深圳市深粮控股股份有限公司
SHENZHEN CEREALS HOLDINGS CO.LTD.
ANNUAL REPORT 2018
April 2019
Section I. Important Notice Contents and Paraphrase
Board of Directors Supervisory Committee all directors supervisors and senior
executives of SHENZHEN CEREALS HOLDINGS CO.LTD. (hereinafter
referred to as the Company) hereby confirm that there are no any fictitious
statements misleading statements or important omissions carried in this report
and shall take all responsibilities individual and/or joint for the reality accuracy
and completion of the whole contents.
Chairman of the Company Zhu Junming General Manager Hu Xianghai Head
of Accounting Ye Qingyun and Head of Accounting Institution (Accounting
Supervisors) Wen Jieyu hereby confirm that the Financial Report of Annual
Report 2018 is authentic accurate and complete.
Except for followed director other directors are attending the Board Meeting for
Annual Report deliberation in person
Director not attending in person
Position of the director
not attending in person
Reasons on absent Trustee
Zhu Junming Chairman On business trip Hu Haixiang
Concerning the forward-looking statements with future planning involved in the
annual report they do not constitute a substantial commitment for investors
Securities Times China Securities Journal Hong Kong Commercial Daily and
Juchao Website (www.cninfo.com.cn) are the media appointed by the Company
for information disclosure all information of the Company disclosed in the above
mentioned media should prevail. Investors are advised to exercise caution of
investment risks.The Company has analyzed the risk factors that the Company may exist and its
countermeasures in the report investors are advised to pay attention to read
“Prospect for future development of the Company” in the report of Section IV-
Discussion and Analysis of the Operation.
This report has been prepared in Chinese and English version respectively. In the
event of difference in interpretation between the two versions Chinese report
shall prevail.The profit distribution plan deliberated and approved by the Board Meeting was:
distributed cash bonus of 1 yuan (tax included) for every 10 shares held by whole
shareholders based on the 1152535254 zero share(tax included) for bonus and
zero share additional for every 10 shares held by whole shareholders with the
capital public reserves.Contents
Section I Important Notice Contents and Paraphrase . ....................................................... 2
Section II Company Profile and Main Finnaical Indexes ..................................................... 6
Section III Summary of Company Business ...................................................................... 12
Section IV Discussion and Analysis of Operation………………………………………………17
Section V Important Events ............................................................................................ 38
Section VI Changes in shares and particular about shareholders ..................................... 105
Section VII Preferred Stock .......................................................................................... 115
Section VIII Directors Supervisors Senior Executives and Staff of the Company ........... 116
Section IX Corporate Governance ................................................................................. 125
Section X Corporate Bond ............................................................................................ 134
Section XI Financial Reprot .......................................................................................... 135
Section XII Documents Available for Reference .............................................................. 328
Paraphrase
Items Refers to Contents
SZCH/Listed Company /the Company/ Refers to Shenzhen Cereals Holdings Co. Ltd.
Shenshenbao/Shenbao Company Refers to Shenzhen Shenbao Industrial Co. Ltd.
SZCG Refers to Shenzhen Cereals Group Co. Ltd
Doximi Refers to SZCG Doximi Business Co. Ltd.
Flour Company Flour Factory Refers to Shenzhen Flour Co. Ltd
SZCG Quality Inspection Refers to SZCG Quality Inspection Co. Ltd.
Dongguan Food Industrial Park Refers to
Dongguan International Food Industrial Park Development Co.
Ltd.Wuyuan Ju Fang Yong Refers to Ju Fang Yong Tea Industry Co. Ltd. in Wuyuan County
Shenbao Technology Center Refers to Shenzhen Shenbao Technology Center Co. Ltd.
Fude Capital Refers to Shenzhen Fude State-owned Capital Operation Co. Ltd.
Agricultural Products Refers to Shenzhen Agricultural Products Co. Ltd
Shenzhen Investment Holding Refers to Shenzhen Investment Holding Co. Ltd
Shenzhen SASAC Refers to
Shenzhen Municipal People’s Government State-owned Assets
Supervision & Administration Commission
CSRC Refers to China Securities Regulation Commission
SSE Refers to Shenzhen Stock Exchange
Dahua CPA Refers to
Dahua Certified Public Accountants (Special General
Partnership)
Article of Association Refers to
Article of Association of Shenzhen Cereals Holdings Co.
Ltd.
RMB/10 thousand Yuan Refers to CNY/ten thousand Yuan
Section II Company Profile and Main Financial Indexes
I. Company information
Short form for share SZCH Shenliang B Stock code 000019 200019
Listing stock exchange Shenzhen Stock Exchange
Chinese name of the Company 深圳市深粮控股股份有限公司
Abbr. of Chinese name of the
Company深粮控股
English name of the
Company(if applicable)
SHENZHEN CEREALS HOLDINGS CO.LTD
Legal Representative Zhu Junming
Registrations add.
8/F Tower B No.4 Building Software Industry Base South District Science & Technology Park
Xuefu Rd. Yuehai Street Nanshan District Shenzhen
Code for registrations add 518057
Offices add. 13/F Tower A World Trade Plaza No.9 Fuhong Rd. Futian District Shenzhen
Codes for office add. 518033
Company’s Internet Web Site www.slkg1949.com
E-mail szch@slkg1949.com
II. Person/Way to contact
Secretary of the Board Rep. of security affairs
Name Wang Fangcheng Huang Bingxia
Contact add.
13/F Tower A World Trade Plaza No.9
Fuhong Rd. Futian District Shenzhen
13/F Tower A World Trade Plaza No.9
Fuhong Rd. Futian District Shenzhen
Tel. 0755-82027522 0755-82027522
Fax. 0755-82027522 0755-82027522
E-mail wangfc@slkg1949.com huangbx@slkg1949.com
III. Information disclosure and preparation place
Newspaper appointed for information disclosure
Securities Times; China Securities Journal and Hong Kong Commercial
Daily
Website for annual report publish appointed by CSRC Juchao Website: www.cninfo.com.cn
Preparation place for annual report Office of the Board of Directors
IV. Registration changes of the Company
Organization code 91440300192180754J
Changes of main business since listing (if
applicable)
On February 18 2019 the company completed the registration procedures of changes in
industry and commerce for business scope and other matters. The main business has
newly increased grain and oil reserves grain and oil trade grain and oil processing and
service business for grain and oil circulation and grain and oil reserves based on the
production research and development and sales of food raw materials (ingredients)
mainly based on tea and natural plant deep processing.Previous changes for controlling
shareholders (if applicable)
On 10 September 1999 Shenzhen Investment Management Co. Ltd. entered into the
“Equity Transfer Agreement of Shenzhen Shenbao Industrial Co. Ltd.” with Agricultural
Products for 58347695 shares of the Company (35% in total shares of the Company)
transfer to Agricultural Products with price of RMB 1.95 per share. Agricultural Products
comes to the first majority shareholder of the Company after transfer and procedures for
the above equity transfer has completed in June of 2003.
On April 3 2018 Shenzhen Investment Holdings completed the transfer of all of its
79484302 shares of A shares in the company to Fude Capital. After the completion of
the equity transfer Shenzhen Investment Holdings no longer holds shares in the
company while Fude Capital directly holds 79484302 shares of A shares in the
company (accounting for 16% of the company’s original total share capital) and controls
19.09% shares of the company through Agricultural Products Control Company
becoming the controlling shareholder of the company.V. Other relevant information
CPA engaged by the Company
Name of CPA Dahua Certified Public Accountants (Special General Partnership)
Offices add. for CPA 11/F Block B Union Square No. 5022 Binhe Blv Futian District Shenzhen
Signing Accountants Chen Baohua Zhou Lingzhi
Sponsor engaged by the Company for performing continuous supervision duties in reporting period
□ Applicable √ Not applicable
Financial consultant engaged by the Company for performing continuous supervision duties in reporting period
√Applicable □Not applicable
Financial consultant Office address Financial consultant sponsor Continuous supervision period
Wanho Securities Co. Ltd.Times Technology Building
No.7028 Shennan Avenue
Futian District Shenzhen
Guo Yong Yu Hai
12 November 2018 to 31
December 2019
VI. Main accounting data and financial indexes
Whether it has retroactive adjustment or re-statement on previous accounting data or not
√Yes □No
Reasons for retroactive adjustment or re-statement
Enterprise combined under the same control
2018
2017
Changes over
last year
2016
Before
adjustment
After
adjustment
After
adjustment
Before
adjustment
After
adjustment
Operating revenue (RMB)
10758782838
.14
315762708.35
10793693156
.79
-0.32% 273383642.99
7493028165.
21
Net profit attributable to
shareholders of the listed
Company(RMB)
308331032 .4
4
-54094136.23 359174263.44 -14.16% 96620658.92 364384734.36
Net profit attributable to
shareholders of the listed
Company after deducting non-
recurring gains and
losses(RMB)
-70825168.94 -56114386.31 -56114386.31 -26.22% -64394848.68 -64394848.68
Net cash flow arising from
operating activities(RMB)
299103635.58 -94914594.15 17058691.88 1653.38% 61740568.12 99307564.51
Basic earnings per share
(RMB/Share)
0.2675 -0.1089 0.3116 -14.15% 0.1945 0.3162
Diluted earnings per share
(RMB/Share)
0.2675 -0.1089 0.3116 -14.15% 0.1945 0.3162
Weighted average ROE 7.70% -5.46% 9.55% -1.85% 9.82% 10.77%
End of 2018
End of 2017
Changes over
end of last year
End of 2016
Before
adjustment
After
adjustment
After
adjustment
Before
adjustment
After
adjustment
Total assets (RMB)
6468951 793.
87
1070386220.
55
5911027724.
31
9.44%
1178543725.
30
5487316562.
13
Net assets attributable to
shareholder of listed
Company(RMB)
4172502535.
11
946920577.33
3848760765.
85
8.41%
1031768388.
87
3582365242.
67
Total share capital of the Company on the trading day prior to disclosure:
Total share capital of the Company on the trading day prior to
disclosure (Share)
1152535254
Total diluted EPS calculated with the latest share capital
(RMB/Share)
0. 2675
Whether has corporate bonds
□Yes √No
VII. Difference of the accounting data under accounting rules in and out of China
1. Difference of the net profit and net assets disclosed in financial report under both IAS
(International Accounting Standards) and Chinese GAAP (Generally Accepted Accounting
Principles)
√ Applicable □ Not applicable
In RMB
Net profit attributable to shareholders of listed
Company
Net assets attributable to shareholders of listed
Company
Current period Last period Ending amount Opening amount
Chinese GAAP 308331032 .44 359174263.44 4172502535.11 3848760765.85
Items and amount adjusted by IAS
Adjustment for other
payable fund of stock
market regulation
1067000.00 1067000.00
IAS 308331032 .44 359174263.44 4173569535.11 3849827765.85
2. Difference of the net profit and net assets disclosed in financial report under both foreign accounting rules
and Chinese GAAP (Generally Accepted Accounting Principles)
□ Applicable √ Not applicable
The Company has no above mentioned condition occurred in the period
3. Explanation on differences of the data under accounting standards in and out of China
□ Applicable √ Not applicable
VIII. Main financial index disclosed by quarter
In RMB
1st Q 2nd Q 3rd Q 4th Q
Operating income 2427761440.54 2006927206.28 2834555228.13 3489538963.19
Net profit attributable to
shareholders of listed Company
125145974.07 77633369.27 87708504.25
17843184.85
Net profit attributable to
shareholders of listed Company
after deducted non-recurring
gain/loss
-10953014.99 -7931905.70 -12241225.60 -39699022.65
Net cash flow arising from 99267533.46 -46406288.16 64495978.61 181746411.67
operating activities
Whether there are significant differences between the above-mentioned financial index or its total number and the relevant financial
index disclosed in the Company’s quarterly report and semi-annual report
□Yes √ No
IX. Items and amounts of extraordinary profit (gains)/loss
√ Applicable □ Not applicable
Item 2018 2017 2016 Note
Gains/losses from the disposal of non-
current asset (including the write-off that
accrued for impairment of assets)
1207842.88 -50200.13 171607536.76
Governmental subsidy reckoned into current
gains/losses (not including the subsidy
enjoyed in quota or ration according to
national standards which are closely relevant
to enterprise’s business)
8311158.51 2990059.15 4000648.87
Fund possession cost reckoned in current
gain/loss charged from non-financial
enterprise
490289.86 488839.56
Profit and loss of assets delegation on
others’ investment or management
1984446.92 2706034.95 821891.58
Net gains/losses of the current period from
beginning of the period to date of
consolidation for those subsidiary arising
from enterprise combined under the same
control
374880023.05 413268399.67 267764075.44
Gains and losses from change of fair values
of held-for-transaction financial assets and
financial liabilities except for the effective
hedge business related to normal business of
the Company and investment income from
disposal of tradable financial assets and
liabilities and financial assets available for
sale
-474740.24 -1651270.40 -335414.30
Other non-operating income and expenditure
except for the aforementioned items
-4434126.83 -4097739.37 8557332.04
Other gains/losses items that conform to the
definition of non-recurring gains/losses
450000.00
Less: impact on income tax 3210576.33 51797.61 23961893.28
Impact on minority shareholders’ equity
(post-tax)
48116 .44 -1686323.93 -325405.93
In RMB
Concerning the extraordinary profit (gain)/loss defined by Q&A Announcement No.1 on Information Disclosure for Companies
Offering Their Securities to the Public --- Extraordinary Profit/loss and the items defined as recurring profit (gain)/loss according to
the lists of extraordinary profit (gain)/loss in Q&A Announcement No.1 on Information Disclosure for Companies Offering Their
Securities to the Public --- Extraordinary Profit/loss explain reasons
□ Applicable √ Not applicable
In reporting period the Company has no particular about items defined as recurring profit (gain)/loss according to the lists of
extraordinary profit (gain)/loss in Q&A Announcement No.1 on Information Disclosure for Companies Offering Their Securities to the
Public --- Extraordinary Profit/loss
Total 379156201.38 415288649.75 428779583.04 --
Section III Summary of Company Business
I. Main businesses of the Company in the reporting period
Does the Company need to comply with disclosure requirements of the special industry?
No
During the reporting period the company completed major asset restructuring. The main business newly increased
grain and oil reserves grain and oil trade grain and oil processing and service business for grain and oil circulation
and grain and oil reserves based on the production research and development and sales of food raw materials
(ingredients) mainly based on tea and natural plant deep processing.The tea business mainly covers intensive processing premium tea sales tea life experience tea electronic trading
food and beverage technology research and development and so on. The main products include “Golden Eagle”
instant tea powder tea concentrate and other series of tea products; “Jufangyong” “Gutan” “Fuhaitang” series of
tea products; “Tri-Well” oyster sauce chicken essence seafood sauce and other series of condiments; “Shenbao”
chrysanthemum tea lemon tea herbal tea and other series of drinks.The grain and oil trade business is mainly rice wheat rice in the husk corn sorghum cooking oil and other varieties
of grain and oil. According to the market conditions and the needs of upstream and downstream enterprises the
above-mentioned grain and oil products purchased are independently traded. The wheat rice in the husk corn
barley and sorghum in the trade products are the unprocessed grain which are mainly used for the further processing
of food and feed for customers such as large traders feed and flour processing enterprises in the industry; rice flour
and vegetable oil are the finished grain and oil of which the main consumer groups are institutions organizations
enterprises and public institutions food deep processing enterprises and community residents.The grain and oil processing business is mainly the processing and sale of flour rice cooking oil and other products.The main products of the company’s flour processing include “Jinchangman” “Yingshanhong” and “Hongli” series
bread flour; “Clivia” and “Canna” series tailored flour for cakes and steamed bun; “Sunflower” high-gluten tailored
flour and biscuit tailored flour; “Feiyu” caramel treats tailored flour; “Yuejixiang” moon cake tailored flour and
other various small packages of flour. Rice products include “SZCG Duoxi” “Guzhixiang” “Jinjiaxi”
“Runxiangliangpin” “Hexiang” etc. Among them SZCG Duoxi Changxiangdao Daohuaxiang Rice was selected
as the first batch of “China Good Grains and Oils” products by the State Administration of Grain as the only selected
product in Guangdong Province. Cooking oil products include brands such as “SZCG Duoxi” “SZCG Fuxi” and
“Hongli”. The company has also established a grain and oil food delivery service system actively promoted e-
commerce marketing had a B2C grain and oil network direct sales platform “duoximi.com” and has opened
channels in e-commerce platforms such as Tmall and Jingdong Mall and has set up branches in Guangzhou to
promote grain and oil terminal vending machines to enter the community and provide consumers with green and
reliable grain and oil products.The grain and oil reserve service business mainly provides dynamic grain and oil reserve services to local
governments in Shenzhen and provides local governments with market-oriented services such as grain and oil
reserves testing and rotation in the form of business holdings. With the advantages of brand reputation experience
management service facilities and information system accumulated in the grain and oil market we independently
organize and implement the procurement storage rotation sales and other activities of the local government
reserves of grain and oil and ensure the quality quantity and safety and other aspects of grain and oil reserves are
in line with the requirements of the reserve grain and oil administrative authorities of local governments providing
local governments with high-quality dynamic grain and oil reserve services to ensure local food security.The company also provides grain and oil circulation services such as warehousing and logistics terminal loading
and unloading and quality inspection for upstream and downstream enterprises in the industrial chain. The SZCG
Dongguan Grain Logistics Nodes Project has been steadily advanced completed storehouse capacity of 320000
tons (including temporary gas film silo) and a 5000-ton grain-specific terminal which achieved an upgrade of
15000 tons of berthing capacity during the reporting period the storage transfer volume reached 1.2 million tons
and the terminal transfer volume was more than 400000 tons; at the same time the CDE silos with 510000 tons of
warehouse capacity under construction food deep processing projects the terminal phase I and other projects are
progressing smoothly. After the project is completed it will become a comprehensive grain circulation service
provider integrating five functions including grain and oil terminal transfer reserve inspection and processing
delivery and bonded tax and market transaction. The company’s subordinate enterprise SZCG Quality Test has
more than 100 professional equipment and has obtained the qualification certificates authorized by quality testing
organizations and was awarded the “Guangdong Shenzhen National Grain Quality Monitoring Station” and more
than 6000 samples were tested in 2018. The company’s subsidiaries also provide logistics services and cold chain
distribution services to customers the above-mentioned grain and oil industry chain circulation services are
gradually becoming an important business segment of the company.II. Major changes in main assets
1. Major changes in main assets
Major assets Note of major changes
Equity assets Adding new investment outside in the period
Fixed assets No major Change
Intangible assets Parts of the property has surcharge for land price
Construction in progress Investment for joint project engineering from SZCG Dongguan Logistic increased
Inventory Reducing grain inventory according to the market quotations
2. Main overseas assets
□ Applicable √ Not applicable
III. Core Competitiveness Analysis
Does the Company need to comply with disclosure requirements of the special industry?
No
During the reporting period the company completed major asset restructuring and increased high-quality grain and
oil reserves grain and oil trade grain and oil processing and grain and oil circulation and grain and oil reserve
service industries on the basis of the established and complete tea industry chain system such as tea planting tea
primary processing /elaborate processing tea deep processing premium tea sales tea life experience tea electronic
trading/finance food and beverage etc. through resource integration the “double main business” developed in
parallel which extended the development of the grain and tea industry chain deepened the enterprise reform and
rejuvenated the traditional industry. The company stimulated the viability of enterprises through innovative
implementation of EVA performance appraisal mechanism promoted the sustainable development of enterprises
through the guidance of grain logistics nodes projects built unique competitiveness by adhering to the organic
combination of “dynamic reserves” and market-oriented operation improved management efficiency by
continuously leading the information construction of domestic grain industry prevented business risks by building
a new “four-in-one” management and control model and built a leap-forward development foundation bystrengthening the corporate culture and talent management so as to embark on a development path with “SZCGcharacteristics” to form the company’s unique competitiveness.
1. Management advantages
The core management team of the company has rich experience and stable structure and has a strong strategic
vision and pragmatic spirit. It has formed a set of effective system and mechanism to promote the high-quality
development of the company by combining with the company’s actual development. The company vigorouslypromotes the innovation and transformation of business models and actively promotes the transition from “trade-oriented enterprises” to “service-oriented enterprises” and from “operational management and control” to “strategicmanagement and control”. In the business management and control the company builds a “four-in-one”management and control model that the business operations and fund management inventory management and
quality management relatively separate and check and balance each other at the same time it strengthens risk
management budget management plan management contract management customer management and brand
management and other measures to effectively prevent operational risks. Through innovative talent management
the company has established an open talent team to meet the long-term development of enterprises. The company
has innovated and implemented the EVA performance appraisal mechanism and established a result-oriented
incentive and restraint assessment mechanism which effectively built the performance culture and stimulated the
viability within the enterprise. The company insists on cultivating and advocating the corporate culture with
“people-oriented performance first excellent quality and harmony” as the core values combines the personal
development goals of employees with the corporate vision and enhances the cohesiveness and centripetal force of
the enterprise.
2. Business model advantages
In terms of business layout and management the company has further cultivated the market segment and gradually
built and formed a “three-in-one” multi-level grain and oil supply network of catering and distribution services
terminal grain and oil e-commerce and service-oriented grain and oil docking trade. The company vigorously
develops new commercial activities of grain actively promotes the development of new grain retail formats such
as “internet + grain” grain e-commerce and “community vending grain supply centers” and promotes the deep
integration of online and offline e-commerce platforms. The company builds a grain bulk commodity trading
platform efficiently integrates business flow logistics and information flow improves circulation efficiency and
provides spot trading financing logistics quality inspection transaction information and other services for internal
business units suppliers and customers. The company gives full play to the traction role of major projects such as
grain logistics nodes continuously improves the construction of the grain supply chain system and promotes the
sustainable development of enterprises.
3. Research and development technology advantages
The company attaches great importance to transforming and upgrading the traditional industries by modern
technologies and actively introduces a new generation of information technologies such as internet of things cloud
computing big data and mobile internet into grain management. It takes the lead in promoting the construction of
“standardization mechanization informationization and harmlessness” of warehouse management in the industry
independently develops “grain logistics information system” (SZCG GLS) applies RFID technology and slip sheet
equipment introduces intelligent robots and upgrades the grain depot operation efficiency and management
efficiency. The company has undertaken a number of national-level research projects and multiple IT project results
have won national provincial and municipal awards. The company has completed the development and application
of 30 new technologies and participated in several national-level scientific research projects. As of now the
company has 62 patents and 20 copyrights.
4. Quality advantages
The company gives full play to the advantages of products channels brands warehousing quality inspection etc.and truly provides good quality and safety products for the society. The company has established a quality control
system that is recognized by international large food and beverage enterprises. In the grain and oil business the
company’s subordinate enterprise SZCG Quality Test has the leading grain quality testing technology and
equipment in the domestic grain industry and has been officially incorporated into the national grain qualitysupervision and testing system and has been awarded the “Guangdong Shenzhen National Grain QualityMonitoring Station” by the State Administration of Grain. The advanced testing technology selects and checks the
grain from the source and timely and accurately checks the quality status of grain and oil in all aspects of
warehousing storage and delivery. SZCG Quality Test has obtained the qualification certificate (CMA) for testing
and inspection institutions and it is the first among domestic peers to include pesticide residues heavy metal
pollutants mycotoxins and other hygienic indicators and taste value indicators in daily testing indicators and has
the detection ability of four types of indicators such as grain regular quality storage quality hygiene and eating
quality which can meet the relevant quality inspection requirements of grain and oil products and can accurately
analyze the nutritional ingredients and hygienic index of grain and determine its storage quality and eating quality.
5. Brand advantage
The company regards “quality” as the cornerstone of establishing the enterprise brand and takes “good service”
and “livelihood guarantee” as the brand’s core value and has created a batch of “reliable grain” “reliable flour”
and “reliable oil” brand systems and has formed good brand effects. The company has been selected as one of the
“Top 500 Chinese Service Enterprises” for five times and has won the “China Top Ten Grain and Oil Group”
“China Top 100 Grain and Oil Enterprise” “China’s Most Respected Grain and Oil Enterprise” “National Top 100Military Supply Stations” and “Key Agricultural Leading Enterprises in Guangdong Province” etc. and wasawarded “Shenzhen Credit Enterprise” “Shenzhen Old Brand” “Leading Enterprises Strongly Support Grain andOil Industrialization” etc. the market influence of “SZCG Duoxi” “Guzhixiang” “Clivia” “SZCG Fuxi” and otherbrands has gradually expanded and the subordinate flour company has won the title of “Shenzhen Old Brand” and
SZCG Duoxi Changxiangdao Daohuaxiang rice has been selected as the first batch of “China Good Grain and Oil”
products of the State Administration of Grain which is the only selected product in Guangdong Province.
6. Market advantage
The company has a large-scale storehouse capacity in Shenzhen and is the leading enterprise in Shenzhen’s
municipal grain reserves. At present the company has a self-owned grain storehouse capacity of about 400000 tons
and has established long-term and extensive and diversified cooperative relationship with grain and oil traders
processors and end customers over the years and built wide business networks and stable business channels andhas a high market share in the regional market and was rated as “Key Agricultural Leading Enterprises in GuangdongProvince” by the Department of Agriculture and Rural Affairs of Guangdong Province. On the basis of giving
priority to ensuring the government’s macro-control to grain and ensuring grain security the company gives full
play to the operating characteristics and advantages of “dynamic rotation” and “constant storage and constantreplacement” and fully participates in market competition. In the process of market-oriented self-management the
company continues to optimize and innovate the grain storage logistics mode and the grain and oil distribution
docking mode so that the market competitiveness and regulation power have significantly enhanced the main
channel advantages of grain and oil supply have been further stabilized and the main position of grain and oil
industry has further highlighted.Section IV Discussion and Analysis of the Operation
I. Introduction
During the reporting period Shenzhen Cereals Holdings earnestly implemented the annual key work and strategic
planning objectives implemented major asset restructuring acquired 100% equity of Shenzhen Cereals Group and
achieved the overall listing of local state-owned grain enterprises. The company’s main business newly increased
grain and oil reserves grain and oil trade grain and oil processing and service business for grain and oil circulation
and grain and oil reserves based on the production research and development and sales of food raw materials
(ingredients) mainly based on tea and natural plant deep processing and the company transformed into the track of
“double main business” developing shoulder to shoulder.
During the reporting period Shenzhen Cereals Holdings focused on creating “a quality service provider for grainsupply chain and a safe and quality food supplier” took continuous innovation and development as the principle
line and insisted on quality leading and innovation driving. The operating efficiency of the whole year continued
to improve the company was awarded the “Top 500 Chinese Service Enterprises” and the subordinate Shenzhen
Cereals Group was successfully selected into the list of “Double Hundred Actions” enterprises under the State
Council’s state-owned enterprise reform and its subsidiary Wuyuan Jufangyong was recognized as a national high-
tech enterprise.
1. Main business development
As the “grain security” project and “rice bag” of Shenzhen Shenzhen Cereals Holdings guaranteed both quality and
quantity and completed the government reserve services during the reporting period with monthly average grain
reserves reaching 1014200 tons and oil reserves reaching 12100 tons and guaranteed that Shenzhen’s grain and
oil were in liberal supply and the prices were stable through balance rotation of grain and oil.
During the reporting period based on its own advantages and industrial development the company used
informationization technology innovated and opened up supply channels and trading methods for grain and oil
products built the “three-in-one” food service networks for family-oriented customers schools office buildings
large enterprises and institutions as well as feed mills and factories expanded the effective and medium-to-high-
end supply of grain and oil to meet the needs of “quality diversity nutrition health greenness and convenience”
and realized the transformation of grain supply from “eat enough” to “eat well”. First the members of its
“duoximi.com” online member + offline unmanned retail model have reached more than 350000 families annual
income exceeded 100 million yuan. Second its subsidiary SZCG Big Kitchen Food Supply Chain Co. Ltd provided
one-stop kitchen distribution services for high-end office buildings schools hospitals enterprises and institutionscatering and other units serving more than 400000 people per year. Third its “online bulk grain and oil tradingplatform” expanded the processing of raw materials and brought together the service business with an annual
turnover exceeding 5 million tons and the turnover reached 11 billion yuan.
During the reporting period the subordinate SZCG Quality Test passed the CATL qualification certification of
agricultural products and obtained the CMA certificate 6223 samples were tested throughout the year an increase
of 24% on a year-on-year basis including 1217 samples tested for external customers. Checked the inventory of
provincial-level grain and oil the quality compliance rate of grain storage in the northeast region was 100% and
the quality compliance rate of municipal grain and oil inventory was 98%. In addition the satisfactory results of the
military grain service satisfaction assessment were 100% and got “0” complaints throughout the year.
2. Key projects
During the reporting period the company’s Dongguan grain logistics nodes project simultaneously carried out the
construction of 510000 tons of CDE silos food deep processing projects and terminal phase I and other projects.The progress of the pile foundation project of the CDE silos project reached 90% and the main construction of the
food deep processing project was basically completed. The international food terminal achieved an upgrade of
15000 tons of berthing capacity and 406 vessels were loaded and unloaded throughout the year and the transfervolume exceeded 400000 tons. The company has won many honors such as “Key Agricultural Leading Enterprisesof Guangdong Province” and “National Reassuring Grain and Oil Demonstration and Storage Enterprise”.
During the reporting period www.zglsjy.com.cn was fully launched on the platform and held the first bran bidding
fair in February 2018 and a total of 133 bidding fairs were held throughout the year. In addition www.zglsjy.com.cn
and Ping An Bank jointly launched the “Spot Trading Link” three-party depository realizing all transactions through
margin trading online.
3. Continue to innovate and develop
During the reporting period Shenzhen Cereals Holdings established the SZCG Research Institute to ensure the
sustainable and healthy development of innovation. At present the innovative R&D system with SZCG Research
Institute as the core and with Shenyuan Data and Product Research and Development Center of Flour Company
duoximi Quality Test R&D Department and SZCG Storage Branch Technology Center as the key supports has been
formed and the traction business continued to develop. Continued to promote informatization construction
accelerated the construction and improvement of decision support systems and upgraded the core business system
of the constituent companies including: the completion of Dongguan Intelligent Logistics Park Informationization
Phase I Flour Storage Informationization Phase II and SZCG Digitalization Lab Phase I; the Grain Supply Chain
Management Information System (referred to as “Grain SCM System”) was applied in 6 units as planned; undertook
the “Grain Safety Project” of the Grain Depot directly under Dongguan Development and Reform Bureau and
expanded the external informationization projects such as Guangdong Guanxiang Tailiang Rice and Huizhou
military supply “grain safety project”; the Shenyuan Data Company undertook projects worth more than 10 million
yuan in 2018.In addition the company continued to master key intellectual property rights in the core areas of industry
information construction. During the report period it obtained 1 new computer software copyright and 5 other
applications are in the process. Up to now the company has 62 patents and 20 copyrights.
4. Safe production
During the reporting period Shenzhen Cereals Holdings adhered to the concept of “management-oriented safety-oriented” safety development and implemented the responsibility system for production safety to ensure zero
accidents in safety production throughout the year. Including: the company completed various safety production
control indicators; took the lead in comprehensively carrying out the construction of safety standardization system
and the establishment of dual prevention mechanisms among the municipal state-owned enterprises in the whole
city in the company’s overall form; fully completed the safety education and training for all types of personnelrequired by the “Responsibility Regulations on Safe Production Entities of Production and Operation Units inShenzhen.
In 2018 the Company achieved total operating income of 10758780000 Yuan an increase of 3307.27% over the
same period of last year(before reorganization); operating profit of 341230000 Yuan an increase of 696.76% over
the same period of last year(before reorganization); net profit attributable to shareholders of the listed Company of
308340000 Yuan an increase of 670% over the same period of last year(before reorganization). The changes in net
profit attributable to shareholders of the listed Company mainly because the Company completed material assets
reorganization in the period the performance of SZCG are including in the Company for in the consolidate statement
scope as a wholly-owned subsidiary.II. Main business analysis
1. Introduction
See the “I-Introduction” in “Discussion and Analysis of the Operation”
2. Income and cost
(1) Constitute of operating income
In RMB
2018 2017
Increase/decrease y-
o-y (+-) Amount
Ratio in operation
income
Amount
Ratio in operation
income
Total operating income 10758782838.14 100% 10793693156.79 100% -0.32%
According to industries
Industry 695553870.44 6.46% 725888522.28 6.73% -4.18%
Trading 9195475394.07 85.47% 9251910218.70 85.72% -0.61%
Reserve and
warehousing logistic
service
750725543.50 6.98% 689991273.21 6.39% 8.80%
Leasing business and
other
117028030.13 1.09% 125903142.60 1.17% -7.05%
According to products
Tea and seasoning 279394901.18 2.60% 307578675.27 2.85% -9.16%
Grain and oil reserve 691544621.62 6.43% 639830385.04 5.93% 8.08%
service
Grain and oil trading
and processing
9611634363.33 89.34% 9670220065.71 89.59% -0.61%
Warehousing logistics
service
59180921.88 0.55% 50160888.17 0.46% 17.98%
Other 117028030.13 1.09% 125903142.60 1.17% -7.05%
According to region
Domestic market 10717552556.45 99.62% 10756701331.93 99.66% -0.36%
Exportation 41230281.69 0.38% 36991824.86 0.34% 11.46%
(2) About the industries products or regions accounting for over 10% of the Company’s
operating income or operating profit
√ Applicable □Not applicable
Does the Company need to comply with disclosure requirements of the special industry?
No
In RMB
Operating income Operating cost
Gross
profit
ratio
Increase/decrea
se of operating
income y-o-y
Increase/decrea
se of operating
cost y-o-y
Increase/decrea
se of gross
profit ratio y-o-
y
According to industries
Trading 9195475394.07 8827089691.12 4.01% -0.61% -1.45% 0.82%
According to products
Grain and oil
trading and
processing
9611634363.33 9210878430.16 4.17% -0.61% -1.48% 0.85%
According to region
Domestic market 10717552556.45 9661039061.95 9.86% -0.36% -1.61% 1.15%
Under circumstances of adjustment in reporting period for statistic scope of main business data adjusted main business based on latest
one year’s scope of period-end
□ Applicable √Not applicable
(3) Income from physical sales larger than income from labors
√ Yes □ No
Industries Item Unit 2018 2017
Increase/decrease y-
o-y (+-)
Trading
Sales volume Ton 4100188.31 4361341.54 -5.99%
Output Ton 0 0 0
Storage Ton 1004124.93 1104062.8 -9.05%
Reasons for y-o-y relevant data with over 30% changes
□ Applicable√Not applicable
(4) Fulfillment of the Company’s signed significant sales contracts up to this reporting period
□ Applicable √Not applicable
(5) Constitute of operation cost
Classification of industries and products
In RMB
Industries Item
2018 2017
Increase/decrease
y-o-y (+-) Amount
Ratio in operation
cost
Amount
Ratio in operation
cost
Trading Raw materials 8827089691.12 91.06% 8957020243.19 90.96% -1.45%
In RMB
Products Item
2018 2017
Increase/decrease y-
o-y (+-) Amount
Ratio in operation
cost
Amount
Ratio in operation
cost
Grain and oil trading
and processing
Raw materials 9185461514.60 94.76% 9326537456.25 94.71% -1.51%
Grain and oil trading
and processing
Labor wage 2659530.58 0.03% 1709723.80 0.02% 55.55%
Grain and oil trading
and processing
Cost of production 22757384.98 0.23% 21037961.83 0.21% 8.17%
Explanation
Nil
(6) Whether the changes in the scope of consolidation in Reporting Period
√Yes □No
Change of the consolidate scope due to the material assets reorganization in the period that is acquired 100 percent shares of Shenzhen
Cereals Group Co. Ltd held by Fude Capital Group in way of shares offering; the subordinate enterprises of Shenzhen Cereals Group
Co. Ltd as Shenzhen Flour Co. Ltd. are included in the scope for consolidate statement.
According to the relevant agreement signed between SZCG and Fude Capital on the transfer of stripped assets for free arising from
material assets reorganization Zhanjiang Haitian Aquatic Feed Co. Ltd does not belong to the scope of material assets
reorganization. The equity of Zhanjiang Haitian Aquatic Feed held SZCG are transfer to Fude Capital for free which is not included
in the consolidate scope.
Enterprise Reasons for changes
Shenzhen Cereals Group Co. Ltd Enterprise combined under the same control
Shenzhen Flour Co. Ltd Enterprise combined under the same control
Shenzhen Hualian Grain & Oil Trade Co. ltd. Enterprise combined under the same control
Hainan Haitian Aquatic Feed Co. Ltd Enterprise combined under the same control
SZCG Quality Inspection Co. Ltd. Enterprise combined under the same control
SZCG Doximi Business Co. Ltd. Enterprise combined under the same control
SZCG Cold-Chain Logistic Co. Ltd. Enterprise combined under the same control
SZCG Big Kitchen Food Supply Chain Co. Ltd. Enterprise combined under the same control
SZCG Real Estate Development Co. Ltd. Enterprise combined under the same control
SZCG Property Management Co. Ltd. Enterprise combined under the same control
SZCG Storage (Yingkou) Co. Ltd. Enterprise combined under the same control
Dongguan SZCG Logistics Co. Ltd. Enterprise combined under the same control
Dongguan International Food Industrial Park Development Co. Ltd. Enterprise combined under the same control
Dongguan SZCG Oil & Food Trade Co. Ltd. Enterprise combined under the same control
Dongguan Golden Biology Tech. Co. Ltd. Enterprise combined under the same control
Shuangyashan SZCG Zhongxin Cereals Base Co. Ltd. Enterprise combined under the same control
Heilongjiang Hongxinglong Nongken Shenxin Cereals Industrial Park Co. ltd. Enterprise combined under the same control
Zhanjiang Haitian Aquatic Feed Co. Ltd Stripped without compensation from state-
owned shares
(7) Material changes or adjustment for products or services of the Company in reporting period
√ Applicable□Not applicable
【参考派出翻译】报告期内，公司完成了重大资产重组，公司主营业务在茶及天然植物精深加工为主的食品原料（配料）生产、研发和销售的基础上增加粮油储备、Grain & oil trading 、粮油加工等粮油流通及Grain and oil reserve service业务。粮食Trading 业务主要为大米、小麦、稻谷、玉米、高粱、食用油等储备粮油品种。粮油加Industry 务主要为加工并销售面粉、大米、食用油等产品，品牌包括“深粮多喜”“向日葵”“红荔”等。【参考派出翻译】
(8) Major sales and main suppliers
Major sales of the Company
Total top five clients in sales (RMB) 3959163581.30
Proportion in total annual sales volume for top five clients 36.79%
Proportion in total annual sales volume for related sales
among top five clients
0.00%
Top five clients
Serial Name Sales (RMB) Proportion in total annual sales
1 Client I 1484981070.58 13.80%
2 Client II 1135231059.13 10.55%
3 Client III 675421881.58 6.28%
4 Client IV 337224099.51 3.13%
5 Client V 326305470.50 3.03%
Total -- 3959163581.30 36.79%
Other explanation on main clients
□ Applicable√Not applicable
Main suppliers of the Company
Total purchase amount from top five suppliers (RMB) 3910469944.38
Proportion in total annual purchase amount for top five
suppliers
40.53%
Proportion in total annual purchase amount from related
purchase among top five suppliers
0.00%
Top five suppliers of the Company
Serial Name Sum of purchase (RMB) Proportion in total annual sum of purchase
1 Supplier I 936211349.86 9.70%
2 Supplier II 911945686.63 9.45%
3 Supplier III 898884092.95 9.32%
4 Supplier IV 621211483.87 6.44%
5 Supplier V 542217331.07 5.62%
Total -- 3910469944.38 40.53%
Other explanation on main suppliers
□ Applicable√Not applicable
3. Expenses
In RMB
2018 2017
Increase/decrease
y-o-y (+-)
Note of major changes
Sales expenses 255021072.54 275025028.88 -7.27%
Warehouse rental fee port terminal fee
and logistic transportation fee declined
Administration expenses 246543836.47 193136022.27 27.65%
Long-term assets depreciation &
amortization fee intermediary fees and
office expenses & salary increased
Financial expenses 10131313.25 -3335527.31 403.74%
More loans for engineering needs from
subsidiary Dongguan Logistic
R&D expenses 10979464.64 9827707.76 11.72%
4. R&D investment
√ Applicable□Not applicable
During the reporting period Shenbao Technology Center adhered to the service concept of "realize the integrating
solutions from concept to products" actively explored new channels and new markets developed new products and
technical support services for beverage customers; developed new series of catering products for catering markets;
provided integrated technical supports for new products production for the company and factory; provided
supports and services for the company to participate in exhibitions customer technical exchanges and after-sales
services. In this year the company developed and implemented a total of 67 customer projects and successfully
developed more than 60 new products and for sales including tea raw materials tea powder tea concentrated juice
plant extracts and food and beverage products. In reporting period three national invention patents were applied
for two papers were published one patent certificate was obtained and two authorized patents were in the process
of certification.
During the reporting period Shenzhen Flour adhered to the philosophy of “Quality First Customer First” and
provided comprehensive technical services for more than 60 customers in 2018 to help customers solve problems
in the process of using powder; united customers to hold exhibitions and promotion conference to improve the
information coverage of enterprise and brand and word-of-mouth successfully helped develop 13 new customers
increased sales of products; carried out a series of monitoring from raw grain to finished products (baking test
quality analysis fine-tuning of recipe etc.) stabilized the company’s product quality guaranteed the balance of the
company’s products and continuously improved and upgraded the products according to market feedback and
quality analysis of similar products. Actively developed new products to meet the needs of customers broadened
the company’s product line and successfully developed 3 new products in 2018 including top low-gluten flour
burger flour and pressed bread flour.
During the reporting period the company developed and implemented a total of 9 information system projects
including: grain SCM system; internal control of the group; Dongguan Intelligent Grain Logistics Park Phase I;
SZCG Storage Branch digital quality inspection system; flour informationization phase II; duoximi ERP and Group
EAS docking; military mobile phone intelligent sales system; cold chain mobile phone reservation system; Big
Kitchen network was developed and upgraded. Among them the grain SCM system is a supply chain management
system tailored by SZCG for the grain industry. In 2018 the grain SCM system was fully launched and applied in
the subordinate Purchase and Sales Branch Storage Branch and Big Kitchen Company and realized the grain source
base selection procurement planning contract approval logistics arrangement grading management storage
location management sales and distribution and other aspects of the entire process control so that information flow
became more intelligent process became clearer and authority management became more detailed.
R&D investment of the Company
2018 2017 Change ratio
Number of R&D (people) 67 47 42.55%
Ratio of number of R&D 6.11% 3.47% 2.64%
R&D investment (Yuan) 10979464.64 9827707.76 11.72%
investment accounted for
operation income
0.10% 0.09% 0.01%
R&D investment capitalization
(Yuan)
0.00 0.00 0.00
Capitalization R&D investment
accounted for R&D investment
0.00% 0.00% 0.00%
The reason of great changes in the proportion of total R&D investment accounted for operation income than last
year
□ Applicable √Not applicable
Reason for the great change in R&D investment capitalization rate and rational description
□ Applicable √Not applicable
5. Cash flow
In RMB
Item 2018 2017 Increase/decrease y-o-y (+-)
Subtotal of cash in-flow from
operation activity
11015888418.12 11471067597.46 -3.97%
Subtotal of cash out-flow from
operation activity
10716784782.54 11454008905.58 -6.44%
Net cash flow arising from
operating activities
299103635.58 17058691.88 1653.38%
Subtotal of cash in-flow from
investment activity
195610693.45 346202583.23 -43.50%
Subtotal of cash out-flow from
investment activity
669839107.07 639452266.94 4.75%
Net cash flow from investment
activity
-474228413.62 -293249683.71 -61.71%
Subtotal of cash in-flow from
financing activity
562240181.56 339096993.25 65.81%
Subtotal of cash out-flow from
financing activity
302433961.14 282762015.63 6.96%
Net cash flow from financing
activity
259806220.42 56334977.62 361.18%
Net increased amount of cash
and cash equivalent
87197600.23 -215136841.07 140.53%
Reasons for y-o-y relevant data with major changes
√ Applicable□Not applicable
Change of cash in-flow from operation activity: sales in the period declined over that of last year.
Change of cash out-flow from operation activity: expenses for purchasing inventory declined over that of last year.
Change of cash flow from investment activity: Investment for construction of progress of joint project engineering from Dongguan
Logistic increased; and land transfer fee and reimbursement of land price for pars of the property.
Change of cash in-flow from financing activity: Investment for construction of progress of joint project engineering from Dongguan
Logistic the bank loans increased;
Change of cash out-flow from financing activity: loans as well as the loans interest paid in the period increased
Reasons of major difference between the cash flow of operation activity in report period and net profit of the Company
□ Applicable√Not applicable
III. Analysis of the non-main business
Amount Ratio in total profit Note Whether be sustainable
Investment income 1724353.15 0.51% Unsustainable
Gains/losses of fair
value variation
-474740.24 -0.14% Unsustainable
Asset impairment 199636023.51 58.83%
Reasons including: inventory
falling price reserves
increased; If the reserve for
depreciation of inventory has
been calculated for the sold
inventory the reserve for
depreciation of inventory has
been carried forward to
reduce the current main
business cost.Unsustainable
Non-operating
income
1390434.84 0.41% Unsustainable
Non-operating
expense
3266448.43 0.96% Unsustainable
IV. Assets and liability
1. Major changes of assets composition
In RMB
End of 2018 End of 2017
Ratio changes Notes of major changes
Amount
Ratio in
total
assets
Amount
Ratio in
total
assets
Monetary fund 631638339.68 9.76% 544440739.45 9.21% 0.55%
Account
receivable
473646886.64 7.32% 193727800.13 3.28% 4.04%
Inventory 2811802600.19 43.47% 2938467812.31 49.71% -6.24%
The Company reduce grain
stocks according to the market
conditions
Investment real
estate
282622184.92 4.37% 319023095.62 5.40% -1.03%
Long-term equity
investment
70999666.81 1.10% 35755171.55 0.60% 0.50%
Fix assets 993136743.51 15.35% 1052866458.21 17.81% -2.46%
Construction in
progress
186586135.06 2.88% 70735978.49 1.20% 1.68%
Short-term loans 91600000.00 1.42% 169800000.00 2.87% -1.45%
Long-term loans 516687791.66 7.99% 195647403.88 3.31% 4.68%
2. Assets and liability measured by fair value
√ Applicable □Not applicable
In RMB
Item
Amount at the
beginning period
Changes of fair
value
gains/losses in
this period
Accumulativ
e changes of
fair value
reckoned
into equity
Devaluatio
n of
withdrawin
g in the
period
Amount of
purchase in
the period
Amount
of sale in
the period
Amount in
the end of
period
Financial assets
1. Financial assets measured
by fair value and whose
change is recorded in current
gains and losses (excluding
derivative financial assets)
1599668.20 -474740.24 43861.87 1124927.96
Aforementioned total 1599668.20 -474740.24 43861.87 1124927.96
Financial liabilities 0.00 0.00 0.00 0.00
Whether there have major changes on measurement attributes for main assets of the Company in report period or not
□ Yes √No
3. The assets rights restricted till end of the period
In RMB
Item
Original book
value
Book value
Reasons for restriction
Intangible
assets
52777696.83
47406749.48 According to the long-term loan mortgage contract signed by Dongguan
Logistics a subsidiary of the Company and Agricultural Development
Bank Dongguan Logistics mortgaged the land (DFGY (2014) DT No. 6)
of No. 32 Jianshe Road Masan Village Machong Town Dongguan City
and the grain storage and terminal facilities to be built and other buildings
and structures on the ground to Agricultural Development Bank as
collateral for the loan.
Fixed assets 400834811.27 377777105.09
Construction in
progress
39276418.03
39276418.03
Intangible
assets
45580368.97
36339192.71 According to the loan contract of “Guangdong DG 2017 NGDZ No. 006”
signed by Dongguan Food Industry Park a subsidiary of the Company
and Bank of Communications Guangdong Branch Dongguan Food
Industry Park mortgaged its two pieces of lands (DFGY (2009) DT No.
190) and (DFGY (2012) DT No. 152) to Bank of Communications
Guangdong Branch as collateral for the borrowing.Total 538469295.10 500799465.31
Item
Original book
value
Book value
Reasons for restriction
Item Original book value Reasons for restriction
Intangible assets 52777696.83 According to the long-term loan mortgage contract signed by Dongguan
Logistics a subsidiary of the Company and Agricultural Development Bank
Dongguan Logistics mortgaged the land (DFGY (2014) DT No. 6) of No. 32
Jianshe Road Masan Village Machong Town Dongguan City and the grain
storage and terminal facilities to be built and other buildings and structures on the
ground to Agricultural Development Bank as collateral for the loan.
Fixed assets 400834811.27
Construction
in progress
39276418.03
Intangible assets 45580368.97
According to the loan contract of “Guangdong DG 2017 NGDZ No. 006” signed
by Dongguan Food Industry Park a subsidiary of the Company and Bank of
Communications Guangdong Branch Dongguan Food Industry Park mortgaged
its two pieces of lands (DFGY (2009) DT No. 190) and (DFGY (2012) DT No.
152) to Bank of Communications Guangdong Branch as collateral for the
borrowing.Total 538469295.10
V. Investment analysis
1. Overall situation
√ Applicable□Not applicable
Investment in reporting period (Yuan)
Investment in the same period of last year
(Yuan)
Range
294171532.43 6400000 4496%
2. The major equity investment obtained in the reporting period
√ Applicable□Not applicable
In RMB
Inves
ted
enter
prise
Main
busin
ess
Inves
tment
ways
In
ve
st
m
en
t
a
m
ou
nt
Sha
reh
oldi
ng
rati
o
Capi
tal
reso
urce
s
Partners
Te
rm
of
inv
est
me
nt
Pr
od
uc
t
ty
pe
Progre
ss as at
balanc
e sheet
date
Est
ima
ted
rev
enu
e
Inve
stme
nt
loss
in
the
perio
d
Whet
her
has
litiga
tion
invol
ved
(Y/N
)
Disclos
ure date
(if
applica
ble)
Disclosure
index (if
applicable)
Shen
zhen
Cere
als
Grou
Grain
and
oil
tradi
ng
Acqu
isitio
n
--
100
%
Issu
ed
shar
es
Fude
Capital
No
t
ap
pli
ca
N
ot
ap
pli
ca
Compl
eted
390
00
00
00.
00
401
987
820.
86
N
2018-6-
11
Found more
in Notice of
the Company
released on
Juchao
p
Co.
Ltd
proc
essi
ng
War
eho
usin
g
logi
stics
serv
ice
ble bl
e
website
(www.cninfo.com.cn)
Total -- -- -- -- -- -- -- -- --
390
00
00
00.
00
401
987
820.
86
-- -- --
3. The major non-equity investment doing in the reporting period
√ Applicable□Not applicable
In RMB
Item
Invest
ment
ways
Whet
her it
is the
inves
tment
for
fixed
asset
s
(Y/N
)
Industry
with the
investme
nt
involved
Amount
input in
the
period
Accumul
ated
actual
input as
of the
end of
reporting
period
Capital
resources
Progress
Estimate
d
revenue
Income
accumula
ted at
end of
the
reporting
period
Reasons
for
failure to
achieve
planned
progress
and
expected
benefits
Disclosur
e date (if
applicabl
e)
Disclosur
e index
(if
applicabl
e)
Grain storage
and wharf
complementary
engineering of
Dongguan
SZCG Logistics
Co. Ltd.
Self-
build
Y
Storage
and
wharf
551594
18.07
301605
773.69
Owned
funds
and bank
loans
75.40%
384834
00.00
411994
04.09
Start-up
of the
wharf
project
later than
expected
Grain storage
and wharf
complementary
engineering
Self-
build
Y
Storage
and
wharf
557385
11.77
179679
302.57
Owned
funds
and bank
loans
100.00%
170684
00.00
-
(Phase II) of
Dongguan
SZCG Logistics
Co. Ltd.
Food logistics
and wharf
matching
project of
Dongguan
SZCG Logistics
Co. Ltd.
Self-
build
Y
Warehou
se
logistic
593873
8.07
110712
22.92
Owned
funds
2.25% -
Warehouse
logistic
distribution
center of
Dongguan
International
Food Industrial
Park
Development
Co. Ltd.
Self-
build
Y
Warehou
se
logistic
418344
40.79
271437
590.22
Owned
funds
and bank
loans
30.55%
371089
00.00
Adjustm
ent of
construct
ion
scheme
Food processing
project of
Dongguan
SZCG Oil &
Food Trade Co.
Ltd.Self-
build
Y
Flour
processin
g
331095
58.34
392764
18.03
Owned
funds
13.45% -
Land use right
Self-
build
N
Construc
tion
398908
65.39
203743
457.22
Owned
funds
-
Total -- -- --
231671
532.43
100681
3764.65
-- --
926607
00.00
411994
04.09
-- -- --
4. Financial assets investment
(1) Securities investment
√ Applicable□Not applicable
In RMB
Variety
of
securitie
s
Code of
securitie
s
Short
form of
securitie
s
Initial
investm
ent cost
Account
ing
measure
ment
model
Book
value at
the
beginni
ng of
the
period
Changes
in fair
value of
the
current
Cumulat
ive fair
value
changes
in
Current
purchas
e
amount
Current
sales
amount
Profit
and loss
in the
Reporti
ng
Book
value at
the end
of the
period
Account
ing
subject
Capital
Source
profit
and loss
equity Period
Domesti
c and
overseas
stock
000017 CBC-A --
Fair
value
measure
ments
15996
68.20
-
474740
.24
43861.
87
0.00 0.00
-
474740
.24
11249
27.96
Financia
l assets
availabl
e for
sale
Paid
shares
from
debt
reorgani
zation
Total -- --
15996
68.20
-
474740
.24
43861.
87
0.00 0.00
-
474740
.24
11249
27.96
-- --
Disclosure date of
securities investment
approval of the Board
Not applicable
Disclosure date of
securities investment
approval of the Shareholder
Meeting (if applicable)
Not applicable
(2) Derivative investment
□ Applicable√Not applicable
The Company has no derivatives investment in the Period
5. Application of raised proceeds
□ Applicable√Not applicable
The Company has no application of raised proceeds in the Period
VI. Sales of major assets and equity
1. Sales of major assets
□ Applicable√Not applicable
The Company had no sales of major assets in the reporting period.
2. Sales of major equity
□ Applicable√Not applicable
VII. Analysis of main holding Company and stock-jointly companies
√ Applicable□Not applicable
Particular about main subsidiaries and stock-jointly companies net profit over 10%
In RMB
Company
name
Typ
e
Main
business
Register capital Total assets Net Assets Operating income
Operating
profit
Net profit
Shenzhen
Cereals
Group
Co. Ltd
Sub
sidi
ary
Grain &
oil
trading
processin
g、Grainand oil
reserve
service
1530000000.00
5530296554.50
3481379571.43
10468857056.92
449696262.10
427835409.08
Shenzhen
Hualian
Grain &
Oil Trade
Co. ltd.
Sub
sidi
ary
Grain &
oil
trading
31180000.00 1076989175.15 194154007.83 4153366944.73 75706224.41 73910678.33
Shenzhen
Flour Co.
Ltd
Sub
sidi
ary
Grain &
oil
trading
processin
g
30000000.00 945013952.04 236010016.38 2847662565.99 67899300.91 68055926.98
Hangzhou
Ju Fang
Yong
Holding
Co. Ltd.
Sub
sidi
ary
Productio
n & sales
of tea
product
175000000.00 182616725.75 123286165.59 27181171.90 -39757437.82 -38641080.66
Particular about subsidiaries obtained or disposed in report period
√ Applicable□Not applicable
Company name
The way of getting and treating
subsidiary in the reporting
Influence on overall product and
performance
Shenzhen Cereals Group Co. Ltd Acquisition of assets reorganization
Impact on net profit of the Company:
427.84 million yuan
Shenzhen Flour Co. Ltd Acquisition of assets reorganization
Impact on net profit of the Company:
68.06 million yuan
Shenzhen Hualian Grain & Oil Trade Co. ltd. Acquisition of assets reorganization
Impact on net profit of the Company:
73.91 million yuan
Hainan Haitian Aquatic Feed Co. Ltd Acquisition of assets reorganization
Impact on net profit of the Company: 1.21
million yuan
SZCG Quality Inspection Co. Ltd. Acquisition of assets reorganization
Impact on net profit of the Company:
480000 yuan
SZCG Doximi Business Co. Ltd. Acquisition of assets reorganization
Impact on net profit of the Company: 2.31
million yuan
SZCG Cold-Chain Logistic Co. Ltd. Acquisition of assets reorganization
Impact on net profit of the Company: 6.11
million yuan
SZCG Big Kitchen Food Supply Chain Co.
Ltd.
Acquisition of assets reorganization
Impact on net profit of the Company: 1.87
million yuan
SZCG Real Estate Development Co. Ltd. Acquisition of assets reorganization
Impact on net profit of the Company: 8.58
million yuan
SZCG Property Management Co. Ltd. Acquisition of assets reorganization
Impact on net profit of the Company:
780000 yuan
SZCG Storage (Yingkou) Co. Ltd. Acquisition of assets reorganization
Impact on net profit of the Company: 5.63
million yuan
Dongguan SZCG Logistics Co. Ltd. Acquisition of assets reorganization
Impact on net profit of the Company:
29.97 million yuan
Dongguan International Food Industrial Park
Development Co. Ltd.
Acquisition of assets reorganization
Impact on net profit of the Company:
330000 yuan
Dongguan SZCG Oil & Food Trade Co. Ltd. Acquisition of assets reorganization
Impact on net profit of the Company: -
940000 yuan
Dongguan Golden Biology Tech. Co. Ltd. Acquisition of assets reorganization
Not yet open and has no impact on the
Company’s production and operation
Shuangyashan SZCG Zhongxin Cereals Base
Co. Ltd.
Acquisition of assets reorganization
Impact on net profit of the Company: -
800000 yuan
Heilongjiang Hongxinglong Nongken Shenxin
Cereals Industrial Park Co. ltd.
Acquisition of assets reorganization
Impact on net profit of the Company: -
640000 yuan
Zhanjiang Haitian Feed Industrial Co. Ltd. Peeling from assets reorganization
Impact on net profit of the Company:
350000 yuan
Explanation on main holding/stock-jointly enterprise:
Shenzhen Cereals Group Co. Ltd. is a wholly-owned subsidiary of the company its business scope includes grain
and oil purchase and sales grain and oil storage and supply of military grain; grain and oil and products management
and processing (operated by branches); operation and processing of feed (operated by outsourcing); investment in
grain and oil feed logistics projects; establishing grain and oil and feed trading market (including e-commerce
market) (market license is also available); information service business (internet information service business only)
(operating with value-added telecommunications service business license Guangdong B2-20100081 with a limited
period to February 11 2015); storage (operated by branches); ordinary freight professional transportation
(refrigerated fresh storage) (operated by road transport license No. 440300155916 valid until June 30 2014);
development operation and management of free property; providing management services for hotels; investing and
setting up industries (specific projects are separately declared); domestic trade (excluding franchise exclusive
control and monopoly commodities); engaging in import and export business (except for projects prohibited by
laws administrative regulations and decision of the State Council restricted projects can be operated only after
obtaining permission). Register capital was 1530000000 Yuan. Ended as this period total assets amounted as
5.530.296.554.50Yuan and net assets amounting to 3481379571.43Yuan shareholders’ equity attributable to
parent Company is 3330154413.59 Yuan; in the reporting period achieved operation income net profit and net
profit attributable to shareholder of parent Company as 10468857056.92 Yuan 427835409.08Yuan
and412949102.83Yuan respectively.
Shenzhen Hualian Grain and Oil Trade Co. Ltd. business scope: general operational projects include domestic
trade (except for projects that laws administrative regulations and decisions of the State Council require approval
before registration); engaging in import and export business (except for projects prohibited by laws administrative
regulations and decision of the State Council restricted projects can be operated only after obtaining permission);
online feed sales; information consultation self-owned housing leasing (excluding talent agency services and other
restricted items); international freight forwarding domestic freight forwarding (can only be operated after being
approved by the transport department if laws administrative regulations State Council decision require the approval
of transport department); license business projects include purchase and sale of grain and oil online sales of grain
and oil; information service business (internet information service business only). Register capital was 31180000
Yuan. Ended as this period total assets amounted as 1076989175.15 Yuan and net assets amounting to
194154007.83 Yuan shareholders’ equity attributable to parent Company is 194154007.83 Yuan;in the reporting
period achieved operation income net profit and net profit attributable to parent Company as 4153366944.73
Yuan 73910678.33 Yuan and 73910678.33 Yuan respectively.Shenzhen Flour Co. Ltd. business scope: hardware and electrical equipment chemical products (excluding
hazardous chemicals and restricted items) auto parts purchase and sales of construction materials; self-operated
import and export business (carry out according to the provisions of the registration certificate SMGDZZ No. 76);
domestic trade (excluding franchise exclusive control monopoly commodities); wheat wholesale and retail; flour
processing and production. Register capital was 30000000 Yuan. Ended as this period total assets amounted as
945013952.04 Yuan and net assets amounting to 236010016.38 Yuan shareholders’ equity attributable to parent
Company is 236010016.38 Yuan;in the reporting period achieved operation income net profit and net profit
attributable to parent Company as 2847662565.99 Yuan 68055926.98 Yuan and 68055926.98 Yuan respectively.Hangzhou Ju Fang Yong Holding Co. Ltd. a wholly owned subsidiary. Business scope: sell both retail and
wholesale: wholesale retail of the prepackaged food and bulk food (pre-approval items should be operated within
validity period ): tea set; acquisitions: tea business sales required (limited to the acquisition of the original producer
of primary industry directly); Services: Tea business investment and asset management technology development
cultivation breeding technical consulting technical services transfer of results the other all legitimate projects
without approval subsidiaries’ business scope included. Register capital was 175000000 Yuan. Ended as this
period total assets amounted as 182616725.75 Yuan and net assets amounting to 123286165.59 Yuan
shareholders’ equity attributable to parent Company is 124023180.99 Yuan;in the reporting period achieved
operation income net profit and net profit attributable to parent Company as 27181171.90 Yuan -38641080.66
Yuan and -38210926.83 Yuan respectively.VIII. Structured vehicle controlled by the Company
□ Applicable√Not applicable
IX. Prospects on future development
(I) Development trend and competition layout of the industry
1. The development trend of industry
In 2018 the overall trend of the grain and oil market was weak and the market prices of specific varieties were
quite different. Wheat and rice in the husk were strongly influenced by policy orientation and prices went down
throughout the year with the lowering of minimum purchase price; the marketization of corn was high and the
overall price throughout the year was fluctuating increasingly due to the imbalance of supply and demand; the
soybean market was affected by the Sino-US trade war and the annual price trend was in a downturn; the cooking
oil market was affected by the excess supply and high inventory and the overall price declined sharply.
At present China has 22000 enterprises included in the economic statistics of the grain industry with an annual
sales income of 2.9 trillion yuan which has formed a certain scale. However due to the lack of innovation capability
the problems of unreasonable industrial structure short chain and low-end overcapacity are still outstanding which
is difficult to adapt to the needs of upgrading consumer demand. With the continuous development of the grain
industry economy the grain industry now has strong demand for engineering personnel in grain storage processing
logistics etc. while there is a great shortage of high-grade talents in technology warehousing logistics
management international trade and futures etc. which cannot meet the needs of high quality development in the
grain industry. The grain industry is in a critical period of deepening reform transformation and development and
is more eager for high-quality and professional talents than ever before. It is necessary to vigorously create a group
of management talents science and technology innovation talents high-skilled talents and storage talents for grain
industry so as to provide talent supports for the development of grain industry economy and the protection of
national food security.
According to the statistic data released by China Tea Marketing Association and other institutions the production
and consumption of the tea industry in the country continued to maintain an overall growth trend. In 2018 the area
of tea gardens in 18 major tea-producing provinces (autonomous regions and municipalities) throughout the country
was 43956000 mu with a year-on-year increase of 1.23 million mu the growth rate was 2.9%. The national dry
raw tea output was 2.616 million tons an increase of 120000 tons over the previous year the growth rate was 4.8%.The total output value of dry raw tea in China exceeded 200 billion yuan for the first time reaching 215.73 billion
yuan with a year-on-year increase of 20.77 billion yuan the growth rate was 10.65%. In 2018 the domestic sales
volume of Chinese tea was 1.91 million tons an increase of 93000 tons compared with the previous year the
growth rate was 5.1%; domestic sales reached 266.1 billion yuan; the average selling price was 139.3 yuan / kg an
increase of 5.2% on a year-on-year basis. However due to the impact of the macroeconomic environment and weak
consumption the problem of overproduction of tea in the country has become increasingly prominent. Safe
reasonably priced diversified younger products and diversified marketing are still the development trend of the tea
industry.The rapid development of the new tea industry promotes the transformation of the food and beverage consumer
market and accelerates the transformation and upgrading of beverage products. Social media has changed the dietary
mode in society consumers expect every dish or drink to be shared and social sharing becomes one of the core
innovations in food beverage and catering service. While the new tea industry maintains rapid development the
traditional beverage industry is also constantly innovating business models and expanding sales channels; product
category structure will be further optimized and water drinks tea drinks and plant-based milk drinks have good
development prospects the functional beverages low-calorie beverages and healthy nutritious beverages will
develop rapidly. As a food and beverage ingredient tea and natural plant deep processing products have natural and
healthy essential characteristics of which the application in the food and beverage field continues to innovate and
develop and the huge development space of tea drinks and plant beverages lays a good foundation for the
development of tea and natural plant deep processing products.
2. The competitive landscape of the industry
China is not only a big agricultural producer but also a major grain consumer. China’s grain output has achieved
bumper harvests in successive years but it also faces many challenges. Problems such as the transformation of grain
production methods the adjustment of crop planting structure the import volume of grain remaining high the
increase in marginal cost of production the intensification of environmental factors and the contradiction between
supply and demand have become increasingly prominent. At the same time China’s grain storage still has
weaknesses such as large stocks of grain low level of inventory facilities and incomplete storage methods.The company’s tea and natural plant deep processing products are a segment of the tea industry and have evolved
into a market with a relatively concentrated market share. The company’s main competitors are the certified
suppliers for large-scale food and beverage customers at home and abroad the price competition in the industry is
fierce. At the same time the increase in raw material prices and labor costs has also led to a significant increase in
the production cost of tea deep processing. However the company has comparative advantages in technological
innovation and product innovation as well as many patented technologies with independent research and
development. Moreover the company is one of the few tea industry chain conglomerates in the industry that have
obtained the qualifications of global suppliers.The competition in various brands and categories of the domestic tea consumption market is becoming increasingly
fierce the marketing promotion methods are constantly innovating and cross-border cooperation is deepening. With
the upgrade of consumption consumers pay more attention to quality and brand in addition to price issues. Some
well-known and brand-name tea companies have gradually expanded their market share and achieved greater
development. The safety of tea products still challenges the healthy development of tea industry.
