time of acquisition. For intangible assets acquired, the actual
cost is determined by the actual price paid and related other expenses; for intangible assets
invested by investors, the actual cost is determined by the value agreed in the investment
contract or agreement, but if the agreed value in the contract or agreement is not fair, the
actual cost is determined by the fair value.
(1) Useful life and the basis for its determination, estimation, amortization method or
review procedure
Land use rights are amortized evenly over the years from the commencement date of
the grant; computer software is amortized evenly over the shortest of the estimated useful
life, the contractual beneficiary life and the effective life prescribed by law.
The amortization amount is charged to the cost of the related assets and current profit
or loss according to the beneficiaries. The estimated useful life and amortization method of
intangible assets with finite useful lives are reviewed at the end of each year, and any
changes are treated as changes in accounting estimates.
(2) The scope of research and development expenditures and related accounting
treatment
Kunming Chuanjinnuo Chemical Co., Ltd.
Notes to the financial statements
January 1st, 2025 - December 31st, 2025
(Unless indicated otherwise, all amounts are expressed in RMB)
The scope of pooling of the Group's research and development expenditures includes
employee benefits for research and development personnel, direct input costs, depreciation
and amortization expenses, design costs, costs of commissioning external research and
development, and other costs.
The Group categorizes its internal research and development project expenditures into
research-phase expenditures and development-phase expenditures based on the nature of
the expenditures and whether the ultimate formation of intangible assets from the research
and development activities is subject to a high degree of uncertainty. Research phase
expenses are recognized in profit or loss when incurred, and development phase expenses
are capitalized when all the following criteria are met: the Group assesses that it is
technically feasible to complete the intangible asset so that it can be used or sold; the Group
has the intention to complete the intangible asset and to use or sell it; the intangible asset is
expected to generate economic benefits for the Group; the Group has sufficient technical,
financial and other resources to complete the development of the intangible asset and has
the ability to use or sell it; and the expenses attributable to the development phase of the
intangible asset can be measured reliably. Expenses in the development phase that do not
meet the conditions for capitalization are recognized in profit or loss as incurred.
The Group examines long-term equity investments, fixed assets, construction in
progress, right-of-use assets, and intangible assets with finite useful lives at each balance
sheet date, and performs impairment tests when indicators of impairment exist.
(1) Impairment of non-current assets other than financial assets (except goodwill)
The Group determines the recoverable amount of an asset based on the higher of the
asset's fair value less costs of disposal and the present value of the asset's estimated future
cash flows when testing for impairment. After the impairment test, if the book value of the
asset exceeds its recoverable amount, the difference is recognized as an impairment loss.
The Group estimates the recoverable amount of an asset on an individual basis. If it is
difficult to estimate the recoverable amount of an individual asset, the recoverable amount
of the asset group is determined on the basis of the asset group to which the asset belongs.
An asset group is recognized on the basis of whether the major cash inflows from the group
are independent of those from other assets or groups of assets.
The net fair value less costs of disposal is determined by reference to the agreed sale
price or the observable market price of similar assets in an orderly transaction at the
measurement date, less incremental costs directly attributable to the disposal of the asset.
Kunming Chuanjinnuo Chemical Co., Ltd.
Notes to the financial statements
January 1st, 2025 - December 31st, 2025
(Unless indicated otherwise, all amounts are expressed in RMB)
When projecting the present value of future cash flows, management determines the
present value of future cash flows on the basis of the projected future cash flows to be
generated from the continued use of the asset and its eventual disposal, and selects an
appropriate discount rate.
Impairment losses on the above assets, once recognized, are not reversed in
subsequent accounting periods.
The Group's employee benefits include short-term employee benefits,
post-employment benefits and termination benefits.
Short-term employee benefits mainly include employees' salaries, bonuses, employee
welfare, social insurance premiums, housing provident fund, allowances and subsidies. The
actual short-term employee benefits incurred is recognized as a liability in the accounting
period in which the employees render services and is charged to current profit or loss or to
the cost of related assets, depending on the object of benefit.
Post-employment benefits mainly include basic endowment insurance and
unemployment insurance premiums, and are classified as defined contribution plans
according to the risks and obligations assumed by the Company. Contributions made to a
separate entity under a defined contribution plan in exchange for services rendered by
employees during the accounting period at the balance sheet date are recognized as a
liability and charged to current profit or loss or to the cost of related assets, depending on
the object of benefit.
Termination benefits are compensation given to employees to terminate their
employment relationship prior to the expiration of their employment contracts or to
encourage them to voluntarily accept layoffs. A liability arising from the compensation given
for the termination of the employment relationship with the employee is recognized in
profit or loss at the earlier of the date that the Company is unable to unilaterally withdraw
the plan for termination of the employment relationship or the proposal for the layoff, and
the date that the Company recognizes a cost related to the restructuring that involves the
payment of the termination benefits.
The Group recognizes a liability for operations related to pending litigation or
arbitration, guarantee-type quality guarantees and other contingencies if the following
conditions are met: the obligation is a present obligation assumed by the Group; it is
Kunming Chuanjinnuo Chemical Co., Ltd.
Notes to the financial statements
January 1st, 2025 - December 31st, 2025
(Unless indicated otherwise, all amounts are expressed in RMB)
probable that the performance of the obligation will result in an outflow of economic
benefits from the enterprise; and the amount of the obligation can be measured reliably.
A provision is initially measured at the best estimate of the expenditure required to
settle the related present obligation, taking into account the risks associated with the
contingency, uncertainties and the time value of money. The Group reviews the current best
estimate and adjusts the book value of the provisions at the balance sheet date.
Provisions expected to be settled within one year of the balance sheet date are
presented as current liabilities.
(1) General principles
The Group recognizes income when it has fulfilled its performance obligations under
the contract, that is, when the customer obtains control of the relevant goods or services.
Obtaining control of the relevant goods or services means being able to dominate the use of
the goods or the provision of the services and acquire almost total economic benefits from
them.
Performance obligations are contractual commitments where the Group transfers
clearly distinguishable goods to the customer. The Group’s performance obligation is fulfilled
within a certain period of time if it meets one of the following conditions; otherwise, a
performance obligation is fulfilled at a certain point in time: ① The customer obtains and
consumes the economic benefits arising from the Group's performance at the time of the
Group's performance; ② The customer is able to control the commodities under
construction in the course of the Group's performance; ③ The goods produced in the
course of the Group's performance are of irreplaceable use and the Group is entitled to
receive payment for the cumulative portion of performance completed to date throughout
the term of the contract.
For performance obligations performed at a point in time, the Group recognizes
revenue at the point in time when the customer obtains control of the relevant goods. In
determining whether the customer has acquired control of the goods, the Group considers
the following indications comprehensively: ① The Group has a current right to receive
payment in respect of the goods, i.e. the customer has a current payment obligation in
respect of the goods; ② The Group has transferred legal ownership of the goods to the
customer, i.e. the customer already has legal title to the goods; ③ The Group has physically
transferred the goods to the customer, i.e. the customer has taken physical possession of
the goods; ④ The Group has transferred the principal risks and rewards of ownership of the
Kunming Chuanjinnuo Chemical Co., Ltd.
Notes to the financial statements
January 1st, 2025 - December 31st, 2025
(Unless indicated otherwise, all amounts are expressed in RMB)
goods to the customer, i.e. the customer has acquired the principal risks and rewards in the
ownership of the goods; ⑤ The customer has accepted the goods; ⑥ Other signs that the
customer has taken control of the product.
The transaction price is the amount of consideration to which the Group is expected to
be entitled as a result of the transfer of goods or services to the customer, excluding
amounts collected on behalf of third parties and amounts expected to be refunded to the
customer.
(2) Specific methods
The Group's operating income mainly consists of income from the sale of goods.
①Income from the sale of goods
The Group is principally engaged in the production and sale of phosphorus chemical
products and the specific principles of income recognition are set out below:
Sales income is recognized when the Group delivers the goods to the customer, or
when the carrier has delivered the goods to the destination specified by the customer and
has delivered to the customer a certificate of the right of pick-up, and the Group has
obtained a present right to demand payment and it is probable that the consideration will be
recovered, i.e., when the customer obtains control of the relevant goods.
The Group recognises income from foreign sales when the goods are dispatched,
loaded onto a vessel at the port of shipment, and the customs declaration and bill of lading
have been obtained; furthermore, when the Group has established a present right to
payment and it is probable that the consideration will be received, i.e. when the customer
obtains control of the relevant goods.
Government grants are recognized when the conditions attached to them can be met
and they are receivable. Government grants are measured at the actual amount received if
they are monetary assets. For grants allocated according to a fixed flat rate, or when there is
conclusive evidence at year-end that the relevant conditions specified in the financial
support policy can be met and the financial support funds are expected to be received, the
grants are measured at the amount receivable. Government grants are measured at fair
value if they are non-monetary assets or at a nominal amount (RMB 1) if the fair value
cannot be reliably obtained.
Kunming Chuanjinnuo Chemical Co., Ltd.
Notes to the financial statements
January 1st, 2025 - December 31st, 2025
(Unless indicated otherwise, all amounts are expressed in RMB)
The Group's government grants include asset-related government grants and
income-related government grants. Asset-related government grants refer to those obtained
by the Group for the acquisition and construction or other formation of long-term assets;
income-related government grants refer to those other than asset-related government
grants. If the recipients of the grants are not specified in the government documents, the
Group will judge in accordance with the above principle of distinction, and if it is difficult to
distinguish, it will be classified as income-related government grants as a whole.
Asset-related government grants recognized as deferred income are charged to current
profit or loss in instalments over the useful lives of the related assets using the straight-line
depreciation method. If the related assets are sold, transferred, scrapped or destroyed
before the end of their useful lives, the unallocated balance of the related deferred income
shall be transferred to profit or loss for the period in which the assets are disposed of.
Income-related government grants used to compensate for related costs and expenses
or losses in subsequent periods are recognized as deferred income and charged to current
profit or loss in the period in which the related costs and expenses or losses are recognized.
Where such amounts are intended to compensate for related costs, expenses or losses that
have already been incurred, the amounts shall be recognised directly in profit or loss for the
current period. Government grants related to ordinary activities are recognized as other
income according to the substance of the economic operations. Government grants
unrelated to ordinary activities are recognized as non-operating income and expenses.
In the event that the Group obtains a policy preferential loan interest rate subsidy, the
Group distinguishes between two scenarios, i.e. the disbursement of the interest rate
subsidy funds by the finance department to the lending bank and the direct disbursement of
the interest rate subsidy funds by the finance department to the Group, and conducts its
accounting treatment in accordance with the following principles: (1) If the interest subsidies
are allocated to the lending bank and the lending bank provides a loan to the Group at a
policy-based preferential interest rate, the Group uses the actual amount received as the
recorded value of the borrowings and calculates the related borrowing costs based on the
principal amount of the borrowings and the policy-based preferential interest rate (or uses
the fair value of the borrowings as the recorded value of the borrowings and calculates the
borrowing costs based on the effective interest rate method, and the difference between
the actual amount received and the fair value of the borrowing is recognized as deferred
revenue. The deferred income is amortized over the life of the borrowing using the effective
interest rate method and is offset against related borrowing costs). (2) If the interest
subsidies are allocated directly to the Group, the Group offsets the interest subsidies against
the relevant borrowing costs.
Kunming Chuanjinnuo Chemical Co., Ltd.
Notes to the financial statements
January 1st, 2025 - December 31st, 2025
(Unless indicated otherwise, all amounts are expressed in RMB)
The Group's deferred tax assets and deferred tax liabilities are recognized on the basis
of (temporary differences) arising from differences between the tax bases of assets and
liabilities and their book values, as well as from differences between the tax bases of items
that are not recognized as assets and liabilities but whose tax bases can be determined in
accordance with the provisions of the tax law and their book values.
The Group recognizes deferred tax liabilities for all taxable temporary differences except:
(1) temporary differences arising from the initial recognition of goodwill or the initial
recognition of assets or liabilities arising from transactions other than business combinations
that affect neither the accounting profit nor taxable income (or deductible losses); and (2)
taxable temporary differences associated with investments in subsidiaries, associates, and
joint ventures, where the Group is able to control the timing of the reversal of the temporary
differences and it is probable that the temporary differences will not be reversed in the
foreseeable future.
The Group recognizes deferred tax assets for deductible temporary differences,
deductible losses and tax credits to the extent of possible future taxable income for
offsetting deductible temporary differences, deductible losses and tax credits, except for the
following situations: (1) temporary differences arise from the initial recognition of assets or
liabilities arising from transactions other than business combinations that affect neither
accounting profit nor taxable income (or deductible losses); and (2) deductible temporary
differences related to investments in subsidiaries, associates and joint ventures cannot meet
all the following conditions: temporary differences are likely to be reversed in the
foreseeable future, and it is probable to obtain taxable income in the future that can be used
to offset deductible temporary differences.
The Group recognizes deferred tax assets for all unused deductible losses to the extent
that it is probable that sufficient taxable income will be available to deduct deductible losses.
Uncertainty exists because the management applies considerable judgment in estimating the
timing and amount of future taxable income to be earned, and in determining the amount of
deferred tax assets to be recognized by taking into account of tax planning strategies.
At the balance sheet date, deferred tax assets and deferred tax liabilities are measured
at the tax rates that are expected to apply in the period in which the asset is recovered or the
liability is settled.
(1) Identification of the lease
Kunming Chuanjinnuo Chemical Co., Ltd.
Notes to the financial statements
January 1st, 2025 - December 31st, 2025
(Unless indicated otherwise, all amounts are expressed in RMB)
At the commencement date of contract, the Group assesses whether the contract is a
lease or contains a lease. A contract is a lease or contains one if one party to the contract
cedes the right to control the use of one or more identified assets for a certain period of time
in exchange for consideration.
If a contract contains several separate leases at the same time, the Group splits the
contract and accounts for each separate lease separately. If a contract contains both lease
and non-lease components, the Group splits the lease and non-lease components for
accounting purposes. Each lease component is accounted for separately in accordance with
leasing standards, and the non-lease component is accounted for in accordance with other
applicable enterprise accounting standards.
(2) The Group as the lessee
Except for short-term leases and leases of low-value assets, the Group recognizes
right-of-use assets and lease liabilities for leases on the lease term commencement date.
A right-of-use asset, which represents the right of the Group as lessee to use a leased
asset over the lease term, is initially measured at cost. The cost includes the following items:
① the initial measurement amount of the lease liability; ② the amount of lease payments
made on or before the commencement date of the lease term, less the amount related to
the lease incentives already enjoyed if lease incentives exist; ③ the initial direct costs
incurred, i.e., the incremental costs incurred to reach the lease; and ④ the costs expected
to be incurred to disassemble and remove the leased asset, restore the site where the leased
asset is located, or restore the leased asset to the condition agreed under the terms of the
lease, except for those incurred for the production of inventories. If the Group remeasures a
lease liability in accordance with the relevant provisions of the leasing standards, the book
value of the right-of-use asset is adjusted accordingly.
The Group depreciates right-of-use assets on a straight-line basis based on the manner
in which the economic benefits associated with the right-of-use assets are expected to be
consumed. If it is reasonably certain that ownership of the leased assets will be obtained at
the end of the lease term, depreciation is charged over the remaining useful life of the
leased assets; if it is not reasonably certain that ownership of the leased assets will be
obtained at the end of the lease term, depreciation is charged over the shorter of the lease
term and the remaining useful life of the leased assets. The amount of provision for
depreciation is charged to the cost of the related assets or to current profit or loss,
depending on the use of the right-of-use assets.
Kunming Chuanjinnuo Chemical Co., Ltd.
Notes to the financial statements
January 1st, 2025 - December 31st, 2025
(Unless indicated otherwise, all amounts are expressed in RMB)
The Group initially measures the lease liability at the present value of the lease
payments outstanding at the commencement date of the lease term. Lease payments
include: ① fixed payments and substantially fixed payments, net of amounts related to
lease incentives; ② variable lease payments that depend on indices or ratios; ③ the
exercise price of the purchase option in the event that the Group reasonably determines that
the purchase option will be exercised; ④ payments to be made upon exercise of the
termination option in the event that the lease term reflects that the Group will exercise its
termination option; and ⑤ payments expected to be due based on the residual value of the
guarantees provided by the Group.
In calculating the present value of lease payments, the Company adopts the interest
rate implicit in the lease as the discount rate; if the Group cannot determine the interest rate
implicit in the lease, the incremental borrowing rate is used as the discount rate. The Group
calculates interest expense on lease liabilities at a fixed periodic rate for each period of the
lease term and recognizes it in current profit or loss, except when it should be capitalized.
After the commencement date of the lease term, the Group increases the carrying
amount of the lease liability when it recognizes interest on the lease liability and decreases
the carrying amount of the lease liability when it makes lease payments. When there is a
change in the substantially fixed payments, a change in the amount expected to be payable
for the residual value of the guarantee, a change in the index or rate used to determine the
lease payments, a change in the appraisal of, or the actual exercise of, an option to purchase,
an option to renew or an option to terminate, the Group remeasures the lease liability based
on the present value of the lease payments as a result of the change.
The Group chooses not to recognize right-of-use assets and lease liabilities for
short-term leases with lease terms of less than 12 months and leases of low-value assets
where the individual leased assets are brand-new assets. The Group recognizes lease
payments for short-term leases and leases of low-value assets in the cost of the related
assets or in current profit or loss on a straight-line basis in each period of the lease term.
(3) The Group as the lessor
If a lease transfers substantially all the risks and rewards associated with the ownership
of the leased asset, the Group, as the lessor, classifies the lease as a finance lease and leases
other than this type as operating leases.
On the commencement date of the lease term, the Group recognizes finance lease
Kunming Chuanjinnuo Chemical Co., Ltd.
Notes to the financial statements
January 1st, 2025 - December 31st, 2025
(Unless indicated otherwise, all amounts are expressed in RMB)
receivables for finance leases and derecognizes the finance lease assets. When the Group
makes an initial measurement of finance lease receivables, the net lease investment is used
as the recorded value of the finance lease receivables.
The net lease investment is the sum of the unguaranteed residual value and the present
value of the lease payments not yet received at the commencement date of the lease term
discounted at the interest rate implicit in the lease. The Group calculates and recognizes
interest income for each period of the lease term based on a fixed periodic interest rate.
Variable lease payments acquired by the Group, which are not included in the net lease
investment measurement, are recognized in profit or loss for the current period in which
they are incurred.
The Group recognizes lease receipts from operating leases as rental income using the
straight-line method over the respective periods of the lease term.
The initial direct costs incurred by the Group in connection with operating leases are
capitalized to the cost of the underlying leased assets and recognized in current profit or loss
over the lease terms on the same recognition basis as rental income. Variable lease
payments acquired by the Group in connection with operating leases not included in the
lease receipts are recognized in current profit or loss when incurred.
