深圳市深粮控股股份有限公司SHENZHEN CEREALS HOLDINGS CO.,LTD.
ANNUAL REPORT 2019
April 2020
Section I. Important Notice, Contents and Interpretation
Board of Directors, Supervisory Committee, all directors, supervisors and seniorexecutives of SHENZHEN CEREALS HOLDINGS CO.,LTD. (hereinafterreferred to as the Company) hereby confirm that there are no any fictitiousstatements, misleading statements, or important omissions carried in this report,and shall take all responsibilities, individual and/or joint, for the reality,accuracy and completion of the whole contents.Chairman of the Company Zhu Junming, General Manager Hu Xianghai, Headof Accounting Jin Zhenyuan and Head of Accounting Institution (AccountingSupervisors) Wen Jieyu hereby confirm that the Financial Report of AnnualReport 2019 is authentic, accurate and complete.Except for followed director, other directors are attending the Board Meeting forAnnual Report deliberation in person
| Director not attending in person | Position of the director not attending in person | Reasons on absent | Trustee |
| Liu Haifeng | Independent director | Business trip | Zhao Rubing |
Concerning the forward-looking statements with future planning involved in theannual report, they do not constitute a substantial commitment for investors,Securities Times, China Securities Journal, Hong Kong Commercial Daily andJuchao Website (www.cninfo.com.cn) are the media appointed by the Companyfor information disclosure, all information of the Company disclosed in theabove mentioned media should prevail. Investors are advised to exercise cautionof investment risks.The Company has analyzed the risk factors that the Company may exist and itscountermeasures in the report, investors are advised to pay attention to read“Prospect for future development of the Company” in the report of Section
IV-Discussion and Analysis of the Operation. This report has been prepared inChinese and English version respectively. In the event of difference ininterpretation between the two versions, Chinese report shall prevail.The profit distribution plan deliberated and approved by the Board Meetingwas: distributed cash bonus of 2 yuan (tax included) for every 10 shares held bywhole shareholders based on the 1,152,535,254, zero share(tax included) forbonus and no transfer of public reserves into share capital either.
Contents
Section I. Important Notice, Contents and Interpretation .................................................................... 2
Section II Company Profile and Main Financial Indexes ...... 6
Section III Summary of Company Business ...... 12
Section IV. Discussion and Analysis of the Operation ....................................................................... 17
Section V. Important Events ............................................................................................................... 38
Section VI. Changes in Shares and Particulars about Shareholders .................................................. 71
Section VII. Preferred Stock .............................................................................................................. 79
Section VIII. Convertible Bonds ........................................................................................................ 80
Section IX. Particulars about Directors, Supervisors, Senior Executives and Employees ................ 81
Section X. Corporate governance ...................................................................................................... 95
Section XI. Corporate Bond ............................................................................................................. 105
Section XII. Financial Report .......................................................................................................... 106
Section XIII. Documents available for Reference ........................................................................... 296
Interpretation
| Items | Refers to | Contents |
| SZCH/Listed Company /the Company/ | Refers to | Shenzhen Cereals Holdings Co., Ltd. |
| Shenshenbao/Shenbao Company | Refers to | Shenzhen Shenbao Industrial Co., Ltd. |
| SZCG | Refers to | Shenzhen Cereals Group Co., Ltd |
| Doximi | Refers to | Shenliang Doximi Business Co., Ltd. |
| Flour Company, Flour Factory | Refers to | Shenzhen Flour Co., Ltd |
| Shenliang Quality Inspection | Refers to | Shenliang Quality Inspection Co., Ltd. |
| Dongguan Logistics | Refers to | Dongguan Shenliang Logistics Co., Ltd. |
| Dongguan Food Industrial Park | Refers to | Dongguan International Food Industrial Park Development Co., Ltd. |
| Wuyuan Ju Fang Yong | Refers to | Wuyuan Ju Fang Yong Tea Industry Co., Ltd. |
| Shenbao Technology Center | Refers to | Shenzhen Shenbao Technology Center Co., Ltd. |
| Food Group | Refers to | Shenzhen Food Group Co., Ltd. |
| Fude Capital | Refers to | Shenzhen Fude State Capital Operation Co., Ltd. |
| Agricultural Products | Refers to | Shenzhen Agricultural Products Group Co., Ltd |
| SIHC | Refers to | Shenzhen Investment Holdings Co., Ltd. |
| Shenzhen SASAC | Refers to | Shenzhen Municipal People’s Government State-owned Assets Supervision & Administration Commission |
| CSRC | Refers to | China Securities Regulation Commission |
| SSE | Refers to | Shenzhen Stock Exchange |
| BDO CPAs | Refers to | BDO China Shu Lun Pan Certified Public Accountant LLP |
| Article of Association | Refers to | Article of Association of Shenzhen Cereals Holdings Co., Ltd. |
| RMB/10 thousand Yuan | Refers to | CNY/ten thousand Yuan |
Section II Company Profile and Main Financial IndexesI. Company information
| Short form for share | SZCH, Shenliang B | Stock code | 000019, 200019 |
| Listing stock exchange | Shenzhen Stock Exchange | ||
| Chinese name of the Company | 深圳市深粮控股股份有限公司 | ||
| Abbr. of Chinese name of the Company | 深粮控股 | ||
| English name of the Company(if applicable) | SHENZHEN CEREALS HOLDINGS CO.,LTD | ||
| Legal Representative | Zhu Junming | ||
| Registrations add. | 8/F, Tower B, No.4 Building, Software Industry Base, South District, Science & Technology Park, Xuefu Rd., Yuehai Street, Nanshan District, Shenzhen | ||
| Code for registrations add | 518057 | ||
| Offices add. | 13/F, Tower A, World Trade Plaza, No.9 Fuhong Rd., Futian District, Shenzhen | ||
| Codes for office add. | 518033 | ||
| Company’s Internet Web Site | www.slkg1949.com | ||
| szch@slkg1949.com | |||
II. Person/Way to contact
| Secretary of the Board | Rep. of security affairs | |
| Name | Du Jianguo | Chen Kaiyue, Liu Muya |
| Contact add. | 13/F, Tower A, World Trade Plaza, No.9 Fuhong Rd., Futian District, Shenzhen | 13/F, Tower A, World Trade Plaza, No.9 Fuhong Rd., Futian District, Shenzhen |
| Tel. | 0755-83778690 | 0755-83778690 |
| Fax. | 0755-83778311 | 0755-83778311 |
| dujg@slkg1949.com | chenky@slkg1949.com、liumy@slkg1949.com |
III. Information disclosure and preparation place
| Newspaper appointed for information disclosure | Securities Times; China Securities Journal and Hong Kong Commercial Daily |
| Website for annual report publish appointed by CSRC | Juchao Website: www.cninfo.com.cn |
| Preparation place for annual report | Office of the Board of Directors |
IV. Registration changes of the Company
| Organization code | 91440300192180754J |
| Changes of main business since listing (if applicable) | On February 18, 2019, the company completed the registration procedures of changes in industry and commerce for business scope and other matters. The main business has newly increased grain and oil reserves, grain and oil trade, grain and oil processing, and service business for grain and oil circulation and grain and oil reserves based on the production, research and development and sales of food raw materials (ingredients) mainly based on tea and natural plant deep processing. |
| Previous changes for controlling shareholders (if applicable) | On 10 September 1999, Shenzhen Investment Management Co., Ltd. entered into the “Equity Transfer Agreement of Shenzhen Shenbao Industrial Co., Ltd.” with Agricultural Products for 58,347,695 shares of the Company (35% in total shares of the Company) transfer to Agricultural Products with price of RMB 1.95 per share. Agricultural Products comes to the first majority shareholder of the Company after transfer and procedures for the above equity transfer has completed in June of 2003. On April 3, 2018, SIHC completed the transfer of all of its 79,484,302 shares of A shares in the company to Food Group (former named as Fude Capital). After the completion of the equity transfer, SIHC no longer holds shares in the company, while Food Group directly holds 79,484,302 shares of A shares in the company (accounting for 16% of the company’s original total share capital) and controls 19.09% shares of the company through Agricultural Products, becoming the controlling shareholder of the company. |
V. Other relevant information
CPA engaged by the Company
| Name of CPA | BDO China Shu Lun Pan Certified Public Accountant LLP |
| Offices add. for CPA | BDO CPAs, 5/F, No.11 Building, Phase II q-plex, No. 4080, Qiaoxiang Rd., Nanshan District, Shenzhen |
| Signing Accountants | Qi Tao, Zhang Wanbin |
Sponsor engaged by the Company for performing continuous supervision duties in reporting period
□ Applicable √ Not applicable
Financial consultant engaged by the Company for performing continuous supervision duties in reporting period
√Applicable □Not applicable
| Financial consultant | Office address | Financial consultant sponsor | Continuous supervision period |
| Wanho Securities Co., Ltd. | Times Technology Building No.7028, Shennan Avenue, Futian District, Shenzhen | Guo Yong, Yu Hai | 12 November 2018 to 31 December 2019 |
VI. Main accounting data and financial indexes
Whether it has retroactive adjustment or re-statement on previous accounting data or not
√Yes □No
Reasons for retroactive adjustment or re-statementEnterprise combined under the same control
| 2019 | 2018 | Changes over last year | 2017 | |||
| Before adjustment | After adjustment | After adjustment | Before adjustment | After adjustment | ||
| Operating revenue (RMB) | 11,059,984,335.92 | 10,758,782,838.14 | 10,758,782,838.14 | 2.80% | 315,762,708.35 | 10,793,693,156.79 |
| Net profit attributable to shareholders of the listed Company(RMB) | 363,501,809.52 | 308,331,032.44 | 308,331,032.44 | 17.89% | -54,094,136.23 | 359,174,263.44 |
| Net profit attributable to shareholders of the listed Company after deducting non-recurring gains and losses(RMB) | 350,898,272.66 | -70,825,168.94 | -70,825,168.94 | 595.44% | -56,114,386.31 | -56,114,386.31 |
| Net cash flow arising from operating activities(RMB) | 190,053,823.97 | 299,103,635.58 | 299,103,635.58 | -36.46% | -94,914,594.15 | 17,058,691.88 |
| Basic earnings per share (RMB/Share) | 0.3154 | 0.2675 | 0.2675 | 17.91% | -0.1089 | 0.3116 |
| Diluted earnings per share (RMB/Share) | 0.3154 | 0.2675 | 0.2675 | 17.91% | -0.1089 | 0.3116 |
| Weighted average ROE | 8.46% | 7.70% | 7.70% | 0.76% | -5.46% | 9.55% |
| Year-end of 2019 | Year-end of 2018 | Changes over end of last year | Year-end of 2017 | |||
| Before adjustment | After adjustment | After adjustment | Before adjustment | After adjustment | ||
| Total assets (RMB) | 6,775,067,275.86 | 6,468,951,793.87 | 6,468,951,793.87 | 4.73% | 1,070,386,220.55 | 5,911,027,724.31 |
| Net assets attributable to shareholder of listed Company(RMB) | 4,420,751,187.57 | 4,172,502,535.11 | 4,172,502,535.11 | 5.95% | 946,920,577.33 | 3,848,760,765.85 |
VII. Difference of the accounting data under accounting rules in and out of China
1. Difference of the net profit and net assets disclosed in financial report, under both IAS(International Accounting Standards) and Chinese GAAP (Generally Accepted AccountingPrinciples)
√ Applicable □ Not applicable
In RMB
| Net profit attributable to shareholders of listed Company | Net assets attributable to shareholders of listed Company | |||
| Current period | Last period | Ending amount | Opening amount | |
| Chinese GAAP | 363,501,809.52 | 308,331,032.44 | 4,420,751,187.57 | 4,172,502,535.11 |
| Items and amount adjusted by IAS | ||||
| Adjustment for other payable fund of stock market regulation | 1,067,000.00 | 1,067,000.00 | ||
| IAS | 363,501,809.52 | 308,331,032.44 | 4,421,818,187.57 | 4,173,569,535.11 |
2. Difference of the net profit and net assets disclosed in financial report, under both foreign accountingrules and Chinese GAAP (Generally Accepted Accounting Principles)
□ Applicable √ Not applicable
The Company has no above mentioned condition occurred in the period
3. Explanation on differences of the data under accounting standards in and out of China
□ Applicable √ Not applicable
VIII. Main financial index disclosed by quarter
In RMB
| Q 1 | Q 2 | Q 3 | Q 4 | |
| Operating income | 2,570,626,148.23 | 2,211,541,584.46 | 2,698,691,403.40 | 3,579,125,199.83 |
| Net profit attributable to shareholders of listed Company | 121,325,678.48 | 81,843,172.13 | 126,218,773.60 | 34,114,185.31 |
| Net profit attributable to shareholders of listed Company after deducted non-recurring gain/loss | 119,123,269.62 | 79,071,830.43 | 123,362,000.33 | 29,341,172.28 |
| Net cash flow arising from operating activities | -220,345,085.86 | -169,084,543.89 | 450,361,780.45 | 129,121,673.27 |
Whether there are significant differences between the above-mentioned financial index or its total number and the relevant financialindex disclosed in the Company’s quarterly report and semi-annual report
□Yes √ No
IX. Items and amounts of extraordinary profit (gains)/loss
√ Applicable □ Not applicable
In RMB
| Item | 2019 | 2018 | 2017 | Note |
| Gains/losses from the disposal of non-current asset (including the write-off that accrued for impairment of assets) | -43,069.03 | 1,207,842.88 | -50,200.13 | |
| Governmental subsidy reckoned into current gains/losses (not including the subsidy enjoyed in quota or ration according to national standards, which are closely relevant to enterprise’s business) | 12,297,924.24 | 8,311,158.51 | 2,990,059.15 | |
| Fund possession cost reckoned in current gain/loss charged from non-financial enterprise | 436,664.31 | 490,289.86 | 488,839.56 | |
| Profit and loss of assets delegation on others’ investment or management | 6,299,093.96 | 1,984,446.92 | 2,706,034.95 | |
| Net gains/losses of the current period from beginning of the period to date of consolidation for those subsidiary arising from enterprise combined under the same control | 374,880,023.05 | 413,268,399.67 | ||
| Gains and losses from change of fair values of held-for-transaction financial assets, derivative financial assets, held-for-transaction financial liability and derivative financial liability except for the effective hedge business related to normal business of the Company, and investment income from disposal of tradable financial assets, derivative financial assets, tradable financial liability, derivative financial liability and other debt investment. | 41,281.76 | -474,740.24 | -1,651,270.40 | |
| Switch-back of provision of impairment of account receivable and contract assets which are treated with separate depreciation test | 1,035,149.32 | |||
| Other non-operating income and expenditure except for the aforementioned items | -4,544,601.53 | -4,434,126.83 | -4,097,739.37 | |
| Other gains/losses items that conform to the definition of non-recurring gains/losses | 450,000.00 | |||
| Less: impact on income tax | 2,149,564.84 | 3,210,576.33 | 51,797.61 |
| Impact on minority shareholders’ equity (post-tax) | 769,341.33 | 48,116.44 | -1,686,323.93 | |
| Total | 12,603,536.86 | 379,156,201.38 | 415,288,649.75 | -- |
Concerning the extraordinary profit (gain)/loss defined by Q&A Announcement No.1 on Information Disclosure for CompaniesOffering Their Securities to the Public --- Extraordinary Profit/loss, and the items defined as recurring profit (gain)/loss according tothe lists of extraordinary profit (gain)/loss in Q&A Announcement No.1 on Information Disclosure for Companies Offering TheirSecurities to the Public --- Extraordinary Profit/loss, explain reasons
□ Applicable √ Not applicable
In reporting period, the Company has no particular about items defined as recurring profit (gain)/loss according to the lists ofextraordinary profit (gain)/loss in Q&A Announcement No.1 on Information Disclosure for Companies Offering Their Securities tothe Public --- Extraordinary Profit/loss
Section III Summary of Company BusinessI. Main businesses of the Company in the reporting period
During the reporting period, the company further promoted the business integration and coordinated development,the main business includes the wholesale and retail business, food processing and manufacturing business, leasingand commerce service business.
The wholesale and retail business are mainly rice, wheat, rice in the husk, corn, sorghum, cooking oil and othervarieties of grain and oil as well as the sales of fine tea, beverage and condiment. According to the marketconditions and the needs of upstream and downstream enterprises, the above-mentioned grain and oil productspurchased are independently traded. The wheat, rice in the husk, corn, barley and sorghum in the trade products arethe unprocessed grain, which are mainly providing raw material supplying service to customers such as large traders,feed and flour processing enterprises in the industry; the rice, flour, edible oil, fine tea and beverage etc. are mainlysupply to the enterprises and institutions, food enterprises and community residents etc.
Food processing and manufacturing business are mainly the processing the technology research in aspect of flour,rice, cooking oil, tea and natural plants, beverage and condiments etc. The company's flour brands and productsinclude “Jinchangman”, “Yingshanhong” and “Hongli” series bread flour; “Clivia” and “Canna” series tailoredflour for cakes and steamed bun; “Sunflower” high-gluten tailored flour and biscuit tailored flour; “Feiyu” carameltreats tailored flour; “Yuejixiang” moon cake tailored flour and other various small packages of flour. Rice productsinclude “Shenliang Duoxi”, “Guzhixiang”, “Jinjiaxi”, “Runxiangliangpin”, “Hexiang”, “Shenliang Yushuiqing”,etc. Cooking oil products include brands such as “Shenliang Duoxi”, “Shenliang Fuxi”, “Hongli” and “ShenliangYushuiqing”, etc. Shenliang Duoxi Changxiangdao Daohuaxiang Rice was selected as the first batch of “ChinaGood Grain and Oil” products of the National Grain Administration, its production and processing processconforms to the requirements for the evaluation of Shenzhen-supplied food, and it is allowed to use the ShenzhenStandard · SZ Product logo. ”Shenliang Yushuiqing” has formed a serial of special grade military grain supply,military demand and civil brands in rice, flour, oil and coarse cereals. Tea products of the Company including“Golden Eagle” instant tea powder, tea concentrate and other series of tea products; “Jufangyong”, “Gutan”,“Fuhaitang” series of tea products; condiment including the “Tri-Well” oyster sauce, chicken essence and seafoodsauce; beverage includes “Shenbao” chrysanthemum tea, lemon tea, herbal tea and other series of drinks.
The leasing and business service refers to providing the professional import & export trade, warehousing &storage, logistic & distribution, quality inspection & information technology services for all kinds of clients in theupstream and downstream of the industrial chain, by using the advantage of brand, reputation, experience,management, services, facilities and information systems that accumulated in field of grain and oil market, as well
as the property leasing & management, commerce operation management services. the construction and operationfor the node in Shenliang Dongguan Grain Logistics are promoted steady. After the project is completed, it willbecome a comprehensive grain circulation service provider integrating five functions including grain and oilterminal, transfer reserve, inspection and processing, processing industry, and market transaction. The subordinateShenliang Quality Inspection has obtained the qualification certificate of quality inspection organization, and wasawarded the “Guangdong Shenzhen National Grain Quality Monitoring Station”. The subordinate ShenliangCold-Chain providing a cold chain storage and distribution services for customers, and the Shenliang propertyDevelopment Company is the professional assets management platform enterprise.
II. Major changes in main assets
1. Major changes in main assets
| Major assets | Note of major changes |
| Equity assets | No major Change |
| Fixed assets | No major Change |
| Intangible assets | No major Change |
| Construction in progress | Investment for node project engineering from Shenliang Dongguan Logistic and construction in progress of Shuangyashan grain-source base project increased |
2. Main overseas assets
□ Applicable √ Not applicable
III. Core Competitiveness AnalysisDuring the reporting period, the company extended and expanded the development of grain and tea industry chain,deepened corporate reforms and strengthened the core competitive advantages of enterprises by optimizingresource integration. The company stimulated the vitality of the enterprise through innovative implementation ofEVA performance appraisal mechanism, promoted the sustainable development of the enterprise through the grainlogistics node project, promoted the reform of the grain and oil reserve mechanism by adhering to themarketization direction, and improves the management efficiency by continuously leading the informationconstruction of the domestic grain industry, prevented business risks by perfecting the management and controlmode, and accumulated strengths in leapfrog development space by strengthening the corporate culture and talentmanagement, and we have embarked on a sustainable development path of traditional enterprise self-innovationand formed the company's unique competitiveness.
1. Management Efficiency Advantage
The core management team of the company has rich experience and stable structure, and has a strong strategic
vision and pragmatic spirit. It has formed a set of effective system to promote the high-quality development of thecompany by combining with the company’s actual development. The company vigorously promotes the innovationand transformation of business models, and actively promotes the transition from “trade-oriented enterprises” to“service-oriented enterprises”, and from “operational management and control” to “strategic management andcontrol”. In the business management and control, the company builds a “four-in-one” management and controlmodel that the “business operations and fund management, inventory management, and quality management”relatively separate and check and balance each other, at the same time, it strengthens risk management, budgetmanagement, plan management, contract management, customer management and brand management and othermeasures to effectively prevent operational risks. Through innovative talent management, the company hasestablished an open talent team to meet the long-term development of enterprises. The company has innovated andimplemented the EVA performance appraisal mechanism and established a result-oriented incentive and restraintassessment mechanism which effectively built the performance culture and stimulated the viability within theenterprise. The company insists on cultivating and advocating the corporate culture with “people-oriented,performance first, excellent quality, and harmony” as the core values, combines the personal development goals ofemployees with the corporate vision, and enhances the cohesiveness and centripetal force of the enterprise.
2. Business model advantages
In terms of business layout and management, the company has deepened and subdivided its target markets, carriedout specialized operations in different areas of the grain and oil food industry chain, embraced the Internet, andgradually built a “trinity” of multilevel product supply network of terminal grain and oil e-commerce, catering anddistribution services, and bulk grain and oil trading services. In terms of e-commerce, the company vigorouslydeveloped new formats of grain, and actively promoted the development of new grain retail formats such as“Internet + Grain” and “Community Automatic Selling Grain Supply Centers”. It has already had the B2C Grainand Oil Network Direct Selling Platform “Doximi .com”, and has opened channels on Tmall, Jingdong Mall andother e-commerce platforms to promote the online and offline deep integration of e-commerce platforms. In termsof catering and distribution, the company has built a one-stop distribution service platform for large-scale terminalcustomers such as chain catering and canteens of thousands of people. Food and oil trading services, the companybuilds a grain bulk commodity trading platform, efficiently integrates business flow “Shenliang Cereals TradingNetwork”, logistics and information flow, improves circulation efficiency, and provides spot trading, financing,logistics, quality inspection, transaction information and other services for internal business units, suppliers andcustomers. The company gives full play to the traction role of major projects such as grain logistics nodes,continuously improves the construction of the grain supply chain system, and promotes the sustainable developmentof enterprises.
3. Research and development technology advantages
The company attaches great importance to transforming and upgrading the traditional industries by moderntechnologies, and actively introduces a new generation of information technologies such as internet of things,cloud computing, big data and mobile internet into grain management. It takes the lead in promoting the
construction of “standardization, mechanization, informationization and harmlessness” of warehouse managementin the industry, independently develops “grain logistics information system” (Shenliang GLS), applies RFIDtechnology and slip sheet equipment, introduces intelligent robots, and upgrades the grain depot operationefficiency and management efficiency. The company has undertaken a number of national-level research projects,and multiple IT project results have won national, provincial and municipal awards. More than 30 informationsystems have been developed and run normally. As of now, the company has 89 patents (among them, 67certificates were obtained and 22 cases were accepted for practical examination ) and 23 software copyrights.
4. Advantages of quality control
The company gives full play to the advantages of products, channels, brands, warehousing, quality inspection, etc.,and truly provides good quality and safety products for the society. The company has established a quality controlsystem that is recognized by international large food and beverage enterprises. In the grain and oil business, thecompany’s subordinate enterprise, SZCG Quality Test, has the leading grain quality testing technology andequipment in the domestic grain industry, and has been officially incorporated into the national grain qualitysupervision and testing system, and has been awarded the “Guangdong Shenzhen National Grain QualityMonitoring Station” by the State Administration of Grain. The advanced testing technology selects and checks thegrain from the source, and timely and accurately checks the quality status of grain and oil in all aspects ofwarehousing, storage and delivery. Shenliang Quality Test has obtained the qualification certificate (CMA) fortesting and inspection institutions, and it is the first among domestic peers to include pesticide residues, heavy metalpollutants, mycotoxins and other hygienic indicators and taste value indicators in daily testing indicators, and hasthe detection ability of four types of indicators such as grain regular quality, storage quality, hygiene and eatingquality, which can meet the relevant quality inspection requirements of grain and oil products, and can accuratelyanalyze the nutritional ingredients and hygienic index of grain and determine its storage quality and eating quality.
5. Advantage of brand effect
The company regards “quality” as the cornerstone of establishing the enterprise brand, and takes “good service” and“livelihood guarantee” as the brand’s core value, and has created a batch of “reliable grain”, “reliable flour” and“reliable oil” brand systems, and has formed good brand effects. The company has been selected as one of the “Top500 Chinese Service Enterprises” for five times, and has won the “China Top Ten Grain and Oil Group”, “China Top100 Grain and Oil Enterprise”, “China’s Most Respected Grain and Oil Enterprise”, “National Top 100 MilitarySupply Stations”, “Key Agricultural Leading Enterprises in Guangdong Province” and “Shenzhen QualityBenchmark”, etc., and was awarded “Shenzhen Credit Enterprise”, “Shenzhen Old Brand”, “Leading EnterprisesStrongly Support Grain and Oil Industrialization”, etc., the market influence of “Shenliang Yushuiqing”,“Shenliang Duoxi”, “Guzhixiang”, “Clivia”, “Shenliang Fuxi” and other brands has gradually expanded, and thesubordinate flour company has won the title of “Shenzhen Old Brand”, and Shenliang Duoxi ChangxiangdaoDaohuaxiang rice has been selected as the first batch of “China Good Grain and Oil” products of the StateAdministration of Grain which is the only selected product in Guangdong Province. Its production and processingprocess conforms to the requirements for the evaluation of Shenzhen-supplied food, and it is allowed to use the
Shenzhen Standard · SZ Product logo
6. Comprehensive basic advantages
The company has a large-scale warehouse capacity in Shenzhen, it is the main force of Shenzhen's municipalgrain reserves and the “rice bag” trusted by the public. At present, its own grain storage capacity is about 400,000tons. Over the years, on the basis of giving priority to ensuring the government's macroeconomic regulation andcontrol of grain and guaranteeing the grain security, the company has been exploring the reform of the grain andoil reserve system and mechanism, fully utilizing the operational characteristics and advantages of “dynamicrotation” and fully participating in market competition. In the process of market-oriented self-management, thecompany continues to optimize and innovate the grain storage logistics mode and the grain and oil distributiondocking mode, so that the market competitiveness and regulation power have significantly enhanced, the mainchannel advantages of grain and oil supply have been further stabilized, and the main position of grain and oilindustry has further highlighted. The company has established long-term, extensive and diversified cooperativerelations with grain and oil traders, processors and end customers, and has built a wide business network andstable business channels. It has a high market share in the regional market and is rated as “Key AgriculturalLeading Enterprise of Guangdong Province” by the Department of Agriculture of Guangdong Province.
Section IV. Discussion and Analysis of the OperationI. Introduction
During the reporting period, in accordance with the annual key work and strategic planning objectives, SZCHFoods adhered to the goal of progress and stability, took subsequent integration after restructuring, andremodeling of the company’s strategy as the starting point and end point of business management, synchronouslydeployed, planned and implemented the work of party building and the central work, completed the annual targettasks, achieved good results, improved the development quality of the main business, steadily advanced theconstruction of strategic projects, and further improved the level of internal control.
1. Main business development
During the reporting period, the company based on its own advantages and industrial development, usedinformation technology, innovated and opened up the grain and oil products supply channels and trading methods,created a new pattern for tea and food business industry, built a multi-group and multi-channel food supply chainand service network, expanded the effective supply of medium- and high-end grain, oil, and food, and strive tomeet people's needs of "quality, diversity, nutrition, health, green, and convenience", and promoted thetransformation of grain and oil products from "eat full" to "eat well".
During the reporting period, the company continued to focus on food circulation services, actively build a supplychain, continuously extend the industrial chain, innovated business model, upgrade the industrial value chain, andcompleted grain and oil supply services with quality and quantity guaranteed, and the main grain and oil industrycontinued to develop well.
The company realized an overall loss reduction through integration and reconstruction of the tea and natural plantintensive processed, the beverage drinks and fine tea business during the reporting period.
2. Key projects
During the reporting period, the construction and operation of the company's Dongguan grain logistics nodeprogressed smoothly. The construction of grain logistics and terminal supporting projects, CDE warehouseproject, food deep processing projects and the first phase of the wharf have been steadily advanced according tothe plan and progress. The subordinate Dongguan logistics company promoted the establishment of safetyproduction standardization and achieved results, and was awarded the second-level enterprise of safety productionstandardization, and won the title of “National Food Security Publicity and Education Base” and “National KeyLeading Enterprise of Agricultural Industrialization”
During the reporting period, the company's northeast grain source base project star to operate. In order to speed upthe implementation of the “North Grain to the South, South Grain for Storage in North” strategy, the company setup the infrastructure office of the Northeast Grain Source Project to accelerate the construction of the grain sourcebase project. In June, the main project of the first phase of the Northeast Grain Source Base Project of 150,000tons has been started; at the end of October, the intelligent grain depot of SZCG Heilongjiang Grain IndustrialPark began to received grain.
3. Continuous innovation and development
During the reporting period, the company improved the efficiency of its operational management by increasingthe application of informatization innovation results to ensure the sustainable and healthy development ofenterprise. At present, the innovative R&D system with Shenliang research institute as the core and with thefar-reaching data, the product research and development center of flour company, the doximi quality inspectionR&D department, the technology center of reserve branch of SZCG, the tea product and technology research anddevelopment center as the key supports has been focusing on the innovation and research and development ofinformatization projects, guided by the operational management needs and the development of the industry's mostcutting-edge technology, planed and completed 14 informatization projects such as company management andcontrol and innovation management platform. Up to now, the company has applied for and obtained a total of 89patents and has 23 software copyrights.
4. Other key tasks
(1) During the reporting period, continue to improve the corporate governance. The company completed theorganizational restructuring, completed the changes of company name, business scope, registered capital andsecurities short name, and completed the reelection of the board of directors, the board of supervisors and seniormanagement personnel. In accordance with the new regulatory requirements and relevant regulations andprocedures, the company completed the combination and revision of the internal systems to promote theimprovement of corporate governance, and further enhanced the management effectiveness of the companythrough various effective measures.
(2) During the reporting period, after reorganization, the Company achieved a comprehensive integration in termsof system, business, personnel and culture etc. Open a new chapter of the development of tea+rice, formerbusiness of Shenshenbao achieved an overall loss reduction through the integration of assets and business.
(3) During the reporting period, the company further strengthened fund management and control, and inaccordance with the centralized management mode of “internal bank” funds, funds are being effectivelysupervised. The company further improved the CBS fund management information system function, and fullyopened the bank-corporate direct linkage of 9 banks, to set up bank account information database to realize thesystem supervision of banks and accounts.
(4) During the reporting period, the company further strengthened the risks, internal control and compliancemanagement. Built a standardized contracts library and formulated standard contract templates to cover various
business types; carried out internal control evaluation to promote construction and promote the company’s internalcontrol system to a higher level; extended the risk control chain to the client end and conducted creditinvestigations on new customers, escorted the company’s operation and development; realized the public releaseof procurement information of the company and its subsidiaries on the Sunshine Procurement Service Platform,and organized training on the Sunshine Procurement Platform.
(5)During the reporting period, the company created a new pattern of safe production work, further firmlyestablished the concept of safe development, strictly implemented the safe production responsibility system,consolidated the safety management foundation, checked hidden dangers, immediately reformed, and became thefirst enterprise in the municipal state-owned assets system to complete the “double” prevention mechanism andsafety standardization enterprises. The company closely followed the theme of “preventing risks, removing hiddendangers, and curbing accidents”, and solidly carried out safety inspections at the end of the year and at thebeginning of the year, safety inspections for “safe production month”, “special protection period of the NationalDay”, and “119” fire promotion week, and other special security activities.
In 2019, the company achieved a total operating income of 11,059,984,300 yuan, an increase of 2.80% over thesame period of the previous year; operating profit of 433,574,000 yuan, an increase of 27.07% over the sameperiod of the previous year; net profit attributable to shareholders of listed companies was 363,501,800 yuan, anincrease of 17.89% from a year earlier.II. Main business analysis
1. Introduction
See the “I-Introduction” in “Discussion and Analysis of the Operation”
2.Income and cost
(1) Constitute of operating income
In RMB
| 2019 | 2018 | Increase/decrease y-o-y (+,-) | |||
| Amount | Ratio in operation income | Amount | Ratio in operation income | ||
| Total operating income | 11,059,984,335.92 | 100% | 10,758,782,838.14 | 100% | 2.80% |
| According to industries | |||||
| Manufacturing | 627,951,990.26 | 5.68% | 695,553,870.44 | 6.46% | -9.72% |
| Wholesale and retail | 9,581,032,153.83 | 86.63% | 9,195,475,394.07 | 85.47% | 4.19% |
| Leasing business and Business services | 851,000,191.83 | 7.69% | 867,753,573.63 | 8.07% | -1.93% |
| According to products | |||||
| Food, beverage and tea processing | 277,107,818.38 | 2.51% | 279,394,901.18 | 2.59% | -0.82% |
| Grain and oil trading and processing | 9,931,876,325.71 | 89.80% | 9,611,634,363.33 | 89.34% | 3.33% |
| Grain and oil warehousing logistics service | 735,929,556.24 | 6.65% | 750,725,543.50 | 6.98% | -1.97% |
| Leasing and others | 115,070,635.59 | 1.04% | 117,028,030.13 | 1.09% | -1.67% |
| According to region | |||||
| Domestic market | 11,018,875,088.16 | 99.63% | 10,717,552,556.45 | 99.62% | 2.81% |
| Exportation | 41,109,247.76 | 0.37% | 41,230,281.69 | 0.38% | -0.29% |
(2) About the industries, products, or regions accounting for over 10% of the Company’s operating incomeor operating profit
√ Applicable □Not applicable
In RMB
| Operating income | Operating cost | Gross profit ratio | Increase/decrease of operating income y-o-y | Increase/decrease of operating cost y-o-y | Increase/decrease of gross profit ratio y-o-y | |
| According to industries | ||||||
| Wholesale and retai | 9,581,032,153.83 | 9,132,112,092.13 | 4.69% | 4.19% | 3.46% | 0.68% |
| According to products | ||||||
| Grain and oil trading and processing | 9,931,876,325.71 | 9,507,302,003.27 | 4.27% | 3.33% | 3.22% | 0.10% |
| According to region | ||||||
| Domestic market | 11,018,875,088.16 | 9,919,240,953.96 | 9.98% | 2.81% | 2.67% | 0.12% |
Under circumstances of adjustment in reporting period for statistic scope of main business data, adjusted main business based onlatest one year’s scope of period-end
□ Applicable √Not applicable
(3) Income from physical sales larger than income from labors
√ Yes □ No
| Industries | Item | Unit | 2019 | 2018 | Increase/decrease y-o-y (+,-) |
| Wholesale and retai | Sales volume | Ton | 3,989,774.55 | 4,100,188.31 | -2.69% |
| Output | Ton | ||||
| Storage | Ton | 1,164,854.73 | 1,004,124.93 | 16.01% |
Reasons for y-o-y relevant data with over 30% changes
□ Applicable√Not applicable
(4) Fulfillment of the Company’s signed significant sales contracts up to this reporting period
□ Applicable √Not applicable
(5) Constitute of operation cost
Classification of industries and products
In RMB
| Industries | Item | 2019 | 2018 | Increase/decrease y-o-y (+,-) | ||
| Amount | Ratio in operation cost | Amount | Ratio in operation cost | |||
| Wholesale and retai | Raw materials | 9,132,112,092.13 | 91.73% | 8,827,089,691.12 | 91.06% | 3.46% |
In RMB
| Products | Item | 2019 | 2018 | Increase/decrease y-o-y (+,-) | ||
| Amount | Ratio in operation cost | Amount | Ratio in operation cost | |||
| Grain and oil trading and processing | Raw materials | 9,483,295,218.23 | 95.26% | 9,185,461,514.60 | 94.76% | 3.24% |
| Grain and oil trading and processing | Labor wage | 2,962,957.54 | 0.03% | 2,659,530.58 | 0.03% | 11.41% |
| Grain and oil trading and processing | Cost of production | 21,043,827.50 | 0.21% | 22,757,384.98 | 0.23% | -7.53% |
ExplanationN/A
(6) Whether the changes in the scope of consolidation in Reporting Period
□Yes √No
(7) Material changes or adjustment for products or services of the Company in reporting period
□ Applicable √Not applicable
(8) Major sales and main suppliers
Major sales of the Company
| Total top five clients in sales (RMB) | 3,486,356,216.10 |
| Proportion in total annual sales volume for top five clients | 34.10% |
| Proportion in total annual sales volume for related sales among top five clients | 0.00% |
Top five clients of the Company
| Serial | Name | Sales (RMB) | Proportion in total annual sales |
| 1 | Client I | 1,664,016,328.38 | 16.28% |
| 2 | Client II | 499,257,250.38 | 4.88% |
| 3 | Client III | 495,867,402.95 | 4.85% |
| 4 | Client IV | 440,490,166.71 | 4.31% |
| 5 | Client V | 386,725,067.68 | 3.78% |
| Total | -- | 3,486,356,216.10 | 34.10% |
Other explanation on main clients
□ Applicable√Not applicable
Main suppliers of the Company
| Total purchase amount from top five suppliers (RMB) | 3,043,413,902.67 |
| Proportion in total annual purchase amount for top five suppliers | 29.93% |
| Proportion in total annual purchase amount from related purchase among top five suppliers | 0.00% |
Top five suppliers of the Company
| Serial | Name | Sum of purchase (RMB) | Proportion in total annual sum of purchase |
| 1 | Supplier I | 798,984,486.20 | 7.86% |
| 2 | Supplier II | 685,117,211.88 | 6.74% |
| 3 | Supplier III | 630,657,505.22 | 6.20% |
| 4 | Supplier IV | 517,710,431.56 | 5.09% |
| 5 | Supplier V | 410,944,267.81 | 4.04% |
| Total | -- | 3,043,413,902.67 | 29.93% |
Other explanation on main suppliers
□ Applicable √Not applicable
3. Expenses
In RMB
| 2019 | 2018 | Increase/decrease y-o-y (+,-) | Note of major changes | |
| Sales expenses | 250,657,691.24 | 255,021,072.54 | -1.71% | No major changes |
| Administration expenses | 260,693,015.60 | 246,543,836.47 | 5.74% | Office expenses and staff remuneration growth |
| Financial expenses | -636,614.92 | 10,131,313.25 | -106.28% | The interest expenses declined from a year earlier in the period, and interest income increased on a y-o-y basis which makes the reduction in financial expenses |
| R&D expenses | 13,599,526.83 | 10,979,464.64 | 23.86% | Expenses on R&D for tea products increased |
4.R &D investment
√Applicable □Not applicable
During the reporting period, the company developed and implemented a total of 14 information system projects,including “Grain Security Project” grain depot intelligent upgrade and reconstruction, official website upgradeand revision, shenliang cloud mobile intelligent management platform, innovation management platform, safetyproduction management system, expenses reporting management system, standard contract and standard customermanagement system, quality inspection digital laboratory (phase II); Berg Kitchen supply chain system (phase III),flour informatization phase III, Doximi warehouse management platform upgrade and reconstruction, cold chainsupply chain system (phase I), Hualian warehouse receipt management platform docking with EAS, Hualianwarehouse receipt management platform report development (phase I). Among them, the “Grain Security Project”grain depot intelligent upgrade and reconstruction project vigorously improved the grain depot intelligence levelby building comprehensive cabling business, intelligent in and out of warehouse system, intelligent warehousemanagement system, intelligent security system and related system integration in Pinghu Grain Depot, ShuguangGrain Depot and Sungang Grain Depot. SZCH’s account management system helped to achieve accuratetraceability; shenliang cloud mobile intelligent platform provided strong technical supports for enterprises toestablish standardized and efficient management and control systems.
R&D investment of the Company
| 2019 | 2018 | Change ratio(+,-) | |
| Number of R&D (people) | 88 | 67 | 31.34% |
| Ratio of number of R&D | 7.45% | 6.11% | 1.34% |
| R&D investment (Yuan) | 38,855,259.05 | 10,979,464.64 | 253.89% |
| investment accounted for operation income | 0.35% | 0.10% | 0.25% |
| R&D investment capitalization (Yuan) | 0.00 | 0.00 | 0.00% |
| Capitalization R&D investment accounted for R&D investment | 0.00% | 0.00% | 0.00% |
The reason of great changes in the proportion of total R&D investment accounted for operation income than last year
□ Applicable √Not applicable
Reason for the great change in R&D investment capitalization rate and rational description
□ Applicable √Not applicable
5. Cash flow
In RMB
| Item | 2019 | 2018 | Increase/decrease y-o-y (+,-) |
| Subtotal of cash in-flow from operation activity | 11,472,769,827.75 | 11,015,888,418.12 | 4.15% |
| Subtotal of cash out-flow from operation activity | 11,282,716,003.78 | 10,716,784,782.54 | 5.28% |
| Net cash flow arising from operating activities | 190,053,823.97 | 299,103,635.58 | -36.46% |
| Subtotal of cash in-flow from investment activity | 526,554,118.48 | 195,610,693.45 | 169.18% |
| Subtotal of cash out-flow from investment activity | 1,318,138,870.97 | 669,839,107.07 | 96.78% |
| Net cash flow from investment activity | -791,584,752.49 | -474,228,413.62 | -66.92% |
| Subtotal of cash in-flow from financing activity | 437,425,075.72 | 562,240,181.56 | -22.20% |
| Subtotal of cash out-flow from financing activity | 312,922,187.97 | 302,433,961.14 | 3.47% |
| Net cash flow from financing activity | 124,502,887.75 | 259,806,220.42 | -52.08% |
| Net increased amount of cash and cash equivalent | -476,683,581.83 | 87,197,600.23 | -646.67% |
Reasons for y-o-y relevant data with major changes
√ Applicable□Not applicable
Net cash flow arising from operating activities: decreased on a y-o-y basis, mainly because the Company increased its grain and oilinventories, and the net cash in-flow between sales and purchases decline from a year earlier; the net cash out-flow betweenpayments to other operating activities and receipt of other operating activities increased on a y-o-y basis.
Net cash flow arising from investment activities: decreased on a y-o-y basis, mainly because the investment for Shenliang DongguanGrain Logistics Nodes Project construction increased; and net cash out-flow from investment of bank financial products increased;
Net cash flow arising from financing activities: decreased on a y-o-y basis, mainly due to the distribution of cash dividend to allshareholders for 2019.
Reasons of major difference between the cash flow of operation activity in report period and net profit of the Company
□ Applicable √Not applicable
III. Analysis of the non-main business
√Applicable □Not applicable
In RMB
| Amount | Ratio in total profit | Description of formation | Whether be sustainable | |
| Investment income | 9,838,224.64 | 2.29% | Unsustainable | |
| Gains/losses of fair value variation | 41,281.76 | 0.01% | Unsustainable | |
| Asset impairment | -158,272,990.37 | -36.89% | Mainly resulted by the provision for falling prices of inventory goods. When selling the goods for which provision has been made for inventory depreciation, the current cost will be offset against the provision for inventory depreciation which has been actually carried forward. | Unsustainable |
| Non-operating income | 1,256,705.25 | 0.29% | Unsustainable | |
| Non-operating expense | 5,801,306.78 | 1.35% | Unsustainable | |
| Credit impairment | 3,496,756.37 | 0.82% | Unsustainable |
IV. Assets and liability
1. Major changes of assets composition
Implement the new financial instrument standards, new revenue standards or new leasing standards for the first time since 2020 andadjust the relevant items of the financial statement at the beginning of the implementation year
√Applicable □Not applicable
In RMB
| Year-end of 2019 | Year-begin of 2019 | Ratio changes | Notes of major changes | |||
| Amount | Ratio in total assets | Amount | Ratio in total assets | |||
| Monetary fund | 154,954,757.85 | 2.29% | 631,638,339.68 | 9.76% | -7.47% | The cash expenditures for investment activities such as infrastructure construction increased from a year earlier, and cash paid for purchasing short-term financial products increased, than the amount of money and funds held at end of the period has a big decrease from the beginning of the period |
| Account receivable | 338,687,766.68 | 5.00% | 473,646,886.64 | 7.32% | -2.32% | |
| Inventory | 3,064,701,212.14 | 45.23% | 2,811,802,600.19 | 43.47% | 1.76% | The Company increased grain stocks according to the market condition judgement |
| Investment real estate | 269,704,937.17 | 3.98% | 282,622,184.92 | 4.37% | -0.39% | |
| Long-term equity investment | 73,361,312.10 | 1.08% | 70,999,666.81 | 1.10% | -0.02% | |
| Fix assets | 945,042,032.69 | 13.95% | 993,136,743.51 | 15.35% | -1.40% | |
| Construction in progress | 771,971,469.43 | 11.39% | 186,586,135.06 | 2.88% | 8.51% | Investment for node project engineering from Shenliang Dongguan Logistic and construction in progress of Shuangyashan grain-source base project increased |
| Short-term loans | 23,595,000.00 | 0.35% | 91,600,000.00 | 1.42% | -1.07% | |
| Long-term loans | 835,912,556.41 | 12.34% | 516,687,791.66 | 7.99% | 4.35% | The bank long-term loans use for node project engineering from Shenliang Dongguan Logistic increased. |
2. Assets and liability measured by fair value
√ Applicable □Not applicable
In RMB
| Item | Amount at the beginning period | Changes of fair value gains/losses in this period | Accumulative changes of fair value reckoned into equity | Devaluation of withdrawing in the period | Amount of purchase in the period | Amount of sale in the period | Other changes | Amount in the end of period |
| Financial assets | ||||||||
| 1.Tradable financial assets (excluding derivative financial assets) | 1,124,927.96 | 41,281.76 | 1,166,209.72 | |||||
| Other non-current financial assets | 57,500.00 | 57,500.00 | ||||||
| Aforementioned total | 1,182,427.96 | 41,281.76 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 1,223,709.72 |
| Financial liabilities | 0.00 | 0.00 | ||||||
Other changeWhether there have major changes on measurement attributes for main assets of the Company in report period or not
□ Yes √No
3. The assets rights restricted till end of the period
| Item | Book value at period-end | Reasons for restriction |
| Construction in progress | 120,065,528.37 | According to the long-term loan mortgage contract signed by Dongguan Logistics, a subsidiary of the Company, and Agricultural Development Bank, Dongguan Logistics mortgaged the land (DFGY (2014) DT No. 6) of No. 32, Jianshe Road, Masan Village, Machong Town, Dongguan City and the grain storage and terminal facilities to be built and other buildings and structures on the ground to Agricultural Development Bank as collateral for the loan. |
| Fixed assets | 366,455,515.01 | |
| Intangible assets | 86,892,299.35 | According to the loan contract of “Guangdong DG 2017 NGDZ No. 006” signed by Dongguan Food Industry Park, a subsidiary of the Company, and Bank of Communications Guangdong Branch, Dongguan Food Industry Park mortgaged its two pieces of lands (DFGY (2009) DT No. 190) and (DFGY (2012) DT No. 152) to Bank of Communications Guangdong Branch as collateral for the borrowing. |
| Intangible assets | 36,584,762.87 | According to the long-term loan mortgage contract signed by Dongguan Logistics, a subsidiary of the Company, and Dongguan branch of Agricultural Development Bank, |
Dongguan Logistics mortgaged the land “Yue (2016) Dongguan Real Estate Property No.0028527” of Jingang (S) Road, Zhangpeng Village, Machong Town, Dongguan City toDongguan branch of Agricultural Development Bank as collateral for the loan.Total
| Total | 609,998,105.60 |
V. Investment analysis
1. Overall situation
√ Applicable□Not applicable
| Investment in reporting period (Yuan) | Investment in the same period of last year (Yuan) | Change scope |
| 624,359,305.05 | 294,171,532.43 | 112.24% |
2. The major equity investment obtained in the reporting period
□Applicable √Not applicable
3. The major non-equity investment doing in the reporting period
√ Applicable □Not applicable
In RMB
| Item | Investment ways | Whether it is the investment for fixed assets (Y/N) | Industry with the investment involved | Amount input in the period | Accumulated actual input as of the end of reporting period | Capital resources | Progress | Estimated revenue | Income accumulated at end of the reporting period | Reasons for failure to achieve planned progress and expected benefits | Disclosure date (if applicable) | Disclosure index (if applicable) |
| Grain storage and wharf complementary engineering of Dongguan Shenliang Logistics Co., Ltd. | Self-build | Y | Storage and wharf | 66,525,877.51 | 368,131,651.20 | Owned funds and bank loans | 92.03% | Start-up of the wharf project later than expected |
| Grain storage and wharf complementary engineering of Dongguan Shenliang Logistics Co., Ltd.(Phase II) | Self-build | Y | Warehouse logistic | 0.00 | 179,679,302.57 | Owned funds and bank loans | 100.00% | 43,363,000.00 | 56,571,352.91 | - | ||
| Food logistics and wharf matching project of Dongguan Shenliang Logistics Co., Ltd. | Self-build | Y | Warehouse logistic | 36,079,011.99 | 47,150,234.91 | Owned funds and bank loans | 9.58% | Adjustment of construction scheme |
| Warehouse logistic distribution center of Dongguan International Food Industrial Park Development Co., Ltd. | Self-build | Y | Warehouse logistic | 358,276,257.39 | 629,713,847.61 | Owned funds and bank loans | 64.99% | 37,108,900.00 | Adjustment of construction scheme | |||
| Food processing project of Dongguan SZCG Oil & Food Trade Co., Ltd. | Self-build | Y | Flour processing | 80,792,090.56 | 120,065,528.37 | Owned funds and bank loans | 41.12% | - | ||||
| Land use right | Self-build | N | Construction | 26,706,067.60 | 243,997,060.82 | Owned funds | - | |||||
| Total | -- | -- | -- | 568,379,305.05 | 1,588,737,625.48 | -- | -- | 80,471,900.00 | 56,571,352.91 | -- | -- | -- |
4. Financial assets investment
(1) Securities investment
√ Applicable□Not applicable
In RMB
| Variety of securities | Code of securities | Short form of securities | Initial investment cost | Accounting measurement model | Book value at the beginning of the period | Changes in fair value of the current profit and loss | Cumulative fair value changes in equity | Current purchase amount | Current sales amount | Profit and loss in the Reporting Period | Book value at the end of the period | Accounting subject | Capital Source |
| Domestic and overseas stock | 000017 | Zhonghua-A | 0.00 | Fair value measurements | 1,124,927.96 | 41,281.76 | 0.00 | 0.00 | 0.00 | 41,281.76 | 1,166,209.72 | Tradable financial assets | Debt rescheduled shares |
| Total | 0.00 | -- | 1,124,927.96 | 41,281.76 | 0.00 | 0.00 | 0.00 | 41,281.76 | 1,166,209.72 | -- | -- | ||
| Disclosure date of securities investment approval of the Board | Not applicable | ||||||||||||
| Disclosure date of securities investment approval of the Shareholder Meeting (if applicable) | Not applicable | ||||||||||||
(2) Derivative investment
□ Applicable√Not applicable
The Company has no derivatives investment in the Period
5. Application of raised proceeds
□ Applicable√Not applicable
The Company has no application of raised proceeds in the PeriodVI. Sales of major assets and equity
1. Sales of major assets
□ Applicable √Not applicable
The Company had no sales of major assets in the reporting period.
2. Sales of major equity
□ Applicable √Not applicable
VII. Analysis of main holding Company and stock-jointly companies
√ Applicable□Not applicable
Particular about main subsidiaries and stock-jointly companies net profit over 10%
In RMB
| Company name | Type | Main business | Register capital | Total assets | Net assets | Operating income | Operating profit | Net profit |
| Shenzhen Cereals Group Co., Ltd | Subsidiary | Grain & oil trading processing,Grain and oil reserve service | 1,530,000,000.00 | 6,115,541,913.04 | 3,702,927,700.51 | 10,773,890,140.64 | 501,846,436.55 | 464,971,760.74 |
| Shenzhen Hualian Grain & Oil Trade Co., ltd. | Subsidiary | Grain & oil trading | 31,180,000.00 | 972,286,819.64 | 195,145,899.14 | 4,140,987,197.94 | 75,478,030.41 | 74,291,004.42 |
| Shenzhen Flour Co., Ltd | Subsidiary | Grain & oil trading processing | 30,000,000.00 | 943,704,824.79 | 202,466,265.35 | 3,118,961,381.26 | 70,926,189.82 | 70,662,790.02 |
Particular about subsidiaries obtained or disposed in report period
√ Applicable □Not applicable
| Company name | The way of getting and treating subsidiary in the reporting | Influence on overall product and performance |
| Hangzhou Chunshi Network Technology Co., Ltd. | Cancellation | Impact on net profit of the Company for the current year was -58000 yuan. |
Explanation on main holding/stock-jointly enterprise:
Shenzhen Cereals Group Co., Ltd.: business scope: general business items: grain and oil purchase and sales, grain and oil storage andsupply of military grain; grain and oil and products management and processing (operated by branches); operation and processing offeed (operated by outsourcing); investment in grain and oil, feed logistics projects; establishing grain and oil and feed trading market(including e-commerce market) (market license is also available); storage (operated by branches); development, operation andmanagement of free property; providing management services for hotels; investing and setting up industries (specific projects areseparately declared); domestic trade; engaging in import and export business; E-commerce and information construction; and graincirculation service. Licensed business items: the following projects shall be operated only with the relevant examination and approvaldocuments if they are involved in obtaining approval: information services (internet information service only); general freight,professional transport (refrigerated preservation). Register capital was 1,530,000,000.00 Yuan. Ended as this period, total assetsamounted as 6,115,541,913.04 Yuan, and net assets amounting to3,702,927,700.51Yuan, shareholders’ equity attributable to parentCompany is 3,513,005,719.58 Yuan; in the reporting period, achieved operation income, net profit and net profit attributable toshareholder of parent Company as 10,773,890,140.64 Yuan, 464,971,760.74 Yuan and 442,850,937.65 Yuan respectively.
Shenzhen Hualian Grain and Oil Trade Co., Ltd.: Business scope: general business items: domestic trade (except for projects thatlaws, administrative regulations, and decisions of the State Council require approval before registration); engaging in import andexport business (except for projects prohibited by laws, administrative regulations, and decision of the State Council, restrictedprojects can be operated only after obtaining permission); online feed sales; information consultation, self-owned housing leasing(excluding talent agency services and other restricted items); international freight forwarding, domestic freight forwarding (can onlybe operated after being approved by the transport department if laws, administrative regulations, State Council decision require theapproval of transport department); Licensed business items: following items shall be operated only with the relevant examination andapproval documents if they are involved in obtaining approval: purchase and sale of grain and oil, online sales of grain and oil;information service business (internet information service business only). Register capital was 31,180,000.00 Yuan. Ended as thisperiod, total assets amounted as 972,286,819.64Yuan, and net assets amounting to 195,145,899.14 Yuan, shareholders’ equityattributable to parent Company is 195,145,899.14 Yuan.In the reporting period, achieved operation income is 4,140,987,197.94Yuan,net profit is 74,291,004.42 Yuan and net profit attributable to parent Company as74,291,004.42, Yuan respectively.
Shenzhen Flour Co., Ltd.: business scope: general business items: hardware and electrical equipment, chemical products (excludinghazardous chemicals and restricted items), auto parts, purchase and sales of construction materials; self-operated import and exportbusiness (carry out according to the provisions of the registration certificate SMGDZZ No. 76); domestic trade (excluding franchise,exclusive control, monopoly commodities); wheat wholesale and retail. Licensed business items: following items shall be operatedonly with the relevant examination and approval documents if they are involved in obtaining approval: flour processing andproduction. Register capital was 30,000,000.00 Yuan. Ended as this period, total assets amounted as 943,704,824.79 Yuan, and netassets amounting to 202,466,265.35 Yuan, shareholders’ equity attributable to parent Company is 202,466,265.35 Yuan;in thereporting period, achieved operation income, net profit and net profit attributable to parent Company as 3,118,961,381.26 Yuan,70,662,790.02 Yuan and 70,662,790.02 Yuan respectively.
VIII. Structured vehicle controlled by the Company
□ Applicable√Not applicable
IX. Prospects on future development
(i) Development trend and competition layout of the industry
1. The development trend of industry
In 2019, the domestic wheat planting structure, regional layout and variety structure were further optimized, andthe wheat yields and quality improved. According to data released by the National Bureau of Statistics, domesticwheat yield in 2019 was 133.6 million tons, an increase of 1.6% over 2018. And the Company has increased itswheat imports in countries along the One Belt and One Road in 2019. According to the spirit of the 10
th
session ofthe Central Committee for comprehensively deepening reform in September 2019, in the future, the domesticpolicies will promote the integration of the three chains of the food industry chain, value chain and supplyingchain. Building a high-quality wheat and flour industry chain system to better meet the domestic consumerdemand.
The domestic rice yield in 2019 was 209.6 million tons, pattern of supply and demand is loose, the market price
center of gravity has moved down obviously, and the sales pressure of rice market in some regions is greater. In2019, domestic rice imports decreased significantly on a year-on-year basis, but exports increased significantly ona year-on-year basis; our country changed from a rice net importer to a net exporter. The national standard of rice(GB/T1354-2018) was officially implemented since 1 May 2019, to promote and optimized the adjustment of riceplanting structure and accelerate the transformation and upgrading of the industry.
In 2019, the overall supply of domestic corn was loose, however, affected by the African swine fever and the slowdevelopment of corn deep processing industry, the demand plummets, and the corn industry may enter the stage ofoversupply in a short term. Reasonably guiding market expectation will be the top priority of corn industry inrecent years.
The domestic grain total output in 2019 was 663.84 million tons, an increase of 5.94 million tons or 0.9% from2018, reached at all-time highs. China’s production of grain has shifted from increasing production to improvingquality, and the building of a modern grain industry system has been put on the agenda. The grain industrialeconomy has become a new economic growth point. However, there is still a problem of insufficient innovationability in grain industry, and there is still room for optimization of industrial structure.
The production and consumption of the tea industry in the country continued to maintain an overall growth trendin 2019. However, due to the impact of the macroeconomic environment and weak consumption, the problem ofoverproduction of tea in the country has become increasingly prominent. Younger products and diversifiedmarketing are still the development trend of the tea industry.
2. The competitive landscape of the industry
At present, the domestic grain and oil trade processing logistics industry is a full circulation field, with a highdegree of marketization, many enterprises participating in the competition. The central enterprises and large localgrain enterprises have relatively complete storage and logistics facilities, enjoys a number of national policysupport; in recent year, a large number of excellent national and regional private grain enterprise stand out; withthe development of grain marketization in China, foreign-funded grain enterprises are emerging in China’s grainmarket. Relying on a rich resources, abundant financial strength and mature management experience, thecompetition in grain and oil industry is further intensified.
According to the national food security medium and long term program outline (2008-2020), the annual foodconsumption of Shenzhen is about 4.65 million tons. The food industry in Shenzhen is booming, and there aremany grain and oil processing enterprises with certain scale and many small and medium-sized enterprises in theregion. With the development of double-zone construction, the urban population in pearl river delta is increasing,people’s living standard is improving and the food market competition is orderly and unprecedented fierce.
(ii) The company’s development strategy
SZCH will focus on the grain and tea business, in the process of integration and development, conform to thecountry’s new development requirements for the grain industry, i.e. “agriculture head and industry tail”, “grainhead and food tail”, “three chains integration”, etc., seize the major historical opportunities of current significanthistorical opportunities such as the construction of the Guangdong - Hong Kong - Macao Greater Bay Area andthe construction of the Shenzhen Pilot Demonstration Area, focus on the succession of the company’s “13
th
Five-Year Plan” and “14
thFive-Year Plan”, and innovate the development strategy of “one chain, two parks and Nplatforms”, and focus on creating the “smart grain, oil and food supply chain quality service providers” with the“high-quality grain source base + regional comprehensive park + urban distribution center”.
(iii) Operation plan for year of 2020Looking forward to 2020, adhere to the central government’s general tone of “agriculture head and industry tail”,“grain head and food tail”, “three chains integration”, firm the strategic goals of “creating the smart grain, oil andfood supply chain quality service providers” unswervingly, accelerate the implementation of the “one chain, twoparks and N platforms” strategy, take “technology prospering grain” and “talent prospering grain” as supports,keep a foothold on the characteristics of Shenzhen’s pure sales area and port city, combine with the “One Belt andOne Road” to focus on expanding international grain sources, and take advantage of the port-surrounding locationto build the “eastern and southern grain coastal channel”. At the same time, there are the following seven workplans:
Firstly, in term of strategic implementation: work out the strategic plan for the “14
th
five-year” plan and formulatea precise and feasible strategic blueprint and strategic measures for transformation and development; focusing onthe strategic target of “creating a high-quality service provider of smart grain, oil and food supply chain”,accelerate the formulation and refinement of the implementation path of the “N platform of One Chain and TwoParks”; actively push forward the extension of the grain and oil industry chain to the food end, strive to upgradethe value chain, and built a smart supply chain.
Secondly, in term of major projects: accelerate the construction of grain logistics nodes in Shengliang Dongguan,further improve the terminal operation level and overall service ability; promoting the construction of supportingprojects of the northeast grain source base; continue to promote and expand the influence of the grain tradingnetwork market; actively promote the construction of military-civilian integration projects; vigorously expand themicro-complex market of tea and rice phase; speed up the construction of a “digital laboratory” for qualityinspection of deep grain.
