深圳市深粮控股股份有限公司SHENZHEN CEREALS HOLDINGS CO.,LTD.
ANNUAL REPORT 2020
April 2021
Section I. Important Notice, Contents and InterpretationBoard of Directors, Supervisory Committee, all directors, supervisors and seniorexecutives of SHENZHEN CEREALS HOLDINGS CO.,LTD. (hereinafterreferred to as the Company) hereby confirm that there are no any fictitiousstatements, misleading statements, or important omissions carried in this report,and shall take all responsibilities, individual and/or joint, for the reality,accuracy and completion of the whole contents.Chairman of the Company Zhu Junming, General Manager Hu Xianghai, Headof Accounting Jin Zhenyuan and Head of Accounting Institution (AccountingSupervisors) Wen Jieyu hereby confirm that the Financial Report of AnnualReport 2020 is authentic, accurate and complete.All Directors are attended the Board Meeting for deliberation of this Report.Concerning the forward-looking statements with future planning involved in theannual report, they do not constitute a substantial commitment for investors,Securities Times, China Securities Journal, Hong Kong Commercial Daily andJuchao Website (www.cninfo.com.cn) are the media appointed by the Companyfor information disclosure, all information of the Company disclosed in theabove mentioned media should prevail. Investors are advised to exercise cautionof investment risks.The Company has analyzed the risk factors that the Company may exist and itscountermeasures in the report, investors are advised to pay attention to read“Prospect for future development of the Company” in the report of SectionIV-Discussion and Analysis of the Operation. This report has been prepared inChinese and English version respectively. In the event of difference ininterpretation between the two versions, Chinese report shall prevail.
The profit distribution plan deliberated and approved by the Board Meetingwas: distributed cash bonus of 2 yuan (tax included) for every 10 shares held bywhole shareholders based on the 1,152,535,254, zero share(tax included) forbonus and no transfer of public reserves into share capital either.
Contents
Section I. Important Notice, Contents and Interpretation .......................................................... 2
Section II Company Profile and Main Financial Indexes ...... 6
Section III Summary of Company Business ...... 11
Section IV. Discussion and Analysis of the Operation ................................................................ 15
Section V. Important Events ....................................................................................................... 36
Section VI. Changes in Shares and Particulars about Shareholders......................................... 69
Section VII. Preferred Stock ....................................................................................................... 76
Section VIII. Convertible Bonds ................................................................................................. 77Section IX. Particulars about Directors, Supervisors, Senior Executives and Employees ....... 78Section X. Corporate governance ............................................................................................... 88
Section XI. Corporate Bond ....................................................................................................... 96
Section XII. Financial Report ..................................................................................................... 97
Section XIII. Documents available for Reference .................................................................... 287
Interpretation
| Items | Refers to | Contents |
| SZCH/Listed Company /the Company/ | Refers to | Shenzhen Cereals Holdings Co., Ltd. |
| Shenshenbao/Shenbao Company | Refers to | Shenzhen Shenbao Industrial Co., Ltd. |
| SZCG | Refers to | Shenzhen Cereals Group Co., Ltd |
| Doximi | Refers to | Shenliang Doximi Business Co., Ltd. |
| Flour Company, Flour Factory | Refers to | Shenzhen Flour Co., Ltd |
| Shenliang Quality Inspection | Refers to | Shenliang Quality Inspection Co., Ltd. |
| Dongguan Logistics | Refers to | Dongguan Shenliang Logistics Co., Ltd. |
| Dongguan Food Industrial Park | Refers to | Dongguan International Food Industrial Park Development Co., Ltd. |
| Shenbao Huacheng | Refers to | Shenzhen Shenbao Huacheng Technology Co., Ltd. |
| Food Materials Group | Refers to | Shenzhen Food Materials Group Co., Ltd |
| Fude Capital | Refers to | Shenzhen Fude State Capital Operation Co., Ltd. |
| Agricultural Products | Refers to | Shenzhen Agricultural Products Group Co., Ltd |
| SIHC | Refers to | Shenzhen Investment Holdings Co., Ltd. |
| Shenzhen SASAC | Refers to | Shenzhen Municipal People’s Government State-owned Assets Supervision & Administration Commission |
| CSRC | Refers to | China Securities Regulation Commission |
| SSE | Refers to | Shenzhen Stock Exchange |
| BDO CPAs | Refers to | BDO China Shu Lun Pan Certified Public Accountant LLP |
| Article of Association | Refers to | Article of Association of Shenzhen Cereals Holdings Co., Ltd. |
| RMB/10 thousand Yuan | Refers to | CNY/ten thousand Yuan |
Section II Company Profile and Main Financial IndexesI. Company information
| Short form for share | SZCH, Shenliang B | Stock code | 000019, 200019 |
| Listing stock exchange | Shenzhen Stock Exchange | ||
| Chinese name of the Company | 深圳市深粮控股股份有限公司 | ||
| Abbr. of Chinese name of the Company | 深粮控股 | ||
| English name of the Company(if applicable) | SHENZHEN CEREALS HOLDINGS CO.,LTD | ||
| Legal Representative | Zhu Junming | ||
| Registrations add. | 8/F, Tower B, No.4 Building, Software Industry Base, South District, Science & Technology Park, Xuefu Rd., Yuehai Street, Nanshan District, Shenzhen | ||
| Code for registrations add | 518057 | ||
| Offices add. | 13/F, Tower A, World Trade Plaza, No.9 Fuhong Rd., Futian District, Shenzhen | ||
| Codes for office add. | 518033 | ||
| Company’s Internet Web Site | www.slkg1949.com | ||
| szch@slkg1949.com | |||
II. Person/Way to contact
| Secretary of the Board | Rep. of security affairs | |
| Name | Chen Xiaohua | Chen Kaiyue, Liu Muya |
| Contact add. | 13/F, Tower A, World Trade Plaza, No.9 Fuhong Rd., Futian District, Shenzhen | 13/F, Tower A, World Trade Plaza, No.9 Fuhong Rd., Futian District, Shenzhen |
| Tel. | 0755-83778690 | 0755-83778690 |
| Fax. | 0755-83778311 | 0755-83778311 |
| chenxh@slkg1949.com | chenky@slkg1949.com, liumy@slkg1949.com |
III. Information disclosure and preparation place
| Newspaper appointed for information disclosure | Securities Times; China Securities Journal and Hong Kong Commercial Daily |
| Website for annual report publish appointed by CSRC | Juchao Website: www.cninfo.com.cn |
| Preparation place for annual report | Office of the Board of Directors |
IV. Registration changes of the Company
| Organization code | 91440300192180754J |
| Changes of main business since listing (if applicable) | On February 18, 2019, the company completed the registration procedures of changes in industry and commerce for business scope and other matters. The main business has newly increased the modern food supply chain services as grain & oil trading, processing, storage and logistics. |
| Previous changes for controlling shareholders (if applicable) | On 10 September 1999, Shenzhen Investment Management Co., Ltd. entered into the “Equity Transfer Agreement of Shenzhen Shenbao Industrial Co., Ltd.” with Agricultural Products for 58,347,695 shares of the Company (35% in total shares of the Company) transfer to Agricultural Products with price of RMB 1.95 per share. Agricultural Products comes to the first majority shareholder of the Company after transfer and procedures for the above equity transfer has completed in June 2003. On April 3, 2018, Shenzhen Investment Holdings Co., Ltd. completed the transfer of all of its 79,484,302 shares of A shares in the company to Food Materials Group. After the completion of the equity transfer, Food Materials Group directly holds 79,484,302 shares of A shares in the company (accounting for 16% of the company’s original total share capital) and controls 19.09% shares of the company through Agricultural Products, becoming the controlling shareholder of the company. |
V. Other relevant informationCPA engaged by the Company
| Name of CPA | BDO China Shu Lun Pan Certified Public Accountant LLP |
| Offices add. for CPA | BDO CPAs, 5/F, No.11 Building, Phase II q-plex, No. 4080, Qiaoxiang Rd., Nanshan District, |
| Signing Accountants | Qi Tao, Tao Guoheng |
Sponsor engaged by the Company for performing continuous supervision duties in reporting period
□ Applicable √ Not applicable
Financial consultant engaged by the Company for performing continuous supervision duties in reporting period
□ Applicable √ Not applicable
VI. Main accounting data and financial indexesWhether it has retroactive adjustment or re-statement on previous accounting data or not
□Yes √No
| 2020 | 2019 | Changes over last year | 2018 | |
| Operating revenue (RMB) | 11,884,527,506.34 | 11,059,984,335.92 | 7.46% | 10,758,782,838.14 |
| Net profit attributable to shareholders of the listed | 405,088,385.54 | 363,501,809.52 | 11.44% | 308,331,032.44 |
| Company(RMB) | ||||
| Net profit attributable to shareholders of the listed Company after deducting non-recurring gains and losses(RMB) | 374,210,363.49 | 350,898,272.66 | 6.64% | -70,825,168.94 |
| Net cash flow arising from operating activities(RMB) | 286,528,222.27 | 190,053,823.97 | 50.76% | 299,103,635.58 |
| Basic earnings per share (RMB/Share) | 0.3515 | 0.3154 | 11.45% | 0.2675 |
| Diluted earnings per share (RMB/Share) | 0.3515 | 0.3154 | 11.45% | 0.2675 |
| Weighted average ROE | 8.99% | 8.46% | 0.53% | 7.70% |
| Year-end of 2020 | Year-end of 2019 | Changes over end of last year | Year-end of 2018 | |
| Total assets(RMB) | 7,309,384,147.93 | 6,775,067,275.86 | 7.89% | 6,468,951,793.87 |
| Net assets attributable to shareholder of listed Company(RMB) | 4,595,331,999.76 | 4,420,751,187.57 | 3.95% | 4,172,502,535.11 |
The cause of the accounting policy change and accounting error correctionThe lower one of net profit before and after deducting the non-recurring gains/losses in the last three fiscal years is negative, and theaudit report of last year shows that the ability to continue operating is uncertain
□Yes √No
The lower one of net profit before and after deducting the non-recurring gains/losses is negative
□Yes √No
VII. Difference of the accounting data under accounting rules in and out of China
1. Difference of the net profit and net assets disclosed in financial report, under both IAS(International Accounting Standards) and Chinese GAAP (Generally Accepted AccountingPrinciples)
√ Applicable □ Not applicable
In RMB
| Net profit attributable to shareholders of the listed Company | Net assets attributable to shareholder of listed Company | |||
| Current period | Last period | Ending amount | Opening amount | |
| Chinese GAAP | 405,088,385.54 | 363,501,809.52 | 4,595,331,999.76 | 4,420,751,187.57 |
| Items and amount adjusted by IAS | ||||
| Adjustment for other payable | 1,067,000.00 | 1,067,000.00 | ||
| fund of stock market regulation | ||||
| IAS | 405,088,385.54 | 363,501,809.52 | 4,596,398,999.76 | 4,421,818,187.57 |
2. Difference of the net profit and net assets disclosed in financial report, under both foreign accountingrules and Chinese GAAP (Generally Accepted Accounting Principles)
□ Applicable √ Not applicable
The Company has no above mentioned condition occurred in the period
3. Explanation on differences of the data under accounting standards in and out of China
□ Applicable √ Not applicable
VIII. Main financial index disclosed by quarter
In RMB
| Q 1 | Q 2 | Q 3 | Q 4 | |
| Operating revenue | 1,694,255,989.17 | 3,046,172,232.93 | 3,197,418,867.63 | 3,946,680,416.61 |
| Net profit attributable to shareholders of the listed Company | 82,984,830.90 | 127,753,855.22 | 99,704,522.49 | 94,645,176.93 |
| Net profit attributable to shareholders of the listed Company after deducting non-recurring gains and losses | 80,664,162.33 | 116,095,919.47 | 94,713,417.78 | 82,736,863.91 |
| Net cash flow arising from operating activities | 297,500,751.24 | -287,890,390.09 | 381,727,535.16 | -104,809,674.04 |
Whether there are significant differences between the above-mentioned financial index or its total number and the relevant financialindex disclosed in the Company’s quarterly report and semi-annual report
□Yes √ No
IX. Items and amounts of extraordinary profit (gains)/loss
√ Applicable □ Not applicable
In RMB
| Item | 2020 | 2019 | 2018 | Note |
| Gains/losses from the disposal of non-current asset (including the write-off that accrued for impairment of assets) | 2,072,531.42 | -43,069.03 | 1,207,842.88 |
| Governmental subsidy reckoned into current gains/losses (not including the subsidy enjoyed in quota or ration according to national standards, which are closely relevant to enterprise’s business) | 18,503,372.31 | 12,297,924.24 | 8,311,158.51 | |
| Fund possession cost reckoned in current gain/loss charged from non-financial enterprise | 436,664.31 | 490,289.86 | ||
| Profit and loss of assets delegation on others’ investment or management | 12,655,258.64 | 6,299,093.96 | 1,984,446.92 | |
| Net gains/losses of the current period from beginning of the period to date of consolidation for those subsidiary arising from enterprise combined under the same control | 374,880,023.05 | |||
| Gains and losses from change of fair values of held-for-transaction financial assets, derivative financial assets, held-for-transaction financial liability and derivative financial liability except for the effective hedge business related to normal business of the Company, and investment income from disposal of tradable financial assets, derivative financial assets, tradable financial liability, derivative financial liability and other debt investment. | -151,852.20 | 41,281.76 | -474,740.24 | |
| Switch-back of provision of impairment of account receivable and contract assets which are treated with separate depreciation test | 1,236,198.70 | 1,035,149.32 | ||
| Other non-operating income and expenditure except for the aforementioned items | 2,423,255.86 | -4,544,601.53 | -4,434,126.83 | |
| Other gains/losses items that conform to the definition of non-recurring gains/losses | 496,383.61 | 450,000.00 | ||
| Less: impact on income tax | 5,591,230.45 | 2,149,564.84 | 3,210,576.33 | |
| Impact on minority shareholders’ equity (after-tax) | 765,895.84 | 769,341.33 | 48,116.44 | |
| Total | 30,878,022.05 | 12,603,536.86 | 379,156,201.38 | -- |
Concerning the extraordinary profit (gain)/loss defined by Q&A Announcement No.1 on Information Disclosure for CompaniesOffering Their Securities to the Public --- Extraordinary Profit/loss, and the items defined as recurring profit (gain)/loss according tothe lists of extraordinary profit (gain)/loss in Q&A Announcement No.1 on Information Disclosure for Companies Offering TheirSecurities to the Public --- Extraordinary Profit/loss, explain reasons
□ Applicable √ Not applicable
In reporting period, the Company has no particular about items defined as recurring profit (gain)/loss according to the lists ofextraordinary profit (gain)/loss in Q&A Announcement No.1 on Information Disclosure for Companies Offering Their Securities tothe Public --- Extraordinary Profit/loss
Section III Summary of Company Business
I. Main businesses of the Company in the reporting period
During the reporting period, the company further promoted the business integration and coordinated development, the main businessincludes 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 andoil as well as the sales of fine tea, beverage and condiment. According to the market conditions and the needs of upstream anddownstream enterprises, the products purchased are independently traded. The unprocessed grain such as wheat, rice in the husk, corn,barley and sorghum are mainly supply to the customers such as large traders, feed and flour processing enterprises in the industry; therice, flour, edible oil, fine tea and beverage etc. are mainly supply to demanding units and community residents etc.
Food processing and manufacturing business are mainly the processing the technology research in aspect of flour, rice, cooking oil,tea and natural 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”high-gluten tailored flour and biscuit tailored flour etc.; Rice products include “Shenliang Duoxi”, “Guzhixiang”, “Jinjiaxi”,“Runxiangliangpin”, “Hexiang” and “Taitai Fukou” etc. Cooking oil products include brands such as “Shenliang Fuxi”, “ShenliangJinxi” and “Youtian” etc. “Shenliang Yushuiqing” has formed a brand serial of rice, noodles, oil and miscellaneous grains. Tea brandsmainly include "Jufangyong" series original leaf tea; "Yichong" fresh extract, "Jindiao" instant tea powder and other teadeep-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. During the reporting period, the company launched new products such asYueqiu Tea Wine and "Black-faced Spoonbill" Bama Spring Drinking Water.
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 operationmanagement services for all kinds of clients in the upstream and downstream of the industrial chain, by using the advantage of brandreputation, operation service capacity and facility technology that accumulated in field of grain and oil market. Its Dongguan smartgain 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 foodstorage and distribution services to the customers, and Shengliang Property is a professional assets management platform enterprise.
II. Major changes in main assets
1. Major changes in main assets
| Major assets | Note of major changes |
| Equity assets | No major Change |
| Fixed assets | Part of the construction in progress from Shenliang Dongguan Grain Logistic Nodes was completed and transferred to fixed assets |
| Intangible assets | No major Change |
| Construction in progress | Project of the Shenliang Dongguan Grain Logistic Nodes was recognized as “construction in progress” according to its progress, and part of the projects was completed and transferred to fixed assets |
2. Main overseas assets
□ Applicable √ Not applicable
III. Core Competitiveness AnalysisThe company closely follows the new requirements of food safety and the development of the grain, oil and food industry under thenew situation, and strives to extend the industrial chain, enhance the value chain, improve the supply chain, strengthen and optimizethe main business of grain, oil and food, and walks out a sustainable and high-quality development path that is different fromtraditional grain companies, and grows into a "ten billion" backbone grain enterprise with great competitiveness, innovation andinfluence 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. It has formed aset of effective system to promote the quality and efficiency of enterprise operation and development and preservation and appreciationof the state-owned assets. The company vigorously promotes the innovation and transformation of business models, and activelypromotes the transition from “trade-oriented enterprises” to “service-oriented enterprises”, and from “operational management andcontrol” to “strategic management and control”. In the business management and control, give full play to the characteristics andadvantages of Shenzhen’s dynamic reserve mechanism of “dynamic rotation” and “constantly stocked & replenished”, the companybuilds a “six-in-one” management and control model that the “business operations and fund management, inventory management,quality management, contract management and information system management” relatively separate and check and balance each other,at the same time, it strengthens risk management, budget management, plan management, contract management, customer managementand brand management and other measures to effectively reduce the operation risks while fully participating in market competition,realizing the deep integration of “ensuring food security” and “promoting development”. Through innovative talent developmentmechanism, the company has established an open talent team to meet the long-term development of enterprises and reserve intelligencefor the enterprise upgrading and development. The company has innovated and implemented the EVA performance appraisalmechanism and established a result-oriented incentive and restraint assessment mechanism which effectively built the performanceculture and stimulated the viability within the enterprise. The company insists on cultivating and advocating the corporate culture with“people-oriented, performance first, excellent quality, and harmony” as the core values, combines the personal development goals ofemployees 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 differentareas of the industry chain, establishes a multi-level product supply network covering online and offline, and realizes thetransformation of product supply to "remoteness, intelligentization, and self-service". In terms of grain and oil trading services, thebulk 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 ofe-commerce, SZCH duoximi 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 "duoximi.com", and has openedchannels on e-commerce platforms such as Tmall and Jingdong Mall so as to promote the deep integration of online and offlinee-commerce platforms. In terms of group meal supply, its subsidiary SZCH Beige has established a one-stop distribution serviceplatform serving large end customers, providing high-quality and safe smart group meal food services for group users such asenterprises, schools, and government institutions. In terms of comprehensive tea drinking services, its subsidiary Shenbao Investmenthas 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 technologicalmeans, 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 grainindustry, and promoting the "Internet + Grain" industry development. The company’s informatization construction capability is at theleading 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 aframework for the construction of grain informatization work, innovated the grain management model, led the development directionof the grain industry, and became a benchmark for the national grain industry. The project was awarded the “National IoT MajorApplication Demonstration Project” by the National Development and Reform Commission and the Ministry of Finance. During thereporting period, as the country's first and only enterprise in the grain industry, it was selected as the "National Quality Benchmark in2020" and was shortlisted as one of the top ten application of grain digitization technology in China. The company has undertaken anumber of national-level research projects, the results of a number of informatization projects have won national, provincial andmunicipal 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 technologicaladvantages and equipment systems, has Jiangxi provincial enterprise technology center, Shenzhen municipal research anddevelopment 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. ShenbaoHuacheng has independently researched and developed more than 50 patented technologies for tea powder, tea concentrated juiceand plant extraction, published more than 30 scientific papers, and won a number of awards such as Science and TechnologyProgress Award of the Ministry of Agriculture, Zhejiang Science and Technology Award, Science and Technology Award of ChineseAcademy of Agricultural Sciences, Jiangxi Science and Technology Progress Award, Science and Technology Award of ChinaNational Light Industry Council, etc., presided over the preparation of the national standards "GBT 21733-2008 Tea Drinks" and twoindustry standards, i.e. "Tea Concentrated Juice for Food Industry - Light Industry Standard QB-T 4068- 2010" and "Instant TeaPowder 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 QualityInspection has the leading grain and oil quality inspection technology and equipment in the domestic grain industry, and is includedin the national grain quality supervision and inspection system. It was awarded the "Guangdong Shenzhen National Grain QualityMonitoring Station" by the State Administration of Grain and obtained the assessment certificate of agricultural product quality andsafety inspection agency (CATL) and the qualification certificate of inspection agency (CMA) and other testing capabilities totaled756 items. SZCG Quality Inspection takes the lead in listing pesticide residues, heavy metal pollutants, mycotoxins and otherhygiene indicators as well as food taste indicators in the daily inspection indicators. It has the ability to detect four types of indicatorsof generic quality, storage quality, sanitation and edible quality of grain, the detection capability can meet the relevant qualitydetection requirements of grain and oil products, and can accurately analyze the nutritional composition and hygienic indicators ofthe grain and determine its storage and edible quality. It has initiated the "digital laboratory" in the grain industry, and achieved 100%
coverage for product inspection and 100% pass rate for outgoing product quality through real-time monitoring of the entire processof sampling, testing, and distribution and by relying on the functions of the collaborative platform to save, retrieve, integrate, analyze,and share. Its subsidiary Shenbao Huacheng has established a quality control system recognized by large international food andbeverage companies, and has successfully passed the quality certification of global suppliers of Coca-Cola, Lipton, Kraft, Suntory,and Nestlé.
6. Brand effect
As the "first share of local large and medium-sized grain enterprises listed overall", the company was awarded the "Top 500 ServiceEnterprises in China", "China Top Ten Grain and Oil Groups", "China Top 100 Grain and Oil Enterprises", and "National LeadingEnterprise Supporting Grain and Oil Industrialization", "National Outstanding Scientific and Technological Innovative Enterprise ofGrain and Oil" 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 andplatforms such as "Shenzhen Flour", "SZCH Doxi", "SZCH Yushuiqing", "Beige Kitchen", "www.zglsjy.com.cn", "ShenbaoTeabank", "Wuyuan Jufangyong" and other well-known brands and platforms, and has gradually built an industrial system withcomplete elements of "rice" + "tea". The company's SZCH Doximi Changxiangdao Daohuaxiang Rice was selected as the first batchof "China Good Cereals and Oils" by the State Administration of Grain. The company keeps abreast with the international first-classstandards and builds high-quality urban food brands, its 29 products have obtained the "Zhen Pin" certification, and the company'scorporate recognition, market reputation, and social recognition have continued to increase.
Section IV. Discussion and Analysis of the OperationI. IntroductionIn 2020, in the face of the global spread of the COVID-19 epidemic and the severe and complex international situation, China'seconomy gradually realized a good recovery trend after suffering a relatively great and short-term impact. SZCH thoroughlyimplemented General Secretary Xi Jinping’s important speeches and important instructions on guarantee of food security, made everyeffort to do the "six stability" work, implemented the "six guarantees" tasks, and gave full play to the role of the "ballast stone" and"stabilizer" for economic and social development; made overall plans for epidemic prevention and control and resumed productionand work and operation and management work, made every effort to stabilize grain prices and ensure supply, deeply implemented thehigh-quality grain projects, focused on enhancing the ability of food emergency support, and actively built a modern grain industrysystem.
1. Main business development
During the reporting period, the company based on its own advantages and industrial development, used information technology,innovated and opened up the grain and oil products supply channels and trading methods, created a new pattern for tea and foodbusiness industry, built a multi-group and multi-channel food supply chain and service network, expanded the effective supply ofmedium- and high-end grain, oil, and food, and strived to meet people's needs of "quality, diversity, nutrition, health, green, andconvenience", and promoted the transformation of grain and oil products from "eat full" to "eat well". The company continues tofocus on grain circulation services, and completes grain and oil supply services with quality and quantity by actively building supplychains, continuously extending the industrial chains, innovating business models, and upgrading the industrial value chains, thedevelopment of the main grain and oil business continues to improve.
End of 2020, total assets of SZCH amounting to 7309 million yuan, total liabilities counted as 2514 million yuan and net assets have4795 million yuan in total; the asset-liability ratio was 34.40%, an increase of 2.64% from 31.76% at the beginning of the year;achieved an operating revenue of 11885 million yuan for the whole year, an increase of 825 million yuan from 11060 million yuanlast year with 7.46% up; total profit for the year was 458 million yuan, an increase of 29 million yuan over last year’s 429 millionyuan, a growth of 6.76%.
2. Progress of key projects
The warehouse of the Northeast Grain Source Base project has been built, and the drying tower has been put into trial operation; theentire project has been fully put into normal operation, facing the local farmers to open warehouses to collect grain.The Dongguan grain logistics node food deep processing project has been officially put into production. Berths No. 1 and No. 2 havecompleted a number of acceptance and commissioning work, and the project warehouses have been put into use in batches; whilefully advancing the construction of projects under construction, the provincial and municipal reserves services have been completedwith quality and quantity.Completed the upgrade of quality inspection facilities and equipment, and the upgrading and transformation of the main body of thecold storage, the main body construction of the Shuguang warehouse, and the construction of warehousing facilities and equipmenthave been promoted in an orderly manner.www.zglsjy.com.cn has been fully upgraded, and the annual total transaction volume and transaction value have steadily increased.Deepened the advancement of a number of new high-quality grain, oil and food projects, and combined with the expansion of thegrain, oil and food industry, and with the high-quality food security. Signed a cooperation framework agreement with Pingshan
District to build Pingshan Modern Smart Agricultural Industrial Park, and the "Tea Rice Fresh" community micro-complex has beenofficially opened. Shenzhen Shenliang Hongjun Catering Management Co., Ltd. was established and registered as a joint venturewith Guangdong Hongjun to launch smart group meals. Vigorously promoted the layout of regional comprehensive parks and urbandistribution center parks, and built Guanlan and Huizhou smart food supply chain industrial parks. The "Cha Mi Xiang Qi"micro-complex has established a production model, and 4 new stores have been opened during the year.
3. Sustainable innovation and development
During the reporting period, the company deepened the integration of new-generation information technologies such as the Internetof Things, cloud computing, big data, mobile Internet, and artificial intelligence with business operation and management byincreasing the application of informatization innovation results; focused on the requirements for the intelligent upgrading andtransformation of grain depots in the "Grain Security Project"of Guangdong Province, and took the intelligent upgrading of graindepots as an important starting point for upgrading grain storage facilities to further improve the intelligent level of grain depotmanagement. Focused on innovative research and development of information technology projects, based on business needs, plannedto implement more than ten key research and development projects such as EAS supply chain transformation and RFID systemupgrade and transformation, accelerated the formation of key core technology tackling systems, and promoted the in-depthintegration of information technology with the grain, oil and food supply chain. Up to now, the company has applied for and obtained92 patents and has 24 software copyrights.
4. Other key tasks
(1) Built a "smart rice warehouse" and built a "Guanlan Prepared Food Supply Center"; piloted in multiple places to providecustomers with customized warehouse and distribution integrated services, and actively promoted the implementation of thevalue-based charging model.
(2) Actively responded to the "Food Safety Strategic Project", kept abreast with international first-class standards, and createdhigh-quality urban food brands. At present, 29 products have obtained the "Zhen Pin" certification;
(3) Extended the industrial chain, researched and developed Yueqiu tea wine and "Black-faced Spoonbill" Bama spring drinkingwater; researched and developed new products such as special flour, tea fresh extract, new series of chrysanthemum tea, cuppedherbal jelly, etc.
(4) During the reporting period, the company continuously optimized the internal control environment, and ingeniously established anew business management and control system with "business operation and capital management, inventory management, and qualitymanagement" relatively separated and mutually checked and balanced, in which the grain and oil stocks are handed over to the SZCGReserve Branch for unified management, while the funds are delivered to the company’s fund settlement center to provide servicesand supervision in accordance with the internal bank model, the plans and assessments are delivered to the company’s planning andfinancial management department for unified management, and the quality inspections are handed over to Shenliang QualityInspection for unified management, while strengthening the company’s standardized requirements to process and legal affairs,systematically strengthening risk management and control so as to escort the enterprise to achieve sustainable and healthydevelopment.
(5) Attached importance to the construction of the talent team, built a "talent pyramid", established a categorized and hierarchicaltalent training model, and built a market-based selection and employment mechanism with "contract management as the core and jobmanagement as the basis"; checked the talent development work of the company in past ten years, and pointed out the direction forthe company's innovative talent management in the next step.
(6) While resuming work and production in an all-round way and reaching production and achieving results as soon as possible, thecompany supervised and urged the implementation of the main responsibility for safe production. Regularly organized safety learningand and convened safety situation analysis meetings by the month, conducted safety inspections, and carried out various educationdrills in epidemic prevention and safety production. Earnestly carry out special safety activities such as the implementation ofepidemic prevention and control, work safety month, special protection period for National Day, 119 fire safety publicity month, andthree-year special rectification of national work safety responsibility, and effectively ensured that the company completed the five "0"responsibility goals.
II. Main business analysis
1. Introduction
See the “I-Introduction” in “Discussion and Analysis of the Operation”
2. Revenue(Income) and cost
(1) Constitute of operating revenue
In RMB
| 2020 | 2019 | Increase/decrease y-o-y (+,-) | |||
| Amount | Ratio in operating revenue | Amount | Ratio in operating revenue | ||
| Total operating revenue | 11,884,527,506.34 | 100% | 11,059,984,335.92 | 100% | 7.46% |
| According to industries | |||||
| Manufacturing | 590,011,338.95 | 4.96% | 627,951,990.26 | 5.68% | -6.04% |
| Wholesale and retail | 10,366,006,873.93 | 87.23% | 9,581,032,153.83 | 86.63% | 8.19% |
| Leasing and business services | 928,509,293.46 | 7.81% | 851,000,191.83 | 7.69% | 9.11% |
| According to products | |||||
| Food, beverage and tea processing | 198,163,247.35 | 1.67% | 277,107,818.38 | 2.51% | -28.49% |
| Grain & oil trading and processing | 10,759,070,663.03 | 90.53% | 9,931,876,325.71 | 89.80% | 8.33% |
| Grain & oil storage logistics and services | 813,243,753.62 | 6.84% | 735,929,556.24 | 6.65% | 10.51% |
| Leasing and others | 114,049,842.34 | 0.96% | 115,070,635.59 | 1.04% | -0.89% |
| According to region | |||||
| Domestic market | 11,849,028,935.33 | 99.70% | 11,018,875,088.16 | 99.63% | 7.53% |
| Exportation | 35,498,571.01 | 0.30% | 41,109,247.76 | 0.37% | -13.65% |
(2) Industries, products or regions that account for more than 10% of the operating revenue or operatingprofit of the Company
√ Applicable □Not applicable
In RMB
| Operating revenue | Operating cost | Gross profit | Increase/decrease of operating | Increase/decrease of operating | Increase/decrease of gross |
| ratio | revenue y-o-y | cost y-o-y | profit ratio y-o-y | |||
| According to industries | ||||||
| Wholesale and retail | 10,366,006,873.93 | 9,892,157,934.22 | 4.57% | 8.19% | 8.32% | -0.12% |
| According to products | ||||||
| Grain & oil trading and processing | 10,759,070,663.03 | 10,290,555,898.97 | 4.35% | 8.33% | 8.24% | 0.08% |
| According to region | ||||||
| Domestic market | 11,849,028,935.33 | 10,698,913,713.66 | 9.71% | 7.53% | 7.86% | -0.27% |
Under circumstances of adjustment in reporting period for statistic scope of main business data, adjusted main business based onlatest one year’s scope of period-end
□ Applicable √Not applicable
(3) Revenue from physical sales larger than revenue from labors
√ Yes □ No
| Industries | Item | Unit | 2020 | 2019 | Increase/decrease y-o-y (+,-) |
| Wholesale and retail | Sales volume | Ton | 4,197,687.87 | 3,989,774.55 | 5.21% |
| Storage | Ton | 1,255,984.40 | 1,164,854.73 | 7.82% |
Reasons for y-o-y relevant data with over 30% changes
□ Applicable√Not applicable
(4) Performance of the significant sales contracts entered into by the Company up to the current reportingperiod
□ Applicable √Not applicable
(5) Constitute of operation cost
Classification of industries and products
In RMB
| Industries | Item | 2020 | 2019 | Increase/decrease y-o-y (+,-) | ||
| Amount | Ratio in operation cost | Amount | Ratio in operation cost | |||
| Wholesale and retail | Raw materials | 9,892,157,934.22 | 92.23% | 9,132,112,092.13 | 91.73% | 8.32% |
In RMB
| Products | Item | 2020 | 2019 | Increase/decrease y-o-y (+,-) | ||
| Amount | Ratio in operation cost | Amount | Ratio in operation cost | |||
| Grain & oil trading and processing | Raw materials | 10,254,279,332.43 | 95.95% | 9,483,295,218.23 | 95.26% | 8.13% |
| Grain & oil trading and processing | Labor wage | 6,188,358.99 | 0.06% | 2,962,957.54 | 0.03% | 108.86% |
| Grain & oil trading and processing | Cost of production | 30,088,207.55 | 0.28% | 21,043,827.50 | 0.21% | 42.98% |
ExplanationN/A
(6) Whether the changes in the scope of consolidation in Reporting Period
√Yes □No
During the reporting period, the Company newly established the Shenzhen Shenliang Hongjun Catering Management Co., Ltd., andcanceled Shenzhen Shenbao Tea Co., Ltd and Dongguan Jinying Biotechnology Co., Ltd.
(7) Material changes or adjustment for products or services of the Company in reporting period
□ Applicable √Not applicable
(8) Major sales and main suppliers
Major sales of the Company
| Total top five clients in sales (RMB) | 4,239,947,026.87 |
| Proportion in total annual sales volume for top five clients | 35.68% |
| Proportion in total annual sales volume for related sales among top five clients | 0.00% |
Top five clients of the Company
| Serial | Name | Sales (RMB) | Proportion in total annual sales |
| 1 | Client I | 1,809,782,782.42 | 15.23% |
| 2 | Client II | 752,250,263.90 | 6.33% |
| 3 | Client III | 662,273,752.69 | 5.57% |
| 4 | Client IV | 616,554,678.45 | 5.19% |
| 5 | Client V | 399,085,549.41 | 3.36% |
| Total | -- | 4,239,947,026.87 | 35.68% |
Other explanation on main clients
□ Applicable√Not applicable
Main suppliers of the Company
| Total purchase amount from top five suppliers (RMB) | 4,270,402,050.43 |
| Proportion in total annual purchase amount for top five suppliers | 38.75% |
| Proportion in total annual purchase amount from related purchase among top five suppliers | 0.00% |
Top five suppliers of the Company
| Serial | Name | Sum of purchase (RMB) | Proportion in total annual sum of purchase |
| 1 | Supplier I | 1,197,618,225.24 | 10.87% |
| 2 | Supplier II | 910,149,864.32 | 8.26% |
| 3 | Supplier III | 896,867,163.93 | 8.14% |
| 4 | Supplier IV | 822,328,157.87 | 7.46% |
| 5 | Supplier V | 443,438,639.07 | 4.02% |
| Total | -- | 4,270,402,050.43 | 38.75% |
Other explanation on main suppliers
□ Applicable √Not applicable
3. Expenses
In RMB
| 2020 | 2019 | Increase/decrease y-o-y (+,-) | Note of major changes | |
| Sales expenses | 201,304,842.30 | 250,657,691.24 | -19.69% | According to the new revenue standards, the transportation costs are included in the operating costs in the year. |
| Administration expenses | 285,083,453.91 | 260,693,015.60 | 9.36% | |
| Financial expenses | 14,907,763.94 | -636,614.92 | -2,441.72% | Part of the Shenliang Dongguan Logistics project completed and the borrowing costing expenses increased |
| R&D expenses | 16,617,944.25 | 13,599,526.83 | 22.20% |
4.R &D investment
√Applicable □Not applicable
During the reporting period, the company developed and implemented a total of 21 R&D projects such as information systems,which involved unified identity security authentication management platform, business intelligence (BI) system upgrade, RFIDsystem upgrade and transformation, reserve grain purchase and sales plan management system, discipline inspection and supervisioninformation reporting platform, EAS system supply chain transformation, official website PC terminal upgrade and official websitemobile terminal development, S-HR information system (Phase III), Doximi integrated management platform, purchase and salesinformatization (Phase I), flour informatization (Phase IV), cold chain supply chain management information system (Phase II andPhase III), land financial system docking, innovative construction of Hualian informatization, content intelligent management ofgrain trading networks (Phase I), upgrading and transformation of Huacheng informatization, Tri-well informatization (Phase I),research and application of key technologies for new-style tea drinking and high-quality tea soup, and research and development ofsupporting products for formula rice water, etc. Among them, the unified identity security authentication management platform ofSZCH has effectively solved the problem of information islands between upstream HR and downstream business systems, realizedthe full life cycle management and single sign-on of all employee accounts of SZCH, and strengthened data governance on the basisof meeting the national network security level protection 2.0 standards, which has greatly improved the company's security auditefficiency and operation and maintenance capabilities.
R&D investment of the Company
| 2020 | 2019 | Change ratio(+,-) | |
| Number of R&D (people) | 93 | 88 | 5.68% |
| Ratio of number of R&D | 7.46% | 7.45% | 0.01% |
| R&D investment (RMB) | 46,739,359.46 | 38,855,259.05 | 20.29% |
| investment accounted for operation income | 0.39% | 0.35% | 0.04% |
| R&D investment capitalization (RMB) | 0.00 | 0.00 | 0.00% |
| Capitalization R&D investment accounted for R&D investment | 0.00% | 0.00% | 0.00% |
The reason of great changes in the proportion of total R&D investment accounted for operation income than last year
□ Applicable √Not applicable
Reason for the great change in R&D investment capitalization rate and rational description
□ Applicable √Not applicable
5. Cash flow
In RMB
| Item | 2020 | 2019 | Increase/decrease y-o-y (+,-) |
| Subtotal of cash in-flow from operation activity | 11,669,207,152.35 | 11,472,769,827.75 | 1.71% |
| Subtotal of cash out-flow from operation activity | 11,382,678,930.08 | 11,282,716,003.78 | 0.89% |
| Net cash flow arising from operating activities | 286,528,222.27 | 190,053,823.97 | 50.76% |
| Subtotal of cash in-flow from investment activity | 887,924,327.47 | 526,554,118.48 | 68.63% |
| Subtotal of cash out-flow from investment activity | 985,312,767.83 | 1,318,138,870.97 | -25.25% |
| Net cash flow from investment activity | -97,388,440.36 | -791,584,752.49 | 87.70% |
| Subtotal of cash in-flow from financing activity | 1,252,948,640.66 | 437,425,075.72 | 186.44% |
| Subtotal of cash out-flow from financing activity | 1,406,472,553.17 | 312,922,187.97 | 349.46% |
| Net cash flow arising from financing activity | -153,523,912.51 | 124,502,887.75 | -223.31% |
| Net increased amount of cash and cash equivalent | 35,539,468.09 | -476,683,581.83 | 107.46% |
Reasons for y-o-y relevant data with major changes
√ Applicable ? Not applicable
The reason for the year-on-year increase in net cash flow from operating activities: Mainly because the company responded to thenational food security policy and increased its grain and oil reserves;The reason for the year-on-year increase in net cash flow from investment activities: Mainly due to the completion of the company'sShenzhen Foodstuffs Dongguan Grain Logistics Node Project, which reduced cash flow expenditures for investment activities;The reason for the year-on-year decrease in net cash flow from financing activities was mainly due to the increase in cash dividendsdistributed by the company to all shareholders in 2020, and the amount of borrowing decreased compared with last year.? Applicable √Not applicable
III. Analysis of the non-main business
√Applicable □Not applicable
In RMB
| Amount | Ratio in total profit | Description of formation | Whether be sustainable | |
| Investment income | 17,401,645.38 | 3.80% | Mainly Income from financial products | Unsustainable |
| Gains/losses of fair value variation | -544,403.21 | -0.12% | Unsustainable | |
| Asset impairment | -210,190,362.81 | -45.91% | Provision for the decline in value of inventories | Unsustainable |
| Non-operating | 3,925,937.84 | 0.86% | Unsustainable |
| income | ||||
| Non-operating expense | 1,554,552.82 | 0.34% | Unsustainable |
IV. Analysis of assets and liability
1. Major changes of assets composition
Implement the new revenue standards or new leasing standards for the first time since 2020 and adjust the relevant items of thefinancial statement at the beginning of the implementation yearApplicable
In RMB
| Year-end of 2020 | Year-begin of 2020 | Ratio changes | Notes of major changes | |||
| Amount | Ratio in total assets | Amount | Ratio in total assets | |||
| Monetary fund | 190,494,225.94 | 2.61% | 154,954,757.85 | 2.29% | 0.32% | |
| Account receivable | 198,311,102.17 | 2.71% | 338,687,766.68 | 5.00% | -2.29% | The main reason is that strengthen the controls on management of account receivable to reducing the operating risks |
| Inventory | 3,418,328,974.27 | 46.77% | 3,064,701,212.14 | 45.23% | 1.54% | The main reason is that company increase the grain stocks based on the market judgment |
| Investment real estate | 253,037,899.57 | 3.46% | 269,704,937.17 | 3.98% | -0.52% | |
| Long-term equity investment | 73,215,147.84 | 1.00% | 73,361,312.10 | 1.08% | -0.08% | |
| Fix assets | 1,122,692,490.55 | 15.36% | 945,042,032.69 | 13.95% | 1.41% | |
| Construction in progress | 1,045,643,295.57 | 14.31% | 771,971,469.43 | 11.39% | 2.92% | Project of the Shenliang Dongguan Grain Logistic Nodes was recognized as “construction in progress” according to its progress, and part of the projects was completed and transferred to fixed assets |
| Short-term loans | 110,318,727.12 | 1.51% | 23,595,000.00 | 0.35% | 1.16% | |
| Long-term loans | 841,864,531.75 | 11.52% | 835,912,556.41 | 12.34% | -0.82% |
2. Assets and liability measured by fair value
√ Applicable □Not applicable
In RMB
| Item | Amount at the beginning period | Changes of fair value gains/losses in this period | Accumulative changes of fair value reckoned into equity | Devaluation of withdrawing in the period | Amount of purchase in the period | Amount of sale in the period | Other changes | Amount in the end of period |
| Financial assets | ||||||||
| 1.Tradable financial assets (excluding derivative financial assets) | 1,166,209.72 | -544,403.21 | 0.00 | 0.00 | 160,000,000.00 | 0.00 | 0.00 | 160,621,806.51 |
| Other non-current financial assets | 57,500.00 | 57,500.00 | ||||||
| Aforementioned total | 1,223,709.72 | -544,403.21 | 0.00 | 0.00 | 160,000,000.00 | 0.00 | 0.00 | 160,679,306.51 |
| Financial liabilities | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
Other changeN/AWhether there have major changes on measurement attributes for main assets of the Company in report period or not
□ Yes √No
3. The assets rights restricted till end of the period
| Item | Book value at period-end | Reasons for restriction |
| Construction in progress | 163,868,977.53 | According to the long-term loan mortgage contract signed by Dongguan Logistics Company, a subsidiary of the Company, with Shenzhen Branch of Agricultural Development Bank and Huizhou Zhongkai Sub-branch of HSBC, Dongguan Logistics 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) 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.
Fix assets
| Fix assets | 509,480,512.18 | According to the long-term loan mortgage contract signed by Dongguan Logistics Company, a subsidiary of the Company, with Shenzhen Branch of Agricultural Development Bank and Huizhou Zhongkai Sub-branch of HSBC, Dongguan Logistics 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) 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. |
| Intangible assets | 69,569,979.70 | According to the loan contract Yue DG2017 NGDZ No. 006 signed by Dongguan Food Industrial Park, a subsidiary of the Company, with Bank of Communications Co., Ltd., Dongguan Branch, Dongguan Food Industrial Park has mortgaged its two pieces of land "DFGY (2009) DT No. 190" and "DFGY (2012) DT No. 152" to the Bank of Communications Co., Ltd., Dongguan Branch as loan collateral. |
| Intangible assets | 35,793,740.99 | According to the long-term loan mortgage contract signed by Dongguan Logistics Company, a subsidiary of the Company, with Dongguan Branch of CMB, Dongguan Logistics Company has mortgaged 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 | 778,713,210.40 |
V. Investment
1. Overall situation
√ Applicable □ Not applicable
| Investment in reporting period (RMB) | Investment in the same period of last year (RMB) | Changes (+,-) |
| 548,035,686.02 | 624,359,305.05 | -12.22% |
2.The major equity investment obtained in the reporting period
□Applicable √Not applicable
3.The major non-equity investment carrying in the reporting period
√ Applicable □Not applicable
In RMB
| Item | Investment ways | Whether it is the fixed | Industry with the | Amount input in the period | Accumulated actual input as | Capital sources | Progress | Estimated revenue | Income accumulated at end of the | Reasons for failure to | Disclosure date (if | Disclosure index (if |
| assets investment (Y/N) | investment involved | of the end of reporting period | reporting period | achieve planned progress and expected benefits | applicable) | applicable) | ||||||
| Dongguan Shenliang Logistics Co., Ltd.- Grain storage and wharf complementary engineering | Self-build | Y | Storage and wharf | 37,803,562.09 | 405,935,213.29 | Owned Funds and Bank Loans | 101.48% | The wharf project started production later than expected | ||||
| Dongguan Shenliang Logistics Co., Ltd.- Grain storage and wharf complementary engineering(Phase II) | Self-build | Y | Storage and wharf | 179,679,302.57 | Owned Funds and Bank Loans | 100.00% | 46,800,000.00 | 44,631,296.64 | - | |||
| Dongguan Shenliang Logistic | Self-build | Y | Warehouse logistic | 44,162,523.37 | 91,312,758.28 | Owned Funds and Bank Loans | 18.56% | Adjustment of construction scheme |
| s Co., Ltd.-Food logistics and wharf matching project | ||||||||||||
| Dongguan International Food Industrial Park Development Co., Ltd.Warehouse logistic配送中心 | Self-build | Y | Warehouse logistic | 320,132,170.91 | 949,846,018.52 | Owned Funds and Bank Loans | 98.02% | Adjustment of construction scheme | ||||
| Dongguan Shenliang Oil & Food Trade Co., Ltd.- Deep food processing project | Self-build | Y | Flour processing | 632,929.65 | 120,698,458.02 | Owned Funds and Bank Loans | 41.34% | 3,900,000.00 | -12,187,063.68 | - | ||
| Land use right | Self-build | N | Construction | 1,021,900.00 | 245,018,960.82 | Owned Funds | - | |||||
| Total | -- | -- | -- | 403,753,086.02 | 1,992,490,711.50 | -- | -- | 50,700,000.00 | 32,444,232.96 | -- | -- | -- |
4. Financial assets investment
(1) Securities investment
√ Applicable□Not applicable
In RMB
| Variety of securities | Code of securities | Short form of securities | Initial investment cost | Accounting measurement model | Book value at the beginning of the period | Changes in fair value of the current profit and loss | Cumulative fair value changes in equity | Current purchase amount | Current sales amount | Profit and loss in the Reporting Period | Book value at the end of the period | Accounting subject | Capital Source |
| Domestic and overseas stock | 000017 | Shen Zhonghua-A | 0.00 | Fair value measurements | 1,166,209.72 | -544,403.21 | 0.00 | 0.00 | 0.00 | -544,403.21 | 621,806.51 | Tradable financial assets | Debt rescheduled shares |
| Total | 0.00 | -- | 1,166,209.72 | -544,403.21 | 0.00 | 0.00 | 0.00 | -544,403.21 | 621,806.51 | -- | -- | ||
| Disclosure date of securities investment approval of the Board | Not applicable | ||||||||||||
| Disclosure date of securities investment approval of the Shareholder Meeting (if applicable) | Not applicable | ||||||||||||
(2) Derivative investment
□ Applicable√Not applicable
The Company has no derivatives investment in the Period
5. Application of raised proceeds
□ Applicable√Not applicable
The Company has no application of raised proceeds in the PeriodVI. Sales of major assets and equity
1. Sales of major assets
□ Applicable √Not applicable
The Company had no sales of major assets in the reporting period.
2. Sales of major equity
□ Applicable √Not applicable
VII. Analysis of main holding Company and stock-jointly companies
√ Applicable□Not applicable
Particular about main subsidiaries and stock-jointly companies net profit over 10%
In RMB
| Company name | Type | Main business | Register capital | Total assets | Net assets | Operating revenue | Operating profit | Net profit |
| Shenzhen Cereals Group Co., Ltd | Subsidiary | Grain & oil trading processing,Grain and oil reserve service | 1,530,000,000.00 | 6,652,879,986.74 | 3,790,499,535.72 | 11,682,686,253.32 | 531,118,983.29 | 479,029,357.76 |
| Shenzhen Hualian Grain & Oil Trade Co., ltd. | Subsidiary | Grain & oil trading | 100,000,000.00 | 1,440,018,783.55 | 329,769,622.60 | 4,462,399,294.88 | 106,687,022.09 | 106,003,998.20 |
| Shenzhen Flour Co., Ltd | Subsidiary | Grain & oil trading processing | 30,000,000.00 | 912,307,668.83 | 126,846,475.36 | 3,582,842,505.16 | 62,835,110.30 | 63,407,702.63 |
Particular about subsidiaries obtained or disposed in report period
√ Applicable □Not applicable
| Company name | The way of getting and treating subsidiary in the reporting | Influence on overall product and performance |
| Shenzhen Shenbao Tea Co., Ltd | Cancellation | Impact on net profit of the Company for the current period was -928,300 yuan. |
| Dongguan Jinying Biotechnology Co., Ltd. | Cancellation | Impact on net profit of the Company for the current period was 0 yuan. |
| Shenzhen Shenliang Hongjun Catering Management Co., Ltd | Newly established | Impact on net profit of the Company for the current period was 0 yuan. |
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 ofmilitary 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 andmanagement of free property; providing management services for hotels; investing and setting up industries (specific projects areseparately declared); domestic trade; engaging in import and export business; E-commerce and information construction; and graincirculation service. Licensed business items: the following projects shall be operated only with the relevant examination and approvaldocuments if they are involved in obtaining approval: information services (internet information service only); general freight,professional transport (refrigerated preservation). Register capital was 1,530,000,000.00 Yuan. Ended as this period, total assetsamounted as 6,652,879,986.74 Yuan, and net assets amounting to 3,790,499,535.72 Yuan, shareholders’ equity attributable to parentCompany is 3,603,017,283.94 Yuan; in the reporting period, achieved operation revenue, net profit and net profit attributable toshareholder of parent Company as 11,682,686,253.32 Yuan, 479,029,357.76 Yuan and 480,012,086.91 Yuan respectively.
Shenzhen Hualian Grain & Oil Trade 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 exportbusiness (except for projects prohibited by laws, administrative regulations, and decision of the State Council, restricted projects canbe operated only after obtaining permission); online feed sales; information consultation, self-owned housing leasing (excludingtalent agency services and other restricted items); international freight forwarding, domestic freight forwarding (can only be operatedafter being approved by the transport department if laws, administrative regulations, State Council decision require the approval oftransport department); Licensed business items: following items shall be operated only with the relevant examination and approvaldocuments if they are involved in obtaining approval: purchase and sale of grain and oil, online sales of grain and oil; informationservice business (internet information service business only). Register capital was 100,000,000.00 Yuan. Ended as this period, totalassets amounted as 1,440,018,783.55 Yuan, and net assets amounting to 329,769,622.60 Yuan, shareholders’ equity attributable toparent Company is 305,561,560.67 Yuan;in the reporting period, achieved operation revenue, net profit and net profit attributable toparent Company as 4,462,399,294.88 Yuan, 106,003,998.20 Yuan and 105,246,209.40 Yuan respectively.
Shenzhen Flour Co., Ltd.: business scope: general business items: hardware and electrical equipment, chemical products (excludinghazardous chemicals and restricted items), auto parts, purchase and sales of construction materials; self-operated import and exportbusiness (carry out according to the provisions of the registration certificate SMGDZZ No. 76); domestic trade (excluding franchise,exclusive control, monopoly commodities); wheat wholesale and retail. Licensed business items: following items shall be operatedonly with the relevant examination and approval documents if they are involved in obtaining approval: flour processing andproduction. Register capital was 30,000,000.00 Yuan. Ended as this period, total assets amounted as 912,307,668.83 Yuan, and netassets amounting to 126,846,475.36 Yuan, shareholders’ equity attributable to parent Company is 126,846,475.36 Yuan; in the
reporting period, achieved operation revenue, net profit and net profit attributable to parent Company as 3,582,842,505.16 Yuan,63,407,702.63 Yuan and 63,407,702.63 Yuan respectively.
VIII. Structured vehicle controlled by the Company
□ Applicable√Not applicable
IX. Prospects on future development
(i) Development trend and competition layout of the industry
1. The development trend of industry
From an international perspective, in 2020, affected by the concentrated outbreak of the COVID-19 epidemic, as well as thereduction in grain production in some countries due to weather and insect pests, international grain prices emerged from thecontinuous weak operation pattern of the previous years and have shown a situation of fluctuations and rises. According to data fromthe Food and Agriculture Organization of the United Nations, as of December 2020, the world food prices have been rising for theseventh consecutive month, in 2020, the world food price index averaged 97.9 points, hit a three-year high. For the whole year of2020, the grain price index of the Food and Agriculture Organization of the United Nations averaged 102.7 points, an increase of 6.4points compared to 2019, and hit a new high in the annual average index since 2014. Tight supply and strong demand pushed up thewheat and corn prices, which rose by 5.6% and 7.6% respectively compared to 2019. Global rice import demand was weak in 2020,but export prices still increased by 8.6% over the sluggish 2019, and hit a six-year high.
Judging from the operation of the domestic market, due to the impact of the COVID-19 epidemic and disasters, the prices of somevarieties have resumed rising trends in stages. From the perspective of varieties, the price of rice generally showed a trend of "strongindica and weak japonica". With the harvest of autumn grains, the supply of grains was sufficient, the prices of indica and indica ricein the south were stable and strong, while the prices of japonica and japonica rice in the north were relatively weak; the price ofwheat has stabilized after a slight increase this year, after the summer harvest, the wheat prices have risen due to the increase in cornprices, however, at the end of the year, with the arrival of the auction policy grain sources, the market supply was abundant, and theprice of ordinary wheat has remained stable, while the price of high-quality wheat has risen. The price of corn has risen stronglyfrom the beginning of the year, at the end of May, the national temporary storage corn auction sales had high transactions and highpremiums, in September, price of corn dropped slightly after the arrival of the new grains and then rose again. The overall increase infood prices was mainly due to, firstly, the linkage of prices in the international market; secondly, the continuous recovery of live pigproduction capacity, resulting in increase in corn feed processing demand at the downstream; thirdly, the gap in the production anddemand of some varieties, and the market’s bullish expectations have increased, and grain hoarding appeared in the trade and storagelinks.
2. The competitive landscape of the industry
At present, the domestic grain and oil trade, processing, and logistics industries are full-circulation sectors, with high degree ofmarketization, numerous participating companies and fierce competition. Central enterprises and large local grain enterprises haverelatively complete warehousing and logistics facilities, and enjoy a number of national policies; in recent years, a large number ofoutstanding national and regional private grain enterprises have come to the fore; with the development of China’s grainmarketization, foreign grain enterprises have emerged in our country's grain market, and further intensified the competition in thegrain and oil industry by relying on abundant resources, strong financial strength and mature management experience. The grainindustry in Shenzhen is developing vigorously, there are many grain and oil processing enterprises with a certain scale and many
small and medium-sized enterprises in the area, with the advancement of the "dual-zone construction", the population of cities in thePearl River Delta has increased, and people's living standards have improved, the competition in the food market is orderly andunprecedentedly fierce.
