Guangdong Haid Group Co., Limited
2021 Annual Report
Stock Code: 002311
Date of Approval for Publication: 10 April 2022
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
Section I. Important Notes, Table of Contents and Definitions
The board of directors (the "Board"), the supervisory committee, the directors,
the supervisors and the senior management of Guangdong Haid Group Co.,
Limited (the "Company") hereby warrant the truthfulness, accuracy and
completeness of the information presented in this report, guarantee that there
are no misrepresentations, misleading statements or material omissions
contained in this annual report, and are individually and collectively responsible
for the authenticity, accuracy and completeness of the information contained in
this report.
Mr. Hua Xue, head of the Company, and Mr. Shaolin Yang, head in charge of
accounting work and head of the accounting department (Accounting Officer),
declare that they warrant the truthfulness, accuracy and completeness of the
financial statements in the annual report.
All directors were present in person at the Board meeting to consider and
approve this annual report.
The Report contains forward-looking statements such as future plans, which do
not constitute any specific undertakings by the Group to its investors. Investors
are advised to pay attention to investment risks.
Risk Warning:
1.Risk of periodical fluctuation of feed industry affected by abnormal weather
and animal diseases
The feed industry is mainly served for the downstream breeding industry. The
abnormal changes of temperature, precipitation and typhoon may lead to the
fluctuation of livestock and aquaculture inventory, even the large-scale outbreak
of diseases, further impacting the demand for feed and likely causing the risk of
periodic and regional fluctuations of feed industry. Animal epidemic diseases
may also occur frequently owing to the environmental changes and the
expansion of large-scale animal industry. For instance, African swine fever
broke out in August 2018 and spread across China, and PRRSV-mediated pig
diseases, shrimp-relevant EMS epidemic diseases and poultry-relevant H7N9
diseases occurred recently. The outbreak of animal diseases directly holds up the
scale of breeding and reduces the demand for feed in the short term. Major
animal epidemic diseases may also reduce the demand of end-consumers,
leading to the downturn of the animal breeding and further the demand of feed
1
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
products, resulting in adverse effects on the production and operation of feed
enterprises.
Risk control methods: (1) The company is currently fully deploying
manufacturers and local markets in major areas of Southern China, Central
China, Eastern China and Northern China and overseas markets in Southeast
Asia, etc. The expansion of regional distribution can effectively decrease the risk
of weather anomalies and natural disasters in local areas. (2) The feed products
cover pig, chicken, duck, goose, fish, shrimp feeds and other livestock and
aquatic feeds. The variety of products and well-balanced structure can
effectively mitigate the risk of single species disease with strong comprehensive
risk-relieve capability.
2. Risk of the drastic fluctuation of main ingredient materials’ price
The feed ingredients consist of staple agricultural products such as corn and
soybeans (soybean meal) et al. In recent years, the domestic and international
markets of agricultural product have been closely linked. The changes of the
planting area size and the harvest amount in these major grain-producing
countries, purchasing and storage and subsidy policies, import and export
policies, political conflicts between countries, international trade relations,
logistics capacity and conditions of shipping and exchange rates result in great
fluctuations of agricultural products’ price, bringing certain impact on the cost
of feed and animal industry. With the strengthening of the international trade of
agricultural products, the factors affecting the prices of agricultural products
have become more complicated, and the fluctuation of price therefore increased.
Failing to understand the changes of feed raw materials in a timely manner and
promptly implement strategic management, the company may face the risk of
the rising procurement costs.
Risk control methods: (1) The materials were divided into different categories
such as centralized purchasing staple category and local procurement of
regional varieties category. It not only guarantees the advantages of large-scale
raw material procurement, but also makes best use of localization advantages
from rapid response in respect of regional procurement. (2) The raw material
procurement research system was continuously invested and constructed. The
members of team are professional and familiar with raw material information.
It can effectively control the procurement risk through real-time tracking,
studying and judging the market trend in domestic and foreign bulk raw
material, and manage the risk of bulk raw materials through futures hedging,
raw materials trade and other tools. (3) The company has strong research and
development (R&D) team composed of nearly 2,000 employees with extensive
experience in research on animal nutrition and feed formulation technologies.
2
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
Large amounts of funds are invested on R&D each year, focusing on animal
nutrition requirements, feed formulation technology, animal farming and
genetic improvement, overall investigation on healthy animal farming strategies,
and other research areas. Whenever the material price is fluctuated, the formula
can be quickly adjusted to guarantee feed nutrient level and control the cost
based on the profound understanding of animal nutritional requirements and
the expertise in making best use of raw materials.
3. Risk of environmental protection laws and policies on the scale structure and
regional adjustment in animal industry
In recent years, our government has introduced a series of environmental
protection laws and policies such as new Environmental Protection Law, the
Regulations on Prevention and Control of Pollution from Large-Scale Livestock
and Poultry Industry, the Plan for Prevention and Treatment of Contaminated
Water, the Guiding Opinions on Adjusting the Layout of Pig Production in the
Southern Water Network Region et al. These anti-pollution regulations stipulate
the pollution prevention in animal industry, and especially limit the production
scale in the regions of key water sources and its surrounding areas. According to
the regulations and policies of the central government, the banned areas and
restricted areas have been set up throughout the country, and pig farms in the
prohibited areas are gradually relocated in the southern water network areas.
The implementation of environmental protection policies not only speeds up the
withdrawal of family pig farms with backward production capacity and
unqualified environmental protection, but also expands the production capacity
of large-scale farms and improves breeding scale structure. In addition, the
establishment of banned areas and restricted areas will enforce the adjustments
of pig production capacity across the country. The adjustments of the scale
composition of pig production and the relocation of pig production areas will
certainly have profound impact on the existing capacity layout, market share,
pricing power and business model of feed industry. The impact of environmental
protection policies on the pig industry and feed industry makes the existing
competitive enterprises at risk of reshuffling.
Risk control measures: (1) The company continually improves its service
capability to farmers. In addition to feed products, the company is also engaged
in the industrial fields of animal healthcare products, vaccines and finance, and
set up strong connection with large-scale farmers. (2) The feed products of the
company cover the field of livestock, poultry, and aquatic animals with
abundant product lines. The producing lines for pig feed, chicken feed, duck
feed and pelleted fish feed can be shared and switched. The company can rapidly
shift the production layout according to the changes in the market through
adjusting the production capacity. (3) The company adopts multiple models to
3
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
speed up the production layout in areas with abundant resources and permitted
environment, and to obtain more market share in new animal farming areas. (4)
The company continues to increase R&D investment, and the key technologies
on microbial fermented feed and antibiotic substitutes have been effectively
applied to foster the progress and development of the industry.
4. Risk of Exchange Rate Fluctuations
The global procurement of feed raw materials has become the norm. The scale
of overseas investment and operations of the company is also rapidly expanded.
The scale of cross-border fund settlement and the stock of overseas assets have
grown substantially, involved in various currency types of different countries.
The currency exchange rate fluctuations are subject to different factors. The
exchange rate fluctuations in any currency put certain impact on the settlement
cost and asset value of the regions.
Risk control methods: (1) the company strictly controls the exchange rate risks,
carefully selects settlement currencies to achieve relatively balanced regional
fund inflow and outflow through the structural arrangements of financing
sources and financing types according to the scale, the operation model, and the
settlement characteristics of business in different regions and countries. (2) The
expansion of two-way fluctuations in RMB exchange rate has become the new
norm. The company increases its awareness of foreign exchange risk and
arranges settlement models according to the procurement and sales strategies
and the cycle characteristics of import and export operations, and flexibly used
financial instruments such as forward foreign exchange settlement and sale,
swaps, foreign exchange options and others to lock in exchange rate risks,
control procurement and sales costs and the possible risk caused by exchange
rate fluctuations.
The proposed profit distribution plan of the Company was considered and
passed by the Board: on the basis of the total number of shares on the date of
record minus the repurchased shares when the plan is implemented in the future,
the Company will distribute cash dividend of RMB 1.50 (tax inclusive) and 0
bonus share (tax inclusive) for every 10 existing shares held by all shareholders
without capitalization of capital reserve.
This report has been prepared in both Chinese and English. Should there be any
discrepancies or misunderstandings between the two versions, the Chinese
version shall prevail. The complete published Chinese 2021 Annual Report is
availableat the media designated for information disclosure .
4
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
Table of Contents
Section I. Important Notes, Table of Contents and Definitions ....................................................... 1
Section II. Company Profile and Key Financial Indicators .......................................... 8
Section III. Management Discussion and Analysis ..................................................... 14
Section IV. Corporate Governance .............................................................................. 74
Section V. Environmental and Social Responsibility ................................................ 121
Section VI. Material Matters ..................................................................................... 131
Section VII. Share Changes and Shareholder Information ....................................... 155
Section VIII. Preferred Shares................................................................................... 164
Section IX. Bonds...................................................................................................... 165
Section X. Financial Statements ................................................................................ 169
5
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
Documents Available for Reference
1. The financial statements signed and sealed by the head of the Company, the head in charge of
accounting work and the head of the accounting department (Accounting Officer).
2. The original copy of the Independent Auditor’s Report signed and sealed by the CPAs, as well as
sealed by the CPA firm.
3. The originals of all the Company’s announcements and documents which were disclosed during
the Reporting Period.
4. The annual report disclosed on other securities markets.
6
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
Definitions
Item Definition
Company, Group, Haid Group Guangdong Haid Group Co., Limited
Board the board of directors of Guangdong Haid Group Co., Limited
Supervisory Committee the supervisory committee of Guangdong Haid Group Co., Limited
General Meeting the general meeting of Guangdong Haid Group Co., Limited
Company Law the Company Law of the People’s Republic of China
Securities Law the Securities Law of the People’s Republic of China
Articles of Association the Articles of Association of Guangdong Haid Group Co., Limited
RMB Renminbi
reporting period, the period, the year the period from 1 January 2021 to 31 December 2021
last year, the same period of last year the period from 1 January 2020 to 31 December 2020
the end of the period 31 December 2021
the beginning of the period or the year 1 January 2021
CSRC China Securities Regulatory Commission
7
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
Section II. Company Profile and Key Financial Indicators
I. Company profile
Stock name Haid Group Stock code 002311
Changed stock name (if any) N/A
Stock exchanges on which the
Shenzhen Stock Exchange
shares are listed
Chinese name of the Company 广东海大集团股份有限公司
Chinese abbreviation of the
海大集团
Company
English name of the Company
Guangdong Haid Group Co., Limited
(if any)
English abbreviation of the
HAID GROUP
Company (If any)
Legal representative of the
Hua Xue
Company
Room 701 , Building 2，Haid Mansion，No. 42，Road 4, Wangbo, Nancun Town, Panyu Dist，
Registered address
Guangzhou，China.
Postal code of registered
511445
address
Past changes of registered
The registered address remained unchanged during the reporting period.
address
Room 701 , Building 2，Haid Mansion，No. 42，Road 4, Wangbo, Nancun Town, Panyu Dist，
Office address
Guangzhou，China
Postal code of office address 511445
Website of the Company www.haid.com.cn
Email address zqbgs@haid.com.cn
II. Contact persons and contact methods
Board Secretary Securities Affairs Representative
Name Zhijian Huang Jiewen Lu and Huafang Yang
Room 701 , Building 2，Haid Mansion， Room 701 , Building 2，Haid Mansion，
Correspondence address
No. 42，Road 4, Wangbo, Nancun Town, No. 42，Road 4, Wangbo, Nancun Town,
8
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
Panyu Dist， Guangzhou，China Panyu Dist， Guangzhou，China
Telephone 8620-39388960 8620-39388960
Facsimile 8620-39388958 8620-39388958
Email address zqbgs@haid.com.cn zqbgs@haid.com.cn
III. Information disclosure and places for inspection
Stock exchange website where the Annual Report is Securities Times, China Securities Journal, Securities Daily, Shanghai
disclosed Securities News
Media and website where the Annual Report is
www.cninfo.com.cn
disclosed
Places for inspection of the Company’s
Securities Department of the Company
Annual Report
IV. Change in registration
Organisation registration code No change
Change of principal activities since its
No change
listing (if any)
Change of the controlling shareholder (if
No change
any)
V. Other relevant information
CPA firm engaged by the Company
Name of the CPA firm Grant Thornton China (Special General Partnership)
CPA firm’s address 5th Floor, Scitech Palace 22 Jianguomen Wai Avenue, Chaoyang District, Beijing
Name of the signing certified
Wenyuan Guan and Shuxia Zhang
public accountants
Sponsors engaged by the Company to continuously perform its supervisory function during the reporting period
√ Applicable □ Not applicable
Name Office address Representative Period of supervision
111 Fuhua First Road, Futian
China Merchants Securities Co., Ziqiang Kang and Xiaoliang From 16 April 2020 to 31
Street, Futian District,
Ltd. Shen December 2021
Shenzhen
Financial Advisors engaged by the Company to continuously perform its supervisory function during the reporting period
□ Applicable √ Not applicable
9
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
VI. Major accounting data and financial indicators
Retrospective adjustment to or restatement of the accounting data for prior years by the Company
□ Yes √ No
Increase/decrease
for the year as
2021 2020 2019
compared to the
prior year
Operating income (RMB) 85,998,559,748.78 60,323,862,405.94 42.56% 47,612,587,464.50
Net profit for the year attributable
to shareholders of the parent 1,596,046,173.08 2,522,730,419.35 -36.73% 1,648,762,579.59
company (RMB)
Net profit for the year attributable
to shareholders of the parent
1,519,412,737.99 2,459,587,964.11 -38.22% 1,580,784,060.76
company after deducting the
non-recurring gain or loss (RMB)
Net cash flows from operating
3,137,948,250.69 485,259,232.03 546.65% 3,246,980,705.08
activities (RMB)
Basic earnings per share (RMB per
0.96 1.60 -40.00% 1.06
share)
Diluted earnings per share (RMB
0.96 1.60 -40.00% 1.05
per share)
Rate of return on equity on
11.46% 23.87% -12.41% 19.54%
weighted average basis
Increase/decrease
as at the end of
As at the
As at the end of 2020 the year compared As at the end of 2019
end of 2021
to the end of
the prior year
Total assets (RMB) 35,648,579,800.09 27,526,958,371.19 29.50% 18,854,315,218.31
Total equity attributable to
shareholders of the parent 14,461,135,509.32 13,972,788,864.41 3.49% 9,103,789,731.01
company (RMB)
Whether the lower of the net profit for the year attributable to shareholders of the parent company before and after deducting the
non-recurring gain or loss was negative for the last three accounting years, and the latest independent auditor’s report indicated that
there was uncertainty about the Company’s ability to continue as a going concern
□ Yes √ No
10
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
Whether the lower of the net profit for the year attributable to shareholders of the parent company before and after deducting the
non-recurring gain or loss was negative
□ Yes √ No
VII. Differences in accounting data under domestic and overseas accounting standards
1. Differences between the net profit and net assets disclosed in accordance with international accounting
standards and China accounting standards in the financial report
□ Applicable √ Not applicable
There was no difference between the net profit and net assets disclosed in accordance with international accounting standards and
China accounting standards in the financial report during the reporting period.
2. Differences between the net profit and net assets disclosed in accordance with overseas accounting
standards and China accounting standards in the financial report
□ Applicable √ Not applicable
There was no difference between the net profit and net assets disclosed in accordance with overseas accounting standards and China
accounting standards in the financial report during the reporting period.
VIII. Key Financial Indicators by Quarter
Unit: RMB
Q1 Q2 Q3 Q4
Operating income 15,713,132,477.82 22,478,102,881.45 26,122,667,497.11 21,684,656,892.40
Net profit for the year attributable
to shareholders of the parent 707,280,316.86 825,305,727.12 213,887,814.83 -150,427,685.73
company
Net profit for the year attributable
to shareholders of the parent
691,739,925.38 805,116,849.80 206,917,039.33 -184,361,076.52
company after deducting the
non-recurring gain or loss
Net cash flows from operating
-834,854,929.29 1,415,157,516.61 1,671,634,848.35 886,010,815.02
activities
Whether the above indicators or their aggregated amounts have any material difference with the respective amounts as disclosed in
the quarterly report or interim report
□ Yes √ No
11
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
IX. Items and Amounts of Non-recurring Gains or Losses
√ Applicable □ Not applicable
Unit: RMB
Item Amount for 2021 Amount for 2020 Amount for 2019 Explanation
Gain or loss on disposal of non-current
-21,381,178.37 -8,506,037.63 -699,384.34
assets
Government grants charged to current profit
or loss (excluding government grants
consistently given in the Company’s
91,417,497.06 123,628,058.53 53,217,210.55
ordinary course of business at fixed quotas
or amounts as per government’s policies or
standards)
Investment costs for acquisition of
subsidiaries, associates and joint venture less
40,510.51 1,749,131.53 3,199,250.94
than gains from the fair value of identifiable
net assets of the investees
Except for the effective hedging activities
related to the Company's ordinary activities,
profit or loss arising from changes in fair
value of financial assets held for trading and
financial liabilities held for trading, and 292.58 4,383,792.92
investment income from disposal of
financial assets held for trading, financial
liabilities held for trading, and financial
assets available for sale
Reversal of provision for bad and doubtful
debt where accounts receivable are 11,769,732.86 3,118,886.26 3,818,866.10
individually tested for impairment
Profits or losses from external entrusted
18,750.00
loans
Other non-operating incomes and expenses,
12,478,800.92 -43,325,417.81 19,284,324.06
except for the above
Other gain or loss satisfied the definition of
3,713,581.31 5,465,542.39
non-recurring gain or loss
Less: impact of Income tax 15,798,527.34 9,094,660.10 17,653,550.72
Less: impact of non-controlling interests（net
5,606,981.86 4,446,548.12 3,037,533.07
of tax）
Total 76,633,435.09 63,142,455.24 67,978,518.83 --
Particulars about other gain or loss that satisfied the definition of non-recurring gain or loss:
12
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
□ Applicable √ Not applicable
The Company had no other gain or loss that satisfied the definition of non-recurring gain or loss.
Notes for the Company’s non-recurring gain or loss items as illustrated in the Explanatory Announcement on Information Disclosure
for Companies Offering Their Securities to the Public No.1 - Non-recurring Gain or Loss (公开发行证券的公司信息披露解释性公
告第 1 号——非经常性损益) defined as its recurring gain or loss items
□ Applicable √ Not applicable
No non-recurring gain or loss items as illustrated in the Explanatory Announcement on Information Disclosure for Companies
Offering Their Securities to the Public No.1 - Non-recurring Gain or Loss (公开发行证券的公司信息披露解释性公告第 1 号——
非经常性损益) were defined by the Company as its recurring gain or loss items during the reporting period.
13
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
Section III. Management Discussion and Analysis
I. Industry situation during the reporting period
1. Basic situation and development stage of the industry
The breeding industry is in the middle of agricultural industry chain, linking the planting industry with the food
industry. As the upstream of the breeding industry, the feed industry is the link between the planting industry and
the breeding industry. The feed industry possesses the highest degree of industrialization in the agricultural
industrial chain. The feed generally accounts for more than 70% of the farming cost and undertakes the important
function of guaranteeing the breeding transformation efficiency and reducing the breeding cost. With the
promotion of consumption upgrading, food safety and technological innovation, the farming industry has entered
the stage of industrialized, large-scale, intensive and intelligent development after the upgrades of environmental
protection regulations and the test of pandemics. However, the level of development varies in different species due
to the objective factors such as resources, technologies, land et al. Among them, poultry farming is at the highest
degree of industrialized, large-scale, centralized and intelligent development, followed by pig and aquaculture
farming, and cattle & sheep farming is still in their early development stage. With the intensification, large-scale,
centralized and intelligent development of farming industry as well as the improvement of farming techniques, the
sectors related to farming industry such as feeds and animal healthcare products are also increasing intensively,
and the industry integration is accelerated.
The detailed situations of feed, seedling, animal healthcare and poultry, pig and aquaculture farming industry: (1)
Feed industry is the important link in the production system of animal breeding. The development of feed industry
in China began in the 1980s. After more than 40 years of development, the total amount of feed has continuously
ranked the top in the world in recent years. According to the overview of the development of national feed
industry in 2021 issued by the Ministry of agriculture and rural areas and the feed industry association, the feed
output in 2021 reached a new high with the total output of more than 290 million tons, the increase of 16.1%
year-on-year. The output value of feed was 1,223.41 billion yuan, the increase of 29.30% year-on-year. In last 10
years, the feed industry has gradually changed from quantity oriented to high-quality development stage. The feed
industrial has entered the stage of industrial integration and upgrading, and the market growth rate has decreased.
At the same time, a few advanced enterprises in the industry have gradually emerged, and the industrial
14
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
concentration has increased rapidly. In 2021, with the accelerated recovery of pig production and the continuous
development of aquaculture and ruminant breeding, the output of feed industry increased rapidly, and the total
output of domestic industrial feed increased significantly, reaching an all-time high. (2) High- quality seedlings
are the key of animal farming, particularly in the aquaculture industry. However, the supply of high-quality
seedlings, especially aquatic seedlings, is insufficient. Few new seedlings with independent intellectual property
rights and small production capacity are far from reaching the needs of the upgrading and progress of the animal
industry. Seedlings will face the pressure on improving production through research and increasing the supply
capacity in the long term. (3) The market demand of animal healthcare products has grown rapidly. In particular,
the demand for healthy, safe and green farming has significantly increased with the uprising of consumption and
the upgrading of farming species. The concept that the disease prevention is more important than treatment is
increasingly accepted by most farmers. The benefits of reasonable investment of animal healthcare products for
farming is mainly reflected in the direct effects of reducing disease risk, health improvement, safety-added values
of end-products, controllable farming costs, and higher farming efficiency, there are also many extra effects such
as decreasing labor intensity and the improvement of industrial chain extension capability. In the future, the
capacity of the animal healthcare industry will have a large space for sustainable development based on the
current situation, and the advantageous enterprises will usher in major market development opportunities. (4) The
output value of poultry breeding industry exceeds 1 trillion yuan, which is the industry with the highest degree of
large-scale and standardization. The stock of large-scale poultry breeding in China accounts for more than 70%,
and the centralized trend is keeping up. With the help of capital, technology, scale and other advantages, the
industrial chain integration become an important trend for the development of poultry breeding industry. (5) The
output value of pig breeding industry is about 1.5 trillion yuan, which is rapidly moving towards large-scale,
intensive and industrialized process. The outbreak of African swine fever in 2018 and COVID-19 in 2020
accelerated the industrial centralization, and the small-scale and free- style farms quickly withdrew from the
market. During the epidemic period, large-scale enterprises are expected to rapidly expand their breeding volume
relying on their advantages in capital, technology and the construction of the unbroken epidemic prevention
system. Large- scale family farms with strong epidemic prevention capacity become the main force besides
large-scale enterprises. (6) Aquaculture industry has broad prospects for development, and the output value of
aquaculture also exceeds 1 trillion yuan. Aquatic products industry is dominated by aquaculture farming and
supplemented by fishing industry. In recent years, the policy of marine summer fishing moratorium has
accelerated the proportion of aquaculture farming in the whole aquatic products. With the development of
15
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
intelligence and automation and the rapid improvement of aquaculture technology, the large-scale aquaculture will
accelerate the development of aquaculture business. With the upgrading of consumption, the development of
catering industry and the awareness of food safety, it is gradually increasing the demand for stable, safe and
high-quality aquatic animal protein. The change of consumption structure will drive the supply of high-end
aquatic products. Aquaculture enterprises with high-quality seedlings and strong technical and financial strength
will become pioneers in the field of aquaculture and create broader market prospects in promoting technological
innovation of aquaculture.
2. The industry situation in 2021
In 2021, COVID-19 continued to spread in the world, along with limited import and export, the rising prices of
bulk raw materials, the declining consumer demand of domestic residents, and the depressed prices of poultry and
pork, livestock and poultry breeding was squeezed by the declining of meat products’ price and the rising of raw
material price, resulting in huge losses and difficulties. The price of aquatic products is relatively better, but the
profit is also decreased by the upward prices of raw material.
In terms of bulk agricultural products, corn prices will further increase after rising to the high level in 2020. The
price of soybean meal rose to the historical high compared with the beginning of the year and remained at the high
price throughout the year. According to the statistics of the Ministry of rural agriculture, at the end of 2021, the
average price of corn reached 2,930 yuan / ton, an increase of 26.3% over last year's average price with a record
high. The average price of soybean meal reached 3,790 yuan / ton, an increase of 14.2% over the average price of
last year. The price rise of corn and soybean meal has also driven the rise of other agricultural products’ prices.
The prices of wheat, sorghum, rice and cottonseed meal have increased to varying degrees. Driven by the rising
prices of raw grain, the domestic feed price has reached a record high, and the breeding cost has further increased.
In terms of the breeding industry, (1) the poultry breeding continues its depressed market after 2020. Affected by
the continuous weakness of market demand and the continuous decline of pig prices, combined with the sharp rise
of feed costs, the income of poultry breeding industry continues to decline, and the industrial capacity is at the
stage of rapid clearance. Meat duck farming has suffered losses for 20 consecutive months. In 2021, the operating
rate of slaughtering enterprises and the average storage capacity rate of frozen products fell year-on-year, and the
production capacity was further cleared. With the continuous release of high production capacity, white feather
chicken farming increased significantly from 2020 to 2021. The problem of over-capacity became more and more
prominent again. Over-supply led to market downturn and the income of the whole industrial chain continued to
16
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
decline. The consumption of yellow feather chicken farming was greatly impacted by the control management of
live poultry market. The output began to decline from 2020. The number of slaughters in 2021 decreased by 8.5%
and the output decreased by 4.7% compared with 2020. (2) With the standardized prevention and the control of
African swine fever virus and the further recovery of breeding capacity, according to the statistical bulletin of
national economic and social development in 2021 issued by National Bureau of statistics, the number of pigs sold
in the whole year was 671.28 million and the number of pigs in stock at the end of the year was 449.22 million,
with a year-on-year increase of 27.4% and 10.5%, respectively. The output of pork was 52.96 million tons, an
increase of 28.8%. The supply of live pigs increased significantly, and the price of live pigs dropped from the
highest 36 yuan / kg in the first half of the year to the lowest 10 yuan / kg in the second half of the year. The
continuous downward of pig prices led to the loss of farmers from the second quarter. Farms began to eliminate
many inefficient breeding and reserve sows, and the pig breeding industry entered the huge loss stage. (3) In the
first two years of aquaculture affected by COVID-19 and the comprehensive ban on fishing in the Yangtze River
system and the relatively small number of aquatic seedlings, the storage and discharge of aquatic products are
generally tight in 2021 resulting in better prices of aquatic products in 2021. The prices of traditional common
water fish such as silver carp, spotted silver carp, carp and grass carp continued to rise, reaching a record high
from June to July. Among them, the wholesale prices of grass carp, carp and silver carp exceeded 20 yuan / kg.
Although the prices fell in the second half of the year, the prices were still generally higher than the average prices
in last 10 years. After the downturn of shrimp culture in the past few years, with the further improvement of
domestic culture technology, the success rate of shrimp culture has been improved by small shed, greenhouse,
high-level pool and industrialized culture mode. During the epidemic period, the consumption demand of shrimp
has been stimulated, and the shrimp price has been rising. Due to the high dependence on catering and circulation,
the demand of special water fish species is low throughout the year due to the impact of the epidemic.
In terms of feed industry, although the farming industry is depressed, due to the significant investment release of
livestock and poultry production capacity in last two years, especially the further recovery of pig production
capacity, feed demand has increased, and feed output has increased rapidly to a new high. In 2021, the total output
of feed exceeded 290 million tons, with the year-on-year increase of 16.1%. Among them, pig feed was 130.765
million tons, the year-on-year increase of 46.6%. 121.41 million tons of poultry feed, the year-on-year decrease of
3.1%. 22.93 million tons of aquatic feed, the year-on-year increase of 8.0%. The centralization and large-scale of
feed industry have been further improved. There are 39 feed enterprise groups with an annual output of more than
one million tons, accounting for 59.7% of the total feed output in China, an increase of 5.1 percentage points over
17
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
the previous year. It is expected that the integration will continue in the later stage, the number of enterprises will
be further reduced, and the business centralization will be further enhanced. Dominant enterprises utilize industry
integration opportunities and scale advantages to expand production capacity through purchasing and building
new construction or extend the industrial chain and develop diversified businesses. Owing to the bottleneck
factors of capital, talents, technical pressure and service capacity, small and medium-sized enterprises will
gradually be integrated, merged and withdrawn from the market by dominant enterprises.
3. The periodic characteristics of the industry
The periodicity of the breeding industry is mainly determined by the supply side (the farming quantity). The
periodicity of feed, animal healthcare, seedling and other industries is related to the periodicity of the breeding
industry.
China is the country with a large population, and the food consumption demand of residents is huge, which
remains relatively rigid and stable for a certain period. Therefore, the supply side of the breeding industry
determines the price of breeding varieties, thus determining the periodicity of the breeding industry. The
periodicity of the feed industry generally lags behind the breeding industry. When the breeding volume is less than
the consumption demand, the price of breeding products will rise with considerable profit, resulting in the
prosperity of the breeding cycle. The feed demand will be reduced due to the reduction of breeding volume. When
the amount of breeding is greater than the consumption demand, the prices of breeding end products will fall, and
the breeding cycle will be depressed. The rigid demand for feed is large due to the large amount of breeding. But
at the same time, the decline in the prosperity of the breeding industry directly affects the farmers' choice of
high-quality or low-quality feed products, the enthusiasm of feeding, the sensitivity of feed product prices and the
effective transmission of feed raw material price fluctuations. Therefore, in fact, the periodic factors of the feed
industry such as seedlings and animal healthcare will offset each other and have less impact on feed, which is a
weak periodic industry.
4. The position of the company in the industry
The company belongs to the large comprehensive enterprise.
In terms of feed, although the industry centralization is strengthening, it is still relatively scattered. In 2021, the
company's feed sales volume was 19.63 million tons, accounting for about 6.69% of the country's total feed output,
ranking second in China feed industry, and the market share still has plenty space to increase. Among them, the
18
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
external sales volume is 18.77 million tons, and the internal farming consumption sales volume is 860,000 tons.
The company's aquatic feed technology and scale are leading in the world. Livestock and poultry feed ranks
among the top ten in the industry and is in the leading position in technology and industrial scale in the regional
market. The company has gradually developed feed, seedling and animal healthcare markets in Southeast Asia,
Africa, South America and other countries. The company also ranks among the top ten in the production and
marketing scale of global feed enterprises.
The company is regarded as the national key leading enterprise in agricultural industrialization, the national
enterprise technology center, China top 500 enterprises, China top 500 manufacturing enterprises, China top 500
private enterprises, Fortune China top 500 enterprises in 2021, and China top 500 listed companies in 2021.
II. Main businesses of the company during the reporting period
The company should comply with the disclosure requirements of livestock and poultry aquaculture industry in the
guidelines for self-discipline supervision of listed companies of Shenzhen Stock Exchange No. 3 - industry
information disclosure.
1. Main businesses, products and business models of the company during the reporting period
The company carries out industrial chain business with the aim of providing overall services to animal farming. It
has formed a relatively complete aquatic product industrial chain, and the livestock and poultry industrial chain is
also gradually being constructed. The main products include high-quality seedlings, feed, animal healthcare and pig
breeding. The business operation has covered all business links such as R&D, designing, producing, sales and
services of various products. Specifically, the company's products include feeds of chickens, ducks, geese, pigs, fish,
shrimps and crabs, the breeding varieties including pigs, shrimps, fish fry and chickens, as well as biological
products, veterinary medicine, vaccines and other products required for producing livestock, poultry and
aquaculture.
(1) Main business and products
The core business of feed is integrated with seedling and animal healthcare products as two wings for
breeding industry
Feed business is the core foundation of the company. Based on fully understanding the needs of farmers, the
company has developed its aquatic seedlings and animal healthcare products as supplements to facilitate the growth
19
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
of the feed business after over ten years’ relentless efforts. After more than 20 years of development, the company's
feed business has accumulated a wide range of customer resources. Through providing customers with valuable
high-quality animal seedlings and cost-effective feed products in the market, relying on breeding technical services
to drive the development of vaccines, veterinary medicines, biological products and other animal healthcare
products, the company can better support customers to achieve breeding success through a full set of breeding
services, and help customers realize that healthy breeding at the same time, can also better control the breeding cost
and obtain the competitive advantage in respect of end products.