China’s economic development has been generally stable with good momentum the structural reforms of supply
side have been continuously deepened a series of policies and measures to stabilize consumption and adjust
structure have continued to play a role and people’s living standards have continued to improve. The expansion of
consumer demand and the upgrading of level of the whole society have created a good external environment for the
sustainable and healthy development of the tea industry.(II) The company’s development strategy
Shenzhen Cereals Holdings will focus on the grain and tea business keep a foothold in Guangdong-Hong Kong-
Macao Greater Bay Area face domestic and international important supply and marketing channels drive by
technology innovation and model innovation make full use of the capital market and utilize market-based means
to strengthen external mergers and acquisitions and internal reorganization and integration accelerate the replication
and expansion of “SZCG model” such as intelligent grain logistics park and grain informationization continuously
expand the development strength and scale of enterprises further enhance the market’s comprehensive
competitiveness sustained profitability and anti-risk ability assume the social responsibility of state-owned
enterprises and commit to building a first-class “grain supply chain high quality service provider” and “safe andhigh quality food supplier”.(III) The company’s 2019 business plan
In 2019 the company will further leverage the capital and brand advantages of listed companies to complete the
annual business management objectives. The main work plans are as follows:
First steadily take the first step after the reorganization accelerate the reorganization integration work strengthen
the development of the grain and oil industry on the basis of the tea industry two main businesses develop in parallel
and strengthen the core competitiveness of the enterprise;
Second accomplish the people’s livelihood security services ensure to complete the municipal government’s
storage tasks truly achieve “sufficient quantity and good quality” and play an emergency role when needed;
Third according to the company’s “13th Five-Year Strategic Planning Objectives” focus on promoting the
construction of Dongguan logistics nodes project strive for the completion of the foundation project of the 510000
tons silo project and the completion of the construction of two 10000-ton berths in the terminal phase I and put
them into trial operation and the flour processing plant project goes into operation;
Fourth adhere to the two-wheel drive of technological innovation and model innovation strengthen the combination
of grain and oil business and informationization and accelerate the pace of the company’s external export
technology and services;
Fifth improve the assessment and incentive mechanism establish and improve the total compensation and flexible
adjustment mechanism of the economic benefits and labor productivity of connected enterprises and strengthen the
endogenous development momentum of enterprises;
Sixth improve internal management improve work efficiency prevent internal risks and ensure safety production
and no liability accidents.X. Research reception communication and interview activities
1. Registration form of research reception communication and interview in the Period
□ Applicable √Not applicable
There were no research reception communication and interview activities occurred in the period
Section V. Important Events
I. Profit distribution plan of common stock and capitalizing of common reserves plan
Formulation Implementation and Adjustment of common stock Profit Distribution Policy Especially Cash Dividend
policy during the Reporting Period
√ Applicable □Not applicable
In reporting period no adjustment and change happened to profit distribution rule.Special explanation on cash dividend policy
Satisfy regulations of General Meeting or requirement of Article
of Association (Y/N):
Y
Well-defined and clearly dividend standards and proportion
(Y/N):
Y
Completed relevant decision-making process and mechanism
(Y/N):
Y
Independent directors perform duties completely and play a proper
role (Y/N):
Y
Minority shareholders have opportunity to express opinions and
demands totally and their legal rights are fully protected (Y/N):
Y
Condition and procedures are compliance and transparent while
the cash bonus policy adjusted or changed (Y/N):
Y
Profit distribution plan (pre-plan) of common stock and capitalizing of common reserves plan (pre-plan) in latest
three years (including the reporting period)
The equity distribution plan for 2016: Based on share capital of 451620276 on 31 Dec 2016 distributed 0.5 Yuan
(tax included) for every 10-share to all shareholders with one share bonus (tax included) and no share converted
from capital reserve
The equity distribution plan for 2017: No cash dividend no bonus shares as well as no share converted from capital
reserve
The equity distribution plan for 2018: Based on share capital of 1152535254 on 31 Dec 2018 distributed 1 Yuan
(tax included) for every 10-share to all shareholders with zero share bonus (tax included) and no share converted
from capital reserve
Particulars for cash dividend of common share for 3 years (current period included)
In RMB
Year for bonus
shares
Amount for
cash bonus (tax
included)
Net profit
attributable to
common stock
shareholders of
listed company
Ratio of the
cash bonus in
net profit
attributable to
common stock
Proportion for
cash bonus by
other ways(i.e.share buy-
backs)
Ratio of the
cash bonus by
other ways in
net profit
attributable to
Total cash
bonus
(including
other ways)
Ratio of the
total cash
bonus (other
ways included)
in net profit
in
consolidation
statement for
bonus year
shareholders of
listed company
contained in
consolidation
statement
common stock
shareholders of
listed company
contained in
consolidation
statement
attributable to
common stock
shareholders of
listed company
contained in
consolidation
statement
2018 115253525.40
308331 032.4
4
37.38% 0.00 0.00% 115253525.40 37.38%
2017 0.00 359174263.44 0.00% 0.00 0.00% 0.00 0.00%
2016 22581013.80 364384734.36 6.20% 0.00 0.00% 22581013.80 6.20%
The Company gains profits in reporting period and the retained profit of common stock shareholders provided by
parent Company is positive but no plan of cash dividend proposed of common stock
□ Applicable√Not applicable
II. Profit distribution plan and capitalizing of common reserves plan for the Period
√ Applicable□Not applicable
Bonus shares for every 10-share (Share) 0
Dividends for every 10-share (RMB) (Tax included) 1.00
Shares transferred from every 10 shares (Share) 0
Equity base of distribution plan (Share) 1152535254
Cash bonus distribution (RMB) (Tax included) 115253525.40
Cash bonus distribution in other ways (i.e. share buy-backs)
(RMB)
0.00
Total cash bonus (including other ways) (RMB) 115253525.40
Distributable profits (RMB) 165505986.31
Ratio of total cash dividend (other ways included) in total profit
distribution
100%
Cash dividend
The Company is in a development stage and has the arrangement of major capital expenses ratio of cash dividend in profit
distribution should reach a minimum of 20% while the profit distributed.
Detailed explanation on profit distribution or capital accumulation fund conversion plan
After audited by Dahua CPA in consolidate statement the net profit attributable to shareholders of parent company amounted as
308331032.44 yuan in 2018 net profit of parent company was -34283664.43 yuan; ended as 31st December 2018 the profit of
parent company that can be distributed for shareholders was 165505986.31 yuan balance of consolidate capital public reserves was
1422892729.36 yuan. In line with relevant regulations and Article of Association and consider the interest of shareholders BOD
plans to submit the equity distribution plan for year of 2018 to shareholders general meeting: based on total share capital
1152535254 shares of the Company on 31st December 2018 distributed 1 Yuan (tax included) for every 10-share to all shareholders
with zero share bonus (tax included) and no share converted from capital reserve
III. Implementation of commitment
1. Commitments that the actual controller shareholders related party buyer and the Company have fulfilled during the reporting period and have not yet
fulfilled by the end of reporting period
√ Applicable□Not applicable
Commitments Commitment party
Type of
commitme
nts
Content of commitments
Commitme
nt date
Commit
ment
term
Impleme
ntation
Commitments for share
merger reform
Commitments in report of
acquisition or equity
change
Commitments in assets
reorganization
Shenzhen Fude State-
owned Capital
Operation Co. Ltd.Other
commitme
nts
Commitment to non-normal business enterprises: For non-normal business
enterprises under Shenzhen Cereals Group (including but not limited to enterprises
that have been revoked business licenses discontinued operation etc.) the
committed person will fully assist urge and promote Shenzhen Cereals Group to
implement the corresponding write-off procedures. After the completion of this
reorganization if Shenzhen Cereals Group or the listed company is called to account
receives administrative punishment or suffers any losses due to the abnormal
operation of the non-normal business enterprises or the failure to handle write-off
procedures in time the committed person will bear the relevant legal liability and
fully compensate the listed company and the target company within 30 working days
after the actual loss occurs.
2018-03-23 Impleme
nt as
promised
Normal
performa
nce
Shenzhen Fude State-
owned Capital
Operation Co. Ltd.Other
commitme
nts
Relevant Commitments Regarding the Existence of Flaws in Leased Property: The
leased house property of Shenzhen Cereals Group and its holding subsidiaries has
the following conditions: (1) The lessor has not provided the ownership documentary
evidence of the property and/or the documentary evidence proving the lessor has the
right to rent out the house property. (2) The lease term of part of the leased house
2018-03-23 Impleme
nt as
promised
Normal
performa
nce
property is more than 20 years; (3) Shenzhen Cereals Group and its subsidiaries
sublet part of the leased house property to a third party without the consent of the
lessor; (4) The leased house property of Shenzhen Cereals Group and its holding
subsidiary has not been registered for the housing lease. If Shenzhen Cereals Group
and its holding subsidiaries are imposed any form of punishment by the relevant
government departments or assume any form of legal responsibility or occur any
losses or expenses because their leased place and / or house property do not comply
with relevant laws and regulations the committed person will be willing to bear any
losses damages claims costs and expenses incurred suffered and assumed by
Shenzhen Cereals Group and its holding subsidiaries and protect Shenzhen Cereals
Group and its holding subsidiaries from damages. In addition the committed person
will support Shenzhen Cereals Group and its holding subsidiaries to actively
advocate their rights to the corresponding parties to maximumly maintain and
guarantee the interests of Shenzhen Cereals Group and the listed companies.Shenzhen Fude State-
owned Capital
Operation Co. Ltd.Other
commitme
nts
Commitment Letter on Flaws in House Property and Land: In the case that some of
the house properties held by Shenzhen Cereals Group fail to rename the obligee of
the property ownership certificate the committed person will fully assist urge and
promote Shenzhen Cereals Group or its subsidiaries to go through the formalities.
After the completion of this reorganization if Shenzhen Cereals Group or the listed
company is called to account receives administrative punishment or suffers any
losses due to the failure to rename the obligee of the property ownership certificate
the committed person will bear the relevant legal liability and fully compensate the
listed company and Shenzhen Cereals Group within 30 working days after the actual
loss occurs. In view of the fact that some house properties held by Shenzhen Cereals
Group fail to complete the registration procedures for ownership transfer the
committed person will fully assist urge and promote Shenzhen Cereals Group to
complete the relevant transfer procedures. After the completion of this
reorganization if Shenzhen Cereals Group or the listed company is called to account
receives administrative punishment or suffers any losses due to the failure to rename
the obligee of above-mentioned property the committed person will bear the
2018-03-23 Impleme
nt as
promised
Normal
performa
nce
relevant legal liability and fully compensate the listed company and Shenzhen
Cereals Group within 30 working days after the actual loss occurs. In response to
the conversion of non-market commercial housing held by Shenzhen Cereals Group
into market commercial housing the committed person will fully assist urge and
promote Shenzhen Cereals Group to go through the formalities. After the completion
of this reorganization if Shenzhen Cereals Group or the listed company is called to
account receives administrative punishment or suffers any losses due to the failure
to complete the conversion of non-market commercial housing into market
commercial housing the committed person will bear the relevant legal liability and
fully compensate the listed company and Shenzhen Cereals Group within 30
working days after the actual loss occurs. In view of the fact that some house
properties of Shenzhen Cereals Group have not been renewed for the land use period
the committed person will fully assist urge and promote Shenzhen Cereals Group to
renew the corresponding land use right period. After the completion of this
reorganization if Shenzhen Cereals Group or the listed company is called to account
receives administrative punishment or suffers any losses due to the failure to renew
the land use right period the committed person will bear the relevant legal liability
and fully compensate the listed company and Shenzhen Cereals Group within 30
working days after the actual loss occurs. In view of the fact that some house
properties of Shenzhen Cereals Group have not been registered for ownership
transfer or renewed the land use period the committed person will fully assist urge
and promote Shenzhen Cereals Group to handle the corresponding land use rights
renewal and ownership transfer registration procedures. After the completion of the
reorganization if Shenzhen Cereals Group or the listed company is called to account
receives administrative punishment or suffers any losses due to the failure to
complete the above-mentioned land use right renewal and ownership transfer
registration procedures the committed person will bear the relevant legal liability
and fully compensate the listed company and Shenzhen Cereals Group within 30
working days after the actual loss occurs. In view of the fact that the property of
SZCG Sungang Warehouse has not completed the registration for converting non
commercial housing into commercial housing after the completion of the
reorganization if Shenzhen Cereals Group or the listed company is called to account
receives administrative punishment or suffers any losses as the property of Sungang
Warehouse is not registered for converting non commercial housing into commercial
housing in time the committed person will bear the relevant legal liability and fully
compensate the listed company and Shenzhen Cereals Group within 30 working days
after the actual loss occurs. In view of the fact that the land and property of SZCG
Shuguang Grain Depot have not passed the completion acceptance nor completed
the registration of commercial housing after the completion of the reorganization if
Shenzhen Cereals Group or the listed company is called to account receives
administrative punishment or suffers any losses as the land and property of
Shuguang Grain Depot have not timely passed the completion in time nor completed
the registration of commercial housing the committed person will bear the relevant
legal liability and fully compensate the listed company and Shenzhen Cereals Group
within 30 working days after the actual loss occurs. In view of the fact that the
property of SZCG Flour Factory has not completed the conversion of non-
commercial housing into commercial housing and the relocation after the
completion of the reorganization if Shenzhen Cereals Group or the listed company
is called to account receives administrative punishment or suffers any losses as
Flour Factory doesn’t complete the conversion of non-commercial housing into
commercial housing and the relocation the committed person will bear the relevant
legal liability and fully compensate the listed company and Shenzhen Cereals Group
within 30 working days after the actual loss occurs. In view of the fact that the land
of Heilongjiang Hongxinglong Nongken Shenxin Grain Industry Park Co. Ltd. a
subsidiary of Shenzhen Cereals Group has not applied for land use right certificates
the committed person will fully assist urge and promote the subsidiary of Shenzhen
Cereals Group to manage the application procedures of the corresponding land use
right certificates. After the completion of the reorganization if Shenzhen Cereals
Group or the listed company is called to account receives administrative punishment
or suffers any losses because the land use right certificate cannot be issued due to
any ownership disputes in the above-mentioned land use right the committed person
will bear the relevant legal liability and fully compensate the listed company and
Shenzhen Cereals Group within 30 working days after the actual loss occurs. If
Shenzhen Cereals Group and its holding subsidiaries are required to take back the
sites and/or properties or imposed any form of punishment by the relevant
government departments or assume any legal liability or suffer any losses or
expenses arising from the modification for flaws in sites and/or properties as the
above-mentioned and other self-owned or leased sites and/or properties fail to
comply with the relevant laws and regulations the committed person will assume
any losses damages claims costs and expenses incurred suffered and assumed by
Shenzhen Cereals Group and its holding subsidiaries and protect the list companies
and Shenzhen Cereals Group from damages. In addition the committed person will
support the company and its holding subsidiaries to actively advocate rights to the
corresponding parties to maximumly maintain and guarantee the interests of the
company and its holding subsidiaries.Shenzhen Fude State-
owned Capital
Operation Co. Ltd.Other
commitme
nts
Commitment Letter on the Company’s System Reform and System Evaluation of
Shenzhen Cereals Group in 1998: After the completion of this restructuring if
Shenzhen Cereals Group or the listed company is called to account receives
administrative punishment or suffers any losses as the system reform is not evaluated
or other reasons related to this reform the committed person will bear the relevant
legal liability and fully compensate the listed company and Shenzhen Cereals Group
within 30 working days after the actual loss occurs.
2018-03-23 Impleme
nt as
promised
Normal
performa
nce
Shenzhen Fude State-
owned Capital
Operation Co. Ltd.Other
commitme
nts
Commitment on the Adjustment of the Main Business: Within 24 months after the
completion of the transaction the Company has no plan intention or arrangement
to divest the main assets related to the existing business of the listed company
through the shareholders’ meeting and the board of directors of the listed company.The listed company will strive to improve the management level based on the asset
structure and business development after the completion of the transaction and do
its best to complete the business integration and coordination after the completion
2018-03-23 Impleme
nt as
promised
Normal
performa
nce
of the reorganization and create greater value for shareholders.Shenzhen Fude State-
owned Capital
Operation Co. Ltd.Other
commitme
nts
Commitment to Maintain the Position of Controlling Shareholders of Listed
Companies: Within 60 months from the date of completion of this transaction the
Company promises not to voluntarily give up the controlling shareholder status in
the listed company and guarantees that the controlling shareholder status of the
listed company will not be changed due to reasons of the Company during this
period nor assists any other party to seek the controlling shareholder status of the
listed company. Within 60 months from the date of completion of this transaction
the Company will not take the initiative to change the status of the controlling
shareholder of the listed company through any actions including reducing the share
holding in the listed company.
2018-03-23 Impleme
nt as
promised
Normal
performa
nce
Shenzhen Fude State-
owned Capital
Operation Co. Ltd.Other
commitme
nts
Commitment on the public shares: After the completion of the transaction the
committed person will cautiously nominate directors and supervisors and will not
nominate candidates for directors supervisors and senior management to the listed
company that will cause the proportion of public shares of the listed company not
meet the requirements of the Listing Rules of Shenzhen Stock Exchange.; nor will
vote for the relevant shareholders’ meeting and/or board resolutions for selecting
directors supervisors and senior executives of listed companies that will make the
proportion of public shares of listed companies not meet the requirements of the
Listing Rules of Shenzhen Stock Exchange .
2018-03-23 Impleme
nt as
promised
Normal
performa
nce
Shenzhen Fude State-
owned Capital
Operation Co. Ltd.Performan
ce
commitme
nts and
compensat
ion
arrangeme
nts
Commitment on performance compensation: Fude Capital promises that after the
completion of the audit and evaluation of Shenzhen Cereals Group the Company
will make a commitment to the performance of Shenzhen Cereals Group within three
years after the completion of the restructuring and sign a clear and feasible
compensation agreement on the achievement of performance promised by the target
company with the listed company so as to protect the interests of small and mediuminvestors. On June 8 2018 Fude Capital and Shenshenbao signed the “Performance
Compensation Agreement” and agreed to make a commitment to the net profit of
2018-03-23 Impleme
nt as
promised
Normal
performa
nce
Shenzhen Cereals Group from 2018 to 2020 (hereinafter referred to as the
“commitment period” if it is not completed before December 31 2018 the
commitment period will correspondingly postpone) and after the completion of the
acquisition compensate Shenshenbao in accordance with the provisions of this
agreement as the actual net profit of the object company is less than the promised
net profit. The performance compensation period of this transaction is 2018 2019
and 2020 if the transaction is not completed in 2018 the first year of the
performance commitment period of this transaction is the year when the target
company of the transaction is delivered. Fude Capital promises Shenzhen Cereals
Group to achieve net profit (net profit is subject to the net profit attributable to
shareholders of the parent company after deducting non-recurring gains and losses
in the audited consolidated statement the same below) of not less than 390 million
yuan in 2018 and net profit of not less than 400 million yuan in 2019 and net profit
of not less than 420 million yuan in 2020.Shenzhen Fude State-
owned Capital
Operation Co. Ltd.Share
reduction
commitme
nt
Principled Opinions on this Restructuring and Commitment on No Plan for
Reducing Shareholding: The Company believes that this restructuring is conducive
to enhancing Shenshenbao’s sustainable operation ability and enhancing
Shenshenbao’s profitability and is beneficial to protect the interests of
Shenshenbao’s shareholders especially the interests of small and medium
shareholders. The Company has no objection to this restructuring. The Company
promises that from the signing date of the commitment letter to the completion of
the restructuring the Company and the Company’s concerted action person will not
reduce the shareholdings of Shenshenbao nor will reduce the shareholding of the
listed company.
2018-03-23 2018-11-
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Shenzhen Agricultural
Products Co. Ltd.Share
reduction
commitme
nt
Principal Opinions and Commitments and Statements on No Plan for Reducing
Shareholding: The Company believes that this restructuring is conducive to
enhancing Shenshenbao’s sustainable operation ability and enhancing
Shenshenbao’s profitability. The Company agrees in principle on this restructuring.The Company promises that the Company will not reduce its shareholdings of
2018-03-23 2018-11-
12
Complete
d
Shenshenbao from the date of restructuring and resumption of trading to the
completion of the restructuring nor will plan to reduce the shareholding of
Shenshenbao.Shenzhen Agricultural
Products Co. Ltd.Shares
limited for
sale
commitme
nt
Commitment on the Lock-up Period of the Shares: 1. The shares of the listed
company obtained by the committed person before the transaction shall not be
transferred within 12 months from the date of completion of the transaction. 2.
During the lock-up period of shares the part that the committed person has increased
due to the bonus issue of dividends transfer of share capital or share allotment of
the listed company and other ex dividend and ex right matters should also abide by
the above-mentioned share lock-up arrangement. 3. If the above lock-up period does
not comply with the latest regulatory requirements of the securities regulatory
authority the committed person will agree to make corresponding adjustments
according to the latest regulatory opinions of the regulatory authorities and
implement in accordance with the relevant provisions of the China Securities
Regulatory Commission and the Shenzhen Stock Exchange after the lock-up period
expires.
2018-03-23 2019-11-
12
Normal
performa
nce
Wanho Securities Co.Ltd.Other
commitme
nts
Commitment Letter of Independent Financial Adviser About Shenzhen Shenbao
Industrial Co. Ltd. Issuing Shares for Asset Purchase: Wanho Securities Co. Ltd.(hereinafter referred to as “Wanho Securities” or “this independent financialadviser”) as an independent financial adviser for the issuance of shares for asset
purchase and the related transactions (hereinafter referred to as “this transaction”) of
Shenzhen Shenbao Industrial Co. Ltd. Co. Ltd. (hereinafter referred to as
“Shenshenbao” or “Listed Company”) makes the following statements and
commitments based on full due diligence and internal verification. 1. This
independent financial adviser has no other interest relationship with the parties
involved in this transaction and the relevant opinions expressed in this transaction
plan are completely independent. 2. The documents and materials on which this
independent financial adviser’s verification opinions are based are provided by the
parties to this transaction and the parties to the transaction have promised that the
information provided is true accurate and complete and there are no false records
2018-03-23 2018-11-
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Complete
d
misleading statements or major omissions. 3. This independent financial adviser has
fulfilled its due diligence obligations in accordance with laws administrative
regulations and the provisions of the China Securities Regulatory Commission there
are substantial grounds for believing that the professional opinions issued are not
materially different from the contents of the documents disclosed by the Listed
Company and the counter party. 4. This independent financial adviser has fully
verified the documents disclosed by the Listed Company and the counter party and
is sure that the content and format of the disclosure documents meet the
requirements. 5. This independent financial adviser has sufficient reasons to make
sure that the Listed Company’s issuance of share for assets purchase and related
transactions plan are in compliance with laws regulations and the relevant
provisions of the China Securities Regulatory Commission and the Shenzhen Stock
Exchange and the information disclosed is true accurate and complete there are no
false records misleading statements or major omissions. 6. The professional
opinions on this restructuring have been submitted to the internal auditing agency of
this independent financial adviser for review and agreed to issue this professional
opinion. 7. During the period of contact with the Listed Company and as an
independent financial adviser this independent financial adviser has adopted strict
confidentiality measures to implement risk control and internal segregation systems
and there is no insider trading market manipulation and securities fraud. 8. This
independent financial adviser has not entrusted and authorized any other institution
or individual to provide information not being listed in the verification opinions
issued by this independent financial adviser and to provide any explanation for the
verification opinions. 9. This independent financial adviser requests all shareholdersand investors of Shenshenbao to carefully read the full text of the “Plan for theIssuance of Shares for Purchasing Asset and Related Transactions of ShenzhenShenbao Industrial Co. Ltd.” issued by the board of directors of Shenshenbao. 10.The relevant verification opinions issued by this independent financial adviser do
not constitute any investment advice or opinions on Shenshenbao and this
independent financial adviser shall not bear any responsibility for the risks arising
from the investment decisions made by investors according to the relevant
verification opinions.
Chen Chansong; Fan
Zhiqing; Huang Yu;
Li Fang; Li Xinjian;
Li Yiyan; Lin Hong;
Liu Zhengyu; Luo
Longxin; Qian
Xiaojun; Wang
Zhiping; Wu
Shuping; Yan
Zesong; yao
Xiaopeng; Zhang
Guodong; Zheng
Yuxi
Other
commitme
nts
Commitment on No Plan for Reducing Shareholding: The Company promises that
from the signing date of the commitment letter to the completion of the restructuring
the Company and the Company’s concerted action person will not reduce the
shareholding of Shenshenbao nor has the plan to reduce the shareholding of the
listed company.
2018-03-23 2018-11-
12
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d
Shenzhen Fude State-
owned Capital
Operation Co. Ltd.Shares
limited for
sale
commitme
nt
Commitment on the Lock-up Period of the Shares: Shenzhen Shenbao Industrial Co.
Ltd. (hereinafter referred to as “Shenshenbao” and “Listed Company”) intends to
purchase the 100% equity of Shenzhen Cereals Group Co. Ltd. (hereinafter referred
to as “SZCG” “target company”) held by the shareholders of SZCG through
issuance of shares. Shenzhen Fude State-owned Capital Operation Co. Ltd.(hereinafter referred to as “the committed person”) the controlling shareholder of
SZCG has made the following commitments: 1. The committed person should not
transfer the shares of the listed company obtained from this transaction within 36
months from the date of listing of the shares. If the closing price of the listed
company’s stock is lower than the issue price for 20 consecutive trading days within
6 months after the completion of this transaction or the closing price is lower than
the issue price at the term end of 6 months after the completion of the transaction
the lock-up period for the committed person to hold the company’s stock
2018-04-02 Impleme
nt as
promised
Normal
performa
nce
automatically prolongs for at least 6 months. 2. At the expiration of the above-
mentioned lock-up period if the committed person doesn’t fully fulfill the
performance compensation obligation stipulated in the Performance Compensation
Agreement the lock-up period of the shares issued to the committed person will be
prolonged to the date when the performance compensation obligation is fulfilled. 3.
Before this transaction the shares of the Listed Company held by the committed
person and the companies controlled by the promise shall not be transferred within
12 months after the completion of this transaction. 4. During the lock-up period of
shares the part that the committed person has increased due to the bonus issue of
dividends transfer of share capital or share allotment of the Listed Company and
other ex dividend and ex right matters should also abide by the above-mentioned
share lock-up arrangement. 3. If the above lock-up period does not comply with the
latest regulatory requirements of the securities regulatory authority the committed
person will agree to make corresponding adjustments according to the latest
regulatory opinions of the regulatory authorities and implement in accordance with
the relevant provisions of the China Securities Regulatory Commission and the
Shenzhen Stock Exchange after the lock-up period expires.Shenzhen Fude State-
owned Capital
Operation Co. Ltd.Other
commitme
nts
Commitment letter of Shenzhen Fude State-owned Capital Operation Co. Ltd. on
pending litigation of Shenzhen Cereals Group Co. Ltd.: Shenzhen Shenbao
Industrial Co. Ltd. (hereinafter referred to as “Shenshenbao” “Listed Company”)
intends to purchase the 100% equity of Shenzhen Cereals Group Co. Ltd.(hereinafter referred to as “SZCG” “target company”) held by the shareholders of
SZCG through issuance of shares. In view of the two unfinished major
lawsuits/arbitration of SZCG Shenzhen Fude State-owned Capital Operation Co.Ltd. (hereinafter referred to as “the committed person”) the controlling shareholder
of SZCG has made the following commitments: If SZCG and its controlling
subsidiaries suffer any claims compensation losses or expenses due to the unsettled
major lawsuits/arbitration about the contract dispute of international sale of soybean
with Noble Resources Co. Ltd. and the contract dispute with Guangzhou Jinhe Feed
2018-04-02 Impleme
nt as
promised
Normal
performa
nce
Co. Ltd. and Huangxianning Import Agent the committed person will assume the
compensation or loss caused by the above two outstanding major
lawsuits/arbitration.Shenzhen Fude State-
owned Capital
Operation Co. Ltd.Other
commitme
nts
Commitment letter of Shenzhen Fude State-owned Capital Operation Co. Ltd. on
risks of making a supplementary payment for the rent at earlier stage of Pinghu Grain
Depot: Shenzhen Shenbao Industrial Co. Ltd. intends to purchase the 100% equity
of Shenzhen Cereals Group Co. Ltd. (hereinafter referred to as “SZCG”) held by
the shareholders of SZCG through issuance of shares. Shenzhen Fude State-owned
Capital Operation Co. Ltd. (hereinafter referred to as “the committed person”) the
controlling shareholder of SZCG has made the following commitments: If SZCG
needs to make a supplementary payment for the rent before assessment basis date to
the property right unit of Pinghu Grain Depot (or its authorized unit) the total
amount of the rent and other related charges and expenses shall be borne by the
committed person.
2018-04-02 Impleme
nt as
promised
Normal
performa
nce
Shenzhen Fude State-
owned Capital
Operation Co. Ltd.Other
commitme
nts
Commitment letter on the house properties of Shenzhen Cereals Group and its
subsidiaries that have not obtained the housing ownership certificate: Shenzhen
Shenbao Industrial Co. Ltd. (hereinafter referred to as “Shenshenbao” and “listedcompany”) intends to purchase the 100% equity of Shenzhen Cereals Group Co.Ltd. (hereinafter referred to as “SZCG” “target company”) held by the shareholders
of SZCG through issuance of shares. Shenzhen Fude State-owned Capital Operation
Co. Ltd. (hereinafter referred to as “the committed person”) the controlling
shareholder of SZCG has made the following commitments: If SZCG and its
subsidiaries suffer any administrative punishment or losses due to their house
properties without the housing ownership certificate the committed person will bear
the relevant legal responsibilities and fully compensate the listed company and
SZCG within 30 working days after the actual loss occurs.
2018-04-02 Impleme
nt as
promised
Normal
performa
nce
Shenzhen Fude State- Shares Commitment on Shenzhen Fude State-owned Capital Operation Co. Ltd. to accept 2018-04-04 Impleme Normal
owned Capital
Operation Co. Ltd.limited for
sale
commitme
nt
the restricted shares of non-tradable shares reform of Shenzhen Shenbao Industrial
Co. Ltd. held by Shenzhen Investment Holdings Co. Ltd.: Shenzhen Fude State-
owned Capital Operation Co. Ltd. (hereinafter referred to as “Fude Capital”) accepts
79484302 shares of A shares of Shenshenbao A (000019) (including 66052518
shares of unrestricted A shares and 13431784 shares of restricted A shares ) held byShenzhen Investment Holdings Co. Ltd. (hereinafter referred to as “ShenzhenInvestment Holdings”) by the free transfer totally accounting for 16% of the total
share capital of Shenshenbao. Shenzhen Investment Holdings made the followingcommitments in the reform of non-tradable shares of Shenshenbao in 2006: “Tomake effective and long-term incentives for the management after the completion
of the share reform Shenzhen Agricultural Products Co. Ltd. (hereinafter referred
to as “Agricultural Products”) and Shenzhen Investment Holdings the company’s
non-tradable shareholders will sell their shareholdings after consideration which
account for 6%-8% of the company’s total share capital to the management of the
company in three years based on the shareholding ratio of Agricultural Products and
Shenzhen Investment Holdings after the share reform (i.e. accounting for 6%-8% ofthe company’s total share capital of 181923088 shares after the share reform).”
Fude Capital made a commitment that after the completion of the free transfer of the
state-owned shares Fude Capital would continue to perform the above commitments
it made when Shenzhen Investment Holdings makes the non-tradable shares reform
to Shenshenbao which is effective in the long run.nt as
promised
performa
nce
Cao Xuelin; Dai
Bin;Du Jianguo; Hu
Xianghai; Huang
Ming; Jin Zhenyuan;
Liu Ji; Lu Qiguang;
Ni Yue; Qian
Wenying; Wang
Fangcheng; Wang
Huimin; Wang Li; Ye
Other
commitme
nts
Commitment and Statement on No Major Violations and Integrity: Shenzhen
Shenbao Industrial Co. Ltd. intends to purchase the 100% equity of Shenzhen
Cereals Group Co. Ltd. (hereinafter referred to as “SZCG”) held by Shenzhen Fude
State-owned Capital Operation Co. Ltd. through issuance of shares. In response to
the above transactions as the Director/Supervisor/Senior Management of
SZCG(hereinafter referred to as the “Declarant”) I have made the following
commitments: 1. The Declarant has not been subject to administrative penalties and
criminal penalties from the securities market or involved in major civil litigation or
arbitration related to economic disputes in the past 5 years and there are currently
2018-06-08 2018-11-
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d
Qingyun; Yin Yong;
Zhang Yong; Zhao
Rubing; Zheng
Shengqiao; Zhu
Junming; Zhu
Junming
no outstanding or foreseeable major litigation arbitration and administrative
punishment cases nor suspected crime being investigated by the judicial authorities
or suspected of violating laws and regulations and being investigated by the China
Securities Regulatory Commission; there is no failure to repay large debts on time
no failure to fulfill commitments nor administrative supervision measures taken by
the China Securities Regulatory Commission nor disciplinary action made by the
stock exchange. 2. The Declarant does not have suspected crime being investigated
by the judicial authorities or suspected of violating laws and regulations and being
investigated by the China Securities Regulatory Commission nor behavior of
suspected crime or violation of the laws and rules has been terminated for 36 months.
3. The Declarant has not been publicly condemned by the stock exchange in the last
36 months and there are no other major dishonest acts. 4. There is no such case that
the Declarant is not allowed to participate in any major assets restructuring of listed
companies in accordance with Article 13 of the Interim Provisions on Strengthening
the Supervision of Abnormal Transaction of Stocks Related to Major AssetsRestructuring of Listed Companies that is “being investigated on suspicion ofinsider trading related to the major assets restructuring of listed companies or
suffering administrative penalties by CSRC or being investigated for criminalresponsibility by judicial authorities”.
Cao Xuelin; Dai
Bin;Du Jianguo; Hu
Xianghai; Huang
Ming; Jin Zhenyuan;
Liu Ji; Lu Qiguang;
Ni Yue; Qian
Wenying; Wang
Fangcheng; Wang
Huimin; Wang Li; Ye
Qingyun; Yin Yong;
Other
commitme
nts
Commitment Letter on the Authenticity Accuracy and Integrity of the Provided
Information: 1. The information and materials provided by the committed person for
this major asset restructuring are true accurate and complete and there are no false
records misleading statements or major omissions. 2. The information provided by
the committed person to the intermediaries participating in this major asset
reorganization is the true accurate and complete source written materials or copy
materials the copy or copies of the materials are consistent with their source
materials or original copies; the signatures and the seals of all documents are true
and there are no false records misleading statements or major omissions. 3. The
explanations and confirmations issued by the committed person for this major asset
2018-06-08 2018-11-
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d
Zhang Yong; Zhao
Rubing; Zheng
Shengqiao; Zhu
Junming
restructuring are true accurate and complete and there are no false records
misleading statements or major omissions.Shenzhen Fude State-
owned Capital
Operation Co.Ltd.;Cao Yu; Ni Yue;
Zhu Junming
Other
commitme
nts
Commitment and Statement on No Major Violations and Integrity: Shenzhen
Shenbao Industrial Co. Ltd. intends to purchase the 100% equity of Shenzhen
Cereals Group Co. Ltd. held by Shenzhen Fude State-owned Capital Operation Co.
Ltd. (hereinafter referred to as “Fude Capital”) through issuance of shares. In
response to the above transactions Fude Capital and its directors supervisors and
senior management (hereinafter referred to as the “Declarant”) have made the
following commitments: 1. The Declarant has not been subject to administrative
penalties and criminal penalties from the securities market or involved in major civil
litigation or arbitration related to economic disputes in the past 5 years and there are
currently no outstanding or foreseeable major litigation arbitration and
administrative punishment cases nor suspected crime being investigated by the
judicial authorities or suspected of violating laws and regulations and being
investigated by the China Securities Regulatory Commission; there is no failure to
repay large debts on time no failure to fulfill commitments nor administrative
supervision measures taken by the China Securities Regulatory Commission in the
past 5 years; 2. The Declarant has not received administrative penalties unrelated to
the securities market in the past 5 years; 3. The Declarant does not have suspected
crime being investigated by the judicial authorities or suspected of violating laws
and regulations and being investigated by the China Securities Regulatory
Commission nor behavior of suspected crime or violation of the laws and rules has
been terminated for 36 months. 4. There is no such case that the Declarant is not
allowed to participate in any major assets restructuring of listed companies in
accordance with Article 13 of the Interim Provisions on Strengthening the
Supervision of Abnormal Transaction of Stocks Related to Major AssetsRestructuring of Listed Companies that is “being investigated on suspicion ofinsider trading related to the major assets restructuring of listed companies or
2018-06-08 2018-11-
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suffering administrative penalties by CSRC or being investigated for criminalresponsibility by judicial authorities”.
Cao Yu; Ni Yue; Zhu
Junming
Other
commitme
nts
Commitment Letter on the Authenticity Accuracy and Integrity of the Information
Provided: Shenzhen Shenbao Industrial Co. Ltd. intends to purchase the 100%
equity of Shenzhen Cereals Group Co. Ltd. held by Shenzhen Fude State-owned
Capital Operation Co. Ltd. (hereinafter referred to as “Fude Capital”) through
issuance of shares. In response to the above transactions as the
Director/Supervisor/Senior Management of Fude Capital (hereinafter referred to as
the “committed person”) I have made the following commitments: 1. The
information and materials provided by the committed person for this major asset
restructuring are true accurate and complete and there are no false records
misleading statements or major omissions. 2. The information provided by the
committed person to the intermediaries participating in this major asset
reorganization is the true accurate and complete source written materials or copy
materials the copy or copies of the materials are consistent with their source
materials or original copies; the signatures and the seals of all documents are true
and there are no false records misleading statements or major omissions. 3. The
explanations and confirmations issued by the committed person for this major asset
restructuring are true accurate and complete and there are no false records
misleading statements or major omissions. 4. If the information provided or
disclosed by the committed person for this transaction is suspected of false records
misleading statements or major omissions or is investigated by the judicial
authorities or investigated by the China Securities Regulatory Commission before
the conclusion of the investigation the shares that own rights and interests in the
listed company will not be transferred and the written application for suspicion of
transfer and the stock account should be submitted to the board of directors of listed
company within two trading days of receipt of the notice of filing the investigation
and the board of directors shall apply for lock-up to the stock exchange and the
registration and settlement company on its behalf; If the application for lock-up is
2018-06-08 2018-11-
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not submitted within two trading days the board of directors is authorized to verify
and directly submit the identity information and account information of the
committed person directly to the stock exchange and the registration and settlement
company and apply for lock-up; if the board of directors fails to submit the identity
information of the committed person to the stock exchange and the registration and
settlement company authorize the stock exchange and the registration and settlement
company directly lock the relevant shares. If the investigation concludes that there
is a violation of the laws and rules the committed person will promise to lock up the
shares and voluntarily use for the compensation arrangements for relevant investors.
Chen Chansong; Fan
Zhiqing; Huang Yu; Li
Fang; Li Xinjian; Li
Yiyan; Lin Hong; Liu
Zhengyu; Luo
Longxin; Ni Yue;
Qian Xiaojun; Wang
Huimin; Wang Li;
Wang Zhiping; Wu
Shuping; Yan Zesong;
Yao Xiaopeng; Zhang
Guodong and Zheng
Yuxi
Other
commitme
nts
Commitment and Statement on No Major Violations and Integrity: Shenzhen
Shenbao Industrial Co. Ltd. (hereinafter referred to as “Listed Company”) intends
to purchase the 100% equity of Shenzhen Cereals Group Co. Ltd. held by the
shareholders of Shenzhen Cereals Group Co. Ltd. through issuance of shares. In
response to the above transactions I have made the following commitments as
director/supervisor/senior management of Listed Company (hereinafter referred to
as the “Declarant”): 1. The Declarant has not received administrative penalties from
the China Securities Regulatory Commission in the last 36 months or has been
publicly condemned by the stock exchange in the past 12 months. 2. The Declarant
does not have suspected crime being investigated by the judicial authorities or
suspected of violating laws and regulations and being investigated by the China
Securities Regulatory Commission; 3. There is no such case that the Declarant is not
allowed to participate in any major assets restructuring of listed companies in
accordance with Article 13 of the Interim Provisions on Strengthening the
Supervision of Abnormal Transaction of Stocks Related to Major AssetsRestructuring of Listed Companies that is “being investigated on suspicion ofinsider trading related to the major assets restructuring of listed companies or
suffering administrative penalties by CSRC or being investigated for criminalresponsibility by judicial authorities”. 4. The Declarant does not use insider
information to buy or sell related securities before the transaction information is
2018-06-08 2018-11-
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d
disclosed nor disclose inside information or use inside information to advise others
to buy and sell related securities and other insider transaction behavior. If I violate
the above commitments I will bear all the losses caused to Shenshenbao.
Chen Chansong; Fan
Zhiqing; Huang Yu; Li
Fang; Li Xinjian; Li
Yiyan; Lin Hong; Liu
Zhengyu; Luo
Longxin; Ni Yue;
Qian Xiaojun; Wang
Huimin; Wang Li;
Wang Zhiping; Wu
Shuping; Yan Zesong;
Yao Xiaopeng; Zhang
Guodong and Zheng
Yuxi
Other
commitme
nts
Commitment Letter on the Authenticity Accuracy and Integrity of the InformationProvided: Shenzhen Shenbao Industrial Co. Ltd. (hereinafter referred to as “Listed
Company”) intends to purchase the 100% equity of Shenzhen Cereals Group Co.
Ltd. held by the shareholders of Shenzhen Cereals Group Co. Ltd. through issuance
of shares. In response to the above transactions as the Director/Supervisor/SeniorManagement of the Listed Company (hereinafter referred to as the “committedperson”) I have made the following commitments: 1. The Declarant has not received
administrative penalties from the China Securities Regulatory Commission in the
last 36 months or has been publicly condemned by the stock exchange in the past
12 months. 2. The Declarant does not have suspected crime being investigated by
the judicial authorities or suspected of violating laws and regulations and being
investigated by the China Securities Regulatory Commission. 3. There is no such
case that the Declarant is not allowed to participate in any major assets restructuring
of listed companies in accordance with Article 13 of the Interim Provisions on
Strengthening the Supervision of Abnormal Transaction of Stocks Related to Major
Assets Restructuring of Listed Companies that is “being investigated on suspicionof insider trading related to the major assets restructuring of listed companies or
suffering administrative penalties by CSRC or being investigated for criminalresponsibility by judicial authorities”. 4. The Declarant does not use insider
information to buy or sell related securities before the transaction information is
disclosed nor disclose inside information or use inside information to advise others
to buy and sell related securities and other insider transaction behavior. If I violate
the above commitments I will bear all the losses caused to Shenshenbao.
2018-06-08 2018-11-
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d
Ni Yue; Wang Other Commitment on No Reducing Shareholding and plan of share reduction: I hereby 2018-06-08 2018-11- Complete
Huimin; Wang Li commitme
nts
promises that from the signing date of the commitment letter to the completion of
the restructuring I will not reduce the shareholding of Shenshenbao nor has the
plan to reduce the shareholding of the listed company. Hereby notify
12 d
Shenzhen Fude State-
owned Capital
Operation Co. Ltd.Share
increase
commitme
nt
Commitment Letter on the Subscription of Non-Public Issuance of Shares of
Shenzhen Shenbao Industrial Co. Ltd.: In view of the fact that Shenzhen Shenbao
Industrial Co. Ltd. (hereinafter referred to as “Shenshenbao”) intends to acquire
100% equity of Shenzhen Cereals Group Co. Ltd. (hereinafter referred to as the
“target company”) held by Shenzhen Fude State-owned Capital Operation Co. Ltd.(hereinafter referred to as “the Company”) by issuing shares to purchase assets the
Company has made the following commitments: 1. The Company does not have the
following situations stipulated in Article 6 of Administrative Measures On
Acquisition Of Listed Companies: (1) using the acquisition of the listed company to
damage the legitimate rights and interests of the acquired company and its
shareholders; (2) having a relatively large amount of debts failing to pay due and
being in a continuous state; (3) having major illegal acts or suspected of being
involved in major illegal acts in the past three years; (4) having serious dishonest
behavior at securities market in the past three years; (5) other situations that are not
allowed to acquire the listed company by the laws administrative laws and
regulations and the China Securities Regulatory Commission. 2. The Company and
its key management personnel have not received administrative penalties (except for
those clearly irrelevant to the securities market) or criminal penalties nor involved
in major civil litigation or arbitration related to economic disputes in the past five
years.
2018-06-08 2018-11-
12
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d
Shenzhen Fude State-
owned Capital
Operation Co. Ltd.Other
commitme
nts
Commitment Letter on Inside Information: In view of the fact that Shenzhen
Shenbao Industrial Co. Ltd. (hereinafter referred to as “Shenshenbao”) intends to
acquire 100% equity of Shenzhen Cereals Group Co. Ltd. held by Shenzhen Fude
State-owned Capital Operation Co. Ltd. (hereinafter referred to as “the Company”)
by issuing shares to purchase assets the Company has made the following
commitments: The company does not disclose relevant inside information of the
2018-06-08 2018-11-
12
Complete
d
restructuring nor use the inside information for insider trading. If the Company
violates the above commitments it will bear all the losses caused to Shenshenbao.Shenzhen Fude State-
owned Capital
Operation Co. Ltd.Other
commitme
nts
Confirmation Letter on the Ownership of Underlying Assets of the Restructuring
Transaction: In view of the fact that Shenzhen Shenbao Industrial Co. Ltd.(hereinafter referred to as “Shenshenbao”) intends to acquire 100% equity of
Shenzhen Cereals Group Co. Ltd. (hereinafter referred to as the “target company”)
held by Shenzhen Fude State-owned Capital Operation Co. Ltd. (hereinafter referred
to as “the Company”) by issuing shares to purchase assets the Company has made
the following commitments: 1. The Company is an enterprise registered in the
People’s Republic of China and has full capacity for civil conduct and it has the
legal subject qualification to participate in this restructuring and sign an agreement
with Shenshenbao and fulfill its rights and obligations under the agreement. 2. The
Company has fulfilled its capital contribution obligations to the target company in
accordance with the law and there is no feigned capital contribution deferred capital
contribution withdrawal of capital contribution or other behavior which violates its
obligations and responsibilities as a shareholder nor any situation that may affect
the legal existence of the target company. 3. There is no ownership dispute or
potential ownership disputes in the equity of the target company nor any situation
that may affect the legal existence of the target company. 4. The equity of the target
company held by the Company is actually legally owned there is no dispute over
ownership or potential ownership disputes there is no trust entrusted shareholding
or similar arrangement and there is no promise or arrangement prohibiting the
transfer or restricting the transfer. There is also no pledge blocking seizure property
preservation or other rights restrictions nor litigation arbitration or other forms of
disputes that affect the restructuring. At the same time the Company guarantees that
the equity of the target company will remain in the states until it is registered to
Shenshenbao. 5. The equity of the target company held by the Company is the asset
with clear ownership and it is promised that there will be no legal obstacles to the
stock transfer after the approval of the China Securities Regulatory Commission
2018-06-08 2018-11-
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d
and there is no dispute over rights and obligations it is also promised that the transfer
of ownership of the shares will be completed within the agreed time limit. 6. Before
registering the change of the shareholding of the target company to be under the
name of Shenshenbao the Company will guarantee the normal orderly and legal
operation of the target company and ensure that the target company does not carry
out asset disposal and external guarantees unrelated to normal production and
operation nor increase the behavior of major debts and ensure that the target
company does not illegally transfer hide assets and business. If there is a need to
conduct actions related to the foregoing matters it must be implemented with the
written consent of Shenshenbao under the premise of not violating national laws
regulations and regulatory documents. 7. The Company guarantees that there is no
litigation arbitration or dispute that affects or potentially affects the Company’s
transfer of the target company’s equity held by the Company and guarantees that
there are no restrictions in all agreements or contracts signed by the Company which
hinder the Company from transferring the equity of the target company it holds.There are no restrictive clauses in the articles of association internal control system
documents and the signed contracts or agreements of the target company that prevent
the Company from transferring the equity of the target company it holds.Shenzhen Fude State-
owned Capital
Operation Co. Ltd.Other
commitme
nts
Commitment Letter on the Authenticity Accuracy and Integrity of the Provided
Information: in viewing of Shenzhen Shenbao Industrial Co. Ltd purchase 100
percent equity of Shenzhen Cereals Group Co. Ltd held by Shenzhen Fude State-
owned Capital Operation Co. Ltd. (hereinafter referred to as the company) in way
of share issuing the company made commitments as: 1. The information and
materials provided by the committed person for this major asset restructuring are
true accurate and complete and there are no false records misleading statements or
major omissions. 2. The information provided by the committed person to the
intermediaries participating in this major asset reorganization is the true accurate
and complete source written materials or copy materials the copy or copies of the
materials are consistent with their source materials or original copies; the signatures
2018-06-08 2018-11-
12
Complete
d
and the seals of all documents are true and there are no false records misleading
statements or major omissions. 3. The explanations and confirmations issued by the
committed person for this major asset restructuring are true accurate and complete
and there are no false records misleading statements or major omissions. 4. The
promisor will provide information about the reorganization to listed company timely
if the listed company or an investor suffers losses due to the existence of false
records misleading statements or major omissions in the information provided the
promisor shall be liable for compensation according to law. 5. If the information
provided or disclosed by the committed person for this transaction is suspected of
false records misleading statements or major omissions or is investigated by the
judicial authorities or investigated by the China Securities Regulatory Commission
before the conclusion of the investigation the shares that own rights and interests in
the listed company will not be transferred and the written application for suspicion
of transfer and the stock account should be submitted to the board of directors of
listed company within two trading days of receipt of the notice of filing the
investigation and the board of directors shall apply for lock-up to the stock exchange
and the registration and settlement company on its behalf; If the application for lock-
up is not submitted within two trading days the board of directors is authorized to
verify and directly submit the identity information and account information of the
committed person directly to the stock exchange and the registration and settlement
company and apply for lock-up; if the board of directors fails to submit the identity
information of the committed person to the stock exchange and the registration and
settlement company authorize the stock exchange and the registration and settlement
company directly lock the relevant shares. If the investigation concludes that there
is a violation of the laws and rules the committed person will promise to lock up the
shares and voluntarily use for the compensation arrangements for relevant investors.
6. The committed person agrees to bear individual and joint legal liability for the
authenticity accuracy and completeness of the information provided
Shenzhen Cereals
Group Co. Ltd
Other
commitme
Commitment and Statement on No Major Violations and Integrity: Shenzhen
Shenbao Industrial Co. Ltd. intends to purchase the 100% equity of Shenzhen
2018-06-08 2018-11-
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Complete
d
nts Cereals Group Co. Ltd (hereinafter referred to as the company) held by Shenzhen
Fude State-owned Capital Operation Co. Ltd.through issuance of shares. In response
to the above transactions the company made the following commitments: 1. The
company has not been subject to administrative penalties and criminal penalties from
the securities market or involved in major civil litigation or arbitration related to
economic disputes in the past 5 years and there are currently no outstanding or
foreseeable major litigation arbitration and administrative punishment cases nor
suspected crime being investigated by the judicial authorities or suspected of
violating laws and regulations and being investigated by the China Securities
Regulatory Commission; there are no cases of failure to repay large debts on time or
failure to fulfill commitments nor administrative supervision taken by the China
Securities Regulatory Commission or disciplinary action taken by the stock
exchange. 2. The Company does not have the case that the suspected crime is being
investigated by the judicial authorities or suspected of violating the law and being
investigated by the China Securities Regulatory Commission or the alleged crime
or illegality has been terminated for 36 months. 3. The Company has not been
publicly condemned by the stock exchange in the last 36 months and there are no
other major dishonest acts. 4. There is no such case that the Company is not allowed
to participate in any major assets restructuring of listed companies in accordance
with Article 13 of the Interim Provisions on Strengthening the Supervision of
Abnormal Transaction of Stocks Related to Major Assets Restructuring of Listed
Companies that is “being investigated on suspicion of insider trading related to themajor assets restructuring of listed companies or suffering administrative penalties
by CSRC or being investigated for criminal responsibility by judicialauthorities”. 5. Except for major lawsuits and arbitration disclosed in the
Restructuring Report the Company and its branches wholly-owned and holding
subsidiaries do not currently have other outstanding or foreseeable major lawsuits
and arbitration cases involving more than 10 million yuan. 6. Except for the
administrative penalties disclosed in the Restructuring Report the Company and its
branches wholly-owned and holding subsidiaries have no act which violates the
industrial and commercial taxation land food safety construction planning
environmental protection fire protection quality supervision or other laws and
administrative regulations received administrative punishment and have serious
circumstances since January 1 2015. 7. The Company and its branches wholly-
owned and holding subsidiaries have no food safety incidents since January 1 2015.
8. The Company does not have any illegal guarantee for the controlling shareholder
the actual controller and other enterprises controlled by it.Shenzhen Cereals
Group Co. Ltd
Other
commitme
nts
Commitment Letter on the Authenticity Accuracy and Integrity of the Provided
Information: in viewing of Shenzhen Shenbao Industrial Co. Ltd purchase 100
percent equity of Shenzhen Cereals Group Co. Ltd (hereinafter referred to as the
company) in way of share issuing the company made commitments as: 1. The
information and materials provided by the company for this major asset restructuring
are true accurate and complete and there are no false records misleading statements
or major omissions. 2. The information provided by the company to the
intermediaries participating in this major asset reorganization is the true accurate
and complete source written materials or copy materials the copy or copies of the
materials are consistent with their source materials or original copies; the signatures
and the seals of all documents are true and there are no false records misleading
statements or major omissions. 3. The explanations and confirmations issued by the
company for this major asset restructuring are true accurate and complete and there
are no false records misleading statements or major omissions.
2018-06-08 2018-11-
12
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d
Shenzhen Agricultural
Products Co. Ltd.Other
commitme
nts
Commitment and Statement on No Major Violations and Integrity: in viewing of
Shenzhen Shenbao Industrial Co. Ltd purchase 100 percent equity of Shenzhen
Cereals Group Co. Ltd in way of share issuing as the person acing in concert withe
the acquirer Shenzhen Agricultural Products Co. Ltd. (hereinafter referred to as
the company) made commitments as: 1. The company has not been subject to
administrative penalties and criminal penalties from the securities market or
involved in major civil litigation or arbitration related to economic disputes in the
past 5 years and there are currently no outstanding or foreseeable major litigation
2018-06-08 2018-11-
12
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d
arbitration and administrative punishment cases nor suspected crime being
investigated by the judicial authorities or suspected of violating laws and regulations
and being investigated by the China Securities Regulatory Commission; there are no
cases of failure to repay large debts on time or failure to fulfill commitments nor
administrative supervision taken by the China Securities Regulatory Commission
or disciplinary action taken by the stock exchange. 2. The company does not have
the case that the suspected crime is being investigated by the judicial authorities or
suspected of violating the law and being investigated by the China Securities
Regulatory Commission or the alleged crime or illegality has been terminated for
36 months. 3. The company has not been publicly condemned by the stock exchange
in the last 36 months and there are no other major dishonest acts. 4. There is no such
case that the Company is not allowed to participate in any major assets restructuring
of listed companies in accordance with Article 13 of the Interim Provisions on
Strengthening the Supervision of Abnormal Transaction of Stocks Related to Major
Assets Restructuring of Listed Companies that is “being investigated on suspicionof insider trading related to the major assets restructuring of listed companies or
suffering administrative penalties by CSRC or being investigated for criminalresponsibility by judicial authorities”. 5. Before the disclosure of this transaction
information the Company does not use insider information to buy or sell related
securities or to disclose inside information or use inside information to advise others
to buy and sell related securities and other insider transaction behavior. 6. There is
no such case that the Company is not allowed to have non-public offering of shares
due to the violation of the provisions of Article 39 of the Administration Measures
for the Securities Issuance of Listed Companies.Shenzhen Agricultural
Products Co. Ltd.Other
commitme
nts
Commitment Letter on the Authenticity Accuracy and Integrity of the Provided
Information: Shenzhen Shenbao Industrial Co. Ltd (hereinafter referred to as
Shenshenbao or the listed company) purchase 100 percent equity of SZCG form
shareholder of Shenzhen Cereals Group Co. Ltd (hereinafter referred to as SZCG or
the target company) in way of share issuing. As the person acting in concert with the
acquirer Shenzhen Agricultural Products Co. Ltd. (hereinafter referred to as
2018-06-08 2018-11-
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d
committed person) made commitments as: 1. The information and materials
provided by the committed person for this major asset restructuring are true accurate
and complete and there are no false records misleading statements or major
omissions. 2. The information provided by the committed person to the
intermediaries participating in this major asset reorganization is the true accurate
and complete source written materials or copy materials the copy or copies of the
materials are consistent with their source materials or original copies; the signatures
and the seals of all documents are true and there are no false records misleading
statements or major omissions. 3. The explanations and confirmations issued by the
committed person for this major asset restructuring are true accurate and complete
and there are no false records misleading statements or major omissions. 4. If the
information provided or disclosed by the committed person for this transaction is
suspected of false records misleading statements or major omissions or is
investigated by the judicial authorities or investigated by the China Securities
Regulatory Commission before the conclusion of the investigation the shares that
own rights and interests in the listed company will not be transferred and the written
application for suspicion of transfer and the stock account should be submitted to
the board of directors of listed company within two trading days of receipt of the
notice of filing the investigation and the board of directors shall apply for lock-up
to the stock exchange and the registration and settlement company on its behalf; If
the application for lock-up is not submitted within two trading days the board of
directors is authorized to verify and directly submit the identity information and
account information of the committed person directly to the stock exchange and the
registration and settlement company and apply for lock-up; if the board of directors
fails to submit the identity information of the committed person to the stock
exchange and the registration and settlement company authorize the stock exchange
and the registration and settlement company directly lock the relevant shares. If the
investigation concludes that there is a violation of the laws and rules the committed
person will promise to lock up the shares and voluntarily use for the compensation
arrangements for relevant investors. 5. The committed person agrees to bear
individual and joint legal liability for the authenticity accuracy and completeness of
the information provided
Shenzhen Shenbao
Industrial Co. Ltd.Other
commitme
nts
Commitment and Statement on No Major Violations and Integrity: in viewing of
Shenzhen Shenbao Industrial Co. Ltd (hereinafter referred to as the company)
purchase 100 percent equity of Shenzhen Cereals Group Co. Ltd in way of share
issuing the company made commitments as: 1. The company has not been subject
to administrative penalties and criminal penalties from the securities market or
involved in major civil litigation or arbitration related to economic disputes in the
past 5 years and there are currently no outstanding or foreseeable major litigation
arbitration and administrative punishment cases nor suspected crime being
investigated by the judicial authorities or suspected of violating laws and regulations
and being investigated by the China Securities Regulatory Commission; there is no
failure to repay large debts on time no failure to fulfill commitments nor
administrative supervision measures taken by the China Securities Regulatory
Commission nor disciplinary action made by the stock exchange. 2. The company
does not have suspected crime being investigated by the judicial authorities or
suspected of violating laws and regulations and being investigated by the China
Securities Regulatory Commission nor behavior of suspected crime or violation of
the laws and rules has been terminated for 36 months. 3. The company has not been
publicly condemned by the stock exchange in the last 36 months and there are no
other major dishonest acts. 4. There is no such case that the company is not allowed
to participate in any major assets restructuring of listed companies in accordance
with Article 13 of the Interim Provisions on Strengthening the Supervision of
Abnormal Transaction of Stocks Related to Major Assets Restructuring of Listed
Companies that is “being investigated on suspicion of insider trading related to themajor assets restructuring of listed companies or suffering administrative penalties
by CSRC or being investigated for criminal responsibility by judicial authorities”. 5.
The company does not use insider information to buy or sell related securities before
the transaction information is disclosed nor disclose inside information or use inside
information to advise others to buy and sell related securities and other insider
2018-06-08 2018-11-
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d
transaction behavior.6. There is no such case that the Company is not allowed to
have non-public offering of shares due to the violation of the provisions of Article
39 of the Administration Measures for the Securities Issuance of Listed Companies.
Shenzhen Shenbao
Industrial Co. Ltd.Other
commitme
nts
Commitment Letter on the Authenticity Accuracy and Integrity of the Provided
Information: in viewing of Shenzhen Shenbao Industrial Co. Ltd (hereinafter
referred to as the company) purchase 100 percent equity of Shenzhen Cereals
Group Co. Ltd in way of share issuing the company made commitments as: 1.The information and materials provided by the company for this major asset
restructuring are true accurate and complete and there are no false records
misleading statements or major omissions. 2. The information provided by the
company to the intermediaries participating in this major asset reorganization is the
true accurate and complete source written materials or copy materials the copy or
copies of the materials are consistent with their source materials or original copies;
the signatures and the seals of all documents are true and there are no false records
misleading statements or major omissions.3. The explanations and confirmations
issued by the company for this major asset restructuring are true accurate and
complete and there are no false records misleading statements or major
omissions.4. The company agrees to bear individual and joint legal liability for the
authenticity accuracy and completeness of the information provided
2018-06-08 2018-11-
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d
Shenzhen Fude State-
owned Capital
Operation Co. Ltd.
Commitm
ents on
inter-
industry
competitio
n related
transactio
ns and
capital
occupancy
Commitment Letter on Avoiding Horizontal Competition: In view of the fact that
Shenzhen Shenbao Industrial Co. Ltd. (hereinafter referred to as “Listed Company”)
intends to acquire 100% equity of Shenzhen Cereals Group Co. Ltd. held by
Shenzhen Fude State-owned Capital Operation Co. Ltd. (hereinafter referred to as
“the Company”) by issuing shares to purchase assets the Company has made the
following commitments: 1. As of the issue date of this Commitment Letter the
Company and other enterprises controlled by the Company have not engaged in any
business or activity that directly or indirectly constitute horizontal competition to the
Listed Company and its subsidiaries in the business and guarantees that it will not
engage or induce any enterprise controlled by the Company to engage in any
business or activity that directly or indirectly constitute horizontal competition to the
2018-06-08 Impleme
nt as
promised
Normal
performa
nce
Listed Company and its subsidiaries in the future. 2. If the business opportunity
obtained by the Company and other enterprises controlled by the Company
constitutes horizontal competition or may constitute horizontal competition to the
main business of the Listed Company and its subsidiaries the Company will
immediately notify the Listed Company and try its best to give the business
opportunity to the Listed Company to avoid horizontal competition or potential
horizontal competition with the Listed Company and its subsidiaries and ensure the
interests of Listed Company and other shareholders of Listed Company are not
impaired. 3. If the main business of the Listed Company and its subsidiaries
constitutes horizontal competition or may constitute horizontal competition to the
Company and other enterprises controlled by the Company due to business
development or extension the Company and other enterprises controlled by the
Company shall take the following feasible measures based on specific circumstance
to avoid competition with the Listed Company: (1) Stop business that constitutes
competition or may constitute competition to the Listed Company; (2)Transfer the
competitive businesses and assets to the Listed Company at fair prices; (3) Transfer
the competitive business to an unrelated third party; (4) Other ways to protect the
interests of the Listed Company; 4. If the Company violates the above commitments
and causes losses to the Listed Company the Company will compensate the Listed
Company for the incurred losses after the losses are determined. 5. The above
commitments continue to be valid during the period when the Company is the
controlling shareholder of the Listed Company.Shenzhen Fude State-
owned Capital
Operation Co. Ltd.
Commitm
ents on
inter-
industry
competitio
n related
transactio
ns and
Commitment Letter on Reducing and Regulating Related Transactions: In view ofthe fact that Shenzhen Shenbao Industrial Co. Ltd. (hereinafter referred to as “Listed
Company”) intends to acquire 100% equity of Shenzhen Cereals Group Co. Ltd.
held by Shenzhen Fude State-owned Capital Operation Co. Ltd. (hereinafter referred
to as “the Company”) by issuing shares to purchase assets the Company has made
the following commitments: 1. The enterprises directly or indirectly controlled or
affected by the Company and the restructured company and its holding companies
will regulate and minimize the related transactions. For related transactions that
2018-06-08 Impleme
nt as
promised
Normal
performa
nce
capital
occupancy
cannot be avoided or have reasonable reasons to occur the Company promises to
follow the market-oriented principle of justice fairness and openness and sign
agreements in accordance with relevant laws and regulations regulatory documents
and articles of association perform legal procedures fulfill information disclosure
obligations and handle relevant approval procedures in accordance with the law and
ensure not to damage the legitimate rights and interests of the company and other
shareholders through related transactions. 2. The enterprises directly or indirectly
controlled or affected by the Company will strictly avoid borrowing from the
company and its holding and shareholding companies occupying the funds of the
company and its holding and shareholding companies or embezzling the company’s
funds by taking advance payments and compensatory debts from the company and
its holding and shareholding companies. 3. After the completion of this transaction
the Company will continue to exercise its shareholder rights in strict accordance with
the relevant laws and regulations regulatory documents and the relevant provisions
of the Articles of Association; and fulfill its obligation of avoiding voting when the
company’s general meeting of shareholders is voting on related transactions
involving the Company. 4. The Company guarantees not to obtain any improper
interests through the related transactions or cause the company and its holding and
shareholding companies to bear any wrongful obligations. If the company or its
holding and shareholding companies suffer loses or the interests of the company or
its holding and shareholding companies are embezzled by related transactions the
Company will the losses of the company and its holding and shareholding
companies.Shenzhen Fude State-
owned Capital
Operation Co. Ltd.Other
commitme
nts
Commitment on the Standardized Operation of Listed Company: Shenzhen Shenbao
Industrial Co. Ltd. intends to purchase 100% equity of Shenzhen Cereals Group
Co. Ltd. (hereinafter referred to as “SZCG”) held by Shenzhen Fude State-owned
Capital Operation Co. Ltd. (hereinafter referred to as “the Company”) through
issuance of shares. In response to the above transactions the Company has made the
following commitments: After the completion of this transaction the committed
2018-06-08 Impleme
nt as
promised
Normal
performa
nce
person promises to ensure that the listed company will strictly follow therequirements of laws and regulations such as the “Guidelines for the Governance ofListed Companies” and the changes in internal management and external operation
and development of listed company to revise the “Articles of Association” and
related rules of procedure so as to adapt to the business operations and corporate
governance requirements after the reorganization continue to improve the
governance structure of listed company continuously strengthen the system
construction to form a corporate governance structure that each performs their own
duties effectively checks and balances makes scientific decisions and coordinates
the operation so as to more effectively and feasibly protect the interests of the listed
company and all its shareholders. The committed person will urge the listed
company to perform the functions of the shareholders’ meeting in strict accordance
with the “Articles of Association” and the “Rules of Procedures of the ShareholdersMeeting” ensure that all shareholders especially small and medium shareholders
enjoy equal rights as stipulated by laws administrative regulations and the Articles
of Association and ensure that all shareholders legally exercise their rights and
interests. The committed person will also urge the listed company to further improve
the institutional requirements of the board of directors ensure that the board of
directors fairly scientifically and efficiently makes decisions ensure that
independent directors can perform their duties in accordance with laws and
regulations during their employment actively understand the various operations of
the listed company consciously perform responsibilities play a positive role in the
scientific decision-making of the board of directors and the development of the listed
company promote the sound development of the listed company and effectively
safeguard the overall interests of the listed company and the interests of small and
medium-sized shareholders. In addition the Company will urge the listed company
to give full play to the positive role of independent directors in regulating the
operation of the company strictly abide by relevant national laws regulations rules
and relevant provisions of the Articles of Association to select independent directors
and further enhance corporate governance.Shenzhen Fude State-
owned Capital
Operation Co. Ltd.Other
commitme
nts
Commitment Letter on the Legal Compliance of the Underlying Asset Operation:
Shenzhen Shenbao Industrial Co. Ltd. (hereinafter referred to as “Shenshenbao”
“Listed Company”) intends to purchase 100% equity of Shenzhen Cereals Group
Co. Ltd. (hereinafter referred to as “SZCG” “Target Company”) held by Shenzhen
Fude State-owned Capital Operation Co. Ltd. (hereinafter referred to as “the
Company”) through issuance of shares. The Company has made the following
commitments: 1. The Target Company is a limited liability company established
according to law and is validly existing possesses statutory business qualifications
and the Target Company has obtained all the approvals consents authorizations and
licenses required for its establishment and operation and all approvals consents and
authorizations and licenses are valid and there is no reason or case that may result in
the invalidation of the above approvals consents authorizations and licenses. 2. The
Target Company has no major violations of laws and regulations in the production
and operation in the last three years there is no case that the Target Company should
be terminated according to relevant laws regulations normative documents and the
company’s articles of association. Except for litigations arbitrations and
administrative penalties disclosed in the Restructuring Report the Target Company
does not have any unsettled or foreseeable major litigation arbitration and
administrative penalty that adversely affect its operations or the amount is more than
10 million yuan. 3. The Target Company will perform the labor contracts with its
employees independently and completely. 4. If the Target Company is subject to the
fees or penalties of the relevant competent authorities in terms of industry and
commerce taxation employee salaries social security housing provident fund
business qualifications or industry supervisors due to the facts already existing
before the reorganization the Company will fully compensates all the outstanding
fees of the Target Company and bear all the losses suffered by Shenshenbao and the
Target Company. 5. The Target Company legally owns the ownership and/or use
rights of the offices office equipment trademarks and other assets required for
normal production and operation has independent and complete assets and business
2018-06-08 Impleme
nt as
promised
Normal
performa
nce
structure and has legal ownership of its main assets and the ownership of assets is
clear. 6. There is no case that the Target Company impedes the transfer of ownership
of the company such as litigation arbitration judicial enforcement etc. and there
is no external guarantee that violates the law or the articles of association. After this
reorganization if the Company violates the above commitments and causes losses
to Shenshenbao and the Target Company the Company agrees to bear the
aforementioned compensation/ liability for damage to Shenshenbao/ Target
Company.