(ii) The company’s development strategySZCH will focus on the grain and tea business, in the process of integration and development, conform to the country’s newdevelopment requirements for the grain industry, i.e. “agriculture head and industry tail”, “grain head and food tail”, “three chainsintegration”, etc., seize the major historical opportunities of current significant historical opportunities such as the construction of theGuangdong - Hong Kong - Macao Greater Bay Area and the construction of the Shenzhen Pilot Demonstration Area, focus on thesuccession of the company’s “13
th
Five-Year Plan” and “14
thFive-Year Plan”, and innovate the development strategy of “one chain,two parks and N platforms”, and focus on creating the “smart grain, oil and food supply chain quality service providers” with the“high-quality grain source base + regional comprehensive park + urban distribution center”.
(iii) Operation plan for year of 2021Looking forward to 2021, SZCH will continue to move forward firmly along the road of food security with Chinese characteristics,implement high-quality food projects in depth, achieve "three-chain coordination" and "five-excellence linkage", empower thedevelopment of the entire industry chain, and accelerate the construction of a higher-level, higher-quality, more efficient, and moresustainable food security system, firm the strategic goal of “building a smart grain, oil and food supply chain service provider”, andaccelerate the implementation of the “one chain, two parks and N platforms” strategy. Supported by "science and technology helpflourishing grain" and "talents help flourishing grain" and based on the characteristics of pure sales area and port city of Shenzhen,SZCH will combine with the "One Belt One Road" to focus on expanding international grain sources, and take advantage of the portlocation to build "the eastern and southern grain coastal passages". At the same time, there are seven work plans as follows:
1.Strengthen the leadership of party building. Continue to strengthen political leadership, do a solid job of "six stability" and fullyimplement the "six guarantees" task; integrate new ideas, new concepts and new requirements into the central work, create a "redengine" for party building in the construction of corporate culture; strengthen supervision and inspection, safeguard the rights andinterests of shareholders; give full play to the role of "supervision" to ensure the transformation and application of supervisionresults.
2. Continue to provide services for grain and oil reserves. Actively embrace the market, use mechanism, technology, and modelinnovation to allocate resources around "extending the industrial chain and building supply chains", and make various preparationsfor improving the quality of reserve services.
3. Improve the grain, oil and food supply chain. Adhere to "grain head and food tail" and "agricultural head and work tail", steadilyimplement the strategic paths of "one chain, two parks and N platforms", center on the grain, oil and food smart logistics park withcomplete functions and advanced management, combine with the bulk commodity trading platform, and integrate upstream anddownstream circulation channels to provide customers with comprehensive services of modern smart supply chain circulationintegrating a series of value-added services such as logistics distribution, e-commerce, and information warehousing.
4. Continue to optimize the human resource structure. Continue to steadily advance the strategy of “strengthening the enterprise withtalents”, and create high-quality talents by implementing more active, open and effective talent gathering policies, building flexibleand efficient talent training support mechanisms, and establishing scientific and practical talent classification evaluation mechanismsand innovative incentive mechanisms, so as to establish the talent mechanisms which can meet short-term and emergency talent
recruitment and conform to long-term development”.
5. Technological innovation and upgrading of smart grain depot. Take "data integration, three-dimensional analysis, convenientapplication" as the main line, and build a multi-dimensional data analysis platform; grasp the opportunities of artificial intelligencedevelopment, plan and build a smart logistics park integrating 5G intelligent robots, 5G VR/AR, unmanned aerial vehicles,unmanned vehicles, unmanned warehouses, and other terminal scenarios; establish a comprehensively informationized grain depot,build an interconnection system for everything in the park, and create a first-class 5G smart grain depot and industrial applications inthe country.
6. Comprehensively improve internal management. Carry out benchmarking world-class management improvement actions, andcontinue to strengthen the construction of institutional system, organizational system, responsibility system, execution system, andevaluation system of SZCH through measures such as improving work system, improving operating mechanism, optimizingmanagement process, strengthening capital control, and strict supervision and inspection, and comprehensively improve managementcapabilities and levels.
7. Strictly pay attention to safety production. Conscientiously implement the decisions and deployments of the Party CentralCommittee and the State Council, firmly establish the concept of safety development, and focus on the main characteristics andoutstanding problems of safety production accidents, implement responsibilities layer upon layer, deeply investigate hidden dangersin various fields and links, and vigorously implement rectification and reforms, strengthen risks prevention and control, andfundamentally eliminate potential safety hazards.
(iv) Possible risks
1. The risk of the impact of the COVID-19 epidemic
Since the beginning of 2020, the global spread of the COVID-19 epidemic has affected macroeconomic operations to varyingdegrees. Judging from the current situation, although the domestic epidemic has occurred sporadically, the overall situation has beenbrought under control. The overseas epidemic still has the risk of instability, making the economy unpredictable and uncertain, whichmay affect the company's production, trade, and industrial supply chain. The epidemic has caused increases in various costs such asraw material costs, labor costs, and logistics costs. In response to this risk, the company will unswervingly do a good job of epidemicprevention and strictly implement various epidemic prevention measures to ensure the orderly production and operation of thecompany.
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 lawsand regulations related to national food safety, and assume the social responsibility of supplying high-quality and safe food to themarket. The second is to strengthen the quality of raw materials and strengthen quality control from the source. The third is tostrengthen production management, standardize production operations, and implement quality responsibilities. The fourth is tostrengthen staff's operating skills and safety awareness training to prevent product quality accidents caused by non-standardoperations 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 preventsecondary 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, thespeculative nature and hedging preferences of capital will cause social funds to flow into the bulk commodity sector, which will leadto violent fluctuations in domestic and foreign bulk commodity prices. On the other hand, with the outbreak of the COVID-19epidemic, most countries' controls on the export of agricultural products will have a major impact on prices; at the same time, theepidemic will also affect the normal operation of the supply chain in various regions and have a direct impact on the supply of bulkagricultural and sideline products.
The company will actively respond to the risk of adverse effects of price fluctuations on the company's operations through measuressuch as strengthening market forecasts, establishing strategic cooperation, optimizing supply management, and using refinedmanagement 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 multinationalgrain, oil and food enterprises, the company still has a certain gap in scale and brand awareness. In the future, the competition in thegrain, oil and food industry will become more intense, if the company cannot effectively promote its own brand and broaden itsmarketing 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 companycontinues to strengthen communication with upstream and downstream customers in the industry chain, vigorously expands saleschannels, 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 canform synergy with the original business and whether the integration of corporate culture and management methods is in place duringthe 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 companyand the integrating degree with the company's development strategy, and correct deviations in a timely manner; the second is to payattention to the synergy between the merged company and the company's existing industry, and coordinate the deployment ofresources in a timely manner; the third is to gradually realize the integration of systems and cultures; the fourth is to increaseperformance improvement and innovation incentives and assessments for mergers and acquisitions, and continuously adjust incentivepolicies that are compatible with operations.
X. Research reception, communication and interview activities
1. Registration form of research reception, communication and interview in the Period
□ Applicable √Not applicable
There were no research reception, communication and interview activities occurred in the period
Section V. Important EventsI. Profit distribution plan of common stock and capitalizing of common reserves plan
Formulation, Implementation and Adjustment of common stock Profit Distribution Policy Especially Cash Dividend policy duringthe Reporting Period
√ Applicable □Not applicable
The profit distribution policy of the Company is specified in the Article of Association as:
(i) Profit distribution of the Company should pay attention to the reasonable investment return to the investors, and the profitdistribution policy should maintain continuity and stability;
(ii) The Company may distribute dividends in the form of cash or a combination of cash and stocks, and may pay interim cashdividends;
(iii) The following conditions shall be met at the same time when the Company intends to implement cash dividends:
1. Earnings per share for the year is not less than 0.1 yuan;
2. The audit institution shall issue a standard unqualified audit report on the company's annual financial report;
3. The company has no major investment plans or major cash expenditures (except for fund-raising projects). Major investment plansor major cash expenditures refer to the cumulative expenditures that the company intends to invest, acquire assets, or purchaseequipment in the next twelve months reach or exceed 30% of the company's most recent audited total assets, and exceed 50 millionyuan;
(iv) In principle, the company's annual profits distributed in cash should not be less than 10% of the attributable profits realized in theyear; and the company’s cumulative profits distributed in cash in the last 3 years should not be less than 30% of the annual averageattributable profits realized in the last 3 years. Under the premise of ensuring the distribution of cash profits, the company canadditionally adopt the method of stock dividend distribution for profit distribution; the company's annual profit distribution amountshall not exceed the company's accumulated undistributed profits at the end of the year, and shall not damage the company's ability tocontinue operations;
(v) The specific profit distribution plan shall be drawn up by the board of directors and submitted to the general meeting ofshareholders for deliberation. The company provides a variety of ways to accept the recommendations and supervision of allshareholders, independent directors and supervisors on the company's dividends. If the annual report period is profitable but theboard of directors does not propose a cash dividend plan in accordance with the "Articles of Association", it shall be disclosed in theperiodic report the reasons for not proposing a cash dividend plan in accordance with the "Articles of Association", and the purposeof funds not used for dividends but retained by the company, the independent directors shall express independent opinions on thispurpose, in addition to on-site meetings, the company shall also provide shareholders with an online voting platform when conveninga general meeting of shareholders;
(vi) If the company has not distributed cash profits in the last 3 years, it can not issue new shares to the public, issue convertiblecorporate bonds or allot shares to original shareholders;
(vii) Where a shareholder illegally occupies the company’s funds, the company shall deduct the cash dividends distributed to the
shareholder in order to repay the capital occupied;
(viii) When the company adjusts its profit distribution policy, it should take the protection of shareholders, especially small andmedium shareholders' rights and interests, as the starting point for detailed argumentation, and the board of directors should submit itto the general meeting of shareholders for review and approval by a special resolution, while independent directors should expressclear independent opinions;
(ix) The company provides multiple channels (telephone, fax, e-mail, interactive platform, etc.) to accept all shareholders'suggestions and supervision on the company's dividends.
The foreign exchange conversion rate of domestically-listed foreign share dividends is calculated based on the central parity rate ofHong Kong dollar against RMB announced by the People's Bank of China on the first working day after the resolution date of thegeneral meeting of shareholders.
During the reporting period, the company’s profit distribution complied with the company’s articles of association and reviewprocedures, and fully protected the legitimate rights and interests of small and medium investors, independent directors expressedtheir opinions, the profit distribution procedures were compliant and transparent. During the reporting period, the company's profitdistribution policy has not been adjusted or changed.
| Special explanation on cash dividend policy | |
| Satisfy regulations of General Meeting or requirement of Article of Association (Y/N): | Y |
| Well-defined and clearly dividend standards and proportion (Y/N): | Y |
| Completed relevant decision-making process and mechanism (Y/N): | Y |
| Independent directors perform duties completely and play a proper role (Y/N): | Y |
| Minority shareholders have opportunity to express opinions and demands totally and their legal rights are fully protected (Y/N): | Y |
| Condition and procedures are compliance and transparent while the cash bonus policy adjusted or changed (Y/N): | Not applicable |
Profit distribution plan (pre-plan) of common stock and capitalizing of common reserves plan (pre-plan) in latest three years(including the reporting period)The equity distribution plan for 2018: Based on share capital of 1,152,535,254 on 31 Dec 2018, distributed cash dividend of 1 Yuan(tax included) for every 10 shares to all shareholders with zero share bonus (tax included), and no share converted from capitalreserve.The equity distribution plan for 2019: Based on share capital of 1,152,535,254 on 31 Dec 2019, distributed cash dividend of 2 Yuan(tax included) for every 10 shares to all shareholders with zero share bonus (tax included), and no share converted from capitalreserve.The equity distribution plan for 2020: Based on share capital of 1,152,535,254 on 31 Dec 2020, distributed cash dividend of 2 Yuan(tax included) for every 10 shares to all shareholders with zero share bonus (tax included), and no share converted from capitalreserve.
Particulars for cash dividend of common share for 3 years (current period included)
In RMB
| Year for bonus shares | Amount for cash bonus (tax included) | Net profit attributable to common stock shareholders of listed company in consolidation statement for bonus year | Ratio of the cash bonus in net profit attributable to common stock shareholders of listed company contained in consolidation statement | Proportion for cash bonus by other ways(i.e. share buy-backs) | Ratio of the cash bonus by other ways in net profit attributable to common stock shareholders of listed company contained in consolidation statement | Total cash bonus (including other ways) | Ratio of the total cash bonus (other ways included) in net profit attributable to common stock shareholders of listed company contained in consolidation statement |
| 2020 | 230,507,050.80 | 405,088,385.54 | 56.90% | 0.00 | 0.00% | 230,507,050.80 | 56.90% |
| 2019 | 230,507,050.80 | 363,501,809.52 | 63.41% | 0.00 | 0.00% | 230,507,050.80 | 63.41% |
| 2018 | 115,253,525.40 | 308,331,032.44 | 37.38% | 0.00 | 0.00% | 115,253,525.40 | 37.38% |
The Company gains profits in reporting period and the retained profit of common stock shareholders provided by parent Company ispositive but no plan of cash dividend proposed of common stock
□ Applicable √Not applicable
II. Profit distribution plan and capitalizing of common reserves plan for the Period
√ Applicable □Not applicable
| Bonus shares for every 10-share (Share) | 0 |
| Dividends for every 10-share (RMB) (Tax included) | 2 |
| Equity base of distribution plan (Share) | 1,152,535,254 |
| Cash bonus distribution (RMB) (Tax included) | 230,507,050.80 |
| Cash bonus distribution in other ways (i.e. share buy-backs) (RMB) | 0.00 |
| Total cash bonus (including other ways) (RMB) | 230,507,050.80 |
| Profit available for distribution(RMB) | 316,785,396.01 |
| Ratio of total cash dividend (other ways included) in total profit distribution | 100% |
| Cash dividend | |
| The Company is in a development stage and has the arrangement of major capital expenses, ratio of cash dividend in profit distribution should reach a minimum of 20% while the profit distributed. |
| Detailed explanation on profit distribution or capital accumulation fund conversion plan |
| After audited by BDO China Shu Lun Pan Certified Public Accountant LLP, in consolidate statement, the net profit attributable to shareholders of parent company amounted as 405,088,385.54 yuan in 2020, net profit of parent company was 321,799,743.18 yuan; Ended as 31st December 2020, the profit of parent company that can be distributed for shareholders was 316,785,396.01 yuan, balance of consolidate capital public reserves was 1,422,892,729.36 yuan. In line with relevant regulations and Article of Association, and consider the interest of shareholders, BOD plans to submit the equity distribution plan for year of 2020 to shareholders general meeting: based on total share capital 1,152,535,254 shares of the Company on 31st December 2020, distributed 2 Yuan (tax included) for every 10-share to all shareholders with zero share bonus (tax included), and no share converted from capital reserve |
III. Implementation of commitment
1. Commitments that the actual controller, shareholders, related party, buyer and the Company havefulfilled during the reporting period and have not yet fulfilled by the end of reporting period
√ Applicable □Not applicable
| Commitments | Commitment party | Type of commitments | Content of commitments | Commitment date | Commitment term | Implementation |
| Commitments for share merger reform | ||||||
| Commitments in report of acquisition or equity change | ||||||
| Commitments in assets | Food Materials Group | Other commitments | Commitment to non-normal business enterprises: For non-normal business enterprises under Shenzhen Cereals Group (including but not limited to enterprises that have been revoked business licenses, discontinued operation, etc.), the committed person will fully assist, | 2018-03-23 | Implement as promis | Normal per |
| reorganization | urge and promote Shenzhen Cereals Group to implement the corresponding write-off procedures. After the completion of this reorganization, if Shenzhen Cereals Group or the listed company is called to account, receives administrative punishment or suffers any losses due to the abnormal operation of the non-normal business enterprises or the failure to handle write-off procedures in time, the committed person will bear the relevant legal liability, and fully compensate the listed company and the target company within 30 working days after the actual loss occurs. | ed | formance | |||
| Food Materials Group | Other commitments | Relevant Commitments Regarding the Existence of Flaws in Leased Property: The leased house property of Shenzhen Cereals Group and its holding subsidiaries has the following conditions: (1) The lessor has not provided the ownership documentary evidence of the property and/or the documentary evidence proving the lessor has the right to rent out the house property. (2) The lease term of part of the leased house property is more than 20 years; (3) Shenzhen Cereals Group and its subsidiaries sublet part of the leased house property to a third party without the consent of the lessor; (4) The leased house property of Shenzhen Cereals Group and its holding subsidiary has not been registered for the housing lease. If Shenzhen Cereals Group and its holding subsidiaries are imposed any form of punishment by the relevant government departments or assume any form of legal responsibility, or occur any losses or expenses because their leased place and / or house property do not comply with relevant laws and regulations, the committed person will be willing to bear any losses, damages, claims, costs and expenses incurred, suffered and assumed by Shenzhen Cereals Group and its holding subsidiaries, and protect Shenzhen Cereals Group and its holding subsidiaries from damages. In addition, the committed person will support Shenzhen Cereals Group and its holding subsidiaries to actively advocate their rights against the corresponding parties in order to safeguard and protect the interest of Shenzhen Cereals Group and the listed companies to the maximum extent. | 2018-03-23 | Implement as promised | Normal performance | |
| Food Materials Group | Other commitments | Commitment Letter on Flaws in House Property and Land: In the case that some of the house properties held by Shenzhen Cereals Group fail to rename the obligee of the property ownership certificate, the committed person will fully assist, urge and promote Shenzhen Cereals Group or its subsidiaries to go through the formalities. After the completion of this reorganization, if Shenzhen Cereals Group or the listed company is called to account, receives administrative punishment or suffers any losses due to the failure to rename the obligee of the property ownership certificate, the committed person will bear the relevant legal liability, and fully compensate the listed company and Shenzhen Cereals Group within | 2018-03-23 | Implement as promised | Normal performance |
| government departments or assume any legal liability, or suffer any losses or expenses arising from the modification for flaws in sites and/or properties as the above-mentioned and other self-owned or leased sites and/or properties fail to comply with the relevant laws and regulations, the committed person will assume any losses, damages, claims, costs and expenses incurred, suffered and assumed by Shenzhen Cereals Group and its holding subsidiaries, and protect the list companies and Shenzhen Cereals Group from damages. In addition, the committed person will support the company and its holding subsidiaries to actively advocate their rights against the corresponding parties in order to safeguard and protect the interest of the company and its holding subsidiaries to the maximum extent. | |||||
| Food Materials Group | Other commitments | Commitment Letter on the Company’s System Reform and System Evaluation of Shenzhen Cereals Group in 1998: After the completion of this restructuring, if Shenzhen Cereals Group or the listed company is called to account, receives administrative punishment or suffers any losses as the system reform is not evaluated or other reasons related to this reform, the committed person will bear the relevant legal liability, and fully compensate the listed company and Shenzhen Cereals Group within 30 working days after the actual loss occurs. | 2018-03-23 | Implement as promised | Normal performance |
| Food Materials Group | Other commitments | Commitment on the Adjustment of the Main Business: Within 24 months after the completion of the transaction, the Company has no plan, intention or arrangement to divest the main assets related to the existing business of the listed company through the shareholders’ meeting and the board of directors of the listed company. The listed company will strive to improve the management level based on the asset structure and business development after the completion of the transaction, and do its best to complete the business integration and coordination after the completion of the reorganization, and create greater value for shareholders. | 2018-03-23 | 2020-11-12 | Completed |
| Food Materials Group | Other commitments | Commitment to Maintain the Position of Controlling Shareholders of Listed Companies: Within 60 months from the date of completion of this transaction, the Company promises not to voluntarily give up the controlling shareholder status in the listed company, and guarantees that the controlling shareholder status of the listed company will not be changed due to reasons of the Company during this period, nor assists any other party to seek the controlling shareholder status of the listed company. Within 60 months from the date of completion of this transaction, the Company will not take the initiative to change the status of the controlling shareholder of the listed company through any actions including reducing the share holding in the listed company. | 2018-03-23 | 2023-11-12 | Normal performance |
| Food | Other | Commitment on the public shares: After the completion of the | 2018-0 | Imple | No |
| Materials Group | commitments | transaction, the committed person will cautiously nominate directors and supervisors, and will not nominate candidates for directors, supervisors and senior management to the listed company that will cause the proportion of public shares of the listed company not meet the requirements of the Listing Rules of Shenzhen Stock Exchange.; nor will vote for the relevant shareholders’ meeting and/or board resolutions for selecting directors, supervisors and senior executives of listed companies that will make the proportion of public shares of listed companies not meet the requirements of the Listing Rules of Shenzhen Stock Exchange. | 3-23 | ment as promised | rmal performance |
| Food Materials Group | Performance commitments and compensation arrangements | Commitment on performance compensation: Food Materials Group promises that after the completion of the audit and evaluation of Shenzhen Cereals Group, the Company will make a commitment to the performance of Shenzhen Cereals Group within three years after the completion of the restructuring, and sign a clear and feasible compensation agreement on the achievement of performance promised by the target company with the listed company so as to protect the interests of small and medium investors. On June 8, 2018, Food Materials Group and Shenshenbao signed the “Performance Compensation Agreement” and agreed to make a commitment to the net profit of Shenzhen Cereals Group from 2018 to 2020 (hereinafter referred to as the “commitment period”, if it is not completed before December 31, 2018, the commitment period will correspondingly postpone), and after the completion of the acquisition, compensate Shenshenbao in accordance with the provisions of this agreement as the actual net profit of the object company is less than the promised net profit. The performance compensation period of this transaction is 2018, 2019 and 2020, if the transaction is not completed in 2018, the first year of the performance commitment period of this transaction is the year when the target company of the transaction is delivered. Food Materials Group promises Shenzhen Cereals Group to achieve net profit (net profit is subject to the net profit attributable to shareholders of the parent company after deducting non-recurring gains and losses in the audited consolidated statement, the same below) of not less than 390 million yuan in 2018, and net profit of not less than 400 million yuan in 2019, and net profit of not less than 420 million yuan in 2020. | 2018-03-23 | 2020-12-31 | Completed |
| Food Materials Group | Shares limited for sale commitment | Commitment on the Lock-up Period of the Shares: Shenzhen Shenbao Industrial Co., Ltd. (hereinafter referred to as “Shenshenbao” and “Listed Company”) intends to purchase the 100% equity of Shenzhen Cereals Group Co., Ltd. (hereinafter referred to as “SZCG”, “target company”) held by the shareholders of SZCG through issuance of shares. Shenzhen Food Materials Group Co., Ltd (hereinafter referred to as “the committed person”), the controlling shareholder of SZCG, | 2018-04-02 | 2022-5-12 | Normal performa |
| has made the following commitments: 1. The committed person should not transfer the shares of the listed company obtained from this transaction within 36 months from the date of listing of the shares. If the closing price of the listed company’s stock is lower than the issue price for 20 consecutive trading days within 6 months after the completion of this transaction, or the closing price is lower than the issue price at the term end of 6 months after the completion of the transaction, the lock-up period for the committed person to hold the company’s stock automatically prolongs for at least 6 months. 2. At the expiration of the above-mentioned lock-up period, if the committed person doesn’t fully fulfill the performance compensation obligation stipulated in the Performance Compensation Agreement, the lock-up period of the shares issued to the committed person will be prolonged to the date when the performance compensation obligation is fulfilled. 3. Before this transaction, the shares of the Listed Company held by the committed person and the companies controlled by the promise shall not be transferred within 12 months after the completion of this transaction. 4. During the lock-up period of shares, the part that the committed person has increased due to the bonus issue of dividends, transfer of share capital or share allotment of the Listed Company and other ex dividend and ex right matters should also abide by the above-mentioned share lock-up arrangement. 3. If the above lock-up period does not comply with the latest regulatory requirements of the securities regulatory authority, the committed person will agree to make corresponding adjustments according to the latest regulatory opinions of the regulatory authorities, and implement in accordance with the relevant provisions of the China Securities Regulatory Commission and the Shenzhen Stock Exchange after the lock-up period expires. | nce | ||||
| Food Materials Group | Other commitments | Commitment letter of Shenzhen Food Materials Group Co., Ltd on pending litigation of Shenzhen Cereals Group Co., Ltd.: Shenzhen Shenbao Industrial Co., Ltd. (hereinafter referred to as “Shenshenbao”, “Listed Company”) intends to purchase the 100% equity of Shenzhen Cereals Group Co., Ltd. (hereinafter referred to as “SZCG”, “target company”) held by the shareholders of SZCG through issuance of shares. In view of the two unfinished major lawsuits/arbitration of SZCG, Shenzhen Food Materials Group Co., Ltd (hereinafter referred to as “the committed person”), the controlling shareholder of SZCG, has made the following commitments: If SZCG and its controlling subsidiaries suffer any claims, compensation, losses or expenses due to the unsettled major lawsuits/arbitration about the contract dispute of international sale of soybean with Noble Resources Co., Ltd. and the contract dispute with Guangzhou Jinhe Feed Co., Ltd. and Huangxianning Import Agent, | 2018-04-02 | Implement as promised | Normal performance |
| the committed person will assume the compensation or loss caused by the above two outstanding major lawsuits/arbitration. | |||||
| Food Materials Group | Other commitments | Commitment letter of Shenzhen Food Materials Group Co., Ltd. on risks of making a supplementary payment for the rent at earlier stage of Pinghu Grain Depot: Shenzhen Shenbao Industrial Co., Ltd. intends to purchase the 100% equity of Shenzhen Cereals Group Co., Ltd. (hereinafter referred to as “SZCG”) held by the shareholders of SZCG through issuance of shares. Shenzhen Food Materials Group Co., Ltd (hereinafter referred to as “the committed person”), the controlling shareholder of SZCG, has made the following commitments: If SZCG needs to make a supplementary payment for the rent before assessment basis date to the property right unit of Pinghu Grain Depot (or its authorized unit), the total amount of the rent and other related charges and expenses shall be borne by the committed person. | 2018-04-02 | Implement as promised | Normal performance |
| Food Materials Group | Other commitments | Commitment letter on the house properties of Shenzhen Cereals Group and its subsidiaries that have not obtained the housing ownership certificate: Shenzhen Shenbao Industrial Co., Ltd. (hereinafter referred to as “Shenshenbao” and “listed company”) intends to purchase the 100% equity of Shenzhen Cereals Group Co., Ltd. (hereinafter referred to as “SZCG”, “target company”) held by the shareholders of SZCG through issuance of shares. Shenzhen Food Materials Group Co., Ltd (hereinafter referred to as “the committed person”), the controlling shareholder of SZCG, has made the following commitments: If SZCG and its subsidiaries suffer any administrative punishment or losses due to their house properties without the housing ownership certificate, the committed person will bear the relevant legal responsibilities and fully compensate the listed company and SZCG within 30 working days after the actual loss occurs. | 2018-04-02 | Implement as promised | Normal performance |
| Food Materials Group | Shares limited for sale commitment | Commitment on Shenzhen Food Materials Group Co., Ltd to accept the restricted shares of non-tradable shares reform of Shenzhen Shenbao Industrial Co., Ltd. held by Shenzhen Investment Holdings Co., Ltd.: Shenzhen Food Materials Group Co., Ltd (hereinafter referred to as “Food Materials Group”) accepts 79,484,302 shares of A shares of Shenshenbao A (000019) (including 66,052,518 shares of unrestricted A shares and 13,431,784 shares of restricted A shares ) held by Shenzhen Investment Holdings Co., Ltd. (hereinafter referred to as “Shenzhen Investment Holdings”) by the free transfer, totally accounting for 16% of the total share capital of Shenshenbao. Shenzhen Investment Holdings made the following commitments in the reform of non-tradable shares of Shenshenbao in 2006: “To make | 2018-04-04 | Implement as promised | Normal performance |
| effective and long-term incentives for the management, after the completion of the share reform, Shenzhen Agricultural Products Co., Ltd. (hereinafter referred to as “Agricultural Products”) and Shenzhen Investment Holdings, the company’s non-tradable shareholders, will sell their shareholdings after consideration which account for 6%-8% of the company’s total share capital to the management of the company in three years based on the shareholding ratio of Agricultural Products and Shenzhen Investment Holdings after the share reform (i.e. accounting for 6%-8% of the company’s total share capital of 181,923,088 shares after the share reform).” Food Materials Group made a commitment that after the completion of the free transfer of the state-owned shares, Food Materials Group would continue to perform the above commitments it made when Shenzhen Investment Holdings makes the non-tradable shares reform to Shenshenbao, which is effective in the long run. | |||||
| Food Materials Group | Commitments on inter-industry competition, related transactions and capital occupancy | Commitment Letter on Avoiding Horizontal Competition: In view of the fact that Shenzhen Shenbao Industrial Co., Ltd. (hereinafter referred to as “Listed Company”) intends to acquire 100% equity of Shenzhen Cereals Group Co., Ltd. held by Shenzhen Food Materials Group Co., Ltd (hereinafter referred to as “the Company”) by issuing shares to purchase assets, the Company has made the following commitments: 1. As of the issue date of this Commitment Letter, the Company and other enterprises controlled by the Company have not engaged in any business or activity that directly or indirectly constitute horizontal competition to the Listed Company and its subsidiaries in the business, and guarantees that it will not engage or induce any enterprise controlled by the Company to engage in any business or activity that directly or indirectly constitute horizontal competition to the Listed Company and its subsidiaries in the future. 2. If the business opportunity obtained by the Company and other enterprises controlled by the Company constitutes horizontal competition or may constitute horizontal competition to the main business of the Listed Company and its subsidiaries, the Company will immediately notify the Listed Company and try its best to give the business opportunity to the Listed Company to avoid horizontal competition or potential horizontal competition with the Listed Company and its subsidiaries and ensure the interests of Listed Company and other shareholders of Listed Company are not impaired. 3. If the main business of the Listed Company and its subsidiaries constitutes horizontal competition or may constitute horizontal competition to the Company and other enterprises controlled by the Company due to business development or extension, the Company and other enterprises controlled by the Company shall take the following feasible measures based on specific circumstance | 2018-06-08 | Implement as promised | Normal performance |
| to avoid competition with the Listed Company: (1) Stop business that constitutes competition or may constitute competition to the Listed Company; (2)Transfer the competitive businesses and assets to the Listed Company at fair prices; (3) Transfer the competitive business to an unrelated third party; (4) Other ways to protect the interests of the Listed Company; 4. If the Company violates the above commitments and causes losses to the Listed Company, the Company will compensate the Listed Company for the incurred losses after the losses are determined. 5. The above commitments continue to be valid during the period when the Company is the controlling shareholder of the Listed Company. | |||||
| Food Materials Group | Commitments on inter-industry competition, related transactions and capital occupancy | Commitment Letter on Reducing and Regulating Related Transactions: In view of the fact that Shenzhen Shenbao Industrial Co., Ltd. (hereinafter referred to as “Listed Company”) intends to acquire 100% equity of Shenzhen Cereals Group Co., Ltd. held by Shenzhen Food Materials Group Co., Ltd (hereinafter referred to as “the Company”) by issuing shares to purchase assets, the Company has made the following commitments: 1. The enterprises directly or indirectly controlled or affected by the Company and the restructured company and its holding companies will regulate and minimize the related transactions. For related transactions that cannot be avoided or have reasonable reasons to occur, the Company promises to follow the market-oriented principle of justice, fairness and openness, and sign agreements in accordance with relevant laws and regulations, regulatory documents and articles of association, perform legal procedures, fulfill information disclosure obligations and handle relevant approval procedures in accordance with the law, and ensure not to damage the legitimate rights and interests of the company and other shareholders through related transactions. 2. The enterprises directly or indirectly controlled or affected by the Company will strictly avoid borrowing from the company and its holding and shareholding companies, occupying the funds of the company and its holding and shareholding companies, or embezzling the company’s funds by taking advance payments and compensatory debts from the company and its holding and shareholding companies. 3. After the completion of this transaction, the Company will continue to exercise its shareholder rights in strict accordance with the relevant laws and regulations, regulatory documents and the relevant provisions of the Articles of Association; and fulfill its obligation of avoiding voting when the company’s general meeting of shareholders is voting on related transactions involving the Company. 4. The Company guarantees not to obtain any improper interests through the related transactions or cause the company and its holding and shareholding companies to bear any wrongful obligations. If the company or its | 2018-06-08 | Implement as promised | Normal performance |
| holding and shareholding companies suffer loses or the interests of the company or its holding and shareholding companies are embezzled by related transactions, the Company will the losses of the company and its holding and shareholding companies. | |||||
| Food Materials Group | Other commitments | Commitment on the Standardized Operation of Listed Company: Shenzhen Shenbao Industrial Co., Ltd. intends to purchase 100% equity of Shenzhen Cereals Group Co., Ltd. (hereinafter referred to as “SZCG”) held by Shenzhen Food Materials Group Co., Ltd (hereinafter referred to as “the Company”) through issuance of shares. In response to the above transactions, the Company has made the following commitments: After the completion of this transaction, the committed person promises to ensure that the listed company will strictly follow the requirements of laws and regulations such as the “Guidelines for the Governance of Listed Companies” and the changes in internal management and external operation and development of listed company to revise the “Articles of Association” and related rules of procedure so as to adapt to the business operations and corporate governance requirements after the reorganization, continue to improve the governance structure of listed company, continuously strengthen the system construction to form a corporate governance structure that each performs their own duties, effectively checks and balances, makes scientific decisions and coordinates the operation so as to more effectively and feasibly protect the interests of the listed company and all its shareholders. The committed person will urge the listed company to perform the functions of the shareholders’ meeting in strict accordance with the “Articles of Association” and the “Rules of Procedures of the Shareholders Meeting”, ensure that all shareholders, especially small and medium shareholders, enjoy equal rights as stipulated by laws, administrative regulations and the Articles of Association, and ensure that all shareholders legally exercise their rights and interests. The committed person will also urge the listed company to further improve the institutional requirements of the board of directors, ensure that the board of directors fairly, scientifically and efficiently makes decisions, ensure that independent directors can perform their duties in accordance with laws and regulations during their employment, actively understand the various operations of the listed company, consciously perform responsibilities, play a positive role in the scientific decision-making of the board of directors and the development of the listed company, promote the sound development of the listed company, and effectively safeguard the overall interests of the listed company and the interests of small and medium-sized shareholders. In addition, the Company will urge the listed company to give full play to the positive role of independent directors in | 2018-06-08 | Implement as promised | Normal performance |
| regulating the operation of the company, strictly abide by relevant national laws, regulations, rules and relevant provisions of the Articles of Association to select independent directors, and further enhance corporate governance. | |||||
| Food Materials Group | Other commitments | Commitment Letter on the Legal Compliance of the Underlying Asset Operation: Shenzhen Shenbao Industrial Co., Ltd. (hereinafter referred to as “Shenshenbao”, “Listed Company”) intends to purchase 100% equity of Shenzhen Cereals Group Co., Ltd. (hereinafter referred to as “SZCG”, “Target Company”) held by Shenzhen Food Materials Group Co., Ltd (hereinafter referred to as “the Company”) through issuance of shares. The Company has made the following commitments: 1. The Target Company is a limited liability company established according to law and is validly existing, possesses statutory business qualifications, and the Target Company has obtained all the approvals, consents, authorizations and licenses required for its establishment and operation, and all approvals, consents and authorizations and licenses are valid and there is no reason or case that may result in the invalidation of the above approvals, consents, authorizations and licenses. 2. The Target Company has no major violations of laws and regulations in the production and operation in the last three years, there is no case that the Target Company should be terminated according to relevant laws, regulations, normative documents and the company’s articles of association. Except for litigations, arbitrations and administrative penalties disclosed in the Restructuring Report, the Target Company does not have any unsettled or foreseeable major litigation, arbitration and administrative penalty that adversely affect its operations or the amount is more than 10 million yuan. 3. The Target Company will perform the labor contracts with its employees independently and completely. 4. If the Target Company is subject to the fees or penalties of the relevant competent authorities in terms of industry and commerce, taxation, employee salaries, social security, housing provident fund, business qualifications or industry supervisors due to the facts already existing before the reorganization, the Company will fully compensates all the outstanding fees of the Target Company and bear all the losses suffered by Shenshenbao and the Target Company. 5. The Target Company legally owns the ownership and/or use rights of the offices, office equipment, trademarks and other assets required for normal production and operation, has independent and complete assets and business structure, and has legal ownership of its main assets, and the ownership of assets is clear. 6. There is no case that the Target Company impedes the transfer of ownership of the company, such as litigation, arbitration, judicial enforcement, etc., and there is no external guarantee that violates the law or the articles of | 2018-06-08 | Implement as promised | Normal performance |
| association. After this reorganization, if the Company violates the above commitments and causes losses to Shenshenbao and the Target Company, the Company agrees to bear the aforementioned compensation/ liability for damage to Shenshenbao/ Target Company. | |||||
| Food Materials Group | Other commitments | Commitment on the Independence of Listed Company: In view of the fact that Shenzhen Shenbao Industrial Co., Ltd. (hereinafter referred to as “Shenshenbao”) intends to acquire 100% equity of Shenzhen Cereals Group Co., Ltd. (hereinafter referred to as “Target Company”) held by Shenzhen Food Materials Group Co., Ltd (hereinafter referred to as “the Company”) by issuing shares to purchase assets, the Company has made the following commitments: 1. Guarantee the independence of the personnel of Shenshenbao and the Target Company (1) Guarantee that the labor, personnel and compensation management of Shenshenbao and Target Company are completely independent of the Company and other companies and enterprises controlled by the Company or other economic organizations and related parties after the completion of this restructuring. (2) Guarantee that the senior management personnel of Shenshenbao and Target Company are fully employed in Shenshenbao and Target Company and receive remuneration after the completion of this restructuring, and do not hold any post except for directors and supervisors in the Company and other companies, enterprises controlled by the Company or other economic organizations and related parties. (3) Ensure not to intervene into the shareholders’ meeting and the board of directors of Shenshenbao and Target Company to exercise their powers to determine the appointment and dismissal of personnel after the completion of this restructuring. 2. Guarantee the institutional independence of Shenshenbao and Target Company (1) After the completion of this restructuring, Shenshenbao and Target Company will establish a sound corporate governance structure and have an independent and complete organization. (2) After the completion of this restructuring, the shareholders meeting, the board of directors and the board of supervisors of Shenshenbao and Target Company shall independently exercise their functions and powers in accordance with the laws, regulations and the articles of association of Shenshenbao and Target Company. 3. Ensure that the assets of Shenshenbao and Target Company are independent and complete. (1) After the completion of this restructuring, Shenshenbao and Target Company shall have independent and complete assets related to production and operation. (2) Ensure that the site for business operation of Shenshenbao and Target Company are independent of the Company and other companies and enterprises controlled by the Company or other economic organizations and related parties after the completion of | 2018-06-08 | Implement as promised | Normal performance |
| this restructuring. (3) In addition to normal business transactions, after the completion of this restructuring, Shenshenbao and Target Company do not have funds and assets which are occupied by the Company and other companies and enterprises controlled by the Company or other economic organizations and related parties. 4. Guarantee the business independence of Shenshenbao and Target Company (1) After the completion of this restructuring, Shenshenbao and Target Company shall have the relevant qualifications for independent business activities, and have the market-oriented independent, autonomous and sustainable operation capabilities. (2) After the completion of this restructuring, the Company and other companies and enterprises controlled by the Company or other economic organizations and related parties shall reduce the related transactions with Shenshenbao and Target Company and other companies and enterprises controlled by them or other economic organizations; for the necessary and unavoidable related transactions, guarantee the fair operation according to market principles and fair prices, and perform relevant approval procedures and information disclosure obligations in accordance with relevant laws, regulations and regulatory documents. 5. Guarantee the financial independence of Shenshenbao and Target Company (1) Ensure that Shenshenbao and Target Company will establish an independent financial department and an independent financial accounting system, and a standardized and independent financial accounting system after the completion of this restructuring. (2) Ensure that Shenshenbao and Target Company will open an independent bank account after the completion of this restructuring, and will not share bank accounts with the Company and other companies and enterprises controlled by the Company or other economic organizations and other related parties. (3) After the completion of this restructuring, the financial personnel of Shenshenbao and Target Company shall not take part-time jobs in the Company and other companies and enterprises controlled by the Company or other economic organizations and related parties. (4) After the completion of this restructuring, Shenshenbao and Target Company shall be able to make financial decisions independently, the Company shall not interfere with the use of funds of Shenshenbao and Target Company. (5) After the completion of this restructuring, Shenshenbao and Target Company shall pay taxes independently according to law. If the Company violates the above commitments, it will bear all the losses caused to Shenshenbao and Target Company. | |||||
| Food Materials Group , | Commitments on inter-industry | Commitment to Avoid Occupation of Non-operating Capital: Shenzhen Shenbao Industrial Co., Ltd. intends to acquire 100% equity of Shenzhen Cereals Group Co., Ltd. (hereinafter referred to as “SZCG”) held by Shenzhen Food Materials Group Co., Ltd | 2018-06-08 | Implement as promis | Normal per |
| Agricultural Products | competition, related transactions and capital occupancy | (hereinafter referred to as “the Company”) through issuance of shares. In response to the above transactions, Food Materials Group and Agricultural Products have made the following commitments: 1. As of the issue date of this commitment letter, the committed person and its related person do not have any illegal use of funds and assets of the listed company and SZCG, and there is no case that the listed company and SZCG provide illegal guarantee for the committed person and its related person. 2. After the completion of the transaction, the committed person guarantees that the committed person and its related person shall not illegally occupy the funds and assets of the listed company in any way, nor require the listed company to provide illegal guarantee for the committed person and its related person under any circumstances, nor engage in any act to damage the legitimate rights and interests of the listed company and other shareholders. If the committed person violates the above commitments, it will bear all losses caused to the listed company and the target company and other companies and enterprises controlled by them or other economic organizations. | ed | formance | ||
| Commitments make in initial public offering or re-financing | ||||||
| Equity incentive commitment | ||||||
| Other commitments for medium and small shareholders | ||||||
| Comple | Y | |||||
2. Concerning assets or project of the Company, which has profit forecast, and reporting period still inforecasting period, explain reasons of reaching the original profit forecast
√ Applicable □Not applicable
ted ontime(Y/N)
Assets with
earningsforecast oritems
| Assets with earnings forecast or items | Predict start time | Predict termination time | Current forecast performance (10 thousand yuan) | Current actual performance (10 thousand yuan) | Reasons for not reaching predictions (if applicable) | Predicted disclosure date | Predictive disclosure index |
| Shenzhen Cereals Group Co., Ltd | 2018-01-01 | 2020-12-31 | 42,000 | 45,917.40 | Not applicable | 2018-03-24 | Found more in the Notice of the Company released on Juchao Website (www.cninfo.com.cn) |
Commitments made by the shareholders and counter party on annual operation performance
√ Applicable□Not applicable
Commitment on performance compensation: on 23 March 2018, the Company entered into an Agreement on Share Issuance andPurchase of Assets with Fude Capital, Fude Capital promises that after the completion of the audit and evaluation of ShenzhenCereals Group, Fude Capital will make a commitment to the performance of Shenzhen Cereals Group within three years after thecompletion of the restructuring, and sign a clear and feasible compensation agreement on the achievement of performance promisedby the target company with the listed company so as to protect the interests of small and medium investors.On June 8, 2018, FudeCapital and Shenshenbao signed the “Performance Compensation Agreement” and agreed to make a commitment to the net profit ofShenzhen Cereals Group from 2018 to 2020 (hereinafter referred to as the “commitment period”), and after the completion of theacquisition, compensate Shenshenbao in accordance with the provisions of this agreement as the actual net profit of the objectcompany is less than the promised net profit. On September 6, 2018, Fude Capital and Shenshenbao signed the "SupplementaryAgreement on Performance Compensation Agreement (I)", Fude Capital promises Shenzhen Cereals Group to achieve net profit (netprofit is subject to the net profit attributable to shareholders of the parent company after deducting non-recurring gains and losses inthe audited consolidated statement, the same below) of not less than 390 million yuan in 2018, and net profit of not less than 400million yuan in 2019, and net profit of not less than 420 million yuan in 2020.
Completion of performance commitment and influence on impairment test of goodwillIn the reporting period, the net profit attributable to parent company after deducting non-recurring gain/loss achieved by SZCGamounted as 459.174 million yuan, , the net profit attributable to the target company is 39.174 million yuan larger than the 2020profit forecast of 420 million yuan, and the profit forecast completion rate is 109.33%.
IV. Non-operational fund occupation from controlling shareholders and its related party
□ Applicable √Not applicable
No non-operational fund occupation from controlling shareholders and its related party in period.V. Explanation from Board of Directors, Supervisory Committee and Independent Directors(if applicable) for “Qualified Opinion” that issued by CPA
□ Applicable √Not applicable
VI. Particulars about the changes in aspect of accounting policy, estimates and calculationmethod compared with the financial report of last year
√ Applicable □Not applicable
(1) Implementation of the Accounting Standards for Business Enterprise No.14 - Revenue (Revised in 2017) (hereinafter referred toas New Revenue Standard)The Ministry of Finance revised the "Accounting Standards for Business Enterprises No. 14 - Revenue" in 2017. The revisedstandards stipulate that for the first implementation of the standards, the amount of retained earnings and other related items in thefinancial statements at the beginning of the year should be adjusted according to the cumulative impact, and the information in thecomparable period should not be adjusted.
The Company has implemented the new revenue standards from January 1, 2020. According to the standards, the Company onlyadjusts the retained earnings at the beginning of 2020 and the amount of other related items in the financial statements for thecumulative impact of contracts that have not been completed on the date of first implementation, and does not make adjustments tothe comparative financial statements. The main impacts of the implementation of the standards are as follows:
| Content & reasons | Approval procedure | Note |
| The Company implemented the Accounting Standards for Business Enterprise No.14 - Revenue that revised by the Ministry of Finance on 1 January 2020. In accordance with the relevant regulations on the convergence of the old and new standards, the Company only adjusted the retained earnings at the beginning of 2020 and the amount of other related items in the financial statements for the cumulative impact of contracts that have not been completed on the date of first implementation, the comparative financial statements were not adjusted. | Approved by the 7th session of 10th BOD on 30 December 2019 | Main impact of implementing the new revenue standard on the Company’s financial statement can be found in the 44. Important accounting policy and estimate changes of Note V. Important Accounting Policy and Estimated in Section XII. Financial Report |
| Content & reasons | Approval procedure | Item affected | Amount of impact on the balance dated 1 Jan. 2020 | |
| Consolidate | Parent company | |||
| The Company implemented the Accounting Standards for Business Enterprise No.14- Revenue that revised by the Ministry of Finance since 1 Jan. 2020. According to the convergence of relevant old and new standards, the Company only adjusts the amount of retained earnings at the beginning of 2020 and other related items in the financial statements for the cumulative effect of the contracts that have not been completed at the date of initial execution, and no adjustment is made to the comparative financial statement. | Approved by the 7th session of 10th BOD on 30 December 2019 | Contract liability | 134,935,456.98 | 3,137.80 |
| Account received in advance | -134,935,456.98 | -3,137.80 |
The impact of the implementation of the new revenue standards on relevant items in the financial statement for2020, as compared to the previous revenue standard, is as follow:
| Affected items of balance sheet | Amount of impact on the balance dated 31 Dec. 2020 | |
| Consolidate | Parent company | |
| Contract liability | 108,975,866.82 | 411.00 |
| Other current liability | 2,329,512.69 | 0.00 |
| Account received in advance | -111,305,379.51 | -411.00 |
| Affected items of profit statement | Amount of impact on amount incurred in 2020 | |
| Consolidate | Parent company | |
| Operating cost | 67,026,284.32 | 0.00 |
| Sales expenses | -67,026,284.32 | 0.00 |
(2) Implementation of Interpretation of Accounting Standards for Business Enterprises No.13The Ministry of Finance issued the Interpretation of Accounting Standards for Business Enterprises No.13 (Cai Kuai [2019] No.21 ,hereinafter referred to as Interpretation No.13) on 10 December 2019, and effective from 1 January 2020 without retroactiveadjustment required.
① Identification of related parties
Interpretation No. 13 clarifies that the following circumstances constitute a related party: a joint venture or an associated enterprisebetween an enterprise and other member units (including parent companies and subsidiaries) of the enterprise group to which itbelongs; a joint venture of the enterprise and other joint ventures or associated enterprises of the enterprise. In addition, InterpretationNo. 13 also clarifies that an enterprise with two or more than two parties only significantly affected by one party does not constitute a
related party, it also states that an associated enterprise includes the associated enterprise and its subsidiaries, and a joint ventureincludes the joint venture and its subsidiaries.
②Definition of business
Interpretation No. 13 completes the three elements of business composition, refines the judgment conditions of the businesscomposition, and introduces the "concentration ratio test" option to simplify to a certain extent the judgment of whether a portfolioobtained not under the same control constitutes a business, etc.
The Company has implemented Interpretation No. 13 from January 1, 2020, and the comparative financial statements have not beenadjusted. The implementation of Interpretation No. 13 has not had a significant impact on the Company's financial status andoperating results.
(3) Implementation of the "Interim Provisions on Accounting Treatment of Carbon Emissions Trading"On December 16, 2019, the Ministry of Finance issued the "Interim Provisions on the Accounting Treatment of Carbon EmissionsTrading" (CK [2019] No. 22), which is applicable to related enterprises in the key emission units that carry out carbon emissiontrading business in accordance with the "Interim Measures for the Administration of Carbon Emissions Trading" (hereinafter referredto as key emission enterprises). The provisions came into effect on January 1, 2020, and key emission enterprises should adopt theprospective application to apply the provisions.
The Company has implemented the provisions from January 1, 2020, and the comparative financial statements have not beenadjusted. The implementation of the provisions has not had a significant impact on the Company's financial status and operatingresults.
(4) Implementation of the "Regulations on Accounting Treatment of Rental Concessions Related to the COVID-19 Epidemic"On June 19, 2020, the Ministry of Finance issued the "Regulations on Accounting Treatment of Rental Reduction Related to the pandemic of COVID-19" ((2020) No. 10), which came into effect on June 19, 2020, allowing companies to adjust the relevant rent reduction that occurred between January 1, 2020 and the implementation date of the regulation. According to the regulation, companies could select simplified methods for accounting treatments for rent reduction and deferred payment of rents directly caused by the pandemic of COVID-19. We selected the simplified methods to account all the rental business, which met the requirements of the new regulation. We also adjusted the rent reduction in accordance to the regulation from January 1, 2020 to the effective date of the regulation. The revenue of rental reduced by 24,697,897.12 in 2020 as we selected the simplified methods to account our rental business.
VII. Major accounting errors within reporting period that needs retrospective restatement
□ Applicable √Not applicable
No major accounting errors within reporting period that needs retrospective restatement for the Company in the period.VIII. Compare with last year’s financial report; explain changes in consolidation statement’sscope
√ Applicable □Not applicable
During the reporting period, the Company newly established the Shenzhen Shenliang Hongjun Catering Management Co., Ltd., andcanceled Shenzhen Shenbao Tea Co., Ltd and Dongguan Jinying Biotechnology Co., Ltd.
IX. Appointment and non-reappointment (dismissal) of CPAAccounting firm appointed
| Name of domestic accounting firm | BDO China Shu Lun Pan Certified Public Accountant LLP |
| Remuneration for domestic accounting firm (in 10 thousand Yuan) | 70 |
| Continuous life of auditing service for domestic accounting firm | 2 |
| Name of domestic CPA | Qi Tao, Tao Guoheng |
| Continuous life of auditing service for domestic CPA | 2，1 |
Whether re-appointed accounting firms in this period or not
□ Yes √ No
Appointment of internal control auditing accounting firm, financial consultant or sponsor
√ Applicable □Not applicable
During the reporting period, BDO China Shu Lun Pan Certified Public Accountant LLP was hired as the internal control auditinstitutions of the Company, 290,000 Yuan for internal control audit fee.
X. Particular about delisting after annual report disclosed
□ Applicable √Not applicable
XI. Bankruptcy reorganization
□ Applicable √Not applicable
No bankruptcy reorganization for the Company in reporting periodXII. Significant lawsuits and arbitration of the Company
√ Applicable□Not applicable
| Lawsuits (arbitration) | Amount involved (in 10 thousand | Resulted an accrual liability (Y/N) | Progress | Trial result and influence | Execution of judg | Disclosure dat | Disclosure ind |
| Yuan) | ment | e | ex | ||||
| As of 31 December 2020, other lawsuits that did not meet the disclosure standards for significant lawsuits mainly including: disputes over purchase and sales contract, disputes over loans contract, disputes over construction contracts, disputes over corporate separation contracts and tort liability dispute etc. | 8,240.44 | Yes, the single loan contract dispute from subordinate enterprise of the Company is expected to form an accrual liability of 3.5 million yuan approximately. Other lawsuit-related cases are relatively small in individual amount, and will not have a significant impact on the Company when analyzed in conjunction with the progress of these cases. | The Company actively makes use of the advantageous resources of internal legal affairs and external laws firm to follow up and deal with the lawsuit-related cases. At present, the Company is responding to and dealing with the cases effectively in accordance with relevant laws and regulations | After comprehensive analysis, the outcome of the cases involved in the lawsuits will not have a significant impact on the Company | It is actively advancing | Not applicable |
XIII. Penalty and rectification
□ Applicable √Not applicable
No penalty and rectification for the Company in reporting period.XIV. Integrity of the Company and its controlling shareholders and actual controllers
□ Applicable √Not applicable
XV. Implementation of the Company’s stock incentive plan, employee stock ownership planor other employee incentives
□ Applicable √Not applicable
During the reporting period, the Company has no stock incentive plan, employee stock ownership plan or other employee incentivesthat have not been implemented.
