SHENZHEN CEREALS HOLDINGS CO. LTD.SEMI-ANNUAL REPORT 2021

August 2021

Section I. Important Notice Contents and Interpretation

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.Person in charge of the Company Zhu Junming Head of Accounting Lu Yuhe

and Head of Accounting Institution (Accounting Supervisors) Wen Jieyu hereby

confirm that the Financial Report of Semi-Annual Report 2021 is authentic

accurate and complete.In addition tot he following directors other directors attended the Board

Meeting for the deliberation of the semi-annual report.Reason for not

Name of the director Title of the director not

attending the meeting in Entrusted person

not present in person present in person

person

Zhu Junming Chairman Vacation Lu Qiguang

Hu Xianghai director Vacation Lu Qiguang

Concerning the forward-looking statements with future planning involved in the

semi-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

“Risks and Countermeasures”in the report of Section III-Management

Discussion and Analysis. 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 Company plans not to distributed cash dividend bonus and no capitalizing

of common reserves either.Contents

Section I Important Notice Contents and Interpreta... 2

Section II Company Profile and Main Financial Inde... 7

Section IIIManagement Discussion and Analysis ...... 11

Section IV Corporate Governance. ................... 29

Section V Enviornmental and Social Responsibility .. 31

Section VI Important Events……………………………………………………......33

Section VII Changes in shares and particular about shareholders………………………….....41

Section VIII Preferred Stock ....................... 46

Section IX Corporate Bonds ......................... 47

Section X Financial Report ......................... 48

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 and official copies of all documents which have been disclosed on Securities Times China Securities

Journal Hong Kong Commercial Daily and Juchao Website (www.cninfo.com.cn) in the report period;

3. Original copies of 2021 Semi-Annual Report with signature of the Chairman.Interpretation

Items Refers to Contents

SZCH/Listed Company /the Company/ Refers to Shenzhen Cereals Holdings Co. Ltd.SZCG Refers to Shenzhen Cereals Group Co. Ltd

Hualian Company Refers to Shenzhen Hualian Grain and Oil Trading Co. Ltd.Shenliang Doximi Refers to Shenliang Doximi Business Co. Ltd.Flour Company Refers to Shenzhen Flour Co. Ltd

Shenliang Quality Inspection Refers to Shenliang Quality Inspection Co. Ltd.Dongguan Logistics Refers to Dongguan Shenliang Logistics Co. Ltd.Dongguan Food Industrial Park Refers to Dongguan International Food Industrial Park Development Co. Ltd.Shenliang Cold Chain Refers to Shenzhen Shenliang Cold Chain Logistics Co. Ltd.Shenliang Property Refers to Shenzhen Shenliang Property Development Co. Ltd.Shenliang Big Refers to Shenzhen Shenliang Big Kitchen Food Supply Chain Co. Ltd

Shenbao Huacheng Refers to Shenzhen Shenbao Huacheng Technology Co. Ltd.Shenbao Investment Refers to Shenzhen Shenshenbao Investment Co. Ltd.Food Materials Group Refers to Shenzhen Food Materials Group Co. Ltd

Agricultural Products Refers to Shenzhen Agricultural Products Group Co. Ltd

Shenzhen Municipal People’s Government State-owned Assets

Shenzhen SASAC Refers to

Supervision & Administration Commission

CSRC Refers to China Securities Regulation Commission

SSE Refers to Shenzhen Stock Exchange

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 profile

Short form for share SZCH Shenliang B Stock code 000019 200019

Listing stock exchange Shenzhen Stock Exchange

Chinese name of the深圳市深粮控股股份有限公司

Company

Abbr. of Chinese name of深粮控股

the Company (if applicable)

English name of the

SHENZHEN CEREALS HOLDINGS CO.LTD

Company(if applicable)

Legal Representative Zhu Junming

II. Person/Way to contact

Secretary of the Board Rep. of security affairs

Name Chen Xiaohua Chen Kaiyue Liu Muya

13/F Tower A World Trade Plaza No.9 Fuhong 13/F Tower A World Trade Plaza No.9 Fuhong Rd.Contact add.Rd. Futian District Shenzhen Futian District Shenzhen

Tel. 0755-83778690 0755-83778690

Fax. 0755-83778311 0755-83778311

E-mail chenxh@slkg1949.com chenky@slkg1949.com、liumy@slkg1949.comIII. Others

1. Way of contact

Whether registrations address offices address and codes as well as website and email of the Company changed in reporting period or

not

□ Applicable √Not applicable

The registrations address offices address and codes as well as website and email of the Company have no changes in the Period

found more in Annual Report 2020.2. Information disclosure and preparation place

Whether information disclosure and preparation place changed in reporting period or not

□ Applicable √ Not applicable

The newspaper appointed for information disclosure website for semi-annual report publish appointed by CSRC and preparation

place for semi-annual report have no change in reporting period found more details in Annual Report 2020.IV. Main accounting data and financial indexes

Whether information disclosure and preparation place changed in reporting period or not

□Yes √No

Changes over last year

Current Period Same period of last year

(+-)

Operating revenue (RMB) 5262189180.53 4740428222.10 11.01%

Net profit attributable to shareholders of

243846874.76 210738686.12 15.71%

the listed Company (RMB)

Net profit attributable to shareholders of

the listed Company after deducting 237039666.31 196760081.80 20.47%

non-recurring gains and losses (RMB)

Net cash flow arising from operating

-691272151.33 9610361.15 -7292.99%

activities (RMB)

Basic earnings per share (RMB/Share) 0.2116 0.1828 15.75%

Diluted earnings per share (RMB/Share) 0.2116 0.1828 15.75%

Weighted average ROE 5.17% 4.66% 0.51%

Changes over end of last

End of current Period End of last year

year (+-)

Total assets (RMB) 8429737224.82 7309384147.93 15.33%

Net assets attributable to shareholder of

4448099108.10 4595331999.76 -3.20%

listed Company (RMB)

V. 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 Net assets attributable to shareholders of

Company listed Company

Current period Last period Period-end Period-begin

Chinese GAAP 243846874.76 210738686.12 4448099108.10 4595331999.76

Items and amount adjusted by IAS

Adjustment for other

1067000.00 1067000.00

payable fund of stock

market regulation

IAS 243846874.76 210738686.12 4449166108.10 4596398999.76

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

VI. Items and amounts of extraordinary profit (gains)/loss

√ Applicable □ Not applicable

In RMB

Item Amount Note

Gains/losses from the disposal of non-current asset (including the write-off that

4753.12

accrued for impairment of assets)

Governmental subsidy reckoned into current gains/losses (not including the subsidy

enjoyed in quota or ration according to national standards which are closely relevant 4811695.56

to enterprise’s business)

Profit and loss of assets delegation on others’ investment or management 3061191.63

Gains and losses from change of fair values of held-for-transaction financial assets

derivative financial assets held-for-transaction financial liability and derivative

financial liability except for the effective hedge business related to normal business of

288972.32

the Company and investment income from disposal of tradable financial assets

derivative financial assets tradable financial liability derivative financial liability and

other debt investment.Other gains/losses items that conform to the definition of non-recurring gains/losses 1529279.86

Less: impact on income tax 2005561.30

Impact on minority shareholders’ equity (post-tax) 883122.74

Total 6807208.45 --

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

Section III Management Discussion and Analysis

I. Main businesses of the Company in the reporting period

Main business of the Company includes the wholesale and retail business food processing and manufacturing

business leasing and commerce service business.The wholesale and retail business are mainly rice wheat rice in the husk corn sorghum cooking oil and other

varieties of grain and oil as well as the sales of fine tea beverage and condiment. During the reporting period the

company overcame many adverse factors such as shortage of grain source and fluctuation of grain price under the

influence of the pandemic took multiple measures to ensure supply and stable supply and continued to expand

the market strengthen the brand and optimize the products. Mainly supplied wheat rice corn barley sorghum

and other raw grain to customers such as the industry's large traders feed processing and flour processing

enterprises and so on; mainly sold rice flour cooking oil high-quality tea beverages and other products to

demand units and community residents.Food processing and manufacturing business are mainly the processing the technology research in aspect of flour

rice cooking oil tea and natural plant extracts beverage and condiments etc. The company's flour brands and

products include “Jinchangman” “Yingshanhong” and “Hongli” series bread flour; “Clivia” and “Canna” series

tailored flour for cakes and steamed bun; “Sunflower” wheat flour for noodles and cookie flour; “Tianlvxiang”

wheat flour for bread refined flour and dumpling flour etc.; Rice products include “Shenliang Doximi”

“Guzhixiang” “Gufengxianman” “Runxiangliangpin” “Hexiang” and “Taitai Fukou” etc. Cooking oil products

include brands such as “Shenliang Fuxi” “Shenliang Jinxi” and “Youtian” etc. Tea brands mainly include

"Jufangyong" tea; "Yichong" fresh extract "Jindiao" instant tea powder and other tea deep-processed products as

well as "Shenbao" chrysanthemum tea lemon tea and "Cha Mi Xiang Qi" and other series of tea drinks.Condiments are mainly "Sanjing" oyster sauce and sauces. Several brands have formed product series including

"SZCH Yushuiqing" rice noodles oil and coarse cereals series "Jiaxi" rice & noodles series "Jinchangman"

noodles & oil series Black-faced Spoonbill tea rice oil drinking water non-staple food and condiment series

etc. and the launch of Yueqiu tea wine continues to enrich the product structure. During the reporting period the

company insisted on innovation-oriented continued to extend the industrial chain actively carried out new

product research and development and launched the SZCH sports drink brand "Shenbao Sports Muscle".The leasing and business service refers to providing the professional import & export trade warehousing &

storage logistic & distribution quality inspection & information technology services property leasing and

management business operation management services for all kinds of clients in the upstream and downstream of

the industrial chain by using the advantage of brand reputation operation service capacity and facility technology

that accumulated in field of grain and oil market. Its Dongguan smart gain logistics complex is a comprehensive

grain distribution service body integrating five major functions: grain & oil terminal transit reserve testing &

distribution processing & production and market trading; The Shenliang Quality Inspection was awarded as

“Guangdong Shenzhen National Grain Quality Monitoring Station”. the subsidiary Shenliang Cold Chain provides

cold chain of food storage and distribution services to the customers and Shenliang Property is a professional

assets management platform enterprise.II. Core Competitiveness Analysis

The company enhances the endogenous power by deepening reform strengthens the "extensive" development by

innovation cooperation and continuously upgrades and transforms the governance pattern development quality

and guarantee ability and has embarked on a path of sustainable and high-quality development through

self-innovation and become a highly competitive innovative and influential "ten billion" backbone grain

enterprise in the domestic grain industry.

(1)Operation mechanism

The core management team of the company has rich experience and has a strong strategic vision and pragmatic

spirit. Combined with the actual development of the Company formulated a set of effective mechanisms to

promote the quality and efficiency of business development. The company vigorously promotes 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 “strategic management andcontrol”. In business control the company has built a "six-in-one" new control system with relative separation and

mutual checks and balances among "business operation and funds management inventory management quality

management contract management information system management". By strengthening the whole process risk

supervision budget management plan management contract management customer management and brand

management it effectively reduced business risks while fully participating in market competition and realized the

deep integration of "ensuring grain security" and "promoting development". Through innovative talent

development mechanism the company has established an open talent team to meet the long-term development of

enterprises and reserve intelligence for the enterprise upgrading and development. 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 withinthe enterprise. The company insists on cultivating and advocating the corporate culture with “people-orientedperformance 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

The company deeply engages in segmenting the target market provides diversified product supply services for

customers in different areas of the industry chain establishes a multi-level product supply network covering

online and offline and realizes the transformation of product supply to "remoteness intelligentization and

self-service". In terms of grain and oil trading services the bulk commodity trading platform www.zglsjy.com.cn

created by its subsidiary Hualian Company efficiently integrates business flow logistics and information flow

improves circulation efficiency and provides spot listings one-way bidding basis price financing logistics

quality inspection information and other services for internal business units suppliers and customers. In terms of

e-commerce SZCH doximi actively promotes the development of new grain retail formats such as "Internet +

Grain" and "Community Automatic Grain Sales Stations" it has a B2C grain and oil online direct sales platform

"doximi.com" and has opened channels on e-commerce platforms such as Tmall and Jingdong Mall so as to

promote the deep integration of online and offline e-commerce platforms. In terms of group meal supply its

subsidiary SZCH Beige has established a one-stop distribution service platform serving large end customers

providing high-quality and safe smart group meal food services for group users such as enterprises schools and

government institutions. In terms of comprehensive tea drinking services its subsidiary Shenbao Investment has

launched a micro-complex "Cha Mi Xiang Qi" with a combination of "light drinks" "light food" and "light retail"

functions.

(3) Information technology

The company attaches great importance to the transformation and upgrading of traditional industries with modern

technological means and actively introduces new-generation information technologies such as the Internet of

Things cloud computing big data and mobile Internet into grain management forming an information system

that can cover the entire industrial chain of the grain industry and promoting the "Internet + Grain" industry

development. The company’s informatization construction capability is at the leading level in the grain reserves

industry taking the lead in building the warehouse management of "standardization mechanization

informatization and harmlessness" in the industry the self-developed "Grain Logistics Information System

(SZCG GLS)" has built a framework for the construction of grain informatization work innovated the grain

management model led the development direction of the grain industry and became a benchmark for the national

grain industry. The project was awarded the “National IoT Major Application Demonstration Project” by the

National Development and Reform Commission and the Ministry of Finance. The company has undertaken a

number of national-level research projects the results of a number of informatization projects have won national

provincial and municipal awards and more than 30 information systems have been developed and are operating

normally.

(4) R&D capabilities

The company has strong research and development capabilities in the field of food and beverage gathers leading

technological advantages and equipment systems has Jiangxi provincial enterprise technology center Shenzhen

municipal research and development center (technology center) and Shenzhen plant deep processing technology

engineering laboratory. Its subsidiaries Shenbao Huacheng and Wuyuan County Jufangyong Tea Co. Ltd. have

obtained national high-tech enterprise certification. Shenbao Huacheng has independently researched and

developed more than 50 patented technologies for tea powder tea concentrated juice and plant extraction

published more than 30 scientific papers and won a number of awards such as Science and Technology Progress

Award of the Ministry of Agriculture Zhejiang Science and Technology Award Science and Technology Award of

Chinese Academy of Agricultural Sciences Jiangxi Science and Technology Progress Award Science and

Technology Award of China National Light Industry Council etc. presided over or participated in the preparation

of national standards "GBT 21733-2008 Tea Drinks" and two industry standards i.e. "Tea Concentrated Juice for

Food Industry - Light Industry Standard QB-T 4068- 2010" and "Instant Tea Powder for Food Industry - Light

Industry Standard QB-T 4067-2010" .

(5) Quality control

The company implements grain and oil quality standards that are higher than national standards. The subordinate

SZCG Quality Inspection has the leading grain and oil quality inspection technology and equipment in the

domestic grain industry and is included in the national grain quality supervision and inspection system. It was

awarded the "Guangdong Shenzhen National Grain Quality Monitoring Station" by the State Administration of

Grain and obtained the assessment certificate of agricultural product quality and safety inspection agency (CATL)

and the qualification certificate of inspection agency (CMA) etc and total number of certified testing capability

items is 756. Shenliang Quality Inspection takes the lead in listing pesticide residues heavy metal pollutants

fungal toxins and other hygiene indicators as well as food taste indicators in the daily inspection indicators. It has

the ability to detect four types of indicators of generic quality storage quality food security & quality and other

four types of indicators of testing capacity the detection capability can meet the relevant quality detection

requirements of grain and oil products and can accurately analyze the nutritional composition and hygienic

indicators of the grain and determine its storage and edible quality. It has initiated the "digital laboratory" in the

grain industry real-time monitoring of the entire process of cuttings testing distribution etc. relying on

collaborative platforms to save retrieve integrate analyze and share grain and oil testing data to achieve 100%

coverage of grain & oil product inspection and 100% product quality qualification rate of the factory. Subsidiary

Shenbao Huacheng has established a quality control system recognized by large international food and beverage

companies and has successfully passed the quality certification of global suppliers of Coca-Cola Lipton Kraft

Suntory and Nestlé.

(6) Brand effect

The company was awarded the "Top 500 Service Enterprises in China" "China Top Ten Grain and Oil Groups"

"China Top 100 Grain and Oil Enterprises" "National Leading Enterprise Supporting Grain and Oil

Industrialization" “National Quality Benchmark” “Top 10 Food Digital Technology Applications” and other

honors and has been evaluated as "Shenzhen Top 100 Industry Leaders" "Shenzhen Time-honored Brand" and

"Shenzhen Well-known Brand" and it is a "rice bag" trusted by the public. The company owns many

well-known brands and platforms such as "Shenzhen Flour" "SZCH Doxi" "SZCH Yushuiqing" "Beige Kitchen"

"www.zglsjy.com.cn" "Shenbao Teabank" "Wuyuan Jufangyong" and other well-known brands and platforms

and has gradually built up a complete industrial system with the elements of “rice” +”tea”. The Changxiangdao

Daohuaxiang Rice held by the Shenliang Doximi was selected as the first batch of "China Good Cereals and

Oils" by the State Administration of Grain. The company keeps abreast with the international first-class standards

and builds high-quality urban food brands its 35 products have obtained the "Zhen Pin" certification and the

company's corporate recognition market reputation and social recognition have continued to increase.III. Main business analysis

See the “I-Main businesses of the Company in the reporting period”

Y-o-y changes of main financial data

In RMB

Y-o-y

Same period of last

Current period increase/decre Reasons for changes

year

ase

Operation revenue 5262189180.53 4740428222.10 11.01%

Operation cost 4650397070.67 4219403828.80 10.21%

Sales expenses 106711776.77 109796698.11 -2.81%

Management expenses 109316093.65 101838460.53 7.34%

Mainly due to the increase in

borrowings and part of the

engineering projects have been

Financial expenses 17204774.52 6155212.61 179.52%

transferred to fixed assets in the

period resulting in an increase in

expensed interest.Lower income tax expense base due

Income tax expense 13407354.56 2465268.63 443.85% to the rent reduction in the prior

period for the epidemic

Investment for R&D increased in the

R&D investment 10926018.15 7368772.68 48.27%

Period

Net cash flow arising

Increase in food and oil purchases in

from operation -691272151.33 9610361.15 -7292.99%

the period

activities

Net cash flow arising Purchase equity of the minority

from investment -267111859.35 -70334070.80 -279.78% shareholders of Dongguan Logistics

activities in the period

Net cash flow arising

The working capital loans increased

from financing 836677347.40 19387290.61 4215.60%

in the period

activities

Mainly due to the y-o-y change

Net increase of cash

-121720142.83 -41317771.47 -194.60% impact of net cash flow arising from

and cash equivalent

operation activities

Major changes on profit composition or profit resources in reporting period

□ Applicable √ Not applicable

No major changes on profit composition or profit resources occurred in reporting period

Constitute of operation income

In RMB

Current period Same period last year

Increase/decrease

Ratio in operation Ratio in operation

Amount Amount y-o-y (+-)

income income

Total operation

5262189180.53 100% 4740428222.10 100% 11.01%

revenue

According to industries

Wholesale and

4400038220.56 83.62% 4082124009.24 86.11% 7.79%

retail

Leasing and

commercial 476311036.38 9.05% 417157357.85 8.80% 14.18%

services

Manufacturing 385839923.59 7.33% 241146855.01 5.09% 60.00%

According to products

Grain and oil

trading and 4675804942.84 88.86% 4229578137.45 89.22% 10.55%

processing

Grain and oil

storage logistics 422355721.28 8.03% 377567473.64 7.96% 11.86%

and services

Food & beverage

111339446.11 2.11% 93692726.80 1.98% 18.83%

and tea processing

Leasing and others 52689070.30 1.00% 39589884.21 0.84% 33.09%

According to region

Domestic market 5245073883.18 99.67% 4721086070.54 99.59% 11.10%

Exportation 17115297.35 0.33% 19342151.56 0.41% -11.51%

About the industries products or regions accounting for over 10% of the Company’s operating income or operating profit

√ Applicable □Not applicable

In RMB

Increase/decrea

Gross Increase/decrea Increase/decrea

se of gross

Operation revenue Operation cost profit se of operation se of operation

profit ratio

ratio revenue y-o-y cost y-o-y

y-o-y

According to industries

Wholesale and

4400038220.56 4133013050.29 6.07% 7.79% 6.30% 1.31%

retail

According to products

Grain and oil

trading and 4675804942.84 4412107449.49 5.64% 10.55% 9.60% 0.82%

processing

According to region

Domestic market 5245073883.18 4637681823.32 11.58% 11.10% 10.33% 0.62%

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

Reasons for y-o-y relevant data with over 30% changes

□ Applicable √Not applicable

IV. Analysis of the non-main business

√ Applicable □ Not applicable

In RMB

Ratio in total Whether be

Amount Causes

profit sustainable

Investment

3501371.30 1.35% Unsustainable

income

Gains/losses of

fair value 288972.32 0.11% Unsustainable

variation

Accrual of the reserve for falling prices

of goods in stock. When selling the

Asset impairment -111448173.12 -43.00% goods with falling prices accrual the Unsustainable

actual carrying forward of the reserves

will be used to offset the current cost

Non-operating

1627702.56 0.63% Unsustainable

income

Non-operating

403164.30 0.16% Unsustainable

expense

V. Assets and liability analysis

1. Major changes of assets composition

In RMB

End of current period End of last year Ratio Notes of major changes

Ratio in Ratio in changes

Amount total Amount total

assets assets

The operating expenses

Monetary fund 68774083.11 0.82% 190494225.94 2.61% -1.79%

increased in the Period

The income from grain & oil

Account

712441439.01 8.45% 198311102.17 2.71% 5.74% reserve services have not yet

receivable

been returned in the period

Increase in food and oil

Inventory 4130250968.86 49.00% 3418328974.27 46.77% 2.23%

purchases in the period

Investment real

244847354.37 2.90% 253037899.57 3.46% -0.56%

estate

Long-term

equity 73655327.51 0.87% 73215147.84 1.00% -0.13%

investment

Part of the engineering projects

of Dongguan Logistics have

Fix assets 1339305491.07 15.89% 1122692490.55 15.36% 0.53%

been transferred to fixed assets

in the period

Part of the engineering projects

Construction in of Dongguan Logistics have

868979194.24 10.31% 1045643295.57 14.31% -4.00%

process been transferred to fixed assets

in the period

The lease right-of-use assets

Right-of-use

89811269.93 1.07% 1.07% recognized under the new lease

assets

standards in the period

Short-term The working capital loans

1212686540.73 14.39% 110318727.12 1.51% 12.88%

loans increased in the period

Contract

149884356.62 1.78% 108975866.82 1.49% 0.29%

liability

Long-term

805594327.98 9.56% 841864531.75 11.52% -1.96%

loans

The lease liability recognized

Lease liability 91245488.14 1.08% 1.08% under the new lease standards in

the period

2. Main overseas assets

□Applicable √Not applicable

3. Assets and liability measured by fair value

√ Applicable □ Not applicable

In RMB

Accumula Devalu Amou

Changes of tive ation of nt of

Other

fair value changes of withdra purcha Amount of sale in Ending

Items Opening amount chang

gains/losses in fair value wing in se in the period amount

es

this period reckoned the the

into equity period period

Financial

assets

1. Trading

financial

assets

(excluding 160621806.51 288972.32 160000000.00 910778.83

derivative

financial

assets)

Other

non-current

57500.00 57500.00

financial

assets

Aforementi

160679306.51 288972.32 160000000.00 968278.83

oned total

Financial

0.00 0.00

liabilities

Content of other changes

N/A

Whether there have major changes on measurement attributes for main assets of the Company in report period or not

□ Yes √No

4. The assets rights restricted till end of the period

Item Ending book value Reasons for restriction

According to the long-term loan mortgage contract signed by the Company Shenzhen Branch

of Agricultural Development Bank and Huizhou Zhongkai Sub-branch of HSBC the Company

Fixed assets 671932275.20 has mortgaged the real estate property rights of the structures of Yue (2020) Dongguan Property

Right No. 0127118 Yue (2020) Dongguan Property Right No. 0127119 Yue (2020) Dongguan

Property Right No. 0127120 and Yue (2020) Dongguan Property Right No.0119705 at No. 10

Jingang South Road Machong Town Dongguan City and other aground buildings to Shenzhen

Branch of Agricultural Development Bank and Huizhou Zhongkai Sub-branch of HSBC in

sequence as loan collateral.According to the loan contract Yue DG2017 NGDZ No. 006 signed by International Food

Company a subsidiary of the Company and Bank of Communications Co. Ltd. Dongguan

Intangible

68667888.52 Branch International Food Company has mortgaged its two pieces of land "DFGY (2009) DT

assets

No. 190" and "Yue(2020) Dongguan Real Estate Right No. 0321771" to the Bank of

Communications Co. Ltd. Dongguan Branch as loan collateral.According to the long-term loan mortgage contract signed by the Company and Dongguan

Intangible Branch of CMB Dongguan Logistics Company has mortgaged the real estate rights of the

35398230.05

assets structures of Yue (2016) Dongguan Property Right No. 0028527 at No. 10 Jingang South Road

Machong Town Dongguan City to Dongguan Branch of CMB as loan collateral.Total 775998393.77

VI. Investment analysis

1. Overall situation

√ Applicable □ Not applicable

Investment in the same period of last

Investment in reporting period (RMB) Changes (+-)

year (RMB)

423203922.73 107920927.79 292.14%

2.The major equity investment obtained in the reporting period

√ Applicable □ Not applicable

In RMB

W

het

her

Gain

it

Prog /loss

is

ress on Date

Inves inv

Inves Amo Shar Capit Inves as of Expe inve of

Main tmen Prod olv Disclosure

tee unt ehold al Partn tmen the cted stme discl

busin t uct ed index (if

comp inves ing sourc ers t bala earni nt in osur

ess meth type in any)

any ted ratio e term nce ngs curre e (if

od a

sheet nt any)

la

date perio

ws

d

uit

(Y/

N)

“Acquisition of the

49% equity

of

Com Dongguan

Dong plete Shenliang

guan d the Logistics

GrainShenl busi Co. Ltd.”

stora Acqu 3216 2

iang 100.0 Own ness (Notice

ge isitio 8000 - - - 0.00 0.00 N June

Logis 0% funds chan No.:2021-1

logist n 0.00 2021

tics ge 7) released

ics

Co. regis on Juchao

Ltd. trati Website

on (www.cninf

o.com.cn)

dated 2

June 20213216

Total -- -- 8000 -- -- -- -- -- -- 0.00 0.00 -- -- --

0.00

3.The major non-equity investment carrying in the reporting period

√ Applicable □Not applicable

In RMB

Reaso

ns for

Accu Inco failur

mulate me e to

Whethe Indust

d accu achie

r it is ry Date

Amou actual mulat ve Discl

the with Capita Expe of

Invest nt input ed at plann osure

fixed the l Progr cted disclo

Item ment input as of end ed index

assets invest source ess earni sure

method in the the of the progr (if

invest ment s ngs (if

period end of report ess any)

ment involv any)

reporti ing and

(Y/N) ed

ng perio expec

period d ted

benef

its

Dongguan Self-bu Storag 13582 41951 Owne 100.0

Y -

Shenliang ild e and 785.9 7999. d 0%

Logistics wharf 9 28 Funds

Co. Ltd.- and

Grain Bank

storage and Loans

wharf

complement

ary

engineering

Dongguan

Shenliang

Logistics

Owne

Co. Ltd.-

d

Grain Storag 17281

Self-bu Funds 100.0

storage and Y e and 0142. -

ild and 0%

wharf wharf 85

Bank

complement

Loans

ary

engineering

(Phase II)

Dongguan

International

Food Const

Owne

Industrial ructio

Wareh d

Park 95751 5279 2392 n

Self-bu ouse 7665 Funds 88.06

Developmen Y 1995. 9890 6145 progr

ild logisti 976.79 and %

t Co. 31 .96 .22 am

c Bank

Ltd.-Wareho adjust

Loans

use logistic ment

distribution

center

Dongguan

Shenliang

Const

Logistics Owne

ructio

Co. Wareh d

93052 n

Ltd.--Grain Self-bu ouse 1739 Funds 17.17

Y 038.7 progr

logistics and ild logisti 280.51 and %

9 am

wharf c Bank

adjust

complement Loans

ment

ary

engineering

Dongguan Wareh Owne New

Self-bu 5345 5345 42.76

Shenliang Y ouse d constr

ild 529.30 529.30 %

Logistics logisti Funds uctio

Co. c and n

Ltd.-A1cotta Bank

ge Loans

warehouse

24501 Owne

Land use Self-bu Constr

N 8960. d -

right ild uction

82 Funds

28333 1893 5279 2392

Total -- -- -- 572.5 25666 -- -- 9890 6145 -- -- --

9 6.35 .96 .22

4. Financial assets investment

(1) Securities investment

√ Applicable□Not applicable

Chan

ges in Profit

Book Cumu

Acco fair Curre and Book

Short value lative Curre

Variet Code Initial unting value nt loss value Acco Capita

form at the fair nt

y of of invest measu of the purch in the at the unting l

of begin value sales

securi securi ment remen curren ase Repor end of subjec Sourc

securit ning chang amou

ties ties cost t t amou ting the t e

ies of the es in nt

model profit nt Perio period

period equity

and d

loss

Dome

Fair Trada

stic Debt

value ble

and 00001 Zhong 6218 2889 2889 9107 resche

0.00 measu financ

overs 7 hua-A 06.51 72.32 72.32 78.83 duled

remen ial

eas shares

ts assets

stock

6218 2889 2889 9107

Total 0.00 -- 0.00 0.00 0.00 -- --

06.51 72.32 72.32 78.83

Disclosure date of

securities investment Not applicable

approval of the Board

Disclosure date of

securities investment

approval of the Not applicable

Shareholder Meeting (if

applicable)

(2) Derivative investment

□ Applicable√Not applicable

The Company has no derivatives investment in the Period

VII. 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

VIII. 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 Main Register Total Operating Operatin

Type Net assets Net profit

name business capital assets revenue g profit

Grain &

Shenzhen oil trading

Cereals processing 1530000 7905807 4005341 5075167 227542 215483330.Subsidiary

Group Co. Grain and 000.00 107.80 666.69 561.24 574.06 97

Ltd oil reserve

service

Shenzhen Grain &

30000000 1008586 10237742 1718389 389379 38938653.0

Flour Co. Subsidiary oil trading.00 902.83 5.79 940.19 75.88 6

Ltd processing

Shenzhen

Hualian

Grain & 10000000 2035583 30964015 1731978 512767 51134582.8

Grain and Subsidiary

oil trading 0.00 513.97 9.40 543.62 18.59 8

Oil Trading

Co. Ltd.Particular about subsidiaries obtained or disposed in report period

√ Applicable □Not applicable

The way of getting and treating Influence on overall product and

Company name

subsidiary in the reporting performance

Dongguan Shenliang Hualian Grain &

Establishment No operating business has occurred yet

oil trading Co. Ltd.Explanation on main holding/stock-jointly enterprise:

Shenzhen Cereals Group Co. Ltd: general business items: 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); storage (operated by branches); development operation and management of free property; providing

management services for hotels; investing and setting up industries (specific projects are separately declared);

domestic trade; engaging in import and export business; E-commerce and information construction; and grain

circulation service. Licensed business items: the following projects shall be operated only with the relevant

examination and approval documents if they are involved in obtaining approval: information services (internet

information service only); general freight professional transport (refrigerated preservation). Register capital was

1530000000.00 Yuan. Ended as this period total assets amounted as 7905807107.80 Yuan and net assets

amounting to 4005341666.69 Yuan shareholders’ equity attributable to parent Company is 3816559564.40

Yuan; in the reporting period achieved operation revenue net profit and net profit attributable to shareholder of

parent Company as 5075167561.24 Yuan 215483330.97Yuan and 213542280.46 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 30000000.00 Yuan. Ended as this period total assets amounted

as 1008586902.83 Yuan and net assets amounting to 102377425.79 Yuan shareholders’ equity attributable to

parent Company is 102377425.79 Yuan; in the reporting period achieved operation revenue net profit and net

profit attributable to parent Company as 1718389940.19 Yuan 38938653.06 Yuan and 38938653.06 Yuan

respectively.Shenzhen Hualian Grain and Oil Trading Co. Ltd.: Business scope: general business items: 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); Licensed business items: purchase and sale of

grain and oil online sales of grain and oil; information service business (internet information service business

only). Register capital was 100000000.00 Yuan. Ended as this period total assets amounted as 2035583513.97

Yuan and net assets amounting to 309640159.40 Yuan shareholders’ equity attributable to parent Company is

286114190.37 Yuan;in the reporting period achieved operation revenue net profit and net profit attributable to

parent Company as 1731978543.62 Yuan 51134582.88 Yuan and 51816675.78 Yuan respectively.IX. Structured vehicle controlled by the Company

□ Applicable√Not applicable

X. Risks and countermeasures

1. The risk of the impact of the COVID-19 epidemic

Since year of 2020 the global spread of the COVID-19 epidemic has affected macroeconomic operations to

varying degrees. Judging from the current situation although the domestic epidemic has occurred sporadically the

overall situation has been brought under control. The overseas epidemic still has the risk of instability making the

economy unpredictable and uncertain which may affect the company's production trade and industrial supply

chain. The epidemic has caused increases in various costs such as raw material costs labor costs and logistics

costs. In response to this risk the company will unswervingly do a good job of epidemic prevention and strictly

implement various epidemic prevention measures to ensure the orderly production and operation of the company.2. Food safety risk