Shenzhen Fude State-
owned Capital
Operation Co. Ltd.Other
commitme
nts
Commitment on the Independence of Listed Company: In view of the fact that
Shenzhen Shenbao Industrial Co. Ltd. (hereinafter referred to as “Shenshenbao”)
intends to acquire 100% equity of Shenzhen Cereals Group Co. Ltd. (hereinafter
referred to as “Target Company”) held by Shenzhen Fude State-owned Capital
Operation Co. Ltd. (hereinafter referred to as “the Company”) by issuing shares to
purchase assets the Company has made the following commitments: 1. Guarantee
the independence of the personnel of Shenshenbao and the Target Company (1)
Guarantee that the labor personnel and compensation management of Shenshenbao
and Target Company are completely independent of the Company and other
companies and enterprises controlled by the Company or other economic
organizations and related parties after the completion of this restructuring. (2)
Guarantee that the senior management personnel of Shenshenbao and Target
Company are fully employed in Shenshenbao and Target Company and receive
remuneration after the completion of this restructuring and do not hold any post
except for directors and supervisors in the Company and other companies
enterprises controlled by the Company or other economic organizations and related
parties. (3) Ensure not to intervene into the shareholders’ meeting and the board of
directors of Shenshenbao and Target Company to exercise their powers to determine
the appointment and dismissal of personnel after the completion of this restructuring.
2. Guarantee the institutional independence of Shenshenbao and Target Company
(1) After the completion of this restructuring Shenshenbao and Target Company will
2018-06-08 Impleme
nt as
promised
Normal
performa
nce
establish a sound corporate governance structure and have an independent and
complete organization. (2) After the completion of this restructuring the
shareholders meeting the board of directors and the board of supervisors of
Shenshenbao and Target Company shall independently exercise their functions and
powers in accordance with the laws regulations and the articles of association of
Shenshenbao and Target Company. 3. Ensure that the assets of Shenshenbao and
Target Company are independent and complete. (1) After the completion of this
restructuring Shenshenbao and Target Company shall have independent and
complete assets related to production and operation. (2) Ensure that the site for
business operation of Shenshenbao and Target Company are independent of the
Company and other companies and enterprises controlled by the Company or other
economic organizations and related parties after the completion of this restructuring.
(3) In addition to normal business transactions after the completion of this
restructuring Shenshenbao and Target Company do not have funds and assets which
are occupied by the Company and other companies and enterprises controlled by the
Company or other economic organizations and related parties. 4. Guarantee the
business independence of Shenshenbao and Target Company (1) After the
completion of this restructuring Shenshenbao and Target Company shall have the
relevant qualifications for independent business activities and have the market-
oriented independent autonomous and sustainable operation capabilities. (2) After
the completion of this restructuring the Company and other companies and
enterprises controlled by the Company or other economic organizations and related
parties shall reduce the related transactions with Shenshenbao and Target Company
and other companies and enterprises controlled by them or other economic
organizations; for the necessary and unavoidable related transactions guarantee the
fair operation according to market principles and fair prices and perform relevant
approval procedures and information disclosure obligations in accordance with
relevant laws regulations and regulatory documents. 5. Guarantee the financial
independence of Shenshenbao and Target Company (1) Ensure that Shenshenbao
and Target Company will establish an independent financial department and an
independent financial accounting system and a standardized and independent
financial accounting system after the completion of this restructuring. (2) Ensure that
Shenshenbao and Target Company will open an independent bank account after the
completion of this restructuring and will not share bank accounts with the Company
and other companies and enterprises controlled by the Company or other economic
organizations and other related parties. (3) After the completion of this restructuring
the financial personnel of Shenshenbao and Target Company shall not take part-time
jobs in the Company and other companies and enterprises controlled by the
Company or other economic organizations and related parties. (4) After the
completion of this restructuring Shenshenbao and Target Company shall be able to
make financial decisions independently the Company shall not interfere with the use
of funds of Shenshenbao and Target Company. (5) After the completion of this
restructuring Shenshenbao and Target Company shall pay taxes independently
according to law. If the Company violates the above commitments it will bear all
the losses caused to Shenshenbao and Target Company.Shenzhen Fude State-
owned Capital
Operation Co. Ltd.Shenzhen Agricultural
Products Co. Ltd.
Commitm
ents on
inter-
industry
competitio
n related
transactio
ns and
capital
occupancy
Commitment to Avoid Occupation of Non-operating Capital: Shenzhen Shenbao
Industrial Co. Ltd. intends to acquire 100% equity of Shenzhen Cereals Group Co.Ltd. (hereinafter referred to as “SZCG”) held by Shenzhen Fude State-owned Capital
Operation Co. Ltd. (hereinafter referred to as “the Company”) through issuance of
shares. In response to the above transactions the Company has made the following
commitments: 1. As of the issue date of this commitment letter the committed
person and its related person do not have any illegal use of funds and assets of the
listed company and SZCG and there is no case that the listed company and SZCG
provide illegal guarantee for the committed person and its related person. 2. After
the completion of the transaction the committed person guarantees that the
committed person and its related person shall not illegally occupy the funds and
assets of the listed company in any way nor require the listed company to provide
illegal guarantee for the committed person and its related person under any
circumstances nor engage in any act to damage the legitimate rights and interests of
2018-06-08 Impleme
nt as
promised
Normal
performa
nce
the listed company and other shareholders. If the committed person violates the
above commitments it will bear all losses caused to the listed company and the target
company and other companies and enterprises controlled by them or other economic
organizations.Shenzhen Shenbao
Industrial Co. Ltd.Other
commitme
nts
Commitment related to the transactions: In view of the fact that Shenzhen Shenbao
Industrial Co. Ltd. (hereinafter referred to as “the Company”) intends to acquire
100% equity of Shenzhen Cereals Group Co. Ltd. held by Shenzhen Fude State-
owned Capital Operation Co. Ltd. by issuing shares to purchase assets the Company
has made the following commitments: 1. The Company is a limited liability
company legally established and is validly existing there is no bankruptcy
dissolution liquidation and other cases that it needs to be terminated in accordance
with the current effective laws regulations normative documents and articles of
association the Company has publicly issued shares and listed in accordance with
the law. As a listed company the Company has the subject qualifications of the issuer
of non-public issuance of shares and the purchaser of assets as stipulated in Chinese
laws regulations and normative documents. 2. The Company has complied with the
laws and regulations concerning industrial and commercial administration in the past
three years. There are no records of suffering administrative penalties with a gross
violation for violating relevant industrial and commercial administrative laws and
regulations. There is no case that the Company needs to be terminated in accordance
with the current effective laws regulations normative documents and articles of
association. The Company does not have legal impediments to continuous operation.
3. The convening of the shareholders’ meeting the board meeting and the board of
supervisors meeting of the Company the contents of the resolution and their signings
in the past three years are in compliance with the relevant laws regulations
normative documents and the articles of association the convening of the
shareholders’ meeting the board meeting and the board of supervisors meeting of
the Company the contents of the resolution and their signings for the last three years
are legal and valid; the authorization of the stockholders’ meeting of the Company
2018-06-08 Impleme
nt as
promised
Normal
performa
nce
to the board of directors for the last three years is in compliance with relevant laws
regulations regulatory documents and articles of association and is legal compliant
true and effective; the major decisions of the Company since listed have been legal
compliant true and effective. 4. There is no case that the Company’s rights and
interests are seriously damaged by the controlling shareholder or actual controller
and have not been eliminated. 5. The Company and its subsidiaries have no illegal
external guarantees and have not been released yet. 6. Prior to this restructuring the
related transactions conducted by the Company have performed the necessary fair
and just decision-making procedures and were legal and valid. 7. The Company does
not have serious damages to the legitimate rights and interests of investors and the
public interest. 8. The implementation of this restructuring of the Company conforms
to substantive conditions of the restructuring of listed companies in accordance with
the relevant laws regulations and normative documents including but not limited
to: (1) conforming to the national industrial policies and related laws and
administrative laws and regulations on environmental protection land management
and anti-monopoly; (2) incapable of causing the Company to fail to meet the
conditions for listing shares; (3) the assets pricing involved in the major asset
restructuring is fair and there is no damage to the legitimate rights and interests of
the Company and shareholders; (4) helping the Company enhance its sustainable
operation ability there is no case that the prime assets of the Company after
restructuring are all cash or the Company has no specific business operations; (5) it
is beneficial to the Company to remain independent of the actual controllers and
their related persons in terms of business assets finance personnel institutions and
others and comply with the relevant provisions of the China Securities Regulatory
Commission on the independence of listed companies; (6) it is beneficial to the
Company to maintain a sound and effective corporate governance structure; (7) this
restructuring has followed the principle of in favour of improving the assets quality
of the Company improving the financial position of the Company and enhancing its
sustainable profitability; (8) this restructuring has followed the principle of in favour
of reducing the related transactions of the Company and the principle of avoiding
horizontal competition. 9. In the past 36 months the Company has no illegal
occupation of funds or illegal external guarantees etc. there is no major violation of
laws and regulations. 10. After the completion of the restructuring the Company
promises to continue to maintain independence from the controlling shareholders
and the controlled related parties in terms of business assets finance personnel and
institutions so as to comply with the relevant provisions of the China Securities
Regulatory Commission on the independence of listed companies. 11. This
restructuring will not involve adjustments in the rules and procedures of major
operating decision information disclosure systems etc. After the completion of this
restructuring the Company will continue to operate in strict accordance with the
requirements of the Company Law the Securities Law the Governance Guidelines
for Listed Companies and other laws regulations and the articles of association and
continuously improve the corporate governance structure. 12. The relevant
agreement signed between the Company and Shenzhen Fude State-owned Capital
Operation Co. Ltd. on this restructuring is reached by the two parties in this
restructuring with consensus by following the principles of fairness and
reasonableness on the basis of equality; the contents of the agreement don’t violate
relevant laws regulations and provisions of regulatory documents and are legal and
effective. 13. The Company promises and guarantees that the convening convening
procedures and voting procedures of the board meeting and the shareholders’
meeting held in this restructuring are in compliance with the relevant laws
regulations and normative documents and the articles of association. The contents of
the resolution are legal and effective. 14. The final price of this restructuring is
negotiated and determined on the basis of the pricing principles jointly determined
by the two parties and based on the evaluation results issued by the evaluation
agency with the qualification of securities business and is the true declaration of
will of the parties to the transaction. 15. The Company’s information disclosure on
this restructuring is in compliance with relevant laws regulations rules and
regulatory documents and there are no contracts agreements or arrangements that
should be disclosed but not disclosed. 16. The current directors supervisors senior
management personnel shareholders holding more than 5% shares and other
insiders of the Company have self-checked the oneself and the immediate family
members’ buying and selling of the shares of Shenshenbao from six months
(February 21 2017) before the date of suspension of the Company’s restructuring to
the disclosure date of the restructuring report and have issued self-checking reports.
Except for Li Jie and Zhu Junzhong who have been disclosed to buy and sell the
shares of the Company none of the above-mentioned personnel has bought and sold
the shares of Shenshenbao. No related personnel has taken advantage of the inside
information of the restructuring to buy and sell the shares of the company during the
self-checking period. 17. After the completion of this restructuring the Company
will continue to perform the necessary deliberation procedures for related transaction
in accordance with laws regulations and regulatory documents and the articles of
association without prejudice to the legitimate rights and interests of Shenshenbao
and all shareholders. 18. After the completion of the restructuring the controlling
shareholder of the Company is still Shenzhen Fude State-owned Capital Operation
Co. Ltd. and the actual controller is still the State-owned Assets Supervision and
Administration Commission of the Shenzhen Municipal People’s Government. This
restructuring will not result in changes in the controlling shareholder and actual
controller of the Company. 19. The Company has not violated securities laws
administrative regulations or rules in the past three years or has been subject to
administrative punishment by the China Securities Regulatory Commission or
subject to criminal punishment. There is also no violation of industry and commerce
taxation land environmental protection customs laws and administrative
regulations or rules nor cases of administrative punishments with gross violations
or criminal penalties. 20. The Company isn’t involved in any outstanding or
foreseeable litigation arbitration or administrative punishment cases. None of the
directors supervisors and senior management personnel of the Company is involved
in any outstanding or foreseeable litigation arbitration or administrative punishment
cases. 21. The current directors and senior executives of the Company have not
received administrative penalties from the China Securities Regulatory Commission
in the past 36 months or have been publicly condemned by the stock exchange in
the last 12 months. 22. There is no case that the Company and its current directors
and senior management personnel are suspected of committing a crime and being
investigated by the judicial authorities or suspected of violating the regulations and
being investigated by the China Securities Regulatory Commission.Shenzhen Fude State-
owned Capital
Operation Co. Ltd.Other
commitme
nts
Commitment to return the arrears to SZCG for Zhanjiang Haitian and Taizhong
Agriculture: As of March 31 2018 the current balance of other receivables of related
party of SZCG was 44605900 yuan of which the receivables of related party of
Zhanjiang Haitian Aquatic Feed Co. Ltd. (hereinafter referred to as Zhanjiang
Haitian) was 40898011.31 yuan and Taizhong Agriculture Co. Ltd. (hereinafter
referred to as Taizhong Agriculture) was 3707930.42 yuan. The above-mentioned
related parties were originally subsidiaries of SZCG. Due to this restructuring the
subsidiary companies whose main businesses discontinued operation were divested
to Fude Capital resulting in the formation of a related relationship between
Zhanjiang Haitian and Taizhong Agriculture and the passive formation of accounts
receivable from related parties which didn’t have the subjective intention that the
related parties initiatively occupied the funds of SZCG. As a controlling shareholder
of SZCG Zhanjiang Haitian and Taizhong Agriculture Fude Capital has supervised
and urged Zhanjiang Haitian and Taizhong Agriculture to return the above arrears to
SZCG as soon as possible and promised that if Zhanjiang Haitian and Taizhong
Agriculture still didn’t return the above all or part of arrears before the equity of
SZCG was transferred to Shenshenbao in this restructuring Fude Capital would
assume the obligations for Zhanjiang Haitian and Taizhong Agriculture and return
the arrears to SZCG for Zhanjiang Haitian and Taizhong Agriculture.
2018-06-19 2018-9-6 Complete
d
Commitments make in
initial public offering or
re-financing
Equity incentive
commitment
Other commitments for
medium and small
shareholders
Completed on time(Y/N) Y
. Concerning assets or project of the Company which has profit forecast and reporting period still in
forecasting period explain reasons of reaching the original profit forecast
√ Applicable□Not applicable
Assets with
earnings forecast
or items
Predict start
time
Predict
termination
time
Current
forecast
performance
(10 thousand
yuan)
Current actual
performance
(10 thousand
yuan)
Reasons for
not reaching
predictions (if
applicable)
Predicted
disclosure date
Predictive
disclosure
index
Shenzhen
Cereals Group
Co. Ltd
2018-01-01 2020-12-31 39000
40199
Not applicable 2018-03-24
Found more in
the Notice of
the Company
released on
Juchao Website
(www.cninfo.c
om.cn)
Commitments made by the shareholders and counter party on annual operation performance
√ Applicable□Not applicable
Commitment on performance compensation: on 23 March 2018 the Company entered into an Agreement on Share Issuance and
Purchase of Assets with Fude Capital Fude Capital promises that after the completion of the audit and evaluation of Shenzhen Cereals
Group the Company will make a commitment to the performance of Shenzhen Cereals Group within three years after the completion
of the restructuring and sign a clear and feasible compensation agreement on the achievement of performance promised by the target
company with the listed company so as to protect the interests of small and medium investors. On June 8 2018 Fude Capital and
Shenshenbao signed the “Performance Compensation Agreement” and agreed to make a commitment to the net profit of Shenzhen
Cereals Group from 2018 to 2020 (hereinafter referred to as the “commitment period”) and after the completion of the acquisition
compensate Shenshenbao in accordance with the provisions of this agreement as the actual net profit of the object company is less than
the promised net profit. Fude Capital promises Shenzhen Cereals Group to achieve net profit (net profit is subject to the net profit
attributable to shareholders of the parent company after deducting non-recurring gains and losses in the audited consolidated statement
the same below) of not less than 390 million yuan in 2018 and net profit of not less than 400 million yuan in 2019 and net profit of
not less than 420 million yuan in 2020.
Completion of performance commitment and influence on impairment test of goodwill
In the reporting period the net profit attributable to parent company after deducting non-recurring gain/loss achieved by SZCG
amounted as401.99million yuan which achieving the performance commitment without effect on goodwill impairment test
IV. Non-operational fund occupation from controlling shareholders and its related party
□ Applicable√Not applicable
No non-operational fund occupation from controlling shareholders and its related party in period.V. Explanation from Board of Directors Supervisory Committee and Independent Directors
(if applicable) for “Qualified Opinion” that issued by CPA
□ Applicable√Not applicable
VI. Particulars about the changes in aspect of accounting policy estimates and calculation
method compared with the financial report of last year
√ Applicable□Not applicable
Content & reasons Approval procedure NoteThe “Notice on Revising and issuing the Format of General Enterprise FinancialStatement for 2018” (CK[2018] No.15) issued by Ministry of Finance on 15 June
2018 the format of financial statement for general enterprise are being revised and
the Company adjusted item presentation of the financial statement and comparative
data of comparable accounting period should be adjusted accordingly.The policy change has
deliberated on 23rd session
of 9th BOD and no need to
deliberated in shareholder
general meeting
The " Accounting Standards for Business Enterprise No. 42 - Non-current Assets Heldfor Sale Disposal Group and Discontinuing Operation” issued by Ministry of Finance
on 28 April 2017 relevant accounting treatment for non-current assets held for Sale
disposal group and discontinuing operation are changed correspondingly according to
the accounting policy changes.The policy change has
deliberated on 16th session
of 9th BOD and no need to
deliberated in shareholder
general meeting
Explanation:
1. On June 15 2018 the Ministry of Finance issued the Notice on Amending the 2018 Annual Financial Statement
Format of General Enterprises (CK [2018] No. 15) and revised the financial statement format of general enterprises.
The company has adjusted the presentation of the financial statements according to above requirements and also
adjusted the comparative data for comparable accounting periods. The changes in accounting policy only affect the
listing of relevant subjects in the company’s financial statements and shall not have any impact on the company’s
total assets total liabilities net assets and net profit in the current period and before this accounting policy alternative.
2. The " Accounting Standards for Business Enterprise No. 42 - Non-current Assets Held for Sale Disposal Groupand Discontinuing Operation” issued by Ministry of Finance on 28 April 2017 relevant accounting treatment for
non-current assets held for Sale disposal group and discontinuing operation are changed correspondingly according
to the accounting policy changes. The above mentioned policy change will not affect the Company’s business
shareholder’s equity and net profit for 2017. furthermore the policy change will not result in the retrospective
adjustment to the financial reports that disclosed in last two years and will not lead to a change in gain/loss for the
annual report that disclosed
Content & reasons Approval procedure
The time when changes in
accounting estimate begin to
apply
Note
Identification standards for account receivable with
significant single amount classification of credit risk
portfolio and change of percentage of provision for bad
debts in age portfolio
The change has
deliberated on 24th
session of 9th BOD and
no need to deliberated
in shareholder general
meeting
2018-12-28
Depreciable life of investment real estate and unification
of residual value rate
Depreciable life of fixed assets and unification of
residual value rate
Unification of amortization period for intangible assets
Explanation:
The Company purchase 100 percent equity of Shenzhen Cereals Group Co. Ltd held by Fude Capital through issuing shares SZCG
comes to wholly-owned subsidiary of the Company. Main business of the Company has increased grain and oil reserves grain and oil
trading and processing etc. on the basis of the original tea and tea products business. In order to reflect the Company’s financial status
and operation results objectively truthfully and fairly the Company according to the business scale and industry characteristics after
reorganization and reference to relevant accounting estimates of comparable listed companies in the same industry organizing and
change part of the original accounting estimate of the Company.In line with the regulation of “Accounting Standards for Business Enterprise No. 28- Change of Accounting policyaccounting estimate and errors correction” the change in accounting estimates is treated by the future applicable method without
retrospective adjustment of the disclosed financial reports and it will not affect the previous financial status and operation results. Main
impact on the financial statement for year of 2018 including: make changes and reduction of Account receivable to 6514050.72 yuan
and other receivable as 5223567.07 yuan; make changes and increase the assets impairment loss to 11159476.67yuan.VII. Major accounting errors within reporting period that needs retrospective restatement
□ Applicable√Not applicable
No major accounting errors within reporting period that needs retrospective restatement for the Company in the period.VIII. Compare with last year’s financial report; explain changes in consolidation statement’s
scope
√ Applicable□Not applicable
Change of the consolidate scope means that material assets reorganization carried out in the period purchased 100 percent equity of
SZCG through issuing shares to Fude Capital the subordinate subsidiaries of SZCG as Shenzhen Flour Co. Ltd etc. are included in
the consolidate scope of the Company.
According to the relevant agreement of transfer of stripped assets for free
from material assets reorganization signed between the SZCG and Fude
Capital Zhanjiang Haitian Aquatic Feed Co. Ltd does not
belong to the scope of material assets reorganization thus the
equity of Zhanjiang Haitian Aquatic Feed held by SZCG are
transfer to Fude Capital for free which is out of the consolidate
scope of the Company.Reasons for changes
Shenzhen Cereals Group Co. Ltd Enterprise combined under the same control
Shenzhen Flour Co. Ltd Enterprise combined under the same control
Shenzhen Hualian Grain & Oil Trade Co. ltd. Enterprise combined under the same control
Hainan Haitian Aquatic Feed Co. Ltd Enterprise combined under the same control
SZCG Quality Inspection Co. Ltd. Enterprise combined under the same control
SZCG Doximi Business Co. Ltd. Enterprise combined under the same control
SZCG Cold-Chain Logistic Co. Ltd. Enterprise combined under the same control
SZCG Big Kitchen Food Supply Chain Co. Ltd. Enterprise combined under the same control
SZCG Real Estate Development Co. Ltd. Enterprise combined under the same control
SZCG Property Management Co. Ltd. Enterprise combined under the same control
SZCG Storage (Yingkou) Co. Ltd. Enterprise combined under the same control
Dongguan SZCG Logistics Co. Ltd. Enterprise combined under the same control
Dongguan International Food Industrial Park Development Co. Ltd. Enterprise combined under the same control
Dongguan SZCG Oil & Food Trade Co. Ltd. Enterprise combined under the same control
Dongguan Golden Biology Tech. Co. Ltd. Enterprise combined under the same control
Shuangyashan SZCG Zhongxin Cereals Base Co. Ltd. Enterprise combined under the same control
Heilongjiang Hongxinglong Nongken Shenxin Cereals Industrial Park Co.ltd.
Enterprise combined under the same control
Zhanjiang Haitian Aquatic Feed Co. Ltd Stripped without compensation from state-
owned shares
IX. Appointment and non-reappointment (dismissal) of CPA
Accounting firm appointed
Name of domestic accounting firm Dahua Certified Public Accountants (Special General Partnership)
Remuneration for domestic accounting firm (in 10 thousand Yuan) 90
Continuous life of auditing service for domestic accounting firm 11- year
Name of domestic CPA Chen Baohua Zhou Lingzhi
Continuous life of auditing service for domestic CPA 3- year
Whether re-appointed accounting firms in this period or not
□ Yes √ No
Appointment of internal control auditing accounting firm financial consultant or sponsor
√ Applicable□Not applicable
During the reporting period Dahua Certified Public Accountants (Special General Partnership) was hired as the internal control audit
institutions of the Company 90000 Yuan for internal control audit fee.In the year Wanho Securities Co. Ltd. are appointed as independent financial adviser of the Company for material assets reorganization
financial adviser fee of 4.5 million Yuan and continuous supervision fee of 150000 Yuan are paid during the service time.X. Particular about suspended and delisting after annual report disclosed
□ Applicable√Not applicable
XI. Bankruptcy reorganization
□ Applicable√Not applicable
XII. Significant lawsuits and arbitration of the Company
√ Applicable□Not applicable
XIII. Penalty and rectification
□ Applicable√Not applicable
XIV. Integrity of the Company and its controlling shareholders and actual controllers
□ Applicable√Not applicable
XV. Implementation of the Company’s stock incentive plan employee stock ownership plan or
other employee incentives
□ Applicable√Not applicable
During the reporting period the Company has no stock incentive plan employee stock ownership plan or other employee incentives
that have not been implemented.XVI. Major related transaction
1. Related transaction with routine operation concerned
√ Applicable □Not applicable
Related
transactio
n parties
Related
relations
hip
Related
transacti
on
type
Related
transacti
on
content
Pricing
principl
e
Dealing
price
Trading
amount
(in 10
thousan
d Yuan)
Proporti
on in
the
amount
of the
same
transacti
on
Approv
ed
transacti
on
amount
(in 10
thousan
d Yuan)
Whethe
r to
exceed
the
approve
d
amount
Means
of
paymen
ts
Market
price of
similar
transacti
on
availabl
e
Date of
disclosu
re
Index
of
disclos
ure
Shenzhen
Fude
State-
owned
Capital
Operation
Co. Ltd.
Controll
ing
sharehol
der
Related
leasing
Related
leasing
Fair
value in
market
2843.4
2
2843.4
2
2843.4
2
N Cash
Not
applicab
le
Not
applicab
le
Not
applica
ble
Shenzhen
Fude
State-
owned
Capital
Operation
Co. Ltd.
Controll
ing
sharehol
der
Related
leasing
Related
leasing
Fair
value in
market
34.52 34.52 - -
Cash
Not
applicab
le
Not
applicab
le
Not
applica
ble
Total -- --
2877.94
-- 2843.4
2
-- -- -- -- --
Details of major sold-out order sent
back
Not applicable
The actual implementation of routine
related transactions that is about to
occurred in the Period with total
amount estimated by category (if
applicable)
Not applicable
Reason for the great difference
between trade price and market
reference price (if any)
Not applicable
2. Assets or equity acquisition and sales of assets and equity
√ Applicable□Not applicable
Related
transactio
n parties
Related
relationsh
ip
Related
transactio
n
type
Related
transactio
n content
Pricing
principle
Book
value of
the assets
transferre
d (in 10
thousand
Yuan)
Valuation
value of
the assets
transferre
d (in 10
thousand
Yuan)
Transfer
price(in
10
thousand
Yuan)
Means of
payments
Transacti
on
gain/loss(
in 10
thousand
Yuan)
Date of
disclosure
Index of
disclosure
Shenzhen
Fude
State-
owned
Capital
Operation
Co. Ltd.
Controllin
g
sharehold
er
Material
assets
reorgani
zation
Purchased
100
percent
equity of
SZCG by
issuing
shares
Valuation
value
287960.4
4
587554.6
4
587554.6
4
Purchased
100
percent
equity of
SZCG by
issuing
shares
0
22018-
Found
more in
the
Notice
of the
Company
released
on Juchao
Website
(www.cni
nfo.com.c
n)
Reasons for the great difference between
transfer price and book value or valuation
value (if applicable)
N/A
Impact on operation results and financial
status of the Company
Affected the current consolidated net profit of parent company 412.95million yuan
For those related transaction with
performance commitment involved the
achievement of performance during the
period
In reporting period SZCG has a net profit attributable to parent company after
deducting non-recurring gains/losses of 401.99 million yuan which achieved the
performance commitment
3. Related transaction of foreign investment
□ Applicable √Not applicable
No related transaction of foreign investment occurred at period-end
4. Related credits and liabilities
√ Applicable□Not applicable
Whether has a non-operational related debtor-creditor contact 是否存在非经营性关联债权债务往来
√Yes □No
Claims of related party receivable
Related
party
Relationshi
p
Causes
Whether
has a non-
operational
fund
occupancy
(Y/N)
Opening
balance
(in 10
thousand
Yuan)
Amount
increased in
the period
(in 10
thousand
Yuan)
Amount
collected in
the period
(in 10
thousand
Yuan)
Interest rate
Current
interest (in
10 thousand
Yuan)
Ending
balance
(in 10
thousand
Yuan)
Zhanjiang
Haitian
Aquatic
Feed Co.
Ltd
Affiliated
enterprise
of
controlling
shareholder
Divestiture
profits
N 4058.92 179.93 4238.85 0.00% 0 0
Impact on operation
result and financial
status of the Company
from related claims
N/A
Debts payable to related party
Related party Relationship Causes
Opening
balance (in
Amount
increased in
Amount paid
in the period
Interest rate
Current
interest (in
Ending
balance (in
thousand
Yuan)
the period (in
10 thousand
Yuan)
(in 10
thousand
Yuan)
10 thousand
Yuan)
10 thousand
Yuan)
Shenzhen
Fude State-
owned
Capital
Operation
Co. Ltd.
Controllin
g
shareholde
r
Divestiture
profits
601.49 1191.30 0 0.00% 0 1792.79
Shenzhen
Fude State-
owned
Capital
Operation
Co. Ltd.
Controllin
g
shareholde
r
Related
leasing
710.86 2843.42 0 0.00% 0 3554.28
Impact on operation result
and financial status of the
Company from related debts
N/A
5. Other major related transaction
□ Applicable√Not applicable
根据公司发行股份购买粮食集团 100%股权的重大资产重组协议、2018 年 6 月 6 日深粮集团与福德资本签订的《关于深圳市粮食集团有限公司之重大资产重组总体协议》以及《关于深圳市粮食集团有限公司房地产类资产及权益之无偿划拨协议》，深粮集团将部分资产无偿划拨给福德资本，该类资产在 2017 年 10
月 1 日-剥离日之间发生的损 17927862.86 元，公司根据协议约定需将该部分权益支付给福德资本
According to the major asset restructuring agreement of the company issuing shares to purchase 100% equity of
the grain group the General Agreement on the Major Asset Restructuring of Shenzhen Cereals Group Co.Ltd.signed by Shenzhen Cereals Group Co. Ltd. and Shenzhen Fude State-owned Capital Operation Co. Ltd. on
June 6 2018 and the Agreement on the Free Allocation of Real Estate Assets and Interests of Shenzhen Cereals
Group Co. Ltd. Shenzhen Cereals Group Co. Ltd Shenzhen Cereals Group Co. Ltd will transfer Ford Capital
which incurred losses of 17927862.86 yuan between Oct. 1 2017 and the stripping date. The company is
required to pay Shenzhen Fude State-owned Capital Operation Co. Ltd. in accordance with the agreement.XVII. Significant contract and implementations
1. Trusteeship contract and leasing
(1) Trusteeship
□ Applicable √Not applicable
No trusteeship for the Company in reporting period
(2) Contract
□ Applicable √Not applicable
No contract for the Company in reporting period
(3) Leasing
□ Applicable√Not applicable
No leasing in the Period
2. Major Guarantee
√ Applicable□Not applicable
(1) Guarantee
In 10 thousand Yuan
External Guarantee (not including guarantees to subsidiaries)
Name of the Company
guaranteed
Related
Announ
cement
disclosur
e date
Guarant
ee limit
Actual date of
happening
Actual
guarante
e limit
Guaran
tee type
Guara
ntee
term
Co
mpl
ete
impl
eme
ntati
on
or
not
Guaran
tee for
related
party
Guarantee for the subsidiaries
Name of the Company
guaranteed
Related
Announ
cement
disclosur
e date
Guarant
ee limit
Actual date of
happening
Actual
guarante
e limit
Guaran
tee type
Guara
ntee
term
Co
mpl
ete
impl
eme
ntati
on
or
not
Guaran
tee for
related
party
Dongguan SZCG Logistics
Co. Ltd.
27300 2015-07-13 17887 Joint
liability
guarant
8
years
N N
y
Dongguan SZCG Logistics
Co. Ltd.
10200 2016-12-21 5576 Joint
liability
guarant
y
5
years
N N
Dongguan SZCG Logistics
Co. Ltd.
1530 2017-05-19 1530 Joint
liability
guarant
y
2
years
N N
Shenzhen Shenbao Huacheng
Science and Technology
Co.Ltd
3000 2018-07-26 3000 Joint
liability
guarant
y
1 year N N
Dongguan International Food
Industrial Park Development
Co. Ltd.
39168 2018-07-27 14463 Joint
liability
guarant
y
14
years
N N
Dongguan SZCG Logistics
Co. Ltd.
15000 2018-10-17 3000 Joint
liability
guarant
y
1 year N N
Total amount of approving guarantee for
subsidiaries in report period (B1)
57168
Total amount of
actual occurred
guarantee for
subsidiaries in
report period (B2)
20463
Total amount of approved guarantee for
subsidiaries at the end of reporting period
(B3)
96198
Total balance of
actual guarantee for
subsidiaries at the
end of reporting
period (B4)
45456
Guarantee of the subsidiaries for the subsidiaries
Name of the Company
guaranteed
Related
Announ
cement
disclosur
e date
Guarant
ee limit
Actual date of
happening
Actual
guarante
e limit
Guaran
tee type
Guara
ntee
term
Co
mpl
ete
impl
eme
ntati
on
or
not
Guaran
tee for
related
party
Total amount of guarantee of the Company( total of three above mentioned guarantee)
Total amount of approving guarantee in
report period (A1+B1+C1)
57168
Total amount of
actual occurred
guarantee in report
period (A2+B2+C3)
20463
Total amount of approved guarantee at the
end of report period (A3+B3+C2)
96198
Total balance of
actual guarantee at
the end of report
period (A4+B4+C4)
45456
The proportion of the total amount of actually guarantee in the net assets of 10.89%
the Company(that is A4+ B4+C4)
Including:
Balance of the guarantee provided for shareholder actual controller and their
related parties (D)
0
The debts guarantee amount provided for the guaranteed parties whose assets-
liability ratio exceed 70% directly or indirectly(E)
42456
Proportion of total amount of guarantee in net assets of the Company exceed
50%(F)
0
Total amount of the aforesaid three guarantees(D+E+F) 42456
Explanation on guarantee with composite way
Nil
(2) Illegal external guarantee
□ Applicable√Not applicable
No illegal external guarantee in the period
3. Cash asset management
(1) Trust financing
√ Applicable□Not applicable
Trust financing in the period
In 10 thousand Yuan
Type Fund sources Amount occurred Undue balance Overdue amount
Bank financial products Owned fund 5000 0 0
Bank financial products Owned fund 4000 0 0
Bank financial products Owned fund 2000 0 0
Bank financial products Owned fund 2000 0 0
Bank financial products Owned fund 3000 0 0
Bank financial products Owned fund 3000 0 0
Bank financial products Owned fund 2000 0 0
Bank financial products Owned fund 3000 0 0
Bank financial products Owned fund 3000 0 0
Bank financial products Owned fund 5000 0 0
Bank financial products Owned fund 5000 0 0
Bank financial products Owned fund 3000 0 0
Bank financial products Owned fund 100 0 0
Bank financial products Owned fund 3000 0 0
Bank financial products Owned fund 7900 0 0
Bank financial products Owned fund 2000 0 0
Bank financial products Owned fund 3000 0 0
Bank financial products Owned fund 3000 0 0
Bank financial products Owned fund 3000 0 0
Bank financial products Owned fund 3000 3000 0
Bank financial products Owned fund 3000 3000 0
Bank financial products Owned fund 5000 5000 0
Bank financial products Owned fund 2000 2000 0
Bank financial products Owned fund 3000 3000 0
Total 78000 16000 0
The high-risk trust investment with single major amount or has minor security poor fluidity and non-guaranteed
□ Applicable √Not applicable
Unrecoverable principal or impairment possibility from entrust investment
□ Applicable √Not applicable
(2) Entrusted loans
□ Applicable√Not applicable
No entrusted loans in the Period
. Other material contracts
√ Applicable □Not applicable
Contracting
enterprise
Contracting
counter
party
Contract
object
Date of
contract
Book
value of
the assets
involved in
contract
(in 10
thousand
Yuan)(if
applicable)
Evaluation
value of
the assets
involved in
contract (in
10
thousand
Yuan)(if
applicable)
Evaluation
institution
(if
applicable)
Base date
of
evaluation
(if
applicable)
Pricing
principle
Trading
price (in
10
thousand
Yuan)
Whether it
is a related
transaction
(Y/N)
Relationship
Implementation
as at end of the
period
Date of
disclosure
Index of
disclosure
Shenzhen
Shenbao
Industrial
Co. Ltd.
Shenzhen
Fude State-
owned
Capital
Operation
Co. Ltd.
100
percent
equity of
Shenzhen
Cereals
Group
Co. Ltd
2018-06-08 287960.44 587554.64
Beijing
China
CEA
2017-09-30
Found
more in
Report on
Purchase
of Assets
by Issuing
Shares and
Related
Transaction
(Draft)
(Revised)
released on
Juchao
Website
dated 23
June 2018
587554.64 Y
The counter
party is the
controlling
shareholder
of the
Company-
Fude
Capital
thus the
transaction
consist of a
related
transaction
Ended as the
reporting
period the
transaction has
approved by the
CSRC and the
underlying
assets of 100
percent equity
of SZCG have
completed the
ownership
transfer
procedures and
relevant
industrial &
commercial
2018-06-11
Agreement of
the Assets
Acquisition by
Issuing Shares
between
Shenzhen
Shenbao
Industrial Co.Ltd. And
Shenzhen
Fude State-
owned Capital
Operation
Co. Ltd and
supplementary
agreement
released on
changes Juchao
website dated
24 March
2018 4 April
11 June and 8
Sept.XVIII. Social responsibility
1. Performance of social responsibility
During the reporting period the Company has been strictly in accordance with "Company Law" "Securities Law"
"Articles of Association" and other relevant laws and regulations continues to improve governance structure and
regulized operation. the Company attaches importance to social responsibility sustains attention to social create
value integrity management according to law to provide consumers with safe and secure products high-quality
green and healthy products to enhance the capacity for sustainable development and overall competitiveness;
making efforts to improve management enhance innovation capability and core competencies; the Company uphold
a fair just and open principles of treatment for all investors with particular emphasis on safeguarding the interests
of minority shareholders; the Company strictly comply with national environmental laws and regulations
thoroughly implement green philosophy strengthen ecological protection comply with the overall development of
the country and society and strive to achieve economic and social benefits short-term interests and long-term
interests of their own development and social development coordination thus achieve healthy and harmonious
development between the Company and the community the Company and the environment.
2. Execution of social responsibility of targeted poverty alleviation
(1) Plan of targeted poverty alleviation
In 2018 the company continued to carry out the targeted poverty alleviation work at Guilin Village Yidu Town
Longchuan County Heyuan City through SZCG its wholly-owned subsidiary. According to the documents of theGuangdong Provincial Party Committee and the Provincial Government “Opinions on Implementation of the Three-year Tack on Targeted Poverty Alleviation in the New Era” (YF [2016] No. 13) the task of Guilin Village’s poverty
alleviation was to achieve the goals of “Two No-worries Three-Guarantees One-Equal” in 2018 realizing no worries
for food and clothing for impoverished people guarantees for compulsory education basic medical care and housing
security and index of main fields of basic public services equal to the provincial average and strive to bring 10 low
income families with 44 persons get ready for getting out of poverty in 2018 (totally bring 52 families with 145
persons out of poverty in three year ). In order to ensure that the poverty alleviation work achieve substantive results
and implement the various objectives and tasks of targeted poverty alleviation the work team adopted the following
effective assistance measures: help poor households increase their income by organizing training courses helping
sell tea providing public welfare positions assisting in handling small loans encouraging to work outside leadingto increase tea planting increasing the planting area and using the investment dividends of “substituting andcomplementing the financial funds with rewards” and other means.
(2) Summary of annual targeted poverty alleviation
In 2018 the Company has input 1684500 yuan in total for poverty alleviation (consolation money and material
allowance excluded) and used to improve the infrastructure construction implement industrial assistance plan with
tea as the main component and provided medical insurance for poor households.Performance and effect
First in the aspect of industrial assistance carried out poverty alleviation work in the mode of “company +cooperative + farmer + base” guided the large tea farmers to actively help more than 20 tea farmers to purchase teawhich solved the marketing problem of villagers’ tea to a certain extent; utilized the “substituting andcomplementing the financial funds with rewards” to guide the 20 poor households with labor capacity to invest in
the Nanyuewang Company and the Aodingfeng Tea Cooperative at the end of 2018 the two investment dividends
amounted to 64300 yuan with an average income of 3215 yuan per household. After three years the principal of
10000 yuan/person will be returned which will provide financial guarantees for the poor households to develop
their industries in the future. Organized the tea training courses for four times and 200 person-time of poor
households participated in the training which enhanced the production skills of poor households. Organized large
tea farmers to participate in the first tea garden trade fair of poverty alleviation town village of Heyuan City
achievement exhibition of Shenzhen - Heyuan City targeted poverty alleviation and Shenzhen Tea Fair which
greatly enhanced the popularity of “Guilin Tea”.Second in the improvement of village infrastructure and public services invested 625000 yuan to build the
Chashan Road of more than 30 kilometers which has effectively improved the tea picking efficiency of the villagers
and invested 570000 yuan to complete the hardening project for 2.1 km village road to ensure the safe travel of the
villagers. Started the construction of a new village service center to improve the environment of the villagers’ arena
invested 200000 yuan to install solar street lamps make hygiene billboard buy electric cleaning vehicles and
garbage cans hire poor households as cleaners beautify the village appearance and change the backward situation
of “dirty chaotic and poor”. By the end of 2018 14 dangerous houses had been reconstructed and 52 poverty-
stricken households in the village had achieved safe housing and reached the “eight-have” requirement.Third in the medical education assistance invested 77600 yuan to help the villagers in Guilin Village to handle the
new rural cooperative medical insurance so as to reduce the burden of disease prevention and treatment of the
villagers; applied for the allowance of 33000 yuan to Shenzhen Charity Federation for the children from 5 poor
households which effectively reduced the economic burden of schooling for the children of poor households. In
2018 8 households with 37 persons were released from poverty.
(3) Performance of targeted poverty alleviation
Target Measurement unit Numbers/ implementation
i. Overall —— ——
Including:1. fund 10 thousand yuan 173.27
2. Material discount 10 thousand yuan 2.08
3.number of poverty-stricken
population eliminating poverty with card for
archives established
Person 145
ii. Invested by specific project —— ——
1.Industrial development poverty —— ——
Including: 1.1Type —— Poverty alleviation in agriculture and forestry industry
1.2 numbers of industrial
development poverty
Number 1
1.3Amount input 10 thousand yuan 62.5
1.4number of poverty-stricken
population eliminating poverty with card for
archives established
Person 37
2.Transfer employment —— ——
Including: 2.1 Amount input for vocation
skills training
10 thousand yuan 0.8
2.2 Number of vocation skills
training
Person-time 200
2.3 Number of poverty-stricken
population achieving employment with card for
archives established
Person 15
3.Relocation the poor —— ——
Including: 3.1 Number of employed persons
from relocated households
Person 0
4.Education poverty —— ——
Including: 4.1 Amount input for subsidizing
the impoverished students
10 thousand yuan 3.75
4.2Number of subsidized poor
student s
Person 6
4.3Amount input for improving the
education resources in poverty-stricken areas
10 thousand yuan 0.4
5.Health poverty alleviation —— ——
Including: 5.1 Amount input for medical
and health resources in poverty-stricken areas
10 thousand yuan 7.76
6.Ecological protection and poverty
alleviation
—— ——
Including: 6.1 Type —— Carry out ecological protection and construction
6.2Amount input 10 thousand yuan 8.8
7.Fallback protection —— ——
Including: 7.1 Amount input for Three Stay
Behind persons
10 thousand yuan 5.12
.2Number of Three Stay Behind
persons help
Person 47
7.3Amount input for poor disabled
persons
10 thousand yuan 0.96
7.4Number of poor disabled persons
help
Person 6
8.Social poverty alleviation —— ——
9.Other —— ——
Including: 9.1. number of items Number 7
9.2.Amount input 10 thousand yuan 81.1
9.3.number of poverty-stricken
population eliminating poverty with card for
archives established
Person 138
iii. Awards (content and grade) —— ——
(4) Follow-up of targeted poverty alleviation
2019 is a key year for targeted poverty alleviation and winning the three-year tack on targeted poverty alleviation
the company will continue to take Xi Jinping’s socialism with Chinese characteristics as a guide and take related
poverty alleviation policies of governments at all levels as a gist concentrate efforts strengthen measures promote
poverty alleviation work in an orderly manner consolidate the results of poverty alleviation bring all poverty-
stricken households out of poverty and promote the industry development of Guilin Village:
1. Continue to do a good job in precision assistance. Help 32 poverty-stricken households supported by the
government to consolidate the poverty alleviation results and encourage 20 poverty-stricken households with labor
capacity to work outside and assist them to obtain dividends of “substituting subsidies with rewards” and increase
income from various aspects. Fully implement the “Two No-worries Three-Guarantee” policy reach the “Eight -Have” standards and effectively implement the measures to help and educate and continue to consolidate the results
of poverty alleviation. Hold tea exhibitions in Longchuan County or organize rural walking activities to promote
tea industry in Guilin Village and develop rural tourism.
2. Continue to follow the village foundation project and complete the construction of the new village service center.
3. Promote the Agricultural Products Testing Center project to change to invest in Nanyuewang Ecological
Agriculture Development Co. Ltd.
4. Combine the policies of the poverty alleviation department develop the tea industry in Guilin village according
to local conditions explore the model of “planting tea + tourism” and form a long-term and comprehensive industry.
5. Comprehensively carry out the smooth docking of “targeted poverty alleviation” and “rural revitalization” work
and further consolidate the results of poverty alleviation.. Environmental protection
The listed Company and subsidiaries is in the range of heavy pollution industry that regulated by State environment
protection departments
Yes
Name
Name of
Major
Pollutants
and
Particular
Pollutants
Emissio
n
Method
Quantit
y of
Dischar
ge
Outlet
Distri
bution
of
Disch
arge
Outlet
Emission
Concentra
tion
Executed
Pollutant
Discharge
Standards
Total
Emissions
Approved
Total
Emissions
Excessive
Discharge
Shenzhen
Shenbao
Huacheng
Science and
Technology
Co.Ltd
Chemical
oxygen
demand
Emissio
n after
the
qualifie
d
bioche
mical
treatme
nt
1
Conce
ntrate
d
emissi
on
10 90 0.22 tons
15.44
tons /Year
N/A
Shenzhen
Shenbao
Huacheng
Science and
Technology
Co.Ltd
Suspende
d matter
Emissio
n after
the
qualifie
d
bioche
mical
treatme
nt
1
Conce
ntrate
d
emissi
on
5 60 0.11 tons
10.293
tons /Year
N/A
Shenzhen
Shenbao
Huacheng
Science and
Technology
Co.Ltd
Five-day
biochemic
al oxygen
demand
Emissio
n after
the
qualifie
d
bioche
mical
treatme
nt
1
Conce
ntrate
d
emissi
on
1.8 20 0.04 tons
3.431
tons /Year
N/A
Shenzhen
Shenbao
Huacheng
Science and
Ammonia
nitrogen
Emissio
n after
the
qualifie
1
Conce
ntrate
d
emissi
0.146 10
0.003
tons
1.716
tons /Year
N/A
Technology
Co.Ltd
d
bioche
mical
treatme
nt
on
Shenzhen
Shenbao
Huacheng
Science and
Technology
Co.Ltd
Chroma
Emissio
n after
the
qualifie
d
bioche
mical
treatme
nt
1
Conce
ntrate
d
emissi
on
2 40
0.044
tons
6.862
tons /Year
N/A
Shenzhen
Shenbao
Huacheng
Science and
Technology
Co.Ltd
PH value
Emissio
n after
the
qualifie
d
bioche
mical
treatme
nt
1
Conce
ntrate
d
emissi
on
7.43 6~9 —— —— N/A
Construction and operation of pollution prevention and control facilities
1. In the initial stage of production the first phase of sewage treatment capacity was 230T/day. However due to the increase in
production capacity and management needs the second phase of the treatment capacity of 240T/day was rebuilt in 2007 and the total
sewage treatment design capacity reached 470T/day.
2. In the past three years the Company’s sewage treatment facilities have performed well and there has been no excessive discharge.
Environmental impact assessment of construction projects and other environmental protection administrative licenses
Environmental impact assessment of construction projects and other environmental protection administrative licenses
1. The Company obtained the latest environmental protection approval in 2009:
Shenzhen Longgang District Environmental Protection Bureau Construction Project Environmental Impact Review and Approval No.SLHP[2009]703873; the Company’s industrial waste water discharge is not allowed to exceed 470 tons/day the waste water discharge
performs the first-level standard for the second period of DB44/26-2001.
2. The Company obtained the latest “Guangdong Province Pollutant Discharge Permit” in 2016 which is valid until 2021.
Emergency response plan for environmental emergencies
The Company strengthened the operation maintenance and management of environmental protection facilities formulated a strict
responsibility system for environmental protection posts established an emergency response team with the chairman of the pollutant
discharge unit as the core of leadership and revised the Company’s Emergency Response Plan for Environmental Emergencies to
ensure the stable and normal operation rate of the pollution control facilities reaches 100%.Environmental self-monitoring scheme
1. The Company installed COD PH value and flowmeter pollution source online monitor for all-weather on-line monitoring in 2010.
2. Engage a third-party professional organization to test the industrial discharge of waste water for every half year.
Other environmental information that should be disclosed
1. Oil-to-gas project: In 2011 the Company transformed its two boilers from diesel boilers into natural gas boilers that burn clean
energy which greatly reduced the greenhouse gas emissions.
2. Clean production audit: The Company passed the voluntary clean production audit of Shenzhen in 2016.
Note: If the company discloses environmental information content in the form of an interim report during the reporting period it ought
to explain the follow-up progress or changes. If the relevant matters have been disclosed in the interim report and there is no progress
or change in subsequent implementation only the summary of the matter should be disclosed and the relevant query index of the
interim report disclosure website should be provided.Other environment protection
Nil
XIX. Explanation on other significant events
√ Applicable□Not applicable
Shenzhen Shenbao Industrial has applied for a suspension of the Company’s stock (referred to as: Shenshenbao A Shenshenbao B
stock code: 000019 200019) from the opening of the market on August 22 2017 to the Shenzhen Stock Exchange due to the planningand preparation of major events. On September 5 2017 the Company disclosed the “Announcement on the Suspension for the Major
Asset Restructuring of the Company” the Company’s stock has been transferred to major asset restructuring and continued to be
suspended since the opening of the market on September 5 2017. During the suspension of the Company’s stock the Company has
disclosed the “Announcement on Suspension Progress of Major Asset Restructuring” at least every five trading days in accordance
with relevant regulations.On March 23 2018 the Company convened the 15th session of the 9th Board of Directors which discussed and approved the
“Proposal on Preplanning of Shenzhen Shenbao Industrial Co. Ltd. Issuing Shares to Purchase Assets and Related Transactions” and
the proposals related to this major asset restructuring.
On 27 March 2018 the Company received the “Inquiry Letter on the Restructuring of Shenzhen Shenbao Industrial Co. Ltd.” [License
Restructuring Inquiry Letter [2018] No. 6] issued by the Shenzhen Stock Exchange. According to the requirements of the inquiry letter
the Company promptly organized various intermediaries to carry out careful research implemented and replied the relevant issues termby term and supplemented and revised the original planning and compiled the “Preplanning of Shenzhen Shenbao Industrial Co. Ltd.Issuing Shares to Purchase Assets and Related Transactions (revised version)”
By application the Company’s stock resumed the trading on the opening of the market on the morning of April 4 2018 (Wednesday).On June 8 2018 the Company held the 17th session of the 9th board of directors which deliberated and approved the “Proposal on ‘the
Company’s Share Issuance for Purchasing Assets and Related Transactions Report (Draft)’ and its Summary” and other proposals
related to major asset restructuring.On June 15 2018 the Company received the “Approval of Shenzhen State-owned Assets Supervision and Administration Commissionon the Company’s Share Issuance for the Acquisition of 100% Equity of Shenzhen Cereals Group and Relevant Issues of Major AssetsRestructuring” (SGZWH [2018] No. 499) issued by Shenzhen SASAC from Fude Capital agreed the restructuring plan reported by
Fude Capital.
On June 19 2018 the Company received the “Inquiry Letter on the Company’s Restructuring” [XKLCZWXH[2018] No. 18] issued
by the Shenzhen Stock Exchange. According to the requirements of the inquiry letter the Company supplemented and improved the
documents related to this major asset restructuring and established the Report on Share Issuance of Shenzhen Shenbao Industrial Co.Ltd. for Purchasing Assets and Related Transactions (Revised Version).On June 27 2018 the Company held the first extraordinary meeting in 2018 which reviewed and approved the “Proposal on ‘the
Company’s Share Issuance for Purchasing Assets and Related Transactions Report (Draft)’ and its Summary” and other proposals
related to this major asset restructuring.On July 5 2018 the Company received the “Notice of Correction on Application for Administrative License of China SecuritiesRegulatory Commission” (No. 181013) (hereinafter referred to as the “Notice of Correction”) issued by the China Securities Regulatory
Commission. The CSRC reviewed the application materials for the administrative license of the “Approval of the Company’s Listed
Companies to Issue Shares to Purchase Assets” submitted by the Company and requested the Company to submit the relevant
correction materials to the acceptance department of CSRC for administrative license application within 30 working days from the date
of issuance of the Notice of Correction. The Company strictly followed the requirements of the Notice of Correction and actively
prepared the correction materials and submitted them in time.On July 27 2018 the Company received the “Administrative License Application Acceptance Form of CSRC” issued by the China
Securities Regulatory Commission (acceptance number is 181013). The China Securities Regulatory Commission examined the
application materials for the administrative license of the “Approval of the Issuance of Shares by Listed Companies to Purchase Assets”
submitted by the Company in accordance with the law considering that all materials were complete decided to accept the application
for the administrative license.
On August 9 2018 the Company obtained the “Notice of Investigation of China Securities Regulatory Commission” (YZDCTZ No.
180133) from Jonten the audit institution responsible for this major asset restructuring because it was suspected of violating securities
laws and regulations in the audit process of other enterprises CSRC decided to file a case and investigate it. In accordance with the
relevant regulations of the CSRC Decree No. 138 the Company convened the board meeting on August 13 2018 and decided to apply
to the CSRC for the suspension of the “Approval of the Issuance of Shares by Listed Companies to Purchase Assets” and submittedthe application to the CSRC on the same day. On August 15th the Company received the “Notice of the Suspension of the Reviewabout Administrative License Application from China Securities Regulatory Commission (No. 181013) and CSRC decided to agree
to the Company’s suspension of the review.In view of the fact that Jonten had fulfilled the corresponding review procedures and issued the review report in accordance with theregulations on August 19 2018 the Company convened the board meeting to deliberate and approve the “Proposal on Resuming theReview about the Application for ‘the Approval of Issuance of Assets by Listed Companies to Purchase Assets’ to the China SecuritiesRegulatory Commission” and agreed the Company to apply to the China Securities Regulatory Commission for resumption of review.On August 23 2018 the company received the “Written Decision on Not Implementing Further Review to the Anti-monopolyInvestigation of Operators” issued by the Anti-Monopoly Bureau of the State Administration of Market Regulation (FLDCSH [2018]
No. 153) which agreed not to implement further review to the equity case about the company’s acquisition of Shenzhen Cereals Group
and the company can implement concentration from now on.
On August 24 2018 the company received the “Notice of Resuming the Review to Administrative Licensing Application of ChinaSecurities Regulatory Commission” (No. 181013) and the China Securities Regulatory Commission reviewed the “Approval ofResuming the Review to the Issuance of Shares for Asset Purchase by Listed Companies” submitted by the company according to law
and considered that the application was in compliance with the conditions for resuming review. According to the relevant provisions
of Article 23 of the Regulations on the Implementation Procedures of Administrative Licensing of the China Securities Regulatory
Commission the CSRC decided to resume the review of the application for the administrative licensing.
On August 31 2018 the company received the “Notice of Feedback on Administrative Licensing Project Review from the ChinaSecurities Regulatory Commission” issued by the China Securities Regulatory Commission (No. 181013). The China SecuritiesRegulatory Commission investigated the application materials for administrative licensing of “Approval of Issuance of Shares for AssetPurchase by Listed Companies” submitted by the company in accordance with the law requiring the company to provide written
explanations on relevant issues and submit a written response to the administrative licensing acceptance department of China Securities
Regulatory Commission within 30 working days..On September 6 2018 the company held the 22nd meeting of the Ninth Board of Directors which reviewed and approved the Proposal
on Amending the Issue Price Adjustment Plan the Proposal on Adjusting the Issue Price of Issuance of Shares for Asset Purchase by
the Company and other proposals related to the major asset restructuring.On September 10 2018 the company replied to a feedback from the China Securities Regulatory Commission and revised the
restructuring report according to the feedback.On September 12 2018 the company received a notice from the China Securities Regulatory Commission the Listed Company Mergerand Acquisition and Reorganization Audit Committee of China Securities Regulatory Commission (hereinafter referred to as the “M&Aand Reorganization Committee”) will hold a working meeting in the near future to review the company’s issuance of shares for asset
purchase and related transactions. After applying to the Shenzhen Stock Exchange the company’s stocks (stock abbreviation:
Shenshenbao A Shenshenbao B stock codes: 000019 200019) have been suspended since the opening on September 13 2018
(Thursday).On September 21 2018 the company received a notice from the China Securities Regulatory Commission after reviewed by the 44th
working conference of the M&A and Reorganization Committee in 2018 held by the Listed Company Merger and Acquisition and
Reorganization Audit Committee of China Securities Regulatory Commission the company’s issuance of shares for asset purchase
and related transactions obtained a pass unconditionally. After applying to the Shenzhen Stock Exchange the company’s stocks (stock
short name: Shenshenbao A Shenshenbao B stock codes: 000019 200019) resumed trading on September 25 2018 (Tuesday).On October 13 2018 the company disclosed the reorganization assessment report additional announcement and revised the
restructuring report according to the additional situation.On October 15 2018 the company received the Reply on the Approval of the Company to Issue Shares to Fude Capital to Purchase
Assets (ZJXK [2018] No. 1610) approved and issued by the China Securities Regulatory Commission according to which the company
revised the restructuring report.On October 18 2018 the company obtained the “Change (Record) Notice” (21802220859) issued by the Shenzhen Market Supervision
Administration and the transfer of the underlying assets of the company regarding the issuance of shares to purchase assets and the
related transactions was completed. After the completion of this change the company holds 100% equity of Shenzhen Cereals Group.On November 12 2018 the issuance of shares for this major asset restructuring was listed on the Shenzhen Stock Exchange.XX. Significant event of subsidiary of the Company
√ Applicable□Not applicable
1. On July 24 2018 the company held the 18th meeting of the Ninth Session of Board of Directors and the 10th
meeting of the Ninth Session of Board of Supervisors and reviewed and approved the Proposal on the Relocationof the Shenzhen Factory of the Company’s Subsidiary - Shenzhen Shenbao Huacheng Tech Co. Ltd.” and agreed
to relocate the Shenzhen Factory of Shenzhen Shenbao Huacheng Tech Co. Ltd. its wholly-owned subsidiary to
its wholly-owned subsidiary Wuyuan County Jufangyong Tea Industry Limited Company. Found more in the Notice
of the Company released on Juchao website (www.cninfo.com.cn) dated 26 July 2018
2. On December 28 2018 the company held the 24th meeting of the Ninth Session of Board of Directors and the
13th meeting of the Ninth Session of Board of Supervisors and reviewed and approved the “Proposal on theRevocation of the Company’s Subsidiary - Shenzhen Shenbao Huacheng Tech Co. Ltd. Shantou Branch” agreed
to revoke the company’s wholly-owned subsidiary Shenzhen Shenbao Huacheng Tech Co. Ltd. Shantou Branch.
Found more in the Notice of the Company released on Juchao website (www.cninfo.com.cn) dated 29 Dec. 2018
Section VI. Changes in Shares and Particulars about
Shareholders
I. Changes in Shares
1. Changes in shares
In Share
Before the Change Increase/Decrease in the Change (+ -) After the Change
A mount
Proportio
n
New
shares
issued
Bonus
shares
Capitaliza
tion of
public
reserve
Others Subtotal A mount
Proportio
n
I. Restricted shares
2906844
5
5.85%
6557529
51
0 0 0
6557529
51
6848213
96
59.42%
1. State-owned shares 0 0.00% 0 0 0 0 0 0 0.00%
2. State-owned corporate
shares
1343178
4
2.70%
6557529
51
0 0 0
6557529
51
6691847
35
58.06%
3. Other domestic shares
1558332
5
3.14% 0 0 0 1 1
1558332
6
1.35%
Including: Domestic legal
person’s shares
1538483
2
3.10% 0 0 0 0 0
1538483
2
1.33%
Domestic nature
person’s shares
198493 0.04% 0 0 0 1 1 198494 0.02%
4. Foreign shares 53336 0.01% 0 0 0 -1 -1 53335 0.01%
Including: Foreign corporate
shares
0 0.00% 0 0 0 0 0 0 0.00%
overseas nature
person’s share
53336 0.01% 0 0 0 -1 -1 53335 0.01%
II. Un-restricted shares
4677138
58
94.15% 0 0 0 0 0
4677138
58
40.58%
1. RMB common shares
4159645
78
83.73% 0 0 0 0 0
4159645
78
36.09%
2. Domestically listed foreign
shares
5174928
0
10.42% 0 0 0 0 0
5174928
0
4.49%
3. Foreign listed foreign
shares
0 0.00% 0 0 0 0 0 0 0.00%
4. Other 0 0.00% 0 0 0 0 0 0 0.00%
III. Total shares
4967823
03
100.00%
6557529
51
0 0 0
6557529
51
1152535
254
100.00%
Reasons for share changed
√ Applicable□Not applicable
During the reporting period the Company carried out a material assets reorganization and purchased 100 percent equity of Shenzhen
Cereals Group Co. Ltd through issuing 655752951 A-share to Shenzhen Fude State-owned Capital Operation Co. Ltd with price of
8.96 yuan per share. The above mentioned share increase from issuing refers to the tradable shares with limited conditions and listed
on Shenzhen Stock Exchange on 12 November 2018. After the issuing total share capital of the Company up to 1152535254 shares
from 496782303 shares.
Due to the rounding off in the annual recalculation of shares locked by senior executive the Company’s senior executive of 9th BOD
Mr. Yan Zesong of whom one share of the Company was lifted restriction on January 2 2018; the Company’s senior management 9th
BOD Mr. Yao Xiaopeng of whom one share of the Company was restricted on January 2 2018.
Approval of share changed
√ Applicable□Not applicable
On 10 October 2018 the “Approval of Shenzhen Shenbao Industrial Co. Ltd Purchased Assets through Issuing Shares to Shenzhen
Fude State-owned Capital Operation Co. Ltd.” ZJXK [2018} No.1610 issued by CSRC. Found more in the “Notice on Accepting the
Approval of Shenzhen Shenbao Industrial Co. Ltd Purchased Assets through Issuing Shares” released on juchao website on 17
October 2018 .Ownership transfer of share changed
√ Applicable□Not applicable
According to the “Confirmation of Acceptance of Share Registration Application” issued by China Securities Depository and Clearing
Co. Ltd. Shenzhen Branch on October 30 2018 the newly increased shares shall be officially listed in the register of shareholders of
the listed company after the share registration the above newly increased shares have been listed on the Shenzhen Stock Exchange onNovember 12 2018. For details please refer to the “Report on the Issuance of Shares to Purchase Assets and the Implementation ofRelated Transactions and the Listing of New Shares of Shenzhen Shenbao Industrial Co. Ltd.” disclosed by the company on November
9 2018 at www.cninfo.com.cn.
Progress of shares buy-back
□ Applicable√Not applicable
Implementation progress of the reduction of repurchases shares by centralized bidding
□ Applicable√Not applicable
Influence on the basic EPS and diluted EPS as well as other financial indexes of net assets per share attributable to common shareholders
of Company in latest year and period
√ Applicable□Not applicable
After the implementation of material assets reorganization total share capital of the Company up to 1152535254 shares from
496782303 shares.Based on the new share capital of 1152535254 shares the basic EPS for year of 2017 and 2018 amounted as
0.3116 yuan/share and 0.2726 yuan/share respectively; net assets per share amounted as 3.34 yuan/share and 3.62 yuan/share
respectively.Other information necessary to disclose or need to disclosed under requirement from security regulators
□ Applicable√Not applicable
2. Changes of restricted shares
√ Applicable□Not applicable
In Share
Shareholders’ name
Number of
shares
restricted at
Period-begin
Number of
shares
released in the
Year
Number of new
shares restricted
in the Year
Number of shares
restricted at
Period-end
Restriction
reasons
Released date
Shenzhen Fude State-
owned Capital Operation
Co. Ltd.
0 0 655752951 655752951
Additional
limited shares for
material assets
reorganization
2022-5-12
Shenzhen Fude State-
owned Capital Operation
Co. Ltd.
0 0 13431784 13431784
Restricted shares
before IPO
Restrict shares of
Shenzhen
Investment
Holding transfer
for free
Shenzhen Investment
Holding Co. Ltd
13431784 13431784 0 0
Restricted shares
before IPO
2018-4-3
Yan Zesong 53336 1 0 53335
Senior
executives
locked-up
shares
Shares unlock
every year takes
25% of the total
shares holding
Yao Xiaopeng 33288 0 1 33289
Senior
executives
locked-up
shares
Shares unlock
every year takes
25% of the total
shares holding
Total 13518408 13431785 669184736 669271359 -- --
II. Securities issuance and listing
1. Security offering (without preferred stock) in Reporting Period
√ Applicable□Not applicable
Stock and its Issuing date Issuing price (or Issuing amount Listing date Numbers Date for deal closure
derivative
securities
interest rate) approved for
listing
Stock
SZCH 2018-11-12 8.96 yuan/share 655752951 2018-11-12 655752951
Convertible corporate bond Convertible corporate bonds traded separately and corporate bond
Other derivative securities
Explanation
During the reporting period the company issued shares to Fude Capital to purchase 100% of its stake in Shenzhen Cereals Group.
According to the Asset Evaluation Report ZQHPBZ (2018) No. 3558 issued by CEA the assessed value of the underlying assets on
the base date of assets evaluation (September 30 2017) was 5875546400 yuan. After negotiation by the parties to the transaction the
total transaction value of the underlying assets was 5875546400 yuan and the company paid the consideration by way of issuing
shares that is the company issued 655752951 share of A shares to Fude Capital at the price of 8.96 yuan per share to purchase 100%
of its stake in Shenzhen Cereals Group the above shares were listed on the Shenzhen Stock Exchange on November 12 2018. Found
more in the Notice of the Company released on Juchao website (www.cninfo.com.cn) on 9 Nov. 2018
2. Changes of total shares and shareholders structure as well as explanation on changes of assets and liability
structure
√ Applicable □Not applicable
During the reporting period the Company carried out a material assets reorganization and purchased 100 percent equity of Shenzhen
Cereals Group Co. Ltd through issuing 655752951 shares to Fude Capital. After the issuing total share capital of the Company up
to 1152535254 shares from 496782303 shares. Total shares and changes in shareholder structure are as:
Shareholder Before transaction After transaction
Number of shares
holding (Share)
Proportion of
shares holding
Number of shares
holding (Share)
Proportion of
shares holding
Shenzhen Agricultural Products Co. Ltd. 94832294 19.09% 94832294 8.23%
Shenzhen Fude State-owned Capital Operation
Co. Ltd.
79484302 16.00% 735237253 63.79%
Other circulating shareholders 322465707 64.91% 322465707 27.98%
Total 496782303 100.00% 1152535254 100.00%
After the above mentioned material assets reorganization SZCG included in the consolidate socope as the subsidiary of the Company.
Performance of SZCG included in the listed company correspondingly thus the assets and liability of the Company has major growth
from a year earlier the year before reorganization.
Ended as reporting period total assets of the Company amounted as 6468.95 million yuan increased 9.44 percent by comparing with
5911.03 million yuan at same period last year; total liability of the Company amounted as 2131.35 million yuan increased 10.45
percent by comparing with 1938.2 million yuan at same period last year
3. Existing internal staff shares
□ Applicable√Not applicable
III. Particulars about shareholder and actual controller of the Company
1. Number of shareholders and particulars about shares holding
In Share
Total common
stock
shareholders in
reporting
period-end
63160
Total common
stock
shareholders at
end of last month
before annual
report disclosed
57385
Total preference
shareholders with
voting rights
recovered at end of
reporting period (if
applicable) (found
in note 8)
0
Total preference
shareholders
with voting
rights recovered
at end of last
month before
annual report
disclosed (if
applicable)
(found in note 8)
0
Particulars about shares held above 5% by shareholders or top ten shareholders
Full name of Shareholders
Nature of
shareholder
Proport
ion of
shares
held
Total shares
hold at the end
of report
period
Changes in
report period
Amount of
restricted
shares held
Amount of
un-
restricted
shares held
Number of share
pledged/frozen
State of
share
Amount
Shenzhen Fude State-owned
Capital Operation Co. Ltd.
State-owned
legal person
63.79% 735237253 735237253 669184735 66052518
Shenzhen Agricultural Products
Co. Ltd.