Thirdly, in term of innovation-driven: Keep up with the policy guidance, and actively organize the application ofinnovation projects; start the construction of research centers, and continue to do a good job in innovation projectmanagement; strengthen the company’s innovation system, deepen the promotion of brand construction andcomprehensively strengthen intellectual property protection; do multi-pronged measures at the same time, and
expand innovation cooperation and external channels.
Fourthly, in term of basic management: With “culture + strategy” as the driving force, deepen culture prosperingdevelopment and culture strengthening enterprise; further improve the company’s organizational structure and jobsettings, establish a sound mechanism; with the help of information technology, continuously improve the fundsmanagement level; continue to promote contract standardization projects and further expand and improve thestandard contract library; relay the internal control self-evaluation, and comprehensively improve the company’sinternal control system.
Fifthly, in term of production safety: Improve the safety system organization structure, grasp the implementationof the safety responsibility system; focus on promoting the construction of safety production informatization;continue to carry out safety production standardization and double prevention mechanism construction.
Sixth, in term of strengthen party building: Deeply study and implement the spirit of the Fourth Plenary Session ofthe 19th
Central Committee of the Party, and gather strength for the high-quality development of enterprises;continue to deepen the educational achievements of “not forgetting the original intention and remembering themission well”, promote comprehensively and strictly strengthening party self-discipline to developing in depthand breadth; improve the political stance and the standard system of party building at the grassroots level; broadenpublicity channels and strengthen theoretical armaments; strengthen efficiency monitoring and prevent corruptionrisks; improve the ability to perform duties and consolidate joint supervision.
Seventh, in term of social responsibility: “Ensure national food security and firmly hold Chinese people’s ricebowls in their own hands!” Keep food security, promote development, and take proactive actions to highlight therole of state-owned enterprises; better serve people’s livelihood needs and enhance urban value.
(iv) Possible risksIn 2020,the outbreak of COVID-19 epidemic has spread around the world and had an impact on the globaleconomy. The international trade industry supply chain and other aspects have been affected. In view of thepossible market and business risks, on the one hand, the company has formulated the procurement plan for theyear, actively expanded the procurement channels, and ensured adequate and orderly supply of grain; on the otherhand, continue to strengthen the communication with the upstream and downstream customers of the industrialchain, and vigorously expand the sales channels, focusing on the needs of customers, we will deeply cultivate thebrand and services, enhance the brand value and competitiveness of the company, minimized the impact of theepidemic on the company as much as possible.
X. Research reception, communication and interview activities
1. Registration form of research reception, communication and interview in the Period
□ Applicable √Not applicable
There were no research reception, communication and interview activities occurred in the period
Section V. Important EventsI. Profit distribution plan of common stock and capitalizing of common reserves planFormulation, Implementation and Adjustment of common stock Profit Distribution Policy Especially Cash Dividend policy duringthe Reporting Period
√ Applicable □Not applicable
In reporting period, no adjustment and change happened to profit distribution rule.
| Special explanation on cash dividend policy | |
| Satisfy regulations of General Meeting or requirement of Article of Association (Y/N): | Y |
| Well-defined and clearly dividend standards and proportion (Y/N): | Y |
| Completed relevant decision-making process and mechanism (Y/N): | Y |
| Independent directors perform duties completely and play a proper role (Y/N): | Y |
| Minority shareholders have opportunity to express opinions and demands totally and their legal rights are fully protected (Y/N): | Y |
| Condition and procedures are compliance and transparent while the cash bonus policy adjusted or changed (Y/N): | Y |
Profit distribution plan (pre-plan) of common stock and capitalizing of common reserves plan (pre-plan) in latest three years(including the reporting period)The equity distribution plan for 2017: No cash dividend, no bonus shares as well as no share converted from capital reserve.The equity distribution plan for 2018: Based on share capital of 1,152,535,254 on 31 Dec 2018, distributed 1 Yuan (tax included) forevery 10-share to all shareholders with zero share bonus (tax included), and no share converted from capital reserve.The equity distribution plan for 2019: Based on share capital of 1,152,535,254 on 31 Dec 2019, distributed 2 Yuan (tax included) forevery 10-share to all shareholders with zero share bonus (tax included), and no share converted from capital reserve.
Particulars for cash dividend of common share for 3 years (current period included)
In RMB
| Year for bonus shares | Amount for cash bonus (tax included) | Net profit attributable to common stock shareholders of listed company in consolidation statement for bonus year | Ratio of the cash bonus in net profit attributable to common stock shareholders of listed company contained in consolidation | Proportion for cash bonus by other ways(i.e. share buy-backs) | Ratio of the cash bonus by other ways in net profit attributable to common stock shareholders of listed company contained in consolidation | Total cash bonus (including other ways) | Ratio of the total cash bonus (other ways included) in net profit attributable to common stock shareholders of listed company contained in |
| statement | statement | consolidation statement | |||||
| 2019 | 230,507,050.80 | 363,501,809.52 | 63.41% | 0.00 | 0.00% | 230,507,050.80 | 63.41% |
| 2018 | 115,253,525.40 | 308,331,032.44 | 37.38% | 0.00 | 0.00% | 115,253,525.40 | 37.38% |
| 2017 | 0.00 | 359,174,263.44 | 0.00% | 0.00 | 0.00% | 0.00 | 0.00% |
The Company gains profits in reporting period and the retained profit of common stock shareholders provided by parent Company ispositive but no plan of cash dividend proposed of common stock
□ Applicable √Not applicable
II. Profit distribution plan and capitalizing of common reserves plan for the Period
√ Applicable □Not applicable
| Bonus shares for every 10-share (Share) | 0 |
| Dividends for every 10-share (RMB) (Tax included) | 2 |
| Shares transferred from every 10 shares (Share) | 0 |
| Equity base of distribution plan (Share) | 1,152,535,254 |
| Cash bonus distribution (RMB) (Tax included) | 230,507,050.80 |
| Cash bonus distribution in other ways (i.e. share buy-backs) (RMB) | 0.00 |
| Total cash bonus (including other ways) (RMB) | 230,507,050.80 |
| Distributable profits (RMB) | 257,672,677.94 |
| Ratio of total cash dividend (other ways included) in total profit distribution | 100% |
| Cash dividend | |
| The Company is in a development stage and has the arrangement of major capital expenses, ratio of cash dividend in profit distribution should reach a minimum of 20% while the profit distributed. | |
| Detailed explanation on profit distribution or capital accumulation fund conversion plan | |
| After audited by BDO China Shu Lun Pan Certified Public Accountant LLP, in consolidate statement, the net profit attributable to shareholders of parent company amounted as 363,501,809.52 yuan in 2019, net profit of parent company was 230,466,907.81 yuan; Ended as 31st December 2019, the profit of parent company that can be distributed for shareholders was 257,672,677.94 yuan, balance of consolidate capital public reserves was 1,422,892,729.36 yuan. In line with relevant regulations and Article of Association, and consider the interest of shareholders, BOD plans to submit the equity distribution plan for year of 2019 to shareholders general meeting: based on total share capital 1,152,535,254 shares of the Company on 31st December 2019, distributed 2 Yuan (tax included) for every 10-share to all shareholders with zero share bonus (tax included), and no share converted from capital reserve | |
III. Implementation of commitment
1. Commitments that the actual controller, shareholders, related party, buyer and the Company havefulfilled during the reporting period and have not yet fulfilled by the end of reporting period
√ Applicable □Not applicable
| Commitments | Commitment party | Type of commitments | Content of commitments | Commitment date | Commitment term | Implementation |
| Commitments for share merger reform | ||||||
| Commitments in report of acquisition or equity change | ||||||
| Commitments in assets reorganization | Shenzhen Fude State Capital Operation Co., Ltd. | Other commitments | Commitment to non-normal business enterprises: For non-normal business enterprises under Shenzhen Cereals Group (including but not limited to enterprises that have been revoked business licenses, discontinued operation, etc.), the committed person will fully assist, urge and promote Shenzhen Cereals Group to implement the corresponding write-off procedures. After the completion of this reorganization, if Shenzhen Cereals Group or the listed company is called to account, receives administrative punishment or suffers any losses due to the abnormal operation of the non-normal business enterprises or the failure to handle write-off procedures in time, the committed person will bear the relevant legal liability, and fully compensate the listed company and the target company within 30 working days after the actual loss occurs. | 2018-03-23 | Implement as promised | Normal performance |
| Shenzhen Fude State Capital Operation Co., Ltd. | Other commitments | Relevant Commitments Regarding the Existence of Flaws in Leased Property: The leased house property of Shenzhen Cereals Group and its holding subsidiaries has the following conditions: (1) The lessor has not provided the ownership documentary evidence of the property and/or the documentary evidence proving the lessor has the right to rent out the house property. (2) The lease term of part of the leased house property is more than 20 years; (3) Shenzhen Cereals Group and its subsidiaries sublet part of the leased house property to a third party without the consent of the lessor; (4) The leased house property of Shenzhen Cereals Group and its holding subsidiary has not been registered for the housing lease. If Shenzhen Cereals Group and its holding subsidiaries are imposed any form of punishment by the relevant government departments or assume any form of legal responsibility, or occur any losses or expenses because their leased place and / or house property do not comply with relevant laws and regulations, the committed person will be willing to bear any losses, damages, claims, costs and expenses incurred, suffered and assumed by Shenzhen Cereals Group and its holding subsidiaries, and protect Shenzhen Cereals Group and its holding subsidiaries from damages. In addition, the committed person will support Shenzhen Cereals Group and its holding subsidiaries to actively advocate their rights to the corresponding parties to maximumly maintain and guarantee the interests of Shenzhen Cereals Group and the listed companies. | 2018-03-23 | Implement as promised | Normal performance |
ShenzhenFude StateCapitalOperationCo., Ltd.
Othercommitments
Commitment Letter on Flaws in House Property and Land: In the casethat some of the house properties held by Shenzhen Cereals Group failto rename the obligee of the property ownership certificate, thecommitted person will fully assist, urge and promote Shenzhen CerealsGroup or its subsidiaries to go through the formalities. After thecompletion of this reorganization, if Shenzhen Cereals Group or thelisted company is called to account, receives administrative punishmentor suffers any losses due to the failure to rename the obligee of theproperty ownership certificate, the committed person will bear therelevant legal liability, and fully compensate the listed company andShenzhen Cereals Group within 30 working days after the actual lossoccurs. In view of the fact that some house properties held by ShenzhenCereals Group fail to complete the registration procedures forownership transfer, the committed person will fully assist, urge andpromote Shenzhen Cereals Group to complete the relevant transferprocedures. After the completion of this reorganization, if ShenzhenCereals Group or the listed company is called to account, receivesadministrative punishment or suffers any losses due to the failure torename the obligee of above-mentioned property, the committed personwill bear the relevant legal liability, and fully compensate the listedcompany and Shenzhen Cereals Group within 30 working days afterthe actual loss occurs. In response to the conversion of non-marketcommercial housing held by Shenzhen Cereals Group into marketcommercial housing, the committed person will fully assist, urge andpromote Shenzhen Cereals Group to go through the formalities. Afterthe completion of this reorganization, if Shenzhen Cereals Group or thelisted company is called to account, receives administrative punishmentor suffers any losses due to the failure to complete the conversion ofnon-market commercial housing into market commercial housing, thecommitted person will bear the relevant legal liability, and fullycompensate the listed company and Shenzhen Cereals Group within 30working days after the actual loss occurs. In view of the fact that somehouse properties of Shenzhen Cereals Group have not been renewed forthe land use period, the committed person will fully assist, urge andpromote Shenzhen Cereals Group to renew the corresponding land useright period. After the completion of this reorganization, if ShenzhenCereals Group or the listed company is called to account, receivesadministrative punishment or suffers any losses due to the failure torenew the land use right period, the committed person will bear therelevant legal liability, and fully compensate the listed company andShenzhen Cereals Group within 30 working days after the actual lossoccurs. In view of the fact that some house properties of ShenzhenCereals Group have not been registered for ownership transfer orrenewed the land use period, the committed person will fully assist,urge and promote Shenzhen Cereals Group to handle the correspondingland use rights renewal and ownership transfer registration procedures.After the completion of the reorganization, if Shenzhen Cereals Groupor the listed company is called to account, receives administrativepunishment or suffers any losses due to the failure to complete theabove-mentioned land use right renewal and ownership transfer
2018-03-23
Implement aspromised
Normalperformance
| Shenzhen Fude State Capital Operation Co., Ltd. | Other commitments | Commitment Letter on the Company’s System Reform and System Evaluation of Shenzhen Cereals Group in 1998: After the completion of this restructuring, if Shenzhen Cereals Group or the listed company is called to account, receives administrative punishment or suffers any losses as the system reform is not evaluated or other reasons related to this reform, the committed person will bear the relevant legal liability, and fully compensate the listed company and Shenzhen Cereals Group within 30 working days after the actual loss occurs. | 2018-03-23 | Implement as promised | Normal performance |
| Shenzhen Fude State Capital Operation Co., Ltd. | Other commitments | Commitment on the Adjustment of the Main Business: Within 24 months after the completion of the transaction, the Company has no plan, intention or arrangement to divest the main assets related to the existing business of the listed company through the shareholders’ meeting and the board of directors of the listed company. The listed company will strive to improve the management level based on the asset structure and business development after the completion of the transaction, and do its best to complete the business integration and coordination after the completion of the reorganization, and create greater value for shareholders. | 2018-03-23 | Implement as promised | Normal performance |
| Shenzhen Fude State Capital Operation Co., Ltd. | Other commitments | Commitment to Maintain the Position of Controlling Shareholders of Listed Companies: Within 60 months from the date of completion of this transaction, the Company promises not to voluntarily give up the controlling shareholder status in the listed company, and guarantees that the controlling shareholder status of the listed company will not be changed due to reasons of the Company during this period, nor assists any other party to seek the controlling shareholder status of the listed company. Within 60 months from the date of completion of this transaction, the Company will not take the initiative to change the status of the controlling shareholder of the listed company through any actions including reducing the share holding in the listed company. | 2018-03-23 | Implement as promised | Normal performance |
| Shenzhen Fude State Capital Operation Co., Ltd. | Other commitments | Commitment on the public shares: After the completion of the transaction, the committed person will cautiously nominate directors and supervisors, and will not nominate candidates for directors, supervisors and senior management to the listed company that will cause the proportion of public shares of the listed company not meet the requirements of the Listing Rules of Shenzhen Stock Exchange.; nor will vote for the relevant shareholders’ meeting and/or board resolutions for selecting directors, supervisors and senior executives of listed companies that will make the proportion of public shares of listed companies not meet the requirements of the Listing Rules of Shenzhen Stock Exchange . | 2018-03-23 | Implement as promised | Normal performance |
| Shenzhen Fude State Capital Operation Co., Ltd. | Performance commitments and compensation arrangements | Commitment on performance compensation: Fude Capital promises that after the completion of the audit and evaluation of Shenzhen Cereals Group, the Company will make a commitment to the performance of Shenzhen Cereals Group within three years after the completion of the restructuring, and sign a clear and feasible compensation agreement on the achievement of performance promised by the target company with the listed company so as to protect the interests of small and medium investors. On June 8, 2018, Fude Capital and Shenshenbao signed the “Performance Compensation Agreement” and agreed to make a commitment to the net profit of Shenzhen Cereals Group from 2018 to 2020 (hereinafter referred to as the “commitment period”, if it is not completed before December 31, 2018, the commitment period will correspondingly postpone), and after the completion of the acquisition, compensate Shenshenbao in accordance with the provisions of this agreement as the actual net profit of the object company is less than the promised net profit. The performance compensation period of this transaction is 2018, 2019 and 2020, if the transaction is not completed in 2018, the first year of the performance commitment period of this transaction is the year when the target company of the transaction is delivered. Fude Capital promises Shenzhen Cereals Group to achieve net profit (net profit is subject to the net profit attributable to shareholders of the parent company after deducting non-recurring gains and losses in the audited consolidated statement, the same below) of not less than 390 million yuan in 2018, and net profit of not less than 400 million yuan in 2019, and net profit of not less than 420 million yuan in 2020. | 2018-03-23 | Implement as promised | Normal performance |
| Shenzhen Agricultural Products Co., Ltd. | Shares limited for sale commitment | Commitment on the Lock-up Period of the Shares: 1. The shares of the listed company obtained by the committed person before the transaction shall not be transferred within 12 months from the date of completion of the transaction. 2. During the lock-up period of shares, the part that the committed person has increased due to the bonus issue of dividends, transfer of share capital or share allotment of the listed company and other ex dividend and ex right matters should also abide by the above-mentioned share lock-up arrangement. 3. If the above lock-up period does not comply with the latest regulatory requirements of the securities regulatory authority, the committed person will agree to make corresponding adjustments according to the latest regulatory opinions of the regulatory authorities, and implement in accordance with the relevant provisions of the China Securities Regulatory Commission and the Shenzhen Stock Exchange after the lock-up period expires. | 2018-03-23 | 2019-11-12 | Normal performance |
| Shenzhen Fude State Capital Operation Co., Ltd. | Shares limited for sale commitment | Commitment on the Lock-up Period of the Shares: Shenzhen Shenbao Industrial Co., Ltd. (hereinafter referred to as “Shenshenbao” and “Listed Company”) intends to purchase the 100% equity of Shenzhen Cereals Group Co., Ltd. (hereinafter referred to as “SZCG”, “target company”) held by the shareholders of SZCG through issuance of shares. Shenzhen Fude State Capital Operation Co., Ltd. (hereinafter referred to as “the committed person”), the controlling shareholder of SZCG, has made the following commitments: 1. The committed person should not transfer the shares of the listed company obtained from this transaction within 36 months from the date of listing of the shares. If the closing price of the listed company’s stock is lower than the issue price for 20 consecutive trading days within 6 months after the completion of this transaction, or the closing price is lower than the issue price at the term end of 6 months after the completion of the transaction, the lock-up period for the committed person to hold the company’s stock automatically prolongs for at least 6 months. 2. At the expiration of the above-mentioned lock-up period, if the committed person doesn’t fully fulfill the performance compensation obligation stipulated in the Performance Compensation Agreement, the lock-up period of the shares issued to the committed person will be prolonged to the date when the performance compensation obligation is fulfilled. 3. Before this transaction, the shares of the Listed Company held by the committed person and the companies controlled by the promise shall not be transferred within 12 months after the completion of this transaction. 4. During the lock-up period of shares, the part that the committed person has increased due to the bonus issue of dividends, transfer of share capital or share allotment of the Listed Company and other ex dividend and ex right matters should also abide by the above-mentioned share lock-up arrangement. 3. If the above lock-up period does not comply with the latest regulatory requirements of the securities regulatory authority, the committed person will agree to make corresponding adjustments according to the latest regulatory opinions of the regulatory authorities, and implement in accordance with the relevant provisions of the China Securities Regulatory Commission and the Shenzhen Stock Exchange after the lock-up period expires. | 2018-04-02 | 2020-5-12 | Normal performance |
| Shenzhen Fude State Capital Operation Co., Ltd. | Other commitments | Commitment letter of Shenzhen Fude State Capital Operation Co., Ltd. on pending litigation of Shenzhen Cereals Group Co., Ltd.: Shenzhen Shenbao Industrial Co., Ltd. (hereinafter referred to as “Shenshenbao”, “Listed Company”) intends to purchase the 100% equity of Shenzhen Cereals Group Co., Ltd. (hereinafter referred to as “SZCG”, “target company”) held by the shareholders of SZCG through issuance of shares. In view of the two unfinished major lawsuits/arbitration of SZCG, Shenzhen Fude State Capital Operation Co., Ltd. (hereinafter referred to as “the committed person”), the controlling shareholder of SZCG, has made the following commitments: If SZCG and its controlling subsidiaries suffer any claims, compensation, losses or expenses due to the unsettled major lawsuits/arbitration about the contract dispute of international sale of soybean with Noble Resources Co., Ltd. and the contract dispute with Guangzhou Jinhe Feed Co., Ltd. and Huangxianning Import Agent, the committed person will assume the compensation or loss caused by the above two outstanding major lawsuits/arbitration. | 2018-04-02 | Implement as promised | Normal performance |
| Shenzhen Fude State Capital Operation Co., Ltd. | Other commitments | Commitment letter of Shenzhen Fude State Capital Operation Co., Ltd. on risks of making a supplementary payment for the rent at earlier stage of Pinghu Grain Depot: Shenzhen Shenbao Industrial Co., Ltd. intends to purchase the 100% equity of Shenzhen Cereals Group Co., Ltd. (hereinafter referred to as “SZCG”) held by the shareholders of SZCG through issuance of shares. Shenzhen Fude State Capital Operation Co., Ltd. (hereinafter referred to as “the committed person”), the controlling shareholder of SZCG, has made the following commitments: If SZCG needs to make a supplementary payment for the rent before assessment basis date to the property right unit of Pinghu Grain Depot (or its authorized unit), the total amount of the rent and other related charges and expenses shall be borne by the committed person. | 2018-04-02 | Implement as promised | Normal performance |
| Shenzhen Fude State Capital Operation Co., Ltd. | Other commitments | Commitment letter on the house properties of Shenzhen Cereals Group and its subsidiaries that have not obtained the housing ownership certificate: Shenzhen Shenbao Industrial Co., Ltd. (hereinafter referred to as “Shenshenbao” and “listed company”) intends to purchase the 100% equity of Shenzhen Cereals Group Co., Ltd. (hereinafter referred to as “SZCG”, “target company”) held by the shareholders of SZCG through issuance of shares. Shenzhen Fude State Capital Operation Co., Ltd. (hereinafter referred to as “the committed person”), the controlling shareholder of SZCG, has made the following commitments: If SZCG and its subsidiaries suffer any administrative punishment or losses due to their house properties without the housing ownership certificate, the committed person will bear the relevant legal responsibilities and fully compensate the listed company and SZCG within 30 working days after the actual loss occurs. | 2018-04-02 | Implement as promised | Normal performance |
| Shenzhen Fude State Capital Operation Co., Ltd. | Shares limited for sale commitment | Commitment on Shenzhen Fude State-owned Capital Operation Co. Ltd. to accept the restricted shares of non-tradable shares reform of Shenzhen Shenbao Industrial Co., Ltd. held by Shenzhen Investment Holdings Co., Ltd.: Shenzhen Fude State-owned Capital Operation Co. Ltd. (hereinafter referred to as “Fude Capital”) accepts 79,484,302 shares of A shares of Shenshenbao A (000019) (including 66,052,518 shares of unrestricted A shares and 13,431,784 shares of restricted A shares ) held by Shenzhen Investment Holdings Co., Ltd. (hereinafter referred to as “Shenzhen Investment Holdings”) by the free transfer, totally accounting for 16% of the total share capital of Shenshenbao. Shenzhen Investment Holdings made the following commitments in the reform of non-tradable shares of Shenshenbao in 2006: “To make effective and long-term incentives for the management, after the completion of the share reform, Shenzhen Agricultural Products Co., Ltd. (hereinafter referred to as “Agricultural Products”) and Shenzhen Investment Holdings, the company’s non-tradable shareholders, will sell their shareholdings after consideration which account for 6%-8% of the company’s total share capital to the management of the company in three years based on the shareholding ratio of Agricultural Products and Shenzhen Investment Holdings after the share reform (i.e. accounting for 6%-8% of the company’s total share capital of 181,923,088 shares after the share reform).” Fude Capital made a commitment that after the completion of the free transfer of the state-owned shares, Fude Capital would continue to perform the above commitments it made when Shenzhen Investment Holdings makes the non-tradable shares reform to Shenshenbao, which is effective in the long run. | 2018-04-04 | Implement as promised | Normal performance |
| Shenzhen Fude State Capital Operation Co., Ltd. | Commitments on inter-industry competition, related transactions and capital occupancy | Commitment Letter on Avoiding Horizontal Competition: In view of the fact that Shenzhen Shenbao Industrial Co., Ltd. (hereinafter referred to as “Listed Company”) intends to acquire 100% equity of Shenzhen Cereals Group Co., Ltd. held by Shenzhen Fude State-owned Capital Operation Co. Ltd. (hereinafter referred to as “the Company”) by issuing shares to purchase assets, the Company has made the following commitments: 1. As of the issue date of this Commitment Letter, the Company and other enterprises controlled by the Company have not engaged in any business or activity that directly or indirectly constitute horizontal competition to the Listed Company and its subsidiaries in the business, and guarantees that it will not engage or induce any enterprise controlled by the Company to engage in any business or activity that directly or indirectly constitute horizontal competition to the Listed Company and its subsidiaries in the future. 2. If the business opportunity obtained by the Company and other enterprises controlled by the Company constitutes horizontal competition or may constitute horizontal competition to the main business of the Listed Company and its subsidiaries, the Company will immediately notify the Listed Company and try its best to give the business opportunity to the Listed Company to avoid horizontal competition or potential horizontal competition with the Listed Company and its subsidiaries and ensure the interests of Listed Company and other shareholders of Listed Company are not impaired. 3. If the main business of the Listed Company and its subsidiaries constitutes horizontal competition or may constitute horizontal competition to the Company and other enterprises controlled by the Company due to business development or extension, the Company and other enterprises controlled by the Company shall take the following feasible measures based on specific circumstance to avoid competition with the Listed Company: (1) Stop business that constitutes competition or may constitute competition to the Listed Company; (2)Transfer the competitive businesses and assets to the Listed Company at fair prices; (3) Transfer the competitive business to an unrelated third party; (4) Other ways to protect the interests of the Listed Company; 4. If the Company violates the above commitments and causes losses to the Listed Company, the Company will compensate the Listed Company for the incurred losses after the losses are determined. 5. The above commitments continue to be valid during the period when the Company is the controlling shareholder of the Listed Company. | 2018-06-08 | Implement as promised | Normal performance |
| Shenzhen Fude State Capital Operation Co., Ltd. | Commitments on inter-industry competition, related transactions and capital occupancy | Commitment Letter on Reducing and Regulating Related Transactions: In view of the fact that Shenzhen Shenbao Industrial Co., Ltd. (hereinafter referred to as “Listed Company”) intends to acquire 100% equity of Shenzhen Cereals Group Co., Ltd. held by Shenzhen Fude State-owned Capital Operation Co. Ltd. (hereinafter referred to as “the Company”) by issuing shares to purchase assets, the Company has made the following commitments: 1. The enterprises directly or indirectly controlled or affected by the Company and the restructured company and its holding companies will regulate and minimize the related transactions. For related transactions that cannot be avoided or have reasonable reasons to occur, the Company promises to follow the market-oriented principle of justice, fairness and openness, and sign agreements in accordance with relevant laws and regulations, regulatory documents and articles of association, perform legal procedures, fulfill information disclosure obligations and handle relevant approval procedures in accordance with the law, and ensure not to damage the legitimate rights and interests of the company and other shareholders through related transactions. 2. The enterprises directly or indirectly controlled or affected by the Company will strictly avoid borrowing from the company and its holding and shareholding companies, occupying the funds of the company and its holding and shareholding companies, or embezzling the company’s funds by taking advance payments and compensatory debts from the company and its holding and shareholding companies. 3. After the completion of this transaction, the Company will continue to exercise its shareholder rights in strict accordance with the relevant laws and regulations, regulatory documents and the relevant provisions of the Articles of Association; and fulfill its obligation of avoiding voting when the company’s general meeting of shareholders is voting on related transactions involving the Company. 4. The Company guarantees not to obtain any improper interests through the related transactions or cause the company and its holding and shareholding companies to bear any wrongful obligations. If the company or its holding and shareholding companies suffer loses or the interests of the company or its holding and shareholding companies are embezzled by related transactions, the Company will the losses of the company and its holding and shareholding companies. | 2018-06-08 | Implement as promised | Normal performance |
| Shenzhen Fude State Capital Operation Co., Ltd. | Other commitments | Commitment on the Standardized Operation of Listed Company: Shenzhen Shenbao Industrial Co., Ltd. intends to purchase 100% equity of Shenzhen Cereals Group Co., Ltd. (hereinafter referred to as “SZCG”) held by Shenzhen Fude State-owned Capital Operation Co. Ltd. (hereinafter referred to as “the Company”) through issuance of shares. In response to the above transactions, the Company has made the following commitments: After the completion of this transaction, the committed person promises to ensure that the listed company will strictly follow the requirements of laws and regulations such as the “Guidelines for the Governance of Listed Companies” and the changes in internal management and external operation and development of listed company to revise the “Articles of Association” and related rules of procedure so as to adapt to the business operations and corporate governance requirements after the reorganization, continue to improve the governance structure of listed company, continuously strengthen the system construction to form a corporate governance structure that each performs their own duties, effectively checks and balances, makes scientific decisions and coordinates the operation so as to more effectively and feasibly protect the interests of the listed company and all its shareholders. The committed person will urge the listed company to perform the functions of the shareholders’ meeting in strict accordance with the “Articles of Association” and the “Rules of Procedures of the Shareholders Meeting”, ensure that all shareholders, especially small and medium shareholders, enjoy equal rights as stipulated by laws, administrative regulations and the Articles of Association, and ensure that all shareholders legally exercise their rights and interests. The committed person will also urge the listed company to further improve the institutional requirements of the board of directors, ensure that the board of directors fairly, scientifically and efficiently makes decisions, ensure that independent directors can perform their duties in accordance with laws and regulations during their employment, actively understand the various operations of the listed company, consciously perform responsibilities, play a positive role in the scientific decision-making of the board of directors and the development of the listed company, promote the sound development of the listed company, and effectively safeguard the overall interests of the listed company and the interests of small and medium-sized shareholders. In addition, the Company will urge the listed company to give full play to the positive role of independent directors in regulating the operation of the company, strictly abide by relevant national laws, regulations, rules and relevant provisions of the Articles of Association to select independent directors, and further enhance corporate governance. | 2018-06-08 | Implement as promised | Normal performance |
| Shenzhen Fude State Capital Operation Co., Ltd. | Other commitments | Commitment Letter on the Legal Compliance of the Underlying Asset Operation: Shenzhen Shenbao Industrial Co., Ltd. (hereinafter referred to as “Shenshenbao”, “Listed Company”) intends to purchase 100% equity of Shenzhen Cereals Group Co., Ltd. (hereinafter referred to as “SZCG”, “Target Company”) held by Shenzhen Fude State-owned Capital Operation Co. Ltd. (hereinafter referred to as “the Company”) through issuance of shares. The Company has made the following commitments: 1. The Target Company is a limited liability company established according to law and is validly existing, possesses statutory business qualifications, and the Target Company has obtained all the approvals, consents, authorizations and licenses required for its establishment and operation, and all approvals, consents and authorizations and licenses are valid and there is no reason or case that may result in the invalidation of the above approvals, consents, authorizations and licenses. 2. The Target Company has no major violations of laws and regulations in the production and operation in the last three years, there is no case that the Target Company should be terminated according to relevant laws, regulations, normative documents and the company’s articles of association. Except for litigations, arbitrations and administrative penalties disclosed in the Restructuring Report, the Target Company does not have any unsettled or foreseeable major litigation, arbitration and administrative penalty that adversely affect its operations or the amount is more than 10 million yuan. 3. The Target Company will perform the labor contracts with its employees independently and completely. 4. If the Target Company is subject to the fees or penalties of the relevant competent authorities in terms of industry and commerce, taxation, employee salaries, social security, housing provident fund, business qualifications or industry supervisors due to the facts already existing before the reorganization, the Company will fully compensates all the outstanding fees of the Target Company and bear all the losses suffered by Shenshenbao and the Target Company. 5. The Target Company legally owns the ownership and/or use rights of the offices, office equipment, trademarks and other assets required for normal production and operation, has independent and complete assets and business structure, and has legal ownership of its main assets, and the ownership of assets is clear. 6. There is no case that the Target Company impedes the transfer of ownership of the company, such as litigation, arbitration, judicial enforcement, etc., and there is no external guarantee that violates the law or the articles of association. After this reorganization, if the Company violates the above commitments and causes losses to Shenshenbao and the Target Company, the Company agrees to bear the aforementioned compensation/ liability for damage to Shenshenbao/ Target Company. | 2018-06-08 | Implement as promised | Normal performance |
ShenzhenFude StateCapitalOperationCo., Ltd.
Othercommitments
Commitment on the Independence of Listed Company: In view of thefact that Shenzhen Shenbao Industrial Co., Ltd. (hereinafter referred toas “Shenshenbao”) intends to acquire 100% equity of Shenzhen CerealsGroup Co., Ltd. (hereinafter referred to as “Target Company”) held byShenzhen Fude State-owned Capital Operation Co. Ltd. (hereinafterreferred to as “the Company”) by issuing shares to purchase assets, theCompany has made the following commitments: 1. Guarantee theindependence of the personnel of Shenshenbao and the TargetCompany (1) Guarantee that the labor, personnel and compensationmanagement of Shenshenbao and Target Company are completelyindependent of the Company and other companies and enterprisescontrolled by the Company or other economic organizations and relatedparties after the completion of this restructuring. (2) Guarantee that thesenior management personnel of Shenshenbao and Target Company arefully employed in Shenshenbao and Target Company and receiveremuneration after the completion of this restructuring, and do not holdany post except for directors and supervisors in the Company and othercompanies, enterprises controlled by the Company or other economicorganizations and related parties. (3) Ensure not to intervene into theshareholders’ meeting and the board of directors of Shenshenbao andTarget Company to exercise their powers to determine the appointmentand dismissal of personnel after the completion of this restructuring. 2.Guarantee the institutional independence of Shenshenbao and TargetCompany (1) After the completion of this restructuring, Shenshenbaoand Target Company will establish a sound corporate governancestructure and have an independent and complete organization. (2) Afterthe completion of this restructuring, the shareholders meeting, theboard of directors and the board of supervisors of Shenshenbao andTarget Company shall independently exercise their functions andpowers in accordance with the laws, regulations and the articles ofassociation of Shenshenbao and Target Company. 3. Ensure that theassets of Shenshenbao and Target Company are independent andcomplete. (1) After the completion of this restructuring, Shenshenbaoand Target Company shall have independent and complete assetsrelated to production and operation. (2) Ensure that the site for businessoperation of Shenshenbao and Target Company are independent of theCompany and other companies and enterprises controlled by theCompany or other economic organizations and related parties after thecompletion of this restructuring. (3) In addition to normal businesstransactions, after the completion of this restructuring, Shenshenbaoand Target Company do not have funds and assets which are occupiedby the Company and other companies and enterprises controlled by theCompany or other economic organizations and related parties. 4.Guarantee the business independence of Shenshenbao and TargetCompany (1) After the completion of this restructuring, Shenshenbaoand Target Company shall have the relevant qualifications forindependent business activities, and have the market-orientedindependent, autonomous and sustainable operation capabilities. (2)After the completion of this restructuring, the Company and othercompanies and enterprises controlled by the Company or other
2018-06-08
Implement aspromised
Normalperformance
| Shenzhen Fude State Capital Operation Co., Ltd., Shenzhen Agricultural Products Co., Ltd. | Commitments on inter-industry competition, related transactions and capital occupancy | Commitment to Avoid Occupation of Non-operating Capital: Shenzhen Shenbao Industrial Co., Ltd. intends to acquire 100% equity of Shenzhen Cereals Group Co., Ltd. (hereinafter referred to as “SZCG”) held by Shenzhen Fude State-owned Capital Operation Co. Ltd. (hereinafter referred to as “the Company”) through issuance of shares. In response to the above transactions, the Company has made the following commitments: 1. As of the issue date of this commitment letter, the committed person and its related person do not have any illegal use of funds and assets of the listed company and SZCG, and there is no case that the listed company and SZCG provide illegal guarantee for the committed person and its related person. 2. After the completion of the transaction, the committed person guarantees that the committed person and its related person shall not illegally occupy the funds and assets of the listed company in any way, nor require the listed company to provide illegal guarantee for the committed person and its related person under any circumstances, nor engage in any act to damage the legitimate rights and interests of the listed company and other shareholders. If the committed person violates the above commitments, it will bear all losses caused to the listed company and the target company and other companies and enterprises controlled by them or other economic organizations. | 2018-06-08 | Implement as promised | Normal performance |
ShenzhenShenbaoIndustrialCo., Ltd.
Othercommitments
Commitment related to the transactions: In view of the fact thatShenzhen Shenbao Industrial Co., Ltd. (hereinafter referred to as “theCompany”) intends to acquire 100% equity of Shenzhen Cereals GroupCo., Ltd. held by Shenzhen Fude State-owned Capital Operation Co.Ltd. by issuing shares to purchase assets, the Company has made thefollowing commitments: 1. The Company is a limited liability companylegally established and is validly existing, there is no bankruptcy,dissolution, liquidation and other cases that it needs to be terminated inaccordance with the current effective laws, regulations, normativedocuments and articles of association, the Company has publicly issuedshares and listed in accordance with the law. As a listed company, theCompany has the subject qualifications of the issuer of non-publicissuance of shares and the purchaser of assets as stipulated in Chineselaws, regulations and normative documents. 2. The Company hascomplied with the laws and regulations concerning industrial andcommercial administration in the past three years. There are no recordsof suffering administrative penalties with a gross violation for violatingrelevant industrial and commercial administrative laws and regulations.There is no case that the Company needs to be terminated inaccordance with the current effective laws, regulations, normativedocuments and articles of association. The Company does not havelegal impediments to continuous operation. 3. The convening of theshareholders’ meeting, the board meeting, and the board of supervisorsmeeting of the Company, the contents of the resolution and theirsignings in the past three years are in compliance with the relevantlaws, regulations, normative documents and the articles of association,the convening of the shareholders’ meeting, the board meeting, and theboard of supervisors meeting of the Company, the contents of theresolution and their signings for the last three years are legal and valid;the authorization of the stockholders’ meeting of the Company to theboard of directors for the last three years is in compliance with relevantlaws, regulations, regulatory documents and articles of association, andis legal, compliant, true and effective; the major decisions of theCompany since listed have been legal, compliant, true and effective. 4.There is no case that the Company’s rights and interests are seriouslydamaged by the controlling shareholder or actual controller and havenot been eliminated. 5. The Company and its subsidiaries have noillegal external guarantees and have not been released yet. 6. Prior tothis restructuring, the related transactions conducted by the Companyhave performed the necessary fair and just decision-making proceduresand were legal and valid. 7. The Company does not have seriousdamages to the legitimate rights and interests of investors and thepublic interest. 8. The implementation of this restructuring of theCompany conforms to substantive conditions of the restructuring oflisted companies in accordance with the relevant laws, regulations andnormative documents, including but not limited to: (1) conforming tothe national industrial policies and related laws and administrative lawsand regulations on environmental protection, land management, andanti-monopoly; (2) incapable of causing the Company to fail to meetthe conditions for listing shares; (3) the assets pricing involved in the
2018-06-08
2019-02-
Fulfilled
| Commitments make in initial public offering or re-financing | ||||||
| Equity incentive commitment | ||||||
| Other commitments for medium and small shareholders | ||||||
| Completed on time (Y/N) | Y | |||||
| If the commitments is not fulfilled on time, shall explain the specify reason and the next work plan | Not applicable | |||||
2. Concerning assets or project of the Company, which has profit forecast, and reporting period still inforecasting period, explain reasons of reaching the original profit forecast
√ Applicable □Not applicable
| Assets with earnings forecast or items | Predict start time | Predict termination time | Current forecast performance (10 thousand yuan) | Current actual performance (10 thousand yuan) | Reasons for not reaching predictions (if applicable) | Predicted disclosure date | Predictive disclosure index |
| Shenzhen Cereals Group Co., Ltd | 2018-01-01 | 2020-12-31 | 40,000 | 43,603.28 | Not applicable | 2018-03-24 | Found more in the Notice of the Company released on Juchao Website (www.cninfo.com.cn) |
Commitments made by the shareholders and counter party on annual operation performance
√ Applicable□Not applicable
Commitment on performance compensation: on 23 March 2018, the Company entered into an Agreement on Share Issuance andPurchase of Assets with Fude Capital, Fude Capital promises that after the completion of the audit and evaluation of ShenzhenCereals Group, Fude Capital will make a commitment to the performance of Shenzhen Cereals Group within three years after thecompletion of the restructuring, and sign a clear and feasible compensation agreement on the achievement of performance promisedby the target company with the listed company so as to protect the interests of small and medium investors.On June 8, 2018, FudeCapital and Shenshenbao signed the “Performance Compensation Agreement” and agreed to make a commitment to the net profit ofShenzhen Cereals Group from 2018 to 2020 (hereinafter referred to as the “commitment period”), and after the completion of theacquisition, compensate Shenshenbao in accordance with the provisions of this agreement as the actual net profit of the objectcompany is less than the promised net profit. On September 6, 2018, Fude Capital and Shenshenbao signed the "SupplementaryAgreement on Performance Compensation Agreement (I)", Fude Capital promises Shenzhen Cereals Group to achieve net profit (netprofit is subject to the net profit attributable to shareholders of the parent company after deducting non-recurring gains and losses inthe audited consolidated statement, the same below) of not less than 390 million yuan in 2018, and net profit of not less than 400million yuan in 2019, and net profit of not less than 420 million yuan in 2020.
Completion of performance commitment and influence on impairment test of goodwillIn the reporting period, the net profit attributable to parent company after deducting non-recurring gain/loss achieved by SZCGamounted as 436.0328 million yuan, which achieving the performance commitment without effect on goodwill impairment test.IV. Non-operational fund occupation from controlling shareholders and its related party
□ Applicable √Not applicable
No non-operational fund occupation from controlling shareholders and its related party in period.V. Explanation from Board of Directors, Supervisory Committee and Independent Directors(if applicable) for “Qualified Opinion” that issued by CPA
□ Applicable √Not applicable
VI. Particulars about the changes in aspect of accounting policy, estimates and calculationmethod compared with the financial report of last year
√ Applicable □Not applicable
1. Change of important accounting policies
| Content & reasons | Approval procedure | Note |
| According to the Notice on Revision and Issuance of Consolidated Financial Statement Format (2019 version) (Cai Kuai [2019] No.16 from Ministry of Finance (hereinafter, the Cai Kuai [2019] Co.16), format of the consolidate financial statement has been revised, and requires the enterprise that implemented the new financial instruments shall adjusted the items in consolidate statement in line with the Cai Kuai [2019] No.16 and its annex correspondingly. And it will be applicable to the consolidate financial statement of 2019 and the consolidate financial statements in subsequent periods. | Approved by the 6th session of 10th BO dated 28 Oct. 2019 | Items and amounts of the financial statement of 2018 that are significantly affected found more in the No.44 carry in Note V. Important policy and important estimation of Section XII Financial Report in the Report. |
| The Company implemented the revised Accounting Standards for Business Enterprise No. 22- Recognition and Measurement of Financial Instruments, Accounting Standards for Business Enterprise No. 23- Transfer of Financial Assets, Accounting Standards for Business Enterprise No. 24- Hedge Accounting and Accounting Standards for Business Enterprise No. 37- Presentation of Financial Instruments, (hereinafter referred to as New Financial Instrument Standards) since 1 Jan. 2019. No adjustment is made to information in comparable periods in accordance with the linkage between the relevant old and new standards. The difference between the new standards and original standards on the first execution date shall be retroactively adjusted for retained earnings or other comprehensive earnings at the beginning of this reporting period. | Approved by the 3rd session of 10th BOD dated 25 April 2019 | On 1 Jan. 2019, the company compare the results of classification and measurement on financial assets and financial liability that under the new standards and original standards, adjustment on book value and loss reserves are shown in the following table. Main impact of the implementation of new financial instrument standards on financial statement as of 1 Jan. 2019 found more in the No.44 carry in Note V. Important policy and important estimation of Section XII Financial Report in the Report. |
| The Company implemented the revised Accounting Standards for Business Enterprise No.7- Non-monetary Assets Exchange and Accounting Standards for Business Enterprise No.12- Debt Restructuring since 1 Jan. 2019. According to the convergence provision of new and old standards, the Company shall adjusted the exchange of non-monetary assets and debt restructuring between 1 Jan. 2019 and the implementation date of the standards in accordance with the standards. The non-monetary assets exchange and debt restructuring occurred before 1 Jan. 2019, no need to adjusted retroactively. | Approved by the 7th session of 10th BOD dated 30 Dec. 2019 | Implementation of the new standards will not affect the financial status, operation results and cash flow of the Company. |
2. Changes in significant accounting estimates
There is no significant change in accounting estimates during the reporting period.VII. Major accounting errors within reporting period that needs retrospective restatement
□ Applicable √Not applicable
No major accounting errors within reporting period that needs retrospective restatement for the Company in the period.
VIII. Compare with last year’s financial report; explain changes in consolidation statement’sscope
√ Applicable □Not applicable
During the reporting period, the Company canceled Hangzhou Chunshi Network Technology Co., Ltd.IX. Appointment and non-reappointment (dismissal) of CPA
Accounting firm appointed
| Name of domestic accounting firm | BDO China Shu Lun Pan Certified Public Accountant LLP |
| Remuneration for domestic accounting firm (in 10 thousand Yuan) | 99 |
| Continuous life of auditing service for domestic accounting firm | 1 |
| Name of domestic CPA | Qi Tao, Zhang Wanbin |
| Continuous life of auditing service for domestic CPA | 1 |
Whether re-appointed accounting firms in this period or not
□ Yes √ No
Appointment of internal control auditing accounting firm, financial consultant or sponsor
√ Applicable □Not applicable
During the reporting period, BDO China Shu Lun Pan Certified Public Accountant LLP was hired as the internal control auditinstitutions of the Company, 0 Yuan for internal control audit fee.In 2018, Wanho Securities Co., Ltd. are appointed as independent financial adviser of the Company for material assets reorganization,0 Yuan for internal control audit fee.X. Particular about suspended and delisting after annual report disclosed
□ Applicable √Not applicable
XI. Bankruptcy reorganization
□ Applicable √Not applicable
No bankruptcy reorganization for the Company in reporting periodXII. Significant lawsuits and arbitration of the Company
√ Applicable□Not applicable
| Lawsuits (arbitration) | Amount involved (in 10 thousand Yuan) | Resulted an accrual liability (Y/N) | Progress | Trial result and influence | Execution of judgment | Disclosure date | Disclosure index |
| As of the fourth quarter of 2019 the litigation matters mainly including: Disputes over sales contract, principal-agent contract disputes, infringement disputes, loan contract disputes and so on | 7,185.79 | No, the event is related to routine operation of the Company with minor amount. Judging from the progress of the case, relevant litigation do not constitute a significant impact on the Company | Relevant litigation-related matters are executed by legal dept. Of the Company and external laws firms. The matters will litigation involved are carry out the promotion according to relevant process currently. | Judging from the litigation, it does not have a significant impact on the Company | In processing | Not applicable |
XIII. Penalty and rectification
□ Applicable √Not applicable
No penalty and rectification for the Company in reporting period.
XIV. Integrity of the Company and its controlling shareholders and actual controllers
□ Applicable √Not applicable
XV. Implementation of the Company’s stock incentive plan, employee stock ownership planor other employee incentives
□ Applicable √Not applicable
During the reporting period, the Company has no stock incentive plan, employee stock ownership plan or other employee incentivesthat have not been implemented.
XVI. Major related transaction
1. Related transaction with routine operation concerned
□ Applicable √ Not applicable
No related transaction occurred in the period with routine operation concerned
2. Assets or equity acquisition, and sales of assets and equity
□ Applicable √ Not applicable
No related transaction concerning the asses or equity acquisition and sold in the period
3. Related transaction of foreign investment
□ Applicable √Not applicableNo related transaction of foreign investment occurred in the period
4. Related credits and liabilities
□ Applicable √ Not applicable
No related credits and liabilities occurred in period
5. Other major related transaction
□ Applicable √Not applicable
No other major related transaction in the Period.XVII. Significant contract and implementations
1. Trusteeship, contract and leasing
(1) Trusteeship
□ Applicable √Not applicable
No trusteeship for the Company in reporting period
(2) Contract
□ Applicable √Not applicable
No contract for the Company in reporting period
(3) Leasing
□ Applicable √Not applicable
No leasing in the Period
2. Major Guarantee
√ Applicable □Not applicable
(1) Guarantee
In 10 thousand Yuan
| External Guarantee (not including guarantees to subsidiaries) | ||||||||
| Name of the Company guaranteed | Related Announcement disclosure date | Guarantee limit | Actual date of happening | Actual guarantee limit | Guarantee type | Guarantee term | Complete implementation or not | Guarantee for related party |
| Guarantee for the subsidiaries | ||||||||
| Name of the Company guaranteed | Related Announcement disclosure date | Guarantee limit | Actual date of happening | Actual guarantee limit | Guarantee type | Guarantee term | Complete implementation or not | Guarantee for related party |
| Guarantee of the subsidiaries for the subsidiaries | ||||||||
| Name of the Company guaranteed | Related Announcement disclosure date | Guarantee limit | Actual date of happening | Actual guarantee limit | Guarantee type | Guarantee term | Complete implementation or not | Guarantee for related party |
| Dongguan Shenliang Logistics Co., Ltd. | 27,300 | 2015-07-13 | 19,083 | Joint liability guaranty | 8-year | No | Yes | |
| Dongguan Shenliang Logistics Co., Ltd. | 10,200 | 2016-12-21 | 4,603 | Joint liability guaranty | 5-year | No | Yes | |
| Dongguan International Food Industrial Park Development Co., Ltd. | 39,168 | 2018-07-27 | 26,193 | Joint liability guaranty | 14-year | No | Yes | |
| Dongguan Shenliang Logistics Co., Ltd. | 21,930 | 2019-01-25 | 767 | Joint liability guaranty | 12-year | No | Yes | |
| Dongguan Shenliang Oil & Food Trade Co., Ltd. | 11,883 | 2019-04-19 | 4,775 | Joint liability guaranty | 8-year | No | Yes | |
| Total amount of approving guarantee for subsidiaries in report period (C1) | 33,813 | Total amount of actual occurred guarantee for subsidiaries in report period (C2) | 9,965 | |||||
| Total amount of approved guarantee for subsidiaries at the end of reporting period (C3) | 110,481 | Total balance of actual guarantee for subsidiaries at the end of reporting period (C4) | 55,421 |
| Total amount of guarantee of the Company (total of three abovementioned guarantee) | |||
| Total amount of approving guarantee in report period (A1+B1+C1) | 33,813 | Total amount of actual occurred guarantee in report period (A2+B2+C3) | 9,965 |
| Total amount of approved guarantee at the end of report period (A3+B3+C2) | 110,481 | Total balance of actual guarantee at the end of report period (A4+B4+C4) | 55,421 |
| The proportion of the total amount of actually guarantee in the net assets of the Company (that is A4+ B4+C4) | 12.54% | ||
| Including: | |||
| Balance of the guarantee provided for shareholder, actual controller and their related parties (D) | 0 | ||
| The debts guarantee amount provided for the guaranteed parties whose assets-liability ratio exceed 70% directly or indirectly (E) | 39,168 | ||
| Proportion of total amount of guarantee in net assets of the Company exceed 50% (F) | 0 | ||
| Total amount of the aforesaid three guarantees (D+E+F) | 39,168 | ||
| Explanations on possibly bearing joint and several liquidating responsibilities for undue guarantees (if applicable) | N/A | ||
| Explanations on external guarantee against regulated procedures (if applicable) | N/A | ||
Explanation on guarantee with composite wayNil
(2) Illegal external guarantee
□ Applicable √Not applicable
No illegal external guarantee in the period
3. Cash asset management
(1) Trust financing
√ Applicable□Not applicable
Trust financing in the period
In 10 thousand Yuan
| Type | Fund sources | Amount occurred | Undue balance | Overdue amount |
| Bank financial products | Owned fund | 38,500 | 38,500 | 0 |
| Total | 38,500 | 38,500 | 0 | |
The high-risk trust investment with single major amount or has minor security, poor fluidity and non-guaranteed
□ Applicable √Not applicable
Unrecoverable principal or impairment possibility from entrust investment
□ Applicable √Not applicable
(2) Entrusted loans
□ Applicable √Not applicable
No entrusted loans in the Period
4. Other material contracts
□ Applicable √ Not applicable
No other material contracts in the period.XVIII. Social responsibility
1. Performance of social responsibility
During the reporting period, the Company has been strictly in accordance with "Company Law", "Securities Law","Articles of Association" and other relevant laws and regulations, continues to improve governance structure andregulized operation. the Company attaches importance to social responsibility, sustains attention to social createvalue, integrity management according to law, to provide consumers with safe and secure products, high-quality,green and healthy products to enhance the capacity for sustainable development and overall competitiveness;making efforts to improve management, enhance innovation capability and core competencies; the Companyuphold a fair, just and open principles of treatment for all investors, with particular emphasis on safeguarding theinterests of minority shareholders; the Company strictly comply with national environmental laws and regulations,thoroughly implement green philosophy, strengthen ecological protection, comply with the overall development ofthe country and society, and strive to achieve economic and social benefits, short-term interests and long-terminterests of their own development and social development, coordination, thus achieve healthy and harmoniousdevelopment between the Company and the community, the Company and the environment.
2. Execution of social responsibility of targeted poverty alleviation
(1) Plan of targeted poverty alleviation
In 2019, SZCH continued to take Xi Jinping’s new era socialism with Chinese characteristics as a guide to carryout targeted poverty alleviation work in Guilin Village, Yidu Town, Longchuan County, Heyuan City, according tothe document spirit of Guangdong Provincial Party Committee and Provincial Government’s ImplementationOpinions on the Three-Year Battle of Targeted Poverty Alleviation in the New Era (Yuefa (2016) No. 13), theoverall goal of Guilin Village’s targeted poverty alleviation was to implement the eight guarantees such as housingsecurity and medical security for poor households in Guilin Village in 2019 and fully implemented the “two no
worries and three guarantees” of poor households, and reached the basic requirements and core indicators ofpoverty alleviation for the poverty-stricken population. All 143 persons in 52 households in Guilin Village havebeen lifted out of poverty, and Guilin Village has been listed as a village being lifted out of poverty. In order toadvance the poverty alleviation work and ensure the overall victory of the poverty alleviation campaign, under thecorrect leadership of the company’s party committee, the village poverty alleviation team of SZCH took thefollowing effective assistance measures: the first was in industrial assistance. Various new forms and methodssuch as holding training courses, participating in the exhibition to assist the sales of tea, handling small loans,guiding the increase of tea, increasing the planting area, using “substituting subsidies with rewards” and SZCHassistance funds to invest in dividends, etc. to help poor households and village collectivity increase their income.The second was to continue to increase the support for medical and education, and solve the worries of poorfamilies. The third was the village infrastructure, the construction of a new villager service center in GuilinVillage and the purchase of related office equipment were completed in 2019, and the safe drinking water projectof Guilin Village was completed and put into use.
(2) Summary of annual targeted poverty alleviation
In 2019, SZCH invested 1,450,600 yuan in poverty alleviation funds (not including consolation money and goodsand materials), which is used to promote industrial poverty alleviation work, improve infrastructure construction,and support medical and education.Performance and effect:
Firstly, in terms of industrial assistance, continued to carry out poverty alleviation work in a “company +cooperative + farmer household + base” model, guided large tea-growing households to take the initiative topurchase tea from more than 20 poor households with working ability, and helped broaden the sales of tea forpoor households; Using the “substituting subsidies with rewards” financial funds, guided 20 poor households withlabor ability to replenish and become shareholders in Aodingfeng Tea Cooperative. As of the end of 2019, the twoinvestment dividends for Nanyuewang Company and Aodingfeng Company amounted to 98,600 yuan, eachimpoverished household with labor income increased by 4930.85 yuan (2017-2019, through the coordination ofthe task force, guided the 20 impoverished households in Guilin Village with labor ability to invest inNanyuewang Company and Aodingfeng Cooperative by a total of 4 times with the financial funds, with a totalinvestment of 825,700 yuan, each investment enjoying a 5-year dividend); in May 2019, SZCH allocated 500,000yuan to help Guilin Village Committee invest in Nanyuewang Company, which could bring 60,000 yuan ofdividends to the village collective every year to increase the collective income and strengthen the collectiveeconomy.Secondly, organized large tea growing households to participate in various exhibitions such as the ShenzhenSpring Tea Expo, Nanyuewang Company and “TEAYORK HUB” e-commerce platform subordinate to the TeaExpo sponsor Huajuchen Group signed a rent-free settlement agreement, and reached an initial cooperationintention with four trading companies in Guangzhou and Shenzhen, and would further promote cooperation in thefuture, which added momentum to the development of Guilin Village’s tea industry and enhanced the popularityof “Guilin Tea”.
Thirdly, in terms of village infrastructure construction, in 2019, SZCH invested a total of 620,000 yuan tocomplete the construction of the villager service center in Guilin Village which was officially put into use inJanuary 2020; in December 2019, safe drinking water project of Guilin Village was completed and passed thefinal acceptance, the project was invested by SZCH with a self-raised fund of 90,000 yuan, which greatlyimproved the safe drinking water situation in Guilin Village.Fourthly, in medical education assistance, invested 78,900 yuan to help villagers in Guilin Village with difficultiesin life to apply for new rural cooperative medical insurance, strengthen medical security, and reduce the burden ofvillagers on disease prevention and treatment; applied for the subsidies of Shenzhen Charity Federation for thechildren of 5 poor families, a total of 33,500 yuan, effectively reducing the economic burden of schooling ofchildren from poor households; invested 12,400 yuan to install LED display screens and toilet door partitions forGuilin Elementary School, cleaned up the campus environment and purchased cleaning tools. In 2019, all 143persons from 52 poor households in Guilin Village who have filed for poverty all have reached the conditions ofbeing lifted out of poverty, and Guilin Village has been listed as a provincial poor village being lifted out ofpoverty.
(3) Performance of targeted poverty alleviation
| Target | Measurement unit | Numbers/ implementation |
| i. Overall | —— | —— |
| Including: 1. fund | 10 thousand yuan | 145.06 |
| 2. Material discount | 10 thousand yuan | 8.83 |
| 3.number of poverty-stricken population eliminating poverty with card for archives established | Person | 143 |
| ii. Invested by specific project | —— | —— |
| 1.Industrial development poverty | —— | —— |
| Including: 1.1 Type | —— | Poverty Alleviation by Asset Income |
| 1.2 numbers of industrial development poverty | Number | 1 |
| 1.3 Amount input | 10 thousand yuan | 50 |
| 1.4 number of poverty-stricken population eliminating poverty with card for archives established | Person | 7 |
| 2.Transfer employment | —— | —— |
| Including: 2.1 Amount input for vocation skills training | 10 thousand yuan | 0 |
| 2.2 Number of vocation skills training | Person-time | 0 |
| 2.3 Number of poverty-stricken population achieving employment with card for archives established | Person | 0 |
| 3.Relocation the poor | —— | —— |
| Including: 3.1 Number of employed persons from relocated households | Person | 0 |
| 4.Education poverty | —— | —— |
| Including: 4.1 Amount input for subsidizing the impoverished students | 10 thousand yuan | 0 |
| 4.2 Number of subsidized poor student s | Person | 0 |
| 4.3 Amount input for improving the education resources in poverty-stricken areas | 10 thousand yuan | 1.24 |
| 5.Health poverty alleviation | —— | —— |
| Including: 5.1 Amount input for medical and health resources in poverty-stricken areas | 10 thousand yuan | 7.89 |
| 6.Ecological protection and poverty alleviation | —— | —— |
| Including: 6.1 Type | —— | Carry out ecological protection and construction |
| 6.2 Amount input | 10 thousand yuan | 2.54 |
| 7.Fallback protection | —— | —— |
| Including: 7.1 Amount input for Three Stay Behind persons | 10 thousand yuan | 0 |
| 7.2 Number of Three Stay Behind persons help | Person | 0 |
| 7.3 Amount input for poor disabled persons | 10 thousand yuan | 0 |
| 7.4 Number of poor disabled persons help | Person | 0 |
| 8.Social poverty alleviation | —— | —— |
| Including: 8.1 Amount of the poverty alleviation cooperation between the Eastern and Western regions | 10 thousand yuan | 0 |
| 8.2 Amount for targeted poverty alleviation | 10 thousand yuan | 0 |
| 8.3 Amount for the poverty alleviation public welfare fund | 10 thousand yuan | 0 |
| 9.Other | —— | —— |
| Including: 9.1. number of items | Number | 7 |
| 9.2.Amount input | 10 thousand yuan | 83.39 |
| 9.3.number of poverty-stricken population eliminating poverty with card for archives established | Person | 143 |
| iii. Awards (content and grade) | —— | —— |
(4) Follow-up of targeted poverty alleviation
2020 is the ending year of decisive battle to overcome poverty and win a comprehensive well-off. SZCH willcontinue to use Xi Jinping’s new era socialist ideology with Chinese characteristics as a guide, and based onrelevant poverty alleviation policies of governments at all levels, concentrate its strength and strengthen measures,promote poverty alleviation work in an orderly manner, promote the industrial development of Guilin Village, andconsolidate achievements in poverty alleviation. The plan is as follows:
The first is to continue to promote industrial poverty alleviation. Continue to carry out the poverty alleviationwork of the tea industry in Guilin Village in the “company + cooperative + farm household + base” model,continue to expand the production scale of the local tea industry through investment in capital and other forms,track the distribution of share dividends, and develop other suitable projects to promote local tea industrialdevelopment; actively coordinate local tea companies and cooperatives to participate in tea fairs and other relatedactivities, and promote the Guilin tea brand to come out of the village and go into the city; actively carry outconsumer poverty alleviation actions to drive industrial development.The second is to help employment and poverty alleviation. Through the assistance of towns and counties’ povertyalleviation offices and other departments, it recommends poverty-stricken households with labor force to work inrelated enterprises to promote the poverty-stricken labor force to get out of poverty.The third is to consolidate the results of poverty alleviation. Follow up and do a good job in preventing poorhouseholds from returning to poverty after getting rid of poverty. Pay close attention to and follow up on theactual use of the new villager service center project in Guilin Village and the three new safety drinking waterpools in Guilin Village.The fifth is to comprehensively carry out the smooth docking of “targeted poverty alleviation” and “ruralrevitalization” work, continuously consolidate and expand the achievements of poverty alleviation.