If an operating lease changes, the Group accounts for it as a new lease from the
effective date of the change, and the amount of lease receipts received in advance or
receivable in connection with the lease before the change is considered to be the amount of
lease receipts for the new lease.
The Group classifies a non-current asset or disposal group as held-for-sale if its book
value is recovered principally through the sale (including the exchange of non-monetary
assets with commercial substance, as defined below) rather than through continued use.
The Group classifies non-current assets or disposal groups as held-for-sale if they meet
the following criteria: ① in accordance with the practice for the sale of such assets or
disposal groups in similar transactions, they can be sold immediately in their current
condition; and ② it is highly probable that the sale will occur, that is, a resolution has been
made for a plan of sale and firm purchase commitments have been obtained and the sale is
expected to be completed within one year. Relevant approvals are required if the relevant
regulations require the approval of the relevant authority or regulator before the sale can
take place. For non-current assets or disposal groups held by the Group (except for financial
Kunming Chuanjinnuo Chemical Co., Ltd.
Notes to the financial statements
January 1st, 2025 - December 31st, 2025
(Unless indicated otherwise, all amounts are expressed in RMB)
assets, deferred tax assets, investment properties at fair value through profit or loss and
assets arising from employee benefits) whose book value is higher than the fair value less
costs to sell, the book value is written down to the fair value less costs to sell, and the
amount of the write-down is recognized as an impairment loss on the asset, which is
recognized as profit or loss, and provision for impairment of assets held for sale is also made.
If the Group loses control over a subsidiary due to, for example, the sale of its
investment in the subsidiary, regardless of whether the Group retains part of its equity
investment after the sale, when the investment in the subsidiary to be sold meets the
conditions for classification as held-for-sale, the investment in the subsidiary as a whole is
classified as held-for-sale in the parent company's separate financial statements, and all
assets and liabilities of the subsidiary are classified as held-for-sale in the consolidated
financial statements. If the fair value less costs to sell of non-current assets held for sale at a
subsequent balance sheet date increases, the amount previously written down should be
restored and reversed within the amount of impairment loss on assets recognized after
classification as held-for-sale, and the reversal should be recognized in the current profit or
loss. Impairment losses on assets recognized before classification as held-for-sale are not
reversed.
No depreciation or amortization is provided for non-current assets held for sale or
non-current assets in disposal groups, and interest and other expenses continue to be
recognized for liabilities in disposal groups held for sale.
Upon derecognition of a non-current asset or disposal group held for sale, the
unrecognized gain or loss is recognized in the current profit or loss.
A discontinued operation is a component of the Group that meets one of the following
conditions and is capable of being separately distinguished, which has been disposed of or
classified as held for sale: (1) the component represents a separate major line of business or
geographical area of operations; (2) the component is part of an associated plan to dispose
of a separate major line of business or geographical area of operations; and (3) the
component is a subsidiary acquired exclusively with a view to resale.
In the income statement, the Group adds the items "Net profit from continuing
operations" and "Net profit from discontinued operations" under the item "Net profit" to
reflect the profit or loss from continuing operations and the profit or loss from discontinued
operations, respectively, on a net after-tax basis. The profit or loss related to the
discontinued operation should be presented as discontinued operation profit or loss, and it
should be presented for the entire reporting period, not only for the reporting period after it
Kunming Chuanjinnuo Chemical Co., Ltd.
Notes to the financial statements
January 1st, 2025 - December 31st, 2025
(Unless indicated otherwise, all amounts are expressed in RMB)
is recognized as a discontinued operation.
The Group measures derivative financial instruments at fair value at each balance sheet
date. Fair value is the price that a market participant would receive for selling an asset or pay
for transferring a liability in an orderly transaction occurring at the measurement date.
Assets and liabilities that are measured or disclosed at fair value in the financial
statements are identified within the fair value hierarchy based on the lowest level input that
is significant to the fair value measurement as a whole: Level 1 inputs are unadjusted quoted
prices in active markets for identical assets or liabilities that are available at the
measurement date; Level 2 inputs are inputs other than level 1 inputs that are directly or
indirectly observable for the related assets or liabilities; and Level 3 inputs are unobservable
inputs for the related assets or liabilities.
At each balance sheet date, the Group reassesses the assets and liabilities recognized in
the financial statements that are measured at fair value on a continuous basis to determine
whether a transition has occurred between the fair value measurement hierarchy.
For financial instruments traded in an active market, the Group determines their fair
value by using their quoted prices in an active market; for financial instruments not traded in
an active market, the Group determines their fair value by using valuation techniques, and
the valuation models used are mainly discounted cash flow models. The inputs to the
valuation techniques consist mainly of the risk-free rate, credit premium and liquidity
premium for debt instruments; and the valuation multiplier and liquidity discount for equity
instruments.
Level 3 fair values are determined based on the Group's valuation models, such as
discounted cash flow models. The Group also considers the initial transaction price, recent
transactions in identical or similar financial instruments, or full third-party transactions in
comparable financial instruments. At the balance sheet date, Level 3 financial assets
measured at fair value are valued using significant unobservable inputs such as discount
rates, but their fair values are not materially sensitive to reasonable changes in these
significant unobservable inputs.
(1) Hedging accounting:
In terms of hedge accounting methods, the Group primarily engages in cash flow
hedges.
Kunming Chuanjinnuo Chemical Co., Ltd.
Notes to the financial statements
January 1st, 2025 - December 31st, 2025
(Unless indicated otherwise, all amounts are expressed in RMB)
At the inception of a hedging relationship, the Group has the formal designation of the
hedging relationship and prepares formal written documentation of the hedging relationship,
risk management objectives, and risk management strategies. The documentation sets out
the hedging instrument, the hedged item, the nature of the risk being hedged and the
Group's approach to assessing hedge effectiveness. Hedge effectiveness is the extent to
which changes in the fair value or cash flows of the hedging instrument offset changes in the
fair value or cash flows of the hedged item arising from the hedged risk. Such hedges are
continually evaluated for hedge effectiveness at the initial designation date and in
subsequent periods.
The Group discontinues the application of hedge accounting if the hedging instrument
has expired, been sold, contractually terminated, or exercised (except that rollovers or
substitutions that are part of the hedging strategy are not treated as having expired or
contractually terminated), or if the hedging relationship no longer meets the risk
management objective due to a change in the risk management objective or the hedge no
longer meets other conditions of hedge accounting.
The Group rebalances a hedging relationship if the hedging relationship no longer
meets the hedge effectiveness requirements due to the hedge ratio, but the risk
management objective for which the hedging relationship was designated has not changed.
If the criteria for the hedge accounting method are met, the following method is
adopted for the accounting treatment:
① Cash flow hedge
The portion of the gain or loss on the hedging instrument that is attributable to the
effectiveness of the hedge is recognized directly in other comprehensive income, while the
portion that is attributable to the ineffectiveness of the hedge is recognized in current profit
or loss.
If the forecast transaction being hedged is subsequently recognized as a non-financial
asset or non-financial liability, or when the forecast transaction for a non-financial asset or
non-financial liability forms a firm commitment applicable to a fair value hedge, the amount
of cash flow hedge reserve initially recognized in other comprehensive income is reversed
out and included in the initial recognition amount of the asset or liability. The remaining cash
flow hedges are reversed out of the cash flow hedge reserve recognized in other
comprehensive income to current profit or loss in the same period in which the expected
cash flows to be hedged affect profit or loss, if a sale is expected to occur.
When the Group terminates the application of hedge accounting to a cash flow hedge, if
Kunming Chuanjinnuo Chemical Co., Ltd.
Notes to the financial statements
January 1st, 2025 - December 31st, 2025
(Unless indicated otherwise, all amounts are expressed in RMB)
the hedged future cash flows are still expected to occur, the amount previously included in
other comprehensive income shall not be reversed until the expected transaction occurs or a
firm commitment is fulfilled. If the hedged future cash flows are not expected to occur again,
the amount of the accumulated cash flow hedging reserve shall be reversed out of other
comprehensive income and included in the current profit or loss.
(1) Significant changes in accounting policies
There were no significant changes in the Group’s accounting policies during the
reporting period that require disclosure.
(2) Significant changes in accounting estimates
There were no significant changes in the Group’s accounting estimates during the
reporting period that require disclosure.
IV. Taxation
Tax category Basis for taxation Tax rate
Value-added tax (VAT) Value-added amount 13%/9%/6%
Urban maintenance and construction tax Turnover tax payable 7%/5%
Education surcharge Turnover tax payable 3%
Local education surcharge Turnover tax payable 2%
Descriptions of taxpayers with different corporate income tax rates:
Name of taxpayer Income tax rate
Kunming Chuanjinnuo Chemical Co., Ltd. 15%
Kunming Jingcui Engineering Technology Co., Ltd. (hereinafter referred to as “Kunming Jingcui”) 25%
Guangxi Chuanjinnuo Chemical Co., Ltd. (hereinafter referred to as “Guangxi Chuanjinnuo Chemical”) 9%
Kunming Heliwan Industrial Solid Waste Treatment Co., Ltd. (hereinafter referred to as “Kunming Heliwan”) 25%
Guangxi Chuanjinnuo New Energy Co., Ltd. (hereinafter referred to as “Guangxi Chuanjinnuo New Energy”) 25%
Yingkou Chuanxinnuo High Tech Co., Ltd. (hereinafter referred to as “Yingkou Chuanxinnuo”) 25%
Yunnan Xinshenghai International Trade Co., Ltd. 25%
Chuan Jin Nuo Hong Kong Co., Limited 8.25%/16.5%
Chuan Jin Nuo International Limited 8.25%/16.5%
Chuanjinno Egypt Chemical Co., Ltd. 22.5%
Chuanjinno Middle East International Holdings Limited 22.5%
Kunming Chuanjinnuo Chemical Co., Ltd.
Notes to the financial statements
January 1st, 2025 - December 31st, 2025
(Unless indicated otherwise, all amounts are expressed in RMB)
Administration on the Exemption of Value-added Tax for Feed Products (Cai Shui [2001] No.
product, feed-grade dicalcium phosphate, is exempted from value-added tax and are entitled
to the policy of exemption from value-added tax.
Dihydrogen Phosphate Products (Guo Shui Han [2007] No. 10 of the Ministry of Finance and
the State Taxation Administration), the Company's product, feed-grade calcium dihydrogen
phosphate, is exempted from value-added tax and are entitled to the policy of exemption
from value-added tax.
Council), the export goods of the Group are adjusted to a zero-tariff rate.
preferential tax conditions for Western Development. Therefore, they pay corporate income
tax at a preferential rate of 15%.
Region on Several Policies for Promoting High-level Opening-up and High-quality
Development of the Guangxi Beibu Gulf Economic Zone in the New Era (Gui Zheng Fa [2020]
No. 42 of the People's Government of Guangxi Zhuang Autonomous Region), Guangxi
Chuangjinnuo Chemical is a newly registered and established enterprise in the economic
zone and has been recognized as a high-tech enterprise or an enterprise meets the
conditions to enjoy the national western development corporate income tax preferential
policy. Therefore, it is exempt from the local portion of corporate income tax (6%) for 5 years,
starting from the tax year when it generates its first main operating income (i.e. From 2021).
Administration on the Additional Value-added Tax Credit Policy for Advanced Manufacturing
Enterprises (Announcement No. 43 [2023] of the Ministry of Finance and the State Taxation
Administration), the Company and its subsidiary, Guangxi Chuanjinnuo Chemical, are eligible
for the advanced manufacturing industry. Therefore, from January 1st, 2023 to December 31st,
to the current period’s deductible input VAT.
V. Notes to the principal items of the consolidated financial statements
Except for special notes, for the financial statement data disclosed below, “Opening”
Kunming Chuanjinnuo Chemical Co., Ltd.
Notes to the financial statements
January 1st, 2025 - December 31st, 2025
(Unless indicated otherwise, all amounts are expressed in RMB)
refers to January 1st, 2025, and “Closing” refers to December 31st, 2025. “Current year” refers
to the period from January 1st, 2025 to December 31st, 2025, and “Prior year” refers to the
period from January 1st, 2024 to December 31st, 2024. The currency unit is RMB.
Item Closing balance Opening balance
Cash on hand
Cash in bank 853,567,907.41 378,787,894.98
Other cash and cash equivalents 26,769,770.01 357,641,571.18
Deposits in finance companies
Total 880,337,677.42 736,429,466.16
Including: Total amount deposited abroad 92,148,242.90
Note: For details of the Company's cash in bank with restricted use, please refer to
“Note V. 16. Assets with restricted ownership or use”.
Item Closing balance Opening balance
Hedging instruments - forward foreign exchange contracts 4,329,785.08
Total 4,329,785.08
(1) Notes receivable presented by category
Item Closing balance Opening balance
Bank acceptance notes 129,417,984.60 115,148,915.93
Commercial acceptance notes
Total 129,417,984.60 115,148,915.93
(2) Presented by bad debt accrual method
Closing balance
Category Book balance Bad debt provision
Accrual ratio Book value
Amount Ratio (%) Amount
(%)
Bad debt provision on an individual basis
Bad debt provision by portfolio 129,417,984.60 100.00 129,417,984.60
Including: Bank acceptance notes 129,417,984.60 100.00 129,417,984.60
Total 129,417,984.60 100.00 129,417,984.60
(Continued)
Kunming Chuanjinnuo Chemical Co., Ltd.
Notes to the financial statements
January 1st, 2025 - December 31st, 2025
(Unless indicated otherwise, all amounts are expressed in RMB)
Opening balance
Category Book balance Bad debt provision
Accrual ratio Book value
Amount Ratio (%) Amount
(%)
Bad debt provision on an individual basis
Bad debt provision by portfolio 115,148,915.93 100.00 115,148,915.93
Including: Bank acceptance notes 115,148,915.93 100.00 115,148,915.93
Total 115,148,915.93 100.00 115,148,915.93
(3) Bad debt provision accrued, recovered or reversed for notes receivable
during the year
No bad debt provision for notes receivable was accrued, recovered or reversed during
the year.
(4) Notes receivable pledged at year-end
No pledged notes receivable at year-end.
(5) Notes receivable endorsed or discounted but not yet due at the balance
sheet date
Item Amount derecognized at year-end Amount not derecognized at year-end
Bank acceptance notes 117,411,304.07
Total 117,411,304.07
(6) Notes receivable actually written off during the year
No actual write-offs of notes receivable during the year.
(1) Accounts receivable by aging
Aging Closing book balance Opening book balance
Within 1 year (including 1 year) 121,353,997.01 144,491,865.32
Including: Within 6 months 121,353,997.01 144,017,461.17
More than 2 years 1,320,000.00 1,202,840.16
Total 122,877,719.97 147,064,705.48
(2) Accounts receivable presented according to the bad debt accrual method
Kunming Chuanjinnuo Chemical Co., Ltd.
Notes to the financial statements
January 1st, 2025 - December 31st, 2025
(Unless indicated otherwise, all amounts are expressed in RMB)
Closing balance
Book balance Bad debt provision
Category
Ratio Accrual ratio Book value
Amount Amount
(%) (%)
Bad debt provision on an individual basis
Bad debt provision by portfolio 122,877,719.97 2,635,401.45 2.14 120,242,318.52
Including: Aging portfolio 122,877,719.97 2,635,401.45 2.14 120,242,318.52
Total 122,877,719.97 100.00 2,635,401.45 2.14 120,242,318.52
(Continued)
Opening balance
Category Book balance Bad debt provision
Ratio Accrual ratio Book value
Amount Amount
(%) (%)
Bad debt provision on an individual basis
Bad debt provision by portfolio 147,064,705.48 100.00 3,375,455.19 2.30 143,689,250.29
Including: Aging portfolio 147,064,705.48 100.00 3,375,455.19 2.30 143,689,250.29
Total 147,064,705.48 100.00 3,375,455.19 2.30 143,689,250.29
Closing balance
Aging
Book balance Bad debt provision Accrual ratio (%)
Within 6 months 121,353,997.01 1,213,539.97 1.00
More than 2 years 1,320,000.00 1,320,000.00 100.00
Total 122,877,719.97 2,635,401.45 —
(3) Bad debt provision accrued, recovered or reversed for accounts receivable
during the year
Amount of change during the year
Opening Closing
Category Recovery or Charge-offs or
balance Accrual Others balance
reversal write-offs
Bad debt provision 3,375,455.19 3,013,826.98 2,568,696.57 1,185,184.15 2,635,401.45
Total 3,375,455.19 3,013,826.98 2,568,696.57 1,185,184.15 2,635,401.45
The amount of bad debt provision recovered or reversed in the current year is
significant among them:
Kunming Chuanjinnuo Chemical Co., Ltd.
Notes to the financial statements
January 1st, 2025 - December 31st, 2025
(Unless indicated otherwise, all amounts are expressed in RMB)
Amount Basis for determining the accrual
Recovery
Name of entity recovered or Reason for reversal ratio of original bad debt provision
method
reversed and its reasonableness
Midgulf International Ltd. 510,271.30 Amounts recovered Bank transfer Accrual based on the aging portfolio
Total 510,271.30 — — —
(4) Accounts receivable actually written off during the year
Item Write-off amount
Accounts receivable actually written off 1,185,184.15
There were no significant accounts receivable write-offs during the year.
(5) Accounts receivable and contract assets of the top five closing balances,
grouped by party in arrears
As a percentage of Closing balance of
Closing Closing Closing balance
the total closing bad debt provision
balance of balance of of accounts
Name of entity balance of accounts for accounts
accounts contract receivable and
receivable and receivable and
receivable assets contract assets
contract assets (%) contract assets
Yunnan Yuneng New
Energy Battery Materials 15,790,016.85 15,790,016.85 12.85 157,900.17
Co., Ltd.
Siam Java Trading Co., Ltd 13,837,872.69 13,837,872.69 11.26 138,378.73
Guangxi Shidai Xinneng
Lithium Battery Material 10,011,563.60 10,011,563.60 8.15 100,115.64
Technology Co., Ltd.
Chongqing Chuandong
Chemical (GROUP) Co., 7,456,624.88 7,456,624.88 6.07 74,566.25
Ltd.
NUTRECO NEDERLAND
B.V.
Total 52,802,219.52 52,802,219.52 42.97 528,022.21
Note: As of the reporting date, the above amounts have been fully recovered.
(1) Receivables financing presented by category
Item Closing balance Opening balance
Bank acceptance notes 90,300,965.46 73,237,761.38
Total 90,300,965.46 73,237,761.38
(2) Receivables financings presented according to the bad debt accrual method
Kunming Chuanjinnuo Chemical Co., Ltd.