Other 8.23% 94832294 0 15384832 79447462
Sun Huiming
Domestic
nature
person
0.30% 3403262 0 0 3403262
Hu Xiangzhu
Domestic
nature
person
0.23% 2630000 720000 0 2630000
Zhonghai Trust Co. Ltd. -
Zhonghai - Pujiang Star 353
Collective Fund Trust
Other 0.18% 2108025 2108025 0 2108025
China resources Trust - CR Trust
- Yun sheng 9 Collective Fund
Trust Plan
Other 0.18% 2091200 2091200 0 2091200
Cai Yunsheng
Domestic
nature
person
0.14% 1611590 1611590 0 1611590
Central Huijin Asset State-owned 0.13% 1472625 0 0 1472625
Management Co. Ltd. legal person
Lin Junbo
Domestic
nature
person
0.13% 1457900 1457900 0 1457900
Li Qian
Domestic
nature
person
0.11% 1279191 -3487 0 1279191
Strategy investors or general corporation
comes top 10 common shareholders due to
rights issue (if applicable) (see note 3)
N/A
Explanation on associated relationship among
the aforesaid shareholders
Shenzhen SASAC directly holds 100% equity of Fude Capital and holds 34% of
Agricultural Products indirectly through Fude Capital; the Company was not aware of
any related relationship between other shareholders above and whether they belonged to
parties acting in concert as defined by the Acquisition Management Method of Listed
Company.
Particular about top ten shareholders with un-restrict shares held
Shareholders’ name Amount of un-restrict shares held at Period-end
Type of shares
Type Amount
Shenzhen Agricultural Products Co. Ltd. 79447462
RMB
common
shares
79447462
Shenzhen Fude State-owned Capital
Operation Co. Ltd.
66052518
RMB
common
shares
66052518
Sun Huiming 3403262
Domesti
cally
listed
foreign
shares
3403262
Hu Xiangzhu 2630000
RMB
common
shares
2630000
Zhonghai Trust Co. Ltd. - Zhonghai - Pujiang
Star 353 Collective Fund Trust
2108025
RMB
common
shares
2108025
China resources Trust - CR Trust - Yun sheng
9 Collective Fund Trust Plan
2091200
RMB
common
shares
2091200
Cai Yunsheng 1611590 RMB 1611590
common
shares
Central Huijin Asset Management Co. Ltd. 1472625
RMB
common
shares
1472625
Lin Junbo 1457900
RMB
common
shares
1457900
Li Qian 1279191
RMB
common
shares
1279191
Expiation on associated relationship or
consistent actors within the top 10 un-restrict
shareholders and between top 10 un-restrict
shareholders and top 10 shareholders
Shenzhen SASAC directly holds 100% equity of Fude Capital and holds 34% of
Agricultural Products indirectly through Fude Capital; the Company was not aware of
any related relationship between other shareholders above and whether they belonged to
parties acting in concert as defined by the Acquisition Management Method of Listed
Company.
Whether top ten common stock shareholders or top ten common stock shareholders with un-restrict shares held have a buy-back
agreement dealing in reporting period
□ Yes √ No
The top ten common stock shareholders or top ten common stock shareholders with un-restrict shares held of the Company have no
buy-back agreement dealing in reporting period.
2. Controlling shareholder of the Company
Nature of controlling shareholders: local state-owned holding
Type of controlling shareholders: legal person
Controlling
shareholders
Legal
person/perso
n in charge of
the unit
Date of foundation Organization code Main operation business
Shenzhen Fude
State-owned Capital
Operation Co. Ltd.Zhu Junming 2017-12-14 91440300MA5EWWPXX2
Investing in the establishment of industries
(Specific projects are declared separately);
development operation and management of
self-owned properties. (Projects subject to
approval according to law should be
approved by relevant departments before
carrying out business activities) (Except for
projects prohibited by laws administrative
regulations and the decisions of the State
Council and the restricted projects must be
licensed before operating)
Equity of other
domestic/oversea
listed Company
control by
controlling
shareholder as well
as stock-joint in
report period
Except for holding 63.79 percent equity of the Company 34.04 percent equity of Shenzhen Agricultural
Products Co. Ltd was held by Shenzhen Fude State-owned Capital Operation Co. Ltd.
Changes of controlling shareholders in reporting period
√ Applicable□Not applicable
New controlling shareholder Shenzhen Fude State-owned Capital Operation Co. Ltd.
Date for change 2018-4-3
Query index on specify web site Juchao website（www.cninfo.com.cn）
Disclosure date on specify web site 2018-4-4
3. Actual controller and persons acting in concert
Nature of actual controller: local state-owned assets management
Type of actual controller: legal person
Actual controller
Legal
person/perso
n in charge
of the unit
Date of foundation Organization code Main operation business
Shenzhen Municipal
People’s Government
State-owned Assets
Supervision &
Administration
Commission
Yu Gang 2004-04-02 11440300K317280672
According to the authorization of the Shenzhen
Municipal Government perform the investor’s
duties in accordance with laws and regulations
safeguard the rights and interests of the investor
of state-owned assets in accordance with the
law; assume the responsibility of supervising
the state-owned assets of municipal enterprises;
assume the responsibility of supervising the
hedging and investor of state-owned assets of
the supervised enterprises; guide and advance
the supervised enterprises to improve the
corporate governance structure strengthen the
construction of the board of directors and the
board of supervisors of the supervised
enterprises; take responsible for appointing or
recommending directors supervisors and
financial controllers to the supervised
enterprises take responsible for the audit of the
economic responsibility of the responsible
persons of the supervised enterprises in
accordance with the provisions on the
administration authority of the persons in charge
of the enterprise; take responsible for preparing
the budget and final account draft of the annual
state-owned capital operation of the supervised
enterprises including the government budget
system etc.
Equity of other
domestic/foreign listed
Company controlled
by actual controller in
reporting period
-
Changes of actual controller in reporting period
□ Applicable √Not applicable
No changes of actual controllers for the Company in reporting period.Property right and controlling relationship between the actual controller and the Company is as follow:
Actual controller controlling the Company by entrust or other assets management
□ Applicable√Not applicable
4. Particulars about other legal person shareholders with over 10% shares held
□ Applicable√Not applicable
5. Limitation and reducing the holdings of shares of controlling shareholders actual controllers
restructuring side and other commitment subjects
□ Applicable√Not applicable
Section VII. Preferred Stock
□ Applicable √Not applicable
Section VIII. Particulars about Directors Supervisors Senior
Executives and Employees
I. Changes of shares held by directors supervisors and senior executives
Name
Title
Post-
holding
status
Sex
(F/M)
Age
Start dated
of office
term
End date
of office
term
Shares
held at
period-
begin
(Share)
Increasin
g shares
held in
this
period
(Share)
Decreasin
g shares
held in
this
period
(Share)
Other
changes
(share)
Shares
held at
period-
end(Share
)
Zheng
Yuxi
Party
Secretary
Chairman
Currently
in office
M 57
2015-09-
10
2018-09-
10
66000 0 0 0 66000
Zhang
Guodong
Director
Currently
in office
M 57
2017-09-
13
2018-09-
10
0 0 0 0 0
Wang Li Director
Currently
in office
M 58
2018-05-
15
2018-09-
10
0 0 0 0 0
Ni Yue Director
Currently
in office
F 45
2018-05-
15
2018-09-
10
0 0 0 0 0
Fan
Zhiqing
Independen
t director
Currently
in office
M 70
2015-09-
10
2018-09-
10
3960 0 0 0 3960
Wu
Shuping
Independen
t director
Currently
in office
M 66
2015-09-
10
2018-09-
10
0 0 0 0 0
Chen
Cansong
Independen
t director
Currently
in office
M 47
2015-09-
10
2018-09-
10
0 0 0 0 0
Yan
Zesong
Director
GM
Currently
in office
M 49
2015-09-
10
2018-09-
10
71114 0 0 0 71114
Li Yiyan
Director
Deputy
GM
Secretary of
the Board
Currently
in office
F 53
2015-09-
10
2018-09-
10
41250 0 0 0 41250
Lin Hong
Chairman
of
supervisory
committee
Currently
in office
F 54
2015-09-
10
2018-09-
10
41250 0 0 0 41250
Wang Supervisor Currently F 52 2018-05- 2018-09- 0 0 0 0 0
Huimin in office 15 10
Luo
Longxin
Staff
supervisor
Currently
in office
M 58
2015-09-
10
2018-09-
10
0 0 0 0 0
钱晓军 Deputy GM
Currently
in office
M 47
2015-09-
10
2018-09-
10
0 0 0 0 0
Yao
Xiaopeng
Deputy GM
Currently
in office
M 51
2015-09-
10
2018-09-
10
44385 0 0 0 44385
Wang
Zhiping
CFO
Currently
in office
F 48
2015-09-
10
2018-09-
10
28050 0 0 0 28050
Liu
Zhengyu
Director
Office-
leaving
M 49
2015-09-
10
2018-04-
13
0 0 0 0 0
Huang Yu Director
Office-
leaving
M 45
2015-09-
10
2018-04-
13
0 0 0 0 0
Li
Xinjian
Supervisor
Office-
leaving
M 47
2015-09-
10
2018-05-
15
0 0 0 0 0
Li Fang
Deputy
party
secretary
SCID
Deputy GM
Office-
leaving
F 45
2015-09-
10
2018-05-
31
39766 0 0 0 39766
Total -- -- -- -- -- -- 335775 0 0 0 335775
II. Changes of directors supervisors and senior executives
√ Applicable□Not applicable
Name Title Type Date Reasons
Liu Zhengyu Director
Office-
leaving
2018-04-13 Reasons for job transfer
Huang Yu Director
Office-
leaving
2018-04-13 Reasons for job transfer
Li Xinjian Supervisor
Office-
leaving
2018-05-15 Reasons for job transfer
Li Fang
Deputy party
secretary SCID
Deputy GM
Non-
reappointmen
t
2018-05-31 Reasons for job transfer
III. Post-holding
Professional background major working experience and present main responsibilities in Company of directors
supervisors and senior executive
(i) Director
Mr. Zheng Yuxi: bachelor degree of economics was born in 1962. He has served successively as director and
Deputy GM of underling enterprise of Shenzhen Special Economic Region Free Commodities Enterprises
Chairman of Shenzhen Agri-Pastoral Enterprises Co. Ltd. assistant GM and Deputy GM and GM of the Company
Chairman of 7th and 8th BOD; and now serves as Party Secretary of the Company and chairman of the 9th BOD
Mr. Zhang Guodong: master’s degree and engineer was born in 1962. He successively served as director of the
assets management dept. in Shenzhen Agricultural Products Co. Ltd the director of international dept. and director
of the GM Office; the GM and chairman of Shanghai Hanjisi Market Management Co. Ltd. Now he serves as GM
of the HQ of supplying chain management in Shenzhen Agricultural Products Co. Ltd; also the director of 9th BOD
of the Company
Mr. Wang Li: master’s degree and an accountant was born in 1961. He successively served as assistant workers in
Chengdu Locomotive Factory; assistant workers in Xi’an Railway Branch; business manager vice director of the
financial department director of capital division deputy chief accountant deputy GM Director deputy party
secretary and GM of Shenzhen SEG Group Co. Ltd.; now he serves as full-time external director of Shenzhen
SASAC Director of Shenzhen Cereals Group Co. Ltd and Shenzhen Agricultural Products Co. Ltd the Director
of 9th BOD of the Company.
Ms. Ni Yue: a master’s degree and a senior accountant was born in 1974. She successively served as general ledger
accountant in Shanghai Jingan Commercial & Trade Corporation; chief accounting in Shanghai Tailong Real Estate
Co. Ltd.; finance officer in Shanghai Baodi Property Co. Ltd; chief accountant in Shanghai Ruian Real Estate Co.
Ltd and full-time supervisor in the enterprise directly under SASAC of Shanghai Pudong New District. Now she
serves as full-time external director of Shenzhen SASAC Director of Shenzhen Bus Group and Shenzhen Cereals
Group Co. Ltd; chief financial officer of Shenzhen Fude State-owned Capital Operation Co. Ltd.and Director of
9th BOD of the Company.
Mr. Fan Zhiqing was born in 1949 a master’s degree a senior accountant and senior economist. He has served
successively as judge of title of a senior professional post in Guangdong Province and panelists financial manager
and CFO of large state-run or joint venture in Shenzhen guest professor of Shenzhen University and Shenzhen
Managers College independent Director of Ocean’s King Lighting Science & Technology Co. Ltd.;
independent Director of Shenzhen Kingsignal Technology Co. Ltd.; Independent director of Shenzhen Universe
Group; he also served as independent director of 5th 6th and 8th BOD of the Company; independent director of
Shenzhen Shahe Industrial Co. Ltd; now he serves as independent director of Shenzhen SEG Co. Ltd. and
independent director of 9th BOD of the Company.Mr. Wu Shuping was born in 1953 a Master degree and senior economist. He has served successively as deputy
factory director of Shanghai Starter Motor Factory; deputy director of comprehensive division of General Office of
Shanghai Municipal People’s Government; Director and Deputy President of Asia Commerce Enterprises
Consultant Co. Ltd.and Independent Director of Shenzhen Agricultural Products Co. Ltd and Chengdu Hi-Tech
Investment Group. Now he serves as GM of Shanghai Baiyan Enterprise Management Consultant Co. Ltd and
Independent Director of 9th BOD of the Company.Mr. Chen Cansong: born in 1972 bachelor degree. Successive director politics and law committee of the district
party committee Shantou; assistant lawyer of Guangdong Xincheng Law firm; lawyer of Guangdong Ruite Law
firm; now he is a lawyer and partner of Guangdong Dena Law Firm; outside director of Shenzhen State-owned Duty
Free Commodities (Group) Co.Ltd. and independent director of 9th BOD of the Company.
Mr. Yan Zesong was born in 1970 a university background. He served as Director and GM of Shenzhen Shenbao
Huacheng Food Co. ltd. President and chairman of Shenbao Huacheng Science and Technology Co.Ltd
supervisor of 6th Supervisory Committee of the Company and Director of 7th and 8th BOD of the Company. He now
serves as Director and GM of 9th BOD of the Company
Ms. Li Yiyan was born in 1966 a master’s degree a senior human resources manager. She has served successively
as deputy director and director of the HR department of the Company supervisor of 5th and 6th supervisory
committee of the Company the Director and Secretary of 7th BOD and Secretary of the 8th BOD. Now she serves
as Director of 9th BOD Secretary of the Board and Deputy GM of the Company.
(ii) Supervisor
Ms. Lin Hong was born in 1965 senior accountant with master degree. She once was the accountant charger of
Shenzhen Native Product & Animal By-Products & Tea I/E Co. accountant charge of Planning and Financial
Department of Hesheng FUR& LEATHER CO. Ltd. deputy minister of Planning and Financial Department of
Shenzhen Foreign Trade Xinhua Enterprise Co. accountant and deputy minister and minister of Planning and
Financial Department of Agricultural Products and chairman of 7th and 8th supervisory committee of the Company.
Now she serves as chairman of 9th supervisory committee of the Company.Ms. Wang Huimin: master’s degree and a intermediate economist senior HR manager and has a lawyer’s
qualification was born in 1967. She successively served as a legal adviser for Shenzhen Construction Group Co.Ltd an economist chairman of the committee of female employees manager of HR department in Shenzhen
Construction Investment Holding Co. Ltd; director of HR department of Shenzhen Investment Holding Co. Ltd;
Deputy GM of SZPRD; Director Deputy party secretary and SCID of Shenzhen Cereals Group Co. Ltd. Now she
serves as SCID and Chairman of supervisory committee of Shenzhen Cereals Group Co. Ltd the supervisor of 9th
supervisory committee of the Company.Mr. Luo Longxin was born in 1970 a university background and a tea researcher was born in 1961. He successively
worked in Tea Research Institute Chinese Academy of Agricultural Sciences mainly engaged in research and
technology development in tea making tea bevarage concentrated tea juice and other tea deep processing served
as deputy director of the tea making office member of the academic committee and in 2018 he was hired by
National Science & Technology Award Office as an expert in evaluation of the National Science & Technology
Award. Worked as the director of production and quality department in Shenzhen Shenbao Huacheng Food Co.
Ltd. the supervisor of 8th supervisory committee of the Company. Now he serves as the chief technical office and
head of R&D center of the Company supervisor of 9th supervisory committee of the Company and Chairman of
the Shenzhen Shenbao Technology Center Co. Ltd. subordinate enterprise of the Company.(iii) Senior executive
Mr. Qian Xiaojun was born in 1972 a university background a food engineer. He served in tea research institute
of Chinese Academy of Agricultural Sciences mainly engaged in research of further processing of tea as well as
tea-making tea beverage and concentrated tea; He successively served as technical chief and GM of Shenzhen
Shenbao Huacheng Science and Technology Co. Ltd. Now he serves as Deputy GM of the Company and chairman
of Hangzhou Ju Fang Yong Holding Co. Ltd and Shenzhen Shenshenbao Investment Co. Ltd.Mr. Yao Xiaopeng was born in 1968 a university background a food safety division. He has successively served
as deputy GM and GM of Guangdong Shenbao Food Co. Ltd. Chairman of Shenbao Sanjing Food & Beverage
Development Co. Ltd and GM assistant of the Company. Now he serves as deputy GM of the Company and
chairman of Huizhou Shenbao Science & Technology Co. Ltd.Ms. Wang Zhiping was born in 1971 a university background an accountant and non-practicing CPA. She has
successively served as auditor senior auditor and department manager of Shenzhen Dahua CPA; director assistant
and director of accounting and financial department of the Company. Now she serves as CFO of the Company.Post-holding in shareholder’s unit
√ Applicable□Not applicable
Name Name of shareholder’s units Position
Start dated of
office term
End date of
office term
Weather receiving
remuneration from
shareholder’s units
Zhang
Guodong
Shenzhen Agricultural Products Co. Ltd
GM of the
HQ of
supplying
chain
management
Y
Explanation on
post-holding in
shareholder’s
unit
N/A
Post-holding in other unit
√ Applicable□Not applicable
Name Name of other units Position
Start dated of
office term
End date of office
term
Weather receiving
remuneration
from other units
Fan Zhiqing Shenzhen SEG Co. Ltd.
Independent
director
Y
Wu Shuping
Shanghai Baiyan Enterprise Management
Consultant Co. Ltd
GM Y
Chen Cansong Guangdong Dena Law Firm
Lawyer
partner
Y
Chen Cansong
Shenzhen State-owned Duty Free
Commodities (Group) Co.Ltd
Outside
Director
N
Explanation on
post-holding in
other unit
N/A
Punishment of securities regulatory authority in recent three years to the Company’s current and outgoing directors
supervisors and senior management during the reporting period
□ Applicable√Not applicable
IV. Remuneration for directors supervisors and senior executives
Decision-making procedures determination bases and actual payment of remunerations of directors supervisors
and senior management
(i) Basis and Decision-making Process for the Annual Reward of Company Directors Supervisors and Senior
Managers
During the reporting period according to the headquarter compensation plan and performance measures the
Company's board meeting remuneration and appraisal committee combined with the Company's annual business
situation and individual performance appraisal result and determined the directors supervisors and senior
management personnel salary. The subsidiary standard of independent directors is subject to the resolution by the
2012 Annual General Meeting and adjusted as RMB 100000 (tax included) per year for one person.
(ii) Total Compensation of Directors Supervisors and Senior Managers
At end of the period current directors supervisors and senior executives’ total remuneration obtained from the
Company at period-end amounting to 5917900 Yuan before tax for the year. The resigned directors supervisors
and senior executives obtained 509900 Yuan from the Company for the year during office term totally 6427800
Yuan obtained.Remuneration for directors supervisors and senior executives in reporting period
In 10 thousand Yuan
Name Title Sex Age
Post-holding
status
Total
remuneration
obtained from the
Company
Whether
remuneration
obtained from
related party of
the Company
Zheng Yuxi
Party Secretary
Chairman
M 57
Currently in
office
96.20 N
Zhang Guodong Director M 57
Currently in
office
0 Y
Wang Li Director M 58
Currently in
office
0 Y
Ni Yue Director F 45
Currently in
office
0 Y
Fan Zhiqing
Independent
director
M 70
Currently in
office
10 N
Wu Shuping
Independent
director
M 66
Currently in
office
10 N
Chen Cansong
Independent
director
M 47
Currently in
office
10 N
Yan Zesong Director、GM M 49
Currently in
office
74.49 N
Li Yiyan
Director、Deputy
GM、Secretaryof the Board
F 53
Currently in
office
103.67 N
Lin Hong
Chairman of
supervisory
committee
F 54
Currently in
office
56.84 N
Wang Huimin Supervisor F 52
Currently in
office
0 Y
Luo Longxin Staff supervisor M 58
Currently in
office
46.29 N
Qian Xiaojun Deputy GM M 47
Currently in
office
47.65 N
Yao Xiaopeng Deputy GM M 51
Currently in
office
63.32 N
Wang Zhiping CFO F 48
Currently in
office
73.33 N
Liu Zhengyu Director M 49 Office-leaving 0 Y
Huang Yu Director M 45 Office-leaving 0 Y
Li Xinjian Supervisor M 47 Office-leaving 0 Y
Li Fang Deputy GM F 45 Office-leaving 50.99 N
Total -- -- -- -- 642.78 --
Note: 1. The total amount of pre-tax remuneration received by the above directors supervisors and senior executives from the company
refers to the basic wages performance pay bonuses allowances subsidies employee benefits fee and other forms of total pre-tax
remuneration received from the company.
2. The above total amount of remuneration includes part of the delayed performance pay of 2017.
Delegated equity incentive for directors supervisors and senior executives in reporting period
□ Applicable√Not applicable
V. Particulars of workforce
1. Number of Employees Professional composition Education background
Employee in-post of the parent Company(people) 154
Employee in-post of main Subsidiaries (people) 942
The total number of current employees(people) 1096
The total number of current employees to receive pay (people) 1096
Retired employee’ s expenses borne by the parent Company and
main Subsidiaries(people)
1
Professional composition
Category of professional composition Numbers of professional composition (people)
Production personnel 429
Salesperson 134
Technicians 86
Financial personnel 99
Administrative personnel 348
Total 1096
Education background
Education Numbers (people)
Postgraduate or above 95
Undergraduate 337
3-years regular college graduate 250
Polytechnic school graduate 87
Senior middle school graduate or below 327
Total 1096
2. Remuneration Policy
During the reporting period employee wages was paid monthly according to salary management provisions set by
the Company and the performance-related pay was issued based on the actual situation of benefit and individual
performance assessment results at the year-end remuneration and benefit are connected as a whole.
3. Training Plan
According to the company’s overall strategic deployment and business planning combined with the company’s
actual business situation in order to strengthen the construction of learning organizations promote the
organizational performance improvement and continue to promote the enterprise technology innovation and model
innovation the company explored internal and external training resources in 2018 enriched training forms cultivate
employees’ innovative thinking and problem-solving skills and improve the comprehensive quality and abilities of
employees through the organic combination of special training personalized training “menu-style” training
individual guidance internal communication and other forms of training so as to reserve talent resources for the
company’s development.
In 2019 the company will strengthen the rule of law education further improve the legal knowledge of employees
and hold the “Legal Knowledge Enhancement Class” around the National Constitutional Amendment Supervision
Law Information Disclosure of Listed Companies and Enterprise Contract Law. At the same time according to the
needs of staff training through the close integration of training and actual business organize and participate in high-
quality special courses and promote employees to continuously improve their work ability so as to support the
effective implementation of the company’s strategies.
4. Labor outsourcing
□ Applicable√Not applicable
Section IX. Corporate governance
I. Brief introduction of corporate governance
During the reporting period the Company constantly improved the corporate governance structure improved the
quality of corporate governance and established a sound internal control system strictly in accordance with
corporate governance requirements of normative documents released by the “Company Law“ ”Securities Law
Corporate Governance Guidelines“ and ”Standardize Operational Guidelines to Main Board Listed Companies of
Shenzhen Stock Exchange. The Company continued to carry out the governance activities improved the standard
operation level and safeguarded the legitimate interests of the Company and investors.(i) Accountability among Shareholders’ General Meeting the Board of Directors and Supervisors were clear we
strictly implemented the rules from the "Articles of Association" during the reporting period as well as work
regulations and other basic management system to ensure the effective implementation of the internal control system.(ii) In reporting period governance mechanism formulated and revised by the Company are as:
The Special Proposal of Article of Association Revision has deliberated and approved in AGM 2017 held on 15
May 2018 found more in the Article of Association (May 2018) released on Juchao Website (www.cninfo.com.cn)
dated 16 May 2018.The Management System of Corporate Entrusted Finance has deliberated and approved in 17th session of 9th BOD
held on 8 June 2018 found more in the Management System of Corporate Entrusted Finance released on Juchao
Website (www.cninfo.com.cn) dated 11 June 2018.The Special Proposal of Article of Association Revision Rules of Procedure of the Board Revision and Rules of
Procedure of Supervisory Committee Revision have deliberated and approved in Third Extraordinary shareholders
meeting of 2018 held on 15 Nov. 2018 found more in the Article of Association (November 2018) Rules of
Procedure of the Board (November 2018) and Rules of Procedure of Supervisory Committee (November 2018)
released on Juchao Website (www.cninfo.com.cn) dated 6 November 218.The Special Proposal of Article of Association Revision has deliberated and approved in 24th session of 9th BOD
held on 28 December 2018 found more in the Article of Association (December 2018) released on Juchao Website
(www.cninfo.com.cn) dated 29 December 2018.The Company received no relevant documents with administrative regulation concerned from supervision
department in reporting period and has no particular about rectification within a time limit. From point of the Board
corporate governance of the Company shows no difference to requirement from relevant documents with actual
condition.Is there any difference between the actual condition of corporate governance and relevant regulations about
corporate governance for listed Company from CSRC?
□ Yes √ No
There are no differences between the actual condition of corporate governance and relevant regulations about
corporate governance for listed Company from CSRC.II. Independence of the Company in aspect of business personnel assets institute and finance
relative to its controlling shareholder
By the end of the reporting period Fude Capital is the actual controller of the Company with 63.79 percent shares
held. The Company in strict accordance with the governance rules of listed corporate and other relevant
provisions completely separates from the controlling shareholders in business finance personnel assets
organizations and has independent full business and self management ability.
1. Independent Business:
The business of the Company is independent from controlling shareholders and has complete business and self
management ability and is mainly engaged in Grain & oil trading processing Warehousing logistics service production and
sale of tea products food and beverage products. It develops business alone not depends on the shareholders and
their affiliated enterprises which has no competition with controlling shareholder and its subordinate enterprises.The controlling shareholder has no direct or indirect intervention in the Company business activities.
2. Independent Staff:
The Company has special organization to manage labor and payment and has independent perfect personnel system
and collective management system. General manager of the Company as well s deputy GM secretary of the Board
CFO and other senior executives are received remuneration from the Company and are not received remuneration
from shareholders’ unit and subordinate enterprises and holding the post except director or supervisor. All the
Company's directors supervisors are elected through legal procedures. The general manager deputy general
manager chief financial officer and the board secretary are appointed by the board meeting. The Company has
independent power of appointment and removal of personnel.
3. Independent Assets:
The Company has independent and integrity asset structure has independent production system auxiliary
production systems and supporting facilities and has independent purchase and sales system. There is no controlling
shareholder's non business occupation of money and the property.
4. Independent Organization:
The Company has set up a sound organizational structure system and operates independently; owns production and
business operation place independent from the controlling shareholders; there is no mixed operation between the
Company and controlling shareholders.
5. Financial Independent:
The Company with independent financial department has set up independent accounting system and financial
management system and makes financial decision independently. With independent bank accounts tax payment
the Company strictly follows the financial system and has independent operation and standardized management.There is no intervention into financial and accounting activity by controlling shareholder.III. Horizontal Competition
□ Applicable√Not applicable
IV. In the report period the Company held annual general meeting and extraordinary
shareholders’ general meeting
1. Annual General Meeting in the report period
Session of meeting Type
Ratio of
investor
participation
Date Date of disclosure Index of disclosure
Annual General
Meeting of 2017
AGM 0.19% 2018-05-15 2018-05-16
Disclosed at
www.cninfo.com.cn on No.
2018-44 " resolutions
Announcement to 2017
Annual General Meeting of
Shenzhen Shenbao Industrial
Co. Ltd. " on 16 May 2018
First extraordinary
general meeting of
2018
extraordinary
general meeting
4.78% 2018-06-27 2018-06-28
Disclosed at
www.cninfo.com.cn on No.
2018-57 " resolutions
Announcement to First
extraordinary general meeting
of 2018 " on 28 June 2018
Second
extraordinary
general meeting of
2018
extraordinary
general meeting
0.00% 2018-09-13 2018-09-14
Disclosed at
www.cninfo.com.cn on No.
2018-81 " resolutions
Announcement to Second
extraordinary general meeting
of 2018 " on 14 September
2018
Third extraordinary
general meeting of
2018
extraordinary
general meeting
0.06% 2018-11-15 2018-11-16
Disclosed at
www.cninfo.com.cn on No.
2018-97 " resolutions
Announcement to Third
extraordinary general meeting
of 2018 " on 16 November
2018
. Request for extraordinary general meeting by preferred stockholders whose voting rights restore
□ Applicable√Not applicable
V. Responsibility performance of independent directors
1. The attending of independent directors to Board meetings and general meeting
The attending of independent directors
Name of
independent
director
Times of
Board meeting
supposed to
attend in the
report period
Times of
Presence
Times of
attending by
communicatio
n
Times of
entrusted
presence
Times of
Absence
Absent the
Meeting for
the second
time in a row
(Y/N)
Times of
attending
shareholders’
meeting
Fan Zhiqing 10 10 0 0 0 N 0
Wu Shuping 10 4 6 0 0 N 1
Chen Cansong 10 10 0 0 0 N 1
Explanation of absent the Board Meeting for the second time in a row:
Nil
2. Objection for relevant events from independent directors
Independent directors come up with objection about Company’s relevant matters
□ Yes √ No
Independent directors has no objections for relevant events in reporting period
3. Other explanation about responsibility performance of independent directors
The opinions from independent directors have been adopted
√ Yes □ No
Explanation on advice that accepted/not accepted from independent directors
During the reporting period independent directors of the Company was in strict accordance with relevant laws from
the "Articles of Association" the "Company Law" "Guidance to Establishment of Independent Director System in
Listed Companies " and actively attended board meetings shareholders' meetings. We issued independent
professional opinion for important issues. And we sustained attention to the operating inspected and guided the
management work from time to time learned about internal control system implementation progress of the equity
investment project etc. and continue to enhance consciousness of performing duties according to law express
independent and impartial advice for investment outside related party transactions hiring auditors and other matters
occurred during the reporting period in time. Duties performance of independent directors has improved the
corporate governance structure and safeguarded the interests of the Company and its shareholders. Fromperformance of duties of Independent Directors please note from “2018 Annual Work Report of IndependentDirectors” detailed in www.cninfo.com.cn on disclosure.
VI. Performance of Duties by Specialized Committees under the Board Meeting in the
Reporting Period
1. Performance of Duties by the Auditing Committee
In the reporting period totally three meetings are held by auditing committee for annual report of the Company
Annual Report 2017 First Quarterly Report of 2018 semi-annual report 2018 the financial report of 3rd quarterly
report 2018 deliberation; and confirmed that the financial report satisfy requirement of Accounting rules and present
a fair and complete financial status operation results and cash flow of the Company; examined the construction
progress of internal control carried a professional opinions for the auditing institution appointed outside the
Company guarantee the Company finished auditing on schedule. Auditing committee of the Company earnestly
following the principle of diligence play a supervise role in full and protect the independency of the auditing.
2. Performance of Duties by the Remuneration and Appraisal Committee
During the reporting period the remuneration and appraisal committee has held one meeting to examine the 2017
annual performance factor according to the regulation of performance management measures for the headquarters
and inspected the 2017 annual salary for the Company's directors supervisors and senior managers at the same
time made confirmation for the operating performance indicators in 2018.
3. Performance of Duties by the Nomination Committee
During the reporting period the Nominations Commission of the Board of Directors convened a meeting which
reviewed the proposal on supplementing Mr. Wang Li and Ms. Ni Yue as the director of the Company and conductedexamination on their qualifications in accordance with the stipulations of the “Work Regulations on the Nominations
Commission of the Board of Directors of the Company”.
4. Performance of Duties by the Strategy Committee
During the reporting period the strategy committee of the Board held four meetings and deliberated and approved
the follow proposals as Shenzhen Shenbao Industrial Co. Ltd Issuing Shares to Purchase Assets and Plan of Related
Transaction The conditional Agreement on Share Issuance and Purchase of Assets signed by Fude Capital
Shenzhen Shenbao Industrial Co. Ltd Issuing Shares to Purchase Assets and Pre-Plan of Related Transaction and
Revoke the Shantou Branch of Shenzhen Shenbao Huacheng Science and Technology Co.Ltd etc.
5. Performance of Duties by the Information Disclosure Committee
During the reporting period the Information Disclosure Commission of the Board of Directors held three meetings
and reviewed the Company’s periodic reports of 2017 and the first quarter of 2018 the semi-annual of 2018 and thethird quarter of 2018 in accordance with the “Implementation Rules of Information Disclosure Commission of theCompany” and ensured that the information disclosure contents were true accurate and complete without false
records misleading statements or major omissions.VII. Works from Supervisory Committee
Whether the Company has risks or not in reporting period that found in supervisory activity from supervisory
committee
□ Yes √ No
VIII. Appraisal and incentive mechanism for senior executives
The personnel department of the Company is based on the Company's overall business performance and
achievement of management index the remuneration and appraisal committee under the board meeting of the
Company will carry on comprehensive evaluation in accordance with the headquarter performance management
method take it as the basis for salary adjustment and rewards of senior management personnel and then implement
after the approval of the board meeting and general meeting. The Company will further explore the effective
incentive mechanism to fully arouse the initiative and enthusiasm of management promoting the sustainable and
stable development of the Company.IX. Internal control
1. Details of major defects in IC appraisal report that found in reporting period
□ Yes √ No
2. Self-appraisal Report of Internal Control
Disclosure date of full internal control
evaluation report
2019-04-27
Disclosure index of full internal
control evaluation report
Juchao information website (www.cninfo.com.cn)
The ratio of the total assets of units
included in the scope of evaluation
accounting for the total assets on the
Company's consolidated financial
statements
50.31%
The ratio of the operating income of
units included in the scope of
evaluation accounting for the
operating income on the Company's
consolidated financial statements
4.69%
Defects Evaluation Standards
Category Financial Reports Non-financial Reports
Qualitative criteria
Major defects: Defect alone or together with
other defects in a timely manner cause
Qualitative evaluation criteria for
Identified internal control deficiencies
unpreventable or undetectable and
uncorrectable material misstatement in the
financial statements.The Company may indicate the presence of
significant deficiencies in internal control
over financial reporting if following
circumstances:
① The directors supervisors and senior
management fraud;
②Enterprise corrected mistake which has
been published in financial statements;
③ CPA found material misstatement in
current financial statements but internal
control during operation failed to find the
misstatements;
④Oversight of internal control by Corporate
Audit Committee and the internal audit is
invalid;
⑤ Particularly important or significant
deficiencies found during internal control has
not been rectified;
⑥The lack of business-critical system or
invalid system. Important defect: defect alone
or together with other defects in a timely
manner cause unpreventable or undetectable
and uncorrectable material misstatement in
the financial statements although not reach
and exceed the level of importance should
lead to management attention misstatements.If the defect found meet any of the following
it should be identified as an important defect
in the internal control of financial reports: ①
The current financial report has important
misstatement based on the above
identification the control activity fails to
identify the misstatement; ② Although the
misstatement hasn’t reached and exceeded the
importance level but in terms of nature it
should still cause the board of directors and
management to pay attention to. General
Defects: other internal defects do not pose a
significant or important defect control
deficiencies.in non-financial reporting are as
follows:
the Company may indicate the presence
of significant deficiencies related to
non-financial reporting internal control
if following circumstances:
①The lack of democratic decision-
making process such as the lack of
decision-making on major issues an
important appointment and dismissal of
cadres major investment decisions
large sums of money using the
decision-making process;
②Decision-making process is not
scientific such as major policy
mistakes resulting in significant
property damage to the Company;
③ Serious violations of national laws
and regulations;
④ Loss of key executives or loss of a
large number of key talent;
⑤Negative media news are frequent.Other cases are determined by the
degree of influence as an important
general defect or common defects.Quantitative standard
Qualitative criteria of financial reporting are
as follows:
General Defects:
reported wrongly <0.5% of total capital or
reported wrongly<0.5% of operating income;
Important flaw: 0.5% of total assets ≤ reported
wrongly <1% of total assets or 0.5% of
operating income≤ misstatements <1% of
revenue;
Major flaw: misstatement ≥ 1% of total assets
or misstatements ≥ 1% of revenue.Qualitative evaluation criteria for
Identified internal control deficiencies
in non-financial reporting are as
follows:
General defects: the amount of direct
property loss of 10 million (10 million)
and ~ 1.5 million Yuan by the provincial
(including provincial) government the
following penalties but the Company
disclosed in periodic reports on the
negative impact;
Important flaw: the amount of direct
property loss of 1.5 million Yuan
(including 1.5 million Yuan) ~ 3 million
Yuan and punished by the state
government but the Company disclosed
in periodic reports on the negative
impact;
Major flaw: the amount of direct
property loss of 3 million Yuan and
above and have been officially
disclosed outside the Company
disclosed in periodic reports and
adversely affected.
Amount of significant defects in
financial reports
0
Amount of significant defects in non-
financial reports
0
Amount of important defects in
financial reports
0
Amount of important defects in non-
financial reports
0
X. Audit report of internal control
√ Applicable□Not applicable
Deliberations in Internal Control Audit Report
Dahua Certified Public Accountants (special general partnership) believes Shenshenbao Company was in accordance with the
"basic norms of internal control" and the relevant provisions and maintained effective internal control of financial reporting in all
material respects on 31 Dec 2018
Disclosure details of audit report of internal control Disclosed
Disclosure date of audit report of internal control (full-
text)
2019-04-27
Index of audit report of internal control (full-text) Juchao Information Website (www.cninfo.com.cn)
Opinion type of auditing report of IC Standard unqualified
Whether the non-financial report had major defects No
Whether modified audit opinions carried out for the audit report of internal control from CPA or not
□ Yes √ No
Whether audit report of internal control issued by CPA is in agreement with self-evaluation report issued by the Board
√ Yes □ No
Section X Corporate Bond
Whether the Company has a corporation bonds that issuance publicly and listed on stock exchange and without due on the date when
annual report approved for released or fail to cash in full on due
□Yes √ No
ection XI. Financial Report
I. Audit Report
Type of audit opinion Standard unqualified opinion
Signing date of audit report 2019-04-25
Name of audit institute
Dahua Certified Public Accountants (Special General
Partnership)
Document serial of audit report [2019]No.: 005107
Name of the CPA Chen Baohua Zhou Lingzhi
Text of auditing report
Auditor’s Report
Da Hua Shen Zi [2019] No.005107
To all shareholders of SHENZHEN CEREALS HOLDINGS CO. LTD.:
I. Auditing opinions
We have audited the financial statement under the name of SHENZHEN CEREALS HOLDINGS CO. LTD
(original named Shenzhen Shenbao Industrial Co. Ltd. hereinafter referred to as SZCH Company) including the
consolidated and parent Company’s balance sheet of 31 December 2018 and profit statement and cash flow
statement and statement on changes of shareholders’ equity for the year ended and notes to the financial statements
for the year ended.In our opinion the Company’s financial statements have been prepared in accordance with the Accounting
Standards for Business Enterprises and they fairly present the financial status of the Company and of its parent
company as of 31 December 2018 and its operation results and cash flows for the year ended.II. Basis of opinion
We conducted our audit in accordance with the Auditing Standards for Certified Public Accountants of China. Ourresponsibilities under those standards are further described in the “Auditor’s Responsibilities for the Audit of the
Financial Statements” section of the auditor’s report. We are independent of the Company in accordance with the
Certified Public Accountants of China’s Code of Ethics for Professional Accountants and we have fulfilled our
other ethical responsibilities in accordance with the Code. We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our opinion.III. Key audit matters
Key audit matters are those matters that in our professional judgment were of most significance in our audit of the
financial statements of the current period. These matters were addressed in the context of our audit of the financial
statements as a whole and in forming our opinion thereon and we do not provide a separate opinion on these
matters.We identified the following key audit issues that need to be communicated in the audit report.Inventory and inventory falling price reserves; and
Revenue confirmation.(i) Inventory and inventory falling price reserves
Matter description
Please refer to Note IV. (xii) and Note VI Annotation 6. to the consolidated financial statements for the accounting
policies and carrying amounts of the inventory and inventory falling price reserves.
As of December 31 2018 the inventory book balance presented on the consolidated financial statements of SZCH
Company was 2926908330.62 yuan and the amount of inventory falling price reserves was 127288778.48 yuan.
The book value of inventory is 2811802600.19 yuan accounting for 43.47% of total assets. Inventory is measured
at the lower one between the cost and the net realizable value due to the large amount of money of inventory the
management needed to make significant judgments when determining the decrease in value of inventory including
the consideration of government reserve as grain & oil food and vegetable oil included that affected by futures
market these important judgments have a significant impact on the valuation of inventory and provision for
inventory depreciation at period-end; therefore we determined the inventory and inventory falling price reserves as
key audit matters.
2. Audit response
The main audit procedures we implemented for the inventory and inventory falling price reserves of SZCH
Company include:
(1) Understood evaluated and tested the internal control design and implementation related to inventory falling
price reserves of SZCH Company so as to evaluate whether the internal control of inventory falling price reserves
was compliant and effective;
(2) We performed the inventory monitoring procedures for inventory and checked the quantity the validity period
of products quality of the inventory at end of the period etc.;
(3) Acquired the calculation table of inventory falling price reserve implemented the inventory impairment test
procedure checked whether it was implemented according to the relevant accounting policies and the changes of
inventory falling price in the previous year’s provision during the current period and analyzed whether provision
for inventory falling price reserves was sufficient.
(4) We obtained the year-end inventory age list of SZCH Company’s inventory conducted an analytical review of
the inventory with long inventory age combine with the validity of products and analyzed the need for separate
provision for inventory depreciation for long-term stocks.
(5) Review whether the estimated selling price of the inventory in the inventory depreciation reserve calculation
table of Shenzhen Cereals Holdings Co. Ltd. is reasonable through the implementation of on-site visits and online
public inquiry of the market transaction price etc.: For the tea products we take some samples to visit and inquire;
For grain and oil products we publicly inquire the about the trading prices of grain and oil products by getting to
know the trend of grain and oil products futures market and through authoritative websites in the industries such as
“China Grains Network” “www.cofeed.com” and “JCI”;
(6) Understand and inquire about the main production technology process and cost accounting methods of the
product and check whether the cost accounting method matches the production technology process flow;
(7) We assessed the accounting treatment and disclosure of the management to inventory falling price reserves on
December 31 2018.
Based on the executed audit procedures we hold the opinion that the relevant judgments and estimates made by
SZCH Company’s management on the inventory falling price reserves were reasonable.
(ii) Revenue confirmation
1. Matter description
Please refer to Note IV. (xxv) and Note VI. Annotation 35 to the consolidated financial statements for the accounting
policies and carrying amounts of the inventory and inventory falling price reserves.
SZCH Company achieved operating income of 10758782838.14 yuan in 2018 of which the income grain and oil
business amounted to 10303178984.95 Yuan accounting for 95.77 percent of operating income. The income from
grain and oil business has a significant impact on the financial statement and it is one of the key index of
performance of SZCH which has a special risks in manipulation for achieving the predicted target therefore the
identify of operating income will be listed as the key auditing event.
2. Audit response
The main audit procedures we implemented for the inventory and inventory falling price reserves of SZCH
Company include:
(1) Understood evaluated and tested the internal control design and implementation related to revenue recognition
of SZCH Company so as to evaluate whether the internal control of revenue recognition was compliant and effective;
(2) Selected business contract samples and conduct interviews with management to assess whether SZCH
Company’s revenue recognition policies met the requirements of relevant accounting standards;
(3) Implemented analytical procedures on operating income and operating costs analyzed abnormal changes in
gross profit margin and reviewed the rationality of revenue;
(4) We adopted the sampling method and executed the following procedures for the operating revenue confirmed
by SZCH Company:
① For the sales of domestic customers select the important customers and check sales contracts shipping
documents receipt/shipment transfer documents accounting vouchers current return fund flow receipts
reconciliation letters etc. and combine with the implementation confirmation procedures of accounts receivable;
② For the export sales check sales contracts customs declaration bill of lading accounting vouchers current
return funds flow receipts etc. at the same time personally log in the customs declaration system and foreign
exchange management system to obtain the import and export customs declaration data of Shenzhen Cereals
Holdings Co. Ltd. in two systems and check with the accounting information and combine with the implementation
confirmation procedures of accounts receivable;
③Analyzed and selected important customer samples and affirmed whether there was related relationship between
customers and SZCH Company through verification procedures such as network and business information and
management interviews;
④ For the income from grain and oil storage services we review the accuracy of the income from the grain and oil
storage services of Shenzhen Cereals Holdings Co. Ltd. based on various storage fee calculation standards
stipulated by the “Operational Procedures for Government Grain Storage All-in Cost of Shenzhen” and “OperationalProcedures for Edible Vegetable Oil Government Reserve All-in Cost of Shenzhen” and the grain and oil reserves
of Shenzhen Cereals Holdings Co. Ltd. the number of rotations and other actual business data.⑤Performed cut-off tests to check the delivery notes receipt forms/transfer of goods right acceptance statements
export invoices and other supporting documents of sales revenue and transaction before and after the balance sheet
date so as to assess whether the sales revenue was confirmed during the appropriate period.
(5) Select some customers to implement the on-site visit procedure understand the specific mode and authenticity
of the business and evaluate whether the income recognition policy of Shenzhen Cereals Holdings Co. Ltd. meets
the requirements of relevant accounting standards;
(6) Assessed whether the financial statement disclosure of the management to revenue was appropriate.
Based on the executed audit procedures we hold the opinion that the reporting and disclosure made by SZCH
Company’s management on the operating revenue were appropriate.
IV. Other information
The management of SZCH Company is responsible for other information which includes the information covered
in the Company’s 2018 annual report excluding the financial statement and our audit report.The audit opinion issued by us for the financial statement has not covered other information for which we do not
issue any form of assurance opinions.Considering our audit on financial statements we are liable to read other information during which we shall
consider whether other information differs materially from the financial statements or that we understand during
our audit or whether there is any material misstatement.
Based on the works executed by us we should report the fact if we find any material misstatement in other
information. In this regards we have nothing to report.V. Responsibilities of management and those charged with governance for the financial statements
The management of SZCH Company is responsible for the preparation of the financial statements in accordance
with the Accounting Standards for Enterprise to secure a fair presentation and for the design establishment and
maintenance of the internal control necessary to enable the preparation of financial statements that are free from
material misstatement whether due to fraud or error.In preparing the financial statements the management is responsible for assessing the Company’s ability to continue
as a going concern (if applicable) disclosing matters related to going concern and using the going concern
assumption unless the management either intends to liquidate the Company or to cease operations or has no realistic
alternative but to do so.Those charged with governance are responsible for overseeing the Company’s financial reporting process.VI. Responsibilities of the auditor for the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from
material misstatement whether due to fraud or error and to issue an audit report that includes our audit opinion.Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with
the CAS will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and
are considered material if individually or in the aggregate they could reasonably be expected to influence the
economic decisions of users taken on the basis of the financial statements.
As part of an audit in accordance with the CAS we exercise professional judgment and maintain professional
skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the financial statements whether due to fraud or error
design and perform audit procedures responsive to those risks and obtain audit evidence that is sufficient and
appropriate to provide a basis for audit opinion. The risk of not detecting a material misstatement resulting from
fraud is higher than for one resulting from error as fraud may involve collusion forgery intentional omissions
misrepresentations or the override of internal control.Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related
disclosures made by the management.
Conclude on the appropriateness of the management’s use of the going concern assumption and based on the audit
evidence obtained whether a material uncertainty exists related to events or conditions that may cast significant
doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists
we are required by the CAS to draw users’ attention in audit report to the related disclosures in the financial
statements or if such disclosures are inadequate to modify audit opinion. Our conclusions are based on the
information obtained up to the date of audit report. However future events or conditions may cause the Company
to cease to continue as a going concern.
Evaluate the overall presentation structure and content of the financial statements including the disclosures and
whether the financial statements represent the underlying transactions and events in a manner that achieves fair
presentation.Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities
within the Company to express audit opinion on the financial statements. We are responsible for the direction
supervision and performance of the group audit. We remain solely responsible for audit opinion.We communicate with those charged with governance regarding among other matters the planned scope and timing
of the audit and significant audit findings including any significant deficiencies in internal control that we identify
during our audit.We also provide those charged with governance with a statement that we have complied with relevant ethical
requirements regarding independence and communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence and relevant countermeasures (if applicable).
From the matters communicated with those charged with governance we determine those matters that were of most
significance in the audit of the financial statements of the current period and are therefore the key audit matters. We
describe these matters in the auditor’s report unless law or regulation precludes public disclosure about the matter
or when in extremely rare circumstances we determine that a matter should not be communicated in the auditor’s
report because of the adverse consequences of doing so would reasonably be expected to outweigh the public interest
benefits of such communication.Dahua Certified Public Accountants (Special General
Partnership)
Chinese CPA: Chen Baohua
Beijing · China
(Engagement partner)
Chinese CPA: Zhou Lingzhi
25 April 2019
II. Financial Statement
Statement in Financial Notes are carried in RMB/CNY
1. Consolidated balance sheet
Prepared by SHENZHEN CEREALS HOLDINGS CO. LTD.In RMB
Item Balance at period-end Balance at period-begin
Current assets:
Monetary funds 631638339.68 544440739.45
Settlement provisions
Capital lent
Financial assets measured by fair
value and with variation reckoned into
current gains/losses
1124927.96 1599668.20
Derivative financial assets
Note receivable and account
receivable
474674521.68 194386742.63
Including: Note receivable 1027635.04 658942.50
Account receivable 473646886.64 193727800.13
Accounts paid in advance 83696870.07 45027535.78
Insurance receivable
Reinsurance receivables
Contract reserve of reinsurance
receivable
Other account receivable 33803428.45 45626470.91
Including: Interest receivable 561500.00
Dividend receivable
Buying back the sale of financial
assets
Inventories 2811802600.19 2938467812.31
Assets held for sale
Non-current asset due within one
year
Other current assets 254493764.04 173092549.64
Total current assets 4291234452.07 3942641518.92
Non-current assets:
Loans and payments on behalf
Finance asset available for sales 57500.00 57500.00
Held-to-maturity investment
Long-term account receivable
Long-term equity investment 70999666.81 35755171.55
Investment real estate 282622184.92 319023095.62
Fixed assets 993136743.51 1052866458.21
Construction in progress 186586135.06 70735978.49
Productive biological asset 407078.92 416771.28
Oil and gas asset
Intangible assets 569997392.08 406996071.53
Expense on Research and
Development
Goodwill
Long-term expenses to be
apportioned
21799899.80 27816292.79
Deferred income tax asset 50174590.98 53734757.40
Other non-current asset 1936149.72 984108.52
Total non-current asset 2177717341.80 1968386205.39
Total assets 6468951793.87 5911027724.31
Current liabilities:
Short-term loans 91600000.00 169800000.00
Loan from central bank
Absorbing deposit and interbank
deposit
Capital borrowed
Financial liability measured by fair
value and with variation reckoned into
current gains/losses
Derivative financial liability
Note payable and account payable 472738283.80 558480197.44
Accounts received in advance 205428594.16 178385275.20
Selling financial asset of repurchase
Commission charge and
commission payable
Wage payable 135709423.52 118146310.62
Taxes payable 24969718.58 19396227.75
Other account payable 280689548.29 307932958.30
Including: Interest payable 1571297.90
Dividend payable 2909182.74 2909182.74
Reinsurance payable
Insurance contract reserve
Security trading of agency
Security sales of agency
Liability held for sale
Non-current liabilities due within
one year
55090793.79 40642777.63
Other current liabilities 219151968.63 219151968.63
Total current liabilities 1485378330.77 1611935715.57
Non-current liabilities:
Long-term loans 516687791.66 195647403.88
Bonds payable
Including: preferred stock
Perpetual capital
securities
Long-term account payable 15690202.08 15626357.76
Long-term wages payable
Accrual liability
Deferred income 100608203.01 101474523.26
Deferred income tax liabilities 12988434.77 13520836.95
Other non-current liabilities
Total non-current liabilities 645974631.52 326269121.85
Total liabilities 2131352962.29 1938204837.42
Owner’s equity:
Share capital 1152535254.00 496782303.00
Other equity instrument
Including: preferred stock
Perpetual capital
securities
Capital public reserve 1422892729.36 2063164702.12
Less: Inventory shares
Other comprehensive income
Reasonable reserve 154.21 70395.63
Surplus public reserve 327140910.28 327140910.28
Provision of general risk
Retained profit 1269933487.26 961602454.82
Total owner’s equity attributable to
parent company
4172502535.11 3848760765.85
Minority interests 165096296.47 124062121.04
Total owner’s equity 4337598831.58 3972822886.89
Total liabilities and owner’s equity 6468951793.87 5911027724.31
Legal Representative: Zhu Junming
Person in charge of accounting works: Ye Qingyun
Person in charge of accounting institute: Wen Jieyu
2. Balance Sheet of Parent Company
In RMB
Item Balance at period-end Balance at period-begin
Current assets:
Monetary funds 168900586.84 239662344.24
Financial assets measured by fair
value and with variation reckoned into
current gains/losses
1124927.96 1599668.20
Derivative financial assets
Note receivable and account
receivable
42441119.07 53950930.37
Including: Note receivable
Account receivable 42441119.07 53950930.37
Accounts paid in advance 2000.00
Other account receivable 159677969.59 163404561.75
Including: Interest receivable
Dividend receivable
Inventories 8806338.26 4963517.93
Assets held for sale
Non-current asset due within one
year
Other current assets 50068745.74
Total current assets 431019687.46 463583022.49
Non-current assets:
Finance asset available for sales
Held-to-maturity investment
Long-term account receivable
Long-term equity investment 4212554063.36 921506982.37
Investment real estate 17929684.70 18401275.03
Fixed assets 31417912.54 32560534.94
Construction in progress
Productive biological asset 407078.92 416771.28
Oil and gas asset
Intangible assets 6663692.30 7264135.59
Expense on Research and
Development
Goodwill
Long-term expenses to be
apportioned
409621.50 623337.06
Deferred income tax asset 5630538.80 3395295.39
Other non-current asset
Total non-current asset 4275012592.12 984168331.66
Total assets 4706032279.58 1447751354.15
Current liabilities:
Short-term loans 10000000.00
Financial liability measured by fair
value and with variation reckoned into
current gains/losses
Derivative financial liability
Note payable and account payable 73705646.54 65683781.46
Accounts received in advance 124945.74 194269.96
Wage payable 6448561.16 6577772.01
Taxes payable 2702655.24 2832009.17
Other account payable 232109084.76 228533713.45
Including: Interest payable
Dividend payable
Liability held for sale
Non-current liabilities due within 1
year
Other current liabilities
Total current liabilities 315090893.44 313821546.05
Non-current liabilities:
Long-term loans
Bonds payable
Including: preferred stock
Perpetual capital securities
Long-term account payable
Long-term wages payable
Accrual liability
Deferred income 46129.96 47239.24
Deferred income tax liabilities 10965.46 129650.53
Other non-current liabilities
Total non-current liabilities 57095.42 176889.77
Total liabilities 315147988.86 313998435.82
Owner’s equity:
Share capital 1152535254.00 496782303.00
Other equity instrument
Including: preferred stock
Perpetual capital securities
Capital public reserve 3018106568.27 382444482.45
Less: Inventory shares
Other comprehensive income
Reasonable reserve
Surplus public reserve 54736482.14 54736482.14
Retained profit 165505986.31 199789650.74
Total owner’s equity 4390884290.72 1133752918.33
Total liabilities and owner’s equity 4706032279.58 1447751354.15
3. Consolidated Profit Statement
In RMB
Item Current period Last period
I. Total operating income 10758782838.14 10793693156.79
Including: Operating income 10758782838.14 10793693156.79
Interest income
Insurance gained
Commission charge and
commission income
II. Total operating cost 10431315508.14 10442404669.95
Including: Operating cost 9693634274.21 9847347198.65
Interest expense
Commission charge and
commission expense
Cash surrender value
Net amount of expense of
compensation
Net amount of withdrawal of
insurance contract reserve
Bonus expense of guarantee slip
Reinsurance expense
Tax and extras 15369523.52 15044134.96
Sales expense 255021072.54 275025028.88
Administrative expense 246543836.47 193136022.27
R&D expense 10979464.64 9827707.76
Financial expense 10131313.25 -3335527.31
Including: Interest
expenses
20410885.62 8569062.23
Interest income 8364388.05 9080593.99
Losses of devaluation of
asset
199636023.51 105360104.74
Add: other income 10901858.13 5371651.13
Investment income (Loss is
listed with “-”)
1724353.15 3015274.81
Including: Investment
income on affiliated company and
joint venture
-1755504.74 -490760.14
Income from change of fair
value (Loss is listed with “-”)
-474740.24 -1651270.40
Exchange income (Loss is
listed with “-”)
Income from assets
disposal (Loss is listed with “-”)
1601802.27 -22935.33
III. Operating profit (Loss is listed
with “-”)
341220603.31 358001207.05
Add: Non-operating income 1390434.84 11382742.99
Less: Non-operating expense 3266448.43 7681898.18
IV. Total Profit (Loss is listed with
“-”)
339344589.72 361702051.86
Less: Income tax expense 18488865.34 10826403.68
V. Net profit (Net loss is listed with
“-”)
320855724.38 350875648.18
(i) net profit from continuous
operation (Net loss is listed with “-”)
320855724.38 350875648.18
(ii) net profit from discontinued
operation (Net loss is listed with “-”)
Net profit attributable to owner’s
of parent company
308331032.44 359174263.44
Minority shareholders’ gains and
losses
12524691.94 -8298615.26
VI. Net after-tax of other
comprehensive income
Net after-tax of other
comprehensive income attributable to
owners of parent company
(i) Other comprehensive income
items which will not be reclassified
subsequently to gain/loss
1.Re-measurement of the
change of defined benefit plan
2.Other comprehensive
income unable transfer to gain/loss
under equity method
(II) Other comprehensive
income items which will be
reclassified subsequently to profit or
loss
1.Other comprehensive
income able to transfer to gain/loss
under equity method
2.Gains or losses arising
from changes in fair value of
available-for-sale financial assets
3.Gains or losses arising
from reclassification of held-to-
maturity investment as available-for-
sale financial assets
4.The effect hedging
portion of gains or losses arising from
cash flow hedging instruments
5.Translation differences
arising on translation of foreign
currency financial statements
6. Other
Net after-tax of other
comprehensive income attributable to
minority shareholders
VII. Total comprehensive income 320855724.38 350875648.18
Total comprehensive income
attributable to owners of parent
Company
308331032.44 359174263.44
Total comprehensive income
attributable to minority shareholders
12524691.94 -8298615.26
VIII. Earnings per share:
(i) Basic earnings per share 0.2675 0.3116
(ii) Diluted earnings per share 0.2675 0.3116
As for the enterprise combined under the same control net profit of 374880023.05 Yuan achieved by the merged party before
combination while 412128576.37 Yuan achieved last period.Legal Representative: Zhu Junming
Person in charge of accounting works: Ye Qingyun
Person in charge of accounting institute: Wen Jieyu
4. Profit Statement of Parent Company
In RMB
Item Current period Last period
I. Operation income 165407623.24 163863447.98
Less: Operating cost 156886817.06 154883304.80
Tax and extras 602255.26 458784.42
Sales expense 4021042.93 4003107.93
Administrative expense 35236050.22 24115186.64
R&D expense
Financial expense -2863136.69 -2224430.38
Including: Interest
expenses
-490845.99 222398.34
Interest income 2208205.46 2622809.23
Losses of devaluation of
asset
8940973.64 425880.76
Add: other income 201109.28 201109.28
Investment income (Loss is
listed with “-”)
1035169.17 2399716.48
Including: Investment
income on affiliated company and
joint venture
-367955.83 -306318.47
Income from change of fair
value (Loss is listed with “-”)
-474740.24 -1651270.40
Income from assets
disposal (Loss is listed with “-”)
-4685.34 12532.09
II. Operating profit (Loss is listed
with “-”)
-36659526.31 -16836298.74
Add: Non-operating income 21985.04 113065.05
Less: Non-operating expense 51.64 10261.85
III. Total Profit (Loss is listed with
“-”)
-36637592.91 -16733495.54
Less: Income tax expense -2353928.48 -519662.78
IV. Net profit (Net loss is listed with
“-”)
-34283664.43 -16213832.76
(i) net profit from continuous
operation (Net loss is listed with “-”)
-34283664.43 -16213832.76
(ii) net profit from discontinued
operation (Net loss is listed with “-”)
V. Net after-tax of other
comprehensive income
(i) Other comprehensive income
items which will not be reclassified
subsequently to gain/loss
1.Re-measurement of the
change of defined benefit plan
2.Other comprehensive
income unable transfer to gain/loss
under equity method
(iii) Other comprehensive
income items which will be
reclassified subsequently to
profit or loss
1.Other comprehensive
income able to transfer to gain/loss
under equity method
2.Gains or losses arising
from changes in fair value of
available-for-sale financial assets
3.Gains or losses arising
from reclassification of held-to-
maturity investment as available-for-
sale financial assets
4.The effect hedging
portion of gains or losses arising from
cash flow hedging instruments
5.Translation differences
arising on translation of foreign
currency financial statements
6. Other
VI. Total comprehensive income -34283664.43 -16213832.76
VII. Earnings per share:
(i) Basic earnings per share
(ii) Diluted earnings per share
5. Consolidated Cash Flow Statement
In RMB
Item Current period Last period
I. Cash flows arising from operating
activities:
Cash received from selling
commodities and providing labor
services
10864668383.48 11281130280.47
Net increase of customer
deposit and interbank deposit
Net increase of loan from central
bank
Net increase of capital borrowed
from other financial institution
Cash received from original
insurance contract fee
Net cash received from reinsurance
business
Net increase of insured savings
and investment
Net increase of amount from
disposal financial assets that
measured by fair value and with
variation reckoned into current
gains/losses
Cash received from interest
commission charge and commission
Net increase of capital borrowed
Net increase of returned business
capital
Write-back of tax received 2149482.32 653832.01
Other cash received concerning
operating activities
149070552.32 189283484.98
Subtotal of cash inflow arising from
operating activities
11015888418.12 11471067597.46
Cash paid for purchasing
commodities and receiving labor
service
10062803459.79 10821296678.67
Net increase of customer loans
and advances
Net increase of deposits in
central bank and interbank
Cash paid for original insurance
contract compensation
Cash paid for interest
commission charge and commission
Cash paid for bonus of guarantee
slip
Cash paid to/for staff and
workers
266944869.84 234102630.87
Taxes paid 76069566.39 98489346.34
Other cash paid concerning
operating activities
310966886.52 300120249.70
Subtotal of cash outflow arising from
operating activities
10716784782.54 11454008905.58
Net cash flows arising from operating
activities
299103635.58 17058691.88
II. Cash flows arising from investing
activities:
Cash received from recovering
investment
190000000.00 339350000.00
Cash received from investment
income
3029857.89 3014946.35
Net cash received from disposal
of fixed intangible and other long-
term assets
2130835.56 3037636.88
Net cash received from disposal
of subsidiaries and other units
800000.00
Other cash received concerning
investing activities
450000.00
Subtotal of cash inflow from
investing activities
195610693.45 346202583.23
Cash paid for purchasing fixed
intangible and other long-term assets
382839107.07 202207266.94
Cash paid for investment 287000000.00 437245000.00
Net increase of mortgaged
loans
Net cash received from
subsidiaries and other units obtained
Other cash paid concerning
investing activities
Subtotal of cash outflow from
investing activities
669839107.07 639452266.94
Net cash flows arising from investing
activities
-474228413.62 -293249683.71
III. Cash flows arising from financing
activities
Cash received from absorbing
investment
24500000.00 49640000.00
Including: Cash received from
absorbing minority shareholders’
investment by subsidiaries
24500000.00 49640000.00
Cash received from loans 537740181.56 279456993.25
Cash received from issuing
bonds
Other cash received concerning
financing activities
10000000.00
Subtotal of cash inflow from
financing activities
562240181.56 339096993.25
Cash paid for settling debts 280451777.62 177321004.68
Cash paid for dividend and
profit distributing or interest paying
21982183.52 101543094.66
Including: Dividend and profit
of minority shareholder paid by
subsidiaries
Other cash paid concerning 3897916.29
financing activities
Subtotal of cash outflow from
financing activities
302433961.14 282762015.63
Net cash flows arising from financing
activities
259806220.42 56334977.62
IV. Influence on cash and cash
equivalents due to fluctuation in
exchange rate
2516157.85 4719173.14
V. Net increase of cash and cash
equivalents
87197600.23 -215136841.07
Add: Balance of cash and cash
equivalents at the period -begin
544440739.45 759577580.52
VI. Balance of cash and cash
equivalents at the period -end
631638339.68 544440739.45
6. Cash Flow Statement of Parent Company
In RMB
Item Current period Last period
I. Cash flows arising from operating
activities:
Cash received from selling
commodities and providing labor
services
203489969.79 178586945.42
Write-back of tax received 1607071.98 433663.93
Other cash received concerning
operating activities
25144907.85 46894665.69
Subtotal of cash inflow arising from
operating activities
230241949.62 225915275.04
Cash paid for purchasing
commodities and receiving labor
service
179055497.17 158845824.76
Cash paid to/for staff and
workers
20901002.07 21540904.44
Taxes paid 1852958.66 16886190.92
Other cash paid concerning
operating activities
40674668.54 82836968.40
Subtotal of cash outflow arising from
operating activities
242484126.44 280109888.52
Net cash flows arising from operating
activities
-12242176.82 -54194613.48
II. Cash flows arising from investing
activities:
Cash received from recovering
investment
339350000.00
Cash received from investment
income
953125.00 3014946.35
Net cash received from disposal
of fixed intangible and other long-
term assets
3026.17 31000.00
Net cash received from disposal
of subsidiaries and other units
Other cash received concerning
investing activities
90450000.00
Subtotal of cash inflow from
investing activities
91406151.17 342395946.35
Cash paid for purchasing fixed
intangible and other long-term assets
18200.00 260849.80
Cash paid for investment 335500000.00
Net cash received from
subsidiaries and other units obtained
Other cash paid concerning
investing activities
140000000.00
Subtotal of cash outflow from
investing activities
140018200.00 335760849.80
Net cash flows arising from investing
activities
-48612048.83 6635096.55
III. Cash flows arising from financing
activities
Cash received from absorbing
investment
Cash received from loans 10000000.00
Cash received from issuing
bonds
Other cash received concerning
financing activities
Subtotal of cash inflow from 10000000.00
financing activities
Cash paid for settling debts 10000000.00 5000000.00
Cash paid for dividend and
profit distributing or interest paying
28710.00 23045545.47
Other cash paid concerning
financing activities
97916.29
Subtotal of cash outflow from
financing activities
10028710.00 28143461.76
Net cash flows arising from financing
activities
-10028710.00 -18143461.76
IV. Influence on cash and cash
equivalents due to fluctuation in
exchange rate
121178.25 -112531.04
V. Net increase of cash and cash
equivalents
-70761757.40 -65815509.73
Add: Balance of cash and cash
equivalents at the period -begin
239662344.24 305477853.97
VI. Balance of cash and cash
equivalents at the period -end
168900586.84 239662344.24
7. Statement of Changes in Owners’ Equity (Consolidated)
Current period
In RMB
Item
Current period
Owners’ equity attributable to parent company
Mino
rity
intere
sts
Total
owne
r’s
equit
y
Shar
e
capi
tal
Other equity
instrument
Capit
al
publi
c
reserv
e
Less:
Inven
tory
share
s
Other
comp
rehen
sive
inco
me
Reaso
nable
reserv
e
Surpl
us
publi
c
reserv
e
Provi
sion
of
gener
al risk
Retai
ned
profit
Pref
erre
d
stoc
k
Per
petu
al
capi
tal
sec
uriti
es
Oth
er
I. Balance at the
end of the last
year
496
782
303.
00
2063
164
702.1
2
7039
5.63
3271
4091
0.28
9616
0245
4.82
1240
6212
1.04
3972
822
886.8
9
Add:
Changes of
accounting
policy
Error
correction of the
last period
Enterprise
combined under
the same control
Other
II. Balance at
the beginning of
this year
496
782
303.
00
2063
164
702.1
2
7039
5.63
3271
4091
0.28
9616
0245
4.82
1240
6212
1.04
3972
822
886.8
9
III. Increase/
Decrease in this
year (Decrease
is listed with
“-”)
655
752
951.