Extended development of breeding and product processing
Based on the healthy development of feed, seedling and animal healthcare business, the company has formed the
core competitiveness in breeding chains, therefore in recent years, the company has begun to cultivate the breeding
and food processing businesses. In terms of livestock and poultry breeding, the company mainly focuses on pig
breeding, and gradually expands pig slaughtering and poultry slaughtering. In terms of aquaculture, the company
has started the cultivation and processing of special aquatic products such as raw fish and shrimp using its own
high-quality seedlings, feed and animal protection products. With the company's investment in aquatic product
research and development and the presentation of achievements, the company will gradually expand the cultivation
of other high-quality fish and shrimp products.
(2) Major business model
The company started its development from the feed business. Due to the abundant customer resources, based on
deeply understanding and excavating the needs of customers, the company continuously enriched and provided
customers with products and services. From feed products extending to seedling breeding, veterinary medicine and
vaccine products’ R&Dand manufacturing with higher technical and economic added value, the production and
marketing scale of high value-added products gradually expanded, and the proportion of income structure also
increased year by year. In recent years, through the extension of the industrial chain, the company has begun to
gradually go further into the industrial links such as breeding and food processing. The business model has been
orderly developed and extended with various industrial sectors supporting and developing each other.
Feeds, seedlings and animal healthcare products business
With the increasing scale of feed business, the business management is mainly carried out with the business model
of the centralized procurement of raw materials, the distribution of production layout, sales of products
accompanied by technical services. The adoption of the centralized procurement model of group headquarter plus
20
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
regional center is combined with hedging and other methods for agricultural products and other bulk raw materials
to achieve better procurement cost advantages and risk control. In terms of production, on the basis of being closer
to the market, convenient in logistics and rich in resources, the company currently has feed factories distributed in
nearly 100 cities in China and Southeast Asia. Distribution together with direct sales is the company's main sales
model. Focusing on localized marketing, the company has fully established distribution channels to efficiently solve
farmers' capital and transportation needs. Through establishing service stations in main production areas, the
technical service teams directly visit farmers to provide professional services for breeding and have achieved
functional complementation and collaboration with sales organization and management teams in terms of sales and
service as well as channel and farmers. High-quality animal seedlings, biological Products, veterinary drugs and
vaccines become indispensable and constitute a package of integrated products and tools to provide services for
farmers.
The business models for seedlings and animal healthcare products reflect the distinctive features of research and
development with technology as the guide, differentiated products as the carrier, and technical support as the main
promotion strategy. Seedlings and animal healthcare products demand a long period of investment in research and
development. Technology accumulation needs better predictability and market insight, and strong originality of
products. To provide better service support, it is necessary to invest in the long term and to build service teams with
advanced technology, knowledge, and experience. Therefore, a multi-level R&D system has been selected in the
business management model, supplemented by a production and process base with a higher starting point for
investment and more aggressive marketing strategy.
Animal breeding and processing business
The company's pig breeding segment is in its early stage of development, which adopts both the "self-breeding plus
farming community" model and "company plus family farm" model. The "self-breeding plus farming community"
model means that seedlings are introduced and bred to create the farming system of grandparent - parent -
commercial pig, under which reproduction is separated from breeding to ensure that the farming process is safe and
controllable. The "company plus family farms" model means that the company provides family farmers with
products for farming including seedlings, feeds, and vaccines, and provides major technical supports for farming, in
turn the farmers are responsible for animal raising and transfer the end- products back to the company for sales.
The aquatic animal farming and processing business has just started, and the primary aquatic products are fishes,
prawns and other specialty products. With its advantages in high-quality seedlings, feeds, animal healthcare and
technology, the company carries out standardized and industrialized aquaculture breeding, supplying sustainable,
21
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
healthy, traceable aquatic products (processed products) to large catering enterprises and fresh food platforms.
The company has set up professional functional departments including research institute, procurement center,
financial center, operation and development center, marketing center, process and information management center,
human resource center and Haid college at its headquarters, and set up multiple regional/business divisions
according to regions or business categories. Each professional center aims at acquiring technical and management
leadership in its field and provides technical and management standards as well as integrated and professional
management and service support for large regions/business divisions and various branches and subsidiaries. All
regional/business divisions build management platforms, give full play to four in one collaboration mechanism of
R&D, procurement, production and management, strengthen the ability to swiftly respond to the market, fully
explore market potential, and enhance refined management efficiency of all business sectors.
III. Analysis of Core Competitiveness
The products and services are centered on the needs of the animal production industry. Its core competitiveness is
represented by the capability of creating values for customers while carrying out the mission of changing rural
China. The comprehensive performance includes the rich and complete product configuration and industrial chain
layout, outstanding single product power, leading R & D ability, comprehensive aquaculture technical service
capacity, fine management ability and perfect talent training and incentive growth system.
1. Diverse and complete product configurations with strong anti-risk capacity to provide farmers with
complete products and services covering the whole production process
The company possesses a relatively abundant and complete product configuration after years of technical
investment, the transformation of R&D achievements, product accumulation and production layout around the
breeding chain, basically covering the needs of the whole process of breeding from feed, functional feed, seedlings,
medicines, vaccines and biological products, and is still developing. Among feed products, the company is one of
few domestic enterprises that can produce and distribute fish, shrimp, pig, meat and poultry, egg and poultry feed
products at the same time. Its product lines cover all kinds of highly competitive products and high market shares in
key markets. Product configuration capability requires strong customer demand insight ability, R&D organization
ability, achievement transformation ability, production base investment and construction ability, processing
organization ability, marketing promotion ability and technical service ability.
The technical content of various feed varieties is different, the gross profit rate, the market characteristics and
22
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
operation risks are also different. The company's product structure combination enables the company a higher gross
profit than the average level of the industry, and better controls the market operation risks from animal diseases and
imbalance between supply and demand, hence, the sales revenue of feed products of the company is stable and
maintains far higher rapid growth rate than that of the industry.
Over the years, the company has orderly arranged high-quality aquatic animal seedlings, aquatic animal protection
products, livestock and poultry vaccines, veterinary medicines, livestock and poultry animal protection products,
pig breeding and other businesses. The core technology in the industrial chains has gradually obtained the
advantages of technology, industrial layout and industrial synergy, cultivating more new business growth and profit
growth points for the company, and further amplifying the multiplier effect of the industrial chain and laying good
foundation for building comparative competitive advantages.
2. Distinct and excellent product power is the most important competitive advantage of the company
All series of products of the company are committed to building product power significantly ahead of competitors
and put great efforts to strengthen the explicit expression of product power. High-quality products with high pricing
have obvious advantages of ultimately better animal survival rate, growth effect and growth efficiency, and the
brand effect is prominent. Based on the leading production efficiency, the pricing of terminal products is close to the
pricing of competitors' products, pursuing outstanding product cost performance. With the support of farmers, the
overall benefits of the company are significantly higher than those of similar products. In the circumstances of the
declining aquaculture benefits， the whole industry is at a loss, however, our customers only have few loss or even
no loss.
The embodiment of product power needs the support of professional abilities indispensable including the R&D
ability of animal nutrition and raw material utilization, the formula technical ability of products, the value
procurement ability of raw materials, efficient internal operation ability and other professional abilities such as the
support of value purchasing capacity. The company's procurement team has outstanding professional capacity. The
team is young and specialized. The division of labor is carried out according to the classification of raw materials.
The industry perspective is broad, and the amount of information collection and analysis is huge. The team can track,
study and judge the market trend of large raw materials at home and abroad in real- time, and use futures tools to
hedge bulk raw materials, and effectively control the price risk and financial risk of procurement. The team finds out
many purchasing opportunities of raw materials with their outstanding purchasing capacity, making the cost
advantage of feed products and raw material trade possible. The company is the first enterprise in the industry to
23
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
successfully set up centralized procurement, with obvious advantages in scale procurement. Due to its rich
experience in the application of spot, futures, options and other procurement tools, the application method is also
relatively flexible. Long term value procurement and risk position management are also conducive to the company's
acquisition of procurement cost advantages.
Another is the company's efficient operation ability. By promoting the implementation of management software
such as SAP, EPS and business sharing system, the company has a strong informatization system, and its internal
operation is process-oriented, standardized and data based. The function of digitization is to find out efficient and
energy-saving operating methods by comparing the big data of each subsidiary company. The function of process
and standardization is to greatly improve the internal replicability. The middle office management mechanism
enables the production, R&D, procurement and manpower to respond to the market quickly and match the needs of
the market and customers in a more flexible, fast and efficient way. Efficient operation capability has become an
important support for effectively organizing the professional production of various products.
3. Technology R&D is the professional support of product creation, the foundation and driving force of the
company's development, and the core advantage of the company
At the beginning of its founded, the company established the research center to build an industry-leading R&D
system of the whole industry chain including breeding, nutrition, health, breeding and food. With the increasing of
investment in application technology, the company has focused on strengthening the technical platform
construction of each business module in the industrial chain, forming the three-level R&D system from platform
technology research to application technology development to system solution application, promoting the rapid
transformation and application demonstration of scientific and technological achievements through the effective
connection of the three-level R&D system and the operation mechanism of "Research Institute plus subsidiary
company". The company carries out research on basic, forward-looking and key problems in seven R&D directions:
animal genetics and breeding, animal nutrition and feed, animal medicine and biopharmaceutical, microbial
engineering, biochemical industry, protein engineering and healthy breeding, constantly improves the three-level
R&D system, and comprehensively and effectively supports, drives and serves the needs of the rapid development
of the whole industrial chain of the group.
The company has rich technical research reserves with the R&D team of more than 3000 people and huge funds
were invested in R&D every year. The R&D personnel include talents from animal nutrition, veterinary, breeding,
farming model, bioengineering, biochemistry, machinery and other disciplines. The transformation speed of R&D
24
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
results is fast, the investment supporting strategy can be implemented clearly and quickly, and the product allocation
ability of the company is strong.
For example, through more than 20 years of continuous research and development, the company has established a
huge animal nutrition demand database and stored a variety of raw material formula technology for feed formula.
Every year, thousands of groups of comparative experimental results are added to the animal core nutrition demand
and raw material utilization database to transform the technology into productivity. Therefore, the company has
strong ability to organize and continuously optimize the product formula and strong adaptability. It can quickly
adjust the formula when the price of raw materials fluctuates, to obtain cost competitive advantage.
The company's technical service marketing team, who knows the technology and is familiar with the products, can
go deep into fishponds and farms to understand the breeding situation in real-time. Therefore, the company has
detailed data sources for terminal consumption habits, feed breeding effect, disease prevention, breeding mode and
breeding demand, can accurately grasp the needs of farmers and put forward clear technical requirements for
product design, supporting the company's technical resources to fully focus on the core needs of customers.
By providing farmers with complete breeding services such as seedling, breeding technology, disease prevention,
breeding model, healthcare and environmental protection, it provides a strong support for the development of s core
business products of seedling, feed and animal healthcare. At the same time, the development of business provides
deeper foundation for R&D, and the technological innovations lays more solid foundations for the development of
the industry.
4. The comprehensive breeding technology service system is important for the company to coordinate the
product chain, create value for customers, continuously obtain new customers and improve customer
loyalty
In 2006, the company took the lead in providing comprehensive technical services to farmers in the industry and
established the company as a service-oriented enterprise providing overall breeding services to farmers. The
company provides farmers with products and technical service support in the whole breeding process, such as
seedling stocking mode - environmental control - epidemic prevention and control - feed - market information -
financial support, to ensure that farmers can use the most advanced breeding technology to guarantee the success
and profitability. The company has more than 9,000 experienced and passionate technical service teams in the
industry and accumulates a variety of advanced breeding modes in combination with local characteristics. There are
hundreds of highly efficient service stations in intensive breeding areas across the country, which can provide
25
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
technical services for tens of thousands of farmers at the same time. The relatively complete service system in the
industry can give full play to the advantages of product power and provide the whole process technical services of
breeding, effectively enlarging the income of customers and increase the loyalty of customers.
The company's farming technical service started from aquaculture. After more than ten years of team construction
and platform construction, the process and concept of aquaculture technical service system have penetrated all links
such as products, technology, R&D, market and operation, driving the development of the company's aquatic feed
and animal healthcare business, highlighting the effect. The process and ideas have been gradually promoted to
poultry breeding and pig breeding, in recent years, the company has achieved remarkable results on promoting the
development of livestock and poultry business by setting up livestock and poultry service stations. The
comprehensive breeding technology service has become an important brand label of the company and an important
starting point for the company to create value for customers, obtain and keep customers.
5. Continue to build an excellent operation and management team, fine management ability and promote
the sustainable development of the company
The company has a consistent, diligent and professional management team. Most of the team members have
graduated from agricultural colleges and universities and have strong professional background. The management
has a deep and comprehensive understanding of the feed industry and has accumulated abundant practical
experience. They have a grand and unified vision and goal, strong industry insight, leadership and execution
capacity. The management can adapt to the rapid change of feed industry and the higher and higher management
requirements depending on their educational background, knowledge structure, industry experience and age level.
In recent years, the industry goes through a drastic changes era. The great changes have taken place in the
development of the industry, the scale of farmers and the needs of customers. Emerging industries such as rural
finance and internet plus also continue to impact on the industry, promoting the reform and innovation of the
industry, and creating a corporate mechanism and culture that can quickly respond to changes, that is, the collective
learning ability that enables the company to continuously create value for customers, which is the foundation of the
company to keep a sustainable competitive advantage.
The business has started from aquatic premix to various aquatic compound feeds such as freshwater fish, marine fish
and shrimp, from the core advantages of aquatic feed to the advantages of livestock and poultry feed, from simple
feed management to comprehensive service capabilities such as providing breeding, animal protection and breeding
technical services for farmers, and has experienced many expansion from South China to central China, East China,
26
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
North China, Southeast Asia and South America, the process of being stronger and bigger and leading the industry
depends on the collective learning ability of the company's management and all employees. This capacity and
culture keep the company in learning progress and growing in learning.
6. The perfect talent training system and effective incentive mechanism have laid the foundation for the
sustainable and stable development of the company
The company continues to promote the establishment of an organizational atmosphere for talent training. Through
Haida college and the human resources center, the company has built the three-way training system covering the
whole career of employees, the whole business of the company and the whole post of business. The system is the
learning ecosystem combining universal education and elite training, matched with standardized skill training at all
levels to realize the standardized rapid endogenous talent training and output mechanism. With the continuous
development of the company's business and the deep extension of the industrial layout, a number of young,
enthusiastic, energetic young cadres with new ideas and new era labels have become the mainstay of the company's
middle-level management and core technical backbone. Through the establishment of school enterprise cooperation
and the integration of industry and education, the company attracts a large number of excellent college students to
join every year, forming the reserve talent team to support the sustainable development of the company. Through the
establishment of China Modern Fishery Vocational Education Group and the establishment of Rural Revitalization
college, a large number of new farmers are attracted to participate in the construction of technical and industrial
talent team. The establishment of internal and external talent system has realized the talent system pattern on
internal talent training and external industry empowerment and driving the overall progress of the industry.
Since the listing of company, it has launched multi-stage equity incentive plan and employee stock ownership plan
for core management and core technical members at different levels, established a unified incentive mechanism of
long-term and short-term incentives and constraints in consistent with the interests of all shareholders, and ensured
the implementation of the development strategy and business objectives through setting performance objectives and
incentives for the sustainable and stable development of the company.
27
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
IV. The analysis of main business
1.Overview
(1) Analysis of industry competition pattern
China will face unprecedented drastic changes in the industry of agricultural and animal husbandry in next 3-5 years.
The growth inflection point appears in the industry. In past two decades, the industry has been developing in the
increasing growth. All links in the breeding industry chain, both enterprises and practitioners obtain the growth
dividends from the expansion of market demand. However, we will face stagnant consumption and growth, and
even the decline growth of the industry in next few years. From the continuous deterioration of international
environment and the great difficulties and challenges faced by domestic economy, the total domestic meat demand
is likely to continue to decline, posing a severe challenge to the survival of most agricultural and animal husbandry
enterprises. The entire animal industry faces extreme serious overproduction. In 2019, African swine fever caused
the periodic shortage of pork. The high pig price drove the whole industry go crazy. In last two and a half years,
hundreds of billions and trillions of investments into the industry caused the serious overproduction of pork. Driven
by high meat prices, the poultry industry has also increased significantly in last three years, also forming a serious
overproduction to make the matter worse. In the next few years, the whole pig and poultry industry chain will face a
cruel process of capacity reduction. All enterprises will face all challenge of capital, technology, team and cost
control ability. Some will have difficult to survive without professional ability, technical ability and service ability.
The industry will reshuffle fast and firmly. The cost of breeding industry increases rapidly with the continuously
rising expenses of land, infrastructure, environmental protection, labor and raw materials. Grain is expected to
remain high price in next two or three years. The intensified situation of high grain prices, and the weak
consumption and other high costs will put huge pressure on the industrial chains.
The company fully understands and senses the changes in the future industry and has been making efforts on
strategic layout and internal capacity-building in last two years. After strengthening the core competitive advantages
and team training, rapidly improving organizational management ability and internal efficiency, and creating
differentiated competitive advantages through innovation, the company can face the challenges in the next few
years and transfer huge pressure into the driving force for team development. The company will face more brutal
competition and ensure to achieve the five-year development plan from 2021 to 2025.
After the practice of the past two years, the strategic plan of the company has become clearness. Feed, seedling and
animal healthcare products are the core businesses and the technology and team ability continue to improve, laying
28
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
the foundation for rapid growth in the next few years. On the premise of stability, the breeding business should be
cultivated patiently, the pig business should maintain the existing investment scale in the relatively light asset model,
and quickly improving the management ability and professional ability. At present, the cost of raising pigs has been
well controlled and strive to reach the industry top- level within two years. No more investment will be used for
poultry breeding and slaughtering, and the original poultry business will aim to improve its capacity. The
aquaculture business will focus on the industrialized shrimp farming and raw fish farming which the company
already has the overall advantages. The industrialized shrimp farming business is expected to become the new
growth point of the company in addition to feed, seedlings and animal healthcare in next two years.
Feed business is still in its gold stage among the breeding industry chain and the core business of the company in the
middle and long terms. Facing the harsh competitive environment, the company has confidence to achieve the sale
target of 40 million tons. From the perspective of industry, the downturn of consumption and the reduction of
breeding capacity in next few years will bring great pressure to the company. However, it will bring very good
development opportunities for the company from the perspective of market competition. The harsh competitive
environment will accelerate the industry integration, and the withdrawal of small and medium-sized feed enterprises.
A large number of large-scale feed enterprises have also been dragged down by their deep involvement in farming
industry in last few years. The product strength and operating efficiency in the feed sector are expected to continue
to improve and strengthen its competitive advantage over the industry. In the on-coming harsh competitive
environment, the company has ushered in better strategic development opportunities. The aquatic feed, poultry feed
and pig feed went hand in hand, and ruminant feed also began to be distributed rapidly. Aquatic feed has the most
advantage in the industry. The company will continue to expand the gap with the industry in terms of seedling,
animal healthcare, feed product strength and service mode, provide overall services for farmers, and ensure the
achievement of the high goal of 2025. In last two years, the research and development of poultry feed has begun to
subdivide the varieties of poultry feed, seeking breakthroughs in technology and create differentiated products. At
the same time, the internal efficiency has been continuously improved to make the products more competitive. The
product research and development of pig feed has made continuous progress, the production capacity layout
nationally has been basically achieved, and the pig feed is expected to reach the leading position in the industry in
2025. Another support system for poultry and pig feed is the establishment of service station starting in 2021, which
is long-term strategy. The company has patience, determination and confidence to reach the "thousand station plan"
and strives to establish the competition threshold of livestock and poultry feed in 2025.
29
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
(2) Main business analysis
In 2021, the company achieved an operating revenue of 85.999 billion yuan, the year-on-year increase of 42.56%;
The net profit attributable to the shareholders of the listed company was 1.596 billion yuan, the year-on-year
decrease of 36.73%. Among them, the operating revenue of pig breeding sector was about 4.642 billion yuan, the
year-on-year increase of 25.08%. The net profit attributable to the shareholders of the listed company in the pig
breeding business was -896 million yuan, the year-on-year decrease of 238.09%. Excluding other businesses of pig
breeding, the company achieved an operating revenue of 81.357 billion yuan, the year-on-year increase of 43.71%,
and the net profit attributable to shareholders of listed companies was 2.492 billion yuan, the year-on-year increase
of 32.97%.
1. Feed sales achieved new high, and the market share was further increased
During the reporting period, the company sold 19.63 million tons of feed, including 860,000 tons of the internal
breeding. The company achieved 18.77 million tons of external feed sales, the year-on-year increase of 28%, much
higher than the growth rate of the industry, and further increased the market share. ① Poultry feed achieved the
external sales of 9.44 million tons, the year-on-year increase of 11%. Relying on the advantages of product strength,
the company expanded its cooperation with large-scale breeding plants and one-stop breeding companies to provide
customized products and breeding schemes. Under the condition of sharp declining demand, the poultry feed still
achieved contrarian growth. ② Pig feed sales reached 4.6 million tons, the year-on-year increase of 100%. After
the investment of R & D and the team building of pig feed in recent years, the customer recognition of the
company's pig feed brand continues to increase, the key sales areas of products are further expanded from the
original South and central China to north, southwest and northwest regions, and quickly obtain product competitive
advantages in these new markets. ③ the sales of aquatic feed reached 4.67 million tons, the year-on-year increase
of 21%. In 2021, the price of common fish was high, the breeding profit was huge, and the demand for feed was
strong. The company's common fish feed (granular material and ordinary expanded material) increased by 21%
year-on-year; However, due to the decline of catering consumption demand and the degradation of seedlings, the
demand for special water fish feed is low, and the sales volume is basically the same; Benefiting from the company's
advantages in shrimp seedlings, shrimp feed, aquatic animal protection and service model, the annual sales of
shrimp and crab feed increased by 35% year-on-year.
2. Seedlings and animal healthcare products continue to grow, the breeding service system was further improved,
and the core competitiveness was continuously enhanced
30
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
Seedling business: the seedling business is mainly aquatic seedlings with prominent core technology advantages
and excellent profitability. During the reporting period, the operating revenue was 855 million yuan, with the
year-on-year increase of 42.30% and the gross profit margin of 51.22%. Aiming at solving the key problem of the
degradation of germplasm resources in the aquatic seed industry, the company has developed and launched a variety
of new national aquatic varieties such as Litopenaeus vannamei "haixingnong No. 2" shrimp seedlings and long
pearl hybrid mandarin fish. Among them, Litopenaeus vannamei "haixingnong No. 2" is selected using multiple
parent shrimp populations from different regions of the world, and the growth and survival rate as the breeding goal
and family BLUP breeding technology combined with molecular assisted breeding technology for five consecutive
generations. Compared with common shrimp seedlings, "haixingnong 2" has the characteristics of fast growth,
strong stress resistance and high survival rate. Combined with the company's feed and animal healthcare products,
the breeding service scheme is outstanding in various breeding areas The breeding success rate is far higher than the
market level, quickly driving the sales of shrimp feed.
The animal healthcare business realized an operating revenue of 892 million yuan, a year-on-year increase of 34.27%
and a gross profit margin of 50.85%. Among them, the operating income of aquatic animal healthcare products
reached 676 million yuan, with a year-on-year increase of 26.48% and a gross profit margin of 54.10%. Livestock
and poultry animal healthcare business realized an operating revenue of 216 million yuan, a year-on-year increase of
66.29% and a gross profit margin of 40.70%. During the reporting period, the company continued to promote the
"thousand store plan" of the core breeding regional service station. By integrating the advantages of the company's
industrial chain, the company established a comprehensive service platform for advanced products and technologies
in the industry, provided breeding technical services for farmers, expanded the company's leading advantages in the
industry, and established the entry threshold for livestock and poultry feed and breeding services.
3.With the support of specialization, the company will extend to the upstream and downstream of the industrial
chain to create multi-dimensional comprehensive competitiveness
In the pig breeding business, about 2 million pigs were sold throughout the year, realizing an operating revenue of
about 4.642 billion yuan, the year-on-year increase of 25.08%. Since the company mainly focused on the
construction of breeding team in the early stage without the breeding system established, the pigs in 2021 were
mainly fattened by purchasing piglets. Affected by the sharp fluctuations of piglets and pigs’ prices during the
reporting period, the pig breeding business lost 896 million yuan in the whole year. The pig breeding team has
professional breeding technology, veterinary technology and environmental protection technology. During the
reporting period, the biological prevention and control ability of the pig breeding team was further improved. The
31
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
breeding survival rate at the fattening stage exceeded 90%. Combined with R&D and scale advantages of feed
products, the pig breeding cost decreased significantly.
Aquaculture business: the company started to enter the aquaculture business in recent years. The main aquaculture
varieties include special aquatic products such as raw fish and shrimp. At present, the business is at cultivation stage,
and the operating revenue in the reporting period is 618 million yuan. Compared with traditional aquaculture
breeding, the company has obvious advantages such as the industrial shrimp breeding plants designed scientifically,
the recycling water system and biological bait technology and the precisely management system, the company will
further expand the scale of aquaculture in the future.
Poultry industry business, including poultry breeding and slaughtering business, achieved an operating revenue of
2.457 billion yuan during the reporting period, with the year-on-year increase of 36.70%. As the company's feed
downstream industry chain extension business, it can extend the company's understanding of the industry.
Trade business, mainly on bulk raw materials, achieved an operating revenue of 6.39 billion yuan and a gross profit
margin of 4.05% during the reporting period. As the company's feed upstream industry chain business, the trading
business of 40-million-ton procurement volume can cultivate the team and increase the understanding of the
industry.
4.Continuously increasing investment in talents and R&D to build a scientific and advanced agricultural and animal
husbandry company
Talents are the core resource of the company's development and the first productivity of the company's development.
The company attaches great importance to talent recruitment, cultivation and incentive. In 2021, more than 7,300
employees were hired, with the year-on-year increase of 27.88%. Among them, more than 400 personnel with
master's degree and doctoral degree, with the year-on-year increase of 37%, 887 technicians with the year-on-year
increase of 41%, and the proportion of higher education and technical talents were further increased. At the same
time, the company has implemented the new equity incentive plan, covering more than 4,000 core persons and
technical talents. Due to the personnel growth, structural changes and the implementation of the new incentive plan,
the annual personnel cost was 4.54 billion yuan with the significant increase over last year, the year-on-year increase
of 39.91%.
In 2021, the company invested 653 million yuan in R&D, with the year-on-year increase of 36.24%. TheR&D team
has exceeded 3,000 people including more than 700 doctors and masters. The key jobs of feed in the company
includes the revision and improvement of animal nutrition and feed formula database, the development and
application of feed resources, especially protein resources, the technology of raw material toxins treatment, the
32
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
development and application of precision nutrition, green environmental protection, non- antibiotics feed,
functional feed and feed additives. The breeding model focuses on exploring the healthy livestock and poultry
breeding model suitable for small-scale intensive breeding. In terms of breeding, the company focuses on the
development of new varieties such as shrimp, tilapia, blunt snout bream, mandarin fish, Australian lobster, grass
carp and raw fish. In terms of biological products, the company focuses on the disease prevention and controlling
technology of livestock, poultry and aquatic animals, as well as the development of vaccines, detection kits and
disinfectant products.
5.Accelerate the regional and product layout for further increasing the market share
During the reporting period, the company paid 4.659 billion yuan in cash for the purchase and construction of fixed
assets, intangible assets and other long-term assets. From 2020 to 2021, due to the impact of COVID-19 and the
substantial increase of agricultural product prices, the enterprises was rapidly integrated. The company seized the
opportunity to actively plan and increase the investment in feed production capacity. The newly invested production
capacity is nearly 5 million tons, covering all feed product lines, of which the production capacity of special aquatic
shrimp is increased by nearly 2 million tons. At the same time, the company added more than 30 feed plants through
leasing, M & A and cooperative operation, and increased the production capacity by about 3.7 million tons, laying
the foundation for achieving the target feed output of 40 million tons.
In addition, according to the market development trend, the company has actively arranged new products and
categories, such as ruminant feed, pig premix, concentrated feed and other varieties. During the reporting period, the
company has made certain reserves in market development and team construction.
2. Revenue and cost
(1) Components of operating income
Unit: RMB
2021 2020
% of operating % of operating Increase/decrease
Amount Amount
income income
Total operating
85,998,559,748.78 100% 60,323,862,405.94 100% 42.56%
income
By industry
Feed industry 77,369,298,601.07 89.97% 53,955,776,608.48 89.44% 43.39%
Farming industry 8,629,261,147.71 10.03% 6,368,085,797.46 10.56% 35.51%
33
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
By product
Feed sales 69,825,872,761.95 81.19% 48,765,213,907.42 80.84% 43.19%
Animal healthcare
892,463,422.53 1.04% 664,662,163.91 1.10% 34.27%
products sales
Agricultural sales 8,629,261,147.71 10.03% 6,368,085,797.46 10.56% 35.51%
Trade business 6,389,973,548.31 7.43% 4,404,959,107.51 7.30% 45.06%
Other 260,988,868.28 0.30% 120,941,429.64 0.20% 115.80%
By region
Southern China 55,147,949,625.58 64.13% 34,089,748,602.32 56.51% 61.77%
Eastern China 10,648,037,268.13 12.38% 8,782,920,530.71 14.56% 21.24%
Northern China 26,902,001,964.34 31.28% 21,128,275,963.35 35.02% 27.33%
Central China 20,310,973,692.55 23.62% 12,591,006,531.74 20.87% 61.31%
Overseas 7,058,846,596.73 8.21% 5,586,714,516.28 9.26% 26.35%
Combined offset -34,069,249,398.55 -39.62% -21,854,803,738.46 -36.23% 55.89%
(2) Industries, products, regions or sales models accounting for over 10% of operating income or operating
profit of the Company
√ Applicable □ Not applicable
Unit: RMB
Increase/decrease Increase/decrease
Increase/decrease
of operating of gross profit
of operating costs
income as margin as
Gross profit as compared to
Operating income Operating costs compared to the compared to the
margin the corresponding
corresponding corresponding
period of the
period of the period of the prior
prior year
prior year year
By industry
Feed industry 77,369,298,601.07 70,138,650,435.90 9.35% 43.39% 45.06% -1.04%
Farming
8,629,261,147.71 8,560,127,195.18 0.80% 35.51% 73.23% -21.60%
industry
By product
Feed sales 69,825,872,761.95 63,485,844,564.16 9.08% 43.19% 45.16% -1.24%
Animal
healthcare 892,463,422.53 438,660,889.58 50.85% 34.27% 33.55% 0.27%
products sales
Agricultural
8,629,261,147.71 8,560,127,195.18 0.80% 35.51% 73.23% -21.60%
sales
34
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
Trade business 6,389,973,548.31 6,131,124,456.61 4.05% 45.06% 44.01% 0.70%
By region
Southern China 55,147,949,625.58 50,950,143,007.06 7.61% 61.77% 70.67% -4.82%
Eastern China 10,648,037,268.13 9,929,998,592.89 6.74% 21.24% 21.45% -0.17%
Northern China 26,902,001,964.34 25,862,468,378.71 3.86% 27.33% 29.97% -1.96%
Central China 20,310,973,692.55 19,609,992,345.12 3.45% 61.31% 66.93% -3.25%
Under the circumstances that the statistics specification for the Company’s principal operations data experienced adjustment in the
reporting period, the principal operations data upon adjustment of the statistics specification at the end of the reporting period in the
latest year
□ Applicable √ Not applicable
(3) Whether revenue from sales in kind is higher than revenue from services
√ Yes □ No
Increase/
By industry Item Unit 2021 2020
decrease
Sales volume (including
10,000 tons 1,963.01 1,520.53 29.10%
internal farming volume)
Feed
industry Production output 10,000 tons 1,968.72 1,469.58 33.96%
Inventories 10,000tons 24.34 18.64 30.58%
Explanation on why the related data varied by more than 30%
√ Applicable □ Not applicable
The Company’s production output and inventories increased 33.96% and 30.58% respectively during the reporting period compared
with last year, primarily driven by the expansion of the Company's operating scale.