Notes to the financial statements
January 1st, 2025 - December 31st, 2025
(Unless indicated otherwise, all amounts are expressed in RMB)
Closing balance
Category Book balance Bad debt provision
Book value
Amount Ratio (%) Amount Accrual ratio (%)
Bad debt provision on an individual basis
Bad debt provision by portfolio 90,300,965.46 100.00 90,300,965.46
Including: Accounts receivable with bad
debt provision based on the portfolio of 90,300,965.46 100.00 90,300,965.46
expected credit risks
Total 90,300,965.46 100.00 90,300,965.46
(Continued)
Opening balance
Category Book balance Bad debt provision
Book value
Amount Ratio (%) Amount Accrual ratio (%)
Bad debt provision on an individual basis
Bad debt provision by portfolio 73,237,761.38 100.00 73,237,761.38
Including: Accounts receivable with bad
debt provision based on the portfolio of 73,237,761.38 100.00 73,237,761.38
expected credit risks
Total 73,237,761.38 100.00 73,237,761.38
(3) Bad debt provision accrued, recovered or reversed for receivables financing
during the year
No bad debt provision was accrued, recovered or reversed for receivables financing
during the year.
(4) No pledged receivables financing at year-end
(5) Receivables financing endorsed or discounted but not yet due at the balance
sheet date
Item Amount derecognized at year-end Amount not derecognized at year-end
Bank acceptance notes 204,354,828.10
Total 204,354,828.10
(6) Receivables financing actually written off during the year
There were no receivables financing write-offs during the year.
(1) Aging of prepayments
Kunming Chuanjinnuo Chemical Co., Ltd.
Notes to the financial statements
January 1st, 2025 - December 31st, 2025
(Unless indicated otherwise, all amounts are expressed in RMB)
Closing balance Opening balance
Item
Amount Ratio (%) Amount Ratio (%)
Within 1 year 74,866,329.11 99.19 26,143,494.38 97.80
More than 3 years 488,552.84 0.65 59,546.24 0.22
Total 75,475,199.37 100.00 26,733,757.41 100.00
(2) Prepayments of the top five closing balances, grouped by prepaid objects
As a percentage of the total closing
Name of entity Closing balance
balance of prepayments (%)
Nanning Customs District P.R.China 8,805,910.71 11.67
Yunnan Chihong Zinc & Germanium Co., Ltd. 7,207,587.26 9.55
Guangxi Jinchuan Nonferrous Metals Co., Ltd. 5,178,841.78 6.86
MISR PHOSPHATE COMPANY 4,644,809.51 6.15
Petrochina Fuel Oil Company Limited Guangdong Sales Branch 4,568,713.60 6.05
Total 30,405,862.86 40.28
Item Closing balance Opening balance
Interest receivable
Dividends receivable
Other receivables 27,872,559.68 20,591,018.12
Total 27,872,559.68 20,591,018.12
(1) Other receivables by nature of payment
Nature of payment Closing book balance Opening book balance
Current payments 31,433,714.07 34,461,437.41
Guarantee and deposit 16,206,714.48 2,808,925.00
Advances 1,368,398.31 1,327,386.23
Equity transfer payments 1,000,000.00
Petty cash 275,638.11
Others 1,300.00 4,800.00
Total 49,010,126.86 39,878,186.75
(2) Other receivables by aging
Aging Closing book balance Opening book balance
Within 1 year (including 1 year) 15,909,087.79 3,098,524.34
Kunming Chuanjinnuo Chemical Co., Ltd.
Notes to the financial statements
January 1st, 2025 - December 31st, 2025
(Unless indicated otherwise, all amounts are expressed in RMB)
Aging Closing book balance Opening book balance
More than 5 years 16,700.00 739,123.41
Total 49,010,126.86 39,878,186.75
(3) Other receivables presented according to the bad debt accrual method
Closing balance
Category Book balance Bad debt provision
Book value
Amount Ratio (%) Amount Accrual ratio (%)
Bad debt provision on an individual
basis
Including: With individually significant
amounts and separate bad debt 18,297,500.00 37.33 17,297,500.00 94.53 1,000,000.00
provision
Bad debt provision by portfolio 30,712,626.86 62.67 3,840,067.18 12.50 26,872,559.68
Including: Aging portfolio 30,712,626.86 62.67 3,840,067.18 12.50 26,872,559.68
Total 49,010,126.86 100.00 21,137,567.18 27,872,559.68
(Continued)
Opening balance
Category Book balance Bad debt provision
Book value
Amount Ratio (%) Amount Accrual ratio (%)
Bad debt provision on an individual
basis
Including: With individually significant
amounts and separate bad debt 16,912,847.27 42.41 16,912,847.27 100.00
provision
With individually insignificant amounts
and separate bad debt provision
Bad debt provision by portfolio 22,816,749.34 57.22 2,225,731.22 9.75 20,591,018.12
Including: Aging portfolio 22,816,749.34 57.22 2,225,731.22 9.75 20,591,018.12
Total 39,878,186.75 100.00 19,287,168.63 20,591,018.12
Opening balance Closing balance
Name Bad debt Bad debt Accrual
Book balance Book balance Accrual reason
provision provision ratio (%)
Hubei Qianyuan New Not expected to
Materials Co., Ltd. be recovered
Kunming Xunhechuan Not expected to
Mining Co., Ltd. be recovered
Xiamen Xiangbo Expected to be
Technology Co., Ltd. partially recovered
Kunming Chuanjinnuo Chemical Co., Ltd.
Notes to the financial statements
January 1st, 2025 - December 31st, 2025
(Unless indicated otherwise, all amounts are expressed in RMB)
Opening balance Closing balance
Name Bad debt Bad debt Accrual
Book balance Book balance Accrual reason
provision provision ratio (%)
Not expected to
Sporadic customers 148,590.14 148,590.14
be recovered
Total 17,061,437.41 17,061,437.41 18,297,500.00 17,297,500.00 —
Closing balance
Aging
Book balance Bad debt provision Accrual ratio (%)
Within 1 year (including 1 year) 15,909,087.79 795,454.37 5.00
More than 5 years 16,700.00 16,700.00 100.00
Total 30,712,626.86 3,840,067.18 —
expected credit losses
Phase I Phase II Phase III
Bad debt provision Expected credit Expected credit losses Expected credit losses over Total
losses over the over the entire duration the entire duration (Credit
next 12 months (No credit impairment) impairment has occurred)
Balance as at January 1st,
Balance as at January 1st,
--Transferred to Phase II
--Transferred to Phase III -200,000.00 200,000.00
--Reversed to Phase II
--Reversed to Phase I
Current year accrual 2,118,499.43 800,000.00 2,918,499.43
Current year reversal 304,163.47 6,047.98 310,211.45
Current year charge-offs
Current year write-offs 757,889.43 757,889.43
Other changes
Balance as at December
Note: Significant changes in the book balance of other receivables resulting from
changes in the loss provisions for the current period
Kunming Chuanjinnuo Chemical Co., Ltd.
Notes to the financial statements
January 1st, 2025 - December 31st, 2025
(Unless indicated otherwise, all amounts are expressed in RMB)
Significant changes in the book balance of other receivables affecting the changes in
loss provisions this year include: an increase of RMB 9,131,940.11, which resulted in a 23%
increase in the book balance and a corresponding increase in lifetime expected credit losses.
(4) Bad debt provision accrued, recovered or reversed for other receivables
during the year
Amount of change during the year
Opening Closing
Category Recovery or Charge-offs or
balance Accrual Others balance
reversal write-offs
Bad debt provision 19,287,168.63 2,918,499.43 310,211.45 757,889.43 21,137,567.18
Total 19,287,168.63 2,918,499.43 310,211.45 757,889.43 21,137,567.18
(5) Other receivables actually written off during the year
Item Write-off amount
Other receivables actually written 757,889.43
Significant other accounts receivable write-offs among them:
Write-off Whether arising
Nature of Write-off
Name of entity Reason for write-off procedures from related
payment amount
performed transactions
Long-term Perform internal
Kunming Xunhechuan Current
Mining Co., Ltd. payments
cannot be recovered bad debt write-offs
Total — 609,299.29 — — —
(6) Other receivables of the top five closing balances, grouped by party in
arrears:
As a percentage of Closing
Nature of Closing the total closing balance of
Name of entity Aging
payment balance balance of other bad debt
receivables (%) provision
Hubei Qianyuan New Materials Co., Ltd. Current payments 16,297,500.00 2-3 years 33.25 16,297,500.00
Zhongke Lithium New Energy Co., Ltd. Current payments 13,136,214.07 2-3 years 26.80 2,627,242.81
ELSEWEDY FOR INDUSTRIAL Guarantee and Within 1
DEVELOPMENT deposit year
Within 1
Richesse Logistics (Fangcheng Port) Co., Guarantee and
Ltd. deposit
years
Xiamen Xiangbo Technology Co., Ltd. Current payments 2,000,000.00 2-3 years 4.08 1,000,000.00
Total 45,412,303.55 92.65 20,758,672.26
(1) Classification of inventories
Kunming Chuanjinnuo Chemical Co., Ltd.
Notes to the financial statements
January 1st, 2025 - December 31st, 2025
(Unless indicated otherwise, all amounts are expressed in RMB)
Closing balance
Item Provision for decline in value of inventories/Provision
Book balance Book value
for impairment of contract performance costs
Raw materials 266,023,512.81 2,898,402.19 263,125,110.62
Work-in-process 166,180,209.13 702,345.54 165,477,863.59
Goods in stock 391,750,296.27 15,739,321.12 376,010,975.15
Goods in transit 5,627,139.76 5,627,139.76
Contract performance costs 8,908,588.92 8,908,588.92
Packaging 5,081,972.54 5,081,972.54
Materials in transit 32,496,070.75 32,496,070.75
Total 876,067,790.18 19,340,068.85 856,727,721.33
(Continued)
Opening balance
Item Provision for decline in value of inventories/Provision
Book balance Book value
for impairment of contract performance costs
Raw materials 290,134,422.75 2,896,428.19
Work-in-process 173,649,904.29 702,345.54 172,947,558.75
Goods in stock 168,892,715.01 13,678,354.07 155,214,360.94
Goods in transit 12,041,426.52 12,041,426.52
Contract performance costs 4,114,968.56 4,114,968.56
Packaging 5,627,996.70 5,627,996.70
Materials in transit 41,009,372.11 41,009,372.11
Total 678,193,678.14
Kunming Chuanjinnuo Chemical Co., Ltd.
Notes to the financial statements
January 1st, 2025 - December 31st, 2025
(Unless indicated otherwise, all amounts are expressed in RMB)
(2) Provision for decline in value of inventories and provision for impairment of contract performance costs
Increase during the year Decrease during the year
Item Opening balance Closing balance
Accrual Others Reversal or charge-offs Others
Raw materials 2,896,428.19 1,974.00 2,898,402.19
Work-in-process 702,345.54 702,345.54
Goods in stock 13,678,354.07 2,060,967.05 15,739,321.12
Total 17,277,127.80 2,062,941.05 19,340,068.85
The basis of provision for the decline in value of inventories and recognition of net realizable value:
Item Basis of provision for decline in value Basis of recognition of net realizable value
The net realizable value of materials available for direct sale is determined by the estimated selling price of the inventory, less estimated selling
Cost of book value exceeds net
Raw materials expenses and related taxes. For materials requiring processing, the net realizable value is determined by the estimated selling price of the finished
realizable value
products, less costs to be incurred to completion, estimated selling expenses, and related taxes.
Cost of book value exceeds net Net realizable value is determined by the estimated selling price of finished goods produced, less costs to be incurred to completion, estimated selling
Work-in-process expenses and related taxes.
realizable value
Cost of book value exceeds net Net realizable value is determined by the estimated selling price of the inventory, less estimated selling expenses and related taxes.
Goods in stock
realizable value
(3) Description of closing balances of inventories containing amounts capitalized for borrowing costs
The closing balance of inventories does not contain amounts capitalized for borrowing costs.
Kunming Chuanjinnuo Chemical Co., Ltd.
Notes to the financial statements
January 1st, 2025 - December 31st, 2025
(Unless indicated otherwise, all amounts are expressed in RMB)
(4) Description of the amortization amount of contract performance costs for
the current year
The opening balance of contract performance costs was RMB 4,114,968.56, and the
current period's occurrence was RMB 178,443,887.26, which was amortized according to
product sales of RMB 173,650,266.90, leaving a closing balance of RMB 8,908,588.92.
Item Closing balance Opening balance
VAT input tax to be deducted 17,859,221.19 15,663,707.80
Amortization of low-value consumables 8,556,116.36 3,231,358.02
Prepaid income tax 104,799.98
Total 26,520,137.53 18,895,065.82
Item Closing balance Opening balance
Fixed assets 1,352,145,779.54 1,389,503,456.07
Liquidation of fixed assets
Total 1,352,145,779.54 1,389,503,456.07
Kunming Chuanjinnuo Chemical Co., Ltd.
Notes to the financial statements
January 1st, 2025 - December 31st, 2025
(Unless indicated otherwise, all amounts are expressed in RMB)
(1) Details of fixed assets
Electronic equipment and
Item Houses and buildings Machinery and equipment Transportation equipment Total
others
I. Original book value
(1) Purchase 5,999,994.89 6,581,392.30 1,495,460.65 14,076,847.84
(2) Transferred from construction in
progress
(1) Disposal or scrapping 1,450,084.94 751,071.71 6,307,508.22 8,508,664.87
II. Accumulated depreciation
(1) Accrual 48,828,241.65 85,208,320.19 4,153,810.49 2,137,368.20 140,327,740.53
(1) Disposal or scrapping 891,613.77 543,195.11 5,937,103.54 7,371,912.42
III. Impairment provision
Kunming Chuanjinnuo Chemical Co., Ltd.
Notes to the financial statements
January 1st, 2025 - December 31st, 2025
(Unless indicated otherwise, all amounts are expressed in RMB)
Electronic equipment and
Item Houses and buildings Machinery and equipment Transportation equipment Total
others
(1) Accrual
IV. Book value
Kunming Chuanjinnuo Chemical Co., Ltd.
Notes to the financial statements
January 1st, 2025 - December 31st, 2025
(Unless indicated otherwise, all amounts are expressed in RMB)
(2) Temporarily idle fixed assets
Original book Accumulated Impairment
Item Book value Remark
value depreciation provision
Houses and Idle, unused due to
buildings suspension of production
Machinery and Unused due to
equipment suspension of production
Transportation Unused due to
equipment suspension of production
Electronic
Unused due to
equipment and 54,395.96 10,637.52 43,758.44
suspension of production
others
Total 44,420,510.17 15,320,154.37 3,685,504.79 25,414,851.01
(3) Fixed assets without the title certificates
Item Book value Reasons for not obtaining title certificates
Phosphoric acid concentration plant 11,318,195.48 Completion accounts not yet finished
Sodium fluorosilicate main plant 7,632,589.49 Completion accounts not yet finished
Phase II Shift Building 4,603,950.64 Completion accounts not yet finished
Phase II Comprehensive Building 4,262,833.27 Completion accounts not yet finished
Phosphoric acid workshop comprehensive building 2,894,684.27 Completion accounts not yet finished
Boiler thermoelectric workshop comprehensive building 1,595,628.32 Completion accounts not yet finished
Total 35,827,713.97
Item Closing balance Opening balance
Construction in progress 197,565,349.04 182,720,961.41
Construction materials 8,308,953.09 4,093,733.85
Total 205,874,302.13 186,814,695.26
(1) Details of construction in progress
Closing balance
Item Impairment
Book balance Book value
provision
Material Precursor Material Iron Phosphate
Kunming Chuanjinnuo Chemical Co., Ltd.
Notes to the financial statements
January 1st, 2025 - December 31st, 2025
(Unless indicated otherwise, all amounts are expressed in RMB)
Closing balance
Item Impairment
Book balance Book value
provision
Environmental Protection Upgrade and Equipment Renewal Project
Reconstruction Project
Material Project
Comprehensive Utilization of Semi-Aqueous Phosphogypsum with
Annual Output of 300,000 Tons of Construction Gypsum Powder 3,987,508.82 3,987,508.82
Project
Semi-Aqueous Phosphogypsum to Cement Retarder Project 2,195,328.90 2,195,328.90
New Raw Material and Auxiliary Material Warehouse and
Food-Grade Purified Phosphoric Acid Warehouse
Other items 12,978,295.30 12,978,295.30
Total 197,565,349.04 197,565,349.04
(Continued)
Opening balance
Item Impairment
Book balance Book value
provision
Material Precursor Material Iron Phosphate
Environmental Protection Upgrade and Equipment Renewal Project
Reconstruction Project
Material Project
Comprehensive Utilization of Semi-Aqueous Phosphogypsum with
Annual Output of 300,000 Tons of Construction Gypsum Powder 3,942,225.80 3,942,225.80
Project
Semi-Aqueous Phosphogypsum to Cement Retarder Project 2,195,328.90 2,195,328.90
Phosphoric Acid Expansion and Reform 35,952,003.61 35,952,003.61
Other items 7,784,774.43 7,784,774.43
Total 182,720,961.41 182,720,961.41
(2) Changes in significant construction in progress during the year
Decrease during the year
Increase during
Project name Opening balance Transferred to Other Closing balance
the year
fixed assets decrease
Battery-grade Lithium Iron
Phosphate Anode Material 108,061,460.35 9,476,003.82 35,995,710.59 81,541,753.58
Precursor Material Iron
Phosphate
Kunming Chuanjinnuo Chemical Co., Ltd.
Notes to the financial statements
January 1st, 2025 - December 31st, 2025
(Unless indicated otherwise, all amounts are expressed in RMB)
Decrease during the year
Increase during
Project name Opening balance Transferred to Other Closing balance
the year
fixed assets decrease
Acid Plant Air Pollution
Control & Environmental
Protection Upgrade and
Equipment Renewal
Project
Phosphogypsum Harmless
Treatment Reconstruction
Project
Battery-grade Lithium Iron
Phosphate Anode Material
Project
New Raw Material and
Auxiliary Material
Warehouse and
Food-Grade Purified
Phosphoric Acid
Warehouse
Comprehensive Utilization
of Semi-Aqueous
Phosphogypsum with
Annual Output of 300,000
Tons of Construction
Gypsum Powder Project
Semi-Aqueous
Phosphogypsum to 2,195,328.90 2,195,328.90
Cement Retarder Project
Phosphoric Acid Expansion
and Reform
Total 174,936,186.98 90,445,591.61 80,794,724.85 184,587,053.74
(Continued)
Including:
Proportion
Budget Accumulated Capitalized Interest
of project Project
amount amount of amount of capitalization Capital
Project name investment progress
(RMB interest interest rate for the source
to the (%)
budget (%)
year
Battery-grade
Lithium Iron
Phosphate Anode 80,000.00 14.69 14.69 Self-financing
Material Precursor
Material Iron
Phosphate
Sulfuric Acid Plant 5,930.00 82.25 82.25 Self-financing
Air Pollution
Kunming Chuanjinnuo Chemical Co., Ltd.