3. Environmental protection
The listed Company and subsidiaries is in the range of heavy pollution industry that regulated by State environment protectiondepartmentsNoThe company attached great importance to environmental protection work, and each subsidiary has builtcorresponding environmental protection facilities according to the actual situation of production and operation totreat waste gas, dust, waste water and solid waste generated in the production process, so as to make its emissions
reach the national and local relevant standards. At the same time, based on its own business characteristics, thecompany’s subsidiaries have formulated a series of rules and regulations on environmental protection and strictlyimplemented them to institutionalize and standardize the environmental protection.XIX. Explanation on other significant events
√ Applicable □Not applicable
1.Change of company name and short from of the stock
The Proposal on Change of the Company Name and Short Form of the Stock was deliberated and approved by
th session of 9
thBOD held on 14 Jan. 2019 and the Second Extraordinary Shareholders’ General Meeting of2019 held on 30 Jan. 2019. Name of the Company changed to 深圳市深粮控股股份有限公司, English name asSHENZHEN CEREALS HOLDINGS CO.,LTD; short form of the A-stock as SZCH, B-stock as Shenliang B.Found more in the Resolution of 26
th Session of 9
thBOD and Notice on Change of the Company Name and ShortForm of the Stock released on Juchao Website (www.cninfo.com.cn) dated 15 Jan. 2019, and the Resolution of theSecond Extraordinary Shareholders’ General Meeting of 2019 released on Juchao Website (www.cninfo.com.cn)dated 31 Jan. 2019.
2.Amendments to the Article of Association
(1) The Special Proposal on Amendments to the Article of Association was deliberated and approved by the FirstExtraordinary Shareholders’ General Meeting of 2019 held on 18 Jan. 2019. Relevant provisions of the Article ofAssociation are been revised according to the change of registered capital, total share capital and business scopeafter implementing the material assets reorganization. Found more in the Resolution of the First ExtraordinaryShareholders’ General Meeting of 2019 and Article of Association (January 2019) released on Juchao Website(www.cninfo.com.cn) dated 19 Jan. 2019.
(2) The Special Proposal on Amendments to the Article of Association was deliberated and approved by the 26
th
session of 9
thBOD held on 14 Jan. 2019 and the Second Extraordinary Shareholders’ General Meeting of 2019held on 30 Jan. 2019. Relevant provisions of the Article of Association are been revised according to the changeof the Company’s name. Found more in the Resolution of 26
th Session of 9
th
BOD and Notice on Change of theCompany Name and Amendment to the Article of Association (January 2019) released on Juchao Website(www.cninfo.com.cn) dated 15 Jan. 2019 and the Resolution of Second Extraordinary Shareholders’ GeneralMeeting of 2019 and Article of Association (January 2019) released on Juchao Website (www.cninfo.com.cn)dated 19 Jan. 2019.
3. Personnel changes in BOD, BOS and senior managements
(1) The Proposal on General Election of BOD and Proposal on General Election of BOS are deliberated andapproved by 27
th session of 9
th
BOD, the 15
th session of 9
th
BOS held on 31 Jan. 2019 and the Third ExtraordinaryShareholders’ General Meeting of 2019 held on 21 Feb. 2019. The Mr. Zhu Juning, Mr. Hu Xianghai, Mr. LuQiguang, Ms. Jin Zhenyuan, Ms. Ni Yue, Mr. Wang Li, Mr. Zhao Rubin, Ms. Bi Weimin and Mr. Liu Haifeng areagreed to elected as the Director of 10
thBOD of the Company, of which, Mr. Zhao Rubin, Ms. Bi Weimin and Mr.Liu Haifeng are the independent directors; Ms. Wang Huimin, Mr. Liu Ji and Ms. Qian Wenying are agreed toelected as the Supervisor of 10
th BOS of the Company. Found more in the Resolution of 27
th session of 9
thBOD
and Resolution of 15
th
session of 9
thBOS released on Juchao Website (www.cninfo.com.cn) dated 1 Feb. 2019and the Resolution of Third Extraordinary Shareholders’ General Meeting of 2019 released on Juchao Website(www.cninfo.com.cn) dated 22 Feb. 2019.
(2)The all staff meeting was held on 21 Feb. 2019, and to elected Mr. Zheng Shengqiao and Mr. Du Jianguo as theemployee supervisor of 10
thBOS of the Company. Found more in the Notice on Election Result of EmployeeSupervisors of 10
th
BOS released on Juchao Website (www.cninfo.com.cn) dated 22 Feb. 2019.
(3) The Proposal on Election of President of the 10
thBOD of the Company, the Proposal on Appointment of GMof the Company and Proposal on Appointment of Senior Management of the Company are deliberated andapproved by First Meeting of 10
th
BOD and First Meeting of 10
thBOS held on 21 Feb. 2019. Mr. Zhu Junmingagreed to elected as the President of 10
thBOD of the Company; agreed to appointed Mr. Hu Xianghai as the GMof the Company; Mr. Cao Xuelin, Mr. Ye Qingyun and Mr. Dai Bin are agreed to appointed as Deputy GM of theCompany; Ms. Jin Zhenyuan was appointed as CFO of the Company and Mr. Wang Fang was appointed asSecretary of the Board; Ms. Wang Huimin was elected as the Chairman of 10
thBOS of the Company. Found morein the Resolution of 1
st session of 10
th BOD and Resolution of 1
st
session of 10
thBOS released on Juchao Website(www.cninfo.com.cn) dated 22 Feb. 2019.
(4) On 11 June 2019, the written resignation report was received by the Company from secretary of the Board Mr.Wang Fangcheng. For work transfer, Mr. Wang Fangcheng applied to resign from the secretary of the Board ofthe Company. Found more in the Resignation of Secretary of the Board released on Juchao Website(www.cninfo.com.cn) dated 13 June 2019.
(5) On 26 June 2019, the written resignation report was received by the Company from employee supervisor Mr.Du Jianguo. For personal reasons, Mr. Du Jianguo applied to resign from the employee supervisor of theCompany. Found more in the Resignation of Employee Supervisor released on Juchao Website(www.cninfo.com.cn) dated 27 June 2019.
(6) The Second Workers Congress was held on 29 July 2019, after election, Mr. Ma Zenghai was agreed toelected as the employee supervisor of the 10
th
BOS, office term same as the 10
thBOS. Found more in the Noticeon Supplement the Employee Supervisor released on Juchao Website (www.cninfo.com.cn) dated 1 Aug. 2019.
(7)The Proposal on Appointment of Secretary of the Board was deliberated and approved by 4
th
session of 10
th
BOD held on 23 Aug. 2019. Mr. Du Jianguo was agreed to appointed as the Secretary of the Board with officeterm same as 10
thBOD. Found more in the Notice on Appointment of Secretary of the Board released on JuchaoWebsite (www.cninfo.com.cn) dated 27 Aug. 2019.
(8)On 11 Sept. 2019, the written resignation report was received by the Company from deputy GM Mr. YeQingyun. For work transfer, Mr. Ye Qingyun applied to resign from the deputy GM of the Company. At the sameday, the Proposal on Appointment of Deputy GM was deliberated and approved by 5
th session of 10
thBOD, Mr.Meng Xiaoxian was agreed to appointed as the deputy GM of the Company with office term same as the 10
th
BOD. Found more in the Resolution of 5
th Session of 10
thBOD and Notice on Resignation of Deputy GM andAppointment of Deputy GM released on Juchao Website (www.cninfo.com.cn) dated 12 Sept. 2019.
XX. Significant event of subsidiary of the Company
√ Applicable □Not applicable
1.Subsidiary identified as high-tech enterprises
Wholly-owned subsidiary - Wuyuan Ju Fang Yong Tea Industry Co., Ltd award the High-Tech EnterpriseCertificate (Certificate No.: GR201836000703) in January 2019 issued jointly from Department of Science &Technology of Jiangxi Province, Finance Department of Jiangxi Province and State Administration ofTaxation-Jiangxi Bureau. The issuance date is August 13, 2018 and the validity period is three years. Found morein the Notice on Subsidiary Identified as High-Tech Enterprise released on Juchao Website (www.cninfo.com.cn)dated 29 Jan. 2019.
2.Capital increase to subsidiaries
The Proposal on Capital Increase to SZCG Dongguan Logistics Co., Ltd was deliberated and approved by the 2
nd
session of 10
thBOD held on 22 March 2019. The wholly-owned subsidiary - Shenzhen Cereals Group Co., Ltdwas agreed to increased the capital of 17.85 million yuan with owned funds to controlling subsidiary DongguanShenliang Logistics Co., Ltd. Found more in Resolution of 2
nd
session of 10
thBOD and Notice on Capital Increaseto SZCG Dongguan Logistics Co., Ltd released on Juchao Website (www.cninfo.com.cn) dated 23 March 2019.
3.Issuing perpetual bonds from subsidiary
The Proposal on Issuing Perpetual Bonds from Controlling Subsidiary SZCG Dongguan Logistics Co., Ltd wasdeliberated and approved by 4
th session of 10
th
BOD held on 23 Aug. 2019 and the Fourth ExtraordinaryShareholders’ General Meeting of 2019 held on 11 Sept. 2019. Agreed the Controlling Subsidiary SZCGDongguan Logistics Co., Ltd to issuing the perpetual convertible bonds of no more than 300 million yuan throughQianhai Equity Exchange Center. Found more in Resolution of 4
th
session of 10
thBOD and Notice on IssuingPerpetual Bonds from Subsidiary released on Juchao Website (www.cninfo.com.cn) dated 27 Aug. 2019 and theResolution of Fourth Extraordinary Shareholders’ General Meeting of 2019 released on Juchao Website(www.cninfo.com.cn) dated 12 Sept. 2019.
Section VI. Changes in Shares and Particulars about
ShareholdersI. Changes in Shares
1. Changes in shares
In Share
| Before the Change | Increase/Decrease in the Change (+, -) | After the Change | |||||||
| A mount | Proportion | New shares issued | Bonus shares | Capitalization of public reserve | Others | Subtotal | A mount | Proportion | |
| I. Restricted shares | 684,821,396 | 59.42% | 0 | 0 | 0 | -251,829 | -251,829 | 684,569,567 | 59.40% |
| 1. State-owned shares | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
| 2. State-owned corporate shares | 669,184,735 | 58.06% | 0 | 0 | 0 | 15,384,832 | 15,384,832 | 684,569,567 | 59.40% |
| 3. Other domestic shares | 15,583,326 | 1.35% | 0 | 0 | 0 | -15,583,326 | -15,583,326 | 0 | 0.00% |
| Including: Domestic legal person’s shares | 15,384,832 | 1.33% | 0 | 0 | 0 | -15,384,832 | -15,384,832 | 0 | 0.00% |
| Domestic nature person’s shares | 198,494 | 0.02% | 0 | 0 | 0 | -198,494 | -198,494 | 0 | 0.00% |
| 4. Foreign shares | 53,335 | 0.01% | 0 | 0 | 0 | -53,335 | -53,335 | 0 | 0.00% |
| Including: Foreign corporate shares | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
| overseas nature person’s share | 53,335 | 0.01% | 0 | 0 | 0 | -53,335 | -53,335 | 0 | 0.00% |
| II. Un-restricted shares | 467,713,858 | 40.58% | 0 | 0 | 0 | 251,829 | 251,829 | 467,965,687 | 40.60% |
| 1. RMB common shares | 415,964,578 | 36.09% | 0 | 0 | 0 | 251,829 | 251,829 | 416,216,407 | 36.11% |
| 2. Domestically listed foreign shares | 51,749,280 | 4.49% | 0 | 0 | 0 | 0 | 0 | 51,749,280 | 4.49% |
| 3. Foreign listed foreign shares | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
| 4. Other | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
| III. Total shares | 1,152,535,254 | 100.00% | 0 | 0 | 0 | 0 | 0 | 1,152,535,254 | 100.00% |
Reasons for share changed
√ Applicable □Not applicable
1.During the reporting period, nature of the shareholders under the name of Shenzhen Agricultural Products Group Co., Ltdregistered in China Securities Depository and Clearing Corporation Limited change to state-owned legal person from general legalperson. As a result, among the restricted shares, share holding by state-owned legal person has 15,384,832 shares increased, and15,384,832 shares decreased in holding by domestic legal person.
2.During the reporting period, the shares held by former directors, supervisors and senior management of 9
thBOD and BOS arereleased for trading due to the office term expired. As a result, the restricted shares have 251,829 shares decreased (including 198,494shares declined by domestic nature person, and 53,335 shares declined by foreign natural person), shares without restriction has251,829 shares increased (including 251,829 shares increased in RMB ordinary shares).Approval of share changed
□ Applicable √ Not applicable
Ownership transfer of share changed
□ Applicable √ Not applicable
Progress of shares buy-back
□ Applicable √Not applicable
Implementation progress of the reduction of repurchases shares by centralized bidding
□ Applicable √Not applicable
Influence on the basic EPS and diluted EPS as well as other financial indexes of net assets per share attributable to commonshareholders of Company in latest year and period
□ Applicable √ Not applicable
Other information necessary to disclose or need to disclosed under requirement from security regulators
□ Applicable √ Not applicable
2. Changes of restricted shares
√ Applicable □Not applicable
In Share
| Shareholders’ name | Number of shares restricted at Period-begin | Number of shares released in the Year | Number of new shares restricted in the Year | Number of shares restricted at Period-end | Restriction reasons | Released date |
| Yan Zesong | 53,335 | 0 | 53,335 | 0 | Lifting the ban after the term expires | 2019-8-21 |
| Zheng Yuxi | 49,500 | 0 | 49,500 | 0 | Lifting the ban after the term expires | 2019-8-21 |
| Yao Xiaopeng | 33,289 | 0 | 33,289 | 0 | Lifting the ban after the term expires | 2019-8-21 |
| Lin Hong | 30,937 | 0 | 30,937 | 0 | Lifting the ban after the term expires | 2019-8-21 |
| Li Yiyan | 30,937 | 0 | 30,937 | 0 | Lifting the ban after the term expires | 2019-8-21 |
| Li Fang | 29,824 | 0 | 29,824 | 0 | Lifting the ban after the term expires | 2019-8-21 |
| Wang Zhiping | 21,037 | 0 | 21,037 | 0 | Lifting the ban after the term expires | 2019-8-21 |
| Fan Zhiqing | 2,970 | 0 | 2,970 | 0 | Lifting the ban after the term expires | 2019-8-21 |
| Total | 251,829 | 0 | 251,829 | 0 | -- | -- |
II. Securities issuance and listing
1. Security offering (without preferred stock) in the report period
□ Applicable √Not applicable
2. Changes of total shares and shareholders structure as well as explanation on changes of assets andliability structure
□ Applicable √Not applicable
3. Existing internal staff shares
□ Applicable √Not applicable
III. Particulars about shareholder and actual controller of the Company
1. Number of shareholders and particulars about shares holding
In Share
| Total common stock shareholders in reporting period-end | 52,115 | Total common stock shareholders at end of last month before annual report disclosed | 61,570 | Total preference shareholders with voting rights recovered at end of reporting period (if applicable) (found in note 8) | 0 | Total preference shareholders with voting rights recovered at end of last month before annual report disclosed (if applicable) (found in note 8) | 0 | |||||||
| Particulars about shares held above 5% by shareholders or top ten shareholders | ||||||||||||||
| Full name of Shareholders | Nature of shareholder | Proportion of shares held | Total shares hold at the end of report period | Changes in report period | Amount of restricted shares held | Amount of un-restricted shares held | Number of share pledged/frozen | |||||||
| State of share | Amount | |||||||||||||
| Shenzhen Fude State Capital Operation Co., Ltd. | State-owned legal person | 63.79% | 735,237,253 | 0 | 669,184,735 | 66,052,518 | ||||||||
| Shenzhen Agricultural Products Group Co., Ltd | State-owned legal person | 8.23% | 94,832,294 | 0 | 15,384,832 | 79,447,462 | ||||||||
| Sun Huiming | Domestic nature person | 0.30% | 3,436,462 | 33200 | 0 | 3,436,462 | ||||||||
| Hu Xiangzhu | Domestic nature person | 0.24% | 2,800,000 | 170000 | 0 | 2,800,000 | ||||||||
| Lin Junbo | Domestic nature person | 0.22% | 2,484,450 | 1026550 | 0 | 2,484,450 | ||||||||
| Central Huijin Asset Management Co., Ltd. | State-owned legal person | 0.13% | 1,472,625 | 0 | 0 | 1,472,625 | ||||||||
| Li Yongqi | Domestic nature person | 0.10% | 1,097,205 | -11000 | 0 | 1,097,205 | ||||||||
| Zhong Zhenxin | Domestic nature person | 0.09% | 1,010,600 | 383800 | 0 | 1,010,600 | ||||||||
| Weng Lizhang | Domestic nature person | 0.09% | 1,005,530 | 765200 | 0 | 1,005,530 | ||||||||
| Cai Congda | Domestic nature person | 0.09% | 1,000,051 | 1000051 | 0 | 1,000,051 | ||
| Strategy investors or general corporation comes top 10 common shareholders due to rights issue (if applicable) (see note 3) | N/A | |||||||
| Explanation on associated relationship among the aforesaid shareholders | Shenzhen SASAC directly holds 100% equity of Fude Capital (Now renamed "Food Group"), and holds 34% of Agricultural Products indirectly through Food Group; the Company was not aware of any related relationship between other shareholders above, and whether they belonged to parties acting in concert as defined by the Acquisition Management Method of Listed Company. | |||||||
| Particular about top ten shareholders with un-restrict shares held | ||||||||
| Shareholders’ name | Amount of un-restrict shares held at Period-end | Type of shares | ||||||
| Type | Amount | |||||||
| Shenzhen Agricultural Products Group Co., Ltd | 79,447,462 | RMB common shares | 79,447,462 | |||||
| Shenzhen Fude State Capital Operation Co., Ltd. | 66,052,518 | RMB common shares | 66,052,518 | |||||
| Sun Huiming | 3,436,462 | Domestically listed foreign shares | 3,436,462 | |||||
| Hu Xiangzhu | 2,800,000 | RMB common shares | 2,800,000 | |||||
| Lin Junbo | 2,484,450 | RMB common shares | 2,484,450 | |||||
| Central Huijin Asset Management Co., Ltd. | 1,472,625 | RMB common shares | 1,472,625 | |||||
| Li Yongqi | 1,097,205 | RMB common shares | 1,097,205 | |||||
| Zhong Zhenxin | 1,010,600 | RMB common shares | 1,010,600 | |||||
| Weng Lizhang | 1,005,530 | RMB common shares | 1,005,530 |
| Cai Congda | 1,000,051 | RMB common shares | 1,000,051 |
| Expiation on associated relationship or consistent actors within the top 10 un-restrict shareholders and between top 10 un-restrict shareholders and top 10 shareholders | Shenzhen SASAC directly holds 100% equity of Fude Capital (Now renamed "Food Group"), and holds 34% of Agricultural Products indirectly through Food Group; the Company was not aware of any related relationship between other shareholders above, and whether they belonged to parties acting in concert as defined by the Acquisition Management Method of Listed Company. | ||
| Explanation on top 10 shareholders involving margin business (if applicable) (see note 4) | 1. Shareholder Li Yongqi holds 1,097,205 shares of the Company under customer credit trading secured securities account through Xingye Securities Co., Ltd, common account holds 0 shares, and 1,097,205 shares are held by Li in total at end of the Period. During the reporting period, the credit trading secured securities account has 9,100 shares decreased, and 1,900 shares decreased in the common account, shares held by Li are decreased 11,000 shares in total. 2. Shareholder Cai Congda holds 1,000,051 shares of the Company under customer credit trading secured securities account through Dongxing Securities Co., Ltd, common account holds 0 shares, and 1,000,051 shares are held by Li in total at end of the Period. During the reporting period, the credit trading secured securities account has 1,000,051 shares increased, and no change in the common account, shares held by Li are increased 1,000,051 shares in total. | ||
Whether top ten common stock shareholders or top ten common stock shareholders with un-restrict shares held have a buy-backagreement dealing in reporting period
□ Yes √ No
The top ten common stock shareholders or top ten common stock shareholders with un-restrict shares held of the Company have nobuy-back agreement dealing in reporting period.
2. Controlling shareholder of the Company
Nature of controlling shareholders: local state-owned holdingType of controlling shareholders: legal person
| Controlling shareholders | Legal person/person in charge of the unit | Date of foundation | Organization code | Main operation business |
| Shenzhen Food Group Co., Ltd. | He Jianfeng | 2017-12-14 | 91440300MA5EWWPXX2 | The general business projects are: food safety infrastructure construction (including the upgrading of the farmers ’market, the upgrading of public places canteens, the construction of community cooked food centers, and the construction of agricultural product bases); safe food circulation and terminal sales; the establishment of food distribution channel platforms; Food industry investment and operation (Including the M & A investment of the core resources of the food industry chain and the cultivation of enterprises in the future direction). Licensed business items are: food sales and supply business. |
| Equity of other domestic/oversea listed Company control by controlling shareholder as well as stock-joint in report period | In addition to holding 63.79% equity of the company, Shenzhen Food Group Co., Ltd. holds 34% equity of Shenzhen Agricultural Products Group Co., Ltd. | |||
Changes of controlling shareholders in reporting period
□ Applicable √Not applicable
The controlling shareholder of the company has not changed during the reporting period.
3. Actual controller and persons acting in concert
Nature of actual controller: local state-owned assets managementType of actual controller: legal person
| Actual controller | Legal person/person in charge of the unit | Date of foundation | Organization code | Main operation business |
| Shenzhen Municipal People’s Government State-owned Assets Supervision & Administration Commission | Yu Gang | 2004-04-02 | 11440300K317280672 | State-owned assets supervision and management |
| Equity of other domestic/foreign listed Company controlled by actual controller in reporting period | - |
Changes of actual controller in reporting period
□ Applicable √Not applicable
No changes of actual controllers for the Company in reporting period.Property right and controlling relationship between the actual controller and the Company is as follow:
Actual controller controlling the Company by entrust or other assets management
□ Applicable √Not applicable
4. Particulars about other legal person shareholders with over 10% shares held
□ Applicable √Not applicable
5. Limitation and reducing the holdings of shares of controlling shareholders, actual controllers,restructuring side and other commitment subjects
□ Applicable √Not applicable
Section VII. Preferred Stock
□ Applicable √ Not applicable
The Company had no preferred stock in the Period.
Section VIII. Convertible Bonds
□ Applicable √ Not applicable
The Company had no convertible bonds in the Period.
Section IX. Particulars about Directors, Supervisors, Senior
Executives and EmployeesI. Changes of shares held by directors, supervisors and senior executives
| Name | Title | Post-holding status | Sex (F/M) | Age | Start dated of office term | End date of office term | Shares held at period-begin (Share) | Increasing shares held in this period (Share) | Decreasing shares held in this period (Share) | Other changes (share) | Shares held at period-end(Share) |
| Zhu Junming | Party Secretary, Chairman | Currently in office | M | 56 | 2019-02-21 | 2022-02-21 | 0 | 0 | 0 | 0 | 0 |
| Hu Xianghai | Deputy Party Secretary, Director, GM | Currently in office | M | 56 | 2019-02-21 | 2022-02-21 | 0 | 0 | 0 | 0 | 0 |
| Lu Qiguang | Deputy Party Secretary, Director | Currently in office | M | 58 | 2019-02-21 | 2022-02-21 | 0 | 0 | 0 | 0 | 0 |
| Jin Zhenyuan | Director, CFO | Currently in office | F | 49 | 2019-02-21 | 2022-02-21 | 0 | 0 | 0 | 0 | 0 |
| Zhao Rubing | Independent director | Currently in office | M | 64 | 2019-02-21 | 2022-02-21 | 0 | 0 | 0 | 0 | 0 |
| Bi Weimin | Independent director | Currently in office | F | 64 | 2019-02-21 | 2022-02-21 | 0 | 0 | 0 | 0 | 0 |
| Liu Haifeng | Independent director | Currently in office | M | 49 | 2019-02-21 | 2022-02-21 | 0 | 0 | 0 | 0 | 0 |
| Wang Li | Director | Currently in office | M | 59 | 2018-05-15 | 2022-02-21 | 0 | 0 | 0 | 0 | 0 |
| Ni Yue | Director | Currently in office | F | 46 | 2018-05-15 | 2022-02-21 | 0 | 0 | 0 | 0 | 0 |
| Wang Huimin | SCID, Chairman of supervisory committee | Currently in office | F | 53 | 2018-05-15 | 2022-02-21 | 0 | 0 | 0 | 0 | 0 |
| Liu Ji | Supervisor | Currently in office | M | 45 | 2019-02-21 | 2022-02-21 | 0 | 0 | 0 | 0 | 0 |
| Qian Wenying | Supervisor | Currently in office | F | 48 | 2019-02-21 | 2022-02-21 | 0 | 0 | 0 | 0 | 0 |
| Zheng Shengqiao | Staff supervisor | Currently in office | M | 53 | 2019-02-21 | 2022-02-21 | 0 | 0 | 0 | 0 | 0 |
| Ma Zenghai | Staff supervisor | Currently in office | M | 56 | 2019-07-29 | 2022-02-21 | 0 | 0 | 0 | 0 | 0 |
| Cao Xuelin | Deputy GM | Currently in office | M | 56 | 2019-02-21 | 2022-02-21 | 0 | 0 | 0 | 0 | 0 |
| Dai Bin | Deputy GM | Currently in office | M | 56 | 2019-02-21 | 2022-02-21 | 0 | 0 | 0 | 0 | 0 |
| Meng Xiaoxian | Deputy GM | Currently in office | M | 48 | 2019-09-11 | 2022-02-21 | 0 | 0 | 0 | 0 | 0 |
| Du Jianguo | Secretary of the Board | Currently in office | M | 47 | 2019-08-23 | 2022-02-21 | 0 | 0 | 0 | 0 | 0 |
| Ye Qingyun | Former Deputy GM | Office-leaving | M | 41 | 2019-02-21 | 2019-09-11 | 0 | 0 | 0 | 0 | 0 |
| Wang Fangcheng | Former Secretary of the Board | Office-leaving | M | 38 | 2019-02-21 | 2019-06-11 | 0 | 0 | 0 | 0 | 0 |
| Zheng Yuxi | Former Party Secretary, Chairman | Office-leaving | M | 58 | 2015-09-10 | 2019-02-21 | 66,000 | 0 | 6,000 | 0 | 60,000 |
| Zhang Guodong | Former director | Office-leaving | M | 58 | 2017-09-13 | 2019-02-21 | 0 | 0 | 0 | 0 | 0 |
| Fan Zhiqing | Former Independent director | Office-leaving | M | 71 | 2015-09-10 | 2019-02-21 | 3,960 | 0 | 0 | 0 | 3,960 |
| Wu Shuping | Former Independent director | Office-leaving | M | 67 | 2015-09-10 | 2019-02-21 | 0 | 0 | 0 | 0 | 0 |
| Chen Cansong | Former Independent director | Office-leaving | M | 48 | 2015-09-10 | 2019-02-21 | 0 | 0 | 0 | 0 | 0 |
| Yan Zesong | Former director, GM | Office-leaving | M | 50 | 2015-09-10 | 2019-02-21 | 71,114 | 0 | 71,114 | 0 | 0 |
| Li Yiyan | Former director, Deputy GM, Secretary of the Board | Office-leaving | F | 54 | 2015-09-10 | 2019-02-21 | 41,250 | 0 | 0 | 0 | 41,250 |
| Lin Hong | Former Chairman of supervisory committee | Office-leaving | F | 55 | 2015-09-10 | 2019-02-21 | 41,250 | 0 | 0 | 0 | 41,250 |
| Luo Longxin | Former Staff supervisor | Office-leaving | M | 59 | 2015-09-10 | 2019-02-21 | 0 | 0 | 0 | 0 | 0 |
| Qian Xiaojun | Former Deputy GM | Office-leaving | M | 48 | 2015-09-10 | 2019-02-21 | 0 | 0 | 0 | 0 | 0 |
| Yao Xiaopeng | Former Deputy GM | Office-leaving | M | 52 | 2015-09-10 | 2019-02-21 | 44,385 | 0 | 0 | 0 | 44,385 |
| Wang Zhiping | Former CFO | Office-leaving | F | 49 | 2015-09-10 | 2019-02-21 | 28,050 | 0 | 28,050 | 0 | 0 |
| Toal | -- | -- | -- | -- | -- | -- | 296,009 | 0 | 105,164 | 0 | 190,845 |
II. Changes of directors, supervisors and senior executives
√ Applicable □Not applicable
| Name | Title | Type | Date | Reasons |
| Zheng Yuxi | Party Secretary, Chairman | Term expired and leaving office | 2019-02-21 | Term expires, no renewal |
| Zhang Guodong | Director | Term expired and leaving office | 2019-02-21 | Term expires, no renewal |
| Fan Zhiqing | Independent director | Term expired and leaving office | 2019-02-21 | Term expires, no renewal |
| Wu Shuping | Independent director | Term expired and leaving office | 2019-02-21 | Term expires, no renewal |
| Chen Cansong | Independent director | Term expired and leaving office | 2019-02-21 | Term expires, no renewal |
| Yan Zesong | Director, GM | Term expired and leaving office | 2019-02-21 | Term expires, no renewal |
| Li Yiyan | Director, Deputy GM, Secretary of the Board | Term expired and leaving office | 2019-02-21 | Term expires, no renewal |
| Lin Hong | Chairman of supervisory committee | Term expired and leaving office | 2019-02-21 | Term expires, no renewal |
| Luo Longxin | Staff supervisor | Term expired and leaving office | 2019-02-21 | Term expires, no renewal |
| Qian Xiaojun | Deputy GM | Term expired and leaving office | 2019-02-21 | Term expires, no renewal |
| Yao Xiaopeng | Deputy GM | Term expired and leaving office | 2019-02-21 | Term expires, no renewal |
| Wang Zhiping | CFO | Term expired and leaving office | 2019-02-21 | Term expires, no renewal |
| Wang Fangcheng | Secretary of the Board | Non-reappointment | 2019-06-11 | Job transfer |
| Du Jianguo | Staff supervisor | Office-leaving | 2019-07-29 | Personal reasons |
| Ye Qingyun | Deputy GM | Office-leaving | 2019-09-11 | Job transfer |
III. Post-holding
Professional background, major working experience and present main responsibilities in Company of directors,supervisors and senior executive(i) DirectorMr. Zhu Junming: was born in 1964, master’s degree and a senior economist. He successively served as cadet andcadre of Air Force Radar Institute; cadres of organs directly under Hubei Province; GM and President of theenterprise under Shenzhen Agricultural Products Group Co., Ltd; the Director, assistant GM, deputy GM, GM anddeputy party secretary of Agricultural Products; party secretary and president of Shenzhen Cereals Group Co., Ltd;executive director and GM of Shenzhen Fude State Capital Operation Co., Ltd. Now he serves as party secretaryand President of the Company.
Mr. Hu Xianghai: was born in 1964, master’s degree and a senior economist. He successively served as thelecturer of Shenzhen Institute of Education; director of general office of Asia Branch of the Shenzhen HualeIndustrial Co., Ltd.; director of the Shenzhen Enterprise Management Cadre Training Center; deputy secretarygeneral and office director of the Secretarial Shenzhen Association of Enterprise Management and ShenzhenAssociation of Chinese and Foreign Entrepreneurs; director of development dept. and director of the marketingmanagement dept. of Shenzhen Special Economic Zone Duty-Free Commodity Enterprise Company; GM ofTemian Electronic Technology Professional Market Management Co., Ltd.; assistant to the GM and GM ofenterprise dept., GM, deputy secretary of the party committee, director and GM of Shenzhen AgriculturalProducts Co., Ltd; served as the president of Shenzhen South Agricultural Products Logistics Co., Ltd. while takepost as assistant to the deputy GM, and the president of Shenzhen Qianhai Agricultural Products Exchange Co.,Ltd; deputy secretary of the party committee, director and GM of Shenzhen Cereals Group Co., Ltd. Now heserves as deputy secretary of the party committee, director and GM of the Company.
Mr. Lu Qiguang: born in 1962, a university graduate, an assistant economist. He successively served as the clerkand deputy chief of the Grain Bureau of Boluo County; an office staff and deputy director of Shenzhen Grain Co.,Ltd.; the deputy director of office, assistant GM and deputy GM of Shenzhen Cereals Corporation; a member ofthe party committee, deputy GM, deputy party secretary and director of Shenzhen Cereals Group Co., Ltd, and thepresident of Shenzhen Flour Co., Ltd. Now he serves as the deputy secretary of the party committee and directorof the Company.
Ms. Jin Zhenyuan: born in 1971, master’s degree and CPA and senior accountant. She successively served asdirector and CFO of Shenzhen Tongchan Group Co., Ltd.; the director and CFO of Shenzhen Textile (Holdings)Co., Ltd.; the director and CFO of Shenzhen Cereals Group Co., Ltd. Now she serves as the director and CFO ofthe Company and supervisor of Shenzhen State-Owned Duty Free Commodity (Group) Co., Ltd.
Mr. Wang Li: master’s degree and an accountant, was born in 1961. He successively served as assistant workers in
Chengdu Locomotive Factory; assistant workers in Xi’an Railway Branch; business manager, vice director of thefinancial department, director of capital division, deputy chief accountant, deputy GM, Director, deputy partysecretary and GM of Shenzhen SEG Group Co., Ltd.; director of Shenzhen Cereals Group Co., Ltd. now he servesdirector of the Company, full-time external director of Shenzhen SASAC, Director of Shenzhen AgriculturalProducts Group Co., Ltd
Ms. Ni Yue: a master’s degree and a senior accountant, was born in 1974. She successively served as generalledger accountant in Shanghai Jingan Commercial & Trade Corporation; chief accounting in Shanghai TailongReal Estate Co., Ltd.; finance officer in Shanghai Baodi Property Co., Ltd; chief accountant in Shanghai RuianReal Estate Co., Ltd and full-time supervisor in the enterprise directly under SASAC of Shanghai Pudong NewDistrict; director of Shenzhen Cereals Group Co., Ltd. now she serves director of the Company, full-time externaldirector of Shenzhen SASAC, Director of Shenzhen Bus Group, chief financial officer of Shenzhen Food GroupCo., Ltd.
Mr. Zhao Rubin: born in 1956, a master’s degree and professor of engineering. He successively served as thedirector and secretary of Gezhouba Station for EHVDC transmission from Gezhouba to Shanghai; director ofoffice and director of foreign affairs office of Gezhouba Hydro-power Plant; the secretary of party group and GMof Huaneng South Development Company; party secretary and GM of Huaneng Real Estate DevelopmentCompany; Director, deputy president, deputy party secretary of Great Wall Securities; president of Jingshun GreatWall Fund Management Co., Ltd.; deputy president of Sunshine Insurance Assets Management CorporationLimited; the outside director of Shenzhen Cereals Group Co., Ltd. Now he serves as independent director of theCompany; the independent director of Weihua Corporation; independent director of Bros Eastern Co., Ltd;independent director of Southwest Securities and independent director of Bosera Fund Management.
Ms. Bi Weimin: born in 1956, a doctoral candidate, and a senior accountant. She successively served as engineerof the Gezhouba Power Plant, assistant director and deputy director; deputy president and director of ThreeGorges Finance Company; chief economist and supervisor of China Yangtze Power Co., Ltd.; deputy chiefaccountant of China Three Gorges Corporation, the member of investment committee and director of asset financedept. As well as the director of enterprise management dept and legal affairs department. Now she serves asindependent director of the Company.
Mr. Liu Haifeng: born in 1971, a doctoral students and a lawyer. He successively served as director of legaldepartment of Shenzhen Property Development (Group); the partner of Guangdong Xintong Laws Firm. Now heserves as independent director of the Company and first-level partner of Guangdong Hancheng Laws Firm.
(ii) SupervisorMs. Wang Huimin: master’s degree and a intermediate economist, senior HR manager and has a lawyer’s
qualification, was born in 1967. She successively served as a legal adviser for Shenzhen Construction Group Co.,Ltd, an economist, chairman of the committee of female employees, manager of HR department in ShenzhenConstruction Investment Holding Co., Ltd; director of HR department of Shenzhen Investment Holding Co., Ltd;Deputy GM of SZPRD; Director, Deputy party secretary, SCID and Chairman of supervisory committee ofShenzhen Cereals Group Co., Ltd. Now she serves as SCID and Chairman of supervisory committee of theCompany.
Mr. Liu Ji: born in 1975, master’s degree and a economist. He successively served as secretary of executive Boardcommittee, GM of IT Engineering departmnet, GM of administrative department, GM of enterprise managementdepartment and GM of investment department of Shenzhen International Holdings Limited; non executivedirector of Shenzhen Expressway Co., ltd.; the supervisor of Shenzhen Cereals Group Co., Ltd. Now he is thesupervisor of the Company; the executive director, deputy GM and secretary of the Board of Hopewell HighwayInfrastructure Limited; the mediation expert of Shenzhen International Arbitration Court (Shenzhen ArbitrationCommission).
Ms. Qian Wenying: born in 1972, holds a bachelor degree, a member of Association of Chartered CertifiedAccountants (ACCA), and a senior economist. She successively served as the office translator, secretary andresearcher of project investment office in Shenzhen Tagen Group Co., Ltd.; the assistant manager and manager ofmarketing department of Tagen Investment Development Co., Ltd., the director of office of the board andrepresentative of security affairs of Shenzhen Tagen Group Co., Ltd; supervisor of Shenzhen Cereals Group Co.,Ltd. Now she serves as supervisor of the Company and director of policy research office of Shenzhen Metro.
Mr. Zheng Shengqiao, born in 1967, holds a bachelor degree and an intermediate accountant. He successivelyserved as member of the special representative office of the state audit administration in Guangzhou; deputymanager of accounting department of Hong Kong Yuehai Enterprise (Group) Co., Ltd; deputy GM of CTSLogistics; CFO of the AVSHD Technology Co., Ltd; the deputy director of finance department, deputy director ofenterprise management department, director of board office, deputy secretary of discipline inspection commission,secretary of the BOS and director of discipline inspection and supervision office (office of BOS) of the ShenzhenCereals Group Co., Ltd. Now he serves as the employee supervisor, deputy secretary of discipline inspectioncommission and director of discipline inspection and supervision office (office of BOS) of the Company.
Mr. Ma Zenghai: born in 1964, master’s degree and an intermediate economist, lecturer. He successively served asthe general representative of Thailand project in Shenzhen Cereals Group Co., Ltd; president and GM ofShenzhen Hualian Grain & Oil Trade Co., ltd.; GM and secretary of the Party branch of Grease branch ofShenzhen Cereals Group Co., Ltd; head of the risk management department of Shenzhen Cereals Group Co., Ltd.Now he serves as the head of risk management and internal audit department and secretary of the third partybranch of the Company.
(iii) Senior executiveMr. Cao Xuelin: born in 1964, a doctoral students. He successively served as lecturer in department ofmanagement of the Nankai University; cadre of Shenzhen Baoan Group; deputy director section member, directorsection member and assistant investigator of policies and Regulations Department of Shenzhen State-ownedAssets Management Office; deputy director of planning department, director of the secretary office of BOD ofShenzhen Investment Management Company; deputy GM of Shenzhen Xintou Assets Operation Co., ltd anddeputy GM of Shenzhen Cereals Group Co., Ltd. Now he serves as the deputy GM of the Company and presidentof Shenzhen Shenliang Big Kitchen Food Supply Chain Co., Ltd.
Mr. Dai Bin: born in 1964, master’s degree and a senior engineer. He successively served as counselor of RadioEngineering Department of Huazhong University of Technology and secretary of the Youth League Committee; anengineer and purchasing manager of Shenzhen Huada Electronic Co., Ltd; GM of Shenzhen Shengye VentureElectronics Co., Ltd; GM of Shenzhen Zhongnong E-commerce Co., Ltd; director of information, director anddeputy GM of e-commerce center, deputy GM and GM of subordinate grain distribution center of ShenzhenCereals Group Co., Ltd. Now he serves as the deputy GM of Shenzhen Cereals Group Co., Ltd; executive directorof Shenliang Doximi Business Co., Ltd. And president of Shenzhen Sydata Technology Co., Ltd.
Mr. Meng Xiaoxian: born in 1972, master’s degree. He successively served as cadres of Shenzhen Youth LeagueSchool; member of the learning department of Shenzhen Municipal Committee of Communist Youth League,deputy director section of liaison department, director section of liaison department, director section of office,deputy director of organization and publicity department, director of office, director of community and rightsdepartment; deputy director of Pingshan New Area Public Utilities Bureau and director of Planning and LandSupervision Bureau of Shenzhen; deputy secretary of Pingshan Working Committee and director of PingshanOffice, Pingshan New District, Shenzhen; secretary of Malian Working Committee and director of Malian Office,Pingshan New District, Shenzhen; secretary of the working committee of Malian Sub-district, Pingshan District,Shenzhen, director and secretary of the working committee of Malian sub-district office of Communist Party ofCHina. Now he serves as deputy GM of the Company.
Mr. Du Jianguo: born in 1973, master’s degree and intermediate economist. He successively served as member ofcomprehensive control department of Qingdao Price Bureau; deputy director of general manager office ofShenzhen Agricultural Products Co., Ltd; president of Changsha Mawangdui Agricultural Products Co., Ltd;director of general manager’s office, director of Transportation department of Shenzhen Agricultural Products Co.,Ltd; president of Shenzhen Zhongnong Aquatic Products Co., Ltd; president of Shenzhen Buji Seafood MarketCo., ltd; employee supervisor and investment director of SZCH. Now he serves as secretary of the Board of theCompany; and president of Dongguan Shenliang Logistics Co., Ltd.
Post-holding in shareholder’s unit
√ Applicable□Not applicable
| Name | Name of shareholder’s units | Position | Start dated of office term | End date of office term | Weather receiving remuneration from shareholder’s units |
| Zhu Junming | Shenzhen Fude State Capital Operation Co., Ltd. (Later renamed "Shenzhen Food Group Co., Ltd.") | Executive Director, General Manager | 2017-12-14 | 2019-12-24 | N |
| Wang Li | Shenzhen Agricultural Products Group Co., Ltd | Director | 2018-09-17 | 2020-04-12 | Y |
| Ni Yue | Shenzhen Food Group Co., Ltd. | Chief financial officer | 2017-12-14 | N | |
| Explanation on post-holding in shareholder’s unit | N/A | ||||
Post-holding in other unit
√ Applicable □Not applicable
| Name | Name of other units | Position | Start dated of office term | End date of office term | Weather receiving remuneration from other units |
| Jin Zhenyuan | Shenzhen State-Owned Duty Free Commodity (Group) Co., Ltd. | Supervisor | 2017-05-01 | N | |
| Ni Yue | Shenzhen Bus Group Co., Ltd. | Director | 2017-08-01 | N | |
| Zhao Rubing | Bosera Funds Management Co., Ltd. | Director | 2017-12-01 | N | |
| Zhao Rubing | Guangdong Weihua Co., Ltd. | Independent director | 2016-10-01 | Y | |
| Zhao Rubing | Southwest Securities Co., Ltd. | Independent director | 2017-03-01 | Y | |
| Zhao Rubing | Bros Eastern Co., Ltd. | Independent director | 2015-05-01 | Y | |
| Liu Haifeng | Guangdong Hancheng Law Firm | First-level partner | 2007-02-01 | Y |
| Liu Ji | Hopewell Highway Infrastructure Limited | Executive Director, Deputy General Manager and Secretary of the Board | 2018-04-01 | Y | |
| Qian Wenying | Shenzhen Metro Group Co., Ltd. | Director of Policy Research Office | 2018-02-01 | Y | |
| Explanation on post-holding in other unit | N/A | ||||
Punishment of securities regulatory authority in recent three years to the Company’s current and outgoing directors, supervisors andsenior management during the reporting period
□ Applicable √Not applicable
IV. Remuneration for directors, supervisors and senior executivesDecision-making procedures, determination bases and actual payment of remunerations of directors, supervisorsand senior managementDuring the reporting period, according to the Company Performance Management Measures, the Company'sboard meeting remuneration and appraisal committee combined with the Company's annual business situation andindividual performance appraisal result and determined the senior management personnel salary.During the reporting period, from January to September 2019, the subsidiary standard of independent directors issubject to the resolution by the 2012 Annual General Meeting and adjusted as RMB 100,000 (tax included) peryear for one person; from October to December 2019, the subsidiary standard of independent directors is subjectto the resolution by the 2019 Fifth Extraordinary General Meeting and adjusted as RMB 138,000 (tax included)per year for one person;
Remuneration for directors, supervisors and senior executives in reporting period
In 10 thousand Yuan
| Name | Title | Sex | Age | Post-holding status | Total remuneration obtained from the Company | Whether remuneration obtained from related party of the Company |
| Zhu Junming | Party Secretary, President | M | 56 | Currently in office | 105 | N |
| Hu Xianghai | Deputy Party Secretary, Director, GM | M | 56 | Currently in office | 71.27 | N |
| Lu Qiguang | Deputy Party Secretary, Director | M | 58 | Currently in office | 70.19 | N |
| Jin Zhenyuan | Director, CFO | F | 49 | Currently in office | 50 | Y |
| Zhao Rubing | Independent director | M | 64 | Currently in office | 9.28 | N |
| Bi Weimin | Independent director | M | 64 | Currently in office | 9.28 | N |
| Liu Haifeng | Independent director | M | 49 | Currently in office | 9.28 | N |
| Wang Li | Director | M | 59 | Currently in office | 15 | Y |
| Ni Yue | Director | F | 46 | Currently in office | 15 | Y |
| Wang Huimin | SCID, Chairman of supervisory committee | F | 53 | Currently in office | 50.1 | Y |
| Liu Ji | Supervisor | M | 45 | Currently in office | 0 | N |
| Qian Wenying | Supervisor | F | 48 | Currently in office | 0 | Y |
| Zheng Shengqiao | Staff supervisor | M | 53 | Currently in office | 54.69 | N |
| Ma Zenghai | Staff supervisor | M | 56 | Currently in office | 32.67 | N |
| Cao Xuelin | Deputy GM | M | 56 | Currently in office | 69.33 | N |
| Dai Bin | Deputy GM | M | 56 | Currently in office | 69.48 | N |
| Meng Xiaoxian | Deputy GM | M | 48 | Currently in office | 14.09 | N |
| Du Jianguo | Secretary of the Board | M | 47 | Currently in office | 33.16 | N |
| Du Jianguo | Former Staff supervisor | M | 47 | Office-leaving | 16.11 | N |
| Wang Fangcheng | Former Secretary of the Board | M | 38 | Office-leaving | 14.23 | Y |
| Ye Qingyun | Former Deputy GM | M | 41 | Office-leaving | 32.71 | N |
| Zheng Yuxi | Former Party Secretary, Chairman | M | 58 | Office-leaving | 35.01 | N |
| Zhang Guodong | Former director | M | 58 | Office-leaving | 0 | Y |
| Fan Zhiqing | Former Independent director | M | 71 | Office-leaving | 1.67 | N |
| Wu Shuping | Former Independent director | M | 67 | Office-leaving | 1.67 | N |
| Chen Cansong | Former Independent director | M | 48 | Office-leaving | 1.67 | N |
| Yan Zesong | Former director, GM | M | 50 | Office-leaving | 32.5 | N |
| Li Yiyan | Former director, Deputy GM, Secretary of the Board | F | 54 | Office-leaving | 61.57 | N |
| Lin Hong | Former Chairman of supervisory committee | F | 55 | Office-leaving | 35.13 | N |
| Luo Longxin | Former Staff supervisor | M | 59 | Office-leaving | 34.15 | N |
| Qian Xiaojun | Former Deputy GM | M | 48 | Office-leaving | 11.63 | N |
| Yao Xiaopeng | Former Deputy GM | M | 52 | Office-leaving | 36.39 | N |
| Wang Zhiping | Former CFO | F | 49 | Office-leaving | 37.96 | N |
| Total | -- | -- | -- | -- | 1,030.22 | -- |
Delegated equity incentive for directors, supervisors and senior executives in reporting period
□ Applicable √Not applicable
V. Particulars of workforce
1. Number of Employees, Professional composition, Education background
| Employee in-post of the parent Company(people) | 104 |
| Employee in-post of main Subsidiaries (people) | 1,085 |
| The total number of current employees(people) | 1,189 |
| The total number of current employees to receive pay (people) | 1,189 |
| Retired employee’ s expenses borne by the parent Company and main Subsidiaries(people) | 1 |
| Professional composition | |
| Category of professional composition | Numbers of professional composition (people) |
| Production personnel | 461 |
| Salesperson | 145 |
| Technicians | 85 |
| Financial personnel | 107 |
| Administrative personnel | 391 |
| Total | 1,189 |
| Education background | |
| Education | Numbers (people) |
| Postgraduate | 100 |
| Undergraduate | 407 |
| 3-years regular college graduate | 247 |
| Polytechnic school graduate | 90 |
| Senior middle school graduate or below | 345 |
| Total | 1,189 |
2. Remuneration Policy
During the reporting period, employee wages was paid monthly according to salary management provisions set bythe Company, and the performance-related pay was issued based on the actual situation of benefit and individualperformance assessment results at the year-end, remuneration and benefit are connected as a whole.
3. Training Plan
In order to implement the work of strengthening the enterprise with talents, promote the growth of various talentsof the company, and enhance the capacity building of the enterprise’s talent echelon, in 2019, we fully drew on theexcellent experience of the industry, established a classified and graded talent training program, and created“Youhe Plan” for management trainee, “Daoxiang Plan” for reserve talents, and “Jinsui Plan” for key positiontalents, and gradually built a “talent pyramid” from management trainee, reserve talents to key position talents.Through multi-channel and diversified training forms, we focused on systematic training centered on managementtrainee, reserve talents, and middle-level management personnel, and took a solid step in the professional andsystematic direction of talent training. At the same time, it constantly enriched the form of employee training,actively organized employees to participate in various training organized by the Municipal SASAC, theOrganization Department, the Propaganda Department, and higher-level industry associations, and also carries outspecial training such as labor laws and regulations, enterprise risk prevention and control, and new accountingstandards within the company to improve employees’ professional abilities at multiple levels and angles, whichgreatly enhanced the company’s professional level and ability of personnel training, achieved efficient use ofresources, and provided a continuous source of intelligence for the company’s development.
According to the company’s business development and talent echelon construction needs, in 2020 the companywill focus on improving the supporting role of human resource management in the company’s strategy inaccordance with the strategic goal of “smart grain, oil and food supply chain quality service provider” andcombining with the “one chain two parks N platforms” strategic path and actual business conditions. Strengthenthe cultivation of talents at all levels, through the exploration of diversified training models, make full use of theInternet platform, further promote the company’s training management systemaltization and professionalization,and further promote the company’s innovation-driven development and the implementation of strategy of talents
strengthening enterprise.
4. Labor outsourcing
□ Applicable√Not applicable
Section X. Corporate governanceI. Brief introduction of corporate governanceDuring the reporting period, the Company constantly improved the corporate governance structure, improved thequality of corporate governance, and established a sound internal control system, strictly in accordance withcorporate governance requirements of normative documents released by the “Company Law“,”Securities Law,Corporate Governance Guidelines“and”Standardize Operational Guidelines to Main Board Listed Companies ofShenzhen Stock Exchange. The Company continued to carry out the governance activities, improved the standardoperation level, and safeguarded the legitimate interests of the Company and investors.(i) Accountability among Shareholders’ General Meeting, the Board of Directors and Supervisors were clear, westrictly implemented the rules from the "Articles of Association" during the reporting period as well as workregulations and other basic management system to ensure the effective implementation of the internal controlsystem.(ii) In reporting period, governance mechanism formulated and revised by the Company are as:
The Special Proposal of Article of Association Revision has deliberated and approved in 2019 First ExtraordinaryGeneral Meeting held on 18 January 2019, found more in the Article of Association (January 2019) released onJuchao Website (www.cninfo.com.cn) dated 19 January 2019.The Special Proposal of Article of Association Revision has deliberated and approved in 2019 SecondExtraordinary General Meeting held on 30 January 2019, found more in the Article of Association (January 2019)released on Juchao Website (www.cninfo.com.cn) dated 31 January 2019.26 system documents including the Work Regulations of the Nomination Committee of the Board has deliberatedand approved in 3
rd session of 10
thBOD held on 25 April 2019, found more in the Work Regulations of theNomination Committee of the Board (April 2019) released on Juchao Website (www.cninfo.com.cn) dated 27April 2019.
4 system documents including the Independent Director System has deliberated and approved in 2019 FourthExtraordinary Shareholders’ General Meeting held on 11 September 2019, found more in the IndependentDirector System (September 2019) released on Juchao Website (www.cninfo.com.cn) dated 12 September 2019.Proposal to revise the company's enterprise annuity plan has deliberated and approved in 7
th
session of 10
thBODheld on 30 December 2019, found more in the announcement released on Juchao Website (www.cninfo.com.cn)dated 31 December 2019.
The Company received no relevant documents with administrative regulation concerned from supervisiondepartment in reporting period, and has no particular about rectification within a time limit. From point of theBoard, corporate governance of the Company shows no difference to requirement from relevant documents withactual condition.
Is there any difference between the actual condition of corporate governance and relevant regulations aboutcorporate governance for listed Company from CSRC?
□ Yes √ No
There are no differences between the actual condition of corporate governance and relevant regulations aboutcorporate governance for listed Company from CSRC.II. Independence of the Company in aspect of business, personnel, assets, institute and financerelative to its controlling shareholderBy the end of the reporting period, Food Group is the actual controller of the Company with 63.79 percent sharesheld. The Company, in strict accordance with the governance rules of listed corporate and other relevantprovisions, completely separates from the controlling shareholders in business, finance, personnel, assets,organizations, and has independent full business and self management ability.
1. Independent Business:
The business of the Company is independent from controlling shareholders and has complete business and selfmanagement ability, not depends on the shareholders and their affiliated enterprises, which has no competitionwith controlling shareholder and its subordinate enterprises. The controlling shareholder has no direct or indirectintervention in the Company business activities.
2. Independent Staff:
The Company has special organization to manage labor and payment, and has independent perfect personnelsystem and collective management system. General Manager of the Company as well s deputy GM, secretary ofthe Board, CFO and other senior executives are received remuneration from the Company, and are not receivedremuneration from shareholders’ unit and subordinate enterprises and holding the post except director orsupervisor.
3. Independent Assets:
The Company has independent and integrity asset structure; there is no controlling shareholder's non businessoccupation of money and the property.
4. Independent Organization:
The Company has set up a sound organizational structure system and operates independently; there is no mixedoperation between the Company and controlling shareholders.
5. Financial Independent:
The Company, with independent financial department, has set up independent accounting system and financialmanagement system and makes financial decision independently. With independent bank accounts, tax payment,the Company strictly follows the financial system and has independent operation and standardized management.III. Horizontal Competition
□ Applicable √Not applicable
IV. In the report period, the Company held annual general meeting and extraordinaryshareholders’ general meeting
1. Annual General Meeting in the report period
| Session of meeting | Type | Ratio of investor participation | Date | Date of disclosure | Index of disclosure |
| First extraordinary general meeting of 2019 | Extraordinary general meeting | 63.83% | 2019-01-18 | 2019-01-19 | Disclosed at www.cninfo.com.cn on No. 2019-10" resolutions Announcement to First extraordinary general meeting of 2019" on 19 January 2019 |
| Second extraordinary general meeting of 2019 | Extraordinary general meeting | 63.83% | 2019-01-30 | 2019-01-31 | Disclosed at www.cninfo.com.cn on No. 2019-14" resolutions Announcement to Second extraordinary general meeting of 2019" on 31 January 2019 |
| Third extraordinary general meeting of 2019 | Extraordinary general meeting | 63.82% | 2019-02-21 | 2019-02-22 | Disclosed at www.cninfo.com.cn on No. 2019-21" resolutions Announcement to Third extraordinary general meeting of 2019" on 22 February 2019 |
| Annual General Meeting of 2018 | AGM | 63.80% | 2019-05-20 | 2019-05-21 | Disclosed at www.cninfo.com.cn on No. 2019-45" resolutions Announcement to 2018 Annual General Meeting of Shenzhen Shenbao Industrial Co., Ltd. " on 21 May 2019 |
| Fourth extraordinary general meeting of 2019 | Extraordinary general meeting | 63.80% | 2019-09-11 | 2019-09-12 | Disclosed at www.cninfo.com.cn on No. 2019-63" resolutions Announcement to Fourth extraordinary general meeting of 2019" on 12 September 2019 |
| Fifth extraordinary general meeting of 2019 | Extraordinary general meeting | 63.81% | 2019-11-15 | 2019-11-16 | Disclosed at www.cninfo.com.cn on No. 2019-72" resolutions Announcement to Fifth extraordinary general meeting of 2019" on 16 November 2019 |
2. Request for extraordinary general meeting by preferred stockholders whose voting rights restore
□ Applicable √Not applicable
V. Responsibility performance of independent directors
1. The attending of independent directors to Board meetings and general meeting
| The attending of independent directors | |||||||
| Name of independent director | Times of Board meeting supposed to attend in the report period | Times of Presence | Times of attending by communication | Times of entrusted presence | Times of Absence | Absent the Meeting for the second time in a row (Y/N) | Times of attending shareholders’ meeting |
| Zhao Rubing | 7 | 7 | 0 | 0 | 0 | N | 1 |
| Bi Weimin | 7 | 5 | 2 | 0 | 0 | N | 0 |
| Liu Haifeng | 7 | 7 | 0 | 0 | 0 | N | 1 |
| Fan Zhiqing | 3 | 1 | 2 | 0 | 0 | N | 1 |
| Wu Shuping | 3 | 0 | 3 | 0 | 0 | N | 1 |
| Chen Cansong | 3 | 1 | 2 | 0 | 0 | N | 0 |
Explanation of absent the Board Meeting for the second time in a row:
Nil
2. Objection for relevant events from independent directors
Independent directors come up with objection about Company’s relevant matters
□ Yes √ No
Independent directors has no objections for relevant events in reporting period
3. Other explanation about responsibility performance of independent directors
The opinions from independent directors have been adopted
√ Yes □ No
Explanation on advice that accepted/not accepted from independent directors
During the reporting period, independent directors of the Company was in strict accordance with relevant lawsfrom the "Articles of Association", the "Company Law", "Guidance to Establishment of Independent DirectorSystem in Listed Companies ", and actively attended board meetings, shareholders' meetings. We issuedindependent professional opinion for important issues. And we sustained attention to the operating, inspected andguided the management work from time to time, learned about internal control system, implementation progressof the equity investment project, etc., and continue to enhance consciousness of performing duties according tolaw, express independent and impartial advice for investment outside, related party transactions, hiring auditorsand other matters occurred during the reporting period in time. Duties performance of independent directors hasimproved the corporate governance structure and safeguarded the interests of the Company and its shareholders.From performance of duties of Independent Directors please note from “2019 Annual Work Report of Independent
Directors” detailed in www.cninfo.com.cn on disclosure.VI. Performance of Duties by Specialized Committees under the Board Meeting in theReporting Period
1. Performance of Duties by the Auditing Committee
In the reporting period, totally four meetings are held by auditing committee for annual report of the Company,Annual Report 2018, First Quarterly Report of 2019, semi-annual report 2019, the financial report of 3
rdquarterlyreport 2019, proposals for impairment provision, comprehensive risk management report, audit committee annualreport working procedures, accounting policies deliberation; and confirmed that the financial report satisfyrequirement of Accounting rules and present a fair and complete financial status, operation results and cash flowof the Company; examined the construction progress of internal control, carried a professional opinions for theauditing institution appointed outside the Company, guarantee the Company finished auditing on schedule.Auditing committee of the Company earnestly following the principle of diligence, play a supervise role in fulland protect the independency of the auditing.
2. Performance of Duties by the Remuneration and Appraisal Committee
During the reporting period, the Remuneration and Appraisal Committee of the Board of Directors held fivemeetings, according to the provisions of the “Company Compensation Management Measures” and “CompanyPerformance Management Measures”, listened to the company management’s annual report of 2018 and evaluatedit, verified the 2018 performance coefficient of the company headquarters, and assessed the remuneration of 2018for the company’s directors and senior management personnel, reviewed and approved the working rules andregulations of the Remuneration and Appraisal Committee, special contribution award management methods,salary management methods, performance management methods, and executive management performanceresponsibility letter of 2019, revised enterprise annuity plan and company’s total remuneration determinationmechanism, adjusted the allowance standards for independent directors, the division of executive managementperformance responsibility letter in 2019, and the executive performance evaluation coefficient.
3. Performance of Duties by the Nomination Committee
During the reporting period, the Nominations Committee of the Board of Directors convened two meetings inaccordance with the stipulations of the “Work Regulations on the Nominations Commission of the Board ofDirectors of the Company”, which examined and approved the nomination of candidates for the tenth board ofdirectors of the company and reviewed their qualifications, and revised the working regulations of the nominationcommittee.
4. Performance of Duties by the Strategy Committee
During the reporting period, the strategy committee of the Board held four meetings, according to the"Regulations on the Work of the Strategy Committee of the Board of Directors of the Company", the resolutionson adjustment of the follow-up investment of industrial funds, the work regulations of the Strategy Committee, theproposed subsidiary Dongguan Logistics' issuance of perpetual bonds, and the company's 2020 comprehensivebudget draft were reviewed and approved.