(4) Performance of material sales contracts and material procurement contracts of the Company during the
reporting period
□ Applicable √ Not applicable
(5) Composition of operating costs
By industry and product
Unit: RMB
2021 2020
By industry Item % of total % of total Increase/decrease
Amount Amount
operating costs operating costs
Feed industry Material costs 66,949,873,406.58 95.45% 46,208,636,806.18 95.57% 44.89%
35
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
Feed industry Labor costs 811,822,422.69 1.16% 577,162,499.20 1.19% 40.66%
Manufacturing
Feed industry 2,125,642,816.64 3.03% 1,381,867,251.75 2.86% 53.82%
expenses
Contract
Feed industry performance 168,291,264.44 0.24% 152,737,782.34 0.32% 10.18%
costs
Feed industry Others 83,020,525.57 0.12% 29,918,004.28 0.06% 177.49%
Total of feed
70,138,650,435.92 100.00% 48,350,322,343.75 100.00% 45.06%
industry
Farming industry Material costs 7,313,386,810.78 85.44% 3,977,617,606.06 80.49% 83.86%
Farming industry Labor costs 780,987,405.81 9.12% 632,978,273.06 12.81% 23.38%
Manufacturing
Farming industry 443,554,945.17 5.18% 323,797,587.09 6.56% 36.99%
expenses
Contract
Farming industry performance 22,198,033.43 0.26% 7,063,849.47 0.14% 214.25%
costs
Total of farming
8,560,127,195.18 100.00% 4,941,457,315.68 100.00% 73.23%
industry
Unit: RMB
2021 2020
By product Item % of total % of total Increase/decrease
Amount Amount
operating costs operating costs
Feed sales Material costs 60,455,275,979.29 95.23% 41,661,229,143.22 95.26% 45.11%
Feed sales Labor costs 785,254,553.84 1.24% 568,414,674.05 1.30% 38.15%
Manufacturing
Feed sales 2,093,425,159.76 3.30% 1,370,569,543.68 3.13% 52.74%
expenses
Contract
Feed sales performance 151,888,871.26 0.24% 134,263,615.31 0.31% 13.13%
costs
Total feed sales 63,485,844,564.16 100.00% 43,734,476,976.26 100.00% 45.16%
Animal
healthcare Material costs 363,472,970.68 82.86% 289,949,820.97 88.27% 25.36%
products sales
Animal
healthcare Labor costs 26,567,868.84 6.06% 8,747,825.15 2.66% 203.71%
products sales
Animal Manufacturing
32,217,656.88 7.34% 11,297,708.07 3.44% 185.17%
healthcare expenses
36
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
products sales
Animal Contract
healthcare performance 16,402,393.18 3.74% 18,474,167.03 5.63% -11.21%
products sales costs
Total animal
healthcare 438,660,889.58 100.00% 328,469,521.22 100.00% 33.55%
products sales
Agricultural sales Material costs 7,313,386,810.78 85.44% 3,977,617,606.06 80.49% 83.86%
Agricultural sales Labor costs 780,987,405.81 9.12% 632,978,273.06 12.81% 23.38%
Manufacturing
Agricultural sales 443,554,945.17 5.18% 323,797,587.09 6.56% 36.99%
expenses
Contract
Agricultural sales performance 22,198,033.43 0.26% 7,063,849.47 0.14% 214.25%
costs
Total
agricultural 8,560,127,195.18 100.00% 4,941,457,315.68 100.00% 73.23%
sales
Trade business Sales costs 6,131,124,456.61 100.00% 4,257,457,841.99 100.00% 44.01%
Other Sales costs 83,020,525.57 100.00% 29,918,004.28 100.00% 177.49%
Notes:
N/A
(6) Change of scope of consolidation during the reporting period
√ Yes □ No
During the year, the scope of consolidation included 497 subsidiaries, increasing by 123 and reducing by 15 as
compared with the last year. For details, please refer to the Note "VI. Change in Consolidation Scope" and the
Note "VII. Interests in Other Entities" in Section X “Financial Statements".
(7) Significant change in or adjustment of the businesses, products or services of the Company during the
reporting period
□ Applicable √ Not applicable
(8) Sales to major customers and major suppliers
Sales to major customers of the Company
Total sales to top 5 customers (RMB) 1,777,398,802.96
Total sales to top 5 customers as a percentage of the total
2.07%
sales for the year
37
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
Sales to top 5 customers who are related parties as a
0.00%
percentage of the total sales for the year
Information on top 5 customers of the Company
As a percentage
No. Name of customer Sales (RMB) of the total sales
for the year (%)
1 No. 1 379,928,490.98 0.44%
2 No. 2 378,020,407.86 0.44%
3 No. 3 376,844,952.88 0.44%
4 No. 4 338,320,135.88 0.39%
5 No. 5 304,284,815.36 0.35%
Total -- 1,777,398,802.96 2.07%
Other explanation of major customers
√ Applicable □ Not applicable
The top five customers of the Company are mainly customers of raw materials and poultry feed. The top five customers have no
related relationship with the Company. The Company’s directors, supervisors, senior management, core technical personnel,
shareholders holding more than 5% of shares, actual controller and other related parties do not have direct or indirect interest in the
major customers. The top five customers accounted for 2.07% of total annual sales. The Company’s sales revenue does not depend on
single or top five customers.
Major suppliers of the Company
Total purchases from top 5 suppliers (RMB) 9,773,980,706.17
Total purchases from top 5 suppliers as a percentage of
12.60%
the total purchases for the year
Total purchases from top 5 suppliers who are related
0.00%
parties as a percentage of the total purchases for the year
Information on top 5 suppliers of the Company
As a percentage of
No. Name of supplier Purchases (RMB) the total purchases
for the year (%)
1 No. 1 4,514,855,863.59 5.82%
2 No. 2 2,195,154,513.46 2.83%
3 No. 3 1,469,815,941.13 1.89%
4 No. 4 826,909,265.59 1.07%
38
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
5 No. 5 767,245,122.40 0.99%
Total -- 9,773,980,706.17 12.60%
Other explanation of major suppliers
√ Applicable □ Not applicable
The top five suppliers of the Company have no related relationship with the Company. The Company’s directors, supervisors, senior
management, core technical personnel, shareholders holding more than 5% of shares, actual controller and other related parties do
not have direct or indirect interest in the major suppliers. The top five suppliers accounted for 12.6% of total annual purchases. The
Company’s purchases do not depend on single or top five suppliers.
3. Expenses
Unit: RMB
Increase/
2021 2020 Reasons for material changes
decrease
Mainly due to the expansion of the
Company's operating scale, the increase in
Selling and distribution personnel and their salaries, the increase in
1,808,249,264.31 1,342,844,756.41 34.66%
expenses expense amortization under the 2021 share
option incentive plan, and the increase in
travel and other expenses
Mainly due to the expansion of the
Company's operating scale, the increase in
General and management personnel and their salaries and
2,228,521,838.59 1,558,972,459.50 42.95%
administrative expenses benefits, the increase in expense amortization
under the 2021 Share Option Incentive Plan,
and the increase in office expenses
Mainly due to the increased loans, the
increased interest rate of loans and interest
expenses due to the repayment of the opening
COVID-19-related subsidized loan upon
Financial expenses 402,888,653.32 236,239,259.96 70.54%
maturity, and the increased amortization of
unrecognized financing costs on lease
liabilities due to the adoption of the new
accounting standards for leases
Mainly due to a higher number of R&D
personnel and higher salaries for the R&D
Research and
652,995,298.85 479,306,685.65 36.24% personnel in a bid to enhance the research
development expenses
and development, as well as the increase in
expense amortization under the 2021 Share
39
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
Option Incentive Plan
4. Research and development investments
In 2021, the Company worked together with multiple universities and scientific research institutes including the
Ocean University of China, the South China Agricultural University, and the Pearl River Fisheries Research
Institute (PRFRI), Chinese Academy of Fishery Science (CAFS) to undertake the national key R&D plans and key
R&D projects in Guangzhou Province or Guangzhou City. Furthermore, the Company jointly undertook the
international science and technology cooperation projects of Guangdong Province with the Tiran Shipping LTD of
Israel.
Progress of major R&D projects in the current year:
Name of major Expected impact on the
Purpose Progress Specific objectives
R&D project Company
The verification test for
the effectiveness of To develop functional mixed
dozens of formulas in the animal feeds for white-leg To drive the advancement of
The development of simulated market winter shrimp that can be the animal husbandry industry
the specified animal The development of shed animal husbandry commercially promoted to by the optimization of animal
feed for white-leg functional animal conditions has been address the shortcomings of feed products and raise the
shrimp for feeds carried out. In addition, slow growth and longer influence of the Company's
wintering period the pilot test has been animal husbandry period of products on the industrial
conducted on the terminal white-leg shrimp for improvement
market of animal wintering period
husbandry
The appropriate additive
amounts of new protein
sources have been
The consumption of fish
determined. The
meals can be reduced. The
compromise on the
raw materials for animal feeds
The effectiveness growth and immune
To significantly reduce the can be more diversified and
appraisal and performance of white-leg
costs of animal feeds and environmentally friendly.
application and shrimp has been
The development of achieve better growth Meanwhile, the operation
promotion for the supplemented by adding
new protein sources performance, stronger costs of the Company can be
replacement of fish crystalline amino acids,
immunity and resistance to significantly decreased, thus
meal with new taurine,
stress for shrimps increasing the
protein sources immunopotentiator, and
competitiveness of shrimp
enzymic preparations.
feed products and creating
Consequently, the
additional value for customers
effectiveness before the
replacement has been
achieved or surpassed
40
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
The accurate nutrition
demand for shrimps in
To ensure more accurate The costs of the animal feeds
multiple animal
nutrition of shrimps, save can be significantly reduced
husbandry modes
costs of animal feeds, avoid and the animal husbandry
The establishment (higher-place pond, earth
wastes of animal feeds, costs for farmers can be
and maintenance of dike, shed, and industrial
protect the environment, magnificently decreased. The
the targeted Targeted nutrition animal husbandry) at
guarantee the more complete growth performance for
nutrition database different phases (white
digestion and absorption of shrimps can be higher, thus
for shrimps water, winter shed, etc.)
animal feeds for shrimps, and driving the green
and under different animal
significantly improve the development of the shrimp
husbandry environments
growth performance farming industry
(salinity, temperature,
etc.)
To choose raw materials that
are easier to digest and absorb
so that the gastrointestinal
tract of piglets can better
shred and digest. As a result,
The research on the
the piglets can be healthier
The establishment nutrition value evaluation
and of higher survival rate The good quality of creep
of the nutrition of different raw materials,
due to the all-around and feeds and nursing feeds can
system of the creep Targeted nutrition nutrition demand, feeding
balanced nutrition. In be created, thus making it the
feeds and nursing modes, and feed
addition, the piglets can have industrial benchmark
feeds processing has been
better intestinal development
completed
and less diarrhea. The animal
feeds can be better chewed to
make the nutrition absorption
better and more balanced to
make the piglets grow faster
In terms of the common
diseases for piglets and
breeding pigs, the Centering on the core concept
The establishment The immunopotentiator immunopotentiator can of creating values for
The development of
of the has been developed to effectively improve the customers, the animal
functional animal
disease-resistant improve the resistance to disease resistance of the husbandry efficiency can be
feeds and functional
nutrition system for bacterial and viral swine herd, thus providing a raised and brand
additives
the swine herd diseases in the swine herd stronger guarantee for the competitiveness can be given
healthy and effective play
production of the animal
husbandry of the swine herd
Research and development personnel of the Company
2021 2020 Percentage change
41
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
Research and development
3,049 2,162 41.03%
headcount
Ratio of research and
9.09% 8.24% 0.85%
development personnel
Educational background of
research and development —— —— ——
personnel
Bachelor’s degree 736 515 42.91%
Master’s degree 636 410 55.12%
Doctoral degree 111 83 33.73%
Age structure of research and
—— —— ——
development personnel
Below 30 1,701 1,179 44.27%
30~40 938 666 40.84%
40~50 266 231 15.15%
Over 50 144 86 67.44%
Research and development investments of the Company
2021 2020 Percentage change
Research and development
652,995,298.85 490,795,848.72 33.05%
investments (RMB)
Research and development
investments as % of operating 0.76% 0.81% -0.05%
income
Capitalized amount of research
and development investments 14,561,385.46 12,836,233.50 13.44%
(RMB)
Capitalized research and
development investments as %
2.23% 2.62% -0.39%
of total research and
development investments
Reasons for significant change in the composition of research and development personnel and the impact
□ Applicable √ Not applicable
Reasons for significant change in total research and development investments as % of operating income
□ Applicable √ Not applicable
Reasons for significant change in capitalization rate of research and development investments and explanations thereon
□ Applicable √ Not applicable
42
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
5. Cash flows
Unit: RMB
Increase/
Item 2021 2020
decrease
Sub-total of cash inflows from
88,764,663,792.04 62,715,373,846.39 41.54%
operating activities
Sub-total of cash outflows for
85,626,715,541.35 62,230,114,614.36 37.60%
operating activities
Net cash flows from operating
3,137,948,250.69 485,259,232.03 546.65%
activities
Sub-total of cash inflows from
4,131,496,813.28 4,079,849,668.13 1.27%
investing activities
Sub-total of cash outflows for
8,354,711,112.76 8,400,395,782.73 -0.54%
investing activities
Net cash flows from investing
-4,223,214,299.48 -4,320,546,114.60 2.25%
activities
Sub-total of cash inflows from
17,465,010,784.87 13,992,384,966.94 24.82%
financing activities
Sub-total of cash outflows for
16,686,344,678.54 9,978,234,208.90 67.23%
financing activities
Net cash flows from financing
778,666,106.33 4,014,150,758.04 -80.60%
activities
Net increase in cash and cash
-329,778,050.36 186,622,412.65 -276.71%
equivalents
Explanation on main effects of material changes
√ Applicable □ Not applicable
1. Net cash flows from operating activities increased by 546.65% as compared to the corresponding period of the
prior year mainly because the end of the prior year saw a substantial increase in inventories as compared to the
beginning of the period, resulting in a low amount of net cash flows from operating activities in the prior year.
2. Net cash flows from financing activities decreased by 80.60% as compared to the corresponding period of the
prior year mainly due to a high amount of cash inflows from financing activities as a result of the offering of
convertible corporate bonds in the prior year.
Explanation on main reasons leading to the material difference between net cash flows from operating activities
during the reporting period and net profit for the year
√ Applicable □ Not applicable
43
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
During the reporting period, the net cash flows from operating activities of the Company amounted to RMB
3,137.9483 million, which was RMB 1,326.8577 million higher than the net profit of RMB 1,811.0906 million.
The difference was mainly due to the depreciation and amortization of fixed assets, intangible assets and
productive biological assets.
V. Analysis of Non-Principal Operations
□ Applicable √ Not applicable
VI. Analysis of Assets and Liabilities
1. Material changes of asset items
Unit: RMB
As at the end of 2021 As at the beginning of 2021
As % of Percentag
As % of Description of major changes
Amount total Amount e change
total assets
assets
At the end of the period, the percentage
in total assets decreased by 2.24
percentage points; and the balance
decreased by 15.41% from the
Cash at bank and
1,739,655,125.14 4.88% 2,056,471,632.75 7.12% -2.24% beginning of the period, which was
on hand
mainly due to the increase in payments
for raw materials and investments as a
result of the expansion of the
Company's operating scale.
At the end of the period, the percentage
in total assets decreased by 0.07
percentage points; and the balance
Accounts
1,293,328,829.38 3.63% 1,067,301,941.46 3.70% -0.07% increased by 21.18% from the
receivable
beginning of the period, which was
mainly due to the expansion of the
Company's operating scale.
Contract assets 0.00% 0.00% 0.00% N/A
At the end of the period, the percentage
in total assets decreased by 0.10
percentage points; and the balance
increased by 22.98% from the
Inventories 8,922,903,666.78 25.03% 7,255,350,539.93 25.13% -0.10%
beginning of the period, which was
mainly due to the increase in stocks of
raw materials for trading and
production and the inventory of
44
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
consumptive biological assets at the
end of the period.
At the end of the period, the percentage
Investment in total assets decreased by 0.02
26,941,013.33 0.08% 29,426,486.24 0.10% -0.02%
properties percentage points, almost flat with the
beginning of the period.
At the end of the period, the percentage
in total assets increased by 0.63
percentage points; and the balance
increased by 406.30% from the
Long-term equity beginning of the period, which was
301,076,512.33 0.84% 59,465,879.68 0.21% 0.63%
investments mainly due to the increase in
investments in associates including
Guangzhou Hengjuchang Venture
Investment Partnership (Limited
Partnership).
At the end of the period, the percentage
in total assets increased by 5.06
percentage points; and the balance
increased by 46.99% from the
beginning of the period, which was
mainly because the Company’s projects
Fixed assets 11,271,964,642.07 31.62% 7,668,294,587.09 26.56% 5.06%
under construction were transferred to
fixed assets after completion and being
put into production in the year, as well
as due to the acquisition of new
companies and the increase in purchase
and construction of fixed assets.
At the end of the period, the percentage
in total assets decreased by 1.21
Construction in percentage points; and the balance
1,531,493,842.31 4.30% 1,591,741,924.42 5.51% -1.21%
progress decreased by 3.79% from the
beginning of the period, almost flat
with the beginning of the period.
At the end of the period, the percentage
in total assets increased by 0.45
percentage points; and the balance
Right-of-use increased by 32.64% from the
2,331,346,912.43 6.54% 1,757,671,818.57 6.09% 0.45%
assets beginning of the period, which was
mainly due to the new business of
leases conducted by the Company in a
bid to expand its operating scale.
45
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
At the end of the period, the percentage
in total assets decreased by 5.79
percentage points; and the balance
Short-term loans 3,782,336,144.35 10.61% 4,735,948,585.16 16.40% -5.79% decreased by 20.14% from the
beginning of the period, which was
mainly due to the adjustments to the
debt structure.
At the end of the period, the percentage
in total assets decreased by 1.19
Contract percentage points; and the balance
1,908,259,980.27 5.35% 1,889,338,880.88 6.54% -1.19%
liabilities increased by 1.00% from the beginning
of the period, almost flat with the
beginning of the period.
At the end of the period, the percentage
in total assets increased by 8.35
percentage points; and the balance
Long-term loans 4,411,107,883.25 12.37% 1,161,404,700.00 4.02% 8.35% increased by 279.81% from the
beginning of the period, which was
mainly due to the adjustments to the
debt structure.
At the end of the period, the percentage
in total assets increased by 0.38
percentage points; and the balance
increased by 34.97% from the
Lease liabilities 1,578,746,388.19 4.43% 1,169,692,122.19 4.05% 0.38%
beginning of the period, which was
mainly due to the new business of
leases conducted by the Company in a
bid to expand its operating scale.
At the end of the period, the percentage
in total assets increased by 0.68
percentage points; and the balance
increased by 36.36% from the
Prepayments 2,550,853,738.02 7.16% 1,870,673,397.18 6.48% 0.68% beginning of the period, which was
mainly due to the increase in
prepayments for raw materials as a
result of the rapid development of the
Company’s business.
At the end of the period, the percentage
in total assets increased by 0.44
Productive percentage points; and the balance
508,486,715.64 1.43% 286,202,211.97 0.99% 0.44%
biological assets increased by 77.67% from the
beginning of the period, which was
mainly due to the increase in sows bred
46
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
and purchased by the Company.
At the end of the period, the percentage
in total assets increased by 1.14
percentage points; and the balance
Notes payable 407,090,978.58 1.14% - - 1.14%
increased by 100% from the beginning
of the period, which was mainly due to
the procurement of raw materials.
At the end of the period, the percentage
in total assets increased by 4.23
percentage points; and the balance
Accounts payable 4,051,704,338.04 11.37% 2,060,550,537.54 7.14% 4.23% increased by 96.63% from the
beginning of the period, which was
mainly due to the procurement of raw
materials.
At the end of the period, the percentage
in total assets increased by 0.19
percentage points; and the balance
increased by 30.99% from the
Employee
1,212,811,083.04 3.40% 925,893,314.96 3.21% 0.19% beginning of the period, which was
benefits payable
mainly due to the increase in
employees and their salaries and
benefits as a result of the expansion of
the Company's operating scale.
At the end of the period, the percentage
in total assets increased by 0.39
Non-current percentage points; and the balance
liabilities due 563,923,844.74 1.58% 344,310,074.48 1.19% 0.39% increased by 63.78% from the
within one year beginning of the period, which was
mainly due to the increase in long-term
loans due within one year.
At the end of the period, the percentage
in total assets increased by 1.65
percentage points; and the balance
increased by 379.18% from the
Treasury stock 792,321,152.16 2.22% 165,350,332.65 0.57% 1.65% beginning of the period, which was
mainly due to the repurchase of shares
for intended use in equity incentive
and/or employee stock ownership
plans.
At the end of the period, the percentage
Non-controlling
1,472,249,227.12 4.13% 985,903,096.95 3.41% 0.72% in total assets increased by 0.72
interests
percentage points; and the balance
47
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
increased by 49.33% from the
beginning of the period, which was
mainly due to the receipt of capital
increases from non-controlling
shareholders and entities with
non-controlling shareholders making
profits during the reporting period
compared with the prior year.
Overseas assets account for a larger proportion in total assets
□ Applicable √ Not applicable
2. Assets and liabilities measured at fair value
√ Applicable □ Not applicable
Unit: RMB
Cumulat
ive Impairm
Gain or loss fair ent
Purchases
from changes in value provided Disposal during Other
Item Opening balance during the Closing balance
fair value during changes during the period changes
period
the period recogniz the
ed in period
equity
Financial
assets
1.
Held-for-tradi
ng financial
assets
86,719,309.28 85,867,798.79 2,507,784.13
(exclusive of
derivative
financial
assets)
Sub-total of
financial 86,719,309.28 85,867,798.79 2,507,784.13
assets
Others (note) 504,417,562.64 36,000,000.00 253,848,262.09 286,569,300.55
Total of the
591,136,871.92 85,867,798.79 0.00 0.00 36,000,000.00 253,848,262.09 0.00 289,077,084.68
above
Financial
127,446,229.19 -38,761,796.62 44,174,431.17
liabilities
48
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
Note: Others include bank’s wealth management products and non-current financial assets measured at fair value.
Contents of other changes
Whether there were any material changes on the measurement attributes of major assets of the Company during the reporting period
□ Yes √ No
3. Restriction on asset rights as at the end of the reporting period
As at the end of the reporting period, the Company still had restricted assets of RMB 94,004,157.88, which were
mainly land reclamation deposits, letter of credit deposits, guarantee deposits, deposits for bank guarantees, and
collaterals for loans.
VII. Analysis of Investments
1. Overview
√ Applicable □ Not applicable
Investments during
Investments during the
the corresponding period of Change
reporting period (RMB)
prior year (RMB)
4,659,257,785.73 3,390,357,467.37 37.43%
2. Material equity investments during the reporting period
□ Applicable √ Not applicable
3. Material non-equity investments during the reporting period
□ Applicable √ Not applicable
4. Financial investments
(1) Securities investments
□ Applicable √ Not applicable
The Company did not make any securities investment in the reporting period.
(2) Derivatives investments
√ Applicable □ Not applicable
Unit: RMB’0,000
Counter Relation Related- Type of Initial Start Opening Purchase Sold in Impai Closing Closin Actual
End date
party ship party derivativ investm date investm d in the the rment investme g gain/los
49
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
with the transacti e ent ent period period allow nt invest s in the
Compan on or amount amount ance amount ment period
y not (if amoun
any) t as %
of the
Comp
any’s
closin
g net
assets
Futures
contracts
Futures Non-relat 1 Jan. 31 Dec.
Not of corn, 0 22,787.37 12,917.4 9,869.97 0.62% 32,931.85
company ed party 2021 2021
soybean
meal, etc.
Forward
Commerci Non-relat 1 Jan. 31 Dec.
Not and swap 0 30,416.73 161,333.61 191,750.34 12.03% 1,216.68
al bank ed party 2021 2021
contracts
Total 0 -- -- 53,204.1 161,333.61 12,917.4 201,620.31 12.65% 34,148.54
Funding source Self-funded
Legal matters involved (if applicable ) N/A
Disclosure date of the announcement 19 January 2021
about the board’s consent for the
24 September 2021
derivative investment (if any)
Disclosure date of the announcement
about the general meeting’s consent 4 February 2021
for the derivative investment (if any)
1. The hedging business was compatible with the production and operation of the
Company. The Company strictly controlled the positions of futures and options, conducted
foreign exchange hedging transactions in strict accordance with its projected collection
period, payment period and amount, and reasonably made use of futures, options,
Risk analysis of positions held in
portfolios of the aforementioned products, foreign exchange hedging and other instruments
derivatives during the reporting
to have a lock on the Company's costs and expenses of raw materials of animal feeds and
period and explanation of control
other related products.
measures (Including but not limited
2. Relevant departments and personnel strictly controlled the scale of hedging funds,
to market risk, liquidity risk, credit
reasonably planned and used the margin, and gave operation instructions in strict
risk, operational risk, legal risk, etc.)
accordance with the Company's futures trading management policies. No operation could
be carried out unless it had been approved in light of related regulations. The Company
will reasonably allocate funds for its hedging business.
3. In accordance with the Guidelines No. 1 of the Shenzhen Stock Exchange for the
50
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
Self-regulation of Listed Companies—the Standard Operation of Main Board Listed
Companies (《深圳证券交易所上市公司自律监管指引第 1 号--主板上市公司规范运
作》), the Futures Management Policy (《期货管理制度》) and the Measures for Futures
Management (《期货管理办法》) have been formulated, which clearly stipulate the
approval authority, internal review process and risk handling procedures for hedging
business. The Company has established a special team for commodity hedging operation
and a monitoring team for commodity hedging operation, and developed corresponding
business procedures. Relevant business and activities were controlled through the
implementation of authorization, position restraint, internal audit and other measures.
4. The Company has formulated the Policy for the Management of Foreign Exchange
Hedging Business (《外汇套期保值业务管理制度》), which clearly stipulates the limit of
foreign exchange hedging business, the scope of varieties, approval authority, internal
review procedures, responsible departments and persons, information isolation measures,
internal risk reporting policies and risk handling procedures. The Policy is in conformity
with the relevant requirements of regulatory authorities, meets the needs of actual
operation, and contains effective risk control measures.
5. The Securities Department of the Company conducted regular and irregular inspections
of the hedging transaction business, and supervised the implementation of risk
management policies and risk management procedures by the personnel taking charge of
the hedging transaction business, to timely prevent operational risks in the business.
Changes in market prices or fair Since the Company's varieties of commodity hedging transactions were traded at futures
value of derivative products during exchanges, with transparent markets and active transactions, the transaction price and the
the reporting period, specific methods settlement unit price of the day could fully reflect the fair value of the derivatives. The
used and relevant assumption and varieties of foreign exchange hedging transactions were measured at the fair value on the
parameter settings shall be disclosed date of contract signing between the Company and commercial banks, and their fair value
for analysis of fair value of was subsequently measured based on the valuation notices issued by each commercial bank
derivatives at the end of the period.
The Company conducted accounting processing of hedging business in accordance with the
stipulations in the Accounting Standards for Business Enterprises No. 22 - Recognition and
Explanation of significant changes in
Measurement of Financial Instruments (《企业会计准则第 22 号——金融工具确认和计
accounting policies and specific
量》), the Accounting Standards for Business Enterprises No. 23 - Transfer of Financial
financial accounting principles in
Assets (《企业会计准则第 23 号——金融资产转移》), the Accounting Standards for
respect of the Company's derivatives
Business Enterprises No. 24 - Hedging Accounting (《企业会计准则第 24 号——套期会
for the reporting period as compared
计》) and the Accounting Standards for Business Enterprises No. 37 - Presentation of
to the previous reporting period
Financial Instruments (《企业会计准则第 37 号——金融工具列报》) as well as their
guidelines.
1. The commodity hedging business of the Company was carried out in strict accordance
with relevant policies. Therefore, the Company effectively controlled the cost of raw
Special opinions expressed by
materials related to production and trade as well as related products, and effectively
independent directors concerning the
prevented and mitigated risks. The relevant approval procedures for the Company to use its
Company's derivatives investment
own funds to carry out hedging business in commodity futures and options markets were in
and risk control
compliance with relevant national laws and regulations as well as provisions in the Articles
of Association (《公司章程》). The Company has established a sound organizational
51
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
structure and developed the Futures Management Policy 《期货管理制度》 for commodity
hedging. There is no circumstance where the interest of the Company and its entire
shareholders has been damaged.
2. The decision-making procedures of the Company for foreign exchange hedging business
were in compliance with relevant national laws and regulations as well as provisions in the
Articles of Association. The Company made use of foreign exchange hedging instruments
to reduce exchange rate risks and financial expenses and control operational risks on the
basis of normal production and operation. There is no circumstance where the interest of
the Company, its entire shareholders and especially, its minority shareholders has been
damaged. At the same time, the Company has formulated the Policy for the Management
of Foreign Exchange Hedging Business ( 《 外 汇 套 期 保 值 业 务 管 理 制 度 》 ). By
strengthening internal control and implementing risk prevention measures, specific
operation standards have been developed for the Company's foreign exchange hedging
business.
In summary, it is approved that the Company and its majority-owned subsidiaries carry out
commodity hedging business and foreign exchange hedging business within the considered
limit.
5. Use of raised funds
√ Applicable □Not applicable
(1) Overall use of raised funds
√ Applicable □Not applicable
Unit: RMB’0,000
Total
Total Total Proportion
raised Total Total Use and Raised
raised raised of total
funds with accumulati raised ownership funds that
Year for Method of Total funds that funds that accumulati
altered ve raised funds that change of have been
fund-raisin fund-raisin raised have been have been ve raised
purposes funds with have not unused left unused
g g funds used in the used funds with
during the altered been used raised for over
current accumulati altered
reporting purposes yet funds two years
period vely purposes
period
In addition
to
Public
temporary
offering of
replenishme
2020 convertible 283,000 94,835.45 187,383.54 31,477.24 31,477.24 11.12% 95,461.61 0
nt of
corporate
working
bonds
capital and
cash
52
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
managemen
t, the unused
amount of
raised funds
was
deposited in
the special
bank
account for
fund-raising
projects.
Total -- 283,000 94,835.45 187,383.54 31,477.24 31,477.24 11.12% 95,461.61 -- 0
Explanation of the overall use of raised funds
Upon the approval of the China Securities Regulatory Commission (hereinafter referred to as "CSRC") through the issuance of the
Approval on the Public Offering of Convertible Corporate Bonds by Guangdong Haid Group Co., Limited 《关于核准广东海大集
团股份有限公司公开发行可转换公司债券的批复》) (Zheng Jian Xu Ke [2020] No. 205), the Company was allowed to issue
convertible corporate bonds with a total face value of RMB 2,830 million to the public. Actually, the Company issued 28.30 million
convertible corporate bonds with a face value of RMB 100 each to the public, and raised RMB 2,830,000,000.00 of funds in total.
After deducting the fees related to the issuance, the actual net raised funds was RMB 2,810,854,230.16. The availability of the
above-mentioned raised funds has been verified by Grant Thornton China (Special General Partnership), which issued the Capital
Verification Report (《验资报告》) (Grant Thornton Yan Zi [2020] No. 440ZC0065) on 26 March 2020.
As at the end of 2021, the Company used RMB 1,873.8354 million of raised funds, accrued RMB 17.8325 million of interest
income (with banks' handling fees deducted), and temporarily replenished the working capital with RMB 874 million of idle raised
funds. The balance of its special account for raised fund deposit was RMB 80.6161 million.