Notes to the financial statements
January 1st, 2025 - December 31st, 2025
(Unless indicated otherwise, all amounts are expressed in RMB)
Including:
Proportion
Budget Accumulated Capitalized Interest
of project Project
amount amount of amount of capitalization Capital
Project name investment progress
(RMB interest interest rate for the source
to the (%)
budget (%)
year
Control &
Environmental
Protection Upgrade
and Equipment
Renewal Project
tons/year
Phosphogypsum
Harmless 3,944.50 69.73 69.73 Self-financing
Treatment
Reconstruction
Project
Battery-grade
Raising
Lithium Iron 130,086.51 1.19 1.19
funds, others
Phosphate Anode
Material Project
New Raw Material
and Auxiliary
Material
Warehouse and 1,235.00 41.51 41.51 Self-financing
Food-Grade
Purified Phosphoric
Acid Warehouse
Comprehensive
Utilization of
Semi-Aqueous
Phosphogypsum
with Annual Output 3,358.26 11.87 11.87 Self-financing
of 300,000 Tons of
Construction
Gypsum Powder
Project
Semi-Aqueous
Phosphogypsum to
Cement Retarder
Project
Phosphoric Acid
Expansion and 6,362.75 70.36 100.00 Self-financing
Reform
Total 229,412.52
Closing balance Opening balance
Item Impairment Impairment
Book balance Book value Book balance Book value
provision provision
Specialized equipment 1,947,776.25 1,947,776.25 947,368.89 947,368.89
Kunming Chuanjinnuo Chemical Co., Ltd.
Notes to the financial statements
January 1st, 2025 - December 31st, 2025
(Unless indicated otherwise, all amounts are expressed in RMB)
Closing balance Opening balance
Item Impairment Impairment
Book balance Book value Book balance Book value
provision provision
Specialized material 6,361,176.84 6,361,176.84 3,146,364.96 3,146,364.96
Total 8,308,953.09 8,308,953.09 4,093,733.85 4,093,733.85
(1) Details of intangible assets
Item Land use right Computer software Total
I. Original book value
(1) Purchase 24,115,737.60 44,247.79 24,159,985.39
II. Accumulated amortization
(1) Accrual 3,517,001.52 240,369.88 3,757,371.40
III. Impairment provision
IV. Book value
Note: There were no intangible assets created through internal research and
development at the end of the year.
(2) Land use rights without the certificate of ownership
Item Book value Reasons for not obtaining title certificates
Land use right 17,450,936.76 Waiting for new land-use rights certificates
(1) Details of right-of-use assets
Kunming Chuanjinnuo Chemical Co., Ltd.
Notes to the financial statements
January 1st, 2025 - December 31st, 2025
(Unless indicated otherwise, all amounts are expressed in RMB)
Item Houses and buildings Machinery and equipment Total
I. Original book value
II. Accumulated depreciation
(1) Accrual 33,688.56 5,254,425.78 5,288,114.34
III. Impairment provision
IV. Book value
(1) Deferred tax assets without offsetting
Closing balance Opening balance
Item Deductible temporary Deductible temporary Deferred tax
Deferred tax assets
difference difference assets
Deductible losses 27,312.97 6,145.42
Provision for asset impairment 7,036,602.48 1,055,593.67 6,175,629.51 765,537.15
Lease liabilities 12,344,068.99 1,851,610.35 527,267.73 79,090.16
Others 741,255.80 111,188.37
Total 20,149,240.24 3,024,537.81 6,702,897.24 844,627.31
(2) Deferred tax liabilities without offsetting
Closing balance Opening balance
Item Taxable temporary Deferred tax Taxable temporary Deferred tax
difference liabilities difference liabilities
One-time pre-tax deduction
for fixed assets
Right-of-use assets 12,272,022.73 1,840,803.41 533,401.27 80,010.18
Total 77,209,871.42 11,586,287.41 74,330,907.40 6,741,334.46
Kunming Chuanjinnuo Chemical Co., Ltd.
Notes to the financial statements
January 1st, 2025 - December 31st, 2025
(Unless indicated otherwise, all amounts are expressed in RMB)
(3) Details of unrecognized deferred tax assets
Item Closing balance Opening balance
Deductible losses 31,595,501.00 21,631,195.15
Deductible temporary difference 39,173,010.34 37,449,626.90
Total 70,768,511.34 59,080,822.05
(4) Deductible losses on unrecognized deferred income tax assets will expire in
the following years:
Year Closing balance Opening balance Notes
FY 2025 2,759,410.80
FY 2026 2,634,035.16 2,634,035.16
FY 2027 2,850,729.68 2,850,729.68
FY 2028 1,204,078.32 1,204,078.32
FY 2029 12,182,941.19 12,182,941.19
FY 2030 12,723,716.65
Total 31,595,501.00 21,631,195.15
Closing balance
Item
Book balance Impairment provision Book value
Egypt Project 226,033,985.27 226,033,985.27
Phosphogypsum Slag Yard Project 120,160,108.88 120,160,108.88
Iron Phosphate Anode Material Project
Others 23,030,476.92 23,030,476.92
Total 371,551,471.07 371,551,471.07
(Continued)
Opening balance
Item
Book balance Impairment provision Book value
Phosphogypsum Slag Yard Project 23,500,000.00 23,500,000.00
Iron Phosphate Anode Material Project
Others 25,632,307.09 25,632,307.09
Total 51,957,207.09 51,957,207.09
Kunming Chuanjinnuo Chemical Co., Ltd.
Notes to the financial statements
January 1st, 2025 - December 31st, 2025
(Unless indicated otherwise, all amounts are expressed in RMB)
Closing balance
Item
Book balance Book value Type of restriction Status of restrictions
Cash and cash Letter of credit deposit, guarantee frozen
equivalents for locking exchange rates, etc.
Endorsed or Bank acceptances notes endorsed or
Notes
receivable
yet due year-end
Intangible
assets
Total 222,168,389.74 210,470,292.39 — —
(Continued)
Opening balance
Item
Book balance Book value Type of restriction Status of restrictions
Time deposits, letter of credit
Cash and cash
equivalents
locking exchange rates, etc.
Bank acceptances notes endorsed
Endorsed or discounted
Notes receivable 80,577,966.22 80,577,966.22 or discounted but not yet
and not yet due
derecognized at year-end
Mortgaged for long-term
Intangible assets 77,987,315.66 67,848,964.62 Mortgaged
borrowings
Total 516,206,853.06 506,068,502.02 — —
(1) Classification of short-term borrowings
Category of borrowings Closing balance Opening balance
Guaranteed borrowings 415,200,000.00 310,000,000.00
Mortgage borrowings 1,500,0000.00
Credit borrowings 59,500,113.66 5,000,000.00
Pledge borrowings 47,303,755.64 25,507,297.04
Add: Accrued interest 453,580.53 229,701.38
Total 537,457,449.83 340,736,998.42
under which the credit period was 12 months, from April 26th, 2024 to April 25th, 2025, and
China Merchants Bank provided the enterprise with a credit line of RMB 50 million. The
Company borrowed RMB 50 million in 2025 from China Merchants Bank Co., Ltd. Kunming
Branch. As of December 31st, 2025, the outstanding principal amount of the loan was RMB
Kunming Chuanjinnuo Chemical Co., Ltd.
Notes to the financial statements
January 1st, 2025 - December 31st, 2025
(Unless indicated otherwise, all amounts are expressed in RMB)
the credit period was 10 months, from February 10th, 2025 to December 10th, 2025, and
CITIC Bank provided a credit line of RMB 70 million. The Company borrowed RMB 9.50
million in 2025 from China CITIC Bank Corporation Limited Kunming Branch. As of December
District Rural Credit Cooperative United Society, under which the credit period was 36
months, from December 9th, 2024 to December 8th, 2027, and Fangchenggang District Rural
Credit Cooperative United Society provided the enterprise with a revolving credit line of RMB
million in 2025 from Fangchenggang District Rural Credit Cooperative United Society, and
repaid RMB 50 million of the principal amount during the period. As of December 31st, 2025,
the outstanding principal amount of the loan was RMB 50 million.
Bank Co., Ltd. Nanning Minzhu Sub-branch, under which the credit period was 36 months,
from January 5th, 2025 to September 4th, 2025, and China Guangfa Bank Co., Ltd. Nanning
Minzhu Sub-branch provided the enterprise with a credit line of RMB 50 million guaranteed
by Kunming Chuanjinnuo. Guangxi Chuanjinnuo borrowed RMB 50 million in 2025 from
China Guangfa Bank Co., Ltd. Nanning Minzhu Sub-branch. As of December 31st, 2025, the
outstanding principal amount of the loan was RMB 50 million.
Bank Co., Ltd. Nanning Branch, under which the credit period was from May 8th, 2025 to May
credit line of RMB 240 million guaranteed by Kunming Chuanjinnuo. Guangxi Chuanjinnuo
borrowed RMB 50 million in 2025 from China Guangfa Bank Co., Ltd. Nanning Branch. As of
December 31st, 2025, the outstanding principal amount of the loan was RMB 50 million.
with Shanghai Pudong Development Bank Co., Ltd. Nanning Qingxiu Sub-branch, with a loan
amount of RMB 50 million, a loan period from April 14th, 2025 to April 14th, 2026, with
one-time repayment of the principal at maturity, and guaranteed by Kunming Chuanjinnuo.
As of December 31st, 2025, the outstanding principal amount of the loan was RMB 50
million.
Communications Nanning Guiya Sub-branch, under which the credit period was 1 month,
from September 19th, 2025 to October 19th, 2025, and the Bank of Communications Nanning
Kunming Chuanjinnuo Chemical Co., Ltd.
Notes to the financial statements
January 1st, 2025 - December 31st, 2025
(Unless indicated otherwise, all amounts are expressed in RMB)
Guiya Sub-branch provided the enterprise with a credit line of RMB 50 million guaranteed by
Kunming Chuanjinnuo. Guangxi Chuanjinnuo borrowed RMB 50 million in 2025 from the
Bank of Communications Nanning Guiya Sub-branch. As of December 31st, 2025, the
outstanding principal amount of the loan was RMB 50 million.
with Industrial Bank Co., Ltd. Qinzhou Sub-branch, with a loan amount of RMB 30 million, a
loan period from August 15th, 2025 to August 14th, 2026, with one-time repayment of the
principal at maturity, and guaranteed by Kunming Chuanjinnuo. As of December 31st, 2025,
the outstanding principal amount of the loan was RMB 30 million.
with Industrial Bank Co., Ltd. Qinzhou Sub-branch, with a loan amount of RMB 32 million, a
loan period from October 21st, 2025 to April 20th, 2026, and guaranteed by Kunming
Chuanjinnuo. As of December 31st, 2025, the outstanding principal amount of the loan was
RMB 32 million.
risk cooperation agreement with Fangchenggang Branch of China Construction Bank
Corporation and Tokyo Branch of China Construction Bank Corporation, under which Tokyo
Branch of China Construction Bank Corporation provided cross-border financing to Guangxi
Chuanjinnuo, with the principal amount of RMB 15 million, the financing term from October
maturity. The security is provided in the form of a third-party guarantee and a mortgage on
real property rights, with guarantees provided by Kunming Chuanjinnuo and Liu Meng.
Guangxi Chuanjinnuo mortgaged the land use right (Certificate No.: Gui (2020)
Fangchenggang City Real Estate Right No. 0015838). As of December 31st, 2025, the
outstanding principal amount of the loan was RMB 15 million.
contract with Guangxi Beibu Gulf Bank Co., Ltd. Fangchenggang Sub-branch, with a loan
amount of RMB 50 million, a loan period from December 8th, 2025 to August 8th, 2026, and
one-time repayment of the principal at maturity, and guaranteed by Kunming Chuanjinnuo.
As of December 31st, 2025, the outstanding principal amount of the loan was RMB 50
million.
credit from Industrial Bank Co., Ltd., with Guangxi Zhiyuan Industrial Co., Ltd. as the
beneficiary. The letter of credit expires on September 19th, 2026. As of December 31st, 2025,
the outstanding balance of the letter of credit was RMB 3.2 million.
Kunming Chuanjinnuo Chemical Co., Ltd.
Notes to the financial statements
January 1st, 2025 - December 31st, 2025
(Unless indicated otherwise, all amounts are expressed in RMB)
contract with Industrial Bank Co., Ltd. Qinzhou Sub-branch, with a loan amount of RMB 50
million, a loan period from December 12th, 2025 to November 12th, 2026, and guaranteed by
Kunming Chuanjinnuo. As of December 31st, 2025, the outstanding principal amount of the
loan was RMB 50 million.
non-6+9 bank acceptances notes, which were reclassified to short-term borrowings. As of
December 31st, 2025, the balance was RMB 47,303,755.64.
(2) Overdue short-term borrowings
The Company had no overdue short-term borrowings at year-end.
Item Closing balance Opening balance
Hedging instruments - forward foreign
exchange contracts
Total 1,050,954.68
Types of notes Closing balance Opening balance
Bank acceptance notes 5,000,000.00
Commercial acceptance notes
Total 5,000,000.00
There were no notes that were due and unpaid at year-end.
(1) Presentation of accounts payable
Item Closing balance Opening balance
Purchase of materials and equipment 122,252,596.78 108,139,663.73
Payment for construction work 69,395,895.79 47,555,392.56
Shipping fees 19,069,071.74 31,621,448.17
Electricity charges 7,649,273.97 6,283,218.59
Others 1,819,468.49 3,147,138.28
Total 220,186,306.77 196,746,861.33
(2) Significant accounts payable with an aging of over 1 year or overdue
Kunming Chuanjinnuo Chemical Co., Ltd.
Notes to the financial statements
January 1st, 2025 - December 31st, 2025
(Unless indicated otherwise, all amounts are expressed in RMB)
Reasons for non-reimbursement or
Name of entity Closing balance
carry-forward
Sichuan Zhensheng Qianli Construction Co., Ltd. 3,930,776.31 Non-settlement
Fangchenggang Minglonghui Concrete Co., Ltd. 2,470,738.08 Non-settlement
Fangchenggang Dongwan Transportation Commercial
Concrete Co., Ltd.
Guangxi Zhanbang New Materials Co., Ltd. 1,425,759.67 Non-settlement
Qinyang Zhongnan Anticorrosive Thermal Insulation Co.,
Ltd.
Shenzhen Sanding Lithium Technology Co., Ltd. 800,633.63 Non-settlement
Yunnan Jinti Fluorine-Plastic Anticorrosive Equipment
Technology Co., Ltd.
Shifang Jiangnan Glass Fiber Reinforced Plastic Co., Ltd. 668,664.16 Non-settlement
Yunnan Pengfeng Anti-Corrosion and Thermal Insulation
Engineering Co., Ltd.
Sichuan Chengwang Construction Engineering Co., Ltd. 514,008.05 Non-settlement
Total 13,437,413.63
(3) Whether there exist any overdue payments owed to small and medium-sized
enterprises
No.
Item Closing balance Opening balance
Interest payable
Dividends payable
Other payables 8,115,034.25 6,419,936.17
Total 8,115,034.25 6,419,936.17
(1) Presentation of other accounts payable by nature of payment
Nature of payment Closing balance Opening balance
Performance bonds 2,946,450.00 1,815,700.00
Current payments 848,000.00 848,000.00
Advances 797,453.46 789,674.45
Funds from interest-free loans for
government-supported projects
Others 3,123,130.79 2,566,561.72
Total 8,115,034.25 6,419,936.17
(2) Significant other payables with the aging over 1 year
Kunming Chuanjinnuo Chemical Co., Ltd.
Notes to the financial statements
January 1st, 2025 - December 31st, 2025
(Unless indicated otherwise, all amounts are expressed in RMB)
Name of entity Closing balance Reasons for non-reimbursement
Kunming Guandu District Rongxing Electromechanical Department 506,650.00 Non-settlement
Guangxi Qilin Trading Co., Ltd. 500,000.00 Non-settlement
Guangxi Hengmeida Trading Co., Ltd. 500,000.00 Non-settlement
A natural person with the surname Zhang 848,000.00 Non-settlement
Total 2,354,650.00
(1) Presentation of advances from customers
Category Closing balance Opening balance
Advance receipt of goods 74,505.00 96,443.78
Total 74,505.00 96,443.78
There were no significant advances from customers aging over 1 year or overdue.
(1) Details of contract Liabilities
Item Closing balance Opening balance
Advance receipt of goods 37,031,414.06 32,084,741.04
Total 37,031,414.06 32,084,741.04
(2) The Company had no significant contractual liabilities aged more than one
year.
(3) Significant changes in book value during the year
Item Amount of change Reason for change
Income from advance receipts
Advance receipt of goods 4,946,673.02
not yet carried forward
Total 4,946,673.02 —
(1) Classification of employee benefits payable
Increase during Decrease during
Item Opening balance Closing balance
the year the year
Short-term employee benefits 29,653,787.54 234,267,900.12 229,129,193.57 34,792,494.09
Post-employment benefit - defined
contribution plans
Termination benefits 772,034.14 772,034.14
Total 29,653,787.54 251,834,019.48 246,695,312.93 34,792,494.09
Kunming Chuanjinnuo Chemical Co., Ltd.
Notes to the financial statements
January 1st, 2025 - December 31st, 2025
(Unless indicated otherwise, all amounts are expressed in RMB)
(2) Short-term employee benefits
Opening Increase during Decrease during the Closing
Item
balance the year year balance
Wages, bonuses, allowances and subsidies 28,695,105.45 200,221,341.40 195,155,579.69 33,760,867.16
Employee welfare expense 413,759.41 13,743,743.32 13,704,854.02 452,648.71
Social insurance premiums 10,826,617.97 10,826,617.97
Including: Medical insurance premiums 9,718,844.24 9,718,844.24
Work injury insurance premiums 1,102,527.53 1,102,527.53
Maternity insurance premiums 5,246.20 5,246.20
Housing provident fund 5,125,112.00 5,125,112.00
Labor union funds and staff education funds 544,922.68 4,351,085.43 4,317,029.89 578,978.22
Total 29,653,787.54 234,267,900.12 229,129,193.57 34,792,494.09
(3) Defined contribution plans
Increase during the Decrease during
Item Opening balance Closing balance
year the year
Basic endowment insurance 16,179,413.20 16,179,413.20
Unemployment insurance premiums 614,672.02 614,672.02
Total 16,794,085.22 16,794,085.22
Item Closing balance Opening balance
Corporate income tax 27,048,416.22 6,772,411.67
Value-added tax (VAT) 9,426,467.91 3,406,919.06
Property tax 874,777.38 790,274.23
Individual income tax 500,223.06 711,790.41
Stamp duty 728,935.67 554,700.00
Land use tax 509,030.63 393,463.49
Urban maintenance and construction tax 638,119.21 95,061.71
Education surcharge 273,479.69 56,567.74
Environmental protection tax 47,483.56 53,370.49
Local education surcharge 182,319.81 37,711.83
Water resources tax 44,198.00
Renewable energy development fund 126,444.39
National major water conservancy
construction fund
Others 97.56
Total 40,407,479.93 12,872,270.63
Kunming Chuanjinnuo Chemical Co., Ltd.