VII. Works from Supervisory Committee
Whether the Company has risks or not in reporting period that found in supervisory activity from supervisorycommittee
□ Yes √ No
The Supervisory Board has no objection to the supervision matters during the reporting period.
VIII. Appraisal and incentive mechanism for senior executivesThe performance evaluation of the company’s senior management personnel is comprehensively evaluated by theremuneration and appraisal committee under the company’s board of directors in accordance with the “CompanyRemuneration Management Measures” and “Company Performance Management Measures” based on thecompany’s overall operating performance results and the achieved status of management indicators in the year,and use this as the basis for senior management compensation adjustment and rewards, and report to the board ofdirectors and general meeting of shareholders for approval after implementation.The 7
thmeeting of the tenth board of directors of the company and the first extraordinary general meeting ofshareholders in 2020 reviewed and approved the “Company’s Total Remuneration Decision Mechanism”, andagreed the company to establish the company’s total remuneration decision mechanism in accordance withrelevant system requirements and combined with the “Double Hundred Action” state-owned enterprises reformimplementation plan and the actual situation of the enterprise. Based on excess value creation, established a salarymechanism by taking value creation as the guidance and incremental performance determining incrementalcompensation, and realized the two-way link between employee income and corporate performance; with strategicgoals as the traction, established executive restraint and incentive mechanisms to fully reflect strategic guidance,which was conducive to promoting the continuous improvement of quality and efficiency of enterprises andachieving high-quality and sustainable development. In the follow-up, the company will further explore aneffective incentive mechanism to fully mobilize the initiative and enthusiasm of the management, therebypromoting the company’s sustainable and stable development.IX. Internal control
1. Details of major defects in IC appraisal report that found in reporting period
□ Yes √ No
2. Self-appraisal Report of Internal Control
| Disclosure date of full internal control evaluation report | 2020-04-28 |
| Disclosure index of full internal control evaluation report | “Internal control self evaluation report of SHENZHEN CEREALS HOLDINGS CO., LTD. in 2019” published on Juchao Website (http：//www.cninfo.com.cn) |
| The ratio of the total assets of units included in the scope of evaluation accounting for the total assets on the Company's consolidated financial statements | 61.42% | |
| The ratio of the operating income of units included in the scope of evaluation accounting for the operating income on the Company's consolidated financial statements | 93.00% | |
| Defects Evaluation Standards | ||
| Category | Financial Reports | Non-financial Reports |
| Qualitative criteria | 1. Major defects: Defect alone or together with other defects in a timely manner cause unpreventable or undetectable and uncorrectable material misstatement in the financial statements. The Company may indicate the presence of significant deficiencies in internal control over financial reporting if following circumstances: (1) The directors, supervisors and senior management fraud; (2) Enterprise corrected mistake which has been published in financial statements; (3) CPA found material misstatement in current financial statements, but internal control during operation failed to find the misstatements; (4) Oversight of internal control by Corporate Audit Committee and the internal audit is invalid; (5) Particularly important or significant deficiencies found during internal control has not been rectified; (6) The lack of business-critical system or invalid system. 2. Important defect: defect alone or together with other defects in a timely manner cause unpreventable or undetectable and uncorrectable material misstatement in the financial statements, although not reach and exceed the level of importance, should lead to management attention misstatements. 3. General Defects: other internal defects do not pose a significant or important defect control deficiencies. | 1.Qualitative criteria for major defects are as follows: (1) The lack of democratic decision-making process, such as the lack of decision-making on major issues, an important appointment and dismissal of cadres, major investment decisions, large sums of money using the decision-making process; (2) Decision-making process is not scientific, such as major policy mistakes, resulting in significant property damage to the Company; (3) Serious violations of national laws and regulations; (4) Loss of key executives or loss of a large number of key talent; (5) Negative media news is frequent, And cause nationwide impact. 2. The qualitative criteria for important defects are as follows: (1) The decision-making process is not perfect; (2)The company’s internal management system has not been effectively implemented, resulting in losses; (3) The media’s negative news is frequent and has certain influence; (4) The general defects in the internal control evaluation have not been corrected. 3. General defects refer to other internal control defects that do not constitute major defects or important defects. |
| Quantitative standard | General Defects: reported wrongly <0.5% of total capital, reported wrongly<0.5% of operating income, reported wrongly<2.5% of total profit; Important flaw: 0.5% of total assets ≤ reported wrongly <1% of total assets, 0.5% of operating income≤ misstatements <1% of operating income, 2.5% of total profit≤ misstatements <5% of total profit; Major flaw: misstatement ≥ 1% of total assets, misstatements ≥ 1% of operating income, misstatements ≥ 5% of total profit. | General defects: the amount of direct property loss ≤ 1.5 million yuan, punished by the provincial (including provincial) government but the Company disclosed in periodic reports on the negative impact; Important flaw: 1.5 million yuan < the amount of direct property loss < 5 million yuan, punished by the state government but the Company disclosed in periodic reports on the negative impact; Major flaw: the amount of direct property loss ≥ 5 million yuan, have been officially disclosed outside the Company disclosed in periodic reports and adversely affected. |
| Amount of significant defects in financial reports | 0 | |
| Amount of significant defects in non-financial reports | 0 | |
| Amount of important defects in financial reports | 0 | |
| Amount of important defects in non-financial reports | 0 | |
X. Audit report of internal control
√ Applicable□Not applicable
| Deliberations in Internal Control Audit Report | |
| BDO China Shu Lun Pan Certified Public Accountant LLP believes the Company was in accordance with the "basic norms of internal control" and the relevant provisions and maintained effective internal control of financial reporting in all material respects on 31 December 2019. | |
| Disclosure details of audit report of internal control | Disclosed |
| Disclosure date of audit report of internal control (full-text) | 2020-04-28 |
| Index of audit report of internal control (full-text) | “Internal control audit report of SHENZHEN CEREALS HOLDINGS CO., LTD. in 2019” published on Juchao Website (www.cninfo.com.cn) |
| Opinion type of auditing report of IC | Standard unqualified |
| Whether the non-financial report had major defects | No |
Whether modified audit opinions carried out for the audit report of internal control from CPA or not
□ Yes √ No
Whether audit report of internal control, issued by CPA, is in agreement with self-evaluation report, issued by the Board
√ Yes □ No
Section XI. Corporate BondWhether the Company has a corporation bonds that issuance publicly and listed on stock exchange and without due on the date whenannual report approved for released or fail to cash in full on dueNo
Section XII. Financial ReportI. Audit Report
| Type of audit opinion | Standard unqualified opinion |
| Signing date of audit report | 2020-04-24 |
| Name of audit institute | BDO China Shu Lun Pan Certified Public Accountant LLP |
| Document serial of audit report | BDO CPAs Zi[2020]No. ZL10116 |
| Name of the CPA | Qi Tao, Zhang Wanbin |
Text of auditing reportAuditor’s Report
BDO CPAs Zi[2020]No. ZL10116
To all shareholders of SHENZHEN CEREALS HOLDINGS CO., LTD.:
I. Auditing opinionsWe have audited the financial statement under the name of SHENZHEN CEREALS HOLDINGS CO., LTD.(hereinafter referred to as SZCH Company), including the consolidated and parent Company’s balance sheet of 31December 2019 and profit statement, and cash flow statement, and statement on changes of shareholders’ equityfor the year ended, and notes to the financial statements for the year ended.In our opinion, the Company’s financial statements have been prepared in accordance with the AccountingStandards for Business Enterprises, and they fairly present the financial status of the Company and of its parentcompany as of 31 December 2019 and its operation results and cash flows for the year ended.II. Basis of opinionWe conducted our audit in accordance with the Auditing Standards for Certified Public Accountants of China. Ourresponsibilities under those standards are further described in the “Auditor’s Responsibilities for the Audit of theFinancial Statements” section of the auditor’s report. We are independent of the Company in accordance with theCertified Public Accountants of China’s Code of Ethics for Professional Accountants, and we have fulfilled ourother ethical responsibilities in accordance with the Code. We believe that the audit evidence we have obtained issufficient and appropriate to provide a basis for our opinion.III. Key audit mattersKey audit matters are those matters that, in our professional judgment, were of most significance in our audit of
the financial statements of the current period. These matters were addressed in the context of our audit of thefinancial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion onthis matters.We identified the following key audit issues that need to be communicated in the audit report.
| Key audit matters | How to deal with the matter in audit |
| (i) Revenue confirmation | |
| Details and analysis of accounting policy of revenue recognition found more in the (21) Accounting policy in Note III. Important accounting policy and estimation and (37) in Note V. Annotation to main items of consolidated financial statements. SZCH Company achieved operating revenue in 2019 is 11059.9843 million yuan, including: 10612.4781 million yuan from grain and oil business, accounting for 95.95% of the operating revenue. The income from grain and oil business has a significant impact on the financial statement, and it is one of the key index of performance of SZCH, meanwhile, it is one of the important indicators of performance commitment performance assessment of the Shenzhen Cereals Group Co. Ltd- the wholly-owned subsidiary of SZCH, which has a special risks in manipulation for achieving the predicted target, therefore, the identify of operating income will be listed as the key auditing event. | The main audit procedures we implemented for the inventory and inventory falling price reserves include: (1) Understood, evaluated and tested the internal control design and implementation related to revenue recognition of SZCH Company; (2) check the main sales contracts, identify terms related to transfer of the main risks and rewards on the ownership of goods, and evaluate whether the revenue recognition policy conforms to the Accounting Standards for Business Enterprise; (3)carry out substantive analysis procedures for operating revenue and gross profit rate by month, products, etc., identify whether there is significant or abnormal fluctuation, and review the rationality of revenue; (4) we use sampling method to check the supporting documents related to revenue recognition, including sales contract, sales invoice, delivery order, goods right transfer document and accounting voucher, etc.; (5)in combination with the L/C receivable, confirm the sales volume of the current period to the main customers by sampling; (6)carry out a cut-off test on the business income recognized before and after the balance sheet date to assess whether the business income is recognized in the appropriate accounting period. |
| (ii) Inventory and inventory falling price reserves | |
| Details and analysis of accounting policy of inventory and inventory impairment found more in the (10) Accounting policy in Note III. Important accounting policy and estimation and (8) in Note V. Annotation to main items of consolidated financial statements. As of December 31, 2019, the inventory book balance presented on the consolidated financial statements of SZCH Company was 3192.2283 million yuan, and the amount of inventory falling price reserves was 127.5271 million yuan, book value of inventories was 3064.7012 million yuan, accounting for 45.23% of the total assets. Inventory is measured at the lower one between the cost and the net | The main audit procedures we implemented for the inventory and inventory falling price reserves of SZCH Company include: (1) Understood, evaluated and tested the internal control design and implementation related to inventory falling price reserves of SZCH Company; (2) We performed the inventory monitoring procedures for inventory, and checked the quantity and condition; (3) Acquired the calculation table of inventory falling price reserve, implemented the inventory impairment test procedure, and analyzed whether provision for inventory falling |
| realizable value, due to the large amount of money of inventory, the management needed to make significant judgments when determining the decrease in value of inventory, including the consideration of government reserve as grain & oil, food and vegetable oil included, that affected by futures market, these important judgments have a significant impact on the valuation of inventory and provision for inventory depreciation at period-end; therefore, we determined the inventory and inventory falling price reserves as key audit matters. | price reserves was sufficient; (4) We obtained the year-end inventory age list, conducted an analytical review of the inventory with long inventory age combine with the condition of products, and analyzed whether inventory falling price reserves was sufficient; (5) For the products that can obtain the selling price in open market, select samples, independently query the public market price information and compare it with the estimated selling price. |
IV. Other informationThe management of SZCH Company (Hereinafter referred to as management) is responsible for other informationwhich includes the information covered in the Company’s 2018 annual report excluding the financial statementand our audit report.The audit opinion issued by us for the financial statement has not covered other information, for which we do notissue any form of assurance opinions.Considering our audit on financial statements, we are liable to read other information, during which, we shallconsider whether other information differs materially from the financial statements or that we understand duringour audit, or whether there is any material misstatement.Based on the works executed by us, we should report the fact if we find any material misstatement in otherinformation. In this regards, we have nothing to report.V. Responsibilities of management and those charged with governance for the financial statementsThe management of SZCH Company is responsible for the preparation of the financial statements in accordancewith the Accounting Standards for Enterprise to secure a fair presentation, and for the design, establishment andmaintenance of the internal control necessary to enable the preparation of financial statements that are free frommaterial misstatement, whether due to fraud or error.In preparing the financial statements, the management is responsible for assessing the Company’s ability tocontinue as a going concern (if applicable), disclosing matters related to going concern and using the goingconcern assumption unless the management either intends to liquidate the Company or to cease operations, or hasno realistic alternative but to do so.Those charged with governance are responsible for overseeing the Company’s financial reporting process.VI. Responsibilities of the auditor for the financial statementsOur objectives are to obtain reasonable assurance about whether the financial statements as a whole are free frommaterial misstatement, whether due to fraud or error, and to issue an audit report that includes our audit opinion.Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordancewith the CAS will always detect a material misstatement when it exists. Misstatements can arise from fraud orerror and are considered material if, individually or in the aggregate, they could reasonably be expected to
influence the economic decisions of users taken on the basis of the financial statements.As part of an audit in accordance with the CAS, we exercise professional judgment and maintain professionalskepticism throughout the audit. We also:
(1) Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error,design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient andappropriate to provide a basis for audit opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions,misrepresentations, or the override of internal control.
(2) Obtain an understanding of internal control relevant to the audit in order to design audit procedures that areappropriate in the circumstances.
(3) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates andrelated disclosures made by the management.
(4) Conclude on the appropriateness of the management’s use of the going concern assumption and, based on theaudit evidence obtained, whether a material uncertainty exists related to events or conditions that may castsignificant doubt on the Company’s ability to continue as a going concern. If we conclude that a materialuncertainty exists, we are required by the CAS to draw users’ attention in audit report to the related disclosures inthe financial statements or, if such disclosures are inadequate, to modify audit opinion. Our conclusions are basedon the information obtained up to the date of audit report. However, future events or conditions may cause theCompany to cease to continue as a going concern.
(5) Evaluate the overall presentation, including the disclosures, structure and content of the financial statementsand whether the financial statements represent the underlying transactions and events in a manner that achievesfair presentation.
(6) Obtain sufficient appropriate audit evidence regarding the financial information of the entities or businessactivities within the Company to express audit opinion on the financial statements. We are responsible for thedirection, supervision and performance of the group audit. We remain solely responsible for audit opinion.We communicate with those charged with governance regarding, among other matters, the planned scope andtiming of the audit and significant audit findings, including any significant deficiencies in internal control that weidentify during our audit.We also provide those charged with governance with a statement that we have complied with relevant ethicalrequirements regarding independence, and communicate with them all relationships and other matters that mayreasonably be thought to bear on our independence, and relevant countermeasures (if applicable).From the matters communicated with those charged with governance, we determine those matters that were ofmost significance in the audit of the financial statements of the current period and are therefore the key auditmatters. We describe these matters in the auditor’s report unless law or regulation precludes public disclosureabout the matter or when, in extremely rare circumstances, we determine that a matter should not becommunicated in the auditor’s report because of the adverse consequences of doing so would reasonably beexpected to outweigh the public interest benefits of such communication.
BDO China Shu Lun Pan CPAs Chinese CPA：Qi Tao (Engagement partner)(LLP)
Chinese CPA:：Zhang Wanbin
Shanghai· China 24 April 2020
II. Financial StatementStatement in Financial Notes are carried in RMB/CNY
1. Consolidated balance sheet
Prepared by SHENZHEN CEREALS HOLDINGS CO., LTD.
2019-12-31
In RMB
| Item | 2019-12-31 | 2018-12-31 |
| Current assets: | ||
| Monetary funds | 154,954,757.85 | 631,638,339.68 |
| Settlement provisions | ||
| Capital lent | ||
| Tradable financial assets | 1,166,209.72 | |
| Financial assets measured by fair value and with variation reckoned into current gains/losses | 1,124,927.96 | |
| Derivative financial assets | ||
| Note receivable | 1,909,720.38 | 1,027,635.04 |
| Account receivable | 338,687,766.68 | 473,646,886.64 |
| Receivable financing | ||
| Accounts paid in advance | 9,202,930.71 | 83,696,870.07 |
| Insurance receivable | ||
| Reinsurance receivables |
| Contract reserve of reinsurance receivable | ||
| Other account receivable | 25,758,695.07 | 33,803,428.45 |
| Including: Interest receivable | 561,500.00 | |
| Dividend receivable | ||
| Buying back the sale of financial assets | ||
| Inventories | 3,064,701,212.14 | 2,811,802,600.19 |
| Contractual assets | ||
| Assets held for sale | ||
| Non-current asset due within one year | ||
| Other current assets | 468,174,380.40 | 254,493,764.04 |
| Total current assets | 4,064,555,672.95 | 4,291,234,452.07 |
| Non-current assets: | ||
| Loans and payments on behalf | ||
| Debt investment | ||
| Finance asset available for sales | 57,500.00 | |
| Other debt investment | ||
| Held-to-maturity investment | ||
| Long-term account receivable | ||
| Long-term equity investment | 73,361,312.10 | 70,999,666.81 |
| Investment in other equity instrument | ||
| Other non-current financial assets | 57,500.00 | |
| Investment real estate | 269,704,937.17 | 282,622,184.92 |
| Fixed assets | 945,042,032.69 | 993,136,743.51 |
| Construction in progress | 771,971,469.43 | 186,586,135.06 |
| Productive biological asset | 397,386.56 | 407,078.92 |
| Oil and gas asset | ||
| Right-of-use assets | ||
| Intangible assets | 589,167,059.47 | 569,997,392.08 |
| Expense on Research and Development | ||
| Goodwill |
| Long-term expenses to be apportioned | 19,855,228.69 | 21,799,899.80 |
| Deferred income tax asset | 39,082,710.96 | 50,174,590.98 |
| Other non-current asset | 1,871,965.84 | 1,936,149.72 |
| Total non-current asset | 2,710,511,602.91 | 2,177,717,341.80 |
| Total assets | 6,775,067,275.86 | 6,468,951,793.87 |
| Current liabilities: | ||
| Short-term loans | 23,595,000.00 | 91,600,000.00 |
| Loan from central bank | ||
| Capital borrowed | ||
| Trading financial liability | ||
| Financial liability measured by fair value and with variation reckoned into current gains/losses | ||
| Derivative financial liability | ||
| Note payable | ||
| Account payable | 266,123,470.98 | 472,738,283.80 |
| Accounts received in advance | 137,211,832.00 | 205,428,594.16 |
| Contractual liability | ||
| Selling financial asset of repurchase | ||
| Absorbing deposit and interbank deposit | ||
| Security trading of agency | ||
| Security sales of agency | ||
| Wage payable | 195,076,576.55 | 135,709,423.52 |
| Taxes payable | 37,047,613.47 | 24,969,718.58 |
| Other account payable | 236,377,171.13 | 280,689,548.29 |
| Including: Interest payable | 1,411,457.29 | |
| Dividend payable | 2,933,690.04 | 2,909,182.74 |
| Commission charge and commission payable | ||
| Reinsurance payable | ||
| Liability held for sale | ||
| Non-current liabilities due within one year | 67,420,012.16 | 55,090,793.79 |
| Other current liabilities | 219,151,968.63 | 219,151,968.63 |
| Total current liabilities | 1,182,003,644.92 | 1,485,378,330.77 |
| Non-current liabilities: | ||
| Insurance contract reserve | ||
| Long-term loans | 835,912,556.41 | 516,687,791.66 |
| Bonds payable | ||
| Including: Preferred stock | ||
| Perpetual capital securities | ||
| Lease liability | ||
| Long-term account payable | 15,856,950.01 | 15,690,202.08 |
| Long-term wages payable | ||
| Accrual liability | 3,500,000.00 | |
| Deferred income | 101,792,241.31 | 100,608,203.01 |
| Deferred income tax liabilities | 12,563,752.22 | 12,988,434.77 |
| Other non-current liabilities | ||
| Total non-current liabilities | 969,625,499.95 | 645,974,631.52 |
| Total liabilities | 2,151,629,144.87 | 2,131,352,962.29 |
| Owner’s equity: | ||
| Share capital | 1,152,535,254.00 | 1,152,535,254.00 |
| Other equity instrument | ||
| Including: Preferred stock | ||
| Perpetual capital securities | ||
| Capital public reserve | 1,422,892,729.36 | 1,422,892,729.36 |
| Less: Inventory shares | ||
| Other comprehensive income | ||
| Reasonable reserve | 522.55 | 154.21 |
| Surplus public reserve | 350,187,601.06 | 327,140,910.28 |
| Provision of general risk | ||
| Retained profit | 1,495,135,080.60 | 1,269,933,487.26 |
| Total owner’ s equity attributable to parent company | 4,420,751,187.57 | 4,172,502,535.11 |
| Minority interests | 202,686,943.42 | 165,096,296.47 |
| Total owner’ s equity | 4,623,438,130.99 | 4,337,598,831.58 |
| Total liabilities and owner’ s equity | 6,775,067,275.86 | 6,468,951,793.87 |
Legal Representative: Zhu JunmingPerson in charge of accounting works: Jin ZhenyuanPerson in charge of accounting institute: Wen Jieyu
2. Balance Sheet of Parent Company
In RMB
| Item | 2019-12-31 | 2018-12-31 |
| Current assets: | ||
| Monetary funds | 16,272,394.90 | 168,900,586.84 |
| Tradable financial assets | 1,166,209.72 | |
| Financial assets measured by fair value and with variation reckoned into current gains/losses | 1,124,927.96 | |
| Derivative financial assets | ||
| Note receivable | ||
| Account receivable | 7,967.34 | 42,441,119.07 |
| Receivable financing | ||
| Accounts paid in advance | ||
| Other account receivable | 994,149,247.39 | 159,677,969.59 |
| Including: Interest receivable | ||
| Dividend receivable | 260,000,000.00 | |
| Inventories | 2,954,343.26 | 8,806,338.26 |
| Contractual assets | ||
| Assets held for sale | ||
| Non-current assets maturing within one year | ||
| Other current assets | 675,966.29 | 50,068,745.74 |
| Total current assets | 1,015,226,128.90 | 431,019,687.46 |
| Non-current assets: | ||
| Debt investment | ||
| Available-for-sale financial assets | ||
| Other debt investment |
| Held-to-maturity investments | ||
| Long-term receivables | ||
| Long-term equity investments | 3,715,425,854.77 | 4,212,554,063.36 |
| Investment in other equity instrument | ||
| Other non-current financial assets | ||
| Investment real estate | 17,458,094.37 | 17,929,684.70 |
| Fixed assets | 31,382,741.25 | 31,417,912.54 |
| Construction in progress | ||
| Productive biological assets | 397,386.56 | 407,078.92 |
| Oil and natural gas assets | ||
| Right-of-use assets | ||
| Intangible assets | 6,787,359.94 | 6,663,692.30 |
| Research and development costs | ||
| Goodwill | ||
| Long-term deferred expenses | 380,772.60 | 409,621.50 |
| Deferred income tax assets | 5,630,538.80 | |
| Other non-current assets | ||
| Total non-current assets | 3,771,832,209.49 | 4,275,012,592.12 |
| Total assets | 4,787,058,338.39 | 4,706,032,279.58 |
| Current liabilities | ||
| Short-term borrowings | ||
| Tradable financial liability | ||
| Financial liability measured by fair value and with variation reckoned into current gains/losses | ||
| Derivative financial liability | ||
| Notes payable | ||
| Account payable | 115,458.38 | 73,705,646.54 |
| Accounts received in advance | 3,137.80 | 124,945.74 |
| Contractual liability | ||
| Wage payable | 17,230,138.89 | 6,448,561.16 |
| Taxes payable | 2,607,719.37 | 2,702,655.24 |
| Other accounts payable | 257,459,190.14 | 232,109,084.76 |
| Including: Interest payable |
| Dividend payable | ||
| Liability held for sale | ||
| Non-current liabilities due within one year | ||
| Other current liabilities | ||
| Total current liabilities | 277,415,644.58 | 315,090,893.44 |
| Non-current liabilities: | ||
| Long-term loans | ||
| Bonds payable | ||
| Including: preferred stock | ||
| Perpetual capital securities | ||
| Lease liability | ||
| Long-term account payable | ||
| Long term employee compensation payable | ||
| Accrued liabilities | 3,500,000.00 | |
| Deferred income | 45,020.68 | 46,129.96 |
| Deferred income tax liabilities | 10,965.46 | |
| Other non-current liabilities | ||
| Total non-current liabilities | 3,545,020.68 | 57,095.42 |
| Total liabilities | 280,960,665.26 | 315,147,988.86 |
| Owners’ equity: | ||
| Share capital | 1,152,535,254.00 | 1,152,535,254.00 |
| Other equity instrument | ||
| Including: preferred stock | ||
| Perpetual capital securities | ||
| Capital public reserve | 3,018,106,568.27 | 3,018,106,568.27 |
| Less: Inventory shares | ||
| Other comprehensive income | ||
| Special reserve | ||
| Surplus reserve | 77,783,172.92 | 54,736,482.14 |
| Retained profit | 257,672,677.94 | 165,505,986.31 |
| Total owner’s equity | 4,506,097,673.13 | 4,390,884,290.72 |
| Total liabilities and owner’s equity | 4,787,058,338.39 | 4,706,032,279.58 |
3. Consolidated Profit Statement
In RMB
| Item | 2019 | 2018 |
| I. Total operating income | 11,059,984,335.92 | 10,758,782,838.14 |
| Including: Operating income | 11,059,984,335.92 | 10,758,782,838.14 |
| Interest income | ||
| Insurance gained | ||
| Commission charge and commission income | ||
| II. Total operating cost | 10,493,641,137.00 | 10,231,679,484.63 |
| Including: Operating cost | 9,955,307,005.89 | 9,693,634,274.21 |
| Interest expense | ||
| Commission charge and commission expense | ||
| Cash surrender value | ||
| Net amount of expense of compensation | ||
| Net amount of withdrawal of insurance contract reserve | ||
| Bonus expense of guarantee slip | ||
| Reinsurance expense | ||
| Tax and extras | 14,020,512.36 | 15,369,523.52 |
| Sales expense | 250,657,691.24 | 255,021,072.54 |
| Administrative expense | 260,693,015.60 | 246,543,836.47 |
| R&D expense | 13,599,526.83 | 10,979,464.64 |
| Financial expense | -636,614.92 | 10,131,313.25 |
| Including: Interest expenses | 9,387,920.21 | 20,410,885.62 |
| Interest income | 11,068,571.50 | 8,364,388.05 |
| Add: other income | 12,297,924.24 | 10,901,858.13 |
| Investment income (Loss is listed with “-”) | 9,838,224.64 | 1,724,353.15 |
| Including: Investment income on affiliated company and joint venture | 3,411,761.86 | -1,755,504.74 |
| The termination of income recognition for financial assets measured by amortized cost(Loss is listed with “-”) | ||
| Exchange income (Loss is listed with “-”) | ||
| Net exposure hedging income (Loss is listed with “-”) | ||
| Income from change of fair value (Loss is listed with “-”) | 41,281.76 | -474,740.24 |
| Loss of credit impairment (Loss is listed with “-”) | 3,496,756.37 | |
| Losses of devaluation of asset (Loss is listed with “-”) | -158,272,990.37 | -199,636,023.51 |
| Income from assets disposal (Loss is listed with “-”) | -170,437.85 | 1,601,802.27 |
| III. Operating profit (Loss is listed with “-”) | 433,573,957.71 | 341,220,603.31 |
| Add: Non-operating income | 1,256,705.25 | 1,390,434.84 |
| Less: Non-operating expense | 5,801,306.78 | 3,266,448.43 |
| IV. Total profit (Loss is listed with “-”) | 429,029,356.18 | 339,344,589.72 |
| Less: Income tax expense | 44,512,899.71 | 18,488,865.34 |
| V. Net profit (Net loss is listed with “-”) | 384,516,456.47 | 320,855,724.38 |
| (i) Classify by business continuity | ||
| 1.continuous operating net profit (net loss listed with ‘-”) | 384,516,456.47 | 320,855,724.38 |
| 2.termination of net profit (net loss listed with ‘-”) | ||
| (ii) Classify by ownership | ||
| 1.Net profit attributable to owner’s of parent company | 363,501,809.52 | 308,331,032.44 |
| 2.Minority shareholders’ gains and losses | 21,014,646.95 | 12,524,691.94 |
| VI. Net after-tax of other comprehensive income | ||
| Net after-tax of other comprehensive income attributable to owners of parent company |
| (I) Other comprehensive income items which will not be reclassified subsequently to profit of loss | ||
| 1.Changes of the defined benefit plans that re-measured | ||
| 2.Other comprehensive income under equity method that cannot be transfer to gain/loss | ||
| 3.Change of fair value of investment in other equity instrument | ||
| 4.Fair value change of enterprise's credit risk | ||
| 5. Other | ||
| (ii) Other comprehensive income items which will be reclassified subsequently to profit or loss | ||
| 1.Other comprehensive income under equity method that can transfer to gain/loss | ||
| 2.Change of fair value of other debt investment | ||
| 3.gain/loss of fair value changes for available-for-sale financial assets | ||
| 4.Amount of financial assets re-classify to other comprehensive income | ||
| 5.Gain/loss of held-to-maturity investments that re-classify to available-for-sale financial asset | ||
| 6.Credit impairment provision for other debt investment | ||
| 7.Cash flow hedging reserve | ||
| 8.Translation differences arising on translation of foreign currency financial statements | ||
| 9.Other |
| Net after-tax of other comprehensive income attributable to minority shareholders | ||
| VII. Total comprehensive income | 384,516,456.47 | 320,855,724.38 |
| Total comprehensive income attributable to owners of parent Company | 363,501,809.52 | 308,331,032.44 |
| Total comprehensive income attributable to minority shareholders | 21,014,646.95 | 12,524,691.94 |
| VIII. Earnings per share: | ||
| (i) Basic earnings per share | 0.3154 | 0.2675 |
| (ii) Diluted earnings per share | 0.3154 | 0.2675 |
As for the enterprise combined under the same control, net profit of 0 Yuan achieved by the merged party before combination while 0Yuan achieved last period.Legal Representative: Zhu JunmingPerson in charge of accounting works: Jin ZhenyuanPerson in charge of accounting institute: Wen Jieyu
4. Profit Statement of Parent Company
In RMB
| Item | 2019 | 2018 |
| I. Operating income | 33,297,047.52 | 165,407,623.24 |
| Less: Operating cost | 30,082,764.02 | 156,886,817.06 |
| Taxes and surcharge | 725,820.16 | 602,255.26 |
| Sales expenses | 352,978.78 | 4,021,042.93 |
| Administration expenses | 54,742,414.39 | 35,236,050.22 |
| R&D expenses | ||
| Financial expenses | -732,329.49 | -2,863,136.69 |
| Including: interest expenses | -490,845.99 | |
| Interest income | 721,932.13 | 2,208,205.46 |
| Add: other income | 1,472,904.40 | 201,109.28 |
| Investment income (Loss is listed with “-”) | 289,567,596.66 | 1,035,169.17 |
| Including: Investment income on affiliated Company and joint venture | -1,614,296.02 | -367,955.83 |
| The termination of income recognition for financial assets measured by amortized cost (Loss is listed with “-”) | ||
| Net exposure hedging income (Loss is listed with “-”) | ||
| Changing income of fair value (Loss is listed with “-”) | 41,281.76 | -474,740.24 |
| Loss of credit impairment (Loss is listed with “-”) | -3,524,271.05 | |
| Losses of devaluation of asset (Loss is listed with “-”) | -8,940,973.64 | |
| Income on disposal of assets (Loss is listed with “-”) | -4,685.34 | |
| II. Operating profit (Loss is listed with “-”) | 235,682,911.43 | -36,659,526.31 |
| Add: Non-operating income | 403,619.72 | 21,985.04 |
| Less: Non-operating expense | 50.00 | 51.64 |
| III. Total Profit (Loss is listed with “-”) | 236,086,481.15 | -36,637,592.91 |
| Less: Income tax | 5,619,573.34 | -2,353,928.48 |
| IV. Net profit (Net loss is listed with “-”) | 230,466,907.81 | -34,283,664.43 |
| (i)continuous operating net profit (net loss listed with ‘-”) | 230,466,907.81 | -34,283,664.43 |
| (ii) termination of net profit (net loss listed with ‘-”) | ||
| V. Net after-tax of other comprehensive income | ||
| (I) Other comprehensive income items which will not be reclassified subsequently to profit of loss | ||
| 1.Changes of the defined benefit plans that re-measured | ||
| 2.Other comprehensive income under equity method that cannot be transfer to gain/loss |
| 3.Change of fair value of investment in other equity instrument | ||
| 4.Fair value change of enterprise's credit risk | ||
| 5. Other | ||
| (II) Other comprehensive income items which will be reclassified subsequently to profit or loss | ||
| 1.Other comprehensive income under equity method that can transfer to gain/loss | ||
| 2.Change of fair value of other debt investment | ||
| 3.gain/loss of fair value changes for available-for-sale financial assets | ||
| 4.Amount of financial assets re-classify to other comprehensive income | ||
| 5.Gain/loss of held-to-maturity investments that re-classify to available-for-sale financial asset | ||
| 6.Credit impairment provision for other debt investment | ||
| 7.Cash flow hedging reserve | ||
| 8.Translation differences arising on translation of foreign currency financial statements | ||
| 9.Other | ||
| VI. Total comprehensive income | 230,466,907.81 | -34,283,664.43 |
| VII. Earnings per share: | ||
| (i) Basic earnings per share | ||
| (ii) Diluted earnings per share |
5. Consolidated Cash Flow Statement
In RMB
| Item | 2019 | 2018 |
| I. Cash flows arising from operating activities: | ||
| Cash received from selling commodities and providing labor services | 11,105,513,303.87 | 10,864,668,383.48 |
| Net increase of customer deposit and interbank deposit | ||
| Net increase of loan from central bank | ||
| Net increase of capital borrowed from other financial institution | ||
| Cash received from original insurance contract fee | ||
| Net cash received from reinsurance business | ||
| Net increase of insured savings and investment | ||
| Cash received from interest, commission charge and commission | ||
| Net increase of capital borrowed | ||
| Net increase of returned business capital | ||
| Net cash received by agents in sale and purchase of securities | ||
| Write-back of tax received | 25,275,539.65 | 2,149,482.32 |
| Other cash received concerning operating activities | 341,980,984.23 | 149,070,552.32 |
| Subtotal of cash inflow arising from operating activities | 11,472,769,827.75 | 11,015,888,418.12 |
| Cash paid for purchasing commodities and receiving labor service | 10,425,163,614.27 | 10,062,803,459.79 |
| Net increase of customer loans and advances | ||
| Net increase of deposits in central bank and interbank |
| Cash paid for original insurance contract compensation | ||
| Net increase of capital lent | ||
| Cash paid for interest, commission charge and commission | ||
| Cash paid for bonus of guarantee slip | ||
| Cash paid to/for staff and workers | 248,608,109.68 | 266,944,869.84 |
| Taxes paid | 75,128,813.39 | 76,069,566.39 |
| Other cash paid concerning operating activities | 533,815,466.44 | 310,966,886.52 |
| Subtotal of cash outflow arising from operating activities | 11,282,716,003.78 | 10,716,784,782.54 |
| Net cash flows arising from operating activities | 190,053,823.97 | 299,103,635.58 |
| II. Cash flows arising from investing activities: | ||
| Cash received from recovering investment | 514,000,000.00 | 190,000,000.00 |
| Cash received from investment income | 6,553,793.96 | 3,029,857.89 |
| Net cash received from disposal of fixed, intangible and other long-term assets | 6,000,324.52 | 2,130,835.56 |
| Net cash received from disposal of subsidiaries and other units | ||
| Other cash received concerning investing activities | 450,000.00 | |
| Subtotal of cash inflow from investing activities | 526,554,118.48 | 195,610,693.45 |
| Cash paid for purchasing fixed, intangible and other long-term assets | 579,138,870.97 | 382,839,107.07 |
| Cash paid for investment | 739,000,000.00 | 287,000,000.00 |
| Net increase of mortgaged loans | ||
| Net cash received from subsidiaries and other units obtained | ||
| Other cash paid concerning investing activities |
| Subtotal of cash outflow from investing activities | 1,318,138,870.97 | 669,839,107.07 |
| Net cash flows arising from investing activities | -791,584,752.49 | -474,228,413.62 |
| III. Cash flows arising from financing activities | ||
| Cash received from absorbing investment | 23,520,000.00 | 24,500,000.00 |
| Including: Cash received from absorbing minority shareholders’ investment by subsidiaries | 23,520,000.00 | 24,500,000.00 |
| Cash received from loans | 413,905,075.72 | 537,740,181.56 |
| Other cash received concerning financing activities | ||
| Subtotal of cash inflow from financing activities | 437,425,075.72 | 562,240,181.56 |
| Cash paid for settling debts | 150,356,092.60 | 280,451,777.62 |
| Cash paid for dividend and profit distributing or interest paying | 162,493,097.65 | 21,982,183.52 |
| Including: Dividend and profit of minority shareholder paid by subsidiaries | ||
| Other cash paid concerning financing activities | 72,997.72 | |
| Subtotal of cash outflow from financing activities | 312,922,187.97 | 302,433,961.14 |
| Net cash flows arising from financing activities | 124,502,887.75 | 259,806,220.42 |
| IV. Influence on cash and cash equivalents due to fluctuation in exchange rate | 344,458.94 | 2,516,157.85 |
| V. Net increase of cash and cash equivalents | -476,683,581.83 | 87,197,600.23 |
| Add: Balance of cash and cash equivalents at the period -begin | 631,638,339.68 | 544,440,739.45 |
| VI. Balance of cash and cash equivalents at the period -end | 154,954,757.85 | 631,638,339.68 |
6. Cash Flow Statement of Parent Company
In RMB
| Item | 2019 | 2018 |
| I. Cash flows arising from operating activities: | ||
| Cash received from selling commodities and providing labor services | 80,530,360.65 | 203,489,969.79 |
| Write-back of tax received | 508,882.07 | 1,607,071.98 |
| Other cash received concerning operating activities | 186,613,340.33 | 25,144,907.85 |
| Subtotal of cash inflow arising from operating activities | 267,652,583.05 | 230,241,949.62 |
| Cash paid for purchasing commodities and receiving labor service | 102,085,180.39 | 179,055,497.17 |
| Cash paid to/for staff and workers | 27,212,693.90 | 20,901,002.07 |
| Taxes paid | 3,672,773.74 | 1,852,958.66 |
| Other cash paid concerning operating activities | 243,973,743.76 | 40,674,668.54 |
| Subtotal of cash outflow arising from operating activities | 376,944,391.79 | 242,484,126.44 |
| Net cash flows arising from operating activities | -109,291,808.74 | -12,242,176.82 |
| II. Cash flows arising from investing activities: | ||
| Cash received from recovering investment | 314,000,000.00 | |
| Cash received from investment income | 29,249,567.07 | 953,125.00 |
| Net cash received from disposal of fixed, intangible and other long-term assets | 2,710.37 | 3,026.17 |
| Net cash received from disposal of subsidiaries and other units | ||
| Other cash received concerning investing activities | 90,450,000.00 |
| Subtotal of cash inflow from investing activities | 343,252,277.44 | 91,406,151.17 |
| Cash paid for purchasing fixed, intangible and other long-term assets | 7,360,713.96 | 18,200.00 |
| Cash paid for investment | 264,000,000.00 | |
| Net cash received from subsidiaries and other units obtained | ||
| Other cash paid concerning investing activities | 140,000,000.00 | |
| Subtotal of cash outflow from investing activities | 271,360,713.96 | 140,018,200.00 |
| Net cash flows arising from investing activities | 71,891,563.48 | -48,612,048.83 |
| III. Cash flows arising from financing activities | ||
| Cash received from absorbing investment | ||
| Cash received from loans | ||
| Other cash received concerning financing activities | ||
| Subtotal of cash inflow from financing activities | ||
| Cash paid for settling debts | 10,000,000.00 | |
| Cash paid for dividend and profit distributing or interest paying | 115,253,525.40 | 28,710.00 |
| Other cash paid concerning financing activities | 72,997.72 | |
| Subtotal of cash outflow from financing activities | 115,326,523.12 | 10,028,710.00 |
| Net cash flows arising from financing activities | -115,326,523.12 | -10,028,710.00 |
| IV. Influence on cash and cash equivalents due to fluctuation in exchange rate | 98,576.44 | 121,178.25 |
| V. Net increase of cash and cash equivalents | -152,628,191.94 | -70,761,757.40 |
| Add: Balance of cash and cash equivalents at the period -begin | 168,900,586.84 | 239,662,344.24 |
| VI. Balance of cash and cash equivalents at the period -end | 16,272,394.90 | 168,900,586.84 |
7. Statement of Changes in Owners’ Equity (Consolidated)
Current period
In RMB
| Item | 2019 | ||||||||||||||
| Owners’ equity attributable to the parent Company | Minority interests | Total owners’ equity | |||||||||||||
| Share capital | Other equity instrument | Capital reserve | Less: Inventory shares | Other comprehensive income | Reasonable reserve | Surplus reserve | Provision of general risk | Retained profit | Other | Subtotal | |||||
| Preferred stock | Perpetual capital securities | Other | |||||||||||||
| I. Balance at the end of the last year | 1,152,535,254.00 | 1,422,892,729.36 | 154.21 | 327,140,910.28 | 1,269,933,487.26 | 4,172,502,535.11 | 165,096,296.47 | 4,337,598,831.58 | |||||||
| Add: Changes of accounting policy | |||||||||||||||
| Error correction of the last period | |||||||||||||||
| Enterprise combine under the same control | |||||||||||||||
| Other | |||||||||||||||
| II. Balance at the beginning of this year | 1,152,535,254.00 | 1,422,892,729.36 | 154.21 | 327,140,910.28 | 1,269,933,487.26 | 4,172,502,535.11 | 165,096,296.47 | 4,337,598,831.58 | |||||||
| III. Increase/ Decrease in this year (Decrease is listed with “-”) | 368.34 | 23,046,690.78 | 225,201,593.34 | 248,248,652.46 | 37,590,646.95 | 285,839,299.41 | |||||||||
| (i) Total comprehensive income | 363,501,809.52 | 363,501,809.52 | 21,014,646.95 | 384,516,456.47 | |||||||||||
| (ii) Owners’ devoted and decreased capital | 23,520,000.00 | 23,520,000.00 | |||||||||||||
| 1.Common shares invested by shareholders | 23,520,000.00 | 23,520,000.00 | |||||||||||||
| 2. Capital invested by holders of other equity instruments | |||||||||||||||
| 3. Amount reckoned into owners equity with share-based payment | |||||||||||||||
| 4. Other | |||||||||||||||
| (III) Profit distribution | 23,046,690.78 | -138,300,216.18 | -115,253,525.40 | -6,944,000.00 | -122,197,525.40 | ||||||||||
| 1. Withdrawal of surplus reserves | 23,046,690.78 | -23,046,690.78 | |||||||||||||
| 2. Withdrawal of general risk provisions | |||||||||||||||
| 3. Distribution for owners (or shareholders) | -115,253,525.40 | -115,253,525.40 | -6,944,000.00 | -122,197,525.40 | |||||||||||
| 4. Other | |||||||||||||||
| (IV) Carrying forward internal owners’ equity | |||||||||||||||
| 1. Capital reserves conversed to capital (share capital) |
| 2. Surplus reserves conversed to capital (share capital) | |||||||||||||||
| 3. Remedying loss with surplus reserve | |||||||||||||||
| 4．Carry-over retained earnings from the defined benefit plans | |||||||||||||||
| 5．Carry-over retained earnings from other comprehensive income | |||||||||||||||
| 6. Other | |||||||||||||||
| (V) Reasonable reserve | 368.34 | 368.34 | 368.34 | ||||||||||||
| 1. Withdrawal in the report period | 920,788.68 | 920,788.68 | 920,788.68 | ||||||||||||
| 2. Usage in the report period | -920,420.34 | -920,420.34 | -920,420.34 | ||||||||||||
| (VI)Others | |||||||||||||||
| IV. Balance at the end of the report period | 1,152,535,254.00 | 1,422,892,729.36 | 522.55 | 350,187,601.06 | 1,495,135,080.60 | 4,420,751,187.57 | 202,686,943.42 | 4,623,438,130.99 |
Last period
In RMB
| Item | 2018 | ||||||||||||||
| Owners’ equity attributable to the parent Company | Minority interests | Total owners’ equity | |||||||||||||
| Share capital | Other equity instrument | Capital reserve | Less: Inventory shares | Other comprehensive income | Reasonable reserve | Surplus reserve | Provision of general risk | Retained profit | Other | Subtotal | |||||
| Preferred stock | Perpetual capital securities | Other | |||||||||||||
| I. Balance at the end of the last year | 496,782,303.00 | 2,063,164,702.12 | 70,395.63 | 327,140,910.28 | 961,602,454.82 | 3,848,760,765.85 | 124,062,121.04 | 3,972,822,886.89 | |||||||
| Add: Changes of accounting policy | |||||||||||||||
| Error correction of the last period | |||||||||||||||
| Enterprise combine under the same control | |||||||||||||||
| Other | |||||||||||||||
| II. Balance at the beginning of this year | 496,782,303.00 | 2,063,164,702.12 | 70,395.63 | 327,140,910.28 | 961,602,454.82 | 3,848,760,765.85 | 124,062,121.04 | 3,972,822,886.89 | |||||||
| III. Increase/ Decrease in this year (Decrease is listed with “-”) | 655,752,951.00 | -640,271,972.76 | -70,241.42 | 308,331,032.44 | 323,741,769.26 | 41,034,175.43 | 364,775,944.69 | ||||||||
| (i) Total comprehensive income | 308,331,032.44 | 308,331,032.44 | 12,524,691.94 | 320,855,724.38 | |||||||||||
| (ii) Owners’ devoted and decreased capital | 655,752,951.00 | -640,271,972.76 | 15,480,978.24 | 28,509,483.49 | 43,990,461.73 | ||||||||||
| 1.Common shares invested by shareholders | 655,752,951.00 | 5,219,793,489.96 | 5,875,546,440.96 | 24,500,000.00 | 5,900,046,440.96 | ||||||||||
| 2. Capital invested by holders of other equity instruments | |||||||||||||||
| 3. Amount reckoned into owners equity with share-based payment |
| 4. Other | -5,860,065,462.72 | -5,860,065,462.72 | 4,009,483.49 | -5,856,055,979.23 | |||||||||||
| (III) Profit distribution | |||||||||||||||
| 1. Withdrawal of surplus reserves | |||||||||||||||
| 2. Withdrawal of general risk provisions | |||||||||||||||
| 3. Distribution for owners (or shareholders) | |||||||||||||||
| 4. Other | |||||||||||||||
| (IV) Carrying forward internal owners’ equity | |||||||||||||||
| 1. Capital reserves conversed to capital (share capital) | |||||||||||||||
| 2. Surplus reserves conversed to capital (share capital) | |||||||||||||||
| 3. Remedying loss with surplus reserve | |||||||||||||||
| 4．Carry-over retained earnings from the defined benefit plans | |||||||||||||||
| 5．Carry-over retained earnings from other comprehensive income | |||||||||||||||
| 6. Other | |||||||||||||||
| (V) Reasonable reserve | -70,241.42 | -70,241.42 | -70,241.42 | ||||||||||||
| 1. Withdrawal in the report period | 846,741.24 | 846,741.24 | 846,741.24 |
| 2. Usage in the report period | -916,982.66 | -916,982.66 | -916,982.66 | ||||||||||||
| (VI)Others | |||||||||||||||
| IV. Balance at the end of the report period | 1,152,535,254.00 | 1,422,892,729.36 | 154.21 | 327,140,910.28 | 1,269,933,487.26 | 4,172,502,535.11 | 165,096,296.47 | 4,337,598,831.58 |
8. Statement of Changes in Owners’ Equity (Parent Company)
Current period
In RMB
| Item | 2019 | |||||||||||
| Share capital | Other equity instrument | Capital public reserve | Less: Inventory shares | Other comprehensive income | Reasonable reserve | Surplus reserve | Retained profit | Other | Total owners’ equity | |||
| Preferred stock | Perpetual capital securities | Other | ||||||||||
| I. Balance at the end of the last year | 1,152,535,254.00 | 3,018,106,568.27 | 54,736,482.14 | 165,505,986.31 | 4,390,884,290.72 | |||||||
| Add: Changes of accounting policy | ||||||||||||
| Error correction of the last period | ||||||||||||
| Other | ||||||||||||
| II. Balance at the beginning of this year | 1,152,535,254.00 | 3,018,106,568.27 | 54,736,482.14 | 165,505,986.31 | 4,390,884,290.72 | |||||||
| III. Increase/ Decrease in this year (Decrease is listed with “-”) | 23,046,690.78 | 92,166,691.63 | 115,213,382.41 | |||||||||
| (i) Total comprehensive income | 230,466,907.81 | 230,466,907.81 | ||||||||||
| (ii) Owners’ devoted and decreased capital | ||||||||||||
| 1.Common shares invested by shareholders | ||||||||||||
| 2. Capital invested by holders of other equity instruments | ||||||||||||
| 3. Amount reckoned into owners equity with share-based payment | ||||||||||||
| 4. Other | ||||||||||||
| (III) Profit distribution | 23,046,690.78 | -138,300,216.18 | -115,253,525.40 | |||||||||
| 1. Withdrawal of surplus reserves | 23,046,690.78 | -23,046,690.78 | ||||||||||
| 2. Distribution for owners (or shareholders) | -115,253,525.40 | -115,253,525.40 | ||||||||||
| 3. Other | ||||||||||||
| (IV) Carrying forward internal owners’ equity | ||||||||||||
| 1. Capital reserves conversed to capital (share capital) | ||||||||||||
| 2. Surplus reserves conversed to capital (share capital) | ||||||||||||
| 3. Remedying loss with surplus reserve | ||||||||||||
| 4．Carry-over retained earnings from the defined benefit plans | ||||||||||||
| 5．Carry-over retained earnings from other comprehensive income | ||||||||||||
| 6. Other |
| (V) Reasonable reserve | ||||||||||||
| 1. Withdrawal in the report period | ||||||||||||
| 2. Usage in the report period | ||||||||||||
| (VI)Others | ||||||||||||
| IV. Balance at the end of the report period | 1,152,535,254.00 | 3,018,106,568.27 | 77,783,172.92 | 257,672,677.94 | 4,506,097,673.13 |
Last period
In RMB
| Item | 2018 | |||||||||||
| Share capital | Other equity instrument | Capital public reserve | Less: Inventory shares | Other comprehensive income | Reasonable reserve | Surplus reserve | Retained profit | Other | Total owners’ equity | |||
| Preferred stock | Perpetual capital securities | Other | ||||||||||
| I. Balance at the end of the last year | 496,782,303.00 | 382,444,482.45 | 54,736,482.14 | 199,789,650.74 | 1,133,752,918.33 | |||||||
| Add: Changes of accounting policy | ||||||||||||
| Error correction of the last period | ||||||||||||
| Other | ||||||||||||
| II. Balance at the beginning of this year | 496,782,303.00 | 382,444,482.45 | 54,736,482.14 | 199,789,650.74 | 1,133,752,918.33 | |||||||
| III. Increase/ Decrease in this year (Decrease is listed with “-”) | 655,752,951.00 | 2,635,662,085.82 | -34,283,664.43 | 3,257,131,372.39 | ||||||||
| (i) Total comprehensive income | -34,283,664.43 | -34,283,664.43 | ||||||||||
| (ii) Owners’ devoted and decreased capital | 655,752,951.00 | 2,635,662,085.82 | 3,291,415,036.82 | |||||||||
| 1.Common shares invested by shareholders | 655,752,951.00 | 5,219,793,489.96 | 5,875,546,440.96 | |||||||||
| 2. Capital invested by holders of other equity instruments | ||||||||||||
| 3. Amount reckoned into owners equity with share-based payment | ||||||||||||
| 4. Other | -2,584,131,404.14 | -2,584,131,404.14 | ||||||||||
| (III) Profit distribution | ||||||||||||
| 1. Withdrawal of surplus reserves | ||||||||||||
| 2. Distribution for owners (or shareholders) | ||||||||||||
| 3. Other | ||||||||||||
| (IV) Carrying forward internal owners’ equity | ||||||||||||
| 1. Capital reserves conversed to capital (share capital) | ||||||||||||
| 2. Surplus reserves conversed to capital (share capital) | ||||||||||||
| 3. Remedying loss with surplus reserve | ||||||||||||
| 4．Carry-over retained earnings from the defined benefit plans |
| 5．Carry-over retained earnings from other comprehensive income | ||||||||||||
| 6. Other | ||||||||||||
| (V) Reasonable reserve | ||||||||||||
| 1. Withdrawal in the report period | ||||||||||||
| 2. Usage in the report period | ||||||||||||
| (VI)Others | ||||||||||||
| IV. Balance at the end of the report period | 1,152,535,254.00 | 3,018,106,568.27 | 54,736,482.14 | 165,505,986.31 | 4,390,884,290.72 |
III. Basic situation of Company
Shenzhen Cereals Holdings Co., Ltd. (formerly the Shenzhen Shenbao Industrial Co., Ltd., hereinafter referred toas “Company” or “the Company” ), formerly named Shenzhen Shenbao Canned Food Company, obtainedapproval (Document (1991) No.978) from Shenzhen Municipal People’s Government to change to the name asShenzhen Shenbao Industrial Co., ltd. on 1 August 1991.Then with the approval (Document (1991)No.126) fromPeople’s Bank of China, the Company began to list on Shenzhen Stock Exchange. The Company belongs to thegrain, oil, food and beverage industry.
As of 31 December 2019, the cumulative amount of shares issued by the Company was 1,152,535,254 shares withregistered capital of 1,152,535,254yuan. Registered address: Shenzhen, Guangdong Province; HQ of theCompany: 8/F, Tower B, No.4 Building, Software Industry Base, South District, Science & Technology Park,Xuefu Rd., Yuehai Street, Nanshan District, Shenzhen. Main business of the Company: general operating items:
Purchase and sales of grain and oil, grain & oil reserves; operation and processing of grain & oil products;production of tea, tea products, tea and natural plant extract, canned foods, beverages and native products(business license of the production place shall be separately applied for); feed management and processing(outsourcing); investment, operation and development of grain & oil logistics, feed logistics and tea garden etc.;sales of feed and tea; warehousing services; food circulation services; modern food supply chain services;technology development and services of grain & oil, tea, plant products, soft drinks and foods; construction ofE-commerce and information, IT development and supporting services; industrial investment (specific items willbe declared separately); domestic trade; operating the import and export business; engaged in real estatedevelopment and operation on the lands where the right-to-use has been legally acquired; development, operation,
leasing and management of the own property; property management; providing management services tohotels.(items mentioned above which are involved in approval from national laws, administrative regulations anddecision of the state council, must be submitted for examination and approval before operation ). Licensedbusiness item: wholesale of prepackaged food (excluding reheating prepackaged food) (in non-physical way);information service (internet information service only); general freight, professional transportation (refrigerationand fresh-keeping). Parent enterprise of the Company: Shenzhen Food Group Co., Ltd.; actual controller of theCompany: Assets Supervision and Administration Commission of Shenzhen municipal People’s Government.
The financial statement has been approved by BOD of the company for reporting on 24 April 2020.
Up to 31 December 2019, the subsidiaries included in consolidate financial statement, mainly including:
| Subsidiary | Type | Level | Shareholding ratio (%) | Voting rights ratio (%) |
| Shenzhen Shenbao Huacheng Science and Technology Co.,Ltd(hereinafter referred to as Shenbao Huacheng) | Wholly-owned subsidiary | First grade | 100 | 100 |
| Wuyuan Ju Fang Yong Tea Industry Co., Ltd. (hereinafter referred to as Wuyuan Ju Fang Yong ) | Wholly-owned subsidiary | Second grade | 100 | 100 |
| Shenzhen Shenbao Sanjing Food & Beverage Development Co., Ltd(hereinafter referred to as Shenbao Sanjing) | Wholly-owned subsidiary | First grade | 100 | 100 |
| Huizhou Shenbao Technology Co., Ltd(hereinafter referred to as Huizhou Shenbao Technology) | Wholly-owned subsidiary | First grade | 100 | 100 |
| Shenzhen Shenbao Property Management Co., Ltd.(hereinafter referred to as Shenbao Property ) | Wholly-owned subsidiary | First grade | 100 | 100 |
| Shenzhen Shenbao Industrial & Trading Co., Ltd(hereinafter referred to as Shenbao Industrial & Trading ) | Wholly-owned subsidiary | First grade | 100 | 100 |
| Hangzhou Ju Fang Yong Holding Co., Ltd(hereinafter referred to as Hangzhou Ju Fang Yong) | Wholly-owned subsidiary | Second grade | 100 | 100 |
| Shenzhen Shenbao Technology Center Co., Ltd.(hereinafter referred to as Shenbao Technology Center ) | Wholly-owned subsidiary | First grade | 100 | 100 |
| Shenzhen Shenshenbao Investment Co., Ltd. (hereinafter referred to as Shenshenbao Investment) | Wholly-owned subsidiary | First grade | 100 | 100 |
| Yunnan Shenbao Pu’er Tea Supply Chain Management Co., Ltd(hereinafter referred to as Yunnan Supply Chain) | Wholly-owned subsidiary | Second grade | 100 | 100 |
| Huizhou Shenbao Food Co., Ltd(hereinafter referred to as Huizhou Shenbao Food) | Wholly-owned subsidiary | First grade | 100 | 100 |
| Yunnan Pu’er Tea Trading Center Co., Ltd(hereinafter referred to as Pu’er Tea Trading Center) | Controlling subsidiary | Second grade | 55 | 55 |
| Mount Wuyi Shenbao Rock Tea Co., Ltd(hereinafter | Wholly-owned | Second | 100 | 100 |
| referred to as Shenbao Rock Tea ) | subsidiary | grade | ||
| Hangzhou Fuhaitang Tea Ecological Technology Co., Ltd(hereinafter referred to as Fuhaitang Ecological) | Wholly-owned subsidiary | Second grade | 100 | 100 |
| Hangzhou Chunshi Network Technology Co., Ltd.(hereinafter referred to as Chunshi Network) | Wholly-owned subsidiary | Third grade | 100 | 100 |
| Shenzhen Shenshenbao Tea Culture Management Co., Ltd(hereinafter referred to as Shenshenbao Tea Culture) | Wholly-owned subsidiary | Second grade | 100 | 100 |
| Hangzhou Ju Fang Yong Trading Co., Ltd. (hereinafter referred to as Ju Fang Yong Trading) | Controlling subsidiary | Third grade | 60 | 60 |
| Shenzhen Shenbao Tea-Shop Co., Ltd(hereinafter referred to as Shenbao Tea-Shop) | Wholly-owned subsidiary | Second grade | 100 | 100 |
| Hangzhou Fuhaitang Catering Management chain Co., Ltd(hereinafter referred to as Fuhaitang Catering ) | Wholly-owned subsidiary | Second grade | 100 | 100 |
| Shenzhen Cereals Group Co., Ltd(hereinafter referred to as SZCG) | Wholly-owned subsidiary | First grade | 100 | 100 |
| Shenzhen Flour Co., Ltd(hereinafter referred to as Shenzhen Flour) | Wholly-owned subsidiary | Second grade | 100 | 100 |
| Shenzhen Hualian Grain & Oil Trade Co., ltd. (hereinafter referred to as Hualian Grain & Oil Trade) | Wholly-owned subsidiary | Second grade | 100 | 100 |
| Hainan Haitian Aquatic Feed Co., Ltd(hereinafter referred to as Hainan Haitian ) | Wholly-owned subsidiary | Second grade | 100 | 100 |
| Shenliang Quality Inspection Co., Ltd. (hereinafter referred to as Shenliang Quality Inspection ) | Wholly-owned subsidiary | Second grade | 100 | 100 |
| Shenliang Doximi Business Co., Ltd. (hereinafter referred to as SZCG Doximi) | Wholly-owned subsidiary | Second grade | 100 | 100 |
| Shenzhen Shenliang Cold-Chain Logistic Co., Ltd(hereinafter referred to as Shenliang Cold-Chain Logistic ) | Wholly-owned subsidiary | Second grade | 100 | 100 |
| Shenzhen Shenliang Big Kitchen Food Supply Chain Co., Ltd(hereinafter referred to as Shenliang Big Kitchen ) | Controlling subsidiary | Second grade | 70 | 70 |
| Shenzhen Shenliang Real Estate Development Co., Ltd.(hereinafter referred to as Shenliang Real Estate Development) | Wholly-owned subsidiary | Second grade | 100 | 100 |
| Shenzhen Shenliang Property Management Co., Ltd. (hereinafter referred to as Shenliang Property) | Wholly-owned subsidiary | Third grade | 100 | 100 |
| Shenliang Storage (Yingkou) Co., Ltd(hereinafter referred to as Shenliang Storage (Yingkou) ) | Wholly-owned subsidiary | Third grade | 100 | 100 |
| Dongguan Shenliang Logistics Co., Ltd.(hereinafter referred to as Dongguan Shenliang Logistics) | Controlling subsidiary | Second grade | 51 | 51 |
| Dongguan International Food Industrial Park | Controlling | Third | 51 | 51 |
| Development Co., Ltd.(hereinafter referred to as Dongguan Food Industrial Park) | subsidiary | grade | ||
| Dongguan Shenliang Oil & Food Trade Co., Ltd. (hereinafter referred to as Dongguan Food Trade) | Controlling subsidiary | Third grade | 51 | 51 |
| Dongguan Jinying Biology Tech. Co., Ltd. (hereinafter referred to as Dongguan Jinying) | Controlling subsidiary | Third grade | 51 | 51 |
| Shuangyashan Shenliang Zhongxin Cereals Base Co., Ltd(hereinafter referred to as Shuangyashan Shenliang Zhongxin ) | Controlling subsidiary | Second grade | 51 | 51 |
| Controlling subsidiary | Third grade | 51 | 51 |
Change of the consolidate scope found more in Note VIII. Change of consolidate scope and Note IX. Equity inother entity
IV. Basis of preparation of financial statements
1. Basis of preparation
Based on going concern, and according to actual occurrence of transactions and issues, the Company prepared thefinancial statement in line with the Accounting Standards for Business Enterprise -Basic Standard issued byMinistry of Finance and specific accounting principle as well as the application guidance for the accountingprinciples for enterprise, interpretation to the accounting principles for enterprise and other related requirements(hereinafter referred to as Accounting Standards for Business Enterprise), combining the Information DisclosurePreparation Rules for Company Public Issuing Securities No.15-General Rules for Financial Report of the CSRC
2. Going concern
The Company was evaluated on continued viability of 12 months for the reporting period and found to have nosignificant doubt. Accordingly, the financial statements have been prepared on the basis of going concernassumptions.V. Major accounting policy, accounting estimationSpecific accounting policies and estimation attention:
(i)Implementation of the Accounting Standards for Business Enterprise No. 22- Recognition and Measurement ofFinancial Instruments, Accounting Standards for Business Enterprise No. 23- Transfer of Financial Assets,
Accounting Standards for Business Enterprise No. 24- Hedge Accounting and Accounting Standards for BusinessEnterprise No. 37- Presentation of Financial Instruments (2017 Revised), and in 2017, the Ministry of Financerevised the Accounting Standards for Business Enterprise No. 22- Recognition and Measurement of FinancialInstruments, Accounting Standards for Business Enterprise No. 23- Transfer of Financial Assets, AccountingStandards for Business Enterprise No. 24- Hedge Accounting and Accounting Standards for Business EnterpriseNo. 37- Presentation of Financial Instruments. The revised standards stipulate that for financial instruments thathave not been derecognized on the first implementation date, if the previous recognition and measurement areinconsistent with the requirements of the revised standards, they shall be retrospectively adjusted. If the datarelating to the comparative financial statements in prior period are inconsistent with the requirements of therevised standards, no adjustment is required. The Company will adjust the retained earnings and othercomprehensive income at the beginning of the year due to the cumulative impact of retrospective adjustment, themain impacts of the implementation of the above standards are as follows: (1) Due to the change in the name ofthe report item, “the financial assets measured at fair value and whose changes are included in the current profitand loss” are reclassified as “Tradable financial assets”, financial assets measured at fair value and whose changesare included in the current profit and loss have a decrease of 1,124,927.96 yuan; and the Tradable financial assetshave an increase of 1,124,927.96 yuan; (2) the available-for-sale equity instrument investments are reclassified asthe “financial assets measured at fair value and whose changes are included in the current profit and loss”.Available-for-sale financial assets have a decrease of 57,500.00 yuan; other non-current financial assets have anincrease of 57,500.00 yuan.