XVI. Major related transaction
1. Related transaction with routine operation concerned
□ Applicable √ Not applicable
No related transaction occurred in the period with routine operation concerned
2. Assets or equity acquisition, and sales of assets and equity
□ Applicable √ Not applicable
No related transaction concerning the asses or equity acquisition and sold in the period
3. Related transaction of foreign investment
□ Applicable √Not applicableNo related transaction of foreign investment occurred in the period
4. Related credits and liabilities
□ Applicable √ Not applicable
No related credits and liabilities occurred in period
5. Other major related transaction
□ Applicable √Not applicable
No other major related transaction in the Period.XVII. Significant contract and implementations
1. Trusteeship, contract and leasing
(1) Trusteeship
□ Applicable √Not applicable
No trusteeship for the Company in reporting period
(2) Contract
□ Applicable √Not applicable
No contract for the Company in reporting period
(3) Leasing
□ Applicable √Not applicable
No leasing in the Period
2. Major Guarantee
√ Applicable □Not applicable
(1) Guarantee
In 10 thousand Yuan
| External Guarantee (not including guarantees to subsidiaries) | ||||||||||
| Name of the Company guaranteed | Related Announcement disclosure date | Guarantee limit | Actual date of happening | Actual guarantee limit | Guarantee type | Guarantee term | Complete implementation or not | Guarantee for related party | ||
| Guarantee for the subsidiaries | ||||||||||
| Name of the Company guaranteed | Related Announcement disclosure date | Guarantee limit | Actual date of happening | Actual guarantee limit | Guarantee type | Guarantee term | Complete implementation or not | Guarantee for related party | ||
| Guarantee of the subsidiaries for the subsidiaries | ||||||||||
| Name of the Company guaranteed | Related Announcement disclosure date | Guarantee limit | Actual date of happening | Actual guarantee limit | Guarantee type | Guarantee term | Complete implementation or not | Guarantee for related party | ||
| Dongguan Shenliang Logistics Co., Ltd. | 27,300 | 2015-07-13 | 14,502 | Joint liability guaranty | 8-year | N | N | |||
| Dongguan Shenliang Logistics Co., Ltd. | 10,200 | 2016-12-21 | 3,501 | Joint liability guaranty | 5-year | N | N | |||
| Dongguan International Food Industrial Park Development Co., Ltd. | 39,168 | 2018-07-27 | 30,556 | Joint liability guaranty | 14-year | N | N | |||
| Dongguan Shenliang Logistics Co., Ltd. | 21,930 | 2020-10-20 | 1,935 | Joint liability guaranty | 14-year | N | N | |||
| Dongguan Shenliang Oil & Food Trade Co., Ltd. | 11,883 | 2019-04-19 | 4,775 | Joint liability guaranty | 8-year | N | N | |||
| Total amount of approving guarantee for subsidiaries in report period (C1) | 21,930 | Total amount of actual occurred guarantee for subsidiaries in report period (C2) | 152 | |||||||
| Total amount of approved guarantee for subsidiaries at the end of reporting period (C3) | 110,481 | Total balance of actual guarantee for subsidiaries at the end of reporting period (C4) | 55,269 | |||||||
| Total amount of guarantee of the Company (total of three above mentioned guarantee) | ||||||||||
| Total amount of approving guarantee in report period (A1+B1+C1) | 21,930 | Total amount of actual occurred guarantee in report period (A2+B2+C3) | 152 | |||||||
| Total amount of approved guarantee at the end of report | 110,481 | Total balance of actual guarantee at the end of | 55,269 | |||||||
| period (A3+B3+C2) | report period (A4+B4+C4) | ||
| The proportion of the total amount of actually guarantee in the net assets of the Company (that is A4+ B4+C4) | 12.03% | ||
| Including: | |||
| Balance of the guarantee provided for shareholder, actual controller and their related parties (D) | 0 | ||
| The debts guarantee amount provided for the guaranteed parties whose assets-liability ratio exceed 70% directly or indirectly (E) | 50,494 | ||
| Proportion of total amount of guarantee in net assets of the Company exceed 50% (F) | 0 | ||
| Total amount of the aforesaid three guarantees (D+E+F) | 50,494 | ||
| Explanations on possibly bearing joint and several liquidating responsibilities for undue guarantees (if applicable) | N/A | ||
| Explanations on external guarantee against regulated procedures (if applicable) | N/A | ||
Explanation on guarantee with composite wayNil
(2) External guarantee against the regulation
□ Applicable √Not applicable
No external guarantee against the regulation occurred in the period
3. Cash asset management
(1) Trust financing
√ Applicable□Not applicable
Trust financing in the period
In 10 thousand Yuan
| Type | Fund sources | Amount occurred | Undue balance | Overdue amount |
| Bank financial products | Owned fund | 92,500 | 17,000 | 0 |
| Total | 92,500 | 17,000 | 0 | |
The high-risk trust investment with single major amount or has minor security, poor fluidity and non-guaranteed
□ Applicable √Not applicable
Unrecoverable principal or impairment possibility from entrust investment
□ Applicable √Not applicable
(2) Entrusted loans
□ Applicable √Not applicable
No entrusted loans in the Period
4. Material contracts for daily operations
□ Applicable √Not applicable
5. Other material contracts
□ Applicable √ Not applicable
No other material contracts in the period.XVIII. Social responsibility
1. Performance of social responsibility
During the reporting period, the Company has been strictly in accordance with "Company Law", "Securities Law", "Articles ofAssociation" and other relevant laws and regulations, continues to improve governance structure and regulized operation. theCompany attaches importance to social responsibility, sustains attention to social create value, integrity management according to law,to provide consumers with safe and secure products, high-quality, green and healthy products to enhance the capacity for sustainabledevelopment and overall competitiveness; making efforts to improve management, enhance innovation capability and corecompetencies; the Company uphold a fair, just and open principles of treatment for all investors, with particular emphasis onsafeguarding the interests of minority shareholders; the Company strictly comply with national environmental laws and regulations,thoroughly implement green philosophy, strengthen ecological protection, comply with the overall development of the country andsociety, and strive to achieve economic and social benefits, short-term interests and long-term interests of their own development andsocial development, coordination, thus achieve healthy and harmonious development between the Company and the community, theCompany and the environment.
2. Execution of social responsibility of targeted poverty alleviation
(1) Plan of targeted poverty alleviation
2020 was the final year of a decisive battle against poverty and a decisive victory over a well-off society in an all-round way. Underthe guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for the New Era, SZCH continued to carry outtargeted poverty alleviation work in Guilin Village, Yidu Town, Longchuan County, Heyuan City. According to the document spirit ofthe "Implementation Opinions on the Three-year Hard Working at Targeted Poverty Alleviation in the New Era" (Yuefa [2016] No.
13) of Guangdong Provincial Party Committee and Provincial Government, the overall goals of Guilin Village’s targeted povertyalleviation are, firstly, to consolidate the results of poverty alleviation, refuse to return to poverty due to education and illness;secondly, to visit and solve the actual difficulties of poor households; thirdly, to further strengthen the industrial assistance; fourthly,to improve the infrastructure construction to ensure the acceptance of the new villager service center and the purchase of officesupplies.
(2) Summary of annual targeted poverty alleviation
In 2020, SZCH invested 641,500 yuan of poverty alleviation funds (excluding consolation money and material discounts) tostrengthen industrial assistance, promote education and poverty alleviation, and solve the actual difficulties of poor households, fullyimplemented epidemic prevention and control measures, achieved both epidemic prevention and control and targeted povertyalleviation at the same time. Performance and effects were as follows:
Firstly, in terms of epidemic prevention and control, set up epidemic prevention and control checkpoints in Guilin Village topropagate epidemic prevention and control knowledge to villagers, enhance their awareness of epidemic prevention and control, anddonated epidemic prevention and control materials to Guilin Village to promote the establishment of tight line of defense of groupprevention and control in Guilin Village.
Secondly, in terms of industrial assistance, we successfully applied for a special fund of 380,000 yuan from Shenzhen to help Heyuan,and invested all shares in Nanyuewang Ecological Agriculture Development Co., Ltd. in the form of share dividends agreed in thecontract. The project was expected to achieve a fixed dividend of 38,000 yuan per year. Took measures to expand sales channels andcarried out consumption poverty alleviation activities. In 2020, more than 490 kilograms of Guilin tea were sold throughconsumption poverty alleviation, and the sales amount reached 118,000 yuan. The village secretary appeared on the Heyuan TVstation to endorse the tea industry in Guilin village and help Guilin tea open up the market. Under the leadership of the municipalSASAC, tea products for poverty alleviation appeared in the 8th China Charity Fair and 2020 China (Shenzhen) Tea Expo, whichfurther enhanced the brand awareness.
Thirdly, in terms of teaching aids, assisted children of poor households in applying for bursaries to reduce their burden on schooling,and upgraded the sports facilities of Guilin Primary School.
The fourth was to solve the practical difficulties of poor households and reduce the burden of treatment for severely ill of poorhouseholds. Expended 3,000 yuan from the company’s project budget for medical subsidies, and applied for critical illness medicalassistance for them, and mobilized company employees to donate about 29,000 yuan to them.
Fifthly, in terms of improving infrastructure construction, the newly-built villager service center integrating party and governmentaffairs, village affairs, cultural services, and villagers’ recreation has completed the acceptance check and officially put it into use,making it easier for villagers to do things and have higher satisfaction.
(3) Performance of targeted poverty alleviation
| Target | Measurement unit | Numbers/ implementation |
| i. Overall | —— | —— |
| Including: 1. fund | 10 thousand yuan | 64.15 |
| 2. Material discount | 10 thousand yuan | 18.3 |
| 3.number of poverty-stricken population eliminating poverty with card for archives established | Person | 140 |
| ii. Invested by specific project | —— | —— |
| 1.Industrial development poverty | —— | —— |
| Including: 1.1 Type | —— | Poverty Alleviation by Asset Income |
| 1.2 numbers of industrial development poverty | Number | 0 |
| 1.3 Amount input | 10 thousand yuan | 0 |
| 1.4 number of poverty-stricken population eliminating poverty with card for archives established | Person | 0 |
| 2.Transfer employment | —— | —— |
| Including: 2.1 Amount input for vocation skills training | 10 thousand yuan | 0 |
| 2.2 Number of vocation skills training | Person-time | 0 |
| 2.3 Number of poverty-stricken population achieving employment with card for archives established | Person | 0 |
| 3.Relocation the poor | —— | —— |
| Including: 3.1 Number of employed persons from relocated households | Person | 0 |
| 4.Education poverty | —— | —— |
| Including: 4.1 Amount input for subsidizing the impoverished students | 10 thousand yuan | 0 |
| 4.2 Number of subsidized poor student s | Person | 0 |
| 4.3 Amount input for improving the education resources in poverty-stricken areas | 10 thousand yuan | 1.62 |
| 5.Health poverty alleviation | —— | —— |
| Including: 5.1 Amount input for medical and health resources in poverty-stricken areas | 10 thousand yuan | 0.3 |
| 6.Ecological protection and poverty alleviation | —— | —— |
| Including: 6.1 Type | —— | Carry out ecological protection and construction |
| 6.2 Amount input | 10 thousand yuan | 1.93 |
| 7.Fallback protection | —— | —— |
| Including: 7.1 Amount input for Three Stay Behind persons | 10 thousand yuan | 0 |
| 7.2 Number of Three Stay Behind persons help | Person | 0 |
| 7.3 Amount input for poor disabled persons | 10 thousand yuan | 0 |
| 7.4 Number of poor disabled persons help | Person | 0 |
| 8.Social poverty alleviation | —— | —— |
| Including: 8.1 Amount of the poverty alleviation cooperation between the Eastern and Western regions | 10 thousand yuan | 0 |
| 8.2 Amount for targeted poverty alleviation | 10 thousand yuan | 0 |
| 8.3 Amount for the poverty alleviation public welfare fund | 10 thousand yuan | 0 |
| 9.Other | —— | —— |
| Including: 9.1. number of items | Number | 7 |
| 9.2.Amount input | 10 thousand yuan | 60.29 |
| 9.3.number of poverty-stricken population eliminating poverty with card for archives established | Person | 140 |
| iii. Awards (content and grade) | —— | —— |
(4) Follow-up of targeted poverty alleviation
In 2021, SZCH will continue to be guided by Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era and onthe basis of relevant poverty alleviation policies of governments at all levels, concentrate its efforts, strengthen measures,comprehensively consolidate the achievements of poverty alleviation, and promote the development of Guilin Village. The plan is asfollows:
The first is to adhere to the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era to implementvarious poverty alleviation work and the development of grassroots party building work.
The second is to consolidate and improve the results of poverty alleviation, prevent poor households from returning to poverty due to
disasters and illness, and ensure high-quality poverty alleviation.
The third is to do a good job of linking targeted poverty alleviation with rural revitalization based on actual conditions.
3. Environmental protection
The listed Company and subsidiaries is in the range of heavy pollution industry that regulated by State environment protectiondepartments
□Yes √No
NoThe company attached great importance to environmental protection work, and each subsidiary has built correspondingenvironmental protection facilities according to the actual situation of production and operation to treat waste gas, dust, waste waterand solid waste generated in the production process, so as to make its emissions reach the national and local relevant standards. Atthe same time, based on its own business characteristics, the company’s subsidiaries have formulated a series of rules and regulationson environmental protection and strictly implemented them to institutionalize and standardize the environmental protection.
XIX. Explanation on other significant events
√ Applicable □Not applicable
1. Personnel changes in BOD, BOS and senior managements
(1) The Proposal on Appointment of Deputy GM of the Company is deliberated and approved by the 8
th session of 10
th
BOD dated 28February 2020, and agreed to appointed M. Xiao Hui as the Deputy GM of the Company, term of office shall be from the date ofapproval by the BOD until the expiration of the 10
th
session of the BOD. Found more in the Resolution of 8
th
session of 10
thBODand Notice on Appointment of the Deputy GM published on Juchao Website (www.cninfo.com.cn) dated 29 February 2020.
(2) On 18 June 2020, the written resignation report was received by the Company from Deputy GM Mr. Cao Xuelin and secretary ofthe Board Mr. Du Jianguo. For work transfer, Mr. Cao Xuelin applied to resign from the deputy GM of the Copany and Mr. DuJianguo applied to resign from the secretary of the Board. Found more in the Notice of Resignation from Senior Executive of theCompany published on Juchao Website (www.cninfo.com.cn) dated 19 June 2020.
(3) The Proposal on Appointment of Deputy GM of the Company and Secretary of the Board was deliberated and approved by 10
th
session of 10
thBOD dated 24 August 2020, and agreed to appointed Mr. Chen Xiaohua as the Deputy GM and Secretary of the Boardof the Company, term of office shall be from the date of approval by the BOD until the expiration of the 10
thsession of the BOD.Found more in the Resolution of 10
th session of 10
thBOD and Notice on Appointment of the Deputy GM and Secretary of the Boardpublished on Juchao Website (www.cninfo.com.cn) dated 25 August 2020.
XX. Significant event of subsidiary of the Company
√ Applicable □Not applicable
1.Capital increase to subsidiaries
The Proposal on Capital Increase to Controlling Subsidiary Shenzhen Hualian Grain & Oil Trade Co., ltd was deliberated andapproved by the 10
th session of 10
thBOD held on 24 August 2020, and agreed the first-tier wholly-owned subsidiary ShenzhenCereals Group Co., Ltd increased capital of 68.82 million yuan to the second-tier wholly-owned subsidiary Shenzhen Hualian Grain
& Oil Trade Co., ltd with owned funds. Found more in the Resolution of 10
th session of 10
th
BOD and Capital Increment toWholly-owned Subsidiary Shenzhen Hualian Grain & Oil Trade Co., ltd. Published on Juchao Website (www.cninfo.com.cn) dated25 August 2020.
Section VI. Changes in Shares and Particulars about
ShareholdersI. Changes in Shares
1. Changes in shares
In Share
| Before the Change | Increase/Decrease in the Change (+, -) | After the Change | |||||||
| A mount | Proportion | New shares issued | Bonus shares | Capitalization of public reserve | Others | Subtotal | A mount | Proportion | |
| I. Restricted shares | 684,569,567 | 59.40% | 0 | 0 | 0 | 31,575 | 31,575 | 684,601,142 | 59.40% |
| 1. State-owned shares | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
| 2. State-owned corporate shares | 684,569,567 | 59.40% | 0 | 0 | 0 | 0 | 0 | 684,569,567 | 59.40% |
| 3. Other domestic shares | 0 | 0.00% | 0 | 0 | 0 | 31,575 | 31,575 | 31,575 | 0.00% |
| Including: Domestic legal person’s shares | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
| Domestic nature person’s shares | 0 | 0.00% | 0 | 0 | 0 | 31,575 | 31,575 | 31,575 | 0.00% |
| 4. Foreign shares | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
| Including: Foreign corporate shares | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
| overseas nature person’s share | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
| II. Un-restricted shares | 467,965,687 | 40.60% | 0 | 0 | 0 | -31,575 | -31,575 | 467,934,112 | 40.60% |
| 1. RMB common shares | 416,216,407 | 36.11% | 0 | 0 | 0 | -31,575 | -31,575 | 416,184,832 | 36.11% |
| 2. Domestically listed foreign shares | 51,749,280 | 4.49% | 0 | 0 | 0 | 0 | 0 | 51,749,280 | 4.49% |
| 3. Foreign listed foreign shares | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
| 4. Other | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
| III. Total shares | 1,152,535,254 | 100.00% | 0 | 0 | 0 | 0 | 0 | 1,152,535,254 | 100.00% |
Reasons for share changed
□ Applicable √ Not applicable
Approval of share changed
□ Applicable √ Not applicable
Ownership transfer of share changed
□ Applicable √ Not applicable
Progress of shares buy-back
□ Applicable √Not applicable
Implementation progress of the reduction of repurchases shares by centralized bidding
□ Applicable √Not applicable
Influence on the basic EPS and diluted EPS as well as other financial indexes of net assets per share attributable to commonshareholders of Company in latest year and period
□ Applicable √ Not applicable
Other information necessary to disclose or need to disclosed under requirement from security regulators
□ Applicable √ Not applicable
2. Changes of restricted shares
√ Applicable □Not applicable
In Share
| Shareholders’ name | Number of shares restricted at Period-begin | Number of shares released in the Year | Number of new shares restricted in the Year | Number of shares restricted at Period-end | Restriction reasons | Released date |
| Ye Qingyun | 0 | 0 | 31,575 | 31,575 | Executives lock stocks | - |
| Total | 0 | 0 | 31,575 | 31,575 | -- | -- |
II. Securities issuance and listing
1. Security offering (without preferred stock) in the report period
□ Applicable √Not applicable
2. Changes of total shares and shareholders structure as well as explanation on changes of assets andliability structure
□ Applicable √Not applicable
3. Existing internal staff shares
□ Applicable √Not applicable
III. Particulars about shareholder and actual controller of the Company
1. Number of shareholders and particulars about shares holding
In Share
| Total common stock shareholders in reporting period-end | 60,874 | Total common stock shareholders at end of last month before annual report disclosed | 57,980 | Total preference shareholders with voting rights recovered at end of reporting period (if applicable) (found in note8) | 0 | Total preference shareholders with voting rights recovered at end of last month before annual report disclosed (if applicable) (found in note8) | 0 | ||||||
| Particulars about shares held above 5% by shareholders or top ten shareholders | |||||||||||||
| Full name of Shareholders | Nature of shareholder | Proportion of shares held | Total shares hold at the end of report period | Changes in report period | Amount of restricted shares held | Amount of un-restricted shares held | Number of share pledged/frozen | ||||||
| State of share | Amount | ||||||||||||
| Shenzhen Food Materials Group Co., Ltd | State-owned legal person | 63.79% | 735,237,253 | 0 | 669,184,735 | 66,052,518 | |||||||
| Shenzhen Agricultural Products Group Co., Ltd | State-owned legal person | 8.23% | 94,832,294 | 0 | 15,384,832 | 79,447,462 | |||||||
| Hong Kong Securities Clearing Company Limited | Foreign legal person | 0.61% | 7,004,086 | 6,147,160 | 0 | 7,004,086 | |||||||
| Lin Junbo | Domestic nature person | 0.31% | 3,566,700 | 1,082,250 | 0 | 3,566,700 | |||||||
| Sun Huiming | Domestic nature person | 0.30% | 3,436,462 | 0 | 0 | 3,436,462 | |||||||
| Chen Jiuyang | Domestic nature person | 0.24% | 2,744,700 | 2,744,700 | 0 | 2,744,700 | |||||||
| Xu Wenxing | Domestic nature person | 0.18% | 2,050,380 | 1,729,835 | 0 | 2,050,380 | ||||
| Hu Xiangzhu | Domestic nature person | 0.14% | 1,563,000 | -1,237,000 | 0 | 1,563,000 | ||||
| Central Huijin Asset Management Co., Ltd. | State-owned legal person | 0.13% | 1,472,625 | 0 | 0 | 1,472,625 | ||||
| Benxi Longshanquan Beer Co., Ltd. | Domestic non-state legal person | 0.10% | 1,200,000 | 1,200,000 | 0 | 1,200,000 | ||||
| Strategy investors or general corporation comes top 10 common shareholders due to rights issue (if applicable) (see note 3) | N/A | |||||||||
| Explanation on associated relationship among the aforesaid shareholders | Shenzhen SASAC directly holds 100% equity of Shenzhen Food Materials Group Co., Ltd., and holds 34% of Shenzhen Agricultural Products Group Co., Ltd. indirectly through Shenzhen Food Materials Group Co., Ltd.; the Company was not aware of any related relationship between other shareholders above, and whether they belonged to parties acting in concert as defined by the Acquisition Management Method of Listed Company. | |||||||||
| Description of the above shareholders in relation to delegate/entrusted voting rights and abstention from voting rights. | N/A | |||||||||
| Particular about top ten shareholders with un-restrict shares held | ||||||||||
| Shareholders’ name | Amount of un-restrict shares held at Period-end | Type of shares | ||||||||
| Type | Amount | |||||||||
| Shenzhen Agricultural Products Group Co., Ltd | 79,447,462 | RMB common shares | ||||||||
| Shenzhen Food Materials Group Co., Ltd | 66,052,518 | RMB common shares | ||||||||
| Hong Kong Securities Clearing Company Limited | 7,004,086 | RMB common shares | 7,004,086 | |||||||
| Lin Junbo | 3,566,700 | RMB common shares | 3,566,700 | |||||||
| Sun Huiming | 3,436,462 | Domestically listed foreign shares | 3,436,462 | |||||||
| Chen Jiuyang | 2,744,700 | RMB common shares | 2,744,700 | |||||||
| Xu Wenxing | 2,050,380 | RMB common shares | 2,050,380 |
| Hu Xiangzhu | 1,563,000 | RMB common shares | 1,563,000 |
| Central Huijin Asset Management Co., Ltd. | 1,472,625 | RMB common shares | 1,472,625 |
| Benxi Longshanquan Beer Co., Ltd. | 1,200,000 | RMB common shares | 1,200,000 |
| Expiation on associated relationship or consistent actors within the top 10 un-restrict shareholders and between top 10 un-restrict shareholders and top 10 shareholders | Shenzhen SASAC directly holds 100% equity of Shenzhen Food Materials Group Co., Ltd., and holds 34% of Shenzhen Agricultural Products Group Co., Ltd. indirectly through Shenzhen Food Materials Group Co., Ltd.; the Company was not aware of any related relationship between other shareholders above, and whether they belonged to parties acting in concert as defined by the Acquisition Management Method of Listed Company. | ||
| Explanation on top 10 shareholders involving margin business (if applicable) (see note 4) | N/A | ||
Whether top ten common stock shareholders or top ten common stock shareholders with un-restrict shares held have a buy-backagreement dealing in reporting period
□ Yes √ No
The top ten common stock shareholders or top ten common stock shareholders with un-restrict shares held of the Company have nobuy-back agreement dealing in reporting period.
2. Controlling shareholder of the Company
Nature of controlling shareholders: local state-owned holdingType of controlling shareholders: legal person
| Controlling shareholders | Legal person/person in charge of the unit | Date of foundation | Organization code | Main operation business |
| Shenzhen Food Materials Group Co., Ltd | He Jianfeng | December 14, 2017 | 91440300MA5EWWPXX2 | The general business projects are: food safety infrastructure construction (including the upgrading of the farmers ’market, the upgrading of public places canteens, the construction of community cooked food centers, and the construction of agricultural product bases); safe food circulation and terminal sales; the establishment of food distribution channel platforms; Food industry investment and operation (Including the M & A investment of the core resources of the food industry chain and the cultivation of enterprises in the future direction); Domestic trade (excluding franchised, |
| monopolized, and exclusively controlled commodities); engaging in import and export business (except for items prohibited by laws, administrative regulations, and the State Council, restricted items can only be operated after obtaining permission); online business activities (excluding restricted items). Licensed business items are food sales and supply business; emergency material production and operation; production, purchase and sale of I, II and III medical devices; pharmaceutical wholesale; ordinary freight, professional transportation, warehousing and logistics. | ||
| Equity of other domestic/oversea listed Company control by controlling shareholder as well as stock-joint in report period | In addition to holding 63.79% equity of the company, Food Materials Group holds 34% equity of Agricultural Products. | |
Changes of controlling shareholders in reporting period
□ Applicable √Not applicable
The controlling shareholder of the company has not changed during the reporting period.
3. Actual controller and persons acting in concert
Nature of actual controller: local state-owned assets managementType of actual controller: legal person
| Actual controller | Legal person/person in charge of the unit | Date of foundation | Organization code | Main operation business |
| Shenzhen Municipal People’s Government State-owned Assets Supervision & Administration Commission | Yu Gang | April 2, 2004 | 11440300K317280672 | State-owned assets supervision and management |
| Equity of other domestic/foreign listed Company controlled by actual controller in reporting period | - | |||
Changes of actual controller in reporting period
□ Applicable √Not applicable
No changes of actual controllers for the Company in reporting period.Property right and controlling relationship between the actual controller and the Company is as follow:
Actual controller controlling the Company by entrust or other assets management
□ Applicable √Not applicable
4. Particulars about other legal person shareholders with over 10% shares held
□ Applicable √Not applicable
5. Limitation and reducing the holdings of shares of controlling shareholders, actual controllers,restructuring side and other commitment subjects
□ Applicable √Not applicable
Section VII. Preferred Stock
□ Applicable √ Not applicable
The Company had no preferred stock in the Period.
Section VIII. Convertible Bonds
□ Applicable √ Not applicable
The Company had no convertible bonds in the Period.
Section IX. Particulars about Directors, Supervisors, Senior
Executives and EmployeesI. Changes of shares held by directors, supervisors and senior executives
| Name | Title | Post-holding status | Sex (F/M) | Age | Start dated of office term | End date of office term | Shares held at period-begin (Share) | Increasing shares held in this period (Share) | Decreasing shares held in this period (Share) | Other changes (share) | Shares held at period-end(Share) |
| Zhu Junming | Party Secretary, Chairman | Currently in office | M | 57 | February 21, 2019 | February 21, 2022 | 0 | 0 | 0 | 0 | 0 |
| Hu Xianghai | Deputy Party Secretary, Director, GM | Currently in office | M | 56 | February 21, 2019 | February 21, 2022 | 0 | 0 | 0 | 0 | 0 |
| Lu Qiguang | Deputy Party Secretary, Director | Currently in office | M | 58 | February 21, 2019 | February 21, 2022 | 0 | 0 | 0 | 0 | 0 |
| Jin Zhenyuan | Director, CFO | Currently in office | F | 49 | February 21, 2019 | February 21, 2022 | 0 | 0 | 0 | 0 | 0 |
| Zhao Rubing | Independent director | Currently in office | M | 64 | February 21, 2019 | February 21, 2022 | 0 | 0 | 0 | 0 | 0 |
| Bi Weimin | Independent director | Currently in office | F | 64 | February 21, 2019 | February 21, 2022 | 0 | 0 | 0 | 0 | 0 |
| Liu Haifeng | Independent director | Currently in office | M | 49 | February 21, 2019 | February 21, 2022 | 0 | 0 | 0 | 0 | 0 |
| Wang Li | Director | Currently in office | M | 59 | May 15, 2018 | February 21, 2022 | 0 | 0 | 0 | 0 | 0 |
| Ni Yue | Director | Currently in office | F | 46 | May 15, 2018 | February 21, 2022 | 0 | 0 | 0 | 0 | 0 |
| Wang Huimin | SCID, Chairman of supervisory committee | Currently in office | F | 53 | May 15, 2018 | February 21, 2022 | 0 | 0 | 0 | 0 | 0 |
| Liu Ji | Supervisor | Currently in office | M | 46 | February 21, 2019 | February 21, 2022 | 0 | 0 | 0 | 0 | 0 |
| Qian Wenying | Supervisor | Currently in office | F | 48 | February 21, 2019 | February 21, 2022 | 0 | 0 | 0 | 0 | 0 |
| Zheng Shengqiao | Staff supervisor | Currently in office | M | 53 | February 21, 2019 | February 21, 2022 | 0 | 0 | 0 | 0 | 0 |
| Ma Zenghai | Staff supervisor | Currently in office | M | 56 | July 29, 2019 | February 21, 2022 | 0 | 0 | 0 | 0 | 0 |
| Chen Xiaohua | Deputy General Manager, Secretary of the Board of Directors | Currently in office | M | 55 | August 24, 2020 | February 21, 2022 | 0 | 0 | 0 | 0 | 0 |
| Xiao Hui | Deputy GM | Currently in office | M | 43 | February 28, 2020 | February 21, 2022 | 0 | 0 | 0 | 0 | 0 |
| Dai Bin | Deputy GM | Currently in office | M | 57 | February 21, 2019 | February 21, 2022 | 0 | 0 | 0 | 0 | 0 |
| Meng Xiaoxian | Deputy GM | Currently in office | M | 48 | September 11, 2019 | February 21, 2022 | 0 | 0 | 0 | 0 | 0 |
| Cao Xuelin | Former Deputy GM | Office-leaving | M | 56 | February 21, 2019 | June 18, 2020 | 0 | 0 | 0 | 0 | 0 |
| Du Jianguo | Former Secretary of the Board | Office-leaving | M | 48 | August 23, 2019 | June 18, 2020 | 0 | 0 | 0 | 0 | 0 |
| Total | -- | -- | -- | -- | -- | -- | 0 | 0 | 0 | 0 | 0 |
II. Changes of directors, supervisors and senior executives
√ Applicable □Not applicable
| Name | Title | Type | Date | Reasons |
| Xiao Hui | Deputy General Manager | Appoint | February 28, 2020 | Appointment to the Board of Directors |
| Cao Xuelin | Deputy General Manager | Dismissal | June 18, 2020 | Job transfer |
| Du Jianguo | Secretary of the Board | Dismissal | June 18, 2020 | Job transfer |
| Chen Xiaohua | Deputy General Manager, Secretary of the Board of Directors | Appoint | August 24, 2020 | Appointment to the Board of Directors |
III. Post-holding
Professional background, major working experience and present main responsibilities in Company of directors, supervisors andsenior executive(i) DirectorMr. Zhu Junming: was born in 1964, master’s degree and a senior economist. He successively served as cadet and cadre of Air ForceRadar Institute; cadres of organs directly under Hubei Province; GM and President of the enterprise under Shenzhen AgriculturalProducts Group Co., Ltd; the Director, assistant GM, deputy GM, GM and deputy party secretary of Agricultural Products; partysecretary and president of Shenzhen Cereals Group Co., Ltd; executive director and GM of Shenzhen Fude State Capital OperationCo., Ltd. Now he serves as party secretary and President of the Company.
Mr. Hu Xianghai: was born in 1964, master’s degree and a senior economist. He successively served as the lecturer of ShenzhenInstitute of Education; director of general office of Asia Branch of the Shenzhen Huale Industrial Co., Ltd.; director of the ShenzhenEnterprise Management Cadre Training Center; deputy secretary general and office director of the Secretarial Shenzhen Associationof Enterprise Management and Shenzhen Association of Chinese and Foreign Entrepreneurs; director of development dept. anddirector of the marketing management dept. of Shenzhen Special Economic Zone Duty-Free Commodity Enterprise Company; GMof Temian Electronic Technology Professional Market Management Co., Ltd.; assistant to the GM and GM of enterprise dept., GM,deputy secretary of the party committee, director and GM of Shenzhen Agricultural Products Co., Ltd; served as the president ofShenzhen South Agricultural Products Logistics Co., Ltd. while take post as assistant to the deputy GM, and the president ofShenzhen Qianhai Agricultural Products Exchange Co., Ltd; deputy secretary of the party committee, director and GM of ShenzhenCereals Group Co., Ltd. Now he serves as deputy secretary of the party committee, director and GM of the Company.
Mr. Lu Qiguang: born in 1962, a university graduate, an assistant economist. He successively served as the clerk and deputy chief ofthe Grain Bureau of Boluo County; an office staff and deputy director of Shenzhen Grain Co., Ltd.; the deputy director of office,assistant GM and deputy GM of Shenzhen Cereals Corporation; a member of the party committee, deputy GM, deputy partysecretary and director of Shenzhen Cereals Group Co., Ltd, and the president of Shenzhen Flour Co., Ltd. Now he serves as thedeputy secretary of the party committee and director of the Company.
Ms. Jin Zhenyuan: born in 1971, master’s degree and CPA and senior accountant. She successively served as director and CFO ofShenzhen Tongchan Group Co., Ltd.; the director and CFO of Shenzhen Textile (Holdings) Co., Ltd.; the director and CFO ofShenzhen Cereals Group Co., Ltd. Now she serves as the director and CFO of the Company and supervisor of ShenzhenState-Owned Duty Free Commodity (Group) Co., Ltd.
Mr. Wang Li: master’s degree and an accountant, was born in 1961. He successively served as assistant workers in ChengduLocomotive Factory; assistant workers in Xi’an Railway Branch; business manager, vice director of the financial department,director of capital division, deputy chief accountant, deputy GM, Director, deputy party secretary and GM of Shenzhen SEG GroupCo., Ltd.; director of Shenzhen Cereals Group Co., Ltd. now he serves director of the Company, full-time external director ofShenzhen SASAC, Director of Shenzhen Agricultural Products Group Co., Ltd
Ms. Ni Yue: a master’s degree and a senior accountant, was born in 1974. She successively served as general ledger accountant inShanghai Jingan Commercial & Trade Corporation; chief accounting in Shanghai Tailong Real Estate Co., Ltd.; finance officer inShanghai Baodi Property Co., Ltd; chief accountant in Shanghai Ruian Real Estate Co., Ltd and full-time supervisor in the enterprisedirectly under SASAC of Shanghai Pudong New District; director of Shenzhen Cereals Group Co., Ltd. now she serves director of
the Company, Director of Shenzhen Bus Group.
Mr. Zhao Rubin: born in 1956, a master’s degree and professor of engineering. He successively served as the director and secretaryof Gezhouba Station for EHVDC transmission from Gezhouba to Shanghai; director of office and director of foreign affairs office ofGezhouba Hydro-power Plant; the secretary of party group and GM of Huaneng South Development Company; party secretary andGM of Huaneng Real Estate Development Company; Director, deputy president, deputy party secretary of Great Wall Securities;president of Jingshun Great Wall Fund Management Co., Ltd.; deputy president of Sunshine Insurance Assets ManagementCorporation Limited; the outside director of Shenzhen Cereals Group Co., Ltd. Now he serves as independent director of theCompany; independent director of Bros Eastern Co., Ltd; independent director of Southwest Securities and independent director ofBosera Fund Management.
Ms. Bi Weimin: born in 1956, a doctoral candidate, and a senior accountant. She successively served as engineer of the GezhoubaPower Plant, assistant director and deputy director; deputy president and director of Three Gorges Finance Company; chiefeconomist and supervisor of China Yangtze Power Co., Ltd.; deputy chief accountant of China Three Gorges Corporation, themember of investment committee and director of asset finance dept. As well as the director of enterprise management dept and legalaffairs department. Now she serves as independent director of the Company.
Mr. Liu Haifeng: born in 1971, a doctoral student and a lawyer. He successively served as director of legal department of ShenzhenProperty Development (Group); the partner of Guangdong Xintong Laws Firm. Now he serves as independent director of theCompany and first-level partner of Guangdong Hancheng Laws Firm.
(ii) SupervisorMs. Wang Huimin: master’s degree and a intermediate economist, senior HR manager and has a lawyer’s qualification, was born in1967. She successively served as a legal adviser for Shenzhen Construction Group Co., Ltd, an economist, chairman of thecommittee of female employees, manager of HR department in Shenzhen Construction Investment Holding Co., Ltd; director of HRdepartment of Shenzhen Investment Holding Co., Ltd; Deputy GM of SZPRD; Director, Deputy party secretary, SCID and Chairmanof supervisory committee of Shenzhen Cereals Group Co., Ltd. Now she serves as SCID and Chairman of supervisory committee ofthe Company.
Mr. Liu Ji: born in 1975, master’s degree and a economist. He successively served as secretary of executive Board committee, GM ofIT Engineering departmnet, GM of administrative department, GM of enterprise management department and GM of investmentdepartment of Shenzhen International Holdings Limited; non executive director of Shenzhen Expressway Co., ltd.; the supervisor ofShenzhen Cereals Group Co., Ltd. Now he is the supervisor of the Company; the executive director, deputy GM and secretary of theBoard of Shenzhen Holdings Bay Area Development Co., Ltd.; the mediation expert of Shenzhen International Arbitration Court(Shenzhen Arbitration Commission).
Ms. Qian Wenying: born in 1972, holds a bachelor degree, a member of Association of Chartered Certified Accountants (ACCA), anda senior economist. She successively served as the office translator, secretary and researcher of project investment office in ShenzhenTagen Group Co., Ltd.; the assistant manager and manager of marketing department of Tagen Investment Development Co., Ltd., thedirector of office of the board and representative of security affairs of Shenzhen Tagen Group Co., Ltd; supervisor of ShenzhenCereals Group Co., Ltd. Now she serves as supervisor of the Company and director of policy research office of Shenzhen Metro.
Mr. Zheng Shengqiao, born in 1967, holds a bachelor degree and an intermediate accountant. He successively served as member of
the special representative office of the state audit administration in Guangzhou; deputy manager of accounting department of HongKong Yuehai Enterprise (Group) Co., Ltd; deputy GM of CTS Logistics; CFO of the AVSHD Technology Co., Ltd; the deputydirector of finance department, deputy director of enterprise management department, director of board office, deputy secretary ofdiscipline inspection commission, secretary of the BOS and director of discipline inspection and supervision office (office of BOS) ofthe Shenzhen Cereals Group Co., Ltd. Now he serves as the employee supervisor, deputy secretary of discipline inspectioncommission and director of discipline inspection and supervision office (office of BOS) of the Company.
Mr. Ma Zenghai: born in 1964, master’s degree and an intermediate economist, lecturer. He successively served as the generalrepresentative of Thailand project in Shenzhen Cereals Group Co., Ltd; president and GM of Shenzhen Hualian Grain & Oil TradeCo., ltd.; GM and secretary of the Party branch of Grease branch of Shenzhen Cereals Group Co., Ltd; head of the risk managementdepartment of Shenzhen Cereals Group Co., Ltd. Now he serves as employee supervisor and head of the risk management andinternal audit department of the company.
(iii) Senior executiveMr. Chen Xiaohua, born in 1966, holds a master's degree, is an economic manager. He served successively as chief of the secretarialsection, deputy director and director of the office of the board of directors, and secretary of the board, director, and vice president ofShenzhen Agricultural Products Group Co., Ltd., concurrently served as chairman of Guangxi Haijixing International Logistics Co.,Ltd., chairman of Tianjin Haijixing Agricultural Products Market Management Co., Ltd., and chairman of Tianjin HaijixingAgricultural Products Logistics Co., Ltd. He currently serves as deputy general manager and secretary of the board of the company.
Mr. Xiao Hui, born in 1978, holds a master's degree, is a master of finance and a master of business administration. He served as astaff member of the Personnel and Education Department, and a staff member, a deputy chief staff member, a chief staff member,deputy director, and director of the General Office of the People's Bank of China,; and the deputy head of the Nanshan DistrictPeople's Government. He currently serves as deputy general manager of the company. Mr. Dai Bin: born in 1964, master’s degreeand a senior engineer. He successively served as counselor of Radio Engineering Department of Huazhong University of Technologyand secretary of the Youth League Committee; an engineer and purchasing manager of Shenzhen Huada Electronic Co., Ltd; GM ofShenzhen Shengye Venture Electronics Co., Ltd; GM of Shenzhen Zhongnong E-commerce Co., Ltd; director of information,director and deputy GM of e-commerce center, deputy GM and GM of subordinate grain distribution center of Shenzhen CerealsGroup Co., Ltd. Now he serves as the deputy GM of the Company; executive director of Shenliang Doximi Business Co., Ltd.
Mr. Meng Xiaoxian: born in 1972, master’s degree. He successively served as cadres of Shenzhen Youth League School; member ofthe learning department of Shenzhen Municipal Committee of Communist Youth League, deputy director section of liaisondepartment, director section of liaison department, director section of office, deputy director of organization and publicity department,director of office, director of community and rights department; deputy director of Pingshan New Area Public Utilities Bureau anddirector of Planning and Land Supervision Bureau of Shenzhen; deputy secretary of Pingshan Working Committee and director ofPingshan Office, Pingshan New District, Shenzhen; secretary of Malian Working Committee and director of Malian Office, PingshanNew District, Shenzhen; secretary of the working committee of Malian Sub-district, Pingshan District, Shenzhen, director andsecretary of the working committee of Malian sub-district office of Communist Party of CHina. Now he serves as deputy GM of theCompany.
Post-holding in shareholder’s unit
√ Applicable□Not applicable
| Name | Name of shareholder’s units | Position | Start dated of office term | End date of office | Weather receiving |
| term | remuneration from shareholder’s units | ||||
| Wang Li | Shenzhen Agricultural Products Group Co., Ltd | Director | September 17, 2018 | Y | |
| Explanation on post-holding in shareholder’s unit | N/A | ||||
Post-holding in other unit
√ Applicable □Not applicable
| Name | Name of other units | Position | Start dated of office term | End date of office term | Weather receiving remuneration from other units |
| Jin Zhenyuan | Shenzhen State-Owned Duty Free Commodity (Group) Co., Ltd. | Supervisor | May 1, 2017 | N | |
| Ni Yue | Shenzhen Bus Group Co., Ltd. | Director | August 1, 2017 | Y | |
| Zhao Rubing | Bosera Funds Management Co., Ltd. | Director | December 1, 2017 | N | |
| Zhao Rubing | Southwest Securities Co., Ltd. | Independent director | March 1, 2017 | Y | |
| Zhao Rubing | Bros Eastern Co., Ltd. | Independent director | May 1, 2015 | Y | |
| Liu Haifeng | Guangdong Hancheng Law Firm | First-level partner | February 1, 2007 | Y | |
| Liu Ji | Shenzhen Holdings Bay Area Development Co., Ltd. | Executive Director, Deputy General Manager and Secretary of the Board | April 1, 2018 | Y | |
| Qian Wenying | Shenzhen Metro Group Co., Ltd. | Director of Policy Research Office | February 1, 2018 | Y | |
| Explanation on post-holding in other unit | N/A | ||||
Punishment of securities regulatory authority in recent three years to the Company’s current and outgoing directors, supervisors andsenior management during the reporting period
□ Applicable √Not applicable
IV. Remuneration for directors, supervisors and senior executivesDecision-making procedures, determination bases and actual payment of remunerations of directors, supervisors and seniormanagementDuring the reporting period, according to the Company Performance Management Measures, the Company's board meetingremuneration and appraisal committee combined with the Company's annual business situation and individual performance appraisalresult and determined the senior management personnel salary. During the reporting period, the subsidiary standard of independentdirectors is subject to the resolution by the 2019 Fifth Extraordinary General Meeting and adjusted as RMB 138,000 (tax included)per year for one person;Remuneration for directors, supervisors and senior executives in reporting period
In 10 thousand Yuan
| Name | Title | Sex | Age | Post-holding status | Total remuneration obtained from the Company | Whether remuneration obtained from related party of the Company |
| Zhu Junming | Party Secretary, President | M | 57 | Currently in office | 169.88 | N |
| Hu Xianghai | Deputy Party Secretary, Director, GM | M | 56 | Currently in office | 176.3 | N |
| Lu Qiguang | Deputy Party Secretary, Director | M | 58 | Currently in office | 157.87 | N |
| Jin Zhenyuan | Director, CFO | F | 49 | Currently in office | 50.1 | Y |
| Zhao Rubing | Independent director | M | 64 | Currently in office | 18.6 | N |
| Bi Weimin | Independent director | M | 64 | Currently in office | 18.6 | N |
| Liu Haifeng | Independent director | M | 49 | Currently in office | 18.6 | N |
| Wang Li | Director | M | 59 | Currently in office | 15.1 | Y |
| Ni Yue | Director | F | 46 | Currently in office | 15.1 | Y |
| Wang Huimin | SCID, Chairman of supervisory committee | F | 53 | Currently in office | 50.1 | Y |
| Liu Ji | Supervisor | M | 46 | Currently in office | 0 | N |
| Qian Wenying | Supervisor | F | 48 | Currently in office | 0 | N |
| Zheng Shengqiao | Staff supervisor | M | 53 | Currently in office | 114.28 | N |
| Ma Zenghai | Staff supervisor | M | 56 | Currently in office | 106.37 | N |
| Chen Xiaohua | Deputy General Manager, Secretary of the Board of Directors | M | 55 | Currently in office | 23.12 | Y |
| Xiao Hui | Deputy GM | M | 43 | Currently in office | 47.21 | N |
| Dai Bin | Deputy GM | M | 57 | Currently in office | 157.5 | N |
| Meng Xiaoxian | Deputy GM | M | 48 | Currently in office | 86.09 | N |
| Cao Xuelin | Former Deputy GM | M | 56 | Office-leaving | 125.18 | N |
| Du Jianguo | Former Secretary of the Board | M | 48 | Office-leaving | 96.45 | Y |
| Total | -- | -- | -- | -- | 1,446.45 | -- |
Delegated equity incentive for directors, supervisors and senior executives in reporting period
□ Applicable √Not applicable
V. Particulars of workforce
1. Number of Employees, Professional composition, Education background
| Employee in-post of the parent Company(people) | 113 |
| Employee in-post of main Subsidiaries (people) | 1,133 |
| The total number of current employees(people) | 1,246 |
| The total number of current employees to receive pay (people) | 1,246 |
| Retired employee’ s expenses borne by the parent Company and main Subsidiaries(people) | 1 |
| Professional composition | |
| Category of professional composition | Numbers of professional composition (people) |
| Production personnel | 487 |
| Salesperson | 148 |
| Technicians | 93 |
| Financial personnel | 113 |
| Administrative personnel | 405 |
| Total | 1,246 |
| Education background | |
| Education | Numbers (people) |
| Postgraduate | 124 |
| Undergraduate | 441 |
| 3-years regular college graduate | 262 |
| Polytechnic school graduate | 88 |
| Senior middle school graduate or below | 331 |
| Total | 1,246 |
2. Remuneration Policy
During the reporting period, employee wages was paid monthly according to salary management provisions set by the Company, andthe performance-related pay was issued based on the actual situation of benefit and individual performance assessment results at theyear-end, remuneration and benefit are connected as a whole.
3. Training Plan
SZCH fully draws on the excellent experience of the industry, and continues to improve the classification and grading talent trainingmechanism and system according to the company's strategic development and the needs of talent echelon construction, and recruitsfresh graduates from domestic and foreign key universities and colleges, reserve talents, and the company’s middle managementtalents as the main body of training, and carries out a series of talent training work such as "Youhe Plan" for the management trainingstudents , "Daoxiang Plan" for reserve talents and "Jinsui Plan" for key position talents, combines with the company’s managementinnovation, organizational innovation and marketing innovation development needs to continuously promote the development andgrowth of management and professional talents, and build a high-quality professional talent team with SZCH characteristics.
In 2021, we will continue to follow the strategic goal of "smart grain, oil and food supply chain quality service provider", combinethe strategic path of "one chain, two parks and N platforms" and the actual business conditions, and strive to enhance the supportingrole of human resource management for the company's strategy. Empower innovative talents, make full use of internal and external,online and offline resources, create a standardized curriculum system and empowerment plan for the employees, continue to promotethe systematization and professionalization of the company's training management, and further strengthen the implementation of thecompany's innovation-driven development and strategy of talents strengthening the company.
4. Labor outsourcing
□ Applicable√Not applicable
Section X. Corporate governanceI. Brief introduction of corporate governanceDuring the reporting period, the Company constantly improved the corporate governance structure, improved the quality of corporategovernance, and established a sound internal control system, strictly in accordance with corporate governance requirements ofnormative documents released by the “Company Law“,”Securities Law, Corporate Governance Guidelines“and”StandardizeOperational Guidelines to Main Board Listed Companies of Shenzhen Stock Exchange. The Company continued to carry out thegovernance activities, improved the standard operation level, and safeguarded the legitimate interests of the Company and investors.
(i) Accountability among Shareholders’ General Meeting, the Board of Directors and Supervisors were clear, we strictly implementedthe rules from the "Articles of Association" during the reporting period as well as work regulations and other basic managementsystem to ensure the effective implementation of the internal control system.
(ii) In reporting period, governance mechanism formulated and revised by the Company are as:
The company's internal control evaluation system has deliberated and approved in The Ninth Session of the Tenth Board of Directorsheld on 24 April 2020, found more in the announcement released on Juchao Website (www.cninfo.com.cn) dated 24 April 2020.Company risk management system has deliberated and approved in The Tenth Session of the Tenth Board of Directors held on 24August 2020, found more in the announcement released on Juchao Website (www.cninfo.com.cn) dated 31 January 2019.
The Company received no relevant documents with administrative regulation concerned from supervision department in reportingperiod, and has no particular about rectification within a time limit. From point of the Board, corporate governance of the Companyshows no difference to requirement from relevant documents with actual condition.Is there any difference between the actual condition of corporate governance and relevant regulations about corporate governance forlisted Company from CSRC?
□ Yes √ No
There are no differences between the actual condition of corporate governance and relevant regulations about corporate governancefor listed Company from CSRC.II. Independence of the Company in aspect of business, personnel, assets, institute and financerelative to its controlling shareholderBy the end of the reporting period, Food Group is the actual controller of the Company with 63.79 percent shares held. The Company,in strict accordance with the governance rules of listed corporate and other relevant provisions, completely separates from thecontrolling shareholders in business, finance, personnel, assets, organizations, and has independent full business and selfmanagement ability.
1. Independent Business:
The business of the Company is independent from controlling shareholders and has complete business and self management ability,not depends on the shareholders and their affiliated enterprises, which has no competition with controlling shareholder and itssubordinate enterprises. The controlling shareholder has no direct or indirect intervention in the Company business activities.
2. Independent Staff:
The Company has special organization to manage labor and payment, and has independent perfect personnel system and collectivemanagement system. General Manager of the Company as well s deputy GM, secretary of the Board, CFO and other seniorexecutives are received remuneration from the Company, and are not received remuneration from shareholders’ unit and subordinateenterprises and holding the post except director or supervisor.
3. Independent Assets:
The Company has independent and integrity asset structure; there is no controlling shareholder's non business occupation of moneyand the property.
4. Independent Organization:
The Company has set up a sound organizational structure system and operates independently; there is no mixed operation betweenthe Company and controlling shareholders.
5. Financial Independent:
The Company, with independent financial department, has set up independent accounting system and financial management systemand makes financial decision independently. With independent bank accounts, tax payment, the Company strictly follows thefinancial system and has independent operation and standardized management.III. Horizontal Competition
□ Applicable √Not applicable
IV. In the report period, the Company held annual general meeting and extraordinaryshareholders’ general meeting
1. Annual General Meeting in the report period
| Session of meeting | Type | Ratio of investor participation | Date | Date of disclosure | Index of disclosure |
| First extraordinary general meeting of 2020 | Extraordinary general meeting | 72.05% | January 16, 2020 | January 17, 2020 | Disclosed at www.cninfo.com.cn on No. 2020-01" resolutions Announcement to First extraordinary general meeting of 2020" on 17 January 2020 |
| Annual General Meeting of 2019 | AGM | 72.03% | May 19, 2020 | May 20, 2020 | Disclosed at www.cninfo.com.cn on No. 2020-15" resolutions Announcement to 2019 Annual General Meeting of Shenzhen Shenbao Industrial Co., |
| Ltd. " on 20 May 2020 | |||||
| Second extraordinary general meeting of 2020 | Extraordinary general meeting | 72.03% | November 13, 2020 | November 14, 2020 | Disclosed at www.cninfo.com.cn on No. 2020-27" resolutions Announcement to Second extraordinary general meeting of 2020" on 14 November 2020 |
2. Request for extraordinary general meeting by preferred stockholders whose voting rights restore
□ Applicable √Not applicable
V. Responsibility performance of independent directors
1. The attending of independent directors to Board meetings and general meeting
| The attending of independent directors | |||||||
| Name of independent director | Times of Board meeting supposed to attend in the report period | Times of Presence | Times of attending by communication | Times of entrusted presence | Times of Absence | Absent the Meeting for the second time in a row (Y/N) | Times of attending shareholders’ meeting |
| Zhao Rubing | 5 | 3 | 2 | 0 | 0 | N | 3 |
| Bi Weimin | 5 | 2 | 3 | 0 | 0 | N | 1 |
| Liu Haifeng | 5 | 2 | 2 | 1 | 0 | N | 2 |
Explanation of absent the Board Meeting for the second time in a row:
Nil
2. Objection for relevant events from independent directors
Independent directors come up with objection about Company’s relevant matters
□ Yes √ No
Independent directors has no objections for relevant events in reporting period
3. Other explanation about responsibility performance of independent directorsThe opinions from independent directors have been adopted
√ Yes □ No
Explanation on advice that accepted/not accepted from independent directorsDuring the reporting period, independent directors of the Company was in strict accordance with relevant laws from the "Articles ofAssociation", the "Company Law", "Guidance to Establishment of Independent Director System in Listed Companies ", and activelyattended board meetings, shareholders' meetings. We issued independent professional opinion for important issues. And we sustainedattention to the operating, inspected and guided the management work from time to time, learned about internal control system,implementation progress of the equity investment project, etc., and continue to enhance consciousness of performing dutiesaccording to law, express independent and impartial advice for investment outside, related party transactions, hiring auditors andother matters occurred during the reporting period in time. Duties performance of independent directors has improved the corporategovernance structure and safeguarded the interests of the Company and its shareholders. From performance of duties of IndependentDirectors please note from “2020 Annual Work Report of Independent Directors” detailed in www.cninfo.com.cn on disclosure.VI. Performance of Duties by Specialized Committees under the Board Meeting in theReporting Period
1. Performance of Duties by the Auditing Committee
In the reporting period, totally three meetings are held by auditing committee for annual report of the Company, Annual Report 2019,First Quarterly Report of 2020, semi-annual report 2020, the financial report of 3
rd
quarterly report 2020, proposals for internalcontrol defect identification standards, internal control evaluation system, internal control evaluation report, internal system workreport and annual review agency summary report etc.; and confirmed that the financial report satisfy requirement of Accounting rulesand present a fair and complete financial status, operation results and cash flow of the Company; examined the construction progressof internal control, carried a professional opinions for the auditing institution appointed outside the Company, guarantee theCompany finished auditing on schedule. Auditing committee of the Company earnestly following the principle of diligence and fullyplayed a supervisory role and maintained the independence of the audit.
2. Performance of Duties by the Remuneration and Appraisal Committee
During the reporting period, the Remuneration and Appraisal Committee of the Board of Directors held one meeting, according to theprovisions of the “Company Compensation Management Measures” and “Company Performance Management Measures”, listenedto the company management’s annual report of 2019 and evaluated it, and deliberated the remuneration of 2019 for the company’sdirectors and senior management personnel.
3. Performance of Duties by the Nomination Committee
During the reporting period, in accordance with relevant laws and regulations and the provision of Article of Association andRegulation of Nomination Committee of the Board, committee of the nomination has actively performed the duties and there is nocircumstance in which the Company Law and relevant laws and regulations prohibit the nominee from acting as a senior executivesof the listed company.
4. Performance of Duties by the Strategy Committee
During the reporting period, strategy committee of the Board actively participate in the discussion of important matters, carefullystudy and make valuable suggestions on matters such as strategy position, business development and investment acquisition etc, andplay an active role in the scientific decision-making of the Company.
VII. Works from Supervisory CommitteeWhether the Company has risks or not in reporting period that found in supervisory activity from supervisorycommittee
□ Yes √ No
The Supervisory Board has no objection to the supervision matters during the reporting period.
VIII. Appraisal and incentive mechanism for senior executivesThe performance evaluation of the company’s senior management personnel is comprehensively evaluated by the remuneration andappraisal committee under the company’s board of directors in accordance with the “Company Remuneration ManagementMeasures” and “Company Performance Management Measures” based on the company’s overall operating performance results andthe achieved status of management indicators in the year, and use this as the basis for senior management compensation adjustmentand rewards, and report to the board of directors and general meeting of shareholders for approval after implementation.