(2) Committed projects of raised funds
√ Applicable □Not applicable
Unit: RMB’0,000
Whether Accumul
The Investme
projects Total ative Date Whether
Adjusted investme nt Benefits Whether
have committe investme when the there are
Committed investment total nt progress recorded the
been d nt projects material
projects and investment investme amount as at the during estimated
altered investme amount are ready changes
of excessive raised nt during end of the the benefits
(includin nt with as at the for their in the
funds amount the reporting reporting are
g partial raised end of the intended project
(1) reporting period (3) period reached
alternatio funds reporting use feasibility
period ＝(2)/(1)
n) period (2)
Committed investment projects
Animal feed project of 31 October
No 7,144.21 7,144.21 3,450.59 7,200.25 100.78% 1,121.83 No No
Nantong Haid with an 2021
53
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
annual output of 240,000
tons (hereinafter referred to
as the "Nantong Haid
project")
Animal feed project of
Qingyuan Haid with an
30
annual output of 240,000
No 6,493.11 6,493.11 1,049.5 6,504.38 100.17% September 2,713.24 Yes No
tons (hereinafter referred to
2021
as the "Qingyuan Haid
project")
Animal feed project of
Huai'an Hailong with an
31
annual output of 200,000
No 16,123.49 16,123.49 1,208.12 9,625.98 59.70% December -13.62 No No
tons (hereinafter referred to
2022
as the "Huai'an Hailong
project")
Animal feed project of
Nanning Haid with an
30
annual output of 480,000
No 23,589.07 23,589.07 7,752.94 18,839.4 79.86% November 886.23 No No
tons (hereinafter referred to
2021
as the "Nanning Haid
project")
Animal feed project of
Zhaoqing Gaoyao with an
annual output of 240,000 30 April
No 4,679.43 4,679.43 4,679.43 100.00% 1,722.37 No No
tons (hereinafter referred to 2020
as the "Zhaoqing Gaoyao
project")
Animal feed project of
Fuzhou Haid with an annual
30 June
output of 180,000 tons No 29,075.05 29,075.05 6,354.32 15,019.38 51.66% -1,896.97 No No
2022
(hereinafter referred to as the
"Fuzhou Haid project")
Animal feed project of
Qingyuan Haibei with an
annual output of 30,000 tons Yes 15,053.58 2,176.01 111.38 2,176.01 100.00% N/A Yes
(hereinafter referred to as the
"Qingyuan Haibei project")
Animal feed project of
31
Shaoguan Haid with an
No 13,964.32 13,964.32 4,331.17 14,036.59 100.52% December 2,208.59 Yes No
annual output of 400,000
2021
tons (hereinafter referred to
54
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
as the "Shaoguan Haid
project")
Animal feed project of
Qingyuan Hailong with an
31
annual output of 720,000
No 36,955.3 36,955.3 13,001.8 29,247.41 79.14% December 1,952.43 No No
tons (hereinafter referred to
2022
as the "Qingyuan Hailong
project")
Animal feed project of
Yicheng Haid with an annual 31
output of 380,000 tons No 16,509.88 16,509.88 7,536.59 8,996.37 54.49% December -470.74 No No
(hereinafter referred to as the 2022
"Yicheng Haid project")
Animal feed project of
Hexian Haid with an annual
30 June
output of 300,000 tons No 21,344.95 21,344.95 9,453.32 18,097.16 84.78% -610.3 No No
2022
(hereinafter referred to as the
"Hexian Haid project")
Animal feed project of
Kaifeng Haid with an annual
30 June
output of 300,000 tons No 17,069.03 17,069.03 5,175.76 10,800.57 63.28% 902.99 Yes No
2022
(hereinafter referred to as the
"Kaifeng Haid project")
Animal feed project of
Zhanjiang Haid with an
annual output of 200,000
Yes 20,380.33 N/A Yes
tons (hereinafter referred to
as the "Zhanjiang Haid
project")
Animal feed project of Yulin
Haid with an annual output 31
of 450,000 tons (hereinafter No 31,186.61 31,186.61 8,593.76 11,106.16 35.61% December -271.28 No No
referred to as the "Yulin 2022
Haid project")
Animal feed project of
Sichuan Rongchuan with an
annual output of 200,000 30 June
No 23,431.64 23,431.64 5,799.9 10,038.15 42.84% -1,024.06 No No
tons (hereinafter referred to 2022
as the "Sichuan Rongchuan
project")
Animal feed project of 30 June
No 22,000 12,187.54 12,187.54 55.40% - No No
Jiangmen Rongchuan with 2023
55
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
an annual output of 270,000
tons (hereinafter referred to
as the "Jiangmen Rongchuan
project")
Biological compound feed
project of Huainan Haid
with an annual output of 31 July
No 9,477.24 8,828.76 8,828.76 93.16% -605.72 No No
300,000 tons (hereinafter 2021
referred to as the "Huainan
Haid project")
Subtotal of committed
-- 283,000 281,219.34 94,835.45 187,383.54 -- -- 6,614.99 -- --
investment projects
Investment of excessive raised funds
N/A
Repaying bank loans (if
-- -- -- -- --
any)
Replenishing the
-- -- -- -- --
working capital (if any)
Subtotal of investment
of excessive raised -- -- -- -- --
funds
Total -- 283,000 281,219.34 94,835.45 187,383.54 -- -- 6,614.99 -- --
1. Due to the impact of COVID-19 on food consumption, the Nantong Haid project and the Zhaoqing
Gaoyao project failed to meet the objectives with respect to product mix and profitability. As such, these
projects failed to reach the predicted returns.
2. The Huai’an Hailong project failed to meet the objectives with respect to output and sales volume
because the project was not yet entirely put into production. As such, this project failed to reach the
predicted returns.
3. The Nanning Haid project failed to meet the objectives with respect to output and sales volume because
Cases and reasons for the project was not entirely completed and put into production until the second half of 2021. As such, this
failing to reach the project failed to reach the predicted returns.
planned progress or 4. Concerning the Fuzhou Haid project, the Yicheng Haid project, the Hexian Haid project, the Yulin Haid
predicted returns (by project and the Sichuan Rongchuan project, part of the equipment of some of the projects were put into
specific projects) production in mid 2021 but the respective projects were not yet entirely put into production. As such, these
projects failed to meet the objectives with respect to output and sales volume and thus failed to reach the
predicted returns.
5. The Qingyuan Hailong project failed to meet the objectives with respect to output and sales volume in
2021 because only part of its equipment were put into production in July 2020, indicating a short term of
operation. As such, this project failed to reach the predicted returns.
6. The Jiangmen Rongchuan project is still under construction and not ready for production.
7. The Huainan Haid project was put into production in July 2021, indicating a short-term of operation. As
56
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
such, this project failed to reach the predicted returns.
Explanations of the
material changes in the N/A
project feasibility
Amount, use, and use N/A
progress of excessive
raised funds
Applicable
Occurred during the reporting period
Changes of As reviewed at the 14th Meeting of the Fifth Board of Directors and the First Extraordinary General
implementation Meeting in 2021, it was approved to change the implementation entities and locations of the “Qingyuan
locations of the Haibei project” and the “Zhanjiang Haid project”. To be specific, the implementation entities of “Qingyuan
investment projects Haibei Biotechnology Co., Ltd.” and “Zhanjiang Haid Feed Co., Ltd.” were changed to “Jiangmen
with the raised funds Rongchuan Feed Co., Ltd.” and “Huainan Haid Biological Feed Co., Ltd.”, and the implementation
locations of “Qingyuan City, Guangdong Province” and “Zhanjiang City, Guangdong Province” to
“Duanfen Town, Taishan City, Guangdong Province” and “Shouxian County, Huainan City, Anhui
Province”.
Adjustments to the N/A
implementation
methods of the
investment projects
with the raised funds
Applicable
On 9 April 2020, Grant Thornton China issued the Verification Report on the Early Investment of
Self-raised Funds in the Investment Projects with Raised Funds by Guangdong Haid Group Co., Limited
(《关于广东海大集团股份有限公司以自筹资金预先投入募集资金投资项目的鉴证报告》) (Grant
Early investment and
Thornton Zhuan Zi (2020) No. 440ZA4433). The Company invested RMB 393,920,200 of self-raised
replacement concerning
funds in the raised fund projects in the preliminary stage. On 18 April 2020, the Proposal on Replacing
the investment projects
Self-raised Funds That Has Been Invested in Fund-raising Investment Projects with the Raised Funds (《关
with the raised funds
于以募集资金置换预先已投入募集资金投资项目的自筹资金的议案》) on the Ninth Meeting of the
Fifth Board of Directors. The Company replaced the self-raised funds that had been invested with the
raised funds of RMB 393,920,200. The interval between this replacement with raised funds and the arrival
of raised funds is shorter than six months.
Applicable
The Proposal on Temporary Replenishment of Working Capital with Partial Idle Raised Funds ( 关于使用
Temporary
部分闲置募集资金暂时补充流动资金的议案》) was reviewed and approved on the 24th Meeting of the
replenishment of
Fifth Board of Directors on 13 December 2021. It was approved that the Company could temporarily
working capital with
replenish working capital with no more than RMB 900 million of idle raised funds. The use term should be
the idle raised funds
less than 12 months upon the approval of the Board of Directors. As at 31 December 2021, the balance of
the idle raised funds for temporary replenishment of working capital was RMB 874 million.
Surplus raised funds for N/A
57
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
project implementation
and reasons for the
surplus
Use and ownership
In addition to temporary replenishment of working capital and cash management, the unused amount of
change of unused raised
raised funds was deposited in the special bank account for fund-raising projects.
funds
Problems in the use of
raised funds and
N/A
disclosure, or other
cases
(3) Altered projects of raised funds
√ Applicable □Not applicable
Unit: RMB’0,000
Whether
Accumulati
Total Investment there are
The ve Date when
investment progress as Benefits material
investment investment the projects Whether the
amount for at the end of recorded changes in
Project after Previous amount amount as are ready estimated
the project the during the the
alteration project during the at the end of for their benefits are
after reporting reporting feasibility
reporting the intended reached
alteration period (3)＝ period of the
period reporting use
(1) (2)/(1) project after
period (2)
alteration
Qingyuan
Jiangmen Haibei
30 June
Rongchuan project and 22,000 12,187.54 12,187.54 55.40% N/A No
2023
project Zhanjang
Haid project
Qingyuan
Haibei
Huainan 31 July
project and 9,477.24 8,828.76 8,828.76 93.16% -605.72 No No
Haid project 2021
Zhanjang
Haid project
Total -- 31,477.24 21,016.3 21,016.3 -- -- -605.72 -- --
1. Decision-making procedure executed for the changes:
According to the Proposal on the Changes to Certain Raised Funds Investment Projects
Reasons for the changes,
( 关于变更部分募集资金投资项目的议案》 approved at the First Extraordinary General
decision-making procedure executed
Meeting in 2021 on 3 February 2021, it has been agreed to transfer the raised funds for the
and information disclosed (by specific
“Qingyuan Haibei project” and the “Zhanjiang Haid project” and the cash management
projects)
income with the Guangzhou branch of HSBC Bank (China) Company Limited to the
“Jiangmen Rongchuan project” and the “Huainan Haid project”.
58
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
2. Reasons for the changes:
A. Previously, the Qingyuan Haibei project intended to build an annual capacity of 30,000
tons of aquatic premixture with an investment of RMB 216.0009 million. Due to reasons
such as the adjustments to the industry’s farming scale and structure and production areas as
well as the Company’s constant refinement of its product portfolio, the Company intends to
change the Qingyuan Haibei project to other feed projects so as to better meet market needs
and further refine the existing production capacity structure.
B. Previously, the Zhanjiang Haid project intended to build an annual capacity of 200,000
tons of biological compound feed with an investment of RMB 220.9288 million to increase
its supply to West Guangdong Province and East Guangxi Province. However, the feed
factory of Wuzhou Haid in East Guangxi Province has been completed, and construction
accelerated for the raised funds investment project of Nanning Haid with an annual output
of 480,000 tons of feed, which will help ease the supply pressure in the region to some
degree. In view of the priority levels of the projects and the Company’s capacity portfolio
needs, the Company intends to change the Zhanjiang Haid project to other feed projects.
To sum up, in view of market needs and the Company’s capacity portfolio needs, and in
order for better use of the raised funds, the Company has changed the construction
arrangements for the Qingyuan Haibei project and the Zhanjiang Haid project and has
decided to use the remaining raised funds for advance investment in the construction of the
Jiangmen Rongchuan project and the Huainan Haid project.
Cases and reasons for failing to reach 1. The Jiangmen Rongchuan project is still under construction and not ready for production.
the planned progress or predicted 2. The Huainan Haid project was put into production in July 2021, indicating a short-term
returns (by specific projects) of operation. As such, this project failed to reach the predicted returns.
VIII. Disposal of Material Assets and Equity Interest
1. Disposal of material assets
□ Applicable √ Not applicable
The Company did not dispose of any material asset in the reporting period.
2. Disposal of material equity interest
□ Applicable √ Not applicable
IX. Analysis of major subsidiaries and investees
√ Applicable □ Not applicable
Major subsidiaries and investees accounting for over 10% of the net income of the Company
Unit: RMB’0,000
59
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
Type of Principal Registered Operating Operating
Name of company Total assets Net assets Net profit
company activities capital income profit
Production and
Qingyuan Haibei
sales of
Biotechnology Co.,
premixture,
Ltd. (hereinafter Subsidiary 1,000.00 131,091.05 98,068.51 71,175.42 22,634.28 19,552.63
additives and
referred to as
micro-ecologic
“Qingyuan Haibei”)
al products
China Haida Feed
Group (HK)
HKD
Limited (hereinafter Subsidiary Trading 56,683.36 43,392.83 110,812.52 26,011.05 25,978.77
10,000.00
referred to as “HK
Haid”)
Acquisition and disposal of subsidiaries during the reporting period
√ Applicable □ Not applicable
Methods to acquire and
Impact on overall production and
Name of companies dispose of subsidiaries
operation and results
during the reporting period
Ganzhou Lianduoli Feed Technology Co., Business combination not under common No material effects on the results of the
Ltd. control period
Business combination not under common No material effects on the results of the
Raoping Haide Biotechnology Co., Ltd.
control period
Business combination not under common No material effects on the results of the
Jiangmen Debao Group Co., Ltd.
control period
Maoming Debao Agriculture and Animal Business combination not under common No material effects on the results of the
Husbandry Co., Ltd. control period
Business combination not under common No material effects on the results of the
Guangzhou Denong Feed Co., Ltd.
control period
Guangzhou Debao Nongshan Feed Co., Business combination not under common No material effects on the results of the
Ltd. control period
Business combination not under common No material effects on the results of the
Foshan Dazhi Biotechnology Co., Ltd.
control period
Business combination not under common No material effects on the results of the
Taishan Debao Feed Co., Ltd.
control period
Foshan Hanheng Luggage Manufacturing Business combination not under common No material effects on the results of the
Co., Ltd. control period
Yueyang Fengtun Ecological Agriculture No material effects on the results of the
Newly established
Co., Ltd. period
60
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
No material effects on the results of the
Guangdong Yiheng Investment Co., Ltd. Newly established
period
Wugang Yitun Ecological Agriculture Co., No material effects on the results of the
Newly established
Ltd. period
No material effects on the results of the
Hunan Yitun Technology Co., Ltd. Newly established
period
No material effects on the results of the
Wuwei Haid Feed Co., Ltd. Newly established
period
Baoji Haid Agriculture and Animal No material effects on the results of the
Newly established
Husbandry Co., Ltd. period
Vinh Long Hailianke Biotechnology Co., No material effects on the results of the
Newly established
Ltd. period
No material effects on the results of the
Haid Feed Bangladesh Limited Newly established
period
Dongying Haijingzhou Biotechnology Co., No material effects on the results of the
Newly established
Ltd. period
Shanwei Haizenong Marine Biotechnology No material effects on the results of the
Newly established
Co., Ltd. period
No material effects on the results of the
Zhenyuan Haidsun Protein Feed Co., Ltd. Newly established
period
No material effects on the results of the
Guangzhou An'an Logistics Co., Ltd. Newly established
period
Xiyu Haisheng (Guangzhou) Supply Chain No material effects on the results of the
Newly established
Co., Ltd. period
No material effects on the results of the
Jilin Haid Rongchuan Trade Co., Ltd. Newly established
period
Zhuhai Ronghai Farming Technology Co., No material effects on the results of the
Newly established
Ltd. period
No material effects on the results of the
Binh Dinh Hai Long Co., Ltd. Newly established
period
Suixian Haiding Veterinary Service Co., No material effects on the results of the
Newly established
Ltd. period
Yuncheng Haiding Veterinary Service Co., No material effects on the results of the
Newly established
Ltd. period
Shanxian Haiding Veterinary Service Co., No material effects on the results of the
Newly established
Ltd. period
No material effects on the results of the
Heze Dingxin Veterinary Service Co., Ltd. Newly established
period
61
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
No material effects on the results of the
Jining Haiding Veterinary Service Co., Ltd. Newly established
period
Jining Sishui Dingxin Veterinary Service No material effects on the results of the
Newly established
Co., Ltd. period
Feixian Hairuida Veterinary Service Co., No material effects on the results of the
Newly established
Ltd. period
No material effects on the results of the
Yinan Dingxin Veterinary Service Co., Ltd. Newly established
period
Binzhou Haiding Veterinary Service Co., No material effects on the results of the
Newly established
Ltd. period
No material effects on the results of the
Junan Haiding Veterinary Service Co., Ltd. Newly established
period
Liaocheng Haiding Veterinary Service Co., No material effects on the results of the
Newly established
Ltd. period
No material effects on the results of the
Dongying Dinghao Farming Co., Ltd. Newly established
period
No material effects on the results of the
Xuzhou Hairuida Feed Co., Ltd. Newly established
period
Xuzhou Zhongyi Haiding Agriculture and No material effects on the results of the
Newly established
Animal Husbandry Co., Ltd. period
Lanling Haiding Hekangyuan Agriculture No material effects on the results of the
Newly established
and Animal Husbandry Co., Ltd. period
Gaotang Haiding Agriculture and Animal No material effects on the results of the
Newly established
Husbandry Co., Ltd. period
No material effects on the results of the
Jiangsu Fengcheng Technology Co., Ltd. Newly established
period
No material effects on the results of the
Gansu Fengying Technology Co., Ltd. Newly established
period
No material effects on the results of the
Henan Mugaole Feed Co., Ltd. Newly established
period
Henan Haihe Houyi Agriculture and No material effects on the results of the
Newly established
Animal Husbandry Technology Co., Ltd. period
Qingyuan Baisheng Aquatic Farming Co., No material effects on the results of the
Newly established
Ltd. period
No material effects on the results of the
Yibin Yucan Veterinary Service Co., Ltd. Newly established
period
No material effects on the results of the
Dezhou Haiying Food Co., Ltd. Newly established
period
62
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
Linyi Haihe Agriculture and Animal No material effects on the results of the
Newly established
Husbandry Technology Co., Ltd. period
No material effects on the results of the
Yantai Zhizhuren Pig Farm Feed Co., Ltd. Newly established
period
Gaomi Haihe Agriculture and Animal No material effects on the results of the
Newly established
Husbandry Technology Co., Ltd. period
No material effects on the results of the
Zhongshan Rongda Aquatic Seed Co., Ltd. Newly established
period
No material effects on the results of the
Dali Haizhi Trading Co., Ltd. Newly established
period
Chongqing Hainong Veterinary Service No material effects on the results of the
Newly established
Co., Ltd. period
No material effects on the results of the
Haile (Luliang) Biotechnology Co., Ltd. Newly established
period
No material effects on the results of the
Maoming Haiwei Feed Co., Ltd. Newly established
period
No material effects on the results of the
Yangjiang Haihe Feed Co., Ltd. Newly established
period
No material effects on the results of the
Leizhou Hailong Biotechnology Co., Ltd. Newly established
period
No material effects on the results of the
Sichuan Hailong Biotechnology Co., Ltd. Newly established
period
No material effects on the results of the
Qinzhou Haiwei Feed Co., Ltd. Newly established
period
Yancheng Rongchuan Biotechnology Co., No material effects on the results of the
Newly established
Ltd. period
No material effects on the results of the
Nanning Dachuan Biotechnology Co., Ltd. Newly established
period
No material effects on the results of the
Yongzhou Haid Biotechnology Co., Ltd. Newly established
period
No material effects on the results of the
Baotou Haichen Feed Co., Ltd. Newly established
period
No material effects on the results of the
Jiangsu Haid Biotechnology Co., Ltd. Newly established
period
No material effects on the results of the
Guiyang Haid Biotechnology Co., Ltd. Newly established
period
No material effects on the results of the
Wuwei Haimu Biotechnology Co., Ltd. Newly established
period
63
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
No material effects on the results of the
Guilin Haid Biotechnology Co., Ltd. Newly established
period
No material effects on the results of the
Inner Mongolia Haid Feed Co., Ltd. Newly established
period
No material effects on the results of the
Guiyang Dachuan Biotechnology Co., Ltd. Newly established
period
No material effects on the results of the
Xingtai Haid Biotechnology Co., Ltd. Newly established
period
No material effects on the results of the
Foshan Lianduoli Feed Co., Ltd. Newly established
period
Guangdong Haifulai Biotechnology Co., No material effects on the results of the
Newly established
Ltd. period
No material effects on the results of the
Liupanshui Haid Biotechnology Co., Ltd. Newly established
period
No material effects on the results of the
Guangdong Haiqi Investment Co., Ltd. Newly established
period
Heze Haibo Youmei Technical Service Co., No material effects on the results of the
Newly established
Ltd. period
No material effects on the results of the
Hubei Haiqi Technical Service Co., Ltd. Newly established
period
No material effects on the results of the
Kaifeng Haiqi Technical Service Co., Ltd. Newly established
period
No material effects on the results of the
Sichuan Haiqi Biotechnology Co., Ltd. Newly established
period
No material effects on the results of the
Xishui Haiqi Technical Service Co., Ltd. Newly established
period
Kunming Haiqi Technical Service Co., No material effects on the results of the
Newly established
Ltd. period
Mianyang Haiqi FarmingTechnology Co., No material effects on the results of the
Newly established
Ltd. period
No material effects on the results of the
Ya’an Haiqi Farming Technology Co., Ltd. Newly established
period
Nanchang Haiqi Veterinary Medicine Co., No material effects on the results of the
Newly established
Ltd. period
Hengyang Haiqi Technical Service Co., No material effects on the results of the
Newly established
Ltd. period
No material effects on the results of the
Jingzhou Haiqi Technical Service Co., Ltd. Newly established
period
64
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
No material effects on the results of the
Jingshan Haiqi Technical Service Co., Ltd. Newly established
period
No material effects on the results of the
Huaihua Haiqi Technical Service Co., Ltd. Newly established
period
No material effects on the results of the
Jieshou Haiqi Technical Service Co., Ltd. Newly established
period
No material effects on the results of the
Meizhou Haiqi Technology Co., Ltd. Newly established
period
Zhangzhou Haiqi Veterinary Medicine Co., No material effects on the results of the
Newly established
Ltd. period
No material effects on the results of the
Maoming Haiqi Technology Co., Ltd. Newly established
period
No material effects on the results of the
Yangjiang Haiqi Technology Co., Ltd. Newly established
period
No material effects on the results of the
Qingyuan Haiqi Technology Co., Ltd. Newly established
period
Gansu Muqi Agricultural Technology Co., No material effects on the results of the
Newly established
Ltd. period
No material effects on the results of the
Yulin Haiqi Biotechnology Co., Ltd. Newly established
period
Qinzhou Pubei Haiqi Biotechnology Co., No material effects on the results of the
Newly established
Ltd. period
Xingtai Haiqi Farming Technology Service No material effects on the results of the
Newly established
Co., Ltd. period
No material effects on the results of the
Nanning Haililai Biotechnology Co., Ltd. Newly established
period
No material effects on the results of the
Shaoyang Haid Feed Co., Ltd. Newly established
period
Shaoguan Dachuan Biotechnology Co., No material effects on the results of the
Newly established
Ltd. period
No material effects on the results of the
Liaoning Haid Biotechnology Co., Ltd. Newly established
period
No material effects on the results of the
Huai’an Haichang Feed Co., Ltd. Newly established
period
Guizhou Hailongwang Biotechnology Co., No material effects on the results of the
Newly established
Ltd. period
Guangdong Huashite Testing Technology No material effects on the results of the
Newly established
Co., Ltd. period
65
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
No material effects on the results of the
Hebei Haimu Biotechnology Co., Ltd. Newly established
period
No material effects on the results of the
Dali Dachuan Biotechnology Co., Ltd. Newly established
period
No material effects on the results of the
Yunnan Hairui Biotechnology Co., Ltd. Newly established
period
Henan Haid Jiuzhou Biotechnology Co., No material effects on the results of the
Newly established
Ltd. period
No material effects on the results of the
Enshi Haid Biotechnology Co., Ltd. Newly established
period
No material effects on the results of the
Ningguo Haid Biotechnology Co., Ltd. Newly established
period
No material effects on the results of the
Chaozhou Haid Biotechnology Co., Ltd. Newly established
period
No material effects on the results of the
Haixin (Tianjin) Biotechnology Co., Ltd. Newly established
period
Haid Nanshan Biotechnology (Jinhu) Co., No material effects on the results of the
Newly established
Ltd. period
No material effects on the results of the
Tongliao Haid Biotechnology Co., Ltd. Newly established
period
No material effects on the results of the
Huaihua Hailong Biotechnology Co., Ltd. Newly established
period
Guangzhou Haihan Financial Technology No material effects on the results of the
Newly established
Co., Ltd. period
Guangdong Haizhihui Aquaculture No material effects on the results of the
Newly established
Technology Co., Ltd. period
No material effects on the results of the
Jiangsu Haiwei Feed Co., Ltd. Newly established
period
Guangdong Hairuike Biotechnology Co., No material effects on the results of the
Newly established
Ltd. period
No material effects on the results of the
Hubei Haid Seed Technology Co., Ltd. Newly established
period
The Company took control of its in a
Foshan Chuanghuamei Biotechnology Co., business combination not under common No material effects on the results of the
Ltd. control in May 2021 and ceased to control period
it in July 2021 due to equity transfer.
The Company took control of its in a
Guangdong Zhongyu Duck Industry Co., No material effects on the results of the
business combination not under common
Ltd. period
control in May 2021 and ceased to control
66
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
it in August 2021 due to equity transfer.
The Company has ceased to control it due
Alaer Ruiliheng Biological Protein Co., No material effects on the results of the
to change to its corporate governance
Ltd. period
structure.
The Company has ceased to control it due
No material effects on the results of the
Wujiaqu Taikun Plant Protein Co., Ltd. to change to its corporate governance
period
structure.
Linyi Yitun Ecological Agriculture Co., No material effects on the results of the
De-registered
Ltd. period
No material effects on the results of the
Shaoxing Haid Biotechnology Co., Ltd. De-registered
period
Dingtao Hairong Livestock Farming No material effects on the results of the
De-registered
Service Specialized Cooperative period
Guigang Hairong Farming Service No material effects on the results of the
De-registered
Specialized Cooperative period
No material effects on the results of the
Dingtao Haiding Feed Co., Ltd. De-registered
period
Binzhou Dingxin Farming Service Co., No material effects on the results of the
De-registered
Ltd. period
No material effects on the results of the
Chengdu Haiqi Biotechnology Co., Ltd. De-registered
period
Heze Dingtao Hairong Farming No material effects on the results of the
De-registered
Specialized Cooperative Association period
No material effects on the results of the
Qingdao Daxin Feed Co., Ltd. De-registered
period
Yingde Haifeng Agriculture and Animal No material effects on the results of the
De-registered
Husbandry Co., Ltd. period
No material effects on the results of the
Deyang Dachuan Biotechnology Co., Ltd. De-registered
period
Description of major subsidiaries and investees
1. Qingyuan Haibei is principally engaged in the production and sales of aquatic and animal healthcare products.
It recorded good operating income and profit from aquatic and animal healthcare products in the year.
2. HK Haid is one of the Company’s platforms for importing and hedging raw materials. Its income and profit
came from trading and hedging of raw materials in the year.
67
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
X. Structured Entities Controlled by the Company
□ Applicable √ Not applicable
XI. The prospect of the company's future development
1. Industry pattern and trend
The 14th five- year- plan (2021-2025) is the first five years of the new journey on building a socialist modern
country in all-round way. The opinions of the CPC Central Committee and the State Council on comprehensively
promoting rural revitalization and accelerating agricultural and rural modernization (hereinafter referred to as the
"opinions on Rural Revitalization") put forward "improving the supply capacity of grain and important
agricultural products" and "accelerating the construction of a modern breeding system". The breeding industry
will move towards standardization, industrialization, large -scale, intelligence and capitalization, the feed industry
will enter the stage of high-speed integration, and the advantages and position of industry giants are becoming
increasingly prominent in the international market.
(1) Structural development of feed industry
During the 13th five- year -plan period from 2016 to 2020, the total feed output was increased by 21%, and the
industry continued to grow. With the industrialization and large-scale development of the aquaculture industry and
the increasing popularity of feed, the total feed output will continue to grow. The continuous growth of national
per capita disposable income, the upgrading of consumption, the improvement of urbanization level and the
change of consumption concept will increase the demand for high-quality, characteristic and high-standard meat
and food. The consumption of aquatic products, cattle and sheep meat will significantly increase, the consumption
of meat and poultry / egg poultry will be stable, the consumption of pork will decline, and the feed varieties will
also show structural adjustment.
(2) Industry integration is further intensified, and international competitiveness is increasing
The total feed growth slowed down and the competition among enterprises was intensified. Many factors such
as the impact of epidemic diseases, the awareness of food safety, the pressure of self-sufficiency in food supply
and the uncertainty of international trade, intensified the withdrawal of small and medium-sized enterprises in the
industry, providing more opportunities for enterprises with advantages in comprehensive strength, capital,
68
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
management, technology and talents, and the leading enterprises will expand rapidly to emerging markets such as
Southeast Asia, Northeast Asia and Africa with the increasing international competitiveness.
(3) The industry progress driven by technology is more obvious
Technology plays more and more important roles in industry competition along with the differentiation,
integration and development of feed industry. The global relevance of agricultural products is becoming closer
and closer. The weather conditions in some regions and the uncertainty of international trade relations will cause
sharp fluctuations of agricultural products’ prices. Animal nutrition demand, feed formula adjustment and raw
material substitution technology are the core aspects of feed technology competition. Other technologies, such as
the vigorous development of biological feed technology, the increasing variety and function of feed
microorganisms and enzyme preparations, show great potential in promoting the substitution of feed antibiotics
and the efficient utilization of feed resources, becoming the new competitive threshold for the industry.
(4) The seedling and animal protection industry will grow rapidly in the long term due to technology
progress and breeding upgrading
The opinions on Rural Revitalization put forward that "major scientific and technological projects of agricultural
biological breeding will be further increased" and "the construction of improved seed breeding system will be
strengthened to promote the integrated development of breeding and reproduction". Focusing on the development
of breeding industry, high-quality animal seedlings will be greatly demanded in the long term. Strengthening
animal healthcare is an important trend feature of the development of animal breeding, and the demand for animal
healthcare products will grow rapidly. In terms of aquaculture, with the upgrading of aquaculture industry and the
implementation of national inspection and quarantine of aquatic seedlings, the seedlings will enter the process of
industry integration and reshuffle, the demand for high-quality seedlings accredited by the State will increase
rapidly, and the aquatic seedlings in the aquaculture industry chains will also become more valuable, including
production / disease resistance / farming and other production and profit-making links. The upgrading of breeding
varieties and structure, the decline of profitability of conventional varieties and their models, the improvement of
consumption of special and excellent varieties in turn driving the upgrading of varieties and models. Large -scale
breeding bases is gradually increasing, and extended to circulation and processing, forming a regional or single
variety industry chain model of breeding / multiplying / raising / and processing.
69
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
(5) The breeding industry will be accelerated into large-scale, industrialization, intelligence and
capitalization
The factors such as land constraints, food safety, industrial technological progress and increasingly young
employees promote the process of industrialization, large-scale, intelligence and capitalization of the industry. At
present, the large-scale poultry breeding has initially formed, and the scale threshold has been continuously raised.
Due to the influence of African swine fever, pig breeding is rapidly completing the large-scale process. The
large-scale of aquaculture is also gradually developing. The scale of ruminant breeding is still in its infancy. There
is fund shortage in the whole industry. Excellent listed companies are increasing industrial expansion, the large
real- estate companies and the Science and Technology corporations also entered the animal industry. Through
bringing capital, manpower, technology and management, the excellent enterprises empower the animal industry
with automation, digitization and intellectualization, promoting the intelligent and industrialized development of
the animal industry.
(6) The development of industrial chain becomes more comprehensive and in-depth
The demand for green and safe food will promote the construction of food traceability system and agricultural
standardization system. Large excellent enterprises will gradually improve the industrial chain layout with their
technology, talents and capital advantages by connecting the entire businesses and being more capable of
controlling the whole process including seedling, breeding, feed, animal healthcare, slaughtering, transportation
and food processing, in turn further promoting large excellent enterprises more efficient and in-depth industrial
chain layout. Food safety issue also forces the professional docking of large-scale enterprises in the industry's
production links to ensure that each production link is safe, controllable and traceable, promoting the aggregation
of industrial chains and accelerating industry integration.
2. The prospect of company’s future development
(1). The goal of company's development is to become the leading high-tech agricultural and animal husbandry
company with sustainable development ability in China. The development is based on "creating value for
customers". Center on the upstream and downstream of breeding, the company focuses on seedling, animal
healthcare, feed, breeding, slaughtering, food processing and other links. The company builds an industry-leading
whole industry chain and provides comprehensive services for farmers including feed, seedling, animal healthcare
and breeding technical services, as well as other needs such as financial services for farmers and dealers,
70
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
effectively improving the profitability of farmers and dealers, and realizing the win-win development mode
between the company and customers.
(2). The basic strategy of the industrial chain development is to scale up based on its specialization, and to extend
the industrial chain based on its core competitiveness. The company will take advantage of feed products as its
core business, and actively expands businesses such as raw materials, animal healthcare, seedlings, breeding,
circulation and food processing, to cultivate the professional ability in the industrial chain and build
comprehensive core competitiveness in the industrial chain.
(3). The company's five-year business development plan (2021-2025). The development in next five years is still
to focus on the needs of breeding links, provide overall services for farmers, and further expand the sales scale
and the profitability of feed, seedlings and animal healthcare products. At the same time, the company maintains
an appropriate amounts of pigs, aquatic products and poultry, resolutely strengthens the professional breeding
capacity, and scales them up based on specialization.