(ii) Implementation of the Ministry of Finance issued the Notice on Revision and Issuance of 2019 FinancialStatement Format for General Corporate. On 30 April 2019, the Ministry of Finance issued the Notice onRevision and Issuance of 2019 Financial Statement Format for General Corporate (Cai Kuai [2019] No.6), formatof the financial statement has been revised. Main impact for implementation of the above mentioned regulations:
in balance sheet: the “Note receivable and account receivable” divided into “Note receivable” and “Accountreceivable”; “Note payable and account payable” divided into “Note payable” and “Account payable”; thecomparison data are adjusted accordingly.
1. Statement for observation of Accounting Standard for Business EnterpriseThe financial statements prepared by the Company are in accordance to requirements of Accounting Standard forBusiness Enterprise issued by Ministry of Finance, which truly and completely reflect the financial status of theCompany and parent company on 31 December 2019, as well as the consolidate and parent company’s operationalresults and cash flow for year of 2019.
2. Accounting period
Calendar year is the accounting period for the Company, that is falls to the range starting from 1 January to 31December.
3. Operating cycle
Operating cycle of the Company was 12 months
4. Standard currency
The Company and its subsidiaries take RMB as the standard currency for bookkeeping.
5. Accounting treatment for business combinations under the same control and those not under the samecontrolBusiness combination under the same control: The assets and liabilities the Company acquired in a businesscombination shall be measured in accordance with book value of assets, liabilities (including the ultimatecontrolling party of goodwill acquired by the merging parties and the formation of) stated in combined financialreport of the ultimate controlling party on the merger date. The net book value of assets and the payment of themerger consideration in the merger book value (or nominal value of shares issued) shall be adjusted in the sharepremium of reserve capital. the share premium in capital reserve is not enough for deducting, retained earnings .
Business combination not under the same control: Assets paid and liabilities taken for business combination onthe acquisition date shall be measured at fair value. The difference between the fair value and book value isrecognized in profit or loss. Goodwill is realized by the Company as for the difference between the combinationcost and the fair value of the recognizable net assets of the acquiree acquired by acquirer in such businesscombination. In case that the above cost is less than the above fair value even with re-review, then the differenceshall be recorded in current gains and losses.
The directed expenses incurred in the business combination are recorded into current gains/losses; the trading feesfor issuing equity securities or debt securities for the business combination shall be recorded into the initialconfirmation amount of equity securities or debt securities.
6. Methods for preparation of consolidated financial statements
6.1 Consolidated scope
The consolidation scope of the consolidated financial statements of the Company is fixed on the basis of control,which includes the Company and all subsidiaries.
6.2 Consolidated procedure
The Company edits the consolidated financial statements based on its own financial statements and thesubsidiaries’, as well as other relevant information. The consolidated financial statements hold the enterprisegroup as a whole accounting entity. It is recognized in accordance with relevant Accounting Standards,measurement and presentation requirements. Uniform accounting policies reflect the overall financial position of
the Group's business, operating results and cash flow.
The accounting policies and accounting period adopted by the subsidiaries taken into account of the consolidationscope are in line with the Company. If it is not the same as the Company, necessary adjustments will be madewhen preparing consolidated financial statements according to the accounting policy and accounting period of theCompany. For the subsidiaries acquired through business combination under uncommon control, financialstatements shall be adjusted based on the fair value of the identifiable net assets on acquiring date. For thesubsidiaries acquired through business combination under common control, its assets and liabilities (includinggoodwill formed from ultimate controlling party acquiring the subsidiary to) shall be adjusted based on the bookvalue in the financial statements of the ultimate controlling party.
Subsidiary's equity, current net profits or losses and current comprehensive income belonging to minorityshareholders shall be listed respectively under item of owners’ equity in the consolidated balance sheet, item ofnet profit in profit sheet and item of total comprehensive income. Current loss minority shareholders of asubsidiary exceed the minority shareholders in the subsidiary's opening owners' equity share and the formation ofbalance, offset against minority interests.
(1) Increase of subsidiary or business
During the reporting period, the merger of the enterprises under the same control results in additional subsidiariesor business, then adjust the opening amount of consolidated balance sheet; income, expenses and profit of thesubsidiaries or business from beginning to the end of the reporting shall be included in the consolidated profitstatement; cash flows of the subsidiaries or business from beginning to the end of reporting period shall beincluded into the consolidated cash flow statement. And relevant comparative items of comparable statement shallbe adjusted since reporting entity is controlled by the ultimate controller.
If additional investment and other reasons can lead investee to be controlled under the same control, all partiesshall be adjusted at the beginning when the ultimate controlling party starts control. Equity investments madebefore obtaining controlling right, relevant gains and losses and other comprehensive income as well as otherchanges in net assets confirmed during the latter date between point obtaining original equity and combined partyand combinee under the same control day to the combined day, shall be offset against the retained earnings orprofit or loss of the comparative reporting period.
During the reporting period, opening amount of consolidated balance sheet shall not be adjusted since enterpriseunder different control combine or increase holding of subsidiary or business; the income, expense and profit ofthe subsidiaries or business from the acquisition date to the end of reporting period shall be included in theconsolidated profit statement; while cash flows shall be included into the consolidated cash flow statement.
Equity held from investee before acquisition date shall be measured at fair value of acquisition date if additional
investment and other reasons can lead investee to be controlled under the same control. Difference between thefair value and the book value is recognized as investment income. other comprehensive income and other owners'equity except for net profit or loss, other comprehensive income and the distribution of profits related to equityheld from investee before acquisition date, as well as relevant other comprehensive income associated with allother by changes in equity shall be included in current investment income, except for other comprehensive incomearising from change of net assets or net liabilities redefined by investee.
(2) Disposal of subsidiaries or business
① The general approach
During the reporting period, the Company carry out disposal of subsidiaries or business, revenue, expense andprofit of the subsidiary or business included in the consolidated profit statement from the beginning to the disposaldate; while the cash flow into cash flow table.
If losing controlling right to investee due to disposal of partial equity, the remaining equity after the disposal shallbe re-measured at fair value at the date when control is lost. Price of equity disposal plus fair value of theremaining equity, then subtracting net assets held from the former subsidiary from the acquisition date orcombination date initially measured in accordance with original stake and goodwill, the difference shall beincluded in investment income of the period losing controlling right. other comprehensive income and otherowners' equity except for net profit or loss, other comprehensive income and the distribution of profits related toequity held from investee before acquisition date, as well as relevant other comprehensive income associated withall other by changes in equity shall be included in current investment income, except for other comprehensiveincome arising from change of net assets or net liabilities redefined by investee.
If the Company’s shareholding ratio declines and thus loses the control power due to other investors’ capitalincrease in the subsidiaries, accounting treatment shall be conducted in accordance with the above principles.
7. Classification of joint venture arrangement and accounting for joint operations
Joint venture arrangements are divided into joint operations and joint ventures.When the Company is a joint venture party of a joint venture arrangement and enjoys the relevant assets of thearrangement and bears the liabilities related to the arrangement, it is a joint operation.
The Company recognizes its proportion of interests in joint operation as related to the Company, and accounts forunder relevant business accounting principles:
(1) To recognize separately-held assets and jointly-held assets under its proportion;
(2) To recognize separately-assumed liabilities and jointly-assumed liabilities under its proportion;
(3) To recognize revenue from disposal of the output which the Company is entitled to under the proportion;
(4) To recognize revenue from disposal of the output under the proportion;
(5) To recognize separately occurred expenses, and to recognize expenses occurred for joint operations under itsproportion.
8. Recognition standards for cash and cash equivalents
When preparing cash flow statement, the Company recognized the stock cash and deposits available for paymentat any time as cash, and investments featuring with the following four characters at the same time as cashequivalents: short term (expire within 3 months commencing from purchase day), active liquidity, easy to convertto already-known cash, and small value change risks.
9. Foreign currency business and conversion of foreign currency statement
9.1 Foreign currency business
The foreign currency business uses the spot exchange rate on the transaction date as the conversion rate to convertthe foreign currency amount into RMB.
The balance of foreign currency monetary items on the balance sheet date is converted at the spot exchange rate onthe balance sheet date. The resulting exchange differences, except that the balance of exchange generated from theforeign currency special borrowings related to the assets whose acquisition and construction are eligible forcapitalization is disposed in accordance with the principle of borrowing costs capitalization, are included in thecurrent profit and loss.
9.2 Conversion of foreign currency financial statements
Assets and liabilities in the balance sheet are converted at the spot exchange rate on the balance sheet date; exceptfor the “undistributed profit” item, other items of the owner's equity items are converted at the spot exchange rate atthe time of occurrence. Income and expense items in the income statement are converted at the spot exchange rateon the transaction date.
When disposing an overseas operation, the translation difference of the foreign currency financial statements relatedto the overseas operation is transferred from the owner's equity items to the disposal of the current profit and loss.
10. Financial instruments
Financial instruments include financial assets, financial liabilities and equity instruments.
10.1 Categories of financial instruments
Accounting policy applicable since 1
stJan. 2019According to the business model of managing financial assets and the contractual cash flow characteristics offinancial assets, at initial recognition, the Company classifies the financial assets into the financial assets
measured at amortized cost, the financial assets(debt instrument) measured at fair value and whose changes areincluded in other comprehensive income, and the financial assets measured at fair value and whose changes areincluded in current gain or loss.
The financial assets of which the business model aims at the collection of contractual cash flow and the contractualcash flow is only the payment of the principal and the interest based on the outstanding principal amount areclassified as financial assets measured at amortized cost. The financial assets of which the business model aims notonly at the collection of contractual cash flow but also at selling the financial assets and the contractual cash flow isonly the payment of the principal and the interest based on the outstanding principal amount are classified asfinancial assets measured at fair value and whose changes are included in other comprehensive income (debtinstruments). Other financial assets other than this are classified as financial assets measured at fair value and whosechanges are included in current profit and loss.
For non-trading equity instrument investment, the Company determines whether it is designated as a financial asset(equity instrument) measured at fair value and whose changes are included in other comprehensive income at theinitial recognition. In the initial recognition, in order to eliminate or significantly reduce accounting mismatches,financial assets can be designated as financial assets measured at fair value and whose changes are included incurrent profit and loss.
In the initial recognition, financial liabilities are classified as the financial liabilities measured at fair value andwhose changes are included in current profit and loss and the financial liabilities measured at amortized cost.
Financial liabilities that meet one of the following conditions can be designated as financial liabilities measured atfair value and whose changes are included in current profit and loss in the initial measurement:
1) The designation can eliminate or significantly reduce accounting mismatches.
2) According to the enterprise risk management or investment strategy specified in the official written document,manage and make performance evaluation of the financial liability portfolio or financial assets and financialliability portfolio based on fair value, and report to the key management personnel based on this.
3) The financial liability includes embedded derivatives that need to be separately split.
Accounting policy applicable before 1
stJan. 2019At initial recognition, financial assets and financial liability are classified as: financial assets or liabilitiesmeasured at fair value and with its variation reckoned into current gains/losses, including the Tradable financialassets or financial liabilities and financial assets or liabilities directly designated measured at fair value and withits variation reckoned into current gains/losses; held-to-maturity investment; account receivable; financial assetsavailable-for-sale; other financial liability and so on.
10.2 Recognition and measurement for financial instrument
Accounting policy applicable since 1
stJan. 2019
(1) Financial assets measured at amortized cost
Financial assets measured at amortized cost include notes receivable, accounts receivable, other receivables,long-term receivables, and debt investment, which are initially measured at fair value, and related transaction costsare included in the initial recognition amount. The accounts receivable not including major financing componentsand the accounts receivable that the Company decides not to consider the financing component of not more than oneyear are initially measured at the contract transaction price.
Interest calculated by the effective interest method during the holding period is included in the current profit andloss.
When recovering or disposing, the difference between the price obtained and the book value of the financial asset isincluded in the current profit and loss.
(2) Financial assets (debt instruments) measured at fair value and whose changes are included in othercomprehensive incomeFinancial assets (debt instruments) measured at fair value and whose changes are included in other comprehensiveincome, including receivables financing, other debt investment, etc., are initially measured at fair value, and relatedtransaction expenses are included in the initial recognition amount. The financial assets are subsequently measuredat fair value, the changes in fair value are included in other comprehensive income except for interest, impairmentlosses or gains and exchange gains and losses calculated by using the effective interest method.
When a financial asset is terminated for recognition, the accumulated gain or loss previously included in othercomprehensive income is transferred from other comprehensive income and included in current profit and loss.
(3) Financial assets (equity instruments) measured at fair value and whose changes are included in othercomprehensive incomeFinancial assets (equity instruments) measured at fair value and whose changes are included in other comprehensiveincome, including other equity instruments, etc., are initially measured at fair value, and related transactionexpenses are included in the initially recognized amount. The financial assets are subsequently measured at fairvalue, and changes in fair value are included in other comprehensive income. The dividends obtained are included inthe current profits and losses.
When a financial asset is terminated for recognition, the accumulated gain or loss previously included in othercomprehensive income is transferred from other comprehensive income and included in retained earnings.
(4) Financial assets measured at fair value and whose changes are included in current profit and loss
Financial assets measured at fair value and whose changes are included in current profit and loss, includingTradable financial assets, derivative financial assets and other non-current financial assets, etc., are initiallymeasured at fair value, and related transaction expenses are included in the initial recognition amount. The financialassets are subsequently measured at fair value, and changes in fair value are recognized in current profit and loss.
(5) Financial liabilities measured at fair value and whose changes are included in current profit and lossFinancial liabilities measured at fair value and whose changes are included in current profit and loss, includingtransaction financial liabilities, derivative financial liabilities, etc., are initially measured at fair value, and relatedtransaction expenses are included in current profit and loss. The financial liabilities are subsequently measured atfair value, and changes in fair value are included in current profit and loss.
When a financial liability is terminate for recognition, the difference between book value and the considerationpaid shall be recorded into the current profit and loss.
(6) Financial liabilities measured at amortized cost
Financial liabilities measured at amortized cost, including short-term borrowings, bills payable, accounts payable,other payable, long-term borrowings, bonds payable, and long-term payable, are initially measured at fair value, andrelated transaction expenses are included in the initial recognition amount.
Interest calculated by the effective interest method during the holding period is included in the current profit andloss.
When a financial liability is terminate for recognition, the difference between the consideration paid and the bookvalue of the financial liability is included in current profit and loss.
Accounting policy applicable before January 1, 2019
(1) Financial assets (financial liabilities) measured at fair value and whose changes are included in current profitand lossAt the time of acquisition, the fair value (deducting the cash dividends that have been declared but not yet paid or thebond interest whose interest payment has been due but not yet received) is taken as the initial recognition amount,and the related transaction expenses are included in the current profit and loss.
During the holding period, the interest or cash dividends are recognized as investment income, and the changes infair value are included in the current profit and loss at the end of the period.
At the time of disposal, the difference between the fair value and the initial recorded amount is recognized asinvestment income, and the gains and losses from changes in fair value are adjusted.
(2) Held-to-maturity investments
At the time of acquisition, the sum of the fair value (deducting the bond interest whose interest payment has beendue but not yet received) and the related transaction expenses is taken as the initial recognition amount.
During the holding period, the interest income is calculated and recognized based on the amortized cost and theactual interest rate, and is included in the investment income. The effective interest rate is determined at the time ofacquisition and remains unchanged during the expected duration or for a shorter period of time applicable.
At the time of disposal, the difference between the purchase price and the book value of the investment is includedin the investment income.
(3) Account receivable
The contract price charged to the buyers shall be recognized as initial value for those account receivables whichmainly comprise the receivable creditor’s right caused by the sale of goods and providing of labor service toexternal customers by the Company, and receivables in other companies excluding debt instruments priced inactive markets, includes but not limited to account receivables, other account receivables and so on. Ifcharacterized as of financing nature, the initial recognition shall be priced at the present value.
Upon disposal, the difference between the sale value and the book value of the receivables shall be accounted intocurrent profit or loss on its recovery or disposal.
(4) Available-for-sale financial assets
At the time of acquisition, the sum of the fair value (deducting the cash dividends that have been declared but not yetpaid or the bond interest whose interest payment has been due but not yet received) and the related transactionexpenses are taken as the initial recognition amount.
During the holding period, the interest or cash dividends obtained are recognized as investment income. At the endof the period, it is measured at fair value and the changes in fair value are included in other comprehensive income.However, an equity instrument investment that is not quoted in an active market and whose fair value cannot bereliably measured and the derivative financial assets that are linked to the equity instrument and that are required tobe settled through the delivery of the equity instrument are measured at cost.
At the time of disposal, the difference between the price obtained and the book value of the financial asset isincluded in the investment gains and losses. At the same time, the amount of the accumulated amount of changes infair value originally and directly included in other comprehensive income being corresponding to the disposalportion is transferred out and included in current profit and loss.
(5) Other financial liabilities
Initial recognition amount is determined at the sum of fair value and relevant transaction fee. Subsequentmeasurement is conducted at amortized cost.
10.3 Confirmation evidence and measurement methods for transfer of financial assetsWhen transfer of financial assets occurs, the Company shall stop recognition of such financial assets if allrisks and remunerations related to ownership of such financial assets have almost been transferred to thereceiver; while shall continue to recognize such financial assets if all risks and remunerations related toownership of such financial assets have almost been retained.
When judging whether or not the aforesaid terminal recognition condition for financial assets is arrived at fortransfer of financial assets, the Company generally adopts the principle that substance over weighs format.
The Company divides such transfer into entire transfer and part transfer. As for the entire transfer meetingcondition for discontinued recognition, balance between the following two items is recorded in current gains andlosses:
(1) Carrying value of financial assets in transfer;
(2) Aggregate of the consideration received from transfer and accumulative movements of fair value originallyrecorded in owners’ equity directly (applicable when financial assets involved in transfer belong to financial assetsavailable for sale).
As for the part transfer meeting condition for discontinued recognition, entire carrying value of financial assets intransfer is shared by discontinued recognition part and continued recognition part, in light of their respective fairvalue. Balance between the following two items is recorded in current gains and losses:
(1)Carrying value of discontinued recognition part;
(2) Aggregate of the consideration of discontinued recognition part and amount of such part attributable toaccumulative movements of fair value originally recorded in owners’ equity directly (applicable when financialassets involved in transfer belong to financial assets (debt instrument) measured at fair value and whose changesare included in other comprehensive income and the financial assets available for sale).
Financial assets are still subject to recognition if transfer of such assets doesn’t satisfy the condition fordiscontinued recognition. And consideration received is recognized as financial liability.
10.4 Condition for terminating the recognition of financial liability
As for the financial liabilities with its whole or part present obligations released, the company shall terminate therecognition for such financial liabilities or part of it. if the company enters into agreement with its creditor tosubstitute for the existing financial liabilities by means of assuming new financial liabilities, then the companyshall terminate the recognition for the existing financial liabilities and recognized the new financial liabilities
provided that the contract clauses of the new and the existing financial liabilities are different in substance.
If the company makes substantial amendment to the whole or part contract clauses of the existing financialliabilities, it shall terminate the recognition for the existing financial liabilities or part of it. Meanwhile, thefinancial liabilities with amendment to its clauses shall be realized as new financial liabilities.
In case of terminate the recognition of financial liabilities in whole or part, the difference between the carryingvalue of such financial liabilities and consideration paid (including the non-cash assets exchanged or newfinancial liabilities assumed) shall be recorded in current gains and losses.
In case that the company repurchases part of financial liabilities, based on the comparative fair value of thecontinuing recognition part and the derecognizing part, the company shall allocate the carrying value of thefinancial liabilities in whole on the repurchase date. Difference between the carrying value allocated to thederecognizing part and the consideration paid (including the non-cash assets exchanged or new financial liabilitiesassumed) shall be recorded in current gains and losses.
10.5 Determination method for fair value of financial assets and financial liabilitiesAs for the financial instrument with an active market, the fair value is determined by the offer of the active market;there is no active market for a financial instrument, the valuation techniques to determine its fair value. At thetime of valuation, the Company adopted applicable in the present case and there is enough available data andother information technology to support valuation, assets or liabilities of feature selection and market participantsin the trading of the underlying asset or liability considered consistent input value and priority as the relevantobservable inputs. Where relevant observable inputs can not get or do not get as far as practicable, the use ofun-observable inputs.
10.6 Testing of the financial assets impairment and accounting treatmentAccounting policy applicable from January 1, 2019The Company considers all reasonable and evidence-based information, including forward-looking information,and estimates the expected credit losses of the financial assets measured at amortized cost and the financial assets(debt instruments) measured at fair value and whose changes are included in other comprehensive income on asingle or combination mode. The measurement of expected credit losses depends on whether the credit risks offinancial assets have increased significantly since the initial recognition.
If the credit risk of the financial instrument has increased significantly since the initial recognition, the Companymeasures its loss provision based on the amount equivalent to the expected credit losses for the entire duration of thefinancial instrument; if the credit risk of the financial instrument has not increased significantly since the initialrecognition, the Company measures its loss provision based on the amount equivalent to the expected credit lossesof the financial instrument in the next 12 months. The increase or reversal amount of the resulting loss provision is
included in the current profit and loss as an impairment loss or gain.
Usually, if it s overdue for more than 30 days, the Company shall believe that the credit risk of the financialinstrument has increased significantly, unless there is conclusive evidence that the credit risk of the financialinstrument has not increased significantly since the initial recognition.
If the financial instrument's credit risk at the balance sheet date is low, the Company shall believe that the credit riskof the financial instrument has not increased significantly since the initial recognition.
If there is objective evidence that a financial asset has suffered credit impairment, the Company shall makeprovision for impairment of the financial asset on a single basis.
The Company needs to confirm that the financial instruments of impairment losses are financial assets (includingreceivables) measured at amortized cost, debt instrument investments measured at fair value and their changes areincluded in other comprehensive income, and lease receivables, mainly including bills receivable, accountsreceivable, other receivables, Creditors’ investment, Other creditors’ investment, long-term receivables, etc. Inaddition, for some financial guarantee contracts, impairment provision and credit impairment losses should beaccrued in accordance with the accounting policies described in this section. Regarding an account receivable,whether or not it contains a significant financing component, the Company always measures its loss provisions inaccordance with the expected credit losses for the entire duration.
For lease receivables, long-term receivables formed by the company through the sale of commodities or theprovision of labor services, the Company chooses to always measure their loss reserves in accordance with theexpected credit losses for the entire duration.
The Company combines account receivables by similar credit risk characteristics, based on the financial assetportfolio structure and similar credit risk characteristics (the debtor’s ability to repay the arrears in accordancewith the contract terms), combined with historical default loss experience and current economic conditions andconsidering forward-looking information, and measures the loss provision at an amount equivalent to the expectedcredit losses for the entire duration.Accounting policy applicable before January 1, 2019Except for financial assets measured at fair value and whose changes are included in current profit and loss, theCompany checks the book value of financial assets on the balance sheet date. If there is objective evidence that afinancial asset is impaired, make impairment provision.
(1) Provision for impairment of available-for-sale financial assets:
At the end of the period, if the fair value of available-for-sale financial assets seriously declines, or aftercomprehensive consideration of various relevant factors, it is expected that such downward trend is non-temporary,it is deemed to have been impaired, and the accumulated losses resulting from the decline in the fair value originally
and directly included in the owner's equity are transferred out and the impairment loss is recognized.
If there are objective evidences showing that the value of available-for-sale debt instrument is recovered and itrelates to the matters happened after the impairment loss recognition, the impairment loss recognized shall bereversed and accounted in current profit or loss.
The impairment loss from equity instrument investment available-for-sale should no be reversed throughgains/losses.
(2)Bad debt provision for account receivable:
①Account receivable with single significant amount and withdrawal bad debt provision on single basis:
Judgment basis or amount standard of a single significant amount:
Account receivable: single account receivable has over 10 million Yuan in amount;Other account receivable: single other account receivable has over 5 million Yuan in amount.Accrual method for account with single significant amount and withdrawal bad debt provision on single basis:
Conducted impairment testing separately, balance between the present value of future cash flow and its carryingvalue, bad debt provision withdrawal and reckoned into current gains/losses. For those without impairment beingfound after test, collected into relevant combination for accrual.
②Accounts receivable whose bad debts provision was accrued by combination based on credit risk characteristicsportfolio:
| Portfolio | Accrual method | Basis for portfolio termination |
| Related parties in consolidate scope | Bad debt provision without accrual | For receivables among related parties within the scope of consolidation, the possibility of bad debts is very small, and no bad debt provision is made for the portfolio. |
| Specific objects | Bad debt provision without accrual | For cash deposit, security deposit and receivables from government departments, the possibility of bad debts is very small, and no bad debt provision is made for the this portfolio. |
| Aging analysis | Aging analysis | Including receivables other than the above portfolios, the Company makes the best estimate on the provision proportion of receivables based on the past historical experience, and refers to the age of receivables for credit risk portfolio classification. |
Accrual bad debt provision by aging analysis in portfolio:
| Account age | Accrual ratio of the account receivable (%) | Accrual ratio of the other account receivable (%) |
| Within one year(one-year included) | 1 | 1 |
| 1－2 years | 10 | 10 |
| 2－3 years | 30 | 30 |
| 3－4 years | 50 | 50 |
| 4－5 years | 50 | 50 |
| Over 5 years | 80 | 80 |
③Account receivable with minor single amount but withdrawal bad debt provision on single item:
Reasons for provision of bad debt reserve: There is objective evidence that the Company will not be able torecover the money under the original terms of receivables.Provision method of bad debt reserve: Withdrawn according to the difference between present value of expectedfuture cash flows and the book value of the receivables.
11.Note receivable
Reference to 10. Financial Instrument in this Section
12.Account receivable
Reference to 10. Financial Instrument in this Section
13. Account receivable financing
Nil
14. Other account receivable
Determining method and accounting treatment on the expected credit loss of other account receivableReference to 10. Financial Instrument in this Section
15. Inventory
15.1 Classification
Inventory includes raw materials, revolving material, goods in process, goods in transit and work inprocess-outsourced and so on.
15.2 Valuation methods for send out stocks
Stocks are valued at time of shipment by weighted average method or individual valuation method.
15.3 Recognition standards of the net realizable value for inventory
The net realizable value of inventory products and materials for sale, in normal business production, ismeasured as the residual value after deducting the estimated sales expense and related taxes and fees fromthe estimated selling price; the net realizable value of an item of inventories subject to further processing,
in normal business production, is measured as the residual value after deducting the sum of the estimatedcosts of completion, sales expense and related taxes and fees from the estimated selling price of the for-saleitem. The net realizable value of the quantity of inventories held to satisfy firm sales or service contracts isbased on the contract price. If the sales contracts are for less than the inventory quantities held, the netrealizable value of the excess is based on general selling prices.
An impairment allowance, if any, is generally individually recognized for each type of inventories at period-endexcept: For an individual impairment allowance, if any, is recognized for the whole category of inventories of lowvalue and large quantities; and for an individual impairment allowance, if any, is recognized for a group ofinventories, which are held for the production and sales of products of a single territory and for identical or similarusages or purposes, and which are indistinguishable from other types of inventories within the group.
Except that there is clear evidence indicates that the market price on the balance sheet date is abnormal, the netrealizable value of the inventory item is determined based on the market price at the balance sheet date.
The net realizable value of the inventory items at the end of the period is determined based on the market price at thebalance sheet date.
15.4 Inventory system
Inventory system is the perpetual inventory system.
15.5 Amortization of low-value consumables and packaging materials
(1) Low-value consumables adopts the method of primary resale;
(2) Wrappage adopts the method of primary resale.
16. Contractual asset
Nil
17. Contract cost
Nil
18. Assets held for sale
Nil
19. Creditors’ investment
Nil
20. Other creditors’ investment
Nil
21. Long-term account receivable
Nil
22. Long-term equity investment
22.1 Criteria for judgment of the common control and significant influenceCommon control refers to the control that is common to an arrangement in accordance with the relevantagreement, and the relevant activities of the arrangement must be agreed upon by the participants sharing thecontrol rights before making a decision. Where the Company and other joint venture parties jointly control theinvested entity and have rights to the net assets of the invested entity, the invested entity is the joint venture of theCompany.
Significant influence refers to the right to participate in making decisions relating to the financial and operationalpolicies of an enterprise, while not able to control or jointly control (with others) establishment of these policies.If the Company has significant influence on the invested enterprises, than such invested enterprises shall be thejoint venture of the Company.
22.2 Determination of initial investment cost
(1) Long-term equity investment formed by business combination
Business combination under the same control: If the company pays cash, transfers non-cash assets or assumes debts,and issues equity securities as the merger consideration, the share of the book value of the acquired owner's equityof the merged party in the consolidated financial statements of the ultimate controlling party is taken as the initialinvestment cost of the long-term equity investment on the merger date. If it is possible to exercise control over theinvestee under the same control due to additional investment, etc., the initial investment cost of the long-term equityinvestment shall be determined according to the share of the book value of the net assets of the merged party in theconsolidated financial statements of the ultimate controlling party on the merger date. The equity premium isadjusted based on the difference between the initial investment cost of the long-term equity investment on thecombination date and the book value of the long-term equity investment before the merger plus the book value ofthe new payment consideration for stock further obtained on the merger date, if the equity premium is insufficient tobe offset, offset the retained earnings.
Business combination not under the same control: The company take the merger cost determined on the purchasedate as the initial investment cost of the long-term equity investment. If it is possible to control the investee underthe same control due to additional investment, etc., the initial investment cost calculated by the cost method iscalculated according to the sum of the book value of the original equity investment plus the new investment cost.
(2) Long-term equity investment required by other ways
For long-term equity investments obtained through payment with cash, then the actual payment shall be viewed asinitial investment cost.
For long-term equity investments obtained through issuance of equity securities, then the fair value of suchsecurities shall be viewed as initial investment cost
Under the precedent condition that non-monetary assets exchanges are featured with commercial natureand fair values of exchange-in or exchange-out assets can be reliably measured, long-term equityinvestment exchange-in through non-monetary assets exchange shall be recognized with initial investmentcost on the basis of the fair value of the assets exchange-out, unless there is obvious evidence showing thatfair value of exchange-in assets is more reliable; as for non-monetary assets exchanges not satisfying suchprecedent condition, initial investment cost of exchange-in long-term equity investment falls to thecarrying value of exchange-out assets and relevant taxes payable.
For long-term equity investment obtained through debt restructuring, the entry value is determined by the fair valueof the abandoned creditor's right and the taxes directly attributable to the asset and other cost, and the differencebetween the fair value of the abandoned creditor's right and the book value is included in current profit and loss.
22.3 Subsequent measurement and recognition of gains and losses
(1) Long-term equity investment measured by cost
The long-term equity investment for subsidiary shall be measured by cost.Other than payment actually paidfor obtaining investment or cash dividend or profit included in consideration which has been declaredwhile not granted yet, the Company recognizes investment income according to its share in the cashdividend or profit declared for grant by the invested unit.
(2) Long-term equity investment measured by equity
The Company calculates long term equity investment in associates and joint ventures under equity method. Wherethe initial investment cost of a long-term equity investment exceeds the Group’s share of the fair value of theinvestee’s identifiable net assets at the time of acquisition, no adjustment is made to the initial investment cost.Where the initial investment cost is less than the Group’s share of the fair value of the investee’s identifiable netassets at the time of acquisition, the difference is recognized in profit or loss for the period.
Return on investments and other comprehensive income is recognized respectively by shares of net gains andlosses realized by the invested company and other comprehensive income, and book value of such investment isadjusted accordingly. Profit or cash dividends pro rata distributed by the invested company are to minus bookvalue of the relative long-term investment. Book value of long-term investment is adjusted when changes occurother than net gains and losses, other comprehensive income and profit distribution of the invested company, and
is to report in owners’ equity accordingly.
The Company should recognized net profit of invested unit after adjustment according to the accounting policyand period of the Company, based on fair value of vary identifiable assets of invested unit while obtainedinvestment, while recognized net profit or net losses of invested units that should be enjoy by investmententerprise. During the period of holding the investment, if the investee prepares the consolidated financial statement,it shall be accounted for a based on the net profit, other comprehensive income and the amount attributable to theinvestee in changes in the other owner's equity in the consolidated financial statements.
The un-realized transaction gains/losses attributable to investment enterprise, internally occurred between theCompany, affiliated units and joint-ventures should calculated by proportion of shares-holding which should beoffset, than recognized investment gains/losses. If the unrealized internal transaction losses with the investee areassets impairment losses, they will be fully recognized. If a transaction of investing or selling assets occursbetween the company and an associate enterprise or joint venture, and the assets constitute a business, theaccounting treatment shall be handled in accordance with relevant policy policies disclosed in the Notes “5.Accounting Treatment Methods for Business Combinations Under the Same Control and Not Under the SameControl” and “6.Methods for Preparing Combined Financial Statements”.
When the Company is confirmed to share losses of the invested units, the following order shall prevail fordisposal: first of all, offset carrying value of long-term equity investment. Second, for long-term equityinvestment whose carrying value is not enough for offset, investment loss should be continued to recognizewithin the limit of carrying value of other long-term equity which substantially forms net investment toinvested units, to offset carrying value of long-term items receivable. At last, after the aforesaid treatment,if enterprise still bears additional duties according to investment contract or agreement, projected liabilitiesare recognized in accordance to the obligations which are expected to undertake, and then recorded incurrent gains and losses.
(3) Disposal of long-term equity investment
Difference between carrying value and actual acquisition price in respect of disposal of long term equityinvestment shall be included in current period gains and losses.
For long term equity investment under equity method, the Company shall adopt the same basis as the investeedirectly disposes relevant assets or liabilities when disposing this investment, and account for the part originallyincluded in other comprehensive income under appropriate proportion. The owner's equity recognized as a resultof changes in the owner's equity other than the net profit or loss, other comprehensive income and profitdistribution of the investee is carried forward to the current profit and loss in proportion, except for othercomprehensive income arising from changes in net liabilities or net assets as the investee re-measures the definedbenefit plans.
If the joint control or significant influence on the investee is lost due to the disposal of part of the equityinvestment, etc., the remaining equity after disposal shall be accounted for according to the recognition andmeasurement standard of financial instruments, and the difference between the fair value and the book value ofthe day losing the joint control or significant impact is included in the current profit and loss. For othercomprehensive income as recognized under equity method in respect of the original equity investment, when theCompany ceases calculation under equity method, the aforesaid income shall be accounted for on the same basisas the investee would otherwise adopt when it directly disposes relevant assets or liabilities. The owner's equityrecognized as a result of changes in the owner's equity other than the net profit or loss, other comprehensiveincome and profit distribution of the investee is carried forward to the current profit and loss when the equitymethod is terminated to be used for business accounting.
The Company loses the control over the investee due to the decrease in shareholding ratio caused by the disposalof part of the equity investment or other investors' capital increase in the subsidiary, if the remaining equity canimplement joint control or significant influence on the investee, it shall be accounted for according to the equitymethod when preparing individual financial statements, and the remaining equity shall be adjusted as if it wasaccounted for according to the equity method since obtained. If the remaining equity cannot implement jointcontrol or significant influence on the investee, it shall be accounted for according to relevant provisions of therecognition and measurement standard of financial instruments, and the difference between the fair value and thebook value on the date of loss of control is included in current profit and loss.
The disposed equity is obtained through business combination for reasons such as additional investment, in thepreparation of individual financial statement, if the remaining equity after disposal is accounted for by using thecost method or equity method, for the equity investment held before the purchase date, other comprehensive incomeand other owner's equity recognized due to being accounted for by using the equity method are carried forward on apro-rata basis; if the remaining equity after disposal is changed to be accounted for according to the recognition andmeasurement standard of financial instruments, the other comprehensive income and other owners' equity shall beentirely carried forward.
23. Investment real estate
MeasurementMeasured by costDepreciation or amortization methodInvestment real estate is defined as the real estate with the purpose to earn rent or capital appreciation or both,including the rented land use rights and the land use rights which are held and prepared for transfer afterappreciation, the rented buildings (including the buildings for rent after completion of self-construction ordevelopment activities and the buildings under construction or development for future lease).
Current investment real estate of the Company are measured by cost. As for the investment real estate-rentalbuilding measured by cost, the depreciation policy is same as the fixed assets of the Company, the land use rightfor rental has the same amortization policy as intangible assets.
| Category | Expected service life (year) | Expected net salvage value | Annual amortization (depreciation) rate |
| Houses and buildings | 10-40 | 5% | 2.37%-9.50% |
24. Fixed asset
(1)Recognition
Fixed assets is defined as the tangible assets which are held for the purpose of producing goods, providingservices, lease or for operation & management, and have more than one year of service life. Fixed assets should berecognized for qualified the followed conditions at the same time: (1) It is probable that the economic benefitsassociated with the assets will flow into the Company; (2) The cost of the assets can be measured reliably.
(2)Depreciation methods
| Category | Method | Years of depreciation | Scrap value rate | Yearly depreciation rate |
| House and buildings | ||||
| Production buildings | Straight-line depreciation | 20-35 | 5 | 2.71-4.75 |
| Non-production buildings | Straight-line depreciation | 20-40 | 5 | 2.38-4.75 |
| Temporary dormitory and simple room etc. | Straight-line depreciation | 5-15 | 5 | 6.33-19.00 |
| Gas storage bin | Straight-line depreciation | 20 | 5 | 4.75 |
| Silo | Straight-line depreciation | 50 | 5 | 1.90 |
| Wharf and supporting facilities | Straight-line depreciation | 50 | 5 | 1.90 |
| Machinery equipment | ||||
| Other machinery equipment | Straight-line depreciation | 10-20 | 5 | 4.75-9.50 |
| Warehouse transmission equipment | Straight-line depreciation | 20 | 5 | 4.75 |
| Electronic equipment | Straight-line depreciation | 2-5 | 5 | 19.00-47.50 |
| Transport equipment | Straight-line depreciation | 3-10 | 5 | 9.50-31.67 |
| Other equipment | Straight-line depreciation | 3-10 | 5 | 9.50-31.67 |
Depreciation of fixed assets is classified and accrued by using the straight-line depreciation, and the depreciationrate is determined according to the type of fixed assets, the expected service life and the estimated net residualvalue rate. If each component of the fixed assets has different service lives or provides economic benefits to theenterprise in different ways, select different depreciation rates or depreciation methods, and the depreciation isaccrued separately.Fixed assets leased in the form of financial leasing, if it is reasonable to be certain that the lessee will obtain theownership of the leased asset when the lease term expires, the leased asset shall be fully depreciated over itsuseful life. If it is not reasonable to be certain that the lessee will obtain the ownership of the leased asset at theexpiry of the lease term, the leased asset shall be fully depreciated over the shorter one of the lease term or itsuseful life.
(3) Recognition, measurement and depreciation of fixed assets held under finance leaseIf any of the following conditions are stipulated in the lease agreement signed by the Company and the lessee, itshall be recognized as a financial leased assets: (1) ownership of the leased assets shall belong to the Companyupon the expiration of the lease term; (2) the Company has the option to purchase assets for a purchase price muchlower than the fair value of the assets when the option is exercised; (3) the lease period accounts for most of theservice life of the leased assets; (4) there is no significant difference between the present value of the minimumlease payment on the lease commencement date and the fair value of the assets. On the lease start date, thecompany regards the lower of the fair value of the leased asset and the present value of the minimum leasepayment as the book value of the leased asset and regards the minimum lease payment amount as the book valueof the long-term payable, and the difference is regarded as unrecognized financing charges.
25. Construction in progress
Fixed asset is booked with the entire expenditures occurred in the Construction in progress till it arrives atpredicted state for use. For those constructions in process of fixed assets which have already arrived at thepredicted state for use, while still with absence of completion settlement, they shall be carried forward tofixed assets at the estimated value based on engineering budget, construction cost or actual costcommencing from the date of arrival of the predicted state for use. Meanwhile, they shall be also subject tothe depreciation policies applicable to fixed assets of the Company for provision of depreciation. Oncecompletion settlement is made, the original temporary estimated value shall be adjusted at the effectivecost. However, the original provision of depreciation remains unchanged.
26. Borrowing expenses
26.1 Recognition of the borrowing expenses capitalization
Borrowing expenses including the amortization of interest, discount or premium on borrowing, the ancillaryexpenses and exchange differences arising from foreign currency borrowings and so on.
Borrowing expenses that attributed for purchasing or construction of assets that are complying start to becapitalized and counted as relevant assets cost; other borrowing expenses, reckoned into current gains andlosses after expenses recognized while occurred.
Assets satisfying the conditions of capitalization are those assets of fixed, investment real estate etc. which need along period of time to purchase, construct, or manufacturing before becoming usable.
Capitalizing for borrowing expenses by satisfying the followed at same time:
(1) Assets expense occurred, and paid as expenses in way of cash, non-cash assets transfer or debt withinterest taken for purchasing, constructing or manufacturing assets that complying with capitalizingcondition;
(2) Borrowing expenses have occurred;
(3) Necessary activities occurred for reaching predicted usable statues or sale-able status for assetspurchased, constructed or manufactured.
26.2 Period of capitalization
Capitalizing period was from the time star capitalizing until the time of suspended capitalization. Theperiod for borrowing expenses suspended excluded in the period.
If purchasing, construction, or manufacturing process of an asset satisfying the conditions of capitalizationreached its predicted usable status or sale-able status, capitalization suspended for borrowing expenses.
If purchasing, construction, or manufacturing process of an asset satisfying the conditions of capitalizationcompleted projects and usable independently for part of the projects, borrowing expenses for this kind ofassts shall suspended capitalization.
If the assets have been completed in every part, but can be reached the useful status or sale-able statuswhile completed entirely, the borrowing expense shall be suspended for capitalization while the assetscompletely finished in whole.
26.3 Period of suspended
If purchasing, construction, or manufacturing process of an asset satisfying the conditions of capitalization issuspended abnormally for over 3 months, capitalizing of borrowing expenses shall be suspended; the suspendedassets that satisfying the conditions of capitalization meets the necessary procedure of reaching predicted usablestatus or for-sale status, capitalizing of borrowing expenses shall be resumed. The borrowing expenses occurredduring the period of suspended shall reckon into current gains and losses until the purchasing, construction, ormanufacturing process is resumed for capitalizing.
26.4 Capitalization rate of the borrowing costs, measurement of the capitalized amountAs for the special loans borrowed for the purchase, construction or production of assets eligible for capitalization,the borrowing costs are capitalized by deducting the actual borrowing costs incurred in current period of specialborrowing, the interest income earned by borrowing funds that have not ye been used, deposited in the bank or theinvestment income obtained from the temporary investment.
For the general borrowings used for the acquisition, construction or production of assets eligible for capitalization,the amount of borrowing costs that should be capitalized for general borrowings is calculated and determinedaccording to the weighted average of the asset expenditures of accumulated asset expenditures over the specialborrowings multiplying by the capitalization rate of the occupied general borrowings. The capitalization rate isdetermined based on the weighted average interest rate of general borrowings.
27. Biological assets
27.1 Classification of biological assets
Biological assets of the Company refer to the productive biological assets. Productive biological assets includedtea tree.Biological assets are recognized when the following three conditions are fully satisfied:
(1) An enterprise owns or controls such biological assets due to the past transactions or events；
(2) It may result in the inflow of economic benefits or service potential in relation to such biological assets;
(3) Cost of such biological assets can be reliably measured.
27.2 Initial recognition of Biological assets
The biological assets will initially measured by cost while obtained. The cost of biological asset used forproduction purchased from the outside includes the purchase price, related taxes, transportation expense,insurance premium and other charges directly attributable to the purchase of such asset. Biological asset used forproduction input by investors is stated at its entry value which is calculated based on the value as stipulated in theinvestment contract or agreement plus the related taxes payable. Where value stipulated in the contract oragreement is not fair, the actual cost is fixed at fair value.
27.3 Subsequent measurement of biological assets
(1) Follow-up expenses
The cost of productive biological assets constituted by the actual costs of self-cultivated and constructedproductive biological assets occurred before achieving the intended production and operation goals, and thefollow-up expenses such as management and protection occurred after achieving the intended production goals areincluded in the current profits and losses.
(2) Depreciation of productive biological assets
Biological assets of the Company refer to the tea plants. For those productive biological assts that reached itspredicted productive purpose, withdrawal depreciation by average age method. The service life was determined bythe residual terms of the residual term of land use after deducting the un-maturity period (5-year) of the tea plantswith 5 percent salvage value calculated. Reviewing the service life, predicted salvage vale and depreciationmethod at year-end, if there have difference between the predicted number and original estimated number or havemajor changes on way of profit earning, than adjusted the service life or predicted salvage value or depreciationmethod as account estimation variation.
(3) Disposal of biological assets:
The cost of biological assets after the shift of use is stated at the carrying amount at the time of shift of use. Whensold, destroyed and inventory losses occurred, the disposal income of biological assets net of carrying amount andrelated taxes shall be charged to profit or loss for the current period.
27.4 Biological assets impairment
The Company inspects the productive biological assets at least at the end of each year, conclusive evidenceindicates that if the recoverable amount of productive biological assets are less than the book value due to naturaldisasters, insect pests, animal diseases or changes in market demand, the Company make the provision forimpairment of biological assets and include them in the current profits and losses according to the balancebetween the recoverable amount and the book value.The balance lower than the book value shall be calculated and accrued to falling price reserves or provision forimpairment of biological assets and included in the current profits and losses.Once the provision for impairment of productive biological assets is made, it cannot be reversed.
28. Oil and gas assets
Nil
29. Right-of-use assets
Nil
30. Intangible assets
(1) Measurement, use of life and impairment testing
30.1.1 Measurement
(1) Initial measurement is made at cost when the Company acquires intangible assets;For those intangible assets purchased from outside, the purchase value, relevant taxes and other paymentsattributable to predicted purpose obtained should recognized as cost for this assets. For those purchased amount
that paid overdue exceeded the normal credit condition, owns financing natures actually, the cost should berecognized based on the current value while purchased.
As for the intangible assets acquired from the debtor in debt restructuring for the purpose of settlement of debt, thefair value of the intangible assets shall be based to determine the accounting value. The difference between thecarrying value of restructured debt and the fair value of the intangible assets use for settlement of debt shall berecorded in current gains and losses.
When the exchange of non-monetary assets has commercial substance and the fair value of the assets swapped inor out can be reliably measured, the fair value is used as the basis for measurement. If the fair value of both theswap-in assets and swap-out assets can be reliably measured, for the swap-in intangible assets, the fair value of theswap-in assets and related taxes payable shall be used as the initial investment cost of the swap-in intangibleassets, unless there is solid evidence that the fair value of the swap-in assets is more reliable. If the exchange ofnon-monetary assets does not have commercial substance, or the fair value of the swap-in and swap-out assetscannot be reliably measured, for the intangible assets swapped in, the book value of the swap-out assets and therelevant payable taxes and dues shall be used as the initial investment cost of swap-in intangible assets.
(2) Subsequent measurement
Analyzing and judging the service life of an intangible asset when they are acquired.Those intangible assets with limited useful life are evenly amortized on straight basis from the date when theybecome usable to the end of expected useful life;Intangible assets for which it is impossible to predict the termduring which the assets can bring in economic benefits are viewed as intangible assets with indefinite lifewithout amortization.
30.1.2 Estimation of the service life of intangible assets with limited service life
| Item | Predicted useful life | Amortization method | Basis |
| Land use right | Amortized the actual rest of life after certificate of land use right obtained | Straight-line method | Certificate of land use right |
| Proprietary technology | 20-year | Straight-line method | Actual situation of the Company |
| Trademark use right | 10-year | Straight-line method | Actual situation of the Company |
| Software use right | 5-8 years | Straight-line method | Protocol agreement |
| Forest tree use right | Service life arranged | Straight-line method | Protocol agreement |
| Shop management right | Service life arranged | Straight-line method | Protocol agreement |
30.1.3 Judgment basis on intangible assets with uncertain service life and review procedures for the servicelife
Intangible assets for which it is impossible to predict the term during which the assets can bring in economicbenefits are viewed as intangible assets with indefinite life. Intangible assets with indefinite life are notamortized during the holding period, and useful life is re-reviewed at the end of each accounting period. Incase that it is still determined as indefinite after such re-review, then impairment test will be conductedcontinuously in every accounting period.
(2)Accounting policy of the internal R&D expenditure
30.2.1 Specific criteria for dividing research and development stages
The expenditure for internal R&D is divided into research expenditure and development expenditure.Research stage: stage of the investigation and research activities exercising innovative-ness for new science ortechnology knowledge obtained and understanding.Development stage: stage of the activities that produced new or material advance materials, devices and productsthat by research results or other knowledge adoption in certain plan or design before the commercial production orusage.Expenditures incurred during the research phase of internal R&D projects shall be recorded into the current profitand loss when incurred.
30.2.2 Standards for capitalization satisfaction of expenditure in development state
Intangible assets recognized for expenditure in exploitation stage by satisfying the followed at same time:
(1) Owes feasibility in technology and completed the intangible assets for useful or for sale;
(2) Owes the intention for completed the intangible assets and for sale purpose;
(3) Way of profit generated including: show evidence that the products generated from the intangible assets owesa market or owes a market for itself; if the intangible assets will use internally, than show evidence of useful-ness;
(4) Possess sufficient technique, financial resources and other resources for the development of kind of intangibleassets and has the ability for used or for sale;
(5) The expenditure attributable to the exploitation stage for intangible assets could be measured reliably.
Expenditure happened in development phase not satisfying the above conditions is included in currentperiod gains and losses when occurs. Development expenditure previously included in gains and losses inprevious periods will not be re-recognized as assets in later periods. Capitalized development expenditureis stated in balance sheet as development expenditure, and is transferred to intangible assets when theproject is ready for planned use.
31. Impairment of long term assets
The long-term assets as long-term equity investments, investment real estate measured at cost, fixed assets,construction in progress and intangible assets with certain service life are tested for impairment if there is anyindication that an asset may be impaired at the balance date. If the result of the impairment test indicates that the
recoverable amount of the asset is less than its carrying amount, a provision for impairment and an impairmentloss are recognized for the amount by which the asset’s carrying amount exceeds its recoverable amount. Therecoverable amount is the higher of an asset’s fair value less costs to sell and the present value of the future cashflows expected to be derived from the asset. Provision for asset impairment is determined and recognized on theindividual asset basis. If it is not possible to estimate the recoverable amount of an individual asset, therecoverable amount of a group of assets to which the asset belongs is determined. A group of assets is the smallestgroup of assets that is able to generate independent cash inflows.
Goodwill, intangible assets with uncertain service life and intangible assets that have not reached the serviceablestate shall be subject to impairment test at least at the end of each year.
When the Company conducts the goodwill impairment test, the book value of goodwill formed by businesscombination is apportioned to the relevant asset group according to reasonable methods from the date of purchase; ifit is difficult to apportion it to the relevant asset group, apportion it to the relevant asset group portfolio. Whenapportioning the book value of goodwill, the Company apportions according to the relative benefit that therelevant asset groups or combination of asset groups can obtain from the synergies of business combination, andconducts a goodwill impairment test on this basis.
When conducting impairment test for relevant asset group with inclusion of goodwill, in case that there isindication of impairment for such asset group, impairment test would be firstly conducted in respect of the assetgroups without inclusion of goodwill. Then, it shall calculate the recoverable amount and determine thecorresponding impairment loss as compared to its carrying value. Second, asset group with inclusion of goodwillwould be tested for impairment. If it is found after comparison between the carrying value and recoverableamount of the asset group that the recoverable amount is less than carrying value, the Company would recognizeimpairment loss for goodwill.Once recognized, asset impairment loss would not be reversed in future accounting period.
32. Long term prepaid expense
Long term prepaid expense represents the expense which the Company has occurred and shall be amortized in thecurrent and later periods with amortization period exceeding one year. Long-term prepaid expenses of theCompany includes expenditures on improvement of investment real estate, decoration fee and expenditure forfixed assets improvement etc. Long term prepaid expense is amortized during the beneficial period under straightline method.
33. Contractual liabilities
Nil
34. Staff remuneration
(1)Accounting treatment of short term remuneration
Accounting treatment of short term remunerationIn the period of employee services, short-term benefits are actually recognized as liabilities and charged to profitor loss or relevant assets costs.
Regarding to the social insurance and housing funds that the Company paid for employees, the Company shouldrecognize corresponding employees benefits payable according to the appropriation basis and proportion asstipulated by relevant requirements and recognize the corresponding liabilities.
If the employee welfare are non-monetary benefits and can be measured reliably, they shall be measured at fairvalue.
(2)Accounting treatment for post office benefits
All of the company's after-service benefit plans are d efined contribution planThe Company pays basic endowment insurance and unemployment insurance for employees according to therelevant regulations of the local government. In the accounting period in which employees provide services for theCompany, the amount to be paid is calculated according to the local payment base and proportion, and isrecognized as a liability and included in current profit and loss or related asset cost.The company shall have noother obligation to pay the aforesaid amount after regular payment in accordance with the standard stipulated bythe state and the annuity plan.
(3)Accounting treatment for dismissal benefit
When the Company cannot unilaterally withdraw the dismissal benefits provided by the termination of the laborrelationship plan or the downsizing proposal, or when confirm the cost or expenses related to the reorganization ofthe dismissal benefits (the earlier one), confirm the employee compensation liabilities generated by dismissalbenefits and include in the current profit and loss.
(4)Accounting treatment for other long term staff benefits
Other long term staff benefits refers to all the other staff benefits except for short term remuneration, post officebenefit and dismissal benefit.
For other long term staff benefits satisfying conditions under defined withdraw plan, the contribution payables
shall be recognized as liabilities and included in current gains and losses or relevant asset cost during theaccounting period in which the staff provides services to the Company.
35. Lease liability
Nil
36. Accrual liability
36.1 Recognition standards for accrual liability
When the obligations relating to contingencies such as litigation, debt guarantee, loss contract, reorganization andetc. Satisfy the following conditions, an accrual liability shall be recognized:
(1)The responsibility is a current responsibility undertaken by the Company;
(2)Fulfilling of the responsibility may lead to financial benefit outflow;
(3)The responsibility can be measured reliably for its value.
36.2 Measurement
Accrual liabilities shall conduct initial measurement by best estimation of expenditures needed by fulfillment ofcurrent responsibilities.
While determined the best estimation, take the risks, uncertainty and periodic value of currency that connected tothe contingent issues into consideration. For major influence from periodic value of currency, determined bestestimation after discount on future relevant cash out-flow.
Treatment for best estimation:
If the expenditure has a continuous range, and with similar possibility within the range, the best estimation shoulddetermined by the middle value within the range, that is the average amount between the up and low limit.If the expenditure has no continuous range, or has a continuous range but with different possibility within therange, the possibility amount shall determined as the best estimation while single events involved by contingency;if many events were involved by contingency, the best estimation shall be determined by various results andrelevant probability.If the expenses for clearing of predictive liability is fully or partially compensated by a third party, and thecompensated amount can be definitely received, it is recognized separated as asset. Though the compensatedamount shall not greater than the book value of the predictive liability
37. Share-based payment
Nil
38. Other financial instrument of preferred stocks and perpetual bond
Nil
39. Revenue
Whether implemented the new revenue standards
□Yes √No
39.1 Revenue from sales of goods
(1)Principal risks and rewards in the ownership of the goods are transferred to the buyer;
(2)The Company retains neither the continuing management rights normally associated with ownership noreffective control over the merchandise sold;
(3)The sales revenue can be measured reliably;
(4)The related economic benefits are likely to flow into the company;
(5)The relevant costs incurred or to be incurred can be measured in a reliable way.
The product sales of the Company include domestic sales and export sales. The sales revenue of domestic sales isrecognized after the goods is delivered and conforms to the relevant causes of the contract; the sales revenue ofexport sales is recognized after the goods is sent out and declared, and conforms to the relevant causes of thecontract.
39.2 Rendering of services
(1) The amount of income can be reliably measured;
(2) The relevant economic benefits are likely to flow into the enterprise;
(3) The completion schedule of the transaction can be reliably determined;
(4) The costs incurred and to be incurred in the transaction can be reliably measured.The total amount of labor service income is determined by the received or receivable contract or agreement price,except that the contract or agreement price received or receivable is not fair. On the balance sheet date, the currentlabor service income is determined by the amount that the total labor service income multiplies by the completionschedule and deducts the accumulated labor income from the previous accounting period. At the same time, thecurrent labor cost is carried forward by the amount that the total labor service cost multiplies by the completionschedule and deducts the accumulated labor cost from the previous accounting period.
If the results of the labor service transaction on the balance sheet date cannot be reliably estimated, they shall bedisposed as follows:
(1) If the labor costs incurred is estimated to be compensated, the labor service income shall be determinedaccording to the amount of labor costs incurred, and the labor costs shall be carried forward at the same amount.
(2) If the labor costs incurred is estimated not to be compensated, the labor costs incurred shall be included in thecurrent profit and loss, and the labor service income shall not be recognized.
When the contract or agreement signed by the Company with other enterprises includes the sale of goods and therendering of labor services, if the parts of the sales of goods and the parts of the rendering of labor service can bedistinguished and can be separately measured, treat the part of the sales of goods as the sales of goods, and treatthe part of the rendering of labor services as rendering of labor services. If the parts of the sales of goods and theparts of the rendering of labor service cannot be distinguished, or can be distinguished but cannot be separatelymeasured, treat the part of the sales of goods and the parts of the rendering of labor service both as the sales ofgoods. Recognize revenue for the grain and oil dynamic storage and rotation services provided by the Companyfor the Shenzhen Municipal Government when the relevant labor service activities occur. Specifically, monthlycalculate and recognize the government service income based on the actual storage grain and oil quantity and thestorage price stipulated by “Operational Procedures for Government Grain Storage All-in Cost of Shenzhen” and“Operational Procedures for Edible Vegetable Oil Government Reserve All-in Cost of Shenzhen”.
39.3 The revenue from abalienating of right to use assets
Financial benefit attached to the contract is possibly inflow to the company; Overall income of the contract can bemeasured reliably. Determined the use right income for transaction assets respectively as followed:
(1) Amount of interest income: determined by the time and effective interest rate of the currency capital used byother people.
(2) Amount of income from use: determined by the charge time and calculation method agreed in the relevantcontract or agreement.
(3) For the income from real estate, dock warehouse and other property leasing and terminal docking business,calculate and determine the rental income and warehousing logistics income according to the chargeable time andmethod as stipulated in the contract or agreement.
40. Government Grants
40.1 Types
Governments grants of the Company refer to the monetary and non-monetary assets obtained from governmentfor free, and are divided into those related to assets and others related to revenues.