Notes to the financial statements
January 1st, 2025 - December 31st, 2025
(Unless indicated otherwise, all amounts are expressed in RMB)
Item Closing balance Opening balance
Long-term loans due within one year 120,263,000.00 227,500,000.00
Lease liabilities due within one year 9,518,208.08 25,482.00
Long-term payables due within one year 87,829,390.07
Add: Interest payable due within one year 115,781.89 214,675.71
Total 217,726,380.04 227,740,157.71
(1) Classification of other current liabilities
Item Closing balance Opening balance
Endorsed bank acceptance notes that have not been derecognized 70,107,548.43 55,070,669.18
Output tax to be carried over 2,963,006.16 2,754,006.98
Total 73,070,554.59 57,824,676.16
Classification of long-term borrowings
Category of borrowings Closing balance Opening balance
Mortgage borrowings 20,000,000.00 70,000,000.00
Credit borrowings 57,987,000.00 32,000,000.00
Add: Interest payable on long-term
borrowings
Total 78,062,610.42 102,118,708.32
(1)On December 12th, 2025, the Company entered into a working capital loan contract
with Industrial Bank Co., Ltd. Kunming Branch for the purpose of meeting daily working
capital needs, with a loan amount of RMB 10 million and a loan period from December 12th,
of the loan was RMB 10 million, of which RMB 0.4630 million is expected to be repaid within
one year.
(2)The Company borrowed RMB 84.50 million in 2025 from Kunming Dongchuan
District Sub-branch of Agricultural Bank of China Limited, and RMB 30.25 million was repaid
during the period. As for the principal amount of the loan taken out in 2022, RMB 28 million
was repaid during the period; as for the principal amount of the loan taken out in 2023, RMB
principal amount of the loan was RMB 78.25 million, of which RMB 29.80 million is expected
to be repaid within one year.
Kunming Chuanjinnuo Chemical Co., Ltd.
Notes to the financial statements
January 1st, 2025 - December 31st, 2025
(Unless indicated otherwise, all amounts are expressed in RMB)
(3)Guangxi Chuanjinnuo Chemical Co., Ltd. entered into a fixed asset loan contract with
Fangchenggang Branch of China Construction Bank Corporation on July 1st, 2021 for the
construction of the wet process phosphoric acid purification and fine phosphate project,
including but not limited to the replacement of the fixed asset loan from Guangxi Beibu Gulf
Bank, with a loan amount of RMB 250 million, an interest rate being the LPR interest rate
plus basis point, and a loan period of 6 years. The enterprise mortgaged the land use right
(Certificate No.: Gui (2020) Fangchenggang City Real Estate Right No. 0015838), which was
guaranteed by Liu Meng, the actual controller of Chuanjinnuo and the enterprise. As of
December 31st, 2025, the outstanding principal amount of the loan was RMB 70 million, of
which RMB 50 million is expected to be repaid within one year.
(4)In 2025, Guangxi Chuanjinnuo Chemical Co., Ltd. entered into a working capital loan
contract with Fangchenggang Branch of China Construction Bank Corporation to finance the
purchase of raw materials such as phosphate concentrate and industrial sulfuric acid, with a
loan amount of RMB 50 million and a loan period from July 10th, 2025, to August 10th, 2026.
As of December 31st, 2025, the outstanding principal amount of the loan was RMB 40 million,
and all the principal amount is expected to be repaid within one year.
Item Closing balance Opening balance
Lease payments 12,761,371.25 741,666.67
Financing costs not recognized -417,302.26 -214,398.94
Reclassified to non-current liabilities due within one year -9,518,208.08 -25,482.00
Total 2,825,860.91 501,785.73
Item Closing balance Opening balance
Long-term payables 75,519,278.16
Special payables
Total 75,519,278.16
(1) Long-term payables by nature of payment
Item Closing balance Opening balance
Installment payments for land in the Egypt Project 59,639,461.76
Partner loans and interest for the Egypt project 15,879,816.40
Total 75,519,278.16
Kunming Chuanjinnuo Chemical Co., Ltd.
Notes to the financial statements
January 1st, 2025 - December 31st, 2025
(Unless indicated otherwise, all amounts are expressed in RMB)
Changes of increase or decrease in current year (+, -)
Item Opening balance Issuance Transfer from Closing balance
Gift of
of new provident fund Others Subtotal
shares
shares to shares
Total shares 274,867,523.00 274,867,523.00
Total 274,867,523.00 274,867,523.00
Increase during the Decrease
Item Opening balance Closing balance
year during the year
Share capital premium 1,282,067,110.26 1,282,067,110.26
Total 1,282,067,110.26 1,282,067,110.26
Amount incurred in current year
Less: Those
Less: Those
transferred to
transferred to
current
current profit Amount Amount
Opening Amount retained Less: Closing
Item or loss but attributable to attributable to
balance incurred earnings but Income balance
previously the parent non-controlling
before income previously tax
included in company after interests after
tax included in expense
other tax tax
other
comprehensive
comprehensive
income
income
I. Other comprehensive
income that cannot be
reclassified to profit or loss
II. Other comprehensive
income to be reclassified -1,029,646.03 4,855,304.04 4,671,501.76 183,802.28
to profit or loss
Including: Cash flow
-1,029,646.03 5,380,739.76 5,181,243.04 199,496.72
hedging reserves 4,151,597.01
Translation
difference of foreign -525,435.72 -509,741.28 -15,694.44
-509,741.28
currency statements
Total other
-1,029,646.03 4,855,304.04 4,671,501.76 183,802.28 3,641,855.73
comprehensive income
Increase during the Decrease during the
Item Opening balance Closing balance
year year
Safety production costs 496,474.63 17,040,607.69 15,561,590.21 1,975,492.11
Total 496,474.63 17,040,607.69 15,561,590.21 1,975,492.11
Kunming Chuanjinnuo Chemical Co., Ltd.
Notes to the financial statements
January 1st, 2025 - December 31st, 2025
(Unless indicated otherwise, all amounts are expressed in RMB)
Increase during Decrease during
Item Opening balance Closing balance
the year the year
Statutory surplus reserve 92,691,401.81 27,100,184.24 119,791,586.05
Total 92,691,401.81 27,100,184.24 119,791,586.05
Item Current year Prior year
Undistributed profit at the end of the prior year before adjustments 891,709,910.57 750,685,777.27
Adjustments to the total undistributed profits at the beginning of the year
(upward +, downward -)
Including: Retrospective adjustments in accordance with the new provisions
in Accounting Standards for Business Enterprises and related new provisions
Changes in accounting policies
Correction of significant prior-period errors
Changes in the scope of consolidation under common control
Other adjusting factors
Adjusted undistributed profits at the beginning of the year 891,709,910.57 750,685,777.27
Add: Current year net profit attributable to owners of the parent company 453,813,148.37 176,055,944.37
Recover of loss by surplus reserve
Recover of loss by capital reserve
Less: Withdrawal of statutory surplus reserve 27,100,184.24 4,796,383.54
Withdrawal of discretionary surplus reserve
Withdrawal of general risk reserve
Dividends payable on ordinary shares 82,460,256.90 30,235,427.53
Dividends on ordinary shares transferred to share capital
Current year closing balance 1,235,962,617.80 891,709,910.57
Kunming Chuanjinnuo Chemical Co., Ltd.
Notes to the financial statements
January 1st, 2025 - December 31st, 2025
(Unless indicated otherwise, all amounts are expressed in RMB)
(1) Details of operating income and operating costs
Amount incurred in current year Amount incurred in prior year
Item
Income Costs Income Costs
Main businesses 4,067,704,642.34 3,341,091,135.03 3,193,159,944.56 2,768,488,873.61
Other businesses 6,955,722.08 131,441.10 14,317,007.01 11,486,313.03
Total 4,074,660,364.42 3,341,222,576.13 3,207,476,951.57 2,779,975,186.64
(2) Breakdown of operating income and operating costs
Kunming Chuanjinnuo Guangxi Chuanjinnuo Chemical
Classification of contracts
Operating income Operating costs Operating income Operating costs
Business type 1,512,138,943.83 1,258,372,291.66 2,639,514,369.04 2,159,148,468.39
Including: Feed grade phosphate 1,032,296,282.47 854,136,258.89
Phosphate fertilizer 227,044,559.00 184,202,447.89 454,631,838.85 303,278,903.16
Phosphoric acid 220,739,824.89 205,490,383.60 2,124,853,295.53 1,835,093,842.27
Others 32,058,277.47 14,543,201.28 60,029,234.66 20,775,722.96
Classified by business region 1,512,138,943.83 1,258,372,291.66 2,639,514,369.04 2,159,148,468.39
Including: Northeast China 2,634,225.75 2,099,499.05 40,956,706.43 36,027,063.12
North China 29,815,482.38 24,845,880.97 26,529,181.53 24,688,175.52
East China 108,614,573.83 90,241,785.21 234,967,037.15 217,859,480.35
South China 203,177,280.81 161,313,348.38 365,037,137.15 338,007,156.13
Central China 52,648,424.31 43,238,862.65 69,216,031.15 62,241,021.75
Kunming Chuanjinnuo Chemical Co., Ltd.
Notes to the financial statements
January 1st, 2025 - December 31st, 2025
(Unless indicated otherwise, all amounts are expressed in RMB)
Kunming Chuanjinnuo Guangxi Chuanjinnuo Chemical
Classification of contracts
Operating income Operating costs Operating income Operating costs
Northwest China 26,567,964.66 22,067,777.01 583,479.56 543,332.37
Southwest China 490,366,128.41 412,610,071.64 129,747,539.37 85,026,130.45
International 598,314,863.68 501,955,066.75 1,772,477,256.70 1,394,756,108.70
Market or client type 1,512,138,943.83 1,258,372,291.66 2,639,514,369.04 2,159,148,468.39
Including: Phosphorus chemical industry 1,480,080,666.36 1,243,829,090.38 2,579,485,134.38 2,138,372,745.43
Others 32,058,277.47 14,543,201.28 60,029,234.66 20,775,722.96
Contract type 1,512,138,943.83 1,258,372,291.66 2,639,514,369.04 2,159,148,468.39
Including: Merchandising 1,511,333,319.44 1,258,372,291.66 2,633,177,804.16 2,159,017,027.29
Others 805,624.39 6,336,564.88 131,441.10
Classification by time of product transfer 1,512,138,943.83 1,258,372,291.66 2,639,514,369.04 2,159,148,468.39
Including: Income recognized at a certain point
in time
Income recognized over a period of
time
Classification by contract duration 1,512,138,943.83 1,258,372,291.66 2,639,514,369.04 2,159,148,468.39
Including: Within one year 1,512,138,943.83 1,258,372,291.66 2,639,514,369.04 2,159,148,468.39
More than one year
Classification by sales channel 1,512,138,943.83 1,258,372,291.66 2,639,514,369.04 2,159,148,468.39
Including: Direct sale 783,847,112.38 667,840,511.92 706,465,690.38 630,361,753.65
Distribution 728,291,831.45 590,531,779.74 1,933,048,678.66 1,528,786,714.74
Total 1,512,138,943.83 1,258,372,291.66 2,639,514,369.04 2,159,148,468.39
(Continued)
Kunming Chuanjinnuo Chemical Co., Ltd.
Notes to the financial statements
January 1st, 2025 - December 31st, 2025
(Unless indicated otherwise, all amounts are expressed in RMB)
Chuan Jin Nuo Hong Kong Others and offsets Total
Classification of contracts
Operating income Operating costs Operating income Operating costs Operating income Operating costs
Business type 14,210,467.52 13,977,509.04 91,203,415.97 90,275,692.96 4,074,660,364.42 3,341,222,576.13
Including: Feed grade phosphate 1,032,296,282.47 854,136,258.89
Phosphate fertilizer 14,210,467.52 13,977,509.04 91,016,948.78 90,275,692.96 604,869,916.59 411,183,167.13
Phosphoric acid 2,345,593,120.42 2,040,584,225.87
Others 186,467.19 91,901,044.94 35,318,924.24
Classified by business region 14,210,467.52 13,977,509.04 91,203,415.97 90,275,692.96 4,074,660,364.42 3,341,222,576.13
Including: Northeast China 43,590,932.18 38,126,562.17
North China 56,344,663.91 49,534,056.49
East China 343,581,610.98 308,101,265.56
South China 78,330,327.90 77,402,604.89 489,884,090.06 421,917,899.62
Central China 121,864,455.46 105,479,884.40
Northwest China 27,151,444.22 22,611,109.38
Southwest China 620,113,667.78 497,636,202.09
International 14,210,467.52 13,977,509.04 12,873,088.07 12,873,088.07 2,372,129,499.83 1,897,815,596.42
Market or client type 14,210,467.52 13,977,509.04 91,203,415.97 90,275,692.96 4,074,660,364.42 3,341,222,576.13
Including: Phosphorus chemical industry 14,210,467.52 13,977,509.04 91,016,948.78 90,275,692.96 3,982,759,319.48 3,305,903,651.89
Others 186,467.19 91,901,044.94 35,318,924.24
Contract type 14,210,467.52 13,977,509.04 91,203,415.97 90,275,692.96 4,074,660,364.42 3,341,222,576.13
Including: Merchandising 14,210,467.52 13,977,509.04 91,016,948.78 90,275,692.96 4,067,704,642.34 3,341,091,135.03
Others 186,467.19 6,955,722.08 131,441.10
Classification by time of product transfer 14,210,467.52 13,977,509.04 91,203,415.97 90,275,692.96 4,074,660,364.42 3,341,222,576.13
Kunming Chuanjinnuo Chemical Co., Ltd.
Notes to the financial statements
January 1st, 2025 - December 31st, 2025
(Unless indicated otherwise, all amounts are expressed in RMB)
Chuan Jin Nuo Hong Kong Others and offsets Total
Classification of contracts
Operating income Operating costs Operating income Operating costs Operating income Operating costs
Including: Income recognized at a certain
point in time
Income recognized over a period
of time
Classification by contract duration 14,210,467.52 13,977,509.04 91,203,415.97 90,275,692.96 4,074,660,364.42 3,341,222,576.13
Including: Within one year 14,210,467.52 13,977,509.04 91,203,415.97 90,275,692.96 4,074,660,364.42 3,341,222,576.13
More than one year
Classification by sales channel 14,210,467.52 13,977,509.04 91,203,415.97 90,275,692.96 4,074,660,364.42 3,341,222,576.13
Including: Direct sale 1,490,312,802.76 1,298,202,265.57
Distribution 14,210,467.52 13,977,509.04 91,203,415.97 90,275,692.96 2,584,347,561.66 2,043,020,310.56
Total 14,210,467.52 13,977,509.04 91,203,415.97 90,275,692.96 4,074,660,364.42 3,341,222,576.13
Kunming Chuanjinnuo Chemical Co., Ltd.
Notes to the financial statements
January 1st, 2025 - December 31st, 2025
(Unless indicated otherwise, all amounts are expressed in RMB)
(3) Information on performance obligations
Nature of Amounts assumed by Types of quality
Whether the person
Time for fulfilling performance Company's the Company that are assurance offered by the
Item Important payment terms is primarily
obligations commitment to expected to be refunded Company and related
responsible
transfer goods to customers obligations
or 90% payment by irrevocable confirmed letter of credit
Cargo loaded on board and before loading, with the balance due upon receipt of the
Sell abroad Cargoes Yes None Product quality assurance
departed from port bill of lading; 3) Payment by sight letter of credit upon
loading; and 4) Payment by wire transfer within 30 days
after the date of the bill of lading.
Delivery and acceptance of the
Domestic working days upon invoice receipt; 3) Payment by bank
goods to the customer's Cargoes Yes None Product quality assurance
sales acceptance note within 30 days after delivery and receipt
designated location; 3) Delivery
of invoice.
at the port.
(4) Information on transaction prices apportioned to remaining performance obligations
The income corresponding to performance obligations that have been contracted for but not yet performed or not yet completed at the end of the year
is RMB 618,080,910.91, of which RMB 618,080,910.91 is expected to be recognized as income in 2026.
Kunming Chuanjinnuo Chemical Co., Ltd.
Notes to the financial statements
January 1st, 2025 - December 31st, 2025
(Unless indicated otherwise, all amounts are expressed in RMB)
Item Amount incurred in current year Amount incurred in prior year
Property tax 4,172,667.61 4,221,966.99
Renewable energy development fund 3,589,696.89
Urban maintenance and construction tax 3,392,975.58 644,914.13
Urban land use tax 3,122,721.80 1,839,148.64
Stamp duty 2,507,501.96 1,799,584.57
Education surcharge 1,439,555.94 385,546.36
Local education surcharge 1,062,698.70 257,030.90
Environmental protection tax 169,309.34 156,263.10
Vehicle and vessel tax 11,589.32 12,119.98
National major water conservancy
construction fund
Water resources tax 190,626.00
Total 19,871,890.97 9,316,574.67
Item Amount incurred in current year Amount incurred in prior year
Employee benefits 18,436,706.14 15,087,921.29
Business promotion expenses 1,819,073.37 1,220,093.70
Business service fees 1,468,601.12 2,238,192.33
Travel expenses 1,056,538.62 1,416,935.85
Business entertainment expenses 445,201.46 578,261.22
Depreciation 122,792.48 110,512.34
Warehousing and relocating costs 20,401.50 21,795.89
Others 6,757,992.84 5,097,022.12
Total 30,127,307.53 25,770,734.74
Item Amount incurred in current year Amount incurred in prior year
Environment protection expenses 48,447,284.50 50,984,085.46
Employee benefits 43,868,566.85 32,318,141.21
Depreciation and amortisation 8,947,493.82 8,064,604.57
Intermediary agency service fee 8,683,616.33 5,444,727.57
Loss on work stoppage 3,963,057.49 5,641,030.07
Business entertainment expenses 3,770,323.03 2,289,106.76
Office expenses 2,311,277.04 2,287,591.10
Travel expenses 2,020,927.13 1,053,304.27
Kunming Chuanjinnuo Chemical Co., Ltd.