00
-
6402
7197
2.76
-
7024
1.42
3083
3103
2.44
4103
4175
.43
3647
7594
4.69
(i) Total
comprehensive
income
3083
3103
2.44
1252
4691
.94
3208
5572
4.38
(ii) Owners’
devoted and
decreased
capital
655
752
951.
00
-
6402
7197
2.76
2850
9483
.49
4399
0461
.73
1．Common
shares invested
by owners
655
752
951.
00
5219
793
489.9
6
2450
0000
.00
5900
046
440.9
6
2．Capital
invested by
holders of other
equity
instruments
3．Amount
reckoned into
owners equity
with share-based
payment
4．Other
-
5860
065
462.7
2
4009
483.
49
-
5856
055
979.2
3
(III) Profit
distribution
1．Withdrawal
of surplus
reserves
2．Withdrawal
of general risk
provisions
3．Distribution
for owners (or
shareholders)
4．Other
(IV) Carrying
forward internal
owners’ equity
1. Capital
reserves
conversed to
capital (share
capital)
2. Surplus
reserves
conversed to
capital (share
capital)
3. Remedying
loss with surplus
reserve
4．Change
amount of
defined benefit
plans that carry
forward retained
earnings
5．Other
(v) Reasonable
reserve
-
7024
1.42
-
7024
1.42
1. Withdrawal in
the report period
8467
41.24
8467
41.24
2. Usage in the
report period
-
9169
82.66
-
9169
82.66
(vi) Other
IV. Balance at
the end of the
report period
115
253
525
4.00
1422
892
729.3
6
154.2
1
3271
4091
0.28
1269
933
487.2
6
1650
9629
6.47
4337
598
831.5
8
Last period
In RMB
Item
Last period
Owners’ equity attributable to parent company
Mino
rity
intere
sts
Total
owne
r’s
equit
y
Shar
e
capi
tal
Other equity
instrument
Capit
al
publi
c
reserv
e
Less:
Inven
tory
share
s
Other
comp
rehen
sive
inco
me
Reaso
nable
reserv
e
Surpl
us
publi
c
reserv
e
Provi
sion
of
gener
al risk
Retai
ned
profit
Pref
erre
d
stoc
k
Per
petu
al
capi
tal
sec
uriti
es
Oth
er
I. Balance at the
end of the last
year
451
620
276.
00
3671
7201
7.79
5473
6482
.14
1582
3961
2.94
1797
0173
.99
1049
738
562.8
6
Add:
Changes of
accounting
policy
Error
correction of the
last period
Enterprise
1983
538
7039
5.63
2201
8203
3456
3780
5696
9191
2606
397
combined under
the same control
117.0
1
3.38 6.25 .41 543.6
8
Other
II. Balance at
the beginning of
this year
451
620
276.
00
2350
710
134.8
0
7039
5.63
2749
1851
5.52
5038
7741
9.19
7493
9365
.40
3656
136
106.5
4
III. Increase/
Decrease in this
year (Decrease
is listed with
“-”)
451
620
27.0
0
-
2875
4543
2.68
5222
2394
.76
4577
2503
5.63
4912
2755
.64
3166
8678
0.35
(i) Total
comprehensive
income
3591
7426
3.44
-
8298
615.
26
3508
7564
8.18
(ii) Owners’
devoted and
decreased
capital
-
2875
4543
2.68
5222
2394
.76
2271
5037
6.41
5742
1370
.90
4924
8709
.39
1．Common
shares invested
by owners
4964
0000
.00
4964
0000
.00
2．Capital
invested by
holders of other
equity
instruments
3．Amount
reckoned into
owners equity
with share-based
payment
4．Other
-
2875
4543
2.68
5222
2394
.76
2271
5037
6.41
7781
370.
90
-
(III) Profit
distribution
451
620
27.0
0
-
1285
9960
4.22
-
8343
7577
.22
．Withdrawal
of surplus
reserves
2．Withdrawal
of general risk
provisions
3．Distribution
for owners (or
shareholders)
451
620
27.0
0
-
1285
9960
4.22
-
8343
7577
.22
4．Other
(IV) Carrying
forward internal
owners’ equity
1. Capital
reserves
conversed to
capital (share
capital)
2. Surplus
reserves
conversed to
capital (share
capital)
3. Remedying
loss with surplus
reserve
4．Change
amount of
defined benefit
plans that carry
forward retained
earnings
5．Other
(v)Reasonable
reserve
1. Withdrawal in
the report period
2. Usage in the
report period
(vi)Other
IV. Balance at
the end of the
report period
496
782
303.
00
2063
702.1
2
7039
5.63
3271
4091
0.28
9616
0245
4.82
1240
6212
1.04
3972
822
886.8
9
8. Statement of Changes in Owners’ Equity (Parent Company)
Current period
In RMB
Item
Current period
Share
capita
l
Other equity instrument
Capital
public
reserve
Less:
Invento
ry
shares
Other
compre
hensive
income
Reason
able
reserve
Surplus
public
reserve
Retai
ned
profit
Total
owner’
s equity
Prefer
red
stock
Perpe
tual
capita
l
securi
ties
Other
I. Balance at the
end of the last
year
4967
8230
3.00
38244
4482.4
5
54736
482.14
1997
8965
0.74
11337
52918.
33
Add:
Changes of
accounting
policy
Error
correction of the
last period
Other
II. Balance at
the beginning of
this year
4967
8230
3.00
38244
4482.4
5
54736
482.14
1997
8965
0.74
11337
52918.
33
III. Increase/
Decrease in this
year (Decrease
is listed with
“-”)
6557
5295
1.00
26356
62085.
82
-
3428
3664.
43
32571
31372.
39
(i)Total
comprehensive
income
-
3428
3664.
43
-
34283
664.43
(ii) Owners’
devoted and
decreased
capital
6557
5295
1.00
26356
62085.
82
32914
15036.
82
1．Common
shares invested
by owners
6557
5295
1.00
52197
93489.
96
58755
46440.
96
2．Capital
invested by
holders of other
equity
instruments
3．Amount
reckoned into
owners equity
with share-based
payment
4．Other
-
25841
31404.
14
-
25841
31404.
14
(III) Profit
distribution
1．Withdrawal
of surplus
reserves
2．Distribution
for owners (or
shareholders)
3．Other
(IV) Carrying
forward internal
owners’ equity
1. Capital
reserves
conversed to
capital (share
capital)
2. Surplus
reserves
conversed to
capital (share
capital)
3. Remedying
loss with surplus
reserve
4．Change
amount of
defined benefit
plans that carry
forward retained
earnings
5．Other
(v)Reasonable
reserve
1. Withdrawal in
the report period
2. Usage in the
report period
(vi)Other
IV. Balance at
the end of the
report period
1152
5352
54.00
30181
06568.
27
54736
482.14
1655
0598
6.31
43908
84290.
72
Last period
In RMB
Item
Last period
Share
capita
l
Other equity instrument
Capital
public
reserve
Less:
Invento
ry
shares
Other
compre
hensive
income
Reason
able
reserve
Surplus
public
reserve
Retai
ned
profit
Total
owner’
s equity
Prefer
red
stock
Perpe
tual
capita
l
securi
ties
Other
I. Balance at the
end of the last
year
4516
2027
6.00
38244
4482.4
5
54736
482.14
2837
4652
4.30
11725
47764.
89
Add:
Changes of
accounting
policy
Error
correction of the
last period
Other
II. Balance at
the beginning of
this year
4516
2027
6.00
38244
4482.4
5
54736
482.14
2837
4652
4.30
11725
47764.
89
III. Increase/
Decrease in this
year (Decrease
is listed with
“-”)
4516
2027.
00
-
8395
6873.
56
-
38794
846.56
(i) Total
comprehensive
income
-
1621
3832.
76
-
16213
832.76
(ii) Owners’
devoted and
decreased
capital
1．Common
shares invested
by owners
2．Capital
invested by
holders of other
equity
instruments
3．Amount
reckoned into
owners equity
with share-based
payment
4．Other
(III) Profit
distribution
4516
2027.
00
-
6774
3040.
80
-
22581
013.80
1．Withdrawal
of surplus
reserves
2．Distribution 4516 - -
for owners (or
shareholders)
2027.
00
6774
3040.
80
22581
013.80
3．Other
(IV) Carrying
forward internal
owners’ equity
1. Capital
reserves
conversed to
capital (share
capital)
2. Surplus
reserves
conversed to
capital (share
capital)
3. Remedying
loss with surplus
reserve
4．Change
amount of
defined benefit
plans that carry
forward retained
earnings
5．Other
(v)Reasonable
reserve
1. Withdrawal in
the report period
2. Usage in the
report period
(vi)Other
IV. Balance at
the end of the
report period
4967
8230
3.00
38244
4482.4
5
54736
482.14
1997
8965
0.74
11337
52918.
33
III. Basic situation of Company
1. The history of the company
Shenzhen Cereals Holdings Co. Ltd. (original name Shenzhen Shenbao Industrial Co. Ltd. hereinafter referred to
as “Company” or “the Company” ) formerly named Shenzhen Shenbao Canned Food Company obtained approval
(Document (1991) No.978) from Shenzhen Municipal People’s Government to change to the present name as on 1
August 1991.Then with the approval (Document (1991)No.126) from People’s Bank of China the Company began
to list on Shenzhen Stock Exchange. The certificate for uniform social credit code: 91440300192180754J
The Company initially issued 107312935 shares in the stock exchange. In 1992 one bonus share was dispatched
for each 10 shares held by its shareholders thus totally 10731290 shares were increased. In 1993 one bonus share
and one allotted share were dispatched for each 10 shares held by its shareholders thus totally 20878845 shares
were increased. Subsequently one bonus share was dispatched for each 10 shares held by shareholders upon the
basis of total share capital as at the end of 1996 and capitalizing of capital reserves was carried out at one to ten
basis thus totally 27784614 shares were increased. In 2001 based on the total share capital as at the end of 1999
three shares were allotted for each 10 shares held by shareholders and totally 15215404 shares were allotted. The
registered capital of the Company amounts to 181 923088 yuan.
On 22 June 2011 the Company privately offering 68977066 shares of RMB ordinary share (A share) to target
investors with issuing price of 8.70 yuan each while book value of 1.00 yuan. Total monetary capital 600100474.20
yuan was raised. Change procedures of industrial and commerce has completed on 12 July 2011. Register capital
of the Company changed as 250900154.00 yuan.
On 9 April 2014 the equity allocation plan was deliberated and approved by Annual General Meeting of 2013.
Based on 250900154 shares dated 31st December 2013 increase 2 shares by each 10 shares transferring to all
shareholders. Share capital increased to 301080184 shares after transferring.
On 17 May 2016 the equity allocation plan was deliberated and approved by Annual General Meeting of 2015.
Based on 301080184 shares dated 31st December 2015 increase 5 shares by each 10 shares transferring to all
shareholders. Share capital increased to 451620276 shares after transferring.
On 15 May 2017 the equity allocation plan was deliberated and approved by Annual General Meeting of 2016.
Based on 451620276 shares dated 31st December 2016 distributed 0.50 Yuan (tax included) for every 10 shares
held by all shareholders with one bonus shares (tax included) no capitalization from public reserves. Shares capital
increased to 496782303 shares after bonus stock distributed.On October 15 2018 the Company received the “Reply on the Approval of Shenzhen Cereals Holdings Co. Ltd.to Issue Shares to Shenzhen Fude State-owned Capital Operation Co. Ltd. (hereinafter referred to as Fude Capital)to Purchase Assets” (ZJXK [2018] No. 1610) from the China Securities Regulatory Commission agreed the
Company to issue 655752951 shares of restricted ordinary shares to Fude Capital to acquire 100.00% equity of
Shenzhen Cereals Group Co. Ltd. held by Fude Capital.On October 18 2018 100.00% equity of Shenzhen Cereals Group Co. Ltd. completed the transfer procedures and
related industrial and commercial change registration. After the completion of this major asset reorganization the
Company’s share capital increased to 1152535254 shares. This share capital change was examined by Jonten
Certified Public Accountant (Limited Liability Partnership) who issued the capital verification report Jonten [2018]
YZ No. 90066 on October 22 2018.
End as December 31 2018 the total share capital of the company was 1152535254.00 shares registered capital
amounted to 1152535254.00 yuan.Register address of the Company: 8/F Tower B No.4 Building Software Industry Base South District Science &
Technology Park Xuefu Rd. Yuehai Street Nanshan District Shenzhen
On 30 January 2019 the Company hold a Second Extraordinary Shareholders Meeting of 2019 to deliberated and
approved the proposal of “Change the Name and Stock Short Name of the Company ” agreed to change the name
of the Company from “Shenzhen Shenbao Industrial Co. Ltd.” to “Shenzhen Cereals Holdings Co. Ltd.” stock
short name change from “Shen Shenbao A Shen Shenbao B” to “SZCH Shenliang B”. On 18 February 2019
registration procedures on industrial and commercial has completed and obtained the new Business License from
Shenzhen Market Supervision and Administration.(ii) Business nature and main operation activities
The Company belongs to the grain oil food and beverage industry.Main products of the Company including grain and oil trading and processing grain and oil reserve service military
food supplies food beverage of tea and tea products.
Business scope: production of tea tea products extract of tea and natural plant canned food beverage and native
products ( business license for the production place should apply separately); technology development and
technology service of tea plant products soft beverage and foods; info tech development and supporting service;
on-line trading; investment operation management and development of tea plantation; investment in industrial
projects (apply separately for detail projects); domestic trading(excluding special sales specific control and
exclusive commodity); import and export business; engaged in real estate development and operation in the landlegally obtained; lease and sales of the self-owned property and property management.” (as for the projects subject
to examination and approval regulated by the state laws administrative regulations and state council approval
should be obtained before operation). Business in license: wholesale of prepackaged food (excluding reheating
prepackaged food) (in non-physical way).In the reporting period under the way of issuing shares to Fude Capital for purchasing 100 percent equity of
Shenzhen Cereals Group Co. Ltd on basis of production research and development and sales of food raw materials
(ingredients) centered on intensive processing of tea and natural plants main business of the Company increased
grain and oil reserve grain & oil trading circulation of grain and oil such as grain and oil processing and grain and
oil reserve service. Therefore on 18 February 2019 relevant business scope of the Company was changed as:
general operation items: acquisition and sales of grain & oil grain and oil reserves; management and processing of
grain & oil and their products; production of tea tea products extract of tea and natural plant canned food beverage
and native products ( business license for the production place should apply separately); management and processing
of feed (outsourcing); grain and oil logistics feed logistics investment operation and development for the projects
of tea garden; sales of feed and tea; storage service; grain distribution services; modern grain supply chain service;
technical development and services of grain and oil tea plant products soft drinks and food; E-business and
information construction IT development and supporting services; investment in industrial projects (apply
separately for detail projects); domestic trading; import and export business; engaged in real estate development
and operation in the land legally obtained; development operation leasing and management of the owned property;
property management; providing management services for hotels. (as for projects mentioned above that are required
to be submitted for examination and approval by the laws administrative regulations and decision of the state
council approval and examination shall be required before operated). Business in license: wholesale of prepackaged
food (excluding reheating prepackaged food) (in non-physical way); information services business (internet
information services business only); general freight transportation and professional transportation (refrigeration and
fresh-keeping)
(iii) Report approval for the financial statement
The statement has been approved by BOD of the company for reporting on 25 April 2019.II. Consolidated financial statement scope
Totally 36 subsidiaries are included in consolidate financial statement mainly including:
Subsidiary Type
Level
Shareholding ratio
(%)
Voting rights ratio
(%)
Shenzhen Shenbao Huacheng Science and
Technology Co.Ltd(hereinafter referred to as
Shenbao Huacheng)
Wholly-owned
subsidiary
First
grade
100 100
Ju Fang Yong Tea Industry Co. Ltd. in Wuyuan
County(hereinafter referred to as Wuyuan Ju
Fang Yong)
Wholly-owned
subsidiary
First
grade
100 100
Shenzhen Shenbao Sanjing Food & Beverage
Development Co. Ltd.(hereinafter referred to as
Shenbao Sanjing)
Wholly-owned
subsidiary
First
grade
100 100
Huizhou Shenbao Science & Technology Co.Ltd.(hereinafter referred to as Shenbao Science
& Technology )
Wholly-owned
subsidiary
First
grade
100 100
Shenzhen Shenbao Properties Management Co.Ltd. (hereinafter referred to as Shenbao
Properties)
Wholly-owned
subsidiary
First
grade
100 100
Shenzhen Shenbao Industrial & Trading Co.Ltd.(hereinafter referred to as Shenbao
Wholly-owned
subsidiary
First
grade
100 100
Industrial & Trading)
Hangzhou Ju Fang Yong Holding Co.Ltd.(hereinafter referred to as Hangzhou Ju
Fang Yong)
Wholly-owned
subsidiary
First
grade
100 100
Shenzhen Shenbao Technology Center Co.Ltd.(hereinafter referred to as Shenbao
Technology Center )
Wholly-owned
subsidiary
First
grade
100 100
Shenzhen Shenshenbao Investment Co. Ltd.(hereinafter referred to as Shenshenbao
Investment)
Wholly-owned
subsidiary
First
grade
100 100
Yunnan Shenbao Pu’er Tea Supply Chain
Management Co. Ltd(hereinafter referred to as
Yunnan Supply Chain )
Wholly-owned
subsidiary
First
grade
100 100
Huizhou Shenbao Food Co. Ltd.(hereinafter
referred to as Huizhou Shenbao Food )
Wholly-owned
subsidiary
First
grade
100 100
Yunnan Pu’er Tea Trading Center Co.Ltd.(hereinafter referred to as Pu’er Tea Trading
Center )
Controlling
subsidiary
First
grade
55 55
Mount Wuyi Shenbao Rock Tea Co. Ltd.(hereinafter referred to as Shenbao Rock Tea )
Wholly-owned
subsidiary
Second
grade
100 100
Hangzhou Fuhaitang Tea Ecological
Technology Co. Ltd.(hereinafter referred to as
Fuhaitang Ecological )
Wholly-owned
subsidiary
Second
grade
100 100
Hangzhou Chunshi Network Technology
Co.Ltd. (hereinafter referred to as Chunshi
Network)
Wholly-owned
subsidiary
Second
grade
100 100
Shenzhen Shenshenbao Tea Culture
Management Co. Ltd. (hereinafter referred to
as Shenshenbao Tea Culture)
Wholly-owned
subsidiary
Second
grade
100 100
Hangzhou Ju Fang Yong Trading Co. Ltd.(hereinafter referred to as Ju Fang Yong
Trading)
Controlling
subsidiary
Second
grade
60 60
Shenzhen Shenbao Tea-Shop Co. Ltd.(hereinafter referred to as Shenbao Tea-Shop )
Wholly-owned
subsidiary
Second
grade
100 100
Hangzhou Fuhaitang Catering Management
chain Co. Ltd.(hereinafter referred to as
Fuhaitang Catering )
Wholly-owned
subsidiary
Second
grade
100 100
Shenzhen Cereals Group Co. Ltd(hereinafter
referred to as SZCG )
Wholly-owned
subsidiary
First
grade
100 100
Shenzhen Flour Co. Ltd(hereinafter referred to
as Shenzhen Flour)
Wholly-owned
subsidiary
Second
grade
100 100
Shenzhen Hualian Grain & Oil Trade Co. ltd. Wholly-owned Second 100 100
(hereinafter referred to as Hualian Grain & oil
trading )
subsidiary grade
Hainan Haitian Aquatic Feed Co.Ltd(hereinafter referred to as Hainan Haitian)
Wholly-owned
subsidiary
Second
grade
100 100
SZCG Quality Inspection Co. Ltd.
(hereinafter referred to as SZCG Quality
Inspection)
Wholly-owned
subsidiary
Second
grade
100 100
SZCG Doximi Business Co. Ltd. (hereinafter
referred to as SZCG Doximi)
Wholly-owned
subsidiary
Second
grade
100 100
SZCG Cold-Chain Logistic Co.
Ltd.(hereinafter referred to as SZCG Cold-
Chain Logistic)
Wholly-owned
subsidiary
Second
grade
100 100
SZCG Big Kitchen Food Supply Chain Co.
Ltd.(hereinafter referred to as SZCG Big
Kitchen)
Controlling
subsidiary
Second
grade
70 70
SZCG Real Estate Development Co. Ltd.
(hereinafter referred to as SZCG Real Estate
Development)
Wholly-owned
subsidiary
Second
grade
100 100
SZCG Property Management Co. Ltd.
(hereinafter referred to as SZCG Property)
Wholly-owned
subsidiary
Third
grade
100 100
SZCG Storage (Yingkou) Co. Ltd.(hereinafter
referred to as SZCG Storage (Yingkou) )
Wholly-owned
subsidiary
Second
grade
100 100
Dongguan SZCG Logistics Co. Ltd.(hereinafter
referred to as Dongguan Logistics)
Controlling
subsidiary
Second
grade
51 51
Dongguan International Food Industrial Park
Development Co. Ltd.(hereinafter referred to as
Dongguan Food Industrial Park)
Controlling
subsidiary
Third
grade
51 51
Dongguan SZCG Oil & Food Trade Co. Ltd.
(hereinafter referred to as Dongguan Food
Trade)
Controlling
subsidiary
Third
grade
51 51
Dongguan Golden Biology Tech. Co. Ltd.
(hereinafter referred to as Dongguan Golden)
Controlling
subsidiary
Third
grade
51 51
Shuangyashan SZCG Zhongxin Cereals Base
Co. Ltd. (hereinafter referred to as
Shuangyashan SZCG Zhongxin)
Controlling
subsidiary
Second
grade
51 51
Heilongjiang Hongxinglong Nongken Shenxin
Cereals Industrial Park Co. ltd. (hereinafter
referred to as Hongxinglong Nongken Industrial
Park )
Controlling
subsidiary
Third
grade
51 51
Body included in consolidated financial statement in the period has 7 increased and one declined by compare
with same period of last year including:
Subsidiary newly included in consolidate scope
Name Reasons for change
Shenzhen Cereals Group Co. Ltd Enterprise combined under the same control
Shenzhen Flour Co. Ltd(Note 1) Enterprise combined under the same control
Shenzhen Hualian Grain & Oil Trade Co. ltd. (Note 1) Enterprise combined under the same control
Hainan Haitian Aquatic Feed Co. Ltd(Note 1) Enterprise combined under the same control
SZCG Quality Inspection Co. Ltd. (Note 1) Enterprise combined under the same control
SZCG Doximi Business Co. Ltd. (Note 1) Enterprise combined under the same control
SZCG Cold-Chain Logistic Co. Ltd.(Note 1) Enterprise combined under the same control
SZCG Big Kitchen Food Supply Chain Co. Ltd.(Note 1) Enterprise combined under the same control
SZCG Real Estate Development Co. Ltd. (Note 1) Enterprise combined under the same control
SZCG Property Management Co. Ltd. (Note 1) Enterprise combined under the same control
SZCG Storage (Yingkou) Co. Ltd.(Note 1) Enterprise combined under the same control
Dongguan SZCG Logistics Co. Ltd.(Note 1) Enterprise combined under the same control
Dongguan International Food Industrial Park
Development Co. Ltd.(Note 1)
Enterprise combined under the same control
Dongguan SZCG Oil & Food Trade Co. Ltd. (Note 1) Enterprise combined under the same control
Dongguan Golden Biology Tech. Co. Ltd. (Note 1) Enterprise combined under the same control
Shuangyashan SZCG Zhongxin Cereals Base Co. Ltd.(Note 1)
Enterprise combined under the same control
Heilongjiang Hongxinglong Nongken Shenxin Cereals
Industrial Park Co. ltd. (Note 1)
Enterprise combined under the same control
Note 1: Change of the consolidate scope means that material assets reorganization carried out in the period purchased 100 percent
equity of Shenzhen Cereals Group Co. Ltd through issuing shares to Fude Capital the 16 subordinate subsidiaries of Shenzhen
Cereals Group Co. Ltd as Shenzhen Flour Co. Ltd etc. are included in the consolidate scope of the Company.
2. Subsidiary not included in the scope any more
Name Reasons for change
Zhanjiang Haitian Aquatic Feed Co. Ltd Stripped without compensation from state-owned shares. (fond more in
(ii) of Note VII)
Note 1: According to the “Agreement on the Issuance of Shares to Purchase Assets” signed by the Company and Fude Capital in March
2018 the Company’s subsidiary SZCG signed the “Master Agreement on Major Asset Restructuring of State-owned Assets and Related
Equity of Shenzhen Cereals Group Co. Ltd.” and the “Agreement on the Free Transfer of State-owned Assets of Zhanjiang Haitian
Aquatic Feed Co. Ltd.” with Fude Capital in June 2018 the company did not belong to the scope of restructured assets. In the current
period the Company’s wholly-owned subsidiary SZCG transferred its 90% equity of Zhanjiang Haitian Aquatic Feed Co. Ltd. to
Fude Capital free of charge according to the above agreements.
Change of the consolidate scope found more in Note VII. Change of consolidate scope
. Subsidiary excluded in consolidated financial statement
(1) Shenzhen Shenbao (Liaoyuan) Industrial Company has established for a long time without normal operation
Industry and Commerce Bureau has canceled the business license of the company the long-term equity
investment for the company has been accrual for impairment totally. Financial statement of the company is out
of the consolidation range.
(2) Shenzhen Shenbao Manan Biotechnology Co. Ltd. Change its name as Huizhou Shenbao Manan Biotechnology
Co. Ltd on 21 May 2018 it is a subsidiary of the Company set up by Huizhou Shenbao Technology and Guangzhou
Shen Guangsheng biotechnology limited liability company according to the contract signed by both parties on
March 28 2014 Huizhou Shenbao Technology does not have the right to manage this company thus it is accounted
by the equity method.
(3) Shenzhen Shichumingmen Restaurant Management Co. Ltd. set up by a subsidiary of the Company
Shenshenbao tea culture and Shenzhen Investment Co. Ltd. F. according to Articles of Association the Board of
Directors to vote by one vote one person. Attendees to the board of directors should be more than 2/3 of the whole
number of directors and all participants approve the resolution thus it is effective. The Company only accounted
for 3/5 of the voting rights in Shichumingmen Company control can not be reached so it is accounted for by the
equity method.IV. Basis of preparation of financial statements
1. Basis of preparation
(i) basis of preparation of financial statement
Based on continuing operation the Company conducts recognition and measurement according to actual occurrence
of transactions and issues pursuant to the accounting principles for enterprise-basic rules and specific accounting
principle as well as the application guidance for the accounting principles for enterprise interpretation to the
accounting principles for enterprise and other related requirements (hereinafter referred to as Enterprise Accounting
Principles) issued by the ministry of finance on that basis combining the Information Disclosure Preparation Rules
for Company Public Issuing Securities No.15-General Rules for Financial Report (amended in 2014) of the CSRC
for statement preparation.
2. Going concern
(ii) Going concern
The Company was evaluated on continued viability of 12 months for the reporting period and found to have no
significant doubt. Accordingly the financial statements have been prepared on the basis of going concern
assumptions.V. Major accounting policy accounting estimation
Does the Company need to comply with disclosure requirements of the special industry?
No
Specific accounting policies and estimation attention:
Nil
1. Statement for observation of Accounting Standard for Enterprise
The financial statements prepared by the Company are in accordance to requirements of Accounting Standard for
Enterprise which truly and completely reflect the information related to financial position operational results and
cash flow of the Company.
2. Accounting period
Calendar year is the accounting period for the Company that is falls to the range starting from 1 January to 31
December.
3. Operating cycle
Operating cycle of the Company was 12 months and the operating cycle is the determining criterion for liquidity
of assets and liabilities.
4. Standard currency
The Company and its subsidiaries take RMB as the standard currency for bookkeeping.
5. Accounting treatment for business combinations under the same control and those not under the same
control
1. If the terms conditions and economic impact of each transaction involved in business combination
achieved in stages fall within one or more of the following situations such transactions will be accounted for
as a package deal:
(1) Such transactions are entered into simultaneously or in the case of considering the impact of each other;
(2) Such transactions as a whole in order to reach a complete business results;
(3) The occurrence of a transaction subject to that of at least one other transaction;
(4) One transaction alone is not economic but otherwise when considered with other transactions.
2. Business combination under the same control
The assets and liabilities the Company acquired in a business combination shall be measured in accordance with
book value of assets liabilities (including the ultimate controlling party of goodwill acquired by the merging parties
and the formation of) stated in combined financial report of the ultimate controlling party on the merger date. The
net book value of assets and the payment of the merger consideration in the merger book value (or nominal value
of shares issued) shall be adjusted in the share premium of reserve capital. the share premium in capital reserve is
not enough for deducting retained earnings .If the capital reserve is not sufficient to absorb the difference any excess shall be adjusted against retained earnings.In case there is existence of contingent consideration which needs to confirm projected liabilities or assets then the
difference between the projected liabilities or assets and settlement amount for consequent contingent consideration
is utilized to adjust capital reserve (capital premium or equity premium); in case of insufficient capital reserve
adjust retained earnings.
As for business combination realized through numbers of transactions and if these transactions belong to a bundle
of transactions then each of them shall be accounted as a transaction to acquire controlling right; and if not belong
to a bundle of transactions then the difference between the initial investment cost of the long term equity investment
as of the date on which the Company obtains controlling right and the carrying value of the long term equity
investment prior to combination plus the carrying value of the new consideration paid for further acquisition of
shares as of the combination date shall be used to adjust capital reserve; in case of insufficient capital reserve adjust
retained earnings. For equity investment held prior to the combination date the other comprehensive income
recognized due to calculation by equity method or based on recognition and measurement principles for financial
instruments would not be accounted for temporarily until the Company disposes of this investment on the same
basis as the investee directly disposes of relevant assets or liabilities; other changes of owners’ equity in the net
assets of investee as recognized under equity method except for net profit or loss other comprehensive income and
profit distribution shall not be accounted for until being transferred to current profit or loss when this investment is
disposed of.
3. Business combination not under the same control
Purchase date refers to the date on which the Company actually obtains control over the acquiree that is the date
when the acquiree’s net assets or control of production and business decisions are transferred to the Company. When
satisfying the following conditions at the same time the Company generally believes that the transfer of control
rights has been achieved:
① The business merger contract or agreement has been approved by the Company’s internal authority.② Business merger matters need to be approved by the relevant national competent authority and approval has
been obtained.③ The necessary procedures for the transfer of property rights have been completed.④ The Company has paid most of the merger cost and has the ability and plan to pay the remaining amount.⑤ The Company has actually controlled the finance and operating policies of the acquiree and enjoys
corresponding benefits and assumes corresponding risks.
Assets paid and liabilities taken for business combination on the acquisition date shall be measured at fair value.
The difference between the fair value and book value is recognized in profit or loss.Goodwill is realized by the Company as for the difference between the combination cost and the fair value of the
recognizable net assets of the acquiree acquired by acquirer in such business combination. In case that the above
cost is less than the above fair value even with re-review then the difference shall be recorded in current gains and
losses.
As for the business combination not under the same control realized through several exchange transactions step by
step part of the package deal than carrying accounting treatment on transactions with controlling rights obtained
through vary transactions; as for non-package: for equity investment held prior to combination date which is
calculated under equity method the sum between carrying value of the equity investment prior to acquisition date
and cost of additional investment made on the acquisition date is deemed to be the initial investment cost of this
investment. Other comprehensive income recognized for equity investment held prior to combination date under
equity method shall be accounted for when the Company disposes of this investment on the same basis as the
investee directly disposes of relevant assets or liabilities. In case that equity investment held prior to combination
date is calculated based on recognition and measurement principles for financial instruments then the fair value of
this equity investment as of combination date plus new investment cost shall be deemed as initial investment cost.The difference between fair value and carrying value of the originally held equity interests and the accumulated fair
value movements as originally recorded in other comprehensive income shall be all transferred to investment
income of the period in which the combination date falls.
4. Expenses related to the merger
Audit legal consulting services and other intermediary costs and other expenses directly related to the business
combination shall be included in current profit or loss in the event; any transaction fee for issuing equity securities
for business combination which can be directly attributable to the equity transaction shall be deducted from equity.
6. Methods for preparation of consolidated financial statements
1. Merger scope
The consolidation scope of the consolidated financial statements of the Company is fixed on the basis of control
and all subsidiaries have been consolidated.
2. Merger procedure
The Company edits the consolidated financial statements based on its own financial statements and the subsidiaries’
as well as other relevant information. The consolidated financial statements hold the enterprise group as a whole
accounting entity. It is recognized in accordance with relevant Accounting Standards measurement and presentation
requirements. Uniform accounting policies reflect the overall financial position of the Group's business operating
results and cash flow.The accounting policies and accounting period adopted by the subsidiaries taken into account of the consolidation
scope are in line with the Company. If it is not the same as the Company necessary adjustments will be made when
preparing consolidated financial statements according to the accounting policy and accounting period of the
Company.
Internal transactions between the Company and its subsidiaries and between subsidiaries to each other shall put
impact on the consolidated balance sheet consolidated income statement consolidated cash flow statement the
consolidated shareholders' equity. The impact shall be offset when combing financial statements. If it is not the
same when you stand Enterprise Group and the angle of the Company or its subsidiaries as the accounting entity
identified on the same transaction the business point of view shall be adjusted to the Group's transactions.Subsidiary's equity current net profits or losses and current comprehensive income belonging to minority
shareholders shall be listed respectively under item of owners’ equity in the consolidated balance sheet item of net
profit in profit sheet and item of total comprehensive income. Current loss minority shareholders of a subsidiary
exceed the minority shareholders in the subsidiary's opening owners' equity share and the formation of balance
offset against minority interests.
For the subsidiaries acquired through business combination under common control its assets and liabilities
(including goodwill formed from ultimate controlling party acquiring the subsidiary to) shall be adjusted based on
the book value in the financial statements of the ultimate controlling party.
For the subsidiaries acquired through business combination under uncommon control financial statements shall be
adjusted based on the fair value of the identifiable net assets on acquiring date.
(1) Increase of subsidiary or business
During the reporting period the merger of the enterprises under the same control results in additional subsidiaries
or business then adjust the opening amount of consolidated balance sheet; income expenses and profit of the
subsidiaries or business from beginning to the end of the reporting shall be included in the consolidated profit
statement; cash flows of the subsidiaries or business from beginning to the end of reporting period shall be included
into the consolidated cash flow statement. And relevant comparative items of comparable statement shall be adjusted
since reporting entity is controlled by the ultimate controller.If additional investment and other reasons can lead investee to be controlled under the same control all parties shall
be adjusted at the beginning when the ultimate controlling party starts control. Equity investments made before
obtaining controlling right relevant gains and losses and other comprehensive income as well as other changes in
net assets confirmed during the latter date between point obtaining original equity and merger and mergered under
the same control day to the combined day shall be offset against the retained earnings or profit or loss of the
comparative reporting period.
During the reporting period opening amount of consolidated balance sheet shall not be adjusted since enterprise
under different control combine or increase holding of subsidiary or business; the income expense and profit of the
subsidiaries or business from the acquisition date to the end of reporting period shall be included in the consolidated
profit statement; while cash flows shall be included into the consolidated cash flow statement.
Equity held from investee before acquisition date shall be measured at fair value of acquisition date if additional
investment and other reasons can lead investee to be controlled under the same control. Difference between the fair
value and the book value is recognized as investment income. other comprehensive income and other owners' equity
except for net profit or loss other comprehensive income and the distribution of profits related to equity held from
investee before acquisition date as well as relevant other comprehensive income associated with all other by
changes in equity shall be included in current investment income except for other comprehensive income arising
from change of net assets or net liabilities redefined by investee.
(2) Disposal of subsidiaries or business
1) The general approach
During the reporting period the Company carry out disposal of subsidiaries or business revenue expense and profit
of the subsidiary or business included in the consolidated profit statement from the beginning to the disposal date;
while the cash flow into cash flow table.If losing controlling right to investee due to disposal of partial equity the remaining equity after the disposal shall
be re-measured at fair value at the date when control is lost. Price of equity disposal plus fair value of the remaining
equity then subtracting net assets held from the former subsidiary from the acquisition date or combination date
initially measured in accordance with original stake and goodwill the difference shall be included in investment
income of the period losing controlling right. other comprehensive income and other owners' equity except for net
profit or loss other comprehensive income and the distribution of profits related to equity held from investee before
acquisition date as well as relevant other comprehensive income associated with all other by changes in equity shall
be included in current investment income except for other comprehensive income arising from change of net assets
or net liabilities redefined by investee.
2) Step disposal of subsidiaries
As multiple transactions over disposal of the subsidiary's equity lead to loss of controlling right if the terms of the
transaction situation and economic impact subject to one or above of the following conditions usually it indicates
repeated transactions should be accounted for as a package deal:
A. These transactions are made considering at the same time or in the case of mutual impact;
B. These transactions only reach a complete business results when as a whole;
C. A transaction occurs depending on the occurrence of at least one other transaction;
D. Single transaction is not economical but considered together with other transactions it is economical.
If disposal of equity in subsidiaries lead the loss of control and the transactions can be seen as a package deal the
Company will take accounting treatment of the transaction; however before the loss of control the difference
between the disposal price and the corresponding net assets of the subsidiary recognized as other comprehensive
income in the consolidated financial statements into current profit and loss at current period when losing controlling
right.If disposal of equity in subsidiaries lead the loss of control and the transactions doesn’t form a package deal equity
held from subsidiary shall be accounted in accordance with relevant rules before losing controlling right while in
accordance with general accounting treatment when losing controlling right.
(3) Purchase of a minority stake in the subsidiary
Long-term equity investment of the Company for the purchase of minority interests in accordance with the newly
acquired stake in the new calculation shall be entitled to the difference between the net assets from the acquisition
date (or combination date) initially measured between the consolidated balance sheet adjustment capital balance of
the share premium in the capital reserve share premium insufficient any excess is adjusted to retained earnings.
(4) Disposal of equity in subsidiary without losing control
Disposal price and disposal of long-term equity investment without a loss of control due to partial disposal of
subsidiaries and long-term equity investment made between the relative net assets from the purchase date or the
date of merger were initially measured at the difference between the subsidiary shall enjoy the consolidated balance
sheet adjustment in the balance of the share premium capital balance of the share premium insufficient any excess
is adjusted to retained earnings.
7. Classification of joint venture arrangement and accounting for joint operations
1. Classification of joint venture arrangement
The Company classifies joint venture arrangement into joint operations and joint ventures based on the structure
legal form agreed terms of the arrangement and other related facts and conditions.Joint venture arrangement not concluded through separate entity is classified as joint operation; and those concluded
through separate entity are generally classified as joint ventures. However joint venture arrangement which meets
any of the following conditions as proven by obvious evidence and satisfies relevant laws and rules is grouped as
joint operation:
(1) The legal form of the arrangement shows that parties to the arrangement are entitled to and assume rights and
obligations in respect of the relevant assets and liabilities.
(2) It is agreed by the terms of the arrangement that parties to the arrangement are entitled to and assume rights and
obligations in respect of the relevant assets and liabilities.
(3) Other related facts and conditions show that parties to the arrangement are entitled to and assume rights and
obligations in respect of the relevant assets and liabilities. For instance joint parties are entitled to almost all the
output related to joint venture arrangement and settlement of the liabilities under the arrangement continues to rely
on supports from the joint parties.
2. Accounting for joint operations
The Company recognizes its proportion of interests in joint operation as related to the Company and accounts for
under relevant business accounting principles:
(1) To recognize separately-held assets and jointly-held assets under its proportion;
(2) To recognize separately-assumed liabilities and jointly-assumed liabilities under its proportion;
(3) To recognize revenue from disposal of the output which the Company is entitled to under the proportion;
(4) To recognize revenue from disposal of the output under the proportion;
(5) To recognize separately occurred expenses and to recognize expenses occurred for joint operations under its
proportion.
For injection to or disposal of assets of joint operations (other than those assets constituting business operation)
gain or loss arising from the transaction is only recognized to the extent it is attributable to other parties to the joint
operation before the joint operation is sold to any third party. In case those assets injected or disposed satisfy the
condition for asset impairment loss under Business Accounting Principle No.8-Assets Impairment the Company
recognizes this loss in full.
For acquisition of assets from joint operations (other than those assets constituting business operation) gain or loss
arising from the transaction is only recognized to the extent it is attributable to other parties to the joint operation
before the relevant assets are sold to any third party. In case that the acquired assets satisfy the condition for asset
impairment loss under Business Accounting Principle No.8-Assets Impairment the Company recognizes relevant
loss according to the proportion it assumes.The Company exercises no common control over joint operations. If the Company is entitled to relevant assets of
the joint operation and assure relevant liabilities it shall be accounted for under the above principle otherwise it
would be accounted for under the relevant business accounting principles.. Recognition standards for cash and cash equivalents
When preparing cash flow statement the Company recognized the stock cash and deposits available for payment at
any time as cash and investments featuring with the following four characters at the same time as cash equivalents:
short term (expire within 3 months commencing from purchase day) active liquidity easy to convert to already-
known cash and small value change risks.
9. Foreign currency business and conversion of foreign currency statement
For the foreign currency business the Company converts the foreign currency into RMB for book-keeping based
on spot exchange rate at date of trading occurred.On balance sheet date balance of foreign currency monetary items shall be converted based on the spot rate as at
the balance sheet date and the arising exchange difference shall be recorded in current gains and losses other than
those arising from the special foreign currency borrowings related to purchasing assets qualifying for capitalization
which is treated under the principle of borrowing expense capitalization. As for the foreign currency non-monetary
items measured in historical cost conversion is still conducted with the spot rate as at the transaction date without
any change to its functional currency. As for the foreign currency non-monetary items measured in fair value
conversion is conducted with the spot rate as at the date for determination of fair value and the arising exchange
difference shall be recorded in current gains and losses or capital reserve.
As for the foreign currency non-monetary items measured in fair value conversion is conducted with the spot rate
as at the date for determination of fair value and the arising exchange difference shall be recorded in current gains
and losses or capital reserve.
10. Financial instruments
Financial instruments include financial assets financial liabilities and equities instruments.
1. Categories of financial instruments
According to the contract terms of the financial instrument issued and economic substance reflects by such
instrument not only in form of law combine with purposes held for financial assets and liabilities the Company
categorizes financial assets and liability into different types: financial assets (or financial liabilities) at fair value
through current gains and losses; accounts receivable; financial assets available for sale; other financial liabilities
etc.
2. Recognition and measurement for financial instrument
(1) Financial assets or liabilities at fair value through profit or loss
Financial assets or liabilities at fair value through profit or loss include transactional financial assets or financial
liabilities and financial assets or liabilities directly designated at fair value through profit or loss.Transactional financial assets or financial liabilities refer to those meeting any of the following conditions:
1) Purpose for holding the assets or liabilities are to disposal repurchase or redemption in a short time;
2) Constitute part of the identifiable financial instrument group for central management and there is objective
evidence proving that the Company manages this group in a short-time-return way recently;
3) Belong to derivative financial instrument other than those derivatives designated as effective hedge instruments
belonging to financial guarantee contracts and those linked to equity instrument investment which is not quoted in
an active market and whose fair cannot be measured reliably and the settlement of which is conditional upon delivery
of the equity instrument.Subject to satisfaction of any of the following conditions financial assets or liabilities can be designated as financial
assets or liabilities at fair value through profit or loss upon initial measurement:
1) The designation can eliminate or substantially eliminate the inconsistencies between profit and loss from the
financial assets arising from different measurement basis;
2) The portfolio of financial assets and liabilities in which the financial asset belongs to are designated as measured
at fair value in the risk management report or investment strategic report handed in to key management personnel;
3) Hybrid instruments which contains one or more embedded derivatives unless the containing of embedded
derivatives does not have substantial effect on the cash flows of the hybrid instruments or the embedded derivatives
obviously should not be separated from relevant hybrid instruments;
4) Hybrid instruments which contains embedded derivatives that should split but cannot be measured separately
when acquired or on the subsequent balance sheet date.The Company initially measures financial assets or liabilities at fair value through profit or loss at their fair values
when acquiring the assets or liabilities (after deducting cash dividend already declared but not paid or bond interests
which is due for interest payment but not received) and the relevant transaction fee is included in current profit or
loss. Interest or cash dividend acquired during the holding period shall be recognized as investment income and
movement of fair value at the end of period is included in current profit or loss. Upon disposal the difference
between its fair value and initial accounting amount shall be recognized as investment income with corresponding
adjustment to gains and losses from movement of fair value.
(2) Account receivables
Account receivable refers to the non-derivative financial assets without price in active market and with amount to
be fixed or to be determined
The contract price charged to the buyers shall be recognized as initial value for those account receivables which
mainly comprise the receivable creditor’s right caused by the sale of goods and providing of labor service to external
customers by the Company and receivables in other companies excluding debt instruments priced in active markets
includes but not limited to trade receivables notes receivables account paid in advance and other receivables. If
characterized as of financing nature the initial recognition shall be priced at the present value.Upon disposal the difference between the sale value and the book value of the receivables shall be accounted into
current profit or loss on its recovery or disposal.
(3) Held-to-maturity investment
The non-derivative financial assets with maturity date fix return amount or amount able to determined and the
Company held with specific intention and ability.
The Company takes the sum of fair value (after deducting bond interests which is due for interest payment but not
received) and related transaction fee as initial recognition amount in respect of held-to-maturity investment upon
acquisition of the investment. During the holding period the Company recognizes interest income at amortized cost
and effective interest rate which is included in investment income. The effective interest rate is determined upon
acquisition of the investment and remains unchanged for the expected continuous period or appropriate shorter
period. Difference between sale price and carrying value of the investment is included in investment income.If held-to-maturity investment is disposed or reclassified as other types of financial asset and the relevant amount
is relatively bigger than the total amount of our all held-to-maturity investments prior to disposal or reclassification
the remaining held-to-maturity investments shall be reclassified as available-for-sale financial assets immediately
following such disposal or reclassification. On the reclassification date difference between the carrying value and
fair value of the investment is included in other comprehensive income and is transferred out into current profit or
loss when the available-for-sale financial assets experience impairment or derecognition. However the followings
are exceptions:
1) The date of disposal or reclassification is approaching to the date of expiration or redemption of the investment
(such as three months prior to expiration) and change of market rate has no material influences over the fair value
of the investment.
2) Company has already recovered nearly all initial principal under the repayment means as agreed in contract.
3) Disposal or reclassification is arising from separate matters which are out of our control which are expected not
to occur repeatedly and which are difficult to predict reasonably.
(4) Available-for-sale financial assets
Available-for-sale financial assets are non-derivative financial assets that are designated as available-for-sale upon
initial recognition and financial assets other than other categories of financial assets.The Company initially measures available-for-sale financial assets at the sum between their fair values when
acquiring the assets or liabilities (after deducting cash dividend already declared but not paid or bond interests which
is due for interest payment but not received) and the relevant transaction fee. Interest or cash dividend acquired
during the holding period shall be recognized as investment income. Gains or losses arising from movement of fair
value is directly included in other comprehensive income except for impairment loss and exchange difference arising
from foreign currency monetary financial assets. When disposing available-for-sale financial assets the Company
includes the difference between the acquired price and carrying value of the financial assets into investment profit
or loss. Meanwhile accumulated fair value movement attributable to the disposed part which is originally directly
included in other comprehensive income is transferred out and included investment profit or loss.
For equity instrument investment which is not quoted in an active market and whose fair value cannot be reliably
measured and derivative financial assets which are linked to the equity instrument and whose settlement is
conditional upon delivery of the equity instrument they are stated at cost by the Company.
(5) Other financial liabilities
Initial recognition amount is determined at the sum of fair value and relevant transaction fee. Subsequent
measurement is conducted at amortized cost.
3. Confirmation evidence and measurement methods for transfer of financial assets
When transfer of financial assets occurs the Company shall stop recognition of such financial assets if all risks
and remunerations related to ownership of such financial assets have almost been transferred to the receiver;
while shall continue to recognize such financial assets if all risks and remunerations related to ownership of
such financial assets have almost been retained.When judging whether or not the aforesaid terminal recognition condition for financial assets is arrived at for
transfer of financial assets the Company generally adopts the principle that substance overweighs format. The
Company divides such transfer into entire transfer and part transfer. As for the entire transfer meeting condition for
discontinued recognition balance between the following two items is recorded in current gains and losses:
(1) Carrying value of financial assets in transfer;
(2) Aggregate of the consideration received from transfer and accumulative movements of fair value originally
recorded in owners’ equity directly (applicable when financial assets involved in transfer belong to financial assets
available for sale).
As for the part transfer meeting condition for discontinued recognition entire carrying value of financial assets in
transfer is shared by discontinued recognition part and continued recognition part in light of their respective fair
value. Balance between the following two items is recorded in current gains and losses:
(1) Carrying value of discontinued recognition part;
(2) Aggregate of the consideration of discontinued recognition part and amount of such part attributable to
accumulative movements of fair value originally recorded in owners’ equity directly (applicable when financial
assets involved in transfer belong to financial assets available for sale).
Financial assets are still subject to recognition if transfer of such assets doesn’t satisfy the condition for discontinued
recognition. And consideration received is recognized as financial liability.. De-recognition condition for financial liability
As for the financial liabilities with its whole or part present obligations released the company shall de-realize such
financial liabilities or part of it. if the company enters into agreement with its creditor to substitute for the existing
financial liabilities by means of assuming new financial liabilities then the company shall de-realize the existing
financial liabilities and realize the new financial liabilities provided that the contract clauses of the new and the
existing financial liabilities are different in substance.If the company makes substantial amendment to the whole or part contract clauses of the existing financial liabilities
it shall de-realize the existing financial liabilities or part of it. Meanwhile the financial liabilities with amendment
to its clauses shall be realized as new financial liabilities.In case of derecognizing of financial liabilities in whole or part the difference between the carrying value of such
de-realized financial liabilities and consideration paid (including the non-cash assets exchanged or new financial
liabilities assumed) shall be recorded in current gains and losses.In case that the company repurchases part of financial liabilities based on the comparative fair value of the
continuing recognition part and the derecognizing part the company shall allocate the carrying value of the financial
liabilities in whole on the repurchase date. Difference between the carrying value allocated to the derecognizing
part and the consideration paid (including the non-cash assets exchanged or new financial liabilities assumed) shall
be recorded in current gains and losses.
5. Determination method for fair value of financial assets and financial liabilities
As for the financial assets or financial liabilities with an active market the fair value is determined by the offer of
the active market; the offer of the active market includes the offers of underlying assets or liabilities easily and
regularly obtained from the exchange the dealer the broker the industry group the pricing institution or the
regulatory body which can represent the market transactions actually and frequently occur on the basis of fair trade.The initial acquisition or financial assets or financial liabilities assumed market transaction price to determine the
fair value basis.There is no active market for a financial asset or financial liability the valuation techniques to determine its fair
value. At the time of valuation the Company adopted applicable in the present case and there is enough available
data and other information technology to support valuation assets or liabilities of feature selection and market
participants in the trading of the underlying asset or liability considered consistent input value and priority as the
relevant observable inputs. Where relevant observable inputs can not get or do not get as far as practicable the use
of unobservable inputs.
6. Provision of impairment reserve for impairment of financial assets (excluding account receivables)
The company reviews the carrying value of the financial assets (excluding those measured by fair value and the
change thereof is recorded in current gains and losses) on the balance sheet date if there is objective evidence
showing impairment of the financial assets it shall provide impairment reserve.Objective evidence that a financial asset is impaired includes the following observable events:
1. Significant financial difficulty of the issuer or obligor;
2. A breach of contract by the borrower such as a default or delinquency in interest or principal payments;
3. The creditor for economic or legal reasons relating to the borrower’s financial difficulty granting a concession
to the borrower;
4. It becoming probable that the borrower will enter bankruptcy or other financial reorganizations;
5. The disappearance of an active market for that financial asset because of financial difficulties of the issuer;
6. Observable data indicating that there is a measurable decrease in the estimated future cash flows from a group of
financial assets since the initial recognition of those assets although the decrease cannot yet be identified with the
individual financial assets in the group including: adverse changes in the payment status of borrowers in the group
an increase in the unemployment rate in the country or geographical area of the borrowers a decrease in property
prices for mortgages in the relevant area or adverse changes in industry conditions that affect the borrowers in the
group;
7. Significant adverse changes in the technological market economic or legal environment in which the issuer
operates indicating that the cost of the investment in the equity instrument may not be recovered by the investor;
8. A significant or prolonged decline in the fair value of an investment in an equity instrument below its cost;
Details for impairment of financial assets are set out below:
(1) Impairment provision for available-for-sale financial assets
The Group has separately tested various available-for-sale equity instruments at the balance sheet date. It will be
defined as impairment if the fair value is lower than the initial investment cost by more than 50% (including 50%)
or the low state has lasted for no less than 1 year. While the lower proportion is between 20% and 50% the Group
will take other factors such as price fluctuation into consideration to estimate whether the equity instrument has
impaired or not.Initial segment of the "cost" of the sale of equity instruments in accordance with available cost less any principal
repayment and amortization impairment loss has been included in determining profit or loss; The fair value of the
available-for-sale equity instrument investment without an active market is determined by the present value
determined on the basis of the current market return similar to financial assets versus the future discounted cash;
the fair value of available-for-sale equity instrument investment with offers in the active market is determined by
the closing price of the stock exchange at the end of the period unless this available-for-sale equity instrument
investment has a restricted stock trade period. For the presence of restricted investments in equity instruments
available for sale according to the end of the closing price of the stock exchange market participants by deducting
the risk equity instrument within a specified period cannot be sold on the open market and the requirements to obtain
compensation.When an available-for-sale financial asset is impaired the cumulative loss arising from decline in fair value that
had been recognized in other comprehensive income is reclassified to the profit or loss even though the financial
asset has not been derecognized. The amount of the cumulative loss that is removed from equity is the difference
between the acquisition cost (net of any principal repayment and amortization) and current fair value less any
impairment loss on that financial asset previously recognized in profit or loss.If there are objective evidences showing that the value of available-for-sale debt instrument is recovered and it
relates to the matters happened after the impairment loss recognition the impairment loss recognized shall be
reversed and accounted in current profit or loss. Impairment losses recognized for equity instrument investments
classified as available-for-sale are reversed through equity. However impairment loss occurred by equity instrument
investment which is not quoted in an active market and whose fair value cannot be measured reliably and derivative
financial assets which are linked to the equity instrument and whose settlement is conditional upon delivery of the
equity instrument shall not be reversed.
(2) Impairment provision for held-to-maturity investment
For held-to-maturity investment if there is object evidence showing the investment is impaired then impairment
loss is determined based on the difference between its fair value and present value of predicted future cash flow.
After provision if there is evidence showing its value has been restored the originally recognized impairment loss
can be reversed and included in current profit or loss provided that the reversed carrying value shall not exceed the
amortized cost of the financial asset as at reversal date assuming no impairment provision had been made.
7. Offset of financial assets and financial liabilities
Financial assets and financial liabilities are stated in balance sheet separately without inner-offset. However the net
amount after inner offset is stated in balance sheet date when the following conditions are all met:
(1) The Company has legal right to offset recognized amount and the right is enforceable;
(2) The Company plans to settle on a net basis or simultaneously realize the financial assets and settle the financial
liabilities.
11. Note receivable and account receivable
(1) Account receivable with single significant amount and withdrawal single item bad debt provision
Account with single significant amount Amount of 10 million yuan above
Withdrawal method for bad debt provision of account
receivable with single significant amount
Amount of 5 million yuan above
(2) Accounts receivable whose bad debts provision was accrued by combination based on credit risk
characteristics portfolio
Portfolio Bad debt provision accrual
Age analysis method Age analysis method
Accrual bad debt provision by age analysis method in portfolio
√Applicable □Not applicable
Account age Accrual ratio for account receivable
Accrual ratio for other account
receivable
Within one year (one year included) 1.00% 1.00%
1－2 years 10.00% 10.00%
2－3 years 30.00% 30.00%
3－4 years 50.00% 50.00%
4－5 years 50.00% 50.00%
Over 5 years 80.00% 80.00%
In combination withdrawal proportion of bad debt provision based on balance proportion
□Applicable √Not applicable
In combination withdrawal proportion of bad debt provision based on other methods:
□Applicable √Not applicable
(3) Account receivable with minor single amount but with withdrawal bad debt provision for single item
Reasons for provision of bad debt reserve
There is objective evidence that the Company will not be able
to recover the money under the original terms of receivables.Provision method of bad debt reserve
Withdrawn according to the difference between present value of
expected future cash flows and the book value of the
receivables.
12. Inventory
Does the Company need to comply with disclosure requirements of the special industry?
No
1. Classification
Inventory means finished goods and merchandise that are ready for sale work-in-progress or material used
in the process of production or provision of service in the ordinary course of business. Inventory includes
merchandise in warehouse delivered goods work- in-progress raw materials subcontracted materials
packages etc.
2. Valuation method
Inventory carried initial measured by cost including purchasing cost processing cost and other costs. The
inventory in transit was valued by weighted average method.
3. Recognized standards of the net realizable value for inventory and withdrawal method on provision of
inventory
After inventory at period-end the inventories are accounted depending on which is lower between the cost
and the net realizable value or adjusted the provision of inventory. The net realizable value of inventory
products and sellable materials in normal business production is measured as the residual value after
deducting the estimated sales expense and related taxes and fees from the estimated selling price; the net
realizable value of an item of inventories subject to further processing in normal business production is
measured as the residual value after deducting the sum of the estimated costs of completion sales expense
and related taxes and fees from the estimated selling price of the sellable item. The net realizable value of
the quantity of inventories held to satisfy firm sales or service contracts is based on the contract price. If the
sales contracts are for less than the inventory quantities held the net realizable value of the excess is based
on general selling prices.
An impairment allowance if any is generally individually recognized for each type of inventories at period-end
except: For an individual impairment allowance if any is recognized for the whole category of inventories of low
value and large quantities; and for an individual impairment allowance if any is recognized for a group of
inventories which are held for the production and sales of products of a single territory and for identical or similar
usages or purposes and which are indistinguishable from other types of inventories within the group.If the previous factors resulting in deduction of inventories values disappear then such deduction of value shall be
reversed back from the original provision of inventory depreciation reserve and turns to current gains and losses.
4. Inventory system
Inventory system is the perpetual inventory system.
5. Amortization of low-value consumables and packaging materials
(1) Low-value consumables adopts the method of primary resale;
(2) Packaging materials adopts the method of primary resale;
(3) Other turnover materials adopts the method of primary resale.
13. Classified as assets held for sale
1. The confirmation standards for classifying as available for sale
The Company recognizes the non-current assets or disposal groups that meet both of the following conditions as the
component of available for sale:
(1) According to the practice in similar transactions of selling such assets or disposal groups it can be sold
immediately under current conditions;
(2) The sale is very likely to occur that is the Company has already made a resolution on one sales plan and has
obtained a certain purchase commitment and it is anticipated that the sale will be completed within one year.The confirmed purchase commitment refers to the legally binding purchase agreement signed between the Company
and other parties. The agreement contains important terms such as transaction price time and enough severe
penalties for breach of contract etc. so that it is very unlikely to make major adjustments or cancellations to the
agreement.
2. Accounting methods for available for sale
The Company does not calculate and distill depreciation or amortization for the non-current assets or disposal group
available for sale if the book value is higher than the net amount after deducting selling cost from fair value the
book value shall be written down to the net amount after deducting selling cost from fair value the write-down
amount is recognized as asset impairment loss and is included in the current gains and losses and makes provision
for impairment of available-for-sale assets at the same time.
For the non-current assets or disposal group classified as available for sale at the acquisition date compare the initial
measurement amount with the net amount after deducting selling cost from fair value based on the assumption that
it is not classified as available for sale at the initial measurement and measure by the lower amount.The above principles are suitable for all non-current assets but not including the investment real estate that adopts
fair value model for follow-up measurement or the biological assets that are measured at the net amount after
deducting selling cost from fair value or the assets formed by employee compensation or the deferred income tax
assets or the financial assets regulated by the relevant accounting standards of financial instruments or the rights
arising from the insurance contracts regulated by the relevant accounting standards of insurance contracts.
14. Long-term equity investment
1. Recognition of investment cost
(1) As for the long-term equity investment formed from business combination under the same control
accounting policy found in (V) Accounting method for business combination (not) under the same control
of Note IV
(2) Long-term equity investment obtained by other means
For long-term equity investments obtained through payment with cash then the actual payment shall be
viewed as initial investment cost. Initial investment cost including the expenses taxes and other necessary
costs that directly concerned with the long-term equity investment that acquired.For long-term equity investments obtained through issuance of equity securities then the fair value of such
securities shall be viewed as initial investment cost; for transaction expenses from issuing or own equity
instrument acquired it can be deducted from the equity when such expenses attributable directly to equity
transaction.Under the precedent condition that non-monetary assets exchanges are featured with commercial nature and
fair values of exchange-in or exchange-out assets can be reliably measured long-term equity investment
exchange-in through non-monetary assets exchange shall be recognized with initial investment cost on the
basis of the fair value of the assets exchange-out unless there is obvious evidence showing that fair value of
exchange-in assets is more reliable; as for non-monetary assets exchanges not satisfying such precedent
condition initial investment cost of exchange-in long-term equity investment falls to the carrying value of
exchange-out assets and relevant taxes payable.
For long-term equity investments obtained through debt reorganization its initial investment cost is
recognized based on fair value.
2. Subsequent measurement and recognition of gains and losses
(1) Cost method
The long-term equity investment control by invested entity shall counted by cost method and pricing on initial
investment cost cost of the long-term equity investment shall be adjusted while additional investment or dis-
investment.Other than payment actually paid for obtaining investment or cash dividend or profit included in
consideration which has been declared while not granted yet the Company recognizes investment income
according to its share in the cash dividend or profit declared for grant by the invested unit.
(2) Equity method
The Company calculates long term equity investment in associates and joint ventures under equity method. For
certain equity investments in associates indirectly held through risk investment institutions joint funds trust
companies or similar entities including investment linked insurance fund the Company measures the investment at
fair value through profit or loss.Where the initial investment cost of a long-term equity investment exceeds the Group’s share of the fair value of
the investee’s identifiable net assets at the time of acquisition no adjustment is made to the initial investment cost.Where the initial investment cost is less than the Group’s share of the fair value of the investee’s identifiable net
assets at the time of acquisition the difference is recognized in profit or loss for the period.Return on investments and other comprehensive income is recognized respectively by shares of net gains and losses
realized by the invested company and other comprehensive income after acquisition of long-term equity and book
value of such investment is adjusted accordingly. Profit or cash dividends pro rata distributed by the invested
company are to minus book value of the relative long-term investment. Book value of long-term investment is
adjusted when changes occur other than net gains and losses other comprehensive income and profit distribution
of the invested company and is to report in owners’ equity accordingly.The Company should recognized net profit of invested unit after adjustment based on fair value of vary identifiable
assets of invested unit while obtained investment while recognized net profit or net losses of invested units that
should be enjoy by investment enterprise. the un-realized transaction gains/losses attributable to investment
enterprise internally occurred between the Company affiliated units and joint-ventures should calculated by
proportion of shares-holding which should be offset than recognized investment gains/losses.When the Company is confirmed to share losses of the invested units the following order shall prevail for
disposal: first of all offset carrying value of long-term equity investment. Second for long-term equity
investment whose carrying value is not enough for offset investment loss should be continued to recognize
within the limit of carrying value of other long-term equity which substantially forms net investment to
invested units to offset carrying value of long-term items receivable. At last after the aforesaid treatment if
enterprise still bears additional duties according to investment contract or agreement projected liabilities are
recognized in accordance to the obligations which are expected to undertake and then recorded in current
gains and losses.In the event that the invested unit realizes profit in later periods the Company will adopt disposal adverse to
the above order after deduction the unrecognized share of loss i.e. write off the carrying value of the
recognized projected liabilities recover carrying value of long-term equity which substantially forms net
investment to invested unit and long-term equity investment and recognize investment income at the same
time.
3. Transfer of calculation for long term equity investment
(1) Measure at fair value transfer to equity method
For the equity investment originally held by the Company in which it has no control common control or significant
influence over the investee and which is accounted for under recognition and measurement principle as financial
assets in case that the Company becomes able to exercise significant influence or common control upon the investee
due to additional investment while no control is reached the sum of fair value of the originally held equity
investment as determined under Business Accounting Principles No.22- Recognition and Measurement Principle as
Financial Assets plus cost of the new investment shall be deemed as the initial investment cost upon calculation
under equity method.If the originally held equity investment is classified as available for sale financial assets the difference between its
fair value and carrying value and the accumulated fair value movement which is originally included in other
comprehensive income shall be transferred to current period gains and losses under equity method.In case that the initial investment cost under equity method is lesser than share of fair value of the investee’s net
identifiable assets as of the date when additional investment is made as calculated based on the latest shareholding
proportion upon additional investment carrying value of the long term equity investment shall be adjusted against
such difference which is included in current period non-operating income.
(2) Measure at fair value or calculation under equity method transfer to calculation under cost method
For the equity investment originally held by the Company in which it has no control common control or significant
influence over the investee and which is accounted for under recognition and measurement principle as financial
instrument or for long term equity investment originally held in associates or joint ventures in case that the
Company becomes able to exercise control over investee not under common control due to additional investment
the sum of fair value of the originally held equity investment plus cost of the new investment shall be deemed as
the initial investment cost upon calculation under cost method when preparing separate financial statement.
For other comprehensive income as recognized under equity method in respect of equity investment held prior to
acquisition date when the Company disposes this investment the aforesaid income shall be accounted for on the
same basis as the investee would otherwise adopt when it directly disposes relevant assets or liabilities.
For equity investment held prior to acquisition date which is accounted for under Business Accounting Principles
No.22- Recognition and Measurement of Financial Assets the accumulated fair value movement which originally
included in other comprehensive income shall be transferred to current period gains and losses upon calculation
under cost method.
(3) Calculation under equity method transfer to fair value measurement
In case that the Company lost common control or significant influence upon investee due to disposal of part equity
investment the remaining equity investment shall be calculated under Business Accounting Principles No.22-
Recognition and Measurement of Financial Assets and the difference between its fair value and carrying value as
of the date when the Company lost common control or significant influence shall be included in current period gains
and losses.
For other comprehensive income as recognized under equity method in respect of the original equity investment
when the Company ceases calculation under equity method the aforesaid income shall be accounted for on the same
basis as the investee would otherwise adopt when it directly disposes relevant assets or liabilities.
(4) Cost method transfer to equity method
In case that the Company lost control upon investee due to disposal of part equity investment and if the remaining
equity investment can exercise common control or significant influence over the investee equity method shall be
adopted when preparing separate financial statement and the remaining equity investment shall be adjusted as if it
had been stated under equity method since the acquisition.
(5) Cost method transfer to fair value measure
In case that the Company lost control upon investee due to disposal of part equity investment and if the remaining
equity investment cannot exercise common control or significant influence over the investee Business Accounting
Principles No.22- Recognition and Measurement of Financial Assets shall be adopted for accounting treatment when
preparing separate financial statement and the fair value and carrying value as of the date when control is lost shall
be included in current period gains and losses.
4. Disposal of long term equity investment
Difference between carrying value and actual acquisition price in respect of disposal of long term equity investment
shall be included in current period gains and losses. For long term equity investment under equity method the
Company shall adopt the same basis as the investee directly disposes relevant assets or liabilities when disposing
this investment and account for the part originally included in other comprehensive income under appropriate
proportion.If the terms conditions and economic impact of each transaction involved in the disposal by steps of
investment in subsidiaries fall into one or more of the following situations such transactions will be
accounted for as a package deal:
1. Such transactions are entered into simultaneously or in the case of considering the impact of each other;
2. Such transactions as a whole in order to reach complete commercial results;
3. The occurrence of one transaction is subject to that of at least one other transaction;
4. A transaction alone is not economic but otherwise when considered with other transactions.
Enterprises that lose control of their original subsidiaries due to the disposal of partial equity investment or
otherwise and therefore disqualify a package deal should prepare the relevant accounting treatment in
differentiation with individual financial statements and consolidated financial statement:
(1) In separate financial statement as for disposal of equity interest difference between carrying value and actual
acquisition price shall be included in current period gains and losses. In case that the remaining equity interests can
exercise common control or significant influence over investee it shall be stated under equity method in stead and
shall be adjusted as if the remaining equity interests had been stated under equity method since the acquisition. In
case that the remaining equity interests cannot exercise common control or significant influence over investee it
shall be accounted for under Business Accounting Principles No.22- Recognition and Measurement Principle of
Financial Instruments and the difference between its fair value and carrying value as of the date then the Company
lost control shall be included in current period gains and losses.