Feed business is the core business of the company. The company's feed sales target in next five years is 40 million
tons (2025, including export and internal use). In 2021, the company formulated an equity incentive plan
including more than 4000 employees. The annual growth target of feed sales in next five years is no less than 3.2
million tons and increases year by year. Until 2024 and 2025, the annual growth target is 6 million tons, and the
compound growth rate of five-year sales is 21%, which is much higher than the growth rate of feed industry and
peer listed companies in recent years and significantly higher than that of the company in previous years. If the
feed sales target can be successfully achieved, the company's market share will be greatly increased, the product
competitive advantage will become more and more obvious, and the company will have sustained and strong
competitive advantages.
The overall services for farmers must rely on seedlings and animal healthcare. At present, the company has
become the leader in aquatic seedlings and animal healthcare, and the sales scale and product quality are ahead of
the industry. In particular, shrimp seedlings have been performing well in recent years and have been accepted by
farmers, not only greatly improving the income of farmers, but also increasing the growth of feed sales. The
company continues to increase seedling research and development and business cooperation, and gradually
expands the advantages of seedlings into fish, pigs and poultry varieties. For the animal healthcare business, the
company will continue to promote the "thousand station plan” and plans to set up more than 1000 service stations
within five years to provide breeding technical services for farmers. The main products of service stations are
71
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
animal healthcare products and technical services. Through the establishment of service stations, the company will
accelerate the upgrading of aquatic animal protection products and services, expand its leading advantages in the
industry, and serve the advantageous products to farmers all over the country (not limited to the company's feed
farmers). For livestock and poultry protection, the company will quickly build a professional livestock and poultry
service team with thousands of people to provide professional prevention, diagnosis, dispensing, after-sales and
other services for farmers, to further improve the profitability of farmers and their fidelity to the company's
products and services.
The breeding business sticks to the large-scale based on specialization. The development of breeding business can
deepen the understanding of the company and team on breeding needs and provide many talents with high-quality
services for feed, seedling and animal healthcare business. At the same time, the breeding business is also required
for the company to further expand and develop the downstream of the industrial chain in the future, such as food
processing business. In the future, the company hopes to provide healthy and traceable food materials for
customers. The professional breeding capacity must be opened up and the breeding size can be controlled at an
appropriate scale. The breeding business includes pig, aquatic and poultry breeding, will develop in the relatively
balanced manner. The development of breeding business must adhere to the large-scale based on specialization,
with mainly building the professional ability of the team.
XII. Reception of research investigations, communications and interviews during the
reporting period
√ Applicable □ Not applicable
Main
Type of Index to basic
Reception Communication discussions and
Date Place communication information on
method party information
party communication
provided
For details, please refer
Bosera Funds, to the Table of Investor
Taikang Asset, Relations Activity
Zhong Ou Asset, Records of Guangdong
Company The Company’s
China Merchants Haid Group Co.,
20 April 2021 Conference By phone Institution annual operating
Fund, Dacheng Limited 2021-001)
Room results
Fund, CIB Fund, published on the
Great Wall Fund, website of
etc. www.cninfo.com.cn on
22 April 2021
72
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
For details, please refer
to the Table of Investor
Relations Activity
The investors
The Company’s Records of Guangdong
Company participating in
operations and Haid Group Co.,
28 April 2021 Conference Other Other the interaction of
development Limited 2021-002)
Room "Panorama Road
strategy published on the
Show"
website of
www.cninfo.com.cn on
29 April 2021
Harvest Fund,
Taikang Asset,
For details, please refer
Fullgoal Fund,
to the Table of Investor
UBS SDIC
Relations Activity
Fund, GF Fund
Multi-function The Company’s Records of Guangdong
Management,
Hall of Sheraton operations and Haid Group Co.,
20 May 2021 Field research Institution ICBC Credit
Guangzhou development Limited 2021-003)
Suisse Asset,
Panyu strategy published on the
Penghua Fund,
website of
China Universal
www.cninfo.com.cn on
Asset
24 May 2021
Management, E
Fund, etc.
For details, please refer
Harvest Fund, to the Table of Investor
Baoying Fund, Relations Activity
Purekind Fund, Records of Guangdong
Company The Company’s
New China Haid Group Co.,
27 July 2021 Conference By phone Institution interim
Asset Limited 2021-004)
Room operating results
Management, published on the
Guotai Fund, website of
etc. www.cninfo.com.cn on
28 July 2021
For details, please refer
Harvest Fund, to the Table of Investor
Baoying Fund, Relations Activity
Purekind Fund, Records of Guangdong
Company The Company’s
New China Haid Group Co.,
20 October 2021 Conference By phone Institution Q3 operating
Asset Limited 2021-005)
Room results
Management, published on the
Guotai Fund, website of
etc. www.cninfo.com.cn on
20 October 2021
73
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
Section IV. Corporate Governance
I Overview
1. The Establishment of the Company System
From the listing of the Company to the end of the Reporting Period, the Company strictly complied with the
Company Law 《公司法》), the Securities Law 《证券法》), the Stock Listing Rules of Shenzhen Stock Exchange
(《深圳证券交易所股票上市规则》 ), the Guidelines No. 1 of the Shenzhen Stock Exchange for the
Self-regulation of Listed Companies—the Standard Operation of Main Board Listed Companies (《深圳证券交易
所上市公司自律监管指引第 1 号--主板上市公司规范运作》), and the laws and regulations and normative
documents and the Articles of Association, continued to improve the Company's internal corporate governance
structure, refine internal control environment, improve internal management policies, standardize corporate
operation, and strive to improve the Company's capability of governance. The actual situation of the corporate
governance conformed to the requirements of relevant normative documents issued by the China Securities
Regulatory Commission (CSRC) and Shenzhen Stock Exchange on the governance of listed companies.
2. Shareholders and General Meeting of Shareholders
During the reporting period, the Company strictly adhered to applicable laws and regulations such as the
Company Law ( 公司法》), the Articles of Association ( 公司章程》), and the Rules of Procedure of the General
Meeting of Shareholders (《股东大会议事规则》), as well as the Company’s internal control rules, and
standardized the convening, holding and voting procedures of the General Meeting of Shareholders to ensure that
all shareholders could be equal, and fully exercise their rights. In addition, as witnessed by the hired lawyers, the
legitimacy of the meeting’s convening, holding and voting procedures could be guaranteed, and relevant
legitimate rights and interests of the Company and its shareholders could be secured as well. In 2021, four general
meetings of shareholders were convened and held by the Board in total; the convening, holding and voting
procedures of such meetings were witnessed by the lawyers and all were legal and valid.
3. Directors and the Board of Directors
Strictly in accordance with the Company Law (《公司法》), the Articles of Association (《公司章程》), the Rules
of Procedure of the Board of Directors (《董事会议事规则》) and the Independent Director System (《独立董事
制度》), the Company has elected and appointed various directors, and such election and appointment procedures
are open, fair and just. Besides, the composition and number of directors meet relevant legal and regulatory
requirements. The members for the Company’s Fifth Board of Directors are all nominated, approved and elected
by the Board of Directors by means of the cumulative voting system. Currently, there are 7 directors, including 3
independent directors. Independent directors occupy more than one third of all directors and their qualifications
are in accordance with the Guidance Opinions on the Establishment of Independent Director System in Listed
Companies (《关于在上市公司建立独立董事制度的指导意见》).
All directors of the Company have performed their duties in strict compliance with relevant laws, regulations, and
74
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
regulatory documents, attended all board meetings and carried out related works in a serious and responsible
manner, and firmly conformed to any statement and commitment made by directors. However, independent
directors have full right to know about the Company’s major issues and can issue independent opinions on major
issues without being influenced.
The Board of Directors has established the Audit Committee, the Remuneration and Appraisal committee, the
Strategy Committee and the Nomination Committee. Each committee can exercise its functions in accordance
with its work rules and make due contributions to the standardization of corporate governance. In the meantime,
the Board of Directors is able to carry out its work in strict accordance with relevant laws and regulations. All
directors of the Company are honest and trustworthy, diligent and responsible, attend corresponding board
meetings and general meetings with a serious attitude, actively participate in relevant training, and are familiar
with relevant laws and regulations.
4. Supervisors and the Supervisory Committee
The Company has strictly observed the Company Law (《公司法》), the Articles of Association (《公司章程》),
and other relevant regulations to appoint supervisors. The Fifth Supervisory Committee consists of three
supervisors, including two shareholder supervisors and one employee supervisor. The number and composition of
the Supervisory Committee meet relevant requirements stipulated in applicable laws and regulations. However,
the shareholder representative supervisors are elected by adopting the cumulative voting system, and the
employee supervisors are elected and appointed by means of the employees’ assembly in the form of secret ballot.
The number of supervisors that served as directors or senior management personnel of the Company in recent two
years does not exceed one half of the total number of supervisors of the Company, and the number of supervisors
nominated by a single shareholder does not exceed one half of the total number of supervisors of the Company.
The Company’s supervisors can earnestly fulfill their responsibilities in accordance with the Rules of Procedure
of the Supervisory Committee (《监事会议事规则》), effectively supervise and inspect the Company’s major
issues, related party transactions, the legality and compliance of duties performed by the Company’s directors and
senior management, and maintain legitimate rights and interests of the Company and its shareholders.
5. Internal Audit System
The Company has established the complete internal audit system and set up the internal audit department in
charge of the effective internal supervision of the Company’s daily operations.
6. Stakeholders
The Company fully respects and safeguards legitimate rights and interests of relevant stakeholders, realizes the
coordinated balance of interests of the society, shareholders, the Company, and employees etc., sincerely treats
suppliers and customers, earnestly cultivates every employee, develops the mutual benefit and win-win
cooperation with relevant stakeholders, and jointly promotes the Company’s sustained, healthy and rapid
development.
7. Information Disclosure and Transparency
75
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
Pursuant to relevant laws and regulations, as well as the Company’s Information Disclosure System (《信息披露
制度》) and Investor Relations Management System (《投资者关系管理制度》), the Company has disclosed
corresponding information in a true, accurate, complete and timely manner to ensure that all shareholders have
equal access to such information.
The Chairman of the Board accepts primary responsibility for the management of information disclosure affairs.
The Company has designated the Board Secretary in charge of the Company’s information disclosure and investor
relations management, and the Securities Department serves as the executive department for information
disclosure and investor relations management. The Company pays special attention to communicate with investors
and will strengthen communication with investors by various means such as telephone, e-mail, and investor
relations interactive platform etc.
8. Investor Relations Management
The Company has always attached great importance to the management of investor relations, carried out related
works in accordance with the Investor Relations Management System (《投资者关系管理制度》) and other
systems, implemented the investor relations management by various means such as Shenzhen Stock Exchange
investor relations interactive platform, investor hot-lines, and reception of investors etc., strengthened the
communication with investors, and fully guaranteed the investors’ right to know.
The corporate governance is a systematic and long-term project that requires continuous improvement. After the
Company is successfully listed, it is willing to accept supervisions from all parties, adhere to the scientific outlook
on development, constantly improve the corporate governance system, and strengthen the implementation of
various laws and regulations to promote the healthy development of the Company and enhance the overall
competitiveness.
9. Insider Information Management
According to the Company Law (《公司法》), the Securities Law (《证券法》), the Guidelines No. 5 of the
Shenzhen Stock Exchange for the Self-regulation of Listed Companies—Management of Information Disclosure
Affairs 《深圳证券交易所上市公司自律监管指引第 5 号——信息披露事务管理》), the Stock Listing Rules of
Shenzhen Stock Exchange (《深圳证券交易所股票上市规则》), the Guidelines No. 1 of the Shenzhen Stock
Exchange for the Self-regulation of Listed Companies—the Standard Operation of Main Board Listed Companies
(《深圳证券交易所上市公司自律监管指引第 1 号--主板上市公司规范运作》), the Guidelines No. 5 for the
Regulation of Listed Companies—Establishment of Insiders Registration and Management System by Listed
Companies 《上市公司监管指引第 5 号——上市公司内幕信息知情人登记管理制度》 and other relevant laws,
regulations, and the Articles of Association ( 公司章程》), the Company has established the Management System
for Information Insider Registration (《内幕信息知情人登记管理制度》). The Company properly carried out
corresponding information insider registration and reporting works strictly according to relevant requirements and
systems, and recorded and disclosed the list of all information insiders and material matter progress
memorandums in all the links of reporting, transmitting, preparation, resolution-making and disclosure before any
information was disclosed. During the Reporting Period, the Company notified all directors, supervisors, senior
management and relevant information insiders that they were not allowed to buy and sell the Company’s shares
within the window period by means of SMS and e-mail 30 days before the disclosure of annual and interim
76
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
reports and 10 days before the disclosure of quarterly reports, earnings forecast announcements and preliminary
earnings estimate announcements, and conducted an internal audit on the buying and selling of the Company’s
shares by directors, supervisors, senior management and relevant information insiders. During the reporting period,
no information insider was ever involved in the illegal buying and selling of the Company’s shares, and no
relevant personnel was suspected of being involved in insider trading and was imposed some supervision
measures and administrative penalties by competent regulatory departments.
Indicate by tick market whether there is any material incompliance with the applicable laws, administrative
regulations and regulations issued by the CSRC governing the governance of listed companies.
□ Yes √ No
No such incompliance.
II. The Company’s Independence from the Controlling Shareholder and the Actual
Controller in Asset, Personnel, Financial Affairs, Organizational Structure and Business
The Company has independent and complete businesses and independent management capabilities. It is
completely independent from the controlling shareholder in terms of asset, personnel, financial affairs,
organizational structure and business.
1. Asset: The property rights relationship between the Company and the controlling shareholder is clear. The
Company has independent land use rights and housing property. The Company's assets are independently
registered, set up in accounting, accounted for, and managed so as to avoid the controlling shareholder's
occupation for non-operating purposes and allocation of the Company's assets or the intervention of the operation
and management of such assets.
2. Personnel: The Company has established an independent human resources system. The controlling shareholder
exercises its rights and assumes corresponding obligations in accordance with the law, and does not affect the
personnel appointment or dismissal of the listed Company, nor restricted the duty fulfillment of the directors,
supervisors, senior management or other personnel of the listed Company by means other than exercising
shareholder's rights specified in laws and regulations.
3. Financial affairs: The Company has set up a complete and independent financial institution with sufficient
full-time personnel, established an independent accounting system and financial management system, set up
independent bank accounts, independently paid taxes, allocated funds, and made financial decisions. As a result,
the controlling shareholder cannot intervene in the Company's financial management;
4. Organizational structure: The Company's Board of Directors, Supervisory Committee, and internal functional
departments can independently operate. There is no leader-member relation between the controlling shareholder
and internal institutions. The controlling shareholder did not directly or indirectly intervene in the Company's
decision-making and business activities without the General Meeting of Shareholders.
5. Business: The business structure of the Company is independent and complete, which is of the business
capability of independent market orientation and management. There is no competition in terms of the Company's
77
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
business cope, business nature, customer objects, and product replaceability. In addition, the controlling
shareholder cannot harness its controlling position to the Company to try to gain the Company's business
opportunities. Moreover, the controlling shareholder cannot substitute the General Meeting of Shareholders and
the Board of Directors to directly make major decisions for the listed company and intervene in the normal
decision-making process of the listed company.
III. Horizontal Competition
□ Applicable √ Not applicable
IV. Annual and Extraordinary General Meetings of Shareholders Convened during the
Reporting Period
1. General Meetings of Shareholders Convened during the Reporting Period
Investor
Date of the
Meeting Type participation Disclosure date Resolutions
meeting
ratio
For details, see the Announcement on
Resolutions of First Extraordinary General
First Extraordinary Meeting of Shareholders of 2021 (No.
General Meeting of Extraordinary 58.44% 3 February 2021 4 February 2021 2021-019) disclosed on Securities Times,
Shareholders of 2021 China Securities Journal, Shanghai
Securities News, Securities Daily and
www.cninfo.com.cn
For details, see the Announcement on
Resolutions of 2020 Annual General
2020 Annual General Meeting of Shareholders (No. 2021-064)
Meeting of Annual 58.41% 20 May 2021 21 May 2021 disclosed on Securities Times, China
Shareholders Securities Journal, Shanghai Securities
News, Securities Daily and
www.cninfo.com.cn
For details, see the Announcement on
Resolutions of Second Extraordinary
Second
General Meeting of Shareholders of 2021
Extraordinary
Extraordinary 62.77% 11 August 2021 12 August 2021 (No. 2021-086) disclosed on Securities
General Meeting of
Times, China Securities Journal, Shanghai
Shareholders of 2021
Securities News, Securities Daily and
www.cninfo.com.cn
For details, see the Announcement on
Third Extraordinary
30 December 31 December Resolutions of Third Extraordinary
General Meeting of Extraordinary 62.64%
2021 2021 General Meeting of Shareholders of 2021
Shareholders of 2021
(No. 2021-112) disclosed on Securities
78
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
Times, China Securities Journal, Shanghai
Securities News, Securities Daily and
www.cninfo.com.cn
2. Extraordinary General Meetings of Shareholders Convened at Request of Preferred Shareholders with
Resumed Voting Rights
□ Applicable √ Not applicable
V. Directors, Supervisors and Senior Management
1. General Information
Increase Decrease
Opening Other Closing
Starting Ending in in Reasons
Office Incumben sharehol increase/ sharehol
Name Gender Age date of date of Reportin Reportin for share
title t/Former ding decrease ding
tenure tenure g Period g Period changes
(share) (share) (share)
(share) (share)
Chairman
6 June 16 July
Hua Xue of the Incumbent Male 52
2007 2022
Board
25 May 16 July
Hua Xue President Incumbent Male 52
2010 2022
Vice
Yingzhuo Chairman 6 June 16 July
Incumbent Male 54
Xu of the 2007 2022
Board
18
7 June
Li Tian Director Former Female 50 January 1,965,100 1,965,100
2016
2021
16 July 16 July
Qi Cheng Director Incumbent Male 42 70,000 70,000
2019 2022
Executive
16 July 16 July
Qi Cheng Vice Incumbent Male 42
2019 2022
President
3 Personal
Xueqiao 16 July
Director Incumbent Male 55 February 340,900 85,200 255,700 financial
Qian 2022
2021 needs
Xueqiao Vice 16 July 16 July
Incumbent Male 55
Qian President 2019 2022
Xueqiao Chief Incumbent Male 55 6 June 16 July
79
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
Qian Engineer 2007 2022
Independe
Jianfang 16 July 16 July
nt Incumbent Male 66
Gui 2019 2022
Director
Independe
Jianguo 16 July 16 July
nt Incumbent Male 60
He 2019 2022
Director
Independe
Yunguo 16 July 16 July
nt Incumbent Male 56
Liu 2019 2022
Director
Zhenxion Superviso 6 June 16 July
Incumbent Male 52
g Qi r 2007 2022
16
Superviso 16 July
Hua Wang Incumbent Male 35 November
r 2022
2020
16
Yongfang Superviso 16 July
Incumbent Female 33 November
Mu r 2022
2020
Personal
Guoxiang Vice 16 July 16 July
Incumbent Male 53 270,170 67,500 202,670 financial
Liu President 2019 2022
needs
Shaolin Vice 16 July 16 July
Incumbent Male 48 330,900 330,900
Yang President 2019 2022
Chief 22
Shaolin 16 July
Financial Incumbent Male 48 October
Yang 2022
Officer 2012
Xiewu Vice 16 July 16 July
Incumbent Male 54 66,780 66,780
Jiang President 2019 2022
Personal
Guocheng Vice 16 July 16 July
Incumbent Male 50 323,700 80,900 242,800 financial
Mi President 2019 2022
needs
Personal
Zhongzhu Vice 16 July 16 July
Incumbent Male 52 251,470 62,800 188,670 financial
Chen President 2019 2022
needs
Mingzhon Vice 6 June 16 July
Incumbent Male 57
g Chen President 2007 2022
Zhijian Vice 26 July 16 July
Incumbent Male 44 412,244 412,244
Huang President 2012 2022
Zhijian Board 26 July 16 July
Incumbent Male 44
Huang Secretary 2012 2022
80
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
Total -- -- -- -- -- -- 4,031,264 0 296,400 3,734,864 --
Indicate whether any director, supervisor or senior management resigned before the expiry of their tenures during the reporting
period.
√ Yes □ No
Ms. Li Tian resigned as Director of the Fifth Board of Directors on 18 January 2021 for personal reasons and ceased to be a member
of the Audit Committee and the Strategy Committee under the Board of Directors at the same time. For further information, see the
Proposal on Change of Director (Announcement No. 2021-013) disclosed by the Company on the media designated for information
disclosure, namely Securities Times, China Securities Journal, Shanghai Securities News, Securities Times and
http://www.cninfo.com.cn dated 18 January 2021.
Change in directors, supervisors and senior management:
√ Applicable □ Not applicable
Name Office title Type of change Date Reason
Li Tian Director Resignation 18 January 2021 Voluntary resignation
Xueqiao Qian Director Appointed 3 February 2021
2. Brief Biographies
Professional backgrounds, main working experience and current responsibilities in the Company of the incumbent
directors, supervisors and senior management:
1. Directors
(1) Hua Xue
Mr. Hua Xue is an engineer. He graduated from College of Fisheries of Huazhong Agricultural University in 1992
with a major in special aquaculture; in 1995, he obtained the master’s degree in zoology from School of Life
Sciences of Sun Yat-Sen University. As one of the founders of the Company, he now serves as the Chairman of
the Board and President (General Manager) of the Company, as well as an Executive Director of the Company’s
controlling shareholder Guangzhou Haihao Investment Co., Ltd. He was/is the Executive Vice President of China
Feed Industry Association (CFIA), Chairman of China Vocational Education Group of Modern Fishery, Vice
Chairman of China Association of Young Rural Entrepreneurial Leaders (CAYREL), Chairman of Guangdong
Hi-tech Enterprise Association (GDHTEA), Vice President of Guangdong Feed Industry Association, Vice
Chairman of Guangdong Antibiotic-Free Feed Industry Alliance, the NPC Member of the 14th National Congress
of the Communist Party of Guangzhou, a member of the 11th Chinese People’s Political Consultation Conference
Guangzhou Committee, the NPC Member of the 16th National Congress of the Communist Party of Guangzhou,
Vice Chairman of the 15th Executive Committee of Guangzhou Federation of Industry and Commerce, and
Honorary Chairman of Guangzhou Feed Profession Association (GZFPA). Meanwhile, he is recognized as
“Leading Entrepreneur in China’s Feed Industry” by the Ministry of Agriculture, and “Top 30 Excellent
Entrepreneurs in China” by China Feed Industry Association (CFIA). Mr. Hua Xue holds 39.75% equity interests
in the Company's controlling shareholder Guangzhou Haihao Investment Co., Ltd. and is the actual controller of
the Company.
81
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
(2) Yingzhuo Xu
Mr. Yingzhuo Xu is one of the founders of the Company, and he now serves as the Company’s Vice Chairman of
the Board. He holds a bachelor’s degree and is a livestock specialist. He also holds a master’s degree in business
administration from HEC Paris. From 1991 to 1997, he worked for Guangdong Academy of Agricultural Sciences
in technology research and promotion with respect to feed for the animal husbandry industry. He served as a Vice
President and Director of the Company starting from 1998 before being a Vice Chairman of the Board of the
Company. Mr. Yingzhuo Xu holds 27% equity interests in Guangzhou Haihao Investment Co., Ltd., the
Company's controlling shareholder.
(3) Qi Cheng
Mr. Qi Cheng graduated from the major of Automation of Huazhong University of Science and Technology in
2002; studied the major of World Economy in Sun Yat-sen University from 2005 to 2008 and obtained the
Master’s degree; studied EMBA in CEIBS from 2013 to 2015 and obtained MBA. From 2002 to 2010, he served
as Process Engineer, Operation Manager, Supply Chain Manager and Director of Technology in Guangzhou
Procter & Gamble Co., Ltd.; from 2010 to 2017, he served as Operation Director of East Asia-Pacific Region and
Global Supply Chain Director in Essel Propack Co., Ltd.. Joining the Company in March 2017, he currently
serves as a Director, an Executive Vice President (Vice General Manager) and the General Manager of the South
China Region of the Company.
(4) Xueqiao Qian
Dr. Xueqiao Qian, Chinese Han nationality, is an Associate Professor and has obtained the doctorate degree from
the Institute of Hydrobiology, Chinese Academy of Science. He successively presided over or participated in the
Hubei Provincial Natural Science Fund Project -- Development and Utilization of Feather Proteins in Fishery
Feeds, the development projects of the State Key Laboratory of Freshwater Ecology and Biotechnology -- Effects
of Nutrition Levels and Nutritional History on Fish’s Growth and Activities, Research on the Feeding Behavior
and Chemical Sensation of Allogynogenetic Crucian Carp, and Studies on the Utilization of Plant Protein by Main
Cultured Freshwater Fish, the NSFC Project -- Studies on the Comparative Nutritional Energetics of Feed Protein
Requirements of Carnivorous Fish and Omnivorous Fish, and the MOA’s 948 project -- Artificial Propagation and
Large-scale Aquaculture of Paddlefish etc.. Further, he has published more than 20 papers, of which, three papers
were published in international publications and included in SCI. He joined the Company in 2004 and is mainly
engaged in the aquatic animal nutrition and feed research and the development of new feed additives. Now, he is a
Director, Vice President (Vice General Manager) and the Chief Engineer of the Company. And he holds 3%
equity interests in the Company’s controlling shareholder Guangzhou Haihao Investment Co., Ltd..
(5) Jianfang Gui
Dr. Jianfang Gui has obtained PhD and is a doctoral supervisor, academician of the Chinese Academy of Sciences
and of The World Academy of Sciences. He graduated from the major of Cytobiology of Wuhan University and
obtained the Bachelor’s degree in January 1982; obtained the Master’s degree in Genetics from Wuhan University
in December 1984 and joined in Institute of Hydrobiology, Chinese Academy of Sciences in the same year and
has since worked there. In 1995, he obtained the Doctor’s degree of science from Institute of Hydrobiology,
82
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
Chinese Academy of Sciences. From 1991 to 1994, he paid work visits and conducted postdoctoral research in
Medical College of Ohio and US San Diego. From 1995, he served as Researcher and Doctoral Supervisor in
Institute of Hydrobiology, Chinese Academy of Sciences. He served as Executive Deputy Director and Director of
Hydrobiology from 1999 to 2007, Director of State Key Laboratory of Freshwater Ecology and Biotechnology
from 2001 to 2011, and Independent Director of the 1st and 2nd sessions of the Board of the Company from 2007
to 2013. Currently he serves as a research fellow of the Institute of Hydrabiology, Chinese Academy of Sciences,
a Vice President of China Society of Fisheries, and an Independent Director of the Company.
(6) Jianguo He
Dr. Jianguo He has obtained PhD and is a professor of Sun Yat-sen University, winner of “The National Science
Fund for Distinguished Young Scholars” and Chief Scientist of the State Shrimp and Crab Industry Technology
System. He graduated from the major of Zoology of Sun Yat-sen University and obtained the Doctor’s degree of
science in 1990. He has been working in Sun Yat-sen University since 1991. He served as Deputy Director of
College of Life Sciences, Sun Yat-sen University from 2000 to 2008, and Director of College of Marine Science,
Sun Yat-sen University from 2008 to 2018. His current positions include Director of State Key Laboratory of Pest
Control and Resource Utilization (Sun Yat-sen University), Director of China-ASEAN Mariculture Technology
“Belt and Road” Joint Laboratory, Member of Fisheries Advisory Committee of MARA, Deputy Director of
Aquacultural Disease Control Expert Commission of MARA, President of Guangdong Zoological Society, Vice
President of the Crustacean Branch of China Zoological Society, and Independent Director of the Company.
(7) Yunguo Liu
Dr. Yunguo Liu has obtained the Doctor’s degree in management (accounting) from Xiamen University. His
current positions and titles include Professor of Accounting and Doctoral Supervisor in Sun Yat-sen Business
School (SYSBS), Director of Sun Yat-sen University Cost and Management Accounting Research Center,
Director of School of Accountancy in Guangzhou Xinhua University (a private university), Member of
Management Accounting Professional Committee of Chinese Accounting Society, Executive Director of Cost
Research Society of China, a management, accounting and consultancy expert of the Ministry of Finance, Leading
Talent in Accountancy (Phase I) under the Ministry of Finance, Third Batch of Shortlisted Candidates for Special
Support Program of the Development of State Leading Talents in Accountancy under the Ministry of Finance,
Shortlisted Candidate (2019) for the Development of Accounting Celebrities under the Ministry of Finance,
Member of CGMA North Asian 100 Think Tank Leaders, Member of IMA China Academic Consultation
Commission, and Vice Chairman of Guangdong Association of Management Accountants. Currently, he is also
Independent Director of Shenzhen Heungkong Holding Co., Ltd. (600162.SH), Guangdong Daya Smart Kitchen
Appliances Co., Ltd. (837009.OC) and Changwei Information Technology Development Co., Ltd..
2. Supervisors
(1) Zhenxiong Qi
Dr. Zhenxiong Qi is a doctoral degree holder and senior engineer. He successively participated in a key program
of National Natural Science Foundation of China, the National Key Technologies R & D Program of China during
the 8th Five-Year Plan Period, National Climb—B Plan, and programs of the Shandong and Guangdong
83
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
Provincial Natural Science Funds. Meanwhile, he has also published many research papers, applied for multiple
invention patents and been granted a State Technological Invention Award (Second Prize). Since he joined the
Company, he has been mainly engaged in researches on animal nutrition and feed, aquatic farming and disease
control. He has years of experience in product development, grass-root farming and technology promotion. He is
now the Chairman of the Company’s Supervisory Committee. Mr. Zhenxiong Qi holds 0.1% equity interests in
the Company’s controlling shareholder Guangzhou Haihao Investment Co., Ltd..
(2) Hua Wang
Mr. Hua Wang, Chinese Han nationality, is a member of the CPC, an economist and a political mentor. Hua Wang
majored in politics and administration and graduated from Southwest Jiaotong University in 2009. He obtained a
professional master's degree in political theory from Wuhan University in 2011. Hua Wang worked for China
Tunnel Construction Co. Ltd. Guangdong from July 2011 to March 2017, and worked for Guangdong Cinda Real
Estate Co., Ltd. from June 2017 to March 2019. He joined Guangdong Haid Group Co., Limited in April 2019,
and currently serves as the Senior Manager of the Group's Secretary Office.
(3) Yongfang Mu
Ms. Yongfang Mu, Chinese Han nationality, is an intermediate accountant. Yongfang Mu graduated from Henan
University of Economics and Law in June 2012, majoring in accounting. She joined Guangdong Haid Group Co.,
Limited in July 2012 and has held positions related to cost accounting, budget management and financial
management for the Company. She currently serves as Financial Director of the Company.
3. Senior Management
(1) Guoxiang Liu
Mr. Guoxiang Liu is an assistant research fellow. He graduated from the Aquaculture Department of Huazhong
Agricultural University in 1992, majoring in special aquaculture professionalism. He is now a Vice President
(Vice General Manager) and the Central China General Manager of the Company, in addition to being the Vice
Chairman of Hubei Province Feed Industry Association. Mr. Guoxiang Liu holds 1.5% equity interests in the
Company’s controlling shareholder Guangzhou Haihao Investment Co., Ltd..
(2) Shaolin Yang
Mr. Shaolin Yang has obtained the master’s degree. Graduated from Sun Yat-sen University with a major in
Business Administration, he is also a senior accountant, certified public accountant, and certified tax accountant,
and has been selected and listed into the expert database of the high-tech enterprises of Department of Science and
Technology of Guangdong Province. From December 2008 to April 2012, he served as Executive Director, CFO
and Joint Secretary of KEE Holdings Company Limited (HK.02011). From May 2016 to May 2021, he served as
a supervisor of Guangdong Association of Management Accountants (GAMA); and has become Vice Chairman
of GAMA since October 2021. Since June 2016, he has acted as an extramural tutor for master’s degree students
in accounting of Sun Yat-sen Business School. Since 2021, he has been a tutor for master’s degree students in
accounting of Guangdong University of Foreign Studies. In April 2012, he joined the Company and is currently
84
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
the Company’s Vice President (Vice General Manager) and CFO.
(3) Xiewu Jiang
Mr. Xiewu Jiang is an aquacultural engineer. He graduated from the major of Special Aquaculture of College of
Fisheries, Huazhong Agricultural University in 1992. Subsequently, he studied in the postgraduate program of
Aquatic Animal Nutrition of Sun Yat-sen University and EMBA of South China University of Technology.