Notes to the financial statements
January 1st, 2025 - December 31st, 2025
(Unless indicated otherwise, all amounts are expressed in RMB)
Item Amount incurred in current year Amount incurred in prior year
Vehicle usage fees 276,415.16 335,658.69
Guarantee fund for the disabled 207,423.96 735,263.94
Repair fees 106,265.57 107,017.30
Lease fees 56,682.36 46,960.32
Others 3,233,909.57 2,865,745.62
Total 125,893,242.81 112,173,236.88
Item Amount incurred in current year Amount incurred in prior year
Material and service costs 8,374,072.74 29,620,495.63
Labor costs 6,816,443.23 10,948,201.87
Depreciation 2,898,081.57 6,426,041.20
Other expenses 549,967.66 3,547,063.70
Total 18,638,565.20 50,541,802.40
Item Amount incurred in current year Amount incurred in prior year
Interest expenses 18,732,533.79 21,401,932.73
Less: Interest income 9,354,932.83 11,358,421.03
Add: Exchange losses -2,458,399.19 -5,569,303.27
Other expenditures 2,596,697.48 2,292,338.42
Total 9,515,899.25 6,766,546.85
Source of other income Amount incurred in current year Amount incurred in prior year
Government grants 11,401,629.93 8,236,537.78
Additional deduction of value-added tax (VAT) 3,595,416.23 8,204,805.55
Total 14,997,046.16 16,441,343.33
Amount incurred in current Amount incurred in prior
Item
year year
Investment income from disposal of financial assets held for
trading
Notes discounting handling fees for 6+9 banks (comprising 6 large
state-owned commercial banks and 9 national joint-stock -267,391.87 -829,973.65
commercial banks)
Total 43,493.53 -374,818.94
Kunming Chuanjinnuo Chemical Co., Ltd.
Notes to the financial statements
January 1st, 2025 - December 31st, 2025
(Unless indicated otherwise, all amounts are expressed in RMB)
Item Amount incurred in current year Amount incurred in prior year
Bad debt loss on accounts receivable -445,130.41 620,004.12
Bad debt loss on other receivables -2,608,287.98 -16,544,026.76
Total -3,053,418.39 -15,924,022.64
Item Amount incurred in current year Amount incurred in prior year
Loss on decline in value of inventories and
-2,062,941.05 -4,230,806.96
impairment loss of contract performance costs
Impairment losses on fixed assets -3,685,504.79
Total -2,062,941.05 -7,916,311.75
Item Amount incurred in current year Amount incurred in prior year
Gains on disposal of non-current assets 2,386.93 22.74
Including: Gains on disposal of non-current assets
not classified as held for sale
Including: Gains on disposal of fixed assets 2,386.93 22.74
Total 2,386.93 22.74
(1) Details of non-operating income
Amount included in
Amount incurred in Amount incurred in
Item non-recurring profit or
current year prior year
loss for the year
Income from liquidated damages 800.00 14,650.00 800.00
Others 4,365,325.71 2,485,652.94 4,365,325.71
Total 4,366,125.71 2,500,302.94 4,366,125.71
Amount included in
Item Current year amount Prior year amount non-recurring profit or
loss for the year
Expenditures on fines and late
payment penalties
Loss on disposal of damaged or
scrapped non-current assets
External donation expenses 130,000.00 242,000.00 130,000.00
Others 728,666.74 1,000.00 728,666.74
Total 2,943,306.00 864,853.75 2,943,306.00
Note: "Others" primarily consists of losses from the scrapping of obsolete materials.
Kunming Chuanjinnuo Chemical Co., Ltd.
Notes to the financial statements
January 1st, 2025 - December 31st, 2025
(Unless indicated otherwise, all amounts are expressed in RMB)
(1) Income tax expenses
Amount incurred in Amount incurred in prior
Item
current year year
Current income tax expenses 62,225,790.85 9,832,975.47
Deferred tax expenses 2,665,042.45 21,568,135.98
Total 64,890,833.30 31,401,111.45
(2) Adjustments to accounting profit and income tax expenses
Item Amount incurred in current year
Total consolidated profit for the year 540,740,269.42
Income tax expenses at the statutory/applicable tax rate 81,111,040.41
Effect of different tax rates applicable to subsidiaries -24,399,924.75
Effect of adjustments to income taxes of prior periods 2,339,921.16
Effect of non-taxable income -37,570.58
Effect of non-deductible costs, expenses and losses 597,055.28
Effect of using deductible losses not recognized as deferred tax assets in prior
-87,470.49
periods
Effect of deductible temporary differences or deductible losses not recognized as
deferred tax assets in the current year
Changes in opening balances of deferred tax assets/liabilities as a result of tax rate
adjustments
Effect of additional deduction of research and development expenses -2,036,480.34
Income tax expenses 64,890,833.30
For details, please refer to Note “V.33 Other comprehensive income”.
(1) Cash related to operating activities
Amount incurred in current
Item Amount incurred in prior year
year
Guarantee 28,727,580.34 46,386,283.58
Current payments 18,361,383.07 4,982,590.84
Subsidies 10,584,579.93 8,236,537.78
Interest from banks 3,537,519.73 11,358,420.86
Compensations 416,085.20 27,742.00
Others 203,934.32 384,008.47
Total 61,831,082.59 71,375,583.53
Kunming Chuanjinnuo Chemical Co., Ltd.
Notes to the financial statements
January 1st, 2025 - December 31st, 2025
(Unless indicated otherwise, all amounts are expressed in RMB)
Item Amount incurred in current year Amount incurred in prior year
Guarantee 42,415,011.05 26,209,180.90
Current payments 10,626,965.48 3,365,464.70
Environmental protection expenses 10,548,491.66 6,414,109.28
Office expenses 3,426,105.95 4,176,833.76
Technological service fees 2,842,073.46 2,679,583.11
Business entertainment expenses 2,382,206.76 2,675,662.33
Travel expenses 2,194,117.66 2,885,140.21
Business promotion and service expenses 1,941,791.90 2,738,882.27
Intermediary agency service fee 1,933,073.35 1,965,758.00
Handling fees to banks 1,457,770.76 569,502.84
Short-term leases and leases of low-value assets under
simplified treatment 86,775.00
Donations 130,000.00 242,000.00
Research and development expenses 111,226.67 124,081.06
Others 1,394,350.94 3,799,220.67
Total 81,868,651.24 57,932,194.13
(2) Cash related to investing activities
Item Amount incurred in current year Amount incurred in prior year
Recovery of structural deposits and invested funds 376,000,000.00 102,000,000.00
Recovery of prior investment in the Sifangdi Landfill 23,500,000.00
Proceeds from disposal of subsidiary equity 1,000,000.00
Proceeds from returns on wealth management products 5,817,500.00
Item Amount incurred in current year Amount incurred in prior year
Payment of structural deposits and investing funds 36,000,000.00 412,000,000.00
Purchase and build long-term assets 220,393,378.50 71,125,668.69
Acquisition of subsidiaries and non-controlling interests 7,723,787.63
Item Amount incurred in current year Amount incurred in prior year
Recovery of structural deposits and invested funds 376,000,000.00 102,000,000.00
Recovery of prior investment in the Sifangdi Landfill 23,500,000.00
Proceeds from returns on wealth management products 5,817,500.00
Total 405,317,500.00 102,000,000.00
Kunming Chuanjinnuo Chemical Co., Ltd.
Notes to the financial statements
January 1st, 2025 - December 31st, 2025
(Unless indicated otherwise, all amounts are expressed in RMB)
Item Amount incurred in current year Amount incurred in prior year
Payment of structural deposits and investing funds 36,000,000.00 412,000,000.00
Deposit for land in the Egypt Project 11,829,780.63
Total 47,829,780.63 412,000,000.00
(3) Cash related to financing activities
Amount incurred in current
Item Amount incurred in prior year
year
Partner loans 15,828,300.00
Notes discounting 76,806,040.71 25,334,381.27
Total 92,634,340.71 25,334,381.27
Amount incurred in current
Item Amount incurred in prior year
year
Usage fees and security deposits for right-of-use assets 6,107,847.34 50,000.00
Total 6,107,847.34 50,000.00
Kunming Chuanjinnuo Chemical Co., Ltd.
Notes to the financial statements
January 1st, 2025 - December 31st, 2025
(Unless indicated otherwise, all amounts are expressed in RMB)
Increase during the year Decrease during the year
Item Opening balance Closing balance
Cash changes Non-cash changes Cash changes Non-cash changes
Short-term borrowings 340,736,998.42 613,306,040.71 13,497,487.76 374,878,527.02 55,204,550.04 537,457,449.83
Non-current liabilities
due within one year
Long-term borrowings 102,118,708.32 144,500,000.00 8,221,274.98 56,514,372.88 120,263,000.00 78,062,610.42
Lease liabilities 501,785.73 17,497,970.63 4,807,847.34 10,366,048.11 2,825,860.91
Long-term payables 15,828,300.00 59,690,978.16 75,519,278.16
Total 671,097,650.18 773,634,340.71 316,608,609.57 663,915,422.95 185,833,598.15 911,591,579.36
Kunming Chuanjinnuo Chemical Co., Ltd.
Notes to the financial statements
January 1st, 2025 - December 31st, 2025
(Unless indicated otherwise, all amounts are expressed in RMB)
(4) Significant activities and financial effects that do not involve current cash
receipts and disbursements but affect the enterprise's financial position or
may affect the enterprise's cash flows in the future
Item Amount incurred in current year
Notes receivable transferred by endorsement 490,913,773.16
Including: Payment for goods 363,178,387.78
Purchase long-term assets 127,735,385.38
Total 490,913,773.16
(1) Supplementary information to cash flow statement
Item Current year amount Prior year amount
Net profit 475,849,436.12 185,393,419.87
Add: Provision for asset impairment 2,062,941.05 7,916,311.75
Credit impairment losses 3,053,418.39 15,924,022.64
Depreciation of fixed assets, depletion of oil and gas assets,
depreciation of productive biological assets
Depreciation of right-of-use assets 5,119,671.63 33,688.56
Amortization of intangible assets 3,757,371.40 3,775,070.24
Amortization of long-term deferred expenses
Losses on disposal of fixed assets, intangible assets and other
-2,386.93 -22.74
long-term assets (gains marked with “-”)
Losses on write-off of fixed assets (gains marked with “-”) 959,382.44 216,781.72
Losses on changes in fair value (gains marked with “-”)
Financial expenses (gains marked with “-”) 12,955,823.12 21,401,932.73
Losses on investment (gains marked with “-”) -43,493.53 374,818.94
Decreases of deferred tax assets (increases marked with “-”) -2,179,910.50 22,380,836.36
Increases of deferred tax liabilities (decreases marked with “-”) 4,844,952.95 -812,700.38
Decreases of inventories (increases marked with “-”) -180,596,984.24 -214,060,417.22
Decreases of operating receivables (increases marked with “-”) -234,424,773.20 -61,433,721.67
Increases of operating payables (decreases marked with “-”) 71,172,905.40 18,904,934.78
Others
Net cash flow from operating activities 297,896,683.31 142,811,815.59
deposit and withdrawal:
Conversion of debt into capital
Convertible corporate bonds due within one year
Finance leased fixed assets
Kunming Chuanjinnuo Chemical Co., Ltd.
Notes to the financial statements
January 1st, 2025 - December 31st, 2025
(Unless indicated otherwise, all amounts are expressed in RMB)
Item Current year amount Prior year amount
Closing balance of cash 853,567,907.41 378,787,894.98
Less: Opening balance of cash 378,787,894.98 724,690,908.75
Add: Closing balance of cash equivalents
Less: Opening balance of cash equivalents
Net increase in cash and cash equivalents 474,780,012.43 -345,903,013.77
(2) Composition of cash and cash equivalents
Item Closing balance Opening balance
Cash 853,567,907.41 378,787,894.98
Including: Cash on hand
Unrestricted bank deposit 853,567,907.41 378,787,894.98
Cash equivalents
Closing balance of cash and cash equivalents 853,567,907.41 378,787,894.98
Including: Restricted cash and cash equivalents used by
parent company and subsidiaries of the Group
(3) Information on cash and cash equivalents with restricted use but still
presented as cash and cash equivalents
Item Current year amount Prior year amount Reason for belonging to cash and cash equivalents
Raising funds 460,960,827.42 114,051,326.32 Restricted use but available for withdraw at any time
Total 460,960,827.42 114,051,326.32 —
(4) Monetary assets not belonging to cash and cash equivalents
Reason for not belonging to cash and cash
Item Current year amount Prior year amount
equivalents
Time deposits 340,000,000.00 Not available for withdraw at any time
Letter of credit deposit 19,442,000.10 13,270,083.93 Not available for withdraw at any time
Guarantee frozen for locking
exchange rates
Frozen fund due to businesses 5,073,771.97 211,660.39 Not available for withdraw at any time
Total 26,769,770.01 357,641,571.18 —
(1) Foreign currency monetary items
Item Closing foreign currency balance Exchange rate Closing balance in RMB
Cash and cash equivalents
Including: USD 37,750,009.24 7.0288 265,337,264.95
EGP 40,081,093.63 0.14729 5,903,544.28
Kunming Chuanjinnuo Chemical Co., Ltd.
Notes to the financial statements
January 1st, 2025 - December 31st, 2025
(Unless indicated otherwise, all amounts are expressed in RMB)
Item Closing foreign currency balance Exchange rate Closing balance in RMB
HKD 145,906.15 0.90322 131,785.35
Accounts receivable
Including: USD 5,553,004.75 7.0288 39,030,959.79
Other receivables
Including: USD 1,675,761.08 7.0288 11,778,589.48
Accounts payable
Including: USD 3,346,348.07 7.0288 23,520,811.31
Long-term payables
Including: USD 10,744,263.34 7.0288 75,519,278.16
(2) Overseas business entities
Principal place of Functional
Overseas business entities Basis for selection
business currency
Primary settlement currency of
Chuan Jin Nuo Hong Kong Co., Limited Hong Kong USD
operating activities
Primary settlement currency of
Chuan Jin Nuo International Limited Hong Kong USD
operating activities
Chuanjinno Middle East International United Arab Primary settlement currency of
USD
Holdings Limited Emirates (UAE) operating activities
Primary settlement currency of
Chuanjinno Egypt Chemical Co., Ltd. Egypt USD
operating activities
(1) The Group as the lessee
Amount incurred in Amount incurred in
Item
current year prior year
Interest expenses on lease liabilities 268,331.52 25,650.18
Short-term lease expenses under simplified treatment included in
current profit or loss
Total cash outflows related to leases 6,573,312.94 136,775.00
VI. R&D expenditures
Item Amount incurred in current year Amount incurred in prior year
Material and service costs 8,374,072.74 29,620,495.63
Labor costs 6,816,443.23 10,948,201.87
Depreciation 2,898,081.57 6,426,041.20
Other expenses 549,967.66 3,547,063.70
Total 18,638,565.20 50,541,802.40
Including: Expensed R&D expenditures 18,638,565.20 50,541,802.40
Capitalization of R&D expenditures
Kunming Chuanjinnuo Chemical Co., Ltd.
Notes to the financial statements
January 1st, 2025 - December 31st, 2025
(Unless indicated otherwise, all amounts are expressed in RMB)
VII. Changes in the scope of consolidation
Name of subsidiary Shareholding ratio Reason for change
Chuan Jin Nuo International Limited 100% Newly established
Chuanjinno Middle East International Holdings Limited 60% Newly established
Chuanjinno Egypt Chemical Co., Ltd. 60.04% Newly established
Yunnan Xinshenghai International Trade Co., Ltd. 100% Newly established
VIII. Interests in other entities
(1) Composition of the enterprise group
Registered Principal Shareholding ratio (%) Acquisiti
Name of Place of
capital (RMB place of Business nature on
subsidiary registration Direct Indirect
Research and
Kunming Jingcui experimental
Engineering Kunming Kunming development of Establish
Technology Co., City City phosphorus ment
Ltd. chemical
technologies
Fangchen Production and sales
Guangxi Fangchengg
ggang of chemical Establish
Chuanjinnuo 55,396 ang City, 93.64
City, products, fertilizers, ment
Chemical Co., Ltd. Guangxi
Guangxi etc.
Kunming Heliwan Dongchua Dongchuan
Industrial Solid n District, District, Solid waste Establish
Waste Treatment Kunming Kunming treatment ment
Co., Ltd. City City
Fangchen Production and sales
Guangxi Fangchengg
ggang of new energy Establish
Chuanjinnuo New 200 ang City, 100.00
City, batteries and ment
Energy Co., Ltd. Guangxi
Guangxi materials
Production and sales
Yingkou Yingkou
Yingkou of new energy Acquisiti
Chuanxinnuo High 7,500 City, 100.00
City batteries and on
Tech Co., Ltd. Guangxi
materials
Yunnan
Xinshenghai Kunming Kunming Sales of materials Establish
International City City and equipment ment
Trade Co., Ltd.
Chuan Jin Nuo Manufacture of
Hong Establish
Hong Kong Co., USD 2 million Hong Kong chemicals and 100.00
Kong ment
Limited chemical products
Chuan Jin Nuo
USD 100 Hong Establish
International Hong Kong Investment holding 100.00
million Kong ment
Limited
Kunming Chuanjinnuo Chemical Co., Ltd.
Notes to the financial statements
January 1st, 2025 - December 31st, 2025
(Unless indicated otherwise, all amounts are expressed in RMB)
Registered Principal Shareholding ratio (%) Acquisiti
Name of Place of
capital (RMB place of Business nature on
subsidiary registration Direct Indirect
Chuanjinno United
United Arab
Middle East USD 150 Arab Establish
Emirates Investment holding 60.00
International million Emirates ment
(UAE)
Holdings Limited (UAE)
Production and sales
Chuanjinno Egypt USD 50 Establish
Egypt Egypt of chemical 60.04
Chemical Co., Ltd. million ment
products
(2) Significant non-wholly owned subsidiaries
Dividends
Shareholding Gains or losses Balance of
declared for
ratio of attributable to non-controlling
Name of subsidiary non-controlling
non-controlling non-controlling interests at the end
interests in the
interests interests in the year of the year
year
Guangxi Chuanjinnuo Chemical Co.,
Ltd.
Kunming Chuanjinnuo Chemical Co., Ltd.