On the one hand our country is paying more and more attention to food safety and strengthening the supervision.On the other hand consumers’ awareness of food safety and rights protection is also increasing. Food safety has

become the industry’s number one risk especially after the COVID-19 epidemic consumers' attention to food

safety and cleanliness is rapidly increasing in the short term and put forward higher requirements for food

hygiene and safety.The company has always regarded food quality and safety as the most important core work. The first is to strictly

implement laws and regulations related to national food safety and assume the social responsibility of supplying

high-quality and safe food to the market. The second is to strengthen the quality of raw materials and strengthen

quality control from the source. The third is to strengthen production management standardize production

operations and implement quality responsibilities. The fourth is to strengthen staff's operating skills and safety

awareness training to prevent product quality accidents caused by non-standard operations or weak food safety

awareness. The fifth is to continuously improve product quality assurance level through technological

transformation and technological progress. The sixth is to strengthen product transportation and storage

management to prevent secondary pollution of products.3. Raw material fluctuation risk

On the one hand with the implementation of the quantitative easing policy of the US dollar and major currencies

in the world the speculative nature and hedging preferences of capital will cause social funds to flow into the bulk

commodity sector which will lead to violent fluctuations in domestic and foreign bulk commodity prices. On the

other hand with the outbreak of the COVID-19 epidemic most countries' controls on the export of agricultural

products will have a major impact on prices; at the same time the epidemic will also affect the normal operation

of the supply chain in various regions and have a direct impact on the supply of bulk agricultural and sideline

products.The company will actively respond to the risk of adverse effects of price fluctuations on the company's operations

through measures such as strengthening market forecasts establishing strategic cooperation optimizing supply

management and using refined management to improve utilization.4. Risk of intensified market competition

As a representative enterprise of regional grain oil and food business compared with central enterprises and large

multinational grain oil and food enterprises the company still has a certain gap in scale and brand awareness. In

the future the competition in the grain oil and food industry will become more intense if the company cannot

effectively promote its own brand and broaden its marketing channels it may face greater risks when market

competition intensifies.In response to possible market and business risks on the one hand the company makes overall plans for the year's

procurement carefully optimizes procurement channels and ensures sufficient grain supply and orderly supply.On the other hand the company continues to strengthen communication with upstream and downstream

customers in the industry chain vigorously expands sales channels focuses on customer needs deepens brand and

service and enhances the company's brand value and competitiveness.5. M&A integration risks

The company carries out investment and M&A projects in accordance with its development strategy. Whether the

M&A project can form synergy with the original business and whether the integration of corporate culture and

management methods is in place during the critical period of integration of mergers and acquisitions are the key to

the realization of the company’s strategic goals. Inadequate management and control can easily lead to merger and

acquisition risks.The company will take the following measures to prevent risks the first is to pay attention to the operation of the

merged company and the integrating degree with the company's development strategy and correct deviations in a

timely manner; the second is to pay attention to the synergy between the merged company and the company's

existing industry and coordinate the deployment of resources in a timely manner; the third is to gradually realize

the integration of systems and cultures; the fourth is to increase performance improvement and innovation

incentives and assessments for mergers and acquisitions and continuously adjust incentive policies that are

compatible with operations.Section IV Corporate Governance

I. Annual General Meeting and extraordinary shareholders general meeting held in this

period

1. AGM in the period

Investor

Sessions Type Opening date Disclosure date Resolutions

participation (%)

Resolution Notice

of AGM 2020 of

Shenzhen Cereals

Holdings Co. Ltd.2020 Annual (Notice No.:

AGM 72.05% 2021-05-18 2021-05-19

general meeting 2021-14) released

on Juchao website

(www.cninfo.com.cn) dated 19 May2021

2. Request for extraordinary general meeting by preferred stockholders whose voting rights restore

□ Applicable √ Not applicable

II. Changes of directors supervisors and senior executives

√ Applicable □ Not applicable

Name Position Type Date Causes

Jin Zhenyuan CFO Dismiss 2021-07-16 Job transfer

Jin Zhenyuan Director Outgoing 2021-07-16 Job transfer

Lu Yuhe CFO Appointment 2021-07-16 Appointment of the Board of Directors

Lu Yuhe Director Be elected 2021-08-02 Election of the Shareholder Meeting

III. Profit distribution plan and capitalizing of common reserves plan for the Period

□ Applicable √ Not applicable

The Company plans not to carried out distribution of cash dividend bonus shares and share converted from capital reserve either for

the half year

IV. 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.Section V Environmental and Social Responsibility

I. Major environmental protection

The listed Company and its subsidiary whether belong to the key sewage units released from environmental protection department

□Yes √No

Administrative penalties imposed for environmental issues during the reporting period

Impact on the production &

Company/Subsidiar Reasons for Violation Corrective

Penalty results operation of the listed

y penalty situation measures

company

Not

Not applicable Not applicable Not applicable Not applicable Not applicable

applicable

Other environmental information disclosed with reference to the key emission units

The company attached great importance to environmental protection work and each subsidiary has built corresponding

environmental protection facilities according to the actual situation of production and operation to treat waste gas dust waste water

and solid waste generated in the production process so as to make its emissions reach the national and local relevant standards. At

the same time based on its own business characteristics the company’s subsidiaries have formulated a series of rules and regulations

on environmental protection and strictly implemented them to institutionalize and standardize the environmental protection.Reasons for not disclosing other environmental information

The Company and its subsidiaries do not belong to the key emission units announced by the environmental protection department

and there is no other environmental information that needs to be disclosed.II. Social responsibility

2021 is the first year of rural revitalization and a key year for promoting a smooth transition of poverty alleviation

policies and measures and work systems to rural revitalization. In accordance with the document spirit of the

Implementation Opinions on Three-year Targeted Poverty Alleviation in the New Era (Yuefa [2016] No. 13)

issued by Guangdong Provincial Party Committee and Guangdong Provincial Government the working team of

Guilin Village Yidu Town Longchuan County Heyuan City (hereinafter referred to as the "working team in the

village") dispatched by SZCH has completed the targeted poverty alleviation project for Guilin Village and

achieved expected results by the end of 2020 through a series of powerful measures contributing SZCH strength

for winning the battle against poverty as scheduled. In the first half of 2021 in order to consolidate and expand

the achievements of poverty alleviation the working team in the village maintained unabated efforts and worked

hard and did a good job in the finishing touches in a pragmatic and efficient manner so as to make the foundation

of poverty alleviation more stable and the results more sustainable and make solid progress in the effective

connection between targeted poverty alleviation and rural revitalization.To effectively carry out the rural revitalization work according to the relevant work deployment of the provincial

party committee and municipal party committee SZCH and Government Offices Administration of Shenzhen

Meteorological Bureau of Shenzhen Municipality and China Life Insurance Company Ltd. Heyuan Centre

Branch assigned crew and formed a support working in the town (hereinafter referred to as the "working team in

the town") to Tuocheng Town Longchuan County Heyuan City to carry out the support work of rural

revitalization.SZCH has been working hard to provide assistance to Tibet. The second batch of high-quality cadres have been

selected and sent to Chayu Farm in Nyingchi Tibet. We will take good care of cadres assisting Tibet and ensure

their services and support so that they can make more contributions to Tibet. The company donated 200000 yuan

to Chayu Farm to improve the living conditions of farm workers.Section VI Important Events

I. Commitments that the actual controller shareholders related party buyer and the Company have

fulfilled during the reporting period and the overdue commitments as of the end of the reporting period

□ Applicable √Not applicable

There is no commitments that the actual controller shareholders related party buyer and the Company have fulfilled during the

reporting period and the overdue commitments as of the end of the reporting period

II. 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.III. External guarantee against the regulation

□ Applicable √Not applicable

No external guarantee against the regulation occurred in the period

IV. Appointment and non-reappointment (dismissal) of CPA

Whether the financial report has been audited or not

□Yes √No

The financial report has not been audited

V. Explanation from Board of Directors and Supervisory Committee for “Qualified Opinion”

that issued by CPA

□ Applicable √ Not applicable

VI. Explanation from the BOD for “Qualified Opinion” of last year

□ Applicable √ Not applicable

VII. Bankruptcy reorganization

□ Applicable √ Not applicable

No bankruptcy reorganization for the Company in end of this period

VIII. Lawsuits

Significant lawsuits and arbitration

□ Applicable √ Not applicable

No significant lawsuits and arbitration occurred in the reporting period

Other lawsuits

√ Applicable □ Not applicable

Amount

involved Trial result Execution Disclo Discl

Resulted an accrual

Lawsuits (arbitration) (in 10 Progress and of sure osure

liability (Y/N)

thousand influence judgment date index

Yuan)

The Company

As of 30 June 2021 Yes the single loan actively makes

other lawsuits that did contract dispute from use of the After

not meet the subordinate enterprise advantageous comprehen

disclosure standards of the Company is resources of sive

for significant expected to form an internal legal analysis

lawsuits mainly accrual liability of 3.5 affairs and the

including: disputes million yuan external laws outcome of

over purchase and approximately. Other firm to follow up the cases

In Not Not

sales contract lawsuit-related cases and deal with the involved in

13918.9 promoting applica appli

disputes over loans are relatively small in lawsuit-related the

actively ble cable

contract disputes individual amount cases. At present lawsuits

over construction and will not have a the Company is will not

contracts disputes significant impact on responding to and have a

over corporate the Company when dealing with the significant

separation contracts analyzed in cases effectively impact on

and housing lease conjunction with the in accordance the

contract dispute etc. progress of these with relevant Company

cases. laws and

regulations

IX. Penalty and rectification

□ Applicable √Not applicable

No penalty and rectification for the Company in reporting period.X. Integrity of the Company and its controlling shareholders and actual controllers

□ Applicable √Not applicable

XI. Major related transaction

1. Related transaction with routine operation concerned

□ Applicable √ Not applicable

No related transaction occurred in the period with routine operation concerned

2. Assets or equity acquisition and sales of assets and equity

□ Applicable √ Not applicable

No related transaction concerning the asses or equity acquisition and sold in the period

3. Related transaction of foreign investment

□ Applicable √Not applicable

No related transaction of foreign investment occurred in the period

4. Related credits and liabilities

□ Applicable √ Not applicable

No related credits and liabilities occurred in period

5. Transactions with related finance companies and finance companies controlled by the Company

□ Applicable √ Not applicable

No deposits loans credit or other financial operations occurred between the Company and related finance companies the finance

companies controlled by the Company and related parties in the period.6. Other major related transaction

□ Applicable √Not applicable

No other major related transaction in the Period.XII. 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

In 10 thousand Yuan

External Guarantee (not including guarantees to subsidiaries)

Count

Name of Related er Comple Guaran

Actual

the Announc Actual

Guarante date of Guarante Collateral guara

te tee for

Guarant

Company ement guarantee implem related

e limit happenin e type ee term

guarantee disclosur limit (if any) ntee entation party

g

d e date (if or not (Y/N)

any)

Guarantee for the subsidiaries

Count

Name of Related er Comple Guaran

Actual

the Announc Actual Collateral guara te tee for Guarante date of Guarante Guarant

Company ement guarantee implem related

e limit happenin e type ee term

guarantee disclosur limit (if any) ntee entation party

g

d e date (if or not (Y/N)

any)

Guarantee of the subsidiaries for the subsidiaries

Name of Related Count Comple Guaran

Actual

the Announc Actual

Guarante date of Guarante Collateral er

te tee for

Guarant

Company ement guarantee implem related

e limit happenin e type ee term

guarantee disclosur limit (if any) guara entation party

g

d e date ntee or not (Y/N)

(if

any)

Donggua

Joint and

n

2015-07- several

Shenliang 27300 14502 N/A N 8-year N N

13 liability

Logistics

guarantee

Co. Ltd.Donggua

Joint and

n

2016-12- several

Shenliang 10200 2918 N/A N 5-year N N

21 liability

Logistics

guarantee

Co. Ltd.Donggua

n

Internatio

Joint and

nal Food

2018-07- several

Industrial 39168 31216 N/A N 14-year N N

27 liability

Park

guarantee

Develop

ment Co.Ltd.Donggua

Joint and

n

2020-10- several

Shenliang 21930 1935 N/A N 14-year N N

20 liability

Logistics

guarantee

Co. Ltd.Donggua

n

Joint and

Shenliang

2019-04- several

Oil & 11883 4584 N/A N 8-year N N

19 liability

Food

guarantee

Trade

Co. Ltd.Total amount of Total amount of actual

approving guarantee occurred guarantee for

82300 659

for subsidiaries in subsidiaries in report

report period (C1) period (C2)

Total amount of Total balance of actual

approved guarantee guarantee for

for subsidiaries at the 192781 subsidiaries at the end 55155

end of reporting of reporting period

period (C3) (C4)

Total amount of guarantee of the Company (total of three above mentioned guarantee)

Total amount of actual

Total amount of approving

occurred guarantee in

guarantee in report period 82300 659

report period

(A1+B1+C1)

(A2+B2+C3)

Total balance of actual

Total amount of approved

guarantee at the end of

guarantee at the end of report 192781 55155

report period

period (A3+B3+C2)

(A4+B4+C4)

The proportion of the total amount of actually

guarantee in the net assets of the Company (that 12.40%

is A4+ B4+C4)

Including:

Balance of the guarantee provided for

shareholder actual controller and their related 0

parties (D)

The debts guarantee amount provided for the

guaranteed parties whose assets-liability ratio 50571

exceed 70% directly or indirectly (E)

Proportion of total amount of guarantee in net0

assets of the Company exceed 50% (F)

Total amount of the aforesaid three guarantees50571

(D+E+F)

Explanations on possibly bearing joint and

several liquidating responsibilities for undue N/A

guarantees (if applicable)

Explanations on external guarantee against

N/A

regulated procedures (if applicable)

Explanation on guarantee with composite way

N/A

3.Trust financing

√ Applicable □ Not applicable

In 10 thousand Yuan

Impairment

amount accrual

Type Fund sources Amount occurred Undue balance Overdue amount for overdue

financial

management

Bank financial

Owned Funds 29000 2000 0 0

products

Total 29000 2000 0 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

4. Material contracts for daily operations

□ Applicable √Not applicable

5. Other material contracts

□ Applicable √ Not applicable

No other material contracts in the period.XIII. Explanation of other important events

√ Applicable □ Not applicable

1. Changes in directors supervisor and senior executives

On July 16 2021 the company received a written resignation from Ms. Jin Zhenyuan a director and the Chief

Financial Officer of the company. Due to job transfer Ms. Jin Zhenyuan applied to resign from her position as

th

director and chief financial officer of the company. On the same day the company held the 16 meeting of the

tenth board of directors deliberated and approved the Proposal on the Appointment of the Company's Chief

Financial Officer and the Proposal on the Addition of the Company's Directors and agreed to appoint Ms. Lu

Yuhe as the company's chief financial officer for a term from the date of the approval of the board of directors to

the expiration of the tenth board of directors; agreed to add Ms. Lu Yuhe as a director of the tenth board of

directors of the company and submit it to the shareholders' meeting for approval. For details see the

Announcement of Resolutions of the 16th Meeting of the Tenth Board of Directors of the Company and the

Announcement of Resignation of Directors and Chief Financial Officer of the Company and Appointment of

Chief Financial Officer of the Company and the Addition of Directors of the Company published at

www.cninfo.com.cn on July 17 2021.The company held the first extraordinary shareholders' meeting of 2021 on August 2 2021 which deliberated and

approved the Proposal on the Addition of Directors of the Company and agreed to add Ms. Lu Yuhe as a director

of the tenth board of directors of the company. The term of office shall be from the date of approval of the

resolution at the shareholders' meeting of the company to the date of expiration of the tenth board of directors of

the company. For details see the Announcement of the Resolutions of the Company's First Extraordinary General

Meeting of Shareholders in 2021 published at www.cninfo.com.cn on August 3 2021.XIV. Important events from subsidiaries

√ Applicable □ Not applicable

1. The company held the 15th meeting of the tenth board of directors on June 1 2021 which deliberated and

approved the Proposal on the Company's Acquisition of 49% Equity of Dongguan Shenliang Logistics Co. Ltd.and agreed that the company acquires the 49% equity of Dongguan Shenliang Logistics Co. Ltd. held by

Dongguan Fruits and Vegetables and Non-staple Food Trading Market Co. Ltd. in cash the purchase price was

th

321.68 million yuan. For details see the "Announcement of Resolutions of the 15 Meeting of the Tenth Board of

Directors of the Company" and the "Announcement of the Company on the Acquisition of 49% Equity of

Dongguan Shenliang Logistics Co. Ltd." published at www.cninfo.com.cn on June 2 2021.th

2. The company held the 16 meeting of the tenth board of directors on July 16 2021 and the first extraordinary

shareholders’ meeting on August 2 2021 which deliberated and approved the "Proposal on the Consolidation and

Merger of Shenzhen Shenbao Technology Center Co. Ltd. agreed to the company’s consolidation and merger of

the wholly-owned subsidiary of Shenzhen Shenbao Technology Center Co. Ltd. For details please see the

th

Announcement of Resolutions of the 16 Meeting of the Tenth Board of Directors of the Company and the

Announcement of the Company’s Consolidation and Merger of Shenzhen Shenbao Technology Center Co. Ltd.published at www.cninfo.com.cn on July 17 2021 and the Announcement of Resolutions of the Company’s First

Extraordinary Shareholders’ Meeting in 2021 published at www.cninfo.com.cn on August 3 2021.3. On July 22 2021 the company acquired 51% of the equity of Wuhan Jiacheng biotechnology Co.Ltd in cash

with the purchase price of 21675000 yuan. After the completion of the acquisition the Company held a total of

51% of the equity of Wuhan Jiasheng biotechnology Co. Ltd.Section VII. Changes in Shares and Particulars about Shareholders

I. Changes in Share Capital

1. Changes in Share Capital

In Share

Before the Change Increase/Decrease in the Change (+ -) After the Change

Public

Bon

New reserve

Proporti us Oth Subt Proporti

Amount shares transfer Amount

on shar ers otal on

issued into share

es

capital

I. Restricted shares 684601142 59.40% 0 0 0 0 0 684601142 59.40%

1. State-owned shares 0 0.00% 0 0 0 0 0 0 0.00%

2. State-owned legal

684569567 59.40% 0 0 0 0 0 684569567 59.40%

person’s shares

3. Other domestic

31575 0.00% 0 0 0 0 0 31575 0.00%

shares

Including: Domestic

0 0.00% 0 0 0 0 0 0 0.00%

legal person’s shares

Domestic natural

31575 0.00% 0 0 0 0 0 31575 0.00%

person’s shares

4. Foreign shares 0 0.00% 0 0 0 0 0 0 0.00%

Including: Foreign

0 0.00% 0 0 0 0 0 0 0.00%

legal person’s shares

Foreign natural

0 0.00% 0 0 0 0 0 0 0.00%

person’s shares

II. Unrestricted shares 467934112 40.60% 0 0 0 0 0 467934112 40.60%

1. RMB ordinary

416184832 36.11% 0 0 0 0 0 416184832 36.11%

shares

2. Domestically listed

51749280 4.49% 0 0 0 0 0 51749280 4.49%

foreign shares

3. Overseas listed

0 0.00% 0 0 0 0 0 0 0.00%

foreign shares

4. Others 0 0.00% 0 0 0 0 0 0 0.00%

III. Total shares 1152535254 100.00% 0 0 0 0 0 1152535254 100.00%

Reasons for share changed

□ Applicable √ Not applicable

Approval of share changed

□ Applicable √ Not applicable

Ownership transfer of share changed

□ Applicable √ Not applicable

Progress of shares buy-back

□ Applicable √ Not applicable

Implementation progress of reducing holdings of shares buy-back 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

Other information necessary to disclose or need to disclosed under requirement from security regulators

□ Applicable √ Not applicable

2. Changes of lock-up stocks

□ Applicable √ Not applicable

II. Securities issuance and listing

□ Applicable √ Not applicable

III. Amount of shareholders of the Company and particulars about shares holding

In Share

Total common stock Total preference shareholders with voting rights

shareholders in reporting 55886 recovered at end of reporting period (if 0

period-end applicable) (see note 8)

Particulars about common shares held above 5% by shareholders or top ten common shareholders

Information

of shares

Amount of

Amount of pledged

Proport common Amount of

Changes common tagged or

Nature of ion of shares held restricted

Full name of Shareholders in report shares held frozen

shareholder shares at the end of common

period without State

held reporting shares held Am

restriction of

period oun

shar

t

e

Shenzhen Food Materials State-owned 63.79% 735237253 0 669184735 66052518

Group Co. Ltd legal person

Shenzhen Agricultural State-owned

8.23% 94832294 0 15384832 79447462

Products Group Co. Ltd legal person

Dongguan Fruit Vegetable Domestic

Non-staple Food Trading non-state 0.54% 6198236 6198236 0 6198236

Market Co. Ltd. legal person

Domestic

Lin Junbo nature 0.31% 3600000 33300 0 3600000

person

Domestic

Sun Huiming nature 0.30% 3436462 0 0 3436462

person

Domestic

Chen Jiuyang nature 0.27% 3086700 342000 0 3086700

person

Domestic

Xu Wenxing nature 0.18% 2056925 6545 0 2056925

person

Domestic

Hu Xiangzhu nature 0.12% 1380000 -183000 0 1380000

person

Domestic

Xu Zhifeng nature 0.10% 1166000 1166000 0 1166000

person

Domestic

Wang Lianyi nature 0.10% 1152200 1152200 0 1152200

person

Strategy investor or general legal person

becoming the top 10 common shareholders

N/A

by placing new shares (if applicable) (see

note 3)

Shenzhen SASAC directly holds 100% equity of Shenzhen Food Materials Group

Co. Ltd. and holds 34% of Shenzhen Agricultural Products Group Co. Ltd.Explanation on associated relationship indirectly through Shenzhen Food Materials Group Co. Ltd.; the Company was

among the aforesaid shareholders 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.Description of the above shareholders in

relation to delegate/entrusted voting rights N/A

and abstention from voting rights.Special note on the repurchase account

among the top 10 shareholders (if N/A

applicable) (see note 11)

Particular about top ten shareholders with un-lock up common stocks held

Amount of common shares held without Type of shares

Shareholders’ name

restriction at Period-end Type Amount

Shenzhen Agricultural Products Group RMB common

79447462 79447462

Co. Ltd shares

RMB common

Shenzhen Food Materials Group Co. Ltd 66052518 66052518

shares

Dongguan Fruit Vegetable Non-staple RMB common

6198236 6198236

Food Trading Market Co. Ltd. shares

RMB common

Lin Junbo 3600000 3600000

shares

Domestically

Sun Huiming 3436462 listed foreign 3436462

shares

RMB common

Chen Jiuyang 3086700 3086700

shares

RMB common

Xu Wenxing 2056925 2056925

shares

RMB common

Hu Xiangzhu 1380000 1380000

shares

RMB common

Xu Zhifeng 1166000 1166000

shares

RMB common

Wang Lianyi 1152200 1152200

shares

Shenzhen SASAC directly holds 100% equity of Shenzhen Food Materials Group

Expiation on associated relationship or

Co. Ltd. and holds 34% of Shenzhen Agricultural Products Group Co. Ltd.consistent actors within the top 10 un-lock

indirectly through Shenzhen Food Materials Group Co. Ltd.; the Company was

up common shareholders and between top

not aware of any related relationship between other shareholders above and

10 un-lock up common shareholders and

whether they belonged to parties acting in concert as defined by the Acquisition

top 10 common shareholders

Management Method of Listed Company.1. At the end of reporting period Shareholder – Lin Junbo holds 3600000 shares

of the Company under customer credit trading secured securities account through

Explanation on top 10 common China Merchants Securities Co. Ltd. common account holds 0 shares and

shareholders involving margin business (if 3600000 shares are held in total at end of the Period. During the reporting period

applicable) (see note 4) the credit trading secured securities account has 3600000 shares increased and

shares held in the common account has 3566700 shares decreased shares held are

increased 33300 shares in total.2. At the end of reporting period Shareholder – Xu Zhifeng holds 1146000 shares

of the Company under customer credit trading secured securities account through

Nanjing Securities Co. Ltd. common account holds 20000 shares and 1166000

shares are held in total at end of the Period. During the reporting period the credit

trading secured securities account has 1146000 shares increased and shares held

in the common account has 20000 shares increased shares held are increased

1166000 shares in total.3. At the end of reporting period Shareholder – Wang Lianyi holds 1152200

shares of the Company under customer credit trading secured securities account

through Industrial Securities Co. Ltd. common account holds 0 shares and

1152200 shares are held in total at end of the Period. During the reporting period

the credit trading secured securities account has 1152200 shares increased and no

change in the common account shares held are increased 1152200 shares in total.Whether top ten common stock shareholders or top ten common stock shareholders with un-lock up 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-lock up shares held of the Company have no

buy-back agreement dealing in reporting period.IV. Changes of shares held by directors supervisors and senior executives

□ Applicable √ Not applicable

Shares held by directors supervisors and senior executives have no changes in reporting period found more details in Annual Report

2020.V. Changes in controlling shareholders or actual controllers

Change of controlling shareholder during the reporting period

□ Applicable √ Not applicable

The Company had no change of controlling shareholder during the reporting period

Change of actual controller during the reporting period

□ Applicable √ Not applicable

The Company had no change of actual controller during the reporting period

Section VIII. Preferred Stock

□ Applicable √ Not applicable

The Company had no preferred stock in the Period.Section IX. Corporate Bonds

□ Applicable √ Not applicable

Section X. Financial Report

I. Audit report

Whether the semi annual report is audited

□ Yes √ No

The company's semi annual financial report has not been audited

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/CNY

Item June 30 2021 December 31 2020

Current assets:

Monetary funds 68774083.11 190494225.94

Settlement provisions

Capital lent

Trading financial assets 910778.83 160621806.51

Derivative financial assets

Note receivable 694376.00 2213426.00

Account receivable 712441439.01 198311102.17

Receivable financing

Accounts paid in advance 75748406.57 27136263.84

Insurance receivable

Reinsurance receivables

Contract reserve of reinsurance

receivable

Other account receivable 18588482.62 22631043.66

Including: Interest receivable

Dividend receivable

Buying back the sale of financial

assets

Inventories 4130250968.86 3418328974.27

Contract assets

Assets held for sale

Non-current asset due within one

year

Other current assets 126719728.35 119750603.31

Total current assets 5134128263.35 4139487445.70

Non-current assets:

Loans and payments on behalf

Debt investment

Other debt investment

Long-term account receivable

Long-term equity investment 73655327.51 73215147.84

Investment in other equity

instrument

Other non-current financial

57500.00 57500.00

assets

Investment real estate 244847354.37 253037899.57

Fixed assets 1339305491.07 1122692490.55

Construction in progress 868979194.24 1045643295.57

Productive biological asset 382848.00 387694.20

Oil and gas asset

Right-of-use assets 89811269.93

Intangible assets 606551066.68 599306223.04

Expense on Research and

Development

Goodwill

Long-term expenses to be

29232611.11 31732325.01

apportioned

Deferred income tax asset 41450382.72 41347952.12

Other non-current asset 1335915.84 2476174.33

Total non-current asset 3295608961.47 3169896702.23

Total assets 8429737224.82 7309384147.93

Current liabilities:

Short-term loans 1212686540.73 110318727.12

Loan from central bank

Capital borrowed

Trading financial liability

Derivative financial liability

Note payable

Account payable 703173288.94 480896517.64

Accounts received in advance 4961036.19 3376262.66

Contract liability 149884356.62 108975866.82

Selling financial asset of

repurchase

Absorbing deposit and interbank

deposit

Security trading of agency

Security sales of agency

Wage payable 232853211.08 260514559.66

Taxes payable 29684001.70 66904735.29

Other account payable 438040855.78 397325719.50

Including: Interest payable

Dividend payable 2933690.04 2933690.04

Commission charge and

commission payable

Reinsurance payable

Liability held for sale

Non-current liabilities due

137873648.25 104225183.07

within one year

Other current liabilities 7250420.68

Total current liabilities 2909156939.29 1539787992.44

Non-current liabilities:

Insurance contract reserve

Long-term loans 805594327.98 841864531.75

Bonds payable

Including: Preferred stock

Perpetual capital

securities

Lease liability 91245488.14

Long-term account payable 17023270.19 16126146.20

Long-term wages payable

Accrual liability 3500000.00 3500000.00

Deferred income 103098943.07 100710038.32

Deferred income tax liabilities 11943176.43 12150035.13

Other non-current liabilities

Total non-current liabilities 1032405205.81 974350751.40

Total liabilities 3941562145.10 2514138743.84

Owner’s equity:

Share capital 1152535254.00 1152535254.00

Other equity instrument

Including: Preferred stock

Perpetual capital

securities

Capital public reserve 1262320013.74 1422892729.36

Less: Inventory shares

Other comprehensive income

Reasonable reserve

Surplus public reserve 382367575.37 382367575.37

Provision of general risk

Retained profit 1650876264.99 1637536441.03

Total owner’ s equity attributable to

4448099108.10 4595331999.76

parent company

Minority interests 40075971.62 199913404.33

Total owner’ s equity 4488175079.72 4795245404.09

Total liabilities and owner’ s equity 8429737224.82 7309384147.93

Legal Representative: Zhu Junming

Person in charge of accounting works: Lu Yuhe

Person in charge of accounting institute: Wen Jieyu

2. Balance Sheet of Parent Company

In RMB/CNY

Item June 30 2021 December 31 2020

Current assets:

Monetary funds 5854664.28 5312806.71

Trading financial assets 910778.83 621806.51

Derivative financial assets

Note receivable

Account receivable 364150328.77 4087681.18

Receivable financing

Accounts paid in advance

Other account receivable 824833488.88 892105968.23

Including: Interest receivable

Dividend

390000000.00 390000000.00

receivable

Inventories

Contract assets

Assets held for sale

Non-current assets maturing

within one year

Other current assets 11817926.97 1497597.50

Total current assets 1207567187.73 903625860.13

Non-current assets:

Debt investment

Other debt investment

Long-term receivables

Long-term equity investments 4029394425.09 3707714425.09

Investment in other equity

instrument

Other non-current financial

assets

Investment real estate 16750708.90 16986504.04

Fixed assets 32539655.72 33125275.65

Construction in progress 493682.75

Productive biological assets 382848.00 387694.20

Oil and natural gas assets

Right-of-use assets

Intangible assets 16781499.47 12842693.98

Research and development costs

Goodwill

Long-term deferred expenses 966458.94 1040708.20

Deferred income tax assets

Other non-current assets

Total non-current assets 4097309278.87 3772097301.16

Total assets 5304876466.60 4675723161.29

Current liabilities:

Short-term borrowings 312629623.82

Trading financial liability

Derivative financial liability

Notes payable

Account payable

Accounts received in advance

Contract liability 411.00 411.00

Wage payable 35530964.43 26535794.31

Taxes payable 3625912.04 2736075.65

Other accounts payable 545254132.00 45560514.82

Including: Interest payable

Dividend payable

Liability held for sale

Non-current liabilities due

within one year

Other current liabilities

Total current liabilities 897041043.29 74832795.78

Non-current liabilities:

Long-term loans

Bonds payable

Including: Preferred stock

Perpetual capital

securities

Lease liability

Long-term account payable

Long term employee

compensation payable

Accrued liabilities 3500000.00 3500000.00

Deferred income

Deferred income tax liabilities

Other non-current liabilities

Total non-current liabilities 3500000.00 3500000.00

Total liabilities 900541043.29 78332795.78

Owners’ equity:

Share capital 1152535254.00 1152535254.00

Other equity instrument

Including: Preferred stock

Perpetual capital

securities

Capital public reserve 3018106568.27 3018106568.27

Less: Inventory shares

Other comprehensive income

Special reserve

Surplus reserve 109963147.23 109963147.23

Retained profit 123730453.81 316785396.01

Total owner’s equity 4404335423.31 4597390365.51

Total liabilities and owner’s equity 5304876466.60 4675723161.29

3. Consolidated Profit Statement

In RMB/CNY

Item 2021 semi-annual 2020 semi-annual

I. Total operating income 5262189180.53 4740428222.10

Including: Operating income 5262189180.53 4740428222.10

Interest income

Insurance gained

Commission charge and

commission income

II. Total operating cost 4901525013.61 4448897391.27

Including: Operating cost 4650397070.67 4219403828.80

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 6969279.85 4334418.54

Sales expense 106711776.77 109796698.11

Administrative expense 109316093.65 101838460.53

R&D expense 10926018.15 7368772.68

Financial expense 17204774.52 6155212.61

Including: Interest

15362400.04 7410693.33

expenses

Interest

765002.68 1735133.50

income

Add: Other income 4891929.30 10824560.17

Investment income (Loss is

3501371.30 10249064.30

listed with “-”)

Including: Investment

income on affiliated company and joint 440179.67 366989.43

venture

The termination of

income recognition for financial assets

measured by amortized cost

Exchange income (Loss is

listed with “-”)

Net exposure hedging

income (Loss is listed with “-”)

Income from change of fair

288972.32 -572784.42

value (Loss is listed with “-”)

Loss of credit impairment

34157.37 1791966.35

(Loss is listed with “-”)

Losses of devaluation of

-111448173.12 -95290043.04

asset (Loss is listed with “-”)

Income from assets disposal

8318.64 -10598.38

(Loss is listed with “-”)

III. Operating profit (Loss is listed with

257940742.73 218522995.81

“-”)

Add: Non-operating income 1627702.56 1358799.58

Less: Non-operating expense 403164.30 5186666.30

IV. Total profit (Loss is listed with “-”) 259165280.99 214695129.09

Less: Income tax expense 13407354.56 2465268.63

V. Net profit (Net loss is listed with

245757926.43 212229860.46

“-”)

(i) Classify by business continuity

1.continuous operating net profit

245757926.43 212229860.46(net loss listed with ‘-”)

2.termination of net profit (netloss listed with ‘-”)