Currently, he serves as Vice President (Deputy General Manager) of the Company and General Manager of
Aquacultural Breeding/Premix BU. His other positions include Director of Guangzhou Municipal Agricultural
Leading Enterprises Association, Executive Director of the First Board of Directors of the Aquatic Seed Branch of
China Fisheries Association, Chairman of Weifang Fisheries Association, Vice Chairman of Guangdong Ocean
Association, and Vice Chairman of the Marine Animal Branch of Guangdong Ocean Association. Mr. Xiewu
Jiang holds 4.5% equity interests in the Company’s controlling shareholder Guangzhou Haihao Investment Co.,
Ltd..
(4) Guocheng Mi
Mr. Guocheng Mi graduated from the major of Freshwater Fishery of Southwest Agricultural University. He
joined in the Company in 2010 and currently serves as a Vice President (Vice General Manager) and the General
Manager of the Pig Farming BU of the Company.
(5) Zhongzhu Chen
Mr. Zhongzhu holds an MBA degree for senior management personnel from Xiamen University. He joined in the
Company in 2004 and currently serves as a Vice President (Vice General Manager) and the General Manager of
the Shrimp Feed BU of the Company.
(6) Mingzhong Chen
Mr. Mingzhong Chen graduated from MBA of Hong Kong Baptist University. His past titles include Deputy to
Zhuhai Municipal People’s Congress and Member of Shaowu Municipal CPPCC and current social titles include
Vice President of Guangzhou Municipal Agricultural Leading Enterprises Association, Vice President of the
Standing Committee of Panyu District Federation of Industry and Commerce of Guangzhou, Vice President of the
three federations of Guangzhou (including Guangzhou Industrial Economy Federation) and Executive Vice
President of Nancun General Chamber of Commerce of Panyu District, Guangzhou. He has won a number of
honors and titles, such as “Excellent Entrepreneur for Caring for Employees in Panyu District, Guangzhou”. He
joined in the Company in 2004 and served as the head for project investment and preparations and Director of
Purchase. He currently serves as a Vice President (Vice General Manager) of the Company and is responsible for
public relations, brand image and promotion of the Company.
(7) Zhijian Huang
Mr. Zhijian Huang is an accountant and a bachelor’s degree holder. He joined the Company in 2004 and is now a
Vice President (Vice General Manager) and the Board Secretary of the Company.
85
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
Posts concurrently held in shareholding entities:
√ Applicable □ Not applicable
Post held in Remuneration or
Starting date of Ending date of
Name Shareholding entity shareholding allowance from
tenure tenure
entity shareholding entity
Guangzhou Haihao Investment Co., Executive
Hua Xue 27 September 2006 No
Ltd. director
Guangzhou Haihao Investment Co.,
Xueqiao Qian Supervisor 1 December 2021 No
Ltd.
Guangzhou Haihao Investment Co., General
Yingzhuo Xu 1 December 2021 Yes
Ltd. Manager
Yingzhuo Xu has ceased to be paid by the Company and started to be paid by Guangzhou Haihao Investment Co.,
Note
Ltd. since December 2021.
Posts held concurrently in other entities:
√ Applicable □ Not applicable
Remuneration
Post held in or allowance
Name Other entity Starting date of tenure Ending date of tenure
other entity from the
entity
Guangdong Aerocity Holding Co.,
Hua Xue Director 21 January 2015 No
Ltd.
Guangzhou Huading Investment Executive
Hua Xue 4 June 2021 No
Holding Co., Ltd. Director
Guangzhou Huayu Investment Executive
Hua Xue 14 December 2021 No
Co., Ltd. Director
Zhuhai Haihao Industrial Executive
Yingzhuo Xu 20 March 2020 No
Investment Co., Ltd. Director
Guangzhou Haihao Technology
Yingzhuo Xu Director 20 March 2020 No
Industry Operation Co., Ltd.
Guangdong Haihaowan Executive
Yingzhuo Xu 22 April 2020 No
Development Co., Ltd. Director
Guangzhou Haihao Biotechnology Executive
Yingzhuo Xu 29 April 2020 No
Co., Ltd. Director
Guangzhou Haoyue
Executive
Yingzhuo Xu Biotechnology Development Co., 29 May 2020 No
Director
Ltd.
Guangzhou Zhuoling Investment Executive
Yingzhuo Xu 2 June 2021 No
Development Co., Ltd. Director
86
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
Guangzhou Zhuoyi Investment
Yingzhuo Xu Supervisor 4 June 2021 No
Development Co., Ltd.
Guangzhou Zhuosheng Executive
Yingzhuo Xu 8 June 2021 No
Investment Holding Co., Ltd. Director
Guangzhou Huayu Investment
Yingzhuo Xu Manager 14 December 2021 No
Co., Ltd.
Institute of Hydrobiology, Chinese
Jianfang Gui Research fellow 1 August 1995 Yes
Academy of Sciences
Jianguo He Sun Yat-Sen University Professor 1 December 1994 Yes
Yunguo Liu Sun Yat-Sen University Professor 1 December 1999 Yes
Guangdong Daya Smart Kitchen Independent
Yunguo Liu 22 June 2017 12 October 2022 Yes
Appliances Co., Ltd. Director
Shenzhen Heungkong Holding Independent
Yunguo Liu 6 May 2016 17 May 2022 Yes
Co., Ltd. Director
Changwei Information
Independent
Yunguo Liu Technology Development Co., 1 September 2016 1 September 2022 Yes
Director
Ltd.
Bangpu Breeding Technology Co.,
Xiewu Jiang Director 1 May 2019 No
Ltd.
Extramural
Tutor for
Shaolin Yang Sun Yat-Sen University 5 June 2016 5 June 2022 Yes
master’s degree
students
Tutor for
Guangdong University of Foreign
Shaolin Yang master’s degree 1 January 2021 1 January 2025 Yes
Studies
students
Guangdong Association of
Shaolin Yang Vice Chairman 1 October 2021 1 October 2027 No
Management Accountants
Note N/A
Punishments imposed in the recent three years by the securities regulator on the incumbent directors, supervisors and senior
management as well as those who left in the Reporting Period:
□ Applicable √ Not applicable
3. Remuneration of Directors, Supervisors and Senior Management
Decision-making procedure, determination basis and actual payments of remuneration for directors, supervisors
and senior management:
The remuneration of the Company’s directors, supervisors and senior management is in strict compliance with the
Company’s Rules of Procedure for Meetings of Shareholders ( 股东大会议事规则》 and Rules of Procedure for
87
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
Board (《董事会议事规则》), as well as with the Company Law and the Company’s Articles of Association. The
remuneration is determined according to the Company’s operating performance and these personnel’s
performance appraisal indicators.
Remuneration of directors, supervisors and senior management in the Reporting Period:
Unit: RMB’0,000
Total before-tax
remuneration Remuneration
Name Office title Gender Age Incumbent/Former
from the from related party
Company
Chairman of the
Hua Xue Board and General Male 52 Incumbent 303.46 No
Manager
Vice Chairman of the
Yingzhuo Xu Male 54 Incumbent 87.51 Yes (note 1)
Board
Li Tian (note 3) Director Female 50 Former 0 No
Jianfang Gui Independent Director Male 66 Incumbent 12 No
Jianguo He Independent Director Male 60 Incumbent 12 No
Yunguo Liu Independent Director Male 56 Incumbent 12 No
Zhenxiong Qi Supervisor Male 52 Incumbent 163.81 No
Hua Wang Supervisor Male 35 Incumbent 49.52 No
Yongfang Mu Supervisor Female 33 Incumbent 42.32 No
Director and
Qi Cheng (note 2) Executive Vice Male 42 Incumbent 174.48 No
President
Guoxiang Liu Vice President (Vice
Male 54 Incumbent 148.51 No
(note 2) General Manager)
Director, Vice
Xueqiao Qian President (Vice
Male 55 Incumbent 176.87 No
(note 2) General Manager)
and Chief Engineer
Vice President (Vice
Shaolin Yang General Manager)
Male 48 Incumbent 159.57 No
(note 2) and Chief Financial
Officer
Xiewu Jiang Vice President (Vice
Male 54 Incumbent 148.9 No
(note 2) General Manager)
Guocheng Mi Vice President (Vice
Male 50 Incumbent 149.53 No
(note 2) General Manager)
88
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
Zhongzhu Chen Vice President (Vice
Male 52 Incumbent 129.57 No
(note 2) General Manager)
Mingzhong Chen Vice President (Vice
Male 57 Incumbent 104.4 No
(note 2) General Manager)
Vice President (Vice
Zhijian Huang
General Manager) Male 44 Incumbent 120.38 No
(note 2)
and Board Secretary
Total -- -- -- -- 1,994.83 --
Notes:
1. Yingzhuo Xu, Vice Chairman of the Board of the Company, has acted as General Manager of the Company’s controlling
shareholder Guangzhou Haihao Investment Co., Ltd. (hereinafter referred to as “Haihao Investment”) since December 2021, and has
been paid by Haihao Investment since 1 December 2021. His remunerations in the table above are salaries, year-end bonuses, etc.
from the Company for the period from January to November 2021.
2. The table above is exclusive of a total of RMB 27.3744 million out of the operating profit of the last three years that were granted
in 2021 as rewards to Vice General Managers Qi Cheng, Guoxiang Liu, Xueqiao Qian, Shaolin Yang, Xiewu Jiang, Guocheng Mi,
Zhongzhu Chen, Mingzhong Chen and Zhijian Huang. The aforesaid amounts have been given to their personal accounts after
deducting the individual income tax as required.
3. Director Li Tian has resigned on 18 January 2021 before the expiry of her tenure.
VI. Performance of Duties by Directors in the Reporting Period
1. Board Meetings Convened in the Reporting Period
Meeting Date of the meeting Disclosure date Resolutions
The following proposals were deliberated and approved: 1. The Proposal
on the Changes to Certain Raised Funds Investment Projects (《关于变
更 部 分 募 集 资 金 投 资 项 目 的 议 案 》 ); 2. The Proposal on the
Application for Comprehensive Credit Line from Banks in 2021 (《关于
2021 年向银行申请综合授信额度的议案》); 3. The Proposal on the
The 14th
External Guarantee in 2021 (《关于 2021 年对外担保的议案》); 4. The
Meeting of the
18 January 2021 19 January 2021 Proposal on Conducting Hedging Business in 2021 ( 关于 2021 年开展
Fifth Board of
套期保值业务的议案》); 5. The Proposal on Temporary Replenishment
Directors
of Working Capital with Partial Idle Raised Funds 《关于使用部分闲置
募集资金暂时补充流动资金的议案》); 6. The Proposal on the Change
in the Company's Directors (《关于变更公司董事的议案》); 7. The
Proposal on Convening the 1st Extraordinary General Meeting of 2021
(《关于召开 2021 年第一次临时股东大会的议案》).
The 15th
1. It deliberated and approved the Proposal on the By-election of
Meeting of the
3 February 2021 4 February 2021 Members of the Special Committees of the Board of Directors of the
Fifth Board of
Company (《关于补选公司董事会专门委员会委员的议案》).
Directors
89
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
The 16th
Meeting of the 1. It deliberated and approved the Proposal on Adjusting the Plan for
4 March 2021 6 March 2021
Fifth Board of Share Repurchase (《关于调整回购股份方案的议案》).
Directors
The following proposals were deliberated and approved: 1. The Proposal
on the 2021 Share Option Incentive Plan (Draft) of Guangdong Haid
Group Co., Limited and Its Summary (《关于<广东海大集团股份有限
公司 2021 年股票期权激励计划(草案)>及其摘要的议案》); 2. The
Proposal on the Management Methods for the Implementation and
The 17th
Appraisal for the 2021 Share Option Incentive Plan of Guangdong Haid
Meeting of the
6 April 2021 7 April 2021 Group Co., Limited ( 关于<广东海大集团股份有限公司 2021 年股票
Fifth Board of
期权激励计划实施考核管理办法>的议案》); 3. The Proposal on
Directors
Authorisation of the Board of Directors at the General Meeting to
Handle Matters Related to the 2021 Share Option Incentive Plan (《关于
提请股东大会授权董事会办理公司 2021 年股票期权激励计划有关
事项的议案》); 4. The Proposal on Terminating the Plan for Share
Repurchase (《关于终止回购公司股份方案的议案》).
The following proposals were deliberated and approved: 1. The Proposal
on the 'Report on the Work of the Board of Directors for 2020' (《关于<
公司 2020 年度董事会工作报告>的议案》); 2. The Proposal on the
'Report on the Work of the General Manager of the Company for the
Year 2020' ( 关于<公司 2020 年度总经理工作报告>的议案》); 3. The
Proposal on the 'Annual Report of the Company for 2020' and its
Abstract (《关于<公司 2020 年年度报告>及其摘要的议案》); 4. The
Proposal on the 'Financial Final Report for 2020 of the Company' (《关
于<公司 2020 年度财务决算报告>的议案》); 5. The Proposal on the
Profit Appropriation Plan in 2020 ( 关于 2020 年度利润分配预案的议
案》); 6. The Proposal on the 'Internal Control Self-assessment Report of
The 18th the Company in 2020' (《关于<公司 2020 年度内部控制自我评价报
Meeting of the 告>的议案》); 7. The Proposal on the 'Special Report on Deposit and
17 April 2021 20 April 2021
Fifth Board of Usage of Raised Funds of the Company in 2020' (《关于<公司 2020 年
Directors 年度募集资金存放与使用情况的专项报告>的议案》); 8. The Proposal
on the 'Corporate Social Responsibility Report 2020 of the Company'
(《关于<公司 2020 年社会责任报告>的议案》); 9. The Proposal
Regarding Repurchase of Certain Restricted Shares for Cancellation
(《关于回购注销部分限制性股票的议案》); 10. The Proposal on the
Satisfaction of the Unlocking Conditions of the 2016 Restricted Share
Incentive Plan (《关于 2016 年限制性股票激励计划符合解锁条件的
议案》); 11. The Proposal on Routine Related-party Transactions in 2021
(《关于 2021 年日常关联交易的议案》); 12. The Proposal on the Cash
Management of Part of Idle Funds Raised and Self-owned Funds 《关于
使用部分闲置募集资金及自有资金进行现金管理的议案》); 13. The
Proposal on the Application for Syndicated Loans and Provision of
90
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
Guarantees for Subsidiaries 《关于子公司申请银团贷款及为其提供担
保的议案》); 14. The Proposal on the External Guarantee (《关于对外
提供担保的议案》); 15. The Proposal on the Application for the
Adjustment of Comprehensive Credit Line from Banks 《关于向银行申
请综合授信额度调整的议案》); 16. The Proposal on the Fourth Plan of
the Employee Stock Ownership Plan for Core Team (Draft) of
Guangdong Haid Group Co., Limited and Its Summary (《关于<广东海
大集团股份有限公司核心团队员工持股计划之四期计划（草案）>
及其摘要的议案》); 17. The Proposal on the 'First Quarter Report for
2021 of the Company' (《关于<公司 2021 年第一季度报告>的议案》).
The following proposals were deliberated and approved: 1. The Proposal
on the 2021 Share Option Incentive Plan (Revised Draft) of Guangdong
Haid Group Co., Limited and Its Summary (《关于<广东海大集团股份
The 19th 有限公司 2021 年股票期权激励计划（草案修订稿）>及其摘要的议
Meeting of the 案》); 2. The Proposal on Authorisation of the Board of Directors at the
29 April 2021 30 April 2021
Fifth Board of General Meeting to Handle Matters Related to the 2021 Share Option
Directors Incentive Plan (《关于提请股东大会授权董事会办理公司 2021 年股
票期权激励计划有关事项的议案》); 3. The Proposal on Convening the
2020 Annual General Meeting of Shareholders (《关于召开 2020 年年
度股东大会的议案》).
1. It deliberated and approved the Proposal on Adjustments to the List of
Awardees and the Numbers of Equities to Be Granted to Them in the
The 20th First Grant under the 2021 Share Option Incentive Plan (《关于调整公
Meeting of the 司 2021 年股票期权激励计划首次授予激励对象名单及授予权益数
10 June 2021 15 June 2021
Fifth Board of 量的议案》); 2. It deliberated and approved the Proposal on the Grant of
Directors Share Options to the Awardees for the First Grant under the 2021 Share
Option Incentive Plan (《关于向公司 2021 年股票期权激励计划首次
授予激励对象授予股票期权的议案》).
The following proposals were deliberated and approved: 1. The Proposal
on the 'Semi-Annual Report of the Company for 2021' and its Abstract
《关于<公司 2021 年半年度报告>及其摘要的议案》); 2. The Proposal
on the 'Special Report on Deposit and Usage of Raised Funds of the
Company in the First Half of 2021' 《关于<公司 2021 年半年度募集资
金存放与使用情况的专项报告>的议案》); 3. The Proposal on the
The 21st
External Guarantee ( 关于对外提供担保的议案》); 4. The Proposal on
Meeting of the
23 July 2021 27 July 2021 the Routine Related-party Transactions ( 关于日常关联交易的议案》);
Fifth Board of
5. The Proposal on Changing the Registered Capital of the Company and
Directors
Revising the Articles of Association ( 关于变更公司注册资本及修订<
公司章程>的议案》); 6. The Proposal on Revising the 'Management
System for Information Disclosure of Debt Financing Instruments in
Inter-bank Bond Market' (《关于修订<银行间债券市场债务融资工具
信息披露管理制度>的议案》); 7. The Proposal on Convening the 2nd
Extraordinary General Meeting of 2021 (《关于召开 2021 年第二次临
91
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
时股东大会的议案》).
The 22nd
Meeting of the 24 September 1. It deliberated and approved the Proposal on Adjusting the Foreign
23 September 2021
Fifth Board of 2021 Exchange Hedging Business (《关于调整外汇套期保值业务的议案》).
Directors
The following proposals were deliberated and approved: 1. The Proposal
on the 'Third Quarter Report for 2021 of the Company' (《关于<公司
2021 年第三季度报告>的议案》); 2. The Proposal on the Renewal of
Appointment of Grant Thornton China (LLP) as the Audit Institution for
The 23rd
2021 of the Company ( 关于续聘致同会计师事务所（特殊普通合伙）
Meeting of the
18 October 2021 20 October 2021 为公司 2021 年度审计机构的议案》); 3. The Proposal on the Securities
Fifth Board of
Investment and Derivatives Trading (《关于进行证券投资及衍生品交
Directors
易的议案》); 4. The Proposal on the Formulation of the 'External
Guarantee Management System' 《关于制定<对外担保管理制度>的议
案》); 5. The Proposal on the Routine Related-party Transactions (《关
于日常关联交易的议案》).
The following proposals were deliberated and approved: 1. The Proposal
on Temporary Replenishment of Working Capital with Partial Idle
The 24th
Raised Funds (《关于使用部分闲置募集资金暂时补充流动资金的议
Meeting of the 14 December
13 December 2021 案》); 2. The Proposal on Changing the Responsible Person of Internal
Fifth Board of 2021
Audit 《关于变更内审负责人的议案》); 3. The Proposal on Convening
Directors
the Third Extraordinary General Meeting of Shareholders of 2021 (《关
于召开 2021 年第三次临时股东大会的议案》).
2. Attendances of Directors at Board Meetings and General Meetings
Attendances of directors at board meetings and general meetings
Due Attendances at
Attendances at Not attending
attendances at Attendances at board meetings Attendances at
board meetings Absences at board meetings
Director board meetings board meetings by general
through a board meetings in person for
in Reporting on site telecommunica meetings
proxy twice in a row
Period tion
Hua Xue 11 11 0 0 0 N/A 4
Yingzhuo Xu 11 10 1 0 0 N/A 1
Li Tian 1 1 0 0 0 N/A 0
Xueqiao Qian 10 9 1 0 0 N/A 0
Qi Cheng 11 9 2 0 0 N/A 1
Jianfang Gui 11 5 6 0 0 N/A 2
Jianguo He 11 9 2 0 0 N/A 1
Yunguo Liu 11 7 4 0 0 N/A 2
92
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
Explanation for any independent director not attending board meetings in person for twice in a row:
None of the directors failed to attend board meetings in person for twice in a row in the reporting period.
3. Objections Raised by Directors on Matters of the Company
Indicate by tick mark whether any director raised any objection on any matter of the Company.
□ Yes √ No
No such cases in the reporting period.
4. Other Information about Performance of Duties by Directors
Indicate by tick mark whether any suggestions from directors were adopted by the Company.
√ Yes □ No
Suggestions of directors adopted or not adopted by the Company:
During the Reporting Period, all the directors of the Company carried out their work diligently and
conscientiously in strict accordance with the Company Law ( 公司法》), the Stock Listing Rules of the Shenzhen
Stock Exchange (《深圳证券交易所股票上市规则》), the Articles of Association (《公司章程》), the Rules of
Procedure for General Meetings of Shareholders (《股东大会议事规则》), and the Rules of Procedure of the
Board of Directors (《董事会议事规则》). Based on the Company's reality, they put forward relevant opinions on
the Company's major governance and operation decisions and reached consensuses through full communication
and discussion. They resolutely supervised and promoted the implementation of the resolutions of the Board of
Directors to ensure scientific, timely, and efficient decision-making and safeguard the legitimate rights and
interests of the Company and all of its shareholders.
VII. Performance of Duties by Specialized Committees under the Board of Directors in the
Reporting Period
Substantial opinion and Details of
Meetings Date of the Topics of the Other
Committee Members recommendations put objections
convened meeting meeting activities
forward (if any)
Communicated Discussed the key audit
18 January
Yunguo Liu, before the 2020 matters in 2020 to be N/A N/A
The Audit 2021
Jianguo He and 2 annual audit reviewed
Committee
Li Tian 18 January Summarized the
N/A N/A N/A
2021 2020 internal audit
Communicated
about the first draft Discussed audit
Yunguo Liu, of the 2020 procedures carried out
The Audit 17 April
Jianguo He and 6 Independent in the 2020 annual audit N/A N/A
Committee 2021
Li Tian Auditors Report, and the identification of
as well as key audit matters
reviewed
93
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
accounting policy
changes, the
financial
statements and the
internal audit
report for Q1 2021
Reviewed the
financial
13 July
statements and the N/A N/A N/A
2021
internal audit
report for Q2 2021
Agreed to re-appoint
Grant Thornton China
Appointed
13 October (Special General
Independent N/A N/A
2021 Partnership) as the
Auditor for 2021
Independent Auditor for
2021
Reviewed the
financial
13 October
statements and the N/A N/A N/A
2021
internal audit
report for Q3 2021
13 Communicated Discussed the key audit
December before the 2021 matters in 2021 to be N/A N/A
2021 annual audit reviewed
Discussed audit
Reviewed the procedures carried out
13 summary of the in the 2021 annual audit
December 2021 internal audit and the identification of N/A N/A
2021 and 2022 internal key audit matters, as
audit plan well as the key areas for
the 2022 internal audit
Nominated
Xueqiao Qian as a
13 January Non-independent
N/A N/A N/A
2021 Director of the
The Jianguo He,
Fifth Board of
Nomination Yunguo Liu 2
Directors
Committee and Qi Cheng
Nominated Jing
13
Wang as Assistant
December N/A N/A N/A
to Chairman of the
2021
Board
94
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
Discussed the post
system and the
Discussed the awardees
remuneration
and performance
27 March system and plans,
requirements for the N/A N/A
2021 as well as the draft
2021 Share Option
of the 2021 Share
Incentive Plan
Option Incentive
Plan
Discussed the draft
of the Fourth Plan
of the Employee
Stock Ownership
Discussed
Plan for Core
performan
Team, as well as
ce
the repurchase and
appraisals
retirement of
7 April of the
shares and the N/A N/A
2021 awardees
unlocking
under the
conditions under
equity
the 2016
incentive
The Restricted Share
Yunguo Liu, plan
Remuneration Incentive Plan
Jianguo He and 5
and Appraisal (Revised) (2016 年
Yingzhuo Xu
Committee 限制性股票激励
计划（修订稿）)
Determined the list
of holders and
their shares
31 May allocated under the
N/A N/A N/A
2021 Fourth Plan of the
Employee Stock
Ownership Plan
for Core Team
Discussed the list
of awardees,
number adjustment
5 June 2021 and the first grant N/A N/A N/A
under the 2021
Share Option
Incentive Plan
31 Discussed the
December three vestings N/A N/A N/A
2021 under the Third
95
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
Plan of the
Employee Stock
Ownership Plan,
and the first grant
under the Fourth
Plan of the
Employee Stock
Ownership Plan
for Core Team
N/A
Discussed hedges
to be carried out in
Hua Xue, 2021 and the Focused on the
The Strategy 13 January
Yingzhuo Xu 1 intention to feasibility and risks of N/A N/A
Committee 2021
and Li Tian enhance effort in derivative investments
factory-based
aquaculture
Discussed the pig Focused on the related
5 June 2021 farming capacity strategic objectives and N/A N/A
layout risks
Discussed
Hua Xue, adjustments to the
The Strategy
Yingzhuo Xu 2 upper limit for the Focused on the
Committee 18
and Li Tian amount of hedges, feasibility and risks of
September N/A N/A
as well as securities and derivative
2021
securities and investments
derivative
investments
VIII. Performance of Duties by the Supervisory Committee
Indicate by tick mark whether the Supervisory Committee found any risk to the Company during its supervision in the reporting
period.
□ Yes √ No
The Supervisory Committee raised no objections in the reporting period.
IX Employees
1. Numbers, Functions and Educational Backgrounds of Employees
Number of in-service employees of Parent Company (Haid
2,022
Group exclusive of subsidiaries) at the end of the period
96
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
Number of in-service employees of major subsidiaries at the end
31,535
of the period
Total number of in-service employees at the end of the period 33,557
Total number of paid employees in Reporting Period 33,557
Number of retirees to whom Parent Company or its major
0
subsidiaries need to pay retirement pension
Functions
Function Employees
Production 15,698
Sales 9,092
Technical 3,049
Financial 1,856
Administrative 3,056
Procurement 806
Total 33,557
Educational backgrounds
Educational background Employees
Doctoral degree 123
Master’s degree 1,365
Bachelor’s degree 6,741
Junior college 6,625
Senior high school, technical secondary school and below 18,703
Total 33,557
2. Employee Remuneration Policy
While strictly abiding by the Labor Law of the People’s Republic of China (《中华人民共和国劳动法》), the
Labor Contract Law of the People’s Republic of China (《中华人民共和国劳动合同法》) and other national and
local related laws, regulations, department rules and regulatory documents, the Company implements the
following principles according to the characteristics of the industry and the Company’s operations: persist in the
principle of labor-based distribution combining duties, power and interests; implement the principle of linking
income levels with the Company’s performance and work goals; implement the principle of integrating individual
remuneration with the Company’s long-term interests to ensure sustained and sound growth in main business,
prevent short-term behaviors and promote the Company’s sustained operations and development; stick to the
principle of linking remuneration with performance appraisal with equal emphasis on incentive and restraint; give
comprehensive consideration to market changes and market remuneration levels. The Company has established a
reasonable post and remuneration system to provide employees with competitive salaries in the industry, link
performance with remuneration, align employees’ and the Company’s interests, enhance staff awareness for team
97
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
work and give full play to every employee’s enthusiasm and creativity.
3. Employee Training Plans
The Company always emphasizes the development of human resources and talents with a firm belief that staff
development is an important power and resource for the Company’s continuous development. The Company has
established an extensive talent cultivation system covering new employees, key personnel, managers, assistant
general managers/vice general managers and the general manager, matching employees in different positions and
at different levels with better learning resources to help them grow faster. It possesses an excellent course
development system and a systematic internal trainer development system and carries out broad-based and precise
talent development through famous trainer courses, outdoor training, behavior learning, coach tutoring, online
broadcasting, online learning and other channels. The Company has also established a self-inspection mechanism
covering “talent development mechanism, talent development platform operation and plan implementation, talent
assessment and talent management self-inspection reports”.
Haid College, the Company’s functional department for talent development, has always closely followed the
Group's strategies and the guidelines of the Group's business. It remains committed to the values of "All for your
growth" and follows the principle of elite training and inclusive education to solve key problems for the
development of the organization. Through the combination of online and offline working methods, it has kept
exploring new modes for talent development.
In 2021, Haid College created a learning organization centering on creating value for customers. It has focused on
its efforts to cultivate a team of managerial staff with cultural strategies, business operation, and leadership. It
continued to carry out the EDP Future Pilot Program and the Min-MBA Class and initiate the IDP Core Cadre
Class, Chief Financial Officer (CFO) Class, and Managerial Staff Class for Regional Business Division. The
number of managerial staff for all professional centers has surpassed 800. Moreover, it has continuously
strengthened and standardized cultural education for recruits from universities and society.
The Company's new platform for online learning, namely, "Haiwei", has accelerated the formation of the learning
ecosystem. The learning resource base of professional institutes has preliminarily taken shape, with more than
8,000 online course resources, approximately 30,000 online learners, and total learning hours of approximately
620,000, which makes the average learning hours for online learners exceed 22 throughout the year.
The atmosphere of talent development in the Company has come into vogue. The Company has established the
resource system of talent development, implemented the learning roadmap of professional centers, set up
professional institutes, launched the BP cultivation program and cultivated 100 staff that can independently handle
the talent cultivation work in regional business divisions/divisions, branches, and subsidiaries. It held the Haid
Talent Development Annual Conference at Jinggangshan. The training system for professional lines and divisions
has gradually taken shape, which has become the performance highlight of HR and business managers. The
development of cadres has been comprehensively launched and the resource platform has gradually shaped,
forging a profound learning atmosphere in the organization.
98
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
4. Labor Outsourcing
□ Applicable √ Not applicable
X. Profit Distribution and Capitalization of Capital Reserve
Formulation, implementation or adjustment of profit distribution policy, especially the cash dividend during the
reporting period
√ Applicable □ Not applicable
According to the Proposal on 2020 Equity Distribution Plan (《关于2020年年度权益分派实施的议案》) as
considered and approved at the 2020 Annual General Meeting convened on 20 May 2021, the distribution plan is
as follows: The Company proposed to distribute RMB 3.20 (tax inclusive) per 10 shares based on "the total
number of shares exclusive of the repurchased shares (the number of shares eligible for profit distribution) on the
date of record when the plan is implemented in the future". The proposed total amount of dividend shall not
exceed the profit of the company (parent company) available for distribution to shareholders as at 31 December
2020. The retained earnings will be carried forward to the following year. On 9 July 2021, the equity distribution
was completed.
The Company’s profit distribution policy, dividend distribution policy, dividend standards, and dividend ratios are
well-defined and clear. Independent directors have duly performed their duties and functions. Minority
shareholders have the opportunity to fully express their views and concern, which is in line with the Articles of
Association and the requirements of the consideration procedures. The conditions and procedures for the
adjustment or change of the profit distribution policy are compliant and transparent, and the legal rights and
interests of small and medium investors are fully protected.
Particulars of Cash Dividend Policy
Whether the policy is in compliance with the requirements of the
Articles of Association or the resolutions passed at the general Yes
meeting;
Whether the basis and ratio of the distribution of dividends are
Yes
well-defined and clear;
Whether the relevant decision making procedure and system are
Yes
sound;
Whether the independent directors have duly performed their
Yes
duties and functions;
Whether there are enough opportunities for minority
shareholders to express their views and concerns, and whether Yes
their legal interests are sufficiently protected, etc;
Whether the conditions and procedures are legal and transparent
Not applicable
in respect of cash dividend policy with adjustments and changes;
The Company made a profit and had positive retained profit available for ordinary shareholders of parent company during the
99
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
reporting period without cash dividend being proposed
□ Applicable √ Not applicable
Proposals on profit distribution and capitalization of capital reserve during the reporting period:
√ Applicable □ Not applicable
Number of bonus share per 10 shares (share(s)) 0
Dividend distribution per 10 shares (RMB) (tax
1.50
inclusive)
Total number of shares exclusive of the repurchased shares on the registration
Share base of the distribution proposal (shares)
date when the plan is implemented in the future
Amount of cash dividend (RMB) (tax inclusive) 247,633,342.95
Amount of cash dividend distribution through other
707,442,393.60
means (such as share repurchase) (RMB)
Total amount of cash dividends (including other
955,075,736.55
means) (RMB)
Distributable profits (RMB ) 2,991,262,794.10
Total amount of cash dividends (including other
100%
means) as % of total profit distribution
Cash dividend policy
For profit distribution of companies which are in the growth period with significant capital expenditure arrangement, the percentage
for cash dividend shall represent at least 20% of the profits distribution for the current year
Particulars of profit distribution and capitalization of capital reserves
According to the audit report issued by Grant Thornton China (Special General Partnership), the Company (parent company)
achieved a net profit of RMB 1,073,335,056.61 and made provision for statutory surplus reserves of RMB 107,333,505.66 (10% of
the net profit), without allocation to discretionary revenue reserve in 2021. As at 31 December 2021, the profit available for
distribution to shareholders amounted to RMB 2,991,262,794.10.