The 7th session of the 10
thboard of directors of the company and the first extraordinary general meeting of shareholders in 2020reviewed and approved the “Company’s Total Remuneration Decision Mechanism”, and agreed the company to establish thecompany’s total remuneration decision mechanism in accordance with relevant system requirements and combined with the “DoubleHundred Action” state-owned enterprises reform implementation plan and the actual situation of the enterprise. Based on excessvalue creation, established a salary mechanism by taking value creation as the guidance and incremental performance determiningincremental compensation, and realized the two-way link between employee income and corporate performance; with strategic goalsas the traction, established executive restraint and incentive mechanisms to fully reflect strategic guidance, which was conducive topromoting the continuous improvement of quality and efficiency of enterprises and achieving high-quality and sustainabledevelopment. In the follow-up, the company will further explore an effective incentive mechanism to fully mobilize the initiative andenthusiasm of the management, thereby promoting the company’s sustainable and stable development.IX. Internal control
1. Details of major defects in IC appraisal report that found in reporting period
□ Yes √ No
2. Self-appraisal Report of Internal Control
| Disclosure date of full internal control evaluation report | April 27, 2021 |
| Disclosure index of full internal control evaluation report | “Internal control self evaluation report of SHENZHEN CEREALS HOLDINGS CO., LTD. in 2020” published on Juchao Website (http：//www.cninfo.com.cn) |
| The ratio of the total assets of units included in the scope of evaluation accounting for the total assets on the Company's consolidated financial statements | 82.00% |
| The ratio of the operating income of units included in the scope of evaluation accounting for the operating income on the Company's consolidated financial statements | 91.00% | |
| Defects Evaluation Standards | ||
| Category | Financial Reports | Non-financial Reports |
| Qualitative criteria | 1. Major defects: Defect alone or together with other defects in a timely manner cause unpreventable or undetectable and uncorrectable material misstatement in the financial statements. The Company may indicate the presence of significant deficiencies in internal control over financial reporting if following circumstances: (1) The directors, supervisors and senior management fraud; (2) Enterprise corrected mistake which has been published in financial statements; (3) CPA found material misstatement in current financial statements, but internal control during operation failed to find the misstatements; (4) Oversight of internal control by Corporate Audit Committee and the internal audit is invalid; (5) Particularly important or significant deficiencies found during internal control has not been rectified; (6) The lack of business-critical system or invalid system. 2. Important defect: defect alone or together with other defects in a timely manner cause unpreventable or undetectable and uncorrectable material misstatement in the financial statements, although not reach and exceed the level of importance, should lead to management attention misstatements. 3. General Defects: other internal defects do not pose a significant or important defect control deficiency. | 1.Qualitative criteria for major defects are as follows: (1) The lack of democratic decision-making process, such as the lack of decision-making on major issues, an important appointment and dismissal of cadres, major investment decisions, large sums of money using the decision-making process; (2) Decision-making process is not scientific, such as major policy mistakes, resulting in significant property damage to the Company; (3) Serious violations of national laws and regulations; (4) Loss of key executives or loss of a large number of key talent; (5) Negative media news is frequent, And cause nationwide impact. 2. The qualitative criteria for important defects are as follows: (1) The decision-making process is not perfect; (2)The company’s internal management system has not been effectively implemented, resulting in losses; (3) The media’s negative news is frequent and has certain influence; (4) The general defects in the internal control evaluation have not been corrected. 3. General defects refer to other internal control defects that do not constitute major defects or important defects. |
| Quantitative standard | Major defects: Potential misstatement of total assets ≥ 1% of total assets; Potential misstatement of Operating revenue ≥ 1% of operating income; Potential misstatement of total profit≥ 5% of total profit. Important defects: 0.5% of total assets ≤ Potential misstatement of total assets <1% of total assets, 0.5% of operating income≤ Potential misstatement of Operating revenue <1% of operating income, 2.5% of total profit≤ Potential misstatement of total profit <5% of total profit; General Defects: Potential misstatement of total assets <0.5% of total capital; Potential misstatement of Operating revenue <0.5% of operating income; Potential misstatement of total profit <2.5% of total profit; | Major defects: the amount of direct property loss ≥ 12 million yuan, have been officially disclosed outside the Company disclosed in periodic reports and adversely affected. Important defects: 3 million yuan < the amount of direct property loss < 12 million yuan, punished by the state government but the Company disclosed in periodic reports on the negative impact; General defects: the amount of direct property loss ≤ 3 million yuan, punished by the provincial (including provincial) government but the Company disclosed in periodic reports on the negative impact; |
| Amount of significant defects in financial reports | 0 | |
| Amount of significant defects in non-financial reports | 0 | |
| Amount of important defects in financial reports | 0 | |
| Amount of important defects in non-financial reports | 0 | |
X. Audit report of internal control
√ Applicable□Not applicable
| Deliberations in Internal Control Audit Report | |
| BDO China Shu Lun Pan Certified Public Accountant LLP believes the Company was in accordance with the "basic norms of internal control" and the relevant provisions and maintained effective internal control of financial reporting in all material respects on 31 December 2020. | |
| Disclosure details of audit report of internal control | Disclosed |
| Disclosure date of audit report of | April 27, 2021 |
| internal control (full-text) | |
| Index of audit report of internal control (full-text) | “Internal control audit report of SHENZHEN CEREALS HOLDINGS CO., LTD. in 2020” published on Juchao Website (www.cninfo.com.cn) |
| Opinion type of auditing report of IC | Standard unqualified |
| Whether the non-financial report had major defects | No |
Whether modified audit opinions carried out for the audit report of internal control from CPA or not
□ Yes √ No
Whether audit report of internal control, issued by CPA, is in agreement with self-evaluation report, issued by the Board
√ Yes □ No
Section XI. Corporate BondWhether the Company has a corporation bonds that issuance publicly and listed on stock exchange and without due on the date whenannual report approved for released or fail to cash in full on dueNo
Section XII. Financial ReportI. Audit Report
| Type of audit opinion | Standard unqualified opinion |
| Signing date of audit report | April 23, 2021 |
| Name of audit institute | BDO China Shu Lun Pan Certified Public Accountant LLP |
| Document serial of audit report | BDO CPAs Zi[2021]No. ZL10086 |
| Name of the CPA | Qi Tao, Tao Guoheng |
Text of auditing reportAuditor’s Report
BDO CPAs Zi[2021]No. ZL10086
To all shareholders of SHENZHEN CEREALS HOLDINGS CO., LTD.:
I. Auditing opinionsWe have audited the financial statement under the name of SHENZHEN CEREALS HOLDINGS CO., LTD.(hereinafter referred to as SZCH Company), including the consolidated and parent Company’s balance sheet of 31December 2020 and profit statement, and cash flow statement, and statement on changes of shareholders’ equityfor the year ended, and notes to the financial statements for the year ended.
In our opinion, the Company’s financial statements have been prepared in accordance with the AccountingStandards for Business Enterprises, and they fairly present the financial status of the Company and of its parentcompany as of 31 December 2020 and its operation results and cash flows for the year ended.II. Basis of opinion
We conducted our audit in accordance with the Auditing Standards for Certified Public Accountants of China. Ourresponsibilities under those standards are further described in the “Auditor’s Responsibilities for the Audit of theFinancial Statements” section of the auditor’s report. We are independent of the Company in accordance with theCertified Public Accountants of China’s Code of Ethics for Professional Accountants, and we have fulfilled ourother ethical responsibilities in accordance with the Code. We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our opinion.III. Key audit mattersKey audit matters are those matters that, in our professional judgment, were of most significance in our audit ofthe financial statements of the current period. These matters were addressed in the context of our audit of thefinancial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion onthis matters. The key audit matters identified in our audit are summarized as follows:
| Key audit matters | How to deal with the matter in audit |
| （i）[Revenue recognition] |
| Details and analysis of accounting policy of revenue recognition found more in the (39) in Note V and (61) in VII of consolidated financial statements. SZCH implemented the new revenue standards since 1 Jan. 2020, and the revenue from sales of products is recognized when the customer obtains control of the related goods, and revenue from services is recognized when the performance obligation is completed; Operating revenue for 2020 is 11,884,257,500 yuan, including: the income from grain and oil business is 10,759,070,700 yuan, accounting for 90.53% of the operating revenue. The income from grain and oil business has a significant impact on the financial statement, and it is one of the key index of performance of SZCH, meanwhile, it is one of the important indicators of performance commitment performance assessment of the Shenzhen Cereals Group Co. Ltd- the wholly-owned subsidiary of SZCH, which has a special risks in manipulation for achieving the predicted target, therefore, the identify of operating income will be listed as the key auditing event. | The main audit procedures we implemented for the inventory and inventory falling price reserves include: (1) Understood, evaluated and tested the internal control design and implementation related to revenue recognition of SZCH Company; (2) check the main sales contracts, identify terms related to transfer of the main risks and rewards on the ownership of goods, and evaluate whether the revenue recognition policy conforms to the Accounting Standards for Business Enterprise; (3)carry out substantive analysis procedures for operating revenue and gross profit rate by month, products, etc., identify whether there is significant or abnormal fluctuation, and review the rationality of revenue; (4) we use sampling method to check the supporting documents related to revenue recognition, including sales contract, sales invoice, delivery order, goods right transfer document and accounting voucher, etc.; (5)in combination with the L/C receivable, confirm the sales volume of the current period to the main customers by sampling; (6)carry out a cut-off test on the business income recognized before and after the balance sheet date to assess whether the business income is recognized in the appropriate accounting period. |
| （ii）[Inventory and inventory falling price reserves] | |
| Details of accounting policy of inventory and inventory impairment found more in the (15) in Note V and (9) of consolidated financial statements. As of December 31, 2020, the inventory book balance presented on the consolidated financial statements of SZCH Company was 3551.2124 million yuan, and the amount of inventory falling price reserves was 132.8834 million yuan, book value of inventories was 3418.329 million yuan, accounting for 46.77% of the total assets. Inventory is measured at the lower one between the cost and the net realizable value, due to the large amount of money of inventory, the SZCH management (Hereinafter referred to as "management") needed to make significant | The main audit procedures we implemented for the inventory and inventory falling price reserves of SZCH Company include: (1) Understood, evaluated and tested the internal control design and implementation related to inventory falling price reserves of SZCH Company; (2) We performed the inventory monitoring procedures for inventory, and checked the quantity and condition; (3) Acquired the calculation table of inventory falling price reserve, implemented the inventory impairment test procedure, and analyzed whether provision for inventory falling price reserves was sufficient; (4) We obtained the |
| judgments when determining the decrease in value of inventory, including the consideration of government reserve as grain & oil, food and vegetable oil included, that affected by futures market, these important judgments have a significant impact on the valuation of inventory and provision for inventory depreciation at period-end; therefore, we determined the inventory and inventory falling price reserves as key audit matters. | year-end inventory age list, conducted an analytical review of the inventory with long inventory age combine with the condition of products, and analyzed whether inventory falling price reserves was sufficient; (5) For the products that can obtain the selling price in open market, select samples, independently query the public market price information and compare it with the estimated selling price. |
IV. Other informationThe management of SZCH Company is responsible for other information which includes the information coveredin the Company’s 2018 annual report excluding the financial statement and our audit report.
The audit opinion issued by us for the financial statement has not covered other information, for which we do notissue any form of assurance opinions.
Considering our audit on financial statements, we are liable to read other information, during which, we shallconsider whether other information differs materially from the financial statements or that we understand duringour audit, or whether there is any material misstatement.
Based on the works executed by us, we should report the fact if we find any material misstatement in otherinformation. In this regards, we have nothing to report.V. Responsibilities of management and those charged with governance for the financial statementsThe management of SZCH Company is responsible for the preparation of the financial statements in accordancewith the Accounting Standards for Enterprise to secure a fair presentation, and for the design, establishment andmaintenance of the internal control necessary to enable the preparation of financial statements that are free frommaterial misstatement, whether due to fraud or error.
In preparing the financial statements, the management is responsible for assessing the Company’s ability tocontinue as a going concern (if applicable), disclosing matters related to going concern and using the goingconcern assumption unless the management either intends to liquidate the Company or to cease operations, or hasno realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Company’s financial reporting process.VI. Responsibilities of the auditor for the financial statementsOur objectives are to obtain reasonable assurance about whether the financial statements as a whole are free frommaterial misstatement, whether due to fraud or error, and to issue an audit report that includes our audit opinion.Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance
with the CAS will always detect a material misstatement when it exists. Misstatements can arise from fraud orerror and are considered material if, individually or in the aggregate, they could reasonably be expected toinfluence the economic decisions of users taken on the basis of the financial statements.
As part of an audit in accordance with the CAS, we exercise professional judgment and maintain professionalskepticism throughout the audit. We also:
(1) Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error,design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient andappropriate to provide a basis for audit opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions,misrepresentations, or the override of internal control.
(2) Obtain an understanding of internal control relevant to the audit in order to design audit procedures that areappropriate in the circumstances
(3) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates andrelated disclosures made by the management.
(4) Conclude on the appropriateness of the management’s use of the going concern assumption and, based on theaudit evidence obtained, whether a material uncertainty exists related to events or conditions that may castsignificant doubt on the Company’s ability to continue as a going concern. If we conclude that a materialuncertainty exists, we are required by the CAS to draw users’ attention in audit report to the related disclosures inthe financial statements or, if such disclosures are inadequate, to modify audit opinion. Our conclusions are basedon the information obtained up to the date of audit report. However, future events or conditions may cause theCompany to cease to continue as a going concern.
(5) Evaluate the overall presentation, including the disclosures, structure and content of the financial statementsand whether the financial statements represent the underlying transactions and events in a manner that achievesfair presentation.
(6) Obtain sufficient appropriate audit evidence regarding the financial information of the entities or businessactivities within the Company to express audit opinion on the financial statements. We are responsible for thedirection, supervision and performance of the group audit. We remain solely responsible for audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope andtiming of the audit and significant audit findings, including any significant deficiencies in internal control that weidentify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethicalrequirements regarding independence, and communicate with them all relationships and other matters that mayreasonably be thought to bear on our independence, and relevant countermeasures (if applicable).
From the matters communicated with those charged with governance, we determine those matters that were ofmost significance in the audit of the financial statements of the current period and are therefore the key auditmatters. We describe these matters in the auditor’s report unless law or regulation precludes public disclosureabout the matter or when, in extremely rare circumstances, we determine that a matter should not becommunicated in the auditor’s report because of the adverse consequences of doing so would reasonably beexpected to outweigh the public interest benefits of such communication.
BDO China Shu Lun Pan CPAs Chinese CPA：Qi Tao (Engagement partner)(LLP)
Chinese CPA: Tao Guoheng
Shanghai· China 23 April 2021II. Financial StatementStatement in Financial Notes are carried in RMB/CNY
1. Consolidated balance sheet
Prepared by SHENZHEN CEREALS HOLDINGS CO., LTD.
In RMB
| Item | December 31, 2020 | December 31, 2019 |
| Current assets: | ||
| Monetary funds | 190,494,225.94 | 154,954,757.85 |
| Settlement provisions | ||
| Capital lent | ||
| Trading financial assets | 160,621,806.51 | 1,166,209.72 |
| Derivative financial assets | ||
| Note receivable | 2,213,426.00 | 1,909,720.38 |
| Account receivable | 198,311,102.17 | 338,687,766.68 |
| Receivable financing | ||
| Accounts paid in advance | 27,136,263.84 | 9,202,930.71 |
| Insurance receivable | ||
| Reinsurance receivables | ||
| Contract reserve of reinsurance receivable | ||
| Other account receivable | 22,631,043.66 | 25,758,695.07 |
| Including: Interest receivable | ||
| Dividend receivable | ||
| Buying back the sale of financial assets | ||
| Inventories | 3,418,328,974.27 | 3,064,701,212.14 |
| Contractual assets | ||
| Assets held for sale | ||
| Non-current asset due within one year | ||
| Other current assets | 119,750,603.31 | 468,174,380.40 |
| Total current assets | 4,139,487,445.70 | 4,064,555,672.95 |
| Non-current assets: | ||
| Loans and payments on behalf | ||
| Debt investment | ||
| Other debt investment | ||
| Long-term account receivable | ||
| Long-term equity investment | 73,215,147.84 | 73,361,312.10 |
| Investment in other equity instrument | ||
| Other non-current financial assets | 57,500.00 | 57,500.00 |
| Investment real estate | 253,037,899.57 | 269,704,937.17 |
| Fixed assets | 1,122,692,490.55 | 945,042,032.69 |
| Construction in progress | 1,045,643,295.57 | 771,971,469.43 |
| Productive biological asset | 387,694.20 | 397,386.56 |
| Oil and gas asset | ||
| Right-of-use assets | ||
| Intangible assets | 599,306,223.04 | 589,167,059.47 |
| Expense on Research and Development | ||
| Goodwill | ||
| Long-term expenses to be apportioned | 31,732,325.01 | 19,855,228.69 |
| Deferred income tax asset | 41,347,952.12 | 39,082,710.96 |
| Other non-current asset | 2,476,174.33 | 1,871,965.84 |
| Total non-current asset | 3,169,896,702.23 | 2,710,511,602.91 |
| Total assets | 7,309,384,147.93 | 6,775,067,275.86 |
| Current liabilities: | ||
| Short-term loans | 110,318,727.12 | 23,595,000.00 |
| Loan from central bank | ||
| Capital borrowed | ||
| Trading financial liability | ||
| Derivative financial liability | ||
| Note payable | ||
| Account payable | 480,896,517.64 | 266,123,470.98 |
| Accounts received in advance | 3,376,262.66 | 137,211,832.00 |
| Contractual liability | 108,975,866.82 | |
| Selling financial asset of repurchase | ||
| Absorbing deposit and interbank deposit | ||
| Security trading of agency | ||
| Security sales of agency | ||
| Wage payable | 260,514,559.66 | 195,076,576.55 |
| Taxes payable | 66,904,735.29 | 37,047,613.47 |
| Other account payable | 397,325,719.50 | 236,377,171.13 |
| Including: Interest payable | 1,411,457.29 | |
| Dividend payable | 2,933,690.04 | 2,933,690.04 |
| Commission charge and commission payable | ||
| Reinsurance payable | ||
| Liability held for sale | ||
| Non-current liabilities due within one year | 104,225,183.07 | 67,420,012.16 |
| Other current liabilities | 7,250,420.68 | 219,151,968.63 |
| Total current liabilities | 1,539,787,992.44 | 1,182,003,644.92 |
| Non-current liabilities: | ||
| Insurance contract reserve | ||
| Long-term loans | 841,864,531.75 | 835,912,556.41 |
| Bonds payable | ||
| Including: Preferred stock | ||
| Perpetual capital securities | ||
| Lease liability | ||
| Long-term account payable | 16,126,146.20 | 15,856,950.01 |
| Long-term wages payable | ||
| Accrual liability | 3,500,000.00 | 3,500,000.00 |
| Deferred income | 100,710,038.32 | 101,792,241.31 |
| Deferred income tax liabilities | 12,150,035.13 | 12,563,752.22 |
| Other non-current liabilities | ||
| Total non-current liabilities | 974,350,751.40 | 969,625,499.95 |
| Total liabilities | 2,514,138,743.84 | 2,151,629,144.87 |
| Owner’s equity: | ||
| Share capital | 1,152,535,254.00 | 1,152,535,254.00 |
| Other equity instrument | ||
| Including: Preferred stock | ||
| Perpetual capital securities | ||
| Capital public reserve | 1,422,892,729.36 | 1,422,892,729.36 |
| Less: Inventory shares | ||
| Other comprehensive income | ||
| Reasonable reserve | 522.55 | |
| Surplus public reserve | 382,367,575.37 | 350,187,601.06 |
| Provision of general risk | ||
| Retained profit | 1,637,536,441.03 | 1,495,135,080.60 |
| Total owner’ s equity attributable to parent company | 4,595,331,999.76 | 4,420,751,187.57 |
| Minority interests | 199,913,404.33 | 202,686,943.42 |
| Total owner’ s equity | 4,795,245,404.09 | 4,623,438,130.99 |
| Total liabilities and owner’ s equity | 7,309,384,147.93 | 6,775,067,275.86 |
Legal Representative: Zhu JunmingPerson in charge of accounting works: Jin ZhenyuanPerson in charge of accounting institute: Wen Jieyu
2. Balance Sheet of Parent Company
In RMB
| Item | December 31, 2020 | December 31, 2019 |
| Current assets: | ||
| Monetary funds | 5,312,806.71 | 16,272,394.90 |
| Trading financial assets | 621,806.51 | 1,166,209.72 |
| Derivative financial assets | ||
| Note receivable | ||
| Account receivable | 4,087,681.18 | 7,967.34 |
| Receivable financing | ||
| Accounts paid in advance | ||
| Other account receivable | 892,105,968.23 | 994,149,247.39 |
| Including: Interest receivable | ||
| Dividend receivable | 390,000,000.00 | 260,000,000.00 |
| Inventories | 2,954,343.26 | |
| Contractual assets | ||
| Assets held for sale | ||
| Non-current assets maturing within one year | ||
| Other current assets | 1,497,597.50 | 675,966.29 |
| Total current assets | 903,625,860.13 | 1,015,226,128.90 |
| Non-current assets: | ||
| Debt investment | ||
| Other debt investment | ||
| Long-term receivables | ||
| Long-term equity investments | 3,707,714,425.09 | 3,715,425,854.77 |
| Investment in other equity |
| instrument | ||
| Other non-current financial assets | ||
| Investment real estate | 16,986,504.04 | 17,458,094.37 |
| Fixed assets | 33,125,275.65 | 31,382,741.25 |
| Construction in progress | ||
| Productive biological assets | 387,694.20 | 397,386.56 |
| Oil and natural gas assets | ||
| Right-of-use assets | ||
| Intangible assets | 12,842,693.98 | 6,787,359.94 |
| Research and development costs | ||
| Goodwill | ||
| Long-term deferred expenses | 1,040,708.20 | 380,772.60 |
| Deferred income tax assets | ||
| Other non-current assets | ||
| Total non-current assets | 3,772,097,301.16 | 3,771,832,209.49 |
| Total assets | 4,675,723,161.29 | 4,787,058,338.39 |
| Current liabilities | ||
| Short-term borrowings | ||
| Trading financial liability | ||
| Derivative financial liability | ||
| Notes payable | ||
| Account payable | 115,458.38 | |
| Accounts received in advance | 3,137.80 | |
| Contractual liability | 411.00 | |
| Wage payable | 26,535,794.31 | 17,230,138.89 |
| Taxes payable | 2,736,075.65 | 2,607,719.37 |
| Other accounts payable | 45,560,514.82 | 257,459,190.14 |
| Including: Interest payable | ||
| Dividend payable | 2,933,690.04 | 2,933,690.04 |
| Liability held for sale | ||
| Non-current liabilities due within one year | ||
| Other current liabilities | ||
| Total current liabilities | 74,832,795.78 | 277,415,644.58 |
| Non-current liabilities: | ||
| Long-term loans | ||
| Bonds payable | ||
| Including: preferred stock | ||
| Perpetual capital securities | ||
| Lease liability | ||
| Long-term account payable | ||
| Long term employee compensation payable | ||
| Accrued liabilities | 3,500,000.00 | 3,500,000.00 |
| Deferred income | 45,020.68 | |
| Deferred income tax liabilities | ||
| Other non-current liabilities | ||
| Total non-current liabilities | 3,500,000.00 | 3,545,020.68 |
| Total liabilities | 78,332,795.78 | 280,960,665.26 |
| Owners’ equity: | ||
| Share capital | 1,152,535,254.00 | 1,152,535,254.00 |
| Other equity instrument | ||
| Including: preferred stock | ||
| Perpetual capital securities | ||
| Capital public reserve | 3,018,106,568.27 | 3,018,106,568.27 |
| Less: Inventory shares | ||
| Other comprehensive income | ||
| Special reserve | ||
| Surplus reserve | 109,963,147.23 | 77,783,172.92 |
| Retained profit | 316,785,396.01 | 257,672,677.94 |
| Total owner’s equity | 4,597,390,365.51 | 4,506,097,673.13 |
| Total liabilities and owner’s equity | 4,675,723,161.29 | 4,787,058,338.39 |
3. Consolidated Profit Statement
In RMB
| Item | 2020 | 2019 |
| I. Total operating income | 11,884,527,506.34 | 11,059,984,335.92 |
| Including: Operating income | 11,884,527,506.34 | 11,059,984,335.92 |
| Interest income | ||
| Insurance gained | ||
| Commission charge and commission income | ||
| II. Total operating cost | 11,255,304,140.15 | 10,493,641,137.00 |
| Including: Operating cost | 10,725,012,933.34 | 9,955,307,005.89 |
| 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 | 12,377,202.41 | 14,020,512.36 |
| Sales expense | 201,304,842.30 | 250,657,691.24 |
| Administrative expense | 285,083,453.91 | 260,693,015.60 |
| R&D expense | 16,617,944.25 | 13,599,526.83 |
| Financial expense | 14,907,763.94 | -636,614.92 |
| Including: Interest expenses | 16,958,179.81 | 9,387,920.21 |
| Interest income | 3,529,030.44 | 11,068,571.50 |
| Add: other income | 18,615,426.79 | 12,297,924.24 |
| Investment income (Loss is listed with “-”) | 17,401,645.38 | 9,838,224.64 |
| Including: Investment income on affiliated company and joint venture | 2,065,265.42 | 3,411,761.86 |
| The termination of income recognition for financial assets measured by amortized cost(Loss is listed with “-”) |
| Exchange income (Loss is listed with “-”) | ||
| Net exposure hedging income (Loss is listed with “-”) | ||
| Income from change of fair value (Loss is listed with “-”) | -544,403.21 | 41,281.76 |
| Loss of credit impairment (Loss is listed with “-”) | 1,012,688.03 | 3,496,756.37 |
| Losses of devaluation of asset (Loss is listed with “-”) | -210,190,362.81 | -158,272,990.37 |
| Income from assets disposal (Loss is listed with “-”) | -47,312.84 | -170,437.85 |
| III. Operating profit (Loss is listed with “-”) | 455,471,047.53 | 433,573,957.71 |
| Add: Non-operating income | 3,925,937.84 | 1,256,705.25 |
| Less: Non-operating expense | 1,554,552.82 | 5,801,306.78 |
| IV. Total profit (Loss is listed with “-”) | 457,842,432.55 | 429,029,356.18 |
| Less: Income tax expense | 54,070,586.10 | 44,512,899.71 |
| V. Net profit (Net loss is listed with “-”) | 403,771,846.45 | 384,516,456.47 |
| (i) Classify by business continuity | ||
| 1.continuous operating net profit (net loss listed with ‘-”) | 403,771,846.45 | 384,516,456.47 |
| 2.termination of net profit (net loss listed with ‘-”) | ||
| (ii) Classify by ownership | ||
| 1.Net profit attributable to owner’s of parent company | 405,088,385.54 | 363,501,809.52 |
| 2.Minority shareholders’ gains and losses | -1,316,539.09 | 21,014,646.95 |
| 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 | 403,771,846.45 | 384,516,456.47 |
| Total comprehensive income attributable to owners of parent Company | 405,088,385.54 | 363,501,809.52 |
| Total comprehensive income attributable to minority shareholders | -1,316,539.09 | 21,014,646.95 |
| VIII. Earnings per share: |
| (i) Basic earnings per share | 0.3515 | 0.3154 |
| (ii) Diluted earnings per share | 0.3515 | 0.3154 |
As for the enterprise combined under the same control, net profit of 0 Yuan achieved by the merged party before combination while 0Yuan achieved last period.Legal Representative: Zhu JunmingPerson in charge of accounting works: Jin ZhenyuanPerson in charge of accounting institute: Wen Jieyu
4. Profit Statement of Parent Company
In RMB
| Item | 2020 | 2019 |
| I. Operating income | 6,787,646.23 | 33,297,047.52 |
| Less: Operating cost | 3,407,360.30 | 30,082,764.02 |
| Taxes and surcharge | 342,277.58 | 725,820.16 |
| Sales expenses | 1,557.53 | 352,978.78 |
| Administration expenses | 69,040,444.78 | 54,742,414.39 |
| R&D expenses | ||
| Financial expenses | -299,837.13 | -732,329.49 |
| Including: interest expenses | ||
| Interest income | 363,508.65 | 721,932.13 |
| Add: other income | 1,153,678.06 | 1,472,904.40 |
| Investment income (Loss is listed with “-”) | 393,154,397.74 | 289,567,596.66 |
| Including: Investment income on affiliated Company and joint venture | -1,614,296.02 | |
| The termination of income recognition for financial assets measured by amortized cost (Loss is listed with “-”) | ||
| Net exposure hedging income (Loss is listed with “-”) | ||
| Changing income of fair value (Loss is listed with “-”) | -544,403.21 | 41,281.76 |
| Loss of credit impairment (Loss is listed with “-”) | -468,842.76 | -3,524,271.05 |
| Losses of devaluation of asset (Loss is listed with “-”) | -5,500,000.00 | |
| Income on disposal of assets (Loss is listed with “-”) | -27,216.57 | |
| II. Operating profit (Loss is listed with “-”) | 322,063,456.43 | 235,682,911.43 |
| Add: Non-operating income | 417,499.86 | 403,619.72 |
| Less: Non-operating expense | 681,213.11 | 50.00 |
| III. Total Profit (Loss is listed with “-”) | 321,799,743.18 | 236,086,481.15 |
| Less: Income tax | 5,619,573.34 | |
| IV. Net profit (Net loss is listed with “-”) | 321,799,743.18 | 230,466,907.81 |
| (i) continuous operating net profit (net loss listed with ‘-”) | 321,799,743.18 | 230,466,907.81 |
| (ii) termination of net profit (net loss listed with ‘-”) | ||
| V. Net after-tax of other comprehensive income | ||
| (i) Other comprehensive income items which will not be reclassified subsequently to profit of loss | ||
| 1.Changes of the defined benefit plans that re-measured | ||
| 2.Other comprehensive income under equity method that cannot be transfer to gain/loss | ||
| 3.Change of fair value of investment in other equity instrument | ||
| 4.Fair value change of enterprise's credit risk | ||
| 5. Other | ||
| (ii) Other comprehensive income items which will be reclassified subsequently to profit or loss |
| 1.Other comprehensive income under equity method that can transfer to gain/loss | ||
| 2.Change of fair value of other debt investment | ||
| 3.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 | 321,799,743.18 | 230,466,907.81 |
| VII. Earnings per share: | ||
| (i) Basic earnings per share | ||
| (ii) Diluted earnings per share |
5. Consolidated Cash Flow Statement
In RMB
| Item | 2020 | 2019 |
| I. Cash flows arising from operating activities: | ||
| Cash received from selling commodities and providing labor services | 11,286,443,589.59 | 11,105,513,303.87 |
| 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 | 21,596,382.78 | 25,275,539.65 |
| Other cash received concerning operating activities | 361,167,179.98 | 341,980,984.23 |
| Subtotal of cash inflow arising from operating activities | 11,669,207,152.35 | 11,472,769,827.75 |
| Cash paid for purchasing commodities and receiving labor service | 10,694,549,697.89 | 10,425,163,614.27 |
| Net increase of customer loans and advances | ||
| Net increase of deposits in central bank and interbank | ||
| Cash paid for original insurance contract compensation | ||
| Net increase of capital lent | ||
| Cash paid for interest, commission charge and commission | ||
| Cash paid for bonus of guarantee slip | ||
| Cash paid to/for staff and workers | 260,761,173.53 | 248,608,109.68 |
| Taxes paid | 75,567,816.93 | 75,128,813.39 |
| Other cash paid concerning operating activities | 351,800,241.73 | 533,815,466.44 |
| Subtotal of cash outflow arising from operating activities | 11,382,678,930.08 | 11,282,716,003.78 |
| Net cash flows arising from operating activities | 286,528,222.27 | 190,053,823.97 |
| II. Cash flows arising from investing activities: | ||
| Cash received from recovering investment | 874,500,000.00 | 514,000,000.00 |
| Cash received from investment income | 13,047,809.64 | 6,553,793.96 |
| Net cash received from disposal of fixed, intangible and other long-term assets | 39,017.83 | 6,000,324.52 |
| Net cash received from disposal of subsidiaries and other units | ||
| Other cash received concerning investing activities | 337,500.00 | |
| Subtotal of cash inflow from investing activities | 887,924,327.47 | 526,554,118.48 |
| Cash paid for purchasing fixed, intangible and other long-term assets | 330,306,167.83 | 579,138,870.97 |
| Cash paid for investment | 655,000,000.00 | 739,000,000.00 |
| Net increase of mortgaged loans | ||
| Net cash received from subsidiaries and other units obtained | ||
| Other cash paid concerning investing activities | 6,600.00 | |
| Subtotal of cash outflow from investing activities | 985,312,767.83 | 1,318,138,870.97 |
| Net cash flows arising from investing activities | -97,388,440.36 | -791,584,752.49 |
| III. Cash flows arising from financing activities | ||
| Cash received from absorbing investment | 23,520,000.00 | |
| Including: Cash received from absorbing minority shareholders’ investment by subsidiaries | 23,520,000.00 | |
| Cash received from loans | 1,252,948,640.66 | 413,905,075.72 |
| Other cash received concerning financing activities | ||
| Subtotal of cash inflow from | 1,252,948,640.66 | 437,425,075.72 |
| financing activities | ||
| Cash paid for settling debts | 1,125,297,927.31 | 150,356,092.60 |
| Cash paid for dividend and profit distributing or interest paying | 281,115,923.63 | 162,493,097.65 |
| Including: Dividend and profit of minority shareholder paid by subsidiaries | ||
| Other cash paid concerning financing activities | 58,702.23 | 72,997.72 |
| Subtotal of cash outflow from financing activities | 1,406,472,553.17 | 312,922,187.97 |
| Net cash flows arising from financing activities | -153,523,912.51 | 124,502,887.75 |
| IV. Influence on cash and cash equivalents due to fluctuation in exchange rate | -76,401.31 | 344,458.94 |
| V. Net increase of cash and cash equivalents | 35,539,468.09 | -476,683,581.83 |
| Add: Balance of cash and cash equivalents at the period -begin | 154,954,757.85 | 631,638,339.68 |
| VI. Balance of cash and cash equivalents at the period -end | 190,494,225.94 | 154,954,757.85 |
6. Cash Flow Statement of Parent Company
In RMB
| Item | 2020 | 2019 |
| I. Cash flows arising from operating activities: | ||
| Cash received from selling commodities and providing labor services | 3,366,464.12 | 80,530,360.65 |
| Write-back of tax received | 103,987.33 | 508,882.07 |
| Other cash received concerning operating activities | 341,811,436.11 | 186,613,340.33 |
| Subtotal of cash inflow arising from operating activities | 345,281,887.56 | 267,652,583.05 |
| Cash paid for purchasing commodities and receiving labor | 76,108.23 | 102,085,180.39 |
| service | ||
| Cash paid to/for staff and workers | 40,060,609.61 | 27,212,693.90 |
| Taxes paid | 9,318,111.37 | 3,672,773.74 |
| Other cash paid concerning operating activities | 330,103,954.85 | 243,973,743.76 |
| Subtotal of cash outflow arising from operating activities | 379,558,784.06 | 376,944,391.79 |
| Net cash flows arising from operating activities | -34,276,896.50 | -109,291,808.74 |
| II. Cash flows arising from investing activities: | ||
| Cash received from recovering investment | 14,500,000.00 | 314,000,000.00 |
| Cash received from investment income | 260,865,827.42 | 29,249,567.07 |
| Net cash received from disposal of fixed, intangible and other long-term assets | 2,703.87 | 2,710.37 |
| Net cash received from disposal of subsidiaries and other units | ||
| Other cash received concerning investing activities | 337,500.00 | |
| Subtotal of cash inflow from investing activities | 275,706,031.29 | 343,252,277.44 |
| Cash paid for purchasing fixed, intangible and other long-term assets | 11,789,428.69 | 7,360,713.96 |
| Cash paid for investment | 10,000,000.00 | 264,000,000.00 |
| Net cash received from subsidiaries and other units obtained | ||
| Other cash paid concerning investing activities | ||
| Subtotal of cash outflow from investing activities | 21,789,428.69 | 271,360,713.96 |
| Net cash flows arising from investing activities | 253,916,602.60 | 71,891,563.48 |
| III. Cash flows arising from financing activities |
| Cash received from absorbing investment | ||
| Cash received from loans | ||
| Other cash received concerning financing activities | ||
| Subtotal of cash inflow from financing activities | ||
| Cash paid for settling debts | ||
| Cash paid for dividend and profit distributing or interest paying | 230,507,050.80 | 115,253,525.40 |
| Other cash paid concerning financing activities | 58,702.23 | 72,997.72 |
| Subtotal of cash outflow from financing activities | 230,565,753.03 | 115,326,523.12 |
| Net cash flows arising from financing activities | -230,565,753.03 | -115,326,523.12 |
| IV. Influence on cash and cash equivalents due to fluctuation in exchange rate | -33,541.26 | 98,576.44 |
| V. Net increase of cash and cash equivalents | -10,959,588.19 | -152,628,191.94 |
| Add: Balance of cash and cash equivalents at the period -begin | 16,272,394.90 | 168,900,586.84 |
| VI. Balance of cash and cash equivalents at the period -end | 5,312,806.71 | 16,272,394.90 |
7. Statement of Changes in Owners’ Equity (Consolidated)
Current period
In RMB
| Item | 2020 | ||||||||||||||
| Owners’ equity attributable to the parent Company | Minority interests | Total owners’ equity | |||||||||||||
| Share capital | Other equity instrument | Capital reserve | Less: Inventory shares | Other comprehensive inco | Reasonable reserve | Surplus reserve | Provision of general risk | Retained profit | Other | Subtotal | |||||
| Preferred sto | Perpetual cap | Other | |||||||||||||
| ck | ital securities | me | |||||||||||||
| I. Balance at the end of the last year | 1,152,535,254.00 | 1,422,892,729.36 | 522.55 | 350,187,601.06 | 1,495,135,080.60 | 4,420,751,187.57 | 202,686,943.42 | 4,623,438,130.99 | |||||||
| Add: Changes of accounting policy | |||||||||||||||
| Error correction of the last period | |||||||||||||||
| Enterprise combine under the same control | |||||||||||||||
| Other | |||||||||||||||
| II. Balance at the beginning of this year | 1,152,535,254.00 | 1,422,892,729.36 | 522.55 | 350,187,601.06 | 1,495,135,080.60 | 4,420,751,187.57 | 202,686,943.42 | 4,623,438,130.99 | |||||||
| III. Increase/ Decrease in this year (Decrease is listed with “-”) | -522.55 | 32,179,974.31 | 142,401,360.43 | 174,580,812.19 | -2,773,539.09 | 171,807,273.10 | |||||||||
| (i) Total comprehensive income | 405,088,385.54 | 405,088,385.54 | -1,316,539.09 | 403,771,846.45 | |||||||||||
| (ii) Owners’ devoted and |
| decreased capital | |||||||||||||||
| 1.Common shares invested by shareholders | |||||||||||||||
| 2. Capital invested by holders of other equity instruments | |||||||||||||||
| 3. Amount reckoned into owners equity with share-based payment | |||||||||||||||
| 4. Other | |||||||||||||||
| (III) Profit distribution | 32,179,974.31 | -262,687,025.11 | -230,507,050.80 | -1,457,000.00 | -231,964,050.80 | ||||||||||
| 1. Withdrawal of surplus reserves | 32,179,974.31 | -32,179,974.31 | |||||||||||||
| 2. Withdrawal of general risk provisions | |||||||||||||||
| 3. Distribution for owners (or shareholders) | -230,507,050.80 | -230,507,050.80 | -1,457,000.00 | -231,964,050.80 | |||||||||||
| 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 comprehensive income | |||||||||||||||
| 6. Other | |||||||||||||||
| (V) Reasonable reserve | -522.55 | -522.55 | -522.55 | ||||||||||||
| 1. Withdrawal in the report period | 1,124,329.18 | 1,124,329.18 | 1,124,329.18 | ||||||||||||
| 2. Usage in the report period | 1,124,851.73 | 1,124,851.73 | 1,124,851.73 | ||||||||||||
| (VI)Others | |||||||||||||||
| IV. Balance at the end of the report period | 1,152,535,254.00 | 1,422,892,729.36 | 382,367,575.37 | 1,637,536,441.03 | 4,595,331,999.76 | 199,913,404.33 | 4,795,245,404.09 |
Last period
In RMB
| Item | 2019 | ||||||||||||||
| Owners’ equity attributable to the parent Company | Minority interests | Total owners’ equity | |||||||||||||
| Share capital | Other equity instrument | Capital reserve | Less: Inventory shares | Other comprehensive income | Reasonable reserve | Surplus reserve | Provision of general risk | Retained profit | Other | Subtotal | |||||
| Preferred stock | Perpetual capital securities | Other | |||||||||||||
| I. Balance at the end of the last year | 1,152,535,254.00 | 1,422,892,729.36 | 154.21 | 327,140,910.28 | 1,269,933,487.26 | 4,172,502,535.11 | 165,096,296.47 | 4,337,598,831.58 | |||||||
| Add: Changes of accounting policy | |||||||||||||||
| Error correction of the last period | |||||||||||||||
| Enterprise combine under the same control | |||||||||||||||
| Other | |||||||||||||||
| II. Balance at the beginning | 1,152, | 1,422,89 | 154.21 | 327,140, | 1,269,93 | 4,172,50 | 165,096,29 | 4,337,598, | |||||||
| of this year | 535,254.00 | 2,729.36 | 910.28 | 3,487.26 | 2,535.11 | 6.47 | 831.58 | ||||||||
| III. Increase/ Decrease in this year (Decrease is listed with “-”) | 368.34 | 23,046,690.78 | 225,201,593.34 | 248,248,652.46 | 37,590,646.95 | 285,839,299.41 | |||||||||
| (i) Total comprehensive income | 363,501,809.52 | 363,501,809.52 | 21,014,646.95 | 384,516,456.47 | |||||||||||
| (ii) Owners’ devoted and decreased capital | 23,520,000.00 | 23,520,000.00 | |||||||||||||
| 1.Common shares invested by shareholders | 23,520,000.00 | 23,520,000.00 | |||||||||||||
| 2. Capital invested by holders of other equity instruments | |||||||||||||||
| 3. Amount reckoned into owners equity with share-based payment | |||||||||||||||
| 4. Other | |||||||||||||||
| (III) Profit distribution | 23,046,690.78 | -138,300,216.18 | -115,253,525.40 | -6,944,000.00 | -122,197,525.40 | ||||||||||
| 1. Withdrawal of surplus | 23,046,690.7 | -23,046,690. |
| reserves | 8 | 78 | |||||||||||||
| 2. Withdrawal of general risk provisions | |||||||||||||||
| 3. Distribution for owners (or shareholders) | -115,253,525.40 | -115,253,525.40 | -6,944,000.00 | -122,197,525.40 | |||||||||||
| 4. Other | |||||||||||||||
| (IV) Carrying forward internal owners’ equity | |||||||||||||||
| 1. Capital reserves conversed to capital (share capital) | |||||||||||||||
| 2. Surplus reserves conversed to capital (share capital) | |||||||||||||||
| 3. Remedying loss with surplus reserve | |||||||||||||||
| 4．Carry-over retained earnings from the defined benefit plans | |||||||||||||||
| 5．Carry-over retained earnings from other |
| comprehensive income | |||||||||||||||
| 6. Other | |||||||||||||||
| (V) Reasonable reserve | 368.34 | 368.34 | 368.34 | ||||||||||||
| 1. Withdrawal in the report period | 920,788.68 | 920,788.68 | 920,788.68 | ||||||||||||
| 2. Usage in the report period | 920,420.34 | 920,420.34 | 920,420.34 | ||||||||||||
| (VI)Others | |||||||||||||||
| IV. Balance at the end of the report period | 1,152,535,254.00 | 1,422,892,729.36 | 522.55 | 350,187,601.06 | 1,495,135,080.60 | 4,420,751,187.57 | 202,686,943.42 | 4,623,438,130.99 |
8. Statement of Changes in Owners’ Equity (Parent Company)
Current period
In RMB
| Item | 2020 | |||||||||||
| Share capital | Other equity instrument | Capital public reserve | Less: Inventory shares | Other comprehensive income | Reasonable reserve | Surplus reserve | Retained profit | Other | Total owners’ equity | |||
| Preferred stock | Perpetual capital securities | Other | ||||||||||
| I. Balance at the end of the last year | 1,152,535,254.00 | 3,018,106,568.27 | 77,783,172.92 | 257,672,677.94 | 4,506,097,673.13 | |||||||
| Add: Changes of accounting | ||||||||||||
| policy | ||||||||||||
| Error correction of the last period | ||||||||||||
| Other | ||||||||||||
| II. Balance at the beginning of this year | 1,152,535,254.00 | 3,018,106,568.27 | 77,783,172.92 | 257,672,677.94 | 4,506,097,673.13 | |||||||
| III. Increase/ Decrease in this year (Decrease is listed with “-”) | 32,179,974.31 | 59,112,718.07 | 91,292,692.38 | |||||||||
| (i) Total comprehensive income | 321,799,743.18 | 321,799,743.18 | ||||||||||
| (ii) Owners’ devoted and decreased capital | ||||||||||||
| 1.Common shares invested by shareholders | ||||||||||||
| 2. Capital invested by holders of other equity instruments | ||||||||||||
| 3. Amount reckoned into owners equity with share-based payment | ||||||||||||
| 4. Other | ||||||||||||
| (III) Profit distribution | 32,179,974.3 | -262,687, | -230,507,050.80 |
| 1 | 025.11 | |||||||||||
| 1. Withdrawal of surplus reserves | 32,179,974.31 | -32,179,974.31 | ||||||||||
| 2. Distribution for owners (or shareholders) | -230,507,050.80 | -230,507,050.80 | ||||||||||
| 3. Other | ||||||||||||
| (IV) Carrying forward internal owners’ equity | ||||||||||||
| 1. Capital reserves conversed to capital (share capital) | ||||||||||||
| 2. Surplus reserves conversed to capital (share capital) | ||||||||||||
| 3. Remedying loss with surplus reserve | ||||||||||||
| 4．Carry-over retained earnings from the defined benefit plans | ||||||||||||
| 5．Carry-over retained earnings from other comprehensive income | ||||||||||||
| 6. Other | ||||||||||||
| (V) |
| Reasonable reserve | ||||||||||||
| 1. Withdrawal in the report period | ||||||||||||
| 2. Usage in the report period | ||||||||||||
| (VI)Others | ||||||||||||
| IV. Balance at the end of the report period | 1,152,535,254.00 | 3,018,106,568.27 | 109,963,147.23 | 316,785,396.01 | 4,597,390,365.51 |
Last period
In RMB
| Item | 2019 | |||||||||||
| Share capital | Other equity instrument | Capital public reserve | Less: Inventory shares | Other comprehensive income | Reasonable reserve | Surplus reserve | Retained profit | Other | Total owners’ equity | |||
| Preferred stock | Perpetual capital securities | Other | ||||||||||
| I. Balance at the end of the last year | 1,152,535,254.00 | 3,018,106,568.27 | 54,736,482.14 | 165,505,986.31 | 4,390,884,290.72 | |||||||
| Add: Changes of accounting policy | ||||||||||||
| Error correction of the last period | ||||||||||||
| Other | ||||||||||||
| II. Balance at the beginning | 1,152,53 | 3,018,106,5 | 54,736,482 | 165,505,986.3 | 4,390,884,290.72 | |||||||
| of this year | 5,254.00 | 68.27 | .14 | 1 | ||||||||
| III. Increase/ Decrease in this year (Decrease is listed with “-”) | 23,046,690.78 | 92,166,691.63 | 115,213,382.41 | |||||||||
| (i) Total comprehensive income | 230,466,907.81 | 230,466,907.81 | ||||||||||
| (ii) Owners’ devoted and decreased capital | ||||||||||||
| 1.Common shares invested by shareholders | ||||||||||||
| 2. Capital invested by holders of other equity instruments | ||||||||||||
| 3. Amount reckoned into owners equity with share-based payment | ||||||||||||
| 4. Other | ||||||||||||
| (III) Profit distribution | 23,046,690.78 | -138,300,216.18 | -115,253,525.40 | |||||||||
| 1. Withdrawal of surplus reserves | 23,046,690.78 | -23,046,690.78 | ||||||||||
| 2. Distribution for owners | -115,253,525.40 | -115,253,525.40 |
| (or shareholders) | ||||||||||||
| 3. Other | ||||||||||||
| (IV) Carrying forward internal owners’ equity | ||||||||||||
| 1. Capital reserves conversed to capital (share capital) | ||||||||||||
| 2. Surplus reserves conversed to capital (share capital) | ||||||||||||
| 3. Remedying loss with surplus reserve | ||||||||||||
| 4．Carry-over retained earnings from the defined benefit plans | ||||||||||||
| 5．Carry-over retained earnings from other comprehensive income | ||||||||||||
| 6. Other | ||||||||||||
| (V) Reasonable reserve | ||||||||||||
| 1. Withdrawal in the report period |
| 2. Usage in the report period | ||||||||||||
| (VI)Others | ||||||||||||
| IV. Balance at the end of the report period | 1,152,535,254.00 | 3,018,106,568.27 | 77,783,172.92 | 257,672,677.94 | 4,506,097,673.13 |
III. Basic information of Company(i)Company profile
Shenzhen Cereals Holdings Co., Ltd. (formerly the Shenzhen Shenbao Industrial Co., Ltd., hereinafter referred toas “SZCH”, “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 thename 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. TheCompany belongs to the grain, oil, food and beverage industry.
As of 31 December 2020, the cumulative amount of shares issued by the Company was 1,152,535,254 shares withregistered capital of 1,152,535,254.00 yuan. Registered address: Shenzhen, Guangdong Province; HQ of theCompany: 8/F, Tower B, No.4 Building, Software Industry Base, South District, Science & Technology Park,Xuefu Rd., Yuehai Street, Nanshan District, Shenzhen. Main business of the Company: general operating items:
Purchase and sales of grain and oil, grain & oil reserves; operation and processing of grain & oil products;production of tea, tea products, tea and natural plant extract, canned foods, beverages and native products(business license of the production place shall be separately applied for); feed management and processing(outsourcing); investment, operation and development of grain & oil logistics, feed logistics and tea garden etc.;sales of feed and tea; warehousing services; food circulation services; modern food supply chain services;technology development and services of grain & oil, tea, plant products, soft drinks and foods; construction ofE-commerce and information, IT development and supporting services; industrial investment (specific items willbe declared separately); domestic trade; operating the import and export business; engaged in real estatedevelopment and operation on the lands where the right-to-use has been legally acquired; development, operation,leasing and management of the own property; property management; providing management services tohotels.(items mentioned above which are involved in approval from national laws, administrative regulations anddecision of the state council, must be submitted for examination and approval before operation ). Licensedbusiness item: wholesale of prepackaged food (excluding reheating prepackaged food) (in non-physical way);information service (internet information service only); general freight, professional transportation (refrigerationand fresh-keeping). Parent enterprise of the Company: Shenzhen Food Materials Group Co., Ltd; actual controller
of the Company: Assets Supervision and Administration Commission of Shenzhen municipal People’sGovernment.The financial statement has been approved by BOD of the company for reporting on 23 April 2021.
(ii) Consolidate scope for the financial statementInformation with subsidiaries concerned found more in the “Note IX. Equity in other entity”Change of the consolidate scope in the Period found more in “Note VIII. Change of consolidate scope”
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 -BasicStandard issued by Ministry of Finance and specific accounting principle as well as the application guidance forthe accounting principles for enterprise, interpretation to the accounting principles for enterprise and other relatedrequirements (hereinafter referred to as Accounting Standards for Business Enterprise), combining theInformation Disclosure Preparation Rules for Company Public Issuing Securities No.15-General Rules forFinancial Report of the CSRC
2. Going concern
The Company was evaluated on continued viability of 12 months for the reporting period and found to have nosignificant doubt. Accordingly, the financial statements have been prepared on the basis of going concernassumptions.V. Major accounting policy, accounting estimationSpecific accounting policies and estimation attention:
1. Statement for observation of Accounting Standard for Business EnterpriseThe financial statements prepared by the Company are in accordance to requirements of Accounting Standard forBusiness Enterprise issued by Ministry of Finance, which truly and completely reflect the financial status of theCompany and parent company on 31 December 2020, as well as the consolidate and parent company’s operationalresults and cash flow for year of 2020.
2. Accounting period
Calendar year is the accounting period for the Company, that is falls to the range starting from 1 January to 31December.
3. Operating cycle
Operating cycle of the Company was 12 months
4. Standard currency
The Company and its subsidiaries take RMB as the standard currency for bookkeeping.
5. Accounting treatment for business combinations under the same control and those not under the samecontrolBusiness combination under the same control: The assets and liabilities the Company acquired in a businesscombination shall be measured in accordance with book value of assets, liabilities (including the ultimatecontrolling party of goodwill acquired by the merging parties and the formation of) stated in combined financialreport of the ultimate controlling party on the merger date. The net book value of assets and the payment of themerger consideration in the merger book value (or nominal value of shares issued) shall be adjusted in the sharepremium of reserve capital. the share premium in capital reserve is not enough for deducting, retained earnings .Business combination not under the same control: Combination cost is the fair value of the assets paid, theliabilities incurred or assumed by the purchaser for the acquisition of the control of the purchaser and the equitysecurities issued on the purchase date. The difference between the fair value and book value is recognized in profitor loss. Goodwill is realized by the Company as for the difference between the combination cost and the fair valueof the recognizable net assets of the acquiree acquired by acquirer in such business combination. In case that theabove cost is less than the above fair value even with re-review, then the difference shall be recorded in currentgains and losses. Each identifiable assets, liabilities and contingent liability of the acquiree acquired in acombination 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 feesfor issuing equity securities or debt securities for the business combination shall be recorded into the initialconfirmation amount of equity securities or debt securities.
6. Methods for preparation of consolidated financial statements
6.1 Consolidated scope
The consolidation scope of the consolidated financial statements of the Company is fixed on the basis of control,which includes the Company and all subsidiaries. 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 influencethe 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 financialstatements in accordance with unified accounting policies to reflect the overall financial status, operating resultsand cash flow of the enterprise group. The influence of internal transactions between the company and itssubsidiaries and among the subsidiaries shall be offset. If internal transactions indicate that the relevant assetshave suffered impairment losses, the partial losses shall be confirmed in full. If the accounting policy andaccounting period adopted by the subsidiary are inconsistent with the Company, when preparing the consolidatedfinancial statements, make necessary adjustments in accordance with the Company's accounting policy andaccounting period.
Subsidiary's equity, current net profits or losses and current comprehensive income belonging to minorityshareholders shall be listed respectively under item of owners’ equity in the consolidated balance sheet, item ofnet profit in profit sheet and item of total comprehensive income. Current loss minority shareholders of asubsidiary exceed the minority shareholders in the subsidiary's opening owners' equity share and the formation ofbalance, offset against minority interests.
(1) Increase of subsidiary or business
During the reporting period, the merger of the enterprises under the same control results in additional subsidiariesor business, the operation results and cash flow of the subsidiaries or business from beginning to the end of thereporting shall be included in the consolidated profit statement; also adjust the opening figures of the consolidatedfinancial statements and the related items in the comparative statements, the consolidated reporting body isconsidered 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, equityinvestments made before obtaining controlling right, relevant gains and losses and other comprehensive income aswell as other changes in net assets confirmed during the latter date between point obtaining original equity andcombined party and combinee under the same control day to the combined day, shall be offset against the retainedearnings 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 samecontrol, 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 additionalinvestment and other reasons can lead investee to be controlled under the same control. Difference between thefair value and the book value is recognized as investment income. Other comprehensive income and other changesin owner’s equity under the equity method of accounting that can be reclassified to profit or loss at a later date aretransferred 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 shallbe re-measured at fair value at the date when control is lost. Price of equity disposal plus fair value of theremaining equity, then subtracting net assets held from the former subsidiary from the acquisition date orcombination date initially measured in accordance with original stake and goodwill, the difference shall beincluded in investment income of the period losing controlling right. Other comprehensive income and otherchanges in owner’s equity under the equity method of accounting related to equity investments in formersubsidiaries that can be reclassified to profit or loss in the future are transferred to investment income in thecurrent 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 thetransaction, situation and economic impact subject to one or above of the following conditions, usually it indicatesrepeated 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 lossof control; before the loss of control the difference between the disposal price and the corresponding net assets ofthe subsidiary, recognized as other comprehensive income in the consolidated financial statements, into currentprofit 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 accordancewith relevant rules before losing controlling right, while in accordance with general accounting treatment whenlosing 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 newlyacquired 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 balanceof 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-termequity investment made between the relative net assets from the purchase date or the date of merger were initiallymeasured at the difference between the subsidiary shall enjoy, the consolidated balance sheet adjustment in thebalance of the share premium, capital balance of the share premium insufficient, any excess is adjusted to retainedearnings.
7. Classification of joint venture arrangement and accounting for joint operations
8. 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. Cashequivalent refers to the investment held by the Company with short maturity and strong liquidity that are easy tobe converted into known amounts with little risk of change in cash value.