(ii) Classify by ownership

1.Net profit attributable to

243846874.76 210738686.12

owner’s of parent company

2.Minority shareholders’ gains

1911051.67 1491174.34

and losses

VI. Net after-tax of other

comprehensive income

Net after-tax of other comprehensive

income attributable to owners of parent

company

(I) Other comprehensive income

items which will not be reclassified

subsequently to profit of loss

1.Changes of the defined

benefit plans that re-measured

2.Other comprehensive

income under equity method that

cannot be transfer to gain/loss

3.Change of fair value of

investment in other equity instrument

4.Fair value change of

enterprise's credit risk

5. Other

(ii) Other comprehensive income

items which will be reclassified

subsequently to profit or loss

1.Other comprehensive

income under equity method that can

transfer to gain/loss

2.Change of fair value of

other debt investment

3.Amount of financial

assets re-classify to other

comprehensive income

4.Credit impairment

provision for other debt investment

5.Cash flow hedging

reserve

6.Translation differences

arising on translation of foreign

currency financial statements

7.Other

Net after-tax of other comprehensive

income attributable to minority

shareholders

VII. Total comprehensive income 245757926.43 212229860.46

Total comprehensive income

attributable to owners of parent 243846874.76 210738686.12

Company

Total comprehensive income

1911051.67 1491174.34

attributable to minority shareholders

VIII. Earnings per share:

(i) Basic earnings per share 0.2116 0.1828

(ii) Diluted earnings per share 0.2116 0.1828

Enterprise combine under the same control in the Period the combined party realized net profit of 0 Yuan before combination and

realized 0 Yuan at last period for combined party.Legal Representative: Zhu Junming

Person in charge of accounting works: Lu Yuhe

Person in charge of accounting institute: Wen Jieyu

4. Profit Statement of Parent Company

In RMB/CNY

Item Semi-annual of 2021 Semi-annual of 2020

I. Operating income 78409527.17 191007.09

Less: Operating cost 235795.14 250130.28

Taxes and surcharge 443112.63 115899.05

Sales expenses 1557.53

Administration expenses 40040419.50 27299132.94

R&D expenses

Financial expenses 893183.83 -137521.80

Including: Interest

1145171.80

expenses

Interest

285480.74 131202.58

income

Add: Other income 169161.92 994791.02

Investment income (Loss is

567166.06 392812575.88

listed with “-”)

Including: Investment

income on affiliated Company and -48505.63

joint venture

The termination of

income recognition for financial

assets measured by amortized cost

(Loss is listed with “-”)

Net exposure hedging

income (Loss is listed with “-”)

Changing income of fair

288972.32 -572784.42

value (Loss is listed with “-”)

Loss of credit impairment

-220207.77 -204763.50

(Loss is listed with “-”)

Losses of devaluation of

asset (Loss is listed with “-”)

Income on disposal of

assets (Loss is listed with “-”)

II. Operating profit (Loss is listed

37602108.60 365691628.07

with “-”)

Add: Non-operating income 357590.00

Less: Non-operating expense 150000.00 5090000.00

III. Total Profit (Loss is listed with

37452108.60 360959218.07

“-”)

Less: Income tax

IV. Net profit (Net loss is listed with

37452108.60 360959218.07

“-”)

(i) continuous operating net

37452108.60 360959218.07profit (net loss listed with ‘-”)

(ii) termination of net profit (netloss listed with ‘-”)

V. Net after-tax of other

comprehensive income

(i) Other comprehensive income

items which will not be reclassified

subsequently to profit of loss

1.Changes of the defined

benefit plans that re-measured

2.Other comprehensive

income under equity method that

cannot be transfer to gain/loss

3.Change of fair value of

investment in other equity instrument

4.Fair value change of

enterprise's credit risk

5. Other

(ii) Other comprehensive income

items which will be reclassified

subsequently to profit or loss

1.Other comprehensive

income under equity method that can

transfer to gain/loss

2.Change of fair value of

other debt investment

3.Amount of financial

assets re-classify to other

comprehensive income

4.Credit impairment

provision for other debt investment

5.Cash flow hedging

reserve

6.Translation differences

arising on translation of foreign

currency financial statements

7.Other

VI. Total comprehensive income 37452108.60 360959218.07

VII. Earnings per share:

(i) Basic earnings per share

(ii) Diluted earnings per share

5. Consolidated Cash Flow Statement

In RMB/CNY

Item Semi-annual of 2021 Semi-annual of 2020

I. Cash flows arising from operating

activities:

Cash received from selling

commodities and providing labor 4872625307.71 4851380535.76

services

Net increase of customer deposit

and interbank deposit

Net increase of loan from central

bank

Net increase of capital borrowed

from other financial institution

Cash received from original

insurance contract fee

Net cash received from

reinsurance business

Net increase of insured savings

and investment

Cash received from interest

commission charge and commission

Net increase of capital borrowed

Net increase of returned business

capital

Net cash received by agents in

sale and purchase of securities

Write-back of tax received 15314266.13 2634408.13

Other cash received concerning

509043498.66 440707293.21

operating activities

Subtotal of cash inflow arising from

5396983072.50 5294722237.10

operating activities

Cash paid for purchasing

commodities and receiving labor 5229031194.26 4653349386.89

service

Net increase of customer loans

and advances

Net increase of deposits in

central bank and interbank

Cash paid for original insurance

contract compensation

Net increase of capital lent

Cash paid for interest

commission charge and commission

Cash paid for bonus of guarantee

slip

Cash paid to/for staff and

158496287.47 149264002.51

workers

Taxes paid 108750086.71 37068103.68

Other cash paid concerning

591977655.39 445430382.87

operating activities

Subtotal of cash outflow arising from

6088255223.83 5285111875.95

operating activities

Net cash flows arising from operating

-691272151.33 9610361.15

activities

II. Cash flows arising from investing

activities:

Cash received from recovering

270000000.00 464500000.00

investment

Cash received from investment

3051423.05 7544998.92

income

Net cash received from disposal

of fixed intangible and other 17565.00 19988.32

long-term assets

Net cash received from disposal

of subsidiaries and other units

Other cash received concerning

54336.41 337500.00

investing activities

Subtotal of cash inflow from

273123324.46 472402487.24

investing activities

Cash paid for purchasing fixed

98438615.15 156742240.20

intangible and other long-term assets

Cash paid for investment 120006966.66 385000000.00

Net increase of mortgaged loans

Net cash received from

321680000.00

subsidiaries and other units obtained

Other cash paid concerning

109602.00 994317.84

investing activities

Subtotal of cash outflow from

540235183.81 542736558.04

investing activities

Net cash flows arising from investing

-267111859.35 -70334070.80

activities

III. Cash flows arising from financing

activities:

Cash received from absorbing

490000.00

investment

Including: Cash received from

absorbing minority shareholders’

investment by subsidiaries

Cash received from loans 2006423247.45 833803914.65

Other cash received concerning

financing activities

Subtotal of cash inflow from

2006913247.45 833803914.65

financing activities

Cash paid for settling debts 907763968.37 558227673.50

Cash paid for dividend and

262471931.68 256130248.31

profit distributing or interest paying

Including: Dividend and profit

of minority shareholder paid by

subsidiaries

Other cash paid concerning

58702.23

financing activities

Subtotal of cash outflow from 1170235900.05 814416624.04

financing activities

Net cash flows arising from financing

836677347.40 19387290.61

activities

IV. Influence on cash and cash

equivalents due to fluctuation in -13479.55 18647.57

exchange rate

V. Net increase of cash and cash

-121720142.83 -41317771.47

equivalents

Add: Balance of cash and cash

190494225.94 154954757.85

equivalents at the period -begin

VI. Balance of cash and cash

68774083.11 113636986.38

equivalents at the period -end

6. Cash Flow Statement of Parent Company

In RMB/CNY

Item Semi-annual of 2021 Semi-annual of 2020

I. Cash flows arising from operating

activities:

Cash received from selling

commodities and providing labor 826505.31 124032.00

services

Write-back of tax received 103987.33

Other cash received concerning

664855399.05 279260229.55

operating activities

Subtotal of cash inflow arising from

665681904.36 279488248.88

operating activities

Cash paid for purchasing

commodities and receiving labor 45000000.00 12742.23

service

Cash paid to/for staff and

25664475.70 15199812.23

workers

Taxes paid 1938500.47 1392555.04

Other cash paid concerning

337740658.17 27911182.13

operating activities

Subtotal of cash outflow arising from

410343634.34 44516291.63

operating activities

Net cash flows arising from operating

255338270.02 234971957.25

activities

II. Cash flows arising from investing

activities:

Cash received from recovering

10000000.00 24500000.00

investment

Cash received from investment

123077.77 524005.56

income

Net cash received from disposal

of fixed intangible and other

long-term assets

Net cash received from disposal

of subsidiaries and other units

Other cash received concerning

54336.41 337500.00

investing activities

Subtotal of cash inflow from

10177414.18 25361505.56

investing activities

Cash paid for purchasing fixed

4271363.11 5054670.76

intangible and other long-term assets

Cash paid for investment 20006966.66 30000000.00

Net cash received from

321680000.00

subsidiaries and other units obtained

Other cash paid concerning

investing activities

Subtotal of cash outflow from

345958329.77 35054670.76

investing activities

Net cash flows arising from investing

-335780915.59 -9693165.20

activities

III. Cash flows arising from financing

activities:

Cash received from absorbing

investment

Cash received from loans 411800462.65

Other cash received concerning

financing activities

Subtotal of cash inflow from

411800462.65

financing activities

Cash paid for settling debts 99925561.27

Cash paid for dividend and

230890398.24 230507050.80

profit distributing or interest paying

Other cash paid concerning

58702.23

financing activities

Subtotal of cash outflow from

330815959.51 230565753.03

financing activities

Net cash flows arising from financing

80984503.14 -230565753.03

activities

IV. Influence on cash and cash

equivalents due to fluctuation in 8620.29

exchange rate

V. Net increase of cash and cash

541857.57 -5278340.69

equivalents

Add: Balance of cash and cash

5312806.71 16272394.90

equivalents at the period -begin

VI. Balance of cash and cash

5854664.28 10994054.21

equivalents at the period -end

7. Statement of Changes in Owners’ Equity (Consolidated)

Current Amount

In RMB/CNY

Semi-annual of 2021

Owners’ equity attributable to the parent Company

Other

equity

Othe

instrument Less Tota

r Prov

Per : Reas Min l

Item Sha Capi com Surp ision Reta

pet Inve onab ority own

re Pre tal preh lus of ined Othe Subt

ual ntor le inter ers’

cap fer reser ensi reser gene profi r otal

cap Ot y reser ests equit

ital red ve ve ve ral t

ital her shar ve y

sto inco risk

sec es

ck me

urit

ies11

52 142 382 163 459 199 479

I. The ending

535 289 367 753 533 913 524

balance of the

25 272 575. 644 199 404. 540

previous year

4.0 9.36 37 1.03 9.76 33 4.090

Add: Changes

of accounting

policy

Error

correction of

the last period

Enterprise

combine

under the

same control

Other11

II. The 52 142 382 163 459 199 479

beginning 535 289 367 753 533 913 524

balance of the 25 272 575. 644 199 404. 540

current year 4.0 9.36 37 1.03 9.76 33 4.090

III. Increase/

Decrease in -160 133 -147 -159 -307

the period 572 398 232 837 070

(Decrease is 715. 23.9 891. 432. 324.

listed with 62 6 66 71 37

“-”)

243 243 245

(i) Total 191

846 846 757

comprehensiv 105

874. 874. 926.e income 1.67

76 76 43

(ii) Owners’ -160 -160 -161 -322

devoted and 572 572 748 321

decreased 715. 715. 484. 200.capital 62 62 38 00

1.Common -160 -160 -161 -322

shares 572 572 748 321

invested by 715. 715. 484. 200.shareholders 62 62 38 00

2. Capital

invested by

holders of

other equity

instruments

3. Amount

reckoned into

owners equity

with

share-based

payment

4. Other

-230 -230 -230

(iii) Profit 507 507 507

distribution 050. 050. 050.80 80 80

1. Withdrawal

of surplus

reserves

2. Withdrawal

of general

risk

provisions

3. -230 -230 -230

Distribution 507 507 507

for owners (or 050. 050. 050.shareholders) 80 80 80

4. Other

(iv) Carrying

forward

internal

owners’

equity

1. Capital

reserves

conversed to

capital (share

capital)

2. Surplus

reserves

conversed to

capital (share

capital)

3. Remedying

loss with

surplus

reserve

4. Carry-over

retained

earnings from

the defined

benefit plans

5. Carry-over

retained

earnings from

other

comprehensiv

e income

6. Other

(v)

Reasonable

reserve

1. Withdrawal

in the report

period

2. Usage in

the report

period

(vi) Others11

52 126 382 165 444 400 448

VI. Balance at

535 232 367 087 809 759 817

the end of the

25 001 575. 626 910 71.6 507

period

4.0 3.74 37 4.99 8.10 2 9.720

Amount of the previous period

In RMB/CNY

Semi-annual of 2020

Owners’ equity attributable to the parent Company

Other

equity

Othe

instrument Less

r Prov Total

: Reas MinoPe

Sha Capi com Surp ision Reta owneItem

Pr rpe Inve onab

rity

re tal preh lus of ined Othe Subt rs’

efe ntor le interetua

cap reser ensi reser gene profi r otal equit

rre l Oth y reser

sts

ital ve ve ve ral t y

d ca er shar ve

inco risk

sto pit es

me

ck al

sec

uri

tie

s11

I. The ending 52 142 350 149 442 46232026

balance of 535 289 522. 187 513 075 4388694

the previous 25 272 55 601. 508 118 130.9

3.42

year 4.0 9.36 06 0.60 7.57 90

Add:

Changes of

accounting

policy

Error

correction of

the last

period

Enterprise

combine

under the

same control

Other11

II. The

52 142 350 149 442 4623

beginning 2026

535 289 522. 187 513 075 438

balance of 8694

25 272 55 601. 508 118 130.9

the current 3.42

4.0 9.36 06 0.60 7.57 9

year0

III. Increase/

Decrease in -19 -19

-197

the period -522 768 768 34173471

(Decrease is .55 364. 887. 4.34

2.89

listed with 68 23

“-”)

210 210

(i) Total 1491 2122

738 738

comprehensi 174. 2986

686. 686.ve income 34 0.46

12 12

(ii) Owners’

devoted and

decreased

capital

1.Common

shares

invested by

shareholders

2. Capital

invested by

holders of

other equity

instruments

3. Amount

reckoned into

owners

equity with

share-based

payment

4. Other

-230 -230

-145 -231

(iii) Profit 507 507

7000 9640

distribution 050. 050.00 50.80

80 .80

1.Withdrawal

of surplus

reserves

2.Withdrawal

of general

risk

provisions

3.-230 -230

Distribution -145 -231

507 507

for owners 7000 9640

050. 050

(or .00 50.80

80 .80

shareholders)

4. Other

(iv) Carrying

forward

internal

owners’

equity

1. Capital

reserves

conversed to

capital (share

capital)

2. Surplus

reserves

conversed to

capital (share

capital)

3.Remedying

loss with

surplus

reserve

4. Carry-over

retained

earnings

from the

defined

benefit plans

5. Carry-over

retained

earnings

from other

comprehensi

ve income

6. Other

(v)

-522 -522 -522.Reasonable.55 .55 55

reserve

1.574 574

Withdrawal 5746

618. 618.in the report 18.41

41 41

period

2. Usage in 575 5755751

the report 140. 140.40.96

period 96 96

(vi) Others

VI. Balance 11 142 350 147 440 2027 4603

at the end of 52 289 187 536 098 2111 703

the period 535 272 601. 671 230 7.76 418.1

25 9.36 06 5.92 0.34 0

4.00

8. Statement of Changes in Owners’ Equity (Parent Company)

Current Amount

In RMB/CNY

Semi-annual of 2021

Other

equity instrument

Other

Perp Capita Less:

Share compr Reaso Surplu Retai

Item Total etual l Invent ehensi nable s ned

capit Prefe Other owners’

capit Othe reserv ory ve reserv reserv profi

al rred equity

al r e shares incom e e t

stock e

secur

ities

1152 316

I. The ending 3018 10996

535 785 459739

balance of the 10656 3147.254.0 396. 0365.51

previous year 8.27 23

0 01

Add:

Changes of

accounting

policy

Error

correction of

the last period

Other

II. The 1152 316

3018 10996

beginning 535 785 459739

10656 3147.balance of the 254.0 396. 0365.51

8.27 23

current year 0 01

III. Increase/

-193

Decrease in

the period

942. 942.20

(Decrease is20

listed with “-”)

(i) Total 374 374521

comprehensive 521 08.6072

income 08.60

(ii) Owners’

devoted and

decreased

capital

1.Common

shares

invested by

shareholders

2. Capital

invested by

holders of

other equity

instruments

3. Amount

reckoned into

owners equity

with

share-based

payment

4. Other

-230

(iii) Profit 507 -230507

distribution 050. 050.8080

1. Withdrawal

of surplus

reserves

-230

2. Distribution

for owners (or

050. 050.80

shareholders)80

3. Other

(iv) Carrying

forward

internal

owners’ equity

1. Capital

reserves

conversed to73

capital (share

capital)

2. Surplus

reserves

conversed to

capital (share

capital)

3. Remedying

loss with

surplus reserve

4. Carry-over

retained

earnings from

the defined

benefit plans

5. Carry-over

retained

earnings from

other

comprehensive

income

6. Other

(v) Reasonable

reserve

1. Withdrawal

in the report

period

2. Usage in the

report period

(vi) Others

1152 123

VI. Balance at 3018 10996

535 730 440433

the end of the 10656 3147.254.0 453. 5423.31

period 8.27 23

0 81

Amount of the previous period

In RMB/CNY

Semi-annual of 2020

Other Other Surpl

Shar Capit Less:

Item Reason Total equity instrument compr us Retaine

e al Invent able Other owners’

Pref Perp Othe ehensi reserv d profit

capit reserv ory reserve equity

erre etual r ve e

al d capit e shares incom

stoc al e

k secu

ritie

s115

I. The ending 3018 7778 25767

253 450609

balance of the 1065 3172 2677.9

525 7673.13

previous year 68.27 .92 4

4.00

Add:

Changes of

accounting

policy

Error

correction of

the last

period

Other

II. The 115

3018 7778 25767

beginning 253 450609

1065 3172 2677.9

balance of the 525 7673.13

68.27 .92 4

current year 4.00

III. Increase/

Decrease in13045

the period 130452

2167.2

(Decrease is 167.277

listed with

“-”)

(i) Total 36095360959

comprehensiv 9218.0

218.07

e income 7

(ii) Owners’

devoted and

decreased

capital

1.Common

shares

invested by

shareholders

2. Capital

invested by

holders of

other equity

instruments

3. Amount

reckoned into

owners equity

with

share-based

payment

4. Other

-23050

(iii) Profit -230507

7050.8

distribution 050.800

1.Withdrawal

of surplus

reserves

2.Distribution -23050

-230507

for owners 7050.8

050.80

(or 0

shareholders)

3. Other

(iv) Carrying

forward

internal

owners’

equity

1. Capital

reserves

conversed to

capital (share

capital)

2. Surplus

reserves

conversed to

capital (share

capital)

3. Remedying

loss with

surplus

reserve

4. Carry-over

retained

earnings from

the defined

benefit plans

5. Carry-over

retained

earnings from

other

comprehensiv

e income

6. Other

(v)

Reasonable

reserve

1.Withdrawal

in the report

period

2. Usage in

the report

period

(vi) Others115

VI. Balance 3018 7778 38812

253 463654

at the end of 1065 3172 4845.2

525 9840.40

the period 68.27 .92 1

4.00

III. Basic information of Company

Shenzhen Cereals Holdings Co. Ltd. (formerly the 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 name as

Shenzhen Shenbao Industrial Co. ltd. 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 Company belongs to the

grain oil food and beverage industry.As of 30 June 2021 the cumulative amount of shares issued by the Company was 1152535254 shares with

registered capital of 1152535254.00 yuan. Registered address: Shenzhen Guangdong Province; HQ 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. Main business of the Company: general operating items:

Purchase and sales of grain and oil grain & oil reserves; operation and processing of grain & oil products;

production of tea tea products tea and natural plant extract canned foods beverages and native products

(business license of the production place shall be separately applied for); feed management and processing

(outsourcing); investment operation and development of grain & oil logistics feed logistics and tea garden etc.;

sales of feed and tea; warehousing services; food circulation services; modern food supply chain services;

technology development and services of grain & oil tea plant products soft drinks and foods; construction of

E-commerce and information IT development and supporting services; industrial investment (specific items will

be declared separately); domestic trade; operating the import and export business; engaged in real estate

development and operation on the lands where the right-to-use has been legally acquired; development operation

leasing and management of the own property; property management; providing management services to

hotels.(items mentioned above which are involved in approval from national laws administrative regulations and

decision of the state council must be submitted for examination and approval before operation ). Licensed

business item: wholesale of prepackaged food (excluding reheating prepackaged food) (in non-physical way);

information service (internet information service only); general freight professional transportation (refrigeration

and fresh-keeping). Parent enterprise of the Company: Shenzhen Food Group Co. Ltd; actual controller of the

Company: Assets Supervision and Administration Commission of Shenzhen municipal People’s Government.Change of the consolidate scope in the Period found more in “Note VIII. Change of consolidate scope”

Information with subsidiaries concerned found more in the “Note IX. Equity in other entity”

IV. Basis of preparation of financial statements

1. Basis of preparation

The financial statement are prepared in line with the Accounting Standards for Business Enterprise -Basic

Standard issued by Ministry of Finance 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 Accounting Standards for Business Enterprise) combining the

Information Disclosure Preparation Rules for Company Public Issuing Securities No.15-General Rules for

Financial Report of the CSRC

2. Going concern

The Company was evaluated on continued viability of 12 months for the reporting period and found to have no

significant doubt. Accordingly the financial statements have been prepared on the basis of going concern

assumptions.V. Major accounting policy accounting estimation

Specific accounting policies and estimation attention:

The following disclosures have covered the specific accounting policies and estimates that formulated by the

Company according to the actual characteristics of production and operation.1. Statement for observation of Accounting Standard for Business Enterprise

The financial statements prepared by the Company are in accordance to requirements of Accounting Standard for

Business Enterprise issued by Ministry of Finance which truly and completely reflect the financial status of the

Company and parent company on 30 June 2021 as well as the consolidate and parent company’s operational

results and cash flow from Jan.-Jun. of 2021.2. 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

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

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 .Business combination not under the same control: Combination cost is the fair value of the assets paid the

liabilities incurred or assumed by the purchaser for the acquisition of the control of the purchaser and the equity

securities issued on the purchase date. 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. Each identifiable assets liabilities and contingent liability of the acquiree acquired in a

combination that qualifies for recognition is measured at fair value at the date of purchase.The directed expenses incurred in the business combination are recorded into current gains/losses; the trading fees

for issuing equity securities or debt securities for the business combination shall be recorded into the initial

confirmation amount of equity securities or debt securities.6. Methods for preparation of consolidated financial statements

6.1 Consolidated scope

The consolidation scope of the consolidated financial statements of the Company is fixed on the basis of control

which includes the Company and all subsidiaries. Control means that the Company has power over the investee

enjoys variable returns through its participation in the investee’s related activities and has the ability to influence

the amount of returns by using the power over the investee.6.2 Consolidated procedure

The Company regards the entire enterprise group as an accounting entity and prepares consolidated financial

statements in accordance with unified accounting policies to reflect the overall financial status operating results

and cash flow of the enterprise group. The influence of internal transactions between the company and its

subsidiaries and among the subsidiaries shall be offset. If internal transactions indicate that the relevant assets

have suffered impairment losses the partial losses shall be confirmed in full. If the accounting policy and

accounting period adopted by the subsidiary are inconsistent with the Company when preparing the consolidated

financial statements make necessary adjustments in accordance with the Company's accounting policy and

accounting period.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.

(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 the operation results and cash flow of the subsidiaries or business from beginning to the end of the

reporting shall be included in the consolidated profit statement; also adjust the opening figures of the consolidated

financial statements and the related items in the comparative statements the consolidated reporting body is

considered to have existed since the point when the ultimate controller began to control it.If additional investment and other reasons can lead investee to be controlled under the same 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

combined party and combinee 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 if a subsidiary or business is added due to a business combination not under the same

control it shall be included in the consolidated financial statements on the basis of the fair value of various

identifiable assets liabilities and contingent liabilities determined on the purchase date.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 changes

in owner’s equity under the equity method of accounting that can be reclassified to profit or loss at a later date are

transferred to investment income for the period to which they belong at the date of purchase.

(2) Disposal of subsidiaries

① The general approach

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

changes in owner’s equity under the equity method of accounting related to equity investments in former

subsidiaries that can be reclassified to profit or loss in the future are transferred to investment income in the

current period when control is lost.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:

i. These transactions are made considering at the same time or in the case of mutual impact;

ii. These transactions only reach a complete business results when as a whole;

iii. A transaction occurs depending on the occurrence of at least one other transaction;

iv. Single transaction is not economical but considered together with other transactions it is economical.If each transaction is a package transaction each transaction is accounted for as a disposal of a subsidiary and loss

of control; 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 each 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 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. Recognition standards for cash and cash equivalents

Cash refers to the cash on hand and cash equivalents of deposits that can be used for payment at any time. Cash

equivalent refers to the investment held by the Company with short maturity and strong liquidity that are easy to

be converted into known amounts with little risk of change in cash value.8. Foreign currency business and conversion of foreign currency statement

8.1 Foreign currency business

The foreign currency business uses the spot exchange rate on the transaction date as the conversion rate to convert

the foreign currency amount into RMB.The balance of foreign currency monetary items on the balance sheet date is converted at the spot exchange rate on

the balance sheet date. The resulting exchange differences except that the balance of exchange generated from the

foreign currency special borrowings related to the assets whose acquisition and construction are eligible for

capitalization is disposed in accordance with the principle of borrowing costs capitalization are included in the

current profit and loss.8.2 Conversion of foreign currency financial statements

Assets and liabilities in the balance sheet are converted at the spot exchange rate on the balance sheet date; except

for the “undistributed profit” item other items of the owner's equity items are converted at the spot exchange rate at

the time of occurrence. Income and expense items in the income statement are converted at the spot exchange rate

on the transaction date.When disposing an overseas operation the translation difference of the foreign currency financial statements related

to the overseas operation is transferred from the owner's equity items to the disposal of the current profit and loss.9. Financial instruments

The Company recognizes a financial assets financial liabilities or equity instrument when it becomes a party to a

financial instrument contract.9.1 Categories of financial instruments

According to the business model of managing financial assets and the contractual cash flow characteristics of

financial assets at initial recognition the Company classifies the financial assets into the financial assets

measured at amortized cost the financial assets(debt instrument) measured at fair value and whose changes are

included in other comprehensive income and the financial assets measured at fair value and whose changes are

included in current gain or loss.The Company classifies the financial assets that meet the following conditions and are not designated to be

measured at fair value and whose changes are recorded into the current gain/losses as financial assets measured at

amortized cost:

－ the business mode is aimed at collecting contractual cash flows；

－ contractual cash flows represent only payments of principal and interest based on the outstanding principal

amount.The Company classifies the financial assets (debt instruments) that meet the following conditions and are not

specified as measured at fair value and whose changes are recorded into the current gain/losses as financial assets

(debt instruments) measured at fair value and whose changes are recorded into other comprehensive income:

－ the business model is aimed at both the collection of contractual cash flows and the sales of the financial

assets;

－ contractual cash flows represent only payments of principal and interest based on the outstanding principal

amount.For non-trading equity instrument investment the Company determines whether it is designated as a financial asset

(equity instrument) measured at fair value and whose changes are included in other comprehensive income at the

initial recognition. The designation is made on a single investment basis and the related investment meet the

definition of an equity instrument from an issuer’s perspective.Except for the above-mentioned financial assets measured at amortized cost and at fair value with changes

included in other comprehensive income the Company classifies all other financial assets as financial assets

measured at fair value and with changes included in current profits and losses. At the time of initial recognition if

accounting mismatches can be eliminated or significantly reduced the Company can irrevocably designate the

financial assets that should be classified as financial assets measured at amortized cost or measured at fair value

and whose changes are included in other comprehensive income as the financial assets measured at fair value and

whose changes are included in the current profit and loss.In the initial recognition financial liabilities are classified as the financial liabilities measured at fair value and

whose changes are included in current profit and loss and the financial liabilities measured at amortized cost.Financial liabilities that meet one of the following conditions can be designated as financial liabilities measured at

fair value and whose changes are included in current profit and loss in the initial measurement:

1) The designation can eliminate or significantly reduce accounting mismatches.2) According to the enterprise risk management or investment strategy specified in the official written document

manage and make performance evaluation of the financial liability portfolio or financial assets and financial

liability portfolio based on fair value and report to the key management personnel based on this.3) The financial liability includes embedded derivatives that need to be separately split.9.2 Recognition and measurement for financial instrument

(1) Financial assets measured at amortized cost

Financial assets measured at amortized cost include notes receivable accounts receivable other receivables

long-term receivables and debt investment which are initially measured at fair value and related transaction costs

are included in the initial recognition amount. The accounts receivable not including major financing components

and the accounts receivable that the Company decides not to consider the financing component of not more than one

year are initially measured at the contract transaction price.Interest calculated by the effective interest method during the holding period is included in the current profit and

loss.When recovering or disposing the difference between the price obtained and the book value of the financial asset is

included in the current profit and loss.

(2) Financial assets (debt instruments) measured at fair value and whose changes are included in other

comprehensive income

Financial assets (debt instruments) measured at fair value and whose changes are included in other comprehensive

income including receivables financing other debt investment etc. are initially measured at fair value and related

transaction expenses are included in the initial recognition amount. The financial assets are subsequently measured

at fair value the changes in fair value are included in other comprehensive income except for interest impairment

losses or gains and exchange gains and losses calculated by using the effective interest method.When a financial asset is terminated for recognition the accumulated gain or loss previously included in other

comprehensive income is transferred from other comprehensive income and included in current profit and loss.

(3) Financial assets (equity instruments) measured at fair value and whose changes are included in other

comprehensive income

Financial assets (equity instruments) measured at fair value and whose changes are included in other comprehensive

income including other equity instruments etc. are initially measured at fair value and related transaction

expenses are included in the initially recognized amount. The financial assets are subsequently measured at fair

value and changes in fair value are included in other comprehensive income. The dividends obtained are included in

the current profits and losses.When a financial asset is terminated for recognition the accumulated gain or loss previously included in other

comprehensive income is transferred from other comprehensive income and included in retained earnings.

(4) Financial assets measured at fair value and whose changes are included in current profit and loss

Financial assets measured at fair value and whose changes are included in current profit and loss including

Tradable financial assets derivative financial assets and other non-current financial assets etc. are initially

measured at fair value and related transaction expenses are included in the initial recognition amount. The financial

assets are subsequently measured at fair value and changes in fair value are recognized in current profit and loss.

(5) Financial liabilities measured at fair value and whose changes are included in current profit and loss

Financial liabilities measured at fair value and whose changes are included in current profit and loss including

transaction financial liabilities derivative financial liabilities etc. are initially measured at fair value and related

transaction expenses are included in current profit and loss. The financial liabilities are subsequently measured at

fair value and changes in fair value are included in current profit and loss.When a financial liability is terminate for recognition the difference between book value and the consideration

paid shall be recorded into the current profit and loss.