(2) In consolidated financial statement for those transactions occurred before lost of control in subsidiaries the
difference between disposal price and share of net assets of subsidiaries since purchase date or combination date
shall be used to adjust capital reserve (equity premium) and if capital reserve is insufficient to offset then it shall
adjust retained earnings; when the Company lost control in a subsidiary the remaining equity interests would be re-
measured at the fair value as of the control-lost date. The sum of consideration gained from the disposal of equity
and the fair value of remaining equity minus the share of net assets of original subsidiaries since the day of purchase
and based on its original shareholding ratio is credited into investment gain for the current period and off-set the
goodwill at the same time. Other comprehensive income in relation to equity investments of original subsidiaries
should be transferred to investment gain for the period at the time of loss of control.
Each transaction involved in the disposal of equity investments of subsidiaries until loss of control falls into
a package deal carrying accounting treatment on transaction of losing control rights and disposing the
company and should be accounted for accordingly in differentiation with individual financial statements and
consolidated financial statements:
(1) In consolidated financial statements difference between each payment from disposal of an equity and the book
value of such long-term equity investment before the loss of control should be recognized as other comprehensive
income and at the time of loss of control transferred to profit or loss for the current period.
(2) In consolidated financial statements difference between each payment from disposal of a subsidiary and the
share of its net assets through investment before the loss of control should be recognized as other comprehensive
income and at the time of loss of control transferred to profit or loss for the current period.
5. Criteria for common control and significant influence
Where the Company jointly controls an arrangement with other participators under agreed terms and decisions
which materially affect return of such arrangement can only exist when other participators unanimously agree on
the decisions the Company is deemed to jointly control this arrangement with other participators and the
arrangement belongs to joint venture arrangement.In case of a joint venture arrangement concluded through separate entity when the Company is judged to be entitled
to the net assets of the separate entity under relevant agreements the entity shall be viewed as a joint venture under
equity method. However when the Company is judged to be not entitled to the net assets of the separate entity under
relevant agreements the entity shall be viewed as a joint operation in which case the Company recognizes items
relating to its share of interests from the joint operation and accounts for according to relevant business accounting
rules.Significant influence refers to that investor has right to participate in making decisions relating to the financial and
operational policies of the investee while not able to control or jointly control (with others) establishment of these
policies. The following one or more conditions are based to judge whether the Company has significant influence
over investee with consideration of all facts and situations: (1)has delegate in the board of directors or similar
authority organs of investee; (2)participate in establishing financial and operational policies of the investee; (3)occur
material transactions with the investee; (4)delegate management to the investee; (5)provide key technical data to
the investee.
15. Investment real estate
Measurement
Measured by cost
Depreciation or amortization method
Investment real estate is defined as the real estate with the purpose to earn rent or capital appreciation or both
including the rented land use rights and the land use rights which are held and prepared for transfer after appreciation
the rented buildings. In addition for the vacant buildings that the Company holds for operating leases if the board
of directors makes written decisions and explicitly indicates to use for operating leases and the purpose of
management is not to change in the short term they are also reported as an investment real estate.The investment property of the Company is accounted at its cost. Cost of investment property purchased from the
external sources includes purchase payment related taxes and other expenditures which can be directly attributable
to such assets; Cost of investment property constructed by the Company comprise of the necessary expenditure
occurred during the construction for reaching the condition of planned use.The Company adopts cost method for subsequent measurement of investment real estate. Depreciation or
amortization of the buildings and land use rights according to their expected service life and net salvage value.
Expected service life for the investment real estate an rate of the net salvage value and annual amortization
(depreciation) are as:
Category Expected service life
(year)
Expected net salvage
value
Annual amortization
(depreciation) rate
Houses and buildings 10-40 5% 2.37%-9.50%
When use of investment real estate changes to be used by the company itself the company shall transfer the
investment real estate to fixed assets or intangible assets since the change date. When use of the self-use real estate
changes for earning rental or capital appreciation the company shall transfer the fixed assets or intangible assets to
investment property since the change date. For such transfer the carrying value prior to the transfer is deemed to be
the value accounted after the transfer.The company would de-realize investment real estate when the same is disposed or out of use forever and no
economic benefit would be obtained from such disposal. The disposal income from sale transfer dump or destroy
of investment real estate less its carrying value and related taxes is recorded in current gains and losses.. Fixed asset
(1) Recognition
1. Recognition of fixed assets
Fixed assets is defined as the tangible assets which are held for the purpose of producing goods providing
services lease or for operation & management and have more than one year of service life. Fixed assets should be
recognized for qualified the followed conditions at the same time:
(1) It is probable that the economic benefits associated with the assets will flow into the Company;
(2) The cost of the assets can be measured reliably.
2. Initial measurement of fixed assets
Fixed assets of the Company are measured initially by cost.
(1) The cost of outsourcing fixed assets includes the buying price import tariff and other related taxes and fees as
well as other expenses occurred before making the fixed assets reach the intended serviceable condition and can
be directly attributable to the assets.
(2) The cost of self-constructed fixed assets consists of the necessary expenses occurred before reaching the
intended serviceable condition by the construction of the assets.
(3) The fixed assets invested by the investors take the value stipulated by investment contract or agreement as the
entry value but it should take the fair value as the entry value when the value stipulated by investment contract or
agreement is not fair.
(4) When the cost of purchasing fixed assets has a delay in payment exceeding the normal credit terms and
substantially possesses financing the cost of fixed assets is determined on the basis of the present value of the
purchasing price. The balance between the actual paid cost and the present value of purchasing price is reckoned
in the current profits and losses in the credit period except for the capitalization.
(2) Depreciation methods
Category Method Years of depreciation Scrap value rate
Yearly depreciation
rate
Production buildings
Straight-line
depreciation
20-35 5 2.71-4.75
Non-production
buildings
Straight-line
depreciation
20-40 5 2.38-4.75
Temporary
dormitorysimple
room etc.Straight-line
depreciation
5-15 5 6.33-19
Gas storage bin
Straight-line
depreciation
20 5 4.75
Silo
Straight-line
depreciation
50 5 1.9
Wharf and supporting
facilities
Straight-line
depreciation
50 5 1.9
Other machinery
equipment
Straight-line
depreciation
10-20 5 4.75-9.5
Warehouse
transmission
equipment
Straight-line
depreciation
20 5 4.75
Electronic equipment
Straight-line
depreciation
2-5 5 19-47.5
Transport equipment
Straight-line
depreciation
3-10 5 9.5-31.67
Other equipment
Straight-line
depreciation
3-10 5 9.5-31.67
(3) Recognition measurement and depreciation of fixed assets held under finance lease
A fixed asset leased by the Company is recognized as the fixed asset held under finance lease if one or more of the
following criteria are met:
(1) Upon the expiry of the lease term the ownership is transferred to the Company.
(2) The Company has the option to purchase the asset at a predetermined price that is expected to be sufficiently
lower than the fair value at the date the option becomes exercisable and it is reasonably ascertained at the inception
of lease that the option will be exercised.
(3) The lease term approximates the useful life of the relevant asset even if the ownership is not transferred.
(4) At the inception of the lease the present value of the minimum lease payments is substantially equivalent to the
fair value of the leased asset.
(5) The leased assets are of such a specialized nature that only the Company can use them without major
modification.
A fixed asset held under finance lease is initially recognized at the lower of fair value of the leased asset and the
present value of the minimum lease payments while the amount of the minimum lease payments will be recognized
as the entry value of long-term account payable the difference between them will be recognized as unrecognized
financing costs. The initial direct costs such as commissions attorney’s fees and travelling expenses stamp duties
attributable to the leased item incurred during the process of lease negotiating and signing the leasing agreement
shall be recorded in the asset value. Unrealized finance costs will be amortized using actual interest rate method
over each period during the lease terms.The Company adopts depreciation policies for leased assets consistent with those of self-owned fixed assets for the
purpose of calculating the depreciation of a leased asset. If it is reasonable to be certain that the lessee will obtain
the ownership of the leased asset when the lease term expires the leased asset shall be fully depreciated over its
useful life. If it is not reasonable to be certain that the lessee will obtain the ownership of the leased asset at the
expiry of the lease term the leased asset shall be fully depreciated over the shorter one of the lease term or its useful
life.. Construction in progress
Does the Company need to comply with disclosure requirements of the special industry?
No
1. Initial measurement of constructions under progress
Self-constructed constructions under progress of the Company are carried at actual costs. Actual costs include the
necessary expenses for constructing such asset to the expected useable condition including material costs for project
labor cost related taxes and fees paid borrowing expenses to be capitalized and indirect costs to be amortized.
2. Standard and point of time for Construction in progress carrying forward to fixed assets
Fixed asset is booked with the entire expenditures occurred in the Construction in progress till it arrives at
predicted state for use. For those constructions in process of fixed assets which have already arrived at the
predicted state for use while still with absence of completion settlement they shall be carried forward to
fixed assets at the estimated value based on engineering budget construction cost or actual cost commencing
from the date of arrival of the predicted state for use. Meanwhile they shall be also subject to the depreciation
policies applicable to fixed assets of the Company for provision of depreciation. Once completion settlement
is made the original temporary estimated value shall be adjusted at the effective cost. However the original
provision of depreciation remains unchanged.
18. Borrowing expenses
1. Recognition of the borrowing expenses capitalization
Borrowing expenses that attributed for purchasing or construction of assets that are complying start to be
capitalized and counted as relevant assts cost; other borrowing expenses reckoned into current gains and
losses after expenses recognized while occurred.
Assets satisfying the conditions of capitalization are those assets of fixed investment real estate etc. which need a
long period of time to purchase construct or manufacturing before becoming usable.
Capitalizing for borrowing expenses by satisfying the followed at same time:
(1) Assets expense occurred and paid as expenses in way of cash non-cash assets transfer or debt with
interest taken for purchasing constructing or manufacturing assets that complying with capitalizing
condition;
(2) Borrowing expenses have occurred;
(3) Necessary activities occurred for reaching predicted usable statues or sale-able status for assets purchased
constructed or manufactured.
2. Period of capitalization
Capitalizing period was from the time star capitalizing until the time of suspended capitalization. The period
for borrowing expensed suspended excluded in the period.If purchasing construction or manufacturing process of an asset satisfying the conditions of capitalization
reached its predicted usable status or sale-able status capitalization suspended for borrowing expenses.If purchasing construction or manufacturing process of an asset satisfying the conditions of capitalization
completed projects and usable independently for part of the projects borrowing expenses for this kind of
assts shall suspended capitalization.If the assets have been completed in every part but can be reached the useful status or sale-able status while
completed entirely the borrowing expense shall be suspended for capitalization while the assets completely
finished in whole.
3. Period of suspended
If purchasing construction or manufacturing process of an asset satisfying the conditions of capitalization is
suspended abnormally for over 3 months capitalizing of borrowing expenses shall be suspended; the suspended
assets that satisfying the conditions of capitalization meets the necessary procedure of reaching predicted usable
status or sellable status capitalizing of borrowing expenses shall be resumed. The borrowing expenses occurred
during the period of suspended shall reckon into current gains and losses until the purchasing construction or
manufacturing process is resumed for capitalizing.
4. Calculation for capitalization amount
Interest expenses practically occurred at the current term of a special borrowing are capitalized after
deducting of the bank saving interest of unused borrowed fund or provisional investment gains.
Capitalization amounts of common borrowings are decided by the weighted average of exceeding part of
accumulated asset expenses over the special borrowing assets multiply the capitalizing rate of common borrowings
adopted. Capitalization rates are decided by the weighted average of common borrowings.
For those expenses with discount or premium determined the amortizable discount or premium in every fiscal year
by effective interest method than adjusted interest amount in every period.
19. Biological assets
Classification of biological assets
Biological assets of the Company refer to the productive biological assets. Productive biological assets included
tea tree.Biological assets are recognized when the following three conditions are fully satisfied:
(1) An enterprise owns or controls such biological assets due to the past transactions or events；
(2) It may result in the inflow of economic benefits or service potential in relation to such biological assets;
(3) Cost of such biological assets can be reliably measured.
Initial recognition of Biological assets
The biological assets will initially measured by cost while obtained. The cost of biological asset used for production
purchased from the outside includes the purchase price related taxes transportation expense insurance premium
and other charges directly attributable to the purchase of such asset. Biological asset used for production input by
investors is stated at its entry value which is calculated based on the value as stipulated in the investment contract
or agreement plus the related taxes payable. Where value stipulated in the contract or agreement is not fair the
actual cost is fixed at fair value.Subsequent measurement of biological assets
(1) Follow-up expenses
The cost of productive biological assets constituted by the actual costs of self-cultivated and constructed productive
biological assets occurred before achieving the intended production and operation goals and the follow-up expenses
such as management and protection occurred after achieving the intended production goals are included in the
current profits and losses.
(2) Depreciation of productive biological assets
Biological assets of the Company refer to the tea plants. For those productive biological assts that reached its
predicted productive purpose withdrawal depreciation by average age method. The service life was determined by
the residual terms of the residual term of land use after deducting the un-maturity period (5-year) of the tea plants
with 5 percent salvage value calculated. Reviewing the service life predicted salvage vale and depreciation method
at year-end if there have difference between the predicted number and original estimated number or have major
changes on way of profit earning than adjusted the service life or predicted salvage value or depreciation method
as account estimation variation.
(3) Disposal of biological assets:
The cost of biological assets after the shift of use is stated at the carrying amount at the time of shift of use. When
sold destroyed and inventory losses occurred the disposal income of biological assets net of carrying amount and
related taxes shall be charged to profit or loss for the current period.
Biological assets impairment
The Company inspects the productive biological assets at least at the end of each year conclusive evidence indicates
that if the recoverable amount of productive biological assets are less than the book value due to natural disasters
insect pests animal diseases or changes in market demand the Company make the provision for impairment of
biological assets and include them in the current profits and losses according to the balance between the recoverable
amount and the book value.The balance lower than the book value shall be calculated and accrued to falling price reserves or provision for
impairment of biological assets and included in the current profits and losses. Once the provision for impairment of
productive biological assets is made it cannot be reversed.
20. Oil and gas assets
21. Intangible assets
(1) Measurement use of life and impairment testing
An intangible asset is an identifiable non-monetary asset without physical substance owned or controlled by the
Company including land use right technical know-how forest tree use right trademark use right software use
right and shop management right etc.
1. Measurement of intangible assets
For those intangible assets purchased from outside the purchase value relevant taxes and other payments
attributable to predicted purpose obtained should recognized as cost for this assts. For those purchased amount that
paid overdue exceeded the normal credit condition owns financing natures actually the cost should be recognized
based on the current value while purchased.
As for the intangible assets acquired from the debtor in debt restructuring for the purpose of settlement of debt the
fair value of the intangible assets shall be based to determine the accounting value. The difference between the
carrying value of restructured debt and the fair value of the intangible assets use for settlement of debt shall be
recorded in current gains and losses.With the preceding conditions that non-monetary assets exchange has commerce nature and the fair value of the
assets exchanged in or out can be measured reliably the intangible assets exchanged in through non-monetary assets
exchange are accounted at the value based on the fair value of assets exchanged out unless there is obvious evidence
showing the fair value of assets exchanged in is more reliable; for non-monetary assets exchange not qualifying for
the preceding conditions the carrying value of assets exchanged out and related taxes payable shall be viewed as
the cost of intangible assets exchanged in without recognition of gains and losses.Intangible assets obtained by means of enterprise combined under common control recognized book-keeping value
by the book value of combined party; Intangible assets obtained by means of enterprise combined under different
control recognized book-keeping value by the its fair value.For those cost of intangible assets development internally including: the used materials labor cost and
register charge for development; amortization for other patent and concession used and interest expense
satisfying the capitalization condition during process of development; other directly expense before reached
its predated useful purpose.
2. Subsequent measurement
Analysis and determined the service life for intangible assets while obtained. And classified into intangible assets
with limited useful life and assets without certain service life.
(1)Intangible assets with limited useful life
Those intangible assets with limited useful life are evenly amortized on straight basis from the date when
they become usable to the end of expected useful life. Particular about the estimation on intangible assets
with limited service life:
Item Predicted useful life Basis
Land use right Amortized the actual rest of life after
certificate of land use right obtained
Certificate of land use right
Proprietary technology 20-year Actual situation of the Company
Trademark use right 10-year Actual situation of the Company
software use right 5-8 years Protocol agreement
forest tree use right Service life arranged Protocol agreement
Shop management right Service life arranged Protocol agreement
At end of report term revising will be performed on the useful life of intangible assets with limited useful life and
the methods of amortizing; if there is a differences been found with the original estimated number corresponding
adjustment shall prevail.
Being revised the useful life of intangible assets and amortization method at period-end shows the same as previous
(2) Intangible assets with uncertain service life
Intangible assets for which it is impossible to predict the term during which the assets can bring in economic
benefits are viewed as intangible assets with indefinite life.Intangible assets with indefinite life are not amortized during the holding period and useful life is re-
reviewed at the end of each accounting period. In case that it is still determined as indefinite after such re-
review then impairment test will be conducted continuously in every accounting period.The Company has no such intangible assets with uncertain service life after review.(2) Internal accounting policies relating to research and development expenditures
1. Detail standard for classification on research stage and exploitation stage
Research stage: stage of the investigation and research activities exercising innovative-ness for new science or
technology knowledge obtained and understanding.
Exploitation stage: stage of the activities that produced new or material advance materials devices and products
that by research results or other knowledge adoption in certain plan or design before the commercial production or
usage.The expenditure of the research stage in R&D project internally shall reckon into current gains and losses while
occurred.
2. Standards for capitalization satisfaction of expenditure in exploitation state
Intangible assets recognized for expenditure in exploitation stage by satisfying the followed at same time:
(1) Owes feasibility in technology and completed the intangible assets for useful or for sale;
(2) Owes the intention for completed the intangible assets and for sale purpose;
(3) Way of profit generated including: show evidence that the products generated from the intangible assets owes a
market or owes a market for itself; if the intangible assets will use internally than show evidence of useful-ness;
(4) Possess sufficient technique financial resources and other resources for the development of kind of intangible
assets and has the ability for used or for sale;
(5) The expenditure attributable to the exploitation stage for intangible assets could be measured reliably.
Expenditure happened in development phase not satisfying the above conditions is included in current period
gains and losses when occurs. Development expenditure previously included in gains and losses in previous
periods will not be re-recognized as assets in later periods. Capitalized development expenditure is stated in
balance sheet as development expenditure and is transferred to intangible assets when the project is ready
for planned use.
22. Impairment of long term assets
Long term asset is judged whether for which there is indication of impairment on balance sheet date. If there is
indication of impairment the Company would estimate its recoverable amount based on single asset; if it is difficult
to estimate the recoverable amount of single asset then the assets group which the single asset belongs to is based
to determine the recoverable amount of the assets group.Recoverable amount of an asset is determined at the higher of its fair value less disposal fee and present value of its
predicted future cash flow.If measurement of recoverable amount shows that the recoverable amount of long term asset is lower than carrying
value and then the carrying value shall be deducted to recoverable amount with the deducted amount recognized
as impairment loss which is included in current period gains and losses meanwhile asset impairment provision
shall be made accordingly. Once recognized asset impairment loss would not be reversed in future accounting
period.Once an asset is recognized for impairment loss its depreciation or amortization expense would be adjusted in
future periods so as to systematically allocate the adjusted asset carrying value (after deduction of predicted net
residual value) during the remaining useful life.Goodwill arising from business combination and intangible assets with indefinite useful life shall be tested annually
for impairment whether or not there is indication of impairment.When goodwill impairment testing comes book value of goodwill is allocated to asset group or combination benefit
from the synergies of the business combination. When conducting impairment test for relevant asset group with
inclusion of goodwill in case that there is indication of impairment for such asset group impairment test would be
firstly conducted in respect of the asset groups without inclusion of goodwill. Then it shall calculate the recoverable
amount and determine the corresponding impairment loss as compared to its carrying value. Second asset group
with inclusion of goodwill would be tested for impairment. If it is found after comparison between the carrying
value and recoverable amount of the asset group that the recoverable amount is less than carrying value the
Company would recognize impairment loss for goodwill.
23. Long term prepaid expense
Long term prepaid expense represents the expense which the Company has occurred and shall be amortized in the
current and later periods with amortization period exceeding one year. Long term prepaid expense is amortized
during the beneficial period under straight line method.
24. Staff remuneration
(1) Short term remuneration
Employee remuneration refers to the various forms of remuneration or compensation given by the Company to
obtain the services provided by the employees or to terminate the labor relations. Employee remuneration includes
short-term remuneration after-service benefits dismissal benefits and other long-term employee benefits.Short term remuneration refers to all the staff remuneration payable by the Company to its staff within 12 months
after the end of annual reporting period in which staff provides relevant services other than post office benefit and
dismissal benefits. The Company recognizes short term remuneration payables as liabilities during the accounting
period during which staff provides services and includes in cost and expense of relevant asset according to the
beneficial parties of such services.
(2) Post office benefits
Post office benefits refer to kinds of remuneration or benefits granted by the Company to staff for their provision of
service upon retirement or release of employment other than short term remuneration and dismissal benefits.Post benefit plan is categorized as defined withdraw plan.
Defined withdraw plan under post office benefit mainly represents participation into social basic pension insurance
and unemployment insurance operated by labor and social security authorities. In addition to social basic pension
insurance and unemployment insurance employees who meet the requirements of the Enterprise Annuity Scheme
of Shenzhen Cereal Group Co. Ltd. can apply to participate in the annuity plan established by the company. During
the accounting period when employee provides services for the Company the contribution calculated under defined
withdraw plan would be recognized as liabilities and included in current gains and losses or relevant asset cost.Other than periodic payment of the aforesaid amounts in compliance with national standards the Company is not
obliged to make other payment.
(3) Dismissal benefit
Dismissal benefit represents compensation paid to employees for release of employment before expiration or as
compensation for their willing of cut Liabilities arising from dismiss benefit shall be included in current profit and
loss when the company cannot unilaterally withdraw from the termination plan or take redundancy offer and when
reorganize the payment of termination benefits related to the cost.The Company provides early retirement benefits to employees who accept early retirement arrangements. Early
retirement benefits refer to the wages paid to employees who have not reached the retirement age specified by the
state but voluntarily quit from the operating posts after approved by the management of the Company and the social
insurance premiums paid for them. The Company pays early retirement benefits to early retired employees from the
date of the early retirement arrangement until the employees reaches the normal retirement age. For the early
retirement benefits the Company will perform accounting treatment in accordance with the termination benefits
and will recognize the wages to be paid to the early retired employees and the social insurance premiums to be paid
during the period from the date ceasing service to the normal retirement date as liabilities and include in the current
profit and loss in one lump sum. Changes in actuarial assumptions of early retirement benefits and the difference
caused by adjustment of welfare standards are included in profit or loss when incur.(4) Other long term staff benefits
Other long term staff benefits refers to all the other staff benefits except for short term remuneration post office
benefit and dismissal benefit.
For other long term staff benefits satisfying conditions under defined withdraw plan the contribution payables shall
be recognized as liabilities and included in current gains and losses or relevant asset cost during the accounting
period in which the staff provides services to the Company.
25. Accrual liability
1. Recognition standards for accrual liability
Responsibilities connected to contingent issues and satisfied all of the following conditions are recognized as accrual
liabilities:
The responsibility is a current responsibility undertaken by the Company;
Fulfilling of the responsibility may lead to financial benefit outflow;
The responsibility can be measured reliably for its value.
2. Measurement
Accrual liabilities shall conduct initial measurement by best estimation of expenditures needed by fulfillment of
current responsibilities.While determined the best estimation take the risks uncertainty and periodic value of currency that connected to
the contingent issues into consideration. For major influence from periodic value of currency determined best
estimation after discount on future relevant cash out-flow.Treatment for best estimation:
If the expenditure has a continuous range and with similar possibility within the range the best estimation should
determined by the middle value within the range that is the average amount between the up and low limit.If the expenditure has no continuous range or has a continuous range but with different possibility within the range
the possibility amount shall determined as the best estimation while single events involved by contingency; if many
events were involved by contingency the best estimation shall be determined by various results and relevant
probability.If the expenses for clearing of predictive liability is fully or partially compensated by a third party and the
compensated amount can be definitely received it is recognized separated as asset. Though the compensated amount
shall not greater than the book value of the predictive liability
. Share-based payment
27. Other financial instrument of preferred stocks and perpetual bond
28. Revenue
Does the Company need to comply with disclosure requirements of the special industry?
No
1. Sales of goods
When main risks and rewards attached to the ownership of goods have been transferred to the buyer reserved neither
continuous management power nor effective control over the goods incoming payment can be measured reliably
relative financial benefit possibly inflow to the company cost occurred or will occur can be reliably measured sales
income of goods is recognized.The product sales of the Company include domestic sales and export sales the sales revenue of domestic sales is
recognized after the goods is delivered and conforms to the relevant causes of the contract; the sales revenue of
export sales is recognized after the goods is sent out and declared and conforms to the relevant causes of the contract.
2. Provide labor services
If the results of the labor service transaction on the balance sheet date can be reliably estimated the labor service
income will be recognized by the percentage of completion method. The completion schedule of the labor service
transaction is determined based on the measurement of the completed work.The results of the labor service transaction can be reliably estimated which means it can meet the following
conditions:
(1) The amount of income can be reliably measured;
(2) The relevant economic benefits are likely to flow into the enterprise;
(3) The completion schedule of the transaction can be reliably determined;
(4) The costs incurred and to be incurred in the transaction can be reliably measured.
The total amount of labor service income is determined by the received or receivable contract or agreement price
except that the contract or agreement price received or receivable is not fair. On the balance sheet date the current
labor service income is determined by the amount that the total labor service income multiplies by the completion
schedule and deducts the accumulated labor income from the previous accounting period. At the same time the
current labor cost is carried forward by the amount that the total labor service cost multiplies by the completion
schedule and deducts the accumulated labor cost from the previous accounting period.If the results of the labor service transaction on the balance sheet date cannot be reliably estimated they shall be
disposed as follows:
(1) If the labor costs incurred is estimated to be compensated the labor service income shall be determined according
to the amount of labor costs incurred and the labor costs shall be carried forward at the same amount.
(2) If the labor costs incurred is estimated not to be compensated the labor costs incurred shall be included in the
current profit and loss and the labor service income shall not be recognized.When the contract or agreement signed by the Company with other enterprises includes the sale of goods and the
rendering of labor services if the parts of the sales of goods and the parts of the rendering of labor service can be
distinguished and can be separately measured treat the part of the sales of goods as the sales of goods and treat the
part of the rendering of labor services as rendering of labor services. If the parts of the sales of goods and the parts
of the rendering of labor service cannot be distinguished or can be distinguished but cannot be separately measured
treat the part of the sales of goods and the parts of the rendering of labor service both as the sales of goods.Recognize revenue for the grain and oil dynamic storage and rotation services provided by the Company for the
Shenzhen Municipal Government when the relevant labor service activities occur. Specifically monthly calculate
and recognize the government service income based on the actual storage grain and oil quantity and the storage
price stipulated by “Operational Procedures for Government Grain Storage All-in Cost of Shenzhen” and
“Operational Procedures for Edible Vegetable Oil Government Reserve All-in Cost of Shenzhen”.
3. Recognition of the right to use the transferred assets
Financial benefit attached to the contract is possibly inflow to the company; Overall income of the contract can be
measured reliably. Determined the use right income for transaction assets respectively as followed:
(1) Amount of interest income: determined by the time and effective interest rate of the currency capital used by
other people.
(2) Amount of income from use: determined by the charge time and calculation method agreed in the relevant
contract or agreement.
(3) For the income from real estate dock warehouse and other property leasing and terminal docking business
calculate and determine the rental income and warehousing logistics income according to the chargeable time and
method as stipulated in the contract or agreement.
29. Government Grants
1. Types
Governments grants of the Company refer to the monetary and non-monetary assets obtained from government for
free and are divided into those related to assets and others related to revenues.Government grants related to assets refer to those obtained by the Company and used for purchase or construction
of or otherwise to form long-term assets. Government subsidies related to revenue refer to those other than
government subsidies related to assets.
2. Recognition of government grants
At end of the period if there is evidence show that the Company qualified relevant condition of fiscal supporting
polices and such supporting funds are predicted to obtained than recognized the amount receivable as government
grants. After that government grants shall recognize while actually received.Government grants in the form of monetary assets are stated at the amount received or receivable.Government grants in the form of non-monetary assets are measured at fair value; if fair value cannot be
obtained a nominal amount (one yuan) is used. Government grants measured at nominal amount is
recognized immediately in profit or loss for the current period.
3. Accounting treatment
Based on the nature of economic business the Company determines whether a certain type of government subsidy
business should be accounted for by using the total amount method or the net amount method. In general the
Company only chooses one method for similar or similar government subsidy services and this method is
consistently applied to the business.Item Calculation content
Based on gross method All business of government grants
Government grants in relation to purchase of long-term assets such as fixed assets or intangible assets shall be
recognized as deferred income. And reckoned into gains/losses by installment with reasonable and systematic
approach according to the useful life of such asserts that purchased or constructed
As for the government grants with income concerned which has compensated relevant expenses and losses occurred
in later period than recognized as deferred income and reckoned into current gains/losses during the period while
relevant expenses or losses determined; for those government grants which has compensated relevant expenses and
losses that occurred reckoned into current gains/losses while acquired.Government grants relevant to daily activities of enterprises are included in other income; government grants
irrelevant to daily activities of enterprises are included in non-operating income and expenditure.The government grants relevant to discounted interest on policy concessional loans is used to offset the relevant
borrowing costs; the fair value of borrowings is used as the entry value of borrowings and the borrowing costs are
calculated according to the actual interest rate method the balance between the actual amount received and the fair
value of borrowings is recognized as deferred income. Deferred income is amortized to offset the related borrowing
costs by adopting the actual interest rate method in duration of borrowings.When a recognized government grant needs to be returned adjust the book value of assets if it is used to offset the
book value of underlying assets at initial recognition; if there is a related deferred income balance offset the book
balance of relevant deferred income and include the excess in current profit or loss; if there is no related deferred
income and directly include in the current profit or loss.. Deferred income tax assets and deferred income tax liabilities
Deferred income tax assets and liabilities are measured and recognized based on the difference (temporary
difference) between the taxation bases of the assets and liabilities and their carrying value. As of the balance sheet
date deferred income tax assets and liabilities are measured at the tax rate applicable during the period in which the
assets are recovered or liabilities are settled.
1. Reference for recognition of deferred income tax assets
Deferred income tax asset arising from deductible temporary difference is recognized to the extent of
assessable income which is likely to acquire to offset deductible temporary difference and for which
deductible losses and tax credit for subsequent years can be carried forward. However deferred income tax
assets arising from initial measurement of assets or liabilities in transactions with the following
characteristics would not be recognized: (1) the transaction is not business combination; (2)occurrence of
the transaction would neither affect accounting profit nor affect assessable income or deductible loss.
For deductible temporary difference relating to investment in associates the Company would recognize
deferred income tax assets accordingly if the following conditions are met: temporary difference is likely to
be reversed in foreseeable future and it is likely to acquire assessable income against which deductible
temporary difference is utilized.
2. Basis for determination of deferred income tax liabilities
Assessable temporary difference which should be paid while not paid yet for the current and previous periods
is recognized as deferred income tax liabilities excluding:
(1) Temporary difference arising from initial measurement of goodwill;
(2) Transaction or issue arising from non business combination and its occurrence would neither affect
accounting profit nor affect temporary difference arising from assessable income (or deductible loss);
(3) For assessable temporary difference relating to investments in subsidiary or associate timing for reversal
of the temporary difference can be controlled and it is likely that the difference would not be reversed in
foreseeable future.
3. Deferred tax assets and liabilities are offset if all the following conditions are met.
(1) An enterprise has the legal rights to settle the income tax assets and income tax liabilities for the current period
by net amount;
(2) They relate to income taxes levied by the same tax authority on either the taxable entity has a legally enforceable
right or set off current income tax assets against current income tax liabilities and different taxable entities which
either intend to settle the current income tax liabilities and assets on a net basis or to realize the assets and settle
the liabilities simultaneously in each future period in which significant amounts of deferred tax liabilities or assets
are expected to be settled or recovered.. Lease
(1) Accounting for operating lease
If the lease terms substantially transfer all risks and rewards related to the ownership of leased asset to the lessee
the lease is a finance lease and the other leases are operating leases.
Accounting for operating lease
(1) Assets lease-in by Operating:
The rental fee paid for renting the properties by the company are amortized by the straight-line method and reckoned
in the current expenses throughout the lease term without deducting rent-free period. The initial direct costs related
to the lease transactions paid by the company are reckoned in the current expenses.When the lessor undertakes the expenses related to the lease that should be undertaken by the company the company
shall deduct the expenses from the total rental costs share by the deducted rental costs during the lease term and
reckon in the current expenses.
(2) Operating leased assets:
Rental obtained from assets leasing during the whole leasing period without rent-free period excluded shall be
amortized by straight-line method and recognized as leasing revenue. The initial direct costs paid with leasing
transaction concerned are reckoned into current expenditure; the amount is larger is capitalized when incurred and
accounted for as profit or loss for the current period on the same basis as recognition of rental income over the entire
lease period.When the company undertakes the expenses related to the lease that should be undertaken by the lessor the company
shall deduct the expenses from the total rental income and distribute by the deducted rental costs during the lease
term.
(2) Accounting for financing lease
Accounting for financing lease
(1) Assets lease-in by financing: On the beginning date of the lease the entry value of leased asset shall be at the
lower of the fair value of the leased asset and the present value of minimum lease payment at the beginning date of
the lease. Minimum lease payment shall be the entry value of long-term accounts payable with difference
recognized as unrecognized financing expenses.The basis valuation and depreciation method of financing lease assets see Note IV-(XVI) Fixed Assets.Unrecognized financing expenses shall be reckoned in financial expenses and amortized and using effective interest
method during the leasing period.
(2) Finance leased assets: on the lease commencement date the company affirms the balance among the finance
lease receivables the sum of unguaranteed residual value and its present value as the unrealized financing income
and recognizes it as the rental income during the period of receiving the rent. For the initial direct costs related to
the rental transaction the company reckons in the initial measurement of the finance lease receivables and reduces
the amount of income confirmed in the lease term.
32. Other important accounting policy and estimation
Production Safety Fee
The production safety fees drawn by the company in accordance with the provisions of the State shall be included in the cost of related
products or current profits and losses and also in the subject of "special reserve". If the use of the extracted safety production costs
time and belongs to expenditure the special reserve shall be directly reduced. If a fixed asset is formed the expenditure incurred by
the project under construction shall be collected and recognized as a fixed asset when the safety project is completed to its intended
usable state; meanwhile the special reserve shall be deducted according to the cost of forming the fixed asset and the accumulated
depreciation of the same amount shall be confirmed. The fixed assets are no longer depreciated in the later period.
33. Changes of important accounting policy and estimation
(1) Changes of major accounting policies
□Applicable √Not applicable
(2) Changes of important accounting estimate
√Applicable □Not applicable
Content & reasons Approval procedure
The time when changes in
accounting estimate begin to
apply
Note
Identification standards for
account receivable with
significant single amount
classification of credit risk
portfolio and change of
percentage of provision for
bad debts in age portfolio;
Depreciable life of investment
real estate and unification of
residual value rate ;
The change has deliberated on
24th session of 9th BOD and no
need to deliberated in
shareholder general meeting
2018-12-29
Depreciable life of fixed
assets and unification of
residual value rate ;
Unification of amortization
period for intangible assets
Explanation:
The Company purchase 100 percent equity of Shenzhen Cereals Group Co. Ltd held by Fude Capital through issuing shares SZCG
comes to wholly-owned subsidiary of the Company. Main business of the Company has increased grain and oil reserves grain and oil
trading and processing etc. on the basis of the original tea and tea products business. In order to reflect the Company’s financial status
and operation results objectively truthfully and fairly the Company according to the business scale and industry characteristics after
reorganization and reference to relevant accounting estimates of comparable listed companies in the same industry organizing and
change part of the original accounting estimate of the Company.In line with the regulation of “Accounting Standards for Business Enterprise No. 28- Change of Accounting policy accounting estimateand errors correction” the change in accounting estimates is treated by the future applicable method without retrospective adjustment
of the disclosed financial reports and it will not affect the previous financial status and operation results. Main impact on the financial
statement for year of 2018 including: make changes and reduction of Account receivable to 6514050.72 yuan and other receivable
as4645425.95 yuan; make changes and increase the assets impairment loss to 11159476.67 yuan.
34. Other
VI. Taxes
1. Type of tax and rate for main applicable tax
Taxes Basis Rate
VAT
Service income from goods sales and
taxable sales
16%( original was 17%) 10%(original
was 11%) 6% 5% 3%
Urban maintenance and construction tax Turnover tax payable 7% 5%
Enterprise income tax Taxable income 25% 15% 0%
Educational surtax Turnover tax payable 5%
Rate of income tax for different taxpaying body:
Taxpaying body Rate of income tax
The Company 25%
Shenbao Huacheng 15%
Including:Shantou Branch of Shenbao Huacheng 25%
Wuyuan Ju Fang Yong 15%
Shenbao Sanjing 25%
Huizhou Shenbao Science & Technology 25%
Huizhou Shenbao Food 25%
Shenbao Propertie 25%
Shenbao Industrial & Trading 25%
Hangzhou Ju Fang Yong 25%
Shenbao Technology Center 25%
Fuhaitang Ecological 25%
Chunshi Network 25%
Shenshenbao Investment 25%
Shenshenbao Tea Culture 25%
Yunnan Supply Chain 25%
Ju Fang Yong Trading 25%
Shenbao Rock Tea 25%
Pu’er Tea Trading Center 25%
Shenbao Tea-Shop 25%
Fuhaitang Catering 25%
SZCG 25% tax exemption for some businesses
SZCG Real Estate Development 25%
Shenzhen Flour Tax free
SZCG Quality Inspection 25%
Hualian Grain & oil trading 25%
SZCG Cold-Chain Logistic 15%
SZCG Doximi 25%
Hainan Haitian 25%
Dongguan Logistics 25%
SZCG Big Kitchen 15%
SZCG Storage (Yingkou) 25%
SZCG Property 25%
Dongguan Food Industrial Park 25%
Dongguan Food Trade 25%
Dongguan Golden 25%
Shuangyashan SZCG Zhongxin 25%
Hongxinglong Nongken Industrial Park 25%
2. Tax preferential
1. VAT discounts and approval
According to the “Notice of the Ministry of Finance and the State Administration of Taxation on the Issues
Concerning the VAT Collection and Exemption of Grain Enterprises (CSZ [1999] No. 198)” and “Shenzhen TaxService State Taxation Administration and Shenzhen Finance Bureau SGSF (SCF [1999] No.428)” confirming that
SZCG the Company’s subsidiary and its subsidiaries are state-owned grain purchase and sale enterprises that
undertake grain collection and storage tasks for Shenzhen the grain sold is subject to tax-free declaration by ruleand enjoys the exemption from VAT. In addition according to the stipulation of the “Announcement of State
Administration of Taxation on Relevant Management Matters After Clarifying the Cancellation of the Approval ofSome VAT Preferential Policies” (SAT Announcement 2015 No. 38) the approval for exemption from VAT and the
involved tax review and approval procedures for the state-owned grain enterprises that undertake grain collection
and storage tasks other grain enterprises that operate tax-free projects and enterprises that have edible vegetable oil
sales business for government reserves are cancelled and changed to record management. The taxpayer does not
change the content of the record materials during the period of tax exemption can be put on a one-time record. In
December 2013 SZCG obtained the notice of the VAT preferential record (SGSFJBM [2013] No.2956) from
Shenzhen Futian State Administration of Taxation. In the case of no change in policy this limited filing period
started on January 1st 2014.The VAT input tax amount of the preferential item was separately accounted for and the input VAT calculation
method cannot be changed within 36 months after the selection. As of December 31 2018 the tax exemption policy
has been in effect since its filing in 2014 and the company’s VAT input tax has not changed since it was accounted
for separately in 2014 so the company continues to enjoy the tax preference.
2. Stamp duty house property tax and urban land use tax preferences
According to the stipulations of “Notice of the Ministry of Finance and the State Administration of Taxation on theRelevant Tax Policies Concerning Some National Reserved Commodities (CS [2013] No. 59)” the “Notice of theMinistry of Finance and the State Administration of Taxation on the Relevant Tax Policies Concerning SomeNational Reserved Commodities (CS [2016] No. 28)” and “Notice of Shenzhen Financial Committee and ShenzhenLocal Taxation Bureau on Issuing the List of Shenzhen Reserve Commodity Management Companies and Reserve
Enterprises (SCF [2016] No. 26)” confirming that the fund account book of SZCG the Company’s subsidiary and
its direct depots is exempt from stamp duty confirming that the written purchase and sale contracts of SZCG in the
process of undertaking the commodity reserve business are exempt from stamp duty and confirming that SZCG’s
house property and land used for the commodity reserve business are exempt from house property tax and urban
land use tax. The execution time limit for this tax preference policy is up to December 31 2018.
3. Corporate income tax
(1) Shenbao Huacheng a subsidiary of the Company obtained the “High-tech Enterprise Certificate” (Certificate
number is GR201744203462) jointly issued by Shenzhen Science and Technology Innovation Committee Shenzhen
Financial Bureau Shenzhen Tax Service State Taxation Administration and Shenzhen Local Taxation Bureau on
October 31 2017 which is valid for three years. According to the relevant preferential policies of the state for high-
tech enterprises the qualified high-tech enterprises shall pay the corporate income tax at a reduced income tax rate
of 15% within three years from the year of the determination and Shenbao Huacheng enjoys the tax preferential
policy from 2017 to 2019.(2) The Company’s subsidiary Wuyuan Jufangyong obtained the “High-tech Enterprise Certificate” (Certificate
number is GR201836000703) jointly issued by the Science and Technology Department of Jiangxi Province the
Finance Department of Jiangxi Province and Jiangxi Provincial Tax Service State Taxation Administration on
August 13 2018 which is valid for three years. According to the relevant preferential policies of the state for high-
tech enterprises the qualified high-tech enterprises shall pay the corporate income tax at a reduced income tax rate
of 15% within three years from the year of the determination and Wuyuan Jufangyong enjoys the tax preferential
policy from 2018 to 2020.
(3) According to the “Notice on the Issues Concerning the Treatment of Corporate Income Taxes for Fiscal Fundsof Special Purposes of the Ministry of Finance and the State Administration of Taxation (CS [2009] No. 87) the
government service income obtained by SZCG the Company’s subsidiary and its subsidiaries from the
government’s grain reserve business is a special-purpose fiscal fund which can be used as non-taxable income if
eligible and is deducted from the total income when calculating the taxable income. The expenses arising from the
above-mentioned non-taxable income for expenditure shall not be deducted when calculating the taxable income;
the calculated depreciation and amortization of the assets formed by non-taxable income for expenditure shall not
be deducted when calculating the taxable income.
(4) Shenzhen Flour a subsidiary of the Company is a flour primary processing enterprise according to thestipulations of the “Notice on Issuing the Scope (Trial) of Primary Processing of Agricultural Products Applicableto the Corporate Income Tax Preferential Policy (CS [2008] No. 149)” and the “Supplementary Notice on the Scopeof Primary Processing of Agricultural Products Applicable to the Corporate Income Tax Preferential Policy of theMinistry of Finance and the State Administration of Taxation” (CS [2011] No. 26) the wheat primary processing is
exempt from income tax.
(5) According to the Article one of the “Notice of the Ministry of Finance and the State Administration of Taxationon the Corporate Income Tax Preferential Policies and Preferential Catalogue for Guangdong Hengqin New District
Fujian Pingtan Comprehensive Experimental Zone and Shenzhen Qianhai Shenzhen-Hong Kong Modern ServiceIndustry Cooperation Zone” (CS [2014] No.26) levy the corporate income tax at a reduced income tax rate of 15%
for the encouraged industrial enterprises located in Hengqin New District Pingtan Comprehensive Experimental
Zone and Qianhai Shenzhen-Hong Kong Modern Service Industry Cooperation Zone. The Company’s subsidiaries
SZCG Cold Chain Logistics and SZCG Big Kitchen are registered in Shenzhen Qianhai Cooperation Zone and
meet the preferential tax conditions according to the relevant policies in the Cooperation Zone their income tax
enjoys a tax preference of 15% and this preferential tax policy shall be up to 2020.
3. Other
VII. Annotation to main items of consolidated financial statements
1. Monetary fund
RMB/CNY
Item Ending balance Opening balance
Cash on hand 282322.45 555961.15
Cash in bank 631190032.12 543565898.62
Other monetary fund 165985.11 318879.68
Total 631638339.68 544440739.45
Other explanation
The Company did not has account pledge freeze or has potential risks in collection ended as 31 December 2018
2. Financial assets measured by fair value and with the variation recorded into current gains/losses
RMB/CNY
Item Ending balance Opening balance
Tradable financial assets 1124927.96 1599668.20
Equity investment 1124927.96 1599668.20
Total 1124927.96 1599668.20
Other explanation
Ending balance refers to the 258011 shares of A-stock under the name of “CBC-A”
3. Derivative financial assets
□Applicable √Not applicable
4. Note receivable and account receivable
RMB/CNY
Item Ending balance Opening balance
Note receivable 1027635.04 658942.50
Account receivable 473646886.64 193727800.13
Total 474674521.68 194386742.63
(1) Note receivable
1)Classification of notes receivable
RMB/CNY
Item Ending balance Opening balance
Bank acceptance bill 1027635.04 658942.50
Total 1027635.04 658942.50
)Notes receivable already pledged by the Company at the end of the period
RMB/CNY
Item Amount pledge at period-end
3) Notes endorsement or discount and undue on balance sheet date
RMB/CNY
Item Amount derecognition at period-end Amount not derecognition at period-end
4)Notes transfer to account receivable due for failure implementation by drawer at period-end
RMB/CNY
Item Amount transfer to account receivable at period-end
Other explanation
(2) Account receivable
1)Classification of account receivable
RMB/CNY
Category
Ending balance Opening balance
Book balance
Bad debt
provision Book
value
Book balance Bad debt provision
Book
value Amoun
t
Ratio
Amoun
t
Accrua
l Ratio
Amo
unt
Ratio Amount
Accrual
Ratio
Account receivable
with single
significant amount
and withdrawal
bad debt provision
separately
10455
627.54
1.80%
10455
627.54
100.00
%
1045
5627
.54
2.95%
10455
627.54
100.00%
Account receivable
withdrawal bad
debt provision by
group of credit risk
characteristics
47905
8935.6
8
82.60
%
71659
79.50
1.50%
47189
2956.1
8
1966
7400
1.52
55.42
%
29462
01.39
1.50%
193727
800.13
Account receivable
with single minor
amount but
withdrawal bad
debt provision for
single item
90465
251.52
15.60
%
88711
321.06
98.06
%
17539
30.46
1477
6475
4.39
41.64
%
147764
754.39
100.00%
Total
57997
9814.7
4
100.00
%
10633
2928.1
0
18.33
%
47364
6886.6
4
3548
9438
3.45
100.00
%
161166
583.32
45.41%
193727
800.13
Account receivable with single significant amount and withdrawal bad debt provision separately at period end:
√Applicable □Not applicable
RMB/CNY
Account receivable (by
enterprise)
Ending balance
Account receivable Bad debt provision Accrual Ratio Accrual causes
Guangzhou Jinhe Feed
Co. Ltd
10455627.54 10455627.54 100.00%
Slightestly possibly
taken back
Total 10455627.54 10455627.54 -- --
Account receivable provided for bad debt reserve under aging analysis method in the groups
√Applicable □Not applicable
RMB/CNY
Account age
Ending balance
Account receivable Bad debt provision Accrual Ratio
Subitem of within one year
Subtotal of within one year 435983012.92 4342575.39 1.00%
1-2 years 1082033.98 108203.40 10.00%
2-3 years 311445.72 93433.72 30.00%
3-4 years 1057518.76 528759.39 50.00%
4-5 years 277613.73 138806.87 50.00%
Over 5 years 2442750.91 1954200.73 80.00%
Total 441154376.02 7165979.50 1.62%
Explanation on combination determines:
In combination withdrawal proportion of bad debt provision based on balance proportion for account receivable
□Applicable √Not applicable
In combination withdrawal proportion of bad debt provision based on other methods for account receivable
2) Bad debt provision accrual collected or switch back
Bad debt provision accrual was 7919578.77 Yuan; the amount collected or switches back amounting to 1432515.04 Yuan.
Important bad debt provision collected or switch back:
RMB/CNY
Enterprise Amount collected or switch back Collection way
3)Account receivable actual charge off in the Period
RMB/CNY
Item Amount charge off
Major charge-off for the major receivable:
RMB/CNY
Enterprise
Nature of account
receivable
Amount charge off
Cause of charge-
off
Charge-off
procedures
Resulted by
related transaction
(Y/N)
Charge-off for account receivable:
4)Top 5 receivables at ending balance by arrears party
Enterprise Ending balance Proportion in total
receivables at ending
balance(%)
Bad debt provision accrual
Customer 1 81183967.20 14.00 811839.67
Customer 2 43481868.90 7.50 434818.69
Customer 3 41762119.25 7.20 417621.19
Customer 4 16163634.14 2.79 161636.34
Customer 5 15745925.73 2.71 157459.26
Total 198337515.22 34.20 1983375.15
5)Account receivable derecognition due to financial assets transfer
6)Assets and liabilities resulted by account receivable transfer and continues involvement
Other explanation
The balance of accounts receivable at the end of this period increased by 225085431.29 yuan (63.42%) compared with that at the
beginning of the period mainly due to the relaxation of customer credit policy in the reporting period of Hualian Grain and Oil
Trade a subsidiary of the company.
Bad debt provision accrual of 7919578.77 yuan in the period; switch back for bad debt provision of 1432515.04 yuan bad debt
provision of 61320718.95 yuan charge off in the period
According to the “Agreement on the Issuance of Shares to Purchase Assets” signed by the Company and Fude Capital in March
2018 the “General Agreement on Major Asset Restructuring of State-owned Assets and Related Equity of Shenzhen Cereals Group
Co. Ltd.” and the “Agreement on Free Transfer of State-owned Assets of Zhanjiang Haitian Aquatic Feed Co. Ltd.” signed by
SZCG the Company’s subsidiary and Fude Capital in June 2018 in the current period the Company transferred the stock equity of
Zhanjiang Haitian Aquatic Feed Co. Ltd. to Fude Capital free of charge the corresponding account of Zhanjiang Haitian Aquatic
Feed Co. Ltd. has fully accrued the bad debts provision for receivables and the provision for bad debts was stripped off at the same
time so the corresponding bad debt provision for accounts receivable of RMB 61253852.37 on the stripping date of its assets was
written off.
5. Account paid in advance
(1) Account age of account paid in advance
RMB/CNY
Account age
Ending balance Opening balance
Amount Ratio Amount Ratio
Within one year 83282051.24 99.50% 44409114.54 98.63%
1-2 years 70556.78 0.09% 128246.97 0.28%
2-3 years 7670.34 0.01% 369435.97 0.82%
Over 3 years 336591.71 0.40% 120738.30 0.27%
Total 83696870.07 -- 45027535.78 --
Reasons for significant repayment with over one year age without settle:
(2) Top 5 accounts paid in advance at closing balance collected by objects
Enterprise Ending amount Ratio in total
account paid
in
advance(%)
Time Unsettled reasons
Supplier 1 46447200.02 55.49 Within one year The contract is being
carried out
Supplier 2 14134554.06 16.89 Within one year The contract is being
carried out
Supplier 3 9558800.00 11.42 Within one year The contract is being
carried out
Supplier 4 3351363.64 4.00 Within one year The contract is being
carried out
Supplier 5 2060220.80 2.46 Within one year The contract is being
carried out
Total 75552138.52 90.26
Other explanation
Ending balance of account paid in advance increased 39116834.29 Yuan over that of period-beginning with -
87.75 percent up mainly because at end of December 2018 subsidiary of the Company Dongguan Logistics
entered into a Procurement Contract with Xiamen Minsui Grain & oil trading Co. Ltd and with the amount of
goods paid in advance
6. Other account receivable
RMB/CNY
Item Ending balance Opening balance
Interest receivable 561500.00
Other account receivable 33241928.45 45626470.91
Total 33803428.45 45626470.91
(1) Interest receivable
1)Category of interest receivable
RMB/CNY
Item Ending balance Opening balance
Fixed deposits 561500.00
Total 561500.00
2)Significant overdue interest
RMB/CNY
Borrower Ending balance Overdue time Overdue reason
Whether has
impairment occurred
and judgment basis
Other explanation
(2) Dividend receivable
1)Dividend receivable
RMB/CNY
Item(or invested enterprise) Ending balance Opening balance
2))Important dividend receivable with account age over one year
RMB/CNY
Item(or invested
enterprise)
Ending balance Account age
Cause of um-
collectible
Whether has
impairment occurred
and judgment basis
Other explanation
(3) Other account receivable
1)Category of other account receivable
RMB/CNY
Category
Ending balance Opening balance
Book balance
Bad debt
provision Book
value
Book balance Bad debt provision
Book
value Amoun
t
Ratio
Amoun
t
Accrua
l Ratio
Amo
unt
Ratio Amount
Accrual
Ratio
Other account
receivable with
single major
amount and
48305
895.94
36.81
%
45711
329.62
94.63
%
25945
66.32
4786
9231
.61
36.14
%
36963
097.32
77.22%
109061
34.29
withdrawal bad
debt provision for
single item
Other account
receivable
withdrawal bad
debt provision by
group of credit risk
characteristics
38039
075.02
28.99
%
73917
12.89
19.43
%
30647
362.13
3595
8405
.37
27.15
%
12380
68.75
3.44%
347203
36.62
Other account
receivable with
single minor
amount but
withdrawal bad
debt provision for
single item
44887
199.60
34.20
%
44887
199.60
100.00
%
4861
6556
.19
36.71
%
48616
556.19
100.00%
Total
13123
2170.5
6
100.00
%
97990
242.11
74.67
%
33241
928.45
1324
4419
3.17
100.00
%
86817
722.26
65.55%
456264
70.91
Other receivable with single significant amount and withdrawal bad debt provision separately at end of period:
√Applicable □Not applicable
RMB/CNY
Other account
receivable (by
enterprise)
Ending balance
Other account
receivable
Bad debt provision Accrual Ratio Accrual causes
Changzhou Shenbao
Chacang E-commence
Co. Ltd. (hereinafter
referred to
as"Changzhou
Shenbao Chacang
Co.")
20413947.34 17819381.02 87.29%
Allowance for bad debt
provision based on the
difference between
present value of
estimated future cash
flow and its book value
Shenzhen Gaojian
Food Joint Venture
Co. Ltd
8326202.63 8326202.63 100.00%
Slightestly possibly
taken back
Shenzhen Sha Tau Kok
Import & Export
Corporation
8285803.57 8285803.57 100.00%
Slightestly possibly
taken back
Shenzhen Changjiang
Development
Company
5677473.59 5677473.59 100.00%
Slightestly possibly
taken back
Tongyu Shengda Grain
& oil trading Co. Ltd
5602468.81 5602468.81 100.00%
Slightestly possibly
taken back
Total 48305895.94 45711329.62 -- --
Other receivable with bad debt provision withdrawal by age analysis in group:
√Applicable □Not applicable
RMB/CNY
Account age
Ending balance
Other account receivable Bad debt provision Accrual Ratio
Subitem of within one year
Subtotal of within one year 9103752.94 91037.53 1.00%
1-2 years 4038032.96 414959.80 10.28%
2-3 years 947859.87 284387.96 30.00%
3-4 years 112539.37 56269.69 50.00%
4-5 years 11153403.05 5576701.53 50.00%
Over 5 years 1210445.48 968356.38 80.00%
Total 26566033.67 7391712.89 27.82%
Explanation on combination determines:
In combination withdrawal proportion of bad debt provision based on balance proportion for other account receivable:
□Applicable √Not applicable
In combination withdrawal proportion of bad debt provision based on other methods for other account receivable:
□Applicable √Not applicable
2)Bad debt provision accrual collected or switch back
Bad debt provision accrual was 15176680.06 Yuan; the amount collected or switches back amounting to 3730121.41 Yuan
Including the important bad debt provision switch back or collected in the period:
RMB/CNY
Enterprise Amount switch back or collected Collection way
Taizhong Agricultural Co. Ltd 3707930.42 Amount collected
Total 3707930.42 --
3)Other receivables actually written-off during the reporting period
RMB/CNY
Item Amount charge off
Note of important other receivables of written-off:
RMB/CNY
Enterprise
Nature of other
account receivable
Amount charge off
Cause of charge-
off
Charge-off
procedures
Resulted by
related transaction
(Y/N)
Note of other receivables of written-off:
Bad debt provision accrual of 15176680.06 yuan in the period; switch back for bad debt provision of 3730121.41
yuan bad debt provision of 274038.80 yuan charge off in the period
4)Nature of other receivables
RMB/CNY
Nature Ending book balance Opening book balance
Margin and deposit 11160677.29 8987464.69
Export tax rebate 312364.06 733709.16
Intercourse funds and other 119759129.21 122723019.32
Total 131232170.56 132444193.17
5)Top 5 other receivables at ending balance by arrears party
RMB/CNY
Enterprise Nature Ending balance Account age
Ratio in total
ending balance of
other receivables
Ending balance of
bad debt reserve
Changzhou
Shenbao Chacang
Co.
Intercourse funds 20413947.34
*1、1-4 years or
more
15.56% 17819381.02
Shenzhen Yixin
Investment Co.Ltd
Intercourse funds 10431232.87 4-5 years 7.95% 5215616.44
Shenzhen Gaojian
Food Joint Venture
Co. Ltd
Intercourse funds 8326202.63 Over 5 years 6.34% 8326202.63
Shenzhen Sha Tau
Kok Import &
Export
Corporation
Intercourse funds 8285803.57 Over 5 years 6.31% 8285803.57
Ying Kou Port
Group Corp.Intercourse funds 5769342.85 Within one year 4.40% 57693.43
Total -- 53226529.26 -- 40.56% 39704697.09
6)Other account receivables related to government grants
RMB/CNY
Enterprise Government grants Ending balance Ending account age
Time amount and
basis for collection
predicted
7)Other receivable for termination of confirmation due to the transfer of financial assets
8)The amount of assets and liabilities that are transferred other receivable and continued to be involved
Other explanation
The amount of provision for bad debts is 15176680.06 yuan in the current period the amount of provision for return of bad debts is
3730121.41 yuan in the current period and the amount of provision for write-off of bad debts is 274038.80 yuan in the current
period
7. Inventory
Whether the company need to comply with the disclosure requirements of the real estate industry
No
(1) Category of inventory
RMB/CNY
Item
Ending balance Opening balance
Book balance
Falling price
reserves
Book value Book balance
Falling price
reserves
Book value
Raw materials 63928125.50 19906198.09 44021927.41 77403549.46 4385924.31 73017625.15
Goods in
process
23840568.24 68371.10 23772197.14 28703483.15 264169.09 28439314.06
Finished goods
2827653415.
87
101081767.83
2726571648.
04
2919447932.
76
98944435.66
2820503497.
10
Revolving
materials
7368801.19 941939.14 6426862.05 6294851.99 6294851.99
Goods in transit 7410407.72 7410407.72 5475723.52 5475723.52
Materials
processed on
commission
5415695.35 5290502.32 125193.03 6404294.66 5290502.32 1113792.34
Wrappage 3474364.80 3474364.80 3623008.15 3623008.15
Total
2939091378.
67
127288778.48
2811802600.
19
3047352843.
69
108885031.38
2938467812.
31
Whether the Company needs to comply with the disclosure requirement of Industry Information Disclosure Guidelines of Shenzhen
Stock Exchange No.4 -Listed Companies Engaged in Seed Planting Business
No
Whether the Company needs to comply with the disclosure requirement of Industry Information Disclosure Guidelines of Shenzhen
Stock Exchange No.11 -Listed Companies Engaged in Jewelry Related Business
No
(2) Inventory Falling price reserves
RMB/CNY
Item Opening Current amount increased Current amount decreased Ending balance
balance
Accrual Other
Switch back/
Written off
Other
Raw materials 4385924.31 15653641.26 133367.48 19906198.09
Goods in
process
264169.09 36565.15 232363.14 68371.10
Finished goods 98944435.66 165230977.79 8364258.42 154729387.20 101081767.83
Revolving
materials
941939.14 941939.14
Materials
processed on
commission
5290502.32 5290502.32
Total 108885031.38 181863123.34 8364258.42 155095117.82 127288778.48
(3) Explanation on inventories with capitalization of borrowing costs included at ending balance
Nil
(4) Assets unsettled formed by construction contract which has completed at period-end
RMB/CNY
Item Amount
Other explanation
Nil
8. Assets held for sale
RMB/CNY
Item Ending book value Fair value
Expected disposal
costs
Estimated disposal
time
Other explanation
9. Non-current assets due within one year
RMB/CNY
Item Ending balance Opening balance
Other explanation
10. Other current assets
RMB/CNY
Item Ending balance Opening balance
Enterprise income tax paid in advance 394677.16 2862.87
VAT input tax ready for deduction 88918809.39 73043492.31
Financial products held to maturity
within one year
160000000.00 100000000.00
Other 5180277.49 46194.46
Total 254493764.04 173092549.64
Other explanation
Ending balance of other current assets increased 81401214.4 yuan over that of period-begin with 47.03 percent
declined mainly because financial products increased at end of the period
11. Financial assets available for sale
(1) Financial assets available for sale
RMB/CNY
Item
Ending balance Opening balance
Book
balance
Depreciation
reserves
Book value Book balance
Depreciation
reserves
Book value
Equity instrument
available for sale:
17537500.0
0
17480000.0
0
57500.00
17537500.0
0
17480000.00 57500.00
Measured by cost
17537500.0
0
17480000.0
0
57500.00
17537500.0
0
17480000.00 57500.00
Total
17537500.0
0
17480000.0
0
57500.00
17537500.0
0
17480000.00 57500.00
(2) Financial assets available for sale measured by fair value at period-end
RMB/CNY
Category of available-
for-sale financial assets
Equity instrument
available for sale
Debt instrument
available for sale
Total
(3) Financial assets available for sale measured by cost at period-end
RMB/CNY
The
invested
entity
Book balance Depreciation reserves Ratio of
share-
holding
in
Current
cash
dividend
Period-
beginnin
Current
increase
Current
decrease
Period-
end
Period-
beginnin
Current
increase
Current
decrease
Period-
end
g d d g d d invested
entity
Shenzhe
n Sanjiu
Weitai
Capsule
s Co.
Ltd.
248000
0.00
248000
0.00
248000
0.00
248000
0.00
0.95%
Shenzhe
n Tianji
Photoele
ctric
Industria
l Co.
Ltd(orig
inal
named"
Shenzhe
n Tianji
Photoele
ctric
Technol
ogy
Industria
l Co.
Ltd.")
150000
00.00
150000
00.00
150000
00.00
150000
00.00
3.77%
Beijing
Tiantan
Co. Ltd.
57500.0
0
57500.0
0
Total
175375
00.00
175375
00.00
174800
00.00
174800
00.00
--
(4) Change of financial assets depreciation for sale during reporting period
RMB/CNY
Category of available-
for-sale financial assets
Equity instrument
available for sale
Debt instrument
available for sale
Total
(5) Fair value of the available-for-sale equity instrument drops significantly or not contemporarily without
depreciation reserves accrued
RMB/CNY
Equity
instrument
available for
sale
Investment cost
Ending fair
value
Decline range
of fair value
compare with
the cost
Times
continued to
declined
(Month)
Amount
accrual for
impairment
Reasons for un-
accrual
Other explanation
The stock is a legal person stock purchased from the original STAQ trading system formerly known as Beijing Shuanghesheng Five-
Star Beer Sanhuan Co. Ltd. with an initial investment of 55000 shares. After that the company changed its name to 33333 shares.
12. Investment held to maturity
(1) Investment held to maturity
RMB/CNY
Item
Ending balance Opening balance
Book balance
Depreciation
reserves
Book value Book balance
Depreciation
reserves
Book value
(2) Important investment held to maturity at period-end
RMB/CNY
Bond Face value Coupon rate Actual rate Maturity date
(3) Re-classified to investment held to maturity in the period
Other explanation
13. Long-term account receivable
(1) Long-term account receivable
RMB/CNY
Item
Ending balance Opening balance
Discount
rate interval
Book
balance
Bad debt
provision
Book value
Book
balance
Bad debt
provision
Book value
(2) Long-term account receivable that are terminated due to the transfer of financial assets
(3) Assets and liability resulted by transferring long-term account receivable and continuing to be involved
Other explanation
. Long-term equity investment
RMB/CNY
The
investe
d entity
Openin
g
balance
Current changes (+-)
Ending
balance
Ending
balance
of
depreci
ation
reserve
s
Additio
nal
investm
ent
Capital
reducti
on
Investm
ent
gains
recogni
zed
under
equity
Other
compre
hensive
income
adjustm
ent
Other
equity
change
Cash
dividen
d or
profit
announ
ced to
issued
Impair
ment
accrual
Other
I. Joint venture
II. Associated enterprise
Shenzh
en
Shenba
o
(Xinmi
n)
Foods
Co.
Ltd*1
28700
00.00
28700
00.00
28700
00.00
Changz
hou
Shenba
o
Chacan
g E-
comme
nce
Co.
Ltd. *2
Shenzh
en
Shenba
o
(Liaoyu
an)
Industri
al Co.
Ltd*1
57628.
53
57628.
53
57628.
53
Shenzh 10549 - 10501
en
Shenba
o
Manan
Bio-
technol
ogy
Co.
Ltd.
48.13 4831.5
6
16.57
Shenzh
en
Shichu
mingm
en
Restaur
ant
Manage
ment
Co.
Ltd.*2
Guangz
hou
Shenba
o
Menda
o Tea
Co.
Ltd.
41936
81.53
-
36795
5.83
38257
25.70
Zhuhai
Hengxi
ng Feed
Industri
al Co.
Ltd.
27079
470.80
24313
00.31
29510
771.11
Zijin
Jinzhen
Rice
Industr
y Co.
Ltd. *3
17500
00.00
17500
00.00
Shenzh
en
Duoxi
34270
71.09
58755
4.36
40146
25.45
Equity
Investm
ent
Fund
Manage
ment
Co.
Ltd.
SZCG
Intellig
ent
Wulian
Equity
Investm
ent
Fund
(Shenz
hen)
Partner
ship
Enterpr
ise
(Limite
d)
25000
000.00
-
18943
37.51
23105
662.49
Shenzh
en
Shenyu
an Data
Tech.
Co.
Ltd
12000
000.00
-
25072
34.51
94927
65.49
Subtota
l
40432
800.08
37000
000.00
17500
00.00
-
17555
04.74
73927
295.34
29276
28.53
Total
40432
800.08
37000
000.00
17500
00.00
-
17555
04.74
73927
295.34
29276
28.53
Other explanation
The
invested
entity
Opening
balance
Opening
balance of
depreciation
reserves
Current changes (+-) Endi
ng
balan
ce
Endi
ng
balan
ce of
Addit
ional
inves
Capital
reduction
Investment
gains/losses
recognized
Other
comprehe
nsive
Other
equity
change
Cash dividend
or profit
announced to
Pro
visi
on
Ot
her
tment by equity income
adjustmen
t
issued for
imp
airm
ent
depre
ciatio
n
reser
ves
Other
enterprise
Taizhong
Agricultura
l Co. Ltd*3
21136950.0
0
21136950.0
0
--- 21136950.0
0
--- --- --- --- --- --- --- ---
Buji
Processing
factory 区
*3
250000.00 250000.00 --- 250000.00 --- --- --- --- --- --- --- ---
Daya Bay
Office*3
4866700.00 4866700.00 --- 4866700.00 --- --- --- --- --- --- --- ---
Huapeng
Feed Co.
Ltd*3
340000.00 340000.00 --- 340000.00 --- --- --- --- --- --- --- ---
Subtotal 26593650.0
0
26593650.0
0
--- 26593650.0
0
--- --- --- --- --- --- --- ---
*1: these two companies have been established for a long time. At the current stage their business licenses have been revoked.
Impairment provision is made in full due to absence of settlement.