9. Foreign currency business and conversion of foreign currency statement
9.1 Foreign currency business
The foreign currency business uses the spot exchange rate on the transaction date as the conversion rate to convertthe foreign currency amount into RMB.The balance of foreign currency monetary items on the balance sheet date is converted at the spot exchange rate onthe balance sheet date. The resulting exchange differences, except that the balance of exchange generated from theforeign currency special borrowings related to the assets whose acquisition and construction are eligible forcapitalization is disposed in accordance with the principle of borrowing costs capitalization, are included in thecurrent profit and loss.
9.2 Conversion of foreign currency financial statements
Assets and liabilities in the balance sheet are converted at the spot exchange rate on the balance sheet date; exceptfor the “undistributed profit” item, other items of the owner's equity items are converted at the spot exchange rate atthe time of occurrence. Income and expense items in the income statement are converted at the spot exchange rateon the transaction date.When disposing an overseas operation, the translation difference of the foreign currency financial statements related
to the overseas operation is transferred from the owner's equity items to the disposal of the current profit and loss.
10. Financial instruments
The Company recognizes a financial assets, financial liabilities or equity instrument when it becomes a party to afinancial instrument contract.
10.1 Categories of financial instruments
According to the business model of managing financial assets and the contractual cash flow characteristics offinancial assets, at initial recognition, the Company classifies the financial assets into the financial assetsmeasured at amortized cost, the financial assets(debt instrument) measured at fair value and whose changes areincluded in other comprehensive income, and the financial assets measured at fair value and whose changes areincluded in current gain or loss.
The Company classifies the financial assets that meet the following conditions and are not designated to bemeasured at fair value and whose changes are recorded into the current gain/losses as financial assets measured atamortized 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 principalamount. 。
The Company classifies the financial assets (debt instruments) that meet the following conditions and are notspecified 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 financialassets;－ contractual cash flows represent only payments of principal and interest based on the outstanding principalamount.
For non-trading equity instrument investment, the Company determines whether it is designated as a financial asset(equity instrument) measured at fair value and whose changes are included in other comprehensive income at theinitial recognition. The designation is made on a single investment basis and the related investment meet thedefinition 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 changesincluded in other comprehensive income, the Company classifies all other financial assets as financial assetsmeasured 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 thefinancial assets that should be classified as financial assets measured at amortized cost or measured at fair valueand whose changes are included in other comprehensive income as the financial assets measured at fair value andwhose 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 andwhose changes are included in current profit and loss and the financial liabilities measured at amortized cost.
Financial liabilities that meet one of the following conditions can be designated as financial liabilities measured atfair value and whose changes are included in current profit and loss in the initial measurement:
1) The designation can eliminate or significantly reduce accounting mismatches.
2) According to the enterprise risk management or investment strategy specified in the official written document,manage and make performance evaluation of the financial liability portfolio or financial assets and financialliability portfolio based on fair value, and report to the key management personnel based on this.
3) The financial liability includes embedded derivatives that need to be separately split.
10.2 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 costsare included in the initial recognition amount. The accounts receivable not including major financing componentsand the accounts receivable that the Company decides not to consider the financing component of not more than oneyear are initially measured at the contract transaction price.
Interest calculated by the effective interest method during the holding period is included in the current profit andloss.
When recovering or disposing, the difference between the price obtained and the book value of the financial asset isincluded in the current profit and loss.
(2) Financial assets (debt instruments) measured at fair value and whose changes are included in othercomprehensive incomeFinancial assets (debt instruments) measured at fair value and whose changes are included in other comprehensiveincome, including receivables financing, other debt investment, etc., are initially measured at fair value, and relatedtransaction expenses are included in the initial recognition amount. The financial assets are subsequently measuredat fair value, the changes in fair value are included in other comprehensive income except for interest, impairmentlosses or gains and exchange gains and losses calculated by using the effective interest method.
When a financial asset is terminated for recognition, the accumulated gain or loss previously included in othercomprehensive income is transferred from other comprehensive income and included in current profit and loss.
(3) Financial assets (equity instruments) measured at fair value and whose changes are included in othercomprehensive incomeFinancial assets (equity instruments) measured at fair value and whose changes are included in other comprehensiveincome, including other equity instruments, etc., are initially measured at fair value, and related transactionexpenses are included in the initially recognized amount. The financial assets are subsequently measured at fairvalue, and changes in fair value are included in other comprehensive income. The dividends obtained are included inthe current profits and losses.
When a financial asset is terminated for recognition, the accumulated gain or loss previously included in othercomprehensive income is transferred from other comprehensive income and included in retained earnings.
(4) Financial assets measured at fair value and whose changes are included in current profit and lossFinancial assets measured at fair value and whose changes are included in current profit and loss, includingTradable financial assets, derivative financial assets and other non-current financial assets, etc., are initiallymeasured at fair value, and related transaction expenses are included in the initial recognition amount. The financialassets are subsequently measured at fair value, and changes in fair value are recognized in current profit and loss.
(5) Financial liabilities measured at fair value and whose changes are included in current profit and lossFinancial liabilities measured at fair value and whose changes are included in current profit and loss, includingtransaction financial liabilities, derivative financial liabilities, etc., are initially measured at fair value, and relatedtransaction expenses are included in current profit and loss. The financial liabilities are subsequently measured atfair value, and changes in fair value are included in current profit and loss.
When a financial liability is terminate for recognition, the difference between book value and the considerationpaid shall be recorded into the current profit and loss.
(6) Financial liabilities measured at amortized cost
Financial liabilities measured at amortized cost, including short-term borrowings, bills payable, accounts payable,other payable, long-term borrowings, bonds payable, and long-term payable, are initially measured at fair value, andrelated transaction expenses are included in the initial recognition amount.
Interest calculated by the effective interest method during the holding period is included in the current profit andloss.
When a financial liability is terminate for recognition, the difference between the consideration paid and the bookvalue of the financial liability is included in current profit and loss.
10.3 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 financialasset have been transferred to the transferee;－ the financial assets have been transferred. Although the company has neither transferred nor retained nearly allthe 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 financialasset 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 fortransfer of financial assets, the Company generally adopts the principle that substance over weighs format.
The Company divides such transfer into entire transfer and part transfer. As for the entire transfer meetingcondition for discontinued recognition, balance between the following two items is recorded in current gains andlosses:
1) Carrying value of financial assets in transfer;
2) Aggregate of the consideration received from transfer and accumulative movements of fair value originallyrecorded in owners’ equity directly (applicable for the financial assets (debt instrument) measured at fair value andwhose changes are recorded into other comprehensive income)
As for the part transfer meeting condition for discontinued recognition, entire carrying value of financial assets intransfer is shared by discontinued recognition part and continued recognition part, in light of their respective fairvalue. Balance between the following two items is recorded in current gains and losses:
1)Carrying value of discontinued recognition part;
2) Aggregate of the consideration of discontinued recognition part and amount of such part attributable toaccumulative movements of fair value originally recorded in owners’ equity directly (applicable when financialassets involved in transfer belong to financial assets (debt instrument) measured at fair value and whose changesare included in other comprehensive income).
Financial assets are still subject to recognition if transfer of such assets doesn’t satisfy the condition fordiscontinued recognition. And consideration received is recognized as financial liability.
10.4 Terminating the recognition of financial liability
As for the financial liabilities with its whole or part present obligations released, the company shall terminate therecognition for such financial liabilities or part of it. if the company enters into agreement with its creditor tosubstitute for the existing financial liabilities by means of assuming new financial liabilities, then the companyshall terminate the recognition for the existing financial liabilities and recognized the new financial liabilitiesprovided that the contract clauses of the new and the existing financial liabilities are different in substance.
If the company makes substantial amendment to the whole or part contract clauses of the existing financialliabilities, it shall terminate the recognition for the existing financial liabilities or part of it. Meanwhile, thefinancial liabilities with amendment to its clauses shall be realized as new financial liabilities.
In case of terminate the recognition of financial liabilities in whole or part, the difference between the carryingvalue of such financial liabilities and consideration paid (including the non-cash assets exchanged or newfinancial liabilities assumed) shall be recorded in current gains and losses.
In case that the company repurchases part of financial liabilities, based on the comparative fair value of thecontinuing recognition part and the derecognizing part, the company shall allocate the carrying value of thefinancial liabilities in whole on the repurchase date. Difference between the carrying value allocated to thederecognizing part and the consideration paid (including the non-cash assets exchanged or new financial liabilitiesassumed) shall be recorded in current gains and losses.
10.5 Recognition method for fair value of financial assets and financial liabilitiesAs for the financial instrument with an active market, the fair value is determined by the offer of the active market;there is no active market for a financial instrument, the valuation techniques to determine its fair value. At thetime of valuation, the Company adopted applicable in the present case and there is enough available data andother information technology to support valuation, assets or liabilities of feature selection and market participantsin the trading of the underlying asset or liability considered consistent input value and priority as the relevantobservable inputs. Where relevant observable inputs can not get or do not get as far as practicable, the use ofun-observable inputs.
10.6 Testing of the financial assets impairment and accounting treatmentThe 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, andfinancial guarantee contracts in a single or combined way.
The Company considers reasonable and well-founded information about past events, current conditions, andforecasts of future economic conditions, and uses the risk of default as the weight to calculate theprobability-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 Companymeasures its loss provision based on the amount equivalent to the expected credit losses for the entire duration of thefinancial instrument; if the credit risk of the financial instrument has not increased significantly since the initialrecognition, the Company measures its loss provision based on the amount equivalent to the expected credit lossesof the financial instrument in the next 12 months. The increase or reversal amount of the resulting loss provision isincluded 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 ofdefault on the date of initial recognition to determine the relative change in the risk of default during the expectedlife of the financial instrument so as to assess whether the credit risk of the financial instrument has increasedsignificantly since the initial recognition. Usually, if it s overdue for more than 30 days, the Company shall believethat the credit risk of the financial instrument has increased significantly, unless there is conclusive evidence that thecredit 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 riskof the financial instrument has not increased significantly since the initial recognition.
If there is objective evidence that a financial asset has suffered credit impairment, the Company shall makeprovision for impairment of the financial asset on a single basis.
Regarding the accounts receivable and contract assets formed from transactions regulated by the "AccountingStandards for Business Enterprises No. 14-Revenue" (2017), regardless of whether it contains a significantfinancing component, the Company always measure its loss reserves at the amount equivalent to the expectedcredit loss during the entire duration.
For lease receivables, the Company always chooses to measure its loss reserves at an amount equivalent toexpected credit losses during the entire duration.
If the Company no longer reasonably expects whether the contractual cash flow of a financial asset can berecovered in whole or in part, it will directly write down the book balance of the financial asset.
11. Note receivable
12. Account receivable
13. Receivable financing
14. Other account receivable
Determining method and accounting treatment on the expected credit loss of other account receivable
15. Inventory
15.1 Classification and costs of inventory
Inventory includes raw materials, revolving material, goods in process, goods in transit and work inprocess-outsourced and so on.
Inventory is initially measured at cost, which includes the costs of purchase, processing costs and otherexpenditures incurred in bringing the inventories to their present location and condition.
15.2 Valuation methods for delivery of inventory
The weighted average or individual valuation method is used when the inventory is issued according to the natureof the business.
15.3 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 thecost of inventories is higher than its net realizable value, make provisions for inventory write-down. The netrealizable 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, ismeasured as the residual value after deducting the estimated sales expense and related taxes and fees fromthe estimated selling price; the net realizable value of an item of inventories subject to further processing,in normal business production, is measured as the residual value after deducting the sum of the estimatedcosts of completion, sales expense and related taxes and fees from the estimated selling price of the for-saleitem. The net realizable value of the quantity of inventories held to satisfy firm sales or service contracts isbased on the contract price. If the sales contracts are for less than the inventory quantities held, the netrealizable value of the excess is based on general selling prices.
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 bookvalue, it shall be reversed within the amount of the inventory write-down that has been withdrawn, and thereversed amount is included in the current profit and loss.
15.4 Inventory system
Inventory system is the perpetual inventory system.
15.5 Amortization of low-value consumables and packaging materials
(1) Low-value consumables adopts the method of primary resale;
(2) Wrappage adopts the method of primary resale.
16. Contract asset
Accounting policy applicable since 1 Jan. 2020
16.1 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 betweenperformance obligations and customer payments. The Company lists the right (and the right depends on otherfactors other than the passage of time) to receive consideration for the transfer of goods or services to customersas contract assets. Contract assets and contract liabilities under the same contract are presented in net amount. TheCompany's unconditional (only depending on the passage of time) right to collect consideration from customersare separately listed as receivables.
16.2 Determination method and accounting treatment method of expected credit loss of contract assetsFound more in the 10.6 Testing of the financial assets impairment and accounting treatment carried under 10.Financial instrument
17. Contract cost
18. Assets held for sale
19. Creditors’ investment
20. Other creditors’ investment
21. Long-term account receivable
22. Long-term equity investment
22.1 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 relevantagreement, and the relevant activities of the arrangement must be agreed upon by the participants sharing thecontrol rights before making a decision. Where the Company and other joint venture parties jointly control theinvested entity and have rights to the net assets of the invested entity, the invested entity is the joint venture of theCompany.
Significant influence refers to the right to participate in making decisions relating to the financial and operationalpolicies of an enterprise, while not able to control or jointly control (with others) establishment of these policies.If the Company has significant influence on the invested enterprises, than such invested enterprises shall be thejoint venture of the Company.
22.2 Determination of initial investment cost
(1) Long-term equity investment formed by business combination
For a long-term equity investment in a subsidiary formed by a business combination under the same control, theinitial investment cost of the long-term equity investment is based on the share of the book value of the owner’sequity of the combined party obtained in the consolidated financial statements of the ultimate controlling party onthe combining date. The difference between the initial investment cost of long-term equity investment and thebook value of the consideration paid shall be used to adjust the equity premium in the capital reserve; when theequity premium in the capital reserve is insufficient to offset, adjust the retained earnings. If it is possible toexercise control over an investee under the same control due to additional investment, etc., adjust the equitypremium based on the difference between the initial investment cost of the long-term equity investment confirmedin accordance with the above principles and the book value of the long-term equity investment before thecombination plus the sum of the book value of the new valuable consideration for the shares obtained on thecombining 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 possibleto exercise control over an investee not under the same control due to additional investment, the sum of bookvalue of the equity investment originally held plus the cost of the additional investment is used as the initialinvestment 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 asinitial investment cost.
For long-term equity investments obtained through issuance of equity securities, then the fair value of suchsecurities shall be viewed as initial investment cost
22.3 Subsequent measurement and recognition of gains and losses
(1) Long-term equity investment measured by cost
The long-term equity investment for subsidiary shall be measured by cost, unless the investment qualities as heldfor sale. Other than payment actually paid for obtaining investment or cash dividend or profit included inconsideration which has been declared while not granted yet, the Company recognizes investment incomeaccording 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. Wherethe initial investment cost of a long-term equity investment exceeds the Group’s share of the fair value of theinvestee’s identifiable net assets at the time of acquisition, no adjustment is made to the initial investment cost.Where the initial investment cost is less than the Group’s share of the fair value of the investee’s identifiable netassets at the time of acquisition, the difference is recognized in profit or loss for the period. And adjusted the costsof long-term equity investment at the same time.
Return on investments and other comprehensive income is recognized respectively by shares of net gains andlosses realized by the invested company and other comprehensive income, and book value of such investment isadjusted accordingly. Profit or cash dividends pro rata distributed by the invested company are to minus bookvalue of the relative long-term investment. Book value of long-term investment is adjusted when changes occurother than net gains and losses, other comprehensive income and profit distribution of the invested company(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 equitychanges 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 obtainedand 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 theCompany, affiliated units and joint-ventures should calculated by proportion of shares-holding which should beoffset, than recognized investment gains/losses(except where the assets invested or sold constitute a business). Ifthe unrealized internal transaction losses with the investee are assets impairment losses, they will be fullyrecognized.
In addition to assuming obligations for additional losses, the company’s net losses to joint ventures or associatesare limited to the book value of long-term equity investments and other long-term equity that actually constitutesnet investment in joint ventures or associates write down to zero. If a joint venture or an associated enterpriserealizes net profits in the future, the company resumes recognizing its share of profits after the share of profitsmakes 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 equityinvestment shall be included in current period gains and losses.
Long-term equity investment accounted for by equity methodFor long-term equity investments accounted for by partial disposition equity method, the remaining equity is stillaccounted for by the equity method, the other comprehensive income recognized by the original equity methodshall be carried forward in a corresponding proportion on the same basis as the direct disposal of related assets orliabilities by the investee, other changes in owner's equity are carried forward to the current profit and loss on apro rata basis.
If the joint control or significant influence on the investee is lost due to the disposal of equity investment, for theother comprehensive income recognized by the original equity investment due to the adoption of the equitymethod, use the same basis as the investee to directly dispose of related assets or liabilities for accountingtreatment when terminating the adoption of the equity method, the same basis as the direct disposal of relatedassets or liabilities by the investee is used for accounting treatment, all other changes in owner's equity aretransferred 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 equitycan exercise joint control or exert significant influence on the investee when preparing individual financialstatements, the equity method shall be used for accounting and the remaining equity shall be deemed to beaccounted 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 disposalof related assets or liabilities by the investee in proportion, changes in other owners’ equity confirmed by theequity method are carried forward to the current profit and loss on a pro rata basis; if the remaining equity cannotexercise joint control or exert significant influence on the investee, it shall be recognized as a financial asset, andthe difference between its fair value and book value on the day when the control is lost is included in the currentprofit and loss, and all other comprehensive income and other owner's equity changes recognized before obtainingthe 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 isa package transaction, each transaction shall be accounted for as a transaction that disposes of the equityinvestment of the subsidiary and loses control. The difference between the cost of each disposal before the loss ofcontrol and the book value of the long-term equity investment corresponding to the equity being disposed of isfirst recognized as other comprehensive income in individual financial statements, and then transferred to thecurrent profit and loss of the loss of control when the control is lost. If it is not a package transaction, eachtransaction shall be accounted for separately.
23. Investment real estate
MeasurementMeasured by costDepreciation or amortization methodInvestment real estate is defined as the real estate with the purpose to earn rent or capital appreciation or both,including the rented land use rights and the land use rights which are held and prepared for transfer afterappreciation, the rented buildings (including the buildings for rent after completion of self-construction ordevelopment activities and the buildings under construction or development for future lease).
Subsequent expenditures related to investment real estate are included in the cost of investment real estate when itis probable that the related economic benefits will flow and the cost can be measured; otherwise, charged tocurrent gain/loss as incurred.
Current investment real estate of the Company are measured by cost. As for the investment real estate-rentalbuilding measured by cost, the depreciation policy is same as the fixed assets of the Company, the land use rightfor rental has the same amortization policy as intangible assets.
24. Fix assets
(1) Recognition
Fixed assets is defined as the tangible assets which are held for the purpose of producing goods, providingservices, lease or for operation & management, and have more than one year of service life. Fixed assets should berecognized for qualified the followed conditions at the same time:
① It is probable that the economic 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 economicbenefits are likely to flow in and their costs can be reliably measured; the book value of the replaced part isderecognized; all other subsequent expenditures are included in the current profit and loss when incurred.
(2)Depreciation methods
| Category | Method | Years of depreciation | Scrap value rate | Yearly depreciation rate |
| House and buildings | Straight-line depreciation | |||
| Production buildings | Straight-line depreciation | 20-35 | 5.00 | 2.71-4.75 |
| Non-production buildings | Straight-line depreciation | 20-40 | 5.00 | 2.38-4.75 |
| Temporary dormitory and simple room etc. | Straight-line depreciation | 5-15 | 5.00 | 6.33-19.00 |
| Gas storage bin | Straight-line depreciation | 20 | 5.00 | 4.75 |
| Silo | Straight-line depreciation | 50 | 5.00 | 1.90 |
| Wharf and supporting facilities | Straight-line depreciation | 50 | 5.00 | 1.90 |
| Machinery equipment | Straight-line depreciation | 5.00 | ||
| Other machinery equipment | Straight-line depreciation | 10-20 | 5.00 | 4.75-9.50 |
| Warehouse | Straight-line | 20 | 5.00 | 4.75 |
| transmission equipment | depreciation | |||
| Transport equipment | Straight-line depreciation | 3-10 | 5.00 | 9.50-31.67 |
| Electronic equipment and others | Straight-line depreciation | 2-10 | 5.00 | 9.50-47.50 |
Depreciation of fixed assets is classified and accrued by using the straight-line depreciation, and the depreciationrate is determined according to the type of fixed assets, the expected service life and the estimated net residualvalue rate. For fixed assets with provision for impairment, the amount of depreciation shall be determined infuture periods according to the book value after deducting the provision for impairment and based on the usablelife. If each component of the fixed assets has different service lives or provides economic benefits to theenterprise in different ways, select different depreciation rates or depreciation methods, and the depreciation isaccrued separately.
Depreciation policy for fixed assets leased under finance leases is consistent with that for owned fixed assets. If itis 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 willobtain the ownership of the leased asset at the expiry of the lease term, the leased asset shall be fully depreciatedover the shorter one of the lease term or its useful life.
(3) Recognition, measurement and depreciation of fixed assets held under finance leaseIf any of the following conditions are stipulated in the lease agreement signed by the Company and the lessee, itshall be recognized as a financial leased assets:
① ownership of the leased assets shall belong to the 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 assetswhen 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 leasecommencement 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 ofthe minimum lease payment as the book value of the leased asset and regards the minimum lease payment amountas the book value of the long-term payable, and the difference is regarded as unrecognized financing charges.
25. 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 expendituresincurred before the construction in progress reaches its intended usable state. When the construction in progressreaches the intended usable state, it will be transferred to fixed assets and depreciation will be accrued from thenext month.
26. Borrowing expenses
26.1 Recognition of the borrowing expenses capitalization
Borrowing expenses that attributed for purchasing or construction of assets that are complying start to becapitalized and counted as relevant assets cost; other borrowing expenses, reckoned into current gains and lossesafter expenses recognized while occurred.
Assets satisfying the conditions of capitalization are those assets of fixed, investment real estate etc. which need along period of time to purchase, construct, or manufacturing before becoming usable.
26.2 Period of capitalization
Capitalizing period was from the time star capitalizing until the time of suspended capitalization. The period forborrowing 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 interesttaken 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 capitalizationreached its predicted usable status or sale-able status, capitalization suspended for borrowing expenses.
26.3 Period of suspended
If purchasing, construction, or manufacturing process of an asset satisfying the conditions of capitalization issuspended abnormally for over 3 months, capitalizing of borrowing expenses shall be suspended; the suspendedassets that satisfying the conditions of capitalization meets the necessary procedure of reaching predicted usablestatus or for-sale status, capitalizing of borrowing expenses shall be resumed. The borrowing expenses occurred
during the period of suspended shall reckon into current gains and losses until the purchasing, construction, ormanufacturing process is resumed for capitalizing.
26.4 Capitalization rate of the borrowing costs, measurement of the capitalized amountAs for the special loans borrowed for the purchase, construction or production of assets eligible for capitalization,the borrowing costs are capitalized by deducting the actual borrowing costs incurred in current period of specialborrowing, the interest income earned by borrowing funds that have not ye been used, deposited in the bank or theinvestment income obtained from the temporary investment.
For the general borrowings used for the acquisition, construction or production of assets eligible for capitalization,the amount of borrowing costs that should be capitalized for general borrowings is calculated and determinedaccording to the weighted average of the asset expenditures of accumulated asset expenditures over the specialborrowings multiplying by the capitalization rate of the occupied general borrowings. The capitalization rate isdetermined based on the weighted average interest rate of general borrowings.
During the capitalization period, the exchange difference of the principal and interest of the specialized foreigncurrency 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 specializedforeign currency borrowing are included in the current profits and losses.
27. Biological assets
The Company's biological assets are productive biological assets, which are classified into productive biologicalassets, consumptive biological assets and biological assets for commonweal according to the purpose of holdingand the way in which economic benefits are realized.
Biological assets are initially measured at cost.
The necessary expenditures incurred by productive biological assets before reaching the intended production andoperation purposes constitute the cost of the productive biological assets. Subsequent expenditures incurred afterachieving the intended production purposes shall be included in the current profit and loss.
The necessary expenditures for consumptive biological assets before closure constitute the cost of consumptivebiological 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 ratiomethod when harvesting.
The Company’s biological assets are mainly tea trees. The company’s productive biological assets that achieve theintended 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 (5years), the residual value rate is 5%. At the end of each year, the company reviews the service life, expected netresidual value and depreciation methods. If the service life and expected net output value are different from theoriginal estimate, or there is a significant change in the realization of economic benefits, it will be used as anaccounting estimate change to adjust the service life or estimated net output value or change the depreciationmethod.
Biological assets for commonweal refer to biological assets whose main purpose is protection and environmentalprotection, including wind-breaking and sand-fixing forests, soil and water conservation forests, and waterconservation forests.
The cost of self-constructed biological assets for commonweal shall be determined in accordance with thenecessary expenditures such as cost of planting, tending fees, forest protection fees, forest culture and managementfacility fees, improved seed experiment fees, survey design fees, and indirect costs that should be apportionedbefore 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 assetimpairment reserve for biological assets for commonweal.
The balance of the disposal consideration from the sale, inventory loss, death or damage of biological assets afterdeducting the book value and relevant taxes shall be included in the current profit and loss.
28. Oil and gas assets
29. Right-of-use assets
30. Intangible assets
(1) Measurement, use of life and impairment testing
30.1.1 Measurement
①Initial measurement is made at cost when the Company acquires intangible assets;For those intangible assets purchased from outside, the purchase value, relevant taxes and other paymentsattributable to predicted purpose obtained should recognized as cost for this assets.
②Subsequent measurement
Analyzing and judging the service life of an intangible asset when they are acquired.
Those intangible assets with limited useful life are evenly amortized on straight basis from the date when theybecome usable to the end of expected useful life;Intangible assets for which it is impossible to predict the term
during which the assets can bring in economic benefits are viewed as intangible assets with indefinite lifewithout amortization.
30.1.2 Estimation of the service life of intangible assets with limited service life
| Item | Predicted useful life | Amortization method | Residual value rate | Basis |
| Land use right | Amortized the actual rest of life after certificate of land use right obtained | Straight-line method | 0.00% | Certificate of land use right |
| Forest tree use right | Service life arranged | Straight-line method | 0.00% | Protocol agreement |
| Trademark use right | 10-year | Straight-line method | 0.00% | Actual situation of the 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 |
| Patents and others | 20-year | Straight-line method | 0.00% | Actual situation of the Company |
30.1.3 Judgment basis on intangible assets with uncertain service life and review procedures for the servicelifeIntangible assets for which it is impossible to predict the term during which the assets can bring in economicbenefits are viewed as intangible assets with indefinite life. Intangible assets with indefinite life are notamortized during the holding period, and useful life is re-reviewed at the end of each accounting period. Incase that it is still determined as indefinite after such re-review, then impairment test will be conductedcontinuously in every accounting period.
(2)Accounting policy of the internal R&D expenditure
30.2.1 Specific criteria for dividing research and development stages
The expenditure for internal R&D is divided into research expenditure and development expenditure.
Research stage: stage of the investigation and research activities exercising innovative-ness for new science ortechnology knowledge obtained and understanding.
Development stage: stage of the activities that produced new or material advance materials, devices and productsthat by research results or other knowledge adoption in certain plan or design before the commercial production orusage.
Expenditures incurred during the research phase of internal R&D projects shall be recorded into the current profitand loss when incurred.
30.2.2 Standards for capitalization satisfaction of expenditure in development stateExpenditures in the research phase are included in the current profit and loss when they occur. Expenditures in thedevelopment phase that meet the following conditions at the same time are recognized as intangible assets, andexpenditures in the development phase that cannot meet the following conditions are included in the current profitand 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 owesa market or owes a market for itself; if the intangible assets will use internally, than show evidence of useful-ness;
④ Possess sufficient technique, financial resources and other resources for the development of kind of intangibleassets and has the ability for used or for sale;
⑤ The expenditure attributable to the exploitation stage for intangible assets could be measured reliably.
If it is not possible to distinguish between research stage expenditures and development stage expenditures, allresearch and development expenditures incurred are charged to current gain/loss.
Expenditure happened in development phase not satisfying the above conditions is included in currentperiod gains and losses when occurs. Development expenditure previously included in gains and losses inprevious periods will not be re-recognized as assets in later periods. Capitalized development expenditureis stated in balance sheet as development expenditure, and is transferred to intangible assets when theproject is ready for planned use.
31. Impairment of long term assets
The long-term assets as long-term equity investments, investment real estate measured at cost, fixed assets,construction in progress and intangible assets with certain service life are tested for impairment if there is anyindication that an asset may be impaired at the balance date. If the result of the impairment test indicates that therecoverable amount of the asset is less than its carrying amount, a provision for impairment and an impairmentloss are recognized for the amount by which the asset’s carrying amount exceeds its recoverable amount. Therecoverable amount is the higher of an asset’s fair value less costs to sell and the present value of the future cashflows expected to be derived from the asset. Provision for asset impairment is determined and recognized on theindividual asset basis. If it is not possible to estimate the recoverable amount of an individual asset, therecoverable amount of a group of assets to which the asset belongs is determined. A group of assets is the 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 assetsthat have not yet reached the usable state, regardless of whether there are signs of impairment, impairment testshall 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 businesscombination is apportioned to the relevant asset group according to reasonable methods from the date of purchase; ifit is difficult to apportion it to the relevant asset group, apportion it to the relevant asset group portfolio. Relevantasset group or assets portfolio is the asset group or combination of assets group that can benefit from the synergiesof the enterprise merger.
When conducting impairment test for relevant asset group with inclusion of goodwill, in case that there isindication of impairment for such asset group, impairment test would be firstly conducted in respect of the assetgroups without inclusion of goodwill. Then, it shall calculate the recoverable amount and determine thecorresponding impairment loss as compared to its carrying value. Then conduct an impairment test on the assetgroup or asset group portfolios containing goodwill, and compare their book value with the recoverable amount. Ifthe recoverable amount is lower than the book value, the amount of impairment loss first deducts the book valueof the goodwill allocated to the asset group or asset group portfolio, and then deducts the book value of the otherassets in proportion according to the proportion of the book value of the other assets other than goodwill in theasset group or asset group portfolio. Once recognized, asset impairment loss would not be reversed in futureaccounting period.
32. Long term prepaid expense
Long term prepaid expense represents the expense which the Company has occurred and shall be amortized in thecurrent and later periods with amortization period exceeding one year. Long-term prepaid expenses of theCompany includes expenditures on improvement of investment real estate, decoration fee and expenditure forfixed assets improvement etc. Long term prepaid expense is amortized during the beneficial period under straightline method.
33. Contract liabilities
Accounting policy applicable since 1 Jan. 2020The Company lists contract assets or contract liabilities in the balance sheet based on the relationship betweenperformance obligations and customer payments. The Company's obligation to transfer goods or provide servicesto customers for consideration received or receivable from customers is listed as contract liabilities. Contractassets and contract liabilities under the same contract are presented in net amount.
34. 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 profitor loss or relevant assets costs.
Regarding to the social insurance and housing funds that the Company paid for employees, the Company shouldrecognize corresponding employees benefits payable according to the appropriation basis and proportion asstipulated by relevant requirements and recognize the corresponding liabilities.
The employee welfare expenses incurred shall be recorded into the current gain/loss or the cost of relevant assetsaccording to the actual amount when actually incurred, and the non-monetary welfare shall be measured at fairvalue.
(2)Accounting treatment for post employment benefits
Defined contribution planThe Company pays basic endowment insurance and unemployment insurance for employees according to therelevant regulations of the local government. In the accounting period in which employees provide services for theCompany, the amount to be paid is calculated according to the local payment base and proportion, and isrecognized as a liability and included in current profit and loss or related asset cost. In addition, the Company alsoparticipates in the enterprise annuity plan/supplementary pension insurance fund approved by the relevant statedepartments. The Company pays a certain percentage of the total wages of employees to the annuity plan/localsocial insurance agency, and the corresponding expenditures are included in the current profit and loss or the costof related asset.
Defined benefit planThe Company assigns the benefit obligation arising from the defined benefit plan to the period during which theemployee 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 thedefined benefit plan asset is recognized as a net benefit or net asset of the defined benefit plan. If there is a surplus inthe defined benefit plan, the Company measures the net assets of the defined benefit plan by the lower of the surplusand 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 ofthe national debt matching with the defined benefit plan obligations deadline and currency or the high qualitycorporation 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 thedefined benefit plan are included in the current profit and loss or the related assets cost; the changes generated by theremeasurement 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 definedbenefit plan is terminated, the part that was originally included in other comprehensive income will be carriedforward 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 presentvalue 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 fromdismissal benefits shall be recognized on the earlier date of the following two, and shall be included in the currentprofit and loss: When the company cannot unilaterally withdraw the dismissal benefits provided by the dismissalplan or downsizing proposal; When the company confirms the costs or expenses related to the reorganizationinvolving 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 officebenefit and dismissal benefit.
For other long term staff benefits satisfying conditions under defined withdraw plan, the contribution payablesshall be recognized as liabilities and included in current gains and losses or relevant asset cost during theaccounting period in which the staff provides services to the Company.
35. Lease liability
36. Accrual liability
The Company will recognize the obligations related to contingencies as expected liabilities when they meet thefollowing 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 ofcurrent responsibilities.
While determined the best estimation, take the risks, uncertainty and periodic value of currency that connected tothe contingent issues into consideration. For major influence from periodic value of currency, determined bestestimation after discount on future relevant cash out-flow.
Where there is a continuous range of required expenditures, and the probability of occurrence of various resultswithin this range is the same, the best estimate is determined according to the median value in the range; in othercases, 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 outcomesand related probability calculation.
If all or part of the expenditure required to pay off the estimated liabilities is expected to be compensated by athird party, the compensation amount shall be separately recognized as an asset when it is basically certain that itcan be received, and the recognized compensation amount shall not exceed the book value of the estimatedliability.
The Company reviews the book value of estimated liabilities on the balance sheet date. If there is conclusiveevidence that the book value does not reflect the current best estimate, the book value will be adjusted accordingto the current best estimate.
37. Share-based payment
38. 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 anequity instrument at the time of initial recognition based on the contractual terms of preferred stocks/perpetualbonds 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 thefollowing conditions, the entire financial instrument or its components shall be classified as a financial liability atthe time of initial recognition.
(1) There are contractual obligations that the Company cannot unconditionally avoid fulfilling with the cashpayment 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 thederivative instrument is not settled with a fixed amount of their own equity instruments in exchange for a fixedamount 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 theissuer 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 initialrecognition.
39. Revenue
Accounting policy used for revenue recognition and measurementAccounting policy applicable since 1 Jan. 2020
39.1 accounting policy applicable for the revenue recognition and measurementThe Company fulfills the performance obligations in the contract, that is, revenue is recognized when thecustomer obtains control of the relevant goods or services. Obtaining control of related goods or services meansbeing 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 toeach individual performance obligation in accordance with the relative proportion of the stand-alone selling priceof 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 performanceobligation.
The transaction price refers to the amount of consideration that the Company expects to be entitled to receive dueto the transfer of goods or services to customers, excluding payments collected on behalf of third parties andpayments expected to be returned to customers. The Company determines the transaction price in accordance withthe 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-cashconsideration, consideration payable to customers and other factors. The Company determines the transactionprice that includes variable consideration at an amount that does not exceed the amount of accumulatedrecognized 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 theamount payable in cash when the customer obtains control of the goods or services, and uses the actual interestmethod to amortize the difference between the transaction price and the contract consideration during the contractperiod.
It belongs to the performance obligation fulfilled within a certain period of time when meeting one of thefollowing 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 sametime 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 theCompany has the right to collect payment for the accumulated performance part of the contract during the entirecontract period.
For performance obligations performed within a certain period of time, the Company recognizes revenueaccording to the performance progress during that period, except where the performance progress cannot bereasonably determined. The Company considers the nature of the goods or services and adopts the output methodor the input method to determine the progress of performance. When the performance progress cannot bereasonably determined, and the costs incurred are expected to be compensated, the Company shall recognize therevenue according to the amount of the costs incurred until the performance progress can be reasonablydetermined.
For performance obligations performed at a certain point in time, the Company recognizes revenue at the pointwhen the customer obtains control of the relevant goods or services. When judging whether a customer hasobtained 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 thecurrent 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 legalownership of the goods.?The Company has transferred the goods to the customer in kind, that is, the customer has taken possession of thegoods 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.
39.2 Specific principle
(1) Revenue from sales of goods: the sales revenue is recognized after the goods sold domestically have beendelivered 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 inthe contract. For export sales, the sales revenue is recognized after the goods have been sent and declared and therelevant 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 servicesprovided by the Company to the Shenzhen Municipal Government, the revenue is recognized when relevant laborservices occur, the revenue from grain and oil reserve services is calculated and confirmed monthly based on theactual amount of grain and oil reserves and the reserve price stipulated in the "Shenzhen Municipal GovernmentGrain Reserve Expenses Contract Operation Regulations" and the "Shenzhen Municipal Government EdibleVegetable Oil Government Reserve Expenses Contract Operation Regulations".
(3) Other income:
1) The amount of royalty revenue is calculated and determined in accordance with the charging time and methodagreed in the relevant contract or agreement;
2) Income from real estate, terminal warehouse and other property leasing and terminal docking business iscalculated and recognized as the property rental income, warehousing and logistics income.
Accounting policy before 1 Jan. 2020
39.3 Revenue from sale of goods
(1)Principal risks and rewards in the ownership of the goods are transferred to the buyer;
(2)The Company retains neither the continuing management rights normally associated with ownership noreffective control over the merchandise sold;
(3)The sales revenue can be measured reliably;
(4)The related economic benefits are likely to flow into the company;
(5)The relevant costs incurred or to be incurred can be measured in a reliable way.
The Company's product sales are divided into domestic sales and export sales. For domestic sales, the salesrevenue is recognized after the goods have been delivered and the relevant terms agreed in the contract are met;for export sales, the sales revenue is recognized after the goods have been sent and declared and the relevant termsagreed in the contract are met.
39.4 Rendering of services
(1) The amount of income can be reliably measured;
(2) The relevant economic benefits are likely to flow into the enterprise;
(3) The completion schedule of the transaction can be reliably determined;
(4) The costs incurred and to be incurred in the transaction can be reliably measured.
The total amount of labor service income is determined by the received or receivable contract or agreement price,except that the contract or agreement price received or receivable is not fair. On the balance sheet date, the currentlabor service income is determined by the amount that the total labor service income multiplies by the completionschedule and deducts the accumulated labor income from the previous accounting period. At the same time, thecurrent labor cost is carried forward by the amount that the total labor service cost multiplies by the completionschedule and deducts the accumulated labor cost from the previous accounting period.
If the results of the labor service transaction on the balance sheet date cannot be reliably estimated, they shall bedisposed as follows:
(1) If the labor costs incurred is estimated to be compensated, the labor service income shall be determinedaccording to the amount of labor costs incurred, and the labor costs shall be carried forward at the same amount.
(2) If the labor costs incurred is estimated not to be compensated, the labor costs incurred shall be included in thecurrent profit and loss, and the labor service income shall not be recognized.
When the contract or agreement signed by the Company with other enterprises includes the sale of goods and therendering of labor services, if the parts of the sales of goods and the parts of the rendering of labor service can bedistinguished and can be separately measured, treat the part of the sales of goods as the sales of goods, and treatthe part of the rendering of labor services as rendering of labor services. If the parts of the sales of goods and theparts of the rendering of labor service cannot be distinguished, or can be distinguished but cannot be separatelymeasured, treat the part of the sales of goods and the parts of the rendering of labor service both as the sales ofgoods. Recognize revenue for the grain and oil dynamic storage and rotation services provided by the Companyfor the Shenzhen Municipal Government when the relevant labor service activities occur. Specifically, monthlycalculate and recognize the government service income based on the actual storage grain and oil quantity and thestorage price stipulated by “Operational Procedures for Government Grain Storage All-in Cost of Shenzhen” and“Operational Procedures for Edible Vegetable Oil Government Reserve All-in Cost of Shenzhen”.
39.5 assignment of the right-to-use assets
Financial benefit attached to the contract is possibly inflow to the company; Overall income of the contract can bemeasured reliably. Determined the use right income for transaction assets respectively as followed:
1) Amount of interest income: determined by the time and effective interest rate of the currency capital used byother people.
2) Amount of income from use: determined by the charge time and calculation method agreed in the relevantcontract or agreement.
3) For the income from real estate, dock warehouse and other property leasing and terminal docking business,calculate and determine the rental income and warehousing logistics income according to the chargeable time andmethod as stipulated in the contract or agreement.
The accounting policy for revenue recognition are different due to the different business models in the same kindof business
40. Government Grants
40.1 Types
Governments grants of the Company refer to the monetary and non-monetary assets obtained from governmentfor free, and are divided into those related to assets and others related to revenues.
Government grants related to assets refer to those obtained by the Company and used for purchase or constructionof or otherwise to form long-term assets. Government subsidies related to revenue refer to those other thangovernment subsidies related to assets.
Specific criteria for classifying the government grants as asset-related by the Company are: government grantsacquired for the acquisition and construction or other formation of long-term assets
Specific criteria for classifying the government grants as income-related by the Company are: government grantsobtained by the Company other than those related to assets.
40.2 Recognition time point
At end of the period, if there is evidence show that the Company qualified relevant condition of fiscal supportingpolices and such supporting funds are predicted to obtained, than recognized the amount receivable as governmentgrants. After that, government grants shall recognize while actually received.
Government grants in the form of monetary assets are stated at the amount received or receivable.Government grants in the form of non-monetary assets are measured at fair value; if fair value cannot beobtained, a nominal amount (one yuan) is used. Government grants measured at nominal amount isrecognized immediately in profit or loss for the current period.
40.3 Accounting treatment
Based on the nature of economic business, the Company determines whether a certain type of government subsidybusiness should be accounted for by using the total amount method or the net amount method. In general, theCompany only chooses one method for similar or similar government subsidy services, and this method isconsistently applied to the business.
| Item | Calculation content |
| Based on gross method | All business of government grants |
Government subsidy related to assets is used to offset the book value of related assets or be recognized as deferredincome. If it is confirmed as deferred income, it shall be included in the current profit and loss in a reasonable andsystematic way by stages within the useful life of the relevant assets (those related to the Company’s dailyactivities are included in other income; those unrelated to the Company’s daily activities are included in thenon-operating income);
Government subsidy related to income that is used to compensate the Company's related costs or losses insubsequent periods is recognized as deferred income, and is included in the current profit and loss during the periodwhen the related costs or losses are recognized (those related to the Company’s daily activities are included in otherincome; those unrelated to the Company’s daily activities are included in the non-operating income) or used tooffset related costs or losses; those used to compensate the Company’s related costs, expenses or losses are directlyincluded 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 offsetrelated costs or losses.
The policy-related preferential loan interest discounts obtained by the Company shall be accounted for separatelyin the following two situations:
(1) The finance allocates interest discount funds to the lending bank. If the lending bank provides loans to theCompany at a policy-based preferential interest rate, the Company will use the actually received loan amount asthe entry value of the loan, and calculate related borrowing costs according to the loan principal and thepolicy-based preferential interest rate.(2)
(2) If the finance directly allocates interest discount funds to the Company, the Company will write down therelevant borrowing costs with the corresponding interest discount.
41. 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 businessmergers and transactions or events that are directly included in owner's equity (including other comprehensiveincome), 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 thedifference (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 islikely 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 likelyto 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, deferredincome tax liabilities are recognized, unless the Company can control the timing of the reversal of the temporarydifferences and the temporary differences are not likely to be reversed in the foreseeable future. For deductibletemporary differences related to investments in subsidiaries, associates and joint ventures, when the temporarydifferences are likely to be reversed in the foreseeable future and are likely to be used to deduct the taxableincome 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 theapplicable tax rate during the period when the relevant assets are expected to be recovered or the relevantliabilities 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 thatsufficient taxable income cannot be obtained in the future to offset the benefits of deferred income tax assets, thebook value of the deferred income tax assets shall be written down. When it is possible to obtain sufficient taxableincome, 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 andpay off liabilities at the same time, the current income tax assets and current income tax liabilities are presented atthe net amount after offsetting.
On the balance sheet date, deferred income tax assets and deferred income tax liabilities shall be listed as the netamount 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 anet basis;?Income tax assets and deferred income tax liabilities are related to the income tax levied by the same taxadministration department on the same taxation subject or related to different taxation subjects, however, in theperiod during which each important deferred income tax asset and liability are reversed in the future, the taxpayerinvolved intends to settle the current income tax assets and liabilities on a net basis or obtain assets and settleliabilities at the same time.
42. Lease
(1)Accounting treatment for operating lease
①The rental fee paid for renting the properties by the company are amortized by the straight-line method andreckoned in the current expenses throughout the lease term without deducting rent-free period. The initial directcosts related to the lease transactions paid by the company are reckoned in the current expenses.
When the lessor undertakes the expenses related to the lease that should be undertaken by the company, thecompany shall deduct the expenses from the total rental costs, share by the deducted rental costs during the leaseterm, and reckon in the current expenses.
② Rental obtained from assets leasing, during the whole leasing period without rent-free period excluded, shallbe amortized by straight-line method and recognized as leasing revenue. The initial direct costs paid with leasingtransaction 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 theentire lease period.
When the company undertakes the expenses related to the lease that should be undertaken by the lessor, thecompany shall deduct the expenses from the total rental income, and distribute by the deducted rental costs duringthe lease term.
(2)Accounting treatment for financing lease
①Assets lease-in by financing: On the beginning date of the lease, the entry value of leased asset shall be at thelower of the fair value of the leased asset and the present value of minimum lease payment at the beginning dateof the lease. Minimum lease payment shall be the entry value of long-term accounts payable, with differencerecognized as unrecognized financing expenses. Unrecognized financing expenses shall be reckoned in financialexpenses and amortized and using effective interest method during the leasing period. The initial direct expensesincurred by the Company are included in the value of the rented assets.
② Finance leased assets: on the lease commencement date, the company affirms the balance among the financelease 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 tothe rental transaction, the company reckons in the initial measurement of the finance lease receivables, andreduces the amount of income confirmed in the lease term.
43. Other important accounting policy and estimation
(1) Safety production expenses
The safety production expenses drawn by the Company in accordance with the national regulations are included inthe cost of relevant products or the current profit and loss, and are recorded in the “special reserve” account. Whenusing the drawn safety production expenses, directly offset the special reserve if it belongs to the expenseexpenditure. For fixed assets, the expenses incurred through the collection of “under construction” subjects shall berecognized as fixed assets when the safety project is completed and ready for use. At the same time, the specialreserve shall be offset according to the cost of forming the fixed assets, and accumulated depreciation of the sameamount shall be recognized. The fixed assets will no longer be depreciated in the future.
44. Changes of important accounting policy and estimation
(1)Changes of important accounting policies
√ Applicable □ Not applicable
| Content & reasons | Approval procedure | Note |
| The Company implemented the Accounting Standards for Business Enterprise No.14 - Revenue that revised by the Ministry of Finance on 1 January 2020.In accordance with the relevant regulations on the convergence of the old and new standards, the Company only adjusted the retained earnings at the beginning of 2020 and the amount of other related items in the financial statements for the cumulative impact of contracts that have not been completed on the date of first implementation, the comparative financial statements were not adjusted. | Approved by the 7th session of 10th BOD on 30 December 2019 |
(1) Implementation of the Accounting Standards for Business Enterprise No.14 - Revenue (Revised in 2017) (hereinafter referred toas New Revenue Standard)The Ministry of Finance revised the "Accounting Standards for Business Enterprises No. 14 - Revenue" in 2017. The revisedstandards stipulate that for the first implementation of the standards, the amount of retained earnings and other related items in thefinancial statements at the beginning of the year should be adjusted according to the cumulative impact, and the information in thecomparable period should not be adjusted.
The Company has implemented the new revenue standards from January 1, 2020. According to the standards, the Company only
adjusts the retained earnings at the beginning of 2020 and the amount of other related items in the financial statements for thecumulative impact of contracts that have not been completed on the date of first implementation, and does not make adjustments tothe comparative financial statements. The main impacts of the implementation of the standards are as follows:
| Content & reasons | Approval procedure | Item affected | Amount of impact on the balance dated 1 Jan. 2020 | |
| Consolidate | Parent company | |||
| The Company implemented the Accounting Standards for Business Enterprise No.14- Revenue that revised by the Ministry of Finance since 1 Jan. 2020. According to the convergence of relevant old and new standards, the Company only adjusts the amount of retained earnings at the beginning of 2020 and other related items in the financial statements for the cumulative effect of the contracts that have not been completed at the date of initial execution, and no adjustment is made to the comparative financial statement. | Approved by the 7th session of 10th BOD on 30 December 2019 | Contract liability | 134,935,456.98 | 3,137.80 |
| Account received in advance | -134,935,456.98 | -3,137.80 | ||
The impact of the implementation of the new revenue standards on relevant items in the financial statement for2020, as compared to the previous revenue standard, is as follow:
| Affected items of balance sheet | Amount of impact on the balance dated 31 Dec. 2020 | |
| Consolidate | Parent company | |
| Contract liability | 108,975,866.82 | 411.00 |
| Other current liability | 2,329,512.69 | 0.00 |
| Account received in advance | -111,305,379.51 | -411.00 |
| Affected items of profit statement | Amount of impact on amount incurred in 2020 | |
| Consolidate | Parent company | |
| Operating cost | 67,026,284.32 | 0.00 |
| Sales expenses | -67,026,284.32 | 0.00 |
(2) Implementation of Interpretation of Accounting Standards for Business Enterprises No.13The Ministry of Finance issued the Interpretation of Accounting Standards for Business Enterprises No.13 (Cai Kuai [2019] No.21 ,hereinafter referred to as Interpretation No.13) on 10 December 2019, and effective from 1 January 2020 without retroactiveadjustment required.
① Identification of related parties
Interpretation No. 13 clarifies that the following circumstances constitute a related party: a joint venture or an associated enterprisebetween an enterprise and other member units (including parent companies and subsidiaries) of the enterprise group to which itbelongs; a joint venture of the enterprise and other joint ventures or associated enterprises of the enterprise. In addition, InterpretationNo. 13 also clarifies that an enterprise with two or more than two parties only significantly affected by one party does not constitute arelated party, it also states that an associated enterprise includes the associated enterprise and its subsidiaries, and a joint ventureincludes the joint venture and its subsidiaries.
②Definition of business
Interpretation No. 13 completes the three elements of business composition, refines the judgment conditions of the businesscomposition, and introduces the "concentration ratio test" option to simplify to a certain extent the judgment of whether a portfolioobtained not under the same control constitutes a business, etc.
The Company has implemented Interpretation No. 13 from January 1, 2020, and the comparative financial statements have not beenadjusted. The implementation of Interpretation No. 13 has not had a significant impact on the Company's financial status andoperating results.
(3) Implementation of the "Interim Provisions on Accounting Treatment of Carbon Emissions Trading"On December 16, 2019, the Ministry of Finance issued the "Interim Provisions on the Accounting Treatment of Carbon EmissionsTrading" (CK [2019] No. 22), which is applicable to related enterprises in the key emission units that carry out carbon emissiontrading business in accordance with the "Interim Measures for the Administration of Carbon Emissions Trading" (hereinafter referredto as key emission enterprises). The provisions came into effect on January 1, 2020, and key emission enterprises should adopt theprospective application to apply the provisions.
The Company has implemented the provisions from January 1, 2020, and the comparative financial statements have not beenadjusted. The implementation of the provisions has not had a significant impact on the Company's financial status and operatingresults.
(5) Implementation of the "Regulations on Accounting Treatment of Rental Concessions Related to the COVID-19 Epidemic"On June 19, 2020, the Ministry of Finance issued the "Regulations on Accounting Treatment of Rental Reduction Related to the pandemic of COVID-19" ((2020) No. 10), which came into effect on June 19, 2020, allowing companies to adjust the relevant rent reduction that occurred between January 1, 2020 and the implementation date of the regulation. According to the regulation, companies could select simplified methods for accounting treatments for rent reduction and deferred payment of rents directly caused by the pandemic of COVID-19. We selected the simplified methods to account all the rental business, which met the requirements of the new regulation. We also adjusted the rent reduction in accordance to the regulation from January 1, 2020 to the effective date of the regulation. The revenue of rental reduced by 24,697,897.12 in 2020 as we selected the simplified methods to account our rental business.