Government grants related to assets refer to those obtained by the Company and used for purchase or constructionof or otherwise to form long-term assets. Government subsidies related to revenue refer to those other thangovernment subsidies related to assets.
40.2 Recognition of government grant
At end of the period, if there is evidence show that the Company qualified relevant condition of fiscal supportingpolices and such supporting funds are predicted to obtained, than recognized the amount receivable as governmentgrants. After that, government grants shall recognize while actually received.
Government grants in the form of monetary assets are stated at the amount received or receivable.Government grants in the form of non-monetary assets are measured at fair value; if fair value cannot beobtained, a nominal amount (one yuan) is used. Government grants measured at nominal amount isrecognized immediately in profit or loss for the current period.
40.3 Accounting treatment
Based on the nature of economic business, the Company determines whether a certain type of government subsidybusiness should be accounted for by using the total amount method or the net amount method. In general, theCompany only chooses one method for similar or similar government subsidy services, and this method isconsistently applied to the business.
| Item | Calculation content |
| Based on gross method | All business of government grants |
Government grants in relation to purchase of long-term assets such as fixed assets or intangible assets shall berecognized as deferred income. And reckoned into gains/losses by installment with reasonable and systematicapproach according to the useful life of such asserts that purchased or constructed
As for the government grants with income concerned, which has compensated relevant expenses and lossesoccurred in later period, than recognized as deferred income, and reckoned into current gains/losses during theperiod while relevant expenses or losses determined; for those government grants which has compensated relevantexpenses and losses that occurred, reckoned into current gains/losses while acquired. Government grants relevantto daily activities of enterprises are included in other income; government grants irrelevant to daily activities ofenterprises are included in non-operating income and expenditure.
The government grants relevant to discounted interest on policy concessional loans is used to offset the relevantborrowing costs; the fair value of borrowings is used as the entry value of borrowings and the borrowing costs arecalculated according to the actual interest rate method, the balance between the actual amount received and thefair value of borrowings is recognized as deferred income. Deferred income is amortized to offset the relatedborrowing costs by adopting the actual interest rate method in duration of borrowings.
When a recognized government grant needs to be returned, adjust the book value of assets if it is used to offset thebook value of underlying assets at initial recognition; if there is a related deferred income balance, offset the bookbalance of relevant deferred income, and include the excess in current profit or loss; if there is no related deferredincome, and directly include in the current profit or loss.
41. Deferred income tax assets and deferred income tax liabilities
The deferred income tax assets recognized by deductible temporary differences are within the limit of taxableincome that is probably achieved in the future to deduct the deductible temporary differences. The deductible
losses and tax credits that can be carried forward in subsequent years are within the limit of the future taxableincome it is probably achieved in the future to deduct the deductible losses and tax credits, and the correspondingdeferred income tax assets are recognized.
For taxable temporary differences, deferred income tax liabilities are recognized except in special circumstances.
The special circumstances of not recognizing deferred income tax assets or deferred income tax liabilities include:
initial recognition of goodwill; other transactions or matters other than business combinations that neither affectaccounting profits nor affect taxable income (or deductible losses) when occur.
When the Group has a legal right to settle on a net basis and intends either to settle on a net basis or to realize theassets and settle the liabilities simultaneously, current tax assets and current tax liabilities are offset and presentedon a net basis.
When the Group has a legal right to settle current tax assets and liabilities on a net basis, and deferred tax assetsand deferred tax liabilities relate to income taxes levied by the same taxation authority on either the same taxableentity or different taxable entities which intend either to settle current tax assets and liabilities on a net basis or torealize the assets and liabilities simultaneously, in each future period in which significant amounts of deferred taxassets or liabilities are expected to be reversed, deferred tax assets and deferred tax liabilities are offset andpresented on a net basis.
42. Lease
(1)Accounting treatment for operating lease
Accounting treatment for operating lease
42.1.1 The rental fee paid for renting the properties by the company are amortized by the straight-line method andreckoned in the current expenses throughout the lease term without deducting rent-free period. The initial directcosts related to the lease transactions paid by the company are reckoned in the current expenses.
When the lessor undertakes the expenses related to the lease that should be undertaken by the company, thecompany shall deduct the expenses from the total rental costs, share by the deducted rental costs during the leaseterm, and reckon in the current expenses.
42.1.2 Rental obtained from assets leasing, during the whole leasing period without rent-free period excluded,shall be amortized by straight-line method and recognized as leasing revenue. The initial direct costs paid withleasing transaction concerned are reckoned into current expenditure; the amount is larger is capitalized whenincurred, and accounted for as profit or loss for the current period on the same basis as recognition of rentalincome over the entire lease period.
When the company undertakes the expenses related to the lease that should be undertaken by the lessor, thecompany shall deduct the expenses from the total rental income, and distribute by the deducted rental costs duringthe lease term.
(2)Accounting treatment for financing lease
42.2.1 Assets lease-in by financing: On the beginning date of the lease, the entry value of leased asset shall be atthe lower of the fair value of the leased asset and the present value of minimum lease payment at the beginningdate of the lease. Minimum lease payment shall be the entry value of long-term accounts payable, with differencerecognized as unrecognized financing expenses. Unrecognized financing expenses shall be reckoned in financialexpenses and amortized and using effective interest method during the leasing period. The initial direct expensesincurred by the Company are included in the value of the rented assets.
42.2.2 Finance leased assets: on the lease commencement date, the company affirms the balance among thefinance lease receivables, the sum of unguaranteed residual value and its present value as the unrealized financingincome, and recognizes it as the rental income during the period of receiving the rent. For the initial direct costsrelated to the rental transaction, the company reckons in the initial measurement of the finance lease receivables,and reduces the amount of income confirmed in the lease term.
43. Other important accounting policy and estimation
Safety production expensesThe safety production expenses drawn by the Company in accordance with the national regulations are included inthe cost of relevant products or the current profit and loss, and are recorded in the “special reserve” account. Whenusing the drawn safety production expenses, directly offset the special reserve if it belongs to the expenseexpenditure. For fixed assets, the expenses incurred through the collection of “under construction” subjects shall berecognized as fixed assets when the safety project is completed and ready for use. At the same time, the specialreserve shall be offset according to the cost of forming the fixed assets, and accumulated depreciation of the sameamount shall be recognized. The fixed assets will no longer be depreciated in the future.
44. Changes of important accounting policy and estimation
(1)Changes of major accounting policies
√Applicable □Not applicable
| Content & reasons | Approval procedure | Note |
| The Company, prepared the financial statement of 2019 in accordance with the Notice on Revision and Issuance of Consolidated Financial Statement Format (2019 version) (Cai Kuai [2019] No.16 from Ministry of Finance and requirement of Accounting Standards for Business Enterprises. This accounting policy change adopts the retroactive adjustment method. | Approved by the 6th session of 10th BOD dated 28 Oct. 2019 | Items and amounts of the financial statement of 2018 that are significantly affected found more in the No.44 carry in Note V. Important policy and important estimation of Section XII Financial Report in the Report. |
| The Company implemented the revised Accounting Standards for Business Enterprise No. 22- Recognition and Measurement of Financial Instruments, Accounting Standards for Business Enterprise No. 23- Transfer of Financial Assets, Accounting Standards for Business Enterprise No. 24- Hedge Accounting and Accounting Standards for Business Enterprise No. 37- Presentation of Financial Instruments, (hereinafter referred to as New Financial Instrument Standards) since 1 Jan. 2019. No adjustment is made to information in comparable periods in accordance with the linkage between the relevant old and new standards. The difference between the new standards and original standards on the first execution date shall be retroactively adjusted for retained earnings or other comprehensive earnings at the beginning of this reporting period. | Approved by the 3rd session of 10th BOD dated 25 April 2019 | On 1 Jan. 2019, the company compare the results of classification and measurement on financial assets and financial liability that under the new standards and original standards, adjustment on book value and loss reserves are shown in the following table. Main impact of the implementation of new financial instrument standards on financial statement as of 1 Jan. 2019 found more in the No.44 carry in Note V. Important policy and important estimation of Section XII Financial Report in the Report. |
| The Company implemented the revised Accounting Standards for Business Enterprise No.7- Non-monetary Assets Exchange and Accounting Standards for Business Enterprise No.12- Debt Restructuring since 1 Jan. 2019. According to the convergence provision of new and old standards, the Company shall adjusted the exchange of non-monetary assets and debt restructuring between 1 Jan. 2019 and the implementation date of the standards in accordance with the standards. The non-monetary assets exchange and debt restructuring occurred before 1 Jan. 2019, no need to adjusted retroactively. | Approved by the 7th session of 10th BOD dated 30 Dec. 2019 | Implementation of the new standards will not affect the financial status, operation results and cash flow of the Company. |
Base on the balance of year-end last year after adjustment in line with the Cai Kuai [2019] No.6 and Cai Kuai[2019] No.16, all financial assets and liabilities are classified and measured according to the provision of themeasurement standards for recognition of financial instrument before and after the revision. The comparison ofmeasurement results are as follow:
Consolidation
| Former financial instrument standard | New financial instrument standard | ||||
| Items | Measurement category | Book value | Items | Measurement category | Book value |
| Monetary funds | Amortized cost | 631,638,339.68 | Monetary funds | Amortized cost | 631,638,339.68 |
| Financial assets measured by fair value and with variation reckoned into current gains/losses | Measured by fair value and with variation reckoned into current gains/losses | 1,124,927.96 | Tradable financial assets | Measured by fair value and with variation reckoned into current gains/losses | 1,124,927.96 |
| Note receivable | Amortized cost | 1,027,635.04 | Note receivable | Amortized cost | 1,027,635.04 |
| Account receivable | Amortized cost | 473,646,886.64 | Account receivable | Amortized cost | 473,646,886.64 |
| Other account receivable | Amortized cost | 33,803,428.45 | Other account receivable | Amortized cost | 33,803,428.45 |
| Available-for-sale financial assets | Measured at cost | 57,500.00 | Other non-current financial assets | Financial assets measured by fair value and with variation reckoned into current gains/losses | 57,500.00 |
| Short-term borrowing | Amortized cost | 91,600,000.00 | Short-term borrowing | Amortized cost | 91,600,000.00 |
| Account payable | Amortized cost | 472,738,283.80 | Account payable | Amortized cost | 472,738,283.80 |
| Other account | Amortized cost | 280,689,548.29 | Other account | Amortized cost | 280,689,548.29 |
| payable | payable |
| Long-term borrowing | Amortized cost | 516,687,791.66 | Long-term borrowing | Amortized cost | 516,687,791.66 |
| Long-term account payable | Amortized cost | 15,690,202.08 | Long-term account payable | Amortized cost | 15,690,202.08 |
Parent company
| Former financial instrument standard | New financial instrument standard | ||||
| Items | Measurement category | Book value | Items | Measurement category | Book value |
| Monetary funds | Amortized cost | 168,900,586.84 | Monetary funds | Amortized cost | 168,900,586.84 |
| Financial assets measured by fair value and with variation reckoned into current gains/losses | Measured by fair value and with variation reckoned into current gains/losses | 1,124,927.96 | Tradable financial assets | Measured by fair value and with variation reckoned into current gains/losses | 1,124,927.96 |
| Account receivable | Amortized cost | 42,441,119.07 | Account receivable | Amortized cost | 42,441,119.07 |
| Other account receivable | Amortized cost | 159,677,969.59 | Other account receivable | Amortized cost | 159,677,969.59 |
| Account payable | Amortized cost | 73,705,646.54 | Account payable | Amortized cost | 73,705,646.54 |
| Other account payable | Amortized cost | 232,109,084.76 | Other account payable | Amortized cost | 232,109,084.76 |
(2) Changes of important accounting estimate
□ Applicable √Not applicable
(3)Adjustment on the relevant items of financial statement at beginning of the year when implemented thenew financial instrument standards, new revenue standards and new leasing standards since 2019
√ Applicable □Not applicable
Consolidate balance sheet
In RMB
| Item | 2018-12-31 | 2019-01-01 | Adjustments |
| Current assets: | |||
| Monetary funds | 631,638,339.68 | 631,638,339.68 | |
| Settlement provisions | |||
| Capital lent | |||
| Tradable financial assets | 1,124,927.96 | 1,124,927.96 | |
| Financial assets measured by fair value and with variation reckoned into current gains/losses | 1,124,927.96 | -1,124,927.96 | |
| Derivative financial assets | |||
| Note receivable | 1,027,635.04 | 1,027,635.04 | |
| Account receivable | 473,646,886.64 | 473,646,886.64 | |
| Account receivable financing | |||
| Accounts paid in advance | 83,696,870.07 | 83,696,870.07 | |
| Insurance receivable | |||
| Reinsurance receivables | |||
| Contract reserve of reinsurance receivable | |||
| Other account receivable | 33,803,428.45 | 33,803,428.45 | |
| Including: Interest receivable | 561,500.00 | 561,500.00 | |
| Dividend receivable | |||
| Buying back the sale of financial assets | |||
| Inventories | 2,811,802,600.19 | 2,811,802,600.19 | |
| Contractual asset |
| Assets held for sale | |||
| Non-current asset due within one year | |||
| Other current assets | 254,493,764.04 | 254,493,764.04 | |
| Total current assets | 4,291,234,452.07 | 4,291,234,452.07 | |
| Non-current assets: | |||
| Loans and payments on behalf | |||
| Creditors’ investment | |||
| Available-for-sale financial assets | 57,500.00 | -57,500.00 | |
| Other creditors’ investment | |||
| Held-to-maturity investment | |||
| Long-term account receivable | |||
| Long-term equity investment | 70,999,666.81 | 70,999,666.81 | |
| Other equity instrument investment | |||
| Other non-current financial assets | 57,500.00 | 57,500.00 | |
| Investment real estate | 282,622,184.92 | 282,622,184.92 | |
| Fixed assets | 993,136,743.51 | 993,136,743.51 | |
| Construction in progress | 186,586,135.06 | 186,586,135.06 | |
| Productive biological asset | 407,078.92 | 407,078.92 | |
| Oil and gas asset | |||
| Right-of-use asset | |||
| Intangible assets | 569,997,392.08 | 569,997,392.08 | |
| Expense on Research and Development | |||
| Goodwill | |||
| Long-term expenses to be apportioned | 21,799,899.80 | 21,799,899.80 |
| Deferred income tax assets | 50,174,590.98 | 50,174,590.98 | |
| Other non-current assets | 1,936,149.72 | 1,936,149.72 | |
| Total non-current assets | 2,177,717,341.80 | 2,177,717,341.80 | |
| Total assets | 6,468,951,793.87 | 6,468,951,793.87 | |
| Current liabilities: | |||
| Short-term borrowing | 91,600,000.00 | 91,600,000.00 | |
| Loan from central bank | |||
| Capital borrowed | |||
| Tradable financial liability | |||
| Financial liability measured by fair value and with variation reckoned into current gains/losses | |||
| Derivative financial liability | |||
| Note payable | |||
| Account payable | 472,738,283.80 | 472,738,283.80 | |
| Accounts received in advance | 205,428,594.16 | 205,428,594.16 | |
| Contractual liabilities | |||
| Selling financial asset of repurchase | |||
| Absorbing deposit and interbank deposit | |||
| Security trading of agency | |||
| Security sales of agency | |||
| Wage payable | 135,709,423.52 | 135,709,423.52 | |
| Taxes payable | 24,969,718.58 | 24,969,718.58 | |
| Other account payable | 280,689,548.29 | 280,689,548.29 | |
| Including: Interest payable | |||
| Dividend payable | 2,909,182.74 | 2,909,182.74 |
| Commission charge and commission payable | |||
| Reinsurance payable | |||
| Liability held for sale | |||
| Non-current liabilities due within one year | 55,090,793.79 | 55,090,793.79 | |
| Other current liabilities | 219,151,968.63 | 219,151,968.63 | |
| Total current liabilities | 1,485,378,330.77 | 1,485,378,330.77 | |
| Non-current liabilities: | |||
| Insurance contract reserve | |||
| Long-term borrowing | 516,687,791.66 | 516,687,791.66 | |
| Bonds payable | |||
| Including: preferred stock | |||
| Perpetual capital securities | |||
| Lease liability | |||
| Long-term account payable | 15,690,202.08 | 15,690,202.08 | |
| Long-term wage payable | |||
| Accrual liabilities | |||
| Deferred income | 100,608,203.01 | 100,608,203.01 | |
| Deferred income tax liabilities | 12,988,434.77 | 12,988,434.77 | |
| Other non-current liabilities | |||
| Total non-current liabilities | 645,974,631.52 | 645,974,631.52 | |
| Total liabilities | 2,131,352,962.29 | 2,131,352,962.29 | |
| Owners’ equity: | |||
| Share capital | 1,152,535,254.00 | 1,152,535,254.00 | |
| Other equity instrument | |||
| Including: preferred stock | |||
| Perpetual capital securities |
| Capital public reserve | 1,422,892,729.36 | 1,422,892,729.36 | |
| Less: Inventory shares | |||
| Other comprehensive income | |||
| Reasonable reserve | 154.21 | 154.21 | |
| Surplus public reserve | 327,140,910.28 | 327,140,910.28 | |
| Provision of general risk | |||
| Retained profit | 1,269,933,487.26 | 1,269,933,487.26 | |
| Total owner’s equity attributable to parent company | 4,172,502,535.11 | 4,172,502,535.11 | |
| Minority interests | 165,096,296.47 | 165,096,296.47 | |
| Total owner’s equity | 4,337,598,831.58 | 4,337,598,831.58 | |
| Total liabilities and owner’s equity | 6,468,951,793.87 | 6,468,951,793.87 |
Explanation on adjustmentNilBalance sheet of parent company
In RMB
| Item | 2018-12-31 | 2019-01-01 | Adjustments |
| Current assets: | |||
| Monetary funds | 168,900,586.84 | 168,900,586.84 | |
| Tradable financial assets | 1,124,927.96 | 1,124,927.96 | |
| Financial assets measured by fair value and with variation reckoned into current gains/losses | 1,124,927.96 | -1,124,927.96 | |
| Derivative financial assets | |||
| Note receivable | |||
| Account receivable | 42,441,119.07 | 42,441,119.07 | |
| Account receivable financing | |||
| Accounts paid in advance | |||
| Other account receivable | 159,677,969.59 | 159,677,969.59 |
| Including: Interest receivable | |||
| Dividend receivable | |||
| Inventories | 8,806,338.26 | ||
| Contractual asset | |||
| Assets held for sale | |||
| Non-current asset due within one year | |||
| Other current assets | 50,068,745.74 | 50,068,745.74 | |
| Total current assets | 431,019,687.46 | 431,019,687.46 | |
| Non-current assets: | |||
| Creditors’ investment | |||
| Available-for-sale financial assets | |||
| Other creditors’ investment | |||
| Held-to-maturity investment | |||
| Long-term account receivable | |||
| Long-term equity investment | 4,212,554,063.36 | 4,212,554,063.36 | |
| Other equity instrument investment | |||
| Other non-current financial assets | |||
| Investment real estate | 17,929,684.70 | 17,929,684.70 | |
| Fixed assets | 31,417,912.54 | 31,417,912.54 | |
| Construction in progress | |||
| Productive biological asset | 407,078.92 | 407,078.92 | |
| Oil and gas asset | |||
| Right-of-use asset | |||
| Intangible assets | 6,663,692.30 | 6,663,692.30 | |
| Expense on Research and Development |
| Goodwill | |||
| Long-term expenses to be apportioned | 409,621.50 | 409,621.50 | |
| Deferred income tax assets | 5,630,538.80 | 5,630,538.80 | |
| Other non-current assets | |||
| Total non-current assets | 4,275,012,592.12 | 4,275,012,592.12 | |
| Total assets | 4,706,032,279.58 | 4,706,032,279.58 | |
| Current liabilities: | |||
| Short-term borrowing | |||
| Tradable financial liability | |||
| Financial liability measured by fair value and with variation reckoned into current gains/losses | |||
| Derivative financial liability | |||
| Note payable | |||
| Account payable | 73,705,646.54 | 73,705,646.54 | |
| Accounts received in advance | 124,945.74 | 124,945.74 | |
| Contractual liabilities | |||
| Wage payable | 6,448,561.16 | 6,448,561.16 | |
| Taxes payable | 2,702,655.24 | 2,702,655.24 | |
| Other account payable | 232,109,084.76 | 232,109,084.76 | |
| Including: Interest payable | |||
| Dividend payable | |||
| Liability held for sale | |||
| Non-current liabilities due within one year | |||
| Other current liabilities | |||
| Total current liabilities | 315,090,893.44 | 315,090,893.44 | |
| Non-current liabilities: | |||
| Long-term borrowing |
| Bonds payable | |||
| Including: preferred stock | |||
| Perpetual capital securities | |||
| Lease liability | |||
| Long-term account payable | |||
| Long-term wage payable | |||
| Accrual liabilities | |||
| Deferred income | 46,129.96 | 46,129.96 | |
| Deferred income tax liabilities | 10,965.46 | 10,965.46 | |
| Other non-current liabilities | |||
| Total non-current liabilities | 57,095.42 | 57,095.42 | |
| Total liabilities | 315,147,988.86 | 315,147,988.86 | |
| Owners’ equity: | |||
| Share capital | 1,152,535,254.00 | 1,152,535,254.00 | |
| Other equity instrument | |||
| Including: preferred stock | |||
| Perpetual capital securities | |||
| Capital public reserve | 3,018,106,568.27 | 3,018,106,568.27 | |
| Less: Inventory shares | |||
| Other comprehensive income | |||
| Reasonable reserve | |||
| Surplus public reserve | 54,736,482.14 | 54,736,482.14 | |
| Retained profit | 165,505,986.31 | 165,505,986.31 | |
| Total owner’s equity | 4,390,884,290.72 | 4,390,884,290.72 | |
| Total liabilities and owner’s equity | 4,706,032,279.58 | 4,706,032,279.58 |
Explanation on adjustmentNil
(4) Retrospective adjustment of early comparison data description when implemented the new financialinstrument standards and new leasing standards since 2019
□ Applicable √Not applicable
45. Other
Nil
VI. Taxes
1. Type of tax and rate for main applicable tax
| Taxes | Basis | Rate |
| VAT | The output tax is calculated on the basis of the sales of goods and the taxable service income calculated according to the tax law. After deducting the input tax amount that is allowed to be deducted in the current period, the difference part is the value-added tax payable. | 16%, 13%, 10%, 9%, 6%, 5%, 3% |
| Urban maintenance and construction tax | Calculated according to the actual value-added tax and consumption tax | 7%, 5% |
| Enterprise income tax | Calculated according to taxable income | 25%, 15%, 0% |
| Educational surtax | Calculated according to the actual value-added tax and consumption tax | 3% |
| Local education surcharge | Calculated according to the actual value-added tax and consumption tax | 2% |
| Property tax | Price-based resource tax, 1.2 percent of the remaining value after deducting 20% of the original value of the property; 12 percent of the rental income if levy by rents. | 1.2%, 12% |
Rate of income tax for different taxpaying body:
| Taxpaying body | Rate of income tax |
| Shenzhen Cereals Holdings Co., Ltd. | 25% |
| Shenzhen Cereals Group Co., Ltd. (hereinafter referred to as "SZCG") | 25%, Some businesses are tax-free |
| Shenzhen Hualian Grain & Oil Trade Co., ltd. (hereinafter referred to as "Hualian Cereals and Oil") | 25% |
| Shenzhen Flour Co., Ltd. (hereinafter referred to as "Shenzhen Flour") | Tax-free |
| Shenliang Quality Inspection Co., Ltd. (hereinafter referred to as "Shenliang Quality Inspection ") | 25% |
| Hainan Haitian Aquatic Feed Co., Ltd. (hereinafter referred to as "Hainan Haitian") | 25% |
| Shenliang Doximi Business Co., Ltd. (hereinafter referred to as "Doximi") | 25% |
| Shenzhen Shenliang Big Kitchen Food Supply Chain Co., Ltd(hereinafter referred to as "Big Kitchen ") | 15% |
| Shenzhen Shenliang Storage (Yingkou) Co., Ltd. (hereinafter referred to as "Yingkou Storage") | 25% |
| Shenzhen Shenliang Cold Chain Logistics Co., Ltd. (hereinafter referred to as "Cold Chain Logistics") | 15% |
| Shenzhen Shenliang Real Estate Development Co., Ltd (hereinafter referred to as "Shenliang Real Estate ") | 25% |
| Shenzhen Shenliang Property Management Co., Ltd. (hereinafter referred to as "Shenliang Property") | 25% |
| Dongguan Shenliang Logistics Co., Ltd. (hereinafter referred to as "Dongguan Logistics") | 25% |
| Dongguan International Food Industrial Park Development Co., Ltd. (hereinafter referred to as "International Food") | 25% |
| Dongguan Shenliang Oil & Food Trade Co., Ltd. (hereinafter referred to as "Dongguan Oil & Food") | 25% |
| Dongguan Golden Biology Tech. Co., Ltd. (hereinafter referred to as Dongguan Golden) | 25% |
| Shuangyashan Shenliang Zhongxin Cereals Base Co., Ltd. (hereinafter referred to as "Shuangyashan") | 25% |
| Heilongjiang Hongxinglong Nongken Shenxin Cereals Industrial Park Co., ltd. (hereinafter referred to as " Hongxinglong") | 25% |
| Shenzhen Shenbao Huacheng Science and Technology Co.,Ltd (hereinafter referred to as "Shenbao Huacheng") | 15% |
| Shantou Branch of Shenzhen Shenbao Huacheng Science and Technology Co.,Ltd (hereinafter referred to as "Shantou Branch") | 25% |
| Wuyuan Ju Fang Yong Tea Industry Co., Ltd.(hereinafter referred to as "Wuyuan Ju Fang Yong") | 15% |
| Shenzhen Shenshenbao Investment Co., Ltd. (hereinafter referred to as "Shenbao Investment") | 25% |
| Shenzhen Shenshenbao Tea Culture Commercial Management Co., Ltd. (hereinafter referred to as "Shenbao Tea Culture") | 25% |
| Hangzhou Ju Fang Yong Holding Co., Ltd (hereinafter referred to as "Ju Fang Yong Holding ") | 25% |
| Hangzhou Ju Fang Yong Trading Co., Ltd. (hereinafter referred to as "Ju Fang Yong Trading ") | 25% |
| Hangzhou Chunshi Network Technology Co., Ltd. (hereinafter referred to as "Chunshi Network") | 25% |
| Hangzhou Fuhaitang Catering Management Chain Co., Ltd. (hereinafter referred to as "Fuhaitang Catering") | 25% |
| Shenzhen Shenbao Tea-Shop Co., Ltd (hereinafter referred to as "Shenbao Tea-Shop") | 25% |
| Hangzhou Fuhaitang Tea Ecological Technology Co., Ltd. (hereinafter referred to as "Fuhaitang Ecological") | 25% |
| Mount Wuyi Shenbao Rock Tea Co., Ltd. (hereinafter referred to as "Shenbao Rock Tea") | 25% |
| Yunnan Shenbao Pu’er Tea Supply Chain Management Co., Ltd. (hereinafter referred to as "Pu’er Tea Supply Chain") | 25% |
| Shenzhen Shenbao Sanjing Food Beverage Development Co., Ltd. (hereinafter referred to as "Shenbao Sanjing") | 25% |
| Yunnan Pu’er Tea Trading Center Co., Ltd. (hereinafter referred to as "Pu’er Tea Trading Center") | 25% |
| Dongguan Golden Biology Tech. Co., Ltd. (hereinafter referred to as Dongguan Golden) | 25% |
| Huizhou Shenbao Technology Co., Ltd. (hereinafter referred to as "Huizhou Shenbao") | 25% |
| Shenzhen Shenbao Property Management Co., Ltd. (hereinafter referred to as "Shenbao Property") | 25% |
| Shenzhen Shenbao Technology Center Co., Ltd. (hereinafter referred to as "Shenbao Technology") | 25% |
| Shenzhen Shenbao Industrial & Trading Co., Ltd(hereinafter referred to as "Shenbao Industry and Trade") | 25% |
2. Tax preferential
(1) VAT discounts and approval
According to the “Notice of the Ministry of Finance and the State Administration of Taxation on the IssuesConcerning the VAT Collection and Exemption of Grain Enterprises (CSZ [1999] No. 198)” and “Shenzhen TaxService, State Taxation Administration and Shenzhen Finance Bureau SGSF (SCF [1999] No.428)”, confirmingthat SZCG, the Company’s subsidiary, and its subsidiaries, are state-owned grain purchase and sale enterprisesthat undertake grain collection and storage tasks for Shenzhen, the grain sold is subject to tax-free declaration by
rule and enjoys the exemption from VAT. In addition, according to the stipulation of the “Announcement of StateAdministration of Taxation on Relevant Management Matters After Clarifying the Cancellation of the Approval ofSome VAT Preferential Policies” (SAT Announcement 2015 No. 38), the approval for exemption from VAT andthe involved tax review and approval procedures for the state-owned grain enterprises that undertake graincollection and storage tasks, other grain enterprises that operate tax-free projects and enterprises that have ediblevegetable oil sales business for government reserves are cancelled and changed to record management. Thetaxpayer does not change the content of the record materials during the period of tax exemption can be put on aone-time record. In December 2013, SZCG obtained the notice of the VAT preferential record (SGSFJBM [2013]No.2956) from Shenzhen Futian State Administration of Taxation. In the case of no change in policy, this limitedfiling period started on January 1
st, 2014.The VAT input tax amount of the preferential item was separatelyaccounted for, and the input VAT calculation method cannot be changed within 36 months after the selection. Asof December 31, 2018, the tax exemption policy has been in effect since its filing in 2014, and the company’s VATinput tax has not changed since it was accounted for separately in 2014, so the company continues to enjoy the taxpreference.
(2) Stamp duty, house property tax, and urban land use tax preferences
According to the stipulations of “Notice of the Ministry of Finance and the State Administration of Taxation onthe Relevant Tax Policies Concerning Some National Reserved Commodities (CS [2019] No. 77)”, anddocuments of Guangdong Province Department of Finance, Guangdong Provincial Taxation Bureau of the StateAdministration of Taxation and Guangdong Provincial Food and Material Reserve Bureau (Yue Cai Shui[2020]No.2, confirming that the fund account book of SZCG, the Company’s subsidiary, and its direct depots isexempt from stamp duty, confirming that the written purchase and sale contracts of SZCG in the process ofundertaking the commodity reserve business are exempt from stamp duty, and confirming that SZCG’s houseproperty and land used for the commodity reserve business are exempt from house property tax and urban landuse tax. The execution time limit for this tax preference policy is up to December 31, 2021.
(3) Enterprise income tax
2.3.1 Shenbao Huacheng, a subsidiary of the Company, obtained the “High-tech Enterprise Certificate”(Certificate number is GR201744203462) jointly issued by Shenzhen Science and Technology InnovationCommittee, Shenzhen Financial Committee, Shenzhen Tax Service, State Taxation Administration and ShenzhenLocal Taxation Bureau on October 31, 2017, which is valid for three years. According to the relevant preferentialpolicies of the state for high-tech enterprises, the qualified high-tech enterprises shall pay the corporate incometax at a reduced income tax rate of 15% within three years from the year of the determination, and ShenbaoHuacheng enjoys the tax preferential policy from 2017 to 2019.
2.3.2 The Company’s subsidiary, Wuyuan Jufangyong, obtained the “High-tech Enterprise Certificate” (Certificatenumber is GR201836000703) jointly issued by the Science and Technology Department of Jiangxi Province, theFinance Department of Jiangxi Province, and Jiangxi Provincial Tax Service, State Taxation Administration onAugust 13, 2018, which is valid for three years. According to the relevant preferential policies of the state for
high-tech enterprises, the qualified high-tech enterprises shall pay the corporate income tax at a reduced incometax rate of 15% within three years from the year of the determination, and Wuyuan Jufangyong enjoys the taxpreferential policy from 2018 to 2020.
2.3.3 According to the “Notice on the Issues Concerning the Treatment of Corporate Income Taxes for FiscalFunds of Special Purposes of the Ministry of Finance and the State Administration of Taxation (CS [2009] No. 87),the government service income obtained by SZCG, the Company’s subsidiary, and its subsidiaries from thegovernment’s grain reserve business is a special-purpose fiscal fund, which can be used as non-taxable income ifeligible and is deducted from the total income when calculating the taxable income. The expenses arising from theabove-mentioned non-taxable income for expenditure shall not be deducted when calculating the taxable income;the calculated depreciation and amortization of the assets formed by non-taxable income for expenditure shall notbe deducted when calculating the taxable income.
2.3.4 Shenzhen Flour, a subsidiary of the Company, is a flour primary processing enterprise, according to thestipulations of the “Notice on Issuing the Scope (Trial) of Primary Processing of Agricultural Products Applicableto the Corporate Income Tax Preferential Policy (CS [2008] No. 149)” and the “Supplementary Notice on theScope of Primary Processing of Agricultural Products Applicable to the Corporate Income Tax Preferential Policyof the Ministry of Finance and the State Administration of Taxation” (CS [2011] No. 26), the wheat primaryprocessing is exempt from income tax.
2.3.5 According to the Article one of the “Notice of the Ministry of Finance and the State Administration ofTaxation on the Corporate Income Tax Preferential Policies and Preferential Catalogue for Guangdong HengqinNew District, Fujian Pingtan Comprehensive Experimental Zone, and Shenzhen Qianhai Shenzhen-Hong KongModern Service Industry Cooperation Zone” (CS [2014] No.26), levy the corporate income tax at a reducedincome tax rate of 15% for the encouraged industrial enterprises located in Hengqin New District, PingtanComprehensive Experimental Zone and Qianhai Shenzhen-Hong Kong Modern Service Industry CooperationZone. The Company’s subsidiaries, Shenliang Cold-Chain Logistic and Shenliang Big Kitchen, are registered inShenzhen Qianhai Cooperation Zone and meet the preferential tax conditions, according to the relevant policies inthe Cooperation Zone, their income tax enjoys a tax preference of 15%, and this preferential tax policy shall be upto 2020.
3. Other
NilVII. Annotation to main items of consolidated financial statements
1. Monetary funds
In RMB
| Item | Ending balance | Opening balance |
| Cash on hand | 191,650.33 | 282,322.45 |
| Cash in bank | 154,658,586.69 | 631,190,032.12 |
| Other monetary fund | 104,520.83 | 165,985.11 |
| Total | 154,954,757.85 | 631,638,339.68 |
Other explanationThe Company did not has account pledge, freeze or has potential risks in collection ended as 31 December 2019.
2. Tradable financial assets
In RMB
| Item | Ending balance | Opening balance |
| Financial assets measured by fair value and with variation reckoned into current gains/losses | 1,166,209.72 | 1,124,927.96 |
| Including: | ||
| Equity investment instrument | 1,166,209.72 | 1,124,927.96 |
| Including: | ||
| Total | 1,166,209.72 | 1,124,927.96 |
Other explanation:
Ending balance refers to the 258,011 shares of A-stock under the name of “Zhonghua-A”
3. Derivative financial assets
In RMB
| Item | Ending balance | Opening balance |
Other explanation:
4. Note receivable
(1) Category
In RMB
| Item | Ending balance | Opening balance |
| Bank acceptance bill | 1,909,720.38 | 1,027,635.04 |
| Total | 1,909,720.38 | 1,027,635.04 |
In RMB
| Category | Ending balance | Opening balance | ||||
| Book balance | Bad debt provision | Book | Book balance | Bad debt provision | Book | |
| Amount | Ratio | Amount | Accrual ratio | value | Amount | Ratio | Amount | Accrual ratio | value | |
| Including: | ||||||||||
| Including: |
Bad debt provision accrual on single basis:
In RMB
| Name | Ending balance | |||
| Book balance | Bad debt provision | Accrual ratio | Accrual causes | |
Bad debt provision accrual on portfolio:
In RMB
| Name | Ending balance | ||
| Book balance | Bad debt provision | Accrual ratio | |
Explanation on portfolio determines:
If the provision for bad debts of note receivable is made in accordance with the general model of expected credit losses, please refer tothe disclosure of other account receivables to disclose related information about bad-debt provisions:
□ Applicable √Not applicable
(2) Bad debt provision accrual, collected or reversal in the period
Bad debt provision accrual in the period:
In RMB
| Category | Opening balance | Amount changed in the period | Ending balance | |||
| Accrual | Collected or reversal | Written-off | Other | |||
Including major amount bad debt provision that collected or reversal in the period:
□ Applicable √Not applicable
(3) Note receivable that pledged at period-end
In RMB
| Item | Amount pledged at period-end |
(4) Notes endorsement or discount and undue on balance sheet date
In RMB
| Item | Amount derecognition at period-end | Amount not derecognition at period-end |
(5) Notes transfer to account receivable due for failure implementation by drawer at period-end
In RMB
| Item | Amount transfer to account receivable at period-end |
Other explanation
(6) Note receivable actually written-off in the period
In RMB
| Item | Amount written-off |
Including important note receivable that written-off:
In RMB
| Enterprise | Nature | Amount written-off | Written-off causes | Procedure of written-off | Resulted by related transaction (Y/N) |
Explanation on note receivable written-off
5. Account receivable
(1) Category
In RMB
| Category | Ending balance | Opening balance | ||||||||
| Book balance | Bad debt provision | Book value | Book balance | Bad debt provision | Book value | |||||
| Amount | Ratio | Amount | Accrual ratio | Amount | Ratio | Amount | Accrual ratio | |||
| Account receivable with bad debt provision accrual on a single basis | 103,361,342.42 | 23.40% | 99,663,780.43 | 96.42% | 3,697,561.99 | 100,920,879.06 | 17.40% | 99,166,948.60 | 98.26% | 1,753,930.46 |
| Including: | ||||||||||
| Account receivable with single significant amount and withdrawal bad debt provision on single basis | 10,455,627.54 | 2.37% | 10,455,627.54 | 100.00% | 10,455,627.54 | 1.80% | 10,455,627.54 | 100.00% | ||
| Account receivable with single minor amount but with bad debts provision accrued on a single basis | 92,905,714.88 | 21.04% | 89,208,152.89 | 96.02% | 3,697,561.99 | 90,465,251.52 | 15.60% | 88,711,321.06 | 98.06% | 1,753,930.46 |
| Account receivable with bad debt provision accrual on portfolio | 338,299,930.10 | 76.59% | 3,309,725.41 | 0.98% | 334,990,204.69 | 479,058,935.68 | 82.60% | 7,165,979.50 | 1.50% | 471,892,956.18 |
| Including: | ||||||||||
| Specific object combinations | 183,644,354.88 | 41.58% | 183,644,354.88 | 37,904,559.66 | 6.54% | 37,904,559.66 | ||||
| Accounts receivable with provision for bad debts by aging analysis | 154,655,575.22 | 35.02% | 3,309,725.41 | 2.14% | 151,345,849.81 | 441,154,376.02 | 76.06% | 7,165,979.50 | 1.62% | 433,988,396.52 |
| Total | 441,661,272.52 | 100.00% | 102,973,505.84 | 23.32% | 338,687,766.68 | 579,979,814.74 | 100.00% | 106,332,928.10 | 18.33% | 473,646,886.64 |
Bad debt provision accrual on single basis: 99,663,780.43 Yuan
In RMB
| Name | Ending balance | |||
| Book balance | Bad debt provision | Accrual ratio | Accrual causes | |
| Account receivable with single significant amount and withdrawal bad debt provision on single basis | ||||
| Guangzhou Jinhe Feed Co., Ltd | 10,455,627.54 | 10,455,627.54 | 100.00% | Slightly possibly taken back |
| Account receivable with single minor amount but with bad debts provision accrued on a single basis at period-end | ||||
| Shenzhen Faqun Industry Co., Ltd. | 4,582,156.00 | 4,582,156.00 | 100.00% | Slightly possibly taken back |
| Li Shaoyu owes for goods | 2,929,128.53 | 2,929,128.53 | 100.00% | Slightly possibly taken back |
| Zhuhai Doumen Huabi Feed Co., Ltd. | 2,396,327.14 | 2,396,327.14 | 100.00% | Slightly possibly taken back |
| Chongqing Zhongxing Food Industry Co., Ltd. | 2,354,783.30 | 2,354,783.30 | 100.00% | Slightly possibly taken back |
| Hengyang Feed factory | 1,907,679.95 | 1,907,679.95 | 100.00% | Slightly possibly taken back |
| Beijing Zhongwang Food Co., Ltd. | 1,873,886.58 | 1,873,886.58 | 100.00% | Slightly possibly taken back |
| Other single provision | 76,861,753.38 | 73,164,191.39 | 95.19% | Slightly possibly taken back |
| Total | 103,361,342.42 | 99,663,780.43 | -- | -- |
Bad debt provision accrual on single basis:
In RMB
| Name | Ending balance | |||
| Book balance | Bad debt provision | Accrual ratio | Accrual causes | |
Bad debt provision accrual on portfolio: 3,309,725.41Yuan
In RMB
| Name | Ending balance | ||
| Book balance | Bad debt provision | Accrual ratio | |
| Specific object combinations | 183,644,354.88 | 0.00 | 0.00% |
| Accounts receivable with provision for bad debts by aging analysis | |||
| Within one year (including 1-year) | 148,667,936.00 | 1,486,635.30 | 1.00% |
| 1-2 years (including 2-year) | 3,017,685.20 | 301,768.53 | 10.00% |
| 2-3 years (including 3-year) | 1,003,279.60 | 300,983.87 | 30.00% |
| 3-4 years (including 4-year) | 119,702.53 | 59,851.27 | 50.00% |
| 4-5 years (including 5-year) | 1,056,970.31 | 528,485.17 | 50.00% |
| Over 5 years | 790,001.58 | 632,001.27 | 80.00% |
| Total | 338,299,930.10 | 3,309,725.41 | -- |
Explanation on portfolio determines:
Among them, the portfolio of specific objects mainly includes receivables from the government, reserve funds etc., no bad debtprovision accrual.
| Item | Ending balance |
| Receivables from the government | 183,468,687.97 |
| Other | 175,666.91 |
| Total | 183,644,354.88 |
Bad debt provision accrual on portfolio:
In RMB
| Name | Ending balance | ||
| Book balance | Bad debt provision | Accrual ratio | |
Explanation on portfolio determines:
If the provision for bad debts of account receivable is made in accordance with the general model of expected credit losses, please referto the disclosure of other account receivables to disclose related information about bad-debt provisions:
□ Applicable √Not applicable
By account age
In RMB
| Account age | Ending balance |
| Within one year (including 1-year) | 335,504,294.84 |
| 1-2 years | 3,017,685.20 |
| 2-3 years | 1,003,279.60 |
| Over 3 years | 102,136,012.88 |
| 3-4 years | 5,080,613.43 |
| 4-5 years | 1,056,970.31 |
| Over 5 years | 95,998,429.14 |
| Total | 441,661,272.52 |
(2) Bad debt provision accrual, collected or reversal in the period
Bad debt provision accrual in the period:
In RMB
| Category | Opening balance | Amount changed in the period | Ending balance | |||
| Accrual | Collected or reversal | Written-off | Other | |||
| Accrued by combination | 7,165,979.50 | -3,856,254.09 | 3,309,725.41 | |||
| Accrued by single item | 99,166,948.60 | 1,519,331.83 | 1,022,500.00 | 99,663,780.43 | ||
| Total | 106,332,928.10 | -2,336,922.26 | 1,022,500.00 | 102,973,505.84 | ||
Including major amount bad debt provision that collected or reversal in the period:
In RMB
| Enterprise | Amount collected or reversal | Collection way |
(3) Account receivable actually written-off in the period
In RMB
| Item | Amount written-off |
Including major account receivable written-off:
In RMB
| Enterprise | Nature | Amount written-off | Written-off causes | Procedure of written-off | Resulted by related transaction (Y/N) |
Explanation on account receivable written-off:
(4) Top 5 account receivables at ending balance by arrears party
In RMB
| Enterprise | Ending balance of accounts receivable | Proportion in total receivables at ending balance (%) | Bad debt preparation ending balance |
| First | 183,468,687.97 | 41.54% | |
| Second | 12,603,084.40 | 2.85% | 126,030.84 |
| Third | 10,455,627.54 | 2.37% | 10,455,627.54 |
| Fourth | 8,499,584.61 | 1.92% | 84,995.85 |
| Fifth | 6,277,099.91 | 1.42% | 62,771.00 |
| Total | 221,304,084.43 | 50.10% |
(5) Account receivable derecognition due to financial assets transfer
(6) Assets and liabilities resulted by account receivable transfer and continues involvementOther explanation:
6. Account receivable financing
In RMB
| Item | Ending balance | Opening balance |
Changes of account receivable financing and change of fair value in the period
□ Applicable √Not applicable
If the impairment provision of account receivable financing is made in accordance with the general model of expected credit losses,please refer to the disclosure of other account receivables to disclose related information about impairment provision:
□ Applicable √Not applicable
Other explanation:
7. Accounts paid in advance
(1) By account age
In RMB
| Account age | Ending balance | Opening balance | ||
| Amount | Ratio | Amount | Ratio | |
| Within one year | 8,782,989.64 | 95.44% | 83,282,051.24 | 99.51% |
| 1-2 years | 200,837.84 | 2.18% | 70,556.78 | 0.08% |
| 2-3 years | 59,439.42 | 0.65% | 7,670.34 | 0.01% |
| Over 3 years | 159,663.81 | 1.73% | 336,591.71 | 0.40% |
| Total | 9,202,930.71 | -- | 83,696,870.07 | -- |
Explanation on reasons of failure to settle on important account paid in advance with age over one year:
Nil
(2) Top 5 account paid in advance at ending balance by prepayment object
| Prepaid objects | Ending balance | Proportion in of total prepayment balance at the end of period (%) |
| First | 2,880,587.99 | 31.30 |
| Second | 1,245,331.18 | 13.53 |
| Three | 1,239,774.81 | 13.47 |
| Fourth | 477,247.77 | 5.19 |
| Fifth | 394,512.47 | 4.29 |
| Total | 6,237,454.22 | 67.78 |
Other explanation:
Nil
8. Other account receivable
In RMB
| Item | Ending balance | Opening balance |
| Interest receivable | 561,500.00 | |
| Other account receivable | 25,758,695.07 | 33,241,928.45 |
| Total | 25,758,695.07 | 33,803,428.45 |
(1) Interest receivable
1) Category
In RMB
| Item | Ending balance | Opening balance |
| Time deposit interest | 561,500.00 | |
| Total | 561,500.00 |
2) Significant overdue interest
In RMB
| Borrower | Ending balance | Overdue time | Overdue causes | Whether impairment occurs and its judgment basis |
Other explanation:
3) Accrual of bad debt provision
□ Applicable √Not applicable
(2) Dividend receivable
1) Category
In RMB
| Item (or invested enterprise) | Ending balance | Opening balance |
2) Important dividend receivable with account age over one year
In RMB
| Item (or invested enterprise) | Ending balance | Account age | Reasons for not collection | Whether impairment occurs and its judgment basis |
3) Accrual of bad debt provision
□ Applicable √Not applicable
Other explanation:
(3) Other account receivable
1) By nature
In RMB
| Nature | Ending book balance | Opening book balance |
| Margin and deposit | 13,760,145.15 | 11,160,677.29 |
| Export tax rebate | 312,364.06 | |
| Other intercourse funds | 109,796,076.74 | 119,759,129.21 |
| Total | 123,556,221.89 | 131,232,170.56 |
2) Accrual of bad debt provision
In RMB
| Bad debt provision | Phase I | Phase II | Phase III | Total |
| Expected credit losses over next 12 months | Expected credit losses for the entire duration (without credit impairment occurred) | Expected credit losses for the entire duration (with credit impairment occurred) | ||
| Balance on Jan. 1, 2019 | 7,391,712.89 | 90,598,529.22 | 97,990,242.11 | |
| Balance of Jan. 1, 2019 in the period | —— | —— | —— | —— |
| -- transfer in phase II | ||||
| -- transfer in phase III | -289,631.69 | 289,631.69 | ||
| Current accrual | -4,050,421.82 | 3,913,087.71 | -137,334.11 | |
| Current written off | -55,259.09 | -55,259.09 | ||
| Other change | -122.09 | -122.09 | ||
| Balance on Dec. 31, 2019 | 2,996,278.20 | 94,801,248.62 | 97,797,526.82 |
Change of book balance of loss provision with amount has major changes in the period
□ Applicable √Not applicable
By account age
In RMB
| Account age | Ending balance |
| Within one year (including 1-year) | 16,556,584.38 |
| 1-2 years | 2,851,904.20 |
| 2-3 years | 4,495,399.87 |
| Over 3 years | 99,652,333.44 |
| 3-4 years | 5,187,087.83 |
| 4-5 years | 1,055,134.92 |
| Over 5 years | 93,410,110.69 |
| Total | 123,556,221.89 |
3) Bad debt provision accrual, collected or reversal in the period
Bad debt provision accrual in the period:
In RMB
| Category | Opening balance | Amount changed in the period | Ending balance | |||
| Accrual | Collected or reversal | Written off | Other | |||
| Combined accrual | 7,391,712.89 | -4,340,053.51 | -55,259.09 | -122.09 | 2,996,278.20 | |
| Single accrual | 90,598,529.22 | 4,202,719.40 | 94,801,248.62 | |||
| Total | 97,990,242.11 | -137,334.11 | -55,259.09 | -122.09 | 97,797,526.82 | |
Including major amount with bad debt provision reverse or collected in the period:
In RMB
| Enterprise | Amount reversal or collected | Collection way |
4) Other account receivable actually written-off in the period
In RMB
| Item | Amount written-off |
| Other account receivable actually written-off | 53,640.19 |
Including important other account receivable written-off:
In RMB
| Enterprise | Nature | Amount written-off | Written-off causes | Procedure of written-off | Resulted by related transaction (Y/N) |
Explanation on other account receivable written-off:
5) Top 5 other receivables at ending balance by arrears party
In RMB
| Enterprise | Nature | Ending balance | Account age | Ratio in total ending balance of other account receivables | Ending balance of bad debt reserve |
| First | Intercourse funds | 24,350,611.65 | Within one year to over 5 years | 19.71% | 21,803,513.37 |
| Second | Intercourse funds | 8,326,202.63 | Over 5 years | 6.74% | 8,326,202.63 |
| Three | Intercourse funds | 8,285,803.57 | Over 5 years | 6.71% | 8,285,803.57 |
| Fourth | Intercourse funds | 5,677,473.59 | Over 5 years | 4.60% | 5,677,473.59 |
| Fifth | Intercourse funds | 5,602,468.81 | Over 5 years | 4.53% | 5,602,468.81 |
| Total | -- | 52,242,560.25 | -- | 42.29% | 49,695,461.97 |
6) Other account receivables related to government grants
In RMB
| Enterprise | Government grants | Ending balance | Ending account age | Time, amount and basis for collection predicted |
7) Other receivable for termination of confirmation due to the transfer of financial assets
8) The amount of assets and liabilities that are transferred other receivable and continued to be involved
Other explanation:
9. Inventories
Whether implemented the new revenue standards
□Yes √No
(1) Category
In RMB
| Item | Ending balance | Opening balance | ||||
| Book balance | Falling price reserves | Book value | Book balance | Falling price reserves | Book value | |
| Raw materials | 56,703,874.41 | 19,314,135.53 | 37,389,738.88 | 63,928,125.50 | 19,906,198.09 | 44,021,927.41 |
| Goods in process | 20,109,513.82 | 282,586.46 | 19,826,927.36 | 23,840,568.24 | 68,371.10 | 23,772,197.14 |
| Finished goods | 3,095,488,288.29 | 101,687,483.68 | 2,993,800,804.61 | 2,827,653,415.87 | 101,081,767.83 | 2,726,571,648.04 |
| Revolving material | 9,029,409.09 | 952,393.40 | 8,077,015.69 | 10,843,165.99 | 941,939.14 | 9,901,226.85 |
| Goods in transit | 5,475,435.17 | 5,475,435.17 | 7,410,407.72 | 7,410,407.72 | ||
| Work in process-outsourced | 5,421,792.75 | 5,290,502.32 | 131,290.43 | 5,415,695.35 | 5,290,502.32 | 125,193.03 |
| Total | 3,192,228,313.53 | 127,527,101.39 | 3,064,701,212.14 | 2,939,091,378.67 | 127,288,778.48 | 2,811,802,600.19 |
(2) Falling price reserves of inventories
In RMB
| Item | Opening balance | Current amount increased | Current amount decreased | Ending balance | ||
| Accrual | Other | Reversal or write-off | Other | |||
| Raw materials | 19,906,198.09 | 248,900.65 | 840,963.21 | 19,314,135.53 | ||
| Goods in process | 68,371.10 | 214,215.36 | 282,586.46 | |||
| Finished goods | 101,081,767.83 | 157,798,003.60 | 157,192,287.75 | 101,687,483.68 | ||
| Revolving material | 941,939.14 | 11,870.76 | 1,416.50 | 952,393.40 | ||
| Work in process-outsourced | 5,290,502.32 | 5,290,502.32 | ||||
| Total | 127,288,778.48 | 158,272,990.37 | 158,034,667.46 | 127,527,101.39 | ||
(3) Explanation on inventories with capitalization of borrowing costs included at ending balance
(4) Assets unsettled formed by construction contract which has completed at period-end
In RMB
| Item | Amount |
Other explanation:
10. Contract assets
In RMB
| Item | Ending balance | Opening balance | ||||
| Book balance | Impairment provision | Book value | Book balance | Impairment provision | Book value | |
Amount and reasons for the major changes of book value of contract assets in the period:
In RMB
| Item | Amount changed | Cause of change |
If the bad debt provision of accrual contract is made in accordance with the general model of expected credit losses, please refer to thedisclosure of other account receivables to disclose related information about bad debt provision:
□ Applicable √Not applicable
Impairment provision of contract assets in the period
In RMB
| Item | Current accrual | Current reversal | Charge off/Written-off | Causes |
Other explanation:
11. Assets held for sale
In RMB
| Item | Ending book balance | Impairment provision | Ending book value | Fair value | Estimated disposal cost | Estimated disposal time |
Other explanation:
12. Non-current asset due within one year
In RMB
| Item | Ending balance | Opening balance |
Important creditors’ investment/ other creditors’ investment
In RMB
| Item | Ending balance | Opening balance | ||||||
| Face value | Coupon rate | Actual rate | Maturity date | Face value | Coupon rate | Actual rate | Maturity date | |
Other explanation:
13. Other current assets
Whether implemented the new revenue standards
□Yes √No
In RMB
| Item | Ending balance | Opening balance |
| Input tax to be deducted | 83,157,841.68 | 88,918,809.39 |
| Prepaid income tax | 15,985.35 | 394,677.16 |
| Financial products held to maturity within one year | 385,000,000.00 | 160,000,000.00 |
| Other | 553.37 | 5,180,277.49 |
| Total | 468,174,380.40 | 254,493,764.04 |
Other explanation:
14. Creditors’ investment
In RMB
| Item | Ending balance | Opening balance |
| Book balance | Impairment provision | Book value | Book balance | Impairment provision | Book value |
Important creditors’ investment
In RMB
| Item | Ending balance | Opening balance | ||||||
| Face value | Coupon rate | Actual rate | Maturity date | Face value | Coupon rate | Actual rate | Maturity date | |
Accrual of impairment provision
In RMB
| Bad debt provision | Phase I | Phase II | Phase III | Total |
| Expected credit losses over next 12 months | Expected credit losses for the entire duration (without credit impairment occurred) | Expected credit losses for the entire duration (with credit impairment occurred) | ||
| Balance of Jan. 1, 2019 in the period | —— | —— | —— | —— |
Change of book balance of loss provision with amount has major changes in the period
□ Applicable √Not applicable
Other explanation:
15. Other creditors’ investment
In RMB
| Item | Opening balance | Accrual interest | Change of fair value in the period | Ending balance | Cost | Accumulated change of fair value | Loss impairment accumulated recognized in other comprehensive income | Note |
Important other creditors’ investment
In RMB
| Other creditor item | Ending balance | Opening balance | ||||||
| Face value | Coupon rate | Actual rate | Maturity date | Face value | Coupon rate | Actual rate | Maturity date | |
Accrual of impairment provision
In RMB
| Bad debt provision | Phase I | Phase II | Phase III | Total |
| Expected credit losses over next 12 months | Expected credit losses for the entire duration (without credit impairment occurred) | Expected credit losses for the entire duration (with credit impairment occurred) | ||
| Balance of Jan. 1, 2019 in the period | —— | —— | —— | —— |
Change of book balance of loss provision with amount has major changes in the period
□ Applicable √Not applicable
Other explanation:
16. Long-term account receivable
(1) Long-term account receivable
In RMB
| Item | Ending balance | Opening balance | Discount rate interval | ||||
| Book balance | Bad debt provision | Book value | Book balance | Bad debt provision | Book value | ||
Impairment of bad debt provision
In RMB
| Bad debt provision | Phase I | Phase II | Phase III | Total |
| Expected credit losses over next 12 months | Expected credit losses for the entire duration (without credit impairment occurred) | Expected credit losses for the entire duration (with credit impairment occurred) | ||
| Balance of Jan. 1, 2019 in the period | —— | —— | —— | —— |
Change of book balance of loss provision with amount has major changes in the period
□ Applicable √Not applicable
(2) Long-term account receivable derecognition due to financial assets transfer
(3) Assets and liabilities resulted by long-term account receivable transfer and continues involvement
Other explanation
17. Long-term equity investment
In RMB
| The | Opening | Current changes (+,-) | Ending | Ending |
| invested entity | balance (book value) | Additional investment | Capital reduction | Investment gains recognized under equity | Other comprehensive income adjustment | Other equity change | Cash dividend or profit announced to issued | Accrual of impairment provision | Other | balance (book value) | balance of impairment provision |
| I. Joint venture | |||||||||||
| II. Associated enterprise | |||||||||||
| Shenzhen Shenbao (Xinmin) Foods Co., Ltd*1 | 2,870,000.00 | ||||||||||
| Changzhou Shenbao Chacang E-business Co., ltd.*2 | |||||||||||
| Shenzhen Shenbao (Liaoyuan) Industrial Co., Ltd*1 | 57,628.53 | ||||||||||
| Huizhou Shenbao Manan Bio-technology Co., Ltd. | 1,050,116.57 | 1,050,116.57 | |||||||||
| Shenzhen Shichumingmen Restaurant Management Co., Ltd.*2 | |||||||||||
| Guangzhou Shenbao Mendao Tea Co., Ltd. | 3,825,725.70 | -1,614,296.02 | 2,211,429.68 | ||||||||
| Zhuhai Hengxing Feed Industrial Co., Ltd. | 29,510,771.11 | 2,125,936.11 | 31,636,707.22 | ||||||||
| Shenzhen Duoxi Equity Investment Fund Management Co., Ltd. | 4,014,625.45 | -311,020.65 | 3,703,604.80 | ||||||||
| Shenliang Intelligent Wulian Equity Investment Fund (Shenzhen) Partnership Enterprise (Limited) | 23,105,662.49 | 2,828,260.86 | 25,933,923.35 | ||||||||
| Shenzhen Shenyuan Data Tech. Co., Ltd | 9,492,765.49 | 382,881.56 | 9,875,647.05 | ||||||||
| Subtotal | 70,999,666.81 | 1,050,116.57 | 3,411,761.86 | 73,361,312.10 | 2,927,628.53 | ||||||
| Total | 70,999,666.81 | 1,050,116.57 | 3,411,761.86 | 73,361,312.10 | 2,927,628.53 |
Other explanation*1: these two companies have been established for a long time. At the current stage, their business licenses have
been revoked. Impairment provision is made in full due to absence of settlement.*2: the long-term equity investment for Changzhou Shenbao Chacang E-commence Co., Ltd and ShenzhenShichumingmen Restaurant Management Co., Ltd. which are measured by equity; the book balance counted asZero for losses in the two abovementioned enterprises
18. Other equity instrument investment
In RMB
| Item | Ending balance | Opening balance |
Itemized the non-tradable equity instrument investment in the period
In RMB
| Item | Dividend income recognized | Cumulative gains | Cumulative losses | Retained earnings transfer from other comprehensive income | Causes of those that designated measured by fair value and with its variation reckoned into other comprehensive income | Cause of retained earnings transfer from other comprehensive income |
Other explanation:
19. Other non-current financial assets
In RMB
| Item | Ending balance | Opening balance |
| Equity instrument investment | 57,500.00 | 57,500.00 |
| Total | 57,500.00 | 57,500.00 |
Other explanation:
| Invested unit | Shareholding ratio in invested units (%) | Ending balance | Impairment reserve ending balance |
| Shenzhen Sanjiu Weitai Co., Ltd. | 0.95 | 2,480,000.00 | 2,480,000.00 |
| Shenzhen Tianji Photoelectric Industry Co., Ltd. (Formerly known as "Shenzhen Tianji Photoelectric Technology Industrial Co., Ltd.")*1 | 3.77 | 15,000,000.00 | 15,000,000.00 |
| Beijing Temple of Heaven Co., Ltd. | 57,500.00 |
| Total | 17,537,500.00 | 17,480,000.00 |
Presented under the financial assets available-for sale before implemented the new financial instrument standard. Ending balancerefers to the shares of Beijing Temple of Heaven Co., Ltd held, the shares are the legal person’s shares purchased from former STAQtrading system. Former name was Beijing Shuanghesheng Five Star Beer Sanhuan Co., Ltd, initial investment shares amounted to55,000 shares, and after renamed, directional share exchange amounted to 33,333 shares.