Based on the operating results of the Company in 2021, as well as the Company's business scale and future growth, the legitimate
demands of investors and continuous return to shareholders, the Company formulated the 2021 annual profit distribution plan as
follows: The Company proposed to distribute RMB 1.50 (tax inclusive) per 10 shares based on "the total number of shares
exclusive of the repurchased shares (the number of shares eligible for profit distribution) on the date of record when the plan is
implemented in the future". The proposed total amount of dividend shall not exceed the profit of the Company (parent company)
available for distribution to shareholders as at 31 December 2021. The retained earnings will be carried forward to the following
year.
Where any change occurs to the Company’s total share capital during the period from the disclosure of the distribution plan to its
implementation due to reasons such as conversion of convertible corporate bonds to shares, share repurchases, exercise of equity
incentives, and new offering of shares for re-financing, the dividend per 10 shares shall remain the same while the total amount of
dividend shall be adjusted accordingly.
100
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
In order to look after the shareholders’ immediate and long-term interests in a better way on the premise of guaranteeing the
Company's normal operations and long-term development, the Company put forward the above-mentioned profit distribution plan.
The preparation of the above-mentioned profit distribution plan is in line with the Company Law (《公司法》) and the Articles of
Association (《公司章程》), and the Dividend Distribution Plan of the Company for the Next Three Years (2019-2021) (《未来三
年（2019-2021年）分红回报规划》). The distribution plan is legal, compliant and reasonable and in line with the Company's
distribution policy.
The independent directors of the Company expressed their independent opinions that the Company's 2021 profit distribution plan
gives full consideration to the returns to investors and is in line with the actual situation of the company without any prejudice to
the interests of shareholders, in particular minority shareholders. Therefore, they agreed to the 2021 profit distribution plan.
This proposal will be submitted to a general meeting for final approval.
XI. Implementation of the Equity Incentive Plan, Employee Stock Ownership Plan or Other
Employee Incentive Measures of the Company
√ Applicable □ Not applicable
1. Equity Incentives
(1) 2016 Restricted Share Incentive Plan
① Decision-making procedures and approval
On 15 February 2017, the Company convened the First Extraordinary General Meeting of 2017 to consider and
approve the 2016 Restricted Share Incentive Plan of Guangdong Haid Group Co., Limited (Revised) (广东海大集
团股份有限公司2016年限制性股票激励计划(修订稿)) and its summary (hereinafter referred to as "2016
Restricted Share Incentive Plan") and the Proposal Regarding Authorisation of the Board of Directors at the
General Meeting to Handle Matters Related to the 2016 Restricted Share Incentive Plan (《关于提请股东大会授
权董事会办理公司2016年限制性股票激励计划相关事宜的议案》) and related resolutions, pursuant to which
the Company was approved to issue no more than 46 million restricted shares to awardees by way of private
placement of which 41,601,300 shares would be first granted to 1,484 awardees at the grant price of RMB 7.48
per share, and 4,398,700 restricted shares would be reserved.
On 13 March 2017, the Company convened the Sixth Meeting of the Fourth Board of Directors to consider and
approve the Proposal on Adjustment to the Number of Interests under the 2016 Restricted Share Incentive Plan of
the Company 《关于调整公司2016年限制性股票激励计划权益数量的议案》), pursuant to which the number of
awardees of the first grant was changed from 1,484 into 1,373 and the restricted shares not granted yet were
adjusted from 41,601,300 shares to 40,283,200 shares. The Proposal on Grant of Restricted Shares to Incentive
Targets under the 2016 Restricted Share Incentive Plan of the Company 《关于向公司2016年限制性股票激励计
划激励对象授予限制性股票的议案》) was also considered and approved at the aforesaid meeting, pursuant to
which the Company was approved to grant 40,283,200 shares to 1,373 awardees for the first time with 13 March
2017 as the first grant date and the grant price of RMB 7.48 per share. On 20 March 2017, the Company
101
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
completed the registration of grant of all the above-mentioned restricted shares.
On 8 December 2017, the Company convened the Eleventh Meeting of the Fourth Board of Directors to consider
and approve the Proposal Regarding the Grant of Reserved Restricted Shares to Awardees under the 2016
Restricted Share Incentive Plan of the Company (《关于向公司2016年限制性股票激励计划激励对象授予预留
限制性股票的议案》), pursuant to which the Company was approved to grant 4,398,700 reserved restricted shares
to 399 awardees with the grant price of RMB 10.44 per share and 8 December 2017 as the grant date. Upon audit
and confirmation by the Shenzhen Stock Exchange and Shenzhen Branch of China Securities Depository and
Clearing Corporation Limited, the Company completed the registration for grant of reserved restricted shares to
360 awardees. 4,308,000 reserved restricted shares were granted and the listing date of the restricted shares would
be 24 January 2018.
② Implementation during the reporting period
A. The fourth unlocking period of the first grant and the third unlocking period of the reserve grant of the 2016
Restricted Share Incentive Plan
On 17 April 2021, the Company convened the 18th Meeting of the Fifth Board of Directors to consider and
approve the Proposal on the Satisfaction of the Unlocking Conditions of the 2016 Restricted Share Incentive Plan
(《关于2016年限制性股票激励计划符合解锁条件的议案》). The Board was of the view that the unlocking
conditions had been satisfied for the fourth unlocking period of the first grant and for the third unlocking period of
the reserve grant under the 2016 Restricted Share Incentive Plan (Revised) (《2016年限制性股票激励计划（修
订稿）》) and thus approved the awardees to unlock the relevant shares as prescribed. In the fourth unlocking
period of the first grant, the number of restricted shares available for listing and trading was 10,690,680; and in
the third unlocking period of the reserve grant, the number of restricted shares available for listing and trading was
1,448,720.
B. Repurchase for cancellation for the 2016 Restricted Share Incentive Plan
On 17 April 2021, the Company convened the 18th Meeting of the Fifth Board of Directors to consider and
approve the Proposal Regarding Repurchase of Certain Restricted Shares for Cancellation (《关于回购注销部分
限制性股票的议案》). Due to the resignation, failure to pass the 2020 individual performance appraisal, etc. of 7
awardees in the first grant of restricted shares and 2 awardees in the reserve grant, the Company was agreed to
repurchase and cancel 34,290 restricted shares in the first grant and 15,400 restricted shares in the reserve grant
that had been granted to the aforesaid awardees but had not yet reached the unlocking conditions. On 17 June
2021, as confirmed by the Shenzhen branch of China Securities Depository and Clearing Corporation Limited, the
Company completed the repurchase for cancellation of the above-mentioned restricted shares.
③ Awardees' exercise of interests during the reporting period and interests accumulatively granted but not yet
exercised as at the end of the reporting period
In summary, during the reporting period, due to implementation of the 2016 Restricted Share Incentive Plan
(Revised) (《2016年限制性股票激励计划（修订稿）》), the Company repurchased a total of 49,690 restricted
shares for cancellation. As at the end of the reporting period, the restricted shares granted had all been unlocked.
102
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
(2) 2021 Share Option Incentive Plan
① Decision-making procedures and approval
On 6 April 2021, the Company convened the 17th Meeting of the Fifth Board of Directors to consider and approve
the Proposal on the 2021 Share Option Incentive Plan (Draft) of Guangdong Haid Group Co., Limited and Its
Summary (《关于<广东海大集团股份有限公司2021年股票期权激励计划(草案)>及其摘要的议案》), the
Proposal on the Management Methods for the Implementation and Appraisal for the 2021 Share Option Incentive
Plan of Guangdong Haid Group Co., Limited 《关于<广东海大集团股份有限公司2021年股票期权激励计划实
施考核管理办法>的议案》), and the Proposal on Authorisation of the Board of Directors at the General Meeting
to Handle Matters Related to the 2021 Share Option Incentive Plan (《关于提请股东大会授权董事会办理公司
2021年股票期权激励计划有关事项的议案》). On the same day, the Company convened the 13th Meeting of the
Fifth Supervisory Committee to consider and approve the Proposal on the 2021 Share Option Incentive Plan
(Draft) and Its Summary 《关于<公司2021年股票期权激励计划(草案)>及其摘要的议案》), the Proposal on the
Management Methods for the Implementation and Appraisal for the 2021 Share Option Incentive Plan of
Guangdong Haid Group Co., Limited ( 关于<广东海大集团股份有限公司2021年股票期权激励计划实施考核
管理办法>的议案》), and the Proposal on the Examination of the List of Awardees for the 2021 Share Option
Incentive Plan (Draft) (《关于核查公司2021年股票期权激励计划（草案）激励对象名单的议案》).
On 29 April 2021, the Company convened the 19th Meeting of the Fifth Board of Directors to consider and
approve the Proposal on the 2021 Share Option Incentive Plan (Revised Draft) of Guangdong Haid Group Co.,
Limited and Its Summary (《关于<广东海大集团股份有限公司2021年股票期权激励计划（草案修订稿）>及
其摘要的议案》), and the Proposal on Authorisation of the Board of Directors at the General Meeting to Handle
Matters Related to the 2021 Share Option Incentive Plan 《关于提请股东大会授权董事会办理公司2021年股票
期权激励计划有关事项的议案》). On the same day, the Company convened the 15th Meeting of the Fifth
Supervisory Committee to consider and approve the Proposal on the 2021 Share Option Incentive Plan (Revised
Draft) of Guangdong Haid Group Co., Limited and Its Summary (《关于<广东海大集团股份有限公司2021年股
票期权激励计划（草案修订稿）>及其摘要的议案》), and the Proposal on the Examination of the List of
Awardees for the 2021 Share Option Incentive Plan (Revised Draft) (《关于核查公司2021年股票期权激励计划
（草案修订稿）激励对象名单的议案》).
On 7 April 2021 and 30 April 2021, the Company disclosed the List of Awardees for the First Grant under the
2021 Share Option Incentive Plan (Draft) (《2021年股票期权激励计划（草案）首次授予激励对象名单》) and
the List of Awardees for the First Grant under the 2021 Share Option Incentive Plan (Revised Draft) (《2021年股
票期权激励计划（草案修订稿）首次授予激励对象名单》) respectively on the website designated by China
Securities Regulatory Commission (CSRC) for information disclosure. The Company publicized internally the
names and positions of the awardees on the Company website for the period from 30 April 2021 to 13 May 2021,
during which the Supervisory Committee received no objections regarding the publicized information. On 14 May
2021, the Company disclosed the Statement of the Supervisory Committee on the Examination and Publication
Results of the List of Awardees for the 2021 Share Option Incentive Plan (《监事会关于2021年股票期权激励计
划激励名单核查及公示情况的说明》). The Supervisory Committee was of the opinion that the awardees for the
first grant under the incentive plan were all eligible, legitimate and valid according to the applicable laws,
regulations and regulatory documents, as well as the awardee scope and conditions of the incentive plan.
103
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
On 20 May 2021, the Company convened the 2020 Annual General Meeting to consider and approve the 2021
Share Option Incentive Plan (Revised) (《2021年股票期权激励计划（修订稿）》), the Management Methods for
the Implementation and Appraisal for the 2021 Share Option Incentive Plan (《2021年股票期权激励计划实施考
核管理办法》 (hereinafter referred to as the “Appraisal and Management Methods” 《公司考核管理办法》)), and
the Proposal on Authorisation of the Board of Directors at the General Meeting to Handle Matters Related to the
2021 Share Option Incentive Plan ( 关于提请股东大会授权董事会办理公司2021年股票期权激励计划有关事
项的议案》).
On 10 June 2021, the Company convened the 20th Meeting of the Fifth Board of Directors and the 16th Meeting of
the Fifth Supervisory Committee to consider and approve the Proposal on Adjustments to the List of Awardees
and the Numbers of Equities to Be Granted to Them in the First Grant under the 2021 Share Option Incentive Plan
《关于调整公司2021年股票期权激励计划首次授予激励对象名单及授予权益数量的议案》), and the Proposal
on the Grant of Share Options to the Awardees for the First Grant under the 2021 Share Option Incentive Plan
(《关于向公司2021年股票期权激励计划首次授予激励对象授予股票期权的议案》). As such, the list of
awardees for the first grant under the incentive plan and the numbers of equities to be granted to them were
adjusted. Meanwhile, it was decided that a total of 47,953,200 share options were to be granted to 4,003 eligible
awardees on 10 June 2021 in the first grant under the incentive plan. The registration formalities with respect to
the first grant under the 2021 Share Option Incentive Plan were completed on 28 June 2021.
Upon the completion of the 2020 annual equity distribution on 8 July 2021, the exercise price for the first grant
and the reserve grant under the 2021 Share Option Incentive Plan would be adjusted from RMB 59.68/share to
RMB 59.36/share, and the said adjustment is subject to final approval by the Board of Directors.
(3) Explanations for other circumstances due to the implementation of the 2016 Restricted Share Incentive
Plan (2016年限制性股票激励计划) during the reporting period
① Explanation on changes in share capital caused by implementation of the 2016 Restricted Share Incentive Plan
(Revised) (2016年限制性股票激励计划（修订稿）).
During the reporting period, the total shares of the Company decreased by 49,690 shares in total due to repurchase
of restricted shares for cancellation.
② Accounting treatment method for option incentive and effects of equity incentive cost on the results of the
Company
According to relevant provisions under the Accounting Standards for Business Enterprises No. 11 - Share-based
Payment (企业会计准则第11号–股份支付), the Company will, on each balance sheet date in the waiting period,
amend the number of restricted shares / share options that are expected to be unlockable / exercisable according to
the latest available information of changes in the number of incentive targets allowed to unlock restricted
shares/exercise options, completion of performance indicators and other follow-up information and include the
services obtained in the current period in the relevant costs or expenses and capital reserve at fair value of the
restricted shares/exercise options on the grant date.
The implementation of the above equity incentive plan will not have a significant impact on the Company's
104
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
financial position and operating results during the reporting period and in the future.
Equity incentives for directors and senior management:
√ Applicable □ Not applicable
Unit: share
Share Exercise Restrict
options price for Market ed Restrict
Exercisa Share Restrict Grant
held at Share Exercise exercise price at shares ed
ble options Shares ed price of
the options d share d share the end held at shares
share held at unlocke shares the
Office beginni granted options options of the the held at
Name options the end d in the granted restricte
title ng of in the in the in the reportin beginni the end
for the of the reportin in the d shares
the reportin reportin reportin g period ng of of the
reportin reportin g period reportin (RMB/s
reportin g period g period g period (RMB / the reportin
g period g period g period hare)
g (RMB / share) reportin g period
period share) g period
Director
and
Qi
Executiv 100,000 100,000 73.3 40,000 40,000 10.44
Cheng
e Vice
President
Director
Xueqiao and
90,000 90,000 73.3 33,450 33,450 7.48
Qian Chief
Engineer
Guoxian Vice
122,840 122,840 10.44
g Liu President
Guoxian Vice
80,000 80,000 73.3 72,600 72,600 7.48
g Liu President
Xiewu Vice
80,000 80,000 73.3 33,390 33,390 7.48
Jiang President
Guoche Vice
126,000 126,000 10.44
ng Mi President
Guoche Vice
80,000 80,000 73.3 66,630 66,630 7.48
ng Mi President
Zhongz Vice
112,840 112,840 10.44
hu Chen President
Zhongz Vice
100,000 100,000 73.3 68,850 68,850 7.48
hu Chen President
Vice
Shaolin
President 90,000 90,000 73.3 33,660 33,660 7.48
Yang
and CFO
105
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
Vice
President
Zhijian and
90,000 90,000 73.3 41,280 41,280 7.48
Huang Board
Secretar
y
Total -- 0 710,000 0 0 -- 710,000 -- 751,540 751,540 0 -- 0
1. The grant prices of the restricted shares in the table are ex-right and ex-dividend prices.
Notes (if any) 2. A total of 710,000 share options were granted to the eight directors and senior management in the table
during the reporting period, all of which were still in lockup as of the end of the reporting period.
Appraisal mechanism and incentives for senior management:
The Company has put in place a senior management selection, appraisal, incentive and restrictive system. All
appointed by and being responsible to the Board of Directors, senior management shoulders the operating
indicators set by the Board of Directors. The Remuneration and Appraisal Committee under the Board is
responsible for a year-end appraisal of senior management’s service ability, performance of duties and fulfillment
of objectives, among others. And then the committee formulates a remuneration plan for the Board’s review.
During the reporting period, the Company duly restricted its senior management as per the applicable laws and
regulations by strengthening the connection between performance appraisal and remuneration and incentives,
aligning remuneration with appraisal results, and achieving differentiation in remuneration and incentives.
2. Employee stock ownership plans
√ Applicable □ Not applicable
Outstanding employee stock ownership plans during the reporting period:
As a percentage
Number of of the
Scope of employees Total shares held Change Funding source
employees Company’s total
share capital
The awardees for the Second
The special fund established by the
Plan of the Employee Stock
Company for the employee stock
Ownership Plan for Core
ownership plan, legitimate employee
Team are key personnel that No more than
4,386,186.00 N/A 0.26% remunerations, and funds pooled by
play a significant role in the 30
other means allowed by the
Company’s operating
applicable laws and administrative
performance and mid- and
regulations
long-term development.
The awardees for the Third The special fund established by the
No more than
Plan of the Employee Stock 888,500.00 N/A 0.05% Company for the employee stock
30
Ownership Plan for Core ownership plan
106
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
Team are key personnel that
play a significant role in the
Company’s operating
performance and mid- and
long-term development.
The awardees for the Fourth
Plan of the Employee Stock
Ownership Plan for Core
The special fund established by the
Team are key personnel that No more than
1,194,582.00 N/A 0.07% Company for the employee stock
play a significant role in the 30
ownership plan
Company’s operating
performance and mid- and
long-term development.
Shares held by directors, supervisors and senior management under employee stock ownership plans during the reporting period:
Shares held at the As a percentage of the
Shares held at the end of
Name Office title beginning of the Company’s total share
the reporting period
reporting period capital
Director and Executive Vice
Qi Cheng
President (Vice General Manager)
Director, Vice President (Vice
Xueqiao Qian General Manager) and Chief
Engineer
Vice President (Vice General
Guoxiang Liu
Manager)
Vice President (Vice General
Shaolin Yang
Manager) and CFO 4,094,921 1,428,500 0.09%
Vice President (Vice General
Xiewu Jiang
Manager)
Vice President (Vice General
Guocheng Mi
Manager)
Vice President (Vice General
Zhongzhu Chen
Manager)
Vice President (Vice General
Zhijian Huang
Manager) and Board Secretary
Note: The shares held in the table above are inclusive of shares that had yet been vested.
Change of asset management organizations during the reporting period:
□ Applicable √ Not applicable
Equity changes incurred by disposal of shares by holders, etc. during the reporting period:
107
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
□ Applicable √ Not applicable
Exercise of shareholder rights during the reporting period:
N/A.
Other information about employee stock ownership plans during the reporting period:
□ Applicable √ Not applicable
Changes in members of the management committees for employee stock ownership plans:
□ Applicable √ Not applicable
Financial impact of employee stock ownership plans on the Company during the reporting period and the relevant
accounting treatments:
√ Applicable □ Not applicable
1. Accounting treatments for share repurchases for the Fourth Plan of the Employee Stock Ownership Plan for
Core Team
According to the application guide for the Accounting Standards for Business Enterprises No. 11 - Share-based
Payment (《企业会计准则第11号—股份支付》), share repurchases carried out by an enterprise as rewards for its
employees are equity-settled share-based payments, for which the accounting treatments are as follows:
(1) Share repurchases
All the costs in share repurchases shall be recorded as inventory stock and the relevant registration for reference
shall be carried out.
(2) Recognition of costs and expenses
The amount by which the price for receiving repurchased shares for employee stock ownership plans is lower than
the fair value on the grant date, as expenses on share-based payments, is recorded in costs and expenses and
amortized over the vesting period, and at the same time recognized in capital reserve (other capital reserve).
(3) Exercise under employee stock ownership plans
Where any exercise occurs upon the expiry of a lockup period under employee stock ownership plans, the
Company writes off treasury stock costs and the cumulative amount in capital reserve (other capital reserve)
during the vesting period, and the difference is recognized as an adjustment to capital reserve (surplus reserve).
2. Financial impact on the Company during the reporting period
The Company completed the non-transaction transfer formalities in June 2021 with respect to all the 1,194,582
108
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
shares under the Fourth Plan of the Employee Stock Ownership Plan for Core Team. The relevant total expenses
recognized during the reporting period were RMB 54.6483 million, which was recognized in general and
administrative expenses and capital reserve.
Termination of employee stock ownership plans during the reporting period:
□ Applicable √ Not applicable
Other information:
1. On 14 May 2018, the Proposal Regarding the Second Plan of the Employee Stock Ownership Plan for Core
Team of Guangdong Haid Group Co., Limited and Its Summary (《关于<广东海大集团股份有限公司核心团队
员工持股计划之二期计划>及其摘要的议案》) (hereinafter referred to as the “Second Plan of the Stock
Ownership Plan”) was approved at the 2017 Annual General Meeting. As such, the Company was approved to
implement the Second Plan of the Employee Stock Ownership Plan. A special fund of RMB38,511,460.57 would
be established and the related employees would raise no more than RMB50,000,000. As of 11 July 2018, the "GF
Yuanchi Haid Core No. 2 Targeted Asset Management Program” (广发原驰海大核心2号定向资产管理计划)
purchased 4,386,186 shares of the Company’s stock from the secondary market for the Second Plan of the Stock
Ownership Plan, of which 1,908,436 shares were purchased with the special fund. On 28 December 2018, the first
vesting of the said shares purchased with the special fund was completed, with 40% of these shares, i.e. 763,374
shares, being vested. On 31 December 2019, the second vesting of the said shares purchased with the special fund
was completed, with 30% of these shares, i.e. 572,531 shares, being vested. On 31 December 2020, the third
vesting of the said shares purchased with the special fund was completed, with 30% of these shares, i.e. 572,531
shares, being vested. The 2,477,750 shares purchased with the employees’ self-raised capital were vested
according to their payment percentage, including a total of 1,585,760 shares to directors and senior management
(Ms. Li Tian, Mr. Qi Cheng, Mr. Xueqiao Qian, Mr. Shaolin Yang, Mr. Zhijian Huang, Mr. Guoxiang Liu, Mr.
Xiewu Jiang, Mr. Guocheng Mi, and Mr. Zhongzhu Chen) and a total of 891,990 shares to other core employees.
As of 31 December 2020, the total 4,386,186 shares under the Second Plan of the Stock Ownership Plan had been
vested, with the vesting particulars in line with the Second Plan of the Stock Ownership Plan.
As of the end of the reporting period, all the 4,386,186 shares held under the Second Plan of the Stock Ownership
Plan had been sold by way of centralized bidding, accounting for 0.26% of the then total share capital.
2. On 6 May 2019, the Proposal Regarding the Third Plan of the Employee Stock Ownership Plan for Core Team
of Guangdong Haid Group Co., Limited and Its Summary (《广东海大集团股份有限公司核心团队员工持股计
划之三期计划》及其摘要的议案》 (hereinafter referred to as the “Third Plan of the Stock Ownership Plan”) was
approved at the 2018 Annual General Meeting. As such, the Company was approved to implement the Third Plan
of the Employee Stock Ownership Plan. A special fund of RMB30,180,630.23 would be established as the capital
source. As of 4 November 2019, the "GF Yuanchi Haid Core Employee Stock Ownership Plan No. 3 Single
Asset Management Program” (广发原驰海大核心员工持股计划3号单一资产管理计划) purchased 888,500
shares of the Company’s stock from the secondary market for the Third Plan of the Stock Ownership Plan. On 31
December 2019, the vesting of the first vesting period of the above-mentioned shares was completed, with 40% of
these shares, i.e. 355,400 shares, being vested. On 31 December 2020, the vesting of the second vesting period of
the above-mentioned shares was completed, with 30% of these shares, i.e. 266,550 shares, being vested. On 31
109
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
December 2021, the vesting of the third vesting period of the above-mentioned shares was completed, with 30%
of these shares, i.e. 266,550 shares, being vested. As of 31 December 2021, the total 888,500 shares under the
Third Plan of the Stock Ownership Plan had been vested, with the vesting particulars in line with the Third Plan of
the Stock Ownership Plan. On 31 December 2021, the lockup period for the Third Plan of the Stock Ownership
Plan expired and the unlocking conditions had been satisfied. Therefore, starting from 31 December 2021, all the
888,500 shares under the Third Plan of the Stock Ownership Plan have been allowed for trading.
As of the end of the reporting period, 888,500 shares were held under the Third Plan of the Stock Ownership Plan,
accounting for 0.05% of the then total share capital. During the reporting period, no change occurred to the
holders of the Third Plan of the Stock Ownership Plan and their holdings.
3. On 20 May 2021, the Proposal Regarding the Fourth Plan of the Employee Stock Ownership Plan for Core
Team (Draft) of Guangdong Haid Group Co., Limited and Its Summary ( 广东海大集团股份有限公司核心团队
员工持股计划之四期计划（草案）》) (hereinafter referred to as the “Fourth Plan of the Stock Ownership Plan”)
was approved at the 2020 Annual General Meeting. As such, the Company was approved to implement the Fourth
Plan of the Employee Stock Ownership Plan. A special fund of RMB 82,438,128.98 would be established as the
capital source. As of 18 June 2021, the Company had transfer 1,194,582 shares of the treasury stock in the
securities account of Haid Group for repurchased shares to the Fourth Plan of the Stock Ownership Plan through a
non-transaction transfer. On 31 December 2021, the vesting of the first vesting period of the above-mentioned
shares was completed, with 40% of these shares, i.e. 477,832 shares, being vested.
As of the end of the reporting period, 1,194,582 shares were held under the Fourth Plan of the Stock Ownership
Plan, accounting for 0.07% of the then total share capital. During the reporting period, no change occurred to the
holders of the Fourth Plan of the Stock Ownership Plan and their holdings.
3. Other Employee Incentive Measures
□ Applicable √ Not applicable
XII. Establishment and Implementation of the Internal Control System during the Reporting
Period
1. Establishment and Implementation of the Internal Control System
(I) Control environment
The Company has set up a favorable governance structure and organization structure and relevant control systems.
It attaches great importance to the favorable corporate culture and has formed a relatively complete internal
control system in terms of business management, capital management, accounting information system
management, human resources and compensation management, information communication, and disclosure
management.
(1) Governance structure
110
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
According to the requirements of relevant laws, regulations, and the Articles of Association (《公司章程》), the
Company has set up the General Meeting of Shareholders, the Board of Directors, the Supervisory Committee
(hereinafter referred to as the "Three Meetings") and the Senior Management. Furthermore, it has specified their
rights and obligations in the Articles of Association and formulated the rules of procedure to ensure the explicit
division of labor and the fulfillment of their duties and responsibilities.
The General Meeting of Shareholders is the high authority of the Company, which enjoys the legal rights
stipulated by laws and regulations and the Articles of Association. It shall, strictly by the law, exercise its right to
vote for major events such as the management principle of the Company, fund-raising, investment, and profit
appropriation.
During the Reporting Period, the Company can hold "Three Meetings" on schedule according to the provisions of
relevant laws, regulations, and the Articles of Association. The documents for "Three Meetings" are complete and
filed. The decision-making process for major investment and financing has fulfilled the rules of procedure of the
Articles of Association and relevant rules. All the directors have attended the meetings with a diligent and
responsible attitude and practically fulfilled their obligations. The Supervisory Committee has played its role by
adopting certain ways of supervision. The Strategy Committee, the Audit Committee, the Remuneration and
Appraisal Committee and the Nomination Committee of the Board of Directors have driven the Board of
Directors to make scientific and efficient decisions. Moreover, the resolutions of "Three Meetings" are well
implemented. The General Manager regularly organized and held manager meetings, conducted production and
business operations, instructed, coordinated, managed, and supervised the Company's functional departments and
holding subsidiaries, ensuring the normal business operation of the Company.
(2) Organizational structure
Based on the demand of principal business and management, the Company set up the President's Room,
Procurement Center, Haid College, Haid Research Institute, Marketing Center, Human Resource Center, Financial
Center, Operation and Development Center, Process and Information Management Center, Securities Department,
the President's Office, Party Working Committee Office, Project Management Office, Audit Center and other
functional departments. Each functional department has its specific division of labor. They fulfill their duties and
responsibilities while they mutually counterbalance and supervise. Based on the Company's business progress, the
Company continues to fully research and improve the core and key work tasks of each functional department so as
to improve the efficiency of the organization and refine the management and control mechanism.
(3) Development strategy
The Strategy Committee of the Board of Directors is responsible for the formulation of the Company's
development strategies to instruct the Company's long-term and robust development. The Strategy Committee
held meetings regularly or irregularly to deliberate major strategic plans for the Company's development and
adjust the Company's development objectives properly. The Company's business management team will formulate
corresponding objectives according to the strategic plans determined by the Strategy Committee and the divisions,
branches, and subsidiaries will formulate their development objectives accordingly.
(4) Corporate culture
111
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
The Company attaches great importance to the development of corporate culture. It fosters positive values and a
sense of social responsibility, advocates honesty, trustworthiness, dedication, and innovation, highlights customer
value, and focuses on employee growth and the spirit of teamwork. It adopts many approaches, such as regular
internal meetings, internal newspapers and publications, the Company's website, forum, the campaign of
rationalization proposal, and employee training, to penetrate the Company's values into the Company. In addition,
it has proactively arranged various themed activities to enhance employees' cohesion and team spirit, thus
promoting the development of corporate culture. Corporate culture has gradually become the value guidance for
the Company's operating and management activities.
(5) Procedures and systems
The Company formulates tailored systematic systems and procedures for the professional work of specialized
departments, implements them throughout the Company, and improves the Company's duplicating and controlling
capability of management. For instance, the Company has developed and continued to improve policies, such as
talent recruitment, talent development, talent promotion, appraisal, remuneration, and incentive. In terms of
internal control, it has set up and refined the capital plan management system, comprehensive budget management
system, accounts receivable management system, fixed asset management system, expense management system,
contract management system, future foreign exchange settlement management system, and internal audit system,
etc. The management systems are annually reviewed, discussed, and upgraded by the Company so as to make
them more adaptable to the Company's business and play the role in guiding and restraining the Company's
business.
(6) Internal supervision
Under the leadership of the Board of Directors and the Audit Committee, the Company sets up the Audit Center,
which is independent of other departments of the Company. The Audit Center conducts internal audits of the
internal control and financial situation of the Company and its holding subsidiaries through a combination of
continuous and special supervision and inspections. The internal audits can inspect and supervise the
establishment and implementation of the Company's internal control systems, the authenticity and integrity of
financial information, and the efficiency and effectiveness of operating activities.
(7) Information communication
The Company has set up an information and communication system to clarify the procedures for collecting,
processing, and transmitting relevant information of internal control so as to ensure the timely communication of
such information, thus promoting the effective operation of internal control.
A. The unblocked information collection channels. Internal information can be accessed by the Company through
many channels, including financial and accounting data, operation management data, investigation reports, special
information, internal publications, EPS, ERP/SAP, and financial sharing system. In addition, the Company can
access external information through trade associations and organizations, social intermediary organizations,
customers and suppliers, market surveys, letters and visits, network media, and relevant regulatory authorities.
B. The timely information transmission procedures. The Company can communicate and feedback relevant
112
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
information on internal control among internal management hierarchies, responsible departments, business links,
internal and external investors, creditors, customers, suppliers, intermediary agencies, and regulatory authorities
promptly. In case of any problems identified from the course of information communication, the Company can
timely report and solve such problems. Important information can be reported timely to the Board of Directors,
the Supervisory Committee, and the Management.
C. The safe operation of information systems. The Company has set up control systems related to the development
and maintenance, access and change, data input and output, document storage, and cyber security of information
systems so as to ensure the safe and stable operation of such systems. The Company also monitors and reviews the
logistics and capital flow of branches and subsidiaries through the information system. All data of branches and
subsidiaries are dually duplicated. The Process and Information Management Center will cross-examine the data
of the Group, branches, and subsidiaries regularly and irregularly. In addition, the Financial Center has assigned
dedicated personnel to conduct random inspections for data of information systems of branches and subsidiaries in
real-time.
(8) Human resources management
In accordance with the provisions of the Labor Law (《劳动法》) and relevant laws and regulations, the Company
has established complete management systems in terms of the recruitment, allocation, compensation, training,
performance management, and promotion of human resources. The Company adheres to the people-oriented
principle and signs labor contracts with all employees. The employees' sense of belonging and sense of mission
has been enhanced through the implementation of the performance appraisal system, motivating their enthusiasm
for work. The stable growth of the Company's operating results and employees' income has been achieved, laying
a foundation for the Company's sustainable development.