*2: the long-term equity investment for Changzhou Shenbao Chacang E-commence Co. Ltd and Shenzhen Shichumingmen
Restaurant Management Co. Ltd. which are measured by equity; the book balance counted as Zero for losses in the two above
mentioned enterprises
*3: According to the “Agreement on the Issuance of Shares to Purchase Assets” signed by the Company and Fude Capital in March
2018 and the “General Agreement on Major Asset Restructuring of State-owned Assets and Related Equity of Shenzhen Cereals Group
Co. Ltd.” the “Agreement on Free Transfer of State-owned Assets of Zijin County Jinzhen Rice Industry Co. Ltd.” the “Agreement
on Free Transfer of State-owned Assets of Taizhong Agriculture Co. Ltd.” and other free transfer agreements of subsidiaries signed by
SZCG the Company’s subsidiary and Fude Capital in June 2018 in the current period the Company transferred the stock equity of
Zijin County Jinzhen Rice Industry Co. Ltd. Taizhong Agriculture Co. Ltd. Buji Processing Zone Daya Bay Office and Huapeng
Feed Co. Ltd. to Fude Capital free of charge.
15. Investment real estate
(1) Investment real estate measured at cost
√Applicable □Not applicable
RMB/CNY
Item House and building Land use right Construction in Total
progress
I. Original book value
1.Opening
balance
628385235.60 628385235.60
2.Current amount
increased
224440.16 224440.16
(1) Outsourcing 224440.16 224440.16
(2) Inventory \Fix
assets\Construction in
progress transfer-in
(3) Increased by
combination
3.Current amount
decreased
61447342.02 61447342.02
(1) Disposal 61447342.02 61447342.02
(2) Other transfer-
out
4.Ending balance 567162333.74 567162333.74
II. accumulated
depreciation and
accumulated
amortization
1.Opening
balance
309362139.98 309362139.98
2.Current amount
increased
23194573.04 23194573.04
(1) Accrual or
amortization
23194573.04 23194573.04
3.Current amount
decreased
48016564.20 48016564.20
(1) Disposal 48016564.20 48016564.20
(2) Other transfer-
out
4.Ending balance 284540148.82 284540148.82
III. Depreciation
reserves
1.Opening
balance
2.Current amount
increased
(1) Accrual
3. Current amount
decreased
(1) Disposal
(2) Other transfer-
out
4.Ending balance
IV. Book value
1.Ending book
value
282622184.92 282622184.92
2.Opening book
value
319023095.62 319023095.62
(2) Investment real estate measured by fair value
□Applicable √Not applicable
(3) Investment real estate without property certification held
RMB/CNY
Item Book value
Reasons for without the property
certification
House and buildings 8766123.97 In progress
Other explanation
Disposal of investment real estate in the period due mainly because according to the material assets reorganization
agreement and assets stripping agreement related with the 100 percent of Cereal Group purchased by the Company
in way of share issuing some of the assets with defective in property rights are transfer to Fude Capital for free.There is no case that the recoverable amount of investment real estate at the end of the period is lower than its book
value so no provision for impairment of assets is included.. Fix assets
RMB/CNY
Item Ending balance Opening balance
Fix assets 993136743.51 1052866458.21
Total 993136743.51 1052866458.21
(1) Fix assets
RMB/CNY
Item
House and
buildings
Machinery
equipment
Transport
equipment
Electronic and
other equipment
Total
I. Original book
value
1.Opening
balance
930123138.37 491462875.75 20103647.93 60816228.49 1502505890.54
2.Current
amount increased
10227405.27 1803562.83 809851.72 2763729.18 15604549.00
(1) Purchase 6710137.48 1803562.83 809851.72 1560162.13 10883714.16
(2)
Construction in
progress transfer-
in
3517267.79 1203567.05 4720834.84
(3) Increased
by combination
3.Current
amount decreased
25348402.14 9278261.43 1812515.24 3558718.44 39997897.25
(1) Disposal
or scrap
25348402.14 9278261.43 1812515.24 3558718.44 39997897.25
4.Ending
balance
915002141.50 483988177.15 19100984.41 60021239.23 1478112542.29
II. accumulated
depreciation
1.Opening
balance
167205153.02 231062533.02 13784230.73 31943274.01 443995190.78
2.Current
amount increased
26158511.81 21367151.33 1554716.53 7335203.97 56415583.64
(1) Accrual 26158511.81 21367151.33 1554716.53 7335203.97 56415583.64
3.Current
amount decreased
12394652.83 8995066.29 1425859.32 2745676.69 25561255.13
(1) Disposal
or scrap
12394652.83 8995066.29 1425859.32 2745676.69 25561255.13
4.Ending
balance
180969012.00 243434618.06 13913087.94 36532801.29 474849519.29
III. Depreciation
reserves
1.Opening
balance
1355290.18 4288951.37 5644241.55
2.Current
amount increased
442416.31 3918078.86 93411.42 28131.35 4482037.94
(1) Accrual
3.Current
amount decreased
(1) Disposal
or scrap
4.Ending
balance
1797706.49 8207030.23 93411.42 28131.35 10126279.49
IV. Book value
1.Ending book
value
732235423.01 232346528.86 5094485.05 23460306.59 993136743.51
2.Opening book
value
761562695.17 256111391.36 6319417.20 28872954.48 1052866458.21
(2) Temporarily idle fixed assets
RMB/CNY
Item
Original book
value
Accumulated
depreciation
Depreciation
reserves
Book value Note
(3) Fixed assets acquired by financing lease
RMB/CNY
Item Original book value
Accumulated
depreciation
Depreciation reserves Book value
(4) Fixed assets acquired by operating lease
RMB/CNY
Item Ending book value
(5)Fix assets without property certification held
RMB/CNY
Item Book value
Reasons for without the property
certification
House and buildings 327066214.37 In progress
House and buildings 107813704.91
House and buildings 15977151.09
House and buildings
16350394.59
Simple buildings etc unable to handle
property certification
Total 467207464.96
Other explanation
(6)Disposal of fixed assets
RMB/CNY
Item Ending balance Opening balance
Other explanation
17. Construction in progress
RMB/CNY
Item Ending balance Opening balance
Construction in
progress
186586135.06 70735978.49
Total 186586135.06 70735978.49
(1) Construction in progress
RMB/CNY
Item Ending balance Opening balance
Book balance
Depreciation
reserves
Book value Book balance
Depreciation
reserves
Book value
Shenbao Plaza
project
3842333.64 3842333.64 3842333.64 3842333.64
Dongguan
grain storage
and wharf
matching
project
91924086.19 91924086.19 46965389.14 46965389.14
Deep
processing of
Dongguan
Industry and
Trading Food
39276418.03 39276418.03 6271930.17 6271930.17
CDE storage of
Dongguan
Food Industrial
Park and wharf
mating projects
43391511.05 43391511.05 6031872.49 6031872.49
Storage and
processing
project of
SZCG
6621284.40 6621284.40 6298750.44 6298750.44
Grain Supply
Related
Supporting
Engineering
Projects
2020328.00 2020328.00
Workshop
transformation
of Flour
Company
711487.37 711487.37 982180.17 982180.17
Other 5564537.76 903189.74 4661348.02 3068717.82 903189.74 2165528.08
Total 191331658.44 4745523.38 186586135.06 75481501.87 4745523.38 70735978.49
(2) Changes of major construction in progress
RMB/CNY
Project
s
Budget
Openi
ng
balanc
e
Curren
t
amoun
t
increas
ed
Transf
er-in
fixed
assets
Other
decrea
sed in
the
Period
Ending
balanc
e
Propor
tion of
project
invest
ment
in
budget
Progre
ss
Accum
ulated
capital
ization
of
interes
t
Includi
ng:
amoun
t of
capital
ization
of
interes
t in
Period
Interes
t
capital
ization
rate in
Period
Capital
resour
ces
Dongg
uan
grain
storag
e and
wharf
matchi
ng
project
46965
389.1
4
48475
964.8
4
3517
267.79
91924
086.1
9
Deep
proces
sing of
Dongg
uan
Industr
y and
Tradin
g Food
6271
930.17
33004
487.8
6
39276
418.0
3
CDE
storag
e of
Dongg
uan
Food
Industr
ial
Park
and
wharf
mating
project
s
6031
872.49
37359
638.5
6
43391
511.0
5
Total 59269 11884 3517 17459 -- -- --
.8
0
0091.
26
267.79 2015.
27
(3) The provision for impairment of construction projects
RMB/CNY
Item Provision amount Reasons of accrual
Other explanation
(4) Engineering material
RMB/CNY
Item
Ending balance Opening balance
Book balance
Depreciation
reserves
Book value
Book
balance
Depreciation
reserves
Book value
Other explanation
18. Productive biological assets
(1) Productive biological assets measured by cost
√Applicable □Not applicable
RMB/CNY
Item Plant Livestock Forestry Fisheries Total
Tea tree
I.Original book
value
1.Opening
balance
416771.28 416771.28
2.Current
amount increased
(1)Outsourcing
(2)self-
cultivate
3.Current
amount decreased
(1)Disposal
(2)Other 9692.36 9692.36
4.Ending
balance
407078.92 407078.92
II. accumulated
depreciation
1.Opening
balance
2.Current
amount increased
(1) Accrual
3.Current
amount decreased
(1)Disposal
(2)Other
4.Ending
balance
III. Depreciation
reserves
1.Opening
balance
2.Current
amount increased
(1) Accrual
3.Current
amount decreased
(1)Disposal
(2)Other
4.Ending
balance
IV. Book value
1.Ending book
value
.Opening book
value
(2) Productive biological assets measured by fair value
□Applicable √Not applicable
19. Oil and gas assets
□Applicable √Not applicable
20. Intangible assets
(1) Intangible assets
RMB/CNY
Item Land use right Patent Un-patent tech Other Total
I.Original book
value
1.Opening
balance
417581033.74 46264718.89
8370977.87 29500867.72
501717598.22
2.Current
amount increased
184916393.77 1200.00
1934971.62 2035360.75
188887926.14
(1)
Purchase
184916393.77 1200.00
1934971.62 2035360.75
188887926.14
(2) internal
R&D
0.00 0.00 0.00 0.00
(3)
Increased by
combination
0.00 0.00 0.00 0.00
0.00 0.00 0.00 0.00
3.Current
amount decreased
7846273.16 0.00 7846273.16
(1)
Disposal
7846273.16 0.00 7846273.16
0.00 0.00 0.00 0.00
4.Ending
balance
594651154.35 46265918.89
10305949.49 31536228.47
682759251.20
II. accumulated
depreciation
0.00
0.00 0.00
0.00
.Opening
balance
59933429.04 22367888.26
2475996.62 6944368.88
91721682.80
2.Current
amount increased
13261998.56 1973952.91
1233969.38 1537661.71
18007582.56
(1) Accrual 13261998.56 1973952.91 1233969.38 1537661.71 18007582.56
0.00 0.00 0.00 0.00
3.Current
amount decreased
3688748.40 0.00 0.00 0.00 3688748.40
(1)
Disposal
3688748.40 0.00 0.00 0.00 3688748.40
0.00 0.00 0.00 0.00
4.Ending
balance
69506679.20 24341841.17
3709966.00 8482030.59
106040516.96
III. Depreciation
reserves
0.00 0.00 0.00 0.00
1.Opening
balance
1869502.01
1130341.88 0.00
2999843.89
2.Current
amount increased
3683781.53
37716.74 0.00
3721498.27
(1) Accrual 3683781.53 37716.74 0.00 3721498.27
0.00 0.00 0.00 0.00
3.Current
amount decreased
0.00 0.00 0.00 0.00
(1) Disposal 0.00 0.00 0.00 0.00
0.00 0.00 0.00 0.00
4.Ending
balance
5553283.54
1168058.62 0.00
6721342.16
IV. Book value 0.00 0.00 0.00 0.00
1.Ending
book value
525144475.15 16370794.18
5427924.87 23054197.88
569997392.08
2.Opening
book value
357647604.70 22027328.62
4764639.37 22556498.84
406996071.53
Ratio of the intangible assets from internal R&D in balance of intangible assets at period-end was 0.00%.
(2) Land use rights without certificate of ownership
RMB/CNY
Item Book value
Reasons for without the property
certification
Land use right 43229515.30 In progress
Land use right 7849990.00
Collective land no property rights
certificate can be processed
Total 51079505.30
Other explanation
(1) Disposal ofintangible assets in the period due mainly because according to the material assets reorganization
agreement and assets stripping agreement related with the 100 percent of Cereal Group purchased by the Company
in way of share issuing some of the assets with defective in property rights are transfer to Fude Capital for free.
(2) Ending balance of intangible assets increased 181041652.98 yuan over that of period-beginning with 36.08
percent up mainly because making up the land price for some of the properties.
(3) The intangible assets mortgage or guarantee at end of the period found more in the (51) of Note VI in the auditing
report
21. Development expenses
RMB/CNY
Item
Opening
balance
Current amount increased Current amount decreased
Ending
balance
Other explanation
22. Goodwill
(1) Original book value of goodwill
RMB/CNY
The invested
entity or
matters
forming
goodwill
Opening
balance
Current increased Current decreased Ending balance
Pu’er Tea
Trading Center
673940.32 673940.32
Total 673940.32 673940.32
(2) Goodwill depreciation reserves
RMB/CNY
The invested
entity or
Opening
balance
Current increased Current decreased Ending balance
matters
forming
goodwill
Pu’er Tea
Trading Center
673940.32 673940.32
Total 673940.32 673940.32
Relevant information about the assets group or portfolio goodwill included
Hangzhou Ju Fang Yong a subsidiary of the Company funded and purchased 15.00% stake of Yunnan Pu’er Tea
Trading Center held by Yunnan Heng Feng Xiang Investment Co. Ltd. in May 2016. After the completion of the
purchase the Company got command of Yunnan Pu’er Tea Trading Center. The balance between the combined
cost and the fair value of net assets on the combining date formed goodwill of RMB 673940.32.Instructions for goodwill impairments test process and key parameters (such as the forecast period growth rate stable period growth
rate profit rate discount rate and forecast period when estimating the present value of the future cash flow) and the method of
confirming the impairment loss of goodwill:
Impact of goodwill impairment test
Other explanation
23. Long-term deferred expense
RMB/CNY
Item Opening balance
Current amount
increased
Current
amortization
Other decreased Ending balance
Decoration fee 10601610.34 410036.30 3895891.33 2565005.10 4550750.21
Improve
expenditure for
investment real
estate
9292485.82 586379.92 8706105.90
Improve
expenditure for fix
assets
2692209.58 739526.46 1039820.39 6824.31 2385091.34
Affiliated project
of resident area in
Wuyuan Ju Fang
Yong
389956.00 353581.53 36374.47
Other 4840031.05 2637922.71 866744.68 489631.20 6121577.88
Total 27816292.79 3787485.47 6742417.85 3061460.61 21799899.80
Other explanation
. Deferred income tax assets and deferred income tax liability
(1) Deferred income tax assets without offset
RMB/CNY
Item
Ending balance Opening balance
Deductible temporary
differences
Deferred income tax
assets
Deductible temporary
differences
Deferred income tax
assets
Impairment provision
for assets
200997551.38 49759336.40 214181782.83 52720473.30
Unrealized profits in
internal transactions
1348710.60 337177.65 2518115.64 629528.91
Deductible loss 1097482.28 274370.57
Deferred income 312307.72 78076.93 441538.48 110384.62
Total 202658569.70 50174590.98 218238919.23 53734757.40
(2) Deferred income tax liability without offset
RMB/CNY
Item
Ending balance Opening balance
Taxable temporary
differences
Deferred income tax
liability
Taxable temporary
differences
Deferred income tax
liability
Asset evaluation
increment of enterprise
combine under
different control
51909877.24 12977469.31 53564745.68 13391186.42
Change of fair value 43861.84 10965.46 518602.12 129650.53
Total 51953739.08 12988434.77 54083347.80 13520836.95
(3) Deferred income tax assets and deferred income tax liabilities listed after off-set
RMB/CNY
Item
Trade-off between the
deferred income tax
assets and liabilities
Ending balance of
deferred income tax
assets or liabilities
after off-set
Trade-off between the
deferred income tax
assets and liabilities at
period-begin
Opening balance of
deferred income tax
assets or liabilities
after off-set
Deferred income tax
assets
50174590.98 53734757.40
Deferred income tax
liability
12988434.77 13520836.95
(4) Details of uncertain deferred income tax assets
RMB/CNY
Item Ending balance Opening balance
Deductible loss 112864728.90 130083839.90
Impairment provision for assets 172615170.87 204828441.48
Deferred income 10097899.20
Total 295577798.97 334912281.38
(5) Deductible losses of un-recognized deferred income tax assets expired on the followed year
RMB/CNY
Year Ending amount Opening amount Note
Other explanation
25. Other non-current assets
RMB/CNY
Item Ending balance Opening balance
Prepaid for equipment 866378.12 484108.52
Prepaid for engineering 1069771.60 500000.00
Total 1936149.72 984108.52
Other explanation
26. Short-term loans
(1) Category of short-term loans
RMB/CNY
Item Ending balance Opening balance
Secured loans 30000000.00 100000000.00
Guarantee loan 30000000.00 40000000.00
Loan in credit 31600000.00 29800000.00
Total 91600000.00 169800000.00
Explanation on category of short-term loans
(1) Dongguan Logistics a subsidiary of the Company signed the “Liquidity Loan Contract” No. 44191000-2018 (Dongben) Zi No.
0124 with Agricultural Development Bank of China Dongguan Branch and obtained a loan of RMB 31.60 million by credit loan the
life of the loan is 11 months which expires on October 31 2019 the lending rate is 4.35% and the interest accrual is segmented and
shall be adjusted with the adjustment of the benchmark interest rate for loan of the People’s Bank of China. As of December 31 2018
the balance of the above loan contract was RMB 31.60 million.
(2) Dongguan Logistics a subsidiary of the Company signed a liquidity loan contract “Yue DG 2017NJZ No.5” with Bank of
Communications Co. Ltd. Dongguan Branch. According to the contract the Bank of Communications Dongguan Branch provided a
circulating loan amount of RMB 30 million to Dongguan Logistics and the borrowing rate is 5.22% the length of maturity for each
loan under the contract is no longer than 12 months and the maturity date of all loans is no later than April 11 2019. As of December
31 2018 the balance of the above loan contract was RMB 30 million. Shenzhen Cereals Group and Dongguan Fruit Vegetable Non-
staple Food Trading Market Co. Ltd. provide the guarantee with maximum amount for the loan the maximum amount of claims
guaranteed by the guarantors was respectively RMB 15.30 million and RMB 14.70 million.
(3) The Company’s subsidiaries Shenzhen Flour Dongguan Logistics Hualian Grain and Oil Trade SZCG Duoximi SZCG Big
Kitchen and SZCG Cold Chain signed the bank credit contract of credit number CN11002181808/160714 and the credit review and
modification contract CN11002181808-170727 with HSBC Dongguan Logistics has obtained HSBC’s multi-currency circulating loan
with maximum credit limit of not more than RMB 100 million and the interest rate is 100% of the benchmark interest rate for loan of
the central bank or other rates that is determined on the credit use date or before the renewal date of the loan and has been written on
the service application and renewal notice of the loan. As of December 31 2018 Dongguan Logistics had obtained a loan balance of
RMB 30 million from HSBC Huizhou Zhongkai Sub-branch. The above loans were guaranteed by Shenzhen Cereals Group and all
accounts receivable of seven approved customers of Dongguan Logistics (1. Dongguan Yihai Kerry Grain and Oil Food Industry Co.Ltd.; 2. Shenzhen Shekou Lamsoon Flour Mills Co. Ltd.; 3. Guangdong Guangliang Group; 4. Shenzhen Kingsino Feed Co. Ltd.; 5.Shenzhen Kondarl (Group) Co. Ltd.; 6. Hong Kong Maxim’s Caterers Limited; 7. Beingmate Group Co. Ltd.) were taken as pledges
the pledge period was from July 9 2015 to July 9 2020. As of December 31 2018 there was no balance in the accounts receivable of
Dongguan Logistics and the seven customers above.
(2) Overdue short-term loans without payment
RMB 0 short-term loans over due without paid at period-end including follow major amount:
RMB/CNY
Borrower Ending balance Loan rate Overdue time Overdue interest
Other explanation
27. Financial liability measured by fair value and with the variation recorded into current gains/losses
RMB/CNY
Item Ending balance Opening balance
Other explanation
28. Derivative financial liability
□Applicable √Not applicable
29. Note payable and account payable
RMB/CNY
Item Ending balance Opening balance
Account payable 472738283.80 558480197.44
Total 472738283.80 558480197.44
(1) Category of note payable
RMB/CNY
Category Ending balance Opening balance
Notes expired at year-end without paid was Yuan.
(2) Account payable
RMB/CNY
Item Ending balance Opening balance
Trade accounts payable 438618768.51 461677059.15
Account payable for engineering 31922123.90 95399963.57
Other 2197391.39 1403174.72
Total 472738283.80 558480197.44
(3) Major accounts payable with age over 1 year
RMB/CNY
Item Ending balance Reasons of outstanding or carry-over
Other explanation
30. Account received in advance
(1) Account received in advance
RMB/CNY
Item Ending balance Opening balance
Account for goods received in advance 204866040.96 174812618.27
Other 562553.20 3572656.93
Total 205428594.16 178385275.20
(2) Important account received in advance with account age over one year
RMB/CNY
Item Ending balance Reasons of outstanding or carry-over
(3) Projects that settle without completed from construction contract at period-end
RMB/CNY
Item Amount
Other explanation
31. Wages payable
(1)Wages payable
RMB/CNY
Item Opening balance Current increased Current decreased Ending balance
I. Short-term
compensation
107603918.95 249557323.70 235778894.13 121382348.52
II. After-service
welfare-defined
contribution plans
9882391.67 21171621.19 20789853.27 10264159.59
III. Dismissed welfare 660000.00 13779037.85 10376122.44 4062915.41
Total 118146310.62 284507982.74 266944869.84 135709423.52
(2)Short-term compensation
RMB/CNY
Item Opening balance Current increased Current decreased Ending balance
1. Wage bonus
allowance and subsidy
101078818.33 218102208.89 205573357.37 113607669.85
2. Employees’ welfare 10704530.40 10704530.40
3. Social insurance
charges
45896.14 6137166.84 6083464.17 99598.81
Including:medical
insurance premium
40399.73 5399740.97 5347327.60 92813.10
Industrial injury
insurance
premiums
748.17 312873.46 313316.71 304.92
Maternity
insurance
premiums
4748.24 424552.41 422819.86 6480.79
4. Housing public
reserve
23823.11 8476422.98 8500246.09
5. Trade union fee and
education fee
6455381.37 6136994.59 4917296.10 7675079.86
Total 107603918.95 249557323.70 235778894.13 121382348.52
(3) Defined contribution plans
RMB/CNY
Item Opening balance Current increased Current decreased Ending balance
1. Basic endowment
insurance premiums
291876.52 12502212.35 12557113.25 236975.62
2. Unemployment
insurance premiums
4130.14 300217.11 299777.50 4569.75
3. Enterprise annuity 9586385.01 8369191.73 7932962.52 10022614.22
Total 9882391.67 21171621.19 20789853.27 10264159.59
Other explanation
According to the “Enterprise Annuity Plan of Shenzhen Cereals Group Co. Ltd.” and the employee’s application the Company
calculates and pays the enterprise annuity to the employee who meets the conditions for participation by taking their total salary of the
previous year as the payment base and the payment ratio of the enterprise annuity is based on the proportion agreed in the
“Confirmation on the Payment Ratio of the Enterprise Annuity of Shenzhen Cereals Group Co. Ltd.” and the maximum payment ratio
is not more than 8.33%.
32. Tax payable
RMB/CNY
Item Ending balance Opening balance
VAT 9493004.93 3796564.24
Enterprise income tax 9219053.50 9372029.64
Personal income tax 1927699.20 1634001.67
Urban maintenance and construction tax 640819.28 137679.29
House property tax 1725020.41 2103322.08
Use tax of land 574505.73 973641.12
Stamp tax 246056.29 226636.89
Educational surtax 483228.46 105464.48
Other 660330.78 1046888.34
Total 24969718.58 19396227.75
Other explanation
33. Other account payable
RMB/CNY
Item Ending balance Opening balance
Interest payable 1571297.90
Dividend payable 2909182.74 2909182.74
Other account payable 277780365.55 303452477.66
Total 280689548.29 307932958.30
(1) Interest payable
RMB/CNY
Item Ending balance Opening balance
Long-term borrowing interest for
installment
932028.11
Interest payable for short-term loans 639269.79
Total 1571297.90
Major overdue interest:
RMB/CNY
Borrower Overdue amount Overdue reason
Other explanation
(2) Dividend payable
RMB/CNY
Item Ending balance Opening balance
Unmanaged shares 218212.60 218212.60
Shenzhen Investment Management Co.Ltd
2690970.14 2690970.14
Total 2909182.74 2909182.74
Other explanation including important dividend payable over one year without payment disclose reasons for un-paid:
(3) Other account payable
1)Classification of other accounts payable according to nature of account
RMB/CNY
Item Ending balance Opening balance
Engineering quality retention money and
fund of tail
3191037.22
1847714.46
Deposit and margin 151049170.31 198233816.14
Intercourse funds and other 100749160.89 75815708.43
Drawing expenses in advance 22790997.13 27555238.63
Total 277780365.55 303452477.66
2)Significant other payable with over one year age
RMB/CNY
Item Ending balance Reasons of outstanding or carry-over
Zhanjiang Changshan (Shenzhen)
Ecological Aquaculture Co. Ltd
7967662.50 Intercourse funds not yet mature
Shenzhen Yulunfa Investment
Development Co. Ltd
4936804.06 Intercourse funds not yet mature
Total 12904466.56 --
Other explanation
34. Liability held for sale
RMB/CNY
Item Ending balance Opening balance
Other explanation
35. Non-current liabilities due within one year
RMB/CNY
Item Ending balance Opening balance
Long-term loans due within one year 55090793.79 40642777.63
Total 55090793.79 40642777.63
Other explanation
Found more in Long-term loans
36. Other current liabilities
RMB/CNY
Item Ending balance Opening balance
Subsidies for grain reserve services 219151968.63 219151968.63
Total 219151968.63 219151968.63
Change of short-term bonds payable:
RMB/CNY
Bonds
Face
value
Issuanc
e date
Bonds
term
Amoun
t issued
Openin
g
balance
Issued
in the
period
Accrual
interest
by face
value
Premiu
m and
discoun
t
amortiz
ation
Paid in
the
period
Ending
balance
Other explanation
The grain storage service subsidy is the part of the advance payment of grain and oil reserve services received from Shenzhen Financial
Committee in the previous year of which the income is unrecognized. Due to the government-related audit and its settlement procedures
the Company has not cleared and settled the accumulated grain and oil reserve service payments. According to the agreement on major
asset restructuring of the Company’s issuance of shares to purchase 100 equity of SZCG the Company no longer recognizes the income
for the balance which is settled by Fude Capital and relevant government units.
37. Long-term loans
(1)Category of long-term loans
RMB/CNY
Item Ending balance Opening balance
Mortgage loan 462449380.03 143905785.42
Guarantee loan 109329205.42 92384396.09
Less: Long-term loans due within one
year
-55090793.79 -40642777.63
Total 516687791.66 195647403.88
Explanation on category of long-term loans:
1.Explanation on long-term loans
(1) Dongguan Logistics a subsidiary of the Company signed a bank credit contract with credit number of
CN11002181808-160714-SCDGTML2 with HSBC. HSBC has provided a loan credit not more than RMB200
million to Dongguan Logistics. The applicable interest rate for each loan at each interest period is 90% of the loan
benchmark interest rate of central bank applicable on the fixed interest date of the interest period the borrowing
date is from December 27 2016 to December 27 2021. As of December 31 2018 Dongguan Logistics obtained
the principal balance of the loan of HSBC of RMB 109329200 of which the non-current liabilities due within one
year was RMB 19069000. SZCG and Dongguan Fruit Vegetable Non-staple Food Trading Market Co. Ltd.provided the maximum guarantee amount for the loan.
(2) Dongguan Food Industry Park a subsidiary of the Company signed the loan contract of “Yue DG 2017 NGDZNo. 006” with Bank of Communications Guangdong Branch the loan amount is 768 million yuan and the loan
term is from September 22 2017 to August 29 2032. The loan under this contract is only used for the construction
of the warehousing and logistics distribution center project of Dongguan Food Industry Park. The principal of the
current loan was RMB 49.8 million RMB 3783400 RMB 30 million and RMB 200 million the loan interest rate
of RMB 200 million was calculated by the benchmark interest rate for loan of the People’s Bank of China on the
loan entry date which was 4.90%; the other three were calculated by the benchmark interest rate of the People’s
Bank of China on the loan entry date after rising by 15% which is 5.635%. As of December 31 2018 the total loan
balance under the above loan contract was RMB 285538400. Dongguan Food Industry Park mortgaged its two
pieces of lands (DFGY (2009) DT No. 190) and (DFGY (2012) DT No. 152) for the borrowing. At the same time
the Company’s subsidiaries SZCG and Dongguan Fruit Vegetable Non-staple Food Trading Market Co. Ltd.provide joint liability guarantee.
(3) Dongguan Logistics a subsidiary of the Company signed a loan contract with contract number of 44031000-
5 (Shen) Zi No. 0023 with China Agricultural Development Bank with a total loan amount of 273 million yuan
and an annual interest rate of 5.4% the interest rate is adjusted year by year from the actual withdrawal date based
on the adjustment of benchmark interest rate for loan of the People's Bank of China and the loan period is from
July 31 2015 to July 12 2023. As of December 31 2018 the balance under the above contract was RMB
178866000. of which the non-current liabilities due within one year were RMB 36021700. Shenzhen Cereals
Group has provided guarantee for the loan and taken Dongguan Logistics’ land “DFGY(2014) DT No. 6” at No.
32 Jianshe Road Masan Village Machong Town Dongguan City and the above-ground buildings and structures
to be built in the future as mortgages of which the land assessment value is 51.21 million yuan.
2.Ending balance of long-term loans increased 321040387.78 yuan over that of period-beginning with 164.09
percent up mainly because subsidiary Dongguan Logistics increased the loans for engineering requirement in the
period
Other explanation including interest rate range:
38. Bonds payable
(1) Bonds payable
RMB/CNY
Item Ending balance Opening balance
(2) Changes of bonds payable (not including the other financial instrument of preferred stock and perpetual
capital securities that classify as financial liability)
RMB/CNY
(3) Convertible conditions and time for shares transfer for the convertible bonds
(4) Other financial instruments classify as financial liability
Basic information of the outstanding preferred stock and perpetual capital securities at period-end
Changes of outstanding preferred stock and perpetual capital securities at period-end
RMB/CNY
Outstandin
g financial
instrument
Period-beginning Current increased Current decreased Period-end
Amount Book value Amount Book value Amount Book value Amount Book value
Basis for financial liability classification for other financial instrument
Other explanation
39. Long-term account payable
RMB/CNY
Item Ending balance Opening balance
Special account payable 15690202.08 15626357.76
Total 15690202.08 15626357.76
(1) Nature of long-term account payable
RMB/CNY
Item Ending balance Opening balance
Other explanation
(2) Special account payable
RMB/CNY
Item Opening balance Current increased Current decreased Ending balance Causes
Depreciation fund
for grain deposits
15626357.76 63844.32 15690202.08
Note1
Total 15626357.76 63844.32 15690202.08 --
Other explanation
Note 1: The depreciation fund for grain deposits and interest from government investment
40. Long-term wages payable
(1) Long-term wages payable
RMB/CNY
Item Ending balance Opening balance
(2) Changes of defined benefit plans
Present value of the defined benefit plans:
RMB/CNY
Item Current Period Last Period
Scheme assets:
RMB/CNY
Item Current Period Last Period
Net liability (assets) of the defined benefit plans
RMB/CNY
Item Current Period Last Period
Content of defined benefit plans and relevant risks impact on future cash flow of the Company as well as times and uncertainty:
Major actuarial assumption and sensitivity analysis:
Other explanation
41. Accrual liability
RMB/CNY
Item Ending balance Opening balance Causes
Other explanation including relevant important assumptions and estimation:
42. Deferred income
RMB/CNY
Item Opening balance Current increased Current decreased Ending balance Causes
Government grant
with assets
concerned
99879427.55 5100000.00 4949770.34 100029657.21
See table below
for details
Government grant
with income
concerned
1595095.71 1016549.91 578545.80
See table below
for details
Total 101474523.26 5100000.00 5966320.25 100608203.01 --
Item with government grants involved:
RMB/CNY
Liability
Opening
balance
New grants
in the
Period
Amount
reckoned in
non-
operation
revenue
Amount
reckoned in
other
income
Cost
reduction
in the
period
Other
changes
Ending
balance
Assets-
related/inc
ome related
(1) Base of
further
processing
for tea and
nature
plants
1375000.
00
275000.00
1100000.
00
Assets-
related
(2)
Enterprise
technology
center is a
municipal
R&D
center.Subsidies
2191325.
64
204024.47
1987301.
17
Assets-
related
for
industrial
technologic
al
advanceme
nt
(3) Project
grants for
years for
agricultural
district
Xihu Zone
441538.48 129230.76 312307.72
Assets-
related
(4) Key
technology
research
and
developme
nt for the
preparation
of high-
quality
aroma
extracts
based on
the use of
tea aroma
precursors
524800.00 283476.42 241323.58
Income
related
(5) Key
technology
research
and
developme
nt for the
preparation
of high-
quality
aroma
extracts
based on
the use of
tea aroma
precursors
250000.00 6766.38 243233.62
Assets-
related
(6) 1070295. 733073.49 337222.22 Income
Finance
Discount
71 related
(7)
Industrializ
ation of
direct
preparation
of instant
tea powder
2280582.
54
196445.87
2084136.
67
Assets-
related
(8) Subsidy
for
research
and
industrializ
ation of
key
technology
of instant
tea powder
167256.22 14245.01 153011.21
Assets-
related
(9) Fund
for
Developme
nt of
Strategic
Emerging
Industries
in
Shenzhen
of plant
deep
processing
technology
engineerin
g in
Shenzhen
(SFG
[2013]
No.1601)
3890101.
98
351209.03
3538892.
95
Assets-
related
(10)
Constructio
n amount
for 50 tons
for clearly
625000.00 125000.00 500000.00
Assets-
related
processing
for
Mingyou
tea
(11)Subsid
y for tea
seeding of
New Tea
Garden in
Wangkou
47239.24 1109.28 46129.96
Assets-
related
(12)
Subsidy for
supply
system
constructio
n of
agricultural
products
950000.00 200000.00 750000.00
Assets-
related
(13) Grain
storage
project of
Dongguan
SZCG
Logistics
Co. Ltd. -
Storage A
8501697.
32
259279.49
8242417.
83
Assets-
related
(14)
Phase II of
grain
storage
project of
Dongguan
SZCG
Logistics
Co. Ltd.-
Storage B
34000000
.00
1031300.
48
32968699
.52
Assets-
related
(15) Grain
oil and
food
headquarte
rs and
innovative
public
18000000
.00
18000000
.00
Assets-
related
service
platform of
Dongguan
SZCG
Logistics
Co. Ltd.
(16) Fund
for
intelligent
Upgrading
and
Renovation
of Grain
Depots in
"Grain
Safety
Project" in
2017
5100000.
00
5100000.
00
Assets-
related
(17)
Constructio
n of
450000 ton
silos and
60000 ton
film silos -
CDE
warehouse.Gas storage
bin
17700000
.00
208235.29
17491764
.71
Assets-
related
(18)
Special
fund for
agricultural
developme
nt in
Shenzhen -
subsidy for
agricultural
product
quality and
safety
testing
capacity-
240000.00 240000.00
Assets-
related
building
project
(19)
Special
fund for
agricultural
developme
nt of 2016-
agricultural
product
safety
testing
project-
capacity
building of
the third
party
inspection
institution
expansion
evaluation
656000.00 164000.00 492000.00
Assets-
related
(20)
Agricultura
l product
safety
testing
project of
the special
fund for
agricultural
developme
nt of 2016
- Central
investment
fund
1368000.
00
342000.00
1026000.
00
Assets-
related
(21)
Constructio
n of O2O
community
sales
service
system for
high
1827987.
24
38576.04
1789411.
20
Assets-
related
quality
grain and
oil based
on B2C E-
commerce
platform
(22)
Industrializ
ation of
Doximi E-
commerce
platform
3712698.
89
899014.88
2813684.
01
Assets-
related
(23)
Commercia
l
circulation
developme
nt project
funding for
year of
2017
655000.00 131000.00 524000.00
Assets-
related
(24)
Intelligent
manageme
nt of grain
depot
based on
mobile
internet
1000000.
00
133333.36 866666.64
Assets-
related
10147452
3.26
5100000.
00
5233246.
76
733073.49 10060820
3.01
Other explanation
The amount in the current profit and loss of the current period included other income of 5233246.76 yuan offsetting the financial
charge - interest expense of 733073.49 yuan.Subsidiary of the Company Dongguan Logistics received a special funds plan for intelligent upgrading and renovation of grain depot
of “grain safety project” in 2017 and performance goal subsidy amounted to 5.1 million yuan. The amount are not amortized due to the
system are not yet completed in the period
. Other non-current liability
RMB/CNY
Item Ending balance Opening balance
Other explanation
44. Share capital
RMB/CNY
Opening
balance
Increased (decreased) in this year +-
Ending
balance New shares
issued
Bonus shares
Shares
converted
from public
reserve
Other Subtotal
Total shares
496782303.
00
655752951.
00
655752951.
00
115253525
4.00
Other explanation
According to the resolution of the 15th meeting of the Ninth Session of Board of Directors of the Company on March 23 2018 the
resolution of the 17th meeting of the Ninth Session of Board of Directors on June 8 2018 and the resolution of the first extraordinary
general meeting of the Company in 2018 on June 27 2018 and the resolution of the 22nd meeting of the Ninth Session of Board of
Directors on September 6 2018 and approved by the Reply to the Approval for Shenzhen Shenbao Industrial Co. Ltd. to Issue Shares
to Shenzhen Fude State-owned Capital Operation Co. Ltd. to Purchase Assets CJXK [2018] No. 1610 from China Securities
Regulatory Commission the Company issued 655752951 shares of the restricted common stock to Fude Capital so as to acquire its
100% equity of SZCG and the nominal value of the newly issued shares was RMB 1.00 per share the issue price per share was RMB
8.96. After the issuance the share capital of the Company was changed to RMB 1152535254.00.
45. Other equity instrument
(1)Basic information of the outstanding preferred stock and perpetual capital securities at period-end
(2) Changes of outstanding preferred stock and perpetual capital securities at period-end
RMB/CNY
Outstandin
g financial
instrument
Period-beginning Current increased Current decreased Period-end
Amount Book value Amount Book value Amount Book value Amount Book value
Changes of other equity instrument change reasons and relevant accounting treatment basis:
Other explanation
. Capital reserves
RMB/CNY
Item Opening balance Current increased Current decreased Ending balance
Capital premium
(Share capital
premium)
2054313934.84 5219793489.96 5860111077.30 1413996347.50
Other capital reserve 8850767.28 45614.58 8896381.86
Total 2063164702.12 5219839104.54 5860111077.30 1422892729.36
Other instructions including changes in the current period reasons for the change:
1. Capital premium (share premium) The increase in the current period was the
655752951 shares of the restricted common stock issued to Shenzhen Fude State-owned Capital Operation Co. Ltd. to acquire its
100% equity of SZCG the nominal value of the newly issued shares was RMB 1.00 per share the issue price per share was RMB 8.96.
The difference between the issue price per share and the face value was included in the share premium; the decrease in the current
period was because the enterprise under the same control merged the wholly-owned subsidiary SZCG.
2. The increase in other capital reserves in the current period was mainly because Shenzhen Nongdimei Investment Management Co.
Ltd. exempted all interest and penalty interest under the 5250000.00 yuan claim of Shenshenbao Tea Culture a subsidiary of the
Company involving an exemption amount of RMB 45614.58.
47.Treasury stock
RMB/CNY
Item Opening balance Current increased Current decreased Ending balance
Other explanation including changes and reasons for changes:
48. Other comprehensive income
RMB/CNY
Item
Opening
balance
Current Period
Ending
balance
Account
before
income tax
in the year
Less: written
in other
comprehensive
income in
previous
period and
carried
forward to
gains and
losses in
current period
Less :
income tax
expense
Belong to
parent
company
after tax
Belong to
minority
shareholders
after tax
Other explanation including the active part of the hedging gains/losses of cash flow transfer to initial recognization adjustment for
the arbitraged items:
. Reasonable reserve
RMB/CNY
Item Opening balance Current increased Current decreased Ending balance
Production safety fee 70395.63 846741.24 916982.66 154.21
Total 70395.63 846741.24 916982.66 154.21
Other explanation including changes and reasons for changes:
50. Surplus reserves
RMB/CNY
Item Opening balance Current increased Current decreased Ending balance
Statutory surplus
reserves
327140910.28 327140910.28
Total 327140910.28 327140910.28
Other explanation including changes and reasons for changes:
Nil
51. Retained profit
RMB/CNY
Item Current period Last period
Retained profit at the end of the previous year
before adjustment
961602454.82 503877419.19
Total retained profit at the beginning of the
previous year before adjustment
961602454.82 503877419.19
Add: net profit attributable to shareholder of
parent company
308331032.44 359174263.44
Common Stock dividends payable (128599604.22)
Add: Others 227150376.41
Retained profit at period-end 1269933487.26 961602454.82
Details about adjusting the retained profits at the beginning of the period:
1) The retroactive adjustments to Accounting Standards for Business Enterprises and its relevant new regulations affect the retained
profits at the beginning of the period amounting to 0 Yuan.
2) The changes in accounting policies affect the retained profits at the beginning of the period amounting to 0 Yuan.
3) The major accounting error correction affects the retained profits at the beginning of the period amounting to 0 Yuan
4) Merge scope changes caused by the same control affect the retained profits at the beginning of the period amounting to Yuan.
5) Other adjustments affect the retained profits at the beginning of the period amounting to 0 Yuan
. Operating income and operating cost
RMB/CNY
Item
Current Period Last Period
Income Cost Income Cost
Main business 10747576698.29 9686779830.78 10787535959.58 9842943493.15
Other business 11206139.85 6854443.43 6157197.21 4403705.50
Total 10758782838.14 9693634274.21 10793693156.79 9847347198.65
53. Tax and surcharges
RMB/CNY
Item Current Period Last Period
Urban maintenance and construction tax 2165312.82 1683109.99
Educational surtax 1629329.96 1256505.73
Property tax 8050618.18 7921136.10
Land use tax 2524108.37 2825504.21
Stamp tax 959970.44 1230617.22
Other 40183.75 127261.71
Total 15369523.52 15044134.96
Other explanation
Nil
54. Sales expenses
RMB/CNY
Item Current Period Last Period
Labor and social security benefits 64382900.10 63469840.24
Rental 8600847.41 14320121.12
Utilities and office expenses 4423846.48 5756170.62
After-sale services 5381877.15 7324378.18
Logistics transportation fee 60230906.69 64964942.16
Travel expenses 3385483.21 2683069.45
Equivalent loss for low value perishable
goods
7201541.87 7887133.24
Depreciation and amortization of long-
term assets
11154844.42 11094475.80
Business hospitality 1575490.94 2174720.93
Advertisement charge 547154.17 1342122.12
Sales commission 3323497.22 143530.31
Port terminal charges 69833224.80 75823886.10
Property insurance premium 1070556.38 571307.80
Other 13908901.70 17469330.81
Total 255021072.54 275025028.88
Other explanation
Nil
55. Administration expenses
RMB/CNY
Item Current Period Last Period
Labor and social security benefits 150406024.19 123481675.10
Communication fee 1570816.01 1812464.25
Vehicle usage fee 2306678.91 2943286.58
Low-value consumables 481089.89 233764.48
Repair cost 823967.71 888476.18
Depreciation and amortization of long-
term assets
32279753.91 25916762.95
Travel expenses 3200086.74 2926642.86
Business hospitality 3338547.23 3504046.80
Office expenses 7879468.54 4365615.28
Rental 2142501.24 2457513.00
Intermediary fees 14370730.10 9633452.02
Relocation and shutdown costs 4908709.05
Other 22835462.95 14972322.77
Total 246543836.47 193136022.27
Other explanation
Nil
56. R&D expenses
RMB/CNY
Item Current Period Last Period
Labor and social security benefits 8050749.76 5984184.93
Depreciation cost 1369522.27 1612761.29
Office expenses 778680.36 55978.70
Travel expenses 212282.20 178096.03
Logistics consumption 95614.49 67205.66
Intermediary fees 527105.99
Maintenance and inspection fee 92759.15 219619.34
Other 379856.41 1182755.82
Total 10979464.64 9827707.76
Other explanation
Nil
57. Financial expenses
RMB/CNY
Item Current Period Last Period
Interest expenditure 20410885.62 8569062.23
Less: Interest income 8364388.05 9080593.99
Exchange loss -2516157.85 -4151068.77
Bank commission charge 600973.53 1327073.22
Other
Total 10131313.25 -3335527.31
Other explanation
Financial expenses in the period increased 13466840.56 yuan over that of lasts period with 403.74 percent up
mainly because subsidiary Dongguan Logistics increase the loans for engineering requirement.
58. Asset impairment loss
RMB/CNY
Item Current Period Last Period
I. Bad debt losses 17933622.38 8361980.13
II. Inventory falling price loss 173498864.92 93324340.40
VII. Impairment loss of fixed assets 4482037.94
XII. Impairment loss of intangible assets 3721498.27 2999843.89
XIII. Impairment loss of goodwill 673940.32
Total 199636023.51 105360104.74
Other explanation
Asset impairment loss in the period increased 94275918.77 yuan over that of lasts period with 89.48 percent up
mainly because the inventory Falling price reserves accrual in the period increased.
59. Other income
RMB/CNY
Income sources Current Period Last Period
Amortization of deferred income 4949770.34 3436655.59
Amortization of deferred income 283476.42 25200.00
Special funds supporting project for the
independent innovation industry
development in Nanshan District
(funding for modern agricultural
development)
200000.00 200000.00
Industrial development subsidy for Xihu
Longjing Tea
80000.00 150000.00
Subsidy for Zhejiang Tea Industry
Technology Project (demonstration and
promotion of green prevention and
control of longjing tea in Xihu and
production technology of weight
reduction and drug reduction)
150000.00
Leading funds for industrial
development
425763.00
Employment subsidy 201886.98
Projects to support leading agricultural
enterprise in capacity improvement
300000.00 5133.68
Special fund for industrial development
in Futian District (annual quarterly
growth supporting- headquarters
recognition and operation supporting -
E-commerce sales operation supporting)
2749600.00
Incentive plan for the scale of E-
commerce trading platform for year of
2017
1000000.00
Steady post subsidy 96450.23 131661.86
Supporting funds for energy saving and
emission reduction for voluntary cleaner
production projects
150000.00
Certification award of the provincial 100000.00
enterprise technology center of 2016
from Wuyuan ICC
Special funds for the development of
service industry in E-commerce
717000.00
Special funds supporting project for the
independent innovation industry
development in Nanshan District- funds
for the economic development
200000.00
Special fund for maintenance of the
construction of food emergency system
(capacity construction of grain quality
inspection) from CEIT
100000.00
Other 464911.16 156000.00
Total 10901858.13 5371651.13
60. Investment income
RMB/CNY
Item Current Period Last Period
Long-term equity investment gains
recognized under equity method
-1755504.74 -490760.14
Investment income from disposal of long-
term equity investment
800000.00
Earnings from financing products 3029857.89 2706034.95
Other 450000.00
Total 1724353.15 3015274.81
Other explanation
Note: Other investment income refers to the performance compensation of 450000.00 yuan paid by minority
shareholders of affiliated enterprise Guangzhou Shenbao Mendao Tea Co. Ltd.
61. Changing income of fair value
RMB/CNY
Income resources Current Period Last Period
Financial assets measured by fair value
and with its variation reckoned into
current gain/loss
-474740.24 -1651270.40
Total -474740.24 -1651270.40
Other explanation
Nil
. Asset disposal income
RMB/CNY
Source of asset disposal income Current Period Last Period
Profit or loss for the disposal of fixed
assets
1601802.27 -22935.33
63. Non-operating income
RMB/CNY
Item Current Period Last Period
Amount included in the
current non-recurring profit
and loss
Donation accepted 1240000.00
Government grants without
daily activity concerned
5000.00 105133.68 5000.00
Compensation fro breach of
contract
431861.50 120300.00 431861.50
Other 953573.34 9917309.31 953573.34
Total 1390434.84 11382742.99
1390434.84
Government grants reckoned into current gains/losses:
RMB/CNY
Grants
Issuing
subject
Issuing
cause
Property
type
Whether
the impact
of
subsidies
on the
current
profit and
loss
Whether
special
subsidies
Amount of
this period
Amount of
last period
Assets
related/Inc
ome related
Other explanation
Non-operating income has 9992308.15 yuan declined over that of last period with 87.78 percent down mainly
because claims of 8200000.00 yuan received last period for subsidiary closed for liquidation
64. Non-operating expenditure
RMB/CNY
Item Current Period Last Period
Amount included in the
current non-recurring profit
and loss
External donations 99485.68 2580210.27 99485.68
Loss of scrap from non-
current assets
393959.39 139848.40 393959.39
Fine expenditure (and
liquidated damages)
1071.89 3850.00 1071.89
Tax delay charge 23243.76 140138.96 23243.76
Compensation 2257706.50 4186199.54 2257706.50
Other 490981.21 631651.01 490981.21
Total 3266448.43 7681898.18 3266448.43
Other explanation
Non-operating expenditure has 4415449.75 yuan declined over that of last period with 57.48 percent down
mainly because compensation paid in the period declined.
65.Income tax expense
(1) Statement of income tax expenses
RMB/CNY
Item Current Period Last Period
Current income tax expenses
15461101.10
17979927.26
Deferred income tax expenses 3027764.24 -7153523.58
Total 18488865.34 10826403.68
(2) Adjustment process of accounting profit and income tax expenses
RMB/CNY
Item Current Period
Total profit 339344589.72
Income tax expenses calculated by statutory tax rate 84836147.43
Impact from different tax rate apply with the subsidiary -1891579.89
Impact from previous income tax adjusted 1660845.67
Impact of non-taxable income -137966143.31
Impact on cost expenses and losses that unable to deducted
35960373.72
Effect of deductible losses of deferred tax assets unconfirmed at -1289340.25
the earlier stage of use
Impact on deductible temporary differences or losses
deductible which was un-recognized as deferred income tax
assets
37178561.97
income tax expenses 18488865.34
Other explanation
Nil
66. Other comprehensive income
Found more in annotations
67. Annotation of cash flow statement
(1) Cash received with other operating activities concerned
RMB/CNY
Item Current Period Last Period
Intercourse funds and deposit 129048838.74 171613144.84
Government grants 10773611.37 7514980.36
Interest income 7802888.05 8736862.48
Other 1445214.16 1418497.30
Total 149070552.32 189283484.98
Note of cash received with other operating activities concerned:
Nil
(2) Cash paid with other operating activities concerned
RMB/CNY
Item Current Period Last Period
Intercourse funds and deposit 94186178.56 38539679.43
Operational daily expenses 213908218.92 259271280.27
Other 2872489.04 2309290.00
Total 310966886.52 300120249.70
Note of cash paid with other operating activities concerned:
Nil
(3) Cash received with other investment activities concerned
RMB/CNY
Item Current Period Last Period
Performance compensation 450000.00
Total 450000.00
Note of cash received with other investment activities concerned
Nil
(4) Cash paid related with investment activities
RMB/CNY
Item Current Period Last Period
Note of cash paid related with investment activities
Nil
(5) Cash received with other financing activities concerned
RMB/CNY
Item Current Period Last Period
Loans 10000000.00
Total 10000000.00
Note of cash received with other financing activities concerned
Nil
(6) Cash paid related with financing activities
RMB/CNY
Item Current Period Last Period
Fund borrowing from related party 3800000.00
Relevant expenses for bonus paid 97916.29
Total 3897916.29
Note of cash paid related with financing activities:
Nil
68. Supplementary information to statement of cash flow
(1) Supplementary information to statement of cash flow
RMB/CNY
Item Current period Last period
1. Net profit adjusted to cash flow of -- --
operation activities:
Net profit 320855724.38 350875648.18
Add: Impairment provision for assets 199636023.51 105360104.74
Depreciation of fixed assets consumption
of oil assets and depreciation of productive
biology assets
79619849.04 72225381.71
Amortization of intangible assets 18007582.56 13765799.33
Amortization of long-term pending
expenses
6742417.85 8524320.63
Loss from disposal of fixed assets
intangible assets and other long-term
assets (income is listed with “-”)
-1601802.27 22935.33
Losses on scrapping of fixed assets(income is listed with “-“)
393959.39 139848.40
Loss from change of fair value (income islisted with “-“)
474740.24 1651270.40
Financial expenses (income is listed with
“-”)
18627801.26 3849889.09
Investment loss (income is listed with “-”) -1724353.15 -3015274.81
Decrease of deferred income tax assets
(increase is listed with “-”)
3560166.42 -6453503.83
Decrease of deferred income tax
asset( (increase is listed with “-”)
-532402.18 -700019.75
Decrease of inventory (increase is listed
with “-”)
-46833652.80 -464147408.66
Decrease of operating receivable accounts
(increase is listed with “-”)
-308973425.11 -90591903.90
Increase of operating payable accounts
(decrease is listed with “-”)
10851006.44
25551605.02
Net cash flow arising from operating
activities
299103635.58 17058691.88
2. Material investment and financing not
involved in cash flow
-- --
3. Net change of cash and cash
equivalents:
-- --
Balance of cash at period end 631638339.68 544440739.45
Less: Balance of cash at year-begin 544440739.45 759577580.52
Net increasing of cash and cash 87197600.23 -215136841.07
equivalents
(2) Net cash paid for obtaining subsidiary in the Period
RMB/CNY
Amount
Including: --
Including: --
Including: --
Other explanation
Nil
(3) Net cash received by disposing subsidiary in the Period
RMB/CNY
Amount
Including: --
Including: --
Including: --
Other explanation
Nil
(4) Constitution of cash and cash equivalent
RMB/CNY
Item Ending balance Opening balance
Ⅰ. Cash 631638339.68 544440739.45
Including:Cash on hand 282322.45 555961.15
Bank deposit available for payment
at any time
631190032.12 543565898.62
Other monetary fund available for
payment at any time
165985.11 318879.68
Ⅲ. Balance of cash and cash equivalent at
period-end
631638339.68 544440739.45
Other explanation
Nil
. Notes of changes of owners’ equity
Explain the name and adjusted amount in “Other” at end of last period:
Nil
70. Assets with ownership or use right restricted
RMB/CNY
Item Ending book value Reasons for restriction
Intangible assets 47406749.48
According to the long-term loan
mortgage contract signed by Dongguan
Logistics a subsidiary of the Company
and Agricultural Development Bank
Dongguan Logistics mortgaged the land
(DFGY (2014) DT No. 6) of No. 32
Jianshe Road Masan Village Machong
Town Dongguan City and the grain
storage and terminal facilities to be built
and other buildings and structures on the
ground to Agricultural Development
Bank as collateral for the loan.
Fix assets 377777105.09
According to the long-term loan
mortgage contract signed by Dongguan
Logistics a subsidiary of the Company
and Agricultural Development Bank
Dongguan Logistics mortgaged the land
(DFGY (2014) DT No. 6) of No. 32
Jianshe Road Masan Village Machong
Town Dongguan City and the grain
storage and terminal facilities to be built
and other buildings and structures on the
ground to Agricultural Development
Bank as collateral for the loan.
Construction in progress 39276418.03
According to the long-term loan
mortgage contract signed by Dongguan
Logistics a subsidiary of the Company
and Agricultural Development Bank
Dongguan Logistics mortgaged the land
(DFGY (2014) DT No. 6) of No. 32
Jianshe Road Masan Village Machong
Town Dongguan City and the grain
storage and terminal facilities to be built
and other buildings and structures on the
ground to Agricultural Development
Bank as collateral for the loan.
Intangible assets 36339192.71
According to the loan contract of
“Guangdong DG 2017 NGDZ No. 006”
signed by Dongguan Food Industry Park
a subsidiary of the Company and Bank of
Communications Guangdong Branch
Dongguan Food Industry Park mortgaged
its two pieces of lands (DFGY (2009) DT
No. 190) and (DFGY (2012) DT No. 152)
to Bank of Communications Guangdong
Branch as collaterals for the borrowing.
Total 500799465.31 --
Other explanation
Nil
71. Foreign currency monetary items
(1) Foreign currency monetary items
RMB/CNY
Item
Ending foreign currency
balance
Convert rate
Ending RMB balance
converted
Monetary fund -- --
Including:USD 1457449.54 6.8632 10002767.68
EURO
HKD 248629.03 0.8762 217848.76
Account receivable -- --
Including:USD 213994.44 6.8632 1468686.64
EURO
HKD 1502845.97 0.8762 1316793.64
Long-term loans -- --
Including:USD
EURO
HKD
Other explanation
Nil
(2) Explanation on foreign operational entity including as for the major foreign operational entity disclosed
main operation place book-keeping currency and basis for selection; if the book-keeping currency changed
explain reasons
□Applicable √Not applicable
72. Hedging
Disclosed hedging items and relevant hedging instrument based on hedging’s category disclosed qualitative and quantitative
information for the arbitrage risks:
Nil
73. Government grants
(1) Government grants
RMB/CNY
Category Amount Item
Amount booked in current
gain/loss
Base of further processing for
tea and nature plants
1375000.00
Deferred income
275000.00
Enterprise technology center
is a municipal R&D center.Subsidies for industrial
technological advancement
2191325.64
Deferred income
204024.47
Project grants for years for
agricultural district Xihu
Zone
441538.48
Deferred income
129230.76
Key technology research and
development for the
preparation of high-quality
aroma extracts based on the
use of tea aroma precursors
524800.00
Deferred income
283476.42
Key technology research and
development for the
preparation of high-quality
aroma extracts based on the
use of tea aroma precursors
250000.00
Deferred income
6766.38
Finance Discount 1070295.71 Deferred income
Industrialization of direct
preparation of instant tea
powder
2280582.54
Deferred income
196445.87
Subsidy for research and
industrialization of key
technology of instant tea
powder
167256.22
Deferred income
14245.01
Fund for Development of
Strategic Emerging Industries
in Shenzhen of plant deep
processing technology
engineering in Shenzhen
(SFG [2013] No.1601)
3890101.98
Deferred income
351209.03
Construction amount for 50
tons for clearly processing for
Mingyou tea
625000.00
Deferred income
125000.00
Subsidy for tea seeding of
New Tea Garden in Wangkou
47239.24
Deferred income
1109.28
(12) Subsidy for supply
system construction of
agricultural products
950000.00
Deferred income
200000.00
Grain storage project of
Dongguan SZCG Logistics
Co. Ltd. - Storage A
8501697.32
Deferred income
259279.49
Phase II of grain storage
project of Dongguan SZCG
Logistics Co. Ltd.- Storage B
34000000.00
Deferred income
1031300.48
Grain oil and food
headquarters and innovative
public service platform of
Dongguan SZCG Logistics
Co. Ltd.
18000000.00
Deferred income
Fund for intelligent
Upgrading and Renovation of
Grain Depots in "Grain
Safety Project" in 2017
5100000.00
Deferred income
Construction of 450000 ton
silos and 60000 ton film silos
-CDE warehouse. Gas storage
bin
17700000.00
Deferred income
208235.29
Special fund for agricultural 240000.00 Deferred income 240000.00
development in Shenzhen -
subsidy for agricultural
product quality and safety
testing capacity-building
project
Special fund for agricultural
development of 2016-
agricultural product safety
testing project- capacity
building of the third party
inspection institution
expansion evaluation
656000.00
Deferred income
164000.00
Agricultural product safety
testing project of the special
fund for agricultural
development of 2016 -
Central investment fund
1368000.00
Deferred income
342000.00
Construction of O2O
community sales service
system for high quality grain
and oil based on B2C E-
commerce platform
1827987.24
Deferred income
38576.04
Industrialization of Doximi
E-commerce platform
3712698.89
Deferred income
899014.88
Commercial circulation
development project funding
for year of 2017
655000.00
Deferred income
131000.00
Intelligent management of
grain depot based on mobile
internet
1000000.00
Deferred income
133333.36
Special funds supporting
project for the independent
innovation industry
development in Nanshan
District (funding for modern
agricultural development)
200000.00
Other income
200000.00
Industrial development
subsidy for Xihu Longjing
Tea
80000.00
Other income
80000.00
Subsidy for Zhejiang Tea
Industry Technology Project
(demonstration and
150000.00
Other income
150000.00
promotion of green
prevention and control of
longjing tea in Xihu and
production technology of
weight reduction and drug
reduction)
Leading funds for industrial
development
425763.00
Other income
425763.00
Employment subsidy 201886.98 Other income 201886.98
Projects to support leading
agricultural enterprise in
capacity improvement
300000.00
Other income
300000.00
Special fund for industrial
development in Futian
District (annual quarterly
growth supporting-
headquarters recognition and
operation supporting - E-
commerce sales operation
supporting)
2749600.00
Other income
2749600.00
Incentive plan for the scale of
E-commerce trading platform
for year of 2017
1000000.00
Other income
1000000.00
Steady post subsidy 96450.23 Other income 96450.23
Other 464911.16 Other income 464911.16
Granary Zero Distance
Activity Subsidy Income
5000.00
Non-operating income
5000.00
Total 112248134.63 10906858.13
(2) Government subsidy rebate
□Applicable √Not applicable
Other explanation
Nil
74. Other
Nil
VIII. Changes of consolidation range
1. Enterprise merger not under the same control
(1) Enterprise merger not under the same control
RMB/CNY
Acquiree
Time point
for equity
obtained
Cost of
equity
obtained
Ratio of
equity
obtained
Acquired
way Equity
obtained
way
Purchasing
date
Standard to
determine
the
purchasing
date
Income of
acquiree
from
purchasing
date to
period-end
Net profit
of acquiree
from
purchasing
date to
period-end
Other explanation
(2) Combination cost and goodwill
RMB/CNY
Combination cost
Determination method for fair value of the combination cost and contingent consideration and changes:
Main reasons for large goodwill resulted:
Other explanation
(3)Identifiable assets and liability on purchasing date under the acquiree
RMB/CNY
Fair value on purchasing date Book value on purchasing date
Determination method for fair value of the identifiable assets and liabilities:
Contingent liability of the acquiree bear during combination:
Other explanation
(4) Gains or losses arising from re-measured by fair value for the equity held before purchasing date
Whether it is a business combination realized by two or more transactions of exchange and a transaction of obtained control rights in
the Period or not
□Yes √No
(5) On purchasing date or period-end of the combination combination consideration or fair value of
identifiable assets and liability for the acquiree are un-able to confirm rationally
(6) Other explanation
2. Enterprise combined under the same control
(1) Enterprise combined under the same control in the Period
RMB/CNY
Acquir
ee
Equity
ratio
obtained
in
combinati
on
Basis of
combine
d under
the same
control
Combinati
on date
Standard to
determine
the
combination
date
Income of the
combined
party from
period-begin
of
combination
to the
combination
date
Net profit of
the
combined
party from
period-begin
of
combination
to the
combination
date
Income of the
combined party
during the
comparison
period
Net profit of
the
combined
party during
the
comparison
period
SZCG 100.00%
Controll
ed by the
same
controlle
r
2018-10-
31
See other
instructions
below.
7746037670.
53
374880023.
05
10477930448
.44
413268399.
67
Other explanation
(1) The gist that the transaction constitutes the business combination under the same control and the basis for the determination of the
date of combination
According to the resolutions of the fifteenth meeting of the ninth session of the board of directors the seventeenth meeting of the ninth
board of directors the twenty-second meeting of the ninth board of directors of the Company and the resolution of the first extraordinary
general meeting of 2018 the Company purchased 100% equity of SZCG held by Fude Capital by issuing shares to it (the number of
shares issued was 655752951 shares and the issue price was RMB 8.96 per share). Prior to this transaction Fude Capital was the
controlling shareholder of the Company and SZCG and the actual controller of the Company and SZCG was the State-owned AssetsSupervision and Administration Commission of Shenzhen Municipal People’s Government (hereinafter referred to as “Shenzhen
SASAC”). Therefore this transaction constituted a business combination under the same control.
On June 14 2018 Shenzhen State-owned Assets Supervision and Administration Commission approved and agreed the Company’s
issuance of shares to purchase 100% equity of SZCG. On October 15 2018 the Company received the Reply to the Approval for
Shenzhen Shenbao Industrial Co. Ltd. to Issue Shares to Shenzhen Fude State-owned Capital Operation Co. Ltd. to Purchase Assets
CJXK [2018] No. 1610 from China Securities Regulatory Commission agreed the Company to acquire 100.00% equity of SZCG held
by Fude Capital. On October 18 2018 100% equity of SZCG completed the transfer procedures and related industrial and commercialchange registration at the same time according to the transition period defined in the “Agreement on the Issuance of Shares toPurchase Assets” signed by the Company and Fude Capital if the asset settlement day was after the 15th day of the calendar day
(excluding the 15th day) the base date of the transition period would be the last day of the month in which the settlement day is located
so the date of combination was determined to be October 31 2018.
(2)Combination cost
RMB/CNY
Combination cost
--Face value of the equity securities issued 655752951.00
Explanation on contingent consideration and its changes:
(1) Other explanation
According to the evaluation report of CEAPBZ (2018) No. 3558 issued by Beijing China Enterprise Appraisals Co.