(2) Changes of important accounting estimate
□ Applicable √Not applicable
(3)Adjustment on the relevant items of financial statement at beginning of the year when implemented thenew revenue standards and new leasing standards since 2020ApplicableWhether to adjust the items of balance sheet at the beginning of the year
√Yes □No
Consolidate balance sheet
In RMB
| Item | 2019-12-31 | 2020-01-01 | Adjustments |
| Current assets: | |||
| Monetary fund | 154,954,757.85 | 154,954,757.85 | |
| Settlement provisions | |||
| Capital lent | |||
| Trading financial assets | 1,166,209.72 | 1,166,209.72 | |
| Derivative financial assets | |||
| Note receivable | 1,909,720.38 | 1,909,720.38 | |
| Account receivable | 338,687,766.68 | 338,687,766.68 | |
| Account receivable financing | |||
| Accounts paid in advance | 9,202,930.71 | 9,202,930.71 | |
| Insurance receivable | |||
| Reinsurance receivables | |||
| Contract reserve of reinsurance receivable | |||
| Other account receivable | 25,758,695.07 | 25,758,695.07 | |
| Including: Interest receivable | |||
| Dividend receivable | |||
| Buying back the sale of financial assets | |||
| Inventory | 3,064,701,212.14 | 3,064,701,212.14 | |
| Contract asset |
| Assets held for sale | |||
| Non-current asset due within one year | |||
| Other current assets | 468,174,380.40 | 468,174,380.40 | |
| Total current assets | 4,064,555,672.95 | 4,064,555,672.95 | |
| Non-current assets: | |||
| Loans and payments on behalf | |||
| Creditors’ investment | |||
| Other creditors’ investment | |||
| Long-term account receivable | |||
| Long-term equity investment | 73,361,312.10 | 73,361,312.10 | |
| Other equity instrument investment | |||
| Other non-current financial assets | 57,500.00 | 57,500.00 | |
| Investment real estate | 269,704,937.17 | 269,704,937.17 | |
| Fix assets | 945,042,032.69 | 945,042,032.69 | |
| Construction in progress | 771,971,469.43 | 771,971,469.43 | |
| Productive biological asset | 397,386.56 | 397,386.56 | |
| Oil and gas asset | |||
| Right-of-use asset | |||
| Intangible assets | 589,167,059.47 | 589,167,059.47 | |
| Expense on Research and Development | |||
| Goodwill | |||
| Long-term expenses to be apportioned | 19,855,228.69 | 19,855,228.69 | |
| Deferred income tax assets | 39,082,710.96 | 39,082,710.96 | |
| Other non-current assets | 1,871,965.84 | 1,871,965.84 |
| Total non-current assets | 2,710,511,602.91 | 2,710,511,602.91 | |
| Total assets | 6,775,067,275.86 | 6,775,067,275.86 | |
| Current liabilities: | |||
| Short-term loans | 23,595,000.00 | 23,595,000.00 | |
| Loan from central bank | |||
| Capital borrowed | |||
| Tradable financial liability | |||
| Derivative financial liability | |||
| Note payable | |||
| Account payable | 266,123,470.98 | 266,123,470.98 | |
| Accounts received in advance | 137,211,832.00 | 2,276,375.02 | -134,935,456.98 |
| Contract liabilities | 134,935,456.98 | 134,935,456.98 | |
| Selling financial asset of repurchase | |||
| Absorbing deposit and interbank deposit | |||
| Security trading of agency | |||
| Security sales of agency | |||
| Wage payable | 195,076,576.55 | 195,076,576.55 | |
| Taxes payable | 37,047,613.47 | 37,047,613.47 | |
| Other account payable | 236,377,171.13 | 236,377,171.13 | |
| Including: Interest payable | 1,411,457.29 | 1,411,457.29 | |
| Dividend payable | 2,933,690.04 | 2,933,690.04 | |
| Commission charge and commission payable | |||
| Reinsurance payable | |||
| Liability held for sale | |||
| Non-current liabilities due within one year | 67,420,012.16 | 67,420,012.16 |
| Other current liabilities | 219,151,968.63 | 219,151,968.63 | |
| Total current liabilities | 1,182,003,644.92 | 1,182,003,644.92 | |
| Non-current liabilities: | |||
| Insurance contract reserve | |||
| Long-term loans | 835,912,556.41 | 835,912,556.41 | |
| Bonds payable | |||
| Including: preferred stock | |||
| Perpetual capital securities | |||
| Lease liability | |||
| Long-term account payable | 15,856,950.01 | 15,856,950.01 | |
| Long-term wage payable | |||
| Accrual liabilities | 3,500,000.00 | 3,500,000.00 | |
| Deferred income | 101,792,241.31 | 101,792,241.31 | |
| Deferred income tax liabilities | 12,563,752.22 | 12,563,752.22 | |
| Other non-current liabilities | |||
| Total non-current liabilities | 969,625,499.95 | 969,625,499.95 | |
| Total liabilities | 2,151,629,144.87 | 2,151,629,144.87 | |
| Owners’ equity: | |||
| Share capital | 1,152,535,254.00 | 1,152,535,254.00 | |
| Other equity instrument | |||
| Including: preferred stock | |||
| Perpetual capital securities | |||
| Capital public reserve | 1,422,892,729.36 | 1,422,892,729.36 | |
| Less: Inventory shares | |||
| Other comprehensive income |
| Reasonable reserve | 522.55 | 522.55 | |
| Surplus public reserve | 350,187,601.06 | 350,187,601.06 | |
| Provision of general risk | |||
| Retained profit | 1,495,135,080.60 | 1,495,135,080.60 | |
| Total owner’s equity attributable to parent company | 4,420,751,187.57 | 4,420,751,187.57 | |
| Minority interests | 202,686,943.42 | 202,686,943.42 | |
| Total owner’s equity | 4,623,438,130.99 | 4,623,438,130.99 | |
| Total liabilities and owner’s equity | 6,775,067,275.86 | 6,775,067,275.86 |
Explanation on adjustmentThe Ministry of Finance issued the revised "Accounting Standards for Business Enterprises No. 14 - Revenue" (CK[2017] No. 22) in2017, and the company has implemented the above new revenue standards since January 1, 2020. The company has adjusted"advance receipts" to "contract liabilities" for presentation according to the new revenue standards. According to the convergenceregulations, enterprises that implement the standards for the first time should adjust the amount of retained earnings at the beginningof the period and other related items in the financial statements based on the cumulative impact of the first implementation of thestandards, and no adjustments should be made to comparable period information.Balance sheet of parent company
In RMB
| Item | 2019-12-31 | 2020-01-01 | Adjustments |
| Current assets: | |||
| Monetary fund | 16,272,394.90 | 16,272,394.90 | |
| Trading financial assets | 1,166,209.72 | 1,166,209.72 | |
| Derivative financial assets | |||
| Note receivable | |||
| Account receivable | 7,967.34 | 7,967.34 | |
| Account receivable financing | |||
| Accounts paid in advance | |||
| Other account receivable | 994,149,247.39 | 994,149,247.39 | |
| Including: Interest receivable |
| Dividend receivable | 260,000,000.00 | 260,000,000.00 | |
| Inventory | 2,954,343.26 | 2,954,343.26 | |
| Contract asset | |||
| Assets held for sale | |||
| Non-current asset due within one year | |||
| Other current assets | 675,966.29 | 675,966.29 | |
| Total current assets | 1,015,226,128.90 | 1,015,226,128.90 | |
| Non-current assets: | |||
| Creditors’ investment | |||
| Other creditors’ investment | |||
| Long-term account receivable | |||
| Long-term equity investment | 3,715,425,854.77 | 3,715,425,854.77 | |
| Other equity instrument investment | |||
| Other non-current financial assets | |||
| Investment real estate | 17,458,094.37 | 17,458,094.37 | |
| Fix assets | 31,382,741.25 | 31,382,741.25 | |
| Construction in progress | |||
| Productive biological asset | 397,386.56 | 397,386.56 | |
| Oil and gas asset | |||
| Right-of-use asset | |||
| Intangible assets | 6,787,359.94 | 6,787,359.94 | |
| Expense on Research and Development | |||
| Goodwill | |||
| Long-term expenses to be apportioned | 380,772.60 | 380,772.60 | |
| Deferred income tax assets |
| Other non-current assets | |||
| Total non-current assets | 3,771,832,209.49 | 3,771,832,209.49 | |
| Total assets | 4,787,058,338.39 | 4,787,058,338.39 | |
| Current liabilities: | |||
| Short-term loans | |||
| Tradable financial liability | |||
| Derivative financial liability | |||
| Note payable | |||
| Account payable | 115,458.38 | 115,458.38 | |
| Accounts received in advance | 3,137.80 | 0.00 | -3,137.80 |
| Contract liabilities | 3,137.80 | 3,137.80 | |
| Wage payable | 17,230,138.89 | 17,230,138.89 | |
| Taxes payable | 2,607,719.37 | 2,607,719.37 | |
| Other account payable | 257,459,190.14 | 257,459,190.14 | |
| Including: Interest payable | |||
| Dividend payable | 2,933,690.04 | 2,933,690.04 | |
| Liability held for sale | |||
| Non-current liabilities due within one year | |||
| Other current liabilities | |||
| Total current liabilities | 277,415,644.58 | 277,415,644.58 | |
| 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 | 3,500,000.00 | 3,500,000.00 | |
| Deferred income | 45,020.68 | 45,020.68 | |
| Deferred income tax liabilities | |||
| Other non-current liabilities | |||
| Total non-current liabilities | 3,545,020.68 | 3,545,020.68 | |
| Total liabilities | 280,960,665.26 | 280,960,665.26 | |
| Owners’ equity: | |||
| Share capital | 1,152,535,254.00 | 1,152,535,254.00 | |
| Other equity instrument | |||
| Including: preferred stock | |||
| Perpetual capital securities | |||
| Capital public reserve | 3,018,106,568.27 | 3,018,106,568.27 | |
| Less: Inventory shares | |||
| Other comprehensive income | |||
| Reasonable reserve | |||
| Surplus public reserve | 77,783,172.92 | 77,783,172.92 | |
| Retained profit | 257,672,677.94 | 257,672,677.94 | |
| Total owner’s equity | 4,506,097,673.13 | 4,506,097,673.13 | |
| Total liabilities and owner’s equity | 4,787,058,338.39 | 4,787,058,338.39 |
Explanation on adjustment
(4) Retrospective adjustment of early comparison data description when implemented the new revenuestandards and new leasing standards since 2020
□ Applicable √Not applicable
45. Other
VI. Taxes
1. Type of tax and rate for main applicable tax
| Taxes | Basis | Rate |
| VAT | The output tax is calculated on the basis of the sales of goods and the taxable service income calculated according to the tax law. After deducting the input tax amount that is allowed to be deducted in the current period, the difference part is the value-added tax payable. | 13.00%, 9.00%, 6.00%, 5.00%, 3.00% |
| Urban maintenance and construction tax | Calculated according to the actual value-added tax and consumption tax | 5.00%, 7.00% |
| Enterprise income tax | Enterprise income tax | Calculated according to taxable income |
| Educational surtax | Calculated according to the actual value-added tax and consumption tax | 3.00% |
| Local education surcharge | Calculated according to the actual value-added tax and consumption tax | 2.00% |
| Property tax | Price-based resource tax, 1.2 percent of the remaining value after deducting 20% of the original value of the property; 12 percent of the rental income if levy by rents. | 1.20%, 12.00% |
| Deed tax | When the property right of the real property is transferred, the contract price shall be paid to the owner of the property right in one lump sum | 3.00%-5.00% |
Rate of income tax for different taxpaying body:
| Taxpaying body | Rate of income tax |
| Shenzhen Cereals Holdings Co., Ltd. | 25.00% |
| Shenzhen Cereals Group Co., Ltd. (hereinafter referred to as "SZCG") | 25.00%, Some businesses are tax-free |
| Shenzhen Hualian Grain & Oil Trade Co., ltd. (hereinafter referred to as "Hualian Cereals and Oil") | 25.00% |
| Shenzhen Flour Co., Ltd. (hereinafter referred to as "Shenzhen Flour") | Tax-free |
| Shenliang Quality Inspection Co., Ltd. (hereinafter referred to | 5.00% |
| as "Shenliang Quality Inspection ") | |
| Hainan Shenliang Oil & Food Co., Ltd. (hereinafter referred to as "Hainan Oil & Food") | 5.00% |
| Shenliang Doximi Business Co., Ltd. (hereinafter referred to as "Doximi") | 25.00% |
| Shenzhen Shenliang Big Kitchen Food Supply Chain Co., Ltd(hereinafter referred to as "Big Kitchen ") | 25.00% |
| Shenzhen Shenliang Storage (Yingkou) Co., Ltd. (hereinafter referred to as "Yingkou Storage") | 25.00% |
| Shenzhen Shenliang Cold Chain Logistics Co., Ltd. (hereinafter referred to as "Cold Chain Logistics") | 15.00% |
| Shenzhen Shenliang Real Estate Development Co., Ltd (hereinafter referred to as "Shenliang Real Estate ") | 25.00% |
| Shenzhen Shenliang Property Management Co., Ltd. (hereinafter referred to as "Shenliang Property") | 5.00% |
| Dongguan Shenliang Logistics Co., Ltd. (hereinafter referred to as "Dongguan Logistics") | 25.00% |
| Dongguan International Food Industrial Park Development Co., Ltd. (hereinafter referred to as "International Food") | 25.00% |
| Dongguan Shenliang Oil & Food Trade Co., Ltd. (hereinafter referred to as "Dongguan Oil & Food") | 25.00% |
| Shuangyashan Shenliang Zhongxin Cereals Base Co., Ltd. (hereinafter referred to as "Shuangyashan") | 25.00% |
| Heilongjiang Hongxinglong Nongken Shenxin Cereals Industrial Park Co., ltd. (hereinafter referred to as " Hongxinglong") | 25.00% |
| Shenzhen Shenbao Huacheng Science and Technology Co.,Ltd (hereinafter referred to as "Shenbao Huacheng") | 25.00% |
| Wuyuan Ju Fang Yong Tea Industry Co., Ltd.(hereinafter referred to as "Wuyuan Ju Fang Yong") | 15.00% |
| Shenzhen Shenshenbao Investment Co., Ltd. (hereinafter referred to as "Shenbao Investment") | 25.00% |
| Shenzhen Shenshenbao Tea Culture Commercial Management Co., Ltd. (hereinafter referred to as "Shenbao Tea Culture") | 25.00% |
| Hangzhou Ju Fang Yong Holding Co., Ltd (hereinafter referred to as "Ju Fang Yong Holding ") | 25.00% |
| Hangzhou Ju Fang Yong Trading Co., Ltd. (hereinafter referred to as "Ju Fang Yong Trading ") | 25.00% |
| Hangzhou Fuhaitang Catering Management Chain Co., Ltd. | 25.00% |
| (hereinafter referred to as "Fuhaitang Catering") | |
| Hangzhou Fuhaitang Tea Ecological Technology Co., Ltd. (hereinafter referred to as "Fuhaitang Ecological") | 25.00% |
| Mount Wuyi Shenbao Rock Tea Co., Ltd. (hereinafter referred to as "Shenbao Rock Tea") | 25.00% |
| Yunnan Shenbao Pu’er Tea Supply Chain Management Co., Ltd. (hereinafter referred to as "Pu’er Tea Supply Chain") | 25.00% |
| Shenzhen Shenbao Sanjing Food Beverage Development Co., Ltd. (hereinafter referred to as "Shenbao Sanjing") | 25.00% |
| Yunnan Pu’er Tea Trading Center Co., Ltd. (hereinafter referred to as "Pu’er Tea Trading Center") | 25.00% |
| Huizhou Shenbao Food Co., Ltd. (hereinafter referred to as "Shenbao Food") | 25.00% |
| Huizhou Shenbao Technology Co., Ltd. (hereinafter referred to as "Huizhou Shenbao") | 25.00% |
| Shenzhen Shenbao Property Management Co., Ltd. (hereinafter referred to as "Shenbao Property") | 10.00% |
| Shenzhen Shenbao Technology Center Co., Ltd. (hereinafter referred to as "Shenbao Technology") | 25.00% |
| Shenzhen Shenbao Industrial & Trading Co., Ltd(hereinafter referred to as "Shenbao Industry and Trade") | 25.00% |
2. Tax preferential
1. VAT discounts and approval
According to the “Notice of the Ministry of Finance and the State Administration of Taxation on the IssuesConcerning the VAT Collection and Exemption of Grain Enterprises (CSZ [1999] No. 198)” and “Shenzhen TaxService, State Taxation Administration and Shenzhen Finance Bureau SGSF (SCF [1999] No.428)”, confirmingthat SZCG, the Company’s subsidiary, and its subsidiaries, are state-owned grain purchase and sale enterprisesthat undertake grain collection and storage tasks for Shenzhen, the grain sold is subject to tax-free declaration byrule and enjoys the exemption from VAT. In addition, according to the stipulation of the “Announcement of StateAdministration of Taxation on Relevant Management Matters After Clarifying the Cancellation of the Approval ofSome VAT Preferential Policies” (SAT Announcement 2015 No. 38), the approval for exemption from VAT andthe involved tax review and approval procedures for the state-owned grain enterprises that undertake graincollection and storage tasks, other grain enterprises that operate tax-free projects and enterprises that have ediblevegetable oil sales business for government reserves are cancelled and changed to record management. Thetaxpayer does not change the content of the record materials during the period of tax exemption can be put on aone-time record. In December 2013, SZCG obtained the notice of the VAT preferential record (SGSFJBM [2013]No.2956) from Shenzhen Futian State Administration of Taxation. In the case of no change in policy, this limited
filing period started on January 1
st, 2014.The VAT input tax amount of the preferential item was separatelyaccounted for, and the input VAT calculation method cannot be changed within 36 months after the selection. Asof December 31, 2018, the tax exemption policy has been in effect since its filing in 2014, and the company’s VATinput tax has not changed since it was accounted for separately in 2014, so the company continues to enjoy the taxpreference.
2. Stamp duty, house property tax, and urban land use tax preferences
According to the stipulations of “Notice of the Ministry of Finance and the State Administration of Taxation onthe Relevant Tax Policies Concerning Some National Reserved Commodities (CS [2019] No. 77)”, anddocuments of Guangdong Province Department of Finance, Guangdong Provincial Taxation Bureau of the StateAdministration of Taxation and Guangdong Provincial Food and Material Reserve Bureau (Yue Cai Shui[2020]No.2, confirming that the fund account book of SZCG, the Company’s subsidiary, and its direct depots isexempt from stamp duty, confirming that the written purchase and sale contracts of SZCG in the process ofundertaking the commodity reserve business are exempt from stamp duty, and confirming that SZCG’s houseproperty and land used for the commodity reserve business are exempt from house property tax and urban landuse tax. The execution time limit for this tax preference policy is up to December 31, 2021.
3. Enterprise income tax
(1) The Company’s subsidiary, Wuyuan Jufangyong, obtained the “High-tech Enterprise Certificate” (Certificatenumber is GR201836000703) jointly issued by the Science and Technology Department of Jiangxi Province, theFinance Department of Jiangxi Province, and Jiangxi Provincial Tax Service, State Taxation Administration onAugust 13, 2018, which is valid for three years. According to the relevant preferential policies of the state forhigh-tech enterprises, the qualified high-tech enterprises shall pay the corporate income tax at a reduced incometax rate of 15% within three years from the year of the determination, and Wuyuan Jufangyong enjoys the taxpreferential policy from 2018 to 2020.
(2) 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), thegovernment service income obtained by SZCG, the Company’s subsidiary, and its subsidiaries from thegovernment’s grain reserve business is a special-purpose fiscal fund, which can be used as non-taxable income ifeligible and is deducted from the total income when calculating the taxable income. The expenses arising from theabove-mentioned non-taxable income for expenditure shall not be deducted when calculating the taxable income;the calculated depreciation and amortization of the assets formed by non-taxable income for expenditure shall notbe deducted when calculating the taxable income.
(3) Shenzhen Flour, a subsidiary of the Company, is a flour primary processing enterprise, according to thestipulations of the “Notice on Issuing the Scope (Trial) of Primary Processing of Agricultural Products Applicableto the Corporate Income Tax Preferential Policy (CS [2008] No. 149)” and the “Supplementary Notice on the
Scope of Primary Processing of Agricultural Products Applicable to the Corporate Income Tax Preferential Policyof the Ministry of Finance and the State Administration of Taxation” (CS [2011] No. 26), the wheat primaryprocessing is exempt from income tax.(4)
(5) According to the Article one of the “Notice of the Ministry of Finance and the State Administration ofTaxation on the Corporate Income Tax Preferential Policies and Preferential Catalogue for Guangdong HengqinNew District, Fujian Pingtan Comprehensive Experimental Zone, and Shenzhen Qianhai Shenzhen-Hong KongModern Service Industry Cooperation Zone” (CS [2014] No.26), levy the corporate income tax at a reducedincome tax rate of 15% for the encouraged industrial enterprises located in Hengqin New District, PingtanComprehensive Experimental Zone and Qianhai Shenzhen-Hong Kong Modern Service Industry CooperationZone. The Company’s subsidiaries, Shenliang Cold-Chain Logistic and Shenliang Big Kitchen, are registered inShenzhen Qianhai Cooperation Zone and meet the preferential tax conditions, according to the relevant policies inthe Cooperation Zone, their income tax enjoys a tax preference of 15%, and this preferential tax policy shall be upto December 31, 2020.(6)
(5) According to Article II of the "Notice of the State Taxation Administration and Ministry of Finance on theImplementation of Inclusive Tax Relief Policies for Small and Micro Enterprises" (CS[2029] No. 13), the portionof the annual taxable income of small, low-profit enterprises that does not exceed 1 million yuan will be includedin the taxable income by 25%, and the corporate income tax will be paid at a tax rate of 20%. The portion of theannual taxable income of small, low-profit enterprises exceeding 1 million yuan but not exceeding 3 million yuanwill be included in the taxable income by 50%, and the corporate income tax will be paid at a tax rate of 20%. TheCompany’s subsidiaries, Quality Inspection, Hainan Grain and Oil and SZCH Property, are small and low-profitenterprises that meet the conditions for preferential taxation, and their income tax enjoys a 5% tax preference; theCompany’s subsidiary Shenbao Property is a small and low-profit enterprise that meets the conditions forpreferential taxation, and its income tax enjoys a 10% tax preference.
3. Other
VII. Annotation to main items of consolidated financial statements
1. Monetary funds
In RMB
| Item | Ending balance | Opening balance |
| Cash on hand | 62,642.11 | 191,650.33 |
| Cash in bank | 189,169,821.01 | 154,658,586.69 |
| Other monetary fund | 1,261,762.82 | 104,520.83 |
| Total | 190,494,225.94 | 154,954,757.85 |
Other explanation: The Company did not has account pledge, freeze or has potential risks in collection ended as 31 December 2020.
2. Tradable financial assets
In RMB
| Item | Ending balance | Opening balance |
| Financial assets measured by fair value and with variation reckoned into current gains/losses | 160,621,806.51 | 1,166,209.72 |
| Including: | ||
| Equity investment instrument | 621,806.51 | 1,166,209.72 |
| Structured financial products | 160,000,000.00 | |
| Including: | ||
| Total | 160,621,806.51 | 1,166,209.72 |
Other explanation:
3. Derivative financial assets
In RMB
| Item | Ending balance | Opening balance |
Other explanation:
4. Note receivable
(1) Category
In RMB
| Item | Ending balance | Opening balance |
| Bank acceptance bill | 2,213,426.00 | 1,909,720.38 |
| Total | 2,213,426.00 | 1,909,720.38 |
In RMB
| Category | Ending balance | Opening balance | ||||||||
| Book balance | Bad debt provision | Book value | Book balance | Bad debt provision | Book value | |||||
| Amount | Ratio | Amount | Accrual ratio | Amount | Ratio | Amount | Accrual ratio | |||
| Including: | ||||||||||
| Including: | ||||||||||
Bad debt provision accrual on single basis:
In RMB
| Name | Ending balance | |||
| Book balance | Bad debt provision | Accrual ratio | Accrual causes | |
Bad debt provision accrual on portfolio:
In RMB
| Name | Ending balance | ||
| Book balance | Bad debt provision | Accrual ratio | |
Explanation on portfolio determines:
If the provision for bad debts of note receivable is made in accordance with the general model of expected credit losses, please refer tothe disclosure of other account receivables to disclose related information about bad-debt provisions:
□ Applicable √Not applicable
(2) Bad debt provision accrual, collected or reversal in the period
Bad debt provision accrual in the period:
In RMB
| Category | Opening balance | Amount changed in the period | Ending balance | |||
| Accrual | Collected or reversal | Written-off | Other | |||
Including major amount bad debt provision that collected or reversal in the period:
□ Applicable √Not applicable
(3) Note receivable that pledged at period-end
In RMB
| Item | Amount pledged at period-end |
(4) Notes endorsement or discount and undue on balance sheet date
In RMB
| Item | Amount derecognition at period-end | Amount not derecognition at period-end |
(5) Notes transfer to account receivable due for failure implementation by drawer at period-end
In RMB
| Item | Amount transfer to account receivable at period-end |
Other explanation
(6) Note receivable actually written-off in the period
In RMB
| Item | Amount written-off |
Including important note receivable that written-off:
In RMB
| Enterprise | Nature | Amount written-off | Written-off causes | Procedure of written-off | Resulted by related transaction (Y/N) |
Explanation on note receivable written-off:
5. Account receivable
(1) Category
In RMB
| Category | Ending balance | Opening balance | ||||||||
| Book balance | Bad debt provision | Book value | Book balance | Bad debt provision | Book value | |||||
| Amount | Ratio | Amount | Accrual ratio | Amount | Ratio | Amount | Accrual ratio | |||
| Account receivable with bad debt provision accrual on a single basis | 99,461,835.19 | 33.33% | 96,675,238.63 | 97.20% | 2,786,596.56 | 103,361,342.42 | 23.40% | 99,663,780.43 | 96.42% | 3,697,561.99 |
| Including: | ||||||||||
| Account receivable with single significant amount and withdrawal bad debt provision on single basis | 10,455,627.54 | 3.50% | 10,455,627.54 | 100.00% | 10,455,627.54 | 2.36% | 10,455,627.54 | 100.00% | ||
| Account receivable with single minor amount but with bad debts provision accrued on a single basis | 89,006,207.65 | 29.83% | 86,219,611.09 | 96.87% | 2,786,596.56 | 92,905,714.88 | 21.04% | 89,208,152.89 | 96.02% | 3,697,561.99 |
| Account receivable with bad debt provision accrual on portfolio | 198,936,140.29 | 66.67% | 3,411,634.68 | 1.71% | 195,524,505.61 | 338,299,930.10 | 76.60% | 3,309,725.41 | 0.98% | 334,990,204.69 |
| Including: | ||||||||||
| Combination of sales receivables | 123,378,031.83 | 41.35% | 3,411,634.68 | 2.77% | 119,966,397.15 | 154,655,575.22 | 35.02% | 3,309,725.41 | 2.14% | 151,345,849.81 |
| Specific object combinations | 75,558,108.46 | 25.32% | 75,558,108.46 | 183,644,354.88 | 41.58% | 183,644,354.88 | ||||
| Total | 298,397,975.48 | 100.00% | 100,086,873.31 | 198,311,102.17 | 441,661,272.52 | 100.00% | 102,973,505.84 | 338,687,766.68 |
Bad debt provision accrual on single basis:
In RMB
| Name | Ending balance | |||
| Book balance | Bad debt provision | Accrual ratio | Accrual causes | |
| Guangzhou Jinhe Feed Co., Ltd | 10,455,627.54 | 10,455,627.54 | 100.00% | Slightly possibly taken back |
| Shenzhen Faqun Industry Co., Ltd. | 4,582,156.00 | 4,582,156.00 | 100.00% | Slightly possibly taken back |
| Li Shaoyu owes for goods | 2,929,128.53 | 2,929,128.53 | 100.00% | Slightly possibly taken back |
| Hengyang Feed factory | 2,591,566.65 | 2,591,566.65 | 100.00% | Slightly possibly taken back |
| Zhuhai Doumen Huabi Feed Co., Ltd. | 2,396,327.14 | 2,396,327.14 | 100.00% | Slightly possibly taken back |
| Chongqing Zhongxing Food Industry Co., Ltd. | 2,354,783.30 | 2,354,783.30 | 100.00% | Slightly possibly taken back |
| Shenzhen Buji Agricultural Products Wholesale Center Market Xingmin Commercial Bank | 1,534,512.45 | 1,534,512.45 | 100.00% | Slightly possibly taken back |
| Cao Shengyun | 1,429,745.00 | 1,429,745.00 | 100.00% | Slightly possibly taken back |
| Huaxing Feed Factory, Shunde District, Foshan City | 1,290,274.22 | 1,290,274.22 | 100.00% | Slightly possibly taken back |
| Shanghai office | 1,059,295.90 | 1,059,295.90 | 100.00% | Slightly possibly taken back |
| Shenzhen Dihuan Investment Development Company | 1,045,356.50 | 1,045,356.50 | 100.00% | Slightly possibly taken back |
| Other single provision | 67,793,061.96 | 65,006,465.40 | 95.89% | Slightly possibly taken back |
| Total | 99,461,835.19 | 96,675,238.63 | -- | -- |
Bad debt provision accrual on single basis:
In RMB
| Name | Ending balance | |||
| Book balance | Bad debt provision | Accrual ratio | Accrual causes | |
Bad debt provision accrual on portfolio:
In RMB
| Name | Ending balance | ||
| Book balance | Bad debt provision | Accrual ratio | |
| Combination of sales receivables | 123,378,031.83 | 3,411,634.68 | 2.77% |
| Specific object combinations | 75,558,108.46 | ||
| Total | 198,936,140.29 | 3,411,634.68 | -- |
Explanation on portfolio determines:
Bad debt provision accrual on portfolio:
In RMB
| Name | Ending balance | ||
| Book balance | Bad debt provision | Accrual ratio | |
Explanation on portfolio determines:
If the provision for bad debts of account receivable is made in accordance with the general model of expected credit losses, please referto the disclosure of other account receivables to disclose related information about bad-debt provisions:
□ Applicable √Not applicable
By account age
In RMB
| Account age | Ending balance |
| Within one year (including 1-year) | 192,201,544.91 |
| 1-2 years | 7,216,363.01 |
| 2-3 years | 1,051,322.17 |
| Over 3 years | 97,928,745.39 |
| 3-4 years | 827,464.25 |
| 4-5 years | 5,079,135.94 |
| Over 5 years | 92,022,145.20 |
| Total | 298,397,975.48 |
(2) Bad debt provision accrual, collected or reversal in the period
Bad debt provision accrual in the period:
In RMB
| Category | Opening balance | Amount changed in the period | Ending balance | |||
| Accrual | Collected or reversal | Written-off | Other | |||
| Bad debt provision accrual on single basis | 99,663,780.43 | 121,543.48 | 1,236,198.70 | 1,873,886.58 | 96,675,238.63 | |
| Sales receivable | 3,309,725.41 | 104,811.01 | 2,901.74 | 3,411,634.68 | ||
| Total | 102,973,505.84 | 226,354.49 | 1,236,198.70 | 1,876,788.32 | 100,086,873.31 | |
Including major amount bad debt provision that collected or reversal in the period:
In RMB
| Enterprise | Amount collected or reversal | Collection way |
(3) Account receivable actually written-off in the period
In RMB
| Item | Amount written-off |
| Account receivable actually written off | 1,876,788.32 |
Including major account receivable written-off:
In RMB
| Enterprise | Nature | Amount written-off | Written-off causes | Procedure of written-off | Resulted by related transaction (Y/N) |
Explanation on account receivable written-off:
(4) Top 5 account receivables at ending balance by arrears party
In RMB
| Enterprise | Ending balance of accounts receivable | Proportion in total receivables at ending balance | Bad debt preparation ending balance |
| First | 74,089,456.31 | 24.83% | |
| Second | 10,455,627.54 | 3.5% | 10,455,627.54 |
| Third | 7,901,520.00 | 2.65% | 79,015.20 |
| Fourth | 7,129,402.50 | 2.39% | 71,294.03 |
| Fifth | 6,282,778.75 | 2.11% | 62,827.79 |
| Total | 105,858,785.10 | 35.48% |
(5) Account receivable derecognition due to financial assets transfer
(6) Assets and liabilities resulted by account receivable transfer and continues involvementOther explanation:
6. Account receivable financing
In RMB
| Item | Ending balance | Opening balance |
Changes of account receivable financing and change of fair value in the period
□ Applicable √Not applicable
If the impairment provision of account receivable financing is made in accordance with the general model of expected credit losses,please refer to the disclosure of other account receivables to disclose related information about impairment provision:
□ Applicable √Not applicable
Other explanation:
7. Accounts paid in advance
(1) By account age
In RMB
| Account age | Ending balance | Opening balance | ||
| Amount | Ratio | Amount | Ratio | |
| Within one year | 26,384,747.13 | 97.23% | 8,782,989.64 | 95.44% |
| 1-2 years | 616,328.73 | 2.27% | 200,837.84 | 2.18% |
| 2-3 years | 61,695.87 | 0.23% | 59,439.42 | 0.65% |
| Over 3 years | 73,492.11 | 0.27% | 159,663.81 | 1.73% |
| Total | 27,136,263.84 | -- | 9,202,930.71 | -- |
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
| Prepaid objects | Ending balance | Proportion in of total prepayment balance at the end of period (%) |
| First | 12,559,000.00 | 46.28 |
| Second | 5,355,000.00 | 19.73 |
| Three | 2,064,220.18 | 7.61 |
| Fourth | 1,516,945.00 | 5.59 |
| Fifth | 1,297,244.00 | 4.78 |
| Total | 22,792,409.18 | 83.99 |
Other explanation:
8. Other account receivable
In RMB
| Item | Ending balance | Opening balance |
| Other account receivable | 22,631,043.66 | 25,758,695.07 |
| Total | 22,631,043.66 | 25,758,695.07 |
(1) Interest receivable
1) Category
In RMB
| Item | Ending balance | Opening balance |
2) Significant overdue interest
In RMB
| Borrower | Ending balance | Overdue time | Overdue causes | Whether impairment occurs and its judgment basis |
Other explanation:
3) Accrual of bad debt provision
□ Applicable √Not applicable
(2) Dividend receivable
1) Category
In RMB
| Item (or invested enterprise) | Ending balance | Opening balance |
2) Important dividend receivable with account age over one year
In RMB
| Item (or invested enterprise) | Ending balance | Account age | Reasons for not collection | Whether impairment occurs and its judgment basis |
3) Accrual of bad debt provision
□ Applicable √Not applicable
Other explanation:
(3) Other account receivable
1) By nature
In RMB
| Nature | Ending book balance | Opening book balance |
| Margin and deposit | 14,965,660.96 | 13,760,145.15 |
| Other intercourse funds | 105,459,789.74 | 109,796,076.74 |
| Total | 120,425,450.70 | 123,556,221.89 |
2) Accrual of bad debt provision
In RMB
| Bad debt provision | Phase I | Phase II | Phase III | Total |
| Expected credit losses over next 12 months | Expected credit losses for the entire duration (without credit impairment occurred) | Expected credit losses for the entire duration (with credit impairment occurred) | ||
| Balance on Jan. 1, 2020 | 2,996,278.20 | 94,801,248.62 | 97,797,526.82 | |
| Balance of Jan. 1, 2020 in the period | —— | —— | —— | —— |
| Current accrual | -615,506.82 | 612,663.00 | -2,843.82 | |
| Current resale | 275.96 | 275.96 | ||
| Balance on Dec. 31, 2020 | 2,380,495.42 | 95,413,911.62 | 97,794,407.04 |
Change of book balance of loss provision with amount has major changes in the period
□ Applicable √Not applicable
By account age
In RMB
| Account age | Ending balance |
| Within one year (including 1-year) | 18,333,071.10 |
| 1-2 years | 3,903,599.94 |
| 2-3 years | 2,172,839.70 |
| Over 3 years | 96,015,939.96 |
| 3-4 years | 807,023.25 |
| 4-5 years | 1,690,770.13 |
| Over 5 years | 93,518,146.58 |
| Total | 120,425,450.70 |
3) Bad debt provision accrual, collected or reversal in the period
Bad debt provision accrual in the period:
In RMB
| Category | Opening balance | Amount changed in the period | Ending balance | |||
| Accrual | Collected or reversal | Written off | Other | |||
| Bad debt provision accrual on single basis | 94,801,248.62 | 612,663.00 | 95,413,911.62 | |||
| Provision for bad debts of other receivables | 2,996,278.20 | -615,506.82 | 275.96 | 2,380,495.42 | ||
| Total | 97,797,526.82 | -2,843.82 | 275.96 | 97,794,407.04 | ||
Including major amount with bad debt provision reverse or collected in the period:
In RMB
| Enterprise | Amount reversal or collected | Collection way |
4) Other account receivable actually written-off in the period
In RMB
| Item | Amount written-off |
| Other account receivable actually written-off | 275.96 |
Including important other account receivable written-off:
In RMB
| Enterprise | Nature | Amount written-off | Written-off causes | Procedure of written-off | Resulted by related transaction (Y/N) |
Explanation on other account receivable written-off:
5) Top 5 other receivables at ending balance by arrears party
In RMB
| Enterprise | Nature | Ending balance | Account age | Ratio in total ending balance of other account receivables | Ending balance of bad debt reserve |
| First | Intercourse funds | 24,494,677.07 | Over 5 years | 20.34 | 22,007,578.79 |
| Second | Intercourse funds | 8,326,202.63 | Over 5 years | 6.91 | 8,326,202.63 |
| Three | Intercourse funds | 8,285,803.57 | Over 5 years | 6.88 | 8,285,803.57 |
| Fourth | Intercourse funds | 6,397,067.59 | Over 5 years | 5.31 | 6,397,067.59 |
| Fifth | Intercourse funds | 5,602,468.81 | Over 5 years | 4.65 | 5,602,468.81 |
| Total | 53,106,219.67 | 44.09 | 50,619,121.39 |
6) Other account receivables related to government grants
In RMB
| Enterprise | Government grants | Ending balance | Ending account age | Time, amount and basis for collection predicted |
7) Other receivable for termination of confirmation due to the transfer of financial assets
8) The amount of assets and liabilities that are transferred other receivable and continued to be involvedOther explanation:
9. Inventories
Whether companies need to comply with the disclosure requirements of the real estate industry
□Yes √No
(1) Category
In RMB
| Item | Ending balance | Opening balance | ||||
| Book balance | Inventories fall provision or contract performance costs impairment provision | Book value | Book balance | Inventories fall provision or contract performance costs impairment provision | Book value | |
| Raw materials | 68,152,781.12 | 16,559,251.32 | 51,593,529.80 | 56,703,874.41 | 19,314,135.53 | 37,389,738.88 |
| Goods in process | 27,672,374.13 | 27,672,374.13 | 20,109,513.82 | 282,586.46 | 19,826,927.36 | |
| Finished goods | 3,431,982,588.15 | 110,146,694.45 | 3,321,835,893.70 | 3,095,488,288.29 | 101,687,483.68 | 2,993,800,804.61 |
| Revolving material | 5,614,055.57 | 887,023.20 | 4,727,032.37 | 5,405,624.95 | 952,393.40 | 4,453,231.55 |
| Goods in transit | 7,582,654.13 | 7,582,654.13 | 5,475,435.17 | 5,475,435.17 | ||
| Low-value consumables-packaging | 4,819,513.67 | 4,819,513.67 | 3,623,784.14 | 3,623,784.14 | ||
| Work in process-outsourced | 5,388,478.79 | 5,290,502.32 | 97,976.47 | 5,421,792.75 | 5,290,502.32 | 131,290.43 |
| Total | 3,551,212,445.56 | 132,883,471.29 | 3,418,328,974.27 | 3,192,228,313.53 | 127,527,101.39 | 3,064,701,212.14 |
(2) Inventories fall provision or contract performance costs impairment provision
In RMB
| Item | Opening balance | Current amount increased | Current amount decreased | Ending balance | ||
| Accrual | Other | Reversal or write-off | Other | |||
| Raw materials | 19,314,135.53 | -2,338,211.92 | 416,672.29 | 16,559,251.32 | ||
| Goods in process | 282,586.46 | 282,586.46 | ||||
| Finished goods | 101,687,483.68 | 212,588,760.04 | 204,129,549.27 | 110,146,694.45 | ||
| Revolving material | 952,393.40 | -60,185.31 | 5,184.89 | 887,023.20 | ||
| Work in process-outsourced | 5,290,502.32 | 5,290,502.32 | ||||
| Total | 127,527,101.39 | 210,190,362.81 | 204,833,992.91 | 132,883,471.29 | ||
(3) Explanation on inventories with capitalization of borrowing costs included at ending balance
(4) Assets unsettled formed by construction contract which has completed at period-end
10. Contract assets
In RMB
| Item | Ending balance | Opening balance | ||||
| Book balance | Impairment provision | Book value | Book balance | Impairment provision | Book value | |
Amount and reasons for the major changes of book value of contract assets in the period:
In RMB
| Item | Amount changed | Cause of change |
If the bad debt provision of accrual contract is made in accordance with the general model of expected credit losses, please refer to thedisclosure of other account receivables to disclose related information about bad debt provision:
□ Applicable √Not applicable
Impairment provision of contract assets in the period
In RMB
| Item | Current accrual | Current reversal | Charge off/Written-off | Causes |
Other explanation:
11. Assets held for sale
In RMB
| Item | Ending book balance | Impairment provision | Ending book value | Fair value | Estimated disposal cost | Estimated disposal time |
Other explanation:
12. Non-current asset due within one year
In RMB
| Item | Ending balance | Opening balance |
Important creditors’ investment/ other creditors’ investment
In RMB
| Item | Ending balance | Opening balance | ||||||
| Face value | Coupon rate | Actual rate | Maturity date | Face value | Coupon rate | Actual rate | Maturity date | |
Other explanation:
13. Other current assets
In RMB
| Item | Ending balance | Opening balance |
| Financial products held to maturity within one year | 10,000,000.00 | 385,000,000.00 |
| Other | 553.37 | |
| Input tax to be deducted | 109,023,326.25 | 83,157,841.68 |
| Prepaid enterprise income tax | 727,277.06 | 15,985.35 |
| Total | 119,750,603.31 | 468,174,380.40 |
Other explanation:
14. Creditors’ investment
In RMB
| Item | Ending balance | Opening balance | ||||
| Book balance | Impairment provision | Book value | Book balance | Impairment provision | Book value | |
| 0.00 | 0.00 | |||||
Important creditors’ investment
In RMB
| Item | Ending balance | Opening balance | ||||||
| Face value | Coupon rate | Actual rate | Maturity date | Face value | Coupon rate | Actual rate | Maturity date | |
Accrual of impairment provision
In RMB
| Bad debt provision | Phase I | Phase II | Phase III | Total |
| Expected credit losses over next 12 months | Expected credit losses for the entire duration (without credit impairment occurred) | Expected credit losses for the entire duration (with credit impairment occurred) | ||
| Balance of Jan. 1, 2020 in the period | —— | —— | —— | —— |
Change of book balance of loss provision with amount has major changes in the period
□ Applicable √Not applicable
Other explanation:
15. Other creditors’ investment
In RMB
| Item | Opening balance | Accrual interest | Change of fair value in the period | Ending balance | Cost | Accumulated change of fair value | Loss impairment accumulated recognized in other comprehensive income | Note |
| 0.00 | 0.00 |
Important other creditors’ investment
In RMB
| Other creditor item | Ending balance | Opening balance |
| Face value | Coupon rate | Actual rate | Maturity date | Face value | Coupon rate | Actual rate | Maturity date |
Accrual of impairment provision
In RMB
| Bad debt provision | Phase I | Phase II | Phase III | Total |
| Expected credit losses over next 12 months | Expected credit losses for the entire duration (without credit impairment occurred) | Expected credit losses for the entire duration (with credit impairment occurred) | ||
| Balance of Jan. 1, 2020 in the period | —— | —— | —— | —— |
Change of book balance of loss provision with amount has major changes in the period
□ Applicable √Not applicable
Other explanation:
16. Long-term account receivable
(1) Long-term account receivable
In RMB
| Item | Ending balance | Opening balance | Discount rate interval | ||||
| Book balance | Bad debt provision | Book value | Book balance | Bad debt provision | Book value | ||
Impairment of bad debt provision
In RMB
| Bad debt provision | Phase I | Phase II | Phase III | Total |
| Expected credit losses over next 12 months | Expected credit losses for the entire duration (without credit impairment occurred) | Expected credit losses for the entire duration (with credit impairment occurred) | ||
| Balance of Jan. 1, 2020 in the period | —— | —— | —— | —— |
Change of book balance of loss provision with amount has major changes in the period
□ Applicable √Not applicable
(2) Long-term account receivable derecognition due to financial assets transfer
(3) Assets and liabilities resulted by long-term account receivable transfer and continues involvementOther explanation
17. Long-term equity investment
In RMB
| The invested entity | Opening balance (book value) | Current changes (+,-) | Ending balance (book value) | Ending balance of impairment provision | |||||||
| Additional investment | Capital reduction | Investment gains recognized under equity | Other comprehensive income adjustment | Other equity change | Cash dividend or profit announced to issued | Accrual of impairment provision | Other | ||||
| I. Joint venture | |||||||||||
| II. Associated enterprise | |||||||||||
| Zhuhai Hengxing Feed Industrial Co., Ltd. | 31,636,707.22 | 1,365,332.40 | 33,002,039.62 | ||||||||
| Shenzhen Duoxi Equity Investment Fund Management Co., Ltd. | 3,703,604.80 | -344,002.87 | 3,359,601.93 | ||||||||
| Shenliang Intelligent Wulian Equity Investment Fund (Shenzhen) Partner | 25,933,923.35 | 321,744.63 | 26,255,667.98 | ||||||||
| ship Enterprise (Limited) | |||||||||||
| Shenzhen Shenyuan Data Tech. Co., Ltd | 9,875,647.05 | 722,191.26 | 10,597,838.31 | ||||||||
| Shenzhen Shenbao (Liaoyuan) Industrial Co., Ltd.*1 | 57,628.53 | ||||||||||
| Shenzhen Shenbao (Xinmin) Foods Co., Ltd.*1 | 2,870,000.00 | ||||||||||
| Guangzhou Shenbao Mendao Tea Co., Ltd. | 2,211,429.68 | 2,211,429.68 | |||||||||
| Subtotal | 73,361,312.10 | 2,211,429.68 | 2,065,265.42 | 73,215,147.84 | 2,927,628.53 | ||||||
| Total | 73,361,312.10 | 2,211,429.68 | 2,065,265.42 | 73,215,147.84 | 2,927,628.53 |
Other explanation: Shenzhen Shenbao (Liaoyuan) Industrial Co., Ltd and Shenzhen Shenbao (Xinmin) Foods Co., Ltd has
established for a long time, and business license has been revoked and a full provision for impairment has been made as it has notbeen liquidated. Changzhou Shenbao Chacang Electronic Commerce Co., Ltd. and Shenzhen Shichumingmen Catering ManagementCo., Ltd has a continued loss for many years, the carrying amount of long-term equity investment has been written down to zero.
18. Other equity instrument investment
In RMB
| Item | Ending balance | Opening balance |
Itemized the non-tradable equity instrument investment in the period
In RMB
| Item | Dividend income recognized | Cumulative gains | Cumulative losses | Retained earnings transfer from other comprehensive income | Causes of those that designated measured by fair value and with its variation reckoned into other comprehensive income | Cause of retained earnings transfer from other comprehensive income |
Other explanation:
19. Other non-current financial assets
In RMB
| Item | Ending balance | Opening balance |
| Financial assets measured at fair value and whose changes are included in the current profit and loss | 57,500.00 | 57,500.00 |
| Total | 57,500.00 | 57,500.00 |
Other explanation:
20. Investment real estate
(1) Measured at cost
√ Applicable □Not applicable
In RMB
| Item | House and building | Land use right | Construction in progress | Total |
| I. Original book value | ||||
| 1.Opening balance | 590,440,328.15 | 590,440,328.15 |
| 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 | 590,440,328.15 | 590,440,328.15 | ||
| II. Accumulated depreciation and accumulated amortization | ||||
| 1.Opening balance | 320,735,390.98 | 320,735,390.98 | ||
| 2.Current amount increased | 16,667,037.60 | 16,667,037.60 | ||
| (1) Accrual or amortization | 16,667,037.60 | 16,667,037.60 | ||
| 3.Current amount decreased | ||||
| (1) Disposal | ||||
| (2) Other transfer-out | ||||
| 4.Ending balance | 337,402,428.58 | 337,402,428.58 | ||
| 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 | 253,037,899.57 | 253,037,899.57 | ||
| 2. Opening book value | 269,704,937.17 | 269,704,937.17 |
(2) Measure on fair value
□ Applicable √Not applicable
(3) Investment real estate without property certificate completed
In RMB
| Item | Book value | Reasons |
Other explanation
21. Fixed assets
In RMB
| Item | Ending balance | Opening balance |
| Fixed assets | 1,122,692,490.55 | 945,042,032.69 |
| Total | 1,122,692,490.55 | 945,042,032.69 |
(1) Fixed assets
In RMB
| Item | House and buildings | Machinery equipment | Transport equipment | Electronic and other equipment | Total |
| I. Original book value: | |||||
| 1.Opening balance | 896,518,401.77 | 452,026,081.27 | 18,721,521.51 | 60,760,300.85 | 1,428,026,305.40 |
| 2.Current amount increased | 142,484,512.87 | 86,101,103.86 | 2,407,717.00 | 12,654,252.19 | 243,647,585.92 |
| (1) Purchase | 11,413,417.68 | 2,407,717.00 | 9,436,033.63 | 23,257,168.31 |
| (2) Construction in progress transfer-in | 142,484,512.87 | 74,687,686.18 | 3,218,218.56 | 220,390,417.61 | |
| (3) Increased by combination | |||||
| 3.Current amount decreased | 5,811,060.77 | 3,466,854.77 | 5,126,867.22 | 14,404,782.76 | |
| (1) Disposal or scrap | 5,811,060.77 | 3,466,854.77 | 5,126,867.22 | 14,404,782.76 | |
| Other decrease | |||||
| 4.Ending balance | 1,039,002,914.64 | 532,316,124.36 | 17,662,383.74 | 68,287,685.82 | 1,657,269,108.56 |
| II. Accumulated depreciation | |||||
| 1.Opening balance | 191,240,117.01 | 232,572,819.43 | 13,702,651.03 | 40,480,125.26 | 477,995,712.73 |
| 2.Current amount increased | 26,821,191.07 | 25,194,225.24 | 2,017,897.21 | 8,268,562.94 | 62,301,876.46 |
| (1) Accrual | 26,821,191.07 | 25,194,225.24 | 2,017,897.21 | 8,268,562.94 | 62,301,876.46 |
| Other increase | |||||
| 3.Current amount decreased | 463,296.04 | 2,588,019.21 | 3,202,850.60 | 4,425,144.35 | 10,679,310.20 |
| (1) Disposal or scrap | 463,296.04 | 2,588,019.21 | 3,202,850.60 | 4,425,144.35 | 10,679,310.20 |
| Other decrease | |||||
| 4.Ending balance | 217,598,012.04 | 255,179,025.46 | 12,517,697.64 | 44,323,543.85 | 529,618,278.99 |
| III. Impairment provision | |||||
| 1.Opening balance | 689,332.71 | 4,285,356.15 | 13,871.12 | 4,988,559.98 | |
| 2.Current amount increased | |||||
| (1) Accrual | |||||
| Other increase | |||||
| 3.Current amount decreased | 26,239.71 | 3,981.25 | 30,220.96 | ||
| (1) Disposal or scrap | 26,239.71 | 3,981.25 | 30,220.96 | ||
| Other decrease | |||||
| 4.Ending balance | 689,332.71 | 4,259,116.44 | 9,889.87 | 4,958,339.02 | |
| IV. Book value |
| 1.Ending book value | 820,715,569.89 | 272,877,982.46 | 5,144,686.10 | 23,954,252.10 | 1,122,692,490.55 |
| 2. Opening book value | 704,588,952.05 | 215,167,905.69 | 5,018,870.48 | 20,266,304.47 | 945,042,032.69 |
(2) Temporarily idle fixed assets
In RMB
| Item | Original book value | Accumulated depreciation | Impairment provision | Book value | Note |
(3) Fixed assets by financing leased
In RMB
| Item | Original book value | Accumulated depreciation | Impairment provision | Book value |
(4) Fixed assets leased out by operation
In RMB
| Item | Ending book value |
(5) Fix assets without property certification held
In RMB
| Item | Book value | Reasons for without the property certification |
| House buildings | 89,570,964.26 | Still under processing |
| House buildings | 15,346,460.84 | At present, the relevant application and approval procedures are being restarted. |
| House buildings | 10,904,898.71 | Simple and temporary buildings etc, cannot handle the property right certificate |
| House buildings | 1,512,425.18 | Simple and temporary buildings etc, cannot handle the property right certificate |
| House buildings | 103,589,180.24 | Berth of wharf has right of use, no need to handle the certificate |
Other explanation
(6) Fixed assets disposal
In RMB
| Item | Ending balance | Opening balance |
Other explanation
22. Construction in progress
In RMB
| Item | Ending balance | Opening balance |
| Construction in progress | 1,045,643,295.57 | 771,971,469.43 |
| Total | 1,045,643,295.57 | 771,971,469.43 |
(1) Construction in progress
In RMB
| Item | Ending balance | Opening balance | ||||
| Book balance | Impairment provision | Book value | Book balance | Impairment provision | Book value | |
| Shenbao Plaza project | 3,842,333.64 | 3,842,333.64 | 3,842,333.64 | 3,842,333.64 | ||
| Dongguan grain storage and wharf matching project | 266,376,815.54 | 266,376,815.54 | 197,140,797.10 | 197,140,797.10 | ||
| Deep processing of Dongguan Industry and Trading Food | 513,729.78 | 513,729.78 | 120,065,528.37 | 120,065,528.37 | ||
| CDE storage of Dongguan Food Industrial Park and wharf mating projects | 720,076,609.48 | 720,076,609.48 | 399,913,306.49 | 399,913,306.49 | ||
| Grain storage and processing | 43,334,291.04 | 43,334,291.04 | 42,489,084.80 | 42,489,084.80 | ||
| Workshop transformation of Flour Company | 868,932.37 | 868,932.37 | ||||
| Low-temperature renovation reconstruction and expansion project in Pinghu | 7,096,256.57 | 7,096,256.57 | ||||
| Water Leakage Project of Pinghu Reservoir | 2,763,915.81 | 2,763,915.81 | ||||
| Shuguang Warehouse | 1,992,099.16 | 1,992,099.16 | ||||
| No. 3 & No. 6 Refrigeration Reconstruction Project | ||||||
| Renovation of supporting loading and unloading facilities in Pinghu Reservoir | 1,169,025.00 | 1,169,025.00 | ||||
| Cold chain intelligent system | 3,645,282.94 | 3,645,282.94 | ||||
| Other | 6,674,716.56 | 903,189.74 | 5,771,526.82 | 5,300,753.47 | 903,189.74 | 4,397,563.73 |
| Total | 1,050,388,818.95 | 4,745,523.38 | 1,045,643,295.57 | 776,716,992.81 | 4,745,523.38 | 771,971,469.43 |
(2) Changes of major construction in progress
In RMB
| Item Name | Budget | Opening balance | Current amount increased | Transfer-in fixed assets | Other decreased in the Period | Ending balance | Proportion of project investment in budget | Progress | Accumulated capitalization of interest | Including: amount of capitalization of interest in Period | Interest capitalization rate in Period | Capital resources |
| Dongguan grain storage and wharf matching project | 1,242,000,000.00 | 197,140,797.10 | 89,264,579.33 | 179,203.55 | 19,849,357.34 | 266,376,815.54 | 76.00 | 76.00 | 32,236,906.64 | 7,774,902.91 | 4.90 | Own funds and borrowings |
| Deep processing of Dongguan Industry and Tradin | 292,000,000.00 | 120,065,528.37 | 632,929.65 | 120,184,728.24 | 513,729.78 | 42.00 | 42.00 | 4,812,867.06 | Own funds and borrowings |
| g Food | ||||||||||||
| CDE storage of Dongguan Food Industrial Park and wharf mating projects | 1,087,300,000.00 | 399,913,306.49 | 320,163,302.99 | 720,076,609.48 | 93.00 | 93.00 | 72,847,368.98 | 25,118,696.44 | 4.90 | Own funds and borrowings | ||
| Total | 2,621,300,000.00 | 717,119,631.96 | 410,060,811.97 | 120,363,931.79 | 19,849,357.34 | 986,967,154.80 | 109,897,142.68 | 32,893,599.35 |
(3) The provision for impairment of construction in progress
In RMB
| Item | Amount accrual in the period | Reasons of accrual |
Other explanation
(4) Engineering material
In RMB
| Item | Ending balance | Opening balance | ||||
| Book balance | Impairment provision | Book value | Book balance | Impairment provision | Book value | |
Other explanation:
23. Productive biological asset
(1) Measured by cost
√ Applicable □Not applicable
In RMB
| Item | Plant | Livestock | Forestry | Fisheries | Total |
| Tea tree |
| I. Original book value | |||||
| 1.Opening balance | 416,771.28 | 416,771.28 | |||
| 2.Current amount increased | |||||
| (1)Outsourcing | |||||
| (2)self-cultivate | |||||
| 3.Current amount decreased | |||||
| (1)Disposal | |||||
| (2)Other | |||||
| 4.Ending balance | 416,771.28 | 416,771.28 | |||
| II. Accumulated depreciation | |||||
| 1.Opening balance | 19,384.72 | 19,384.72 | |||
| 2.Current amount increased | 9,692.36 | 9,692.36 | |||
| (1)Accrual | 9,692.36 | 9,692.36 | |||
| 3.Current amount decreased | |||||
| (1)Disposal | |||||
| (2)Other | |||||
| 4.Ending balance | 29,077.08 | 29,077.08 | |||
| III. Impairment provision | |||||
| 1.Opening balance | |||||
| 2.Current amount increased | |||||
| (1)Accrual | |||||
| 3.Current amount decreased |
| (1)Disposal | |||||
| (2)Other | |||||
| 4.Ending balance | |||||
| IV. Book value | |||||
| 1.Ending book value | 387,694.20 | 387,694.20 | |||
| 2. Opening book value | 397,386.56 | 397,386.56 |
(2) Measured by fair value
□ Applicable √Not applicable
24. Oil and gas asset
□ Applicable √Not applicable
25. Right-of-use asset
In RMB
| Item | Total |
Other explanation:
26. Intangible assets
(1) Intangible assets
In RMB
| Item | Land use right | Patent | Non-patent technology | Other | Total |
| I. Original book value | |||||
| 1.Opening balance | 630,510,783.19 | 47,245,918.89 | 11,311,677.63 | 32,955,523.47 | 722,023,903.18 |
| 2.Current amount increased | 2,926,847.00 | 29,466,211.93 | 1,051,853.78 | 33,444,912.71 | |
| (1) Purchase | 2,926,847.00 | 9,616,854.59 | 811,853.78 | 13,355,555.37 | |
| (2) internal R&D | 19,849,357.34 | 240,000.00 | 20,089,357.34 |
| (3) Increased by combination | |||||
| Internal transfer | |||||
| 3.Current amount decreased | |||||
| (1) Disposal | |||||
| Internal transfer | |||||
| 4.Ending balance | 633,437,630.19 | 47,245,918.89 | 40,777,889.56 | 34,007,377.25 | 755,468,815.89 |
| II. Accumulated depreciation | |||||
| 1.Opening balance | 84,816,102.13 | 25,893,578.33 | 5,018,387.91 | 10,445,149.92 | 126,173,218.29 |
| 2.Current amount increased | 15,608,256.29 | 1,780,103.90 | 4,019,382.54 | 1,898,006.41 | 23,305,749.14 |
| (1) Accrual | 15,608,256.29 | 1,780,103.90 | 4,019,382.54 | 1,898,006.41 | 23,305,749.14 |
| Increase in business combination | |||||
| 3.Current amount decreased | |||||
| (1) Disposal | |||||
| Internal transfer | |||||
| 4.Ending balance | 100,424,358.42 | 27,673,682.23 | 9,037,770.45 | 12,343,156.33 | 149,478,967.43 |
| III. Impairment provision | |||||
| 1.Opening balance | 5,553,283.54 | 1,130,341.88 | 6,683,625.42 | ||
| 2.Current amount increased | |||||
| (1) Accrual | |||||
| Internal transfer | |||||
| 3.Current amount decreased | |||||
| (1) Disposal | |||||
| Internal transfer |
| 4.Ending balance | 5,553,283.54 | 1,130,341.88 | 6,683,625.42 | ||
| IV. Book value | |||||
| 1.Ending book value | 533,013,271.77 | 14,018,953.12 | 30,609,777.23 | 21,664,220.92 | 599,306,223.04 |
| 2. Opening book value | 545,694,681.06 | 15,799,057.02 | 5,162,947.84 | 22,510,373.55 | 589,167,059.47 |
Ratio of the intangible assets from internal R&D in balance of intangible assets at period-end
(2) Land use rights without certificate of ownership
In RMB
| Item | Book value | Reasons for without the property certification |
| Land use right | 34,583,708.10 | Still under processing |
| Total | 34,583,708.10 |
Other explanation:
27. Expense on Research and Development
In RMB
| Item | Opening balance | Current amount increased | Current amount decreased | Ending balance | ||||
| Internal development expenditure | Other | Confirmed as intangible assets | Transfer to current profit and loss | |||||
| Total | ||||||||
Other explanation
28. Goodwill
(1) Goodwill Original book value
In RMB
| The invested entity or matters forming goodwill | Opening balance | Current increased | Current decreased | Ending balance | ||
| Formed by business combination | Dispose | |||||
| Yunnan Pu’er Tea Trading Center Co., Ltd. | 673,940.32 | 673,940.32 | ||||
| Total | 673,940.32 | 673,940.32 |
(2) Goodwill impairment provision
In RMB
| The invested entity or matters forming goodwill | Opening balance | Current increased | Current decreased | Ending balance | ||
| Accrual | Dispose | |||||
| Yunnan Pu’er Tea Trading Center Co., Ltd. | 673,940.32 | 673,940.32 | ||||
| Total | 673,940.32 | 673,940.32 | ||||
Relevant information about the assets group or portfolio goodwill includedIn May 2016, the 15% equity of Pu’er Tea Trading Center held by Yunnan Heng Feng Xiang Investment Co., Ltd was acquired by JuFang Yong Holding, the sub-subsidiary of the Company, after completion of the acquisition, the Company has control over the Pu’erTea Trading Center. The balance between the combined cost and the fair value of net assets on the combining date formed goodwillof RMB 673,940.32. As of December 31, 2020, 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 growthrate, profit rate, discount rate, and forecast period when estimating the present value of the future cash flow), and the method ofconfirming the impairment loss of goodwill:
Impact of goodwill impairment testOther explanation
29. Long-term expenses to be apportioned
In RMB
| Item | Opening balance | Current amount increased | Current amortization | Other decreased | Ending balance |
| Improve expenditure for fix assets | 9,211,089.66 | 5,624,467.11 | 1,947,965.54 | 12,887,591.23 | |
| Decoration fee | 4,528,548.18 | 6,783,030.56 | 2,344,910.48 | 8,966,668.26 | |
| Improve expenditure for investment real estate | 4,560,358.70 | 274,586.76 | 4,285,771.94 |
| Affiliated project of resident area in Wuyuan Ju Fang Yong | 124,210.64 | 27,470.77 | 96,739.87 | ||
| Other | 5,991,380.21 | 838,469.54 | 1,334,296.04 | 5,495,553.71 | |
| Total | 19,855,228.69 | 17,806,325.91 | 5,929,229.59 | 31,732,325.01 |
Other explanation
30. Deferred income tax asset /Deferred income tax liabilities
(1) Deferred income tax assets without offset
In RMB
| Item | Ending balance | Opening balance | ||
| Deductible temporary differences | Deferred income tax asset | Deductible temporary differences | Deferred income tax asset | |
| Impairment provision for assets | 67,113,321.86 | 16,501,454.23 | 58,355,685.95 | 14,290,490.90 |
| Unrealized profits in internal transactions | 3,078,755.60 | 769,722.53 | 973,157.01 | 243,289.25 |
| Deferred income | 53,846.20 | 13,461.55 | 183,076.96 | 45,769.24 |
| Credit impairment loss | 96,768,909.47 | 24,063,313.81 | 98,478,516.09 | 24,503,161.57 |
| Total | 167,014,833.13 | 41,347,952.12 | 157,990,436.01 | 39,082,710.96 |
(2) Deferred income tax liability without offset
In RMB
| Item | Ending balance | Opening balance | ||
| Taxable temporary differences | Deferred income tax liabilities | Taxable temporary differences | Deferred income tax liabilities | |
| Asset evaluation increment of enterprise combine under different control | 48,600,140.52 | 12,150,035.13 | 50,255,008.79 | 12,563,752.22 |
| Total | 48,600,140.52 | 12,150,035.13 | 50,255,008.79 | 12,563,752.22 |
(3) Deferred income tax assets and deferred income tax liabilities listed after off-set
In RMB
| Item | Trade-off between the deferred income tax assets and liabilities | Ending balance of deferred income tax assets or liabilities after off-set | Trade-off between the deferred income tax assets and liabilities at period-begin | Opening balance of deferred income tax assets or liabilities after off-set |
| Deferred income tax asset | 41,347,952.12 | 39,082,710.96 | ||
| Deferred income tax liabilities | 12,150,035.13 | 12,563,752.22 |
(4) Details of uncertain deferred income tax assets
In RMB
| Item | Ending balance | Opening balance |
| Deductible temporary differences | 183,270,008.13 | 309,898,433.67 |
| Deductible loss | 351,368,763.83 | 330,162,451.72 |
| Total | 534,638,771.96 | 640,060,885.39 |
(5) Deductible losses of un-recognized deferred income tax assets expired on the followed year
In RMB
| Year | Ending amount | Opening amount | Note |
| 2020 | 15,622,381.14 | ||
| 2021 | 23,943,774.18 | 31,968,611.91 | |
| 2022 | 84,999,252.69 | 101,026,486.11 | |
| 2023 | 79,916,541.92 | 79,916,541.92 | |
| 2024 | 83,190,940.40 | 101,628,430.64 | |
| 2025 | 79,318,254.64 | ||
| Total | 351,368,763.83 | 330,162,451.72 | -- |
Other explanation:
31. Other non-current asset
In RMB
| Item | Ending balance | Opening balance | ||||
| Book balance | Impairment provision | Book value | Book balance | Impairment provision | Book value | |
| Prepaid for equipment | 611,965.84 | 611,965.84 | 611,965.84 | 611,965.84 | ||
| Prepaid for | 1,864,208.49 | 1,864,208.49 | 1,260,000.00 | 1,260,000.00 | ||
| system | ||||||
| Total | 2,476,174.33 | 2,476,174.33 | 1,871,965.84 | 1,871,965.84 |
Other explanation:
32. Short-term loans
(1) Category
In RMB
| Item | Ending balance | Opening balance |
| Loan in credit | 110,318,727.12 | 23,595,000.00 |
| Total | 110,318,727.12 | 23,595,000.00 |
Explanation on category of short-term loans:
(2) Overdue short-term loans without payment
RMB 0 short-term loans over due without paid at period-end, including follow major amount:
In RMB
| Borrower | Ending balance | Loan rate | Overdue time | Overdue interest |
Other explanation:
33. Tradable financial liability
In RMB
| Item | Ending balance | Opening balance |
| Including: | ||
| Including: |
Other explanation:
34. Derivative financial liability
In RMB
| Item | Ending balance | Opening balance |
Other explanation:
35. Note payable
In RMB
| Category | Ending balance | Opening balance |
Notes expired at year-end without paid was 0 Yuan.