(II) Risk assessment
(1) Risk identification and analysis
The Company has a strong sense of risk prevention. It attaches great importance to the identification of risks in
advance. It solicits extensive opinions of relevant parties on all major business decisions. Furthermore, the
Company conducts comprehensive assessments of operating, financial, industrial, and market risks through legal
assessment and contract review, and joint signature. It also develops corresponding risk management measures,
thus forming a relatively refined risk management mechanism.
Meanwhile, the Company continues to collect information related to risk change based on the market situation and
business expansion for risk identification and analysis so as to adjust risk response strategies in time.
(2) Risk control
The Company has developed relatively complete provisions of risk control management to carry out the pre-event
assessment, in-event supervision, and post-event appraisal for the determination of the Company's financial
structure, the arrangement of financing structure, the estimation of financing cost, and the repayment plan for
financing. Feasible research must be conducted for all kinds of investments and the approval authority is
113
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
determined according to the project size and the amount required. Contingency plans are formulated to cope with
any negative factors that might occur in the course of investment. The early warning system of financial risks and
management system of business contracts have been established to enhance the assessment and control over credit
risks and contract risks.
(III) Control activities
In order to reasonably guarantee the realization of all objectives, the Company has set up relevant control policies
and procedures, which mainly include: The approval control of transaction authorization, separate control of
incompatible duties, voucher and record control, property preservation control, independent inspection control,
electronic information system control, complete budgetary control, external guarantee control, information
disclosure control, and the monitoring of control.
(1) The approval control of transaction authorization
It has specified the scope, authority, procedures, responsibilities, and other relevant contents of the authorized
approval. All internal Management levels of the Company must exercise their functional authorities within their
authorized scope and the handling personnel must handle businesses with their authorities as well.
Based on the amount and nature of transactions, the Company has categorized the transaction authorization into
two levels, which are, general authorization and special authorization. In terms of general transactions, such as
purchase and sale and the reimbursement of routine expenses, the Company adopts the hierarchical approval
system involving the responsible accountant, department head, financial manager, general manager, and chairman
so as to ensure that all businesses are approved according to procedures. In terms of non-conventional transactions,
such as related party transactions, major acquisitions, significant capital expenditure, stock issuance, bond
issuance, and other major transactions, must be approved by the Board of Directors or the General Meeting of
Shareholders. The hierarchal authorization has been conducted for transactions in different natures, thus
effectively controlling risks.
(2) The separate control of incompatible duties
It has set up the system of assigning responsibility by position and internal check system and formulated the
position responsibilities of each constituent department and its personnel through the division of authorities and
responsibilities, thus avoiding mistakes and corrupt practices. Based on reasonable labor of division and scientific
division of responsibilities and authorities, the incompatible duties can be separated and each person can
automatically check the work of the other person or multiple persons, thus taking shape of the mechanism of
mutual check and balance. The incompatible duties mainly include: Authorized approval, business handling,
accounting record, property preservation, supervision, and inspections.
(3) Voucher and record control
The Company strictly reviews original vouchers and reasonably formulates the transfer procedures of vouchers.
Vouchers of transactions must be formulated and submitted to the accounting department for recording in time.
The registered vouchers must be filed orderly.
114
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
(4) Property preservation control
Unauthorized personnel is strictly restrained from direct access to properties. Measures, such as periodic inventory,
property record, reconciliation of book balance and actual amount, and property insurance, are adopted to ensure
the security and integrity of various properties.
(5) Independent inspection control
A dedicated internal audit institution has been set up. The responsibilities and authorities of the internal
supervision for the internal audit institution and other internal institutions have been clarified. Meanwhile, the
procedures, methods, and requirements of internal supervision and the scope and frequency of daily supervision
and special supervision have been specified. The nature and cause of deficiencies in internal control identified
from supervision can be analyzed in time. Furthermore, remediation plans can be put forward in time. Such
deficiencies and corresponding remediation plans can be promptly reported to the Board of Directors, the
Supervisory Committee, or the Management in proper form.
(6) Electronic information system control
The Company has developed stricter policies for electronic information system control. Greater efforts have been
made in terms of the development and maintenance of electronic information systems, data input and output, and
document storage.
(7) Complete budgetary control
The Company has carried out the complete budgetary management to strictly control the off-budget capital
expenditure. The financial sharing system and dedicated personnel will supervise, analyze, and appraise the
implementation of the budget. All divisions/branches and subsidiaries/business departments will formulate
budgetary plans annually, which will be regularly analyzed by the financial department so as to restrain such
budget.
(8) External guarantee control
The Company controls the external guarantee in accordance with the law-based, prudent, mutually beneficial, and
safe principle so as to strictly prevent risks caused by the guarantee. The Company has formulated relevant
management systems to reasonably ensure the authenticity and integrity of guarantee business and the legitimacy
and compliance of review procedures.
(9) Information disclosure control
The Company has developed the Information Disclosure System (《信息披露制度》), the Internal Reporting
System of Material Information 《重大信息内部报告制度》), and the Accountability Policy for Material Errors in
Information Disclosure of the Annual Report (《年报信息披露重大差错责任追究制度》). The systems have
specified the responsible person, principle, and main contents of information disclosure, the disclosure, working
procedure, management, and accountability mechanism of major events, and the measures to deal with employees
115
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
violating rules.
The Company has strictly fulfilled the information disclosure obligations according to relevant laws, regulations,
and rules to disclose information truthfully, accurately, completely, and timely, thus ensuring that all shareholders
have an equal opportunity to obtain information.
(10) The monitoring of control
The Company checks the implementation of internal control systems regularly and irregularly, which mainly
includes: The inspection of the Board of Directors of the Company, the inspection of the Audit Committee, and
the inspection of internal audit departments. All these inspections can ensure the effective operation of internal
control activities.
Through the inspection and supervision activities of internal control and the effective measures for the problems
identified from the inspection of regulatory authorities, the Company continues to supervise and inspect business
activities and the implementation of main internal control systems and continuously puts forward opinions and
suggestions on improvement. All these efforts have effectively prevented the risks of internal control and
safeguarded the normal operation of business management activities. It has played important roles in guiding and
driving the enhancement of standardized operation, refinement of corporate governance, and improvement of
management level.
2. Material Internal Control Deficiencies Identified for the Reporting Period
□ Yes √ No
XIII. The Company’s Management and Control of Subsidiaries during the Reporting Period
Problems Solution
Consolidation Solutions Subsequent
Company name Consolidation plan arising in implementation
progress taken solutions
consolidation progress
As per the applicable regulations of
the CSRC and the Shenzhen Stock
Exchange, as well as the Company’s
Articles of Association, the Company
provided compliance guidance for the
Jiangmen Debao
target company in organizational Completed N/A N/A N/A N/A
Group Co., Ltd.
structure, personnel adjustment,
internal controls, financial system,
etc., and has included the target
company in the Company’s system for
unified management.
Ganzhou As per the applicable regulations of
Lianduoli Feed the CSRC and the Shenzhen Stock Completed N/A N/A N/A N/A
Technology Co., Exchange, as well as the Company’s
116
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
Ltd. Articles of Association, the Company
provided compliance guidance for the
target company in organizational
structure, personnel adjustment,
internal controls, financial system,
etc., and has included the target
company in the Company’s system for
unified management.
As per the applicable regulations of
the CSRC and the Shenzhen Stock
Exchange, as well as the Company’s
Articles of Association, the Company
Raoping Haide provided compliance guidance for the
Biotechnology target company in organizational Completed N/A N/A N/A N/A
Co., Ltd. structure, personnel adjustment,
internal controls, financial system,
etc., and has included the target
company in the Company’s system for
unified management.
XIV. Self-Assessment Report or Independent Auditor’s Report on Internal Control
1. Internal Control Self-Assessment Report
Disclosure date of internal control
12 April 2022
self-assessment report
Index to disclosed internal control self-
www.cninfo.com.cn
assessment report
Assessed entities’ combined assets as a
100.00%
percentage of consolidated total assets
Assessed entities’ combined operating
income as a percentage of consolidated 100.00%
operating income
Internal control deficiency identification standards
Type Financial-reporting related Non-financial-reporting related
A material deficiency refers to a deficiency Material deficiencies: (1) The internal
or a deficiency group that consists of control environment is invalid; (2) Any
multiple deficiencies that may cause a great leak of insider information about any
Nature standard deviation from the control objective. It is investment in external parties, asset
considered a material financial-reporting restructuring, etc. against regulations
internal control deficiency if any of the causes any severe fluctuations in the
following cases occurs: (1) Any of the Company’s stock price or any materially
117
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
Company’s directors, supervisors or senior adverse impact on the Company’s image;
management is involved in a serious fraud; (3) The violation of the Company’s
(2) The Company corrects its disclosed decision-making procedure in any
financial statements for multiple times; (3) significant event causes a significant
certified public accountants identifies a economic loss to the Company; or (4)
material misstatement in the current financial The independent auditor identifies any
statements which the Company has failed to other material deficiencies in the
identify during its internal control process; Company.
or (4) The Company’s Audit Committee and Serious deficiencies: (1) The Company
internal audit organ maintain invalid provides any guarantee or conducts any
supervision over internal control. derivative financial instrument
A serious deficiency refers to a single transaction without due authorization or
deficiency or a deficiency group including performance of the corresponding
other deficiencies that is less serious than a information disclosure duty; (2) A severe
material deficiency but may still cause a loss of key talent occurs; (3) The
deviation from the control objective. It is Company is punished or a materially
considered a serious financial-reporting adverse impact is made to its image due
internal control deficiency if any of the to deviation from governing policies,
following cases occurs: (1) The Company measurement errors, etc.; (4) The
does not select and adopt its accounting independent auditor identifies any other
policies as per the generally accepted serious deficiencies in the Company.
accounting standards; (2) The Company does An ordinary deficiency refers to any
not formulate anti-fraud procedures or deficiency that is neither a material
control measures; (3) The Company has no deficiency nor a serious deficiency.
control systems for the accounting treatment
of non-conventional or special transactions;
or (4) There are one or multiple deficiencies
in controls over the financial reporting
process and there is no reasonable assurance
that the financial statements prepared are
truthful and accurate.
An ordinary deficiency refers to any
deficiency that is neither a material
deficiency nor a serious deficiency.
Material deficiency: misstated amount > 3% Material deficiency: Direct loss caused to
of profit before income tax, misstated the Company (hereinafter referred to as
amount ＞3% of net asset value. “loss amount”) > 3% of profit before
Serious deficiency: 1% of profit before income tax, loss amount ＞3% of net
Quantitative standard income tax ＜ misstated amount ≤ 3% of asset value.
profit before income tax, 1% of net asset Serious deficiency: 1% of profit before
value < misstated amount ≤ 3% of net income tax＜loss amount≤3% of profit
asset value. before income tax, 1% of net asset value
Ordinary deficiency: misstated amount ≤ < loss amount ≤ 3% of net asset value.
118
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
1% of profit before income tax, misstated Ordinary deficiency: loss amount ≤1%
amount ≤1% of net asset value. of profit before income tax, loss amount
≤1% of net asset value.
Number of material financial-reporting
0
internal control deficiencies
Number of material
non-financial-reporting internal control 0
deficiencies
Number of serious financial-reporting
0
internal control deficiencies
Number of serious non-financial-reporting
0
internal control deficiencies
2. Independent Auditor’s Report on Internal Control
□ Applicable √ Not applicable
XV. Remediation of Problems Identified by Self-inspection in the Special Action on the
Governance of Listed Companies
On 10 December 2020, the China Securities Regulatory Commission issued the Announcement on Launching a
Special Campaign to Improve the Governance of Listed Companies ([2020] No.69) (《关于开展上市公司治理专
项行动的公告》). According to the notice and requirements of special self-inspection on the governance of listed
companies issued by the Securities Regulatory Bureau of Guangdong of the CSRC, the Company made
coordinated plans, based on the practical and realistic principle, to conduct self-inspection on the governance of
the Company. The relevant self-inspection and remediation report is presented as follows:
1. Self-inspection of the Company
The Company shall need to further refine relevant systems. The Company has set up sound internal management
systems according to relevant laws and regulations and operated by relevant systems and specifications. Upon the
self-inspection, it has been discovered that the provisions on the subject of the legal right to solicit voting rights of
shareholders in the Articles of Association (《公司章程》) are incomplete, which should be revised accordingly.
2. Remediation of the Company
The Company held the 21st Meeting of the 5th Board of Directors and the 2nd Extraordinary General Meeting of
Shareholders of 2021 on 23 July 2021, and 11 August 2021, respectively. The Proposal on Changing the
Registered Capital of the Company and Revising the 'Articles of Association' (《关于变更公司注册资本及修订<
公司章程>的议案》) was deliberated and approved, revising the incomplete clauses related to the subject of legal
right to solicit voting rights of shareholders. Details are presented as follows:
Before revision After revision
119
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
Article 82 The shareholders (including shareholder proxies) shall Article 82 The shareholders (including shareholder proxies) shall
exercise their voting rights with the number of voting shares exercise their voting rights with the number of voting shares
represented by them, with one vote for each share. represented by them, with one vote for each share.
In the event of deliberating major events that may compromise the In the event of deliberating major events that may compromise the
interests of small and medium-sized investors at the General interests of small and medium-sized investors at the General
Meeting of Shareholders, the votes of such investors shall be Meeting of Shareholders, the votes of such investors shall be
counted separately. The separate voting results shall be publicly counted separately. The separate voting results shall be publicly
disclosed in time. disclosed in time.
The shares held by the Company have no voting rights, and such The shares held by the Company have no voting rights, and such
shares shall not be counted in the total number of voting shares shares shall not be counted in the total number of voting shares
present at the General Meeting of Shareholders. present at the General Meeting of Shareholders.
The Board of Directors, independent directors and eligible The Board of Directors, independent directors, shareholders with
shareholders can solicit the voting rights of shareholders. more than one percent of the voting shares, or the investor
Sufficient disclosure of voting intentions shall be disclosed to protection institutes established according to laws,
the shareholders whose voting rights are to be solicited. It is administrative regulations, or the provisions of the CSRC can
prohibited from soliciting shareholders' voting rights in a paid solicit voting rights by themselves or entrust securities
form or a disguised paid form. The Company shall not put companies and securities service agencies. They can publicly
forward a minimum shareholding limit for the solicited voting request the shareholders of the Company to entrust them to
rights. attend the General Meeting of Shareholders, and exercise
their rights of proposals, voting and other shareholder rights
on their behalf. Documents related to the solicitation of voting
rights of shareholders shall be disclosed to the corresponding
shareholders and the Company shall cooperate with such
behaviors accordingly. It is prohibited from soliciting
shareholders' voting rights in a paid form or a disguised paid form.
The Company shall not put forward a minimum shareholding limit
for the solicited voting rights. If the Company or its
shareholders suffer a loss due to the illegal solicitation of
shareholders' voting rights against the law, administrative
regulations, or the provisions of the CSRC, the corresponding
party shall be held accountable for compensation according to
laws.
120
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
Section V. Environmental and Social Responsibility
I. Material Environmental Issues
Whether the Company and its subsidiaries are key pollutant discharging units as published by the environmental protection authority
√ Yes □ No
Names of
The
major Total
numbe Distribut The
Name of the pollutants Total dischar Excess
Discharg r of ion of concentratio
company or and Pollutant discharge standards dischar ge dischar
e method dischar discharg n of the
subsidiary characteris ge approve ge
ge e outlets discharge
tic d
outlets
pollutants
Discharge Standard of Water
Pollutants for Meat Packing
Industry ( 肉类加工工业水污染物
排放标准》) (GB13457-92);
Wastewater Quality Standards for
Wastewate Discharge to Municipal Sewers COD COD
r: chemical Discharg (《污水排入城镇下水道水质标 4.64t/y; 50.495t
oxygen ed into COD 48.9 准》) (GB/T31962-2015); Emission ammon /y;
demand the mg/L; Standards for Odor Pollutants (《恶 ia ammon
(COD), municipa ammonia 臭污染物排放标准》) nitroge ia
Jiaxiang Total
ammonia l pipe nitrogen 10.6 (GB14554-93); Discharge Standard n nitroge
Haiying Food 1 discharg None
nitrogen, network mg/L; TN of Cooking Fume (《饮食业油烟排 0.608t/ n
Co., Ltd. e outlets
total after 24.4 mg/L; 放标准》) (DB37/597—2006); y; TN 4.385t/
nitrogen reaching TP 2.6 mg/L; Integrated Emission Standard of Air 2.57t/y; y; TN
(TN), total the pH7.15 Pollutants (《大气污染物综合排放 TP 56.7t/y;
phosphoru standard 标准》) (GB16297-1996); Emission 0.449t/ TP
s (TP), pH Standard of Air Pollutants for y 6.48t/y
Boilers (《锅炉大气污染物排放标
准》) (DB372374-2018); Emission
Standard of Air Pollutants for
Boilers (《锅炉大气污染物排放标
准》) (GB13271-2014)
Wastewate Wastewat One COD: Wastewater: Secondary standard of COD COD
r: COD, er: outlet for 100mg/L; the Discharge Standard of Water 6.97t/y; 6.97t/y;
Linxi Haiying ammonia Discharg wastewat BOD: Pollutants for Meat Packing ammon ammon
6 None
Food Co., Ltd. nitrogen, ed into er, two 40mg/L; Industry ( 肉类加工工业水污染物 ia ia
biochemic the outlets total 排放标准》) (GB13457-1992); nitroge nitroge
al oxygen municipa for suspended exhaust gas: Emission Standard of n n
121
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
demand l pipe boilers, particulates: Air Pollutants for Boilers (《锅炉大 0.67t/y; 0.67t/y;
(BOD), network and three 100mg/L; 气污染物排放标准》) TP TP
TP, TN, after outlets ammonia (GB13271-2014); Emission 0.021t/ 0.021t/
PH, reaching for nitrogen: Standards for Odor Pollutants (《恶 y; TN y; TN
suspended the exhaust 20mg/L; TN: 臭污染物排放标准》) 0.716t/ 0.716t/
solids, and standard; gas from 40mg/L; TP: (GB14554-1993) y; y;
animal and exhaust producti 3mg/L; PH: sulfur sulfur
vegetable gas: on 6-9; animal dioxide dioxide
oil; Organize and 0.288t/ 0.288t/
exhaust d vegetable y; y;
gas: Sulfur discharge oil:20mg/L; nitroge nitroge
dioxide, sulfur n oxide n oxide
nitrogen dioxide: 1.464t/ 1.464t/
oxide, 10mg/m y y
particles, nitrogen
odor oxide:
concentrati 30mg/m
on, particles:
hydrogen 5mg/m
sulfide, ammonia:
and 4.9kg/h;
ammonia hydrogen
sulfide:
0.33kg/h;
odor
concentratio
n
(dimensionle
ss): 2000
Exhaust Exhaust Odor Table 2 standard of the Emission COD COD
gas: gas: Three concentratio Standards for Odor Pollutants (《恶 73.62t/ 73.62t/
Particles, Organize outlets n 2000; 臭污染物排放标准 》) y; y;
nitrogen d for nitrogen (GB14554-93); Emission Standard ammon ammon
oxide, odor discharge worksho oxide of Air Pollutants for Boilers (《锅炉 ia ia
concentrati and ps, four 100mg/N m 大气污染物排放标准》) nitroge nitroge
Yiyuan on, unorgani outlets Ringelman (DB37/2374-2018); Level 3 n n
Haiying Food Ringelman zed 10 for emittance standard in Table 3 of the Discharge 7.98t/y; 7.98t/y; None
Co., Ltd. emittance; discharge boilers, shade 1; Standard of Water Pollutants for sulfur sulfur
wastewater ; and three sulfur Meat Packing Industry (《肉类加工 dioxide dioxide
: COD, wastewat outlets dioxide 工业水污染物排放标准》) 0.225t/ 0.225t/
ammonia er: for 50mg/N m (GB13457-92); Grade B standards y; y;
nitrogen, Discharg wastewat particles in Table 1 of the Wastewater nitroge nitroge
TN, TP, e after er 10mg/N m Quality Standards for Discharge to n oxide n oxide
pH value, treatment pH value Municipal Sewers ( 污水排入城镇 0.315t/ 0.315t/
122
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
chroma, 6-8.5; COD 下水道水质标准》) y; y;
suspended 500mg/L; (GB/T31962-2015) particle particle
solids, TN 70mg/L; s s
five-day fecal 0.067t/ 0.067t/
BOD, fecal coliform y y
coliform, 10000;
and animal five-day
and BOD
vegetable 250mg/L;
oil ammonia
nitrogen
45mg/L;
chroma 64;
suspended
solids
300mg/L;
animal and
vegetable oil
50mg/L; TP
8mg/L
Wastewate Wastewat Acute
r: COD, er: toxicity:
ammonia Discharg 0.07mg/L;
Discharge Standards of Water
nitrogen e after TOC:
Pollutants for Pharmaceutical
(nitrogen being 30mg/L;
Industry Bio-pharmaceutical
H3 - treated volatile
Category (《生物工程类制药工业
nitrogen), by One phenols:
水污染物排放标准》) (GB
pH value, wastewat discharg 0.5mg/L; pH OCD: OCD:
21907-2008 and the concentration
TN, er e outlet value: 6-9; 9.06t/y; 9.06t/y;
limits specified in the drainage
chroma, treatment for ammonia ammon ammon
agreement of sewage treatment
Sichuan suspended station in wastewat nitrogen ia ia
plant; Emission Standard of Air
Hailinger solids, the er and (nitrogen H3 nitroge nitroge
Five Pollutants for Boilers (《锅炉大气 None
Biopharmaceu five-day worksho four - nitrogen): n: n:
污染物排放标准》)
tical Co., Ltd. BOD, p and discharg 25mg/L; TP 0.453t/ 0.453t/
(GB13271-2014); Emission
animal and reaching e outlets (in P): y; TP: y; TP:
Standards for Odor Pollutants (《恶
vegetable the for 5.1mg/L; 0.092t/ 0.092t/
臭污染物排放标准》)
oil, standard; exhaust formaldehyd y y
(GB14554-93); Sichuan Emission
formaldeh exhaust gas e: 2.0mg/L;
Control Standard for Volatile
yde, gas: animal and
Organic Compounds ( 四川省固定
acetonitrile Organize vegetable oil:
污染源大气挥发性有机物排放标
, total d 70mg/L;
准》) DB51/ 2377—2017
residual discharge chroma: 55;
chlorine and number of
(in unorgani fecal
123
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
chloride), zed coliforms/
total discharge (MP
organic nitrogen/L):
carbon 500;
(TOC), suspended
acute solids:
toxicity, 350mg/L;
number of acetonitrile:
fecal 3.0mg/L;
coliforms, COD:
and 500mg/L;
volatile five-day
phenolic BOD:
surfactants 250mg/L;
; exhaust total residual
gas: Odor chlorine (in
concentrati chloride):
on, 0.5mg/L; TN
NMHC, (in nitrogen):
particles, 38mg/L;
the ammonia:
blackness 1.5mg/m
of smoke, hydrogen
nitrogen sulfide: 0.06
oxide, mg/m odor
sulfur concentratio
dioxide, n: 2000
ammonia (dimensionle
(ammonia ss); volatile
gas), and organic
hydrogen compounds
sulfide (in NMHC):
2.0 mg/m
sulfur
dioxide: 50
mg/m
nitrogen
oxide:150mg
/m
particles:
20mg/m the
blackness of
smoke: ≤
shade 1
124
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
OCD:
3.14t/y;
OCD: suspend
86mg/L; ed
Wastewate Level-1 standards for the 2nd time
One suspended solids:
r: TP, TN, interval of the Discharge Limits of
outlet in solids: 1.82t/y;
Gaozhou OCD, Discharg Water Pollutants of Maoming City
the 50mg/L; ammon
Sanhe Animal ammonia e after (《茂名市水污染物排放限值》);
1 wastewat ammonia ia None None
Husbandry nitrogen, sewage Pollutant Discharge Standards for
er nitrogen: nitroge
Co., Ltd. PH, and treatment Livestock and Poultry Farming
treatment 5.6mg/L; n:
suspended Industry ( 畜禽养殖业污染物排放
zone TN:69mg/L; 0.2t/y;
solids 标准》)
TP: 2.9mg/L; TN:
PH:6-9 2.52t/y;
TP:
0.11t/y
Sulfur Sulfur
The dioxide dioxide
exhaust 0.118t/y 0.118t/y
Exhaust gas is ; ;
gas: discharge Sulfur nitroge nitroge
Nitrogen d after dioxide n oxide n oxide
oxide; being 6mg/m3; 1.769t/ 1.769t/
sulfur processe nitrogen y; y;
dioxide; d for oxide smoke smoke
particles urea 90mg/m3; The discharge limits of air 0.393t/ 0.393t/
(smoke); spraying smoke pollutants for the biomass-fired y; y;
Boiler
mercury denitratio 20mg/m3; briquette boiler of the suspend suspend
exhaust
and its n in a suspended Emission Standard of Air Pollutants ed ed
gas
Guangzhou oxides; bag-type solids for Boiler (《锅炉大气污染物排放 solids solids
outlet;
Haiwei Feed and the dust 2 60mg/L; 标准》)(DB44/26-2001) of 0.087t/ 0.087t/ None
wastewat
Co., Ltd. blackness collector; ammonia Guangdong Province; Grade 1 of y; y;
er
of smoke; the nitrogen the second period of the Discharge ammon ammon
discharg
wastewater wastewat 10mg/L; Limits of Water Pollutants (《水污 ia ia
e outlet
: er is COD 染物排放限值》) (DB44/26-2001) nitroge nitroge
Suspended discharge 90mg/L; of Guangdong Province n n
solids; d into the animal and 0.010t/ 0.010t/
flow, municipa vegetable oil y; COD y; COD
ammonia l pipe 10mg/L; 0.087t/ 0.087t/
nitrogen; network COD y; y;
PH; and after 10mg/L animal animal
COD reaching and and
the vegetab vegetab
standard le oil le oil
0.010t/ 0.010t/
125
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
y; BOD y; BOD
0.010t/ 0.010t/
y y
Construction and operation of pollution prevention and control facilities:
During the Reporting Period, all key pollutant discharging subsidiaries of the Company have been equipped with
pollution control facilities, which are maintained regularly to ensure their effective operation. Specifically: (1)
Exhaust gas: It is discharged after being reduced the concentration and content of ammonia, hydrogen sulfide, and
offensive smell through many processes including wet dust removal, activated carbon, deodorization of spray
tower, and light and oxygen purification; (2) sewage (wastewater): It is discharged after being treated to reach the
standard through A/O process, AAO process, solid-liquid separation + cover lagoon anaerobic + two-stage AO +
Fenton treatment process; (3) solid wastes: Relevant facilities and equipment are equipped to realize harmless and
resource-based treatment.
Environmental impact assessment and other environmental protection administrative licensing of
construction projects:
All the aforementioned feed factories prepared environmental impact reports before project implementation and
submitted to the environmental authority for review and approval in accordance with the requirements of
environmental laws and regulations. They commenced project construction after obtaining the approval and
carried out construction works strictly in accordance with the requirements of environmental impact assessment.
Furthermore, they went through the procedures for the acceptance of project completion for environmental impact
assessment in accordance with laws and obtained the pollutant discharge permit.
Emergency plan for emergent environmental incidents:
During the Reporting Period, in order to implement the Emergency Response Law of the People's Republic of
China (《中华人民共和国突发事件应对法》), other relevant laws, regulations and documents, and to prevent,
prepare for and respond to environmental emergencies, as well as to protect the lives and reduce property losses,
all branches and subsidiaries have formulated contingency plans for environmental protection in accordance with
the requirements of local environmental protection authorities and have carried out drills under the contingency
plans. Meanwhile, in accordance with the requirements in the Management Measures of Haid Group for Safety
and Environmental Protection Emergency Preparation and Response (《海大集团安全环保应急准备和响应管理
办法》), the above-mentioned branches and subsidiaries have established a top-down organizational structure for
emergency response and allocated personnel and resources to enhance the response to risks and events of different
degrees, and strengthen the collaboration between various departments.
Self-monitoring program for environment:
All the branch companies and subsidiaries have formulated environmental self-monitoring plans in accordance
with the requirements of local environmental protection authorities and contacted qualified monitoring units to
conduct self-monitoring on a regular basis. Besides, they disclosed relevant information or filed with local
environmental protection authorities as required. All self-monitoring activities were in compliance with the
126
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
requirements of the environmental protection evaluation and emission standards. Furthermore, some subsidiaries
engaged external professional agencies to carry out phased environmental monitoring. The supervision of the
Company on environmental protection has been intensified by the combination of the Company's self-monitoring
and the third-party professional monitoring. For example, Sichuan Hailinger Biopharmaceutical Co., Ltd.,
engaged a third-party independent agency, namely, Sichuan Jiecheng Environmental Technology Co., Ltd., to
monitor the discharged pollutants. It monitored the ammonia, odor concentration, and nitrogen oxide in exhaust
gas and COD, suspended solids, and ammonia nitrogen in wastewater and issued testing reports stating that all
results conform to requirements of relevant standards.
Administrative penalties imposed for environmental issues during the Reporting Period:
Name of the
Impact on the Remediation
company or Reason for penalty Regulation violated Penalty
Company measures
subsidiary
It violated the
provisions of Clause
I of Article 48 of the
The collection pipe
Law of the People's
of exhaust gas It was instructed to Repaired the
Republic of China
Jiaxiang Haiying ruptured, resulting in correct the unlawful No significantly ruptured pipe and
on the Prevention
Food Co., Ltd. the direct discharge act and fined adverse impact conducted regular
and Control of
of exhaust gas to the RMB20,000 inspections
Atmospheric
external environment
Pollution (《中华人
民共和国大气污染
防治法》)
It violated the
provisions of Article
10 of the Law of the The environmental
People's Republic of The TP in the facilities and
It was instructed to
China on the discharged equipment have been
Jiaxiang Haiying correct the unlawful No significantly
Prevention and wastewater exceeded replaced in time to
Food Co., Ltd. act and fined adverse impact
Control of the requirements of enhance the
RMB370,000
Atmospheric the standard capability of
Pollution (《中华人 wastewater treatment
民共和国大气污染
防治法》)
It violated the The pipe connecting
provisions of Article the photo-oxygen
45 of the Law of the integrated machine It was instructed to Repaired the
Linxi Haiying Food People's Republic of above the gas trap correct the unlawful No significantly damaged pipe and
Co., Ltd. China on the hood in its act and fined adverse impact conducted regular
Prevention and butchering workshop RMB23,000 inspections
Control of was damaged,
Atmospheric generating the
127
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
Pollution (《中华人 exhaust gas
民共和国大气污染 containing volatile
防治法》) organic compounds.
Although the
production was
carried out in a
confined space, the
pollution prevention
measures were not
effective.
Other environmental information that should be disclosed:
N/A.
Measures taken to reduce carbon emissions during the reporting period and the results:
√ Applicable □ Not applicable
The Company has proactively explored energy conservation technologies and processes to reduce energy
consumption and the relevant emissions leading to climate change. Meanwhile, in recent years, Haid has
continued to push forward the energy transformation plans. Clean energies have been utilized in our operating
sites to reduce the dependence on conventional fossil fuels. For current projects, the Company has widely carried
out the phaseout program of coal-fired boilers. So far, the Company has preliminarily realized the conversion to
natural gas boilers and biomass vaporizers. For newly-built projects, the Company has allocated natural gas
boilers, biomass boilers, and other environmental protection equipment during the construction phase of these
projects.
Other information on environmental protection:
N/A.
II. Fulfillment of Social Responsibility
Please refer to the “Haid Group: Social Responsibility Report 2021” (《海大集团：2021年度社会责任报告》)
disclosed by the Company on the media designated for information disclosure.
III. Efforts in Poverty Alleviation and Rural Revitalization
As a privately-held enterprise rooted in agriculture, rural areas, and farmers and dedicated to agriculture and
animal husbandry, Haid Group has proactively responded to the call of the Party and the state. It has remained
committed to the enterprise mission of "prospering agriculture with science and technology, changing rural China",
aiming to facilitate farmers to achieve prosperity and contribute to comprehensive rural revitalization. Since the
founding of Haid Group, over 9,000 service engineers have rushed to ponds and hogcotes to practically assist
128
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
farmers to carry out scientific animal husbandry, fulfilling its responsibility as an example of a leading
agricultural and animal husbandry enterprise. It has exerted well the industry, technology, service, mode, talent,
and capital advantages and continued to enhance its independent innovation capability and comprehensive
strength of scientific research. As a result, it has built a rural revitalization mode with characteristics of Haid,
facilitating the realization of industrialized agriculture, professional farmers, and popularized agricultural
techniques, thus writing a new chapter of comprehensive rural revitalization.
Dur