Ltd. the evaluation base date of 100% equity of SZCG was September 30 2017 and the assessed value of net assets
of SZCG as of the evaluation base date was RMB 5875546441.66 as agreed by both parties the transaction price
of the underlying assets was RMB 5875546440.96. The Company issued 655752951.00 shares and the issue
price per share was RMB 8.96. Premium of Equity Securities Issued was RMB 5219793489.96.Other explanation
(3) Assets and liability of the combined party on combination date
RMB/CNY
On purchasing date At end of last period
Assets: 5310332674.24 4840641503.76
Monetary fund 600553591.10 288479089.04
Account receivable 206050714.46 117193674.60
Inventory 2683227764.79 2783161703.37
Fix assets 711961434.07 732143993.78
Intangible assets 370256397.21 219674825.10
Accounts paid in advance 40012538.83 33240102.96
Other account receivable 49419662.13 22314871.24
Other current assets 93208387.32 170334054.65
Long-term equity investment 67666579.60 30506541.89
Investment real estate 268241078.37 300621820.59
Construction in progress 162969025.13 70601059.58
Long-term expenses to be apportioned 13077987.49 16679524.99
Deferred income tax asset 42720013.74 48210182.26
Other non-current asset 967500.00 500000.00
Liability: 1872640365.65 1830971947.13
Loan 159800000.00 159800000.00
Account payable 332603307.36 534934123.29
Accounts received in advance 285807551.08 175518986.59
Wage payable 77107216.24 103760977.72
Taxes payable 37208501.33 12791041.31
Other account payable 276459853.57 272210836.95
Non-current liabilities due within one
year
49783468.21 40642777.63
Other current liabilities 219151968.63 219151968.63
Long-term loans 320730897.34 195647403.88
Deferred income 86542499.92 88821434.54
Long-term account payable 15457410.48 15416306.67
Deferred income tax liabilities 11987691.49 12276089.92
Net assets 3437692308.59 3009669556.63
Less:minority’s equity 146277271.77 107829368.11
Net assets obtained 3291415036.82 2901840188.52
Contingent liability of the combined party bear during combination:
Other explanation
3. Reverse purchase
Basic transaction information basis of counter purchase whether making up business due to the assets and liability reserved by listed
company and basis determination of combination cost amount and calculation on adjusted equity by equity transaction
4. Disposal Subsidiary
Whether there is a subsidiary disposal on one time which is loss control of rights
□Yes √No
Whether there is a subsidiary disposal by steps through multiple trading and loss control of rights in the period
□Yes √No
5. Other reasons for consolidation range changed
Consolidation scope changes caused by other reasons (eg newly establish subsidiaries liquidate subsidiaries etc.) and the related
circumstances:
According to the Company’s wholly-owned subsidiary SZCG signed the “Master Agreement on Major Asset Restructuring of State-owned Assets and Related Equity of Shenzhen Cereals Group Co. Ltd.” and the “Agreement on the Free Transfer of State-owned
Assets of Zhanjiang Haitian Aquatic Feed Co. Ltd.” with Fude Capital in the current period the Company transferred its 90% equity
of Zhanjiang Haitian Aquatic Feed Co. Ltd. to Fude Capital free of charge. After transfer Zhanjiang Haitian Aquatic Feed Co. Ltd
will not included in consolidate scope any more.. Other
IX. Equity in other entity
1. Equity in subsidiary
(1) Constitute of enterprise group
Subsidiary
Main operation
place
Registered
place
Business nature
Share-holding ratio
Acquired way
Directly Indirectly
Shenbao
Huacheng
Shenzhen Shenzhen Manufacturing 100.00% Establishment
Wuyuan Ju
Fang Yong
Shangrao Shangrao Manufacturing 100.00% Establishment
Shenbao
Sanjing
Huizhou Shenzhen Manufacturing 100.00% Establishment
Huizhou
Shenbao
Science &
Technology
Huizhou Huizhou Comprehensive 100.00% Establishment
Shenbao
Properties
Shenzhen Shenzhen
Property
management
100.00% Establishment
Shenbao
Industrial &
Trading
Huizhou Shenzhen
Wholesale
business
100.00% Establishment
Hangzhou Ju
Fang Yong
Hangzhou Hangzhou Comprehensive 100.00% Establishment
Shenbao
Technology
Center
Shenzhen Shenzhen
Development
consultant and
transfer of
technology
100.00% Establishment
Fuhaitang
Ecological
Hangzhou Hangzhou
Tea planting
production and
sales
100.00% Acquisition
Chunshi
Network
Hangzhou Hangzhou
Wholesale
business
100.00% Establishment
Shenshenbao
Investment
Shenzhen Shenzhen
Investment
management
100.00% Establishment
Shenshenbao
Tea Culture
Shenzhen Shenzhen Commerce 100.00% Establishment
Ju Fang Yong
Trading
Hangzhou Hangzhou
Wholesale
business
60.00% Establishment
Yunnan Supply
Chain
Pu’er Pu’er
Wholesale
business
100.00% Establishment
Huizhou
Shenbao Food
Shenzhen Shenzhen
Wholesale
business
100.00% Establishment
Shenbao Rock
Tea
Wuyishan Wuyishan Manufacturing 100.00% Establishment
Pu’er Tea
Trading Center
Pu’er Pu’er
Service
industry
55.00% Establishment
Shenbao Tea-
Shop
Shenzhen Shenzhen Commerce 100.00% Establishment
Fuhaitang
Catering
Hangzhou Hangzhou Catering 100.00% Establishment
SZCG Shenzhen Shenzhen
Grain & oil
trading
100.00% Control
Shenzhen Flour Shenzhen Shenzhen
Flour
processing
100.00% Control
Hualian Grain
& oil trading
Shenzhen Shenzhen
Grain & oil
trading
100.00% Control
Hainan Haitian Haikou Haikou
Feed
production
51.00% 49.00% Control
SZCG
Quality
Inspection
Shenzhen Shenzhen Inspection 100.00% Control
SZCG Doximi Shenzhen Shenzhen E-commerce 100.00% Control
SZCG Cold-
Chain Logistic
Shenzhen Shenzhen
Fresh food
management
on-line
100.00% Control
SZCG Big
Kitchen
Shenzhen Shenzhen
Sales and
processing of
grain oil and
products
70.00% Control
SZCG Real
Estate
Development
Shenzhen Shenzhen
Real estate
development
and property
management
100.00% Control
SZCG Property Shenzhen Shenzhen
Property
management
100.00% Control
SZCG Storage
(Yingkou) )
Yingkou Yingkou Storage 100.00% Control
Dongguan
Logistics
Dongguan Dongguan
Storage
logistics
51.00% Control
Dongguan
Food Industrial
Park
Dongguan Dongguan
Port operation
food
production
51.00% Control
Dongguan
Food Trade
Dongguan Dongguan
Food
production
51.00% Control
Dongguan
Golden
Dongguan Dongguan
Feed
biofertilizer
51.00% Control
Shuangyashan
SZCG
Zhongxin
Shuangyashan Shuangyashan
Construction of
food base and
development of
related
complementary
facility
51.00% Control
Hongxinglong
Nongken
Industrial Park
Shuangyashan Shuangyashan
Construction of
food base and
development of
related
complementary
facility
51.00% Control
Explanation on share-holding ratio in subsidiary different from ratio of voting right:
Basis for controlling the invested entity with half or below voting rights held and without controlling invested entity but with over
half and over voting rights:
Major structured entity included in consolidate statement:
Basis of termination of agent or consignor:
Other explanation
(2) Important non-wholly-owned subsidiary
RMB/CNY
Subsidiary
Share-holding ratio of
minority
Gains/losses
attributable to minority
in the Period
Dividend announced to
distribute for minority
in the Period
Ending equity of
minority
Dongguan Logistics 49.00% 14683652.64 130536444.85
Explanation on holding ratio different from the voting right ratio for minority shareholders:
Other explanation
(3) Main finance of the important non-wholly-owned subsidiary
RMB/CNY
Subsid
iary
Ending balance Opening balance
Curren
t assets
Non-
current
assets
Total
assets
Curren
t
liabilit
y
Non-
current
liabilit
y
Total
liabilit
y
Curren
t assets
Non-
current
assets
Total
assets
Curren
t
liabilit
y
Non-
current
liabilit
y
Total
liabilit
y
Dongg
uan
Logisti
cs
63493
8480.
46
92090
8724.
11
1555
84720
4.57
67902
5611.
19
61042
0685.
53
1289
44629
6.72
53666
1737.
83
79138
3307.
99
1328
04504
5.82
85548
5584.
89
28612
5191.
12
1141
61077
6.01
RMB/CNY
Subsidiary
Current Period Last Period
Operating
income
Net profit
Total
comprehen
sive
income
Cash flow
from
operation
activity
Operating
income
Net profit
Total
comprehen
sive
income
Cash flow
from
operation
activity
Dongguan
Logistics
2067066
711.86
29966638
.04
29966638
.04
22582960
0.00
2102238
819.75
11063614
.89
11063614
.89
-
28799690
0.00
Other explanation
(4) Significant restrictions on the use of enterprise group assets and pay off debts of the enterprise group
(5) Financial or other supporting offers to the structured entity included in consolidated financial statement
range
Other explanation
2. Transaction that has owners equity shares changed in subsidiary but still with controlling rights
(1) Owners equity shares changed in subsidiary
(2) Impact on minority’s interest and owners’ equity attributable to parent company
RMB/CNY
Other explanation
. Equity in joint venture and associated enterprise
(1) Important joint venture or associated enterprise
Joint venture or
Associated
enterprise
Main operation
place
Registered
place
Business nature
Share-holding ratio Accounting
treatment on
investment for
joint venture
and associated
enterprise
Directly Indirectly
Zhuhai
Hengxing Feed
Industrial Co.Ltd.Zhuhai Zhuhai
Aquatic fee and
animal fee
40.00% Equity
Shenzhen
Duoxi Equity
Investment
Fund
Management
Co. Ltd.
Shenzhen Shenzhen
Trusted equity
investment
fund
35.00% Equity
Shenzhen
Shenyuan Data
Tech. Co. Ltd
Shenzhen Shenzhen
Design for
information
system
software
development
40.00% Equity
SZCG
Intelligent
Wulian Equity
Investment
Fund
(Shenzhen)
Partnership
Enterprise
(Limited)
Shenzhen Shenzhen
Equity
investment;
investment
consultant
49.02% Equity
Changzhou
Shenbao
Chacang E-
commence Co.Ltd.
Changzhou Changzhou Manufacturing 33.00% Equity
Huizhou
Shenbao
Manan
Huizhou Huizhou Manufacturing 51.00% Equity
Biotechnology
Co. Ltd
Shenzhen
Shichumingme
n Restaurant
Management
Co. Ltd.
Shenzhen Shenzhen Catering 51.00% Equity
Guangzhou
Shenbao
Mendao Tea
Co. Ltd
Guangzhou Guangzhou Retail 45.00% Equity
Holding shares ratio different from the voting right ratio:
Has major influence with less 20% voting rights hold or has minor influence with over 20% (20% included) voting rights hold:
(2) Main financial information of the important joint venture
RMB/CNY
Ending balance/Current Period Opening balance/Last Period
Other explanation
(3) Main financial information of the important associated enterprise
RMB/CNY
Ending balance/Current Period Opening balance/Last Period
Book value of equity investment in joint
ventures
70999666.81 35755171.55
Net profit -5048075.35 -3327706.12
Total comprehensive income -5048075.35 -3327706.12
Other explanation
(4) Financial summary for non-important Joint venture and associated enterprise
RMB/CNY
Ending balance/Current Period Opening balance/Last Period
Joint venture -- --
Amount based on share-holding ratio -- --
Associated enterprise -- --
Amount based on share-holding ratio -- --
Other explanation
(5) Major limitation on capital transfer ability to the Company from joint venture or associated enterprise
(6) Excess loss occurred in joint venture or associated enterprise
RMB/CNY
Joint venture/Associated
enterprise
Cumulative un-recognized
losses
Un-recognized losses not
recognized in the Period (or
net profit enjoyed in the
Period)
Cumulative un-recognized
losses at period-end
Changzhou Shenbao Chacang
E-commence Co. Ltd.
8115908.90 252041.17 8367950.07
Shenzhen Shichumingmen
Restaurant Management Co.Ltd.
2939544.23 551607.08 3491151.31
Other explanation
(7) Unconfirmed commitment with joint venture investment concerned
No commitment that need to disclosed
(8) Intangible liability with joint venture or affiliates investment concerned
No contingency that need to disclosed
4. Major conduct joint operation
Name
Main place of
operation
Registration place Business nature
Shareholding ratio/ shares enjoyed
Directly In-directly
Share-holding ratio or shares enjoyed different from voting right ratio:
If the co-runs entity is the separate entity basis of the co-runs classification
Other explanation
5. Structured body excluding in consolidate financial statement
Explanation:
. Other
X. Disclosure of risks relating to financial instruments
Our business operation makes the Company exposed to various financial risks: credit risk liquidity risk and market
risk (mainly refers to exchange risk and interest risk). The general risk management policy of the Company is to
minimize potential negative effects on our financial performance in view of the unforeseeable financial market.(i) Credit risk
Credit risk refers to the risk of financial loss caused by the failure of the counterparty to perform its contractual
obligations. The credit risk mainly arises from monetary capital trade receivables and other receivables. The
management has established adequate credit policies and continues to monitor exposure of these credit risks.The monetary funds held by the Company are mainly deposited in state-controlled banks and other large and
medium-sized commercial banks and other financial institutions. The management believes that these commercial
banks have high reputation and asset status and have no major credit risk and won't create any major losses caused
by the breach of contract of the opposite side.
For trade receivables and other receivables the Company establishes relevant policies to control exposure of credit
risk. The Company appraises customers’ credit quality based on their financial position possibility to obtain
guarantee from third parties credit history and other factors such as prevailing market conditions and set
corresponding credit terms. Customers’ credit history would be regularly monitored by the Company. For those
customers who have bad credit history the Company will call collection in written form shorten credit term or
cancel credit term to ensure its overall credit risk is under control.Up to 31st December 2018 the top five client’s account receivable takes 34.20% in total account receivable of the
Company
The maximum credit risk exposure equals to the carrying value of each financial asset in balance sheet (including
derivative financial instrument). The Company has not provided any guarantee which would otherwise make the
Company exposed to credit risk except for the guarantee for financial carried in Note XI.
(ii) Liquidity risk
Liquidity risk represents the possibility that the Company is not able to acquire sufficient fund to satisfy business
requirement settle debt when it is due and perform other obligation of payment.The finance department continues to monitor capital requirement for short and long term to ensure adequate cash
reserve. In addition it continues to monitor whether borrowing agreement is complied with and seeks for
commitment from major financial institutions for provision of sufficient back-up fund so as to satisfy capital
requirement in a short and long term.(iii) Market risk
Exchange risk
The major operation of the Company is located in the PRC and its major operation is settled in Renminbi. However
there is also exchange risk in respect of the recognized foreign currency assets and liabilities and future foreign
currency transactions which are mainly denominated in US dollar. Our finance department is responsible for
monitoring scale of foreign currency assets and liabilities and foreign currency transactions to minimize its
exposure to exchange risks. In reporting period the Company did not sign any forward exchange contract or
monetary exchange contract.Interest risk
Our interest risk mainly arises from bank borrowings. Financial liabilities at floating rate expose the Company to
cash flow interest risk and financial liabilities at fixed rate expose the Company to fair value interest risk. The
Company determines the respective proportion of contracts at fixed rate and floating rate based on prevailing market
conditions.The financial department of the Company continuously monitors the interest rate of the Company. The rise in
interest rates will increase the cost of new interest-bearing debts and the interest expense of the Company’s unpaid
interest-bearing debts with floating interest rates management will make timely adjustments based on the latest
market conditions.Price risk
The Company purchases and sells products at market prices therefore it is affected by fluctuation of these prices.XI. Disclosure of fair value
1. Ending fair value of the assets and liabilities measured by fair value
RMB/CNY
Item
Ending fair value
First-order Second-order Third-order Total
I. Sustaining measured
by fair value
-- -- -- --
(I)Financial assets
measured by fair value
and with variation
reckoned into current
gains/losses
1124927.96 1124927.96
(2) Equity investment 1124927.96 1124927.96
II. Non-persistent -- -- -- --
measure
2. Recognized basis for the market price sustaining and non-persistent measured by fair value on first-order
3. Valuation technique and qualitative and quantitative information on major parameters for the fair value
measure sustaining and non-persistent on second-order
4. Valuation technique and qualitative and quantitative information on major parameters for the fair value
measure sustaining and non-persistent on third-order
5. Adjustment information and sensitivity analysis of unobservable parameters for the fair value measure
sustaining and non-persistent on third-order
6. Sustaining items measured by fair value as for the conversion between at all levels reasons for conversion
and policy for conversion time point
7. Changes of valuation technique in the Period
8. Financial assets and liability not measured by fair value
9. Other
XII. Related party and related transactions
1. Parent company
Parent company Registration place Business nature Registered capital
Ratio of
shareholding on the
Company
Ratio of voting right
on the Company
Shenzhen Fude
State-owned
Capital Operation
Co. Ltd.深圳市
Investing in
industry
development
operation and
management of
the own property
500 million 63.79% 63.79%
Explanation on parent company of the enterprise
Ultimate controller of the Company is Shenzhen Municipal People’s Government State-Owned Assets
Supervision and Administration Commission
Approved by the resolution of the 15th meeting of the Ninth Board of Directors of the Company on March 23 2018 the resolution of
the 17th meeting of the Ninth Board of Directors on June 8 2018 the resolution of the first extraordinary shareholders meeting of the
company in 2018 on June 27 2018 and the resolution of the 22nd meeting of the Ninth Board of Directors on September 6 2018 and
approved by the Reply to the Approval for Shenzhen Shenbao Industrial Co. Ltd. to Issue Shares to Shenzhen Fude State-owned
Capital Operation Co. Ltd. to Purchase Assets CJXK [2018] No. 1610 issued by China Securities Regulatory Commission on October
10 2018 the Company issued 655752951 shares of restricted common stock to Fude Capital and Fude Capital subscribed the issued
shares by its 100% stake in SZCG the newly issued shares had a par value of RMB 1 per share and the issue price per share was RMB
8.96 after the issuance the share capital of the Company was changed to RMB 1152535254.00. The change of share capital was
verified by Jonten Certified Public Accountants (limited liability partnership) who issued the capital verification report Jonten [2018]
YZ No. 90066 on October 22 2018.Other explanation
2. Subsidiary
Subsidiary of the Company found more in Note VIII-(I) equity in subsidiary
3. Joint venture and associated enterprise
Joint Venture of the Company found more in Note VIII-(II) equity in joint Venture
Other cooperative enterprise and joint venture that have related transaction with the Company in the Period or occurred in previous
period
Joint venture/Associated enterprise Relationship
Other explanation
4. Other related party
Other related party Relationship with the Enterprise
Shenzhen Agricultural Products Co. Ltd
Shareholder of the Company Controlled by the ultimate
controlling party
Zhanjiang Haitian Aquatic Feed Co. Ltd Controlled by the ultimate controlling party
Dongguan Fruit and Vegetable Non-staple Food Market Co.
Ltd
Minority shareholder of controlling subsidiary
Taizhong Agricultural Co. Ltd Controlled by the ultimate controlling party
Shenzhen Investment Management Co. Ltd
Former shareholder of the Company Controlled by the
ultimate controlling party
Shenzhen Investment Holding Co. Ltd
Former shareholder of the Company Controlled by the
ultimate controlling party
Fujian Wuyishan Yuxing Tea Co. Ltd*1 Minority shareholder of former controlling subsidiary
Shenzhen Fruits and Vegetables Trading Co. Ltd
Wholly-owned subsidiary of Shenzhen Agricultural Products
Co. Ltd
Shenzhen Higreen International Agricultural Products
Logistric Management Co. Ltd
Controlling subsidiary of Shenzhen Agricultural Products Co.
Ltd
Zhanjiang Changshan (Shenzhen) Ecological Aquaculture Co.Ltd
Has the same parent company
Shenzhen Yixin Investment Co. Ltd Controlled by the ultimate controlling party
Other explanation
Fujian Wuyishan Yuxing Tea Co. Ltd. was a minority shareholder of Fujian Wuyishan Shenbao Yuxing Tea Co. Ltd. a former
controlling subsidiary of Hangzhou Ju Fang Yong which is a subsidiary of the Company and the controlling subsidiary was
separated in 2016.
5. Related transaction
(1) Goods purchasing labor service providing and receiving
Goods purchasing/labor service receiving
RMB/CNY
Related party
Related
transaction
content
Current Period
Approved
transaction limit
Whether more than
the transaction limit
Last period
Shichumingmen
Company
Purchase of tea
products
927.50
Goods sold/labor service providing
RMB/CNY
Related party Related transaction content Current Period Last Period
Shenzhen Agricultural
Products Co. Ltd
Sales of tea 48028.38
Shichumingmen Company
Income from activity
service
39105.00
Shichumingmen Company Sales of tea products 246.15 11222.23
Shenzhen Fruits and
Vegetables Trading Co. Ltd
Sales of tea 2794.87
Shenzhen Higreen
International Agricultural
Products Logistric
Management Co. Ltd
Sales of tea 13974.36
Explanation on goods purchasing labor service providing and receiving
(2) Related trusteeship management/contract & entrust management/ outsourcing
Trusteeship management/contract:
RMB/CNY
Client/Contract
-out party
Commissioned
party/Contracto
r
Type of assets Starting date Maturity date
Pricing
principle for
earnings
Earnings
recognized in
the period
Explanation on related trusteeship management/contract
Entrust management/outsourcing
RMB/CNY
Client/Contract
-out party
Commissioned
party/Contracto
r
Type of assets Starting date Maturity date
Pricing
principle for
earnings
Earnings
recognized in
the period
Explanation on related entrust management/outsourcing
(3) Related lease
As a lessor for the Company:
RMB/CNY
Lessee Assets type
Lease income in recognized
in the Period
Lease income in recognized
last the Period
Shichumingmen Company Management site 1006451.61 819000.00
As lessee:
RMB/CNY
Lesser Assets type
Lease income in recognized
in the Period
Lease income in recognized
last the Period
Shenzhen Investment
Holding Co. Ltd
Management site 2311760.06 1880242.71
Shenzhen Fude State-owned
Capital Operation Co. Ltd.
Warehouse leasing 28434200.00 7108550.00
Shenzhen Fude State-owned
Capital Operation Co. Ltd.
Venue of working 345210.00 0.00
Explanation on related lease
Shenzhen Shenbao Tea Culture Business Management Co. Ltd. a subsidiary of the company subleased 5 A-Block 02-Floor and 02-
Room shops in the Software Industry Base of Keyuan Road Nanshan District Shenzhen City which it rented to Shenzhen
Investment Holding Co. Ltd. to the company's joint venture Eating-out Company. This year's rental income is 1006451.61 yuan
and the pricing of related transactions. Based on the market price.①Shenzhen Investment Holding Co. Ltd. rented out some of its shops locate at the first and second floors Tower A Building 5
Software Industry Base Keyuan Road Nanshan District Shenzhen to the Company’s second-tier subsidiary Shenzhen Shenbao Tea
Culture Business Management Co. Ltd. the annual rental fee of 2018 was 2311760.06 yuan and the pricing of related transactions
was based on the market price.
② For details of the warehouse leases between the Company and Fude Capital please refer to Note XIV (i).
③ Fude Capital rented out Room 3001-3065 of third floor and 5008-5009 of fifth floor of the main building and three storeys of
darkrooms of Grain Building located at Nanfang No. 656 Hubei Road Luohu District Shenzhen and Room 2303 located at Building
C World Trade Plaza No. 9 Fuhong Road Futian Street to the Company’s second-tier subsidiaries SZCG Real Estate and SZCG
Property as office use the lease period is from August 1 2018 to July 31 2019 the rents are 56394.00 yuan/month and 12648.00
yuan/month respectively.(4) Related guarantee
As guarantor
RMB/CNY
Secured party Guarantee amount Guarantee start date Guarantee expiry date
Whether the guarantee
has been fulfilled
Shenbao Huacheng 30000000.00 2018-07-26
Two years after the
expiration of the term
of performance of each
specific credited
obligation under the
main contract
N
As secured party
RMB/CNY
Guarantor Guarantee amount Guarantee start date Guarantee expiry date
Whether the guarantee
has been fulfilled
Dongguan Fruit and
Vegetable Non-staple
Food Market Co. Ltd
14700000.00 2017-06-08
No later than 2019-4-
11
N
Dongguan Fruit and
Vegetable Non-staple
Food Market Co. Ltd
53571310.66 2016-12-27 2021-12-27 N
Dongguan Fruit and
Vegetable Non-staple
Food Market Co. Ltd
138955864.84 2018-7-27 2032-08-29 N
Related guarantee note
According to the “Comprehensive Credit Line Contract” numbered as PY (SZ) ZZ No. A237201707130001 signed
by Shenbao Huacheng a subsidiary of the Company with Ping An Bank Shenzhen Branch on July 27 2017 Ping
An Bank Shenzhen Branch provided a comprehensive credit line of RMB 30 million to the subsidiary of the
Company Shenbao Huacheng the time limit of the comprehensive credit limit was within 12 months from the
effective date of the contract. In order to ensure that all claims under this comprehensive credit limit can be repaid
the Company has provided a maximum guarantee with guarantee amount of RMB 30000000.00. Except for the
guarantee amount other interests interest and interest penalty and other claims charges are also guaranteed and
the guarantee period is from July 26 2018 to the end of the two-year period from the expiration date for debt
performance of each specific credit line under the master contract.
Dongguan Logistics a subsidiary of the Company signed a liquidity loan contract “Yue DG 2017NJZ No.5” with
Bank of Communications Co. Ltd. Dongguan Branch. According to the contract the Bank of Communications
Dongguan Branch provided a circulating loan amount of RMB 30 million to Dongguan Logistics and the borrowing
rate is 5.22% the length of maturity for each loan under the contract is no longer than 12 months and the maturity
date of all loans is no later than April 11 2019. Shenzhen Cereals Group and Dongguan Fruit Vegetable Non-staple
Food Market Co. Ltd. provide the guarantee with maximum amount for the loan the maximum amount of claims
guaranteed by the guarantors was respectively RMB 15.30 million and RMB 14.70 million. The guarantee period
shall be calculated according to the maturity period of each principal obligation stipulated in the principal contract
(under the bank acceptance draft/letter of credit/letter of guarantee according to the date of advance payment by
creditors). The guarantee period under each principal obligation shall be two years after the expiration date of the
performance period of the obligation (or the date of advance payment by the creditor) and the expiration date (or
the date of advance payment by the creditor) of the final maturity of the principal obligation under all the principal
contracts.
3. According to the bank credit contract of credit No. CN11002181808-160714-SCDGTML2 signed by Dongguan
Logistics a subsidiary of the Company and HSBC HSBC will provide a loan credit of not exceeding 200 million
yuan to Dongguan Logistics the applicable interest rate for each loan at each interest period is 90% of the central
bank loan benchmark interest rate applicable on the fixed interest date of the interest period the borrowing date is
from December 27 2016 to December 27 2021. As of December 31 2018 the balance of the loan principal
achieved by Dongguan Logistics from HSBC was 109329205.42 yuan and the Company’s subsidiaries SZCG
and Dongguan Fruit Vegetable Non-staple Food Trading Market Co. Ltd. provided joint liability guarantee for the
loans the amount guaranteed by Dongguan Fruit Vegetable Non-staple Food Trading Market Co. Ltd. was
53571310.66 yuan and the amount guaranteed by SZCG was 55757894.76 yuan.
4. According to the loan contract “Yue DG 2017 NGDZ No. 006” signed by Dongguan Food Industry Park a
subsidiary of the Company and Bank of Communications Dongguan Branch the current loan principal is
respectively RMB 49.80 million RMB 3783400 RMB 30 million and RMB 200 million the loan period is from
September 27 2018to August 29 2032. The loan interest rate of RMB 200 million is calculated by the benchmark
interest rate for loan of the People’s Bank of China on the loan entry date which is 4.90%; the other three are
calculated by the benchmark interest rate of the People’s Bank of China on the loan entry date after rising by 15%
which is 5.635%. The Company’s subsidiaries SZCG and Dongguan Fruit Vegetable Non-staple Food Trading
Market Co. Ltd. provide joint liability guarantee for the loans the amount guaranteed by Dongguan Fruit Vegetable
Non-staple Food Trading Market Co. Ltd. is 138955864.84 yuan and the amount guaranteed by SZCG is
144627532.80 yuan.
（1）Guarantees between subsidiaries of the Company
RMB
Guarantor
Name of
the
Company
guarantee
d
Guarantee
amount
Guarantee start
date
Guarantee expiry date
Whether the
guarantee
has been
fulfilled
Note
Shenzhen
Cereals
Dongguan
SZCG
15300000.00 2017-6-8
No later than
2019-4-11
N Note 1
Guarantor
Name of
the
Company
guarantee
d
Guarantee
amount
Guarantee start
date
Guarantee expiry date
Whether the
guarantee
has been
fulfilled
Note
Group
Co. Ltd
Logistics
Co. Ltd.
Shenzhen
Cereals
Group
Co. Ltd
Dongguan
SZCG
Logistics
Co. Ltd.
30000000.00 2018-6-8 2019-6-7 N Note 2
Shenzhen
Cereals
Group
Co. Ltd
Dongguan
SZCG
Logistics
Co. Ltd.
55757894.76 2016-12-27 2021-12-26 N Note 3
Shenzhen
Cereals
Group
Co. Ltd
Dongguan
SZCG
Logistics
Co. Ltd.
178865982.39 2015-7-31 2023-7-12 N Note 4
Shenzhen
Cereals
Group
Co. Ltd
Dongguan
Internatio
nal Food
Industrial
Park
Developm
ent Co.Ltd.
144627532.80 2018-7-27 2032-8-29 N Note 5
Total 424551409.95
Note 1: Details are given in Notes 11 (5) and 5 (2) of the audit report.Note 2: According to the letter number
CN11002181808/160714 signed by Shenzhen Cereals Group Co. Ltd Shenzhen Flour Co. Ltd Dongguan SZCG
Logistics Co. Ltd Shenzhen Hualian Grain & Oil Trade Co. ltd. SZCG Doximi Business Co. Ltd. SZCG Big
Kitchen Food Supply Chain Co. Ltd and HSBC Bank as well as the letter granting review and amendment contract
CN11002181808-170727 Dongguan SZCG Logistics Co. Ltd has obtained a loan balance of 30million yuan from
HSBC Bank. It is guaranteed by Shenzhen Cereals Group Co. Ltd a subsidiary of our company.
Note 3: Detailed explanations can be found in Notes 11 (5) and 5 (2) of the audit report.Note 4: According to the contract No. 440300-2015 (Shenzhen) 0023 signed by Dongguan SZCG Logistics Co.Ltd a subsidiary of the company and the Agricultural Development Bank of China the total amount of loans under
the contract is 273 million yuan with an annual interest rate of 5.4%. When the benchmark interest rate of loans of
the People's Bank of China is adjusted the loan date is adjusted annually from July 13 2015 to July 12 2023. The
loan is guaranteed by Shenzhen Cereals Group Co. Ltd a subsidiary of the company. The guarantee period shall be
two years from the date of the expiration of the debt performance period agreed upon in the main contract.Note 5: Detailed explanations can be found in Notes 11 (5) and 5 (2) of the audit report note 3.
(5) Related party’s borrowed funds
RMB/CNY
Related party Borrowing amount Starting date Maturity date Note
Borrowing
Lending
(6) Related party’s assets transfer and debt reorganization
RMB/CNY
Related party Related transaction content Current Period Last Period
(7) Remuneration of key manager
RMB/CNY
Item Current Period Last Period
(8) Other related transaction
1.Related party’s borrowed funds
(1) Lending funds to related party
As a shareholder of Shi Chu Ming Men Company the Company and the other shareholder of Shi Chu Ming Men
Company Shenzhen Gongfu Baiwei Investment Co. Ltd. jointly borrowed capital of RMB 2316274.51 from Shi
Chu Ming Men Company in accordance with their respective shareholding ratios. The Company has deducted the
principal amount of RMB 1180000.00. As of December 31 2018 the principal balance of the Company was RMB
1180000.00 and the accumulated interest on the loan was RMB 138373.80.
2.Other related transaction
(1) Equity transfer
According to the resolutions of the fifteenth meeting of the ninth session of the board of directors the seventeenth
meeting of the ninth board of directors the twenty-second meeting of the ninth board of directors of the Company
and the resolution of the first extraordinary general meeting of 2018 the Company purchased 100% equity of SZCG
held by Fude Capital by issuing shares to it (the number of shares issued was 655752951 shares and the issue price
was RMB 8.96 per share). Prior to this transaction Fude Capital was the controlling shareholder of the Company
and SZCG and the actual controller of the Company and SZCG was the State-owned Assets Supervision and
Administration Commission of Shenzhen Municipal People’s Government. Therefore this transaction constituted
a related transactions.
(2) Other
Type Related party Current Period Last Period Note
Diverstiture profits Fude Capital 11912956.78 6014906.08
Total 11912956.78 6014906.08
According to the major asset restructuring agreement on the Company’s issuance of shares to purchase 100% equity of SZCG the
“General Agreement on Major Asset Restructuring of Shenzhen Cereals Group Co. Ltd.” and the “Agreement on Free Transfer of Real
Estate Assets and Equity of Shenzhen Cereals Group Co. Ltd.” signed by SZCG and Fude Capital on June 6 2018 SZCG would
transfer part of the assets with flaws in property rights to Fude Capital free of charge the profits and losses of these assets (from October
1 2017 to Stripping Day) were17927862.86yuan the Company was required to pay the equity of this part to Fude Capital according
to the agreement.
6. Receivable and payable of related party
(1) receivable item
RMB/CNY
Projects Related party
Ending balance Opening balance
Book balance Bad debt provision Book balance Bad debt provision
Other account
receivable
Shenzhen Yixin
Investment Co.Ltd
10431232.87 5215616.44 10431232.87
Other account
receivable
Changzhou
Shenbao Chacang
Co.
20413947.34 17819381.02 19977283.01 9071148.72
Other account
receivable
Shichumingmen
Company
1429898.28 275978.87 1870811.75 53585.30
Other account
receivable
Shenzhen
Agricultural
Products Co. Ltd
1060.00 159.00
Other account
receivable
Shenzhen
Investment
Holding Co. Ltd
433469.10 319129.94 31743.34
(2) payable item
RMB/CNY
Projects Related party Ending book balance Opening book balance
Dividend payable
Shenzhen Investment
Management Co. Ltd
2690970.14 2690970.14
Other account payable
Huizhou Shenbao Manan
Biotechnology Co. Ltd
1131864.44
Other account payable
Shenzhen Fruits and
Vegetables Trading Co. Ltd
245714.59
Other account payable
Shenzhen Fude State-owned
Capital Operation Co. Ltd.
53470612.86 13123456.08
Other account payable
Shenzhen Duoxi Equity
Investment Fund
Management Co. Ltd.
41486.00
Other account payable
Zhanjiang Changshan
(Shenzhen) Ecological
Aquaculture Co. Ltd
7967662.50 7946370.83
Other account payable Shichumingmen Company 184275.00
Other account payable
Shenzhen Nongdimei
Investment Management Co.Ltd
1478800.00
Other account payable
Shenzhen Investment
Management Co. Ltd
3510297.20 3510297.20
7. Related party commitment
8. Other
As the shareholder of Changzhou Shenbao Chacang Company with 33 percent shares held the advance money for
Changzhou Shenbao Chacang Company in previous years ended as 31st December 2018 balance of other account
receivable amounted as 20413947.34 yuan bad debt provision accrual independently amounted as 17819381.02
yuan book value of other account receivable amounted as 2594566.32 yuan.XIII. Share-based payment
1. Overall situation of share-based payment
□Applicable √Not applicable
2. Share-based payment settled by equity
□Applicable √Not applicable
3. Share-based payment settled by cash
□Applicable √Not applicable
. Modification and termination of share-based payment
5. Other
XIV. Commitment or contingency
1. Important commitments
(i) Important commitments
The Company has no important commitments that need to disclosed up to 31st December 2018
2. Contingency
(1) Contingency on balance sheet date
(ii) Contingency on balance sheet date
Contingencies arising from pending litigation or arbitration and its financial impact
(1) Disputes over the loan contracts between Changzhou Shenbao Chacang E-commence Co. Ltd. the Company
and Shenzhen Agricultural Products Financing Guarantee Co. Ltd.On July 15 2016 Shenzhen Agricultural Products Financing Guarantee Co. Ltd. (“Agricultural Products Guarantee
Company” for short) submitted a “Civil Appeal” to the People’s Court of Futian District Shenzhen requesting
Changzhou Shenbao Chacang Company to repay the loan principal amount of RMB 5000000.00 the interest of
RMB 389968.52 and the interest penalty of RMB 3200271.79 (the interest penalty was temporarily calculated to
June 30 2016 which shall be actually calculated to the date of the full repayment of the borrowing); and pay the
compensation of RMB 100000.00 (5 million Yuan × 2%); two items in total were RMB 8690240.31; the Company
undertook joint liability for the loan of RMB 5000000.00.\On May 31 2017 Shenzhen Futian District Court made the first-instance judgment and ruled Changzhou Shenbao
Chacang Company to repay the loan principal of RMB 5 million and the interest and interest penalty the Company
did not need to undertake joint liability for the loan of RMB 5 million of Changzhou Shenbao Chacang Company.On July 4 2017 the Agricultural Products Guarantee Company filed an appeal on October 13 2017 and Shenzhen
Intermediate People’s Court held the second instance hearing. As of the date of approval of the financial statements
the case has been in the process of hearing and the Shenzhen Intermediate People's Court has not yet made a final
judgment in this case.
(2) Contract disputes between the Company’s subsidiaries Wuyishan Shenbao Rock Tea Co. Ltd. (hereinafter
referred to as Wuyishan Rock Tea Company) and Hangzhou Jufangyong Holdings Co. Ltd. (hereinafter referred to
as Jufangyong Company) and Wuyishan Jiuxing Tea Co. Ltd. (hereinafter referred to as Jiuxing Company) Fujian
Wuyishan Yuxing Tea Co. Ltd. (hereinafter referred to as Yuxing Company) Xingjiu Tea Co. Ltd. Chen Yuxing
Chen Guopeng
On September 22 2017 Jufangyong Company Xingjiu Tea Co. Ltd. Yuxing Company Chen Yuxing and Chen
Guopeng signed an “Formal Agreement on the Separation of Fujian Wuyishan Shenbao Yuxing Tea Co. Ltd.”
according to the separation agreement: the original Shenbao Yuxing Company was separated after the separation
Jufangyong Company held 100% equity of the newly established company (i.e. Shenbao Rock Tea Company) and
Yuxing Company and Xingjiu Tea Company jointly held 100% equity of the surviving company (Jiuxing Company);
Shenbao Rock Tea Company got receivables of RMB 7273774.01 which was guaranteed by Jiuxing
Company to achieve RMB 2 million within one year after separation and the remaining amount would be returned
within 2 years. Chen Yuxing and Chen Guopeng as the actual controllers of Jiuxing Company Yuxing Company
and Xingjiu Tea Company assumed joint responsibility for the joint guarantee to Shenbao Rock Tea Company and
Jufangyong Company for all the obligations and responsibilities stipulated in the “Separation Agreement”.
As of September 22 2018 the time limit stipulated in the “Separation Agreement” for the realization of four
receivables had expired and Shenbao Rock Tea Company still had 5212301.40 yuan unrecovered. On December
6 2018 Shenbao Rock Tea Company and Hangzhou Jufangyong Company applied for arbitration to Shenzhen
Court of International Arbitration (Shenzhen Arbitration Commission) for the above matters and requested Jiuxing
Company to pay RMB 5272934.01 to Shenbao Rock Tea Company and requested Yuxing Company Xingjiu Tea
Company Chen Yuxing and Chen Guopeng to assume joint liability. As of the date of approval of the financial
statement Shenzhen Arbitration Commission has not yet determined the arbitrator and the date of the trial. As of
December 31 2018 the Company accumulatively accrued 3458370.94 yuan of bad debts provision.
(3) Disputes on mung bean business between Shenzhen Cereals Group and Jilin Tongyu County Shengda Company
In August 2007 Shenzhen Cereals Group and Tongyu County Shengda Grain and Oil Trading Co. Ltd. (hereinafter
referred to as Shengda Company) signed the “Mung Bean Entrusted Acquisition Processing and Storage Contract”
from October 2007 to May 2008 totally 4918.00 tons of mung beans were acquired the Company paid payment
for goods of 30 million yuan. According to the contract after the completion of the entrusted acquisition Shengda
Company has the obligations to assist in the sale of goods and buy-back. Shengda Company did not fully fulfill its
obligations and Shenzhen Cereals Group also carried out various forms of collection. In September 2010 Shenzhen
Cereals Group sued Shengda Company for repayment of its arrears and interest. The two parties reached anaccommodation during the court trial and Futian District People’s Court of Shenzhen issued a “Paper of CivilMediation” but Shengda Company did not fully fulfill the repayment obligation Shenzhen Cereals Group has
applied to the court for enforcement. As of December 31 2018 the book receivables amounted to RMB
5602468.81 and the execution of remaining funds has large uncertainties. The Company has fully made provision
for bad debts of RMB 5602468.81.
(4) Contract disputes between Flour Company and Shenzhen Fujin Food Industry Co. Ltd.
On May 31 2013 Shenzhen Fujin Food Industry Co. Ltd. (hereinafter referred to as Fujin Company) signed a
“Purchases and Sales Contract” with Flour Company agreed that Flour Company would supply the moon cake
tailored flour and the tailored wheatmeal for cakes and pastries to Fujin Company. Later Fujin Company sued Flour
Company it said that the lipase (a processing aid) in the flour supplied by Flour Company to Fujin Company was
active causing the “acid value” of the moon cakes and fillings made from it exceed the food safety standards which
caused huge losses to Fujin Company so it advocated that Flour Company should bear the corresponding liability
for compensation and compensate for the property loss of Fujin Company of 9784485.55 yuan; the litigation costs
should be borne by Flour Company.On November 29 2014 the Nanshan District People’s Court of Shenzhen made the first-instance judgment ([2014]
SNFMYCZ No.45) and considered that Fujin Company failed to prove that its so-called problem product with too
high “acid value” was caused by the lipase activity of the flour supplied by Flour Company it has not been proven
that the raw materials of the problem food were supplied by Flour Company; secondly the relevant standards of the
Ministry of Health allow the addition of active lipase to the flour raw material therefore the court ruled that all
claims of Shenzhen Fujin Food Industry Co. Ltd. were rejected.On June 5 2015 the Shenzhen Intermediate People’s Court made a ruling ([2015] SZFMZZ No. 563) considering
that the court of first instance could not find out what standards should be applied to the quality of the flour products
involved in the case nor could it found that the obligation to remove processing aids in flour should be attributed
to the flour supplier or the food producer. Therefore the civil judgment [2014] SNFMYCZ No.45 was revoked and
sent back to the Nanshan District People’s Court for retrial.
As of December 31 2018 the case was still in the first instance stage of retrial and the court has not yet made a
retrial judgment.
(5) Contract disputes among Shenzhen Cereals Group Hualian Grain and Oil Guangzhou Jinhe Feed Co. Ltd. and
Huangxianning Import Agent
From October 2005 to January 2007 Shenzhen Cereals Group Hualian Grain and Oil and Guangzhou Jinhe Feed
Co. Ltd. (hereinafter referred to as Guangzhou Jinhe Company) signed 20 “Import Agent Contracts” agreed that
Shenzhen Cereals Group and Hualian Grain and Oil agent Guangzhou Jinhe Company to import Peruvian fishmeal.
In August 2007 Hualian Grain and Oil Guangzhou Jinhe Company and Huangxianning signed the “Guarantee
Contract” agreed that Huangxianning would guarantee that all payables of Guangzhou Jinhe Company under the
trade contracts signed by Hualian Grain and Oil and Guangzhou Jinhe Company would be paid on time. Later due
to Guangzhou Jinhe Company’s insufficient payment of goods and import agency fees Shenzhen Cereals Group
and Hualian Grain and Oil filed a lawsuit to Futian District People’s Court of Shenzhen.
On February 16 2015 the Futian District People’s Court of Shenzhen made the first-instance judgment ([2014]
SFFMECZ No. 786) and sentenced Guangzhou Jinhe Company to pay RMB 10237385.74 to Shenzhen Cereals
Group and Hualian Grain and Oil and bear the case acceptance fee of 83224.00 yuan; Huangxianning does not
need to bear the joint and several liability.
As Guangzhou Jinhe Company refused to accept the above first-instance judgment it lodged an appeal to the
Shenzhen Intermediate People’s Court claiming that the prosecution of Shenzhen Cereals Group and Hualian Grain
and Oil had exceeded the time limit for litigation. On March 30 2017 the Shenzhen Intermediate People’s Court
made the second-instance judgment (Civil Judgment [2015] SZFSZZ No.1767) and the judgment rejected
Guangzhou Jinhe Company’s appeal and upheld the original judgment.The case is still in enforcement and the other party has not paid any money Shenzhen Cereals Group has made
provision for bad debts in proportion to 100% of the accounts receivable of 10455600 yuan of Guangzhou Jinhe
Company.
According to the Letter of Commitment of Shenzhen Fude State-owned Capital Operation Co. Ltd.. concerning the
pending lawsuit of Shenzhen Cereals Group Co. Ltd. Shenzhen Fude State-owned Capital Operation Co. Ltd..will make any claim compensation loss or expenditure to Shenzhen Fude State-owned Capital Operation Co. Ltd.for the dispute between Shenzhen Cereals Group Co. Ltd. and its holding subsidiaries over the contract for
international sale of soybeans with Guangzhou Jinhe Co. Ltd. and Huangxianning Import Agent， Shenzhen FudeState-owned Capital Operation Co. Ltd will undertake the compensation or loss caused by the lawsuit on behalf of
Shenzhen Fude State-owned Capital Operation Co. Ltd.
(6) Contract disputes between Hualian Grain and Oil Company and Zhuhai Doumen Huabi Feed Factory
On December 9 2004 Hualian Grain and Oil Company signed a purchases and sales contract with Zhuhai Doumen
Huabi Feed Factory to sell 2000.00 tons of corn with payment for goods of 2396300 yuan but the payment has
not been taken back. In April 2005 Hualian Grain and Oil Company discovered that Zhuhai Doumen Huabi Feed
Factory had basically stopped production and the goods were transferred the legal representative Liang Dongxing
had fled. On July 2 2005 the public security organ arrested Liang Dongxing. Hualian Company has prosecuted
him and won in the lawsuit and the lawsuit has been settled and in enforcement.
As of December 31 2018 Hualian Grain and Oil Company had received RMB 2396300 from Zhuhai Doumen
Huabi Feed Factory Hualian Grain and Oil Company had made 100% of bad debt provision for this amount.
(7) Contract disputes between Hualian Grain and Oil Company and Foshan Huaxing Feed Factory
In August and October 2007 Hualian Grain and Oil Company sold goods to Foshan City Shunde District Huaxing
Feed Factory and received a total of 2958600 yuan of commercial acceptance bills. Due to the company’s overdue
payment Hualian Grain and Oil Company filed a lawsuit with the People’s Court of Shunde District Foshan City
on October 29 2007 requesting Foshan City Shunde District Huaxing Feed Factory to repay the payment for goods
and pay the corresponding interests. From June to July 2011 totally took back the company’s bankruptcy property
settlement of 1638900 yuan. As of December 31 2018 Hualian Grain and Oil Company had receivables of RMB
1319700 from Foshan City Shunde District Huaxing Feed Factory and it had made 100% of bad debt provision
for this amount.
(8) Contract disputes on the international sales transactions of soybeans between Shenzhen Cereals Group and Noble
Resources Pte. Ltd
1. Main facts of the case
On March 3 2004 Shenzhen Cereals Group and Noble Resources Pte. Ltd. (hereinafter referred to as Noble
Company) signed a contract stipulating that Shenzhen Cereals Group Co. Ltd. would purchase 55000 tons of
Argentine or Brazilian soybeans from Noble Company under CFR conditions. .
On May 10 2004 the General Administration of Quality Supervision Inspection and Quarantine (AQSIQ) issued
a notice that a shipload of Brazilian soybeans exported to Xiamen China by Noble Company in April 2004 was
found to be mixed with seed-coating soybeans thus Noble Company was suspended to export Brazilian soybeans
to China.
On June 25 2004 after the cargo ship arrived in Qingdao Port the cargo was inspected by Qingdao Commodity
Inspection and Quarantine Bureau who found the cargo contained seed-coating soybeans and the cargo was sealed
up according to law.On July 22 2004 the two parties signed a supplementary agreement on the above-mentioned soybean sales contract
stipulating that the demurrage incurred as the cargo could not be unloaded due to seed-coating soybeans shall be
borne by Noble Company and agreed that the disputes under the contract shall be governed by Chinese courts
according to Chinese law.
② Arbitration application of Noble Company
In July 2004 Noble Company submitted the case to the Hong Kong International Arbitration Center for arbitration
requesting Shenzhen Cereals Group Co. Ltd. to undertake cargo ship detainment Hong Kong demurrage loss
contingencies and so on totaling seven claims. Shenzhen Cereals Group Co. Ltd. filed a jurisdictional objection
the Hong Kong International Arbitration Center ruled on December 14 2006 that two claims have the right of
jurisdiction i.e. demurrage of Noble ship in Hong Kong and loss contingencies other claims were rejected.In July 2011 Noble Company applied to Shenzhen Intermediate People’s Court for enforcement of extraterritorial
effective ruling. On March 30 2015 Shenzhen Intermediate People’s Court made a civil ruling ([2011] SZFMSCZ
No. 270) ruling that as the soybean sales contract supplemental agreement signed by the two parties agreed that the
demurrage incurred as the cargo could not be unloaded due to seed-coating soybeans shall be borne by Noble
Company and agreed that the disputes under the contract shall be governed by Chinese courts according to Chinese
law Hong Kong International Arbitration Center has no jurisdiction over the case therefore the application for
enforcement of Noble Company was rejected.On September 3 2014 Noble Company submitted the “Application for Further Claims Arbitration” to the Hong
Kong International Arbitration Center requesting Shenzhen Cereals Group Co. Ltd. to pay Noble Company
US$7.45 million in compensation for the freighter’s lessor - Bunge Limited and the corresponding litigation and
arbitration fee.On November 1 2016 the arbitrator of Hong Kong International Arb itration Center wrote to Noble Company
requesting it to initiate the arbitration at the end of 2016 otherwise the arbitral tribunal will take measures to close
the case but so far Noble Company has not initiated arbitration.
③ Case progress
At present the arbitration of the “Request for Further Claims Arbitration” submitted by Noble Company to the
Hong Kong International Arbitration Center due to the above-mentioned soybean sales contract is suspended.
According to the Letter of Commitment of Shenzhen Fude State-owned Capital Operation Co. Ltd.. concerning the
pending lawsuit of Shenzhen Cereals Group Co. Ltd. Shenzhen Fude State-owned Capital Operation Co. Ltd..will make any claim compensation loss or expenditure to Shenzhen Fude State-owned Capital Operation Co. Ltd.for the dispute between Shenzhen Cereals Group Co. Ltd. and its holding subsidiaries over the contract for
international sale of soybeans with Noble Resources Pte. Ltd Shenzhen Fude State-owned Capital Operation Co.Ltd will undertake the compensation or loss caused by the lawsuit on behalf of Shenzhen Fude State-owned Capital
Operation Co. Ltd.
(9) Contract disputes between Shenzhen Cereals Group and Beijing Zhongwang Food Co. Ltd.
On August 22 2007 Beijing Zhongwang Food Co. Ltd. defaulted on the payment for goods of 1911200.00 yuan
to Shenzhen Cereals Group. Beijing Zhongwang Food Co. Ltd. was in bankruptcy proceedings Shenzhen Cereals
Group has reported claims and interests of 2473400 yuan to the bankruptcy administrator and the confirmed
ordinary creditor’s rights are 2128300 yuan. It is estimated that the bankruptcy property repayment amount is about
50000 yuan as the specific amount of losses still cannot be estimated Shenzhen Cereals Group has made provision
for bad debts of 1873886.58 yuan at a 100% ratio.
2. Contingency arising from the provision of external debt guarantee and their impacts on financial
The guarantee for related parties found more in the (v) of Note XI
Ended as 31st December 2018 the Company has no guarantees provided for non-related parties
3. Except for the above mentioned contingency up to 31st December 2018 the Company has no other major
contingency that should be disclosed
(2) If the Company has no important contingency need to disclosed explain reasons
3. Other
XV. Events after balance sheet date
1. Important non adjustment matters
RMB/CNY
Item Content
Impact on financial status and
operation results
Reasons of fails to estimate
the impact
2. Profit distribution
RMB/CNY
. Sales return
4. Other events after balance sheet date
XVI. Other important events
1. Previous accounting errors collection
(1)Retrospective restatement
RMB/CNY
Content Treatment procedure
Items impact during vary
comparative period
Accumulated impact
(2) Prospective application
Content Approval procedure Reasons
2. Debt restructuring
3. Assets exchange
(1) Exchange of non-monetary assets
(2)Other assets exchange
4. Pension plan
5. Discontinuing operation
RMB/CNY
Item Revenue Expenses Total profit
Income tax
expenses
Net profit
Profit of
discontinuing
operation
attributable to
owners of
parent
company
Other explanation
. Segment
(1) Recognition basis and accounting policy for reportable segment
(2) Financial information for reportable segment
RMB/CNY
Item Offset between segment Total
(3)The Company has no segment or unable to disclose total assets and liability of the segment explain
reasons
(4) Other explanation
7.Other major transaction and events makes influence on investor’s decision
8. Other
(1) Leasing matters of Pinghu Grain Depot
Pinghu Grain Depot was invested and established by the Shenzhen Municipal People’s Government the Shenzhen
Municipal People’s Government entrusted SZCG the Company’s wholly-owned subsidiary as the construction unit
and user unit its property rights belong to the Shenzhen Municipal People’s Government and are handed over to
the State-owned Assets Supervision and Administration Commission of Shenzhen Municipal People’s Government
(hereinafter referred to as Shenzhen SASAC). Pinghu Grain Depot was put into construction in 2007 and completed
in 2009 with a construction area of 95476.77 square meters of which the construction area of storage facilities is
90671.13 square meters the construction area of ancillary facilities is 1582.06 square meters and the construction
area of storage management buildings is 3223.58 square meters. The Company’s wholly-owned subsidiary
Shenzhen Cereals Group has been using Pinghu Grain Depot for free. On January 18 2018 the General Office of
the Shenzhen Municipal People’s Government and the relevant departments held a meeting on the land disposal of
Shenzhen Cereals Group the meeting agreed that Pinghu Grain Depot was invested and established by the Shenzhen
Municipal People’s Government and is the main platform for the government storage grain. According to the
“Notice on Relevant Issues Concerning the Construction of Urban Grain Reserve Depots” (SFB [2005] No. 155)
its property rights are held by Shenzhen SASAC on behalf of Shenzhen Municipal People’s Government.
According to the resolutions of the relevant meeting of the General Office of the Shenzhen Municipal People’s
Government Pinghu Grain Depot was not included in the assets of the Company’s major asset restructuring but
after the completion of the final settlement of the Pinghu Grain Depot Shenzhen Cereals Group and the owner of
Pinghu Grain Depot(or its authorized unit) should sign a long-term rental agreement at the market fair and just rental
price and Shenzhen Cereals Group continued to use the house property.
Controlling shareholder Fude Capital has made the commitment to the Company as: If SZCG needs to make a
supplementary payment for the rent before assessment basis date (30th September 2017) to the property right unit
of Pinghu Grain Depot (or its authorized unit) the total amount of the rent and other related charges and expenses
shall be borne by the Fude Capital.therefore SZCG did not recognized relevant rental on 30 September 2017 and
before
As an asset management unit entrusted by State-owned Assets Supervision and Administration Commission ofShenzhen Fude Capital signed the “Overall Rental Agreement of Shenzhen Grain Reserve Depot (i.e. “PinghuGrain Depot”)” with Shenzhen Cereals Group on October 17 2018 the lease term is from October 1 2017 to
December 31 2019 it was agreed to pay an annual total rent of RMB 28434000 based on market prices. Since
October 1 2017 the Company has accrued the rental costs of Pinghu Grain Depot for September-December 2017
and 2018 in accordance with the agreed rental price. At the same time the Company has confirmed the income from
grain and oil storage services between October 1 2017 and December 31 2018 according to the storage service fee
standard for externally rented warehouses which increased the company’s 2017 annual grain and oil storage service
income of RMB 6774030.00 and increased the company’s 2018 annual grain and oil storage service income of
RMB 26445279.00.
(ii) Pension plan
Main content of pension plan and major changes can be found in relevant explanation of Wages payable- Defined
contribution plans in 21 of Note VI
XVII. Principle notes of financial statements of parent company
1. Note receivable and account receivable
RMB/CNY
Item Ending balance Opening balance
Account receivable 42441119.07 53950930.37
Total 42441119.07 53950930.37
(1) Note receivable
1)Category of note receivable
RMB/CNY
Item Ending balance Opening balance
2)Note receivable pledge at end of the Period
RMB/CNY
Item Amount pledge at period-end
3)Note receivable which has endorsed or discounted at period-end without due on balance sheet date yet
RMB/CNY
Item Amount derecognition at period-end Amount not derecognition at period-end
)The notes transferred to account receivable because the drawer has failed to perform the contract at
period-end
RMB/CNY
Item Amount transfer to account receivable at period-end
Other explanation
(2) Account receivable
1)Category of account receivable
RMB/CNY
Category
Ending balance Opening balance
Book balance
Bad debt
provision Book
value
Book balance Bad debt provision
Book
value Amoun
t
Ratio
Amoun
t
Accrua
l Ratio
Amo
unt
Ratio Amount
Accrual
Ratio
Account receivable
withdrawal bad
debt provision by
group of credit risk
characteristics
42869
954.13
99.93
%
42883
5.06
1.00%
42441
119.07
5395
0930
.37
99.95
%
539509
30.37
Account receivable
with single minor
amount but
withdrawal bad
debt provision for
single item
28453.
08
0.07%
28453.
08
100.00
%
2845
3.08
0.05%
28453.
08
100.00%
Total
42898
407.21
100.00
%
45728
8.14
1.07%
42441
119.07
5397
9383
.45
100.00
%
28453.
08
0.05%
539509
30.37
Account receivable with single significant amount and withdrawal bad debt provision separately at period end:
□Applicable √Not applicable
Account receivable provided for bad debt reserve under aging analysis method in the groups
√Applicable □Not applicable
RMB/CNY
Account age
Ending balance
Account receivable Bad debt provision Accrual Ratio
Subitem of within one year
Subtotal of within one year 42869954.13 428835.06 1.00%
Total 42869954.13 428835.06 1.00%
Explanation on combination determines:
In combination withdrawal proportion of bad debt provision based on balance proportion for account receivable
□Applicable √Not applicable
In combination withdrawal proportion of bad debt provision based on other methods for account receivable
2)Bad debt provision accrual collected or reversed
Accrual bad debt provision 428835.06 Yuan; collected or reversed Yuan.
Including major amount collected or reversed in the period:
RMB/CNY
Enterprise Amount collected or switch back Collection way
3)Receivables actually charge off during the reporting period
RMB/CNY
Item Amount charge off
Important receivables charge-off
RMB/CNY
Enterprise
Nature of account
receivable
Amount charge
off
Cause of charge-
off
Charge-off
procedures
Resulted by related
transaction (Y/N)
Explanation:
4)Top 5 receivables at ending balance by arrears party
Enterprise Ending balance Proportion in total
receivables at ending
balance(%)
Bad debt provision accrual
Shanghai Yihe Food Technology Co.Ltd.
12589370.00 29.35 125893.70
Xiangpiao Food Co. Ltd. 5271399.00 12.29 52713.99
Hohhot Yihe Xingye Trading Co. Ltd. 4439226.61 10.35 44392.27
Unilever (China) Co. Ltd. 3884634.00 9.06 38846.34
Shenzhen Yichong Trading Co. Ltd. 2301665.00 5.37 23016.65
Total 28486294.61 66.42 284862.95
5)Account receivable derecognition due to financial assets transfer
6)The amount of assets/liabilities that is transferred and continues to be involved
Other explanation
2. Other account receivable
RMB/CNY
Item Ending balance Opening balance
Other account receivable 159677969.59 163404561.75
Total 159677969.59 163404561.75
(1) Interest receivable
1)Category of interest receivable
RMB/CNY
Item Ending balance Opening balance
2)Major overdue interest
RMB/CNY
Borrower Ending balance Overdue time Overdue reason
Whether has
impairment occurred
and judgment basis
Other explanation
(2) Dividend receivable
1)Dividend receivable
RMB/CNY
Item(or invested enterprise) Ending balance Opening balance
2)Major dividend receivable with over one year in account age
RMB/CNY
Item(or invested
enterprise)
Ending balance Account age Cause of un-collectible
Whether has
impairment occurred
and judgment basis
Other explanation
(3) Other account receivable
1)Category of other account receivable
RMB/CNY
Category
Ending balance Opening balance
Book balance
Bad debt
provision Book
value
Book balance Bad debt provision
Book
value Amoun
t
Ratio
Amoun
t
Accrua
l Ratio
Amo
unt
Ratio Amount
Accrual
Ratio
Other account
receivable with
19783
947.34
10.83
%
17315
381.02
87.52
%
24685
66.32
1934
7283
10.87
%
90081
48.72
46.56%
103391
34.29
single major
amount and
withdrawal bad
debt provision for
single item
.01
Other account
receivable
withdrawal bad
debt provision by
group of credit risk
characteristics
15728
6825.4
0
86.08
%
77422.
13
0.05%
15720
9403.2
7
1531
0679
3.92
86.05
%
41366.
46
0.03%
153065
427.46
Other account
receivable with
single minor
amount but
withdrawal bad
debt provision for
single item
56412
49.52
3.09%
56412
49.52
100.00
%
5472
398.
91
3.08%
54723
98.91
100.00%
Total
18271
2022.2
6
100.00
%
23034
052.67
12.61
%
15967
7969.5
9
1779
2647
5.84
100.00
%
14521
914.09
8.16%
163404
561.75
Other receivable with single significant amount and withdrawal bad debt provision separately at end of period:
√Applicable □Not applicable
RMB/CNY
Other account
receivable (by
enterprise)
Ending balance
Other account
receivable
Bad debt provision Accrual Ratio Accrual causes
Changzhou Shenbao
Chacang E-commence
Co. Ltd. (hereinafter
referred to
as"Changzhou Shenbao
Chacang Co.")
19783947.34 17315381.02 87.52%
Allowance for bad debt
provision based on the
difference between the
current value of future
cash flow and its book
value
Total 19783947.34 17315381.02 -- --
In combination other accounts receivable whose bad debts provision was accrued by age analysis:
√Applicable □Not applicable
RMB/CNY
Account age
Ending balance
Other account receivable Bad debt provision Accrual Ratio
Subitem of within one year
Subtotal of within one year 192272.87 1922.73 1.00%
1-2 years 69491.56 7068.20
10.17%
Over 5 years 85539.00 68431.20 80.00%
Total 347303.43 77422.13 22.00%
Explanation on combination determines:
In combination withdrawal proportion of bad debt provision based on balance proportion for other account receivable:
□Applicable √Not applicable
In combination withdrawal proportion of bad debt provision based on other methods for other account receivable:
□Applicable √Not applicable
2)Bad debt provision accrual collected or reversed
Accrual bad debt provision 8513195.75 Yuan; collected or reversed 1057.17 Yuan.
Including major amount collected or reversed in the period:
RMB/CNY
Enterprise Amount switch back or collected Collection way
3)Other receivables actually charge-off during the reporting period
RMB/CNY
Item Amount charge off
Major other receivables charge-off
RMB/CNY
Enterprise
Nature of other
account
receivable
Amount charge
off
Cause of charge-
off
Charge-off
procedures
Resulted by related
transaction (Y/N)
Notes on verification of other receivables:
4) Other receivables by nature
RMB/CNY
Nature Ending book balance Opening book balance
Margin and deposit 119089.00 265665.63
Export tax rebate 312364.06 733709.16
Intercourse funds and other 182280569.20 176927101.05
Total 182712022.26 177926475.84
5)Top 5 other receivables at ending balance by arrears party
RMB/CNY
Enterprise Nature Ending balance Account age
Ratio in total
ending balance of
other receivables
Ending balance of
bad debt reserve
Huizhou Shenbao
Science &
Technology Co.Ltd.Intercourse funds 118400009.26 Within one year 64.80%
Shenzhen Shenbao
Sanjing Food &
Beverage
Development Co.
Ltd.Intercourse funds 26190645.20 Within one year 14.33%
Shenzhen Shenbao
Labor Service
Company
Intercourse funds 2107109.09 Over 3 years 1.15% 2107109.09
Changzhou
Shenbao Chacang
Co.
Intercourse funds 19783947.34 Over 3 years 10.83% 17315381.02
Shenzhen Shenbao
Technology Center
Co. Ltd.
Intercourse funds 10987963.15 Within one year 5.60%
Total -- 177469674.04 -- 96.71% 19422490.11
6)Account receivable with government subsidy involved
RMB/CNY
Enterprise Government grants Ending balance Ending account age
Time amount and basis
for collection predicted
7)Other receivable for termination of confirmation due to the transfer of financial assets
8)The amount of assets and liabilities that are transferred other receivable and continued to be involved
Other explanation
3. Long-term equity investment
RMB/CNY
Item
Ending balance Opening balance
Book balance
Depreciation
reserves
Book value Book balance
Depreciation
reserves
Book value
Investment for
subsidiary
4208728337.
66
4208728337.
66
917313300.84 917313300.84
Investment for
associates and
joint venture
6753354.23 2927628.53 3825725.70 7121310.06 2927628.53 4193681.53
Total
4215481691.
89
2927628.53
4212554063.
36
924434610.90 2927628.53 921506982.37
(1) Investment for subsidiary
RMB/CNY
The invested
entity
Opening
balance
Current
increased
Current
decreased
Ending balance
Current
impairment
accrual
Ending balance
of depreciation
reserves
Shenbao
Properties
2550000.00 2550000.00
Shenbao
Industrial &
Trading
5500000.00 5500000.00
Shenbao Sanjing 80520842.36 80520842.36
Shenbao
Huacheng
168551781.8
0
168551781.8
0
Huizhou
Shenbao Science
& Technology
60000000.00 60000000.00
Wuyuan Ju Fang
Yong
280404134.3
5
280404134.3
5
Hangzhou Ju
Fang Yong
176906952.4
2
176906952.4
2
Shenbao
Technology
Center
54676764.11 54676764.11
Shenshenbao
Investment
50000000.00 50000000.00
Yunnan Supply
Chain
20000000.00 20000000.00
Pu’er Tea
Trading Center
18202825.80 18202825.80
SZCG
3291415036.
82
3291415036.
82
Total
917313300.8
4
3291415036.
82
4208728337.
66
(2) Investment for associates and joint venture
RMB/CNY
investm Openin Current changes (+-) Ending Ending
ent
compan
y
g
balance
Additio
nal
investm
ent
Capital
reducti
on
Investm
ent
gains
recogni
zed
under
equity
Other
compre
hensive
income
adjustm
ent
Other
equity
change
Cash
dividen
d or
profit
announ
ced to
issued
Impair
ment
accrual
Other
balance balance
of
depreci
ation
reserve
s
I. Joint venture
II. Associated enterprise
Shenzh
en
Shenba
o
(Liaoyu
an)
Industri
al
Compa
ny
57628.
53
57628.
53
57628.
53
Shenzh
en
Shenba
o
(Xinmi
n)
Foods
Co.
Ltd
28700
00.00
28700
00.00
28700
00.00
Changz
hou
Shenba
o
Chacan
g
Guangz
hou
Shenba
o
Menda
o Tea
Co.
Ltd.
41936
81.53
-
36795
5.83
38257
25.70
Subtota
l
71213
10.06
-
36795
5.83
67533
54.23
29276
28.53
Total
71213
10.06
-
36795
5.83
67533
54.23
29276
28.53
(3) Other explanation
4. Operating income and operating cost
RMB/CNY
Item
Current Period Last Period
Income Cost Income Cost
Main business 165407623.24 156886817.06 163863447.98 154883304.80
Total 165407623.24 156886817.06 163863447.98 154883304.80
Other explanation
5. Investment earnings
RMB/CNY
Item Current Period Last Period
Investment income of long-term equity
based on equity
-367955.83 -306318.47
Financial products revenue 953125.00 2706034.95
Other 450000.00
Total 1035169.17 2399716.48
6. Other
XVIII. Supplementary information
1. Current non-recurring gains/losses
√Applicable □Not applicable
RMB/CNY
Item Amount Statement
Gains/losses from the disposal of non-
current asset
1207842.88
Governmental subsidy calculated into 8311158.51
current gains and losses(while closely
related with the normal business of the
Company excluding the fixed-amount or
fixed-proportion governmental subsidy
according to the unified national standard)
Capital occupancy expense collected from
non-financial enterprises and recorded in
current gains and losses
490289.86
Profit and loss of assets delegation on
others’ investment or management
1984446.92
Current net gains and losses occurred from
period-begin to combination day by
subsidiaries resulting from business
combination under common control
374880023.05
Held transaction financial asset
gains/losses of changes of fair values from
transaction financial liabilities and
investment gains from disposal of
transaction financial asset transaction
financial liabilities and financial asset
available for sales exclude the effective
hedging business relevant with normal
operations of the Company
-474740.24
Other non-operating income and expense
other than the above mentioned ones
-4434126.83
Gains/losses satisfied definition of the
non-recurring gains/losses
450000.00
Less: Impact on income tax 3210576.33
Affect on minority equity 48116.44
Total 379156201.38 --
Concerning the extraordinary profit (gain)/loss defined by Q&A Announcement No.1 on Information Disclosure for Companies
Offering Their Securities to the Public --- Extraordinary Profit/loss and the items defined as recurring profit (gain)/loss according to
the lists of extraordinary profit (gain)/loss in Q&A Announcement No.1 on Information Disclosure for Companies Offering Their
Securities to the Public --- Extraordinary Profit/loss explain reasons
□Applicable √Not applicable
2. ROE and earnings per share
Profits during report period Weighted average ROE
Earnings per share
Basic EPS
(Yuan/share)
Diluted EPS
(Yuan/share)
Net profits belong to common
stock stockholders of the
Company
7.70% 0.2675 0.2675
Net profits belong to common
stock stockholders of the
Company after deducting
nonrecurring gains and losses
-1.77% -0.0615 -0.0615
3. Difference of the accounting data under accounting rules in and out of China
(1) Difference of the net profit and net assets disclosed in financial report under both IAS (International
Accounting Standards) and Chinese GAAP (Generally Accepted Accounting Principles)
√Applicable □Not applicable
RMB/CNY
Net profit Net assets
Current Period Last Period Ending balance Opening balance
Chinese GAAP 308331032.44 359174263.44 4172502535.11 3848760765.85
Items and amount adjusted by IAS
Adjustment for other
payable fund of stock
market regulation
1067000.00 1067000.00
IAS 308331032.44 359174263.44 4173569535.11 3849827765.85
(2) Difference of the net profit and net assets disclosed in financial report under both foreign accounting
rules and Chinese GAAP (Generally Accepted Accounting Principles)
□Applicable √Not applicable
(3) Explanation on data differences under the accounting standards in and out of China; as for the differences
adjustment audited by foreign auditing institute listed name of the institute
4. Other
Section XII. Documents available for Reference
1. Text of financial statement with signature and seals of legal person person in charge of accounting works and
person in charge of accounting institution;
2. Original audit report with seal of accounting firms and signature and seals of CPA;
3. Original and official copies of all documents which have been disclosed on Securities Times China Securities
Journal and Hong Kong Commercial Daily in the report period;
4. Original copies of 2018 Annual Report with signature of the Chairman.
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