(6) Financial liabilities measured at amortized cost

Financial liabilities measured at amortized cost including short-term borrowings bills payable accounts payable

other payable long-term borrowings bonds payable and long-term payable are initially measured at fair value and

related transaction expenses are included in the initial recognition amount.Interest calculated by the effective interest method during the holding period is included in the current profit and

loss.When a financial liability is terminate for recognition the difference between the consideration paid and the book

value of the financial liability is included in current profit and loss.9.3 Termination of recognition and transfer of financial assets

If one of the following conditions is satisfied the Company shall terminate the recognition of financial assets:

－ the contractual rights to receive cash flows from financial assets terminates;

－ the financial asset has been transferred and virtually all the risks and rewards of the ownership of the financial

asset have been transferred to the transferee;

－ the financial assets have been transferred. Although the company has neither transferred nor retained nearly all

the risks and rewards of ownership of the financial assets it has not retained control of the financial assets

When transfer of financial assets occurs if substantially all the risks and rewards of ownership of the financial

asset are retained the recognition of the financial asset shall not be terminated.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 over weighs 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 for the financial assets (debt instrument) measured at fair value and

whose changes are recorded into other comprehensive income)

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 (debt instrument) measured at fair value and whose changes

are included in other comprehensive income).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.9.4 Terminating the recognition of financial liability

As for the financial liabilities with its whole or part present obligations released the company shall terminate the

recognition for 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 terminate the recognition for the existing financial liabilities and recognized the new financial liabilities

provided that the contract clauses of the new and the existing financial liabilities are different in substance.If the company makes substantial amendment to the whole or part contract clauses of the existing financial

liabilities it shall terminate the recognition for 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 terminate the recognition of financial liabilities in whole or part the difference between the carrying

value of such 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.9.5 Recognition method for fair value of financial assets and financial liabilities

As for the financial instrument with an active market the fair value is determined by the offer of the active market;

there is no active market for a financial instrument the valuation techniques to determine its fair value. At 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

un-observable inputs.9.6 Testing of the financial assets impairment and accounting treatment

The Company estimates the expected credit losses of financial assets measured at amortized cost financial assets

(debt instruments) measured at fair value and whose changes are included in other comprehensive income and

financial guarantee contracts in a single or combined way.The Company considers reasonable and well-founded information about past events current conditions and

forecasts of future economic conditions and uses the risk of default as the weight to calculate the

probability-weighted amount of the present value of the difference between the cash flow receivable from the

contract and the cash flow expected to be received to confirm the expected credit loss.If the credit risk of the financial instrument has increased significantly since the initial recognition the Company

measures its loss provision based on the amount equivalent to the expected credit losses for the entire duration of the

financial instrument; if the credit risk of the financial instrument has not increased significantly since the initial

recognition the Company measures its loss provision based on the amount equivalent to the expected credit losses

of the financial instrument in the next 12 months. The increase or reversal amount of the resulting loss provision is

included in the current profit and loss as an impairment loss or gain.The Company compares the risk of default on the balance sheet date of financial instruments with the risk of

default on the date of initial recognition to determine the relative change in the risk of default during the expected

life of the financial instrument so as to assess whether the credit risk of the financial instrument has increased

significantly since the initial recognition. Usually if it s overdue for more than 30 days the Company shall believe

that the credit risk of the financial instrument has increased significantly unless there is conclusive evidence that the

credit risk of the financial instrument has not increased significantly since the initial recognition.If the financial instrument's credit risk at the balance sheet date is low the Company shall believe that the credit risk

of the financial instrument has not increased significantly since the initial recognition.If there is objective evidence that a financial asset has suffered credit impairment the Company shall make

provision for impairment of the financial asset on a single basis.Regarding the accounts receivable and contract assets formed from transactions regulated by the "Accounting

Standards for Business Enterprises No. 14-Revenue" (2017) regardless of whether it contains a significant

financing component the Company always measure its loss reserves at the amount equivalent to the expected

credit loss during the entire duration.For lease receivables the Company always chooses to measure its loss reserves at an amount equivalent to

expected credit losses during the entire duration.If the Company no longer reasonably expects whether the contractual cash flow of a financial asset can be

recovered in whole or in part it will directly write down the book balance of the financial asset.10. Inventory

10.1 Classification and costs of inventory

Inventory includes raw materials revolving material goods in process goods in transit and work in

process-outsourced and so on.Inventory is initially measured at cost which includes the costs of purchase processing costs and other

expenditures incurred in bringing the inventories to their present location and condition.10.2 Valuation methods for delivery of inventory

The weighted average or individual valuation method is used when the inventory is issued according to the nature

of the business.10.3 Recognition standards of the net realizable value for inventory

On the balance sheet date inventories shall be measured at the lower of cost and net realizable value. When the

cost of inventories is higher than its net realizable value make provisions for inventory write-down. The net

realizable value refers to the amount of the estimated selling price of the inventory minus the estimated cost

estimated selling expenses and related taxes and fees at the time of completion in daily activities.The net realizable value of inventory products and materials for sale 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 for-sale 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.After making provisions for inventory write-down if the factors that previously affected the write-down of the

inventory value have disappeared causing the net realizable value of the inventory to be higher than its book

value it shall be reversed within the amount of the inventory write-down that has been withdrawn and the

reversed amount is included in the current profit and loss.10.4 Inventory system

Inventory system is the perpetual inventory system.10.5 Amortization of low-value consumables and packaging materials

(1) Low-value consumables adopts the method of primary resale;

(2) Wrappage adopts the method of primary resale.

11. Contract asset

11.1 Methods and criteria for recognition of a contract asset

The Company lists contract assets or contract liabilities in the balance sheet based on the relationship between

performance obligations and customer payments. The Company lists the right (and the right depends on other

factors other than the passage of time) to receive consideration for the transfer of goods or services to customers

as contract assets. Contract assets and contract liabilities under the same contract are presented in net amount. The

Company's unconditional (only depending on the passage of time) right to collect consideration from customers

are separately listed as receivables.11.2 Determination method and accounting treatment method of expected credit loss of contract assets

Found more in the 10.6 Testing of the financial assets impairment and accounting treatment carried under 10.Financial instrument

12. Contract cost

Contract cost includes contract performance cost and contract acquisition cost.The cost incurred by the Company for the performance of the contract does not fall within the scope of relevant

standards and norms such as inventory fixed assets or intangible assets and shall be recognized as an asset as

contract performance cost when the following conditions are met:

· The cost is directly related to a current or anticipated contract.· This cost increases the Company's resources for future performance obligations.· This cost is expected to be recovered.The incremental cost incurred by the Company to acquire the contract which is expected to be recovered shall be

recognized as an asset as the contract acquisition cost.Assets related to contract cost are amortized on the same basis as revenue recognition for the goods or services

related to the assets; However if the amortization period of the contract acquisition cost does not exceed one year

the Company shall record it into the profit and loss of the current period when it occurs.If the carrying value of the assets related to the contract cost is higher than the difference between the following

two items the Company shall make an impairment provision for the excess part and recognize it as an asset

impairment loss:

(1) the remaining consideration expected to be obtained from the transfer of the goods or services related to the

asset;

(2) the cost estimated to occur for the transfer of the relevant goods or services.

If the said difference is higher than the book value of the asset due to the changes in the factors of impairment in the

previous period the Company shall reverse the original provision for impairment which has been set aside and

record it into the profits and losses of the current period provided that the book value of the asset after being

reversed shall not exceed the book value of the asset on the date of reversal under the assumption that no impairment

provision is set aside.13. Long-term equity investment

13.1 Criteria for judgment of the common control and significant influence

Common control refers to the control that is common to an arrangement in accordance with the relevant

agreement and the relevant activities of the arrangement must be agreed upon by the participants sharing the

control rights before making a decision. Where the Company and other joint venture parties jointly control the

invested entity and have rights to the net assets of the invested entity the invested entity is the joint venture of the

Company.Significant influence refers to the right to participate in making decisions relating to the financial and operational

policies of an enterprise while not able to control or jointly control (with others) establishment of these policies.If the Company has significant influence on the invested enterprises than such invested enterprises shall be the

joint venture of the Company.13.2 Determination of initial investment cost

(1) Long-term equity investment formed by business combination

For a long-term equity investment in a subsidiary formed by a business combination under the same control the

initial investment cost of the long-term equity investment is based on the share of the book value of the owner’s

equity of the combined party obtained in the consolidated financial statements of the ultimate controlling party on

the combining date. The difference between the initial investment cost of long-term equity investment and the

book value of the consideration paid shall be used to adjust the equity premium in the capital reserve; when the

equity premium in the capital reserve is insufficient to offset adjust the retained earnings. If it is possible to

exercise control over an investee under the same control due to additional investment etc. adjust the equity

premium based on the difference between the initial investment cost of the long-term equity investment confirmed

in accordance with the above principles and the book value of the long-term equity investment before the

combination plus the sum of the book value of the new valuable consideration for the shares obtained on the

combining date if the equity premium is not enough to offset offset the retained earnings.For long-term equity investment in a subsidiaries formed by business combination not under the same control the

initial investment cost is based on the cost of the combination determined at the date of purchase. If it is possible

to exercise control over an investee not under the same control due to additional investment the sum of book

value of the equity investment originally held plus the cost of the additional investment is used as the initial

investment cost.

(2) Long-term equity investment required by means other than business combination

For long-term equity investments obtained through payment with cash then the actual payment shall be viewed as

initial investment cost.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

13.3 Subsequent measurement and recognition of gains and losses

(1) Long-term equity investment measured by cost

The long-term equity investment for subsidiary shall be measured by cost unless the investment qualities as held

for sale. 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) Long-term equity investment measured by equity

The Company calculates long term equity investment in associates and joint ventures under equity method. 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. And adjusted the costs

of long-term equity investment at the same time.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 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

(abbreviated as other changes of owners’ equity) and is to report in owners’ equity accordingly.When confirming the share of the net profit and loss other comprehensive income and other owner’s equity

changes that should be enjoyed by the investee adjust the net profit and other comprehensive income of the

investee based on the fair value of the investee’s identifiable net assets at the time when the investment is obtained

and in accordance with the company’s accounting policies and accounting period before confirmation.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(except where the assets invested or sold constitute a business). If

the unrealized internal transaction losses with the investee are assets impairment losses they will be fully

recognized.In addition to assuming obligations for additional losses the company’s net losses to joint ventures or associates

are limited to the book value of long-term equity investments and other long-term equity that actually constitutes

net investment in joint ventures or associates write down to zero. If a joint venture or an associated enterprise

realizes net profits in the future the company resumes recognizing its share of profits after the share of profits

makes up for the share of unrecognized losses.

(3) 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.Long-term equity investment accounted for by equity method

For long-term equity investments accounted for by partial disposition equity method the remaining equity is still

accounted for by the equity method the other comprehensive income recognized by the original equity method

shall be carried forward in a corresponding proportion on the same basis as the direct disposal of related assets or

liabilities by the investee other changes in owner's equity are carried forward to the current profit and loss on a

pro rata basis.If the joint control or significant influence on the investee is lost due to the disposal of equity investment for the

other comprehensive income recognized by the original equity investment due to the adoption of the equity

method use the same basis as the investee to directly dispose of related assets or liabilities for accounting

treatment when terminating the adoption of the equity method the same basis as the direct disposal of related

assets or liabilities by the investee is used for accounting treatment all other changes in owner's equity are

transferred to the current profit and loss when terminating the adoption of the equity method.If the control of the investee is lost due to the disposal of part of the equity investment and the remaining equity

can exercise joint control or exert significant influence on the investee when preparing individual financial

statements the equity method shall be used for accounting and the remaining equity shall be deemed to be

accounted for by the equity method for adjustment since the acquisition and the other comprehensive income

recognized before obtaining the control of the investee is carried forward on the same basis as the direct disposal

of related assets or liabilities by the investee in proportion changes in other owners’ equity confirmed by the

equity method are carried forward to the current profit and loss on a pro rata basis; if the remaining equity cannot

exercise joint control or exert significant influence on the investee it shall be recognized as a financial asset and

the difference between its fair value and book value on the day when the control is lost is included in the current

profit and loss and all other comprehensive income and other owner's equity changes recognized before obtaining

the control of the investee are carried forward.If the equity investment in a subsidiary is disposed of through multiple transactions until it loses control and it is

a package transaction each transaction shall be accounted for as a transaction that disposes of the equity

investment of the subsidiary and loses control. The difference between the cost of each disposal before the loss of

control and the book value of the long-term equity investment corresponding to the equity being disposed of is

first recognized as other comprehensive income in individual financial statements and then transferred to the

current profit and loss of the loss of control when the control is lost. If it is not a package transaction each

transaction shall be accounted for separately.14. 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 (including the buildings for rent after completion of self-construction or

development activities and the buildings under construction or development for future lease).Subsequent expenditures related to investment real estate are included in the cost of investment real estate when it

is probable that the related economic benefits will flow and the cost can be measured; otherwise charged to

current gain/loss as incurred.Current investment real estate of the Company are measured by cost. As for the investment real estate-rental

building measured by cost the depreciation policy is same as the fixed assets of the Company the land use right

for rental has the same amortization policy as intangible assets.15. Fix assets

(1) Recognition

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.Fixed assets are initially measured at cost (and considering the impact of expected abandonment cost factors).Subsequent expenditures related to fixed assets are included in the cost of fixed assets when the related economic

benefits are likely to flow in and their costs can be reliably measured; the book value of the replaced part is

derecognized; all other subsequent expenditures are included in the current profit and loss when incurred.

(2)Depreciation methods

Yearly depreciation

Category Method Years of depreciation Scrap value rate

rate

Straight-line

House and buildings

depreciation

Straight-line

Production buildings 20-35 5.00 2.71-4.75

depreciation

Non-production Straight-line

20-40 5.00 2.38-4.75

buildings depreciation

Temporary dormitory Straight-line

5-15 5.00 6.33-19.00

and simple room etc. depreciation

Straight-line

Gas storage bin 20 5.00 4.75

depreciation

Straight-line

Silo 50 5.00 1.90

depreciation

Wharf and supporting Straight-line

50 5.00 1.90

facilities depreciation

Straight-line

Machinery equipment

depreciation

Other machinery Straight-line

10-20 5.00 4.75-9.50

equipment depreciation

Warehouse

Straight-line

transmission 20 5.00 4.75

depreciation

equipment

Straight-line

Transport equipment 3-10 5.00 9.50-31.67

depreciation

Electronic equipment Straight-line

2-10 5.00 9.50-47.50

and others depreciation

Depreciation of fixed assets is classified and accrued by using the straight-line depreciation and the depreciation

rate is determined according to the type of fixed assets the expected service life and the estimated net residual

value rate. For fixed assets with provision for impairment the amount of depreciation shall be determined in

future periods according to the book value after deducting the provision for impairment and based on the usable

life. If each component of the fixed assets has different service lives or provides economic benefits to the

enterprise in different ways select different depreciation rates or depreciation methods and the depreciation is

accrued separately.Depreciation policy for fixed assets leased under finance leases is consistent with that for owned fixed assets. 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.

(3) Recognition measurement and depreciation of fixed assets held under finance lease

If any of the following conditions are stipulated in the lease agreement signed by the Company and the lessee it

shall be recognized as a financial leased assets:

① ownership of the leased assets shall belong to the Company upon the expiration of the lease term;

② the Company has the option to purchase assets for a purchase price much lower than the fair value of the

assets when the option is exercised;

③the lease period accounts for most of the service life of the leased assets;

④ there is no significant difference between the present value of the minimum lease payment on the lease

commencement date and the fair value of the assets.⑤ leased assets are special in nature and can only be used by the lessee if no major alterations are made.On the lease start date the company regards the lower of the fair value of the leased asset and the present value of

the minimum lease payment as the book value of the leased asset and regards the minimum lease payment amount

as the book value of the long-term payable and the difference is regarded as unrecognized financing charges.16. Construction in progress

Construction in progress is measured at the actual cost incurred. The actual cost includes construction cost

installation cost borrowing costs that meet the capitalization conditions and other necessary expenditures

incurred before the construction in progress reaches its intended usable state. When the construction in progress

reaches the intended usable state it will be transferred to fixed assets and depreciation will be accrued from the

next month.17. Borrowing expenses

17.1 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 assets 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.17.2 Period of capitalization

Capitalizing period was from the time star capitalizing until the time of suspended capitalization. The period for

borrowing expenses suspended excluded in the period.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.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.17.3 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 for-sale 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.17.4 Capitalization rate of the borrowing costs measurement of the capitalized amount

As for the special loans borrowed for the purchase construction or production of assets eligible for capitalization

the borrowing costs are capitalized by deducting the actual borrowing costs incurred in current period of special

borrowing the interest income earned by borrowing funds that have not ye been used deposited in the bank or the

investment income obtained from the temporary investment.For the general borrowings used for the acquisition construction or production of assets eligible for capitalization

the amount of borrowing costs that should be capitalized for general borrowings is calculated and determined

according to the weighted average of the asset expenditures of accumulated asset expenditures over the special

borrowings multiplying by the capitalization rate of the occupied general borrowings. The capitalization rate is

determined based on the weighted average interest rate of general borrowings.During the capitalization period the exchange difference of the principal and interest of the specialized foreign

currency borrowing is capitalized and included in the cost of the assets that meet the capitalization conditions.Exchange differences arising from the principal and interest of foreign currency borrowings other than specialized

foreign currency borrowing are included in the current profits and losses.18. Biological assets

18.1The Company's biological assets are productive biological assets which are classified into productive

biological assets consumptive biological assets and biological assets for commonweal according to the purpose of

holding and the way in which economic benefits are realized.18.2 Biological assets are initially measured at cost

18.3 The necessary expenditures incurred by productive biological assets before reaching the intended production

and operation purposes constitute the cost of the productive biological assets. Subsequent expenditures incurred

after achieving the intended production purposes shall be included in the current profit and loss.18.4 The necessary expenditures for consumptive biological assets before closure constitute the cost of

consumptive biological assets and subsequent expenditures incurred after closure are included in the current

profit and loss. The cost of consumptive biological assets shall be carried forward according to the growing stock

volume ratio method when harvesting.18.5 The Company’s biological assets are mainly tea trees. The company’s productive biological assets that

achieve the intended production and operation purposes are depreciated according to the average service life

method and the service life is determined as the remaining period of land use after deducting the immature tea

tree period (5 years) the residual value rate is 5.00%. At the end of each year the company reviews the service

life expected net residual value and depreciation methods. If the service life and expected net output value are

different from the original estimate or there is a significant change in the realization of economic benefits it will

be used as an accounting estimate change to adjust the service life or estimated net output value or change the

depreciation method.18.6 Biological assets for commonweal refer to biological assets whose main purpose is protection and

environmental protection including wind-breaking and sand-fixing forests soil and water conservation forests

and water conservation forests.The cost of self-constructed biological assets for commonweal shall be determined in accordance with the

necessary expenditures such as cost of planting tending fees forest protection fees forest culture and management

facility fees improved seed experiment fees survey design fees and indirect costs that should be apportioned

before the closure including borrowing costs that meet the conditions for capitalization.Biological assets for commonweal are subsequently measured at cost. There is no need to withdraw the asset

impairment reserve for biological assets for commonweal.18.7 The balance of the disposal consideration from the sale inventory loss death or damage of biological assets

after deducting the book value and relevant taxes shall be included in the current profit and loss.19. Right-of-use assets

On the commencement date of the lease term the Company recognizes the right-of-use assets for leases other than short-term

leases and low-value asset leases. The right-of-use assets shall be initially measured at cost. The cost includes:

The initial measurement amount of lease liabilities;

Where the lease payments paid on or before the commencement date of the lease term have a lease incentive the

amount of the lease incentive already enjoyed shall be deducted;

Initial direct costs incurred by the Company;

Costs expected to be incurred by the Company to dismantle and remove the leased assets restore the sites where

the leased assets locate or restore the leased assets to the state agreed upon in the lease terms excluding costs

incurred for the production of inventory.The Company shall subsequently use the straight-line method to calculate the depreciation of the right-of-use

assets. Where ownership of the leased asset can be reasonably determined at the end of the lease term the

Company shall calculate the depreciation during the remaining useful life of the leased asset; Otherwise the

depreciation of the leased asset is calculated during the period which is shorter between the lease term and the

remaining useful life of the leased asset.The Company determines whether the right-of-use asset impairment has occurred in accordance with the

principles described in the Notes "21. Impairment of Long-term Assets" and makes accounting treatment for the

identified impairment loss.20. Intangible assets

(1) Measurement use of life and impairment testing

1) Measurement

i-Initial measurement is made at cost when the Company acquires intangible assets;

For those intangible assets purchased from outside the purchase value relevant taxes and other payments

attributable to predicted purpose obtained should recognized as cost for this assets.ⅱ-Subsequent measurement

Analyzing and judging the service life of an intangible asset when they are acquired.Those intangible assets with limited useful life are evenly amortized on straight basis from the date when

they become usable to the end of expected useful 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

without amortization.2）Estimation of the service life of intangible assets with limited service life

Residual

Item Predicted useful life Amortization method Basis

value rate

Amortized the actual rest of life after Straight-line method 0.00% Certificate of land use

Land use right

certificate of land use right obtained right

Forest tree use right Service life arranged Straight-line method 0.00% Protocol agreement

Straight-line method 0.00% Actual situation of the

Trademark use right 10-year

Company

Shop management right Service life arranged Straight-line method 0.00% Protocol agreement

Software use right 5-8 years Straight-line method 0.00% Protocol agreement

Straight-line method 0.00% Actual situation of the

Patents and others 20-year

Company

3) Judgment basis on intangible assets with uncertain service life and review procedures for the 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.

(2)Accounting policy of the internal R&D expenditure

1)Specific criteria for dividing research and development stages

The expenditure for internal R&D is divided into research expenditure and development expenditure.Research stage: stage of the investigation and research activities exercising innovative-ness for new science or

technology knowledge obtained and understanding.Development 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.Expenditures incurred during the research phase of internal R&D projects shall be recorded into the current profit

and loss when incurred.2) Standards for capitalization satisfaction of expenditure in development state

Expenditures in the research phase are included in the current profit and loss when they occur. Expenditures in the

development phase that meet the following conditions at the same time are recognized as intangible assets and

expenditures in the development phase that cannot meet the following conditions are included in the current profit

and loss:

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.If it is not possible to distinguish between research stage expenditures and development stage expenditures all

research and development expenditures incurred are charged to current gain/loss.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.21. Impairment of long term assets

The long-term assets as long-term equity investments investment real estate measured at cost fixed assets

construction in progress right-of-use assets intangible assets with certain service life and oil & gas assets are

tested for impairment if there is any indication that an asset may be impaired at the balance date. If the result of

the impairment test indicates that the recoverable amount of the asset is less than its carrying amount a provision

for impairment and an impairment loss are recognized for the amount by which the asset’s carrying amount

exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and

the present value of the future cash flows expected to be derived from the asset. Provision for asset impairment is

determined and recognized on the individual asset basis. If it is not possible to estimate the recoverable amount of

an individual asset the recoverable amount of a group of assets to which the asset belongs is determined. A group

of assets is the smallest group of assets that is able to generate independent cash inflows.For goodwill formed by business combination intangible assets with uncertain service life and intangible assets

that have not yet reached the usable state regardless of whether there are signs of impairment impairment test

shall be carried out at least at the end of each year.When the Company conducts the goodwill impairment test the book value of goodwill formed by business

combination is apportioned to the relevant asset group according to reasonable methods from the date of purchase; if

it is difficult to apportion it to the relevant asset group apportion it to the relevant asset group portfolio. Relevant

asset group or assets portfolio is the asset group or combination of assets group that can benefit from the synergies

of the enterprise merger.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. Then conduct an impairment test on the asset

group or asset group portfolios containing goodwill and compare their book value with the recoverable amount. If

the recoverable amount is lower than the book value the amount of impairment loss first deducts the book value

of the goodwill allocated to the asset group or asset group portfolio and then deducts the book value of the other

assets in proportion according to the proportion of the book value of the other assets other than goodwill in the

asset group or asset group portfolio. Once recognized asset impairment loss would not be reversed in future

accounting period.22. 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 expenses of the

Company includes expenditures on improvement of investment real estate decoration fee and expenditure for

fixed assets improvement etc. Long term prepaid expense is amortized during the beneficial period under straight

line method.23. Contract liabilities

The Company lists contract assets or contract liabilities in the balance sheet based on the relationship between

performance obligations and customer payments. The Company's obligation to transfer goods or provide services

to customers for consideration received or receivable from customers is listed as contract liabilities. Contract

assets and contract liabilities under the same contract are presented in net amount.24. Staff remuneration

(1)Accounting treatment of short term remuneration

In the period of employee services short-term benefits are actually recognized as liabilities and charged to profit

or loss or relevant assets costs.Regarding to the social insurance and housing funds that the Company paid for employees the Company should

recognize corresponding employees benefits payable according to the appropriation basis and proportion as

stipulated by relevant requirements and recognize the corresponding liabilities.The employee welfare expenses incurred shall be recorded into the current gain/loss or the cost of relevant assets

according to the actual amount when actually incurred and the non-monetary welfare shall be measured at fair

value.

(2)Accounting treatment for post employment benefits

1)Defined contribution plan

The Company pays basic endowment insurance and unemployment insurance for employees according to the

relevant regulations of the local government. In the accounting period in which employees provide services for the

Company the amount to be paid is calculated according to the local payment base and proportion and is

recognized as a liability and included in current profit and loss or related asset cost. In addition the Company also

participates in the enterprise annuity plan/supplementary pension insurance fund approved by the relevant state

departments. The Company pays a certain percentage of the total wages of employees to the annuity plan/local

social insurance agency and the corresponding expenditures are included in the current profit and loss or the cost

of related asset.2)Defined benefit plan

The Company assigns the benefit obligation arising from the defined benefit plan to the period during which the

employee provides service according to the formula determined by the expected accumulated benefit unit method

and includes it in the current profit and loss or related asset cost.The deficit or surplus formed by the present value of the defined benefit plan obligation minus the fair value of the

defined benefit plan asset is recognized as a net benefit or net asset of the defined benefit plan. If there is a surplus in

the defined benefit plan the Company measures the net assets of the defined benefit plan by the lower of the surplus

and the asset limit of the defined benefit plan.All defined benefit plan obligations including obligations expected to be paid within twelve months of the end of

the annual reporting period in which the employee provides services are discounted based on the market return of

the national debt matching with the defined benefit plan obligations deadline and currency or the high quality

corporation bonds in an active market on the balance sheet date.The service cost generated by the defined benefit plan and the net liabilities or the net interest of the net assets of the

defined benefit plan are included in the current profit and loss or the related assets cost; the changes generated by the

remeasurement of net liabilities or net assets of the defined benefit plan are included in other comprehensive income

and will not be transferred back to profit or loss in the subsequent accounting period when the original defined

benefit plan is terminated the part that was originally included in other comprehensive income will be carried

forward to undistributed profit within the scope of equity.When settling the defined benefit plan the settlement gain or loss is confirmed by the difference between the present

value of the defined benefit plan obligation and the settlement price determined on the settlement date.3)Accounting treatment for dismissal benefit

If the Company provides dismissal benefits to employees the employee compensation liabilities arising from

dismissal benefits shall be recognized on the earlier date of the following two and shall be included in the current

profit and loss: When the company cannot unilaterally withdraw the dismissal benefits provided by the dismissal

plan or downsizing proposal; When the company confirms the costs or expenses related to the reorganization

involving the payment of dismissal benefits.4)Accounting treatment for other long term staff benefits

Other long term staff benefits refers to all the other staff benefits except for short term remuneration post 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

The Company will recognize the obligations related to contingencies as expected liabilities when they meet the

following conditions:

(1)The responsibility is a current responsibility undertaken by the Company;

(2)Fulfilling of the responsibility may lead to financial benefit outflow;

(3)The responsibility can be measured reliably for its value.

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.Where there is a continuous range of required expenditures and the probability of occurrence of various results within this range is

the same the best estimate is determined according to the median value in the range; in other cases the best estimate shall be

treated as follows:

· If a contingency involves a single item it shall be determined according to the amount most likely to occur.· If a contingency involves multiple items it shall be determined in accordance with various possible outcomes

and related probability calculation.If all or part of the expenditure required to pay off the estimated liabilities is expected to be compensated by a

third party the compensation amount shall be separately recognized as an asset when it is basically certain that it

can be received and the recognized compensation amount shall not exceed the book value of the estimated

liability.The Company reviews the book value of estimated liabilities on the balance sheet date. If there is conclusive

evidence that the book value does not reflect the current best estimate the book value will be adjusted according

to the current best estimate.26. Other financial instrument of preferred stocks and perpetual bond

The Company categorizes a financial instrument or its components as a financial asset a financial liability or an

equity instrument at the time of initial recognition based on the contractual terms of preferred stocks/perpetual

bonds issued and the economic substance it reflects not just in legal form.When a financial instrument such as perpetual bonds/preferred stocks issued by the Company meet one of the

following conditions the entire financial instrument or its components shall be classified as a financial liability at

the time of initial recognition.

(1) There are contractual obligations that the Company cannot unconditionally avoid fulfilling with the cash

payment or other financial assets;

(2) Contains contractual obligation to deliver variable amounts of own equity instruments for settlement;

(3) Contains derivative instrument that is settled with its own equity (such as conversion of equity etc.) and the

derivative instrument is not settled with a fixed amount of their own equity instruments in exchange for a fixed

amount of cash or other financial assets;

(4) There are contract clauses that indirectly form contract obligations;

(5) The perpetual bonds are in the same repayment order as the ordinary bonds and other debts issued by the

issuer at the time of liquidation by the issuer.For financial instruments such as perpetual bonds/preferred stocks that do not meet any of the above conditions

classify the financial instruments as a whole or their components as equity instruments at the time of initial

recognition.27. Revenue

Accounting policy used for revenue recognition and measurement

27.1 accounting policy applicable for the revenue recognition and measurement

The Company fulfills the performance obligations in the contract that is revenue is recognized when the

customer obtains control of the relevant goods or services. Obtaining control of related goods or services means

being able to lead the use of the goods or services and obtain almost all of the economic benefits from them.If the contract contains two or more performance obligations the Company will allocate the transaction price to

each individual performance obligation in accordance with the relative proportion of the stand-alone selling price

of the goods or services promised by each individual performance obligation on the starting date of the contract.The Company measures revenue based on the transaction price allocated to each individual performance

obligation.The transaction price refers to the amount of consideration that the Company expects to be entitled to receive due

to the transfer of goods or services to customers excluding payments collected on behalf of third parties and

payments expected to be returned to customers. The Company determines the transaction price in accordance with

the terms of the contract and combined with its past customary practices when determining the transaction price

it considers the influence of variable consideration major financing components in the contract non-cash

consideration consideration payable to customers and other factors. The Company determines the transaction

price that includes variable consideration at an amount that does not exceed the amount of accumulated

recognized revenue that is unlikely to be materially reversed when the relevant uncertainty is eliminated. If there

is a significant financing component in the contract the Company determines the transaction price based on the

amount payable in cash when the customer obtains control of the goods or services and uses the actual interest

method to amortize the difference between the transaction price and the contract consideration during the contract

period.It belongs to the performance obligation fulfilled within a certain period of time when meeting one of the

following conditions otherwise it belongs to the performance obligation fulfilled at a certain point in time:

·The customer obtains and consumes the economic benefits brought by the Company's performance at the same

time as the Company's performance.·Customers can control the products under construction in the Company's performance process.·The products produced by the Company during the performance of the contract have irreplaceable uses and the

Company has the right to collect payment for the accumulated performance part of the contract during the entire

contract period.For performance obligations performed within a certain period of time the Company recognizes revenue

according to the performance progress during that period except where the performance progress cannot be

reasonably determined. The Company considers the nature of the goods or services and adopts the output method

or the input method to determine the progress of performance. When the performance progress cannot be

reasonably determined and the costs incurred are expected to be compensated the Company shall recognize the

revenue according to the amount of the costs incurred until the performance progress can be reasonably

determined.For performance obligations performed at a certain point in time the Company recognizes revenue at the point

when the customer obtains control of the relevant goods or services. When judging whether a customer has

obtained control of goods or services the Company considers the following signs:

·The Company has the current right to collect payment for the goods or services that is the customer has the

current payment obligation for the goods or services.·The Company has transferred the legal ownership of the goods to the customer that is the customer has the legal

ownership of the goods.·The Company has transferred the goods to the customer in kind that is the customer has taken possession of the

goods in kind.·The Company has transferred the main risks and rewards of the ownership of the goods to the customer that is

the customer has obtained the main risks and rewards of the ownership of the goods.·The customer has accepted the goods or services etc.27.2 Specific principle

1) Revenue from sales of goods: the sales revenue is recognized after the goods sold domestically have been

delivered and the relevant terms agreed in the contract are met; for export sales the realization of sales revenue is

confirmed after the goods have been dispatched and declared in compliance with the relevant terms as agreed in

the contract. For export sales the sales revenue is recognized after the goods have been sent and declared and the

relevant terms agreed in the contract are met.2) Revenue from provision of labor services: For the dynamic reserve of grain and oil and its rotation services

provided by the Company to the Shenzhen Municipal Government the revenue is recognized when relevant labor

services occur the revenue from grain and oil reserve services is calculated and confirmed monthly based on the

actual amount of grain and oil reserves and the reserve price stipulated in the "Shenzhen Municipal Government

Grain Reserve Expenses Contract Operation Regulations" and the "Shenzhen Municipal Government Edible

Vegetable Oil Government Reserve Expenses Contract Operation Regulations".3) Other income:

i-The amount of royalty revenue is calculated and determined in accordance with the charging time and method

agreed in the relevant contract or agreement;

ii- Income from real estate terminal warehouse and other property leasing and terminal docking business is

calculated and recognized as the property rental income warehousing and logistics income.Differences in accounting policies for revenue recognition due to the different operating models for the same types of business

28. Government subsidy

28.1 Types

Governments subsidy 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 subsidy 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.Specific criteria for classifying the government subsidy as asset-related by the Company are: government subsidy

acquired for the acquisition and construction or other formation of long-term assets

Specific criteria for classifying the government subsidy as income-related by the Company are: government

subsidy obtained by the Company other than those related to assets.28.2 Recognition time point

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

subsidy. After that government subsidy shall recognize while actually received.Government subsidy in the form of monetary assets are stated at the amount received or receivable. Government

subsidy 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 subsidy measured at nominal amount is recognized immediately in profit

or loss for the current period.28.3 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 subsidy

Government subsidy related to assets is used to offset the book value of related assets or be recognized as deferred

income. If it is confirmed as deferred income it shall be included in the current profit and loss in a reasonable and

systematic way by stages within the useful life of the relevant assets (those related to the Company’s daily

activities are included in other income; those unrelated to the Company’s daily activities are included in the

non-operating income);

Government subsidy related to income that is used to compensate the Company's related costs or losses in

subsequent periods is recognized as deferred income and is included in the current profit and loss during the period

when the related costs or losses are recognized (those related to the Company’s daily activities are included in other

income; those unrelated to the Company’s daily activities are included in the non-operating income) or used to

offset related costs or losses; those used to compensate the Company’s related costs expenses or losses are directly

included in the current profit and loss (those related to the Company’s daily activities are included in other income;

those unrelated to the Company’s daily activities are included in the non-operating income) or used to offset

related costs or losses.The policy-related preferential loan interest discounts obtained by the Company shall be accounted for separately

in the following two situations:

(1)The finance allocates interest discount funds to the lending bank. If the lending bank provides loans to the

Company at a policy-based preferential interest rate the Company will use the actually received loan amount as

the entry value of the loan and calculate related borrowing costs according to the loan principal and the

policy-based preferential interest rate.