20. Investment real estate
(1) Measured at cost
√ Applicable □Not applicable
In RMB
| Item | House and building | Land use right | Construction in progress | Total |
| I. Original book value | ||||
| 1.Opening balance | 567,162,333.74 | 567,162,333.74 | ||
| 2.Current amount increased | 23,277,994.41 | 23,277,994.41 | ||
| (1) Outsourcing | 506,238.00 | 506,238.00 | ||
| (2) Inventory\fixed assets\construction in process transfer-in | 22,771,756.41 | 22,771,756.41 | ||
| (3) Increased by combination | ||||
| 3.Current amount decreased | ||||
| (1) Disposal | ||||
| (2) Other transfer-out | ||||
| 4.Ending balance | 590,440,328.15 | 590,440,328.15 | ||
| II. Accumulated depreciation and accumulated amortization | ||||
| 1.Opening balance | 284,540,148.82 | 284,540,148.82 | ||
| 2.Current amount increased | 36,195,242.16 | 36,195,242.16 | ||
| (1) Accrual or amortization | 23,483,423.93 | 23,483,423.93 | ||
| (2) Inventory\fixed assets\construction in process transfer-in | 12,711,818.23 | 12,711,818.23 | ||
| 3.Current amount decreased |
| (1) Disposal | ||||
| (2) Other transfer-out | ||||
| 4.Ending balance | 320,735,390.98 | 320,735,390.98 | ||
| III. Impairment provision | ||||
| 1.Opening balance | ||||
| 2.Current amount increased | ||||
| (1) Accrual | ||||
| 3. Current amount decreased | ||||
| (1) Disposal | ||||
| (2) Other transfer-out | ||||
| 4.Ending balance | ||||
| IV. Book value | ||||
| 1.Ending book value | 269,704,937.17 | 269,704,937.17 | ||
| 2. Opening book value | 282,622,184.92 | 282,622,184.92 |
(2) Measure on fair value
□ Applicable √Not applicable
(3) Investment real estate without property certificate completed
In RMB
| Item | Book value | Reasons |
Other explanation
21. Fixed assets
In RMB
| Item | Ending balance | Opening balance |
| Fixed assets | 945,042,032.69 | 993,136,743.51 |
| Total | 945,042,032.69 | 993,136,743.51 |
(1) Fixed assets
In RMB
| Item | House and buildings | Machinery equipment | Transport equipment | Electronic and other equipment | Total |
| I. Original book value: | |||||
| 1.Opening balance | 915,002,141.50 | 483,988,177.15 | 19,100,984.41 | 60,021,239.23 | 1,478,112,542.29 |
| 2.Current amount increased | 6,216,504.63 | 5,003,151.83 | 1,252,028.03 | 4,286,716.00 | 16,758,400.49 |
| (1) Purchase | 5,003,151.83 | 1,252,028.03 | 4,286,716.00 | 10,541,895.86 | |
| (2) Construction in progress transfer-in | |||||
| (3) Increased by combination | |||||
| (4) Other transfers-in | 6,216,504.63 | 6,216,504.63 | |||
| 3.Current amount decreased | 24,700,244.36 | 36,965,247.71 | 1,631,490.93 | 3,547,654.38 | 66,844,637.38 |
| (1) Disposal or scrap | 1,928,487.95 | 35,665,267.24 | 1,623,510.93 | 2,298,585.50 | 41,515,851.62 |
| (2) Other transfers-out | 22,771,756.41 | 1,299,980.47 | 7,980.00 | 1,249,068.88 | 25,328,785.76 |
| 4.Ending balance | 896,518,401.77 | 452,026,081.27 | 18,721,521.51 | 60,760,300.85 | 1,428,026,305.40 |
| II. Accumulated depreciation | |||||
| 1.Opening balance | 180,969,012.00 | 243,434,618.06 | 13,913,087.94 | 36,532,801.29 | 474,849,519.29 |
| 2.Current amount increased | 23,707,112.03 | 20,179,089.85 | 1,268,474.28 | 7,211,220.56 | 52,365,896.72 |
| (1) Accrual | 23,707,112.03 | 20,179,089.85 | 1,268,474.28 | 7,211,220.56 | 52,365,896.72 |
| 3.Current amount decreased | 13,436,007.02 | 31,040,888.48 | 1,478,911.19 | 3,263,896.59 | 49,219,703.28 |
| (1) Disposal or scrap | 724,188.79 | 29,926,515.79 | 1,478,911.19 | 2,079,020.25 | 34,208,636.02 |
| (2) Other transfers-out | 12,711,818.23 | 1,114,372.69 | 1,184,876.34 | 15,011,067.26 | |
| 4.Ending balance | 191,240,117.01 | 232,572,819.43 | 13,702,651.03 | 40,480,125.26 | 477,995,712.73 |
| III. Impairment provision | |||||
| 1.Opening balance | 1,797,706.49 | 8,207,030.23 | 93,411.42 | 28,131.35 | 10,126,279.49 |
| 2.Current amount increased | 372,521.40 | 372,521.40 | |||
| (1) Accrual | 372,521.40 | 372,521.40 | |||
| 3.Current amount decreased | 1,108,373.78 | 4,294,195.48 | 93,411.42 | 14,260.23 | 5,510,240.91 |
| (1) Disposal or scrap | 1,108,373.78 | 3,921,262.58 | 93,411.42 | 14,260.23 | 5,137,308.01 |
| (2) Other transfers-out | 372,932.90 | 372,932.90 | |||
| 4.Ending balance | 689,332.71 | 4,285,356.15 | 13,871.12 | 4,988,559.98 | |
| IV. Book value | |||||
| 1.Ending book value | 704,588,952.05 | 215,167,905.69 | 5,018,870.48 | 20,266,304.47 | 945,042,032.69 |
| 2. Opening book value | 732,235,423.01 | 232,346,528.86 | 5,094,485.05 | 23,460,306.59 | 993,136,743.51 |
(2) Temporarily idle fixed assets
In RMB
| Item | Original book value | Accumulated depreciation | Impairment provision | Book value | Note |
(3) Fixed assets by financing leased
In RMB
| Item | Original book value | Accumulated depreciation | Impairment provision | Book value |
(4) Fixed assets leased out by operation
In RMB
| Item | Ending book value |
(5) Fix assets without property certification held
In RMB
| Item | Book value | Reasons for without the property certification |
| House buildings | 15,661,805.96 | The planning acceptance and construction acceptance record can not be handle due to the loss of planning and construction historical data, at present, the relevant application and approval procedures are being restarted. |
| House buildings | 13,718,825.24 | Simple and temporary buildings etc, cannot handle the property right certificate |
| House buildings | 105,701,442.56 | Berth of wharf has right of use, no need to handle the certificate |
| House buildings | 316,312,201.39 | Still under processing |
Other explanation
(6) Fixed assets disposal
In RMB
| Item | Ending balance | Opening balance |
Other explanation
22. Construction in progress
In RMB
| Item | Ending balance | Opening balance |
| Construction in progress | 771,971,469.43 | 186,586,135.06 |
| Total | 771,971,469.43 | 186,586,135.06 |
(1) Construction in progress
In RMB
| Item | Ending balance | Opening balance | ||||
| Book balance | Impairment provision | Book value | Book balance | Impairment provision | Book value | |
| Shenbao Plaza project | 3,842,333.64 | 3,842,333.64 | 3,842,333.64 | 3,842,333.64 | ||
| Dongguan grain storage and wharf matching project | 197,140,797.10 | 197,140,797.10 | 91,924,086.19 | 91,924,086.19 | ||
| Deep processing of Dongguan Industry and Trading Food | 120,065,528.37 | 120,065,528.37 | 39,276,418.03 | 39,276,418.03 | ||
| CDE storage of Dongguan Food Industrial Park and wharf mating projects | 399,913,306.49 | 399,913,306.49 | 43,391,511.05 | 43,391,511.05 | ||
| Grain storage and processing | 42,489,084.80 | 42,489,084.80 | 6,621,284.40 | 6,621,284.40 | ||
| Supporting projects related to grain supply | ||||||
| Workshop transformation of Flour Company | 868,932.37 | 868,932.37 | 711,487.37 | 711,487.37 | ||
| Low-temperature renovation reconstruction and expansion project in Pinghu | 7,096,256.57 | 7,096,256.57 | ||||
| Other | 5,300,753.47 | 903,189.74 | 4,397,563.73 | 5,564,537.76 | 903,189.74 | 4,661,348.02 |
| Total | 776,716,992.81 | 4,745,523.38 | 771,971,469.43 | 191,331,658.44 | 4,745,523.38 | 186,586,135.06 |
(2) Changes of major construction in progress
In RMB
| Item Name | Budget | Opening balance | Current amount increased | Transfer-in fixed assets | Other decreased in the Period | Ending balance | Proportion of project investment in budget | Progress | Accumulated capitalization of interest | Including: amount of capitalization of interest in Period | Interest capitalization rate in Period | Capital resources |
| Dongguan grain storage and wharf matching project | 1,242,000,000.00 | 91,924,086.19 | 105,216,710.91 | 197,140,797.10 | 69.00% | Project progress 69% | 24,462,003.73 | 7,276,865.71 | 4.90% | Financial institution loans | ||
| Deep processing of Dongguan Industry and Trading Food | 292,000,000.00 | 39,276,418.03 | 80,789,110.34 | 120,065,528.37 | 41.00% | Project progress 41% | 4,834,080.16 | 2,482,414.45 | 4.90% | Financial institution loans | ||
| CDE storage of Dongguan Food Industrial Park and wharf mating projects | 960,000,000.00 | 43,391,511.05 | 356,521,795.44 | 399,913,306.49 | 73.00% | Project progress 73% | 47,728,672.54 | 21,652,426.54 | 5.64% | Financial institution loans | ||
| Total | 2,494,000,000.00 | 174,592,015.27 | 542,527,616.69 | 717,119,631.96 | -- | -- | 77,024,756.43 | 31,411,706.70 | -- |
(3) The provision for impairment of construction in progress
In RMB
| Item | Amount accrual in the period | Reasons of accrual |
Other explanation
(4) Engineering material
In RMB
| Item | Ending balance | Opening balance | ||||
| Book balance | Impairment provision | Book value | Book balance | Impairment provision | Book value | |
Other explanation:
23. Productive biological asset
(1) Measured by cost
√ Applicable □Not applicable
In RMB
| Item | Plant | Livestock | Forestry | Fisheries | Total |
| Tea tree | |||||
| I. Original book value | |||||
| 1.Opening balance | 416,771.28 | 416,771.28 | |||
| 2.Current amount increased | |||||
| (1)Outsourcing | |||||
| (2)self-cultivate | |||||
| 3.Current amount decreased | |||||
| (1)Disposal | |||||
| (2)Other | |||||
| 4.Ending balance | 416,771.28 | 416,771.28 | |||
| II. Accumulated depreciation | |||||
| 1.Opening balance | 9,692.36 | 9,692.36 | |||
| 2.Current amount increased | 9,692.36 | 9,692.36 | |||
| (1)Accrual | 9,692.36 | 9,692.36 | |||
| 3.Current amount decreased | |||||
| (1)Disposal | |||||
| (2)Other | |||||
| 4.Ending balance | 19,384.72 | 19,384.72 |
| III. Impairment provision | |||||
| 1.Opening balance | |||||
| 2.Current amount increased | |||||
| (1)Accrual | |||||
| 3.Current amount decreased | |||||
| (1)Disposal | |||||
| (2)Other | |||||
| 4.Ending balance | |||||
| IV. Book value | |||||
| 1.Ending book value | 397,386.56 | 397,386.56 | |||
| 2. Opening book value | 407,078.92 | 407,078.92 |
(2) Measured by fair value
□ Applicable √Not applicable
24. Oil and gas asset
□ Applicable √Not applicable
25. Right-of-use asset
In RMB
| Item | Total |
Other explanation:
26. Intangible assets
(1) Intangible assets
In RMB
| Item | Land use right | Patent | Non-patent technology | Other | Total |
| I. Original book value | |||||
| 1.Opening balance | 594,651,154.35 | 46,265,918.89 | 10,305,949.49 | 31,536,228.47 | 682,759,251.20 |
| 2.Current amount increased | 35,859,628.84 | 980,000.00 | 1,112,182.59 | 1,431,895.00 | 39,383,706.43 |
| (1) Purchase | 35,859,628.84 | 980,000.00 | 1,112,182.59 | 1,431,895.00 | 39,383,706.43 |
| (2) internal R&D | |||||
| (3) Increased by combination | |||||
| 3.Current amount decreased | 106,454.45 | 12,600.00 | 119,054.45 | ||
| (1) Disposal | 106,454.45 | 12,600.00 | 119,054.45 | ||
| 4.Ending balance | 630,510,783.19 | 47,245,918.89 | 11,311,677.63 | 32,955,523.47 | 722,023,903.18 |
| II. Accumulated depreciation | |||||
| 1.Opening balance | 69,506,679.20 | 24,341,841.17 | 3,709,966.00 | 8,482,030.59 | 106,040,516.96 |
| 2.Current amount increased | 15,309,422.93 | 1,551,737.16 | 1,377,159.62 | 1,963,119.33 | 20,201,439.04 |
| (1) Accrual | 15,309,422.93 | 1,551,737.16 | 1,377,159.62 | 1,963,119.33 | 20,201,439.04 |
| 3.Current amount decreased | 68,737.71 | 68,737.71 | |||
| (1) Disposal | 68,737.71 | 68,737.71 | |||
| 4.Ending balance | 84,816,102.13 | 25,893,578.33 | 5,018,387.91 | 10,445,149.92 | 126,173,218.29 |
| III. Impairment provision | |||||
| 1.Opening balance | 5,553,283.54 | 1,168,058.62 | 6,721,342.16 |
| 2.Current amount increased | |||||
| (1) Accrual | |||||
| 3.Current amount decreased | 37,716.74 | 37,716.74 | |||
| (1) Disposal | 37,716.74 | 37,716.74 | |||
| 4.Ending balance | 5,553,283.54 | 1,130,341.88 | 6,683,625.42 | ||
| IV. Book value | |||||
| 1.Ending book value | 545,694,681.06 | 15,799,057.02 | 5,162,947.84 | 22,510,373.55 | 589,167,059.47 |
| 2. Opening book value | 525,144,475.15 | 16,370,794.18 | 5,427,924.87 | 23,054,197.88 | 569,997,392.08 |
Ratio of the intangible assets from internal R&D in balance of intangible assets at period-end
(2) Land use rights without certificate of ownership
In RMB
| Item | Book value | Reasons for without the property certification |
| Land use right | 54,340,047.91 | Still under processing |
| Land use right | 2,572,333.74 | Collective land, cannot handle the certificate of ownership |
| Total | 56,912,381.65 |
Other explanation:
27. Expense on Research and Development
In RMB
| Item | Opening balance | Current amount increased | Current amount decreased | Ending balance | ||||
| Internal development expenditure | Other | Confirmed as intangible assets | Transfer to current profit and loss | |||||
| Total | ||||||||
Other explanation
28. Goodwill
(1) Goodwill Original book value
In RMB
| The invested entity or matters forming goodwill | Opening balance | Current increased | Current decreased | Ending balance | ||
| Formed by business combination | Dispose | |||||
| Yunnan Pu’er Tea Trading Center Co., Ltd. | 673,940.32 | 673,940.32 | ||||
| Total | 673,940.32 | 673,940.32 | ||||
(2) Goodwill impairment provision
In RMB
| The invested entity or matters forming goodwill | Opening balance | Current increased | Current decreased | Ending balance | ||
| Accrual | Dispose | |||||
| Yunnan Pu’er Tea Trading Center Co., Ltd. | 673,940.32 | 673,940.32 | ||||
| Total | 673,940.32 | 673,940.32 | ||||
Relevant information about the assets group or portfolio goodwill includedIn May 2016, the 15% equity of Pu’er Tea Trading Center held by Yunnan Heng Feng Xiang Investment Co., Ltd was acquired by JuFang Yong Holding, the sub-subsidiary of the Company, after completion of the acquisition, the Company has control over the Pu’erTea Trading Center. The balance between the combined cost and the fair value of net assets on the combining date formed goodwillof RMB 673,940.32.
Instructions for goodwill impairments test process and key parameters (such as the forecast period growth rate, stable period growthrate, profit rate, discount rate, and forecast period when estimating the present value of the future cash flow), and the method ofconfirming the impairment loss of goodwill:
Impact of goodwill impairment testOther explanation
29. Long-term expenses to be apportioned
In RMB
| Item | Opening balance | Current amount increased | Current amortization | Other decreased | Ending balance |
| Improve expenditure for fix assets | 2,385,091.34 | 8,084,929.15 | 1,258,930.83 | 9,211,089.66 | |
| Decoration fee | 4,550,750.21 | 2,143,716.61 | 1,842,074.36 | 323,844.28 | 4,528,548.18 |
| Improve expenditure for investment real estate | 8,706,105.90 | 2,489,601.27 | 6,216,504.63 | ||
| Affiliated project of resident area in Wuyuan Ju Fang Yong | 36,374.47 | 131,918.00 | 44,081.83 | 124,210.64 | |
| Other *1 | 6,121,577.88 | 1,158,017.90 | 1,259,208.96 | 29,006.61 | 5,991,380.21 |
| Total | 21,799,899.80 | 11,518,581.66 | 6,893,897.25 | 6,569,355.52 | 19,855,228.69 |
Other explanation
*1. Mainly due to long-term deferred expenses such as Huizhou Shenbao 2.8 million yuan (including outdoorsewage installation and system maintenance costs), Shenzhen Cereals Group 3.03 million yuan (includingmaintenance auxiliary costs).
30. Deferred income tax asset /Deferred income tax liabilities
(1) Deferred income tax assets without offset
In RMB
| Item | Ending balance | Opening balance | ||
| Deductible temporary differences | Deferred income tax asset | Deductible temporary differences | Deferred income tax asset | |
| Impairment provision for assets | 58,355,685.95 | 14,290,490.90 | 200,997,551.38 | 49,759,336.40 |
| Unrealized profits in internal transactions | 973,157.01 | 243,289.25 | 1,348,710.60 | 337,177.65 |
| Deferred income | 183,076.96 | 45,769.24 | 312,307.72 | 78,076.93 |
| Credit impairment loss | 98,478,516.09 | 24,503,161.57 | ||
| Total | 157,990,436.01 | 39,082,710.96 | 202,658,569.70 | 50,174,590.98 |
(2) Deferred income tax liability without offset
In RMB
| Item | Ending balance | Opening balance | ||
| Taxable temporary differences | Deferred income tax liabilities | Taxable temporary differences | Deferred income tax liabilities | |
| Asset evaluation increment of enterprise combine under different control | 50,255,008.79 | 12,563,752.22 | 51,909,877.24 | 12,977,469.31 |
| Valuation of trading financial instruments and derivative financial instruments | 43,861.84 | 10,965.46 | ||
| Total | 50,255,008.79 | 12,563,752.22 | 51,953,739.08 | 12,988,434.77 |
(3) Deferred income tax assets and deferred income tax liabilities listed after off-set
In RMB
| Item | Trade-off between the deferred income tax assets and liabilities | Ending balance of deferred income tax assets or liabilities after off-set | Trade-off between the deferred income tax assets and liabilities at period-begin | Opening balance of deferred income tax assets or liabilities after off-set |
| Deferred income tax asset | 39,082,710.96 | 50,174,590.98 | ||
| Deferred income tax liabilities | 12,563,752.22 | 12,988,434.77 |
(4) Details of uncertain deferred income tax assets
In RMB
| Item | Ending balance | Opening balance |
| Deductible temporary differences | 309,898,433.67 | 182,713,070.07 |
| Deductible loss | 330,162,451.72 | 112,864,728.90 |
| Total | 640,060,885.39 | 295,577,798.97 |
(5) Deductible losses of un-recognized deferred income tax assets expired on the followed year
In RMB
| Year | Ending amount | Opening amount | Note |
Other explanation:
31. Other non-current asset
Whether implemented the new revenue standards
□Yes √No
In RMB
| Item | Ending balance | Opening balance |
| Prepaid for equipment | 611,965.84 | 866,378.12 |
| Prepaid for engineering | 1,069,771.60 | |
| Prepaid for system | 1,260,000.00 | |
| Total | 1,871,965.84 | 1,936,149.72 |
Other explanation:
32. Short-term loans
(1) Category
In RMB
| Item | Ending balance | Opening balance |
| Secured loans | 30,000,000.00 | |
| Guarantee loan | 30,000,000.00 | |
| Loan in credit | 23,595,000.00 | 31,600,000.00 |
| Total | 23,595,000.00 | 91,600,000.00 |
Explanation on category of short-term loans:
(2) Overdue short-term loans without payment
RMB 0 short-term loans over due without paid at period-end, including follow major amount:
In RMB
| Borrower | Ending balance | Loan rate | Overdue time | Overdue interest |
Other explanation:
33. Tradable financial liability
In RMB
| Item | Ending balance | Opening balance |
| Including: | ||
| Including: |
Other explanation:
34. Derivative financial liability
In RMB
| Item | Ending balance | Opening balance |
Other explanation:
35. Note payable
In RMB
| Category | Ending balance | Opening balance |
Notes expired at year-end without paid was 0 Yuan.
36. Account payable
(1) Account payable
In RMB
| Item | Ending balance | Opening balance |
| Trade accounts payable | 201,806,654.53 | 438,618,768.51 |
| Account payable for engineering | 55,979,629.86 | 31,922,123.90 |
| Other | 8,337,186.59 | 2,197,391.39 |
| Total | 266,123,470.98 | 472,738,283.80 |
(2) Major accounts payable with age over one year
In RMB
| Item | Ending balance | Reasons of outstanding or carry-over |
Other explanation:
37. Accounts received in advance
Whether implemented the new revenue standards
□Yes √No
(1) Accounts received in advance
In RMB
| Item | Ending balance | Opening balance |
| Account for goods received in advance | 134,989,316.21 | 204,866,040.96 |
| Other | 2,222,515.79 | 562,553.20 |
| Total | 137,211,832.00 | 205,428,594.16 |
(2) Important account received in advance with account age over one year
In RMB
| Item | Ending balance | Reasons of outstanding or carry-over |
(3) Projects that settle without completed from construction contract at period-end
In RMB
| Item | Amount |
Other explanation:
38. Contractual liabilities
In RMB
| Item | Ending balance | Opening balance |
Amount and reasons for important changes of book value in the period
In RMB
| Item | Amount changed | Reasons of changes |
39. Wage payable
(1) Wage payable
In RMB
| Item | Opening balance | Current increased | Current decreased | Ending balance |
| I. Short-term compensation | 121,382,348.52 | 280,974,373.18 | 231,870,273.77 | 170,486,447.93 |
| II. After-service welfare-defined contribution plans | 10,264,159.59 | 25,455,870.29 | 12,168,248.86 | 23,551,781.02 |
| III. Dismissed welfare | 4,062,915.41 | 4,151,468.48 | 7,176,036.29 | 1,038,347.60 |
| Total | 135,709,423.52 | 310,581,711.95 | 251,214,558.92 | 195,076,576.55 |
(2) Short-term compensation
In RMB
| Item | Opening balance | Current increased | Current decreased | Ending balance |
| 1. Wage, bonus, allowance and subsidy | 113,607,669.85 | 243,498,799.23 | 197,044,376.73 | 160,062,092.35 |
| 2. Employees’ welfare | 13,956,156.34 | 13,280,289.67 | 675,866.67 | |
| 3. Social insurance charges | 99,598.81 | 6,544,947.36 | 6,558,500.98 | 86,045.19 |
| Including: medical insurance premium | 92,813.10 | 5,907,502.96 | 5,958,562.07 | 41,753.99 |
| Industrial injury insurance premiums | 304.92 | 147,320.22 | 147,019.97 | 605.17 |
| Maternity insurance premiums | 6,480.79 | 319,585.45 | 323,765.99 | 2,300.25 |
| other | 170,538.73 | 129,152.95 | 41,385.78 | |
| 4. Housing public reserve | 9,184,617.94 | 9,059,817.64 | 124,800.30 | |
| 5. Trade union fee and education fee | 7,675,079.86 | 7,789,852.31 | 5,927,288.75 | 9,537,643.42 |
| Total | 121,382,348.52 | 280,974,373.18 | 231,870,273.77 | 170,486,447.93 |
(3) Defined contribution plans
In RMB
| Item | Opening balance | Current increased | Current decreased | Ending balance |
| 1. Basic endowment insurance premiums | 236,975.62 | 11,797,668.96 | 11,611,212.13 | 423,432.45 |
| 2. Unemployment insurance premiums | 4,569.75 | 99,051.82 | 101,067.10 | 2,554.47 |
| 3. Enterprise annuity | 10,022,614.22 | 13,559,149.51 | 455,969.63 | 23,125,794.10 |
| Total | 10,264,159.59 | 25,455,870.29 | 12,168,248.86 | 23,551,781.02 |
Other explanation:
40. Taxes payable
In RMB
| Item | Ending balance | Opening balance |
| VAT | 2,206,356.73 | 9,493,004.93 |
| Enterprise income tax | 30,123,982.59 | 9,219,053.50 |
| Personal income tax | 1,251,969.61 | 1,927,699.20 |
| Urban maintenance and construction tax | 104,892.72 | 640,819.28 |
| Educational surtax | 78,996.91 | 483,228.46 |
| Use tax of land | 275,026.35 | 574,505.73 |
| Stamp tax | 599,525.05 | 246,056.29 |
| House property tax | 1,348,616.75 | 1,725,020.41 |
| Other | 1,058,246.76 | 660,330.78 |
| Total | 37,047,613.47 | 24,969,718.58 |
Other explanation:
41. Other account payable
In RMB
| Item | Ending balance | Opening balance |
| Interest payable | 1,411,457.29 | |
| Dividend payable | 2,933,690.04 | 2,909,182.74 |
| Other account payable | 232,032,023.80 | 277,780,365.55 |
| Total | 236,377,171.13 | 280,689,548.29 |
(1) Interest payable
In RMB
| Item | Ending balance | Opening balance |
| Long-term loans interest for installment | 1,411,457.29 | |
| Total | 1,411,457.29 |
Major overdue interest:
In RMB
| Borrower | Overdue amount | Overdue causes |
Other explanation:
(2) Dividend payable
In RMB
| Item | Ending balance | Opening balance |
| Unmanaged shares | 242,719.90 | 218,212.60 |
| Shenzhen Investment Management Company *1 | 2,690,970.14 | 2,690,970.14 |
| Total | 2,933,690.04 | 2,909,182.74 |
Other explanation, including important dividend payable over one year without payment, disclose reasons for un-paid:
*1 Former largest shareholder, problems left over from historical guarantees.
(3) Other account payable
1) By nature
In RMB
| Item | Ending balance | Opening balance |
| Engineering quality retention money and fund of tail | 3,797,078.78 | 3,191,037.22 |
| Deposit and margin | 116,032,480.36 | 151,049,170.31 |
| Intercourse funds and other | 105,177,684.59 | 100,749,160.89 |
| Drawing expenses in advance | 7,024,780.07 | 22,790,997.13 |
| Total | 232,032,023.80 | 277,780,365.55 |
2) Significant other account payable with over one year age
In RMB
| Item | Ending balance | Reasons of outstanding or carry-over |
| Zhanjiang Changshan (Shenzhen) Ecological Breeding Co., Ltd. | 7,988,954.17 | Not yet expired |
| Shenzhen Yulunda Investment Development Co., Ltd. | 4,483,411.81 | Not yet expired |
| Total | 12,472,365.98 | -- |
Other explanation
42. Liability held for sale
In RMB
| Item | Ending balance | Opening balance |
Other explanation:
43. Non-current liabilities due within one year
In RMB
| Item | Ending balance | Opening balance |
| Long-term loans due within one year | 67,420,012.16 | 55,090,793.79 |
| Total | 67,420,012.16 | 55,090,793.79 |
Other explanation:
44. Other current liabilities
Whether implemented the new revenue standards
□Yes √No
In RMB
| Item | Ending balance | Opening balance |
| Subsidies for grain reserve services | 219,151,968.63 | 219,151,968.63 |
| Total | 219,151,968.63 | 219,151,968.63 |
Change of short-term bonds payable:
In RMB
| Bonds | Face value | Issuance date | Bonds term | Amount issued | Opening balance | Issued in the period | Accrual interest by face value | Premium and discount amortization | Paid in the period | Ending balance |
Other explanation:
45. Long-term loans
(1) Category
In RMB
| Item | Ending balance | Opening balance |
| Mortgage loan | 673,642,296.22 | 426,427,633.70 |
| Guarantee loan | 162,270,260.19 | 90,260,157.96 |
| Total | 835,912,556.41 | 516,687,791.66 |
Explanation on category of long-term loans:
Other explanation, including interest rate range:
46. Bonds payable
(1) Bonds payable
In RMB
| Item | Ending balance | Opening balance |
(2) Changes of bonds payable (not including the other financial instrument of preferred stock andperpetual capital securities that classify as financial liability)
In RMB
| Bonds | Face value | Issuance date | Bonds term | Amount issued | Opening balance | Issued in the period | Accrual interest by face value | Premium and discount amortization | Paid in the period | Ending balance | |
| Total | -- | -- | -- |
(3) Convertible conditions and time for shares transfer for the convertible bonds
(4) Other financial instruments classify as financial liability
Basic information of the outstanding preferred stock and perpetual capital securities at period-endChanges of outstanding preferred stock and perpetual capital securities at period-end
In RMB
| Outstanding financial instrument | Period-beginning | Current increased | Current decreased | Period-end | ||||
| Amount | Book value | Amount | Book value | Amount | Book value | Amount | Book value | |
Basis for financial liability classification for other financial instrumentOther explanation
47. Lease liability
In RMB
| Item | Ending balance | Opening balance |
Other explanation
48. Long-term account payable
In RMB
| Item | Ending balance | Opening balance |
| Special account payable | 15,856,950.01 | 15,690,202.08 |
| Total | 15,856,950.01 | 15,690,202.08 |
(1) By nature
In RMB
| Item | Ending balance | Opening balance |
Other explanation:
(2) Special account payable
In RMB
| Item | Opening balance | Current increased | Current decreased | Ending balance | Causes |
| Depreciation fund for grain deposits and special fund for grain industry research | 15,690,202.08 | 172,786.93 | 6,039.00 | 15,856,950.01 | Note 1 |
| Total | 15,690,202.08 | 172,786.93 | 6,039.00 | 15,856,950.01 | -- |
Other explanation:
Note 1: Depreciation fund for grain deposits is the finance allocated to the Company as a government investmentin depreciation special funds of reserve grain depot and interest.
49. Long-term wage payable
(1) Long-term wage payable
In RMB
| Item | Ending balance | Opening balance |
(2) Changes of defined benefit plans
Present value of the defined benefit plans:
In RMB
| Item | Current Period | Last Period |
Scheme assets:
In RMB
| Item | Current Period | Last Period |
Net liability (assets) of the defined benefit plans
In RMB
| Item | Current Period | Last Period |
Content of defined benefit plans and relevant risks, impact on future cash flow of the Company as well as times and uncertainty:
Major actuarial assumption and sensitivity analysis:
Other explanation:
50. Accrual liabilities
Whether implemented the new revenue standards
□Yes √No
In RMB
| Item | Ending balance | Opening balance | Causes |
| External guarantee | 3,500,000.00 | Note 1 | |
| Total | 3,500,000.00 | -- |
Other explanation, including relevant important assumptions and estimation:
Note 1: For the guarantee of Changzhou Shenbao within the scope of 3.5 million yuan to provide joint liability forcompensation.
51. Deferred income
In RMB
| Item | Opening balance | Current increased | Current decreased | Ending balance | Causes |
| Including: government subsidies related to assets | 100,029,657.21 | 6,220,000.00 | 4,499,225.56 | 101,750,431.65 | See table below for details |
| Government subsidies related to income | 578,545.80 | 536,736.14 | 41,809.66 | See table below for details | |
| Total | 100,608,203.01 | 6,220,000.00 | 5,035,961.70 | 101,792,241.31 | -- |
Item with government grants involved:
In RMB
| Liability | Opening balance | New grants in the Period | Amount reckoned in non-operation revenue | Amount reckoned in other income | Cost reduction in the period | Other changes | Ending balance | Assets-related/income related |
| (1) Base of further processing for tea and nature plants | 1,100,000.00 | 275,000.00 | 825,000.00 | Assets-related | ||||
| (2) Enterprise technology center is a municipal R&D center. Subsidies for industrial technological advancement | 1,987,301.17 | 204,024.60 | 1,783,276.57 | Assets-related |
| (3) Project grants for years for agricultural district, Xihu Zone | 312,307.72 | 129,230.76 | 183,076.96 | Assets-related | ||||
| (4) Key technology research and development for the preparation of high-quality aroma extracts based on the use of tea aroma precursors | 243,233.62 | 8,119.68 | 235,113.94 | Assets-related | ||||
| (5) Key technology research and development for the preparation of high-quality aroma extracts based on the use of tea aroma precursors | 241,323.58 | 199,513.92 | 41,809.66 | Income- related | ||||
| (6) Finance Discount | 337,222.22 | 337,222.22 | Income- related | |||||
| (7) Industrialization of instant tea powder | 2,084,136.67 | 196,445.88 | 1,887,690.79 | Assets-related |
| (8) Grant for key technology research and industrialization of instant tea powder | 153,011.21 | 14,245.02 | 138,766.19 | Assets-related | ||||
| (9) Special fund for the development of strategic emerging industries in Shenzhen(plant deep processing engineering) (Shen Development & Reform No. 20131601) | 3,538,892.95 | 351,209.08 | 3,187,683.87 | Assets-related | ||||
| (10) Construction amount for 50 tons for clearly processing for Mingyou tea | 500,000.00 | 125,000.02 | 374,999.98 | Assets-related | ||||
| (11) Subsidy for tea seeding of New Tea Garden in Wangkou | 46,129.96 | 1,109.28 | 45,020.68 | Assets-related |
| (12) Subsidy for supply system construction of agricultural products | 750,000.00 | 200,000.00 | 550,000.00 | Assets-related | ||||
| (13) Grain storage project of Dongguan Shenliang Logistics Co., Ltd. - Storage A | 8,242,417.83 | 262,257.12 | 7,980,160.71 | Assets-related | ||||
| (14) Phase II of grain storage project of Dongguan Shenliang Logistics Co., Ltd.- Storage B | 32,968,699.52 | 1,031,300.52 | 31,937,399.00 | Assets-related | ||||
| (15) Grain, oil and food headquarters and innovative public service platform of Dongguan Shenliang Logistics Co., Ltd. | 18,000,000.00 | 18,000,000.00 | Assets-related |
| (16) Special funds for intelligent upgrading and transformation of grain warehouse for the 2017 “Grain Safety Project” | 5,100,000.00 | 6,220,000.00 | 11,320,000.00 | Assets-related | ||||
| (17) Construction of 450000 ton silos and 60000 ton film silos -CDE warehouse. Gas storage bin | 17,491,764.71 | 104,117.64 | 17,387,647.07 | Assets-related | ||||
| (18) Special fund for agricultural development of 2016- agricultural product safety testing project- capacity building of the third party inspection institution expansion evaluation | 492,000.00 | 164,000.00 | 328,000.00 | Assets-related |
| (19) Agricultural product safety testing project of the special fund for agricultural development of 2016 - Central investment fund | 1,026,000.00 | 342,000.00 | 684,000.00 | Assets-related | ||||
| (20) Construction of O2O community sales service system for high quality grain and oil based on B2C E-commerce platform | 1,789,411.20 | 38,576.04 | 1,750,835.16 | Assets-related | ||||
| (21) Industrialization of Doximi E-commerce platform | 2,813,684.01 | 852,589.88 | 1,961,094.13 | Assets-related | ||||
| (22) Commercial circulation development project funding for year of 2017 | 524,000.00 | 524,000.00 | Assets-related |
| (23) Intelligent management of grain depot based on mobile internet | 866,666.64 | 200,000.04 | 666,666.60 | Assets-related | ||||
| Total | 100,608,203.01 | 6,220,000.00 | 5,035,961.70 | 101,792,241.31 |
Other explanation:
52. Other non-current liabilities
Whether implemented the new revenue standards
□Yes √No
In RMB
| Item | Ending balance | Opening balance |
Other explanation:
53. Share capital
In RMB
| Opening balance | Increased (decreased) in this year +,- | Ending balance | |||||
| New shares issued | Bonus shares | Shares converted from public reserve | Other | Subtotal | |||
| Total shares | 1,152,535,254.00 | 1,152,535,254.00 | |||||
Other explanation:
54. Other equity instrument
(1) Basic information of the outstanding preferred stock and perpetual capital securities at period-end
(2) Changes of outstanding preferred stock and perpetual capital securities at period-end
In RMB
| Outstanding financial instrument | Period-beginning | Current increased | Current decreased | Period-end | ||||
| Amount | Book value | Amount | Book value | Amount | Book value | Amount | Book value | |
Changes of other equity instrument, change reasons and relevant accounting treatment basis:
Other explanation:
55. Capital public reserve
In RMB
| Item | Opening balance | Current increased | Current decreased | Ending balance |
| Capital premium (Share capital premium) | 1,413,996,347.50 | 1,413,996,347.50 | ||
| Other capital reserve | 8,896,381.86 | 8,896,381.86 | ||
| Total | 1,422,892,729.36 | 1,422,892,729.36 |
Other instructions, including changes in the current period, reasons for the change:
56. Treasury stock
In RMB
| Item | Opening balance | Current increased | Current decreased | Ending balance |
Other explanation, including changes and reasons for changes:
57. Other comprehensive income
In RMB
| Item | Opening balance | Current Period | Ending balance | |||||
| Account before income tax in the period | Less: written in other comprehensive income in previous period and carried forward to gains and losses in current period | Less: written in other comprehensive income in previous period and carried forward to retained earnings in current period | Less : income tax expense | Belong to parent company after tax | Belong to minority shareholders after tax | |||
Other explanation, including the active part of the hedging gains/losses of cash flow transfer to initial reorganization adjustment forthe arbitraged items:
58. Reasonable reserve
In RMB
| Item | Opening balance | Current increased | Current decreased | Ending balance |
| Production safety fee | 154.21 | 920,788.68 | 920,420.34 | 522.55 |
| Total | 154.21 | 920,788.68 | 920,420.34 | 522.55 |
Other explanation, including changes and reasons for changes:
59. Surplus public reserve
In RMB
| Item | Opening balance | Current increased | Current decreased | Ending balance |
| Statutory surplus reserves | 327,140,910.28 | 23,046,690.78 | 350,187,601.06 | |
| Total | 327,140,910.28 | 23,046,690.78 | 350,187,601.06 |
Other explanation, including changes and reasons for changes:
60. Retained profit
In RMB
| Item | Current period | Last period |
| Retained profit at the end of the previous year before adjustment | 1,269,933,487.26 | 961,602,454.82 |
| Total retained profit at the beginning of the previous year before adjustment | 1,269,933,487.26 | 961,602,454.82 |
| Add: net profit attributable to shareholder of parent company | 363,501,809.52 | 308,331,032.44 |
| Less: withdrawal of legal surplus reserve | 23,046,690.78 | |
| Common stock dividends payable | 115,253,525.40 | |
| Retained profit at period-end | 1,495,135,080.60 | 1,269,933,487.26 |
Details about adjusting the retained profits at the beginning of the period:
1) The retroactive adjustments to Accounting Standards for Business Enterprises and its relevant new regulations affect the retainedprofits at the beginning of the period amounting to 0 Yuan.
2) The changes in accounting policies affect the retained profits at the beginning of the period amounting to 0 Yuan.
3) The major accounting error correction affects the retained profits at the beginning of the period amounting to 0 Yuan
4) Merge scope changes caused by the same control affect the retained profits at the beginning of the period amounting to 0 Yuan.
5) Other adjustments affect the retained profits at the beginning of the period amounting to 0 Yuan
61. Operating income and operating cost
In RMB
| Item | Current period | Last period | ||
| Income | Cost | Income | Cost | |
| Main business | 11,051,848,153.57 | 9,951,267,980.45 | 10,747,576,698.29 | 9,686,779,830.78 |
| Other business | 8,136,182.35 | 4,039,025.44 | 11,206,139.85 | 6,854,443.43 |
| Total | 11,059,984,335.92 | 9,955,307,005.89 | 10,758,782,838.14 | 9,693,634,274.21 |
Whether implemented the new revenue standards
□Yes √No
Other explanation
62. Tax and surcharges
In RMB
| Item | Current period | Last period |
| Consumption tax | 1,054,759.39 | 2,165,312.82 |
| Urban maintenance and construction tax | 905,661.54 | 1,629,329.96 |
| House property tax | 9,130,490.81 | 8,050,618.18 |
| Use tax of land | 1,464,071.73 | 2,524,108.37 |
| Vehicle and vessel use tax | 12,208.24 | |
| Stamp duty | 1,436,656.82 | 959,970.44 |
| Other | 16,663.83 | 40,183.75 |
| Total | 14,020,512.36 | 15,369,523.52 |
Other explanation:
63. Sales expenses
In RMB
| Item | Current period | Last period |
| Labor and social security benefits | 63,227,886.99 | 64,382,900.10 |
| Rental | 7,964,035.99 | 8,600,847.41 |
| Utilities and office expenses | 6,423,386.32 | 4,423,846.48 |
| After-sale services | 5,415,990.35 | 5,381,877.15 |
| Logistics transportation fee | 72,027,183.21 | 60,230,906.69 |
| Travel expenses | 2,959,299.74 | 3,385,483.21 |
| Equivalent loss for low value perishable goods | 4,062,667.43 | 7,201,541.87 |
| Depreciation and amortization of long-term assets | 10,964,871.58 | 11,154,844.42 |
| Business hospitality | 1,210,508.19 | 1,575,490.94 |
| Advertisement charge | 812,177.09 | 547,154.17 |
| Sales commission | 360,654.27 | 3,323,497.22 |
| Port terminal fee | 37,714,735.12 | 69,833,224.80 |
| Property insurance premium | 614,149.77 | 1,070,556.38 |
| Handling charges | 19,398,184.34 | 19,398,184.34 |
| Automobile expenses | 1,264,797.18 | |
| Other | 16,237,163.67 | 13,908,901.70 |
| Total | 250,657,691.24 | 255,021,072.54 |
Other explanation:
64. Administration expenses
In RMB
| Item | Current period | Last period |
| Labor and social security benefits | 179,821,022.25 | 150,406,024.19 |
| Communication fee | 1,455,481.34 | 1,570,816.01 |
| Vehicle usage fee | 1,642,650.49 | 2,306,678.91 |
| Low-value consumables | 455,282.37 | 481,089.89 |
| Repair cost | 1,648,734.20 | 823,967.71 |
| Depreciation and amortization of long-term assets | 25,150,631.86 | 32,279,753.91 |
| Travel expenses | 2,916,317.33 | 3,200,086.74 |
| Business hospitality | 3,009,307.39 | 3,338,547.23 |
| Office expenses | 11,683,054.84 | 7,879,468.54 |
| Rental | 1,341,629.55 | 2,142,501.24 |
| Intermediary fees | 9,081,062.59 | 14,370,730.10 |
| Relocation and shutdown expenses | 3,971,983.34 | 4,908,709.05 |
| Other | 18,515,858.05 | 22,835,462.95 |
| Total | 260,693,015.60 | 246,543,836.47 |
Other explanation:
65. R&D expenses
In RMB
| Item | Current period | Last period |
| Labor and social security benefits | 7,047,609.33 | 8,050,749.76 |
| Depreciation cost | 3,038,532.74 | 1,369,522.27 |
| Office expenses | 133,060.44 | 778,680.36 |
| Travel expenses | 220,835.28 | 212,282.20 |
| Logistics consumption | 1,088,573.52 | 95,614.49 |
| Intermediary fees | 13,509.80 | |
| Maintenance and inspection fee | 642,430.88 | 92,759.15 |
| Material costs | 64,264.97 | |
| Other | 1,350,709.87 | 379,856.41 |
| Total | 13,599,526.83 | 10,979,464.64 |
Other explanation:
66. Financial expenses
In RMB
| Item | Current period | Last period |
| Interest expenses | 9,387,920.21 | 20,410,885.62 |
| Less: Interest income | 11,068,571.50 | 8,364,388.05 |
| Exchange loss | 240,479.24 | -2,516,157.85 |
| Other | 803,557.13 | 600,973.53 |
| Total | -636,614.92 | 10,131,313.25 |
Other explanation:
67. Other income
In RMB
| Sources | Current Period | Last Period |
| Amortization of deferred income (related to assets) | 4,499,225.56 | 4,949,770.34 |
| Amortization of deferred income (related to income) | 536,736.14 | 283,476.42 |
| Nanshan District independent Changxin industry development special fund support project (modern agriculture development support project) | 588,300.00 | 200,000.00 |
| Subsidy for development of West Lake Longjing tea industry | 80,000.00 |
| Subsidy for Zhejiang tea industry technology project (demonstration and promotion of West Lake Longjing green prevention and control and production technology of slimming and reducing drugs) | 150,000.00 | |
| Industrial development guiding fund | 170,697.00 | 425,763.00 |
| Employment subsidy fund | 13,950.34 | 201,886.98 |
| Supporting the ability improvement project of agricultural leading enterprises | 300,000.00 | |
| Special fund for industrial development of Futian District (support for annual and quarterly growth, headquarters identification and operation, e-commerce sales and operation) | 1,050,000.00 | 2,749,600.00 |
| 2017 e-commerce trading platform scale incentive plan | 1,000,000.00 | |
| Post stabilization subsidy | 12,140.94 | 96,450.23 |
| Support for modern agriculture project of special fund for agricultural development of Shenzhen Municipal Market Supervision Bureau in 2019 | 1,793,200.00 | |
| Award for project leading enterprises of Shenzhen market supervision and Administration Bureau | 200,000.00 | |
| Shenzhen Futian District Enterprise Development Service Center retail industry growth Award | 250,000.00 | |
| Subsidy for intermediary fees of merger and reorganization of Nanshan Economic Promotion Bureau | 738,700.00 | |
| Other | 2,444,974.26 | 464,911.16 |
| Total | 12,297,924.24 | 10,901,858.13 |
68. Investment income
In RMB
| Item | Current period | Last period |
| Long-term equity investment income measured by equity | 3,411,761.86 | -1,755,504.74 |
| Investment income from disposal of long-term equity investment | 127,368.82 | |
| Income from financial products | 6,299,093.96 | 3,029,857.89 |
| Other*1 | 450,000.00 | |
| Total | 9,838,224.64 | 1,724,353.15 |
Other explanation:
*1 The company received 450000.00 yuan of performance compensation from the minority shareholders of Guangzhou ShenbaoMendao Tea Co., Ltd., an associated company.
69. Net exposure hedge gains
In RMB
| Item | Current period | Last period |
Other explanation:
70. Income of fair value changes
In RMB
| Sources | Current Period | Last Period |
| Tradable financial assets | 41,281.76 | -474,740.24 |
| Total | 41,281.76 | -474,740.24 |
Other explanation:
71. Credit impairment loss
In RMB
| Item | Current period | Last period |
| Loss of bad debt of other account receivable | 137,829.70 | |
| Loss of bad debt of account receivable | 3,358,926.67 | |
| Total | 3,496,756.37 |
Other explanation:
72. Assets impairment loss
Whether implemented the new revenue standards
□Yes √No
In RMB
| Item | Current period | Last period |
| I. Bad debt losses | -17,933,622.38 | |
| II. Provision for falling price of inventory | -158,272,990.37 | -173,498,864.92 |
| VII. Impairment loss of fixed assets | -4,482,037.94 | |
| XII. Impairment loss of intangible assets | -3,721,498.27 | |
| Total | -158,272,990.37 | -199,636,023.51 |
Other explanation:
73. Income from assets disposal
In RMB
| Sources | Current Period | Last Period |
| Profit and loss on disposal of non current assets | -170,437.85 | 1,601,802.27 |
| Total | -170,437.85 | 1,601,802.27 |
74. Non-operating income
In RMB
| Item | Current period | Last period | Amount included in the current non-recurring profit and loss |
| Government grants | 10,238.81 | 5,000.00 | 10,238.81 |
| Income from liquidated damages | 8,647.80 | 431,861.50 | 8,647.80 |
| Other | 1,237,818.64 | 953,573.34 | 1,237,818.64 |
| Total | 1,256,705.25 | 1,390,434.84 | 1,256,705.25 |
Government grants reckoned into current gains/losses:
In RMB
| Grants | Issuing subject | Issuing cause | Property type | Whether the impact of subsidies on the current profit and loss | Whether special subsidies | Amount of this period | Amount of last period | Assets related/Income related |
Other explanation:
75. Non-operating expenditure
In RMB
| Item | Current period | Last period | Amount included in the current non-recurring profit and loss |
| External donations | 2,138,196.59 | 99,485.68 | 2,138,196.59 |
| Penalty expenses (and liquidated damages) | 1,487,782.43 | 1,071.89 | 1,487,782.43 |
| Inventory loss | 8,590.79 | 8,590.79 | |
| Loss of scrap from non-current assets | 1,546,307.69 | 393,959.39 | 1,546,307.69 |
| Tax overdue fine | 50.03 | 23,243.76 | 50.03 |
| Compensation | 30,371.37 | 2,257,706.50 | 30,371.37 |
| Other | 590,007.88 | 490,981.21 | 590,007.88 |
| Total | 5,801,306.78 | 3,266,448.43 | 5,801,306.78 |
Other explanation:
76. Income tax expense
(1) Income tax expense
In RMB
| Item | Current period | Last period |
| Current income tax expenses | 33,845,702.24 | 15,461,101.10 |
| Deferred income tax expenses | 10,667,197.47 | 3,027,764.24 |
| Total | 44,512,899.71 | 18,488,865.34 |
(2) Adjustment process of accounting profit and income tax expenses
In RMB
| Item | Current Period |
| Total profit | 429,029,356.18 |
| Income tax expenses calculated by statutory tax rate | 107,257,339.05 |
| Impact from different tax rate apply with the subsidiary | -1,913,923.60 |
| Effect of adjusting income tax in the previous period | 5,760,823.90 |
| Impact of non taxable income | -185,668,765.06 |
| Impact on cost, expenses and losses that unable to deducted | 42,211,788.22 |
| Impact of the deductible loss on deferred income tax assets not recognized in the prior period of use | -194,669.77 |
| Unrecognized impacts of deductible temporary differences or deductible losses on deferred income tax assets in the period | 78,082,471.74 |
| Impact on R&D costs deduction | -1,022,164.77 |
| Income tax expenses | 44,512,899.71 |
Other explanation
77. Other comprehensive income
Found more in annotations
78. Annotation of cash flow statement
(1) Cash received with other operating activities concerned
In RMB
| Item | Current period | Last period |
| Intercourse funds and deposit | 315,742,774.48 | 129,048,838.74 |
| Government grants | 13,481,962.54 | 10,773,611.37 |
| Interest income | 11,068,571.50 | 7,802,888.05 |
| Other | 1,687,675.71 | 1,445,214.16 |
| Total | 341,980,984.23 | 149,070,552.32 |
Note of cash paid with other operating activities concerned:
(2) Cash paid with other operating activities concerned
In RMB
| Item | Current period | Last period |
| Intercourse funds and deposit | 345,269,655.51 | 94,186,178.56 |
| Operating daily expenses | 187,235,981.81 | 213,908,218.92 |
| Other | 1,309,829.12 | 2,872,489.04 |
| Total | 533,815,466.44 | 310,966,886.52 |
Note of cash paid with other operating activities concerned:
(3) Cash received with other investment activities concerned
In RMB
| Item | Current period | Last period |
| Performance compensation | 450,000.00 | |
| Total | 450,000.00 |
Note of cash received with other investment activities concerned:
(4) Cash paid related with investment activities
In RMB
| Item | Current period | Last period |
Note of cash paid related with investment activities:
(5) Cash received with other financing activities concerned
In RMB
| Item | Current period | Last period |
Note of cash received with other financing activities concerned:
(6) Other cash paid related with financing activities
In RMB
| Item | Current period | Last period |
| Other | 72,997.72 | |
| Total | 72,997.72 |
Note of other cash paid related with financing activities:
79. Supplementary information to statement of cash flow
(1) Supplementary information to statement of cash flow
In RMB
| Supplementary information | Current period | Last period |
| 1. Net profit adjusted to cash flow of operation activities: | -- | -- |
| Net profit | 384,516,456.47 | 320,855,724.38 |
| Add: Impairment provision for assets | 158,272,990.37 | 199,636,023.51 |
| Depreciation of fixed assets, consumption of oil assets and depreciation of productive biology assets | 75,859,013.01 | 79,619,849.04 |
| Amortization of intangible assets | 20,201,439.04 | 18,007,582.56 |
| Amortization of long-term pending expenses | 6,893,897.25 | 6,742,417.85 |
| Loss from disposal of fixed assets, intangible assets and other long-term assets (income is listed with “-”) | 170,437.85 | -1,601,802.27 |
| Losses on scrapping of fixed assets (income is listed with “-“) | 1,546,307.69 | 393,959.39 |
| Loss from change of fair value (income is listed with “-“) | -41,281.76 | 474,740.24 |
| Financial expenses (income is listed with “-”) | 9,387,920.21 | 18,627,801.26 |
| Investment loss (income is listed with “-”) | -9,838,224.64 | -1,724,353.15 |
| Decrease of deferred income tax assets (increase is listed with “-”) | 11,091,880.02 | 3,560,166.42 |
| Decrease of deferred income tax asset( (increase is listed with “-”) | -424,682.55 | -532,402.18 |
| Decrease of inventory (increase is listed with “-”) | -253,136,934.86 | -46,833,652.80 |
| Decrease of operating receivable accounts (increase is listed with “-”) | 219,606,344.91 | -308,973,425.11 |
| Increase of operating payable accounts (decrease is listed with “-”) | -430,554,982.67 | 10,851,006.44 |
| Other | -3,496,756.37 | |
| Net cash flow arising from operating activities | 190,053,823.97 | 299,103,635.58 |
| 2. Material investment and financing not involved in cash flow | -- | -- |
| 3. Net change of cash and cash equivalents: | -- | -- |
| Balance of cash at period end | 154,954,757.85 | 631,638,339.68 |
| Less: Balance of cash at year-begin | 631,638,339.68 | 544,440,739.45 |
| Net increasing of cash and cash equivalents | -476,683,581.83 | 87,197,600.23 |
(2) Net cash paid for obtaining subsidiary in the Period
In RMB
| Amount | |
| Including: | -- |
| Including: | -- |
| Including: | -- |
Other explanation:
(3) Net cash received by disposing subsidiary in the Period
In RMB
| Amount | |
| Including: | -- |
| Including: | -- |
| Including: | -- |
Other explanation:
(4) Constitution of cash and cash equivalent
In RMB
| Item | Ending balance | Opening balance |
| I. Cash | 154,954,757.85 | 631,638,339.68 |
| Including: Cash on hand | 191,650.33 | 282,322.45 |
| Bank deposit available for payment at any time | 154,658,586.69 | 631,190,032.12 |
| Other monetary fund available for payment at any time | 104,520.83 | 165,985.11 |
| III. Balance of cash and cash equivalent at period-end | 154,954,757.85 | 631,638,339.68 |
Other explanation:
80. Notes of changes of owners’ equity
Explain the name and adjusted amount in “Other” at end of last period:
81. Assets with ownership or use right restricted
In RMB
| Item | Ending book value | Reasons for restriction |
| Fixed assets | 366,455,515.01 | According to the long-term loan mortgage contract signed by Dongguan Shenliang Logistics, a subsidiary of the Company, and Agricultural Development Bank, Dongguan Logistics mortgaged the land (DFGY (2014) DT No. 6) of No. 32, Jianshe Road, Masan Village, Machong Town, Dongguan City and the grain storage and terminal facilities to be built and other buildings and structures on the ground to Agricultural Development Bank as collateral for the loan. |
| Intangible assets | 123,477,062.22 | 1. According to the loan contract of “Guangdong DG 2017 NGDZ No. 006” signed by Dongguan FoodIndustrial Park, a subsidiary of the Company, and Bank of Communications Guangdong Branch, Dongguan Food Industry Park mortgaged its two pieces of lands (DFGY (2009) DT No. 190) and (DFGY (2012) DT No. 152) to Bank of Communications Guangdong Branch as collateral for the borrowing. 2.According to the long-term loan mortgage contract signed by the Company and Dongguan Branch of Agricultural Development Bank, the Company mortgaged the land (Yue (2016) Dongguan Real Estate Property No.0028527) of lands located in Jingang South Road, Zhangpeng Village, Machong Town, Dongguan City to Dongguan Branch of Agricultural Development Bank as collateral for the loan. |
| Construction in progress | 120,065,528.37 | The reason is the same as fixed assets. |
| Total | 609,998,105.60 | -- |
Other explanation:
82. Foreign currency monetary items
(1) Foreign currency monetary items
In RMB
| Item | Ending foreign currency balance | Convert rate | Ending RMB balance converted |
| Monetary funds | -- | -- | 1,693,799.62 |
| Including: USD | 216,627.16 | 6.9762 | 1,511,234.39 |
| EURO | |||
| HKD | 203,805.88 | 0.8958 | 182,565.23 |
| Account receivable | -- | -- | 3,455,506.08 |
| Including: USD | 477,398.68 | 6.9762 | 3,330,416.08 |
| EURO | |||
| HKD | 139,640.54 | 0.8958 | 125,090.00 |
| Long-term loans | -- | -- | |
| Including: USD | |||
| EURO | |||
| HKD | |||
Other explanation:
(2) Explanation on foreign operational entity, including as for the major foreign operational entity,disclosed main operation place, book-keeping currency and basis for selection; if the book-keepingcurrency changed, explain reasons
□ Applicable √Not applicable
83. Hedging
Disclosed hedging items and relevant hedging instrument based on hedging’s category, disclosed qualitative and quantitativeinformation for the arbitrage risks:
84. Government grants
(1) Government grants
In RMB
| Category | Amount | Item | Amount reckoned into current gains/losses |
| (1) Base of further processing for tea and nature plants | 1,100,000.00 | Deferred income | 275,000.00 |
| (2) Enterprise technology center is a municipal R&D center. Subsidies for industrial technological advancement | 1,987,301.17 | Deferred income | 204,024.60 |
| (3) Project grants for years for agricultural district, Xihu Zone | 312,307.72 | Deferred income | 129,230.76 |
| (4)Key technology research and development for the preparation of high-quality aroma extracts based on the use of tea aroma precursors | 243,233.62 | Deferred income | 8,119.68 |
| (5)Key technology research and development for the preparation of high-quality aroma extracts based on the use of tea aroma precursors | 241,323.58 | Deferred income | 199,513.92 |
| (6) Finance Discount | 337,222.22 | Deferred income | 337,222.22 |
| (7) Industrialization of instant tea powder | 2,084,136.67 | Deferred income | 196,445.88 |
| (8) Grant for key technology research and industrialization of instant tea powder | 153,011.21 | Deferred income | 14,245.02 |
| (9) Special fund for the development of strategic emerging industries in Shenzhen(plant deep processing engineering) (Shen Development & Reform No. 20131601) | 3,538,892.95 | Deferred income | 351,209.08 |
| (10)Construction amount for 50 tons for clearly processing for Mingyou tea | 500,000.00 | Deferred income | 125,000.02 |
| (11) Subsidy for tea seeding of New Tea Garden in Wangkou | 46,129.96 | Deferred income | 1,109.28 |
| (12) Subsidy for supply system construction of agricultural products | 750,000.00 | Deferred income | 200,000.00 |
| (13) Grain storage project of Dongguan Shenliang Logistics Co., Ltd. - Storage A | 8,242,417.83 | Deferred income | 262,257.12 |
| (14) Phase II of grain storage project of Dongguan Shenliang Logistics Co., Ltd.- Storage B | 32,968,699.52 | Deferred income | 1,031,300.52 |
| (15) Grain, oil and food headquarters and innovative public service platform of Dongguan Shenliang Logistics Co., Ltd. | 18,000,000.00 | Deferred income | |
| (16) Special funds for intelligent upgrading and transformation of grain warehouse for the 2017 “Grain Safety Project” | 5,100,000.00 | Deferred income | |
| (17) Construction of 450000 ton silos and 60000 ton film silos -CDE warehouse. Gas storage bin | 17,491,764.71 | Deferred income | 104,117.64 |
| (18) Special fund for agricultural development of 2016- agricultural product safety testing project- capacity building of the third party inspection institution expansion evaluation | 492,000.00 | Deferred income | 164,000.00 |
| (19) Agricultural product safety testing project of the special fund for agricultural development of 2016 - Central investment fund | 1,026,000.00 | Deferred income | 342,000.00 |
| (20) Construction of O2O community sales service system for high quality grain and oil based on B2C E-commerce platform | 1,789,411.20 | Deferred income | 38,576.04 |
| (21) Industrialization of Doximi E-commerce platform | 2,813,684.01 | Deferred income | 852,589.88 |
| (22) Commercial circulation development project funding for year of 2017 | 524,000.00 | Deferred income | |
| (23) Intelligent management of grain depot based on mobile internet | 866,666.64 | Deferred income | 200,000.04 |
(24) Nanshan District
independent Changxin industrydevelopment special fundsupport project (modernagriculture developmentsupport project)
| 588,300.00 | Other income | 588,300.00 | |
| (25) Industrial development guiding fund | 170,697.00 | Other income | 170,697.00 |
| (26) Employment subsidy fund | 13,950.34 | Other income | 13,950.34 |
| (27) Special fund for industrial development of Futian District (support for annual and quarterly growth, headquarters identification and operation, e-commerce sales and operation) | 1,050,000.00 | Other income | 1,050,000.00 |
| (28) Post stabilization subsidy | 12,140.94 | Other income | 12,140.94 |
| (29) Support for modern agriculture project of special fund for agricultural development of Shenzhen Municipal Market Supervision Bureau in 2019 | 1,793,200.00 | Other income | 1,793,200.00 |
| (30) Award for project leading enterprises of Shenzhen market supervision and Administration Bureau | 200,000.00 | Other income | 200,000.00 |
| (31) Shenzhen Futian District Enterprise Development Service Center retail industry growth Award | 250,000.00 | Other income | 250,000.00 |
| (32) Subsidy for intermediary fees of merger and reorganization of Nanshan Economic Promotion Bureau | 738,700.00 | Other income | 738,700.00 |
| (33) Other government subsidies related to daily business activities | 2,444,974.26 | Other income | 2,444,974.26 |
| (34) Other government subsidies related to daily business activities | 10,238.81 | Non operating income | 10,238.81 |
| Total | 107,880,404.36 | 12,308,163.05 |
(2) Government grants rebate
□ Applicable √Not applicable
Other explanation:
85. Other
VIII. Changes of consolidation range
1. Enterprise merger not under the same control
(1) Enterprise merger not under the same control
In RMB
| Acquiree | Time point for equity obtained | Cost of equity obtained | Ratio of equity obtained | Acquired way Equity obtained way | Purchasing date | Standard to determine the purchasing date | Income of acquiree from purchasing date to period-end | Net profit of acquiree from purchasing date to period-end |
Other explanation:
(2) Combination cost and goodwill
In RMB
| Combination cost |
Determination method for fair value of the combination cost and contingent consideration and changes:
Main reasons for large goodwill resulted:
Other explanation:
(3) Identifiable assets and liability on purchasing date under the acquiree
In RMB
| Fair value on purchasing date | Book value on purchasing date | |
Determination method for fair value of the identifiable assets and liabilities:
Contingent liability of the acquiree bear during combination:
Other explanation:
(4) Gains or losses arising from re-measured by fair value for the equity held before purchasing date
Whether it is a business combination realized by two or more transactions of exchange and a transaction of obtained control rights inthe Period or not
□Yes √No
(5) On purchasing date or period-end of the combination, combination consideration or fair value ofidentifiable assets and liability for the acquiree are un-able to confirm rationally
(6) Other explanation
2. Enterprise combined under the same control
(1) Enterprise combined under the same control in the Period
In RMB
| Acquiree | Equity ratio obtained in combination | Basis of combined under the same control | Combination date | Standard to determine the combination date | Income of the combined party from period-begin of combination to the combination date | Net profit of the combined party from period-begin of combination to the combination date | Income of the combined party during the comparison period | Net profit of the combined party during the comparison period |
Other explanation:
(2) Combination cost
In RMB
| Combination cost |
Explanation on contingent consideration and its changes:
Other explanation:
(3) Book value of the assets and liability of the combined party on combination date
In RMB
| On purchasing date | At end of last period | |
Contingent liability of the combined party bear during combination:
Other explanation:
3. Reverse purchase
Basic transaction information, basis of counter purchase, whether making up business due to the assets and liability reserved by listedcompany and basis, determination of combination cost, amount and calculation on adjusted equity by equity transaction:
4. Disposal Subsidiary
Whether there is a subsidiary disposal on one time, which is loss control of rights
□Yes √No
Whether there is a subsidiary disposal by steps through multiple trading and loss control of rights in the period
□Yes √No
5. Other reasons for consolidation range changed
Consolidation scope changes caused by other reasons (eg, newly establish subsidiaries, liquidate subsidiaries, etc.) and the relatedcircumstances:
During the reporting period, the company cancelled Hangzhou Chunshi Network Technology Co., Ltd.