36. Account payable
(1) Account payable
In RMB
| Item | Ending balance | Opening balance |
| Trade accounts payable | 221,632,903.56 | 201,806,654.53 |
| Account payable for engineering | 254,410,372.45 | 55,979,629.86 |
| Other | 4,853,241.63 | 8,337,186.59 |
| Total | 480,896,517.64 | 266,123,470.98 |
(2) Major accounts payable with age over one year
In RMB
| Item | Ending balance | Reasons of outstanding or carry-over |
Other explanation:
37. Accounts received in advance
(1) Accounts received in advance
In RMB
| Item | Ending balance | Opening balance | |
| Other | 3,376,262.66 | 2,276,375.02 | |
| Total | 3,376,262.66 | 2,276,375.02 | 562,553.20 |
(2) Important account received in advance with account age over one year
In RMB
| Item | Ending balance | Reasons of outstanding or carry-over |
38. Contractual liabilities
In RMB
| Item | Ending balance | Opening balance |
| Sales price | 108,975,866.82 | 134,935,456.98 |
| Total | 108,975,866.82 | 134,935,456.98 |
Amount and reasons for important changes of book value in the period
In RMB
| Item | Amount changed | Reasons of changes |
39. Wage payable
(1) Wage payable
In RMB
| Item | Opening balance | Current increased | Current decreased | Ending balance |
| I. Short-term compensation | 170,486,447.93 | 339,674,084.28 | 267,120,078.95 | 243,040,453.26 |
| II. After-service welfare-defined contribution plans | 23,551,781.02 | 12,192,999.87 | 19,005,849.09 | 16,738,931.80 |
| III. Dismissed welfare | 1,038,347.60 | 2,004,029.15 | 2,307,202.15 | 735,174.60 |
| Total | 195,076,576.55 | 353,871,113.30 | 288,433,130.19 | 260,514,559.66 |
(2) Short-term compensation
In RMB
| Item | Opening balance | Current increased | Current decreased | Ending balance |
| 1. Wage, bonus, allowance and subsidy | 160,062,092.35 | 308,018,487.14 | 233,724,509.75 | 234,356,069.74 |
| 2. Employees’ welfare | 675,866.67 | 10,829,615.32 | 11,348,529.64 | 156,952.35 |
| 3. Social insurance charges | 86,045.19 | 4,952,895.68 | 4,840,300.63 | 198,640.24 |
| Including: medical insurance premium | 41,753.99 | 4,526,795.42 | 4,453,149.34 | 115,400.07 |
| Industrial injury insurance premiums | 605.17 | 64,299.16 | 63,636.92 | 1,267.41 |
| Maternity insurance premiums | 2,300.25 | 361,801.10 | 323,514.37 | 40,586.98 |
| other | 41,385.78 | 41,385.78 | ||
| 4. Housing public reserve | 124,800.30 | 11,412,855.87 | 11,475,797.70 | 61,858.47 |
| 5. Trade union fee and education fee | 9,537,643.42 | 4,460,230.27 | 5,730,941.23 | 8,266,932.46 |
| Total | 170,486,447.93 | 339,674,084.28 | 267,120,078.95 | 243,040,453.26 |
(3) Defined contribution plans
In RMB
| Item | Opening balance | Current increased | Current decreased | Ending balance |
| 1. Basic endowment insurance premiums | 423,432.45 | 3,074,583.59 | 3,104,908.30 | 393,107.74 |
| 2. Unemployment insurance premiums | 2,554.47 | 30,761.21 | 32,340.27 | 975.41 |
| 3. Enterprise annuity | 23,125,794.10 | 9,087,655.07 | 15,868,600.52 | 16,344,848.65 |
| Total | 23,551,781.02 | 12,192,999.87 | 19,005,849.09 | 16,738,931.80 |
Other explanation:
40. Taxes payable
In RMB
| Item | Ending balance | Opening balance |
| VAT | 2,792,128.64 | 2,206,356.73 |
| Enterprise income tax | 59,929,311.33 | 30,123,982.59 |
| Personal income tax | 975,572.27 | 1,251,969.61 |
| Urban maintenance and construction tax | 117,101.01 | 104,892.72 |
| House property tax | 1,041,691.54 | 1,348,616.75 |
| Educational surtax | 84,670.40 | 78,996.91 |
| Use tax of land | 191,383.02 | 275,026.35 |
| Stamp tax | 1,066,139.48 | 599,525.05 |
| Other | 42,509.76 | 1,058,246.76 |
| Deed tax | 664,227.84 | |
| Total | 66,904,735.29 | 37,047,613.47 |
Other explanation:
41. Other account payable
In RMB
| Item | Ending balance | Opening balance |
| Interest payable | 1,411,457.29 | |
| Dividend payable | 2,933,690.04 | 2,933,690.04 |
| Other account payable | 394,392,029.46 | 232,032,023.80 |
| Total | 397,325,719.50 | 236,377,171.13 |
(1) Interest payable
In RMB
| Item | Ending balance | Opening balance |
| Long-term loans interest for installment | 1,411,457.29 | |
| Total | 1,411,457.29 |
Major overdue interest:
In RMB
| Borrower | Overdue amount | Overdue causes |
Other explanation:
(2) Dividend payable
In RMB
| Item | Ending balance | Opening balance |
| Shenzhen Investment Management Company | 2,690,970.14 | 2,690,970.14 |
| Unmanaged shares | 242,719.90 | 242,719.90 |
| Total | 2,933,690.04 | 2,933,690.04 |
Other explanation, including important dividend payable over one year without payment, disclose reasons for un-paid:
(3) Other account payable
1) By nature
In RMB
| Item | Ending balance | Opening balance |
| Engineering quality retention money and fund of tail | 737,356.67 | 3,797,078.78 |
| Deposit and margin | 191,086,945.49 | 116,032,480.36 |
| Intercourse funds and other | 191,229,002.98 | 105,177,684.59 |
| Drawing expenses in advance | 11,338,724.32 | 7,024,780.07 |
| Total | 394,392,029.46 | 232,032,023.80 |
2) Significant other account payable with over one year age
In RMB
| Item | Ending balance | Reasons of outstanding or carry-over |
| Special funds for poverty alleviation | 7,988,954.17 | Not yet expired |
| Shenzhen Yulunda Investment Development Co., Ltd. | 4,423,983.35 | Not yet expired |
| Total | 12,412,937.52 | -- |
Other explanation
42. Liability held for sale
In RMB
| Item | Ending balance | Opening balance |
Other explanation:
43. Non-current liabilities due within one year
In RMB
| Item | Ending balance | Opening balance |
| Long-term loans due within one year | 104,225,183.07 | 67,420,012.16 |
| Total | 104,225,183.07 | 67,420,012.16 |
Other explanation:
44. Other current liabilities
In RMB
| Item | Ending balance | Opening balance |
| Subsidies for grain reserve services | 219,151,968.63 | |
| VAT payable | 2,329,512.69 | |
| Other | 4,920,907.99 | |
| Total | 7,250,420.68 | 219,151,968.63 |
Change of short-term bonds payable:
In RMB
| Bonds | Face value | Issuance date | Bonds term | Amount issued | Opening balance | Issued in the period | Accrual interest by face value | Premium and discount amortization | Paid in the period | Ending balance |
Other explanation:
45. Long-term loans
(1) Category
In RMB
| Item | Ending balance | Opening balance |
| Mortgage loan | 841,864,531.75 | 673,642,296.22 |
| Guarantee loan | 162,270,260.19 | |
| Total | 841,864,531.75 | 835,912,556.41 |
Explanation on category of long-term loans:
Other explanation, including interest rate range:
46. Bonds payable
(1) Bonds payable
In RMB
| Item | Ending balance | Opening balance |
(2) Changes of bonds payable (not including the other financial instrument of preferred stock andperpetual capital securities that classify as financial liability)
In RMB
| Bonds | Face value | Issuance date | Bonds term | Amount issued | Opening balance | Issued in the period | Accrual interest by face value | Premium and discount amortization | Paid in the period | Ending balance | |
| Total | -- | -- | -- |
(3) Convertible conditions and time for shares transfer for the convertible bonds
(4) Other financial instruments classify as financial liability
Basic information of the outstanding preferred stock and perpetual capital securities at period-endChanges of outstanding preferred stock and perpetual capital securities at period-end
In RMB
| Outstanding financial instrument | Period-beginning | Current increased | Current decreased | Period-end | ||||
| Amount | Book value | Amount | Book value | Amount | Book value | Amount | Book value | |
Basis for financial liability classification for other financial instrumentOther explanation
47. Lease liability
In RMB
| Item | Ending balance | Opening balance |
Other explanation
48. Long-term account payable
In RMB
| Item | Ending balance | Opening balance |
| Special account payable | 16,126,146.20 | 15,856,950.01 |
| Total | 16,126,146.20 | 15,856,950.01 |
(1) By nature
In RMB
| Item | Ending balance | Opening balance |
Other explanation:
(2) Special account payable
In RMB
| Item | Opening balance | Current increased | Current decreased | Ending balance | Causes |
| Depreciation fund for grain deposits | 15,856,950.01 | 269,196.19 | 16,126,146.20 | ||
| Total | 15,856,950.01 | 269,196.19 | 16,126,146.20 | -- |
Other explanation:
Note : the finance allocated to the Company as a government investment in depreciation special funds of reserve grain depot andinterest.
49. Long-term wage payable
(1) Long-term wage payable
In RMB
| Item | Ending balance | Opening balance |
(2) Changes of defined benefit plans
Present value of the defined benefit plans:
In RMB
| Item | Current Period | Last Period |
Scheme assets:
In RMB
| Item | Current Period | Last Period |
Net liability (assets) of the defined benefit plans
In RMB
| Item | Current Period | Last Period |
Content of defined benefit plans and relevant risks, impact on future cash flow of the Company as well as times and uncertainty:
Major actuarial assumption and sensitivity analysis:
Other explanation:
50. Accrual liabilities
In RMB
| Item | Ending balance | Opening balance | Causes |
| External guarantee | 3,500,000.00 | 3,500,000.00 | |
| Total | 3,500,000.00 | 3,500,000.00 | -- |
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 betweenChangzhou 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 ElectronicCommerce Co., Ltd. within the scope of 3.5 million yuan.
51. Deferred income
In RMB
| Item | Opening balance | Current increased | Current decreased | Ending balance | Causes |
| Government subsidies related to assets | 101,750,431.65 | 5,106,615.38 | 6,147,008.71 | 100,710,038.32 | |
| Government subsidies related to income | 41,809.66 | 41,809.66 | |||
| Total | 101,792,241.31 | 5,106,615.38 | 6,188,818.37 | 100,710,038.32 | -- |
Item with government grants involved:
In RMB
| Liability | Opening balance | New grants in the Period | Amount reckoned in non-operation revenue | Amount reckoned in other income | Cost reduction in the period | Other changes | Ending balance | Assets-related/income related |
| Base of further processing for tea and nature plants | 825,000.00 | 275,000.00 | 550,000.00 | Assets-related | ||||
| Enterprise technology center is a municipal R&D center. Subsidies for industrial technological advancement | 1,783,276.57 | 204,024.60 | 1,579,251.97 | Assets-related | ||||
| Project grants for years for agricultural district, Xihu Zone | 183,076.96 | 64,615.38 | 193,846.14 | 53,846.20 | Assets-related | |||
| Key technology research and development for the preparation of high-quality aroma extracts based on the use of tea aroma precursors | 235,113.94 | 235,113.94 | Assets-related | |||||
| Key technology research and development for the preparation of high-quality aroma extracts based on the use of tea aroma precursors | 41,809.66 | 41,809.66 | Income related | |||||
| Industrialization of | 1,887,690.79 | 196,445.88 | 1,691,244.91 | Asset |
| instant tea powder | s-related | |||||||
| Grant for key technology research and industrialization of instant tea powder | 138,766.19 | 14,245.02 | 124,521.17 | Assets-related | ||||
| Special fund for the development of strategic emerging industries in Shenzhen(plant deep processing engineering) (Shen Development & Reform No. 20131601) | 3,187,683.87 | 351,209.08 | 2,836,474.79 | Assets-related | ||||
| Construction amount for 50 tons for clearly processing for Mingyou tea | 374,999.98 | 125,000.04 | 249,999.94 | Assets-related | ||||
| Subsidy for tea seeding of New Tea Garden in Wangkou | 45,020.68 | 45,020.68 | Assets-related | |||||
| Subsidy for supply system construction of agricultural products | 550,000.00 | 42,000.00 | 242,000.00 | 350,000.00 | Assets-related | |||
| Grain storage project of Dongguan Shenliang Logistics Co., Ltd. - Storage A | 7,980,160.71 | 262,257.12 | 7,717,903.59 | Assets-related | ||||
| Phase II of grain storage project of Dongguan Shenliang Logistics Co., Ltd.- Storage B | 31,937,399.00 | 1,031,300.52 | 30,906,098.48 | Assets-related | ||||
| Grain, oil and food headquarters and innovative public service platform of Dongguan Shenliang | 18,000,000.00 | 18,000,000.00 | Assets-related |
| Logistics Co., Ltd. | ||||||||
| Special funds for intelligent upgrading and transformation of grain warehouse for the 2017 “Grain Safety Project” | 11,320,000.00 | 397,916.65 | 10,922,083.35 | Assets-related | ||||
| Construction of 450000 ton silos and 60000 ton film silos -CDE warehouse. Gas storage bin | 17,387,647.07 | 557,022.42 | 16,830,624.65 | Assets-related | ||||
| Special fund for agricultural development of 2016- agricultural product safety testing project- capacity building of the third party inspection institution expansion evaluation | 328,000.00 | 164,000.00 | 164,000.00 | Assets-related | ||||
| Agricultural product safety testing project of the special fund for agricultural development of 2016 - Central investment fund | 684,000.00 | 342,000.00 | 342,000.00 | Assets-related | ||||
| Construction of O2O community sales service system for high quality grain and oil based on B2C E-commerce platform | 1,750,835.16 | 38,576.04 | 1,712,259.12 | Assets-related | ||||
| Industrialization of Doximi E-commerce platform | 1,961,094.13 | 827,543.33 | 155,269.66 | 978,281.14 | Assets-related | |||
| Commercial circulation development project | 524,000.00 | 524,000.00 | Assets-related |
| funding for year of 2017 | ||||||||
| Intelligent management of grain depot based on mobile internet | 666,666.60 | 200,000.04 | 466,666.56 | Assets-related | ||||
| Government central government grant funds | 5,000,000.00 | 289,217.55 | 4,710,782.45 | Assets-related | ||||
| Total | 101,792,241.31 | 5,106,615.38 | 6,033,548.71 | 155,269.66 | 100,710,038.32 | Assets-related |
Other explanation:
52. Other non-current liabilities
In RMB
| Item | Ending balance | Opening balance |
Other explanation:
53. Share capital
In RMB
| Opening balance | Increased (decreased) in this year +,- | Ending balance | |||||
| New shares issued | Bonus shares | Shares converted from public reserve | Other | Subtotal | |||
| Total shares | 1,152,535,254.00 | 1,152,535,254.00 | |||||
Other explanation:
54. Other equity instrument
(1) Basic information of the outstanding preferred stock and perpetual capital securities at period-end
(2) Changes of outstanding preferred stock and perpetual capital securities at period-end
In RMB
| Outstanding financial instrument | Period-beginning | Current increased | Current decreased | Period-end | ||||
| Amount | Book value | Amount | Book value | Amount | Book value | Amount | Book value | |
Changes of other equity instrument, change reasons and relevant accounting treatment basis:
Other explanation:
55. Capital public reserve
In RMB
| Item | Opening balance | Current increased | Current decreased | Ending balance |
| Capital premium (Share capital premium) | 1,413,996,347.50 | 1,413,996,347.50 | ||
| Other capital reserve | 8,896,381.86 | 8,896,381.86 | ||
| Total | 1,422,892,729.36 | 1,422,892,729.36 |
Other instructions, including changes in the current period, reasons for the change:
56. Treasury stock
In RMB
| Item | Opening balance | Current increased | Current decreased | Ending balance |
Other explanation, including changes and reasons for changes:
57. Other comprehensive income
In RMB
| Item | Opening balance | Current Period | Ending balance | |||||
| Account before income tax in the period | Less: written in other comprehensive income in previous period and carried forward to gains and losses in current period | Less: written in other comprehensive income in previous period and carried forward to retained earnings in current period | Less : income tax expense | Belong to parent company after tax | Belong to minority shareholders after tax | |||
Other explanation, including the active part of the hedging gains/losses of cash flow transfer to initial reorganization adjustment forthe arbitraged items:
58. Reasonable reserve
In RMB
| Item | Opening balance | Current increased | Current decreased | Ending balance |
| Production safety fee | 522.55 | 1,124,329.18 | 1,124,851.73 | |
| Total | 522.55 | 1,124,329.18 | 1,124,851.73 |
Other explanation, including changes and reasons for changes:
59. Surplus public reserve
In RMB
| Item | Opening balance | Current increased | Current decreased | Ending balance |
| Statutory surplus reserves | 350,187,601.06 | 32,179,974.31 | 382,367,575.37 | |
| Total | 350,187,601.06 | 32,179,974.31 | 382,367,575.37 |
Other explanation, including changes and reasons for changes:
60. Retained profit
In RMB
| Item | Current period | Last period |
| Retained profit at the end of the previous year before adjustment | 1,495,135,080.60 | 1,269,933,487.26 |
| Total retained profit at the beginning of the previous year before adjustment | 1,495,135,080.60 | 1,269,933,487.26 |
| Add: net profit attributable to shareholder of parent company | 405,088,385.54 | 363,501,809.52 |
| Less: withdrawal of legal surplus reserve | 32,179,974.31 | 23,046,690.78 |
| Common stock dividends payable | 230,507,050.80 | 115,253,525.40 |
| Retained profit at period-end | 1,637,536,441.03 | 1,495,135,080.60 |
Details about adjusting the retained profits at the beginning of the period:
1) The retroactive adjustments to Accounting Standards for Business Enterprises and its relevant new regulations affect the retainedprofits at the beginning of the period amounting to 0 Yuan.
2) The changes in accounting policies affect the retained profits at the beginning of the period amounting to 0 Yuan.
3) The major accounting error correction affects the retained profits at the beginning of the period amounting to 0 Yuan
4) Merge scope changes caused by the same control affect the retained profits at the beginning of the period amounting to 0 Yuan.
5) Other adjustments affect the retained profits at the beginning of the period amounting to 0 Yuan
61. Operating income and operating cost
In RMB
| Item | Current period | Last period | ||
| Income | Cost | Income | Cost | |
| Main business | 11,877,315,782.17 | 10,724,158,547.46 | 11,051,848,153.57 | 9,951,267,980.45 |
| Other business | 7,211,724.17 | 854,385.88 | 8,136,182.35 | 4,039,025.44 |
| Total | 11,884,527,506.34 | 10,725,012,933.34 | 11,059,984,335.92 | 9,955,307,005.89 |
Whether the lower of the audited net profit before and after deduction of non-recurring gains and losses is negative
□Yes √No
Information relating to revenue:
In RMB
| Category | Branch 1 | Branch 2 | Total | |
| Including: | ||||
| Including: | ||||
| Including: | ||||
| Including: | ||||
| Including: | ||||
| Including: | ||||
| Including: |
Information relating to performance obligations:
NilInformation 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 buthave not yet been fulfilled or have not done with fulfillment is 108,975,866.82 yuan, among them, 108,975,866.82 yuan of revenue isexpected to be recognized in YEAR, yuan of revenue is expected to be recognized in YEAR, and yuan of revenue is expected tobe recognized in YEAR.Other explanation
62. Tax and surcharges
In RMB
| Item | Current period | Last period |
| Consumption tax | 834,166.18 | 1,054,759.39 |
| Urban maintenance and construction tax | 605,281.65 | 905,661.54 |
| House property tax | 6,564,972.11 | 9,130,490.81 |
| Use tax of land | 1,683,656.55 | 1,464,071.73 |
| Vehicle and vessel use tax | 14,094.32 | 12,208.24 |
| Stamp duty | 2,189,511.56 | 1,436,656.82 |
| Other | 485,520.04 | 16,663.83 |
| Total | 12,377,202.41 | 14,020,512.36 |
Other explanation:
63. Sales expenses
In RMB
| Item | Current period | Last period |
| Labor and social security benefits | 79,782,639.14 | 63,227,886.99 |
| Port terminal fee | 37,296,574.33 | 37,714,735.12 |
| Handling charges | 27,375,876.53 | 19,398,184.34 |
| Depreciation and amortization of long-term assets | 12,947,254.76 | 10,964,871.58 |
| Equivalent loss for low value perishable goods | 6,610,770.31 | 4,062,667.43 |
| After-sale services | 5,706,789.04 | 5,415,990.35 |
| Utilities and office expenses | 5,481,335.39 | 6,423,386.32 |
| Rental | 4,599,158.22 | 7,964,035.99 |
| Logistics transportation fee | 4,527,232.81 | 72,027,183.21 |
| Travel expenses | 2,364,534.09 | 2,959,299.74 |
| Sales commission | 1,749,680.45 | 360,654.27 |
| Business hospitality | 1,532,069.82 | 1,210,508.19 |
| Advertisement charge | 844,284.38 | 812,177.09 |
| Property insurance premium | 707,503.79 | 614,149.77 |
| Automobile expenses | 671,397.95 | 1,264,797.18 |
| Other | 9,107,741.29 | 16,237,163.67 |
| Total | 201,304,842.30 | 250,657,691.24 |
Other explanation:
64. Administration expenses
In RMB
| Item | Current period | Last period |
| Labor and social security benefits | 208,921,378.42 | 179,821,022.25 |
| Communication fee | 1,265,413.26 | 1,455,481.34 |
| Vehicle usage fee | 958,223.56 | 1,642,650.49 |
| Low-value consumables | 519,410.79 | 455,282.37 |
| Repair cost | 1,576,305.28 | 1,648,734.20 |
| Depreciation and amortization of long-term assets | 28,899,326.56 | 25,150,631.86 |
| Travel expenses | 1,667,900.78 | 2,916,317.33 |
| Business hospitality | 2,671,957.93 | 3,009,307.39 |
| Office expenses | 13,279,553.23 | 11,683,054.84 |
| Rental | 4,231,857.35 | 1,341,629.55 |
| Intermediary fees | 6,189,913.85 | 9,081,062.59 |
| Relocation and shutdown expenses | 2,040,350.03 | 3,971,983.34 |
| Other | 12,861,862.87 | 18,515,858.05 |
| Total | 285,083,453.91 | 260,693,015.60 |
Other explanation:
65. R&D expenses
In RMB
| Item | Current period | Last period |
| Labor and social security benefits | 9,123,103.91 | 7,047,609.33 |
| Depreciation cost | 3,008,677.44 | 3,038,532.74 |
| Office expenses | 1,057,176.90 | 133,060.44 |
| Travel expenses | 199,563.72 | 220,835.28 |
| Logistics consumption | 1,502,184.44 | 1,088,573.52 |
| Intermediary fees | 8,161.30 | 13,509.80 |
| Maintenance and inspection fee | 573,724.23 | 642,430.88 |
| Other | 1,109,062.54 | 1,350,709.87 |
| Material costs | 36,289.77 | 64,264.97 |
| Total | 16,617,944.25 | 13,599,526.83 |
Other explanation:
66. Financial expenses
In RMB
| Item | Current period | Last period |
| Interest expenses | 16,958,179.81 | 9,387,920.21 |
| Less: Interest income | 3,529,030.44 | 11,068,571.50 |
| Exchange loss | 304,160.59 | 240,479.24 |
| Other | 1,174,453.98 | 803,557.13 |
| Total | 14,907,763.94 | -636,614.92 |
Other explanation:
67. Other income
In RMB
| Sources | Current Period | Last Period |
| Base of further processing for tea and nature plants | 275,000.00 | 275,000.00 |
| Enterprise technology center is a municipal R&D center. Subsidies for industrial technological advancement | 204,024.60 | 204,024.60 |
| Project grants for years for agricultural district, Xihu Zone | 193,846.14 | 129,230.76 |
| Key technology research and development for the preparation of high-quality aroma extracts based on the use of tea aroma precursors | 235,113.94 | 8,119.68 |
| Industrialization of instant tea powder | 196,445.88 | 196,445.88 |
| Grant for key technology research and industrialization of instant tea powder | 14,245.02 | 14,245.02 |
| Special fund for the development of strategic emerging industries in Shenzhen | 351,209.08 | 351,209.08 |
| Construction amount for 50 tons for clearly processing for Mingyou tea | 125,000.04 | 125,000.02 |
| Subsidy for tea seeding of New Tea Garden in Wangkou | 45,020.68 | 1,109.28 |
| Subsidy for supply system construction of agricultural products | 242,000.00 | 200,000.00 |
| Grain storage project of Dongguan Shenliang Logistics Co., Ltd. - Storage A | 262,257.12 | 262,257.12 |
| Phase II of grain storage project of Dongguan Shenliang Logistics Co., Ltd.- Storage B | 1,031,300.52 | 1,031,300.52 |
| Special funds for intelligent upgrading | 397,916.65 |
| and transformation of grain warehouse “Grain Safety Project” | ||
| Construction of 450000 ton silos and 60000 ton film silos -CDE warehouse. Gas storage bin | 557,022.42 | 104,117.64 |
| Special fund for agricultural development of agricultural product safety testing project- capacity building of the third party inspection institution expansion evaluation | 164,000.00 | 164,000.00 |
| Agricultural product safety testing project of the special fund for agricultural development of Central investment fund | 342,000.00 | 342,000.00 |
| Construction of O2O community sales service system for high quality grain and oil based on B2C E-commerce platform | 38,576.04 | 38,576.04 |
| Industrialization of Doximi E-commerce platform | 827,543.33 | 852,589.88 |
| Intelligent management of grain depot based on mobile internet | 200,000.04 | 200,000.04 |
| Government central government grant funds | 289,217.55 | |
| Key technology research and development for the preparation of high-quality aroma extracts based on the use of tea aroma precursors | 41,809.66 | 199,513.92 |
| Financial discount | 337,222.22 | |
| Nanshan District Independent Changxin Industrial Development Special Fund Support Project (Modern Agricultural Development Funding Project) | 588,300.00 | |
| Industrial development guiding fund | 2,611,248.00 | 170,697.00 |
| Employment subsidy funds | 2,238,992.01 | 13,950.34 |
| Special funds for industrial development in Futian District (annual and quarterly growth support, headquarters identification and operation support, e-commerce sales and operation support) | 674,400.00 | 1,050,000.00 |
| Post stabilization subsidy | 90,938.66 | 12,140.94 |
| Shenzhen Market Supervision Bureau's 2019 Annual Agricultural Development | 1,793,200.00 |
| Special Fund Modern Agriculture Project Funding | ||
| Shenzhen Market Supervision Administration Project Leading Enterprise Award | 200,000.00 | |
| Shenzhen Futian District Enterprise Development Service Center Retail Industry Growth Reward | 800,000.00 | 250,000.00 |
| Receipt of subsidies for the intermediary expenses of the merger and reorganization of Nanshan District Economic Promotion Bureau | 738,700.00 | |
| Futian Bureau of Industry and Information Technology's 2019 Wholesale and Retail Industry Growth Award | 2,000,000.00 | |
| Other | 3,937,389.71 | 2,444,974.26 |
| Total | 18,386,517.09 | 12,297,924.24 |
68. Investment income
In RMB
| Item | Current period | Last period |
| Long-term equity investment income measured by equity | 2,065,265.42 | 3,411,761.86 |
| Investment income from disposal of long-term equity investment | 2,288,570.32 | 127,368.82 |
| Income from financial products | 12,918,317.97 | 6,299,093.96 |
| Other | 129,491.67 | |
| Total | 17,401,645.38 | 9,838,224.64 |
Other explanation:
69. Net exposure hedge gains
In RMB
| Item | Current period | Last period |
Other explanation:
70. Income of fair value changes
In RMB
| Sources | Current Period | Last Period |
| Tradable financial assets | -544,403.21 | 41,281.76 |
| Total | -544,403.21 | 41,281.76 |
Other explanation:
71. Credit impairment loss
In RMB
| Item | Current period | Last period |
| Loss of bad debt of other account receivable | 2,843.82 | 137,334.11 |
| Loss of bad debt of account receivable | 1,009,844.21 | 3,359,422.26 |
| Total | 1,012,688.03 | 3,496,756.37 |
Other explanation:
72. Assets impairment loss
In RMB
| Item | Current period | Last period |
| II. Inventory price drop loss and contract performance cost impairment loss | -210,190,362.81 | -158,272,990.37 |
| Total | -210,190,362.81 | -158,272,990.37 |
Other explanation:
73. Income from assets disposal
In RMB
| Sources | Current Period | Last Period |
| Profit and loss on disposal of non current assets | -47,312.84 | -170,437.85 |
74. Non-operating income
In RMB
| Item | Current period | Last period | Amount included in the current non-recurring profit and loss |
| Government grants | 116,855.22 | 10,238.81 | 116,855.22 |
| Profit | 3,926.51 | 3,926.51 | |
| Other | 1,536,846.85 | 1,237,818.64 | 1,536,846.85 |
| Liquidated damages compensation income | 2,268,309.26 | 8,647.80 | 2,268,309.26 |
| Total | 3,925,937.84 | 1,256,705.25 | 3,925,937.84 |
Government grants reckoned into current gains/losses:
In RMB
| Grants | Issuing subject | Issuing cause | Property type | Whether the impact of subsidies on the current profit and loss | Whether special subsidies | Amount of this period | Amount of last period | Assets related/Income related |
Other explanation:
75. Non-operating expenditure
In RMB
| Item | Current period | Last period | Amount included in the current non-recurring profit and loss |
| External donations | 681,235.18 | 2,138,196.59 | 681,235.18 |
| Penalty expenses (and liquidated damages) | 1,487,782.43 | ||
| Inventory loss | 114,032.24 | 8,590.79 | 114,032.24 |
| Loss of scrap from non-current assets | 168,726.06 | 1,546,307.69 | 168,726.06 |
| Tax overdue fine | 50.03 | ||
| Compensation | 30,371.37 | ||
| Other | 590,559.34 | 590,007.88 | 590,559.34 |
| Total | 1,554,552.82 | 5,801,306.78 |
Other explanation:
76. Income tax expense
(1) Income tax expense
In RMB
| Item | Current period | Last period |
| Current income tax expenses | 56,749,544.35 | 33,845,702.24 |
| Deferred income tax expenses | -2,678,958.25 | 10,667,197.47 |
| Total | 54,070,586.10 | 44,512,899.71 |
(2) Adjustment process of accounting profit and income tax expenses
In RMB
| Item | Current Period |
| Total profit | 457,842,432.55 |
| Income tax expenses calculated by statutory tax rate | 114,460,608.14 |
| Impact from different tax rate apply with the subsidiary | -2,087,607.90 |
| Effect of adjusting income tax in the previous period | 799,705.21 |
| Impact of non taxable income | -176,494,977.11 |
| Impact on cost, expenses and losses that unable to deducted | 111,698,335.91 |
| Impact of the deductible loss on deferred income tax assets not recognized in the prior period of use | -12,726,282.88 |
| Unrecognized impacts of deductible temporary differences or deductible losses on deferred income tax assets in the period | 19,016,710.64 |
| Additional deductible expenses required by tax law——Impact on R&D costs deduction | -595,905.91 |
| Income tax expenses | 54,070,586.10 |
Other explanation
77. Other comprehensive income
Found more in annotations
78. Annotation of cash flow statement
(1) Cash received with other operating activities concerned
In RMB
| Item | Current period | Last period |
| Intercourse funds and deposit | 337,317,609.85 | 315,742,774.48 |
| Government grants | 17,576,438.98 | 13,481,962.54 |
| Interest income | 3,529,030.44 | 11,068,571.50 |
| Other | 2,744,100.71 | 1,687,675.71 |
| Total | 361,167,179.98 | 341,980,984.23 |
Note of cash paid with other operating activities concerned:
(2) Cash paid with other operating activities concerned
In RMB
| Item | Current period | Last period |
| Intercourse funds and deposit | 183,890,826.39 | 345,269,655.51 |
| Operating daily expenses | 166,210,083.22 | 187,235,981.81 |
| Other | 1,699,332.12 | 1,309,829.12 |
| Total | 351,800,241.73 | 533,815,466.44 |
Note of cash paid with other operating activities concerned:
(3) Cash received with other investment activities concerned
In RMB
| Item | Current period | Last period |
| Performance compensation | 337,500.00 | |
| Total | 337,500.00 |
Note of cash received with other investment activities concerned:
(4) Cash paid related with investment activities
In RMB
| Item | Current period | Last period |
| Other | 6,600.00 | |
| Total | 6,600.00 |
Note of cash paid related with investment activities:
(5) Cash received with other financing activities concerned
In RMB
| Item | Current period | Last period |
Note of cash received with other financing activities concerned:
(6) Other cash paid related with financing activities
In RMB
| Item | Current period | Last period |
| Other | 58,702.23 | 72,997.72 |
| Total | 58,702.23 | 72,997.72 |
Note of other cash paid related with financing activities:
79. Supplementary information to statement of cash flow
(1) Supplementary information to statement of cash flow
In RMB
| Supplementary information | Current period | Last period |
| 1. Net profit adjusted to cash flow of operation activities: | -- | -- |
| Net profit | 403,771,846.45 | 384,516,456.47 |
| Add: Impairment provision for assets | 209,177,674.78 | 154,776,234.00 |
| Depreciation of fixed assets, consumption of oil assets and depreciation of productive biology assets | 78,978,606.42 | 75,859,013.01 |
| Depreciation of right-of-use assets | ||
| Amortization of intangible assets | 23,305,749.14 | 20,201,439.04 |
| Amortization of long-term pending expenses | 5,929,229.59 | 6,893,897.25 |
| Loss from disposal of fixed assets, intangible assets and other long-term assets (income is listed with “-”) | 47,312.84 | 170,437.85 |
| Losses on scrapping of fixed assets (income is listed with “-“) | 168,726.06 | 1,546,307.69 |
| Loss from change of fair value (income is listed with “-“) | 544,403.21 | -41,281.76 |
| Financial expenses (income is listed with “-”) | 17,262,340.40 | 9,387,920.21 |
| Investment loss (income is listed with “-”) | -17,401,645.38 | -9,838,224.64 |
| Decrease of deferred income tax assets (increase is listed with “-”) | -2,265,241.16 | 11,091,880.02 |
| Decrease of deferred income tax asset( (increase is listed with “-”) | -413,717.09 | -424,682.55 |
| Decrease of inventory (increase is listed with “-”) | -358,984,132.03 | -253,136,934.86 |
| Decrease of operating receivable accounts (increase is listed with “-”) | 128,157,029.48 | 219,606,344.91 |
| Increase of operating payable accounts (decrease is listed with “-”) | -201,749,960.44 | -430,554,982.67 |
| Other | ||
| Net cash flow arising from operating activities | 286,528,222.27 | 190,053,823.97 |
| 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 | 190,494,225.94 | 154,954,757.85 |
| Less: Balance of cash at year-begin | 154,954,757.85 | 631,638,339.68 |
| Add: Balance at year-end of cash equivalents | ||
| Less: Balance at year-begin of cash equivalents | ||
| Net increasing of cash and cash equivalents | 35,539,468.09 | -476,683,581.83 |
(2) Net cash paid for obtaining subsidiary in the Period
In RMB
| Amount | |
| Including: | -- |
| Including: | -- |
| Including: | -- |
Other explanation:
(3) Net cash received by disposing subsidiary in the Period
In RMB
| Amount | |
| Including: | -- |
| Including: | -- |
| Including: | -- |
Other explanation:
(4) Constitution of cash and cash equivalent
In RMB
| Item | Ending balance | Opening balance |
| I. Cash | 190,494,225.94 | 154,954,757.85 |
| Including: Cash on hand | 62,642.11 | 191,650.33 |
| Bank deposit available for payment at any time | 189,169,821.01 | 154,658,586.69 |
| Other monetary fund available for payment at any time | 1,261,762.82 | 104,520.83 |
| III. Balance of cash and cash equivalent at period-end | 190,494,225.94 | 154,954,757.85 |
Other explanation:
80. Notes of changes of owners’ equity
Explain the name and adjusted amount in “Other” at end of last period:
81. Assets with ownership or use right restricted
In RMB
| Item | Ending book value | Reasons for restriction |
| Fix assets | 509,480,512.18 | According to the long-term loan mortgage contract signed by Dongguan Logistics Company, a subsidiary of the Company, with Shenzhen Branch of Agricultural Development Bank and Huizhou Zhongkai Sub-branch of HSBC, Dongguan Logistics 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) 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. |
| Intangible assets | 69,569,979.70 | According to the loan contract Yue DG 2017 NGDZ No. 006 signed by International Food Company and Bank of Communications Co., Ltd. Dongguan Branch, International Food Company mortgaged two pieces of land “DFGY |
| (2009) DT No. 190” and “DFGY (2012) DT No. 152” to Bank of Communications Co., Ltd. Dongguan Branch as collateral for the loan. | ||
| Intangible assets | 35,793,740.99 | According to the long-term loan mortgage contract signed by Dongguan Logistics Company, a subsidiary of the Company, with Dongguan Branch of CMB, Dongguan Logistics Company has mortgaged 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. |
| Construction in progress | 163,868,977.53 | According to the long-term loan mortgage contract signed by Dongguan Logistics Company, a subsidiary of the Company, with Shenzhen Branch of Agricultural Development Bank and Huizhou Zhongkai Sub-branch of HSBC, Dongguan Logistics 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) 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. |
| Total | 778,713,210.40 | -- |
Other explanation:
82. Foreign currency monetary items
(1) Foreign currency monetary items
In RMB
| Item | Ending foreign currency balance | Convert rate | Ending RMB balance converted |
| Monetary fund | -- | -- | 1,275,607.92 |
| Including: USD | 169,220.13 | 6.5249 | 1,104,144.43 |
| EURO | |||
| HKD | 203,735.13 | 0.8416 | 171,463.49 |
| Account receivable | -- | -- | 1,131,771.66 |
| Including: USD | 158,121.36 | 6.5249 | 1,031,726.06 |
| EURO | |||
| HKD | 118,875.48 | 0.8416 | 100,045.60 |
| Long-term loans | -- | -- | |
| Including: USD | |||
| EURO | |||
| HKD | |||
Other explanation:
(2) Explanation on foreign operational entity, including as for the major foreign operational entity,disclosed main operation place, book-keeping currency and basis for selection; if the book-keepingcurrency changed, explain reasons
□ Applicable √ Not applicable
83. Hedging
Disclosed hedging items and relevant hedging instrument based on hedging’s category, disclosed qualitative and quantitativeinformation for the arbitrage risks:
84. Government grants
(1) Government grants
In RMB
| Category | Amount | Item | Amount reckoned into current gains/losses |
| Government grants related to assets | 100,710,038.32 | Deferred income | 5,991,739.05 |
| Government grants related to income | 12,511,633.26 | 12,511,633.26 | |
| Total | 113,221,671.58 | 18,503,372.31 |
(2) Government grants rebate
□ Applicable √ Not applicable
Other explanation:
85. Other
VIII. Changes of consolidation range
1. Enterprise merger not under the same control
(1) Enterprise merger not under the same control
In RMB
| Acquiree | Time point for equity obtained | Cost of equity obtained | Ratio of equity obtained | Acquired way Equity obtained way | Purchasing date | Standard to determine the purchasing date | Income of acquiree from purchasing date to period-end | Net profit of acquiree from purchasing date to period-end |
Other explanation:
(2)Combination cost and goodwill
In RMB
| Combination cost |
Determination method for fair value of the combination cost and contingent consideration and changes:
Main reasons for large goodwill resulted:
Other explanation:
(3) Identifiable assets and liability on purchasing date under the acquiree
In RMB
| Fair value on purchasing date | Book value on purchasing date | |
Determination method for fair value of the identifiable assets and liabilities:
Contingent liability of the acquiree bear during combination:
Other explanation:
(4) Gains or losses arising from re-measured by fair value for the equity held before purchasing dateWhether it is a business combination realized by two or more transactions of exchange and a transaction of obtained control rights inthe Period or not
□Yes √No
(5) On purchasing date or period-end of the combination, combination consideration or fair value ofidentifiable assets and liability for the acquiree are un-able to confirm rationally
(6)Other explanation
2.Combine under the same control
(1)Enterprise combined under the same control in the Period
In RMB
| Acquiree | Equity ratio obtained in combination | Basis of combined under the same control | Combination date | Standard to determine the combination date | Income of the combined party from period-begin of combination to the combination date | Net profit of the combined party from period-begin of combination to the combination date | Income of the combined party during the comparison period | Net profit of the combined party during the comparison period |
Other explanation:
(2)Combination cost
In RMB
| Combination cost |
Explanation on contingent consideration and its changes:
Other explanation:
(3) Book value of the assets and liability of the combined party on combination date
In RMB
| Combination date | At end of last period | |
Contingent liability of the combined party bear during combination:
Other explanation:
3. Reverse purchase
Basic transaction information, basis of counter purchase, whether making up business due to the assets and liability reserved by listedcompany and basis, determination of combination cost, amount and calculation on adjusted equity by equity transaction:
4. Disposal Subsidiary
Whether there is a subsidiary disposal on one time, which is loss control of rights
□Yes √No
Whether there is a subsidiary disposal by steps through multiple trading and loss control of rights in the period
□Yes √No
5. Other reasons for consolidation range changed
Consolidation scope changes caused by other reasons (eg, newly establish subsidiaries, liquidate subsidiaries, etc.) and the relatedcircumstances:
During the reporting period, the Company newly established the Shenzhen Shenliang Hongjun Catering Management Co., Ltd., andcanceled Shenzhen Shenbao Tea Co., Ltd and Dongguan Jinying Biotechnology Co., Ltd.
6. Other
IX. Equity in other entity
1. Equity in subsidiary
(1) Constitute of enterprise group
| Subsidiary | Main place of operation | Registration place | Business nature | Share-holding ratio | Acquired way | |
| Directly | Indirectly | |||||
| Shenbao Huacheng | Shenzhen City | Shenzhen City | Manufacturing | 100.00% | Establishment | |
| Wuyuan Ju Fang Yong | Shangrao City | Shangrao City | Manufacturing | 100.00% | Establishment | |
| Shenbao Tea Culture | Shenzhen City | Shenzhen City | Commercial trade | 100.00% | Establishment | |
| Ju Fang Yong Trading | Hangzhou City | Hangzhou City | Wholesale business | 60.00% | Establishment | |
| Ju Fang Yong Holding | Hangzhou City | Hangzhou City | Comprehensive | 100.00% | Establishment | |
| Fuhaitang Catering | Hangzhou City | Hangzhou City | Catering industry | 100.00% | Establishment | |
| Fuhaitang Ecological | Hangzhou City | Hangzhou City | Tea planting, production and sales | 100.00% | Acquisition | |
| Shenbao Rock Tea | Wuyishan City | Wuyishan City | Manufacturing | 100.00% | Establishment | |
| Pu'er Tea Supply Chain | Pu’er City | Pu’er City | Wholesale business | 100.00% | Establishment | |
| Shenbao Food | Huizhou City | Huizhou City | Wholesale business | 100.00% | Establishment | |
| Pu’er Tea Trading Center | Pu’er City | Pu’er City | Service industry | 55.00% | Establishment | |
| Shenbao Investment | Shenzhen City | Shenzhen City | Investment management | 100.00% | Establishment | |
| Shenbao Sanjing | Huizhou City | Shenzhen City | Manufacturing | 100.00% | Establishment | |
| Huizhou Shenbao | Huizhou City | Huizhou City | Comprehensive | 100.00% | Establishment | |
| Shenbao Property | Shenzhen City | Shenzhen City | Property management | 100.00% | Establishment | |
| Shenbao Technology | Shenzhen City | Shenzhen City | Development, consulting and transfer of technology | 100.00% | Establishment | |
| Shenbao Industry & Trade | Huizhou City | Shenzhen City | Wholesale business | 100.00% | Establishment | |
| SZCG | Shenzhen City | Shenzhen City | Grain & oil trading | 100.00% | Combine under the same control | |
| Hualian Grain & Oil | Shenzhen City | Shenzhen City | Grain & oil trading | 100.00% | Combine under the same control | |
| Shenzhen Flour | Shenzhen City | Shenzhen City | Flour processing | 100.00% | Combine under the same control | |
| Shenliang Quality Inspection | Shenzhen City | Shenzhen City | Inspection | 100.00% | Combine under the same control | |
| Hainan Grain and Oil | Haikou City | Haikou City | Feed production | 100.00% | Combine under the same |
| control | ||||||
| Doximi | Shenzhen City | Shenzhen City | E-commerce | 100.00% | Combine under the same control | |
| Big Kitchen | Shenzhen City | Shenzhen City | Sales and processing of grain ,oil and products | 70.00% | Combine under the same control | |
| Yingkou Storage | Yingkou City | Yingkou City | Storage | 100.00% | Combine under the same control | |
| Cold-Chain Logistic | Shenzhen City | Shenzhen City | Fresh food management on-line | 100.00% | Combine under the same control | |
| Shenliang Property | Shenzhen City | Shenzhen City | Property management | 100.00% | Combine under the same control | |
| Shenliang Real Estate | Shenzhen City | Shenzhen City | Real estate development and property management | 100.00% | Combine under the same control | |
| International Food | Dongguan City | Dongguan City | Port operation, food production | 51.00% | Combine under the same control | |
| Dongguan Grain and Oil | Dongguan City | Dongguan City | Food production | 51.00% | Combine under the same control | |
| Dongguan Logistics | Dongguan City | Dongguan City | Storage, logistics | 51.00% | Combine under the same control | |
| Hongxinglong | Shuangyashan City | Shuangyashan City | Construction of food base and development of related complementary facility | 51.00% | Combine under the same control | |
| Shuangyashan | Shuangyashan City | Shuangyashan City | Construction of food base and development of related complementary | 51.00% | Combine under the same control |
| facility | ||||||
| Shenliang Hongjun | Shenzhen City | Shenzhen City | Catering | 51.00% | Establishment |
Explanation on share-holding ratio in subsidiary different from ratio of voting right:
Basis for controlling the invested entity with half or below voting rights held and without controlling invested entity but with overhalf and over voting rights:
Major structured entity included in consolidates statement:
Basis of termination of agent or consignor:
Other explanation:
(2) Important non-wholly-owned subsidiary
In RMB
| Subsidiary | Share-holding ratio of minority | Gains/losses attributable to minority in the Period | Dividend announced to distribute for minority in the Period | Ending equity of minority |
| Dongguan Logistics | 49.00% | -2,920,382.56 | 158,426,927.29 |
Explanation on holding ratio different from the voting right ratio for minority shareholders:
Other explanation:
(3) Main finance of the important non-wholly-owned subsidiary
In RMB
| Subsidiary | Ending balance | Opening balance | ||||||||||
| Current assets | Non current assets | Total assets | Current liabilities | Non current liabilities | Total liabilities | Current assets | Non current assets | Total assets | Current liabilities | Non current liabilities | Total liabilities | |
| Dongguan Logistics | 314,669,005.39 | 1,894,004,868.17 | 2,208,673,873.56 | 644,688,849.68 | 1,240,664,764.11 | 1,885,353,613.79 | 179,203,637.28 | 1,469,042,115.86 | 1,648,245,753.14 | 208,523,832.06 | 930,441,696.91 | 1,138,965,528.97 |
In RMB
| Subsidiary | Current Period | Last Period | ||||||
| Operating revenue | Net profit | Total comprehensive income | Cash flow from operation activity | Operating revenue | Net profit | Total comprehensive income | Cash flow from operation activity | |
| Dongguan Logistics | 1,971,874,865.24 | -5,959,964.40 | -5,959,964.40 | 56,693,201.35 | 2,104,716,248.04 | 30,329,316.32 | 30,329,316.32 | 55,873,900.07 |
Other explanation:
(4) Significant restrictions on the use of enterprise group assets and pay off debts of the enterprise group
(5) Financial or other supporting offers to the structured entity included in consolidated financial statement
Other explanation:
2. Transaction that has owners equity shares changed in subsidiary but still with controlling rights
(1) Owners equity shares changed in subsidiary
(2) Impact on minority’s interest and owners’ equity attributable to parent company
In RMB
Other explanation
3. Equity in joint venture and associated enterprise
(1) Important joint venture or associated enterprise
| Joint venture/Associated enterprise | Main place of operation | Registration place | Business nature | Share-holding ratio | Accounting treatment on investment for joint venture and associated enterprise | |
| Directly | Indirectly | |||||
| Zhuhai Hengxing Feed Industrial Co., Ltd. | Zhuhai | Zhuhai | Aquatic fee and animal fee | 40.00% | Equity method | |
| Shenliang Intelligent Wulian Equity Investment Fund (Shenzhen) Partnership Enterprise (Limited) | Shenzhen | Shenzhen | Equity investment; investment consultant | 49.02% | Equity method | |
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
| Ending balance/Current Period | Opening balance/Last Period | |||
Other explanation
(3) Main financial information of the important associated enterprise
In RMB
| Ending balance/Current Period | Opening balance/Last Period | |||
| Zhuhai Hengxing Feed Industrial Co., Ltd. | Shenliang Intelligent Wulian Equity Investment Fund (Shenzhen) Partnership Enterprise (Limited) | Zhuhai Hengxing Feed Industrial Co., Ltd. | Shenliang Intelligent Wulian Equity Investment Fund (Shenzhen) Partnership Enterprise (Limited) | |
| Current assets | 98,242,527.52 | 20,459,246.10 | 74,426,214.45 | 21,145,350.77 |
| Non current assets | 29,365,806.23 | 33,102,244.01 | 31,819,375.02 | 31,759,785.55 |
| Total assets | 127,608,333.75 | 53,561,490.11 | 106,245,589.47 | 52,905,136.32 |
| Current liabilities | 47,923,417.38 | 26,931,271.22 | ||
| Non current liabilities | 537,345.69 | 629,319.69 | ||
| Total liabilities | 48,460,763.07 | 27,560,590.91 | ||
| Shareholders' equity attributable to the parent company | 82,098,329.55 | 53,561,490.11 | 78,684,998.56 | 52,905,136.32 |
| Adjustment items | 32,839,331.82 | 26,255,842.45 | 31,473,999.42 | 25,934,097.82 |
| --Goodwill | 162,707.80 | -174.47 | 162,707.80 | -174.47 |
| Book value of equity investment in associated enterprises | 162,707.80 | -174.47 | 162,707.80 | -174.47 |
| Fair value of the equity investments in associated enterprise with a publicly quoted prices | 33,002,039.62 | 26,255,667.98 | 31,636,707.22 | 25,933,923.35 |
| Operating revenue | 617,635,043.97 | 519,490,991.03 | ||
| Net profit | 3,413,330.99 | 656,353.79 | 5,314,840.28 | 5,769,606.00 |
| Total comprehensive income | 3,413,330.99 | 656,353.79 | 5,314,840.28 | 5,769,606.00 |
Other explanation
(4) Financial summary for non-important Joint venture and associated enterprise
In RMB
| Ending balance/Current Period | Opening balance/Last Period | |
| Joint venture: | -- | -- |
| Amount based on share-holding ratio | -- | -- |
| Associated enterprise: | -- | -- |
| Total book value of investment | 13,957,440.24 | 15,790,681.53 |
| Amount based on share-holding ratio | -- | -- |
| --Net profit | 378,188.39 | -1,542,435.11 |
| --Total comprehensive income | 378,188.39 | -1,542,435.11 |
Other explanation
(5) Major limitation on capital transfer ability to the Company from joint venture or associated enterprise
(6) Excess loss occurred in joint venture or associated enterprise
In RMB
| Joint venture/Associated enterprise | Cumulative un-recognized losses | Un-recognized losses not recognized in the Period (or net profit enjoyed in the Period) | Cumulative un-recognized losses at period-end |
| Changzhou Shenbao Chacang E-business Co., ltd. | 8,650,425.68 | 92,229.37 | 8,742,655.05 |
| Shenzhen Shichumingmen Catering Management Co., Ltd. | 3,815,595.01 | 999,730.69 | 4,815,325.70 |
Other explanation
(7) Unconfirmed commitment with joint venture investment concerned
No unconfirmed commitment with joint venture investment concerned in the period.