(2) If the finance directly allocates interest discount funds to the Company the Company will write down the

relevant borrowing costs with the corresponding interest discount.29. Deferred income tax assets and deferred income tax liabilities

Income tax includes current income tax and deferred income tax. Except for income tax arising from business mergers and

transactions or events that are directly included in owner's equity (including other comprehensive income) the Company include

current income tax and deferred income tax in current profit and loss.Deferred income tax assets and deferred income tax liabilities are calculated and recognized based on the

difference (temporary difference) between the tax base of assets and liabilities and their book value.Deductible temporary differences recognized by deferred income tax assets is limited to the taxable income that is

likely to be obtained in the future to deduct deductible temporary differences. For the deductible losses and tax

deductions that can be carried forward for subsequent years are limited to the future taxable income that is likely

to be obtained to deduct deductible and tax deductions.For taxable temporary differences except for special circumstances deferred income tax liabilities are recognized.Special circumstances that do not recognize deferred income tax assets or deferred income tax liabilities include:

· Initial recognition of goodwill;

· Transactions or events that neither are a business combination nor affect accounting profits and taxable income

(or deductible losses) when occur.For taxable temporary differences related to investments in subsidiaries associates and joint ventures deferred

income tax liabilities are recognized unless the Company can control the timing of the reversal of the temporary

differences and the temporary differences are not likely to be reversed in the foreseeable future. For deductible

temporary differences related to investments in subsidiaries associates and joint ventures when the temporary

differences are likely to be reversed in the foreseeable future and are likely to be used to deduct the taxable

income of deductible temporary differences in the future recognize deferred income tax assets.On the balance sheet date deferred income tax assets and deferred income tax liabilities are measured at the

applicable tax rate during the period when the relevant assets are expected to be recovered or the relevant

liabilities are expected to be paid off in accordance with the provisions of the tax law.On the balance sheet date the Company reviews the book value of deferred income tax assets. If it is probable that

sufficient taxable income cannot be obtained in the future to offset the benefits of deferred income tax assets the

book value of the deferred income tax assets shall be written down. When it is possible to obtain sufficient taxable

income the write-down amount shall be reversed.When there is a statutory right to settle on a net basis and an intention to settle on a net basis or acquire assets and

pay off liabilities at the same time the current income tax assets and current income tax liabilities are presented at

the net amount after offsetting.On the balance sheet date deferred income tax assets and deferred income tax liabilities shall be listed as the net

amount after offset when the following conditions are met at the same time:

· The tax subject has the statutory right to settle current income tax assets and current income tax liabilities on a

net basis;

·Income tax assets and deferred income tax liabilities are related to the income tax levied by the same tax

administration department on the same taxation subject or related to different taxation subjects however in the

period during which each important deferred income tax asset and liability are reversed in the future the taxpayer

involved intends to settle the current income tax assets and liabilities on a net basis or obtain assets and settle

liabilities at the same time.30. Lease

(1)Accounting treatment for operating lease

Accounting policy since 1 Jan. 2021

A lease is a contract whereby the lessor transfers the right to the use of an asset to the lessee for a certain period of

time in exchange for consideration. On the commencement date of the contract the Company evaluates whether

the contract is a lease or includes a lease. A contract is a lease or includes a lease if one party transfers the right to

control the use of one or more identified assets for a certain period of time in exchange for consideration.If the contract contains multiple separate leases at the same time the Company will divide the contract and make

accounting treatment for each separate lease. If the contract contains both leasing and non-leasing parts the lessee

and lessor shall divide the leasing and non-leasing parts.30.1. The Company acts as the lessee

(1) Right-of-use assets

On the commencement date of the lease term the Company recognizes the right-of-use assets for leases other than

short-term leases and low-value asset leases. The right-of-use assets shall be initially measured at cost. The cost

includes:

The initial measurement amount of lease liabilities;

Where the lease payments paid on or before the commencement date of the lease term have a lease incentive the

amount of the lease incentive already enjoyed shall be deducted;

Initial direct costs incurred by the Company;

Costs expected to be incurred by the Company to dismantle and remove the leased assets restore the sites where

the leased assets locate or restore the leased assets to the state agreed upon in the lease terms excluding costs

incurred for the production of inventory.The Company shall subsequently use the straight-line method to calculate the depreciation of the right-of-use

assets. Where ownership of the leased asset can be reasonably determined at the end of the lease term the

Company shall calculate the depreciation during the remaining useful life of the leased asset; Otherwise the

depreciation of the leased asset is calculated during the period which is shorter between the lease term and the

remaining useful life of the leased asset.The Company determines whether the right-of-use asset impairment has occurred in accordance with the

principles described in the Notes "21. Impairment of Long-term Assets" and makes accounting treatment for the

identified impairment loss.

(2) Lease liabilities

On the commencement date of the lease term the Company recognizes the lease liabilities for leases other than

short-term leases and low-value asset leases. Lease liabilities are initially measured at the present value of

outstanding lease payments. The lease payments include:

Where there is a lease incentive in the fixed payments (including the substantive fixed payments) deduct the lease

incentive;

Variable lease payments depending on the index or ratio;

The payments estimated to be paid according to the guaranteed residual value provided by the company;

The executive price of the call option provided that the company reasonably determines that the option will be

exercised;

The payments payable to exercise the termination of lease option provided that the lease term reflects that the

company shall exercise the termination of lease option.The Company uses the interest rate implicit in lease as the discount rate but if the interest rate implicit in lease

cannot be reasonably determined the Company's incremental borrowing rate shall be used as the discount rate.The Company calculates the interest expense of the lease liability in each period of the lease term at a fixed

periodic rate and records it into the current profits and losses or the cost of underlying asset.The variable lease payments not included in the measurement of lease liabilities are booked into the profits and

losses of the current period or the cost of related assets when actually incurred.After the commencement date of the lease term if any of the following circumstances occurs the Company shall

re-measure the lease liabilities and adjust the corresponding right-of-use assets. If the book value of the

right-of-use assets has been reduced to zero but the lease liabilities still need to be further reduced the difference

shall be recorded into the profits and losses of the current period.If the evaluation results of the call option the lease renewal option or the termination option changes or the actual

exercise of the said option is inconsistent with the original evaluation results the Company shall remeasure the

lease liability at the present value calculated by the changed lease payment and the revised discount rate;

In the event of a change in the substantive fixed payment a change in the amount expected to be payable for the

guaranteed residual value or a change in the index or ratio used to determine the lease payment the Company

shall remeasure the lease liability according to the present value calculated by the changed lease payment and the

original discount rate. However where changes in lease payments result from changes in floating interest rates

the present value is calculated by using the revised discount rate.

(3) Short-term leases and low-value asset leases

The Company chooses not to recognize the right-of-use assets and lease liabilities for short-term leases and

low-value asset leases and records the relevant lease payments into the current profits and losses or related asset

costs in accordance with the straight-line method for each period of the lease term. A short-term lease is a lease

not exceeding 12 months and excluding the call option on the commencement date of the lease term. The

low-value asset lease refers to a lease with a lower value when a single leased asset is a new asset. Where the

company subleases or expects to sublease the leased asset the original lease is not a low-value asset lease.

(4) Lease change

If the lease changes and meets the following conditions at the same time the Company will treat the lease change

as a separate lease for accounting treatment:

The lease change expands the lease scope by increasing one or more right of use of the leased assets;

The increased consideration and the separate price for the extension portion of the lease shall be equivalent to the

amount adjusted according to the contract.If the lease change is not regarded as a separate lease for accounting treatment the company shall on the effective

date of the lease change reapportion the consideration of the contract after the change redetermine the lease term

and remeasure the lease liabilities according to the present value calculated by the changed lease payments and the

revised discount rate.If the lease change results in the narrowing of the lease scope or the shortening of the lease term the Company

shall adjust the book value of the right-of-use assets accordingly and record the profits or losses related to partial

or complete termination of lease into the profits and losses of the current period. The Company shall adjust the

book value of the right-of-use assets accordingly if the lease liabilities are remeasured due to other lease changes.30.2 The Company acts as the lessor

On the commencement date of the lease the lease receipts of operating lease are recognized as rental income in

accordance with the straight-line method for each period of the lease term. The Company capitalizes the initial

direct costs incurred in connection with the operating lease and appoints them into the current profits and losses

on the same basis as the rental income recognition during the lease term. Variable lease payments not included in

lease receipts are recorded in the current profits and losses when they actually occur. If the operating lease

changes the Company shall treat it as a new lease for accounting treatment as of the effective date of the change

and the lease receipts collected in advance or receivable related to the lease before change shall be regarded as the

receipts of the new lease.Accounting policy before 1 Jan. 2021

1)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)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 treatment for financing lease

Accounting policy since 1 Jan. 2021

On the commencement date of the lease the Company recognizes the finance lease receivable for the finance

lease and terminates the recognition of the finance lease assets. In the initial measurement of the finance lease

receivable the Company shall take the net lease investment as the entry value of the finance lease receivable. The

net lease investment is the sum of the unguaranteed residual value and the present value of the lease receipts not

yet received at the commencement date of the lease term and discounted at the interest rate implicit in lease.The Company calculates and recognizes the interest income for each period of the lease term at a fixed periodic

interest rate. The accounting treatment for the termination of recognition and the impairment of the finance lease

is conducted in accordance with the Notes "9. Financial Instruments".Variable lease payments not included in the measurement of net lease investment are recorded in the current

profits and losses when they actually occur.If the finance lease changes and meets the following conditions at the same time the Company will treat the

change as a separate lease for accounting treatment:

The change expands the lease scope by increasing one or more right of use of the leased assets;

The increased consideration and the separate price for the extension portion of the lease shall be equivalent to the

amount adjusted according to the contract.If the change of finance lease is not regarded as a separate lease for accounting treatment the Company will

treat the changed lease as follows:

If the change takes effective on the commencement date of the lease the lease will be classified as an operating

lease and the Company will take it as a new lease for accounting treatment as of the effective date of the lease

change and take the net lease investment before the effective date of the lease change as the book value of the

leased asset;

If the change takes effective on the commencement date of the lease the lease will be classified as a finance lease

and the Company will comply with the policies on modification or renegotiation of contract in Notes "9. Financial

Instruments" for accounting treatment.Accounting policy before 1 Jan. 2021

(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. Unrecognized financing expenses shall be reckoned in financial

expenses and amortized and using effective interest method during the leasing period. The initial direct expenses

incurred by the Company are included in the value of the rented assets.

(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.31. Other important accounting policy and estimation

Safety production expenses

The safety production expenses drawn by the Company in accordance with the national regulations are included in

the cost of relevant products or the current profit and loss and are recorded in the “special reserve” account. When

using the drawn safety production expenses directly offset the special reserve if it belongs to the expense

expenditure. For fixed assets the expenses incurred through the collection of “under construction” subjects shall be

recognized as fixed assets when the safety project is completed and ready for use. At the same time the special

reserve shall be offset according to the cost of forming the fixed assets and accumulated depreciation of the same

amount shall be recognized. The fixed assets will no longer be depreciated in the future.32. Changes of important accounting policy and estimation

(1)Changes of important accounting policies

√ Applicable □ Not applicable

Content & reasons Approval procedure Note

32.1Changes of important accounting estimate

(1) Implementation of the Accounting Standards for Business Enterprises No. 21 - Lease (2018 Revision)

The Ministry of Finance revised the Accounting Standards for Business Enterprises No. 21 -- Lease ("New Lease

Standards" for short) in 2018. The Company has implemented the new lease standards from January 1 2021.According to the revised standards the company chooses not to re-evaluate whether they are leases or include

leases on the first execution date for contracts that already exist prior to the first execution date.· The Company acts as the lessee

The Company chooses to adjust the amount of retained earnings and other relevant items in its financial

statements at the beginning of the year of the first implementation of the new lease standards based on the

cumulative impact of the first implementation of the new lease standards without adjusting the comparable period

information.For an operating lease existing prior to the first execution date the Company shall measure the lease liabilities at

the first execution date based on the present value of the remaining lease payment discounted at the incremental

borrowing rate of the Company at the first execution date and measure the right-of-use assets according to one of

the following two ways for each lease:

Assume that the book value of the new lease standards is adopted on the start date of the lease term and the

Company's incremental borrowing rate on the first execution date is used as the discount rate.Make necessary adjustments to the prepaid rent for the amount equal to the lease liability.For operating leases prior to the first execution date the Company may choose one or more of the following

simplified treatments for each lease in conjunction with the above method:

1) The leases completed within 12 months after the first execution date shall be treated as short-term leases;

2) When measuring lease liabilities leases with similar features shall use the same discount rate;

3) The measurement of the right-of-use assets does not include the initial direct cost;

4) Where there is an option to renew or terminate the lease the lease term shall be determined according to the

actual exercise of the option prior to the first exercise and other latest conditions;

5) As an alternative to the impairment test of the right-of-use asset assess whether the contract containing the

lease is a loss contract prior to the first execution date in accordance with the Notes "25. Estimated Liabilities"

and adjust the right-of-use asset according to the amount of loss provisions recorded in the balance sheet prior to

the first execution date;

6) The lease changes occurring before the first execution date shall not be retroactively adjusted and the

accounting treatment shall be conducted in accordance with the final arrangement of lease changes and the new

lease standards.For the finance lease existing before the first execution date the Company shall measure the right-of-use assets

and lease liabilities respectively on the first execution date according to the original book value of the finance

lease assets and the finance lease payments payable.· The Company acts as the lessor

For the subleases classified as operating leases prior to the first execution date and surviving after the first

execution date the Company will re-evaluate them on the first execution date on the basis of the remaining

contract term and terms of the original lease and the sublease and classify them in accordance with the provisions

of the new lease standards. If they are reclassified as finance leases the Company will treat them as new finance

leases.Except for subleases the Company does not need to adjust the leases on which it is the lessor in accordance with

the new lease standards. The company shall conduct accounting treatment in accordance with the new lease

standards from the first execution date.The main effects of the Company's implementation of the new lease standards on the financial statements are as

follows:

Content and reasons for Statement items affected Impact on the amount on balance as of 1 Jan. 2021

changes in accounting Consolidate Parent company

policies

As a lessee the adjustment of Right-of-use assets 2329027.97

the operating leases existing

before the date of fist Lease liability 2329027.97

execution

(2) Implementation of the "Interpretation No. 14 of Accounting Standards for Business Enterprises"

The Ministry of Finance promulgated the "Interpretation No. 14 of Accounting Standards for Business

Enterprises" (CK[2021] No. 1 hereinafter referred to as "Interpretation No. 14") on February 2 2021 which has

taken effect as of the date of promulgation. The relevant business added from January 1 2021 to the effective date

shall be adjusted according to Interpretation No. 14.① Public-private partnership (PPP) project contracts

Interpretation No. 14 is applicable for the PPP project contracts that meet the "dual features" and "double

controls" described in the interpretation at the same time and makes retroactive adjustment on the relevant PPP

project contracts that have been implemented before December 31 2020 and have not been completed up to the

implementation date where the retroactive adjustment is not feasible the application begins at the beginning of

the earliest period of retroactive adjustment cumulative impact adjusts the retained earnings at the beginning of

the year of the implementation date and other related items in the financial statements and information of

comparable periods shall not be adjusted. The implementation of the provisions does not have a significant impact

on the Company's financial situation and operating results.② Interest rate benchmark reform

Interpretation No. 14 provides a simplified accounting treatment for cases where the basis for determining cash

flows related to financial instrument contracts and lease contracts is changed as a result of the interest rate

benchmark reform.According to the provisions of this interpretation businesses related to the interest rate benchmark reform

occurring before December 31 2020 shall be subject to retroactive adjustment except where retroactive

adjustment is not feasible and there is no need to adjust the data in the previous comparative financial statements.On the implementation date of this interpretation the difference between the original carrying value of financial

assets and financial liabilities and the new carrying value shall be included in the retained earnings or other

comprehensive income at the beginning of the annual reporting period of the implementation date of this

interpretation. The implementation of the provisions does not have a significant impact on the Company's

financial situation and operating results.

(3) Execution of the “Notice on the Adjustment of the Scope of Application of the Provisions on the AccountingTreatment of COVID-19 Related Rent Concessions”

On June 19 2020 the Ministry of Finance issued the "Regulations on Accounting Treatment of Rental

Concessions Related to the COVID-19 Epidemic" (CK (2020) No. 10) and enterprises can choose to adopt

simplified methods for accounting treatments for rent concessions and deferred payment of rents directly caused

by the COVID-19 epidemic that meet the conditions.On May 26 2021 the Ministry of Finance promulgated the Notice on the Adjustment of the Scope of Application

of the Provisions on the Accounting Treatment of COVID-19 Related Rent Concessions (CK [2021] No. 9) which

has taken effective from May 26 2021 the scope of application of COVID-19 pandemic-related rent concessions

which are allowed to adopt the simplified method under the Provisions on the Accounting Treatment of

COVID-19 Related Rent Concessions is adjusted from the "the concession applies only to lease payments payable

before 30 June 2021" to "the concession only applies to lease payments payable before 30 June 2022" to "the

concession only applies to lease payments payable before 30 June 2022" and other conditions remain unchanged.The Company has selected the simplified accounting treatment method for all the eligible lease contracts before

the adjustment of scope of application and adopted the simplified accounting treatment method for all the eligible

and similar lease contracts after the adjustment of scope of application and made retroactive adjustment on

relevant lease contracts that had adopted lease change for accounting treatment before the release of the notice

but did not adjust the data of the previous comparative financial statement; The relevant rent concessions incurred

between January 1 2021 and the effective date of the notice of which accounting treatment are not conducted in

accordance with the provisions of the notice shall be adjusted in accordance with the notice.32.2Adjustment on the items of financial statements at beginning of the year when first exercise the new

lease standards

Consolidate balance sheet

Item Balance at end of Balance at Number adjusted

last year beginning of the

Re-classified Re-measured Total

year

Right-of-use assets 2329027.97 2329027.97 2329027.97

Lease liability 2329027.97 2329027.97 2329027.97

(2) Changes of important accounting estimate

□ Applicable √ Not applicable

(3)Adjustment on the relevant items of financial statement at beginning of the year when implemented the

new leasing standards since 2021

Applicable

Whether to adjust the items of balance sheet at the beginning of the year

√Yes □No

Consolidate balance sheet

In RMB

Item 2020-12-31 2021-01-01 Adjustments

Current assets:

Monetary fund 190494225.94 190494225.94

Settlement provisions

Capital lent

Trading financial

160621806.51 160621806.51

assets

Derivative financial

assets

Note receivable 2213426.00 2213426.00

Account receivable 198311102.17 198311102.17

Account receivable

financing

Accounts paid in

27136263.84 27136263.84

advance

Insurance receivable

Reinsurance

receivables

Contract reserve of

reinsurance receivable

Other account

22631043.66 22631043.66

receivable

Including: Interest

receivable

Dividend

receivable

Buying back the sale

of financial assets

Inventory 3418328974.27 3418328974.27

Contract asset

Assets held for sale

Non-current asset due

within one year

Other current assets 119750603.31 119750603.31

Total current assets 4139487445.70 4139487445.70

Non-current assets:

Loans and payments

on behalf

Creditors’ investment

Other creditors’

investment

Long-term account

receivable

Long-term equity

73215147.84 73215147.84

investment

Other equity

instrument investment

Other non-current

57500.00 57500.00

financial assets

Investment real estate 253037899.57 253037899.57

Fix assets 1122692490.55 1122692490.55

Construction in

1045643295.57 1045643295.57

progress

Productive biological

387694.20 387694.20

asset

Oil and gas asset

Right-of-use asset 2329027.97 2329027.97

Intangible assets 599306223.04 599306223.04

Expense on Research

and Development

Goodwill

Long-term expenses

31732325.01 31732325.01

to be apportioned

Deferred income tax

41347952.12 41347952.12

assets

Other non-current

2476174.33 2476174.33

assets

Total non-current assets 3169896702.23 3172225730.20 2329027.97

Total assets 7309384147.93 7311713175.90 2329027.97

Current liabilities:

Short-term loans 110318727.12 110318727.12

Loan from central

bank

Capital borrowed

Tradable financial

liability

Derivative financial

liability

Note payable

Account payable 480896517.64 480896517.64

Accounts received in

3376262.66 3376262.66

advance

Contract liabilities 108975866.82 108975866.82

Selling financial asset

of repurchase

Absorbing deposit and

interbank deposit

Security trading of

agency

Security sales of

agency

Wage payable 260514559.66 260514559.66

Taxes payable 66904735.29 66904735.29

Other account payable 397325719.50 397325719.50

Including: Interest

payable

Dividend

2933690.04 2933690.04

payable

Commission charge

and commission payable

Reinsurance payable

Liability held for sale

Non-current liabilities

104225183.07 104225183.07

due within one year

Other current

7250420.68 7250420.68

liabilities

Total current liabilities 1539787992.44 1539787992.44

Non-current liabilities:

Insurance contract

reserve

Long-term loans 841864531.75 841864531.75

Bonds payable

Including: preferred

stock

Perpetual

capital securities

Lease liability 2329027.97 2329027.97

Long-term account

16126146.20 16126146.20

payable

Long-term wage

payable

Accrual liabilities 3500000.00 3500000.00

Deferred income 100710038.32 100710038.32

Deferred income tax

12150035.13 12150035.13

liabilities

Other non-current

liabilities

Total non-current liabilities 974350751.40 976679779.37 2329027.97

Total liabilities 2514138743.84 2516467771.81 2329027.97

Owners’ equity:

Share capital 1152535254.00 1152535254.00

Other equity

instrument

Including: preferred

stock

Perpetual

capital securities

Capital public reserve 1422892729.36 1422892729.36

Less: Inventory shares

Other comprehensive

income

Reasonable reserve

Surplus public reserve 382367575.37 382367575.37

Provision of general

risk

Retained profit 1637536441.03 1637536441.03

Total owner’s equity

attributable to parent 4595331999.76 4595331999.76

company

Minority interests 199913404.33 199913404.33

Total owner’s equity 4795245404.09 4795245404.09

Total liabilities and

7309384147.93 7311713175.90 2329027.97

owner’s equity

Explanation on adjustment

Balance sheet of parent company

In RMB

Item 2020-12-31 2021-01-01 Adjustments

Current assets:

Monetary fund 5312806.71 5312806.71

Trading financial

621806.51 621806.51

assets

Derivative financial

assets

Note receivable

Account receivable 4087681.18 4087681.18

Account receivable

financing

Accounts paid in

advance

Other account

892105968.23 892105968.23

receivable

Including: Interest

receivable

Dividend

390000000.00 390000000.00

receivable

Inventory

Contract asset

Assets held for sale

Non-current asset due

within one year

Other current assets 1497597.50 1497597.50

Total current assets 903625860.13 903625860.13

Non-current assets:

Creditors’ investment

Other creditors’

investment

Long-term account

receivable

Long-term equity

3707714425.09 3707714425.09

investment

Other equity

instrument investment

Other non-current

financial assets

Investment real estate 16986504.04 16986504.04

Fix assets 33125275.65 33125275.65

Construction in

progress

Productive biological

387694.20 387694.20

asset

Oil and gas asset

Right-of-use asset

Intangible assets 12842693.98 12842693.98

Expense on Research

and Development

Goodwill

Long-term expenses

1040708.20 1040708.20

to be apportioned

Deferred income tax

assets

Other non-current

assets

Total non-current assets 3772097301.16 3772097301.16

Total assets 4675723161.29 4675723161.29

Current liabilities:

Short-term loans

Tradable financial

liability

Derivative financial

liability

Note payable

Account payable

Accounts received in

advance

Contract liabilities 411.00 411.00

Wage payable 26535794.31 26535794.31

Taxes payable 2736075.65 2736075.65

Other account payable 45560514.82 45560514.82

Including: Interest

payable

Dividend

payable

Liability held for sale

Non-current liabilities

due within one year

Other current

liabilities

Total current liabilities 74832795.78 74832795.78

Non-current liabilities:

Long-term loans

Bonds payable

Including: preferred

stock

Perpetual

capital securities

Lease liability

Long-term account

payable

Long-term wage

payable

Accrual liabilities 3500000.00 3500000.00

Deferred income

Deferred income tax

liabilities

Other non-current

liabilities

Total non-current liabilities 3500000.00 3500000.00

Total liabilities 78332795.78 78332795.78

Owners’ equity:

Share capital 1152535254.00 1152535254.00

Other equity

instrument

Including: preferred

stock

Perpetual

capital securities

Capital public reserve 3018106568.27 3018106568.27

Less: Inventory shares

Other comprehensive

income

Reasonable reserve

Surplus public reserve 109963147.23 109963147.23

Retained profit 316785396.01 316785396.01

Total owner’s equity 4597390365.51 4597390365.51

Total liabilities and

4675723161.29 4675723161.29

owner’s equity

Explanation on adjustment

(4) Retrospective adjustment of early comparison data description when implemented the new leasing

standards since 2021

□ Applicable √ Not applicable

33.Others

N/A

VI. Taxes

1. Type of tax and rate for main applicable tax

Taxes Basis Rate

The output tax is calculated on the basis

of the sales of goods and the taxable

service income calculated according to

VAT the tax law. After deducting the input tax 13% 9% 6% 5% 3%

amount that is allowed to be deducted in

the current period the difference part is

the value-added tax payable.Calculated according to the actual

Urban maintenance and construction tax 5% 7%

value-added tax and consumption tax

Enterprise income tax Calculated according to taxable income 25% 15% 10% 5%

Calculated according to the actual

Educational surtax 3%

value-added tax and consumption tax

Calculated according to the actual

Local education surcharge 2%

value-added tax and consumption tax

Price-based resource tax 1.2 percent of

the remaining value after deducting 20%

Property tax of the original value of the property; 12 1.20% 12%

percent of the rental income if levy by

rents.When the property right of the real

property is transferred the contract price

Deed tax 3%-5%

shall be paid to the owner of the property

right in one lump sum

Rate of income tax for different taxpaying body:

Taxpaying body Rate of income tax

Shenzhen Cereals Holdings Co. Ltd. 25%

Shenzhen Cereals Group Co. Ltd. (hereinafter referred to as

25% Some businesses are tax-free

"SZCG")

Shenzhen Hualian Grain & Oil Trade Co. Ltd. (hereinafter

25%

referred to as "Hualian Cereals and Oil")

Dongguan Hualian Grain & Oil Trade Co. Ltd. (hereinafter

25%

referred to as "Dongguan Hualian ")

Shenzhen Flour Co. Ltd. (hereinafter referred to as "Shenzhen

Tax-free

Flour")

Shenliang Quality Inspection Co. Ltd. (hereinafter referred to

5%

as "Shenliang Quality Inspection ")

Hainan Shenliang Oil & Food Co. Ltd. (hereinafter referred to

5%

as "Hainan Oil & Food")

Shenliang Doximi Business Co. Ltd. (hereinafter referred to as

25%

"Doximi")

Shenzhen Shenliang Big Kitchen Food Supply Chain Co.25%

Ltd(hereinafter referred to as "Big Kitchen ")

Shenzhen Shenliang Storage (Yingkou) Co. Ltd. (hereinafter

25%

referred to as "Yingkou Storage")

Shenzhen Shenliang Cold Chain Logistics Co. Ltd.15%

(hereinafter referred to as "Cold Chain Logistics")

Shenzhen Shenliang Property Development Co. Ltd.25%

(hereinafter referred to as " Shenliang Property")

Shenzhen Shenliang Property Management Co. Ltd.5%

(hereinafter referred to as "Shenliang Property")

Dongguan Shenliang Logistics Co. Ltd. (hereinafter referred

25%

to as "Dongguan Logistics")

Dongguan International Food Industrial Park Development

25%

Co. Ltd. (hereinafter referred to as "International Food")

Dongguan Shenliang Oil & Food Trade Co. Ltd. (hereinafter

25%

referred to as "Dongguan Oil & Food")

Shuangyashan Shenliang Zhongxin Cereals Base Co. Ltd. 25%

(hereinafter referred to as "Shuangyashan")

Heilongjiang Hongxinglong Nongken Shenxin Cereals

Industrial Park Co. Ltd. (hereinafter referred to as " 25%

Hongxinglong")

Shenzhen Shenbao Huacheng Science and Technology Co.25%

Ltd. (hereinafter referred to as "Shenbao Huacheng")

Wuyuan Ju Fang Yong Tea Industry Co. Ltd.(hereinafter

25%

referred to as "Wuyuan Ju Fang Yong")

Shenzhen Shenshenbao Investment Co. Ltd. (hereinafter

25%

referred to as "Shenbao Investment")

Shenzhen Shenshenbao Tea Culture Commercial Management

25%

Co. Ltd. (hereinafter referred to as "Shenbao Tea Culture")

Hangzhou Ju Fang Yong Holding Co. Ltd (hereinafter referred

25%

to as "Ju Fang Yong Holding ")

Hangzhou Ju Fang Yong Trading Co. Ltd. (hereinafter

25%

referred to as "Ju Fang Yong Trading ")

Hangzhou Fuhaitang Catering Management Chain Co. Ltd.25%

(hereinafter referred to as "Fuhaitang Catering")

Hangzhou Fuhaitang Tea Ecological Technology Co. Ltd.25%

(hereinafter referred to as "Fuhaitang Ecological")

Mount Wuyi Shenbao Rock Tea Co. Ltd. (hereinafter referred

25%

to as "Shenbao Rock Tea")

Yunnan Shenbao Pu’er Tea Supply Chain Management Co.25%

Ltd. (hereinafter referred to as "Pu’er Tea Supply Chain")

Shenzhen Shenliang Food Co. Ltd. (hereinafter referred to as

25%

"Shenliang Food ")

Yunnan Pu’er Tea Trading Center Co. Ltd. (hereinafter

25%

referred to as "Pu’er Tea Trading Center")

Huizhou Shenbao Food Co. Ltd. (hereinafter referred to as

25%

"Shenbao Food")

Huizhou Shenbao Technology Co. Ltd. (hereinafter referred to

25%

as "Huizhou Shenbao")

Shenzhen Shenbao Property Management Co. Ltd.10%

(hereinafter referred to as "Shenbao Property")

Shenzhen Shenbao Technology Center Co. Ltd. (hereinafter

25%

referred to as "Shenbao Technology")

Shenzhen Shenbao Industrial & Trading Co. Ltd. (hereinafter

25%

referred to as "Shenbao Industry and Trade")

Shenzhen Shenliang Hongjun Catering Management Co. Ltd. 25%

(hereinafter referred to as "Shenliang Hongjun")

2. Tax preferential

2.1 VAT discounts and approvalAccording to the “Notice of the Ministry of Finance and the State Administration of Taxation on the IssuesConcerning the VAT Collection and Exemption of Grain Enterprises (CSZ [1999] No. 198)” and “Shenzhen TaxService State Taxation Administration and Shenzhen Finance Bureau SGSF (SCF [1999] No.428)” 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 StateAdministration of Taxation on Relevant Management Matters After Clarifying the Cancellation of the Approval ofSome VAT Preferential Policies” (SAT Announcement 2015 No. 38) the approval for exemption from VAT 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

st

filing period started on January 1 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.2.2 Stamp duty house property tax and urban land use tax preferencesAccording to the stipulations of “Notice of the Ministry of Finance and the State Administration of Taxation onthe Relevant Tax Policies Concerning Some National Reserved Commodities (CS [2019] No. 77)” and

documents of Guangdong Province Department of Finance Guangdong Provincial Taxation Bureau of the State

Administration of Taxation and Guangdong Provincial Food and Material Reserve Bureau (Yue Cai Shui

[2020]No.2 confirming that the fund account book of SZCG the Company’s subsidiary and its direct depots 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 2021.2.3 Enterprise income tax

(1) 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.

(2) Shenzhen Flour a subsidiary of the Company is a flour primary processing enterprise according to thestipulations of the “Notice on Issuing the Scope (Trial) of Primary Processing of Agricultural Products Applicableto the Corporate Income Tax Preferential Policy (CS [2008] No. 149)” and the “Supplementary Notice on theScope of Primary Processing of Agricultural Products Applicable to the Corporate Income Tax Preferential Policyof the Ministry of Finance and the State Administration of Taxation” (CS [2011] No. 26) the wheat primary

processing is exempt from income tax.

(3) According to Article 1 CS [2021] No. 30 of the Notice on the Extension of Preferential Policies of Enterprise

Income Tax of Qianhai Shenzhen-Hong Kong Modern Service Industry Cooperation Zone in Shenzhen the

enterprise income tax of qualified enterprises located in Qianhai Shenzhen-Hong Kong Modern Service Industry

Cooperation Zone is levied at the rate of 15.00%. The Company's subsidiary cold chain logistics is registered in

Shenzhen Qianhai Cooperation Zone which is eligible for preferential tax conditions. According to relevant

policies of the cooperation zone its income tax will enjoy a preferential tax of 15.00% and the preferential tax

policy will end on December 31 2025.