6. Other
IX. Equity in other entity
1. Equity in subsidiary
(1) Constitute of enterprise group
| Subsidiary | Main operation place | Registered place | Business nature | Share-holding ratio | Acquired way | |
| Directly | Indirectly | |||||
| Shenbao Huacheng | Shenzhen | Shenzhen | Manufacturing | 100.00% | Establishment | |
| Wuyuan Ju Fang Yong | Shangrao | Shangrao | Manufacturing | 100.00% | Establishment | |
| Shenbao Sanjing | Huizhou | Shenzhen | Manufacturing | 100.00% | Establishment | |
| Huizhou Shenbao | Huizhou | Huizhou | Comprehensive | 100.00% | Establishment | |
| Shenbao Property | Shenzhen | Shenzhen | Property management | 100.00% | Establishment | |
| Shenbao Industrial & Trading | Huizhou | Shenzhen | Wholesale business | 100.00% | Establishment | |
| Ju Fang Yong Holding | Hangzhou | Hangzhou | Comprehensive | 100.00% | Establishment | |
| Shenbao Technology Center | Shenzhen | Shenzhen | Development, consultant and transfer of technology | 100.00% | Establishment | |
| Fuhaitang Ecological | Hangzhou | Hangzhou | Tea planting, production and sales | 100.00% | Acquisition | |
| Chunshi Network | Hangzhou | Hangzhou | Wholesale business | 100.00% | Establishment | |
| Shenshenbao Investment | Shenzhen | Shenzhen | Investment management | 100.00% | Establishment | |
| Shenshenbao Tea Culture | Shenzhen | Shenzhen | Commerce | 100.00% | Establishment | |
| Ju Fang Yong Trading | Hangzhou | Hangzhou | Wholesale business | 60.00% | Establishment | |
| Pu'er Tea Supply Chain | Pu’er | Pu’er | Wholesale business | 100.00% | Establishment | |
| Shenbao Food | Huizhou | Huizhou | Wholesale business | 100.00% | Establishment | |
| Shenbao Rock Tea | Wuyishan | Wuyishan | Manufacturing | 100.00% | Establishment | |
| Pu’er Tea Trading Center | Pu’er | Pu’er | Service industry | 55.00% | Establishment | |
| Shenbao Tea-Shop | Shenzhen | Shenzhen | Commerce | 100.00% | Establishment | |
| Fuhaitang Catering | Hangzhou | Hangzhou | Catering | 100.00% | Establishment | |
| SZCG | Shenzhen | Shenzhen | Grain & oil trading | 100.00% | Combine under the same control | |
| Shenzhen Flour | Shenzhen | Shenzhen | Flour processing | 100.00% | Combine under the same control | |
| Hualian Grain & oil trading | Shenzhen | Shenzhen | Grain & oil trading | 100.00% | Combine under the same control | |
| Hainan Haitian | Haikou | Haikou | Feed production | 100.00% | Combine under the same control | |
| Shenliang Quality Inspection | Shenzhen | Shenzhen | Inspection | 100.00% | Combine under the same control | |
| Doximi | Shenzhen | Shenzhen | E-commerce | 100.00% | Combine under the same control |
| Cold-Chain Logistic | Shenzhen | Shenzhen | Fresh food management on-line | 100.00% | Combine under the same control | |
| Big Kitchen | Shenzhen | Shenzhen | Sales and processing of grain ,oil and products | 70.00% | Combine under the same control | |
| Shenliang Real Estate | Shenzhen | Shenzhen | Real estate development and property management | 100.00% | Combine under the same control | |
| Shenliang Property | Shenzhen | Shenzhen | Property management | 100.00% | Combine under the same control | |
| Yingkou Storage | Yingkou | Yingkou | Storage | 100.00% | Combine under the same control | |
| Dongguan Logistics | Dongguan | Dongguan | Storage, logistics | 51.00% | Combine under the same control | |
| International Food | Dongguan | Dongguan | Port operation, food production | 51.00% | Combine under the same control | |
| Dongguan Grain and Oil | Dongguan | Dongguan | Food production | 51.00% | Combine under the same control | |
| Dongguan Jinying | Dongguan | Dongguan | Feed, biofertilizer | 51.00% | Combine under the same control | |
| Shuangyashan | Shuangyashan | Shuangyashan | Construction of food base and development of related complementary facility | 51.00% | Combine under the same control | |
| Hongxinglong | Shuangyashan | Shuangyashan | Construction of food base and development of related complementary facility | 51.00% | Combine under the same control |
Explanation on share-holding ratio in subsidiary different from ratio of voting right:
Basis for controlling the invested entity with half or below voting rights held and without controlling invested entity but with overhalf and over voting rights:
Major structured entity included in consolidates statement:
Basis of termination of agent or consignor:
Other explanation:
(2) Important non-wholly-owned subsidiary
In RMB
| Subsidiary | Share-holding ratio of minority | Gains/losses attributable to minority in the Period | Dividend announced to distribute for minority in the Period | Ending equity of minority |
| Dongguan Logistics | 49.00% | 13,660,865.00 | 6,370,000.00 | 161,347,309.85 |
Explanation on holding ratio different from the voting right ratio for minority shareholders:
Other explanation:
(3) Main finance of the important non-wholly-owned subsidiary
In RMB
| Subsidiary | Ending balance | Opening balance | ||||||||||
| Current assets | Non-current assets | Total assets | Current liabilities | Non-current liabilities | Total liabilities | Current assets | Non-current assets | Total assets | Current liabilities | Non-current liabilities | Total liabilities | |
| Dongguan Logistics | 179,203,637.28 | 1,469,042,115.86 | 1,648,245,753.14 | 208,523,832.06 | 930,441,696.91 | 1,138,965,528.97 | 634,938,480.46 | 920,908,724.11 | 1,555,847,204.57 | 679,025,611.19 | 610,420,685.53 | 1,289,446,296.72 |
In RMB
| Subsidiary | Current Period | Last Period | ||||||
| Operating income | Net profit | Total comprehensive income | Cash flow from operation activity | Operating income | Net profit | Total comprehensive income | Cash flow from operation activity | |
| Dongguan Logistics | 2,104,716,248.04 | 30,329,316.32 | 30,329,316.32 | 55,873,900.07 | 2,067,066,711.86 | 29,966,638.04 | 29,966,638.04 | 225,829,600.00 |
Other explanation:
(4) Significant restrictions on the use of enterprise group assets and pay off debts of the enterprise group
(5) Financial or other supporting offers to the structured entity included in consolidated financial statementrange
Other explanation:
2. Transaction that has owners equity shares changed in subsidiary but still with controlling rights
(1) Owners equity shares changed in subsidiary
(2) Impact on minority’s interest and owners’ equity attributable to parent company
In RMB
Other explanation
3. Equity in joint venture and associated enterprise
(1) Important joint venture or associated enterprise
| Joint venture or Associated enterprise | Main operation place | Registered place | Business nature | Share-holding ratio | Accounting treatment on investment for joint venture and associated enterprise | |
| Directly | Indirectly | |||||
| Zhuhai Hengxing Feed Industrial Co., Ltd. | Zhuhai | Zhuhai | Aquatic fee and animal fee | 40.00% | Equity | |
| Shenliang Intelligent Wulian Equity Investment Fund (Shenzhen) Partnership Enterprise (Limited) | Shenzhen | Shenzhen | Equity investment; investment consultant | 49.02% | Equity | |
Holding shares ratio different from the voting right ratio:
Has major influence with less 20% voting rights hold, or has minor influence with over 20% (20% included) voting rights hold:
(2) Main financial information of the important joint venture
In RMB
| Ending balance/Current Period | Opening balance/Last Period | |
Other explanation
(3) Main financial information of the important associated enterprise
In RMB
| Ending balance/Current Period | Opening balance/Last Period | |||
| Zhuhai Hengxing Feed Industrial Co., Ltd. | Shenliang Intelligent Wulian Equity Investment Fund (Shenzhen) Partnership Enterprise (Limited) | Zhuhai Hengxing Feed Industrial Co., Ltd. | Shenliang Intelligent Wulian Equity Investment Fund (Shenzhen) Partnership Enterprise (Limited) | |
| Current assets | 74,426,214.45 | 21,145,350.77 | 84,582,623.37 | 47,135,530.32 |
| Non current assets | 31,819,375.02 | 31,759,785.55 | 35,353,460.47 | |
| Total Assets | 106,245,589.47 | 52,905,136.32 | 119,936,083.84 | 47,135,530.32 |
| Current liabilities | 26,931,271.22 | 45,953,143.23 | ||
| Non current liabilities | 629,319.69 | 612,782.33 | ||
| Total liabilities | 27,560,590.91 | 46,565,925.56 | ||
| Shareholders' equity attributable to the parent company | 78,684,998.56 | 52,905,136.32 | 73,370,158.28 | 47,135,530.32 |
| Share of net assets calculated by shareholding ratio | 31,473,999.42 | 25,934,097.82 | 29,348,063.31 | 23,105,836.96 |
| Adjustment items | 162,707.80 | -174.47 | 162,707.80 | -174.47 |
| --Others | 162,707.80 | -174.47 | 162,707.80 | -174.47 |
| Book value of equity investment in associated enterprises | 31,636,707.22 | 25,933,923.35 | 29,510,771.11 | 23,105,662.49 |
| Business income | 519,490,991.03 | 530,961,192.22 | ||
| Net profit | 5,314,840.28 | 5,769,606.00 | 5,671,481.28 | -3,864,469.68 |
| Total comprehensive income | 5,314,840.28 | 5,769,606.00 | 5,671,481.28 | -3,864,469.68 |
Other explanation
(4) Financial summary for non-important Joint venture and associated enterprise
In RMB
| Ending balance/Current Period | Opening balance/Last Period | |
| Joint venture: | -- | -- |
| Amount based on share-holding ratio | -- | -- |
| Associated enterprise: | -- | -- |
| Total book value of investment | 15,790,681.53 | 18,383,233.21 |
| Amount based on share-holding ratio | -- | -- |
| -- Net profit | -1,542,435.11 | -2,292,467.54 |
| -- Total comprehensive income | -1,542,435.11 | -2,292,467.54 |
Other explanation
(5) Major limitation on capital transfer ability to the Company from joint venture or associated enterprise
(6) Excess loss occurred in joint venture or associated enterprise
In RMB
| Joint venture/Associated enterprise | Cumulative un-recognized losses | Un-recognized losses not recognized in the Period (or net profit enjoyed in the Period) | Cumulative un-recognized losses at period-end |
| Changzhou Shenbao Chacang E-business Co., ltd. | 8,367,950.07 | 282,475.61 | 8,650,425.68 |
| Shenzhen Shichumingmen Restaurant Management Co., Ltd. | 3,491,151.31 | 324,443.70 | 3,815,595.01 |
Other explanation
(7) Unconfirmed commitment with joint venture investment concerned
No unconfirmed commitment with joint venture investment concerned in the period.
(8) Intangible liability with joint venture or affiliates investment concerned
No intangible liability with joint venture or affiliates investment concerned in the period.
4. Major conduct joint operation
| Name | Main place of operation | Registration place | Business nature | Shareholding ratio/ shares enjoyed | |
| Directly | In-directly | ||||
Share-holding ratio or shares enjoyed different from voting right ratio:
If the co-runs entity is the separate entity, basis of the co-runs classification:
Other explanation
5. Structured body excluding in consolidate financial statement
Explanation:
6. Other
X. Disclosure of risks relating to financial instruments
Our business operation makes the Company exposed to various financial risks: credit risk, liquidity risk andmarket risk (mainly refers to exchange risk and interest risk). The general risk management policy of theCompany is to minimize potential negative effects on our financial performance in view of the unforeseeablefinancial market.
(i) Credit riskCredit risk refers to the risk of a financial loss caused by the counter party’s failure to fulfill its contractualobligations. The credit risk mainly arises from monetary funds, account receivable and other account receivable soon. The management has established adequate credit policies and continues to monitor exposure of these creditrisks.The monetary funds held by the Company are mainly deposited in state-controlled banks and other large andmedium-sized commercial banks and other financial institutions. The management believes that these commercialbanks have high reputation and asset status and have no major credit risk, and won't create any major lossescaused by the breach of contract of the opposite side.For trade receivables and other receivables, the Company establishes relevant policies to control exposure ofcredit risk. The Company appraises customers’ credit quality based on their financial position, possibility toobtain guarantee from third parties, credit history and other factors such as prevailing market conditions, and setcorresponding credit terms. Customers’ credit history would be regularly monitored by the Company. For thosecustomers who have bad credit history, the Company will call collection in written form, shorten credit term orcancel credit term to ensure its overall credit risk is under control.Up to 31
st
December 2019, the top five client’s account receivable takes 50.10% in total account receivable of theCompanyThe maximum credit risk exposure equals to the carrying value of each financial asset in balance sheet (includingderivative financial instrument). The Company has not provided any guarantee which would otherwise make theCompany exposed to credit risk except for the guarantee for financial carried in Note Ⅻ.
(ii) Liquidity riskLiquidity risk represents the possibility that the Company is not able to acquire sufficient fund to satisfy businessrequirement, settle debt when it is due and perform other obligation of payment.The finance department continues to monitor capital requirement for short and long term, to ensure adequate cashreserve. In addition, it continues to monitor whether borrowing agreement is complied with, and seeks forcommitment from major financial institutions for provision of sufficient back-up fund, so as to satisfy capitalrequirement in a short and long term.
(iii) Market risk
1. Exchange risk
The major operation of the Company is located in the PRC, and its major operation is settled in Renminbi.However, there is also exchange risk in respect of the recognized foreign currency assets and liabilities and futureforeign currency transactions which are mainly denominated in US dollar. Our finance department is responsiblefor monitoring scale of foreign currency assets and liabilities and foreign currency transactions, to minimize itsexposure to exchange risks. In reporting period, the Company had signde any forward exchange contract ormonetary exchange contract.The foreign exchange risks faced by the company mainly come from financial assets and financial liabilitiesdenominated in us dollars. The amount of foreign currency financial assets and foreign currency financialliabilities converted into RMB is shown in this report.
2. Interest risk
Our interest risk mainly arises from bank borrowings. Financial liabilities at floating rate expose the Company tocash flow interest risk, and financial liabilities at fixed rate expose the Company to fair value interest risk. TheCompany determines the respective proportion of contracts at fixed rate and floating rate based on prevailingmarket conditions.The financial department of the Company continuously monitors the interest rate of the Company. The rise ininterest rates will increase the cost of new interest-bearing debts and the interest expense of the Company’s unpaidinterest-bearing debts with floating interest rates, management will make timely adjustments based on the latestmarket conditions.
3. Price risk
The Company purchases and sells products at market prices, therefore it is affected by fluctuation of these prices.
XI. Disclosure of fair value
1. Ending fair value of the assets and liabilities measured by fair value
In RMB
| Item | Ending fair value | |||
| First-order | Second-order | Third-order | Total | |
| I. Sustaining measured by fair value | -- | -- | -- | -- |
| 1.Financial assets measured by fair value and with variation reckoned into current gains/losses | 1,166,209.72 | 1,166,209.72 | ||
| (2) Equity instrument investment | 1,166,209.72 | 1,166,209.72 | ||
| Other non current financial assets | 57,500.00 | 57,500.00 | ||
| II. Non-persistent measure | -- | -- | -- | -- |
2. Recognized basis for the market price sustaining and non-persistent measured by fair value onfirst-order
The financial assets measured at fair value and recorded in the current profit and loss are the stocks of the company listed on theshenzhen stock exchange held by the company, and the fair value of the equity instrument investment is based on the closing price onDecember 31.
3. Valuation technique and qualitative and quantitative information on major parameters for the fair valuemeasure sustaining and non-persistent on second-order
4. Valuation technique and qualitative and quantitative information on major parameters for the fair valuemeasure sustaining and non-persistent on third-order
5. Adjustment information and sensitivity analysis of unobservable parameters for the fair value measuresustaining and non-persistent on third-order
6. Sustaining items measured by fair value, as for the conversion between at all levels, reasons forconversion and policy for conversion time point
7. Changes of valuation technique in the Period
8. Financial assets and liability not measured by fair value
9. Other
For other non-current financial assets held, the company measures the investment cost as a reasonable estimate of fair value becausethe operating environment, operating conditions and financial conditions of the invested enterprise have not changed significantly.XII. Related party and related transactions
1. Parent company
| Parent company | Registration place | Business nature | Registered capital | Ratio of shareholding on the Company | Ratio of voting right on the Company |
| Shenzhen Food Group Co., Ltd. | Shenzhen | Investing in industry, development, operation and management of the own property | 5 billion yuan | 63.79% | 63.79% |
Explanation on parent company of the enterprise
Ultimate controller of the Company is Shenzhen Municipal People’s Government State-Owned Assets Supervision andAdministration Commission.Other explanation:
2. Subsidiary
Subsidiary of the Company found more in Note "1. Equity in subsidiaries" of Note IX-Equity in other entity
3. Joint venture and associated enterprise
Joint Venture of the Company found more in Note "3. Equity in joint arrangement or joint venture" of Note IX-Equity in other entityOther cooperative enterprise and joint venture that have related transaction with the Company in the Period or occurred in previousperiod:
| Joint venture/Associated enterprise | Relationship |
| Shenzhen Duoxi Equity Investment Fund Management Co., Ltd. | Joint venture of the company |
| Shenzhen Shenyuan Data Technology Co., Ltd. | Joint venture of the company |
| Shenzhen Shichumingmen Catering Management Co., Ltd. | Joint venture of the company |
Other explanation
4. Other related party
| Other related party | Relationship with the Enterprise |
| Shenzhen Agricultural Products Co., Ltd | Shareholder of the Company, subsidiary of the actual controller, controlled by the same ultimate controlling party |
| Zhanjiang Haitian Aquatic Feed Co., Ltd | Subsidiary of the actual controller, Controlled by the same ultimate controlling party |
| Dongguan Fruit and Vegetable Non-staple Food Market Co., Ltd | Minority shareholder of controlling subsidiary |
| Taizhong Agricultural Co., Ltd | Subsidiary of the actual controller, Controlled by the same ultimate controlling party |
| Shenzhen Investment Holding Co., Ltd | Former shareholder of the Company, Controlled by the same ultimate controlling party |
| Shenzhen Investment Management Co., Ltd | Former shareholder of the Company, Controlled by the same ultimate controlling party |
| Fujian Wuyishan Yuxing Tea Co., Ltd*1 | Minority shareholder of former controlling subsidiary |
| Shenzhen Fruits and Vegetables Trading Co., Ltd | Wholly-owned subsidiary of Shenzhen Agricultural Products Co., Ltd |
| Shenzhen Higreen International Agricultural Products Logistic Management Co., Ltd | Controlling subsidiary of Shenzhen Agricultural Products Co., Ltd |
| Zhanjiang Changshan (Shenzhen) Ecological Aquaculture Co., Ltd | Has the same parent company |
| Shenzhen Yixin Investment Co., Ltd | Former shareholder of Shenzhen Agricultural Products Co., Ltd, Controlled by the same ultimate controlling party |
| Shenzhen Shenliang Cold Transport Co., Ltd. | Holding subsidiary of the company's associated enterprise |
Other explanation
5. Related transaction
(1) Goods purchasing, labor service providing and receiving
Goods purchasing/labor service receiving
In RMB
| Related party | Related transaction content | Current Period | Approved transaction limit | Whether more than the transaction limit (Y/N) | Last Period |
| Shenzhen Shenyuan Data Technology Co., Ltd. | Information software development | 14,950,911.00 |
Goods sold/labor service providing
In RMB
| Related party | Related transaction content | Current Period | Last Period |
| Shenzhen Shichumingmen Catering Management Co., Ltd. | Grain and oil sales | 59.60 | 246.15 |
| Shenzhen Higreen International Agricultural Products Logistic Management Co., Ltd | Sales of tea | 6,557.52 | |
| Shenzhen Duoxi Equity Investment Fund Management Co., Ltd. | Sales of tea | 3,888.50 | |
| Shenzhen Shenyuan Data Technology Co., Ltd. | Sales of tea | 13,769.92 | |
| Shenzhen Agricultural Products Co., Ltd | Grain and oil sales | 257,685.89 | |
| Shenzhen Food Group Co., Ltd. | Grain and oil sales | 19,650.58 | |
| Dongguan Fruit Vegetable Non-staple Food Trading Market Co., Ltd. | Grain and oil sales | 9,318.19 | |
| Shenzhen Shenyuan Data Technology Co., Ltd. | Grain and oil sales | 31,608.31 | |
| Shenzhen Shenliang Cold Transport Co., Ltd. | Warehousing Services | 659,146.82 | |
| Shenzhen Food Group Co., Ltd. | Asset Management | 2,204,153.02 |
Explanation on goods purchasing, labor service providing and receiving
(2) Related trusteeship management/contract & entrust management/ outsourcingTrusteeship management/contract:
In RMB
| Client/Contract-out party | Entrusting party/Contractor | Trustee/assets contract | Trustee /start | Trustee /ends | Managed earnings /pricing of the contract earnings | Managed earnings confirmed in the period / contract earnings |
Related managed/contract:
Entrusted management/outsourcing:
In RMB
| Client/Contract-out party | Entrusting party/Contractor | Trustee/assets contract | Trustee /start | Trustee /ends | Managed earnings /pricing of the contract earnings | Managed earnings confirmed in the period / contract earnings |
Related management/ outsourcing:
(3) Related lease
As a lessor for the Company:
In RMB
| Lessee | Assets type | Lease income in recognized in the Period | Lease income in recognized last the Period |
| Shenzhen Shichumingmen Catering Management Co., Ltd. | Operating site | 1,105,650.14 | 1,006,451.61 |
| Shenzhen Food Group Co., Ltd. | Operating site | 160,571.43 | |
| Shenzhen Shenyuan Data Technology Co., Ltd. | Operating site | 288,066.67 |
As lessee:
In RMB
| Lessor | Assets type | Lease income in recognized in the Period | Lease income in recognized last the Period |
| Shenzhen Investment Holdings Co., Ltd. | Operating site | 2,183,266.63 | 2,311,760.06 |
| Shenzhen Food Group Co., Ltd. | Warehouse leasing | 28,434,200.00 | 28,434,200.00 |
| Shenzhen Food Group Co., Ltd. | Office space | 667,290.27 | 345,210.00 |
Explanation on related lease
(4) Related guarantee
As guarantor
In RMB
| Secured party | Guarantee amount | Guarantee start date | Guarantee expiry date | Whether the guarantee has been fulfilled |
| Changzhou Shenbao Chacang E-business Co., ltd. | 5,,000,000.00 | 2011-12-20 | Until the principal and interest of the loan are settled | No |
As secured party
In RMB
| Guarantor | Guarantee amount | Guarantee start date | Guarantee expiry date | Whether the guarantee has been fulfilled |
| Dongguan Fruit Vegetable Non-staple Food Trading Market Co., Ltd. | 90,260,157.96 | 2016-12-27 | 2021-12-26 | No |
| Dongguan Fruit Vegetable Non-staple Food Trading Market Co., Ltd. | 251,655,864.84 | 2018-07-27 | 2032-08-29 | No |
| Dongguan Fruit Vegetable Non-staple Food Trading Market Co., Ltd. *1 | 93,621,689.35 | 2019-05-09 | No | |
| Dongguan Houjie Xunda Industrial Co., Ltd. | 7,368,800.69 | 2019-01-25 | 2031-01-24 | No |
| Dongguan Fruit Vegetable Non-staple Food Trading Market Co., Ltd. | 7,368,800.69 | 2019-01-25 | 2031-01-24 | No |
Explanation on related guarantee*1 The maturity date of the related guarantee is two years after the expiry date or two years after the refund date.
(5) Related party’s borrowed funds
In RMB
| Related party | Borrowing amount | Starting date | Maturity date | Note |
| Borrowing |
| Lending |
(6) Related party’s assets transfer and debt reorganization
In RMB
| Related party | Related transaction content | Current Period | Last Period |
(7) Remuneration of key manager
In RMB
| Item | Current Period | Last Period |
(8) Other related transaction
6. Receivable and payable of related party
(1) Receivable item
In RMB
| Item Name | Related party | Ending balance | Opening balance | ||
| Book balance | Bad debt provision | Book balance | Bad debt provision | ||
| Other account receivable | Shenzhen Yixin Investment Co., Ltd. | 10,431,232.87 | 5,215,616.44 | ||
| Other account receivable | Changzhou Shenbao Chacang E-business Co., ltd. | 24,350,611.65 | 21,803,513.37 | 20,413,947.34 | 17,819,381.02 |
| Other account receivable | Shenzhen Shichumingmen Catering Management Co., Ltd. | 1,382,651.77 | 469,107.98 | 1,429,898.28 | 275,978.87 |
| Other account receivable | Shenzhen Higreen International Agricultural Products Logistic Management Co., Ltd | 50,000.00 | |||
| Other account receivable | Shenzhen Shenliang Cold Transport Co., Ltd. | 3,831.12 | |||
| Other account receivable | Shenzhen Investment Holdings Co., Ltd. | 415,644.52 | 433,469.10 |
(2) Payable item
In RMB
| Item Name | Related party | Ending book balance | Opening book balance |
| Dividend payable | Shenzhen Investment Management Co., Ltd | 2,690,970.14 | 2,690,970.14 |
| Other account payable | Shenzhen Fruits and Vegetables Trading Co., Ltd | 245,714.59 | |
| Other account payable | Shenzhen Food Group Co., Ltd. | 219,472.47 | 53,470,612.86 |
| Other account payable | Shenzhen Duoxi Equity Investment Fund Management Co., Ltd. | 41,486.00 | 41,486.00 |
| Other account payable | Zhanjiang Changshan (Shenzhen) Ecological Aquaculture Co., Ltd | 7,988,954.17 | 7,967,662.50 |
| Other account payable | Shenzhen Investment Management Co., Ltd | 3,510,297.20 | 3,510,297.20 |
| Other account payable | Shenzhen Shichumingmen Catering Management Co., Ltd. | 184,275.00 | |
| Other account payable | Shenzhen Shenliang Cold Transport Co., Ltd. | 2,790.00 |
7. Related party commitment
8. Other
XIII. Share-based payment
1. Overall situation of share-based payment
□ Applicable √Not applicable
2. Share-based payment settled by equity
□ Applicable √Not applicable
3. Share-based payment settled by cash
□ Applicable √Not applicable
4. Modification and termination of share-based payment
5. Other
XIV. Commitment or contingency
1. Important commitments
Important commitments on balance sheet dateThe Company has no important commitments that need to disclosed up to 31 December 2019.
2. Contingency
(1) Contingency on balance sheet date
(1) Disputes over the loan contracts between Changzhou Shenbao Chacang E-commence Co., Ltd., the Companyand Shenzhen Agricultural Products Financing Guarantee Co., Ltd.
On July 15, 2016, Shenzhen Agricultural Products Financing Guarantee Co., Ltd. (hereinafter referred to asAgricultural Products Guarantee Company) submitted a “Civil Appeal” to the People’s Court of Futian District,Shenzhen, requesting Changzhou Shenbao Chacang E-commence Co., Ltd. (hereinafter referred to as ChangzhouShenbao Chacang Company)to repay the loan principal amount of RMB 5,000,000.00, the interest of RMB389,968.52, and the interest penalty of RMB 3,200,271.79 (the interest penalty was temporarily calculated to June30, 2016, which shall be actually calculated to the date of the full repayment of the borrowing); and pay thecompensation of RMB 100,000.00 (5 million Yuan × 2%); two items in total were RMB 8,690,240.31; theCompany undertook joint liability for the loan of RMB 5,000,000.00.
On May 31, 2017, Shenzhen Futian District Court made the first-instance judgment and ruled ChangzhouShenbao Chacang Company to repay the loan principal of RMB 5 million and the interest and interest penalty, theCompany did not need to undertake joint liability for the loan of RMB 5 million of Changzhou Shenbao ChacangCompany. On July 4, 2017, the Agricultural Products Guarantee Company filed an appeal, on October 13, 2017,and Shenzhen Intermediate People’s Court held the second instance hearing. On April 26, 2019, the ShenzhenIntermediate People's Court made a civil judgment (Civil Judgment (2017) Yue 03 Min Zhong No. 12296), andjudged Shenzhen Shenbao Industrial Co., Ltd. (now renamed as Shenzhen Cereals Holdings Co., Ltd.) toundertake a joint and several liability for the of Changzhou Shenbao Chacang E-Commerce Co., Ltd. within thescope of 3.5 million yuan. Shenzhen Shenbao Industrial Co., Ltd. (now renamed as Shenzhen Cereals HoldingsCo., Ltd.) has the right to claim compensation from Changzhou Company after the payment. Currently, the
judgment has taken effect.
As of December 31, 2019, the company confirmed the estimated debt of 3.5 billion yuan.
(2) Contract disputes between the Company’s subsidiaries, Mount Wuyi Shenbao Rock Tea Co., Ltd. (hereinafterreferred to as Wuyishan Rock Tea Company) and Hangzhou Ju Fang Yong Holding s Co., Ltd. (hereinafterreferred to as Jufangyong Company), and Wuyishan Jiuxing Tea Co., Ltd. (hereinafter referred to as JiuxingCompany), Fujian Wuyishan Yuxing Tea Co., Ltd. (hereinafter referred to as Yuxing Company), Xingjiu Tea Co.,Ltd., Chen Yuxing, Chen Guopeng
On September 22, 2017, Jufangyong Company, Xingjiu Tea Co., Ltd., Yuxing Company, Chen Yuxing and ChenGuopeng signed an “Formal Agreement on the Separation of Fujian Wuyishan Shenbao Yuxing Tea Co., Ltd.”,according to the separation agreement: the original Shenbao Yuxing Company was separated, after the separation,Jufangyong Company held 100% equity of the newly established company (i.e. Shenbao Rock Tea Company),and Yuxing Company and Xingjiu Tea Company jointly held 100% equity of the surviving company (JiuxingCompany); Shenbao Rock Tea Company got receivables of RMB 7,273,774.01, which was guaranteed by JiuxingCompany to achieve RMB 2 million within one year after separation and the remaining amount would be returnedwithin 2 years. Chen Yuxing and Chen Guopeng, as the actual controllers of Jiuxing Company, Yuxing Companyand Xingjiu Tea Company, assumed joint responsibility for the joint guarantee to Shenbao Rock Tea Company andJufangyong Company for all the obligations and responsibilities stipulated in the “Separation Agreement”.
As of September 22, 2018, the time limit stipulated in the “Separation Agreement” for the realization of fourreceivables had expired, and Shenbao Rock Tea Company still had RMB 5,212,301.40 unrecovered. OnDecember 6, 2018, Shenbao Rock Tea Company and Hangzhou Jufangyong Company applied for arbitration toShenzhen Court of International Arbitration (Shenzhen Arbitration Commission) for the above matters, andrequested Jiuxing Company to pay RMB 5,272,934.01 to Shenbao Rock Tea Company, and requested YuxingCompany, Xingjiu Tea Company, Chen Yuxing and Chen Guopeng to assume joint liability.
On April 18, 2019, Shenzhen International Arbitration Court heard the arbitration case in court. Since relevantmatters are still to be determined and ascertained, the two parties concerned shall provide supplementary defensematerials to the court. Currently, the case has not yet been arbitrated by Shenzhen International Arbitration Court.
As of the date of approval of the financial statements, the Shenzhen Arbitration Commission has not yet determinedthe arbitrator and the date of the hearing.As of December 31, 2019, the company has accrued RMB 4,469,493.65 bad debt provision.
(3)Disputes on mung bean business between Shenzhen Cereals Group (SZCG) and Jilin Tongyu County ShengdaCompanyIn August 2007, Shenzhen Cereals Group and Tongyu County Shengda Grain and Oil Trading Co., Ltd.(hereinafter referred to as Shengda Company) signed the “Mung Bean Entrusted Acquisition, Processing andStorage Contract”, from October 2007 to May 2008, totally 4,918.00 tons of mung beans were acquired, theCompany paid payment for goods of RMB 30 million. According to the contract, after the completion of theentrusted acquisition, Shengda Company has the obligations to assist in the sale of goods and buy-back. ShengdaCompany did not fully fulfill its obligations, and Shenzhen Cereals Group also carried out various forms ofcollection. In September 2010, Shenzhen Cereals Group sued Shengda Company for repayment of its arrears andinterest. The two parties reached an accommodation during the court trial, and Futian District People’s Court ofShenzhen issued a “Paper of Civil Mediation”, but Shengda Company did not fully fulfill the repaymentobligation, Shenzhen Cereals Group has applied to the court for enforcement. As of 30
th
June 2019, the bookreceivables amounted to RMB 5,602,468.81, and the execution of remaining funds has large uncertainties. TheCompany has fully made provision for bad debts of RMB 5,602,468.81.
(4) Contract disputes among Shenzhen Cereals Group, Hualian Grain and Oil, Guangzhou Jinhe Feed Co., Ltd.and Huang Xianning Import AgentFrom October 2005 to January 2007, Shenzhen Cereals Group, Hualian Grain and Oil, and Guangzhou Jinhe FeedCo., Ltd. (hereinafter referred to as Guangzhou Jinhe Company) signed 20 “Import Agent Contracts”, agreed thatShenzhen Cereals Group and Hualian Grain and Oil agent Guangzhou Jinhe Company to import Peruvianfishmeal. In August 2007, Hualian Grain and Oil, Guangzhou Jinhe Company and Huangxianning signed the“Guarantee Contract”, agreed that Huangxianning would guarantee that all payables of Guangzhou JinheCompany under the trade contracts signed by Hualian Grain and Oil and Guangzhou Jinhe Company would bepaid on time. Later, due to Guangzhou Jinhe Company’s insufficient payment of goods and import agency fees,Shenzhen Cereals Group and Hualian Grain and Oil filed a lawsuit to Futian District People’s Court of Shenzhen.
On February 16, 2015, the Futian District People’s Court of Shenzhen made the first-instance judgment ([2014]SFFMECZ No. 786), and sentenced Guangzhou Jinhe Company to pay RMB 10,237,385.74 to Shenzhen CerealsGroup and Hualian Grain and Oil, and bear the case acceptance fee of RMB 83,224.00; Huang Xianning does notneed to bear the joint and several liability.
As Guangzhou Jinhe Company refused to accept the above first-instance judgment, it lodged an appeal to theShenzhen Intermediate People’s Court, claiming that the prosecution of Shenzhen Cereals Group and HualianGrain and Oil had exceeded the time limit for litigation. On March 30, 2017, the Shenzhen Intermediate People’sCourt made the second-instance judgment (Civil Judgment [2015] SZFSZZ No.1767), and the judgment rejectedGuangzhou Jinhe Company’s appeal and upheld the original judgment.
The case is still in enforcement, and the other party has not paid any money, Shenzhen Cereals Group has madeprovision for bad debts in proportion to 100% of the accounts receivable of RMB 10,455,600 of Guangzhou JinheCompany.
According to the “Commitment Letter of Shenzhen Fude State-owned Capital Operation Co., Ltd.(named asShenzhen Food Group Co., Ltd. now) on the Pending Litigation of Shenzhen Cereals Group Co., Ltd.”, IfShenzhen Cereals Group Co., Ltd. and its holding subsidiaries suffer any claims, compensation, losses orexpenses due to the contract disputes with Guangzhou Jinhe Feed Co., Ltd. and Huangxianning Import Agent,Shenzhen Fude State-owned Capital Operation Co., Ltd. will assume the compensation or loss caused by thelawsuits.
(5) Contract disputes between Hualian Grain and Oil Company and Zhuhai Doumen Huabi Feed FactoryOn December 9, 2004, Hualian Grain and Oil Company signed a purchases and sales contract with ZhuhaiDoumen Huabi Feed Factory to sell 2,000.00 tons of corn, with payment for goods of RMB 2,396,300, but thepayment has not been taken back. In April 2005, Hualian Grain and Oil Company discovered that Zhuhai DoumenHuabi Feed Factory had basically stopped production and the goods were transferred, the legal representative,Liang Dongxing, had fled. On July 2, 2005, the public security organ arrested Liang Dongxing. Hualian Companyhas prosecuted him and won in the lawsuit, and the lawsuit has been settled and in enforcement.
As of 31 December 2019, Hualian Grain and Oil Company had received RMB 2,396,300 from Zhuhai DoumenHuabi Feed Factory, Hualian Grain and Oil Company had made 100% of bad debt provision for this amount.
(6) Contract disputes between Hualian Grain and Oil Company and Foshan Huaxing Feed FactoryIn August and October 2007, Hualian Grain and Oil Company sold goods to Foshan City Shunde District HuaxingFeed Factory, and received a total of RMB 2,958,600 of commercial acceptance bills. Due to the company’soverdue payment, Hualian Grain and Oil Company filed a lawsuit with the People’s Court of Shunde District,Foshan City on October 29, 2007, requesting Foshan City Shunde District Huaxing Feed Factory to repay thepayment for goods and pay the corresponding interests. From June to July 2011, totally took back the company’sbankruptcy property settlement of RMB 1,638,900. As of 31 December 2018, Hualian Grain and Oil Companyhad receivables of RMB 1,319,700 from Foshan City Shunde District Huaxing Feed Factory, and it had made 100%of bad debt provision for this amount.
(7)Contract disputes between Hualian Grain and Oil Company and Liangshuntong CompanyOn 15 November 2019, Dalian Liangshuntong Supply Chain Management Co., Ltd. (hereinafter referred to as
“Liangshuntong Company”) filed a civil lawsuit with Shenzhen Futian District People’s Court (hereinafterreferred to as “Futian Court”) on the grounds of contract dispute. Shenzhen Hualian Grain & Oil Trade Co., ltd.(hereinafter referred to as “Hualian Grain and Oil Company”) is required to return the deposit of RMB 30 million,interest of RMB 652500, corn supply chain service fee of RMB 500000 and settlement of RMB 2.2592 million , atotal of RMB 33.4117 million.
On 20 November 2019, Hualian Grain and Oil Company countersued the Liangshuntong Company with theappeals as: 1. order Liangshuangtong Company to pay the profit and loss difference of the purchase and salecontract to Hualian Grain and Oil Company and the whole expenses arising from corn business RMB26,504,205.13 as well as the capital cost RMB 10,336,285.11 (the capital cost shall be calculated until the actualdate of payment and is temporarily calculated until November 25, 2019), RMB 36,840,490.24 in total; 2. orderthat the costs of the case be borne by Liangshuntong Company, the case is currently in session.
On 10 December 2019, Hualian Grain and Oil Company filed a lawsuit to Futian Court with request as: 1. orderLiangshuangtong Company to pay the profit and loss difference of the purchase and sale contract to Hualian Grainand Oil Company and the whole expenses arising from corn business RMB 461,856.61 and capital cost of RMB4,030,008.42 (the capital cost shall be calculated until the actual date of payment and is temporarily calculateduntil 10 December, 2019). RMB 4,491,865.03 in total; 2. order that the costs of the case be borne byLiangshuntong Company, the case is currently in session.
(2) If the Company has no important contingency need to disclosed, explain reasonsThe Company has no important contingency that need to disclose.
3. Other
XV. Events after balance sheet date
1. Important non adjustment matters
In RMB
| Item | Content | Impact on financial status and operation results | Reasons of fails to estimate the impact |
2. Profit distribution
In RMB
| Profit or dividend to be distributed | 230,507,050.80 |
3. Sales return
4. Other events after balance sheet date
Evaluation of the COVID-19 epidemicSince the outbreak of pneumonia caused by novel coronavirus infection (hereinafter referred to as “Pneumonia”)national wide in January 2020, the prevention and control of Pneumonia is continuing throughout the county.
The Pneumonia may affect the normal production and operation of the company to a certain extent, which willdepend on the duration of the epidemic prevention and control situation and the implementation of various controlpolicies.
In order to fight against the epidemic of Pneumonia, the company and its subordinate units took full actions toresolutely implemented the relevant decisions and plans made by the CPC central committee, the sate council andthe HQ of the Company and the regions where they work to prevent and control the epidemic, improve theprevention and control mechanism and the arrangement of measures, take multiple measures in line with theactual conditions of all subordinate units, and resolutely ensure the smooth operation of production and operationof enterprises; the Company actively promotes the resumption of production, in accordance with the establishedannual strategy and business plan to carry out the wors.
The company will continue to pay close attention to the development of the Pneumonia epidemic, evaluate andactively respond to its impact on the Company’s financial status and operating results.XVI. Other important events
1. Previous accounting errors collection
(1) Retrospective restatement
In RMB
| Content | Treatment procedure | Items impact during vary comparative period | Accumulated impact |
(2) Prospective application
| Content | Approval procedure | Reasons |
2. Debt restructuring
3. Assets exchange
(1) Exchange of non-monetary assets
(2) Other assets exchange
4. Pension plan
For details of the main contents and important changes of the pension plan, please refer to the relevant description of the definedcontribution plan in note 39, employee compensation payable in note VII.
5. Discontinuing operation
In RMB
| Item | Revenue | Expenses | Total profit | Income tax expenses | Net profit | Profit of discontinuing operation attributable to owners of parent company |
Other explanation
6. Segment
(1) Recognition basis and accounting policy for reportable segment
(2) Financial information for reportable segment
In RMB
| Item | Offset between segment | Total |
(3) The Company has no segment, or unable to disclose total assets and liability of the segment, explainreasons
(4) Other explanation
7. Other major transaction and events makes influence on investor’s decision
8. Other
XVII. Principle notes of financial statements of parent company
1. Account receivable
(1) Category
In RMB
| Category | Ending balance | Opening balance | ||||||||
| Book balance | Bad debt provision | Book value | Book balance | Bad debt provision | Book value | |||||
| Amount | Ratio | Amount | Accrual ratio | Amount | Ratio | Amount | Accrual ratio | |||
| Account receivable with bad debt provision accrual on a single basis | 28,453.08 | 76.27% | 28,453.08 | 100.00% | 28,453.08 | 0.07% | 28,453.08 | 100.00% | ||
| Including: | ||||||||||
| Account receivable with single significant amount and withdrawal bad debt provision on single basis | ||||||||||
| Account receivable with single minor amount but with bad debts provision accrued on a single basis | 28,453.08 | 76.27% | 28,453.08 | 100.00% | 28,453.08 | 0.07% | 28,453.08 | 100.00% | ||
| Account receivable with bad debt provision accrual on portfolio | 8,852.60 | 23.73% | 885.26 | 10.00% | 7,967.34 | 42,869,954.13 | 99.93% | 428,835.06 | 1.00% | 42,441,119.07 |
| Including: | ||||||||||
| Accounts receivable with provision for bad debts by aging analysis | 8,852.60 | 23.73% | 885.26 | 10.00% | 7,967.34 | 42,869,954.13 | 99.93% | 428,835.06 | 1.00% | 42,441,119.07 |
| Total | 37,305.68 | 100.00% | 29,338.34 | 78.64% | 7,967.34 | 42,898,407.21 | 100.00% | 457,288.14 | 1.07% | 42,441,119.07 |
Bad debt provision accrual on single basis: 28,453.08 Yuan
In RMB
| Name | Ending balance | |||
| Book balance | Bad debt provision | Accrual ratio | Accrual causes | |
| Single provision | 28,453.08 | 28,453.08 | 100.00% | Slightly possibly taken back |
| Total | 28,453.08 | 28,453.08 | -- | -- |
Bad debt provision accrual on single basis:
In RMB
| Name | Ending balance | |||
| Book balance | Bad debt provision | Accrual ratio | Accrual causes | |
Bad debt provision accrual on portfolio: 885.26 Yuan
In RMB
| Name | Ending balance | ||
| Book balance | Bad debt provision | Accrual ratio | |
| 1-2 years (including 2-year) | 8,852.60 | 885.26 | 10.00% |
| Total | 8,852.60 | 885.26 | -- |
Explanation on portfolio determines:
Bad debt provision accrual on portfolio:
In RMB
| Name | Ending balance | ||
| Book balance | Bad debt provision | Accrual ratio | |
Explanation on portfolio determines:
If the provision for bad debts of account receivable is made in accordance with the general model of expected credit losses, please referto the disclosure of other account receivables to disclose related information about bad-debt provisions:
□ Applicable √Not applicable
By account age
In RMB
| Account age | Ending balance |
| 1-2 years | 8,852.60 |
| Over 3 years | 28,453.08 |
| Over 5 years | 28,453.08 |
| Total | 37,305.68 |
(2) Bad debt provision accrual, collected or reversal in the period
Bad debt provision accrual in the period:
In RMB
| Category | Opening balance | Amount changed in the period | Ending balance | |||
| Accrual | Collected or reversal | Written-off | Other | |||
| Accrued by combination | 428,835.06 | -427,949.80 | 885.26 | |||
| Accrued by single item | 28,453.08 | 28,453.08 | ||||
| Total | 457,288.14 | -427,949.80 | 29,338.34 | |||
Including major amount bad debt provision that collected or reversal in the period:
In RMB
| Enterprise | Amount collected or reversal | Collection way |
(3) Account receivable actually written-off in the period
In RMB
| Item | Amount written-off |
Including major account receivable written-off:
In RMB
| Enterprise | Nature | Amount written-off | Written-off causes | Procedure of written-off | Resulted by related transaction (Y/N) |
Explanation on account receivable written-off:
(4) Top 5 account receivables at ending balance by arrears party
In RMB
| Enterprise | Ending balance of accounts receivable | Proportion in total receivables at ending balance (%) | Bad debt preparation ending balance |
| First | 18,456.50 | 49.47% | 18,456.50 |
| Second | 9,996.58 | 26.80% | 9,996.58 |
| Third | 4,000.00 | 10.72% | 400.00 |
| Fourth | 3,367.40 | 9.03% | 336.74 |
| Fifth | 1,209.20 | 3.24% | 120.92 |
| Total | 37,029.68 | 99.26% |
(5) Account receivable derecognition due to financial assets transfer
(6) Assets and liabilities resulted by account receivable transfer and continues involvementOther explanation:
2. Other account receivable
In RMB
| Item | Ending balance | Opening balance |
| Dividends receivable | 260,000,000.00 | |
| Other account receivable | 734,149,247.39 | 159,677,969.59 |
| Total | 994,149,247.39 | 159,677,969.59 |
(1) Interest receivable
1) Category
In RMB
| Item | Ending balance | Opening balance |
2) Important overdue interest
| Borrower | Ending balance | Overdue time | Overdue causes | Whether impairment occurs and its judgment basis |
Other explanation:
3) Accrual of bad debt provision
□ Applicable √Not applicable
(2) Dividend receivable
1) Category
In RMB
| Item (or invested enterprise) | Ending balance | Opening balance |
| Shenzhen Cereals Group Co., Ltd | 260,000,000.00 | |
| Total | 260,000,000.00 |
2) Important dividend receivable with account age over one year
In RMB
| Item (or invested enterprise) | Ending balance | Account age | Reasons for not collection | Whether impairment occurs and its judgment basis |
3) Accrual of bad debt provision
□ Applicable √Not applicable
Other explanation:
(3) Other account receivable
1) By nature
In RMB
| Nature | Ending book balance | Opening book balance |
| Margin and deposit | 119,089.00 | |
| Export tax rebate | 312,364.06 | |
| Intercourse funds and other | 761,135,520.91 | 182,280,569.20 |
| Total | 761,135,520.91 | 182,712,022.26 |
2) Accrual of bad debt provision
In RMB
| Bad debt provision | Phase I | Phase II | Phase III | Total |
| Expected credit losses over next 12 months | Expected credit losses for the entire duration (without credit impairment occurred) | Expected credit losses for the entire duration (with credit impairment occurred) | ||
| Balance on Jan. 1, 2019 | 1,922.73 | 75,499.40 | 22,956,630.54 | 23,034,052.67 |
| Balance of Jan. 1, 2019 in the period | —— | —— | —— | —— |
| Current accrual | 51,400.94 | 75,845.89 | 3,824,974.02 | 3,952,220.85 |
| Balance on Dec. 31, 2019 | 53,323.67 | 151,345.29 | 26,781,604.56 | 26,986,273.52 |
Change of book balance of loss provision with amount has major changes in the period
□ Applicable √Not applicable
By account age
In RMB
| Account age | Ending balance |
| Within one year (including 1-year) | 735,641,115.56 |
| 1-2 years | 436,664.33 |
| 2-3 years | 436,664.33 |
| Over 3 years | 24,621,076.69 |
| 3-4 years | 436,664.33 |
| 4-5 years | 505,459.41 |
| Over 5 years | 23,678,952.95 |
| Total | 761,135,520.91 |
3) Bad debt provision accrual, collected or reversal in the period
Bad debt provision accrual in the period:
In RMB
| Category | Opening balance | Amount changed in the period | Ending balance | |||
| Accrual | Collected or reversal | Written off | Other | |||
| Credit portfolio | 23,034,052.67 | 23,034,052.67 | 3,952,220.85 | 26,986,273.52 | ||
| Total | 23,034,052.67 | 23,034,052.67 | 3,952,220.85 | 26,986,273.52 | ||
Including major amount with bad debt provision reverse or collected in the period:
In RMB
| Enterprise | Amount reversal or collected | Collection way |
4) Other account receivable actually written-off in the period
In RMB
| Item | Amount written-off |
Including important other account receivable written-off:
In RMB
| Enterprise | Nature | Amount written-off | Written-off causes | Procedure of written-off | Resulted by related transaction (Y/N) |
Explanation on other account receivable written-off:
5) Top 5 other receivables at ending balance by arrears party
In RMB
| Enterprise | Nature | Ending balance | Account age | Ratio in total ending balance of other account receivables | Ending balance of bad debt reserve |
| First | Internal funds | 264,404,734.35 | Within one year | 34.74% | |
| Second | Internal funds | 208,767,877.36 | Within one year | 27.43% | |
| Three | Internal funds | 113,057,874.62 | Within one year | 14.85% | |
| Fourth | Internal funds | 99,696,965.00 | Within one year | 13.10% | |
| Fifth | Internal funds | 31,591,983.85 | Within one year | 4.15% | |
| Total | -- | 717,519,435.18 | -- | 94.27% |
6) Other account receivables related to government grants
In RMB
| Enterprise | Government grants | Ending balance | Ending account age | Time, amount and basis for collection predicted |
7) Other receivable for termination of confirmation due to the transfer of financial assets
8) The amount of assets and liabilities that are transferred other receivable and continued to be involvedOther explanation:
3. Long-term equity investment
In RMB
| Item | Ending balance | Opening balance | ||||
| Book balance | Impairment provision | Book value | Book balance | Impairment provision | Book value | |
| Investment for subsidiary | 3,713,214,425.09 | 3,713,214,425.09 | 4,208,728,337.66 | 4,208,728,337.66 | ||
| Investment for associates and joint venture | 5,139,058.21 | 2,927,628.53 | 2,211,429.68 | 6,753,354.23 | 2,927,628.53 | 3,825,725.70 |
| Total | 3,718,353,483.30 | 2,927,628.53 | 3,715,425,854.77 | 4,215,481,691.89 | 2,927,628.53 | 4,212,554,063.36 |
(1) Investment for subsidiary
In RMB
| The invested entity | Opening balance (book value) | Increase and decrease in current period | Ending balance (book value) | Ending balance of impairment provision | |||
| Additional investment | Reduce investment | Provision for impairment | Other | ||||
| Hangzhou Ju Fang Yong Holding Co., Ltd | 176,906,952.42 | 176,906,952.42 | |||||
| Yunnan Shenbao Pu’er Tea Supply Chain Management Co., Ltd. | 20,000,000.00 | 20,000,000.00 | |||||
| Ju Fang Yong Tea Industry Co., Ltd. in Wuyuan County | 280,404,134.35 | 280,404,134.35 | |||||
| Yunnan Pu’er Tea Trading Center Co., Ltd. | 18,202,825.80 | 18,202,825.80 | |||||
| Huizhou Shenbao Technology Co., Ltd. | 60,000,000.00 | 60,000,000.00 | |||||
| Shenzhen Cereals Group Co., Ltd.- headquarters | 3,291,415,036.82 | 3,291,415,036.82 | |||||
| Shenzhen Shenbao Industry and Trade Development Co., Ltd. | 5,500,000.00 | 5,500,000.00 | |||||
| Shenzhen Shenbao Huacheng Science and Technology Co.,Ltd | 168,551,781.80 | 168,551,781.80 | |||||
| Shenzhen Shenbao Technology Center Co., Ltd. | 54,676,764.11 | 54,676,764.11 | |||||
| Shenzhen Shenbao Sanjing Food Beverage Development Co., Ltd. | 80,520,842.36 | 80,520,842.36 | |||||
| Shenzhen Shenbao Property Management Co., Ltd. | 2,550,000.00 | 2,550,000.00 | |||||
| Shenzhen Shenshenbao Investment Co., Ltd. | 50,000,000.00 | 50,000,000.00 | |||||
| Total | 4,208,728,337.66 | 495,513,912.57 | 3,713,214,425.09 |
(2) Investment for associates and joint venture
In RMB
| investment company | Opening balance (book value) | Current changes (+, -) | Ending balance (book value) | Ending balance of impairment provision | |||||||
| Additional investment | Capital reduction | Investment gains recognized under equity | Other comprehensive income adjustment | Other equity change | Cash dividend or profit announced to issued | Accrual of impairment provision | Other | ||||
| I. Joint venture | |||||||||||
| II. Associated enterprise | |||||||||||
| Guangzhou Shenbao Mendao Tea Co., Ltd | 3,825,725.70 | -1,614,296.02 | 2,211,429.68 | ||||||||
| Shenzhen Shenbao (Liaoyuan) Industrial Company | 57,628.53 | ||||||||||
| Shenzhen Shenbao (Xinmin) Foods Co., Ltd | 0 | 2,870,000.00 | |||||||||
| Changzhou Shenbao Chacang | |||||||||||
| Subtotal | 3,825,725.70 | -1,614,296.02 | 2,211,429.68 | 2,927,628.53 | |||||||
| Total | 3,825,725.70 | -1,614,296.02 | 2,211,429.68 | 2,927,628.53 |
(3) Other explanation
4. Operating income and operating cost
In RMB
| Item | Current Period | Last Period | ||
| Income | Cost | Income | Cost | |
| Main business | 33,297,047.52 | 30,082,764.02 | 165,407,623.24 | 156,886,817.06 |
| Total | 33,297,047.52 | 30,082,764.02 | 165,407,623.24 | 156,886,817.06 |
Whether implemented the new revenue standards
□Yes √No
Other explanation:
5. Investment income
In RMB
| Item | Current Period | Last Period |
| Long-term equity investment income measured by equity | -1,614,296.02 | -367,955.83 |
| Investment income from disposal of long-term equity investment | -109,778.22 | |
| Dividend | 289,407,372.80 | |
| Income from financial products | 1,884,298.10 | 953,125.00 |
| Other | 450,000.00 | |
| Total | 289,567,596.66 | 1,035,169.17 |
6. Other
XVIII. Supplementary information
1. Current non-recurring gains/losses
√ Applicable □Not applicable
In RMB
| Item | Amount | Note |
| Gains/losses from the disposal of non-current asset | -43,069.03 | |
| Governmental grants calculated into current gains and losses (while closely related with the normal business of the Company, excluding the fixed-amount or fixed-proportion governmental subsidy according to the unified national standard) | 12,297,924.24 | |
| Fund occupation fee charged to non-financial enterprises included in current profit and loss | 436,664.31 | |
| Profit and loss of assets delegation on others’ investment or management | 6,299,093.96 | |
| Except for the effective hedging business related to the normal business of the Company, the fair value changes from holding the tradable financial assets, derivative financial assets, tradable financial liability and derivative financial liability; and investment income from disposal of tradable financial assets, derivative financial assets, tradable financial liability and other creditors investment | 41,281.76 |
| Switch back of the impairment provision for account receivable with impairment test on single basis and contract assets | 1,035,149.32 | |
| Other non-operating income and expense other than the above mentioned ones | -4,544,601.53 | |
| Less: Impact on income tax | 2,149,564.84 | |
| Impact on minority interests | 769,341.33 | |
| Total | 12,603,536.86 | -- |
Concerning the extraordinary profit (gain)/loss defined by Q&A Announcement No.1 on Information Disclosure for CompaniesOffering Their Securities to the Public --- Extraordinary Profit/loss, and the items defined as recurring profit (gain)/loss according tothe lists of extraordinary profit (gain)/loss in Q&A Announcement No.1 on Information Disclosure for Companies Offering TheirSecurities to the Public --- Extraordinary Profit/loss, explain reasons
□ Applicable √Not applicable
2. ROE and earnings per share
| Profits during report period | Weighted average ROE | Earnings per share | |
| Basic EPS (Yuan/share) | Diluted EPS (Yuan/share) | ||
| Net profits belong to common stock stockholders of the Company | 8.46% | 0.3154 | 0.3154 |
| Net profits belong to common stock stockholders of the Company after deducting nonrecurring gains and losses | 8.17% | 0.3045 | 0.3045 |
3. Difference of the accounting data under accounting rules in and out of China
(1) Difference of the net profit and net assets disclosed in financial report, under both IAS (InternationalAccounting Standards) and Chinese GAAP (Generally Accepted Accounting Principles)
√ Applicable □Not applicable
In RMB
| Net profit | Net assets | |||
| Current Period | Last Period | Ending balance | Opening balance | |
| Chinese GAAP | 363,501,809.52 | 308,331,032.44 | 4,420,751,187.57 | 4,172,502,535.11 |
| Items and amount adjusted by IAS: | ||||
| Adjustment for other payable fund of stock market regulation | 1,067,000.00 | 1,067,000.00 | ||
| IAS | 363,501,809.52 | 308,331,032.44 | 4,421,818,187.57 | 4,173,569,535.11 |
(2) Difference of the net profit and net assets disclosed in financial report, under both foreign accountingrules and Chinese GAAP (Generally Accepted Accounting Principles)
□ Applicable √Not applicable
(3) Explanation on data differences under the accounting standards in and out of China; as for thedifferences adjustment audited by foreign auditing institute, listed name of the institute
4. Other
Section XIII. Documents available for Reference
1. Text of financial statement with signature and seals of legal person, person in charge of accounting works andperson in charge of accounting institution;
2. Original audit report with seal of accounting firms and signature and seals of CPA;
3. Original and official copies of all documents which have been disclosed on Securities Times, China SecuritiesJournal, and Hong Kong Commercial Daily in the report period;
4. Original copies of 2019 Annual Report with signature of the Chairman.