Notes to the financial statements
January 1st, 2025 - December 31st, 2025
(Unless indicated otherwise, all amounts are expressed in RMB)
(3) Main financial information of significant non-wholly owned subsidiaries
Closing balance
Name of subsidiary
Current assets Non-current assets Total assets Current liabilities Non-current Liabilities Total liabilities
Guangxi Chuanjinnuo Chemical Co., Ltd. 1,025,428,664.50 1,022,318,541.94 2,047,747,206.44 957,003,789.74 33,830,265.32 990,834,055.06
(Continued)
Opening balance
Name of subsidiary
Current assets Non-current assets Total assets Current liabilities Non-current Liabilities Total liabilities
Guangxi Chuanjinnuo Chemical Co., Ltd. 781,966,342.90 1,046,573,593.04 1,828,539,935.94 906,516,903.11 76,696,938.57 983,213,841.68
(Continued)
Amount incurred in current year
Name of subsidiary Cash flows from operating
Operating income Net profit Total comprehensive income
activities
Guangxi Chuanjinnuo Chemical Co., Ltd. 2,639,514,369.04 348,324,859.76 351,461,649.96 242,642,368.84
(Continued)
Amount incurred in prior year
Name of subsidiary Cash flows from operating
Operating income Net profit Total comprehensive income
activities
Guangxi Chuanjinnuo Chemical Co., Ltd. 2,068,523,172.40 146,817,960.90 146,482,913.90 18,340,110.52
Kunming Chuanjinnuo Chemical Co., Ltd.
Notes to the financial statements
January 1st, 2025 - December 31st, 2025
(Unless indicated otherwise, all amounts are expressed in RMB)
IX. Government grants
The Company did not have any government grants recognized at the receivable amount
at the end of the year.
The Company does not have liability items under government grants
Accounts Amount incurred in current year Amount incurred in prior year
Other income 11,401,629.93 8,236,537.78
Non-operating income
X. Risks related to financial instruments
The Group is exposed to a variety of risks associated with financial instruments in its
ordinary activities, including market risk (such as exchange risk, interest risk and product
price risk), credit risk and liquidity risk. The risks associated with these financial instruments,
and the risk management policies adopted by the Group to mitigate these risks are described
below. The management of the Group manages and monitors these risk exposures to ensure
that the above risks are kept within limits.
The Group's risk management objectives are to achieve a proper balance between risks
and yields, minimize the adverse impacts of risks on the Group's results of operations, and
maximize the benefits of the shareholders and other equity investors. Based on these risk
management objectives, the Group's basic risk management strategy is to identify and
analyze its exposure to various risks, establish an appropriate maximum tolerance to risks,
implement risk management, and monitor these exposures to control the risks within a
defined range in a timely and reliable manner.
(1) Market risk
The Group is primarily exposed to foreign exchange risk in relation to the U.S. dollar
(USD), Egyptian pound (EGP), and Hong Kong dollar (HKD). Except for Chuan Jin Nuo
International Limited, Chuanjinno Middle East International Holdings Limited, Chuanjinno
Egypt Chemical Co., Ltd., and Chuan Jin Nuo Hong Kong Co., Limited, which conduct
procurement and sales in USD, EGP, and HKD, and except for certain procurement and sales
Kunming Chuanjinnuo Chemical Co., Ltd.
Notes to the financial statements
January 1st, 2025 - December 31st, 2025
(Unless indicated otherwise, all amounts are expressed in RMB)
activities of Kunming Chuanjinnuo Chemical Co., Ltd. and Guangxi Chuanjinnuo Chemical Co.,
Ltd. that are conducted in USD, the Group’s other major business operations are primarily
denominated and settled in Renminbi (RMB). As at December 31st, 2025, the Group's
balances of assets and liabilities were denominated in RMB, except for the foreign currency
balances of the assets and liabilities as described in the table below. The exchange rate risk
arising from the assets and liabilities with the foreign currency balances may have an impact
on the Company's results of operations.
Item December 31st, 2025 December 31st, 2024
Cash and cash equivalents-USD 37,750,009.24 13,096,743.49
Cash and cash equivalents - EGP 40,081,093.63
Cash and cash equivalents - HKD 145,906.15
Accounts receivable-USD 5,553,004.75 10,086,697.94
Other receivables - USD 1,675,761.08
Accounts payable-USD 3,346,348.07 936,674.71
Long-term payables - USD 10,744,263.34
The Group closely monitors the impact of exchange rate movements on the Group.
The Group's interest rate risk arises from bank borrowings. Floating-rate financial
liabilities expose the Company to cash flow interest rate risk, while fixed-rate financial
liabilities expose the Company to fair value interest rate risk. The Company adopts the
following strategy to mitigate this risk: in case of an interest rate reduction by the state in the
future, the Company will repay the outstanding borrowings in advance; in case of an interest
rate hike by the state in the future, it will not repay the outstanding borrowings in advance.
As at December 31st, 2025, the Company's interest-bearing debt consisted primarily of
borrowings, including short-term borrowings, long-term borrowings, and long-term payables,
with an aggregate amount of RMB 703,764,800.00, of which the amount of borrowings at a
fixed rate was RMB 446,014,800.00, and the amount of borrowings at a floating rate was
RMB 257,750,000.00.
Product price risk
The Group purchases and sells all kinds of products at market prices and is therefore
subject to fluctuations in such prices.
(2) Credit risk
Kunming Chuanjinnuo Chemical Co., Ltd.
Notes to the financial statements
January 1st, 2025 - December 31st, 2025
(Unless indicated otherwise, all amounts are expressed in RMB)
The Group manages credit risk by portfolio. Credit risk arises primarily from cash and
cash equivalents, notes receivable, accounts receivable, accounts receivable financing, other
receivables, etc.
In order to minimize the credit risk, the Group has set up a department responsible for
the determination of credit limits, credit approvals and other monitoring procedures to
ensure that follow-up action is taken to recover overdue debts. In addition, the Group
reviews the recovery of each individual receivable at each balance sheet date to ensure that
sufficient bad debt provision is made for amounts that are irrecoverable. In this regard, the
management of the Group considers that the Group's credit risk is significantly reduced.
The Group's working funds are deposited in banks with high credit ratings, therefore the
credit risk of the working funds is relatively low.
The Group has adopted necessary policies to ensure that all sales customers have a
good credit history. Except for the top five accounts receivable and contract assets, the
Group has no other significant credit concentration risk. Of the Group's accounts receivable,
the top five totaled: RMB 52,802,219.52, accounting for 42.97% of the Group's total accounts
receivable.
The Group determines at each balance sheet date whether there has been a significant
increase in the credit risk of a financial instrument since its initial recognition by comparing
the probability of default over the expected life of the financial instrument determined at
initial recognition with the probability of default over the expected life of the instrument
determined at the balance sheet date. However, if the Group determines that a financial
instrument has only low credit risk at the balance sheet date, it can assume that the credit
risk of the financial instrument has not increased significantly since initial recognition.
The Group's main criterion for determining a significant increase in credit risk is the
overdue date exceeding 30 days, or a significant change in one or more of the following
indicators: significant adverse changes in the operating environment in which the debtor
operates, internal or external credit ratings, or actual or expected results of operations.
A financial asset becomes credit-impaired when one or more events that have an
adverse effect on the financial asset's expected future cash flows occur. The Group's main
criterion for determining whether credit impairment has occurred is if the number of days
past due exceeds 90 days. But under certain circumstances, the Group also considers a
financial asset to be credit impaired if internal or external information indicates that the
Kunming Chuanjinnuo Chemical Co., Ltd.
Notes to the financial statements
January 1st, 2025 - December 31st, 2025
(Unless indicated otherwise, all amounts are expressed in RMB)
contractual amount may not be recovered in full before considering any credit
enhancements held. A credit impairment of a financial asset may be the result of a
combination of events and may not necessarily be the result of separately identifiable
events.
Evidence that a financial asset is impaired includes observable information such as:
significant financial difficulty of the issuer or debtor; a breach of contract by the debtor, such
as a default or delinquency in interest or principal payments; the Group granting concessions
to the debtor that it would not have made in any other circumstance because of economic or
contractual considerations related to the debtor's financial difficulty; a significant likelihood
that the debtor will enter bankruptcy or other financial reorganization; and the
disappearance of an active market for the financial asset due to the financial difficulty of the
issuer or debtor.
As at December 31st, 2025, the largest credit risk exposures that could give rise to
financial losses for the Group mainly arise from losses incurred on the Group's financial
assets as a result of the failure of the other party to the contract to perform its obligations,
and the financial guarantees assumed by the Group.
Specifically, such exposure includes the book values of the recognized financial assets as
stated on the consolidated balance sheet. For financial instruments measured at fair value,
the book value reflects the exposure to risks but not the maximum exposure to risks. The
maximum exposure to risks would vary with the future changes in fair value.
(3) Liquidity risk
Liquidity risk is the risk that the Group cannot perform its financial obligations as they
fall due. The Group manages the liquidity risk by ensuring that funding liquidity is adequate
to perform its debt obligations at maturity without incurring unacceptable losses or causing
damage to its corporate reputation. The Group regularly analyzes the structure and maturity
of its liabilities to ensure adequate funding. The management of the Group monitors the
utilization of bank borrowings and ensures compliance with borrowing agreements. It also
negotiates financing with financial institutions to maintain a certain credit line and reduce
the liquidity risk.
Sales of goods and bank borrowings are taken as main sources of the Group's funding.
As at December 31st, 2025, the Group's unutilized bank borrowings amounted to RMB
short-term bank borrowings amounted to RMB 502,773,300 (December 31st, 2024: RMB
Kunming Chuanjinnuo Chemical Co., Ltd.
Notes to the financial statements
January 1st, 2025 - December 31st, 2025
(Unless indicated otherwise, all amounts are expressed in RMB)
Financial assets and financial liabilities held by the Group are analyzed by the maturity
of the undiscounted remaining contractual obligations:
Amount as at December 31st, 2025:
Item Within one year One to two years Two to five years More than five years Total
Financial assets
Cash and cash
equivalents
Notes receivable 129,417,984.6 129,417,984.60
Accounts
receivable
Other
receivables
Financial
liabilities
Short-term
borrowings
Notes payable 5,000,000.00 5,000,000.00
Accounts
payable
Other payables 8,115,034.25 8,115,034.25
Employee
benefits payable
Non-current
liabilities due 217,726,380.06 217,726,380.06
within one year
Long-term
borrowings
Long-term
payables
The Group uses sensitivity analysis techniques to analyze the potential effects of
reasonably possible changes in risk variables on the current profit or loss or shareholders'
equity. Since changes in any risk variable rarely occur in isolation, and the correlations that
exist between variables will have a significant effect on the ultimate amount of impact of a
change in a given risk variable, the following is done based on the assumption that changes
in each variable are independent.
(1) Foreign exchange risk sensitivity analysis
Foreign exchange risk sensitivity analysis assumes that all net investment hedges of
foreign operations and cash flow hedges are highly effective.
On the basis of the above assumptions, the after-tax effect of a reasonably possible
Kunming Chuanjinnuo Chemical Co., Ltd.
Notes to the financial statements
January 1st, 2025 - December 31st, 2025
(Unless indicated otherwise, all amounts are expressed in RMB)
change in exchange rates on the current profit or loss and equity, with all other variables
held constant, is as follows:
FY2025 FY2024
Exchange rate
Item Impact on net Impact on Impact on net Impact on
changes
profit shareholders' equity profit shareholders' equity
All foreign 5% appreciation
currencies against RMB
All foreign 5% depreciation
-18,572,692.38 -18,572,692.38 -7,739,713.74 -7,739,713.74
currencies against RMB
(2) Interest rate risk sensitivity analysis
The interest rate risk sensitivity analysis is based on the following assumptions:
Changes in market interest rates affect interest income or expenses on variable-rate
financial instruments;
For fixed-rate financial instruments measured at fair value, changes in market interest
rates affect only their interest income or expenses;
Changes in the fair values of derivative financial instruments and other financial assets
and liabilities are calculated using the discounted cash flow method at the market interest
rate as of the balance sheet date.
On the basis of the above assumptions, the after-tax effect on current profit or loss and
equity of a reasonable possible change in interest rates, with all other variables held
constant, is as follows:
FY2025 FY2024
Interest rate
Item Impact on net Impact on Impact on net Impact on
changes
profit shareholders' equity profit shareholders' equity
Floating-rate
borrowings
Floating-rate
borrowings
(1) Classification of transfer methods
Nature of financial assets Amount of financial Derecognized
Transfer method Basis for judging derecognition
transferred assets transferred or not
Notes Unexpired bank Almost all the risks and rewards of financial
Not
endorsement/notes acceptance notes among 117,411,304.07 assets, including the risk of default
derecognized
discounting notes receivable associated with them, are retained
Notes Unexpired bank
Almost all the risks and rewards of financial
endorsement/notes acceptance notes among 204,354,828.10 Derecognized
assets have been transferred
discounting receivables financing
Total 321,766,132.17
Kunming Chuanjinnuo Chemical Co., Ltd.
Notes to the financial statements
January 1st, 2025 - December 31st, 2025
(Unless indicated otherwise, all amounts are expressed in RMB)
(2) Financial assets derecognized due to transfer
Transfer method of financial Amount of financial assets Gain or loss related to
Item
assets derecognized derecognition
Notes endorsement/notes
Receivables financing 204,354,828.10
discounting
Total 204,354,828.10
XI. Fair value disclosure
Closing fair value
Item Level 1 fair value Level 2 fair value Level 3 fair value
Total
measurements measurements measurements
I. Fair value measurements on
— — — —
a recurring basis
Total assets measured at fair
value on a recurring basis
Total liabilities measured at fair
— — —
value on a recurring basis
techniques used and qualitative and quantitative information of critical
parameters
Derivative financial assets represent forward exchange contracts, and the fair value as
of the balance sheet date can be calculated based on the forward exchange rate specified by
the bank and the exchange rate as of the balance sheet date.
techniques used and qualitative and quantitative information of critical
parameters
Receivables financing represent outstanding bank acceptance notes receivable because
the factor for credit risk adjustment is not an input which is directly observable from the
market, the remaining maturity is short and the book balance approximates fair value.
fair value
The Group's financial assets and financial liabilities measured at amortized cost mainly
include cash and cash equivalents, notes receivable, accounts receivable, other receivables,
short-term borrowings, notes payable, accounts payable, other payables and long-term
borrowings, etc. There are insignificant differences between the book values and fair values
Kunming Chuanjinnuo Chemical Co., Ltd.
Notes to the financial statements
January 1st, 2025 - December 31st, 2025
(Unless indicated otherwise, all amounts are expressed in RMB)
of the Group's financial assets and financial liabilities which are not measured at fair value.
XII. Related parties and related party transactions
(1) Parent company of the Company
The Company, without parent company, has the natural person Liu Meng as its
controlling shareholder and ultimate controller.
(2) Subsidiaries of the Company
For details of the subsidiaries, please refer to "Note VIII. 1. (1) Composition of the
enterprise group".
(1) Details of related party guarantees
Whether the
Guarantee expiry
Name of guarantor Guarantee amount Guarantee start date guarantee has
date
been fulfilled
Liu Meng
Kunming Chuanjinnuo 366,275,000.00 June 23rd, 2021 June 23rd, 2027 No
Chemical Co., Ltd.
Note: On June 23rd, 2021, the Company and Liu Meng, the controlling shareholder and
actual controller, entered into a maximum guarantee contract with Fangchenggang Branch
of China Construction Bank Corporation, separately. The maximum amount of the guarantee
liability was RMB 366,275,000, used for Fangchenggang Branch of China Construction Bank
Corporation to provide loans, accept commercial notes, issue letters of credit and letters of
guarantee, etc. to Guangxi Chuanjinnuo.
(2) Key management personnel remuneration
Item name Amount incurred in current year Amount incurred in prior year
Total remuneration 4,245,499.02 4,795,402.00
Note: The Company abolished its Supervisory Board in 2025; therefore, the scope for
the remuneration statistics of key management personnel covers non-independent directors
and senior management.
As of December 31st, 2025, the Company had no balances of related party transactions
to be disclosed.
Kunming Chuanjinnuo Chemical Co., Ltd.
Notes to the financial statements
January 1st, 2025 - December 31st, 2025
(Unless indicated otherwise, all amounts are expressed in RMB)
XIII. Commitments and contingencies
(1) Commitment on share repurchase
If there are false records, misleading statements or material omissions in the
prospectus of the Company's initial public offering and listing on the GEM Board, which
constitute a material and substantial impact on the judgment of whether the Company
meets the issuance conditions stipulated by the law, the Company shall hold a board
meeting in a timely manner to consider a plan for the repurchase of all the new shares in the
initial public offering and submit the plan to the shareholders' meeting for implementation
after a resolution has been made. The Company will determine the repurchase price in
accordance with the relevant laws at the time of repurchase, the normative documents
promulgated by China Securities Regulatory Commission (the CSRC) and the Shenzhen Stock
Exchange and the provisions of the Articles of Incorporation, which shall not be lower than
the market price at the time of repurchase.
(2) Commitment on compensation by law for investors' losses due to false records,
misleading statements or material omissions
There do not exist false records, misleading statements or material omissions in the
prospectus of the Company's initial public offering and listing on the GEM Board, and the
Company assumes joint and several liability for its authenticity, accuracy and completeness.
(1) If there are false records, misleading statements or material omissions in the prospectus,
which constitute a material and substantial impact on the judgment of whether the
Company meets the issuance conditions stipulated by the law, the Company will repurchase
all the new shares in the initial public offering at the secondary market price of the
Company's shares. (2) If there are false records, misleading statements or material omissions
in the Company's prospectus, which cause investors' losses in securities transactions, the
Company will compensate the investors for their losses in accordance with the law.
As at December 31st, 2025, the Company had no other material contingencies to be
disclosed other than the above matters.
XIV. Events after the balance sheet date
On March 18th, 2024, the Proposal on the Company's Profit Distribution for 2025 was
approved at the 19th meeting of the fifth session of the Board of Directors of the Company.
Kunming Chuanjinnuo Chemical Co., Ltd.
Notes to the financial statements
January 1st, 2025 - December 31st, 2025
(Unless indicated otherwise, all amounts are expressed in RMB)
The proposed profit distribution for 2025 is as follows: based on the Company's share capital
totaling 274,867,523 shares as at December 31st, 2025, the Company will distribute a cash
dividend of RMB 4 (inclusive of tax) for every ten shares to all shareholders, totaling RMB
share capital. The proposal is still to be submitted for consideration at the Company's 2025
Annual General Meeting of Shareholders.
The Group had no other material events after the balance sheet date, except for the
above disclosure of events after the balance sheet date.
XV. Other important events
(1) Basis for determining reportable segments and accounting policies
According to the internal structure, management requirements and internal reporting
system of the Group, its operations for the current year mainly comprise the production,
sales and research and development of feed additives and fertilizers and technical services in
the region of Kunming, the production, sales and research and development of phosphoric
acid and fertilizers by Guangxi Chuanjinnuo Chemical, and the sales operations of Chuan Jin
Nuo Hong Kong. On this basis, the operations are classified into three reportable segments,
namely Kunming Chuanjinnuo, Guangxi Chuanjinnuo Chemical, and Chuan Jin Nuo Hong
Kong. The management of the Group evaluates the operating results of the reportable
segments on a periodic basis to determine their resource allocation and performance
appraisal.
Report information of the segments is disclosed in accordance with their respective
accounting policies and measurement bases used in reporting to the management, which
are consistent with those used in the preparation of financial statements.