(4) According to Article II of the "Notice of the State Taxation Administration and Ministry of Finance on the

Implementation of Inclusive Tax Relief Policies for Small and Micro Enterprises" (CS[2029] No. 13) the portion

of the annual taxable income of small low-profit enterprises that does not exceed 1 million yuan will be included

in the taxable income by 25% and the corporate income tax will be paid at a tax rate of 20%. The portion of the

annual taxable income of small low-profit enterprises exceeding 1 million yuan but not exceeding 3 million yuan

will be included in the taxable income by 50% and the corporate income tax will be paid at a tax rate of 20%. The

Company’s subsidiaries Quality Inspection Hainan Grain and Oil and SZCH Property are small and low-profit

enterprises that meet the conditions for preferential taxation and their income tax enjoys a 5% tax preference; the

Company’s subsidiary Shenbao Property is a small and low-profit enterprise that meets the conditions for

preferential taxation and its income tax enjoys a 10% tax preference.3. Other

Nil

VII. Annotation to main items of consolidated financial statements

1. Monetary funds

In RMB/CNY

Item Ending balance Opening balance

Cash on hand 100315.03 62642.11

Cash in bank 67609744.07 189169821.01

Other monetary fund 1064024.01 1261762.82

Total 68774083.11 190494225.94

Other explanation

The Company did not has account pledge freeze or has potential risks in collection ended as 30 June 2021.2. Tradable financial assets

In RMB/CNY

Item Ending balance Opening balance

Financial assets measured by fair value

and with variation reckoned into current 910778.83 160621806.51

gains/losses

Including:

Structured financial products 160000000.00

Equity investment instrument 910778.83 621806.51

Including:

Total 910778.83 160621806.51

Other explanation:

3. Note receivable

(1) Category

In RMB/CNY

Item Ending balance Opening balance

Bank acceptance bill 694376.00 2213426.00

Total 694376.00 2213426.00

In RMB/CNY

Ending balance Opening balance

Category

Book balance Bad debt Book Book balance Bad debt provision Book

provision value value

Amoun Amoun Accrua Amoun Accrual

Ratio Ratio Amount

t t l ratio t ratio

Including:

Including:

Bad debt provision accrual on single basis:

In RMB/CNY

Ending balance

Name

Book balance Bad debt provision Accrual ratio Accrual causes

Bad debt provision accrual on portfolio:

In RMB/CNY

Ending balance

Name

Book balance Bad debt provision Accrual ratio

Explanation on portfolio determines:

If the provision for bad debts of note receivable is made in accordance with the general model of expected credit losses please refer

to the disclosure of other account receivables to disclose related information about bad-debt provisions:

□ Applicable √Not applicable

4. Account receivable

(1) Category

In RMB/CNY

Ending balance Opening balance

Bad debt

Book balance Book balance Bad debt provision

Category provision Book Book

Amoun Amoun Accrua value Amoun Amoun Accrual value

Ratio Ratio

t t l ratio t t ratio

Account receivable

with bad debt 99461 12.24 96675 97.20 27865 99461 96675 278659

33.33% 97.20%

provision accrual 835.19 % 238.63 % 96.56 835.19 238.63 6.56

on a single basis

Including:

Account receivable

with single

significant amount 10455 10455 100.00 10455 10455 100.00

1.29% 3.50%

and withdrawal 627.54 627.54 % 627.54 627.54 %

bad debt provision

on single basis

Account receivable

with single minor

amount but with 89006 10.95 86219 96.87 27865 89006 86219 278659

29.83% 96.87%

bad debts provision 207.65 % 611.09 % 96.56 207.65 611.09 6.56

accrued on a single

basis

Account receivable

71307 70965 19893

with bad debt 87.76 34234 34116 195524

8324.2 0.48% 4842.4 6140.2 66.67% 1.71%

provision accrual % 81.81 34.68 505.61

6 5 9

on portfolio

Including:

27922 27579 12337

Combination of 34.46 34234 34116 1199663

2500.8 1.23% 9019.0 8031.8 41.35% 2.77%

sales receivables % 81.81 34.68 97.15

2 1 3

43385 43385

Specific object 53.40 75558 755581

5823.4 5823.4 25.32%

combinations % 108.46 08.46

4 4

81254 10009 71244 29839 10008

100.00 12.32 100.00 1983111

Total 0159.4 8720.4 1439.0 7975.4 6873.3 33.54%

% % % 02.17

5 4 1 8 1

Bad debt provision accrual on single basis:

In RMB/CNY

Ending balance

Name

Book balance Bad debt provision Accrual ratio Accrual causes

Guangzhou Jinhe Feed Slightly possibly taken

10455627.54 10455627.54 100.00%

Co. Ltd back

Shenzhen Faqun Slightly possibly taken

4582156.00 4582156.00 100.00%

Industry Co. Ltd. back

Li Shaoyu owes for Slightly possibly taken

2929128.53 2929128.53 100.00%

goods back

Slightly possibly taken

Hengyang Feed factory 2591566.65 2591566.65 100.00%

back

Zhuhai Doumen Huabi Slightly possibly taken

2396327.14 2396327.14 100.00%

Feed Co. Ltd. back

Chongqing Zhongxing

Slightly possibly taken

Food Industry Co. 2354783.30 2354783.30 100.00%

back

Ltd.Shenzhen Buji

Slightly possibly taken

Agricultural Products 1534512.45 1534512.45 100.00%

back

Wholesale Center

Market Xingmin

Commercial Bank

Slightly possibly taken

Cao Shengyun 1429745.00 1429745.00 100.00%

back

Huaxing Feed Factory

Slightly possibly taken

Shunde District 1290274.22 1290274.22 100.00%

back

Foshan City

Slightly possibly taken

Shanghai office 1059295.90 1059295.90 100.00%

back

Shenzhen Dihuan

Investment Slightly possibly taken

1045356.50 1045356.50 100.00%

Development back

Company

Slightly possibly taken

Other single provision 67793061.96 65006465.40 95.89%

back

Total 99461835.19 96675238.63 -- --

Bad debt provision accrual on single basis:

In RMB/CNY

Ending balance

Name

Book balance Bad debt provision Accrual ratio Accrual causes

Bad debt provision accrual on portfolio:

In RMB/CNY

Ending balance

Name

Book balance Bad debt provision Accrual ratio

Combination of sales

279222500.82 3423481.81 1.23%

receivables

Specific object combinations 433855823.44

Total 713078324.26 3423481.81 --

Explanation on portfolio determines:

Bad debt provision accrual on portfolio:

In RMB/CNY

Ending balance

Name

Book balance Bad debt provision Accrual ratio

Explanation on portfolio determines:

If the provision for bad debts of account receivable is made in accordance with the general model of expected credit losses please

refer to the disclosure of other account receivables to disclose related information about bad-debt provisions:

□ Applicable √Not applicable

By account age

In RMB/CNY

Account age Ending balance

Within one year (including 1-year) 709154553.26

1-2 years 1997698.44

2-3 years 4291591.73

Over 3 years 97096316.02

3-4 years 997736.66

4-5 years 796616.58

Over 5 years 95301962.78

Total 812540159.45

(2) Bad debt provision accrual collected or reversal in the period

Bad debt provision accrual in the period:

In RMB/CNY

Amount changed in the period

Opening

Category Collected or Ending balance

balance Accrual Written-off Other

reversal

Bad debt

provision

96675238.63 96675238.63

accrual on

single basis

Sales

3411634.68 11847.13 3423481.81

receivable

Total 100086873.31 11847.13 100098720.44

Including major amount bad debt provision that collected or reversal in the period:

In RMB/CNY

Enterprise Amount collected or reversal Collection way

Nil

(3) Top 5 account receivables at ending balance by arrears party

In RMB/CNY

Ending balance of accounts Proportion in total receivables Bad debt preparation ending

Enterprise

receivable at ending balance balance

First 433676208.60 53.37%

Second 116537624.81 14.34% 1165376.25

Third 47968235.57 5.90% 479682.36

Fourth 15645347.20 1.93% 156453.47

Fifth 11998839.55 1.48% 119988.40

Total 625826255.73 77.02%

5. Accounts paid in advance

(1) By account age

In RMB/CNY

Ending balance Opening balance

Account age

Amount Ratio Amount Ratio

Within one year 74621066.06 98.51% 26384747.13 97.23%

1-2 years 990625.12 1.31% 616328.73 2.27%

2-3 years 62060.02 0.08% 61695.87 0.23%

Over 3 years 74655.37 0.10% 73492.11 0.27%

Total 75748406.57 -- 27136263.84 --

Explanation on reasons of failure to settle on important account paid in advance with age over one year:

(2) Top 5 account paid in advance at ending balance by prepayment object

Proportion in of total prepayment

Prepaid objects Ending balance

balance at the end of period (%)

First 51099594.05 67.46

Second 6098013.75 8.05

Three 4806333.75 6.35

Fourth 2120000.00 2.80

Fifth 1794973.44 2.37

Total 65918914.99 87.03

Other explanation:

6. Other account receivable

In RMB/CNY

Item Ending balance Opening balance

Other account receivable 18588482.62 22631043.66

Total 18588482.62 22631043.66

(3) Other account receivable

1) By nature

In RMB/CNY

Nature Ending book balance Opening book balance

Margin and deposit 5419081.24 14965660.96

Other intercourse funds 110917774.74 105459789.74

Total 116336855.98 120425450.70

2) Accrual of bad debt provision

In RMB/CNY

Phase I Phase II Phase III

Expected credit losses for Expected credit losses for

Expected credit

Bad debt provision the entire duration the entire duration (with Total

losses over next 12

(without credit credit impairment

months

impairment occurred) occurred)

Balance on Jan. 1

2380495.42 95413911.62 97794407.042021

Balance of Jan. 1 2021

—— —— —— ——

in the period

Current accrual -266212.27 220207.77 -46004.50

Current write-off 29.18 29.18

Balance on Jun. 30

2114253.97 95634119.39 97748373.362021

Change of book balance of loss provision with amount has major changes in the period

□ Applicable √Not applicable

By account age

In RMB/CNY

Account age Ending balance

Within one year (including 1-year) 15684570.95

1-2 years 3946102.73

2-3 years 1048008.68

Over 3 years 95658173.62

3-4 years 1329095.17

4-5 years 683347.93

Over 5 years 93645730.52

Total 116336855.98

3) Bad debt provision accrual collected or reversal in the period

Bad debt provision accrual in the period:

In RMB/CNY

Amount changed in the period

Opening

Category Collected or Ending balance

balance Accrual Written off Other

reversal

Bad debt

provision

95413911.62 220207.77 95634119.39

accrual on

single basis

Bad debt

provision

2380495.42 -266212.27 29.18 2114253.97

accrual on

portfolio

Total 97794407.04 -46004.50 29.18 97748373.36

Including major amount with bad debt provision reverse or collected in the period:

In RMB/CNY

Enterprise Amount reversal or collected Collection way

4) Top 5 other receivables at ending balance by arrears party

In RMB/CNY

Ratio in total

Bad debt

ending balance of

Enterprise Nature Ending balance Account age preparation ending

other account

balance

receivables

First Intercourse funds 24384884.84 Over 5 years 20.96% 21963786.56

Second Intercourse funds 8326202.63 Over 5 years 7.16% 8326202.63

Three Intercourse funds 8285803.57 Over 5 years 7.12% 8285803.57

Fourth Intercourse funds 5677473.59 Over 5 years 4.88% 5677473.59

Fifth Intercourse funds 5602468.81 Over 5 years 4.82% 5602468.81

Total -- 52276833.44 -- 44.94% 49855735.16

7. Inventories

Whether companies need to comply with the disclosure requirements of the real estate industry

No

(1) Category

In RMB/CNY

Ending balance Opening balance

Inventories fall Inventories fall

provision or provision or

contract contract

Item

Book balance performance Book value Book balance performance Book value

costs costs

impairment impairment

provision provision

Raw materials 76395063.80 16559251.32 59835812.48 68152781.12 16559251.32 51593529.80

Inventory 4135095644. 4023558725. 3431982588. 3321835893.111536919.08 110146694.45

goods 49 41 15 70

Revolving

1785312.27 887023.20 898289.07 5614055.57 887023.20 4727032.37

material

Goods in transit 7350107.95 7350107.95 7582654.13 7582654.13

Consignment

processing 6095792.03 5290502.32 805289.71 5388478.79 5290502.32 97976.47

materials

Semi-finished

29487509.61 29487509.61 27672374.13 27672374.13

products

Low-value

consumables-p 8315234.63 8315234.63 4819513.67 4819513.67

ackaging

4264524664. 4130250968. 3551212445. 3418328974.Total 134273695.92 132883471.29

78 86 56 27

(2) Inventories fall provision or contract performance costs impairment provision

In RMB/CNY

Current amount increased Current amount decreased

Opening

Item Reversal or Ending balance

balance Accrual Other Other

write-off

Raw materials 16559251.32 16559251.32

Inventory

110146694.45 111448173.12 110057948.49 111536919.08

goods

Revolving

887023.20 887023.20

material

Consignment

processing 5290502.32 5290502.32

materials

Total 132883471.29 111448173.12 110057948.49 134273695.92

8. Other current assets

In RMB/CNY

Item Ending balance Opening balance

Financial products 20000000.00 10000000.00

Other

Input tax to be deducted 106719728.35 109023326.25

Prepaid enterprise income tax 727277.06

Total 126719728.35 119750603.31

Other explanation:

9. Long-term equity investment

In RMB/CNY

Current changes (+-)

Ending

Investm Cash

Openin Other Accrual balance

ent dividen Ending

The g Additio compre of of

Capital gains Other d or balance

investe balance nal hensive impair impair

reducti recogni equity profit Other (book

d entity (book investm income ment ment

on zed change announ value)

value) ent adjustm provisi provisi

under ced to

ent on on

equity issued

I. Joint venture

II. Associated enterprise

Zhuhai

Hengxi

ng Feed 33002 32499 33327

Industri 039.62 8.58 038.20

al Co.Ltd.Shenzh

en

33596 -18554 31740

Duoxi

01.93 8.73 53.20

Equity

Investm

ent

Fund

Manage

ment

Co.Ltd.Shenlia

ng

Intellig

ent

Wulian

Equity

Investm

ent

26255 -10951 26146

Fund

667.98 5.52 152.46

(Shenz

hen)

Partner

ship

Enterpr

ise

(Limite

d)

Shenzh

en

Shenyu

10597 41024 11008

an Data

838.31 5.34 083.65

Tech.Co.Ltd

Shenzh

en

Shenba

o

57628.(Liaoyu53

an)

Industri

al Co.Ltd.Shenzh

en 28700

Shenba 00.00

o

(Xinmi

n)

Foods

Co.Ltd.Changz

hou

Shenba

o

Chacan

g

E-busin

ess Co.Ltd.Shenzh

en

Shichu

mingm

en

Restaur

ant

Manage

ment

Co.Ltd.Subtota 73215 44017 73655 29276

l 147.84 9.67 327.51 28.53

73215 44017 73655 29276

Total

147.84 9.67 327.51 28.53

Other explanation

10. Other non-current financial assets

In RMB/CNY

Item Ending balance Opening balance

Financial assets measured at fair value

and whose changes are included in the

current profit and loss

Including: Debt instrument investment

Equity instrument investment 57500.00 57500.00

Total 57500.00 57500.00

Other explanation:

11. Investment real estate

(1) Measured at cost

√ Applicable □Not applicable

In RMB/CNY

Construction in

Item House and building Land use right Total

progress

I. Original book value

1.Opening balance 590440328.15 590440328.15

2.Current amount

increased

(1) Outsourcing

(2) Inventory\fixed

assets\construction in

process transfer-in

(3) Increased by

combination

3.Current amount

decreased

(1) Disposal

(2) Other transfer-out

4.Ending balance 590440328.15 590440328.15

II. Accumulated

depreciation and

accumulated

amortization

1.Opening balance 337402428.58 337402428.58

2.Current amount

8190545.20 8190545.20

increased

(1) Accrual or

8190545.20 8190545.20

amortization

3.Current amount

decreased

(1) Disposal

(2) Other transfer-out

4.Ending balance 345592973.78 345592973.78

III. Impairment

provision

1.Opening balance

2.Current amount

increased

(1) Accrual

3. Current amount

decreased

(1) Disposal

(2) Other transfer-out

4.Ending balance

IV. Book value

1.Ending book value 244847354.37 244847354.37

2. Opening book value 253037899.57 253037899.57

12. Fixed assets

In RMB/CNY

Item Ending balance Opening balance

Fixed assets 1339289781.07 1122692490.55

Fixed assets disposal 15710.00

Total 1339305491.07 1122692490.55

(1) Fixed assets

In RMB/CNY

House and Machinery Transport Electronic and

Item Total

buildings equipment equipment other equipment

I. Original book

value:

1.Opening 1039002914.64 532316124.36 17662383.74 68287685.82 1657269108.56

balance

2.Current

206859963.77 20609099.53 37536.16 21125146.53 248631745.99

amount increased

(1) Purchase 849283.58 37536.16 14161752.45 15048572.19

(2) Construction in

progress 206859963.77 19759815.95 6963394.08 233583173.80

transfer-in

(3)

Increased by

combination

3.Current

810115.28 586965.42 641148.21 2038228.91

amount decreased

(1) Disposal

810115.28 586965.42 641148.21 2038228.91

or scrap

4.Ending

1245862878.41 552115108.61 17112954.48 88771684.14 1903862625.64

balance

II. Accumulated

depreciation

1.Opening

217598012.04 255179025.46 12517697.64 44323543.85 529618278.99

balance

2.Current

14397576.84 11888234.19 694122.18 4650771.70 31630704.91

amount increased

(1) Accrual 14397576.84 11888234.19 694122.18 4650771.70 31630704.91

3.Current

729103.75 329065.00 576309.60 1634478.35

amount decreased

(1) Disposal

729103.75 329065.00 576309.60 1634478.35

or scrap

4.Ending

231995588.88 266338155.90 12882754.82 48398005.95 559614505.55

balance

III. Impairment

provision

1.Opening

689332.71 4259116.44 9889.87 4958339.02

balance

2.Current

amount increased

(1) Accrual

3.Current

amount decreased

(1) Disposal

or scrap

4.Ending

689332.71 4259116.44 9889.87 4958339.02

balance

IV. Book value

1.Ending book

1013177956.82 281517836.27 4230199.66 40363788.32 1339289781.07

value

2. Opening

820715569.89 272877982.46 5144686.10 23954252.10 1122692490.55

book value

(2) Fix assets without property certification held

In RMB/CNY

Reasons for without the property

Item Book value

certification

House buildings 88736008.62 Still under processing

At present the relevant application and

House buildings 15188788.28

approval procedures are being started.Simple and temporary buildings etc

House buildings 10588288.49 cannot handle the property right

certificate

Simple and temporary buildings etc

House buildings 1178284.70 cannot handle the property right

certificate

Berth of wharf has right of use no need

House buildings 102533049.08

to handle the certificate

Berth of wharf has right of use no need

House buildings 154683436.23

to handle the certificate

Other explanation

(3) Fixed assets disposal

In RMB/CNY

Item Ending balance Opening balance

Fixed assets disposal 15710.00

Total 15710.00

Other explanation

13. Construction in progress

In RMB/CNY

Item Ending balance Opening balance

Construction in progress 868979194.24 1045643295.57

Total 868979194.24 1045643295.57

(1) Construction in progress

In RMB/CNY

Ending balance Opening balance

Item Impairment Impairment

Book balance Book value Book balance Book value

provision provision

Shenbao Plaza

3842333.64 3842333.64 3842333.64 3842333.64

project

Dongguan

grain storage

and wharf 105051055.18 105051055.18 266376815.54 266376815.54

matching

project

Pinghu Grain

Depot Phase III

Low

Temperature

Rice 13069797.53 13069797.53

Warehouse

Expansion and

Reconstruction

Project

Deep

processing of

Dongguan 692628.86 692628.86 513729.78 513729.78

Industry and

Trading Food

CDE storage of 736730017.78 736730017.78 720076609.48 720076609.48

Dongguan

Food Industrial

Park and wharf

mating projects

Grain storage

43334291.04 43334291.04

and processing

Water Leakage

Project of

2763915.81 2763915.81

Pinghu

Reservoir

Shuguang

Warehouse No.3 & No. 6

1992099.16 1992099.16

Refrigeration

Reconstruction

Project

Renovation of

supporting

loading and

unloading 1169025.00 1169025.00

facilities in

Pinghu

Reservoir

Cold chain

intelligent 3645282.94 3645282.94 3645282.94 3645282.94

system

Other 10693601.69 903189.74 9790411.95 6674716.56 903189.74 5771526.82

1050388818. 1045643295.Total 873724717.62 4745523.38 868979194.24 4745523.38

95 57

(2) Changes of major construction in progress

In RMB/CNY

Includi

Propor Accum ng:

Curren Interes

Other tion of ulated amoun

Openi t Transf t

decrea Ending project capital t of Capital

Item ng amoun er-in Progre capital

Budget sed in balanc invest ization capital resour

Name balanc t fixed ss ization

the e ment of ization ces

e increas assets rate in

Period in interes of

ed Period

budget t interes

t in

Period

Dongg

uan

grain

storag 1242 26637 10664 17199 10505 34175

77.00 77.00 1938

e and 00000 6815. 855.9 0616. 1055. 733.6 4.90% Other

% % 827.03

wharf 0.00 54 8 34 18 7

matchi

ng

project

Deep

proces

sing of

Dongg 29200

51372 17889 69262 42.00 42.00 4812

uan 0000. Other

9.78 9.08 8.86 % % 867.06

Industr 00

y and

Tradin

g Food

CDE

storag

e of

Dongg

uan

Food

1087 72007 16653 73673 87395 14547

Industr 95.00 95.00

30000 6609. 408.3 0017. 237.6 868.6 4.90% Other

ial % %

0.00 48 0 78 7 9

Park

and

wharf

mating

project

s

2621 98696 27497 17199 84247 12638 16486

Total 30000 7154. 163.3 0616. 3701. -- -- 3838. 695.7 --

0.00 80 6 34 82 40 2

14. Productive biological asset

(1) Measured by cost

√ Applicable □Not applicable

In RMB/CNY

Item Plant Livestock Forestry Fisheries Total

Tea tree

I. Original book

value

1.Opening

416771.28 416771.28

balance

2.Current

amount increased

(1)

Outsourcing

(2)

self-cultivate

3.Current

amount decreased

(1) Disposal

(2) Other

4.Ending

416771.28 416771.28

balance

II. Accumulated

depreciation

1.Opening

29077.08 29077.08

balance

2.Current

4846.20 4846.20

amount increased

(1) Accrual 4846.20 4846.20

3.Current

amount decreased

(1) Disposal

(2) Other

4.Ending

33923.28 33923.28

balance

III. Impairment

provision

1.Opening

balance

2.Current

amount increased

(1) Accrual

3.Current

amount decreased

(1) Disposal

(2) Other

4.Ending

balance

IV. Book value

1.Ending book

382848.00 382848.00

value

2. Opening

387694.20 387694.20

book value

15. Right-of-use asset

In RMB/CNY

Item House building Total

1.Opening balance 2329027.97 2329027.97

2.Current amount increased 96145899.53 96145899.53

—New lease 96145899.53 96145899.53

4.Ending balance 98474927.50 98474927.50

2.Current amount increased 8663657.57 8663657.57

(1) Accrual 8663657.57 8663657.57

4.Ending balance 8663657.57 8663657.57

1.Ending book value 89811269.93 89811269.93

2. Opening book value 2329027.97 2329027.97

Other explanation:

16. Intangible assets

(1) Intangible assets

In RMB/CNY

Non-patent

Item Land use right Patent Other Total

technology

I. Original book

value

1.Opening

633437630.19 47245918.89 40777889.56 34007377.25 755468815.89

balance

2.Current

95247.35 6846482.20 13683637.74 20625367.29

amount increased

(1)

95247.35 6846482.20 13683637.74 20625367.29

Purchase

(2) Internal R&D

(3)

Increased by

combination

3.Current

amount decreased

(1)

Disposal

4.Ending

633532877.54 47245918.89 47624371.76 47691014.99 776094183.18

balance

II. Accumulated

amortization

1.Opening

100424358.42 27673682.23 9037770.45 12343156.33 149478967.43

balance

2.Current

7569916.80 1026128.94 3526506.37 1257971.54 13380523.65

amount increased

(1) Accrual 7569916.80 1026128.94 3526506.37 1257971.54 13380523.65

3.Current

amount decreased

(1)

Disposal

4.Ending

107994275.22 28699811.17 12564276.82 13601127.87 162859491.08

balance

III. Impairment

provision

1.Opening

5553283.54 1130341.88 0.00 6683625.42

balance

2.Current

amount increased

(1) Accrual

3.Current

amount decreased

(1) Disposal

4.Ending

5553283.54 1130341.88 0.00 6683625.42

balance

IV. Book value

1.Ending

525538602.32 12992824.18 33929753.06 34089887.12 606551066.68

book value

2. Opening

533013271.77 14018953.12 30609777.23 21664220.92 599306223.04

book value

Ratio of the intangible assets from internal R&D in balance of intangible assets at period-end

(2) Land use rights without certificate of ownership

In RMB/CNY

Reasons for without the property

Item Book value

certification

Land use right 34305035.82 Still under processing

Other explanation:

17. Goodwill

(1) Goodwill Original book value

In RMB/CNY

The invested Opening Current increased Current decreased Ending balance

entity or balance

Formed by

matters

business Dispose

forming

combination

goodwill

Yunnan Pu’er

Tea Trading

673940.32 673940.32

Center Co.Ltd.Total 673940.32 673940.32

(2) Goodwill impairment provision

In RMB/CNY

The invested Current increased Current decreased

entity or

Opening

matters Ending balance

balance Accrual Dispose

forming

goodwill

Yunnan Pu’er

Tea Trading

673940.32 673940.32

Center Co.Ltd.Total 673940.32 673940.32

Relevant information about the assets group or portfolio goodwill included

Note: In May 2016 the 15% equity of Pu’er Tea Trading Center held by Yunnan Heng Feng Xiang Investment Co. Ltd was acquired

by Ju Fang Yong Holding the sub-subsidiary of the Company after completion of the acquisition the Company has control over the

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. As of June 30 2021 the impairment provision has been fully accrued.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

18. Long-term expenses to be apportioned

In RMB/CNY

Current amount Current

Item Opening balance Other decreased Ending balance

increased amortization

Improve 12887591.23 2760426.27 1820244.87 13827772.63

expenditure for fix

assets

Decoration fee 8966668.26 845069.45 7186859.67 2624878.04

Improve

expenditure for

4285771.94 160095.18 4125676.76

investment real

estate

Affiliated project

of resident area in

96739.87 13191.78 83548.09

Wuyuan Ju Fang

Yong

Other 5495553.71 3853942.89 778761.01 8570735.59

Total 31732325.01 7459438.61 9959152.51 29232611.11

Other explanation

19. Deferred income tax asset /Deferred income tax liabilities

(1) Deferred income tax assets without offset

In RMB/CNY

Ending balance Opening balance

Item Deductible temporary Deferred income tax Deductible temporary Deferred income tax

differences asset differences asset

Impairment provision

67113321.86 16501454.23 67113321.86 16501454.23

for assets

Unrealized profits in

3488612.52 872153.13 3078755.60 769722.53

internal transactions

Deductible loss 53846.20 13461.55 53846.20 13461.55

Credit impairment loss 96768909.47 24063313.81 96768909.47 24063313.81

Total 167424690.05 41450382.72 167014833.13 41347952.12

(2) Deferred income tax liability without offset

In RMB/CNY

Ending balance Opening balance

Item Taxable temporary Deferred income tax Taxable temporary Deferred income tax

differences liabilities differences liabilities

Asset evaluation

increment of enterprise 47772705.72 11943176.43 48600140.52 12150035.13

combine under

different control

Total 47772705.72 11943176.43 48600140.52 12150035.13

(3) Deferred income tax assets and deferred income tax liabilities listed after off-set

In RMB/CNY

Ending balance of Trade-off between the Opening balance of

Trade-off between the

deferred income tax deferred income tax deferred income tax

Item deferred income tax

assets or liabilities assets and liabilities at assets or liabilities

assets and liabilities

after off-set period-begin after off-set

Deferred income tax

41450382.72 41347952.12

asset

Deferred income tax

11943176.43 12150035.13

liabilities

(4) Details of uncertain deferred income tax assets

In RMB/CNY

Item Ending balance Opening balance

Deductible temporary differences 226433711.65 183270008.13

Deductible loss 363628773.68 351368763.83

Total 590062485.33 534638771.96

20. Other non-current asset

In RMB/CNY

Ending balance Opening balance

Item Book Impairment Book Impairment

Book value Book value

balance provision balance provision

Prepaid for equipment 611965.84 611965.84 611965.84 611965.84

1864208. 1864208.Prepaid for system 723950.00 723950.00

49 49

1335915. 1335915. 2476174. 2476174.Total

84 84 33 33

Other explanation:

21. Short-term loans

(1) Category

In RMB/CNY

Item Ending balance Opening balance

Loan in credit 1212686540.73 110318727.12

Total 1212686540.73 110318727.12

Explanation on category of short-term loans:

22. Account payable

(1) Account payable

In RMB/CNY

Item Ending balance Opening balance

Trade accounts payable 488144451.37 221632903.56

Account payable for engineering 208126202.35 254410372.45

Other 6902635.22 4853241.63

Total 703173288.94 480896517.64

23. Accounts received in advance

(1) Accounts received in advance

In RMB/CNY

Item Ending balance Opening balance

Other 4961036.19 3376262.66

Total 4961036.19 3376262.66

24. Contract liabilities

In RMB/CNY

Item Ending balance Opening balance

Sales price 149884356.62 108975866.82

Total 149884356.62 108975866.82

Amount and reasons for important changes of book value in the period

In RMB/CNY

Item Amount changed Reasons of changes

25. Wage payable

(1) Wage payable

In RMB/CNY

Item Opening balance Current increased Current decreased Ending balance

I. Short-term

243040453.26 141910030.56 171001148.83 213949334.99

compensation

II. After-service

welfare-defined 16738931.80 9088085.58 7683026.68 18143990.70

contribution plans

III. Dismissed welfare 735174.60 350981.09 326270.30 759885.39

Total 260514559.66 151349097.23 179010445.81 232853211.08

(2) Short-term compensation

In RMB/CNY

Item Opening balance Current increased Current decreased Ending balance

1. Wage bonus

234356069.74 122448450.33 149519388.07 207285132.00

allowance and subsidy

2. Employees’ welfare 156952.35 7245636.48 7402588.83

3. Social insurance

198640.24 3094989.14 3245891.24 47738.14

charges

Including:

medical insurance 115400.07 2834293.35 2937215.78 12477.64

premium

Industrial injury

1267.41 115193.44 116406.64 54.21

insurance premiums

Maternity

40586.98 145502.35 150883.04 35206.29

insurance premiums

Other 41385.78 41385.78

4. Housing public

61858.47 6818628.30 6871039.80 9446.97

reserve

5. Trade union fee and

8266932.46 2302326.31 3962240.89 6607017.88

education fee

Total 243040453.26 141910030.56 171001148.83 213949334.99

(3) Defined contribution plans

In RMB/CNY

Item Opening balance Current increased Current decreased Ending balance

1. Basic endowment

393107.74 6959588.97 7135906.32 216790.39

insurance premiums

2. Unemployment

975.41 96724.58 97699.99

insurance premiums

3. Enterprise annuity 16344848.65 2031772.03 449420.37 17927200.31

Total 16738931.80 9088085.58 7683026.68 18143990.70

Other explanation:

26. Taxes payable

In RMB/CNY

Item Ending balance Opening balance

VAT 2646968.62 2792128.64

Enterprise income tax 10869915.24 59929311.33

Personal income tax 8865349.38 975572.27

Urban maintenance and construction tax 109791.27 117101.01

House property tax 5091298.35 1041691.54

Educational surtax 71345.31 84670.40

Use tax of land 774044.06 191383.02

Stamp tax 467780.06 1066139.48

Other 123281.57 42509.76

Deed tax 664227.84 664227.84

Total 29684001.70 66904735.29

Other explanation:

27. Other account payable

In RMB/CNY

Item Ending balance Opening balance

Dividend payable 2933690.04 2933690.04

Other account payable 435107165.74 394392029.46

Total 438040855.78 397325719.50

(1) Dividend payable

In RMB/CNY

Item Ending balance Opening balance

Shenzhen Investment Management

2690970.14 2690970.14

Company

Unmanaged shares 242719.90 242719.90

Total 2933690.04 2933690.04

Other explanation including important dividend payable over one year without payment disclose reasons for un-paid:

(2) Other account payable

1) By nature

In RMB/CNY

Item Ending balance Opening balance

Engineering quality retention money and

1056043.07 737356.67

fund of tail

Deposit and margin 113796045.40 191086945.49

Intercourse funds and other 319443401.51 191229002.98

Drawing expenses in advance 811675.76 11338724.32

Total 435107165.74 394392029.46

2) Significant other account payable with over one year age

In RMB/CNY

Item Ending balance Reasons of outstanding or carry-over

Shenzhen Food Materials Group Co. The settlement conditions have not yet

146162941.72

Ltd been met

Total 146162941.72 --

Other explanation

28. Non-current liabilities due within one year

In RMB/CNY

Item Ending balance Opening balance

Long-term loans due within one year 137873648.25 104225183.07

Total 137873648.25 104225183.07

Other explanation:

29. Other current liabilities

In RMB/CNY

Item Ending balance Opening balance

VAT payable 2329512.69

Other 4920907.99

Total 7250420.68

Change of short-term bonds payable:

In RMB/CNY

Premiu

Accrual m and

Openin Issued Paid in

Face Issuanc Bonds Amoun interest discoun Ending

Bonds g in the the

value e date term t issued by face t balance

balance period period

value amortiz

ation

Other explanation: nil

30. Long-term loans

(1) Category

In RMB/CNY

Item Ending balance Opening balance

Mortgage + guarantee 805594327.98 841864531.75

Total 805594327.98 841864531.75

Explanation on category of long-term loans:

Other explanation including interest rate range:

31. Lease liability

In RMB/CNY

Item Ending balance Opening balance

Lease payment 91245488.14 2329027.97

Total 91245488.14 2329027.97

Other explanation

32. Long-term account payable

In RMB/CNY

Item Ending balance Opening balance

Special account payable 17023270.19 16126146.20

Total 17023270.19 16126146.20

(1) Special account payable

In RMB/CNY

Item Opening balance Current increased Current decreased Ending balance Causes

Depreciation fund

16126146.20 897123.99 17023270.19

for grain deposits

Total 16126146.20 897123.99 17023270.19 --

Other explanation:

Note: the finance allocated to the Company as a government investment in depreciation special funds of reserve grain depot and

interest.33. Accrual liabilities

In RMB/CNY

Item Ending balance Opening balance Causes

External guarantee 3500000.00 3500000.00

Total 3500000.00 3500000.00 --

Other explanation including relevant important assumptions and estimation:

Note: According to the civil judgment made by the Shenzhen Intermediate People’s Court in the disputes over loan contract between

Changzhou Shenbao Chacang Electronic Commerce Co. Ltd. and Shenzhen Agricultural Products Financing Guarantee Co. Ltd.the Company shall assume joint and several liabilities for repayment of the debts of Changzhou Shenbao Chacang Electronic

Commerce Co. Ltd. within the scope of 3.5 million yuan.34. Deferred income

In RMB/CNY

Item Opening balance Current increased Current decreased Ending balance Causes

Government

100710038.32 5660000.00 3271095.25 103098943.07

subsidies

Total 100710038.32 5660000.00 3271095.25 103098943.07 --

Item with Government subsidy involved:

In RMB/CNY

Amount Amount Cost

New grants Assets-rela

Opening reckoned in reckoned in reduction Other Ending

Liability in the ted/income

balance non-operati other in the changes balance

Period related

on revenue income period

Governme

nt central

4710782. 5660000. 9663937. Assets-rela

governmen 706844.69

45 00 76 ted

t grant

funds

Intelligent

manageme

nt of grain

Assets-rela

depot 466666.56 100000.02 366666.54

ted

based on

mobile

internet

Special

funds for

intelligent

upgrading

and

10922083 10444583 Assets-rela

transformat 477499.98.35 .37 ted

ion of grain

warehouse“GrainSafetyProject”

Subsidy for

supply

system

Assets-rela

constructio 350000.00 100000.00 250000.00

ted

n of

agricultural

products

Agricultura

l product

safety

testing

project of

the special Assets-rela

342000.00 171000.00 171000.00

fund for ted

agricultural

developme

nt - Central

investment

fund

Special

fund for

agricultural

developme

nt -

agricultural

product

safety

testing Assets-rela

164000.00 82000.00 82000.00

project- ted

capacity

building of

the third

party

inspection

institution

expansion

evaluation

Constructio

n of O2O

community

sales

service

system for

1712259. 1692971. Assets-rela

high 19288.02

12 10 ted

quality

grain and

oil based

on B2C

E-commerc

e platform

Industrializ

ation of

Assets-rela

Doximi 978281.14 368210.28 610070.86

ted

E-commerc

e platform

Grain

storage

project of

7717903. 7586775. Assets-rela

Dongguan 131128.56

59 03 ted

Shenliang

Logistics

Co. Ltd. -

Storage A

Phase II of

grain

storage

project of

30906098 30390448 Assets-rela

Dongguan 515650.26.48 .22 ted

Shenliang

Logistics

Co. Ltd.-

Storage B

Grain oil

and food

headquarte

rs and

innovative

public 18000000 18000000 Assets-rela

service .00 .00 ted

platform of

Dongguan

Shenliang

Logistics

Co. Ltd.Constructio

n of

450000 ton

silos and

60000 ton 16830624 16814113 Assets-rela

16511.22

film silos .65 .43 ted

-CDE

warehouse.Gas storage

bin

Base of

further

processing Assets-rela

550000.00 137500.02 412499.98

for tea and ted

nature

plants

Special

fund for

2836474. 2660870. Assets-rela

the 175604.52

79 27 ted

developme

nt of

strategic

emerging

industries

in

Shenzhen

Industrializ

ation of 1691244. 1593021. Assets-rela

98222.94

instant tea 91 97 ted

powder

Enterprise

technology

center is a

municipal

R&D

center.1579251. 1477239. Assets-rela

Subsidies 102012.24

97 73 ted

for

industrial

technologic

al

advanceme

nt

Grant for

key

technology

research

Assets-rela

and 124521.17 7122.48 117398.69

ted

industrializ

ation of

instant tea

powder

Constructio

n amount

for 50 tons

for clearly Assets-rela

249999.94 62500.02 187499.92

processing ted

for

Mingyou

tea

Project

grants for Assets-rela

53846.20 53846.20

years for ted

agricultural

district

Xihu Zone

Commercia

l

circulation Assets-rela

524000.00 524000.00

developme ted

nt project

funding

10071003 5660000. 3271095. 10309894

Total

8.32 00 25 3.07

Other explanation:

35. Share capital

In RMB/CNY

Increased (decreased) in this period+ -

Shares

Opening Ending

balance New shares

converted

Bonus shares Other Subtotal balance

issued from public

reserve

115253525 115253525

Total shares

4.00 4.00

Other explanation:

36. Capital public reserve

In RMB/CNY

Item Opening balance Current increased Current decreased Ending balance

Capital premium

(Share capital 1413996347.50 160572715.62 1253423631.88

premium)

Other capital reserve 8896381.86 8896381.86

Total 1422892729.36 160572715.62 1262320013.74

Other instructions including changes in the current period reasons for the change:

37. Surplus public reserve

In RMB/CNY

Item Opening balance Current increased Current decreased Ending balance

Statutory surplus

382367575.37 382367575.37

reserves

Total 382367575.37 382367575.37

Other explanation including changes and reasons for changes:

38. Retained profit

In RMB/CNY

Item Current period Last period

Retained profit at the end of the previous year

1637536441.03 1495135080.60

before adjustment

Total retained profit at the beginning of the

1637536441.03 1495135080.60

previous year before adjustment

Add: net profit attributable to shareholder of

243846874.76 210738686.12

parent company

Common stock dividends payable 230507050.80 230507050.80

Retained profit at period-end 1650876264.99 1475366715.92

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 0 Yuan.5) Other adjustments affect the retained profits at the beginning of the period amounting to 0 Yuan

39. Operating income and operating cost

In RMB/CNY

Current period Last period

Item

Income Cost Income Cost

Main business 5259568275.95 4649191683.41 4738760181.96 4218999878.26

Other business 2620904.58 1205387.26 1668040.14 403950.54

Total 5262189180.53 4650397070.67 4740428222.10 4219403828.80

Information relating to revenue:

In RMB/CNY

Category Branch 1 Branch 2 Total

Including:

Including:

Including:

Including:

Including:

Including:

Including:

Information relating to performance obligations:

Nil

Information related to the transaction price apportioned to the remaining performance obligations:

The amount of income corresponding to the performance obligations that have been signed at the end of this reporting period but

have not yet been fulfilled or have not done with fulfillment is 149884356.62 yuan among them 149884356.62 yuan of revenue is

expected to be recognized in 2021.Other explanation

40. Tax and surcharges

In RMB/CNY

Item Current period Last period

Consumption tax 544486.02 393095.87

Urban maintenance and construction tax 411731.33 293482.34

House property tax 4225156.71 2332175.04

Use tax of land 945095.60 871580.42

Vehicle and vessel use tax 8953.20

Stamp duty 826252.63 385415.59

Other 7604.36 58669.28

Total 6969279.85 4334418.54

Other explanation:

41. Sales expenses

In RMB/CNY

Item Current period Last period

Labor and social security benefits 40890403.82 32804986.80

Port terminal fee 29316408.89 19474717.84

Handling charges 4291965.96 4882744.12

Depreciation and amortization of

6730728.23 6518839.48

long-term assets

Equivalent loss for low value perishable

2408636.91 935717.93

goods

After-sale services 2359846.00 789476.48

Utilities and office expenses 2848894.71 2350318.50

Rental 2942783.48 2577208.22

Logistics transportation fee 2180760.95 28612496.12

Travel expenses 1101872.85 779656.28

Sales commission 230219.20 248538.85

Business hospitality 799812.28 527170.78

Advertisement charge 790841.41 363244.31

Property insurance premium 631971.43 82506.02

Automobile expenses 296086.85 317274.99

Other 8890543.80 8531801.39

Total 106711776.77 109796698.11

Other explanation:

42. Administration expenses

In RMB/CNY

Item Current period Last period

Labor and social security benefits 74829904.07 69229045.12

Depreciation and amortization of

12401821.37 13292796.12

long-term assets

Office expenses 5946658.73 3701673.55

Intermediary agency fee 3127140.25 2140781.77

Rental 2049677.28 1468092.89

Business hospitality 776421.99 1164075.59

Relocation and shutdown costs 419391.74

Travel expenses 721643.56 552462.94

Repair cost 311482.72 693712.09

Communication fee 602782.52 520417.29

Vehicle usage fee 458887.95 546606.17

Low-value consumables 66494.16 179389.99

Other 7603787.31 8285912.43

Contract compensation 63494.58

Total 109316093.65 101838460.53

Other explanation:

43. R&D expenses

In RMB/CNY

Item Current period Last period

Labor and social security benefits 7052838.34 4299743.55

Depreciation cost 2141451.05 1678787.85

Logistics consumption 350852.23 80752.32

Office expenses 559237.89 146085.41

Maintenance and inspection fee 190595.59 11870.89

Travel expenses 350496.63 82848.06

Automobile expenses 27522.00

Intermediary fees 18883.02

Other 234141.40 1068684.60

Total 10926018.15 7368772.68

Other explanation:

44. Financial expenses

In RMB/CNY

Item Current period Last period

Interest expenses 15362400.04 7410693.33

Less: Interest income 765002.68 1735133.50

Exchange loss 152194.11 -54764.94

Other 2455183.05 534417.72

Total 17204774.52 6155212.61

Other explanation:

45. Other income

In RMB/CNY

Sources Current period Last period

Government subsidies related to asset 3271095.25 2055335.31

Government subsidies related to income 1004197.50 8769224.86

Collectively deduction for input tax 294887.24

Withholding personal income tax

321549.63

handling fee

Direct VAT exemption 199.68

Total 4891929.30 10824560.17

46. Investment income

In RMB/CNY

Item Current period Last period

Long-term equity investment income

440179.67 366989.43

measured by equity

Investment income from disposal of

2337075.95

long-term equity investment

Income from financial products 3061191.63 7544998.92

Total 3501371.30 10249064.30

Other explanation:

47. Income of fair value changes

In RMB/CNY

Sources Current period Last period

Tradable financial assets 288972.32 -572784.42

Total 288972.32 -572784.42

Other explanation:

48. Credit impairment loss

In RMB/CNY

Item Current period Last period

Loss of bad debt of other account

46004.50 638878.91

receivable

Loss of bad debt of account receivable -11847.13 1153087.44

Total 34157.37 1791966.35

Other explanation:

49. Assets impairment loss

In RMB/CNY

Item Current period Last period

II. Inventory price drop loss and contract

-111448173.12 -95290043.04

performance cost impairment loss

Total -111448173.12 -95290043.04

Other explanation:

50. Income from assets disposal

In RMB/CNY

Sources Current period Last period

Profit and loss on disposal of non current

8318.64 -10598.38

assets

Total 8318.64 -10598.38

51. Non-operating income

In RMB/CNY

Amount included in the

Item Current period Last period current non-recurring profit

and loss

Government subsidy 3879.42 10030.08 3879.42

Profit 91006.38 91006.38

Other 1532816.76 664790.24 1532816.76

Liquidated damages

683979.26

compensation income

Total 1627702.56 1358799.58 1627702.56

Government subsidy reckoned into current gains/losses:

In RMB/CNY

Whether

the impact

of

Whether Assets

Issuing Issuing Property subsidies Amount of Amount of

Grants special related/Inc

subject cause type on the this period last period

subsidies ome related

current

profit and

loss

Other explanation: nil

52. Non-operating expenditure

In RMB/CNY

Amount included in the

Item Current period Last period current non-recurring profit

and loss

External donations 150397.26 5151098.92 150397.26

Inventory loss 6532.18 6532.18

Loss of scrap from

19868.54 35567.38 19868.54

non-current assets

Other 226366.32 226366.32

Total 403164.30 5186666.30 403164.30

Other explanation:

53. Income tax expense

(1) Income tax expense

In RMB/CNY

Item Current period Last period

Current income tax expenses 13716643.86 3142430.31

Deferred income tax expenses -309289.30 -677161.68

Total 13407354.56 2465268.63

(2) Adjustment process of accounting profit and income tax expenses

In RMB/CNY

Item Current period

Total profit 259165280.99

Income tax expenses calculated by statutory tax rate 64791320.25

Impact from different tax rate apply with the subsidiary -271592.28

Effect of adjusting income tax in the previous period 5552660.64

Impact of non taxable income -93461467.46

Impact on cost expenses and losses that unable to deducted 27943603.88

Unrecognized impacts of deductible temporary differences or

11584334.07

deductible losses on deferred income tax assets in the period

Additional deductible expenses required by tax law——Impact

-2731504.54

on R&D costs deduction

Income tax expenses 13407354.56

Other explanation

54. Annotation of cash flow statement

(1) Cash received with other operating activities concerned

In RMB/CNY

Item Current period Last period

Intercourse funds and deposit 501614298.48 425055874.21

Government subsidy 6664197.50 13758224.86

Interest income 765002.68 1893194.14

Other

Total 509043498.66 440707293.21

Note of cash paid with other operating activities concerned:

(2) Cash paid with other operating activities concerned

In RMB/CNY

Item Current period Last period

Intercourse funds and deposit 506989695.21 342216823.96

Operating daily expenses 80962607.92 103213558.91

Other 4025352.26

Total 591977655.39 445430382.87

Note of cash paid with other operating activities concerned:

(3) Cash received with other investment activities concerned

In RMB/CNY

Item Current period Last period

Performance compensation 337500.00

Other 54336.41

Total 54336.41 337500.00

Note of cash received with other investment activities concerned:

(4) Cash paid related with investment activities

In RMB/CNY

Item Current period Last period

Other 109602.00 994317.84

Total 109602.00 994317.84

Note of cash paid related with investment activities:

(5) Other cash paid related with financing activities

In RMB/CNY

Item Current period Last period

Other 58702.23

Total 58702.23

Note of other cash paid related with financing activities:

55. Supplementary information to statement of cash flow

(1) Supplementary information to statement of cash flow

In RMB/CNY

Supplementary information Current period Last period

1. Net profit adjusted to cash flow of

-- --

operation activities:

Net profit 245757926.43 212229860.46

Add: Impairment provision for assets 111414015.75 93498076.69

Depreciation of fixed assets consumption

of oil assets and depreciation of productive 39826096.31 36594574.62

biology assets

Depreciation of right-of-use assets 8663657.57

Amortization of intangible assets 13380523.65 11220066.23

Amortization of long-term pending

9959152.51 2824888.62

expenses

Loss from disposal of fixed assets

intangible assets and other long-term -8318.64 10598.38

assets (income is listed with “-”)

Losses on scrapping of fixed assets

19868.54 35567.38(income is listed with “-“)Loss from change of fair value (income is

-288972.32 572784.42listed with “-“)Financial expenses (income is listed with

15500789.85 7410693.33

“-”)

Investment loss (income is listed with “-”) -3501371.30 -10249064.30

Decrease of deferred income tax assets

-102430.60 -470303.13

(increase is listed with “-”)

Decrease of deferred income tax asset

-206858.70 -206858.55

((increase is listed with “-”)

Decrease of inventory (increase is listed

-713312219.22 -382924860.42

with “-”)

Decrease of operating receivable accounts

-557180868.53 129417912.00

(increase is listed with “-”)

Increase of operating payable accounts

138806857.37 -90353574.58

(decrease is listed with “-”)

Other

Net cash flow arising from operating

-691272151.33 9610361.15

activities

2. Material investment and financing not

-- --

involved in cash flow

Conversion of debt into capital

Switching Company bonds due

within one year

financing lease of fixed assets

3. Net change of cash and cash

-- --

equivalents:

Balance of cash at period end 68774083.11 113636986.38

Less: Balance of cash at year-begin 190494225.94 154954757.85

Add: Balance at year-end of cash

equivalents

Less: Balance at year-begin of cash

equivalents

Net increasing of cash and cash

-121720142.83 -41317771.47

equivalents

(2) Constitution of cash and cash equivalent

In RMB/CNY

Item Ending balance Opening balance

I. Cash 68774083.11 190494225.94

Including: Cash on hand 100315.03 62642.11

Bank deposit available for payment

67609744.07 189169821.01

at any time

Other monetary fund available for

1064024.01 1261762.82

payment at any time

III. Balance of cash and cash equivalent

68774083.11 190494225.94

at period-end

Other explanation:

56. Assets with ownership or use right restricted

In RMB/CNY

Item Ending book value Reasons for restriction

According to the long-term loan mortgage contract signed by the Company

with Shenzhen Branch of Agricultural Development Bank and Huizhou

Zhongkai Sub-branch of HSBC the Company has mortgaged the real estate

property rights of the structures of Yue (2020) Dongguan Property Right No.0127118 Yue (2020) Dongguan Property Right No. 0127119 Yue (2020)

Fix assets 671932275.20

Dongguan Property Right No. 0127120 and Yue (2020) Dongguan Property

Right No.0119705 at No. 10 Jingang South Road Machong Town Dongguan

City and other aground buildings to Shenzhen Branch of Agricultural

Development Bank and Huizhou Zhongkai Sub-branch of HSBC in sequence as

loan collateral.According to the loan contract Yue DG 2017 NGDZ No. 006 signed by

International Food Company and Bank of Communications Co. Ltd. DongguanIntangible assets 68667888.52 Branch International Food Company mortgaged two pieces of land “DFGY

(2009) DT No. 190” and “DFGY (2012) DT No. 152” to Bank ofCommunications Co. Ltd. Dongguan Branch as collateral for the loan.According to the long-term loan mortgage contract signed by the Company

with Dongguan Branch of CMB Dongguan Logistics Company has mortgaged

Intangible assets 35398230.05 the real estate property rights of the structures of Yue (2016) Dongguan Property

Right No. 0028527 at No. 10 Jingang South Road Machong Town Dongguan

City to Dongguan Branch of CMB

Total 775998393.77 --

Other explanation:

57. Foreign currency monetary items

(1) Foreign currency monetary items

In RMB/CNY

Ending foreign currency Ending RMB balance

Item Convert rate

balance converted

Monetary fund -- -- 649435.35

Including: USD 51229.50 6.4601 330947.69

EURO

HKD 382751.66 0.8321 318487.66

Account receivable -- -- 2413463.66

Including: USD 356778.87 6.4601 2304827.18

EURO

HKD 130557.00 0.8321 108636.48

Long-term loans -- --

Including: USD

EURO

HKD

Other explanation:

58. Government subsidy

(1) Government subsidy

In RMB/CNY

Amount reckoned into current

Category Amount Item

gains/losses

Government subsidy related

103098943.07 Deferred income 3271095.25

to assets

Government subsidy related

1008076.92 1008076.92

to income

Total 104107019.99 4279172.17

59. Other

Nil

VIII. Changes of consolidation range

1. Other reasons for consolidation range changed

Consolidation scope changes caused by other reasons (eg newly establish subsidiaries liquidate subsidiaries etc.) and the related

circumstances:

During the reporting period the Company newly established Dongguan Hualian Company

2. Other

Nil

IX. Equity in other entity

1. Equity in subsidiary

(1) Constitute of enterprise group

Main place of Registration Share-holding ratio

Subsidiary Business nature Acquired way

operation place Directly Indirectly

Shenbao

Shenzhen Shenzhen Manufacturing 100.00% Establishment

Huacheng

Wuyuan Ju

Shangrao Shangrao Manufacturing 100.00% Establishment

Fang Yong

Shenbao Tea Commercial

Shenzhen Shenzhen 100.00% Establishment

Culture trade

Ju Fang Yong Wholesale

Hangzhou Hangzhou 60.00% Establishment

Trading business

Ju Fang Yong

Hangzhou Hangzhou Comprehensive 100.00% Establishment

Holding

Fuhaitang Catering

Hangzhou Hangzhou 100.00% Establishment

Catering industry

Tea planting

Fuhaitang

Hangzhou Hangzhou production and 100.00% Acquisition

Ecological

sales

Shenbao Rock

Wuyishan Wuyishan Manufacturing 100.00% Establishment

Tea

Pu'er Tea Wholesale

Pu’er Pu’er 100.00% Establishment

Supply Chain business

Wholesale

Shenbao Food Huizhou Huizhou 100.00% Establishment

business

Pu’er Tea Service

Pu’er Pu’er 55.00% Establishment

Trading Center industry

Shenbao Investment

Shenzhen Shenzhen 100.00% Establishment

Investment management

Shenliang Food Huizhou Shenzhen Manufacturing 100.00% Establishment

Huizhou

Huizhou Huizhou Comprehensive 100.00% Establishment

Shenbao

Shenbao Property

Shenzhen Shenzhen 100.00% Establishment

Property management

Shenbao Shenzhen Shenzhen Development 100.00% Establishment

Technology consulting and

transfer of

technology

Shenbao

Wholesale

Industry & Huizhou Shenzhen 100.00% Establishment

business

Trade

Combine under

Grain & oil

SZCG Shenzhen Shenzhen 100.00% the same

trading

control

Combine under

Hualian Grain Grain & oil

Shenzhen Shenzhen 100.00% the same

& Oil trading

control

Dongguan Grain & oil

Dongguan Dongguan 100.00% Establishment

Hualian trading

Combine under

Flour

Shenzhen Flour Shenzhen Shenzhen 100.00% the same

processing

control

Shenliang Combine under

Quality Shenzhen Shenzhen Inspection 100.00% the same

Inspection control

Combine under

Hainan Grain Feed

Haikou Haikou 100.00% the same

and Oil production

control

Combine under

Doximi Shenzhen Shenzhen E-commerce 100.00% the same

control

Sales and

Combine under

processing of

Big Kitchen Shenzhen Shenzhen 70.00% the same

grain oil and

control

products

Combine under

Yingkou

Yingkou Yingkou Storage 100.00% the same

Storage

control

Fresh food Combine under

Cold-Chain

Shenzhen Shenzhen management 100.00% the same

Logistic

on-line control

Combine under

Shenliang Property

Shenzhen Shenzhen 100.00% the same

Property management

control

Shenliang Real Shenzhen Shenzhen Real estate 100.00% Combine under

Estate development the same

and property control

management

Port operation Combine under

International

Dongguan Dongguan food 51.00% the same

Food

production control

Combine under

Dongguan Food

Dongguan Dongguan 51.00% the same

Grain and Oil production

control

Combine under

Dongguan Storage

Dongguan Dongguan 49.00% 51.00% the same

Logistics logistics

control

Construction of

food base and

Combine under

development of

Hongxinglong Shuangyashan Shuangyashan 51.00% the same

related

control

complementary

facility

Construction of

food base and

Combine under

development of

Shuangyashan Shuangyashan Shuangyashan 51.00% the same

related

control

complementary

facility

Shenliang

Shenzhen Shenzhen Catering 51.00% Establishment

Hongjun

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 consolidates statement:

Basis of termination of agent or consignor:：

Other explanation:

2. Transaction that has owners equity shares changed in subsidiary but still with controlling rights

(1) Owners equity shares changed in subsidiary

During the reporting period the 49.00% equity of Dongguan Logistics were acquired by the Company and became a wholly-owned

subsidiary of the company.(2) Impact on minority’s interest and owners’ equity attributable to parent company

In RMB/CNY

Dongguan Logistics

Purchase cost/disposal consideration 321680000.00

--Cash 321680000.00

Purchase cost/total disposal consideration 321680000.00

Less: Subsidiary's share of net assets calculated based on the

161107284.38

proportion of acquired/disposed equity

Difference 160572715.62

Including: Adjust the capital reserve 160572715.62

Other explanation

3. Equity in joint venture and associated enterprise

(1) Important joint venture or associated enterprise

Share-holding ratio Accounting

treatment on

Joint

Main place of Registration investment for

venture/Associ Business nature

operation place Directly Indirectly joint venture

ated enterprise

and associated

enterprise

Zhuhai

Hengxing Feed Aquatic fee and

Zhuhai Zhuhai 40.00% Equity method

Industrial Co. animal fee

Ltd.Shenliang

Intelligent

Wulian Equity

Equity

Investment

investment;

Fund Shenzhen Shenzhen 49.02% Equity method

investment

(Shenzhen)

consultant

Partnership

Enterprise

(Limited)

Description of the percentage of shareholding in joint ventures or associates different from the percentage of voting rights:

Has major influence with less 20% voting rights hold or has minor influence with over 20% (20% included) voting rights hold:

(2) Main financial information of the important joint venture

In RMB/CNY

Ending balance/Current period Opening balance/Last period

Shenliang Intelligent Shenliang Intelligent

Wulian Equity Wulian Equity

Zhuhai Hengxing Feed Zhuhai Hengxing Feed

Investment Fund Investment Fund

Industrial Co. Ltd. Industrial Co. Ltd.(Shenzhen) Partnership (Shenzhen) Partnership

Enterprise (Limited) Enterprise (Limited)

Current assets 165853289.04 21012185.03 98242527.52 20459246.10

Non current assets 27231124.63 32835895.19 29365806.23 33102244.01

Total assets 193084413.67 53848080.22 127608333.75 53561490.11

Current liabilities 111754886.72 510000.00 44972658.51

Non current liabilities 491358.69 537345.69

Total liabilities 112246245.41 510000.00 45510004.20

Shareholders' equity

attributable to the 80838168.26 53338080.22 82098329.55 53561490.11

parent company

Share of net assets

calculated by 32335267.30 26146326.93 32839331.82 26255842.45

shareholding ratio

Adjustment items 991770.90 -174.47 162707.80 -174.47

--Other 991770.90 -174.47 162707.80 -174.47

Book value of equity

investment in 33327038.20 26146152.46 33002039.62 26255667.98

associated enterprises

Operating revenue 342054335.50 259095047.79

Net profit 1430282.78 -223409.89 3337583.11 -352638.57

Total comprehensive

1430282.78 -223409.89 3337583.11 -352638.57

income

Other explanation

(3) Financial summary for non-important Joint venture and associated enterprise

In RMB/CNY

Ending balance/Current period Opening balance/Last period

Joint venture: -- --

Amount based on share-holding ratio -- --

Associated enterprise: -- --

Total book value of investment 14182136.85 13957440.24

Amount based on share-holding ratio -- --

--Net profit 224696.61 415495.06

--Total comprehensive income 224696.61 415495.06

Other explanation

(4) Excess loss occurred in joint venture or associated enterprise

In RMB/CNY

Un-recognized losses not

Joint venture/Associated Cumulative un-recognized recognized in the Period (or Cumulative un-recognized

enterprise losses net profit enjoyed in the losses at period-end

Period)

Changzhou Shenbao Chacang

8742655.05 165079.10 8907734.15

E-business Co. ltd.Shenzhen Shichumingmen

Catering Management Co. 4815325.70 4815325.70

Ltd.Other explanation

4. Other

Nil

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 rate 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.1. Credit risk

Credit risk refers to the risk of a financial loss caused by the counter party’s failure to fulfill its contractual

obligations.The credit risk mainly arises from monetary funds account receivable and other account receivable so on. 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 account receivables and other account 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.As of 30 June 2021 the account receivable from top five customers accounted for 77.02% of the Company’s total

account receivable.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 theCompany exposed to credit risk except for the financial guarantee carried in Note “X. Related party and relatedtransaction”

2. Liquidity risk

Liquidity risk refers to the risk that a company will run short of funds to meet its obligations settled by delivering

cash or other financial assets.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.3. Market risk

The market risk of financial instruments refers to the risk that the fair value or future cash flows of financial

instruments will fluctuate due to changes in market prices including exchange rate risk interest rate risk and other

price risks.

(1) Interest risk

Interest rate risk refers to the risk that the fair value or future cash flows of financial instruments will fluctuate due

to changes in market interest rates. The Company determines the relative proportions of fixed interest rate and

floating interest rate contracts based on the prevailing market environment.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.

(2) Exchange rate risk

Exchange rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate due to

the changes in foreign exchange rates.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 forward exchange contract or monetary

exchange contract.The foreign exchange risk faced by the company mainly comes from financial assets and financial liabilities

denominated in US dollars. For the amount of foreign currency financial assets and foreign currency financial

liabilities converted into RMB please refer to Note (57) Foreign Currency Monetary Items of VII. Consolidated

Financial Statement.

(3) Other price risk

Other price risk refers to the risk that the fair value or future cash flow of financial instruments will fluctuate due

to changes in market prices other than exchange rate risk and interest rate risk.The Company purchases and sells products at market prices therefore it is affected by fluctuation of these prices.XI. Disclosure of fair value

1. Ending fair value of the assets and liabilities measured by fair value

In RMB/CNY

Ending fair value

Item

First-order Second-order Third-order Total

I. Sustaining measured

-- -- -- --

by fair value

1.Financial assets

measured by fair value

and with variation 910778.83 910778.83

reckoned into current

gains/losses

(2) Equity instrument

910778.83 910778.83

investment

Other non-current

57500.00 57500.00

financial assets

II. Non-persistent

-- -- -- --

measure

2. Other

Nil

XII. Related party and related transactions

1. Parent company

Ratio of Ratio of voting

Parent company Registration place Business nature Registered capital shareholding on right on the

the Company Company

Investing in

industry

Shenzhen Food

development

Materials Group Shenzhen 5000 million Yuan 63.79% 63.79%

operation and

Co. Ltd

management of

the own property

Explanation on parent company of the enterprise

Ultimate controller of the Company is Shenzhen Municipal People’s Government State-owned Assets Supervision & Administration

Commission

Ultimate controller of the Enterprise is Shenzhen Municipal People’s Government State-owned Assets Supervision & Administration

Commission。

Other explanation:

2. Subsidiary

Subsidiary of the Company found more in Note "1. Equity in subsidiaries" of Note IX-Equity in other entity

3. Joint venture and associated enterprise

Joint Venture of the Company found more in Note "3. Equity in joint arrangement or joint venture" of Note IX-Equity in other entity

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 with the Enterprise

Other explanation

4.Other related party

Other related party Relationship with the Enterprise

Shareholder of the Company subsidiary of the actual

Shenzhen Agricultural Products Group Co. Ltd

controller controlled by the same ultimate controlling party

Subsidiary of the actual controller Controlled by the same

Zhanjiang Haitian Aquatic Feed Co. Ltd

ultimate controlling party

Dongguan Fruit Vegetable Non-staple Food Trading Market

Minority shareholder of controlling subsidiary

Co. Ltd.Subsidiary of the actual controller Controlled by the same

Taizhong Agricultural Co. Ltd

ultimate controlling party

Former shareholder of the Company Controlled by the same

Shenzhen Investment Holdings Co. Ltd.ultimate controlling party

Former shareholder of the Company Controlled by the same

Shenzhen Investment Management Co. Ltd

ultimate controlling party

Fujian Wuyishan Yuxing Tea Co. Ltd Minority shareholder of former controlling subsidiary

Wholly-owned subsidiary of Shenzhen Agricultural Products

Shenzhen Fruits and Vegetables Trading Co. Ltd

Group Co. Ltd

Shenzhen Higreen International Agricultural Products Logistic Controlling subsidiary of Shenzhen Agricultural Products

Management Co. Ltd Group Co. Ltd

Zhanjiang Changshan (Shenzhen) Ecological Aquaculture Co.Has the same parent company

Ltd

Shenzhen Shenliang Cold Transport Co. Ltd. Holding subsidiary of the company's associated enterprise

Former shareholder of Shenzhen Agricultural Products Group

Shenzhen Yixin Investment Co. Ltd

Co. Ltd Controlled by the same ultimate controlling party

Guangxi Higreen Agricultural Products International Logistics Wholly-owned subsidiary of Shenzhen Agricultural Products

Co. Ltd. Group Co. Ltd

Controlling subsidiary of Shenzhen Agricultural Products

Guangxi Higreen Business Management Co. Ltd.Group Co. Ltd

Controlling subsidiary of Shenzhen Agricultural Products

Shenzhen Qianhai Nongmai World E-Commerce Co. Ltd

Group Co. Ltd

Wholly-owned subsidiary of Shenzhen Agricultural Products

Shenzhen Shennong Kitchen Co. Ltd

Group Co. Ltd

Other explanation

5. Related transaction

(1) Goods purchasing labor service providing and receiving

Goods purchasing/labor service receiving

In RMB/CNY

Related Whether more than

Approved

Related party transaction Current Period the transaction limit Last Period

transaction limit

content (Y/N)

Shenzhen

Warehousing

Shenliang Cold

Services/Transp 25982.95 178503.88

Transport Co.ortation services

Ltd.Shenzhen

Information

Shenyuan Data

software 18675417.45 5290531.23

Technology Co.development

ltd.Shenzhen Food

Asset

Materials Group 20809.52

management

Co. Ltd

Goods sold/labor service providing

In RMB/CNY

Related party Related transaction content Current period Last period

Shenzhen Duoxi Equity

Grain and oil

Investment Fund 11320.74

sales/Cleaning services fee

Management Co. Ltd.Shenzhen Agricultural

Grain and oil sales 52800.00

Products Group Co. Ltd

Shenzhen Shenliang Cold Grain and oil

125643.48

Transport Co. Ltd. sales/Warehousing Services

Shenzhen Shennong Kitchen

Grain and oil sales 251262.00

Co. Ltd

Shenzhen Food Materials

Asset management 62894.66

Group Co. Ltd

Explanation on goods purchasing labor service providing and receiving

(2) Related lease

As a lessor for the Company:

In RMB/CNY

Lease income recognized in Lease income recognized last

Lessee Assets type

the Period Period

Shenzhen Shichumingmen

Catering Management Co. Operating site 580466.28

Ltd.As lessee:

In RMB/CNY

Lease income recognized in Lease income recognized last

Lessor Assets type

the Period Period

Shenzhen Food Materials

Office space 268542.85

Group Co. Ltd

Explanation on related lease

(3) Related guarantee

As guarantor

In RMB/CNY

Whether the guarantee

Secured party Guarantee amount Guarantee start date Guarantee expiry date

has been fulfilled

Changzhou Shenbao

Chacang E-business 5000000.00 December 20 2011 No

Co. ltd.As secured party

In RMB/CNY

Whether the guarantee

Guarantor Guarantee amount Guarantee start date Guarantee expiry date

has been fulfilled

Dongguan Fruit

Vegetable Non-Staple

28031499.73 December 27 2016 December 26 2021 No

Food Trading Market

Co. Ltd.Dongguan Fruit

Vegetable Non-Staple

299915049.97 July 27 2018 August 29 2032 No

Food Trading Market

Co. Ltd.Dongguan Fruit

Vegetable Non-Staple

18587157.80 October 20 2020 October 19 2034 No

Food Trading Market

Co. Ltd.Dongguan Fruit

Vegetable Non-Staple

40369672.45 May 9 2019 May 8 2027 No

Food Trading Market

Co. Ltd.Explanation on related guarantee

6. Receivable and payable of related party

(1) Receivable item

In RMB/CNY

Item Name Related party Ending balance Opening balance

Book balance Bad debt provision Book balance Bad debt provision

Account

receivable

Shenzhen

Shenliang Cold 164402.16 7029.57 113286.17 7029.57

Transport Co. Ltd.Shenzhen

Shennong Kitchen 23082.00 636.72 63672.00 636.72

Co. Ltd

Shenzhen Duoxi

Equity Investment

8701.00 87.01

Fund Management

Co. Ltd.Shenzhen Qianhai

Nongmai World

38259.42 382.59

E-Commerce Co.Ltd

Shenzhen Food

Materials Group 87524.34 7408.78 740878.31 7408.78

Co. Ltd

Shenzhen

Agricultural

2328.00 25.98 2598.00 25.98

Products Group

Co. Ltd

Other account

receivable

Shenzhen

Shenliang Cold 578.00 5.78 578.00 5.78

Transport Co. Ltd.Shenzhen Higreen

International

Agricultural

50000.00 50000.00

Products Logistic

Management Co.Ltd

Zhanjiang

Changshan

(Shenzhen)

5520.00 5520.00 5520.00 5520.00

Ecological

Aquaculture Co.Ltd

Shenzhen

Shenyuan Data

1000377.35 10003.77 8972895.54 89728.96

Technology Co.ltd.Changzhou

Shenbao Chacang

24384884.84 21963786.56 24494677.07 22007578.79

E-business Co.ltd.Shenzhen

Shichumingmen

Catering 2092197.67 581383.34 2092197.67 581383.34

Management Co.Ltd.Shenzhen

Investment 415644.52 415644.52

Holdings Co. Ltd.