(8) Intangible liability with joint venture or affiliates investment concerned
No intangible liability with joint venture or affiliates investment concerned in the period.
4. Major conduct joint operation
| Name | Main place of operation | Registration place | Business nature | Shareholding ratio/ shares enjoyed | |
| Directly | In-directly | ||||
Share-holding ratio or shares enjoyed different from voting right ratio:
If the co-runs entity is the separate entity, basis of the co-runs classification:
Other explanation
5. Structured body excluding in consolidate financial statement
Explanation:
6.Other
X. Disclosure of risks relating to financial instrumentsOur business operation makes the Company exposed to various financial risks: credit risk, liquidity risk andmarket risk (mainly refers to exchange rate risk and interest risk). The general risk management policy of theCompany is to minimize potential negative effects on our financial performance in view of the unforeseeablefinancial market.
(i) Credit riskCredit risk refers to the risk of a financial loss caused by the counter party’s failure to fulfill its contractualobligations.The credit risk mainly arises from monetary funds, account receivable and other account receivable so on. Themanagement 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 andmedium-sized commercial banks and other financial institutions. The management believes that these commercialbanks have high reputation and asset status and have no major credit risk, and won't create any major lossescaused by the breach of contract of the opposite side.
For account receivables and other account receivables, the Company establishes relevant policies to controlexposure 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 marketconditions, and set corresponding credit terms. Customers’ credit history would be regularly monitored by theCompany. 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 31 December 2020, the account receivable from top five customers accounted for 35.48% of the Company’stotal account receivable.
The maximum credit risk exposure equals to the carrying value of each financial asset in balance sheet (includingderivative financial instrument). The Company has not provided any guarantee which would otherwise make theCompany exposed to credit risk except for the financial guarantee carried in Note “X.Related party and relatedtransaction”
(ii) Liquidity riskLiquidity risk refers to the risk that a company will run short of funds to meet its obligations settled by deliveringcash or other financial assets.
The finance department continues to monitor capital requirement for short and long term, to ensure adequate cashreserve. In addition, it continues to monitor whether borrowing agreement is complied with, and seeks forcommitment from major financial institutions for provision of sufficient back-up fund, so as to satisfy capitalrequirement in a short and long term.
(iii) Market riskThe market risk of financial instruments refers to the risk that the fair value or future cash flows of financialinstruments will fluctuate due to changes in market prices, including exchange rate risk, interest rate risk and otherprice risks.
1.Interest risk
Interest rate risk refers to the risk that the fair value or future cash flows of financial instruments will fluctuate dueto changes in market interest rates. The Company determines the relative proportions of fixed interest rate andfloating 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 ininterest rates will increase the cost of new interest-bearing debts and the interest expense of the Company’s unpaidinterest-bearing debts with floating interest rates, management will make timely adjustments based on the latestmarket conditions.
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 tothe 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 futureforeign currency transactions which are mainly denominated in US dollar. Our finance department is responsiblefor monitoring scale of foreign currency assets and liabilities and foreign currency transactions, to minimize itsexposure to exchange risks. In reporting period, the Company did not sign forward exchange contract or monetaryexchange contract.
The foreign exchange risk faced by the company mainly comes from financial assets and financial liabilitiesdenominated in US dollars. For the amount of foreign currency financial assets and foreign currency financialliabilities converted into RMB, please refer to Note (56) Foreign Currency Monetary Items of V. ConsolidatedFinancial 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 dueto 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
| Item | Ending fair value | |||
| First-order | Second-order | Third-order | Total | |
| I. Sustaining measured by fair value | -- | -- | -- | -- |
| 1.Financial assets measured by fair value and with variation reckoned into current gains/losses | 621,806.51 | 160,000,000.00 | 160,621,806.51 | |
| (1)Debt instrument investment | 160,000,000.00 | 160,000,000.00 | ||
| (2)Equity instrument investment | 621,806.51 | 621,806.51 | ||
| Other non-current financial assets | 57,500.00 | 57,500.00 | ||
| II. Non-persistent measure | -- | -- | -- | -- |
2. Recognized basis for the market price sustaining and non-persistent measured by fair value onfirst-order
3. Valuation technique and qualitative and quantitative information on major parameters for the fair valuemeasure sustaining and non-persistent on second-order
4. Valuation technique and qualitative and quantitative information on major parameters for the fair valuemeasure sustaining and non-persistent on third-order
5. Adjustment information and sensitivity analysis of unobservable parameters for the fair value measuresustaining and non-persistent on third-order
6. Sustaining items measured by fair value, as for the conversion between at all levels, reasons forconversion and policy for conversion time point
7. Changes of valuation technique in the Period
8. Financial assets and liability not measured by fair value
9.Other
XII. Related party and related transactions
1. Parent company
| Parent company | Registration place | Business nature | Registered capital | Ratio of shareholding on the Company | Ratio of voting right on the Company |
| Shenzhen Food Materials Group Co., Ltd | Shenzhen | Investing in industry, development, operation and management of the own property | 5000 million Yuan | 63.79% | 63.79% |
Explanation on parent company of the enterpriseUltimate controller of the Company is Shenzhen Municipal People’s Government State-owned Assets Supervision & AdministrationCommissionOther 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
Important joint venture and associated enterprise of the Company found more in the Note Shenzhen Municipal People’sGovernment State-owned Assets Supervision & Administration Commission。Other cooperative enterprise and joint venture that have related transaction with the Company in the Period or occurred in previousperiod:
| Joint venture/Associated enterprise | Relationship with the Enterprise |
Other explanation
4.Other related party
| Other related party | Relationship with the Enterprise |
| Shenzhen Agricultural Products Group Co., Ltd | Shareholder of the Company, subsidiary of the actual controller, controlled by the same ultimate controlling party |
| Zhanjiang Haitian Aquatic Feed Co., Ltd | Subsidiary of the actual controller, Controlled by the same ultimate controlling party |
| Dongguan Fruit Vegetable Non-staple Food Trading Market Co., Ltd. | Minority shareholder of controlling subsidiary |
| Taizhong Agricultural Co., Ltd | Subsidiary of the actual controller, Controlled by the same ultimate controlling party |
| Shenzhen Investment Holdings Co., Ltd. | Former shareholder of the Company, Controlled by the same ultimate controlling party |
| Shenzhen Investment Management Co., Ltd | Former shareholder of the Company, Controlled by the same ultimate controlling party |
| Fujian Wuyishan Yuxing Tea Co., Ltd | Minority shareholder of former controlling subsidiary |
| Shenzhen Fruits and Vegetables Trading Co., Ltd | Wholly-owned subsidiary of Shenzhen Agricultural Products Group Co., Ltd |
| Shenzhen Higreen International Agricultural Products Logistic Management Co., Ltd | Controlling subsidiary of Shenzhen Agricultural Products Group Co., Ltd |
| Zhanjiang Changshan (Shenzhen) Ecological Aquaculture Co., Ltd | Has the same parent company |
| Shenzhen Shenliang Cold Transport Co., Ltd. | Holding subsidiary of the company's associated enterprise |
| Shenzhen Yixin Investment Co., Ltd | Former shareholder of Shenzhen Agricultural Products Group Co., Ltd, Controlled by the same ultimate controlling party |
| Guangxi Higreen Agricultural Products International Logistics Co., Ltd. | Wholly-owned subsidiary of Shenzhen Agricultural Products Group Co., Ltd |
| Guangxi Higreen Business Management Co., Ltd. | Controlling subsidiary of Shenzhen Agricultural Products Group Co., Ltd |
| Shenzhen Qianhai Nongmai World E-Commerce Co., Ltd | Controlling subsidiary of Shenzhen Agricultural Products |
| Group Co., Ltd | |
| Shenzhen Shennong Kitchen Co., Ltd | Wholly-owned subsidiary of Shenzhen Agricultural Products Group Co., Ltd |
Other explanation
5. Related transaction
(1) Goods purchasing, labor service providing and receiving
Goods purchasing/labor service receiving
In RMB
| Related party | Related transaction content | Current Period | Approved transaction limit | Whether more than the transaction limit (Y/N) | Last Period |
| Shenzhen Shenliang Cold Transport Co., Ltd. | Warehousing Services/Transportation services | 719,046.39 | |||
| Shenzhen Shenyuan Data Technology Co., ltd. | Information software development | 11,652,658.88 | 14,950,911.00 |
Goods sold/labor service providing
In RMB
| Related party | Related transaction content | Current Period | Last Period |
| Guangxi Higreen Agricultural Products International Logistics Co., Ltd. | Grain and oil sales | 8,240.71 | |
| Guangxi Higreen Business Management Co., Ltd. | Grain and oil sales | 8,240.71 | |
| Shenzhen Qianhai Nongmai World E-Commerce Co., Ltd | Grain and oil sales | 40,700.34 | |
| Shenzhen Duoxi Equity Investment Fund Management Co., Ltd. | Grain and oil sales/Cleaning services fee | 38,083.07 | 3,888.50 |
| Shenzhen Agricultural Products Group Co., Ltd | Grain and oil sales | 56,920.35 | 257,685.89 |
| Shenzhen Shenliang Cold Transport Co., Ltd. | Grain and oil sales/Warehousing Services | 106,873.75 | 659,146.82 |
| Shenzhen Shennong Kitchen | Grain and oil sales | 108,027.61 |
| Co., Ltd | |||
| Shenzhen Investment Holdings Co., Ltd. | Grain and oil sales | 24,250.00 | |
| Shenzhen Shenyuan Data Technology Co., ltd. | Sales of tea | 8,217.70 | 13,769.92 |
| Shenzhen Agricultural Products Group Co., Ltd | Sales of tea | 2,299.12 | |
| Shenzhen Food Materials Group Co., Ltd | Asset Management | 3,725,827.37 | 2,204,153.02 |
| Shenzhen Food Materials Group Co., Ltd | Sales of tea | 2,600.00 | 19,650.58 |
| Shenzhen Shichumingmen Catering Management Co., Ltd. | Grain and oil sales | 59.60 | |
| Shenzhen Higreen International Agricultural Products Logistic Management Co., Ltd | Sales of tea | 6,557.52 |
Explanation on goods purchasing, labor service providing and receiving
(2) Related trusteeship management/contract & entrust management/ outsourcingTrusteeship management/contract:
In RMB
| Client/Contract-out party | Entrusting party/Contractor | Trustee/assets contract | Trustee /start | Trustee /ends | Managed earnings /pricing of the contract earnings | Managed earnings confirmed in the period / contract earnings |
Related managed/contract:
Entrusted management/outsourcing:
In RMB
| Client/Contract-out party | Entrusting party/Contractor | Trustee/assets contract | Trustee /start | Trustee /ends | Managed earnings /pricing of the contract earnings | Managed earnings confirmed in the period / contract earnings |
Related management/ outsourcing:
(3) Related lease
As a lessor for the Company:
In RMB
| Lessee | Assets type | Lease income recognized in the Period | Lease income recognized last Period |
| Shenzhen Shichumingmen Catering Management Co., Ltd. | Operating site | 666,258.42 | 1,105,650.14 |
| Shenzhen Food Materials Group Co., Ltd | Operating site | 160,571.43 | |
| Shenzhen Shenyuan Data Technology Co., ltd. | Operating site | 433,320.00 | 288,066.67 |
| Shenzhen Duoxi Equity Investment Fund Management Co., Ltd. | Office space | 257,255.00 |
As lessee:
In RMB
| Lessor | Assets type | Lease income recognized in the Period | Lease income recognized last Period |
| Lessor | Assets type | ||
| Shenzhen Investment Holdings Co., Ltd. | Operating site | 2,183,266.63 | |
| Shenzhen Food Materials Group Co., Ltd | Warehouse leasing | 28,434,200.00 | |
| Shenzhen Food Materials Group Co., Ltd | Office space | 680,308.56 | 667,290.27 |
Explanation on related lease
(4) Related guarantee
As guarantor
In RMB
| Secured party | Guarantee amount | Guarantee start date | Guarantee expiry date | Whether the guarantee has been fulfilled |
| Changzhou Shenbao Chacang E-business Co., ltd. | 5,000,000.00 | 2011-12-20 | N |
As secured party
In RMB
| Guarantor | Guarantee amount | Guarantee start date | Guarantee expiry date | Whether the guarantee has been fulfilled |
| Dongguan Fruit Vegetable Non-staple Food Trading Market Co., Ltd. | 33,637,799.68 | 2016-12-27 | 2021-12-26 | N |
| Dongguan Fruit Vegetable Non-staple Food Trading Market Co., Ltd. | 293,579,986.49 | 2018-07-27 | 2032-08-29 | N |
| Dongguan Fruit Vegetable Non-staple Food Trading Market Co., Ltd. | 18,587,157.80 | 2019-01-25 | 2034-10-19 | N |
| Dongguan Fruit Vegetable Non-staple Food Trading Market Co., Ltd. | 45,874,627.78 | 2019-05-09 | 2027-05-08 | N |
Explanation on related guarantee
(5) Related party’s borrowed funds
In RMB
| Related party | Borrowing amount | Starting date | Maturity date | Note |
| Borrowing | ||||
| Lending | ||||
(6) Related party’s assets transfer and debt reorganization
In RMB
| Related party | Related transaction content | Current Period | Last Period |
(7) Remuneration of key manager
In RMB
| Item | Current Period | Last Period |
(8) Other related transaction
6. Receivable and payable of related party
(1) Receivable item
In RMB
| Item Name | Related party | Ending balance | Opening balance | ||
| Book balance | Bad debt provision | Book balance | Bad debt provision | ||
| Account receivable | |||||
| Shenzhen Shenliang Cold Transport Co., Ltd. | 113,286.17 | 7,029.57 | |||
| Shenzhen Shennong Kitchen Co., Ltd | 63,672.00 | 636.72 | |||
| Shenzhen Duoxi Equity Investment Fund Management Co., Ltd. | 8,701.00 | 87.01 | |||
| Shenzhen Qianhai Nongmai World E-Commerce Co., Ltd | 38,259.42 | 382.59 | |||
| Shenzhen Food Materials Group Co., Ltd | 740,878.31 | 7,408.78 | |||
| Shenzhen Agricultural Products Group Co., Ltd | 2,598.00 | 25.98 | |||
| Other account receivable | |||||
| Shenzhen Shenliang Cold Transport Co., Ltd. | 578.00 | 5.78 | 3,831.12 | ||
| Shenzhen Higreen International Agricultural Products Logistic | 50,000.00 | 50,000.00 | |||
| Management Co., Ltd | |||||
| Zhanjiang Changshan (Shenzhen) Ecological Aquaculture Co., Ltd | 5,520.00 | 5,520.00 | |||
| Shenzhen Shenyuan Data Technology Co., ltd. | 8,972,895.54 | 89,728.96 | |||
| Changzhou Shenbao Chacang E-business Co., ltd. | 24,494,677.07 | 22,007,578.79 | 24,350,611.65 | 21,803,513.37 | |
| Shenzhen Shichumingmen Catering Management Co., Ltd. | 2,092,197.67 | 581,383.34 | 1,382,651.77 | 469,107.98 | |
| Shenzhen Investment Holdings Co., Ltd. | 415,644.52 | 415,644.52 |
(2)Payable item
In RMB
| Item Name | Related party | Ending book balance | Opening book balance |
| Dividend payable | |||
| Shenzhen Investment Management Co., Ltd | 2,690,970.14 | 2,690,970.14 | |
| Other account payable | |||
| Shenzhen Shenliang Cold Transport Co., Ltd. | 2,790.00 | 2,790.00 | |
| Shenzhen Food Materials Group Co., Ltd | 146,520,998.86 | 219,472.47 | |
| Zhanjiang Changshan (Shenzhen) Ecological Aquaculture Co., Ltd | 8,009,954.17 | 7,988,954.17 |
| Shenzhen Duoxi Equity Investment Fund Management Co., Ltd. | 41,486.00 | 41,486.00 | |
| Shenzhen Shichumingmen Catering Management Co., Ltd. | 184,275.00 | ||
| Shenzhen Investment Management Co., Ltd | 3,510,297.20 | 3,510,297.20 | |
| Account received in advance | |||
| Shenzhen Shenliang Cold Transport Co., Ltd. | 210.00 |
7. Related party commitment
8.Other
XIII. Share-based payment
1. Overall situation of share-based payment
□ Applicable √ Not applicable
2. Share-based payment settled by equity
□ Applicable √ Not applicable
3. Share-based payment settled by cash
□ Applicable √ Not applicable
4. Modification and termination of share-based payment
5.Other
XIV. Commitment or contingency
1. Important commitments
Important commitments on balance sheet dateThe Company has no important commitments that need to disclosed up to 31 December 2020.
2. Contingency
(1) Contingency on balance sheet date
2.1 Lawsuits
2.1.1 Contract disputes between Hualian Grain & Oil and Zhuhai Doumen Huabi Feed FactoryOn December 9, 2004, Hualian Grain & Oil signed an purchase and sale contract with Zhuhai Doumen HuabiFeed Factory to sell 2,000.00 tons of corn to it, with a total payment of 2,396,300 yuan. The payment has not beenrecovered. In April 2005, Hualian Grain & Oil discovered that Zhuhai Doumen Huabi Feed Factory had basicallystopped production, the goods were transferred, and the legal representative Liang Dongxing had absconded. OnJuly 2, 2005, the public security organs arrested Liang Dongxing and brought him to justice. Hualian Grain & Oilhas filed a lawsuit against him and won the case. The case has been closed and is currently being executed. Thedefendant shall pay liquidated damages of 239,600 yuan to the plaintiff; The case processing fee of 33,200 yuanshall be borne by the defendant.
As of December 31, 2020, Hualian Grain & Oil had receivable payments of 2,396,300 yuan from Zhuhai DoumenHuabi Feed Factory, and Hualian Grain & Oil had made 100.00% bad-debt provisions for this payment.
2.1.2 Disputes over import agency contract among SZCG, Hualian Grain & Oil, and Guangzhou Jinhe Feed Co.,Ltd. and Huang XianningFrom October 2005 to January 2007, SZCG and Hualian Grain & Oil signed 20 "Import Agency Contracts" withGuangzhou Jinhe Feed Co., Ltd. (hereinafter referred to as "Guangzhou Jinhe"), which agreed that SZCG andHualian Grain & Oil would agent Guangzhou Jinhe to import Peruvian fish meal. In August 2007, Hualian Grain& Oil, Guangzhou Jinhe, and Huang Xianning signed the "Guarantee Contract", which agreed that HuangXianning would guarantee the timely payment of Guangzhou Jinhe's payables under all trade contracts signedbetween Hualian Grain & Oil and Guangzhou Jinhe. Later, due to Guangzhou Jinhe's failure to pay the paymentfor goods and the import agency fees in full, SZCG and Hualian Grain & Oil filed a lawsuit with the FutianDistrict People's Court of Shenzhen.
On February 16, 2015, the Futian District People's Court of Shenzhen issued a judgment of first instance ([2014]SFFMECZ No. 786), ruling that Guangzhou Jinhe should pay 10,237,400 yuan to SZCG and Hualian Grain & Oil,and bear the litigation fee of 83,200 yuan; Huang Xianning does not need to bear joint and several liability forcompensation.
As Guangzhou Jinhe dissatisfied with the above-mentioned first-instance judgment, it appealed to the ShenzhenIntermediate People's Court, claiming that the prosecution of SZCG and Hualian Grain & Oil had exceeded thelimitation of action. On March 30, 2017, the Shenzhen Intermediate People's Court issued a second-instancejudgment ([2015] SZFSZZ No. 1767 Civil Judgment), which rejected the appeal of Guangzhou Jinhe and upheld
the original judgment.
The case is currently still being executed, and the other party has not paid any money. SZCG has made a provisionfor bad debts at a rate of 100.00% for the receivable payment of 10,455,600 yuan from Guangzhou Jinhe.
According to the "Letter of Commitment from Shenzhen Fude State Capital Operation Co., Ltd. on the PendingLitigation of Shenzhen Cereals Group Co., Ltd.", Shenzhen Fude State Capital Operation Co., Ltd. (now renamedShenzhen Food Materials Group Co., Ltd.) will bear the compensation or losses caused by the lawsuit on itsbehalf for any claims, compensation, losses or expenditures caused by the disputes over import agency contractamong SZCG and its holding subsidiaries with Guangzhou Jinhe and Huang Xianning.
2.1.3 Contract disputes between Hualian Grain & Oil and Foshan Huaxing Feed FactoryIn August and October 2007, Hualian Grain & Oil sold products to Foshan Shunde Huaxing Feed Factory andreceived commercial acceptance bills totaling 2,958,600 yuan. Due to the company’s failure to repay the overduepayment, Hualian Grain & Oil filed a lawsuit with the Shunde District People’s Court of Foshan City on October29, 2007, requesting Foshan Shunde Huaxing Feed Factory to repay the payment and pay the correspondinginterest. From June to July 2011, a total of 1,638,900 yuan of the company’s bankruptcy assets was recovered. Asof December 31, 2020, Hualian Grain & Oil had a receivable payment of 1,319,700 yuan from Foshan ShundeHuaxing Feed Factory. This amount has been withdrawn bad debt reserves by 100.00%.
2.1.4 Mung bean business disputes between SZCG and Jilin Tongyu County Shengda CompanyIn August 2007, SZCG and Tongyu County Shengda Cereals and Oils Trading Co., Ltd. (hereinafter referred to as"Shengda Company") signed the "Mung Bean Entrusted Acquisition, Processing and Storage Contract". FromOctober 2007 to May 2008, a total of 4,918.00 tons of mung beans were purchased, and the Company had paid 30million yuan for purchasing. The contract stipulated that Shengda Company has the obligation to assist in the saleof the goods on behalf of the agent and buy back after the entrusted acquisition is completed. Shengda Companydid not fully fulfilled its obligations, and SZCG has also carried out various forms of collection. In September2010, SZCG sued Shengda Company and demanded that it should repay the arrears and interest. Both partiesreached a settlement during the trial, and the Futian District People's Court of Shenzhen issued a "paper of civilmediation". However, Shengda Company still did not fully fulfill its obligation of repayment. SZCG has appliedto the court for compulsory execution, as of December 31, 2020, the accounts receivables were 5,602,500 yuan,and the execution of the remaining amount has greater uncertainty. The Company has made a full provision forbad debts of 5,602,500 yuan for this payment.
2.1.5 Disputes over loan contract among Changzhou Shenbao Chacang E-business Co., ltd., the Company andShenzhen Agricultural Products Financing Guarantee Co., Ltd.
On July 15, 2016, Shenzhen Agricultural Products Financing Guarantee Co., Ltd. ("Agricultural Products
Guarantee" for short) submitted a "Civil Complaint" to the Futian District People's Court of Shenzhen, requiringChangzhou Shenbao Chacang E-business Co., ltd. ("Changzhou Shenbao Chacang " for short) to repay the loanprincipal of 5.0 million yuan, interest of 353,900 yuan, and penalty interest (penalty interest is temporarilycalculated from September 7, 2013 according to the annual standard of 21.6% .The defendant ChangzhouShenbao Chacang shall, within ten days from the date of the judgment coming into effect, pay the plaintiff theattorney's fee of 193,400 yuan as a guarantee for agricultural products. Refusing the plaintiff's other claims foragricultural product guarantee. The case acceptance fee of 73,600 yuan shall be borne by the defendantChangzhou Shenbao Chacang of 71,900 yuan and the plaintiff shall bear 1,700 yuan. Preservation fee of 5,000yuan, by the defendant Changzhou Shenbao Chacang burden. On May 31, 2017, Futian District People's Court ofShenzhen made a judgment of first instance, ruling Changzhou Shenbao Chacang to repay the loan principal of
5.0 million yuan plus interest and penalty interest. The Company does not have to bear joint and several liabilitiesfor the loan of 5.0 million yuan of Changzhou Shenbao Chacang .
On July 4, 2017, Agricultural Products Guarantee filed an appeal, and on October 13, 2017, the ShenzhenIntermediate People's Court held a second-instance trial. On April 26, 2019, the Shenzhen Intermediate People'sCourt issued a civil judgment (Civil Judgment (2017) Yue 03 Min Zhong No. 12296), ruling that the Companyshall be jointly and severally liable for the debts of Changzhou Shenbao Chacang within the range of 3.5 millionyuan . The Company has the right to claim compensation from Changzhou Shenbao Chacang after theliquidation on its behalf. At present, the judgment has come into effect and is still in the execution stage.As of December 31, 2020, the Company confirmed estimated liabilities of 3.5 million yuan.
2.1.6 Contract disputes of the Company’s subsidiaries, Shenbao Rock Tea, Jufangyong Holdings, Mount WuyiJiuxing 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., and Chen Yuxing, Chen Guopeng
On September 22, 2016, Jufangyong Holdings, Xingjiu Tea Co., Ltd., Yuxing Company, Chen Yuxing and ChenGuopeng signed the "Formal Agreement Regarding the Separation of Fujian Wuyishan Shenbao Yuxing Tea Co.,Ltd.", according to the separation agreement, the original Shenbao Yuxing Company was separated. After theseparation, Jufangyong Holdings holds 100.00% equity of the newly established company (i.e. Shenbao RockTea), and Yuxing Company and Xingjiu Tea Company jointly hold 100.00% equity of the surviving company(Jiuxing Company); Shenbao Rock Tea receives accounts receivable of 7,273,800 yuan, and Jiuxing Companyshall ensure the realization of 2 million yuan within 1 year after the separation, and the remaining amount shall bereturned within 2 years. As the actual controllers of Jiuxing Company, Yuxing Company, and Xingjiu TeaCompany, Chen Yuxing and Chen Guopeng assume joint and several joint guarantee responsibilities to ShenbaoRock Tea and Jufangyong Holdings for all the obligations and responsibilities stipulated in the "SeparationAgreement".
As of September 22, 2018, the time limit for the realization of the receivables of the four companies stipulated by
the "Separation Agreement" had expired, and Shenbao Rock Tea still had outstanding amount of 5,212,300 yuan.On December 3, 2018, Shenbao Rock Tea and Jufangyong Holding applied to the Shenzhen Court of InternationalArbitration (Shenzhen Arbitration Commission) for arbitration in respect of the above matters, requesting JiuxingCompany to pay Shenbao Rock Tea 5,272,900 yuan, the liquidated damages are 1,581,900 yuan, totaling6,854,800 yuan and requesting Yuxing Company, Xingjiu Tea Company, Chen Yuxing and Chen Guopeng to bearjoint and several liabilities.
On April 18, 2019, the Shenzhen Court of International Arbitration opened a court session to hear the arbitrationcase. As related matters have yet to be determined and ascertained, both parties involved in the case should submittheir defense materials to the arbitration court. At present, the Shenzhen Court of International Arbitration has notyet issued an arbitration award on this case.
As of the date of approval for the report of this financial statement, the Shenzhen Arbitration Commission has notyet determined the arbitrator and the date of the hearing. As of December 31, 2020, the Company has accrued atotal of 4,469,500 yuan for bad-debt reserves.
2.1.7 Contract disputes between Hualian Grain & Oil Company and Liangshuntong Company
On July 3, 2020, the Futian District People’s Court issued a civil judgment of the first instance ([2019] Yue 0304Min Chu No. 49562), which judged: 1. The plaintiff Liangshuntong Company should pay 595,800 yuan toHualian Grain & Oil; 2. Rejected Liangshuntong Company’s litigation request; 3. Rejected other litigationrequests of Hualian Grain & Oil; 4. The plaintiff Liangshuntong Company should pay in advance the litigation feeof 208,900 yuan, which should be assumed by the plaintiff, and the defendant Hualian Grain & Oil should pay inadvance the counterclaim fee of 113,000 yuan, of which the plaintiff should assume 1,800 yuan, and the defendantshould assume 111,200 yuan. The plaintiff Liangshuntong Company refused to accept the judgment of the firstinstance and appealed to the Shenzhen Intermediate People's Court. At present, the Shenzhen IntermediatePeople's Court has accepted the appeal case, and the second instance court date is June 8, 2021.On December 31, 2020, the Futian District People’s Court served the "Civil Judgment" of the first instance ([2020]Yue 0304 Min Chu No. 2824),, which judged: 1. Liangshuntong Company shall pay Hualian Grain & Oil anadvance fee of 461,900 yuan and capital cost of 4,030,000 yuan within ten days from the date when the judgmentbecomes legally effective; 2. Liangshuntong Company shall pay the capital occupation fee to Hualian Grain & Oilwithin ten days from the date when the judgment becomes legally effective (Based on 461,900 yuan, calculatefrom 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 42,700 yuan shall be borne by Liangshuntong Company. Liangshuntong Company submittedan appeal to the Shenzhen Intermediate People's Court on January 22, 2021.
2.1.8 Disputes over the Construction Contract between Hongxinglong and Zhishengda Company
In April 2020, Zhishengda Company filed a lawsuit with Heilongjiang Hongxinglong People’s Court with thefollowing claims: 1. Request the People’s Court to confirm that the "Letter on Rectification of Completed Projectsand Cancellation of Not Constructed Projects" sent by Hongxinglong on April 7, 2020 does not have the effect ofcanceling the contract, the cancellation of the contract made by it is invalid, and judge that the defendant shouldcontinue to perform the contract (the project cost required to perform the contract was 5,137,800 yuan). 2. Thelitigation fee and other legal costs should be assumed by Hongxinglong.
On July 29, 2020, Hongxinglong filed a counterclaim with the Heilongjiang Hongxinglong People's Court withthe following claims: 1. Request the court to confirm the validity of the cancellation of the construction contractbetween Hongxinglong and Zhishengda in accordance with the law. 2. Request the court to rule that theZhishengda should pay Hongxinglong liquidated damages of 1,003,200 yuan, of which liquidated damages foroverdue completion of the project of 253,200 yuan, repair costs for unqualified project quality of about 240,000yuan (the specific amount is to be determined by a third party), liquidated damages for project manager’s absencefrom the construction site without permission of 500,000 yuan, liquidated damages for the migrant worker’scollective petitions of 10,000 yuan. 3. The counterclaim fee and appraisal fee shall be borne by Zhishengda. Atpresent, 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.
2.1.9 Contract disputes between Jufangyong Commercial and Trading and Xingfu Feixiang CompanyIn July 2020, Jufangyong Commercial and Trading had filed a lawsuit with People’s Court of Hangzhou XiaoshanDistrict due to the rent arrears of Xingfu Feixiang, and the amount involved was 2,454,700 yuan. The defendantwas ordered to pay the Western Restaurant 699,700 yuan for the cooperation fee on July 1, 2019 and September10, 2019 as well as the water and electricity charges (calculated according to the actual amount). Order thedefendant to pay liquidated damages of 515,300 yuan. Order the defendant to pay liquidated damages (from April16, 2020 to the date of repayment, based on 3,154,400 yuan, with a monthly interest rate of 2%). Order that thelitigation costs of this case shall be borne by the defendant.Because Xingfu Feixiang filed for bankruptcy and thecourt has accepted the designated administrator, the court ruled in August to suspend the trial and directly declarethe creditor's rights to the administrator, and the first creditors' meeting was held in September. On December 23,2020, the People’s Court of Hangzhou Xiaoshan District resumed trial of the case, the asset manager issued acreditor’s right voucher, deducting 980,000 yuan paid to the airport and rent reduction of 220,000 yuan, confirmedthe principal of the creditor’s rights of 2,422,000 yuan, and the interest of 166,000 yuan, a total of 2,588,000 yuan,and we are now awaiting a judgment. Currently, Xingfu Feixiang's bankruptcy administrator, Shanghai CityDevelopment (Hangzhou) Law Firm, is working on the inspection of assets, we are now waiting for the propertydistribution plan.
2.2 Guarantee
2.2.1 Subsidiary of the Company -SZCG provide a guarantee to its subsidiary -Dongguan LogisticsSZCG provide a guarantee to Dongguan Logistics for the application of loans, amount of guarantee is 552.6871million yuan. The loan is not yet due for repayment.
2.2.2Associated guarantees and restricted assets
Restricted assets found more in the Note VII (81), associated guarantee found more in Note XII (5)
(2) If the Company has no important contingency need to disclosed, explain reasonsThe Company has no important contingency that need to disclose.
3. Other
XV. Events after balance sheet date
1. Important non adjustment matters
In RMB
| Item | Content | Impact on financial status and operation results | Reasons of fails to estimate the impact |
2. Profit distribution
| Profit or dividend to be distributed | According to the resolution of 14th session of 10th BOD, the profit distribution plan for year of 2020 is: Based on total share capital of 1,152,535,254 on 31 Dec 2020, distributed cash dividend of 2 Yuan (tax included) for every 10 shares to all shareholders with zero share bonus (tax included), and no share converted from capital reserve, a total of 230,507,050.80 Yuan cash are distributed. |
In RMB
3. Sales return
4. Other events after balance sheet date
XVI. Other important events
1. Previous accounting errors collection
(1) Retrospective restatement
In RMB
| Content of accounting error correction | Procedures | Items impact during vary comparative period | Accumulated impact |
(2)Prospective application
| Content of accounting error correction | Approval procedure | Reasons for adopting the prospective applicable method |
2. Debt restructuring
3. Assets exchange
(1) Exchange of non-monetary assets
(2) Other assets exchange
4. Pension plan
For details of the main contents and important changes of the pension plan, please refer to the relevant description ofthe defined benefit plan in (22) Staff remuneration: “2.Accounting treatment for post employment benefits”carried under the “Note III. Important Accounting Policy and Estimate”
5. Discontinuing operation
In RMB
| Item | Revenue | Expenses | Total profit | Income tax expenses | Net profit | Profit of discontinuing operation attributable to owners of parent company |
Other explanation
6. Segment
(1) Recognition basis and accounting policy for reportable segment
(2) Financial information for reportable segment
In RMB
| Item | Offset between segment | Total |
(3)The Company has no segment, or unable to disclose total assets and liability of the segment, explainreasons
(4)Other explanation
7. Other major transaction and events makes influence on investor’s decision
8. Other
XVII. Principle notes of financial statements of parent company
1.Account receivable
(1)Account receivable classify by category
In RMB
| Category | Ending balance | Opening balance | ||||||||
| Book balance | Bad debt provision | Book value | Book balance | Bad debt provision | Book value | |||||
| Amount | Ratio | Amount | Accrual ratio | Amount | Ratio | Amount | Accrual ratio | |||
| Account receivable with bad debt provision accrual on a single basis | 28,453.08 | 0.69% | 28,453.08 | 100.00% | 28,453.08 | 76.27% | 28,453.08 | 100.00% | ||
| Including: | ||||||||||
| 28,453.08 | 0.69% | 28,453.08 | 100.00% | 28,453.08 | 76.27% | 28,453.08 | 100.00% | |||
| Account receivable with bad debt provision accrual on portfolio | 4,098,218.40 | 99.31% | 10,537.22 | 0.26% | 4,087,681.18 | 8,852.60 | 23.73% | 885.26 | 10.00% | 7,967.34 |
| Including: | ||||||||||
| Portfolio of sales receivable | 796,996.91 | 19.31% | 10,537.22 | 1.32% | 786,459.69 | 8,852.60 | 23.73% | 885.26 | 10.00% | 7,967.34 |
| Object-specific portfolio | 3,301,221.49 | 80.00% | 3,301,221.49 | |||||||
| Total | 4,126,671.48 | 100.00% | 38,990.30 | 4,087,681.18 | 37,305.68 | 100.00% | 29,338.34 | 7,967.34 | ||
Accrual of bad debt provision on single item :
In RMB
| Name | Ending balance | |||
| Book balance | Bad debt provision | Accrual ratio | Accrual causes | |
| Other accrual on single basis | 28,453.08 | 28,453.08 | 100.00% | Slightly possibly taken back |
| Total | 28,453.08 | 28,453.08 | -- | -- |
Accrual of bad debt provision on single item:
In RMB
| Name | Ending balance | |||
| Book balance | Bad debt provision | Accrual ratio | Accrual causes | |
Accrual of bad debt provision on portfolio:
In RMB
| Name | Ending balance | ||
| Book balance | Bad debt provision | Accrual ratio | |
| Portfolio of sales receivable | 796,996.91 | 10,537.22 | 1.32% |
| Object-specific portfolio | 3,301,221.49 | ||
| Total | 4,098,218.40 | 10,537.22 | -- |
Explanation on portfolio determines:
Accrual of bad debt provision on portfolio:
In RMB
| Name | Ending balance | ||
| Book balance | Bad debt provision | Accrual ratio | |
Explanation on portfolio determines:
If the provision for bad debts of account receivable is made in accordance with the general model of expected credit losses, pleaserefer to the disclosure of other account receivables to disclose related information about bad-debt provisions:
□ Applicable √ Not applicable
By account age
In RMB
| Account age | Book balance |
| Within one year(including one year) | 4,089,365.80 |
| 2-3 years | 8,852.60 |
| Over 3 years | 28,453.08 |
| Over 5 years | 28,453.08 |
| Total | 4,126,671.48 |
(2)Bad debt provision accrual, collected or reversal in the period
Bad debt provision accrual in the period:
In RMB
| Category | Opening balance | Amount changed in the period | Ending balance | |||
| Accrual | Collected or reversal | Written off | Other | |||
| Accrual of bad debt provision on single item | 28,453.08 | 28,453.08 | 28,453.08 | |||
| Sales receivable | 885.26 | 885.26 | 9,651.96 | 10,537.22 | ||
| Total | 29,338.34 | 29,338.34 | 9,651.96 | 38,990.30 | ||
Including major amount bad debt provision that collected or reversal in the period:
In RMB
| Enterprise | Amount collected or reversal | Collection way |
(3) Account receivable actually written-off in the period
In RMB
| Item | Amount written-off |
Including major account receivable written-off:
In RMB
| Enterprise | Nature | Amount written-off | Written-off causes | Procedure of written-off | Resulted by related transaction (Y/N) |
Explanation on account receivable written-off:
(4)Top 5 account receivables at ending balance by arrears party
In RMB
| Enterprise | Ending balance of accounts receivable | Proportion in total receivables at ending balance (%) | Ending balance of bad debt reserve |
| First | 3,301,221.49 | 80.00% | |
| Second | 739,878.31 | 17.93% | 7,398.78 |
| Third | 48,266.00 | 1.17% | 482.66 |
| Fourth | 18,456.50 | 0.45% | 18,456.50 |
| Fifth | 9,996.58 | 0.24% | 9,996.58 |
| Total | 4,117,818.88 | 99.79% |
(5)Account receivables derecognized due to the transfer of financial assets
(6)Amount of assets and liabilities that formed the by transferring of account receivable and continue to beinvolvedOther explanation:
2. Other account receivable
In RMB
| Item | Ending balance | Opening balance |
| Dividend receivable | 390,000,000.00 | 260,000,000.00 |
| Other account receivable | 502,105,968.23 | 734,149,247.39 |
| Total | 892,105,968.23 | 994,149,247.39 |
(1)Interest receivable
1)Category of interest receivable
In RMB
| Item | Ending balance | Opening balance |
2) Important overdue interest
| Borrower | Ending balance | Overdue time | Overdue causes | Whether impairment occurs and its judgment basis |
Other explanation:
3)Accrual of bad debt provision
□ Applicable √ Not applicable
(2)Dividend receivable
1)Category of dividend receivable
In RMB
| Item (or the invested entity) | Ending balance | Opening balance |
| SZCG | 390,000,000.00 | 260,000,000.00 |
| Total | 390,000,000.00 | 260,000,000.00 |
2)Important dividend receivable with account age over one year
In RMB
| Item (or the invested entity) | Ending balance | Account age | Reasons for not collection | Whether impairment occurs and its judgment basis |
3)Accrual of bad debt provision
□ Applicable √ Not applicable
Other explanation:
(3)Other account receivable
1)Other account receivable classify by nature
In RMB
| Nature | Ending book balance | Opening book balance |
| Margin and deposit | 73,975.47 | |
| Current payments and others | 529,477,457.08 | 761,135,520.91 |
| Total | 529,551,432.55 | 761,135,520.91 |
2)Accrual of bad debt provision
In RMB
| Bad debt provision | Phase I | Phase II | Phase III | Total |
| Expected credit losses over next 12 months | Expected credit losses for the entire duration (without credit impairment occurred) | Expected credit losses for the entire duration (with credit impairment occurred) | ||
| Balance on Jan. 1, 2020 | 204,668.96 | 26,781,604.56 | 26,986,273.52 | |
| Balance of Jan. 1, 2020 in the period | —— | —— | —— | —— |
| Current accrual | 53,593.86 | 405,596.94 | 459,190.80 | |
| Balance on 31 Dec. 2020 | 258,262.82 | 27,187,201.50 | 27,445,464.32 |
Change of book balance of loss provision with amount has major changes in the period
□ Applicable √ Not applicable
By account age
In RMB
| Account age | Book balance |
| Within one year(including one year) | 504,057,027.20 |
| 2-3 years | 436,664.33 |
| Over 3 years | 25,057,741.02 |
| 3-4 years | 436,664.33 |
| 4-5 years | 436,664.33 |
| Over 5 years | 24,184,412.36 |
| Total | 529,551,432.55 |
3)Bad debt provision accrual, collected or reversal in the period
Bad debt provision accrual in the period:
In RMB
| Category | Opening balance | Amount changed in the period | Ending balance | |||
| Accrual | Collected or reversal | Written off | Other | |||
| Accrual of bad debt provision on single item | 26,781,604.56 | 405,596.94 | 27,187,201.50 | |||
| Accrual of bad debt provision on portfolio | 204,668.96 | 53,593.86 | 258,262.82 | |||
| Total | 26,986,273.52 | 459,190.80 | 27,445,464.32 | |||
Including major amount with bad debt provision reverse or collected in the period:
In RMB
| Enterprise | Amount reversal or collected | Collection way |
4)Other account receivable actually written-off in the period
In RMB
| Item | Amount written-off |
Including important other account receivable written-off:
In RMB
| Enterprise | Nature | Amount written-off | Written-off causes | Procedure of written-off | Resulted by related transaction (Y/N) |
Explanation on other account receivable written-off:
5)Top 5 other receivables at ending balance by arrears party
In RMB
| Enterprise | Nature | Ending balance | Account age | Ratio in total ending balance of other account receivables | Ending balance of bad debt reserve |
| First | Internal funds | 155,985,833.33 | Within one year | 29.46% | |
| Second | Internal funds | 142,591,610.30 | Within one year | 26.93% | |
| Three | Internal funds | 120,336,677.69 | Within one year | 22.72% | |
| Fourth | Internal funds | 56,307,019.04 | Within one year | 10.63% | |
| Fifth | Current payments | 24,164,677.07 | Over 5 years | 4.56% | 21,743,578.79 |
| Total | 499,385,817.43 | 94.30% | 21,743,578.79 |
6) Other account receivables related to government grants
In RMB
| Enterprise | Government grants | Ending balance | Ending account age | Time, amount and basis for collection predicted |
7)Other receivables derecognized due to the transfer of financial assets
8)Amount of assets and liabilities that formed the by transferring of other receivable and continue to beinvolvedOther explanation:
3、Long-term equity investment
In RMB
| Item | Ending balance | Opening balance | ||||
| Book balance | Impairment provision | Book value | Book balance | Impairment provision | Book value | |
| Investment for subsidiary | 3,713,214,425.09 | 5,500,000.00 | 3,707,714,425.09 | 3,713,214,425.09 | 3,713,214,425.09 | |
| Investment for associates and joint venture | 2,927,628.53 | 2,927,628.53 | 5,139,058.21 | 2,927,628.53 | 2,211,429.68 | |
| Total | 3,716,142,053.62 | 8,427,628.53 | 3,707,714,425.09 | 3,718,353,483.30 | 2,927,628.53 | 3,715,425,854.77 |
(1) Investment for subsidiary
In RMB
| The invested entity | Opening balance(book value) | Current changes (+, -) | Ending balance(book value) | Ending balance of impairment provision | |||
| Additional investment | Capital reduction | Accrual of impairment provision | Other | ||||
| Shenbao Property | 2,550,000.00 | 2,550,000.00 | |||||
| Shenbao Industry & Trade | 5,500,000.00 | 5,500,000.00 | 0.00 | 5,500,000.00 | |||
| Shenbao Sanjing | 80,520,842.36 | 80,520,842.36 | |||||
| Shenbao Huacheng | 168,551,781.80 | 168,551,781.80 | |||||
| Huizhou Shenbao | 60,000,000.00 | 60,000,000.00 | |||||
| Shenbao Technology | 54,676,764.11 | 54,676,764.11 | |||||
| Shenbao Investment | 50,000,000.00 | 50,000,000.00 | |||||
| SZCG | 3,291,415,036.82 | 3,291,415,036.82 | |||||
| Total | 3,713,214,425.09 | 5,500,000.00 | 3,707,714,425.09 | 5,500,000.00 | |||
(2)Investment for associates and joint venture
In RMB
| Investment company | Opening balance(book value) | Current changes (+, -) | Ending balance(book value) | Ending balance of impairment provision | |||||||
| Additional investment | Capital reduction | Investment gains recognized under equity | Other comprehensive income adjustment | Other equity change | Cash dividend or profit announced to issued | Accrual of impairment provision | Other | ||||
| I. Joint venture | |||||||||||
| II. Associated enterprise | |||||||||||
| Shenzhen Shenbao (Liaoyuan) Industrial Company | 57,628.53 | ||||||||||
| Shenzhen Shenbao (Xinmin) Foods Co., Ltd | 2,870,000.00 | ||||||||||
| Guangzhou Shenbao Mendao Tea Co., Ltd | 2,211,429.68 | 2,211,429.68 | 0.00 | ||||||||
| Subtotal | 2,211,429.68 | 2,211,429.68 | 2,927,628.53 | ||||||||
| Total | 2,211,429.68 | 2,927,628.53 |
(3)Other explanation
4. Operating revenue and operating cost
In RMB
| Item | Current Period | Last Period | ||
| Revenue | Cost | Revenue | Cost | |
| Main business | 2,937,704.33 | 2,935,769.97 | 33,297,047.52 | 30,082,764.02 |
| Other business | 3,849,941.90 | 471,590.33 | ||
| Total | 6,787,646.23 | 3,407,360.30 | 33,297,047.52 | 30,082,764.02 |
Revenue-related information:
In RMB
| Contract classification | Division 1 | Division 2 | Total | |
| Including: | ||||
| Including: | ||||
| Including: | ||||
| Including: | ||||
| Including: | ||||
| Including: | ||||
| Including: |
Information relating to performance obligations:
NilInformation 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 buthave not yet been fulfilled or have not done with fulfillment is 411.00 yuan, among them, 0.00 yuan of revenue is expected to berecognized in 2021, 0.00 yuan of revenue is expected to be recognized in 2022, and 0.00 yuan of revenue is expected to berecognized in 2023.Other explanation:
5. Investment income
In RMB
| Item | Current Period | Last Period |
| Long-term equity investment income measured by equity | -1,614,296.02 | |
| Investment income from disposal of long-term equity investment | 2,288,570.32 | -109,778.22 |
| Investment income during the period of tradable financial assets hold | 392,551.01 | |
| Dividend | 390,473,276.41 | 289,407,372.80 |
| Income from financial products | 1,884,298.10 | |
| Total | 393,154,397.74 | 289,567,596.66 |
6. Other
XVIII. Supplementary information
1. Current non-recurring gains/losses
√ Applicable □Not applicable
| Item | Amount | Note |
| Gains/losses from the disposal of non-current asset | 2,072,531.42 | |
| Tax refund, breaks approved beyond the authority or without official approval documents | ||
| Governmental subsidy reckoned into current gains/losses (not including the subsidy enjoyed in quota or ration according to national standards, which are closely relevant to enterprise’s business) | 18,503,372.31 | |
| Fund possession cost reckoned in current gain/loss charged from non-financial enterprise | ||
| When an enterprise acquires a subsidiary, associated enterprise and joint venture, the investment cost is less than the income generated by the fair value of the identifiable net assets of the invested entity | ||
| Gains/losses from exchange of non-monetary assets | ||
| Profit and loss of assets delegation on others’ investment or management | 12,655,258.64 | |
| Impairment provision for all assets due to force majeure, such as natural disasters | ||
| Gains/losses of debt restructuring | ||
| Enterprise restructuring costs, such as the staff placement expenses and integration costs etc. | ||
| Gains/losses arising from the transaction whose transaction price is clearly unfair exceed the fair value | ||
| Net gains/losses of the current period from beginning of the period to date of consolidation for those subsidiary arising from enterprise combined under the same control | ||
| Gains/losses arising from the contingencies unrelated to the normal operation of the Company | ||
| Gains and losses from change of fair values of held-for-transaction financial assets, derivative financial assets, held-for-transaction financial liability and derivative financial liability except for the effective hedge business related to normal business of the Company, and investment income from disposal of tradable financial assets, derivative financial assets, tradable financial liability, derivative financial liability and other debt investment. | -151,852.20 |
| Switch-back of provision of impairment of account receivable and contract assets which are treated with separate depreciation test | 1,236,198.70 | |
| Gains/losses obtained from external entrusted loans | ||
| Gains/losses arising from change of the fair value of investment real estate, which is subsequently measured using the fair value model | ||
| Impact on current gains/losses while a one-time adjustment to the current gains/losses, in accordance with the requirement of laws of taxation and accounting and regulations. | ||
| Income of custody fee from entrusted operations | ||
| Other non-operating income and expenditure except for the aforementioned items | 2,423,255.86 | |
| Other gains/losses items that conform to the definition of non-recurring gains/losses | 496,383.61 | |
| Less: impact on income tax | 5,591,230.45 | |
| Impact on minority interests | 765,895.84 | |
| Total | 30,878,022.05 | -- |
Concerning the extraordinary profit (gain)/loss defined by Q&A Announcement No.1 on Information Disclosure for CompaniesOffering Their Securities to the Public --- Extraordinary Profit/loss, and the items defined as recurring profit (gain)/loss according tothe lists of extraordinary profit (gain)/loss in Q&A Announcement No.1 on Information Disclosure for Companies Offering TheirSecurities to the Public --- Extraordinary Profit/loss, explain reasons
□ Applicable √Not applicable
2. ROE and earnings per share
| Profits during report period | Weighted average ROE | Earnings per share | |
| Basic earnings per share (RMB/Share) | Diluted earnings per share (RMB/Share) | ||
| Net profits belong to common stock stockholders of the Company | 8.99% | 0.3515 | 0.3515 |
| Net profits belong to common stock stockholders of the Company after deducting nonrecurring gains and losses | 8.30% | 0.3247 | 0.3247 |
3. Difference of the accounting data under accounting rules in and out of China
(1) Difference of the net profit and net assets disclosed in financial report, under both IAS (InternationalAccounting Standards) and Chinese GAAP (Generally Accepted Accounting Principles)
√ Applicable □Not applicable
In RMB
| Net profit | Net assets | |||
| Current Period | Last Period | Ending balance | Opening balance | |
| Chinese GAAP | 405,088,385.54 | 363,501,809.52 | 4,595,331,999.76 | 4,420,751,187.57 |
| Items and amount adjusted by IAS: | ||||
| Adjustment for other payable fund of stock market regulation | 1,067,000.00 | 1,067,000.00 | ||
| IAS | 405,088,385.54 | 363,501,809.52 | 4,596,398,999.76 | 4,421,818,187.57 |
(2) Difference of the net profit and net assets disclosed in financial report, under both foreign accountingrules and Chinese GAAP (Generally Accepted Accounting Principles)
□ Applicable √Not applicable
(3) Explanation on data differences under the accounting standards in and out of China; as for thedifferences adjustment audited by foreign auditing institute, listed name of the institute
4. Other
Section XIII. Documents available for Reference
1. Text of financial statement with signature and seals of legal person, person in charge of accounting works andperson in charge of accounting institution;
2. Original audit report with seal of accounting firms and signature and seals of CPA;
3. Original and official copies of all documents which have been disclosed on Securities Times, China SecuritiesJournal, Hong Kong Commercial Daily and Juchao Website (www.cninfo.com.cn) in the report period;
4. Original copies of 2020 Annual Report with signature of the Chairman.