Kunming Chuanjinnuo Chemical Co., Ltd.
Notes to the financial statements
January 1st, 2025 - December 31st, 2025
(Unless indicated otherwise, all amounts are expressed in RMB)
(2) Financial information of the reportable segments for the year
Guangxi Chuanjinnuo Chuan Jin Nuo Hong Kong Others and inter-segment
Item Kunming Chuanjinnuo Total
Chemical elimination
Operating income 1,512,138,943.83 2,639,514,369.04 14,210,467.52 91,203,415.97 4,074,660,364.42
Revenue from external transactions 1,433,808,618.50 2,626,641,278.40 14,210,467.52 4,074,660,364.42
Revenue from inter-segment
transactions
Operating costs and expenses 1,216,954,663.60 2,252,041,509.51 14,000,748.70 -52,345,992.90 3,535,342,914.71
Costs of external sales 1,180,969,686.77 2,146,275,380.32 13,977,509.04 3,341,222,576.13
Costs of inter-segment sales 77,402,604.89 12,873,088.07 90,275,692.96
Period expenses and impairment
-41,417,628.06 92,893,041.12 23,239.66 -142,621,685.86 194,120,338.58
losses
Operating profit 295,184,280.23 387,472,859.53 209,718.82 143,549,408.87 539,317,449.71
Total assets 2,834,227,885.64 2,047,747,206.44 356,612.00 539,255,603.60 4,343,076,100.48
Total liabilities 288,926,621.92 990,834,055.06 24,424.16 -62,070,554.32 1,341,855,655.46
Supplementary information
Depreciation and amortization
expenses
Non-cash expenses other than
depreciation and amortization
Capital expenditure 90,138,530.37 38,087,726.97 -6,331,287.07 134,557,544.41
Kunming Chuanjinnuo Chemical Co., Ltd.
Notes to the financial statements
January 1st, 2025 - December 31st, 2025
(Unless indicated otherwise, all amounts are expressed in RMB)
XVI. Notes to key items of the financial statements of the parent company
(1) Accounts receivable by aging
Aging Closing book balance Opening book balance
Within 1 year (including 1 year) 83,179,616.27 62,042,999.90
Including: Within 6 months 83,179,616.27 62,042,995.75
More than 2 years 1,202,840.16
Total 83,179,616.27 63,245,840.06
(2) Accounts receivable presented according to the bad debt accrual method
Closing balance
Category Book balance Bad debt provision
Accrual Book value
Amount Ratio (%) Amount
ratio (%)
Bad debt provision on an
individual basis
Bad debt provision by
portfolio
Including: Aging
portfolio
Risk-free portfolio
Total 83,179,616.27 100.00 831,796.16 1.00 82,347,820.11
(Continued)
Opening balance
Category Book balance Bad debt provision
Accrual Book value
Amount Ratio (%) Amount
ratio (%)
Bad debt provision on an
individual basis
Bad debt provision by
portfolio
Including: Aging
portfolio
Risk-free portfolio 6,110,900.00 9.66 6,110,900.00
Total 63,245,840.05 100.00 1,762,161.54 2.79 61,483,678.51
Kunming Chuanjinnuo Chemical Co., Ltd.
Notes to the financial statements
January 1st, 2025 - December 31st, 2025
(Unless indicated otherwise, all amounts are expressed in RMB)
Closing balance
Aging
Book balance Bad debt provision Accrual ratio (%)
Within 6 months 83,179,616.27 831,796.16 1.00
More than 2 years
Total 83,179,616.27 831,796.16 1.00
(3) Bad debt provision accrued, recovered or reversed for accounts receivable
during the year
Amount of change during the year
Closing
Category Opening balance Recovery Charge-offs or
Accrual Others balance
or reversal write-offs
Bad debt provision 1,762,161.54 849,483.45 594,664.68 1,185,184.15 831,796.16
Total 1,762,161.54 849,483.45 594,664.68 1,185,184.15 831,796.16
No bad debt provision for significant amounts was recovered or reversed during the
year.
(4) Accounts receivable actually written off during the year
Item Write-off amount
Accounts receivable actually written off 1,185,184.15
There were no significant accounts receivable write-offs during the period.
(5) Accounts receivable and contract assets of the top five closing balances,
grouped by party in arrears
Closing balance
Closing As a percentage of
Closing balance of bad debt
Closing balance balance the total closing
of accounts provision for
Name of entity of accounts of balance of accounts
receivable and accounts
receivable contract receivable and
contract assets receivable and
assets contract assets (%)
contract assets
Yunnan Yuneng New Energy
Battery Materials Co., Ltd.
Siam Java Trading Co., Ltd 13,837,872.69 13,837,872.69 16.64 138,378.73
NUTRECONEDERLANDB.V. 5,706,141.50 5,706,141.50 6.86 57,061.42
Sichuan New Hope Animal
Nutrition Technology Co., Ltd.
SCANBIO CORPORATION CO.,
LTD.
Total 42,377,526.91 42,377,526.91 50.95 423,775.27
Kunming Chuanjinnuo Chemical Co., Ltd.
Notes to the financial statements
January 1st, 2025 - December 31st, 2025
(Unless indicated otherwise, all amounts are expressed in RMB)
Item Closing balance Opening balance
Interest receivable
Dividends receivable
Other receivables 442,375,504.39 851,145,331.71
Total 442,375,504.39 851,145,331.71
(1) Other receivables by nature of payment
Nature of payment Closing book balance Opening book balance
Transactions with subsidiaries 440,344,461.36 848,945,582.90
Guarantee and deposit 1,471,600.00 451,600.00
Advances 803,203.19 740,775.78
Equity payments 1,000,000.00
Current payments 763,937.41
Petty cash 271,801.92
Total 442,619,264.55 852,173,698.01
(2) Other receivables by aging
Aging Closing book balance Opening book balance
Within 1 year (including 1 year) 91,841,453.35 210,510,494.30
More than 5 years 1,600.00 739,123.41
Total 442,619,264.55 852,173,698.01
Kunming Chuanjinnuo Chemical Co., Ltd.
Notes to the financial statements
January 1st, 2025 - December 31st, 2025
(Unless indicated otherwise, all amounts are expressed in RMB)
(3) Other receivables presented according to the bad debt accrual method
Closing balance
Category Book balance Bad debt provision
Accrual ratio Book value
Amount Ratio (%) Amount
(%)
Bad debt provision on an
individual basis
Including: With individually
significant amounts and
separate bad debt provision
With individually
insignificant amounts and
separate bad debt provision
Bad debt provision by
portfolio
Including: Aging portfolio 2,274,803.19 0.51 243,760.16 10.72 2,031,043.03
Risk-free portfolio 440,344,461.36 99.49 440,344,461.36
Total 442,619,264.55 100.00 243,760.16 0.06 442,375,504.39
(Continued)
Opening balance
Category Book balance Bad debt provision
Accrual Book value
Amount Ratio (%) Amount
ratio (%)
Bad debt provision on an
individual basis
Including: With individually
significant amounts and 615,347.27 0.07 615,347.27 100.00
separate bad debt provision
With individually
insignificant amounts and 148,590.14 0.02 148,590.14 100.00
separate bad debt provision
Bad debt provision by
portfolio
Including: Aging portfolio 2,464,177.70 0.29 264,428.89 10.73 2,199,748.81
Risk-free portfolio 848,945,582.90 99.62 848,945,582.90
Total 852,173,698.01 100.00 1,028,366.30 0.12 851,145,331.71
Kunming Chuanjinnuo Chemical Co., Ltd.
Notes to the financial statements
January 1st, 2025 - December 31st, 2025
(Unless indicated otherwise, all amounts are expressed in RMB)
Opening balance Closing balance
Name Bad debt Bad debt Accrual
Book balance Book balance Accrual reason
provision provision ratio (%)
Kunming
Xunhechuan 615,347.27 615,347.27
Mining Co., Ltd.
Sporadic
customers
Total 763,937.41 763,937.41
Closing balance
Aging
Book balance Bad debt provision Accrual ratio (%)
Within 1 year (including 1 year) 1,823,203.19 91,160.16 5.00
More than 5 years 1,600.00 1,600.00 100.00
Total 2,274,803.19 243,760.16 -
Closing balance
Aging
Book balance Bad debt provision Accrual ratio (%)
Within 1 year (including 1 year) 90,018,250.16
Total 440,344,461.36 —
model of expected credit losses
Phase I Phase II Phase III
Expected credit losses
Expected credit losses
Bad debt provision Expected credit over the entire Total
over the entire
losses over the duration (Credit
duration (No credit
next 12 months impairment has
impairment)
occurred)
Balance as at January 1st,
Balance as at January 1st, — — — —
Kunming Chuanjinnuo Chemical Co., Ltd.
Notes to the financial statements
January 1st, 2025 - December 31st, 2025
(Unless indicated otherwise, all amounts are expressed in RMB)
Phase I Phase II Phase III
Expected credit losses
Expected credit losses
Bad debt provision Expected credit over the entire Total
over the entire
losses over the duration (Credit
duration (No credit
next 12 months impairment has
impairment)
occurred)
--Transferred to Phase II
--Transferred to Phase III
--Reversed to Phase II
--Reversed to Phase I
Current year accrual 26,440.36 26,440.36
Current year reversal 47,109.09 6,047.98 53,157.07
Current year charge-offs
Current year write-offs 757,889.43 757,889.43
Other changes
Balance as at December
(4) Bad debt provision accrued, recovered or reversed for other receivables
during the year
Amount of change during the year
Closing
Category Opening balance Recovery or Charge-offs or
Accrual Others balance
reversal write-offs
Bad debt
provision
Total 1,028,366.30 26,440.36 53,157.07 757,889.43 243,760.16
No bad debt provision for significant amounts was recovered or reversed during the
year.
(5) Other receivables actually written off during the year
Item Write-off amount
Other receivables actually written 757,889.43
Significant other accounts receivable write-offs among them:
Write-off Whether arising
Nature of Reason for
Name of entity Write-off amount procedures from related
payment write-off
performed transactions
Long-term Perform internal
Kunming Xunhechuan Current outstanding approval process
Mining Co., Ltd. payments and cannot for bad debt
be recovered write-offs
Total — 609,299.29 — — —
Kunming Chuanjinnuo Chemical Co., Ltd.
Notes to the financial statements
January 1st, 2025 - December 31st, 2025
(Unless indicated otherwise, all amounts are expressed in RMB)
(6) Other receivables of the top five closing balances, grouped by party in
arrears:
As a
percentage of
the total Closing
closing balance of
Name of entity Nature of payment Closing balance Aging
balance of bad debt
other provision
receivables
(%)
Within 1 year,
Guangxi Chuanjinnuo
Borrowings 287,787,873.13 1-2 years, 2-3 65.02
New Energy Co., Ltd.
years
Guangxi Chuanjinnuo Within 1 year,
Borrowings 142,574,790.19 32.21
Chemical Co., Ltd. 2-3 years
Kunming Jingcui Within 1 year,
Engineering Borrowings 9,981,798.04 1-2 years, 2-3 2.26
Technology Co., Ltd. years, 3-4 years
Guizhou Jinlin Guarantee and
Chemical Co., Ltd. deposit
Yunnan Chihong Zinc Guarantee and
& Germanium Co., Ltd. deposit
Total 441,594,461.36 - 99.78 175,000.00
Closing balance Opening balance
Item Impairment Impairment
Book balance Book value Book balance Book value
provision provision
Investments
in 687,483,448.00 687,483,448.00 559,610,000.00 559,610,000.00
subsidiaries
Investments
in
associates
and joint
ventures
Total 687,483,448.00 687,483,448.00 559,610,000.00 559,610,000.00
(1) Investments in subsidiaries
Opening balance Changes of increase or decrease in current year Closing balance of
Opening balance (book Closing balance (book
Investee of impairment Impairment impairment
value) Added investment Reduced investment Others value)
provision provision provision
Guangxi
Chuanjinnuo 548,660,000.00 548,660,000.00
Chemical Co., Ltd.
Kunming Jingcui
Engineering
Technology Co.,
Ltd.
Kunming Heliwan
Industrial Solid
Waste Treatment
Co., Ltd.
Guangxi
Chuanjinnuo New 2,000,000.00 2,000,000.00
Energy Co., Ltd.
Chuan Jin Nuo
Hong Kong Co., 144,028.00 144,028.00
Limited
Chuan Jin Nuo
International 127,729,420.00 127,729,420.00
Limited
Total 559,610,000.00 127,873,448.00 687,483,448.00
Kunming Chuanjinnuo Chemical Co., Ltd.
Notes to the financial statements
January 1st, 2025 - December 31st, 2025
(Unless indicated otherwise, all amounts are expressed in RMB)
(1) Details of operating income and operating costs
Amount incurred in current year Amount incurred in prior year
Item
Income Costs Income Costs
Main businesses 1,511,333,319.44 1,258,372,291.66 1,327,825,286.46 1,159,173,308.57
Other businesses 805,624.39 3,023,652.23 592,197.28
Total 1,512,138,943.83 1,258,372,291.66 1,330,848,938.69 1,159,765,505.85
(2) Breakdown of operating income and operating costs
Kunming Chuanjinnuo
Classification of contracts
Operating income Operating costs
Product type 1,512,138,943.83 1,258,372,291.66
Including: Feed grade phosphate 1,032,296,282.47 854,136,258.89
Phosphate fertilizer 227,044,559.00 184,202,447.89
Phosphoric acid 220,739,824.89 205,490,383.60
Others 32,058,277.47 14,543,201.28
Classified by business region 1,512,138,943.83 1,258,372,291.66
Including: Northeast China 2,634,225.75 2,099,499.05
North China 29,815,482.38 24,845,880.97
East China 108,614,573.83 90,241,785.21
South China 203,177,280.81 161,313,348.38
Central China 52,648,424.31 43,238,862.65
Northwest China 26,567,964.66 22,067,777.01
Southwest China 490,366,128.41 412,610,071.64
International 598,314,863.68 501,955,066.75
Market or client type 1,512,138,943.83 1,258,372,291.66
Including: Phosphorus chemical industry 1,480,080,666.36 1,243,829,090.38
Others 32,058,277.47 14,543,201.28
Contract type 1,512,138,943.83 1,258,372,291.66
Including: Merchandising 1,511,333,319.44 1,258,372,291.66
Others 805,624.39
Classification by time of product transfer 1,512,138,943.83 1,258,372,291.66
Including: Recognized at a certain point in time 1,512,138,943.83 1,258,372,291.66
Recognized over a period of time
Classification by contract duration 1,512,138,943.83 1,258,372,291.66
Including: Within 1 year 1,512,138,943.83 1,258,372,291.66
More than 1 year
Kunming Chuanjinnuo Chemical Co., Ltd.
Notes to the financial statements
January 1st, 2025 - December 31st, 2025
(Unless indicated otherwise, all amounts are expressed in RMB)
Kunming Chuanjinnuo
Classification of contracts
Operating income Operating costs
Classification by sales channel 1,512,138,943.83 1,258,372,291.66
Including: Direct sale 783,847,112.38 667,840,511.92
Distribution 728,291,831.45 590,531,779.74
Total 1,512,138,943.83 1,258,372,291.66
(3) Information on performance obligations
Amounts
Nature of Whether Types of quality
assumed by
Company's the assurance
Time for fulfilling the Company
Important payment commitme person is offered by the
Item performance that are
terms nt to primarily Company and
obligations expected to be
transfer responsib related
refunded to
goods le obligations
customers
before loading; 2)
Payment by sight
Cargo loaded on letter of credit upon
Sell Product quality
board and departed loading; and 3) Cargoes Yes None
abroad assurance
from port Payment by wire
transfer within 30
days after the date
of the bill of lading.
buyer; 2) Delivery delivery; 2) Payment
and acceptance of will be made within
Domestic the goods to the 3-10 working days Product quality
Cargoes Yes None
sales customer's after the goods have assurance
designated location; been inspected and
port; received.
(4) Information on transaction prices apportioned to remaining performance
obligations
The income corresponding to performance obligations that have been contracted for
but not yet performed or not yet completed at the end of the year is RMB 175,440,352.15,
of which RMB 175,440,352.15 is expected to be recognized as income in 2026.
Item Amount incurred in current year Amount incurred in prior year
Investment income from long-term equity
investments accounted for using the cost method
Investment income from disposal of financial assets
held for trading
Total 131,406,885.40 455,154.71
Kunming Chuanjinnuo Chemical Co., Ltd.
Notes to the financial statements
January 1st, 2025 - December 31st, 2025
(Unless indicated otherwise, all amounts are expressed in RMB)
Supplementary information to the financial statements
Current year Descriptions
Item
amount
Gains or losses on disposal of non-current assets (including write-offs of provision for
impairment of assets)
Government grants included in the current profit or loss (except for government grants
that are closely related to the Company's normal business operations, meet the
requirements of national policies, are enjoyed in accordance with defined criteria, and
exert a continuing impact on the Company's profit or loss)
Gains or losses on changes in the fair values of financial assets and financial liabilities held
by non-financial enterprises and gains or losses on disposal of financial assets and financial
liabilities, except for effective hedging operations related to the Company's normal
business operations
Funds possession costs received from non-financial enterprises and charged to the current
profit or loss
Gains or losses on entrusted investments or asset management
Gains or losses on entrusted external loans
Losses on assets due to force majeure factors such as natural disasters
Reversal of provision for impairment of receivables individually tested for impairment
Income arising when the investment cost of the enterprise for acquiring a subsidiary,
associate and joint venture is less than the share of the fair value of the investee's
identifiable net assets upon the acquisition of the investment
Net profit or loss for the period from the beginning of the period to the date of
consolidation of subsidiaries arising from business combinations under common control
Gains or losses on exchanges of non-monetary assets
Gains or losses on debt restructuring
One-time expenses incurred by the enterprise due to the fact that the related operating
activities are discontinued, such as the expenditures for the relocation of employees
One-time effect on the current profit or loss due to adjustments in tax, accounting and
other laws and regulations
Share-based payment expenses recognized in a lump sum due to cancellation or
modification of share incentive plans
For cash-settled share-based payments, gains or losses on changes in the fair value of
employee benefits payable after the vesting date
Gains or losses on changes in the fair value of investment properties subsequently
measured using the fair value model
Gains or losses arising from transactions at unfair transaction prices
Gains or losses arising from contingencies unrelated to the Company's normal business
operations
Custodian fee income from entrusted operations
Other non-operating income and expenses other than those mentioned above 1,418,423.71
Other profit or loss items which meet the definition of non-recurring profit or loss
Subtotal 13,137,721.97 —
Less: Effect of income taxes 1,647,832.93
Effect of non-controlling interests (after tax) 337,024.48
Total 11,152,864.56 —
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