(2) Payable item

In RMB/CNY

Item Name Related party Ending book balance Opening book balance

Dividend payable

Shenzhen Investment

2690970.14 2690970.14

Management Co. Ltd

Other account payable

Shenzhen Shenliang Cold

2790.00 2790.00

Transport Co. Ltd.Shenzhen Food Materials

146234653.72 146520998.86

Group Co. Ltd

Zhanjiang Changshan

(Shenzhen) Ecological 8020367.87 8009954.17

Aquaculture Co. Ltd

Shenzhen Duoxi Equity

Investment Fund 41486.00 41486.00

Management Co. Ltd.Shenzhen Shichumingmen

Catering Management Co. 184275.00 184275.00

Ltd.Shenzhen Investment

3510297.20 3510297.20

Management Co. Ltd

Account received in advance

Shenzhen Shenliang Cold

210.00

Transport Co. Ltd.7. Other

Nil

XIII. Commitment or contingency

1. Important commitments

Important commitments on balance sheet date

The Company has no important commitments that need to disclosed up to 30 June 2021.2. Contingency

(1) Contingency on balance sheet date

1. Lawsuits

(1) Contract disputes between Hualian Grain and Oil and Zhuhai Huabi

For the contract disputes between the plaintiff Shenzhen Hualian Grain and Oil Trading Co. Ltd. (hereinafter

referred to as "Hualian Grain and Oil") and the defendant Zhuhai Doumen Huabi Trading Co. Ltd. (hereinafter

referred to as "Zhuhai Huabi") the People's Court of Luohu District in Shenzhen made a first-instance judgment

that took effect in 2007: 1) The defendant should repay the plaintiff payment for goods of 2396300 yuan; 2) The

defendant should pay the plaintiff liquidated damages of 239600 yuan; 3) Court acceptance fee of 33200 yuan

should be borne by the defendant.In 2005 Zhuhai Huabi stopped production and its legal representative was arrested by the public security organs.It was found that Zhuhai Huabi had been cancelled.As of June 30 2021 Hualian Grain and Oil has set aside 100.00% of bad debt reserves for the receivables of

2396300 yuan from Zhuhai Huabi.

(2) Contract disputes between Hualian Grain & Oil and Huaxing Feed Factory

In August and October 2007 Shenzhen Hualian Grain and Oil Trading Co. Ltd. (Hereinafter referred to as "

Hualian Grain and Oil") sold products to Foshan Shunde Huaxing Feed Factory and received commercial

acceptance bills totaling 2958600 yuan. Due to the company’s failure to repay the overdue payment Hualian

Grain & Oil filed a lawsuit with the Shunde District People’s Court of Foshan City on October 29 2007

requesting Foshan Shunde Huaxing Feed Factory to repay the payment and pay the corresponding interest. From

June to July 2011 a total of 1638900 yuan of the company’s bankruptcy assets was recovered. As of 30 June

2021 Hualian Grain & Oil had a receivable payment of 1319700 yuan from Foshan Shunde Huaxing Feed

Factory. This amount has been withdrawn bad debt reserves by 100.00%.

(3) Mung bean business disputes between SZCG and Shengda Company

The agency contract disputes between the plaintiff Shenzhen Cereals Group Co. Ltd. (hereinafter referred to as

"SZCG") and the defendant Jilin Tongyu County Shengda Company (hereinafter referred to as "Shengda

Company") was filed and accepted by the People's Court of Futian District Shenzhen City on August 26 2010.After mediation both parties voluntarily reached a mediation agreement: 1) It is confirmed that the defendant

Shengda Company still owes the plaintiff SZCG the repurchase amount of 7.492 million yuan and the interest of

the repurchase amount of 2.8 million yuan before September 3 2009. 2) The defendant Shengda Company shall

pay the first payment of 1 million yuan to the plaintiff SZCG before October 30 2010 and pay 1 million yuan

before the end of each month from November 2010 to March 2011 and pay 492000 yuan before the end of April

2011 totaling 6492000 yuan. 3) If the defendant Shengda Company can pay the above amount in full on time

there is no need to pay the remaining principal of 1 million yuan and the interest of 2.8 million yuan; If any of the

above payments is not paid in full on time the plaintiff may apply to the court for enforcement of all the claims

listed in Item 1 above.After the mediation agreement takes effect Shengda Company has not fully fulfilled the repayment obligations

and SZCG has applied for compulsory execution. As of June 30 2021 the accounts receivables were 5602500

yuan and the execution of the remaining payments was highly uncertain SZCG has set aside the bad debt

reserves of 5602500 yuan in full for the payments.

(4) Disputes over loan contract among Changzhou Shenbao Tea-Shop former Shenshenbao and

Agricultural Products Guarantee

For the contract disputes among the plaintiff Shenzhen Agricultural Products Financing Guarantee Co. Ltd.(hereinafter referred to as "Agricultural Products Guarantee") and the defendants Changzhou Shenbao Tea-Shop

E-commerce Co. Ltd. (hereinafter referred to as "Changzhou Shenbao Tea-Shop") and Shenzhen Shenbao

Industrial Co.Ltd. (now renamed as Shenzhen Cereals Holdings Co.Ltd. hereinafter referred to as "former

Shenshenbao") the first-instance court accepted the case in June 2016 and made a judgment in May 2017: 1) The

defendant Changzhou Shenbao Tea-Shop shall repay the loan principal of 5 million yuan and the interest of

353900 yuan and the interest penalty (the interest penalty shall be based on the principal of 5 million yuan and

calculate at the annual standard of 21.6% from September 7 2013 to the actual date of repayment and for

repayment by installment the corresponding penalty interest shall be calculated until the date of each repayment)

to the plaintiff Agricultural Products Guarantee within ten days from the effective date of this judgment. 2) The

defendant Changzhou Shenbao Tea-Shop shall pay the attorney fee of 193400 yuan to the plaintiff Agricultural

Products Guarantee within ten days from the effective date of the judgment. 3) Other claims of the plaintiff

Agricultural Products Guarantee are rejected. 4) The court acceptance fee is 73600 yuan of which 71900 yuan

will be borne by the defendant Changzhou Shenbao Tea-Shop and 1700 yuan will be borne by the plaintiff; The

preservation fee of 5000 yuan shall be borne by the defendant Changzhou Shenbao Tea-Shop.On July 4 2017 Agricultural Products Guarantee filed an appeal and On April 26 2019 Shenzhen Intermediate

People's Court made the final judgment: 1) The first and second judgment of the first instance is upheld; 2) Cancel

the third judgment of the first instance; 3) Former Shenshenbao shall assume the joint and several liability for the

debts of Changzhou Shenbao Tea-Shop within the range of 3.5 million yuan. Former Shenshenbao has the right to

recover from Changzhou Shenbao Tea-Shop after the liquidation.After the judgment second instance came into effect Agricultural Products Guarantee communicated and

negotiated with Changzhou Shenbao Tea-Shop and former Shenshenbao on how to execute the judgment. In May

2021 Agricultural Products Guarantee had applied to the first-instance Futian District Court for enforcement of

5193443 yuan. As of June 30 2021 the Company has recognized liabilities of 3.5 million yuan.

(5) Contract disputes between the Company’s subsidiaries Shenbao Rock Tea Jufangyong Holdings and

Jiuxing Company Yuxing Company Xingjiu Tea Co. Ltd. Chen Yuxing Chen Guopeng

Due to the separation agreement disputes on December 3 2018 the arbitration applicants Mount Wuyi Shenbao

Rock Tea Co. Ltd. (hereinafter referred to as "Shenbao Rock Tea") and Hangzhou Jufangyong Holdings Co. Ltd.(hereinafter referred to as the "Jufangyong Holdings") took Mount Wuyi 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 and Chen Guopeng as five respondents according to the

arbitration clause in the original Formal Agreement for the Separation of Fujian Province Mount Wuyi Shenbao

Yuxing Tea Co. Ltd. and submitted to the Shenzhen International Court of Arbitration for arbitration claimed to:

1) Rule that the respondent Yijiuxing Company shall pay 5272900 yuan and liquidated damages of 1581900

yuan to the applicant Shenbao Rock Tea totaling 6854800 yuan; 2) Rule that the respondents Yuxing Company

Xingjiu Tea Co. Ltd. Chen Yuxing and Chen Guopeng shall assume joint and several liabilities for the above

receivables and liquidated damages of the applicant Shenbao Rock Tea; 3) Rule that the respondent Jiuxing

Company shall pledge 19 designated trademarks to the applicant Jufangyong Holdings and cooperate with the

relevant trademark pledge registration procedures; 4) Rule that all the respondents shall bear the lawyer fees of

190000 yuan the preservation fee and other expenses incurred by the arbitration (the applicant reserves the right

to pursue the rest of the lawyer fees); 5) Rule that all the respondents shall bear all the arbitration fees of the case.On April 18 2019 Shenzhen Court of International Arbitration held a hearing on the arbitration case. On May 26

2021 Shenzhen Court of International Arbitration made the following rulings: 1. Jiuxing Company shall

compensate Jufangyong Holding and Shenbao Rock Tea for the loss of receivables and liquidated damages of

4798369.95 yuan; 2. Yuxing Company Xingjiu Tea Co. Ltd. Chen Yuxing and Chen Guopeng shall assume

joint and several liabilities for the above payment obligations of Jiuxing Company; 3. The arbitration fee of

104953 yuan shall be paid by the five respondents to the two applicants; 4. The expenses of 4000 yuan of the two

arbitrators shall be paid directly by the five respondents to the two applicants. After the arbitration award comes

into effect the applicant has applied to the court for enforcement because the respondent refuses to repay. As of

June 30 2021 the Company has accumulatively set aside bad debt reserves of 4469500 yuan.

(6) Contract disputes between Hualian Grain and Oil and Liangshuntong Company

1) For the contract dispute case ([2019] Yue 0304 Min Chu No. 49562) between the plaintiff Dalian

Liangshuntong Supply Chain Management Co. Ltd. (hereinafter referred to as "Liangshuntong Company") and

the defendant Shenzhen Hualian Grain and Oil Trading Co. Ltd. (hereinafter referred to as "Hualian Grain and

Oil") the People's Court of Futian District made a civil judgment of first instance on July 3 2020 that: ① The

plaintiff Liangshuntong Company should pay 595800 yuan to Hualian Grain and Oil; ② Rejected

Liangshuntong Company’s litigation request; ③ Rejected other litigation requests of Hualian Grain and Oil; ④

The plaintiff Liangshuntong Company should pay in advance the litigation fee of 208900 yuan which should be

assumed by the plaintiff and the defendant Hualian Grain and Oil should pay in advance the counterclaim fee of

113000 yuan of which the plaintiff should assume 1800 yuan and the defendant should assume 111200 yuan.The plaintiff Liangshuntong Company refused to accept the judgment of the first instance and appealed to the

Shenzhen Intermediate People's Court. The second trial was held on July 29 after the Shenzhen Intermediate

People's Court accepted the case on appeal but the final judgment has yet to be received.2) For the contract dispute case (Case No.[2020] Yue 0304 Min Chu No. 2824) between the plaintiff Hualian

Grain and Oil and the defendant Liangshuntong Company the Futian District People’s Court served the "Civil

Judgment" of the first instance on December 31 2020 which judged that: ① the defendant Liangshuntong

Company shall pay Hualian Grain and Oil an advance fee of 461900 yuan and capital cost of 4030000 yuan

within ten days from the date when the judgment becomes legally effective; ② Liangshuntong Company shall

pay the capital occupation fee to Hualian Grain and Oil within ten days from the date when the judgment becomes

legally effective (Based on 461900 yuan calculate from December 11 2019 to the date when the payment is

actually paid at the annual interest rate of 10.00%); ③ The litigation fee of 42700 yuan shall be borne by

Liangshuntong Company. Liangshuntong Company submitted an appeal to the Shenzhen Intermediate People's

Court on January 22 2021. So far no notice of the second trial has been received.

(7) Disputes over construction contract between Hongxinglong and Zhishengda Company

In April 2020 Heilongjiang Zhishengda Construction Engineering Co. Ltd. (hereinafter referred to as

"Zhishengda Company") sued Heilongjiang Hongxinglong Agricultural Reclamation Shenxin Grain Industrial

Park Co. Ltd. (hereinafter referred to as "Hongxinglong") for construction contract disputes request the

Heilongjiang Hongxinglong People's Court that: 1) Confirm that the "Letter on Rectification of Completed

Projects and Cancellation of Not Constructed Projects" sent by Hongxinglong on April 7 2020 does not have the

effect of canceling the contract the cancellation of the contract made by it is invalid and judge that the defendant

Hongxinglong should continue to perform the contract (the project cost required to perform the contract is

5137800 yuan). 2) The litigation fee and other legal costs should be assumed by Hongxinglong.On July 29 2020 Hongxinglong filed a counterclaim with the court of first instance with the following appeals: 1)

Request the court to confirm the validity of the cancellation of the construction contract between Hongxinglong

and Zhishengda Company in accordance with the law. 2) Request the court to rule that the Zhishengda should pay

Hongxinglong liquidated damages of 1003200 yuan of which liquidated damages for overdue completion of the

project of 253200 yuan repair costs for unqualified project quality of about 240000 yuan (the specific amount is

to be determined by a third party) liquidated damages for project manager’s absence from the construction site

without permission of 500000 yuan liquidated damages for the migrant worker’s collective petitions of 10000

yuan. 3) The counterclaim fee and appraisal fee shall be borne by Zhishengda. At present all parties involved in

the case have filed applications for judicial appraisal to the court of first instance and the case has not yet been

heard.(8) Contract dispute case between Jufangyong Commercial and Trading and Xingfu Feixiang Company

In July 2020 Hangzhou Jufangyong Commercial and Trading Co. Ltd. (hereinafter referred to as "Jufangyong

Commercial and Trading") sued Hangzhou Xingfu Feixiang Commercial and Trading Co. Ltd. (hereinafter

referred to as "Xingfu Feixiang") due to contract dispute requested Xiaoshan Primary People's Court Hangzhou

Zhejiang 1) Order the defendant Xingfu Feixiang to pay a total of 2454700 yuan for the cooperation royalties

and water and electricity charges; 2) Order the defendant to pay cooperation fee of 699700 yuan and water and

electricity charges (according to the actual amount incurred) to the western restaurant from July 1 2019 to

September 10 2019; 3) Order the defendant to pay liquidated damages of 515300 yuan; 4) Order the defendant to

pay liquidated damages (with 3154400 yuan as the base and the monthly interest rate of 2% from April 16 2020

to the date of paying off); 5) Order that the litigation costs should be borne by the defendant.Since Xingfu Feixiang applied for bankruptcy and the court has accepted the appointment of administrator the

court of first instance ruled to suspend the trial in August 2020 and Jufangyong Commercial and Trading has filed

claims with the bankruptcy administrator. The bankruptcy administrator of Xingfu Feixiang namely Shanghai

City Development (Hangzhou) Law Firm is in the process of checking the assets and there is no property

distribution plan yet.On December 23 2020 Xiaoshan Court resumed the trial of this case and the bankruptcy administrator issued the

confirmation of debt confirming the debt principal of 2422000 yuan and the interest of 166000 yuan a total of

2588000 yuan. So far no judgment has been made.

(9) Contract dispute case between Big Kitchen Ltd and Tianjin Rongyi Company

On April 27 2021 Shenzhen Shenliang Big Kitchen Food Supply Chain Co. Ltd. (hereinafter referred to as "Big

Kitchen Ltd") received a summons from Shanghai Huangpu District People's Court Tianjin Rongyi Supply Chain

Management Co. Ltd. (hereinafter referred to as "Tianjin Rongyi Company") sued and required Big Kitchen Ltd

to deliver 10400 tons of rice (with the value of 41.6 million yuan) pay penalty of 4784000 yuan issue an

invoice of 100000 yuan bear lawyer's fee of 300000 yuan and bear litigation costs of this case.On May 27 2021 the case was held in Shanghai Huangpu District People's Court and the court required both

parties to provide supplementary evidence. On May 30 Big Kitchen Ltd submitted the Application for Judicial

Appraisal of Seal applying for judicial appraisal of the seal of Big Kitchen Ltd on the relevant evidence submitted

by Tianjin Rongyi Company. At present the court has designated institutions to for judicial appraisal of the seal

up to now it is still waiting for the second session.

(10) Disputes over construction subcontract between Dongguan Logistics and Xu Anwu

On March 17 2021 the plaintiff Xu Anwu filed a lawsuit against the defendants Dongguan Shenliang Logistics

Co. Ltd. (hereinafter referred to as "Dongguan Logistics") Guangdong Dianbai Construction Engineering

Corporation Gansu Installation Construction Group Co. Ltd. and Xu Jianqiang to the First People's Court of

Dongguan claiming that: 1. The four defendants immediately pay the project payment of 10445000 yuan to the

plaintiff; 2. The legal costs of this case shall be borne by the four defendants. The case has been held on June 4

and Dongguan Logistics has entrusted lawyers to appear in court for defence. So far no judgment has been made.11) Disputes over private lending between Shenshenbao Tea Culture and Shi Chu Ming Men

In May 2021 Shenshenbao Tea Culture Commercial Management Co. Ltd. (hereinafter referred to as

"Shenshenbao Tea Culture") filed a lawsuit against the defendant Shenzhen Shi Chu Ming Men Catering

Management Co. Ltd. (hereinafter referred to as "Shi Chu Ming Men") on the basis of the disputes over the

private lending contract requesting the People's Court of Nanshan District of Shenzhen to: 1. Order the defendant

Shi Chu Ming Men to return the loan principal of 1183000 yuan to the plaintiff Shenshenbao Tea Culture; 2.Order Shi Chu Ming Men to pay the interest on borrowing to Shenshenbao Tea Culture (the interest is piecewise

calculated by: A. Taking the borrowing principal of 500000 yuan as the base the interest is calculated according

to the annual bank loan interest rate of the People's Bank of China for the same period is 78179.17 yuan from

February 2 2016 to August 19 2019; B. Taking the borrowing principal of 333000 yuan as the base the interest

is calculated according to the annual bank loan interest rate of the People's Bank of China for the same period is

70022.92 yuan from June 16 2016 to August 19 2019; C. Taking the borrowing principal of 200000 yuan as the

base the interest is calculated according to the annual bank loan interest rate of the People's Bank of China for the

same period is 67425.00 yuan from July 19 2016 to August 19 2019; D. Taking the borrowing principal of

150000 yuan as the base the interest is calculated according to the annual bank loan interest rate of the People's

Bank of China for the same period is 64887.50 yuan from September 9 2016 to August 19 2019; E. Taking the

borrowing principal of 1183000 yuan as the base the interest is calculated based on the loan prime rate (LPR)

that the People's Bank of China authorizes the National Interbank Funding Center to publish from August 20

2019 to the date of actual repayment. The total provisional interest is 171250.68 yuan; 3. The legal costs of this

case shall be borne by the defendant Shi Chu Ming Men. (The total principal and provisional interest of the above

borrowings is 1354250.68 yuan)

People's Court of Nanshan District of Shenzhen has accepted the case so far no date has been set for session.2. Guarantee

(1) Subsidiary of the Company -SZCG provide a guarantee to its subsidiary -Dongguan Logistics

SZCG provide a guarantee to Dongguan Logistics for the application of loans amount of guarantee is 547.7159

million yuan. As of the report date the loan is not yet due for repayment.

(2) Associated guarantees and restricted assets

For restricted assets see Note VII. 56 Assets with restricted ownership or use rights and for related guarantees

see Note 12 5 Related Party Transactions.

(2) If the Company has no important contingency need to disclosed explain reasons

The Company has no important contingency that need to disclose.3. Other

Nil

XIV. Events after balance sheet date

1. Description of other balance sheet events after the date

As of the approval date of this financial report the company has no major future events that need to be disclosed.XV. Principal notes of financial statements of parent company

1.Account receivable

(1) Account receivable classify by category

In RMB/CNY

Ending balance Opening balance

Bad debt

Book balance Book balance Bad debt provision

Category provision Book Book

Amoun Amoun Accrua value Amoun Amoun Accrual value

Ratio Ratio

t t l ratio t t ratio

Account receivable

with bad debt 28453. 28453. 100.00 28453. 28453. 100.00

0.01% 0.69%

provision accrual 08 08 % 08 08 %

on a single basis

Including:

Account receivable

with single

significant amount

and withdrawal

bad debt provision

on single basis

Account receivable

with single minor

amount but with 28453. 28453. 100.00 28453. 28453. 100.00

0.01% 0.69%

bad debts provision 08 08 % 08 08 %

accrued on a single

basis

Account receivable

36416 36415

with bad debt 99.99 10537. 40982 10537. 408768

0865.9 0328.7 99.31% 0.26%

provision accrual % 22 18.40 22 1.18

9 7

on portfolio

Including:

Combination of 12551 0.03% 10537. 8.39% 11498 79699 19.31% 10537. 1.32% 786459.sales receivables 8.94 22 1.72 6.91 22 69

36403 36403

Specific object 99.96 33012 330122

5347.0 5347.0 80.00%

combinations % 21.49 1.49

5 5

36418 36415

100.00 38990. 41266 100.00 38990. 408768

Total 9319.0 0.01% 0328.7 0.94%

% 30 71.48 % 30 1.18

7 7

Bad debt provision accrual on single basis:28453.08

In RMB/CNY

Ending balance

Name

Book balance Bad debt provision Accrual ratio Accrual causes

Other accrual on single Slightly possibly taken

28453.08 28453.08 100.00%

basis back

Total 28453.08 28453.08 -- --

Bad debt provision accrual on single basis:

In RMB/CNY

Ending balance

Name

Book balance Bad debt provision Accrual ratio Accrual causes

Bad debt provision accrual on portfolio:10537.22

In RMB/CNY

Ending balance

Name

Book balance Bad debt provision Accrual ratio

Combination of sales

125518.94 10537.22 8.39%

receivables

Specific object combinations 364035347.05

Total 364160865.99 10537.22 --

Explanation on portfolio determines:

Bad debt provision accrual on portfolio:

In RMB/CNY

Ending balance

Name

Book balance Bad debt provision Accrual ratio

Explanation on portfolio determines:

If the provision for bad debts of account receivable is made in accordance with the general model of expected credit losses please

refer to the disclosure of other account receivables to disclose related information about bad-debt provisions:

□ Applicable √Not applicable

By account age

In RMB/CNY

Account age Ending balance

Within one year (including 1-year) 364152013.39

2-3 years 8852.60

Over 3 years 28453.08

Over 5 years 28453.08

Total 364189319.07

(2) Bad debt provision accrual collected or reversal in the period

Bad debt provision accrual in the period:

In RMB/CNY

Amount changed in the period

Opening

Category Collected or Ending balance

balance Accrual Written off Other

reversal

Bad debt

provision

28453.08 28453.08

accrual on

single basis

Sales

10537.22 10537.22

receivable

Total 38990.30 38990.30

Including major amount bad debt provision that collected or reversal in the period: nil

In RMB/CNY

Enterprise Amount collected or reversal Collection way

(3) Top 5 account receivables at ending balance by arrears party

In RMB/CNY

Ending balance of accounts Proportion in total receivables Bad debt preparation ending

Enterprise

receivable at ending balance balance

First 364035347.05 99.94%

Second 66668.34 0.02%

Third 25574.00 0.01%

Fourth 24424.00 0.01% 244.24

Fifth 18456.50 0.01% 18456.50

Total 364170469.89 99.99%

2. Other account receivable

In RMB/CNY

Item Ending balance Opening balance

Dividend receivable 390000000.00 390000000.00

Other account receivable 434833488.88 502105968.23

Total 824833488.88 892105968.23

(1) Dividend receivable

1) Category of dividend receivable

In RMB/CNY

Item (or the invested entity) Ending balance Opening balance

SZCG 390000000.00 390000000.00

Total 390000000.00 390000000.00

2) Important dividend receivable with account age over one year

In RMB/CNY

Whether impairment

Item (or the invested Reasons for not

Ending balance Account age occurs and its

entity) collection

judgment basis

No internal unit

SZCG 390000000.00 1-2 years Not yet settled

payments

Total 390000000.00 -- -- --

(2) Other account receivable

1) Other account receivable classify by nature

In RMB/CNY

Nature Ending book balance Opening book balance

Margin and deposit 233029.39 73975.47

Current payments and others 462266131.58 529477457.08

Total 462499160.97 529551432.55

2) Accrual of bad debt provision

In RMB/CNY

Phase I Phase II Phase III

Expected credit losses for Expected credit losses for

Expected credit

Bad debt provision the entire duration the entire duration (with Total

losses over next 12

(without credit credit impairment

months

impairment occurred) occurred)

Balance on Jan. 1

258262.82 27187201.50 27445464.322021

Balance of Jan. 1 2021

—— —— —— ——

in the period

Current accrual 220207.77 220207.77

Balance on Jun. 30

258262.82 27407409.27 27665672.092021

Change of book balance of loss provision with amount has major changes in the period

□ Applicable √Not applicable

By account age

In RMB/CNY

Account age Ending balance

Within one year (including 1-year) 431691818.12

2-3 years 5749601.83

Over 3 years 25057741.02

3-4 years 436664.33

4-5 years 436664.33

Over 5 years 24184412.36

Total 462499160.97

3) Bad debt provision accrual collected or reversal in the period

Bad debt provision accrual in the period:

In RMB/CNY

Amount changed in the period

Opening

Category Collected or Ending balance

balance Accrual Written off Other

reversal

Bad debt

provision

27187201.50 220207.77 27407409.27

accrual on

single basis

Bad debt

258262.82 258262.82

provision

accrual on

portfolio

Total 27445464.32 220207.77 27665672.09

Including major amount with bad debt provision reverse or collected in the period: nil

In RMB/CNY

Enterprise Amount reversal or collected Collection way

4)Top 5 other receivables at ending balance by arrears party

In RMB/CNY

Ratio in total

Bad debt

ending balance of

Enterprise Nature Ending balance Account age preparation ending

other account

balance

receivables

First Internal funds 166151922.89 Within one year 35.92%

Second Internal funds 121559181.62 Within one year 26.28%

Three Internal funds 116516793.43 Within one year 25.19%

Fourth Intercourse funds 24384884.84 Over 5 years 5.27% 21963786.56

Fifth Internal funds 14441831.94 Within one year 3.12%

Total -- 443054614.72 -- 95.80% 21963786.56

3. Long-term equity investment

In RMB/CNY

Ending balance Opening balance

Item Impairment Impairment

Book balance Book value Book balance Book value

provision provision

Investment for 4034894425. 4029394425. 3713214425. 3707714425.5500000.00 5500000.00

subsidiary 09 09 09 09

Investment for

associates and 2927628.53 2927628.53 2927628.53 2927628.53

joint venture

4037822053. 4029394425. 3716142053. 3707714425.Total 8427628.53 8427628.53

62 09 62 09

(1) Investment for subsidiary

In RMB/CNY

The invested Opening Current changes (+ -) Ending Ending

entity balance Accrual of balance balance of

Additional Capital

(book value) impairment Other (book value) impairment

investment reduction

provision provision

Shenbao

2550000.00 2550000.00

Property

Shenbao

Industry & 0.00 0.00 5500000.00

Trade

Shenliang 80520842.3 80520842.3

Food 6 6

Shenbao 168551781. 168551781.Huacheng 80 80

Huizhou 60000000.0 60000000.0

Shenbao 0 0

Shenbao 54676764.1 54676764.1

Technology 1 1

Shenbao 50000000.0 50000000.0

Investment 0 0

329141503 329141503

SZCG

6.82 6.82

Dongguan 321680000. 321680000.Logistics 00 00

370771442 321680000. 402939442

Total 5500000.00

5.09 00 5.09

(2) Investment for associates and joint venture

In RMB/CNY

Current changes (+ -)

Ending

Investm Cash

Openin Other Accrual balance

Investm ent dividen Ending

g Additio compre of of

ent Capital gains Other d or balance

balance nal hensive impair impair

compan reducti recogni equity profit Other (book

(book investm income ment ment

y on zed change announ value)

value) ent adjustm provisi provisi

under ced to

ent on on

equity issued

I. Joint venture

II. Associated enterprise

Shenzh 57628.en 53

Shenba

o

(Liaoyu

an)

Industri

al

Compa

ny

Shenzh

en

Shenba

o28700

(Xinmi

00.00

n)

Foods

Co.Ltd

Changz

hou

Shenba

o

Chacan

g

E-busin

ess Co.Ltd.Subtota 29276

l 28.5329276

Total

28.53

(3) Other explanation

Nil

4. Operating revenue and operating cost

In RMB/CNY

Current period Last period

Item

Revenue Cost Revenue Cost

Main business 78409527.17 235795.14 191007.09 250130.28

Total 78409527.17 235795.14 191007.09 250130.28

Information relating to revenue:

In RMB/CNY

Category Division 1 Division 2 Total

Including:

Including:

Including:

Including:

Including:

Including:

Including:

Information relating to performance obligations:

Nil

Information related to the transaction price apportioned to the remaining performance obligations:

The amount of income corresponding to the performance obligations that have been signed at the end of this reporting period but

have not yet been fulfilled or have not done with fulfillment is 411.00 yuan among them 411.00 yuan of revenue is expected to be

recognized in 2021 0.00 yuan of revenue is expected to be recognized in 2022 and 0.00 yuan of revenue is expected to be

recognized in 2023.Other explanation:

5. Investment income

In RMB/CNY

Item Current period Last period

Long-term equity investment income

-48505.63

measured by equity

Investment income from disposal of

2337075.95

long-term equity investment

Investment income during the period of

116111.11 50729.15

tradable financial assets hold

Dividend 451054.95 390473276.41

Total 567166.06 392812575.88

6. Other

Nil

XVI. Supplementary information

1. Current non-recurring gains/losses

√ Applicable □Not applicable

In RMB/CNY

Item Amount Note

Gains/losses from the disposal of non-current asset 4753.12

Governmental subsidy reckoned into current gains/losses (not including the

subsidy enjoyed in quota or ration according to national standards which are 4811695.56

closely relevant to enterprise’s business)

Profit and loss of assets delegation on others’ investment or management 3061191.63

Gains and losses from change of fair values of held-for-transaction financial

assets derivative financial assets held-for-transaction financial liability and

derivative financial liability except for the effective hedge business related to

288972.32

normal business of the Company and investment income from disposal of

tradable financial assets derivative financial assets tradable financial liability

derivative financial liability and other debt investment.Other gains/losses items that conform to the definition of non-recurring

1529279.86

gains/losses

Less: impact on income tax 2005561.30

Impact on minority interests 883122.74

Total 6807208.45 --

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

Earnings per share

Profits during report period Weighted average ROE Basic earnings per Diluted earnings per

share (RMB/Share) share (RMB/Share)

Net profits belong to common

stock stockholders of the 5.17% 0.2116 0.2116

Company

Net profits belong to common

stock stockholders of the 5.02% 0.2057 0.2057

Company after deducting

nonrecurring gains and losses

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

In RMB/CNY

Net profit Net assets

Current period Last period Ending balance Opening balance

Chinese GAAP 243846874.76 210738686.12 4448099108.10 4595331999.76

Items and amount adjusted by IAS:

Adjustment for other

payable fund of stock 1067000.00 1067000.00

market regulation

IAS 243846874.76 210738686.12 4449166108.10 4596398999.76

(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

4. Other

Nil